Southwestern Spends More on Haynesville, but M-U Produces More
Southwestern Energy used to be a pure-play Marcellus/Utica driller until it picked up leases and wells in the Louisiana Haynesville play in 2021. Last Friday, the company issued its fourth quarter and full-year 2022 update. The update shows Southwestern now gives more love (i.e., money) to Haynesville drilling than it does to Marcellus/Utica drilling, even though the M-U produces more gas than the company’s Haynesville assets.
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Isn’t it typical for Democrats to try and use a crisis that has nothing whatsoever to do with shale and natural gas to block shale and natural gas? Seven members of Pennsylvania’s Congressional delegation, every single one of them a Democrat, sent a letter (copy below) to another Democrat, Secretary of Transportation Pete Buttigieg (an incompetent nincompoop), asking him to permanently delete a rule adopted during the Trump administration that allows LNG to be safely transported by special rail cars. The reason cited for banning LNG by rail? The train derailment in East Palestine, Ohio–an event that has nothing whatsoever to do with shale energy.
The Sabine Pass LNG terminal, owned and operated by Cheniere Energy, is spread over an 853-acre site in Cameron Parish, Louisiana. The facility is the largest receiving and regasifying terminal in the world with a total send-out capacity of 4 Bcf/d (billion cubic feet per day) and a storage capacity of 16.8 Bcf. The “nameplate” capacity of the facility with six trains operating is roughly 30 mtpa (million tons per annum). Last Thursday, Cheniere announced it has pre-filed to expand its Sabine Pass operation significantly, by another 66% to around 50 mtpa. This is good news for the Marcellus/Utica.
U.S. Senator Ted Cruz (R-Texas), the Ranking Member of the Senate Committee on Commerce, Science, and Transportation, along with Sens. Shelley Moore Capito (R-W.Va.), Kevin Cramer (R-N.D.), and John Kennedy (R-La.), reintroduced the Natural Gas Export Expansion Act, which would expedite the federal approval process for exporting liquefied natural gas (LNG) and increase free trade, particularly as European countries are looking for new sources of clean, reliable energy.
Robert Bryce is a Texas-based author, journalist, film producer, and public speaker. Over the past three decades, his articles have appeared in numerous publications, including the Wall Street Journal, New York Times, National Review, Field & Stream, and Austin Chronicle. Bryce recently published an article on his own Substack website that exposes the $4.5 billion-per-year NGO-corporate-industrial-climate complex. You think Big Green groups like the Sierra Club, Environmental Defense Fund, and National Resources Defense Council are virtuous defenders of the environment? Think again. They’re in it for the money. Follow the money.
A University of Alberta (Canada) mechanical engineer and his team published a study last month in the journal Renewable and Sustainable Energy Reviews on the greenhouse gas reduction potential of blending natural gas with hydrogen in Alberta, Canada (full copy below). Albertans can replace 15-20% of the natural gas in their pipes and furnaces with hydrogen using current technology and current pipeline infrastructure. The team found that a 15% hydrogen/methane blend would cut–at most–5% off of Alberta’s carbon footprint by 2050. A nothingburger. But here’s the kicker: Blending hydrogen with methane results in higher average energy prices. Higher prices, no environmental advantages. Tell us again why we want to blend explosive hydrogen with methane in our pipelines?
NATIONAL: Turns out they ARE coming for your gas stoves; The race to debottleneck U.S. LNG feedgas routes; Your friendly reminder that pipelines are safer than rail; U.S. drillers cut the most oil and gas rigs in a month since June 2020; Combatting Russian tyranny with U.S. LNG; INTERNATIONAL: China Gas Holdings signs two 20-year LNG supply deals with Venture Global.
Coterra Energy, the new name for the former Cabot Oil & Gas that merged with oil driller Cimarex Energy, issued its fourth quarter and full-year 2022 update yesterday. Coterra’s natgas program is focused on drilling in Susquehanna County in northeastern Pennsylvania. A couple of things stood out for us from the update. First, Coterra’s Marcellus production dropped in 2022. During 4Q21, Coterra produced an average of 2.5 Bcf/d (billion cubic feet per day) of natural gas in the Marcellus, versus producing 2.1 Bcf/d in 4Q22–down 14%. For the full year, Coterra produced an average of 2.3 Bcf/d in 2021 and 2.2 Bcf/d in 2022–down 6%.
On February 15, 2023, the Supreme Court of Pennsylvania agreed to hear the case Dressler Family, LP v. PennEnergy Resources, LLC, a case addressing the question of whether Pennsylvania is an “at-the-well” jurisdiction, or a “first-marketable product” jurisdiction. The case may have profound implications for Pennsylvania landowners and drillers. The issue in this case revolves around whether or not a driller is allowed to deduct expenses from royalty payments for transporting and cleaning up natural gas between the well and the point of sale. Can a driller claim post-production deductions even if there are clauses that prohibit them?
We have a second article today dealing with post-production deductions in Pennsylvania oil and gas leases. Although this is an “in the weeds” legal article, it’s worth your time and attention (if you are a PA landowner or driller) to read it and understand it. The lawyers at Houston Harbaugh, P.C. have discovered an ingenious way of exposing “net back pricing” and claiming post-production deductions under market enhancement royalty clauses as being hypocritical–by using a clause found in some leases that allows “free gas.”
The West Virginia State Legislature passed House Bill (HB) 2581 on the last day of the annual WV legislative session in April 2021. HB 2581 required the State Tax Commissioner to develop a revised methodology to value oil and natural gas properties for the purpose of assessing property taxes. The State Tax Department submitted an emergency rule in the summer of 2021 that was, quite frankly, a mess. In March 2022, the legislature passed, and Gov. Jim Justice signed into law, House Bill (HB) 4336, aimed at fixing the mess (see 
In April 2019, President Trump signed an Executive Order (EO) instructing the Environmental Protection Agency to review Section 401 of the Clean Water Act–the section that grants states (and tribes) the right to have a say in pipeline projects (see 
New shale permits issued for Feb. 13-19 in the Marcellus/Utica remained elevated last week. There were 35 new permits issued in total last week (down slightly from 40 the week before), including 27 new permits for Pennsylvania, three new permits for Ohio, and five permits issued in West Virginia. Last week the top receiver of new permits was Coterra Energy, with 13 new permits for Susquehanna County, PA. The number two permittee was Apex Energy with five permits in Westmoreland County, PA.