Big Tax Loophole for OH Gas-Fired Power Plants Owned by Data Centers
Data centers are all the rage these days. It seems like a new data center is announced weekly somewhere in the Eastern U.S. Ohio has its fair share of them coming to the Buckeye State (see our Ohio data center stories here). Back in 2013, the state passed a law incentivizing companies to build data centers in the state. Now, the state is seeing a flood of new data centers. Data centers need a lot of power, and they need it badly. So, many of the data centers are building captive gas-fired power plants to provide electricity. Gas-fired power plants don’t get big tax breaks like data centers do, but in this case, the gas-fired plants are considered part of the data center, ergo, they qualify for the tax break. Ooops. Read More “Big Tax Loophole for OH Gas-Fired Power Plants Owned by Data Centers”
A group of 26 financial officers (state treasurers) from 21 states sent letters to 18 major financial institutions this week, including BlackRock, warning them to abandon environmental, social, and governance (ESG) practices if they wish to continue doing business with their states. Notably, Pennsylvania’s Treasurer, Stacy Garrity, was one of the signatories on the letter. West Virginia’s Treasurer, Larry Pack, signed, too. Unfortunately, Ohio’s Treasurer, Robert Sprague (a Republican), was NOT one of the signatories. Curious. 
In January 2023, Ohio House Bill (HB) 507 became law with the signature of Gov. Mike DeWine (see 
Last week, the Baker Hughes U.S. rig count continued its downward trend, losing two rigs to end at 542 active rigs nationwide. The count has been down 12 of the last 13 weeks, with the only slight increase happening two weeks ago. However, there was good news in our region. The Marcellus/Utica count increased by one to a combined 36 active rigs. The reason for the bump up was that Pennsylvania added a Marcellus rig last week. PA now runs 18 active rigs. OH remains at 11 rigs. And WV remains at 7 rigs. 
For the week of July 14 – 20, the number of permits issued to drill new wells in the Marcellus/Utica decreased from the previous week. There were 17 new permits issued across the three M-U states last week, four fewer than the 21 issued two weeks ago. The Keystone State (PA) issued just four new permits. All were single permits. Range Resources received its permit for a well in Allegheny County. EQT got a permit for a well in Greene County. Infinity Natural Resources’ (INR) permit was in Indiana County. And Expand Energy’s permit was in Wyoming County. 
We spotted a fascinating Hart Energy article that summarizes information from a recently released Mizuho Securities study. Mizuho researcher Nitin Kumar says that we are roughly halfway through the shale revolution. He posits that approximately 290,000 horizontal wells have been landed in shale rock in the Lower 48 and that under current economic conditions and with current technology, another 270,000 locations remain. It will take another 25 years to drill them, says Kumar. Which is interesting, although we take some issue with those findings. However, embedded in the statistics is something that caught our attention: the value of undeveloped acreage in various shale plays, including the Marcellus. 
Talen Energy, a leading energy producer in the U.S., which owns and operates approximately 10.7 gigawatts (GW) of power infrastructure, has announced the acquisition of two gas-fired power plants: one located near Wilkes-Barre in northeastern Pennsylvania, and the other in Guernsey County, in eastern Ohio, for $3.8 billion. The PA plant is fed by Marcellus molecules, and the OH plant is fed by Utica molecules. We have followed both projects from inception through commissioning and operation. 
The media fuss is hard to miss about today’s Pennsylvania Energy and Innovation Summit being held at Carnegie Mellon University in Pittsburgh. PA Senator Dave McCormick organized the event. Among the attendees will be President Trump, several cabinet secretaries, and other White House officials. Much of the buzz is around $90 billion in AI and energy investments expected to be announced. In preparation for the big event, a roundtable was held yesterday at CNX headquarters in Washington County, PA, to discuss clearing away permitting obstacles and red tape to help PA realize some (if not most) of that $90 billion in investments. 
The Baker Hughes U.S. rig count has been hemorrhaging for 11 consecutive weeks. Last week, the U.S. rig count declined by another two rigs to its lowest level since October 2021, ending the week at 537 active rigs. You have to go back to the dark days of the pandemic, July 2020, for the previous 11+ consecutive weeks of decline in the rig count. The Marcellus/Utica stayed even (after falling by one two weeks ago) at a combined 35 active rigs. There were 23 rigs targeting the Marcellus and 12 rigs targeting the Utica last week.