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COVID Impact on PA Landowners: Low Royalties, Lease Expirations
The Washington & Jefferson College Center for Energy Policy and Management (Washington, PA) is hosting a free webinar series on “Effects of COVID-19 and the Economic Downturn on Western Pennsylvania Shale Gas Development” during June and July. Two of the three sessions have already been held, including a session yesterday that discussed the impacts of COVID-19 on landowners who have leased their land for shale drilling. According to the speaker, there have been two notable effects of the virus for landowners: lower royalties and drillers not renewing leases (allowing leases to expire).
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In March 2019 natural gas utility Consolidated Edison, which supplies Manhattan, the Bronx and most of Westchester County, slapped a moratorium on new natural gas customers from hooking up to the grid in Westchester due to lack of gas supplies (see 
EdgeMarc Energy, headquartered in Canonsburg, PA (once with 50,000 acres of Marcellus/Utica leases), filed for Chapter 11 bankruptcy in May 2019, looking to sell all of the company’s assets (see 
Yesterday the Pennsylvania Senate Environmental Resources and Energy Committee held a virtual hearing on Gov. Wolf’s plan to bypass the state legislature and force the state to join the so-called Regional Greenhouse Gas Initiative (RGGI), a group of northeastern states attempting to assassinate coal and gas-fired power generation by taxing it to death with an insane carbon tax (see 
There were 16 new permits issued in PA for shale drilling June 15-19. There were 7 new permits issued in OH for shale drilling during the same time period. There was 1 new permit issued in WV for shale drilling last week.
As we have been saying for some time, LNG exports from the U.S. are low and staying low for at least a few more months (see 
MARCELLUS/UTICA REGION: Economic reopening: Manufacturing opportunities for Pennsylvania; Small group of antis launch website to oppose Wyalusing LNG export plant; Southwest Pa.’s energy dominance can help counter China; OTHER U.S. REGIONS: Cryptocurrency mining company eyes flared gas in Permian Basin; NATIONAL: Poll: Young voters see natural gas as critical to U.S. economy; Oil prices continue their rise, albeit slowly, since April’s crash; INTERNATIONAL: Vatican calls for carbon tax, investing in alternative energy; Global gas production set to tumble in 2020; Al Gore and the post-pandemic green dictatorship.
Last December Chevron announced it was writing down over $10 billion worth of its U.S. onshore shale assets, with $6.5 billion of that number coming from its Marcellus/Utica assets. Also in December, the company posted for sale ALL of their M-U assets (see 
Last October PA Gov. Tom Wolf, in a naked power-grab, said he would try to force PA to join the so-called Regional Greenhouse Gas Initiative (RGGI), a group of northeastern states attempting to assassinate coal and gas-fired power generation by taxing it to death with an insane carbon tax (see 
In March a worker hired to x-ray welds on sections of the Mariner East 2 pipeline in southwestern Pennsylvania was charged with falsifying records–that he falsely claimed to have performed work when he didn’t (see 
Coincidentally we have a second story today about pipe welding inspectors. In another post, we tell you about a pipeline welding inspector who falsified records (see ME2 Pipe Worker in SWPA Admits Falsifying Welding Records 77 Times), which is very much the exception and not the rule. In this second story, an inspector who worked for Equitrans Midstream has filed what he hopes will become a class action lawsuit against the Equitrans, claiming he and others were jilted out of overtime pay.
The received wisdom has been that with the oil markets getting whacked by the Saudis, the Russians, and the virus, and with new drilling scaled back and oil wells in the Permian, Bakken, Eagle Ford and other oil plays being shut-in, far less “associated gas” would be produced, leading to tighter natgas supplies further leading to higher prices for natgas (benefitting the Marcellus/Utica). But the price of natgas has remained at a 25-year low. What the heck is going on?
Each quarter the Ohio Dept. of Natural Resources (ODNR) issues an update on Utica (and Marcellus) oil and natural gas production. Until the recent blowup of the ODNR website (still only partially restored) ODNR would issue a detailed list of all active wells with production by well. No more. That report is missing from the latest quarterly high-level update from ODNR covering first quarter 2020 numbers. What we can tell you, based on the information that has been released, is that production between 4Q19 and 1Q20 was down significantly.
Equitrans Midstream’s 303-mile Mountain Valley Pipeline (MVP) project is now 92% complete and will be done and online in early 2021 (see