Marcellus & Utica Shale Story Links: Thu, Jan 9, 2014
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | Jobs | NGLs | Pipelines | Processing Plants | Research
Must-Read IHS Report: Midstream/Downstream Spending Hits $90B/Yr
Information Handling Services, or IHS, is the publisher of choice for the American Petroleum Institute (API). A new API/IHS study was published in December, but apparently just released to the public yesterday by the API. The study is titled “Oil & Natural Gas Transportation & Storage Infrastructure: Status, Trends, & Economic Benefits” (full copy embedded below).We previously told you the API/IHS estimates each year drillers in the U.S. spend on the order of $150 billion to drill new oil and gas wells (see US Spending $150B+ to Drill New Oil & Gas Wells Each Year). MDN editor Jim Willis heard at the recent Platts Global Energy Outlook Forum that midstream-specific spending is only $15 billion per year (see Energy Industry Leaders Gather at Platts Forum in NYC). This new IHS report provides further clarification on spending in the midstream and downstream. If you lump new yearly spending together for all midstream (pipelines & processing plants) and downstream (refineries and distribution), IHS says the number was actually $53 billion in 2010, and had rocketed to nearly $90 billion in 2013. IHS researchers believe spending will remain around $90 billion in 2014 and something close that, per year, until 2020. Truly astonishing numbers. And that’s not the only revelation contained in this “must read” report. Like, there are 1 million new jobs on the way because of all this spending…
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OH’s Biggest Producing Utica Counties: Belmont, Monroe, Harrison
More analysis of the recent third quarter 2013 Utica Shale production report released on Dec. 31 by the Ohio Dept. of Natural Resources, including which counties had the best production in 3Q13:
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Researchers Backpedal on Bloomberg Story about Fracking & Babies
That was fast. It seems that Bloomberg’s article that implies fracking kills babies (see Another Flawed Fracking/Health Study Emerges…from Economics Conf) was a tad premature. According to Andy Revkin, environmental writer for the New York Times, the authors of the rumored research that reportedly shows a link between babies born close to fracking sites and low birth weight–didn’t want their research announced yet. They say they haven’t finished analyzing the data, it’s not peer-reviewed, and it’s not ready. The authors say Bloomberg jumped the gun and should not have printed their article.
To which we say, why did the authors mention their research and their preliminary conclusions/findings a public conference, if they didn’t want it known? Doh! Apparently the blow-back has been so swift and so strong that the researchers are now backpedaling as fast as they can…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Industrywide Issues | Ohio | Pipelines | Statewide OH | Statewide WV | West Virginia
Eureka Hunter Boasts 360% Yearly Increase in Marcellus/Utica Flow
Eureka Hunter, the wholly-owned midstream (pipeline) subsidiary of driller Magnum Hunter, published their month by month flow numbers yesterday for how much gas they pumped through their pipelines in West Virginia and Ohio during 2013. It was an impressive year for Eureka Hunter. The average daily flow or “throughput” in 2012 was 23,291 million Btus (or MMBtus), which equates to 23.3 million cubic feet per day (or MMcf/d). If the “average” well is producing, say, 3 MMcf/d, that’s the equivalent of having 8 wells connected to the pipeline. The average daily flow in 2013 was 83,828 MMBtus, or 83.4 MMcf/d, or 28 wells hooked up and flowing. That’s a 360% year over year increase–nearly quadruple the volume!
What the average doesn’t tell you, however, is that by the end of the year, Eureka Hunter’s pipeline flowed nearly 160,000 MMBtus, or 160 MMcf/d, which is production from an average 53 wells. They predict in 2014 the daily flow rate will hit 206,500 MMBtus. Somewhere between 40-50% of the gas they flow is from Triad Hunter, another Magnum Hunter subsidiary (sister company to Eureka Hunter). Below is the press release with Eureka Hunter’s monthly flow numbers. With our explanation above, you now know how to view it!…
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Anti-Drilling/Fossil Fuel | Crime | Industrywide Issues | Litigation | Mahoning County | Ohio | Wastewater
Sierra Club Gets What They Want in OH, and It’s a Big Fat Nothing
The anti-drilling Sierra Club–an organization that once lauded natural gas as an energy bridge to the future but now hates it (because it’s a good fundraiser for them to demonize it)–went fishing for information in Ohio, and came up with nothing. The Sierra Club previously sued the Ohio Dept. of Natural Resources (ODNR) seeking all documentation (emails, etc.) for the case of D&L Energy/Hardrock Excavating–the company that repeatedly dumped untreated frack wastewater in the dead of night down a drain–untreated wastewater that ended up in the Mahoning River (see Youngstown Business Dumped >200K Gal of Untreated Wastewater).
Not only did the ODNR immediately take strong action against the perpetrators of this environmental crime by shutting down the companies involved, the drilling industry itself loudly and strongly condemned it. Not good enough for the Sierra Clubers. They thought there may be some teeny tiny sliver of something they could demagogue and use in yet another fundraising letter–if only they could sort through the pile of communications surrounding the case. So they sued. The ODNR finally relented and gave them what they wanted–and according to the Sierra Clubers, there were “few new details” in the document dump. In other words, it was a colossal waste of time and taxpayer money…
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MWCD Open House on Leasing Piedmont Lake Property for Drilling
Oh, we love it! The Muskigum Watershed Conservancy District (MWCD) has definitely seen the light. Although they were scared off from allowing shale drilling on Watershed-owned property early on, the board came around and eventually saw the light. Now they can’t get enough of shale drilling! They’re leasing MWCD-owned land for shale drilling, and they’re selling water to drillers–in many instances to frack wells being drilled on MWCD land. Beautiful!
The MWCD announced yesterday that so many drillers are knocking on their door to lease MWCD land in and around Piedmont Lake (in Belmont, Guernsey and Harrison counties) for Utica Shale drilling, they will have a public open house next week to discuss it. The MWCD owns some 6,600 acres around Piedmont Lake–and leases in that area have seen some of the highest signing bonuses and royalties in the entire northeast. We’re talking serious money (many many millions) for the MWCD if they lease that land for Utica Shale drilling…
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Former PA Parks Head John Norbeck Joins the Anti-Drilling Brigade
Sadly, the former head of Pennsylvania’s state park system, John Norbeck, has thrown in his lot with the strongly anti-drilling PennFuture organization and will become its vice president and chief operating officer. PennFuture has worked tirelessly to obstruct and stop drilling wherever and whenever it can. Apparently Norbeck was a closet anti-driller all along. Who knew?…
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Drill Capital Launches Drill Research; Nifty Antero/Utica Report
MDN does not usually run self-serving press releases that are the sum total of “look at us.” But sometimes we do–when the release piques our interest. Such a release was issued yesterday by investment firm Drill Capital–a firm focused on investing in the North American energy sector. According to yesterday’s press release, Drill Capital has formed a separate, dedicated research arm called Drill Research that will evaluate energy sector investment opportunities. Of course this is a marketing technique to attract customers (i.e. investors) to join Drill Capital. Certainly nothing wrong with that! What piqued our interest is their publication of a sample model portfolio highlighting Drill Research’s top pick. Which is? One of the top drillers in the Marcellus and Utica Shale: Antero Resources.
By visiting the Drill Research webpage highlighted in the release, you can read their research and view the model portfolio. If you do, you’ll find interesting details about Antero, the Utica Shale, the Marcellus Shale and several other major U.S. shale plays. It’s definitely worthwhile info, which is why we share it with you…
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China Comes to the Marcellus – to Learn and to Profit
In the dead of the holiday season, on Friday, Dec. 27, Energy Corporation of America (ECA) issued a press release that largely went unnoticed. In the release, ECA announced it has formed a 50/50 joint venture partnership with the world’s second largest (and China’s largest) coal company, China Shenhua Energy Company (100% Chinese government owned), to drill 25 Marcellus wells in Greene County, PA. Shenhua will invest $90 million in the venture and in the process learn how drill in shale–knowledge currently lacking in China. It’s not much of a stretch to predict this is not the final involvement of Chinese money that will flow to the Marcellus and Utica Shale.
Here is the brief statement issued by ECA, followed by a story about the jv from China Daily:
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Marcellus & Utica Shale Story Links: Wed, Jan 8, 2014
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Hydraulic Fracturing | Industrywide Issues | Research | Soil | Statewide WV | Wastewater | West Virginia
WVU Prof Stokes Radioactive Fears, Says DEP Study Missing Research
Here’s a story that we confess, we’re having a tough time wrapping our brains around. Allegations are swirling in West Virginia that one of three officially conducted studies for the state’s Dept. of Environmental Protection (DEP) released last year overlooked important data collection. The study in question was completed in December 2011 and released in February 2012. Titled “Pits and Impoundments Final Report,” the report looks at frack wastewater impoundments and water pits used in horizontal Marcellus Shale drilling (see WVU Study Finds Potential Problems with Frack Wastewater Pits for a copy of the full study). From what we can determine, solid waste, like drilling mud and “cuttings” (leftover rock and soil from drilling) were not part of that study–at all.But now, the Charleston Gazette identifies and quotes a WVU professor who supposedly worked on that study (although his name doesn’t appear in the study) who says researchers tried to test drill cuttings for radioactivity and were either denied access or put off/delayed until they finally ran out of time and had to file the report without doing the analysis. It’s now a big deal because anti-drillers are raising the specter that everyone is about to glow in the dark from radioactive drill cuttings going to landfills across the state. The WVU prof seems to be intentionally stoking those fears…
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Gov Corbett Requests Drillers Continue to Honor Act 13 Setbacks
One of the unintended consequences of the recent PA Supreme Court ruling that struck down zoning provisions in PA’s Act 13 law is to weaken environmental protections–specially the distance away from rivers, streams, wells and other bodies of water that drillers sink a well. Act 13 provided for a minimum 300 foot “setback” from water sources, but that’s now out the window after the Court’s decision (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). PA Gov. Tom Corbett yesterday issued a call/challenge/request/plea to the drilling industry to maintain the setback standard in their drilling practices. The industry, via various representative organizations like the Marcellus Shale Coalition, has already responded that indeed they will continue to honor the setback provisions–even though the high court tossed them out. Which is just more evidence of responsible people working together responsibly to safely drill for natural gas and oil in PA. Even when the courts screw it up.
Here’s Gov. Corbett’s request, and the response by the drilling industry:
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Energy Companies | Lease & Royalty Payments | Ohio | Protege Energy | Utica Shale | Washington County (OH)
Marietta, OH Offered $4,750/Acre + 17.5% Royalties for 35 Acres
An offer–or more accurately a pre-offer–was made at the Marietta (OH) City Council meeting yesterday that would put an initial $166,250 in the city’s coffers from leasing 35 city-owned acres along the edge of the city for shale drilling. A driller is tentatively offering $4,750 per acre as a signing bonus, plus 17.5% royalties, for land in the area. Some city council members (Democrats) expressed concerns about the potential offer, and several residents from anti-drilling groups in attendance also added their
drivel2 cents.Here’s more of the details about the offer–the driller who’s making it, when the drilling would begin, and what was ultimately decided as the next step at yesterday’s meeting…
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Energy Companies | Energy Services | Hilcorp Energy | Industrywide Issues | Mahoning County | NiSource | Ohio | Pennant Midstream | Processing Plants | Utica Shale
Pennant Midstream Says Hickory Bend (OH) Cryo Plant Now Ready
Good news! Pennant Midstream announced yesterday that its Hickory Bend cryogenic processing plant in Mahoning County, OH is now live and online and ready to receive “wet gas” from the Utica Shale. You may recall Gov. John “foreigner hunter” Kasich dedicated the plant back in October (see OH Gov. Kasich Dedicates Hickory Bend Plant, No Foreigners Found). However, the $375 million plant was not quite ready at that point. It is now, and the gas will start flowing soon.
The even better news is that Pennant, a joint venture between Hilcorp Energy and NiSource, is preparing to build two more plants at the same location. Each plant can handle 200 million cubic feet of raw gas per day, separating it into methane and natural gas liquids (NGLs). The NGLs are then pipelined elsewhere for further processing. Here’s yesterday’s announcement:
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Gulfport Energy Issues Utica Production Guidance for 2013, 1Q14
Gulfport Energy, one of the most important (and increasingly prolific) drillers in the Utica Shale released a short update yesterday to crow about their production numbers for 2013, set production expectations for the first quarter of 2014, and to remind investors to invest early and invest often.
Here’s yesterday’s Gulfport update…
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Information Handling Services, or IHS, is the publisher of choice for the American Petroleum Institute (API). A new API/IHS study was published in December, but apparently just released to the public yesterday by the API. The study is titled “Oil & Natural Gas Transportation & Storage Infrastructure: Status, Trends, & Economic Benefits” (full copy embedded below).
Here’s a story that we confess, we’re having a tough time wrapping our brains around. Allegations are swirling in West Virginia that one of three officially conducted studies for the state’s Dept. of Environmental Protection (DEP) released last year overlooked important data collection. The study in question was completed in December 2011 and released in February 2012. Titled “Pits and Impoundments Final Report,” the report looks at frack wastewater impoundments and water pits used in horizontal Marcellus Shale drilling (see