SPACs Overtaking MLPs to Finance New Energy Infrastructure
We’d heard of MLPs–or master limited partnerships–but we’d never heard of SPACs. Until now. According to Motley Fool, “An MLP combines the tax benefits of a limited partnership with the liquidity that publicly traded securities — like stocks and bonds — offer.” You buy a “unit” in an MLP, which you can think of as a stock, but you the unit-buyer get treated (for tax purposes) like you’re a partner in the company–not like a typical stockholder. Which means you would get certain tax breaks not available to stockholders. MLPs have been quite popular, especially in the midstream (pipeline) sector. But according to an article in the New York Times, special purpose acquisition companies, or SPACs, are beginning to fill the “gap” left by the declining use of MLPs. How do SPACs work? We’ll let the NYT explain…
Read More “SPACs Overtaking MLPs to Finance New Energy Infrastructure”
It doesn’t happen often, but every now and again we read about driller or (in this case) pipeline company operating in the Marcellus/Utica we had never heard of before. Such is the case today. A new (to us) midstream company, XcL Midstream, has formed and is already building a dry gas gathering pipeline system in West Virginia, with plans to build a wet gas gathering system in WV too. According to its website, XcL “operates in the premier region of the Appalachia basin in Marshall and Wetzel Counties, West Virginia. XcL Midstream’s Appalachia Connector Pipeline is strategically located at the intersection of every major long-haul interstate pipeline system in Southwest Appalachia and provides shippers with market price optionality.” XcL plans to gather and process dry gas, wet gas (i.e. natural gas liquids), and transport water for its customers. XcL has its headquarters in Canonsburg, PA, near Pittsburgh. The reason that the company popped up on our radar is because Platts ran an article announcing that XcL has signed a customer–THQ Appalachia I, an affiliate of Tug Hill–to use 600 million cubic feet per day (Mmcf/d) on the dry gas pipeline, 200 Mmcf/d on the wet gas pipeline system, and to use a forthcoming water pipeline to boot. Here’s the thing: both XcL and THQ/Tug Hill are backed by private equity company Quantum Energy Partners. So apparently this is one of Quantum’s portfolio companies doing business with another of Quantum’s portfolio companies. In essence, one cousin helping out the other cousin. Perhaps we can call them kissin’ cousins?…
Yesterday saw the first two (of four) public hearings being hosted this week by the Pennsylvania Dept. of Environmental Protection (DEP) to elicit comments on the proposed $3 billion, 198-mile Atlantic Sunrise Pipeline, an expansion of Williams’ Transco Pipeline system. One of yesterday’s meetings was held in Lancaster (Lancaster County), and the other in Tunkhannock (Wyoming County). The striking thing about both meetings is that they were not the usual circus freak shows by anti-fossil fuelers we’ve come to expect. Indeed, in both venues, an overwhelming majority of those speaking were there to speak IN FAVOR of the projects. Oh, there were detractors, to be sure. Nonsensical statements made by people like Malinda Clatterbuck, one of the locals in Lancaster who is attempting to turn Lancaster into another North Dakota fiasco. Clatterbuck said “angst over the pipeline has caused premature births, divorces and heart attacks” among people she knows. Complete rubbish. Anyone can say (or do) anything at these hearings. Mark Clatterbuck (Malinda’s husband) also spoke. Mark was a protester in North Dakota against the Dakota Access Pipeline. He warned (threatened?) DEP representatives of a coming “community uprising” against the Atlantic Sunrise pipeline. Even though there was some opposition like the clattering Clatterbucks at last night’s hearings, the big news is that their opposition was drowned out by supporters of the pipeline project. And that’s good news for all Pennsylvanians…
We just knew getting a “virtual pipeline” facility built in ultra-liberal Broome County, NY was proceeding a little too easy. MDN recently told you about a proposed virtual pipeline (i.e. natgas trucking system) coming to MDN’s neighborhood. NG Advantage wants to build a new compressor station and tap into the Millennium Pipeline where it crosses the Chenango River near Port Dickinson, a suburb of Binghamton, in Broome County (see 
During the Obama reign of terror, the world’s #2 largest oilfield services company, Halliburton, tried to buy the world’s #3 largest oilfield services company, Baker Hughes. The Obama Dept. of Justice (DOJ) killed that deal (see 
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. Get ready to break new records–again! In July, we will once again hit the highest output of shale gas we’ve seen, ever. All seven major plays will produce an amazing 51.7 billion cubic feet per day (Bcf/d) of natural gas, and 5.5 million barrels of oil per day. In the Marcellus, natural gas output will hit 19.4 Bcf/d. In the Utica, output will reach 4.3 Bcf/d. The biggest natural gas story continues to be the Texas Permian–an oil play! When you drill like crazy for more oil, you also get natural gas out of the hole along with the oil. It’s called “associated gas.” And because the Permian is red hot with drilling, it makes sense natural gas production will spike up too. The Permian will add 161 million cubic feet per day (Mmcf/d) of natural gas production in July and hit a total output of 8.5 Bcf/d, now #2 behind the mighty Marcellus…
Competition is good. Last week we told you about the coming competition between the Marcellus/Utica Shale play in Pennsylvania, West Virginia and Ohio, and the Haynesville Shale play in Louisiana (see 
The Ohio Dept. of Natural Resources (ODNR) has just issued production numbers for the first quarter of 2017. The bad news is that oil production continued to slide in 1Q17, down 29% from the same quarter in 2016. However, that’s an improvement from 4Q16 when oil production was down 44% (see 
In delicious irony, Robinson Township (Washington County), PA, one of the original seven selfish towns that sued Pennsylvania and eventually won at the PA Supreme Court, overturning a portion of the state’s 2012 Act 13 shale drilling law (granting towns the right to self-regulate some aspects of oil and gas drilling by using onerous zoning ordinances), is about to get a new Marcellus gas-fired electric plant. That is, a plant that burns the stuff they don’t like drilled. In April, MDN shared a list of five new Marcellus gas-fired plants coming in Southwestern PA (see 
We’re going to take a stab at this, and we are not confident we will get it 100% right. With that as a warning, we recently reported that a case brought by landowners in northeastern PA against Chesapeake Energy over unwarranted royalty deductions suffered a bit of a setback (see 
In April MDN provided an update on the Sabal Train Transmission pipeline project (see 
In May MDN conveyed the news that it appears Mountaineer NGL Storage, which wants to build a new underground NGL storage facility in Monroe County, Ohio, near Clarington, along the Ohio River (see 
A group of profoundly radical “environmental” organizations filed a lawsuit in the U.S. Court of Appeals for the Fourth Circuit last Friday against the West Virginia Dept. of Environmental Protection–for doing their job. Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network has sued the DEP because the department had the audacity to conduct a very thorough review, and then issue a stream and water-crossing permit (demanded under federal law) for the Mountain Valley Pipeline (MVP). MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, is being built by EQT, NextEra Energy and several other partners. This is now SOP–standard operating procedure–for Big Green groups with deep pockets. Sue and keep suing in an attempt to slow and eventually kill off any project that remotely involves fossil fuels. Yes, they are RADICAL, they are EXTREME, waaaaaay outside the mainstream of American society. And they MUST BE STOPPED. When will someone launch weekly lawsuits against these Big Green organizations? Here’s the latest maddening development…
In December 2016, the Pennsylvania Dept. of Environmental Protection (DEP) unveiled new regulations to clamp down on methane emissions and other other air pollution that allegedly comes from shale drilling sites (see 
On Friday, Exxon Mobil took the gloves off and went after the out-of-control New York Attorney General Eric Schneiderman. Last year Schneiderman decided he would try to shake down Exxon for billions of dollars, claiming the company wasn’t being honest with shareholders about the threat of man-made global warming, which doesn’t actually exist. He said Exxon should have done more to warn shareholders that they invest in a filthy, rotten, human-killing Big Oil company–a company whose stock will someday implode. We’ve covered Schneiderman’s witch hunt from the beginning (