Flaring Marcellus Wells in SWPA Light Up Night Sky, 911 Called

Residents in western Lawrence County, PA had a bit of a scare when they noticed a red glow in the sky Saturday night. They took to social media to speculate what it might be. Some called 911 to report what may be a big fire. Turns out it was flaring from a couple of Hilcorp Energy Marcellus Shale wells. The wells are already drilled and producing, so why did they flare? Flaring–or burning of natural gas at the wellhead, is a safety precaution to prevent explosions from too much pressure in the well. A Hilcorp rep said what likely happened is that compressors that compress and send the gas down the pipeline sometimes get moisture in them, and with the freezing cold temperatures, that moisture can freeze and lock up the compressors. Instead of gas building up to dangerous pressures because it can’t flow on down the pipe, the automatic flaring mechanism kicked in to burn off some of the gas–creating the red glow in the night sky. It’s good to see technology–especially safety technology–working as designed…
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Siemens Providing Turbines, $$ for 1 GW Hickory Run Power Plant

The picture shows the assembly of the SGT5-8000H at the gas turbine plant in Berlin.

In February 2013 MDN first told you about a plan to build the Hickory Run Energy Center–a $750 million electric generating plant at a former manufacturing site along the Mahoning River in Lawrence County, PA (see NW PA Town Approves Site for Marcellus-powered Electric Plant). The initial design called for a 900 megawatt facility, powered by Marcellus gas. More recent plans indicate the facility will be 1,000 megawatts (or 1 gigawatt)–enough electricity to power 1 million homes! In August we shared the exciting news that one publication was reporting ground has been broken for the facility (see Ground Broken for Lawrence County, PA NatGas-Fired Electric Plant?). Whether bulldozers are pushing dirt or not, activity around the project continues at a brisk pace. German engineering giant Siemens announced on Monday that they have been awarded a contract to provide the guts for the plant–two H-class gas turbines, one steam turbine and three generators–along with a long-term service contract. Siemens also revealed they’ve made an unspecified (large) investment in the project and will own 20% of it. Here’s the good news that the Hickory Run Energy Center will get some Siemens love…
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South Jersey Resources to Manage NatGas Supply for W PA Elec Plant

South Jersey Resources Group has cut a five-year deal to provide natural gas for the Hickory Run Energy Station in Lawrence County, PA. Just two weeks ago MDN told you that the Hickory Run Energy Marcellus gas-fired electric plant planned for Lawrence County appears to be active and moving forward once again (see Signs of Life in Lawrence County, PA NatGas-Fired Electric Plant). Tyr Energy, a subsidiary of ITOCHU Corporation, purchased the Hickory Run Energy project in 2016 from LS Power Development. South Korea’s KB Asset Management announced they are investing $150 million in the project, which we said is “a sure sign that the pieces are now coming together for construction to begin.” Little did we know how prophetic those words were. Two days later, another report in the Korean Investors publication reported that French banking giant BNP Paribas has originated $460 million worth of loans for the project–of which the KB Asset Management investment is part (see Ground Broken for Lawrence County, PA NatGas-Fired Electric Plant?). The article also reported, “Ground has been broken for the plant.” Cool. Now another piece of this fast-moving puzzle falls into place. South Jersey Resources will contract for and supply natural gas to the plant, when it fires up…
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Lawrence County, PA O&G Production “Inching Upward Again”

Lawrence County, located along Pennsylvania’s border with Ohio, is not the first county you think of when discussing Marcellus/Utica drilling in western PA. There have been no permits to drill new shale wells in Lawrence so far this year. However, the county does have 58 operating shale wells–and the amount of gas those wells produce is gradually rising. All but 10 of the wells are owned and operated by Hilcorp. Most of the wells are located in just two townships: Pulaski and Mahoning. Linda Nitch, executive director of economic business development for the Lawrence County Regional Chamber of Commerce, believes Hilcorp is pumping more gas from the wells it owns in Lawrence. She’s hearing from some landowners that their royalty checks are “getting a little bigger”…
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Ground Broken for Lawrence County, PA NatGas-Fired Electric Plant?

It was only two days ago MDN told you that a Marcellus gas-fired electric plant planned for Lawrence County, PA appears to be active and moving forward once again (see Signs of Life in Lawrence County, PA NatGas-Fired Electric Plant). Tyr Energy, a subsidiary of ITOCHU Corporation, purchased the Hickory Run Energy project in 2016 from LS Power Development. The news we brought you earlier this week is that South Korea’s KB Asset Management just announced they are investing $150 million in the project, which we said is “a sure sign that the pieces are now coming together for construction to begin.” Little did we know how prophetic those words were. Another report in the Korean Investors publication reports that French banking giant BNP Paribas has originated $460 million worth of loans for the project–of which the KB Asset Management investment is part. Not only that, the article also reports, “Ground has been broken for the plant.” We don’t know for sure whether or not that is true, but if ground has not yet been broken, we expect it will happen soon…
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Signs of Life in Lawrence County, PA NatGas-Fired Electric Plant

A Marcellus gas-fired electric plant planned for Lawrence County, PA, which had been dead, has roared back to life and now looks like it will get built. In February 2013 MDN first told you about a plan by LS Power Development to build Hickory Run Energy–a $750 million electric generating plant at a former manufacturing site along the Mahoning River in North Beaver, PA (see NW PA Town Approves Site for Marcellus-powered Electric Plant). The 900-megawatt plant, when built, would be powered by Marcellus Shale natural gas. A couple of months after the initial announcement, there was some early opposition to the plant (see Supporters, Detractors Meet on Proposed NatGas Power Plant in PA ). The original plans called for Hickory Run to be online and operating sometime in 2016. That never happened. It was at that point the story went cold for us. What we didn’t realize was that the project got sold by LS Power to a subsidiary of Japan’s second largest corporation. In June 2016, Tyr Energy, a subsidiary of ITOCHU Corporation, announced they had purchased the project and that they hoped to have financing and paperwork done by June of this year to begin construction this fall. We don’t know if that schedule still holds, but we do know that South Korea’s KB Asset Management just announced they are investing $150 million in the project–a sure sign that the pieces are now coming together for construction to begin on the Hickory Run Energy plant…
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Lawrence County Campaigns to Lure Cracker-Related Businesses

Lawrence County, PA

The leaders of Lawrence County, PA are clever. After five years of crunching numbers, in June 2016 Shell finally committed to building a multi-billion dollar ethane cracker plant complex in Beaver County, PA (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Since that time it’s pretty much been full speed ahead. The site is now cleared, extra roads and bridges have been built to handle truck traffic, and by July, two new cement plants will be in place to produce the enormous amounts of concrete needed to build the facility (see Shell Cracker Construction Starting Soon; Concrete Plants Ramp-up). From the start, this has always been a “regional” story because the cracker, while it’s getting built and after it’s built, will stoke economic activity in the way of jobs and business throughout southwestern PA, eastern OH and into WV’s northern panhandle. But knowing there’s a great opportunity and wishing/hoping some it will come your way is not enough. That’s what the smart leaders of Lawrence County (shares its southern border with Beaver County) know. Earlier this week Lawrence County launched a major effort to attract businesses to the county–businesses that are interested in supplying good and services too, or receiving raw plastics from, the Shell ethane cracker…
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DEP Says Fracking at PA Utica Wells “Likely” Caused Earthquakes

On Friday, the Pennsylvania Dept. of Environmental Protection held a hastily-called webinar to discuss findings that, frankly, aren’t all that newsworthy or surprising. After 10 months of study, the DEP has concluded that zipper fracking activities by Hilcorp in Lawrence County, PA “likely” caused a series of earthquakes in April 2016 so minor that nobody could feel them. And the DEP concluded this after 10 months of study, when a week before the DEP itself issued the permits to drill in Lawrence County, Hilcorp drilling was shut down about seven miles away, across the border in Mahoning County, Ohio, for potentially causing low-level earthquakes there (see Hilcorp Awarded Permits to Drill 7 New Wells Near Earthquake Zone). It wasn’t exactly rocket science to connect the dots and speculate that fracking over top an active fault had caused the low-level earthquakes on the PA side of the border, as it had on the OH side of the border. As we’ve stressed multiple times here on MDN, earthquakes related to shale are almost always connected with injection wells–when large amounts of liquid are injected near a fault. Earthquakes from fracking activities are rare–like under 10 times, ever, out of millions of fracked wells. Statistically zero. Still, let’s not let a good “crisis” go to waste. The DEP, in releasing a report about the incident (full copy below), said they will work up new regulations to detect and prevent such statistically zero occurrences from happening again…
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DEP Concludes Hilcorp Drilling Caused Minor Earthquakes in W PA

In April of last year (2016), MDN brought you the story of earthquakes so minor nobody could feel them in Lawrence County, PA were likely caused by fracking (see PA DEP Investigates Hilcorp Fracking in Earthquake Nobody Felt). However, seismic monitoring equipment could detect them. We have to stress that earthquakes caused by fracking is rare–like this is one of five instances we’re aware of. Far more common are earthquakes caused by deep injection wells. But fracking itself? Statistically zero percent of the time earthquakes are caused by fracking. So when it happens, it’s noteworthy. The conditions must be just right–fracking immediately overtop a fault in the rock layers. The driller in this case, Hilcorp, was ordered to stop all fracking and drilling activity at the well site, which they did. The Pennsylvania Dept. of Environmental Protection (DEP) says they have concluded their investigation and will today (on a webinar) disclose their results. Here’s the kicker: the DEP could have avoided this. Two years earlier the same driller, Hilcorp, caused minor earthquakes seven miles away–just across the border in Ohio. At that time Ohio officials stopped Hilcorp from drilling in that region. A week after the Ohio earthquakes that stopped Hilcorp, the PA DEP issued permits to drill in the same area (see Hilcorp Awarded Permits to Drill 7 New Wells Near Earthquake Zone). MDN was the only source to make that observation. We waved our little red flag and said maybe it’s not such a wise decision to grant those permits. Someone at the DEP needs to read MDN! At any rate, below is the news, as much of it as we currently know. By the time you read this, the DEP earthquake webinar will be over, but we’ve included the webinar notice as (so far) it’s the only information we have to indicate the DEP now concludes Hilcorp drilling was at fault for the earthquakes in Lawrence County…
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Top 20 Marcellus Drillers in Southwest Pennsylvania

The sharp folks over at the Pittsburgh Business Times have been looking through data from the Pennsylvania Department of Environmental Protection (DEP) and have compiled a list of 20 drillers who have at least a dozen shale wells in the southwest PA region. And they ranked them from lowest to highest. We’ve grabbed the list below. The interesting thing for MDN is that there is one name in the list not familiar to us, and we’ve been watching this space since 2009. Always fun to learn something new. Here’s the list of southwest PA’s “Top 20” Marcellus drillers…
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PA Econ Dev Secretary Hits Road to Promote Shell Cracker

roadshowWe suppose we should have known, but we didn’t. We didn’t know that Pennsylvania has a Department of Community and Economic Development (DCED). In fact, the DCED has its own cabinet-level Secretary–Dennis Davin–appointed by Democrat Gov. Tom Wolf in January 2015 when Wolf assumed office. Davin has stayed largely under the radar–until now. Wolf has sent Davin out on a road show to promote the forthcoming Shell ethane cracker plant. Davin is conducting roundtable discussions in various communities around PA to generate ideas on how local businesses can benefit from the cracker. So far he’s visited Beaver County (where the cracker will be built), Lawrence County and Washington County. The DCED is flooding the airways with press releases about Davin’s cracker road show…
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Utica Gas Production in PA’s Northern Tier “Inches” Up

Western PA counties
Western PA counties – click for larger version

The Utica Shale in Pennsylvania continues to grow in both drilling and production. The Youngstown Business Journal took a look at Utica production numbers for PA’s northern tier, Lawrence and Mercer counties. They found that even with the slow down in drilling, production in those two counties for 1Q16 increased over 1Q15. Here’s who’s busy drilling in PA’s northern tier Utica, and how much gas is flowing from that region…
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PA DEP Investigates Hilcorp Fracking in Earthquake Nobody Felt

earthquake.jpgYou can count on one hand the number of cases where fracking a shale well over top an active underground fault (never a good idea) has caused a detectable earthquake. Can we now add one more case in western PA? Officials from the PA Dept. of Environmental Protection are investigating whether or not fracking by Hilcorp in well in Lawrence County, PA caused two 1.9 earthquakes in the area on Monday. Just so you know, you can’t feel a 1.9 earthquake on the surface. The only way you know of such an earthquake is through special monitors maintained by the U.S. Geological Survey (USGS). A football stadium full of fans stomping their feet at the same time can (and has) caused earthquakes greater than 1.0 (see ODNR Temporarily Shuts Down Injection Wells After Low-Level Quake). You don’t even feel earthquakes on the surface until they hit around magnitude 4.0 and above. Still, with so little drilling happening in the state these days, chasing fracking earthquakes gives DEP investigators something to do, we suppose…
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Hilcorp is to Northern Utica as Cabot is to Eastern Marcellus

We’re always fascinated how some companies, like Cabot Oil & Gas, make money even in the lowest of low price environments with their Marcellus wells in Susquehanna County, PA (northeastern part of the state), while another driller right down the road, like WPX Energy, can’t make money and end up selling all of their wells and leases. What does Cabot do right that WPX doesn’t do? That’s the gajillion dollar question. We’ve observed a similar situation in the Utica Shale region of western PA/eastern OH. Hilcorp Energy is drilling Utica wells in Lawrence County, PA. In fact, Hilcorp is the “dominant active prospector” in the northern tier area of the Utica Shale–an area including Columbiana, Mahoning and Trumbull counties in OH and Lawrence and Mercer counties in PA. Hilcorp is strong and steady–and they’re making money. They’re also producing gas–lots of it. Lawrence County, PA produces almost as much natural gas as the far-more-drilled Columbiana County (OH). And it’s nearly all Hilcorp gas in Lawrence County. So if Hilcorp is like the Cabot of the Utica, who’s the WPX of the Utica? That would be Halcon Resources, with 140,000 acres in the northern Utica. Back in 2013 Halcon CEO Floyd Wilson famously said he wouldn’t drill any more “crappy” wells in the Utica (see Halcon CEO Says No More S***** Wells in Northern OH Utica). Halcon is desperately trying to stay afloat, Hilcorp is flourishing. Here’s more about Hilcorp and their success in the northern Utica…
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Rex Energy 3Q15: $95M Paper Loss, 1st Utica Well Online, Prod Up 15%

Rex Energy and Eclipse Resources are really like two peas in a pod. The people who founded Eclipse, which is shopping itself (see today’s companion story), are former Rex Energy people. Both companies are pure play, concentrating on the Marcellus/Utica, and both companies are headquartered in State College, PA. On Monday Rex Energy issued its third quarter 2015 update. The company lost nearly $95 million for 3Q15–but the entire thing was a paper loss, writedowns for the value of their assets because the price of natural gas took a nosedive. Production for the company was up 15% in 3Q15 over the same period a year earlier. Some of the biggest news we spot in the update is that Rex has been able to squeeze the costs all the way down to $5.2 million per Marcellus well they drill. Also big news: Rex put into production their very first Utica Shale well, drilled in Lawrence County, PA. Here’s the particulars…
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Hilcorp Asks Permission to Drill 25 Feet from Unleased Landowner

public hearingIvan and Kathy Dubrasky are anti-drillers located in Pulaski Township (Lawrence County), PA, just across the border from Ohio and close to Youngstown. They recently hosted a tiny anti-drilling rally at their property (see Tiny Protest (in PA) Claims to be Part of “Hands Across Our Land”). Although all of their neighbors signed leases with Hilcorp, the Dubrasky’s, as is their right, stubbornly refused to do so. They’ve screwed themselves out of money they could have had. Hilcorp is drilling multiple wells from a pad right across the street from the Dubraskys. Hilcorp would like to sink one of those wells about 25 feet from the edge of the Dubrasky property line. State law says a gas well must be at least 330 feet away from an unleased property line. If a well is any closer, inevitably some of the gas from under the unleased property will seep into the fracked well–no matter how careful you are. Hilcorp says they won’t perforate the pipe/well along their property line, so no Dubrasky gas will seep out. A hearing will be held on Sept. 16 to consider Hilcorp’s request–a request likely to be granted. The hearing should be interesting. No doubt there will be fireworks…
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