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    Ongoing Fallout from PA Supreme Court’s Wrong Act 13 Decision

    bozo mushroom cloudOne month ago Pennsylvania got the sad news that the state Supreme Court struck down important (and large) sections of the 2012 Act 13 Marcellus Shale drilling law (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). The disappointing aspect of the decision is that Chief Justice Ron Castille, a Republican, joined three Democrats on the bench in deciding to use, for the first time, PA’s Environmental Rights Amendment to create new rights that didn’t exist before (drunk on their own power?). In fact the basis on which Castille made his poor judgment was based on his admitted prejudiced view that drilling and fracking is inherently harmful to the environment–which of course is not the case (see Industry Vet Points Out Error in PA Supreme Court Act 13 Ruling).

    One of the biggest problems with the PA Supreme Court decision is that the four justices agreeing to strike down zoning (and other) provisions in Act 13 could not agree on their reasons for doing so, weakening the decision’s usefulness in future cases. They also sent portions of the original case back to a lower court that, if those decisions go the wrong way, will totally wipe out the Act 13 law, sending PA back to the drilling stone ages again, without important environmental protections provided for under the law. Last week Penn State University law professor Ross Pifer analyzed the high court’s poor decision on a webinar call…
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    New Study: Conventional Gas Wells Produce 3X Wastewater as Shale

    Let’s frame this up so you have a proper understanding for the source of this information: A postdoctoral research associate dude at Duke University (a really smart student) teamed up with another smart student getting her master’s degree in environmental management at Duke, to study how much wastewater is produced by both conventional (or traditional) natural gas wells and unconventional horizontally-drilled shale wells in Pennsylvania. In essence they researched and wrote a term paper on the topic which will be published in the February issue of the journal Water Resources Research (see below). The postdoctoral dude has since left Duke and is now an assistant professor of biogeochemistry at Kent State. Hence, we have a “new study issued by Kent State and Duke University.” We’re not denigrating their accomplishments! Just giving you a proper understanding for how these “studies” are sometimes researched and how they’re reported about in the media.

    Anywho, the research from our two intrepid students shows that overall, because there are so many shale wells in PA, and because it takes a lot more water to frack a shale well than a conventional well, that (surprise!) shale wells produce more wastewater that conventional wells. The interesting aspect of their research–the finding that is worthy of putting their names in academic lights over–is that per unit of gas recovered, shale wells produce only 1/3 as much wastewater as conventional wells. Let’s put this startling discovery another way: If irrational anti-drillers banned all horizontal fracking of shale wells tomorrow in PA (whoops, the PA Democrat Party is trying to do just that!), and we went back to the days of only mining gas by conventional wells, in order to produce as much gas as we now produce today, we would produce three times as much wastewater to get it from conventional wells. We’d also have to sink way more holes in the ground to get it…
    Read More “New Study: Conventional Gas Wells Produce 3X Wastewater as Shale”

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    Rice Energy IPO Soars, Brings in $84M More Than Expected

    Last Friday Rice Energy, a company devoted to drilling in the Marcellus and Utica Shale, floated their initial public offering (IPO). In plain language, they started to trade shares of stock on the New York Stock Exchange. So how did they do? Not bad, especially since the Dow Jones Industrial Average dropped like a rock on Friday–down 318 points (2%). The Rice Energy stock was priced by the underwriters at $21 per share. By the closing bell it was trading at $21.90, a 4% jump. It’s certainly not as impressive as the recent Antero Resources IPO (see Antero’s Stock Climbs 18% on First Day of Trading). However, Rice is a much smaller company, so it’s not really fair to compare. The Rice IPO infused the company with $924 million in new revenue (selling 44 million shares). That’s 10% more than the $840 million they were hoping for–so we would term their IPO a huge success (see Rice Energy Launches IPO, Hopes to Raise $840M). The company now has a market capitalization (value) of $2.8 billion. Nicely done!

    Some reaction and analysis of Rice’s stock debut last Friday by energy investment advisory firm Renaissance Capital:
    Read More “Rice Energy IPO Soars, Brings in $84M More Than Expected”

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    Glow in the Dark: Are We Being Irradiated by Frack Waste?

    radioactive zombiesThe fear-mongering continues by those who oppose shale drilling. One of the scare tactics used by anti-drillers is to say that frack wastewater and drill cuttings (leftover rock and dirt) are loaded with radiation and by disposing of it in landfills and via wastewater recycling facilities we’ll all end up irradiated, dying long slow deaths from cancer. Or worse yet, we’ll all become radioactive zombies. Hey, maybe someone could make a movie about that! (Unbelievably, they already have: see Friday Foibles: The Scientific Link Between Fracking and Zombies.)

    The Ohio EPA and Dept. of Natural Resources (ODNR) is not much impressed by all these radioactivity claims. Neither are we. One of the favorite drive-by media claims is that drill cuttings are setting off radiation alarms at landfills in record numbers (“hundreds” of times a year). Thing is, those same alarms go off when medical waste is hauled in too–they’re that sensitive that even radioactive dyes are picked up by them. It proves NOTHING. Yet you see that argument often used–fracking dirt contains radition! Whatever. Here’s the latest drive-by attempt to scare people with radioactive waste concerns, this one emitted by the Columbus Dispatch…

    Read More “Glow in the Dark: Are We Being Irradiated by Frack Waste?”

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    PA Dem Consultant Lectures Party to Avoid Marcellus Moratorium

    Every now and again the truth pokes through–even in publications like the Philadelphia Inquirer. We read with interest an op-ed in today’s Philly Inquirer that tells the truth about how the Marcellus Shale is responsible for creating 290,000 jobs in Pennsylvania over the past few years–a state with an unemployment rate stuck above 7%. Some 28,000 of those jobs are “core” industry jobs that pay on average $83,000 per year or more. The op-ed says the Marcellus has given Pennsylvania families a reason to be optimistic about their financial future.

    The fascinating thing to MDN is that the op-ed is written by Democrat consultant Mike Butler, current executive director of the Consumer Energy Alliance (Mid-Atlantic section). Mike is a former political consultant for Democrat Bob Casey for U.S. Senate (who sadly won), Dan Onorato for PA governor (who happily lost to Tom Corbett), and on the staff of former Democrat Congressman Jason Altmire. Huh. A Democrat singing the praises of the Marcellus shale, and at the close of his comments he warns the leaders of his party that the statewide moratorium they say they will enact if they regain political power in the state should be “avoided.” We’d use stronger words, but we’re happy to see at least one Democrat in the entire state hasn’t lost all of his marbles…
    Read More “PA Dem Consultant Lectures Party to Avoid Marcellus Moratorium”

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    NJ Natgas Customers Get 24% Reduction on Their Bill

    An irony of ironies…The anti-drilling lobby in New Jersey is very strong. Even though there’s no recoverable Marcellus Shale gas in NJ, so-called environmentalists continually agitate for a statewide ban on fracking. A number of them also cross the border to make trouble in PA too, showing up for protest rallies. Even though they hate natural gas that comes from fracked Marcellus Shale–the very same protesters burn it to heat their homes and cook their meals. Some of them even use it to power natural gas vehicles.

    So it strikes us as a tad ironic that those same anti-drillers will see yet another huge rebate on their next gas bill from Public Service Electric & Gas (PSE&G), NJ’s largest gas and electric utility. Why? Because PSE&G has been wisely buying cheap Marcellus Shale gas produced in PA, and by law they have to pass along the savings to their customers. So in February their bills will be chopped by 24%, thanks to the same Marcellus gas groups like the Sierra Club are protesting…
    Read More “NJ Natgas Customers Get 24% Reduction on Their Bill”

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    MDN Takes on Seeking Alpha Blogger over Marcellus Decline Rate

    inside baseballThis is an “inside baseball” kind of article. For those with a casual interest in Marcellus Shale drilling, you’re free to move along. For the rest of us, this is an important issue–and that issue is how fast do Marcellus Shale wells (really any/all shale wells) peter out? After you drill a well, how long does it take before the gas quits flowing in economic volumes? It’s certainly important for drillers investing millions and billions–and for landowners who receive royalties. It’s also important for companies that invest big money in processing plants and pipelines (the “midstream” sector) because those fixed costs take time to recoup and you want to be sure the gas flows long enough to make a profit.

    Increasingly the debate is turning to decline or “depletion” rates–how fast wells peter out. The U.S. Energy Information Administration (EIA) introduced a new drilling productivity report in October (a report we LOVE) that tackles the issue of decline rates. EIA lumps “old” wells together in a single number that they track–they call it “legacy production” or gas production from older wells. A freshly drilled well is considered “new” for precisely one month! After that, it’s production is lumped in with all of the other legacy or “older” wells. Sooner or later drillers will quit drilling new wells and all that will be left are legacy wells, so the sport in the investing industry is to guess when that will happen, and how productive those older wells will be. Enter an article on Seeking Alpha that does a deep dive into this issue by an admitted shale gas pessimist…
    Read More “MDN Takes on Seeking Alpha Blogger over Marcellus Decline Rate”

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    New NYC Mayor Comes Out Against Fracking Anywhere in NY

    NYC Mayor Bill De BlasioThe new mayor of New York City, Bill De Blasio, is anti-drilling and proud of it. Yesterday he told reporters he doesn’t want to see fracking anywhere in the state. That De Blasio–wow, what a deep thinker he is! Know where he gets his facts and information from about fracking? Watching movies like Gasland. Such intellectual heft. Such gravitas. The man is clearly smarter than any of the rest of us. Thank God he’s the new mayor.

    Of course, De Blasio apparently doesn’t realize that fracking (of conventional oil and gas wells) happens right now in New York State and has been for over 40 years. But hey, let’s not let something like the truth get in the way of spinning a good fiction for the hoi polloi–us ordinary folks. We’re just so in awe of self righteous jerks intellectual leaders like De Blasio, we simply feel unworthy to be in His presence…
    Read More “New NYC Mayor Comes Out Against Fracking Anywhere in NY”

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    Northeast Propane Shortage – Andrew Cuomo Partially to Blame

    Propane is one of the natural gas liquids (NGLs) that comes out of the ground along with methane (natural gas) in places like southwest PA and eastern OH–otherwise known as “wet gas” areas of the Marcellus and Utica Shale region. There’s been a number of stories recently in the national media about supply shortages of propane. The Pennsylvania Propane Gas Association issued a press release yesterday addressing those concerns–to layout the reasons why propane is in short supply and why prices for it have jumped.

    When you read beyond the headlines, you’ll find there’s a pretty simple reason why propane prices have skyrocketed in the northeast and New England–it’s because of New York’s anti-fracking governor Andrew “the ditherer” Cuomo. He’s not only dithering about whether or not to allow fracking, he’s also dithering on whether or not to approve a new propane underground storage facility near Seneca Lake–what the industry terms a “critical” need to relieve propane supply issues in this part of the country. Here’s a good rundown on the current propane supply issues plaguing the U.S., including Cuomo’s hand in it…
    Read More “Northeast Propane Shortage – Andrew Cuomo Partially to Blame”

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    CONSOL Energy 4Q13 Update: Marcellus Production Up 56%

    CONSOL Energy, the Pittsburgh-based coal mining company that’s transforming itself into a natural gas exploration company, issued an operational update this morning. According to the update, CONSOL’s fourth quarter Marcellus Shale gas production was up 56% over the same period a year ago. For all of 2013, CONSOL drilled 55 horizontal shale wells: 46 Marcellus Shale and nine Utica Shale wells. They completed 59 Marcellus Shale wells and 10 Utica Shale wells last year, and turned in line (switched on) 52 Marcellus Shale and two Utica Shale wells. And it’s full speed ahead for 2014.

    Here’s the full update with details of where CONSOL is drilling and how they’re doing:
    Read More “CONSOL Energy 4Q13 Update: Marcellus Production Up 56%”

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    WV Anti-Drillers Try to Tie Coal Chemical Spill to Fracking

    MDN alerted you yesterday that some businesses on the periphery of the shale drilling industry in West Virginia may be affected by the recent coal-related chemical spill in that state that shut off water to some 300,000 residents (see Bumpy Ride for GreenHunter Because of WV Coal Chemical Spill?). Apparently anti-drilling Democrats in the state aren’t stopping at the periphery of the industry–why not use this unrelated chemical spill tragedy to falsely paint the entire shale drilling industry too? Yeah! What a great idea! (Rahm Emanuel: “You never let a serious crisis go to waste.”)

    And so is born one of the most confusingly false and fact-challenged articles we’ve read in a long time–and that’s saying something. A Huntington News reporter was apparently so wowed by has-been WV politician Charlotte Pritt (who once ran for governor in WV and lost), that he accepted her spoon-fed pablum that the recent coal-related chemical spill “has ties” to the fracking industry. The reporter confusingly cites studies going back years from trustworthy sources like (*cough*) Politico, and sprinkles in liberal doses of liberal dogma like “Halliburton loophole,” and apparently expects you to understand what he and Queen Charlotte are trying to say: frackin’s bad for ya man…
    Read More “WV Anti-Drillers Try to Tie Coal Chemical Spill to Fracking”

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    Rice Energy’s Debutante Ball Happens Today – More Yummy IPO Info

    Today is IPO day for Rice Energy. MDN doesn’t keep mentioning the Rice IPO because we have any kind of financial interest–we don’t invest in any energy stocks, to avoid even the appearance of a conflict of interest. We keep mentioning the Rice IPO because we keep spotting really good information and articles about Rice–things we believe you would be interested in.

    Yesterday we brought you an article from Seeking Alpha with good Rice info (see Rice Energy IPO Launches Tomorrow, Fri Jan 24). Today, we spotted an even better article about Rice on Seeking Alpha from a different author. This one tells us precisely where in the Marcellus and Utica Rice holds their acreage, how many rigs they’re currently running, how many wells they’ve drilled, and yes, who the biggest Rice stockholders are. All helpful information for landowners considering a lease with Rice, potential supply chain partners considering selling things to Rice, and other drillers sizing up a potential new (strong) competitor…
    Read More “Rice Energy’s Debutante Ball Happens Today – More Yummy IPO Info”

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    Hess Goes All in for Shale Drilling in 2014, $550M on Utica Shale

    Over the past couple of years, Hess Corporation–the company whose name you recognize because you probably have filled up your car at one of their gas stations–has been transforming itself from petroleum products marketer (like retail gas stations) to oil and gas driller. Hess still owns some of those gas stations–but not for long. They’re in the process of spinning off retail gas stations into their own company so they can sell it (see Hess Continues Transformation With Plans for Retail Spinoff). Early last year Hess’ plans to become an E&P company was challenged by one of their stockholders (see Corporate Raider Paul Singer Tries to Force Hess Out of Shale). He was obviously unsuccessful in trying to bully Hess into doing his bidding. (Note to Chesapeake: you should have followed Hess’ example.)

    Yesterday Hess released their 2014 capital and exploration budget, and it shows Hess has gone “all in” for shale drilling. The Hess capex budget calls for a whopping $5.8 billion in spending–of that $2.85 billion (49%) will be spent on shale drilling. The lion’s share of Hess’ shale budget will go to drilling for oil in North Dakota’s Bakken Shale. However, they have allocated $550 million for drilling in the Utica Shale this year, with plans to sink 35 new Utica wells. Here’s the full Hess budget released yesterday…
    Read More “Hess Goes All in for Shale Drilling in 2014, $550M on Utica Shale”

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    Oilfield Services Company Canary Buys Wellhead Competitor

    Canary says it is the country’s largest “independent” wellhead services company. They rent equipment and personnel to help energy companies frack wells, and they install wellheads on those wells. Canary, now a $100 million company, announced yesterday that they’ve bought out a smaller competitor: American Wellhead. American has a strong operation in the Permian Shale basin (Texas) which Canary wanted.

    So why is this news for MDN? Because Canary has extensive operations in both the Marcellus and Utica Shale, servicing drillers in the northeast. And because when a company like Canary expands the way they have been expanding, it may mean opportunity for other businesses that work with, or sell to, companies like Canary. And because drillers in the northeast may be interested in knowing what their vendor is up to. For a variety of reasons, we thought this press release from Canary might be interesting for our readers…
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