New “Report” Attacks WV Shale, Advocates 10% Severance Tax
A partisan left-wing group calling itself the West Virginia Center on Budget & Policy along with another partisan left-wing group called the Institute for Energy Economics and Financial Analysis (IEEFA) released a report last week that claims WV’s shale industry has “fallen short” in delivering on economic promises, and the way to fix it is to boost the severance tax from 5% to 10%! Yeah, they’re out of their collectivist minds.
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It’s good to step back every now and again and look at who is drilling, how much they are drilling, and where they are drilling. We have such a list below for the 42 active shale drillers in Pennsylvania.
The U.S. Energy Information Administration recently published its Annual Energy Outlook for 2019. Among the numbers EIA released are predictions about how much natural gas liquids (NGLs) the U.S. will produce between 2018 and 2050. EIA says production will go up 32% over that period, to 5.8 million barrels per day (b/d). Guess where most of that increase will come?
As we have noted recently in a number of posts, it appears we’re heading into a dip of drilling activity–not only in the oil plays but also here at home in the Marcellus/Utica (see 
Yesterday our favorite government agency, the U.S. Energy Information Administration, issued our favorite monthly report, the Drilling Productivity Report. The DPR is a forecast of oil and gas production in the country’s seven major shale plays for the coming month, made by the expert number crunchers at EIA.
Here’s an interesting factoid: Even with our improved fracking technology, the amount of oil and gas that stays in the ground after a well is fracked is around 90%! Yes, even on our best days we’re only extracting maybe 10% of the fossil fuels down there. Can that ratio be improved?
A new report (full copy below) by the U.S. Chamber of Commerce Global Energy Institute (GEI) found that the anti-energy “Keep it in the Ground” (KIITG) movement has prevented at least $91.9 billion in domestic economic activity and eliminated nearly 730,000 job opportunities. In addition, federal, state, and local governments have missed out on more than $20 billion in tax revenue.
Because of lawsuits, regulatory actions by Pennsylvania, and (most relevant) delays from problematic underground geology near Philadelphia, the Mariner East 2 and 2X pipelines, being laid side by side, will temporarily use a 12-inch pipeline near Philadelphia already in the ground but no longer in use to patch together and complete the ME2 and 2X project.
The Ohio Dept. of Natural Resources (ODNR) issued third quarter 2018 production numbers for Utica shale oil and gas production yesterday. And what a report it is! Natural gas production was up an amazing 31% over the same period last year (after being up 42% in 2Q18). Utica natgas production broke another record, hitting a new all-time high of 605 billion cubic feet (Bcf) in 3Q18. But perhaps the biggest story was Utica oil production. In 1Q18 Utica oil production was down 3.6%. In 2Q18 Utica oil production was up 11%. But in 3Q18, Utica oil production soared, going up 32%.
The “Beast in the East” (Marcellus/Utica) continues to roar, according to our favorite government agency, the U.S. Energy Information Administration. EIA publishes our favorite monthly report, the Drilling Productivity Report (DPR), a forecast of oil and gas production in the country’s seven major shale plays for the coming month. The latest DPR shows that the Marcellus/Utica region (called Appalachia in the report) will expand by another amazing 414 million cubic feet of natural gas production per day (MMcf/d). The increase is a response to new pipelines coming online in the region, carrying our gas to other regions where it fetches a higher price. Not only is M-U production off the charts, so is natural gas production collectively, across all the plays. EIA says that in January, production from all seven plays will go up another 1.1 billion cubic feet per day (Bcf/d), after it went up 1 Bcf/d in November (see 
What if the shale revolution had never happened? We’d be another $250 billion in the hole with our trade deficit. That’s the finding of a new report released by IHS Markit titled “Trading Places: How the Shale Revolution Has Helped Keep the U.S. Trade Deficit in Check.” The report finds the total U.S. merchandise trade deficit in 2017 was $250 billion lower than it otherwise would have been if the petroleum (crude oil, refined products and natural gas liquids – petroleum liquids separated out from natural gas and also known as NGLs) trade deficit had remained at its 2007 level. Thank God for shale! The report also examines the impact of rising U.S. oil, natural gas and chemicals production on the domestic trade merchandise balance and how the U.S. position in energy and chemicals may evolve in coming years. Interesting stuff.
Continuing on the topic of the NGL storage hub that is today’s lead story (see Appalachian NGL Storage Hub Enters Phase 2 – Built in 2-3 Years?), a number of politicians previously lobbied the U.S. Department of Energy to study the issue of if, and where, a natural gas liquids (NGL) storage hub should be located. Namely, West Virginia’s two U.S. Senators, Shelly Moore Capito and Joe Manchin, were behind the request for a DOE study (see