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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Albany County | Anti-Drilling/Fossil Fuel | Industrywide Issues | New York | Research | Statewide NY
Albany Times Union’s Continued Obtuseness on Fracking
Last week MDN highlighted two new studies out that prove fracking doesn’t pollute water supplies (see New Study Finds Well Casings, Not Fracking, Cause Methane Migration and Federal NETL Study: Fracking Doesn’t Contaminate Water Supplies). Objective science proving that fracking is A-OK is anathema to liberal editors at publications like the Albany Times Union. What to do? Ah yes, write an editorial acknowledging those studies (because you can’t hide the news forever), and then lie about those studies by saying people still have “polluted” water…
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20 People Crash FERC Meeting, Complain about Cove Point LNG
Some 20 citizens out of the 88,737 that live in Calvert County, Maryland–where the Dominion Cove Point LNG export facility is to be built–crashed a recent Federal Energy Regulatory Commission (FERC) meeting to express their displeasure with the government’s approval of the Cove Point plant. What really ticked them off was that FERC didn’t send the top brass out to Calvert but instead used lower level reps. So 0.0002 of the population of Calvert County performed what they called “an unannounced intervention,” which is another way of saying they threw a snit fit. More behaving badly in public–like they always do. Here’s a glittering example of “how to win friends and influence people” at FERC brought to you by the anti-drilling folks of Calvert County, all 20 of them:
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Calendar of Events for Sep 22-Oct 5, 2014 [Free]
Below are upcoming events for this week and next. To see the full list of future events, visit this page: //marcellusdrilling.com/calendar/.
NOTE: To have an item included, please email it to: calendar@marcellusdrilling.com.
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Marcellus & Utica Shale Story Links: Mon, Sep 22, 2014
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Energy Companies | Industrywide Issues | Pennsylvania | Range Resources Corp | Regulation | Washington County
PA DEP Fines Range Resources $4.15M for Wastewater Impoundments
Range Resources has just had their knuckles rapped, hard, by the Pennsylvania Dept. of Environmental Protection (DEP) with respect to wastewater/recycled water impoundments (i.e. ponds) they operate in Washington County, PA. Range has been fined the most any company has been fined by the DEP in the modern shale era–$4.15 million. They will also be required to close five of the seven impoundments they’ve operated in the county (Range was closing them anyway), and make major upgrades to the two remaining impoundments. There’s no way to sugarcoat this–Range was taken to the proverbial woodshed by the DEP and got a lot more than a switch to the rear-end…
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NJ’s Largest Utility Becomes 5th Partner in PennEast Pipeline
Even though there has been small but shrill opposition to the recently announced PennEast Pipeline, likening it to violating a virgin (see Pavlovian Opposition Continues Against PennEast, Atlantic Sunrise), the project continues to gain momentum. The $1 billion pipeline project that would flow cheap, abundant and clean-burning Marcellus Shale gas from northeast Pennsylvania all the way to Trenton, New Jersey was announced a month ago (see 3rd New NEPA Marcellus Pipeline Proposed, Connects to Trenton, NJ). The project is a joint venture between four companies, including energy utility giant UGI. The new news is that the quartet of partners in the PennEast Pipeline project have just become a quintet–adding PSEG (Public Service Electric & Gas) Power, New Jersey’s largest utility…
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Video: OH Lawyers Explain Dormant Minerals Act & Impact on Utica
An issue MDN has not previously tackled (until now) that is coming to the fore in Ohio is “the Dormant Minerals Right Act” (DMA) in that state. In a nutshell, there are two DMAs in Ohio–one passed in 1989 that went into effect in 1992, and another in 2006 which added certain additional procedural requirements to the 1989 version. The DMA in its various versions provides for mineral rights that had previously been separated from surface rights to transfer to the surface owner under certain conditions. The problem–for drillers and for landowners in Ohio–is in knowing which set of DMA rules to use (1989 or 2006) in determining who owns the mineral rights. It’s a big problem when drillers are spending sometimes up to $10,000-$12,000 per acre in lease bonuses–to say nothing of where to send the royalty check. Some drillers are holding back on leasing because of this issue. A case now sits with the Ohio Supreme Court, Walker v Noon, that will sort out these important issues. The very sharp lawyers at Ohio law firm Bricker & Eckler have done a masterful job of explaining the case before the Supreme Court, a case brought by their firm…
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Penn State Study on Marcellus & Hotels: Saturation Point?
Is the hotel room shortage in the Marcellus region (Pennsylvania specifically) about to turn into a hotel room glut? Has there been a bit of “irrational exuberance” on the part of hoteliers to build, build, build to meeting demand, only to lead to too many rooms? That may be one conclusion you can draw from a new report by Penn State researchers. The report, titled “The Impact of Marcellus Shale Development on Hotel Revenues in Pennsylvania” (full copy below), was recently published by the International Council on Hotel, Restaurant, and Institutional Education (CHRIE). It set out to determine just how much of an impact Marcellus Shale drilling has had on the hotel industry in PA. They found that (so far) Marcellus drilling has generated $685 million in new revenue and has led to 1,600 new jobs being created…
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Kinder Morgan Sweet Talks Maine to Support Mass. Pipeline
Here’s an interesting move by Kinder Morgan. On Wednesday, KM issued a press release (below) that they’ve filed an “historic” proposal with the Maine Public Utilities Commission offering the State of Maine a long-term contract for natural gas pipeline capacity with the goal of lowering overall energy costs for Maine consumers. This is the same pipeline, an expansion of the mightly Tennessee Gas Pipeline (TGP), that KM plans to build across the state of Massachusetts. According to the KM proposal, Maine can purchase up to 200 million cubic feet of natural gas per day from the new pipeline, when/if built, and virtually solve the problem of high electric and gas rates in Maine forevermore. KM already has 63% of the expanded TGP pipeline capacity spoken for (see Kinder Signs up New Customers for MA Pipeline, 63% of Capacity). Looks like they’re trying to fill the rest of the dance card by getting Maine (and a few others) on board. KM’s announcement on Wednesday also included a notice that they’ve done a pre-filing with the Federal Energy Regulatory Commission on the Pennsylvania portion of the Northeast Energy Direct project, as the pipeline expansion project is called…
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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 
Range Resources has just had their knuckles rapped, hard, by the Pennsylvania Dept. of Environmental Protection (DEP) with respect to wastewater/recycled water impoundments (i.e. ponds) they operate in Washington County, PA. Range has been fined the most any company has been fined by the DEP in the modern shale era–$4.15 million. They will also be required to close five of the seven impoundments they’ve operated in the county (Range was closing them anyway), and make major upgrades to the two remaining impoundments. There’s no way to sugarcoat this–Range was taken to the proverbial woodshed by the DEP and got a lot more than a switch to the rear-end…