Midstream’s rapid development – and the need for still more infrastructure as the Marcellus and Utica plays continue to expand – provided a lively topic for dozens of conversations at Hart Energy’s 4th annual Marcellus-Utica Midstream Conference & Exhibition. Several presenters observed the world-class nature of what’s happening now in Appalachia.
“The Marcellus and Utica are what’s exciting now, and the midstream industry itself is exciting,” observed Steve Jacobs, president of Harvest Pipeline Co., as the conference began.
Jacobs’ presentation on his firm’s regional projects underscored a common theme: There’s a lot happening in the two plays. Midstream faces major hurdles in moving all the natural gas, gas liquids and crude to market. Another presenter, Ben Davis, partner at Energy Spectrum Capital, put the necessary Marcellus-Utica buildout in perspective when he noted requirements for billions of dollars in investment “if not tens of billions of dollars, will be needed for midstream infrastructure” to serve producers active in the plays. All agreed there’s a long ways to go, even though the region – particularly the Marcellus – shows some growing maturity.
The conference, held at Pittsburgh’s sprawling David L. Lawrence Convention Center, opened to unusual weather conditions for a Pennsylvania January: Partly cloudy skies and record temperatures in the high 60s. But that changed quickly to rain, snow and a thermometer in the high teens. More than one speaker voiced the hope that perhaps the winter of 2012-2013 may be a better one for the gas business than the warm season that covered much of North America last year.
Pennsylvania Gov. Tom Corbett, a Pittsburgh native, keynoted the conference and emphasized the industry’s potential for economic development in Pennsylvania today and in the future. “We have a bounty of resources but we have to build on them. We can’t count on gas and oil to take care of use forever,” he told the conference.
Several speakers discussed options on how to better serve gas and gas liquids producers in the region. Should midstream operators emphasize building new processing and cracking capacity in Appalachia, or should the industry develop transportation options that move production to existing customer centers in Ontario and along the Gulf Coast? Perhaps there will be some of both in coming years. These are big plays with big reserves. They hold the ability to remake North America’s oil and gas business, presenters agreed.
Regulatory and environmental issues were common topics in conference presentations. Meanwhile, a number of conference exhibitors emphasized their expertise in these areas – and drew crowds of midstream operators to their booths. Most presenters agreed Pennsylvania, Ohio and West Virginia generally offer workable regulatory environments while New York’s hydraulic fracturing ban limits development.
But Ohio has one difference. Rapid development in drilling and midstream in the Buckeye state comes in and around a larger population than that found in the more-rural regions common in West Virginia and Pennsylvania. Tom Stewart, executive vice president of the Ohio Oil and Gas Association, said his state offers “a good regulatory structure -- it’s a great place to operate.” But Ohio’s denser population requires upstream and midstream operators be aware that “you’re always close to someone.”
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