Bideniflation Begins to Ease a Little in U.S. Shale Basins
Inflation is a measure of the rate of rising prices of goods and services in an economy. Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product. But inflation can also be caused by the government printing and spending too much money. We refer to the current high inflation in our country as Bidenflation–caused by the Biden White House and colluding Democrats in Congress–because they passed massive, reckless spending bills. Much of that spending is being paid for by simply printing new money. When you have more money chasing the same amount of goods and services, prices go up. Inflation.
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Apart from the obvious benefits rural landowners (farmers) receive when leasing their land for shale gas drilling, did you know that modern agriculture, those same farmers, could not exist without natural gas? U.S. agriculture is a MAJOR part of the U.S. economy, creating 17.2 million jobs (5 million direct jobs) and contributing a mind-blowing $1.75 trillion to our country’s GDP (gross domestic product). The agricultural sector accounts for nearly 15% of U.S. commercial and industrial natural gas demand. Key feedstocks like ammonia, which is used to make nitrogenous fertilizer, are produced from natural gas. America’s farms and ranches have been key beneficiaries of the growth in U.S. natural gas production.
New research released by The Buckeye Institute models the impact that a new Clean Power Plan–which the Biden Administration is attempting to revive through the regulatory process–would have on jobs, the economy, and customers. In “The Economic Impact of a Potential New Clean Power Plan on Ohio and California” (full copy below), researchers with Buckeye’s Economic Research Center (ERC), using power usage data from government agencies in Ohio and California, found that customers in Ohio would see an increase of $810 on their electric bills per year and that customers in California would see an increase of $665 annually.
Diversified Energy (formerly Diversified Gas & Oil), with major assets in the Marcellus/Utica region (other regions too), owns approximately 8 million acres of leases with 65,000 (mostly) conventional oil and gas wells. The company’s business model is to buy lower-producing wells on the cheap and find ways to make them more productive. Last week the company issued its fourth annual ESG report, titled “Decarbonizing While Delivering” (full copy below). Across its 10-state operations, Diversified added more than $1 billion in GDP to various state economies, supported more than 8,600 direct and indirect jobs, and generated $500 million in federal, state, and local revenues. On the environmental front, Diversified Energy reduced methane intensity by 20% overall and by more than 30% in the Marcellus/Utica.
Did you watch the Big Game on Sunday? We watched until half-time (routing for the Eagles, because they’re a PA team). However, you have to admit that Patrick Mahomes, the quarterback for the Chiefs, was truly impressive. The Chiefs deserved to win. Mahomes was named the MVP (most valuable player) of the game. We’d like to suggest there was another MVP, the real MVP, of Sunday night’s game in Phoenix, Arizona: natural gas.
The Pennsylvania House Republican Policy Committee held a hearing yesterday in Harrisburg on the increasing energy costs that affect large and small businesses as well as homeowners. Several energy advocates, including Marcellus Shale Coalition President Dave Callahan, shared their thoughts and insights. High on the list of issues creating higher energy prices in the Keystone State are (1) the Regional Greenhouse Gas Initiative (RGGI, an obscene carbon tax), and (2) the ongoing issue of red tape from government bureaucracies like the Dept. of Environmental Protection.
The Texas Independent Producers & Royalty Owners Association (TIPRO) recently released the eighth edition of the organization’s “State of Energy Report” (full copy below). The report gives a detailed analysis of national and state trends in oil and natural gas employment, wages, and other key economic factors for ?the energy industry in 2022. The U.S. oil and gas industry employed 948,943 professionals in 2022, according to the report. That’s down from the all-time high of 1.3 million in 2019 but up 39,721 from 2021. When adding direct and indirect jobs, the oil and gas industry supported more than 19 million (!) jobs last year.
The Marcellus/Utica region is becoming a booming real estate market and manufacturing destination in the U.S., with manufacturing investment currently estimated at over $100 billion, according to Bryce Custer from NAI Spring Commercial Realty. What’s drawing manufacturers to the M-U region? Geopolitical instability, supply chain disruption, the reshoring trend, and abundant raw materials, including cheap (and clean) M-U natural gas.
Chip manufacturing giant Intel has committed to building two semiconductor factories in New Albany, Ohio, making a huge investment of over $20 billion. It is the largest economic development project in Ohio’s history. Amazing! The two plants will need natural gas, lots of it. So local utility company Columbia Gas of Ohio has proposed building a new 4.2-mile, 12-inch pipeline to the facility. The pipeline will be constructed within public road rights-of-way within Delaware County, Licking County, and Franklin County, as well as in the City of New Albany. Columbia is requesting expedited state approval (and is likely to get it).
JobsOhio, a private nonprofit largely funded by liquor sales that the state allows the nonprofit to collect (in essence, it collects sales tax on liquor sales), pays Cleveland State University to research and issue a report every six months on Utica Shale investment. The latest semi-annual report (full copy below) covers shale investment in the Ohio Utica from July 2021 through December 2021. Here’s an astonishing statistic: With this latest report, total Utica Shale investment in the state of Ohio since 2011 is nearly $100 billion!
We spotted an article about the left’s war on fossil energy, and how that war is causing economic chaos around the world. We disagree 100% with the premise of the article, which begins this way: “Climate change is a real and urgent problem. More than a century of carbon emissions is warming the planet and causing floods, droughts, fires and other cataclysmic events that are killing people, threatening livelihoods and upending economies.” However, the author goes on to say that the war on fossil fuels (which are, according to the author, the source of carbon emissions) is causing its own form of chaos. He makes some great points about the chaos that comes from not having a good transition plan in place to get us from fossil energy to so-called renewables.
European political leaders have been hell bent for leather to kill off fossil fuel energy used in their respective countries. And they have pretty much done it. They’ve been successful–at least with reducing the production of fossil energy. Europe has restricted new investment in fossil energy and is now paying the price. According to François-Régis Mouton, regional director for Europe at the International Association of Oil and Gas Producers, Europe has “killed fossil energy.” European manufacturers that depend on fossil energy–either for heat and electricity or as an input into their processes (like fertilizer plants using natural gas), are shutting down. Some are relocating to the U.S.
Earlier this week, Shell announced its mighty ethane cracker plant in Beaver County, PA (near Pittsburgh) is finally, ten years after first announcing, fully operational and producing plastic pellets (see 
Pennsylvania House Bill (HB) 1059 is legislation to provide $142 million annually in state tax credits for several purposes, including clean hydrogen hubs, use of natural gas, semiconductor manufacturing, and milk processors. HB 1059 was approved by both the state Senate and House last week and sent along to Gov. Tom Wolf for his signature (see