Halliburton, Baker Hughes See Shale Slowdown Coming This Year
Two of the world’s largest three oilfield services (OFS) companies, Halliburton and Baker Hughes, provided updates this week for their second-quarter performance and operations. Both companies said essentially the same thing. Drilling is slowing down in U.S. shale, but offshore drilling in other parts of the world is still going strong and makes up for the slowdown here at home.
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This story reinforces what we have said FOR YEARS: The radicalized environmental left will NEVER be satisfied that fossil energy is acceptable, no matter what we do to ensure it’s “clean and green.” As we have said so many times before, the environmental left is unreasonable–not able to be reasoned with. Irrational. Haters. We have new evidence for our claims. There are four major certification schemes to ensure natural gas produced in the U.S. is “responsible”–or clean and green. In March, the Bidenistas began to sniff around the certification authorities to grab that authority for themselves. A cabal of some 150 “environmental” (leftist Communist) groups are telling the Bidenistas not to bother. Gas will never be acceptable.
NATIONAL: EIA forecasts crude oil prices will increase through 2024; What does the boom in oil and gas projects mean for energy prices?
In a process that began in December 2021, Olympus Energy (formerly Huntley & Huntley) announced it had contracted with Project Canary to monitor methane emissions from both the company’s drilling operations and the company’s pipeline operations (see 
In April 2022, MDN told you about Nopetro LNG’s plans to construct and operate as many as three liquefaction trains in Port St. Joe, Florida, that will liquefy up to 3.86 billion cubic feet (Bcf) per year of natural gas for export and delivery to markets in the Caribbean, Central America, and South America (see 
Yesterday, U.S. Senator Joe Manchin (D-WV), Chairman of the U.S. Senate Energy and Natural Resources Committee, filed an amicus curiae (friend of the court) brief with the U.S. Supreme Court in support of Mountain Valley Pipeline’s (MVP) emergency application to vacate the stays of the U.S. Court of Appeals for the Fourth Circuit (4th Circuit) that are blocking completion of MVP. The Fiscal Responsibility Act (FRA) of 2023, signed into law on June 3 by President Biden, specifically removes legal jurisdiction for MVP from all courts but the U.S. Court of Appeals for the District of Columbia (D.C. Circuit). Yet the 4th Circuit recently blocked two key permits, by extension blocking all construction of MVP. Last Friday MVP filed an emergency appeal with the Supreme Court (see 
U.S. Senator Joe Manchin is a typical politician. That is, he lies. His latest whopper concerns a measure he advanced to “prohibit” the Biden administration from “banning gas stoves,” which he touted in a recent video. However, just two years ago, Manchin opposed an amendment from Wyoming Republican senator John Barrasso that prohibited federal funds from being used to ban natural gas in new construction, saying the measure wasn’t necessary and that such bans would never happen. Joe-then and Joe-now appear to be two different people. Funny how Joe gets more “conservative” the closer he gets to an election year.
PJM is the largest electric grid operator in the U.S. It serves 65 million people in 13 states plus the District of Columbia (including PA, OH, and WV). PJM came under withering criticism for an almost blackout during the Christmas cold snap last Dec. 23-25. If not for certain gas-fired peaker plants, like that in the Little Town of Bethlehem, the lights would have gone out during a brutal cold snap (see 
As we point out in another story today about Olympus Energy selling its “responsible gas” via a deal with Tenaska, what the left means by ESG (Environment, Social, Governance) and what the shale industry means by ESG, are two different things. When companies like BlackRock talk about forcing the companies they invest in to toe the line with respect to ESG, it means forcing those companies to divest from fossil energy. Republicans in the U.S. House of Representatives are pushing back hard against investor ESG nonsense because it threatens the retirement funds of this country’s massive middle class.
Yesterday, Japan’s JERA Co. Inc. and Korea Gas Corp. (KOGAS) announced a new initiative called the Coalition for LNG Emission Abatement toward Net-zero (“CLEAN”). The private-public initiative has the support of the governments of Japan, South Korea, Australia, the U.S., and Europe, whose representatives signed a framework agreement for creating a mechanism to monitor methane emissions. “To support the Coalition, Japan and the European Commission expressed their vision to create a globally aligned methane emission assessment of LNG projects and to incentivize methane mitigation by LNG producers by facilitating the information collection process of methane leakage counter measures and methane reduction targets,” a joint statement by the allies said.
The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for July issued yesterday (below) shows the EIA believes shale gas production across the seven major plays tracked in the monthly DPR for August will *decrease* production from the prior month of July. This is the first month-over-month decrease prediction for the combined seven plays since December. EIA says combined natgas production will slide by 100 MMcf/d (million cubic feet per day). The Marcellus/Utica, called “Appalachia” in the report, is predicted to slump by 16 MMcf/d in August from July.
Last summer, MDN brought you the news about a lawsuit against Diversified Energy and EQT over the issue of old and “abandoned” wells in West Virginia (see 
Even with much of the nation in an extreme heat event making record demands on gas-fired power plants, demand for natural gas appears to be nominal at best, and consequently, the price of natural gas, at least the Henry Hub NYMEX futures price, remains mired in the mid-$2 range. The NYMEX price was down again yesterday, closing at $2.51/MMBtu. That’s the fourth day in a row the price has decreased, hitting the lowest closing price in almost a month–since June 20th.
One of the factors in the price of natural gas is supply. Gas is about as pure a commodity market as you will find worldwide. Higher demand with the same or less supply will drive prices higher. And the reverse is true. Higher supplies with the same or less demand lead to lower prices. Last summer, the world was still coming to terms with the unprovoked invasion of Ukraine by Russia. Europe and many countries worldwide pledged to stop buying Russian natural gas, putting an extreme demand on other sources for gas, including here in the U.S. The situation led to a deficit in available natgas and lower storage. This summer the situation is far different.