Upstream PA Conference: Marcellus Shale Changed the Game

Dr. Terry Engelder – closing presenter

Last week MDN editor Jim Willis had the pleasure of presenting at Shale DirectoriesPA Upstream 2018 event with the theme: “The New Upstream: 10 Years Later.” There were a number of great presentations–from people like David Spigelmyer, president of the Marcellus Shale Coalition, Jude Clemente, analyst and author who frequently writes for the Forbes magazine website, and Pennsylvania House Speaker Mike Turzai. One quick story and some shameless name-dropping. Jim is always jazzed to meet people who read his stuff. Writing is a lonely affair, so getting to industry events every now and again is a great chance to connect with readers. In the hallway ahead of Speaker Turzai taking the stage, Jim was introduced to him (for the first time). When Speaker Turzai heard what Jim does–writing Marcellus Drilling News–he said: “Oh yeah, I read your stuff all the time!” Which put a big smile on Jim’s face. Jim also connected with long-time friend George Stark from Cabot Oil & Gas; another long-time friend, Rick Stouffer, from the always excellent Kallanish Energy, and with Dr. Terry Engelder, the “father of the Marcellus.” Dr. Engelder is now retired from PennState and keeps himself busy writing and speaking. What a treat to meet Dr. Engelder for the first time, after hearing of and writing about him for years! At any rate, as you can imagine, when you give a presentation, your mind is not totally engaged with the presentations you’re hearing. You’re thinking about the presentation you’re about to give! Fortunately, another MDN friend, Nicole Jacobs (from Energy in Depth), was at the event and recorded the highlights…
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PJM to Study Electric Grid “Fuel Security” of Relying on NatGas

The trend is undeniable that coal powered electric generating plants are closing, and in their place, natural gas-fired plants are being built. In fact, natgas is also bumping off old nuclear plants, which presents a delicious dilemma for enviro freaks who have traditionally hated nukes for their waste that lasts a thousands years, yet because the electricity they produce is “carbon free” they now support nukes. Grid resiliency is the watchword. If the electric grid depends too much on a single source, can the entire grid become threatened should that source dramatically increase in price, or worse yet, dry up? What’s the likelihood of that happening? That’s what PJM, the largest regional transmission organization (RTO) in the U.S. (that oversees the electric grid in the Mid-Atlantic and Midwest) will study in the coming months. In other words, if coal plants, and nuclear plants, continue to shut down as they have been, and we’re left with mainly natural gas-fired plants in their place (as well as renewables and other sources like hydro), is that a “threat” to the entire grid?…
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LNG Exports to Add $1-$2 Trillion to U.S. Economy by 2050

Here are some numbers that are, frankly, hard for us to wrap our heads around. LNG Allies, a nonprofit trade group, recently issued a study they conducted showing that LNG exporters will add between $716 billion and $1.267 trillion in cumulative “direct, indirect, or induced value added” to the U.S. economy by 2050. Yes, trillion, with a “t”. During the same period of time, the study says value added to the economy from supplying the natural gas to those LNG plants (that is, all of the drilling and fracking), will be worth $948 billion to nearly (gasp) $2 trillion! No wonder President Trump is pushing hard to get more LNG export plants online. Here’s a quick overview, followed by a copy of the study/slide deck…
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EIA May ’18 Drilling Report: M-U Gas & Permian Oil on Fire

Perhaps our headline uses a poor choice of words, but that’s what immediately comes to mind in describing the enormous amount of gas (and oil) production coming from America’s shale plays–in particular the Marcellus/Utica (for gas) and the Permian (for oil). Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. We sound like a broken record, but the numbers continue to be mind-blowing–hitting new all-time, breath-taking highs each month. This month is no exception. Last month the EIA predicated natural gas output from the seven major shale plays would go up another 1+ billion cubic feet per day (see EIA Apr ’18 Drilling Report: M-U Production Through the Roof). Once again this month EIA says collective gas production in the seven plays will go another 1 Bcf/d! A full one-third of that increase–373 million cubic feet per day (MMcf/d)–will come from the Marcellus/Utica region. The second highest jump will come from the Texas Permian oil play with 225 MMcf/d of gas production, because gas comes out along with oil and drillers are sinking holes like crazy in the Permian. Here’s the latest mind-blowing news about American oil and gas shale production…
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Univ of Cincinnati Utica Groundwater Study Finally Published!

From January 2012 to February 2015, researchers from the University of Cincinnati collected 180 groundwater samples in Eastern Ohio, from water wells located close to Utica Shale drilling activity. In early 2016, the lead researcher shared some high level results from the study. The preliminary results showed that fracking in areas where there are water wells doesn’t affect those wells (see Antis Not Happy with Results of OH Fracking Study They Funded). Two anti-drilling groups were the primary funders of the study–Deer Creek Foundation in St. Louis and the Alice Weston foundation from Cincinnati. The two groups immediately cut their funding when they heard results they believe they didn’t pay for (see Anti Groups Abruptly Cut Funding for OH Fracking Study). Since that time, no more of the study’s results have been released, for over two years! That is, until now. The full peer-reviewed study, titled “Monitoring concentration and isotopic composition of methane in groundwater in the Utica Shale hydraulic fracturing region of Ohio,” was published last week in the scientific journal Environmental Monitoring and Assessment. Summing up the results of the full study in the words of the researchers themselves: “We found no relationship between CH4 [methane] concentration or source in groundwater and proximity to active gas well sites.” And, “…our data do not indicate any intrusion of high conductivity fracking fluids as the number of fracking wells increased in the region.” Finally! An honest study using Big Green money, that Big Green tried to cover up and silence, is now available for the whole world to see…
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EPA Launches Study to Dispose Frack Wastewater in Lakes, Rivers

The U.S. Environmental Protection Agency (EPA) last week announced it has launched a study into the possibility of treating oil and gas wastewater and (gasp) releasing the cleaned-up wastewater into lakes and rivers, instead of injecting it back down holes in the ground. The EPA is seeking “input” from everyone–the industry and Big Green–to help guide their research efforts. The truth is wastewater from oil and gas wells is far less toxic than the stuff leaching out of landfills and the waste from chemical plants. But you never hear that said out loud by Big Green supporters. We’ve personally spoken with people at several companies that recycle and clean shale wastewater who say such cleanup is easy compared to cleaning up other types of wastewater. Why shouldn’t the EPA look to at least study it–and perhaps even encourage it?…
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M-U Region Adding 43% of All New Gas-Fired Electric in 2018

Yesterday the U.S. Energy Information Administration (EIA) issued a report saying it predicts 32 gigawatts (GW) of new electric generating capacity to come online this year, in 2018. Of that 32 GW, 21 GW (or 66%) will come from new natural gas-fired plants. And of that 21 GW of new gas-fired generation, Pennsylvania alone will generate 5.2 GW, and Maryland and Virginia will each generate 1.9 GW. Put another way, 9 GW out of 21 GW (or 43%) of all new demand for natural gas for power plants is happening right here in the Marcellus/Utica region. As we have observed on many occasions, power generation is a very important source of new demand for abundant and cheap Marcellus/Utica gas…
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Study: The Closer People Live to Fracking, the More They Like It!

You might think people who are not leased and live close to shale drilling activity, that is, those with the most “impacts” from that activity, would be the ones most opposed to it. However, you would be wrong. That’s according to a new study just published by the ultra liberal Oregon State University. A study appearing in monthly peer reviewed academic journal Risk Analysis titled, “The Effect of Geographic Proximity to Unconventional Oil and Gas Development on Public Support for Hydraulic Fracturing,” finds that the closer you live to shale drilling, even those who are not leased, the more supportive of it they are. Why is that? Because they understand it–they’re more familiar with it. MDN has spoken to residents in Susquehanna County, PA who live close to drilling yet are not, themselves, drilled on/under. Their opinion? Sure they’d like it if they got money. After all, they incur the impacts (trucks, noise, lights, dust), but don’t directly benefit with money in their pockets. Yet, when asked if they had a choice and could wave a magic wand so there never would have been drilling, the answer is swift and universal: NO! They still prefer nearby drilling, because it benefits their neighbors and, to some degree, the community at large via tax revenue and charitable contributions. Here’s news of a study that proves the closer you are to drilling, the more you like it…
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EIA: PA’s Natural Gas Production Hits New Highs Each Year

Our favorite government agency, the U.S. Energy Information Administration, yesterday took a close look at natural gas production in Pennsylvania and how it has grown. A few interesting factoids: PA averaged a record high 15 billion cubic feet per day (Bcf/d) of natural gas production in 2017–3% higher than 2016. Most of PA’s natural gas production comes from the Marcellus Shale. PA production accounted for 19% of total U.S. marketed natural gas production in 2017. PA produces more natural gas than any other state except Texas. Several key pipelines have helped move some of PA’s enormous production to other markets. Here’s the insightful look at PA natgas production from expert number crunchers at EIA…
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US NatGas Production Will Grow 59% by 2050 Thx to M-U

In February our favorite government agency, the U.S. Energy Information Administration, issued its Annual Energy Outlook 2018 report (full copy below). This week the eager beavers at EIA culled through that report to highlight important information about U.S. natural gas production. In a Today in Energy post on Monday, the EIA made some startling observations. EIA predicts that U.S. natural gas production will grow 59% from 2017 to 2050, starting at 73.6 billion cubic feet per day (Bcf/d) in 2017 and reaching 118 Bcf/d in 2050. Massive! They also say that most of the projected production growth comes from the Marcellus/Utica region. However, as MDN has pointed out repeatedly in recent months, “associated natural gas” from the Permian region in Texas and New Mexico will also be a significant contributor to overall natgas production growth in the coming 30 years. Here are some intriguing insights into predictions made by some of the best number crunchers in the business…
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EIA Apr ’18 Drilling Report: M-U Production Through the Roof

Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. We sound like a broken record, but the numbers continue to be mind-blowing–hitting new all-time, breath-taking highs each month. This month is no exception. Example: EIA predicts that in the next 30 days natural gas output from the U.S.’s seven major shale plays will go up another 1+ billion cubic feet per day (Bcf/d)! Let’s put that in perspective. Germany and France together use 10 Bcf/d of natural gas. In less than a year, the U.S. could completely meet the natural gas needs of both Germany and France–using only our increases in production! Just as mind-blowing: Last month production in the Marcellus/Utica (called Appalachia in the report) went up 359 million cubic feet per day (MMcf/d)–more than 1/3 of a Bcf. This month? EIA says our production will grow ANOTHER 386 MMcf/d! It’s staggering the amount of natural gas our region produces. Not to be left out, the Permian Basin, long known as an oil play, is now actively competing with the Marcellus/Utica. Permian gas production is set to grow another 222 MMcf/d this month. Here’s the latest…
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PA DEP Report – Virtually No Methane Migration from Shale Wells

The Pennsylvania Dept. of Environmental Protection (DEP) released the results of it’s industry-leading program to monitor oil and gas wells for methane (and oil and brine) migration–that is, for anything would impact groundwater. The Mechanical Integrity Assessment Program, as it’s called, is “the most rigorous routine well integrity assessment program to protect groundwater in the United States,” requiring quarterly inspections by operators of their wells. The DEP is in the process of releasing the results of those reports for the past four years–from 2014-2017. They’ve just released results for 2014 (full copy below). What did the DEP find? “[L]ess than 1 percent of operator observations indicated the types of integrity problems, such as gas outside surface casing, that could allow gas to move beyond the well footprint.” In other words, there is virtually no methane migration happening from shale (and conventional) natural gas wells because of good well casings and regular checks. It is hard to overstate how important these findings are. The DEP’s own evidence disproves wild claims that methane is migrating from shale wells everywhere, claims made by anti-fossil fuel radicals and a colluding media (see examples from StateImpact Pennsylvania). Below is the good news that there is virtually no methane migration happening in PA from Marcellus Shale wells…
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EDF Launching $40M Satellite to Lie About O&G Methane Emissions

If the American Petroleum Institute (API) were to launch a satellite into space to monitor so-called fugitive methane emissions from oil and gas sites on the ground, would you believe the data they report coming from the satellite? We would, because the API is professional and doesn’t lie. But let’s face it, most people would see a clear conflict of interest. It would be better if a government agency, or perhaps a consortium of universities, were to launch such a research project. On the other hand, the Environmental Defense Fund, a far-left, profoundly biased and anti-fossil fuel organization is proposing to do just that–launch a $40 million satellite that supposedly will monitor methane emissions from oil and gas sites–specifically sites in Pennsylvania. Does anyone really believe that if this happens, the data the EDF will report will be objective? No, NOBODY believes such a thing. But it will give colluding/lying mainstream media an opportunity to continue their false narrative that methane is leaking everywhere causing Mom Earth to catastrophically heat up…
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Report: The State of Natural Gas in Pennsylvania

The Commonwealth Foundation is Pennsylvania’s premier free-market think tank. The aim of the Foundation is to “transform free-market ideas into public policies so all Pennsylvanians can flourish.” We’ve highlighted their excellent work over the years. They’ve just done it again. The Commonwealth Foundation has just published a report called “The State of Natural Gas in Pennsylvania” (full copy below). The opening begins this way: “Pennsylvania’s regulatory and tax environment is stunting job growth and deterring investment. A decade after the Marcellus Shale boom, lawmakers are still debating how to tax the industry instead of fixing the policies contributing to Pennsylvania’s increasingly uncompetitive energy market.” At the end of the report the Foundation shows a severance tax comparison of existing severance taxes in other states that PA competes against, like Ohio, West Virginia, Texas, Colorado, and Oklahoma. The chart shows that the existing impact fee (in essence a severance tax) runs around 1.1%. The severance tax in Ohio is running around 0.7%, and in West Virginia 3.5%. In places like Texas, which increasingly competes against PA with prodigious quantities of natural gas production, the severance tax is 4.2%. However, Gov. Wolf’s proposed severance tax would be 5%–the highest in the nation except for New Mexico’s 7.9% (which doesn’t compete with PA). The report shows how PA is restricting Marcellus activity with over-regulation and a high corporate income tax…
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Yale Study Claims Ohio Utica Fracking Causes STDs

What a shame that a university with one of the best reputations in the world, Yale, has sunk this low–to pedal yet another so-called study that claims where there is fracking in the Ohio Utica, there’s also a higher incidence of sexually transmitted diseases (STDs) like gonorrhea and chlamydia. This isn’t the first “fracking causes STDs” study. Antis have issued these “studies” for years (see MDN coverage here). This latest study by Yale “researchers” was published in an online journal with no standards, PLOS ONE. Other bought-and-paid-for anti-fracking “science” has been published by the PLOS ONE research-mill (see a list of other fake studies bashing shale appearing in PLOS ONE). PLOS ONE is a favorite place to publish research that can’t meet the rigorous review process of real journals. Here’s the latest substandard anti-drilling “research” from the Yale School of Public Health…
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IFO Report: Proposed Wolf Severance Tax Hits PA Landowners Hard

One of the lies told by Pennsylvania Gov. Tom Wolf in attempting to sell a Marcellus-killing severance tax to the general population is that most of the tax would fall on businesses and corporations outside of PA. The rallying cry has always been that PA landowners would not bear any of the severance tax–as in deductions from royalties paid. That lie was exposed by none other than the PA Independent Fiscal Office last week when the IFO released a report that calculates of the estimated $210 million in severance taxes that would be raised, per year, by the latest Wolf proposal–some $28 million of it (over 13%) would come out of the pockets of landowners–IN THE FIRST YEAR. By the third year, that number rockets to $51 million (or 24%). That is, a meaningfully large portion of the proposed severance tax WILL get passed on to landowners as deductions from their royalties. Lesson for landowners: Don’t fall for the siren song from Wolf and RINOs who say “If you support the severance tax (it won’t affect you), we’ll get you your minimum royalty bill.” It’s a farce…
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