The following Shale Directories Members are OPEN for BUSINESS during COVID-19 related shutdown.*
Support them when and how you can!
Allison Crane & Rigging
American Energy Fabrication
EJ Breneman, L.L.C.
Frontier Group of Companies
Furbay Electric, Oil & Gas Division
Green Valley Seed
HYTORC Penn Ohio
Inland Tarp and Liner
MJ Painting Contractor Corp.
Mansfield Crane Service
Marshall County Co-Op – Southern States
Oglebay Resort and Conference Center
Skycasters Converged Wireless
Zimmerman Steel and Supply Company, Inc.
*list subject to change
Shale Directories Conferences
8th Annual Upstream PA 2020
New Date: February 4, 2021
Toftrees Golf Resort
State College, PA
8th Annual Utica Downstream
New Date February 25, 2021
Holiday Inn at Belden Village
North Canton, OH
Appalachian Basin Real Estate Conference
New Date: March 25, 2021
Hilton Garden Inn Pittsburgh Southpointe
NEW Appalachian Hydrogen Carbon Capture Conference NEW
April 8, 2021
Latest facts and rumors from the Marcellus, Utica, Permian, and Eagle Ford Plays
Good News on PTTGCA Cracker. A U.S. subsidiary of state-owned Thai oil and gas company PTT PCL said on Friday that it was focused on finding a partner for its proposed petrochemical plant in Ohio that will turn ethane into plastics.
“The focus of the project is finding a partner. There are very substantive conversations going on with a number of companies that the project team feels good about,” said Dan Williamson, a spokesman for the project.
He said he could not share the names of those companies at this time.
Williamson also said the team was in the process of meeting with members of President Joe Biden’s administration to brief them on the benefits of the project, which will cost an estimated $10 billion to build and create hundreds of full-time jobs and thousands of construction jobs.
He also noted that renewables would be part of the project.
Last summer, PTT’s PTT Global Chemical America (PTTGCA)subsidiary delayed making a final investment decision to build the ethane cracker from the first half of 2020 to the first half of 2021 due to the COVID-19 pandemic.
Williamson said the company still hopes to make a final investment decision during the first half of 2021 but noted that time frame is a “reasonable hope” and not a “set in stone” prediction.
If it were not for the pandemic, the company has said the plant would likely already be under construction.
The ethane cracker is designed to produce about 1.5 million metric tons of ethylene per year and will take 4-6 years to build.
In addition to PTTGCA’s project, Royal Dutch Shell PLC is building an ethane cracker nearby in western Pennsylvania that is expected to enter service in the early2020s.
TX Methane & Flaring Coalition Commits. Industry doubles down on efforts to reduce flaring. Under pressure from Texas lawmakers and the Biden administration, an oil industry coalition announced a goal yesterday of ending gas flaring. The Texas Methane & Flaring Coalition, made up of trade groups, oil majors and production companies, said in a statement it supported eliminating routine flaring in the oil field by 2030. Although the group didn’t lay out details on how its members will cut their emissions, it’s a significant policy change for the industry in the biggest oil-producing state.
Bill Gates Supports CO2 from NatGas. Bill Gates, DOE eye low-CO2 hydrogen made from natural gas. E&E News. An Energy Department-backed startup is promoting a new way to slash emissions from hydrogen production without ditching natural gas, and it’s tapping into funds from Bill Gates’ clean energy investor group and other major energy companies. The startup, C-Zero Inc., said yesterday that it had secured $11.5 million in an initial round of fundraising.
CNX Reserves Are Up. CNX Resources Corporation CNX announced that it has increased total proved reserves by 13% year over year to 9.55 trillion cubic feet equivalent (Tcfe). The company added 2,247 billion cubic feet equivalent (Bcfe) of proved reserves through extensions and discoveries, which helped it in replacing more than 440% of 2020 net production of 511 Bcfe. CNX Resources’ proved reserve has a reserve life ratio of 18.69 years, based on 2020 production.
CNX Resources’ strong performance is based on stable production from Marcellus and Utica shale assets. Production from these shales enables the company to meet its production goal. Replenishment of production through the addition of new proved reserves will allow the company to sustain momentum over the long term.
Strong Natural Gas Proved Reserves
Lowering emissions while producing electricity and stringent environmental regulations on controlling emissions are expected to drive demand for natural gas. Natural gas is widely used to produce electricity due to its clean burning nature and in turn benefits the company.
CNX Resources’ 94.6% of the proved reserve is natural gas. Moreover, the company has a very low-cost structure. Drilling and completion costs incurred in 2020 for extensions and discoveries were $480 million. Finding and development cost of the added proved reserves stands at 21 cents per thousand cubic feet (Mcfe), which will give the company a competitive advantage.
Raised Proved Reserves
CNX Resources — through its efficient technology — has been able to explore and expand proved reserves annually for the last five years. At 2016-end, proved reserves of the company were 6.25 Tcfe. At 2020-end, the metric totaled 9.55 Tcfe, reflecting an increase of 52.8% in the last five years.
Over the last five years, it was able to lower average cost per Mcfe to $1.64 at 2020-end from $2.32 at 2016-end.
Chesapeake’s Out of Bankruptcy. Chesapeake Energy Corp., the once-iconic energy explorer that helped ignite the American shale-gas boom, is emerging from bankruptcy protection a shadow of its former self. And in a way, that’s just fine with its boss.
“Shale has been marked by growth, and growth for all the wrong reasons,” Doug Lawler, the company’s chief executive officer, said in an interview. “What we see going forward is a new era for shale.”
The driller exited Chapter 11 protection on Tuesday. Long gone is co-founder and ex-CEO Aubrey McClendon, who died in 2016, three years after he was forced out in a Carl Icahn-led boardroom revolt. Also consigned to history is Chesapeake’s spot in the pantheon of premier U.S. energy producers like Exxon Mobil Corp. and Chevron Corp. The company lost most of its acquisitive swagger as it grappled with the fallout of ill-timed deals that saddled it with a crushing debt load.
These days, Chesapeake is slimmed down, chastened and looking to make its way in a shale industry that has gone through a painful evolution. Lawler, who’s led the company since 2013 (and who says bankruptcy could have been avoided if it wasn’t for 2020’s oil price crash) has overseen a reduction of 90% of its workforce. Just last week, the company made another round of job cuts at its Oklahoma City-based campus, and moved to redevelop the expansive site, much of which is now surplus to require.
Shale pioneer kept drilling during bankruptcy
Chesapeake is also pledging to produce free cash flow, an increasingly common mantra in shale, which has been heavily criticized by shareholders for prioritizing production growth over investment returns. Their opprobrium is understandable: In the past decade, the sector saw more than $300 billion in losses. Lawler, 54, said shale’s cash-burning days are done.
“They’re absolutely over,” he said. “The investors and market demand it. It demands that we return more cash to shareholders and that we have greater discipline in our business. It also demands improvements in ESG.”
Chesapeake stock surged 16% to $49.97 at 9:44 a.m. in New York on its post-bankruptcy debut Wednesday.
Lawler, a former chief of overseas exploration at Anadarko Petroleum Corp., dismantled the cult of personality that had prevailed at Chesapeake even after McClendon’s departure and instituted an austere, no-nonsense focus on financial returns. Under his tenure, Chesapeake cut its debt by more than half.
But the turnaround was too little and too late given the demands on the company’s cash by debtors just as the pandemic paralyzed economies — and energy consumption — around the globe. Chesapeake sought bankruptcy protection in June, shouldering more than $9 billion in debt.
The filing came just months after the company refinanced billions in debt. During the case, noteholders and other unsecured creditors claimed Chesapeake was undervaluing much of its undeveloped real estate and demanded a higher payout.
U.S. Bankruptcy Judge David Jones sided with the company and approved Chesapeake’s reorganization plan over the committee’s objection. But Jones did find that Chesapeake was worth about $5 billion, hundreds of millions more than the company’s estimate.
Chesapeake plans to use $1.3 billion of fresh financing to focus on gas drilling in Pennsylvania’s Marcellus Shale and the Haynesville region of Louisiana. The company is also pledging to eliminate flaring — the intentional burning off of excess gas at remote well sites — by 2025 and to achieve net-zero greenhouse-gas emissions by 2035.
“What’s clear from the development plans, is that Chesapeake will become a natural gas growth company anchored by the Marcellus and Haynesville while the oil assets are harvested for free cash flow,” Josh Silverstein, a Wolfe Research LLC analyst, wrote in a note to clients.
Amazon Buying NatGas Truck. Amazon orders hundreds of trucks that run on natural gas. Amazon.com Inc has ordered hundreds of trucks that run on compressed natural gas as it tests ways to shift its U.S. fleet away from heavier polluting trucks, the company told Reuters on Friday. The coronavirus pandemic caused delivery activity to surge in 2020, with truck volumes exceeding 2019 levels on average while passenger car traffic fell. But that increase in road activity means more pollution, as heavier-duty trucks emit higher levels of greenhouse gases than passenger vehicles.
Plastics Industry Association President and CEO Supports Shale Energy. (Thanks, Jim Willis for a fabulous article) The 8th Annual Utica Downstream Conference will be held on Feb. 25 in Canton, OH. MDN editor Jim Willis had the opportunity to interview one of the keynote speakers, Tony Radoszewski, President & CEO of the Plastics Industry Association, in December. Tony assumed the role of president & CEO in early 2020, just prior to the pandemic. Jim spoke to Tony about his upcoming talk, to get some insights into the state of the plastics industry in America in general, and in the Appalachian Basin in particular. It was a fascinating discussion.
You’ll find Tony Radoszewski (pronounced rad-ah-chef-ski) is a big fan of the shale oil and gas industry. Shale and plastics are tightly integrated. He’s also a fan of recycling and reusing plastics in creative ways.
The following interview is lightly edited for clarity.
MDN: What is the outlook for the plastics industry as the result of the pandemic and other recent trends, particularly in the northeast and in Ohio?
Tony: You can make the argument that COVID was a big “shot in the arm” for our industry. The amount of personal protection equipment is predominantly made of plastic, whether it’s face masks, ventilators, you name it. And then the downstream effect of the pandemic. People are eating out and getting food delivered. Typically food is delivered in plastic bags and contains foam styrene containers to keep it warm. It’s a short-lived benefit because when the pandemic is over this demand will die down.
What the pandemic did do is help us to balance a part of our industry that was down–the automotive industry. A fair amount of plastics goes into automobiles as you might imagine. Something like 40% of the components in autos is plastic, not by weight but by components. The auto industry was down in the third and fourth quarter of 2019–it was one of those things we were just trying to hold on to. Fortunately, that’s now coming back. That’s good news for us.
Another sector where demand is up is housing, and that may be due in part to COVID because people are looking to buy houses and expand their existing homes. Some people are moving out of the city because they no longer have to live there for work. With the housing increase, our vinyl siding business is way up. Resilient flooring is way up, which is basically made out of vinyl. So you’ve got a lot of good things in the housing sector.
Plastics production increased 11.9% in October, which is much improved from the 6.6% decline we saw in April. Everything tanked in April globally, but we’ve come back very strongly. If you look at plastics material and resin manufacturing overall, it was up to 87.9% which was just barely below the 88.2% in January before COVID hit. So we recovered pretty nicely all things considered.
In Ohio, Pennsylvania, Michigan, in that whole area a lot of our equipment manufacturers are based there. The people who make the steel products that process plastics. What we’re seeing is that shipments of machinery increased in the third quarter which is very good. It was a 15.8% increase following a 4.5% increase in the second quarter so we’re seeing this beautiful trend coming up for demand in equipment, and that’s because the demand for plastics is up. Manufacturing and processing in the Ohio Valley and in Pennsylvania are very strong right now.
MDN: When you think about shale energy and plastics, what is the Plastics Industry Association’s view on shale energy?
Tony: We love it! And you can quote me on that! I’ve been in the plastics industry my entire career; I’ve spent 42 years in this business. With that you see trends. Seven or eight years ago if you went to any technology conference, they would tell you that there’s not going to be any more growth in plastics reactors in North America. There’s not going to be any more growth in crackers. None of that, because the cost of energy was so weighted to the Middle East. The advent of fracking and horizontal directional drilling was a game-changer. In 2017, there was somewhere around 11 billion pounds of plastics production added, on the order of a 50% increase in North America. This was in a location where most said you would not have an increase! With the United States being basically the lowest-cost producer of energy in the world (save for the Middle East), that has made us a highly competitive producer.
Plastics in North America are exclusively generated from natural gas rather than from liquids as they are in Europe and parts of Asia, so that’s very beneficial for us. It’s made us the lowest-cost producer of plastic products in the world.
MDN: Given the high demand to produce PPE [personal protective equipment], and given the impact of the storms we had in the Gulf of Mexico, what effect has that had on plastic pellet pricing and the price of plastic products being produced?
Tony: That’s a complicated question. You also have to look at the increase in the production of plastic, the raw material, which is based on an export market. We produce more plastic than we can consume as a country. Look at the downturn in the economy based on COVID, look at restrictions for people who can’t go to work and so can’t produce. I would suspect (I don’t have the exact numbers) the price of materials–because of supply and demand, because demand went down and because supply was still cranking up–it would have an adverse, negative effect on the price. It’s positive for the processor but not so great for the producer. As we get on the road to recovery, our numbers are looking good.
Price depends on what plastic you’re talking about. There’s only one aluminum, like the aluminum in a can. But with plastics, there are seven major types of plastics, like polyethylene, polypropylene, nylons–all used in specific applications. The quantity of those materials is based on overall demand. Most expansions in demand have been for polyethylene and polypropylene.
So I would say right now, prices are good from the processors’ standpoint, those buying plastics, and for the consumer who’s buying the final product. We’re in a very good place with that. I would expect it to continue for the foreseeable future.
MDN: From time-to-time MDN writes about the connection between shale energy, plastics, and the environmental movement. We’ve heard some environmentalists use the blanket statement that plastics are ‘bad,’ like oil and gas is ‘bad.’ We think such a view comes from a minority of the environmental movement at this point. Do you hear from those who say “plastics are killing the planet” and that sort of sentiment? Is that a big consideration for your association? Are you worried about that sort of thing? And how do you counteract those arguments?
Tony: We are concerned. It’s a major focus of our association. The advocacy on behalf of plastics is one of the key cornerstones of our association. You mentioned it’s a minority, but it’s a very vocal minority. They get the ears of a lot of sympathetic followers in the media and left-leaning politicians. I’ll give you an example.
We had an interview yesterday with a Congressman from southeastern Virginia. He heads up the black caucus and a subcommittee on the environment. It’s the first time we’ve had a chance to visit with him. Again, one of the “blessings” of COVID is that it’s actually easier to see a Congressman or a Senator than it was when such meetings were in person. We had the Congressman’s three staffers and him on a call with myself and two of our folks from our government affairs team. We talked about this very issue. “We” (the collective we) live longer, healthier, and better because of plastics. From the moment you wake up to the time you go to sleep you are touching plastics throughout your entire day. Imagine a world without it!
What critics focus on is the solid waste problem. I’ve said this many times: People are slobs. I walk three miles every morning along a walkway. There are trash cans all over the place. And yet, 10 to 15 feet away I see a Gatorade bottle, I see a plastic bag or a soft drink cup. What we have is not a plastics problem per se. There’s so much plastic because people want it. Nobody is jamming plastics down your throat. People buy it because it’s convenient, it’s inexpensive, it’s sanitary, your food is wrapped in it, it preserves it longer, all those good things. That’s why there’s so much of it.
What we have to do is build a better infrastructure to handle plastic waste. When you have these different types of plastics, it’s a lot harder to separate and get it into the right recycle stream. But our industry has invested billions of dollars in order to help improve that–money spent on technology to sort and separate plastics at municipal recovery facilities. That’s where our focus is.
People want to ban products like plastic bags and straws. Nobody likes drinking from a paper straw! Nobody. So that’s really not the answer. The answer is proper disposal of plastics and awareness of everyone’s individual responsibility to keep the planet clean. We’re working on the mechanisms to recycle, reuse or repurpose those materials. That’s where we’re actively engaged at this point.
MDN: A few months ago I [Jim] virtually attended the Shale Insight Conference held by the Marcellus Shale Coalition. Hillary Mercer from Shell was one of the speakers. Mercer is the person in charge of building the cracker plant in Beaver County. One of the things she talked about was recycling and Shell’s emphasis on recycling. Not only will they make the plastic pellets but they also want to be involved on the other end with recycling. She mentioned something that the layperson doesn’t hear all that often which is there are a couple of different kinds of recycling. There’s mechanical recycling, where you grind plastics up, but she said every time you grind it up the molecules degrade a little bit more. Then there’s pyrolysis or chemical recycling. What can you tell us about chemical recycling?
Tony: We like to call it “advanced recycling.” In advanced recycling, you take a plastic product back down to its original molecules. That technology has just leaped from the bench to scale. Chevron Phillips is the first one to announce they have a full production capability for advanced recycling. You hit something on the head. You might think chemical companies would be the last people who want to support this stuff but they are right there at the top. They realize the importance. Sure it’s a public relations campaign, but it’s also the right thing to do.
We also say this quite a bit: We see a lot of value in plastic scrap. Whether it’s recycled back into what it was before or whether it’s recycled into something different. A lot of the clothes we wear come from PET bottles. The insulation for winter-wear, that fiber is all from PET bottles. It’s a great opportunity.
The NGOs are trying to force us into recycling plastic back into the same exact thing it came from. As you mentioned, sometimes that’s impossible. But you can make lawn furniture out of it. You can make resilient flooring out of it. You can make insulation out of it. Whole different ways of reusing it. So we’re promoting that, and the resin companies are actively behind it and support it because it’s the right thing to do.
MDN: As we’ve often heard and said, we live in the same communities. We don’t want all this plastic waste. We live on the same planet. It’s not in our best interest to allow this to continue. We care, as humans, about this stuff.
Tony: I testified last October at a subcommittee meeting and I made a very clear point of it. We hire over a million people in our industry in the United States. We are the eighth largest industry in the country. Our people don’t wake up every morning thinking, “How can we pollute the planet?” We are people who like clean air, clean land, we like pristine parks and recreation areas.
MDN: It’s the same with the shale industry, with drilling and pipelines. The shale industry wants to be safe and do it right.
Tony: To that point, plastics play a very important role in fracturing and drilling. Firstly, in moving water to drilling sites. Quite of bit of water is moved through plastic pipes. And all the well sites are built for environmental standards. Drilling pads typically use polyethylene pond liners–a thick sheet of polyethylene built around the pad to protect the environment.
After a well pad is built and gets shrunken down to a fourth of its original size, we have members who have built plants right in the Marcellus area to reprocess and recycle that excess film right away.
MDN: Reshoring, bringing manufacturing back to the United States from other countries. Do you see that happening? A lot? A little?
Tony: A lot. There’s a lot of moving parts to that issue. A number of years ago I sat on the board of directors for the Council of Manufacturing Associations. That’s a part of NAM, the National Association of Manufacturers. Jay Timmons, the CEO of NAM, made a statement prior to the 2016 election. He said if you remove burdensome regulations–not all regulations (we’re for worker safety, clean air, all those things), but there’s a whole host of burdensome regulations–if you remove those, the United States becomes the lowest-cost producer in the world because of our efficiencies and modern equipment. What happened in the Trump Administration, one of the key things he ran on, was the significant reduction in regulations. I think his campaign said for every new regulation two would be eliminated. I think the number got up to eight, at one point in time! What happened is regulations were removed and taxes were lowered. The U.S. is one of the highest-taxed manufacturing entities in the world. When taxes came down and burdensome regulations were eliminated, people who went to manufacture in Asia, China, Vietnam, Southeast Asia, wherever, realized they would rather have their facilities close at hand. Quality issues are more easily handled closer to home, and there’s less loss of intellectual property.
After China was admitted to the WTO [World Trade Organization] in 2001, a lot of manufacturing went over there–a bad thing for us but a good thing for China. What happened is China developed a middle class, and now labor costs in China have gone up and it’s not as attractive as it was before. If you can manufacture here in the U.S. people want to do it here. You’ve seen an increase of 600,000 manufacturing jobs in the U.S. since 2016. The thing is, can we keep that number going?
MDN: You mentioned the Trump Administration has eliminated regulations. Do you have a concern about the incoming Biden Administration?
Tony: It will be a challenge for us. During the campaign when Joe Biden was running for the nomination, at a campaign whistle-stop some young lady asked him about getting rid of plastics. Biden said yes, we should get rid of plastics. We fired off a response and told Biden it is irresponsible to say stuff like that. Kamala Harris is the Vice President-elect. She’s on record wanting to ban plastic straws in California.
Biden and Harris are on record as not being friends of the plastics industry. What that means for us is that we have to step up our game and we are doing it, positioning ourselves as reasonable people. We don’t want to say “no” to everything, that’s not what we’re about. But if we can work with both sides in a bipartisan way, we are all for it. In fact, there was legislation just passed in the Senate on “Save our Seas 2.0” which was bipartisan. Senator Sullivan (Republican) from Alaska and Senator Whitehouse (Democrat) from Rhode Island were the big sponsors for it. We were able to demonstrate that our industry was all for working for solutions. We were willing to step up as an industry, in time and talent and finances, to make sure we do the right thing.
One of the things we would like to see is a divided Congress. When you have a divided Congress then they have to start working together and form a consensus rather than just ramming stuff through. That’s the way the Founders established it. If you have a speed bump there, you are forced to work together. We look forward to that opportunity.
MDN: We’re talking to you from the Binghamton, New York area. As we often say, we live and work behind enemy lines. Here in New York, we have a single-use plastic bag ban. It was interesting that the ban was delayed as soon as COVID hit, but they’ve returned to it recently within the past month or so. All of our plastic bags are disappearing and we imagine straws are not far behind.
Tony: We’re actively involved in that. Our government affairs team, and also our organization ARPBA [American Recyclable Plastic Bag Alliance], they are the ones actively involved in trying to fight these bans. Here’s one thing people don’t realize: What are you going to replace it with? People forget plastic bags came about because environmentalists said it was horrible, we were cutting down all those trees for paper bags. So now they want to go back to that.
MDN: Anything we didn’t ask that we should have?
Tony: We talked a little bit about it, but the whole recycling thing is very, very important. We see that as one of our rallying cries in the next decade–to enhance that area as one of our big focuses. The natural gas industry, whether the Marcellus play or up in the Dakotas and Montana or down in West Texas, we love that industry. It’s made us a very competitive industry and we want to do everything we can to support it and make sure we maintain energy independence as a country. It’s critical not only from an economic standpoint but from also a security standpoint. We’re a strong advocate for shale energy.
PA Permit February 4, to February 11, 2021
County Township E&P Companies
- Greene Springhill EQT
- Greene Springhill EQT
- Greene Springhill EQT
- Greene Springhill EQT
- Greene Springhill EQT
- Greene Springhill EQT
- Greene Springhill EQT
- Westmoreland Salem Apex Energy
OH Permits February 4, to February 11, 2021
County Township E&P Companies
- Belmont Wheeling Ascent
- Belmont Wheeling Ascent
- Belmont Wheeling Ascent
WV Permits February 1, to February 5, 2021
- Marshall Tug Hill
- Tyler Antero
- Tyler Antero
- Tyler Antero
- Tyler Antero
- Wetzel EQT
- Wetzel EQT
- Wetzel SWN