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Wednesday, August 15, 2018

Op-Ed: High Tech Shale Jobs Not Getting the Attention They Deserve

From the Washington Examiner comes an op-ed about the high-tech jobs available in the oil and gas industry, and how they get short-changed:
If there is mud on the floor, they say in the shale industry, that means cash is coming in the door. That is, when workers are out in the field and the boots are getting dirty, money is being made. 
Thanks to an infusion of high technology driving the natural gas industry, it’s not just about dirty boots anymore – and it’s a good story. It’s a marriage of advanced technologies and dirt-under-your-nails hard work rarely told, because extracting shale is not a popular business politically. 
Fracking, it turns out, is the one high-tech industry not embraced by politicians in Pittsburgh who are rushing to embrace the likes of Uber and Google. 
Why? Because local progressive Democrats, very vocal climate activists, and the burgeoning Democratic Socialists of America party demand a wholesale repudiation of the natural gas industry. Local Democratic officials thus have to oppose fracking or risk losing in a Democratic primary.

Today’s natural gas industry isn’t the same petroleum job your grandfather or your father would have applied for. It not only attracts computer scientists, software engineers, mathematicians, and geologists to relocate to Western Pennsylvania from around the country, but it also provides careers for locals who thought those good jobs left for good when the coal mines and steel mills closed a generation ago.
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Monday, August 13, 2018

Agreement Reached for $31 Million in Payments for Harrison Hills Power Plant

From the Times Reporter:
The Harrison Hills City School District, as well as Harrison County and its villages and townships, will share $31 million over 15 years as a result of a donation agreement reached with the developer of a $1 billion power plant to be constructed in Cadiz. 
An announcement of the agreement was made by Nick Homrighausen, Harrison County’s Executive Director of Community & Economic Development, on Tuesday evening. 
The agreement is commonly called a PILOT agreement – Payment in Lieu Of Taxes – whereby the developer agrees to make contributions to local political subdivisions while receiving an exemption from paying property taxes on the plant. In this case, Harrison County provided a 15 year tax exemption as an incentive to attract this billion dollar investment into the county. 
According to the agreement, payments are to be $2.5 million in each of the first two years, and then $2 million each in the third through 15th years. Construction of the plant is to begin this fall, beginning operation in 2021. Under that schedule, payments would also begin in 2021. 
Of the $31 million, 45 percent – a total of almost $14 million – will go to the Harrison Hills City School District, which by law, agreed to the tax abatement.
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Utica Rig Count On the Rise Again in Latest ODNR Report

New permits issued last week: 9  (Previous week: 8+1
Total horizontal permits issued: 2863  (Previous week: 2854+9
Total horizontal wells drilled: 2391 (Previous week: 2385+6
Total horizontal wells producing: 1945 (Previous week: 1938+7
Utica rig count: 20 (Previous week: 18)  +2

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Higher Oil Prices Brings On Increased Spending from Shale Drillers

From Reuters:
U.S. shale producers that spent the last year promising to control capital spending and adhere to strict financial controls are finding the lure of higher oil prices irresistible. 
Several, including producers Parsley Energy (PE.N), Pioneer Natural Resources (PXD.N) and Continental Resources (CLR.N), this week joined others that already raised capital spending, citing higher costs and a desire to accelerate drilling and well completions programs amid strong pricing. 
Last year, investors pressured shale companies, hard-bitten by the 2014 downturn in prices, to rein in spending and return more capital to shareholders through dividends and share buybacks, selling stocks of companies that spent more on drilling.

Oil prices have climbed by about 40 percent in the past year, with the U.S. benchmark CLc1 on Wednesday around $67 per barrel. That run up helped push U.S. production to a record 11 million barrels per day in July, increasing demand for services and tightening labor markets. 
Derek Rollingson, portfolio manager of the ICON Energy Fund (ICENX.O), which holds shares of more than a dozen U.S. shale producers, said increasing capital spending makes sense with oil prices expected to rise in coming months. 
“It makes sense in this environment given the strength of the forward (oil) contracts,” he said.
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Chesapeake Reaches Settlement With Some PA Landowners in Lawsuit Over Royalty Scheme

From the Pittsburgh Post-Gazette:
Chesapeake Energy Corp. has reached a $7.75 million settlement agreement with about two-thirds of its Pennsylvania natural gas royalty owners who claimed that the company inflated transportation and marketing costs, often leaving them with paltry payments for their gas. 
The agreement applies to about 10,000 early Chesapeake leases located mainly in northeastern Pennsylvania that do not have so-called market enhancement clauses, which limited the kinds of deductions the company could take from a landowner’s share of gas sales. 
It aims to resolve two class-action lawsuits filed in U.S. District Court for the Middle District of Pennsylvania in 2014 known as Brown v. Access Midstream Partners and The Suessenbach Family Limited Partnership v. Access Midstream Partners. 
Access Midstream was once Chesapeake’s pipeline subsidiary and is now owned by Tulsa, Okla.-based Williams. 
If the settlement is approved by a judge, royalty owners who don’t opt out of the agreement will get a proportional share of some of the past costs that Chesapeake subtracted from royalty payments and the ability to choose from two options for how royalties will be paid going forward.
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Report: Shale Saved Ohio Natural Gas Consumers More Than $40 Billion Over 10 Years

by Jackie Stewart, Energy in Depth

A new Consumer Energy Alliance (CEA) report highlights how domestic shale development saved Ohio consumers more than $40 billion from 2006 to 2016 by driving down natural gas prices. Thanks to prolific natural gas production in the Appalachian Basin, the region now boasts the lowest natural gas prices in the world — and at the end of the day, that means billions in savings to natural gas consumers.
The report echoes a similar 2017 University of Pennsylvania Appalachian Basin study that credited the abundance of Marcellus Shale natural gas for a 40 percent reduction in Pennsylvania natural gas bills over the last decade. Nationally, the 2017 Sustainable Energy in America Factbook found that record-low natural gas prices enabled consumers to devote “less than 4% of their total annual household spending to energy in 2016, the smallest share ever recorded by the US government.”
The CEA report breaks down Ohio’s cost savings, showing that Ohio residential customers saved close to $15 billion during the 10-year period, while commercial and industrial consumers saved more than $25 billion.
What’s even more staggering is the downward trajectory in the price of natural gas before and after domestic shale development took off in earnest. Before shale, natural gas prices peaked at $10.66, while these prices decreased to just under $4 in 2016 – a 62 percent drop – after the shale revolution took hold in Ohio.
The shale-driven savings for Ohio consumers did not stop there. The CEA report also explains that Ohio gasoline prices have plummeted since 2011. The price at the pump for the Buckeye State was about $4.15 per gallon in 2011, with no end in sight. Domestic oil production from shale has helped to lower gasoline prices, saving drivers an estimated $115 billion or $1,100 per household in one year alone, according to AAA.
According to the report, there are 1.7 million Ohioans — 14.6 percent of the state’s population — living below the poverty line. For those that fall into this demographic, energy expenditures require a quarter of their take-home pay. As Action For Boston Community Development’s John Wells told National Journal in 2013, “Low natural-gas prices have been a godsend to low-income families.”
And as CEA’s Midwest Executive Director Chris Ventura stated,
“Lower fuel prices have helped Ohioans save over $40 billion in the past decade. This means families have more money to pay for school clothes, grocery bills, and perhaps even to take a vacation that has been put off for far too long.”
EID‘s 2014 video on consumer savings also explained the importance of these lower energy costs for low-income families and American consumers.
Notably, while the facts and quotes within the video and the following infographic are still very much relevant, as this recent CEA report and the 2017 University of Pennsylvania study show, these trends have continued to improve since 2014. And they are having very real benefits for Ohioans.

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Friday, August 10, 2018

Bloomingdale and Ascent Resources at Odds Over Road and Permit Issues

From WTOV:
The village of Bloomingdale is pushing for natural gas company Ascent Resources to help resolve issues with roads and permits.

One of the Jefferson County commissioners joined the mayor and council Thursday night after complaints about leases and road use agreements.

Bloomingdale Mayor David Gaffney said the issues with Ascent Resources are several. He said he wants the company to come to the table for more fair arrangements on leases, road use agreements and fixing already-damaged roads.

Gaffney and council were prepared to pass a resolution to start a legal process to force Ascent Resources to the table on several issues, but one missing council member led to a lack of quorum.

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FERC Grants One Rover Pipeline Requests, Continues to Hold Up Others Until Company Follows Through on Restoration Work

From NGI:
FERC on Wednesday issued a certificate order approving a new meter station designed to allow Rover Pipeline LLC to tap additional supplies out of eastern Ohio via its its Burgettstown Lateral. 
UGS would build 5,060 feet of 12-inch diameter pipe to connect to the station, while Rover (UGS) Uploaded by Utica Gas Services LLC (UGS) has proposed building an ultrasonic meter skid and other ancillary facilities in Jefferson County near Mile Post 30.5 of its Burgettstown line, Federal Energy Regulatory Commission documents show. 
The project, estimated to cost $ 4.7 million, will be located within the existing Burgettstown Lateral right-of-way. 
According to FERC's certificate order, Range Resources Appalachia LLC plans to use the UGS-Crawford station as a secondary receipt point into the supply area of ​​Rover's system. 
"Range Resources will compensate UGS for its costs, and the costs incurred by Rover, for metering facilities constructed at the Burgettstown Lateral receipt point," according to FERC.
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