M-U Industry Asks Feds to Use M-U Butane to Stretch Gasoline
The leaders of the Marcellus Shale Coalition, Kentucky Gas and Oil Association (KGOA), Gas and Oil Association of West Virginia (GO-WV) wrote a letter to Washington, D.C. last week encouraging the federal government (i.e. Joe Biden) to allow butane blending with gasoline as a great way to lower prices at the pump. But the groups didn’t send the letter to Joe Biden, knowing it would get filed in the circular file next to Biden’s desk. Instead, they sent the letter to another Joe–U.S. Senator Joe Manchin from West Virginia. Manchin, chairman of the powerful Senate Energy and Natural Resources Committee, has the attention of the Bidenistas since he torpedoed the administration’s Build Back Worse plan last December. If Joe Manchin talks about something, Joe Biden pays attention (if he isn’t napping).
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MARCELLUS/UTICA REGION: Caterpillar Inc. purchases Pennsylvania energy service company; NATIONAL: Democrats split with Biden and push for quick offshore leasing program approval; INTERNATIONAL: Oil prices tumble as EU curtails proposed sanctions; Value of energy trade between the U.S. and Canada rose in 2021; India is shamefully buying LNG from Russia.
National Fuel Gas Company (NFG), headquartered in Buffalo, NY, is the only fully integrated energy company operating in the Marcellus/Utica, by which we mean NFG is a driller (Seneca Resources), a midstream/pipeline company (Empire Pipeline), and a downstream end-user via its local distribution company (LDC), otherwise known as the local gas utility company (National Fuel). Little known fact: NFG’s Seneca Resources subsidiary owns an oil drilling operation in California. But not for much longer…
An interesting case recently decided by Ohio’s Fourth District Court of Appeals has a significant impact for both surface landowners and drillers. The case is Zimmerview Dairy Farms, LLC v. Protégé Energy III LLC and establishes, under Ohio law, that a general release of damages contract (typically signed by landowners when they lease land for drilling or pipelines) does not release a driller or pipeline company from its ongoing obligation to remediate (fix) and restore damage to a landowner’s property.
As we told you last week, Energy Transfer, during its first quarter update, spoke about the now-completed Mariner East pipeline system that flows NGLs, including ethane, propane, and butane, from eastern Ohio and southwestern Pennsylvania all the way to southeastern PA and the Marcus Hook terminal (see 
In December, Tennessee Gas Pipeline (TGP), a subsidiary of Kinder Morgan, filed a proposal with the Federal Energy Regulatory Commission (FERC) to implement a “responsibly sourced natural gas (RSG) supply aggregation pooling service” at select locations across the TGP system (see 
LNG seems to be the word on everyone’s lips these days–everyone in the oil and gas space, that is. Two weeks ago TC Energy (formerly TransCanada), a huge midstream/pipeline company, issued its first quarter update and held a conference call with analysts. We’re just now learning about some of the chatter coming from that update–very interesting chatter. LNG was a hot topic–flowing more molecules, especially Marcellus/Utica molecules–to LNG export facilities along the Gulf Coast. TC Energy CEO Francois Poirier said during a conference call that roughly one-quarter (25%) of all the molecules that flow to U.S. LNG export facilities get to those facilities by traveling through TC’s pipelines.
Sometimes U.S. Joe Manchin from West Virginia makes us nervous. He’s done great work in blocking Joe Biden’s radicalized agenda to destroy fossil energy by blocking the Build Back Worse program Biden and the Dems desperately wanted (saving the country from complete ruin with runaway hyperinflation). But then we read about Manchin tinkering with the idea to assess a tariff on foreign imported goods, like steel and cement, that are made in countries (like China) that don’t give a flip about environmental controls. Supposedly such a tariff would encourage those countries to use more natural gas, or encourage more American manufacturing of those goods (because our plants use clean natgas). We’re not sure what to make of Manchin’s efforts.
Yesterday Chesapeake Energy Corporation issued its first quarter 2022 update. At a high level, the company generated just over $3 billion in revenue during 1Q with $1.7 billion in operating expenses. However, the company lost $2.1 billion on derivatives and hedges (bad bets on the price of oil and gas), leading to a net loss of $764 million for the quarter. Chesapeake managed to generate $532 million in free cash flow during the quarter. Of the company’s three main operational areas–the Marcellus, the Haynesville, and the Eagle Ford–the Marcellus still gets the most love with the most wells drilled and most money spent. But not by much. The company’s new Haynesville assets are seeing a huge investment and will likely overtake the Marcellus at some point.
Wow! This is getting interesting…and scary. The NYMEX futures price of natural gas for the current “front month” contract soared another 37 cents yesterday to close at $8.78 per MMBtu. Another 14-year high. It certainly looks as though the price will soon blow by $9/MMBtu. One expert says “we feel we easily can go over $10 in prompt-month [pricing] over the next several weeks.” Yikes! What’s causing this massive spike?
In March the Pennsylvania Environmental Quality Board (EQB), a sub-agency of the Dept. of Environmental Protection (DEP), approved a final version of onerous new regulations that supposedly will capture every last molecule of stray methane that leaks from shale and conventional drilling operations (see 
The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) has, for years, claimed that under a centuries-old law the state of PA “owns” the property under “navigable” waterways–including rivers and streams (see 