Ernst & Young Study Finds O&G Still “Core Asset” in Energy Sector
The casual reader of energy-related stories can’t miss the meme spread by “mainstream” media day in and day out. That meme is that renewable energy (wind and solar) is taking over. The world is on the cusp of electrifying everything. Nasty and polluting oil and gas are yesterday. O&G’s day is over and any company that continues to invest in O&G is heading for insolvency. Except it’s all a lie. A new study by powerhouse consulting firm Ernst & Young (EY) finds “US hydrocarbons to be a viable core asset amid the energy transition.” Translation: Oil and gas aren’t going anywhere.
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It’s really sad, and sick, and twisted to watch what’s happening after University of Pittsburgh (Pitt) researchers released three deeply flawed “studies” that don’t prove anything (see 
The left is always full of good intentions. They declare if we hit so-called “net-zero” carbon dioxide emissions (holding carbon emissions to levels from years ago, even though there are more mammals on earth breathing out CO2 with every breath), we’ll save Mom Earth from toasting herself to death. And they set a target date 30 years into the future (2050). It’s always “do this by that date or we all die” with the left. Those dates come and go and…we don’t die. But being wrong every single time doesn’t bother them. Let’s assume for a moment we do need to reach net-zero (however you define it) by 2050. What would that look like here in the U.S.? In a word, it’s a nightmare.
It’s getting even uglier out there. For the sixth week in a row and the 15th of the last 16 weeks, the U.S. active rig count lost rigs. A lot of rigs. Last week the number decreased by a whopping 12 rigs after falling by five rigs per week for the three weeks prior. The total is now down to 642 active rigs across both oil and gas. Sadly, the Marcellus/Utica dropped three rigs last week (after losing two the week before) for a combined M-U rig count of 40–the lowest this year. Last week Pennsylvania picked up two rigs after losing two the week before, but the additions in PA came at the expense of Ohio (lost 2 rigs) and West Virginia (lost 3 rigs).
This is so frustrating. Last week, the University of Pittsburgh (Pitt) issued fake research reports that supposedly link proximity to shale wells with a minuscule (less than one-tenth of one percent) rise in one type of childhood cancer (see 
The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for August issued yesterday (below) shows the EIA believes shale gas production across the seven major plays tracked in the monthly DPR for September will *decrease* production from the prior month of August. This is the second month in a row EIA predicts shale gas production will decrease for the combined seven plays. EIA says combined natgas production will slide by 147 MMcf/d (million cubic feet per day). The Marcellus/Utica, called “Appalachia” in the report, is predicted to slump by 22 MMcf/d in September compared with August.
Once a month, U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. The latest monthly report, issued Tuesday, predicts that U.S. natural gas production AND demand will rise to record highs in 2023. EIA projected that dry gas production will rise to 103 billion cubic feet per day (Bcf/d) in 2023 and 104.12 Bcf/d in 2024. The current record high is 98.13 Bcf/d set in 2022.
For the fourth week in a row and the 13th time in the last 14 weeks, the U.S. active rig count lost rigs. It’s grueling. Last week the number decreased by five rigs after falling five rigs the week before–now down to 659 active rigs across both oil and gas. The Marcellus dropped one rig (in Pennsylvania) for a combined M-U rig count of 45–the lowest this year. Some 14 weeks ago, the M-U lost four rigs (going from 53 down to 49). Seven weeks ago, we lost another rig, down to 48. Last week we lost two more down to 46, and this week another. The trend is not our friend.
The U.S. Energy Information Administration (EIA) published a post noting the increase in the use of energy in the U.S. from 2020 to 2021. Energy usage increased by 25%, adjusted for inflation, in 2021. Why? In 2020 we were deep in the throes of lockdowns due to COVID. Nobody was going anywhere, pretty much, which significantly decreased the use of gasoline and diesel. Once the country emerged from the COVID pandemic, and people began to move around again, energy usage (petroleum products) soared.