Problem-Plagued Freeport LNG Fully Online Again … For Now
On the demand front, we’ve been tracking the up down up down up down and now up again situation at Freeport for weeks (months, years). Freeport had been mostly offline following an episode of cold temps in January (see Freeport LNG Repairs Won’t be Done Until May – 2 Trains Offline). Freeport announced that two of its three trains (Trains 1 and 2) would remain out of service for testing and repairs through May. Train 3 came back online in late March (see Freeport LNG Maintenance Work Continues—Gas Flows to One Train). But just as quickly, it went down. Came back up. Went down. Etc. As of Friday, April 26, it was down again (see Problem-Plagued Freeport LNG Down Again After Shipping Cargo). Reuters is reporting a miracle of miracles — all three trains are now back up and running!
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The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for May, issued Monday (below), shows EIA believes shale gas production across the seven major plays tracked in the monthly DPR for June will decrease production from the prior month of May. This is the eleventh month in a row that EIA has predicted shale gas production will decrease for the combined seven plays and (according to Reuters) will hit the lowest production level in five months. However, gas production won’t decrease everywhere. Gas-focused plays like the Marcellus/Utica and the Haynesville will see the most significant drop in production (a combined loss of 443 MMcf/d). In contrast, the oily Permian play will see a massive boost in the production of “associated” natural gas — the gas that comes out of the ground along with oil — up 143 MMcf/d. The Permian also adds another 18,000 barrels per day of oil production in June.
The Bidenistas at the EPA attacked coal and gas-fired power plants in April, threatening to destabilize the existing electric power grid with new regulations (see 
According to Energy in Depth, opposition to the Rockefeller-backed LNG export “pause” keeps pouring in from Republicans and Democrats alike. Last week, eight “moderate” (i.e., desperate) Democrat members of Congress sent a letter to President Biden requesting regular updates on the Dept. of Energy’s evaluation of LNG exports and more clarity on the timeline of the pause. The sycophantic Dems refused to condemn Biden’s overt action to harm American energy. However, they did “urge” him to “bring about a swift end to the LNG export permit pause” and to ensure “that any regulatory changes be incorporated in an open and transparent means.”
On May 1, a section of the Mountain Valley Pipeline (MVP) near Roanoke, VA, failed (ruptured) during pressurized water testing conducted to ensure that there were no leaks or flaws (see 
Is there a crack of light, a sliver of hope, that a bill passed by both the New York Assembly and Senate to ban carbon dioxide “fracking” will NOT be signed into law by New York’s left-leaning Governor, Kathy Hochul? The bill was passed by the Senate on March 20 after already passing in the Assembly (see 
Last week, in reporting on pipeline giant Williams’ first quarter 2024 update, we told you about a major new project Williams has begun to replace (upgrade) 112 mainline compressor units with state-of-the-art low-emission turbines and electric drive units on the Transco and Northwest Pipe (see 
In December 2022, Rice Acquisition Corp II, a special purpose acquisition company (SPAC) started by the Rice brothers (Danny, Toby, and Derek), announced a deal to acquire NET Power — an electric power developer with revolutionary new technology to capture every last molecule of carbon dioxide from natural gas-fired power plants (see 
In March, Pennsylvania Gov. Josh Shapiro traveled to Scranton, PA, to announce a proposal to “immediately pull Pennsylvania out of a multi-state carbon cap-and-trade program” (the so-called Regional Greenhouse Gas Initiative, or RGGI) and instead enroll PA in its very own RGGI-like carbon tax program (see 
American LNG exports are a true success story. We have shale drilling to thank for LNG exports. The U.S. went from importing LNG a few short years ago to exporting 11.9 billion cubic feet per day (Bcf/d) of LNG in 2023. But baby, you ain’t seen nothin’ yet! U.S. LNG exports in 2024 are forecast to hit an average of 14 Bcf/d. And because of facilities currently under construction or will soon be under construction, U.S. LNG exports are forecast to hit an average of 25 (!) Bcf/d by 2028, some 80% more than this year!
This story gets a little complicated, but we’ll do our best to explain. The Algonquin Gas Transmission (AGT) pipeline (owned by Enbridge) transports up to 3.09 Bcf/d through 1,131 miles of pipeline. Algonquin connects to Texas Eastern Transmission (TETCO), Millennium Pipeline, and Maritimes & Northeast Pipeline and supplies New England with critically needed natural gas supplies for power generation and consumer use. Anti-fossil fuel fanatics who see carbon dioxide molecules under every rock and lurking in every shadow claim a tiny upgrade to an AGT regulating station (costing $15.7 million) in Connecticut is part of Enbridge’s Master Plan to expand AGT throughout the region. Led by the radicals of the Sierra Club, protesters will hold a meeting on Thursday to oppose the upgrades to a regulating station that does nothing more than aim to keep the gas reliably flowing through existing pipes.
Every four years, the Pennsylvania Public Utility Commission (PUC) must approve plans by PECO, Pennsylvania’s largest electric and natural gas utility, delivering power to nearly 1.7 million electric customers and more than 545,000 natural gas customers in southeastern Pennsylvania. The plans under review are for how PECO, a fully regulated utility, will procure (buy) electricity for the next four years. In February, PECO filed its 1,235-page purchase plan with the regulators. The company plans to do what it has been doing (i.e., what’s been working), which is to obtain the least expensive electric supply and purchase 8% of its power from renewable sources, including 0.5% of solar energy generated within the state. Anti-fossil fuel nutters are having a cow, demanding (they always demand) that PECO buy far more unreliable renewable electricity, skyrocketing the cost to consumers.
Last week, the Baker Hughes U.S. rig count lost another two rigs, down to 603, the lowest the count has been since January of 2022. Since last October, the national count had gone as low as 616 and as high as 629, and that was it — a fairly narrow band. That is, until three weeks when it crashed through the floor and went lower, down to 613. Then, two weeks ago, it was down to 605. And now, it has gone even lower, down to 603. Will we see it go lower than 600?
The NYMEX futures price for natural gas has been trending higher lately. It closed down a nickel on Friday, but overall, the trend has been up, up, and away. Since price is so important, we cover the topic frequently. Lately, we’ve made the following points (in various posts): (1) Natural gas production is declining, thanks to drillers like EQT, Chesapeake, and Antero curtailments. (2) LNG export demand is increasing with Freeport back online and a couple of new plants coming online soon. Both of those factors combine to drive the price higher. However, there’s another factor at work to keep prices lower.