Inflation to Hit 12% for Shale Drillers This Yr, Steel Pipe Up 50%
It’s getting far more expensive to drill a shale well of any kind according to analysts at Citigroup. Inflation overall is on the increase. You can’t keep throwing trillions of printed, made-up money into the economy (a la “stimulus checks”) without the inevitable inflation happening. Too much money chasing too few goods and services equal higher prices, i.e. inflation. Citigroup says the inflation rate for the shale industry could reach 12% by the end of this year. That’s massive.
Read More “Inflation to Hit 12% for Shale Drillers This Yr, Steel Pipe Up 50%”
Ellen Wald is a senior fellow at the Atlantic Council’s Global Energy Center, and president of Transversal Consulting, a global energy and geopolitics consultancy. She is the author of “Saudi, Inc.,” a history of Aramco and how the Saudi royal family controls this multitrillion-dollar enterprise. Ellen is one of our favorite Forbes authors. She recently published a fantastic editorial in The Hill (rag targeting DC swamp dwellers). Wald writes that President Biden’s plan that commits the U.S. to reduce its greenhouse gas (GHG) emissions over the next eight years to about 50 percent of what they were in 2005 is “impossible, unrealistic and insufficient.”
In July 2020, PA Gov. Tom Wolf signed into law House Bill (HB) 732, a bill that grants tax breaks to companies willing to build brand new petrochemical plants in the Keystone State–plants that use huge quantities of Marcellus Shale gas (see 
Anecdotally it seems as though there has been less drilling activity in the Marcellus/Utica over the past year. Some say it’s due to the coronavirus pandemic. Others say there’s more to it than that. If you’ve tracked public announcements by drilling companies, they claim to have pulled back on drilling and won’t increase current levels of drilling even when/if the price of natural gas increases. Why? They must turn a profit, or investors leaving for greener pastures (pun intended). But is there really less drilling happening in the M-U today than say one year ago?
In July 2020, PA Gov. Tom Wolf signed into law House Bill (HB) 732, a bill that grants tax breaks to companies willing to build brand new petrochemical plants in the Keystone State–plants that use huge quantities of Marcellus Shale gas (see 
One of the brightest of the bright spots in the Marcellus/Utica shale industry has been shale’s effect on local economies and jobs, as in more money and jobs flow to shale drilling counties. To counter all that good news left-leaning “media” outlets like the Pittsburgh Post-Gazette have run hit pieces, like this article in February: 
In a very gentle and diplomatic way, Pennsylvania State Senator John Yudichak (Independent from Wilkes-Barre) told Department of Community & Economic Development (DCED) Secretary Dennis Davin on Monday he’s not doing his job. Yudichak told Davin “site selectors” (people who work with companies to select sites for big manufacturing and other types of facilities across the U.S.) aren’t aware of the tax credits available as part of Act 66, a law passed last year aimed at building new petrochemical plants in PA.
The oil and natural gas industry has always been a “boom and bust” business. O&G cycles between times of “drill like crazy”, and “sweeping layoffs.” It is the nature of our market. Last year as the coronavirus pandemic set in and countries around the world shut down portions of their economies, particularly with travel all but ending, anti-fossil fuel zealots pronounced the death of fossil fuels (oil in particular). They said the race to replace fossil fuels with “renewables” had accelerated because of COVID (they were actually glad COVID hit). Antis could not have been more wrong about the prospects for oil and gas…
The KeyState Zero petrochemical plant project that includes natural gas synthesis and carbon storage (coming to Clinton County, PA) just gets more fascinating every time we read or hear about it. We spotted a new article with more details about the project, like the fact LNG is already being produced at the site. In addition to carbon capture, the new petchem plant will produce four products…
Kimmeridge Energy Management Company is a private equity investment firm focused on the upstream energy sector (drillers). Last week the firm published a white paper entitled, “Bringing Alignment and Accountability to the E&P Sector” (full copy below). The thesis of the paper is this: the alignment between drilling company executives and shareholders is “broken” and “a root cause” for the problem of poor earnings at drilling companies.
A cool new initiative called 
Eagle Manufacturing, located in Wellsburg, WV, was struggling in the early 2000s. The company makes plastic safety products. Foreign competition was hammering the company (tough to compete with children in China who work in factories for a dollar an hour). The company almost offshored production to China, but decided to stick it out a few more years here at home. And then the Marcellus/Utica Shale miracle happened.
Back in March, just as the COVID-19 pandemic was beginning to enter the public consciousness, some 500 people from labor unions and industry met in Pittsburgh to launch an organization called Pittsburgh Works Together (PWT), dedicated to fighting back against those who want to end southwest PA industries including steel, natural gas, and petrochemicals (see