Baker Hughes U.S. Rig Count Adds 1 @ 604, M-U Even @ 40
Last week, the Baker Hughes U.S. rig count added a single rig, now up to 604 active rigs. Since last October, the national count had gone as low as 616 and as high as 629, and that was it — a fairly narrow band. That is, until a month ago when it crashed through the floor and went lower, down to 613. Then, three weeks ago, it was down to 605. Two weeks ago, it went even lower, down to 603, the lowest since January 2022 (see Baker Hughes U.S. Rig Count Drops 2 @ 603, M-U Even @ 40). We’ve come up by one. We suppose it’s progress, albeit very little progress.
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The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for May, issued Monday (below), shows EIA believes shale gas production across the seven major plays tracked in the monthly DPR for June will decrease production from the prior month of May. This is the eleventh month in a row that EIA has predicted shale gas production will decrease for the combined seven plays and (according to Reuters) will hit the lowest production level in five months. However, gas production won’t decrease everywhere. Gas-focused plays like the Marcellus/Utica and the Haynesville will see the most significant drop in production (a combined loss of 443 MMcf/d). In contrast, the oily Permian play will see a massive boost in the production of “associated” natural gas — the gas that comes out of the ground along with oil — up 143 MMcf/d. The Permian also adds another 18,000 barrels per day of oil production in June.
Last week, the Baker Hughes U.S. rig count lost another eight rigs, down to 605, the lowest the count has been since January of 2022. Since last October, the national count had gone as low as 616 and as high as 629, and that was it. No higher and no lower. That is, until two weeks when it crashed through the floor and went lower, down to 613. And now, it has gone even lower, down to 605. The Marcellus/Utica remained even at 40 rigs after losing one rig two weeks ago. Pennsylvania operates 21 rigs; Ohio operates 11 active rigs; and West Virginia operates 8 rigs.
Energy comes in many forms. Most energy produced and consumed in the world comes from fossil fuels. In the United States, fossil fuels (oil, natural gas, and coal) provided 79% of all the energy we used in 2022, according to the authoritative U.S. Energy Information Administration (EIA). The false narrative that so-called renewables (which are unreliable) like solar and wind are about to take over is just that — completely false. The EIA published a post yesterday to note that U.S. carbon dioxide (CO2) emissions coming from the production of energy last year fell by 3% from the previous year, mainly due to the change from using coal to using natural gas to generate electricity.
The first known and recorded miracle performed by Jesus of Nazareth was when he changed 120 gallons of water into wine at a wedding feast in Cana, Galilee. A company in Denmark and a researcher from the University of Manchester (UK) recently published a paper in the Society of Petroleum Engineers’ SPE Journal that claims a similar miracle. They say using a special downhole completion tool, they can convert methane (natural gas) wells into hydrogen (H2) production wells. Wave the magic wand and say the secret phrase, presto magico!
Yesterday the U.S. Energy Information Administration (EIA) published a post to announce that U.S. natural gas consumption set annual and monthly records during 2023. In 2023, some 89.1 billion cubic feet per day (Bcf/d) of natural gas was consumed in the United States, the most on record. Since 2018, U.S. natural gas consumption has increased by an average of 4% annually. Why the significant increase in gas usage? It wasn’t due to residential, commercial, or industrial usage — all of which stayed even or decreased last year. It was (as you may have guessed) a huge increase in the use of natural gas to feed gas-fired power plants.
A team led by Penn State researchers has developed a new tool that can estimate the emissions potential of shale wells after they are no longer active. The researchers claim drillers can analyze their own drill cuttings (samples of shale rock) to determine how much potential there is for methane leakage after a well is abandoned. Which is interesting and perhaps even useful information for Marcellus/Utica drillers. However, a tangential factoid in the news story is what caught our interest and got our mental wheels churning. The factoid is this…
In October 2019, Eureka Resources, which operates three frack wastewater treatment facilities in the Marcellus Shale (and is building a fourth facility in Dimock, PA), began extracting lithium from Marcellus wastewater at one of its plants in Bradford County, PA (see 
Berkeley Research Group (BRG) published a very important new study yesterday that has Big Green tied up in knots. The study, “Comparative GHG Footprint Analysis for European and Asian Supplies of USLNG, Pipeline Gas, and Coal” (full copy below), analyzes methane (CH4) and carbon dioxide (CO2) emissions across leading fuel supply chains for power generation in 13 European and Asian end markets. The study has been under development since 2021. It uses a “bottom-up methodology” to arrive at a comprehensive comparison of the emissions intensity of the primary fuel sources, as well as continuously updated data from numerous sources. It’s far more rigorous and reliable than the typical Big Green propaganda that relies on aggregated emissions information to develop general theoretical conclusions. This is real science.