Marcellus Drilling News

Industrywide Issues | Pennsylvania | Statewide PA | Taxation

More on Wolf’s New 6.5% Severance Tax – What Could of Been
February 11, 2016February 11, 2016

A quick update on the new, higher severance tax being proposed by Pennsylvania Gov. Tom Wolf in his second budget (the first budget never passed and the state has survived on continuing budget resolutions). We reported yesterday that the new 6.5% severance tax would be “on top of” the existing impact fee. That may have left a wrong impression. Yes, the impact fee, which is already high, would remain. But drillers would be able to deduct the impact fee from the 6.5% severance tax, lowering the severance tax for them. It still works out to a 6.5% rate–ON TOP OF corporate income taxes these companies pay. Meaning Wolf’s new severance tax would be one of the highest in the country, if you include corporate income taxes paid by drillers (income taxes that don’t exist in other oil & gas states). In addition to more comment on Wolf’s proposed severance tax, we also have some inside scuttlebutt about the severance tax and what could have been had Wolf not blown it last year…
Read More “More on Wolf’s New 6.5% Severance Tax – What Could of Been”
Air Quality | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Wolf Vows to Push Forward with Clean Power Plan in PA
February 11, 2016February 11, 2016

Are there any doubts remaining that Pennsylvania Gov. Tom Wolf is anti-fossil fuel? He’s trying to tax the Marcellus gas industry out of existence (see Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%). He’s now trying to regulate the coal industry in PA out of existence. Yesterday we brought you the great news that the U.S. Supreme Court has stayed the execution of coal by stopping–for now–implementation of President Obama’s draconian and misnamed Clean Power Plan (see Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan). That means a decision on whether or not the plan can proceed will come from the courts no earlier than 2017. So what does Tom Wolf say? PA is going to go ahead and put a bullet in the head of coal (and to some degree natural gas) by moving forward with its own implementation of the Clean Power Plan. Arrogance personified…
Read More “Wolf Vows to Push Forward with Clean Power Plan in PA”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Ohio | Research | Statewide OH

Anti Groups Abruptly Cut Funding for OH Fracking Study
February 11, 2016February 11, 2016

Two days ago we told you about a three-year study conducted at the University of Cincinnati that looked at fracking and its potential affects on water wells in five Ohio counties. The research found no evidence that fracking had led to any kind of water well contamination (see Antis Not Happy with Results of OH Fracking Study They Funded). We now have a bit more to the story. The two anti groups that funded the research, the Deer Creek Foundation in St. Louis and the Alice Weston foundation from Cincinnati, abruptly stopped funding the study when they got the preliminary (and as yet, unpublished) results. The foundations thought they had bought and paid for a particular outcome, and when that didn’t happen, they withdrew their money and presumably will now support someone they can buy off. Here’s an update on this developing story from the Ohio Oil and Gas Association…
Read More “Anti Groups Abruptly Cut Funding for OH Fracking Study”
Industrywide Issues | Research

Oil & Gas Investment in 2015 Down Average 35% – 2nd Largest Ever
February 11, 2016February 11, 2016

Another interesting article from our favorite government agency, the U.S. Energy Information Administration (EIA). We all know that drillers spent a lot less last year than the year before on drilling. How much, on average? According to new research by the EIA, mining and exploration investment (which includes oil and gas and coal) declined 35% in 2015, the second largest year-over-year decline since the U.S. Bureau of Economic Analysis (BEA) began reporting the series in 1948. Did you catch that? Last year investment in oil and gas decreased the second largest amount since the government has kept records on it. Wow. This year promises even more cuts. Here’s what the EIA says in their latest report…
Read More “Oil & Gas Investment in 2015 Down Average 35% – 2nd Largest Ever”
CNG/LNG | Industrywide Issues | M&A

Love’s Travel Stops Buys Trillium CNG, Expands CNG Network
February 11, 2016February 11, 2016

Loves, the big truck stop chain, has just purchased Trillium CNG. The purchase will add 37 public-access CNG locations to the Love’s network, bringing the number of Love’s-operated public CNG facilities to 65. Why is that an MDN story? For a few reasons. It shows the growth and importance of CNG (compressed natural gas) as a use in passenger vehicles and long-haul trucking. As demand grows for CNG, prices paid for natural gas will grow too. It’s an important developing market for natural gas. Also, there’s a Love’s and a Trillium CNG about three miles from where MDN editor Jim Willis lives. So this is a “local” story of interest for him! Here’s the good news of Love’s being in love with Trillium (along with a cool map)…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Feb 11, 2016
February 11, 2016February 11, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH antis gear up to protest injection well; oil & gas downturn not all bad; where Wolf is leading; court rules WV oil & gas lease not divisible; VA bills to stop pipeline going nowhere; natgas still on the ropes; why oil & gas is still a great industry to work for; and more!
Read More “Marcellus & Utica Shale Story Links: Thu, Feb 11, 2016”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%
February 10, 2016February 10, 2016

Someone needs to bring out a straight jacket for PA Gov. Tom Wolf. He’s gone stark…raving…mad. He’s not only a danger to himself, he’s a danger to all of Pennsylvania. The only thing missing from yesterday’s budget address in Harrisburg was frothing at the mouth. In his mean-spirited budget address, Wolf insulted nearly everyone present–blaming everyone but himself for the budget disaster of last year. Wolf is either bipolar (off his meds) or just plain nuts. How else can you explain that after not passing his first budget because he demanded a 5% severance tax on drilling (which was really closer to 15%, see Pittsburgh Economic Leader Says Wolf Severance Tax Really 15% Rate), in the worst oil and gas downturn in 30 years, he’s just proposed a second budget with a 6.5% severance tax? It’s sheer madness…
Read More “Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%”
Energy Companies | Warren Resources

Warren Resources: Potential Bankruptcy, No Drilling in 2016
February 10, 2016February 10, 2016

Last week MDN told you of a troubling sign at Warren Resources–the company had missed a $7.5 million payment on notes (IOUs) and the clock is now ticking (see Warren Resources Misses $7.5M Debt Payment, 30-Day Clock Ticking). Yesterday Warren released information on 2015 reserve and production figures. As part of that update, they say this: “If Warren cannot come to a workable agreement regarding an out-of-court restructuring, it will have to seek protection from its creditors through a bankruptcy proceeding in order to preserve and maximize value for its stakeholders” (emphasis added). In other words, if the people they owe money to don’t back off, the only choice left is to declare bankruptcy. Warren also said yesterday they won’t spend a penny on drilling in 2016…
Read More “Warren Resources: Potential Bankruptcy, No Drilling in 2016”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell

Shell Begins Hiring for Monaca, PA Ethane Cracker Plant
February 10, 2016February 10, 2016

Yesterday a sharp MDN reader called our attention to a job posting on LinkedIn. The posting, by Shell, seeks a “Technical Service Team Lead Polyethylene (Pittsburgh, PA).” When you read the job listing (below) it clearly states it the job is for their Monaca, PA ethane cracker plant complex. Now this is a single job posting–so far–although it’s for a very important position. Still, our point is this: You don’t spend millions building a new bridge over a highway as a new entrance to a piece of property (see Shell Begins Building Bridge to PA Cracker Plant Site), you don’t spend $80 million to clean up that site (see Shell Paying $80M to Clean Up PA Site for Ethane Cracker Plant), you don’t spend $69 million to move a water intake site and build a new water treatment site for the local town because the current water intake is on the site where you want to build (see Shell Paying $69M to Move Water Plant for Cracker Project), you don’t spend money to lease land to build two ethane pipelines to that site (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant), and you don’t begin hiring people to work on/at the plant–unless you’re serious about building it…
Read More “Shell Begins Hiring for Monaca, PA Ethane Cracker Plant”
Air Quality | Industrywide Issues | Litigation | Regulation

Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan
February 10, 2016February 10, 2016

On January 26, 2016, 29 states and state agencies, including Ohio and West Virgina, filed an application with the U.S. Supreme Court seeking an immediate stay of President Obama’s EPA Clean Power Plan (see 29 States Ask Supreme Court to Stop Obama Clean Power Plan ASAP). A week before that a D.C. Circuit Court of Appeals denied such a stay, so the states had no alternative but to take their case all the way to the top. Yesterday, in a surprise decision, the High Court granted their request! That is, the U.S. Supreme Court stopped Obama’s draconian EPA regulations dead in their tracks. Now an extended and protracted court case will ensue. What it means is that CPP is dead for this year, and likely dead altogether…
Read More “Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan”
Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

EIA Feb DPR: Utica NatGas Output Continues to Increase
February 10, 2016February 10, 2016

Earlier this week our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The February 2016 report shows what the EIA predicts oil and natural gas production will be in March from the seven largest commercial shale plays in the U.S. What does the report (full copy below) show? Very broadly, it shows that the decline in natural gas production is picking up speed, while the decline in oil slowed (reversed, actually). In January’s report, the EIA said for February the combined output of natgas would decline by 405 million cubic feet per day (MMcf/d). In this report, forecasting March production, the EIA says the decline will go down another 451 MMcf/d over the February number. That is, the rate of decline is increasing. There’s only one shale play of the seven with an increase in natgas output from the previous month. Can you guess which one? That’s right–the Utica…
Read More “EIA Feb DPR: Utica NatGas Output Continues to Increase”
Pennsylvania | Statewide PA

PA Rig Count Hits 9-Year Low Last Week
February 10, 2016February 10, 2016

Two days ago MDN briefed you on the latest rig counts–worldwide, U.S. and for the Marcellus/Utica (see Rig Counts for World, US & Marcellus/Utica Continue to Tumble). What we didn’t note in that article is last week Baker Hughes showed the number of active rigs in Pennsylvania had fallen to 19. Eeeks! That is the lowest number of active rigs working in PA since before the Marcellus Shale revolution got underway in 2007. How much lower will it go?…
Read More “PA Rig Count Hits 9-Year Low Last Week”
Industrywide Issues | Jobs | Pennsylvania | Statewide PA

Philly Council President Says Green Jobs Plan to Create 10K Jobs
February 10, 2016February 10, 2016

Philadelphia City Council President Darrell Clarke was one of the chief opponents of a deal that would have sold the city-owned Philadelphia Gas Works (PGW) to Connecticut utility company UIL for $1.86 billion. Clarke, more than anyone, torpedoed the deal (see UIL Makes it Official: $1.86B Deal to Buy Phila. Gas Works is Dead). Clarke is, in our opinion, corrupt and in the pockets of unions and others who benefited from that deal falling through. So it was with some amusement we noticed that Clarke announced on Monday that somehow, somewhere, he’s going to magically put his hands on $1 billion to “invest” in a “green jobs” boondoggle that will, supposedly, create 10,000 jobs over the next 10 years. This would be fall-off-your-seat funny if it weren’t so sad and angering. The city could have had a legitimate infusion of non-taxpayer money–$1.86 billion to be exact–but instead has chosen to continue its corrupt ways of using taxpayer money to line the pockets of political supporters…
Read More “Philly Council President Says Green Jobs Plan to Create 10K Jobs”
Crude Oil | Industrywide Issues | Taxation

Obama’s Final Disastrous Budget Targets Fossil Fuels
February 10, 2016February 10, 2016

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…
Read More “Obama’s Final Disastrous Budget Targets Fossil Fuels”
Energy Services | Seventy Seven Energy

Seventy Seven Energy Releases Cherry-Picked Numbers
February 10, 2016February 10, 2016

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…
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Electrical Generation | Industrywide Issues

Natural Gas Breaks Another Record in Generating Electricity
February 10, 2016February 10, 2016

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”