The Daily Digger

Washington Times:   In a shift, fracking’s foes face a losing streak   -    "After scoring a statewide ban last year on hydraulic fracturing in New York , anti-fracking activists talked excitedly about following up in a major fossil fuel-producing state — Colorado, maybe, or California. Instead, the next state to prohibit the use of fracking..." Gas & Oil:   Skywatch Monitors Existing Gas, Energy Pipelines   -    "For a pipeline inspection pilot, flying an aircraft low to the ground and doing several things at once comes with the job. It’s a position that isn’t for everyone who has earned their wings, but according to Steve Bechtol, president of Skywatch, it’s a job for a pilot who can safely manually fly..." Sober Look:   Have the Saudis miscalculated the impact of lower crude prices on US production?   -    "In 2014 the Saudis could no longer accept the loss of crude oil market share as the North American produ...

From the U.S. Energy Information Administration (EIA): 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).  Declines in oil and natural gas extraction and support employment tend to lag declines in crude oil prices. As prices of North Sea Brent crude oil fell from their June 2014 level of $112 per barrel, firms reduced the number of new wells drilled and the associated workforce. The count of drilling rigs in the United States, as measured by Baker Hughes , totaled 857 for the week ending June 19, 54% below the same point a year ago and the lowest level in nearly six years.  Declines in production jobs lag oil price declines. In July 2008, Brent crude oil reached a record-high monthly spot price of $133 per barrel, before fall...

From NGI: Elected officials in Trumbull County, OH, voted unanimously Wednesday in favor of a resolution asking Gov. John Kasich to declare a moratorium on drilling any new wastewater injection wells in the county.  According to an audio recording of the Trumbull County Commissioners meeting, an earlier version of the resolution called for a three-year moratorium, but the language was changed before the 3-0 vote.  Commissioner Daniel Polivka said Trumbull County is already home to 19 injection wells, making it one of the top counties in the state for hosting them.  "I think the biggest crime of this now is that we've lost local government money," Polivka said. "These injection wells are being drilled ... and we're getting a big zero on funding back. That definitely needs to be changed because we have [road use maintenance] agreements with oil and gas wells, [but] no agreements with these injection wells, and there's more truck activity and whatnot. ...

From the Pittsburgh Business Times: The Marcellus Shale remains Rice Energy Inc.'s workhorse, but the Utica Shale is a growth area for the company, Executive Vice President of Exploration Derek Rice said Wednesday.  Delivering the day's final address at the Hart Energy DUG East conference in Pittsburgh, Rice said the company (NYSE:RICE) is well positioned in the Utica, sitting on 60,000 acres in what the company believes to be the Utica's best portion. Being in that area is important -- the company believes that three or four Utica counties will, in the next five to 10 years, account for 90 percent of what is produced from the play. Up until now, the company's Utica exploration has been focused on Belmont County, Ohio, one of the three counties that it is operating in. However, earlier this year, the company decided to test the deep Pennsylvania Utica in Greene County and has been working on developing a well there. Continue reading this article by clicking here...

From Columbus Business First: The communications team at Akron power company FirstEnergy Corp. has played coy about an open secret in the energy sector.  Publicly, the company tells reporters its plans to sell the riverside R.E. Burger power plant are premature. But industry sources have said from the beginning that the land will house a proposed ethane cracker plant in Belmont County. Now, an executive for the company has confirmed the site will house the plant if Thailand's PTT Global Chemical Public Co. and Japan's Marubeni Corp. decide to go through with the facility. James Lash , president of FirstEnergy Generation, said the company is moving a machine shop from the Burger site to a spot in Canonsburg, Pennsylvania, in part because the cracker could soon take over the site, the Pittsburgh Business Times reports . Lash was in the state to open FirstEnergy's relocated machine shop. Read more by clicking here.  Connect with us on Facebook and Twitter! Foll...

Blue Racer’s total nameplate processing capacity reaches 800 million cubic feet per day. Fractionation capacity stands at 123,000 barrels per day. Gathering system totals approximately 650 miles of pipeline spanning 13 Ohio counties with another 200 miles under construction. 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 Be...

After two very slow weeks of permitting in Ohio's Utica shale, the latest weekly update from the Ohio Department of Natural Resources shows that activity picked up just a hair last week. Eight new permits were issued in the week ending Saturday the 27th.  While that level of activity is still much lower than when the play was peaking several months ago, it represents a slight uptick from the previous two weeks, which saw only 9 total permits issued.  The activity was mostly focused in Harrison County, which continues to be the most active spot for permitting over the past month or so.  Six of the eight permits last week were for Harrison County wells, with four of those going to Hess for their Cadiz D Unit.  The remaining two permits on the report were issued to Chesapeake Energy for a unit in Carroll County's Orange Township. The number of total permits issued continues to slowly move towards the next big milestone marker, 2,000.  There are now 1,943 perm...

The following is a press release from the group "Sustainable Medina County:" 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 value...

From Seeking Alpha: Dear Mr. Icahn:  A few years back, I had the opportunity to meet you at an investor conference in New York. You specifically told me never to ask you for money, but if I had a good idea to call. It was quite a few years ago, and I sincerely doubt you would remember me besides. So, I thought the easiest, most resourceful way to get word to you was to post an open letter on a widely read investor site like Seeking Alpha. That said, I have an idea for you in a name you know extremely well - Chesapeake Energy.  Like you, I've been invested in Chesapeake for some years. It is been a frustrating investment for sure, down more than 50% in the past six months. While I think CEO Doug Lawler and his team have done an excellent job under the circumstances; the stock has been a disaster. The Company is not buying their stock back at these depressed levels, and they are in no position to raise the dividend. Truthfully, I believe that management is more concerned...

From Reuters: Energy Transfer Equity's unsolicited $48 billion offer for Williams Companies Inc through a corporate structure with tax advantages may be the U.S. pipeline company's best option as potential bids from rivals are complicated by possible antitrust issues and the deal's rich price, investors and analysts said on Monday.  Energy's proposed all-equity offer of $64 per share for Williams was rejected by Williams' board who said in a statement on Sunday that it significantly undervalued the company which controls a master limited partnership, or MLP.  Deals in the energy sector, especially oil and gas pipeline and processing companies, are turning to a more traditional corporate structure as MLP advantages wane over time. Energy Transfer would be the latest MLP to propose using a c-corporation as a way to maximize tax advantages, increase cash flows and broaden institutional interest.  The sector embraces the MLP structure because the tax burden is...

From Bloomberg: The debt that fueled the U.S. shale boom now threatens to be its undoing.  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. “The question is, how long do they have that they can get away with this,” said Thomas Watters, an oil and gas credit analyst at Standard & Poor’s in New York. ...

From an American Energy Partners press release: 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 ...

From the Akron Beacon Journal: 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 m...

ODOT advances first-of-its-kind public-private partnership in Washington County MARIETTA (Thursday, June 18, 2015) – The Ohio Department of Transportation (ODOT) and local oil and gas company EdgeMarc Energy have teamed up to advance removal of the State Route 821 Whipple railroad bridge. EdgeMarc will fund the $180,000 project and ODOT will oversee the removal of the outdated railroad bridge. “Removing this old structure not only improves safety on the state route, but helps open up the corridor to more oil and gas exploration,” said ODOT District 10 Deputy Director T. Steve Williams. “This is truly a win-win for the community, the state and private industry.” Not only will ODOT construction engineers oversee removal of the bridge, but ODOT county forces will also assist by completing all slope work as well as seeding and mulching. “EdgeMarc Energy is proud to join ODOT today in announcing the State Route 821 Whipple railroad bridge project,” said Callum Streeter, Drilling and ...

From Bloomberg Business: Williams Cos. rejected a takeover offer from pipeline magnate Kelcy Warren that aims to derail a consolidation of the North American natural gas and oil hauler, according to people familiar with the deal.  Williams hired banks to explore alternatives to the $48 billion offer, according to a statement on Sunday that didn’t identify the bidder. The approach was from Warren’s Energy Transfer Equity LP, according to the people, who asked not to be named because the information is private.  The $64-a-share bid “significantly undervalues Williams and would not deliver value commensurate with what Williams expects to achieve on a standalone basis,” according to a statement from the company. A spokesman from Williams declined to comment, while a representative of Energy Transfer didn’t return calls seeking comment. Should a deal be done it would rank near the largest in the pipeline industry. The biggest so far is Kinder Morgan Inc.’s consolidation of ...

Magnum Hunter Resources Corporation (NYSE: MHR ) (NYSE MKT: MHR.PRC ) (NYSE MKT: MHR.PRD ) (NYSE MKT: MHR.PRE ) (the "Company" or "Magnum Hunter") announced today that it has received an extension from the Company's existing lending group under its senior secured revolving credit facility with respect to the Company's previously disclosed minimum capital raising obligation. The timeline for satisfying the capital raising obligation has now been extended from June 19, 2015 to July 10, 2015. The capital raising obligation, which requires the Company to raise $65 million of aggregate net cash proceeds from certain specified transactions, arose pursuant to a previous amendment to the Company's senior secured revolving credit facility. Yesterday, Magnum Hunter announced that Triad Hunter, LLC, a wholly owned subsidiary of the Company, had closed on the previously announced definitive agreement to sell certain non-core undeveloped and unproven leasehold acre...

The trend for Utica shale permitting in Ohio continued last week, according to the latest report from the Ohio Department of Natural Resources (ODNR). After just five new permits were issued in the week ending June 13 and the rig count declined all the way to 18, only four new permits were issued last week.  Carroll County was the spot for three of those four, with two going to Chesapeake Energy and one to Rex Energy.  The only other permit was issued to American Energy Utica for a well in Harrison County. The cumulative permit count now stands at 1,936 permits issued, 1,512 wells drilled, and 906 wells producing.  The rig count increased by one, to 19. View the report below.  And remember, you can always view the latest weekly and cumulative permitting reports, as well as production data, in The Daily Digger mobile app , which is available now in the Apple App Store and Google Play Store . Connect with us on Facebook and Twitter! Follow @EnergyNew...

From The Canton Repository : A proposed tax hike on Ohio oil-and-gas drillers that’s been intensely negotiated for weeks — and debated for years — won’t be included in the two-year state budget, legislative leaders said Tuesday.  Senate President Keith Faber and House Speaker Cliff Rosenberger, both Republicans, said that negotiations on a longstanding priority of Gov. John Kasich have been fruitful but need more time.  “Unfortunately, time is never an ally in the budget process as you get toward the end,” Faber said. “So, today we have a choice: Halt that dialogue, move forward with an unfinished policy in the budget, and fight it out in conference committee; or to continue the progress outside of the budget and work toward a meaningful compromise during the next three months.”  The tax hike’s omission from the two-year, $71 billion state operating budget that’s nearing a final vote comes as a political blow to Kasich, a likely 2016 presidential contender who h...

Energy in Depth:   Ten Important Things to Know from EPA’s 1,000-page Groundwater Study   -    "Last week, the Environmental Protection Agency (EPA) released its long-awaited study on the relationship between groundwater and hydraulic fracturing, finding that fracturing technology has “not led to widespread, systematic impacts to drinking water resources,” as routinely claimed by..." Gas & Oil:   Lisbon Gives Final Go-Ahead for Gas Aggregation Program   -    "Legislation giving residents the option of signing up with a natural gas supplier through a village-sanctioned program was approved on third and final reading during this week's council meeting. The legislation followed council's decision to hire Aspen Energy to negotiate..." Gas & Oil:   Rice Energy's Bigfoot 9H Well Top Producer in Ohio   -    "Landowners seem to be very happy with Rice Energy. Early last year Rice paid landowners in Belmont County a s...

From Seeking Alpha: The Organization of Petroleum Exporting Countries (OPEC) met on June 5, and it's clear that the current trends in the global oil market will remain steady.  First, OPEC - led by Saudi Arabia - will continue to pump out as much oil as possible . The cartel's production target of 30 million barrels, with an excess of 31 million barrels actually being pumped, remains.  OPEC did say they would be open to reducing their quota, but only if Russia, the world's largest producer, cuts back…  Fat chance of that! Russia has never agreed to production cuts, and isn't showing any flexibility now. U.S. shale oil producers are also continuing to pump out oil with no sign of stopping. In fact, they stand at the ready to add even more output.  Over the spring, this strategy separated the weak from the strong as supply flourished and prices dropped.  These days, the companies that survived, like EOG Resources (NYSE: EOG ) and Pioneer Natural Reso...

From Gas & Oil: Plans to construct a 20-mile pipeline to carry natural gas from rural Lorain County to a power plant in Avon Lake have been approved by the Ohio Power Siting Board.  The board’s unanimous approval was the final step necessary for the project to move forward. The pipeline will start in southern Lorain County at a tap-in point on a gas line operated by Dominion East Ohio, just south of Grafton, before heading north to the lakefront.  NRG is still involved in multiple eminent domain lawsuits with landowners that it needs easements from to construct the pipeline. Some of those landowners had tried to argue before the board, which temporarily delayed a decision on the project, that NRG hadn’t considered all possible routes and that it was being given an accelerated approval process in violation of state law.  The board rejected those claims, saying NRG fully examined other routes, chose the one with the least environmental impact and met all crite...

From TribLive: Support for the use of fracking by the natural gas industry is growing with awareness despite concerns about potential damage to the environment, a new poll by Robert Morris University shows.  About 56 percent of 1,003 people polled nationwide said they support hydraulic fracturing from shale, up from 42 percent in November 2013. The increase tracked overall knowledge of the process, which grew to nearly 71 percent from 45 percent nationwide, and was up to nearly 74 percent among 529 Pennsylvania residents polled last month.  “It appears most of the awareness is driven from industry awareness,” said mechanical engineering professor Tony Kerzmann, who serves on the advisory board of the Robert Morris University Polling Institute.  The online poll, which was sponsored by Trib Total Media, has a margin of error of plus or minus 4.5 percentage points for Pennsylvania results and plus or minus 3 percentage points for the national numbers.  Mor...

Utica shale permitting had been picking up recently, but the latest Ohio Department weekly report reveals that it was on the decline again last week. Only five new permits were issued during the week ending June 13.  4 of those permits went to Chesapeake for wells in Harrison County.  The only other permit was issued to Halcon for a well in Trumbull County. The slow week brings the cumulative totals to 1,932 wells permitted, 1,504 wells drilled, and 904 wells producing.  The Utica rig count slipped as low as it has been in a very long time, all the way down to 18. View the report below. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From the Casper Star-Tribune: Recently, the Star-Tribune ran an article that suggests toxic air emissions are being released from shale gas wells on the basis of a research paper involving a Wyoming resident, Deb Thomas.  To the Star-Tribune’s credit, the article does explain that Thomas is as a “longtime activist,” but there’s so much more to the story. In fact, all six of that particular research paper’s authors were activists who failed to disclose their bias to the public and the scientific community, which goes against at least four codes of scientific ethics.  For instance, Thomas declared in the report that she worked for the Powder River Basin Resource Council, but she did not disclose her role as the executive director of an anti-fracking group called ShaleTest, of which Josh Fox, the director of Gasland, is an “adviser.” The Star-Tribune also quotes David Carpenter, another one of the paper’s authors, who declared he had no competing interests. But Carpenter ...

Weston Wilson is an environmental engineer and anti-drilling activist who worked for the EPA until January 2010.  He has compared oil and gas extraction to slavery in the past.  Now, he has written an op-ed taking aim at the overarching conclusion of the EPA's extensive four-year study of fracking's effects on groundwater, declaring that there is "widespread and systemic contamination...at the EPA." Here is a portion of what Wilson wrote : In 2010, Congress told EPA to study these claims. In 2011, EPA responded, announcing it would do a widespread investigation of the entire industry including the systemic release of toxic gases during fracking.  Under pressure from the industry, the EPA began severely limiting the scope of its investigation.  In 2012, EPA withdrew from any investigation of the air pathways of toxic gas release during fracking, despite hundreds of citizens living near wells reporting air pollution and a robust set of scientists confirming...

From The Intelligencer/Wheeling News-Register: Attorneys representing Chesapeake Energy said even if the company used property owned jointly by six Wheeling non-profit groups in pooled drilling units, this does not prove the fracker took oil and natural gas from the land in question.  However, Tim Greene, a former West Virginia Department of Environmental Protection inspector and the owner of Land and Mineral Management of Appalachia, said he does not understand why a driller would include someone's acreage in a pooled unit without intending to take the oil and gas from it.  "Normally, if your property is included in a unit, they will be affecting your property," Greene said. "The whole reason for building a unit is to get as much gas out of the ground as possible. If they're not using your property, I don't know why they would put you in a unit."  Officials representing the Parks System Trust Fund of Wheeling - an organization closely related ...