Spectra Admits Detecting Corrision in Exploded TETCO Pipe 4 Yrs Ago
On April 29, Spectra Energy’s Texas Eastern Transmission (TETCO) “Delmont Line 27” pipeline exploded in Westmoreland County, PA, seriously injuring one resident who still cannot walk after being burned over much of his body (see Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate). The reason for the explosion and fire was corrosion on welds covered with a particular kind of pipe tape no longer in use (see Spectra Says PA Pipeline Explosion “Unacceptable,” Blames Pipe Tape). Brace yourself for news that may make you angry: An investigation four years ago (in 2012) discovered corrosion in the very area where the pipe would eventually explode. Spectra says they documented the corrosion, but pipe corrosion happens over time–this is nothing new–and the thing to do is to monitor it. Spectra planned to reexamine the welds and the corrosion again in 2019, per the normal and accepted safety schedule. According to Spectra, until now it has been observed that corrosion of pipes happens at a rate of no more than 2-3% per year. In the case of the exploding TETCO pipeline, the corrosion rate was vastly accelerated, more like 10-15% per year since the last examination. What made it speed up?…
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By our reckoning, the 2016 Shale Insight event being held in Pittsburgh next week (Sept. 21-22) will be MDN editor Jim Willis’ fifth consecutive Shale Insight event. In past years Jim has hung out at the NGI (Natural Gas Intelligence) booth. This year Jim and Marcellus Drilling News will have their own booth: #208 (near the entrance). Jim invites MDN readers who are attending to stop by and say hello! Jim will bribe passersby with free candy, so stop by and grab a piece! What’s that? You aren’t (yet) registered to attend Shale Insight? Let’s get that rectified right now. There are many reasons to attend, including keynote addresses by Harold Hamm, CEO of Continental Resources, and a closing keynote by none other than The Donald (as in Trump). Here’s a rundown of what’s happening next week at Shale Insight…
Last week the U.S. Department of Energy (DOE) doled out a total of $13 million in grants for twelve multi-year research projects. The aim of the projects is to develop ways to mitigate methane emissions from natural gas pipelines and storage infrastructure, ways that don’t break the bank. Two of the twelve projects will be run in Pittsburgh. PPG Industries, the Gas Technology Institute and RTI International received a combined $876,639 to study remote monitoring of natural gas pipelines. The University of Pittsburgh and Corning together got a whopping $1.2 million to develop an advanced distributed optical fiber technology for natural gas infrastructure monitoring. Here’s the lowdown from the DOE…
Channeling our inner Joan Rivers: Can we talk? It hurts when a good friend publicly criticizes you. It feels like you’ve been stabbed in the back. Perhaps a case of public criticism is one of the reasons for the developing rancor (we call it a civil war) between landowners and the Marcellus industry in Pennsylvania. Landowners are upset that their royalty checks are, in some cases, pennies–as in less than one dollar. Drillers claim that super low prices they receive for the gas are to blame–that nobody is making money right now. Landowners say that drillers (e.g. Chesapeake Energy) are deducting post-production costs that they shouldn’t be allowed to deduct, resulting in worthless royalty checks. For a number of years landowners in Pennsylvania have supported legislation to force drillers to pay a minimum 12.5% royalty, which is stipulated under a 1979 law. Drillers say post-production costs are written into many contracts and if it’s there, landowners must live by the contract. It’s turning into a mess. We’ve covered it extensively (
What happens when you put a virulent anti-driller in charge of a state’s forestry service, a state that previously had a small, safe, healthy program to allow some shale drilling, giving taxpayers a break with a source of new revenue? Of course the anti-driller immediately tries to quash any more new drilling efforts. And that’s just what has happened with former PennFuture president and current Secretary of the PA Dept. of Conservation and Natural Resources (DCNR), Cindy Dunn. We called for her firing back in June when she was caught using–we’d say misappropriating–taxpayer money to send her staff to Big Green reeducation events (see 
In June 2014 MDN broke the news that Moxie Energy was in the hunt to begin a third new Marcellus gas-powered electric plant project in Pennsylvania, near Wilkes-Barre (see 
For the past few days MDN has chronicled what we’ve named a royalties civil war happening between Pennsylvania landowners and the Marcellus drilling industry in the state–two groups usually on the same side. The war revolves around royalty checks–and how meager they are (see 
Yesterday MDN reported the story that Dominion Transmission has decided to lock out union members from working at their jobs in Dominion installations over a contract dispute (see 
In April 2015 Kinder Morgan’s Tennessee Gas Pipeline (TGP) subsidiary filed an application with the Federal Energy Regulatory Commission (FERC) to build 8.2 miles of new looping pipeline in Tioga County, PA and beef up two compressor stations in Bradford County, PA. The $142 million project is called the Susquehanna West Project. The project will increase capacity along a section of the TGP, bumping it up by 145 million cubic feet per day (Mmcf/d). All of the extra capacity is spoken for by Statoil and the wells they’ve drilled in NEPA. Good news: On Tuesday FERC issued their approval for the project, which means construction will begin in January 2017…
Residents in Wilmot Township (Bradford County), PA are mad as hell over shorted royalty checks–and they aren’t taking it anymore. Yesterday Wilmot Township’s three supervisors passed a resolution demanding, “production be discontinued from wells where landowners are having their royalty checks diminished to nothing or nearly nothing.” That is, they want to block natural gas production from existing shale wells drilled in a town smack in the middle of one of the most-drilled places in Pennsylvania. We’ve long chronicled the fight between landowners and some (certainly not all) drillers who are screwing them out of royalty payments by claiming inflated post-production costs. The issue first came to prominence with claims by landowners signed with Chesapeake Energy, who claimed Chessy had cut a sweetheart deal with its former midstream company (Access Midstream) whereby Access bumped up its charges for piping gas which Chesapeake claimed as an expense and deducted from royalty checks, and then Access turned around and invested big money into the old mothership company (see 
We scored a copy of a refreshingly honest (blunt) assessment of the Marcellus industry in Pennsylvania. The letter was written by the Marcellus Shale Coalition’s vice president of government affairs, James Welty. It’s dated August 29 and was written and sent to all Pennsylvania legislators in both the House and Senate. The legislators have been enjoying themselves on summer holiday break and are now returning to work, with just a couple of weeks left in the legislative session. The PA House is in session for 2 1/2 more weeks and the Senate for 1 1/2 weeks (final day is Nov. 15 for each). There’s not much time left to handle the people’s business in 2016. Welty’s letter to the legislators is a frank assessment of the current down market faced by PA’s shale drillers. Welty tells lawmakers that recently adopted Article 78a rules will mean drillers spend an additional $2 million per well to drill–a budget buster for many drillers. He also says PA has the highest effective tax rate on drilling in the country at 12.3%. Although PA doesn’t call it a severance tax, it essentially is a severance tax and costs more than any other oil and gas state, contrary to the lies by Democrats who lust for more money to give away. Give this frank assessment of our beloved industry a read–it’s worth your time to see how the industry characterizes the current landscape in PA…
In the past we’ve been pretty critical of the Pennsylvania Independent Fiscal Office (IFO). It claims to provide revenue projections for use in the state budget process along with “impartial and timely analysis of fiscal, economic and budgetary issues to assist Commonwealth residents and the General Assembly in their evaluation of policy decisions.” It’s been our observation the IFO is populated with partisan Democrats. However, we have to acknowledge lately their analysis work, at least with regard to the Marcellus industry, has been pretty accurate (see 
A great article in Investor’s Business Daily explores the link between shale gas and the “explosive expansion” of the U.S. petrochemical industry. Part of the petchem supply chain is finding a cheap source of ethylene, the raw material used in making all sorts of plastics products. Manufacturers get ethylene from ethane cracker plants. The article discusses that link, and the reasons why Shell chose to locate their new multi-billion dollar ethane cracker plant near Pittsburgh. As you can guess, economics play a major role in such a decision. Here are the specific economics that convinced Shell that PA is a good bet…