May STEO Predicts NatGas Production to Fall Slightly in 2Q
Once a month, the U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. We sometimes poke good-natured fun at the EIA because their predictions go up in one month, and in the next month, they go down, etc. What about the latest STEO dart board, published yesterday? EIA predicts the average spot price for natural gas will be $2.20/MMBtu in 2024, the same prediction as last month (see April STEO – U.S. Electric Use to Hit New Record High in 2024/25). However, the agency raised the average spot price prediction for gas in 2025. Last month, it was $2.90; this month, it’s $3.10. Hey, it’s moving in the right direction!
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In 2015, greedy lawyers, using a group of 21 Oregonian children, filed a lawsuit against the United States (President Obama at the time) for not doing enough about mythical man-made global warming. They were hoping for a quick “sue-and-settle” payday. Didn’t happen. The lawsuit eventually made its way to the U.S. Court of Appeals for the Ninth Circuit in 2019 (see 
The very short answer to the question posed in the title is, Very good things! Current polls have Trump winning over Biden. But it’s still way too early to believe the polls. Still, it gets one wondering what will happen in the energy sector if DJT wins reelection in November. The staff of Rigzone posed that question to the top brass at the Heritage Foundation and the American Enterprise Institute (two reliable, rational organizations) to get their take on the situation and the potential effects on the industry.
Last year in March and then again in May, New Fortress Energy (NFE) confirmed to the Securities and Exchange Commission (SEC) that it plans to apply for updated permits to build an LNG export plant in landlocked northeastern Pennsylvania (see 
EOG Resources, one of the largest oil and gas drillers in the U.S. (with international operations in Trinidad and China), owns a huge 430,000+ acres of leases in the Ohio Utica. EOG calls its position the “Ohio Utica combo play” and now considers it one of the company’s “premium plays.” EOG concentrates on oil drilling in the Utica. As part of the company’s first quarter 2024 update, Keith Trasko, Senior VP for Exploration and Production at EOG, said Utica wells “compete with the best plays in America, very comparable to the Permian on a production per foot basis.” Wow! High praise indeed. The Utica is the new Permian…we like the sound of that!
Two more tracts of Ohio public lands designated as “wildlife areas” have been nominated by shale companies to be drilled and fracked under (not on), which has the anti-fossil fuel group Save Ohio Parks up in arms. The tagline for Save Ohio Parks is “No fracking on public lands.” The thing is, there isn’t any fracking on public lands in Ohio. It’s UNDER, not ON. Well pads and equipment would be erected on PRIVATE land adjacent to the public land. There is no disturbance of any kind on top of Ohio’s public lands. The new parcels nominated include 84 acres in the Keen Wildlife Area in Washington Township (Harrison County). A second parcel of 30 acres has also been nominated for the Egypt Valley Wildlife Area in Flushing Township (Belmont County).
According to a new article by the Pittsburgh Post-Gazette, abandoned oil and gas wells can be found “everywhere” in Pennsylvania. An influx of new federal funding gives the state Dept. of Environmental Protection (DEP) new urgency in finding and plugging them. However, it is the thorny issue of who pays or should pay when the owner is known that caught our attention. In some cases, producers (and speculators) buy leases and land, knowing that new drilling (in particular shale drilling) may one day happen on the property, but the new owners didn’t sign up for the financial responsibility to plug old/existing wells on the property. Should they (instead of taxpayers) be on the hook to pay?
Have you noticed? The NYMEX price of natural gas has been on an upward trend over the past week or so. We’ve actually broken the $2 barrier, and it continues to climb. Which begs the question, why? There are typically a number of factors combined to drive the price. This time around, we think we can boil it down to a classic economics principle — there’s more demand and less supply. The demand is coming from the problem-plagued Freeport LNG facility, which is rockin’ and rollin’ once again. Lower supply is coming from fewer natgas drilling rigs in operation.
We have to admit we’re disappointed. A section of the 303-mile Mountain Valley Pipeline (MVP) ruptured during pressure testing last Wednesday in Roanoke County, Virginia, according to a report from the state’s environmental agency. A landowner observed sediment-laden water in her pasture on Wednesday morning and reported it to the Virginia Department of Environmental Quality (DEQ). “The origin of the sediment-laden water reported in the complaint was from the rupture of a section of pipe during hydrostatic testing the morning of 5/1/2024,” wrote the DEQ expert, John McCutcheon.
Last Thursday, MDN brought you the news that Ohio Attorney General Dave Yost asked a Belmont County judge to find Austin Master Services (AMS) and Brad D. Domitrovitsch, who is in control of the company (both CEO and CFO), in contempt for “failing to meet the court’s deadline to clean up the illegal levels of fracking waste stored at its recycling facility in Martins Ferry” (see 
The Cleveland Plain Dealer has the long knives out for Ohio State Senator Brian Chavez (Republican) and Ohio Gov. Mike DeWine (also a Republican). The Plain Dealer is accusing DeWine’s Ohio Department of Natural Resources (ODNR) of corruption in not charging an injection well company owned by Chavez called DeepRock Disposal $1.3 million for cleaning up wastewater that migrated from a DeepRock injection well to a nearby conventional production well in Noble County. Instead, says the Plain Dealer, the ODNR sent the bill to the conventional well operator!
We’re sad but not surprised. The last time we reported on Williams’ Northeast Supply Enhancement (NESE) Project slated for New York was last June when Williams asked the Federal Energy Regulatory Commission for a time extension to build it (see 
Last week, the Baker Hughes U.S. rig count lost another eight rigs, down to 605, 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. No higher and no lower. That is, until two weeks when it crashed through the floor and went lower, down to 613. And now, it has gone even lower, down to 605. The Marcellus/Utica remained even at 40 rigs after losing one rig two weeks ago. Pennsylvania operates 21 rigs; Ohio operates 11 active rigs; and West Virginia operates 8 rigs.
Antero Midstream, a separate company from Antero Resources (at least on paper, although it is managed by the same people), issued a press release yesterday to announce it had purchased a bolt-on acquisition of gathering and compression assets in the Marcellus Shale for $70 million from Summit Midstream Partners. The assets acquired include two compressor stations and 48 miles of high-pressure gas-gathering pipelines located in West Virginia.