Blackstone Buys Controlling Interest in Tallgrass Energy
Tallgrass Energy, builder and operator of the mighty Rockies Express (REX) pipeline which is a critical link that flows Marcellus/Utica gas to Midwestern markets, dropped a bombshell announcement yesterday. The company said that investment firm Blackstone is buying a “controlling” interest in the company. Which raises the question, will Blackstone indeed “control” the company?
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The U.S. Energy Information Administration recently published its Annual Energy Outlook for 2019. Among the numbers EIA released are predictions about how much natural gas liquids (NGLs) the U.S. will produce between 2018 and 2050. EIA says production will go up 32% over that period, to 5.8 million barrels per day (b/d). Guess where most of that increase will come?
MARCELLUS/UTICA REGION: Bitter cold tests electricity, natural gas systems; Dominion Energy donates $1.6 million to charities meeting critical community needs; Con Ed riles Westchester with moratorium on natural-gas hookups; OTHER U.S. REGIONS: Epic fail of renewables causes Texas town to have $1200 per year higher power bills; NATIONAL: Natural gas prices slump despite US winter weather blast; Natural gas is doing far more than renewables to clean our air; Sen. Whitehouse, #ExxonKnew activists try to revive failing climate litigation campaign; The New York Times got it wrong in “Drilling Down” and shale wins again; The Energy 202: 2020 hopefuls love talking about a ‘Green New Deal.’ But they’re short on specifics.; Commissioner, former chair Cheryl LaFleur to leave FERC this year.
Here’s an interesting twist on the theme of drillers shorting leaseholders out of royalty money. Usually such cases involve drillers claiming post-production deductions from landowner royalty checks. This time the landowner/rightsholder is Columbia Gas Transmission (pipeline company owned by midstream giant TransCanada), and the claim is that Southwestern Energy (driller) is not paying royalties for gas produced but not actually sold.
The folks who keep track of these things expect today’s record-cold polar vortex in the Midwest and northeast (coldest temps in more than a generation, hey, what was that about global warming?) will create the highest demand/usage of natural gas for a single day–ever. Prognosticators also predict a “freeze-off” in the Marcellus/Utica, causing a temporary 1 Bcf/d decrease in production.
Canadian pipeline giant TransCanada, which owns the Columbia Pipeline system here in the U.S., blames the Marcellus/Utica for a huge drop in volumes flowing through its Canadian Mainline from Western Canada to Ontario and Quebec.
The Environmental Protection Agency’s (EPA) office of enforcement is close to launching a new audit policy “that will offer significant new penalty reductions for the oil and gas industry.” That’s how the news is being spun–that oil and gas are about to get a big, fat, wet, sloppy kiss from the EPA. The truth is far different from the media spin.
As we have noted recently in a number of posts, it appears we’re heading into a dip of drilling activity–not only in the oil plays but also here at home in the Marcellus/Utica (see 
Equitrans’ (EQT Midstream) 300-mile Mountain Valley Pipeline (MVP) is now 70% built (see 
MDN previously reported on efforts in both Ohio and Pennsylvania to plug orphaned and abandoned oil and gas wells (all of them conventional/vertical wells), which present a health and safety issue. It’s all too easy to hit one of these old wells when drilling a new horizontal shale well. In WV, a new effort to plug old wells is causing concern for some–that the effort to plug old wells may inflict economic damage on WV counties. Huh?!