Henry Hub Daily Spot Prices
Graphically, this says it all (from the Federal Energy Regulatory Commission's Natural Gas Markets: National Overview):
FirstEnergy to Close Six Coal-Fired Power Plants
Remember, it's not a bug - it's a feature: "FirstEnergy Corp. announced today that its generation subsidiaries will retire six older coal-fired power plants located in Ohio, Pennsylvania and Maryland by September 1, 2012. The decision to close the plants is based on the U.S. Environmental Protection Agency Mercury and Air Toxics Standards (MATS), which were recently finalized, and other environmental regulations." (FirstEnergy Press Release.)
Yes, U.S. EPA's regulations do have consequences for jobs.
WSJ: U.S. Oil Production is Surging
The WSJ is reporting that the Energy Information Administration (EIA) will soon confirm that oil production in the United States is surging, largely due to increases in shale production: "The forecast will include new production data from developing oil fields, including the Bakken shale area in North Dakota, which could hold as much of 4.3 billion barrels of recoverable oil. North Dakota's output of oil and related liquids topped 500,000 barrels per day in November, meaning that the state pumped more oil than Ecuador. In fact, U.S. oil production grew faster than in any other country over the last three years and will continue to surge as drillers move away from natural gas due to a growing gas glut, experts say. The glut has sent natural-gas prices to a 10-year low."
Nice. (Note: Subscription may be required.)
[Update: And from the EIA's AEO2012 Early Release: "Domestic crude oil production is expected to grow by more than 20 percent over the coming decade: Domestic crude oil production increased from 5.1 million barrels per day in 2007 to 5.5 million barrels per day in 2010. Over the next 10 years, continued development of tight oil combined with the development of offshore Gulf of Mexico resources are projected to push domestic crude oil production to 6.7 million barrels per day in 2020, a level not seen since 1994." (Emphasis is ours.)]
PA Hotels See Boom Related to Drilling
4Hoteliers has an interesting take on the impact of Marcellus drilling in Pennsylvania: "The 4,374 square-mile region comprising four northeastern Pennsylvania counties—Bradford, Lycoming, Susquehanna and Tioga—experienced a hotel industry RevPAR growth of 37 percent from 2007 to 2010, and grew another 22.2 percent through August of 2011. That’s not a misprint; rather, this remarkable growth is largely attributable to the exploitation of an old resource through the birth of a new industry: natural gas extraction from the Marcellus Shale."
Read the whole thing.
Natural Gas Futures - EIA
The Energy Information Administration (EIA) has an interesting report on natural gas futures prices ... interesting, but not necessarily encouraging if you're an operator: "Natural gas prices on the New York Mercantile Exchange (NYMEX) settled at $2.488 per million British Thermal Units (MMBtu) on Tuesday, January 17. A near-month contract has not ended daily trading that low since March 5, 2002, nearly 10 years ago." Graphically:
"Henry Hub natural gas spot prices fell about 9% in 2011"
That's the title of a report recently published by the Energy Information Administration (EIA): "Prices at the Henry Hub, a key benchmark location for pricing throughout the United States, fell 9% to about $4 per million British thermal units in 2011, the second lowest annual average price since 2002." They post an interesting graphic with the report:
Keystone Pipeline Rejected
By now you know that the Administration has rejected the proposed Keystone XL oil pipeline (see, e.g., NYT - "The State Department, which has authority over the project because it crosses an international border, said there was not enough time to draw a new route for the pipeline and assess the potential environmental harm to sensitive grasslands and aquifers along its path."). Some of the commentary has been ... interesting. See, e.g., this from the Washington Post's Robert Samuelson ("President Obama’s rejection of the Keystone XL pipeline from Canada to the Gulf of Mexico is an act of national insanity."). Read the whole thing.
Ohio Governor Proposes Tax Increase on Operators
The Columbus Dispatch is reporting that Governor Kasich wants to impose new impact fees and severance taxes on operators seeking to develop the Utica shale in Ohio: "Ohio’s oil and gas industry would pay an 'impact fee' for deep-shale wells to cover the cost of infrastructure damage caused by oil and gas extraction, part of a package of taxes and fees for the industry that Gov. John Kasich soon will propose."
A word of caution: Brings to mind one of Aesop's Fables ...
The EPA's Common Sense Initiative and Its Legacy on the Finishing Industry
Anthony J. Giuliani, a partner in the Columbus office of Vorys, Sater, Seymour and Pease LLP, analyzed the U.S. Environmental Protection Agency’s 1994 “Common Sense Initiative” in an article published in the February edition of Products Finishing Magazine. Giuliani, a member of the firm’s energy and environmental practice group, found that – although the program was largely deemed a failure – a handful of valuable research and development projects came as a result of the initiative.
USEPA Seeks Peer Review of Pavilion, WY Ground Water Investigation
As previously reported on this Blog, on December 14, 2011 USEPA a draft research report entitled "Investigation of Ground Water Contamination near Pavilion, Wyoming." USEPA announced yesterday that it now "invites public nominations of scientific experts to be considered as peer reviewers of the external review" of this draft research report. See the Federal Register Notice here.
Ohio: Shale Jobs
The Marietta Times has an interesting article on the job creation potential of the Utica Shale in Ohio. For example: "Kvamme [president and interim chief investment officer with JobsOhio] noted chemical industries like local polymer plants will benefit from low energy costs but also from easy access to 'feedstock' gases like ethane, butane, propane and methane used in product processing. He said the cheaper fuel and access to the feedstock gases could also help bring more companies into the area and that there have already been talks with a large steel company and other manufacturers."
Just thought you might like to know.
Future of USEPA Compliance Orders at Issue . . .
Earlier this week the U.S. Supreme Court heard oral arguments in a major environmental case, Sackett v. EPA. The arguments concerned whether a U.S. EPA complaince order (requiring action and imposing penalties) issued without meaningful judicial review, is constitutional or not. Attached is a link to the oral argument . . . very interesting reading.
Clean Ohio Funding Update
The Clean Ohio Assistance Fund (COAF) has announced that it is no longer accepting applications for grant funding (under $300K). The Clean Ohio Revitalization Fund (CORF) has enough funds for one more round (due January 20th) for a shot at the remaining $20 million (grant amounts up to $3M). The challenge for Ohio’s elected leadership will be to locate replacement funding for the “liquor sales profits” funding stream that was moved to Jobs Ohio in 2011. A link to Ohio's Brownfield Revitalization webpage is here.
NY SGEIS Update
We've reported previously on the Draft Supplemental Generic Environmental Impact Statement (SGEIS) issued by New York (see here, e.g.). The NYT is reporting that more than 20,000 comments have been received regarding that draft: "After taking over 20,000 public comments, more than on any issue they have ever faced, New York environmental officials are getting ready for the final phase of work on their proposal to allow hydrofracking of natural gas in the state." How many are "form" comments sent in by multiple parties ...
An Ohio Shale Success Story
Bloomberg is reporting that a Youngstown steel mill is re-opening its doors due to increased demand for pipe used in the development of shale resources here in the northeast: "The factory for Vallourec SA’s V&M Star will have 350 workers and produce seamless pipes used in hydraulic fracturing, also known as fracking. It’s part of a development that an oil and gas industry study calculates will mean more than 200,000 jobs and $22 billion in economic output in Ohio by 2015 -- and which has neighboring states looking to get in on the action."
Congratulations!
That's Not Right ...
The NYT is reporting that transportation fuel companies paid an estimated $6.8 million last year in penalties for failing to blend a special type of biofuel that doesn't even exist: "Penalizing the fuel suppliers demonstrates what happens when the federal government really, really wants something that technology is not ready to provide. In fact, while it may seem harsh that the Environmental Protection Agency is penalizing them for failing to do the impossible, the agency is being lenient by the standards of the law, the 2007 Energy Independence and Security Act."
That can't be right, can it?
Ohio's New Industrial Activity Storm Water General Permit
Ohio's new industrial activity storm water general permit went into effect January 1, 2012. If you have an existing industrial activity general permit that is expired, you will need to submit to Ohio EPA a new Notice Of Intent (NOI) application form before March 31, 2012. Ohio EPA's webpage that provides a Fact Sheet, NOI Forms and other information can be found here.
If you are covered under this permit, be sure to read it carefully as provisions have changed and will require additional compliance obligations.
"Shale Game"
That's the name of a new article in City Journal reporting on shale development in New York. A sample: "With more and more producers in the business, the price of natural gas has dropped steadily, and the U.S. has become the world’s leading producer of natural gas. A new age of clean, cheap shale-gas energy is about to begin—except, perhaps, in New York State, where influential environmental groups seem to be winning their struggle against shale. *** Perhaps what motivates the environmentalists’ attack on shale gas is worry about the survival of their movement. The green movement gave up on hydrocarbons years ago: it has already announced the arrival of “peak oil,” and the imminent demise of petroleum power—despite many recent discoveries of large oil and gas fields around the world—is a fundamental article of green faith. Environmentalists see shale gas as a relapse, a return to destructive habits, an end run around their self-appointed role as judge and jury for energy policy in America."
You might enjoy it ...
Good News for Ohio!
Despite low natural gas prices, the Zanesville Times-Reporter observes that Utica development in Ohio should continue: "[T]he Utica Shale, a rock formation thousands of feet below the eastern half of the state, is home to not only trillions of cubic feet of natural gas, but billions of barrels of oil and natural gas liquids. The latter is what attracted investment and will keep money flowing into Ohio, said Tim Rezvan, vice president of senior energy analyst at Sterne Agee."
Mining Frac Sand
The Chicago Sun-Times has an interesting article on a growing debate involving the mining of frac sand in the Midwest and the rise of anti-sand mining activists: "Crispin H. Pierce, an environmental public health professor at the University of Wisconsin-Eau Clare, said more information is needed about the risks of frac sand mining. Fresh silica dust has grains with sharp, jagged particles and is more dangerous than the weathered silica found in dirt, although it weathers quickly, he said."
Anti-sand mining activists ...
Update: Shell Processing Plant
Ohio remains in the running for a natural gas processing plant that Shell plans on constructing in the northeast, according to this report in the Cleveland Plain Dealer: "Shell Chemical is finalizing plans for a $2 billion complex that is expected to create hundreds of jobs and pull other industries and manufacturers into its orbit. Shell has said only that it plans to build in either West Virginia, Pennsylvania or Ohio, three states that overlay ancient shale beds rich in natural gas."
The site announcement is expected to come in February. Wish Ohio good luck!
No Surprise Here ...
The WSJ is reporting that opponents to E&P operations in NY are hoping to pass Home Rule legislation that would allow local governments to regulate (read: ban) oil and gas operations in their jurisdictions: "New York law does allow municipalities to zone mining activities that have significant surface impacts, such as gravel mines. But in 1981, state law was amended to exempt oil and gas from mining activities subject to local regulations. The home rule bills would remove that exemption."
You saw it coming. (Note: Subscription may be required.)
Ohio Injection Well Suspends Activity
The Columbus Dispatch is reporting that a limited moratorium has been placed on 5 injection wells (only one of which is active) in northeast Ohio because of concerns related to earthquake activity: "There are 177 injection wells throughout the state. Zehringer and other officials, speaking on a New Year’s Eve conference call, said the single Youngstown well is the only one of its kind that’s been related to seismic activity since the state started using them in the 1970s. *** Kasich officials also stressed that the months-long shaking in Youngstown is not a result of hydraulic fracking — a procedure used to extract oil and gas out of rock formations such as the Marcellus and Utica shale."
As we've noted before, let's not jump to any conclusions ...
Top US Export
The Times Leader is reporting that fuel is likely to be the top U.S. export this year: "according to U.S. Census data going back to 1990. It will also be the first year in more than 60 that America has been a net exporter of these fuels. *** Just how big of a shift is this? A decade ago, fuel wasn't even among the top 25 exports. And for the last five years, America's top export was aircraft."
Interesting. Read it all.
