NatGas Replacing Coal for Power Gen in Ohio; Renewables Tiny 3%
Here’s an interesting and fun fact: In just 12 years electricity generated by coal plants has gone from powering 87% of Ohio’s homes and businesses to just 47%. So-called renewables (solar and wind) make up a whopping 3% of Ohio’s electric generation. So what’s replacing coal? Natural gas, which now generates 34% of the state’s electricity. Gas still hasn’t beaten coal, but give it a few more years and it will.
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New York State is already doing it, Pennsylvania is actively considering doing it, and now, Ohio has caught the contagion too. The “it” we’re talking about is soaking electric rate payers to pump more money into the coffers of big corporations so they can keep uneconomic and financially failing nuclear electric generating plants operating. Both PA and OH lawmakers have floated plans to soak rate payers in their respective states.
There is an ongoing question of whether or not the Ohio Marketable Titles Act (MTA), which impacts Utica shale rights, can be used to return previously severed mineral rights back to a surface landowner, or whether the MTA is superseded by Ohio Dormant Minerals Act (DMA). In February, Ohio’s Seventh District Court of Appeals said the MTA *does* still apply to mineral rights (see 
We spotted some interesting comments made by Rick Simmers, chief of Ohio’s Division of Oil and Gas Resources (part of Ohio Dept. of Natural Resources, or ODNR), at the recent Utica Midstream conference in North Canton. Rick recounted the rapid, recent history of Utica drilling in the state, coming from nothing less than a decade ago to now having over 2,500 Utica wells drilled and producing. He also pulled out the crystal ball for a prediction of how many new Utica wells will get drilled both this year and next.
Last week Enbridge, owners of the Texas Eastern Transmission Company (Tetco) pipeline, filed documents with the Federal Energy Regulatory Commission showing that Phase II of its Texas Eastern Appalachian Lease (TEAL) Project began service on April 1st. The TEAL project connects to and feeds Utica Shale gas to the NEXUS pipeline.
Did you know that at least $70 billion has been spent in Ohio on drilling and pipelines and other infrastructure to support the Utica Shale industry since 2011? No, we didn’t either. That is an astounding number! How about this number: Ad valorem (i.e. property) taxes paid by the shale industry from 2010 through 2018 have totaled ~$132 million. That’s money that goes to fund local schools and towns. Amazing!
One of the arguments often heard from those who oppose natural gas pipelines is that “nobody” benefits from the pipeline except the sleazy Big Corporation that builds and profits from it. A single pipeline running through Ohio and Michigan puts that lie to rest. Rover Pipeline, built and operated by Energy Transfer, paid out some $73 million in local property taxes in 2018 when the pipeline first began operation. For 2019, with the full pipeline operating at 100% capacity for the entire year, Rover says they will pay out ~$180 million in property taxes! Taxes that fund schools, roads, first responders and other worthy causes.
Investment firm BlackGold Capital Management announced late last week it has purchased Overriding Royalty Interests (ORRI) in the Utica shale of Ohio from an unnamed seller. We have a guess as to who did the selling.
Yesterday Ascent Resources, a company founded by Aubrey McClendon after he left Chesapeake Energy, issued a (very) brief recap of what happened in 2018, and a look ahead (“guidance”) at what the company expects to accomplish in 2019. The update is brief–cherry-picking highlights to share–because it can be. Ascent’s stock is not publicly traded, so they don’t have to provide full financial updates (except to their investors). Ascent is a big and important driller in the Utica, so *any* information they share is useful and of interest.
Yesterday IHS Markit released a study commissioned by Shale Crescent USA and JobsOhio that finds natural gas produced in the tri-state region of Ohio, Pennsylvania and West Virginia will be 45% of the nation’s production by 2040, up from 31% this year. This is truly big news with lots of ramifications.
The Canadians are coming! The Canadians are coming! Actually, they’re already here. Last summer we brought you the bombshell news that Encino Acquisition Partners (EAP) had purchased all of Chesapeake Energy’s Ohio Utica assets (see 
The “great crew change” is taking place in the oil and gas industry in general, and in the Marcellus/Utica in particular. Older workers are nearing retirement and exiting the industry in increasing numbers, and the industry isn’t attracting enough newer workers to fill the ranks. According to the Ohio Oil & Gas Association, the need for new workers in Ohio’s O&G industry is pressing. Everything from welders and truckers to people working with technology.
Equitrans Midstream, which used to be called EQT Midstream, yesterday announced they have cut their first big deal since separating from EQT last year. Equitrans is buying a 60% stake in Eureka Midstream, a 190-mile pipeline system in Ohio and West Virginia serving both the Marcellus and Utica, and a 100% stake in the tiny 15-mile Hornet Midstream, a gathering system in WV that connects to Eureka.
In Nov. 2017 the Ohio Attorney General’s office under then-AG Mike Dewine (RINO swamp dweller, now governor) sued Energy Transfer at the prompting of the Ohio EPA claiming the company’s Rover Pipeline project was guilty of “polluting state waters while constructing a natural gas pipeline across Ohio” (see 
The Ohio Dept. of Natural Resources (ODNR) issued fourth quarter 2018 numbers for Utica shale oil and gas production yesterday, and wow! Both natural gas and oil production rocketed upward. Natgas production was up 32% over the same period last year, to a new all-time high of 663.5 billion cubic feet (Bcf), and oil production hit 5.8 million barrels, up 39% over last year’s 4Q.
Last Friday MDN reported that Encino Energy CEO Hardy Murchison and COO Ray Walker (formerly of Range Resources) spoke at the Ohio Oil & Gas Association (OOGA) 72nd Annual Meeting in Columbus (see