Marcellus Biggest Drillers Lock in 2017 Gas Prices at $3+ per Mcf
In September, MDN brought you research on 10 of the largest Marcellus/Utica drillers that have “hedged” their 2017 production (see Hedging Gas Prices in Marcellus/Utica – Who Hedges & How Much?). Hedging is a concept of pre-selling the gas you produce at a price you agree to now, in advance. Although that may sound risky, it’s actually an exercise in risk avoidance. It’s less risky to lock in favorable prices now rather than wait and potentially get far less. How do drillers know what the price of gas will be six months or a year from now? They don’t know, for sure, but there is something called the forward market, that predicts what prices will be at future dates. In fact, traders create contracts now based on prices in the future, and those contracts are reported by various news and data services, like NGI’s Forward Look publication. The company that provided the research back in September, S&P, is back with an update. The latest research shows that all of the top 10 drillers have hedged at least some of their production–and some of them have hedged most or even all of their production. What prices have each of these 10 drillers locked in and for how much production?…
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In December MDN told you that anti-fossil fuelers who oppose Sunoco Logistics Partners’ Mariner East 2 Pipeline were making a last, desperate attempt to stop the project by appealing an eminent domain case to the Pennsylvania Supreme Court (see 
In April 2016 MDN told you about the Guernsey Power Station–a new Utica/Marcellus natural gas-fired electric generating plant proposed for Guernsey County, OH (see 
Last week the Pennsylvania Department of Labor and Industry released employment numbers for the Marcellus industry for the second quarter of 2016. Yes, you read that right–the jobs numbers released were for 2Q16, April through June. Why such a delay? Who knows!? What followed is instructive. The numbers show that year over year, from 2Q15 to 2Q16, those employed by the Marcellus industry went down by 32%. However, the same report shows overall those directly employed by the drilling industry doubled over the past nine years. Yes, we hit a down cycle and lost some jobs, but we’re still light years ahead (and a heck of a lot better off) than where we were just a decade ago. Also keep in mind: we are once again on the upswing with jobs, since 2Q16…
A significant court case was decided last week in West Virginia. The WV Supreme Court ruled in a gas royalty case that not only has significant implications for WV landowners (and drillers), but also may reverberate across the border into neighboring Pennsylvania where the same issue has been a long and contentious fight–what we call a civil war between landowners and drillers. Like all such cases, this one is complicated and not easy to summarize, but we’ll do our best. The WV Supremes have just handed down a decision that says, in essence, that EQT (and by extension other drillers) cannot deduct post-production expenses when calculating royalty payments to landowners. Specifically, the justices in their ruling said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” Yikes! That is fantastic news for landowners who now have a case to recoup money deducted from their checks–and really bad news for drillers who will owe that money. The big winners are, of course, the lawyers who will litigate this for years to come. However, hold on to those briefs–EQT has just appealed the decision, asking the WV Supreme Court to reconsider their decision, gently chiding the court for erring in their interpretation of state law on royalties…
In August, the Federal Energy Regulatory Commission (FERC) issued a favorable environmental assessment (EA) for three Spectra Energy projects: Access South, Adair Southwest and Lebanon Express (see 
The legal beagles at global law firm Norton Rose Fulbright continue to do us all a huge favor. 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. The “Quarterly legislative action update: Marcellus and Utica shale region” for 4Q16 (full copy below) begins with a quick listing by state for existing or new laws introduced, with descriptions for each bill/law. This is, in one place, pretty much everything you need to know about what new laws (i.e. regulations) are coming down the pike that will affect the Marcellus and Utica Shale drilling industry…
In March of this year, MDN told you that LNG Limited (from Australia) registered with the Canadian government for an environmental assessment for a pipeline they want to build in Nova Scotia–the Bear Paw Pipeline (see 
Lisa Badia, executive director of the Greater Wheeling Coalition for the Homeless “can’t be certain how many homeless people dwell in Hancock, Brooke, Ohio, Marshall and Wetzel counties,” but she is certain that part (much?) of the homeless problem is caused by Marcellus/Utica Shale drilling. Yep, sinking a hole in the ground causes homelessness. How? According to Badia, when drilling came to town 4-5 years ago, a bunch of out-of-staters showed up to work on drilling rigs (and for pipeline companies, etc.). Those out-of-staters began paying sky-high rental rates for apartments and trailers, driving up the price of rental housing throughout the region. And when that happened, folks on welfare could no longer afford to pay the rent (with our taxpayer money). If it’s a decision between booze and cigs or rent, you know what goes! So those po’ folk ended up sleeping on heating grates–because of that nasty, awful fossil fuel drilling…
Earlier this week so-called researchers at the University of Iowa released a tragically flawed study that purports to say Marcellus Shale drill cuttings (rock and dirt from drilling) are radioactive and if you put them in your landfill, you’ll start to glow in the dark. That’s the upshot from “research” that used just three samples FROM A SINGLE WELL as the basis of the “study.” This is anti-fossil fuel hogwash by a group of grad students who want to launch their careers by making a name for themselves. What they’ve actually done is ended their short careers with shoddy research. The paper is titled “Disequilibrium of Naturally Occurring Radioactive Materials (NORM) in Drill Cuttings from a Horizontal Drilling Operation” and appears in the journal Environmental Science & Technology Letters. Below is a summary of the “research” followed by an analysis by MDN friend and intrepid writer Nicole Jacobs, writing for Energy in Depth. Nicole rips apart this new study and exposes its tragic flaws…
Spectra Energy’s Access Northeast Pipeline project, a roughly $3 billion project to connect four existing pipeline systems (with enhancements): Texas Eastern, Algonquin Gas Transmission, Iroquois and Maritimes & Northeast, has suffered a string of setbacks this year. Spectra’s original strategy was to bring natural gas to New England by cutting deals with electric companies who need the gas to produce cheaper electricity at their natgas-fired power generation plants. However, the green environmental Nazis came out in force against the plan, (sadly) aided and abetted by Spectra’s competitors, and those plans are now in ruins with three states blocking any such plans (see 
Environmentalists are accusing Shell of using a loophole to discharge wastewater at their future ethane cracker that will exceed state limits for TDS (total dissolved solids). The issue may sound familiar. In 2011 Pennsylvania “requested” that municipal sewage treatment plants without specially outfitted equipment stop accepting and processing Marcellus wastewater (see