Sunday, December 16, 2018

As Zinke Departs, Trump Says He Will Name New Interior Secretary ‘Next Week’

Zinke has run the Interior Department, which oversees America’s vast public lands, since early 2017. He has aggressively pursued Trump’s agenda to promote oil drilling and coal mining by expanding federal leasing, cutting royalty rates, and easing land protections despite environmental protests.

https://www.shaledirectories.com/blog/as-zinke-departs-trump-says-he-will-name-new-interior-secretary-next-week/

Fourth Circuit Goes Full Childish on Atlantic Coast, “Speaks for the Trees”


17d9481.jpgJim Willis
Editor & Publisher, Marcellus Drilling News (MDN)

The Fourth Circuit Court of Appeals goes full childish, full infantile, with a ridiculous “speak for the trees” decision against the Atlantic Coast Pipeline.

The U.S. Fourth Circuit (i.e. Circus) Court of Appeals has bungled another decision regarding the Atlantic Coast Pipeline (ACP).  The court has vacated a permit issued by the U.S. Forest Service (USFS) that allows ACP to cross beneath the Appalachian Trail and 21 miles of national forest land in Virginia and West Virginia.

The Fourth Circuit is apparently a bunch of clowns. How else do you explain the judge quoting from The Lorax, a fictional children’s book written by Dr. Seuss, as part of the decision issued yesterday. The so-called decision is straight out of Alice in Wonderland. Bizarre.

What’s next? Will we be treated to Youtube clips from the Captain Planet cartoon in future decisions? This faulty decision is already being appealed by Dominion Energy. It’s pretty easy to predict the decision will get overturned on appeal–by adult, non-clown judges in the next court up.

All work is already stopped for ACP due to the same clown judges overturning a different permit last week issued by the U.S. Fish and Wildlife Service (FWS) that allows the pipeline to get built through areas with so-called endangered and threatened species (see 4th Circus Blocks Permit, Stops All Work on Atlantic Coast Pipe).

A “judge” quoting from The Lorax. Ya think maybe there’s a tad bit of judicial bias going on here? Perhaps even judicial incompetence? We call for an immediate investigation by Special Counsel Robert Mueller into the judge, to see whether or not the judge donates or belongs to the Sierra Club or any of the other radical Big Green groups that brought the lawsuit in the first place.

Something is really off here. Really smelly. Check out these excerpts from this story in the Charleston Gazette-Mail:

In an opinion made public Thursday, a panel of judges vacated the Forest Service’s Special Use Permit and Record of Decision, both required to construct the pipeline through the George Washington and Monongahela national forests. The panel also said the Forest Service didn’t have the authority to allow construction across the Appalachian Trail.

The 60-page opinion includes a reference to Dr. Seuss’s “The Lorax,” a cautionary tale about the perils of corporate greed and environmental harm, told in a children’s book.

“We trust the United States Forest Service to ‘speak for the trees, for the trees have no tongues,’” the opinion, written by Judge Stephanie Thacker, said. Chief Judge Rogery Gregory and Judge James Wynn joined…

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Fourth Circuit goes full childish?

Atlantic Coast Pipeline voluntarily halted construction along the project’s path last week, when the 4th Circuit Court of Appeals issued a stay to the U.S. Fish and Wildlife Service’s Biological Opinion and Incidental Take Statement. It’s one of many permits that have been battled over in federal court.

But Atlantic Coast Pipeline plans to appeal Thursday’s decision, Aaron Ruby, a spokesman for the project, said in a statement. The decision “severely” harms consumers and energy security, he said.

“With this decision, the Fourth Circuit has now undermined the judgment of the dedicated, career professionals at nearly every federal agency that has reviewed this project,” he said.

A spokesman for the Forest Service said the agency was reviewing the decision, but didn’t comment further.

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Saturday, December 15, 2018

Controversial Colorado Researcher Dubiously Links Fracking to Health Impacts

University of Colorado Public Health professor Lisa McKenzie’s latest attempt to connect oil and natural gas development to health risks – this time involving precursors to cardiovascular disease – produces the same results as her team’s previous research: a failure to actually link fracking to these issues despite what media reported.

The key finding from this latest McKenzie et al. study is a “possible connection” that volunteer participants who lived near higher “intensity” oil and gas operations had increased levels of pre-indicators of cardiovascular disease. They also conclude that more “robust” research is needed – which appears to be Prof. McKenzie’s M.O. (which we will address in a minute).

How they reached such a conclusion with even a loose correlation, given the scope of limitations acknowledged in the report, is a bit of a mystery. Learn more about the five key things to know about this study on EIDHealth.org.

https://www.shaledirectories.com/blog/controversial-colorado-researcher-dubiously-links-fracking-to-health-impacts/

Natural Gas NOW Picks of the Week – December 15, 2018

Tom-1.jpgTom Shepstone
Shepstone Management Company, Inc.

Natural Gas NOW readers pass along a lot of stuff every week about natural gas, fractivist antics, emissions, renewables, and other news relating to energy. As usual, emphasis is added.

Fracking Saves Railroad!

Fracking is saving an invaluable railroad in Lackawanna County, Pennsylvania:

Fracking for Marcellus Shale natural gas deep underground keeps pushing a local railroad to new heights. After setting a new record for freight traffic last year, the Pennsylvania Northeast Regional Railroad Authority might just do it again for 2018.

Through Nov. 21, the Delaware-Lackawanna Railroad, which operates the authority’s tracks, hauled 8,301 carloads of freight this year, just shy of the 8,572-carload in 2017, said Larry Malski, the authority’s longtime executive director.

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‘We’re going to blast through that next month,” Malski said. ‘We’ve had a little boom with the Marcellus gas stuff.”

He attributed most of the surge to increases in demand for fracking sand by the Linde Corp., which supplies the sand to drillers out of a railroad yard in Carbondale and also builds gas pipelines.

Nice to see my long-time friends  Larry Malski and Linde Corp.doing so well with this. There’s no fracking to speak of in Lackawanna County but look at the benefits!

New Jersey Needs Our Natural Gas! Who Knew?

Some great news from FERC, approving a pipeline infrastructure upgrade in New Jersey:

Williams today reported that the Federal Energy Regulatory Commission (FERC) has issued a certificate of public convenience and necessity authorizing the Gateway Expansion Project – an expansion of the existing Transco natural gas pipeline designed to create 65,000 dekatherms per day of firm transportation capacity for northeastern markets.

The Gateway project helps meet growing natural gas demand by consumers in New Jersey and New York in time for the 2020/2021 winter heating season, providing additional natural gas service to PSEG Power, LLC (PSEG) and UGI Energy Services, LLC…

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The project has been designed to minimize community and environmental impacts by maximizing the utilization of existing pipeline infrastructure. Virtually all of the project activities are within Transco’s existing rights of way and/or property boundaries. It includes adding electric horsepower at an existing Transco compressor station in Essex County, N.J., in addition to making modifications to two existing Transco meter stations in Passaic County and Essex County, N.J.

Following the receipt of all necessary regulatory approvals, Williams anticipates beginning construction on the Gateway Expansion Project in the spring of 2019, with a target in-service date of Nov. 1, 2020.

PSEG supplies its affiliate Public Service Electric & Gas Company, which is New Jersey’s largest provider of electric and gas service – serving 2.2 million electric customers and 1.8 million gas customers. UGI Energy Services supplies and markets natural gas and electricity to 40,000 customers across the Mid-Atlantic and Northeastern U.S.

For all the New Jersey official hyperbole directed against fracking and pipelines, the state needs our natural gas and that’s why FERC approved this project but not without additional blather from one of the FERC Commissioners about impact on global warming; as if natural gas wasn’t lowering CO2 emissions by providing an alternative to coal. Read MDN‘s take here.

Football Is More Than A Game If You Look Closely

The following is a guest post by the Ohio Oil & Gas Energy Education Program (OOGEEP) Executive Director, Rhonda Reda. It appeared on Well Said Cabot:

When most people think of modern-day, football, they think about cleats, helmets, shoulder pads, stadium lights, and what each season is sure to hold: tailgating, fantasy football, rivalries, tradition, and the talented players and coaches that make up America’s favorite spectator sport.

What is often overlooked is how the products that have helped make the game safer and more viewer-friendly are due to the numerous products made from oil and natural gas byproducts. From your local high school games to professional football, these products are found everywhere.

Identifying players on the field is made easier thanks to jerseys made from nylon, polyester and spandex. Checking to see if that last run is a first down is possible thanks to the plastic markers used by the referees. The shoulder pads and helmets worn by players are all manufactured from petrochemicals designed to help keep players safe.

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Even the playing field benefits from products made from oil and natural gas. Keeping a green, consistent field for games is an important aspect of the sport. Fields with natural grass are closely monitored and upkeep often includes the use of fertilizers to grow a lush field. And fields with artificial grass, often referred to as AstroTurf, are made using nylon, polypropylene, or polyethylene. Artificial grass has the added advantage of an underlying layer of rubber which helps lessen the impact when a player hits the ground.

Even the Friday night lights associated with the tradition of watching your hometown football team each fall take on a rival community were brought to you thanks to natural gas. Natural gas provides over 30% of electric generating power in America which brings lights to the stadium and makes sure you can watch your favorite college team from the comfort of your own home.

Oil and natural gas are a big hit at tailgates, too. From powering your grill to cook hot dogs and hamburgers to the coolers keeping your drinks cold to the tents used to help keep your party protected, these products are there to help you have a wonderful time cheering on your favorite team.

This little post demonstrates the pervasive positive impact of oil and gas on our everyday lives, something fractivists pretend not to see.

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Friday, December 14, 2018

States Pursuing Climate Litigation Rated ‘Judicial Hellholes’ by Major Legal Organization

The trial lawyers bringing climate liability lawsuits against energy producers in California and New York City may have contributed to those locations topping the list of “judicial hellholes,” according to the American Tort Reform Foundation’s (ATRF) 2018-2019 Judicial Hellhole report. ATRF’s annual report identifies the states, cities, and courts with the most “unfair and unbalanced” laws and procedures in the country. California and New York City were crowned the worst and third worst, respectively, while Florida earned the number two spot, coming amid media reports of Sher Edling LLP and EarthRights International pitching their climate lawsuits to several South Florida communities.

See our highlights from the report at EID Climate.

https://www.shaledirectories.com/blog/states-pursuing-climate-litigation-rated-judicial-hellholes-by-major-legal-organization/

Shale Revolution Expands with Growing US LNG Exports and Capacity

Tom.jpgTom Shepstone
Shepstone Management Company, Inc.

LNG exports are growing along with the capacity to expand them even further down the road. LNG exports are the next exciting phase of the shale revolution.

Today In Energy had a post on Monday that provides yet another example of the power of the shale revolution. It’s all about growing US capacity to do LNG exports. Those LNG exports are the future; helping to lift poorer nations abroad, as well as rural areas at home, out of poverty while cleaning the air.

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Note: Each square represents one LNG train, with the exception of Elba Island, which will deploy 10 small-scale modular liquefaction units sequentially in two phases.

The story is focused on the growth in LNG exports capacity; the number and size of terminals from which we can ship the gas produced here to countries needing it abroad, not to mention places such as Boston where they’d rather shiver, pay through the nose or buy Russian gas than have a pipeline. The Energy Information Administration (EIA) provides the basics:

EIA projects that U.S. liquefied natural gas (LNG) export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world behind Australia and Qatar. Currently, U.S. LNG export capacity stands at 3.6 Bcf/d, and it is expected to end the year at 4.9 Bcf/d as two new liquefaction units (called trains) become operational.

The United States began exporting LNG from the Lower 48 states in February 2016, when the Sabine Pass liquefaction terminal in Louisiana shipped its first cargo. Since then, Sabine Pass expanded from one to four operating liquefaction trains, and the Cove Point LNG export facility began operation in Maryland. Two more trains—Sabine Pass Train 5 and Corpus Christi LNG Train 1—began LNG production this year, several months ahead of schedule, and are expected to ship their first cargos within the next few weeks.

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Cove Point

Two more LNG export facilities—Cameron LNG in Louisiana and Freeport LNG in Texas—are currently being commissioned. Commissioning of liquefaction facilities involves introducing natural gas feed into the train and ultimately producing LNG. For liquefaction terminals, which use refrigeration to cool natural gas into liquid form, commissioning also includes getting the equipment and refrigerants down to sufficiently cold temperatures. The first LNG production from these facilities is expected in the first half of 2019. The developers of these projects expect all three trains at Cameron LNG and two trains at Freeport LNG to be placed in service in 2019.

The Elba Island LNG facility near Savannah, Georgia, is also scheduled to become fully operational by the end of 2019. Elba Island LNG consists of 10 small modular liquefaction units with a combined capacity of 0.33 Bcf/d. Project developers expect LNG production from the first train to begin early next year and from the remaining nine trains to commence sequentially through the rest of 2019. The second train at Corpus Christi LNG is scheduled to be placed in service in the second quarter of 2019. The final two trains of the U.S. liquefaction projects currently under construction—Freeport Train 3 and Corpus Christi Train 3—are expected in service in the second quarters of 2020 and 2021, respectively.

Four additional export terminals—Magnolia LNG, Delfin LNG, Lake Charles, Golden Pass—and the sixth train at Sabine Pass have been approved by both the U.S. Federal Regulatory Commission and the U.S. Department of Energy, and they are expected to make final investment decisions in the coming months. These proposed projects represent a combined additional LNG export capacity of 7.6 Bcf/d.

U.S. LNG exports continue to increase with the growing export capacity. EIA’s latest Short-Term Energy Outlook forecasts U.S. LNG exports to average 2.9 Bcf/d in 2018 and 5.2 Bcf/d in 2019 as the new liquefaction trains are gradually commissioned and ramp up LNG production to operate at full capacity.

Yet again, it’s unstoppable natural gas. We are, in fact, living in the golden age of natural gas.

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Facts & Rumors # 316

Save these 2019 for Shale Directories Seminars

Utica Midstream March 21, 2019 Walsh University North Canton, OH www.uticasummit.com

Upstream PA 2019 April 17, 2019 Penn Stater Conference Center State College, PA

www.upstreampa.com

 

Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, and Bakken Shale Plays

Rice Brothers Want To Run EQT.  You can’t beat a proxy fight. Listening to the bombastic charges leveled by both sides against the other, rhetoric spewed at the highest level — nothing beats a company’s management team and board facing off against outsiders. Monday morning, the wraps were pulled off a potential proxy fight in the oil and gas industry. Toby Z. and Derek A. Rice told independent producer EQT Corp. they aren’t satisfied with the direction of the Pittsburgh-based E&P player. It’s early in the potential proxy fight process; the Rices are suggesting improvements they believe will make EQT more efficient, return more on investment, and generally tighten the producer’s modus operandi. But the letter makes it clear: Should EQT pooh-pooh the Rice proposals, including installing Toby Z. as head of operations, and placing more experienced O&G people with plenty of planning expertise, are placed on the board and in the executive offices, fireworks are possible. EQT, for its part, is being polite: “EQT is a refreshed company with a new management team, new operating plan and substantially reconstituted board,” according to a requested comment from the company on the Rice boy’s moves. “The company is focused on achieving profitable growth by driving operational efficiency, solid free cash flow, balance sheet strength, disciplined capital allocation and the realization of synergies. We are confident that EQT is taking the right steps to deliver superior value.” Remember, it’s early. While the $8.2 billion cash, stock and assumed debt deal EQT put together to acquire the smaller but highly successful Rice Energy made EQT the largest natural gas producer by volume in the U.S., the Rices as EQT investors aren’t satisfied with size. Yes, they want returns on the market value of their 7-plus million shares of EQT stock, but they also need the company that carried their surname to carry on – not under that name, but in success in the field, on the pad, in the individual well drilled. “EQT must add proven operational experience to the board and senior management team – in particular, individuals with experience in large-scale operational planning,” the Rices recommend. Rice Energy before its acquisition was one of the most successful independent producers of its size in the industry. And much of that success dealt with planning – Rice executives were fanatical when it came to pre-planning of every move involved in D&C – much more than most of its peers. Its executives were often conference speakers, telling the Rice story on how efficiency leads to prosperity. “EQT should improve planning through a coordinated operations schedule to reduce costs of drilling and subsequent derivative operations (e.g., completions, production, marketing, etc.),” states the PowerPoint presentation the Rices have put together in their quest to improve EQT (found online at eqtpathforward.com). Analysts contacted by Kallanish Energy on the EQT-Rice situation said they weren‘t surprised by the Toby and Derek letter and PowerPoint, and that there was little doubt the production wasn’t spur of the moment. “The timing of the release comes before EQT’s conference call this Thursday to discuss the company’s 2019 capital program and updated analyst presentation,” Sameer Panjwani, director, Equity Research with Tudor Pickering Holt, tells Kallanish Energy. “I would be very surprised if this situation is not brought up during that call.” Panjwani told Kallanish Energy the Monday release of the letter to the board and accompanying PowerPoint will be additional pressure on EQT to reveal more details on the direction the company intends to move – and how it intends to get there. “We have a proven, detailed business plan to generate an incremental $400-$600 million of pre-tax free cash flow per year above EQT’s current plans, equaling greater than $1.0 billion of free cash flow per year,” the Rice’s presentation states.“ This plan would match EQT’s current five-year production goals but generate twice the cash flow for shareholders.” The Rice letter states that over the past few weeks, in response to repeated outreach by a number of EQT investors asking for their assistance, the Rices engaged in private discussions with EQT chairman Jim Rohr and CEO Rob McNally “to express our concerns and propose solutions, which included, among other things, inserting Toby Rice into the organization with proper authority and support to oversee operations. “Unfortunately, given the lack of reciprocal engagement – and EQT pushing forward with establishing its 2019 operational plan and budget – it has become apparent that they are unwilling to make the changes needed.” The Rices quietly state that should the EQT board and company executives refuse to act upon the Rice recommendations, “we are prepared to nominate identified director candidates for election to the EQT board, if necessary.” “We have been talking to a number of EQT investors, and there appears to be a great deal of support for the Rice team: Tudor Pickering Holt’s Panjwani told Kallanish Energy. “Their proposal is not going away anytime soon.” There is one more unique twist to the potential EQT-Rice boys’ proxy fight. Of EQT’s 12 board members — certainly one not likely to lose his seat to someone with more E&P and planning experience — is Daniel J. Rice IV, former Rice Energy CEO. NatGas Pricing Taking a Pause.  Friday’s natural gas prices dipped below $4.  Many think the upward movement on pricing will proceed once the cold weather returns which could be as soon as days after Christmas.  Meteorologists are predicting very cold weather in January and February.  We’ll see if NatGas gets to $5 in January. PennEast Gets Eminent Domain.  (Thank you, MDN) It certainly seems as if the deck has been stacked against the PennEast Pipeline project, a $1 billion, 120-mile NatGas pipeline that will stretch from northeast PA to the Trenton area of New Jersey. As we pointed out in November, DTE Energy’s NEXUS Pipeline, a 255-mile pipeline from Columbia County in Ohio to Southern Michigan, received its Federal Energy Regulatory Commission (FERC) approval around the same time PennEast did, about a year ago. NEXUS is already built and flowing, PennEast hasn’t turned the first shovelful of dirt yet. It’s been a real battle for PennEast. However, things are finally beginning to look up. Last week a federal judge granted PennEast its first approval in a string of eminent domain cases, giving PennEast the right to enter and survey a property in Carbon County, PA. U.S. LNG Exports to Double by 2019.  U.S. liquefied natural gas (LNG) export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world behind Australia and Qatar, the Energy Information Administration projects. Currently, U.S. LNG export capacity stands at 3.6 Bcf/d, and it’s expected to end the year at 4.9 Bcf/d as two new liquefaction units (trains) become operational. The U.S. began exporting LNG from the Lower 48 U.S. states in February 2016, when Cheniere Energy’s Sabine Pass liquefaction terminal in western Louisiana shipped its first cargo. Since then, Sabine Pass expanded from one to four operating liquefaction trains, and Dominion Energy’s Cove Point LNG export facility began operation in Maryland. Two more trains, Sabine Pass Train 5 and Corpus Christi LNG Train 1, began LNG production this year, several months ahead of schedule, and are expected to ship their first cargos within the next few weeks. Another two LNG export facilities: Cameron LNG in Louisiana and Freeport LNG in Texas, are currently being commissioned, Kallanish Energy reports. U.S. Crude Exports Get Boost from LOOP.   In the last seven days, three very large crude carriers (VLCCs) have departed LOOP’s Marine Terminal full of domestic crude oil.  As the demand for exports from Louisiana increases, the efficiency of LOOP’s vessel loading service has delivered value to the global petroleum marketplace. The three VLCCs all arrived at the LOOP deepwater port completely empty and departed fully loaded with various crude types that can be sourced from LOOP’s Clovelly Hub, including a light sweet grade. LOOP has been a hub for domestic crude production since 1996 and handles a wide spectrum of domestically produced energy including WTI, LLS, Eagle Ford, Bakken, Mars, and THB and specialty grades. These three VLCCs were loaded one after the other, significantly reducing overall load time at the Port. As the demand to load at LOOP grows, this same loading strategy can be utilized, reducing the time to fully load a VLCC at LOOP to as little as two days. “This is a great proof point of the value of our ownership interest in LOOP” said Kevin Nichols, EVP, Shell Midstream US. “The US Gulf Coast plays an important role in providing the energy that the world needs, and LOOP is strategically positioned and has the capability to respond to the growing global market demand. As we see growth in our key connected systems across the region, we also expect to see future growth at LOOP.” LOOP, as the nation’s only deepwater port, was constructed specifically for the safe and efficient handling of VLCC’s, and began export operations in February 2018. LOOP offers its vessel loading service using already-built infrastructure that both minimizes environmental risks and impacts and focuses on sustainability as the best use of our nation’s existing assets. As market demand grows, LOOP will expand vessel loading services in coordination with concerned agencies and stakeholders to ensure its activities remain fully protective of the environment and public health. FERC Approves PA-OH Pipeline. (Thank you, MDN)  FERC has finally come out of its funk. At least with respect to the RH energytrans Risberg Line project. We have been waiting and waiting and waiting to bring you this exciting news: The Federal Energy Regulatory Commission has given final approval for the Risberg Line project to begin construction! Risberg is a 60-mile, $86 million pipeline from Crawford County, PA through Erie County and into Ashtabula County, OH. According to FERC’s own schedule, an OK for the project was due no later than Sept. 27, which didn’t happen. In October, RH energytrans was diplomatic and said, “It may take a little longer than we might hope.” Their patience has paid off. On Friday, FERC pulled the trigger and sent. RR Thriving in NE PA.  We love a good railroad story–always have, always will. And here’s a great railroad story. The freight trains in northeastern Pennsylvania will this year, once again, set a new record. Last year the Delaware-Lackawanna Railroad, which operates 85 miles of track in Lackawanna and Monroe counties, hauled 8,572 carloads. This year they will fly by that number, to a new record. Why? Mainly due to frack sand used by Linde Corp, which supplies sand to drillers in the region. Translation: Drilling picked up again in 2018 in northeastern PA. ConocoPhillips Sees 25% Shale Growth in 2019.  ConocoPhillips, the world’s largest independent oil producer, sees shale production growing 25% next year even as crude prices tumble, proving the industry’s resilience in volatile markets, said CEO Ryan Lance. In the U.S., Conoco wells in the Eagle Ford Shale, Permian Basin and the Bakken field generate cash when prices hover around $50/bbl, Lance said in an interview on Monday in Houston. Conoco pumped 313,000 bopd from the three regions combined during the third quarter, or 25% of the Houston-based company’s global production. American crude output is surging, contributing to a global supply glut that has pushed prices down by third since the beginning of October. The subsequent squeeze on shale profits may slow growth next year but the industry is in far better shape than it was at the advent of the last slump four years ago, Lance said. Production growth “slows down at $50 but I don’t think it stops at $50 and it certainly continues if prices get back to $60,” Lance said. Skeptics thought shale “wouldn’t last long but it’s here, it’s a huge resource and it’s going to be resilient and long lasting.” Long Ridge Energy Receives Federal Grant.  The U.S. Department of Transportation has awarded Hannibal, Ohio, a $20 million grant to improve a rail and pipeline energy transload facility. The money will be used to construct a pipeline-to-rail transloading facility that will include truck racks and ladder racks connected to a recently constructed loop track. The Long Ridge Energy Terminal where the funds will be used is located in the heart of the Marcellus and Utica shale gas plays. The facility generates power, stores natural gas liquids and brings in frack sand. In addition to the rail infrastructure, the facility is located on the Ohio River and has two barge docks. The funding for the project was made available through the DOT’s program called the Better Utilizing Investment to Leverage Development Transportation Discretionary Grants program (BUILD). The program is designed to support roads, bridges, transit, rail, ports or intermodal transportation. Chevron Leveraging the Permian.  Chevron Corporation (NYSE:CVX) is successfully leveraging its Permian Basin division to not only offset production losses elsewhere (due to divestments, natural declines) but to also enable company-wide production growth. From 2015 to 2017, Chevron Corporation grew its oil & gas production from 2.62 million barrels of oil equivalent per day net to 2.73 million BOE/d net. That trajectory continued into 2018, with Chevron Corporation producing 2.96 million BOE/d net in Q3 2018 (2.88 million BOE/d net YTD). Let’s go over why the Permian Basin has been crucial to reviving upstream growth at Chevron Corporation.

Overview

With 2.2 million net acres in the Permian Basin, a prolific oil & gas producing region that stretches across West Texas and Southeast New Mexico, Chevron has a deep inventory of well locations worth developing. While the oil realizations Permian upstream players require to earn a decent return on new wells is a hotly contested topic, it is clear that when capable of realizing $50/barrel or more (including differentials), the upstream industry starts aggressively deploying capital to the area. 1.7 million acres of Chevron’s Permian position is located in the Delaware and Midland sub-basins, which are prospective for the most economical and prolific well locations in the unconventional realm. By unconventional, that means upstream operations that utilize horizontal drilling and hydraulic fracturing to unlock resources from shale, sandstone, chalk, and other geological formations. Breaking that down further, Chevron notes that 800,000 net acres of its unconventional Permian position is considered core (defined by acreage with development opportunities that sport a net present value north of $50,000 per acre when assuming WTI is held flat at $55/barrel). More Trouble for Atlantic Coast Pipeline.  A panel of federal judges has rejected permits for the Atlantic Coast natural gas pipeline to cross two national forests and the Appalachian Trail in Virginia, finding that the U.S. Forest Service “abdicated its responsibility” and kowtowed to private industry in approving the project. The harshly worded, 60-page decision issued Thursday by three judges from the U.S. Court of Appeals for the 4th Circuit is part of a string of legal setbacks for the 600-mile pipeline. The $7 billion project, being built by a consortium of companies led by Dominion Energy, is intended to carry natural gas from West Virginia through Virginia and into North Carolina. “We trust the United States Forest Service to ‘speak for the trees, for the trees have no tongues,’ ” the ruling said, quoting “The Lorax,” a 1971 Dr. Seuss book. “A thorough review of the record leads to the necessary conclusion that the Forest Service abdicated its responsibility to preserve national forest resources.” PA DEP New Emissions Regs.  The Pennsylvania Department of Environmental Protection (DEP) on Thursday unveiled draft regulations aimed at curbing smog-forming emissions from existing oil and natural gas production and midstream operations. The proposal mirrors Obama-era guidelines for the industry issued in 2016 for limiting emissions of volatile organic compounds (VOC) from older industry sources, part of which the Trump administration is considering rolling back. The rules would apply to storage tanks, pneumatic controllers and pumps, and certain kinds of compressors at natural gas processing plants, other midstream facilities and well sites, according to documents prepared for a meeting with the Air Quality Technical Advisory Committee (AQTAC). Operators would also be required to conduct more stringent leak monitoring and repair quarterly at well sites, gathering and boosting stations, and processing plants. Manchin May Help the O&G Industry.  Democrat U.S. Sen. Joe Manchin from West Virginia will serve as the ranking member of the Senate Committee on Energy and Natural Resources, when Congress reconvenes in January. Manchin has been a member of the committee since being elected to the Senate in 2010. “I am excited for the opportunity to continue to serve West Virginians in this new role as the lead Democrat on the Senate Committee on Energy and Natural Resources,” Manchin said. “This committee has a long history of bipartisanship that has helped propel our nation’s energy technology forward. The problems facing our country are serious, and I am committed to working with my colleagues on both sides of the aisle to find common sense solutions for long-term comprehensive energy policy that incorporates an all-of-the-above strategy ... .” The news of Manchin’s appointment came less than a week after Manchin voted against Bernard McNamee, President Trump’s nominee to the Federal Energy Regulatory Commission. “Climate change is real, humans have made a significant impact, and we have the responsibility and capability to address it urgently,” Manchin later explained in a statement after he voted to advance McNamee’s nomination, but later changed his mind. Progressive Democrats expressed opposition to the potential appointment, citing a television ad in which Manchin shot a bullet through a piece of climate change legislation. Manchin, who won a rough reelection race last month, is a strong supporter of the coal industry and frequently sides with the Trump administration and Republicans on energy matters. He has promised to go in with an open mind and take seriously concerns of the rest of the Democratic caucus, environmentalists, renewable energy advocates and others. PA-Permints-Dec_-6-Dec_-13-2018.pngJoe Barone jbarone@shaledirectories.com 610.764.1232

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