US NatGas Production Sets All-Time High Monthly Record in 2022
According to the U.S. Energy Information Administration (EIA), U.S. dry natural gas production increased during 2022 and averaged more than 100 billion cubic feet per day (Bcf/d) in both October and November–exceeding pre-pandemic monthly production records from 2019. EIA forecasts that U.S. production of dry natural gas will average about 100.0 Bcf/d from December through March, down slightly (about 0.5 Bcf/d) from November, but still at record-high levels.
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It’s been a tough year for many people–for just about every human on planet earth. Russia’s illegal invasion of Ukraine and the fallout with Europe cutting back on purchases of Russian oil and natural gas have rippled across the planet, causing high energy prices and a recession. Energy consulting firm Wood Mackenzie (WoodMac) has put together analysis in a new report that looks for the proverbial silver lining in all the bad news. WoodMac has appropriately named this report, “The Silver Linings Playbook.” In it (full copy below), WoodMac lists five key developments that, despite the setbacks of the past year, are “laying the foundations for the delivery of more reliable, affordable and sustainable energy.” Interestingly, all five of the developments deal with using more fossil energy.
Once a month, the analysts at the U.S. Energy Information Administration (EIA) 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 or so. We sometimes poke some good-natured fun at the EIA because one month their predictions go up, the next month down, etc. What about the latest STEO, published on Tuesday? EIA predicts average natural gas production will be just above 100 Bcf/d in 2023 (after predicting last month it would average below 100 Bcf/d). As for the commodity price of gas, EIA says the Henry Hub spot price will average right around $6/MMBtu in 1Q23.
Accenture plc is an Irish-American professional services company based in Dublin, specializing in information technology services and consulting. Earlier this morning, Accenture published a report titled, “The Reinvention Reset — From Bold Plans to Pragmatic Actions” (full copy below). The report is based on Accenture’s own industry research and a global survey of more than 200 oil and gas executives that focuses on the efforts of O&G companies to “reinvent” themselves. Accenture is a Fortune Global 500 company with revenues of $61.6 billion in 2022 and a workforce of 721,000 people, so you should pay attention to what they say about the O&G space.
There are advantages and disadvantages to being publicly or privately owned. In the oil and gas sector, most large companies are publicly owned–meaning they have a board of directors, and the “owners” hold shares of stock in the company, shares traded on public exchanges. In the Marcellus/Utica, most of the top drillers are publicly owned: Range Resources, Coterra Energy, CNX Resources, EQT Corporation, Antero Resources, Southwestern Energy, Repsol, National Fuel Gas Company (i.e. Seneca Resources), and Gulfport Energy. Several others are privately owned, including Ascent Resources (Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S.), Greylock Energy (based in West Virginia), and Olympus Energy (which drills in the Pittsburgh suburbs).
This morning the Pennsylvania Independent Fiscal Office (IFO) released its latest quarterly Natural Gas Production Report for July through September 2022 (full copy below). There were 158 new horizontal wells spud (drilled) in 3Q22, an increase of 47 wells (+42%) compared to 3Q21. However, natural gas production volume was 1,878 billion cubic feet (Bcf) in 3Q22, a slight decrease (-0.8%) from 3Q21. It is the third quarterly decrease in production in a row (comparing the same quarters year-over-year). However, 3Q22 production was up slightly (+1.4%) from 2Q22.
Most New Yorkers are clueless about a law passed in 2019 called the Climate Leadership and Community Protection Act (or “Climate Act”), which limits carbon dioxide emissions to zero (an impossibility) by 2050 (see 
Yesterday Northwood University (in Michigan), along with the Mackinac Center for Public Policy (also in Michigan), published a new study called, “The Truth About Natural Gas: A Wellspring for the U.S. and Global Energy Future” (full copy below). The study says we ignore the many benefits of natural gas at our own peril. Flawed energy policies by the Bidenistas are harming our ability to meet everyday needs. The study looks at Europe and the boneheaded policies they adopted that reduce domestic natural gas production there. Europe’s policies have created an all-out energy crisis for its citizens (don’t blame Putin–if Europe had its own supplies of natgas it could tell Vlad to kiss off).
A new study from the American Gas Foundation (full copy below) concludes that the ability of the natural gas system to meet seasonal and peak day demands and to reliably deliver natural gas, even during high-impact events, represents an important and valuable resource that must be considered when designing future energy systems and building pathways to a low-carbon future. In other words, solar farms and windmills alone will NEVER be enough to provide reliable energy for the American consumer. If we want “resilience” (the capacity to recover quickly), we need natural gas. It’s that simple.
So much for the “peak gas” theorists out there who predict we’ve finally hit the top of natural gas usage in this country. It isn’t happening. The U.S. Energy Information Administration says, after analyzing its mountains of data, that the U.S. *increased* its usage of natural gas for all purposes, including exports, by 3.6% last year. We’re abundantly certain this year will show a similar increase.
Once a month, the analysts at the U.S. Energy Information Administration (EIA) grab the official Henry Hub pricing dart board and play a quick game to determine what price they will predict for the average Henry Hub spot price for natural gas for the rest of this year, and an average price for all of next year. Two months ago (in September), EIA predicted in its Short-Term Energy Outlook (STEO) that the Henry Hub average price for natural gas in the fourth quarter of this year would hit $9/MMBtu, and the average for all of 2023 would be around $6/MMBtu (see 
Fortuitously, following our rant on EQT joining the United Nations Oil & Gas Methane Partnership 2.0 (see EQT Receives United Nations “Gold Standard” Stamp of Approval), we happened across a summary of a newly published report by O&G consulting giant Wood Mackenzie on so-called Scope 3 emissions and how oil and gas companies are struggling to plan for tracking (and to reduce) Scope 3. This report confirms exactly what we are saying: Programs like the U.N.’s OGMP 2.0 will eventually (sooner rather than later) begin to put the squeeze on oil and gas to track and reduce Scope 3. The obvious conclusion is that our O&G companies will be forced to exit the oil and gas business altogether to remain compliant.