Industrywide Issues

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    Penn State Researchers Claim Too Many Pipelines Threaten Forests

    Researchers from the Department of Ecosystem Science and Management at Penn State have just published a new study/paper in the Journal of Environmental Management titled, “Linear infrastructure drives habitat conversion and forest fragmentation associated with Marcellus shale gas development in a forested landscape” (abstract below). Their thesis: “Fragmentation of ecologically important core forests within the northern Appalachians — driven by pipeline and access road construction — is the major threat posed by shale-gas development, according to researchers, who recommend a change in infrastructure-siting policies to head off loss of this critical habitat.” This isn’t the first time we’ve heard about the hazards of so-called forest fragmentation. Back in 2013 the U.S. Geological Survey published a meme on it too (see USGS Study: Marcellus Drilling Fragmenting Forests in PA). The Penn State researchers maintain clearing pathways for pipelines, and keeping them cleared of trees, is damaging the habitat of some species. The study mentions a lot of other studies, but nowhere (that we could find) does it identify a single, specific species that has supposedly been harmed by such “fragmentation” in forests. The aim, the upshot of this research, seems to be an appeal to regulators to clamp down on the siting of pipelines on PRIVATE (not public) land. It aims to be something the DEP can clutch in its hand and say, “Sorry, we can’t authorize that pipeline ’cause it will cause a break in the forest canopy and certain canopy-dwelling species will be affected.” Right. Excuse us Ms. & Mr. researchers: What about the species that BENEFIT from fragmentation? We didn’t read anything about that in the study. The telltale sign that this is bought-and-paid for propaganda and not real research comes at the end, when you find out it was funded, in part, by the virulently anti-drilling Heinz Foundation…
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    PennFuture Radicals Want to Deny Rural Folks Access to NatGas

    Yesterday MDN reported that NARUC (National Association of Regulatory Utility Commissioners), under the watch care of Pennsylvania Public Utility Commission (PUC) member Rob Powelson, currently the president of NARUC, has launched an effort that tries to help rural (and poor) folks without access to cheap, clean-burning natural gas, get access (see NARUC Creates Group to Spread NatGas Use Far and Wide). This is an honest effort to help an overlooked portion of our population enjoy benefits enjoyed by those who live in urban areas. But the radicals at PennFuture want to block such access–because natural gas is a filthy, vile fossil fuel. Better to keep those idiot hicks in the sticks poor and paying high prices for fuel oil and propane, rather than let them get access to cheap natural gas. That’s the conceited attitude displayed by PennFuture…
    Read More “PennFuture Radicals Want to Deny Rural Folks Access to NatGas”

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    Homeland Security Report Warns of Eco-Terrorism Against Pipeline

    A report compiled and written by the U.S. Dept. of Homeland Security (unclassified) has turned up in the public. The report, titled “Potential Domestic Terrorist Threats to Multi-State Diamond Pipeline Construction Project” (full copy below), warns about eco-terrorism and the potential for “mass casualties” from radicalized environmentalists who are now targeting the Diamond Pipeline Construction Project, due to run from Cushing, OK to a refinery in Memphis, TN–most of it located in the state of Arkansas. “Law enforcement are assessing what environmental extremists did to disrupt Dakota Access Pipeline – Molotov cocktails, rocks, arson, roadblocks, chaining themselves to equipment, improvised explosive devices, etc – and seeing many of the same activities potentially happening around Diamond pipeline,” according to a police representative. The report sees potential danger on two fronts: radical environmentalists, and anti-government militias that don’t like eminent domain being used to force landowners to accept the pipeline across their land. We’ve previously reported on numerous instances of vandalism against drilling and pipeline operations. It’s good to see the government taking such acts of crime seriously–to the point of labeling it domestic terrorism. Why mention a report about a pipeline nowhere near the Marcellus/Utica? Because bombs, equipment vandalism, shootings and all of the things mentioned in this report have happened here before. And because the nutjobs who were active in engaging in such acts against the Dakota Access Pipeline (now built and flowing oil), have promised to bring their lawlessness to our area (see Dakota Access Pipeline Protesters Turn Violent; Coming Here Next?). In fact, some antis are trying to import the Dakota troublemakers into Lancaster County, PA (see PA Anti Hopes to Bring Standing Rock Disaster to Lancaster County). Here’s the lowdown on what may be coming to other states, and eventually, to ours…
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    Japanese Now Own 2/3 of Marcellus-Powered Electric Plant in SEPA

    Two weeks ago MDN brought you the news that Japanese company Sojitz Corporation had purchased a one-third (1/3) interest in the 488-megawatt Marcellus gas-fired electric plant being built in Birdsboro, near Philadelphia (see Japanese Co Buys 1/3 of Marcellus-Powered Electric Plant in SEPA). EmberClear plans to begin construction on the Birdsboro Power project in 2018, with an in-service date of June 2019. Word has just come that a second Japanese company, Tokyo Gas (a regional utility company in Japan) has purchased a one-third (1/3) interest in the Birdsboro project–meaning the Japanese will own 2/3 of the plant. However, investment firm Ares EIF will retain the final one-third ownership and provide “day-to-day management” of the facility. While the exact amount of the transaction was not disclosed, it’s said to be “tens of millions of dollars.” What’s up with Japan buying into our powergen projects? In the case of Tokyo Gas it’s crystal clear–they will participate in every aspect of building this project, so they can take their newfound knowledge back home and apply it there. Or depending on your point of view, you might say they want to steal our technology and trade secrets…
    Read More “Japanese Now Own 2/3 of Marcellus-Powered Electric Plant in SEPA”

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    Thoroughbred Cabot O&G Ready to Bolt When Pipeline Gate Opens

    Cabot Oil & Gas had the highest production in the county with the highest amount of production (Susquehanna County) in 2016 in Pennsylvania. Cabot had the second highest amount of production (coming from that single county) in PA for all of 2016, not far behind Chesapeake Energy. Last year using their “Gen 4” completions in the Marcellus, Cabot increased estimated ultimate recovery (EUR) rates from 3.8 billion cubic feet (Bcf) per 1,000 feet of lateral well to 4.4 Bcf (see Cabot O&G 2016 – Production Grows from 3.8 to 4.4 Bcf per 1K Feet). Cabot gets double the gas per lateral foot of well than some of its competitors. By all accounts, Cabot is the equivalent of a thoroughbred horse. But the Cabot horse is still penned up at the starting gate, waiting for the gate to open. The gate, in this metaphor, is pipeline projects that will carry some of Cabot’s prolific northeastern PA production to other regions where it can fetch a higher price. According to research analyst Michael Fitzsimmons, writing on the Seeking Alpha investor website, Williams’ Atlantic Sunrise Pipeline “will unlock the cage that has kept Cabot Oil & Gas’ reserves bottled up” by flowing an eye-popping 1 Bcf per day of Cabot natgas south…
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    Marcellus/Utica Gas Soon Heading to Florida Penninsula via Sabal Trail

    Click for larger version

    Spectra Energy (and partners NextEra Energy and Duke Energy) are building a $3.2 billion, 515-mile interstate natural gas pipeline in Florida, Georgia and Alabama to deliver Marcellus gas to the southeast. The project, called Sabal Trail Transmission, has been underway for the past three+ years and is due to be completed and online in June–two months from now. Sabal Trail will connect to Williams’ Hillabee Expansion Project, which is a new pipeline spur built off the huge Transco pipeline system (see Williams Building Alabama Pipeline with Marcellus Connection). Williams is reversing a portion of the Transco to bring Marcellus gas south. RBN Energy provides a comprehensive update Sabal Trail and Florida’s “gas thirsty peninsula” that it will serve. RBN says one of the main users of Marcellus gas in Florida will be (yep) electric power generating plants…
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    The Key to Unlocking PA’s NatGas Reserves: Pipelines

    Once the slew of approved and under-construction pipeline projects in the Marcellus/Utica region are done, the M-U region will likely go from providing 20-25% of the nation’s total natural gas production to providing one-third of the country’s total natgas production. This astonishing story of production and pipelines in the northeast is really, at its core, a story about Pennsylvania. According to a recent Reuters article, at least five pipelines capable of transporting a combined 7 billion cubic feet per day (Bcf/d) of natgas from the PA Marcellus/Utica are scheduled to open in 2017, with five more transporting another 5 Bcf/d due for completion in 2018. Pipelines are the key to unlocking Pennsylvania’s vast natgas reserves…
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    PA Teen Sues Trump Over Mythical Man-Made Global Warming

    Eighteen-year-old Sophie Kivlehan has been brainwashed by her parents and grandparents, big believers in the myth of man-made global warming, since she was a tot. Her grandpa, Jim Hansen (astro-physicist at Columbia University) is a smart guy–“perhaps one of the worlds’ most well-known climate scientists.” Grandpa Jim did a good job of making sure young Sophie learned her lessons well–about the evilness of fossil fuels and how Mom Earth is ready to toast–any minute now, thanks to burning fossil fuels. Of course such beliefs must, of necessity, disregard hard scientific facts/data that show temps around Mom Earth aren’t going up and haven’t been for the past 20 years. It’s all about what “might” happen and what’s coming “just around the corner.” All based on cockamamie computer models. The same models can’t predict temperatures and the weather accurately for next week–but boy can they predict that the earth is about to fry. Any year now. But back to you Sophie. She’s decided four months in office for President Trump is long enough. He’s not doing his job to combat mythical global warming, so she’s suing him–hoping the courts will make him do it. Ah, Sophie darlin’, when was the last time anyone made Donald Trump do anything? Of course, Sophie’s lawsuit (really backed by Big Green) is nothing more than a sick publicity stunt…
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    M-U’s Next Mega Project: $10B Appalachian Storage Hub

    In May 2016, MDN brought you the news that a researcher at West Virginia University believes a natural gas liquids (NGL) storage hub is what the Marcellus/Utica region really needs (see WVU Researcher Says Marcellus/Utica Needs an Ethane Storage Hub). According to Brian Anderson, director of WVU’s Energy Institute, without ethane storage (and pipelines) the Marcellus/Utica region risks seeing its abundant ethane leave the area, mostly heading to the Gulf Coast. We need that ethane here, in our area. Kevin DiGregorio, executive director of the Chemical Alliance Zone, has also taken up the cause, writing an opinion article in which he says West Virginia, Ohio, Pennsylvania and Kentucky need to band together to build such a project (see WV, OH, PA, KY Should Cooperate on $10B NGL Storage Hub). You mean, set aside their competitive natures and cooperate? Yes! Why? Such a project will cost an estimated $10 billion–far more than a single ethane cracker project. No one state can do it on its own. It will take all our states cooperating to pull it off. It’s time to turn the spotlight on this project. The Appalachian Storage Hub Conference is coming on June 15 in Canonsburg, PA (Pittsburgh). The conference will take a stab at moving the ball down the field in making this critical project happen…
    Read More “M-U’s Next Mega Project: $10B Appalachian Storage Hub”

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    EIA Drilling Report: New Production Highs Again Coming in May

    Yesterday MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report–the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. This latest report shows that an upswing in production–for both natural gas and oil–will continue over the next 30 days. In fact, get ready to break new records! Output in the Marcellus/Utica region is set to once again reach new highs. In the Marcellus, output will come within striking distance of 19 billion cubic feet per day (Bcf/d). Astonishing! In the Utica, output will hit 4.2 Bcf/d. Shale oil output across all seven major plays is set to hit 5.2 million barrels per day, with almost all of the increase coming from the Permian and Eagle Ford plays in Texas. Buckle up and get ready for another wild ride in the coming month…
    Read More “EIA Drilling Report: New Production Highs Again Coming in May”

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    Nuke the Nukes: Harrisburg Battle to Prop Up Failing Nuke Energy

    As MDN reported last week, the battle lines have been drawn and both sides have come out swinging in a battle over whether ratepayers should bail out economically failing nuclear power plants (see Battle Lines Drawn in PA to Prevent Nuke Energy Special Treatment). Five nuclear power plants in PA provide 37.5% of all electricity used in the state. There are no “greenhouse gas” emissions from nuclear power, making it attractive for some green radicals–but nuclear waste is a big problem because it never goes away, at least not for thousands of years. You have to store it. The biggest problem with nuclear energy today is that it costs more to produce electricity from nukes than it does from cheap natural gas-fired plants. Nukes can no longer compete. So in a couple of corrupt states–New York and Illinois–the nuke lobby convinced regulatory bodies and the legislatures to pass laws favoring nukes–forcing ratepayers to pay more to keep the nukes going. That battle has now come to Pennsylvania. One of the lobbyists hired by the nuke industry is John Hanger–former Secretary of the PA Dept. of Environmental Protection (DEP) under Ed “fast Eddie” Rendell. Hanger briefly ran in the Democrat primary for governor (losing out to Tom Wolf). Hanger ran on a platform of legalizing marijuana–hence our moniker of “pass a joint for John” (see Pass One Last Joint for John Hanger). After he dropped out, Hanger went to work in the Wolf Administration for a period of time, as Wolf’s Secretary of Policy and Planning. But after a year of that Hanger quit and moved out of PA–to be with his wife and daughter in Massachusetts (see John “Severance Tax” Hanger Quits Tom Wolf Administration – Why?). Hanger is back–“advising” (i.e. lobbying) for the nuclear industry in Harrisburg…
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    Hearings Scheduled for Proposed Duke Pipeline in Cincinnati

    Duke Energy Ohio, an LDC or “local distribution company” serves some half a million customers with natural gas in Ohio. The company has a 12-mile pipeline to flow the gas it needs, to move it from one point to another in Hamilton County (Cincinnati), in the southwest corner of the state. The Duke pipeline has been in service since the 1950s. Duke needs to replace that pipe or some of those half million Duke customers won’t get natural gas any more. Because anything to do with “fracking” or “pipelines” has been so thoroughly bastardized by the media and anti-fossil fuel protesters, there has been, of course, opposition to Duke’s plan. So Duke “listened” and has scaled back their plans. Instead of building a 30-inch gas pipeline running at 600 psi (pounds per square inch), the revised plan calls for a 20-inch pipeline running at 400 psi (see Duke Energy Modifies/Scales Back Plan for SW OH Pipeline). Duke proposed two potential routes, both of which are opposed by antis, including a group calling themselves NOPE–Neighbors Opposing Pipeline Extension. We call them DOPEs–Dummies Opposing Pipeline Extensions. Will the DOPErs volunteer to shut off the natural gas to their homes and businesses if the pipeline doesn’t get built? Not on your life! Two public hearings have now been scheduled–one for June 15 and the other July 12. The DOPErs are gearing up to fight…
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    FERC State of the Markets Report 2016 – Pipelines to the Rescue

    Late last week the Federal Energy Regulatory Commission (FERC) released its annual “State of the Markets Report” for 2016 (full copy below). Among the choice tidbits we found this statement: “Natural gas production from the Marcellus and Utica shales accounted for 30 percent of the U.S. total in 2016, due to the prolific nature of these formations, relatively low production costs, and proximity to the large Northeast markets. In addition, new pipeline infrastructure reduced bottlenecks allowing additional gas to reach the demand centers.” We also spotted this interesting factoid: “In 2016, 7.1 Bcf of FERC jurisdictional pipeline capacity went into service, with 43 percent designed to move natural gas from Appalachia to markets in the Northeast and Midwest. Staff expects the new natural gas pipeline capacity to continue contributing towards shrinking price differentials between regions throughout the U.S., and help keep natural gas prices relatively low.” Translation: hang in there Marcellus/Utica drillers–prices are going to rise soon because of these new pipelines. Here’s the update from FERC…
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    Williams Sells Gulf Coast Cracker Plant to NOVA Chemicals

    Williams Geismar Olefins facility – click for larger version

    Midstream giant Williams has been on a mission to make the company economically stronger AND produce cash that can be used for various purposes. In August, Williams announced they would sell their Canadian assets for $1 billion (see Bold Move – Williams Selling Canadian Assets). In September, Williams announced another potential asset sale–the company’s 88.5% ownership interest in the Geismar, Louisiana olefins petrochemical plant (see Williams Considers Selling its Gulf Coast Ethane Cracker Plant). The Geismar olefins plant is an ethane cracker by another name. It uses either ethane or propane and chemically “cracks” it into ethylene and propylene–raw plastics used by manufacturers. What does the Geismar plant have to do with the Marcellus/Utica? Directly, not much. There may be some Marcellus/Utica ethane flowing to that plant for processing, although we haven’t heard that. We’re interested in the story because Williams is one of the major midstream companies operating in our region. Anything that affects the company and its ability to continue operating, including asset sales in other regions, interests us. So it was with keen interest that we noticed Williams has now done the deal. They’ve agreed to sell the Geismar plant to Canada-based NOVA Chemicals, for $2.1 billion. Williams plans to use the money from the sale to pay down debt and fund capital investments…
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    Survey Predicts Shale Drillers Will Borrow & Spend More in 2017

    Lately we’ve noticed a plethora of stories in mainstream media about the oil and gas industry spending more money this year. That certainly seems to jibe with our own anecdotal observations. In reporting 2016 results and drillers’ comments about what to expect in 2017, almost all of the companies we’ve reported on have said their spending this year will go up. And that’s a good thing. We now have something better than just anecdotal evidence. Energy law firm Haynes and Boone recently completed a survey of oil and gas borrowers and lenders–drillers, service companies, and banks–to gauge their predictions about “borrowing base redeterminations” and spending in 2017. What is a borrowing base? A company’s borrowing base is the value of its assets. In the case of drillers, it is the value of the leases and oil/gas wells they own. Those assets are used as collateral to back up loans and IOUs. A lower borrowing base means they must borrow less money, and they will pay more in interest for the money they do borrow. Lower borrowing base = bad, higher borrowing base = good. Each spring and fall (twice a year) banks take a look and “redetermine” or reevaluate the value of those assets. What did the Haynes and Boone survey find about bankers’ and drillers’ predictions on spring redeterminations of borrowing bases? That the borrowing base for most drillers will either stay the same, or increase slightly. The survey also found a vast majority of drillers plan to spend more money this year (89%). Here’s the encouraging results…
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    Big Green’s Game Plan for Fighting a Trimmed Down EPA

    Big Green is a big business. Radical enviros have worked hard over the eight years of Obama’s reign of terror to build and expand the Environmental Protection Agency far beyond its originally intended purpose. The Obamadroids’ abuses via the EPA were breathtaking–many of which were chronicled here on MDN. Things like the odious and misnamed Clean Power Plan, the fruity Waters of the United States (WOTUS) regulation. Capturing every last molecule of so-called fugitive methane from oil and gas operations. The EPA became the modern day environmental equivalent of the Gestapo. So no wonder the environuts are apoplectic over President Trump’s mission to put the EPA on a diet and shrink it back to its pre-regulatory-obese size. But don’t think for a minute that the radicals will just stand by and watch it happen. They are fighting and fighting hard to prevent the enormously bloated agency from shedding budget, people, and regulations. We stumbled across their game plan for how they intend to fight Trump every inch of the way…
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