French manufacturer Vallourec SA said progress is continuing on a $650 million steel mill it is building in Youngstown, OH to produce seamless pipes for use in hydraulic fracturing (fracking). The seamless hot rolling pipe mill of subsidiary V&M Star plans to create about 350 direct jobs and have initial production of 350,000 tons/year, but it can be expanded to 500,000 tons/year. Production is expected to ramp up in the next few months. According to Vallourec, the new mill would produce 2 3/8-inch to 7-inch diameter pipe for use in fracking operations. The company said it wants to support customers in shale plays across the continent; it has field offices in the Marcellus, Utica, Haynesville and Barnett shales and in the Piceance Basin.
Consol Energy Inc. plans to spend $755 million on natural gas development this year, up from $662 million in 2011. The Pittsburgh-based company plans to spend $575 million in the Marcellus Shale and $50 million in the Utica Shale this year — up from $427 million and $3 million, respectively, in 2011 — but it will cut coal bed methane spending in half to $65 million and reduce spending on conventional gas to $65 million from $102 million. Consol is also increasing spending on coal activities. Through its joint venture with Noble Energy, Consol plans to spend $395 million drilling 122 gross horizontal wells in the Marcellus, including 39 in the liquids-rich areas of the play of southwestern Pennsylvania and northern West Virginia. Consol also plans to spend $90 million on related gathering and compression projects. Through its joint venture with Hess Corp., Consol plans to spend $50 million drilling up to 22 gross wells into the liquids-rich and oil phases of the Utica. Consol expects production to be 160 Bcfe this year, up nearly 12% after adjusting for its sales of producing assets to Nobel and Antero Resources. Consol expects production to grow to 200-220 Bcfe in 2013 and up to 350 Bcfe by 2015.
The Pennsylvania Public Utility Commission (PUC) voted unanimously to issue for comment a tentative order to implement the Gas and Hazardous Liquids Pipelines Act (Act 127), which was signed into law by Gov. Tom Corbett late last year. Act 127 directed the PUC to develop a registry and conduct safety inspections for all “pipeline operators” in the state. The tentative order contains information on registration forms and fees; registration deadlines; and assessment calculations and schedules. The order would create a statewide registry for nonpublic utility gas and hazardous liquids pipeline equipment and facilities (Docket No. M-2012-2282031).
The number of permits for horizontal natural gas wells in Ohio’s portion of the Utica and Point Pleasant was on the rise in the closing months of 2011, according to the state’s Department of Natural Resources (DNR). DNR’s most recent data shows that 11 permits were issued for horizontal wells in the Utica and Point Pleasant shales in October, 22 permits were issued in November and 19 permits were issued in December. The agency has also issued 11 Marcellus Shale horizontal well permits and reports six Marcellus wells have been drilled. DNR reports reveal that Chesapeake Exploration LLC, a subsidiary of Chesapeake Energy Corp., is the most prolific operator in the play but other operators — some of whom are also permitted to drill vertical wells — include EnerVest Ltd., HG Energy, Anadarko E&P Co. LP, Devon Energy Production Co., Ohio Buckeye Energy and CNX Gas Co.
Six investor-owned natural gas and electric utilities in New York — Central Hudson Gas & Electric Corp., Consolidated Edison Inc., National Fuel Gas Distribution Corp., National Grid, New York State Electric & Gas Corp. and Rochester Gas and Electric Corp. — have formed Energy Coalition New York “to provide public policy leadership on energy issues” in the state. The coalition will work with the governor and state legislature on energy policies to control customer costs, reduce environmental emissions, spur economic development and promote energy efficiency, and will also serve as an informational and educational resource for media and the public, a spokesman said. Together, Energy Coalition New York members own and operate most of the state’s natural gas and electric infrastructure and serve more than 8.5 million customers.
The Pennsylvania Department of Environmental Protection (DEP) has cited Cabot Oil & Gas Corp. for three violations in Susquehanna County last September, saying poor well construction caused methane to seep into groundwater and three private water wells. According to a notice of violation, the DEP began investigating after residents in Lenox Township complained about methane being present in private water supplies 1,400 feet from Cabot’s three-well Stalter pad. Methane levels in the water supplies jumped from 0.29 mg/L in a pre-drill sample collected on Nov. 11, 2010, to 49.2 mg/L on Aug. 16 and 57.6 mg/L on Aug. 18, according to the DEP. In response, Cabot vented the impacted water wells, provided methane detection alarms for the homes and delivered water supplies to the homes, according to both the company and DEP.
Having outlined guidelines for balancing sage grouse and economic protections, the federal Bureau of Land Management (BLM) plans to conduct a series of eight scoping meetings in Utah beginning Tuesday (Jan. 17) through Feb. 1 to gain feedback on an environmental impact statement. In December BLM issued two instructional memorandums to guide immediate and longer-term conservation actions designed to conserve the greater sage grouse and its sagebrush habitat in 10 western states. BLM and the U.S. Forest Service (USFS) are holding the scoping meetings and the federal agencies reiterated their goal of incorporating consistent objectives and conservation measures into relevant plans by September 2014 as part of the overall deadline for the U.S. Fish and Wildlife Service to decide whether to list sage grouse under the Endangered Species Act.
Citing “prolific availability” of U.S. shale gas, Intermountain Gas Co. has filed with Idaho regulators for its fifth consecutive rate reduction tied to wholesale costs of gas. Intermountain had a 5.3% rate decrease last October. Intermountain asked the Idaho Public Utilities Commission (PUC) to lower its rates by 4.5% effective Feb. 1 through Sept. 30. Along with the glut of low-priced domestic supplies tied to shale production, Intermountain cited record storage levels for gas nationally and the lack of production interruptions due to hurricanes this past storm season, along with cold weather boosting utility sales as all contributing to the continuing downward trend in retail rates. Completion of El Paso Corp.‘s Ruby Pipeline was yet another factor contributing to the rate decrease, according to the utility’s filing.
Idaho regulators approved a 20-year integrated resource plan (IRP) calling for increased use of natural gas and hydroelectric sources while cutting back considerably on coal-fired electricity. The Idaho Public Utilities Commission (PUC) accepted Idaho Power Co.’s long-range planning document with the condition that the state’s major utility continue to address issues raised by the PUC and environmental organizations regarding the early retirement of coal-fired generation, the Gateway West transmission project, federal relicensing of some hydro projects and progress on a solar demonstration project. Gas-fired generation accounts for less than 3% of Idaho Power’s current portfolio with coal accounting for nearly 44%. By 2030, the coal-fired portion is expected to drop to 26% while gas-fired power rises to nearly 10%.
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