MDN Guide to the PA DEP 2016 Annual Oil & Gas Report
The Pennsylvania Department of Environmental Protection (DEP) yesterday published its 2016 Oil and Gas Annual Report. This year 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.” This is the first time the report has been published electronically. 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. DEP Acting Secretary Pat McDonnell said, “Pennsylvania is the second-largest producer of natural gas in the country and one of the most transparent states in making oil and gas data publicly accessible. Making the Annual Report completely digital is just the next step in our continued effort to share as much information as possible.” We’ll give the DEP an “A” for effort, but a “C” for execution. What does the report show? The number of unconventional (shale) well drilling permits issued in 2016 decreased 59% since 2014. The total number of conventional well drilling permits issued in 2016 decreased 87% since 2014. It is a dramatic drop. There were 1,321 unconventional well drilling permits issued in 2016, and 158 conventional well drilling permits issued in 2016. Even though the number of permits to drill new wells dropped from 2015 to 2016, the number of well inspections hit an all-time high in 2016–some 35,556 inspections. The boys and girls at the DEP have been busy beavers. Below we have the DEP announcement about the new report and its format, 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 2016 Oil and Gas Annual Report…
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A couple of weeks ago the American Petroleum Institute (API) released a new study that shows private investment in U.S. natural gas and oil infrastructure could (and likely will) create over 1 million new U.S. jobs. That is an incredible number! The study also shows that private investment may exceed $1.3 trillion for new oil and natural gas infrastructure. Wow! Over the past five years, U.S. oil and gas infrastructure development proceeded at a rapid pace. Many have wondered whether the trend can continue. API wondered too, so they contracted the experts at ICF to undertake a study that investigates the amount of oil and gas infrastructure development possible in the U.S. through 2035. The result is the report, “U.S. Oil and Gas Infrastructure Investment Through 2035” (full copy below). The report focuses on the amount of infrastructure needed for two different scenarios, a Base Case and a High Case, each of which are plausible scenarios for future market conditions. While the Base Case represents a most likely scenario, the High Case is included to assess infrastructure development in a more robust environment that is fostered by a larger hydrocarbon resource base and more rapid advancements in technology. The study looks at capital expenditures associated with, and the resulting economic consequences of, oil and gas infrastructure development… 
On Monday, MDN’s 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. Get ready to break new records–again! In June, we will once again hit the highest output of shale gas we’ve seen, ever. Output in the Marcellus/Utica region is set to once again reach new highs. In the Marcellus, output will pass 19 billion cubic feet per day (Bcf/d). Astonishing! In the Utica, output will hit 4.4 Bcf/d. Shale oil output across all seven major plays is set to hit 5.4 million barrels per day, up 122,000 barrels in just one month. Perhaps the biggest eye opener is that the shale play with the biggest uptick in natural gas production will be–the Permian. An oil play! When you drill like crazy for more oil, you also get natural gas out of the hole along with the oil. It’s called “associated gas.” And because the Permian (in Texas) is red hot with drilling, it makes sense natural gas production will spike up too. Buckle up and get ready for another wild ride in the month of June…
To say that how electricity in the Northeast gets generated has shifted dramatically over the past 10 years is an understatement. In the nine Northeast states, natural gas doubled its share of the region’s total generation to 41% in 2016, up from 23% in 2006. Coal-fired generation fell from 31% to 11% of generation over the same period. Nuclear-powered generation as a share of total generation remained relatively constant near 34%. And so-called renewables like wind and solar are almost undetectable as a percentage of electricity generation. Which means Andrew Cuomo’s insistence that New York get 50% of its electricity from “renewable” sources by 2030 is not only fantasy–it’s lunacy. The man is a crackpot if he thinks that will actually happen. Anyhow, the point of this post, which contains an article recently released by our favorite government agency, the Energy Information Administration, is that over the past 10 years, natural gas has essentially replaced coal in electric generation in the Northeast… 
Moody’s Investors Service issued a report earlier this week saying an abundance of cheap, clean-burning Marcellus Shale gas threatens to “wreak havoc” in the electric generation market in the PJM area, which covers all or parts of DE, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA, WV, and Washington, DC. According to Moody’s researchers, a large influx of natural gas power plants entering PJM Interconnection, due to cheap gas supplies from the Marcellus Shale, will pose “severe challenges for generators operating in the region” in the next few years. Because of the Marcellus “glut,” new plants coming online will drive down power prices, which “could lead” to widespread closures of coal power plants, and pressure operating margins for all generators, including other gas-fired plants. The prediction is that a low-price Armageddon will result in widespread corporate casualties. What can be done to avoid this hideous future? Nothing. The only thing power plant operators can do is cut their debt load, which they are doing. In other words, good old American competition (coming from Marcellus Shale gas) is making the PJM electric industry get leaner and more efficient. Imagine that… 
Hold that decline curve! Researchers at Los Alamos National Laboratory have done “extensive data mining” and analysis of 20,000 shale gas wells. In a paper published in the journal Applied Energy titled “The shale gas revolution: Barriers, sustainability, and emerging opportunities” (full copy below), Los Alamos researchers say that refracking existing wells with new technology can transform those wells from “diminished producers” (so/so wells) into “high-performers” long after the wells had supposedly hit peak production. “We hypothesize that manipulating tail production could re-revolutionize shale gas extraction,” said lead author of the study, Richard Middleton. Refracking eliminates the cost of drilling a new bore hole, and provides a smaller environmental footprint. What’s not to love! Let’s get refracking… 
The federal Environmental Protection Agency (EPA), under the Obama/McCarthy reign of terror, far overstepped its charter by seizing power that doesn’t belong to it. Last May the EPA issued new methane rules in a back-door way to try and regulate the oil and gas industry (see 
Every now and again a gift lands in our lap, unexpectedly. Such is the case today. A third year law student at the University of Buffalo School of Law, Kelsey Hanson, has researched and written a masterful paper on the potential for LPG (liquefied propane) fracking in, yes, New York State. The paper, titled “Hey New York, You Can Frack: An Examination of How Liquefied Petroleum Gas Sidesteps New York’s Fracking Ban to Provide a Legal and Practical Approach for Horizontal Drilling in New York’s Marcellus Shale” (full copy below) has just been published in the Buffalo Law Review (how did that happen?!). In the paper, Hanson first gives a background of traditional fracking, then zeros in and explores LPG fracking–its benefits and its pitfalls. She concludes that the NY Dept. of Environmental Conservation (DEC) has left the door open, legally, for shale LPG fracking in the Empire State. She also gives us a much-needed update on the question MDN gets asked frequently: Whatever happened to LPG fracking in Tioga County, NY? The article is eminently readable, full of great information, and worth your time…
More fake “research” is on the way courtesy of the anti-drilling Southwest Pennsylvania Environmental Health Project. The Project is launching a so-called public health registry. Log in to the website and if you live within five miles of a drilling site, you can report your latest headache in an attempt to link it to (and smear) shale development. Yep, just blame everything on drilling. Got allergies? Blame drilling. Headache? Blame drilling. Earache? Blame drilling. Er, a “performance issues?” Blame drilling. (Maybe they’ll give you some free Viagra.) That’s the purpose of this latest sham initiative by the same group that has brought us such glittering examples of “research” as “The List of the Harmed”…
Last year the U.S. Chamber of Commerce, via their Institute for 21st Century Energy intiative, launched a “What If…?” series to counter the radical “keep it in the ground” movement–a movement that irrationally hates the use of fossil fuels. In August 2016, the Chamber released their first such report, titled “What If…Energy Production was Banned on Federal Lands and Waters?” (see 
Earth Day is the day Big Green has a collective orgasm over Mom Earth and their efforts to keep her clean. We have no issue with responsible stewardship of our natural resources and keeping the environment clean. Everyone (with a brain) aspires to that. We do have a problem with worshiping the creation instead of the Creator. Worshiping the earth is what Earth Day is all about. Each year it gets more nutty than the last. It was with some glee we noticed that our friends at Energy in Depth have done their own bit for Earth Day–by compiling a list of scientific studies that prove fracking has been good for cleaning up the environment. It’s true! We’re not joking. Because of fracking, and because of the growing use of natural gas, our air is cleaner. Fracking and horizontal drilling has resulted in fewer drilling locations dotting the landscape–prettier to look at, and healthier for the environment. There’s a fair amount of fake science floating around out there, funded by anti-drilling organizations. EID has compiled a list of real science studies. Have a look…
Researchers from the Department of Ecosystem Science and Management at Penn State have just published a new study/paper in the Journal of Environmental Management titled, “Linear infrastructure drives habitat conversion and forest fragmentation associated with Marcellus shale gas development in a forested landscape” (abstract below). Their thesis: “Fragmentation of ecologically important core forests within the northern Appalachians — driven by pipeline and access road construction — is the major threat posed by shale-gas development, according to researchers, who recommend a change in infrastructure-siting policies to head off loss of this critical habitat.” This isn’t the first time we’ve heard about the hazards of so-called forest fragmentation. Back in 2013 the U.S. Geological Survey published a meme on it too (see 
A report compiled and written by the U.S. Dept. of Homeland Security (unclassified) has turned up in the public. The report, titled “Potential Domestic Terrorist Threats to Multi-State Diamond Pipeline Construction Project” (full copy below), warns about eco-terrorism and the potential for “mass casualties” from radicalized environmentalists who are now targeting the Diamond Pipeline Construction Project, due to run from Cushing, OK to a refinery in Memphis, TN–most of it located in the state of Arkansas. “Law enforcement are assessing what environmental extremists did to disrupt Dakota Access Pipeline – Molotov cocktails, rocks, arson, roadblocks, chaining themselves to equipment, improvised explosive devices, etc – and seeing many of the same activities potentially happening around Diamond pipeline,” according to a police representative. The report sees potential danger on two fronts: radical environmentalists, and anti-government militias that don’t like eminent domain being used to force landowners to accept the pipeline across their land. We’ve previously reported on numerous instances of vandalism against drilling and pipeline operations. It’s good to see the government taking such acts of crime seriously–to the point of labeling it domestic terrorism. Why mention a report about a pipeline nowhere near the Marcellus/Utica? Because bombs, equipment vandalism, shootings and all of the things mentioned in this report have happened here before. And because the nutjobs who were active in engaging in such acts against the Dakota Access Pipeline (now built and flowing oil), have promised to bring their lawlessness to our area (see