OH Budget Bill Makes Shale Drilling on State Land Possible, Finally
Ohio’s Republican-controlled legislature is watching out for the state’s oil and industry. The Ohio House version of the 2022-23 state operating budget includes language that would make it state policy to “promote” oil and gas development, exploration and production. The House also added provisions to the budget to make it easier to lease mineral rights under state lands. Finally, after 10 long years, maybe drilling on state-owned land will happen.
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Pieridae Energy’s Goldboro LNG project, located in Nova Scotia (with the potential to export Marcellus/Utica molecules) has been on our radar for years. Nine years to be exact. In August 2020 Pieridae hired a senior VP to run the project, an indicator the company is serious about building it (see 
MiQ is an independent, not-for-profit partnership between RMI and SYSTEMIQ aimed at reducing methane emissions from the oil and gas sector. The way they do it is with a certification. The MiQ Standard evaluates factors in methane intensity, company practices, and methane detection, giving the methane produced an A-F grade. Several M-U drillers, including EQT and Northeast Natural Energy, are adopting MiQ as part of their effort to prove they aren’t scumbags polluting Mom Earth. Now MiQ is expanding to certify entire cargoes of LNG that get exported.
The Jones Act prevents LNG from being transported from one U.S. port (like Cove Point, Maryland and Elba Island, Georgia) to other U.S. ports (like Boston and New York) because there are no built-in-the-USA LNG carriers, a requirement under the 1920 Jones Act. When New England runs low on natural gas, they must import the gas from Russia (see 
The Enverus rig count added another 10 rigs for the week ending May 13 to hit a new post-pandemic high of 555 active rigs. Both the Marcellus and the Utica lost one rig each, ending the week at 35 for the Marcellus and 12 for the Utica. Cumulatively the M-U has 47 active rigs. The main competitor to the M-U, the Haynesville in Louisiana and Texas, lost 2 rigs and now has 51 active rigs.
MARCELLUS/UTICA REGION: Peregrine acquires royalties in NE Pennsylvania; OOGEEP announces George Brown as new Executive Director; OTHER U.S. REGIONS: Waha natgas market is going premium, but it may be short-lived.
Chesapeake Energy issued its first quarterly update since exiting bankruptcy in February. It wasn’t the typical update most public companies issue. It’s a challenge to reconcile numbers before bankruptcy and after exiting bankruptcy. A few highlights: When combining numbers from before and after bankruptcy, we found (in digging through the SEC Form 8-K filing) that Chessy produced 2 billion cubic feet per day (Bcf/d) on natural gas, most of which was produced in the northeast PA Marcellus (1.26 Bcf/d). The company also produced an average of 80,000 barrels of oil and 22,000 barrels of NGLs (in non-Marcellus plays) in 1Q21. We also discovered the company’s strategy on where it plans to expand its shale gas drilling program (the answer may not please you)…
Last Friday National Fuel Gas Company (NFG), the parent company for Seneca Resources and Empire Pipeline, issued its latest quarterly update for the quarter ending Mar. 31 (NFG’s second fiscal quarter, everyone else’s first quarter). The company’s purchase of Shell’s Marcellus assets last year (450,000 acres, 350 producing Marcellus and Utica shale wells in Tioga County) gave Seneca a 43% boost in production in its fiscal 2Q21 over 2Q20. Seneca drilled 14 new wells in fiscal 2Q.
A number of municipalities (mainly cities) in states like California, Washington, and Massachusetts have passed local ordinances banning the use of natural gas in new or refurbished construction. That is, they’ve become energy bigots, institutionalizing discrimination against forms of energy they irrationally hate. Prejudice and discrimination (hatred) are always ugly, whatever form they take, whether against other humans or against energy sources. Some states have passed new laws to prohibit local municipalities from engaging in energy discrimination and natural gas bans. Pennsylvania is the latest to consider such protection.
It honestly is one of the most bizarre things we’ve ever seen. The largest publicly-owned natural gas utility in the country, Philadelphia Gas Works, is actually looking at and considering the best ways it can kill itself. The implications are many. First and foremost it’s completely racist, as ending the sale of natural gas so will skyrocket the utility bills of its 500,000 customers, who are primarily people of color (44% African American, 14% Latino, 7% Asian = 65% in total). There is no way a majority of Philly residents can afford to wholesale replace their stoves and furnaces at a cost of tens of thousands of dollars. Yet there’s no mention of racism in reporting on this bizarre issue.
The Massachusetts Municipal Wholesale Electric Company (MMWEC) has paused plans (30 days minimum) to build a much-needed natural gas “peaker” power plant in Peabody, MA. Why? “To address concerns raised by local residents and advocacy groups.” In other words, a small number of crazies are out in force, bullying a tiny power plant that will only operate during peak demand–somewhere around 10 days out of the whole year!
Ellen Wald is a senior fellow at the Atlantic Council’s Global Energy Center, and president of Transversal Consulting, a global energy and geopolitics consultancy. She is the author of “Saudi, Inc.,” a history of Aramco and how the Saudi royal family controls this multitrillion-dollar enterprise. Ellen is one of our favorite Forbes authors. She recently published a fantastic editorial in The Hill (rag targeting DC swamp dwellers). Wald writes that President Biden’s plan that commits the U.S. to reduce its greenhouse gas (GHG) emissions over the next eight years to about 50 percent of what they were in 2005 is “impossible, unrealistic and insufficient.”
Once again the Pennsylvania Dept. of Environmental Protection (DEP) is falling down on the job. For years we’ve covered the news that DEP delays in issuing simple permits for erosion and sediment control are taking far longer–months longer–than they should. A Chapter 102 Erosion and Sedimentation permit is supposed to take 14 days to review and issue. In the Southwest DEP office, it’s taking an average of five months! Enough is enough. It’s time to pass legislation (one of three bills) now working its way through the PA House and Senate that allows private, third-party engineers to review and approve permits since the DEP (under Sec. Pat McDonnell) is incapable of doing its job.
Back in 2018 MDN analyzed the economic impact from just one driller (Cabot Oil & Gas) in one county (Susquehanna County, PA) and discovered Cabot had put $1.5 billion into the pockets of private landowners through signing bonuses and royalties, and had spent another $3.5 billion on drilling (over $5 billion total spent) over a 10-year period–all in Susquehanna County (see