U.S. Propane Heading for “Armageddon” with High Prices, Shortages
Three weeks ago MDN told you that propane prices at both the wholesale and retail level were going through the roof (see Propane Prices Through the Roof – Global Demand Up, Supply Down). At that time wholesale prices at Mont Belvieu, Texas, the main U.S. hydrocarbon gas liquids (HGL) hub, were averaging $1.33 per gallon. It’s only gotten worse. The most recent numbers show wholesale propane prices averaging $1.63 per gallon. Edgar Ang, an IHS Markit analyst, says the setup looks like it could be “propane-market armageddon” and that we could see shortages before the end of winter.
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Even though Pennsylvania Gov. Tom Wolf is already one of the most liberal governors in the country who delights in screwing with the Marcellus Shale industry in his state, some truly rabid leftists don’t think he’s doing enough to ruin the shale industry. A rogues gallery of the worst of the worst–including the PA Clean Air Council, Earthworks, Clean Water Action, and the Environmental Defense Fund–launched a website this week specifically aimed at pressuring Gov. Wolf to adopt methane rules so severe it completely strangles the Marcellus Shale industry into stopping.
Earlier this week the Potential Gas Committee (PGC) released the results of its latest biennial assessment of the nation’s natural gas resources. The report shows the U.S. possesses a total mean “technically recoverable resource base” of 3,368 trillion cubic feet (Tcf) as of year-end 2020. That number is 6 Tcf (or 0.2%) less than the amount of gas assessed in the previous period (from year-end 2018). The slight decrease breaks a trend of seven consecutive record-high resource evaluations. However, the report also shows we have more than enough gas to provide not only our own country’s needs, but also the gas needs for much of the world too.
NATIONAL: EIA projects that energy-related carbon dioxide emissions will rise over the next 30 years; Precision Drilling CEO bullish on improving oil, natural gas activity; Air Products’ plan to make hydrogen so blue it’s almost green; When will oil prices peak? Traders and analysts rethink their forecasts; INTERNATIONAL: JERA isn’t jumping at fixed-price LNG contracts as volatility spurs deal-making.
The Gas and Oil Association of West Virginia (GO-WV) released a new report yesterday called “Gas Facts” (full copy below). The report chronicles the impact oil and gas has had on the Mountain State over the past five years. According to Charlie Burd, GO-WV executive director, “Natural gas is the state’s top-paying sector, supporting more than 82,000 jobs and contributing roughly $5.2 billion in wages each year. Clean, abundant natural gas will continue to drive economic growth and opportunities for generations of West Virginians.” It’s an interesting report. One thing in the report caught our eye immediately: Two “top 10” lists for gas and oil production. We’re suckers for a good top 10 list…
Terry Etam, an energy writer with over two decades in the business, has a short but brilliant take on what’s causing the mayhem currently happening in the energy world. Writing on the Watts Up With That? blog site (the world’s most viewed site on global warming and climate change), Etam makes the case that within a few months, the “divest fossil fuels” campaign is going to look like the dumbest movement in history…
ExxonMobil, which has a sizable presence in the Marcellus/Utica via subsidiary XTO Energy, has a rapidly growing cancer from within–it’s called the Exxon board of directors. Yes, the board of directors can and does change an entire company’s culture and future. In May, Big Green pushed and pressured and pouted and demanded–and finally won the right to appoint three of Exxon’s board members. A real tragedy. Those three members along with two other new board members are forcing the company to push for a carbon tax and abandon huge international projects that would make the company money for years to come. This is how the left defeats their opponents–eating them alive from within.
For whatever reason, the Ohio Dept. of Natural Resources (ODNR) is behaving like a child with its heels dug in, refusing to do what it’s supposed to do. In July 2019 MDN told you about New Jersey-based Omni Energy Group and their application to build two new injection wells near St. Clairsville (see 
Yesterday we told you about a recent bankruptcy hearing for Pennsylvania shale driller Rockdale Marcellus, a hearing in which UGI Energy Services sought to gain access to details about Rockdale’s assets that are now up for sale (see 
Six of the seven largest shale plays in the U.S. will see a slight increase in both natural gas and oil production in November according to the latest monthly Drilling Productivity Report (DPR) issued by the U.S. Energy Information Administration (EIA). The Marcellus/Utica, collectively lumped together as “Appalachia” in the report, will see an estimated increase of 41 MMcf/d (million cubic feet per day) in production next month–something of a disappointment. The M-U’s chief rival, the Haynesville, will see explosive growth, an increase of 135 MMcf/d. The oil-based Permian will see an increase in natgas production of 78 MMcf/d.