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M-U Drillers Increasingly Shut-In Wells to Boost Gas Price, Profits
By now it’s a cliche to say that 2020 has been an exceptional year–and not in a good way. For the first time in our memory of writing MDN, we witnessed widespread curtailments or “shut-ins” of wells in the Marcellus/Utica during 2020. That is, drillers voluntarily turned the values off and flowed less gas in a bid to (a) not sell the gas at prices that don’t return a profit, and (b) drive up the price of gas (see M-U Shut-ins Help Keep Regional Gas Prices Stable…for Now). Will that trend continue in 2021?
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Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), published our favorite monthly report, the Drilling Productivity Report (DPR). The latest DPR, which shows estimates for oil and gas production from the seven largest shale plays in the U.S., shows a drop in shale gas production across all plays (including the Marcellus/Utica)–except for a slight production increase in the Haynesville–coming next month in January. The M-U is forecast to drop another 154 million cubic feet per day (MMcf/d) from production levels in December.
Each year S&P Global Platts hosts its “Global Energy Outlook Forum” in New York City, an event we always look forward to attending. The Forum assembles some of the best thinkers and industry participants from across all energy sectors to discuss what happened during the previous year, and what’s on the way next year and down the road with respect to energy. All kinds of energy. This year, given COVID-19, there was no Forum. However, Platts did release its 2021 Energy Outlook yesterday.
UGI Corporation, which operates natural gas and electric utilities in Pennsylvania and midstream (pipeline) assets in Pennsylvania, Ohio, and West Virginia, has just become the newest member of Our Nation’s Energy Future (
OTHER U.S. REGIONS: Calcasieu Pass LNG project ahead of schedule, CEO says; NATIONAL: The Stealth Green New Deal; Flexible cement is made to fill the fine gaps around leaky gas wells; Biden eyes new EPA picks as Nichols falls from favor; Federal Reserve steps up climate-change response, backlash from House Republicans; North Face joins growing corporate hypocrisy against oil & gas industry; INTERNATIONAL: Bombshell report pours cold water on global LNG outlook.
The U.S. Forest Service (USFS) issued an environmental impact statement (EIS) on Friday that supports plans for Mountain Valley Pipeline (MVP) to run through 3.5 miles of woodlands, and under the Appalachian Trail, in the Jefferson National Forest in Monroe County in West Virginia, in and Giles and Montgomery counties in Virginia. This is one of the few items remaining on the MVP checklist before completing the project which is already 92% built and in the ground.
We’re coining a new phrase here on MDN today: Marcellus-to-Marijuana, or M2M. (We’re trying not to giggle as we write this.) A “medical marijuana” facility in Perry County, PA (pot growing plant in MDN vernacular) will receive liquefied natural gas (LNG) beginning next year. There are no in-the-ground pipelines in the area, so the production plant, located in the Perry Innovation Park (near Harrisburg), will begin receiving PA Marcellus gas in the form of LNG next year delivered by tractor-trailers–a “virtual pipeline.”
Energy Transfer’s (ET) Revolution Pipeline runs through Bulter, Beaver, Allegheny, and Washington counties in southwest PA. The 24-inch gathering pipeline shifted and exploded in September 2018, just as it was entering service (see 
There is an ongoing question of whether or not the Ohio Marketable Titles Act (MTA), which impacts Utica shale rights, can be used to return previously severed mineral rights back to a surface landowner, or whether the MTA is superseded by the Ohio Dormant Minerals Act (DMA). In February 2019, Ohio’s Seventh District Court of Appeals said the MTA *does* still apply to mineral rights. The Seventh Circuit then ruled in a second case in April 2019, reaffirming yet again that yes, MTA applies to mineral rights. The Seventh Circuit ruled in a third case in October 2019 to say YES, the MTA still applies. In April, the Ohio Supreme Court agreed to hear and rule on the matter too (see 
In 2018 Kimberly-Clark announced the company would build a Marcellus gas-fired electric plant in Delaware County (near Philadelphia) to power its plant that manufactures Scott 1000 toilet paper (see 
A long-stalled request for permits to build two wastewater injection wells in Belmont County, Ohio has just gotten a boost from the Ohio Supreme Court. Last year MDN told you about New Jersey-based Omni Energy Group and their application to build two new injection wells near St. Clairsville (see 
This is rich. The Pennsylvania Dept. of Environmental Protection (DEP) took its sweet time reviewing a permit application to drill a series of Marcellus Shale wells on the property of U.S. Steel Corp.’s Edgar Thomson steel mill. Because the DEP delayed its review for so long, in October the East Pittsburgh Borough Zoning Board revoked a local permit previously granted for the project in 2017 (see