Marcellus Drilling News

Allegheny County | Energy Companies | Pennsylvania | Shell | Southwestern Energy

New Preservation Organization – Friend or Foe of PA Drilling?
March 6, 2014March 6, 2014

We’re not quite sure what to make of this, but we’ll take it at face value (for now). A new non-profit organization has sprung up in (where else?) Washington, D.C. Called the Gas and Preservation Partnership (GPP), the purpose of the new group is to form a voluntary alliance between preservationists and drillers. That is, people who are concerned that drillers may sink a well in an old Indian artifact area, would like those drillers to use seismic mapping of the site to see if anything of archaeological significance is present, and if it is, either drill somewhere else or take time to excavate the site before drilling. The fear is that once drillers start pushing dirt around to level a drilling pad, it might destroy something of historical significance. Which of course sounds to our hypercritical ear a lot like “delay in order to slow down or kill drilling.” But, according to GPP, that’s not their aim.

GPP says they do not (at this time) “plan to advocate” for regulations that will slow down drilling in PA and other shale states. Rather, GPP hopes drillers will cooperate voluntarily, apparently so they won’t have to advocate for regulations. GPP is holding a summit in Pittsburgh later this month. Shell and Southwest Energy are co-sponsoring the summit which aims to bring everyone together to the table to sing kumbaya, er, talk about how drillers can lend a hand with ensuring they don’t destroy any arrowheads buried in the dirt…
Read More “New Preservation Organization – Friend or Foe of PA Drilling?”
Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA | Taxation

Drillers Petition PA Court (Again) to Participate in Act 13 Case
March 6, 2014March 6, 2014

Try this on for size. Pennsylvania lawmakers passed sweeping new regulations, called Act 13, that control how and where drillers can drill, and stipulate how much money drillers will pay as part of a new “fee” (really a tax, but called an impact fee). A portion of the Act 13 law–statewide uniform zoning regulations–was challenged by seven townships that eventually won in the PA Supreme Court (see Happy Story Ends Badly Because of 7 PA Towns). Early on the drilling industry wanted to join the case to argue in favor of the Act 13 law but the wizards on the bench said nyet. The judges said the industry had no “standing” to be party to the suit, while an anti-drilling environmental organization was allowed to participate. “Standing for me but not for thee” was the attitude. It was and is the height of hypocrisy because the Act 13 law directly affects those very industry groups and their members. Anyone can see there’s “standing” for the industry to participate in a lawsuit that directly affects them.

The PA Supreme Court made a poor decision on Act 13, based on poor theories of law, and then took the easy way out and sent the non-zoning portions of the case back to a lower court to decide if the entire law should be scrapped. There’s a very possibility that will now happen (see Ongoing Fallout from PA Supreme Court’s Wrong Act 13 Decision). The three top drilling industry groups in PA yesterday petitioned the court, once again, to join the lawsuit as it’s now considered in the lower court, arguing they are DIRECTLY affected by the outcome and indeed it is evident to ALL that they do have standing. The groups are trying to salvage something out of the miscarriage of justice that has occurred at the Supreme Court. Question is: Will anti-drilling judges once again deny their petition to join the case?…
Read More “Drillers Petition PA Court (Again) to Participate in Act 13 Case”
BP | Energy Companies | Ohio | Trumbull County | Utica Shale

BP Shifts into First Gear with Shale – Splits Offshore/Onshore
March 6, 2014March 6, 2014

BP is one of the world’s largest integrated oil and gas companies, with operations that span from exploration and production in the upstream to midstream pipelines and even downstream (one of the world’s largest energy traders). A truly huge company. They also own 84,000 acres of leases in the Ohio Utica Shale–acreage they’ve done almost nothing with since leasing in early 2012. According to Volume 3 of the Marcellus and Utica Shale Databook (published in January), we count 5 drilling permits for BP in the OH Utica Shale for all of 2013. Barely a pulse.

Our course hindsight is 20/20, but one of the problems is BP leased all of that land in the northern part of the Utica play–in Trumbull County. As we’ve noted elsewhere today on MDN, Utica drilling has decidedly shifted southward (away from Trumbull and other northern counties). But perhaps geography hasn’t been the only thing holding BP back in their Utica drilling program. Could it be an inefficient management structure in the company? Perhaps! Two days ago BP announced they are splitting offshore and US onshore drilling into separate divisions within the company. Judging from the announcement, it appears the decision to split operations is an effort to take better advantage of shale drilling. While they don’t mention the Utica specifically, we believe part of the reason BP has not drilled in the Utica is due to their own internal structure, which they’re moving to remedy…
Read More “BP Shifts into First Gear with Shale – Splits Offshore/Onshore”
Economic Impact | Industrywide Issues | M&A

KKR Launches New $2B Fund – Now in Hunt for NA Shale Investments
March 6, 2014March 6, 2014

Kohlberg Kravis Roberts (KKR) is a bigtime global investment firm. KKR was founded by Henry Kravis and George Roberts in 1976 and is still led by them. They have gobs of money that they invest, and according to a press release they issued yesterday, they have a nice pile of money they want to invest in shale plays–$2 billion of cash. KKR has just launched their Energy Income and Growth Fund I, or EIGF for short. The I seems to indicate there may at some point be a II and so on. The aim of the new fund is to invest the money in North American unconventional oil and gas resources. (Calling Aubrey McClendon…We’ve spotted another pile of cash that’s yours for the takein’!)

Here’s the announcement from KKR about the fund and the types of shale investments they’re looking to make…
Read More “KKR Launches New $2B Fund – Now in Hunt for NA Shale Investments”
Industrywide Issues | Pipelines | Regulation

Industry Supports Bill Forcing FERC to Approve Pipelines <1 Year
March 6, 2014March 6, 2014

Apparently a year is not long enough for employees at the Federal Energy Regulatory Commission (FERC) to approve new pipeline applications. FERC is the agency charged with approving new interstate natural gas (and other types of) pipelines. It’s a long, arduous, and complex process to approve and build a new pipeline. You might think if an agency had 100% completed paperwork before them it wouldn’t take an entire year to evaluate and approve it–but indeed, it often takes longer. Much longer. Years, in fact.

Enter Congressman Mike Pompeo, Republican from Kansas. Last year he introduced H.R. 1900 which would bring some “discipline” to the process by making FERC approve or deny newly proposed pipeline projects within a year of receiving all necessary paperwork. Jeff Wright, director of FERC’s Office of Energy Projects, promptly threatened lawmakers, telling them if FERC is backed into a corner, the agency will simply start denying projects left and right (see FERC Warning to Lawmakers: Back Us in a Corner, You’ll be Sorry). We hadn’t heard anything further on H.R. 1900 since Wright’s threat, until we spotted this…
Read More “Industry Supports Bill Forcing FERC to Approve Pipelines <1 Year”
Berks County | Industrywide Issues | Pennsylvania | Processing Plants

Another New Gas-to-Liquids Plant Coming in PA – Near Philly
March 6, 2014April 6, 2014

Not frequently, but every now and again MDN has highlighted stories about the intriguing technology that converts natural gas into other hydrocarbons–like diesel fuel and petrochemicals. The technology is called gas-to-liquids (or GTL). We’ve told you about several such facilities on the board or being built in PA and in OH (see Gas-to-Liquids Trend Picks Up Steam in Northeast).

You can add one more such facility to the list, coming in Berks County, PA (near Philadelphia). Canadian EmberClear Corp. NGI’s Shale Daily is reporting that EmberClear is seeking approval on a new $1 billion GTL plant that will employ 100 people in Berks County, and (amazingly) it seems the township where they want to build it, wants it…
Read More “Another New Gas-to-Liquids Plant Coming in PA – Near Philly”
Economic Impact | Guernsey County | Industrywide Issues | Jobs | Ohio | Supply Chain | Utica Shale

Tiny SE OH Town Sees Hotel Construction Boom Thx to Utica Shale
March 6, 2014March 6, 2014

As we’ve previously written, one way you know shale drilling is on the horizon is when there the county clerk or county recorder’s office gets busy with title abstractors researching. We told you way back in 2012 that Belmont County, OH was about to see a drilling boom (see Belmont County, OH Drilling to Take Off Soon). How do you know when an area’s drilling is about to expand even more? When companies are willing to build not one but four new hotels–in a town with only 10,555 residents!

Here’s the story of drilling about to reach a fevered pitch in Belmont’s neighboring county, Guernsey and the little town of Cambridge which is having a boom in hotel construction…
Read More “Tiny SE OH Town Sees Hotel Construction Boom Thx to Utica Shale”
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Mar 6, 2014
March 6, 2014March 6, 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: Thu, Mar 6, 2014”
Coterra Energy (Cabot O&G) | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Research | Statewide PA | Susquehanna County

NatGas in PA Water Wells w/Marcellus Fingerprint NOT Shale Gas
March 5, 2014March 5, 2014

A newly published peer reviewed study in the February Bulletin of the American Association of Petroleum Geologists (AAPG) offers new research that we believe comes close to, if not fully, exonerating Cabot Oil & Gas over the now infamous case of methane migration into water wells in a small area of Dimock, PA. The new study has no connection to Cabot. It is written by three experts and uses (gasp) actual science–you know, in the field data? The data comes from “more than 2,300 gas and water samples collected from 234 gas wells and 67 private groundwater-supply wells” in northeastern PA and is the largest such data set ever analyzed. What did the authors find? Shallow (near the surface) methane with the same identical chemical “fingerprint” as deeper Marcellus Shale gas is naturally occurring in large quantities in northeastern PA. That is, the shallow methane under the microscope looks exactly like the methane found more than a mile below the ground, but it isn’t gas from the Marcellus because the methane near the surface that looks just like Marcellus gas, with the same chemical “fingerprint,” was lurking in water wells long before there was any shale drilling in the area.

This is truly huge news, but don’t expect mainstream media outlets to cover the story because a) they like Josh Fox and prefer to prop up his fictional movie called Gasland, b) the issue requires readers to actually think and use the left brain to grapple with issues of science, c) this new, real research utterly refutes the pathetic “research” published by Duke University in two different papers that took the lazy way out and tried to hang Dimock’s stray gas methane on Cabot, and d) it doesn’t fit the “drilling is evil” narrative the mainstream media prefers to push…
Read More “NatGas in PA Water Wells w/Marcellus Fingerprint NOT Shale Gas”
Access Midstream Partners | Chesapeake Energy | Energy Companies | Energy Services | Industrywide Issues | Ohio | Pennsylvania | Pipelines | Statewide OH | Statewide PA | Statewide WV | West Virginia

Chesapeake Fire Sale Continues: Marcellus/Utica Compressor Plants
March 5, 2014March 5, 2014

Chesapeake Energy continues to sell off bits and pieces of the company, making corporate raider (and the company’s second largest investor) Carl Icahn happy. The latest ballast to go over the side are 103 “compression units” in the Marcellus/Utica region, purchased by Access Midstream (which used to be Chesapeake Midstream before it was tossed over the side too), and 334 “compression units” scattered throughout the south, southwest and west, sold to Exterran Partners. Total proceeds for Carl Icahn, er Chesapeake? $520 million.

Here’s the announcement from Chesapeake, followed by the announcement from Access Midstream about their “bolt-on” acquisition…
Read More “Chesapeake Fire Sale Continues: Marcellus/Utica Compressor Plants”
Crude Oil | Economic Impact | Energy Companies | Halcon Resources | Industrywide Issues | Ohio | Trumbull County | Utica Shale

Halcon Pull Back from Utica: What about Their $70M Oil Terminal?
March 5, 2014March 5, 2014

Yesterday MDN brought you the bombshell news that Halcon Resources has shaken the dirt of their shoes in the Utica and is heading to greener (so they say) pastures in other shale plays (see Halcon Resources Stops Drilling, Gives Up on the Utica Shale). Not so long ago–last July–Halcon announced they were working on a $70 million oil storage and rail transloading terminal in Lordstown (see Halcon Resources Plans $70M Oil Terminal in Lordstown, OH). The first of three planned phases for that project were, at the time, predicted to be completed in 2014. Is that project now in jeopardy too, with Halcon taking their “wait and see” attitude in the Utica?

Lordstown area officials have no official word from Halcon on the oil terminal’s fate, but they’re nervous…
Read More “Halcon Pull Back from Utica: What about Their $70M Oil Terminal?”
Belmont County | Lease & Royalty Payments | Ohio | Utica Shale

St Clairsville RFP to Lease 195 Utica Acres Comes & Goes, No Bids
March 5, 2014March 5, 2014

St. Clairsville (Belmont County), OH put out a request for bids on 195 acres of city-owned land. They want to lease the land for shale drilling. The RFP sought bids from drillers and contained these minimum terms: $7,300 per acre signing bonus, and 20% royalties. Yikes! Apparently St. Clairsville believes they hold all the cards. The deadline for bids was yesterday. How many bids did they get? Zero. Nada. None. But city leaders aren’t discouraged. Apparently putting it out for bid was a requirement under Ohio state law–a dance that they had to dance, motions they had to go through–and now that the RFP has come and gone, the real negotiations will begin. And make no mistake, drillers are interested in leasing the property. It sits in one of the sweetest sweet spots in the Utica Shale.

Here’s the St. Clairsville RFP story, and a good roundup showing the terms other municipalities have recently gotten for leasing their land…
Read More “St Clairsville RFP to Lease 195 Utica Acres Comes & Goes, No Bids”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Landfills | Ohio | Statewide OH | Supply Chain | Utica Shale

OH Anti-Drilling Nutters Prevent Safe Disposal of Drill Cuttings
March 5, 2014March 5, 2014

Score a win for the anti-drillers in Ohio. They have successfully blocked a promising new technology by lying about what it does and can do for the drilling industry. Last September MDN told you the story of an innovative new Ohio company–Ohio Soil Recycling (OSR)–that has figured out how to turn shale drill cuttings (leftover rock and dirt) into clean fill dirt–in 24 hours flat (see OH Company Turns Drill Cuttings into Clean Fill Dirt in 24 Hours). Because some drill cuttings (some, not all) contain very low levels of naturally occurring radioactivity, a fanatical group of nutters called Radioactive Waste Alert (RWA) went on a PR rampage using a big, lying billboard ad to try and suppress this promising new technology (see Radioactive Bilge Emanates from ‘Radioactive Waste Alert’ in OH).

Once again headlines and soundbites rule the day as RWA now claims they have successfully stopped OSR. It’s a sad day–the RWA has made everyone in Ohio less safe than they could have been. But such is the twisted worldview of anti-drilling nutters like those in the RWA. Here’s the “we’re crowing about screwing OSR” announcement from RWA:
Read More “OH Anti-Drilling Nutters Prevent Safe Disposal of Drill Cuttings”
Anti-Drilling/Fossil Fuel | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Regulation | Washington County

Mt. Pleasant, PA Continues to Ride Range Over Water Ponds
March 5, 2014March 5, 2014

As we told you last week, when PA towns make up their own zoning laws for oil and gas drilling, chaos and confusion reigns, as is the case in Mt. Pleasant (Washington County), PA (see Mt Pleasant Twp Shenanigans re Range Request for Water Ponds). Mt. Pleasant, one of seven townships that successfully sued the state to overturn Act 13 effectively screwing every municipality in the state out of millions of dollars of impact fee money, continues their snit fit over Range using a few water ponds to drill new shale wells in non-Mt. Pleasant locations.

The board voted to uphold their zoning violations of four such ponds so Range has filed yet another lawsuit hoping they can find an impartial judge to set the matter straight. Here’s the latest…
Read More “Mt. Pleasant, PA Continues to Ride Range Over Water Ponds”
American Energy Partners | Chesapeake Energy | Energy Companies

McClendon Accuses Chesapeake of Holding LA Minerals “Hostage”
March 5, 2014March 5, 2014

This is interesting, although it doesn’t have a direct bearing on the Marcellus or Utica. It does, however, involve one of our favorite Utica Shale characters–Aubrey McClendon. Aubrey was tossed out of Chesapeake Energy, the company he founded, last year by corporate raider Carl Icahn (see McClendon Exits Chesapeake, Well-Bonused “Friends” Replace Him). Since the divorce, all has been pretty quiet on the home front between McClendon and his former company. However, McClendon and Chessy have now had their first public fight since his exit.

Aubrey wants Chessy to drill more wells in the Haynesville Shale, because he personally gets a share of the proceeds. Chessy is squeezing their drilling budget so hard they’re making the proverbial buffalo nickel poop. They don’t want to drill another dozen wells in the Haynesville. So Aubrey has gone to the regulators at Louisiana’s Office of Conservation, asking them to force Chessy to follow his drilling plan instead of their own, accusing Chessy of holding Louisiana’s minerals “hostage.” Who doesn’t love a good hostage story?…
Read More “McClendon Accuses Chesapeake of Holding LA Minerals “Hostage””
CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Litigation | Maryland | Statewide MD

Maryland Court Rules in Favor of Cove Point LNG Export Terminal
March 5, 2014March 5, 2014

The litigating Sierra Club has lost yet another lawsuit to block Dominion from revamping an LNG import terminal in Cove Point, Maryland to become an export terminal instead–exporting Marcellus Shale gas to India and Japan. Last Friday Maryland’s second highest court, the Court of Special Appeals, gave Dominion the green light to continue with their project to covert the Cove Point facility into an export terminal. Will the Sierra Club appeal (yet again)? With the deep pockets of the eco-left in this country, it’s a pretty safe bet they will appeal…

Here’s the story of the court returning a pro-Dominion verdict:
Read More “Maryland Court Rules in Favor of Cove Point LNG Export Terminal”