• Marcellus & Utica Shale Story Links: Thu, Jul 18, 2013

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:

    Ohio

    Shale seminar stresses networking in industry
    Coshocton Times
    Making her way around the room at a recent Utica Shale seminar, Charlotte Johnson had a smile, a handshake and a business card for everyone. Her goal: Meet as many people as possible and spread the word about Zane Trace Clean Care Uniforms. It’s not that every encounter will lead to new business, but it can’t hurt to get the company name out there, said Johnson, Zane Trace vice president. Already, Zane Trace’s business has increased 10 to 20 percent from people buying or renting fire-retardant uniforms for oil and gas work, and Johnson foresees that number continuing to climb in the near future, she said. “We got educated and started getting sales reps out there, and it just took off,” she said. “It’s just coming to these meetings (and) meeting people. That’s the only way you can do it.”

    Pennsylvania

    Another Shale Play in Pennsylvania? Count On It.
    Energy in Depth
    The Upper Devonian Shale formation made headlines this week in Southwest Pennsylvania after CONSOL Energy developed its first Upper Devonian natural gas well. Other operators in the area, including Range Resources, have also begun to see the potential of this formation.

    Pre-drill benefits: Consol Energy’s airport prospects pay off now
    Pittsburgh Post-Gazette
    Marcellus Shale drilling won’t start on Pittsburgh International Airport property for another year, but Allegheny County already is seeing dividends from a multimillion-dollar deal with Consol Energy. Effective July 1, landing fees paid by airlines that use the facility were reduced by 55 cents per enplaning passenger, from $14.66 to $14.11. That may not sound like a lot, but with 300 passengers on a plane and hundreds of flights per month, the savings add up.

    Our View: Could Erie gain from fracking?
    Erie Times-News
    At the Erie plant of FMC, a Fortune 500 company, workers are producing metering equipment used by the oil and natural gas industries. Jim Ertle, vice president of measurement products for FMC’s Measurement Solutions operation in Erie, said business is up locally because of increased demand from drillers in the Marcellus and Utica shale formations. We remain hopeful that the debate over fracking will grow less contentious as industry and environmental groups work on a voluntary certification program for natural gas drilling at the Center for Sustainable Shale Development in Pittsburgh. Fracking opponents in this region should consider that new jobs are opening up in Erie due to fracking. No one should turn up their noses at that trend.

    Smoke from gas plant in Washington County alarming to neighbors
    Pittsburgh Post-Gazette
    Faulty new equipment at MarkWest Energy Partners’ Houston Gas Plant in Washington County sent plumes of black smoke high into the air Sunday and Monday, raising enough public concern that the state Department of Environmental Protection dispatched an inspector. The problem had been corrected by Tuesday, and the DEP said no violations were apparent, noting the company had previous permission to do smokestack flaring while installing equipment to separate ethane from other liquid gases at the plant along Route 519 in Chartiers. But John Poister, DEP regional spokesman, said the department is analyzing air-monitoring results while working with MarkWest to “prevent this type of problem in the future.”

    National

    Six Tech Advancements Changing the Fossil Fuels Game
    StockMarketsReview
    Oil and gas is getting bigger, deeper, faster and more efficient, with new technology chipping away at “peak oil” concerns. While hydraulic fracturing has been the most visible revolutionary advancement, other high-tech developments are keeping the ball rolling—from the next generation of ultra-deepwater drillships, subsea oil and gas infrastructure and multi-well-pad drilling to M2M networking, floating LNG facilities, new dimensions in seismic imagery and supercomputing for analog exploration.

    A Shale Game: Energy Industry Triggers Demand for Prime Real Estate
    CoStar Group
    Growth in the domestic energy industry is driving heated demand for prime real estate, predominantly in a handful of cities where the oil and gas industry is booming. That growth is expected to create more than 3.5 million American jobs by 2035, including 700,000 in the next two years alone. While energy production is the direct growth driver, much of the commercial real estate demand is coming from affiliated industries and thus driving growth in office, retail, industrial and multifamily demand. New research from Jones Lang LaSalle (JLL) indicates that the majority of commercial real estate opportunities resulting from this job growth will be concentrated in Dallas, Denver, Houston, Philadelphia and Pittsburgh.

    The Green Party 1% and It’s Fantasy Energy Policy
    Natural Gas Now
    The Green Party 1% types live in a fantasy world of utopian energy policy, while China, which has been polluting the earth, takes a turn toward the rational simply because it must to save itself. Meanwhile, we put up with Josh Fox, who is little more than a science fiction character.

    This Is One Incredible CEO
    The Motley Fool
    The Motley Fool’s readers have spoken, and I have heeded their cries. After months of pointing out CEO gaffes and faux pas, I’ve decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first, and are generally deserving of praise from investors. This week, we’ll turn our attention to the energy sector, and focus on a CEO who’s been right on target with investors, and with regard to community giving: John Watson, CEO of Chevron.

    With coal not king, CSX finds success in new energy environment
    Jacksonville Business Journal
    CSX Corp., after years of falling coal volumes, is poised to gain from the new U.S. energy environment, filling its rail cars with shipments of sands used in hydraulic fracturing and petroleum products gained from the process. The Jacksonville-based railroad posted a 3-cent-per-share jump in second-quarter earnings Tuesday, beating analysts’ expectations. “We had a record quarter despite the challenges we continue to face in our coal business,” company CFO Fredrik Eliasson said Wednesday, adding that the company was helped by growth in the intermodal and merchandise businesses.

    Nuclear energy is too expensive to compete, independent economist argues
    Cleveland Plain Dealer
    America’s fleet of aging nuclear power plants is rapidly becoming uneconomical to operate, argues a leading consumer advocate in a new report predicting the end of the nuclear era. Mark Cooper, an independent economist and senior fellow for economic analysis at the Vermont Law School Institute for Energy and the Environment, bases his argument on another decade of continuing low natural gas prices to give new gas-fired power plants enough of an edge to squeeze out older nuclear plants already beset with rising maintenance costs.

    5 Economic Game Changers That Could Create 5 Million American Jobs By 2020
    Business Insider
    1. Shale-gas and -oil production. Powered by advances in horizontal drilling and hydraulic fracturing, the production of domestic shale gas and oil has grown more than 50 percent annually since 2007. The shale boom could add as much as $690 billion a year to GDP and create up to 1.7 million jobs across the economy by 2020. The impact will extend to energy-intensive manufacturing industries and beyond. The United States now has the potential to reduce net energy imports to zero—but only if it can successfully address the associated environmental risks.

    Is Fracking for Enhanced Geothermal Systems the Same as Fracking for Natural Gas?
    Alternative Energy Stocks
    The U.S. geothermal industry recently scored a big win when its first enhanced geothermal system (EGS) project went online in April. ORMAT was able to stimulate a previously unproductive well at its Desert Peak project with EGS technology — injecting fluid into a well to reopen cracks and create a resource reservoir — and found an additional 1.2 megawatts (MW) of capacity. Renewable energy experts applauded the project, dubbing it a “game-changer” and a “shining moment” for the industry. Though the project represents a breakthrough for EGS technology and the geothermal industry in general, EGS has come under fire, with opponents accusing it as being just as dangerous as oil or natural gas hydraulic stimulation, commonly known as fracking.

    O&G industry, beware: The Labor Department is eyeing you
    Platts Gas Business Briefing (paid or free trial access required)
    The oil and gas industry suffers from worker misclassification: who are employees, who are independent contractors, and which workers are eligible for overtime pay, one labor law attorney believes. And, with the Department of Labor becoming increasingly vigilant concerning misclassification, industry players need to be aware because big money in the form of back wages paid is possible, according to Bryan Cokeley, a member of the law firm Steptoe & Johnson PLLC. “The Fair Labor Standards Act [of 1938 and revised since] doesn’t apply to independent contractors, but the act is pretty liberal concerning what is an employee,” said Cokeley, addressing an audience at S&J’s Energy Leadership Summit.

    International

    Once-Coveted Asian Oil Riches Take Backseat to U.S. Shale
    NASDAQ
    Once captivated by Asia’s untapped oil-and-gas riches, some midsize U.S. energy producers are now selling their Asian assets as the North American shale revolution offers bright prospects closer to home. Companies such as Anadarko Petroleum Corp., Hess Corp. and Newfield Exploration Co. recently started looking for buyers for either all or some of their Asian portfolios, together worth billions of dollars. Assets for sale include oil fields in China’s Bohai Bay and natural-gas hubs in Thailand.

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    So Who’s Building All Those OH Pipelines Anyway?

    more information pleaseAn MDN subscriber recently emailed us to ask for more details about that map showing, by region, the number of new natural gas gathering and transmission pipelines that will be built (see The Surprising Number of New NatGas Pipelines Coming in OH). The map we showed (embedded below) indicates that Ohio is in the midst of a major pipeline build-out with an astonishing 100+ new pipelines either currently under construction, or soon will be. The question from our reader: Who’s building all those pipelines?

    We went looking and found an excellent article in Farm and Dairy that gives us the answer…
    Read More “So Who’s Building All Those OH Pipelines Anyway?”

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    Antero Resources Expands Credit Line by $250M for More Drilling

    Antero Resources is a major Marcellus and Utica Shale driller, headquartered in Denver, CO. Last Friday, Antero announced they’ve upped their credit line with a banking syndicate by an additional $250 million (their full credit line is now $1.45 billion). They hint that they may expand their line of credit to the “full $1.75 billion borrowing base” in the future.

    Here’s the announcement that Antero now has more cash to help with drilling in the Marcellus/Utica:
    Read More “Antero Resources Expands Credit Line by $250M for More Drilling”

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    EQT Sells Sunrise Pipeline Operation to Itself for $540M

    EQT, a major driller in the Marcellus and Utica Shale, as well as a midstream (pipeline) operator, just announced they will sell a major natural gas pipeline they own–the Sunrise Pipeline–for $540 million to…itself. Er, at least to the EQT Midstream Partners, a new/separate Master Limmited Partner (MLP) company started by EQT to focus on the midstream sector. The ownership of the pipeline will change on paper (for accounting and investor purposes), but practically speaking, nothing else will change.

    The EQT announcement:
    Read More “EQT Sells Sunrise Pipeline Operation to Itself for $540M”

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    OH Hickory Bend Pipeline/Plant Makes Excellent Progress

    An update on the Pennant Midstream “Hickory Bend” pipeline and cryogenic processing plant being built in eastern Ohio. The local labor union boss says excellent progress is being made as the project now enters its second phase, in spite of distractions from anti-drillers (see Slight Delay for Hickory Bend Processing Plant, Permit Appealed)…
    Read More “OH Hickory Bend Pipeline/Plant Makes Excellent Progress”

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    New PennEnvironment “Report”: Soak Drillers for More Bond Money

    More huffing and puffing from the anti-drilling group PennEnvironment. Yesterday they released a new so-called report called “Who Pays the Costs of Fracking?” (full copy embedded below). PennEnvironment, using paid interns from an anti-fossil fuel think tank called The Frontier Group to write this drivel, attempt to make the case that drillers don’t pay enough bond money up front for future, possible, maybe, someday problems that might arise–potentially. So make ’em pay now, up front.

    Of course their chief recommendation–require obscenely high up-front bonds from drillers–is nothing more than a back-door way of making it more expensive to drill, leading to less drilling. But that’s what these types of organizations do–sit around and dream up ways to slow the use of those evil, nasty fossil fuels…
    Read More “New PennEnvironment “Report”: Soak Drillers for More Bond Money”

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    Maryland Public Comment Session #2 on Drilling Best Practices

    For years, MDN has poked fun at the State of Maryland and has said, somewhat tongue-in-cheek, that Maryland is the only state more dysfunctional than New York on the topic of hydraulic fracturing and shale drilling. Now? We’d say Maryland and New York are neck-in-neck in the race to screw up the biggest economic and jobs miracle in generations. But we’d still give Maryland a slight edge as being “most dysfunctional.” That dysfunction was on full display at yesterday’s second public meeting held by the Maryland Dept. of the Environment to receive comments on a draft best practices for shale drilling document–a document recently released by the governor’s Marcellus Shale Advisory Commission (see Maryland Releases Draft “Best Practices” in Shale Drilling Report for a copy).

    The Baltimore Sun was on hand for yesterday’s second public meeting–held in Baltimore–and filed this report:
    Read More “Maryland Public Comment Session #2 on Drilling Best Practices”

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    New API Ad Addresses Public Concerns about Fracking

    The American Petroleum Institute, the preeminent trade association for America’s oil and gas companies, has just launched a new advertising campaign to address public concerns (and correct media misstatements) about fracking. The ad will be run on TV and radio spots, as well as in print and online. It’s a great video ad (watch it below).

    Here’s the announcement from API on the new ad campaign:
    Read More “New API Ad Addresses Public Concerns about Fracking”

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    OH Students Get High-Paying Jobs in OH Utica Shale Industry

    A group of Ohio schoolteachers went on a field trip recently, touring drilling sites in eastern Ohio–Washington County, to be specific. A reporter tagged along to get their impressions and produced an interesting article. As part of that article, the reporter spoke to several educators about job opportunities in the Ohio oil (and gas) field patch. We’ve brought you such stories before, but it bears repeating that (in this case) Ohio students graduating from Marietta College’s petroleum engineering and geology department are actively, aggressively recruited and many get jobs right out of college with starting salaries of over $100,000 per year!

    In addition, there’s plenty of high-paying jobs for those without a degree who have skills–like welding, truck driving and diesel mechanic. You can see how the Ohio Utica Shale is radically improving the jobs situation in Ohio:
    Read More “OH Students Get High-Paying Jobs in OH Utica Shale Industry”

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    DRBC Delay Costs Wayne County Landowners $187.5M, Hess Pulls Out

    thanks for nothingThank you Carol Collier (Executive Director) and the other members of Delaware River Basin Commission (DRBC): You’ve just cost Wayne County, PA landowners a collective $187.5 million by your continued inaction to allow drilling in Wayne County. Newfield Appalachia PA and Hess Corp. started sending notices last week to Wayne County landowners that they’ve decided to terminate the leases they made with them in 2009–on more than 100,000 acres.

    Not wanting to tick off the DRBC and the member states of NY, NJ, PA and DE, the drillers blamed the lease terminations on a change in strategy–they want to drill in oily shale plays. But we know the real reason…
    Read More “DRBC Delay Costs Wayne County Landowners $187.5M, Hess Pulls Out”

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    PA Landowners with Marcellus Wells: The (Property) Tax Man Cometh

    A developing story for Pennsylvania landowners, as reported by WTAE Channel 4 (ABC) Pittsburgh: If you’re a PA landowner with over 10 acres of farmland or woodlands, it’s likely you pay a much lower tax rate on the land because of the “Clean and Green” Act–technically known as the Pennsylvania Farmland and Forest Land Assessment Act of 1974. Clean and Green is meant to keep taxes on farms and other agricultural-types of property lower, based on the land’s value for agriculture, rather than taxed on the land’s prevailing or “full market” value. When the land’s use changes, however, to something like an industrial use (i.e. used for a drill pad), the landowner is responsible for paying higher taxes on the prevailing market value for that portion of land used for that purpose.

    If you haven’t been paying a higher tax rate for the portion of your land used for drilling (as we understand it, only the surface portion used–where there’s a drill pad), you may retroactively owe back taxes. It seems that the Clean and Green tax issue for landowners with Marcellus wells on their property is now heating up, and if you’re not paying the higher tax, it’s being spun that you’re “hurting ordinary taxpayers”…
    Read More “PA Landowners with Marcellus Wells: The (Property) Tax Man Cometh”

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    REX Reverses Pipeline Flow from OH for Mystery Utica Customer

    What a difference a year makes. Last August, RBN Energy President Rusty Braziel said the Rockies Express Pipeline (REX), which originates in Rio Blanco County, Colorado and sends gas to Monroe County, Ohio, was in danger of drying up because there’s so much shale gas coming from the Marcellus. His prescription? Turn it around and send gas the other way (see REX NatGas Pipeline Faces Stiff Competition from Marcellus). Looks like REX has taken Rusty’s advice.

    In a press release issued yesterday, REX announced they have a binding agreement with an unnamed “large Utica Shale producer” who wants to use the pipeline to ship 200,000 decatherms of processed natural gas per day to the Midcontinent region of the country. That is, REX is reversing the flow for at least part of the pipeline. And who might the unnamed “mystery” producer be? We think we know…
    Read More “REX Reverses Pipeline Flow from OH for Mystery Utica Customer”

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    CONSOL 2Q13: Drilled 17 Marcellus/Utica Wells, Completed 15

    Second quarter earnings and operational update season is upon us. Yesterday Pittsburgh-based CONSOL posted their 2Q13 update (below). CONSOL has traditionally been one of the country’s largest coal producing companies. In recent years, however, they’ve changed their focus to natural gas–specifically Marcellus and now Utica Shale natural gas. That ongoing changeover is quite evident by the amount of space in the update below devoted to gas vs that devoted to coal operations.

    During 2Q13, CONSOL drilled 13 Marcellus Shale wells and 4 Utica Shale wells. They also completed 15 Marcellus Shale wells during that period. Overall, CONSOL produced 418 million cubic feet of natural gas per day on average during second quarter. However, perhaps the most exciting news in this update is CONSOL’s successful results for a new, third shale layer: the Upper Devonian layer. The full CONSOL update:
    Read More “CONSOL 2Q13: Drilled 17 Marcellus/Utica Wells, Completed 15”

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    Title Researchers Camp Out at Tyler County (WV) Clerk’s Office

    There are at least two reliable ways to know where drilling is about to begin (or expand): One is to monitor where (and how many) permits for drilling have been issued. MDN covers that with our Marcellus and Utica Shale Databook series, each volume of which maps where permits were issued in the past four months. Drillers don’t pay for expensive permits unless they’re going to drill. But in order to get a permit, you already must have leased the land. So the other way to predict future drilling is by how busy the local county clerk’s office is–where the land records are kept. Case in point: Tyler County, WV.

    According to MDN’s Databook 2013 – Vol. 1, Tyler County had 189 permits issued for 38 wells for January-April 2013. Going by the fevered activity at the county clerk’s office, however, predicts those numbers will soon go much higher. Title researchers are camping outside the county clerk’s office starting 6 pm the night before (!) in order to secure a spot in the clerk’s office the next day when the doors open. It’s becoming a problem for some residents…
    Read More “Title Researchers Camp Out at Tyler County (WV) Clerk’s Office”