Enverus Rig Count @ 722 (+15); Marcellus @ 39 (+1), Utica @ 11 (+1)
For the week ending Jan. 13, the Enverus U.S. oil and gas rig jumped up by 15 for the week to 722. According to our calculations that would be a new post-pandemic high not seen since at least April 2020. The Marcellus gained one rig for 39 active rigs, and the Utica gained one rig for 11 active rigs. Combined the M-U had 50 active rigs last week–the most we’ve seen in a long time.
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MARCELLUS/UTICA REGION: Columbiana County seeks to strengthen ties between shale business, education; NATIONAL: US weekly LNG exports go up by one vessel; API pins high energy costs on Biden policies; Why Democrats make energy expensive (and dirty); INTERNATIONAL: Commodity trader King eyes $200 oil; U.S. voices misgivings on EastMed gas pipeline – Greek officials; Oil producers aren’t keeping up with demand, causing prices to stay high.
Just coming to light for us now is an application to build a “data center” in Morgantown, WV. The application was filed last August, but the WV Dept. of Environmental Protection’s Division of Air Quality held a hearing yesterday to accept public input on the facility. Marion Energy Partners wants to build the facility, yet its purpose is shrouded in mystery. The best guess is that this is another new cryptocurrency (bitcoin) mining operation. Our interest is that it will use four natural gas-fired turbines to generate the huge amounts of electricity needed to operate it–natural gas that will come from the Marcellus/Utica.
A Shell spokesman last week said that the mighty ethane cracker plant the company is building in Monaca (Beaver County), PA is now 80% complete and projected to be operational “sometime this year,” although a more specific date can’t be nailed down. Currently, there are some 8,000 workers who report to the construction site each day. Simply astounding! When the plant is done and operational, it will employ about 600 permanent on-site workers. Shell is now in recruiting mode to find those 600 permanent workers.
Earlier this week MDN told you that Pennsylvania Gov. Tom Wolf swiftly vetoed a Senate resolution sent to him that would block PA from joining the Regional Greenhouse Gas Initiative (RGGI), nothing more than a carbon tax that won’t actually reduce carbon emissions (see 
Did you catch the huge spike in the NYMEX Henry Hub futures price yesterday? Day over day, the February NYMEX contract price increased by $0.61 to close at $4.86/MMBtu–up 12.52% in a single day. Similarly, the March NYMEX futures contract jumped by $0.36 cents to close at $4.33. Why the big gains? In a single word: weather.
According to the U.S. Energy Information Administration (EIA), natural gas spot prices at Henry Hub averaged $3.91/MMBtu for 2021. Each month the EIA issues a Short-Term Energy Outlook (STEO). In the latest STEO update for January, EIA predicts that the annual average HH price will average $3.79/MMBtu in 2022, down $0.12 from 2021. EIA further predicts the HH price in 2023 will go down yet more, to an average of $3.63.
Rystad Energy, based in Norway, is an independent energy research and business intelligence company providing data, analytics, and consultancy services to clients exposed to the energy industry across the globe. Rystad is pretty tuned-in when it comes to what’s happening in the oil and gas industry. Earlier this week the company released an analysis that shows global oil and gas investments will expand by $26 billion this year as the industry continues its recovery from the worst of the pandemic. Rystad Energy projects overall oil and gas investments will rise 4% to $628 billion this year from $602 billion in 2021. The main factor behind the increase is a 14% increase in upstream gas (gas drilling) and LNG investments. That’s good news for the M-U.
Yesterday the American Petroleum Institute (API) issued its annual “State of American Energy” report (full copy below). We will say right up front we’ve had our differences of opinion with the API and its direction, particularly over the past year, but there is no disputing the API remains the premier organization representing the oil and gas industry in the U.S. (and beyond). The API is at the top of the O&G food chain. So it’s a big deal that during the annual virtual event to unveil the latest API report the organization featured a young completions engineer who works for Coterra Energy (formerly Cabot Oil & Gas) in Susquehanna County, PA.
In late 2020, ExxonMobil released the outlines of its development plan for the next five years (see 
Seneca Resources, the drilling subsidiary of National Fuel Gas Company, announced yesterday it has achieved certification for 100% of its Marcellus/Utica natural gas production–over 1 billion cubic feet of gross production per day (Bcf/d)–under Equitable Origin’s EO100™ Standard for Responsible Energy Development. Getting gas certified as “responsible” gives drillers another marketing tool in their arsenal.
West Virginia House of Delegates member Lisa Zukoff (Democrat from Marshall County) is making a bold claim: Some out-of-state property owners aren’t paying taxes on oil and gas royalties, and it is costing the state millions of dollars in lost revenue. Zukoff is (once again) introducing a bill in the annual two-month session of the state legislature that requires gas and oil companies to subtract any taxes from the royalty check before it is sent to the property owner.
We return, once again, to the story of New England (and New York) blocking new natural gas pipelines and in the process, hurting the residents of New England. Not only are residents harmed economically, but the environment is also harmed. As of 10 am yesterday morning, a full 20% of all the electricity generated in New England used either dirty oil or coal to do so. Normally the oil/coal generation number is less than one-half of one percent (<0.5%), not 20%. The price for electricity in New England is out of sight high right now too. Actions have consqeuences.