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Marcellus Shale

December 23, 2019

Marcellus Shale

Marcellus

There have been some signs the shale boom that re-energized America’s domestic energy industry a few years back, might be entering a maturing phase of its development. A phase where weaker players would hit a debt wall or be bought out at discounted value. A phase where, companies with cash who might have felt shale plays were too frothy at present levels, and had stayed on the sidelines waiting for the “froth” to dissipate. Biding their time. Now you can now almost hear the knives on the whetstone.

Beginning in 2019 these signs began to take shape in the massive retrenchment of the service industry that powered shale growth. Companies like Halliburton, (HAL) and Schlumberger, (SLB) threw in the towel and began to take charges against earnings, and layoff hundreds of staff.

This trend took on a real and tangible face when in a recent filing Chevron (CVX) said it would write down and put on the auction block its Marcellus shale assets. Assets it acquired from Atlas Energy in 2011 for $3.2 bn.

In the third quarter, 2019 conference call where this news was released to analysts, Michael Wirth, Chairman and CEO of Chevron commented-

“Mr. Wirth said Chevron must be selective about its investments moving forward, focusing on oil-rich regions like the Permian Basin in West Texas and New Mexico.” – WSJ

According to CVX, not all shale is created equal. Let’s make a note of that! My job as an oil industry expert is to dig a little deeper and see if we can determine just what drove this decision.

The Marcellus vs. The Permian

Why is Chevron abandoning the Marcellus for the Permian? Let’s take a look at the isopach maps for both. In the graphic for the Marcellus, noted as Figure 2, you can see it is a relatively thin structure over most of its extent. And thins progressively the farther west it goes. The EIA comments thusly about production in the Marcellus:

…click on the above link to read the rest of the article…

Here’s the New Study the Fracking Industry Doesn’t Want You to See

February 17, 2016

Here’s the New Study the Fracking Industry Doesn’t Want You to See

Using human bronchial epithelial cells, which are commonly used to measure the carcinogenesis of toxicants, researchers confirmed fracking flowback water from the Marcellus Shale caused the formation of malignancies.

After conducting further tests on live mammalian subjects, researchers found five of six mice “injected with cells transformed from well water treatments developed tumors as early as 3 months after injection,” including a tumor in one mouse that grew to over 1 cm in size in just five months. A control group did not develop any tumors for the six months of the study period.

According to the study, performed by scientists from the Department of Environmental Medicine, as well as Biochemistry and Molecular Pharmaceutical at New York University, the Robert Wood Johnson Medical School at Rutgers, and esteemed partners from universities in China — results indicate fracking flowback water causes cancer.

Implications of the report’s findingswould be difficult to overstate considering how fracking wastewater is generated, stored, and treated, and how often spills, leaks — and even the wastewater injection process, itself — can lead to contamination of the potable supply. A concise but thorough explanation of the fracking process can be found in the introduction to the report, “Malignant human cell transformation of Marcellus Shale gas drilling flow back water,” which states:

“Natural gas is believed to possibly be a bridge to transitioning from coal dependence. Currently natural gas fuels nearly 40% of the U.S. electricity generation, and the Marcellus Shale formation in the Appalachian Basin is on the forefront of gas-shale drilling for natural gas production in the United States. 

…click on the above link to read the rest of the article…

As the Fracking Boom Spreads, One Watershed Draws the Line

October 20, 2015

As the Fracking Boom Spreads, One Watershed Draws the Line

After spreading across Pennsylvania, fracking for natural gas has run into government bans in the Delaware River watershed. The basins of the Delaware and nearby Susquehanna River offer a sharp contrast between what happens in places that allow fracking and those that do not.

Over the last several years, with the hydraulic fracturing technology in hand to extract natural gas from the tight formations of the Marcellus shale, the industry moved quickly and seemingly inexorably from West Virginia and across the prized geology of Pennsylvania. State maps that designate each well with a colored dot look as if a storm of confetti has blown up from Pennsylvania’s southwest, intensifying as it reaches the state’s rural and heavily forested northeast.

Gerry Dincher/Flickr
A wellhead in north-central Pennsylvania on a platform used for drilling natural gas.

In 2008, the state produced only two percent of the country’s natural gas and the Gulf of Mexico 26 percent. By 2013 the percentages were nearly reversed: Pennsylvania produced 23 percent to the Gulf’s five percent. Now some 8,000 wells in Pennsylvania produce roughly 17 billion cubic feet of gas per day, and the expectation is that within the next decade new infrastructure will double those numbers, as well as add 60,000 miles of pipeline.

Only one area of Pennsylvania’s Marcellus has escaped the fracking storm — the portion that lies within the watershed of the Delaware River, the longest undammed river east of the Mississippi. Four years ago the gas industry was poised to spread into the Delaware River basin, which encompasses 13,000 square miles of land in four states. The industry had signed thousands of leases with watershed landowners. And although many of those landowners’ neighbors looked west at the industry’s growth in the Susquehanna River basin and wanted no part of it, the Delaware River Basin Commission (DRBC) was ready to give the go-ahead.

…click on the above link to read the rest of the article…

Fracking Fraud

October 15, 2015

Fracking Fraud

fracking_mess

Photo by Jacques del Conte.

Hucksters for high volume hydraulic fracturing with horizontal drilling, the intensely industrial process by which x percent of natural gas and oil are mined in the United States today, loudly tout multiple benefits of the practice. Fracking reduces dependence on imports of crude oil. It generates jobs, profits and tax revenues. Fracked gas burns cleaner than coal, reducing smog and carbon pollution. Fracking leads to lower prices for gasoline and other petroleum products. It’s a variant of the last claim I examine here.

I live in Upstate New York, a place spared the direct ravages of hydrofracking by an especially vigorous years long opposition campaign that led Governor Andrew Cuomo to “ban” the process in 2014 (the next governor could reverse Cuomo’s decision). The state still suffers myriad indirect insults from fracking, including mile-long oil trains from the Bakken Shale, and a network of proposed pipelines, storage facilities and giant compressors to move fracked gas from Pennsylvania to New York and New England. Setting aside the grievous environmental damage of pipeline construction and the ‘round-the-clock threat of another Lac Megantic, New Yorkers were supposed to benefit from the lower costs of heating fuels promised by fracking supporters.

Northeasterners use a wide variety of fuels to ward off the winter chill: electricity, wood, corn, pellets, propane, kerosene, oil, natural gas, even coal. Natural gas is most common. Despite the promises, fracking has not prevented spikes in fuel costs. In recent years, several severe winters caused heating oil and electricity prices to skyrocket.

Given the flood of fracked gas from shale formations as close as the Marcellus, the price ought to have followed that of gasoline. Yet, while current wholesale natural gas prices are twenty-four percent lower than last year, Capital Region of New York customers of National Grid (the local utility) can expect a two percent drop in their bills.

…click on the above link to read the rest of the article…

 

Have Natural Gas Prices Bottomed?

April 28, 2015

Have Natural Gas Prices Bottomed?

Last Friday we finally got confirmation of where all the natural gas supply has been coming from as Cabot (COG) reported its earnings. Just like Chesapeake (CHK), they reduced natural gas output, but on a much grander scale. CHK has yet to report and will do so on May 6th providing even more color on the subject.

Last month they announced a 2% reduction in NGAS volumes to 1-3% for 2015 vs. 3-5%. But the ramp up of supply from Marcellus, and to a lesser extent Utica, and a corresponding flat to up rig count in natural gas rigs in those areas appears to be the reason why NGAS has crashed some 30% despite a relatively cold winter in the mid-west and East especially. The magnitude of the supply increase is simply stunning, begging the question: what was Cabot’s management thinking by increasing NGAS production in Marcellus by some 40% to 162 BCF in 1Q15 and up 12.5% sequentially from 4Q14? And, to boot, 4Q14 was up over 13% sequentially from 3Q14!

CabotNatGasProduction

Source: Company Data

The Marcellus region began ramping up in 2010 which has resulted in a surge in production which has probably peaked 1Q15 in terms of rate of growth. It has by far contributed to the largest increases in output and has signal handily resulted in the crash in prices.

With spot prices hovering around $2.45/MMBTU and within 10% of the most bearish estimate targets this quarter, it seems the worst of the oversupply is behind the market especially with EPA rules forcing coal to NGAS switching in volume this summer. Coal still represents the majority of fuel used to generate electricity despite this trend.

 

…click on the above link to read the rest of the article…

Hard Times in a Boom Town: Pennsylvanians Describe Costs of Fracking | DeSmogBlog

December 11, 2014

Hard Times in a Boom Town: Pennsylvanians Describe Costs of Fracking | DeSmogBlog.

If you’re looking for the shale gas boom, northeastern Pennsylvania is the place to start.

The Marcellus is the largest and fastest growing shale gas play in the U.S. and more than half of its 50 most productive wells were drilled in Susquehanna County in the northeast. Susquehanna and neighboring Bradford County produced 41 percent of all Marcellus gas this June.

While drilling is down in other shale gas plays across the US, with major oil companies selling off their stakes and CEO‘s expressing regret for buying in, the Marcellus has bucked some of the downward trends so far.

A recent report from the Post Carbon Institute, “Drilling Deeper: A Reality Check onU.S. Government Forecasts for a Lasting Tight Oil and Shale Gas Boom,” has grave warnings about the Energy Information Administration’s figures nationwide, concluding that two-fifths of the shale gas the agency expects to be produced between now and 2040 will likely never materialize. While many high-profile shale gas plays have already peaked in terms of gas production per well, the Marcellus appears to be an outlier in terms of productivity, researcher David Hughes concludes.

Enormous amounts of shale gas are being produced in Pennsylvania. In the first six months of this year, drillers here pumped 2 trillion cubic feet of gas. And much of this gas came from the Marcellus shale’s twin sweet spots, in the Northeast and Southwest corners of the state.

…click on the above link to read the rest of the article…

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