Enverus US Rig Count Up +1; Marcellus Drops 2, Utica Drops 1 Rig
The U.S. oil rig count pushed to an 11-month high in the week ended March 10, led by a continued recovery in the Permian basin, according to Enverus. The number of active net oil rigs rose by five over the past week to 371, the highest since the week ended April 15 of last year. However, gas-focused rigs decreased. Bummer. The Marcellus in the dry gas northeastern PA region lost two rigs and the Utica in Ohio lost 1 rig. Another gas-focused play, the Haynesville in Louisiana, lost 1 rig.
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Good news. The expert forecasters at the U.S. Energy Information Administration (EIA) have had another look at their predictions for how much natural gas and electricity we will use here in the U.S. and decided to boost their projections for 2021 and 2022. Electric use will grow, EIA says, by 2.1% in 2021 over 2020. As for natural gas, EIA says average daily marketed gas production will increase by 610 million cubic feet per day (MMcf/d) in 2021 to 98.95 billion cubic feet (Bcf/d). EIA is now predicting natgas production in 2022 will increase by 1.7 Bcf/d to 100.63 Bcf/d. We’re pretty sure that would be a new, all-time record high.
Yesterday the Pennsylvania Independent Fiscal Office (IFO) released their latest quarterly Natural Gas Production Report for October through December 2020 (full copy below). There are two exciting bits of news coming from this report that (so far) nobody else is reporting: (1) After eight consecutive quarters (two years) of declining natgas production from shale (comparing the current quarter to the same quarter from the previous year), the trend reversed in 4Q20; and (2) even with all of the curtailments from Marcellus producers in PA last year, the state still produced a record high volume of natural gas–an all-time high record!
The pandemic did its best to shut the world down, and maybe it succeeded in shutting down other countries–but not here in the US of A. Against an onslaught of shutdowns (particularly in “blue” states), people staying home, businesses closing, anarchy and chaos in large Democrat cities…and against an onslaught against fossil fuels by environmental Nazis seeking to destroy the economies of the world via bans of oil and natural gas and coal…U.S. natural gas production decreased by just 1 percent last year. Can you believe it? That’s a victory in our book!
Well, what do you know? Donald Trump’s National Economic Council Director, Larry Kudlow, was absolutely right. We’re beginning to see a V-shaped recovery. Kudlow predicted the economy would bounce right back after the pandemic subsided. S&P Global Platts is showing there is a dramatic V-shaped recovery happening with natural gas production right now.
Another week, another rig count to share with you. As we often point out, rig counts go up and down each week, so it’s good not to get too wrapped up in the “up one week down the next” narrative. After the rig count crashed to historic, all-time lows last year (due to the pandemic and price war from Russia and Saudi Arabia), we began to report more frequently on the rig count. It has become an early indicator for the pace of our country’s economic recovery.
The Gas Exporting Countries Forum (GECF) is an international governmental organization providing a framework for exchanging experience and information among member cuntries. The GECF is a gathering of the world’s leading gas exporting countries and was set up as an international governmental organization with the objective to increase the level of coordination and strengthen the collaboration among its members. GECF publishes an annual report called Global Gas Outlook 2050 (full copy below) that provides long-term energy projections based on assumptions regarding macroeconomic conditions, energy prices, and policies. The most recent report, issued yesterday, makes a startling prediction.
The official state bird for New York State is the tiny Eastern bluebird–no bigger than a chickadee. Here at MDN HQ, we maintain two bird feeders year-round in the front yard. We can remember only maybe 3-4 times over the years we’ve actually seen a bluebird at our feeders. The bluebird is one of our favorites because we see it so rarely. According to researchers at Penn State in State College, PA, loud noise from pipeline compressor stations has the ability to “diminish” the “reproductive success” of bluebirds and other songbirds. Who would even think to conduct such an experiment?
Researchers at the University of Illinois Chicago have discovered a way to convert methane into liquid methanol at room temperature. This is a big deal because methanol burns more cleanly (less carbon dioxide emissions) than burning methane (i.e. natural gas). Prior to this discovery by Chicago researchers, converting methane into methanol required a lot of heat and pressure that generates a significant amount of CO2 as a byproduct. There’s no real advantage to burning methanol created that way. This discovery sidesteps the heat and pressure needed to convert methane into methanol.
Yesterday the U.S. Energy Information Administration (EIA) published the monthly Drilling Productivity Report (DPR). The latest DPR, which shows estimates for oil and gas production from the seven largest shale plays in the U.S., shows a drop in shale gas production across all plays (including the Marcellus/Utica) coming in March–except for an increase in gas production in the M-U’s primary competitor, the Haynesville.
The U.S. Energy Information Administration (EIA) recently issued its Annual Energy Outlook for 2021 (see 
The so-called peak oil theorists have been positively giddy with excitement over predictions about the death of oil. “Just look at how much oil production demand AND supply has decreased since the outbreak of the pandemic. It’s NEVER coming back!” Those are the kinds of things the peakers tell themselves and anyone else who will listen. Mainstream media laps it up and repeats it. But when real researchers delve into the topic of whether or not oil has reached its zenith, the facts tell a far different story.