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Big Green Radicals Suing Shell for “Air Pollution” from PA Cracker
Yesterday two radicalized Big Green groups–the Environmental Integrity Project (based in D.C.) and the Clean Air Council (based in Philadelphia)–filed a notice of intent to sue the Shell Polymers Monaca ethane cracker plant near Pittsburgh. The notice, as well as the coming lawsuit, has all the hallmarks of being planned long ago, perhaps years ago, before the cracker plant even came online. The false claim in the notice and coming lawsuit is that the cracker plant is “repeatedly” violating air pollution limits.
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The mighty BP (formerly British Petroleum) is an oil and natural gas company trying to convert itself into a renewable energy company. We’d say they’re failing, big time. BP has gone screwy. It’s a European company and has bought into the false narrative that fossil energy is on the way out due to concerns over mythical global warming. In BP’s recently published Annual Energy Outlook for 2023 (full copy below), the company predicts (once again) that fossil energy is on the way out, but now it’s happening even faster than before because of (a) Putin’s war on Ukraine, forcing Europe to adopt unreliable renewables even quicker than before, and (b) Biden’s so-called Inflation Reduction Act, pouring billions into the effort to smash fossil energy and elevate electric-everything.
CNX Resources CEO Nick DeIuliis is on a mission to reduce the number of outstanding shares of his company’s stock by buying back shares. The aim is to return value to shareholders. When a company buys back shares, it reduces the overall number of outstanding shares, which boosts the price for the remaining shares. In effect, DeIuliis is causing share prices to rise, putting money (and profits) into the pockets of shareholders. Since the third quarter of 2020, CNX has repurchased and retired 24% of the company’s outstanding shares of stock–one of the four top companies in the S&P 500 to do so.
And so begins the quarterly earnings report season. Yesterday CNX Resources issued its fourth quarter and full-year 2022 update. The company doubled its profits in 4Q22, making $1.2 billion, versus a profit of $630 million in 4Q21. However, as big as the profit was in 4Q, CNX still lost $142 million for the entire year–mainly due to $2.6 billion in losses on derivatives for the year. CNX generated $270 million in free cash flow for 4Q and cumulatively generated $707 million of free cash flow for the entire year. Production took a hit, down to 1.53 MMcfe/d (million cubic feet equivalent per day), compared to 1.72 MMcfe/d in 4Q21. The stated reason for the drop in production was a bad well and the cold snap (freeze-offs) during 4Q.
The Ohio Court of Appeals recently issued a decision in a case involving lease language about a “depth severance clause” that is very important for both landowners and drillers to know about. In Tera LLC v. Rice Drilling D LLC, et al., a landowner in Belmont County, OH, signed a lease with language that leases both the Marcellus and Utica shale layers, but all other formations were “reserved to the lessor” (i.e. the landowner). However, the driller, Rice (now EQT), drilled into and produced hydrocarbons from the Point Pleasant layer that sits immediately below the Utica. According to the lease (and the decision by the court), that was a no-no.
New shale permits issued for Jan. 16-22 in the Marcellus/Utica included only 7 new permits in Pennsylvania, 5 new permits in Ohio, and 2 new permits in West Virginia–for a grand total of 14. The top recipient of permits for last week, scoring nearly half, was Coterra Energy (the former Cabot Oil & Gas), with 6 permits issued in northeastern PA’s Susquehanna County.
Last week the Municipality of Murrysville, PA (in Westmoreland County, near Pittsburgh) voted to allow Olympus Energy to build a well pad on a property straddling the border with Plum Township. The well pad will eventually host eight shale wells. Olympus wants to begin drilling the wells either late this year or early next year. This is good news indeed!
Here’s a question: What are the 15 biggest (by company revenue) natural gas-owning pipeline companies in the world? The U.S. has the biggest natural gas pipeline infrastructure in the world, covering a distance of 333,000 kilometers (206,917 miles). Even so, only one U.S.-based company is in the top 5 biggest pipeline companies. Can you guess which country takes the top 2 spots on the list?
It hasn’t been a problem-free startup for the mighty Shell ethane cracker plant in Monaca (Beaver County), PA, now called the Shell Polymers Monaca facility. We’ve noted some of the more prominent issues as we’ve spotted them in the news. Things like the plant exceeding allowed air emissions (see 
John Reinhart is the former President and CEO of M-U driller Montage Resources Corporation before that company was gobbled up by Southwestern Energy in 2020 (see 
Yesterday Chesapeake Energy announced it has cut a deal to sell the majority of its Eagle Ford oil assets to WildFire Energy I LLC for $1.425 billion. The sale includes approximately 377,000 net acres and approximately 1,350 wells in the Brazos Valley region of its Eagle Ford asset, along with related property, plant, and equipment. In 2018 Chesapeake, under the direction of then-CEO Doug Lawler, purchased 420,000 net acres in the Eagle Ford shale and Austin Chalk formations in Texas from WildHorse Resource Development Corp for $4 billion (see 
We have two related lawsuits to report on involving landowners in Susquehanna County, PA, and Callon Petroleum. As most lawsuits are, these two are complicated. But, at a very high level, the concept is simple. The landowners allege that Callon Marcellus (formerly Carrizo Marcellus) shorted them on royalty payments. The landowners sued, but Callon sold its assets in northeastern PA (to BKV) and engaged in a shell game to move the proceeds of that sale ($74 million) directly to the mothership, Callon Petroleum, as a way of avoiding liability to pay, just in case they lose the royalty lawsuit.