The Key to Unlocking PA’s NatGas Reserves: Pipelines
Once the slew of approved and under-construction pipeline projects in the Marcellus/Utica region are done, the M-U region will likely go from providing 20-25% of the nation’s total natural gas production to providing one-third of the country’s total natgas production. This astonishing story of production and pipelines in the northeast is really, at its core, a story about Pennsylvania. According to a recent Reuters article, at least five pipelines capable of transporting a combined 7 billion cubic feet per day (Bcf/d) of natgas from the PA Marcellus/Utica are scheduled to open in 2017, with five more transporting another 5 Bcf/d due for completion in 2018. Pipelines are the key to unlocking Pennsylvania’s vast natgas reserves…
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Eighteen-year-old Sophie Kivlehan has been brainwashed by her parents and grandparents, big believers in the myth of man-made global warming, since she was a tot. Her grandpa, Jim Hansen (astro-physicist at Columbia University) is a smart guy–“perhaps one of the worlds’ most well-known climate scientists.” Grandpa Jim did a good job of making sure young Sophie learned her lessons well–about the evilness of fossil fuels and how Mom Earth is ready to toast–any minute now, thanks to burning fossil fuels. Of course such beliefs must, of necessity, disregard hard scientific facts/data that show temps around Mom Earth aren’t going up and haven’t been for the past 20 years. It’s all about what “might” happen and what’s coming “just around the corner.” All based on cockamamie computer models. The same models can’t predict temperatures and the weather accurately for next week–but boy can they predict that the earth is about to fry. Any year now. But back to you Sophie. She’s decided four months in office for President Trump is long enough. He’s not doing his job to combat mythical global warming, so she’s suing him–hoping the courts will make him do it. Ah, Sophie darlin’, when was the last time anyone made Donald Trump do anything? Of course, Sophie’s lawsuit (really backed by Big Green) is nothing more than a sick publicity stunt…
The National Association of Regulatory Utility Commissioners has just established a new Presidential Natural Gas Access and Expansion Task Force. Its purpose? To figure out how to get cheap, abundant, clean-burning natural gas to people that don’t have it now–those in poor and rural communities. According to NARUC, many rural communities (which comprise residential, industrial and commercial customers) lack access to low-cost natural gas because of infrastructure issues. They don’t have local distribution pipelines. Those communities rely on bottled propane, heating oil and other more expensive fuels. Why not give them cheap natural gas? That’s the aim–figure out how to get it done. The cool thing is that NARUC is headed up by Pennsylvania Public Utilities Commission member Rob Powelson–the same guy under consideration to become a new FERC Commissioner. Go Rob! Figure out how to spread cheap Marcellus/Utica natgas to as many people as possible…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Lordstown OH project sparks nearly $1B investment in Mahoning Valley; putting Shell cracker project in perspective; EIA says natgas #1 source of electricity this summer; big oil embraces Silicon Valley; 60% of US LNG supplies will go to Europe; climate alarmists use faulty science and bald assertions, demand end of fossil fuels; India wants a gas-based economy; and more!
In May 2016, MDN brought you the news that a researcher at West Virginia University believes a natural gas liquids (NGL) storage hub is what the Marcellus/Utica region really needs (see 
Yesterday MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report–the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. This latest report shows that an upswing in production–for both natural gas and oil–will continue over the next 30 days. In fact, get ready to break new records! Output in the Marcellus/Utica region is set to once again reach new highs. In the Marcellus, output will come within striking distance of 19 billion cubic feet per day (Bcf/d). Astonishing! In the Utica, output will hit 4.2 Bcf/d. Shale oil output across all seven major plays is set to hit 5.2 million barrels per day, with almost all of the increase coming from the Permian and Eagle Ford plays in Texas. Buckle up and get ready for another wild ride in the coming month…
Did you know that the second largest U.S. natural gas exploration and production (E&P) company as measured by how much natural gas it produces is Southwestern Energy? Chesapeake Energy is #1, and Southwestern is #2. Who woulda thunk? And did you know that just five years ago Southwestern’s name was synonymous not with the Marcellus/Utica where they operate today, but with the Fayetteville Shale play in Arkansas? Over the past five years Southwestern has refocused its drilling efforts here in the Marcellus/Utica. Like most drillers across the country, 2016 was a rocky year for Southwestern. They idled their rigs during the first part of the year and ended up losing money (see 
As MDN reported last week, the battle lines have been drawn and both sides have come out swinging in a battle over whether ratepayers should bail out economically failing nuclear power plants (see 
Duke Energy Ohio, an LDC or “local distribution company” serves some half a million customers with natural gas in Ohio. The company has a 12-mile pipeline to flow the gas it needs, to move it from one point to another in Hamilton County (Cincinnati), in the southwest corner of the state. The Duke pipeline has been in service since the 1950s. Duke needs to replace that pipe or some of those half million Duke customers won’t get natural gas any more. Because anything to do with “fracking” or “pipelines” has been so thoroughly bastardized by the media and anti-fossil fuel protesters, there has been, of course, opposition to Duke’s plan. So Duke “listened” and has scaled back their plans. Instead of building a 30-inch gas pipeline running at 600 psi (pounds per square inch), the revised plan calls for a 20-inch pipeline running at 400 psi (see 
Nuverra Environmental Solutions is one of the largest companies in the United States that handles transportation and disposal of shale drilling wastewater and leftover rock and dirt from drilling. The company has major operations in the Marcellus/Utica region. In January the company, going through tough economic times, was de-listed from the New York Stock Exchange (see 
Late last week the Federal Energy Regulatory Commission (FERC) released its annual “State of the Markets Report” for 2016 (full copy below). Among the choice tidbits we found this statement: “Natural gas production from the Marcellus and Utica shales accounted for 30 percent of the U.S. total in 2016, due to the prolific nature of these formations, relatively low production costs, and proximity to the large Northeast markets. In addition, new pipeline infrastructure reduced bottlenecks allowing additional gas to reach the demand centers.” We also spotted this interesting factoid: “In 2016, 7.1 Bcf of FERC jurisdictional pipeline capacity went into service, with 43 percent designed to move natural gas from Appalachia to markets in the Northeast and Midwest. Staff expects the new natural gas pipeline capacity to continue contributing towards shrinking price differentials between regions throughout the U.S., and help keep natural gas prices relatively low.” Translation: hang in there Marcellus/Utica drillers–prices are going to rise soon because of these new pipelines. Here’s the update from FERC…
Lately we’ve noticed a plethora of stories in mainstream media about the oil and gas industry spending more money this year. That certainly seems to jibe with our own anecdotal observations. In reporting 2016 results and drillers’ comments about what to expect in 2017, almost all of the companies we’ve reported on have said their spending this year will go up. And that’s a good thing. We now have something better than just anecdotal evidence. Energy law firm Haynes and Boone recently completed a survey of oil and gas borrowers and lenders–drillers, service companies, and banks–to gauge their predictions about “borrowing base redeterminations” and spending in 2017. What is a borrowing base? A company’s borrowing base is the value of its assets. In the case of drillers, it is the value of the leases and oil/gas wells they own. Those assets are used as collateral to back up loans and IOUs. A lower borrowing base means they must borrow less money, and they will pay more in interest for the money they do borrow. Lower borrowing base = bad, higher borrowing base = good. Each spring and fall (twice a year) banks take a look and “redetermine” or reevaluate the value of those assets. What did the Haynes and Boone survey find about bankers’ and drillers’ predictions on spring redeterminations of borrowing bases? That the borrowing base for most drillers will either stay the same, or increase slightly. The survey also found a vast majority of drillers plan to spend more money this year (89%). Here’s the encouraging results…
Big Green is a big business. Radical enviros have worked hard over the eight years of Obama’s reign of terror to build and expand the Environmental Protection Agency far beyond its originally intended purpose. The Obamadroids’ abuses via the EPA were breathtaking–many of which were chronicled here on MDN. Things like the odious and misnamed Clean Power Plan, the fruity Waters of the United States (WOTUS) regulation. Capturing every last molecule of so-called fugitive methane from oil and gas operations. The EPA became the modern day environmental equivalent of the Gestapo. So no wonder the environuts are apoplectic over President Trump’s mission to put the EPA on a diet and shrink it back to its pre-regulatory-obese size. But don’t think for a minute that the radicals will just stand by and watch it happen. They are fighting and fighting hard to prevent the enormously bloated agency from shedding budget, people, and regulations. We stumbled across their game plan for how they intend to fight Trump every inch of the way…