Marcellus Drilling News

Broome County | Industrywide Issues | Lease & Royalty Payments | New York | Seismic Testing

Kirkwood NY Landowner Group Actively Negotiating Lease Deal (!)
March 28, 2014March 28, 2014

What’s this? Signs of life in moribund New York on the gas leasing front?? Indeed it’s true. MDN was tipped on two bits of news that will be encouraging for some New York landowners. One bit of news is that the Kirkwood, NY Gas Coalition (outskirts of Binghamton, NY, in Broome County) may soon call for a meeting of coalition members. It seems behind the scenes the coalition steering committee has been negotiating a gas lease for members.

The second bit of news is that some NY landowners who live close the border with PA (in the Kirkwood and Windsor areas) have been contacted and asked to sign an agreement to allow seismic testing on their land. We have a copy of a generic contract proposed by the Kirkwood Coalition attorney (embedded below) which he says strikes a better balance for landowners who want to sign such an agreement. Both pieces of news together give a spark of hope for NY landowners. But let’s not go overboard. As Donald Sutherland’s character says in the Hunger Games, a little hope is a good thing, a lot of hope is dangerous…
Read More “Kirkwood NY Landowner Group Actively Negotiating Lease Deal (!)”
Lease & Royalty Payments | Pennsylvania | Statewide PA | Utica Shale

NARO-PA Meeting: Marcellus Decline Rates, Utica Shale in PA
March 28, 2014March 28, 2014

Yesterday kicked off the first day of the annual National Association of Royalty Owners (NARO) Pennsylvania chapter annual convention in State College, PA. There were (at least) two major presentations of consequence at the meeting for landowners in PA in particular, but also for NY and other states too. The first was a presentation by Steve Karabin, CEO of the Rhino Group and Jim Ladlee, associate director with Penn State Marcellus Center for Outreach and Research, on the topic of Marcellus well decline rates. You may recall both Steve and Jim co-authored a new section in the most recent Marcellus and Utica Shale Databook (Volume 3 of the 2013 series). They presented their findings on well decline rates at the meeting yesterday, along with unveiling a new royalty calculator that landowners can use. Read below for their rule-of-thumb numbers all landowners with Marcellus wells can use to estimate royalties.

Second was an intriguing talk by Penn State professor and Marcellus Shale expert Dr. Terry Engelder–only this time he was talking about the Utica Shale in PA. Engelder explained where he believes the Utica may or may not be economically drillable in PA–and why. Interesting stuff. See some of his talk below too…
Read More “NARO-PA Meeting: Marcellus Decline Rates, Utica Shale in PA”
Energy Services | Industrywide Issues | Litigation | Lycoming County | Pennsylvania | Pipelines | PVR Midstream

ULS Says PVR Marcellus Bankrupted Their Company by Not Paying
March 28, 2014March 28, 2014

Utility Line Services Inc. (ULS), a company that does construction work for utility companies–like digging trenches and laying pipeline–is suing PVR Marcellus Gas Gathering in a Delaware County, PA court. ULS says PVR owes them more than $17.7 million in unpaid invoices and another $7.8 million in lost profits. The lawsuit stems from work done by ULS for PVR in laying 17 miles of pipeline in Lycoming County. Like all lawsuits, this one is a bit complicated, but essentially ULS says PVR slowed and then stopped payments, even though the pipeline was completed and gas now flows through it.

Both companies are pointing the finger at the other saying the other company was responsible for obtaining certain permits, and lack of those permits caused delays and increased costs in overtime and project overruns. Unfortunately PVR’s lack of payments to ULS has bankrupted ULS. They’ve closed their doors, laid off 600 workers and sold their equipment at auction. Not a happy ending. Here’s the story behind the lawsuit just getting under way and expected to run for at least three weeks in Delaware County Common Pleas Court…
Read More “ULS Says PVR Marcellus Bankrupted Their Company by Not Paying”
Industrywide Issues | Pennsylvania | Research | Roads | Statewide PA

Study Says Each PA Well Creates $5-$10K+ in Road Damages
March 28, 2014March 28, 2014

A new study recently published in the peer reviewed Journal of Infrastructure Systems from a half dozen students and professors, some of them working for RAND Corporation, attempts to answer the question, How much road damage due to truck traffic happens in Pennsylvania–and how much does it cost? The study, titled “Estimating The Consumptive Use Costs of Shale Natural Gas Extraction on Pennsylvania Roadways” (full copy embedded below), was submitted for consideration a year ago–in March 2013. It was accepted by the Journal in November and finally published in their February 2014 issue.

The folks doing the research are smart–members of the American Society of Civil Engineers–we don’t dispute their credentials. What did they find? Using estimates of how many truck trips it takes to drill a well from data collected by the New York Dept. of Environmental Conservation (yes, NY data where there is no shale drilling), the authors estimate that for more frequently traveled state and local roads in PA the damage amounts to an average of $5,000 to $10,000 per well drilled. If you include less-traveled rural roads, that number jumps to $13,000 to $23,000 per well average…
Read More “Study Says Each PA Well Creates $5-$10K+ in Road Damages”
Economic Impact | Energy Services | Ethane | Industrywide Issues | Jobs | Odebrecht | Processing Plants | Statewide WV | West Virginia | Wood County

WV Commerce Sec Burdette Praises Odebrecht/Antero, Warns Drillers
March 28, 2014March 28, 2014

Aside from WV Gov. Earl Ray Tomblin, no one in West Virginia has been more dedicated, more focused and more committed to finding an ethane cracker plant for the state than WV Commerce Secretary Keith Burdette. MDN has stories going back years that mention Burdette and his quest for a cracker (just one example: WV’s Burdette Still in Hunt for Ethane Cracker Plant). We think it’s a fair statement to say without Burdette, the Odebrecht cracker plant project would not have happened. Our hat is off to Keith and the marvelous work he’s done for the state.

Yesterday Keith delivered a rousing speech at the Marcellus to Manufacturing Ethane Development Conference at the Charleston Civic Center. We have a transcript of his speech below. In it, Keith acknowledges the contributions of Odebrecht’s David Peebles in making this project happen. He also praises Antero Resources for their bold and brave commitment to providing half of the ethane for the new cracker plant. Finally, Keith sounds a word of warning to other drillers that are signing agreements to ship ethane out of the northeast region. He believes they may want to reconsider. The northeast has enough ethane for “a dozen crackers” if so much of it wasn’t heading to the Gulf Coast or Canada via pipeline…
Read More “WV Commerce Sec Burdette Praises Odebrecht/Antero, Warns Drillers”
Housing | Industrywide Issues | Marshall County | West Virginia

Man Camps Spring Up in Marshall County, WV Near Drill Sites
March 28, 2014March 28, 2014

Housing for workers is always an issue when a lot of drilling comes to town. Even if rig workers are not from out of state, more times than not, they are from another area in the state being drilled. That is, they’re still “out of towners” and they need a place to stay. Sometimes drillers will rent hotel rooms for workers. Sometimes RV parks fill up. And sometimes local apartment rentals go through the roof, creating a “crisis” for welfare slugs who need to rent a decent place to live while they don’t work (see New Study Claims Housing Crisis in NE PA from Gas Drilling).

Enter the man camp. Or as it’s called in Marshall County, WV, the “labor camp.” Labor camp sounds like something from North Korea or the old Putin-style Soviet Union. At any rate, labor camps are springing up in Marshall County, WV to handle some of the need for workers to have a place to stay while working on rigs that move from place to place…
Read More “Man Camps Spring Up in Marshall County, WV Near Drill Sites”
Energy Companies | Industrywide Issues | New York | Pipelines | Regulation | Seneca Resources | Steuben County

17-Mile Gas Pipeline in Steuben County, NY Makes Progress
March 28, 2014March 28, 2014

Empire Pipeline, a subsidiary of National Fuel Gas Company (which also owns driller Seneca Resources) is asking the Federal Energy Regulatory Commission (FERC) for approval on a new 17-mile pipeline in Steuben County, NY. The project is called the Tuscorara Lateral Project and will cost a projected $43 million. The pipeline will connect a gas storage field and compressor station in Tuscarora, NY (also owned by National Fuel Gas) with the existing Empire Pipeline network–a network that stretches from Buffalo to Syracuse and down to Corning. This “little” piece of pipeline will open up much needed extra volumes of natural gas for Upstate New Yorkers.

Empire/National Fuel is now negotiating with landowners to run the pipe under their property. They hope to begin building later this year and have the pipeline in service in November 2015. Below is a story about the project, the reason for it, the jobs it will create, and finally a copy of a presentation given last year at a special open house with full details…
Read More “17-Mile Gas Pipeline in Steuben County, NY Makes Progress”
Education | Energy Companies | Industrywide Issues | Noble Energy | Statewide WV | West Virginia

Noble Energy Donates $250K to WV Community College Program
March 28, 2014March 28, 2014

Noble Energy certainly live up to it’s name of “noble.” Earlier this week Noble announced a $250,000 one-time gift to the West Virginia Community College’s new Appalachian Petroleum Technology Training Center. The Center offers one-year certifications and two-year degrees in petroleum technology–just one of 14 programs in the country like it. MDN previously wrote about the new program in May 2013 (see New Appalachian Petroleum Technology Training Center in WV). Graduates coming from the program have the ability to earn between $60,000-$100,000 per year–starting! It’s a fabulous program and Noble has really stepped up to the plate to ensure the program not only survives, but thrives–so kudos to Noble.

Here’s the announcement from the Community and Technical College System of West Virginia (WVCTCS):
Read More “Noble Energy Donates $250K to WV Community College Program”
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Mar 28, 2014
March 28, 2014March 28, 2014

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: Fri, Mar 28, 2014”
Antero Resources | Braskem | Economic Impact | Energy Companies | Energy Services | Ethane | Industrywide Issues | Jobs | Odebrecht | Processing Plants | Statewide WV | West Virginia | Wood County

Antero to Provide 50% Ethane Needed at Parkersburg Cracker Plant
March 27, 2014March 27, 2014

The ethane cracker plant planned for Parkersburg (Wood County), WV, to be built by Odebrecht and operated by Odebrecht subsidiary Braskem America, took another giant step closer to reality yesterday. Powerhouse Marcellus/Utica driller Antero Resources announced they will provide 30,000 barrels per day of ethane for the proposed new plant when/if it gets built. That’s half of what the plant needs to operate. Antero Resources CEO Paul Rady was joined by Odebrecht VP of business development David Peebles on stage at the Marcellus to Manufacturing Ethane Development Conference at the Charleston Civic Center for the big announcement yesterday. WV Gov. Earl Ray Tomblin took to the stage to crow about the deal too (he’s earned the right).

It was just Monday of last week that MDN observed that the Odebrect cracker plant just “feels” like it’s going to happen (see Odebrecht’s WV Ethane Cracker has The Big Mo–Momentum). Yesterday’s Antero announcement is more evidence of that. Below is the official Antero announcement about their ethane contribution to the proposed new cracker, along with a report of who said what about the deal at yesterday’s Charleston conference…
Read More “Antero to Provide 50% Ethane Needed at Parkersburg Cracker Plant”
Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

County Officials Meet with Shell on PA Cracker, Come Away Hopeful
March 27, 2014March 27, 2014

Seems like it’s “cracker day” at MDN. Long before Odebrecht announced their potential ethane cracker plant for Parkersburg, WV, Shell announced plans to build a cracker in Pennsylvania. In fact it was exactly two years ago this month that Shell announced the location would be Monaca (Beaver County), PA (see Shell Announces Location of Ethane Cracker Plant). PA state legislators eventually voted on a package of significant tax breaks for the proposed new plant (see PA Legislature Reaches Deal on Tax Credit for Cracker Plant). However, since that time, it seems like the PA cracker deal has cycled through highs and lows as to whether it would actually get built (see PA Ethane Cracker – On Again, Off Again…Now On Again?).

More recently MDN told you the pendulum had swung back to the pessimistic side (see Shell’s Shale Pessimism Signals Worry for Some re PA Cracker). But what’s this? Last week some 30 Beaver County officials met with Shell about the proposed ethane cracker plant and left that meeting feeling “hopeful”–which is a good sign. Shell told the officials about moving forward with plans to move a portion of a local roadway, relocate power lines and other big-ticket projects that Shell would not be spending money on unless there is serious interest in moving forward. Here’s more from last week’s hopeful meeting between Shell and Beaver County officials…
Read More “County Officials Meet with Shell on PA Cracker, Come Away Hopeful”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Dem Floats 5% Marcellus Severance Tax “For the Children”
March 27, 2014March 27, 2014

Pennsylvania Democrats continue their push for economic suicide. Borrowing from their 50 year-old playbook, the latest push is to impose a 5% severance tax on Marcellus Shale drilling in the state–which would effectively kill all drilling–and use the money (please don’t laugh)…”for the children.” Yes folks, PA’s schools suck big-time, and the only thing that can save them now is to extract some money out of the pockets of those nasty, filthy (and rich) drillers so teachers can educate young crumb crunchers to the superiority of socialism and taking money from one group (those who work) to redistribute to another (those who don’t work). What better way than to sink a pipeline right into the piles of money that come from drilling? What dunces.

State Sen. Vincent Hughes, dunderhead Democrat from the Philadelphia area, said he will introduce legislation to impose a 5% Marcellus Shale severance tax that will be DOA, so he and other Dems can use it as a politically divisive campaign issue come November. Such caring (and intelligent) folks those PA Democrats. Just a teeny, tiny problem Vinny–your party has voted to stop all Marcellus drilling (see PA Democrat Party Votes to End Marcellus Shale Drilling Statewide). How will you tax something that doesn’t happen anymore? Oops…
Read More “PA Dem Floats 5% Marcellus Severance Tax “For the Children””
Energy Services | Industrywide Issues | New York | Pennsylvania | Pipelines | Regulation | Statewide NY | Susquehanna County | Williams

EPA/DOI Ask for More Time to Review PA-NY Constitution Pipeline
March 27, 2014March 27, 2014

NGI’s Shale Daily is reporting both the federal Environmental Protection Agency (EPA) and the Dept. of Interior (DOI) have filed requests with the Federal Energy Regulatory Commission (FERC) to extend the comment period on the proposed 124-mile Constitution Pipeline. The Constitution will run from the prolific gas fields of Susquehanna County, PA across the border and up into Schoharie County, NY where it will interconnect with two major interstate pipelines–carrying Marcellus Shale natural gas produced by Cabot Oil & Gas and other drillers (see New Marcellus Constitution Pipeline Announces “Final” Route). Along the way a local utility company will tap into the Constitution to deliver natural gas to rural locations (see Leatherstocking to Tap Constitution Pipeline for Local Deliveries).

However, the Constitution will need to make a few changes, according to FERC (see FERC: Constitution Pipeline Should Make Changes to Lessen Impacts). But nothing too major. That is, unless the EPA and DOI jump in with new demands. Their delay is unwelcome and potentially troubling–although we’re not ready to hit the panic button just yet. Here’s what Shale Daily says about the request from EPA & DOI:
Read More “EPA/DOI Ask for More Time to Review PA-NY Constitution Pipeline”
Ethane | Industrywide Issues | Meetings | Statewide WV | West Virginia | Wood County

WV Marcellus to Manufacturing (M2M) Talks Crackers, Jobs & More
March 27, 2014March 27, 2014

The 2014 Marcellus to Manufacturing Ethane Development Conference (M2M) is part of a larger event taking place this week in Charleston, WV–the West Virginia Construction and Design Expo, being held at the Charleston Civic Center. Yesterday most of the talk at M2M revolved around the Antero Resources announcement that they will provide 30,000 barrels of ethane per day for the proposed Odebrecht cracker plant (see today’s lead story). However, there were other presentations and topics, including jobs, the petrochemical industry in WV, and more.

Here’s a first-hand account of yesterday’s M2M from a Parkersburg reporter:
Read More “WV Marcellus to Manufacturing (M2M) Talks Crackers, Jobs & More”
Energy Services | Falcon Drilling

More Drilling Rigs Come to the Utica/Marcellus – from Falcon
March 27, 2014March 27, 2014

Falcon Drilling, which operates 13 drilling rigs in PA, WV and the OH Marcellus and Utica, has just purchased three new drilling rigs for their northeast drilling operations–good news for Marcellus and Utica operators.

Here’s the low down on the types of rigs Falcon has just purchased, and where they plan to use them…
Read More “More Drilling Rigs Come to the Utica/Marcellus – from Falcon”
Accidents | Energy Services | Industrywide Issues | Ohio | Pipelines | Statewide OH | Sunoco Logistics

Sunoco Logistics Oil Pipeline Leaks 20K Gal in OH Nature Preserve
March 27, 2014March 27, 2014

Last Tuesday Sunoco Logistics discovered a 5-inch crack leaking crude oil from their Mid-Valley Pipeline–and the oil was leaking into the Oak Glen Nature Preserve just west of Cincinnati, OH. Ouch. Initial reports were that 10,000 gallons of oil had leaked before the pipeline between Hebron, KY and Lima, OH was shut off. That estimate has been doubled–it’s now thought more than 20,000 gallons of oil leaked. Double ouch.

What does this have to do with Marcellus/Utica shale drilling? Not much. It’s possible some of the oil comes from Ohio–more likely from other locations (we don’t know). Sunoco Logistics is the company that has built (and is building) the Mariner West and Mariner East ethane/NGL pipelines–but it’s a stretch to compare those gas pipelines with the Mid-Valley oil pipeline. The connection between the oil spill and northeast shale drilling is this: MDN editor Jim Willis first learned about the leak at the Oil & Gas Awards’ “Conference for Excellence” last week in Pittsburgh. Jim was sitting next to an official from McCutcheon Enterprises–one of the companies called in to clean up the mess–who told Jim about the spill and his company’s rapid response to work on getting it cleaned up…
Read More “Sunoco Logistics Oil Pipeline Leaks 20K Gal in OH Nature Preserve”