First Choice Energy

Thursday, December 19, 2019

Rig Count Rises in Utica Shale for 2nd Straight Week

WEEK ENDING 12/14/19



New permits issued last week: 15 (Previous week: 9)  +6
Total horizontal permits issued: 3205 (Previous week: 3217 -12
Total horizontal wells drilled: 2725 (Previous week: 2740)  -15
Total horizontal wells producing: 2422 (Previous week: 2421)  +1
Utica rig count: 12 (Previous week: 11)  +1

Friday, December 13, 2019

Utica Shale 3rd Quarter Production Figures for 2019 Released

From the ODNR:
COLUMBUS, Ohio – During the third quarter of 2019, Ohio's horizontal shale wells produced 7,200,304 barrels of oil and 673,962,146 Mcf (674 billion cubic feet) of natural gas, according to the figures released today by the Ohio Department of Natural Resources (ODNR). These totals are new state records for quarterly oil and natural gas production since quarterly reporting began in 2013. 
Compared to a year ago, oil production increased by 29.84% and natural gas production showed a 11.27% increase over the third quarter of 2018. 
                       
The ODNR quarterly report lists 2,470 horizontal shale wells, 2,419 of which reported oil and natural gas production during the quarter. Of the wells reporting oil and natural gas results: 
The average amount of oil produced was 2,977 barrels. The average amount of natural gas produced was 278,612 Mcf. The average number of second quarter days in production was 87. 
All horizontal production reports can be accessed at oilandgas.ohiodnr.gov/production. 
Ohio law does not require the separate reporting of Natural Gas Liquids (NGLs) or condensate. Oil and gas reporting totals listed on the report include NGLs and condensate. 
ODNR ensures a balance between wise use and protection of our natural resources for the benefit of all. Visit the ODNR website at ohiodnr.gov.
Click here to view the original release.

Click here to view the spreadsheet containing all of the 2019 quarter 3 data. 

Latest ODNR Report Shows Large Jump in Number of Utica Wells in Production

WEEK ENDING 12/07/19



New permits issued last week: 9 (Previous week: 10)  -1
Total horizontal permits issued: 3217 (Previous week: 3216 +1
Total horizontal wells drilled: 2740 (Previous week: 2736)  +4
Total horizontal wells producing: 2421 (Previous week: 2367)  +54
Utica rig count: 11 (Previous week: 11)  +-0

Coverage of Carnegie Mellon Study Omits Clean-Air Facts

Over the weekend, the Pittsburgh Post-Gazette published an article detailing a Carnegie Mellon University study that claims to have calculated cumulative environmental and employment impacts of the shale revolution that has positively transformed Pennsylvania and surrounding states in the Marcellus and Utica Shale basins.
The research focuses on finding negative consequences; however, numerous studies – including a state Department of Environmental Protection report covered by the Post-Gazette last summer – have found an abundance of environmental, economic, and public health benefits that are attributed to natural gas development. Here are just a few examples of the science and data that contradict this latest attempt to detract attention to these benefits:
  • Energy Information Administration data released last month found 2,823 million metric tons in U.S. CO2 emissions reductions are credited to the shift in natural gas usage for power generation.
  • Environmental Protection Agency data indicated U.S. greenhouse gas emissions are at the lowest levels since the 1990s despite rapid increase in oil and natural gas production. 
  • National Bureau of Economic Research this year calculated shale gas development avoids approximately 11,000 deaths per year in the United States thanks to lower energy prices.
  • Pennsylvania & Colorado Departments of Health found most of the studies linking shale development to public health implications had “conflicting evidence (mixed), insufficient evidence, or in some cases, a lack of evidence of the possibility for harmful health effects.” 
“We were already well on our way in large part – and have actually since met what were proposed [Clean Power Plan] goals – primarily because of the shift toward cleaner natural gas.” We’ve seen improvements on ozone, we’ve seen improvements in those asthma precursors, those VOCs and nitrogen oxides.”
  • A two-year study conducted by an independent environmental and risk sciences organization found natural gas operations near a southwestern Pennsylvania school district “showed no air quality impacts of potential health concern”
The Post-Gazette, which frequently publishes articles with dubious claims about the oil and natural gas industry’s regional impacts, even noted that the Carnegie Mellon “study’s scope is limited” and does not accurately reflect the life-saving air quality benefits of switching to natural gas for power generation, and the role that plays in avoiding the premature deaths the report seeks to gauge. Additionally, it is important to keep in mind that these calculated “premature deaths” are virtual calculations, and do not represent actual mortalities.
It’s also critical to note that one of the study’s authors – former Carnegie Mellon President Jared Cohon – is a board member of the Heinz Endowments, which is a frequent and generous donor to anti-natural gas advocacy groups. That foundation’s agenda-driven activism has been detailed by EID.
While scientists, health experts, the industry and policy makers work vigorously to ensure natural gas development is safe and well-regulated, studies like this – and coverage of them by outlets such as the Post-Gazette – serve only to feed a false narrative that we must choose between a healthy environment and economic growth. American natural gas and oil production has shown repeatedly we can – and do – have both.

Gas Lobby Striking Back as Environmentalists Try to Ban New Gas Hook-Ups

From Bloomberg:
With moves to ban new natural gas hook-ups growing in popularity as a means of tackling climate change, the industry is fighting back.

The American Gas Association, which represents distributors, is seeking to forge new alliances to counter a trend started by Berkeley -- which became the first U.S. city to require new buildings to be all electric from January -- that has spread elsewhere in California and is on the verge of going national.

“We are well down that path of pulling in natural allies who can share the message that taking away options -- without understanding the implications -- is not fair to communities,” said Scott Prochazka, the new chairman of the AGA, who’s also the chief executive officer of CenterPoint Energy Inc.

For more on natural gas bans, click here

The AGA cited as a recent example a proposal put forward in Seattle to adopt a ban on gas in new construction. The resolution was tabled after a diverse group of restaurant owners, labor unions, realtors and home builders came together in opposition.
Read on by clicking right here. 

OVOGA Holiday Party Full of Optimism About Future of Oil and Gas in Ohio Valley

From WTRF:


The Ohio Valley Oil and Gas Association hosted it’s annual Holiday Party Dinner Discussion and Happy Hour on Wednesday night. The event was held at Wheeling Island Resort & Casino for the second year in a row.
Industry professionals had the chance to reunite with old friends, learn new tricks of the trade and expand their network.
“The biggest benefit to coming to these events for our members is the networking,” said AJ Smith, President of Hull & Associates. “Getting to talk to each other, Toby Rice with EQT who is our speaker tonight and others in the industry to try to do business together and do more business for the oil and gas industry.”
The natural resources of the tri-state area position this region as a leader in global energy production. Oil and gas is a thriving industry in the United States and it’s continuing to expand all around us.
Click here to view the original article. 

Chevron Becomes Latest Driller to Plan Exit From Utica and Marcellus Drilling

From Bloomberg:
Chevron Corp. expects to write down as much as $11 billion in the fourth quarter, more than half of it from its Appalachia natural gas assets after a slump in prices.

The U.S. oil major is considering the sale of shale-gas holdings, according to a statement Tuesday. The company said separately it intends to exit its stake in the Kitimat liquefied natural gas project in Canada. And Chevron also plans to keep its 2020 capital budget at $20 billion, the third consecutive year it hasn’t boosted spending. 
The company’s actions come from a chief executive officer, Mike Wirth, whose mantra has been capital discipline. Wirth earlier this year earned $1 billion for the company by walking away from a bidding war for Anadarko Petroleum Corp. San Ramon, California-based Chevron is the best performer among the five Western oil majors this year, but it has faced mounting costs at its Tengiz project in Kazakhstan.

“The Appalachia writedown should be baked in, but the others are incrementally negative” for the stock, said Muhammed Ghulam, a Houston-based analyst at Raymond James & Associates. “I would expect most companies to have to write down gas assets this year.”
Click here to read more. 

December 2019 Shale Activity Maps Published by ODNR






Tuesday, December 10, 2019

Carnegie Mellon Study Claims Shale Drilling is a Net Negative

From the Pittsburgh Post-Gazette:
Although the massive shale gas build-out in the Appalachian Basin has produced significant economic benefits, a new Carnegie Mellon University study says all the drilling, fracking and cracking isn’t worth the environmental, health and climate damage. 
The study estimates air pollution from shale gas development activities in Pennsylvania, Ohio and West Virginia from 2004 to 2016 resulted in 1,200 to 4,600 premature deaths in the region, and while most of the added employment occurred in rural areas, most of the health impacts were felt in urban areas. 
“It’s a rural job phenomenon with urban health impacts,” said Nicholas Muller, associate professor of economics, engineering and public policy at CMU and one of five study authors. “That’s the trade-off. How are regulators able to evaluate that trade?” 
Advocacy groups on either side of the issue reacted to the study with a mix of skepticism and praise. The Marcellus Shale Coalition, which represents oil and gas companies, cited other studies that found little pollution impact and significant economic benefits. The Breathe Project, a coalition that includes environmental advocates, public health professionals and academics, hailed the CMU study as groundbreaking and said such a comprehensive analysis is long overdue.
Read more of this article by clicking here. 

Monday, December 9, 2019

Ohio Supreme Court Rules That 21-Year Statute of Limitations Applies to Oil and Gas Leases Terminated for Lack of Production

From VORYS:
On November 26, 2019, the Supreme Court of Ohio clarified that a declaratory judgment claim that an oil and gas lease terminated for lack of production is subject to the 21-year statute of limitations for recovery of title to or possession of real property in R.C. 2305.04. See Browne v. Artex Oil Co., Slip Op. No. 2019-Ohio-4809. In Browne, the lessee argued that an action like the case at bar was subject to the 15-year statute of limitations for actions upon written contracts in former R.C. 2305.06. The Court disagreed. The Court noted that the lessors were not alleging a breach of the oil and gas lease, but were simply requesting a declaration that the oil and gas lease had terminated by its terms through operation of law. This claim was was more akin to an action to quiet title than one upon a written contract, the Court found, as the lessee had no obligation to produce under the lease and the parties did not dispute the lease’s provisions.
Click here to read the whole post. 

Rig Count Up One on Latest Utica Permitting Report

WEEK ENDING 11/30/19



New permits issued last week: 10 (Previous week: 9)  +1
Total horizontal permits issued: 3216 (Previous week: 3206 +10
Total horizontal wells drilled: 2736 (Previous week: 2734)  +2
Total horizontal wells producing: 2367 (Previous week: 2366)  +1
Utica rig count: 11 (Previous week: 10)  +1

Friday, December 6, 2019

Rover and NEXUS Seek to Have Their Taxes Slashed

One of the selling points touted by the companies behind the NEXUS and Rover pipelines as they sought approval and community support was the amount of property tax revenue that would be generated by their operation in Ohio. 

Now the companies are seeking to have the amount of taxes they pay out be drastically reduced.  From the Canton Repository:
Stark County Auditor Alan Harold said the state told him last week that Rover was seeking to cut its 2019 assessment by roughly 50 percent. 
In an email, spokeswoman Alexis Daniel wrote that the pipeline was a major project with many nuances and Rover is working with the state to determine an accurate valuation. 
NEXUS is seeking to cut its statewide taxable value 30 percent from $1.4 billion to roughly $996 million, according to a copy of the appeal provided by spokesman Adam Parker. 
NEXUS argues it needs the reduction because the $2.6 billion pipeline cost $400 million than expected and it lost market share to other pipelines during an 11-month delay in federal approval. 
“Nexus is committed to paying a fair and justified property tax based on the true market value of the pipeline and looks forward to developing future economic and taxing opportunities in Ohio,” Parker wrote in an email.

Until the appeals are decided, the pipelines must pay taxes on the undisputed portion of their valuations. 
After the Department of Taxation issues a decision, the companies or the affected counties can appeal to the Board of Tax Appeals.
Click here to continue reading this article. 

FirstEnergy Case Gets Tossed by Ohio Supremes, But Company Declares Victory; Fight Continues

FirstEnergy has been fighting an ongoing battle against those looking to introduce a referendum overturning the nuclear bailout the company was handed by Ohio lawmakers.  The company has employed dishonest fear-mongering ads, workers who physically tried to block people from signing the referendum, putting a different petition in front of people interested in signing the referendum to try and confuse them, and of course legal maneuvering (which has included doing a 180-degree turnaround from an earlier stance of refusing to call the ratepayer fees that will line the company's pockets a tax to now stating that it is a tax in order to get a favorable legal ruling).

The fight continues.

From RTO Insider:
The Ohio Supreme Court last week rejected FirstEnergy Solutions’ attempt to block a referendum to repeal $150 million in subsidies for its two nuclear plants. 
Four of the court’s seven judges dismissed FES’ lawsuit, citing a “lack of justifiable controversy.” While the court documents offer no further elaboration, the referendum effort against FES’ plant subsidies failed in October, and its future — including whether petitioners will get extra time to gather the necessary signatures for inclusion on the November ballot — pends before the same court. 
“The decision by the Ohio Supreme Court is a victory for Ohio’s electric customers and recognizes the attempted referendum on HB 6 is over,” Tom Becker, an FES spokesperson, said in email to RTO Insider on Monday. “Those opposed to the bill were unable to gather the requisite number of signatures to initiate a referendum; therefore there is no longer a need for the court to rule on the case.” 
Ohioans Against Corporate Bailouts began a campaign against Ohio’s House Bill 6 the same day Gov. Mike DeWine signed the legislation in July. In October, however, the group said it fell nearly 45,000 signatures short of the count necessary for the referendum’s inclusion on the 2020 ballot. 
In its lawsuit, FES argued the new ratepayer fees collected for its nuclear plants — ranging from 80 cents to $2,400/month — are equal to a tax, making the underlying legislation ineligible for the petition that the group was circulating for a ballot referendum. The lawsuit named both the group and Secretary of State Frank LaRose, the state’s chief election official, as defendants. (See FirstEnergy Challenges Nuke Vote in Ohio Supreme Court.) 
Gene Pierce, spokesperson for Ohioans Against Corporate Bailouts, had a different interpretation of the last week’s ruling. 
“The Ohio Supreme Court decision correctly rejected FirstEnergy Solutions’ argument that HB 6’s billion-dollar bailout is not subject to referendum, one of many desperate and greedy FES maneuvers trying to deny Ohioans’ right to vote on bad legislation,” Pierce told RTO Insider in an email. “The argument was ridiculed from the first time it was aired in public, and this legal proceeding was a waste of the Ohio Supreme Court’s time and taxpayers’ money.”
Read more by clicking here and also by clicking here.

Multiple Meetings Held on Proposed Cracker Plant; Still No Final Decision

It's been well over 4 years since we first posted about Belmont County being the site selected for a potential cracker plant.  Despite the fact that site preparation and property acquisition has been ongoing in preparation of constructing the plant, there still is no final decision.  Reports of multiple recent meetings being held about the project may perhaps provide an indication that this may change in the near future.

From WTOV News:


A private meeting was held in Belmont County on Tuesday regarding the proposed ethane cracker plant project.
Members of PTT Global Chemical and Daelim met with state and local leaders at the site in Dilles Bottom. The meeting was held at a garage on the site, and there is no word on what took place inside.
No official announcement has been made regarding the ethane cracker plant that would be built on hundreds of acres in Dilles Bottom.
Read on by clicking here. 

And from WHIO:
Ohio's Republican governor and lieutenant governor met Wednesday with officials from one of the companies proposing to build a multi-billion dollar ethane “cracker”plant in southeast Ohio. 
A spokesman for Gov. Mike DeWine said no “substantive update" would be provided from the meeting in Columbus with board members from Thailand's PTT Global Chemical. 
State and local officials for nearly two years have anticipated an announcement about whether PTT in partnership with South Korea's Daelim Industrial Co. would build the plant along the Ohio River in Belmont County.
Click here to read that whole article. 

And finally, another report from WTOV indicating that officials feel optimistic following their closed meeting at the site:


A private meeting between PTT Global Chemical, DAELIM and state and local leaders took place at the potential ethane cracker plant site in Dilles Bottom Tuesday.

Commissioner JP Dutton says it was just an informational meeting with PTT Global Chemical. He's hoping a positive announcement will be made soon.

"The project team just provided general updates obviously to the state and local governments,” said Dutton.

Dutton says the companies involved have been very open and easy to work with throughout the process.

“To try and develop that relationship as the company moves to a potential investment decision," said the commissioner.
See that original report by clicking here.