Marcellus Drilling News

Industrywide Issues | Jobs | Pennsylvania | Statewide PA | Susquehanna County

What’s Wrong with the Employment Picture in the Marcellus? Ageism.
March 17, 2015March 17, 2015

This is not an easy story to write. It’s about employment in the Marcellus Shale industry–and about age discrimination. Until late last year, by all accounts the Marcellus Shale industry was, from a jobs perspective, going great guns. Yes, sometimes it was/is necessary to import workers from other states to handle specialized jobs. But increasingly the jobs have been going to local workers and not out-of-staters. Yesterday we received a heartfelt letter (below) from an MDN subscriber. This gentleman is a mechanical engineer with degrees from Penn State and Lafayette College. He has loads of experience in a variety of areas–engineering, contracting, even running a small business. He wants to get involved with the greatest industry on the planet–the Marcellus Shale energy industry. He can paper every room in his house with the number of resumes and job applications he’s filled out. He’s applied for everything from technician to field hand to roustabout (he’s physically fit). In the last five years that he’s been trying, he hasn’t been called for a single interview. Not one. He’s now 52 years old. We don’t like calling attention to stories like this one, but MDN doesn’t shy away from sharing the “bad news” about our beloved industry along with the overwhelming good news…
Read More “What’s Wrong with the Employment Picture in the Marcellus? Ageism.”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Important & Overlooked Details on PA Gov Wolf’s Severance Tax
March 17, 2015March 17, 2015

More details continue to come out about PA Gov. Tom Wolf’s Marcellus-killing severance tax. For example, did you know that towns and counties that previously received money from the impact fee will continue to get money under this tax–but that the amount they get will be capped? Under the existing impact fee the more drilling in an area the more money that area receives to compensate for the drilling (roads that need repairing, beefing up first responders, etc.). No more. Under Wolf’s plan, there is an upper limit on how much money he’s willing to give those locations that actually see drilling. The rest, you see, must go to pay off campaign debts to teachers unions. Another fatal flaw in Wolf’s severance tax: He calculates the tax based on $2.97 per thousand cubic feet sale price, regardless of what the actual sale price is. Do you know what the sale price for natural gas at the Leidy hub was on March 13th? It was $1.435/Mcf–about half of what Wolf is using as the standard rate. That means the effective tax rate for drillers selling gas for $1.435 is twice what it is for drillers selling at Wolf’s magical $2.97. What do you think drillers in northeast PA (near the Leidy hub) will do? That’s right. Shut in their wells and lay down their rigs…
Read More “Important & Overlooked Details on PA Gov Wolf’s Severance Tax”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation | Pennsylvania | Pike County | Regulation | Statewide PA | Wayne County

PA Gov Tom Wolf Supports DRBC Moratorium on Marcellus Drilling
March 17, 2015March 17, 2015

As we’ve stated a number of times, newly-elected PA Gov. Tom Wolf is a major disappointment–a man out of his depth in attempting to run an entire state. Now comes word that Wolf supports the Delaware River Basin Commission’s (DRBC) anti-drilling policies that prevent drilling in his own state. We previously told you Wolf had employed the former anti-drilling head of the DRBC as a member of his transition team (see PA Gov-Elect Wolf Transition Team Includes DRBC’s Carol Collier). Two weeks ago, Wolf proposed increasing the DRBC’s budget by 73%, while states like New York and New Jersey continue to refuse paying their fair share (see PA Gov Wolf Increases DRBC Funding by 73% to 3/4 Million Bucks). Now he adds insult to injury by saying he supports the drilling ban in Wayne and Pike counties in his own state…
Read More “PA Gov Tom Wolf Supports DRBC Moratorium on Marcellus Drilling”
Economic Impact | Energy Services | Industrywide Issues | Lancaster County | Lebanon County | Pennsylvania | Pipelines | Research | Statewide PA | Transco | Williams

Atlantic Sunrise Will Pump $1.6B into Economy, Create 8K Jobs
March 17, 2015March 17, 2015

Williams pushed out a new economic analysis of their Atlantic Sunrise pipeline project yesterday. The project, if built, will cost $2.1 billion and consist of compression and looping of the Transco Leidy Line in Pennsylvania along with a greenfield pipeline segment, called the Central Penn Line, connecting the northeastern Marcellus producing region to the Transco mainline near Station 195 in southeastern Pennsylvania. Additional existing Transco facilities are being added or modified to allow gas to flow bi-directionally. The preliminary project design includes 178 miles of new greenfield pipe (Central Penn North & Central Penn South), two pipeline loops totaling about 12 miles (Chapman Loop, Unity Loop), 2.5 miles of existing pipeline replacement, two new compressor facilities in PA, and other facility additions or modifications in five states (PA, MD, VA, NC, SC). There’s been some push back by small groups of anti-drillers in places like Lebanon County and Lancaster County (PA) where a phony Indian tribe claims the pipeline will run through ancient burial grounds (see Convicted Lancaster Protesters Taunt Williams After Court Date). Meanwhile, the adults at Williams continue to make progress. The analysis they released yesterday shows the Atlantic Sunrise project will pump $1.6 billion into the economies of the states where it’s built, and create 8,000 jobs…
Read More “Atlantic Sunrise Will Pump $1.6B into Economy, Create 8K Jobs”
Commodity Price | Electrical Generation | Industrywide Issues | Research

Is Natgas a Good Long-Term Fuel to Fire Electric Plants?
March 17, 2015March 17, 2015

Last week MDN told you the Union of So-Called Concerned Scientists had issued a “report” (rather unscientific, written by someone with a political science degree) to say even though Obama’s war on coal has been successful, it’s having the unintended consequence of electric generation power plants switching from coal to natural gas to fire them. UCS and other so-called green groups irrationally hate fossil fuels and want the switching to be from coal to so-called renewables, like solar and wind. So in an effort to besmirch and call into doubt the long-term viability of natural gas as a fuel source to generate electricity, UCS issued a report saying using natural gas to power electric plants is a “gamble” (see UCS “Report” Says Using Natural Gas for Electric Generation Big Gamble). The theory is that natural gas will run out in a few years, or become obscenely expensive, and all of those natgas-fired electric plants will mean super high electric rates. The problem with such “reports” is something called reality. We just noticed a press release from Midland Cogeneration Venture (MCV), the country’s largest natural-gas fired combined heat and electrical power generating plant, located in Michigan. The release was to commemorate an important milestone for MCV–the plant has been up and operating and supplying enough electricity for one million homes PLUS electricity and steam for major industry facilities, for the last 25 years…
Read More “Is Natgas a Good Long-Term Fuel to Fire Electric Plants?”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Industrywide Issues | Pipelines

Eureka Hunter Pipeline Volume Continues to Expand, now 623 Mmcf/d
March 17, 2015March 17, 2015

Every few months Eureka Hunter, the midstream subsidiary of Magnum Hunter Resources, issues a press release to update investors on their progress toward filling their WV/OH pipeline system with natural gas. Eventually they hope to flow 1 billion cubic feet per day through the system. Last September Eureka reported they were up to an average 307 million cubic feet per day (see Magnum Hunter’s Pipeline System Boosts Volumes in OH/WV). In January they were up to 400 Mmcf/d and expecting to hit 500 Mmcf/d by the end of that month (see Eureka Hunter Nears 1/2 Billion Cubic Feet per Day in WV/OH). As of last Friday, Eureka has hit north of 623 Mmcf/d on their path to a billion cubic feet…
Read More “Eureka Hunter Pipeline Volume Continues to Expand, now 623 Mmcf/d”
Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Mar 17, 2015
March 17, 2015March 17, 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: Tue, Mar 17, 2015”
Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

Republicans (!) Help Defeat WV Forced Pooling at 11th Hour
March 16, 2015March 16, 2015

In a stunning upset at the eleventh hour, WV House Bill (HB) 2688, a bill that allows forced pooling (and a bill that seemed assured of passage just last Friday) died in a rare tied vote. On Friday, we told you HB2688 was all but a done deal (see Looks Like Forced Pooling is, After 5 Years, Coming to WV). So what happened? As predicted, the bill went to the WV Senate where it was passed on a vote of 24-10. The House had previously passed it on a vote of 60-40, but the bill had amendments that took it back to the House for final passage on the very last day of the regular session (Saturday). The last vote on the bill ended up in a rare tie of 49-49. When a vote on a bill ends in a tie, it doesn’t pass. And there it ended. Why did the vote swing from a comfortable margin the first time it passed in the House to a tie the second time? It largely appears to be the efforts of House member Pat McGeehan, a Republican, who calls forced pooling “legal plundering”…
Read More “Republicans (!) Help Defeat WV Forced Pooling at 11th Hour”
Belmont County | Energy Companies | Lease & Royalty Payments | Ohio | Rice Energy | Utica Shale

Rice Energy Pays St Clairsville, OH $8,700/Acre Signing Bonus
March 16, 2015March 16, 2015

In March 2014, St. Clairsville (Belmont County), OH put out a request for bids on 195 acres of city-owned land. The request for proposal (RFP) came and went with no bids (see St Clairsville RFP to Lease 195 Utica Acres Comes & Goes, No Bids). But don’t let that fool you. Drillers were keenly interested in leasing the property. The initial RFP served a legal purpose. After the period for bids closed, the real negotiations began. St. Clairsville was looking for $7,300 per acre signing bonus and 20% royalties. They got an even better deal. In January, Rice Energy handed St. Clairsville with a check for $1,479,251.84 to lease 170 out of the 195 acres–or $8,700 per acre as a signing bonus…
Read More “Rice Energy Pays St Clairsville, OH $8,700/Acre Signing Bonus”
Ohio | Statewide OH

Ohio 4Q14 Natgas Production Up 25% Over 3Q14, Up 281% Over 4Q13
March 16, 2015March 16, 2015

We didn’t mean to ignore it, but somehow we let slide the fact that Ohio recently (end of February) released their now quarterly production numbers. We have the full list below, embedded as a spreadsheet. The really good news: Ohio’s natural gas production from shale (almost all Utica Shale) rose 25% in a single quarter over the previous third quarter. It rose an amazing 281% over fourth quarter of 2013. Oil and gas together rose 15% from 3Q14 to 4Q14. Here’s the details…
Read More “Ohio 4Q14 Natgas Production Up 25% Over 3Q14, Up 281% Over 4Q13”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | Luzerne County | Pennsylvania | Pipelines | Regulation | Statewide PA | Transco | Williams

Dela. Riverkeeper Halts Transco Pipeline Upgrade with Lawsuit
March 16, 2015March 16, 2015

Someone needs to sue THE Delaware Riverkeeper (Maya van Rossum) the way that organization is suing legitimate and legal companies to block legitimate and legal activity in the Marcellus Shale. Delaware Riverkeeper apparently has endless bags of money, made available to them by the Park Foundation, Heinz Endowments and other anti-drilling “non-profit” groups, to file endless frivolous lawsuits. The latest is particularly insidious. Williams has just received approval from the Federal Energy Regulatory Commission (FERC) to build a few loops–extra lengths of pipeline immediately next to existing pipeline–for the Transco Pipeline in northeast PA and in NJ (see FERC Approves Williams Leidy Southeast Project in PA/NJ). Part of the requirement by FERC is that Williams cannot cut down trees between April and October–a full seven months–to avoid “harming” the endangered Indiana bat that may (or may not) roost in those trees…
Read More “Dela. Riverkeeper Halts Transco Pipeline Upgrade with Lawsuit”
Anti-Drilling/Fossil Fuel | Butler County | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Regulation | Rex Energy

Dela. RiverKeeper, Clean Air Council Cost Middlesex Residents $35K+
March 16, 2015March 16, 2015

THE Delaware Riverkeeper (Maya van Rossum) and the Clean Air Council, both located in the orbit of Philadelphia, have gone all the way to the opposite side of the state to meddle and cause mischief (see Martian Chronicles: Delaware River Basin Shifts to Western PA?). They’ve not only delayed legal and legitimate Marcellus drilling on the other side of the state, now they’ve cost the taxpayers in Middlesex Township (Butler County), PA over $35,000 in legal fees–and the costs keep mounting. Thank you Delaware Riverkeeper and Clean Air Council with your frivolous meddling! Those groups, in league with “four residents” are challenging the right of Middlesex to allow Rex Energy to drill several Marcellus Shale wells on a pad in a rural area that’s 3/4 of a mile away from the Mars School (see Rex Drilling Operation Near Mars School Put on Hold). Their meddling is costing real money–not only for Rex Energy, but also for the taxpayers of Middlesex who are nothing more than collateral damage for Riverkeeper and the Clean Air Council in their war on fossil fuels…
Read More “Dela. RiverKeeper, Clean Air Council Cost Middlesex Residents $35K+”
Energy Companies | EQT Corp | Hydraulic Fracturing | Industrywide Issues | Kentucky | Regulation

Kentucky Fracking One Step Closer: Commission Considers 1st Permit
March 16, 2015March 16, 2015

In January, MDN told you that shale drilling/fracking may soon come to Kentucky (see Fracking on the Way in the Bluegrass State? Quite Possibly). Several weeks ago the Kentucky Oil and Gas Conservation Commission, a group that “rarely meets” (last meeting was in 2006) held a meeting to consider granting Kentucky’s very first deep horizontal natural gas drilling permit. The company applying for the permit is Horizontal Technology Energy Company, a subsidiary of Pittsburgh-based EQT. Horizontal Technology wants to drill a well in the Rogersville Shale in the eastern part of the state. No word yet on the result of that meeting…
Read More “Kentucky Fracking One Step Closer: Commission Considers 1st Permit”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners
March 16, 2015March 16, 2015

In December MDN told you about a settlement between “several thousand” Pennsylvania landowners and Chesapeake over the royalty issue–Chessy deducting post-production payments by pipeline companies in what some call a scam that leaves landowners signed with Chesapeake receiving royalty checks that are pennies on the dollar compared to what they should receive. The new settlement for those “several thousand” would be 2/3 of $11 million, after the lawyers get their 1/3 cut (see Chesapeake & PA Landowners Settle Royalty Lawsuit…Again). However, not all PA landowners leased with Chesapeake are happy about it. Two other, separate lawsuits against Chesapeake are proceeding and, according to attorneys, the settlement will not affect these separate lawsuits which are proceeding, unless the leases have a “market enhancement” clause…
Read More “Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners”
Crime | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA’s Anti-Drilling Attorney General Kane Can’t Keep a Press Secretary
March 16, 2015March 16, 2015

Rats fleeing a sinking ship? (Oops…Did we just say that with our out-loud voice??) It seems PA’s anti-drilling and law-breaking Attorney General Kathleen Kane can’t keep a press secretary. Kane, you may recall, is using Lanny Davis, lawyer for Bill “BJ in the Oval Office” Clinton who lied under oath (called perjury, a crime) to defend her. Davis was able to help Clinton keep his job as president, largely by smearing the special prosecutor in the case, Ken Starr. Kane figures Davis may be able to help her keep her job as PA’s AG, even though a grand jury found her to have broken the law and violated the oath of her office (see PA Grand Jury Finds Anti-Drilling AG Kathleen Kane Lied Under Oath). It’s interesting to watch the people around Kane, like those that have to face the press every day and lie for her. They just keep leaving. The latest one was there only two months…
Read More “PA’s Anti-Drilling Attorney General Kane Can’t Keep a Press Secretary”
CONSOL Energy | Energy Companies

CONSOL Trims 2015 Drilling Budget Another $80M; High-Grade?
March 16, 2015March 16, 2015

On Friday, CONSOL Energy issued a press release with lots of flowery words to say they’re whacking their drilling budget again. Instead of spending $1 billion on Marcellus/Utica drilling in 2015 (previously announced in January), they’ll spend $80 million less than that–$920 million. The language CONSOL uses is interesting: they talk about continuing their focus to “high-grade the development plan to further reduce capital in a lower commodity price environment,” whatever that means. Sounds like gobbledygook to us. They use “high-grade” as a verb. If CONSOL had spent $80M more would that have been considered low-grading the development plan? Medium-grading it? We sometimes find the language of high finance amusing as well as befuddling. Here’s the full announcement from Friday. See if you can make heads or tails of it…
Read More “CONSOL Trims 2015 Drilling Budget Another $80M; High-Grade?”