Legislature in Prince George’s County, MD Bans Fracking
The anti-fossil fuel Democrat machine that runs Prince George’s County, Maryland (D.C. suburb) has voted to ban fracking in the county. Not that anyone actually wants to frack there. And not that the state doesn’t already have a moratorium in place that prevents it (see Maryland’s Pusillanimous Gov Allows Frack Moratorium to Become Law). There is no prolific Marcellus or Utica Shale running under Prince George’s County (PGC). However, there may be a portion of the Taylorsville Basin under the county, which is the excuse used by legislators in passing the ban. The Taylorsville is located mostly under Virginia (see Virginia Inches Closer to Shale Drilling in Taylorsville Basin). The PGC Dems hope their legislation will serve as a model for other counties in the state, and in fact will “lay the groundwork for a statewide ban in Maryland.” Fine. Ban it. What we hope is that all companies stop selling natural gas to Maryland and we’ll see how quickly that ban would get reversed. The people doing the banning in PGC heat their homes with natural gas, go to work in buildings that use natural gas, drive vehicles and use devices made from plastic (comes from natural gas and petroleum products). Etc. Can anyone say HYPOCRITES? More like dullards…
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More trouble may be ahead for drillers in the Marcellus, Utica and beyond. Fitch Ratings has just released a report that says the Office of the Comptroller of the Currency (OCC)–a federal agency–is set to downgrade the ratings of loans for many exploration and production (E&P) companies that are considered “high yield” (HY). If the outstanding loans these companies have (and most of them, if not all of them, have outstanding loans), the downgrade means it will be much more difficult for drillers to get their hands on new money. And if they can somehow get their hands on new money, it’s going to cost them a lot more to do it, i.e. higher interest rates. Word on the street is that banks are feeling the pressure from the Federal Reserve and the OCC and will “reduce most energy company credit lines by roughly 20-40 percent this month.” Ouch. Banks have pretty much quit financing coal projects. According to one source, “Crude oil and natural gas productions may not be far behind.” Here’s the low down…
Yesterday MDN brought you a copy of a fascinating new study published by the Interstate Natural Gas Association of America (INGAA). The new study is titled “North American Midstream Infrastructure Through 2035: Leaning into the Headwinds” (see 
MDN is strongly in favor of property rights. “You don’t tell me I can’t allow drilling a shale well or a pipeline–and I don’t tell you that you must allow it.” That’s always been our guiding philosophy. It pains us when pipeline companies use eminent domain to force landowners to allow a pipeline to be built. Having said that, it’s a pipeline! It’s underground. Farmers can plant crops over top of it after it’s in the ground. After a few years, you’re hard pressed to even tell where the pipeline is buried! We say if there’s widespread opposition to pipelines in a given community, don’t bother building it there. However, if there’s a handful of holdout landowners (often driven by global warming insanity), eminent domain may be justified. Life is complex. These issues are complex. Again, forcefully using eminent domain against any landowner–even the stupid anti-drilling ones–pains us. We don’t like it. But eminent domain is part of our laws, created to benefit wider society. We spotted an article about some Massachusetts landowners who equate opposing Kinder Morgan’s Northeast Energy Direct pipeline with being patriotic, like the patriots from the original Boston Harbor Tea Party revolt. We had to laugh…
Once a month our favorite government agency, the U.S. Energy Information Administration (EIA), issues a Short-Term Energy Outlook (STEO). The EIA issued their latest edition on Tuesday. We have a full copy below. We’ve grabbed out the section on natural gas because it includes a couple of key points: (1) U.S. natural gas inventories just finished the winter heating season at their highest level ever, and are expected to be at a record high at the start of next winter heating season in November. (2) This summer natural gas consumption for electricity generation is expected to reach a record high. Here’s the natgas section of the STEO, along with a copy of the full report…
In March MDN told you that Alpha Natural Resources (ANR), primarily a coal company with 27,400 acres of Marcellus/Utica Shale leases, was throwing in the towel and calling it quits (see
NGLs, or natural gas liquids, are the “other” hydrocarbons that come out of the ground along with methane, or natural gas. The most common NGLs that come out of Marcellus and Utica boreholes in southwestern PA, eastern OH and northern WV are ethane, propane and butane. Ever so gradually new markets are opening up to sell NGLs. Right now for many drillers in the region ethane, the most common NGL, actually costs drillers to dispose of. It is an expense. But ethane could be used to feed cracker plants and so much more! Pipelines are beginning to cart NGLs to other regions like Canada, the Gulf Coast and (now) to the Philadelphia area where the NGLs can either be used in petrochemical plants or exported to be used in petchem plants overseas. But what if drillers had a way of storing NGLs until they could get access to pipelines or rail or new petchem plants to use it? That’s the premise behind a brand new startup called Mountaineer NGL Storage. Started by a group of industry veterans and backed with big money from Goldman Sachs, Mountaineer NGL Storage is developing a new underground storage facility in Monroe County, Ohio, near Clarington, along the Ohio River. Yesterday the company announced a non-binding open season for drillers who want to reserve storage capacity in the new facility when it goes live sometime in 2018…
Please bow your head in a moment of silence for the 70,000 fallen. Who? More like what. In June 2014 crews were working to frack a Utica Shale well at a Statoil drill pad in Monroe County, OH when hydraulic tubing (not to be confused with fracking) from some of the equipment caught fire. The fire quickly spread to 20 trucks lined up at the pad, burning the trucks (some of them exploding) and creating thick, black smoke that billowed for hours (see 
Yesterday the Pennsylvania State House and Senate energy committees voted to disapprove the state Dept. of Environmental Protection’s proposed new Article 78 and 78a drilling rules. In February when the Pennsylvania Environmental Quality Board (EQB) approved the new regulations after those regs were vigorously opposed by conventional drillers in the state, the Pennsylvania Independent Oil & Gas Association (PIOGA) blasted the decision calling the DEP “deceptive” (see 
Last week MDN brought you news that mainstream media has all but ignored, in hopes of burying it: Cabot Oil & Gas has filed a legal motion to appeal the OJ jury decision to award two landowner families in Dimock, PA $4.24 million (see 
Forget about drilling, infrastructure is where it’s at baby! That’s our words summarizing a new study just released by the Interstate Natural Gas Association of America (INGAA). The new study, titled “North American Midstream Infrastructure Through 2035: Leaning into the Headwinds” (full copy below) says the U.S. and Canada need to invest $546 billion (real 2015$) total over the 21-year period from 2015 to 2035–or $26 billion per year–in natural gas, crude oil and natural gas liquids infrastructure. Natural gas infrastructure includes “gathering and transmission pipelines, compressors, laterals, gas-lease equipment, processing, gas storage and liquefied natural gas export facilities” (NGI). Our tongue-in-cheek opening statement isn’t completely true. You need drilling or sooner or later you have no gas to flow through the infrastructure. However, for the time being, investors (and engineers and construction firms, etc.) need to pay attention to infrastructure buildout…
The International Gas Union (IGU) released their “2016 World LNG Report” at the LNG18 conference yesterday taking place in Perth, Australia. The report (we have a full copy below) shows global LNG, or liquefied natural gas, is set to grow. It will play an increasingly important role in the world’s energy mix. In addition to giving a great overview of the worldwide LNG industry, the report contains some really cool appendices, including a list of active liquefaction (i.e. export) plants, a list of export plants under construction, a list of receiving terminals (and terminals under construction), and a list of LNG ships that cart it from point A to point B. LNG, as we’ve said a number of times, will be an important market for Marcellus/Utica drillers. We look at this report like “everything you wanted to know about LNG”…
In an interview on CNBC, Chevron chairman and CEO John Watson said some interesting things. Among them: Watson believes the oil markets will “balance out” (price/production-wise) in the “coming months.” He also spoke about the prospects for LNG, saying it’s “maturing” and we are entering “a new phase”…