Preview NGI’s Awesome 2018 Shale Play/Pipeline Map
Just in time for Christmas (or Chanukah, or Kwanzaa)…NGI has just released our favorite map, the 2018 Map of Shale/Resource Plays & North American Natural Gas Pipelines. When MDN editor Jim Willis began working in the natural gas market full-time in 2012, he learned from some of the best in the business–the incredibly talented people at Natural Gas Intelligence (NGI). One the key lessons Jim learned early on in working with NGI is that ours is a market driven by price. And not just one price! Yes, the Henry Hub in South Louisiana is the most quoted price point in the world when it comes to natgas. Indeed, it forms the basis price against which all other trading points are measured. But Jim learned early on there isn’t just one price for natural gas, there are many (hundreds!) of prices for natural gas, because natural gas is traded at hundreds of different locations along pipelines, all around the country. When Jim was being taught about the markets and prices and why and where drillers decide to drill, driven by price, one of the key resources used to teach Jim was the NGI map. It was a revelation that made a lasting impression when Jim’s tutors walked him over to the NGI map hanging on the wall and pointed out all of the different shale plays, pipelines, and trading points along those pipelines. Suddenly, the complex world of natgas with its many moving parts snapped into place. It was now understandable. NGI’s wall map is the tool that did that for Jim. Perhaps it can do the same for you. NGI typically issues the map with updates every year or two. The 2018 edition has just been released, with important updates. If you work in, or have an interest in, the natural gas market, give yourself the one gift that will keep on giving for years–an NGI map…
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An obscure committee of individuals will begin to wield big power over Pennsylvania’s natural gas (and oil) gathering pipelines beginning next year. In just about every state in the country, before you start digging a hole in the ground for some reason (water well, septic system, laying an underground electric line, etc.)–the first thing you do is call 811 or some similar phone number. The “one call” or “first call” reaches a state-authorized (not necessarily state-run) office where they have, on file, maps detailing any kind of underground cables, pipelines and other infrastructure. If such underground structures exist, a representative of the owner for the underground line will, if necessary, stop by and mark the areas so when you do begin digging, you don’t hit it. Makes sense. A bill introduced last year (in 2016) in the Pennsylvania legislature “enhances” the existing 811 law in PA. One of the “enhancements” is that it removes an exclusion for low-pressure natural gas gathering pipelines from being required to be part of the 811 system, mainly lines run to low-producing conventional gas wells. The bill was opposed by the Pennsylvania Independent Oil & Gas Association (see 
Weak-kneed, swamp-dwelling politicians from the Philadelphia area continue to ratchet up the noise on stopping all work for the Mariner East 2 Pipeline. State Sen. Andy Dinniman (Democrat from the 19th District) and State Sen. John Rafferty (RINO from the 44th District) say the impacts of ME2’s construction are “unacceptable.” A few of their loudmouthed constituents (mostly likely members of Big Green groups) are complaining to these weak-kneed politicians and in turn the politicians have introduced four new bills in the PA Senate that will not do a @#$% thing about ME2, but will potentially stop future pipeline projects in the state. The aim of the bills is to tie up pipeline projects with so much red tape in various reviews, and by paying new fees for so-called “safety” measures, as to make the pipelines unbuildable. Here’s the latest effort from the Philly area to derail the Marcellus miracle in PA…
Two African-American Marcellus Shale natural gas workers in the Williamsport, PA area claim they were fired, twice, based in part on their race. The two filed a lawsuit against STI Group (a staffing agency) and Chesapeake Energy. The case was thrown out by U.S. Middle District of Pennsylvania Court, but later reinstated on appeal by the 3rd Circuit Court of Appeals. Rather than let the case drag out endlessly, STI and Chesapeake have just settled it. The amount of money they had to pay to make it go away was not disclosed. Workers are hired and fired all the time. Ours is a boom/bust industry. Was this really a case of racism? Or just a case of boom and bust? You read the details and decide for yourself…
Every now and again MDN editor Jim Willis attends a conference or seminar that reminds him how parochial we in the natural gas industry sometimes are. We often (understandably) have our heads down, focused on who’s drilling where and fretting over how we’ll get that gas to market. Sometimes it’s good to lift your head up and observe the entire energy landscape. Natural gas is one piece of the puzzle. An important piece, to be sure! But still, just one piece. Trends in coal, nuclear, solar, wind, hydro–they all play a part in the larger picture. The world of energy is dynamic and changing. New solar plants going up in Japan actually DO have an impact on Marcellus gas production–because that means Japan may decrease its LNG imports–which potentially would come from our LNG exports. You get the picture. This past May the Center for Strategic & International Studies (CSIS) held a one-day workshop with government, industry, and policy experts, to explore the outlook for U.S. natural gas markets in the global energy landscape. In November they condensed the material from that workshop into a report. Below is a full copy of that report. This will help you (as it does us) think about the bigger picture and where we here in the Marcellus/Utica fit into that picture…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: MSC president has ‘cautious optimism’ for 2018; natgas prices for consumers decline sharply in WV over last 10 years; anniversary of Gov. Cuomo’s Upstate choke hold; NY wants to evict oil tank rail cars; Cheniere’s Corpus Cristi LNG export plant 77% done; surge in US shale hedging will boost drilling in ’18; tax reform benefits energy markets big; Saudi Arabia shopping for US shale assets; and more!
Deals to lease land for Marcellus and Utica Shale drilling happen on a regular basis–even today. Perhaps not as much as several years ago when large deals cut by landowner groups were headline news. But lease deals still happen–you just don’t hear about them because they are private deals (deal terms are not recorded at the county clerk’s office). However, every now and again a public entity–a town or school–will lease land for shale drilling. And that IS a matter of public record. When we spot such deals, we like to bring you the details. Such a deal was cut on Monday, by the Ohio County Board of Education. The Board of Ed signed a deal with American Petroleum Partners (from Pittsburgh) to lease the 66 acre Wheeling Park High School campus for shale drilling–under (not on) the campus. Which is so cool for a number of reasons. First of all, the deal includes a $6,000 per acre signing bonus, and if/when the gas begins to flow, an 18% royalty. Second of all, it’s a school! How many times have we read about nutjob anti parents with their knickers in a twist over putting a shale well more than a half mile away from a school, like we heard about endlessly from those in the Mars School District (Butler County). It was a long, hard fight, but we eventually won (see 
A Bradford County, PA judge has turned down Chesapeake Energy’s attempt to wiggle out of a royalty lawsuit on a technicality. However, the judge also punted the case to a higher court to settle what he calls “novel questions of law”–rather than spending more time and money on such issues at the county court level. This is good news for landowners in Bradford County who have been shafted by Chesapeake’s royalty scheme to shift the cost of piping and processing to landowners by using inflated values for those services. In December 2015, Pennsylvania’s felony-indicted Attorney General, Kathleen Kane (now gone), brought a lawsuit against Chesapeake Energy, Anadarko and Williams accusing them of, among other things, royalty fraud (see 
While Buffalo “Marcellus” Bills owner Terry Pegula’s JKLM Energy has been “steadily increasing activity” in Potter County, PA (northcentral PA) grabbing headlines, another company, National Fuel Gas (NFG) subsidiary Seneca Resources, is also active in Potter and several neighboring northcentral PA counties (Cameron, McKean, Elk, and Lycoming). We spotted a pair of stories in a local newspaper recounting Seneca’s activity to date, and outlining plans for the future. One statement in particular stood out for us: Seneca will be “shifting to 100-percent Utica development by the end of this fiscal year.” At first blush, you might think “end of fiscal year” means by Dec. 31, 2017. However, NFG and subsidiary Seneca operate on a strange fiscal year. Fourth quarter 2017 (Oct-Dec) is NFG/Seneca’s first quarter 2018 fiscal period. Since the quote about focusing 100% on PA Utica drilling came at the end of November, we interpret the quote to mean “Seneca will be 100% focused on the PA Utica by September 2018.” At any rate, let’s not get caught up in semantics and timing. The takeaways from the pair of articles below, which appeared about a week apart at end of November/beginning of December, are: (1) Seneca is shifting to 100% Utica drilling; (2) Seneca spent 60% more on drilling in 2017 than 2016; (3) Seneca is currently running either 1 or 2 rigs, depending on which quote from which story you read; and (4) between royalty payments, impact tax payments and money spent with local PA businesses, Seneca has now spent nearly $1 billion on shale drilling–all of it in northcentral PA…
For months Dominion’s top brass has signaled that the country’s newest LNG export facility, Cove Point (situated along the coast of Maryland), would begin full commercial operations “by the end of this year” (see 
A group of landowners in Ohio calling themselves the Coalition to Reroute Nexus (CORN), whom we affectionately call CORNballs, filed a lawsuit in federal court in May against the NEXUS pipeline project (see 
The Millennium Pipeline stretches ~244 miles from Independence in Steuben County, NY to Buena Vista in Rockland County, NY. The Millennium, which is supplied by local production and storage fields and interconnecting upstream pipelines, serves customers along its route in New York’s Southern Tier region and helps meet the energy needs of northeast markets. In August 2016, the Millennium filed an application for what it calls its Eastern System Upgrade (see 
It’s full speed ahead for Mountain Valley Pipeline (MVP)–a $3.5 billion, 303-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. In October, the Federal Energy Regulatory Commission (FERC) gave final approval for the project (see 
By our reckoning, Antero Resources’ $275 million wastewater recycling facility in Doddridge County, WV is now operational (see 
Looks like the Utica/Marcellus has its own brand of beer! Who knew? We spotted an article about a small startup called Shale Brewing Company–saying the company is “back.” Back from where? We didn’t know it existed and had left, let alone that it’s now “back.” The company produces microbrews with names like “Cold Rolled Ale” and “Roughneck Red.” Hmm, we thought that sounded intriguing, so we kept digging. We found information that Shale Brewing Company was started by shale co-workers who had “a passion for easy drinking brews.” The company, started in 2014, “has had a couple of starts and stops since its early days as a nanobrewery.” But once again it’s back–this time making batches of beer in downtown Canton, OH. Currently it’s hard to find a bottle of Shale Brewery’s beer, but there are a few locations around Canton where you can score a six pack…