“May You Be Blessed to Live in Interesting Times” -Chinese Proverb

 

ShureLine Construction attended Power and Light expo and conference in Baltimore May 18-20. Richard McMahon, the executive director from Edison Electric Institute, was the keynote speaker and opened the conference. Of all the players in the power industry: nuclear, coal, biomass, geothermal, CHP, wind, hydro, and solar, Mr. McMahon noted in his first sentence that the "game changer" in the power industry was in fact unconventional (shale) gas and specifically the Marcellus Shale. He felt that shale gas play, combined with renewable energies is going to revolutionize how electricity is generated. Rather, it is horizontal drilling that the hydraulic fracturing process has improved the efficiency of procuring shale gas whose cost per cf is expected to decrease as supply and demand balance out. Ultimately, NG is expected to be 65% cheaper than oil. Mr. McMahon asserted that there has been rapid growth in the past ten years where currently 20% of the natural gas supply in the United States is served by unconventional gas; however, this is expected to surge to 50% by 2035. Shale gas has overtaken liquid natural gas (NGL) as a significant source of natural gas (NG) and has actually served to increase production from older wells that were thought to be inactive/low producers. Although it wouldn't be economically or logistically feasible to build only NG power plants, 10 NG plants can be built for every 1 coal, effectively over taking the coal industry in the race for power delivery. Instead, the keynote panel collectively agreed that there needs to be a balance struck in the power portfolio as all plants can't be built of one type of power source. Calpine proposed 25 new plants which will largely rely on NG. Not that coal will become a dinosaur; rather it will be a lesser part of the power equation particularly in light of new FERC regulations that are focusing on reducing the carbon foot print of entities of any kind emitting more than 75,000 tons per year (tpy) of emissions. Ultimately, the sentiments were that the introduction of unconventional gas as a major player in the power industry will create a more environmentally friendly trifecta for power delivery, contributing to the industry goal of smart grid technology.

    With respect to renewable energy portfolio standards, 31 states have quota requirements to meet with each state having different targets, timelines, and eligible resources with an estimated levlelized cost of new generation. Furthermore, the dominant focus will be on "Smart Grid" transformational technology (using a combination of solar, wind, NG, hydro, coal, biomass, etc. to constitute a power grid to serve a given area as opposed to a traditional singular power source). The power industry expects to see expanded opportunities on the customer side of the meter, smart meter that is, with new customer relationships, better customer energy control and new strategic partnership opportunities (that is taking different power sources/providers and integrating them and/or doing so with existing ones better). Currently in Texas, smart grid technology is in its infancy stage and has taken a foot hold. Duke Energy is planning to install hybrid car charging stations throughout Texas in order to promote mainstreaming their smart grid and renewable energy business model. However, with the current design, if the wind is not blowing that day, or the sun not shining and the energy load has to be drawn from NG, there are current equations and systems in place to account for who gets what carbon credit and who pays for what when one or the other source is not operating. As far as smart meters go, only 6% of customers have them, and the challenges lie in consumer education and cost/not seeing the savings in the long term as well as who will regulate them (state? Federal? FERC?). At present, the University of Delaware is actively using smart meter technology and the power industry hopes that they will lead the charge for other educational institutions and large energy consumers. It was the general consensus of the panel that how we as a country consume power and how we market power is out of sync so the only logical link is greater consumer education in order to communicate the benefits of the smart meter over the long term.

Of course another game changer is the environment, with technology bending the curve for carbon emissions capture and how the U.S. climate change will effect economic growth with congress struggling to address this through legislature. Summarily, the electric utility industry will be transformed by significant capital expenditures with cost of capital headwinds, unconventional NG play, climate change, environmental regulation, and smart grid technology. Lastly, increasing cyber security is another major concern of the smart grid and power industry moving forward.

The American Power Act was another central point of discussion by the panel that consisted of members from Duke Energy and Calpine. They collectively agreed that the institution of a good old fashioned conservative cap and trade ultimately drive down the cost of utilities over time. The government is about to invest $1T in new energies with respect to the electric industry, so why not let it be in cleaner sources that will eventually offset the costs associated over time. Essentially, this would necessitate supporting climate change legislation as a key driver. The general sentiments were that it's a given that costs for utilities will increase over time so why not have those costs be associated with cleaner energy endeavors. Furthermore, it was ironic to hear that the power industry is currently asking to be regulated by the government in order to improve consumer confidence/public opinion and they support amending the Clean Air Act to further prove their point as it hasn't been re-examined in 20 years. Overall, the theme of the entire keynote was aptly summarized by Mr. McMahon's reference to the old Chinese proverb: "May you be blessed to live in interesting times." It is undoubtedly the emergence of the Marcellus Shale play (despite the existence of numerous other NG producing shale lines for decades) into the energy arena that will quickly evolve from interesting to revolutionary.

Natural Gas Roundtable: Understanding the Operational Logistics of Nat Gas from the Classroom to the Field

 

ShureLine Construction attends the Eastern Natural Gas Roundtable at Rodger Morris University in Pittsburgh. A three day workshop and expo, the NGRT was extremely beneficial to those looking to understand more about midstream and downstream operations which included, but were not limited to: compressor station design & construction, glycol dehydration, Technical & Engineering ,Team Leader & management Training, Intermediate Gas Engine Maintenance, Yard Valve Maintenance , Intermediate Reciprocating Compressor Maintenance , Auxiliary Equipment Maintenance, and sustainability. Largely attendees were engineers and those in the field seeking continuing education credits and were currently operating compressor and booster stations from EQT, and Columbia Gas (I'm sure there were other O&G's represented, but those were the most visible). Classes were packed and the vast number of years of cumulative experience lent towards an enhanced learning experience as those in the trenches enhanced the instructor's theoretical examples. I personally found it fascinating and the opportunity to actually be able to sit and pick the brains of those living the Marcellus (and other shale plays throughout their careers) was priceless. Although from an exhibitor's point of view, Rodger Morris was ill-equipped to provide suitable set up (it was by no means conducive to bringing in their wares as it pertains to large equipment, it was an extremely challenging for those with handicap accessible needs, and they were highly restrictive as to when they could set up/come in each day, food was cold, it was mainly suppliers who had little need to sell to one another necessarily & needed more compatible end-user companies to be present, etc.) Nonetheless, the learning portion and networking capabilities were worthwhile. I hope that Penn State does something comparable soon so those that are in the opposite side of the state have the opportunity to convene, learn, and establish/enhance working relationships with ancillary businesses within the oil & gas/energy industries which will only further serve to grow the direct and indirect impact to the state economy.

ShureLine Construction Attends Tri-County Oil & Gas Expo

ShureLine Construction was one of more than 700 that attended Tri-County Oil and Gas Expo. The originally anticipated attendance of only 250 was a severe underestimation with the ever growing fervor surrounding the Marcellus Shale play. The pinnacle moment of the weekend seemed to be the mixer held at the Hilton Gardens in Southpointe where presenters essentially echoed what seems to quickly becoming a battle cry of those currently engaged in unconventional gas industry or striving to break in like many there: Welcome to the gold rush of our lifetime. The scope and scale of what we currently know to be the projected daily production cubic feet of natural gas (NG) available with the Marcellus is approximately 550 MMCF and climbing to 2900 MMCF per day by 2012. However, with innovations in geology and seismology techniques used to determine the virtual topography of the shale and the subsequent available NG and oil, as well as the potentiality for the price per cf of NG to drop to a point of greater economic feasibility and create the possibility of drilling deeper than is currently fiscally solvent to do so, there exists distinct possibility that we've only discovered the tip of the iceberg.

While every foreseeable business was in attendance at the Washington County Fairgrounds, with vendors spilling out into the unseasonably cold, blustery day and sandwiched throughout the halls there were three breakout sessions being rotated throughout the day. The sessions addressed questions on every business owner's mind: how to gain traction with the oil and gas companies (both on the exploration and Procurement (E&P) and midstream sides)and become an approved vendor, business opportunities available and how to leverage numerous local, university, foundation, and governmental resources to obtain financing and an overview of the regulatory framework that governs the oil and gas industry in PA as well as OHSA requirements as they pertain to working within the industry. CNX Gas, EQT Corporation, Admiral Well & Platinum Pressure Services, Washington County Chamber of Commerce, Range Resources, Marathon Oil, and the Southwestern regional office of the PA DEP were among the presenters. I was surprised that the breakout sessions weren't better attended, however, there seemed to be a lack of clear promotion online and many exhibitors had no idea there were sessions available. Surprisingly, there were many members of the community present who shared their experiences with drilling operations and the DEP, both positive and negative. As an aside, as operations within the Marcellus ramp up, the coal industry must be feeling the heat I noticed the deeper I drove into to former coal country now being threatened by cleaner unconventional NG production, the billboards and commercials proclaiming the need to preserve the industry were inundating me at an alarming rate that reeked of desperation. Interestingly enough, they were followed by NG commercials touting the clean energy benefits beneath our feet that would give the PA job market and economy the shot in the arm that it needs. Despite its momentous efforts, it definitely appears that the coal industry is hanging on by its fingertips. O&G has come in like gang busters, the focus on cleaner emissions and lessening our carbon footprint through retrofitting current coal fired power plants, has signed the walking papers for the coal industry. There is so much more to be said about this weekend's B to B that I can't possibly capture here: my own self-guided tour of a drill site, Frach Tech frac water stating area and processing plant, that I welcome you to contact me to discuss all the other fascinating insights.

Renewable energy siting in PA: wind turbine farm Somerset PA

Josephine Sabillon, Business Development
Shureline Construction
(o) 302-636-0295 ext. 24.
(c) 302-420-4499
(f) 484-331-6292

ShureLine attends Marcellus Midstream Conference and has a front seat to Pennsylvania's Renissance

ShureLine Construction attended the first midstream conference of its kind in the Northeast on April 19 & 20th where oil and gas industry's giants presented their current and projected agenda for developing unconventional natural gas in the NY/PA/WV/OH/MD corridor. The attendance greatly exceeded the originally expected 400, topping more than 800, with representatives abounding from upstream, midstream and downstream sectors within the expo portion of the event. The energy in the room was infectious, and the Marcellus gaining momentum, as everyone knew the gold rush of our lifetime was upon us and we all had front row seats. The notion of Pennsylvania being largely responsible, as 63% of PA is comprised of the Marcellus Shale, for ending our Nation's addiction to foreign oil well in advance of 2014 where a barrel of oil is expected to top $220, was surreal. Although 32 out of 50 states posses shale lines and produce unconventional gas, the current projected 9.6 trillion cubic feet of gas, according to geologists, within the Marcellus Shale is expected to support current natural gas consumption in the entire United States for at least 100 years. Those numbers may change as more areas within the shale line are developed and innovation within seismology techniques occurs. Clearly, Pennsylvania is strategically positioned at the forefront of this gold rush, the first time since oil was discovered here in 1859, as a result of fortuitous geography. The development of unconventional gas within the United States is going to become a global force to be reckoned with, subsequently turning OPEC on its head and tipping the scales of power in our favor, quite possibly with Pennsylvania region in the driver's seat. PA's economy, through both direct and indirect impacts as a result of midstream activity in previously economically defunct areas, realistically stands to lead the U.S. out of its domestic recession. Specifically, through grand scale job creation and the prospect of becoming a natural gas and oil exporter.

To set this in a larger context and make it more tangible for the lay reader, rather than a "pie in the sky" speculation, since 2004 Allegheny, Chautauqua, and Cattaraugus within New York state have been drilled and pipelines constructed to serve markets within NYC and Northern New Jersey currently. Currently there has been a moratorium placed on drilling within the NYC watershed, concerted efforts by various energy companies to satisfy those residents that benefit from the watershed comfortable that their drinking water will not be contaminated by the hydraulic fracturing process which was another hot topic of discussion although informally throughout the conference as it stands at the forefront of controversy with environmental interest groups. As of 2010, approximately 5100 drilling permits were issued in PA with the intention to develop transmission infrastructure that reaches Chicago. Without reservation, it stands to reason that Pennsylvania will experience a renaissance that will hopefully only gain momentum across the nation.

ShureLine Attends GlobalCon 2010

ShureLine Construction's business development department attended GlobalCon (TM) 2010 and took away a tremendous amount of knowledge and contacts pertaining to exciting new technology and industry trends within the industrial sector. Presented by the Association of Energy Engineers, GlobalCon is designed specifically to facilitate those who need to get up to speed on the latest developments in the energy field, explore promising new technologies, compare energy supply options, and learn about innovative and cost-conscious project implementation strategies.
The multi-track conference covers a variety of topics, and gives you the opportunity to hear first-hand from some of the major players in the energy field. The expo portion emphasized four critical areas of leading edge technology and related services that included:
HVAC and Smart Building Systems, Renewable & Alternative Energy / Onsite Generation
Lighting Efficiency as well as Plant and Facilities Management. ShureLine looks forward to participating as exhibitors in 2011.

ShureLine Attends Marcellus Shale Line Environmental Impacts Conference at Temple University

ShureLine Construction's business development department attended the all day conference at Temple University put on my Dr. Michel Boufadel, Chair of the Engineering department, in response to the numerous environmental interest groups concerns over the ecological impact that drilling and hydraulic fracturing ("frac-ing") techniques pose to Pennsylvania woodlands, waterways, and the public's drinking water. A panel that was comprised of representatives from the DCNR, PA DEP/EPA, VP of Corporate Development for Chesapeake Energy, Public Affairs liaison for Chief Oil and Gas, geologists, and concerned parties from environmental interests groups such as the Delaware River Basin addressed both current and future threats that the process of procuring natural gas from the Marcellus Shale Line poses. However, a balanced argument by Chesapeake Energy and Chief Oil and Gas was presented that lauded their intention to take a socially responsible approach to drilling and fracing that would both serve to lessen any deleterious environmental impact and give Pennsylvanians current $2 Billion budget deficit and the joblessness rate the shot in the arm it needs to both figuratively and literally "save the farm." Currently, where energy companies are actively doing and proposing exploration and procurement of natural gas, have been in areas within the state that have ironically both spearheaded Pennsylvania's economic boom since the discovery of oil in 1859 and its decline post-industrialism. More specifically, the procurement of natural gas from the Marcellus Shale, the richest of all shale lines discovered thus far in the United States, will bring an estimated 130,000 new and direly needed jobs to the state. This does not include all the ancillary industries, construction and non, that are both involved in the processes and directly effected such as hotels and local stores that were dangerously close to . Although one can argue that the devil is in the details, clearly there is an ethical debate at stake and delicate balance to be struck between economy and ecology. Nonetheless, the economies of scale created within the states the Marcellus encompasses, as well the liberation it offers us from foreign oil, fossil fuel procurement, without reservation, stands to be the "gold rush" of our lifetime. ** If you'd like to discuss the particulars of the conference or share ideas, I'd love to hear from you!