PA Senate Democrats Introduce New Carbon Tax Bill
What is it with Democrats and the urge to tax everything–even things that breathe? They have a particular fascination with taxing carbon dioxide–the building block of life and the substance every living thing breathes out with every breath. The latest Democrat who wants to tax CO2 is Pennsylvania Senate Minority Leader Jay Costa, Jr. (from Pittsburgh) who introduced Senate Bill (SB) 15. Costa falsely calls it a “cap and invest” plan. In reality and normal plain English, it’s a tax plan–taxing natural gas-fired power plants.
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The experts at RBN Energy have been analyzing pipelines and natural gas flows out of the Marcellus/Utica region and warn of a coming problem this fall. Production in the M-U remains high. Storage is quickly filling up. The gas needs to exit the region in order to fetch better prices. According to RBN, “This fall, the situation could be even worse and may force producers to shut-in gas for a second time this year.” Pipeline constraints are coming, and that spells problems.
It’s been a tough past five months in the shale industry. While it’s been tough in the gas-focused plays like the Marcellus/Utica, it’s been tougher in the oil-focused plays like the Permian. Employment in the O&G space has shrunk, by one account, by some 86,000 jobs. We’re now at the same employment level as we were following the downturn in 2014-2016. “But everyone knows this industry is cyclical. It’ll bounce back again, right?” This time it may be different. According to analyst John Kemp, this time some of the jobs (and companies) leaving the industry will be gone for good…
MARCELLUS/UTICA REGION: EQT donates more than $200,000 to local first responders; National Fuel completes acquisition of Shell’s integrated upstream and midstream assets in Pennsylvania; PA DEP hosting fake webinar August 6 to push Wolf’s carbon tax; Rockwool decides natural gas over coal at Jefferson County plant; Alternative energy, social responsibility in focus for scaled-down Dominion; Governor Cuomo signs legislation regulating oil and gas related waste; Chesapeake Utilities Corporation completes acquisition of Elkton Gas; NATIONAL: Natural gas futures post jaw-dropping 30-cent gain; cash strong too; It’s harder than you think to stop using fossil fuels; The many distortions of the Jones Act; Basis for Biden climate plan challenged by experts; Marathon Petroleum divests Speedway stores.
Cabot Oil & Gas issued its 2Q20 update on Friday. CEO Dan Dinges said natural gas prices hit a historic low in 2Q (lowest since 1995), but he thinks the price will improve “this winter.” Although the price Cabot got for its gas last quarter ($1.52/Mcf) was 33% lower than a year ago, the company still made a profit. Cabot netted $30 million in 2Q, vs. netting $181 million a year ago. The company drilled 14 new shale wells, completed/fracked 31 wells, and placed 25 new wells online last quarter. They produced an average of 2.2 Bcf/d of natural gas.
Southwestern Energy released its 2Q20 update on Friday. The company, with nearly a half-million acres under lease, drills solely in the Marcellus/Utica in two distinct regions: northeastern Pennsylvania and West Virginia. The NEPA operation targets dry gas. WV targets wet gas/NGLs. During 2Q, Southwestern drilled 80% of its new wells in the NEPA dry gas area. Southwestern drilled 30 new wells, completed/fracked 31 wells, and placed 31 wells online to sales last quarter. One of the eye-popping bits of news from the company update is that for one particular well they hit a super-low $505/lateral foot cost to drill the well–the lowest drilling cost we’ve seen by any M-U driller anywhere!
Last year, in an effort to flow more natural gas to a starving New York City, Kinder Morgan cut a deal with utility company Consolidated Edison to provide more gas by beefing up capacity along its Tennessee Gas Pipeline (TGP) that feeds NYC, allowing Con Ed to avoid cutting customers off from natgas hookups (see 
Pennsylvania State Sen. Gene Yaw, Majority Chair of the Senate Environmental Resources and Energy Committee, is hammering ICF International, a consultant hired by the PA Dept. of Environmental Protection (DEP). The DEP has paid $874,000 (so far) to ICF for research relating to “climate change.” ICF is providing research used by the DEP to justify Gov. Wolf’s harebrained idea to join the Regional Greenhouse Gas Initiative (RGGI), a carbon tax scheme meant to drive natgas electric plants out of existence in the state. All in the name of saving Mom Earth. Ludicrous. ICF, supposedly impartial, appears to be anything but according to Yaw.
The dirty deed is finally done. It now officially costs more for a new shale permit to drill in Pennsylvania than in any other state in the country. In Ohio, it costs drillers $5,500 to file for and receive a permit to drill a new shale well. In West Virginia, the cost is $10,150. In Pennsylvania, it used to cost drillers $5,000 for a new shale well permit. As of Saturday, the price went up 250% to $12,500.
Antero Resources issued its 2Q20 update yesterday. Even though the company averaged a sales price of $2.81/Mcf (thousand cubic feet) for natural gas it sold last quarter by using hedging (at a time when the price has been bumping around $1.70/Mcf), low gas prices clobbered the company. Antero saw a net loss of $463 million for the quarter. However, the company did set a new onshore drilling record for the longest well drilled in a 24-hour period–11,253 lateral feet drilled in 24 hours.
CNX Resources issued its 2Q20 update yesterday. The company reports a $146 million net loss. Production in 2Q20 was 114.5 Bcfe (billion cubic feet equivalent), down from 134.5 Bcfe in 2Q19 due to curtailments. Average daily production in 2Q was 1.26 Bcf/d (billion cubic feet per day), down from 1.35 Bcf/d a year earlier. The company shut-in some of its production due to COVID and low prices. They will restore all shut-in production by November.
Over a year ago, in March 2019, MDN told you about a new Williams plan to beef up the Transco pipeline in Pennsylvania and New Jersey to deliver an extra 760 MMcf/d (originally 1 billion cubic feet per day) of Marcellus gas to PA, NJ, and Maryland (see 
