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    MarkWest’s Mobley Processing Plant Spills Hazardous Oil into Creek

    There’s been an accidental release of a hazardous chemical at the MarkWest Energy cryogenic processing plant in Mobley (Wetzel County), WV. The spill was discovered Saturday morning by MarkWest workers. MarkWest’s Mobley plant separates natural gas from natural gas liquids (NGLs). The NGLs are sent on for further separation into their component parts at a fractionation facility. The fluid in question is DOWTHERM™ MX Heat Transfer Fluid, a chemical used as as a heat transfer fluid meant for closed-loop systems. An estimated 3,000 gallons of the fluid spilled, some of it reaching the North Fork of Fishing Creek and some of that entered the water intake for the community of Pine Grove, WV. The fluid was contained at the water plant and did not get into the public’s water supply–but just to be absolutely safe, some 360 households connected to the public water supply were cautioned to not drink or bathe in the water until further notice. MarkWest is providing bottled water to residents. Here’s what’s known so far…
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    Cabot O&G 2015: $114M Loss, Drilled 142 Wells, Production Up 13%

    We consider Cabot Oil & Gas one of the bellwether Marcellus drillers that provides a good measuring stick for where the industry is heading. Last Friday Cabot released their fourth quarter and full year 2015 financial results. What did it show? In 2014 Cabot made $104 million after expenses. In 2015, the company lost $114 million after expenses. But that’s not the whole story. Cabot has been disciplined in their spending. If you look at net income or loss for the fourth quarter, in 2014 Cabot lost $222 million–but in 4Q15 they lost $111 million. That is, they’re getting better at reigning in costs. And Cabot is already a low-cost leader. The big battle they faced in 2015 and continue to face is lack of pipeline takeaway capacity. NY Gov. Andrew Cuomo is punitively withholding approval of stream crossing permits for the Constitution Pipeline and that is damaging Cabot (we think they have a good case for a lawsuit). Because Cabot must sell most of their gas locally, they get bottom of the barrel prices. In 2015 they averaged a price of $2.15 per thousand cubic feet (Mcf) for the gas they sold. Hence, they began to shut-in some of their wells and vastly slowed down drilling. In 2014 Cabot drilled 200 wells. In 2015, that number slide to 142 wells. Even with shut-in wells and less drilling, Cabot still managed to grow production by 13% in 2015 over 2014. Here’s Friday’s Cabot update…
    Read More “Cabot O&G 2015: $114M Loss, Drilled 142 Wells, Production Up 13%”

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    Dimock Trial Starts Today – 2 Families Try to Shake Down Cabot

    Dimock, PA is the story that just doesn’t die. We thought the story of methane migration into nearby water wells in a small area of Dimock, PA (from Cabot Oil & Gas wells) had long since been put to bed. There were 14 families along the Carter Road area that reportedly experienced turbidity in their water from methane migrating from drilling operations nearby. The state Dept. of Environmental Protection investigated in 2010 and declared Cabot guilty and imposed some pretty stiff fines and requirements, including a requirement to install permanent water treatment systems at each home and even an offer to each of the families to pay twice what their property was worth at the time (see PA DEP Takes Aggressive Action Against Cabot Oil & Gas over Dimock Township Methane Contamination). We won’t recount all of the twists and turns we documented over the years, including research that showed Cabot wasn’t responsible for the methane migration. All of the properties either sold to Cabot or got their water systems repaired–except for two holdout families who are riding the horse of hope that they can sue Cabot for big money and retire millionaires. Of course the only people making money on the lawsuit are their lawyers–but that doesn’t seem to bother them. The final two holdouts in Dimock get their day in court beginning today. Except their lawyers sleazily tried to sneak in a bunch of “evidence” at the last minute–and the judge has ruled they can’t use it. In fact, the judge called the move a “sad and shocking spectacle.” No one can predict the court’s outcome for sure, but given what’s happened so far, it’s pretty easy to predict that Cabot will win this one and then the final chapter will be written in the long, sordid tale of how anti-drillers tried to demagogue the Dimock situation–and lost…
    Read More “Dimock Trial Starts Today – 2 Families Try to Shake Down Cabot”

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    Residents of NEPA Village Want Marcellus Leasing & Drilling

    We’ve written in the past that in most cases villages and cities don’t participate in leases and being drilled under not because of any inherent danger (the drilling happens a mile or more down, through solid rock), but because of practical reasons. It’s far easier in time and effort and expense to lease the property of two or three farmers/landowners who own hundreds of acres than it is to lease tiny quarter-acre or less parcels you find in a village or city. One drilling unit is sometimes one or two landowners (maybe a half dozen at most), whereas a drilling unit of one square mile (640 acres) in the village may involve hundreds of landowners. Those hundreds all need to read and sign a lease, and their deeds need to be research to be sure it’s a clear deed and the person signing actually owns the mineral rights. It’s a daunting task. But some communities are up for the challenge. In some communities, like New Milford, PA (in Susquehanna County, about 20 miles from MDN headquarters), the village (in this case called a borough) some residents WANT to sign a lease and get drilled under. The borough held a meeting last week to discuss the possibility…
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    Judge Tells NEPA Family to Let Williams Cut Maple Trees, Or Else

    Starting this week the sugar maples along the path of the Constitution Pipeline will come down. MDN previously told you about the Holleran family in New Milford, PA who make maple syrup by tapping the trees on their five acres of land (see Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It). While it’s unfortunate that Williams, the builder of the pipeline, could not find an alternate route (they did try), and unfortunate that media reports say up to 80% of their maple trees (~200) will need to be cut, we’re not sympathetic. The Hollerans have steadfastly refused any kind of offer from Williams to compensate them, instead aligning themselves with some of the most radical of radical anti-drillers in a publicity quest to pressure Williams to stop. It didn’t work and now a federal judge is telling the family if they prevent the trees from coming down, starting today, they’re going to the clink…
    Read More “Judge Tells NEPA Family to Let Williams Cut Maple Trees, Or Else”

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    EQT Floats ~7.5M New Shares of Stock, Hopes to Raise $437M

    Last Friday EQT, one of the largest Marcellus and Utica Shale drillers, announced they are floating 6.5 million shares of new common stock, and a potential extra 975,000 shares for the underwriter, Goldman Sachs, for a total of nearly 7.5 million shares. Not long after announcing the stock offering, they made a second announcement of the price–$58.50 per share. If EQT sells all 7,475,000 shares of stock for $58.50 per share, it will net the company $437 million in cash. What will they do with it? It will be used for “general corporate purposes” and potentially to pay down some debt. Here’s the twin announcements from Friday…
    Read More “EQT Floats ~7.5M New Shares of Stock, Hopes to Raise $437M”

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    FERC Says Rover Pipeline as Planned Negatively Impacts Environment

    In December 2014 Energy Transfer Partners filed their draft Resource Reports of environmental survey data with the Federal Energy Regulatory Commission (FERC) for the ET Rover pipeline (see ET Rover Pipeline’s 800-Mile Journey Begins with FERC Filing). Rover is an 800-mile, $4.4 billion pipeline that will connect Pennsylvania, West Virginia and Ohio, crossing pretty much the entire state of Ohio heading northwest before entering Michigan and eventually taking a dog-leg into Ontario. In February of 2015, exactly a year ago, ET filed a full application with FERC. Last week FERC responded with a Draft Environmental Impact Statement (DEIS)–and the news was not so good for Rover. FERC found “adverse and significant” impacts from the project as planned and delivered to ET nearly 25 pages of recommendations that ET will need to fix before they get an approval. Is this a fatal blow to Rover? Or just a speed bump? Time will tell…
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    2 Bills Favorable to Drillers Advance in WV Senate – SB 508 & 565

    Two bills that favor the drilling industry in West Virginia have recently advanced in the WV Senate. One of the bills we previously told you about–Senate Bill (SB) 508, a bill that would stop endless, frivolous lawsuits from being filed against drillers (see WV Senate Bill Stops Frivolous Nuisance Lawsuits Against Drillers). The other bill is new for us, SB 565, a bill that “would allow oil and gas drillers to begin building well pads and access roads prior to getting a well work permit approved by the state Department of Environmental Protection.” SB 508 passed the Senate Judiciary Committee last week, and SB 565 was passed in the Senate Energy Committee. They are both on their way and likely to pass the full Senate and House…
    Read More “2 Bills Favorable to Drillers Advance in WV Senate – SB 508 & 565”

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    John “Severance Tax” Hanger Quits Tom Wolf Administration – Why?

    One of the most left-wing partisans in Harrisburg, serving in the Tom Wolf Administration, is calling it quits. John Hanger, whom we once considered a reasonable man but who later proved he is not, is Wolf’s Secretary of Policy and Planning. Hanger has been one of the most shrill voices in Harrisburg in demanding a Marcellus-killing severance tax. Wolf is making a second ill-fated run at a severance tax and by all accounts Hanger was pushing it hard. And then he up and quit. Why? He says it’s because his wife and daughter live in Massachusetts (where she is vice-provost for faculty affairs at the University of Massachusetts Medical School.) To his credit, John has been married for 36 years to the same woman (she must be a saint!). However, we think he’s leaving for a different reason…
    Read More “John “Severance Tax” Hanger Quits Tom Wolf Administration – Why?”

  • Marcellus & Utica Shale Story Links: Mon, Feb 22, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: NGI updates Rex Tracker for REX pipeline expansion; drillers may exit PA after all; Haynesville gets competitive with Marcellus; natgas replaces coal on U Kentucky campus; 2016 oil & natgas production & storage forecasts; dominoes toppling in shale; researchers’ own data contradicts conclusions on fracking & methane emissions; Clean Power Plan won’t survive legal challenges; is Russian money behind some fractivists; and more!
    Read More “Marcellus & Utica Shale Story Links: Mon, Feb 22, 2016”

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    US Well Services Lays Off Nearly 50 in Jane Lew, WV

    cutting jobsU.S. Well Services, headquartered in Houston, TX but with a sizable office in Jane Lew, WV, is an oilfield services company providing hydraulic fracturing services in unconventional oil and natural gas basins–including the Marcellus and Utica Shale. According to their website, U.S. Well Services operates both diesel and electric fracking fleets. On Wednesday, with no warning, they laid off most of their workers in the Jane Lew office–just under 50 people, meaning the company was not required to give advance notice under the WARN Act. Here’s what happened on Wednesday, what U.S. Well Services calls an “unfortunate reduction”…
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    PA Pipeline Task Force Report: 658 Pages, 184 “Recommendations”

    In May 2015 Pennsylvania Gov. Tom Wolf and his underling Dept. of Environmental Protection (DEP) Secretary John Quigley created a “Task Force on Pipeline Infrastructure Development” (see Disaster on the Horizon: PA Gov Wolf Creates Pipeline Task Force). The purpose of the group was “to identify best practices for pipeline siting, permitting and safety.” We won’t recount all of the twists and turns–of how the Task Force was packed with government employees beholden to Wolf, etc. Along the way antis tried to protest and derail the meetings held by the Task Force (see PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed”). The final meeting has been held and the final report is now in. Yesterday Quigley released the Task Force’s Final Report, all 658 pages of it with 184 recommendations (full copy below). Along with the release of the final report, Quigley also issued what he calls the top 12 recommendations coming from the Task Force for how PA can and should handle a coming expansion of gathering pipelines in the state…
    Read More “PA Pipeline Task Force Report: 658 Pages, 184 “Recommendations””

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    Drillers Leaving Wet Gas Areas of Marcellus/Utica for Dry Gas

    An excellent article appearing on the World Oil Magazine website explores an interesting phenomenon at work in the Marcellus/Utica. The article is wide-ranging and provides an update on the activities and strategies for many of our region’s top producers. But the beginning of the article is what really caught our attention. The author states that there is a shift happening away from drilling in the liquids-rich (i.e. areas with a higher concentration of natural gas liquids, like ethane, propane and others) to the “core” dry gas areas of the Marcellus/Utica. He quotes Rice Energy CEO Dan Rice in saying, “…there has been a noticeable shift in producer activity away from liquids-rich and non-core dry gas Marcellus and Utica areas, and into the Marcellus and Utica’s dry gas cores.” We have to confess that’s the first time we’d heard that. We thought it was the reverse–that there was more drilling headed to the wet gas areas. Huh. Here’s more from the article…
    Read More “Drillers Leaving Wet Gas Areas of Marcellus/Utica for Dry Gas”

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    Athens, OH Antis Lose Appeal in County Court re Injection Well

    In January 2015 (over a year ago) the radical antis of the Athens County Fracking Action Network (ACFAN) in Athens County, OH filed an appeal with the Ohio Oil and Gas Commission opposing a permit issued to K&H Partners to drill a new/second wastewater injection well in Athens County (see Athens County, OH Anti-Drillers Sue to Stop New Injection Well). The Oil and Gas Commission rejected the complaint because, they said, they don’t have jurisdiction over permits to drill wells. The case was appealed to county court and last week the county court judge sided with the Oil and Gas Commission. That is, ACFAN’s request to overturn the permit to drill the well has been rejected. The next move by ACFAN losers is to appeal it to a higher court–the 10th District Court of Appeals. No word yet if they want to waste their money on an appeal. However, they appear to have endless resources from Big Green groups to keep them going with endless lawsuits…
    Read More “Athens, OH Antis Lose Appeal in County Court re Injection Well”

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    CEO: What Williams Would Do if Chesapeake Declared Bankruptcy

    Alan Armstrong, president and CEO of Williams, spoke on an investor/analyst phone call yesterday to discuss Williams’ fourth quarter and full year financial and operational results. He had a lot to talk about. As we reported yesterday, the company saw massive losses in 2015 (see Williams 2015: $1.6B Loss in 4Q15, $1.4B Loss Full Year 2015). However, early in Armstong’s talk, he addressed an issue that’s gotten a fair bit of press lately: What would Williams do if Chesapeake Energy declared bankruptcy? Armstrong spent several minutes discussing such a possibility and how it might affect Williams. Here’s what he said on the call about a potential Chesapeake bankruptcy scenario…
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    Judge Hears Eminent Domain Case Against Mariner East 2

    Five Washington County, PA property owners had their day in court yesterday with their case against Sunoco Logistics Partners and the Mariner East 2 pipeline project. The attorney for the plaintiffs argued that Mariner East 2 is an interstate pipeline (begins in Ohio, crosses the northern panhandle of West Virginia and then crosses Pennsylvania from west to east) and therefore it does not fit the definition of a public utility under PA law. Public utilities in PA have the right to use eminent domain, which is what this case appears to be about–denying Sunoco the right to use eminent domain in cases where it cannot come to an agreement with the landowner. But as you’ll see below, we don’t think that’s what this case is REALLY about. Sunoco argued that the pipeline is both an interstate and intrastate pipeline with “numerous public benefits.” He hastened to add one of those benefits is a $1.9 billion investment that will result in a $4.2 billion economic impact on the state…
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