EIA May Drilling Report: Noticeable Drop in Growth of New Production
The recent news stories we’ve read (and reported) announcing a pullback in natural gas production are borne out by the latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR). The May report, issued yesterday (below), shows a slowdown in the growth of natural gas production. This is subtle, but don’t miss it. That does not mean we will produce less gas from shale in the coming month; it means the rate of growth of new (all-time high) supplies is slowing. And at some point, we do expect to see negative growth–shrinking production.
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Yesterday the commodity price of the Henry Hub natural gas benchmark (the NYMEX front-month futures price) popped by 5%, rising 11 cents to close at $2.38/MMBtu. (Unfortunately, the price widget along the right side of the MDN website has not been updated. It still shows Friday’s closing numbers, even though it uses yesterday’s date.) We follow the price of gas regularly because (a) it affects how much in royalties landowners receive, and (b) it affects how profitable it is to drill, a good indicator of whether drilling will pick up or slow down. As we said yesterday, experts are predicting we’ve hit bottom, and the price of natgas will now begin to rise (see 
Three New York City pension funds–the New York City Employees’ Retirement System, the Teachers’ Retirement System, and the Board of Education Retirement System–were sued this week by municipal employees for breaching their fiduciary duty and divesting from fossil energy companies. The plaintiffs allege the divestments have resulted in the loss of billions of dollars that otherwise would have gone to retirees. The pension funds went woke and decided they could no longer support companies that (in their wrong opinion) are creating catastrophic, man-made global warming.
The Dept. of Energy (DOE) grants permission for LNG export facilities to ship LNG to non-free trade agreement countries. It can take years to sign up enough customers (via contracts) and investors to make a “final investment decision” (or FID) to move forward with a project that often approaches $20 billion. LNG builders need to know once the plant is built, it can actually ship to other countries. But the DOE grants its permission to export with a string attached: The plant must get built and begin shipping within seven years–or the permit expires. Until April, LNG builders would routinely ask for an extension to the seven-year period. In April, the DOE changed its policy and declined to extend a permit for Energy Transfer’s Lake Charles LNG project beyond seven years (see 
Inflation is a measure of the rate of rising prices of goods and services in an economy. Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product. But inflation can also be caused by the government printing and spending too much money. We refer to the current high inflation in our country as Bidenflation–caused by the Biden White House and colluding Democrats in Congress–because they passed massive, reckless spending bills. Much of that spending is being paid for by simply printing new money. When you have more money chasing the same amount of goods and services, prices go up. Inflation.
MARCELLUS/UTICA REGION: Gulfport Energy stock hits new 1-year high at $98.72; NATIONAL: The investment boom in ‘renewable natural gas’ is sparking debate; INTERNATIONAL: Europe gas extends drop with record amounts of LNG idling at sea.
The news lit up Friday afternoon with the latest rig count by Baker Hughes Co. (BKR). We always caution that weekly rig counts are not a reliable way to gauge drilling activity as the count floats up and down each week. However, on Friday, the bottom kind of dropped out of the natural gas rig count. BKR said the gas-focused rig count dropped by 16 to 141 for the week, which amounts to a 10% drop in a single week. That *does* get your attention. The general consensus seems to be that low, low prices (bumping around near $2/MMBtu) have finally taken their toll, and drillers are pulling back on drilling new wells. How many rigs were lost in the Marcellus and Utica last week?
John Love, who used to manage the United States Natural Gas Fund (the country’s biggest natural gas ETF), said in an interview with CNBC last week he believes the commodity price of natural gas has already hit bottom and will rise from here. Love says drillers are focused on the future–and the future is LNG exports. Love’s sentiments about the price bottoming out were echoed by a second expert, Teucrium Trading CEO Sal Gilbertie.
Earlier this month, U.S. Senator Joe Manchin (liberal Democrat from West Virginia) introduced a permitting reform bill (for the third time) to save the Mountain Valley Pipeline (MVP) from the clutches of colluding leftists who sit on the U.S. Court of Appeals for the Fourth Circuit (see 
The PA Environment Digest Blog has been reviewing the reports filed by Dept. of Environmental Protection (DEP) workers again and noticed a situation at a well pad in Delmar Township, Tioga County. According to DEP reports filed, a Notice of Violation (NOV) was issued to Seneca Resources for a well pad located on DCNR State Forest land last September. Surface water samples from puddles indicate wastewater (brine) from one or more wells spilled onto the ground.
The haughty John Kerry recently granted the official media house organ for the Democrat Party, the Associated Press, an interview. During the interview, Lord Kerry said oil and gas producers keep saying there are technological breakthroughs that will allow the world to continue extracting and burning fossil fuels without toasting Mom Earth. He said, in so many words, it’s either time to put up or shut up. Kerry “doubts” that existing technology is up to the task of abating greenhouse gases released by burning fossil fuels. Meanwhile, Kerry travels around the globe on a private jet that belches out more greenhouse gases than any random 100 citizens of planet earth. It must be nice to be married to a billionaire (Teresa Heinz Kerry).
Yesterday the Bidenistas at the Environmental Protection Agency (EPA) released a hellscape of new regulations aimed at forcing coal- and natural gas-fired power plants to close. That’s the sum total of what’s contained in a proposed 681-page behemoth new rule released (inflicted) yesterday by the EPA. But that’s not just MDN’s wild claim about this hellscape being created by Biden. The editors of the Wall Street Journal called the new EPA regulations “An EPA Death Sentence for Fossil-Fuel Power Plants,” with the subtitle “The Biden agency’s new rule means the end of natural gas-fueled electricity.”
Yesterday two radicalized Big Green groups–the Environmental Integrity Project (based in D.C.) and the Clean Air Council (based in Philadelphia)–filed a lawsuit against the Shell Polymers Monaca Plant (ethane cracker plant in Beaver County, PA), claiming the plant has repeatedly violated federal air pollution limits. The lawsuit requests the court assess huge fines and force it close down unless it can operate without any further violations of the federal Clean Air Act (CAA) and the federal Air Pollution Control Act (APCA). In other words, the radicals seek to shut down the $10 billion plant and keep it shut down–throwing 600 permanent employees out of work. Nice people at the Environmental Integrity Project and Clean Air Council, eh?