Research

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    EIA Oct ’18 Drilling Report: Shale Gas Output Up Another 1 Bcf/d

    The hits keep rollin’ in. Last month the U.S. Energy Information Administration’s (EIA) monthly “Drilling Productivity Report” (DPR) estimated that this month (in October) the country’s seven major shale plays would produce an amazing, all-time high of 73 billion cubic feet per day (Bcf/d) of natural gas production (see EIA Sep ’18 Drilling Report: Shale Output Flies Past 73 Bcf/d). EIA issued the October DPR yesterday (with numbers for November) and once again, production is going up. EIA estimates November production will hit 74 Bcf/d–another record-breaker.
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    EPA Public Mtg Examines Disposing O&G Wastewater in Lakes, Rivers

    In May the U.S. Environmental Protection Agency (EPA) launched a study looking 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. Earlier this week the EPA held a public meeting to discuss preliminary findings and to elicit more input from the industry and from Big Green on their study, which is called “Study of Oil and Gas Extraction Wastewater Management” (due to be released early next year). Below is an update on the meeting with a slide deck used by EPA.
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    How to Turn PA’s $60B Shale Energy Future into Reality Today

    One year ago Chevron Appalachia and People’s Natural Gas teamed up to release a study called “Forge the Future: Pennsylvania’s Path To An Advanced, Energy-Enabled Economy” (see Chevron & People’s Natural Gas Team Up to Map Out PA’s $60B Future). Rather than wait around for “someone else” to flesh out a plan to leverage what Chevron and People’s call a $60 billion (!) opportunity in PA, they went ahead and did it themselves. Smart people. That was Phase I. Others have joined the effort which has morphed into a loose organization called PA Forge The Future. The group has just launched Phase II, a new study called “Ideas for Action: Actionable Initiatives to Accelerate Energy-Enabled Economic Development in Pennsylvania” (full copy below).
    Read More “How to Turn PA’s $60B Shale Energy Future into Reality Today”

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    By the Numbers – Revenue & Profitability for M-U Drillers

    The expert analysts at RBN Energy have just published their “fourth and final” in a series of posts looking in detail at E&Ps (exploration & production companies, or “drillers”). One of the groups of E&Ps they examine are “gas-weighted” E&Ps–or drillers who mostly extract natural gas. In looking through the list, you immediately realize every one of them has operations in the Marcellus and/or Utica Shale region. Yes, a few also have operations in other plays, but they all have at least some operations here. The real value in the article is an accompanying spreadsheet comparing various financial metrics (apples to apples)–things like total revenue, lifting costs, production costs, and “pre-tax income,” meaning profitability. How do our drillers compare with each other?
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    Petrochemicals & Shale – Joined at the Hip (IEA Report)

    On numerous occasions we’ve pointed out the lunacy of the “keep it in the ground” gang–those who believe we should end the use of all fossil fuels as soon as possible. Why can’t we do it? For many reasons. Here’s just one: petrochemicals. Did you know that all sorts of products you use every day–things like plastics, fertilizers, packaging, clothing, digital devices, medical equipment, detergents and tires–come from oil and gas? Without oil and gas, we’d quickly descend back into the Stone Age, living short, brutish lives. That point was driven home in a new report titled “The Future of Petrochemicals” (full copy below), part of an International Energy Agency (IEA) series that shines a light on “blind spots” in the global energy system.
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    NGSA Winter Forecast: High Demand + High Production = Flat Prices

    The Natural Gas Supply Association (NGSA) yesterday released its 2018-2019 Winter Outlook for Natural Gas report (summary below). NGSA says this winter will have warmer than normal temperatures for much of the country. They also predict natural gas demand will reach an all-time high. However, natural gas production will hit all-time highs too. So in the end, prices for natgas (a function of supply and demand) will stay fairly even.
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    “Cracker Effect” – Shell Plant Will Create 7,400 Permanent Jobs

    Ever hear of the “cracker effect”? No, we hadn’t either. Not until we read about a new study by a husband and wife team from Washington & Jefferson College. The pair studied the economic impact of cracker plants on surrounding communities–some 34 ethane crackers in 16 counties around the country. Most of the cracker plants are located along the Gulf Coast. The purpose of the study is to accurately forecast what will happen with Shell’s new $6 billion ethane cracker currently under construction in Beaver County, near Pittsburgh. What might the real, measurable economic effect be from Shell’s cracker? According to the authors, the Shell cracker will generate ~7,400 permanent, long-term jobs. Crackers not only create new jobs, they boost wages in cracker counties by nearly 13% over counties without crackers. But counties without a cracker plant benefit too. Counties bordering counties with a cracker plant see lower unemployment rates. No mystery there. While the authors alluded to some negatives from crackers, we were hard-pressed to find any! It sure looks like everything is coming up roses with the Shell cracker. The numbers prove it…
    Read More ““Cracker Effect” – Shell Plant Will Create 7,400 Permanent Jobs”

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    WV Consumers Saved $4B Over 10 Years Thx to M-U Shale

    Although the push is on to get Marcellus/Utica molecules to new markets where they can fetch higher prices, there is a group who has benefited in a major way from an abundance of cheap, clean-burning shale gas. That would be the residents and businesses located in West Virginia. Industry group Consumer Energy Alliance (CEA) has just published a new report that reveals WV residents and businesses have saved a cumulative $4 billion from 2006-2016 as a result of the decreasing price of natural gas in the state. You may recall not long ago CEA published a similar study for Pennsylvania (see PA Consumers Save $30B Over 10 Years Thx to Marcellus Shale). Yes, PA’s numbers were much bigger than WV’s, but PA has more population (12.8 million in PA vs. 1.8 million in WV), therefore more chances for savings. And PA has more natgas in the ground than WV. But still, $4 billion in savings is nothing to sneeze at! That’s $4 billion in money in people’s pockets that didn’t come from other people’s pockets (via taxes) and got spent on goods and services with a beneficial ripple effect throughout the economy. Here’s the CEA report on the great news that West Virginian’s hit the $4 billion lottery in shale…
    Read More “WV Consumers Saved $4B Over 10 Years Thx to M-U Shale”

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    Dartmouth: How Water & Shale Combine to Produce Radioactive Waste

    A pair of newly published research papers from Dartmouth College may shed new light on radioactivity in shale waste water. We previously highlighted research from Dartmouth in 2015 and again in 2016 dealing with Marcellus Shale and water (see Dartmouth Study: Fracking Causes Toxic Metal Wastewater and Dartmouth Study Finds Barium Leaches Directly from Marcellus Shale). We said at the time, “…we don’t detect an agenda on the part of the researchers. This appears to us to be legitimate research that helps us better understand the chemical reactions happening a mile or more below the ground when we shoot water down there.” And so we continue to feel about these latest Dartmouth studies. Reportedly for the first time we now understand how “slick water” (water and chemicals used during fracking) can combine with shale rock, transferring some of the naturally occurring radiation from the rock to the water. That is, we better understand the science of it. Which means we can develop better ways to handle and treat water that may have low levels of radioactivity…
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    EIA Sep ’18 Drilling Report: Shale Output Flies Past 73 Bcf/d

    Each month when we bring you the latest U.S. Energy Information Administration (EIA) “Drilling Productivity Report” (DPR) we say the same thing: “We shattered another record.” And so it is again this month, with the DPR issued yesterday. 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. The Marcellus/Utica region (called Appalachia in the report) continues to see production go through the roof. For six months in a row Marcellus/Utica production grew at roughly one-third of a billion cubic feet–massive! EIA says in the coming month of October, M-U production will grow another 298 million cubic feet per day (MMcf/d). Hey, it’s not a full one-third Bcf, but it’s close enough. The big news is that (a) M-U production will hit another new all-time high–of 29.4 Bcf/d of production; and (b) natural gas production for all seven plays will hit another new all-time high–of 73 Bcf/d. Run the numbers and you’ll see that M-U production is 40% of all shale gas production. Let’s not ignore shale oil production, which will go up another 79,000 barrels per day in the coming month across all shale plays to a record-breaking 7.6 million barrels per day. Month after month after month we keep breaking records…
    Read More “EIA Sep ’18 Drilling Report: Shale Output Flies Past 73 Bcf/d”

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    NETL Picks 2nd Morgantown Site for Additional Fracking Research

    MSEEL test site in the Morgantown Industrial Park – click for larger version

    Important research on fracking by West Virginia University (WVU) and the National Energy Technology Laboratory (NETL) in Morgantown, WV continues. Last year we told you that NETL and its Marcellus Shale Engineering and Environmental Laboratory (MSEEL) program are working on “mastering the subsurface”–learning what happens at the smallest level of fracturing shale, so they can improve recovery rates using new processes and materials (see NETL Morgantown Working on Breakthrough Shale Production Techniques). In addition to improving recovery, they’re also looking for ways to cut down on water use. Since there’s a fair bit of water already trapped in shale, NETL is experimenting with carbon dioxide foam as a way of using less water. They’ve even experimented with using natural gas itself to frack rock. Great work being done by NETL/MSEEL. So far that work has happened at one live, fracked shale gas well near Morgantown, drilled by Northeast Natural Energy. Now comes word that researchers are setting up a second test site, also in the Morgantown vicinity (Blacksville). As before, the aim “is geared toward improving gas recovery from horizontal drilling and hydraulic fracturing at sites throughout the region”…
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    The MDN Guide to PA DEP 2017 Annual Oil & Gas Report

    The Pennsylvania Department of Environmental Protection (DEP) recently published its 2017 Oil and Gas Annual Report. This is the second year in a row the DEP has published the report in an interactive, electronic (i.e.online) format ONLY, with a stated purpose “to improve public access to well information.” While it’s interesting to have the report issued online only, it’s not as useful as a PDF or printed document, in our humble opinion. What does the report show? There were 2,028 unconventional well drilling permits issued in 2017, up an astonishing 707 (54%) from 2016. What a turnaround! There were 203 conventional well drilling permits issued in 2017, up 45 (28%) from 2016. The number of well inspections hit an all-time high of 36,288 inspections (up 2% from 2016). Below we have the DEP announcement about the new 2017 report, along with select charts & information–so you don’t have to wade through the (somewhat confusing) report yourself. We call it the MDN Guide to PA’s 2017 Oil and Gas Annual Report…
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    3 Counties, 5 Drillers Led OH’s 50% Increase in 2Q Gas Production

    The Pareto Principle is alive and well in the Buckeye State. You may know it as the 80/20 rule, or in this case, the 75/25 rule. The rule that states roughly 80% of the results come from 20% of the effort. Last week MDN brought you the latest update from the Ohio Dept. of Natural Resources–their second quarter 2018 report showing all production coming from the Ohio Utica Shale (see Top 25 Producing Gas & Oil Wells in Ohio Utica for 2Q18). While MDN provided you with Top 25 lists showing the best-performing wells (both gas and oil) during 2Q, and while we provided you with a better spreadsheet to view the information than that provided by the ODNR itself, our analysis was basic and high level. Utica natgas production was up a big 42% over the same period last year, and Utica oil production was up 11%–a cumulative 50% increase when you convert it all into equivalents. The experts at S&P Global Platts have done a deep dive into the numbers and have found that three counties represent 75% of all production in 2Q18, and five drillers represent 75% of all production in 2Q18. Which counties and which drillers? Read on…
    Read More “3 Counties, 5 Drillers Led OH’s 50% Increase in 2Q Gas Production”

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    PA Consumers Save $30B Over 10 Years Thx to Marcellus Shale

    Although the push is on to get Marcellus molecules to new markets where they can fetch higher prices, there is one group who has benefited in a major way from an overabundance of cheap, clean-burning Marcellus Shale gas. That would be the residents and businesses located in the great state of Pennsylvania. Industry group Consumer Energy Alliance has just published a new report that reveals PA residents and businesses have saved a cumulative $30.5 billion from 2006-2016 as a result of the decreasing price of natural gas in the state. Can you imagine the economic impact! What president or governor or state legislator wouldn’t salivate over a cash infusion of $30 billion over ten years! It’s mind-blowing. And it’s all thanks to the Marcellus Shale. And that $30B is just the savings that went into folks’ pockets (and got spent on other things). That number doesn’t even take into consider the billions upon billions of dollars paid out in signing bonuses, royalties, and drilling work done. The Marcellus industry has single-handedly lifted many PA residents out of poverty. Hey, how much revenue and how many jobs and how much energy savings have groups like Delaware Riverkeeper, Sierra Club, Clean Air Council, Food & Water Watch, PennEnvironment, PennFuture and other radical Big Green groups generated for PA? What’s that? They’ve actually COST the state money? Think about that the next time you read about these so-called environmental groups and how much they “care” about the Keystone State…
    Read More “PA Consumers Save $30B Over 10 Years Thx to Marcellus Shale”

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    PA Natural Gas Production Hits Another All-Time High in 2Q18

    Last Thursday the PA Independent Fiscal Office (IFO) released their latest quarterly Natural Gas Production Report for Apr-Jun 2018 (full copy below). It shows natgas production rose 9.9% compared to the same period last year–same as the increase in 1Q18 (see PA Natural Gas Production Hits New All-Time High in 1Q18). The report also shows the number of producing wells is up 10.4% from last year. Total natural gas production volume was 1,455.8 billion cubic feet (Bcf), and the number of producing wells in 2Q18 was 8,672 (of which 8,194 were shale wells). The biggest news is that once again 2Q18 saw the highest quarterly production of natural gas in the state–ever. This is the seventh quarter in a row there has been an increase in production. Two-thirds of the state’s natural gas production consistently comes from four counties: Susquehanna, Washington, Bradford and Greene. The #1 county for natgas production in 2Q18 was, as it was in each quarter of 2017 and in 1Q18, Susquehanna County, in the northeastern corner of the state. The #1 producing driller in Susquehanna County is Cabot Oil & Gas. Here’s the full 2Q18 natural gas production report from the IFO…
    Read More “PA Natural Gas Production Hits Another All-Time High in 2Q18”

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    List of 16 Major Pipeline Projects Planned for the Northeast

    Did you know there are 16 major, announced pipeline projects in the northeast?! We recently happened across a handy list of those projects, a list published by the Northeast Gas Association less than a month ago. The list includes a description of what will get built, who’s doing the building, and the target in-service date. A few of the projects are in limbo (Constitution, Access Northeast), but most are either under construction or soon will be. We dig this kind of list–well laid-out, concise, and useful. And we think you will too. Here’s the name of the pipelines in the list: Access Northeast, Atlantic Bridge, Atlantic Sunrise, Constitution, Eastern System Upgrade, Empire North Expansion, Northeast Gateway, Northeast Supply Enhancement, Northern Access, PennEast, Portland XPress, Rivervale South to Market, Station 261, Wright Interconnect, Valley Lateral Project. Click to view the list, with full details…
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