US Gas Production to Exceed 100 Bcf/d in 2022; M-U Hamstrung by MVP
In the most recent U.S. Energy Information Administration (EIA) Short-Term Energy Outlook (STEO), the EIA predicted that by the end of this year, the United States will produce an average of 96.2 billion cubic feet per day (Bcf/d) of natural gas (see EIA Cuts 2H22 LNG Export Prediction by 14%, HH Price by 44%). For comparison, the country produced 93.51 Bcf/d in 2021. Rystad Energy, an independent energy research and business intelligence company for the global energy industry based in Norway, is out with its own prediction of U.S. production. Rystad says the U.S. will break the 100 Bcf/d production milestone–a new all-time record–by the end of this year.
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Last week MDN reported that Pennsylvania Gov. Tom Wolf, in a final act of thumbing his nose at the prolific Marcellus industry in his own state, vetoed a bill, Senate Bill (SB) 275, that would have prohibited municipalities from banning the use of natural gas (see 
The number crunchers at the U.S. Energy Information Administration once again overestimated natural gas production in the Marcellus/Utica in the agency’s monthly Drilling Productivity Report (DPR). Last month the EIA predicted total production in the Marcellus/Utica region (which they call Appalachia in the report) would be 35.39 billion cubic feet per day (Bcf/d) during July. In the monthly DPR issued yesterday, EIA revised the July number down to 35.12 Bcf/d. Not a huge difference. It translates to 270 million cubic feet per day (MMcf/d) less in production–roughly 1/4 Bcf/d.
Trying to follow the ups and downs of natural gas prices–predicting where prices will go–will drive you crazy. A little over one month ago, the NYMEX front-month futures price for natgas was hitting new modern highs, closing in on $10/MMBtu (see 
Natural gas-fired power plants have become a very important customer and user for Marcellus/Utica (and other shale play) natural gas. This week may set a new record for power plant usage of natgas. Temperatures across the south and Midwest (and northeast) are set to break records. Consecutive days of 100+ degrees Fahrenheit are forecast for Texas, Kansas, Missouri, Tennessee, Mississippi, and others. According to S&P, this Thursday (July 21), U.S. power burn is forecast to use an average of 48.6 Bcf/d of natgas in what would be a new single-day demand record.
If you monitor the oil and gas industry long enough, you’ll come to discover cycles, trends, and the old saying, “Everything old is new again.” That’s what is happening with the LNG market. For years (several decades), LNG was sold on long-term contracts of 10 to 20 years. Buyers would agree to purchase X amount of LNG for Y amount of cash for long periods of time. Long-term contracts offer price stability and guaranteed availability. But then came shale…
The crazies are getting crazier–if such a thing is possible. The Kool-Aid drinkers–those who are so brainwashed into the climate cult they refuse to think for themselves–are now demanding “real zero” carbon emissions. They say companies like Amazon and Google and Apple and other Big Green leftist idols who have pledged to be “net zero” carbon emissions by such and such a date are hiding. Those companies are actually still belching out CO2 by the megaton but claim they’re “green” by using nonsensical net zero pledges. Companies that pretend to be net zero use carbon offsets “over there” in order to keep belching out carbon “over here.” Now the crackpots are demanding total, worldwide “real zero” carbon emissions–the end of society as we know it.
MARCELLUS/UTICA REGION: Ithaca will help property owners swap natgas appliances for electric; OTHER U.S. REGIONS: The price of frac sand has spiked 150% in Permian; INTERNATIONAL: O&G reservoirs are cheapest options for underground hydrogen storage; EU GDP could drop 1.5 pct if Russian gas supply halts; Europe eyes 42pc rise in LNG import capacity by 2026.