Marcellus and Utica Shale Databook 2014 Volume 2: 2014 May-Aug Drilling Permit Maps; Comprehensive List of Infrastructure Projects 81 Detail Maps & Charts, Individual County Maps for Permits Issued May-Aug; Regulatory/Legal Update; Frac Sand Primer and More! September 2014 Edition
18
Embed
Marcellus and Utica Shale Databook 2014 – Sample Pages for Vol. 2
Preview pages for the Marcellus and Utica Shale Databook 2014, Volume 2. This second volume (of three) features 81 detailed maps and charts showing where Marcellus & Utica Shale well permits have been issued throughout PA, OH and WV for May through August of 2014. Each detail map shows major natural gas pipelines, the location of compressor stations, and the locations for each permit issued appended with the driller's name. NEW in this edition: A frac sand and railroad primer. Also an updated directory of the 109 active and planned infrastructure/pipeline projects for the Marcellus/Utica. Plus much more! This is must-have information for landowners, drillers, and anyone interested in answering the question--just how long (and how much) will a well produce? Many other special features make this an indispensable tool for those with an interest in drilling in the Marcellus/Utica. Visit this page for more details: http://marcellusdrilling.com/databook.
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Marcellus and Utica Shale Databook 2014 Volume 2: 2014 May-Aug Drilling Permit Maps; Comprehensive List of Infrastructure Projects
81 Detail Maps & Charts, Individual County Maps for Permits Issued May-Aug; Regulatory/Legal Update; Frac Sand Primer and More!
Section V – Silica Sand Primer + Railroad Logistics
Disclaimer: Select Analytics, LLC, dba “ShaleNavigator” and Marcellus Drilling News, are not liable for any direct or indirect damages suffered related to the use of this Databook product arising from any errors, omissions, inaccuracies, or any other inadequacies of the Databook or the Recipient’s use of the Databook. In no event will Select Analytics, LLC’s, dba “ShaleNavigator”’s or Marcellus Drilling News’ liability to the Recipient or anyone else exceed the fee paid for the Databook product. Use of information provided in this report is at your own risk. Editor’s Note: If you spot anything you believe is inaccurate or should be added, tell us! You may qualify for a free MDN or ShaleNavigator subscription.
Preface: Sand and Railroads 82 Specialized Sand 83 Where Does Silica Come From? 83 Minnesota Emerging 83 The Role of Railroads 83 Transload Facilities 84
Rail Lines by County – Pennsylvania (map) 85 Rail Lines by County – Ohio (map) 86 Rail Lines by County – West Virginia (map) 87 Rail Lines by County – New York (map) 88 Rail Lines by County – Maryland (map) 89
Introduction 90-91 Antero Resources 92 Appalachian Resins 92 Blue Racer Midstream 92-94 Calumet Specialty Products 94 Cardinal Gas Services 94-95 Crestwood Midstream 95 Dominion 96 Energy Transfer Partners 97 EQT Midstream 97-98 Ergon 98 Harvest Pipeline 99 Iroquois Gas Transmission 99-100 Kinder Morgan 100-102 Marcellus GTL 102
MarkWest Energy 102-105 Millennium Pipeline 105 National Fuel Gas 106-107 NiSource/Columbia Pipeline 108-110 Odebrecht 110 Ohio Gathering & Condensate 110 Pinto Energy 111 Regency Energy Partners 111 Shell Chemical 112 Spectra Energy Partners 112-116 Sunoco Logistics 117 UGI Energy Services 118-119 Utica East Ohio 119 Williams Partners 120-124
Natgas Prices: Normal Drop During Summer As the summer wore on the price of natural gas trading at key locations, including the Henry Hub (in Southern Louisiana) and points in the Marcellus, for both the northeast and southwest Marcellus, continued to drop. During the summer much more gas is produced than can be consumed. It is stored in hollowed out salt caverns and depleted oil and gas wells. Over the course of the winter “working gas in storage” is drawn down as residences and businesses use natural gas to heat with. It’s pretty easy to spot the inverse relationship between the price of gas and how much gas is in storage. As gas stocks were drawn down last winter—a particularly brutal winter in the northeast and Midwest—the price of natural gas spiked (just compare the two charts on the right). As gas stocks were replenished over the summer, the price started trending down. The big story continues to be the divergence in the price of natural gas at the benchmark Henry Hub and points in the northeast/Marcellus region. Once upon a time, 20% of the natural gas bought and sold in the U.S. flowed through the Henry Hub delivery point—given it’s location to key supplies from the Gulf of Mexico. Today, 20% of all natural gas produced in the U.S. is being produced in the Marcellus Shale region—an astonishing turnabout in the just the past few years. Therefore, as more infrastructure (pipelines) comes online in the northeast, the balance is shifting. Look for the Henry Hub to continue to be the benchmark against which all other prices are compared—for now. It’s not unthinkable that the Henry Hub may, at some point, be replaced with a new benchmark. The Marcellus Dominion South delivery point is one such candidate.
This section was added to the Databook in 2013. In it we take a look at the number of permits issued by “trimesters” or Jan-Apr (1T), May-Aug (2T) and Sep-Dec (3T)—for each driller active in either the Marcellus and/or Utica Shale. The numbers reflect a permit received by that driller for a distinct, unique well (not pad, but individual well). That is, if the driller applied for and received a permit for any purpose—to begin drilling, to continue drilling, to frack, to re-drill, etc.—that number is included. This chart shows intent—an indication of potential activity. We filter out multiple permits for the same well and show only unique, distinct well locations. So a driller with a “46” for a given period means that driller received at least one permit for 46 different, distinct wells. Use this information to spot trends and get a high-level overview of activity for a particular driller—where they drill, when they drill, and how much they drill.
Pennsylvania Permitting and drilling in Pennsylvania is regulated by the Department of Environmental Protection (DEP). DEP in Turmoil Heading into an election that may see a changing of the guard, the DEP finds itself in turmoil. First, the PA Auditor General, Eugene DePasquale, issued a report over the summer (after an 18-month investigation) that alleges the DEP was “unprepared to effectively administer laws and regulations to protect drinking water and unable to efficiently respond to citizen complaints.” The report reviewed DEP operations from 2009-2012. The DEP responded that many of the shortcomings and problems identified in DePasquale’s report have since been addressed and fixed. Very recently, the Secretary of the DEP, Chris Abruzzo, abruptly resigned as a result of scandal dating back to 2009 (seven years ago) when he worked in the Attorney General’s office. The current Attorney General, Kathleen Kane, revealed that after an extensive review of old records her office found that Abruzzo and others had, while working as state employees, received and forwarded lurid emails. Abruzzo’s resignation came with just a month until election day. His stated reason for resigning was to prevent the situation from being a “distraction” for Gov. Tom Corbett, from whom he works, who faces a very tough re-election campaign. Dana Aunkst, previously Executive Deputy Secretary for Programs at the DEP, was appointed Acting Secretary. Record Fines Shortly before Abruzzo resigned, the DEP handed out it’s biggest (to date) fine in the modern shale drilling era, fining Range Resources $4.15 million for several “first generation” wastewater impoundments in Washington County that had leaked, damaging soil and (according to the DEP) nearby water wells. Shortly after Abruzzo resigned, with Aunkst as Acting Secretary, the agency handed out an even larger fine: $4.5 million given to EQT for a leaking wasterwater impoundment in Tioga County, PA. EQT says the fine came after EQT had pushed back against the agency’s investigation by suing the DEP in Commonwealth Court. The DEP maintains EQT has been uncooperative and unsympathetic to how serious the damage is caused by their leaking impoundment. Look for this to pay out in the coming months. New Marcellus Regulations (Still) Almost Ready The Environmental Quality Board (EQB), the rulemaking body of the PA DEP, conducted a series of meetings to elicit feedback on new Marcellus Shale drilling rules developed by the EQB over the past year and a half. Under the Act 13 law, the EQB was charged with formulating new rules to address well pad construction, water impoundments, pipelines and surface impacts of drilling, among other aspects of shale drilling. A final version of the rules is expected at any time. Severance Tax a Real Possibility One cannot escape the fact that 2014 is an election year in Pennsylvania. Republican Gov. Tom Corbett is in a fight for his political life. The Democrat nominee running against Corbett is York, PA businessman Tom Wolf. Wolf and the Democrat party are beating the drums for a Marcellus Shale severance tax. The Marcellus Shale Coalition—a group of PA’s largest drillers and midstream companies—believe such a tax would have a disastrous effect on the industry in PA, leading to a major slowdown in drilling. Former PA Gov. Tom Ridge (Republican), speaking at a MSC event in September, said he believes a severance tax will happen. Will the Democrats take the governorship and reclaim both the House and Senate in PA? If they do, a severance tax is all but assured. This issue bears close watching.
operator name is followed by two sets of numbers, with the second number in parentheses. Example: Cogan House – 13 (13). The first number - “13” in this case - shows the total number of permits issued. The second number - “(13)” in this case - indicates how many wells the permits were issued for. Usually a single well requires several permits during drilling, to allow the driller to continue to the next stage.
#2 – A red dot indicates where a
well pad is located. Each well pad can have from one to ten wells on it. Typically a pad will contain 2-4 wells. Because of the size of the maps (vastly reduced to show an entire county), sometimes the red dots will be “on top of each other” and sometimes will not be labeled with a driller’s name.
#3 – The boundary of each
county is indicated with a blue outline.
#4 – Major gas pipelines are
indicated with red lines and the name of the pipeline somewhere along the line.
#5 – The location for pipeline
compressor stations is indicated by a green triangle–the name is next to it.
Section V – Silica Sand Primer + Railroad Logistics
SILICA SAND PRIMER + RAILROAD LOGISTICS
Sand and Railroads If you kick around the shale industry for any amount of time, you quickly learn about the exalted position of the lowly grain of sand. Part of the genius in combining horizontal drilling and fracking is the use of sand as a “proppant” to “prop open” the cracks that will allow natural gas to seep out of shale and into the bore hole. And it’s not just any old beach sand that will do. The sand used in fracking has special characteristics. Most of the sand used in fracking throughout the United States comes from either Wisconsin or Minneosta. In the pages that follow, real estate appraiser and expert Mike Coles gives us an important primer to understand the role of sand in the shale development process. Mike also gives readers key insights into how the availability of sand—and the proximity of railroads—are tipoffs to where and when drilling may soon happen. There is a line that connects sand and railroads and valuations of property. Don’t miss Mike’s excellent primer! Speaking of railroads—you need an economical way to move sand from the mine to the general area where it will be used. That’s where railroads come into play. Moving carload after carload of sand and heavy equipment, the shale revolution has almost single handedly revived the short line railroad in the U.S. Mike addresses transloading facilities and the role of railroads in his primer. Finally, ShaleNavigator has provided state maps that show, in tiny gray lines, where there are rail lines—county by county for each state with active or potential Marcellus/Utica drilling. As Mike points out in his primer, not all rail lines are capable of carrying heavy carloads of sand or drilling equipment. However, knowing where there is, or is not, the possibility of a rail line is a start. For those who want to find out which freight rail lines may be operating in your neck of the woods, we refer you to RailServe.com’s Freight Railroads in the Midatlantic Region: http://www.railserve.com/Freight/North_America/Mid-Atlantic/. On that page you will find a comprehensive list of freight railroads including regional railroads, short line railroads, intermodal operations, and switching/terminal railroads. Jim Willis, Editor Marcellus and Utica Shale Databook September 2014
Marcellus/Utica Shale Midstream & Infrastructure Projects – Planned & Under Construction We are excited to bring you an update to what we consider the most comprehensive and authoritative list of midstream and infrastructure projects planned for the Marcellus and Utica Shale region in existence—a staggering 109 major multi-million dollar projects. What follows is largely research from the Marcellus Drilling News (MDN) website which daily chronicles the happenings in northeastern U.S. shale drilling. In addition to MDN, we have added other publicly available sources, including statements made by the companies themselves and from independent news accounts. Please be advised that the information that follows is only as good as the source documents. While we’ve made every effort to verify the information using multiple sources, we could not do so in every case. We cannot guarantee 100% accuracy. Projects change! Some announced projects never materialize, and sometimes the scope of an announced project changes—please bear that in mind as you use this list. For projects with an announced capital expenditure (capex) amount we indicate the amount in the CapEx column. For those projects where we could not find any mention of planned expenditure, we made our own best guess. If you see an amount followed by (est.) that means “estimated” and it is our own estimate based on what competing similar projects have announced as their capex and based on our own experience in closely tracking the industry. We expect some of those estimates will not be accurate—but we thought giving you a general idea (our opinion) would be more useful than leaving it blank. New in this updated list are several extra columns: “Commodity” abbreviated as Comm. shows what substance is flowing into that particular piece of infrastructure. Most of the time it’s methane, or natural gas. Sometimes ethane or other NGLs (natural gas liquids). The “Counties” column gives you an easy way to spot where this particular project is being built. “Stage” accounts for what stage the project is in: is it still in the planning stage/waiting for government approval? Is it under construction? Or, nearly done? This column helps companies evaluate projects. If you work for an engineering firm looking to bid on projects, you will want to look for those still in the planning stage. Restaurants or temp agencies or trucking companies will look for projects under construction (although you may want to also consider those still in the planning stage too). Government agencies watching for final paperwork, new tax revenues to begin, an uptick in jobs, etc. will want to keep an eye on both under construction and projects nearly done. Landscaping companies may also want to watch nearly done for after-construction remediation work. Who This List is For We’ve tabulated this list first and foremost for companies in the shale supply chain. It is a handy guide of projects you may want to consider becoming a supplier for. That is, this is your “opportunities” list. Be aware that any project that shows an in-service date of this year is likely already well underway and almost completed. However, there may still be opportunities for some supply chain companies beyond the initial construction. Midstream and infrastructure companies will find this list indispensable. It is a handy reference to what your competitors are planning. We think you may surprised at the scope and number of major projects on the way in the northeast.
For drillers (“producers” in industry parlance), this list will help answer the vitally important questions of what capabilities will be arriving with new infrastructure buildout. Use the list as a checkpoint against your company’s planned project files. Government officials will also be interested in knowing where and when projects will be heating up—especially those in your geography or region. With a typical investment of $250-$350 million per project, and some in the billions, when an infrastructure project becomes active, it infuses an area with a huge amount of money (and jobs) that ripple throughout that area’s economy. Many projects also bring challenges—increased truck traffic, packed hotel rooms, etc. This list will help you predict what’s coming down the road for your area—and when. Law firms are a big buyer of the Databook, and for good reason. The information in the Databook and particularly in this list will help law firms know when to expect an uptick in demand for their services—and which companies to talk to about those services. Each of these midstream/infrastructure projects contain mountains of legal work—from securing real estate for processing plants and pipeline easements—to labor law, compliance and a host of other legal issues. No law firm with an energy practice should be without the Databook and this list! Industry Abbreviations Used: bbl/d = barrels per day bcf/d = billion cubic feet of gas per day dth/d = dekatherms per day jv = joint venture mmcf/d = million cubic feet of gas per day NGL = natural gas liquids State Abbreviations Used: AL = Alabama CT = Connecticut IN = Indiana KY = Kentucky LA = Louisiana MA = Massachusetts MD = Maryland MI = Michigan MO = Missouri NC = North Carolina NY = New York OH = Ohio PA = Pennsylvania RI = Rhode Island TX = Texas WV = West Virginia