Category Archives: Marcellus Shale

climate, Environment, Fracking, Green Energy, Marcellus Shale

A Wrong Turn For Southwest Pennsylvania

Leave a comment

Photo: The bright lights and early emissions of the Shell Pennsylvania Petrochemical Complex in Potter Township, Beaver County.

Petrochemical plants are an environmental and economic dead end

By Matt Mehalik
Pittsburgh Post-Gazette Op-Ed

DEC 11, 2022 – Southwestern Pennsylvania could have a brighter and healthier future — if only our state and region made better economic investments. After all, you get what you pay for.

Instead, the region is on a path to a dead-end by pursuing a futile, harmful fossil-fuel based economic strategy. Just last month, Shell’s massive polyethylene resin plant began production near Pittsburgh and is already proving to be a threat to the area.

What’s worse, Pennsylvania taxpayers are bankrolling it. Pennsylvania granted Shell $1.65 billion in state tax credits in 2016, one of the largest tax incentives in state history. In addition, in November the state legislature and governor passed and signed a bill that provides over $2 billion in subsidies over 20 years for natural gas, hydrogen and petrochemical industries — with less than a half-day’s notice and no public hearings.

Additionally, the Department of Energy is looking to provide $8 billion in additional federal subsidies for fossil-based hydrogen hubs. Despite alternative strategies for accelerating decarbonization and promoting inclusive economic growth, our region’s leadership doubled down on a call for fossil fuel subsidies, as detailed in “Our Region’s Energy Future” by the Allegheny Conference on Community Development earlier this year.

The Shell subsidy alone would be enough to cover a payroll of $95,000 per year over 25 years for the 400-600 permanent employees the plant was expected to employ. Shell stated that at peak construction, the site employed more than 8,500 workers. However, these temporary jobs mostly went to construction workers from other states, and have dropped now that the plant is open.

Why should taxpayers continue to subsidize a mature industry that does not deliver jobs and prosperity widely to our communities, and that also locks in harmful air, water and climate pollution?

The Pittsburgh region still suffers from some of the worst air pollution in the country. Allegheny and Beaver County for example, have elevated cancer risks and rates of asthma, heart disease and early deaths. Pennsylvania as a whole has the greatest number of excess deaths due to exposure to fine particle air pollution from fossil fuel sources per person in the country. And half of the region’s pollution still comes from industrial plants.

Emissions from the new Shell plant will add to the already-devastating concentration of pollutants in our air, and undermine the country’s progress on meeting national climate goals. The Shell plant in Beaver County would be the second highest hazardous air polluter in the state, and the 20th most polluting in the country.

The Shell plant is permitted to emit 522 tons of volatile organic compounds (VOCs) and 30.5 tons of Hazardous Air Pollutants (HAPs) per year. These chemicals are, according to the USEPA, known to “cause cancer and other serious health impacts.” VOCs for example, are also known to be damaging to lung tissue. The 159 tons of fine particles the plant will release per year will further contribute to respiratory and cardiac diseases in the region.

The people of Southwestern Pennsylvania should feel confident that the air we breathe won’t make us sick. We have the right to live and work in clean, safe and healthy environments. Why are we subsidizing the opposite of this vision, particularly when it undermines national climate goals as well?

The plant is estimated to release 2.2 million tons of carbon-dioxide-equivalent emissions per year: That’s the equivalent of the emissions from 474,000 passenger vehicles, which is more than half the number of vehicles registered in Allegheny County. The plant will also produce plastic resins that will be used to manufacture more single-use plastic goods in a world that already has too much plastic. Today, 36% of plastic production goes toward single-use plastics, specifically plastic packaging.

These are not investments we should be making or celebrating in a region that shows so much promise in going beyond the fossil fuel economy. Further, they are not a proven way to secure long-term jobs or economic growth. Studies show that wind and solar manufacturing would employ more people than comparable investments in oil and gas: More than 15,000 jobs for the same investment that is producing only a few hundred jobs at the Beaver County plant.

Our neighbors in New York State understand this. According to New York’s “Clean Energy Investment Report 2022,” New York added over 24,000 jobs in the renewable energy sector between 2015 and 2021. That’s a growth of 17% after the governor announced a $1.5 bllion investment in clean energy.

New York is continuing these fossil-free investments, and the growth is accelerating. These are not temporary jobs; rather, they are being built on a solid foundation because they are not based on extracting resources that will someday run out, and because they align with the health, climate and overall well-being needs of communities. They are long-term investments, not short-term stopgaps.

Community organizations in the region understand this. Reimagine Beaver County released a vision in 2019 that outlined a more economically viable future than petrochemicals, one made possible by investing in four major sectors of economic development: energy innovation, green chemistry and manufacturing, sustainable agriculture, and riverfront recreation and tourism.

Just think of where our region would be if we had embraced this vision, instead of propping up petrochemicals and fossil fuels.

That’s why the Breathe Project calls for imagining a brighter, healthier and more prosperous future than the one promised by fossil fuels and petrochemicals. This includes building a new workforce with diverse jobs in solar, wind and other clean technologies that will include everyone from blue-collar workers to high-tech researchers. It also includes transitioning to electric cars, buses and trucks; improving bicycle lanes; and providing more public transportation options.

While our policymakers continue to fail us, we’re glad that other leaders have stepped in. We recently appreciated a huge boost from Mike Bloomberg and Bloomberg Philanthropies’ Beyond Petrochemicals campaign that will invest $85 million in new funding for local advocacy groups in these efforts.

As someone who grew up in the Monongahela Valley, I am ready to see economic and environmental optimism for our region, based on a different vision that recognizes that fossil-fuel-based industries are not in Pittsburgh’s best interests, now and into the future. It is time to go in a different direction. Stop throwing good money after bad investments. Stop subsidizing a mature, private industry that casts burdens on our communities while allowing a narrow few to reap large profits at our expense.

Our economic future should not, and will not, be hitched to subsidizing new uses for dirty materials like petrochemicals. We can have healthy people, healthy workers, a healthy economy and a healthy environment. We deserve a bright future.

Matt Mehalik is Executive Director of the Breathe Collaborative and its communication platform, the Breathe Project.

Aliquippa, climate, Economy, Environment, Fracking, Marcellus Shale

A New, Massive Plastics Plant in Southwest Pennsylvania Barely Registers Among Voters

Leave a comment

Environmentalists in Beaver County alarmed by harmful emissions from the plant once it opens say they are discouraged by most voters’ inattention, but not deterred.

By Emma Ricketts

Inside Climate News
November 5, 2022

Photo: Shell’s new petrochemical plant in Beaver County, Pennsylvania. Credit: Emma Ricketts

Environmentalists Fear a Massive New Plastics Plant Near Pittsburgh Will Worsen Pollution and Stimulate Fracking


Oct. 27, 2017 – A New Shell Plant in Pennsylvania Will Soon Become the State’s Second Largest Emitter of Volatile Organic Chemicals


ALIQUIPPA, Pa.—From the tranquility of her garden in Beaver County, Pennsylvania, Terrie Baumgardner worries that her grandchildren will grow up without access to clean air, clean water and a safe space to play outdoors.

For decades, Beaver County’s economy has been dependent on polluting industries—first steel, and more recently natural gas drilling. Many longtime residents, who remember the prosperity brought by the steel industry, have welcomed the construction of a massive new Shell petrochemical plant and the politicians that support it.

Baumgardner and other environmental activists are discouraged that local residents and politicians favor the continuation of fracking and the new mega plastics plant it has spawned, but they are not giving up their fight.

“People say that’s what we do in Beaver County—we trade our health for jobs,” Baumgardner said. “But it’s unfortunate, because it doesn’t have to be that way now.”

A reluctant activist, Baumgardner first became involved in environmental issues in 2011, when she learned about the dangers posed by fracking. Concern for the environment and health of local residents led her to canvas for signatures in 2016 as Shell moved toward building the plastics plant.

Spanning nearly 800 acres along the Ohio River, the plant is expected to open later this year. The facility will convert fracked gas into 1.6 million metric tons of polyethylene per year.

Polyethylene, made from ethane, a form of natural gas, is the key building block in numerous common plastic products—from food wrapping and trash bags to crates and bottles.


Despite assurances from Shell that the facility will be safe for the surrounding community, environmental activists have warned that the plant will cause air and water pollution, and a protracted dependence on fracking.

Under Shell’s permit, the plant can release up to 159 tons of fine particulate matter and 522 tons of volatile organic compounds per year. Exposure to these emissions has been linked to issues in the brain, liver, kidney, heart and lungs. They have also been associated with miscarriages, birth defects and cancer.

“They’re going to unload all of these toxic chemicals, hazardous air pollutants, volatile organic compounds and millions of tons of CO2 gas. What’s going to happen?” asked Bob Schmetzer, a local councilman from nearby South Heights and a long-time spokesperson for Beaver County’s Marcellus Awareness Committee. He has opposed the plant since it was first proposed 10 years ago.

Jack Manning, a Beaver County Commissioner, does not share these concerns. “I have great faith in the technology and in the competency of those that will be running the facility,” he said. “It’s a state-of-the-art, world-class facility.”

Manning blamed people’s apprehension on unfair comparisons between the environmental impacts of the plant and those of the steel mills that used to occupy the area. “Those heavy particulates are a different type of pollution,” he said.

Shell has assured residents of the safety of its plant. “At Shell, safety is our top priority in all we do and that includes being a good neighbor by communicating about plant activities that could cause concern if not expected,” Virginia Sanchez, a Shell spokesperson, said in a statement. “When we are in steady operations, it is our goal to have little to no negative impact on our neighbors as a result of our activities.”

For activists, these assurances do little to allay concerns. On a grassy hillside overlooking the massive complex, Schmetzer spoke with his friend and fellow activist, Carl Davidson. While the plant is not yet operational, the grinding sounds of industrial machinery and screeches of train cars disturbed the clear fall day.

Photo: Bob Schmetzer and Carl Davidson, standing above the petrochemical plant. Credit: Emma Ricketts


Davidson, a self-professed “solar, wind and thermal guy,” wore a Bernie cap and alluded to his youth as a student leader of the New Left movement in the 1960s. While he estimates that around one-third of residents were concerned about the plant’s potential impacts from the beginning, he expects this number to grow once it opens. “People are starting to see two things,” he said. “Number one, there is all kinds of pollution that they didn’t know about. And second, all the jobs that were promised aren’t real.”

The plant sparked hope for a revival of economic prosperity in the area. However, now that construction is largely complete and thousands of workers have finished working on the site, the plant is expected to only employ about 600 people going forward, according to Shell.

While opponents wait anxiously for the plant to begin operations, they don’t think it will influence next week’s elections. The Shell plant has been a non-issue in the tight race for the 17th Congressional District in Beaver County between Democrat Chris Delluzio and Republican Jeremy Shaffer, both of whom support continued fracking.

In the state’s closely watched U.S. Senate race between Democrat John Fetterman and Republican Mehmet Oz, both of whom support fracking, the environment has barely come up in a nasty campaign focused on abortion rights.

Similarly, fracking and the environment have hardly been mentioned in the governor’s race between Democrat Josh Shapiro, the state’s attorney general, and Republican state Sen. Doug Mastriano, a Trump supporter and election denier.

Beaver County, while only counting for 1.3 percent of the votes cast in any given election in Pennsylvania, is a bellwether, according to Professor Lara Putman of the University of Pittsburgh. “It is socio-demographically similar to counties that, collectively, make up about one-quarter of Pennsylvania’s population. So in that sense, when Beaver shifts other places are usually shifting as well,” she said.

Baumgardner called the political candidates’ silence “disheartening.”

“I wish they would have the courage to speak up, to take a position and stick with it,” she said.

However, she understands the political risks associated with taking an environmental stand in a community that believes its economic fortunes are tied directly to pollution. She just wishes this wasn’t still the case. “We have alternatives,” she said. “We just need our political leaders to embrace them and get serious about renewables and removing the subsidies on fossil fuels.”


According to Davidson, the key to awakening the public is to ensure that alternatives are tangible. Good ideas aren’t enough to make people give up the job opportunities they have, he said. Clean energy projects are great in theory, but until workers can see a real job with similar wages, many will continue to support the status quo.

Progress might be slow, but Baumgardner, Davidson and Schmetzer remain hopeful that the realities of the plant will sway public opinion once residents’ senses are assaulted with the acrid smells and cacophony of relentless sound they expect the new plastics plant will emit. They each stand ready to educate people on its health and environmental impacts, as soon they are ready to listen. They may be discouraged, but are not deterred.

“Nothing is going to shut me down as long as my grandkids are here,” Baumgardner said.


Emma Ricketts is a graduate student at Northwestern University’s Medill School of Journalism. She focuses on politics, policy and foreign affairs reporting, with a particular interest in climate change and environmental issues. Previously, Emma practiced as a lawyer in a New Zealand-based commercial litigation team where she focused on climate-related risk.

Environment, Fracking, Marcellus Shale, Organizing

Covid19 and Unions in Beaver County

1 Comment

Covid19 forced Shell to focus on workers’ health &safety at its construction site in Beaver County.

By Randy Shannon
Beaver County Blue

For months 8,000 workers were laboring, eating, and bus riding in close quarters. Some local construction workers said it was the safest cleanest site they had known. When Covid19 came around construction workers were worried but they couldn’t say anything. When a few cases showed up in Beaver County including one at Eaton Corp and one at Anchor-Hocking, then family members – spouses – decided the money Shell paid wasn’t worth risking the lives of their families.

Tina Shannon, the leader of Progressive Democrats of America starting receiving a few messages from people she knows, who had significant others working at Shell. They were concerned that the filth and the packed lunch rooms and buses would spread the virus.

The next day Tina posted a Call-In Day Event Page on Facebook and a massive email, asking people to call the County Commissioners and tell them to demand Shell shut down the construction site. As she publicized the Event, she got a lot of positive feedback. One local union friend did, however, respond by suggesting that her demand would “rob thousands of employees and their families of a living.”

Tina’s response, on March 18th, was: “Drawing everyone from throughout the County into this one place is a recipe of how to spread a virus. This is unconscionable. Take a look at Italy and then compare our very conservative numbers. We’re going to have to have federal legislation to give people income to get through this.”

In two days local folks, including people in Pittsburgh (located downwind) had bombed the County Commissioners with phone calls. The third day the County Commissioners held a press conference announcing that they wanted Shell to shut down construction immediately to prevent spread of Covid19. On March 18th Shell announced it was closing while claiming that it was safe and clean. Continue reading Covid19 and Unions in Beaver County →

elections, Environment, Fracking, Marcellus Shale

Fracking-Well Blast 60 Miles From Pittsburgh Leaked More Methane Than Some Countries Emit In a Year

Leave a comment

By Ryan Deto
Pittsburgh City Paper

Dec 17, 2019 – In 2018, a natural-gas well exploded near Powhatan Point in Ohio, a small town that sits along the Ohio River, just 60 miles from Pittsburgh as the crow flies. The fracking well was owned and operated by a subsidiary of oil giant Exxon.

According to a study published yesterday in the Proceedings of the National Academy of Sciences, this single explosion emitted a gargantuan amount of methane into the atmosphere. Over the 20 days it took for Exxon to plug the well, more than 57,000 metric tons of methane was released, at a rate of about 120 metric tons of methane per hour.

This figure, from one well in less than three weeks, eclipsed the annual amount of methane that is emitted by the oil and gas industries of France, Norway, and the Netherlands combined. The Ohio blast is now the largest known methane leak on record in the U.S. and was twice as large as the previous largest leak that occurred at an oil and gas storage facility in California in 2015.

@NaomiAKlein: Terrifying story about a blowout in Ohio that released “as much methane as the entire oil and gas industries of some nations release in a year.” EDF – which has aggressively pushed NatGas as a “bridge fuel” – explains that this could be happening every day https://nyti.ms/34tdR7f

The findings mark a step forward in using space technology to detect leaks of methane, a potent greenhouse gas, from oil and gas sites worldwide.

Methane is an extremely powerful greenhouse gas. Studies vary, but methane is generally considered to be between 25-84 times more potent of a greenhouse gas than carbon dioxide.

The study determined the scope of the leak using satellite technology, and the authors praised the mapping system to reveal just how damaging the incident was in terms of how much greenhouse gas was emitted. Continue reading Fracking-Well Blast 60 Miles From Pittsburgh Leaked More Methane Than Some Countries Emit In a Year →

Fracking, Marcellus Shale

Investigation: Cracker Plant Will bring Jobs, Pollution

1 Comment

Some medical experts said breathing will be much harder once plant is up and running

By Paul Van Osdol
WTAE Investigative Reporter

May 9. 2019 – MONACA, Pa. — The massive ethane cracker plant in Beaver County is bringing thousands of jobs to Western Pennsylvania.

But Action News Investigates has learned it may also bring thousands of tons of air pollutants to a region that already has some of the nation’s dirtiest air.

At the cracker plant site, dozens of cranes soar into the sky as thousands of construction workers assemble the petrochemical facility that will convert natural gas liquids into plastics.

The project has breathed new life into what was an industrial wasteland.

But some medical experts who are also environmental advocates said breathing will be much harder once the plant is up and running.

“To me it’s about breathing. It’s about health,” said Dr. Ned Ketyer, a retired pediatrician affiliated with Pitt’s Climate and Global Change Center.

He said the plant’s toxic fumes will affect health as far south as Pittsburgh.

“Allegheny County is already dealing with higher risks of cancer because of air pollution and I believe this is going to make things much worse,” Ketyer said.

Volatile organic compounds, or VOCs, are a major industrial pollutant. Environmental Protection Agency records show the industrial plant with the largest VOC emissions in Western Pennsylvania is the Clairton Coke Works, with 291 tons of VOCs in 2014, the most recent year available.

But the cracker plant’s state permit says it is allowed up to 522 tons of VOCs per year.

Ammonia is another air toxin.

“That can have immediate effects on the brain and the liver,” Ketyer said.

EPA records show the Coke Works and U.S. Steel’s Edgar Thomson Works in Braddock combined emitted 139 tons of ammonia in 2014.

But the cracker plant’s permit allows for even more — 152 tons. Continue reading Investigation: Cracker Plant Will bring Jobs, Pollution →

Environment, Fracking, Green Energy, Marcellus Shale

Industry Officials, Protesters Confront Appalachia’s Future as a Possible Petrochemical Hub

Leave a comment

Protestors outside the Marcellus and Manufacturing Development Conference in Morgantown, West Virginia on April 9, 2019. (Photo by Kat Procyk/PublicSource)

By Oliver Morrison

PublicSource.org

April 10, 2019 – Attendees at an industry conference in West Virginia on Tuesday cheered projections for increased petrochemical production in the next 40 years, while protesters outside held up withered single-use plastic bags to show the environmental harm of petroleum products.

Both groups, however, shared a common view that the economic hype and resulting environmental impact predicted for the region may not pan out. It’s how they feel about the prospect that diverges.

The Ohio River Valley region is projected to be on the brink of a petrochemical boom adding to its already booming natural gas industry: Production of ethane, which is used to make plastics, is expected to quadruple by 2025, according to a presentation by Brian Anderson, the director of the National Energy Technology Center at the U.S. Department of Energy.

Several top industry executives and analysts at the Marcellus and Manufacturing Development Conference in Morgantown spoke about the rare opportunity to create 100,000 jobs, an industry estimate, and bring billions of dollars in economic growth to the region, which includes Pennsylvania, West Virginia and Ohio.

“This is the chance of a lifetime to create a generational change for the region,” said Michael Graney, executive director of the West Virginia Development Office.

But the mood at the conference was not always celebratory. Several speakers focused on the urgent need to continue to sell the Appalachian region’s potential to the rest of the world. Continue reading Industry Officials, Protesters Confront Appalachia’s Future as a Possible Petrochemical Hub →

Environment, Fracking, Marcellus Shale

U.S. Geological Survey: Fracking Waste Is the Primary Cause of the Dramatic Rise in Earthquakes

1 Comment

By Jen Hayden
Beaver County Blue via DailyKOS

Feb 23, 2015 – The U.S. Geological Survey has backed-up what scientists have been suggesting for years–that deep injection of wastewater is the primary cause of the dramatic rise in detected earthquakes:

    Large areas of the United States that used to experience few or no earthquakes have, in recent years, experienced a remarkable increase in earthquake activity that has caused considerable public concern as well as damage to structures. This rise in seismic activity, especially in the central United States, is not the result of natural processes.

    Instead, the increased seismicity is due to fluid injection associated with new technologies that enable the extraction of oil and gas from previously unproductive reservoirs. These modern extraction techniques result in large quantities of wastewater produced along with the oil and gas. The disposal of this wastewater by deep injection occasionally results in earthquakes that are large enough to be felt, and sometimes damaging. Deep injection of wastewater is the primary cause of the dramatic rise in detected earthquakes and the corresponding increase in seismic hazard in the central U.S. 

    “The science of induced earthquakes is ready for application, and a main goal of our study was to motivate more cooperation among the stakeholders — including the energy resources industry, government agencies, the earth science community, and the public at large — for the common purpose of reducing the consequences of earthquakes induced by fluid injection,” said coauthor Dr. William Ellsworth, a USGS geophysicist.

Emphasis added. In the last five years alone, Oklahoma has detected a staggering 2500 earthquakes. Scientists involved in the study are calling for a dramatic increase in transparency and cooperation:

    “In addition to determining the hazard from induced earthquakes, there are other questions that need to be answered in the course of coping with fluid-induced seismicity,” said lead author of the study, USGS geophysicist Dr. Art McGarr. “In contrast to natural earthquake hazard, over which humans have no control, the hazard from induced seismicity can be reduced. Improved seismic networks and public access to fluid injection data will allow us to detect induced earthquake problems at an early stage, when seismic events are typically very small, so as to avoid larger and potentially more damaging earthquakes later on.”

Green Energy, Marcellus Shale

Booming Natural Gas Won’t Slow Global Warming

Leave a comment

Natural gas burns more cleanly than coal, but that’s not enough to reduce global carbon emissions, researchers say.

Waste gas is burned off at a hydraulic fracturing site in March 2014 near Buttonwillow, Calif. Five research teams found that natural gas alone won't curb climate change.

Waste gas is burned off at a hydraulic fracturing site in March near Buttonwillow, Calif. Five research teams found that natural gas alone won’t curb climate change.

By Alan Neuhauser

Beaver County Blue via US News & World Report

Oct. 15, 2014 – Natural gas won’t save us.

Despite the lofty claims of industry groups and President Barack Obama, the so-called natural gas revolution will not discernibly reduce greenhouse gas emissions, putting the globe no closer to averting catastrophic climate change, according to five independently developed models conducted by teams of researchers around the world and summarized in a new paper Wednesday.

"The high hopes that natural gas will help reduce global warming because of technical superiority to coal turn out to be misguided,” study co-author Nico Bauer, of the Potsdam Institute for Climate Impact Research in Germany, said in a statement. “The main factor here is that an abundance of natural gas leads to a price drop and expansion of total primary energy supply."

For this very reason, most of the studies projected, widespread natural gas consumption actually will make global warming worse.  

“Abundant gas alone will not solve climate change on its own in the absence of climate change mitigation policy,” says economist Haewon McJeon of the Department of Energy’s Pacific Northwest National Laboratory, who helped lead the American research team. “These five models are very different in its architecture and assumptions. The one thing we agreed on is it’s not going to solve climate change.”

Continue reading Booming Natural Gas Won’t Slow Global Warming →

Fracking, Marcellus Shale

‘Fracking’ Not So Danger-Free After All…Where Are Our Wind Turbines and Solar Arrays?

1 Comment

Fracking Fliud ‘impoundment’ in Washington, PA

Range Resources to pay $4M for violations at Western Pa. Impoundments

By Katie Colaneri

Beaver County Blue via NPR.org

Sept 18, 2014 – Range Resources will pay a $4.15 million fine for violations at six wastewater impoundments in Washington County. It is the largest penalty the state has imposed on a shale gas driller, the Department of Environmental Protection said Thursday.

The violations include leaks of flowback fluid – the liquid that comes back out of a well after hydraulic fracturing – into soil and groundwater. The DEP said drinking water supplies were not affected. Residents living near Range’s Yeager impoundment in Amwell Township dispute that claim and have filed suit against the company.

The Yeager impoundment is among the five the company has agreed to close as part of a consent agreement reached with the state. Range will also upgrade two others to meet what the DEP calls “next generation” standards.

“This landmark consent order establishes a new, higher benchmark for companies to meet when designing future impoundments, which is an environmental win for Pennsylvania,” said DEP secretary Chris Abruzzo in a press release.

The Texas-based company issued a nearly two-page statement outlining an “update” to its water management plans in Pennsylvania, including “thicker and better engineered liners” and real-time leak detection systems for two impoundments.

“While the company is deeply disappointed that these violations occurred, Range is excited to implement newly established best practices and technologies that have been jointly developed with the DEP over the last several months and years,” the statement reads.

Community, Economy, Environment, Marcellus Shale

Where Is Plan B? How About Manufacturing for Clean and Green Renewables if the ‘Cracker’ Fails? Or Even if It Doesn’t?

2 Comments

Site of proposed Shell ‘cracker’ plant across from Beaver and Vanport

Shell Acquires Pennsylvania Shale Gas Rights as Part of a $2.1B Deal

By Alex Nixon
Tribune Review

Aug. 14, 2014 – Royal Dutch Shell is shuffling its portfolio of natural gas holdings to increase attention on the Marcellus and Utica shale formations in northern Pennsylvania.

The energy giant announced on Thursday that it is selling drilling rights to mature gas producing areas in Wyoming and Louisiana in separate deals in exchange for $2.1 billion in cash and 155,000 acres in Potter and Tioga counties, where it operates gas wells.

The announcement followed a deal on Tuesday in which Shell said it was selling 208,000 acres in Western Pennsylvania and eastern Ohio to Rex Energy for $120 million.

“They already know what they have” in Potter and Tioga counties, said Lyle Brinker, director of equity research at IHS Energy in Norwalk, Conn. “It’s an area where they already know what they’re getting into.”

Shell spokeswoman Destin Singleton said the seemingly contradictory moves in Pennsylvania are part of the company’s regular review of its mix of energy production assets to improve value for its shareholders. Shell is working to focus its onshore drilling program on a few of the more prolific formations in an effort to boost profitability. The company wrote down the value of its shale acreage in the United States by $2.1 billion last year amid lower natural gas prices.

“We continue to restructure and focus our North America shale oil and gas portfolio,” Marvin Odum, Shell’s Upstream Americas Director, said in a written statement. “We are adding highly attractive exploration acreage, where we have impressive well results in the Utica, and divesting our more mature, Pinedale and Haynesville dry gas positions.”

In one of the two deals announced on Thursday, Shell said it will sell its Pinedale acreage in Wyoming to Houston-based Ultra Petroleum for $925 million plus the land in Potter and Tioga counties. Shell and Ultra have been partners in a joint venture in northern Pennsylvania. Shell will acquire 100 percent of the joint venture.

In the second deal, Shell will sell its gas assets in northern Louisiana, known as Haynesville, to Dallas-based Vine Oil & Gas LP for $1.2 billion.

Shell and other major oil and gas explorers regularly sell rights to fields where production is flat or declining. They then use that cash to fund exploration programs designed to discover new or more prolific fields that oil giants need to fuel growth. The Pinedale and Haynesville formations produce dry gas, which is less profitable than oil or so-called natural gas liquids, at relatively moderate rates.

“It’s a good sign that they’re still committed to the Marcellus,” Brinker said.

Continue reading Where Is Plan B? How About Manufacturing for Clean and Green Renewables if the ‘Cracker’ Fails? Or Even if It Doesn’t? →