U.S. Rig Count Drops Another 6 Rigs, Now Lowest Level in 16 Mos.
For the second week in a row and the 11th time in the last 12 weeks, the U.S. active rig count lost rigs. Last week the number decreased by six rigs, after falling five rigs the week before (see U.S. Rig Count Drops 5 Erasing Most Gains – M-U Stays Even 2nd Wk). Fortunately, the Marcellus/Utica maintained its count at 48 active rigs combined. However, 12 weeks ago, the M-U lost four rigs (going from 53 down to 49). Five weeks ago, we lost another rig, down to 48. And that’s where the count has remained (see the MDN chart below).
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Kimmeridge Energy, a private investment firm focused on the energy sector, yesterday published a white paper entitled, “I Still Haven’t Found What I’m Looking For.” The thesis of the Kimmeridge report is that there are still too many (and too small) drillers in the shale sector. Kimmeridge believes we need consolidation into fewer, and bigger, companies. Why? There are not enough investors to go around, according to the report. As a result, the valuation of existing too-many public companies is too low. The fix is for fewer and bigger shale drillers.
Researchers with the University of Pittsburgh (Pitt) recently published a study in the journal Ecological Indicators. The study’s intent was to measure whether or not frack waste dumped in local landfills has radiation that is leaking out in groundwater (leachate) from those facilities. Research like this, if legitimate (and accurate), is a good thing. We need to know if the waste we’re dumping is causing a problem. But a funny thing happened during the study. The researchers found a big problem with recordkeeping.
PJM is the largest electric grid operator in the U.S. It serves 65 million people in 13 states plus the District of Columbia (including PA, OH, and WV). PJM came under withering criticism for an almost blackout during the Christmas cold snap last Dec. 23-25. If not for certain gas-fired peaker plants, like that in the Little Town of Bethlehem, the lights would have gone out during a brutal cold snap (see 
The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for July issued yesterday (below) shows the EIA believes shale gas production across the seven major plays tracked in the monthly DPR for August will *decrease* production from the prior month of July. This is the first month-over-month decrease prediction for the combined seven plays since December. EIA says combined natgas production will slide by 100 MMcf/d (million cubic feet per day). The Marcellus/Utica, called “Appalachia” in the report, is predicted to slump by 16 MMcf/d in August from July.
The New York Independent System Operator (NYISO) is warning of a shortfall in electric generating capacity for New York City in 2025 when peaker plants–on-demand electric-generating plants that use fossil energy–are due to retire. Each quarter NYISO issues a short-term assessment of reliability. In April, the NYISO quarterly report warned about coming blackouts in 2025 (see 
The yo-yo behavior of the national rig count continues. Two weeks ago, the U.S. rig count broke a nine-week-straight decline by adding six rigs (see 
This one has us laughing our considerably fat rear-ends off. The left long ago corrupted science, turning it from the pursuit of objective facts into forced obedience to political opinions (i.e., global warming is caused by fossil fuels). The left issues mountains of data–graphs, tables, pictures–that supposedly prove they are correct with their opinions and theories about global warming (which they renamed “climate change”). But what’s this? Many people don’t believe all of those graphs and tables and data being pushed–they’re just too dumb to understand it. What’s the solution? Instead of using charts and graphs generated by Microsoft Excel that are so literal, have artists redraw them as “fine art” to make them look prettier. The left says, in a new study, dumb folks will fall for the pretty pictures every time.
The analysts at the U.S. Energy Information Administration (EIA) have been looking at natural gas production in the Marcellus/Utica (i.e., Appalachia) for 2022. The M-U is the largest-producing natural gas shale play in the world. Pennsylvania is the second-largest producer of natural gas in the U.S. after Texas. The EIA looked at PA’s production, specifically production from the four largest-producing counties, for 2022. They found what we told you about back in March: Production in PA has fallen (see 
Yesterday the International Gas Union (IGU) released its 14th annual 2023 World LNG Report–the world’s most comprehensive public source of information on key developments and trends in the LNG sector (full copy below). With the Russian invasion of Ukraine, the gas markets went wild last year. The IGU report calls 2022 the “most turbulent year of gas markets” in history and says, “LNG demonstrated essential value as a flexible, reliable, available energy resource for a secure energy transition.” Forget about the energy transition nonsense in that statement. The fact is, LNG saved the day over the past year plus. LNG, particularly U.S. LNG, pulled Europe’s bacon out of the fire.
The weekly rig count for the U.S. finally, after nine straight weeks in a row, turned around–just a bit. With its venerable rig count, Baker Hughes reported last Friday that overall, the U.S. rig count added six rigs, reversing a downward trend. There were 680 active rigs for the week ending July 7. Both the Marcellus and the Utica maintained the same rig levels for the past four weeks in a row with a cumulative 48 rigs. That number is down from an average of 52 it had been running for the first five months this year. The good news is that we haven’t lost any more rigs.
Pennsylvania’s Democrat Party is hellbent on driving the Marcellus Shale industry out of the state. They have been for years. That’s just a truthful observation and beyond dispute. The latest evidence is the party’s insistence on adding a severance tax on top of the existing impact fee, PA’s version of a severance tax. The Dems in the PA House passed a resolution on Friday by a single vote that directs the Legislative Budget and Finance Committee to “study” Pennsylvania’s revenue from the oil and gas industry, comparing it with the top five states in natural gas production in the U.S.
Domestic consumption and export of natural gas in the U.S. grew a combined 34.5 billion cubic feet per day (Bcf/d), or 43%, from 2012 to 2022. One of the biggest reasons for the dramatic increase was a mass change from producing electricity with coal plants to using natural gas-fired plants instead. So says the U.S. Energy Information Administration (EIA) in a new post.
Earlier this year, British oil giant BP announced it would no longer publish its vaunted annual Statistical Review of World Energy, a publication it has issued each year since 1952 (see