December STEO Prediction: Production & Prices Up in 2023
Once a month, the analysts at the U.S. Energy Information Administration (EIA) 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 or so. We sometimes poke some good-natured fun at the EIA because one month their predictions go up, the next month down, etc. What about the latest STEO, published on Tuesday? EIA predicts average natural gas production will be just above 100 Bcf/d in 2023 (after predicting last month it would average below 100 Bcf/d). As for the commodity price of gas, EIA says the Henry Hub spot price will average right around $6/MMBtu in 1Q23.
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From time to time, we bring you news about hydrogen (H2) because, for many, H2 is the next “big thing” in energy. Many on the left are dazzled by H2 energy, although some of the more extreme elements of the left oppose H2 energy because most H2 is produced by cracking methane (see 
Perhaps like us, you didn’t pay much attention to the Georgia Senate runoff race. Since the Democrats already have cackling Kamala if they need her, the Dems control the Senate by default 50-50 (Kamala used to break ties). So whether Raphael Warnock (the leftist kook Democrat) won, which he did, or Herschel Walker (former football star and Republican) won, it didn’t really matter, right? Wrong. Just that one extra vote, 51-49, has given much more power to the Democrat anti-fossil fuelers that run the Senate (i.e. Chuck Schumer), than we could have imagined. For example: Warnock’s win all but ensures Dick Glick will get reappointed to FERC early next year–a profoundly sad outcome.
Accenture plc is an Irish-American professional services company based in Dublin, specializing in information technology services and consulting. Earlier this morning, Accenture published a report titled, “The Reinvention Reset — From Bold Plans to Pragmatic Actions” (full copy below). The report is based on Accenture’s own industry research and a global survey of more than 200 oil and gas executives that focuses on the efforts of O&G companies to “reinvent” themselves. Accenture is a Fortune Global 500 company with revenues of $61.6 billion in 2022 and a workforce of 721,000 people, so you should pay attention to what they say about the O&G space.
Once again, a permitting reform bill floated by U.S. Senator Joe Manchin (from West Virginia) with a provision to complete the 94% completed 303-mile Mountain Valley Pipeline (MVP) has flamed out. Manchin made a deal with the devil–his own Democrat Party–to vote for the misnamed and terrible Inflation Reduction Act (a warmed-over version of the Green New Deal) in return for HIS party’s support to pass a so-called permitting reform bill that would, among other things, allow MVP to finish up without court interference (see 
How new laws get proposed and passed is fascinating, isn’t it? Especially when the forces of good (conservatives) use the same tactics as the forces of evil (leftists) against them. The Ohio Senate may vote as soon as today on House Bill (HB) 507, which would expand natural gas drilling in state parks. HB 507 began life as a bill to “revise the number of poultry chicks that may be sold in lots.” The bill ostensibly addresses poultry sales and food safety. Yet somewhere along the way (in the dark of night), the bill was amended with another bill that “forces” state agencies to lease public lands for oil and gas drilling.
A lawsuit brought by two West Virginia landowners seeking to overturn the state’s newly enacted forced pooling (i.e. unitization) law was put on pause by a federal judge on Dec. 1. The same two landowners had a previous version of the same lawsuit tossed by the judge back in September (see 
There are advantages and disadvantages to being publicly or privately owned. In the oil and gas sector, most large companies are publicly owned–meaning they have a board of directors, and the “owners” hold shares of stock in the company, shares traded on public exchanges. In the Marcellus/Utica, most of the top drillers are publicly owned: Range Resources, Coterra Energy, CNX Resources, EQT Corporation, Antero Resources, Southwestern Energy, Repsol, National Fuel Gas Company (i.e. Seneca Resources), and Gulfport Energy. Several others are privately owned, including Ascent Resources (Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S.), Greylock Energy (based in West Virginia), and Olympus Energy (which drills in the Pittsburgh suburbs).
Data from the Bureau of Labor Statistics (BLS) shows that employment in the U.S. oilfield services (OFS) and equipment sector rose by an estimated 2,346 jobs to 645,486 in November. The November increases make OFS employment the highest since numbers started to drop in March 2020. We still haven’t fully recovered to the all-time pre-covid high of 706,528 reached in February 2020–but we’re working in the right direction. This is very good news.
Is Vanguard the next BlackRock–i.e, a pariah due to its extreme anti-fossil energy positions? YES. The Attorneys General from 13 states, including Ohio and West Virginia, have filed a protest with the Federal Energy Regulatory Commission (FERC) seeking to block Vanguard, a MAJOR investor (with $7.2 trillion of assets under management, second largest after BlackRock with $10 trillion) from buying stocks in electric utility companies. Why? Because Vanguard, like BlackRock, is trying to force the companies it invests in to abandon the use of fossil energy. If you own Vanguard investments–it’s time to dump them. Let’s hit them where it counts–in the pocketbook.
We’re encouraged to see the American Petroleum Institute (API) finally find its voice and begin to push back against the lunatics in the Biden administration. Recently, the API refused to support the reappointment of FERC Chairman Richard Glick (see 
We spotted a story about comments from the New England electric grid manager, ISO New England (ISO-NE), that made us do a double-take. Bloomberg reports the grid manager’s comments under this headline: “New England May Ask Residents to Curb Energy in Extreme Cold.” The article keys on comments made by ISO-NE that say if there is a bad cold snap, or an extended cold spell, residents in New England will be asked to reduce their energy use so as to keep natural gas flowing to electric generating power plants. Otherwise, the grid will crash, and there will be blackouts. Is anyone else scratching their head at this one?
Yesterday MDN brought you the news that as of Friday, a new regulation controlling volatile organic compound (VOC) emissions, and by extension methane emissions, for Pennsylvania’s conventional oil and gas drillers went into effect (see 
The front-month NYMEX futures contract (based on the price of gas trading at the Henry Hub) dropped like a rock yesterday–down 70 cents (-12.6%) to $5.58/MMBtu. The price has dropped for the past four trading days in a row. Some say it’s free fallin’. In total, the price has lost $1.66 (-22.9%) over the last four sessions. NYMEX trading during the day yesterday hit its lowest point since March of this year. Why? Mainly a warm short-term weather forecast, coupled with the continuing outage at the Freeport LNG export facility.
And just like that, the horse everyone thought was dead has come back to life and is leading the race. We’re talking about U.S. Senator Joe Manchin’s so-called permitting reform bill to help save the Mountain Valley Pipeline (MVP). The bill proposed by Manchin would bypass the clown judges on the 4th Circuit Court of Appeals who are blocking it. Manchin got a pledge from his buddy Chuck Schumer to allow a vote on permitting reform in return for Manchin selling out the country by voting to pass the misnamed Inflation Reduction Act (see 
We’re sure this post will not make some of our industry readers/friends happy. But we think it’s time to rip the scab off the festering ESG/Next Generation/Responsible Gas wound and expose it. As Joan Rivers used to say, Can we talk? What got us thinking about responsible gas certification was an announcement from Virginia Natural Gas that the company has entered into a deal with BP to buy “Next Generation Natural Gas” for resale to its customers. VNG will buy it from wells in the Louisiana Haynesville Shale. We asked ourselves these questions: What’s the likelihood that molecules of so-called responsible gas from Louisiana will actually travel all the way to Virginia? And if they do, what happens to those molecules once there?