America’s Natural Gas Alliance (ANGA) is launching a nationwide advertising campaign designed to get people thinking and talking about their energy choices, and to see natural gas as a “foundational fuel.” The ad campaign will be “very visible,” with television and online components, as well as personal outreach through ANGA customer groups, said spokesman Dan Whitten. It would be the first major public outreach since Martin J. Durbin was named president and CEO (see NGI, April 1). Durbin had been executive vice president of government affairs at the American Petroleum Institute, where he led advocacy efforts on behalf of the oil and gas industry. Former president and CEO Regina Hopper resigned in February under pressure from the board (see NGI, Feb. 11).
Golden Pass Products LLC (GPP) has filed at the Federal Energy Regulatory Commission to initiate pre-filing for its proposed $10 billion liquefied natural gas export project in Sabine Pass, TX. GPP recently signed a commercial agreement to sell the full output, 15.6 million metric tons/year, and provide market shipping and sales opportunities, which would include leveraging sponsors Qatar Petroleum International and ExxonMobil Corp. long-term arrangements for international imports via the UK’s South Hook facility. GPP has received federal approval to export gas to free trade agreement (FTA) countries and is awaiting approval to export to countries without agreements.
Changing the name of the Railroad Commission of Texas (RRC) to more accurately reflect its duties as lead regulator over the state’s oil and natural gas industry and to provide more oversight over the elected members has died and won’t be taken up again for another two years. With SB 212, State Sen. Robert Nichols (R-Jacksonville) had sought to require commissioners to resign from office before seeking new elected posts; provide a 17-month window during which members could seek campaign contributions for re-election; and prohibit them from receiving contributions from parties with contested cases before the RRC. Commissioners are elected to six-year terms, and they may receive contributions while they serve. The reform package, which was stalled in the last biannual legislative session in 2011, will wait until lawmakers meet again in 2015. A delay is allowed under a schedule bill, now in the Senate (HB 1675).
The Texas Senate has approved HB 788, intended to give the Texas Commission on Environmental Quality (TCEQ) permitting authority for state greenhouse gas (GHG) emissions sources, sidestepping the U.S. Environmental Protection Agency (EPA), where permitting bottlenecks are said to be holding up projects. The bill, authored by Rep. Wayne Smith (R-Baytown), was supported by energy interests, but opponents said it ignores the issue of climate change and removes the ability of citizens to contest permits. If signed by the governor, TCEQ would be tasked with adopting a regulatory program to become the GHG emissions permitting authority.
The Center for the New Energy Economy (CNEE) at Colorado State University has a web-based system that tracks individual state energy-related legislation. The Advanced Energy Legislation (AEL) Tracker (www.aeltracker.org) was developed with Advanced Energy Economy. Natural gas is one of 10 policy categories, which also include energy efficiency, electricity generation and infrastructure. Of the pending legislation nationwide, CNEE has found that about 25% is related to new financing tools, including tax incentives; 21% promote “clean” energy; and 8% provide for energy efficiency standards for appliances, building, etc. The center plans to publish two to three analyses monthly.
AES Corp. plans to build a large-scale natural gas-fired plant in Indiana, part of a project to shutter or renovate more than a dozen coal-fired generation units in Indiana and Ohio, subject to state regulatory approval. Subsidiary Indianapolis Power & Light Co. (IPL) is retiring six coal-fired units at one location and repowering or retiring four others, which have a total 600 MW of capacity. A $631 million, 650 MW combined-cycle natural gas-fired facility is to be built at the Eagle Valley Generating Station in Morgan County. At the Harding Street Generating Station, IPL plans to convert two units to natural gas from coal, totaling 200 MW. Subsidiary Dayton Power & Light (DP&L) plans to retire six coal-fired units at the 390-MW plant in Montgomery County. The six coal units have a capacity of 365 MW; a 63 MW coal-fired unit out of service, is to be retired by June. DP&L plans to retire the five other units by June 2015. DP&L also is considering whether to convert units to gas.
Hess Corp. has ended a proxy battle with major shareholder Elliott Management Corp. (4.4%) by agreeing to appoint three Elliott-backed nominees to its board of directors. The reconstituted board would comprise 14 members; nine were replaced following the annual meeting Thursday. The activist hedge fund, which had claimed that the company was mismanaged and controlled by Hess family interests, agreed to support five Hess nominees. The board now will be reelected every year instead of every three. Elliott also led the charge to split the chairman and CEO roles, now held by John Hess, the son of the company’s founder, and it has forced the company to sell its downstream arm and monetize Bakken Shale midstream assets.
Apache Corp. shareholders voted down a proposal to increase compensation for executives at the annual meeting. The nonbinding vote received 49.82% support, a sharp turnaround from the 2012 meeting at which a pay hike was approved by more than 90%. CEO G. Steven Farris acknowledged that performance had not matched expectations, telling shareholders, “we have not done what we said we were going to do.” Another “area of concern” are holdings in strife-torn Egypt. Apache this year plans to sell $4 billion worth of assets to reduce debt and buy back shares (see NGI, May 13).
Crosstex Energy Inc. plans through E2, a company formed with Enerven Compression Services, to invest about $25 million in a third natural gas compression and condensate stabilization facility in the Ohio River Valley to serve Utica Shale operators, which E2 would build and operate. Crosstex had agreed to put up to $50 million in E2 for more Ohio midstream facilities (see NGI, March 11), which are to be in Noble and Monroe counties. The third facility is to have 100 MM cf/d of compression capacity, which condensate stabilization capacity of 5,000 b/d, which brings the total expected capacity for the three to 300 MMcf/d of compression and 12,000 b/d of condensate.
Oil and natural gas executives are more optimistic than in late 2012 about the global economy, and most expect to either maintain or hire more employees over the coming year, according to a survey by Ernst & Young. The semi-annual Global Capital Confidence Barometer, completed in April and October, is intended to gauge corporate confidence in the economic outlook. Nearly 1,600 executives worldwide were questioned, with 152 representing the oil and gas industry. Overall, 44% of the oil and gas leaders said they believe the economy is improving, significantly more than 27% in October (see NGI, Nov. 12, 2012). Over the next year, nearly all (92%) expect to maintain or hire more employees; 54% are planning to create jobs or hire more people. More than one-quarter (27%) expect to undertake some merger or acquisition activity, and close to three-quarters (72%) expect global deal volumes to increase.
Plains Exploration & Production Co. is building a facility in Broussard, LA, to support its deepwater Gulf of Mexico (GOM) operations, according to the Lafayette Economic Development Authority. Plains in 2012 paid a total of $6.1 billion to buy deepwater assets in separate transactions with Royal Dutch Shell plc and BP plc (see NGI, Sept. 17, 2012), which prompted the expansion. Plains now employs about 200 people in the Lafayette area and plans to increase the head count by about 400 new direct and contract jobs over the next five years. The news comes ahead of a vote on Monday (May 20) by Plains shareholders regarding a friendly mega-merger with Freeport-McMoRan Copper & Gold Inc., which last December offered $6.9 billion for Plains and $2.1 billion net for affiliated company McMoRan Exploration Co. (see NGI, Dec. 10, 2012).
HB 134, under consideration by the Ohio House of Representatives, would allow local governments to transfer revenue from water sales for unconventional drilling into their general fund if the amount transferred doesn’t exceed the amount collected the preceding calendar year. The bill by state Rep. Jack Cera (D-Bellaire) has been assigned to the State and Local Government Committee. In April Ohio’s Muskingum Watershed Conservancy District approved two separate agreements to sell water for three months to Antero Resources and Gulfport Energy Corp. (see NGI, April 29). Regulators with the Ohio Department of Natural Resources are also considering a plan to sell water (see NGI, June 25, 2012).
NiSource Inc. subsidiary Columbia Gas Transmission Corp. (CGT) has applied for Federal Energy Regulatory Commission approval for two projects designed to collectively increase transportation capacity from the Marcellus Shale by an additional 444,000 Dth/d. CGT, which seeks approval by Dec. 1, wants to build a $81.8 million Smithfield III Expansion Project to add midstream services in Pennsylvania and West Virginia. CGT also wants an OK for the $121.7 million Line 1570 pipeline replacement project in the two states.
Mercedes-Benz is providing DHL Express Mexico with Sprinter compressed natural gas (CNG)-gasoline bifuel vehicles, which DHL first was deployed in Mexico City in late 2012. The vans, estimated to cost about $10.5 million total, are part of a 218-vehicle delivery from Mercedes’ Mexico arm, including 181 Sprinters, 32 Vito vans and five Smart cars. The four-cylinder, 1.8-liter natural gas engines represent “the first natural gas-powered Sprinter fleet in the Americas,” according to DHL.
More energy executives now believe the United States can attain energy independence by 2030, a 10-point gain from 2012, to 62% from 52%, according to the 11th annual Energy Industry Outlook Survey by the KPMG Global Energy Institute. Of the 62%, 23% think energy independence is possible as soon as 2020. Those who believe that U.S. energy independence will never happen dropped to 17% from 27% a year ago (see NGI, May 21, 2012). The annual survey polled more than 100 senior U.S. executives representing global energy companies.
EV Energy Partners LP (EVEP) is continuing to search for a joint venture partner to help share costs the Utica Shale’s oil window and it still wants buyers of other Utica and Marcellus acreage. Executive Chairman John Walker said the sale of 103,800 net acres in eight Ohio counties “is the highest priority” for EVEP and parent EnerVest Ltd., the second biggest leaseholder in Ohio’s Utica after Chesapeake Energy Corp. EVEP now partners in the Utica with Chesapeake and France’s Total SA. EVEP reported a net loss of $46.6 million (minus $1.08/share) in 1Q2013, versus net income of $28.6 million (60 cents) in the year-ago period. Production totaled 10.3 Bcf, 263,000 bbl of crude oil and 503,000 bbl of natural gas liquids, averaging 165.2 MMcfe/d. Daily output was about 3.6% higher year/year, but down 0.7% from 4Q2012.
The U.S. Environmental Protection Agency (EPA) has agreed with the Pennsylvania Department of Environmental Protection (DEP) to not list a 98-mile section of the main stem of the Susquehanna River from Sunbury to the Holtwood Dam as impaired due to concerns over the health of the river’s smallmouth bass. The EPA approved a list of 7,009 impaired waterways submitted. Under the federal Clean Water Act, states are required to analyze water quality and submit a list of impaired waterways every two years. A Susquehanna River Basin Commission spokeswoman said the bass issue predates Marcellus Shale development.
Zodiac Exploration Inc. said ExxonMobil Corp. and Royal Dutch Shell plc joint venture Aera Energy LLC have temporarily suspended operations at a drilling site in the San Juaquin Basin. The well is on tight-hole status after reaching a vertical depth of 15,362 feet. “Aera has further advised that it will make a decision in due course on drilling the horizontal well section as required by a farm-out agreement” signed in 2012, said CEO Peter Haverson. The primary target was the Kreyenhagen formation, with a secondary target of the Monterey Shale.
Denver-based Enservco Corp. in 2013 plans to invest $6 million in capital expenditures, with $4.7 million for new equipment. The annualized revenue potential from the new equipment is estimated at about $10 million. The equipment includes nine hydraulic fracturing heating trucks with a total of 12 burner boxes, four hot oilers and two well acidizing trucks, which would expand heating capacity by 40%. Enservco said sales during April reached $3.7 million, up 85% from one year ago.
Cardinal Midstream II LLC has secured a $200 million commitment from EnCap Flatrock Midstream to support new midstream development. Cardinal is focused on gas and crude midstream services. With the new commitment, Cardinal is led by CEO Doug Dormer and President Marc Lyons. Mark Ward has joined the company as COO.
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