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    M-U Gas Now Travels to Dawn Hub in Canada via Rover Pipeline

    Click map for larger version

    Last Thursday, May 24, Energy Transfer Partners requested (frankly, begged) the Federal Energy Regulatory Commission (FERC) to approve final startup for the rest of Rover Pipeline not yet flowing–by June 1st. ET has contracts to honor and they promised shippers the full pipeline would be up and running by June 1st. ET requested permission to start up the “Majorsville Lateral, Supply Connector Line B, and Mainline B between CS1 and CS2 and between CS3 and the terminus,” along with a request to begin flowing on the “Burgettstown Lateral.” Note that some of the project has two pipelines, side by side (the Mainline and Supply Connector). ET asked that the second pipes in both cases be allowed to start up, along with the Majorsville and Burgettstown Laterals (see the map). ET got some of what it wanted–everything but permission to start up the laterals–yesterday from FERC. With the startup of Mainline B and Supply Connector B, ET says the Rover Pipeline project is now capable of flowing the full 3.25 billion cubic feet per day of natgas all the way to the Dawn Hub in Ontario, Canada. The only “problem” remaining is to find enough gas to flow the full 3.25 Bcf/d. They won’t be flowing the full 3.25 Bcf/d until all of the laterals are brought online…
    Read More “M-U Gas Now Travels to Dawn Hub in Canada via Rover Pipeline”

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    PA Natural Gas Production Hits New All-Time High in 1Q18

    Yesterday, the PA Independent Fiscal Office (IFO) released their latest quarterly Natural Gas Production Report for Jan-Mar 2018 (full copy below). It shows natgas production rose 9.9% compared to the same period last year. It also shows the number of producing wells is up 9.1% from last year. Total natural gas production volume was 1,441.2 billion cubic feet (Bcf), and the number of producing wells in 1Q18 was 8,402 (of which 7,913 were shale wells). The biggest news is that once again 1Q18 saw the highest quarterly production of natural gas in the state–ever. The previous quarterly report had been the highest ever until this report (see PA Natural Gas Production Hits Another All-Time High in 4Q17). Two-thirds of the state’s natural gas production comes from four counties: Susquehanna, Washington, Bradford and Greene. The #1 county for natgas production in 1Q18 was, as it was in each quarter of 2017, Susquehanna County, in the northeastern corner of the state. The #1 producing driller in Susquehanna County is Cabot Oil & Gas. Here’s the full 1Q18 natural gas production report from the IFO…
    Read More “PA Natural Gas Production Hits New All-Time High in 1Q18”

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    Dutchess County, NY NatGas Power Plant Begins Construction

    Artist’s rendering of Cricket Valley Energy Center project – click for larger version

    We who live in New York State live under a dictatorship. Our governor, Andrew Cuomo, has been co-opted by radical environmentalists. He recently stated he would autocratically block any/all new natural gas pipelines AND any/all new gas-fired electric plants (see NY Gov. Cuomo Says He’ll Block All New Gas-Fired Elec Plants). He made the preposterous claim he hasn’t issued any permits for new gas-fired plants during his time in office. Not true. The Competitive Power Ventures (CPV) Valley Energy Center natural gas-fired electric generating plant in Orange County, NY was permitted under Cuomo and will begin service this month (see Orange County, NY Electric Plant to Start Up in June). Valley Energy Center, which will get its gas from the Millennium Pipeline (Marcellus gas), will generate 680 megawatts of electricity–enough to power 650,000 homes. Little did we know, but there is a *second* gas-fired power plant project also permitted under Cuomo that’s just begun construction–in neighboring Dutchess County. Cricket Valley Energy Center (CVEC) is a fully-permitted, approximately 1,100 megawatt natural gas-fired power plant now under construction on an industrially-zoned site off Route 22 in Dover. It will generate enough electricity to power 1 million homes! Similar to CPV’s Valley Energy Center, environmental extremists have launched a barrage of attacks against Cricket Valley. However, Cricket Valley is already under construction and due to go online in 2020. There’s no stopping it now…
    Read More “Dutchess County, NY NatGas Power Plant Begins Construction”

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    Big Green Sues to Stop DTE Energy’s MI Gas-Fired Electric Plant

    Click image for larger version

    Last June DTE Energy filed paperwork in Michigan to build a new “state-of-the-art” natural gas-fired power plant in St. Clair County (see DTE Energy Files to Build New Natgas-Fired Elec Plant in Michigan). The gas-fired plant will produce 1,100 megawatts of electricity, enough to power 850,000 homes. If all goes according to plan, the new $1 billion plant will go online in 2022, helping to offset three coal-fired plants set to be retired by 2023. The process is long to approve and then build such a project, with many hoops to jump through. The first hurdle, perhaps THE major hurdle, is an approval by Michigan utility regulators. That happened in April. Right on cue the far-left Sierra Club, Natural Resources Defense Council (NRDC), and Earthjustice, all of which seem to have unending sources of cash to file lawsuits, have together filed an appeal with the Michigan Court of Appeals to reverse the Michigan Public Service Commission (MPSC) decision to approve the project…
    Read More “Big Green Sues to Stop DTE Energy’s MI Gas-Fired Electric Plant”

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    Nightmare: Appeals Court Upholds Right to Cancel Pipeline Deals

    Drillers may have a new “get out of (pipeline) jail free” card. If you don’t like your 10-20 year pipeline contract, just file for bankruptcy and cancel the contract during the “reorganization” process, emerging from bankruptcy without the responsibility to fulfill the long-term contract you signed. That’s the option just upheld by the Second Circuit Court of Appeals (unsurprisingly located in New York). MDN has covered this issue for more than two years. In March 2016, MDN brought you the news that a NY bankrutpcy court judge had allowed Sabine Oil & Gas, going through bankruptcy, to cancel a pipeline gathering contract with Cheniere’s Nordheim Eagle Ford Gathering in Texas (see Midstream Nightmare Comes True: Judge Lets Driller Cancel Contracts). Nordheim spent $84 million building a pipeline system to Sabine’s wells. In return for laying out that kind of money, Sabine, as is almost always the case, signed a multi-year contract with Nordheim (10 years in this case), ensuring Nordheim would make a profit on its up-front investment. The judge allowed Sabine to unilaterally cancel the deal several years into the contract as part of the bankruptcy process. We asked at the time: If a driller signs a contract and that signature is no longer any good, will anyone build pipeline systems anymore? We later brought you insight from a pair of lawyers who said: “If other judges follow the analysis and conclusions reached in the Sabine Oil case, the expectations of midstream service providers in the oil and gas extraction process might be turned on their heads” (see Lawyers Warn Pipeline Case May Turn Midstreamers “On Their Heads”). Indeed. Now that the Second Circuit has upheld this disastrous lower court decision, with the only appeal option left being the U.S. Supreme Court (which likely won’t take the case), we’re holding our breath to see what happens next. It seems this is the nightmare we can’t wake up from. Will midstream companies quit building gathering systems?…
    Read More “Nightmare: Appeals Court Upholds Right to Cancel Pipeline Deals”

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    Record Demand + Record Production = Flat NatGas Price This Summer

    The single biggest factor in whether or not gas drillers are willing to roll the dice and drill another well is….the price of natural gas. When prices are low, say below $3 per thousand cubic feet (Mcf), drillers are less willing to ramp up the rigs and drill new holes in the ground. When the price goes significantly above $3/Mcf, they’re much more likely to drill. Everyone keeps a close eye on the price. We’ve just come through a hard winter that drew down stocks of natural gas in reserve. Less supply with the same or increasing demand equals higher prices. However, if drillers produce more, a lot more, then supply will meet, or even exceed increased demand and the price will stay about the same, or even decrease. So what about the price for natural gas this summer? The Natural Gas Supply Association (NGSA) has just hauled out its crystal ball to predict what may happen with the price of natgas this summer. As our headline indicates, NGSA believes the price will remain about where it is now. From the report (full copy below): “Our expectation for flat price pressure is based on a forecast for tremendous growth in demand that is matched by even more impressive growth in production”…
    Read More “Record Demand + Record Production = Flat NatGas Price This Summer”

  • Energy Stories of Interest: Fri, Jun 1, 2018

    The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Final vote next Tuesday on PA House bill to reverse over-regulation of o&g; volunteer to be a “shale gas stream monitor”; Chevron shareholders vote down methane proposal; Pittsburgh on the path to prosperity with shale; PA Dems & GOP expect quick budget agreement; TX and CA facing power gen shortages this summer; oil industry upset with Trump over tariffs; Gina McCarthy’s radical environmentalism metastasizes at Harvard; Exxon says the world needs more oil; and more!
    Read More “Energy Stories of Interest: Fri, Jun 1, 2018”

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    Financial Checkup for Marcellus/Utica Drillers

    RBN Energy, headed by founder Rusty Braziel (co-founder of Bentek Energy), is, in our opinion, the premier oil and gas analytics firm out there. Smart people working at RBN. And they offer up some amazing content on their blog site–for free! At least it’s free for a while, then it goes behind a paywall. A few days ago RBN published a blog post on the financial health for the 44 major publicly-traded U.S. exploration and production companies (drillers). RBN groups them into three categories: Oil-Weighted, Diversified, and Gas-Weighted. We found the Gas-Weighted list of 10 companies and the information revealed about them to be fascinating and worth studying. Each of the companies has major operations in the Marcellus/Utica–some of them totally focused on our region. Among the data points shared: revenue, production costs, lifting costs and more. We think of the following as a handy financial health scorecard/checkup for 10 of the biggest drillers in the M-U, including Antero Resources, Cabot Oil & Gas, Chesapeake Energy, CNX Resources, EQT, Gulfport Energy, National Fuel Gas (Seneca Resources), Range Resources, Southwestern Energy, and Ultra Petroleum…
    Read More “Financial Checkup for Marcellus/Utica Drillers”

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    PA DEP Hellbent to Ram Through 250% Hike in Shale Permit Fee

    Pennsylvania Gov. Tom Wolf’s Dept. of Environmental Protection (DEP), the agency charged with overseeing oil and gas drilling in the state, “blindsided” the shale industry in February with a proposal to hike the fee required when submitting an application to drill a new shale well (see PA DEP Plans to Raise Marcellus Well Permit Fee by 250%). The current fee is $5,000. The proposed new fee is $12,500–or 2.5 times (250%) higher. We understand…the DEP has fewer people working there than it once did and needs to hire more help. However, the DEP wants to slap this insanely high fee on shale drillers to (in part) cover the expenses associated with non-shale activities! According to the Pittsburgh Post-Gazette, the shale permit fees will, “fund the broad scope of the [DEP] office’s operations, including its oversight of traditional [i.e. conventional] oil and gas wells, gas storage wells, abandoned wells and earthmoving activities.” How is it, in any sense, fair to hike the fees of shale drillers so DEP agents can better keep an eye on non-shale wells? The DEP plans to steamroller this increase through. Last week the DEP’s own Environmental Quality Board approved the increase. The next step is to publish a notice about the increase in the Pennsylvania Bulletin. That will trigger a 30-day public comment period. However, don’t look for the fee increase to happen right away. It appears DEP thinks they’ll have a royal fight on their hands (which they will), because they said the fee increase won’t happen until 2019 or maybe even 2020…
    Read More “PA DEP Hellbent to Ram Through 250% Hike in Shale Permit Fee”

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    Franklin County, VA Turns Down $200K to Store MV Pipe Equipment

    Talk about cutting off a $200,000 nose to spite your face! One of the counties through which the Mountain Valley Pipeline (MVP) will travel is Franklin County, VA. MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. For more than a year residents in Franklin County have opposed and hassled the MVP project (see Franklin County, VA Landowners Use Sheriff to Eject MVP Surveyors). Over the weekend the last tree-sitting protester, engaging in an illegal attempt to stop the pipeline from coming through Franklin, came down out of the trees (see Last MVP Tree Sitter in Franklin Co. Comes Down, Trees Cut). MVP was and is getting built through the county, but in a childish act of rebellion, three members of the Franklin Board of Supervisors voted to deny MVP the use of 10 acres of county land to temporarily store construction equipment. MVP was willing to pay the county a staggering $200,000–money the county desperately needs. Instead, to make a “statement” by thumbing its nose at MVP, the three supervisors turned down the MVP money and will now soak taxpayers for that revenue instead. We hope the voters of Franklin remember that at the ballot box in November…
    Read More “Franklin County, VA Turns Down $200K to Store MV Pipe Equipment”

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    Two More $1M NatGas Pipeline Grants Coming Courtesy PA Taxpayers

    PA Gov. Tom Wolf

    It’s Christmas in Pennsylvania. Last week PA Gov. Tom Wolf and his Dept. of Community and Economic Development (DCED) announced the award of nine grants “to promote energy efficiency and spur economic development.” Among those nine grants are two grants for new natural gas pipelines. Two $1 million grants were awarded from the PA Pipeline Investment Program (PIPE), one to flow gas to a wax manufacturer in McKean County that wants to switch from using coal to natgas, and the other to serve over 500 new residential and business gas customers in Wayne County. Other grants in the list of nine include $965,000 for a 2000 kW CHP (combined heat and power) system for the Villanova University campus, and $1.2 million for a 2,000 kW CHP system for the Bayer Healthcare facility in Myerstown. In general we’re not in favor of corporate welfare, which is what this is (let’s just be honest). However, this is a pretty mild case of it. We can think of worse ways to blow taxpayer’s money. Essentially these relatively small investments keep more PA gas in PA by running pipelines to residents and businesses that will use it, and by helping fund power plants that will use it. Think of the grants as seed money to encourage more PA gas staying in PA, generating jobs at the same time…
    Read More “Two More $1M NatGas Pipeline Grants Coming Courtesy PA Taxpayers”

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    FERC Defends Atlantic Bridge Pipe Approval in DC Circuit Court

    In January 2017 the Federal Energy Regulatory Commission (FERC) granted final approval for the Atlantic Bridge expansion project (see FERC Approves Atlantic Bridge Project for New England/Canada). The Spectra Energy/Enbridge project beefs up capacity along the Algonquin Pipeline, along with more capacity for Spectra Energy’s Maritimes & Northeast Pipeline, to carry more Marcellus/Utica gas into New England and (eventually) all the way to Nova Scotia, Canada. Much of the project is now done–except in Massachusetts where a critical compressor station planned for Weymouth is stalled (see Massachusetts Blocking Atlantic Bridge Pipeline from Completion). Weymouth itself along with a smattering of radical environmentalist groups filed a lawsuit against FERC, claiming FERC did a “shoddy environmental review” before approving the project, arguing FERC’s approval should be overturned by the court. On Tuesday FERC fired back asking the D.C. Circuit Court of Appeals to toss the frivolous lawsuit and let them get on with finishing this critical project…
    Read More “FERC Defends Atlantic Bridge Pipe Approval in DC Circuit Court”

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    Lib Group Didn’t Force Range to Consider Global Warming After All

    Sometimes there are happy endings! Two weeks ago MDN reported that a so-called church, the Unitarian Universalist Association (people who believe in everything, consequently they believe in nothing) had purchased $2,000 worth of Range Resources stock in order to propose a resolution to all shareholders at the annual meeting that forces Range to publish a report on how evil the company is for causing global warming (i.e. force the company to produce a report on their efforts to scale back methane emissions). We told you, based on reports, that the idiotic measure passed by 50.25% (see Liberal Groups Force Range, Anadarko to Consider Global Warming). Except it didn’t pass. The original count did not include “abstention” votes. An abstention is when someone intentionally or unintentionally does not vote. By law, abstentions are considered a “no” vote on shareholder resolutions. When the abstentions were added to the count, it tipped the scale in the other direction, meaning Range dodged a bullet–this year…
    Read More “Lib Group Didn’t Force Range to Consider Global Warming After All”

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    When Neighbors Go Bad: NY Forcing New England into Blackouts

    Last winter, from Dec. 26 to Jan. 9, the northeast and New England experienced an extreme cold snap. New England essentially ran out of natural gas needed to feed electric generating plants. The entire region came razor close to succumbing to rolling blackouts. The only thing that prevented the blackouts was the restart of 1960s oil-burning electric plants. During that two week period, New England burned through 2 million barrels of oil to keep the lights on. Scary. Although a number of circumstances conspired to produce this “perfect storm” that almost tripped over into blackouts, there is one main, towering, primary reason why it happened: lack of natural gas pipelines. And there is one main, towering, primary reason why there aren’t more pipelines to flow more natgas into New England: New York Gov. Andrew Cuomo. Andy has admitted, on camera, that his policy is to block any/every/all new natural gas pipelines (see NY Gov. Cuomo Says He’ll Block All New Gas-Fired Elec Plants). It is breathtaking hubris and arrogance. As we’ve pointed out, keep an eye on what’s happening in Canada with the Trans Mountain Pipeline project–where one province (British Columbia) refuses to allow a pipeline from a neighboring oil-producing province (Alberta) to cross through. It’s turned into a nasty civil war, complete with everything but bullets flying. The whole mess is enough to make Kinder Morgan, owner of the Trans Mountain system, sell it to the Canadian government (see Kinder Morgan Says No Thx to Canadian Civil War, Selling Pipeline). Sooner or later Maine, Massachusetts, New Hampshire, Vermont (on the demand side) and Pennsylvania (on the supply side) are going to take aim at New York for blocking important interstate pipeline projects like the Constitution and Northern Access. Retribution is coming, you can bank on it…
    Read More “When Neighbors Go Bad: NY Forcing New England into Blackouts”

  • Energy Stories of Interest: Thu, May 31, 2018

    The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Politicians still fretting over how/if to save PA nuke plants; Cuomo pipeline policies have devastated upstate NY; Alaska wants to build new 800-mile natgas pipeline; SandRidge fighting Carl Icahn takeover of board; can trucking and rail fix pipeline issues in the Permian?; can LNG cure the U.S. trade deficit?; reducing global energy turmoil with fracking; why American oil companies keep booming despite crazy swings in price; PTT shifts LNG focus to China; and more!
    Read More “Energy Stories of Interest: Thu, May 31, 2018”

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    Towns Compete in PA DEP Hunger Games to Grab $12.6M of ME2 Cash

    Que the music with dramatic drums, cymbals and trumpets. Camera A, zoom in on Secretary McDonnell. The whole state is watching. It’s time for the Pennsylvania Dept. of Environmental Protection (DEP) Hunger Games to begin! In February Sunoco Logistics Partners agreed to pay a massive (historically high) $12.6 million fine to the PA Dept. of Environmental Protection (DEP) for “permit violations related to the construction of the Mariner East 2 pipeline project” (see Sunoco LP Pays PA DEP $12.6M to Resume ME2 Pipeline Construction). Sunoco’s ME2 construction activities caused a few erosion issues here and some drilling mud leaks there–so-called “harms” to the environment. Surely some of the massive, historically high $12.6 million fine will be used to “fix” those problems, right? Wrong. Sunoco had to pay twice–pay to clean up the problems AND pay the fine. The fine was essentially a shakedown, Sunoco had to pay it or they would not be allowed to resume construction work on ME2. In April the DEP announced a new program to distribute the $12.6 million of fine money (see PA DEP Hunger Games Competition to Distribute $12.6M in ME2 Money). In Hunger Games tradition, the DEP is conducting a lottery for the 85 municipalities along ME2’s path, allowing those “districts” to submit begging proposals to request some of the money for programs in their district. The contestants have 45 days, from May 7 to June 20, to make a grab for the cash (i.e. submit a grant application). Here’s how one town in Lebanon County is preparing what they hope is a winning entry–their chance to grab some of ME2’s money…
    Read More “Towns Compete in PA DEP Hunger Games to Grab $12.6M of ME2 Cash”