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Thursday, April 30, 2015

Letter to the Editor: Rover Pipeline Good for Ohio Workers, Consumers, Businesses, and Taxpayers

The Rover Pipeline project has received considerable attention on the Daily Digger – and rightly so. It’s a key piece of infrastructure for the natural gas industry in Ohio.

It will undoubtedly contribute to our nation’s energy security by making it easier to transport clean, affordable natural gas from its domestic source to the consumers and businesses who can use it to heat their homes, power manufacturing, and provide fuel to countless other machines and devices.

Just as important, the Rover Pipeline will employ thousands of Ohioans. In fact, of the estimated 10,000 construction jobs that will be created by this $4.2 billion project, more than half are anticipated to be located right here in Ohio.

These will be good, well-paying jobs that put many skilled residents of our state to work. In addition, many of the parts needed for the pipeline will be sourced from local manufacturers, putting even more people to work in direct support of this important project.

That’s not only good for these workers and their families, it’s good news for the Ohio economy because as they generate more income, they will be able to spend it at local businesses. That’s the kind of economic shot in the arm that will really benefit us here at home.

Given that April is National Safe Digging Month, it must be highlighted that the work that will be done to construct the pipeline will be done in an environmentally friendly way that respects the land it passes through. A third party will help monitor the work to make sure that things are left in as good or better shape as they were found when the project is done.

The Rover Pipeline will also generate revenues for state and local governments through property taxes totaling an estimated $147 million in the first year alone. That will really help the budget challenges that governments across our state face.

When you consider all of the benefits of the Rover Pipeline, it’s clear that it’s a project that should be undertaken as soon as possible. If everything remains on track, construction should begin by next January. When the project is done, Ohio workers, businesses, consumers, and taxpayers will all come out ahead.

Ryan Augsburger
Managing Director, Public Policy Services

The Ohio Manufacturers' Association
Protecting and growing Ohio manufacturing www.ohiomfg.com

33 N. High Street
Columbus, OH 43215
Tel: 614.629.6817
raugsburger@ohiomfg.com
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04/30/2015 Links of the Day: Bats Affecting Drillers, Did Professor Hide Ties to Chesapeake in Recent Study, and More

Washington Times:  Obama bat protection decried as ploy to thwart oil and gas extraction, logging   -   "A tiny brown bat known for its long ears is giving the creeps to those fearful of its potential to make jobs in the East and Midwest disappear. Two weeks ago, the Fish and Wildlife Service listed the northern long-eared bat as “threatened” under..."

Daily Jeffersonian:  ET ROVER PIPELINE GETTING READY TO ROLL IN 2016   -   "The Energy Transfer Rover Pipeline scenario continues to unfold with few surprises. Well, maybe one. Back in November 2014, Energy Transfer submitted the necessary paperwork to the Federal Energy Regulatory Commission to begin..."

Syracuse.com:  Critics say SU prof hid ties to gas driller Chesapeake in fracking study   -   "A Syracuse University researcher has come under fire from anti-fracking activists for failing to disclose his ties to the gas industry in a recent study. Donald Siegel has said he has a contract with Chesapeake Energy Corp., and another author of the paper worked..."

Seeking Alpha:  EQT Corporation's (EQT) CEO David Porges on Q1 2015 Results - Earnings Call Transcript   -   "Moving on to our dry gas Utica well, as you know, we spud this Greene County well in November. During the drilling of the curve, we encountered higher than expected reservoir pressures, and based on the pressures observed, we needed to significantly increase our mud weight, which required..."

The New Republic:  Big Oil to Pope Francis: We Know What's Best for the World's Poor   -   "Here's a hint: Heartland Institute, a conservative think tank closely aligned with the fossil fuel industry and climate-change denial, will send its own “experts” to the Vatican to argue against the Pope's points in a side panel for reporters. These experts will no doubt..."

Energy in Depth:  Columbus Anti-Fracking Rally a Huge Bust   -   "This week, anti-fracking activists announced that they would be appearing on the steps of the Ohio Statehouse in Columbus to protest House Bill 8, which supports the leasing of mineral rights on state-controlled land. The bill passed in the Ohio House in March on a unanimous..."

US News:  America's Good News Energy Story   -   "The United States is beginning to realize the strategic benefits of the fracking revolution. And they just keep growing. This week at the IHS CERAWeek energy summit in Texas, Secretary of Energy Ernest Moniz said that the United States anticipated "becoming big players" in the global liquefied natural gas market and that “there’s a good chance that..."

FuelFix:  OPEC oil output near 2 1/2-year high as Saudis show no letup   -   "OPEC oil production was little changed in April near the highest level since November 2012, as Saudi Arabia pumped 10 million barrels a day. Production by the Organization of Petroleum Exporting Countries slipped 1,000 barrels to 31.295 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 267,000 barrels higher to..."

Pittsburgh Business Times:  Monster wells boost the potential for Range Resources' southwestern Pennsylvania acreage   -   "Officials from Range Resources Corp.(NYSE:RRC) say that two recently drilled natural gas wells in Washington County help demonstrate that the company is sitting atop of the best part of..."

FT.com:  Energy earnings run dry in Americas   -   "The slump in oil and natural gas prices since last summer has driven the American production operations of the world’s largest oil companies into losses. ExxonMobil and ConocoPhillips of the US on Thursday reported that they lost money on oil and gas production in their home country in the first quarter. Meanwhile, Royal Dutch Shell disclosed a $1.1bn loss at its upstream exploration and production business in the Americas, and suggested..."

ThinkProgress:  Air Pollution From Fracking Wells Could Be Traveling Hundreds Of Miles Downwind   -   "Air pollution from hydraulic fracturing operations can likely travel hundreds of miles, even into states with little or no fracking, a new study has found. The study, published in the journal Atmospheric Environment, looked at hourly measurements of air pollutants like ethane and methane — gases that are found in natural gas — in Baltimore, Maryland and..."

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Introducing The Daily Digger Mobile App!

We are happy to introduce our new app for The Daily Digger!

In over 3 years of publishing The Digger newsletter and The Daily Digger blog, we have shared over 3,000 articles with our readers.  We know that many access the site via their smartphones and tablets, and we hope that this new app will make it much more convenient to access the latest news and reports on the Utica shale - wherever you may be.



FEATURES


NEWS - Of course, you will be able to use the app to keep up-to-date on the latest Utica shale events.  Just tap on the "Latest News" icon and you can view the mobile version of The Daily Digger blog.

INTERACTIVE MAPS - Some of the most popular posts we have shared over the years have been well maps.  We hope, then, that all who download the app will enjoy being able to access interactive well maps in the palm of their hand.  The latest activity maps from the Ohio Department of Natural Resources will also be easily accessible.

REPORTS - Readers have also enjoyed our summaries and breakdowns of production data, as well as our weekly updates on permitting activity in the Utica shale.  That information is easily available in the "Reports" section of The Daily Digger app.  Other relevant reports and data will be added to this section as well.

SPECIAL OFFERS - The "Digger Deals" section of the app will share discount offers from our advertisers that are available to readers of The Daily Digger.  Remember, our sponsors are the only reason that we can afford to bring you all of this data through The Digger newsletter and The Daily Digger blog at no charge.  Please visit them, support them, and let them know that you saw them in The Digger and on The Daily Digger blog.

You can also check out the "Digger Deals" this month for information on our May 2015 monthly sweepstakes; find out how you could win the prize!

SOCIAL INTERACTION - Users of the app will have the option of posting messages to the "Social Wall", or using the "Chat" function to discuss the latest news.  Further, you can access The Digger Twitter feed and Facebook pages without needing to leave the app.

GET IT NOW


It is our sincere hope that you will enjoy the new app, which is available now at no charge in both the Google Play and Apple iTunes market.













Alternatively, you can also click right here if you are not using an Android or Apple device, and use the app in your mobile browser (just bookmark the site, add it to your launch page, and it will be almost like having the app installed on your device).

No matter what device you use, please scan this QR code and it will take you to the appropriate market listing or webpage to use the app on your device.


TWO QUICK REQUESTS


We have done testing on multiple devices, but please bear with us as we continue working to refine the app.  If you have any problems, suggestions, or feature requests, please send them to us by emailing admin@thedailydigger.com.  We would greatly appreciate it if you would communicate any concerns or problems to us and give us the chance to address them before posting any poor ratings or reviews.  This is our first app, and we'll do what we can to make it work for everyone.

Also, on Apple devices the app is optimized for iPhone, but it will work fine on iPad or iPod.  If you search for The Daily Digger on an iPad, it may not initially show up.  If you don't see The Daily Digger after searching for it, look to see if it says "iPad only" in the upper left hand corner of the App Store screen.  If so, tap on that and then when it drops down tap "iPhone only."  You should then see the app in your search results and be able to install it.  Of course, the easiest way is to simply scan the QR code or click on the "Available on the App Store" box above in this post.


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Kinder Morgan Considering a Second Ohio Pipeline

From Powersource:
Kinder Morgan is evaluating whether to build a second pipeline to take natural gas liquids from Ohio’s Utica Shale to Ontario. 
The second pipeline, dubbed Utopia West, is in the very early stages of consideration, according to a company spokeswoman. 
The Houston-based midstream giant already has begun work on its $500-million Utica To Ontario Pipeline Access (Utopia) East project, which will ship ethane and ethane-propane mixtures from Ohio to Canada. 
That pipeline is a 240-mile, 12-inch diameter pipeline originating in Harrison County, Ohio, that will connect to Kinder Morgan’s Cochin Pipeline near Riga, Michigan. From there, Kinder Morgan plans to move product eastward to Windsor, Ontario. 
Utopia East is expected to be in service in January 2018 and have an initial 50,000 barrels per day of capacity with the capacity for expansion to more than 75,000 b/d.
You can click here to read more.

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New Poll: Fracking Not as Popular as it Used to Be

From NGI:
Less than half (44%) of Americans say they are familiar with hydraulic fracturing (fracking) and among them, 44% oppose it while 42% said they support fracking, according to the latest University of Texas at Austin (UT) Energy Poll. A majority of respondents said cities should have the power to ban fracking within their borders. 
The Latest UT Energy Poll IS the first to find That more Respondents Oppose fracking than Support it. Two years ago, fracking HAD Support Among 45% of poll Respondents, but That WAS down from 48% in the Prior year (See Shale Daily, April 11, 2013 ). As in previous Surveys, the responses fall out Along political lines. Among survey Respondents familiar with fracking, 65% of Republicans Support it, Compared with only 28% of Democrats. 
"Support for hydraulic fracturing on public lands also has declined," researchers said. "Among survey respondents familiar with the practice, 42% say its use should be banned on public lands, compared with 34% a year ago." 
Political ideology comes up again here, with 57% of Democrats supporting a ban of fracking on public lands, compared with only 23% of Republicans. Conversely, 56% of Republicans said fracking on public lands should be promoted, compared with only 23% of Democrats surveyed.
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Chesapeake Utilities Corporation Completes Merger With Gatherco, Inc.

DOVER, Del., April 1, 2015 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or "Company") today announced completion of the merger of Gatherco, Inc. ("Gatherco") into Aspire Energy of Ohio, LLC ("Aspire Energy"), Chesapeake Utilities' newest wholly-owned subsidiary. The transaction had an aggregate value of approximately $59.2 million.

Gatherco, located in Orrville, Ohio, was established in 1997 when it acquired Columbia Gas Transmission's natural gas gathering assets in Ohio. Gatherco has operations in 40 counties throughout the state. Gatherco's assets include 16 gathering systems and over 2,000 miles of pipelines and right-of-way in central and eastern Ohio.

With the merger now completed, Aspire Energy will use these assets to provide natural gas midstream services, processing and transportation services to over 300 producers, and wholesale natural gas supply to over 30,000 end users in Ohio. Aspire Energy will report to Elaine B. Bittner, Chesapeake Utilities Senior Vice President of Strategic Development. "This transaction is a direct result of investments that we began making in 2013 to implement our Company's strategic growth plan. In addition, this is our first significant non-regulated natural gas value chain initiative executed by a cross-section of our employees to actualize strategic objectives in that growth plan," Ms. Bittner said.

Michael P. McMasters, President and Chief Executive Officer of Chesapeake Utilities, remarked, "We are pleased with how efficiently the merger was completed. It is a great strategic win for the management and customers of both companies and is projected to generate accretive earnings in the first full year of operation following the merger. In addition, we believe that there are significant growth opportunities to add both production and distribution customers in and around the existing system. Gatherco's valuable rights of way could also present additional opportunities for growth."

Tony Kovacevich, President of Gatherco, added, "Our employees are happy to be joining the Chesapeake Utilities family of companies and look forward to having the resources to capitalize on our growth opportunities. As Aspire Energy, we will continue to provide our customers with the high-quality service they are accustomed to receiving, and we welcome the values and service tradition that Chesapeake Utilities now brings to Ohio."

The definitive merger agreement was announced on February 2, 2015 and was approved by Gatherco shareholders on March 20, 2015.

About Chesapeake Utilities Corporation 

Wednesday, April 29, 2015

Expert: New Breed of CEO Needed in Oil and Gas Industry

Les Csorba
From Reuters:
The energy sector will need a "new breed" of executives who innovate in real-time to effectively navigate through the crude oil price collapse and the industry transformation that is expected to follow, an energy headhunter and leadership consultant said on Monday. 
The oil price crash represents for some "a great chance to seize on the crisis and turn it into an opportunity," Les Csorba, a partner with Heidrick & Struggles in Houston, said on the sidelines of the CERAWeek conference. 
As baby-boomer oil executives near retirement, their replacements need to abandon the notion that production growth should be pursued at any cost, a mentality that dominated the sector before drilling for oil and natural gas took off in North America's shale formations.

Two executives that typify the new breed include the chief executive officers of Apache Corp and Chesapeake Energy . Apache's John Christmann and Chesapeake's Doug Lawler represent "a distinct departure from the stereotypical swashbuckling oil and gas executive whose free spending and large bets on assets risked placing the business in a precarious position," said Csorba.
Read more by clicking here.

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West Virginia Cracker Plant Put on Hold as Company Reconsiders Plans

Companies tapping the brakes on
West Virginia cracker plant
In what could serve as a cautionary tale to Belmont County about not counting their chickens before they hatch, plans for an ethane cracker plant in West Virginia are delayed as the companies involved in the joint venture think twice about starting construction.

From the Pittsburgh Business Times:
A joint venture's plans for an ethane cracker plant in West Virginia has been paused. 
Braskem and partner Odebrecht confirmed in a joint statement that they are re-evaluating plans to build a plant along the Ohio River in Parkersburg, W.Va., but stressed that the project wasn't being cancelled outright. 
"From the beginning, we have taken a deliberate approach to Project ASCENT. Under the current energy scenarios, the original configuration of Project ASCENT needs to be re-evaluated, and a final investment decision on the project will require more diligence," the statement said. "We have already begun our re-analysis and will continue to take a prudent, deliberative approach to ensure that ASCENT's business will be successful and sustainable for the region, our shareholders, team members, industry partners and clients."
Read more by clicking here.

Similar stalling has been the norm for another ethane cracker project in Pennsylvania.  While Belmont County is elated about the idea of a cracker being built there, these other projects provide a warning that it isn't a reality until work actually gets underway.

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Oil Industry Debt Piles Up, Which Threatens to Extend Price Slump

From the Wall Street Journal:
Add in syndicated bank loans and total borrowing by the oil-and-gas sector rose to $ 2.5 trillion at the end of 2014, up from $ 1 trillion of outstanding debt at the end of 2006, according to the Switzerland-based Bank for International Settlements. It has warned that an "oil-debt nexus" could create a vicious circle whereby overindebted companies pump more oil to ensure they can pay interest on their loans, adding to the current global oil glut, and further depressing energy prices. 
"Rapidly rising leverage creates risk exposures in the nonfinancial corporate sector that may be transferred across the global financial system," said in a recent report. Any selloff of oil-company debt could hit corporate bond markets hard, given the huge amounts outstanding, the bank said. 
Oil companies are borrowing more in part because they were caught flat-footed by the halving in oil prices since last summer. Several, including Chevron, BP PLC and France'sTotal SA, It has announced plans to slash costs and capital spending. But the oil-price decline means revenues have fallen quicker than they can cut outlays.

Some major oil companies are borrowing more to ensure they can afford still-high investment plans and keep their commitments to pay generous dividends-a key element of their appeal to equity investors.
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Air Quality Results are in from Study in Ohio’s Shale Gas Region

Carrollton Ohio: The results from the initial stationary air sampling study performed by the University of Cincinnati and Oregon State University have been published. The study was conducted about a year ago near shale gas operations in Carroll and Columbiana Counties to gain an understanding of whether these industrial activities have a significant impact on air quality.

Erin Haynes, DrPH from the University of Cincinnati and Diana Rohlman, PhD from Oregon State University, will be presenting an overview of the study’s results at Carroll Concerned Citizen’s May 7 meeting. The meeting will be held at the Church of Christ – Christian Disciples located at 353 Moody Ave. Carrollton. It begins at 7pm and is free and open to the public.

“There are an increasing number of studies in the news these days about shale gas operations’ impact on air quality and we are glad to see that Ohio’s shale boom epicenter is part of just such a study,” said Paul Feezel the group’s chair. “Carroll County counts excellent air quality as one of its many quality of life treasures and it is important to know whether changes are occurring.”
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Tuesday, April 28, 2015

Suicide in the Oilfield – Purpose & Hope

by Lori Pope, Oilfield Families of America

I was talking with my sister who works for Weatherford and sells thru-tubing and she mentioned to me that there had recently been 3 suicides in our Houston area oilfield community. She continued on to tell me about how everywhere she goes these days, she encounters fear and insecurity and acknowledged that this is no way to live.

My heart broke hearing of these tragic suicides and knowing that behind each one, was the sense of absolute despair and hopelessness. These are hard times we are in right now and no one really knows what the future holds, but still… LIFE IS PRECIOUS and worth living. There is ALWAYS HOPE, but sometimes we just don’t see it or know where to look for it.

By our very nature of being human, we are resilient, but WE – The Strong, The Proud, Hardworking, Oilfield ARE without a doubt the MOST resilient species on earth. We can NEVER GIVE UP, we can NEVER SURRENDER! The oil economy DOESN’T CARE if it loses another soul, but our Oilfield Family cares, I care and God cares. We were all created with great purpose. Many of us are still seeking to know what that purpose is. Times like these can test our strength, our love and our faith, but can also be the cause of re-discovering ourselves and what is most important in life.

CS Lewis wrote; “Hardship often prepares an ordinary person for an extraordinary destiny.”

Viktor Frankl, an Austrian psychiatrist and Holocaust survivor said: “What is to give light must endure burning.”

“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time” – Thomas Edison

Jesus said, “Don’t let your hearts be troubled. Trust in God, and trust in me.”

“Tough times don’t last, tough people do!” – Sissie Field

If there is one kind of man-kind on this earth that can survive these hard times and come out stronger, it is my brothers and sisters in the oilfield. We are an Oilfield Family and a force to be reckoned with and now more than ever before, we have to be there for each other as sources of inspiration, hope and love. We are here for you and want to continue to inspire you and encourage you. Reach out if you need us!

With deep love and dedication,
Lori Pope & Sissie Field
Oilfield Families of America
OilfieldFamilies.com

(See Suicide Prevention Hotline info below)

Need help? United States 1 (800) 273-8255
National Suicide Prevention Lifeline
Hours: 24 hours, 7 days a week
Languages: English, Spanish
www.suicidepreventionlifeline.org

Copyright Oilfield Families of America. Reprinted with permission. Click here to view original post.

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Links of the Day 04/28/15: Anti-Fracking Paintings From Beyond the Grave, 1st-Quarter Reports, and More

Gas & Oil:  Taxation out of control   -    "It appears that Governor Kasich has hit on a surefire way to reduce state income taxes for thousands of Ohioans --- eliminate their jobs. The prime “beneficiaries” of this tough love tax treatment would be the quarter million or so men and women whose jobs are supported by..."

Bennington Museum:  CHANNELING GRANDMA: FRACKING PAINTINGS BY LINDA FINCH   -   "Channeling is the belief that a person's body has been taken over by a spirit for the purpose of imparting wisdom and bringing about a conscious transformation. I feel that Anna Moses guided my hands in an effort to inform and educate people to the risks that lay ahead for the American rural landscape. - Linda Finch, Artist"

CNBC:  Aubrey McClendon launching 'blank check' company   -   "Despite an embarrassing lawsuit accusing him of stealing trade secrets, energy guru Aubrey McClendon is raising additional cash for new oil and gas exploits. This time he's using a specialized, $200 million investment vehicle that is set to go public soon, said people..."

Washington Times:  Oil, gas operators could be vulnerable to hackers   -   "In the vast network of data, drilling and pipes that’s made Marcellus shale an international energy reserve, computer attacks pose a serious threat. Hackers target energy companies all the time because..."

Shale Play:  Wheeling Not in GreenHunter’s Immediate Future   -   "GreenHunter Resources plans to barge what the company calls "oilfield waste" from local natural gas operations along the Ohio River by the end of the year, but the firm will not be loading the waste onto barges in the Warwood section of Wheeling. At least not anytime soon..."

Columbus Business First:  Belmont County officials elated after 'surreal' victory landing cracker plant   -   "It felt a little dream-like for Belmont County Commissioner Mark Thomas on Wednesday when he briefed the media about plans for a major petrochemical plant in the county. It’s not often a multibillion-dollar plant gets..."

NGI:  Nabors Lays Off 5,500, Sees Rig Use Continuing to Fall   -   "Contract driller Nabors Industries Ltd. has reduced its global workforce by nearly 5,500 people, or 18%, since the end of December, with most of the reductions hitting US and Canadian staff..."

EQT:  EQT Reports First Quarter 2015 Earnings   -   "EQT Corporation (NYSE: EQT) today announced first quarter 2015 net income attributable to EQT of $173.4 million, or $1.14 per diluted share (EPS), comparable to the first quarter 2014 earnings of $192.2 million, or $1.26 per diluted share. Adjusted net income was $164.3 million in the first quarter 2015, $41.2 million lower than the..."

Gas & Oil:  2015 Oil & Gas Expo: The Utica Hotspot   -   "Natural gas liquids ethane, propane, and butane are all being pulled out of the eastern Ohio ground and subsequently pushed through pipelines then processed. These wet gases are pooled in sweet spots across the Utica Shale, anchored at the Appalachian Basin. Despite the current downtown and volatility of the..."

Seeking Alpha:  Some Of PDC Energy's Wells Can Break Even At $22 WTI   -   "On April 9, PDC Energy (NASDAQ:PDCE) hosted its annual analyst day event for 2015, providing investors with a massive update on its operations. PDC Energy is a small upstream player with operations in the Utica shale and the Wattenberg Field, which houses the prolific Niobrara and Codell..."

Energy in Depth:  Five Questions about SMU’s New Azle Earthquake Study   -   "Today, scientists from Southern Methodist University, the University of Texas, and the U.S. Geological Survey released a new research paper in the journal Nature Communications, entitled “Causal factors for seismicity near Azle, Texas.” Through a process of elimination, the researchers concluded..."

Washington Post:  The U.S.’s energy infrastructure will need major changes, says Obama report   -   "The U.S. electric grid will require major changes to reposition itself for the future challenges of climate change, new technologies, and national security in coming decades, according to a first-ever “Quadrennial Energy Review” released by the Obama administration. The report says..."

Washington Free Beacon:  Report: Science Behind NY Fracking Ban Tainted by Money, Politics   -   "The scientific research underlying New York’s ban on an innovative oil and gas extraction technique was funded and produced by activists deeply involved in the political campaign to ban the practice, according to a report..."

State of Michigan Attorney General:  Schuette, Creagh Announce $25 Million Civil Settlement, Two Criminal No Contest Pleas by Chesapeake Energy Corp. to Resolve Racketeering, Bid-Rigging Allegations


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Munroe Falls Repeals Unconstitutional Drilling Regulations

From the Stow Sentry:
Two months after the Ohio Supreme Court delivered a final blow to the city's attempts at controlling oil and gas drilling within its boundaries, City Council has done a bit of housekeeping connected to it. 
Council unanimously approved April 21 an ordinance repealing Chapter 1329, which provides drilling regulations, of the city's codified ordinances. 
The chapter, the bulk of which dates back to 1980, covers areas such as permits, public hearing requirements, consent of neighboring property owners, inspections, maintenance and landscaping. 
Council introduced the ordinance for first reading March 17. Law Director Jack Morrison told Council April 7 that the chapter serves no point since the city cannot enforce its provisions. 
"While you are not required to repeal it, I think it is incumbent on the city, because it has been declared unconstitutional by the Supreme Court, to repeal it," said Morrison.
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Permitting Picks Up on Latest Report as Rig Count Continues to Fall

There was an uptick in new permitting for Utica shale drilling last week, according to the weekly report from the Ohio Department of Natural Resources.  In fact, more permits were issued last week than in the three preceding weeks combined.

In all, there were 10 new permits issued, compared to just nine over the three weeks prior.  Four of the new permits were issued to Chesapeake for wells in Carroll County, four more went to Antero Resources for Monroe County wells, and the final two were for American Energy Utica wells in Belmont County.

There have now been 1,883 permits issued for horizontal drilling in Ohio's Utica shale.  1,463 wells have been drilled, and 854 are now producing.  Despite the increased permitting activity, the Utica rig count continued to fall.  It now stands at just 22.

You can view the entire report below, or by clicking here.


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EIA Map Shows Shale Plays in Lower 48 States



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Costs for Fracking Are Dropping, Helping Producers Ride Out Low Oil Price Storm

From Reuters:
Oil is trading around $55 a barrel, and most U.S. shale fields are seen as having break-even costs of $40-$70 a barrel. 
In fourth-quarter earnings calls, operators initially were looking for prices cuts for services like fracking of around 20 percent. Now those savings appear to be steeper. 
"We're seeing costs fall more for fracking than drilling," Mike Bahorich, chief technology officer at Apache Corp told a CERAWeek breakfast meeting. 
He estimates Apache's fracking costs have fallen about 30 percent, while drilling costs have tumbled 20 percent. 
Gary Gould, senior vice president of operations at Continental Resources Inc said his company, which has its largest operations in North Dakota's Bakken Shale, had seen service costs "falling most steeply in recent weeks and months." 
Analysts at IHS CERA expect fracking costs to fall 32 percent this year, down from a prior forecast for a decline of 24 percent.

Lower fracking costs, along with steep cuts to capital spending and a focus on drilling in only the most profitable areas in shale basins are helping producers weather the downturn.
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Weatherford Exec: Half of U.S. Fracking Firms Will Be Dead or Sold by End of 2015

From Bloomberg:
Half of the 41 fracking companies operating in the U.S. will be dead or sold by year-end because of slashed spending by oil companies, an executive with Weatherford International Plc said. 
There could be about 20 companies left that provide hydraulic fracturing services, Rob Fulks, pressure pumping marketing director at Weatherford, said in an interview Wednesday at the IHS CERAWeek conference in Houston. Demand for fracking, a production method that along with horizontal drilling spurred a boom in U.S. oil and natural gas output, has declined as customers leave wells uncompleted because of low prices. 
There were 61 fracking service providers in the U.S., the world’s largest market, at the start of last year. Consolidation among bigger players began with Halliburton Co. announcing plans to buy Baker Hughes Inc. in November for $34.6 billion and C&J Energy Services Ltd. buying the pressure-pumping business of Nabors Industries Ltd.

Weatherford, which operates the fifth-largest fracking operation in the U.S., has been forced to cut costs “dramatically” in response to customer demand, Fulks said. The company has been able to negotiate price cuts from the mines that supply sand, which is used to prop open cracks in the rocks that allow hydrocarbons to flow.
Read the rest of the article by clicking here.

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Gates Mills Committee Looks to Formulate Plan for Fracking in Area

From Cleveland.com:
Gates Mills has organized a committee of regional players and residents to deal with possibility of fracking in the village, after a year of debate over drilling gas wells. 
Gates Mills Village Council, with backing from Mayor Shawn Riley, founded the Regional Commission to Study and Address Oil and Gas Well Drilling late last year. The group of more than 40 has been meeting since January. 
Members include the Lyndhurst Fire Chief Mike Carroll, Gates Mills Fire Chief Tom Robinson, Mayfield school board member George Hughes, Pepper Pike Mayor Richard Bain and Bentleyville Councilwomen Karen Esposito and Kathleen Hale. 
The commission aims to develop a formal plan to tackle fracking in and around eastern Cuyahoga County, as cities grapple with the lack of local control over drilling regulations.
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Monday, April 27, 2015

Report: Study Used to Justify New York Fracking Ban Heavily Influenced by Anti-Fracking Groups

From Energy in Depth:
TESTIMONY OF SIMON LOMAX
WESTERN DIRECTOR, ENERGY IN DEPTH
HEARING ON
“HYDRAULIC FRACTURING: BANNING PROVEN TECHNOLOGIES ON POSSIBILITIES RATHER THAN PROBABILITIES?”
BEFORE THE COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
U.S. HOUSE OF REPRESENTATIVES
APRIL 23, 2015


Chairman Smith, Ranking Member Johnson and distinguished members of the Committee, thank you for inviting me to testify. My name is Simon Lomax and I am here today representing Energy In Depth, a research, education and outreach program of the Independent Petroleum Association of America. 
The IPAA represents thousands of oil and natural gas producers and service companies, and its members are responsible for developing 95 percent of the nation’s oil and gas wells. 
Today, Energy In Depth is releasing a whitepaper called A Look Inside New York’s Anti-Fracking Echo Chamber. It deals with the unprecedented decision of New York Gov. Andrew Cuomo to effectively ban Marcellus Shale development in the Empire State, through a ban on so-called high-volume hydraulic fracturing, or fracking for short. 
I say unprecedented, because according the Wall Street Journal, New York is the first state with significant shale gas resources to ban fracking. Gov. Cuomo’s decision was completely at odds with earlier findings from state and federal environmental regulators that hydraulic fracturing has been used safely for decades. 
In fact, Gov. Cuomo’s decision overturned two earlier findings from New York state environmental regulators, in 2009 and 2011, that hydraulic fracturing in the Marcellus Shale could be conducted safely under stringent regulations. 
The reaction to the New York ban has been telling. While some fringe environmental groups are celebrating, others in the environmental movement say this simply goes too far. For example, Former New York City mayor Michael Bloomberg – a major ally of environmental groups – called Gov. Cuomo’s decision a misguided policy that “doesn’t make any sense at all.” 
President Obama’s Interior Secretary Sally Jewell, who served on the board of a national environmental group before joining the president’s cabinet, reacted by saying fracking bans are, “the wrong way to go.” She added that supporters of such bans “don’t understand the science.” 
Similarly, California Gov. Jerry Brown (D) – a celebrated environmentalist – flatly refused to ban hydraulic fracturing when the subject came up recently in an interview on Meet The Press. 
Against that backdrop, the question our whitepaper seeks to answer is how did Gov. Cuomo justify a decision that falls so far outside the mainstream? In other words, what makes New York the exception to the rule? 
To justify the ban, the Cuomo administration produced a 184-page literature review of recently published research papers. But, as detailed in our whitepaper, we discovered significant and undisclosed ties between some of the research used to ban fracking in New York and the political campaign to ban fracking in New York. 
For example, one paper was written by fracking opponents who actually used buckets lined with plastic bags to take air samples near oil and gas wells. You might think this kind of paper would get shot down in the peer-review process. 
But the peer-reviewers were also fracking opponents. One of them was Sandra Steingraber, the co-founder of New Yorkers Against Fracking, the state’s leading anti-fracking campaign group. 
When challenged by a reporter about this, Steingraber insisted her peer review was “absolutely objective.” Then, a few days after that interview, she gave a speech at a post-ban celebration with anti-fracking activists in Albany, where she said “it is so sweet now to come together in one room to tell the story of our victory.” 
But there’s more. We found a network of environmentally active foundations funding the groups that produced the research paper, some of the media outlets that covered the paper, and the campaign organizations that pressured the Cuomo administration into banning fracking. These financial ties totaled $3.7 million at the research phase, $2.2 million at the media phase, and more than $16 million at the campaign phase. 
This wasn’t an isolated case. We found at least five more research papers cited by the Cuomo administration where anti-fracking foundations provided funding to the researchers, funding to the media outlets that promoted the research, and funding to the campaigns that seized upon the research to drum up political opposition to shale development in New York. 
The anti-fracking work of these foundations was led by the Park Foundation, based in Ithaca, New York, whose president has openly admitted to funding anti-fracking research, media and political campaigning in an effort oppose fracking from every angle. 
In effect, these foundations built an echo chamber to drown out the facts in the debate over hydraulic fracturing and Marcellus Shale development in New York. 
Thank you again for the opportunity to testify, and I look forward to your questions.
Here is the report:


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Analyst: With U.S. Shale as Oil Swing Producer, Recovery Will be Volatile and Slow

From Bloomberg:
With OPEC ceding control for the first time since the 1980s, U.S. shale oil has been anointed the world’s new “swing producer” by everyone from ConocoPhillips and Goldman Sachs Group Inc. to former Fed Chairman Alan Greenspan. 
But can America’s oil really swing it? 
Producers cut billions in spending, idled half the country’s rigs and kept more than 3,000 wells off the market, and it still took five months for U.S. production to start dropping. Analysts and banks say a recovery in production will also prove slower and more difficult than it would be for a single producer like Saudi Arabia.

“When you think of a swing producer, you think of OPEC and you think of spare capacity that can be turned on and off,” said Trisha Curtis, director of oil and gas research at Energy Policy Research Foundation Inc. “U.S. oil can respond, but the response is going to be messy, it’s going to be jagged and it’s not going to happen overnight.” 
At the heart of all this is the fact that U.S. oil supply isn’t controlled by a single Saudi Aramco-like entity with a lever on all 9.4 million barrels of daily oil output. 
“The traditional market balancer isn’t there,” Daniel Yergin, vice-chairman of energy analyst IHS Inc., said April 14. “People have started to describe the United States as a swing producer. If it is the swing producer,” the recovery is going to be a lot more volatile, he said.
The rest of that article can be read by clicking here.

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Monroe County Cracker Plant in Ohio Still Moving Forward

From DownstreamToday:
After meeting in Houston April 10 to review updated project economics and financing needs, the Appalachian Resins, Inc. (AR) development team has agreed to continue moving forward with plans to build an ethylene/polyethylene production facility in Monroe County, Ohio, DownstreamToday has learned. 
"The world market price of polyethylene tracks the price of crude oil," Jim Cutler, AR's chief executive officer, told DownstreamToday. "This is because most of the world’s ethylene is produced from naphtha, which is obtained from crude oil. Lower crude prices mean lower naphtha prices, which in turn triggers lower polyethylene prices. The lower crude price scenario reduces the relative advantage of using ethane as an ethylene feedstock. In addition to lower polyethylene margins, we have seen an escalation to capital costs." 
As this August 2014 article indicates, AR had estimated an approximately $1 billion price tag for the project. 
"Total project costs are now viewed to be about $1.3 billion," said Cutler. "Even with changing conditions, Appalachian Resins still appears to be a viable project. This is because of the plant's location and configuration."
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Thursday, April 23, 2015

Belmont County a Finalist for Ethane Cracker Plant

From JobsOhio:
Today Governor John R. Kasich announced that PTT Global Chemical (PTTGC), Thailand's largest integrated petrochemical and refining company, and its project partner, Marubeni Corporation, a Japan-based company, have selected a site in Belmont County, Ohio for the possible construction of a world-scale petrochemical complex, also known in the industry as an ethane cracker. With a site now selected, PTTGC and Marubeni will take the next 12-to-16 months to complete the detailed engineering design and permitting at the Ohio site.

For nearly two years, PTTGC and Marubeni have considered project sites across the Utica and Marcellus shale region. JobsOhio, the private, non-profit corporation designed to drive job creation and capital investment in Ohio, has worked with the companies throughout this time and led the effort to move this project forward in Ohio. 
"Ohio is at the center of America's new energy industry, and the smart companies want to come here to be part of the great things that are happening. We are one step closer to landing a new, multi-billion dollar investment in eastern Ohio, and that's exciting news for our state, the region and Belmont County," said Kasich. "There is more work ahead before final decisions on this project are made, but I know our Ohio team will do everything we can to bring it fruition. We are excited about the possibility of working with companies of the caliber of PTTGC Global and Marubeni. A project of this size can help lift the region forever." 
If constructed, the ethane cracker would utilize ethane extracted from the region's Marcellus and Utica Shale formations. The facility would then "crack" the ethane into ethylene, which is used as a basis for plastics and resins contained in everyday items such as food and product packaging, textiles and pharmaceuticals.

"Working with JobsOhio and the state over the past two years has been a positive experience and we look forward to moving this project into the next phase," said Dr. Kongkrapan Intarajang, Executive Vice President of International Business Relations for PTTGC. "While we have not yet made final decisions on this investment, we will continue to work with Governor Kasich, JobsOhio and all of the local partners in an effort to make our vision a reality." 
John Minor, President and Chief Investment Officer of JobsOhio, added, "This project has been a truly collaborative effort, resulting in this good news for eastern Ohio and the state. JobsOhio's David Mustine and Matt Cybulski played leading roles working with PTTGC and Marubeni along with our regional partner Appalachian Partnership for Economic Growth and local development partners. I thank them for playing such integral roles in advancing the project to this point. An ethane cracker in Belmont would facilitate additional investments in the growing shale and petrochemical industries, and with greater investments come more job opportunities for Ohioans." 
PTTGC and Marubeni are expected to make a final investment decision in 2016. Should the project move forward, construction of the ethane cracker facility would take an estimated three and a half years to complete.
From The Intelligencer/Wheeling News-Register:
"The location makes sense because of where we are," Thomas continued, adding companies would not have to pay to ship the ethane as far if they can send it to the proposed site, just south of Shadyside along the Ohio River. 
Thomas said it is premature to indicate whether the developers or some governmental body would actually own the proposed plant, which can still be used to produce electricity in times of "peak demand" by FirstEnergy. Thomas also said it is too early to say exactly how much acreage the cracker facility would include. However, he said "the Dilles Bottom area in Mead Township will be dramatically changed." 
Both Commissioner Ginny Favede and Rep. Bill Johnson, R-Ohio, used the phrase "game changer" to describe the proposed ethane cracker. 
"The Belmont County site was chosen over locations in Pennsylvania and West Virginia. This is an exciting moment for the state, the region, and potential job seekers," Johnson added.
Now the question becomes: will the plant actually get built?  It will be a little while before we find out.

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Wednesday, April 22, 2015

Pair of House Democrats Introduce "Strongest Anti-Fracking Bill" Ever

From TheHill:
A pair of Democratic House members introduced a bill Wednesday to ban hydraulic fracturing for oil and natural gas, commonly known as fracking, on federal land. 
Reps. Mark Pocan (D-Wis.) and Jan Schakowsky (D-Ill.) touted the measure as the “strongest anti-fracking bill” ever introduced. It would cover national parks, Bureau of Land Management property, national forests, wilderness areas and other lands under federal jurisdiction. 
“Our national parks, forests and public lands are some of our most treasured places and need to be protected for future generations,” Pocan said in a statement announcing the bill on Earth Day.
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Baker Hughes and Halliburton Announce That They've Laid Off More People Than Previously Expected

First, from the Washington Post:
Halliburton Co. has cut 9,000 jobs — more than 10 percent of its workforce — in about six months and is considering more cost-cutting moves as falling oil prices sap demand for its drilling help. 
Halliburton executives disclosed the job cuts Monday on a conference call with investors. The Houston oilfield-services company reported a loss of $643 million in the first quarter. 
Oil prices plunged starting last summer, leading to a decline in drilling activity. Spot prices for crude have risen slightly since early January but remain about half their level of last July. 
That has led to belt-tightening across the industry as oil companies move to curb production, with oil-field services and drilling companies especially hard hit. 
Haliburton’s oilfield rival Schlumberger Ltd. said last week that it would cut 11,000 jobs on top of 9,000 planned job cuts that it announced in January.
Halliburton previously announced that it would cut 6,400 jobs.

Then there was this announcement included in the first quarter 2015 results from Baker Hughes:
"During the first quarter we took necessary actions to reduce our cost base and resize our footprint to mitigate current market conditions. These actions include the closure and consolidation of approximately 140 facilities worldwide along with the idling or impairment of excess assets and inventory. Correspondingly, we made the decision to increase our headcount reductions to a total of approximately 10,500 positions, or 17% of our workforce, which is 3,500 positions higher than what we previously announced. Combined, these actions are projected to reduce cost by more than $700 million on an annualized basis. 
"Looking out to the second quarter, we expect unfavorable market conditions to persist. North America and international rig counts are projected to continue declining across most onshore and shallow water markets, which would further intensify the oversupply of oilfield services. We will continue monitoring market conditions closely and will take actions as necessary to optimize efficiency, while retaining the capacity to flex up when market conditions improve. 
"Regarding the planned combination with Halliburton, I am pleased with the progress to date including a positive stockholder vote received in the first quarter. Notwithstanding the current market volatility and the pending merger, our management team and employees are working diligently to ensure we achieve our near term objectives, while maintaining focus on our strategic priorities. To that end, we remain committed to developing and deploying innovative technologies that enable our customers to lower the cost of well construction, optimize well production, and increase ultimate recovery."
There sure are a whole lot of people suffering the effects of the recent downturn in energy prices.

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Activist Sandra Steingraber Says Only Women with Jobs From Shale are Prostitutes and Hotel Maids

Sandra Steingraber
From the Washington Times:
A key figure behind New York’s statewide ban on hydraulic fracturing says that losing out on oil and gas jobs is no big deal because the industry only creates work for women as prostitutes and hotel maids. 
In an April 6 lecture at the University of Pittsburgh, biologist Sandra Steingraber of New Yorkers Against Fracking described the fight over oil and natural gas development as a feminist issue. 
“Fracking as an industry serves men. Ninety-five percent of the people employed in the gas fields are men. When we talk about jobs, we’re talking about jobs for men, and we need to say that,” Ms. Steingraber says in a video posted on YouTube by the industry-backed group Energy in Depth. 
“The jobs for women are ‘hotel maid’ and ‘prostitute,’” she says. “So when fracking comes into a community, what we see is that women take a big hit, especially single women who have children who depend on rental housing.” 
Supporters of the industry swung back by citing a 2014 report from the American Petroleum Institute, which found that women filled 226,000 oil, gas and petrochemical industry jobs, or 19 percent of those jobs.
Read more by clicking here. 


However Steingraber may qualify her comments, it is probably fair to ask what place someone who is willing to completely toss aside facts in order to make such an incendiary comment in support of her ideology could possibly have serving as a peer reviewer on a crucial report reviewing hydraulic fracking for the state of New York.  Of course, there are plenty who would probably say that it makes perfect sense to have an anti-drilling activist peer review a study when you have already made up your mind that you were going to ban drilling and tailored the study to support that viewpoint.

Regardless of how you may view the idea of having a diligent anti-drilling activist peer review research in that area of study, there can be no doubt that the many women who do have good jobs in the oil and gas industry have valid reason to be offended by Steingraber's comments.

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Women in Energy Summit Draws a Crowd at Zane State EPIC Center

From the Daily Jeffersonian:
There is more than one reason the "Women in Energy Summit" garnered so much attention -- women, in general -- have not taken advantage of the opportunities in the energy industry because working in gas and oil was always "a guy thing." Secondly, women of all ages want more information about what is out there for them. And, many of the women who are currently employed in the industry are getting ready to hang up their hard hats. 
The Summit, hosted by Congressman Bill Johnson (R-Marietta), at Zane State College EPIC Center in Cambridge Friday morning, was exactly their cup of tea. 
The event was focused primarily on the future generation of women who will have access to a plethora of jobs and careers in the gas and oil industry. 
Johnson said, "I want to make sure you know that there are many opportunities here in Ohio for you. The gas and oil industry has just begun to tap into our resources. We want you to know we are becoming the nation's and the world's most prolific energy producers, and we want you to be a part of it. To have a choice of the many jobs and careers that are available. And, we want you to prosper right here in your home towns." 
Approximately 144 women, including 50 female Cambridge Middle and High School students,. and 20 young women from Buckeye Trail High School, took advantage of a free highly charged dose of inspiration, motivation and education from 12 women who have earned the right to give advice on how to get a job, or have a career in the gas and oil industry.
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