Category Archives: Natural Gas Utilization

Eight or Nine Cracker Plants?

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It’s a big news day for West Virginia oil and gas.

Joe Eddy, President and CEO of Eagle Manufacturing out of Wellsburg, WV says that the Marcellus/Utica region could support eight or nine cracker plants right now.  Come again?  Why is it, then that there are only three planned, and one of those is awfully tentative?

We’d love to see a bunch of cracker plants.  There’s an awful lot of gas in the ground that could be processed in cracker plants.  Having that much more petrochemical feedstock would drive prices down for industry, and those savings would be passed on to consumers.  It would be yet another way the fracking boom would improve our economy.  We just kind of wonder how eight or nine could be possible when one of three is having a hard time getting off the ground.

Ford is Again Producing a CNG F-150

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Natural gas powered cars aren’t exactly popular right now, what with the lack of CNG fueling stations and all.  Even in the parts of the United States where there is a higher than average density of CNG fueling stations (what’s up with Oklahoma?!), you’re going to have to think ahead a bit more about when you fill up.  Here’s the CNG Now! website where you can find public CNG stations.  You’ll see that there just aren’t that many of them.  Part of the reason for that is that very little CNG is used to fuel vehicles.  The Alternative Fuels Data Center states that 0.1 percent of all natural gas is used to run vehicles.

However, they are becoming more common.

With that in mind, Ford has stepped up it’s game and is again offering a variant of the F-150 that will run on CNG.  It also runs on some other things, but we’re not terribly concerned with that here.  It would be great if more vehicles ran on natural gas.  Natural gas burns cleaner than gasoline and we have loads of the stuff in the ground.  If you’re in a position to buy a CNG vehicle, we encourage you to do so.

West Virginia has an Energy Export Problem

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Power Plant

This article from The Intelligencer out of Wheeling, WV says that West Virginia has a lot of gas in the ground.  While that’s not necessarily news, the estimated amount going up is.

It’s exciting that there’s that much gas in the ground, but West Virginia really needs to do more with the gas.  Right now we export most of it.  We would like to see West Virginia put more of it to use here.  The cracker plant in Parkersburg, WV and the gas-fired energy plants in Harrison County and the northern panhandle are the direction we need to go.  Exporting raw materials is OK, but refining and improving it so that we can keep more of the value in state will be better.  We exported coal for decades, and now we have a lot of coal mines and a lot of coal miners who are out of work.  If we can do more with the raw product we can keep more of the money here and develop more infrastructure so we don’t feel the hurt so badly when the economy tanks and changes.

The Future of Natural Gas Prices in West Virginia

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Power Plant

Here is an article in the Wheeling Intelligencer that explains why natural gas prices will go up in the next few years.  I’m sorry it’s behind a paywall, but I think they’ll give you a couple free articles before you have to pay.  If you want to keep up with oil and gas in West Virginia, the Intellgencer is the best publication for that at present.

There are also a bunch of pipelines going in, which we don’t have time to get into today.

Which brings us to an apology.  We apologize for not posting more articles lately.  There’s quite a bit going on at the office right now, and we’ll have a post up later this week announcing one of those things.

Moundsville Power Plant: 2018

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The power plant that is being built up in Moundsville seems to be on schedule to be completed in June of 2018, just a little less than three years from today.  Of course, they haven’t even moved a shovelful of dirt yet.  Let’s hope that the construction schedule is easy to stick with.  A nice natural gas fired power plant would put a lot of this extra natural gas we have lying around to good use.  More demand equals more development equals better bonuses and royalties for mineral owners.  That’s the kind of equation even a lawyer could love.

Marcellus and Utica Producers are Still Making Money

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With gas and oil prices down, it’s been a lot harder to make money in the oil patch.  The one good thing about this situation is that producers have had to figure out how to cut costs.  Producers have convinced suppliers to lower their prices, drillers have figured out new tecDollar Signhniques, leasing has slowed down, lease prices have dropped, and people have been fired.

Most of the cost cutting measures end up in people getting fired.  We hate to see people get fired.  We’ve been there ourselves more than once.

The only good thing about it is that companies are now profitable at a much lower price point than they were a year ago.  They’re still in business, still employing people, and still paying out royalties.

Mark Passwaters over at snl.com (not the comedy show) thinks that most producers are capable of turning a comfortable profit with oil at $75/bbl.

While that is interesting in general for West Virginia mineral and royalty owners, the most interesting part of the article says that Utica and Marcellus producers are doing just fine at $3.00/MCF gas.

Why is that?  The success mantra for developers in the Marcellus has been “keep costs low”.  I’ve heard that from more than one small developer, and it’s true for the mid-majors like Antero and Southwestern, too.  They’ve been on the cutting edge of science in the shales from the beginnin

United States Burning More Gas than Coal

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imgresThis news has us a little torn.  According to a report released by the U.S. Energy Information Administration, the United States now burns more natural gas in energy production than it does coal.  While that’s good for West Virginia, it’s also bad for West Virginia.  A huge portion of West Virginia’s economy depends on coal, and has for generations.  West Virginia’s economy is being boosted by natural gas development, and will for decades.  It’s probable that natural gas will replace coal, and that West Virginia’s economy will do well on natural gas, but the transition is going to be full of heartache and misery for some folks.  The southern counties especially are going to be hard hit since there’s not as much natural gas development going on down there, and won’t be for the near future.

More Natural Gas Vehicles

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CNG in Trunk

We hope this is a long-term trend and not just a fad.  It seems that more and more fleets are turning to compressed natural gas to fuel their vehicles.

Waste Management in Waterloo, Ontario has a new fleet of CNG trucks.

Three school districts in Connecticut are switching to CNG buses.

Carnival Cruise Lines is building four new cruise ships which will be powered by liquid natural gas.

However, in the interest of fairness, we do have to note that Honda decided to quit making it’s CNG Civic.  They had only sold about 16,000 of them in the last 17 years, so under 1,000 a year.  Their limited distribution area may have affected that.

Fleet vehicles running compressed natural gas make more sense right now than consumer vehicles due to the lack of CNG filling stations.  As long as there’s gasoline available and it’s competitive in price we don’t expect to see CNG replace gasoline for consumers.  The slightly lower price and cleaner nature of CNG just isn’t enough for most consumers.

Using Natural Gas to Make Hydrogen

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Thanks to Marcellus Drilling News for bringing this one up.  We get a lot of the information that we blog about here from them.

A company called Global Tungsten & Powders Corp. in Towanda, PA is putting some of the natural gas that we’re producing here in the Marcellus shale area to make hydrogen.  GTP uses a lot of hydrogen to produce tungsten products and solid oxide fuel cells.  Right now it ships hydrogen in from Louisiana or Canada.  Being able to make hydrogen in their plant will help to keep the plant profitable, and open.  It’s less expensive to make the hydrogen from local natural gas, and the plant won’t have to scramble for hydrogen like it did in 2010 when Hurricane Katrina destroyed the Louisiana supplier.

Let’s hope other people out there come up with more uses for Marcellus natural gas.  The more it’s used, the more the price of the gas will go up, and the more royalties will be paid.