Sierra Club Files 2nd Lawsuit Against Pipeline Thru NJ Scrub Pines
In September, members of the New Jersey Pinelands Commission voted to approve a $130 million, 28-mile natural gas pipeline proposed by New Jersey Natural Gas (NJNG) to connect NJNG’s distribution system serving customers in Ocean, Burlington and Monmouth counties (in NJ) and the interstate pipeline system adjacent to the New Jersey Turnpike (see Pinelands Commission Approves Pipeline Thru NJ Scrub Pines). Antis at the September meeting, many of them members of the far-left Sierra Club, behaved like spoiled rotten children–using “whistles, cowbells and shouts,” and holding “Pinocchio noses to their faces” to try and bully commissioners into voting “no” on the plan. Unfortunately the spoiled rotten children, via the Sierra Club, have lots of money to litigate. They did it before, forcing a full vote by the Pinelands Commission (see Court Setback for NJ Pipeline Slated to Run Through Scrub Pines). They’re doing it again. On Friday the Sierra Club filed a second challenge against the pipeline plan. This time the lawsuit was filed with the NJ state appeals court, seeking to overturn the vote in September to approve the project…
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On Monday, experts said that closing the Indian Point nuclear plant on the Hudson River in New York will cause a loss of power to the local electric grid feeding New York City. However, they also said natural gas electric generation will fill the void left by the old and uneconomic nuke plant. That is, Marcellus Shale gas will save the day–yaaah! Entergy, the plant owner, is not all that thrilled that natural gas has won this round. An Entergy spokesman at the event could barely conceal his venom, warning gas is an “intermittent facility” with “consequences.” Oooooo. We’re scared. Of course it was nothing more than sour grapes that nukes can’t compete without massive increases for ratepayers to pay the owners of the nuke plants. We live in the U.S., not the U.S.S.R. We have free enterprise, capitalism, freedom and liberty–not a command-and-control economy. Entergy wasn’t the only one spouting nightmare scenarios when (not if) natural gas takes over. Antis don’t want low carbon, low cost natural gas either–because it’s an evil fossil fuel. Antis are looking for a solution, any solution, other than gas-fired power generation, to fill the void that will be left by Indian Point when it closes. Antis have even gotten behind a plan to dig up 333 miles of precious Mom Earth to lay a power cable from Canada through NY. To which we ask: What’s the difference in digging up the ground to lay a power cable or digging up the ground to lay a gas pipeline? Answer: None. Which points out antis’ rank hypocrisy on the issue of pipelines…
It seems like forever we’ve been telling MDN readers that the Attorney General in the State of New York, Eric Schneiderman, is corrupt. We’ve written dozens of stories about Schneiderman (
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Plastic dreams becoming real in Appalachia; former CPV exec trial in NY gets under way; proxy firms tell investors to vote “yes” on EQT/Rice merger; anti groups say Virginia Water Control Bod must deny water permits for pipeline projects; natgas industry seeks more pipelines in New England; more on #ExxonKnew; OPEC who?; rig counts decline; and more!
Cabot Oil & Gas, one of our favorite Marcellus drillers, released its third quarter 2017 update on Friday. Some of the things we learn from the report and the analyst phone call held by Cabot’s top brass: Production grew another 12% during 3Q17. In the Marcellus, Cabot’s natural gas production averaged just over 2 billion cubic feet per day gross (Bcf/d). If you use U.S. Energy Information Administration numbers from the most recent monthly drilling report, Cabot’s 2 Bcf/d equals 8% of all Marcellus production, and 3.3% of all shale gas production in the U.S! That’s truly amazing, considering it all comes from Susquehanna County (with a couple of wells in neighboring Wyoming County), in northeast PA. Profitability returned in 3Q17 with net income of $32 million, versus a net loss of $16.7 million in 3Q16. In the Marcellus, Cabot drilled and completed 13 net wells and placed online into production 15 net wells. They now have 49 “fourth generation” wells online and producing at an average of 4.4 Bcf per 1,000 feet. They also have 12 “fifth generation” wells online. One of the highlights for Cabot during 3Q17 was the announcement that Williams is now building their $3 billion, 198-mile Atlantic Sunrise natural gas pipeline project. Cabot says when the pipeline is done in mid-2018, Cabot will flow 1 Bcf/d of gas to new markets. Cha ching! New markets equal higher prices and more profitability for the company. Below is the full 3Q17 update, followed by remarks from CEO Dan Dinges made during the analyst call…
Southwestern Energy, one of the biggest drillers in the Marcellus/Utica, delivered their third quarter 2017 update on Friday. Financially speaking the company displayed a remarkable turnaround. In 3Q15 Southwestern lost $1.8 billion! In 3Q16 Southwestern lost $735 million–trimming loses in half. In 3Q17, the company made a profit of $43 million, a swing of more than 3/4 of a billion dollars year over year and a swing of nearly $2 billion if you go back to 2015. Production in the Marcellus/Utica soared in 3Q17, up 26% over last year–to 153 billion cubic feet equivalent (Bcfe). That works out to 1.7 Bcfe per day. Southwestern has a lot of irons in the fire. They’ve drilled their second Utica well (happy with the results). They’re actively drilling in northeast PA, southwest PA and West Virginia. Overall, across the entire Marcellus/Utica patch, Southwestern drilled 43 wells, completed 25 wells and brought online into production 33 wells–in the past three months. The company also began work on a water infrastructure project–in the Panhandle area of West Virginia. The water project is expected to reduce well completion costs by $500,000 per well beginning in late 2018, and lower Southwestern’s break-even gas price by $0.25 per Mcfe. Yeah, a lot of irons. And they own a lot of acreage throughout the play. But the company does a good job in juggling all of the competing priorities. Below is the full 3Q17 update, followed by comments from Southwestern’s senior VP of E&P operations, John Bergeron…
It looks like all of the agitating and nasty letters and lobbying by corporate raiders has had an effect on EQT. In June, EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see 
Sunoco Logistics has been slapped down in a ruling by the Pennsylvania Public Utility Service (PUC) with respect to a valve station, part of the Mariner East 2 (ME2) pipeline project. In March, MDN told you about an attempt by liberal anti-pipeliners in West Goshen (Chester County) to block the ME2 project (see 
For some reason Tom Wolf has successfully cultivated a public persona of a genteel, non-partisan businessman–from the very beginning of his race for the governor’s chair even through today. We weren’t fooled, but many were. He’s proven to be just what we thought he was: a vicious partisan liberal, a spoiled rich kid who grew up to be a spoiled rich adult. Someone who throws a fit when he doesn’t get his own way. The severance tax is a perfect example. From his first day in office, Wolf lobbied hard for a severance tax. Such a tax was thought to be an easy way to pour billions of dollars into “education.” It was Wolf’s quid pro quo with Philadelphia teacher’s unions. They voted him into office, and he would repay them with big money–getting it from an “easy mark”–the Marcellus industry. Turns out the industry wasn’t such an easy mark after all. It has been a long, bloody fight, but the fight (for this year) is now over and Wolf has lost, third year in a row, to get a severance tax passed. His anger bubbled over last week and Wolf revealed his true character. When asked about the budget process, Wolf’s office issued this statement about House Republicans, attributed to Wolf: their opposition to a severance tax “has revealed the worst of Harrisburg.” In other words, Wolf just called House Republicans, his principled opponents, “the worst of Harrisburg.” His comment is the political equivalent of a five year-old stomping his feet and throwing himself on the floor when he doesn’t get his own way. Thank God for House Republicans who held the line against this insane severance tax, and shame on Senate Republicans who turned traitor. Hopefully they’ve learned a lesson from their courageous House colleagues about holding the line…
Last week the University of Pennsylvania published “Pennsylvania’s Gas Decade,” a study looking at the impact of the Marcellus Shale on the state’s utility customers over a ten-year period, from 2007-2016 (full copy below). The study shows that on average, PA customers now pay 40% less for natural gas than they did ten years ago. The study also shows electricity customers are paying less–thanks to the Marcellus. Before Marcellus drilling began, PA produced 1% of the nation’s natural gas supplies. Today? PA produces 16% of our country’s natgas supplies. Thank you Marcellus! The study’s author predicts the trend toward lower natgas prices for PA residents will reverse–eventually. Why? The Federal Energy Regulatory Commission has approved a staggering 53 interstate pipeline projects that cross PA (more than twice that of any other state). Once/if those projects are built, more gas will flow out of the state, meaning prices for gas will rise. Hey, drillers aren’t sticking around in PA just to break even or lose money. They are in the state to make money, and part of making money is getting the gas to other markets. In the meantime, before the plethora of pipelines are built, PA residents should enjoy the low prices they’re paying…
Several weeks ago U.S. Energy Secretary Rick Perry sent a letter to the Federal Energy Regulatory Commission (FERC) directing the agency to complete action on a “grid resiliency” pricing rule within 60 days. The proposed rule Perry proffered to FERC would put in place regulations that favor electric generating plants powered by coal and nuclear. That is, it would allow unprofitable ventures to pass along new costs, making them profitable–in the name of protecting the electric grid. The theory Perry (and by extension President Trump) subscribe to is that if the free market drives out coal and nuke plants, the electric grid would be “vulnerable” to far fewer sources to power it. If coal and nukes are all but gone, and all of sudden there’s a natural gas shortage, or prices spike for natural gas, it would endanger the electric supply in this country. On one side of the argument are those who believe the free market sometimes needs a helping hand (via regulation), and on the other those who believe the free market will sort it all out and we are not vulnerable. It’s no surprise that the coal and nuclear lobbies are celebrating Perry’s action, and the oil & gas lobby along with electric grid operators, are not (see 
Events related (or of interest) to the Marcellus and Utica Shale, primarily pro-drilling events.
The U.S. District Court in Akron, OH has just made a major ruling that affects all Utica landowners and drillers. In 2015, the Ohio Supreme Court accepted a case that will sound familiar to readers of MDN. The case, known as Lutz v. Chesapeake Appalachia, is about whether or not drillers (Chesapeake in this case) are allowed to deduct certain post-production costs from landowner royalty checks. The Ohio Supremes were asked to decide whether Ohio follows the “at the well” rule, which permits the deduction of post-production costs, or if the state follows the “marketable product” rule, which limits the deduction of post-production costs under certain circumstances. The Supremes came down off Mount Olympus in November 2016 to render their verdict (see 
Yesterday one of the biggest Marcellus/Utica drillers, EQT, issued their third quarter 2017 update. EQT will soon be THE biggest Marcellus/Utica driller, indeed the biggest shale gas producer in the United States (surpassing Chesapeake Energy), once a deal to buy Rice Energy consummates later this year. But what about just EQT in 3Q17? The company reports making a profit of $23.3 million during the quarter, versus losing $8 million in the same quarter last year. EQT produced 205.1 billion cubic feet equivalent (Bcfe) of natural gas during the quarter–which works out to be 2.3 Bcfe per day. Here are some interesting stats from the update: Since EQT began drilling shale wells, they have drilled (called “spud” in the industry) 1,288 shale wells. Of those wells drilled, 1,060 are online, making the company money. Below we have the full update, a copy of the transcript from the analyst phone call, the latest slide deck loaded with charts and graphs, and a bit of amusing analysis about the update/phone call…