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    Earth to Mars (School District) – Time to Check into Funny Farm?

    We wonder what they teach at the Mars Area School District (Butler County, PA). One thing they don’t teach is logic and scientific inquiry. Probably too busy showing American Idol re-runs to the kiddies to bother with heftier education pursuits. How else can you explain a school board, and parents, who turn down $1 million+ to lease 175 acres of school land for shale drilling that would happen more than a mile below solid rock with no adverse affects and with no surface disturbances? We’d call it mass insanity (time to check into the local psychiatric hospital)–but that would be unkind.

    Tuesday night the Mars Area School District school board voted 9-0 to reject an offer from Rex Energy to lease the school’s property, which sits next to private property Rex has already leased and will still drill on anyway. The Rex offer was $4,000 per acre up front as a signing bonus, and another $330,000 in advance royalties, for a grand total of $1 million. Drilling will go on all around the school, but those sharp-as-a-tack board members have now denied the children $1 million they could of had. Hey, it’s always for “the children,” right? Heartless board. The anti-drillers present for the vote were positively orgasmic that the school board voted it down unanimously. Go figure…
    Read More “Earth to Mars (School District) – Time to Check into Funny Farm?”

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    NTSB Faults NiSource/Columbia for WV Pipeline Explosion in 2012

    accident waiting to happenOn December 11, 2012, a portion of the Columbia Gas Transmission pipeline (owned by Nisource) exploded near Sissonville, WV, 10 miles north of Charleston. The resulting fire burned for more than an hour and shut down a portion of nearby Interstate 77 for days (see Columbia NatGas Pipeline Explodes Near Charleston, WV). It’s been a long time coming, but on Monday the National Transportation Safety Board (NTSB), that did a full investigation of the explosion, turned in their final report. It was pretty damning for NiSource/Columbia. The conclusions of the investigators are that a) the pipe had corroded in that section–a long time ago, and b) Columbia hadn’t inspected that section of pipeline since (unbelievably) 1988. In other words, it was an accident waiting to happen.

    Below we have the press release from the NTSB with their high level findings, then the full 32-page report released Monday, and finally, the lame response issued by NiSource/Columbia “thanking” the NTSB for just ripping them a new one…
    Read More “NTSB Faults NiSource/Columbia for WV Pipeline Explosion in 2012”

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    April EIA DPR: Marcellus Continues Reign as King of the Shale

    A periodic check-in of our favorite Energy Information Administration report, the Drilling Productivity Report (DPR), shows the Marcellus Shale continues to be the United States’ (and world’s!) leading shale play when it comes to production of natural gas. The April DPR, released two days ago, shows the Marcellus is forecast to increase production by an average 288 million cubic feet per day (Mmcf/d) in April over March. The increase, as always, comes from a mix of newly drilled wells coming online and previously drilled wells.

    Below we have analysis of the latest numbers, along with the full DPR for April, yesterday’s EIA Today in Energy update (which talks about the increasing efficiency of new wells in the Marcellus), and screen shots of two charts on the DPR home page, charts they don’t include in the PDF (for whatever reason, but should be)…
    Read More “April EIA DPR: Marcellus Continues Reign as King of the Shale”

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    Noble Energy’s Huge Vote of Confidence in the Marcellus

    Noble Energy has big plans for the Marcellus. Yesterday the company confirmed they will be new tenants in a huge new office building going up in the Southpointe business park near Pittsburgh. The new building being built by Horizon Properties will be 208,000 square feet, of which Noble is leasing 138,000 square feet. Noble’s president & CEO David Stover says the Marcellus is “the premiere gas play in the United States,” and the Marcellus figures prominently in Noble’s future plans.

    Noble plans to employ 200 people in the new facility by the end of this year, and eventually–400-450 people at the facility. PA welcomes Noble to the Marcellus!…
    Read More “Noble Energy’s Huge Vote of Confidence in the Marcellus”

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    MDN’s Guide to New TENORM Rules for OH Utica Drillers

    Last year, the Ohio state legislature passed an omnibus “everything but the kitchen sink is in there” bill (HB59) that covered, among other things, a requirement that oil and gas drillers need to test drilling waste for TENORM–or Technologically Enhanced Naturally Occurring Radioactive Material. Drillers need to test for TENORM (or naturally occurring radioactivity) in wastewater and drill cuttings under certain conditions, according to the legislation. MDN tracked down House Bill 59 and read it. We include the relevant section from the massive 699-page law below.

    It appears to MDN’s eye that if OH shale drillers recycle the waste and re-use it on site (in the case of fluids), there is no need to test. Likewise, if they cart fluids to another nearby drill site for re-use, no need to test. If they dispose of it via a Class II injection well–no need to test. That covers about all of the ways Utica drillers handle liquid waste. It seems to us the only real requirement will be to test drill cuttings (leftover rock and dirt) for radioactivity before disposing of them in landfills. The reason this is news now is because the Ohio Dept. of Health was charged with drafting guidelines for how such materials should be sampled and analyzed to determine whether TENORM levels are high enough to warrant special treatment. The DOH recently released those guidelines, which OH drillers will now need to pay attention to when it comes to testing at the drill site…
    Read More “MDN’s Guide to New TENORM Rules for OH Utica Drillers”

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    Impact of WV’s New Chemical Tank Law on Marcellus Drillers

    An important update on the new rules coming to West Virginia drillers impacting how they use above ground chemical storage tanks. As MDN previously reported, the WV legislature passed SB373 in the closing hours of the 2014 legislative session (see Fate of 3 WV Laws that Impact Marcellus/Utica Drilling). That bill was in response to a chemical leak that affected the drinking water for 300,000 WV residents. Even though the leak was not related to oil and gas drilling (it was related to coal mining), the new rules governing above ground storage tanks for chemicals affect a number of industries, including the Marcellus Shale drilling industry.

    Although the final language of the bill has yet to be set in stone and signed into law, enough of it is now known that it can be analyzed. The bright legal beagles at the energy law firm of Lewis Glasser Casey & Rollins, PLLC have done just that. Here is how the newly minted SB373, once signed into law, will impact WV’s oil and gas industry:
    Read More “Impact of WV’s New Chemical Tank Law on Marcellus Drillers”

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    Investment Firm Backs 3 Hotels, in Hunt for Restaurants in Utica

    Energy investment firm Drill Capital is not only in the process of building one hotel in the Utica Shale with plans on the boards to build two more (all in eastern Ohio), the company also wants to lure a restaurant chain to the Utica too. You don’t put up investors’ money to build hotels and restaurant in rural locations unless you firmly believe the business will be there for years to come. That’s precisely what Drilling Capital’s young founder and managing partner, Farid Guindo, believes…
    Read More “Investment Firm Backs 3 Hotels, in Hunt for Restaurants in Utica”

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    Chevron CEO Says Marcellus Drilling Scaled Back Due to Low Price

    When the annual analyst teleconference for a big oil company is forecast to go 2.5-3 hours long, you know the news will not be good. It doesn’t take that long unless you have explain and re-explain yourself multiple times. Although MDN did not participate in yesterday’s annual analyst call for Chevron, by all accounts, the news was negative and the company’s stock ticked down by the end of the day by $1.33 per share (1.1%).

    Chevron is a huge company–the second largest oil company in the United States based on market capitalization. The only thing MDN was interested in, aside from any mentions about the recent well fire in Greene County, PA (no mentions of the well fire in the call that we could find), is, What is Chevron up to in the Marcellus? The answer we got from looking at the slides and reading media reports of yesterday’s call is: not much. Chevron Chairman and CEO John Watson said “some” of the drilling in the PA Marcellus has been curtailed because of the low commodity price of natural gas. MDN’s Marcellus and Utica Shale Databook show Chevron’s permitting activity picked up a bit toward the end of 2013. It seems from Watson’s comments that they will continue to actively drill in the Marcellus in 2014, but likely not at the same levels seen in 2012 and 2013…
    Read More “Chevron CEO Says Marcellus Drilling Scaled Back Due to Low Price”

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    DRBC Selects Steve Tambini as New Leader, Enviro Groups Unsure

    Steve TambiniIt is the end of an ignominious era. Carol Collier, whose own anti-drilling views have stopped any forward progress on potential Marcellus Shale drilling in the Delaware River Basin, will tomorrow leave the Delaware River Basin Commission (DRBC) that she has headed for 15 years. Last September when she announced she would retire this March, we predicted her platitudes about finalizing draft shale drilling plans would go nowhere. We were right (see DRBC Director Carol Collier Announces Her Retirement). It’s now goodbye and good riddance.

    In Collier’s place as the new executive director of the DRBC is Steven J. Tambini, currently vice president of operations at Pennsylvania American Water. Steve has been a water guy for over 30 years with lots of experience in water supply engineering and water resource planning. He will take over on August 1st. Until then, Steve is not saying much. The Marcellus Shale Coalition says they’re looking forward to working with Tambini to craft common sense regulations that will allow shale drilling in places like Wayne County, PA. The rabidly anti-drilling Delaware Riverkeeper organization says they don’t know Tambini. Translation: “He’s not one of us.” Which may indeed be a good sign…
    Read More “DRBC Selects Steve Tambini as New Leader, Enviro Groups Unsure”

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    2 New Earthquakes Near Youngstown, OH – Fracking Connection?

    A few years ago a now-shuttered injection well near Youngstown, OH was linked to a series of earthquakes in the area (see ODNR Finds Youngstown Injection Well Caused Earthquakes). The injection well was found to be located over an active fault–and when you inject a lot of liquid into a fault area, you get earthquakes.

    When earthquakes happen in areas like Youngstown–an area that doesn’t usually see such activity–it’s cause for concern. Yesterday morning there were two more earthquakes big enough to be felt in the Mahoning Valley area. The first quake was a 3.0 on the Richter scale, and the second a 2.6. So, out of “an abundance of caution,” the Ohio Dept. of Natural Resources (ODNR) has asked the single drilling operation in the area–Hilcorp Energy–to suspend their drilling activity for now. There are no active injection wells in the area–only Hilcorp’s Utica Shale drilling operation of 7 wells on 2 well pads…
    Read More “2 New Earthquakes Near Youngstown, OH – Fracking Connection?”

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    Fascinating Look Behind the Curtain of the Phila. Gas Works Deal

    Last week MDN told you about the potential sale of the country’s largest municipal-owned natural gas utility–the Philadelphia Gas Works (PGW)–to Connecticut utility company UIL (see Phila. Gas Works Deal for $1.86B – Marcellus/Utica One of Keys). The law firm that structured and brokered the deal says that while the legal aspects were complicated, the legal aspects were the “easy” part. The hard part? The coming political buzz saw from selling the city-owned asset (an asset that’s been losing money for forever under city ownership). Labor unions are actively opposing the sale, afraid it will mean layoffs.

    Why buy a money loser? According to the lawyer in charge of the deal, Gregory L. Seltzer, UIL wanted to buy PGW for three reasons…
    Read More “Fascinating Look Behind the Curtain of the Phila. Gas Works Deal”

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    Aubrey McClendon: Utica Shale ‘Man in Motion’

    If you (foolishly) believed the stories about Aubrey McClendon and his oversight of the company he co-founded, Chesapeake Energy, you would believe that after he was bounced out of the company no one would ever again give him a dime. Under McClendon, supposedly Chessy spiraled out of control with debt and mismanagement. McClendon was cast as a maverick–a wildcatter who threw money around on $300 champagne lunches and managed to grow the company beyond his ability to run it. The problem with that view is the truth of what’s happened to Chesapeake since McClendon’s departure. Corporate raider Carl Icahn is the one controlling Chessy these days–for his own personal benefit. Icahn and his lieutenant CEO Doug Lawler have sold off key assets right and left and fired thousands–actions that don’t have squat to do with improving the financial health of the company. It only improves Icahn’s per share value.

    McClendon, less than a year from being unceremoniously dumped by Icahn, has a new company with $3 billion of OPM (other people’s money) in his hip pocket to spend on drilling “at least” 1,600 Utica Shale wells in Ohio. McClendon’s new venture, called American Energy Partners, has already amassed 260,000 acres of leases in less than a year, on which to drill those 1,600+ Utica wells. McClendon right now has drilling rigs on the job in Ohio. The man does not let any grass grow under his feet (or on his drill pads). Here’s an update on Aubrey McClendon, a Utica Shale man in motion…
    Read More “Aubrey McClendon: Utica Shale ‘Man in Motion’”

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    MD Depts Working on Shale Drilling Slap Down Meddling State Pols

    In 2011, Maryland Gov. Martin O’Malley (Democrat) issued an executive order instructing the Maryland Department of the Environment and the Maryland Department of Natural Resources to work together on figuring out how shale drilling can be done in the state without undue environmental risks. It’s been three long years and the departments, working together, are nearing the end of the process. So what do Maryland’s Democrat politicians do? They jump right in and start offering bills that would hamstring and nullify the good work being done to figure out shale drilling and get it moving.

    The secretaries of both Maryland departments–Robert Summers and Joseph Gill–have penned a joint commentary running in the *Baltimore Sun* that essentially provides a verbal slap across those meddling politicians’ faces and tells them to leave well enough alone until their departments complete their work later this year. Good for them…
    Read More “MD Depts Working on Shale Drilling Slap Down Meddling State Pols”

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    WV Legislature Fumbles the Ball on Landfill Bill, Does Nothing

    Last week MDN asked the question, “Will WV Lawmakers Have Guts to Tackle Cuttings in Landfills Bill?” in the closing days of the WV legislative session. We now know that the answer is a resounding “no.” The proposed bill before lawmakers would have shored up, in law, the right of landfills to accept certain amounts of drilling cuttings from Marcellus and Utica Shale drilling (leftover rock and dirt). Landfills currently accept drill cuttings that exceed limits set elsewhere in law, based on a temporary directive by the Secretary of the WV DEP.

    The problem with not passing a bill is that the Secretary’s authority to issue the directive (essentially a stand-in regulation until a law is passed) will, sooner or later, be challenged in court by anti-drillers with big bucks. And then a judge will decide what is properly a policy issue that should be decided legislatively. That is, lawmakers shirked their responsibility and it spells uncertainty ahead for both WV landfills and drillers…
    Read More “WV Legislature Fumbles the Ball on Landfill Bill, Does Nothing”