Bidenistas Attack Your Gas Furnace with New DOE Regulations
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…
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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.
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.
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?
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 
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.
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.
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.
Natural gas development is fundamental to the health and strength of Pennsylvania’s economy, supporting well over 100,000 family-sustaining careers, boosting state tax revenues, and generating billions in economic benefits, according to a new economic impact analysis (full copy below) commissioned by the Marcellus Shale Coalition (MSC). The analysis, released at the kickoff of the 
The Enbridge Gas Dawn Parkway System is one of the most robust pipeline systems in North America and provides for the movement of natural gas from Enbridge Gas’s Dawn Hub located near Sarnia, Ontario, to the Greater Toronto Area, where it interconnects with other downstream pipelines serving eastern Canadian and northeast U.S. markets. Marcellus/Utica molecules help feed the Dawn Hub via the Rover and NEXUS pipelines. Enbridge Gas is holding a new capacity open season for an extra 300 MMcf/d (million cubic feet per day) of natural gas along the Dawn Parkway System. Let’s move more M-U molecules!
In November 2021, the U.S. Senate confirmed regulatory lawyer Willie Phillips to serve as a commissioner on the Federal Energy Regulatory Commission (FERC), replacing Neil Chatterjee (see 
For traders who buy and sell NYMEX Henry Hub futures (and there is a fair number who read MDN), listen up! CME Group, which operates the Chicago Mercantile Exchange and New York Mercantile Exchange (NYMEX), announced it is launching Micro Henry Hub futures and options beginning November 6. The standard Henry Hub natural gas futures contract for a single contract trades 10,000 MMBtu of natural gas, equivalent to 10 million cubic feet (MMcf). The new Micro Henry Hub contract is one-tenth that size — 1,000 MMBtu, equivalent to 1 MMcf. The other major difference is that the standard Henry Hub contract costs $10 to execute, whereas the new Micro contract will cost just $1.
According to the International Gas Union’s (IGU) 2023 Global Wholesale Gas Price Survey report (full copy below), 2022 was THE most turbulent year in the history of gas markets, as the global energy crisis intensified and the global price levels reached record highs. Last year saw record price levels, with Europe’s wholesale prices reaching over $30 per MMBtu. The average world price for natural gas reached $9.44 per MMBtu in 2022 — the highest ever — compared to a record low of $3.23 per MMBtu in 2020. Record high prices last year were seen in all regions apart from North America and the Former Soviet Union.