Drilling & fracking in the Marcellus and Utica shales is a huge investment

CNX to resume drilling and maybe make airplane fuel from natural gas

From an Article by Anya Litvak, Pittsburgh Post Gazette, May 21, 2022

When the airport and the company now known as CNX Resources signed their Marcellus Shale gas agreement in 2013, there was the potential to drill as many as 45 wells on the campus of Pittsburgh International Airport. (But, only 14 have been drilled.) On Friday, the airport authority approved two new agreements with CNX that would incentivize more drilling, including in the deeper and drier Utica Shale layer.

Over the next five years, the airport will act as a marketing agent for CNX to secure customers for the gas that would come from yet-to-be drilled Utica wells. In order to be burned as airline fuel or in vehicles, that gas would need to be either compressed or liquefied — that is, cooled to a point where it turns into a liquid. That would also require the vehicles and/or plane engines to be retrofitted.

All of this will take time and money, Christina Cassotis, CEO of the Allegheny County Airport Authority, acknowledged. But she believes that with an increasing number of transportation and aviation companies pledging to reduce their carbon emissions, natural gas — which burns cleaner than diesel and gasoline — might be a short-term draw.

“Given the carbon commitments that are out there, how can we be part of helping the industry and airlines start to decarbonize immediately,” she said, invoking natural gas as a bridge fuel until cleaner fuels become available.

Both the airport authority and CNX framed this as a path to hydrogen — the subject of billions in federal funding and a focus of the natural gas industry, which envisions using its product to make hydrogen with the resulting carbon dioxide emissions captured and sequestered in a massive Appalachian storage hub.

CNX plans to build a liquefaction plant, according to spokesman Brian Aiello, with the timing yet to be determined. He also said it would produce a “naturally, not mechanically” compressed natural gas product, but the company declined to provide technical details, saying it’s proprietary.

In a fact sheet, the company referenced its “unique autonomous ultra-high-pressure separation technology, which performs consistently in harsh and high-pressure conditions, manages gas streams to be used to generate electricity and power — as well as hydrogen — in the immediate proximity of the wells.”

The timeline for adoption of natural gas derivates isn’t clear yet. Pittsburgh International will loop gas from CNX wells and solar power into its own microgrid, now in place.

“I think it depends on who’s asking, how motivated the engine manufacturers are,” Ms. Cassotis said. “Maybe it’s not an airline. Maybe it’s the snowplow.” She said the airport is looking at its own operations and evaluating ways to use more sustainable fuels. For example, it is pursuing a study of the potential to use organic waste to generate sustainable aviation fuel. “One thing at a time,” she said. “What the new agreement does is it puts some skin in the game for us — and it allows for a little bit of an additional royalty if we help” CNX sign up customers. Specifically, the airport stands to get up to 5% on the sale of any compressed or liquefied gas that it brokers, officials said.

The more immediate impact might come from revising the airport’s existing agreement with CNX — the one signed in 2014 that delivered a $46 million signing bonus and more than $57 million in royalties since the first Marcellus well went into production in 2016.

In exchange for a commitment from CNX to drill new wells, the airport authority has agreed to have post-production costs deducted from its royalties. Such costs include expenses incurred by CNX to get the gas from the wellhead to the point of sale. The airport authority’s original lease specifically prohibited deducting these costs from its 18% royalty, which Ms. Cassotis said has held CNX back from drilling additional wells.

The amended lease now allows for up to $1.60 for each million British thermal units to be withheld from its royalties. For context, the average price that CNX received for its gas last year was $2.57 per million Btu. The cost of gas has increased drastically in recent months. Eric Sprys, the airport’s CFO, estimated this would have the effect of slicing up to 45% from its royalty revenue. But Ms. Cassotis noted that a 45% cut is better than no new drilling and therefore, no new royalties. “We’re each getting something out of the deal,” she said.

According to CNX, the airport authority stands to add $24 million in Marcellus royalties and up to $27 million in Utica royalties by 2030 as a result of these agreements. CNX gas already powers a microgrid at Pittsburgh International Airport, which also includes a solar panel installation.


See Also: Special Focus: Well Completion Technology ~ “Using data from drilling to guide completion designs,” Kevin Wutherich (Drill2Frac), World Oil, Volume 343, No. 5, May 2022.

Existing but previously unused data obtained during the drilling process can now be used to enhance completion design. The author outlines the available data and discusses how it can be incorporated into the completion design process and ultimately provide economic benefits to an operator.


Scientists, engineers, economists and political leaders have a responsibility ...

When will ‘economic growth’ account for environmental costs?

From the Article by David Shearman, The Hill ~ Energy & Environment, May 12, 2022

Human health and the natural environment are indivisible. A recent article in the journal The Lancet reminds us that “economic decisions on the environment have major impacts on human health, and health and wellness depend on a flourishing environment.”

Those living in vast cities may find this statement difficult to grasp and many economists certainly do, for the words “natural environment” have now to be changed to “natural capital” for their understanding. We live in a world where economic thinking rules our lives, whereas many believe it should be our servant in delivering an equitable and secure future.

When leaders of most Western nations continue to puff out their chests to announce their latest increase in Gross Domestic Product (GDP), or rate of growth, they expose their impotence to manage a nation’s future by failing to recognize environmental costs.

Or as written more politely by Stephen Posner and Lydia Olander, in The Hill, “While congressional leaders debate trillions of dollars of federal spending, they have a critical blind spot” for they are “not informed by a complete accounting of the nation’s assets, leaving out many critical services that nature provides.”

After nearly 70 years of GDP in economic ideology and practice, the World Bank is having second thoughts about GDP as a measure of “growth” for it takes no account of natural and human capital used to achieve it.

Indeed the bank’s “The Changing Wealth of Nations 2021 Managing Assets for the Future” report now seriously questions the use of GDP in its present form and may at long last provide a glimmer of hope for the world to have a sustainable future.

On “natural capital,” the report states “mismanagement of nature and failure to consider the longer-term impacts of our actions can carry severe consequences, even if they might not be immediately evident. We therefore need an expanded economic toolkit, including broader measures of economic progress, to secure our collective prosperity and even sustain our existence as a species.”

The report notes that “in countries where today’s GDP is achieved by consuming or degrading assets over time, for example by overfishing or soil degradation, total wealth is declining. This can happen even as GDP rises, but it undermines future prosperity.”

In Australia with an election due on May 21, the government has proudly announced a current GDP of 4 percent, yet it may well be minus 4 percent if the loss on natural capital is accounted for, due to prodigious land clearing, urban expansion and extensive environmental damage from mining. This may also be the case in the U.S. but there has been little attempt to measure it.

The issue is of pressing importance because world food supply is threatened by war, harvest failures from climate change extreme events and by supply problems. This is a threat to one of our life support systems, the living soil, the ecology of which together with the surrounding services from biodiversity provide our food. The research of many scientists defining these threats should galvanize action.

The World Bank 2021 report may have been influenced by the report “The Economics of Biodiversity,” by eminent economist Professor Partha Dasgupta, which was cited in a previous article in The Hill. Dasgupta pointed out that GDP does not include “depreciation of assets” as such as the degradation of the biosphere. Economic progress has been based on the extraction of resources from nature and the dumping of waste back into it. When extraction and dumping exceed nature’s capacity to repair itself, natural capital shrinks as do biodiversity and the essential environmental services they provide.

A basic tenet of any policy or practice is that it should be able to measure its effect accurately so it is now vital to establish environmental accounting to place a value on natural capital as explained in an article from the Harvard Kennedy School.

Indeed, one has to ask why the U.S. has been tardy to adopt the UN System of Environmental-Economic Accounting (SEEA) which commenced in 2012, when about 90 countries have already done so. The answer may be that the U.S. favors of a free-market system that embodies deregulation and is the leading instrument in disregard for the consumption of natural capital. Indeed, even recent articles from eminent business schools fail to mention the environment as it related to the U.S. economy.

It is also important to reflect that for too long we have failed to acknowledge and use the inherent knowledge of many indigenous peoples on land management. The free-market system has moved Western civilizations far from such understanding.

Reform must be initiated by a fundamental change in the thinking of economists and by politicians of both persuasions. Bipartisan reforms will become all the more necessary when climate-driven conflict emerge, and reforms could offer security, especially to rural constituencies who understand food production. Given the unprecedented impact we’ve had on land, the recent sobering UN land report is essential reading for all members of Congress as they consider economic policies — not just climate action.

A vital step in developing the World Bank’s “expanded economic toolkit” should be to educate the public and business on reform of GDP to put a value on nature so providing an incentive for government to protect it. Currently, “Real GDP” denotes GDP adjusted for inflation. Let us have “true GDP,” which encompasses environmental loss.

But we must realize that reform of GDP is only one piece of a thousand others needed to complete this jigsaw puzzle in the next few decades, if the planet is to remain viable for human life. The other pieces — including climate change, pollutions, toxic chemicals, water security, sea and land ecology, population growth, consumption, conflict — must all fit together as they are interrelated. Only in fitting together the puzzle can we ensure out survival.

>>> David Shearman (AM, Ph.D., FRACP, FRCPE) is a professor of medicine at the University of Adelaide, South Australia and co-founder of Doctors for the Environment Australia. He is co-author of “The Climate Change Challenge and the Failure of Democracy” (2007) commissioned by the Pell Centre for International Relations and Public Policy.


See Also: Americans Largely Favor U.S. Taking Steps To Become Carbon Neutral by 2050, Alec Tyson, et al., March 1, 2022

Majorities of Americans say the United States should prioritize the development of renewable energy sources and take steps toward the country becoming carbon neutral by the year 2050. But just 31% want to phase out fossil fuels completely, and many foresee unexpected problems in a major transition to renewable energy.


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