Just curious...

     I am in Liberty township and a few months ago got an offer to buy my royalties for 1500 to 1800 per acre, but they would do a more in-depth look if I was serious which "mite change the numbers" slightly....even tho I am not drilled or receiving any royalties ..talked to a landsman rite b4 I contacted them and he advised caution as there will be "significant" activity in my area in the "near future"....how about it, anybody else get an offer or hear anything or see any activity here in Tioga Co. ?

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According to the State:

Gasiewski, Matthew 

9:57 AM (1 minute ago)
to me, EP-eFACTS

One is the well pad and the other is the actual well itself.

 

Thanks

-Matt

 

Matthew Gasiewski | Business Analyst 2
Department of Environmental Protection | Bureau of Information Technology
Rachel Carson State Office Building
400 Market Street | Harrisburg, PA 17101

The greater the risk, the greater the reward. You’ve heard that bromide multiple times in your life. And for good reason–it’s true. Our entire stock and financial markets are based on that truism. Gas traders, those who trade futures contracts for natural gas, are like any other traders–they big price swings. It is when the price of the underlying commodity swings that (i.e. when risk rises) that traders make the most money. Don’t know if you’ve noticed, but the price of natural gas hasn’t really swung much at all over the past few years–at least at the Henry Hub, which is where most contracts are pegged. Why? We have a “glut” of natural gas. As soon as the price creeps up a bit, more gas floods the market. But as we’ve written many times in the past, there isn’t just “one price” when it comes to natural gas. There are hundreds of prices–gas is traded at hundreds of different trading points along major pipelines across North America. While the price of gas is steady and doesn’t change much (i.e. no real opportunity to profit from risk) at Henry Hub, such is not the case at all trading hubs. Particularly in the Marcellus/Utica. In our region, prices have been much lower than the Henry Hub–and much more volatile. Wider swings up and down. Now that Rover is flowing, prices are going up in some areas of our region. Other pipelines have a similar effect. So gas traders are beginning to leave contracts pegged to Henry Hub behind and trying their hand at contracts pegged at other trading hubs–some in our region, some in other regions. Bloomberg gives us the low down on a trend that has the power to affect the price of natural gas across the country–particularly in our region…

Profit has become so much harder to come by in the huge U.S. market for natural gas that some traders are buying and selling in lesser-known local pipeline hubs, where bigger risks offer the promise of better rewards.

Futures contracts traded in New York — a benchmark for U.S. prices — are seeing fewer of the big price swings that traders crave because of a prolonged domestic glut. But that isn’t the case in regional markets like Pennsylvania, Ohio or west Texas, where Mercuria Energy America Inc., Vitol Inc. and Trafigura Trading LLC are among those increasing bets on next-day gas deliveries, data from the Federal Energy Regulatory Commission show.

As gas production surged in remote shale formations in recent years, pipelines were built to carry those supplies to high-demand areas and boost shipments to Canada, Mexico and coastal plants that converted the gas to liquid for export overseas. While New York Mercantile Exchange futures remain the dominant vehicle for U.S. trading, gas flows have shifted, opening new markets. Volumes at more than 200 local hubs served by the Intercontinental Exchange Inc. have jumped 17 percent in the first half of 2017 from a year earlier.

“The shift in terms of just where the supply of gas is coming from the last five years has been dramatic,” said David Caffery, vice president of wholesale gas supply for Newark, New Jersey-based utility owner Public Service Enterprise Group Inc., which now gets almost all its gas from nearby Marcellus and Utica shale fields in the Northeast rather than from the Gulf of Mexico like it used to. “It’s completely changed the way we buy gas.”

Disruptive Influence

The move to local markets reflects the disruptive influence of new drilling techniques that unleashed prolific supplies of low-cost gas in shale basins from New York to North Dakota to Texas. Domestic output has surged almost 50 percent since 2006, government data show. With more new sources of supply, big utilities that use the fuel to heat homes and generate electricity have been forced to alter their trading plans and reverse pipeline flows.

“This is the largest upheaval since the market was deregulated in the 1980s,” said Stephen Schork, president of Schork Group Inc., a gas industry consultant in Villanova, Pennsylvania.

While the bulk of trading at local gas hubs still comes from utilities and others taking physical delivery of the fuel, speculators are grabbing a bigger share. Last year, 10 merchant traders represented almost 8 percent of the gas traded, up from 6.5 percent in 2015 and more than double 2012, according to Federal Energy Regulatory Commission filings.

“You can make money regionally because there are these inefficiencies that traders can capitalize on,” said Peter Henry, a New York-based managing director for H.W. Anderson Ltd., a recruiter specializing in commodity trading jobs. “The infrastructure isn’t fully built out, and you are seeing Northeast bottlenecks that can be identified and capitalized on.”

Exelon Corp., the largest U.S. competitive energy provider, expects the increased trading at local hubs will help improve market-price transparency for producers and consumers, Kelly Biemer, a Baltimore-based spokeswoman, said by email.

Spokeswomen for Trafigura and Vitol declined to comment as did a spokesman for Geneva-based Mercuria.

To read more on the plight of natural-gas markets, click here.

One of this year’s closely-watched markets is Pennsylvania, where the startup of Energy Transfer Partner LP’s Rover pipeline had been expected to boost prices for supplies in the Marcellus shale play, the biggest U.S. gas reservoir. The gas had been selling at a discount because it couldn’t be delivered into major Midwest markets. But Rover was delayed, and Goldman Sachs Group Inc. reported losing money on its bet that prices would rise.

Another popular hub is Dominion South Point, a benchmark for Marcellus and Utica gas in Pennsylvania, Ohio and West Virginia. Dominion South Point gas started trading at deeper discounts as output in Appalachia grew faster than pipelines could be built. Prices in the region fell to a record low of 29 cents per million British thermal units in September 2016 before jumping to $3.42 within eight weeks.

The 100-day volatility for Dominion South is more than six times greater than the New York benchmark based on Louisiana’s Henry Hub, a major pipeline intersection on the Gulf Coast. The day prices fell to a record low on the local market, volume jumped to a 12-week high, data compiled by Bloomberg show. Spot-trading volume at Henry Hub, meanwhile, has been hovering at the lowest levels in data going back to 2001. Gas futures in New York were down 1.5 percent at $3.016 per million British thermal units at 2:05 p.m.

In the South, record U.S. gas flows through pipelines into Mexico are making Texas hubs more expensive relative to Henry Hub. But when a massive earthquake on Sept. 19 slashed gas demand from Mexico’s power grid, gas for next-day delivery at the Waha hub near Houston tumbled 7.3 percent over the following three days.”

Ten percent

“There is a lot of repositioning and hedging around new infrastructure announcements or delays” as increased shipments give local hubs “their own interesting supply and demand volatility,” said J.C. Kneale, vice president of North American power, natural gas and liquids for Intercontinental Exchange in Houston.

Regional hubs are becoming a bigger part of the U.S. gas market, based on trading on exchanges run by ICE, CME Group Inc.’s Nymex and Nasdaq Inc. They now account for about 10 percent of all trades, according to data compiled by ICE.

“The Henry Hub isn’t going anywhere as a benchmark, but certainly from a regional standpoint, what we have seen in the past year and what we will see in the next couple of years is growth in transportation infrastructure as these markets mature,” said Schork, the industry consultant.

With more action on local markets, utilities are turning some of their regional gas traders into specialists and hiring more people to beef up their presence at individual hubs, said Christopher Melillo, managing partner at Kaye/Bassman International Corp., which recruits energy traders. Instead of focusing on the entire Southeast or Midwest, each trader might trade just one pipeline interconnect in Alabama or a Michigan city, he said.

“It’s granularity out of necessity,” Melillo said. “It creates a more predictable level of revenue and income.”*

MDN’s thoughts: Isn’t it interesting how traders can affect the price of gas in our own neck of the woods? The financial markets are fascinating! We have two recommendations: (1) NGI (Natural Gas Intelligence) publishes a huge wall map, and an electronic version of that map, detailing where 138 trading hubs are located (see our post here: PDF Map Details M-U Shale Plays, Pipelines and More – See It Now). If you want to know where these markets exist, get a copy of the map. (2) NGI’s main business is as a price reporting authority (PRA)–fancy language which means when buyers and sellers complete a transaction at those 138 trading hubs, many of them file the trade information with NGI–each day! NGI pools that information and creates price information data–the high bid, low bid, average price paid, etc. At each of those trading points, each day, week and month. NGI is (in our humble opinion) the best PRA in the business. They do it right, and they cost less than others. If you want more information about how to subscribe to NGI’s pricing service, visit this page.

*Bloomberg (Sep 27, 2017) – Profit-Hungry Traders Prowl Local Gas Hubs

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Yesterday was the first day of the event. The crowd was definitely smaller than last year when then-candidate Trump spoke to attendees. However, Day One saw a number of heavy-hitting speakers, including Secretary of Labor Alexander Acosta, Deputy Secretary of Energy Dan Brouillette, XTO Energy President Sara Ortwein, Chevron Appalachia President Stacey Olson, and People’s Natural Gas CEO Morgan O’Brien. Marcellus Shale Coalition President Dave Spigelmyer served as master of ceremonies and seemed to be everywhere-present during the event (how does he DO that?). From the opening session to the exhibit floor to attending the breakout sessions, MDN editor Jim Willis made the rounds–and took lots of notes. In the coming days he will write up those notes and share them. For now, we have links and extracts of articles from other publications attending and reporting on this year’s Shale Insight…

A good synopsis from the Pittsburgh Business Times, covering the urgent issue of pipelines:

Two key leaders in the natural gas industry called for a faster pace of pipeline construction to bolster Appalachia’s energy industry during the first day of a shale conference in Pittsburgh.

“We must continue to invest in the necessary infrastructure to transport oil and natural gas to markets more quickly,” said XTO Energy President Sara Ortwein.

For the shale industry, putting enough pipelines into operation to move the Marcellus and Utica production from the wells to markets is critical. There isn’t as much demand for natural gas within Appalachia as there is gas being produced; that’s limiting the markets for Marcellus and Utica shale gas as well as leading to discounts for the gas that is sold.

Producers would get more for natural gas if they were able to send more of it via pipeline to the Gulf Coast, Northeast and other energy-hungry markets as well as shipping it for export. The challenge was one of the big topics of conversation at Wednesday’s Shale Insight Conference in downtown Pittsburgh.

While a number of pipelines are either in construction or on the drawing boards, some of them are in the midst of the regulatory process or caught up in litigation by environmentalists or residents. But Ortwein, who as XTO Energy’s president runs the natural gas business of ExxonMobil (NYSE: XOM), told the Shale Insight Conference that the impacts of delays in pipeline construction are leading to costs for electricity and natural gas that are much higher than the national average.

“The Northeast has been particularly hard hit by pipeline delays, and consumers and businesses are paying high prices for natural gas despite abundant domestic supplies,” Ortwein said. Residential customers in Northeast states, including Pennsylvania, pay 29 percent more than the U.S. average for natural gas and 44 percent more for electricity, Ortwein said. Industrial users pay twice the national average for natural gas and 62 percent more for electricity, she said.

“Pipeline bottlenecks are preventing the Northeast from enjoying the benefits of natural gas,” Ortwein said.

Pipelines to carry Marcellus and Utica natural gas to the Northeast would relieve the issue, she said.

Chevron Appalachia President Stacey Olson in a separate speech also addressed this issue, saying that Pennsylvania’s natural gas is sold at a significant discount to what other producers in other areas of the country receive.

“These discounts have forced Pennsylvania producers to produce at little to no return or not produce at all,” Olson said. (1)

From the Pittsburgh Tribune-Review, covering the opening general session with its “mini” keynotes:

Pennsylvania is realizing only a fraction of its economic potential as an energy producer against a backdrop of oversupply and continuing low prices, Chevron Appalachia President Stacey Olson told the Shale Insight 2017 Conference Wednesday.

Olson was one of three “mini keynote” speakers to address the opening of the large annual conference for leaders in the oil and gas industry in Ohio, Pennsylvania and West Virginia — the three states of the Marcellus and Utica shale plays.

While Pennsylvania is the second-largest producer of natural gas in the United States, after Texas, Marcellus gas is being sold at a significant discount to other markets, resulting in little or no return for energy producers, Olson said.

“Chevron Appalachia has been operating at a minimum activity level for two years,” she said.

Olson said there is “not nearly enough demand” and not enough pipeline capacity for Pennsylvania to reap the full economic benefits of the Marcellus shale boom.

“Key pipelines are needed now,” she said.

Olson cited the new “PA Forge the Future” study, commissioned by Chevron and Peoples Gas, in outlining three “key development strategies” to improve the state’s situation.

The study said Pennsylvania needs to increase its gas-fired power and heating capacity in order to move 500,000 residential customers from oil to natural gas. One such power plant, the Tenaska Westmoreland Generating Station, is being built in South Huntingdon and is expected to come online in 2018.

The study also called for the creation of “competitive industry clusters” that enable growth in the petrochemical, manufacturing and data sectors.

Finally, Pennsylvania needs to expedite the expansion of the pipeline infrastructure, she said. Two pipelines — the Mariner East 2 and the Atlantic Sunrise — are under construction that will take Marcellus gas to domestic and international markets.

Olson predicted a $60 billion increase in the state’s annual gross domestic product, the creation of 100,000 jobs and the development of three to five more ethane cracker plants if the study’s strategies are followed.

Also addressing the conference Wednesday were U.S. Labor Secretary R. Alexander Acosta, Deputy Energy Secretary Dan Brouillette and Peoples CEO Morgan O’Brien. (2)

Secretary of Labor Acosta was in town not only for Shale Insight, but also to tour the Carpenters’ Union Training Center. Acosta said during his presentation that the nation needs to expand the apprenticeship program used by carpenters and other trades–to all jobs:

U.S. Secretary of Labor Alexander Acosta was in Pittsburgh Wednesday morning to speak at the Shale Insight Conference and tour the Carpenters’ Union Training Center.

Acosta, who was confirmed as Secretary of Labor in April, mentioned that the Trump administration is passionate about making sure the American workforce has the skills they need to succeed in their jobs.

“The drillers and the miners and the growers, the makers and the builders, the movers and the drivers are individuals that make all that we have possible,” Acosta said at the shale conference, adding these people are often overlooked.

There are more jobs in Pittsburgh than there are qualified people to fill them, according to Acosta.

“Across industries we have a mismatch between the skills the workplace demands and the skills our educational institutions provide our workforce,” he said. “The apprenticeship model offers demand-driven education, providing skills that lead to family-sustaining jobs.”

The Carpenters’ Union Training Center aims to bridge the gap between what’s learned in school and the technical skills needed for available jobs in the industry. Pittsburgh’s training center is connected to ten others in the region through the Keystone + Mountain + Lakes Regional Council of Carpenters, currently preparing 1,800 apprentices in total for a carpentry career.

“[The training center] provides career training, a career ladder and provides access to great jobs,” Acosta said while touring the facility. “We need more places just like this.”

He said the Trump administration wants to see apprenticeship programs expanded into other fields, mentioning pharmaceuticals as a possible option.

“The apprenticeship model can work in all trades, and this is an example of it being done just the right way,” he said.

Acosta commended the Carpenters’ Union Training Center because it uses no federal money. He said the funding comes from a joint effort between industry and the union, calling it “a local, organic process.” (3)

Another report on Acosta’s talk:

During brief remarks Wednesday, U.S. Labor Secretary Alexander Acosta said President Donald Trump “is committed to building our nation with American products made by American workers.”

He said while 1.2 million jobs were created since the beginning of the year and the unemployment rate declined during that time to 4.5 percent, there are still 6.2 million jobs open. He added the administration wants to close the gap between the job openings and qualified workers.

“The Department of Labor wants to bring together labor, management and nonprofits to design high-quality apprenticeships” that would fit the various jobs in the marketplace, Acosta said.

The search for qualified workers is critical if petrochemical and plastics manufacturers are attracted to the region because of cheap raw materials.

During a panel moderated by Dave Spigelmyer, president of the Marcellus Shale Coaliation, Perc Pineda, chief economist for the Plastics Industry Association, said low energy prices created by the shale revolution are a key factor for growth in the plastics industry, which continues to create innovative products.

“Are we benefiting from low energy prices? The answer is a resounding yes,” Pineda said. (4)

Finally, from one of the breakout sessions, addressing the issue of pipeline disputes and litigation:

As construction of the Mariner East 2 pipeline continues across Pennsylvania, oil and gas industry insiders attending this week’s Shale Insight Conference in Pittsburgh say they often feel beleaguered by government regulations, local opposition and security issues.

“The days have passed when we can be dismissive of (environmental) concerns,” said Allen Fore, vice president of public affairs for pipeline developer Kinder Morgan.

Fore spoke during Wednesday’s panel discussion on “Pipeline Development Disputes: Where is the Litigation Taking Us?” He said one way the oil and gas industry can help itself is by recognizing that project opponents sometimes have legitimate concerns.

“We should be self-policing and looking at areas of improvement for our projects,” he said.

Fore said oil and gas companies need to do a better job of telling their side of the story on contentious issues such as eminent domain. Community opposition to pipeline projects often coalesces around such issues.

Fore said only 5 percent of Kinder Morgan’s pipeline projects require the use of eminent domain proceedings, which compensate property owners for the use of their land at “fair market value.” (5)

Click the links below to read the full articles for each one. Above are just extracts from larger articles.

(1) Pittsburgh (PA) Business Times (Sep 27, 2017) – Shale CEOs: More pipelines needed in Appalachia, fast

(2) Pittsburgh (PA) Tribune-Review (Sep 27, 2017) – Pennsylvania not fully capitalizing on its Marcellus shale, energy ...

(3) Pittsburgh (PA) WESA Public Radio (Sep 27, 2017) – U.S. Labor Secretary Acosta Visits Pittsburgh To Promote Apprentice...

(4) Washington (PA) Observer-Reporter (Sep 27, 2017) – Shale Insight conference puts focus on downstream opportunities in ...

(5) Pittsburgh (PA) Tribune-Review (Sep 27, 2017) – Shale Insight 2017: Gas industry officials contend with protests, s...

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below are highlights from other news source from Day Two of the event. Unfortunately Jim had to leave before the closing keynote, given by former Trump White House Press Secretary Sean Spicer. But others were there to hear what Spicer had to say. Day Two began with a focus on the Shell ethane cracker. Members of the Shell team were on hand to describe how this critical project affects the region, and where it fits in the Marcellus/Utica landscape. One of the Shell team members said the skyline at the Beaver County site will change dramatically over the next 12 months as the buildings housing the various components are built. It was a fascinating talk with lots of information. Below is a roundup from Day Two…

Kicking off the morning session were several speakers and a panel covering the Shell ethane cracker. First up, from the Pittsburgh Business Times:

Beaver County next year should start seeing more tangible construction of the $6 billion ethane cracker in Potter Township, but Shell Appalachia is already pushing hard on the work that is happening below the surface of the site.

“Next year we’ll start (construction of the major pieces of the plant) … and suddenly the whole skyline of the site will change dramatically,” said Todd Whittemore, global technology manager for polyethylene, Shell Global Solutions US during a session at Thursday’s Shale Insight conference in downtown Pittsburgh.

That doesn’t mean that there hasn’t been a lot of work going on at the site. There’s been the demolition of the Horsehead Holding zinc smelter, environmental remediation, a moving of a piece of a state highway, and a complete transformation of the site. And that’s not all, Shell officials said.

“What you can’t see is all the work that is going on underground,” Whittemore said.

That includes the construction of piping, sewers and the foundation of the buildings that will be going up starting in 2018.

“It’s a massive amount of civil work,” Whittemore said.

Shell provided a video tour of the expected layout of the petrochemical plant, which will take ethane from the Marcellus and Utica shales and turn it into the building blocks of many types of plastics. It showed video renderings of three gas turbine generators, electrical systems and other key buildings on the site, including a cracker that will include 25 tons of steel, 95 miles of pipe and parts of the structure that will reach 300 feet to 900 feet into the Beaver County sky.

Shell (NYSE: RDS.A) also reviewed the key environmental permits that it has received over the course of the last several years for work on the site.

“We’re getting fairly close to having all of our main permits,” said Jim Sewell, environmental manager for Shell Appalachia.

Another major topic: The possibilities for plastics manufacturing companies to locate in Pennsylvania, Ohio or West Virginia because of Shell’s ethane cracker opening up a whole new petrochemical industry. That could include further ethane crackers like the one that Shell is building in Beaver County and that a Thai company, PTT Global, is considering in Belmont County, Ohio. But there are opportunities for plastics manufacturers that will take the pellets that will be produced by the Shell plant and convert them into consumer and industrial products.

“The more converters are in the region, the better,” Whittemore said. “We’re collecting the ethane in the region, and we’d like to keep the ethane in the region too.”

David Ruppersberger, president of the Pittsburgh Regional Alliance, said that these plastic converter plants won’t need the same type of real estate and riverfront access that Shell and other cracker plants need. The plastics converters need only about 2,500 acres near a railspur and a highway and about 18 months to ramp up; since there’s no pellets being produced right now, any plastics manufacturers that would locate in Appalachia due to the Shell plant are still in the future.

“Sometime in the next two or three years we’ll start to see plastics manufacturing,” Ruppersberger said.

But he also cautioned that it wouldn’t necessarily be a huge wave of plastics manufacturing because the companies will have to decide whether it’s best for business to be near the ethane supply in Appalachia or nearer their end users/customers.

State Rep. Jim Christiana, R-Beaver County, said that the region has already reaped economic benefits from Shell’s decision to build in Potter Township.

“We must never take our eye off the ball,” Christiana said. (1)

From the WV State Journal:

A new petrochemical complex under construction by Shell Chemical Appalachia, LLC in western Pennsylvania aims to bring back manufacturing to the region.

Such was the subject kicking off the second and final day of the 2017 Shale Insight conference in Pittsburgh Thursday. The facility, being built over the grounds of an old smelter in Beaver County, is a planned an ethylene ‘cracker’ using gas from the Marcellus and Utica shale that will produce 1.6 million tonnes of polyethylene per year.

Todd Whittemore, global tech manager Shell Global Solutions, said the chemical reactions at this complex will transform a gas to a powder to solid polyethylene pellets which can then be sold to manufacture film, piping and even plastic bottles among other things. Two byproducts will be produced: methane which will be recycled to heat the facility’s furnaces and hydrogen which will also be sold.

While most polyethylene producing plants move their goods by rail, Whittemore said this one will also have loading silos for trucks to enable wider and cheaper distribution for clients. Extra access lanes near the site have are also a factor to allow more goods and personnel to move in and out.

Six thousand jobs, he said, will be created by this center in construction work while the plant will offer 600 permanent, family-sustaining jobs. However, for those 600 jobs inside the fence, three to four times that number of jobs is expected to be created outside in the form of manufacturing, transportation, support, etc.

David Ruppersberger, president of the Pittsburgh Regional Alliance, said the complex will be a more reliable and cheaper supply source than those along the Gulf Coast particularly in view of the recent hurricanes.

“Recent events in the Gulf Coast have highlighted how important it is to have an alternate source,” he said. “There are definitely advantages to being local.”

Ruppersberger said the ethylene cracker can also pave the way for several rings of downstream infrastructure development. Among these, he said, is the creation of underground storage facilities for liquid natural gas, something researchers from West Virginia University have been leading the way on.

Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association (WVONGO), opened the second the day of the conference. She noted that the ethylene cracker complex is a regional initiative and expects to pay for the Mountain State to come in the form of downstream development.

2017 marked the seventh Shale Insight convention. Blankenship said the gathering was a great chance for companies in West Virginia, Ohio and Pennsylvania to network, share technologies and learn from each other’s experiences.

“It’s an opportunity for us all to learn from each other’s stories, which are very similar,” she said.

Maribeth Anderson, president of WVONGA’s board of directors, reminded the industry representatives that there are still obstacles going forth in tapping the region’s shale wealth in the form of burdensome regulations by states and severance taxes. (2)

From the Washington (PA) Observer-Reporter:

Within the next two to three years, the region should start to see additional plastics manufacturers arriving in the region to take advantage of cheap polyethylene pellets being produced here, an economic development official said Thursday.

Pittsburgh Regional Alliance President David Ruppersberger made the comment while participating in a panel discussion during the second day of the annual Shale Insight conference at the David L. Lawrence Convention Center.

The conference is sponsored by the Marcellus Shale Coalition, Ohio Oil and Gas Association and West Virginia Oil & Natural Gas Association.

The three other participants on the panel were Shell executives involved with the construction of the company’s ethane cracker plant in Beaver County, which in two to three years will begin producing about 1.6 million tons of polyethylene pellets a year for customers in a 700-mile radius of the plant.

Todd Whittemore, a chemical engineer who is Shell’s global technology manager for polyethylene, told the audience of a couple hundred attendees that the product has an array of uses for the companies that purchase it, including plastic film, packaging and pipes.

The $6 billion cracker plant near Monaca, which will require 6,000 construction workers and will hire 600 permanent workers, is one of the largest economic development projects in the United States.

While Shell has spent the past few years remediating and prepping the site of the former Horsehead zinc smelting site in Center Township, the actual construction of the cracker plant is now under way.

Jim Sewell, who works in government relations for Shell, described the various permits the company has received along the way both for remediation and air and water quality compliance. He said Shell is now working on a permit for a water treatment plant that also will serve Center Township.

“We’re getting fairly close to having all of our permits in place,” he said.

Whittemore explained that up until now, workers have been doing “massive amounts of civil (engineering) work,” including underground piping, sewerage and foundations.

In 2018, he said, the actual equipment for the plant will be delivered via the Ohio River, with piping, instrumentation, painting and insulation to take place.

“There will be big skyline changes next year,” Whittemore said, adding that Shell has not constructed a new site in the U.S. since the 1960s. He said part of the prep work included the construction of two docks along the Ohio River for the delivery of the cracking equipment. (3)

The closing keynote speaker was Sean Spicer. From CBS’ KDKA Channel 2:

Former White House press secretary Sean Spicer was in town Thursday to give a presentation at the Shale Insight Conference.

Spicer gave the final keynote speech to the Marcellus Shale Conference, and he was upbeat about natural gas.

“While I may not be in the White House anymore, I remain unbelievably confident that this industry has a huge friend in the Oval Office and throughout this administration,” he said.

Of course, Spicer is well aware that his image has been shaped by actress Melissa McCarthy’s portrayal on “Saturday Night Live.”

“[I’m going to] step away from the podium for a second. It’s nice to leave it in a lot of ways,” Spicer said. Off the crowd’s laughter, he added, “Most of you get that.”

This was one of Spicer’s very first paid speeches to an organization, and most in the audience thought he did quite well. He spoke for nearly an hour without notes or a teleprompter. (4)

From Big Green mouthpiece, StateImpact Pennsylvania:

Former White House Press Secretary Sean Spicer told a natural gas industry conference in Pittsburgh that oil and gas drillers had a “huge friend in the Oval Office”. That huge friend is President Donald Trump, whose administration has targeted dozens of regulations that effect oil and gas drilling, a push which Spicer said was helping grow the economy.Spicer pointed to a report from the Commerce Department that says 2nd quarter growth in the U.S. GDP was at 3.1 percent, the highest rate in 2 years.
“It’s not that the government did it. It’s that you did it,” he told the crowd of oil and gas industry executives at the 2017 Shale Insight Conference, at the David L. Lawrence Convention Center. “If we can get government out of the way in a smart way, industries like yours (can) make smart investments, make innovative technologies that bring back say, the manufacturing sector.”

Among the dozens of regulations the Trump administration has gone after is the Clean Power Plan, an Obama-era rule aimed at lowering the amount of greenhouse gases from the electricity sector, and which favored renewable energy over coal.

Spicer left the White House in August, and signed with an agency to become a paid public speaker. A spokesman for the Marcellus Shale Coalition, which sponsors the event, said Spicer was paid for his speech, but declined to disclose terms of his contract.

Spicer praised the oil and gas industry, and said it wasn’t just good for domestic policy, but also for diplomacy. He singled out a deal in which the U.S. is selling natural gas to Poland.

“By Poland buying our natural gas, it’s a check on Russia. If you are concerned about the Russian influence overseas, suddenly now you have Poland and other places throughout that region buying U.S. gas.”

Spicer said it was an honor working as White House press secretary and that he was “eternally grateful” to President Trump for the opportunity.

Spicer spoke at length and with humor about his foibles as press secretary, the impersonations of him on SNL, and his adversarial relationship with the White House press corps. (5)

(1) Pittsburgh (PA) Business Times (Sep 28, 2017) – Countdown to the Cracker: ‘Whole skyline of the site will change dr...

(2) Clarksburg (WV) The State Journal (Sep 28, 2017) – Planner Pa. complex to bring jobs, manufacturing to Appalachia

(3) Washington (PA) Observer-Reporter (Sep 28, 2017) – Executive: Shell cracker will ‘change the skyline’ next year

(4) Pittsburgh (PA) KDKA Channel 2 (Sep 28, 2017) – Natural Gas Leaders Optimistic About Industry’s Future At Annual Co...

(5) Harrisburg & Philadelphia (PA) StateImpact Pennsylvania (Sep 28, 2017) – Spicer says rolling back regulations helping economy

The greater the risk, the greater the reward. You’ve heard that bromide multiple times in your life. And for good reason–it’s true. Our entire stock and financial markets are based on that truism. Gas traders, those who trade futures contracts for natural gas, are like any other traders–they big price swings. It is when the price of the underlying commodity swings that (i.e. when risk rises) that traders make the most money. Don’t know if you’ve noticed, but the price of natural gas hasn’t really swung much at all over the past few years–at least at the Henry Hub, which is where most contracts are pegged. Why? We have a “glut” of natural gas. As soon as the price creeps up a bit, more gas floods the market. But as we’ve written many times in the past, there isn’t just “one price” when it comes to natural gas. There are hundreds of prices–gas is traded at hundreds of different trading points along major pipelines across North America. While the price of gas is steady and doesn’t change much (i.e. no real opportunity to profit from risk) at Henry Hub, such is not the case at all trading hubs. Particularly in the Marcellus/Utica. In our region, prices have been much lower than the Henry Hub–and much more volatile. Wider swings up and down. Now that Rover is flowing, prices are going up in some areas of our region. Other pipelines have a similar effect. So gas traders are beginning to leave contracts pegged to Henry Hub behind and trying their hand at contracts pegged at other trading hubs–some in our region, some in other regions. Bloomberg gives us the low down on a trend that has the power to affect the price of natural gas across the country–particularly in our region…

Profit has become so much harder to come by in the huge U.S. market for natural gas that some traders are buying and selling in lesser-known local pipeline hubs, where bigger risks offer the promise of better rewards.

Futures contracts traded in New York — a benchmark for U.S. prices — are seeing fewer of the big price swings that traders crave because of a prolonged domestic glut. But that isn’t the case in regional markets like Pennsylvania, Ohio or west Texas, where Mercuria Energy America Inc., Vitol Inc. and Trafigura Trading LLC are among those increasing bets on next-day gas deliveries, data from the Federal Energy Regulatory Commission show.

As gas production surged in remote shale formations in recent years, pipelines were built to carry those supplies to high-demand areas and boost shipments to Canada, Mexico and coastal plants that converted the gas to liquid for export overseas. While New York Mercantile Exchange futures remain the dominant vehicle for U.S. trading, gas flows have shifted, opening new markets. Volumes at more than 200 local hubs served by the Intercontinental Exchange Inc. have jumped 17 percent in the first half of 2017 from a year earlier.

“The shift in terms of just where the supply of gas is coming from the last five years has been dramatic,” said David Caffery, vice president of wholesale gas supply for Newark, New Jersey-based utility owner Public Service Enterprise Group Inc., which now gets almost all its gas from nearby Marcellus and Utica shale fields in the Northeast rather than from the Gulf of Mexico like it used to. “It’s completely changed the way we buy gas.”

Disruptive Influence

The move to local markets reflects the disruptive influence of new drilling techniques that unleashed prolific supplies of low-cost gas in shale basins from New York to North Dakota to Texas. Domestic output has surged almost 50 percent since 2006, government data show. With more new sources of supply, big utilities that use the fuel to heat homes and generate electricity have been forced to alter their trading plans and reverse pipeline flows.

“This is the largest upheaval since the market was deregulated in the 1980s,” said Stephen Schork, president of Schork Group Inc., a gas industry consultant in Villanova, Pennsylvania.

While the bulk of trading at local gas hubs still comes from utilities and others taking physical delivery of the fuel, speculators are grabbing a bigger share. Last year, 10 merchant traders represented almost 8 percent of the gas traded, up from 6.5 percent in 2015 and more than double 2012, according to Federal Energy Regulatory Commission filings.

“You can make money regionally because there are these inefficiencies that traders can capitalize on,” said Peter Henry, a New York-based managing director for H.W. Anderson Ltd., a recruiter specializing in commodity trading jobs. “The infrastructure isn’t fully built out, and you are seeing Northeast bottlenecks that can be identified and capitalized on.”

Exelon Corp., the largest U.S. competitive energy provider, expects the increased trading at local hubs will help improve market-price transparency for producers and consumers, Kelly Biemer, a Baltimore-based spokeswoman, said by email.

Spokeswomen for Trafigura and Vitol declined to comment as did a spokesman for Geneva-based Mercuria.

To read more on the plight of natural-gas markets, click here.

One of this year’s closely-watched markets is Pennsylvania, where the startup of Energy Transfer Partner LP’s Rover pipeline had been expected to boost prices for supplies in the Marcellus shale play, the biggest U.S. gas reservoir. The gas had been selling at a discount because it couldn’t be delivered into major Midwest markets. But Rover was delayed, and Goldman Sachs Group Inc. reported losing money on its bet that prices would rise.

Another popular hub is Dominion South Point, a benchmark for Marcellus and Utica gas in Pennsylvania, Ohio and West Virginia. Dominion South Point gas started trading at deeper discounts as output in Appalachia grew faster than pipelines could be built. Prices in the region fell to a record low of 29 cents per million British thermal units in September 2016 before jumping to $3.42 within eight weeks.

The 100-day volatility for Dominion South is more than six times greater than the New York benchmark based on Louisiana’s Henry Hub, a major pipeline intersection on the Gulf Coast. The day prices fell to a record low on the local market, volume jumped to a 12-week high, data compiled by Bloomberg show. Spot-trading volume at Henry Hub, meanwhile, has been hovering at the lowest levels in data going back to 2001. Gas futures in New York were down 1.5 percent at $3.016 per million British thermal units at 2:05 p.m.

In the South, record U.S. gas flows through pipelines into Mexico are making Texas hubs more expensive relative to Henry Hub. But when a massive earthquake on Sept. 19 slashed gas demand from Mexico’s power grid, gas for next-day delivery at the Waha hub near Houston tumbled 7.3 percent over the following three days.”

Ten percent

“There is a lot of repositioning and hedging around new infrastructure announcements or delays” as increased shipments give local hubs “their own interesting supply and demand volatility,” said J.C. Kneale, vice president of North American power, natural gas and liquids for Intercontinental Exchange in Houston.

Regional hubs are becoming a bigger part of the U.S. gas market, based on trading on exchanges run by ICE, CME Group Inc.’s Nymex and Nasdaq Inc. They now account for about 10 percent of all trades, according to data compiled by ICE.

“The Henry Hub isn’t going anywhere as a benchmark, but certainly from a regional standpoint, what we have seen in the past year and what we will see in the next couple of years is growth in transportation infrastructure as these markets mature,” said Schork, the industry consultant.

With more action on local markets, utilities are turning some of their regional gas traders into specialists and hiring more people to beef up their presence at individual hubs, said Christopher Melillo, managing partner at Kaye/Bassman International Corp., which recruits energy traders. Instead of focusing on the entire Southeast or Midwest, each trader might trade just one pipeline interconnect in Alabama or a Michigan city, he said.

“It’s granularity out of necessity,” Melillo said. “It creates a more predictable level of revenue and income.”*

MDN’s thoughts: Isn’t it interesting how traders can affect the price of gas in our own neck of the woods? The financial markets are fascinating! We have two recommendations: (1) NGI (Natural Gas Intelligence) publishes a huge wall map, and an electronic version of that map, detailing where 138 trading hubs are located (see our post here: PDF Map Details M-U Shale Plays, Pipelines and More – See It Now). If you want to know where these markets exist, get a copy of the map. (2) NGI’s main business is as a price reporting authority (PRA)–fancy language which means when buyers and sellers complete a transaction at those 138 trading hubs, many of them file the trade information with NGI–each day! NGI pools that information and creates price information data–the high bid, low bid, average price paid, etc. At each of those trading points, each day, week and month. NGI is (in our humble opinion) the best PRA in the business. They do it right, and they cost less than others. If you want more information about how to subscribe to NGI’s pricing service, visit this page.

*Bloomberg (Sep 27, 2017) – Profit-Hungry Traders Prowl Local Gas Hubs

September production numbers are out for the Kennedy pad.  This should be the first full month of production for the majority of the wells on this pad.  Are any of the group members able to comment as to how these look in regards to other wells in Tioga County? 

Also, as fas as I am aware Tioga county only has dry gas.  Does anyone else's royalty statements come in with the designation wet gas?

1H 30 DAYS 6681 PER DAY
3H 29 DAYS 7220
5H 20 DAYS 7026
7H 22 DAYS 7312
9H  22 DAYS  6990
2H 30 9219
4H 30 8376
6H 30 7522

Here are Delmar wells

BUCKWALTER B 429 2H $ 4,461.31 $ 54,713.34 ATW 18,117 Mcf


BUCKWALTER B 429 5H $ 2,246.29 $ 27,548.44 ATW 9,122 Mcf


BUCKWALTER B 429 6H $ 1,373.34 $ 16,842.54 ATW 5,577 Mcf


BUTLER 127 1H $ 2,608.03 $ 31,984.82 ATW 10,591 Mcf


BUTLER 127 2H $ 409.76 $ 5,025.28 ATW 1,664 Mcf


BUTLER 127 3H $ 1,517.15 $ 18,606.22 ATW 6,161 Mcf


BUTLER 127 4H $ 2,513.97 $ 30,831.18 ATW 10,209 Mcf


BUTLER 127 5H $ 1,018.98 $ 12,496.76 ATW 4,138 Mcf


BUTLER 127 6H $ 2,806.02 $ 34,412.90 ATW 11,395 Mcf


DCNR 007 73H 51038 $ 34,313.71 $ 420,821.90 ATW 139,345 Mcf


DCNR 007 94H 51366 $ 24,520.84 $ 300,722.54 ATW 99,577 Mcf


ERICKSON 448 1H $ 2,857.24 $ 35,041.06 ATW 11,603 Mcf


ERICKSON 448 2H $ 2,252.45 $ 27,623.94 ATW 9,147 Mcf


ERICKSON 448 3H $ 3,212.58 $ 39,398.92 ATW 13,046 Mcf


ERICKSON 448 4H $ 2,593.51 $ 31,806.64 ATW 10,532 Mcf


ERICKSON 448 5H $ 1,997.83 $ 24,501.26 ATW 8,113 Mcf


ERICKSON 448 6H $ 2,690.77 $ 32,999.54 ATW 10,927 Mcf


HEGE N 426 1H $ 2,662.21 $ 32,649.22 ATW 10,811 Mcf


HEGE N 426 2H $ 2,114.55 $ 25,932.74 ATW 8,587 Mcf


HEGE N 426 3H $ 3,392.83 $ 41,609.56 ATW 13,778 Mcf


HEGE N 426 5H $ 4,684.91 $ 57,455.50 ATW 19,025 Mcf


HEGE N 426 6H $ 2,021.22 $ 24,788.16 ATW 8,208 Mcf


KENNEDY 137 1H $ 49,352.44 $ 605,256.32 ATW 200,416


KENNEDY 137 2H $ 71,796.65 $ 880,511.20 ATW 291,560


KENNEDY 137 3H $ 51,559.82 $ 632,327.60 ATW 209,380


KENNEDY 137 4H $ 61,877.70 $ 758,865.60 ATW 251,280


KENNEDY 137 5H $ 39,034.32 $ 478,715.30 ATW 158,515


KENNEDY 137 6H $ 63,444.59 $ 778,081.86 ATW 257,643


KENNEDY 137 7H $ 39,613.75 $ 485,821.36 ATW 160,868


KENNEDY 137 9H $ 37,323.87 $ 457,738.38 ATW 151,569


MANEVAL 296 1H $ 3,129.34 $ 38,378.16 ATW 12,708 Mcf


MANEVAL 296 2H $ 2,863.64 $ 35,119.58 ATW 11,629 Mcf


MANEVAL 296 3H $ 3,723.79 $ 45,668.44 ATW 15,122 Mcf


MANEVAL 296 4H $ 1,875.93 $ 23,006.36 ATW 7,618 Mcf


MANEVAL 296 5H $ 1,183.72 $ 14,517.14 ATW 4,807 Mcf


MANEVAL 296 6H $ 1,399.93 $ 17,168.70 ATW 5,685 Mcf


MILLER 394 23H $ 14,647.69 $ 179,638.66 ATW 59,483 Mcf


MILLER 394 25H $ 13,555.08 $ 166,238.92 ATW 55,046 Mcf


NESTOR E 551 1H $ 1,632.64 $ 20,022.60 ATW 6,630 Mcf


NESTOR E 551 2H $ 3,456.61 $ 42,391.74 ATW 14,037 Mcf


NESTOR E 551 3H $ 3,627.26 $ 44,484.60 ATW 14,730 Mcf


NESTOR E 551 6H $ 721.76 $ 8,851.62 ATW 2,931 Mcf


STOCK 144 1H $ 3,397.26 $ 41,663.92 ATW 13,796 Mcf


STOCK 144 2H $ 2,941.21 $ 36,070.88 ATW 11,944 Mcf


STOCK 144 3H $ 3,798.65 $ 46,586.52 ATW 15,426 Mcf


STOCK 144 4H $ 4,123.95 $ 50,575.94 ATW 16,747 Mcf


STOCK 144 5H $ 1,946.61 $ 23,873.10 ATW 7,905 Mcf


STOCK 144 6H $ 3,154.22 $ 38,683.18 ATW 12,809 Mcf

Hey Rick, If you are over by Kennedy sometime please look to see if the Back Flow Tanks are still on the well pad...thanks

These production figures look pretty good for Marcellus wells in that part of the county. Better than the older wells when they started out, I believe. One key question is how low was Shell able to get their costs by drilling and completing 8 wells on a pad at the same time. No amount of production is enough if the operator isn't making money! But I'm certainly more optimistic than I was given these initial results.

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Most people use plastic products every day, but what they may not know is that natural gas plays a huge role in its manufacturing.

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