NatGas Demand in Powergen Grows, but Falls in Other Sectors
As you may have noticed, a number of our posts today are stories about gas-fired power plants, which are vitally important (very big) customers for shale gas. According to an analysis by Reuters, natural gas use by power generators has expanded by around 3.5% a year over the past three years and is by far the largest single source of gas used in the U.S. However, natural gas consumption by the other major sectors, including industry, households, and commercial, is falling each year. The fall in usage by industry, etc., is more than the growth in powergen.
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MARCELLUS/UTICA REGION: Governor Josh Shapiro “ain’t got sh*t done”; PA Utility regulators file complaint against natgas utility in fatal 2021 blast; NATIONAL: Natural gas continues to look at $2; Oil falls to 7-week low in on demand fears; Legal challenges to the SEC’s climate-related disclosures rule; Senate’s energy permitting reform gains broad industry support.
Last week, CNX Resources issued its second quarter 2024 update. The company lost $18.3 million in 2Q24, compared with making a profit of $475 million in 2Q23. This is quite a whack due to the low price of natural gas. Production was 134.0 Bcfe (billion cubic feet equivalent) in 2Q24 — which works out to 1.47 Bcfe/d — down from 134.2 Bcfe last year (statistically the same). On the bright side, management was excited about the early results of two deep Utica gas wells that were brought online last quarter.
The Virginia Department of Environmental Quality (DEQ) slapped the Mountain Valley Pipeline (MVP) project (which is now online) with a fine of $30,500 for violations of erosion and sediment control rules that happened during the second quarter. It is the fourth consecutive quarter in which MVP was fined by the DEQ for violations. In total, MVP has been fined nearly $100,000 by the DEQ over the past one year. Which is pretty much a nothingburger.
The Algonquin Gas Transmission pipeline (owned by Enbridge) transports up to 3.09 Bcf/d through 1,131 miles of pipeline. Algonquin connects to Texas Eastern Transmission (TETCO), Millennium Pipeline, and Maritimes & Northeast Pipeline and supplies New England with critically needed natural gas supplies for power generation and consumer use. Much of the gas flowing through it comes from the Marcellus/Utica. Algonquin needs to install a backup “meter and regulator” station in Lincoln, Mass., to keep the gas flowing in the region. The city of Cambridge owns a piece of land that it uses as a “buffer” for the city-owned reservoir in the area. Algonquin needs to cut some of the trees on that land in order to get its equipment through for the meter and regulator station, which will be constructed on land owned by Algonquin. Enter several nutjobs who are trying to block work at the site.
Hope Gas, West Virginia’s largest natural gas utility company, and Quantum Pleasants, which is working on a plan in Pleasants County, WV, to use natural gas to produce hydrogen for electricity generation at what is currently a coal-burning plant, are squabbling before the state Public Service Commission (PSC) over whether or not Quantum Pleasants has the right to buy its natural gas from a different vendor (with a different pipeline).
We need a scorecard to keep track of all the ups and downs at the problem-plagued Freeport LNG export facility. We don’t think it’s a stretch to say the plant, which is the second largest LNG export plant in the U.S., has been down as much as it has been up over the past two years of its short existence. Just last Thursday, Reuters reported full operations at the plant (all three “trains”) would not be fully online again until “early August” following Hurricane Beryl visiting the area (see 
The U.S. national oil and gas rig regained more of its lost ground last week by adding three more rigs back to active status. The national combined Baker Hughes oil and gas rig count now stands at 589 rigs. The Marcellus/Utica remained even last week. Pennsylvania continued to operate 21 rigs. Ohio operated 11 active rigs (after adding a rig two weeks ago). West Virginia remained the same with five active rigs. The M-U’s primary competitor, the Haynesville, remained static with 36 active rigs — one less than the M-U’s 37 rigs.
For the week of July 15 – 21, a total of 14 permits were issued to drill new shale wells in Marcellus/Utica. Pennsylvania issued six new permits, split two each for INR, Chesapeake Energy, and Olympus Energy. Ohio issued eight new permits, all of them to Encino Energy split between two counties. West Virginia issued no new permits last week.
Range Resources Corporation, the very first company to drill a shale well targeting the Marcellus Shale layer in Pennsylvania (in 2004), issued its second quarter 2024 update earlier this week. Range continues to hold its production relatively flat. During 2Q, Range produced 2.15 Bcfe/d (billion cubic feet equivalent per day), with approximately 69% of production comprised of natural gas and the rest in NGLs and oil. Range’s 2Q24 production is up 3% from 2Q23, but essentially flat from 1Q24 (2.14 Bcfe/d). Steady as she goes. Net income was $28.7 million, down 5% from the same quarter last year.
Yeah, well, that didn’t take long. Earlier this week, Pennsylvania Josh Shapiro (left-wing Democrat) held a rally with Biden’s EPA chief Michael Regan in Pittsburgh to tout a big old pot of money, $396 million, coming from the feds to PA to essentially buy votes (see 
The Bidenistas at the EPA attacked coal and gas-fired power plants in April, threatening to destabilize the existing electric power grid with new regulations (see