• Marcellus & Utica Shale Story Links: Thu, Feb 2, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Managing fluids in the Marcellus/Utica; NY DEC gives $50K grants to enviro troublemakers; antis still not happy NY nuke shutting; training the next generation for o&g jobs in the Utica; how Trump’s Supreme Court pick could impact the Marcellus/Utica; Rex Tillerson confirmed as Sec State; Dems boycott Pruitt vote, stomp feet like babies; White House tries to ‘ease’ rattled EPA; NY Times says its readers are too dumb to understand global warming numbers; Japan may buy more U.S. energy; pipelines may face climate test in Europe; and more!
    Read More “Marcellus & Utica Shale Story Links: Thu, Feb 2, 2017”

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    Marathon Begins to Build New 49-Mile Utica Pipeline in Ohio

    In December 2013 MDN first reported a new $250 million pipeline on the way in the Utica Shale from Marathon Petroleum Corporation, the largest refiner in the Utica Shale region (see Marathon Petroleum’s Newly Announced “Cornerstone” Utica Pipeline). The Cornerstone pipeline stretches nearly 50 miles from the MarkWest cryogenic processing plant in Cadiz, OH northwest connecting to M3’s fractionator plant in Scio and M3’s cryogenic processing plant in Leesville along the way as it terminates and connects to Marathon’s refinery in Canton, OH. The pipeline will carry, at various times, crude oil, condensate and natural gasoline. It went online in September 2016 (see Utica Condensate Begins Flowing Through Cornerstone Pipeline). What we didn’t know/hadn’t noticed with all the talk and focus on Cornerstone, is that Marathon had also floated another 49-mile condensate pipeline project further west of Cornerstone, called HALI–the Harpster to Lima Pipeline. The purpose of the project is a pipeline “for efficient and safe delivery of condensate from the Utica Shale to refineries where it can be processed into gasoline and diesel in order to meet the needs of producers, mid-streamers, marketers, diluent blenders, and refiners as the Utica Shale continues to develop.” The project is now under construction and expected to go online in July. Although Marathon doesn’t really provide any details for the project on their website, we were able to locate a good bit of information about the project, which we share below…
    Read More “Marathon Begins to Build New 49-Mile Utica Pipeline in Ohio”

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    York County, PA Electric Plant Begins Using NatGas as Fuel

    Brunner Island Power Plant – click for larger image

    We first reported in August 2015 on plans for a mammoth coal-fired electric plant in York County, PA (straddling Lancaster County) would invest $100 million to begin using Marcellus Shale gas to help power the plant (see Lancaster Coal Burning Electric Plant Adding Marcellus NatGas). The Brunner Island facility, as it’s called, has been in environmentalists sights for years, with complaints about emissions from the plant. Brunner Island has a relatively new owner–Talen Energy (of Allentown, PA). Beginning to use natgas at the Brunner Island facility is an experiment for Talen–they intend to continue using coal as well (for now). Good news: Brunner Island has begun using natgas, ahead of schedule…
    Read More “York County, PA Electric Plant Begins Using NatGas as Fuel”

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    EQT Catches Big Break in WV Supreme Court re Royalty Deductions

    In December MDN reported on the huge West Virginia Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). Specifically, the justices in their ruling said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” We can’t stress just how big a deal this is. So the following news is equally as big: In a rare and unusual move, the same WV Supreme Court has agreed to rehear the case…
    Read More “EQT Catches Big Break in WV Supreme Court re Royalty Deductions”

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    CONSOL Energy 4Q16 Update – Plans to Shed Rest of Coal in 2017

    Yesterday CONSOL Energy released their fourth quarter 2016 results, along with a conference call to discuss those results. A few important items come out of yesterday’s activity. (1) The company lost $321 million in 4Q16. (2) CONSOL, originally a coal-only company, plans to either spin-off or sell the remaining coal assets it owns–this year–completing the process of transforming the company from coal to natural gas extraction. (3) CONSOL produced an average of 101.3 billion cubic feet equivalent of natural gas per day in 4Q16, up 6% from 4Q15. (4) The company shaved a dime off the costs to produce each thousand cubic feet (Mcf) of natgas–from $2.37/Mcf in 2015 to $2.27/Mcf in 2016. (5) Although the company lost money, the shale drilling business saw an increase in revenue in 4Q16 to $280.1 million (a 5.6% increase over 4Q15). (6) Although CONSOL has and continues to drill and complete wells in the Marcellus, their focus for new drilling is the Utica. Here’s the update…
    Read More “CONSOL Energy 4Q16 Update – Plans to Shed Rest of Coal in 2017”

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    AEP Completes Sale of 2 OH, 1 IN NatGas-Fired Electric Plants

    MDN reported in September that American Electric Power is selling four electric generating plants to a newly formed joint venture of Blackstone and ArcLight Capital Partners (see AEP Sells 2 Ohio NatGas-Fired Electric Plants to Blackstone JV. Three of the plants are natural gas-fired–two of them in Ohio and one in Indiana. One of the plants is coal-fired, located in Ohio. Total sale price for all four: $2.17 billion. As we’ve also reported, the sale of these “unregulated” power generating plants is part of AEP’s strategy to become 100% regulated–and then try to lock out competition from unregulated, shale-fed plants (see OH Power Cos. Try to Stop Gas-Fired Plants with “Re-Regulation”). Sleazy. At any rate, AEP reported on Monday the sale is now completed…
    Read More “AEP Completes Sale of 2 OH, 1 IN NatGas-Fired Electric Plants”

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    Trump Takes Aim at EPA – Rumored to Cut Half of 15K Employees

    Finally, something is being done about draining the swamp that has been (until now) a rogue, out-of-control federal Environmental Protection Agency. As we previously reported, Trump could not have picked a better person to head the agency than Oklahoma Attorney General Scott Pruitt (see Master Stroke: Trump Selects OK AG Pruitt to Lead EPA). We’ve heard Pruitt speak, in person. He’s the right man for the job. The EPA under Barack Obama regularly exceeded its constitutional boundaries and attempted, on multiple occasions, to regulate the oil and gas industry. We can assure you there will be a whole less regulatin’ goin’ on at the EPA from now on. In addition to Pruitt at the helm, Trump is taking aim at “significant” budget and (most importantly) staff cuts at the agency. According to an AP article running in Time magazine, Trump wants to dump half of EPA’s 15,000 employees. Maybe more. To which we say, hooray! Gutting the EPA is making environmental radicals who have had their way with the agency for the last eight years, apoplectic…
    Read More “Trump Takes Aim at EPA – Rumored to Cut Half of 15K Employees”

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    Rewriting StateImpact’s Biased Story on Trump’s First Days

    The PBS “reporters” at the taxpayer-funded StateImpact Pennsylvania, like Marie Cusack, are as biased as bias gets. The frustrating thing is that they pretend to be journalists–pretend to be unbiased. They are, instead, radical leftists with an agenda, and it leaks through with every article. Some articles more than others. Take, for example, Cusack’s recent article railing against Donald Trump and his first days in office–and how poor enviro wackos have a fight on their hands. We thought it would be fun to append Cusack’s article with some truth, so you have the full context–to see what she leaves out. Enjoy!…
    Read More “Rewriting StateImpact’s Biased Story on Trump’s First Days”

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    PA Senator Makes the Case: PA Air Getting Cleaner Thx to Shale

    Recently a biased editorial ran in the biased Pittsburgh Post-Gazette, taking aim at methane. The editorial, penned by Brian O’Neill, misrepresented the facts about methane in PA, in an attempt to garner support for onerous new regulations put forward by Gov. Wolf’s Dept. of Environmental Protection. State Sen. Guy Reschenthaler, R-Jefferson Hills (representing parts of Allegheny County and Washington County), responded with his own editorial. To their credit, the Post-Gazette published it. Reschenthaler said the air is actually getting cleaner in PA, not dirtier, thanks to Marcellus Shale gas. And the new regulations being pedaled by Wolf will not make things better environmentally. The only thing the new regs will do is kill jobs…
    Read More “PA Senator Makes the Case: PA Air Getting Cleaner Thx to Shale”

  • Marcellus & Utica Shale Story Links: Wed, Feb 1, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: 7 permits issued in OH Utica last week; Rhode Island asks Pres. Trump to jumpstart New England natgas pipeline; Eagle LNG files app to build Jacksonville LNG export facility; Senator says US Army Corps will soon approve Dakota Access Pipeline; 2 new natgas power plants coming to Upper Pennisula; advanced drilling rigs “breakout” this year; Chevron’s bombshell; Senate committee advances Zinke & Perry; and more!
    Read More “Marcellus & Utica Shale Story Links: Wed, Feb 1, 2017”

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    FERC Acting Chair Cheryl LaFleur Tries to Reassure Pipeline Cos.

    As we reported yesterday, Federal Energy Regulatory Commission (FERC) chairman Norman Bay has his knickers in a twist over getting a demotion by President Trump, who has named another sitting FERC Commissioner, Cheryl LaFleur, to become the chairwoman of FERC (see FERC Commissioner Resigns Threatening Major M-U Pipeline Projects). Bay is leaving in a huff this Friday. His resignation means there will only be two (out of five) Commissioners left until Trump names three new ones. Since FERC Commissioners must be approved by the Senate and since Democrats in the Senate are obstructing Trump’s nominations (sore losers), getting new appointments anytime soon is not in the cards. In the meantime, after this Friday there will not be a quorum–not enough people to vote on important projects like the NEXUS Pipeline and Atlantic Sunrise Pipeline. The oil and gas industry–and employees at FERC–are “unsettled” to say the least. In an effort to calm the storm, Ms. LaFleur was interviewed on FERC’s own Open Access podcast series (transcript below). What did she say? Even with the quorum, important work at the agency will continue–things like hydropower inspections, safety reviews of natgas facilities, audits and other activities. You don’t need Commissioners for that. LaFleur said the three Commissioners are working flat out this week to get as much done as they can before old Norm goes home, taking his marbles with him (our words, not hers). LaFleur is also working, presumably with FERC’s lawyers, on the “potential expansion” of what staffers can and can’t do–expanding their role during the period when there is not a quorum. Apparently there is precedence for doing so. Here’s what she said on the podcast…
    Read More “FERC Acting Chair Cheryl LaFleur Tries to Reassure Pipeline Cos.”

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    Industry Survey Predicts: PA Drilling Up 29%, OH Up 19%, WV Up 22%

    World Oil calls itself “the premier trade publication for the international upstream industry.” Perhaps it is–who are we to say otherwise? The folks at World Oil have done us all a favor. They surveyed the upstream (i.e. drilling) oil and gas industry to find out what drillers are planning for 2017. Overall, they find drillers plan to drill 18,552 wells in North America this year–a big 26.8% jump from last year. In releasing a summary of the results, Wold Oil outlines region by region in the U.S. what they predict will happen this year, based on survey results. The northeast section caught our eye. World Oil predicts Pennsylvania will see a 29% increase in new well drilling this year (total of 774 new wells drilled). Ohio will see an increase of 19.1% in new well drilling (380 new wells). And West Virginia will see a big 21.9% increase (245 new wells). Here’s the full summary from World Oil…
    Read More “Industry Survey Predicts: PA Drilling Up 29%, OH Up 19%, WV Up 22%”

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    OH Gov. Kasich Recycles Proposal to Increase Utica Severance Tax

    “Johnny could only sing one note / And the note he sang was this…” Ohio Gov. John “severance tax” Kasich is Johnny One Note when it comes to his desire to tax the Utica Shale industry and transfer their hard-earned money away to other people who didn’t earn it. Kasich announced he would obstinately include a nosebleed-high Utica Shale severance tax (6.5%) in his biennium budget–again. Kasich has been pining for an increase in Ohio’s severance tax for years (see our extensive list of Kasich severance tax stories here). OH legislators have already declared the proposal to increase the severance tax “dead on arrival.” Kasich offered up this explanation for his addle-headed insistence on including it again: “Some might be cynical and say why does he keep putting this severance tax in when he knows it’s not going to pass…I don’t believe this legislature is going to enact higher severance taxes, but the day will come when they will.” Poor Johnny One Note singing (with gusto) the only note he knows…
    Read More “OH Gov. Kasich Recycles Proposal to Increase Utica Severance Tax”

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    New WVDEP Secretary Fires Enviro Advocate, Communications Director

    It’s the end of an era in West Virginia. Due to term limits, Gov. Earl Ray Tomblin (Democrat) could not run for reelection this past November. Jim Justice (also a Democrat) won that election. Upon assuming office this month, Justice appointed a new head of the WV Dept. of Environmental Protection–Austin Caperton. It’s only natural for an incoming governor to pick his own team, even if the outgoing governor was from the same party. And, we suppose, it’s only natural that the new head of a department (Caperton) would want his own team too. In a move that appears to have generated some controversy, Caperton has given the boot to the leader of the DEP’s Office of Environmental Advocate, Wendy Radcliff, as well as the DEP’s communications director, Kelley Gillenwater. Radical anti groups like the West Virginia Highlands Conservancy, West Virginia Sierra Club and the Ohio Valley Environmental Coalition were up in arms over the firing of Radcliff. Which must mean it was a good move…
    Read More “New WVDEP Secretary Fires Enviro Advocate, Communications Director”

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    Epsilon Energy Update: IOUs Paid Early, No New Marcellus Wells

    It’s been a while since we’ve updated you on Canadian driller and midstream company Epsilon Energy. As a reminder, Epsilon had a shareholder rebellion in 2013 and threw out the sitting board of directors (see Shareholder Rebellion at Epsilon Energy – New Board as of Today). Epsilon CEO Michael Raleigh announced at the time that the company had embarked on a turnaround strategy of focusing on the Marcellus Shale–less than a year after saying they would scale back in the Marcellus (see Epsilon Energy Makes “About-Face” on Marcellus Drilling). Epsilon was and remains a very small player in the Marcellus, but the Marcellus is the company’s entire focus. From what we can tell, the company has not drilled, and doesn’t plan to drill, a single Marcellus well–since 2014. However, they do own a 35% interest in the Auburn Gas Gathering system in the northeast PA Marcellus (Williams is majority owner with 44%). Epsilon’s capital expenditures for 2Q16 were a grand total of $100,000, all of it spent on the Auburn system (see Epsilon Energy: Still No Marcellus Drilling, Focused on NEPA Pipe). While the company has not yet released 4Q16 and full year 2016 results, they did announce they will pay back some outstanding debts early. We have those details, along with Epsilon’s 3Q16 update below…
    Read More “Epsilon Energy Update: IOUs Paid Early, No New Marcellus Wells”

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    EIA: NatGas-Fired Electric Plants Adding 36.6 GW Next 2 Yrs

    As MDN has covered (shouted) for several years now: natural gas-fired electric plants are a really big deal. The conversion from using coal (and some other forms) to natgas to generate electricity is happening at an increasing rate. And those electric generating plants use A LOT of natgas–meaning new markets for drillers. Just yesterday we gave you a list of 409 such projects across the Fruited Plain (see List of Gas Plants, Pipelines Targeted by Sierra Club). Many of those projects are in the Marcellus/Utica region–or adjacent to our region, using M-U gas to power them. Here’s one more bit of evidence that natgas-fired plants are a big deal. According to our favorite government agency, the U.S. Energy Information Administration, the electricity industry is planning to increase natgas-fired generating capacity by 11.2 gigawatts (GW) in 2017 and 25.4 GW in 2018 (for a total of 36.6 GW) based on information reported to EIA. That’s enough to power something like 26 million homes! If all these plants come online as planned, annual net additions in natural gas capacity would be at their highest levels since 2005. On a combined basis, these 2017–18 additions would increase natural gas capacity by 8% from the capacity existing at the end of 2016…
    Read More “EIA: NatGas-Fired Electric Plants Adding 36.6 GW Next 2 Yrs”