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Ohio Utica Shale

EIA expands monthly oil, natural gas reports to Ohio, 9 states

By Bob Downing Published: June 30, 2015

From the U.S. Energy Information Administration today:

Release date: June 30, 2015  |  Next release date: July 31, 2015

Beginning this month, EIA is expanding the coverage of natural gas production to include a break out for an additional ten states based on data from the EIA-914 survey. The additional states include: Arkansas, California, Colorado, Kansas, Montana, North Dakota, Ohio, Pennsylvania, Utah, and West Virginia. Estimates for the ten states were previously included in the "other states" total. Estimates for production back to January 2015 now include the new breakout. EIA will continue to report natural gas gross withdrawals here instead of in the Natural Gas Gross Production Report.

Later this summer, EIA expects to report survey-based estimates for crude oil production (including lease condensate). Later in 2015, EIA will report monthly crude oil production by API gravity category for each state.

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Colorado habitat loss feared in decline of greater sage-grouse

By Bob Downing Published: June 30, 2015

From the American Bird Conservancy today:

Colorado Sage Grouse Conservation Plan Leaves Species at Risk of Endangerment
Plan Allows for Transmission Lines, New Roads, and Oil and Gas Development in Priority Habitat

 

 

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Crude oil trains in California risk to minorities, poor, report says

By Bob Downing Published: June 30, 2015

From ForestEthics today:

Highest Threat from Oil Trains in California Aligned with Race and Income: New Environmental Justice Report Links Dangerous Rail Routes with Census Data

[Oakland, CA] Public interest groups today released the Crude Injustice on the Rails report evaluating the disparate threat to people of color and low-income communities from explosions and pollution from crude oil trains in California.

The groups ForestEthics and Communities for a Better Environment evaluated oil train routes and US Census data to determine who was at greatest risk from pollution and potential oil trains derailments and explosions, like the fatal July 2013 Lac Megantic oil train disaster.

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Water use for fracking varies widely across the U.S.

By Bob Downing Published: June 30, 2015

From the U.S. Geological Survey:

 

Posted: 30 Jun 2015 07:00 AM PDT

Contact Information:

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Ohio has 1,520 drilled Utica wells, 909 producing Utica wells

By Bob Downing Published: June 30, 2015

Ohio has approved 1,943 Utica shale permits, as of June 27.

That total includes 1,520 drilled Utica wells and 909 producing Utica wells, says the Ohio Department of Natural Rsources.

Ohio has 20 rigs at work.

Eight new permits were approved: two in Carroll County and six in Harrison County.

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Gastar Exploration reports on second dry-gas Utica Shale well

By Bob Downing Published: June 30, 2015

From Gastar xploration today:

HOUSTON, June 30, 2015 /PRNewswire/ -- Gastar Exploration Inc. (NYSE MKT: GST) ("Gastar") reported today initial and 30-day average production on its second Utica Point/Pleasant well.  The Blake U-7H well located in Marshall County, West Virginia produced at a peak 48-hour gross sales rate of 36.8 MMcf/d of natural gas on a 32/64ths choke with approximately 6,235 psi of flowing casing pressure.  On a restricted flow basis, the well's post peak rate 30-day production averaged 20.2 MMcf/d on a 26/64ths choke with approximately 5,312 psi of flowing casing pressure.  The most recent 5-day average rate is 14.8 MMcf/d at approximately 5,008 psi of flowing casing pressure.  The Blake U-7H well was drilled with a lateral length of 6,617 feet and was completed with 34 hydraulic fracturing stages that used approximately 14.8 million pounds of proppant.  Gastar has a 50% working interest in the Blake U-7H well and 41.1% net revenue interest in the well.

J. Russell Porter, Gastar's President and Chief Executive Officer, commented, "We are very pleased with the results of our second dry gas Utica well as it demonstrates the consistency of the prolific production from the Utica/Point Pleasant play across our leasehold.  Currently, we have no plans to drill another Utica/Point Pleasant well on our acreage until regional natural gas prices improve and returns on investment become competitive relative to our other internal investment opportunities."

About Gastar Exploration

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New York issues 43-page findings statement on fracking ban

By Bob Downing Published: June 30, 2015

From Earthjustice on Monday:

It’s Official: New York Fracking Ban Made Final With Release of 43-Page Document

On eve of one-year anniversary of local fracking ban court win, NY finalizes statewide ban

 

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Cuomo's fracking decision hurts N.Y. economy, API says

By Bob Downing Published: June 30, 2015

From the American Petroleum Institute New York on Monday:

API New York’s Karen Moreau statement re: today’s announcement by the state Department of Environmental Conservation:

 

“This decision is a moratorium on New York’s economic opportunity. After five years of comprehensive study, the EPA’s $32 million review confirms that properly regulated fracking poses no systemic widespread threat to drinking water. New York remains idle while thousands of families in NY’s southern tier have their hopes for economic opportunity dashed by the Governor’s decision.

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New York, Cuomo Administration officially ban fracking

By Bob Downing Published: June 29, 2015

From a pree release today:

It’s Official—New York Bans Fracking

NEW YORK, NY (June 29, 2015)—The Cuomo Administration today made the state’s ban on high-volume hydraulic fracturing official, following through on a December promise to prohibit the dangerous industrial activity in New York.

The state Department of Environmental Conservation did so today by issuing a so-called Findings Statement on the proposed fracking in the state—a document that completes the nearly seven-year-long review of potential environmental impacts.

This is the final legal step required to make the ban official, and follows DEC’s May 13 release of its final review of environmental impacts. The state also released the results of an exhaustive review of the public health impacts last December.

A statement from Kate Sinding, Director of the Community Fracking Defense Project at the Natural Resources Defense Council, follows:

“New York has made history today. Governor Cuomo boldly refused to cave to pressure to gamble our clean air, safe drinking water and communities for oil and gas industry profit. The health and well-being of New Yorkers has prevailed over powerful polluters.”

Findings are available at: http://www.dec.ny.gov/docs/materials_minerals_pdf/findingstatehvhf62015.pdf

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U.S. oil, natural gas rig count grows by 2 to 859

By Bob Downing Published: June 29, 2015

The number of U.S. drilling rigs for oil and natural gas grew by two last week to 859, reports Baker Hughes, the well service company.

The number of rigs has dropped by 1,014 in the last year.

The number of oil rigs dropped by three last week to 628. That is the lowest total since Aug. 6, 2010.

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WVU, OSU begin research on shale drilling in Morgantown

By Bob Downing Published: June 29, 2015

From West Virginia University last week:

After many months of preparation and preliminary study, drilling is set to begin today (June 26) on the vertical sections – known as top holes – of a science well and two production wells that comprise the nation’s first integrated research initiative on shale gas drilling.

The science well is the centerpiece of the Marcellus Shale Energy and Environmental Laboratory, called MSEEL, which West Virginia University launched in fall 2014 in partnership with Northeast Natural Energy, the National Energy Technology Laboratory of the U.S. Department of Energy and The Ohio State University.

The five-year, $11 million project is unprecedented. It is the first-ever long-term, comprehensive field study of shale gas resources in which scientists will study the process from beginning-to-end.

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DOE approves Sabine Pass LNG export facility in Louisiana

By Bob Downing Published: June 26, 2015

From the U.S. Department of Energy today:

Energy Department Authorizes Sabine Pass Liquefaction’s Expansion Project to Export Liquefied Natural Gas

WASHINGTON – The Energy Department announced today that it has issued a final authorization for Sabine Pass Liquefaction, LLC’s Expansion Project (Sabine Pass) to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States. The Sabine Pass LNG Terminal in Cameron Parish, Louisiana is authorized to export additional volumes of LNG up to the equivalent of 1.38 billion standard cubic feet per day (Bcf/d) of natural gas for a period of 20 years. In 2012, Sabine Pass Liquefaction was authorized to export LNG up to the equivalent of 2.2 Bcf/d of natural gas for a period of 20 years.  With this most recent authorization, Sabine Pass Liquefaction is authorized to export LNG up to the equivalent of 3.58 Bcf/d of natural gas for a period of 20 years.

The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation around the country.  This increase in domestic natural gas production is expected to continue, with the Energy Information Administration forecasting a record average production rate of 78.92 Bcf/d in 2015.

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Magnum Hunter Resources plans joint ventures in Ohio, W.Va.

By Bob Downing Published: June 26, 2015

CEO Gary Evans of Magnum Hunter Resources said at a Pittsburgh conference that his finacnially stressed company has lined up two joint ventures: one in Ohio and one in West Virginia.

The Ohio JV will generate about $500 million. The West Virginia JV will produce about $100 million.

To read the full story, click  here.

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Pennsylvania fines Sunoco Logistics $95,000 for waste spills

By Bob Downing Published: June 26, 2015

Pennsylvania's Department of Environmental Protection has fined Sunoco Logistics $95,000 for a series of industrial waste spills in Washington, Allegheny and Westmoreland counties tied to the Mariner East Pipeline.

Click  here  to read more.

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Argentina, China lead 2015 shale drilling outside North America

By Bob Downing Published: June 26, 2015

From the U.S. Energy Information Administration today:

 

 

As recently as last year, only four countries in the world were producing commercial volumes of either natural gas from shale formations (shale gas) or crude oil from tight formations (tight oil): the United States and Canada, and more recently, Argentina and China. Beyond these four countries, other countries have started exploring hydrocarbons from shale and other tight resources, but they are still short of reaching commercial production.

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Magnum Hunter Resources to sell stake in pipeline subsidiary

By Bob Downing Published: June 26, 2015

Financially troubled Magnum Hunter Resources Corp. says it intends to raise $600 million to $700 million by selling off 45.53 percent stake in its pipeline subsidiary, Magnum Hunter Holdings.

The subsidiary has pipelines in southeast Ohio and northern West Virginia.

Click  here  to read more from Reuters.

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Grillers love shale's propane glut with lowest prices in 13 years

By Bob Downing Published: June 26, 2015

The fuel that will grill millions of hot dogs across the U.S. on the Fourth of July is giving energy producers heartburn, Bloomberg Business reports.

Propane inventories have soared to the highest seasonal level in more than 30 years, sending prices in Texas to a 13-year low and forcing sellers in Canada to pay people to take it away.

The bargain-basement price is a byproduct of the U.S. shale boom, as record production of natural gas has doubled the supply of propane, commonly used for heating, crop-drying and cooking.

Click  here  to read more.

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Medina County group submits 5,600 signatures for vote

By Bob Downing Published: June 26, 2015

From a press release on Thursday:

RE: RIGHT TO LOCAL SELF GOVERNANCE IN MEDINA COUNTY
MEDINA,OHIO, June 25, 2015 - Yesterday, after seven weeks of collecting petition signatures,
Medina County landowners from the group Sustainable Medina County dropped off 214
petitions with over 5,600 signatures to the Medina County Board of Elections in the hopes of
placing a County Charter with a Bill of Rights on the ballot in November for a direct vote from
the residents. The Director of the Medina County Board of Elections said that the Board will
review the signatures and they should have a decision by Thursday, July 2nd as to whether
there are sufficient signatures to place the proposed charter on the ballot for a vote.
The counties of Athens, Meigs and Fulton also followed suit and dropped off signatures to their
Boards of Election.
Many residents of the County who signed the petition voiced their concerns about the effect the
NEXUS high pressure natural gas pipeline (36” or 42”) would have on their property values and
they also voiced their concerns about the compressor station that is to be built in Guilford
township and how it could affect the health of the residents of Medina County.
“Sustainable Medina County advocates for all residents of Medina County to have a direct voice
and vote on matters affecting families, Medina County communities and the environment,” noted
Kathie Jones, the group’s convenor. “All of our residents deserve protection from dangerous
and unwise energy projects like the NEXUS pipeline. Re-routing NEXUS from some property
owners onto other residents will not protect the environment of Medina County. We’re already
seeing how in some communities it has begun to pit neighbor against neighbor. Our campaign
is everyone’s campaign.”
If enacted, the County Charter would not alter any current county orders and regulations or laws
relating to or affecting the County or its officers, agencies, departments or employees. The
Charter contains a Bill of Rights, including rights of initiative and referendum on the county level,
which will untie the hands of our county officials by securing for the county the same level of
authority as a municipality.
To protect the residents of Medina County, we feel the vast majority of voters will again speak
for the charter form of county government this November.

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Marcellus, Utica shales to get 17 major pipelines, firm says

By Bob Downing Published: June 26, 2015

Over the next three years, 17 major pipeline projects will carry up to 17.3 billion cubic feet of natural gas per day from Ohio, Pennsylvania and West Virginia, according to IHS Energy.

That natural gas will go to varied markets.

Click  here   to read more from the Pittsburgh Post-Gazette earlier this week.

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Two groups sue administration over crude export secrecy

By Bob Downing Published: June 25, 2015

From Earthjustice today:

Seattle, WA — Earthjustice, on behalf of Sightline Institute, has filed a lawsuit against the Obama administration today in hopes of daylighting information behind crucial federal energy policy decisions.

The groups had submitted a Freedom of Information Act request in February to the US Department of Commerce Bureau of Industry and Security (BIS) seeking details on BIS’s criteria for approving multiple significant exceptions to the nation’s 40-year-old crude oil export ban. For the more than four months since that filing, BIS has ignored multiple attempts by Earthjustice attorneys to obtain the requested information or even a response from agency officials.

Today’s lawsuit in the U.S. district court in Seattle asks the Court to order the Obama administration to disclose the BIS rationale and key documents concerning the new loopholes.

In the past year, BIS has issued secret rulings exempting certain crude oil streams from the licensing process. The agency shares its rationale with industry players seeking to exploit the new loopholes, but hides the full extent of the loopholes from the public.  By quietly eroding the export ban behind closed doors, BIS is initiating a major change in US energy policy at a time when this very policy is being hotly debated in Congress.

In response to similar past FOIA requests by media outlets, agency officials have invoked the Export Administration Act of 1979 to withhold this information. Yet as Earthjustice points out in today’s filing, that law lapsed in 2001 and no longer provides any pretext for BIS to skirt the issue.

Patti Goldman, managing attorney of Earthjustice’s Northwest office, states, “The Department of Commerce is making public policy decisions about America’s energy future behind tightly closed doors. We expect greater transparency and accountability of our government when it is shaping the country’s and even the planet’s energy future.”

Eric de Place, policy director of Sightline Institute, notes, “Given the current upsurge of public concern around oil issues, from the Shell drilling lease in Alaska’s Chukchi Sea to oil trains rolling through communities across the country, this is exactly the wrong time to be engaged in secretive and illegal behavior that further promotes the interests of the oil industry.”

Read more about the filing on Sightline Institute’s website at daily.sightline.org/FOIASuit. To learn more about the export ban exemptions, see this Earthjustice article Federal Agency Quietly Allows Oil to Leak Through Crude Export Ban.

ONLINE VERSION OF PRESS RELEASE: http://earthjustice.org/news/press/2015/sightline-earthjustice-sue-obama-administration-over-crude-oil-exports-and-illegal-secrecy#

LAWSUIT FILING: http://earthjustice.org/sites/default/files/files/SightlineEarthjusticeOilExportComplaint.pdf

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Utica Shale production may be heavily based in four counties

By Bob Downing Published: June 25, 2015

In the next five to 10 years, 90 percent of the production fromt he Utica Shale will come from four counties in eastern Ohio, western Pennsylvania and northern West Virginia, says an official of Rice Energy Inc. in comments made this week at a Pittsburgh shale drilling conference.

Click  here  to read more from the Pittsburgh Business Times.

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Carnival switching to LNG to power new cruise ships

By Bob Downing Published: June 25, 2015

Carnival Corp. is going green at sea.

The cruise company has ordered four new ships, all to be powered by liquified natural gas, a first in the cruise industry.

Each of the ships will handle up to 6,600 passengers.

They are scheduled to go into service from 2019 to 2022.

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Summit County park group is opposed to Ohio's House Bill 8

By Bob Downing Published: June 25, 2015

From the Friends of Summit Metro Parks:

The Friends of Metro Parks Board has approved taking action to oppose Ohio's House Bill 8.

 

 

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ET-Williams deal would boost Energy Transfer in Northeast

By Bob Downing Published: June 25, 2015

Energy Transfer Equity's proposed $48 billion merger with the Williams Companies Inc. would help boost Energy Transfer Equity in the Northeast and in the Marcellus and Utica shales.

Click  here  to read more.

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States can take lead in reducing methane emissions

By Bob Downing Published: June 25, 2015

From the World Resource Institute on Wednesday:

Natural gas can offer climate and public health benefits, but its production too often leaks methane, a heat trapping gas that is at least 34 times as potent as carbon dioxide. Estimates show that natural gas production sites leak from 1 percent to 10 percent or more of their methane. Consider the fact that the United States has over 925,000 natural gas-producing wells, and that’s a lot of methane being released into the atmosphere!

While the federal government is taking steps to reduce these emissions, soon-to-be-proposed rules from the Environmental Protection Agency (EPA) don’t go far enough. They’ll cover only new and modified natural gas infrastructure, leaving old, leaky equipment free to emit unchecked amounts of methane.

That’s where states can play a role. A new WRI paper outlines the many opportunities that states have to lead in reducing the country’s methane emissions. In fact, it’s in their best interest to do so.

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Columbia Pipeline Group approves $2.7 billion in new pipelines

By Bob Downing Published: June 25, 2015

From the Columbia Pipeline Group on Wednesday:

HOUSTON, June 24, 2015 /PRNewswire/ -- Columbia Pipeline Group, Inc.  (CPG) (NYSE: CPGX WI), a subsidiary of NiSource Inc. (NYSE: NI), today announced board of directors approval of a combined future investment of $2.7 billion in new infrastructure projects to support the continued development of gas supplies in the Marcellus and Utica shale regions.  The Mountaineer XPress (MXP) and Gulf XPress (GXP) projects will provide 2.7 billion cubic feet per day (Bcf/D) of firm transportation from Marcellus and Utica production areas to markets served by the Columbia Gas Transmission (Columbia Transmission) and Columbia Gulf Transmission (Columbia Gulf) systems. These projects are supported by long-term, firm transportation contracts with a variety of Marcellus and Utica producers and shippers.

"Today's announcement underscores CPG's commitment to expanding its natural gas pipeline system in the Marcellus and Utica shale areas," said Glen Kettering, President, Columbia Pipeline Group. "These projects will enhance CPG's already substantial footprint to meet the needs of the market in this important region - transporting growing supplies of clean-burning natural gas to high-value markets."

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U.S. refinery capacity reaches 18 million barrels per day

By Bob Downing Published: June 25, 2015

From the U.S. Energy Information Administration today:

Increased refinery runs—based on increases in both capacity and utilization—have helped accommodate increases in U.S. crude oil production. The United States' capacity to refine crude oil into petroleum products—measured as operable atmospheric crude distillation unit (CDU) capacity—increased by 0.2% in 2014, reaching 18.0 million barrels per calendar day (b/d), according to EIA's recently released annual Refinery Capacity Report.

Read More ›

Tags: crude oil , liquid fuels , oil/petroleum , refinery capacity , refining

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Trumbull County asks Ohio to approve injection moratorium

By Bob Downing Published: June 24, 2015

In a first, the Trumbull County commissioners voted to ask Ohio Gov. John Kasich not to approve any new injection wells in their county.
That plan came under fire from the Ohio Oil and Gas Association, a  statewide trade group, and was hailed by Ohio grass-root activists.
The commissioners said they want 11 recommendations drafted by a committee of local officials be adopted before any more injection wells for liquid drilling wastes are approved.
Trumbull County wants mandated air-quality testing, improved groundwater monitoring around injection wells, new setbacks for injection wells, required landscaping plans and limiting operations from 7 a.m. to 6 p.m. At present, state rules do not include hours of operation.
It also wants better public notice and expanded areas of impact, longer times for public comment, new traffic impact studies, road use management agreements with local townships, extended time for public comment and moving any appeals hearing out of Columbus to make it easier on local residents.
Asked if the commissioners were optimistic that Kasich would listen to the moratorium request, Commissioner Frank Fuda said, “We hope.”
The recommendations sought by Trumbull County are “not that demanding,” he said.
One missing recommendation is for a complete summary of exactly what materials are being injected, he said.
Other Ohio counties are expected to join Trumbull in its call for a moratorium.
Trumbull County has “a lot of concerns” over injection wells, Fuda said. “We’re tired of talk and we wanted to move forward to make things happen,” he said.
That concerns in Trumbull County include a spill last spring at five injection wells operated by Warren-based Kleese Development Associates in Vienna Township. There were earthquakes reports last fall from two injection wells operated by American Water Management Service north of Niles in Weathersfield Township.
Those wells were shut down, at least for a time, by the Ohio Department of Natural Resources. It oversees all wells and drilling in Ohio.
Trumbull County with 19 injection wells has more than any other Ohio county. Ohio has 202 operating injection wells.
Trumbull County was third among Ohio counties in 2014 with 2.3 million barrels of waste being injected into underground rock formations for disposal.
Locally, Portage County was fourth and Stark County was 10th for 2014 disposal totals.
The concern over the injection wells has been building and the committee has been working on recommendations for the last two months, Fuda said. The commissioners have received numerous complaints, he said.
His county has been in active discussions with other county commissioners across eastern Ohio, but it is the first to take action, he said.
Local communities don’t benefit from injection wells, Fuda said. The only ones to benefit are the well owners and the state that gets paid fees on the injected waste.
Much of the wastes coming into Trumbull County is from Pennsylvania, he said.
It has few injection wells and Ohio cannot block such shipments because they are interstate trade protected by the U.S. Constitution.
The Trumbull requests are not really necessary, said Shawn Bennett, executive director of the Ohio Oil and Gas Association.
“Ohio’s robust regulatory structure on Class II underground injection wells meets and exceeds federal standards. While the OOGA appreciates the commissioners’ concerns, we do not feel that a moratorium on issuing class II permits is warranted or any additional regulatory requirements are needed,” he said in a statement.
Activists are “thrilled” that Trumbull County has taken the initiative and sought a moratorium, said Mary Greer of Shalersville Township in Portage County. Ohioans are worried that injection wells will pollute drinking water because they feel the state rules are insufficient and the volume of wastes being injected keeps growing, she said.

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Group releases new report on Pennsylvania health concerns

By Bob Downing Published: June 24, 2015

A press release received today:

GROUP RELEASES PA. STATE DOCUMENTS SHOWING SERIOUS FRACKING-LINKED HEALTH COMPLAINTS AND CLEAR NEGLIGENCE OF AGENCIES’ RESPONSES

 

Report Exposes Scores of Alarming Health Complaints from Residents Living Near Gas Drilling and Fracking

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Trumbull County wants moratorium on new injection wells

By Bob Downing Published: June 24, 2015

The Trumbull County commissioners today voted to send a request to Ohio Gov. John Kasich to freeze injection well permits in the county.

The freeze would stop new wells, but would not affect existing wells.

Commissioners want Kasich to stop new wells from being built until 11 concerns raised by a local committee are resolved.

Trumbull County has been spearheading discussions by numerous Ohio counties about Ohio's injection wells that are used to get rid of liquid drilling wastes.

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Charges filed in 2013 Quebec crude train crash that killed 47

By Bob Downing Published: June 24, 2015

From the Associated Press on Monday:

MONTREAL — The Canadian government on Monday charged the Montreal Maine & Atlantic Canada Railway Ltd., its affiliate and eight people with violating federal railway safety and environmental laws in connection with a 2013 oil train crash that killed 47 people and flattened the heart of the Quebec village of Lac-Megantic in one of North America’s deadliest rail disasters in two decades.

The charges followed an investigation that found an insufficient number of handbrakes and improper testing of handbrakes had allowed an unattended train carrying North Dakota crude oil to roll down a hill and derail on July 6, 2013, about 160 miles east of Montreal.

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Sale of non-core Oklahoma assets extended by Gastar

By Bob Downing Published: June 24, 2015

From Gastar Exploration earlier this week:

HOUSTON, June 22, 2015 /PRNewswire/ -- Gastar Exploration Inc. (NYSE MKT: GST) ("Gastar") announced today that the closing of the previously announced sale of certain non-core assets in Oklahoma to an undisclosed private third-party has been extended to July 6, 2015, with the same property sale effective date of April 1, 2015.  The buyer has made a deposit payment of $6.6 million towards the sales price, which remains unchanged at $46.2 million.  Except under certain limited circumstances, the $6.6 million deposit is non-refundable. 

About Gastar Exploration

Gastar Exploration Inc. is an independent energy company engaged in the exploration, development and production of oil, condensate, natural gas and natural gas liquids in the United States. Gastar's principal business activities include the identification, acquisition, and subsequent exploration and development of oil and natural gas properties with an emphasis on unconventional reserves, such as shale resource plays. In Oklahoma, Gastar is developing the primarily oil-bearing reservoirs of the Hunton Limestone horizontal oil play and expects to test other prospective formations on the same acreage, including the Woodford Shale and the Meramec Shale (Mississippi Lime), which Gastar refers to as the Stack Play. In West Virginia, Gastar is developing liquids-rich natural gas in the Marcellus Shale and has drilled and completed its first two successful dry gas Utica Shale/Point Pleasant wells on its acreage.  For more information, visit Gastar's website at www.gastar.com.

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Blue Racer Midstream adds processing capacity, offers update

By Bob Downing Published: June 24, 2015

From Blue Racer Midstream today:

DALLAS – June 24 , 2015 – Blue Racer Midstream, LLC (“Blue Racer”) announced today that it has commissioned a second cryogenic processing plant at its Berne Natural Gas Processing Complex (“Berne”) in Monroe County, Ohio. Known as Berne II, the new facility has 200 million cubic feet per day (MMcf/d) of nameplate capacity, bringing Blue Racer’s total processing capacity in the Utica and Marcellus shale plays to 800 MMcf/d. Two 200 MMcf/d plants are now in service at the Berne Complex, and two additional 200 MMcf/d plants are in service at Blue Racer’s Natrium Natural Gas Processing and Fractionation Complex (“Natrium”) in Marshall County, West Virginia. A 30-mile, Y-Grade pipeline connects the Berne Complex to Natrium. Fractionation capacity at Natrium has been expanded to 123,000 barrels per day, enough to serve at least six 200 MMcf/d cryogenic plants. Blue Racer expects to install and commission a fifth processing plant in the first half of 2016 to meet growing customer demand for additional capacity.

Over the course of the past year, Blue Racer’s processed volumes have more than tripled to their current level of 650 MMcf/d, while total gathered volumes, including lean gas, have more than doubled to over 825 MMcf/d.

Customer Dedications
Blue Racer has long-term service agreements with 14 of the leading natural gas producers in the Utica and Marcellus shales. Acreage dedications to Blue Racer’s Super System total approximately 200,000 acres, and volumetric commitments total approximately 380 MMcf/d. Services include natural gas gathering, compression and processing; condensate handling; and the fractionation, storage, transportation and marketing of natural gas liquids.

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Federal judge postpones new federal fracking rules

By Bob Downing Published: June 24, 2015

From the Associated Press on Tuesday:

CASPER, Wyo. — A federal judge in Wyoming has postponed new federal rules for oil and gas drilling on federal land a day before they were set to take effect.

The stay issued Tuesday by U.S. District Judge Scott Skavdahl means new rules for the practice of hydraulic fracturing on federal lands now won’t take effect until at least mid-August.

Skavdahl says he wants more documentation showing how the U.S. Bureau of Land Management developed the rules. Only then will he rule on whether the rules should take effect while a lawsuit contesting them moves ahead.

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Utica driller must raise $9 million in 3 weeks to satisfy lenders

By Bob Downing Published: June 23, 2015

A prominent Utica Shale driller has three weeks to raise an additional $9 million to meet a deadline imposed by its lenders.

Magnum Hunter Resources Corp. has raised $55.6 million. That includes $33.6 million from the sale of 5,200 acres in Tyler County, W. Va.

Its lenders want the company to raise $65 million. The original deadline was June 10. That was later pushed back to July 10.

Click  here  to read more from Columbus Business First.

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New regulatory constraints could cost U.S. jobs, hurt economy

By Bob Downing Published: June 23, 2015

From the American Petroleum Institute today:

API re-launches Vote4Energy campaign for 2016 election cycle

WASHINGTON, June 23, 2015 – Pro-development energy policies could add 2.3 million U.S. jobs and add $443 billion per year to the U.S. economy by 2035, according to a study by Wood Mackenzie: A comparison of U.S. Oil and Natural Gas Policies – Pro Development Policies vs. Proposed Regulatory Constraints, released Tuesday by API. Conversely, the study found that a path of regulatory constraints proposed by the Obama administration could lead to 830,000 lost jobs and lead to a decrease of $133 billion per year in the U.S. economy.

“The study contrasts the tremendous difference between the benefits from pro-energy policies and the negative effects of policy decisions that are anti-energy,” API President and CEO Jack Gerard said during a speech re-launching API’s Vote4Energy campaign. “Energy is fundamental to our society, and thanks to American innovation and entrepreneurial spirit, our nation stands among the world’s leaders in energy production. America will remain a global energy leader only if we get our nation’s energy policy right today.”

Pro-development policies could increase cumulative local, state, and federal government revenue by over $1 trillion and lower average annual household energy expenses by $360 by 2035, according to the study. A path of regulatory constraints would lead to a cumulative decrease of $500 billion in government revenue from 2016 to 2035 and an increase of $242 in average annual household energy costs.

Some of the pro-development policies examined in the study include:

Some of the regulatory constraining policies include:

“Looking ahead to the 2016 elections, API will be encouraging a comprehensive conversation about our energy future by engaging voters and policymakers through our Vote4Energy education and advocacy effort,” Gerard said. “In exactly 72 weeks Americans will cast their vote to decide who will represent them at all levels of government. The electoral decisions we collectively make in 2016 will be fundamental to the trajectory of our nation’s energy, economic and national security future. Future generations are looking to us to get our nation’s energy policy right and are counting on us to leave them a country that is second-to-none in energy production, security and economic prosperity.”

API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 25 million Americans.

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Federal judge hears arguments against federal fracking rules

By Bob Downing Published: June 23, 2015

From the Associated Press today:

CHEYENNE, Wyo. (AP) — New rules for hydraulic fracturing and other petroleum industry practices on federal land are headed before a federal judge in Wyoming.

Four states and two petroleum industry groups are suing the U.S. Interior Department, saying the rules announced in March are unnecessarily burdensome for oil and gas developers.

The rules are set to take effect Wednesday. Colorado, North Dakota, Utah, Wyoming, the Western Energy Alliance and the Independent Petroleum Association of America want to suspend them pending the outcome of their lawsuit.

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IPAA against BLM plan to raise royalty rates on federal lands

By Bob Downing Published: June 23, 2015

From the Independent Petroleum Association of America on Monday:

U.S. Oil and Gas Producers Submit Formal Comments on the Administration’s Proposal to Raise Royalty Rates on Federal Lands

 

WASHINGTON, D.C.– The Independent Petroleum Association of America (IPAA), in conjunction with Western Energy Alliance, submitted formal comments last Friday to the Bureau of Land Management (BLM) on their Advanced Notice of Proposed Rulemaking (ANPR) to raise royalty rates on federal lands. IPAA Senior Vice President of Government Relations and Political Affairs Dan Naatz issued the following statement today:

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Drilling job losses tend to lag oil price declines

By Bob Downing Published: June 23, 2015

From the U.S. Energy Information Administration today:

Employment in oil and natural gas extraction and support activities in the United States reached nearly 538,000 in October 2014, but then it declined by about 35,000 jobs, or 6.5%, over the following six months, through April 2015, according to data from the U.S. Bureau of Labor Statistics (BLS).

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Ohio has 1,512 drilled Utica wells, 906 producing Utica wells

By Bob Downing Published: June 23, 2015

Ohio has approved 1,936 Utica Shale permits, as of June 20.

Ohio has 1,512 drilled Utica wells and 906 producing Utica wells, the Ohio Department of Natural Resources says.

There are 19 rigs working in Ohio, the state says.

Four new permits were approved: three in Carroll County and one in Harrison County.

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American Energy Midstream is now Traverse Midstream Partners

By Bob Downing Published: June 23, 2015

From American Energy Midstream LLC today:

OKLAHOMA CITY, JUNE 23, 2015: American Energy – Midstream, LLC (AE-MidCo), announced today that it is changing its name to Traverse Midstream Partners LLC (Traverse Midstream) and is transitioning to a standalone company, fully independent of the broader American Energy Partners, LP (AELP) platform, a process that has been contemplated since the company’s founding in June 2014 and that will be effective on July 1, 2015. Traverse Midstream has been capitalized by a $500 million equity commitment provided by The Energy & Minerals Group (EMG), and additional equity provided by Aubrey. K. McClendon and other members of AELP management and affiliated parties of Mr. McClendon.
Traverse Midstream has two significant investments in critical midstream infrastructure designed to serve the Appalachian shale basins. The Company has a 35% non-operating equity interest in Rover Pipeline, LLC (Rover Pipeline), a 710 mile interstate natural gas pipeline company majority owned and operated by Energy Transfer Partners, L.P. (ETP). The Rover Pipeline project will allow for seamless natural gas pipeline service to its shippers from the Marcellus and Utica production areas to markets in the Midwest, Great Lakes and Gulf Coast regions of the U.S., and to the Union Gas Dawn Hub in Ontario, Canada, through its connection to Vector Pipeline. The Rover Pipeline is supported by 15 and 20 year fee-based contracts to transport over 3.0 billion cubic feet per day (Bcf/d) of natural gas. Transportation from the supply regions to the Midwest Hub near Defiance, Ohio is expected to begin by the end of 2016 to serve the Gulf Coast and Midwest markets. The remaining service to other markets including Michigan and the Union Gas Dawn Hub will be in service by mid-2017.
Traverse Midstream also has a 25% non-operating equity interest in the Ohio River System, which includes construction of a 52-mile, 36-inch gas gathering trunkline that will be capable of delivering up to 2.1 Bcf/d to Rockies Express Pipeline and Texas Eastern Transmission on the southern end of the line and an additional 1.4 Bcf/d through a 12-mile, 30-inch lateral to the interstate grid on the northern end of the line which will bring overall system deliverability to 3.5 Bcf/d. The Ohio River System will access Monroe, Belmont, Jefferson and Harrison counties in eastern Ohio with an expected in service date of Q3 2015. This project is also majority owned and operated by ETP.
“We are very proud to announce our move to a standalone company and our name change to Traverse Midstream Partners,” said Dave Shiels, Traverse Midstream CEO. “We currently have investments in two of the most important natural gas pipeline projects for the Utica and Marcellus regions, both of which will be operated by one of the premiere pipeline operators in the industry, Energy Transfer Partners. We are excited to be part of these efforts and look forward to delivering our contribution to their success and to other projects in the future as a standalone company.”
Aubrey K. McClendon, Chairman and CEO of AELP and Chairman of Traverse Midstream, commented, “I am very pleased today to see our second platform company announce its transition to becoming a fully independent standalone company. Along with Ascent Resources Corporation’s announced separation two weeks ago, today’s Traverse Midstream announcement serves as a reminder of the successful collaboration between EMG and AELP in starting, funding and developing first-class companies dedicated to a particular play, basin or strategy. I’ve worked with Dave Shiels over the last five years and have 100% confidence in his executive abilities and I look forward to his leadership making Traverse Midstream one of the industry’s most successful midstream companies.”

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EPA strengthens rules on underground storage tanks

By Bob Downing Published: June 22, 2015

From the U.S. EPA today:

EPA Strengthens Underground Storage Tank Requirements to Improve Prevention and Detection of Leaks

WASHINGTON – The U.S. Environmental Protection (EPA) is strengthening the federal underground storage tank (UST) requirements to improve prevention and detection of petroleum releases from USTs which are one of the leading sources of groundwater contamination.  EPA’s action will strengthen existing requirements and help ensure all USTs in the United States meet the same release protection standards.

“These changes will better protect people’s health and benefit the environment in communities across the country by improving prevention and detection of underground storage tank releases,” said Mathy Stanislaus, assistant administrator of EPA’s Office of Solid Waste and Emergency Response.  “Extensive and meaningful collaboration with our underground storage tank partners and stakeholders was vital to the development of the new regulations.  The revised requirements will also help ensure consistency in implementing the tanks program among states and on tribal lands.”

Secondary containment and operator training requirements of the Energy Policy Act of 2005 will apply to USTs on tribal lands.  In addition, these requirements improve EPA’s original 1988 UST regulation by closing regulatory gaps, adding new technologies, and focusing on properly operating and maintaining existing UST systems. 

Underground storage tanks are located at hundreds of thousands of facilities across America.  Both marketers and nonretail facilities own USTs.  Marketers include retail facilities such as gas stations and convenience stores that sell petroleum products.  Nonretail facilities include those that do not sell petroleum products, but may rely on their own supply of gasoline or diesel for taxis, buses, limousines, trucks, vans, boats, heavy equipment, or a wide range of other vehicles.

The revised requirements include:
•           adding secondary containment requirements for new and replaced tanks and piping;
•           adding operator training requirements;
•           adding periodic operation and maintenance requirements for UST systems;
•           removing past deferrals for emergency generator tanks, airport hydrant systems, and field-constructed tanks;
•           adding new release prevention and detection technologies;
•           updating codes of practice; and
•           updating state program approval requirements to incorporate these new changes.

States and territories primarily implement the UST program.  Many states already have some of these new requirements in place.  For others, these changes will set standards that are more protective.

In developing the final UST regulation, EPA reached out extensively to affected and interested UST stakeholders.  EPA carefully considered the environmental benefits of the UST requirements, while balancing those with the potential future costs of compliance for UST owners and operators.  For example, EPA is not requiring owners and operators to replace existing equipment, but rather is focusing on better operation and maintenance of that equipment.

The docket for the UST regulation is EPA-HQ-UST-2011-0301 and can be accessed at http://www.regulations.gov when the final regulation is published.

More information about this regulation is available at EPA’s UST regulation website at www.epa.gov/oust

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Debt that fueled U.S. shale boom threatens its undoing

By Bob Downing Published: June 22, 2015

The debt that fueled the U.S. shale boom now threatens to be its undoing, Bloomberg Business reports.

Drillers are devoting more revenue than ever to interest payments. In one example, Continental Resources Inc., the company credited with making North Dakota’s Bakken Shale one of the biggest oil-producing regions in the world, spent almost as much as Exxon Mobil Corp., a company 20 times its size.

The burden is becoming heavier after oil prices fell 43 percent in the past year. Interest payments are eating up more than 10 percent of revenue for 27 of the 62 drillers in the Bloomberg Intelligence North America Independent Exploration and Production Index, up from a dozen a year ago. Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16 percent increase in the past year, even as revenue shrank.

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Energy Transfer Equity confirms Williams merger proposal

By Bob Downing Published: June 22, 2015

From Energy Transfer today:

DALLAS--(BUSINESS WIRE)--Jun. 22, 2015-- Energy Transfer Equity, L.P. (NYSE: ETE) (“ETE”) today confirmed that it has made a proposal to merge with The Williams Companies, Inc. (NYSE: WMB) ("Williams" or "WMB") in an all-equity transaction valued at $53.1 billion, including the assumption of debt and other liabilities.

ETE initially made its offer in a letter dated May 19, 2015, to Alan Armstrong, the CEO of Williams, followed by a letter dated June 11, 2015 sent to the Williams Chairman of the Board, and most recently confirmed its offer in a letter dated June 18, 2015 sent to the Williams Board of Directors.

Under its merger proposal, ETE would acquire all of the outstanding common stock of Williams at an implied price of $64 per Williams share, which represents a 32.4% premium to the Williams common share closing price as of June 19, 2015. The merger consideration would be in the form of common shares in an entity that would elect to be taxed as a C-corp (“ETE Corp”). Shares of ETE Corp would have the same economic attributes as ETE common units. The number of ETE Corp shares to be issued to Williams stockholders will be based on a fixed exchange ratio of 0.9358 ETE Corp shares for each Williams share, reflecting ETE’s offer of $64 per Williams share and ETE’s unit price of $68.39 as of June 19, 2015. This exchange ratio will be subject to adjustment for the previously announced two-for-one ETE unit split. ETE Corp would be publicly traded on the NYSE under the symbol “ETC.” The transaction would be tax-free to Williams stockholders and, following the merger, ETE Corp stockholders would receive Form 1099s as opposed to schedule K-1s for tax purposes.

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Williams rejects $48 billion offer from rival Energy Transfer

By Bob Downing Published: June 22, 2015

Pipeline giant The Williams Companies on Sunday rejected a $64 a share all-stock takeover offer from competitor Energy Transfer.

The move comes as Williams works to reconfigure its operations amid pressure from shareholders, and during a consolidation wave among pipeline operators in North America.

The offer by magnate Kelcy Warren was worth an estimated $48 billion.

Both companies are active in the Utica Shale.\

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Williams Partners offers own statement on acquisition bid

By Bob Downing Published: June 22, 2015

From Williams Partners last night:

TULSA, Okla.--(BUSINESS WIRE)--Williams Partners L.P. (NYSE: WPZ) advised its unitholders to reference news issued today by Williams (NYSE:WMB), the owner of our general partner. Williams today announced that its Board of Directors has authorized a process to explore a range of strategic alternatives following receipt of an unsolicited proposal to acquire Williams in an all-equity transaction at a stated per share price of $64.00. The unsolicited proposal was contingent on the termination of Williams’ pending acquisition of Williams Partners.

With the assistance of its outside financial and legal advisors, the Williams Board carefully considered the unsolicited proposal and determined that it significantly undervalues Williams and would not deliver value commensurate with what Williams expects to achieve on a standalone basis and through other growth initiatives, including the pending acquisition of Williams Partners.

Important Information:

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Williams looking at options, after getting acquisition bid

By Bob Downing Published: June 22, 2015

From Access last night:

TULSA, Okla.--(BUSINESS WIRE)--Williams (NYSE: WMB) today announced that its Board of Directors has authorized a process to explore a range of strategic alternatives following receipt of an unsolicited proposal to acquire Williams in an all-equity transaction at a stated per share price of $64.00. The unsolicited proposal was contingent on the termination of Williams’ pending acquisition of Williams Partners L.P. (NYSE: WPZ). With the assistance of its outside financial and legal advisors, the Williams Board carefully considered the unsolicited proposal and determined that it significantly undervalues Williams and would not deliver value commensurate with what Williams expects to achieve on a standalone basis and through other growth initiatives, including the pending acquisition of WPZ.

As previously announced on May 13, 2015, Williams and WPZ have signed a definitive agreement under which Williams will acquire all of the public outstanding common units of WPZ in an all stock-for-unit transaction at a 1.115 ratio of Williams common shares per unit of WPZ. During its strategic review process, Williams will continue to work towards the completion of the WPZ transaction.

Williams has retained Barclays and Lazard to assist in its review of strategic alternatives, which could include, among other things, a merger, a sale of Williams or continuing to pursue the Company’s existing operating and growth plan.

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Pennyslvania grants air, water permits to Shell for cracker plant

By Bob Downing Published: June 22, 2015

The Pennsylvania Department of Environmental Protection today granted air and water permits to Royal Dutch Shell for a new cracker plant on the Ohio River in Beaver County.

The company has not yet said that it will proceed with the plant to turn ethane from shale drilling into polyethylene, a key ingerdient of plastics.

The company last week closed of a $13.5 million deal to acquire the former Horsehead Holding Co. zinc smelter.

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U.S. crude oil production helps reduce Gulf Coast imports

By Bob Downing Published: June 22, 2015

From the U.S. Energy Information Administartion today:

In recent years, higher domestic production of light, tight crude oil has led to a reduction in crude oil imports. Certain types of crude oil have been affected more than others; for example, the increased economic availability of domestic light, tight crude oil has virtually eliminated Gulf Coast imports of light crude oil. In the past year, Gulf Coast imports of medium crude oil have also fallen because of increased production from the Eagle Ford, Bakken, and Permian regions.

One of the key characteristics of crude oil is its density, measured by API gravity as established by the American Petroleum Institute. Less-dense liquids have higher API gravities. Crude oils with API gravities of 35 or above are considered light; 27 to 34 are medium; less than 27 are heavy.

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Pipeline to generate $91 million in tax revenue for Ohio schools

By Bob Downing Published: June 22, 2015

From Rover Pipeline today:

ROVER PIPELINE ESTIMATED TO GENERATE MORE THAN $91 MILLION IN TAX REVENUE FOR OHIO PUBLIC SCHOOLS IN FIRST YEAR OF OPERATION

Libraries, Hospitals, Parks and Senior Centers Among Local Entities That May Also Benefit

NORTH CANTON, OHIO, JUNE 22, 2015– Rover Pipeline is expected to generate more than $135 million in ad valorem tax revenue for Ohio during its first year in operation of which an estimated $91 million will be directed to more than 36 local school districts. The Ohio section of the Rover Pipeline will traverse 570 miles through 18 counties. 

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Cunninham Energy reports on wells in W. Va.'s Clay County

By Bob Downing Published: June 19, 2015

From West Virginia-based Cunningham Energy earlier this week:

Cunningham Energy LLC is pleased to announce it has reached an oil production milestone in the company’s shallow horizontal drilling efforts in Clay County, West Virginia. A total cumulative measured production of over 26,000 barrels of oil have been produced from Cunningham Energy’s Cochran #5H and Cochran #6Ha wells within the past eleven and eight months respectively. Both Cochran wells are producing from the Big Injun Sand formation on the “RHINO” pad, and were the first known shallow horizontal Big Injun wells completed in the state of West Virginia. “Cunningham Energy jumped into the Big Injun horizontal oil play and has been rewarded for its continuing development.” said Ryan Cunningham, of Cunningham Energy. “We have made great strides in efficiency of drilling so far and expect that trend to strengthen in the coming year as the play matures. Our top priority is to further innovation through the latest drilling techniques and drive operating costs down, especially in the current environment. This and other shallow horizontal sand oil plays hold promise for the state of West Virginia and the Appalachian Basin as a whole.” Cunningham Energy is currently in the process of drilling and developing four new horizontal wells in Clay County on the “Lions Paw” pad in Union District

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New study says big injection wells triggering more quakes

By Bob Downing Published: June 19, 2015

From the Associated Press on Thursday:

WASHINGTON (AP) — The more oil and gas companies pump their saltwater waste into the ground, and the faster they do it, the more they have triggered earthquakes in the central United States, a massive new study found.

An unprecedented recent jump in quakes in America’s heartland can be traced to the stepped up rate that drilling wastewater is injected deep below the surface, according to a study in Thursday’s journal Science that looked at 187,570 injection wells over four decades.

It’s not so much the average-sized injection wells, but the supercharged ones that are causing the ground to shake. Wells that pumped more than 12 million gallons of saltwater into the ground per month were far more likely to trigger quakes than those that put lesser amounts per month, the study from the University of Colorado found.

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Rex Energy Corp. selling water subsidiaries for $130 million

By Bob Downing Published: June 19, 2015

From Rex Energy:

STATE COLLEGE, Pa., June 18, 2015 (GLOBE NEWSWIRE) -- Rex Energy Corporation (Nasdaq:REXX) ("Rex Energy") today announced that it, together with its partners in Water Solutions Holdings, LLC ("Water Solutions"), entered into a purchase and sale agreement with American Water Works Company, Inc. ("American Water") pursuant to which American Water will acquire Water Solutions and its subsidiaries, including Keystone Clearwater Solutions, LLC. The transaction is valued at approximately $130 million, inclusive of cash and debt. Rex Energy, which holds a 60% interest in Water Solutions and is selling its entire interest, expects net proceeds from the sale (after taxes and subject to customary adjustments) to be approximately $66 million. The proceeds will be used to pay down the revolving line of credit and for general corporate purposes. The transaction is subject to customary closing conditions and regulatory approval. In connection with the purchase and sale agreement, American Water will continue to provide field and water-related services to Rex Energy within its Appalachian Basin properties in Pennsylvania and Ohio. RBC Capital Markets advised Water Solutions Holdings, LLC with respect to this transaction.

"This transaction marks a critical step for Rex Energy as we continue to enhance our balance sheet and provide the necessary flexibility for the development of our core assets in the Appalachian Basin," said Tom Stabley, Rex Energy's Chief Executive Officer. "We look forward to our new partnership with American Water and the successful development of our Appalachian Basin assets."

About Rex Energy Corporation

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U.S. petroleum deliveries grew by 5.4 percent in May

By Bob Downing Published: June 19, 2015

From the American Petroleum Institute:

File Type: pdf | File Size: 118456

File Type: pdf | File Size: 88436

File Type: pdf | File Size: 19379

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Supreme Court issues ruling on Ohio's Dormant Mineral Act

By Bob Downing Published: June 18, 2015

The Ohio Supreme Court today issued its first of what is likely to be several decisions on Ohio's Dormant Mineral Act.

Today's case came from Harrison County.

The Ohio statute was enacted in 1989 and went into effect in 1992. It was amended in 2006.

The purpose of the act is to eliminate dormant or unused mineral claims in favor of the current surface owners.

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Trumbull County injection wells must submit cleanup plan

By Bob Downing Published: June 18, 2015

From the Associated Press:

WARREN, Ohio (AP) — State officials say an injection well facility tied to a chemical spill in northeast Ohio must submit a cleanup plan as the Ohio Environmental Protection Agency continues to investigate the spill.
Ohio EPA officials say the Kleese Development Associates facility, which operates five saltwater injection wells, was instructed to submit a plan by the end of the week.
Inspectors in April traced the chemical spill in Vienna Township to the facility after residents reported dead animals near a local pond and a sheen on the water’s surface.
The Warren Tribune Chronicle reports (http://bit.ly/1N5OL09 ) operations at the facility have stopped and remain under the oversight of the Ohio Department of Natural Resources.
The company has said cleanup efforts have already been underway since shortly after the spill.

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Energy company pays for removal of old Ohio railroad bridge

By Bob Downing Published: June 18, 2015

From a press release:

ODOT advances first-of-its-kind public-private

partnership in Washington County

 

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Food and Water Watch laments latest vote in Denton, Texas

By Bob Downing Published: June 18, 2015

From a press release from Food & Water Watch, in the wake of the vote by the Denton City Council in Texas:

ALEC and Oil Industry Win in Denton, Democracy Loses

Statement by Wenonah Hauter, Executive Director, Food & Water Watch

Washington, D.C. – “The Denton City Council has repealed a local fracking ban, citing an ALEC-backed law recently passed by Governor Greg Abbot that effectively nullifies local efforts to ban fracking. In doing so, the City Council has voluntarily given up its local control.

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ODNR responds to U.S. EPA report on drinking water threat

By Bob Downing Published: June 18, 2015

From the Ohio Department of Natural Resources, in response to the recent U.S. Environmental Protection report looking at drilling's potential impacts on theU.S. drinking water supply:

The EPA recently issued a report on the impact of hydraulic fracking on drinking water resources. While this report did not find any widespread adverse impacts, areas of potential vulnerability were identified. Below is information from the Ohio Department of Natural Resources perspective on what has already been and is being done in Ohio to address these and other areas of concern. If you have any questions or would like to speak to one of our many oil and gas experts, please contact us.

Recently, the Environmental Protection Agency (EPA) released a draft assessment of the potential impacts to drinking water resources by hydraulic fracturing.

The Ohio Department of Natural Resources has taken a proactive best practices approach inregulating the Ohio oil and gas industry to prevent potential issues from impacting our environment and public safety. ODNR has learned from other states how to properly regulate unconventional oil and gas production while devising our own sets of rules and stringent requirements in the permitting, inspection and enforcement processes.

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Aligning gas, electric infrastructures is solvable, speaker says

By Bob Downing Published: June 18, 2015

from a press release today:

PJM FORUM REVEALS POSSIBLE GAS/ELECTRIC INTEROPERABILITY SOLUTIONS; UNDERSCORES NEED FOR MORE DISCUSSION

FERC commissioner says creative ideas are needed

 

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14 landowners in Erie County sued for survey access by Nexus

By Bob Downing Published: June 18, 2015

A long and detailed press release from the grass-roots group, the Coalition to Reroute Nexus, issued earlier this week:

 Fourteen Erie County land owners who have refused to permit pipeline survey teams to enter their property are now being sued by Nexus Gas Transmission LLC, a joint venture of Spectra Energy Houston, TX and DTE of Michigan. The battle is over Fifth Amendment property rights versus unauthorized property access.  

The land owners believe they have the right to decide whether a large corporation has access to their land for the purpose of constructing a 250 mile pipeline from southeastern Ohio to Michigan and Canada.  Property owners contend that Ohio law requires Nexus to prove that a public purpose exists for its intrusion onto their properties.  

“Just because Nexus claims it has a public purpose does not mean that one exists under the law,” states David Mucklow, Akron attorney and Summit County land owner affected by the current Nexus route.

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Seventy Seven Energy completes sale of Hodges Trucking

By Bob Downing Published: June 18, 2015

A press release on Monday:

OKLAHOMA CITY--(BUSINESS WIRE)--Seventy Seven Energy Inc. announced today the completion of the previously disclosed sale of Hodges Trucking Company LLC to a wholly-owned subsidiary of Aveda Transportation and Energy Services Inc.

At the closing, SSE received aggregate consideration of $42 million, subject to a customary post-closing working capital adjustment, consisting of $15 million in cash and a $27 million principal amount junior secured fixed rate note due June 15, 2020. The note is secured by a second lien on substantially all of Aveda’s fixed assets and accounts receivable.

Hodges currently operates and owns approximately 900 pieces of rig moving and heavy haul equipment, including approximately 200 haul trucks, 400 trailers, 70 bed/pole trucks, 35 cranes, 40 forklifts/loaders and 160 service vehicles. The sale did not include the real estate used in Hodges’ operations.

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Warren Resources sells non-core Wyoming assets

By Bob Downing Published: June 18, 2015

From Warren Resources:

NEW YORK, June 16, 2015 (GLOBE NEWSWIRE) -- Warren Resources, Inc. (Nasdaq:WRES) today announced the execution of agreements to divest its Atlantic Rim CBM assets to Escalera Resources, Co. (Nasdaq:ESCR). Under the terms of the transaction agreements, Warren will sell all of its interests in its shallow depth coal bed methane assets, which are located in the Atlantic Rim area of the Washakie Basin in Carbon County, Wyoming, appurtenant midstream pipeline assets, and an undivided 30% of its interest in certain deep rights associated with Warren's former leases in the Atlantic Rim area, to Escalera with an effective date of April 1, 2015. The total purchase price for these assets will be $47 million, with $42 million payable in cash at closing. Following consummation of the transaction, Warren will retain 70% of the operated deep rights associated with Warren's former leases in the Atlantic Rim area, across 68,700 gross acres, which are currently being evaluated for potential upside in a number of the deep formations present. The sale is subject to closing conditions and adjustments, including completion of the purchaser's financing.

Lance Peterson, Warren's Interim Chief Executive Officer, said: "We are extremely pleased to announce the sale of our Atlantic Rim assets to Escalera. This strategic divestiture is another important step forward in our continuing strategy to give Warren the ability to transact on future high growth opportunities as we further reduce debt and increase our liquidity."

With the closing of the transaction, Warren expects that its pro forma available liquidity will increase to approximately $61 million. Mr. Peterson said: "Upon Warren's recent closing of our refinancing with GSO Capital Partners and Franklin Square Capital Partners, we highlighted the benefits of having a credit agreement that gives Warren the flexibility to divest non-core properties, including the Atlantic Rim CBM assets which represent less than 10% of Warren's 2014 EBITDA pro forma the Marcellus acquisition, and pay down debt with the option to re-draw funds in the future at a nominal cost. Closing this transaction with Escalera will allow us to take advantage of that flexibility to continue deleveraging the company, thereby reducing interest expense and to access additional liquidity available in the future as we implement our growth strategy."

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Denton repeals Texas-first fracking ban in 'strategic retreat'

By Bob Downing Published: June 18, 2015

From the Associated Press on Wednesday:

DENTON, Texas — Leaders of a North Texas university town that was the first in the state to ban hydraulic fracturing repealed the voter-approved measure early Wednesday, sounding a tone of capitulation to the state’s powerful oil and gas interests after a seven-month battle.

The Denton City Council called it a “strategic repeal” that would undermine pending lawsuits filed by the Texas General Land Office and the Texas Oil and Gas Association shortly after the ban was passed.

Adam Briggle of the Frack Free Denton movement said fracking opponents are taking the fight statewide by pushing for the repeal of House Bill 40, the law that Gov. Greg Abbott signed last month barring local ordinances that prevent fracking and other oil and natural gas activities harmful to the environment unless they are deemed commercially reasonable.

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KMI seeks shippers for new liquids pipeline from Ohio to Texas

By Bob Downing Published: June 18, 2015

A Texas-based pipeline company is seeking shippers to send natural gas liquids from Ohio and Pennsylvania to the Gulf Coast.
Kinder Morgan Inc., based in Houston, is seeking drilling companies through Sept. 15 for its Utica Marcellus Texas Pipeline, a $4 billion project that will stretch 1,100 miles.
The open season for signing up began on Wednesday with the announcement by subsidiary Utica Marcellus Texas Pipeline LLC.
The pipeline would run from Ohio’s Harrison and Tuscarawas counties to Natchitoches, La., and then to Mont Belvieu, Texas.
The plans call for abandoning and converting 964 miles of existing pipelines operated by Kinder Morgan’s Tennessee Gas Pipeline Co. from Ohio to Louisiana to transport liquids including ethane, propane and butane from the Utica and Marcellus shales. That would alter 24-inch and 26-inch lines.
It would require construction of 202 miles of new 20-inch pipeline from Louisiana to Texas. That will provide a connection to the petrochemical industry on the Gulf Coast and to a Kinder Morgan dock for export.
About 120 miles of new liquid pipelines would be built in Ohio, Pennsylvania and West Virginia, along with a liquids storage facility in Tuscarawas County.
It would take liquids from at least three processing facilities in eastern Ohio.
“We are pleased to offer producers the flexibility to batch purity products for transportation to the Gulf Coast,” said Don Lindley, president of KMI’s Natural Gas Liquids, Products Pipelines.
“Repurposing the existing TGP asset provides increased optionality, reliability and market connectivity to shippers for all products and supports the increasing production growth in the (Ohio-Pennsylvania-West Virginia) basin,” he said in a statement.
If approved by the Federal Energy Regulatory Commission, the pipeline could begin operations in the fourth quarter 2018.
It would be capable of transporting up to 430,000 barrels per day.
The liquids would be shipped south in batches and may, in some cases, be co-mingled, the company said.
The project had been outlined in 2014.
Kinder Morgan is the largest energy infrastructure company in North America with $130 in facilities, 84,000 miles of pipelines and 165 terminals.
For more information on the project, go to www.kindermorgan.com/pages/projects/umtp.

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Oilfield costs drop with decline in oil prices, EIA says

By Bob Downing Published: June 18, 2015

From the U.S. Energy Information Administration today:

As oil prices declined—falling more than 50% from June 2014 to January 2015, before increasing slightly in spring 2015—energy production companies focused efforts on increasing operating efficiencies.

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Tags: liquid fuels , oil/petroleum , prices

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SEC asked to investigate GreenHunter Resources' barge plan

By Bob Downing Published: June 18, 2015

From Ohio's FreshWater Accountability Project on Wednesday:

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Refiner margins cannot offset low upstream earnings for oil

By Bob Downing Published: June 17, 2015

From the U.S. Energy Information Administartion today:

First-quarter 2015 financial results for globally integrated oil companies—ones that focus on both the exploration and production of crude oil (upstream) and the refining of crude oil into petroleum products (downstream)—show that total earnings were $22 billion (54%) lower than in first-quarter 2014. Lower crude oil prices contributed to a decline in profits in the upstream sector of $28 billion (80%) compared to first-quarter 2014. Profits in the downstream sector, however, were the largest for any quarter since third-quarter 2012, almost $6 billion (95%) higher than in first-quarter 2014, which offset some of the decline from the upstream segment.

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Tags: crack spread , crude oil , distillate fuel , financial markets , gasoline , liquid fuels , refining

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Nexus Gas Transmission is against pipeline rerouting

By Bob Downing Published: June 17, 2015

The company behind a proposed natural gas pipeline across northern Ohio is against rerouting the $2 billion Nexus Pipeline around the Akron-Canton area.
In a report filed with a federal agency, Texas-based Nexus Gas Transmission LLC said the proposal by the city of Green to move about 103 miles of the pipeline further south into less-crowded rural areas of Stark and Wayne counties was not preferred.
The Green proposal is “not considered to be a reasonable alternative to the proposed route,” the company said in a 94-page preliminary report filed with the Federal Energy Regulatory Commission.
The company said the Green plan would create “environmental, engineering, schedule and cost disadvantages.”
It said the Green alternative would take the pipeline farther away from potential customers in northern Ohio, would cause a a one-year delay in getting the pipeline built, would cost an additional $28 million and would require more construction with more environmental impacts. That’s because lengthy laterals would have to be built off the pipeline to serve customers and because the rerouted line would be 10 miles longer, the company said.
A final report on alternate routes will be drafted by the company later.
A telephone call was made to Green Mayor Richard Norton for comment.
The Green plan was also backed by a grass-roots group, Coalition to Reroute Nexus.
The Green proposal would reroute the pipeline through southern Stark and Wayne counties, then western Wayne, Medina and Lorain counties. From there, the original route would resume. That proposal has gotten a chilly reception in southern Stark County.
The company also looked at running the pipeline under Lake Erie to get to Ontario.
The draft report was among a dozen reports submitted on Friday  to the FERC that must approve the pipeline.
The so-called environmental resource reports look at air and water quality, cultural resources and socio-economic impacts.
They are submitted to FERC to enable stakeholders to review environmental effects and proposed mitigation and provide comments prior to the submittal of a formal application.
They are available at www.nexusgastransmission.com. Go to FERC Process.
In an added development, the pipeline will create 5,384 construction and related jobs and will generate $568 million, the company said its filings. That includes about 1,550 jobs in Summit, Stark, Medina and Wayne counties that would generate about $167 million in new income, said the assessment by Vermont-based Economic and Policy Resources.
The Nexus Pipeline would stretch 250 miles from Columbiana County to Defiance in northwest Ohio. It would run north into Michigan and connect with existing pipelines into Ontario.
The project is being developed by Nexus Gas Transmission, along with Detroit-based DTE Energy Co. and Texas-based Spectra Energy Partners.
The pipeline — 36 inches in diameter — is designed to handle up to 1.5 billion cubic feet of natural gas per day from eastern Ohio’s Utica Shale. That’s enough gas to fuel about 6 million homes.
It would run 12 miles through New Franklin and Green in Summit County, 19.8 miles through Stark County, 6 miles through Wayne County and 22 miles through Medina County where a compressor station would also be built.
If approved, construction could begin in January 2017, and the pipeline could begin operations in November 2017.

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Pennsylvania fines Range Resources $8.9 million for well leak

By Bob Downing Published: June 17, 2015

From the Pennsylvania Department of Environmental Protection on Tuesday:

On May 11, 2015, DEP ordered Range Resources to submit a plan to remediate the defectively cemented gas well. However, the company failed to submit a satisfactory plan that made necessary repairs to prevent further leaks and pollution.

“Today, we made it clear that we take seriously our responsibility to protect residents and Pennsylvania’s natural resources,” said DEP Secretary John Quigley. “Clean water is an important part of a strong economy and Range Resources owes it to the people of Lycoming County and surrounding areas to make the repairs necessary to immediately stop the discharge of natural gas to the waters.”

The $8.9 million civil penalty would be assessed under the Clean Streams Law and the 2012 Oil and Gas Act.

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Nexus files pipeline's draft resources reports with FERC

By Bob Downing Published: June 17, 2015

From Nexus Gas Transmission today:

NEXUS GAS TRANSMISSION FILES DRAFT RESOURCE REPORTS

The full set of draft environmental Resource Reports, which is the environmental report for the project, includes updated information on customers, economic impacts and a detailed analysis of initial alternative routes.

 

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OOGA lauds Ohio Senate for no action on hiking severance tax hike

By Bob Downing Published: June 16, 2015

From the Ohio Oil & Gas Association today:


Statement About Ohio Senate Support for Tax Study
From Shawn Bennett, executive vice president of the Ohio Oil and Gas Association:
The Ohio Oil and Gas Association applauds Senate President Faber and members of the Ohio Senate for their support of further study and discussion about the severance tax within the broader context of the Ohio 2020 Tax Policy Study Commission.

While we remain opposed to an increase in the severance tax rate, especially during this extremely difficult commodity price environment, we are open to continuing discussions on this issue.

We commend Senators Peterson and Balderson for their willingness to engage the industry about the severance tax during the budget process, but it is apparent that a more thorough and deliberative discussion is needed to examine the state’s overarching tax policies.

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Ohio two-year budget won't include severance tax hike

By Bob Downing Published: June 16, 2015

From the Associated Press today:

By JULIE CARR SMYTH
AP Statehouse Correspondent
COLUMBUS, Ohio (AP) — Legislative leaders won’t include a proposed tax hike on Ohio oil-and-gas drillers in the two-year state budget.
Senate President Keith Faber and House Speaker Cliff Rosenberger, both Republicans, announced Tuesday that negotiations on a longstanding priority of Gov. John Kasich have been fruitful but need more time.
They are creating a task force to review the issue and come up with a final report by Oct. 1. The panel will include two Republicans and one Democrat from each legislative chamber and Kasich’s budget director. Industry groups, which continue to oppose the tax hike, will also be involved.
Rosenberger said it is the first time all sides will sit at one table.
Kasich has repeatedly sought the tax hike amid Ohio’s shale-gas boom to pay for income-tax cuts.

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Fracking supported by 55.9 percent of Americans, survey says

By Bob Downing Published: June 16, 2015

From Pittsburgh's Robert Morris University's Polling Institute today:

Fracking Enjoys Strong Support from Pennsylvanians

Tuesday, June 16, 2015

PITTSBURGH, June 16, 2015 — Nearly a decade into the Marcellus Shale energy boom, Pennsylvanians expressed both overwhelming support and strong environmental misgivings, about fracking — the unconventional drilling technique that has made the state’s expanding energy economy possible.

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Texas company opens new West Virginia sand terminal

By Bob Downing Published: June 16, 2015

From a press release on Monday:

WOODLANDS, Texas, June 15, 2015 /PRNewswire/ -- Unimin Energy Solutions announced today the first delivery of frac sands by unit train to its Jerry Run, West Virginia terminal.  Unimin, with partners CSX Railroad and Process Transload, operate a high efficiency transload and storage facility on HIGHWAY 50 in the liquids rich region of the southern Marcellus in West Virgina and south western Pennsylvania.

The Jerry Run terminal has a 20,000 ton storage capacity and 25 trucks per hour loading rate to facilitate rapid response and improved logistics.  The CSX Railroad will shuttle unit trains to continuously replenish frac sand inventory.

"This high capacity - quick response system reflects Unimin's next generation terminal design and service model," said Joe Migyanko, General Sales Manager for Unimin's Northern Region.  "In addition to having proppant supply closer to the wellhead, the efficiency and scale will allow us to pass savings onto our customers."

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Statoil says it will cut up to 1,500 jobs by the end of 2016

By Bob Downing Published: June 16, 2015

Norway-based Statoil, a small player in Ohio's Utica Shale, says it will lay off between 1,100 and 1,500 workers by the end of 2016.

Click  here  to read the company's statement.

 

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Shell Chemical closes on Beaver County land purchase

By Bob Downing Published: June 16, 2015

Shell Chemical has closed on a deal to purchase 1,000 acres in Pennsylvania's Beaver County along the Ohio River intended for a multi-billion dollar ethane cracker plant.

However, the energy giant has not made a final decision on whether it will move forward with the project.

Click  here  to read more.

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Ohio rig count drops by five from a week ago, ODNR reports

By Bob Downing Published: June 16, 2015

Ohio has approved 1,932 Utica shale permits, as of June 13.

That includes 1,504 drilled Utica wells and 904 producing Utica wells, the Ohio Department of Natural Resources says.

It reports that 18 rigs are working in Ohio. That's a drop of five rigs from a week ago.

Five new permits were approved: four in Harrison County and one in Trumbull County.

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EIA's mapping highlights U.S. energy infrastructure

By Bob Downing Published: June 16, 2015

From the U.S. Energy Information Administration today:

EIA's energy mapping system is a data-intensive visual reference tool that includes several map layers defining energy infrastructure components across the United States. Using this series of maps, viewers can see crude oil, petroleum, natural gas, or hydrocarbon gas liquid pipelines, terminals, and ports in their area, as well as high voltage electric transmission lines. The mapping system combines information from many government agencies as well as public and private sources. Understanding infrastructure components is helpful as energy supply and consumption patterns change.

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New Dragon class ethane carrier to Europe is delivered

By Bob Downing Published: June 15, 2015

From the U.S. Energy Information Administration:

Marcellus ethane moves one step closer to Europe with delivery of the first Dragon class liquid gas carrier

A major European petrochemical manufacturer is taking steps to begin importing ethane from the United States this year. Over the past several years, ethane production in the United States has been increasing, from 869,000 barrels per day (b/d) 2010, to 1,081,000 b/d in March 2015. In addition, U.S. ethane prices have declined compared with other fuels. In recent years, the growth in production has spurred ethane pipeline exports to Canada and investment in the domestic petrochemical industry. And now, one of Europe's largest petrochemical companies, Ineos Olefins & Polymers, headquartered in Switzerland, is close to completing the first transoceanic ethane shipment from the United States.

On May 28, Ineos Olefins & Polymers Europe, with ethylene cracker operations in Scotland and Norway, and its partner Evergas, a company specializing in seaborne petrochemical and liquid gas transportation, took delivery of the first ship in a planned eight-vessel fleet of Large Gas Carriers (LGC). These vessels will primarily transport ethane produced in the Marcellus and Utica shale plays to Europe from the Mariner East project/Marcus Hook Industrial Center in Pennsylvania, under a 15-year contract between Ineos-Europe and Evergas. Though designed and constructed for transoceanic shipment of ethane, the ships will be capable of transporting other hydrocarbon gas liquids (HGL), as well as liquefied natural gas (LNG).

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VAM USA began Youngstown pipe operations last month

By Bob Downing Published: June 15, 2015

Fron Vallourec:

VAM USA LLC, the leading supplier of premium threaded connections for the oil and gas industry in the USA, began producing the first pipes for commercial sale at its new premium threading plant in Youngstown, Ohio earlier this month. The recently constructed facility manufactures premium VAM® connections for casing and tubing with outside diameter sizes of 2-3/8 to 7-5/8 inches for oil and gas applications. The new site increases product availability options and offers premium connections from the same location where Vallourec pipe is produced.

 

"The Youngstown facility offers increased premium capacity in close proximity to the local shale plays, enhanced response timing, and the latest in finishing process technology" said Eric Shuster, President. "Our rigorous commissioning and qualification process ensures the highest quality standards. The new threading plant is integrated with VAM USA's sister company Vallourec Star's pipe rolling mills which enhances efficiencies and brings additional synergies that benefit our customers and further differentiates us from competition ".

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Dublin-based Cardinal Energy moving from Ohio to Texas

By Bob Downing Published: June 15, 2015

Ohio-based Cardinal Energy is moving to Texas.

The firm is shifting its operations from Dublin to Abilene.

The move makes sense because the company is focusing on its Texas operations, executives said.

Click  here   to read more.

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Sixty landowners sue American Energy Partners for $9.2 million

By Bob Downing Published: June 15, 2015

Sixty landowners in southeast Ohio have filed a lawsuit against American Energy Partners LP, one of its affilates and a land services company working for the two firms.

The suit, filed in Jefferson County Common Pleas Court, says the landowners including five towns and one school district are owed $9.2 million.

The plaintiffs are also seeking $25,000 or more per plaintiff in compensatory and punitive damages for breach of contract and unjust enrichment for the firms' failure to providerequired  payment.

Click  here  to read more.

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North Dakota oil rig counts to lowest level since 2009

By Bob Downing Published: June 15, 2015

From the Associated Press today:

WILLISTON, N.D. (AP) — State data show the number of oil drilling rigs in North Dakota is at the lowest level since 2009.

The state Department of Mineral Resources says there were 75 rigs drilling in western North Dakota’s oil patch on Monday. That’s 112 fewer than one year ago. There were 214 rigs drilling on the same day in 2012.

The Williston Herald reports the drop occurs as companies are pumping less crude amid oil prices that have plummeting more than 40 percent since last year.

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Cambridge to host second Shale-Abration on Saturday

By Bob Downing Published: June 15, 2015

Ohio's Cambridge Area Chamber of Commerce is holding its second annual Shale-Abration Friends and Family Fest on Saturday, June 20.

It will run from 10 a.m. to 7 p.m. at the Guernsey County Fairgrounds in Old Washington.

Singer Drew Baldridge will perform at 5 p.m.

It's all free.

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FERC accepting comments on revised Ohio Valley Connector

By Bob Downing Published: June 15, 2015

The Federal Energy Regulatory Commission is seeking comment on environmental issues through June 29 tied to the revised Ohio Valley Connector Project, a natural gas pipeline from northwest West Virginia to southeast Ohio.

It would be built by Equitrans LP, a subsidiary of Pittsburgh-based EQT Midstream Partners LP.

The new line would connect Utica and Marcellus shale drillers with the Texas Eastern and Rockies Express pipelines in southeast Ohio.

The new line of 24-inch and 30-inch pipe would stretch about 60 miles in the two states.

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Health information from fracking still lacking, study says

By Bob Downing Published: June 15, 2015

More than a decade into the U.S. fracking boom, researchers still don’t have enough information to determine whether the controversial method of extracting oil and gas threatens public health, a leading health journal said recently.

 Health Affairs, which analyzes public-health issues for readers including government officials, health-care advocates and scholars, said a lack of definitive data was in part the result of scarce government funding, says NPR's StateImpact Pennsylvania.

Health Affairs also blamed corporate reluctance to disclose details on chemicals used in fracking; the long-term nature of epidemiology needed for credible studies, and flaws in some studies.

Click  here  to read the full story.

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FERC gets application for $1.4 billion Leach Express Pipeline

By Bob Downing Published: June 15, 2015

The paperwork for a new $1.4 bilion natural gs pipeline in southeast Ohio and northern West Virginia has been filed with the Federal Energy Regulatory Commission.

The application was filed recently for the Leach Express Pipeline.

Texas-based Columbia Pipeline Group is seeking federal approval to build the pipeline plus three compression stations in southeast Ohio and northern West Virginia.

It would carry natural gas from the Utica and Marcellus shales in Ohio, West Virginia and western Pennsylvania to markets served by Columbia Gas Transmission and Columbia Gulf Transmission in Mid-Atlantic and Gulf Coast states.

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U.S. rig count for oil, natural gas dropped by nine to 859

By Bob Downing Published: June 12, 2015

From the Associated Press today:

HOUSTON (AP) — Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. declined by nine this week to 859.
Houston-based Baker Hughes said Friday 635 rigs were seeking oil and 221 explored for natural gas. Three were listed as miscellaneous. A year ago, with oil prices nearly double the current levels, 1,854 rigs were active.
Among major oil- and gas-producing states, Alaska, Colorado, Kansas, New Mexico, Ohio, Texas, Utah and West Virginia each declined by one rig.
Louisiana and Oklahoma both gained one rig apiece.
Arkansas, California, North Dakota, Pennsylvania and Wyoming were unchanged.
The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

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U.S. shale drilling provides big opportunity, says new study

By Bob Downing Published: June 12, 2015

From the Harvard Business School and the Boston Consulting Group on Thursday:

BOSTON—In a new report released today, experts at Harvard Business School (HBS) and The Boston Consulting Group (BCG) have put forward a comprehensive plan to overcome the false trade-offs between reaping the enormous economic benefits of developing unconventional gas and oil, minimizing environmental impacts, and making major progress toward reduced greenhouse-gas emissions.

The report, America's Unconventional Energy Opportunity, provides solutions to breaking the gridlock that threatens America’s historic energy opportunity. It outlines a strategic, fact-based approach to developing America’s new energy advantage to increase U.S. competitiveness and drive much-needed job and economic growth, to reducing environmental impacts, and to accelerating progress on climate change. The report was an independent research effort by HBS and BCG, with no outside funding support. BCG provided pro-bono, in-kind support and expertise to take on this complex topic with HBS.

“Unconventional gas and oil represents perhaps the single largest source of competitive advantage and economic opportunity for the United States over the next decade or two, at a time when both are badly needed,” said Michael E. Porter, a professor at HBS, a cochair of the school’s multiyear U.S. Competitiveness Project, and a coauthor of the report. “But there is a real risk that American citizens, companies, and communities will fail to capitalize on this historic opportunity because of misunderstanding and distrust.”

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Maryland senator on FRESHER bill to close drilling loopholes

By Bob Downing Published: June 12, 2015

From a press release today:

Cardin Introduces Bill to Strip Oil and Gas Companies of Environmental and Public Health Exemptions

 

“Americans have a right to safe water”

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Supporters unveil BuzzFeed.com-style to boost support

By Bob Downing Published: June 12, 2015

Drilling supporters have turned to anchorman Ron Burgundy in a new campaign to win hearts and minds.

The new campaign with a BuzzFeed-style website is at www.frackfeed.com.

Click  here  to read more from the Houston Chronicle's Fuel Fix blog.

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Poll says voters in three states support Atlantic Coast Pipeline

By Bob Downing Published: June 12, 2015

From Consumer Energy Alliance on Thursday:

Voters in Virginia, North Carolina and West Virginia Strongly Support Pipeline Construction and Energy Development

Recent polling conducted for Consumer Energy Alliance (CEA) continues to examine what role the Atlantic Coast Pipeline, Keystone XL Pipeline, offshore production and other energy issues could play in the 2016 presidential election. And as echoed in recent poll results from Iowa, New Hampshire and South Carolina, voters in Virginia, North Carolina and West Virginia reinforced that energy policy will be an important issue when they cast their votes for president next fall.

Key findings:

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Bradford County mulls royalty lawsuit against Chesapeake

By Bob Downing Published: June 12, 2015

Bradford County, one of Pennsylvania's most-drilled counties, is looking at joining in lawsuits against Cheseapeake Energy over royalty payments that critics say are too low.

A number of Pennsylvania landowners have filed such suits against the energy giant.

Click  here  to read more from NPR's StateImpact Pennsylvania.

 

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Virginia panel recommends tightening drilling rules

By Bob Downing Published: June 12, 2015

From the Associated Press last week:

A Virginia advisory panel is recommending that energy companies disclose the chemical ingredients they use in horizontal fracking, a type of natural gas drilling that has spawned environmental concerns.

The proposal is among 14 recommendations that have been sent to Gov. Terry McAuliffe for review.

Besides the requirement on fracking ingredients, the recommendations also provide for greater safeguards for water supplies, testing of drilling equipment and water monitoring before drilling occurs. The latter is intended to better assess water quality before and after drilling occurs.

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AMA calls for full disclosure on chemicals used in fracking

By Bob Downing Published: June 12, 2015

From the American Medical Association on Tuesday at its annual meeting:

For immediate release:
June 9, 2015

CHICAGO - The American Medical Association (AMA), the premier national physician organization in the country, voted to adopt new policies on emerging health care topics during the second day of its Annual Meeting.

The AMA's House of Delegates is the policy-making body at the center of American medicine, bringing together an inclusive group of physicians, medical students and residents representing every state and medical field. Delegates work in a democratic process to create a national physician consensus on emerging issues in public health, science, ethics, business and government to continually provide safer, higher quality and more efficient care for patients and communities.

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Oil exploration continues in U.S. Arctic despite low prices

By Bob Downing Published: June 12, 2015

From the U.S. Energy Information Administartion today:

Alaska's crude oil production has declined from 1.8 million barrels per day (MMb/d) in 1991 to 0.5 MMb/d in 2014, and it is expected to continue declining through 2040. Almost 75% of Alaska's crude oil production from 1990 to 2012 was from the Prudhoe Bay and Kuparuk River fields in the central North Slope, which respectively produced 4.9 billion and 1.7 billion barrels of crude oil over this period.

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Tags: Alaska , crude oil , liquid fuels , resources

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Plugging bottom of Colorado injection well reduces quakes

By Bob Downing Published: June 12, 2015

From the Associated Press on Friday:

By DAN ELLIOTT
Associated Press
DENVER (AP) — The ground around a northern Colorado wastewater injection well has been relatively quiet for more than two months, offering hope that a 10-month string of more than 200 small earthquakes might have subsided.
The bottom 450 feet of the 10,800-foot-deep well was plugged with cement last year, and that might be keeping the wastewater — a byproduct of oil and gas wells — from seeping into fractures and triggering earthquakes, researchers and regulators say.
The newly shortened well is back in operation, and researchers say no quakes greater than magnitude 1 have been measured in a 7-mile radius around it since April 2.
Colorado is one of a handful of states grappling with earthquakes blamed on such wells, which inject wastewater deep underground because it’s too salty or contaminated to be poured into rivers or lakes. Similar problems have been reported in Oklahoma and Texas, as well as Alabama, Arkansas, Kansas, New Mexico and Ohio.
Wastewater injection is different from hydraulic fracturing, or fracking. Fracking is the practice of injecting high-pressure water, sand and chemicals into oil- or gas-bearing rock to increase the flow. Fracking is sometimes accompanied by “micro-earthquakes” that are usually too small to be felt, the U.S. Geological Survey says.
Injection wells push waste fluids deep underground, away from freshwater sources. Most of the waste is brackish water pumped to the surface along with oil and gas, but it can also contain discarded fracking chemicals.
A 3.2-magnitude earthquake radiated from the site of the injection well in Weld County about 65 miles north of Denver on May 31, 2014. The quake was felt some 40 miles away but no damage was reported. Researchers and the Colorado Oil and Gas Conservation Commission, which regulates the industry, eventually zeroed in on the well as the likely cause.
“It’s hard to prove conclusively,” said Anne Sheehan, a geology professor at the University of Colorado who deployed six seismometers around the site after the first quake. “There were no earthquakes there before the well.”
The state ordered the operator, NGL Water Solutions, to shut the well down until the company came up with a fix. NGL decided to seal off the bottom of the well, said Stuart Ellsworth, engineering manager for the Oil and Gas Conservation Commission.
NGL didn’t respond to requests for comment.
The state allowed the company to resume injecting wastewater at a scaled-back rate once the well was shortened. Smaller earthquakes continued sporadically but on a long, uneven decline, Sheehan said.
“It goes up and down and up and down,” she said. “But the overall trend has been a strong decrease.”
Most of the subsequent quakes recorded there were under magnitude 2, and none equaled the 3.2 quake in May 2014, she said.
The state has allowed NGL to gradually increase the injection rate at the well.
Sheehan and Ellsworth are optimistic that shortening the well fixed the problem, but both say it’s too early to declare victory. Sheehan said similar fixes are being tried in Oklahoma, and the technique has potential elsewhere.
“Well, I think it’s the answer,” Ellsworth said. “It was a remediation effort that reduced the risk of future events. At least that’s what it looks like.”
Before it was plugged, the bottom of the Colorado well came very close to a brittle layer known as basement rock, and the wastewater might have flowed into fractures, Sheehan said. The wastewater had enough pressure to push the two sides of the cracks apart, allowing them to slip, the theory goes.
Injection wells are more likely to trigger earthquakes in basement rock because it is stiffer than sedimentary rock and better able to resist movement — unless something such as the injected wastewater makes it easier for it to slip, said Justin Rubinstein, a USGS seismologist.
Researchers have known for decades that injection wells can cause earthquakes, but the phenomenon is getting more attention because the number of quakes has increased dramatically in a swath of the central U.S. from Ohio across Colorado.
An average of 24 quakes of magnitude 3 or greater were recorded in that region every year from 1973 to 2008, but by 2014 it had risen to 688, the USGS says.
“The increase in seismicity is largely, if not entirely, induced by human activity,” Rubinstein said. Pinpointing the causes in specific areas would require more detailed study, he said.
Most injection wells don’t cause earthquakes, the USGS says.

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Eco-group supports FRESHER drilling bill in Congress

By Bob Downing Published: June 12, 2015

From Environment America on Thursday:

WASHINGTON, DC -- On the heels of a U.S. Environmental Protection Agency report showing that fracking can contaminate drinking water, Sen. Ben Cardin (D-Md.) introduced a bill this evening to hold the fracking industry accountable to the nation’s Clean Water Act.
 
Co-sponsored by Sens. Dianne Feinstein (D-Calif.), Jeff Merkley (D-Ore.), and Sheldon Whitehouse (D-R.I.), the FRESHER Act would close the loophole in the Clean Water Act, expanded in 2005, that allows the oil and gas industry to build well pads and conduct large-scale, ground-disturbing activities without applying for a permit. From 2005 to 2013, well pads, pipelines, and roads to support fracking have damaged at least 360,000 acres of land, threatening water with toxic chemicals and sediment pollution -- a major source of water contamination across the country.
 
Sen. Cardin’s bill follows his own state of Maryland issuing a moratorium on fracking. It’s a companion to a measure sponsored by Rep. Matt Cartwright (D-Pa.), one of a group of bills commonly referred to as the “Frack Pack,” which closes loopholes in the Safe Drinking Water Act, the Clean Air Act, and the Clean Water Act.
 
Rachel Richardson, director of Environment America’s Stop Drilling Program, issued the following remarks in support of Sen. Cardin’s bill:
 
“The loopholes created ten years ago to protect Halliburton and other frackers have been a disaster for our water, our air, and our communities. It’s well past time for the oil and gas industry to be held accountable to our core environmental laws.
 
“No regulation can change the fact that fracking is inherently dirty and dangerous. But until we can ban fracking altogether, we must help communities on the frontlines every way we can. Environment America applauds Senator Cardin for his leadership to help protect our water from dirty drilling.”

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Hess Corp. tops U.S. energy companies in green rankings

By Bob Downing Published: June 12, 2015

New York-based Hess Corp. was the No. 1-ranked U.S. energy company in the 2015 Newsweek Green Rankings.

Click  here  to read the full story.

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Federal legislation introduced to protect water from fracking

By Bob Downing Published: June 11, 2015

A press release from Earthjustice today:

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Pipeline company says it should not have to pay taxes

By Bob Downing Published: June 11, 2015

The company operating a cross-country running beneath 13 Ohio counties said it should not have to pay millions of dollars in taxes to local governments, the Dayton Daily News reports.

The ATEX Express travels through 265 miles in Ohio and runs 1,200 miles from Texas to Pennsylvania.

County auditors along the stretch in Ohio are meeting to discuss what to do about the strategy by Houston-based Enterprise Products Partners.

The company's claim is based on the fact that the pipeline transports natural gas liquids, not natural gas, and the company is not a public utility.

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Policy Matters Ohio: Industry should pay public costs of drilling

By Bob Downing Published: June 11, 2015

From Policy Matters Ohio:

 

 

Shale drilling is growing in Ohio, as the chart below from the United States Energy Information Administration shows. But Ohio hasn't been able to hammer out a reasonable tax level, even though other heavy fracking states have a much higher tax on the resources that are permanently removed from the state when drilling takes place. Just look at North Dakota (11.5 percent of the value of oil), Oklahoma (7 percent on gas and oil) and Texas (7.5 percent of value of natural gas).

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XTO Energy says Texas earthquakes are naturally occurring

By Bob Downing Published: June 11, 2015

From the Associated Press on Wednesday:

FORT WORTH, Texas — A natural gas extraction company controlled by energy giant Exxon Mobil sought to prove Wednesday that it is not to blame for a recent rash of small earthquakes in North Texas, telling a powerful state agency that it believes the earthquakes occurred naturally.

XTO Energy submitted evidence to the Texas Railroad Commission, which regulates the state’s massive oil and gas industry, during a hearing that will test the agency’s willingness to suspend permits for injection wells based on seismology. The wells store wastewater from hydraulic fracturing, which has opened vast reserves of natural gas in North Texas but critics blame for causing small earthquakes.

The multiday hearing is the first time the commission is requiring a company to prove it’s not to blame for earthquakes. The commission, under recent policy changes, can now require companies to conduct seismic tests before applying for permits or revoke permits if wells are linked to earthquakes.

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Hess announces $5.35 billion Bakken midstream joint venture

By Bob Downing Published: June 11, 2015

From Hess Corp. today:

Hess Announces Bakken Midstream Joint Venture
Valued at $5.35 Billion
 Hess to Sell 50% Interest in Bakken Midstream Assets for $2.675 Billion
 Total After-Tax Cash Proceeds to Hess of $3.0 Billion Including JV Debt Issuance
 Hess to Retain Operational Control of Bakken Midstream Assets
 Transaction to Deliver Significant and Immediate Value to Shareholders
NEW YORK, June 11, 2015 -- Hess Corporation (NYSE: HES) (the “Company”) announced
today that it has agreed to sell a 50 percent interest in its Bakken midstream assets to Global
Infrastructure Partners, a leading global infrastructure investor with an extensive midstream
energy investment track record, for cash consideration of $2.675 billion. Hess and Global
Infrastructure Partners will create a premier midstream joint venture – Hess Infrastructure
Partners. Upon closing, the joint venture will incur $600 million of debt through a 5-year Term
Loan A facility with proceeds distributed equally to both partners, resulting in total after-tax
cash proceeds, net to Hess, of $3.0 billion. In addition the joint venture will have independent
access to capital including a $400 million 5-year Senior Revolving Credit Facility, which is fully
committed. The joint venture upon closing plans to continue to pursue a proposed initial public
offering (IPO) of Hess Midstream Partners LP common units.
John Hess, Chief Executive Officer of Hess Corporation, said, “This transaction delivers
significant and immediate value to our shareholders. The joint venture with its strategically
located assets will be one of the largest midstream operators in the Bakken. By capitalizing on
the financial strength and midstream energy experience of Global Infrastructure Partners, the
2
joint venture will be in a strong position to fund future energy infrastructure investments and
continue to grow its midstream business.”
With the proceeds from this transaction, plus cash on hand and an untapped $4 billion
revolving credit facility, Hess will have a highly advantaged liquidity position compared to its
peer group. Consistent with its financial strategy, the company will use proceeds from this
transaction to preserve the strength of its balance sheet in the current oil price environment,
provide additional financial flexibility for future growth opportunities and continue to repurchase
stock on a disciplined basis.
The transaction is subject to customary closing conditions and is expected to be completed
early in the third quarter of 2015. The Hess midstream assets to be included in the joint
venture are:
 Natural gas processing plant in Tioga, North Dakota;
 Rail loading terminal in Tioga and associated rail cars;
 Crude oil truck and pipeline terminal in Williams County, North Dakota;
 Propane storage cavern and rail and truck transloading facility in Mentor, Minnesota;
and
 Crude oil and natural gas gathering systems in North Dakota.
Financial Information
As a result of the joint venture, Hess will begin reporting its Bakken-related midstream
operations as a separate midstream segment in its consolidated financial statements and will
begin disclosing certain historical and forward-looking financial information for this segment.
For the three months ended March 31, 2015, the midstream segment had net income of $27
million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $64
million.
Hess expects midstream segment EBITDA for the twelve months ending March 31, 2016 to be
$290 million to $300 million. Hess also expects capital expenditures to be funded by the joint
venture on a 100 percent basis for the same period to be $325 million to $350 million.
3
Joint Venture
The board of directors for Hess Infrastructure Partners will be comprised of six directors, with
three members elected by Hess and three by Global Infrastructure Partners. Pursuant to the
joint venture agreement, Hess, through its elected directors, will retain control of the midstream
assets’ operations and annual budgeting process. Other decisions, such as capital structure,
debt and equity offerings, and new contracts will require joint approval by both Hess and
Global Infrastructure Partners elected directors.
Hess will operate the assets owned by the joint venture as a contract service provider.
Employees who work in these assets today will remain Hess employees.
Conference Call Webcast and Presentation
Hess Corporation will hold a conference call webcast today at 9 a.m. Eastern Daylight Time.
Please click here to listen to the call and view related presentation materials. An audio-only
option will be available by dialing 1-866-578-5771 and entering the pass code 25002870
after 8:45 a.m. To join the call from outside the United States, parties should dial 1-617-213-
8055 and enter the pass code 25002870.
The presentation materials will be available immediately after the call on hess.com. An audioonly
replay will be available from 1 p.m. today through June 25, 2015 by dialing 1-888-286-
8010 and entering the pass code 81060610. Outside the United States, parties should dial 1-
617-801-6888 and enter the pass code 81060610.
About Hess Corporation
Hess Corporation is a global independent energy company engaged in the exploration and
production of crude oil and natural gas and a leading operator in the Bakken. More information
on Hess Corporation is available at http://www.hess.com.
# # #

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EV Energy Partners closes on Ohio midstream sale

By Bob Downing Published: June 11, 2015

From EV Energy Partners:

HOUSTON, June 10, 2015 /PRNewswire/ -- EV Energy Partners, L.P. (NASDAQ: EVEP) today announced it has closed the previously announced sale of its entire 21 percent interest in Utica East Ohio Midstream L.L.C., (UEO), to Utica Gas Services, L.L.C., a subsidiary of Williams Partners L.P. (NYSE: WPZ), and M3 Ohio Gathering LLC, for total cash consideration of $575 million.  EVEP's net capital contribution to UEO was approximately $294 million. 

EVEP intends to initially use the net proceeds of the disposition to repay all amounts outstanding under its revolving credit facility and to hold the remainder available for future activities.  Availability under the revolving credit facility may be used to fund future activities, including acquisitions of oil and natural gas properties. 

Jefferies LLC acted as EVEP's exclusive financial advisor in connection with the divestiture.

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Rex Energy releases initial well results in Moraine East area

By Bob Downing Published: June 11, 2015

From Rex Energy today:

STATE COLLEGE, Pa., June 11, 2015 (GLOBE NEWSWIRE) -- Rex Energy Corporation (Nasdaq:REXX) ("the company") today announced initial production test results from the company's first two wells in the Moraine East Area, the Renick 2H (Marcellus) and the Renick 3H (Upper Devonian Burkett).

As previously announced, the company finished completion operations on the four-well Renick pad, consisting of three Marcellus wells and one Upper Devonian Burkett well. The Renick 2H was drilled to a lateral length of approximately 6,000 feet and completed in 40 stages with sand concentrations of 2,300 pounds per foot. The Renick 2H produced at a 24-hour test rate, assuming full ethane recovery, of approximately 6.6 MMcfe/d, consisting of 3.0 MMcf/d of natural gas, 566 bbls/d of NGLs and 47 bbls/d of condensate. At the time the Renick 2H was shut in, the well was still cleaning up and continuing to experience an increase in the production rate. Based on composition analysis, the gas being produced is approximately 1,309 BTU.

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Gulfport buys 35,325 acres, 18 uncompleted wells, 4-well pad

By Bob Downing Published: June 10, 2015

From Gulfport Energy:

OKLAHOMA CITY, June 9, 2015 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (Nasdaq:GPOR) ("Gulfport" or the "Company") today announced that the Company has entered into agreements to acquire additional acreage in the Utica Shale, associated assets and incremental firm transportation commitments from American Energy – Utica, LLC ("AEU").

Acquisition Highlights

As of June 8, 2015, Gulfport purchased approximately 6,198 gross (6,198 net) acres in Belmont and Jefferson Counties, Ohio from AEU for a purchase price of approximately $68.2 million, subject to adjustment (the "Belmont/Jefferson acquisition"). This acreage is located near or adjacent to the acreage included in Gulfport's previously and still pending announced acquisition of Paloma Partners III, LLC ("Paloma"). This newly acquired Belmont and Jefferson County acreage is undeveloped and is expected to fit into the Company's development plan for the Paloma acreage area.

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McClendon's company has new name, $407 million Utica deal

By Bob Downing Published: June 10, 2015

Aubrey McClendon’s American Energy Appalachian Holdings LLC has a new name and has sold off 35,000 acres of Utica Shale holdings in eastern Ohio for $407 million.
The company, now known as Ascent Resources LLC, will be a stand-alone company that will be independent of  American Energy Partners LP founded in 2013 by McClendon, the former CEO of Chesapeake Energy.
The 35,000 acres and certain associated gathering assets in Monroe, Belmont and Jefferson counties were purchased by Gulfport Energy Corp., another key player in the Utica Shale.
The acreage acquired is in the dry gas window of the Utica Shale with little liquid content.

When the deals are completed, Oklahoma-based Gulfport will hold about 243,000 acres in the Utica Shale.
The biggest chunk of the acquired land, 29,100 acres, is in Monroe County. There are also 6,200 acres in Belmont and Jefferson counties.
The land was not in Ascent Resources’ immediate development plans and better fit into Gulfport’s activities, Ascent Resources said.
The leases were sold by American Energy-Utica LLC, one of Ascent’s two operating subsidiaries.
The subsidiary also announced it has completed a combined equity and debt financing of $977 million.
The combined proceeds of $1.4 billion will provide the company with $700 million of liquidity after repaying existing debts, Ascent Resources said.
It said it plans to deploy the capital for ongoing development of its Utica Shale assets.
“These transactions place Ascent on strong footing from a liquidity standpoint and allow the company to continue to develop its tremendous asset base,” said chairman of the board and CEO Jeffrey A. Fisher in a statement.
Oklahoma-based Ascent has about 235,000 acres in the Utica and Marcellus shales in Ohio and West Virginia. Of that total, about 190,000 acres in eastern Ohio.
Ascent Resources’ other subsidiary is American Energy-Marcellus LLC.

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USGS: Six facts about human-caused earthquakes

By Bob Downing Published: June 10, 2015

The central United States has undergone a dramatic increase in seismicity over the past 6 years. From 1973-2008, there was an average of 24 earthquakes of magnitude 3 and larger per year. From 2009-2014, the rate steadily increased, averaging 193 per year and peaking in 2014 with 688 earthquakes. So far in 2015, there have been 430 earthquakes of that size in the central U.S. region through the end of May.

There are many questions and misconceptions about what’s happening. How does the observed increase relate to oil and gas production activities?  Does this connect to fracking—more formally known as hydraulic fracturing? What exactly is fracking? What are induced earthquakes?

USGS scientists recently published an article that explains what is causing these seismic events and addresses common misunderstandings. The article is published in the Seismological Research Letters journal.

Fluid Injection Can Cause Earthquakes

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Ohio has 1,505 drilled Utica wells, 901 producing Utica wells

By Bob Downing Published: June 9, 2015

Ohio has approved 1,929 Utica Shale permits, as of June 6.

That total includes 1,505 drilled Utica wells and 901 producing Utica wells.

There are 23 rigs working in Ohio.

Seven new permits were approved: 2 in Belmont County, two in Carroll County and three in Harrison County.

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EIA releases June 2015 Short-Term Energy Outlook

By Bob Downing Published: June 9, 2015

From the U.S. Energy Information Administration today:

U.S. Energy Information Administration Administrator Adam Sieminski issued the following comments on EIA’s June 2015 Short-Term Energy Outlook, which was released on Tuesday:

 

The full STEO can be viewed at: http://www.eia.gov/forecasts/steo/

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U.S. shale oil production expected to slip in July, EIA says

By Bob Downing Published: June 9, 2015

The federal forecast of U.S. shale production is sinking again for the third month in a row, but the anticipated drop will only be 2 percent.

Daily oil production at the nation’s six biggest shale plays is set to slip by 91,000 barrels from June to July, the Energy Information Administration says.

Oil production totals are expected to total 5.48 million barrels next month.

The drop is small, considering that nearly 1,000 oil rigs have been idled in recent months by low commdity prices.

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EIA says new well production will grow in Utica, Marcellus shales

By Bob Downing Published: June 9, 2015

From the U.S. Energy Information Administration on Monday:

The Drilling Productivity Report uses recent data on the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in production from existing oil and natural gas wells to provide estimated changes in oil and natural gas production for seven key regions. EIA's approach does not distinguish between oil-directed rigs and gas-directed rigs because once a well is completed it may produce both oil and gas; more than half of the wells produce both.

While shale resources and production are found in many U.S. regions, at this time EIA is focusing on the seven most prolific areas, which are located in the Lower 48 states. These seven regions accounted for 95% of domestic oil production growth and all domestic natural gas production growth during 2011-13.

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Crude oil by rail provides West Coast with supply

By Bob Downing Published: June 9, 2015

From the U.S. Energy Information Administration today:

While total U.S. crude oil production increased by nearly 3.2 million barrels per day (b/d) from 2010 to 2014, production in the West Coast region (PADD 5) decreased by 0.1 million b/d, continuing a long-term decline. With no major crude oil pipelines connecting the West Coast to other parts of the country, refineries on the West Coast adjusted to the declining in-region production by increasing imports of foreign crude oil, reaching an average of 1.1 million b/d over the past five years. Shipments of domestic crude by rail (CBR) to the West Coast have also increased, from an average of 23,000 b/d in 2012 to 157,000 b/d in 2014. In the first quarter of 2015, West Coast CBR movements averaged 191,000 b/d.

Read More ›

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Company to add midstream facilities in Butler County

By Bob Downing Published: June 9, 2015

Texas-based Energy Transfer Partners plans to spend $1.5 billion on pipelines and processing facilities in the Marcellus and Upper Devonian shales in western Pennsylvania.

It is partnering with Edgemarc Energy.

The plans announced previously include purchasing 20 miles of pipelines, building 100 additional miles and constructing processing facilities in Butler County.

Click  here  to read more about the details released on Monday.

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Study says frack sand mining is boon for Midwest communities

By Bob Downing Published: June 9, 2015

From the Chicago-based Heartland Institute on Monday:

Study: Frac Sand Mining a Boon for Employment, Earnings, Economies

CHICAGO (June 8) – A new Policy Study from The Heartland Institute shows industrial sand mining has been “a significant driver of economic growth across the Upper Midwest.” If done in an environmentally responsible manner, the study finds, “it can be an important source of employment and earnings for decades to come.”

The study, titled “Economic Impacts of Industrial Silica Sand (Frac Sand) Mining,” is the second in a series by Heartland Institute Research Fellow Isaac Orr and geologist Mark Krumenacher, who is principal and senior vice president of GZA GeoEnvironmental Inc., addressing the mining of industrial silica sand, known as “frac sand.” The sand is abundant in the Upper Midwest – especially rural Wisconsin, which produces two-thirds of the nation’s frac sand – and is essential for hydraulic fracturing for oil and natural gas.

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Coalition challenges DOT over crude rail notification rules

By Bob Downing Published: June 9, 2015

From Earthjustice on Monday:

Cities, Waterkeepers, Conservation Groups Seek Notification on Explosive Oil Train Traffic

Coalition appeals tank car rule that keeps communities, emergency responders in the dark


Seattle, WA — Last Friday, a broad coalition that includes municipalities, Waterkeeper groups, and conservation organizations challenged the U.S. Department of Transportation (DOT) over its emergency responder and public notification provisions in the DOT’s Oil Tank Car Safety Rule. The administrative appeal asks DOT to modify the Final Rule to keep previous notification requirements in place and to eliminate provisions that make it difficult for emergency responders to gather information on oil trains rumbling through their communities.

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Forbes magazine: U.S. natural gas growth is 'amazing'

By Bob Downing Published: June 8, 2015

Forbes magazine reports on the "amazing" U.S. natural gas boom from shale drilling.

It says that 50 percent of today's natural gas comes from shale drilling.

The U.S. Energy Information Administration in 2012 said that wouldn't happen until 2035. It has happened much sooner.

Click  here  to read more.

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Sunoco Logistics looking at adding third Pennsylvania pipeline

By Bob Downing Published: June 8, 2015

Sunoco Logistics Partners LP is considering adding a third Marine East Pipeline in Pennsylvania.

The 350-mile line would run to near Philadelphia

Marine East 1 started handling propane last December, and will soon be adding ethane.

Marine East 2 is planned to handle ethane, butane and propane.

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Marathon Petroleum adds condensate splitter in Kentucky

By Bob Downing Published: June 8, 2015

Marathon Petroleum had added a new $170 million condensate splitter at its refinery at Catlettsburg, Ky.

The plant is handling about 35,000 barrels per day from the Utica and Marcellus shales.

The facility has been under construction for the last two years.

Click  here   to read the full story.

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Pennsylvania landowners with leases sue drillling critics

By Bob Downing Published: June 8, 2015

A dozen western Pennsylvania residents who have leased their land for gas drilling are suing local opponents of gas development in a case that free-speech advocates say could have far-reaching consequences for critics’ ability to debate the industry’s plans, reports NPR's StateImpact Pennsylvania.

 Click  here  to read the full story.

.

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Natural gas production dropped 1 percent from April to May

By Bob Downing Published: June 8, 2015

From Bentek Energy last Thursday:

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Group refutes EID column on added costs to communities

By Bob Downing Published: June 8, 2015

From the Ohio Community Rights Network:

Costs to Communities from Corporate Harms
Far Exceed Cost to Defend and Protect their Communities

 

By Tish O’Dell, Ohio CELDF Organizer

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No support for Nexus Pipeline, Oberlin leader writes

By Bob Downing Published: June 8, 2015

From the Coalition to Reroute Nexus:

News Release

No support for Nexus pipeline from Oberlin City Council, writes Broadwell

 

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U.S. rig count drops by seven, Baker Hughes reports

By Bob Downing Published: June 8, 2015

The number of U.S. drilling rigs dropped seven last week, according to Texas-based Baker Hughes, the well-service company.

There were 868 rigs.

That total has dropped 992 from a year ago.

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Drilling tax increase not likely part of new Ohio state budget

By Bob Downing Published: June 8, 2015

From the Associated Press on Sunday:

COLUMBUS, Ohio — A drilling tax increase proposed by Republican Gov. John Kasich isn’t likely to re-emerge in the Ohio Senate budget revisions due Monday.

Participants in negotiations among the industry, administration and lawmakers indicated last week that nothing close to a compromise on the Senate proposal has been struck yet. Once the Senate passes its version of the $71.5 billion, two-year spending blueprint, the bill will go to a conference committee where some version of a drilling tax could be re-inserted.

Shawn Bennett, executive vice president of the Ohio Oil and Gas Association, an industry group that opposes the increase, said the last compromise suitable to the industry came last session. An industry-backed proposal at the time cleared the Ohio House.

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New EIA data shows more detail for crude oil stocks, storage

By Bob Downing Published: June 8, 2015

From the U.S. Energy Infotrmation Administartion today:

In an effort to better present crude oil storage capacity and use across the United States, EIA has prepared new tables as part of the semiannual Working and Net Available Shell Storage Capacity Report. The new series show crude oil stocks held at refineries crude oil in tanks and underground storage in each Petroleum Administration for Defense District (PADD). Previously, this information was only available at the national level.

Read More ›

Tags: crude oil , Cushing , liquid fuels , storage

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Global petrochemical prices rise 4 percent in May, Platts says

By Bob Downing Published: June 8, 2015

From Platts on Thursday:

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Both sides claim victory, after EPA issues fracking-water review

By Bob Downing Published: June 4, 2015

The American shale drilling industry and national environmental groups both claimed victory, after the U.S. Environmental Protection Agency on Thursday  released its long-awaited draft national report on whether hydraulic fracturing or fracking threatens drinking water.
The EPA said that fracking has “not led to widespread, systemic impacts on drinking water resources.” But the agency acknowledged that the whole drilling process, not just fracking, has impacted drinking water in some locales.
The agency in a teleconference said drinking water remains vulnerable to these problems in drilling Ohio’s Utica Shale and other shale areas:
•Water withdrawals in areas with little water.
•Fracking conducted into formations containing drinking water.
•Inadequately cased or cemented wells allowing below-ground migration of gases and liquids.
•Inadequately treated wastewater being discharged into drinking water.
•Spills of hydraulic fluids and fracking wastewater.
But the number of water-pollution problems from drilling was “small compared to the number of hydraulically fractured wells,” the EPA said in its 28-page executive summary.
EPA spokesman Dr. Thomas A. Burke called the EPA’s assessment — it is thousands of pages in length and includes 20 peer-reviewed scientific reports — the most complete scientific compilation of scientific data to date with more than 950 sources.
It will provide state regulators, the drilling industry and others “a critical resource to identify how best to protect public health and their drinking-water resources,” he said.
Fracking requires large quantities of water, sand and certain chemicals. They are piped below ground under pressure to crack the rock containing natural gas and liquids including crude oil.
Each well fracked typically requires between 1 million and 5 million gallons of water. A total of 1,076 chemicals have been identified as being used in fracking wells. The industry generates 800 billion gallons of wastewater annually that must be properly handled.
The EPA has a limited role in overseeing drilling. States, not the federal government, play the key role.
The EPA water review began in 2010 at the request of Congress. The analysis cost nearly $30 million. The industry generally refused to cooperate with the EPA. It balked at the scope of the studuy.
The American Petroleum Institute hailed the EPA announcement, saying existing rules and industry practices have kept drinking water safe.
“After more than five years and millions of dollars, the evidence gathered by EPA confirms what the agency has already acknowledged and what the oil and gas industry has known,” said API Upstream Group Director Erik Milito. “Hydraulic fracturing is being done safely under the strong environmental stewardship of state regulators and industry best practices.”
More than 1 million wells have been safely fractured in the last 65 years, he said.
Said Shawn Bennett of the Ohio Oil and Gas Association: "The recent EPA study reaffirms the fact that hydraulic fracturing is a scientifically sound and well-regulated completion process. Hopefully our detractors will recognize the study’s findings and embrace this process which is vital to providing tens of thousands of jobs as well as provide abundant, low cost, clean burning energy for Ohio residents across the state.”

Added U.S. Rep. Robert Latta, R-Bowling Green, “The study confirms what years of research and sound science have told us: hydraulic fracturing is a proven technique being utilized safely and effectively across the country, and its use as a well stimulation technique has effectively turned the United States into the world’s leading energy producer.
“This study further mitigates any concerns about hydraulic fracturing’s potential impacts to ground water, and will allow us to continue development under the robust regulatory oversight of the developing states,” he said.
Environmental groups disagreed.
“The assessment smashes the myth that there can be oil and gas development without impacts to drinking water,” said John Noel of Clean Water Action.
Said Amy Mall of the Natural Resources Defense Council: “This study provides solid scientific analysis that fracking has contaminated drinking water around the country. The report, while limited, shows fracking can and has impacted drinking water sources in many different ways. We agree that the public needs better protections.
“There are still significant gaps in the scientific understanding of fracking. This study is site-specific and limited, as EPA has explained which makes it impossible to fully understand all the risks at this time. This study is missing some critical elements, hamstringing its comprehensiveness..… Much more science will be necessary to fully understand all of the risks. But despite the holes, it is clear EPA has found impacts — they just cannot be sure how widespread those impacts are.”
After review, the EPA study will be finalized by the EPA Science Advisory Board and public review and comment.
A notice will be printed in Friday’s Federal Register on the SAB review and how to comment on the draft assessment.
The assessment is available at www.epa.gov/hfstudy.

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Industry says EPA report is further proof that fracking is safe

By Bob Downing Published: June 4, 2015

From the American Petroleum Institute today:

API: EPA hydraulic fracturing review confirms safety

WASHINGTON, June 4, 2015 /PRNewswire-USNewswire/ -- A draft report by the Environmental Protection Agency (EPA) confirms that hydraulic fracturing has not led to widespread, systemic impacts on drinking water resources thanks to the safety and effectiveness of state and federal regulations, and current industry practices, said API.

"After more than five years and millions of dollars, the evidence gathered by EPA confirms what the agency has already acknowledged and what the oil and gas industry has known," said API Upstream Group Director Erik Milito. "Hydraulic fracturing is being done safely under the strong environmental stewardship of state regulators and industry best practices."

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EPA study understates fracking risk, Enviroment America says

By Bob Downing Published: June 4, 2015

From Environment America today:

WASHINGTON, DC -- The U.S. Environmental Protection Agency’s long-awaited fracking study understates the drilling technique’s impact on drinking water, Environment America said today. The study’s finding that fracking poses no widespread, systematic risks stands in stark contrast to a mounting body of scientific evidence demonstrating fracking’s threat to water resources and public health.

“This study’s main finding flies in the face of fracking’s dangerous reality,” said Rachel Richardson, director of Environment America’s Stop Drilling program. “The fact is, dirty drilling has caused documented, widespread water contamination across the country.”

Despite industry secrecy and a lack of adequate testing, a growing number of studies have found a clear link between fracking and water contamination.

Evidence of fracking’s harms isn’t limited to independent scientific studies. State regulators in Pennsylvania, Colorado, and New Mexico alone have documented more than 1,000 cases of surface and groundwater contamination linked to fracking and other oil and gas development.

The EPA study released today reflects pressure from Congress and the oil and gas industry to severely limit its scope.

Over the course of five years, the industry succeeded in watering down the study by refusing to allow baseline testing -- an account of the chemicals present in groundwater before drilling began. One of the companies that had initially agreed to testing, Chesapeake Energy, lobbied the EPA to limit when and where they could test, EPA documents show.

The study also fails to examine how underground injection of wastewater containing toxic and even cancer-causing chemicals threatens our rivers, streams and drinking water.

Fracking wastewater – often laced with heavy metals, such as lead and arsenic, and radioactive material, such as radon and uranium – returns to the surface in huge volumes, yet there is no safe, sustainable way of dealing with this toxic waste.

EPA does acknowledge that treatment of toxic wastewater is a “vulnerability” of fracking. Other vulnerabilities identified in the study include the strain it puts on water resources and the potential for chemicals to migrate underground.

The list of fracking’s vulnerabilities is long indeed, which is why Environment America has long called for the practice to be banned.

“The only way to protect our drinking water and communities from fracking is to end our reliance on dirty oil and gas, and use clean energy instead,” said Richardson.

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EDF responds to EPA fracking-drinking water assessment

By Bob Downing Published: June 4, 2015

From the Environmental Defense Fund today:

EDF Statement on EPA's Water Study of Hydraulic Fracturing for Oil and Gas

(WASHINGTON, D.C. – June 4, 2015) The U.S. Environmental Protection Agency (EPA) today issued findings from its long-awaited national study to better understand impacts of hydraulic fracturing on drinking water resources. The impact of this pervasive and large-scale practice on our water supply is both large and the least understood environmental risk of the nation’s oil and gas boom.

“The process of fracking itself is one risk factor. But in fact it’s not the biggest one. Ongoing physical integrity of the wells and handling the millions of gallons of wastewater coming back to the surface after fracking, over the lifetime of each well, are even bigger challenges. Relentless focus on these issues by regulators and industry is critical,” said Mark Brownstein, EDF Vice President, Climate and Energy Program.

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More needs to be done to protect drinking water, CWA says

By Bob Downing Published: June 4, 2015

From Clean Water Action today:

“The Assessment smashes the myth that there can be oil and gas development without impacts to drinking water. Fracking is a complex process that poses a complex array of potential risks to drinking water. The Assessment informs actions we need to take to protect drinking water and public health by outlining the numerous vulnerabilities throughout the fracking water lifecycle.” – John Noël, National Oil & Gas Campaigns Coordinator, Clean Water Action.

 

Washington DC – Today the U.S. Environmental Protection Agency (EPA) released its long-awaited draft Assessment of the Potential Impacts of Hydraulic Fracturing for Oil & Gas on Drinking Water Resources.

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Sierra Club responds to U.S. EPA fracking review

By Bob Downing Published: June 4, 2015

From the Sierra Club today:

WASHINGTON, D.C. -- Today, the EPA released a study that confirms that fracking poses a risk to drinking water sources. Fracking is inherently dirty and dangerous. In a review of its records, the Pennsylvania Department of Environmental Protection found that 234 private drinking water wells had been contaminated by drilling and fracking. In Colorado, more than 340 leaks or spills that contaminated groundwater have been reported. In New Mexico, state records document 743 such instances. These examples offer just a glimpse of the dangers posed by dirty fracking.   

In response, Sierra Club Executive Director Michael Brune released the following statement:

“The EPA's water quality study confirms what millions of Americans already know - that dirty oil and gas fracking contaminates drinking water.

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U.S. EPA report looks at fracking threat to drinking water

By Bob Downing Published: June 4, 2015

From the U.S. EPA today:

EPA Releases Draft Assessment on the Potential Impacts to Drinking Water Resources from Hydraulic Fracturing Activities

Assessment shows hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources and identifies important vulnerabilities to drinking water resources.

WASHINGTON—The Environmental Protection Agency (EPA) is releasing a draft assessment today on the potential impacts of hydraulic fracturing activities on drinking water resources in the United States. The assessment, done at the request of Congress, shows that while hydraulic fracturing activities  in the U.S. are carried out in a way that have not led to widespread, systemic impacts on drinking water resources, there are potential vulnerabilities in the water lifecycle that could impact drinking water. The assessment follows the water used for hydraulic fracturing from water acquisition, chemical mixing at the well pad site, well injection of fracking fluids, the collection of hydraulic fracturing wastewater (including flowback and produced water), and wastewater treatment and disposal [http://www2.epa.gov/hfstudy/hydraulic-fracturing-water-cycle].

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Law firm's new report looks at Marcellus, Utica issues

By Bob Downing Published: June 4, 2015

From a press release today:

Babst Calland Report Focuses on Legal and Regulatory Challenges

Facing Appalachian Basin Oil and Gas Producers, Midstream Operators

 

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Industry group responds to University of Pittsburgh study

By Bob Downing Published: June 4, 2015

From Energy in Depth, an industry-backed pro-driling group, in response to University of Pittsburgh study release:

Researchers from the University of Pittsburgh released a study this week claiming to have found a potential correlation between low infant birth weights and distance from well sites. Despite what you may read in the headlines, the researchers actually make it very clear that they did not find shale development to be the cause of low birth weights.  As one of the researchers, Dr. Bruce Pitt, stated in the report’s press release:

“It is important to stress that our study does not say that these pollutants caused the lower birth weights.”

The study, which was funded by the anti-fracking Heinz-Endowment and published in a journal that does not require peer-review, looked at data from over 15,000 babies born in Washington, Westmoreland and Butler Counties from 2007 to 2010 that lived within 10 miles of well sites during their gestation period. The researchers base their claims on percentages of “small for gestational age” babies in four “quartiles” – the first quartile being farthest away from shale gas wells and the fourth quartile being the closest to shale gas wells.

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Low infant birth weight more likely near fracked wells, study says

By Bob Downing Published: June 4, 2015

From a press release:

Lower Birth Weight Associated with Proximity of Mother’s Home to Gas Wells

PITTSBURGH, June 3, 2015 – Pregnant women living close to a high density of natural gas wells drilled with hydraulic fracturing were more likely to have babies with lower birth weights than women living farther from such wells, according to a University of Pittsburgh Graduate School of Public Health analysis of southwestern Pennsylvania birth records.

The finding does not prove that the proximity to the wells caused the lower birth weights, but it is a concerning association that warrants further investigation, the researchers concluded. The study was funded by The Heinz Endowments and published in the current issue of PLOS ONE.

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MarkWest Energy signs dealswith drillers in Permian Basin

By Bob Downing Published: June 4, 2015

Colorado-based MarkWest Energy Partners has signed agreements to provide pipelines and a natural gas processing plant in the Permian basin in Texas for Chevron and Cimarex Energy.

The processing plant in Culberson County <Texas, should be operational in the second quarter 2016.

Click  here  to read more.

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Nexus Pipeline sues to force Ohio landowners to allow access

By Bob Downing Published: June 4, 2015

The company building the Nexus Pipeline across northern Ohio has filed a lawsuit in Columbiana County seeking an injunction to force two landowners to allow survey access to their properties.

Click  here  to read more.

 

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Maryland imposes two-year moratorium on drilling

By Bob Downing Published: June 4, 2015

A two-year moratorium on fracking in Maryland was approved last Friday without the signature of Gov. Larry Hogan.

Under the plan, Maryland will finalize drilling rules by Oct. 1, 2016. No drilling can take place until Oct. 1, 2017.

Click  here  to read more.

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Mannon named to head Stallion Oilfield Services

By Bob Downing Published: June 4, 2015

Texas-based Stallion Oilfield Services has named David C. Mannon to be president, CEO and a member of the Board of Directors.

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Pennsylvania Senate approves Quigley's DEP nomination

By Bob Downing Published: June 4, 2015

The Pennsylvania State Senate on Wednesday approved the nomination of John Quigley to head the Department of Environmental Protection by a 44-4 vote.

Click  here  to read more from NPR's StateImpact Pennsylvania.

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Canada mulling British Columbia LNG export facility

By Bob Downing Published: June 4, 2015

From the U.S. Energy Information Administration:

Canada's Pacific NorthWest LNG export project moves closer to a final decision, possibly next month

On May 20, the sponsors of one of the proposed Canadian liquefied natural gas (LNG) export projects—Pacific NorthWest LNG—reached a set of agreements with the government of British Columbia, which moved the project a step closer to reaching a final investment decision (FID) targeted for next month. The agreements define long-term royalty rates, minimum natural gas production output targets, government assistance on infrastructure and aboriginal consultation, and measures to assure that the project will not be subject to tax or fee increases through the project's term.

The project includes a two-train, 1.6 billion cubic feet per day (Bcf/d) facility, located on Lelu Island in Prince Rupert, British Columbia, in western Canada. In April 2014, the project received authorization from the Canadian National Energy Board to export up to 2.6 Bcf/d of LNG per year for 25 years starting in 2019. It also has secured an Environmental Assessment Certificate issued by the British Columbia Environmental Assessment Office. The project is currently undergoing environmental review by the Canadian Environmental Assessment Agency, expected to be completed this year, which would complete the permitting requirements of the liquefaction facility.

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U.S. crude oil increases are mostly light, sweet crude

By Bob Downing Published: June 4, 2015

From the U.S. Energy Information Administration today:

U.S. crude oil production has grown rapidly in recent years, primarily from light, sweet crude (less dense, lower sulfur content) from tight resource formations. Roughly 90% of the nearly 3.0 million barrel per day (b/d) growth in production from 2011 to 2014 consisted of light, sweet grades, meaning they have an API gravity of 40 or above and a sulphur content of 0.3% or less.

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Tags: crude oil , forecast , production

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Capstone Turbine to furnish 25 microturbines for shale plays

By Bob Downing Published: June 3, 2015

From Capstone Turbine Corp. today:

CHATSWORTH, Calif., June 3, 2015 (GLOBE NEWSWIRE) -- Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:CPST), the world's leading clean technology manufacturer of microturbine energy systems, announced today that it received an order for 25 C65 microturbines to fulfill the continual expansion of existing oil and gas customer fleets in shale plays across the western United States.

Horizon Power Systems, Capstone's distributor for the Eagle Ford, Permian, Barnett, Mancos, San Juan, and Wattenberg Shale plays, secured the order, which is expected to be commissioned later this year. The order will serve numerous facets of the shale oil and gas production process and help to bolster aging infrastructures throughout these regions.

The natural-gas-fueled C65 microturbines will be installed in dual mode, which allows each customer to operate independently of the grid or with the grid in a load sharing capacity. Once commissioned, the microturbine systems will decrease the operating costs of key U.S. shale operations and ensure that reliable power is delivered to each site.

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Federal Reserve Bank: No alarms over loans to drillers

By Bob Downing Published: June 3, 2015

From the Federal Reserve Bank, Cleveland:

Loans to oil and gas industry expected to deteriorate somewhat, but Fourth District bankers and bank supervisors are not sounding the alarm

The decline in oil and gas prices has led to cutbacks and layoffs in the oil and gas industry. According to the Federal Reserve Board’s most recent Senior Loan Officer Opinion Survey, bankers expect the quality of loans made to the oil and natural gas drilling or extraction sector to deteriorate somewhat this year. That said, the bankers surveyed indicated that their exposures are small and that they are taking steps to mitigate the risk of loan losses.

Banks in the Fourth Federal Reserve District, which comprises Ohio, western Pennsylvania, the northern panhandle of West Virginia, and eastern Kentucky, are among those with increased exposures to the oil and gas industry, says Jenni Frazer, an assistant vice president and deputy regional officer of the Federal Reserve Bank of Cleveland’s Cincinnati Branch. While noting that bankers have increased their oversight and monitoring of impacted borrowers, Frazer says there’s no sense of alarm. “In the short term, the oil and gas industry can withstand these lower prices,” she says.

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N.Y. adds roadblock to Canada oilsands terminal in Albany

By Bob Downing Published: June 3, 2015

From the Associated Press on Tuesday:

The state of New York has thrown a bureaucratic roadblock into plans to build an oilsands facility in the state capital, reversing a decision that would have allowed the project, after criticism from the Obama administration.

The state’s Department of Environmental Conservation (DEC) in 2013 gave initial approval to energy supply company Global Partners to retrofit an existing facility at the Port of Albany to handle bitumen from Canada’s oilsands shipped in by rail. The department said at the time the project would not have “a significant environmental impact.”

But after months of vocal public opposition to the project, the DEC has now rescinded that initial approval, ordering it to undergo a full environmental review.

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Virginia advisory panel issues 14 suggestions for drilling

By Bob Downing Published: June 3, 2015

From the Associated Press on Tuesday:

RICHMOND, Va. (AP) — A Virginia advisory panel is recommending that energy companies disclose the chemical ingredients they use in horizontal fracking, a type of natural gas drilling that has raised environmental concerns.

The recommendation, among 14 proposed by the panel, would also require drilling companies to provide the state with closely guarded industry “recipes” for the fracking fluids.

The proposals have been submitted to Gov. Terry McAuliffe’s administration for review and a new round of public review.

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Chesapeake, Gulfport, Antero are top Ohio natural gas producers

By Bob Downing Published: June 3, 2015

Here are the top natural gas producers in Ohio in first quarter 2015:

1. Chesapeake Energy, 70,231,944 Mcf.

2. Gulfport Energy, 43,314,446 Mcf.

3. Antero Resources, 26,179,673 Mcf.

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Chesapeake, American Energy Utica are Ohio top oil-producers

By Bob Downing Published: June 3, 2015

Here is how the drilling companies ranked for oil production in Ohio is the first quarter 2015:

1. Chesapeake Energy, 1,809,081 barrels.

2. American Energy Utica, 507,780 barrels.

3. Gulfport Energy Corp., 473,894 barrels.

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Carroll, Belmont, Harrison are Ohio's top gas-producing counties

By Bob Downing Published: June 2, 2015

Here are top natural gas-producing counties in Ohio's Utica shale in first quarter 2015:

1. Carroll County, 51,765,751 Mcf.

2. Belmont County, 44,183,745 Mcf.

3. Harrison County, 25,253,942 Mcf.

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Carroll, Guernsey, Harrison top Ohio counties for oil production

By Bob Downing Published: June 2, 2015

Here how's Ohio counties ranked for first quarter 2015 oil production, according to data released earlier this week by the Ohio Department of Natural Resources.

The rankings are:

1. Carroll County, 1,302,403 barrels.

2. Guernsey County, 1,253,717 barrels.

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OSHA issues citation in 2014 death of West Virginia worker

By Bob Downing Published: June 2, 2015

A contractor for Antero Resources has been cited by the federal  Occupational Safety and Health Administration for failing to provide a safe workplace that resulted in the 2014 death of a drilling worker in West Virginia.

Ryan Dunn 29, of Jackson County, W. Va., was killed in an accident in Tyler County when he was struck by a front-end loader.

The federal agency is proposing a $13,550 fine against Precision Drilling LP, a company based in Calgary.

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Enterprise Products buying Texas pipeline, processing plant

By Bob Downing Published: June 2, 2015

Texas-based Enterprise Products Partners LP is buying a pipeline and processing company in the Eagle Ford of Texas from Pioneer Natural Resources Co. and Reliance Industries Ltd. for $2.15 billion.

The purchase will add systems that feed the exports of lightly processed oil.

Click  here  to read more.

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Ohio has 1,497 drilled Utica wells, 901 producing Utica wells

By Bob Downing Published: June 2, 2015

Ohio has approved 1,926 Utica Shale permits, as of May 30.

That total includes 1,497 drilled Utica Shale wells and 901 producing Utica wells, says the Ohio Department of Natural Resources.

Ohio has 26 rigs at work.

Ten new permits were approved: one in Harrison County, six in Monroe County and three in Noble County.

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Eclipse Resources tightening up spaces between laterals

By Bob Downing Published: June 2, 2015

From Pennsylvania-based Eclipse Resources on Monday:

Operational update: The Company is continuing to execute on its drilling plan for the year, and strongly believes that it is on pace to meet or exceed both its second quarter and annual guidance. For the month of April 2015, the Company estimated that its net production averaged approximately 190 MMcfe per day compared to its first quarter 2015 average of 159.6 MMcfe per day, or a 19% increase. The Company’s previously issued guidance for the second quarter of 2015 is 170 – 180 MMcfe per day. Based on the results for the quarter to date, the Company expects to be at the high-end of its previously issued guidance for the quarter.

Additionally, the Company recently finished completion operations on its Sawyers pad in Monroe County, Ohio consisting of three wells with inter-lateral spacing of 730 feet. This important spacing test is the Company’s first spacing test below 1,000 feet between wells on its Dry Gas Utica Shale acreage, which if successful, could increase the Company’s drilling locations by approximately 20%. The Company expects to put these wells into sales early during the third quarter of 2015.

The Company’s operated rig is currently drilling on its Fuchs/Dietrich pads in eastern Monroe County, Ohio that consist of eight wells with lateral lengths of approximately 8,600 feet. Drilling is continuing on pace with expectations, however, the Company is revising its timing expectations for putting these wells into sales as it awaits the final permitting before gathering lines can be completed. The Company originally expected to put these wells into sales in December 2015, and has now revised its expectations that the wells will go to sales in January 2016. This change in turn to sales timing is not expected to have a material impact on the Company’s 2015 production.

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Crude adjustment balances supply, disposition components

By Bob Downing Published: June 2, 2015

From the U.S. Energy Information Administration today:

The crude oil adjustment is perhaps the most frequently misunderstood component of the U.S. crude oil balance published in EIA's Weekly Petroleum Status Report (WPSR). This adjustment reflects the combined uncertainty around each of the crude oil data elements that EIA uses to assess the balance between U.S. crude oil supply and its disposition.

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Tags: crude oil , imports , liquid fuels

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Activists seek to block Dominion's Cove Point LNG terminal

By Bob Downing Published: June 2, 2015

From a press release today:

WASHINGTON, D.C. -- Maryland residents and environmental groups, including Chesapeake Climate Action Network and the Sierra Club, have filed a motion at the U.S. Court of Appeals for Washington, D.C., calling on the court to halt construction of Dominion's planned Cove Point Liquified Natural Gas export terminal. The emergency motion for a stay was filed Monday evening. Those who filed are asking the court to grant the motion by June 17 when construction of the terminal's foundation could begin.

The groups say that the Federal Energy Regulatory Commission failed to comply with federal law by not fully examining the safety and environmental impacts of the proposed terminal, which is already under construction.

Residents who live in Calvert County, Md., where the terminal is under construction, cite the high volume of combustible chemicals that could be stored there and explosion riks, in addition to other safety and environmental concerns that should be addressed before any construction is considered. A number of these residents have moved becasue of safety concerns and a degradatoin of their quality of life.

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More paperwork filed with FERC for Florida LNG export facility

By Bob Downing Published: June 2, 2015

From a press release today:

Jacksonville, FL (June 2, 2015) — Eagle LNG Partners (“Eagle LNG”) is pleased to announce it has achieved a major milestone by submitting drafts of Resource Reports 1 through 12 to the Federal Energy Regulatory Commission (FERC). With this submission, the project is closer to receiving the necessary permits and approvals to commence construction and operation of its planned 0.55 mtpa liquefied natural gas (LNG) facility in Jacksonville, Florida.

“This submission significantly advances our position in the FERC process,” said Dick Brown, CEO of Eagle LNG. “We are pleased that the project continues to gain momentum while simultaneously receiving tremendous support from the City of Jacksonville and North Florida region. We continue to work with interested clients and stakeholders to move toward start-up and commissioning in 2018.”

The Jacksonville facility will service local domestic applications and nearby small-scale export markets. “Eagle LNG is bullish about the potential for natural gas to displace heavy fuel oil and diesel. This is another important project deliverable that Eagle LNG has achieved on schedule,” said Mr. Brown.

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Six conservation groups support new BLM fracking rules

By Bob Downing Published: June 2, 2015

From a press release today:

Coalition of Conservation Groups Seek to Defend Bureau of Land Management’s New Fracking Rules  
Groups oppose oil and gas industry, state challenges to new, stronger rules

 

Denver, CO — A coalition of six conservation groups today moved to defend the Bureau of Land Management’s new hydraulic fracturing rules against legal challenges by the oil and gas industry and the States of Wyoming, North Dakota and Colorado. The conservation groups, represented by Earthjustice, filed motions to intervene in two lawsuits pending in the U.S. District Court for the District of Wyoming.

The rules, which were published March 26, will apply to more than 750 million acres of public and tribal lands across the United States, and on private lands where the minerals are federally managed (known as “split estate”).  BLM’s regulations governing important aspects of oil and gas extraction, including well integrity and waste management, had not been updated since 1988 despite the increasingly widespread use of well stimulation techniques like high-volume hydraulic fracturing, which injects millions of gallons of fluids and toxic chemicals into the ground.

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Ohio cities, counties face added costs for votes on bill of rights

By Bob Downing Published: June 2, 2015

From Jackie Stewart of Energy in Depth-Ohio, a pro-industry, pre-drilling group.:

 

This group has already led efforts in eight communities in Ohio, which include county petition drives in Medina, Athens, Meigs, Portage, and Fulton Counties, and city petition actions in Columbus, Youngstown, and Akron. This string of ballot initiatives is being done under the CELDF umbrella of the Ohio Community Rights Network (OCRN).

Of course, what the CELDF is not telling these communities is that lawsuits regarding local fracking bans could cost municipalities millions of dollars and could even lead to bankruptcy.

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Columbia Pipeline Partners to spend $8 billion in coming years

By Bob Downing Published: June 2, 2015

From the Columbia Pipeline Partners:

HOUSTON, May 14, 2015 /PRNewswire/ -- Columbia Pipeline Partners LP (NYSE: CPPL) ("CPPL"), a NiSource Inc. (NYSE: NI) company, today provided its average distribution growth outlook through 2020.  Subject to the key assumptions described below, CPPL expects to offer unitholders an average annual distribution growth rate of approximately 20 percent. 

"With approximately $8 billion in capital being deployed over the next several years at Columbia Pipeline Group, we plan to create value for CPPL unitholders through transparent and long-term distribution growth," Robert C. Skaggs Jr., chairman and chief executive officer of CPPL said. "Most of this investment is supported by long-term, fee-based, take-or-pay contracts."

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Drop in Pennsylvania drilling is having impact on state regulators

By Bob Downing Published: June 2, 2015

The drop in drilling in Pennsylvania's Marcellus Shale because of low commodity prices  is also having an impact on state regulators.

The number of state-issued drilling permits has dropped by 30 percent from a year ago and that means less income for the Department of Environmental Protection that oversees drilling.

That is having a financial impact, the Pittsburgh Post-Gazette says.

Click  here  to read the full story.

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No one wants to drill Canol, Bluefish shales with low oil prices

By Bob Downing Published: June 2, 2015

The Canol and Bluefish shales in Canada's Northwest Territories may hold great volumes of oil and natural gas.

The shale reserves are the largest in Canada.

But no one wants to drill them because of the high costs of building needed roads and infrastructure and the low prices being paid for oil and natural gas.

Click  here  to read more.

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Magnum Hunter Resources downgraded by Canaccord Genuity

By Bob Downing Published: June 2, 2015

Canaccord Genuity last week downgraded Magnum Hunter Resources from buy to hold, as drillingt companies struggle with low commodity prices.

Texas-based Magnum Hunter is a key player in Ohio's Utica Shale.

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SMU study says Texas quakes are linked to fracking activity

By Bob Downing Published: June 2, 2015

Researchers at Southern Methodist University pointed to hydraulic fracturing activities as the probable cause of an increase in earthquakes near Azle, Texas, based on a study they had conducted in the area.

The researchers’ conclusion conflicts with the position of the U.S. Geological Survey that the cause of the earthquakes is inconclusive.

Click  here  to read more from the BakerHostetler law firm.

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Here are Ohio's top wells producing oil, natural gas in 1Q 2015

By Bob Downing Published: June 1, 2015

Here are the Top 6 producing oil wells in Ohio in first quarter 2015:

1. Frakes 2H well, Antero Resources Corp., Noble County, Seneca Township, 50,464 barrels.

2. Lake West Lake Grant 2H, American Energy Utica LLC, Guernsey County, Londonberry Township, 40,683 barrels.

3. Shugert Daddy Wls Grant 5H, American Energy Utica LLC., Guernsey County, Wills Township, 38,860 barrels.

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Chevron fined $940,000 for fatal well fire in Greene County

By Bob Downing Published: June 1, 2015

From the Pennsylvania Department of Environmental Protection today:

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Ohio natural gas production up 11.6 percent; oil up 23.7 percent

By Bob Downing Published: June 1, 2015

Natural gas and oil production from Ohio’s Utica Shale wells grew again in the first quarter 2015, but the natural gas growth appears to be slowing.
Natural gas production jumped 11.6 percent percent with Ohio producing 183.5 billion cubic feet from January through March, according to data released on Monday  by the Ohio Department of Natural Resources.
Ohio had reported a 25 percent jump in gas production from the third quarter to the fourth quarter 2014, but low commodity prices have hurt drilling in Ohio and in other states where drilling has slowed.
Production grew from 163 billion cubic feet of natural gas produced from October through December 2014.
A billion cubic feet is enough natural gas to fuel one million homes for four days.
Oil production in Ohio jumped 23.7 percent, climbing to 4.4 million barrels in the first quarter 2015.
Ohio had produced 3.5 million barrels of oil in the last quarter 2014.
The production was reported from 877 wells in eastern Ohio.
In comparison, Ohio’s 418 horizontal wells in the first quarter 2014 produced 1.9 million 42-gallon barrels of oil and 67.3 billion feet of natural gas.
The typical Ohio well produced 5,019 barrels of oil and 209 million cubic feet of natural gas in 80 days of production during the quarter, said ODNR’s Division of Oil and Gas Resources Management.
Ohio does not require drillers to list natural gas liquids production separately. The production of ethane, propane and butane is included in natural gas production.
Ohio said 49 wells reported zero production in the quarter. Those wells were waiting for completion of pipelines to go into production.
The new report is available at http://oilandgas.ohiodnr.gov/production.

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Could FirstEnergy power plant become site of Ohio cracker plant?

By Bob Downing Published: June 1, 2015

No deals have been cut, but a proposed cracker plant in eastern Ohio might be built at a FirstEnergy Corp. power plant on the Ohio River.

The Akron-based utiity can still produce a small amount of peaking power at the R.E. Burger Power Plant at Shadyside in Belmont County.

The company plans to totally close the plant in May 2016.

It stopped base load production at the coal-fired plant in 2010.

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Rice Energy focused on one Ohio, two Pennsylvania counties

By Bob Downing Published: June 1, 2015

Pennsylvania-based Rice Energy is focused on only three counties in the Utica and Marcellus shales.

It is active in Ohio's Belmont County and Pennsylvania's Washington and Greene counties.

That is unlikely to change, CEO Dan Rice said in a recent 1Q 2015 earnings calls with analysts and the media.

You can read more by clicking here to access the Marcellus Drilling News (subscription required).

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Ohio township, Chesapeake Energy fight over two roads

By Bob Downing Published: June 1, 2015

Chesapeake Energy Corp. and a township in eastern Ohio are fighting over the condition of two roads.

Franklin Township in southwest Columbiana County says the Oklahoma-based energy  company is responsible for damage to two roads. Chesapeake disagrees.

The township terminated the road use maintenance agreement with Chesapeake that was worth $60,000.

Click  here  to read more.

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Ohio's Utica Shale Academy to expand in 2015-2016 school year

By Bob Downing Published: June 1, 2015

Ohio's Utica Shale Academy is expanding next year.

The school will add operations in the 2015-2016 school year in Columbiana in the Columbiana School District in Columbiana County.

The academy started last year at Salineville in the Southern Local School District in Columbiana County.

It graduated its first 10 students on May 28.

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New reality TV show wants people who got rich from fracking deals

By Bob Downing Published: June 1, 2015

The Los Angeles-based casting company behind the Real Housewives of Orange County is seeking people who got rich from fracking deals.

MAC Worldwide Inc. wants them for a new reality show on people who got suddenly  rich.IThe show to air on cable is called Suddenly Rich.

It also wants people who got rich from lawsuits, land deals and in other ways.

Click  here  to read more.

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$800 million Lordstown power plant plan takes step forward

By Bob Downing Published: June 1, 2015

Boston-based Clean Energy Future LLC wants to build an $800 million power plant at Lordstown in Northeast Ohio to burn Utica and Marcellus shale natural gas and produce electricity.

That plan took a step forward last week when the Lordstown Village Council approved an incentive package for the plan.

The Trumbull County commissioners are scheduled to hold a public hearing and vote on parts of that package on  Wednesday, June 3.

Click  here  to read more.

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Marcellus natural gas production will drop if prices stay low, EIA says

By Bob Downing Published: June 1, 2015

Natural gas production in the Marcellus Shale  may decline for the first time if prices in the basin remain low for much longer, according to federal government data.

The U.S. Energy Information Administration says production in the fast-growing field in Pennsylvania and West Virginia is set to remain flat for the next few years before beginning a very slow decline primarily because of depressed gas prices.

The Marcellus Shale produces 20 percent of America's natural gas.

Click  here  to read more.

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Drillers likely to refrack wells in Bakken and Eagle Ford shales

By Bob Downing Published: June 1, 2015

Drillers are likely to refrack wells in the Bakken and Eagle Ford shales in 2015 and 2016, according to the BakerHostetler law firm.

The reason is that drillers will get bigger results for limited spending, the firm says.

Click  here  to read the full story.

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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

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.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

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.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.