Marcellus Drilling News

Economic Impact | Energy Companies | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Shell | Statewide OH | Statewide PA | Statewide WV | West Virginia

Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away
June 10, 2016June 10, 2016

Gentlemen, start your engines! Your economic engines, that is. The news earlier this week that Shell has made the commitment to move ahead and build an ethane cracker plant in Monaca, PA has, as we knew it would, set the region buzzing (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go! and Shell PA Cracker Plant Project a Lot Bigger Than First Thought). With the decision now made, those in the real estate community are salivating over how that decision will reverberate throughout the region. There is now an effort underway to lure manufacturers in Texas and along the Gulf Coast area to consider setting up in the western PA (and eastern OH and northern WV) area instead–to take advantage of being that much closer to the biggest market in the country–the East Coast. One real estate pro says commercial real estate for up to 150 miles away is likely to be impacted by the decision to build the cracker plant in Monaca…
Read More “Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Lease & Royalty Payments | NEXUS Pipeline | Ohio | Pipelines | Spectra Energy | Statewide OH

CORNballs Claim Most OH Landowners Won’t Sign NEXUS Pipeline Lease
June 10, 2016June 10, 2016

The NEXUS Pipeline is a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada (see Spectra Energy Files Formal FERC Application for NEXUS Pipeline). It is a critically needed pipeline to move Utica and Marcellus Shale gas from an over-saturated market in the northeast to markets in the Midwest and Canada. A group of anti-fossil fuelers calling themselves the Coalition to Reroute Nexus, or CORN, is trying to stop the project (not reroute it). We affectionately call the nutters, “CORNballs” here at MDN. Earlier this year the CORNballs tried to incite trouble by telling landowners to call the police if NEXUS surveyors showed up on their doorstep to ask permission to survey (see CORNballs Tell OH Landowners to Call Police & AG to Stop Pipeline). The CORNballs are back, claiming that the vast majority of landowners along the proposed route for NEXUS have not, and will not, sign an easement to allow the pipeline…
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Ohio | Statewide OH | Statewide WV | West Virginia

Group Promotes Mid-Ohio Valley for Petrochem: Shale Crescent USA
June 10, 2016June 10, 2016

A group of business and government leaders from Ohio and West Virginia in what is called the Mid-Ohio Valley have banded together to form an economic development group called Shale Crescent USA. The group has been some two years in the making and officially launched yesterday at a public event in Washington County, OH. The aim of the group is to attract manufacturers (particularly petrochemical manufacturers) to set up shop in the region. Leaders of the new organization point out the unique location, with the mighty Ohio River to barge materials and products in and out, and the location right on top of the most abundant supplies of cheap natural gas in the entire world. In addition to yesterday’s event, the group launched a website: ShaleCrescentUSA.com. Unfortunately, as of the time this article was posted, the site seems to be off the air (a public relations disaster the day after the big unveiling). Perhaps by the time you read this it will be working. (Working now!) We were able to locate a very slick video promo which we’ve embedded below…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Wolf Really Didn’t Wise Up, He Just Took Half a Loaf re Drilling Regs
June 10, 2016June 10, 2016

PA Gov Tom “half a loaf” Wolf

Yesterday MDN held out hope that PA’s far-left Governor, Tom Wolf, had actually wised up with respect to blocking new drilling regulations for conventional drillers in the state (see Wolf Wises Up – Agrees to Block/Rework Conventional Drilling Regs). We thought perhaps the Wolf was learning to moderate his hard-left stances and work with the more reasonable Republican Party to advance the state. Ha ha ha. We should have known better. How very Pollyanna of us. We spotted an article in the Pittsburgh Post-Gazette that gives us the real reason Wolf agreed to sign off on a deal to block new Article 78 regulations for conventional drillers: Because if he didn’t, Republicans AND Democrats were waiting to block ALL of the new drilling regs–including regs for shale drillers. Members of his own party told him they would vote to override his veto, if it came to that. Wolf knew he had lost the fight and rather than go down to defeat, he grabbed onto a half a loaf–allowing shale regs to advance–to salvage what little reputation he has left…
Read More “Wolf Really Didn’t Wise Up, He Just Took Half a Loaf re Drilling Regs”
Pennsylvania | York County

PA Paper Manufacturer Converting Coal to NatGas Boilers
June 10, 2016June 10, 2016

It’s not only power generating plants that are converting from burning coal to burning natural gas. York, PA paper manufacturer Glatfelter is working on a $63 million conversion project from coal-fired boilers to Marcellus Shale gas-fired boilers. Glatfelter considered other alternatives, like scrubbers for the current coal-fired boilers and using biomass boilers. In the end, Glatfelter said Marcellus Shale gas has “lower emissions, increased efficiency, lower variable costs” and supports “a resource critical to the state’s economic health.” Wise choice. The Glatfelter decision to convert to Marcellus Shale gas was highlighted yesterday at an economic forum in southcentral PA…
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Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Regulation | Williams

As the (Midstream) World Turns: FTC Approves ETE/Williams Merger
June 10, 2016June 10, 2016

In our ongoing soap opera of whether or not Energy Transfer Equity and Williams will tie the knot, another new development to report. Yesterday the Federal Trade Commission (FTC) gave the deal its stamp of approval–providing Williams sells its 50% ownership in Gulfstream Natural Gas System LLC (located in Florida). Yesterday both Williams and ETE issued the same, nearly word-for-word identical statements, indicating some level of communication between the two still exists…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Jun 10, 2016
June 10, 2016June 10, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: PA ethane cracker will boost NGL production; OH says PA cracker is good news for their cracker too; PA chemical industry supports PennEast Pipeline; paying for pipelines in New England; record high natgas trading volumes in 2015; natgas prices jump 6% while oil stalls; what is the future of natgas price?; cheap Canadian gas aggravates US; and more!
Read More “Marcellus & Utica Shale Story Links: Fri, Jun 10, 2016”
Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Wolf Wises Up – Agrees to Block/Rework Conventional Drilling Regs
June 9, 2016June 9, 2016

PA Gov Tom Wolf – finally wising up?

While not wanting to look he’s caved, Pennsylvania Gov. Tom Wolf caved and in a deal with PA legislators agreed to support amended legislation that will allow some new Article 78 drilling regulations to go forward (for shale drillers) while other Article 78 regs will not (for conventional drillers). Yesterday the PA House Environmental Resources and Energy Committee approved amendments to Senate Bill 279 that prohibit the state Dept. of Environmental Protection (DEP) from implementing new Article 78 rules for conventional drillers. Committee Chairm John Maher (Republican) let it leak that Wolf has cut a deal to support the amended bill, much to the consternation of Rep. Greg Vitali and his buddies in the Big Green movement. Will they now brand Wolf as an environmental “apostate”–using John Quigley’s language? Perhaps! For more than a year Wolf has been recalcitrant when it comes to the budget and just about every other initiative where the Executive and Legislative branches must cooperate. Could it be Wolf is finally wising up?…
Read More “Wolf Wises Up – Agrees to Block/Rework Conventional Drilling Regs”
Accidents | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Spectra Energy | Westmoreland County

TETCO PA Pipeline Explosion Still Limiting NatGas Flow Month Later
June 9, 2016June 9, 2016

An update on Spectra Energy’s Texas Eastern Transmission’s “Delmont Line 27” which exploded in Westmoreland County, PA on April 29 (see Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate). We previously told you that not only was Line 27 out of commission, so too were three other pipelines running through the same corridor, meaning 1 billion cubic feet of natural gas per day is not reaching certain mid-Atlantic markets (see Update on Spectra Pipeline Explosion Near Pittsburgh). The early evidence points to corrosion along welded seams, although the jury is still out and the exact cause may not be known for months (see Preliminary Guess on TETCO Pipeline Explosion Cause: Corrosion). One of the four lines that was offline (Line 19) was examined and certified by the Pipeline and Hazardous Materials Safety Administration (PHMSA) in early May to go back online (see TETCO Pipeline Up & Running Post-Explosion; Antis Exploit Accident). But since that time the other three lines have remained idle. When will the other three lines go back into service? And, did the Line 27 explosion cause any lasting airborne hazards?…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Marathon Petroleum | NEXUS Pipeline | Ohio | Pipelines | Spectra Energy | Statewide OH

Updates on 3 Major OH Pipelines at Utica Midstream Seminar
June 9, 2016June 9, 2016

Some 160 people showed up for the Utica Midstream Seminar held yesterday at the National Football Hall of Fame in Canton, OH. The event, sponsored by the Canton Regional Chamber of Commerce and ShaleDirectories.com, provided updates on three major pipeline projects either under construction or soon to be under construction in the Buckeye State: Marathon Petroleum’s Cornerstone Pipeline, Spectra Energy’s NEXUS pipeline project, and Energy Transfer’s Rover pipeline project. Here’s what reps from each organization had to say about their respective projects…
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Energy Services | Rice Midstream

Rice Midstream Floats Another Public Offering – Feed the Beast!
June 9, 2016June 9, 2016

On Tuesday Rice Midstream, the pipeline subsidiary of Rice Energy (operating in the Marcellus/Utica region) announced they will offer new “units” (think shares of stock) in the company. Rice said they will float an initial 8 million units, with an option of selling an additional 1.2 million units. The company hopes to get $18.50 per unit, meaning they are looking to raise $148 – $170 million by selling off more of the company. Rice first spun the midstream division into its own company (on paper) in December 2014. They got $16.50 per unit at the time, a total of $441.6 million (see Rice Midstream IPO Falls Short of Goal by Approx. $134M). Since that time Rice has continued to sell off pieces of ownership in the midstream division. Last December Rice received a $500 million investment in the midstream company in return for an ownership stake from an unnamed investor (see Rice Energy Sells Part Ownership in Rice Midstream for $500M). In February, Rice sold an 8.5% stake in the midstream company to EIG for $375 million (see Rice Sells 8.5% Ownership of Rice Midstream to EIG for $375M). And now they’re looking for another $150 million or so. Are you getting the idea (like us) that Rice Midstream has some pretty big plans ahead? Plans that require a LOT of money…
Read More “Rice Midstream Floats Another Public Offering – Feed the Beast!”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA

New $2.5 Million Penn State Initiative Aims to Stop Pipelines
June 9, 2016June 9, 2016

This is the story of wasting $2.5 million of taxpayer’s money. Penn State has given us some of the best research (and personnel) we’ve ever seen when it comes to the Marcellus Shale. In particular we’re thinking of Penn State’s Marcellus Center for Outreach and Research (MCOR). Great people. Super research. But then there are others at Penn State who don’t like shale energy and concoct some pretty creative ways to stop it. We recently came across something called Marcellus by Design from Penn State’s Department of Landscape Architecture. This new initiative from Penn State received $2.5 million from the National Science Foundation (funded by your tax dollars and mine) to travel around the state and use a website to “educate” people about the aesthetics of the Marcellus. In other words, where should you put a pipeline? And how will it look? They’ve designed online “games” to help in this mission. Yes, it’s as stupid as it sounds. The aim is, of course, to not install a pipeline at all. It’s an elaborate anti-drilling hoax cloaked to look like something it is not. After a pipeline is in the ground for a few years, you can’t even tell it’s there. We think the $2.5 million grant would have been better spent on where to site windmills in PA. We’ve traveled through northeast and southeast PA quite a bit, and it never ceases to amaze us (going down the PA Turnpike from Wilkes-Barre to Philadelphia, for example) to spot entire hillsides covered with ugly, imposing windmills–destroying the natural beauty of the area–not to mention being huge bird killers. Why didn’t the Dept. of Landscape Architecture study that, instead of Marcellus pipelines?…
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Crestwood Midstream | Energy Services | Industrywide Issues | Pipelines

Con Ed & Crestwood Seal the Deal on Marcellus Pipeline/Storage JV
June 9, 2016June 9, 2016

In April MDN brought you the news that New York City’s largest utility company–Consolidated Edison Inc.–had formed a 50/50 joint venture to purchase ownership of pipelines and storage facilities from Crestwood Equity Partners in the PA and NY Marcellus region (see Utility Giant ConEdison Buys a Piece of the Marcellus Midstream). The newly formed jv, called Stagecoach Gas Services, will be operated by Crestwood and includes four natural gas storage facilities (Stagecoach, Thomas Corners, Steuben and Seneca Lake) with a combined storage capacity of approximately 41 billion cubic feet; and three natural gas pipelines (MARC I, North/South and the East Pipeline) with a combined throughput capacity of 2.96 billion cubic feet per day. The deal closed earlier this week. Con Ed ponied up $945 million, and together with the pipelines and facilities “donated” by Crestwood to the jv, the new Stagecoach Gas Services company is worth an estimated $2 billion…
Read More “Con Ed & Crestwood Seal the Deal on Marcellus Pipeline/Storage JV”
Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Moodys Downgrades Halliburton/Baker Hughes Debt Post-Failed-Merger
June 9, 2016June 9, 2016

Ever hear the phrase, “Better to try and fail than never to try at all.” That’s actually the name of a poem from William O’Brien (dead poet, read his famous poem here). Contrary to the wisdom of O’Brien’s poem, in some cases it may be better to never have tried in the first place. At least that’s what Halliburton and Baker Hughes may be thinking about their failed attempt to merge (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). Halliburton ended up having to pay Baker Hughes a $3.5 billion break-up fee (see The Road Ahead for Baker Hughes – Post Halliburton Deal). Ouch. But that’s not all. Last week Moody’s Investors Service downgraded the debt for both Halliburton and Baker Hughes–from A2 to Baa1. Why? In part because of the failed merger deal. That’s what Moody’s says. What does the credit downgrade mean? It means their outstanding debt is harder to buy and sell, affecting $12.8 billion of debt for Halliburton and $3.9 billion of debt for Baker Hughes. It also means should either company want to borrow more money, the cost will be higher to do so…
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Industrywide Issues | Research

EIA Says NatGas Production Nearly Doubles Next 25 Yrs from Shale
June 9, 2016June 9, 2016

Over the past five years, the amount of natural gas production has blossomed–because of shale and fracking. But according to the U.S. Energy Information Administration (EIA), you ain’t seen nothin’ yet! The EIA predicts natgas production will nearly double over the next 25 years–and almost all of the growth will come from shale (take a look at the chart below). Here’s the latest analysis from our favorite government agency…
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Anti-Drilling/Fossil Fuel | Industrywide Issues

Environmental Radicals: The Gangsters Among Us
June 9, 2016June 9, 2016

Dr. Jack Rafuse

Dr. Jack Rafuse is a former White House energy adviser and current principal of the Rafuse Organization. He advises government agencies, policy centers, businesses and associations on energy, trade, sanctions, national security issues and their interrelationships. Yeah, he’s a really smart guy who knows a LOT about energy. He’s forgotten more about energy that we’ll ever know! In a recent column published in Ohio Gas & Oil Magazine Rafuse doesn’t beat around the bush. He calls the organized protests we’ve been seeing from radical Big Green groups like 350.org exactly what it is: “Gangsterism paid for by billionaires.” Rafuse points out the silly, empty-headed protesters are nothing more than useful idiots for big money bullies behind them–out for a thrill, paid for by someone else. Thing is, there are very real and tragic consequences to their actions that affect all of us…
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