You may have heard that we are in the early stages of a trade war.  President Trump has leveled new tariffs against China, and China has responded.  So far, China has been too afraid to place a tariff on U.S. liquefied natural gas (LNG), though. 
  
Donald Trump has not been particularly consistent on many policy issues, but he has been complaining publically since the 1980s that trading partners like Japan are robbing America blind with unfair trade practices.  China has been his biggest target since beginning his most recent foray into politics.  He is particularly critical of the country’s alleged currency manipulation.  During the campaign trade experts were very skeptical of his promise to impose new tariffs on other countries, but his campaign said “he is dead serious.”  
 
After his staff reportedly held off his desire to implement tariffs for the first few months of his presidency, Pres. Trump has begun to launch escalating trade attacks against other countries.  His attacks have drawn retaliations, and the tit for tat has raised prices for American consumers.  Lumber prices are up 32% since Pres. Trump put a 21% tariff on Canadian lumber.  The European Union has put a 25% tariff on crops, motorcycles, blue jeans, and whiskey after Pres. Trump put a 25% tariff on the imports of steel and a 10% tariffs on the import of aluminum.  This is hurting American exports. 
 
China, meanwhile, has reportedly tried to focus its retribution on exports coming from areas that support Pres. Trump.  The country has put a 25% tariff on soybeans, corn, wheat, beef, pork, poultry, and automobiles.  On June 19, it was reported that China is lining up another round of tariffs on American energy exports.  Over the last few years, U.S. exports to China of oil, natural gas, and coal have been dramatically rising.  China is reportedly going to add 25% tariffs to oil and coal, but the country is apparently unwilling to take any action against America’s LNG exports.  China has been trying to move away from coal in electricity generation, and natural gas is a key part of that move.  U.S. LNG seems too important for China to mess with right now.  
 
American LNG exports are increasingly creating new markets for shale gas produced from the Marcellus Shale play in Pennsylvania, Ohio, and West Virginia.  Cimmaron Land is among the best in the business at acquiring rights in the Marcellus, and we encourage you to contact us today if you are interested in opportunities in this region.  

            
            As America and the rest of the world seeks more natural gas, it is increasingly looking to Pennsylvania.  The Energy Information Administration says Pennsylvania markets the second most natural gas in the country, just behind Texas and more than double the third-place state, Oklahoma.  One major player in getting Pennsylvania’s gas from the fields and to the market just committed to a major new investment.  
 
            In late May, UGI Energy Services announced a new expansion to its Auburn Gathering System.  The first part of the system was built in 2011.  It took an existing nine-mile distribution line and turned it around into a gathering line to take gas from Auburn county into the Tennessee Pipeline. That line starts all the way down in Louisiana, and delivers gas to northeast cities like New York and Boston. 
 
            In 2013, the Auburn system was expanded to include a 28-mile pipe connecting to the Transco Pipeline, a line that runs from Texas to New York City.  Subsequent expansions made the Auburn system a  $215 million investment consisting of 46 miles of pipe and two compressor stations.  The line runs across the Susquehanna, Wyoming, and Luzerne counties.  
 
            UGI has now committed to investing another $50 million to build two new compressor stations in the system.  One will be located in Susquehanna county and the other in Wyoming county.  These will significantly increase the amount of gas that can be pushed through the existing pipes, as the total capacity will increase by 150,000 dekatherms per day to 620,000.  
 
            All this new infrastructure only increases the value of the Marcellus shale field.  Here at Cimmaron Land, we are not newcomers trying to find our way around this remarkable land.  We have completed more than 3,000 abstracts and worked in 38 counties across Pennsylvania, Ohio, and West Virginia.  Contact us today to explore opportunities in the region.    

            Unless you have been living under a rock, you know that the biggest fear people have about hydraulic fracturing is that it may contaminate the groundwater.  Much of the fear can be credited to filmmaker Josh Fox.  His 2010 movie, Gasland, told of how he was offered $100,000 to lease 19 acres of his family’s Pennsylvania farm for drilling.  The highlight of the movie was exploding tap water that he blamed on fracking, and the film also alleged other water contamination.  
 
            Mr. Fox’s allegations have not held up well to scientific inquiry, and a study published by researchers at the University of Cincinnati last month just dealt him another blow.  A team of geologists looked at drinking water in Carroll, Stark, and Harrison counties, which are all in rural northeast Ohio.  The people living in this sparsely-populated area tend to rely on private water wells because they are so far from a town with central water processing.  
 
            The results of the study back up what the industry has been saying for years.  It is true that many wells in the area contain elevated levels of methane, the primary component of natural gas and the likely source of the explosions highlighted by Mr. Fox.  The researchers found wells with as much as 25.3 milligrams per liter of methane, which is enough to catch fire in an enclosed space.  
 
            The researchers found “no relationship,” however, between the methane concentrations and new oil and gas wells.  Moreover, the researchers tested the methane and reviewed its “isotopic composition” to determine the source.  The researchers found that the methane in the drinking water was mostly “biogenic,” meaning that it occurred naturally and independent of natural gas drilling.  It can from organic decomposition or cow waste, for example.  Some methane was also traced to underground coal beds.  The researchers did call for additional monitoring to protect against future contamination, but no contamination in this study could be linked to drilling.  
 
            ​Here at Cimmaron Land, we know that conflicts between landowners and exploration and production companies are bad for everyone.  Landowners can lose both trust and royalties, while producers can lose earning opportunities. We strive to make every lease a successful partnership.  If you are considering such a partnership, just call our land experts at (412) 212-7517.

            On May 21, a massive ship called the LNG Sakura unloaded its cargo in Japan.  The ship was carrying liquefied natural gas (LNG) all the way from the Cove Point plant in Maryland.  The shipment was a major breakthrough for America’s growing natural gas export business. Cove Point is just the second American export company to complete a shipment since the shale boom started, and shipments from America’s east coast to Japan (the world’s largest LNG customer) were made possible by a recent expansion of the Panama Canal.  
 
            The Dominion Cove Point terminal was certified to begin accepting shipments of LNG in 1972.  Dominion is a utility company providing electricity and natural gas to customers across much of the mid-Atlantic, and the company was seeking new supplies.  It received shipments from Algeria in the 1970s, and it put that gas into the local distribution systems.  In the 1990s, the plant added liquefaction capabilities, and it was used to liquefy and store gas.  Once the shale boom took off in the mid 2000s, the plant was converted to an export facility primarily under long-term contracts to serve two main customers, Tokyo Gas of Japan and GAIL of India.
 
            A tanker leaving an east coast terminal really needs to go through the Panama Canal in order to make deliveries to a place like Japan economic. The canal was completed in 1914, and it provides a quick connection between the Atlantic and Pacific Oceans, saving ships a long journey around South America.  Until very recently, the 100-year old canal was too small to properly accommodate massive LNG tankers.  A major expansion was completed in 2016, though, and the canal has had hundreds of LNG tankers pass through since.  LNG and liquid petroleum gas (LPG) ships are now the fourth-largest source of traffic for the canal.  
 
            Cove Point may be just the second operational LNG export facility in the United States, but dozens more are in various stages of development.  America is expected to become a major player in world gas markets.  The shift from importing LNG in the 1970s to exporting now is only possible because of the boom in shale gas production led by the Marcellus Shale formation.  If you would like to explore exploration and production opportunities in Pennsylvania, Ohio, or West Virginia just call (412) 212-7517 to speak with the experts at Cimmaron Land.