Anti-Drilling/Fossil Fuel | CNG/LNG | Energy Companies | EQT Corp | Exporting | Industrywide Issues | Pipelines
EQT CEO Says M-U Could Alleviate Europe’s Gas Situation, Except…
EQT CEO Toby Rice laid the blame for the developing world energy crisis, particularly Europe’s lack of access to natural gas, at the feet of radical environmentalists. If not for the radicals and their constant frivolous lawsuits blocking pipelines and LNG export facilities, such infrastructure would already have been built and would be providing abundant, cheap, clean-burning Marcellus/Utica natural gas to other regions of the U.S. and to Europe.
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In recent weeks we’ve been asked the same question by MDN subscribers several times: “With the price of natural gas through the roof, why aren’t Marcellus/Utica drillers drilling more?” In a word, it’s because of hedging. Most drillers have hedged, or pre-sold under contract, most of the output they plan to produce for the balance of this year–at prices MUCH lower than those we’re seeing right now. There is no incentive to drill more. “Fine, but couldn’t they just drill more and sell the new output that’s not hedged at the higher spot prices we see now?” They could, except to drill more means they need more capital (money) to do the drilling, violating their announced budgets (their “guidance”) and violating the expectations of touchy investors and stockholders. Public companies are boxed in. Their hands are tied.
Remember back in May 2019 (the good old days, prior to hyperinflation, gasoline prices through the roof, electric and natgas prices through the roof) when Rick Perry (an actual, thinking adult) was Secretary of Energy and he and others at DOE referred to LNG exports as “molecules of U.S. freedom”? The Democrat media (i.e. mainstream media) went berserk. The arrogant “reporters” at the New York Times, Washington Post, Slate, NBC, CBS, ABC, et al ad nauseum pilloried and guffawed and maligned and ridiculed Perry and DOE for referring to U.S. LNG exports as “freedom gas” and “molecules of freedom” (
Both U.S. President Joe Biden and British Prime Minister Boris Johnson have essentially steered their respective countries off the road and into an energy ditch. Perhaps Johnson can be forgiven for simply following existing policies and kowtowing to European environmental extremists. Biden has no such excuse. Biden inherited a country that was, after more than 50 years, energy independent. In the space of eight months, Biden turned our country into an energy-dependent nation once again–relying on our enemies (Saudi Arabia and Russia) to provide for our energy needs. How sad.
Last week Pennsylvania was back on its game, issuing 22 permits to drill new shale wells. Most of the permits in PA were for three well pads by three different operators: Seneca Resources, Repsol, and EQT. Ohio issued just two new permits to Gulfport Energy for the same well pad in Belmont County. West Virginia issued four new permits, three of them to Southwest Energy and one to Antero Resources.
MARCELLUS/UTICA REGION: Pennsylvania attorney general jumps into ’22 governor’s race; OTHER U.S. REGIONS: Cheniere and ENN Natural Gas sign long-term LNG sale and purchase agreement; Climate activists chain themselves to boat at Gov. Baker’s house; NATIONAL: November natural gas futures bounce back even as forecast weather demand eases; INTERNATIONAL: Europe’s attempt to switch to renewable energy has been ‘management by chaos’.
Well permits, long tracked by MDN, are a leading indicator of drilling activity. In Pennsylvania, four of the state’s five biggest producers–EQT, Chesapeake Energy, Range Resources, and Southwestern Energy–have kept the pace of drilling new wells “subdued” according to an analysis by S&P Global Market Intelligence. The top five producers in PA accounted for only 51% of the permits issued in September, down from 53% in August. Normally, the top five drillers account for roughly two-thirds of permits issued each month.
Last week we told you about the uber-sleazy Attorney General in Pennsylvania, Josh Shapiro, handing down an indictment with 48 counts against Energy Transfer over (mostly) drilling mud spills–accidents that were previously addressed and handled by the state Dept. of Environmental Protection (see 
According to a Bloomberg article, the energy crisis that’s led to electricity shortages and blackouts in Europe and Asia may be heading for the U.S. Utilities in New York and New England are warning customers to expect higher residential heating bills this winter due to surging global natural gas demand and prices. The fact is the U.S. has plenty of natural gas. The problem with high prices and potential outages is lack of pipelines to flow natural gas from where it’s extracted to where it’s used.
Comrade Joe Biden has painted himself into a corner. As Biden entered office, the United States of America was, after more than 50 years, energy independent. Upon seizing power, Biden canceled the Keystone XL pipeline from Canada and illegally banned federal oil and gas leasing. Now we have an oil and gas shortage and Biden is begging OPEC+ to increase production. What a dunce. This is how inept socialists are. So what can Biden do to get himself out of the corner he’s painted himself (and us) into?
U.S. Senator Joe Manchin from West Virginia remains the only thing standing in the way of the Democrats’ far-left, socialist plan to remake the country using a pair of bills that will spend over $5 trillion of your tax money. Both the infrastructure bill and the so-called budget reconciliation bill contain new regulations and laws that directly, nakedly, attack the oil and gas industry. The Democrats want to end fossil fuels–a truly frightening (and stupid) plan. Manchin is holding them back. Will he cave?
It’s Columbus Day! MDN will not publish our regular list of stories today–but have no fear, we will be back tomorrow (Tuesday) with a full lineup.
Once again the crack reporters at the Reuters news service have landed a huge scoop: Chief Oil & Gas, which owns 600,000 acres of leases in northeastern Pennsylvania and produces 1 billion cubic feet (Bcf) of natural gas per day, has hired an investment bank to shop the company for sale. Asking price: $3 billion.
Pennsylvania’s Independent Fiscal Office (IFO) provides revenue projections for use in the state budget process along with impartial and timely analysis of fiscal, economic, and budgetary issues to assist PA residents and the General Assembly in their evaluation of policy decisions. The IFO published its Monthly Economic Update yesterday (for October). The update contains good news for PA residents, all of whom benefit from the state’s Act 13 impact “fee” (i.e. tax) on Marcellus drilling. The IFO says the impact fee in 2022 (assessed on drilled and active wells as of 2021) will haul in an extra $74 million (to nearly a quarter of a billion dollars) thanks to the higher average price of the NYMEX futures index.