Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.
From the Marcellus Drilling News:
Notes from editor Jim Willis on last week's Utica Shale Development and Growth Forum in Columbus:
We also heard speakers from MarkWest, Penn State’s Marcellus Center, and from Cabot Oil & Gas. Jim’s conference notes from Day 2, including a slip about new numbers coming Gulfport in the Utica…
Scott Garner, MarkWest Energy Partners
Scott Garner is vice president of corporate development and joint venture management for MarkWest Energy Partners. Midstream is the “big story” for the Utica Shale in 2013. Scott tackled the topic of the prospects for the distribution of Marcellus and Utica Shale derivatives. That’s technical speak for, Where and how do we sell natural gas liquids (NGLs) and other non-methane hydrocarbons that come out of the ground with methane? His talk was a true education for me.
Scott started with the preliminaries: MarkWest spent $1.8 billion on building new plants and pipelines in 2012—most of it in the Marcellus and Utica region (otherwise known as Appalachia). In 2013 they plan to increase that a bit and spend an additional $1.9 billion. Early on in his presentation, Scott made a point of saying MarkWest prides itself on its customer service—they value the relationship they have with their customers—the drillers, or what the industry calls “energy producers.”
MarkWest Liberty, a joint venture between MarkWest and The Energy & Minerals Group (EMG), operating in the Marcellus Shale currently has a daily gathering pipeline capacity of 525 million cubic feet, and a cryogenic capacity (we’ll explain in a bit what cryogenic is) of about 1.1 billion cubic feet per day. Scott said growth for MarkWest Liberty has been rapid and challenging.
The next thing he said was interesting and noteworthy. Scott said that the Utica is “brother” to the Marcellus, and he would not be surprised if three years from now the pace of drilling and development in the Utica has surpassed that of the Marcellus. He called the Utica Shale, “an amazing play.”
MarkWest has another joint venture with EMG in the Utica Shale, called (appropriately) MarkWest Utica EMG. Scott said cryogenic processing capacity for that operation will be 850 million cubic feet per day when it goes online.
A high percentage of what comes out of the ground in the Ohio Utica Shale is “wet gas” or NGLs. In turn, an average 60% of NGLs is ethane. Ethane can be used to “crack” and make ethylene, which in turn is the raw feed stock used in plastics manufacturing. Under normal circumstance ethane would be valuable and earn drillers a tidy profit. Right now, in the northeast, ethane is considered a waste product because there are no cracker plants to send it to, and no easy way of getting it out of the region to crackers along the Gulf Coast or in Canada.
Scott explained that you still have to do something with the ethane—you can’t just spill it out on the ground! It has to go somewhere. Large interstate pipeline companies have granted waivers to allow drillers to “blend back in” some ethane into otherwise “dry” methane that travels along those pipelines. Those waivers are due to expire in the coming two years. The first opportunity for drillers to sell their ethane will be when the ATEX ethane pipeline goes operational in 2014. Shell’s ethane cracker plant, if built in Monaca, PA, won’t be operational for at least five years. Scott also said it’s not economically feasible to move ethane by trucking it—it’s volatile and must be kept under high pressure. The only way to effectively move it is via pipeline. Ethane, for now, is a conundrum for drillers.
Scott also commented on Ohio’s shale oil. He said the “jury is still out” on whether Ohio will produce meaningful quantities of crude oil for the Utica Shale. However, the Utica is rich in condensate in many locations. Condensate is essentially natural gasoline—quite valuable and often used to blend with crude oil as a friction reducer to make the oil move better through pipelines.
When you attend a conference like this, you always look for that bit of information that slips out that’s not yet public. I believe Scott let one of those tidbits slip when he was commenting on Gulfport, a Utica driller currently operating two drilling rigs in the play. Scott said “they have some wells for which they’ve not yet released production numbers—wells that are better than some wells in the Eagle Ford.” The Eagle Ford is known for wet gas production. The implication is that although Gulfport has already drilled prolific wells in the Utica (see Gulfport’s New Utica Well Produces Mind-blowing 28.5 Mmcf/d!), there are some numbers coming from Gulfport that are even more amazing.
James Ladlee, Penn State Marcellus Center for Outreach & Research
I’ve heard Jim Ladlee speak before, at an event in Binghamton, NY—and he’s really good. Jim is an ambassador of sorts—not necessarily as a pro-driller (although I’m sure he is), but as a purveyor of good information. Jim is always careful to say what he does and does not know, and he triple checks his numbers. His mission is to present the truth about shale drilling—particularly in the PA Marcellus region.
Jim started his presentation by giving us a great context for the shale story. He said there are 140 or so known basins worldwide, and about 700 shale plays within those basins. The conservative estimate is that there is some 6.6 quadrillion cubic feet of natural gas available worldwide. How do you get your brain around that number? If you had one quadrillion pennies, it would take a cube a half mile wide, half mile high, and half mile deep to hold one quadrillion pennies. My poor brain just can’t grasp how much it truly is.
Bringing it closer back to home, the U.S. has an estimated 862 trillion cubic feet of natural gas. The Marcellus alone has 141 trillion cubic feet of natural gas according to best estimates.
Jim follows rig counts “religiously” as an indicator of where activity is happening. He said if you look at the Marcellus Shale 4-5 years ago, you’ll see where the Utica Shale is today. Implication: the Utica is just getting started and has a long way to go.
Adding more evidence to Washington County, PA’s claim that it is the “energy capital of the East” Jim flashed a slide showing for the last six months of 2012 there were 410 wells in the PA Marcellus that produced a total of 1.11 million barrels of condensate. Of those 410 wells, 360 (or 88%, virtually all of them) were located in Washington County, PA. Washington borders West Virginia and is a stone’s throw from Ohio. Implication: Condensate will be a big story for the Utica Shale too.
Jim’s talk was fast and furious, at some point we hope to have his slides available. He touched on LNG exports, the cracker plant in Monaca, the “untold” and important story of the methanol, iron and steel factories and more.
We’ll close with a short list provided by Jim of companies that are all either considering or actively building ethane cracker plants—most of them along the Gulf Coast: Dow, Shell, Chevron, Formosa and Sasol. He also mentioned Aither Chemical and other smaller crackers. Ethane crackers are an important part of the shale story.