Marcellus Shale: Powering the Nation White House Briefing ... · PA Price Differential Reduced monthly bidweek price received by PA producers & leaseholders Source: Platts Inside

MARCELLUSCOALITION.ORG | @MARCELLUSGAS

Marcellus Shale: Powering the Nation

White House Briefing

January 9, 2018

1


Our Membership

• 200+ diverse members

• Producers, midstream and suppliers

Our Focus

• Long-term development

• End use opportunities

• Addressing landowner and public issues

• Maximizing benefits to secure our region’s energy future


Associate

Members are an

integral part of

the MSC and the

industry's robust

supply chain.

More than 95% of

the natural gas in

Pennsylvania is

produced by MSC

member

companies.The MSC Board

of Directors

consists of 34

major producer

and midstream

companies in the

Appalachian

Basin.

About MSC


Legend

Marcellus /Utica Formation

Wet Gas Region

Feedstock: “Wet Gas” Region

Wet Gas

>1.2MMBtu+ per Mcf

Dry Gas

<1.2 MMBtu per Mcf


Pennsylvania:

A World-Class Player in Shale Gas Production

2nd largest natural gas producer in U.S.

10,027 unconventional wells*

• 630 shut in• 763 drilling not completed• 666 inactive

Nearly 7,917 producing wells

5.1 Trillion Cubic Feet (2016)

19.2% of total U.S. natural gas production

33 of 67 counties with at least 1 producing well

4

MARCELLUSCOALITION.ORG | @MARCELLUSGASSource: Baker Hughes

Drilling Activity in PA

111

82

71

54 5558

55

46

28

13

2934 36

0

20

40

60

80

100

120

Dec '11 June'12 Dec '12 June '13 Dec '13 June '14 Dec '14 June '15 Dec '15 June '16 Dec '16 June '17 Dec. '17

PA Rig Count 2011-2017

PA Rig Count


6

Fueling the Nation

1.07

2.04

3.10

4.07

4.60

5.105.27

0

1

2

3

4

5

6

2011 2012 2013 2014 2015 2016 2017

TRIL

LIO

N C

UB

IC F

EET

PA Unconventional Shale Gas Production2011 - 2017

Source: Marcellus Shale Coalition & PA DEP

52%31%

13%11%

92%

3.4%


7

Drilling Activity in PA

332

817

1600

1958

13511218

1372

789

504

812

576

2005

33653564

2648

29663158

2076

1321

2020

0

500

1000

1500

2000

2500

3000

3500

4000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Unconventional Well Activity2008-2017

Spud Permitted


Challenges

Vital need for Infrastructure• 24 FERC projects (Tri-State Area)

• $12.9 Billion (PA)

January 4, 2018 - highest ever-recorded North American Natural Gas Price was Observed at Transco Zone 6 – New York $175/MMBtu• Policies that have discouraged or blocked pipeline development into the

Northeast are having direct and significant financial impact to all levels of consumers

8


9

PA Price Differential

Reduced monthly bidweek price received by PA producers & leaseholders

Source: Platts Inside FERC

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

Jan Feb March April May June July Aug Sept Oct Nov Dec

$ p

er

MC

F

Natural Gas PricingPA vs NYMEX

2017

NYMEX Average PA Average

25%43%

65%

$3.93

$3.23

$2.39

$3.07


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Proposed Pipeline Projects


11

Fueling the Nation

Top Ten Producing Operators

by Volume (2016)

Operator Production (MCF)

Chesapeake Energy 704,902,247

Cabot Oil & Gas 685,481,842

EQT 504,710,429

Range Resources 474,198,321

Southwestern Energy 425,883,323

Chief Oil & Gas 284,361,956

CNX/Consol 235,853,939

Rice Energy 207,165,444

Talisman/Repsol 192,225,939

Seneca Resources 182,971,613


12

Protecting Our Environment

5245

10,563

11,762 11,71311,265

13,186

15,192

16,128

1280 1221711 528 425 404 456

768352 240 243 197 140 128 106 126

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2010 2011 2012 2013 2014 2015 2016 2017

Unconventional Natural Gas Compliance2010 - 2017

Inspections Violations EnforcementsSource: PA Department of Environmental Protection


Wholesale electric prices down 41% since 2008

Natural gas prices for end-use customers down 57% -

81% since 2008

Average annual savings > $1,200 per household

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Benefiting Consumers

Lower Prices = Customer Savings


Utility PGC Rate / mcf % ChangeCustomer

Savings

2008* 2016* 2008-2016 Annual

PECO $11.10 $3.41 - 69% $1,384

NFG $10.34 $1.92 - 81% $1,516

PGW $10.58 $3.22 - 70% $1,325

Columbia $10.25 $3.64 - 64% $1,190

Equitable $11.81 $2.72 - 77% $1,636

UGI $11.79 $5.06 - 57% $1,211

UGI Penn $10.66 $3.72 - 65% $1,249

Peoples $9.53 $2.72 - 71% $1,226

* 1st Quarter 2008 & PUC-approved rate for 2016 * Residential heating customer using 15 mcf/month

Benefiting ConsumersLower Prices = Customer Savings

2008 - 2016

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Market Opportunities

Electricity generation, heating

Combined heat and power applications

Light and heavy duty transportation applications

Feedstock for industries and other liquids use

−Rebirth of manufacturing

Exports

15


Opportunities in Power Generation

16


The Ethane Factor

17


18

Polyethylene Grades

High Density Low Density Linear Low Density


Use It Or Lose ItB

erne

Sci

o

Hop

edal

e

Nat

rium

Has

tings

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nden

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wp.

Hou

ston

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Mec

hani

csbu

rg

Sha

effe

rsto

wn

Mon

tello

Sin

king

Spr

ing

D

E

L

A W

A

R

E

Twin

Oak

s

Mar

cus

Hoo

k

Mariner East Pipeline Project

Proposed ME2 Pipeline

Existing Third Party Pipeline

ME1 Pipeline

SXL Terminal Facilities

Third Party Facilities

Propane Delivery Points

Truck Intake Point

Third Party Fractionation (for truck intake)

Marcellus Shale Formation

O H I O

W E S T V I R G I N I A M A R Y L A N D

19


Follow The Gas

20


Thank you!

David J. Spigelmyer, President

[email protected]

Jim Welty, Vice President of Government [email protected]

Patrick Henderson, Director of Regulatory Affairs

[email protected]

21

mailto:[email protected]



Documents

Marcellus Shale: Powering the Nation White House Briefing ... · PA Price Differential Reduced monthly bidweek price received by PA producers & leaseholders Source: Platts Inside