EIA DPR: Shale NatGas & Oil Production Flirt with Record Highs
Six of the seven largest shale plays in the U.S. will see an increase in natural gas production in December according to the latest monthly Drilling Productivity Report (DPR) issued by the U.S. Energy Information Administration (EIA). Sadly, the Marcellus/Utica, collectively lumped together as “Appalachia” in the report, will see the lowest increase of just 7 MMcf/d (million cubic feet per day) in production next month. The M-U’s chief rival, the Haynesville, continues to see explosive growth, an increase of 111 MMcf/d. The oil-based Permian will see an increase in natgas production of 87 MMcf/d due to associated gas coming out of the ground along with oil.
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Democrats, who are truly desperate and hoping that massive theft of some people’s money to use in bribing other people to vote for them, finally passed a $1.2 trillion so-called infrastructure bill last Friday. It’s a “Hail, Mary” move aimed at trying to retain some of their power, which they will certainly lose in the 2022 election. Here’s what to know about the bill, which tries (but ultimately fails) to reduce the use of fossil fuels: Of the $1.2 trillion allocated over the next five-plus years, only $110 billion (or 9%) of it will actually be used for infrastructure–roads, bridges, etc.
GM, Ford, and other Big Auto companies might want to rethink their ill-advised plans to manufacture only electric vehicles beginning a few years from now based on dementia Joe’s big plans to electrify everything, including transportation. Biden’s own U.S. Energy Information Administration (EIA) predicts the number of “light duty vehicles” or LDVs (cars and trucks) worldwide will nearly double in the next 30 years, from 1.31 billion LDVs on the planet in 2020 to 2.21 billion in 2050. But the big news is that only 31% of all those 2.21 billion LDVs in 2050 will be electric-powered vehicles. The rest will be powered by gasoline, diesel fuel, and natural gas. Tell us again (so we can have a good laugh) about the end of fossil fuels in the next 10-15 years. 🙂
Everyone is scratching their heads trying to figure out why, given the price natural gas is fetching in both the futures and physical spot price market, natural gas drillers don’t drill more wells. The excuse given is that budgets are cast, plans made, and by gosh companies are finally showing fiscal discipline and sticking to their plans because if they don’t, investors will scream bloody murder. The last time we checked investors don’t mind spending a little more money to drill new wells if it puts more money in their pockets! That message finally seems to be getting through. Yesterday U.S. natural gas production surged to its highest level since late August (when Hurricane Ida struck, shutting down natgas production in the Gulf). Most of the gains came from more production in the Marcellus/Utica.
This is an avoidable tragedy and very angering. Once again it looks as though Boston and the New England region will be hit with extremely high natural gas prices and will be forced to import LNG, most likely from Russia, to meet the region’s demand for natural gas. So says the Democrat-controlled Federal Energy Regulatory Commission (FERC). Meanwhile, the Marcellus Shale in Pennsylvania sits a couple of hundred miles away with more than enough gas to meet New England’s natgas demand, but we can’t get the gas there because pipelines have been blocked (by the Democrats who control New York and New England) and because rail shipments of LNG are blocked by executive orders from Joe Biden. We can’t even ship it there via LNG tankers because of the idiotic Jones Act.
Earlier this week the Potential Gas Committee (PGC) released the results of its latest biennial assessment of the nation’s natural gas resources. The report shows the U.S. possesses a total mean “technically recoverable resource base” of 3,368 trillion cubic feet (Tcf) as of year-end 2020. That number is 6 Tcf (or 0.2%) less than the amount of gas assessed in the previous period (from year-end 2018). The slight decrease breaks a trend of seven consecutive record-high resource evaluations. However, the report also shows we have more than enough gas to provide not only our own country’s needs, but also the gas needs for much of the world too.
Six of the seven largest shale plays in the U.S. will see a slight increase in both natural gas and oil production in November according to the latest monthly Drilling Productivity Report (DPR) issued by the U.S. Energy Information Administration (EIA). The Marcellus/Utica, collectively lumped together as “Appalachia” in the report, will see an estimated increase of 41 MMcf/d (million cubic feet per day) in production next month–something of a disappointment. The M-U’s chief rival, the Haynesville, will see explosive growth, an increase of 135 MMcf/d. The oil-based Permian will see an increase in natgas production of 78 MMcf/d.
Each month the U.S. Energy Information Administration (EIA) issues a Short-Term Energy Outlook (STEO). In the latest STEO update, released two days ago, EIA predicts the Henry Hub spot price will average $5.80/MMBtu in 4Q21, which is $1.80/MMBtu higher than EIA forecasted in their September STEO (see 
Well permits, long tracked by MDN, are a leading indicator of drilling activity. In Pennsylvania, four of the state’s five biggest producers–EQT, Chesapeake Energy, Range Resources, and Southwestern Energy–have kept the pace of drilling new wells “subdued” according to an analysis by S&P Global Market Intelligence. The top five producers in PA accounted for only 51% of the permits issued in September, down from 53% in August. Normally, the top five drillers account for roughly two-thirds of permits issued each month.
The Natural Gas Supply Association (NGSA) released its Annual Winter Outlook yesterday. In comments made during a presentation to the press, NGSA Chairman David Attwood said he expects U.S. shale producers to come off the sidelines in response to the highest natural gas prices in nearly a decade. That’s good news. “I firmly believe the market works,” Attwood said in response to a question made by the press during the presentation. “There is no doubt the market is giving strong signals for production to increase. That supply is there and will come and meet the demand,” added Attwood.
Brian Anderson is director of the National Energy Technology Laboratory (NETL) and now the head of the Biden administration’s Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, an effort to kill the use of fossil fuels (see