WoodMac Report: 5 Reasons to be Cheerful for Fossil Energy
It’s been a tough year for many people–for just about every human on planet earth. Russia’s illegal invasion of Ukraine and the fallout with Europe cutting back on purchases of Russian oil and natural gas have rippled across the planet, causing high energy prices and a recession. Energy consulting firm Wood Mackenzie (WoodMac) has put together analysis in a new report that looks for the proverbial silver lining in all the bad news. WoodMac has appropriately named this report, “The Silver Linings Playbook.” In it (full copy below), WoodMac lists five key developments that, despite the setbacks of the past year, are “laying the foundations for the delivery of more reliable, affordable and sustainable energy.” Interestingly, all five of the developments deal with using more fossil energy.
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Last week (Nov. 28-Dec. 4), the number of permits issued to drill new shale wells rose slightly to 21 from the prior week’s 17. The big surprise is why. Pennsylvania only handed out five new permits. Ohio issued even fewer–just three. It was West Virginia with 12 new permits that saved the day.
MARCELLUS/UTICA REGION: Dimock signals death of journalism as the Inquirer sells out; NATIONAL: For energy, America’s best foreign policy is a good domestic policy; INTERNATIONAL: CNH Industrial debuts world’s first LNG tractor prototype; Europe’s energy outlook imperiled by policy myopia.
Well, that didn’t take long! Yesterday MDN told you that the Attorney Generals from 13 states had recently filed a protest with the Federal Energy Regulatory Commission (FERC) seeking to block Vanguard, a MAJOR investor (with $7.2 trillion of assets under management), from buying stocks in electric utility companies. Why? Because Vanguard is (among other things) a member of the radicalized Net Zero Asset Managers group–a group whose mission is to force companies to abandon the use of fossil energy. And just like that, Vanguard quit its membership in the Net Zero nutters group. It seems Vanguard values profits over pretentious virtue signaling, after all.
Gas-focused drillers in the U.S. tracked by RBN Energy (most of them with major operations in the Marcellus/Utica region) had a stellar third quarter financially. The group of 11 publicly-traded drillers that RBN tracks tripled their earnings on average, and cash flows were up 150% over the same quarter last year. EQT Corp., now helmed by Toby Rice, was the most profitable company on the list, earning $2.6 billion in Q3 while generating $3.1 billion in cash flow. What about the others?
Once a month, the analysts at the U.S. Energy Information Administration (EIA) issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months or so. We sometimes poke some good-natured fun at the EIA because one month their predictions go up, the next month down, etc. What about the latest STEO, published on Tuesday? EIA predicts average natural gas production will be just above 100 Bcf/d in 2023 (after predicting last month it would average below 100 Bcf/d). As for the commodity price of gas, EIA says the Henry Hub spot price will average right around $6/MMBtu in 1Q23.
From time to time, we bring you news about hydrogen (H2) because, for many, H2 is the next “big thing” in energy. Many on the left are dazzled by H2 energy, although some of the more extreme elements of the left oppose H2 energy because most H2 is produced by cracking methane (see 
Perhaps like us, you didn’t pay much attention to the Georgia Senate runoff race. Since the Democrats already have cackling Kamala if they need her, the Dems control the Senate by default 50-50 (Kamala used to break ties). So whether Raphael Warnock (the leftist kook Democrat) won, which he did, or Herschel Walker (former football star and Republican) won, it didn’t really matter, right? Wrong. Just that one extra vote, 51-49, has given much more power to the Democrat anti-fossil fuelers that run the Senate (i.e. Chuck Schumer), than we could have imagined. For example: Warnock’s win all but ensures Dick Glick will get reappointed to FERC early next year–a profoundly sad outcome.
Accenture plc is an Irish-American professional services company based in Dublin, specializing in information technology services and consulting. Earlier this morning, Accenture published a report titled, “The Reinvention Reset — From Bold Plans to Pragmatic Actions” (full copy below). The report is based on Accenture’s own industry research and a global survey of more than 200 oil and gas executives that focuses on the efforts of O&G companies to “reinvent” themselves. Accenture is a Fortune Global 500 company with revenues of $61.6 billion in 2022 and a workforce of 721,000 people, so you should pay attention to what they say about the O&G space.
Once again, a permitting reform bill floated by U.S. Senator Joe Manchin (from West Virginia) with a provision to complete the 94% completed 303-mile Mountain Valley Pipeline (MVP) has flamed out. Manchin made a deal with the devil–his own Democrat Party–to vote for the misnamed and terrible Inflation Reduction Act (a warmed-over version of the Green New Deal) in return for HIS party’s support to pass a so-called permitting reform bill that would, among other things, allow MVP to finish up without court interference (see 
How new laws get proposed and passed is fascinating, isn’t it? Especially when the forces of good (conservatives) use the same tactics as the forces of evil (leftists) against them. The Ohio Senate may vote as soon as today on House Bill (HB) 507, which would expand natural gas drilling in state parks. HB 507 began life as a bill to “revise the number of poultry chicks that may be sold in lots.” The bill ostensibly addresses poultry sales and food safety. Yet somewhere along the way (in the dark of night), the bill was amended with another bill that “forces” state agencies to lease public lands for oil and gas drilling.
A lawsuit brought by two West Virginia landowners seeking to overturn the state’s newly enacted forced pooling (i.e. unitization) law was put on pause by a federal judge on Dec. 1. The same two landowners had a previous version of the same lawsuit tossed by the judge back in September (see 
There are advantages and disadvantages to being publicly or privately owned. In the oil and gas sector, most large companies are publicly owned–meaning they have a board of directors, and the “owners” hold shares of stock in the company, shares traded on public exchanges. In the Marcellus/Utica, most of the top drillers are publicly owned: Range Resources, Coterra Energy, CNX Resources, EQT Corporation, Antero Resources, Southwestern Energy, Repsol, National Fuel Gas Company (i.e. Seneca Resources), and Gulfport Energy. Several others are privately owned, including Ascent Resources (Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S.), Greylock Energy (based in West Virginia), and Olympus Energy (which drills in the Pittsburgh suburbs).
Data from the Bureau of Labor Statistics (BLS) shows that employment in the U.S. oilfield services (OFS) and equipment sector rose by an estimated 2,346 jobs to 645,486 in November. The November increases make OFS employment the highest since numbers started to drop in March 2020. We still haven’t fully recovered to the all-time pre-covid high of 706,528 reached in February 2020–but we’re working in the right direction. This is very good news.