Radical “Follow This” Admits Defeat in Forcing O&G to Obey Paris
Follow This is a group of 8,000 far-left, radical investors who want to shut down the oil and gas industry by using big money invested in O&G companies to force board changes and new policies aimed at forcing “Big Oil” to self-harm. Follow This’ twisted vision of the future is forcing humanity back to Medieval Times when no oil and gas and plastics existed. Back to the time when humans lived to be about 35-40 years old and then died from disease or famine. Follow This and their ilk were having some success in forcing oil and gas companies to engage in self-harming activities (selling off assets, reduced drilling, investing in unreliable renewables, etc.). But since the pandemic and (now) since the war in Ukraine, many of the “advances” made by Follow This have evaporated.
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Yesterday MDN brought you the news that Ohio Congressman Troy Balderson, Republican representing Ohio’s 12th Congressional District, recently introduced a resolution that officially recognizes American natural gas as a “green and clean” energy source (see 
It appears the wind has gone right out of the sails when it comes to issuing new permits for shale drilling in the Marcellus/Utica. For the week of May 23-29, only six new permits were issued. Four of the permits were issued in Pennsylvania, two in West Virginia, and none in Ohio. This is the lowest number in a single week we’ve seen in maybe forever. A measly, lousy six permits!
MARCELLUS/UTICA REGION: NY heads over the “renewable” cliff into oblivion with new solar farms; OTHER U.S. REGIONS: L.A. is banning most gas appliances in new homes; NATIONAL: U.S. gas production hits record highs in March, EIA says; US weekly LNG exports down by one; Long-term deals propel new LNG development towards FID; White House weighs oil profits tax to fund consumer rebate; Looming ‘cure’ for high gasoline prices would be worse than the problem itself; INTERNATIONAL: Biden planning Saudi Arabia visit as U.S. gasoline prices rise; OPEC move won’t stop record gasoline prices.
Daniel Sherwood takes a look at various metrics for Marcellus/Utica drillers in the latest edition of the TCF Upstream Monthly. Sherwood uses production trends, well efficiencies, and portfolio decline rates to compare and contrast M-U drillers. In the June issue (full copy below), Sherwood finds that CNX Resources and Chesapeake Energy are “leading,” Gulfport Energy and National Fuel Gas (i.e. Seneca Resources) are “underperforming,” and Coterra Energy (formerly Cabot Oil & Gas) is “improving.”
David Taylor, president and CEO of the Pennsylvania Manufacturers’ Association, was one of the featured speakers at yesterday’s Think About Energy Briefing held in Berks County, PA. Taylor said if PA and federal legislators commit to a pro-growth agenda, PA could become the country’s No. 1 natural gas-producing state. Right now that honor belongs to Texas, which produces enormous amounts of associated natural gas. In 2021, #1 Texas produced 9.4 Tcf (trillion cubic feet) of natural gas, while #2 PA produced 7.7 Tcf. Taylor’s statement is not unthinkable. PA *could* one day eclipse TX natgas production.
The stock market is off to a shaky start in 2022. Retirement accounts of all types–401(k)s, IRAs, etc.–have chart trend lines going in the wrong direction. Fears over persistently high inflation, aggressive Federal Reserve interest rate hikes, and Russia’s unprovoked and murderous war against Ukraine have the S&P 500 down 13.3% through the end of May. The Dow Jones Industrial Average is down 10.3% year-to-date (YTD). But not every stock is down. Looking at the top 10 stocks for companies with market capitalizations of at least $1 billion, you will find eight of the ten (80%) are fossil fuel companies. In fact, one of the top ten is a pure-play Marcellus/Utica driller!
According to Reuters analyst John Kemp, if the U.S. wants to keep growing its LNG exports, the amount of natural gas we produce will also have to grow. If natgas production falls behind, as it is now, prices will continue to skyrocket. LNG exports were up an astonishing 87% for the first three months of this year compared with 2019 (three years ago). Domestic consumption of natgas is pretty much the same year after year. The thing increasing year after year is exports–both LNG and pipeline exports to Mexico.
It seems that the higher prices natural gas is fetching are finally translating into higher royalty checks for landowners–at least in the northern part of the Utica Shale in Ohio (likely everywhere). The Youngstown Business Journal spoke to landowners with leased and producing acreage in Columbiana County and found not only have their royalty checks increased, so too has new leasing activity and along with it, new lease bonuses.
A new industry has popped up to buy and sell so-called carbon credits, allowing companies that reduce carbon dioxide from the atmosphere to offer credits for sale, and companies that “pollute” the atmosphere with CO2 to buy those credits, offsetting their evil ways. We think the Catholic practice of buying and selling indulgences for sins in the 1300s and 1400s is an accurate comparison. One such company offers a blockchain platform for buying and selling carbon credits (carbon indulgences). The company has just raised $70 million in its first round of funding.
We’ve talked plenty about the big LNG export facilities scattered mostly along the Gulf Coast that export a fair amount of Marcellus/Utica molecules (and two LNG export sites situated on the East Coast, both of which export 100% M-U molecules). Every now and again we talk about some of the smaller LNG export operations, including Eagle LNG in Florida, which uses at least some M-U molecules. The experts at RBN Energy have a new post exploring “small-scale” LNG producers, including Eagle and three other companies that own and operate a number of small facilities. As with Eagle, these smaller players are potential customers for M-U molecules.
The Ohio Oil & Gas Association (OOGA), a trade association with members representing the people and companies directly responsible for the production of crude oil, natural gas, and associated products in Ohio, recently issued its 2022 Community Impact/Sustainability Report. The report (full copy below) is full of interesting facts and figures about the oil and gas industry in Ohio, how that industry benefits every single Ohioan, and how the industry is cleaning up the environment in Ohio. You read that right. O&G is making the environment BETTER in Ohio.