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Weekly Shale Drilling Permits for PA, OH, WV: Apr 26-May 2
An interesting turn of events for our weekly permit report. In querying the Pennsylvania database, it reports no new permits issued for the past week. We can’t recall that ever happening. Pennsylvania almost always has the most permits issued of the three M-U states. West Virginia, which typically has the second-highest number of permits issued each week, also issued no new shale drilling permits last week. Only Ohio, which lately has issued very few permits for Utica drilling, had a bumper week, issuing 8 new permits!
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MARCELLUS/UTICA REGION: Reading & Northern Railroad hires Raffa for marketing role; NATIONAL: Enterprise weighs US tax policy amid cautious midstream gas, oil spending; INTERNATIONAL: Indian gas demand hit by coronavirus surge and restrictions; Goodbye OPEC, hello OMEC – a shift from petroleum power to minerals power.
Anecdotally it seems as though there has been less drilling activity in the Marcellus/Utica over the past year. Some say it’s due to the coronavirus pandemic. Others say there’s more to it than that. If you’ve tracked public announcements by drilling companies, they claim to have pulled back on drilling and won’t increase current levels of drilling even when/if the price of natural gas increases. Why? They must turn a profit, or investors leaving for greener pastures (pun intended). But is there really less drilling happening in the M-U today than say one year ago?
An important issue we don’t often think about is pipeline maintenance. Natural gas pipelines have to be inspected and sometimes repaired. When that happens, it takes a portion of the pipeline out of service. When pipelines are taken out of service, natural gas doesn’t have a way to get to the same markets it was flowing to, meaning it begins to pile up in the location where it’s extracted. Further meaning too much supply in a given location, which leads to lower prices. That’s what appears to be happening in northeastern Pennsylvania right now.
On July 18, 2019, New York Gov. Andrew Cuomo signed into law the Climate Leadership and Community Protection Act (Climate Act). It is among the craziest and stupidest climate laws in the world, requiring NY to reduce so-called greenhouse gas emissions by 40% by 2030 and by 85% by 2050 (from 1990 levels). The law creates a Climate Action Council charged with developing a scoping plan of recommendations to meet these targets. The Council has multiple “panels” to assist. One of the panels is the Power Generation Advisory Panel, filled with far-left, Big Green people. That panel is about to recommend NY State prohibit the construction of any new natural gas-fired power plants–beginning now.
Somebody’s head is gonna roll at liberal Columbia University (big lib university located in the heart of New York City). Somehow the truth has just leaked out of Columbia about the necessity and benefits of natural gas pipelines and how they are helping to LOWER the amount of carbon dioxide in the atmosphere (if you happen to care about such things–which we don’t). How did this happen? Researchers who care about telling the truth and how doing so enhances one’s reputation, have authored the study “Investing in the US Natural Gas Pipeline System to Support Net-Zero Targets” (full copy below).
A new so-called study has appeared sponsored by the radicals at Heinz Endowments. It is bought-and-paid-for “research” that claims the Act 13 law passed in Pennsylvania in 2012 hasn’t done a darned thing to prevent shale wells from being drilled closer than 500 feet from houses and schools. Duke University, Harvard University, and Boston Children’s Hospital took money from Heinz and prostituted themselves, putting their names to this filthy propaganda. Heinz then instructed one of their own, StateImpact Pennsylvania (which Heinz also funds) to publish a “news story” about the study, hoping to catch the interest of leftist, lazy “reporters” (like those at Bloomberg, AP, etc.) to pick up the story and repeat it. This is how news gets manufactured in today’s world.
Cabot Oil & Gas is and has been (for years) one of the premier drillers in the Marcellus Shale. Cabot concentrates their drilling in one location in northeastern Pennsylvania: Susquehanna County. Cabot has lower costs to drill than almost any other driller. They also turn a profit year after year, unlike many other drillers. During 1Q21 Cabot made $126 million in net income, versus $54 million in 1Q20. Yet the company’s stock price continues to languish, something that has CEO Dan Dinges “hacked off.”
Southwestern Energy, a pure-play Marcellus/Utica driller with 786,000 net acres and operations in all three M-U states (concentrates on drilling in WV and northeastern PA) issued its first-quarter 2021 update last Friday. The company made $80 million in net income during 1Q21, versus losing $1.5 billion in 1Q20. Southwestern produced 3 billion cubic feet equivalent per day (Bcfe/d) during 1Q21, of which 2.4 Bcf/d was gas and the rest (103,000 barrels per day) was liquids.
Here’s an interesting lawsuit in Pennsylvania with potential ramifications for both landowners and drillers. In 2013 a landowner in Warren County, PA filed a lawsuit against Mitch-Well Energy claiming the company had abandoned its leases (and its rights) by not producing marketable quantities of natural gas from several conventional wells. The company had also not paid a required annual fee in lieu of production royalties. For 18 years! Several lower courts ruled in favor of the landowner. Last week the PA “Supreme” Court (we use that term loosely) reversed the lower court rulings and said in this case, not producing gas for 18 years and not making any payments to the landowners during that time is not (yet) enough to claim the energy company has abandoned its lease rights.
The experts at RBN Energy continue their series of blog posts about pipelines that flow Marcellus/Utica gas to other regions with a look at two pipelines that connect directly to Canada: Tennessee Gas Pipeline and Empire Pipeline. In this post we learn that natural gas flows from the M-U over this past weekend hit a new record high of 17.3 billion cubic feet per day (Bcf/d). We also learn M-U pipelines flowed an average of 16.7 Bcf/d in April–an all-time high for any month! The problem is we’re now maxed out and need more pipelines.
If the Federal Energy Regulatory Commission (FERC) thinks it is going to change the rules for how it approves existing, already-filed applications for pipelines, it needs to think again. That’s according to a group of both Republican and Democrat U.S. Senators who sent a warning letter to FERC last week. The Senators say FERC has no right to change the rules part of the way through the game, which is exactly what FERC, under Chairman Richard “Dick” Glick, is threatening to do.
Global warming nutters have convinced themselves that in order to prevent a global catastrophe, all fossil fuels (including natural gas) must be abandoned and never used again. It’s a lunatic notion, demonstrably so. The thinking is that hydrogen will replace natural gas and be burned in its place. The nutters further demand hydrogen be produced by “green” methods, namely using electricity from solar and wind to split water into hydrogen and oxygen. The problem is, it’s EXPENSIVE. Prohibitively so. There’s a better solution: Split the hydrogen out of methane (natural gas).
MDN was the only news source to openly criticize Chesapeake Energy CEO Doug Lawler’s purchase of Eagle Ford oil assets in 2018 for $4 billion (see