Marcellus/Utica Active Drilling Rig Count Crashes to 24

The rig count in the Marcellus/Utica region is crashing–down to its lowest level for a December since the M-U became a “thing.” It’s now lower than the levels reached in 2014, which was the advent of the first “crash” in rig counts. BUT (and this is a big BUT), lower rig counts do not necessarily mean less drilling or less production. How can that be?
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Equitrans Cancels Trinity Energy Contract re Mountain Valley Pipe

Last week Equitrans subsidiary EQM Midstream Partners (formerly EQT Midstream) canceled a contract with Texas-based Trinity Energy to build portions of the now-stalled Mountain Valley Pipeline (MVP) project. You may recall that the Federal Energy Regulatory Commission (FERC) stopped all new construction on MVP in October, until a new U.S. Fish and Wildlife Service permit that passes muster with the courts can be issued (see FERC Shuts Down All Mountain Valley Pipeline Construction). We’re not sure what Trinity was doing in the meantime with a shutdown of construction in place, but Trinity reps expressed surprise that their MVP contract has now been canceled.
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10 Colleges in PA-OH-WV Form Program to Train Cracker/Mfg Workers

A group of 10 community colleges scattered throughout southwestern Pennsylvania, eastern Ohio and northern West Virginia have formed the Tristate Energy and Advanced Manufacturing Consortium, or TEAM, with the aim of training skilled workers for cracker plants and other petrochemical-related manufacturing operations. The cooperative has crafted a “stackable-credentials model” that offers “a career pathway from certifications to post-secondary degrees, up to and including a master’s degree.” Forwarding thinking!
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WV I-68 Energy Corridor Extension Project “Creeping Along Slowly”

The Route 2 | I-68 Authority in West Virginia wants to expand Route 2 to four lanes from Parkersburg, WV to Chester, WV, and to extend Interstate 68 from I-79 near Morgantown, WV westward to WV Route 2 along the Ohio River Valley, some 73 miles (see WV Wants to Extend I-68 Another 73 Miles for Shale Industry). One of the reasons to build the $1 billion project? To handle more shale-related traffic. Here’s the latest…
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WV Commerce Secretary Says His State *Will* Get a Cracker Plant

It seems like MDN has reported on the possibility that an ethane cracker plant would get built somewhere in West Virginia forever–at least back to 2013 when then-Gov. Earl Ray Tomblin went to Europe looking for a cracker (see Did Gov Tomblin Find a European Investor for a WV Cracker Plant?). For a while it seemed there was a legit cracker project heading to Wood County, in the Parkersburg area, from Odebrecht/Braskem (see WV Announces Brazilian Company to Build Ethane Cracker Complex). That plan eventually petered out. But WV has not given up hope. In a visit to Jackson County on Wednesday, WV Commerce Secretary Ed Gaunch said he believes a cracker plant will come to the Mountain State. When?
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WV State Severance Tax Revenue Whacked by Low NatGas Price

Not long ago we highlighted the problem of falling severance tax revenue in West Virginia (see Falling WV Severance Tax Revenue a Problem for Gov. Justice). The state previously forecast severance tax revenues of $85 million for July, August and September. They got $59 million–or $26 million less. Unfortunately for WV the same downward trend continued in October.
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PA One of Two Finalists for “Massive” Ethane Storage Hub

The Appalachia Development Group (ADG) is leading an effort to build a ~$3.3 billion NGL storage hub in Appalachia. From the start, the thinking has been the storage hub would be located somewhere in West Virginia (see WV’s US Senators Lead the Charge to Build $10B NGL Storage Hub). But what’s this? ADG Chairman and CEO Steven Hedrick, speaking at a conference last week, confirmed potential sites for the project have been narrowed down to two. And one of those sites, according to “sources” (not Hedrick), is located in southwestern Pennsylvania.
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WVONGA Fall Meeting Wraps Up with Talks on Pot, Petchem

Last week the West Virginia Oil and Natural Gas Association (WVONGA) held its two-day 2019 Fall Meeting in Morgantown. We previously reported talk about WV’s new co-tenancy laws dominated the first day (see WVONGA Meeting: New Co-Tenancy Law Working, Still a Few Kinks). One of the key topics for the second day was the state’s medical cannabis program and how those in the oil and gas industry deal with it next year when a new state law goes into effect. The other key topic of the day was downstream (petrochemical) plants.
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WVONGA Meeting: New Co-Tenancy Law Working, Still a Few Kinks

West Virginia’s new co-tenancy law is working, according to speakers at the West Virginia Oil and Natural Gas Association (WVONGA) 2019 Fall Meeting held yesterday and today. Several speakers from major WV drillers, including Antero Resources and CNX Resources, sang the praises of the new co-tenancy law. WVONGA executive director Anne Blankenship also sang its praises, but said there’s still a few things to work out before the new law is “fully understood.”
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91% WV Gas Customers Get Lower Bills This Winter Thx to Marcellus

We often spot stories in the press about the price of natural gas for end-user customers going down. A utility here and a utility there will announce a rate reduction. Most of the time we don’t bring you those kinds of stories because they’re pretty common. However, we spotted a story that’s different. The Public Service Commission in West Virginia says natural gas utility companies that serve 91% of the gas customers in the state have filed requests to LOWER the rates they charge for their gas–thanks to abundant supplies of Marcellus Shale gas being extracted in the state.
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Cunningham’s WV Lions Paw Pad Roars, Produces 100K Bbl of Oil

The Big Injun is back in the news. In 2015 Cunningham Energy, a small oil driller based in West Virginia, struck oil in the Big Injun sandstone formation in Clay County, WV (see Cunningham Strikes Oil in West Virginia’s Big Injun Territory). In 2017 the company reported producing 20,000 barrels of oil from two new shallow horizontal oil wells located in Clay County, targeting the Big Injun (see Cunningham Energy Strikes More Oil in WV). Cunningham drilled two more wells on the same pad, the Lions Paw pad, and as of this week that 4-well pad has surpassed producing a total of 100,000 barrels of oil and 91 million cubic feet (MMcf) of “wet” natural gas.
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WVONGA Goes on Record: We Believe in Global Warming

We spotted an interesting op-ed column written by Anne Blakenship, executive director of the West Virginia Oil and Natural Gas Association (WVONGA). The column is titled “WVONGA committed to fighting climate change.” In it, Anne not only reiterates our industry’s long-running stance of being good environmental stewards, she also stats flatly that “climate change is a real, substantial challenge,” by which she means man-caused global warming. Houston, we may have a problem.
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Atlantic Coast Pipe Reps “Optimistic” Building Resumes Summer ’20

Yesterday MDN reported on Dominion Energy’s third quarter update from last Friday, a session in which CEO Tom Farrell commented the company’s commitment to building the Atlantic Coast Pipeline (ACP) is “unwavering” (see Dominion Energy 3Q – Commitment to Atlantic Coast Pipe “Unwavering”). Last Thursday a pair of ACP representatives gave an update to Upshur County, WV commissioners at one of their scheduled meetings. The reps did a deep dive into the details of what is currently blocking construction, and gave their best guess about when construction (in Upshur and elsewhere) will resume.
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Falling WV Severance Tax Revenue a Problem for Gov. Justice

We have, for years, brought you arguments about the superiority of an impact fee over a severance tax (see Allegheny Institute: PA Impact Fee is Better than a Severance Tax and Showdown: Comparing PA Impact Fee to WV Severance Tax). One of the problems with a severance tax is that when the price of gas is high, the tax revenues flow, but when the price of gas goes low, severance taxes on that gas dry up. That’s what’s happening in West Virginia right now–where they have a 5% severance tax on natural gas production.
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Mountaineer Makes Progress on WV Delivery Pipe; Who Will Feed It?

Mountaineer Gas it close to completing Phase One of its Eastern Panhandle Expansion project in West Virginia, a 22.5-mile, 10-inch-diameter steel pipeline from Morgan County to Berkeley County. The project is designed to deliver Marcellus/Utica natural gas via local distribution channels to a new $150 million industrial facility in Berkeley County, WV, and to provide “a redundant supply” of gas to some 6,000 local businesses and residents in the Tri-State area. The system is supposed to be fed by a short 3.5-mile pipeline from Columbia Gas running under the Potomac River from Maryland into WV.
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Proposed New PA Pipeline to Connect Rover Pipe to WV Power Plant

Tri-State Corridor Project (click for larger version)

It’s not often a new pipeline project crops up and slips by us. On May 31, Equitrans (formerly EQT Midstream) filed an official request with the Federal Energy Regulatory Commission (FERC) to build a 16.7-mile pipeline from southwest Pennsylvania into West Virginia in order to feed what will become WV’s very first natural gas-fired electric power plant (see WV NatGas Power Plant Gets Final Permits, Construction Begins Soon). The pipeline will connect to and feed gas from the mighty Rover Pipeline.
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