• Marcellus & Utica Shale Story Links: Mon, May 15, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Marcellus/Utica takeaway capacity to the East; Antero donates money to Monroe County, OH EMA; fracking topic of May 16 forum in Cleveland; Scranton rail trail closed while pipeline gets installed; conventional o&g production bigger than you may think; Range Resources hits 10 year mark in Southpointe, PA; America’s natgas export machine cranks up; Trump strikes deal to export more natgas to China; Cheniere in talks to ship more LNG to China; ex-CIA guy says we need to “wean” Europe off Russian natgas; OPEC begs U.S. shale to stop pumping so much oil; and more! Read More “Marcellus & Utica Shale Story Links: Mon, May 15, 2017”

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    ET Disputes Ohio EPA Action on Rover, Says there Is No $431K Fine

    Somebody somewhere isn’t telling the truth. Earlier this week MDN brought you the news that Energy Transfer’s Rover Pipeline project has been fined by the Ohio Environmental Protection Agency (OEPA) for $431,000 for “18 incidents involving mud spills from drilling, stormwater pollution and open burning at Rover pipeline construction sites have been reported between late March and Monday” (see Ohio EPA Slaps Rover Pipe with $431K Fine for Spills, Other Issues). Based on OEPA’s report to the Federal Energy Regulatory Commission, FERC then told Rover to stop any new horizontal drilling underground (see FERC Slaps Rover Pipeline with Stop Drilling Order). But a recently filed report with FERC for the Rover project indicates only three spills and takes the tone it’s no big deal. And, a spokeswoman for Energy Transfer told the ace reporters at Natural Gas Intelligence that Rover has not been fined by the OEPA…
    Read More “ET Disputes Ohio EPA Action on Rover, Says there Is No $431K Fine”

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    WV/OH Senators Intro Bill to Study Appalachian Ethane Storage Hub

    Sen. Shelley Moore Capito

    Both West Virginia U.S. Senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat), along with Ohio Sen. Rob Portman, have introduced and co-sponsored a bill to study if and how an ethane storage hub can be constructed in the Marcellus/Utica region. According to Brian Anderson, director of WVU’s Energy Institute, without ethane storage (and pipelines) the Marcellus/Utica region risks seeing its abundant ethane leave the area, mostly heading to the Gulf Coast. We need that ethane here, in our area. Others have also taken up the cause, making the point that West Virginia, Ohio, Pennsylvania and Kentucky need to band together to build such a project (see WV, OH, PA, KY Should Cooperate on $10B NGL Storage Hub). You mean, set aside competition between states and cooperate? Yes! Why? Such a project will cost an estimated $10 billion–far more than a single ethane cracker project. No one state can do it on its own. And that’s where this new bill comes in. The bill proposes a study be done by the Departments of Energy and Commerce within the next two years to analyze potential locations based on favorable geology, the economic feasibility and benefits of the project, infrastructure, and proximity to production sites and potential industrial consumers…
    Read More “WV/OH Senators Intro Bill to Study Appalachian Ethane Storage Hub”

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    The Coming Clash Between DC and NY re Pipeline Approvals

    Yesterday MDN brought you the news that Williams is talking with White House officials about federal intervention into the illegal refusal by the New York Dept. of Environmental Conservation (DEC) to issue water crossing permits for their Constitution Pipeline project (see Williams Tries an End-Run Around NY DEC for Constitution Permit). As we explained in that post, NY has authority granted to it by the federal government to award stream crossing permits under Section 401 of the federal Clean Water Act. The DEC, for purely political reasons and under the direction of Gov. Andrew Cuomo, has refused to do so–not only for the Constitution, but also for a second major pipeline project in the western part of the state (NFG’s Northern Access Pipeline project). According to an analyst from Height Securities, there is “political will” in Washington “to strip New York of its permitting authority.” Andrew Cuomo has gone rogue. He ignores federal law. Will Washington allow NY to continue thumbing its nose at the law? It looks like this is a battle royale between Donald Trump and Andrew Cuomo. Our chips are on Trump… Read More “The Coming Clash Between DC and NY re Pipeline Approvals”

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    PA Roars Its Approval of Atlantic Sunrise Pipeline with Petition, Comments

    While Williams is battling New York State in court, and in Washington, to get its Constitution Pipeline approved, another Williams project in neighboring Pennsylvania is much closer to construction–the Atlantic Sunrise Pipeline project. Atlantic Sunrise is a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County. The Federal Energy Regulatory Commission (FERC) gave its final seal of approval for the project in February (see Atlantic Sunrise Pipeline Gets Final Approval by FERC). But like NY, PA is holding up the project. The PA Dept. of Environmental Protection (DEP) has not, so far, granted necessary permits to allow construction to begin. Williams embarked on a public relations campaign to enlist support to pressure PA Gov. Tom Wolf and the DEP to grant the permits so construction can begin. The DEP is holding up this project and the 8,000 jobs it will create during construction. Yesterday, Williams delivered a petition to Gov. Wolf with the signatures of 3,000 people supporting the project. Will it be enough to get Wolf and the DEP off their collective rear ends to issue the permits?…
    Read More “PA Roars Its Approval of Atlantic Sunrise Pipeline with Petition, Comments”

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    EV Energy Partners 1Q17 – $51M Loss, Borrowing Base Reduced $75M

    In March 2016, MDN reported that EV Energy Partners (EVEP)–an upstream master limited partnership (MLP) created by EnerVest that holds enormous acreage in the Ohio Utica Shale play–was in survival mode (see EV Energy Partners: No New Utica Wells in 2016, in Survival Mode). In April 2016 the company quit paying unit holders (see Problem: EV Energy Partners Quits Paying Unit Holders). It’s been a while since we’ve last checked in on the company. EVEP released their first quarter 2017 update and held an earnings call earlier this week. It appears to us like the company continues to struggle. There is no mention of the Marcellus/Utica in the official update, although there is a brief mention on the earnings call that the company has sold 1,200 wells “throughout Appalachia.” We’re pretty sure most, if not all, of those wells are conventional (vertical only) wells. The company’s attention is mostly on the Eagle Ford (TX) Shale play–an oil play. As for EVEP’s financials, the company reported losing $51 million in 1Q17 versus losing $29 million in 1Q16. They also report their borrowing base (the estimated value of assets against which they can borrow money) has been reduced by $75 million–from $450 million to $375 million. Here’s the full update, along with a brief portion of the earnings call… Read More “EV Energy Partners 1Q17 – $51M Loss, Borrowing Base Reduced $75M”

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    Williams is Done Buying & Selling Assets – For Now

    Williams CEO Alan Armstrong sat down with a Reuters reporter earlier this week to discuss the company and its deal making over the past few years, and what lies ahead. And boy oh boy, what a ride it has been! In June 2014, Williams cut a deal to buy out (and merge in) Access Midstream for $6 billion (see Big News: Williams Partners Buying Access Midstream for $6B). Access, with major pipeline gathering systems in the Marcellus/Utica, was the spun-off former Chesapeake Midstream. Under intense pressure from corporate raiders on its board, Williams agreed to sell itself to Energy Transfer in 2015 (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). In June 2016, the $20 billion takeover of Williams fell apart (see Dead as a Doornail: ETE Terminates Merger with Williams). In August 2016, Williams sold off its Canadian assets for $1 billion (see Bold Move – Williams Selling Canadian Assets for $1B). In March 2017, Williams significantly increased its ownership share in a pipeline gathering system in northeastern PA in a complex deal where it sold off its share in another pipeline system along the New Mexico/Texas border (see Williams Closes Deal to Increase Ownership in NEPA Pipeline System). And in April, Williams sold it’s Gulf Coast cracker plant for $2.1 billion (see Williams Sells Gulf Coast Cracker Plant to NOVA Chemicals). Whew. You can hardly keep up with all! Armstrong says the dealmaking is now done–at least for a while. The company likes what it has and will concentrate on making the most of their current assets… Read More “Williams is Done Buying & Selling Assets – For Now”

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    Natgas Replaced Coal in Northeast Powergen in Last 10 Yrs

    To say that how electricity in the Northeast gets generated has shifted dramatically over the past 10 years is an understatement. In the nine Northeast states, natural gas doubled its share of the region’s total generation to 41% in 2016, up from 23% in 2006. Coal-fired generation fell from 31% to 11% of generation over the same period. Nuclear-powered generation as a share of total generation remained relatively constant near 34%. And so-called renewables like wind and solar are almost undetectable as a percentage of electricity generation. Which means Andrew Cuomo’s insistence that New York get 50% of its electricity from “renewable” sources by 2030 is not only fantasy–it’s lunacy. The man is a crackpot if he thinks that will actually happen. Anyhow, the point of this post, which contains an article recently released by our favorite government agency, the Energy Information Administration, is that over the past 10 years, natural gas has essentially replaced coal in electric generation in the Northeast… Read More “Natgas Replaced Coal in Northeast Powergen in Last 10 Yrs”

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    New England May Experience Electricity Shortage – This Summer

    New England, with its opposition to new natural gas pipelines, is shooting itself in the head when it comes to electricity supplies. A recent announcement from ISO New England, charged with maintaining electric reliability for New England’s power grid, says everything should be fine this summer when it comes to electric generation–BUT “forecasts show possibility of occasional tight system conditions.” Rolling blackouts anyone? Some 700 megawatts (MW) of expected new resources “are delayed and may not be available this summer.” Natgas-fired electric generators in New England have been begging and pleading for pipelines to bring more natural gas to the region–to feed their plants. Yet the dopes in New England, like Sen. Elizabeth “Pocahontas” Warren and Massachusetts Attorney General Maura Healy, keep shutting them out…
    Read More “New England May Experience Electricity Shortage – This Summer”

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    Unhinged Left Attacks One of its Own on Issue of ‘Climate Change’

    Bret Stephens, until recently, was a writer for the Wall Street Journal. He’s your typical liberal–Democrat and big believer in man-made global warming hysteria. Stephens recently left the WSJ and joined the New York Times. His very first column in the Times, published at the end of April, tackles the issue of “the science is settled” when it comes to “climate change.” Stephens does not say he’s flipped sides and not does not believe in man-made global warming–he simply wants to acknowledge that algorithms and suppositions change, and it’s better to be honest about it now, rather than have some of your theories proven wrong later–leading to the belief that the entire meme is wrong. Stephens is the kind of intellectual lefty lib that, quite frankly, we respect. He’s willing to deal honestly with facts–not ignore them and pretend they don’t exist. And for that, his own posse turned around and viciously attacked him. Stephens, a “never Trumper” was used to being attacked by the right, but the attacks he’s now getting from the left are “perhaps worse” than those he ever received from the right…
    Read More “Unhinged Left Attacks One of its Own on Issue of ‘Climate Change’”

  • Marcellus & Utica Shale Story Links: Fri, May 12, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Can Southeast infrastructure handle Southeast demand growth?; why more coal, oil and natgas investments are needed; coal and nuke plants think Trump just saved their bacon; energy revolutions hidden in plain sight; Senate GOP defections sink effort to repeal BLM venting, flaring rule; US shale spending dwarf competition; Sabine Pass exports rise; UK to become third world country?…considers nationalizing energy companies & frack ban; and more! Read More “Marcellus & Utica Shale Story Links: Fri, May 12, 2017”

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    FERC Slaps Rover Pipeline with Stop Drilling Order

    You can’t see we didn’t warn Rover Pipeline. In our story yesterday about the Ohio EPA’s frustration with Rover over regular spills of drilling mud (and other violations), we pointed out that the OEPA’s language is “Not good news for Rover, when one of the main state regulators (that can stop the project) is leveling criticisms like that” (see Ohio EPA Slaps Rover Pipe with $431K Fine for Spills, Other Issues). We also said, in the last sentence of that post, “Rover needs to get this situation under control before an emergency stop work order is slapped on them.” Such an order, more or less, has now been issued by the Federal Energy Regulatory Commission (FERC). Yesterday FERC sent a letter (copy below) to Rover telling the pipeline it can no longer drill horizontally underground for the pipeline in some locations–until it complies with certain measures outlined by FERC and gets FERC staff sign-off every step of the way. In other words, Rover has likely just been delayed–due to its own haste and by not displaying the proper contrite attitude toward the OEPA. No one to blame but themselves…
    Read More “FERC Slaps Rover Pipeline with Stop Drilling Order”

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    Williams Tries an End-Run Around NY DEC for Constitution Permit

    Does Williams have an “ace in the hole” with respect to the Constitution Pipeline? The Constitution, a ~$900 million, 124-mile pipeline planned to run from Susquehanna County, PA into Upstate New York, was approved by the Federal Energy Regulatory Commission (FERC) in December 2014 (see FERC Issues Final Approval for Constitution Pipeline in PA/NY). After a year and a half of delays from the New York State Dept. of Conservation (DEC), an organization now corrupted by Gov. Andrew Cuomo, the DEC capriciously denied stream crossing permits for the project (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). Williams, the builder of the project, subsequently sued in federal court to force the state to issue the permits. The outcome of that lawsuit is due any month now (see Constitution Pipeline Still Waiting on “Biggie” Court Decision). However, Williams is now attempting another strategy, parallel to their lawsuit, that may grant them game, set and match. The stream crossing permits withheld by the NY DEC are permits issued under Section 401 of the federal Clean Water Act. The DEC has the (delegated from the federal government) responsibility for issuing or denying Water Quality Certification (WQC) under Section 401. What if the feds were to snatch back that responsibility for themselves? Williams is asking the Trump White House to have the Army Corps of Engineers step in and grant the WQC for the Constitution under Section 401–as a replacement or substitute for the DEC. Such a move is allowed under the law–if a state refuses to act within a “reasonable” time period. If the Army Corps does step in and grant the Constitution a WQC, it would, in a word, emasculate the DEC and strip them of a great deal of their power–something we’ve previously warned about (see Bloomberg Predicts Court Will Strip NY’s Right to Stop Constitution). Will it work?… Read More “Williams Tries an End-Run Around NY DEC for Constitution Permit”

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    Crestwood Drops Seneca Lake Natgas Storage Plan, Keeps LPG Plan

    Seneca Lake LPG facility – click for larger version

    MDN has extensively covered the fight to get the Seneca Lake Storage Project permissioned. In 2009 Inergy filed a request to convert a depleted salt cavern along the shore of Seneca Lake (in Schuyler County, NY, near Watkins Glen) into a propane/natural gas storage facility. Inergy was later bought by and merged into Crestwood Midstream, and Crestwood Midstream later became Crestwood Equity. The New York Dept. of Environmental Conservation (DEC) has been sitting on its hands from the beginning, refusing to grant the necessary permits to allow the facility to open. Sound familiar? Same old delay and later deny strategy from man-child Andrew Cuomo. The plan, from the beginning, is to store both natural gas and LPG–or liquefied petroleum gas, commonly known as propane. Due to the ongoing delay from the NY DEC, last May the Federal Energy Regulatory Commission (FERC), which would oversee construction of the project, granted a two-year extension for the project to be completed (see Stalled Seneca Lake Propane Storage Project Gets FERC Extension). In a regular report filed with FERC on May 9, Crestwood’s Arlington Storage subsidiary (the company on paper attempting to build the facility) withdrew its request to build the portion of the project that would store natural gas–the “Gallery 2” project. However, Crestwood/Arlington Storage is still pushing forward with LPG (propane) storage at the Seneca Lake facility. A small-but-dedicated group of nutjob antis are heralding this as some sort of “tremendous victory.” It is nothing of the sort. The main part of the project has always been about storing propane, not natural gas… Read More “Crestwood Drops Seneca Lake Natgas Storage Plan, Keeps LPG Plan”

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    Rex Energy 1Q17 Full Update – Swings to Black, Drilling Picks Up

    In April, Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), issued an operational update (see Rex Energy 1Q17: Production Drops 8.5%). Earlier this week the company issued a full 1Q17 update. What does it show? Rex swung from losing $62 million in 1Q16 to making $2.1 million in 1Q17–quite a turnaround! This update also includes a fuller look at the drilling that did happen in 1Q17, and what the company plans for the balance of 2017. In Rex’s Legacy Butler Operated Area (Butler County, PA), the company has begun drilling 4 wells on a single pad and plans to have them completed and online in 3Q17. In Rex’s Moraine East Area (also Butler County) the company drilled 7 gross (3.3 net) wells and completed 4 gross (1.4 net) wells in 1Q17. In addition, Rex had 12 gross (5.5 net) wells awaiting completion at the end of 1Q17. In Rex’s Warrior North Area (Carroll County, OH), the company plans to drill 12 gross (10.2 net) wells by the end of 2017, with most of them not going online until 2018. Below is the full update, along with select portions of the earnings call where Rex’s CEO shares some interesting insights… Read More “Rex Energy 1Q17 Full Update – Swings to Black, Drilling Picks Up”

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    Gulfport Energy 1Q17 – Spud 26, Completed 5 Utica Wells

    Gulfport Energy turned in their first quarter 2017 update earlier this week–a very impressive report. Gulfport reports producing an average 849.6 million cubic feet equivalent (MMcfe) per day in 1Q17–8% higher than 4Q16 and 23% higher than 1Q16. They scored an average price of $2.68 per thousand cubic feet (Mcf) for the gas they sold. Perhaps most impressively, the company went from losing $242 million in 1Q16 to making a profit of $154 million in 1Q17–a swing of $396 million. Gulfport is a big Utica Shale driller. During 1Q17, the company spud (began to drill) 26 new Utica wells. The average length of each well was 8,145 feet. They hooked up 5 Utica wells to pipelines. On an earnings call, Gulfport CEO Michael Moore said 38% of their Utica well completions during 1Q17 included fracture treatment designs of “greater than 2,500 pounds [of sand] per foot.” That’s a lot of sand! Marcellus and Utica drillers typically find more sand = better production–and that’s what Gulfport is finding. Gulfport works with Mammoth Energy and Evolution Well Services–which operates rigs run by natural gas instead of diesel fuel. Below is the full 1Q17 update, along with comments from Moore delivered during the quarterly earnings call… Read More “Gulfport Energy 1Q17 – Spud 26, Completed 5 Utica Wells”