Marcellus Drilling News

Hydraulic Fracturing | Industrywide Issues | Regulation

Obama Picks REI CEO to Head Dept. of Interior
February 7, 2013February 7, 2013

President Obama has picked Sally Jewell, a “conservation advocate” and the CEO of outdoor retailer Recreational Equipment Inc. (REI) to be his next secretary for the Dept. of Interior, filling the post that Ken Salazar is vacating. The DOI and its Bureau of Land Management have developed new rules for hydraulic fracturing on federal lands that Obama “hopes” may serve as a “template” for fracking on private land (see Feds ‘Hope’ States will Use BLM Rules for ALL Fracking). The new BLM rules generated a lot of controversy in 2012 and Salazar and the DOI backed off implementing them until a rewrite is completed.

Jewell, if confirmed, will enter the battle over hydraulic fracturing and whether or not the federal government has a role to play in it (MDN and the U.S. Constitution says the feds don’t have a role). The extremist environmental organization Sierra Club likes Jewell, which is a huge red flag. However, she did once work for Mobil Oil (now Exxon Mobil)—for a few years just out of college.

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Anti-Drilling/Fossil Fuel | Earthquakes | Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

NY’s Anti-Drillers Attempt Smear of Geologists Consulting for DEC
February 7, 2013February 7, 2013

How does one convey the lunacy of the anti-drilling position in New York State? Latest example: The NY Dept. of Environment Conservation (DEC) has hired two geologists as consultants to evaluate earthquake risks associated with fracking (yes we know, there is no earthquake risk, but humor us for a bit). In a coordinated attack, anti-drillers say that because the two geologists have also done consulting assignments for nasty, evil drilling companies, they’re tainted. Damaged goods. Shills and tools of the drilling industry. Not to be trusted. Even though they’ve also done consulting work for environmentalist (anti-drilling) organizations. Doesn’t matter.

Such is how far anti-drillers have sunk in their campaign of smears and lies to try and prevent the miracle of hydraulic fracturing—which is already being done in NY in vertical conventional wells and has been for decades—from happening in the state for horizontal shale wells too.

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Huntingdon County (PA) | Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Supply Chain

Small Business Startup to Furnish PA Drillers with Act 9 Signs
February 7, 2013February 7, 2013

MDN loves small business—we would argue they are the backbone of job creation in this country. Score another victory for a small business that picked up on a supply chain opportunity—an opportunity to provide a product or service to the shale drilling industry. In February 2012, the Pennsylvania legislature passed a new law called Act 9. Similar to Act 13, Act 9 deals with regulating Marcellus and Utica Shale drilling in PA. Act 9’s purpose? Make well pad drill sites safer. Part of Act 9 requires drillers to post new signage with safety information at the entrance of each drill site (example below).

Enter a new small business: Unconventional Well Pad Signs. Located near Altoona, PA, Unconventional Well Pad Signs is a division of another company—HomeWaters Retreats. HomeWaters, which provides vacation retreats and camps, is a business completely unrelated to manufacturing or any of the types of businesses you normally associate with providing products and services to the drilling industry. Gotta love small business entrepreneurs…

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Energy Services | Industrywide Issues | Ohio | Pipelines | Statewide OH | Tennessee Gas Pipeline | Utica Shale

TGP Seeks to Convert Pipeline into Utica Wet Gas Gathering Line
February 7, 2013February 7, 2013

The Tennessee Gas Pipeline Co. recent made a filing with the Federal Energy Regulatory Commission (FERC) declaring its intention to convert an existing “lean gas” pipeline in the Ohio Utica Shale into a gathering pipeline to move wet gas from the Utica to market. TGP is getting a lot of pushback from existing pipeline customers that would be affected by the change:

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Lackawanna County | Luzerne County | Pennsylvania

Scranton Newspaper Owner Buys Businesses Serving the Marcellus
February 7, 2013February 7, 2013

A very brief mention in a Scranton-area newspaper announces that the newspaper’s owner, Elk Lake Capital, has just purchased two companies that supply services to the Marcellus Shale drilling industry (gasp):

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Energy Companies | Ohio | PDC Energy | Statewide OH | Utica Shale

PDC Energy Dumps Piceance to Concentrate on Ohio Utica
February 7, 2013February 7, 2013

PDC Energy, formerly known as Petroleum Development Corp., announced Tuesday they are selling off “non-core” assets in the Piceance Basin (northwestern Colorado) and assets they own in northeastern Colorado for $200 million so they can invest the money in wet gas drilling in the Ohio Utica and Niobrara Shale plays.

PDC’s announcement from Tuesday:

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Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

Details of OH Gov. Kasich’s Utica Shale Severance Tax Hike
February 6, 2013February 6, 2013

Ohio Gov. John Kasich released his budget for fiscal years 2014 & 2015 yesterday, and along with it, he resurrected the same plan he first introduced a year ago to increase severance tax on oil and gas production in the Utica Shale (see Details on Ohio Gov. Kasich’s New Tax on Shale Drilling). The plan in a nutshell: Hike the severance tax on Utica Shale drilling, then spread the new-found wealth around to buy votes to get re-elected.

Here’s a summary of the coming changes (and make no mistake, the plan will pass this time):

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Energy Services | Harrison County | Industrywide Issues | MarkWest Energy | Monroe County | Ohio | Pipelines | Processing Plants | Statewide OH

Cash Runs Low – MarkWest Floats $150M Loan in Utica Midstream JV
February 6, 2013February 6, 2013

At the end of 2011, MarkWest Energy and The Energy & Minerals Group (EMG) announced that MarkWest was buying out EMG’s share in a 3-year-old joint venture deal in the wet gas portion of the Marcellus Shale called MarkWest Liberty Midstream. EMG owned a 49% stake in that JV (see MarkWest Pays $1.8B to Buy Out JV Partner in Liberty Midstream). At the time of the buyout, the two companies announced they would form a new JV to build midstream infrastructure in the Utica Shale starting in 2012.

The new Utica JV (called MarkWest Utica EMG) ramped up in early 2012 as the pair set out to duplicate their success in building out the Marcellus in the fledgling Utica. The strategy? “Creating a large network of processing complexes connected through an extensive NGL gathering system,” which they immediately began to do by beginning construction on two new processing complexes in Harrison and Monroe counties in Ohio (see MarkWest to Expand/Build NGL Plants on New Agreements). Just one tiny problem: the Utica JV is now running short on cash…

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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

NY Drillers: “Optimistic” DEC will Meet Feb 13 Fracking Deadline
February 6, 2013February 6, 2013

Landowners in New York State wait with bated breath for next Wednesday, Feb. 13 (one week from today), to see if the Dept. of Environmental Conservation publishes a final version of new fracking regulations. If the DEC misses the deadline next Wednesday, the new rules will almost certainly not be released on Feb. 27, which is the final deadline to release those rules or… or the process restarts. More public comments. More posturing by environmental extremists. More everything. If the deadline next Wednesday is missed, all bets are off on whether New York will ever see fracking in our opinion.

What does “the industry” think? Perhaps the best barometer of what drillers are thinking comes from Brad Gill, the executive director of the Independent Oil & Gas Association of New York (IOGA of NY). He was in Albany yesterday to meet with lawmakers. Here’s what he said:

Read More “NY Drillers: “Optimistic” DEC will Meet Feb 13 Fracking Deadline”
Ohio | Statewide OH | Utica Shale

Ohio: 512 Utica Shale Permits Issued, 223 Utica Wells Drilled
February 6, 2013February 6, 2013

The numbers keep racking up for Utica Shale permits and wells drilled in Ohio. According to the latest report from the Ohio Dept. of Natural Resources, Ohio has now approved 512 permits for Utica Shale drilling and the state has 27 drilling rigs busy at work in the Utica right now. So the numbers will continue to rapidly rise for the foreseeable future.

Here’s the particulars of where permits and drilling are taking place, including two helpful interactive maps:

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Columbia Pipeline Group | Energy Services | Industrywide Issues | Pennsylvania | Pike County | Pipelines | Regulation | Tennessee Gas Pipeline | Wayne County

DRBC – Fishing for Money from 2 Pipeline Companies?
February 6, 2013February 6, 2013

The regional quasi-governmental organization in charge of “protecting” the Delaware River Basin—the Delaware River Basin Commission—has just reversed a decision about whether or not they have the right or power to review (i.e. regulate) two newly completed natural gas pipelines that run through DRBC’s territory. Yes, both pipelines are now completed (barn door…horse?).

It appears the DRBC is kowtowing to anti-drilling environmental organizations like Delaware Riverkeeper Network by going after these two pipeline companies…

Read More “DRBC – Fishing for Money from 2 Pipeline Companies?”
Anti-Drilling/Fossil Fuel | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | New York | Regulation | Statewide NY

NY Comptroller Bullies Cabot O&G over Frack Fluid Disclosure
February 6, 2013February 6, 2013

Being the sole person in charge of a pot of investments worth $150 billion is an awesome responsibility—and invests that person with an enormous amount of power. Power which can (and is) abused. New York State Comptroller Thomas P. DiNapoli is the sole person in charge of the New York State Common Retirement Fund and he regularly throws his weight around with the companies the fund invests in to strong-arm them into doing things they typically don’t want to do. Call it bullying (because that’s what it is).

The latest example: DiNapoli, himself an anti-driller, is crowing that he forced Cabot Oil & Gas, one of the companies the Fund invests in ($35.8 million), to “publicly disclose its policy and procedures for eliminating or minimizing the use of toxic substances in its hydraulic fracturing fluids.” Never mind that Cabot already lists the components of its fracking fluids in the FracFocus.org Chemical Disclosure Registry. Let’s not let facts get in the way of a good PR campaign.

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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Feb 6, 2013
February 6, 2013February 6, 2013

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: Wed, Feb 6, 2013”
Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Martens Prepares to Blame Shah if Fracking Doesn’t Happen in NY
February 5, 2013February 5, 2013

Pennsylvania is doubling their natural gas output every year by using fracking. So is West Virginia. Ohio has now joined the fracking club and is ramping up their natural gas production. All of the states in the northeast “neighborhood” are fracking—without water contamination, without pollution problems, without a negative impact on “public health,” et cetera et cetera. All except New York, which continues to dither over its decision to frack. Why? Politics. Not science, not health concerns. Politics.

In testimony before the NY legislature yesterday, Dept. of Environmental Conservation (DEC) Commissioner Joe Martens acknowledged if the DEC doesn’t meet a Feb. 13 deadline to publish final drilling rules the review process will need to restart—yet he also told legislators there is no projected date for finishing shale gas drilling rules and it will depend on recommendations from a health review the DEC will receive “in a few weeks.” MDN finds Martens’ comments from yesterday troubling…

Read More “Martens Prepares to Blame Shah if Fracking Doesn’t Happen in NY”
Albany County | Broome County | Hydraulic Fracturing | Industrywide Issues | New York

Phelim McAleer & FrackNation Documentary Come to Upstate NY
February 5, 2013February 5, 2013

If you live anywhere in the vicinity of either Binghamton, NY or Albany, NY, the Joint Landowners Coalition of New York (JLCNY) is hosting a free screening of Phelim McAleer’s new documentary FrackNation this weekend. Phelim himself will be there!

The dates are Sunday, Feb. 10 at 2 pm in Binghamton, and Monday, Feb. 11 at 7 pm in Albany. MDN editor Jim Willis will attend the Binghamton screening and would love to meet MDN readers (drop me a line to let me know you’re going: jim@marcellusdrilling.com).

Here’s the press announcement:

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Chesapeake Energy | Energy Companies

Chesapeake Pays $15.4M to Prevent Exodus of Top Talent
February 5, 2013February 5, 2013

Last week MDN told you the news that Chesapeake Energy founder and CEO Aubrey McClendon was given the pink slip by the Chesapeake board of directors (see Breaking: Chesapeake Energy CEO Aubrey McClendon Gets Pink Slip). At the time we theorized that Chesapeake may rue the day they let him go—we fully expect to see McClendon turn up again, running a new company to compete with Chesapeake. He’s young (53 years old), he’s charismatic, and he’s full of energy and determination.

Although it was pure speculation at the time, perhaps we weren’t so far off the mark. Chesapeake has awarded big (big) stock option “retention” bonuses worth $15.4 million to three members of McClendon’s leadership team to keep them right where they are—at Chesapeake:

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