New Fortress Convinces Jamaica to Use CNG for Bus Fleet
We continue to be impressed with New Fortress Energy and its aim to own as much of the LNG supply chain as possible. The company is building an LNG (liquefied natural gas) liquefaction plant in northeast Pennsylvania (see Work Continues to Clear Site for NEPA Landlocked LNG Export Plant). They plan to truck and use rail cars to get the Marcellus LNG to a new dock facility they plan to build on the New Jersey shoreline of the Delaware River (see DRBC Reconsiders New Fortress LNG/NGL Shipping Dock on Dela. River).
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Shale Gas News is a weekly radio program that plays on three radio stations in Pennsylvania. Last weekend’s show featured a segment with Colin Grabow, a policy analyst at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies. Grabow’s research focuses on domestic forms of trade protectionism such as the Jones Act and the U.S. sugar program. Yes, the Jones Act again! During the segment, Grabow describes what the Jones Act is and how it negatively affects U.S. shale gas exports to places like New England and Puerto Rico (see 
It’s getting bloody out there. Just two days ago we told you the “unthinkable” may happen, that oil may approach or hit $20/barrel (see 
Nobody knows just how low the price of oil and natural gas will go due to the COVID-19 coronavirus crisis (see today’s companion story), but that doesn’t stop prognosticators from rendering estimates of prices and (in this case) production levels. We spotted a couple of stories of interest. One story takes a stab at estimating where natural gas production in the U.S. will end up this year (down 2.4 Bcf/d), and another story estimates where oil production will end up this year (down 1 million barrels/day). Here are those predictions and rationale, for what it’s worth…
Who are the biggest natural gas sellers in the U.S.? You might be surprised to learn that the biggest *sellers* are not necessarily the biggest *producers* of natural gas. Oh, you might recognize some of the names of the top sellers (BP, Shell, ConocoPhillips). But others might be more of a mystery (Macquarie, Tenaska, Sequent, and J. Aron & Co.). Would it surprise you to learn that BP (i.e. British Petroleum) is the #1 seller of natgas in the U.S., and has been for years?
We’d hate to be a big employer right now–like Shell–with all of the COVID-19 coronavirus issues swirling. Shell currently employs some 6,500 construction workers at its Monaca (Beaver County), PA ethane cracker plant site. That’s 6,500 workers coming and going each and every day. Many of them have to get to the job site via a shuttle bus after parking in huge parking lots near the site. Cramped, crowded conditions at a time when the government recommends “social distancing” (who wants to bet that’s the phrase of the year for Merriam-Webster?). Some are criticizing Shell for not shutting down construction. It’s a no-win situation. Shut it down and throw 6,500 people out of work for a month or two or three? Keep working and risk spreading the virus? No good options.
The oil and gas marketplace is often described as being divided into three sectors: upstream, midstream and downstream. Upstream is drilling and producing, midstream is processing and transporting (basically pipelines), and downstream is end-users of all types–converting oil and gas into various products and/or delivering it to end-users. The COVID-19 coronavirus has the power to affect any and all three areas. However, the midstream and downstream (in particular pipeline companies and utility companies) do not expect this insidious virus to affect their operations. Why? It’s called business continuity planning.
As we have often pointed out, if we could have anyone else’s brain in the shale business, it would be our friend Tom Shepstone’s brain. Tom, who writes at 
And so it begins. We’ve seen it before during oil and gas “down cycles.” Some of the first companies to lay off workers are the oilfield services (OFS) companies. Companies like Halliburton. It’s a yo-yo. Lay off a bunch of people (hundreds or thousands), and in a few years when things turn around, hire back a bunch. Some pejoratively call it boom and bust. We’re entering another serious down cycle with impending layoffs. Yesterday Halliburton announced a new twist. Instead of laying off thousands, the company will “furlough” some 3,500 workers. Here’s how it works…
Yesterday we wrote that the price of oil is in a free fall, heading toward $20/barrel (see 
Radicalized leftist groups pretending to care about the environment, including the Center for Biological Diversity, Sierra Club and Ohio Environmental Council, have struck again. In May 2017 the three groups sued the U.S. Forest Service and U.S. Bureau of Land Management (BLM) to block the sale of leases for oil and gas drilling in Ohio’s Wayne National Forest (WNF). Last week a federal judge ruled in their favor. The court has effectively blocked all future lease auctions for WNF and is considering overturning two previous auctions. This is a DIRECT attack on the property rights of private landowners.
Yesterday EQT, the nation’s largest natural gas producing company, issued a press release to update investors and the marketplace on a couple of important issues. First, the company has sliced off another $75 million in previously-planned spending for 2020. The company now plans to spend $1.075 – $1.175 billion on drilling and other expenses this year. Second, the company “has entered into an agreement with a third-party to permanently release firm transportation obligations of approximately 400 MMcf/d, or approximately 15% of EQT’s current portfolio.” Translation: EQT was able to cancel 15% of the contracted pipeline capacity they had, lowering expenses.
Each month the U.S. Energy Information Administration (EIA) produces its Drilling Productivity Report (DPR), our favorite monthly report. 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 February DPR showed, for the first time, combined natgas production from all shale plays would decrease beginning in March (see 
In early January, the average price for a barrel of oil was $63. Yesterday the price closed at $28.70. Word on the street is that the price may go as low as $20/barrel, soon, and stay there for a while. Why? Because the Saudis and Russians have oil-pumping fever. They’re pumping as much oil as fast as they can. And that’s producing a global surplus of oil chasing buyers who don’t want it. According to IHS Markit VP and head of oil markets Jim Burkhard, “The last time that there was a global surplus of this magnitude was never. Prior to this the largest six-month global surplus this century was 360 million barrels. What is coming will be twice that or more.” The price of oil has crashed–and unless the Saudis and Russians let up, the price will stay crashed for some time to come.
Adelphia Gateway is a plan to convert an old/existing 84-mile oil pipeline stretching from Northampton County, PA through Bucks, Montgomery, and Chester counties, terminating in Delaware County at Marcus Hook, into a natural gas pipeline–flowing Marcellus gas to southeast PA. Roughly half of the pipeline was previously converted and already flows natgas. In December the Federal Energy Regulatory Commission issued final approval for the project (see 
In Ohio forced pooling is called “unitization.” When a landowner/leaseholder owns 65% of the mineral rights under property in a given location and wants to pool other neighboring properties into an oil or gas drilling unit, that landowner/leaseholder files a request with the Ohio Dept. of Natural Resources Division of Oil and Gas Resources Management. The Division head then schedules a hearing to consider the request. All such hearings scheduled for this week are now canceled and will be rescheduled. Furthermore, the Division will only be able to accept new unitization requests on Tuesdays and Thursdays, and they will only return phone calls about unitization on Fridays. All due to the COVID-19 coronavirus.