The Economic Times and other news sources are reporting that the U.S. Federal Energy Regulatory Commission (FERC) issued a permit for Dominion Resources to operate the first natural gas liquefaction plant on the east coast. Dominion’s Cove Point plant on the Chesapeake Bay will be used to export more than 5 million metric tons of liquefied natural gas each year. The plant will also be the first export terminal connected to the Marcellus Shale by pipeline. It has been reported that Dominion already has agreements with energy companies in India and Japan to ship the natural gas overseas. The project is likely to be completed by June of 2017.
PowerSource of the Pittsburgh Post-Gazette provided commentary discussing future economic opportunities regarding natural gas liquids (NGLs). Olefins plants or cracker facilities transform NGLs into products that are used in many industrial and consumer end applications. The commentary discussed the infrastructure challenge facing many regional policymakers, education institutions, thought leaders and business groups. The commentary suggested the development of an open-access midstream system will guarantee delivery of the region’s NGLs, specifically ethane, to planned Olefins plants and cracker facilities in the Appalachian Valley region to support downstream manufacturing within the local region.
As reported on Bloomberg.com, Spectra Energy Corporation, a Houston-based pipeline operator, and Northeast Utilities, a Connecticut-based utility provider, have partnered in proposing a $3 billion pipeline expansion that will increase natural gas supply to the six New England states. The project, known as “Access Northeast,” will provide fuel for power plants and home heating in an attempt to combat soaring energy prices in the New England region. According to the report, power prices in New England reached a 6-year high last spring due to extreme cold temperatures and a shortfall in pipeline capacity, which restricted gas supply. The proposed Access Northeast project plans to boost the capacity of Spectra’s existing Algonquin and Maritimes pipelines, by as much as 1 billion cubic feet per day and create additional delivery points for local distribution. The project is expected to be in service by November 2018.
According to the report, Access Northeast is not the only pipeline project aimed at connecting the booming Marcellus Shale gas formation with other states: (i) Kinder Morgan Energy Partners LP’s proposed “Northeast Energy Direct” project will also supply natural gas to New England, (ii) Duke Energy Corp., Dominion Resources, Inc., Piedmont Natural Gas Co. and AGL Resources Inc. have partnered to construct a $5 billion pipeline from West Virginia to North Carolina, (iii) NextEra Energy Inc. and EQT have paired up to build a 330-mile pipeline from West Virginia to the southeastern states, and (iv) Spectra is also seeking to expand its Texas Eastern pipeline system in Ohio pursuant to an agreement with American Electric Power Co. and Chesapeake Energy Corp.
The Pittsburgh Tribune Review reports that colleges located in Western Pennsylvania are creating programs to prepare students for jobs in the energy industry. For example, Kennedy Township’s Rosedale Technical Institute (soon to be re-named Rosedale Technical College) currently offers an industrial technician associate degree program, and it will add additional programs next year. Westmoreland County Community College offers an energy degree program and Butler County Community College recently added four energy classes to its course offerings. Allegheny County and Beaver County Community Colleges also offer classes geared toward the energy industry. According to the Pennsylvania Department of Labor and Industry, shale-related industries employed approximately 238,000 people in 2013.
As reported by the West Virginia Press Association, the West Virginia Division of Natural Resources (“DNR”) is seeking bids for natural gas drilling on state-owned land under the Ohio River. A legal notice published on Friday, August 22 indicates that the DNR intends to grant leasing rights to drill under the river in Marshall, Wetzel and Pleasants counties. The notice further states that applications to bid on these rights must be submitted by the September 11 deadline.
Thanks in large part to the oil and gas industry, western Pennsylvania is experiencing a boom in job growth which is bringing young and talented individuals to the region. According to the U.S. Bureau of Labor Statistics, Pennsylvania’s oil and natural gas industry employment between 2007 and 2012 increased by 259.3% – accounting for almost 245,000 jobs in Pennsylvania. Of the new hires working in the industry, 96% are from Pennsylvania or an adjacent state. The Young Adults report from PittsburghTODAY notes that roughly 70% of the people moving to Pittsburgh from larger cities are under the age of 35. According to the Department of Labor and Industry, the average wage in the shale industry is nearly $90,000 – almost $41,000 greater than most other industries. A 2014 PNC Financial Services report states that this economic growth can continue to increase in the coming decades.
According to the Tribune Review, Reliance Industries, an Indian conglomerate with ties to the Marcellus Shale, plans to ship 1.5 million tons of ethane annually from the United States. Reliance has invested with Carrizo Oil and Gas Inc. and Chevron in the region, but the company’s spokesperson did not identify which shale sources will provide the ethane for shipment. According to the report, the announcement has sparked interest and potential competition for supplies with plants under consideration in the region.
Veteran attorneys Timothy Miller from Robinson & McElwee, and Christopher ‘Kip” Power, Mychal Schulz and Robert Stonestreet from the Charleston office of Dinsmore & Shohl have joined forces with Babst Calland in providing senior-level legal counsel in key practice areas including environmental, litigation and employment. The addition of the new attorneys and staff will double the size of Babst Calland’s Charleston office which opened in 2011. For more information, please visit the firm’s website.
The Pittsburgh Business Times reports that Rice Energy Inc. is acquiring 12 wells and 22,000 net acres in Greene County, Pennsylvania from Chesapeake Energy Inc. Seven of the wells are currently producing and the five other wells are being developed, according to a statement by Rice.
Warren Resources has executed a purchase and sale agreement to acquire Marcellus shale assets from Citrus Energy Corporation and two other working interest owners, reports Shale Energy Insider. The acquired assets, located in Wyoming County, Pennsylvania, are all held by production, and provide Warren with a new core area in addition to its oil assets in California and natural gas assets in Wyoming.
Energy Transfer Partners, L.P.’s board of directors has approved the construction of a new pipeline to transport gas to markets in the United States and Canada. The pipeline’s capacity is proposed to transport 2.2 billion cubic feet per day and may be expanded up to 3.25 billion cubic feet. The pipeline has already received commitments from some of the largest producers in the area and is expected to gain additional commitments in the future.
“The 2014 Babst Calland Report – Appalachian Shale Industry in Transition: Evolving Challenges for Producers and Midstream Operators” comments on key issues facing producers and midstream operators from a legal and regulatory perspective, including:
- Governments and politics are playing a major role in shale energy. State elections will shape how the industry operates. In Ohio and Pennsylvania, the tax debate is still very much alive. In West Virginia, a gas severance tax has been in effect and has remained unchanged despite attempts to raise it. The industry faces increased budgetary and operational challenges from legislative sessions in all three states. Politically-driven developments continue to impact the prospects for new and existing underground injection wells, ranging from new seismic testing requirements to public objections to pending permit applications.
- Regulatory issues remain fluid for the Appalachian shale gas industry. There is no shortage of regulation for the burgeoning shale gas industry, particularly given the degree of transparency, public scrutiny and political influence for and against the extractive industries. A large number of regulatory issues remain, requiring constant attention to developments and details across a spectrum of subjects including: reporting, permitting, well site construction, impacts to species, and unique standards for water and air quality.
- Local government regulation of the industry is expanding. The line between state and local control is still being tested in the state of Ohio, while the implications of Post-Robinson Twp. (Act 13) local regulation in Pennsylvania will not be evident until later in 2014.
- Property rights and land use present more challenges than ever before. Myriad unresolved property rights, royalty disputes and land-related issues are pending in the courts. Producers in Ohio, West Virginia and Pennsylvania are facing a continuously evolving environment concerning property rights and land use.
- Safety and labor remain priorities. The industry’s workforce and supply chain partners are keys to productivity gains and maintaining the all-important license to operate. As the oil and gas industry must protect its workers 24/7, it must remain vigilant on safety compliance and labor matters.
- Next step in the transition: we are at the threshold of a manufacturing renaissance. The Appalachian Basin is playing a leading role in the United States’ production of record amounts of oil, gas and natural gas liquids. New business opportunities are rapidly developing, and the Appalachian Basin has the potential to evolve from our vastly successful resource extraction activities to reclaim its historic reputation as a manufacturing juggernaut.
To request a copy of “The 2014 Babst Calland Report,” contact info@babstcalland.com.
As reported by NGI’s Shale Daily on June 4, many descended upon Pittsburgh, Pennsylvania on Wednesday for the first day of Hart Energy’s Developing Unconventional Gas (DUG) East Conference, where representatives from industry leaders discussed recent industry trends occurring in Ohio, Pennsylvania and West Virginia. Of the speakers on Wednesday, Range Resources Corp.’s CEO Jeffrey Ventura, Randall Wright, President of the consulting firm Wright & Co., Inc., were most notable, discussing the explosive and unparalleled growth in the Appalachian Basin in the past decade. Range CEO Jeffrey Ventura attributed Range’s growth in the past 10 years to expanding pipeline infrastructure and the wealth of knowledge that it has acquired through years of exploration and production, but noted that the Utica Shale, Marcellus and Upper Devonian formations were responsible for helping Range to assemble an asset base that it expects will grow the company’s current reserves by seven to ten times. President Randall Wright mirrored these observations by noting that a new, advanced learning curve, developed through years of experience resulting in more efficient practices by operators has led to an increase of thousands of dollars in property value as well as vast increase in production from 1.5 bcf/d in 2007 to 15 bcf/d this month. The DUG East conference concluded on Thursday, June 5 at the David L. Lawrence Convention Center, located in Pittsburgh, Pennsylvania.
PRWeb announced that Marcellus Drilling News and ShaleNavigator have released the first volume of a three part series of the 2014 Marcellus and Utica Shale Databook, an in-depth research report geared towards those with a stake in oil and natural gas drilling in the Appalachian Basin. The Databook includes maps, drilling data, analysis of trends, and new information about the appraisal of mineral rights.
As reported by The Times-Tribune in Scranton, four winners were chosen in the 3rd Annual Shale Gas Innovation Contest. The winners were KCF Technologies, Inc., NG Innovations, Inc., OPTIMUM Pumping Technology, and TM Industrial Supply, and each received a prize of $25,000. The contest received 80 entries, of which there were 13 finalists. The four companies submitted projects that included a wireless system for monitoring oil and gas equipment, a tracking system for the transportation of fluids using satellites, a high-performance manifold for natural gas compressors, and a filter system for the removal of substances from natural gas.