EPA Axes Obama Reg Requiring O&G Methane Emission Reporting
Last year the federal Environmental Protection Agency (EPA) under Barack Hussein Obama once again far exceeded its constitutional limits by enacting a new methane regulation that requires oil and gas operators to install all sorts of expensive equipment in a vain attempt to sniff out so-called fugitive methane (see EPA Does it Again: Tries to Destroy O&G with New Methane Rule). The erroneous thinking goes like this: even a little bit of methane leaking into the atmosphere is far worse than just about all carbon dioxide create when it comes to global warming, so we have to stop it. And the way to stop it is by forcing oil and gas companies (drillers, pipeliners, etc.) to ensure not one stray CH4 molecule ever escapes into the atmosphere. The EPA totally ignores the FACT that burping and farting cows put far more methane into the atmosphere than the oil and gas industry. But we digress. Not long after the EPA tried this latest heavy-handed approach with the o&g industry, 15 states sued to stop it, including Scott Pruitt as Attorney General from Oklahoma (see 15 States File Lawsuits to Block EPA O&G Methane Rule). It must have given Scott, now EPA Administrator, enormous satisfaction to issue the order yesterday that withdraws the methane rule “immediately”…
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The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Hundreds rally against fracking in Maryland; no new Utica wells in OH for Hess in 2017; phones “ringing off the hook” with biz opportunities in OH, thx to fracking; Utica Shale Academy students get certs; Marcellus Shale exports from Philly jump in 2016; Exxon now spends 50% of drilling budget on shale; US shale pokes OPEC in the eye; no peak oil for America, or the world; OPEC fails to deliver on promised target cuts in production; and more!
On Tuesday, Antero Resources, one of the largest and most active drillers in the Marcellus/Utica, issued its 2016 and fourth quarter 2016 update. The company reports net daily production averaged 1,847 million cubic feet equivalent (MMcfe) per day, a whopping 24% increase over 2015 production levels. Digging through the update we found this interesting statistic: It cost Antero an average of $0.84 million per 1,000 feet to drill and complete a Marcellus well, and it cost the company an average of $0.99 million per 1,000 feet to drill and complete a Utica well. Those numbers are 29% and 27% less than a year ago, respectively. The company continues to have some of the best hedging (prices locked in early for the gas they sell) in the business. The company’s natural gas production for 2017 is fully hedged at an average index price of $3.63 per thousand cubic feet (Mcf). The Henry Hub price as this was being written was $2.77/Mcf. Smart! But all was not butterflies and unicorns for Antero in 2016. The company reports losing $849 million in 2016, after making $941 million in 2015. That’s a swing of nearly $2 billion in one year. Ouch. More interesting factoids from the update: Antero plans to average sinking nine wells per pad in the Marcellus, and six wells per pad in the Utica in 2017. Here’s the full update, along with a brand new PowerPoint presentation…
In early February, Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, released an operational update for fourth quarter and all of 2016 (see 
A “boost” from the oil and gas industry, specifically the Utica industry, is beginning to “trickle” through Muskingum County once again, says the director of the Zanesville-Muskingum County Port Authority. No, we’re not talking about drilling Utica wells–not in Muskingum, anyway. What we are talking about are companies that work in the industry. Oilfield services companies like Halliburton and Producers Service Corporation are, once again, expanding their businesses and adding new jobs. Muskingum is located next to four of the best counties in which to drill a Utica well–Guernsey, Belmont, Noble and Monroe. Belmont has the bonus of being the likely location of the next ethane cracker to commit to the region–PTT Global Chemical’s cracker plant. With an uptick in Utica drilling, and activity around the coming cracker plant, Muskingum County is in the catbird seat for economic expansion…
Companies in the oil and gas space, in particular midstream (pipeline) companies, have complicated ownership structures on paper. There are usually a number of subsidiary companies. Sometimes these companies have a “mother ship” which is owned by stockholders, and a subsidiary that is a master limited partnership (MLP), which is a different kind of corporate structure. MLPs don’t have shares of stock but instead issue units (about the same thing as shares of stock). MLPs give the unitholders certain tax advantages not offered to stockholders. Yes, its complicated. The important thing to know is that often these large pipeline companies have layers within layers. Which is the setup for this story. TransCanada, which purchased Columbia Pipeline Group last year for $10 billion (see 
In January MDN told you about an effort in Virginia to ensure new changes in Virginia’s environmental regulations that require “mandatory disclosure of fracking chemicals, baseline water testing and monitoring, and spill prevention and response planning” would still protect trade secrets–the exact combinations of chemicals used by drillers when fracking (see 
In May 2015, Obama’s rogue Environmental Protection Agency (EPA), along with the Obama U.S. Army Corps of Engineers (USACE), released a finalized rule clarifying what “Waters of the United States” (WOTUS) means vis-à-vis what can be regulated under the federal Clean Water Act (see 
Less than two weeks ago Oklahoma Attorney General Scott Pruitt was confirmed to be the new Administrator of the Environmental Protection Agency (see 
On Friday, Feb. 3, the Federal Energy Regulatory Commission (FERC) gave a final approval for Energy Transfer’s Rover Pipeline project–a $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada (see 
New York State is a hopeless, corrupt mess. MDN previously reported on a $900 million natural gas-fired electric generating plant coming to Orange County, NY (see 
PDC Energy, a driller in the Wattenberg Field in Colorado and the Utica in Ohio, paused their Utica drilling program in 2015 (see 
The Allegheny Institute exists to conduct research, education and advocacy work in a mission to defend taxpayers and businesses against burdensome taxation, inefficiency and intrusiveness of an ever expanding government. That’s a pretty tall order because government–at all levels–is always expanding, like a voracious monster. Think of the Allegheny Institute as a mini version of the Heritage Foundation–focused on Pennsylvania. Last week the Institute published a new policy brief dealing with the latest severance tax proposal by PA Gov. Tom Wolf. This is a think piece–but not overly heavy. It is quite readable (within a few minutes) and delivers food for thought. As the author points out, you can change to a severance tax from an impact fee (i.e. tax), but will you really reap all of the revenue claimed? Politicians like Wolf often gloss over the economics. Currently, the impact fee is levied on drillers. A severance tax, if enacted, would (in many/most cases) be deducted as an expense from royalty checks, placing the burden for the tax on landowners–and lowering their income, which means less in the way of state income tax revenues. The severance tax proposed by Wolf, when considered honestly, is nothing short of a disaster…
A fake report recently issued by the anti-drilling, radically left and biased Public Herald (populated with activists masquerading as “journalists”) claims that some 9,400 residents in Pennsylvania have filed complaints that fracking has caused them ill-health in one way or the other. It is, according to anti-drillers, a public health “crisis.” How do we know this so-called report is TOTAL BS? Look at who wrote it, and look at who funded it: community organizers wrote it, the Heinz Foundation funded it. This is another sterling example of Joseph Goebbels-like propaganda. The Harrisburg Patriot-News allowed one such community organizer/anti-fossil fueler to run an article on the opinion-editorial page touting the report as legitimate. You can fool some of the people some of the time…