Natural Gas NOW Picks of the Week – January 20, 2018

natural gas now - Tom Shepstone ReportsTom Shepstone
Shepstone Management Company, Inc.

Natural Gas NOW readers pass along a lot of stuff every week about natural gas, fractivist antics, emissions, renewables, and other news relating to energy.

Here’s more material sent along by Natural Gas NOW readers; great stuff highlighting the power of natural gas and the absurdity of fractivism. Check out the links and other short bits below:

A Tale of Two River Basins, Three Shared Members and No Discernible Impacts

From Energy In Depth:

According to the DRBC’s draft regulations, the Commission says that fracking “poses significant, immediate and long-term risks” to the Basin. The SRB, where more than half of all shale well development in Pennsylvania has occurred and where the SRBC has a nearly identical compact as the DRBC, would seem like the most logical place to look to determine if this is in fact a true assessment.

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And yet, there’s no way the DRBC could have come to this conclusion based on what’s occurred in the SRB.

Unconventional well development took off in the SRB in 2008, and the SRBC began continuous water monitoring at 50 stations across the Basin in 2010. The most recent report of this data, released in October 2017, found that,

“To date, the Commission’s network of monitors has not detected discernible impacts on the Basin’s water resources…”

Enough said, don’t you think?

Hudson Valley Heat Depends on Icebreakers Without More Pipelines

First, there’s the dream of those with virtues to signal, nothing to lose and time on their hands:

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CLICK to watch video of Pilgrim Pipeline “protest”

Then, there’s the reality:

If only we could sentence the protesters to ice-breaker duty.

Bigger Really Is Better

The controversy over new pipelines in some areas has less to a bigger is better strategy on the part of the industry:

Executives at some of the biggest pipeline operators in the U.S. and Canada, including Enbridge Inc. and Kinder Morgan Inc., say they pivoted to the strategy as plans for new pipelines came under attack…

Skipping new lines — and the environmental reviews and taking of land by eminent domain that they often require — and instead working under existing permits and rights of way is just common sense, pipeline executives say. Mr. Monaco said the expansions also minimize impacts to land and the environment in addition to being cheaper.

“Once the pipe is in the ground, you can do a lot of things: reverse flows, expand it, optimize it,” he added…

Enbridge is also supersizing its natural-gas network across the northeastern U.S. from the shale fields of Pennsylvania to Boston to Halifax, in Canada. Where there was once a 26-inch-diameter pipeline carrying shale gas into New England, there is now a new, 42-inch pipeline in a right of way the company secured by buying out rival pipeline operator Spectra Energy Corp. last year.

Smart strategy and one that’s brought a lot of construction activity to my backyard with relatively little controversy as Kinder Morgan’s Tennessee Gas Pipeline has been supersized with multiple projects over the last few years. Here’s a shot of the finished pipeline about a quarter mile from my home:

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The Scranton Times Now Opposes Severance Taxes?

The Scranton Times, a big fan of Tom Wolf’s severance tax proposal and all things labeled fees, revenues and taxes on natural gas, especially those imposed on consumers from other states, has a decidedly different view, it seems, on taxes imposed on the paper it buys:

The Commerce Department has imposed tariffs of between 4.42 percent and 9.93 percent on paper produced by three Canadian companies.

If the tariffs survive, they adversely will affect the entire U.S. newspaper industry and other printing companies that employ about 750,000 U.S. workers, and more than 6,000 Americans who work for the three Canadian companies.

Demand for newsprint has declined. A well-documented decline in print advertising and declining print circulation of U.S. newspapers drives the market as the transition to digital publishing continues…

Since the tariff decision defies the economics of the case, it appears that the Trump administration is using the paper issue as leverage in negotiations over the North American Free Trade Agreement. Earlier, the administration had imposed an 18 percent tariff on some types of Canadian raw lumber.

But the administration’s rationale for reopening NAFTA is to protect American jobs. This action clearly would cost American jobs.

What? Taxes imposed on products used by our businesses and consumers cost our economy jobs? Tariffs on products shipped between states threaten the ability of businesses to survive by making them noncompetitive? Demand is inversely related to price? Well, yes, most of knew all that didn’t we? But, for the Scranton Times to admit everything it has said in support of a severance tax on gas was nothing more than hyperbole intended to lend political cover to its buddy Tom Wolf? Well, that’s news!

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Scranton Times production facility in Scott Township, Lackawanna County, Pennsylvania

 Bill McKibben Fails As Fossil Fuel Production Soars

Read this report from the EIA, imagine the look on Bill McKibben’s face and smile:

In its January 2018 Short-Term Energy Outlook (STEO), EIA forecasts that total fossil fuels production in the United States will average almost 73 quadrillion British thermal units (Btu) in 2018, the highest level of production on record. EIA expects total fossil fuel production to then set another record in 2019, with production forecast to rise to 75 quadrillion Btu…

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Source: U.S. Energy Information Administration, Monthly Energy Review and Short-Term Energy Outlook

Record production levels are largely attributable to increased production of natural gas and crude oil enabled by the use of hydraulic fracturing techniques in tight rock formations. EIA expects increases in natural gas production to be the leading contributor to overall fossil fuels production growth in 2018 and increases in crude oil production growth to the be leading contributor in 2019. In both years, expected growth in natural gas, crude oil, and HGL production more than offset expected declines in coal production.

On a heat-content basis, dry natural gas accounted for the largest share of fossil fuel production in 2017 at 41%. Crude oil accounted for 29%, coal for 23%, and HGL for the remaining 7% of the total. As recently as 2010, coal was the leading source of U.S. fossil fuel production, but it was surpassed by dry natural gas in 2011 and by crude oil in 2015.

In 2018, EIA forecasts dry natural gas production will average 80.4 billion cubic feet per day (Bcf/d), an increase of 9% from 2017 levels. If achieved, this level of production would be the highest annual average on record, surpassing the previous record of 74.2 Bcf/d set in 2015. EIA forecasts dry natural gas production will set another record with 83.0 Bcf/d in 2019. Growth is likely to be concentrated in Appalachia’s Marcellus and Utica shales along with the Permian Basin in Texas and New Mexico.

How sweet it is!

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