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Wednesday, December 31, 2014

New Franklin Council Passes Resolution Opposing NEXUS Pipeline

From Akron.com:
New Franklin City Council passed a resolution opposing the construction of the proposed NEXUS Gas Transmission high pressure pipeline through the city at the Dec. 17 meeting.

The resolution is in response to a plan to construct about 8 miles of a 42-inch, 250-mile pipeline through the city and states this pipeline “poses a threat” to residents, their wells and the lakes and rivers in the area, will require safety forces to get extra training to deal with potential ruptures, costing the city money, and negatively impacts property values in the area. Current plans also call for the line to go through Green. 
Developers of the project include DTE Energy Co. and Spectra Energy Corp. in the United States and Enbridge Inc. in Canada. The NEXUS Gas Transmission system is expected to move 2 billion cubic feet of Ohio Utica shale gas from Kensington in Columbiana County to Detroit and to a storage plant in Ontario, according to NEXUS officials at the Council meeting. 
Pat Becker, project manager for the NEXUS pipeline, and other project officials, as well as Louis Berroteran, president of The Berroteran Group LLC, of Akron, attended the New Franklin City Council meeting to explain the project and answer questions.
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Drillers Are Laying Down Rigs as Oil Price Drops

From Bloomberg:
U.S. oil drillers idled the most rigs since 2012 as prices slid below $55 a barrel to the lowest level in five years and a fight for market share with OPEC intensified. 
Rigs targeting oil declined by 37 to 1,499 in the week ended Dec. 26, the lowest since April, Baker Hughes Inc. (BHI) said on its website yesterday, extending the three-week decline to 76. Those drilling for natural gas increased by two to 340, the Houston-based field services company said. 
U.S. oil output has surged to the highest in three decades even as the Organization of Petroleum Exporting Countries resists cutting production to defend market share, exacerbating an oversupply that Qatar estimates at 2 million barrels a day. Crude has slumped by almost 50 percent this year, prompting U.S. producers including Continental Resources Inc. and ConocoPhillips to plan spending cuts. 
“We should see the rig count going down at least through the end of the first quarter as a reaction to the low oil prices,” said James Williams, an economist at WTRG Economics, an energy-research firm in London, Arkansas, before the report. “By midyear, we should see measurable impacts on production.”
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Conservation Group Calls Out Shale Development as a Threat to Lake Erie

From ideastream:
Trout Unlimited hopes its report serves as a call to action, for its 155,000 members as well as fish and wildlife agencies, and the shale industry.

The group fears that Utica Shale development will hurt the Lake Erie watershed, through water withdrawals from both the lake and the rivers that feed it, as well as the storage of wastewater in deep injection wells across the region. 
Katy Dunlap is Trout Unlimited’s Eastern Water Project Director. She says her group isn’t anti-shale. They just want to highlight the many important and delicate waterways across the Central Appalachian region. 
“You know, there are some places that are so special and isolated and unique, maybe shale gas development shouldn’t be happening there, but there are other places where it can happen as long as it’s limited in a way to protection of critical fish and wildlife habitat.”


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Chesapeake Agrees to Increased Payout in Settlement of Class Action Royalties Lawsuit

From Citizens' Voice:
Chesapeake Appalachia LLC has agreed to increase payment from $7.5 million to $11 million to settle a class-action lawsuit with natural gas leaseholders who claimed the company wrongly charged them post production fees, according to court documents. 
The proposed settlement would resolve a more than year-long dispute among law firms over the handling of the case that derailed the original settlement reached in August 2013 with Demchak Partners, the lead plaintiffs in the case. 
The proposal, filed Dec. 18 in federal court, increases the amount of up-front money thousands of Pennsylvania leaseholders would receive and contains other financial benefits over the original settlement, according to the proposal filed by attorney Michelle O’Brien of The O’Brien Law Group in Moosic and several other law firms. 
Jackie Root, the owner of a landowner consulting firm and president of the Pennsylvania chapter of the National Association of Royalty Owners (NARO), said she still has concerns over the settlement. 
“Materially there is not much change in the settlement. They are getting a little more than they would have, but they are giving up an awful lot in this,” she said.
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Public Health Expert in Pennsylvania Not Impressed by New York Report Used to Support Fracking Ban

From a Marcellus Drilling News report:

Dr. Theodore Them is a specialist in environmental medicine with an advanced degree in public health who works in Pennsylvania, living in a home less than 5 miles from over 100 Marcellus shale wells.  Dr. Them was interviewed recently by the Joint Landowners Coalition of New York (JLCNY) about the health impacts report that was used as the justification to ban fracking in New York by governor Andrew Cuomo.  It's a lengthy interview, but it's insightful commentary from an expert in public health, and Dr. Them is not in agreement with the conclusions of the New York report or the methods used to reach them.

Listen to the whole interview right here.


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Ethylene Plant, Illegal Dumping, and More Featured Among Top 2014 Energy Stories

From Crain's Cleveland Business:
Truth be told, 2014 was a year of a thousand small stories in Ohio’s oil and gas world, the majority of which probably will never be told.
Wells were drilled at an increasing pace in the southeastern portion of the state, and landowners who had fared well in the mineral rights game were raking in cash — as much as $1,000 per acre, per month, in some of the richest examples. 
But there were several events and trends that made headlines and may be affecting the industry and the state’s economy in the years to come, some more obvious than others: 
Odebrecht 
One of the chief dreams of economic developers watching the shale drilling boom from places like Columbus has been to somehow lasso the ethane industry and build a vertically integrated industry in Ohio. 
It would begin with the extraction of Ohio’s “wet gas” that is rich in ethane, include the separation of that ethane from the gas and the processing of it into polyethylene. And it would end with the production of plastic goods and other products that use these raw materials.
Click here to read about more of the top energy stories of the past year.

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Robbins: OPEC's Strategy to Beat Shale Drilling Will Fail

From mycentraljersey.com:
At last month’s meeting of the Organization of Petrolum Exporting Countries ministers in Vienna, some members argued for decreasing production to slow or reverse the oil price drop. But Saudi Arabia, still OPEC’s largest oil producer, convinced the other members of the cartel that their best move would be to keep the spigots open. It is a move that remains under debate this week at an Arab energy conference in Abu Dhabi, United Arab Emirates. 
It seems strange that OPEC would be trying to drive oil prices lower. After all, the whole point of the cartel is to use its leverage to maximize profits. But Saudi Arabia’s oil minister, Ali al-Naimi, sees low prices as a new kind of strategic weapon. He believes that oil producing countries need to accept some temporary pain in order to drive down prices to the point where fracking becomes unprofitable, and the newly emerged North American producers start going out of business. 
It is a bold gamble on OPEC’s part, and one that is bound to fail. It is true that shale oil production is more expensive than traditional oil drilling. Fracking is unsustainable if oil prices go below $50 or $60 per barrel. 
But the break-even points for most OPEC members are much higher. Countries that depend on oil revenue — such as Saudi Arabia, Iraq, Iran and Venezuela — need prices in the range of $100 to $130 per barrel to balance their budgets. Crude oil prices are already in the high $50s or low $60s, and these countries could be facing serious instability while they cut their budgets as they wait for the American producers to go belly up.
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Natural Gas Dips Below $3 For First Time Since 2012

From Bloomberg:
Natural gas slumped below $3 per million British thermal units in New York for the first time since 2012 on speculation that record production will overwhelm demand for the heating fuel. 
Futures settled at the lowest in 27 months and have plunged 26 percent in December, heading for the biggest one-month drop since July 2008, as mild weather and record production erased a surplus to year-ago levels for the first time in two years. Temperatures will be mostly above average in the eastern half of the U.S. through Dec. 30, according to Commodity Weather Group LLC. 
“We don’t see anything scary in the forecast,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova,Pennsylvania. “You had this psyche where people were worried about a polar vortex; we had a cold October and a cold early November, and boom, if you were long you are wrong.”
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Chesapeake Fetches $12,000 an Acre in Sale of Assets Which Cost Them as Little as $5 an Acre

From The Intelligencer/Wheeling News-Register:
Northern Panhandle mineral owners receiving royalty checks from Chesapeake Energy should see Southwestern Energy Co. assume the payments, as the Houston-based firm finalized a $5 billion deal for 413,000 acres in West Virginia and Pennsylvania last week. 
That means the lease contracts Chesapeake acquired for Marcellus and Utica drilling over the past several years in northern West Virginia, some of which paid mineral owners as little as $5 per acre, fetched the Oklahoma City-based firm more than $12,000 per acre. 
When Chesapeake and Southwestern officials announced the planned deal in October, they agreed on a selling price of $5.4 billion. However, the firms reduced the final price by $400 million when Southwestern signed a waiver agreeing not to sue Chesapeake for "title defects and environmental liabilities."
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New Study Adds to Debate Over How Many Jobs Are Actually Created by Shale Drilling

From Forbes:
How many jobs will the North American oil and gas boom create? Environmental concerns certainly loom large in the public’s mind, but in the recent economic environment creating jobs remains a pressing concern for policy makers and political constituents. Newspaper headlines like, “Boom in Energy Spurs Industry in the Rust Belt,” “North Dakota tries to woo workers for empty jobs” and “Rent in Williston, N.D. tops averages in New York City and Los Angeles” are part of a narrative that the shale revolution will be a panacea for the United States’ labor market. Recent research at Rice University’s Baker Institute for Public Policy shows that shale may not be quite the national job-creating juggernaut that boosters claim it will be. This means that policy makers must not be complacent about job-creation and simply rely on fracking to lead us out of the underemployment woods. In particular, state and local policy makers concerned about creating jobs should promote intelligent policies that promote drilling in a responsible way, encourage individuals and firms to spend locally where fracking takes place, and pursue an “all of the above” job-creation strategy. 
Cumulative employment growth relative to the national average since 2008 has been much higher for most oil and gas-producing states than for the rest of the nation (see Figure 1 in the working paper). This has triggered much rhetoric, but the question remains, “How many jobs will additional upstream drilling activity actually create for each state?” In a recent working paper at the Center for Energy Studies at Rice University’s Baker Institute, the answer to this question is given explicit attention. The paper finds a robust, positive, statistical association between state-employment growth and growth in drilling activity. This is good news for states with shale resources. Nevertheless, the job-creation multipliers (the number of jobs created directly and indirectly following an increase in upstream investment) in the paper are substantially less than those implied by industry reports. (For example, IHS’s national study or another on the Marcellus.)
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Ohio Pipeline Construction Continuing in Earnest

From Powersource:
A huge supply of natural gas in the shale of northern Appalachia is igniting a mega-boom in gas pipeline construction in Ohio, the likes of which haven’t been seen since the 1940s. 
“You have interstate, intrastate, local utility service lines upgrades, collection lines for oil and gas utilities, and lines for gas-fired electric utilities. Altogether, there will be 38,000 miles of pipeline development in Ohio over the next decade,” said Dale Arnold, director of energy services for the Ohio Farm Bureau Foundation. 
“I tell people you might not see shale and oil drilling development in your area like in the eastern part of the state, but with pipelines and development, it’s coming your way.” 
Three proposed pipelines are winding their way through the Federal Energy Regulatory Commission approval process now. A major pipeline company has hinted it may build a fourth large pipeline. 
The largest project is Energy Transfer Partner L.P.’s $4.3 billion Rover Pipeline, an 823-mile conduit running from southeast Ohio west to Defiance County and then north to Michigan and Canada. The 409-mile main line will have nine new lateral pipelines ranging from 4 to 206 miles to connect it to southeast Ohio, Michigan, and Canada.
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Hinto Energy, Inc. Announces Drilling of New Oil Well in Ohio

DENVER, CO--(Marketwired - Dec 23, 2014) - HINTO ENERGY, INC. (OTCQBHENI), engaged in the exploration, acquisition, and development of oil and gas properties, with producing wells in Utah and Montana, today announced the Company has drilled a new well in Ohio, located on the Appalachian geosyncline which includes both the Berea Sands and the Ohio shale stratigraphic levels.
"We continue to look at exploration and production opportunities that deliver positive results even at current oil and gas prices. We believe this new well provides such an opportunity," stated George Harris, the Chief Executive Officer of the Company.
"While drilling the well, the well kicked off and produced 20 plus barrels of oil in approximately 15 minutes and natural gas at an estimated rate of 250,000 cubic feet per day," said the field operator. "The well should be placed on production in early January, following installation of oil tanks and pumping unit."
"This area of Ohio has had a lengthy history of production with multiple producing zones at shallow depths, which is why we plan on initially drilling down into the Berea Sandstone, which has been a long term producer at 400 to 600 feet. We will use additional geological and geophysical analysis to evaluate deeper prospective targets in the Ohio shale, Clinton, Utica shale, Trenton and Trempealeau formations," Harris continued.
Hinto will retain a 75% non-operated interest in this initial well, after payout, and 75% of any future wells developed on this property and is considering the use of 3D seismic to target higher value prospects. Hinto has established a 36 square mile AMI (area of mutual interest) with the operator, which could provide for additional drilling opportunities.
Hinto Energy, Inc. is involved in the acquisition, production, development and exploration of Oil and Natural Gas properties in the Rocky Mountain Basins. The Company is actively seeking to acquire producing oil and natural gas properties that offer long term production opportunities and proven oil and natural gas reserves. The Company employs state-of-the-art technology for reservoir characterization, to discover by-passed reserves, and to evaluate unexploited resources utilizing modern horizontal drilling techniques. For more information visitwww.hintoenergy.com.
Notice Regarding Forward-Looking Statements
This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which include among others, the inherent uncertainties associated with petroleum exploration and development stage exploration companies including without limitation, other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

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Tuesday, December 30, 2014

5 New Utica Shale Permits Issued Last Week; Rig Count Down to 50

The Ohio Department of Natural Resources has released the latest weekly permitting update for Utica shale drilling.  Not surprisingly, activity was down during the short holiday week.

First, an update on the previous week, which we didn't get a chance to post about last week.  For the week ending 12/20/14 there were 37 new permits issued.  The breakdown by county: Harrison County (13), Belmont County (7), Noble County (6), Guernsey County (4), Monroe County (4), Carroll County (3).

After that active week, there were just 5 permits issued during the week ending 12/27/14.  4 of those were for Guernsey County wells and 1 was issued for Monroe County.

The latest cumulative totals come to 1,735 permits issued, 1,277 wells drilled, and 707 wells producing.  The Utica rig count fell to 55 during the week ending on the 20th, then fell further to 50 last week.

View the report for the week ending 12/20/14 by clicking here.

The latest report can be viewed by clicking here.

And here is the latest breakdown by county:



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Monday, December 29, 2014

Monroe County Well Blowout Brought Under Control in Time For Holiday

HOUSTON, TX--(Marketwired - Dec 23, 2014) - Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE MKT: MHR.PRC) (NYSE MKT: MHR.PRD) (NYSE MKT: MHR.PRE) (the "Company" or "Magnum Hunter") is reporting today that the previously announced blowout of the Company's Utica Shale well, the Stalder 3UH, located in Monroe County, Ohio which occurred on December 13, 2014, is now under control and the well has been temporarily capped. Wild Well Control has successfully replaced the Stalder 3UH's well head assembly. Due to the gas content being ~97% methane, there is currently no evidence of environmental damage to the immediate area as a result of the blowout. Additionally, no personnel have been injured in connection with the well control operations on the Stalder Pad.

Initial well control operations involved excavation around the well head to properly evaluate the condition of the well head flange and night cap. Fresh water was continually sprayed on the well head to reduce the chance of ignition of the natural gas. Initially, attempts to push the night cap back over the flange with a track hoe and a crane were unsuccessful. Wild Well Control then began the process of replacing the well head assembly. As part of this process, the individual casing strings were cut in a number of different places. The new well head was then installed and the well was shut in earlier today. The pad site will now be brought back to its original condition, and the Company anticipates that all wells on the Stalder Pad will be placed on production sometime in January 2015.

Magnum Hunter continues to believe that there has been no damage to the overall structure or integrity of the Stalder 3UH well and that the loss of control of the Stalder 3UH well has not affected Magnum Hunter's three other Utica Shale wells (the Stalder #6UH, #7UH and #8UH), and the one Marcellus Shale well (the Stalder #2MH), all located on the Company's Stalder Pad.

Additionally, Magnum Hunter and its subsidiaries maintain customary control of well insurance coverage through multiple shared-risk co-insurance companies. Magnum Hunter believes that its control of well insurance will be adequate to cover all losses incurred by it in connection with the blowout of the Stalder 3UH well (subject to the normal retention amount of the insurance policy).

About Magnum Hunter Resources Corporation

Tuesday, December 23, 2014

Senator Rob Portman Finds Out About Shale Impacts During Visit to Carroll County

From the Carrollton Free Press Standard:
Republican Senator Rob Portman learned how shale drilling is affecting Carroll County first hand last week. 
Portman met with local business, community, and government leaders at Atwood Lake Lodge Thursday for an informal round table discussion. 
Portman initiated the conversation, saying he wanted to hear the prosz and the cons regarding the development of the Utica Shale in the area. 
“This boom has put Ohio on the map. Washington D. C. is talking about Ohio,” he said. 
One of the problems on the federal level, according to Portman, is permitting of public land. Federal and public lands and permitting for oil and gas development is an issue that Portman and others have been trying to address. 
Regulations are another issue that six agencies in the government feel needs addressed. Portman said the current regulations date back to the 1970’s. 
“We need to be safe and environmentally safe, too. We want good operators,” continued Portman. 
On a recent turkey hunting trip to Guernsey County, Portman said he couldn’t find a hotel room. And that was a good thing. The oil and gas workers are making their presence known in many counties in the state but Carroll County leads the way in development of those resources.
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Chesapeake Energy Corporation Closes Sale of Marcellus and Utica Shale Assets

OKLAHOMA CITY--(BUSINESS WIRE)--Dec. 22, 2014-- Chesapeake Energy Corporation (NYSE:CHK) today announced the closing of its asset sale to Southwestern Energy Company (NYSE:SWN) and initiatives to further enhance shareholder value.

Chesapeake closed the previously announced sale of its assets in the Southern Marcellus Shale and a portion of the Eastern Utica Shale to Southwestern for net proceeds of $4.975 billion. The $400 million adjustment to the previously reported $5.375 billion sale price is attributable to a settlement for various items, including Southwestern’s waiver of any future claims related to title defects and environmental liabilities. The properties sold to Southwestern consist of approximately 413,000 net acres and approximately 1,500 wells located in northern West Virginia and southern Pennsylvania, along with related property, plant and equipment. Net production of the divested properties in mid-December was approximately 57,000 barrels of oil equivalent (boe) per day. This represents approximately 7% of a new company record for total production that was achieved last week of 770,000 boe per day.

Doug Lawler, Chesapeake’s Chief Executive Officer, commented, “This transaction marks another significant event in Chesapeake’s transformation and solidifies our strong financial position. With the closing of this transaction and the available borrowing capacity under our unsecured revolving credit facility, Chesapeake now has a liquidity position of approximately $9 billion, putting Chesapeake in an advantageous position to enhance shareholder value in this volatile commodity price market. Consistent with our financial strength and our focus on enhancing shareholder value, Chesapeake’s Board of Directors has authorized a $1 billion common stock repurchase program. Further, building on our outstanding operational momentum of 2014, we will be focused on additional strategic growth opportunities to enhance our asset portfolio and continue to improve our ability to deliver top quartile growth metrics and shareholder returns.”

Chesapeake Energy Corporation (NYSE:CHK) is the second-largest producer of natural gas and the 11th largest producer of oil and natural gas liquids in the U.S. Headquartered in Oklahoma City, the company's operations are focused on discovering and developing its large and geographically diverse resource base of unconventional natural gas and oil assets onshore in the U.S. The company also owns substantial marketing and compression businesses. Further information is available at www.chk.com where Chesapeake routinely posts announcements, updates, events, investor information, presentations and news releases.

Methane Levels Continue to Drop Even as Drilling Increases

From ExxonMobil:
Environmental Protection Agency Administrator Gina McCarthy said last week her agency will soon unveil new regulations for oil and natural gas production designed to reduce emissions of methane. 
We’re watching closely because methane emissions are already falling – and dramatically so – making for one of the most profound and heartening environmental stories in recent years.Emissions_Decline_Chart_12-2014The numbers are striking. As the agency’s own Greenhouse Gas Reporting program shows, since 1990, U.S. methane emissions have fallen 16.9 percent.That drop is even more impressive if you consider that the overall size of the U.S. economy is far bigger today than a quarter century ago, and we produce more natural gas than we did then. The latter point is significant because methane leaks from oil and natural gas production are considered to be among the largest contributors to overall methane emissions. 
But as they say on TV, “Wait, there’s more!” 
The bulk of the emissions reductions have come over the last decade, precisely the same period that domestic oil and natural gas production from America’s shale and tight oil regions has been soaring.
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Fallout and Reaction From New York's Decision to Ban Fracking Covers Wide Range

In the wake of Governor Andrew Cuomo deciding to ban fracking - actually, to ban all oil and gas development - in New York, there has been no shortage of reaction and commentary on the thought (or in some opinions, lack thereof) that went into the decision and what the potential fallout will be.  While there may not seem to be any direct connection at this time between Cuomo's ban and Ohio's Utica shale activity, the future may reveal otherwise.  The decision has definitely emboldened and fired up activists who feel responsible for influencing Cuomo.

So, here is a sampling of what people are saying about the New York ban.

From Powersource:
New York and Pennsylvania share a border, but on shale gas policy the states are separated by a gulf. 
The breach widened last week when New York Gov. Andrew Cuomo’s administration announced that state will ban fracking, citing uncertainty about the health risks posed by the oil and gas extraction process. 
In Pennsylvania, where elected officials from both parties embrace shale gas development, government leaders are still debating whether to fulfill a three-year-old recommendation for how to study the potential impact of shale gas development on public health. 
Gov. Tom Corbett’s Marcellus Shale Advisory Commission urged the state Department of Health in 2011 to create a health registry to track the well-being of people who live near natural gas drilling sites over time. The project was not funded, and the registry was never created. 
Could the starkness of New York’s warning influence policy in Pennsylvania? 
“I don’t put a lot of stock in the New York analysis,” said Drew Crompton, chief of staff for state Sen. Joe Scarnati, R-Jefferson, the Senate president pro tempore.
From Forbes:
New York has issued a moratorium for hydraulic fracturing in the portions of the Marcellus Shale that fall within its borders, but the state is benefiting economically and environmentally from the fracking going on in neighboring Pennsylvania, as NPR reported. 
New York City, for example, has rolled out a program, “NYC Clean Heat,” to encourage building owners to switch from heating oil to natural gas. One building owner told NPR that by switching, he expects to reduce his building’senergy costs by 50 percent. 
The abundance of natural gas produced by fracking in places like the Marcellus has driven down prices and made those savings possible. The irony, as NPR points out, is that most New Yorkers oppose fracking:
From National Review:
It’s hardly surprising that a liberal Democratic governor in one of America’s most liberal states chose to ban fracturing. Indeed, in most liberal/left groups, hatred of the oil-and-gas sector isn’t just popular, it’s a membership requirement. On Thursday morning, Dan Henninger of the Wall Street Journal put it exactly right when he told Charles Payne on Fox Business that “the Democrats have been captured by the Greens.”

New York has had a moratorium on hydraulic fracturing for years. To change that policy now, after all the campaigning that has been done in the state by environmental groups, would have been a truly surprising move. That Cuomo formalized that moratorium and made it official is not surprising in any way. 
As to the significance of the move, it has made environmental groups giddy and added a tiny dollop of political theater to the discussion about domestic oil and gas development. It’s also clear that the move is negative for the economy of upstate New York. In 2011, Timothy Considine and two colleagues were asked by the Manhattan Institute (where I’m a senior fellow) to estimate the economic opportunities of shale development. Considine’s report found that shale-gas drilling in New York would spur more than $11 billion in economic output and create as many as 18,000 jobs. Now, thanks to Cuomo’s move, the possibility of that economic development — along with those thousands of jobs — has vanished, probably for decades.
From The Observer:
State Sen. Cathy Young, R-C-I-Olean, said Cuomo’s ban would perpetuate rural poverty. 
“It’s a punch in the gut to the Southern Tier,” she said. “The governor has a moral obligation to explain to the people of our region how he will alleviate rural poverty. Families desperately need jobs and economic opportunity, not government handouts.” 
She said young New Yorkers are leaving in droves because they feel they don’t have a future locally. 
“Our rural communities are dying a slow, painful, poverty-stricken death and hope is scarce,” she said.
From JDSupra:
The remainder of the 184-page report refers to many unpublished and non–peer reviewed reports, at least some of which were funded by groups opposed to the natural gas industry. On the other hand, the NYSDOH report lists but does not discuss nor give credibility to recent peer-reviewed and published studies. For example, the NYSDOH bibliography lists the 2014 U.S. Department of Energy’s National Environmental Technology Laboratory (NETL) study that used tracers to conclude there is no evidence of gas or brine migration from Marcellus Shale wells. However, nowhere in the NYSDOH report is the NETL study discussed. Similarly, the report mentions the 2013 Fryzek retrospective assessment, which concluded that no increase of childhood cancers occurred after HVHF commenced, but NYSDOH disregards that work, claiming there is “uncertainty about the strength of the study conclusions.” Instead, for example, the NYSDOH gives weight to the Southwest Pennsylvania – Environmental Health Project’s unpublished and no-longer-available website presentation, which describes self-reported symptoms from a small number of individuals who reported these claimed symptoms to a non-healthcare organization. These examples are typical of what can be found in the NYSDOH report and its conclusions. Thus, the decision to impose a ban on the unconventional shale industry in New York would appear to be legally questionable to the extent that it relies on a concern for what might happen as opposed to the great weight of information and evidence that these concerns are not justified. 
Impact 
Ultimately, the ban is expected to be overturned. The owners of oil and gas rights have a basis for claiming that they are being deprived of legitimate economic interests without necessary governmental basis for this restriction. Those opposed to unconventional shale development in other areas of the country will attempt to use the NYSDOH report to further their interests, but this will have little impact because reviewing courts and governmental agencies will have access to the underlying studies and will have the ability to give these studies appropriate weight. Thus, until the ban is overturned, exploration and production of the vast unconventional shale deposits in the United States and elsewhere will continue, and New York will have to wait for its opportunity.
From Common Dreams:
In the wake of New York's victory against fracking, many regions in North America faced with growing climate threats seem ready to follow the state's lead and ban the drilling practice altogether. 
Just days after Governor Andrew Cuomo passed a moratorium on fracking following an intensive environmental activism campaign, the Canadian province of New Brunswick introduced its own temporary ban on the controversial method of drilling. 
New Brunswick Premier Brian Gallant, who promised a moratorium on fracking during his campaign, said the halt would be lifted for companies who meet certain conditions, which include a consultation process with First Nations tribes, a plan for waste water disposal, and credible reports on the health and environmental impacts of the practice. 
New York's resolute stance against fracking is particularly momentous because the state sits atop a large portion of the Marcellus Shale, a methane-heavy formation that has been targeted by the energy industry for drilling. Legalizing the practice would have been a financial boon for the state; by prioritizing the environment, Cuomo "sets a model for what should happen around the country," Alex Beauchamp, Northeast Region Director of Food & Water Watch, told Common Dreams.
From the Associated Press:
While environmental groups are doing a victory dance over New York’s decision to ban fracking, farmers such as apple grower David Johnson are grieving for dashed hopes and dreams. 
“I’m devastated,” Johnson said after Gov. Andrew Cuomo’s health and environmental commissioners announced Wednesday that they were recommending a fracking ban. “I have concerns about how to continue this farm that’s been in the family for 150 years.” 
Energy companies denied the chance to drill in New York can simply raise their rigs in other states. But landowners in the state’s Southern Tier region who had hoped to reap royalties from gas production don’t have that option.
From CNN:
However, I am reflexively hostile to deception, especially when undertaken by people who cloak themselves in the mantle of science. And that's exactly what is happening here. 
While science is always a subject of continuing inquiry, the strong consensus of research on hydraulic fracturing is that overall, it is good for the environment, the economy and our geopolitical position. The United States has seen dramatic reductions in national carbon dioxide emissions largely as a result of hydraulic fracturing, which allowed natural gas to become cheap and abundant, and mostly displacing dirtier, higher-emission coal in the generation mix. Hydraulic fracturing, and the similar techniques used for "tight oil" drilling, have actually allowed the United States to become the world's leading oil producer in 2014
The economics of the fracking revolution are also overwhelmingly positive. IHS, perhaps the most respected independent energy consultancy, says the industry will be able to support 3.3 million jobs, adding more than $125 billion to state coffers through state tax revenues by 2020. By 2025, the average family could be saving $3,500 per year due to hydraulic fracturing, a staggering figure in a country with a median family income of just $52,000.
From the New York Times:
Despite the potential economic benefits of drilling for natural gas, the governor’s environmental commissioner, Joe Martens, and his health commissioner, Dr. Howard Zucker, concluded that the health and environmental risks were too high. Cuomo, for his part, claimed — implausibly — that he had played no role in the decision. “I am not a scientist,” he said, maintaining that he had merely taken the advice of his experts. 
A few hours later, a state board approved the building of three casino complexes, the largest of which would be located in the old Catskills borscht belt. After the announcement, Cuomo put out an ebullient statement saying that these projects will “create thousands of local jobs, drive economic development in surrounding communities,” et cetera. 
Anyone who cares about the economic viability of New York State should be troubled by these two decisions. It is fracking — despite risks — that has the potential to boost struggling communities, by providing well-paying, middle-class jobs. Casinos, meanwhile, are a road to nowhere. The Cuomo administration got it exactly backward.
From the Houston Chronicle:
While it bans fracking, New York will undoubtedly continue to belch forth pollutants from the streets of Manhattan and other cities. Neither the governor nor the public health officials have taken steps to lessen the state's consumption of fossil fuels. It may even double down on its hypocrisy of mooching the benefits of cheap energy from neighboring Pennsylvania, which has shown far more pragmatism in its energy policy than Cuomo has with his political pandering. 
The Marcellus is primarily a natural gas formation, and natural gas prices remain depressed. By banning fracking, New Yorkers have basically assured that additional supplies won't be coming to market and depressing prices further. Cuomo may have inadvertently provided price supports for the energy companies he's trying to keep out of the state. In theory, his constituents ultimately could pay more to heat their homes than they would have if he had lifted the moratorium. 
Either way, New Yorkers will continue to enjoy lower prices for gasoline and continue to switch from heating oil to cheaper natural gas thanks to fracking in other states. Cuomo's decision to ban fracking simply underscores the point that New Yorkers remain blissfully oblivious to the tradeoffs they make every day when it comes to energy. No wonder my head hurts every time I go there.

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Frustration Mounts for Evacuated Residents Near Monroe County Gas Well Leak

From The Columbus Dispatch:
This hollow used to be peaceful. 
Not long ago, Randy Heater and his daughters would roam the Monroe County hills to hunt, setting up deer stands on quiet fall days when the air was still. 
On Dec. 13, that stillness shattered. 
Crews lost control of a fracked well on a hilltop near Heater’s house. Natural gas surged into the air. 
From their backyard, less than a mile from the well, the Heaters heard it. The rushing gas sounded like a broken air hose, Heater said — a deep, steady WHOOOOSH. 
As the weekend approached, gas was still spewing uncontrollably. 
Families within a mile and a half of the well have been evacuated, although not all have left their homes. They’ve been allowed back during the day, to grab clothes and feed animals, but they are supposed to be elsewhere at night. 
The county emergency management agency says the families might be allowed home for good by Wednesday, Christmas Eve, but officials aren’t sure.
Click here to read more. 


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Dominion East Ohio Expects Increased Regional Shale Production To Provide Ample Winter Gas Supplies At Moderate Prices

CLEVELANDDec. 15, 2014 /PRNewswire/ -- Dominion East Ohio expects increased production from the Marcellus and Utica shale formations in Ohio and nearby states to provide ample supplies of natural gas at moderate prices this winter.
"Once again, customers can set their thermostats with confidence this winter," said Jeff Murphy, General Manager – Commercial Operations.
Murphy noted that natural gas prices for the remainder of the winter heating season could be lower than those of last winter, when repeated Polar Vortex weather events drove Dominion East Ohio's Standard Service Offer (SSO) and Standard Choice Offer (SCO) rates to more than $6 per thousand cubic feet (mcf) in February.
Murphy also said that the arrival of new regional shale natural gas supplies has helped limit market price increases for much of the year, despite increasing national demand. For example, Dominion East Ohio'sDecember 2014 Standard Choice Offer (SCO) rate is $4.712 per thousand cubic feet (mcf). The current rate is just 29.4 cents per mcf higher than the December 2013 SCO/SSO rates of $4.418/mcf.
"Last winter's weather really stretched natural gas supplies and prices on a national level," Murphy said. "Thankfully, the market was up to the task, because of increased gas production and sufficient natural gas storage inventories.  Dominion East Ohio's gas suppliers did a remarkable job in delivering gas to our system, and our system operated reliably throughout the long winter."
Murphy added, "Even though most weather forecasts are not calling for a return to repeated Polar Vortex events this winter, we've taken steps to ensure reliable natural gas deliveries to our 1.2 million customers.  While market conditions are constantly changing, natural gas prices are expected to be moderate once again."
"One of the major drivers of our supply security is increasing natural gas production right here in Ohio," Murphy said.  "Even though demand continues to grow, as more natural gas is used for electric generation and our economy continues to recover, production increases have kept a lid on prices.  If our winter weather returns to more normal temperatures, customers may also see a decrease in their bills because of lower usage as well."
The company strongly urges customers who know they will be unable to maintain regular payments to contact Dominion East Ohio at 1-800-362-7557, to inquire about payment plans and energy assistance programs. The company's call center is open from 7 a. m. to 7 p. m., Mondays through Fridays.
For more information about Dominion, visit the company's website at www.dom.com.
SOURCE Dominion East Ohio

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Friday, December 19, 2014

12/19/2014 Links of the Day: Residents Hope Well Leak Doesn't Keep Them Out of Homes for Holidays - and Much More

Energy in Depth:  Sierra Club Gets an F in "Fracking 101"   -   "The Sierra Club, founded in San Francisco in 1892 by legendary conservationist John Muir, was once a clarion voice for the preservation of public lands and environmental stewardship. To note that the group has grown increasingly distant from its roots is an understatement. Its decline, which we have covered previously, unfortunately moves on apace with the release of its latest video:..."

Gas & Oil:  Beck Energy Dismisses Complaint Against Munroe Falls   -   "A Ravenna-based energy firm has dropped a civil complaint claiming that the city has illegally interfered with efforts to clean up a small oil spill at a North River Road well the company operates, but the complaint could be refiled.  Beck Energy Corp. attorney Scott Zurakowski filed a notice of dismissal of the complaint in Summit County Court of Common Pleas..."

The Intelligencer/Wheeling News-Register:  Residents Near Well Leak Hope to be Home for the Holiday   -   "After Wild Well Control's initial attempt to stop the Triad Hunter Utica shale well from continue to leak natural gas failed, residents of about 30 nearby homes are hoping they can permanently go home in time for Christmas..."

The Intelligencer/Wheeling News-Register:  Natural Gas Flare Lights Night   -   "Although the sun goes down early in December, residents of New Athens now get a constant orange glow through the night because of the natural gas flaring system at a nearby..."

Akron Beacon Journal:  New Franklin Opposes Natural Gas Pipeline, Wants Alternate Route   -   "City Council on Wednesday voted to oppose a new natural gas pipeline that would cross southern Summit County, much to the delight of a standing-room-only crowd of 120 residents.  The vote against was 5-0, with two councilmen absent.  "Hopefully it will help, but I’m not sure," said..."

Press release:  Chesapeake Energy Corporation Announces Closing of $4.0 Billion Senior Unsecured Revolving Credit Facility   -   "Chesapeake Energy Corporation (NYSE:CHK) announced today that it closed on a new five-year, $4.0 billion senior unsecured revolving credit facility. The new facility replaces the existing $4.0 billion senior secured revolving credit facility that was scheduled to mature in December 2015. The aggregate commitments may be increased up to..."

Seeking Alpha:  Strong Wattenberg Growth Means Downside Protection With Plenty Of Upside   -   "From the middle of June to the beginning of December, PDC Energy's (NASDAQ:PDCE) stock price fell from $70 a share all the way down to $28 a share. There are plenty of those who caught the proverbial "falling knife" on the way down, but it looks like PDC Energy may finally..."

Pittsburgh Business Times:  Range Resources' Utica Well Hits a Sweet Spot   -   "Range Resources Corp. believes it has come up big with its exploratory Utica Shale well in Washington County.  The company reported Monday that the well, the Claysville Sportsman's Club No. 1, posted a record initial flow rate of 59 million cubic feet per day..."

Press release:  Range Announces 2015 Capital Budget and Record Utica Well Results   -   "RANGE RESOURCES CORPORATION (NYSE: RRC) announced today its 2015 capital budget and the initial results from its Utica/Point Pleasant well located in Washington County, Pennsylvania.  Range has set its 2015 capital spending budget at $1.3 billion, a decrease of..."

SNL:  Gas, oil shale production will reach record in January 2015 with few signs of slowing   -   "Even though prices of crude oil, natural gas and natural gas liquids have weakened considerably since October, shale production of the commodities is forecast to continue growing and reach new record highs in January 2015, according to new data from the U.S. Energy Information Administration.  The "Drilling Productivity Report," or DPR, published by the EIA on Dec. 8 showed that output of crude oil..."

Columbus Business First:  Big chunk of American Energy’s 600 workers followed McClendon from Chesapeake Energy   -   "About one-third of employees at Aubrey McClendon's new natural gas companyAmerican Energy Partners LP followed him from Chesapeake Energy Corp.  McClendon was ousted last year from Chesapeake over his spending, then..."

Gas & Oil:  Guernsey County Uses Gas, Oil Royalties for County Improvements   -   "As 2014 draws to a close, Guernsey County coffers have benefitted from the oil and gas wells on county-owned land including the county farm adjacent to Countryview Assisted Living on County Home Road in Wills Township and property located in Oxford Township.  The revenue totaling $858,693.58, as of the last available report, has been distributed..."

Akron.com:  Pipeline Officials No-Shows at Council Meeting   -   "More than 50 owners of property that would be affected by the proposed NEXUS Gas Transmission pipeline did not get answers to the many questions they have about the project at the Dec. 3 New Franklin City Council meeting, which developers of the pipeline had been scheduled..."

Washington Post:  Sub-$60 Oil Has U.S. Drillers Laying Down Most Rigs in Two Years   -   "U.S. oil drillers idled the most rigs in almost two years as they face oil trading below $60 a barrel and escalating competition from suppliers abroad.  Rigs targeting oil dropped by 29 this week to 1,546, the lowest level since June and the biggest decline since December 2012, Houston-based field services company Baker Hughes Inc. said on its website yesterday.  As OPEC resists calls to cut output, U.S. producers including..."


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