Wednesday, July 31, 2019

Utica Shale Permitting Remains Very Slow Last Week

New permits issued last week: 1 (Previous week: 3)  -2
Total horizontal permits issued: 3129 (Previous week: 3129 +-0
Total horizontal wells drilled: 2654 (Previous week: 2650)  +4
Total horizontal wells producing: 2238 (Previous week: 2226)  +12
Utica rig count: 17 (Previous week: 17)  +-0

Tuesday, July 30, 2019

What Goes Up Must Come Down: U.S. Oil Production Peak Could Come Soon

From Forbes:
One of the most important questions in the global oil markets revolves around U.S. oil production. There is probably nothing OPEC would like to know more than when U.S. oil production will begin to decline. 
The resurgence of U.S. oil production over the past decade diminished OPEC's control of the global oil markets. In less than eight years, U.S. oil production climbed from under 6 million barrels per day (BPD) to more than 12 million BPD. This surge is arguably the only reason oil prices today aren't above $100/barrel (bbl). 
OPEC's current strategy seems to be to wait for U.S. production to begin declining so they can begin to regain control of the oil markets. 
They may not have to wait all that long. 
In last week's article, I covered the slowdown in oil production growth in the Permian Basin. This is the most important oil-producing region in the U.S., but of course it isn't the only one. And while most of the coverage of the resurgence of U.S. oil production has been primarily focused on shale oil and tight oil, U.S. offshore oil production has also made a big jump. Over the past decade, Gulf Coast oil production in the U.S. rose from about 1.2 million BPD to about 2.0 million BPD.
The whole article can be read by clicking right here. 

Ohio Agencies Say They Don’t Get Many Fracking Health Complaints

by Nicole Jacobs, Energy in Depth

Claims of health impacts from shale development have become a heated topic in the Appalachian Basin, with activists pushing a misleading narrative in the region. But the allegation that fracking is causing widespread public health issues is far from reality in the Buckeye State, according two state agencies.
In response to a handful of activists soliciting information on households living near shale development in an attempt to create an agenda-driven health registry, the Ohio Department of Health said it does respond to each complaint received about the shale industry. As Rebecca Fugitt, assistant chief of the department’s Bureau of Environmental Health and Radiation Protection told StateImpact though, regulators simply aren’t getting many complaints:
“No, we only get, maybe… it’s less than five a year…to be honest, it really is. We don’t get very many.” (emphasis added)
Similarly, the Ohio Department of Natural Resources received only 10 health complaints over 11 years from citizens living near oil and gas operations.
Nonetheless, activists led by the Heinz Endowments-funded Southwest Pennsylvania Environmental Health Project traveled from places like Dayton, Oberlin, Cleveland and Lake County – where there is little to no shale development – to solicit information from people living near Youngstown on their medical ailments in an attempt to link them to nearby shale development.
Numerous studies debunk activist fearmongering.
The low number of complaints is underscored by numerous studies that have found Ohio’s oil and natural gas industry is not having negative impacts on groundwater or air quality that could lead to health impacts.
Multiple peer-reviewed studies have found that the industry is not impacting groundwater in the region, including research from the University of Cincinnati. UC has spent hundreds of thousands of dollars to study the potential air and groundwater impacts of fracking. Despite utilizing multiple research methods, its researchers found no health issues attributable to natural gas extraction.
In fact, a 2018 study of groundwater in Ohio’s Utica Shale region stated:
“We found no relationship between CH4 concentration or source in groundwater and proximity to active gas well sites.”
“… our data do not indicate any intrusion of high conductivity fracking fluids as the number of fracking wells increased in the region.”
In addition, despite increased development, Ohio is spearheading nationwide carbon emissions reductions. Ohio had the highest reductions in the nation – a whopping 57 million metric tons (MMT) total and 50 MMT emissions from electricity generation – from 2005 to 2015.
Ohioans are seeing the benefits of industry growth.
The Buckeye State continues to set new natural gas production records, boosting economic activity in the region. During the fourth quarter of 2018, Ohio produced 663.5 billion cubic feet of natural gas –marking a new state quarterly production record and a nearly 32-percent rise over the same period in 2017.
This staggering growth is having a direct impact on the local economy, providing thousands of high paying jobs. Ohio Oil and Gas Energy Education Program Executive Director Rhonda Reda recently explained:
“In 2011, our industry employed around 14,000 Ohioans, and today that number has dramatically increased to nearly 200,000, thanks to the ongoing development of the Marcellus and Utica Shale formations. As a result, workforce development remains a priority for our industry.”
The statements from ODH and ODNR pushing back on activists’ attempts to create a false narrative confirm that Ohio’s shale industry is bringing benefits to residents across the state, while protecting the environment and public health. And while it is important to continue to evaluate potential health impacts, the claims being made by activists simply aren’t a reality in Ohio.

Article Asks Whether Good of Fracking Outweighs Bad in Belmont County

From the Times Reporter:
People “just heard money and they were lined up, you know, clear around the (Barnesville) high school. Hundreds and hundreds of people (were) waiting to get in to sign up. That was very alarming to me just to see how blindly everyone embraced the industry,” said Jill Hunkler, a 44-year-old Barnesville resident who says she has suffered health problems because of the drilling. 
Amid the drilling boom, environmentalists and health experts have descended upon Belmont and neighboring Appalachian counties in an effort to measure the impact of hydraulic fracturing, known as fracking, on water quality, air emissions and even emotional health. 
“The evidence is strengthening and growing,” said Nicole Deziel, an assistant professor at the Yale School of Public Health, who has traveled to the region for three years to study air and water quality. 
“Scientists are quickly conducting health studies to better understand whether there are health impacts or not.”

Activists say the clock is ticking. They hope to have clear findings before the oil and gas industry potentially takes a big next step. 
Chemical company PTTGC America, based in Thailand, is considering building a “cracker” plant on the west bank of the Ohio River in Belmont County that would convert an oil and gas byproduct into ethylene, a key ingredient in producing plastics and chemicals. Such a plant could produce hundreds of high-paying jobs and potentially draw plastics plants seeking access to the ethylene.
Read the whole article by clicking here.  

Halliburton Cutting North American Workforce by 8 Percent

Halliburton is cutting its workforce and shelving fracking equipment amid a slowdown in the U.S. shale industry. 
The oilfield services giant said that its revenue fell 13 percent in the second quarter, and it decided to cut its North American workforce by 8 percent. The company’s share price jumped 9 percent on the news, with shareholders apparently heartened by the cost-trimming measures.

Halliburton “is emphasizing a return on capital approach, and has stacked additional equipment in 2Q where returns were not justified, and expects activity down in [North America] in 3Q,” Morgan Stanley wrote in a note. 
In an earnings call with analysts and shareholders on Monday, Halliburton CEO Jeff Miller laid out a few strategies in response to the weak shale market. The company has slashed capex by 20 percent as demand for its services has slowed. “We have sufficient size and scale in this market and see no reason to invest in growth when it comes at the expense of returns,” Miller said.
Click here to read more. 

Cracker Plant in Belmont County Would Take Nearby Houses

From WTOV:
If an ethane cracker plant is going to be built in Dilles Bottom, several houses could be in jeopardy, including a newly restored home. 
William and Tonya Rayl moved in a nearby, almost rundown home on Dilles Bottom Road 11 years ago.

This home is the oldest in Dilles Bottom and it could eventually be torn down for the ethane cracker plant, hear from the family at 6. @WTOV9

View image on Twitter

"This house was pretty much crumbling when we moved here, we spent every day, hard work every day to try to make it even livable," they said.

It’s the oldest house in Dilles Bottom.

Thursday, July 25, 2019

Man Behind New Ohio Natural Gas Power Plants Vows to Fight Back Against Nuclear Bailout

From Business Journal Daily:
A referendum committee has been formed to overturn legislation signed into law Tuesday that subsidizes two nuclear plants owned by FirstEnergy Solutions.

The announcement by Bill Siderewicz, president of Boston-based Clean Energy Future, followed House Bill 6 being signed into law Tuesday afternoon by Gov. Mike DeWine. The bill passed by a 51-38 vote in the Ohio House of Representatives. On July 17, it was approved by a 19-12 vote in the Ohio Senate. 
The legislation will apply monthly surcharges of $2.50 for residential energy customers, $20 for commercial customers and $250 for customers classified as industrial. It also creates the Ohio Clean Air Quality Development Authority, which would provide during the first year “clean air credits” under the Ohio Clean Air program to power plants, such as nuclear power plants, that produce zero carbon emissions.

FirstEnergy Solutions operates two nuclear plants in Ohio, the Davis-Besse plant near Toledo and the Perry nuclear plant along Lake Erie. 
Nearly all of the members of the Mahoning Valley’s delegation to Columbus – state Sens. Sean O’Brien and Michael Rulli, and state Reps. Michele Lepore-Hagan, Michael O’Brien, and Gil Blair – all voted against the legislation. State Rep. Don Manning, R-59 New Middletown, voted in favor of the legislation.
Click here to read the whole article. 

Rig Count Continues Yo-Yo Act in Utica, Drops Back to 17

New permits issued last week: 3 (Previous week: 9)  -6
Total horizontal permits issued: 3129 (Previous week: 3126 +3
Total horizontal wells drilled: 2650 (Previous week: 2647)  +3
Total horizontal wells producing: 2226 (Previous week: 2226)  +-0
Utica rig count: 17 (Previous week: 18)  -1

Wednesday, July 24, 2019

Activists and Coal Magnate Working to Fight Belmont County Injection Well

From The Intelligencer:
Belmont County residents were in their commissioners’ office Wednesday, seeking county support against a proposed injection well.

Earlier in the week, the Richland Township Trustees took action to block the project, while calling on the commissioners to support their actions at the county level. On Tuesday, the trustees indefinitely tabled two matters pertaining to the well, one permit and one road use maintenance agreement. The well is eyed for a field at the intersection of U.S. 40 and Ohio 331. 
During the meeting the trustees and Belmont County Treasurer Kathy Kelich said appeals to the state representatives to help in preventing the well would hold more weight if the commissioners made a resolution of opposition. 
Commissioners Josh Meyer, J.P. Dutton and Jerry Echemann said while the board has no jurisdiction over the proceedings, they are reaching out to representatives. 
Pease Township Trustee Michael Bianconi said he had attended an informational presentation about the oil and gas industry Monday at Ohio State University Eastern, and the Richland Township meeting Tuesday. He added that the Pease Township Trustees will also consider a resolution of opposition.
Click here to read that whole article.

Robert Murray, CEO of coal company Murray Energy Corp., wrote a letter to the editor in opposition to the project.  Here is a portion (you can read it in full by clicking here):
Editor’s note: Robert Murray, president and CEO of Murray Energy Corp., has penned this letter to Belmont County commissioners concerning two proposed wastewater injection wells in Richland Township.

Dear commissioners: 
We are writing in regard to an issue a very great concern to our county, Especially to all of us residing or doing business in Richland Township, including Murray Energy Corp. We are speaking of the planned siting of two brine wastewater injection wells in Richland Township near Interstate 70 and U.S. 40. These proposed disposal Wells would be operated by a virtually unknown New Jersey company now calling itself Omni Energy LLC, formed on Jan. 15, 2019, and registered to do business in Ohio in March 2019. 
Murray Energy has invested considerable time and resources to analyze Omni’s plan. The Richland Township Board of Trustees, and many concerned citizens, also have reviewed Omni’s proposal in-depth and have understandably come out very strongly against it. We join them and wholeheartedly agree that this urbanized area, which is adjacent to a very busy intersection, is the worst possible location for these wells. More than 200 trucks per day will enter and leave the site and travel U.S. 40 to and from I-70, exit 215. The proposed site is also very near a pre-school, a school, a church, county offices, a university, many businesses, dangerous intersections, and quiet residential neighborhoods. 
One-hundred homes are within one-half of a mile of the site in 300 homes are within one mile. The waste hauled to the site is so toxic that the truck drivers wear masks and other protective equipment. Although the injection wells are supposed to be cased with cement to protect our groundwater sources from frack fluid chemicals and radioactive waste from flow-back water, Omni has no track record to support an assumption that the wells will be constructed properly and operated safely. This is simply too big of a risk to take in a populated area.
Murray's letter contained false statements, including the claim that the truck drivers have to wear masks because they are transporting hazardous waste.  The misleading nature of Murray's letter prompted Rhonda Reda, Executive Director of the Ohio Oil and Gas Energy Education Program, to write a response (read it in full by clicking here):
This is in response to the July 6 letter in The Intelligencer regarding injection wells in Belmont County. I believe misinformation was intentionally portrayed, and it is obvious that education on this topic is needed. 
First off, fluids being injected into Class II injection wells cannot, and do not, accept hazardous waste by EPA rule. Our drivers do not need to wear masks, nor does anyone in the general public. As with all industries, our oilfield workers are required to wear protective equipment such as hard hats, safety gloves and steel toe shoes as required by OSHA. 
Now, for some additional educational facts. Millions of years ago this region was completely covered by ocean (brine). Natural gas, oil and coal were formed from those marine plants and animals. Today, this ocean water is produced alongside our natural gas and oil, and is returned to the Earth’s subsurface. This saltwater injection technology has been utilized in the U.S. since the 1930s. 
Currently, there are more than 180,000 Class II injection wells in the U.S. that assist in the development of natural gas and oil. In Ohio, 98% of this water is disposed in over 200 Class II injection wells. The other 2% is used for dust and ice control. 

Nuclear Bailout in Ohio is Now Law

After 14 weeks of legislative negotiations, intense lobbying, and a deluge of ads, Ohio lawmakers on Tuesday gave final approval to legislation to subsidize nuclear and coal power plants with millions of dollars from the public and effectively gut the state’s green-energy mandates for utilities. 
House Bill 6, which passed 51-38, was quickly signed into law by Gov. Mike DeWine on Tuesday afternoon. Under the bill, from 2021 until 2027, every Ohio electricity customer would have to pay a new monthly surcharge that ranges from 85 cents for residential customers to $2,400 for large industrial plants. 
Starting next January, ratepayers around the state would also have to chip in up to $1.50 monthly (and up to $1,500 per month for commercial and industrial users) to subsidize coal plants in Ohio and Indiana run by the Ohio Valley Electric Corporation. 
However, HB6 would effectively stop Ohio’s decade-old energy-efficiency and renewable-energy mandates for utilities, which currently cost residential customers an average of $4.74 per month, according to cost charts provided by the Ohio Senate committee that heard the bill. 
That means by 2027, residential ratepayers would, overall, save an estimated $3.78 per month over what they pay now, according to the charts.
Read more by clicking here. 

Wednesday, July 17, 2019

9 Permits Issued Last Week in Utica as Rig Count Bounces Back to 18

New permits issued last week: 9 (Previous week: 3)  +6
Total horizontal permits issued: 3126 (Previous week: 3120 +6
Total horizontal wells drilled: 2647 (Previous week: 2639)  +8
Total horizontal wells producing: 2226 (Previous week: 2225)  +1
Utica rig count: 18 (Previous week: 17)  +1

Bill Watson Tabbed to Helm Utica Shale Academy

From the Weirton Daily Times:
The Utica Shale Academy will have a new leader this fall after Bill Watson was named director of the community school.

Watson, a resident of Wellsville, will helm the program at Southern Local High School and replace Rich Watson, who has become principal of Southern Local Elementary. 
Watson has connections with education and industry and plans to bridge the two to help academy students find a place in the work force. 
He received his diploma from Wellsville High School in 2001 as well as degrees from Bismarck State University of North Dakota in 2007 and Grand Canyon University in Arizona in 2012. Watson also has a connection with Southern Local, since he worked there as a special education teacher from 2012-14. Watson then moved on to become a nuclear specialist at the Beaver Valley Power Station operated by FirstEnergy Corp. in Shippingport, Pa., where his job entailed creating lessons to instruct nuclear instrumentation and control technicians. 
Watson hopes to use his expertise in education and industry to prepare students for a future in energy and other fields.
Click right here to read more. 

Energy Transfer Considers $2.5 Billion Sale of Rover Pipeline Stake

From Bloomberg:
Energy Transfer LP, the U.S. pipeline giant controlled by billionaire Kelcy Warren, is weighing the sale of its 33% stake in a conduit that carries Appalachian natural gas to customers across the Midwest, according to people familiar with the matter.

The Dallas-based pipeline operator has hired an adviser to pursue a potential sale of its operated interest in the Rover pipeline, said the people, who asked not to be named because the information isn’t public. The stake could fetch as much as $2.5 billion, one of the people said.

No decision has been made and Energy Transfer could opt not to sell, the people said. A representative for the company declined to comment. Energy Transfer rose 0.6% to close at $14.91 a share. 
Rover is 713 miles (1,148 kilometers) long and can shuttle 3.25 billion cubic feet of gas daily to customers across Ohio and Michigan, and as far away as Ontario. The project was originally expected to cost $4.2 billion and entered full service last year after a series of delays and construction missteps, including the bulldozing of a historic house in Ohio that the company had said it was buying for office space.
Read the entire article by clicking here. 

Restoration Work Continues for Pipeline Projects in Ohio; Legal Fights Continue as Well

From The Canton Repository:
“We have developed plans to mitigate the unusual rain conditions and we remain on schedule to complete final restoration activities by the fourth quarter of 2019,” Parker wrote. “Most restoration occurs within the first year following completion of construction. However, the process can take longer, depending on weather and other environmental impacts that may interrupt the restoration process.” 
Parker wrote that the goal was to restore the pipeline right-of-way to as close to pre-construction conditions as possible, and minimize long-term impacts. He encouraged landowners with questions about restoration to call the company’s toll-free, 24-hour hotline at 844-589-3655. 
As the restoration continues, so do several lawsuits filed by landowners in counties along the NEXUS route, including five cases in Stark County. 
The lawsuits allege NEXUS and its construction contractor, Michels Corp.:

  • Pumped or diverted water onto farms and residential properties without permission. 

  • Destroyed topsoil and crops on farms and failed to control erosion.

  • Failed to repair damaged drain tiles and properly reclaim land.

  • Caused farmers to lose crops and prevented some landowners from using their properties.

“The cases are preceding in court,” said Michael A. Thompson, attorney for the landowners. 
Rover Pipeline update 
The other major pipeline built recently in Stark County is the Rover Pipeline. Its twin 42-inch-diameter mainlines cross the county’s southern townships and transport up to 3.25 billion cubic feet of natural gas per day. 
Texas-based Energy Transfer owns the 713-mile Rover system. 
Rover has completed restoration work in Stark County, but standard practice is to monitor the right-of-way for any issues, Energy Transfer spokeswoman Alexis Daniel wrote in an email. 
But the state’s lawsuit against Rover and its contractors is now underway in the 5th District Court of Appeals. 
The Ohio Attorney General sued in 2017 over alleged environmental violations in more than a dozen counties related to sediment-laden stormwater, leaks and spills of clay-based drilling fluid and the release of water used to pressure-test the pipeline.
Continue reading by clicking here. 

OOGA President Provides Latest Update on Utica Shale

From The Canton Repository:
The Ohio Oil & Gas Association held its annual summer meeting at Glenmoor Country Club earlier this week, and The Canton Repository caught up with OOGA President Steve Downey. 
Downey, EnerVest Operating’s vice president of business development, is a 32-year veteran of the industry. He is in the first of two years as OOGA president. Between golf sessions Tuesday, he kept an eye on the upcoming vote on the state budget bill that included OOGA supported provisions concerning drilling units and eliminating the $60 minimum severance tax and the $100 per well transfer fee. He also shared his thoughts on the following topics: 
The current state of the Utica Shale play and its future: 
“The Utica has done really well since its inception... We’re producing probably about 9 billion cubic feet of natural gas a day in Ohio now, somewhere in that neighborhood. It’s ramped up greatly... As prices have moved for (natural gas liquids) and dry gas, the areas have fluctuated just a little bit. Where’s the real drilling? It’s kind of jumped back and forth between the wet gas and the dry gas just depending on economics... 
“Some producers have the ability to go back and forth. Encino Energy – used to be Chesapeake Energy’s assets – they have both wet and dry gas, so they can shift as they see fit, to some degree. You have other companies that are strictly dry gas. ...I think the acreage positions are pretty well set now.”
Read on by clicking right here. 

Rice Brothers Win Battle for Control of EQT

Following a long and contentious fight for control of EQT, the Rice brothers have come out on top.

From an EQT press release:
EQT Corporation (NYSE:EQT) and the Rice Team jointly announced that, based on preliminary voting results at the EQT Annual Meeting today, shareholders have elected all seven Rice Team-nominated directors as well as the five nominees supported by both EQT and the Rice Team. All 12 elected directors received more than 80% of the votes cast at the Annual Meeting. 
After voting results are certified by the independent inspector of elections, expected later today, EQT’s reconstituted Board will be comprised of Lydia Beebe, Dr. Philip Behrman, Lee Canaan, Janet Carrig, Dr. Kathryn Jackson, John McCartney, James McManus II, Anita Powers, Daniel Rice IV, Toby Rice, Stephen Thorington, and Hallie Vanderhider. 
Following certification, the newly constituted Board will meet later today and is expected to name Toby Z. Rice as President and CEO, succeeding Robert McNally. 
Toby Rice said, “We are deeply gratified by the shareholder support for the Rice Team and our plan for EQT. The Company has a world class asset base which provides abundant opportunities for value-creation. Now is the time to put this proxy contest behind us and come together as one team to transform EQT into a technology-enabled, sustainable energy producer. There is a lot of work to be done, and we look forward to rolling up our sleeves and working closely with EQT’s talented employees to execute our plan. We are committed to a smooth transition and to realizing EQT’s full potential to create significant value for shareholders.” 
Robert McNally said, “I’d like to thank employees across the organization for their outstanding work and dedication to EQT as well as our directors for their counsel and dedication. EQT is a unique company with terrific assets, and I wish EQT and the Rice Team great success in the future.” 
The Board of EQT thanks Rob McNally for his service.
Click here to read the whole release.

The Pittsburgh Business Times reported on some of the changes coming for the company:
New EQT CEO Toby Z. Rice said the clock has started running on his team’s 100-day plan to begin the turnaround at the Pittsburgh-based natural gas driller, but disputed that it means a wholesale change of top executives. 
Rice spoke in the back of the second-floor conference room shortly after the annual meeting where he and 11 others supported by the Rice team during the nine-month proxy battle had been elected overwhelmingly by shareholders. The new board, with Toby Rice and his brother Daniel J. Rice IV, was to meet soon after the voting results were certified. But it was clear from the tone that Rice was on his way to becoming the CEO of EQT (NYSE: EQT), the largest independent natural gas driller in the country. 
Yet he gave no hint of a large-scale departure of EQT executives, which in the past two years has seen four CEOs as well as three separate heads of production and the departure of other executives with the November 2018 split into EQT and Equitrans Midstream Corp. (NYSE: ETRN), which is now a separate publicly traded company. He mentioned only replacing of the CEO and the general counsel, a position that itself was replaced in October 2017 in a move that also lead to the departure of the EVP of production. 
“That’s one misconception of this whole campaign, that we’re going to replace 15 executives,” Rice said.
Read that whole article by clicking here. 

Meanwhile, another article from the Pittsburgh Business Times reports that McNally will receive $3.4 million to go away, while Toby Rice will take a salary of $1.00 in his first year as the new CEO.  Click here to read that article (subscription required).

Wednesday, July 10, 2019

Rig Count Drops Yet Again in Utica Shale

New permits issued last week: 3 (Previous week: 8)  -5
Total horizontal permits issued: 3120 (Previous week: 3117 +3
Total horizontal wells drilled: 2639 (Previous week: 2636)  +3
Total horizontal wells producing: 2225 (Previous week: 2223)  +2
Utica rig count: 17 (Previous week: 18)  -1

Why is There a DUC on Your Property?

From Farm and Dairy:
There are lots of reasons why a well may be drilled, but not finished and producing: The operator could be waiting for a pipeline to be connected, a crew to complete the fracking, or the markets to improve.
Or it could be a well drilled to hold a lease, or a test well, and never put into production. 
A drilled but uncompleted well (DUC) is a new well that has been drilled, but has not been fracked for the first time and put into production. There is also casing, cementing and other steps that need to be done before a well can start producing. 
Why track drilled but uncompleted DUC wells? They are a signal of overall economic health of the oil and gas producers, as well as future production potential.
Read the whole article, which explains more about the reasons behind DUC wells, by clicking here. 

Largest Grant in State History Will Help Prepare for Belmont County Cracker Plant

From The Columbus Dispatch:
The state’s economic development arm has awarded its largest grant ever for site work for a massive, multibillion-dollar petrochemical plant being considered in eastern Ohio. 
The $30 million JobsOhio grant is another in a series of steps being taken to determine whether Thai chemical company PTT Global Chemical America and its South Korean partner, Daelim Industrial Co., should proceed with the project in Belmont County. The company has committed $65 million to this phase, according to JobsOhio. 
If the companies go forward, they would build one of the largest economic development projects in state history, one with thousands of construction jobs and probably several hundred permanent jobs once construction is completed. 
“JobsOhio’s revitalization grant will support initial site-preparation work, which will begin later this month,” said Matt Englehart, JobsOhio spokesman. “While this is an important and positive step for the project, no final investment decision has been made. JobsOhio and our partners will continue closely collaborating with PTTGC America and Daelim as they work toward a final investment decision.”
Read more by clicking here. 

Mahoning County Strikes New Agreement in Hopes of Cashing in on Shale Drilling

From the Youngstown Vindicator:
Mahoning County now has rights to any Utica shale deposits underneath county-owned land in Canfield, under a new lease agreement with Ohio Valley Energy approved this morning. 
“Under the current old leases, the gas company actually has the rights all the way from the surface to the center of the earth,” said Tim Tusek, the assistant county prosecutor who worked on the arrangements. 
“The best part is there is a real possibility the Utica development will come back to this area, and when it does, the commissioners will be in a position to be able to benefit from it.” 
The existing wells run below about 270 acres west of the Canfield Fairgrounds, near the Mahoning County Experimental Farm operated in partnership with the Ohio State University Extension office there. Tusek said though the wells do bring in a “small” revenue source for the county and offer free gas for the adjacent properties. 
The wells were drilled about 30 years ago, but were sold to Ohio Valley Energy at the end of 2015, said company President Charlie Masters.
Click right here to read the rest of this article. 

Court Rules That Activist Effort to Deal Blow to FERC Can Proceed

From Law360:
The D.C. Circuit on Tuesday refused to dismiss Oberlin, Ohio’s challenge of the Federal Energy Regulatory Commission’s approval of the $2.1 billion Nexus gas pipeline, even though the city has granted permanent pipeline easements to the pipeline’s developer. 
In a one-page per curiam order, Circuit Judges Judith W. Rogers, Sri Srinivasan and Robert L. Wilkins shot down Nexus’ bid to have the case tossed, apparently rejecting the pipeline company’s argument that the city and the Coalition to Reroute Nexus had lost standing to bring the case. 
Nexus had argued that the city executed a settlement agreement granting the pipeline company a permanent easement for its project on May 7, one day after oral arguments were held in the D.C. Circuit case. The settlement “vitiates” the city’s standing, Nexus said. 
Nexus acknowledged that the settlement agreement contained a provision that the deal had “no application” to the D.C. Circuit case, but the company argued that that “does not salvage the City’s standing in this action.”
Read more by clicking here. 

New Report Warns Turning Away From Oil & Natural Gas Will Cost United States $4.5 Trillion

by Elizabeth Caldwell, Energy in Depth

Removing oil and natural gas from the U.S. energy mix could have dire consequences, costing the country $4.5 trillion – or $35,000 per household – according to a new report from energy consulting firm Wood Mackenzie:
“For any country to embrace a nationwide transition to 100 percent renewable energy (RE100) or zero carbon (ZC100) emissions constitutes a massive disruption with far-flung economic and social repercussions.”
As the report explains, in order to completely decarbonize by 2030:
“We estimate the cost of full decarbonisation of the US power grid at US$4.5 trillion, given the current state of technology. That’s nearly as much as what the country has spent, since 2001, on the war on terror. From a budgetary perspective, the cost is staggering at US$35,000 per household – nearly US$2,000 per year if assuming a 20-year plan.” (emphasis added)
This cost “includes everything needed to reliably produce and deliver clean energy to consumers”, which Wood Mackenzie estimates is about 1,600 gigawatts (GW) of new wind and solar capacity, and an additional 900 GW of storage capacity. For perspective, current wind and solar capacity is about 130 GW of the roughly 1,060 GW that make up the U.S. power grid’s nameplate capacity. Worldwide there is about 5.5 GW of storage capacity operational or under construction, according to the report. The estimate does not include additional supply chain costs that could result from the increased demand for things like steel and construction equipment.
Wood Mackenzie notes this would be an unprecedented shift:
“Today, no large and complex power system (LCPS) in the world operates with an average annual penetration of greater than 30% wind and solar (W+S). RE100 policies for an LCPS represent uncharted territory. There is little to no historical precedence for dealing with the technological and commercial disruptions that would accompany the mass deployment of variable energy resources.
“Current evidence shows that an LCPS tends to reach a 25% W+S market penetration with relative ease, assuming fundamental natural resource and grid infrastructure prerequisites. Beyond that point, operational and cost complexities progressively multiply, in large part due to the intermittent nature of renewables.” (emphasis added)
Aside from the abundance and low cost of natural gas, its ability to ramp up or down very quickly has made it popular for power generation. Without substantial battery storage, natural gas serves as an important back-up fuel for renewables because solar and wind power experience off-times and seasonal variation, as well as curtailments due to lack of storage capacity, which the report says happens almost daily in California.
As Energy Information Administration analyst Dr. Kathryn Dyl explained this year, natural gas has played an important role in ensuring grid reliability:
“That build-out of natural gas generation capacity on the grid led to the retirement of several coal generators, but also in many ways enabled the growth of renewables, because renewables — particularly wind and solar power — are intermittent or non-dispatchable resources. They only operate at certain times of the day or under certain circumstances and it’s really beneficial to be able to have complementary generation to be able to respond to that.”

Lower cost solutions

Wood Mackenzie is not calling for a halt to increasing the U.S. renewable power generation capacity. Instead it acknowledges the complexity of the issue and offers a few more realistic suggestions than what has been called for by those supporting 100-percent renewable power by 2030, which ultimately would “require more capacity to be built every single year over the next 11 years than what has been installed collectively over the past two decades.”
The first two suggestions include slowing down to allow for technologies to be developed that could lower these costs and to give a more realistic time-frame. The last two are to include other fuel sources, namely nuclear and natural gas. In fact, the report finds that by including natural gas in the energy mix, the cost reductions are pretty substantial:
“Allowing 20 percent of the power mix to come from existing natural-gas-fired generation (ZC80) would reduce RE costs by roughly 20 percent and energy storage costs by at least 60 percent.” (emphasis added)
Natural gas helped the United States lower greenhouse gas emissions almost 73 percent from 1970 to 2017, according to the Environmental Protection Agency. The United States has also been a world leader in reducing carbon dioxide emissions, with the EIA attributing the accomplishment largely to the increased use of natural gas in power generation.
Wood Mackenzie’s report, and the consensus from governmental agencies is clear: natural gas provides a strong path to reach our climate goals.

July 2019 Utica and Marcellus Shale Activity Maps

The ODNR has released the Utica and Marcellus shale activity maps for July.

Tuesday, July 2, 2019

Permitting Picks Back Up a Little in Utica Shale

New permits issued last week: 8 (Previous week: 1)  +7
Total horizontal permits issued: 3117 (Previous week: 3113 +4
Total horizontal wells drilled: 2636 (Previous week: 2630)  +6
Total horizontal wells producing: 2223 (Previous week: 2222)  +1
Utica rig count: 18 (Previous week: 19)  -1