Tenaska NatGas Power Plant in Westmoreland, PA Advances
In April MDN reported that a long-delayed $780 million natural gas-fueled power plant in South Huntingdon (Westmoreland County), PA has received a go-ahead and will be built by energy giant Tenaska (see Construction Begins on $780M SWPA NatGas-Fired Power Plant). The project was first proposed in 2009. It has all the necessary permits and now has the necessary funding. Marcellus/Utica natural gas will feed the plant. Black & Veatch is doing the engineering work and acting as the contractor for the project. However, E3 Consulting, another engineering firm, was hired by investors in the project to check out the plans–before the backhoes start digging. The good news is that E3 has looked close and given the project its seal of approval…
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We love it when we spot a company adopting a contrarian strategy. Received wisdom and prevailing thought says that the oil and gas industry–especially in the Marcellus/Utica–is contracting. Drillers aren’t drilling, and that affects the supply chain (those companies supplying goods and services to the industry) in a big and negative way. Yep–true enough. But the received wisdom also says companies should diversity–look for business outside of the oil and gas industry. What’s contrary is to take advantage of this downturn to expand capacity–to get ready for when the downturn turns again into an upturn. That’s just what Watco Transportation Services is doing with their Kanawha River Railroad short line subsidiary. Kanawha River Railroad has just cut a deal to lease 309 miles of rail lines from Norfolk Southern in Ohio and West Virginia. One of the customers on these short haul lines will be, yep, Marcellus and Utica drillers and sand suppliers and chemical suppliers and equipment suppliers. Nope, there’s not all that much shipping right now, which makes this a step of faith. But the company believes that the future will be here soon and things will turn and the Kanawha River Railroad will be ready to take full advantage of it. We love a railroad story, and we love a contrarian story. This is both…
In the past 12 months, some 27% of all E&Ps (exploration and production companies, what we call “drillers”) have defaulted on some of their bonds–the debt they owe. That’s huge. According to Fitch Ratings, before we turn the corner, they expect that number to grow to 30-35% of E&Ps. Defaulting on bonds doesn’t necessarily mean a company has filed for bankruptcy, but a plethora of bankruptcies have, according to Fitch, driven the bond default number way up. Here’s the latest on bond defaults and the sentiment that “it’s going to get worse before it gets better” from Fitch…
In June 2015 then-Secretary of the Pennsylvania Dept. of Environmental Protection (DEP), John Quigley, slapped Range Resources with an $8.9 million fine–the largest such fine ever levied by the DEP (see 
Bloomberg analysts do a deep dive into pipeline projects in the northeast in a recent article. The article contains an update on 17 planned pipeline projects in the northeast (see the full list detailing each project below). The reporter interviews Marty Durbin, executive director of market development at the American Petroleum Institute (API), and MDN friend Scott Kurkoski, chair of the energy group at the Binghamton law firm Levene, Gouldin & Thompson. Here’s what they have to say about the future of pipeline projects in New York State…
It’s not all gloom and doom in the Marcellus/Utica industry–but there’s no doubt we’re in a downturn. Drillers (or energy companies or producers) are having a tough enough time–but they can just stop drilling for a while and hope that the cash holds out long enough to begin again. But what about those who depend on the drillers? The companies that supply goods and services to others in the industry? What we call, the supply chain. How are they doing? And what strategies are supply chain companies using to weather the current downturn? Let’s find out…
Last week the Ohio Manufacturers’ Association (OMA), along with several other trade associations, filed a “friend of the court” brief (called an amicus brief, full copy below) in a case pending before the Ohio Seventh District Court of Appeals (in Youngstown). The OMA wants the Court of Appeals to uphold the ruling of a Harrison County trial court in the eminent domain case of Sunoco Pipeline v. Carol A. Teter, Trustee. OMA says eminent domain should be used in rare circumstances, but when no other choices remain, its use is legitimate and necessary. In particular, OMA is supporting Sunoco’s right to use eminent domain for the Mariner East 2 project–a project that will employ a lot of OMA businesses and their employees…
MDN previously reported on the injustice happening in Bulter County where a handful of anti-drilling parents from the Mars School District, backed by money from Philadelphia from Big Green groups Delaware Riverkeeper and Clean Air Council, filed frivolous lawsuit after frivolous lawsuit–denying landowners in Middlesex Township revenue from legally permitted drilling. The actions by these radicalized parents have cost the taxpayers of Middlesex Township over $80,000 in legal fees. So the landowners got together and sued them, to stop this miscarriage of justice (see 
The ongoing low price for oil and gas is profoundly changing the drilling landscape under our feet. In what some might call a marriage of convenience we would call a marriage of desperation: U.S.-based oilfield services company FMC Technologies announced yesterday they will merge with their much larger quasi-competitor, France-based Technip, in an all-stock deal that will create a new company called TechnipFMC worth $13 billion. FMC had/has some operations in the Marcellus/Utica, hence this merger has implications for our region. The new venture would be bigger than Baker Hughes and would rival and compete with the world’s two largest oilfield services companies: Schlumberger and Halliburton. Technip specializes in engineering and construction, while FMC specializes in offshore equipment and systems. The immediate question becomes, will Europe, the U.S. and other counties that opposed the Halliburton/Baker Hughes merger also oppose this one? Prevailing thought by analysts is that this merger will have a much easier path because the two companies have very little overlap in the current services they offer…
In January 2015 MDN highlighted an ongoing squabble near Cleveland, in Cuyahoga County, OH, between the Ohio Dept. of Natural Resources (ODNR) and the Ohio Oil and Gas Commission (OOGC) (see 
We wonder if the anti-pipeline/anti-fossil fuel zealots in Lebanon County, PA are trying to kill members of the Federal Energy Regulatory Commission (FERC) by boring them to death. The local antis–a small yet vociferous group of nattering nabobs–have hounded the Lebanon County Board of Commissioners into sending along a 1,000-page tome to FERC listing their concerns with two pipeline projects. Along with the bore-you-to-death document, the Commissioners have included a letter requesting FERC extend the comment period on the Atlantic Sunrise Project by an extra 30 days. Which sounds reasonable–except at the end of that 30 days the antis will ask for another extension, then another, and another. That’s the strategy. If you can’t dazzle them with brilliance, baffle them with, well, you know what…