3/8/2013: 'Bluegrass Pipeline' to bring Marcellus and Utica shale to Gulf Cost; Fracking in Illinois?

Venture proposes 'Bluegrass Pipeline' to the Gulf Coast – “More natural gas liquids extracted from underneath Pennsylvania will start flowing to petrochemical facilities and export markets near the Gulf Coast through a new pipeline project announced Thursday. Williams, an energy infrastructure firm, and Boardwalk Pipeline Partners LP said their proposed joint venture will build new pipelines and upgrade existing ones to provide a pathway for liquids like ethane to move from the Marcellus region in Appalachia to facilities in Texas and Louisiana. The so-called "Bluegrass Pipeline" would transport up to 400,000 barrels per day of natural gas liquids from Pennsylvania, Ohio and West Virginia to the Gulf Coast, where the liquids can either be processed by that region's bevy of petrochemical facilities or shipped to other markets.” (Post-Gazette)

Illinois fracking deal could become model – “CHICAGO -- After years of clashing over the drilling method known as hydraulic fracturing, or "fracking," the oil industry and environmentalists have achieved something extraordinary in Illinois: They sat down together to draft regulations both sides could live with. If approved by lawmakers, participants say, the rules would be the nation's strictest. The Illinois model might also offer a template to other states seeking to find a middle ground between energy firms that would like free rein and environmental groups that want to ban the practice entirely… In Illinois, it came down to "do we accept the invitation to go to the table or walk away and allow industry to write the rules?" said Allen Grosboll, co-legislative director at the Chicago-based Environmental Law and Policy Center. "For us to say we were not going to participate, and drive the hardest deal we could to protect environment, would have been totally irresponsible." The Natural Resources Defense Council supported a failed bid for a fracking moratorium last year. So with lawmakers clearly ready to allow fracking in southern Illinois, the NRDC wanted to ensure that there were significant safeguards, including making drillers liable for water pollution, requiring them to disclose the chemicals used and enabling residents to sue for damages. Talks occurred over four or five months, mainly at the Statehouse in meetings led by state Rep. John Bradley, a Democrat who lives in the area where fracking would occur. Mr. Bradley whittled negotiators down to a core group: four from industry, four from environmental groups, plus representatives of the attorney general's and governor's offices, regulatory agencies and lawmakers, said Mark Denzler, vice president of the Illinois Manufacturers' Association. That group was pared further for the toughest negotiations, including talks with outside technical experts on complicated issues, said NRDC senior attorney Ann Alexander. The deal was done by late February. It has yet to be considered by a legislative committee, which must endorse the proposal before sending it to the full House.”” (Post-Gazette)

How shale energy is bringing America and China together – “Despite their constant squabbles, there is one area of industry where America and China are tentatively making friends. That is the field of shale energy, where the controversial drilling technology known as “fracking” is used to pump water into shale rocks to remove oil and gas. Because the US has a huge amount of untapped shale reserves and leads the world in extraction technology, it may be the on the verge of total energy independence. China also has great prospects in shale, with gas reserves that may even be bigger than the US’s and Canada’s combined.  But it lacks the expertise to turn its reserves into energy. So Chinese companies are chasing investments (paywall) in America’s shale industry to access technology that can help it turn its reserves into energy. Chinese oil giant CNOOC has spent billions investing in shale projects operated by America’s Chesapeake Energy. And more Chinese companies are marshalling cheap loans from Beijing government-backed banks to strike similar partnerships, according to Bloomberg. China definitely lacks America’s shale extraction expertise, says Neil Beveridge, a Hong Kong-based analyst at research house Sanford Bernstein. He adds that Chinese companies are pursuing investments in US projects to “access technology and then apply those technologies to China.” That idea is not guaranteed to work. ”As investors in projects, Chinese companies can attend meetings, see work programs and budgets, and generally access a lot of data,” says Beveridge. But what Chinese companies cannot glean from meetings is the engineering experience  that is needed to capably extract energy from shale and that the US has built up over the last two decades.”” (Quartz)

Fed survey: Pa. shale gas boom regions robust - “PITTSBURGH — A Federal Reserve survey of regional economic trends says activity coinciding with the Marcellus Shale natural gas boom in Pennsylvania has been robust. The Fed's latest Beige Book, a snapshot of business conditions in the agency's 12 regional bank districts, notes that eastern and central Pennsylvania banks in shale gas areas in the agency's Third District "described customers paying down loans with royalty money and avoiding further debt by paying cash." In the Fourth District, which includes western Pennsylvania and Ohio, the survey says shale gas activity is expanding at a robust pace, while conventional oil and gas was steady. "Shale gas producers expanded payrolls, while employment at conventional oil and gas firms was flat," the Fed noted… Meanwhile, the boom also is creating some local economic worries. "Dealers in the eastern part of the District are apprehensive about losing technicians to the shale gas industry, which may put upward pressure on wages," the Fed said. Bryan Routledge, a professor at Carnegie Mellon University's Tepper School of Business in Pittsburgh, cautioned that the Beige Book contains anecdotal information about business trends, not hard numbers. "But it is interesting that people are mentioning shale," Routledge said, calling the report a good example of how the Fed can get snapshots of possible new economic trends. The Fed noted that the boom is about more than just drilling. Manufacturers and processors are starting to expand in the Fourth District, using the natural gas both for power and to make other consumer goods. "Beyond the gas fields, energy projects are attracting substantial investment interest and loan opportunities for larger banks," the Fed noted. On the other hand, the Fed said, coal production fell in the Fourth District and "was expected to decline further with a shift in demand toward low-priced natural gas and stricter environmental regulations."” (Wall Street Journal)

Top New York Republican Senator tries to stop potential fracking moratorium from reaching Senate vote- “Senate Deputy Majority Leader Thomas Libous, R-Binghamton, said his goal is to “make sure no (moratorium) bill passes the Senate.” Libous, a staunch fracking supporter whose district sits within the gas-rich Marcellus Shale formation, said he doesn’t want to see the issue on the Senate floor for a vote. “I’m going to try to make sure that it doesn’t,” he said Thursday. “I feel that strongly on that issue.” Libous’ comments came a day after the state Assembly passed a bill that would prohibit drilling in the Marcellus and Utica shale formations until May 15, 2015. On Tuesday, Sen. David Carlucci, D-Clarkstown, Rockland County, introduced a similar but separate bill in the Senate. Carlucci is a member of the Independent Democratic Conference, which shares control of the chamber with the GOP. Opponents of fracking -- who say the technique could cause irreparable environmental harm -- are hoping the IDC may be able to get a vote on a moratorium. Supporters -- who point to gas drilling’s economic and energy benefits—will be leaning on the GOP to block it. Carlucci on Thursday said his bill would ensure a decision on fracking isn’t made on an “arbitrary timetable.” His legislation would tie a moratorium to the completion of two outside studies of shale-gas drilling’s impacts: one from the U.S. Environmental Protection Agency and the other from Geisinger Health System.”” (Democrat and Chronicle)