Making the Case for ESG and So-Called Net Zero Emissions in Shale
We’ve made no bones about the fact we’re dubious of most so-called ESG (environmental, social, governance) initiatives by any company, including shale oil and gas drillers. But there are many in our industry who have (seemingly overnight) embraced ESG with open arms. One of them is the chairman of the board for DJ Basin producer Civitas/managing partner at the Kimmeridge Energy Management, Ben Dell. Dell presents a vision of the shale energy future like this: There are 10-15 shale drillers nationwide, and every one of them is operating with net zero carbon emissions. What may sound like nirvana to Dell sounds like dystopia to us.
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We recently spotted an article in the Wall Street Journal about the prospect of combining horizontal drilling and hydraulic fracturing (collectively called “fracking”) with geothermal energy. The article claims fracking could be used to generate energy with “no carbon emissions.” Green nirvana! At last!! But is this really possible? Is it actually economical? Let’s take a closer look.
OTHER U.S. REGIONS: Berkeley’s ban on natural gas in new buildings upheld by federal judge; NATIONAL: Oil prices snap losing streak; U.S. shale on track for one of its best years ever; Solving the plastic shortage with a new chemical catalyst.
Consumers Energy, Michigan’s second-largest power provider, will quit burning coal to produce electricity by 2025 and instead will purchase four existing natural gas-fired power plants for $1.3 billion. At least if the company can get approval from state regulators. The company says buying existing gas-fired plants (instead of building new plants) will help it transition to carbonless energy over the next 20 years. Buying instead of building means the company won’t have “stranded assets” when (we say if) they eventually foreswear using fossil fuels to generate electricity.
Back in January MDN told you that UGI Corporation, one of Pennsylvania’s largest natural gas utility companies, wants to buy Mountaineer Gas Company, one of West Virginia’s largest natural gas utility companies, for $540 million (see 
Last week MDN told you that Detroit-based utility company DTE Energy was about to spin off its pipeline assets into a new/separate company called DT Midstream (see 
Last week MDN told you about an unplanned outage at two MarkWest natural gas processing plants located in West Virginia (see 
Diversified Energy (née Diversified Gas & Oil) continues to expand *outside* of the Marcellus/Utica region. In April the company announced it had purchased ~780 net operated wells and leases in the Cotton Valley/Haynesville region of Lousiana for $135 million (see 
Patterson-UTI Energy, which operates 15 active rigs in the Marcellus/Utica (out of 45 active M-U rigs, or fully one-third of all active M-U rigs) announced yesterday it is buying a smaller competitor, Pioneer Energy Services Corp., for approximately $295 million. Patterson will add Pioneer’s fleet of 16 super-spec drilling rigs to Patterson’s own current fleet of 150 super-spec drilling rigs in the U.S. What are super-spec rigs?
The natural gas markets just made a bit of history. Friday, July 2nd, marked the last day in a series of nine days that the NYMEX futures price for natural gas increased from the previous day. Beginning Monday the price has slide down just a bit. Nine straight trading days of higher natgas prices is the longest period of day-over-day price rises in the past 20 years! The weather certainly had a lot to do with the increase in prices, but a key part, perhaps the starring role in why prices have continued to climb, is the role of LNG exports.
All three Marcellus/Utica states received permits to drill new shale wells last week. Pennsylvania issued 12 new permits, 7 of them in the northeast PA dry gas region and 5 in the southwest wet gas region. Ohio issued 3 new permits, all of them for the same driller in Carroll County. (The Ohio driller is brand new!) And West Virginia issued 6 new permits with 5 of the 6 going to Antero Resources.