NATIONAL: Biden’s ‘war against oil’ is pushing prices up, US shale execs say; The dangerous delusion of a global transition to “just electricity”; INTERNATIONAL: Big Oil CEOs defend themselves against climate criticism.
Read More “Other Stories of Interest: Tue, Oct 3, 2023”
Newly-elected Pennsylvania Gov. Josh Shapiro appointed a working group in April to help guide him on what he should do concerning the Regional Greenhouse Gas Initiative (RGGI) carbon tax and the broader issue of global warming (see PA Gov Appoints Secretive Group to Work on Global Warming Plan). The panel was super-secret, with only a few names for some of the participants leaking to the press (see New Details Revealed re Gov. Shapiro’s Secret Global Warming Group). The super-secret group’s work is done, and unsurprisingly, they love the idea of an RGGI-like carbon tax that would destroy gas-fired power plants in the Commonwealth.
Read More “PA Gov Shapiro’s Secret Energy Group Endorses RGGI Carbon Tax”
In March, Chesapeake Energy announced a 15-year deal to provide natural gas for LNG exports to Gunvor Singapore Pte (see Chesapeake Cuts Back on Marcellus, Signs Haynesville LNG Deal). In an interview with S&P Global Commodity Insights at the time, Chesapeake CEO Nick Dell’Osso expressed the view that over the next several years, as much as 20% or 25% of U.S. production will flow to international markets (see Chesapeake CEO Says 20-25% of U.S. Gas Production Will be Exported). Dell’Osso is acting on that belief, attempting to find more deals for the company to export LNG.
Read More “Chesapeake Seeks More LNG Deals, Wants 20% of Production Going Intl”
Two weeks ago, the U.S. rig count erased a couple of weeks of anemic gains by dropping 11 rigs from the total, sinking to 630 active rigs, the lowest count since February of 2022 (see Dead Cat Bounce? U.S. Rig Count Cut 11 @ 630, M-U Stays Even @ 39). The active count in the Marcellus/Utica remained at 39 (for three weeks running) — the lowest count in the M-U this year. Things got worse last week. The national rig count dropped *another* seven rigs, down to 623, and the M-U dropped one more rig (in the PA Marcellus), now down to 38 active rigs.
Read More “Crash Continues – U.S. Rig Count Cuts 7 @ 623, M-U Loses 1 @ 38”
Diversified Energy (formerly Diversified Gas & Oil), with major assets in the Marcellus/Utica region (and other regions, too), owns approximately 8 million acres of leases with 67,000 (mostly) conventional oil and gas wells. The company’s business model is to buy lower-producing wells on the cheap and find ways to make them more productive. For years, we have highlighted Diversified’s “contrarian” business model (see our Diversified stories here). Recently, oil and gas expert David Blackmon (who writes for the Forbes website) interviewed Diversified CEO Rusty Hutson, who had some interesting comments about the Appalachian region.
Read More “Diversified CEO Says Gulf Coast has Brighter Future than Appalachia”
According to consulting powerhouse McKinsey & Co., world demand for LNG is forecast to see robust demand growth through at least 2040, and U.S. shale gas producers can effectively compete to fill a coming supply gap. But only if we can build enough new pipelines and liquefaction plants to meet the demand. And that’s the open question. As we report in a related story today (see Diversified CEO Says Gulf Coast has Brighter Future than Appalachia), it’s easier to build new pipelines in the Gulf Coast than in the Marcellus/Utica region. At the recent America’s Natural Gas Conference, McKinsey Partner Dumitru Dediu commented, “Without new infrastructure, we may see Henry Hub prices increasing and, respectively, other less competitive basins supplying these LNG projects.”
Read More “Shale Can Play Big Role in World LNG – But Not Without New Pipes”
Not content to kill off your natural gas stove, the Bidenistas at the U.S. Dept. of Energy are now coming for your gas furnace. On Friday, the Biden Dept. of Energy (DOE) published a new rule that cracks down on gas furnaces in homes, essentially phasing out many existing models and requiring new ones to meet onerous new standards. The DOE now requires a 95% annual fuel efficiency standard, up from the 80% that was on the books before the new rule was published Friday. New models will be mandatory by 2028–and you’ll pay an average $4,700 for your new gas furnace. But that’s not the only cost…
Read More “Bidenistas Attack Your Gas Furnace with New DOE Regulations”
MARCELLUS/UTICA REGION: Progressive PACs heavily outspend free-market advocates in Pa.; OTHER U.S. REGIONS: Largest EV charging station in world powered by diesel generators; TXOGA analysis finds Texas output hits record highs; NATIONAL: DOE targets key energy challenges with $264MM funding; US power grids must adapt to rapid electrification, operators say; BP’s US boss to leave company weeks after CEO Looney; White House prohibiting official travel to fossil fuel conferences; INTERNATIONAL: French say you should only be able to fly 4 times in your life.
Read More “Other Stories of Interest: Mon, Oct 2, 2023”
In September, production from the Marcellus and Utica shales averaged just under 35.1 Bcf/d — down from a nearly two-year high at 35.3 Bcf/d in August, according to data from S&P Global Commodity Insights. Over the past three years, producers in the Marcellus/Utica have dialed back output in September. Why? Cooling temperatures that lead to falling gas demand which further leads to a crash in gas prices. How bad is the gas price crash? The Eastern Gas South trading hub near Pittsburgh, considered the benchmark for the M-U, saw cash prices trading around $0.80/MMBtu yesterday. Yes, 80 cents! The October gas contract at Eastern Gas South recently settled as low as $0.99/MMBtu. Ouch.
Read More “M-U Production Slides as Regional Cash Prices Sink Below $1/MMBtu”
According to a recent analysis by Enverus Intelligence Research, the cost of supply for North American shale producers is expected to continue rising. The remaining top-tier shale drilling inventory across North America *could be* in shorter supply than previously estimated, says Enverus. Rampant cost inflation from the Bidenistas and declining well productivity across the U.S. shale patch are making drilling wells much more expensive. What about the situation here in the Marcellus/Utica?
Read More “Analysis Shows Utica has Years More of Inventory than Marcellus”
Although it’s not discussed often, the issue of “proved reserves,” which are volumes of oil and natural gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, is a key issue. Have gas drillers, particularly in the Marcellus/Utica, built the inventories of proved reserves to support future production increases to meet demand? The experts of RBN Energy tackle the important issue of replacing reserves in a new post.
Read More “Do M-U Drillers have Enough Proved Reserves for Future Production?”
In an administration full of destructive regulatory actions and legislation targeting fossil energy for extinction, the so-called Inflation Reduction Act (IRA) stands out as one of the worst. The IRA was made possible by a traitorous vote by West Virginia Democrat U.S. Senator Joe Manchin (see Tragedy: Joe Manchin Caves & Agrees to Big Green Build Back Better). Manchin’s vote to destroy fossil energy via the IRA also destroyed his political future. Since Manchin’s IRA vote, he has been a schizophrenic, sometimes sticking up for the IRA, and other times criticizing it. In a recorded video shown at this week’s Shale Insight event in Erie, PA, Manchin went back to promoting the IRA as somehow benefiting fossil energy.
Read More “Joe Manchin Promotes IRA in Recorded Speech to Shale Insight”
Reporters like to portray themselves as truth-tellers who hold the powerful accountable. In reality, many of them are hired guns who publish propaganda under the guise of doing journalism. For example, did you know that the Associated Press takes in millions of dollars from philanthropies — the Hewlett Foundation, Walton Family Foundation, and others — to fund “reporting” (i.e., propaganda) on climate change, such as stories that this summer’s heat wave is due to man-made global warming? The good news is that a growing number of Americans are abandoning legacy media like the AP for better sources of information.
Read More “Trust in Mainstream Media’s Paid-For Climate Reporting Collapsing”
New shale permits issued for Sep 18 – 24 in the Marcellus/Utica were roughly the same as the prior week. There were 21 new permits issued last week, down 1 from permits issued two weeks ago. Last week’s permit tally included 11 new permits in Pennsylvania, 4 new permits in Ohio, and 6 new permits in West Virginia. Three companies tied for top permittee last week: PennEnergy Resources with 5 permits in Butler County, PA; CNX Resources with 5 permits in Washington County, PA; and Southwestern Energy with 5 permits spread between Wetzel and Ohio counties in WV.
Read More “21 New Shale Well Permits Issued for PA-OH-WV Sep 18 – 24”
MARCELLUS/UTICA REGION: Why West Virginia really turned on Manchin; OTHER U.S. REGIONS: Where does DeSantis stand on the issue of fracking in Florida?; Cummins tests new natural gas engine in California; Jackson Hole’s EV buses poster child for energy transition failure; NATIONAL: Oil is near $100 and shale isn’t coming to the rescue; US natural gas: Hot weather helped, but winter a wildcard; INTERNATIONAL: Aramco to buy $500MM stake in MidOcean, eyeing global LNG; Japan LNG stocks drop to lowest since end-Jan 2021.
Read More “Other Stories of Interest: Fri, Sep 29, 2023”
According to an analysis by S&P Global Commodity Insights, large U.S. shale gas drillers (namely Marcellus/Utica drillers) have hedged (pre-sold at a specific price) an average of 50% of anticipated shale gas production for the second half of 2023. The average price of the hedges is $3.35/Mcf, far above the average NYMEX Henry Hub price that has been bumping along between $2.25 and $2.75. CNX Resources is the top hedger, hedging 80% of its production in 2H23 at $3.04/Mcf.
Read More “Major U.S. Shale Drillers Hedged 2H23 Gas Production Avg. $3.35”