The “Upside” for Marcellus/Utica in the Oil Price Crash
We’ve previously brought you various articles, and comments on articles, describing how Marcellus/Utica drillers may benefit from the current crash in global oil prices. How? A number of oil drillers in Texas, Oklahoma, North Dakota and other oil states are not only not drilling new wells right now, but they’re also not completing previously drilled wells and in some cases, they are shutting in existing/flowing wells. All of which means there will be a rapid decline in the amount of “associated gas” being produced in those states. Less associated gas means less supply and less supply means higher prices–for M-U drillers. We spotted an article that does a good job at defining how this will likely play out. How much less associated gas can we expect? What does that mean for natgas prices (when will they go higher)? What if the price of oil is $40/barrel rather than $30/barrel?
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We’ve been dreading this month’s edition of normally our favorite report, the U.S. Energy Information Administration’s (EIA) Drilling Productivity Report (DPR). The DPR estimates how much oil and natural gas each of the country’s seven largest shale plays produced in the previous (current) month, and how much each will produce in the coming (next) month. The past few months have seen a big decline in Marcellus/Utica gas production, more than half a Bcf/d (see 
A newly passed and signed-into-law bill in Virginia, House Bill (HB) 167, purportedly aims to “protect” electric consumers from shouldering the costs of new pipelines that would feed gas-fired power plants. What the bill actually does is remove freedom of choice for utility companies, driving 
We spotted a new scientific study published in an upcoming edition of the journal Water Research. The study is called: “Sulfate precipitation in produced water from Marcellus Shale for the control of naturally occurring radioactive material.” Researchers from the University of Pittsburgh have found a way to strip out radioactivity from produced water coming from Marcellus wells so the water can be boiled to produce clean water and usable minerals/salts.
Last week MDN highlighted an article from the Pittsburgh Post-Gazette about the low low prices Marcellus/Utica condensate has fetched since the beginning of the year (see 
Last year MDN told you about New Jersey-based Omni Energy Group and their application to build two new injection wells in Belmont County, OH near St. Clairsville (see 
In February Williams official gave up on building a long-delayed project to flow natural gas from northeastern Pennsylvania into central New York, called the Constitution Pipeline (see 
Reuters is reporting a disturbing allegation that Big Banks, including JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup, are each in the process of setting up shell companies that can own shale oil and gas assets. Why? Because of a coming wave of bankruptcies. The banks, with big loans to a number of oil companies, plan to take ownership of the companies or their assets (foreclosure) as repayment of the loans owed. In other words, Big Banks are planning to get into the oil and gas business as a form of self-defense, so they don’t take a bath on the value of the assets they’ve helped underwrite.
To say that history (in the world oil market) was made this past week is an understatement. The United States of America, under the direction of Donald J. Trump, threw in its lot with both Saudi Arabia and Russia in order to salvage a deal to cut oil production worldwide by 9.7 million barrels per day. The fact that Trump leaned on/cajoled/pressured the Saudis and Russians is not the historical part. What is history is that the U.S. itself pledged to cut a portion of its production in cooperation with those bad actors–a pledged to cut 300,000 bbl/d, because Mexico wouldn’t. We’ll explain.
EQT and U.S. Well Services (USWS) have signed a deal for USWS to provide electric fracking for one-third of EQT’s completions operations over the next three years. Does USWS (and e-fracking) sound familiar? It should! Range Resources signed with USWS in January (see 
Remember that old Abbott and Costello comedy routine, “Who’s on First?” That aptly describes what appears to be happening at the Pennsylvania Dept. of Community and Economic Development (DCED). PA Gov. Tom Wolf issued an edict several weeks ago that bans businesses from working unless they appear on a list of “life-sustaining” activities, in an effort to halt the spread of the COVID-19 coronavirus. Companies can apply for a waiver if they’re not on the life-sustaining list. The DCED is in charge (if you can call it that) of reviewing and issuing the waivers. Yesterday the DCED issued waivers to Energy Transfer to button up some final bits of work on the Mariner East 2 (ME2) pipeline project in several locations near Philadelphia. A few hours later DCED rescinded/pulled those waivers. What’s going on?
Quick: What’s the raw material used to make respirator masks, gloves, face shields and other high-demand products used by the medical community to combat the coronavirus pandemic? Correct, it’s plastics. And what is the primary feedstock used to make the plastic that in turn makes all of those live-saving products? Correct again: natural gas and natural gas liquids. Or another word for it, petrochemicals. The “Think About Energy” seminar series, usually held in-person, hosted its first virtual event yesterday. Four fantastic speakers spoke about how the coronavirus pandemic, among other things, may drive the expansion of petrochemicals in PA. Expanding the petchem industry in the Keystone State may literally be a life or death issue.
Nuverra Environmental Solutions (formerly Heckmann) is one of the largest companies in the United States that handles transportation and disposal of shale drilling wastewater and leftover rock and dirt from drilling. The company has major operations in the Marcellus/Utica region. Given that Nuverra’s customers, oil and gas drillers, are canceling work right and left meaning less work for Nuverra, the company announced it is laying off roughly 100 employees, cutting the salaries of everyone else, and slicing other non-essential expenses in an effort to ride out the coronavirus/oil price crash storm.
A recent column appearing in a Virginia newspaper shares what it believes is a revelation: When big energy/utility companies like Dominion Energy say they will achieve “net-zero carbon emissions,” they don’t mean they will stop using fossil fuels to create energy. Not by a long-shot. What “zero carbon” or “net-zero carbon” means is that all carbon dioxide (generated when burning natural gas to generate electricity, for example) is captured and used for something else. CO2 is not released into the atmosphere. Even though companies like Dominion are able to capture and reuse CO2, and prevent methane from leaking, it’s STILL not good enough for those who irrationally hate fossil fuels.