U.S. Petroleum Exports Went UP in 1H20…Thanks to NGLs
In the first half of 2020, the U.S. exported 5.4 million barrels per day (bpd) of petroleum products, a slight increase of 48,000 bpd (1%) from the first half of 2019. Wait, what? Exports went UP and not down? Even though the entire world shut down and used far less fossil fuels during 1H? That’s right. The reason we exported slightly more petroleum products is because NGLs (natural gas liquids) are part of those numbers, and the world kept using NGLs, like propane and ethane, even during the COVID shutdown.
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Two days ago MDN brought you news that natural gas prices in the Marcellus/Utica region are about to get really ugly, at least for the next couple of months (see 
Time for our weekly check of the rig count. We like to check the Enverus count because we believe it’s more accurate than the Baker Hughes count. According to S&P’s analysis, the Enverus rig count climbed by a big 15 for the week ending Sept. 23 to hit a nine-week high of 308 active rigs. That’s the biggest one-week gain since the current price war/coronavirus downturn.
S&P Global analysts have been looking at natural gas production numbers for Pennsylvania. The most recently available data is from June (numbers are always delayed a few months). S&P found that shale gas production in PA dropped 2% in June from May, to 18.48 Bcf/d. June’s numbers were essentially flat to the same time in 2019.
Analysts at S&P Global are making a bold prediction: It will take a full ten years for the world to recover from the coronavirus and begin growing its demand for natural gas once again. Something about the prediction just seems “off” to us.
Each quarter the Dallas Federal Reserve conducts a survey of 150-200 oil and gas firms located or headquartered in the Eleventh District–Texas, southern New Mexico, and northern Louisiana. The energy company executives surveyed run companies that operate regionally, nationally, and some even internationally. The Dallas Fed released its latest quarterly Energy Survey results yesterday. We have a full copy below.
Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The DPR estimates how much oil and natural gas each of the country’s seven largest shale plays produced in the previous (i.e. current) month, and how much each will produce in the coming (i.e. next) month. The September report, which predicts production for the coming month of October, estimates natural gas production in the Marcellus/Utica will decrease by 162 million cubic feet per day (MMcf/d)–the eighth month in a row the M-U has seen a production decrease.
The Pennsylvania Department of Environmental Protection (DEP) has just published its 2019 Oil and Gas Annual Report. This is the fourth year in a row the DEP has published the report in an interactive, electronic (i.e.online) format ONLY. What does the 2019 report show? While permits issued and number of new wells drilled have both gone down (again), gas production has gone up (again)–to a new record high.
S&P Global Platts published analysis last Friday looking at supply and demand for natural gas in the Midwestern region of the country. Platts says supplies to the region from places like the Bakken, Midcontinent (SCOOP/STACK), and Rockies will decrease this winter–by a lot. But then, demand in the region will decrease too, given the slumping economy because of the coronavirus pandemic. However, it looks to us like maybe there’s an opportunity for Marcellus/Utica gas, which travels to the Midwest via several pipelines, to make up the difference between supply and demand. The region will still need more gas than supplies available.
Amid all the prattling about so-called renewable energy and how renewables are taking over the world and everyone should just dump using fossil fuels right now because renewable nirvana is here…comes this splash of cold, hard truth. The U.S. Energy Information Administration (EIA) has run the numbers and found that in 2019, like in years past, the vast majority of the energy used by Americans comes from fossil fuels. Some 80% of all the energy we consumed in this country last year came from fossil fuels. Renewables? A minuscule fraction.
The Consumer Energy Alliance (CEA) released an important new study yesterday. Titled “How Pipelines Can Spur Immediate Post-COVID Economic Recovery,” the new study finds delays, obstruction, and cancellation of pipeline infrastructure projects are threatening at least $13.6 billion in economic activity, over 66,000 jobs, and more than $280 million a year in state and local tax revenue at a time when America’s financial recovery from COVID-19 requires MORE investment and tax revenue. A section of the report finds anti-pipeline fanatics in NY, NJ, and PA threaten $3.5 billion worth of investments and 17,000 jobs in our region alone.
Our favorite government agency, the U.S. Energy Information Administration (EIA), maintains a list of pipeline projects going back to 1996. Based on that list EIA recently published an article on their Today in Energy site pointing out during the first half of 2020 some 5 billion cubic feet per day (Bcf/d) of new natgas pipeline capacity (across the entire country) came online. They also point out some 8.7 Bcf/d of previously planned new pipe capacity was canceled in 2020, including Atlantic Coast Pipeline and the Constitution Pipeline, both here in the M-U region. We grabbed the spreadsheet of the 145 active and/or canceled pipelines in 2020 and trimmed it down to show the list of pipelines active or canceled that have the potential to flow M-U molecules. Our list (below) shows 41 active pipe projects and 4 canceled projects.
Last Thursday Pennsylvania’s Independent Fiscal Office (IFO) released its latest quarterly Natural Gas Production Report–for April through June 2020 (full copy below). The report shows natgas production in PA rose 2.8% compared to the same period last year. However, overall production fell 2.8% compared to 1Q20–the second quarter in a row production has fallen quarter-over-quarter.