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Expo/Industry events for the next few months

Utica Summit
October 11, 2016
Embassy Suites
Canton, OH
http://www.uticasummit.com/ 

Midstream PA 2016
October 13, 2016
Penn Stater Conference Center
State College, PA 
Limited seating- sign up early
http://midstreampa.com/

Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, Bakken and Niobrara Shale Plays 

Shale Insight, A Smashing Success!  Congratulations to Dave Spigelmyer and this team at the Marcellus Shale Coalition and its partners OOGA and WVONGA for superb conference.

Everything from opening reception on the roof of the David L. Lawrence Convention Center to Donald Trump’s closing remarks it was information packed conference.  I heard nothing, but very positive comments from all the attendees.

I came away from Shale Insight with the following observations:

  • Positive Vibe 
     
    • A number of E&P Company representatives stopped by our booth and everyone stated that they are bringing more rigs up to the Appalachian basin.  Some are coming up in the fourth quarter in 2016 and early 2017.
    • I spoke with some vendors who told me that they have a backlog of work for most of 2017.  The CAPEX budgets for 2016 are spent and everyone is waiting for 2017 budgets to kick in.  
    • For those vendors who do not have a backlog of work, they are seeing increases in bidding jobs
       
  • Where will the workers come from?  There is a serious concern about finding workers when the drilling picks up.  A session at the Shale Insight focused on finding workers and it was packed.  I’m not surprised.  We heard this same concern at our ShaleDirectories seminars early in the year.

    My hypothesis is that workers in Texas are accustomed to the boom and bust cycles in the oil and gas industry.  That’s not the case in the Appalachian Basin.  When the drilling was very active, a number of workers left very good jobs to work in the O&G industry.  Once their jobs were cut, they were high and dry and scrambled to find jobs.  They are not going to leave their current jobs when drilling activity increases.  To meet the job demands, you will see workers from TX, OK and LA coming back to the Appalachian Basin.  However, we know the companies are looking locally first.
     
  • Take the battle to the “anti’s” Kudos to the MSC for featuring speakers that educated the industry about how to combat those radicals committed to killing fossil fuels.  With all this good information, it’s incumbent upon us to aggressive address any issues that negatively impact the industry.

Trump at Shale Insight.  The U.S. needs an “America First” energy plan – and Donald Trump is the only presidential candidate who can make it happen.

Speaking Thursday in Pittsburgh at the Shale Insight 2016 conference and trade show (attended by Kallanish Energy), Trump promised more than 1,000 oil and gas professionals he would be the energy industry’s ally as president by lifting regulatory restrictions, streamlining the permitting process and welcoming construction of more pipelines.

“We need to be producing more energy to make America wealthy,” said Trump, who was interrupted by clapping numerous times during his roughly 25-minute presentation. “The U.S. is a treasure trove of energy and we need to lift the restrictions on energy.”

Trump claimed his energy plan annually would boost the country’s gross domestic product by $100 billion and create 500,000 new jobs and generate $6 trillion in new taxes over the next four decades.

The Republican presidential candidate said he would streamline the permitting process “turning American into a jobs magnet,” and place a temporary moratorium on all regulations.

“Over regulation costs $2 trillion a year,” according to Trump.

As he has throughout his campaign, Trump said he would fight for the coal industry and coal miners by rescinding a moratorium on new coal-mining leases on public land and conducting a “top-down review of all anti-coal regulations issued by the Obama administration.”

“Those policies are unfair to our people and our workers,” Trump said.

Trump said he would support expanding drilling on federal land and offshore areas where it’s currently restricted, he would eliminate laws which held back the energy industry, like the Clean Power Plan, and he would refocus the Environmental Protection Agency to do what it was founded to do: to make sure the country’s air and water was clean.

My Mistake in PA Permitting.  Last week, when I reported the permits in PA, I stated that there were no new permits.  In my reporting of permits, I do not report permits that are renewed.  

I want to thank a reader who brought to my attention that there were 19 PA permits issued in last weeks.  18 were new permits and one was a renewed permit.  These permits are included in the reporting of this week’s permits.

When you look at the permitting report, you will see that companies that have been quiet for a while are now permitting again.  This supports the rumors about drilling picking up.

Bullish Outlook for NatGas.  (Thanks, Bloomberg)  U.S. natural gas futures surged to more than $3 per million British thermal units for the first time in 16 months as unseasonably warm weather drove generators to burn more of the fuel than ever for this time of year.

The late-summer surge comes as more of the fuel is being burned to make up for lost power supplies while nuclear reactors and other plants shut for seasonal refueling and maintenance.

Gas producers Southwestern Energy and EQT were Tuesday's best performers among S&P 500 energy stocks.

The gas market is staging a dramatic comeback from March, when prices hit a 17-year low after a mild winter failed to stoke strong heating demand.

America's shale gas producers have scaled back drilling to reduce expenses, while blazing July and August heat helped trim a supply glut by spurring record consumption from power plants.

"Right now the market looks unusually strong and it doesn't want to back off," said Gene McGillian, manager of market research at Tradition Energy in Stamford, Conn. "We have forecasts for hot weather over the next week and the market continues to catch a bid."

Natural gas for October delivery surged 11.3 cents, or 3.9 percent, to $3.047 per million British thermal units on the New York Mercantile Exchange, the highest settlement since January 2015. They're up about 30 percent this year.

"Lower prices are finally starting to chew away on production," Het Shah, a New York-based analyst with Bloomberg New Energy Finance, said by phone Tuesday. "The Mid-continent is facing the most pressure, led by production declines in Texas, Oklahoma, and Arkansas."

Power-plant demand rebounded after tapering last week with milder weather. Gas deliveries to generators rose to 33.8 billion cubic feet for Tuesday, up 28 percent from the same time last year and a record high for the second half of the month, PointLogic Energy data show.

This comes as 23 nuclear units, accounting for about 23 percent of total capacity, are slated to shut for refueling in the three months through November, according to NukeWorker.com.

Meanwhile, production in the lower 48 states in September fell 1.8 billion cubic feet per day from a year ago, according to data compiled by Bloomberg. Gas inventories were 9.3 percent above the five-year average as of Sept. 9, compared with 54 percent in April.

Temperatures may be mostly above normal in much of the eastern U.S. from Sept. 30 through Oct. 4, according to MDA Weather Services. The high in Washington may be 81 degrees Fahrenheit (27 Celsius) on Oct. 4, 9 more than average, according to AccuWeather Inc. forecasts.

Prices are advancing amid "the realization of the tightness of the supply-demand balance," Tom Saal, senior vice president of energy trading at FCStone Latin America LLC, said Tuesday. "We still have some summerlike weather."

FERC’s Draft Impact Statement on Mountain Valley Pipeline.  The Mountain Valley Pipeline (from WV to VA) has been flying under the radar for many of us.  Here’s the draft and it looks like there are not too many issues that could delay the construction of it.

The Federal Energy Regulatory Commission on Friday issued its draft environmental impact statement (EIS) for the proposed Mountain Valley Pipeline, saying the controversial line would produce “limited adverse environmental impacts.”

In its nearly 3,400-page review (including 2,600 pages of appendices), FERC said the only exception to limited environmental impacts for the entire 301-mile line would be impacts on forest along the proposed route, Kallanish Energy finds.

Natalie Cox, a spokeswoman for Mountain Valley Pipeline, told the Roanoke (Virginia) Times newspaper the impact statement follows more than two years of project planning and development and collection of data from surveying activities.

It also reflects, Cox said, “the comments, considerations and concerns of landowners, community members, government agencies and local elected officials along the proposed route.”

As proposed, the 301-mile, 42-inch high-pressure Mountain Valley Pipeline would transport natural gas from Wetzel County, West Virginia, to another natural gas transmission pipeline in Pittsylvania County, Virginia.

The line will be constructed and owned by Mountain Valley Pipeline LLC, which is a joint venture of EQT Midstream Partners, NextEra US Gas Assets, Con Edison Gas Midstream, WGL Midstream, Vega Midstream MVP, and RGC Midstream. EQT Midstream will operate the pipeline.

With a vast supply of natural gas from Marcellus and Utica Shale, the Mountain Valley Pipeline is expected to provide up to 2 billion cubic feet per day (Bcf/d) of firm transmission capacity to markets in the Mid- and South Atlantic regions of the U.S.

The project will extend the Equitrans transmission system in Wetzel County to Transcontinental Gas Pipeline Co.’s (Transco) Zone 5 compressor station 165 in Pittsylvania County.

Pipeline opponents said Friday their review of the commission documents was just beginning, but there were expressions of skepticism about FERC’s analysis.

“FERC’s conclusion that adverse environmental effects of the MVP would be limited and will be satisfactorily mitigated by the applicant is ludicrous,” Rick Shingles, a member of Preserve Giles County, told the Roanoke Times.

How Trump Can Kill Obama’s EPA Regulations.  Donald Trump says he wants to roll back President Obama’s “job-killing regulations,” including the Clean Power Plan and the Waters of the U.S. rule. Bloomberg BNA’s Patrick Ambrosio asks a key question: Can he?

As president, Trump would have the authority to pull back already-issued rules, but in order to do so; he’d have to go through a full notice-and-comment rulemaking. That process would take “well over a year” at minimum, according to Susan Dudley, director of the Regulatory Studies Center at George Washington University. 

Trump could act faster by halting implementation and enforcement of Obama’s environmental regulations, while also offering a less vigorous defense of rules undergoing judicial review. 

If Trump were to pursue a formal rulemaking process to rescind environmental regulations, his administration likely would be targeted by lawsuits challenging their decision-making, according to observers. At that point, there would be two records supporting two different regulatory decisions: one record prepared by the Obama administration to support the regulation and a record prepared by the Trump administration supporting the decision to rescind the rule, according to Dudley. “There would most certainly be litigation over that,” Dudley said. 

While the rulemaking process necessary to formally rescind rules would take time, Trump could quickly order the EPA to shut down all efforts to implement and enforce Obama’s Climate Action Plan and other major environmental regulations, according to Professor Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia Law School. 

“It’s very time-consuming to repeal a regulation,” Gerrard told Bloomberg BNA. “It’s not at all time-consuming to stop enforcing it.”

Another $5 Billion Pipeline.  Four major pipeline construction companies have agreed to build the $5 billion Atlantic Coast Pipeline.

Atlantic Coast Pipeline LLC has signed a construction contract with Spring Ridge Constructors, a joint venture of the four companies, Kallanish Energy reports.

The companies include Price Gregory International, U.S. Pipeline. SMPC and Rockford.

The contract represents “another significant milestone” on the pipeline project, said Diane Leopold, president of Dominion Energy, in a company statement.

The 600-mile natural gas pipeline will run from West Virginia to Virginia and the Carolinas, transporting natural gas from the Marcellus and Utica Shale plays to markets.

The project must be approved by the Federal Energy Regulatory Commission.

Studies say the pipeline construction will create 17,000 jobs, $2.7 million in total economic activity and $4.2 million in average annual tax revenue for cities and counties along the pipeline.

The pipeline is being developed by four U.S. energy companies: Dominion, Duke Energy, Piedmont Natural Gas and Southern Company Gas.

Construction is expected to result in thousands of workers being hired in West Virginia, Virginia and North Carolina, the companies said.

Shell Getting Rid of 3 Tracts in PA.  A Shell subsidiary is ready to auction off three tracts of Marcellus Shale land in northern Pennsylvania, Kallanish Energy has learned.

The tracts, leased by SWEPI, together cover 8,234.5 net acres in Tioga, Lycoming and Potter counties. The acreage includes: 4,744 acres in northeast Tioga County; the Texas Creek acreage of 1,264.7acres in Lycoming and Tioga counties; and 3,225 acres in southeast Potter County.

The three leases are non-producing or held by production.

Lycoming County is No. 5 and Tioga County is No. 7 for Pennsylvania production. Potter County is not in the top 10 counties.

The deadline for submitting bids is Oct.4, according to EnergyNet, the company handling the auction.

For auction information, go to www.energynet.com

Eureka Hunter May Get Active.  Now that it is out of bankruptcy Eureka Hunter is starting to evaluate drilling in the Utica.  As you know, it had a good number of acres in the Utica.  With gas prices rising, it may a good time to get back in the game.  (RUMOR) 

New Secretary of DEP in PA.  Governor Wolf has nominated the acting DEP chief Patrick McDonnell as the state’s permanent top environmental regulator. If approved by the senate, McDonnell will replace John Quigley, who was ousted by the Wolf Administration last May over an email controversy. McDonnell has been serving in that role since Quigley’s departure.

Environmentalists praised Wolf’s decision, saying McDonnell will have an easier time working with the legislature than his predecessor, who was looked upon with suspicion by lawmakers loyal to the oil and gas industry, and apparently clashed with other members of the Wolf Administration.

David Masur, executive director of PennEnvironment, says he hopes McDonnell can help quiet the partisanship at work in Harrisburg, especially when it comes to protecting the environment.

“McDonnell has spent a ton of time in the regulatory world, in energy and environmental world,” said Masur. “He’s familiar with substance and process. He worked at the PUC, where he had to work with Democrat and Republican appointees alike, which is good given politics of Harrisburg.”

More Marcellus NatGas to Europe.  Switzerland-based/UK-registered petrochemicals group INEOS will receive its first U.S. shale gas shipment in the UK next week, following a cargo shipped to its ethane cracker in Norway earlier this year, Kallanish Energy reports.

The shipment aboard an INEOS so-called Dragon Class ship will arrive on Tuesday in Scotland’s Firth of Forth. The specially designed ship, which left the U.S.’s Marcus Hook terminal near Philadelphia, is part of a fleet of eight of the world’s largest ethane-capable carriers.

INEOS’s chairman, Jim Ratcliffe, believes shale gas from the Marcellus Shale Play will bolster the UK manufacturing sector. The cheap fuel will be used as both a feedstock and a power source at INEOS’s Grangemouth petrochemical plant in Scotland.

In April, INEOS and Pennsylvania-based independent producer Rex Energy signed a new natural gas liquids sale and purchase agreement covering ethane, propane and butane.

The NGLs will be transported through Sunoco Logistics’ Mariner East pipeline and exported by sea from the Marcus Hook terminal to INEOS’s crackers in Scotland and Norway.

NatGas-Fired Power Plant Approved.  Ohio regulators have approved a $1.1 billion natural-gas-fired power plant in eastern Ohio; a project that locals say will significantly boost the area.

The Ohio Power Siting Board gave the go-ahead to Boston-based Advanced Power Services on a 1,105-megawatt power plant in Columbiana County. It's enough to power about a million homes, the company said.

The Oregon Clean Energy power plant, an 860-megawatt natural gas-fired plant in Lucas County currently under construction, is among the new power builds in the state. The Ohio Power Siting Board approved another on Thursday.

The county, one of the prime spots for oil and gas development related to Ohio’s Utica shale play, has $4.4 billion of tangible assets, County Commissioner Tim Weigle said in recent regulatory testimony on the plant, operated by subsidiary South Field Energy.

“So they’re willing to invest one quarter of our entire worth in Columbiana County. That is extreme,” he said in support of the plan.

South Field plans to start construction in January 2017 and begin operations by January 2020.

The plant will have a peak of 550 employees during the build-out and employ 25 to 30 after construction.

Its power output is about a fifth of what Columbus electric utility American Electric Power Company Inc. sold last week to a private-equity tandem.

Gas-fired plants are quickly taking market share away from coal-fired plants closing across the country, including in Ohio, because of stricter environmental regulations and higher costs. The abundance of gas found in nearby shale plays has helped to make the plants cheaper to build and operate.

AEP says the new plants won’t be enough to replace the generation produced by Ohio’s shuttered coal-fired plants, which is part of its pitch to have its remaining plants in the state re-regulated by the Ohio legislature.

But there are at least six new Ohio plants in some stage of development. None of them, including four under construction, are from the state's traditional investor-owned utilities, leading developers to downplay the idea that there won't be enough generation.

Visit our Blog for daily updates on what’s happening in the oil & gas industry.

http://www.shaledirectories.com/blog/ 

Rig Count

  • Baker Hughes Rig Count the week of September 23, 2016
     
  • PA
    • Marcellus 22 up 1
  • Ohio 
    • Utica 14 unchanged
  • WV 
    • Marcellus 9 down 1
  • TX
    • Eagle Ford 37 down 1
  • TX & NM
    • Permian Basin – 201 down 1
  • ND
    • Williston – 28 up 1
  • CO
    • Niobrara – 16 unchanged
       
  • TOTAL U.S. Land Rig Count 488 up 6

PA Permits September 8 to September 22, 2016

        County                Township            E&P Companies

1.    Bradford                 Albany                Chief
2.    Bradford                 Albany                Chief
3.    Bradford                 Wilmot                Chief
4.    Butler                     Donegal              Rex
5.    Butler                     Donegal              Rex
6.    Butler                     Donegal              Rex
7.    Lycoming                Penn                  Exco 
8.    McKean                  Sergeant            Seneca
9.    McKean                  Sergeant            Seneca
10.    McKean                Sergeant            Seneca
11.    McKean                Sergeant            Seneca
12.    McKean                Sergeant            Seneca
13.    McKean                Sergeant            Seneca
14.    McKean                Sergeant            Seneca
15.    McKean                Sergeant            Seneca
16.    Susquehanna        Jackson             SWN
17.    Susquehanna        Jackson             SWN
18.    Susquehanna        Jackson             SWN
19.    Wyoming              Windham            Chesapeake

OH Permits for week ending September 17, 2016

County            Township                E&P Companies

1.    No permits issued this week.

Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson vera@shaledirectories.com 570.337.7149

Northeast Supply Enhancement