Industrywide Issues

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    Maryland Will Miss Important Fracking Deadline on Oct 1

    deadlineMaryland is supposedly working on revisions to revisions of revisions of fracking regulations that will allow the state to begin fracking on or about October 1, 2017. At least, that’s the theory. There has been some evidence that work is actually getting done to revise the revisions already released by former Gov. Martin O’Malley. In June the Maryland Dept. of the Environment held public hearings where anti-drilling nutjobs paraded around spreading lies about how fracking will kill ya (see Maryland Holds Hearings on Fracking, Crazies Turn Out to Complain). In order to meet the deadline of Oct. 1, 2017 (the date when the current two-year moratorium expires), newly revised regulations need to be published a year in advance–by Oct. 1, 2016. According to “officials” who spoke to the very liberal Baltimore Sun, that isn’t going to happen. So what now? If the two-year moratorium runs out, can drillers begin drilling–without the revised revisions of the revisions of the regulations? Theoretically, yes they could. The better question is: Will anyone try to drill even if they could?…
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    Landowners Go to Harrisburg to Pressure Lawmakers on Royalty Bill

    Mr. Smith Goes to Washington
    Mr. Smith Goes to Washington

    Pennsylvania landowners are, as we recently pointed out, in a civil war with the Marcellus industry over the issue of royalties (see Deep Dive: PA Royalties Civil War Between Landowners & Drillers). Landowners want House Bill (HB) 1391 passed–a bill guaranteeing landowners will receive a minimum 12.5% royalty payment regardless of post-production costs. Drillers, being represented by the Marcellus Shale Coalition, are pushing back by saying landowners must live under the contracts they’ve signed. It’s complicated–read our previous articles about it here. With a short time left in this legislative session, landowners continue to press their case with lawmakers. The latest in the skirmish is that landowners have set up a table in the Capitol Rotunda in Harrisburg to lobby (i.e. pressure) lawmakers into taking action on the bill…
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    NatGas Trades Above $3/Mcf 1st Time in > 1 Yr, Still Low in M-U

    natgas-priceWe’ve just hit a milestone worth mentioning. Yesterday the price of natural gas as traded at the benchmark Henry Hub delivery point (in southern Louisiana) closed at over $3 per thousand cubic feet (Mcf). It’s an important psychological barrier that gives traders (and drillers) hope for higher prices. However, before we begin popping the champagne corks here in the Marcellus/Utica, you should understand that there is no “the price” in natural gas. Gas is traded at hundreds of locations along major gas pipelines. The venerable Henry Hub is important because it is the benchmark, setting prices that many gas contracts are tied to. But the reality of natural gas prices for the Marcellus and Utica is one of low prices due to lack of pipeline capacity to move our oversupply to other markets. So while the price of gas trading at the Henry Hub yesterday closed at $3.08/Mcf (according to price experts Natural Gas Intelligence), the price of gas trading at the Tennessee Gas Pipeline Zone 5 300L in northeastern PA closed yesterday at $1.26/Mcf (NGI). Here’s more on yesterday’s important Henry Hub breaking through $3 story, and why the price is going higher right now…
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    Cheniere Energy Upsizes IOU Offering from $1B to $1.5B

    friskyCheniere Energy operates the only liquefied natural gas (LNG) export facility in the United States–currently. There are others planned, like the Cove Point, Maryland facility currently under construction. We keep tabs on Cheniere, even though it’s located in Louisiana, because the pipelines that serve it either are or soon will have Marcellus/Utica natural gas flowing through them–to the Cheniere plant. It’s potentially a very important market for our natural gas. We’ve had plenty of Cheniere news lately. Earlier this week we told you about a major restructuring at the top of the company, and the news that Train 2 at the plant is about ready to rock and roll (see Cheniere Restructures Management Team, Finishes Train 2). We have more news. The company had planned to float a big $1 billion of new “notes”–what we call IOUs. The news is that Cheniere is feeling frisky and has upsized the note offering. They’re now floating $1.5 billion of new senior notes…
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    IPAA Launches Campaign to Defeat EPA Methane Regs

    Yesterday MDN reported on the scorching remarks by two U.S. Congressman with regard to the federal Environmental Protection Agency’s rogue actions to try and regulate oil and gas drilling by imposing new methane emissions regulations (see Congressmen Blast EPA Over New Methane Regulations). Let’s keep the heat on. The premier organization representing independent oil and gas drillers is the Independent Petroleum Association of America (IPAA). The IPAA is at the forefront in fighting the EPA to defeat these draconian new regulations. According to the IPAA (quoting the EIA), these new regulations would make marginal oil and gas wells unprofitable to operate. Those so-called marginal wells represent 15% of all the natgas produced in the U.S., and 20% of the oil produced. Can you imagine what would happen to prices if you suddenly shut down that much production? No, the Obama EPA doesn’t think of things like that–and that’s the problem. Or if they do think about it, they certainly don’t give a fig. The IPAA sent around a letter outlining their game plan for fighting the EPA’s draconian methane emissions regs. Huddle up–here’s the plan…
    Read More “IPAA Launches Campaign to Defeat EPA Methane Regs”

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    Fossil-Fuel-Hating Sierra Clubbers Plan to Protest Shale Insight

    haterAnti-coal, anti-natural gas, anti-oil, anti-logic…the radicals who make up the Sierra Club are anti-everything. They can’t even stand themselves! Self-loathing seems to be a requirement for membership. The Allegheny sub-group of the Sierra Club is planning to protest in front of the David L Lawrence Convention Center in Pittsburgh this coming Thursday morning. Why? Because presidential candidate Donald Trump is scheduled to speak and they HATE HIS GUTS. They also hate frackers and those who support them, like your humble editor. There’s no better unifier on the left than hatred. MDN will be on location at the event and if we get a chance we’ll snap a picture or two of the nutters out front protesting. Meanwhile, here’s the Sierra Club game plan for Thursday…
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    Range Resources Completes Buyout/Merger with Memorial Resource

    tie-the-knot.jpgAs MDN previously reported, Range Resources, the very first driller in the Marcellus Shale (in 2004) and one of the largest Marcellus drillers, has decided to take advantage of the down market and branch out into another shale play (see Range Resources Buys Louisiana Driller in Deal Worth $4.4B). In May Range announced a deal to buy Memorial Resource Development Corp. (MRD) in a stock swap/debt assumption deal worth $4.4 billion. MRD holds 220,000 acres of leases and drills in the Terryville Field in northern Louisiana. Essentially Range has purchased themselves a Gulf Coast operation which sets them up nicely to export natural gas to Mexico. That’s at least part of the attraction. Perhaps another part of the attraction is that gas from Terryville Field, part of the Cotton Valley Tight Gas formation, is cheaper to drill and in many cases just as productive as shale wells in the Marcellus. Last Thursday Range reported receiving final stockholder approval for the merger/buyout, and last Friday Range reported that the deal is now done…
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    Cheniere Restructures Management Team, Finishes Train 2

    cheniereAfter firing Cheniere Energy’s CEO and co-founder last December, Charif Souki, corporate raider Carl Icahn then installed his own puppet to run the LNG exporting company (see Carl Icahn Installs New Puppet as CEO of Cheniere Energy). The man Carl hired is Jack Fusco. Apparently Jack is confident in himself and in the future of Cheniere, because snapped up $1.5 million worth of Cheniere’s stock not long after he assumed the role of CEO (see Carl Icahn’s Cheniere CEO Buys 37,604 Shares of Stock). We have a pair of updates for Cheniere: first, we have some musical chairs and new appointments in the senior management ranks of Cheniere. Jack (i.e. Carl Icahn) is making changes. Second, the company announced that Train 2 at the Sabine Pass Liquefaction Project is now substantially complete and they’ve taken it over from the builder, Bechtel. Why go on about an LNG export plant in southern Louisiana?…
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    Congressmen Blast EPA Over New Methane Regulations

    Last week the U.S. House Science, Space, and Technology Committee held a public hearing titled, “A Solution in Search of a Problem: EPA’s Methane Regulation.” The chairman of the Committee, U.S. Rep. Lamar Smith (R-Texas), and the chairman of the Subcommittee on Environment, U.S. Rep. Jim Bridenstine (R-Okla.), delivered prepared opening statements that were scorchers. Both Congressman didn’t beat around the bush–they called out the EPA for the extreme overreach they’ve been engaged in, particularly with this latest travesty in attempting to control the oil and gas industry via the back door of methane regulations. Here’s how it went down (grab a fire extinguisher!)…
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    New IEA Report: Worldwide Investment in Energy Dropped 8% in 2015

    ieaThe International Energy Agency (IEA) is a European run and influence group of 29 countries that fervently believe the sky is falling, and that Mom Earth is toasting. Yep, global warmists. According to the IEA, the group is “an autonomous organisation which works to ensure reliable, affordable and clean energy for its 29 member countries and beyond. The IEA has four main areas of focus: energy security, economic development, environmental awareness and engagement worldwide.” Er, ah, right. That makes it plain as day. Anyhow, the socialist IEA has no problem charging a king’s ransom for the reports they periodically issue. Last November the IEA issued their annual World Energy Outlook, predicting the world will see $80/barrel oil by 2020 (see IEA World Energy Outlook Predicts $80 Oil by 2020). ***Children! Please stop your laughing! Some people still believe in peak oil theory and it’s not nice to make fun of them!*** Back to center. The IEA has just published another new report–this one the first annual World Energy Investment report. As the authors point out: The “lifeblood” of the global energy system is…investment. That is, money. Without it, new sources of energy don’t appear. The IEA’s report says in 2015 global investment in energy went down 8% over 2014 levels. But for IEA there was good news in the bad news–almost all of the drop was in fossil fuel investment, whereas investments in so-called renewable sources of energy continued to increase last year. So says the IEA…
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    Obama DOL White-Collar Overtime Reg Affects O&G Industry

    overtimeYou did know that it’s not only the Obama EPA that routinely overreaches by issuing draconian regulations, right? Other Obama agencies, like the Dept. of Labor (DOL), are also guilty of draconian overreach. On May 18, 2016, the DOL published new changes that affect who is and who is not exempt from charging overtime. With the wave of the DOL’s magic wand they doubled the minimum salary necessary for white collar jobs to be “exempt” from overtime. That is, if you now earn a salary below $47,476 annually (or $913 per week), and if you work more than 40 hours a week, it doesn’t matter what your job is–you will be owed overtime for any hours over 40. Which may sound just dandy. Except if your company can’t afford to pay it, you’re about to get laid off, fired or otherwise put out to pasture. Tell me again how much Obama loves me. Employers have until December 1st to figure out what the heck to do, and how to comply, with these draconian new regulations. The legal beagles at law firm K&L Gates have put together a handy guide to help…
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    GTL Discovery Converts Methane into Methanol at Room Temp

    fesiGas-to-liquids (GTL) plants often convert natural gas into methanol. Methanol is one of the most commonly used substances in the chemical industry–used to produce antifreeze, fuels, solvents and many types of plastics. Converting methane (or natural gas) into methanol has been around for a while–but converting it at room temperature, using far less energy, is new. Scientists at KU Leuven and Stanford University have figured out how to do it. And it’s a really big deal…
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    FERC Gives WV to VA Mountain Valley Pipeline Provisional Thumbs Up

    thumbs-up.jpgThe Federal Energy Regulatory Commission (FERC) has given a preliminary thumbs up to the Mountain Valley Pipeline, 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 last October, is being built by EQT, NextEra Energy and several other partners (see Mountain Valley Pipeline Files FERC Appl, Now Just Matter of Time). The project has faced stiff opposition from landowners in West Virginia (see Mountain Valley Pipeline Sues 103 WV Landowners for Survey Access). The project has also faced opposition from landowners in Virginia (see Mountain Valley Pipeline Wins Right to Survey in VA w/o Permission). Last Friday FERC issued a Draft Environmental Impact Statement (DEIS) for both the Mountain Valley Pipeline and an associated project called the Equitrans Expansion Project. FERC’s DEIS runs a mammoth 781 pages (full copy below) and says the pipeline “would result in limited adverse environmental impacts, with the exceptions of impacts on forest.” In other words, FERC is giving the project a thumbs up…
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    DC Liberal Says Shell Cracker a Bad Deal for PA Taxpayers

    unbelievableThis story is unbelievable on so many levels. A pointy-headed liberal who cloisters himself inside the insular Beltway of Washington, DC made a trip to Pittsburgh last week to talk to a small class of 70 students at Carnegie Mellon University. In this talk the lib proclaimed that the “incentives” provided by PA to Shell to lure a cracker plant to the state are, essentially, monies the state didn’t have to spend and a burden to the taxpayers of PA because Ohio and West Virginia may also reap some of the benefits of the cracker (without “paying” for it). The lib’s operating assumption is that 100% of everyone’s money belongs to the all-knowing government–including money made by big, evil corporations like Shell. He further states that by granting a few exemptions on taxes to Shell, PA is taking money out of the pockets of common folk. His philosophy and assumptions are so twisted it’s beyond belief. What’s more twisted is that the Pittsburgh Post-Gazette wrote a major story about the talk–as if it’s news…
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    OH Business Roundtable Report: Build New Pipelines NOW

    brt-logoThe Ohio Business Roundtable (BRT) is a partnership of the CEOs of leading Ohio companies that collectively account for more than $1 trillion in annual revenues, $1 trillion in market value and $2.6 trillion in assets. BRT’s members employ 2.6 million men and women, invest hundreds of millions of dollars annually in combined charitable contributions and research and development, and generate billions of dollars in sales for small and medium-sized businesses that are part of the supply chain. When the BRT in Ohio talks, people had better listen. Here’s the latest in what the BRT has to say: The state (i.e. Gov. Kasich) needs “a comprehensive reworking of the state’s energy policies in order to accelerate shale gas development.” No more tiptoeing around. Build those pipelines and build them NOW. That’s the upshot of a new report from the BRT titled, “Improving Ohio Energy Competitiveness” (full copy below). The report is backed up by detailed research from powerhouse consulting company McKinsey and Co. (their research is also embedded below). The BRT’s report points out the importance of the state’s natural gas-fired electric generating plants and says without more pipelines, new power plants won’t get built. The two issues are joined at the hip–vitally important for Ohio’s shale drillers, midstream companies, electric generators and yes Ohio’s electric ratepayers as well. LISTEN UP: Here’s what the BRT had to say…
    Read More “OH Business Roundtable Report: Build New Pipelines NOW”

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    NY Gov. Andrew Cuomo Halts Pilgrim’s (Pipeline) Progress

    Pilgrim Pipeline logoLast November, MDN told you about Pilgrim Pipeline Holdings, developing an East Coast pipeline to carry refined petroleum products such as gasoline, diesel, heating oil, and jet and aviation fuel northbound from Linden, New Jersey to Albany, New York (178 miles). In addition, a second Pilgrim pipeline will carry crude oil from Albany south to NJ and other locations. Two pipelines, side by side, liquids flowing through them in different directions (see Will Pilgrim Pipeline be Allowed to Settle in the NY World?). The oil that would flow south from Albany comes from trains delivering crude from the Bakken Shale play–a double evil in the sight of radical anti-fossil fuelers. So they turned up the pressure on the spineless Cuomo (see NY Antis Hope Gov. Cuomo Will Halt Pilgrim Pipeline’s Progress). It appears the pressure, once again, has worked. Last week the state Dept. of Environmental Conservation and the state’s Thruway Authority, working together, informed Pilgrim they will need to submit to a detailed anal exam, called a full environmental review, before obtaining approval. Anti-fossil nutters are rejoicing that the project has been slowed (gives them a chance to kill it). But Pilgrim is also spinning the news as a good thing–saying they welcome the full environmental review to prove the safety and righteousness of their proposal. Can this actually be good news for both sides?…
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