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    Obama’s Final Disastrous Budget Targets Fossil Fuels

    In a final, parting shot at the fossil fuel industry, President Obama yesterday introduced what will be his final budget (thank God!). The plan calls for a new 25 cents per gallon tax on gasoline, cleverly disguised as a $10 per barrel “fee”–to be phased in over five years, long after Obama has retired to the links on some golf course in Hawaii. The fee would go to pay for the highway fund, and (of course) to fund Big Green projects (i.e. line the pockets of his supporters). The man knows no shame. The plan is clearly meant to force America away from using fossil fuels as an energy source, what the American Petroleum Institute calls Obama’s “leave it in the ground” strategy. The thing is, we don’t know of more than half a dozen Republicans on Capitol Hill (who happen to control Congress) who still possess their male equipment. Senate Majority Leader Mitch McConnell is the Emasculated-in-Chief himself. Will McConnell oppose this plan? Probably not. And that’s scary…
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    Seventy Seven Energy Releases Cherry-Picked Numbers

    It must be worse at oilfield services company Seventy Seven Energy (SSE) than we thought. The former Chesapeake Energy Oilfield Operating unit that was spun into its own company a few years ago. In January SSE announced they had hired a turnaround expert (see Seventy Seven Energy Hires Turnaround Expert, Hopes to Stay Afloat). Not long after that, also in January, the New York Stock Exchange threatened the company with delisting (see Seventy Seven Energy’s Stock Threatened with Delisting from NYSE). Although third quarter 2015 results were bloody, it seemed to us the situation was improving at SSE (see Seventy Seven Energy 3Q15: Still Losing Money, But Not as Much). However, SSE has just released a preliminary fourth quarter and full year 2015 update–and the update is nothing more than a few cherry-picked facts and figures. No financials. No updates for their various divisions. No context at all. Just a few facts and figures plucked to make the company look as good as it possibly can–until the other shoe drops when they have to release their financials…
    Read More “Seventy Seven Energy Releases Cherry-Picked Numbers”

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    Natural Gas Breaks Another Record in Generating Electricity

    One of the ongoing stories over the past year or more has been the tightening relationship between natural gas and electric power. What do they have in common? Last year natgas edged out coal to become the number one fuel source that powers electric generating plants in the U.S. The electric generation market is already a hugely important market for natural gas, and it’s only going to increase in the coming years. Especially now that Obama’s Clean Power Plan has been put on hold by the Supreme Court (see today’s companion story). Our friends at the U.S. Energy Information Administration (EIA) have authored another great story for their Today in Energy series–this one about natgas use in power generation. According to the EIA, “So far this winter, natural gas consumption in the electric power sector (gas burn) has been higher than in any previous winter.” Here’s the full story from the EIA…
    Read More “Natural Gas Breaks Another Record in Generating Electricity”

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    New CNG Tanks on the Way for Passenger Vehicles – Game Changer?

    There’s been a break through in technology used for compressed natural gas (CNG) fuel tanks used in cars and trucks. Until now, the typical CNG fuel tank must be big and bulky and holds compressed gas at a pressure of 3,600 pounds per square inch (psi). United Technologies Corp. has innovated a new tank that is much smaller, using “activated carbon adsorbents” technology that will allow CNG to be stored at 1,000 psi. United Technologies has licensed their technology to Adsorbed Natural Gas Products, Inc. which will manufacture the new fuel tanks. If this catches on, it has the potential to up-end the passenger vehicle market by making CNG as attractive and convenient as gasoline–which would expand natural gas demand…
    Read More “New CNG Tanks on the Way for Passenger Vehicles – Game Changer?”

  • Marcellus & Utica Shale Story Links: Wed, Feb 10, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Kinder Morgan eyes more NY locations for compressor station; permits & rig count weak in OH; world’s largest energy trader thinks oil price low for next 10 years; shifting energy markets end crude by rail reign; different strategies for different boards; UK charity lies about anti-fracking activity; and more!
    Read More “Marcellus & Utica Shale Story Links: Wed, Feb 10, 2016”

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    Chesapeake Energy: We’re Not Filing for Bankruptcy…Yet

    saying not yetChesapeake Energy’s stock plunged on Monday after a report in Debtwire said the company has retained a restructuring firm to help the company cope with $9.8 billion in debt. “Restructuring” is typically a nice way of saying “bankruptcy protection.” When the market caught wind of “restructuring” that’s just what they thought–and started selling like crazy. A year ago Chesapeake’s stock stood at $22 per share. Yesterday end of day it closed at $2.05 per share–down 33% from Friday and down over 90% in the last year. Chesapeake, in an attempt to get out in front of this latest turn of events, issued a statement yesterday saying the firm they’re using is nothing new–the firm was hired in 2010 and continues to advise the company. (Reuters reported that the firm was recently asked to evaluate restructuring for the company.) Chesapeake, with debt eight times the market value of the company, said in yesterday’s statement: “Chesapeake currently has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders.” Saying you have no plans to do something is also saying at some point you may well do that thing. Publicly traded companies have to be careful with their statements because shareholders may come back to sue them later if they somehow feel mislead. So perhaps we should read Chessy’s statement like this: “We don’t want to declare bankruptcy, we have no intention of doing so, but if that’s the only option left, we will.” Here’s a recap of this still developing story…
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    Pipeline Companies May Lose Big-Time if Chessy “Restructures”

    Yesterday’s free fall of Chesapeake Energy’s stock based on rumors that the company may be considering bankruptcy (see today’s lead story) is not only affecting Chesapeake’s stock price. It’s also affecting the stock price of Energy Transfer Equity and Williams, two huge midstream companies. Why? ETE, you may recall, is in the process of buying Williams for $37.7 billion (see Looks Like a March 2016 Wedding for ETE & Williams). The main reason ETE is buying Williams, with its major presence in the Marcellus/Utica, is because of long-term contracts to use its pipelines in the northeast. One of Williams’ main customers with those long-term contracts is (yes) Chesapeake Energy. What if Chessy is forced to renegotiate or cancel or otherwise can’t honor those contracts? Whoops. There goes one of the big reasons for the deal in the first place. Which may explain why ETE’s stock went from $7.01 on Friday to closing at $4.09 yesterday (down 42%), and why Williams’ stock went from $17.11 on Friday to closing at $11.16 yesterday (down 35%). Here’s how/why Chesapeake’s troubles will not only affect ETE and Williams, but other midstream companies like Spectra Energy, Columbia Pipeline Partners and Marathon Petroleum as well…
    Read More “Pipeline Companies May Lose Big-Time if Chessy “Restructures””

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    PA Republicans Commit Adultery with Severance Tax – Again

    What is it with Republicans in Pennsylvania? They’ve just won a major victory by not putting a bullet in the head of the Marcellus Shale industry, i.e. by not implementing Gov. Tom Wolf’s horrible idea of a severance tax. Major victory. But then they return to a severance tax like a cheating spouse who is serially unfaithful. Some Pennsylvania “Republicans” in the state legislature are once again committing adultery with a Marcellus-killing severance tax plan–the day before Wolf re-introduces such a losing plan for a second year in a row. The PA House Environmental Resources and Energy Committee held an informational meeting yesterday to consider two Republican-backed severance tax bills. One bill is being floated by Rep. Kate Harper, RINO-Montgomery County, the other by Rep. Scott Petri, RINO-Bucks County. Notice both RINOs are from the Philly vicinity, which is where most of the nonsense typically comes from. Even House Majority Leader David Reed, R-Indiana County, seems to be going squishy. His mouthpiece said, “It’s just prudent to kind of go through these bills and see what they do.” We disagree. The chairman of the House Environmental Resources and Energy Committee, Rep. John Maher, RINO-Allegheny County, is a sellout too, saying: “I think that there are many people who are open to the idea of a properly crafted severance tax.” With “Republicans” like these, who needs Democrats?…
    Read More “PA Republicans Commit Adultery with Severance Tax – Again”

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    Mountaineer XPress Pipeline Seeks Tax Break from WV Counties

    Columbia Pipeline Group is trying to convince counties in West Virginia where its proposed Mountaineer XPress Pipeline will be built, to reduce the amount of property tax they will have to pay under WV state law. Mountaineer XPress Project (MXP) includes 165 miles of new pipeline from Marshall County, WV to Wayne County, WV with approximately 2.7 billion cubic feet per day (Bcf/d) of transportation capacity from existing and future points of receipt along or near CPG’s system (see Columbia Pipeline’s Mountaineer XPress Project Accepted by FERC). In addition to new pipeline, the $2 billion project also includes constructing three new compressor stations and upgrading three existing stations. Columbia is shopping the concept of a PILOT–a Payment In Lieu Of Taxes. Such a plan essentially means they will pay less money than a county would otherwise collect in regular property taxes on the pipeline. Here’s the strange thing–the counties and school districts affected would end up keeping more of the money collected from PILOT payments than they would from regular property tax payments. It’s actually a win/win–Columbia pays less and more of the money paid stays local. Go figure…
    Read More “Mountaineer XPress Pipeline Seeks Tax Break from WV Counties”

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    Antis Not Happy with Results of OH Fracking Study They Funded

    Researchers from the University of Cincinnati have been studying fracking and its potential affects on water wells in five Ohio counties for the past three years. The lead researcher, Dr. Amy Townsend-Small, shared the results at a recent meeting of the anti-drilling Carroll Concerned Citizens. She said, “The good news is that our study did not document that fracking was directly linked to water contamination.” Oh oh. That’s NOT good news for antis–and frankly, they didn’t like her telling them the truth of what her study found. Townsend-Small also said this, “I’m really sad to say this but some of our funders, the groups that had given us funding in the past, were a little disappointed in our results.” You can be sure that any future funding for studies Townsend-Small wants to make, at least from radical environmentalists, will be nonexistent. She had the temerity to tell the truth–to the people who hired her to not tell the truth. That takes courage…
    Read More “Antis Not Happy with Results of OH Fracking Study They Funded”

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    Lawyer Tells NH Landowners ‘7 in 10 Chance’ Pipeline is Coming

    A lawyer meeting with a group of New Hampshire landowners in New Ipswich, NH last night gave them a dose of cold, hard reality. He told them, “There’s a seven out of 10 chance this pipeline is going to come” through their town, referring to Kinder Morgan’s Northeast Energy Direct pipeline. He told those present they can fight it, they can not negotiate with Kinder Morgan, and if they do so, it’s to their own peril. His solution? Band together as a group and negotiate good terms and conditions for the pipeline. Have a say in the matter. In other words, don’t be jerks–be reasonable and understand whether you want it or not, it’s coming. And if you negotiate now, you’ll get a better deal than if behave like petulant children…
    Read More “Lawyer Tells NH Landowners ‘7 in 10 Chance’ Pipeline is Coming”

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    Board Shakeup at CONSOL Energy – 3 Retire, Including Chairman

    There’s been a major shakeup at CONSOL Energy at the highest level. Three CONSOL board members are out, three new members are in, and the current Chairman of the Board, J. Brett Harvey, has been replaced as chairman and will assume the honorary role of Chairman Emeritus. This all could have been in the works for weeks or months–likely it was. But until CONSOL announced it yesterday, we’d not heard a peep about it. A major change in the board typically indicates a change in direction for the company. We’ll keep an eye out to see if that indeed is what happens. Here’s CONSOL’s announcement of who’s out and who’s in on their board of directors…
    Read More “Board Shakeup at CONSOL Energy – 3 Retire, Including Chairman”

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    Goldboro LNG Project Gets Final DOE Approval – Good for Marcellus

    The U.S. Dept. of Energy (DOE) has been pedal to the medal lately with approvals for LNG exports. Yesterday we told you that the Bear Head LNG project in Nova Scotia, Canada received DOE approval to export U.S. natural gas from their facility to non-U.S. free trade agreement counties (see Bear Head LNG Exports Get Final DOE Approval – Good for Marcellus). Today we bring you the news that another Nova Scotia LNG project, Goldboro LNG, has also received approval from the DOE to export natgas to non-free trade agreement counties. Like Bear Head LNG, Goldboro LNG is now fully permitted and permissioned by the U.S. and Canada. Also like Bear Head, the Goldboro project will depend on natural gas coming from the Marcellus/Utica, and that won’t happen until the Maritimes & Northeast pipeline reverses its flow, and until either Kinder Morgan or Spectra Energy (or both) build pipelines that connect to it. There’s a lot of ifs/ands/buts that still remain–but sign-off by the DOE is a necessary and positive sign…
    Read More “Goldboro LNG Project Gets Final DOE Approval – Good for Marcellus”

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    IHS Says Drillers Need to Cut Spending 50% *This Year*

    Yesterday MDN highlighted a couple of “bad news for the Marcellus” stories: The Dismal Outlook for Marcellus/Utica Drilling in 2016 and Rig Counts for World, US & Marcellus/Utica Continue to Tumble. We’re aware that at least one anti group picked up and repeated our stories to their email list–no doubt as a twisted celebration of some sort. So be it. At MDN we don’t sugarcoat the truth. It is bad out there and will continue to be most likely for this year and into next year. We’re not the only ones who don’t sugarcoat the truth. IHS, a highly respected oil and gas research firm, is out with more analysis of their IHS Energy Comparative Peer Group Analysis of North American E&Ps. In this latest analysis, IHS uses words like “gloomy outlook” and says drillers (E&Ps), in order to stay afloat, will need to spend about 50% less in 2016 than they did in 2015…
    Read More “IHS Says Drillers Need to Cut Spending 50% *This Year*”

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    Halcon Tries to Calm Jittery Investors with “Everything is OK” Statement

    As we told you a few weeks ago, Halcon Resources has suspended dividend payments for their preferred stockholders (see Halcon Resources Suspends Dividend Payments for Preferred Stock). Halcon is facing rumors that the company is in trouble financially. Apparently to counter those rumors, the company released the following statement yesterday…
    Read More “Halcon Tries to Calm Jittery Investors with “Everything is OK” Statement”

  • Marcellus & Utica Shale Story Links: Tue, Feb 9, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Cracker plant limbo; Appalachian gas demand lags; Chief wants Atlantic Coast Pipeline, now; natgas billionaire buying NYC property; OH drillers using more water; pipeline standards in OH updated; WV looking to eliminate some natgas taxes; Halliburton-BH merger in trouble; shale bust isn’t busting as fast as thought; Hillary will ban fossil fuels on ‘public land’; and more!
    Read More “Marcellus & Utica Shale Story Links: Tue, Feb 9, 2016”