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M-U Drillers Rake in the Cash in 2Q from Higher NGL Prices
During the second quarter (May through June), ten of the largest oil and gas producers covered by S&P Global Market Intelligence saw their NGL (natural gas liquids) revenues grow substantially from the same period a year ago. Those ten companies, half of them drillers in the Marcellus/Utica region, saw NGL prices increase from 104% to as high as 261%. The extra money from NGLs made what turned out to be a down quarter financial-wise (because of bad bets on hedges) better than it would have otherwise been.
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Mountain Valley Pipeline (MVP) is a 303-mile pipeline from West Virginia to southern Virginia that is 92% complete (in-the-ground). The pipeline is targeted to be in-service by the middle of next year. The project is currently stalled, temporarily, due to frivolous lawsuits filed by disgusting Big Green groups like the Sierra Club. MVP Southgate is an extension to MVP that will travel an additional 75 miles from southern Virginia (where the current MVP terminates) into North Carolina. MVP Southgate has not yet broken ground. The project has been opposed by North Carolina and the same mish-mash of “environmental” groups that opposed MVP. However, this week there are two fewer groups opposed to Southgate than there was last week.
We hate to keep harping on this, but we keep reading stories about a developing issue here in the Marcellus/Utica. That issue is the lack of pipeline capacity to flow an increase in gas production from the northeast to other locations. The experts at RBN Energy predict that within the next two years M-U producers will “hit the capacity wall” and run out of extra pipeline capacity for an ever-increasing amount of natural gas production. When will the Northeast run out of “exit capacity” and how bad could constraints get?
The Pennsylvania House Environmental Resources and Energy Committee held a hearing on Tuesday that investigated the economic benefits of the state’s 1,000-plus miles of gas pipelines. The adults in the room all acknowledged even if there is a transition away from fossil fuels “someday,” pipelines hauling natural gas around the state will need to be kept up and running for *at least* the next 30 years (likely longer). Pipelines are here to stay. A band of radical anti-fossil fuel nutters behaved badly during the hearing, as they so often do, and had to be ejected.
Whether we think it’s a good idea or not (we don’t), there is no denying that the Marcellus/Utica industry has collectively jumped off the RSG/ESG cliff. RSG stands for “responsibly sourced gas” and ESG is “environmental, social, governance.” Responding to pressure from investors and customers, most M-U drillers are now making moves to prove the natural gas they produce has been produced using practices that protect the environment. We say the gas has always been produced responsibly and we have nothing further to prove, but hey, who are we? Anywho, the Pittsburgh Business Times delves into the programs–Project Canary and MiQ–that M-U drillers have embraced as their preferred method of proving environmental friendliness.
“Look ma, no hands on the steering wheel!” Forget about self-steering/self-driving cars. That’s yesterday. Now we have self-steering (or “autonomous”) directional drilling–oil and gas drilling that steers itself using artificial intelligence. Brought to you by the largest oilfield services company in the world: Schlumberger.
MARCELLUS/UTICA REGION: Republicans on PA Senate environmental committee OK letter disapproving final carbon tax; Utica Green Conference to focus on ESG initiatives; NATIONAL: DOE announces $24 million to capture carbon emissions directly from air; Is the U.S. shale bankruptcy rout over?; INTERNATIONAL: Oil buckles to lowest price since may; Nord Stream 2 says Fortuna vessel working on final stage of project.