PA DEP 2021 Annual O&G Report: Highest NatGas Production Ever
Last Thursday, the Pennsylvania Department of Environmental Protection (DEP) published its 2021 Oil and Gas Annual Report (about five months late). This is the sixth year in a row the DEP has published the report in an interactive, electronic (i.e. online only) format. Don’t worry, we’ve turned the report into a convenient PDF for MDN readers. What does the 2021 report show? Permits issued went down, but the number of new wells drilled went up. Natural gas production has gone up (again)–to another new all-time record high.
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It’s been a while since we’ve updated rig count numbers–mainly because the most reliable source we can find about basin numbers comes from S&P Global Commodity Insights (based on Enverus rig data), and S&P has not provided an update for a few months. This week they did update the number, and they are interesting. According to S&P’s analysis, based on Enverus data, the Haynesville Shale in northern Louisiana and eastern Texas (the main competitor to the Marcellus/Utica) is showing 81 active drilling rigs. That is an astonishing number, up some 37% over the same time last year. The current active rig count in the M-U, according to S&P, is 47 (with 33 rigs operating in the Marcellus and 14 in the Utica). The Haynesville is running 1.7 rigs for every 1 rig in the M-U. This is the worst imbalance we’ve seen to date.
The International Energy Agency (IEA) is at it again. In May 2021, IEA issued an astonishing report calling for an end to all investments in oil, gas, and coal to reach the fantasy goal of net zero by 2050 (see 
JobsOhio, a private nonprofit largely funded by liquor sales that the state allows the nonprofit to collect (in essence, it collects sales tax on liquor sales), pays Cleveland State University to research and issue a report every six months on Utica Shale investment. The latest semi-annual report (full copy below) covers shale investment in the Ohio Utica from July 2021 through December 2021. Here’s an astonishing statistic: With this latest report, total Utica Shale investment in the state of Ohio since 2011 is nearly $100 billion!
Contrary to all the blabbering by enviro-nuts, using natural gas reduces so-called greenhouse gas emissions, specifically carbon dioxide (CO2), and helps to achieve theoretical “net-zero” carbon emissions much sooner than by not using natural gas. Validere, a measurement, reporting, and verification (MRV) SaaS company, released a study on Friday that is eye-opening. The study looks at the climate benefits of building and using two Appalachia-to-Southeast pipelines–the Atlantic Coast Pipeline (ACP, now canceled), and the Mountain Valley Pipeline (MVP, on pause).
New analysis by S&P Global Commodity Insights finds higher natural gas prices have made methane capture projects increasingly economic, potentially unlocking vast amounts of new supply while lowering overall emissions. The analysis, funded in part by the Environmental Defense Fund (EDF), an anti-fossil fuel organization, says projects that capture and commercialize vented, fugitive, and flared methane are now cost-effective, given the high price of natural gas. In general, we agree.
We spotted a post by our favorite government agency, the U.S. Energy Information Administration (EIA), that says although natural gas use by the “industrial sector” leveled off over the past few years, industrial sector usage of natgas is growing again, at least for this year. EIA figures industrial sector usage will grow 2.4% in 2022. However, due to the high price of natgas and the sucky Biden economy, EIA believes industrial sector gas usage will decrease 3.4% in 2023.
S&P Global Commodity Insights issued its latest 2023 Energy Outlook yesterday. The analysis is quite interesting, with ten “key themes” that will most affect world energy (and oil/natgas prices) next year. The number one key theme may surprise you: “China’s COVID policy is the most important fundamental factor for energy markets.” If not for China shutting down entire regions in an effort to stamp out COVID spread, S&P says the price for commodities like oil and natural gas would have continued to be high this year. If China’s demand comes roaring back in 2023, watch out! Prices will be “well supported,” according to S&P. More like “through the roof.” If COVID continues and China’s demand stays low, look for prices to remain lower too.
Each year oil and gas supermajor BP (formerly British Petroleum), one of the largest oil companies in the world, publishes an annual Statistical Review of World Energy. We typically bring you a copy with analysis, as we did for the 71st annual edition published in July of this year, covering 2021 (see 
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).