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    MDN Weekly Update – Sept 11, 2011: Remembering 9/11, Shale Gas Exports

    MDN enjoyed the last two weeks of August off, so this is the first weekly update since returning. Thank you for the kind notes received of both “have a great break” and “welcome back.” My wife and I recently observed our 25th wedding anniversary, so we thought we would celebrate with a cruise. Our cruise left the Port of New York on Saturday, August 27, just as Hurricane Irene was starting to arrive. I’ll spare you the details, but let’s just say we now know what it feels like to ride a roller coaster for 24 hours straight as you sail through the edge of a hurricane!

    Not long after returning, the area where we live—Binghamton, NY—felt the effects of Tropical Storm Lee. It brought the worst flooding in our recorded history—over 10 inches of rain in a 24 hour period. We have friends who have lost almost everything they own from flood damage. Fortunately we’re fine, but there are thousands of hurting people in this area. Perhaps you might say a prayer, and if you are so inclined, make a donation to the American Red Cross Disaster Relief Fund. The Red Cross has been out here in force to help. A fine organization.

    And I can’t let the 10th anniversary of the attacks on our great country pass without a few words. I once worked for a company with offices in New York. That company was holding a conference at the top of 1 WTC on that fateful day. I personally knew and had worked with some of the people who died an unspeakable death on 9/11. People that I called “friend.” I pause today to remember and reflect on their lives and the lives of all those lost ten years ago today. I recommend a Michael W. Smith YouTube video of his song, “There She Stands” as a fitting way to remember and reflect.

    I hope you’ll forgive this personal digression, but amidst the hurting, and the remembering, I find my emotions quite raw. It’s important to remember that in the rough and tumble of our debate over shale gas drilling and hydraulic fracturing, that there are people on the other side of the aisle. People with feelings. You know I strongly support drilling and so am willing to take the arrows that come my way. I have to remind myself sometimes that I need to keep a civil tongue in what is increasingly an uncivil debate. And so I encourage people on both sides of the debate today to remember to be civil. Those on the other side of this debate are not your enemy. Our country has plenty of enemies, and our friends and neighbors who think differently about drilling in the Marcellus and Utica Shales are not among them.


    Below are the results of the poll which has been posted for the past three weeks.

    Poll resultsHydraulic fracturing should be regulated by:

    Federal government (13%, 41 Votes)
    State governments (52%, 166 Votes)
    Both should have a role (35%, 111 Votes)

    Total Voters: 318

    Should U.S. Shale Gas be Exported?

    This past week MDN highlighted a story about exporting shale gas (see here). Dominion Resources has made application with the U.S. Department of Energy to export natural gas, much of which comes from the Marcellus. If Dominion and the other requests to export now on the books at the DOE are approved, some 12 percent of our natural gas supplies would be exported overseas. Those in favor of exporting will say “it’s about time we start exporting again” and that it will boost the U.S. economy by providing jobs and help reverse the long trend that we as a nation are net importers instead of net exporters. Another argument in favor is that we have a surplus right now—more gas is available than we can reasonably use here at home, so why not export it? Supporters will also say that the free market should determine whether or not the gas stays here or goes overseas. All strong arguments to be sure.

    On the other side, critics of drilling point out that one of the main arguments used to “sell” the concept of drilling is that it will provide abundant and cheap gas here at home—a source of cheap energy for the next two or three generations—and that we can finally wean ourselves from imported oil from countries not friendly toward the U.S. And if we start exporting a large portion of our supplies, that means less supply at home and higher prices. Critics will say “it’s the almighty buck” that companies want and that they don’t care about the citizen’s of their own country.

    Let’s be clear, profit is what drives companies and seeking profit is not evil or bad. If you think so, go live in Cuba. See what that worker’s paradise is like. But MDN also believes that it may be wise to keep tight control over how much gas gets exported. Yes, companies need to make a profit—let’s not deny them that! But on the other hand, let’s not get the gas and immediately sell it to someone else. I’d rather see our auto industry convert to NG cars and trucks, and more home heating converted, and electrical power plants, etc. With an abundant and cheap supply of natural gas here at home, it will happen. But not if we sell it overseas and hike the prices here at home. It’s a fine line and what MDN has called “a thorny issue.” How much fiddling can and should we do with the free market?

    So MDN’s poll question this week: Should the U.S. allow shale gas to be exported? Register your vote along the right side of any page on the site.

    Below are the most recent “top 5” lists and the calendar of Marcellus related events for the next two weeks.

    Happy reading,
    Jim Willis, Editor

    Read More “MDN Weekly Update – Sept 11, 2011: Remembering 9/11, Shale Gas Exports”

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    Thorny Issue: Dominion Files Request to Export Shale Gas

    Cove Point Terminal - MarylandOne of the strongest arguments in favor of drilling for Marcellus and other shale gas in the U.S. is that it provides a cheap alternative fuel for Americans—a “home grown” energy source that benefits everyone. It’s a simple and undeniable fact: Cheap energy translates into economic prosperity for all citizens. Cheap energy makes it easier for businesses to produce goods and services, and that means jobs.

    Energy companies often make the “cheap domestic energy” argument when talking about the benefits of shale gas drilling—rightfully so. But when those same companies then start exporting natural gas, well, it’s a tad hypocritical. Exporting leads to less supplies here at home, and less supplies means higher prices. Energy companies will argue we have more than enough—an excess of natural gas—and by exporting they create more jobs here at home. But others (like MDN) are not so sure that argument holds up, especially for a nascent industry with huge potential to transform the energy picture here at home.

    Read More “Thorny Issue: Dominion Files Request to Export Shale Gas”

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    Range Sending Natural Gas Liquids to Canadian Cracker Plant

    Range Resources is not waiting for a new multi-billion dollar cracker plant to be built in the Marcellus region to process the natural gas liquids they’re producing in the region. Instead, Range is going to send its natural gas liquids to Canada for cracking. Natural gas liquids contain ethane which can be processed or “cracked” to produce ethylene, a raw material used to make plastics.

    Read More “Range Sending Natural Gas Liquids to Canadian Cracker Plant”

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    PA DEP Sec. Krancer Addresses Shale Gas Meeting in Philly

    Some 1,600 people attended the Shale Gas Insight 2011 conference held Wednesday and Thursday in Philadelphia. At yesterday’s second and final day of the conference, State Department of Environmental Protection (DEP) Secretary Michael Krancer spoke in place of Gov. Tom Corbett at a lunchtime keynote because the governor was responding to the widespread flooding crisis. Among his remarks was an observation that MDN has repeatedly made—that much of the opposition to shale gas drilling is ideological and philosophical, not scientific:

    Read More “PA DEP Sec. Krancer Addresses Shale Gas Meeting in Philly”

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    New Marcellus Pipeline Regulations Coming to PA This Fall

    New regulations for the many gathering pipelines in Pennsylvania’s Marcellus Shale drilling regions will be a top priority this fall according to Republican legislators. It’s not clear under existing PA law which government agency has jurisdiction and responsibility for inspecting intrastate pipelines—and that “who’s on first” problem has led to safety lapses, including explosions.

    Read More “New Marcellus Pipeline Regulations Coming to PA This Fall”

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    NY DEC Issues Final Draft Drilling Regs – What Happens Now?

    What Happens Now?The New York State Department of Environmental Conservation (DEC) issued a “final” draft version of proposed new drilling regulations yesterday (see link to full copy below) after incorporating new information it received from a private study about the industrialization affects of drilling on local communities. The new draft Supplemental Generic Environmental Impact Statement (SGEIS) weighs in at 1,537 pages—a behemoth. DEC Commissioner Joe Martens set up a 90-day public comment period to end December 12th, instead of the previously promised 60-day period.

    Read More “NY DEC Issues Final Draft Drilling Regs – What Happens Now?”

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    CONSOL Sells Ohio Utica Shale Rights to Hess for $593M

    Consol Energy Inc. has sold exploration and development rights for natural gas in the Ohio Utica Shale to Hess Corp. The $593 million deal was announced yesterday. The agreement gives Hess 50 percent of Consol’s mineral rights to some 200,000 acres. Hess will pay Consol $59 million when the deal closes in October and invest an additional $534 million in the operation over the next five years.

    Read More “CONSOL Sells Ohio Utica Shale Rights to Hess for $593M”

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    New Study Says Gas Drilling in NY Will Create 54K Jobs

    A private study on the socio-economic impacts shale gas drilling is projected to have in New York State shows hydraulic fracturing will create some 54,000 jobs and result in $2.5 billion in economic activity. The report, titled “Economic Assessment Report for the Supplemental Generic Environmental Impact Statement on New York State’s Oil, Gas, and Solution Mining Regulatory Program,” was commissioned by the New York Department of Environmental Conservation (DEC) and researched and written by Ecology and Environment Engineering, P.C. A full copy is embedded below.

    Read More “New Study Says Gas Drilling in NY Will Create 54K Jobs”

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    Shell Nears Decision on Where to Build $2B Cracker Plant

    ShellShell Oil is “nearing a decision” on where to build a multi-billion dollar ethylene cracker plant in the Marcellus region, and states in that region—specifically Pennsylvania, West Virginia and Ohio—are aggressively competing to have the plant built in their state. (See MDN’s petrochemical primer for details on how shale gas drilling relates to the chemical industry).

    The stakes are high indeed. The cost to build the plant will exceed $2 billion, and it’s estimated the plant will attract some $16 billion in associated industry expenditures and provide more than 17,000 jobs in those associated industries.

    Read More “Shell Nears Decision on Where to Build $2B Cracker Plant”

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    How Much Does it Cost to Drill a Single Marcellus Well? $7.6M

    A new 92-page study just released by the University of Pittsburgh (copy embedded below) takes a realistic look at the direct costs, and economic impacts, of drilling a single Marcellus Shale gas well. The study, called the “Economic Impact of the Value Chain of a Marcellus Shale Well,” looked in depth at an EQT-drilled well in Washington County, PA. Undergraduate and graduate students from Pitt found that a single well had direct costs of more than $7.6 million. Or think of it this way: More than $7.6 million is invested in a local community, on average, for each and every well drilled.

    The costs to drill a well break down this way:

    Read More “How Much Does it Cost to Drill a Single Marcellus Well? $7.6M”

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    New Penn State Study on Economic Impacts of Marcellus Drilling

    A new 62-page study (embedded below) conducted by Penn State and the Pennsylvania College of Technology looks at the economic impact of natural gas drilling in PA. The study, titled “Economic Impacts of Marcellus Shale in Pennsylvania: Employment and Income in 2009,” uses a new (and according to the authors more accurate) methodology to calculate gas drilling’s economic impacts on local communities. The authors suggest the economic impacts of Marcellus drilling for local communities are not as big as previously reported.

    Read More “New Penn State Study on Economic Impacts of Marcellus Drilling”

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    The 10 Largest Natural Gas Drillers in the U.S.

    Top 10ProPublica recently compiled a list of the top 10 natural gas drillers in the U.S. based on daily natural gas production volume. The list includes gas drilled by both “traditional” vertical drilling as well as “non-traditional” horizontal hydraulic fracturing. Or think of it as non-shale gas and shale gas—companies who drill for both are in the list. The Marcellus Shale represents a good portion of the gas now being produced in the country, but other shale formations, like the more mature Barnett Shale (in Texas) also contribute a substantial volume of natural gas.

    MDN presents this list as a useful resource for landowners. The biggest drillers are not always the best, and not always the right choice for a given landowner and situation. However, knowing who the “bigs” are can be a helpful guide—you know they have the money and the technology to get the gas out of the ground, and they have money to pay for leases and royalties.

    Read More “The 10 Largest Natural Gas Drillers in the U.S.”

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    Anti-Drillers Try to Tie VA Earthquake to Marcellus Drilling

    It didn’t take long for those who oppose Marcellus Shale gas drilling to try and link the recent earthquake centered near Mineral, VA on August 23 to hydraulic fracturing and horizontal drilling in the Marcellus. Blogs and internet forums said the 5.8 magnitude quake was a result of Marcellus drilling activity, but scientists have flatly stated there is no connection to be made: Marcellus drilling activity is not the cause of the quake. But is there ever a connection between shale gas drilling and earthquakes? The surprising answer is, maybe. But likely not what you think it is.

    Read More “Anti-Drillers Try to Tie VA Earthquake to Marcellus Drilling”

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    PA Poll Shows Most Residents Support Marcellus Drilling

    Franklin & Marshall College (Lancaster, PA) conducted a statewide poll of 525 Pennsylvania residents in late August. Among the questions asked were a series of questions about Marcellus Shale drilling. The vast majority of Pennsylvanians support gas drilling in the state (66%). A slight majority believes the economic benefits of drilling outweigh the potential environmental impacts, and most think that opening more state forest land for drilling should not be done. The full questions and responses are listed below.

    Read More “PA Poll Shows Most Residents Support Marcellus Drilling”