Marcellus & Utica Shale Story Links: Mon, Dec 23, 2013
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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PA Supreme Court Rules Against State/Drillers in Act 13 Case
No doubt most MDN readers have already heard the earth-shattering news from yesterday that Pennsylvania’s Supreme Court has sided with the seven towns who sued the state to retain their right to regulate (zone) where drilling and related activities can and cannot happen in their communities. MDN has long covered this story and worried that a split decision after one of the justices resigned would lead to an unresolved situation. As fate would have it, one of the Republicans on the bench, Chief Justice Ron Castille, sold out and turned against the industry, so it ended up being a 4-2 decision with (predictably) all three Democrats voting against the industry plus RINO Castille.What was the decision? For different reasons (they couldn’t agree among themselves), the justices said localities should be able to write their own rules for where drilling can and can’t go. Which is certainly not a bad thing (the right to determine), except in some communities local town boards are packed with anti-drillers that make life a living hell for anyone or anything related to drilling. Ultimately innocent landowners and taxpayers are the ones who lose out because drillers will walk away from areas where unreasonable people pack town boards (no drilling, no leases, no jobs, no tax revenue). That’s exactly what will now start to happen in PA.
Anti-drilling groups like The Sierra Club, Delaware Riverkeeper and PennEnvironment were positively orgasmic in their reaction. They now get to kill drilling in at least some locations in PA. The Marcellus Shale Coalition said it’s a truly a sad day for PA. We agree. Below we bring you what we consider the “best of” coverage of the opinion. We have not had time to thoroughly research it ourselves, so we’ll rely on others to analyze it. We’ve also embedded the full 162-page decision filed by the Supreme Court so you can read it for yourself…
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Coterra Energy (Cabot O&G) | Energy Companies | Exporting | Industrywide Issues | Pennsylvania | Pipelines | Susquehanna County
Cabot Signs Deal to Export Gas via Cove Point, MD
The good news continues to roll out of Cabot Oil & Gas. In a corporate updated issued yesterday, the company said they’ve signed a deal with Pacific Summit Energy (a subsidiary of Japanese company Sumitomo) to export up to 350,000 million Btus of natural gas per day via Dominion’s planned Cove Point, MD LNG export facility. The Cove Point facility is currently supposed to be in operation in 2017. The deal runs for 20 years. Previously, MDN told you that Japan and India have already spoken for 100% of LNG exports from Cove Point (see Dominion’s Cove Point LNG Facility Achieves Important Milestones).
In what seems to be unrelated but actually is related, Cabot also said they’ve achieved another milestone–they now produce 1.5 billion cubic feet of natural gas per day out of their wells in Susquehanna County, PA. That’s just one year after hitting 1 Bcf/d! So in one year production has skyrocketed another 50%. Truly astonishing. How much of today’s current production is Cabot committing to send overseas?…
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Accidents | Chesapeake Energy | Energy Companies | Industrywide Issues | Regulation | Statewide WV | West Virginia
EPA Makes Chesapeake Pay $9.7M for Spilling Dirt in Creeks & Swamps
The federal Environmental Protection Agency (EPA) announced yesterday that they’ve slapped Chesapeake Energy with a $3.2 million fine, and a requirement that Chessy spend another $6.5 million to clean up 27 sites in West Virginia that the EPA says were “damaged by unauthorized discharges of fill material into streams and wetlands.” That is, Chessy got sloppy and dumped some dirt in a few creeks and swamps (the horror!). The EPA used the federal Clean Water Act to extract their multiple pounds of flesh out of Chesapeake. The EPA is all proud of themselves that this is “one of the largest” fines ever levied by the EPA using the CWA.
Here’s the announcement direct from the belly of the rogue beast itself:
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Energy Services | Harrison County | Industrywide Issues | MarkWest Energy | Ohio | Processing Plants | Statewide OH | Utica Shale
OH Utica Condensate Processing on the Way from MarkWest/EMG
MarkWest Energy Partners and the Energy & Minerals Group (EMG) announced yesterday they have formed a joint venture to build a network of condensate processing facilities in eastern Ohio. The new venture will be called Ohio Condensate Company, LLC and it already has its first customer–Gulfport Energy. According to the announcement the jv is working on signing up more customers. The first project for the jv will be a new condensate stabilization facility with “associated logistics and storage terminal capabilities” to be constructed in Harrison County, OH. That facility is due to be in service by 3Q14.
The details as revealed by MarkWest & EMG yesterday:
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Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Statewide PA | Susquehanna County | WPX Energy
John Hanger Uses Franklin Forks Water Issue to Boost Gov Campaign
Using the case of three families in Franklin Forks, PA who are suing WPX Energy for contaminating their water wells as a political issue, John Hanger, former Secretary of the PA Dept. of Environmental Protection (DEP), says the investigation done by the DEP wasn’t independent enough for his liking and the agency should re-do it. The three families claim WPX caused methane to migrate into their water wells. The reason the story has been in the news is because WPX had tried (and finally gave up) to remove fresh water tanks from the residents after the DEP determined WPX’s drilling was not at fault (see WPX Decides to Let Franklin Forks Families Keep Water Tanks).
Hanger’s protestations give his failing campaign to get the Democrat nomination for governor some badly needed media attention since his candidacy is rapidly sinking. He’s looking for any wedge issue he can find. The WPX story, visible as it is right now, is tailor made. Here’s John’s trumped up reasons for why the investigation should be redone…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Ohio | Statewide OH | Statewide WV | Triad Hunter | West Virginia
Magnum Hunter Production #s for Recent Wells Drilled in OH & WV
This morning Magnum Hunter issued an operational update for wells recently drilled in both the Marcellus and Utica Shale–in Ohio and West Virginia. In addition to production stats for the new wells (see below), MH reports they continue to snap up acreage in both the Marcellus and Utica. They now own 89,000 acres in the Marcellus and 105,000 acres in the Utica. Some of that acreage overlaps and they plan to drill both Marcellus and Utica wells on the same pad in some cases.
Here’s the update, including well results from wells drilled in Monroe and Washington counties in OH, and Tyler County in WV:
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Apco O&G, WPX Energy’s Alter Ego, Ejects Hill as CEO Too
MDN told you yesterday our theory of why WPX Energy CEO Ralph Hill was booted–due to investor meddling from the company’s second largest investor Taconic Capital Advisors (see CEO Shake-up Explained: Taconic Capital Jerking WPX’s Chain). Something we didn’t know was that Ralph Hill was also CEO of another company–Apco Oil & Gas International. Apco is the international arm of WPX (drilling in non-U.S. countries). The two companies share most of the same management and the same board of directors.
Yesterday Apco issued a press release saying Hill was booted from their company too…
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Is Federal Regulation of Local Gathering Pipelines on the Way?
The permitting and regulating of pipelines in this country–in particular natural gas pipelines–is complex. Depending on the type of pipeline, different federal and state (and even local) government agencies a) permit it, and then perhaps confusingly, b) a different agency ensures it meets safe operating standards. That is, the people who permit it usually don’t inspect it. The biggest gap in the regulation picture is that of local gathering pipelines running from the wellhead to a larger regional pipeline or compressor plant. Ohio recognized this problem and recently put the Public Utilities Commission of Ohio (PUCO) in charge of inspecting gathering lines (see PUCO Now Regulates Gathering Pipelines in Ohio and Cheat Sheet: Which Agencies Regulate OH Drilling/Pipelines).
Ohio has addressed the “lack of oversight of gathering lines” issue. However, Pennsylvania has not. Gathering lines in the Keystone state are still not regulated or inspected by any government agency, and that gives some people pause–and it gives some a reason to involve the federal government. A DC-based reporter writing for the Chicago-based In These Times publication has written a good article addressing the pipeline issue in general, and PA’s gathering lines in particular. He indicates the federal Pipeline and Hazardous Materials Safety Agency (PHMSA) is sniffing around the regulation of gathering lines, which is worrisome to those of us who believe it’s better regulated at the state level…
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Marcellus & Utica Shale Story Links: Fri, Dec 20, 2013
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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CEO Shake-up Explained: Taconic Capital Jerking WPX’s Chain
A bit more insight into the sudden departure of WPX Energy CEO Ralph Hill that MDN told you about on Tuesday (see WPX Energy CEO Ralph Hill is Out, Interim CEO James Bender is In). WPX’s former parent, Williams, is being jerked around by corporate raiders who have become its largest investor (see Bad News: Corporate Raiders Take Aim at Williams). In what seems like very strange timing (coordinated attack?) WPX is also being jerked around–in this case by its second largest investor, Taconic Capital Advisors. It was Taconic that apparently wanted Hill gone and one of their own installed on the board. So WPX announced yesterday they’ve reached an “agreement” with Taconic to expand the board by one member, adding Michael Schwartz, a principal and portfolio manager at Taconic, to the WPX board.It’s all rather ominous if you ask us. Never a good thing to have so-called investors who don’t give a fig about the company jerking management around this way and that with everybody running for cover and nothing constructive getting done. Here’s the statement issued yesterday by WPX about their “agreement” (at the end of a investment gun barrel) with Taconic:
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EQT to Spend $1.1B on Marcellus Drilling in 2014, $145M on Utica
EQT, one of the largest drillers in the Marcellus Shale, released their 2014 “guidance” (what we’ll do next year) update yesterday. And boy oh boy is it a duesy for the Marcellus. EQT says they’ll spend an eye-popping $1.1 billion and drill 186 Marcellus Shale wells in 2014. In the Utica Shale, EQT plans to spend $145 million and drill 21 wells. EQT will actually spend more money to drill in the Upper Devonian Shale layer than the Utica: $155 million to drill 30 wells in the UD.
EQT will spend the vast majority of it’s planned $1.9 billion in capital expenditures in the northeast in 2014. Here’s the update with full details:
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CONSOL to Use Electric Motors for Drilling at Pittsburgh Airport
This is really cool. CONSOL Energy announced yesterday at their “second and final” public workshop on drilling at the Pittsburgh Airport that they will use electric motors to drill on airport property. This is the first time they’ve tried it. By using electric, CONSOL says it will “significantly reduce emissions and noise during development.”
CONSOL was the winning bidder to drill on (and under) airport property–drilling that will bring the airport as much as a half billion dollars in fees and royalty payments (way more than they’ll ever get from gate fees from airlines). CONSOL is slated to begin drilling in July 2014 with plans to drill a total of 45 Marcellus Shale wells. Here’s the details from yesterday’s meeting:
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Anti-Drilling/Fossil Fuel | Broome County | Cortland County | Energy Services | Industrywide Issues | Millennium Pipeline | New York | Onondaga County | Pipelines
Millennium Scraps Cortland-to-Syracuse Pipeline, Binghamton Next?
In May MDN told you about plans by the Millennium Pipeline to expand “south to north,” to haul Marcellus Shale gas from Cortland to Syracuse, NY, launching a non-binding “open season” to gauge interest (see The Irony: Millennium Pipeline Expanding in NY for More Shale Gas). The Cortland-to-Syracuse pipeline was part of a larger plan, to go from Binghamton-to-Syracuse. The Millennium’s plan is/was to build a pipeline from Binghamton to Cortland first, and then from Cortland on to Syracuse. The open season in May was to see if there would be enough interest for the Cortland to Syracuse leg. Apparently, there was not.
An article in the Syracuse Post-Standard yesterday says the Millennium has scrapped their plan to build the Cortland-to-Syracuse pipeline. And, even more surprisingly, the Binghamton-to-Cortland pipeline (where the Millennium would connect to the Dominion Transmission pipeline) is now ominously “under review.” Which sure looks to us like the entire project may be scrapped. Question: Did the ever-present opposition from anti-drilling nutters sink the Millennium project?…
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Electrical Generation | Exporting | Hydraulic Fracturing | Industrywide Issues | Meetings | NG Vehicles | Pipelines | Processing Plants
Energy Industry Leaders Gather at Platts Forum in NYC
One week ago, MDN editor Jim Willis attended the Platts Global Energy Outlook Forum in New York City. The Forum, an annual event that attracts the titans of the worldwide energy industry, was held at the swanky Waldorf Astoria Hotel. Although Jim has been traveling to NYC for years and prides himself on his ability to navigate Manhattan on the subway, every now and again he botches it–like this time. So he ended up walking an extra 6-7 city blocks after getting off at the wrong stop (doh!). But that’s OK. It was a brisk day and the walk did him good.
Rather than get on the ungodly 3:10 am bus from Binghamton to NYC, Jim elected to ride the 6:10 am bus, which was late arriving at the Port Authority due to traffic at the Lincoln Tunnel. So he missed the first session and joined the second session shortly after it had begun. But wow, what a session it was! Below Jim shares his notes from the session “Switching, Ditching and Bridging Fuels,” his notes and impressions from the lunch keynote address by DOE Sec. Ernest Moniz, and his notes from the afternoon session titled, “Midstream Gathers Momentum”. Jim got to hear some of the biggest names in energy. It was all a bit heady for a “small time” natural gas blogger with an attitude…
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OH House Republicans Take Up “Kill Utica Drilling” Tax
Here we go. The Ohio House has taken up and is now considering raising the severance tax on Utica Shale drilling much higher than it has been–which threatens to stall drilling in the state. Some RINO Republicans have signed on to the bill, following the lead of flaky Gov. John Kasich (also a Republican, increasingly looking like a RINO himself).
Here’s the latest on the “kill Utica drilling” tax:
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No doubt most MDN readers have already heard the earth-shattering news from yesterday that Pennsylvania’s Supreme Court has sided with the seven towns who sued the state to retain their right to regulate (zone) where drilling and related activities can and cannot happen in their communities. MDN has long covered this story and worried that a split decision after one of the justices resigned would lead to an unresolved situation. As fate would have it, one of the Republicans on the bench, Chief Justice Ron Castille, sold out and turned against the industry, so it ended up being a 4-2 decision with (predictably) all three Democrats voting against the industry plus RINO Castille.
A bit more insight into the sudden departure of WPX Energy CEO Ralph Hill that MDN told you about on Tuesday (see