Marcellus & Utica Shale Story Links: Wed, Sep 24, 2014
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Accidents | Energy Services | Industrywide Issues | Pennsylvania | Sunoco Logistics | Washington County
Mariner East Pipeline Drilling Spills Mud in Local Creek
Last Thursday, Precision Pipeline of Waynesburg, Pa was drilling under the Little Mingo Creek behind the Mingo Creek Church on behalf of Sunoco Logistics when the drill bit hit something really solid. It stopped the bit and led to drilling mud, often called bentonite, to leak into the the Little Mingo Creek causing a gray “sludge” to travel down the creek in Nottingham and Union townships (Washington County), PA. Bentonite is non-toxic and used in products from shampoo to deodorant and toothpaste. It’s also used to lubricate the drill bit and carry drill cuttings out of the ground. While non-toxic, a whole lot of bentonite in the water can, of course, suffocate fish and cause problems for wildlife that happen to drink it…
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Some of Best Producing Utica Wells are in…the North?!!
According to reports coming from Columbiana County where 24 wells have been drilled and are now connected via pipeline, the Columbiana wells are some of the best producing methane Utica wells in the entire shale play–and that includes the new “it” spot in the southern portion of the play…
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American Energy Partners | EMG | Energy Companies | Energy Services | Industrywide Issues | MarkWest Energy | Ohio | Ohio Gathering | Pipelines | Processing Plants | Statewide OH | Summit Midstream
MarkWest Signs Up McClendon’s New Company as Utica Customer
Yesterday MarkWest Energy and their partners The Energy & Minerals Group and Ohio Gathering Company announced they’ve signed up Aubrey McClendon’s new company American Energy Partners (AEP) as a major new customer in the Utica Shale. Ohio Gathering will hook up their pipelines to AEP’s drilled Utica wells and pump natural gas and liquids, and MarkWest will process it all. The natural gas part will be processed in MarkWest’s Cadiz complex in Harrison County, OH and its Seneca complex in Noble County, OH. AEP’s NGLs will be fractionated (separated) at MarkWest’s Hopedale complex…
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Energy Companies | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Washington County
Range’s Unique Approach to Signing Small Landowners in WPA
Typically villages and cities have not seen Marcellus or Utica Shale drilling under them because of the numbers. To negotiate leases with hundreds or even thousands of landowners over a relatively small area makes no sense when you have to pay landmen and have all of those leases individually vetted by a lawyer. Signing bonuses are piddly and royalty checks aren’t much either. So most drillers have passed by the small villages and towns that sit next to land they otherwise have leased. However, Range has hit on a unique approach. Range has enlisted the help of the Claysville Borough (Washington County, PA) fire department to approach and get residents in the borough to sign a single, standardized group lease–think landowner coalition lease…
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Report Shows Dramatic Increase in Water/Sand Usage in WV Drilling
A few years ago drillers in Ohio and Marshall counties in West Virginia would use an average 1 million pounds of frack sand and 4 million gallons of water. Today, because the horizontal portion of the wells are longer (longer “laterals”), those numbers are closer to 13 million pounds of sand and 10 million gallons of water, according to a Wood Mackenzie report…
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Frack Truck Washing Facility Shut Down Until ODNR Permit Issued
Clear Creek is a division of Dynamic Structures Inc., a company based in New Waterford (Columbiana County), OH that hauls drilling mud, fresh water and yes, frack wastewater for oil and gas companies throughout Ohio, West Virginia and Pennsylvania. Clear Creek had constructed a truck washing facility in the city of Columbiana–population 6,384–to clean the trucks that haul the mud and wastewater. Columbiana’s planning commission has shut down the facility until they obtain a permit from the Ohio Dept. of Natural Resources (ODNR). Once that happens, it appears they can reopen. The problem is, the Mayor of Columbiana lives nearby to where the facility is located and he opposes it. Oops…
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Ceramic Proppant Co. CARBO Ceramics Sales Falter in 3Q14
CARBO Ceramics provides a ceramic alternative to sand for use as a proppant in hydraulic fracturing. Proppants, for those new to MDN, “prop open” the fractures created during the fracking process to allow natural gas and natural gas liquids (even oil) to drain out of shale. A special kind of sand called silica, mined mostly in the Midwest, is the most prevalent proppant used. However, CARBO has an innovated ceramic substance–tiny little beads–that are used as an alternative. The problem, from CARBO’s perspective, is that sand is cheaper and more plentiful, plus other ceramic proppant manufacturers have sprung up to compete with CARBO and those twin reasons are why, according to a press release issued by CARBO yesterday, sales for the company in the third quarter have fallen off…
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SkyTruth Uses Anti-Drilling Volunteers to Count Impoundments
It seems that impoundment hysteria is the newest rage among anti-drillers. An impoundment is nothing more than a pond. As it relates to the drilling industry, the pond (or impoundment) may hold freshwater or it may hold frack wastewater, depending on what kind of impoundment it is. Range Resources was fined last week for leaking impoundments in Washington County (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). What better time for an anti-fracking organization like the so-called “SkyTruth” to poke its head up and claim to be mapping impoundments in Pennsylvania and elsewhere. To hear SkyTruth tell it, there’s impoundments hiding just about everywhere…
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Marcellus & Utica Shale Story Links: Tue, Sep 23, 2014
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Northeast Pipelines Gone Wild! Making Sense of it All
Lately it seems like a week doesn’t go by that a new pipeline project is announced. No one should be surprised, but of course we all are. It only makes sense: drillers have sunk a lot of holes in the Marcellus and Utica, and now all of that gas and natural gas liquids (NGLs) needs a way to get to market. The northeast alone can’t handle all of the gas and NGLs being produced. Yes, the ethane cracker plants will help with regards to ethane–but there’s still way more ethane that even the planned three cracker plants can handle. And way more methane (natural gas) than the northeast can absorb. How do you get it to market? With pipelines. The first thing pipeline operators do is pick the “low hanging fruit”–in this case reversing pipelines and using loops to increase capacity and change the direction of the flows. But according to the midstream companies themselves, the low hanging fruit is about all picked. Now it’s on to the higher hanging fruit–so-called “greenfield” pipelines that cut through “virgin” land. Below we have a very interesting quote about decisions that will soon be made impacting the rest of this decade, along with a very useful chart of pipeline projects…
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OH State Geologist: Upper Devonian Second Look, CO2 May Coax Oil
We have a couple of new names to throw at you when it comes to Ohio shale drilling: Huron and Rhinestreet. You may recognize another name instead: Upper Devonian (UD). Both the Huron and Rhinestreet are layers within the larger grouping called the UD. MDN has been talking about the UD for oh, maybe going on two years now. A number of drillers in the PA Marcellus are experimenting with the UD. Ohio drillers, a year ago, seemed pretty cool to the idea of drilling in the UD (see Ohio Drillers Not So Excited About Upper Devonian Shale). However, that now appears to be changing according to Ohio’s chief state geologist, Tom Serenko…
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American Water Management | Earthquakes | Energy Services | Industrywide Issues | Ohio | Regulation | Trumbull County
ODNR Clears Trumbull Co. Injection Well in August Quake
An earthquake nobody felt on August 31 caused the Ohio Dept. of Natural Resources (ODNR) to shut two frack wastewater injection wells in Weathersfield (Trumbull County), OH operated by American Water Management Services (see ODNR Temporarily Shuts Down Injection Wells After Low-Level Quake). ODNR has been hard at work trying to determine whether or not either of the wells may have caused the low-level (nobody could feel) quake. Last Thursday they gave the shallower of the two wells, the AWMS #1, the all-clear sign. American Water can restart that well at any time (and likely already has). However, they’re not quite ready to restart the deeper AWMS #2…
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Chesapeake Energy | East Resources | Energy Companies | Industrywide Issues | Public Opinion | Range Resources Corp
What Nightmares Keep Drillers Up at Night? Hint: Not Fines
What are the nightmares that keep drillers up at night? Is it the prospect of having to pay big fines, like the biggest fine paid to date in Pennsylvania, announced just last week (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). While we’re sure that fine stung, the money paid was more like a bee sting. According to the drillers themselves and their comments, the thing that keeps them up at night is negative publicity. Bad public relations (PR). It’s not the fine itself but public perception about being fined or being in violation. Some of the problem is caused by an unrealistically high standard of zero mistakes and zero screw-ups imposed by those who oppose shale drilling…
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PDC Energy Settles Lawsuit with Previous Investors for $35M
There’s a fair amount of high finance when it comes to how drilling companies are structured on paper. There are, in some cases, corporations, partnerships, and then there’s the Master Limited Partnership (MLP), a special form of company allowed under United States law to encourage the mineral and extractive industries. At the end of the day, they’re businesses, no matter that form of legal structure they take. However, the legal structure of partnerships is used to encourage investors to invest large sums of money. And when those partnerships are bought out, the investors want their due proceeds. Sometimes there’s a dispute, as happened to PDC Energy (formerly known as Petroleum Development Corporation). PDC had several layers of partnerships that they rolled up into one company back in 2010/2011. The partners in the sub-units purchased felt that they didn’t get their fair share, so they sued. On Friday PDC announced they had settled and over the next 13 years they’ll pay out money to the tune of $35 million…
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Wetzel County, WV Schools Score $4.7M Surplus from Marcellus
What a difference a few years makes. Not so long ago school districts in Wetzel County, West Virginia were forced to cut electives and take other belt-tightening measures due to lack of funds. For fiscal year 2013–the current budget year–the school has an extra $4.7 million in revenue to spend (more than 10% of it’s overall budget). It’s a complete reversal from just two years ago. Where did the extra funds come from? Did Sen. Jay Rockefeller open his extensive coffers (worth $100 million or more) and bestow money on the county? Nope. Did the teacher’s union renegotiate salaries down for their members? Not on your life–what are you crazy?! Did the state send along some of its surplus? What surplus? The state actually cut back on their aid to the county. The answer, of course, is that Marcellus drilling has taken off in Wetzel in a big way and property tax collections have gone through the roof…
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Last Thursday, Precision Pipeline of Waynesburg, Pa was drilling under the Little Mingo Creek behind the Mingo Creek Church on behalf of Sunoco Logistics when the drill bit hit something really solid. It stopped the bit and led to drilling mud, often called bentonite, to leak into the the Little Mingo Creek causing a gray “sludge” to travel down the creek in Nottingham and Union townships (Washington County), PA. Bentonite is non-toxic and used in products from shampoo to deodorant and toothpaste. It’s also used to lubricate the drill bit and carry drill cuttings out of the ground. While non-toxic, a whole lot of bentonite in the water can, of course, suffocate fish and cause problems for wildlife that happen to drink it…
Lately it seems like a week doesn’t go by that a new pipeline project is announced. No one should be surprised, but of course we all are. It only makes sense: drillers have sunk a lot of holes in the Marcellus and Utica, and now all of that gas and natural gas liquids (NGLs) needs a way to get to market. The northeast alone can’t handle all of the gas and NGLs being produced. Yes, the ethane cracker plants will help with regards to ethane–but there’s still way more ethane that even the planned three cracker plants can handle. And way more methane (natural gas) than the northeast can absorb. How do you get it to market? With pipelines. The first thing pipeline operators do is pick the “low hanging fruit”–in this case reversing pipelines and using loops to increase capacity and change the direction of the flows. But according to the midstream companies themselves, the low hanging fruit is about all picked. Now it’s on to the higher hanging fruit–so-called “greenfield” pipelines that cut through “virgin” land. Below we have a very interesting quote about decisions that will soon be made impacting the rest of this decade, along with a very useful chart of pipeline projects…
What are the nightmares that keep drillers up at night? Is it the prospect of having to pay big fines, like the biggest fine paid to date in Pennsylvania, announced just last week (see