A Closer Look at New Manchin Methane Tax – Part of IRA
After the shocking news that U.S. Senator Joe Manchin had sold out his state and the entire country by agreeing to support the misnamed Inflation Reduction Act (IRA) bill, the details began to come out about just how bad this bill really is for the oil and gas industry. First and foremost, it slaps a new tax on oil and gas activities (see Joe Manchin’s Green New Deal Cave Slaps O&G with Big Methane Tax). We recently told you about the confusion about how that tax will work (see Confusion Over How to Implement New Methane Tax in Inflation Bill). We now have some more details–a summary overview of the damaging new Manchin methane tax…
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From time to time, we write about propane–the “other” NGL produced in the Marcellus/Utica “wet gas” region. When M-U drillers sink a well, methane is the number one hydrocarbon that comes out of the hole. But in certain areas in southwestern PA, eastern OH, and the northern panhandle of WV, other hydrocarbons come out of the hole along with methane. Being heavier than methane, they are referred to as natural gas liquids (NGLs). The primary NGL produced in the M-U region is ethane. Ergo Shell has built a $6 billion-plus cracker plant to leverage our region’s abundance of ethane. After ethane, the next most plentiful NGL is propane.
Federal Energy Regulatory Commission (FERC) Chairman Richard “Dick” Glick tried to pull a fast one earlier this year when he tried to permanently enshrine global warming considerations as a requirement to approve all new pipeline projects (see 
OTHER U.S. REGIONS: Port of Corpus Christi reaches centennial as the largest U.S. port; Gov. Glenn Youngkin vows to stop ‘ridiculous’ state ban on gas vehicles; NATIONAL: Incentives, technology have carbon capture poised for global breakout; Price of natural gas affecting fertilizer production; INTERNATIONAL: French industry may face energy rationing; Truss poised to unleash gas drilling ‘frenzy’; Russia halts natural gas flows to Germany again.
Antero Resources is one of the largest drillers in the Marcellus/Utica (with major assets in West Virginia). The company is the fifth largest natgas producer in the country and the second largest LNG exporter. It’s also one of our favorite Marcellus/Utica drillers. As good and careful as companies like Antero are when hiring, sometimes there’s a rotten apple found in the barrel. Such was the case with a former employee who headed up the company’s operations in WV–where most of its drilling happens. The former employee took bribes and kickbacks from a vendor over a period of years (2012-2015), steering contracts to that vendor. The vendor’s performance was not as good as other competitors. At the end of years of litigation, Antero has finally been awarded compensation from a jury, and a bit extra from a judge, to make up for the actions of their rogue employee.
It grieves us to write this, but New York State and its uber-leftist, very destructive Governor, Kathy Hochul, is running rings around Pennsylvania, Ohio, and West Virginia with respect to attracting one of four $2 billion hydrogen hubs. Hochul has just orchestrated adding two more states to what is now a six-state coalition aimed at grabbing the hub. In addition to six northeastern states, the NY coalition boasts the participation of 14 private sector industry leaders, 12 utilities, 20 hydrogen technology original equipment manufacturers (OEMs), ten universities, seven non-profits, two transportation companies, and three state agencies. There are over 60 partners cooperating to lay the groundwork for attracting the hydrogen hub to New York State.
We’ve heard from a few MDN subscribers who think we’re being too hard on Joe Manchin and his sellout of the country in return for finishing the Mountain Valley Pipeline (MVP) project. We don’t think so. The one thing everyone agrees on, those who support Manchin and the many of us who do not: It’s time to finish MVP…now.
Venture Global’s Calcasieu Pass LNG export facility in Louisiana shipped its inaugural cargo of LNG back in February (see 
We spotted a Reuters story with the headline, “U.S. oil & gas rig count falls for first time in 25 months – Baker Hughes.” We thought, “Oh oh, has the recovery in drilling finally peaked?” So we dug out the numbers for ourselves. We wanted to know how rig counts in the M-U (in PA, OH, and WV) are doing, as well as the total U.S. rig count. What we found is that the Reuters story is not accurate–one of the very few times we’ve observed Reuters being wrong about something.
You have to hand it to the wackadoodles of the Sierra Club–they sure are creative. They look for any way they can to block American fossil energy. They try to stop drilling for oil and gas via frack bans. They are behind many of the efforts to ban new customers from connecting to natural gas lines in “blue” cities (the ignorant fools fall into the trap almost every time). The Clubbers try to block the transportation of oil and gas by launching lawsuits against pipelines. And now, they are trying to block clean-burning American natural gas (far cleaner than any other gas extracted on the planet) from being exported to help our allies in Europe. The Clubbers and their radical brethren at a group called Healthy Gulf have challenged a “dredge and fill” permit granted by the U.S. Army Corps of Engineers to the Driftwood LNG facility now under construction near Lake Charles, Louisiana.
Here’s a sobering (and startling) prediction: Within the next year, crude oil will likely hit $200 a barrel, translating to $10 a gallon at the pump. It will result in protests and demonstrations across the country and around the world. That’s the prediction of veteran financier and hedge fund manager Salem Abraham, who founded Abraham Trading Company over 30 years ago. Abraham says the so-called Inflation Reduction Act (IRA) coupled with a chronic underinvesting in fossil energy companies is why the price of oil is about to go haywire.
Olympus Energy (formerly Huntley & Huntley) drills in the Greater Pittsburgh region, in Allegheny and Westmoreland counties. Last year Olympus filed an application to build a new well pad in a rural part of Allegheny County, in West Deer Township. So-called “concerned citizens” (anti-fossil fuel zealots) got amped up to oppose the rural project (see 
In March, MDN told you that the Deputy Chief Administrative Law Judge of the Pennsylvania Public Utility Commission (PUC) issued a ruling against the now completed Mariner East 2 pipeline project, assessing a $51,000 fine on the project for work done near an apartment complex (see 
The State of Florida has jumped on the divest-the-diverstors bandwagon. We have no doubt that Larry Fink, founder and CEO of the world’s largest investment firm, BlackRock, is now VERY concerned about the pushback he’s getting for pushing investors to divest from fossil energy companies. Two of the three largest states in the county (by population)–Texas and Florida–have decided to ban investments in funds that promote ESG–environmental, social, and governance. ESG is just another way of saying divest from fossil energy companies. And now the diverstors, like BlackRock and other Big Banks and Big Investment firms that divest, are themselves the targets for divestment. We love it!