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    FERC Won’t Extend Atlantic Coast Pipeline Tree Cutting Deadline

    Two weeks ago Dominion Energy asked the Federal Energy Regulatory Commission (FERC) for permission to extend tree cutting/felling season by an extra 45 days, from March 31 to May 15, in West Virginia, Virginia and North Carolina (see Atlantic Coast Pipe Asks FERC for More Time to Cut Trees). Due to restrictions for species like the threatened Indiana bat, tree cutting season is limited–from November 16 to March 31. ACP said it couldn’t meet the March 31 deadline due to a late start following state bureaucratic delays. In a presentation Dominion gave to North Carolina environmental officials a few months back, the company said if “we cannot start [pipeline construction] in time to ensure a full and efficient construction season and have to delay service by one year, the impact would be $1 billion.” Dominion maintains that worst case scenario has not yet happened. Following the FERC decision to deny extending the date for tree cutting, Dominion said they’ll shift things around and can still meet their contractual deadline of getting ACP up and running by the end of next year…
    Read More “FERC Won’t Extend Atlantic Coast Pipeline Tree Cutting Deadline”

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    The Critical Role of Subcontractors in WV Shale Industry

    Charlie Burd, IOGAWV

    A recently published interview with Charlie Burd, executive director of the Independent Oil and Natural Gas Association of West Virginia, yields new insights into the current status of the oil and gas industry in the Mountain State. One of those insights is the importance of subcontractors–what we call the supply chain–to the oil & gas industry in WV (and elsewhere). We often refer to producers or exploration and production companies as “drillers.” To be honest, it’s almost always a hired subcontractor that does the actual drilling. And subcontractors do a host (most of) the other pieces of getting a well up and running–everything from water deliveries for fracking to fencing around well pads to hauling away drill cuttings and brine. Burd talked about the key role subcontractors play in the process. He also said that 99.9% of the small, “mom and pop” independent producers (conventional drillers) that have been around for the past 150 years are now out of business in WV, since the rise of shale drilling. That’s a pretty startling statistic. Oh! And Burd explained the difference between “major” oil and gas companies, like Exxon and Chevron, and “independent” companies like Antero Resources and Cabot Oil & Gas. We always wondered what earned the biggies their name “the majors,” even though there are some “independents” nearly as large (in revenue) as the majors. We now know the difference…
    Read More “The Critical Role of Subcontractors in WV Shale Industry”

  • Other Energy Stories of Interest: Mon, Apr 2, 2018

    The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: FirstEnergy Generation bankruptcy puts OH, PA nuke plants in jeopardy; Atlantic Sunrise Pipe clipped for unauthorized form of drilling; PA DEP Secretary goes on the record with Platts; pig poop to the rescue in NC; DOE Sec. Perry praises Trump energy policies, LNG exports; U.S. heading for a natgas surplus; longer shale well laterals lead to more M&A activity; judge dismisses Exxon lawsuit to block AG climate change hoaxers; first Sabine Pass LNG cargo arrives in India; Europe’s biggest natgas field to close, permanently; German kicks out Russian diplomats while authorizing Russian pipeline; and more!
    Read More “Other Energy Stories of Interest: Mon, Apr 2, 2018”

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    Natural Gas Prices in Texas Permian Drop Below Marcellus/Utica

    The biggest oil play in the United States is the Permian, located in West Texas and southeastern New Mexico. Two weeks ago MDN warned readers that natural gas in the Permian, which is a byproduct of the oil wells drilled there, is increasingly competing with Marcellus/Utica gas (see “Free” NatGas in Texas Permian Changes Shale Gas Economics in M-U). The coming clash continues to grow. In a Bloomberg article published yesterday, we learn that the price of natgas in the Permian at major trading hubs is now lower than the price for hubs around the Marcellus/Utica, which is truly a first! We also get an ominous prediction from an analyst who watches these things, who said in the next three to four weeks, “natural gas prices in the Permian can go to zero because it’s literally a byproduct.” Free gas! As we pointed out in our previous post on Permian and gas prices, oil drillers can actually pay up to $2.36 per thousand cubic feet to dispose of the natgas coming out of Permian oil wells. That is, they can pay people to take the gas–as a cost of extracting the oil. Roughly one-third of the hydrocarbons coming from Permian wells is natgas. The biggest problem in the Permian for natgas is also the biggest problem in the M-U: lack of pipelines…
    Read More “Natural Gas Prices in Texas Permian Drop Below Marcellus/Utica”

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    Antero Resources Spent $1B in WV Last Year, Another $1B This Year

    Antero Resources is seriously in love with West Virginia. Antero is headquartered in Denver, CO but is totally focused on drilling for natural gas, NGLs and oil in the Marcellus/Utica. Antero owns over 484,000 net acres in the southwestern portion of the Marcellus Shale, and over 137,000 net acres in the core of the Utica Shale. Most of their acreage is in WV. Of the $1.3 billion the company spent last year, and plans to spend again this year, around $1 billion (per year) is spent on drilling in WV–close to 80%. Over the next five years, Antero says it will invest $6 billion in the Mountain State. That’s some serious love! As the technology gets better, it takes less time to drill. Antero said it used to take 30 days to drill an 8,000-foot well. Today? They can do it in one day. One of the secrets to Antero’s success in WV is their new Clearwater facility that recycles 98% of the frack wastewater (flowback and produced water) coming from Antero’s wells. Below is an article in which Antero gushes about their love (and future plans) for WV…
    Read More “Antero Resources Spent $1B in WV Last Year, Another $1B This Year”

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    Opponents Slandering Potter Co. Wastewater Facility Legally Warned

    Is it free speech to make “false, destructive and defamatory statements” about a company and the project it proposes to build? Is it OK to pretend to be a news organization when you’re really just a shill for Big Green groups, and is your “speech” protected–when it’s false? Members of the Seneca Indian tribe and faux news outlet Public Herald have been put on notice, legally, by lawyers representing the proposed Epiphany shale wastewater recycling facility in Coudersport (Potter County, PA) and driller JKLM to “cease and desist” from their slandering, smearing false statements about the Epiphany project–statements that are misleading the public. Those served the legal notice say it’s an attempt to silence their free speech rights. What do you think?…
    Read More “Opponents Slandering Potter Co. Wastewater Facility Legally Warned”

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    Lansing, MI Approves Borrowing $500M for Gas-Fired Electric Plant

    In December MDN brought you the news that the Lansing, Michigan Board of Water & Light (BWL) wants to build a brand new $500 million natural gas-fired power plant (see Lansing, MI to Build New 250 MW Gas-Fired Electric Plant). The new plant will generate 250 megawatts of electricity, create 1,200 construction jobs, and go online in 2021. It will replace (and retire) two BWL coal-fired plants. Out with old, in with the new. We’re interested in the project because it is a potential new demand source for Marcellus/Utica Shale gas. On Tuesday, BWL voted, unanimously, to approve borrowing up to $500 million to construct the project. They did so over the objections of a group of fossil fuel haters who apparently would rather sit in the dark rather than build a plant that uses a dreaded fossil fuel. BWL board members had to put up with the usual fossil fuel speechifying, and then proceeded to move forward like the adults they are, over the objections of the petulant children present…
    Read More “Lansing, MI Approves Borrowing $500M for Gas-Fired Electric Plant”

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    Free Pipeline Training Course in April in SWPA & Eastern OH

    The Gas Technology Institute (GTI) has previously offered a 100% free training program for those interested in a career building pipelines in the Marcellus/Utica region (see 4-Wk FREE Training Program Helps Unemployed Get M-U Pipeline Jobs and Still a Few Openings for Free Training for M-U Pipeline Jobs in SWPA). GTI is offering the same training program once again in April, at two locations: Armstrong County Industrial Development Council in Freeport, PA, and Belmont College in St. Clairsville, OH. Each location is limited to 20 students. If you are interested and live somewhere within driving distance of either location, what are you waiting for? Sign up before all slots are taken! Starting salaries for graduates “often exceed $50,000” and can lead to careers with salaries in the six-figure range (hey, where do we sign up?!). We have the details of how to enroll for FREE in this valuable training course–a course worth $3,500…
    Read More “Free Pipeline Training Course in April in SWPA & Eastern OH”

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    Riverkeeper, Big Green Groups Want FERC to Bend Rules for Them

    We are a country governed by the rule of law. Part of our system of laws (for better or worse) invests government bureaucracies with delegated power to make rules and regulations–which carry the weight of law. Children who are not disciplined (at home and at school) grow up to be adults who think silly things like rules don’t apply to them–because they don’t want them to. THE Delaware Riverkeeper falls into that camp. The Federal Energy Regulatory Commission (FERC) has rules and regulations in place to keep the agency from descending into chaos in reviewing and approving pipeline projects. One of FERC’s rules, which has been on the books for years, is that if a person or group wants to “intervene” (become an intervenor) in a project, they must file with FERC “in a timely manner.” FERC sets the amount of time, which varies with each project. It’s been our observation FERC gives at least 30 days, sometimes more, for folks to file to intervene. One of the sleazy strategies used by Riverkeeper is to get thousands of individuals (including children) to sign up as intervenors for a project in a quest to flood and overload the FERC system, slowing or stopping progress on a given project (see FERC Confirms “Intervenors” Slowing Down Pipeline Approvals). FERC has had enough. FERC commissioners have voted to tighten up the loosey-goosey way FERC has treated people and groups who file late to intervene. No more bending of the rules. In the past, Riverkeeper and others have filed to intervene weeks after the deadline for such action, and FERC has just added them as intervenors anyway. No more. Either Riverkeeper and their ilk file on time from now on, or they won’t be considered intervenors, which has them hopping mad…
    Read More “Riverkeeper, Big Green Groups Want FERC to Bend Rules for Them”

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    Tallgrass Energy Eliminating MLP – First “Casualty” of Tax Cut?

    Last week MDN brought you the news that the Federal Energy Regulatory Commission (FERC) had taken “significant action” to address the Trump tax cut legislation enacted last December (see FERC Takes Aim at Adjusting Pipe Rates in Light of Trump Tax Cut). FERC wants to be sure the tax cuts coming to electric companies and pipeline companies are passed on to consumers and pipeline shippers. The agency proposed new solutions to eliminate “tax loopholes” for natural gas pipelines. Closing these so-called loopholes will eliminate certain tax benefits for MLPs–master limited partnerships. Many pipeline companies (most) are organized as MLPs, which allows tax advantages to flow to investors. With certain tax benefits for MLP unitholders on the chopping block, all of a sudden some MLPs don’t look like such a hot investment anymore, at least on paper. Some analysts have speculated this may be the beginning of the end for MLPs. A few years ago Kinder Morgan got rid of all it’s MLP subsidiaries, combining them all into a single “C” corporation. Now, Tallgrass Energy, builder/operator of the mighty Rockies Express (REX) pipeline which flows Marcellus/Utica gas, is doing the same as Kinder did. Which causes us to ask the question, is Tallgrass’ MLP the first “casualty” of the Trump tax cut among pipeline companies?…
    Read More “Tallgrass Energy Eliminating MLP – First “Casualty” of Tax Cut?”

  • Other Energy Stories of Interest: Thu, Mar 29, 2018

    The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Hilcorp files for new drilling permits in Columbiana County, OH; FirstEnergy files to close 3 nuke plants in OH, PA; FERC scolds Rover over missed deadlines; bogus petition with 70K signature filed protesting pipelines in Virginia; LNG supplier helps fund Greensburg, PA shelter; Texas sinkholes from o&g drilling; why $3 natgas continues to elude the market; Chesapeake Energy is not “desperate” to sell assets; media ignores real Russian meddling–in U.S. energy markets; Saudis & Russians tag-team to fend off American shale; and more!
    Read More “Other Energy Stories of Interest: Thu, Mar 29, 2018”

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    MVP Pipeline Cleared to Begin Building Pipeline in Virginia

    In January, MDN reported that Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA–had received permission from the Federal Energy Regulatory Commission (FERC) to begin tree clearing and construction of access roads and construction yards in five West Virginia counties (see Mountain Valley Pipe Gets FERC Approval to Begin WV Construction). That was MVP’s very first permission to begin construction-related activities. It was the trickle. The flood gates burst open in February when FERC issued four new orders granting MVP permission to continue not only tree clearing and building roads, but also to begin construction of the actual pipeline itself in WV, and tree clearing/preliminary construction activity in VA (see FERC Grants MVP OK to Begin Pipeline Construction in Virginia & W.V.). The activity in VA was in just one county (Giles) and in one location. MVP still could not construct pipeline in VA pending required state permits. The situation in VA fundamentally changed this week. On Monday, the VA Dept. of Environmental Quality (DEQ) issued erosion, sediment and storm water control permits for the project–meaning actual pipeline construction can now begin. And yesterday, FERC granted MVP permission to construct pipeline not only in Giles, but also in Craig, Montgomery and Roanoke counties. MVP is now fully authorized in VA and there’s no stopping it…
    Read More “MVP Pipeline Cleared to Begin Building Pipeline in Virginia”

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    A (Very) Rough Method for Calculating Royalties on Cabot Wells

    Cabot Oil & Gas, one of our favorite Marcellus drillers, has just published a new PowerPoint slide deck presentation as part of an investor’s conference they attended earlier this week (the Scotia Howard Weil Energy Conference). Normally a new slide deck isn’t all that big a deal. However, thanks to MDN friend Chris Acker who pointed it out to us, there is some new information in the deck worthy of note. Back in December MDN brought you the news that Cabot had signed a deal to sell off their Texas Eagle Ford Shale assets in order to concentrate solely on the Marcellus (see Cabot O&G Sells Texas Eagle Ford Assets for $765M, Focus on Marc.). The slide deck notes that the Eagle Ford divestiture closed on Feb. 28th (slide #3). Also in the slide deck is a mention that Cabot plans to experiment with drilling “upper Marcellus” wells in the second half of 2018 (slide #11). Most (all?) of the wells they’ve drilled to date are “lower Marcellus.” A successful program of drilling upper Marcellus certainly bodes well for existing landowners with existing lower Marcellus wells–perhaps Cabot will revisit those pads to drill new wells? Slide #11 has some great information on it. We’ve used it to create a (very) rough royalty estimation calculator for Cabot landowners…
    Read More “A (Very) Rough Method for Calculating Royalties on Cabot Wells”

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    Antero Res. Considers Mining its Own Frac Sand to Cut Costs

    If you hang around the business world long enough (as we have), you notice certain trends. One such trend from yesteryear is companies integrating up and down the supply chain. Like when a widget manufacturing company buys the company that supplies it the raw materials used to make the widgets. Example: a car manufacturer buys the company that supplies it with plastic dashboards–and then buys the chemical company that produces the plastic to make the dashboards. And then the same car company, on the other side, buys the credit union that makes the loans to buy their cars! The company becomes integrated. But then the pendulum swings and in recent years, the trend has been about dis-integrating–spinning things off into their own self-contained units. Better to focus on one thing and do it well, rather than be like GE and spread yourself around to multiple industries and specialties. In the oil and gas world, Chesapeake Energy once owned its own oilfield services company (Chesapeake Oilfield Services)–which they later sold. One thing you don’t hear much about is shale companies vertically integrating and buying suppliers. However, Antero Resources, one of the biggest and best drillers in the Marcellus/Utica, is actively considering such a move. Antero wants to buy its own frac sand company as a way of controlling costs. Is it a good idea, or a bad idea?…
    Read More “Antero Res. Considers Mining its Own Frac Sand to Cut Costs”

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    Cove Point LNG Gets Ready to Ship First Marcellus Molecules in Apr

    Patris LNG tanker

    In early March Dominion Energy’s Cove Point LNG plant shipped its first-ever load of LNG (liquefied natural gas), although the gas itself was imported from Nigeria, used in testing the plant (see Cove Point Ships First LNG Cargo – But Not M-U Gas). Last week MDN told you that a BP-contracted LNG tanker, Patris, is on the way to Cove Point but will not dock until April 9th (see Cove Point LNG: BP Ship Coming for 1st M-U Pickup; India Wants Swap). The Patris will be the first ship to carry Marcellus molecules from the facility to distant shores. It now looks like we have confirmation, of a sort, that indeed the Patris will dock and load Marcellus LNG on April 9. That confirmation comes from Platts, which reports that on Monday feed gas (from the Marcellus) spiked up to 640 million cubic feet per day (MMcf/d), which is “the highest level in more than three weeks” of gas flowing into the facility. Here’s the latest on our continuing watch of Cove Point, a true game-changer for the Marcellus, and for companies like Cabot Oil & Gas that will send gas to the facility…
    Read More “Cove Point LNG Gets Ready to Ship First Marcellus Molecules in Apr”