Industrywide Issues

Industrywide Issues | Research | Reserves (Proved and Unproved)

EIA: Shale Rockets U.S. Proved O&G Reserves to New Records
November 24, 2015November 24, 2015

Our favorite government agency, the U.S. Energy Information Administration (EIA), yesterday released their annual report of proved oil and natural gas reserves in the United States for 2014. The report, titled “U.S. Crude Oil and Natural Gas Proved Reserves, 2014” (full copy embedded below) shows proved reserves for natural gas rose by 34.8 trillion cubic feet (Tcf), or 10%, to a record high of 388.8 Tcf in 2014. Oil reserves rose 3.4 billion barrels, or 9%, to 39.9 billion barrels. That’s the highest oil reserves have been since 1972! This is the second year in a row for a new natural gas proved reserves record high, and the sixth year in a row for oil proved reserves (see last year’s report, EIA: Proved Reserves for Natgas Up 10% Last Year, Marcellus Leads). As a quick reminder, proved reserves are, according to the EIA, “those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.” That is, proved reserves are what’s in the ground now, can be gotten out, and we can prove it. This is a great report, full of excellent data and interesting charts and graphs…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Wolf Can’t Get Current Budget Done, Vows Severance Tax Next Year
November 24, 2015November 24, 2015

Will Pennsylvania’s governor, Tom Wolf–the most liberal governor in America according to the nonpartisan website InsideGov–finally agree to a budget framework and budget to end a nearly six month delay he has caused? He promised to try and get the budget done by Thanksgiving–but you know all about politicians and promises. That promise is now out the door. The latest news we’ve been able to locate says Wolf’s plan to hike the sales tax in order to give a break on property taxes is now dead. The one thing that every news account we read says is this: Wolf is promising to resurrect the issue of a Marcellus Shale severance next year and every year thereafter of what we predict will be a very short tenure as PA’s governor. Wolf is fixated on raiding drillers and landowners in order to transfer their hard-earned money to those who don’t earn money–teachers unions…
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Industrywide Issues | New York | Pipelines | Regulation | Statewide NY

Will Pilgrim Pipeline be Allowed to Settle in the NY World?
November 24, 2015November 24, 2015

Pilgrim Pipeline Holdings is 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 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. Pilgrim (how apropos this announcement comes at Thanksgiving) has just filed an official application with the Thruway Authority. Their plan is to lay 79% of the pipeline within the Thruway right of way. No, technically this is not a Marcellus/Utica story–although some of the crude they plan to flow from Albany to NJ refineries may indeed come from the Marcellus/Utica. It’s a pipeline for fossil fuels and that will surely bring the crazies right out of the woodwork, which is why we bring you this story…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

Both MarkWest Co-Founders Strongly Against Sale to Marathon
November 24, 2015November 24, 2015

There is a fevered battle going on to prevent Marathon Petroleum from consummating a deal to buy MarkWest Energy. Yesterday we told you that MarkWest was touting two more proxy advisory firms, in addition to a previously named advisory firm, have endorsed the deal (see War of Words Continues: 2 More Proxy Cos Endorse MarkWest Sale). We also told you that one of MarkWest’s two co-founders and a former CEO of the company, John Fox, is dead set against the deal (see Former MarkWest Energy CEO Urges Vote Against Marathon Buyout). The other MarkWest co-founder, Brian O’Neill, has now come out against the sale as well…
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Energy Companies | EnerVest | Industrywide Issues | Jobs | Range Resources Corp | Statewide VA | Virginia

158 Range Resources Employees in SW VA May Lose Jobs by Dec 30
November 23, 2015November 23, 2015

Three weeks ago MDN told you that Range Resources had decided to sell 3,500 operated wells and approximately 460,000 net acres in the Nora/Haysi combined fields located in southwestern Virginia for $876 million to an unnamed buyer (see Range Sells Coal Bed Methane Wells in VA, Focusing on Marcellus). The Nora/Haysi operation consists of coal bed methane natural gas wells–an operation more akin to conventional drilling than shale drilling. The reason for the sale, as we told you at the time, is so Range can pay off debt and continue to concentrate on more profitable Marcellus Shale drilling. We now know that EnerVest is the buyer of the Nora/Haysi fields. We also have sad news that it’s possible (not certain but possible) that 158 jobs associated with the wells/operation may not make the transition. Range has filed a WARN notice (Worker Adjustment and Retraining Notification Act) that 158 workers in Dickenson and Washington counties (in southwest Virginia) could be out of a job by December 30th. Merry Christmas…
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Energy Services | Industrywide Issues | Michigan | NEXUS Pipeline | Ohio | Pipelines | Regulation | Spectra Energy | Statewide MI | Statewide OH

Spectra Energy Files Formal FERC Application for NEXUS Pipeline
November 23, 2015November 23, 2015

Pop the cork on the champagne bottle! Last Friday Spectra Energy and its partners filed their full, formal application with the Federal Energy Regulatory Commission (FERC) to get the federal agency’s approval for the NEXUS Gas Transmission pipeline project. The NEXUS is a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. It is a critically needed pipeline to move Utica and Marcellus Shale gas from an over-saturated market in the northeast to markets in the Midwest and Canada. Below is the official good news press release from Spectra Energy announcing the filing…
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Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation | Tennessee Gas Pipeline

Kinder Morgan Files Formal FERC Application for NED Pipeline
November 23, 2015November 23, 2015

Friday was a big day for pipelines in the Marcellus/Utica. Spectra Energy filed an application with the Federal Energy Regulatory Commission (FERC) to build the NEXUS Gas Transmission pipeline (see our companion story today). In addition, Kinder Morgan filed their formal application with FERC to build the massive $5 billion expansion of the Tennessee Gas Pipeline system from Pennsylvania into New York, Massachusetts, New Hampshire and back into Massachusetts where it will end near Boston–called the Northeast Energy Direct (NED) project. All pipeline projects face irrational opposition, but the NED project faces some of the fiercest opposition, including an anti-fossil fuel crusade against NED by the Massachusetts Attorney General Maura Healey (see Anti-Drilling MA Attorney General: We Don’t Need No Pipelines). The battle is about to reach fevered pitch now that Kinder Morgan has filed the official application…
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Industrywide Issues | Pennsylvania | Warren County | Wastewater

WTC Upgrades Warren, PA Plant, Accept Marcellus Wastewater Again?
November 23, 2015November 23, 2015

We’re returning to a story we last wrote about over a year ago. In October 2013 MDN told you the radical national anti-drilling organization Clean Water Action (CWA) had sued a small Pennsylvania company by the name of Waste Treatment Corporation (WTC) in Warren, PA in federal court claiming the company continued to accept, treat and discharge Marcellus drilling wastewater into the Allegheny River (see CWA Sues/Accuses Waste Treatment Corp of Continued Shale Pollution). WTC was supposed to have stopped that practice two years earlier, in 2011, after then-Secretary of the Dept. of Environmental Protection (DEP), Michael Krancer, got all such operations to cease and desist. Responses to the CWA lawsuit from both the WTC and the DEP raised more questions than they answered for us (see Waste Treatment, PA DEP Respond to CWA Lawsuit). In September 2014, CWA announced they had reached a settlement of the case with WTC agreeing to immediately stop accepting/discharging Marcellus wastewater (even though they say they don’t), install expensive new equipment, and then restart accepting Marcellus wastewater processing again (see CWA v Waste Treatment Corp Wastewater Discharge Lawsuit Settled). The new news is that WTC has installed the aforementioned new technology, news that we get from a press release from the company that sold them the technology. What we don’t know is when, or if, WTC will once again begin to accept Marcellus Shale wastewater at the plant…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

War of Words Continues: 2 More Proxy Cos Endorse MarkWest Sale
November 23, 2015November 23, 2015

The public relations battle between the current management and board of MarkWest Energy, who stand to personally benefit from a sale of the company to Marathon Petroleum (via Golden Parachutes), continues. On Friday MarkWest issued another press release (seems they’re coming along almost daily now) to encourage people to vote “yes” with their units. MarkWest is claiming two more proxy advisory firms have endorsed the deal–Glass Lewis and Egan-Jones. It was just last week that MarkWest’s former CEO issued another press release of his own telling the world this is a bad deal for common unitholders and should be voted down (see War of Words: Battle to Sell MarkWest Energy to Marathon Heats Up). MarkWest, in their latest press release, re-issued their plea for anyone with even a couple of units (think “shares of stock) laying in a drawer somewhere to vote–every vote counts in this battle…
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Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Politicians: Raise Severance Tax, Lower Property Tax
November 23, 2015November 23, 2015

What is it about politicians needing to get their grubby hands on YOUR money? A group of West Virginia state politicians–delegates and one state senator, both Democrats and Republicans–held a town hall meeting at West Virginia Northern Community College last Thursday in which they pontificated that the severance tax in WV is too low, and property taxes for Marcellus/Utica Shale landowners are too high. Below is a summary of the back and forth at the meeting. The somewhat ominous (from our perspective) talk at the meeting is that in this down market politicians want to further kill the drilling industry (the one bright spot) in their state by taxing it higher…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Ohio | Statewide OH

Antis Use Radiation Fears to Oppose Drilling in Wayne Natl Forest
November 23, 2015November 23, 2015

You just have to shake your head. We’ve heard just about every anti-drilling objection a thousand times before, but it never ceases to amaze us how objections get recycled. And every last one is a ruse–meant to distract from the real issue, which is anti-drillers believe in the global warming myth and THAT is the REAL reason they oppose drilling. They don’t/can’t object to drilling for reasons like fracking contaminates water supplies (it doesn’t), or because it causes earthquakes (it doesn’t), or because it releases enough radon to give you cancer (it doesn’t). That last one is the latest objection anti-drillers who live in or near the Wayne National Forest in Ohio are using to try and scare people into support a ban on fracking in the Forest. We’ve been hearing that canard since 2012 (see The Latest Anti-Drilling Scare Tactic: Radon in Shale Gas). The thing about radon, an isotope of radium, is that it’s naturally occurring and found just about everywhere in the northeast–and people aren’t dropping like flies. In fact, the U.S. Geological Survey did a study and found both methane and radon in the water supplies in Pike County, PA–where there IS NO shale drilling (see USGS Study: Pike County Water has Methane, Radon – No Drilling). How do you mitigate radon if you have it in your basement? You vent it to the air where it become inert! But facts haven’t stopped the nutters from coming out of the woodwork in Ohio to claim radium/radon is going to kill everyone if fracking is allowed in the Wayne National Forest…
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Allegheny County | Industrywide Issues | Pennsylvania | Regulation

Pittsburgh Post-Gazette Slavishly Supports Obama’s CPP Takeover
November 23, 2015November 23, 2015

Once again the editorial writers from the Democrat, left-leaning Pittsburgh Post-Gazette show their true Democrat colors. President Obama, as we have reported, has made a breathtaking dictatorial power grab with his EPA’s so-called Clean Power Plan (CPP), a plan that not only screws coal royally, it screws natural gas too (see Obama Stabs Natural Gas Electric Plants in Clean Power Plan). The plan is so bad, 26 states (MORE THAN HALF) are suing to stop it (see 26 States Ask Federal Court to Shut Down Clean Power Plan Now). But America’s most liberal governor (Tom Wolf) and his Secretary of the Dept. of Environmental Protection (John Quigley) support the natural gas-killing CPP (see PA Anti-Fossil Fuel Groups Praise Wolf/Quigley for Supporting CPP). And now the Post-Gazette feels it necessary to try and twist public opinion in favor of this horrible plan too…
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Industrywide Issues | Regulation

Obama Releases Timeline for Fed Power Grab of O&G Regulation
November 23, 2015November 23, 2015

It’s time for the individual states of these United States of America to tell the federal government to screw itself–and REFUSE to comply with directives from the totally out-of-control Environmental Protection Agency and Obama’s so-called Clean Power Plan. Some 26 states (over HALF) have sued to stop the plan (see 26 States Ask Federal Court to Shut Down Clean Power Plan Now). The lawsuit isn’t slowing down the Dictator in Chief, Barrack Hussein Obama, whose administration on Friday released a timeline for a final push next year to take away more rights and freedoms granted under the Constitution by forcing the CPP down the throats of states who won’t comply. Obama and his various departments are going to illegally regulate oil and gas (something the Constitution leaves to the individual states)–unless we stop him. We say the states should rise up and refuse to comply and, if necessary, create a Constitutional crisis–if that’s what it takes…
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Industrywide Issues | Regulation | Research

EIA Stats Reveal Obama CPP Plan to Lower CO2 Isn’t Needed
November 23, 2015November 23, 2015

Why in the world is Obama pushing so hard to regulate oil and gas when carbon dioxide emissions, ACCORDING TO HIS OWN ADMINISTRATION, are going down?! Today the U.S. Energy Information Administration, part of the Dept. of Energy (an executive branch agency), issued a post on their website chronicling the decrease in CO2 emissions coming from energy from 2005-2013. Why are CO2 emissions going down? One word: shale. We might add a second word: fracking. The planet is getting healthier (if you believe in global warming nonsense) because of shale energy–and yet Obama wants to throttle it! Maddening…
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Industrywide Issues | McKean County | Pennsylvania | Processing Plants | Putnam County | Regulation | Warren County | West Virginia

EPA Fines PA Gas Plants for Accidents that Haven’t Yet Happened
November 20, 2015November 20, 2015

It’s something straight out of the Tom Cruise movie Minority Report. The federal Environmental Protection Agency has fined the owner of five Pennsylvania natural gas processing plants and one West Virginia plant (six plants total) $50,221 for spills and leaks at the plants–that never happened. The EPA says Elkhorn Gas Processing hasn’t done enough to prevent such incidents from potentially happening, and therefore the EPA is shaking them down and making them pay for possible future violations. Perhaps it’s more like The Godfather than the Minority Report? Talk about an abuse of power! Do you need any further evidence that the Obama EPA is totally out of control?…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

War of Words: Battle to Sell MarkWest Energy to Marathon Heats Up
November 20, 2015November 20, 2015

The war of words continues in what increasingly appears to be a losing battle for MarkWest Energy to convince enough shareholders to vote in favor of a proposed sale to Marathon Petroleum. We told you two weeks ago that John Fox, former CEO of MarkWest Energy, came out strongly against the deal (see Former MarkWest Energy CEO Urges Vote Against Marathon Buyout). Since that time Marathon has increased the amount of cash they’re willing to offer–twice–from an original $675 million to now $1.28 billion (see Marathon Ups Cash Offer for MarkWest 2nd Time – Deal in Trouble?). The original deal was worth around $20 billion when you include unit swaps and other considerations. Now the deal is worth around $15 billion due to unit prices plunging over the past few months. Two days ago MarkWest promoted the news that Institutional Shareholder Services (ISS), an “independent” proxy advisory firm, was recommending unitholders vote in favor of the deal. Yesterday John Fox issued his own rebuttal to ISS and continues to say this is “fundamentally a bad deal” and that ISS’ own report supports his arguments against the deal. It’s getting hot in the kitchen!…
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