Oil And Gas Sector: Trouble Ahead with Bankruptcies
Creditsafe USA, which calls itself the world’s “most used supplier” of company business intelligence, on Tuesday released what they call “startling statistics” about “the troubled oil and gas sector.” They are, of course, trying to sell subscriptions to their service by releasing this “news.” However, we found their press release interesting, for a couple of reasons. One reason is because Creditsafe’s research shows that the oil and gas sector contributed a staggering, words-can’t-even-describe-it $220 billion to the U.S. economy in 2015. It represents a “significant percentage” of the U.S. gross domestic product (GDP). The big problem they identify is that oil and gas companies are starting to drop like flies–declaring Chapter 11 bankruptcy. What lies ahead for our economy if that trend continues?…
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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: Market impact of 2016 northeast natgas production trends; 1,312 Utica wells now producing; mini-LNG plant coming in NJ; Cheniere ships 9th LNG export cargo; 50% of LNG exports may get shut-in; European natgas prices collapse; and more!
Some great news to share. A landowner in Wayne County, PA–in the Delaware River Basin–has filed a lawsuit against the Delaware River Basin Commission (DRBC) asking a judge to declare the DRBC does not have jurisdiction to prevent construction of a natural gas well. MDN has chronicled, for years, the lawless actions of the DRBC in seizing power it does not have to block shale drilling in essentially two PA counties where there is measurable quantities of shale gas that could be extracted: Wayne County and Pike County. DRBC’s former director, Carol Collier, is a hardened anti-driller who colluded with Josh Fox in making his infamous propaganda film Gasland. Collier is gone and it was thought her replacement, Steve Tambini would bring some order and sense to the organization (see 
Earlier this year Alpha Natural Resources (ANR), primarily a coal company with 27,400 acres of Marcellus/Utica Shale leases, filed for bankruptcy and announced it would sell off its Marcellus assets. ANR previously had a joint venture with Rice Energy (which Rice later bought out). Rice was also interested in the 27K acres ANR is selling as part of their bankruptcy–and made a “stalking horse” bid of $200 million for the assets (see 
Earlier this month MDN brought you the exciting news that Eclipse Resources, a smaller Marcellus/Utica pure play driller headquartered in State College, PA (but drilling mostly in Ohio) has drilled the world’s longest shale well–in the Utica in Guernsey County, OH (see 
New research just published by Indiana University confirms what those with common sense already knew: If at least some of the fees paid by drillers go into the local township’s coffers instead of the county or state–people in that community are more accepting and favorable to drilling. IU questioned 453 PA residents in June 2014 (takes a long time to publish research) asking a variety of questions. The research shows that the public has more trust that revenues will be spent better by their local municipal government than by the county or state. Don’t you just love it when common sense breaks out? Of course PA’s far-left/liberal governor, Tom Wolf, is tone deaf when it comes to taxing the Marcellus industry. He wants to grab all the money he can and give it to teachers unions. PA has an impact fee which keeps 60% of fees raised local–a plan that works. Wolf wants to add a severance tax on top of the impact fee, which would create the nation’s highest severance tax rate (see 
Mainstream media and the crazies who blat about ending the use of fossil fuels (stupid gits) have so demonized shale drilling the average citizen might assume shale drilling and all of those businesses that support it are from Satan himself. We spotted a story about an Ohio city (Columbiana) that has taken the unusual action of annexing an extra 94 acres of land next to an existing company located in the city so it can legally extend services like water, sewer and electric lines so the business can expand. That’s not unheard of. What is unheard of is that the business in question is Buckeye Transfer–a company that stores water, sand, chemicals and other materials used in (gasp) fracking of Utica Shale wells. Yes ladies and gentlemen, Columbiana is aiding and abetting a fracking company. It’s such an unusual story, we just had to highlight it…
Last month MDN told you that the Penn Township (Westmoreland County) zoning board refused to grant a permit to Apex Energy to build a DEP-permitted well pad in the town (see 
States often send trade delegations to foreign countries looking for investors to set up shop in their states–a sad but necessary activity that’s been going on for years. Just look at the ethane cracker plants announced for the Marcellus/Utica: Shell (headquartered in the Netherlands) wants to build a plant in PA; PTT Global Chemical (Thailand) wants to build a plant in OH; and Odebrecht (Brazil) once wanted to build a plant in WV, a plan that seems to now be dead. Speaking of WV, a new trade delegation is heading back to Japan, seeking more investment in the Mountain State. Among those going is Pat Ford, representing the Northern Panhandle area. One of Ford’s main reasons for going is “discussions on West Virginia’s energy growth, in particular ongoing development of the Marcellus and Utica shale plays for the natural gas industry.” Hmmm. That’s interesting. Makes us wonder if Gov. Earl Ray Tomblin is looking for another cracker investor–this time from the Land of the Rising Sun…
Cabot Oil & Gas is a great company that focuses most of its shale efforts in the Marcellus. And every single Marcellus well they drill is located in a single northeastern Pennsylvania county–Susquehanna County. Susquehanna County has been good for Cabot, and conversely, Cabot has been good for Susquehanna County–providing jobs and pumping millions into the local economy. So it was no surprise to learn that Cabot is the main sponsor of a county event being held tomorrow: the Susquehanna County Business Expo. The purpose of the expo? To lure companies to locate or relocate in a relatively rural but rapidly growing county–where the air is good, the people are nice, the taxes are LOW and the gas is plentiful. The not-so-subtle message to businesses located nearby in Broome County, NY (where MDN is written) is that they ought to consider relocating over the border. Specifically in their sights are manufacturers who can leverage the cheapest natural gas in the world! The sad truth is that businesses have been, and continue to, leave the Empire State in droves. Cuomo is driving them out with his obtuse policies. The Expo will be held tomorrow in Montrose, PA. MDN encourages Broome businesses (and business from other areas) to consider attending. Here’s the details…
