EIA Predicts Natural Gas Prices in 2018 & 2019 Will be “Flat”
The price of natural gas is a complicated subject. First, “the price” is never just “the price.” Many people look to the NYMEX or Henry Hub spot price as “the price.” Indeed, most of the financial contracts for natural gas are based on the Henry Hub price. However, as we’ve written many times over the years, gas is bought and sold at hundreds of points along major interstate natural gas pipelines. The price at one place on a pipeline, like the Tennessee Gas Pipeline Zone 4 in northeastern Pennsylvania, is vastly different from the Henry Hub. Price is dependent on many factors–supply and demand to be sure. But also weather. Weather is probably the biggest influencer of natgas prices. Why? The warmer (or colder) it is, the more natural gas is used to cool or heat homes and businesses. The more demand, the higher the price. Conversely, the less demand, the lower the price. Henry Hub is a useful yardstick and the most-watched natural gas price in the world. Our favorite government agency, the U.S. Energy Information Administration, recently published their Short-Term Energy Outlook (STEO). In the STEO, EIA predicts the price of natural gas at Henry Hub will remain relatively flat both this year and next year. This year (2018), EIA says the average price of gas at Henry Hub will be $2.88 per thousand cubic feet (Mcf). Next year? EIA says the price will average $2.92/Mcf. The average price of gas at Henry Hub for all of 2017 was $2.99/Mcf. Bottom line: The price of gas is a bit depressing for gas drillers for the foreseeable future. Here’s EIA’s reasoning…
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Last year a peer reviewed study published by researchers from the University of Maryland in the American Geological Union’s (AGU) Journal of Geophysical Research Atmospheres claimed methane was leaking from the Marcellus Shale at a rate of 3.9% based on three flight measurements in September and August 2015. That’s a lot. Using that rate of 3.9%, the authors boldly concluded that shale gas development is a “climate detriment.” They actually said, “the use of natural gas rather than coal for combustion will result in a relatively greater climate impact over the next few decades.” Yeah, burning natgas is worse than burning coal for the environment. Just one teeny, tiny problem. The research is wrong. In a huge “oops we screwed up”–the study has now been retracted. Why? Due to an “error in wind measurements” that led to wildly wrong emissions estimates. And will you read about that in mainstream news–the same news that carried the original “shale gas is worse for the environmental than coal” stories? Nope. Crickets. Silence. Here’s the news from our friends at Energy in Depth about the yet another so-called research study exposed as fraudulent…
A graduate student from New York University, majoring in energy policy, as done us all a favor. He has done a deep dive into the world’s biggest and best onshore natural gas field: the Marcellus/Utica (i.e. Appalachia) to plumb the reasons for its incredible success. Did you know that Marcellus/Utica production has grown a massive 85% since 2014? Or that our region produces more natural gas than all other regions in the U.S.–combined?! Our grad student said, “It is worthwhile to have another look into why Appalachia matters today more than ever to the United States energy economy.” And so he did (below). The secret of Marcellus/Utica’s success? It is “the world’s most innovative gas field.” Let’s find out how and why…
Natural gas has replaced King Coal as the #1 fuel source to generate electricity. According to our favorite government agency, the U.S. Energy Information Administration (EIA), in 2018 natural gas will generate 33% of all electricity generated in the U.S. In 2019 it goes up to 34%. Coal, on the other hand, will generate 30% of all electricity in 2018 (as it did in 2017), and go down to 28% in 2019. Power plant operators will bring 20 gigawatts (GW) of new natural-gas-fired generating capacity online in 2018. That’s the largest increase in natural gas capacity since 2004. Almost 6 GW of this new capacity (30%) will be added in one state: Pennsylvania! That’s another 6 GW powered by Marcellus Shale gas–an important new market for our gas. Here’s the EIA forecast that natgas will remain our primary source of electricity generation for at least the foreseeable future…
Those evil, nasty frackers just LOVE having sex. Sex, sex, sex, all the time. Everybody knows it. When shale workers arrive in town, the incidence of gonorrhea (i.e. “the clap”) goes up. So says a laughable, totally made up “research study” recently published in the so-called Journal of Public Health Policy. This is not the first time we’ve heard this particular anti-fossil fuel argument–that shale causes sexually transmitted diseases (STDs). We’ve highlighted this anti lie a number of times over the years (
For years now the radical Park Park Foundation has been buying its research from a few select professors at a few select universities. One of the scientists for sale is Avner Vengosh, professor of geochemistry and water quality at Duke University’s Nicholas School of the Environment (see 
Once upon a time, it was pretty easy for commodities traders (and others) to predict oil and gas production. You just watch the Baker Hughes rig count. When the number of rigs actively drilling goes up, production will follow X months later. And when active rigs go down, production goes down too. But that is no longer the case! Why? Shale wells are producing more over a longer period of time. And the technology used when drilling today is radically different than tech from just a few years ago. Drillers now drill wells faster–much faster–meaning they can use fewer rigs. And frackers are using “hellish” amounts of sand to frack wells, producing ever-more quantities of oil and gas. What it all means is this: If you’re a trader, you can no longer depend on rig counts as your main metric to calculate production. You need new metrics, such as…
Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. The numbers are AMAZING. Natgas production continues to be on fire (poor metaphor, but the only thing we can think of)–especially here in the Marcellus/Utica region, which is labeled “Appalachia” in the report. EIA predicts production in the Marcellus/Utica will soar another 377 million cubic feet per day (MMcf/d), which is more than one-third of a billion cubic feet (!), between January and February. Incredible! What’s even more incredible: Marcellus/Utica production, predicted to be 26.8 Bcf/d in February, represents 42% of all shale natural gas production in the U.S. Our region is a MONSTER natural gas producer. Here’s the latest DPR with the amazing news…
A new “research study” was recently published that, per the usual routine, is generating false headlines that leave a false impression. The study is called “Sustainability of UK shale gas in comparison with other electricity options: Current situation and future scenarios,” published in the so-called journal, Science of The Total Environment. Here’s an example of a headline it’s generating in fake mainstream news: “Shale gas is one of the least sustainable ways to produce electricity, research finds” (Phys.org). We’ve seen that headline or variations of it in a number of publications. The narrative being spun by anti-fossil fuelers in quoting the study is this: “You know how shale gas has taken over as king of producing electricity–well you should ignore all of its benefits (clean burning, less polluting, cheaper) and instead use renewables because shale gas isn’t really sustainable and all that great after all.” That’s the upshot of the study, and the stories about the study. Just one teeny, tiny problem: The “research” is fake. Fraudulent. A heaping pile of doo-doo. The so-called researcher concocted his own biased set of criteria on which to judge various forms of electricity generation sources, and then declared shale gas flunks the test. Once again, fake research based on a twisted, biased worldview that says all fossil fuels are evil…
It never ceases to amaze us at how an unshakable belief in the myth of man-made global warming drives normally sane people to do insane things. Like using millions in taxpayer dollars (“grants”) to figure out a way to convert shale gas into a more “environmental friendly” form of fuel for energy usage–explosive hydrogen. Methane (i.e. natural gas) has one carbon atom along with four hydrogen atoms–CH4. What do you do with that carbon atom when you split methane into its component parts? We can’t have that carbon atom mating with a couple of oxygen atoms and forming CO2 (carbon dioxide)! Perish the thought!! (Even though CO2 is what you exhale every time you breathe, CO2 has been bastardized into being considered a pollutant by the general population thanks to the efforts of Big Green.) West Virginia University, along with Southern California Gas Company and Pacific Northwest National Laboratory, is launching new research this month that aims to convert “methane to CO2-free hydrogen and solid carbon nanotubes”–that is, into hydrogen and “good” carbon, not “bad” CO2 carbon. Whatever…
Our favorite government agency, the U.S. Energy Information Administration, issued its latest Short-Term Energy Outlook (STEO) on Tuesday (full copy below). Most of the headlines in the media have been about EIA’s prediction that U.S. oil output will hit its highest level EVER in 2018. As in ever, in all of history. The simple reason for the record output is, of course, shale oil output–most of it coming from the once-sleepy Permian Basin in Texas. Something overlooked in yesterday’s report is that 2018 and 2019 will see the most U.S. natural gas output, EVER. EIA says that in 2018 the U.S. will average an additional 6.9 billion cubic feet per day (Bcf/d) of natgas production. That is “like the U.S. adding the entire output of Turkmenistan — one of the world’s largest gas exporters — in the space of just one year.” Astonishing! There are two reasons why natgas production will see an historic increase this year: (1) associated gas–the more you drill for oil in the Permian and Bakken, the more natgas molecules come out of the ground along with the oil; and (2) the main reason…new pipelines in the Marcellus/Utica. “Pipelines able to carry roughly 7 billion cubic feet of gas a day away from the prolific Appalachian region are due to start up this year, allowing production that’s been bottled up in the East to flood out.” Thank you Marcellus/Utica for lifting the entire country to new heights!…
One of the loudest, most persistent arguments by Democrats (and RINOs) in Pennsylvania in favor of a severance tax is that the existing impact fee (actually, better called an impact “tax”) have decreased over time because of a decrease in the number of new wells drilled due to the downturn in the market. There are two gigantic problems with their argument: (1) the impact tax has turned around, and is rising again (see 
In February 2015, Philadelphia-based economic consulting firm Econsult Solutions released a study looking the potential economic impact of the Mariner East 1 & 2 projects, concluding the two project together would result in $4.2 billion coming to Pennsylvania (see 
Yesterday the U.S. Department of Energy (DOE) announced the selection of six projects to receive approximately $30 million in federal funding for cost-shared research and development in unconventional oil and natural gas recovery. One of the six projects is for the Appalachian region (Marcellus/Utica area). DOE is chipping in $8 million and another $3.1 million is coming from other sources for a total of $11.1 million to study “the resource potential for multi-play production of emerging unconventional reservoirs in the Nora Gas Field of southwest Virginia.” That’s the first we’ve heard of the Nora Gas Field. Turns out the Nora field, located mainly in Dickenson County, VA, has a lot of conventional and coalbed methane gas wells. The research project will determine if the gas locked away in the Nora might be accessed with horizontal fracking. The project will also look at “novel completion strategies for lateral wells in the unconventional Lower Huron Shale” and the “resource potential of the Cambrian Rogersville Shale.” In other words, this research may well lead to active shale drilling in the Old Dominion State…
Clever researchers at Ohio State University have figured out a way to convert shale gas into products like methanol and gasoline–all while *consuming* carbon dioxide. That is, the process yields zero CO2 emissions (which will thrill global warming believers). Of course the process converts one fossil fuel into another, and just because it’s called “fossil fuel” the warmers still won’t be happy. Whatever. This is exciting new technology with big potential. Not only does the conversion not emit any CO2, it actually *uses* CO2 from outside sources–sopping up some of that over-abundant CO2 that comes from cow burps (and flatulation). The same researchers have also figured out how to use a chemical reaction to “transform” coal into electricity (without burning the coal). Pretty heady stuff. We’d almost call it alchemy! Here’s the lowdown…