COVID Impact on PA Landowners: Low Royalties, Lease Expirations

The Washington & Jefferson College Center for Energy Policy and Management (Washington, PA) is hosting a free webinar series on “Effects of COVID-19 and the Economic Downturn on Western Pennsylvania Shale Gas Development” during June and July. Two of the three sessions have already been held, including a session yesterday that discussed the impacts of COVID-19 on landowners who have leased their land for shale drilling. According to the speaker, there have been two notable effects of the virus for landowners: lower royalties and drillers not renewing leases (allowing leases to expire).
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Tennessee Gas Pipeline Plans Compressor Stn for N. New Jersey

In March 2019 natural gas utility Consolidated Edison, which supplies Manhattan, the Bronx and most of Westchester County, slapped a moratorium on new natural gas customers from hooking up to the grid in Westchester due to lack of gas supplies (see Moratorium on New Gas Hookups in Westchester County Begins Today). In April 2019 Con Ed announced a deal with Kinder Morgan’s Tennessee Gas Pipeline (TGP) to flow more gas to Westchester (and NYC), but not until 2023 (see Con Ed Deal May End Westchester, NY Gas Moratorium…in 2023). We have more details about TGP’s plan, including a plan to construct a new compressor station in northern New Jersey. Good luck with that!
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Bankruptcy Judge OKs EdgeMarc Energy’s Final Chapter 11 Plan

EdgeMarc Energy, headquartered in Canonsburg, PA (once with 50,000 acres of Marcellus/Utica leases), filed for Chapter 11 bankruptcy in May 2019, looking to sell all of the company’s assets (see EdgeMarc Energy Files for Bankruptcy, Blames Revolution Pipe). It was touch and go for while as to whether EdgeMarc would be required to file for Chapter 7 (total liquidation) or Chapter 11 (live to fight another day). Yesterday the bankruptcy judge signed off on a final Chapter 11 plan.
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PA Senate Virtual Hearing Blasts Gov. Wolf’s Carbon Tax Plan

Yesterday the Pennsylvania Senate Environmental Resources and Energy Committee held a virtual hearing on Gov. Wolf’s plan to bypass the state legislature and force the state to join the so-called Regional Greenhouse Gas Initiative (RGGI), a group of northeastern states attempting to assassinate coal and gas-fired power generation by taxing it to death with an insane carbon tax (see Gov. Wolf Goes Bonkers: EO Destroying Gas-Fired Elec, Carbon Tax). Committee Chairman Sen. Gene Yaw (Republican) slammed RGGI in his opening/closing remarks. So too did a number of business leaders who addressed the hearing, telling Senators RGGI will be an economic disaster for the state.
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EIA Says U.S. LNG Exports Fall by Half in 2020, Recovery Late 2021

As we have been saying for some time, LNG exports from the U.S. are low and staying low for at least a few more months (see May NatGas Deliveries to US LNG Plants Lowest Since Last October). The U.S. Energy Information Administration (EIA), our favorite government agency, published a post yesterday detailing just how low. So far this year LNG exports from the U.S. have declined by half from previous levels. Looking at one of the charts where EIA forecasts future LNG exports, it looks like it will be third or fourth-quarter 2021 before we hit the same level of exports we had in 1Q20.
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Shale Energy Stories of Interest: Wed, Jun 24, 2020

MARCELLUS/UTICA REGION: Economic reopening: Manufacturing opportunities for Pennsylvania; Small group of antis launch website to oppose Wyalusing LNG export plant; Southwest Pa.’s energy dominance can help counter China; OTHER U.S. REGIONS: Cryptocurrency mining company eyes flared gas in Permian Basin; NATIONAL: Poll: Young voters see natural gas as critical to U.S. economy; Oil prices continue their rise, albeit slowly, since April’s crash; INTERNATIONAL: Vatican calls for carbon tax, investing in alternative energy; Global gas production set to tumble in 2020; Al Gore and the post-pandemic green dictatorship.
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