Industrywide Issues

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    More on PA DEP’s Onerous New Methane Capture Regs

    In December, 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 PA DEP Releases New Regs re Methane & Air Pollution at Drill Sites). The onerous new regulations, not in effect yet, are prompted by bullying from the federal Environmental Protection Agency, an agency which is about to get gutted (see Master Stroke: Trump Selects OK AG Pruitt to Lead EPA). That hasn’t stopped Gov. Wolf’s DEP from plowing forward with new rules (copies here). We spotted an Associated Press article that highlights some of the aspects of the proposed new methane capture rules…
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    PA DEP Rejects Revisions to Regs re Drilling Near Coal Mines

    Here’s a story we admittedly don’t know much about, a story that kind of came out of left field. It may affect some shale drillers in southwest PA. Sometimes drillers want to lease and drill under coal mines. Since coal mines sink large holes in the ground, there are existing guidelines in place for how closely an oil/gas well can be drilled on or under a coal mine–guidelines put in place in 1957. As a result of legislation passed in 2011 called Act 2, a review was conducted to see if the standards for oil/gas drilling near coal mines might be modified–we’re assuming “relaxed,” allowing such drilling to happen in conditions not currently allowed. A column of rock called a pillar needs to be of a certain size/width in order for drilling to take place. An independent study to review the size of pillars, called “Gas Well Pillar Study Update, PO 4300311202 and 4300400813,” was completed in March 2016. The PA Dept. of Environmental Protection (DEP) recently completed its own review of that study (copy of the DEP review below) and has rejected changing existing 1957 standards for pillar dimensions. Yeah, kind of technical. Short version: DEP is keeping super-strict standards in place claiming it’s safer for coal miners, limiting options for shale drilling under some coal mines…
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    Buyer of FirstEnergy’s PA NatGas Power Plants Revealed

    FirstEnergy, based in Akron, OH, is one of the nation’s largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. FirstEnergy owns a variety of regulated and non-regulated power generation plants. In November the company announced it wants to sell six power generating plants in PA, four of them natural gas-fired plants (see FirstEnergy Selling 4 NatGas-Fired Electric Plants in PA). The plants being sold are non-regulated–part of FirstEnergy’s strategy to become a 100% “regulated” utility in the next 18 months. In December FirstEnergy announced they found a buyer willing to pay $885 million for the four natgas plants in PA (see FirstEnergy Finds Buyer for 4 PA NatGas-Fired Power Plants). However, the buyer’s identity remained a secret–until now. LS Power Equity Partners III LP, a New York-based power developer, is the buyer of the four natgas-fired electric plants…
    Read More “Buyer of FirstEnergy’s PA NatGas Power Plants Revealed”

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    Pittsburgh Energy Lawyers Jump Ship from NRF to Blank Rome

    In the past MDN has highlighted the great work done by the Norton Rose Fulbright (NRF) law firm, most recently just last month (see Updated List of Proposed Laws in PA-OH-WV Affecting Marcellus/Utica). Researchers at the law firm issue a quarterly legislative action update looking at bills and laws previously voted on, and new bills/laws introduced, affecting the oil and gas industry in Pennsylvania, Ohio and West Virginia. Very impressive. So we were saddened to learn that Norton Rose Fulbright is closing its Marcellus/Utica office in Pittsburgh, with plans to cover the region from its other offices (see Law Firm Norton Rose Fulbright Closing Pittsburgh Marcellus Office). They announced two remaining attorneys in the Pittsburgh office–Amy Barrette and Jeremy Mercer–will relocate to NRF’s Washington, DC office. Not so fast! Yesterday another large energy law firm in Pittsburgh, Blank Rome, announced Barrette and Mercer are joining their firm instead, and staying put in Pittsburgh…
    Read More “Pittsburgh Energy Lawyers Jump Ship from NRF to Blank Rome”

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    OH NatGas Utility Sells Itself to Energy Investment Firm

    A Cleveland, OH-based natural gas utility company, Gas Natural Inc., has sold itself to investment firm First Reserve Energy. Gas Natural sells 21 billion cubic feet (Bcf) of natural gas to roughly 68,600 customers through regulated utilities operating in Montana, Ohio, Maine and North Carolina. Gas Natural’s other operations include an intrastate pipeline, natural gas production and natural gas marketing. First Reserve Energy is an investment firm focused solely on investing in (and buying) energy companies. Shareholders for Gas Natural voted at the end of December to approve the buyout/merger…
    Read More “OH NatGas Utility Sells Itself to Energy Investment Firm”

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    Potter Twp (Finally) Approves Permit for Shell Ethane Cracker

    In December the Potter Township Board of Supervisors convened a public hearing on the proposed Shell ethane cracker plant–to be built in Potter Twp–that ended up going on for 10 hours (see Potter Twp Declines to Approve Permits for Shell Cracker, For Now). The intent was to approve Shell’s request for permits to begin construction on the multi-billion dollar ethane cracker plant. That didn’t happen. Instead, the supervisors decided to hold another hearing the following night. They did, and that hearing went for over an hour, in closed-door session. At the conclusion, the supervisors made a couple of requests from Shell, which Shell agreed to. However, the supervisors were still not ready to approve the permits and instead asked for more paperwork to be filed. Potter Township supervisors are certainly no rubber stamp for the cracker project. They are working hard to ensure area residents are protected when (not if) it gets built. But that’s not good enough for radical, anti-fossil fuel nutters who (irrationally) want nothing to do with natural gas. Last week the supervisors held yet another meeting and the antis behaved like they always do–like petulant children, hollering and booing and making a$$es of themselves. One supervisor said he was “appalled” by the conduct of the crowd at last week’s meeting. That’s all in the rearview mirror now. Last night Potter Township held another meeting and yes, they finally voted to grant the cracker project the necessary town permits to proceed. Oh! The crowd last night? While it had a few crazies, it was packed with local residents who support the project. Nice to see the good guys come out in force to counteract the nutters…
    Read More “Potter Twp (Finally) Approves Permit for Shell Ethane Cracker”

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    Breakthrough for M-U Drillers: First Mini-LNG Unit Up & Running

    The Dresser-Rand business commissioned its first micro-scale natural gas liquefaction system at the Ten Man liquefied natural gas facility in Pennsylvania

    If you’ve read MDN for any length of time, you know how important LNG–liquefied natural gas–is to the future of the Marcellus/Utica. We’re all eagerly awaiting the day Dominion flips the switch on its Cove Point LNG liquefaction facility in Cove Point, Maryland (see Cove Point LNG Now 78% Complete, On Track to Open This Year). Cove Point will condense and ship 1.8 billion cubic feet per day (Bcf/d) of Marcellus/Utica gas to Japan and India. Other big LNG projects are also in the works, several of them on the East Coast of Canada. However, some Marcellus/Utica gas is already getting liquefied and shipped–via the Gulf Coast. In particular from the Cheniere’s Sabine Pass LNG facility in Louisiana (see LNG Slowly Changing the NatGas Game in the Marcellus/Utica). Cove Point, Sabine Pass and other such facilities take years to build and cost billions of dollars. But there’s another kind of LNG, “micro-scale” LNG liquefaction that is taking root in the Marcellus. Dresser-Rand, a subsidiary of German giant Siemens, has commissioned its first small-scale natural gas liquefaction system at the Ten Man LNG facility near Mansfield (Tioga County), PA. The new mini-LNG facility will, according to Dresser-Rand, allow Marcellus driller Frontier Natural Resources “monetize stranded gas assets,” by which we take to mean wells drilled that are not and cannot quickly be connected to a pipeline system. If this catches on, it can be an important alternative for drillers where pipelines are nonexistent or slow in coming…
    Read More “Breakthrough for M-U Drillers: First Mini-LNG Unit Up & Running”

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    PA Senator Reintroducing Bill to Reduce Marcellus Waste Reporting

    PA State Sen. Elder Vogel

    On Tuesday, PA State Sen. Elder Vogel (Republican from Beaver, PA) circulated a co-sponsor memo that states his intent to re-introduce a bill that will remove some of the hassles drillers now face with the recent adoption of new Marcellus drilling regulations. Specifically, Vogel wants to change the DEP (Dept. of Environmental Protection) regulation requirement that drillers must file paperwork to report the amount and disposition of drilling waste–which would include wastewater and drill cuttings–from monthly to every six months. Every gallon of frack and produced water that comes out of a well, and every square inch of leftover rock and dirt, must be tracked and a report filed. The new Chapter 78a drilling regulations adopted by the DEP requires monthly reports to be filled out–a virtual blizzard of paperwork. Vogel wants to make it more manageable with biennial reports instead…
    Read More “PA Senator Reintroducing Bill to Reduce Marcellus Waste Reporting”

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    Report: Marcellus M&A in 2016 Sees Big Increase – Top 5 Deals

    Deal-making (mergers and acquisitions, or M&A) in the Marcellus went through the roof in 2016 as compared with 2015. In 2016, there were 13 deals worth $100 million or more. The total value of deals in 2016 was a big $7.25 billion, compared with $920 million in 2015. What was the #1 M&A deal in the Marcellus for 2016? Rice Energy’s purchase of Vantage Energy for $2.7 billion (see Vantage Energy is No More – Rice Energy Completes $2.7B Buyout). Below is an overview of Marcellus deal-making, along with a chart of the Top 5 M&A deals in the Marcellus for 2016…
    Read More “Report: Marcellus M&A in 2016 Sees Big Increase – Top 5 Deals”

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    New CEA Report Warns: No Shale Gas Pipelines, No Electricity

    Anti-pipeline nutters

    Earlier this week the Consumer Energy Alliance (CEA) released a disturbing report on the U.S. oil and gas pipeline network and its relationship to our growing domestic energy needs. The report, titled “Families, Communities and Finances: The Consequences of Denying Critical Pipeline Infrastructure” (full copy below), finds that if legislators and regulators reject proposals for new pipelines and pipeline expansions, we are in danger of losing one-third (1/3) of our electric generation capacity nationwide. The capacity at risk is 1,450 gigawatts. Put in perspective, we’ll lose the electricity it takes to power California, Florida, New York, Texas, Ohio and all of New England–COMBINED. It is a scary, nightmarish scenario–and if pipeline projects are delayed or canceled, it’s going to happen. No, we won’t necessarily be without electricity. What it means is that electric rates will soar and the people who will suffer the most are the 43 million citizens living on fixed incomes and below the poverty line. It is time to stop diddling around and get pipeline projects approved–before it’s too late…
    Read More “New CEA Report Warns: No Shale Gas Pipelines, No Electricity”

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    Prof Says Lack of LNG Export Licences Killing Ohio Jobs

    A professor from an Ohio college had the temerity to publish a guest column in the liberal Cleveland Plain Dealer taking federal regulators to task over the years-long wait time it takes to get a new LNG (liquefied natural gas) facility approved. Prof. Robert Chase, Emeritus Professor in the Department of Petroleum Engineering and Geology at Marietta College, says more natural gas needs to reach the world market, via LNG, and if it doesn’t, the lack of LNG exports will put Ohioans out of work. The good prof says the incoming Trump Administration and Congress needs to take “prompt action” to “speed up the licensing process for companies seeking permits to export liquefied natural gas.” Here, here! We fully agree…
    Read More “Prof Says Lack of LNG Export Licences Killing Ohio Jobs”

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    Williams Transco Pipeline Breaks Flow Volume Record in January

    Transco Pipeline Map – click for larger version

    The mighty Transco (Transcontinental Gas Pipe Line Co) is considered the crown jewel of pipeline systems (see Would Williams Sell Its “Crown Jewel” (Transco)? You Bet Your Shoes!). Transco is 10,200 miles long, running from the Gulf Coast to the Northeast. Williams, owner of Transco, is in the process of expanding the system in Pennsylvania with the Atlantic Sunrise project (see FERC Approves Atlantic Sunrise Pipeline! Cabot Grabs More Capacity). The expansion can’t happen soon enough. Earlier this month the mighty Transco hit a new record high of delivered natural gas. On Jan. 8, Transco delivered 13.7 million dekatherms…
    Read More “Williams Transco Pipeline Breaks Flow Volume Record in January”

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    CT Heating Oil Companies Lose Bid to Block NatGas Pipelines

    You would think if consumers want natural gas, and private companies are willing to build the pipelines to get the gas to their homes and businesses, such a thing would be possible here in the Land of the Free and the Home of the Brave. However, a trade organization in Connecticut tried to block such activity–in court. What makes it doubly distressing is that the trade organization opposing new natgas pipelines represents heating oil distributors (a sister fossil fuel), afraid that they may lose market share to natural gas. So trade group filed a lawsuit to prevent a state initiative that would expand the state’s natural gas pipeline network. Shame on them. Fortunately the Connecticut Supreme Court ruled–and the heating oil distributors lost…
    Read More “CT Heating Oil Companies Lose Bid to Block NatGas Pipelines”

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    Scott Pruitt Bested Democrat Hacks at EPA Confirmation Hearing

    Scott Pruitt – Next EPA Administrator

    Oklahoma Attorney General (AG) Scott Pruitt, who is Trump’s pick to drain the swamp at the Environmental Protection Agency, was on the hot seat yesterday on Capitol Hill. Confirmation hearings were held and Pruitt was grilled for seven hours in three different rounds of questioning. This man is a true gem. During the hearing he said this: “Process matters, rule of law matters, federalism matters. Those issues matter because Congress has said so. It is Congress that gives authority to the EPA. The EPA is an administrative agency; it is not a legislative body.” What a breath of fresh, unpolluted air! The Democrats on the Senate Committee on Environment and Public Works did their best to rattle Pruitt, but he remained calm. Crazie Bernie Sanders was among those who behaved like jackasses–asking questions and not letting Pruitt finish answering before they would interrupt and ask more questions. The Democrats’ behavior was disgraceful and certainly not worthy of someone holding the office of Senator. Here’s a review of what happened, what was said, and a copy of Pruitt’s excellent opening remarks…
    Read More “Scott Pruitt Bested Democrat Hacks at EPA Confirmation Hearing”

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    PA Gov Wolf Signals his Support for Mariner East 2 Pipeline

    PA Gov. Tom Wolf

    PA Gov. Tom Wolf has been, to be frank, a disaster as a governor. On many issues. But the issue that primarily concerns us is the oil and gas industry. Wolf will soon introduce his third budget and for a third straight year he will call for a Marcellus-killing severance tax. He still owes the teachers unions payback for supporting him and getting him elected. Wolf pretty much screwed up the Dept. of Environmental Protection (DEP) when he installed an anti-driller as its head, John Quigley. He later fired Quigley when it was discovered Quigley was colluding with Big Green groups. Given Wolf’s treatment of the industry, it was with some surprise to read that Wolf, in comments made to a Chamber of Commerce group last week, mouthed his support for the Mariner East 2 NGL (natural gas liquids) pipeline that will traverse the state. The pipeline is opposed by a few anti-fossil fuel zealots and some townships along its route. The DEP is reviewing permits for the project and the hints coming from Wolf and the DEP are that the project will receive its approvals soon. Which is really good news…
    Read More “PA Gov Wolf Signals his Support for Mariner East 2 Pipeline”

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    EIA Jan Drilling Rpt: Marcellus Production Continues to Climb

    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. For the past three reports, estimating production for November, December, and January, Marcellus natgas has increased. The trend continues in this latest report, which forecasts production for the coming month of February. Last month the EIA predicted natgas production in the Marcellus would zoom up by 160 million cubic feet per day (MMcf/d). This month EIA predicts in the coming month Marcellus production will go up another huge 188 MMcf/d. The #2 gas-producing basin behind the Marcellus is the Permian (in Texas). That basin will also see a big increase in natgas production–an additional 103 MMcf/d–largely because of “associated gas.” The Permian is an oil play and is, by all accounts, the hottest shale play right now because of oil. But when drillers sink holes in the ground, other hydrocarbons come out of the ground along with oil–i.e. natural gas. Ergo, the more oil you drill for and extract, the more natural gas you get along with it. Here are the latest numbers for the major shale plays in the U.S….
    Read More “EIA Jan Drilling Rpt: Marcellus Production Continues to Climb”