Analysts Predict Natural Gas Prices to Rebound in 2021
Is relief on the horizon for Marcellus/Utica drillers in the form of higher prices for natural gas? According to several analysts, due to several factors coming later this year and next year (a rebound in the economy, lower natgas production), we will see “significantly higher prices next year” for natgas. How much higher? “We expect an average Henry Hub price of $3.50[/MMBtu] for next year and anticipate gas reaching the $4 threshold in [the fourth quarter of 2021].” Between now and then it’s a game of Survivor…until higher prices get here.
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During the week of March 24 (Tuesday) to March 30 (Monday) exports of natural gas from the Lower 48 States to other countries averaged more than 15 billion cubic feet per day (Bcf/d)–the highest weekly average for natgas exports EVER. Most of that amazing number comes from exports via LNG facilities–some 9.5 Bcf/d. The rest are exports via pipeline into Mexico–averaging 5.5 Bcf/d.
Although we have a deep respect for the work done by the American Petroleum Institute (API) in self-governance and raising standards for the entire industry, today we write to disagree with one of API’s initiatives. API along with two other big oil and gas associations–the International Petroleum Industry Environmental Conservation Association (IPIECA) and the International Association of Oil and Gas Producers (IOGP)–collaborate to produce a document called the “Sustainability Reporting Guidance for the Oil and Gas Industry.” It’s a tool to help companies shape the structure and content of their so-called sustainability reporting. In our opinion, it’s a capitulation to the notion that we must transition to an all-renewable energy future. We categorically reject that losing premise.
The Delaware River Basin Commission (DRBC) has been co-opted by Big Green groups to do their bidding. The latest example is a letter sent by DRBC to the Federal Energy Regulatory Commission (FERC), arrogantly telling FERC that the DRBC has the power to review the PennEast Pipeline project–to pass judgment on whether or not (and how) it gets built. That authority lies SOLELY with FERC.
Last December the U.S. Fish and Wildlife Service (FWS) filed a request with the Federal Energy Regulatory Commission (FERC) asking for an extra 60 days to revise an Endangered Species Act (ESA) review of the Mountain Valley Pipeline (MVP) project. In February they asked for another 45-day extension (see 
Is this an April Fool’s joke? Bloomberg is reporting comments from Damien Courvalin, Head of Energy Research & Senior Commodity Strategist at Goldman Sachs, saying U.S. shale oil drillers will emerge from the current oil price crash as “a winner.” This is the opposite of every other analyst we’ve read. What does Courvalin see that’s different from everyone else?
President Trump had a phone conversation with Russia’s dictator Vladimir Putin on Monday. The topic? The Saudi-Russian oil price war, which Trump calls “crazy.” The result of the call was to tee up each country’s top energy officials, getting them to discuss ways to prop up the price of oil. Energy Secretary Dan Brouillette will talk with Russian Energy Minister Alexander Novak about “ways the world’s largest producers can address volatility in the global oil markets during this unprecedented period of turmoil.”
Why is the Trump Administration not taking decisive action to address the crash in the oil price brought on by the Saudis and Russians? Agreeing to “talk about it” with the Russians, as we outline in another post today, is not action. Neither is buying up some extra barrels of oil for the strategic petroleum reserve. We think David Blackmon, a longtime oil industry worker and observer hits the nail on the head in a new column just published by Forbes. The reason the government isn’t addressing the oil price crash issue right now is…
In 2015 a group of Ohio landowners did what landowners had previously done in Pennsylvania, Texas and elsewhere–they filed a proposed class-action lawsuit against Chesapeake Energy claiming Chessy had screwed them and about 1,000 other Ohio landowners out of a collective $30 million in royalty payments (see 
Even amid the coronavirus pandemonium and economic destruction happening everywhere, important oil and gas (and petrochemical) projects continue to make progress. In particular, the PTT Global Chemical plan to build an ethane cracker plant in Belmont County, OH still shows signs of life. In February PTT’s CEO signaled that a final investment decision on whether (or not) to build a multi-billion dollar ethane cracker in Belmont County, OH is coming by “mid-year 2020” (see 
Anti-fossil fuelers are on a holy mission to stop a 3.37-mile, 8-inch pipeline from being built under the Potomac River by Columbia Gas (see 
After we picked ourselves up off the floor from laughing so hard, it dawned on us the far-left radicals at THE Delaware Riverkeeper, Clean Air Council and PennFuture have done both the PennEast Pipeline and Adelphia Gateway pipeline projects a HUGE beneficial service. Those three nutty groups commissioned and have just released a new “study” (copy below) that uses data to show PennEast and Adelphia together, WHEN (not if) they get built, will mean that PA drillers have to drill and connect another 1,913 to 3,061 new shale wells to feed them. Well duuuh! Of course it means that!! And that’s a GREAT thing for all of PA. More economic stimulus. More jobs. More tax revenues flowing to local municipalities. (Do these groups know they’ve just handed us a new argument in favor of these pipelines?)
Is this the beginning of a pullback from LNG projects? Scared of the impacts of the coronavirus and the price of oil crashing, Royal Dutch Shell is pulling out of a 50/50 joint venture partnership with Energy Transfer (ET) to build a new LNG export facility in Lake Charles, Louisiana. In corporate speak, Shell says, “This decision is consistent with the initiatives we announced last week to preserve cash and reinforce the resilience of our business,” and “the time is not right for Shell to invest.” Translation: We’re scared. And who can blame them? All of a sudden there are LNG cargoes sailing the oceans with no place to unload (see 
Tenaska is #3 on the list of North American gas marketers–buying and selling more natural gas throughout the country than every other company save two (BP and Macquarie, see