DTE Energy’s Michigan Gas-Fired Plant Begins Commercial Operation
In August 2018 DTE Energy broke ground on a new state-of-the-art natural gas-fired power plant in St. Clair County, Michigan (see DTE Energy’s Michigan Gas-Fired Plant Breaks Ground Today). The gas-fired Blue Water Energy Center will produce 1,150 megawatts of electricity, enough to power 850,000 homes, helping to offset three coal-fired plants set to retire by 2023. Construction on the project was halted due to the coronavirus pandemic, but restarted in May 2020 (see DTE Energy Restarts Construction at Michigan Gas-Fired Plant May 4). We have fantastic news! The plant is now done, online, and producing 1,150 MW of electricity–using natural gas to do it.
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RBN Energy’s own Rusty Braziel (the R and the B in RBN) is back with another powerhouse post on the RBN blog site. This one is about the market for ethane. For those new to MDN, ethane is one of the primary NGLs (natural gas liquids) that comes out of the ground along with oil and natural gas. Propane and butane are a couple of other common NGLs produced in the Marcellus/Utica. Ethane is the raw material used to produce ethylene, and ethylene is turned into plastic pellets that are used to manufacture thousands of different products you use every day of your life. The ethane market is, according to Braziel, “in turmoil” right now. Ethane prices are up, almost double since January, and are at their highest level in 10 years. Ethane traditionally has been a waste product for many M-U drillers. Now it’s an important source of revenue.
MARCELLUS/UTICA REGION: Utica Shale graduates largest class; NATIONAL: Biden to waive tariffs for 24 months on solar panels hit by probe; Climate “scientist” goes wild and glues himself to bank; AEA launches digital advocacy campaign against a new national energy tax; 100 ways Biden and the Democrats have made it harder to produce oil & gas; INTERNATIONAL: Germany doesn’t want to be ‘too successful’ at replacing Russian natural gas.
From time to time we highlight deals by companies that purchase landowners’ (or rights owners’) royalty payments–giving them a lump sum payment upfront in return for signing over all future royalty payments to the company buying the rights. Buying future royalty payments is not unlike companies that approach and pay lottery winners who receive payouts over a long period (for life, or for a period of years), with the lottery winner selling his or her future payments for a single lump sum now. Two companies of the larger companies in this space are about to merge.
Energy Transfer (ET) has signed a fifth customer to accept shipments of LNG produced by ET’s yet-to-be-constructed LNG export facility in Lake Charles, Louisiana, located on the Calcasieu ship channel. Yesterday (yes, on a Sunday), ET issued a press release to announce a 25-year deal with China Gas to purchase 0.7 million tonnes (MT) of LNG per year on a free-on-board (FOB) basis. Added with the other deals, ET has now pre-sold 5.8 MT per year of the site’s planned capacity to produce 16.45 MT per year, meaning 35% of the capacity is now spoken for. More than a third of the way there!
In April the New York State Assembly passed Assembly Bill A7389C. Early Friday morning the New York State Senate, on the last day of the current session, passed the same bill, sending it to Gov. Kathy Hochul’s desk for a signature. A7389C (full copy below) slaps a two-year moratorium on cryptocurrency mining (i.e. bitcoin mining) powered by electricity generated from burning fossil fuels. Here’s how it works in New York (we’ve seen this multiple times): First comes a moratorium that lasts a year or two, then the moratorium gets extended, and eventually the moratorium turns into an outright, permanent ban. That’s how it worked with fracking, and that’s how it will work with bitcoin mining in New York, a state that has become extremely hostile to business.
Last week Congressional Republicans from the House of Representatives, led by the man who will become the Speaker of the House after November’s coming tsunami election, Kevin McCarthy, introduced a road map describing how they will mitigate rising gasoline prices and address so-called climate change if the party wins control of the House in November’s midterm elections (which they will). The Republican plan arises from the task force established last year by McCarthy, called the Energy, Climate, and Conservation (ECC) Task Force. The task force rolled out a six-part “plan” (more like a framework than a fleshed-out plan) to tackle the ongoing energy crisis and the challenge of “global climate change.”
Last Friday the Federal Reserve Bank of Dallas issued a monthly update on energy indicators. This latest report tackles the popping price of natural gas and strong growth in the production of U.S. chemicals, including plastics (which largely come from oil and natural gas). We found the Fed’s analysis of where we are now, and where things are likely headed this year, of interest and value. We think you will too.
The International Energy Forum (IEF), based in Saudi Arabia, is leading a research initiative examining the elements required to create a hydrogen market. Currently, hydrogen accounts for a piddly 1% of the energy mix worldwide, but is expected to scale up in the coming years and decades as countries strive to reduce carbon emissions (reducing CO2 is a futile effort, but it is what it is). Current research and discussions on hydrogen focus primarily on the various production cost outlooks for different “colors” of hydrogen (gray for hydrogen that comes from natural gas with no carbon capture, blue if there is carbon capture, green for using water and renewables to create hydrogen, etc.). There has been, according to IEF, little discussion around the possible trajectories of the “hydrogen business model.” Scaling up hydrogen production, regardless of color, will require new types of contracts, financialization (price discovery), and/or commoditization. The IEF has just issued a new report called “Scaling-Up the Hydrogen Market” (full copy below).
The Enverus rig count, as of Wednesday, stood at 821, up by three from the week before. We are only 17 rigs away from the pre-pandemic high of 838 rigs. Last week the Marcellus operated 41 rigs (down by two), while the Utica operated 11 rigs (down by one), for a total of 52 active rigs in the M-U, lower than in previous weeks. According to S&P’s read of the situation, rig count additions appear to be slowing down. Despite high oil prices, drillers are still unwilling to drill, drill, drill.
Yesterday officials from CNX Resources and the company’s CNX Foundation presented a ceremonial check for $250,000 to pay for upgrades and extensions to municipal waterlines and the installation of fire hydrants in Bell Township (Westmoreland County, PA). The money means 55 homes in the area will be able to connect to municipal water. Local residents are ecstatic. CNX is planning to build six well pads and drill 20 wells in Bell Township. The donation is the company’s way of reassuring residents CNX will be a good neighbor.
Last year the Bidenistas initiated a massive power grab of transferring the right of individual states to regulate local natural gas gathering pipelines to the federal government (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