Warren Buffett’s Cove Point LNG Closing for 3 Wks of Maintenance
It’s that time of year again–for annual maintenance at the Cove Point LNG export plant, located on the shoreline of Maryland. The plant, built by Dominion Energy, is now controlled and operated by Berkshire Hathaway following Warren Buffett’s purchase of Dominion’s extensive pipeline network last year (see Warren Buffett’s Berkshire Hathaway Now Runs Cove Point LNG!). Cove Point will shut down for about three weeks of maintenance starting September 20th.
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Exactly one month ago MDN brought you the news that the Federal Energy Regulatory Commission (FERC) has provisionally approved a request by Equitrans’ Mountain Valley Pipeline (MVP) to change the method it uses to cross 136 streams and 47 wetlands (see 
Earlier this week MDN told you that a major national proxy advisor, Glass Lewis, is recommending shareholders from both Cimarex Energy (Permian oil driller) and Cabot Oil & Gas (Marcellus gas driller) approve a proposed merger on September 29 when they vote (see 
MDN editor Jim Willis has had several conversations this past week about the price of natural gas and how prices in the Marcellus/Utica are influenced by national and international events. “Is it possible,” one questioner asked, “to say that if the NYMEX price is X, then my local trading hub in the M-U will likely be X plus or minus Y?” Unfortunately, the answer is no. There is no one “price” of natural gas. The Henry Hub futures price (the NYMEX) is often quoted as “the” price, but in reality, there are hundreds/thousands of prices. Natgas is a commodity and traded at hundreds of points along major pipelines throughout the country. This post attempts to explain more about the complex landscape of what influences the price of natural gas where you are.
Lately we’ve seen multiple news articles about yet another city, or even state, that has launched a lawsuit against one or more Big Oil companies claiming their products are causing man-made global warming (an abject lie), and that those companies have known about this situation for years without doing anything about it, causing the earth to toast. Such lawsuits are not, frankly, about stopping global warming. They are about a government shakedown–politicians dipping their hands into the pockets of companies with money and stealing it. An excellent article appearing on the RealClearEnergy website describes what has been happening with these lawsuits, and why these lawsuits cannot be allowed to go forward.
Even with the onslaught of leftist attacks on the fossil fuel industry–in particular against natural gas pipelines–there are still some 45 major natgas pipeline projects projected to come online over the next five years. Of those 45, we count 16 that are located in the Marcellus/Utica (i.e. Appalachian) region. There’s certainly no guarantee all 16 (or all 45) will end up getting built. But if the 16 pipe projects in the M-U do get built, that will add another 7.9 billion cubic feet (Bcf) of M-U molecules flowing to other markets. Cool.
The NYMEX futures price for natural gas hit yet another 7-year high yesterday, closing up $0.20 to close at $5.46/MMBtu. The national spot price average (for physically traded/delivered gas) was up $0.18 to an average of $5.53/MMBtu. According to Bespoke Weather Services, the reason for ongoing run-up in prices is fear: “It is all fear in the market, owing to storage levels that are viewed as less than sufficient in the event of a cold winter, not just here in the U.S. but even more so over in Europe.”
The so-called budget reconciliation bill Democrats are trying to force through Congress against the will of the American public, a $3.5 trillion monstrosity, will do great harm to the oil and gas industry. On Monday we told you that 130 energy, manufacturing, business, and labor trade organizations, led by the American Petroleum Institute, are sounding the alarm about the methane tax that’s part of the bill (see 
LDC Forums held its Mid-Continent Forum (in person!) in Chicago earlier this week. One of the hot topics of discussion was ESG (environmental, social, governance) and RSG (responsibly sourced natural gas). We’re not big fans of either ESG or RSG, but hey, what do we know? At any rate, you can’t miss all the chatter about ESG/RSG over the past six months or so. Everyone (and we mean everyone) in the oil and gas industry seems to have gotten the ESG/RSG religion. So we found it interesting that members of a pro-ESG/RSG panel said, “it could be some time before a mature market develops for certified gas supply.”
Spire STL is a 65-mile pipeline that connects to and flows Marcellus/Utica gas from the Rockies Express (REX) pipeline to residents and businesses in the St. Louis, MO area. The pipeline began flowing gas in late 2019 (see 
In May MDN told you about one of the oddest combinations in recent memory–the merger of Permian driller Cimarex Energy with Marcellus driller Cabot Oil & Gas (see 
Once again we’re talking about the price of natural gas–both the NYMEX futures price and the physical spot price. Yesterday the NYMEX hit a new post-pandemic high of $5.26/MMBtu. The NGI national average for spot prices (physical gas traded at hundreds of trading hubs across the country) rose to $5.35/MMBtu. The spot price in the Marcellus/Utica in both the northeastern and southwestern portions of the play also rose to new highs and is (gasp) coming close to the levels we saw during February and Winter Storm Uri. Again we ask the question: How long will prices stay this high (or even go higher)? We have some insight on that question below.