Money & Drilling Flow from Marcellus/Utica to Haynesville
While the mighty Marcellus/Utica continues to produce the most natural gas of any shale play in the U.S. (actually of any shale play in the world), the simple truth is the money and momentum for new shale gas drilling is happening in the Louisiana and East Texas Haynesville shale play. Which wouldn’t be so bad if it weren’t for the fact that much of the new investment in the Haynesville is coming from M-U drillers!
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It’s been a long, tough slog for Equitrans Midstream’s Mountain Valley Pipeline (MVP), a 303-mile pipeline from West Virginia into southern Virginia. The project is 92% done and in the ground. The final bits should be done within the next year and it will go online (if the crick don’t rise and the Lord don’t come) in mid-2022. One of the places where the pipeline was recently installed is close to a small clump of homes (called a “village”) in the Virginia mountains of Giles County. A place called Newport. A recent article in the Roanoke Times would have you believe the pipeline has somehow devastated the local community. It has not. We’re here to provide perspective on pipelines as good neighbors.
There is a very real and tangible cost to the delays coming from the Federal Energy Regulatory Commission (FERC) with respect to reviewing natural gas pipeline projects. Those delays, intentionally created by current FERC Chairman Richard “Dick” Glick, are costing West Virginians jobs and money. JB McCuskey, the state auditor for WV, should know. He audits how tax dollars are spent in the state. His office reviews and approves general operating budgets for some 700 municipalities, counties, and school districts across the state. McCuskey says FERC is tangibly hurting the state of WV by dragging its feet in reviewing pipeline projects.
Spire STL is a 65-mile pipeline that connects to and flows Marcellus/Utica gas from the Rockies Express (REX) pipeline to residents and businesses in the St. Louis, MO area. The pipeline began flowing gas in late 2019 (see 
Yale University operates a program it calls the Yale Program on Climate Change Communication. A better name would be the Joseph Goebbels Program for Climate Change Brainwashing. The chief propagandists at the once-great university are desperately trying to figure out how they can turn the public against clean-burning, abundant, and cheap natural gas. The problem, it seems, is with the word “natural.” In polling research, Yalies discovered if they could force you to stop using the phrase natural gas and instead force you to call it methane, you would begin to “think right” about this evil, filthy, vile substance. One thing Yale won’t tell you is this: Where they get money to conduct this kind of “research.” Could the funding be coming from China? Or Russia? Or Iran?
Last week both Pennsylvania and West Virginia issued permits to drill new shale wells. Ohio remained skunked for a fourth week in a row. PA issued 30 new shale permits–one of the highest weekly tallies we’ve seen. PA’s permits were issued for wells on 11 pads, meaning there were a number of multi-well permits issued. WV issued 7 new shale permits, all of them for the same pad being drilled by EQT in Wetzel County.
MARCELLUS/UTICA REGION: Lackawanna College School of Natural Gas taking registrations; NATIONAL: Infrastructure bill boosts China, while reconciliation proposals pummel American consumers; U.S. Treasury to oppose development bank financing for most fossil fuel projects; The disaster of green energy; INTERNATIONAL: As U.S. retreats, China looks to back Taliban with Afghan mining investments; OPEC+ predictably rejects Biden plea for more oil production.
Ohio mineral rights owner Gateway Royalty researched unitization (aka force pooling) in the state and discovered a disturbing change introduced in existing unitization beginning three years ago. Since February 13, 2018, a “market enhancement” clause has been included in Ohio Dept. of Natural Resources’ (ODNR) forced pooling unitization orders, which allows the unit operator to deduct post-production costs from the royalties owed to mineral owners. These post-production costs are sometimes as much as 95% of the gross sale price. Gateway called attention to the practice and ODNR has since backed down and no longer includes the market enhancement clause in new unitization orders.
Although quarter after quarter and year after year natural gas production in the Pennsylvania Marcellus continues to go up (see 
The New York State Dept. of Environmental Conservation (DEC), completely corrupted by radicals under the thumb of outgoing Gov. Andrew Cuomo, has struck again. The DEC has filed a letter with the Federal Energy Regulatory Commission (FERC) blasting a plan to boost capacity at two existing compressor stations along the Iroquois Gas Transmission System pipeline. DEC says more natural gas flowing along the pipeline (desperately needed in both New York City and in New England) will cause more mythical global warming and therefore FERC should reject the request. How sad. How intellectually bankrupt.
Mariner East 2 (ME2) Pipeline is the gift that keeps on giving…for the Pennsylvania Dept. of Environmental Protection (DEP). The DEP keeps assessing fines for alleged construction violations that happened a year or more ago. This time the DEP has fined ME2 for supposed violations happening in early 2020 in four Pennsylvania counties: Blair, Cumberland, Juniata, and Lebanon. The problems were “inadvertent returns” of drilling mud in several swamps (“wetlands”) and creeks. Yes, ME2 is once again up Snitz Creek…
Epsilon Energy concentrates most of its effort on the Marcellus in Susquehanna County, PA. Epsilon doesn’t typically do its own drilling. The company joint venture partners with (gives money to) other companies, like Chesapeake Energy, and the other company typically does the drilling. Epsilon issued its second quarter update last Thursday. The company’s Marcellus net gas production averaged 27.6 million cubic feet per day (MMcf/d) in 2Q21, compared to 30.6 MMcf/d of net gas production in 2Q20 (a 10% decrease). However, revenues were $7.1 million in 2Q21, compared to $6.3 million in 2Q20 (a 13% increase).
The Federal Energy Regulatory Commission (FERC) has disregarded the petulant demands of anti-fossil fuel fanatics and has given its permission to Mountain Valley Pipeline (MVP) project to switch the method it uses to cross 136 streams and 47 wetlands. For roughly 70 miles of the pipeline’s 303-mile route, MVP asked FERC in early February to change the method of installation from open trench to trenchless, drilling under the body of water using horizontal directional drilling (see