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    FERC OKs Tree-Cutting for Constitution Pipeline – in PA

    In a crushing blow to anti-drilling radicals who have tried their best to stop the Constitution Pipeline, the Federal Energy Regulatory Commission (FERC) has granted Williams, builder of the Constitution, permission to begin cutting down trees along the pipeline’s path in Pennsylvania. Williams still cannot fell trees in New York State, where the bulk of the pipeline will be built. However, FERC would not grant permission for PA unless they intend to grant permission on the other side of the border too–and everyone knows it. Currently New York’s anti-drilling governor, Andrew Cuomo, is holding up the 125-mile project that will deliver natural gas from Susquehanna County, PA to Schoharie County, NY by connecting with two interstate pipelines. Cuomo is about to create a constitution crisis in which the federal government will be forced to overrule the state and allow the pipeline to be built. Cuomo is withholding stream crossing permits–the only thing left before bulldozers begin to clear a path. Cuomo is once again caving to pressure from his lunatic left base of supporters. And he’s about to turn New York into a third-rate state, controlled by the federal government, through his unwillingness to grant the permits…
    Read More “FERC OKs Tree-Cutting for Constitution Pipeline – in PA”

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    OH’s “Low” Severance Tax will Raise $30M+ in FY 2016

    For all of Ohio Gov. John “foreigner hunter” Kasich’s bellyaching about a low severance tax, the state is doing very nicely, thank you. According to a report appearing in the Akron Beacon Journal, the severance tax collected mostly from Utica Shale wells in the Buckeye State for fiscal year 2016 (runs from July 1, 2015 throught June 30, 2016) could top $30 million. That pales in comparison to the $200 million or so Pennsylvania collects each year via an impact fee, their version of a severance tax. PA collects 6.5 times more in taxes on drilling than Ohio–but then again, there are 6.5x more wells drilled in PA than in OH…
    Read More “OH’s “Low” Severance Tax will Raise $30M+ in FY 2016″

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    The Truth About “Green” Electric Cars & What Really Powers Them

    This may offend some, but it has to be said. Electric cars are manufactured to make rich, white liberals feel good about themselves–like they’re actually doing something to Save the Planet. The truth behind electric cars, however, is the opposite of what they believe. The thinking goes like this: “I’ll buy and drive an electric car and by doing so I’ll show all of my rich, white friends just how Green I am.” Here’s the truth: In 2015, 61% of all electricity was produced by either natural gas (31%) or coal (30%)–evil, vile, nasty fossil fuels, in the eyes of the rich, white liberal elites. Another 20% of electricity was produced by nuclear power plants, giving us a grand total of 81% of electricity running in those electric cars comes from “dirty” sources, in the minds of the libs. Do they realize that? Do they know their so-called “green” cars are actually powered mostly by fossil fuels? Another statistic: In 2015, 9% of all electricity in the U.S. was produced by so-called renewables, like wind and solar. Still feel good about yourselves, you dolts? In what can only be considered a laugh-out-loud moment, last week the American Council for an Energy-Efficient Economy (ACEEE) released its 19th Annual Comprehensive Environmental Ratings for Vehicles. Electric vehicles (EVs) got 9 of the top 12 spots in the ACEEE Environmental Vehicle Rankings for being “greenest.” There’s also a list of “greener” vehicles, and (of course), a list of “meanest” vehicles–those that use nasty fossil fuels and belch out carbon dioxide (the same thing you exhale with every breath). The ACEEE rating is yet another attempt to make rich, white libs feel good about themselves…
    Read More “The Truth About “Green” Electric Cars & What Really Powers Them”

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    Blue Racer Midstream: Keeping a Sharp Eye on the Bottom Line

    Blue Racer Midstream is a joint venture between Caiman Energy II and Dominion. It is a privately-held company, so we don’t have SEC reports and public statements about the company from which to gage how it’s doing. However, every now again Blue Racer’s upper management shows up at an industry conference. Last week Blue Racer’s relatively new CEO, Stephen Arata, spoke at the Hart Energy Marcellus-Utica Midstream event in Pittsburgh. It’s no surprise that Arata said the company has had to curb spending and growth, giving the downturn in oil and natgas prices…
    Read More “Blue Racer Midstream: Keeping a Sharp Eye on the Bottom Line”

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    Why Can’t We be Friends: Can Coal & NatGas Get Along in WV?

    Can’t we all just get along? That was the message from Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association, in responding to a call from Murray Energy CEO Robert Murray that West Virginia should trim the coal severance tax from 5% to 2%, and raise the natural gas severance tax from 5% to whatever in order to give coal a break in the Mountain State. Murray went after natural gas in a speech last week at the West Virginia Coal Mining Symposium in Charleston, WV. It appears Murray’s philosophy is “every man for himself” when it comes to government taxation. He’s wrong. Here’s why…
    Read More “Why Can’t We be Friends: Can Coal & NatGas Get Along in WV?”

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    CNG for 34 Cents/Gal Equivalent! Fill ‘Er Up for Price of a Coke

    This story will appear to be inaccurate, or a “too good to be true” story. We assure you it is not. In December Congress passed a new law granting a retroactive (for 2015) tax cut on alternative fuels, and proactive tax cut for 2016. It amounts to a 50 cent savings per gallon equivalent for things like compressed natural gas (CNG). Following the tax cut, 7-Eleven Stores in Oklahoma at their locations with CNG pumps, reduced the price of their CNG to 39 cents per equivalent gallon of gasoline. If you use the 7-Eleven debit card, you can get it for 34 cents per equivalent gallon. No lie: you can fill up your CNG car up at 7-Eleven for little more than the price of a 20-ounce bottle of Coca Cola! Now THAT’s incredible…
    Read More “CNG for 34 Cents/Gal Equivalent! Fill ‘Er Up for Price of a Coke”

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    Chevron 4Q15: First Quarterly Loss in 13 Years, Scaling Back 2016

    Chevron, one of the country’s largest oil and gas companies (with a sizable drilling operation in the Marcellus/Utica) issued its fourth quarter and full year 2015 update last Friday. It was not good news. Chevron lost money in 4Q15–their first quarterly loss in 13 years. The reason? Upstream (or drilling) got “crushed” due to low commodity prices for oil and gas. The news has created jitters on Wall Street. This week three more majors are due to release their updates: ExxonMobil, BP and Shell. Investors are worried they may show losses too. In their Upstream division, Chevron lost $1.9 billion in 4Q15 over 4Q14, and they lost $4 billion for the entire year, after making $3.3 billion in 2014. Chevron is a BIG company, so don’t fret. They still made money company-wide. Although Chevron lost $588 million in 4Q15 (company-wide), they made $4.6 billion of net income for full year 2015…
    Read More “Chevron 4Q15: First Quarterly Loss in 13 Years, Scaling Back 2016”

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    IHS Says Hedging Woes Ahead for E&Ps in 2016 & 2017

    A new study from oil and gas powerhouse research firm IHS says there’s problems ahead for U.S. drillers because of hedging. Hedging is a complicated trading activity that reduces risk. In plain English, drillers lock in prices for the gas they will sell in the future–several months or even years in advance–today. On the up-side they get a lot more money for their gas. One of the masters of hedging in the Marcellus/Utica is Antero Resources (see Antero Resources 4Q15 Update: NatGas Sales Averaged $4.40/Mcf). On the down side, you’re not able to lock in prices that earn you a profit. That’s the situation facing drillers as hedges in 2016 and 2017 “roll off” and companies are negotiating new contracts that just aren’t all that great. According to IHS’ “Comparative Peer Group Analysis of North American E&Ps” (unfortunately we don’t have a full copy) in 2016 will see a decline in hedging, and 2017 will be even worse…
    Read More “IHS Says Hedging Woes Ahead for E&Ps in 2016 & 2017”

  • Marcellus & Utica Shale Story Links: Mon, Feb 1, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH groups & officials lobby for drilling in Wayne Natl Forest; latest Duke shale study comes up short; the collapse of shale gas production has begun; a look at the LNG market; the “great divide” between crude & natgas prices; Chesapeake’s next move; Halcon Resources may not survive; why the Paris climate agreement will fail; and more!
    Read More “Marcellus & Utica Shale Story Links: Mon, Feb 1, 2016”

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    New Effort to Pass HB 1391 Minimum Royalty Bill in PA

    Garth Everett
    Garth Everett

    Last June MDN told you about a renewed effort by Pennsylvania State legislators to pass a minimum royalty bill that will guarantee PA’s landowners get at least 12.5% royalties (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). House Bill (HB) 1391 is was introduced by State Rep. Garth Everett, Republican from Lycoming County, PA. Everett said in June the new bill was “narrowed” in focus from a previous bill (that had failed) and because the more narrowed focus, he hopes the Marcellus industry will not oppose it this time around. The issue of guaranteeing minimum royalties is one of those rare issues that has divided the drilling industry and landowners. Everett said he hasn’t (until now) pushed the bill because of the budget stalemate, but now that the budget impasse is mostly over, he’s going to make a renewed effort to get HB 1391 passed…
    Read More “New Effort to Pass HB 1391 Minimum Royalty Bill in PA”

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    Baker Hughes 4Q & Full 2015 Update: Blood Everywhere

    Yesterday oilfield services giant Baker Hughes (with a big presence in the Marcellus/Utica) released fourth quarter and full year 2015 results. There’s blood everywhere. Revenue for the year was $15.7 billion, down $8.8 billion compared to $24.6 billion for 2014, a 36% drop. Of course, average rig counts dropped 34% in 2015, so it’s no wonder revenues tanked–the service Baker Hughes provides was more than one-third less in demand. Looking at 4Q15 only, revenue for the quarter was $3.4 billion, down $3.2 billion (or 49%) compared to the fourth quarter of 2014. Ouch, there goes another arterial wound with blood pumping out on the floor. The good news, if there is any, is that the company kept expenses in check. According to Baker Hughes CEO Martin Craighead, “Despite this challenging environment, we generated $1.2 billion of free cash flow during the year, after more than $446 million of restructuring payments. This achievement was the result of our ongoing commitment to maintain capital discipline, as well as solid progress on initiatives to improve working capital.” As for the Halliburton shotgun wedding, Craighead said, “With regard to the merger, I continue to be extremely pleased with the efforts of our team supporting the regulatory review process and developing plans for a successful integration. We are fully dedicated to closing the merger as early as possible.” What’s ahead for 2016? “Looking ahead, we are forecasting rig activity worldwide to continue to decline throughout 2016. At current commodity prices, the global rig count could decline as much as 30% in 2016, as our customers’ challenges of maximizing production, lowering their overall costs, and protecting cash flows are now more acute.” Eeks, another bleeder. Below are select portions of yesterday’s bloody update…
    Read More “Baker Hughes 4Q & Full 2015 Update: Blood Everywhere”

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    5 New Pipelines Now Give Northeast Drillers Access to New Markets

    Our favorite government agency, the U.S. Energy Information Administration, continues to pump out the hits. Yesterday we highlighted a story from the EIA about the price of natural gas in the Marcellus/Utica gradually rising because new pipelines have provided new markets for northeast drillers (see EIA: New Pipelines Continue to Boost Marcellus/Utica Gas Prices). Today we bring you another great EIA story. This one does a deep dive into five pipelines that have come online in late 2015/early 2016 and that are now providing drillers with access to new markets that pay more for gas than they can get here at home…
    Read More “5 New Pipelines Now Give Northeast Drillers Access to New Markets”

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    It’s a Deal – BG Shareholders Approve Shell Buyout

    In the end, it wasn’t even close. Some 99.5% of BG Group’s shareholders voted to approve the sale/merger of the company with Shell at a meeting yesterday. Earlier this week 83% of Shell’s shareholders voted to approve the merger (see Shell Shareholders Vote in Favor of BG Buyout/Merger). As we’ve said from the beginning, this is an LNG love story–Shell wanted BG for its natural gas market share. The Shell/BG merger will create the world’s dominant LNG company, by far. The buyout/merger is, for Shell, it’s largest-ever acquisition. Just how big is this deal? The Shell/BG merger is the largest oil and gas deal since Exxon bought Mobil in 1999. The merger will be consummated on February 15. As we’ve previously noted, Shell plans to lay off 10,000 people across both companies once the merger is complete. Happy Valentine’s Day…
    Read More “It’s a Deal – BG Shareholders Approve Shell Buyout”

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    Southern NJ NatGas Pipeline Approved by State BPU

    In January 2014 MDN brought you the very sad news that through bullying and intimidation, radical environmentalists from the New Jersey Sierra Club and the League of [Liberal Democrat] Women Voters had pressured the New Jersey Pinelands Commission into rejecting a plan for a 22-mile natural gas pipeline that would power an electric generating plant–replacing coal that powers the plant now–and also bring natural gas to residential homes in beautiful Cape May County, NJ (see Sierra Club, LWV Chooses Coal over NatGas in South Jersey). These so-called environmentalists would rather have the residents of South Jersey breath dirty air rather than clean air that comes from natural gas powering a local electric plant. We’re happy to report that a different pipeline, a $130 million, 30-mile natural gas pipeline just north of where the rejected pipeline would have run, has been approved by the NJ Board of Public Utilities (BPU). It is a major defeat of the Sierra Clubbers and their ilk. So of course, the Clubbers are suing…
    Read More “Southern NJ NatGas Pipeline Approved by State BPU”

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    Beaver, PA Anti-Frackers Want County to Ban Marcellus Drilling

    Last night a couple of anti-fossil fuel residents in Beaver County, PA addressed the new Beaver County Commissioners board at their first meeting of 2016. Both are from the Beaver County Marcellus Shale Awareness Committee, a group formed in 2010 to oppose Marcellus Shale drilling in the county. The two want the commissioners to ban fracking in the county. One of the two, with a receding hairline, gray hair and a ponytail (a sure sign he was once a 60s hippie), calls himself a Reverend and claims a bunch of liberal churches–even the pope!–are against fracking. The Rev doesn’t care much for Shell’s plan to build an ethane cracker in the county either. His alternative? Stick a bunch of solar panels on that site. Yes, we literally fell out of our chair laughing…
    Read More “Beaver, PA Anti-Frackers Want County to Ban Marcellus Drilling”