Williams Surprised by “Inelastic” Demand for NatGas, M-U Expanding
We suppose it takes a lot to surprise the CEO of one of the world’s biggest pipeline companies. Yet yesterday Williams CEO Alan Armstrong expressed his surprise that even with the dramatic increase in the price of natural gas during the third quarter, demand for natural gas was “inelastic” and remained high. Translation: Williams had all it could do to keep up with flowing natural gas through it’s extensive pipeline system, even with super-high prices. Much of the demand to flow gas came from the Marcellus/Utica.
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Equitrans Midstream, formerly known as EQT Midstream, issued its third quarter update yesterday. The main focus (for us) of the update is new or updated information related to the company’s all-important Mountain Valley Pipeline (MVP) project and those projects connected to MVP–including Hammerhead and Southgate. Yesterday we learned Equitrans still believes MVP, a 303-mile pipeline from West Virginia to southern Virginia, is on track to start up in “summer 2022.” The company plans to begin construction of a related extension of MVP, called Southgate (from Virginia into North Carolina) in 2022 and bring it online in early 2023.
American Petroleum Institute (API) president and CEO, Mike Sommers, recently testified before the U.S. House Committee on Oversight and Reform to discuss the natural gas and oil industry’s priorities and API’s ludicrous support for so-called pricing carbon (i.e. a huge carbon tax), support for regulating methane (into oblivion), all while still trying to reliably produce American energy. Those priorities are irreconcilably impossible, but, whatever. The thing that really irked us was that Sommers obsequiously genuflected to the global warming gods during the hearing.
The federal Environmental Protection Agency, the left’s favorite tool to undermine the U.S. Constitution, is attempting to do just that–undermine the Constitution. Today the EPA is floating a massive new regulation that seizes control of oil and gas drilling (and pipelines) away from the individual states, as provided for under the Constitution, and centralizes control in Washington, D.C. under the EPA. How? By forcing a one-size-fits-all regulation on so-called fugitive methane emissions that all states must comply with.
Seems like everybody is getting “responsible” all of a sudden. Over the past year, we went from nobody hearing of “responsibly sourced gas” (RSG) to now almost everyone clamoring to hop onto the RSG bandwagon. At least that seems to be the case here in the Marcellus/Utica. The nascent RSG movement is rapidly developing. By our count, there are four independent organizations/programs that certify parts of the natural gas industry and provide a certification that gas is responsibly produced and/or sourced. So far there have been at least seven (maybe more) major M-U drillers and several M-U pipeline companies to sign on for RSG certification. We try to make sense of the RSG landscape below…
Last week six U.S. Senators (five of whom from major energy-producing states) introduced a series of three bipartisan bills aimed at encouraging the development of hydrogen energy infrastructure. Sen. John Cornyn, a Republican from Texas, was one of the sponsors and promoters. So too was Chris Coons, far-left Democrat from Delaware. That shows the range of support for efforts to help goose hydrogen use in this country.
Last week MDN told you the news that EQT Corporation has sold part of its reserve capacity along the Mountain Valley Pipeline (MVP) to “an undisclosed investment-grade entity for six years” (see 
In a normal world where freedom rings throughout the land and free enterprise and capitalism rule, if the price of a commodity like natural gas soars, new drilling would happen and new pipelines (midstream infrastructure) would get built. In a warped world where wokey leftists demand divestment from “fossil fuels” those things don’t happen. Right now we desperately need more pipelines and more drilling. Neither is happening. RBN Energy explains how lack of new pipeline capacity is holding back new drilling–and why it’s happening, particularly in the Marcellus/Utica…
Although three major Marcellus/Utica drillers provided third quarter updates yesterday, we only cover EQT’s update in today’s lineup of stories. Come back Monday for details from both Antero Resources and CNX Resources. S&P Global Platts reviewed all three updates from yesterday and noticed a difference in how each of the three companies is approaching hedging, or preselling production for a specific price up to a year or more in advance. According to S&P, regaining investment-grade ratings for company stock was a stated goal by executives at all three companies during their 3Q earnings calls. They all aim to maximize free cash flows and paying down debt. Hedging programs were touted as the pathway to accomplish these balance-sheet goals.