PGW Dithers, Blows Opportunity for $60M LNG Plant in Passyunk
There’s a lot of finger-pointing going on about why a project to build a tiny $60 million LNG plant in South Philadelphia has come off the rails (i.e. dead). The developer for the project, Liberty Energy Trust, says Philadelphia Gas Works (PGW), the owner of the site, dithered around and took too much time to settle on a plan and now the “opportunity has passed” to build the project. Liberty has moved on to bigger and better things. PGW says developer Liberty Energy Trust tried to make “unacceptable changes” to the terms of the deal to develop the site and blames the company for not sealing the deal. Neither side has declared the project 100% dead, but it sure looks that way to us.
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Yesterday the NYMEX Henry Hub futures price (front month) contract rose $0.32 (5.3%) to close at $6.03/MMBtu. That’s the first time since January the price has broken $6. Why the bump in price now? Is it because of the war (everything is blamed on the Ukraine war these days)? Nope. At least, mostly not because of the war. As always, the factors that drive the price of natural gas here in the U.S. are complex. A number of things together are responsible, but mostly (as is usual) it is the weather driving the higher price.
MiQ, one of three major certification authorities that puts its stamp of approval on “responsible gas” production (i.e. low methane leakage), announced two bits of news yesterday that caught our attention. First is that MiQ’s Digital Registry of Independently Certified Gas currently has 350 billion cubic feet (Bcf) of “responsibly produced gas” ready for buying and selling. Second is that MiQ has launched a new certification service called the Certified Supply Chain.
For years (more than a decade) we’ve heard the left criticize shale companies as a “Ponzi scheme” that’s not profitable–drilling new wells to make up for declining production in old wells–all the while bilking investors. People like Ian Urbina of the New York Times tried to paint shale companies as fraudsters, going back more than ten years (see 
Last week Pennsylvania issued 14 new shale well permits, with EQT Corp. grabbing eight (seven of them on a single pad in Fayette County), and Coterra Energy (formerly Cabot Oil & Gas) receiving three (all on the same pad in Susquehanna County). Ohio issued ten new permits last week, with three going to a relative newcomer, Utica Resource Operating (same pad in Guernsey Count) and three for Encino Energy (same pad in Harrison County). West Virginia got skunked and shows no new shale permits issued last week. Pity.
MARCELLUS/UTICA REGION: Shale Academy keeps adding services; Keystone Clearwater Solutions invests in solar and renewable energy; NATIONAL: U.S. natural gas will be the first energy crisis signal, there’s no SPR for that; These three LNG plays are worthy investments, Jim Cramer says; Winter not quite done as US gas storage activity flips back to withdrawals; U.S. wants more oil from Canada but not a new pipeline to bring it; Energy producers aren’t causing gas prices to spike; INTERNATIONAL: ‘Now or never’: Only severe emissions cuts will avoid climate extremes; Why Germany can’t just pull the plug on Russian energy.