Marcellus Drilling News

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Happy Memorial Day! MDN Off Friday & Monday
May 21, 2015May 26, 2015

Have a great Memorial Day weekend–and don’t forget to remember and commemorate those who have given their lives for this country, to protect and defend her. MDN will be off on both Friday and Monday (no stories). We’re taking a long weekend to be with family and recharge the batteries. We’ll do so in one of our favorite spots on Mother Earth–in beautiful Lancaster County, PA.

Every Memorial Day and Veteran’s Day MDN editor Jim Willis makes a short trip to the Broome County Veteran’s Memorial Arena in Binghamton, NY. Outside the Arena on one of the corners is a memorial where the names of Broome County residents who have fought and died in every war ever fought–from the Revolutionary War through the current war on terror in Afghanistan–is etched in stone on a series of pedestals. It is a small version of our own Viet Nam Wall, if you will. It is Jim’s way of honoring the war dead–to simply pay a brief visit and remember them. Read some of the names. Reflect on the price they paid–the ultimate price.

Perhaps there is a similar monument where you live. Or a Memorial Day parade. Or something else. Find a way this Memorial Day to remember the war dead and be thankful for the freedom you have–because it was purchased with a very high price: the lives of those people.
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, May 21, 2015
May 21, 2015May 21, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
Read More “Marcellus & Utica Shale Story Links: Thu, May 21, 2015”
Air Quality | Industrywide Issues | Pennsylvania | Research | Statewide PA

Drexel U Study Finds Little Air Pollution Near Marcellus Sites
May 20, 2015May 20, 2015

Finally some real, honest, independent research into the effects of shale drilling on air quality has just been published in the peer reviewed journal Environmental Science & Technology. Researchers from Drexel University published the results of air quality research titled “Atmosphere Emission Characterization of Marcellus Shale Natural Gas Development Sites” (full copy below). Rather than focus solely on the release of methane as a global warming concern, the Drexel researchers looked at volatile organic compounds and other pollutants that are a true health concern for people living close to drilling sites and compressor stations. The researchers took measurements using a more accurate instrumentation/methodology than other studies have used and they collected 17 samples at 13 sites including wells, drilling rigs, compressor stations and processing areas. This kind of research is long overdue. What did they find?…
Read More “Drexel U Study Finds Little Air Pollution Near Marcellus Sites”
Blue Racer Midstream | Caiman Energy | Energy Services

Blue Racer Midstream CFO Promoted over President to Become CEO
May 20, 2015May 20, 2015

Some changes at the top of Blue Racer Midstream–the pipeline and processing plant company formed in 2012 as a joint venture between Caiman Energy II and Dominion and focused totally on the Marcellus and Utica Shale region. Jack Lafield, founder and CEO of Caiman Energy (sold to Williams for $2.5 billion) and current CEO of Caiman Energy II and Blue Racer, has stepped down as CEO of both companies. Lafield will continue to serve as chairman of the board for Caiman Energy II and remains a member of the board for Blue Racer. In his place Stephen Arata, CFO for both companies, has been named CEO for both Caiman Energy II and Blue Racer Midstream. Although the announcement that Lafield is “retiring” from his post as CEO of both Caiman and Blue Racer as of today (see below), the official biography for Arata on the Blue Racer website says the transition became effective on April 1st–not sure why there is a discrepancy. What’s equally intriguing (to MDN) is that Caiman/Blue Racer’s current president and COO, Rick Moncrief, was not promoted to the top spot and instead Arata, the CFO, was–which is not the typical succession path…
Read More “Blue Racer Midstream CFO Promoted over President to Become CEO”
Bradford County | Industrywide Issues | Pennsylvania | Research | Statewide PA | Wastewater

Penn State Defends Controversial Water Contamination Study
May 20, 2015May 20, 2015

Two weeks ago MDN covered the news that researchers from Penn State had published a study that reportedly showed a Marcellus Shale wastewater impoundment had leaked and some of the wastewater had found its way to a crack underground and traveled up to a mile and a half away to contaminate 3 water wells. This happened in 2010–five years ago (see Penn State Finds Chemical Migration in 3 PA Water Wells from 2010). It seemed at first blush that this was important research not because it proves “fracking contaminates water wells, told you so told you so” as anti-drillers claim–but because of the research tools innovated by the team to detect small amounts of chemicals that may in fact come from shale drilling. However, a few days later the news broke that one of the so-called researchers on the team had actually been a consultant and worked for the three families with the contaminated water wells, helping them in their lawsuit against the driller. When that little overlooked and omitted fact became known, embarrased mainstream news organizations did something we rarely see–they printed retractions/corrections noting the huge conflict of interest (see Reversal: Media Discredits Penn State Water Contamination Study). It gave Penn State a major black eye and damaged their credibility. So Penn State fired off their own mea culpa to defend the research study and the “facts” of how this kerfuffle came to be…
Read More “Penn State Defends Controversial Water Contamination Study”
Anti-Drilling/Fossil Fuel | Industrywide Issues | New York | Pipelines | Statewide NY

NY Antis Use Same Strategy for Pipelines: “We Need Health Study”
May 20, 2015May 20, 2015

The anti-drilling nutters in New York are somewhat drunk on their own success. The strategy of “we need to wait until a health study is done” worked so well to delay fracking in NY, the nutters are (predictably) back and now trying to use the same strategy with regard to building new pipelines. It’s no secret that infrastructure–i.e. pipelines–are desperately needed to get Marcellus Shale gas out of Pennsylvania and into markets like New York, New England and beyond. Anti-drillers (actually fossil fuel haters) believe they can now pressure NY officials to delay permits for pipelines in the same fashion they delayed fracking long enough to kill it. The new tactic is to claim pipeline compressor, metering and regulation stations are toxic for those who live near them. In other words, more lying, scare tactics to cover up the fact it is fossil fuel hatred that motivates them and not concern for your health…
Read More “NY Antis Use Same Strategy for Pipelines: “We Need Health Study””
Crude Oil | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Gov Wolf Takes Aim at Bakken Oil Trains Traveling Thru PA
May 20, 2015May 20, 2015

Pennsylvania Gov. Tom Wolf is now taking aim at railroads transporting Bakken crude oil that pass through PA on their way to refineries along the East Coast. While railroads are typically regulated by the federal government, Wolf is a) hoping to pressure railroads apart from the feds, and b) may try to sneak in his own regulations on top of federal regulations. He’s hired an “expert,” Dr. Allan Zarembski, to look into the matter for the next three months–to provide Wolf with “policy recommendations” (which means new rules and regulations are on the way). Wolf sent a letter (copy below) to CSX Transportation and Norfolk Southern Railway telling them to shape up…
Read More “PA Gov Wolf Takes Aim at Bakken Oil Trains Traveling Thru PA”
Anti-Drilling/Fossil Fuel | Crude Oil | Industrywide Issues | New York | Regulation | Statewide NY

NY Riverkeeper Sues Federal DOT Over New Oil Train Regs
May 20, 2015May 20, 2015

The fossil fuel hating New York Riverkeeper–not to be confused with fossil fuel hating THE Delaware Riverkeeper–has just sued the U.S. Dept. of Transportation over rules the DOT recently issued with regard to railroads transporting crude oil (usually Bakken crude) through New York State. Riverkeeper is being joined in their frivolous lawsuit by several other odious anti-drilling, anti-capitalist Big Green organizations: Earthjustice, Waterkeeper Alliance, ForestEthics and the Sierra Clubbers. Riverkeeper says the DOT’s new rules for oil trains won’t protect rivers like the Hudson…
Read More “NY Riverkeeper Sues Federal DOT Over New Oil Train Regs”
Columbia Pipeline Group | Energy Services | NiSource

Columbia Pipeline Floats IOUs to Pay Down Debt, Fund Dividend
May 20, 2015May 20, 2015

NOTE: NiSource/Columbia called MDN to clarify that the IPO earlier this year was for Columbia Pipeline Partners, NOT Columbia Pipeline Group as we had incorrectly stated in the original version of this story. Thank you NiSource! We’ve slightly modified the opening paragraph below to make it accurate.

The mad dash to raise cash continues in both the upstream and midstream sectors. Today it’s a company in the midstream (pipelines and process plants). In February of this year, NiSource spun off Columbia Pipeline Partners into it’s own company with a $1.1 billion initial public offering of “units” (think shares of stock, see Columbia Pipeline IPO Blows By Rosiest Expectations, Nets $1.1B). Columbia Pipeline Group (of which Columbia Pipeline Partners owns 15.7%) will become its own company and trade under its own stock ticker (CPGX) starting July 1. Yesterday Columbia Pipeline Group announced they are floating a series of IOUs, or “senior notes” looking to raise an eye-popping $2.75 billion. What will they use it for? A little over $1 billion will be used to pay off “intercompany debt” ahead of the separation. Another $1.45 billion will be used for a “special dividend to NiSource in connection with its planned separation from NiSource.” The balance of ~$300 million will be used for “general corporate purposes”–paperclips and such…
Read More “Columbia Pipeline Floats IOUs to Pay Down Debt, Fund Dividend”
Energy Companies | Energy Services | EQT Corp | Equitrans/EQT Midstream

EQT Midstream IPO Nets $621M, “Better than Expected”
May 20, 2015May 20, 2015

A few weeks ago MDN brought you the news that EQT was floating yet another initial public offering (IPO), this time doing it with a newly formed subsidiary (EQT GP) with an eye to selling more ownership in its midstream division (see EQT Floats IPO to Sell Off Some Ownership of Midstream Division). We used EQT’s existing stock price as a potential yardstick to measure what they might bring in. We thought on the low end it might be $1 billion. We were off, by a lot. We thought they would look for $50 per unit (think share of stock). Instead, they were looking for $21-$24 per unit. When the units went on sale, they got $27 per unit, which was more than they expected…
Read More “EQT Midstream IPO Nets $621M, “Better than Expected””
Best of the Rest

Marcellus & Utica Shale Story Links: Wed, May 20, 2015
May 20, 2015May 20, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
Read More “Marcellus & Utica Shale Story Links: Wed, May 20, 2015”
Energy Services | GreenHunter Resources | Industrywide Issues | Meigs County | Ohio | Regulation

GreenHunter Says OH River Wastewater Barging to Begin September
May 19, 2015May 19, 2015

The centerpiece of GreenHunter Resources strategy is to quickly ramp up, and start producing revenue from, a series of wastewater injection wells in Meigs County, OH (see GreenHunter Resources 1Q15: Bets the Ranch on OH Injection Wells). There are two ways wastewater, both flowback and brine, will get to the Meigs County wells (called the Mills Hunter facility): 1. trucking, 2. barging. For years MDN has covered the controversy about barging brine (and possibly flowback) down the Ohio River to injection wells in Ohio. The holdup–frankly the problem–has been that the Obama administration has been pressuring the U.S. Coast Guard (USCG) to withhold such approval. Never mind that substances far more toxic than shale wastewater are currently (right now) barged up and down the Ohio River every single day. That makes no difference. It’s public perception and how anti-drillers are able to warp and mold public opinion that is at issue here. After having their fill of waiting, GreenHunter made a brilliant move on the chessboard to break the stalemate. Using the USCG’s own rules and regulations against them, GreenHunter said current regulations issued in 1987 give them the right to barge brine–right now. And they intend to do so as soon as they have a facility built to load the barges. This is a little-covered aspect of this story and MDN, if we may immodestly say so, was the first and one of the few to figure it out (see GreenHunter/Coast Guard War of Words — MDN Explains It). Although a war of words has gone back and forth, GreenHunter has not backed down. During the 1Q15 earnings call we got an update on where things stand and a time frame for when GreenHunter plans to begin barging wastewater down the Ohio River…
Read More “GreenHunter Says OH River Wastewater Barging to Begin September”
Anti-Drilling/Fossil Fuel | Butler County | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Rex Energy

Martian Arrogance: Town MUST “Protect Us” from Drilling via Zoning
May 19, 2015May 19, 2015

Those trouble-making Martians are at it again. Four virulently anti-fossil fuel parents from the Mars School District in Middlesex Township (Butler County), PA are being assisted–we maintain illegally–with support from THE Delaware Riverkeeper (violating its own charter of operating on the other side of the state in the Delaware River Basin) and by the Philadelphia group Clean Air Council. Riverkeeper’s interference in Butler County invalidates their tax-exempt status. Get this, using money from Riverkeeper and the Clean Air Council, the four Middlesex residents are trying to FORCE locally elected leaders in Middlesex to “protect them” from an activity that’s harmless–drilling a shale well 3/4 of a mile away from the local Mars School. It’s the same type of “sue and settle” being used at the national level, being tried locally. Seven selfish PA townships sued the state (and won) to retain the right to zone where drilling can and can’t take place. Now the Martians want to (ab)use the same Act 13 law to force the town to enact zoning that this small group of residents wants regardless of what a majority of town residents want. In other words, there is only one outcome (for them) allowed under Act 13: no drilling. It is an amazingly arrogant position and needs to be vigorously opposed legally, morally, via popular opinion–in any way possible…
Read More “Martian Arrogance: Town MUST “Protect Us” from Drilling via Zoning”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

New Permit Applications Down 30% in PA, DEP Scrambles for Funding
May 19, 2015May 19, 2015

Starting in 2014, the price to file an application for a permit to drill a Marcellus or Utica Shale well in Pennsylvania went from $3,200 to $5,000 (see Coming Soon: PA Drillers to Pay 56% More for Marcellus Permits). In early 2014, then head of the PA Dept. of Environmental Protection, Chris Abruzzo, said the fee hike and forecasted new revenue from it would allow the DEP to hire more help (see New Staffers on Way at PA DEP O&G Courtesy Higher Permit Fees). But a funny thing happened on the way to the Forum–the price of natural gas dropped like a rock because of too much supply and, in the northeast, not enough pipelines. Year over year the number of applications for permits to drill new wells is down about 30% according to the DEP, and that means the previously forecasted revenue isn’t there. What will the DEP do now?…
Read More “New Permit Applications Down 30% in PA, DEP Scrambles for Funding”
Belmont County | Ethane | Industrywide Issues | Ohio | Processing Plants

Belmont County, OH Ethane Cracker to Get 3rd Partner
May 19, 2015May 19, 2015

More movement on the recently announced $5 billion ethane cracker in Belmont County, OH being planned by two companies from Thailand and Japan (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). The new news is that the two companies are seeking a third company to become a partner (i.e. contribute cash) to help them build it. PTT Global Chemical from Thailand will be the majority owner with a 51% stake. Japan’s Marubeni Corp is the money manager/investor for the project. According to PTT, five other companies are interested in becoming the third partner…
Read More “Belmont County, OH Ethane Cracker to Get 3rd Partner”
Braskem | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | West Virginia | Wood County

WV Officials Say Odebrecht Considering Reconfigured Cracker Plant
May 19, 2015May 19, 2015

As MDN told you a month ago, Brazilian company Odebrecht is signaling they may not build an ethane cracker plant near Parkersburg, WV after all (see Odebrect Pushes the Pause Button on WV Ethane Cracker). Which is a big disappointment, since the project seemed to have so much forward momentum. However, Gov. Earl Ray Tomblin’s representatives are still not defeated–far from it. They don’t see Odebrecht’s statement that the plant “needs to be re-evaluated” (Odebrecht’s words, not ours) as a definite “no” so they’re continuing to hold out hope that it will get built, but perhaps modified from its original plan…
Read More “WV Officials Say Odebrecht Considering Reconfigured Cracker Plant”