Innovative Clinton County, PA Petchem Plant Gets More Investors
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…
Read More “Innovative Clinton County, PA Petchem Plant Gets More Investors”
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 
Exploration and production (E&P) companies, what we usually call drillers here on MDN, need capital (money), like any other big company. Cash is the oil in the engine that keeps any company operating (pun intended). E&Ps get money to keep operating from various sources, including banks and investment firms. According to an article appearing in Hart Energy’s Oil and Gas Investor magazine, E&Ps are currently “the most hated sector on Wall Street.” Ouch. The money has dried up. What will E&Ps do?
In July Pennsylvania Gov. Tom Wolf signed into law House Bill (HB) 732, a bill that will grant 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 
Have you caught yourself thinking lately (as we have), “When in the world is the price of natural gas (and oil) going to go up again?” And, “Why is more drilling not happening?” Perhaps you answer yourself with the obvious answer: It’s the pandemic, stupid. If you have said/thought that, you are correct. But what is there about the pandemic (which seems to be getting better) that is causing this ongoing slowdown and low prices for oil and gas?
The Consumer Energy Alliance (CEA) released an important new study yesterday. Titled “How Pipelines Can Spur Immediate Post-COVID Economic Recovery,” the new study finds delays, obstruction, and cancellation of pipeline infrastructure projects are threatening at least $13.6 billion in economic activity, over 66,000 jobs, and more than $280 million a year in state and local tax revenue at a time when America’s financial recovery from COVID-19 requires MORE investment and tax revenue. A section of the report finds anti-pipeline fanatics in NY, NJ, and PA threaten $3.5 billion worth of investments and 17,000 jobs in our region alone.
It’s been a tough past five months in the shale industry. While it’s been tough in the gas-focused plays like the Marcellus/Utica, it’s been tougher in the oil-focused plays like the Permian. Employment in the O&G space has shrunk, by one account, by some 86,000 jobs. We’re now at the same employment level as we were following the downturn in 2014-2016. “But everyone knows this industry is cyclical. It’ll bounce back again, right?” This time it may be different. According to analyst John Kemp, this time some of the jobs (and companies) leaving the industry will be gone for good…