Morgan Stanley Predicts Gas Market Oversupply Next Few Years
Natural gas is, as we have often pointed out, one of the purest commodity markets in existence. The classic supply/demand curve is at work. If there’s more supply than demand, prices for gas move down. And conversely, if there’s more demand than supply, prices move higher. We have been stuck in a sucky price pattern this year, not helped by a very moderate winter. The phrase on the lips of every landowner and driller is, When will the price move higher? According to analysts from Morgan Stanley, not anytime soon.
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OTHER U.S. REGIONS: Gas mogul Charif Souki owes lenders $100 million, judge says; NATIONAL: Federal court strikes down Biden’s climate rule for states; EOG Resources announces president Billy Helms’ retirement; Big Oil is beating Big Tech as eyes turn to crucial OPEC meeting; US to shell out $4B in first round of advanced energy tax credit; U.S. petroleum product exports set another record high in 2023; INTERNATIONAL: Oil climbs to $85 on OPEC cuts and geopolitical risks; New west-east route keeps Europe hooked on Russian gas; Moldova to buy US-origin LNG from Greece for consumers; Greta Thunberg is the poster girl for the ignorance of elites.
You have to hand it to the left. They never give up on their mission to destroy this country. Big Green groups using (abusing) six uppity Virginia landowners who didn’t want the 303-mile Mountain Valley Pipeline to cross their well-groomed horse pastures have appealed a lawsuit recently dismissed by a federal court to the U.S. Supreme Court one last time. That is, if the Supremes decide to consider it again. It’s an open question if the Supremes will accept the case back.
The Ohio Oil & Gas Association (OOGA) held its annual meeting in March at the Hilton in Columbus, OH. While MDN was not there, an industry friend sent along a copy of the slide deck used by the Ohio Dept. of Natural Resources (ODNR) Division of Oil & Gas Resources Management. The ODNR’s “regulatory update” addressed a number of interesting issues, including the state’s ongoing application for “primacy” in permitting carbon dioxide injection wells, permitting and unitization (forced pooling), updates on rule changes for drilling and fracking, and several “top 5” lists for natural gas and oil producers in the Utica Shale.
Pennsylvania Gov. Josh Shapiro traveled to Scranton, PA, in mid-March to announce a proposal to “immediately pull Pennsylvania out of a multi-state carbon cap-and-trade program” (the so-called Regional Greenhouse Gas Initiative, or RGGI) and instead enroll PA in its very own RGGI-like carbon tax program (see 
We continue to be impressed with Shell’s still relatively new CEO, Wael Sawan, who took over the CEO role last June. At an investor meeting last June, Sawan unveiled a new strategic direction for the company — back to more drilling for oil and gas and less dithering with renewables (see 
Back on Jan. 3, we brought you the news (from Reuters) that the U.S. became the #1 exporter of LNG in the world in 2023 (see 
It doesn’t happen often, but every once in a while, academic researchers do real, actual, in-the-field research, as opposed to running computer simulations. Such an act of real research was just published in the journal Science last Thursday. A research group led by Carbon Mapper, with researchers from NASA Jet Propulsion Laboratory, Arizona State University, University of Arizona, Scientific Aviation, and the Environmental Protection Agency used advanced aircraft to conduct the largest direct measurement-based survey of active municipal solid waste landfills to date from 2018 through 2022, looking for fugitive methane emissions. They found that 52% of surveyed landfills had “observable point source emissions” (i.e, they are super-emitters), as compared with a 0.2% to 1% detection rate observed for super-emitters from surveyed oil and gas infrastructure in California and the Permian Basin.
There was a pretty dismal showing for new permits issued to drill in the Marcellus/Utica during the week of Mar. 18 – 24, with a drop of 11 permits from the prior week to just 5 new permits issued. Pennsylvania issued all 5 of the new permits. Ohio and West Virginia both issued no new permits during that week. EQT (Rice Drilling) was issued 2 new permits in Greene County. Blackhill Energy and Chesapeake Energy each received 1 new permit to drill in Bradford County. And Range Resources was issued 1 new permit to drill in Washington County.
National Fuel Gas Company (NFG) and its pipeline subsidiary Empire Pipeline have worked on a plan to build the Northern Access Pipeline since 2016. Northern Access is a 97-mile project from McKean County in Pennsylvania into and through Allegany, Cattaraugus, and Erie counties in New York that will flow Marcellus gas into New York State. The project was repeatedly delayed by the radicals of the Andrew Cuomo (now Kathy Hochul) administrations in NY. NFG still wants to build the project but needs more time. The Federal Energy Regulatory Commission (FERC) gave NFG an extra 35 months to get the project done in a decision in June 2022. The Sierra Club challenged FERC’s time extension. On Friday the U.S. Court of Appeals for the District of Columbia (DC Circuit) rejected the Clubbers and said FERC properly extended the time to build the project.
Oil production in the Ohio Utica hit a record 27.8 million barrels in 2023, up 41% from 2022, according to researchers at the Levin College of Public Affairs and Education at Cleveland State University. In December, eastern Ohio oil wells pumped 93,000 barrels of crude, up one-third from December 2022, according to federal data. Oil has been locked away in the Utica/Point Pleasant shale layer for millennia. Aubrey McClendon, co-founder and former CEO of Chesapeake Energy, was the first to see the vision of freeing oil from the Utica. However, it was a successor company, Encino Energy, that figured out how to coax large quantities of oil out of the Utica shale.
Pennsylvania Gov. Josh Shapiro traveled to Scranton, PA, in mid-March to announce a proposal to “immediately pull Pennsylvania out of a multi-state carbon cap-and-trade program” (the so-called Regional Greenhouse Gas Initiative, or RGGI) and instead enroll PA in its very own RGGI-like carbon tax program (see 
An article appears today in the Pittsburgh Post-Gazette detailing how some people already are (or are planning to) make money from plugging orphaned and abandoned oil and gas wells in Pennsylvania (and elsewhere). It involves the same old cockamamie scam of carbon tax credits. The rough outline is this: Companies measure how much methane is currently leaking from a well. Then they fix it (presumably using government money to at least help pay for plugging), and once it’s fixed, they issue/create a carbon tax credit (or token) that someone else can buy on a public marketplace. Why buy it? So that person or company or entity can keep right on “polluting” — the carbon credit will “offset” their pollution. What a scam!