American Oil and Gas Reporter - March 2016 - 95

ConventionCoverage: Independent Oil and Gas Association of West Virginia
10.0 Bcfe, Knobloch revealed.
Future Scenarios
All this has implications for the future,
Potter insisted. He laid out production
projections to 2021 for three price scenarios. "Our growth scenario is crude
prices go back to $60 a barrel by 2021,"
he announced. "A year ago we had $80
or $100 in this."
RBN's "cutback" case has oil rising
just to $50 a barrel in 2021, while in its
contraction scenario "they don't get any
higher than $40," Potter said.
The natural gas growth scenario is for
Henry Hub natural gas prices to reach
$4.00 an MMBtu in 2021; in the cutback
case they go to about $3.25; and in the
contraction scenario they stay below
$2.50.
In RBN's crude oil projections, Potter
said:
* From its peak of 9.3 million barrels
a day in 2015, crude oil production in
the growth scenario rises 10.3 MMbbl/d
in 2021.
* Crude oil levels at about 9.0 MMbbl/d in the cutback scenario.
* In the contraction scenario, oil production drops a total of 1.3 MMbbl/d by
2021.
"That shows how resilient this industry
is," he attested. "If the world is waiting
for our volumes to drop, it better not
hold its breath."
U.S. natural gas production, which
increased an average of 2.8 Bcf/d per
year from 2005 through 2015, rises another
1.2 Bcf/d per year through 2021 under
RBN's growth scenario, Potter said. Under
the cutback scenario, gas production falls
about 100 million cubic feet a day per
year, and it declines 1.6 Bcf/d per year
under the contraction scenario.
Power Plants And Pipelines
The good news for Appalachia, Potter
offered, is growing gas demand in the
Northeast to generate electricity. "It went
from 56 Bcf/d in January 2011 to about
59 Bcf/d now," he reported.
Furthermore, Jason Pillai, chief commercial officer for Quantum Utility Generation, showed IOGAWV a slide delineating 12 gas-fired power plants under
construction in Ohio, Pennsylvania, Maryland and Virginia with a total rated capacity
of 11 gigawatts.
The first in West Virginia, Pillai announced, will be Quantum's own
Moundsville Power project in Marshall

County, which it acquired last October.
He said Quantum expected to begin construction as early as late spring or early
summer with an in-service target of late
2018. At roughly 600 megawatts, he said
the plant could consume 95,000 MMBtu
of gas a day.
Making the Moundsville Power plant
somewhat unique, Pillai added, is that it
is being configured to burn both natural
gas and ethane. "It will be the first plant
in this area to have this capability, and
represents the first demand side addition
for ethane in West Virginia," he said.
Also positive for Appalachian producers, said RBN's Potter, is 19.0 Bcf/d
of new pipeline take-away capacity from
34 new-build and reversal projects. Of
that, he said, 4.3 Bcf/d is headed toward
the Midwest, 4.0 Bcf/d is going to the
Gulf Coast, 5.7 Bcf/d is headed south by
way of the Atlantic Pipeline, 4.3 Bcf/d is
aimed toward the East Coast, and 700
MMcf/d will go to Canada.
Unfortunately, he added, none of that
capacity will be available before fourth
quarter 2016 and the full 19 Bcf/d won't
be in service until third quarter 2018.
Innovative Projects
Northern Natural's John said he was
"excited about the pipeline projects being
put in place to move Appalachian gas
out of this basin," although, like Potter,
he noted, "There are a lot of commitments
to fill those transportation agreements.
That certainly is a factor as we consider
what the price environment is going to

look like."
Both John and Antero's Schopp described company projects they praised
for their technical merits and positive
impact on public acceptance of the industry.
For Northern Natural, it was a "transparent well project" in which it invited
West Virginia University, Ohio State University and the U.S. Department of Energy
to "do whatever testing, monitoring, study
and evaluation they chose" on the company's two-well Morgantown Industrial
pad, John said.
"I think we made some good strides
in opening folks' eyes as to what care we
take, how thorough we are, and what
good stewards of the environment we
are," he assessed. "I was encouraged by
the results of the tests the agencies did
on the air, water, and all environmental
aspects of the well. We expect there will
be a lot more studies published about
this project."
For its part, John said Northern Natural
benefited from technology it otherwise
could not have afforded. He said the
agencies took more than 110 feet of fourinch core through the Marcellus as well
as 198 side-wall cores. John said he was
especially excited about running fiberoptics through the casing and tubing
strings to the toe of the well. "As we
treated the well, we were able to see immediately what some of the results and
pressure responses were across perforated
intervals," he said. "As we begin to
produce the well, we are able to see the

IOGAWV winter meeting emcee Dennis Xander (far left) and association President Jon
Hildreth (center) pose with morning session speakers (from left): James Crews, vice
president of Northeast development for MarkWest Energy Partners; Mike John, founder,
president and chief executive officer of Northern Natural Energy LLC; and Alvyn A.
Schopp, regional senior vice president for Antero Resources.

MARCH 2016 95

American Oil and Gas Reporter - March 2016

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