TribLIVE
Blogs | Sports | News
Flowback

What's bubbling up in the field.

July 25, 2016
by David Conti


No comments yet - you should start the discussion!

Dismal results ahead

facebooktwittergoogle_plusredditpinterestlinkedinmail

A nearly 50 percent jump in natural gas prices during the second quarter could inject some joy into what has been a dour discussion around finances in the Marcellus shale.

Demand is clearly rising, as more power plants switch from coal to gas and warm weather is pushing those plants to run more often to keep up with the hum of air conditioners.

And the oversupply in storage has shown signs of leveling off. Weekly deposits into the inventory have generally come in below estimates, analyst David Holt of S&P Capital IQ wrote in a research note last week.

Such news might brighten the forecasts we will hear this week from executives at publicly held Marcellus and Utica gas producers as they start reporting financial results from that second quarter. Among major Western Pennsylvania companies, Consol Energy and Range Resources will report on Tuesday and EQT Corp. will release its figures on Thursday.

Holt identified EQT, Range and Cabot Oil & Gas as companies to watch as the longer-term outlook for prices and demand improves.

“We think low cost producers that exhibit financial flexibility in 2017 … remain well positioned to navigate through the current commodity cycle,” Holt wrote.

Don’t expect another gas boom to move through the Marcellus anytime soon, though, analysts warn. Although a short rally in crude oil prices in the past few months resulted in an uptick in drilling in some areas such as the Permian Basin of Texas, the Marcellus remains a very quiet place.

A few numbers tell the tale.

The number of drilling rigs working in the Marcellus remained under two dozen this month, down from 59 a year ago and a peak of 140 at the end of 2011.

Companies drilled only 73 shale wells in Pennsylvania during the second quarter, down from 201 during the same period last year.

That big jump in the national benchmark price to nearly $3 per million British thermal units between April 1 and June 30 was coming off a winter of 17-year lows. The price had nowhere to go but up, and has since fallen back to about $2.75.

Companies are likely to report dismal results from the second quarter. The Associated Press predicted the worst corporate performances for the quarter to come from energy producers. Natural Gas Intelligence predicts companies in the S&P oil and gas exploration and production fund will post a combined loss of $2.34 per share, compared to a profit of $20.67 during the same quarter last year.

Look for executives to accentuate potentially positive moves over the next few months, since the past few have provided mostly negative news.

**UPDATE**

Southwestern Energy said it will boost drilling in the Marcellus region despite posting a big loss during the second quarter.

The Houston-based company, which is among the top five producers in this region, said it would put five drilling rigs back into service, four of which will be in Appalachia.

Southwestern reported a net loss of $620 million during the quarter, but that was an improvement over a loss of $815 million in the same period last year.

facebooktwittergoogle_plusredditpinterestlinkedinmail

July 11, 2016
by David Conti


One comment so far - add yours!

Airing out a permit

facebooktwittergoogle_plusredditpinterestlinkedinmail

Air pollution from coal-fired power plants has been kind of a big deal lately.

Some environmentalists blame the emissions coming from those big smokestacks for ailments ranging from heart disease to asthma. Some business leaders blame tighter environmental regulations on what comes from those smokestacks for the recent collapse of the American coal industry as more plants close or switch to natural gas.

Tension and controversy dog nearly every discussion of coal-fired electricity, often ending in litigation. Allegheny County’s last coal-fired plant, NRG Energy’s Cheswick Generating Station along the Allegheny River, has been the subject of all the above, including a federal lawsuit that was dismissed last year.

So perhaps it was no surprise that the Sierra Club made a lot of noise over what it considers a victory for environmental advocates in a proposed permit renewal for the plant issued by the county Health Department late last month.

“We thank the Health Department and County Executive Rich Fitzgerald for clamping down on air pollution from this plant,” Sierra Club leader Thomas Schuster said in a news release touting a provision that the group says would require a 75 percent reduction in nitrogen oxide emissions.

More surprising was how little noise the Health Department made, even though it apparently wants to hear from people what they think of the permits.

Unlike the Sierra Club, the department issued no news release to tell people about the permits or a public comment period lasting until Aug. 1. An email from department spokeswoman Melissa Wade — a day after being asked for details — indicated that drafts of the permits are available on the department’s website and details of how to provide comments were published in a newspaper (not the Tribune-Review) on June 29.

If you’re among the hundreds of thousands of people in the region who did not see that day’s edition, and you’d like to provide comment, good luck finding out how. The department’s website does not provide instructions. Wade did not respond to a question asking why.

In fact, good luck finding the permits themselves.

They’re not listed among the “Timely Topics” on the site’s front page, though you can find food safety tips for summer cookouts and a call for volunteers for the annual raccoon rabies baiting project next month.

You need to go to the navigation bar and click on “Bureaus,” then “Environmental Health,” then “Air Quality” to find the right page. Then scroll all the way to the bottom for a list of “Permits in Public Comment” to find links to the permit drafts.

NRG said it was studying the draft permits in detail. Given how the county is showcasing the drafts, it’s doubtful many people will join in such a review.

facebooktwittergoogle_plusredditpinterestlinkedinmail

June 30, 2016
by David Conti


No comments yet - you should start the discussion!

Chipping in

facebooktwittergoogle_plusredditpinterestlinkedinmail

Shale gas drillers and pipeline companies have rallied to help fund relief efforts in West Virginia, where massive floods killed two dozen people and ravaged some of the towns in which the companies work.

Early in the week, that state’s Secretary of Commerce Keith Burdette took a minute while speaking at an industry conference in Pittsburgh to thank companies for pitching in.

“Your help is incredibly important to that part of the state as they try to recover from a 1,000-year flood. We’re very appreciative of that,” he said.

Companies and groups announced at least $425,000 in contributions. A group of 22 donors gave a combined $350,000 to the American Red Cross in West Virginia.

“West Virginians support each other during tough times, and the gas industry is proud to be part of that tradition,” said Robert Orndorff, who is state director of public affairs at Dominion Resources and a member of the Red Cross board of directors.

EQT Corp. and Mountain Valley Pipeline gave $75,000 to the West Virginia Voluntary Organizations Active in Disaster.

The list of donors to the Red Cross included: Antero Resources, Apex Pipeline Services, Blue Racer Midstream, Chevron Global Community Fund, Columbia Pipeline Group, Consol Energy, Crestwood Midstream Partners, Cunningham Energy, Dominion Resources, Energy Transportation/Applied Construction Solutions, Eureka Midstream, ExxonMobil and XTO Energy, Jackson Gas Co., Learned Leadership, Marathon Petroleum Corp., Mountaineer Gas Co., Noble Energy, Range Resources, Ryan Environmental, Southwestern Energy, Stone Energy and TransCanada.

 

facebooktwittergoogle_plusredditpinterestlinkedinmail

June 27, 2016
by David Conti


No comments yet - you should start the discussion!

Enduring legacy

facebooktwittergoogle_plusredditpinterestlinkedinmail

In a region dominated by the names of noted 19th century industrialists such as Carnegie, Frick and Mellon, the Westinghouse legacy endures.

Think about George Westinghouse and so many aspects of modern Pittsburgh come to mind, even 102 years after his death.

There’s the bridge over the Turtle Creek Valley that was home to many of his companies, the nuclear power giant that still bears his name, the Wabtec Corp. that was formed from Westinghouse Air Brake, the company he built around his most famous invention.

Many people know the hand he played in every power line that crisscrosses above our heads and attaches to our homes. Westinghouse famously teamed with inventor Nikola Tesla in the late 1880s to establish alternating current as the dominant technology for transmitting electricity.

Most people do not know the hand he played in every natural gas pipe that runs underneath the ground and into our homes.

“George Westinghouse really is one of the early pioneers in the natural gas business,” said Steve Schlotterbeck, president of Downtown-based EQT Corp., which can trace its lineage to a Westinghouse gas company.

In 1884, Western Pennsylvanians knew there was natural gas underneath their feet. They just didn’t know how to use it.

“We hadn’t figured out how to build pipelines safely,” Schlotterbeck said about the nascent industry during a recent breakfast speech on innovation hosted by the Pittsburgh Technology Council. “We hadn’t figured out how to regulate the pressures from the wells to the burner tip in a safe way. Your home or your business was likely to blow up.”

Westinghouse’s first foray into drilling nearly ended that way. According to an account at westinghouse memorial.org, he felt a challenge to wrangle the volatile beast and had a crew drill a well outside his Point Breeze home, “Solitude.”

The result was far from in line with his home’s peaceful name, as the gushing well blew equipment all over lawns and an attempt to pipe it shot flames 100 feet into the sky.

Undeterred, Westinghouse filed his first patent within a month for a system to control gas pressure. Over the next two years, he “patented 28 innovations in the natural gas space that made it possible to pipe gas from a well to a business in Pittsburgh, bring it in and use it in a safe way,” Schlotterbeck said.

Westinghouse picked a distinctly un-Pittsburgh name for the company he formed to drill and manage what became a collection of gas wells in the region: the Philadelphia Co. That firm in 1889 formed Equitable Gas, which eventually took control of all the gas properties.

EQT a few years ago sold off the Equitable Gas utility but is now the fifth-largest natural gas producer in the country. In some ways, it has the notable name of Westinghouse to thank for that.

facebooktwittergoogle_plusredditpinterestlinkedinmail

June 23, 2016
by David Conti


No comments yet - you should start the discussion!

A smaller gathering

facebooktwittergoogle_plusredditpinterestlinkedinmail

Two years ago, walking into the exhibition space at Hart Energy’s Developing Unconventionals oil and gas conference at the David Lawrence Convention Center was an overwhelming experience.

The 100-page, full-size program for what’s known as DUG East listed about 300 vendors that filled the room at the Downtown center. It was loud, with some major shale producers and service companies showing off their operations from huge displays.

The industry has slimmed down quite a bit since then as drilling in the Marcellus has slowed drastically, and this year’s installment, which wrapped up this morning, showed it. The 12-page, pocket-sized conference program listed 145 exhibitors, who took up less than two-thirds of the space in the hall.

It was quiet, much like the shale fields.

Those who did attend — one host put the number at about 1,700 people — still heard some potentially good news on big, productive wells and a possible price boost next year, as outlined here.

Oleg Tolmachev, a senior vice president at Eclipse Resources, shared insights on the longest (and best named?) onshore well in the country, the Purple Hayes well in Ohio. The company drilled 27,000 feet in less than 18 days and fracked it in 23 days, time frames that might have been laughed off during the 2104 conference.

Range Resources announced that vice president Dennis Degner would lead Marcellus operations at the regional headquarters in Cecil. We profiled Degner in one of our first Energy Spotlight features in 2014.

Back then, executives and analysts were concerned about gas prices dipping below $4 per million British thermal units. Today, a prediction that they would get above that next year (from about $2.60 today) drew a few chuckles.

What a difference two years makes.

facebooktwittergoogle_plusredditpinterestlinkedinmail

June 13, 2016
by David Conti


3 comments so far - add yours!

Face off over water

facebooktwittergoogle_plusredditpinterestlinkedinmail

On one side of the debate over whether fracking has hurt water supplies sits Erik Milito, director of upstream and industry operations for the American Petroleum Institute. On the other side is Steven Lipsky of Parker County, Texas.

During a discussion last week of the Environmental Protection Agency’s five year study on the industry’s impact on water, Milito argued there are no documented cases of hydraulic fracturing contaminating groundwater supplies.

Hours after Milito’s news conference, Lipsky told members of the EPA’s Science Advisory Board that gas drilling near his home has put so much methane into his drinking well he can set fire to water coming from a pipe.

This week, the science board, a 47-member group of academics and scientists, finds itself in the center of the debate over whether and how the shale boom has harmed drinking water.

A draft report of the EPA’s study last year declared it found no “widespread, systemic impacts on drinking water” from unconventional drilling. Industry advocates declared victory.

Then the EPA asked the advisory board to review its draft report from the study. The job fell to a specialized panel led by David Dzombak, a professor at Carnegie Mellon University.

Early word from the panel indicated some members questioned the no-impact finding and wanted EPA to clarify its report. Environmentalists declared victory.

The full Science Advisory Board expects to weigh in this week.

“Has EPA done a comprehensive job, or has it missed some key scientific steps?” That’s the question the board will seek to answer, according to its chairman, Peter Thorne, a professor at the University of Iowa’s College of Public Health.

The report from Dzombak’s panel indicates the answer is: yeah, sort of, depending on who you ask, maybe.

In general, the report says, its members found the EPA’s approach “appropriate and comprehensive.” Most, but not all, of the panel questioned whether the no-systemic-impacts finding is clear or supported by evidence.

Most, but not all, of the panel wants EPA to clarify aspects of its report and include more localized examples of contamination.

The full board on Tuesday and Wednesday will review and discuss the panel report before deciding whether to send it to the EPA for consideration, or back to the panel for revisions.

It also plans to hear from another 30 or so people during a public comment period. Based on the words offered during last week’s extra session scheduled to accommodate all the speakers, the board will hear starkly different viewpoints between industry advocates and those opposed to drilling.

facebooktwittergoogle_plusredditpinterestlinkedinmail

June 8, 2016
by David Conti


No comments yet - you should start the discussion!

Party over

facebooktwittergoogle_plusredditpinterestlinkedinmail

This week’s announcement that Royal Dutch Shell would move forward with its heretofore proposed ethane cracker along the Ohio River in Beaver County caused a rare event 200 miles away along the Susquehanna River.

Democrats and Republicans in Harrisburg agreed on something. They joined to celebrate the prospect of a shale-based manufacturing catalyst and 600 full-time jobs when the plant comes online in a few years. They congratulated one another for successfully luring the Anglo-Dutch energy giant to Potter Township.

“I would like to thank former Gov. Tom Corbett and his Secretary of Community and Economic Development C. Alan Walker for all of their efforts to bring the plant to Western Pennsylvania,” Democratic Gov. Tom Wolf said about his Republican predecessor.

“All along, this has been a bipartisan effort and a good example of what we need more of in the General Assembly,” said Rep. Jim Christiana, a Republican whose district includes the area Shell chose for its multibillion-dollar petrochemical facility.

The airing of goodwill began about 90 minutes after Shell’s announcement early Tuesday.

It was gone by 10 a.m. Wednesday.

“If Commissioner Josh Shapiro is our next attorney general, the ethane cracker plant would not be locating in Pennsylvania out of fear of his bias against the energy industry,” read the opening of a news release from the campaign of Republican John Rafferty, aimed at his Democratic opponent in the AG’s race.

Good times might be ahead for the people and business owners of Beaver County who have been hanging on every word uttered by Shell since it first indicated in might build there in 2012.

But we have an attorney general election that not so many people are paying attention to this fall. That means partisan politics.

For its part, the Shapiro campaign took its opponent to task for being a cracker party-pooper.

“It’s sad that Sen. Rafferty would try to inject negative politics into good economic news for Pennsylvania, but that’s just what Harrisburg politicians do. Rafferty’s claims are flat-out false and riddled with errors and demonstrate a clear lack of understanding of the law,” said Shapiro campaign manager Joe Radosevich.

What is clear is that regulating shale drilling – already a source of pointed partisan debate in Harrisburg – will be a hot topic in this campaign.

Rafferty’s campaign accuses Shapiro of demonizing the gas industry, which he says would scare companies away from investments like Shell’s. “Pennsylvanians don’t want an activist attorney general who is willing to denounce an entire industry simply because they don’t conform to his political agenda,” the campaign said.

Shapiro supports the cracker, Radosevich said, but pledges to hold accountable companies that pollute the environment.

“Apparently, Sen. Rafferty believes that the way to make Pennsylvania attractive to businesses is to give them a pass from laws protecting clean water, public health, and the safety and well-being of workers,” Radosevich said.

facebooktwittergoogle_plusredditpinterestlinkedinmail

May 16, 2016
by David Conti


No comments yet - you should start the discussion!

In search of an energy policy

facebooktwittergoogle_plusredditpinterestlinkedinmail

Discussions around energy policy garner attention in national politics every four years.

In Pennsylvania, it’s been an ongoing debate for about 12 years, starting not long after the Marcellus shale was first tapped in Washington County.

One would think after all this time we might be closer to settling on something close to an energy policy, or even just a natural gas policy in the country’s No. 2 natural gas producing state.

Listen to the different sides in the debate, though, and it seems they aren’t speaking the same language.

In Harrisburg, Gov. Tom Wolf and some lawmakers have translated “energy policy” to mean “taxes,” according to Rep. Jim Christiana.

“That’s been the extent of energy policy in Harrisburg for the past 24 months,” the Beaver County Republican said during a recent Pittsburgh Airport Area Chamber of Commerce forum in his district.

Because lawmakers four years ago decided to call the state revenue stream from gas wells a “fee” instead of a “tax,” we’re stuck in a debate over words and how to increase that revenue stream, instead of looking at the best ways to balance safe and reliable production with increased demand, Christiana said.

“We’ve got to have a serious conversation about energy policy,” said Christiana, who has opposed a severance tax on production but this year proposed that very thing as an attempt to end the debate.

The Wolf administration continues its push to add a tax to the existing impact fee. It also says Wolf wants to see the gas industry flourish in Pennsylvania.

That’s one reason he gathered a task force to help with the pipeline buildout the industry needs, Denise Brinley, special assistant to the secretary of the Department of Community & Economic Development, said during the same chamber forum.

“The governor recognizes the need to get the gas to market,” she said, calling shale gas an opportunity for economic growth even outside the Marcellus footprint.

Administration officials have echoed this sentiment, causing some in the industry to scratch their heads. Such words of support for gas are incompatible with what they consider an onerous tax policy and regulatory scheme.

Scott Roy, a vice president at producer Range Resources, pointed out to Brinley what he sees as a disconnect between Wolf’s words and “what we see in the field.”

“The pipelines won’t matter if there’s no gas to flow into that pipe,” Roy said. Wolf’s policies stifle production, he said.

“We can’t have a 230-mile pipeline bisecting the state with no off-takes for Pennsylvanians,” Brinley responded, a possible reference to the Mariner East pipeline, which delivers Range’s ethane to a terminal south of Philadelphia for export overseas.

And the debate goes on.

facebooktwittergoogle_plusredditpinterestlinkedinmail

May 2, 2016
by David Conti


One comment so far - add yours!

Out in the cold

facebooktwittergoogle_plusredditpinterestlinkedinmail

The long-term winter forecast for New York and New England keeps getting colder.

It might get dark in spots, too. It certainly will get more expensive.

More and more, people there are relying on natural gas to keep their homes warm and to keep the lights on as power plants switch over from coal and nuclear plants close from Vermont to the Empire State. Demand for the fuel is forecast to keep growing.

But the chance of meeting all that demand in Northeast states became less certain over the past few weeks.

One major pipeline set to deliver gas across New England was shelved by its proposed operator, Kinder Morgan. Another project meant to link New York customers to Marcellus shale producers — the Constitution Pipeline — encountered a major stumbling block thrown up by that state’s environmental regulators.

It’s hard to predict whether the Constitution line or a competitor to the Kinder Morgan project will eventually get built.

What’s certain, though, is those hoping for easier access to the huge quantities of cheap gas coming from the Marcellus — just miles from the New York line — will have to wait. And those power plants and utilities will have to find alternative and more costly supply lines to keep fires burning and lights flickering.

“This was our big chance to pay lower energy costs, like everybody else,” Anthony Buxton of the Coalition to Lower Energy Costs told the Boston Globe when Kinder Morgan canceled its long-planned Northeast Energy Direct project in mid-April.

New Englanders pay some of the highest electricity rates in the country, and gas prices often spike there in winter when demand surges and supplies dwindle. An extension of Kinder Morgan’s existing Tennessee line across the top of Massachusetts and into New Hampshire would have helped ease that.

Opponents of the pipeline said utilities can get extra gas when it’s needed from imports. Despite overflowing supplies in Appalachia, a terminal south of Boston continues to take in more expensive liquefied natural gas from overseas.

In New York, alternative sources of gas might be more scarce, especially since Gov. Andrew Cuomo banned the use of fracking to explore shale. His Department of Environmental Conservation on April 22 denied environmental permits needed to build the Constitution Pipeline from northeast Pennsylvania to his state.

The companies that want to build the line say they are considering an appeal to federal court.

It’s hard to tell how many cold winters such a case would take.

facebooktwittergoogle_plusredditpinterestlinkedinmail

April 6, 2016
by David Conti


No comments yet - you should start the discussion!

A win for coal

facebooktwittergoogle_plusredditpinterestlinkedinmail

Last June, we told readers about an effort by retired and current coal miners to form a collegiate mine rescue association.

The goal was to formalize rules and relationships among teams at several universities. The competitive events and exercises leading up to them are invaluable to student miners-in-training and the future of the industry overall, organizers and former team members said.

Good news came in the summer, when the Eastern Collegiate Mine Rescue Organization organized under the Society for Mining, Metallurgy & Exploration, with a six-member board and a rules committee.

Better news came last weekend when the group held its first full competition at West Virginia University Extension’s Doll’s Run Training Center with teams from WVU, Penn State, the University of Kentucky and Virginia Tech.

Kentucky took first place.

“Things went extremely well,” said Don Hager, the Virginia tech team trainer and retired Consol Energy miner who helped bring together the organization. “WVU Extension was a great place to have it and they did an exceptional job handling it.”

Given the nationwide slowdown in coal production that has led to mine closures and layoffs across Appalachia, it might be easy to assume that new generations of mine rescue teams would become less necessary.

Miners say the opposite is true. Younger workers who have spent time on these teams in college enter jobs with a safety-first attitude that helps prevent accidents, they say. They can work together easily when problems happen underground.

facebooktwittergoogle_plusredditpinterestlinkedinmail
 
Other blogs
Sports:Steel Mill | Chipped Ice | Bucco Blog | iPreps | Pitt Locker Room | Penn State Sports
News: Backstory | Doug Oster on Gardening | Off-Road Politics | Flowback | ICycle  


» Top TribLIVE.com Sports
» Top TribLIVE.com News
» Top TribLIVE.com Breaking News