Industrywide Issues

Earthquakes | Industrywide Issues

Canadian Summertime Earthquake Said to be Tied to Fracking
December 22, 2015December 22, 2015

This is not strictly a Marcellus/Utica story, but interesting and relevant nonetheless. Last summer a 4.6 magnitude earthquake hit northeast British Columbia (Canada). The BC Oil and Gas Commission has confirmed that the quake was as a result of fracking shale wells in the area. This is perhaps the fifth or sixth time fracking itself–and not a wastewater injection well–has been tied to an earthquake. Ever. Worldwide. Which means fracking causes earthquakes, statistically speaking, 0% of the time. Of course that kind of context won’t get reported as the meme of “Canada confirms fracking caused quake” bounces around the mainstream mediasphere. Which is why we bring you the news here on MDN–to provide context that an instance where fracking actually does cause an earthquake is as rare as hen’s teeth. The truly amazing aspect of the story is this: BC authorities didn’t shut down the fracking operation! They took a very adult, mature approach: Back off a bit on the pressure you’re using to frack the well with, and if another quake then happens, we’ll shut it all down and think through another approach…
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Commodity Price | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Southwestern Energy

Problem: Some Marcellus/Utica Drillers Entering 2016 Not Hedged
December 22, 2015December 22, 2015

A recent report issued by Standard & Poor’s Ratings Services sounds an alarm over the issue of hedging for 2016–in particular for independent producers in the Marcellus and Utica Shale region. What’s hedging and why do we care? Drillers (and others who buy and sell natural gas) often engage in a practice called hedging, which is, in a simplified explanation, a contract to sell (or buy) a commodity like natural gas at an agreed-on price at a future date. There is an element of risk in hedging. From a driller’s perspective, if you strike an agreement to sell your gas in the future and the price goes a lot higher, you have to sell your gas at the lower price you agreed to. That’s the down side. But if the price goes a lot lower in the future, you’ve covered your derriere by locking in a higher price for the gas you produce–making money when your competitors aren’t. Drillers and others who buy and sell gas use hedging as a way to guard against price swings. It’s a “risk management” function in a company. Unfortunately most of the hedges previously arranged more than a year ago are now expiring. And nobody but nobody is willing to strike a contract right now for $3 or $4/Mcf gas a year or more down the road. No one believes the price will recover that much. Which means many drillers (in our neck of the woods) are entering 2016 without their production being hedged–a very scary proposition…
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Energy Services | Industrywide Issues | Lease & Royalty Payments | NEXUS Pipeline | Ohio | Pipelines | Statewide OH

Columbus Law Firm: How to Get the Best Pipeline Easement Deal
December 22, 2015December 22, 2015

Goldman & Braunstein is a Columbus, OH law firm that’s carved a niche out of representing landowners in eminent domain disputes with pipeline companies. Earlier this year the firm asked the Federal Energy Regulatory Commission to disallow Energy Transfer Partners’ use of eminent domain in building the ET Rover pipeline (see OH Law Firm Asks FERC to Stop ET Rover Pipeline Eminent Domain). Michael Braunstein and Bill Goldman are at it again. Last week they held a meeting in Huron County, OH to advise landowners who potentially face eminent domain action by the NEXUS Gas Transmission pipeline project. They offer some good counsel. But make no mistake–they’re there to drum up business. Goldman & Braunstein do not say landowners can block the pipeline from coming through their property. What they do say is that their firm can get landowners a better deal, and ensure pipeline installation is “put in properly” by using (yep) Goldman & Braunstein. The firm believes landowners should be paid “over $100 per foot” for any deal they do with NEXUS. That’s the highest per-foot price we’ve ever heard of when it comes to pipeline easements. If they can pull that off, more power to ’em!…
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Anti-Drilling/Fossil Fuel | Dominion Energy | Energy Services | Industrywide Issues | Pipelines | Upshur County | West Virginia

Sierra Club Pressures WV County to Oppose Atlantic Coast Pipeline
December 22, 2015December 22, 2015

The Virginia Chapter of the Big Green (and very radical) Sierra Club is pressuring county commissioners in Upshur County, WV to support their effort to block the Atlantic Coast Pipeline. Atlantic Coast is a $5 billion, 564-mile natural gas pipeline from West Virginia through Virginia and into North Carolina. Dominion is the company building it. The strategy being employed by the radicals at the Sierra Club (and at other Big Green groups that should lose their non-profit status because the engage in political activities) is to try and force the Federal Energy Regulatory Commission to combine all of the pipelines being proposed into one, massive environmental impact review–hoping that by combining separate projects together it will trigger a decision to deny all of them. The problem is by law FERC cannot combine separate projects together. Not all of those projects will get built. And they run in different geographies. FERC’s mandate, under U.S. law, is to evaluate each project individually. But silly things like obeying the law never stops Big Green groups–they just keep right on community agitating…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Taxation

$30M in PA Act 13 Money Missing – Theft or Bureaucratic Cock-up?
December 21, 2015December 21, 2015

Nearly $30 million of Act 13 shale tax money that comes from an impact fee (i.e. tax) on Marcellus drilling in Pennsylvania is “unaccounted for.” The media is playing this up as “the money has gone missing” with the implication something nefarious is going on. The truth is a little more mundane. Some local municipalities receiving the money are confused as to which forms they have to file, and which agencies they need to file the forms with. It appears to be a bureaucratic cock-up–not theft, as implied by some in the media…
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Anti-Drilling/Fossil Fuel | Crime | Electrical Generation | Industrywide Issues | New York | Orange County

Actor James Cromwell Arrested Protesting NY Power Plant Site
December 21, 2015December 21, 2015

James Cromwell as Zefram Cochrane

Hollywood actor James Cromwell was born in Manhattan (NYC) and maintains a summer home in upstate–in Orange County, NY. Cromwell played Zefram Cochrane (mythical creator of the warp engine) in the 1996 movie Star Trek: First Contact (one of our favs). It was distressing to learn that Cromwell is the latest Hollywood know-nothing to oppose natural gas. Cromwell opposes a clean-burning natural gas-fired electric plant being built near his summer home in Orange County, because, well, because it’s being built near his summer home (see Star Trek Actor with Upstate NY Home Speaks Against Power Plant). In September Cromwell and other area anti-fossil fuelers sued to stop the Competitive Power Ventures $900 million project–perhaps they prefer dilithium crystals to natgas? The frivolous lawsuit was tossed out (see Orange County, NY Marcellus-Fired Electric Plant OK’d by Judge). Well, what’s a spoiled rich kid from Manhattan who wants to keep upstate pristine as his own private playground going to do? Get a bunch of easily-impressed neighbors to stage a sit-in and illegally block construction at the site. That’s what Cromwell and some of his homies did last Friday–they got arrested and carted away to the klink…
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Ethane | Industrywide Issues | Pipelines | Processing Plants | Statewide WV | West Virginia

IOGAWV Rep Says Marcellus/Utica Can Support “8 or 9 Crackers”
December 21, 2015December 21, 2015

The president and CEO of Eagle Manufacturing in Wellsburg, WV is Joe Eddy. During a recent meeting in Oglebay Park, Eddy represnted the WV Indpendent Oil and Gas Association. He had some interesting things to say. Among them: the Marcellus/Utica region could right now support “eight or nine crackers.” He also spoke out against three ethane pipelines that transport northeast ethane to other regions…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Research | Statewide PA

Dela. Riverkeeper Attempts to Discredit PA DEP Shale Radiation Report
December 21, 2015December 21, 2015

Stay tuned for five feet of snow. No, it’s not a weather report, it’s the snow job THE Delaware Riverkeeper (i.e. Maya van Rossum) is attempting with respect to a research report issued by the Pennsylvania Dept. of Environmental Protection (DEP). In January 2015, the DEP filed a report following two years of intense study to determine whether/if/how much radiation exposure is an issue in shale drilling. While the DEP found there is sometimes some low levels of radiation, the report concluded there is “little harm” from radiation in shale drilling (for the study results, see PA DEP Completes Fracking Radiation Study, Concludes “Little Harm”). When real science is published that contradicts the political science of global warming advocates like Maya van Rossum, the real science must go. And so van Rossum hired a discredited scientist to produce a review of the January 2015 report by the DEP, calling it “inaccurate and incomplete.” Van Rossum dragged out Dr. Marvin Resnikoff, who was humiliatingly slapped down by none other than the U.S. Geological Survey in 2012 (see Radon Debate: USGS Responds to Marvin Resnikoff Accusation). Resnikoff is the scientist-for-hire van Rossum used in concocting the latest snow job coming from her outfit…
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Energy Services | Industrywide Issues | NEXUS Pipeline | Pipelines | Regulation | Spectra Energy

Canada Approves Marc/Utica NEXUS Pipeline to Dawn Hub in Ontario
December 21, 2015December 21, 2015

Everybody always talks about the Henry Hub, which is the natural gas delivery point where more physical natural gas is bought and sold than any other single location in North America. However, do you know what the second largest physically traded gas hub in North America is? We just learned this interesting factoid ourselves. The #2 location for trading natural gas, after the Henry Hub, is the Dawn Hub in southwestern Ontario (Canada)–not far from the border of Michigan. The Dawn Hub is in the news because of the NEXUS Gas Transmission pipeline project. Last week the Ontario Energy Board approved applications from Union Gas Limited and Enbridge Gas Distribution to move gas along the NEXUS, once its built, to the Dawn Hub. In other words, Canada has just approved the Canadian portion of the NEXUS project. We’re glad Canada isn’t holding grudges against the U.S after the Obama Administration obtusely rejected the Keystone XL pipeline project, a Canadian pipeline coming through the U.S. Here’s the good news from Spectra Energy on Canada’s approval of NEXUS…
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Electrical Generation | Industrywide Issues | Luzerne County | Pennsylvania

Moxie Marcellus-Powered Electric Plant Breaks Ground in NEPA
December 21, 2015December 21, 2015

Groundbreaking! Really great news from Salem Township in Luzerne County, PA. The Moxie Freedom Marcellus gas-powered electric plant broke ground last week. The $800 million, 1050-watt facility was approved by the PA Dept. of Environmental Protection in September (see Moxie’s NEPA Marcellus-Powered Electric Plant Gets DEP Approval). Just last month Gemma Power announced they were selected to build the plant for Moxie (see Gemma Power Gets Contract to Build Moxie Freedom Electric Plant). Here’s the good news that the first shovel hit the dirt last week…
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Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Sunoco Logistics | Washington County

Judge Rules Yes, Mariner East Pipe IS a Public Utility After All
December 21, 2015December 21, 2015

In June we told you that Sunoco Logistics Partners had sued two different families/landowners in Washington County, PA using eminent domain to complete a pipeline part of the Mariner East project (see Mariner East Invokes Eminent Domain Against 2 SWPA Landowners). As we said at the time, nobody wins when it comes to using eminent domain for pipelines. In the case of the Mariner East pipeline, the ongoing legal question/issue has been whether or not the pipeline qualifies as a public utility with the right to invoke eminent domain. Last week a Washington County judge ruled that yes, Mariner East is a public utility and that the state of Pennsylvania controls permitting for the pipeline, not the Federal Energy Regulatory Commission (FERC). The Washington County landowners who sued have lost their appeal of the eminent domain case against Sunoco, and the pipeline will now cut through their property…
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Energy Services | Industrywide Issues | Ohio | Statewide OH | Supply Chain | Wood Group

Scottish Company Buys OH Construction Co for Utica/Marcellus Work
December 21, 2015December 21, 2015

Wood Group, a $7 billion energy services company headquartered in Aberdeen, Scotland, announced this morning they are purchasing Kelchner Inc., a privately-owned construction firm. Kelchner is located in Ohio and concentrates on providing civil engineering and construction services for midstream and upstream companies in the Marcellus/Utica. Terms of the deal were not disclosed, but Kelchner generated sales of $93 million last year and Wood just got done buying a similar company along the Texas Gulf Coast by the name of Infinity Group for $150 million. So it wouldn’t surprise us if they paid a similar amount for Kelchner…
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Economic Impact | Industrywide Issues

Moody’s: Fed Interest Rate Hike Hurts the Oil & Gas Industry
December 21, 2015December 21, 2015

Moody’s Investors Service, one of the biggest and most respected ratings services on the planet, issued a statement last week after the Federal Reserve voted to raise interest rates from zero to a quarter point (0.25%). Moody’s offered their opinion of how the interest rate increase will affect U.S. companies. Their conclusion? Companies with good credit quality will be able to absorb the higher interest rate no problem. But companies that are, shall we say, “credit challenged” will have a tougher time. Among those most credit challenged? Yep, the oil and gas sector…
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Greene County (PA) | Industrywide Issues | Pennsylvania | Regulation | Research

PA DEP Admits No Radiation in Ten Mile Creek, Closes Investigation
December 18, 2015December 18, 2015

Here’s a story most of the Democrat anti-drilling media won’t tell you–but we will. In 2014 Pennsylvania anti-drillers from a local chapter of the Izaak Walton League, a so-called conservation organization, attempted a smear job on the Marcellus Shale industry. They alleged that shale drillers were illegally dumping frack wastewater in an abandoned coal mine, the Clyde Mine, which sits near the Ten Mile Creek where the creek joins the Monongahela River. According to the smearmeisters, the illegally dumped wastewater was leaking out of the mine and into Ten Mile Creek (see Is Shale Wastewater Causing Radiation Spike in Ten Mile Creek?). They claimed testing they had done showed high levels of radioactivity that could not come from just acid mine drainage, that it is radioactivity typically seen in shale wastewater. Of course the allegations got a lot of media attention. The Pennsylvania Dept. of Environmental Protection (DEP) investigated and echoed their concerns with initial tests also showing high radioactivity. Except the testing done by the DEP, and the testing done by the Izaak Walton League, WAS THE WRONG TYPE OF TEST. They blew it. Researchers from West Virginia University came in and tested using the appropriate type of test and found no elevated radioactivity (see PA DEP Screws Up Water Test at Ten Mile Creek – Egg on Face). The DEP has just concluded six months of their own tests–the right type of tests–and guess what? They’ve also found there IS NO elevated radioactivity in Ten Mile Creek nor anywhere else in the area…
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CNX Resources | CONSOL Energy | Energy Companies | Industrywide Issues | Pennsylvania | Regulation | Washington County

PA DEP Fines CNX Gas $450K for Drawing Too Much Water Too Often
December 18, 2015December 18, 2015

Turns out drawing “free” water from a reservoir in Pennsylvania can cost you quite a bit. CNX Gas, the drilling division/subsidiary of CONSOL Energy, didn’t follow an agreed-upon plan for how much, and how often they withdrew water from a reservoir in North Franklin Township (Washington County), PA. The water withdrawal violations went on between 2011 and 2014 and because of it, CNX will now pay a whopping $450,750 fine. Three-fourths of the fine goes to the Dept. of Environmental Protection (DEP), and the other one-fourth goes to the PA Fish and Boat Commission (PFBC). Here’s the details from the DEP…
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Anti-Drilling/Fossil Fuel | Fayette County | Industrywide Issues | Regulation | Wastewater | West Virginia

2 Democrat Commissioners Ban Injection Wells in Fayette County, WV
December 18, 2015December 18, 2015

In the end it was just two people who decided to outlaw a legally operating wastewater injection well in Fayette County, WV. Two county commissioners, Denise Scalph and Matt Wender (both Democrats), voted to end the right of Danny Webb Construction to operate an injection well in the county, as it has done for over a decade (perhaps longer, we’re not sure). Aided by a rabidly leftist group called the Mountain Party (left of Vlad Putin), the so-called county commission attorney, Larry Harrah, crafted the state’s first “screw ’em royally” ordinance that he believes is lawsuit-proof. We’ll see just how lawsuit-proof it is when it gets tested, as it surely will…
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