Pennsylvania

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    The Cabot Rocket Ship Heads Out of the Solar System in 2013

    rocketNo less than three press releases were issued by Cabot Oil & Gas yesterday. In fact, the news is coming so fast and furious from all corners, it’s hard to keep up! First, Cabot announced a deal with the Transco pipeline to ship up to 850,000 MMBtu per day on the Transco once a new section is built–estimated to go online in 2017. Second, Cabot announced proved reserves at the end of 2013 were up 42% from 2012–to 5.5 trillion cubic feet. And third, the company’s production for 2013 was up 55% over 2012 to 413.6 billion cubic feet equivalent (Bcfe)–virtually all of it in the Marcellus Shale–and all of that from a single northeastern PA county, Susquehanna County. Cabot is an incredible story. No wonder their fourth quarter 2013 profit soared 91%!

    Here, in turn, are Cabot’s announcements about their deal with Transco, their proved reserves, and their 4Q13 and full year 2013 update…
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    DEP Sec. Abruzzo Praised for Quick Response to Chevron Well Fire

    Pennsylvania Secretary of the Dept. of Environmental Protection, Chris Abruzzo, is getting high marks for the DEP’s handling of the recent Chevron well fire in Greene County, PA–by both Republicans and Democrats. You may recall that former DEP Sec. John Hanger, running for the Democrat nomination for governor, called Abruzzo’s appointment by Gov. Corbett “bizarre and irresponsible” (see Former PA DEP Sec. Hanger Blasts Interim Replacement for Krancer). MDN editor Jim Willis had the pleasure of interviewing Sec. Abruzzo last September at the Shale Insight conference (see Exclusive: MDN Interviews PA DEP Sec. Chris Abruzzo). Our impression then, as now, was that he is a sharp guy and a good leader. Although it took a sad tragedy, we were proven right–and Hanger was proven wrong. Hey, don’t forget to “pass a joint for John” to help him with his failing campaign for governor, k?

    Meanwhile, here’s the story of politicians from both parties heaping praise on Abruzzo for a job well done:
    Read More “DEP Sec. Abruzzo Praised for Quick Response to Chevron Well Fire”

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    Beaver County, PA – In the Marcellus/Utica Catbird Seat

    In many ways, Beaver County, PA is in the catbird seat with respect to the Marcellus and Utica Shale. The county has seen some Marcellus drilling with 17 unique well permits were issued for Beaver for the last four months of 2013 according to the latest volume of the Marcellus and Utica Shale Databook. However, it is Beaver’s geography for reasons other than drilling that gives it its advantage: the Ohio River flows through Beaver; two interstate highways pass through; lots of railroads; and of course, close to the Pittsburgh International Airport.

    Beaver is also the chosen location for Shell and their $2-$3 billion ethane cracker plant. It’s been a roller coaster of will they or won’t they build it? Lately, it certainly seems like Shell is favoring a green light for the project–but only when they finally buy the property on which a now closed zinc plant sits will everyone breath a sigh of relief that the project is a done deal. (See Shell to Begin Demolition at PA Ethane Cracker Site Early 2014 for the latest.) Even if Shell doesn’t build the cracker plant, Beaver County officials say there’s still a lot happening in the county and the future looks bright, because of the Marcellus…
    Read More “Beaver County, PA – In the Marcellus/Utica Catbird Seat”

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    Remains of Chevron Contractor Found at Greene County Well Site

    light a candleUnfortunately our worst fears were realized when PA State Police announced yesterday they had removed “what appear to be” the remains of Ian McKee, 27, a Cameron International contractor working at the Chevron Marcellus well site in Greene County. A warning folks, this is a bit gruesome. Apparently they found some bones but no body. It is a heart-rending story. No matter who it would have been, it’s a tragedy. In the case of Ian, he was young, living with his fiance with a baby on the way. Please say a prayer for his family and friends–they will need it in the coming days as they deal with this.

    To their credit Chevron released a statement about finding Ian (see below). Oddly, the company Ian worked for that was doing contract work for Chevron–Cameron International–has not posted any public statements on their website… from the beginning. Below Chevron’s statement is a news account of the “somber” news conference held yesterday where Chevron announced finding Ian’s remains…
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    Chevron: Sorry Turning Your Life Upside Down–Here’s a Free Pizza

    In the midst of a public relations emergency (nightmare), snap decisions are made quickly. Frankly, it’s tough to be critical about the decisions made under such pressure. It’s tough to imagine what someone goes through until you “walk in their shoes.” We’re mindful of that and this is not an attempt at “piling on.” But we can’t ignore the story of how Chevron has addressed the current Greene County, PA well fire crisis. A worker from a contracting company–Cameron International–lost his life in the explosion and fire that raged for nearly five days before it burned out. As we’ve noted several times, to their credit, Chevron was open and transparent, posting frequent updates on their website (see Chevron’s Updates here).

    During the crisis emergency equipment, personnel and around-the-clock activity in the area greatly disrupted the lives of those living nearby. Someone at Chevron decided it would be a good idea to show the company’s appreciation to those neighbors whose lives were turned upside down. So Chevron reps went door to door at about 30 nearby homes and handed out…a coupon for a free pizza and 2 liter soda–value $12. Thunk. While we appreciate they wanted to do something, this was decidedly not the best decision that could of been made by Chevron during this entire crisis, as noted by the Washington Observer-Reporter:
    Read More “Chevron: Sorry Turning Your Life Upside Down–Here’s a Free Pizza”

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    PA Gas Production #s Released: Top 10 Wells, Top 5 Counties & More!

    Top 10Pennsylvania released their second half 2013 production numbers yesterday and man oh man is it another sizzling hot report. Another 700 horizontal (mostly Marcellus) shale wells were brought online in the second half of 2013 in PA which brings the number of horizontal wells with reported production to 5,074. And, in what we believe is a first, Susquehanna County has displaced Bradford County as having the most production during a 6-month reporting period.

    Not surprisingly Cabot Oil & Gas and their prolific wells in Susquehanna County top the list as most productive. Get this, when you look at average daily production by wells, Cabot has the top 13 most productive wells in the state for 2H13–all top 13 spots. When you expand it out, they have 17 of the top 20 spots, and 34 of the top 50 spots. Truly astonishing.

    Below we have a few lists for you: Top 10 All Time Producing Wells in PA, Top 10 Wells by Production per Day, and the amount of gas produced by the top 5 counties in PA…
    Read More “PA Gas Production #s Released: Top 10 Wells, Top 5 Counties & More!”

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    Halliburton Fined $1.8M for Storing/Treating HCl at W PA Facility

    got caught red handedIn one of the biggest (perhaps the biggest) fines levied by the Pennsylvania Dept. of Environmental Protection (DEP), Halliburton has been fined $1.8 million for storing and treating hydrochloric acid (HCl) at a facility in Homer City, PA (about 50 miles from Pittsburgh). The HCl shipped and treated at the Homer City site happened over a 13-year period of time from 1999-2011, meaning most of it came from conventional natural gas well sites, although some it likely came from Marcellus Shale sites too (the conventional/unconventional split is not identified in the DEP paperwork). Marcellus drilling in PA didn’t ramp up until around 2006-2007. The DEP says Halliburton had claimed exemption from the state’s Solid Waste Management Act of 1980 for their Homer City facility, saying they were shipping and storing very small amounts of HCl at the facility when in fact that was not the case. Based on their false claim, Halliburton was given a pass on inspections, paperwork filing, signage, and the requirement to use certified hazardous waste haulers on more than 250 truck trips in and out of the facility–hauling HCl. Halliburton was in the wrong, they now acknowledge it (having been caught), and they’ve been levied a steep fine.

    Both the DEP and Halliburton stress that there “is no evidence that Halliburton’s handling of the hazardous waste caused any actual harm to the public or the environment.” However, Halliburton violated both the spirit and the letter of the law and have now been caught. Shame on them. Below is the announcement from the DEP, a copy of the consent order signed by Halliburton admitting guilt, and an article providing important details about this story not found elsewhere…
    Read More “Halliburton Fined $1.8M for Storing/Treating HCl at W PA Facility”

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    Putting a Face to PA’s Bountiful Natural Gas Production

    MDN brought you the latest good news with respect to Pennsylvania’s production numbers today (see our companion story “PA Gas Production #s Released”). We ran across an article that puts a face to those numbers. Really, at the end of the day, what do those numbers mean for landowners? Is it like hitting the lottery with bags of money sitting around? Here’s the story of a farming family in Harford Township (Susquehanna County), PA. They just happen to have three of the top 5 producing wells in the entire state for the second half of 2013 sitting on their land.

    We were struck by the integrity and character of these folks. Although they obviously have a fair bit of money pouring in from royalties, it’s “not enough to make them rich”–not yet anyway. They still farm and are humble people at heart. Salt of the earth types…
    Read More “Putting a Face to PA’s Bountiful Natural Gas Production”

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    New Wastewater Injection Well Approved in Clearfield County, PA

    The federal Environmental Protection Agency has approved a new injection well in Clearfield County, PA. Windfall Oil and Gas received the permit allowing them to build an injection well in Brady Township that will pump wastewater from oil and gas drilling, including shale drilling, some 7,300 feet down for permanent disposal. (Self-serving advertisement: For a complete list of existing PA injection wells used by Marcellus drillers, see the just-published Marcellus and Utica Shale Databook, Volume 3.)

    Clearfield County is located roughly in the center of the state, so it’s a good location for both northeastern and southwestern shale drillers. Here’s the details about this newest injection well coming to PA:
    Read More “New Wastewater Injection Well Approved in Clearfield County, PA”

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    Do PA Drillers have Law on Their Side in Royalty Debate?

    A sharp MDN reader, John S., emailed MDN to remind us of how PA landowners ended up in the quagmire they are now in with regard to royalties with drillers (like Chesapeake) deducting post-production expenses from what they pay to landowners. We had forgotten about the Kilmer v ElexCo Land Services case from March 2010 in which the PA Supreme Court ruled that drillers could indeed deduct certain post-production expenses without violating the law that says landowners must be paid a 12.5% minimum royalty (see Breaking News: PA Supreme Court Rules Against Landowner Seeking to Invalidate Lease).

    PA Gov. Tom Corbett wrote a letter to Doug “the ax” Lawler at Chesapeake telling him the company’s royalty calculations were unfair at best, and perhaps illegal. Doug just has to point to the 2010 PA Supreme Court case. Here’s more information about the 2010 case and what the decision means, and doesn’t mean:
    Read More “Do PA Drillers have Law on Their Side in Royalty Debate?”

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    Bradford PA Landowner Rally over Chesapeake Royalty Shenanigans

    fox in henhouseLandowners in Bradford County, PA feel like they’re getting screwed by Chesapeake Energy on royalty payments, a complaint they’ve been making for some time now (see Bradford County, PA Landowners Sue Chesapeake over Royalties). PA state law guarantees a minimum 12.5% royalty to landowners, but because Chesapeake keeps deducting post-production expenses (like pipeline costs, processing costs, perhaps marketing costs), landowners end up getting squat–in some cases a 1.5% royalty. The landowners have some righteous anger over the issue. More than 100 landowners and officials gathered at the Bradford County Courthouse in Towanda on Friday in a rally to raise awareness of the issue and to support passage of PA House Bill 1648, which would protect landowners from large deductions from their royalty checks for post-production costs.

    We applaud these landowners and their elected representatives for seeking justice in this situation. The problem is, they’ve invited a fox into the hen house to help them out. State Senator Gene Yaw, whose district includes Bradford County, along with PA Gov. Tom Corbett, has asked PA’s anti-drilling Attorney General, Kathleen Kane, to investigate Chesapeake and this matter of landowners getting shorted on royalty payments. She’s only too glad to “help out.” Normally that would be a good thing, except Kane is just as likely to turn around and bite the people she’s supposed to be helping. She hasn’t met a driller yet she wouldn’t rather see behind bars (see PA AG Abuses Her Authority, Files Criminal Charges Against XTO). If it were up to Kathleen Kane, there would be no Marcellus drilling at all and consequently no royalties for landowners to argue about. We think it’s an ill-advised move to involve Kane, but that’s just our humble opinion…
    Read More “Bradford PA Landowner Rally over Chesapeake Royalty Shenanigans”

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    Chevron Well Fire Update: Fire Spreads to 2nd Well, Both Fires Out

    MDN previously told you about an explosion and well fire at a Chevron drilling site in Greene County, PA last Tuesday (see Explosion & Fire at Chevron Well in SWPA – 1 Person Missing). We then brought you Chevron’s series of updates on progress (or lack thereof) in extinguishing the fire and locating a missing worker (see Update: Chevron Well Fire in Greene County Still Burning). On Saturday, a second well at the pad caught fire and started to burn–something Chevron feared may happen. However, as of 3 pm on Saturday, both well fires were out, although Chevron isn’t quite sure why (theory: lack of gas to fuel them). The very careful work of removing a badly burned crane now begins so Chevron can start “well intervention work.”

    There is still, so far, no sign of the missing worker, who is presumed dead. Chevron has issued a steady flow of updates on their website. Below are the most recent three updates issued (since the first four we brought you), which gives a timeline for what’s happened at the site since the explosion…
    Read More “Chevron Well Fire Update: Fire Spreads to 2nd Well, Both Fires Out”

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    Chevron Well Fire Victim – Native of Warren County, PA

    Although we’ve not heard the missing worker at the site of a Chevron well fire in Greene County, PA has been located, we do now know who it is that is missing. His name is Ian McKee and he’s a native of Warren County, PA. Ian works for Cameron International, the sub-contractor working on completing and hooking up the shale well to a gathering pipeline.

    A prayer vigil was held for Ian last Thursday night…
    Read More “Chevron Well Fire Victim – Native of Warren County, PA”

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    CONSOL to Begin Ethane Shipments Next Year–to Europe?!

    CONSOL Energy is a big, important driller in the Marcellus and Utica Shale. Most of their operations are in “wet gas” areas–those locations that produce a lot of natural gas liquids (NGLs), like ethane, along with “dry gas” or methane. Although CONSOL has a lot of acreage in southwestern PA and in WV and eastern OH, the ethane they produce will not be going to a proposed new ethane cracker plant being built by Odebrecht in Parkersburg, WV. Instead, CONSOL is going to send their ethane by pipeline to an export facility in Philadelphia, and from there, on to Europe for processing and use in European petrochemical factories.

    Why in the world ship ethane all the way to Europe for processing instead of selling it in your own back yard? Timing. CONSOL doesn’t want to wait the 4-5 years for an ethane cracker to be built (if it’s built at all). They’ve adopted a “bird in hand” strategy. They’d rather start shipping it next year, when Sunoco Logstics’ Mariner East pipeline is up and running, rather than wait. And so CONSOL, according to their announcement below, has locked in a deal with Ineos Europe AG. But don’t despair, CONSOL also previously signed an agreement with Shell to provide its cracker plant in Beaver County, PA with ethane–when and if that plant gets built…
    Read More “CONSOL to Begin Ethane Shipments Next Year–to Europe?!”

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    WPX Gives MDN an Update on Their 2014 Marcellus Plans

    Yesterday MDN brought you the news that WPX Energy seemed to be waving good-bye to the Marcellus, based on our observation that they will not do any new drilling in the Marcellus in 2014 (see WPX Energy Abandoning the Marcellus? Sure Looks That Way). Upon posting that story, WPX official Susan Oliver contacted MDN to provide some perspective and background. MDN concludes that we had most of our analysis right, but we may have left the wrong impression by using the word “Abandoning” in our headline. We want to clear this up right here and now, at the beginning of this update: WPX Energy is not leaving the Marcellus. That is, the 100 or so wells they’ve already drilled here in the Marcellus will continue to be WPX wells. We thank the company for making that clarification and apologize to landowners if we gave you a bit of shock.

    However, WPX is, as we noted yesterday, not doing any new drilling in the Marcellus–at least in 2014 and likely beyond. That part of yesterday’s story was correct. As Susan told us, the change we see reflected in their 2014 budget and drilling plan is that the company is shifting from drilling to production in the Marcellus. As for their new drilling program in 2014, they owe it to their stockholders to drill new wells in more oily shale plays–places where they will make more money, quite frankly. And you can’t fault them for that…
    Read More “WPX Gives MDN an Update on Their 2014 Marcellus Plans”

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    Penn State Figures Out How to Convert Garbage into Proppants

    Shale drilling uses a special kind of sand called silica. It uses a LOT of silica, which is mostly mined in the Midwest, in places like Wisconsin. Sand is called a “proppant” in the industry because it “props open” tiny little holes in fracked shale rock to allow the natural gas (or oil or NGLs) to slip out and up the borehole. There are alternatives to silica as a proppant material–but not many are economic to use. What if you could turn industrial and domestic waste materials into a viable alternative source of raw materials for proppants? That is, what if you could turn garbage into the equivalent of sand? That would be so cool, getting rid of industrial waste on the one hand, creating a cheap source of proppants on the other.

    Turning garbage into proppants is exactly what the brains at Penn State have now figured out how to do. Below is the announcement from Penn State that a pair of their materials scientists have published a new paper in a scientific journal (copy of the paper embedded below). The announcement and paper trumpet the discovery that there is a better way to create cheap proppants for shale drilling, and it was discovered right here in Marcellus Shale country…
    Read More “Penn State Figures Out How to Convert Garbage into Proppants”