Railroads See Uptick in Hauling Marcellus/Utica NGLs, Frac Sand
Pipeline projects are facing still opposition from nutty/radical environmentalists who seem to have plenty of money to litigate and attempt to tie up projects for as long as possible. Ultimately, at least in most cases, pipelines prevail and get built. But it does take longer, no doubt about that. In the meantime, railroads have stepped in to take up some of the slack. We’re suckers for a good railroad story. We spotted one about rail giant CSX and how the company has seen an uptick in hauling natural gas liquids in the Marcellus/Utica region. Stuff like propane (LPG, or liquefied petroleum gas). CSX is also seeing an uptick in hauling frac sand. All of which points to one thing: drilling in the Marcellus/Utica has/is picking up…
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In 2012 the North Carolina legislature cleared the way for the state to allow horizontal fracking of shale (see 
Events related (or of interest) to the Marcellus and Utica Shale, primarily pro-drilling events.
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: More gas pipelines needed in OH for jobs, America’s energy future; Shell construction spawns 55 new jobs at concrete plant; Delaware Riverkeeper’s personal de-growth agenda; WV Northern Panhandle leads in production; NJ utilities upgrading thousands of miles of natgas pipelines; FL community switches to natgas garbage trucks; shale oil drillers scaling back some; will ‘lower for longer’ turn into ‘lower forever’?; radicals prepare to fight fracking in Quebec; Shell axing 400 jobs in Netherlands; and more!
Yesterday the Pennsylvania Senate voted 26-24 to pass a so-called compromise budget bill that adopts a Marcellus-killing severance tax. What’s most distressing about the situation is the betrayal of Senators like Gene Yaw, of northeastern PA. The bill not only raises taxes on drillers, slapping a severance tax on top of the existing impact fee, it also slaps a 5.7% gross receipt tax (GRT, or “usage tax”) on natural gas used by homes and businesses, meaning PA gas bills will go up starting August 1st (if the bill passes the House). What happens next? The bill has gone to the PA House for consideration. The pressure on the House, and Speaker Mike Turzai, is intense. The Senate has done a big disservice to the House by not getting agreement ahead of time. But we deal with the cards in our hand. What’s going to happen now?…
As part of the horrible severance tax bill the Pennsylvania Senate passed yesterday (see today’s companion story), Republican Senators placed into the bill what they hope is “an olive branch” (more like a withered twig) by including reforms to the regulatory process they say the drilling industry has been asking for. Senators included a provision to have third party contractors (people outside of the Dept. of Environmental Protection) review applications at the DEP, including permits for oil and gas drilling, when the DEP can’t review those applications in a timely manner. There’s also a provision that certain permits, like those granted to drillers for sediment and erosion, will automatically be granted if the DEP drags its feet and doesn’t grant the permit by the current, specified deadline (45 days, with a possible 15 day extension). Those permits are currently taking up to 200 days to be granted. Enough. If the DEP can’t get it done, the permit gets granted automatically or goes to someone on the outside who can get it done. There are other provisions in the severance tax bill as well. Of course these proposed changes have antis in an uproar. You see, “compromise” for antis and Democrats means “you do it all our way, and we give you nothing in return.” That Republicans actually want something in return for voting for a horrible tax bill is beyond belief for antis, who are now squealing like stuck pigs. Here’s what we’ve been able to find out about the proposed changes, the “olive branch” offered by traitorous Republicans, as part of the newly passed severance tax bill…
In June, a group of radical “environmental” organizations filed a lawsuit in the U.S. Court of Appeals for the Fourth Circuit against the West Virginia Dept. of Environmental Protection–for doing their job (see 
My how times change. Just last October EQT indicated that in the not-too-distant future the company would be primarily a Utica Shale driller (see 
Each month MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica turns around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Patterson’s rig count kept sinking month by month until June 2016 when things finally turned around. Since last June, Patterson has reactived and began running new rigs (a higher rig count) in each successive month. In April, Patterson completed a merger/buyout of Seventy Seven Energy, the new name for the former Chesapeake Oilfield Operating company (see 
MDN previously reported about problems experienced in Chester County, PA (suburb of Philadelphia) with underground horizontal directional drilling (HDD) by Sunoco Logistics Partners for its Mariner East 2 Pipeline project (see 
In January 2016, MDN told you about a $130 million, 30-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. The idea came about after Superstorm Sandy. How can NJNG create reliable natgas service in the region, preventing major disruptions like that which happened after Sandy? The “Southern Reliability Link” pipeline project was the result, and in January the NJ Board of Public Utilities (BPU) approved it 5-0 (see 
According to one of the top accounting/consulting firms in the world, PricewaterhouseCoopers (PwC), mergers & acquisitions (M&A) activity in the oil and gas sector in the U.S. went from being red hot in 1Q17 ($73.04 billion) to just hot in 2Q17 ($37.01 billion). While some in the financial (and oil/gas community) may view the weaker M&A numbers as “cause for alarm,” PwC says to calm down. “Place that number in a longer-term historical context and it’s clear that the market is still robust. The $37.01 billion of deals in the second quarter is the third highest second quarter during the past eight years. Additionally, with over $110 billion in announced deals during the first half of the year, 2017 is off to the strongest start in the past eight years.” If you rank the number of deals done, the Permian comes out on top in 2Q17, with $4.49 billion worth of deals. However, the might Marcellus trumps that. With only four deals (one of them the huge EQT/Rice Energy deal), the Marcellus saw $10.22 billion worth of M&A deals in 2Q17–top dog. Here’s the latest quarterly M&A in the oil and gas sector update from PwC…
Pennsylvania Senate Majority Leader Jake Corman and Senate President Pro Tempore Joe Scarnati have betrayed the Marcellus gas industry and should be tossed out on their rear-ends in the next election. Corman, Scarnati and other so-called Republicans in the PA Senate leadership have signed on to promote a severance tax plan to “close” the budget gap THEY CREATED by idiotically passing a bloated spending plan they couldn’t pay for. Now, caving to pressure from a tax-and-spend liberal media and tax-and-spend Democrat Party, PA Senate Republicans have opened a door that should never have been opened. PA’s Marcellus drillers already pay the equivalent of a 9.16% severance tax–highest in the country (called an impact fee). This new plan leaves the impact fee in place, AND places a severance tax on top of it, guaranteeing LESS drilling (and less tax money) for PA, not more. How utterly stupid is that? Last night 19 members of the PA Senate Appropriations Committee voted on a plan that, among other things, puts a 2 cents per thousand cubic feet severance tax on all natural gas produced, which, according to the wizards of smart in the Senate, will raise an extra $108 million. Today the package goes to the full Senate for a vote, where it is expected to pass. It then goes to the House. If a severance tax is passed (big if), Gov. Wolf can finally “check a box on a campaign promise” to give away other people’s money to teacher’s unions. Our only line of defense now is the steel backbone of PA House Speaker Mike Turzai and the House Republicans, to hold the line and reject the severance tax proposal coming from the Senate…