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PA, OH, WV Rig Count Jan 2021 Thru Nov 2022 – Trending Up
While tracking the active rig count week by week can give you a little sugar high, we think tracking the count month by month is more illustrative of where the count (and drilling activity) is heading. Baker Hughes is the grandaddy of rig counts, having tracked rigs since 1944. You need a rig to drill a new well, so counting active rigs gives you an idea of overall drilling activity. What do the rig counts look like for Pennsylvania, Ohio, and West Virginia over the past two years? Is drilling activity going up, or down, in our region? We have the answer.
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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.
The left, and many on the right, are banking on hydrogen to be the next BIG THING in energy. Hydrogen fuel cell cars and burning hydrogen to heat your home are just two huge applications people dream will come true in the next 20 years. Of course, they’ve been dreaming about hydrogen for more than 50 years, but the history of hydrogen is for another post. We pay attention to hydrogen because 95% of all hydrogen today is produced by steam cracking natural gas. Ergo, hydrogen has the potential to be a big, important, new customer for our molecules. Everyone and his brother is making predictions about the market for hydrogen over the next 30 years. Norwegian company DNV has its own prediction, the “Hydrogen Forecast to 2050.”
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.
National Grid is desperately trying not to run out of natural gas for its customers in Brooklyn and Queens (on Long Island). For several years the company has fought a battle to run a tiny pipeline to its Greenpoint, Brooklyn facility to provide extra natural gas. That project is being investigated by the Biden administration on charges of racism (see 
The U.S. Energy Information Administration says natural gas consumption in all sectors in the United States was effectively flat between 2020 and 2021, down by only 0.5 billion cubic feet per day (Bcf/d). The pandemic was to blame. Natgas usage hit a record high in 2019, just prior to the pandemic, but has decreased since that time. In 2021, natural gas used in the electric power sector (which is the largest U.S. natural gas-consuming sector) decreased by 3%. However, and this is the good news, the EIA predicts natural gas-fired generation will increase by 5% this year.
We began to see the latest fake news attacks against natural gas nearly two weeks ago. The extreme, leftwing activist group Physicians, Scientists and Engineers for Healthy Energy (PSEHE) produced a junk science report that claims the natural gas in your cooking stove is leaking gas that contains chemicals that cause cancer. Mainstream outlets, like NBC News, dutifully (without verifying it) reported this nonsense like it was legitimate science news. It is not. It’s quackery. But then NBC (and others like it) have VERY low standards. NBC is more into propaganda and advocacy than it is reporting objective, unbiased news. No worries. We will debunk it for you below.
In 2021, the use of coal in the U.S. to fire power plants actually rose by 16% after it had declined steadily, year after year, from 2014 to 2020. The U.S. Energy Information Administration (EIA) expects coal used to fire power plants in the U.S. to decline again this year, even though the price of natural gas has doubled and tripled. Coal and natgas are typically interchangeable, and power generators use whichever costs less. But not, it seems, anymore.
Norwegian company DNV operates as a quality assurance and risk management company. It offers supply chain, data management, technical assurance, software, and advisory services. DNV recently published its annual Energy Transition Outlook 2022. DNV’s predictions are somewhat shocking. The company is a global warming Kool-Aid drinker, believing we’ll all toast if we don’t “transition” away from burning fossil energy by 2050. Yet DNV’s report shows it thinks by 2050, the U.S. and Canada will still be 66% powered by fossil energy, primarily natural gas.
Sometimes natural gas pipelines leak. Hey, it happens. Not often, but it happens often enough that pipeline companies must prepare risk assessments of the potential hazards posed by a pipeline leak. They now have a new tool to make those assessments. According to a new study published by researchers at Southern Methodist University, soil moisture content is the main factor that controls how far and at what concentration natural gas spreads from a leaked pipeline underground.