Facts & Rumors # 566
September 7, 2024
AI to Cut Shale Costs by 30%. AI expected to dampen oil prices over next decade, Goldman says. Bloomberg. Artificial intelligence will ultimately help drive down oil prices over the next decade as improved US shale output outweighs better oil demand, according to Goldman Sachs Group Inc. The bank forecasts a 30% cut to shale costs thanks to AI during the period while delivering a modest boost to long-run oil demand, analysts including Callum Bruce wrote this week in a note to investors.
Gasoline Shortage?? U.S. refiner warns of looming capacity shortage. Oil Price. A refining capacity shortage is looming globally and could materialize as soon as next year, the chief executive of Phillips 66 told Bloomberg in an interview. The potential shortage would be triggered by capacity shutdowns, Mark Lashier said, as some refiners succumb to low refining margins. The closures could take 700,000 bpd off the market, he added. “The US has become very competitive in refining,” Lashier said. “We’re able to compete out in the world global markets.”
Williams Has Big Pipeline Plans for 2025 and beyond. Thanks, MDN. The CEO of midstream giant Williams, Alan Armstrong, spoke at the Barclays CEO Energy-Power Conference yesterday. He gave conference attendees an update on the many (many!) projects Williams has recently completed, is currently completing, and is likely to complete in the future. The company is on track, said Armstrong, to add 12 new pipeline projects representing about 4.2 billion cubic feet per day (Bcf/d) of capacity from 2024-2027. Looking further out, the company said it has about 30 projects under development, representing about 11.5 Bcf/d of capacity from 2028-2032. That’s a staggering 15.7 Bcf/d of new capacity coming online from this one company. How much of it is in the Marcellus/Utica?
EOG Continues to Ramp Up in OH. EOG to ramp up activity in Utica shale play in Ohio, company says. Reuters. Houston-based shale producer EOG Resources expects to ramp up operations in the Utica shale play in Ohio, Chief Operating Officer Jeff Leitzell told attendees at the Barclays CEO Energy-Power Conference in New York on Tuesday. EOG Resources has doubled its activity in the Utica year-on-year, operating on 445,000 acres with an average entry cost of around $600 per acre, Leitzell said.
EOG set to add to Ohio Utica spending. Oil & Gas Journal. The company’s delineation and spacing work continues to produce strong results. ‘It absolutely has the opportunity to be a foundational play,’ a senior executive says.
North American LNG Export to Double by 2028. North America’s LNG export capacity is on track to more than double by 2028. Energy Information Administration. North America’s liquefied natural gas (LNG) export capacity is on track to more than double between 2024 and 2028, from 11.4 billion cubic feet per day (Bcf/d) in 2023 to 24.4 Bcf/d in 2028, if projects currently under construction begin operations as planned. During this time, we expect developers in Mexico and Canada to place their first LNG export terminals into service and in the United States to add to existing LNG capacity. By the end of 2028, we estimate LNG export capacity will grow by 0.8 Bcf/d in Mexico, 2.5 Bcf/d in Canada, and 9.7 Bcf/d in the United States from a total of 10 new projects that are currently under construction in the three countries.
O&G Continues to Reduce Methane. Reports: U.S. oil and gas industry continues to reduce methane emissions. Center Square. “The Environmental Partnership’s member companies have proven, once again, that collaboration, innovation and commitment to a shared goal of reducing emissions are achieving meaningful and lasting environmental results,” TXOGA president Todd Staples said. “Through the Partnership as well as other industry-led collaborative efforts such as the Texas Methane & Flaring Commission and the Texas Seismicity & Water Partnership, the Texas oil and natural gas industry is protecting and improving the environment.”
Permian Producers Have Negative NatGas Problems. Permian producers struggle with negative gas prices. Oil Price. While oil and gas producers in the Permian Basin are undoubtedly concerned about gas prices, their response to economic forces, particularly in the gas market, has been limited. Oil remains the dominant revenue stream in the Permian, leading operators to prioritize oil operations that create an abundance of associated natural gas. Gas prices at the Waha Hub have suffered greatly in 2024 as gas production continually tests available outbound capacity.
Permian Basin May Get Four New Power Plants. Midland Reporter Telegram. “The Permian Basin has a built-in customer base ready to go,” Todd Staples, president of the Texas Oil and Gas Association, told the Reporter-Telegram in a telephone interview. He broke that customer base into two parts: Oil and gas companies who need the electricity as they convert their drilling rigs, frac spreads and other equipment from generation to electric power and non-oil and gas customers.
CO2 Storage Coming to TX. EPA proposes first-of-a-kind CO2 storage permits in Texas. E&E News. Texas is a step closer to injecting carbon into deep rock formations for permanent storage, after EPA issued the first draft Class VI permits in the state. EPA published three draft permits Wednesday for an Occidental Petroleum project that would inject carbon dioxide more than 4,000 feet underground in the heart of the energy-rich Permian Basin. The wells are tied to the oil company’s Stratos facility, a direct air capture plant that aims to pull 500,000 metric tons of CO2 out of the atmosphere each year.
Texas Matterhorn NatGas Pipe Moving Some Gas. Reuters. The Matterhorn natural gas pipeline in Texas was moving small amounts of gas from the Permian basin in West Texas toward the Gulf Coast, executives at U.S. energy company Permian Resources (PR.N), said at the Barclays CEO Energy-Power Conference earlier this week. The Matterhorn is the biggest gas pipe under construction that is capable of moving gas that has been trapped in the Permian basin, causing prices at the Waha Hub in West Texas to turn negative a record number of times this year.
Exxon Seeks to Sell Permian Assets for $1 billion. Exxon seeks to sell conventional Permian assets for $1 billion. Bloomberg. Exxon Mobil Corp. is looking to sell a package of conventional oil assets in the Permian Basin as the company focuses on growing shale production after buying Pioneer Natural Resources Co. earlier this year. The package includes older wells in the Permian’s Central Basin that produce small but stable amounts of oil, according to people familiar with the matter who declined to be named because sale negotiations are private.
Exxon Partners with Abu Dhabi. Exxon, Abu Dhabi’s ADNOC to partner in delayed Texas hydrogen project. Reuters. Abu Dhabi National Oil Company (ADNOC) will acquire a 35% equity stake in Exxon Mobil Corp’s, proposed low-carbon hydrogen project in Texas, with the companies announcing a one-year start-up delay until 2029. ADNOC’s investment shows a sign of confidence in a multi-billion-dollar project that Exxon has threatened to cancel if the U.S. government restricts tax credits for it. A final investment decision has been pushed into 2025, from 2024.
Phillips 66 Divests NatGas Assets. Phillips 66 divests natural gas assets in Texas to Voyager Midstream. Offshore Technology. US oil refiner Phillips 66 has divested its natural gas gathering and processing assets in east Texas to Voyager Midstream, which is backed by Pearl Energy Investments. Financial terms of the deal were not disclosed. The sale forms part of Phillips 66’s strategy to monetize non-core assets and streamline operations. A company spokesperson was quoted by news agency Reuters as saying: “This transaction with Voyager Midstream Holdings is part of our plan to monetize non-core assets that are expected to generate over $3bn in proceeds that will be deployed to further our strategic priorities.”
Underinvestment in Gas Could “Jeopardize Global Energy Supply” – IGU
September 3rd, 2024
Rising global power demand underscores the dire need to scale up investments in natural gas, the International Gas Union (IGU)’s 2024 Global Gas Report stresses, noting the world could risk a 22% global supply shortfall by 2030.
The surge in electricity needs, driven primarily by technology advancements, has heightened the call for more efficient, yet still affordable, energy on the global market. Enhanced natural gas investments are critical “to contain the growth of greenhouse gas emissions and to make global gas market equilibrium resilient,” the IGU states.
Already producing nearly 20% of the U.S.’s natural gas, tapping Pennsylvania’s energy abundance would help address the expected shortfall while also providing enhanced reliability and sustainability.
IGU’s report serves as a warning and comes as a hot summer has further strained the electric grid in the U.S., leading to power outages and escalating consumer costs. Just last week, the regional grid operator PJM issued a maximum generation alert, requiring power generators to run at maximum output to avoid disruptions as a heat wave blanketed the Mid-Atlantic region.
Across the entire PJM operating area, 89% of baseload power came from natural gas, nuclear and coal on one of the hottest days in the past month, underscoring the reality that consumers continue to depend upon reliable, abundant baseload power generation each and every day.
Natural gas from Pennsylvania is the backbone of PJM’s electric generation capacity, where the 13-states and the District of Columbia are dependent upon the Commonwealth to keep the lights – and the AC – running.
“Pennsylvania generates roughly one-third of the electricity produced in PJM, which means it directly powers about 7% of the country’s GDP,” a recent report from Pittsburgh Works pointed out.
Consumers a few hundred miles north of Pennsylvania, however, are deprived of the cost, reliability and environmental benefits provided by American produced natural gas. Government mandated “renewable-only” energy policies have constrained the New England region’s power market, and they are forced to rely on expensive natural gas imports from Trinidad and Tobago and elsewhere for energy needs. As the U.S. Energy Information Administration (EIA) reported this week, the area once again found themselves relying upon imports from other nations to keep the electricity on during another heat wave in June.
New England’s natural gas-fired electricity generation peaked at 61% on June 22, clearly demonstrating the domestic demand for a reliable and easily dispatchable fuel source in times of peak demand.
New England’s woes reaffirm warnings PJM issued back in the spring: “The future demand for electricity cannot be met simply through renewables given their intermittent nature.”
As energy consumption grows and the need for grid reliability increases, expanding the natural gas power generation infrastructure is crucial to ensure reliable and cost-effective electricity to consumers. Natural gas power plants, especially those utilizing modern combined cycle technology, deliver substantial benefits by converting fuel into electricity with high efficiency and significantly reduced emissions. These facilities implement both gas and steam turbines to improve energy production, enabling them to meet peak demand and guarantee a stable power supply.
By attracting the development of more natural gas-powered facilities, Pennsylvania can further its role in the energy economy while enhancing America’s energy security.
Moreover, harnessing the state’s natural gas resources aligns with the broader goal of meeting ever-increasing global energy demand while advancing toward a cleaner, more sustainable energy future. Equally as important, Pennsylvania can help provide these solutions to allies and trading partners across the globe.
U.S. LNG can be transported where pipelines are not feasible, addressing energy supply constraints in emerging and remote areas of the world, but also in areas with limited access to reliable energy. Investing in natural gas infrastructure, including LNG terminals and distribution networks, not only supports economic growth and job creation, but also enhances America’s role in providing global energy security. Expanding LNG export and import facilities, developing efficient transportation networks, and supporting research and innovation in technologies are essential steps in this endeavor.
Our world’s increasing energy demand – which shows no signs of slowing down – necessitates a strategic, forward-thinking approach in which natural gas plays a key role. By promoting policies that boost interstate and intrastate pipeline infrastructure and technology, we can address today’s energy needs and lay the groundwork for a more sustainable and secure energy future.
PA Permits August 19, to September 5, 2024
County Township E&P Companies
1. Bradford Monroe Chesapeake
2. Bradford Monroe Chesapeake
3. Bradford Monroe Chesapeake
4. Bradford Monroe Chesapeake
5. Bradford Monroe Chesapeake
6. Bradford Monroe Chesapeake
7. Butler Jackson PennEnergy
8. Greene Franklin Rice
9. Greene Franklin Rice
10. Greene Franklin Rice
11. Greene Franklin Rice
12. Greene Franklin Rice
13. Greene Franklin Rice
14. Greene Franklin Rice
15. Greene Franklin Rice
16. Greene Franklin Rice
17. Greene Morris EQT
18. Greene Wayne EQT
19. Lycoming Lewis Seneca
20. Lycoming Lewis Seneca
21. Lycoming Lewis Seneca
22. Lycoming Lewis Seneca
23. Susquehanna Auburn Coterra
24. Susquehanna Auburn Coterra
25. Susquehanna Auburn Coterra
26. Susquehanna Auburn Coterra
27. Susquehanna Auburn Coterra
28. Tioga Delmar Seneca
29. Westmoreland Penn Olympus
30. Westmoreland Penn Olympus
31. Westmoreland Penn Olympus
32. Westmoreland Washington CNX
33. Westmoreland Washington CNX
34. Westmoreland Washington CNX
OH Permits August 18, to August 31, 2024
County Township E&P Companies
1. Carroll Center EOG
2. Guernsey Madison Ascent
3. Guernsey Madison Ascent
4. Noble Seneca Ascent
5. Noble Seneca Ascent
6. Harrison Monroe EAP OHIO
7. Harrison Monroe EAP OHIO
8. Harrison Monroe EAP OHIO
9. Harrison Monroe EAP OHIO
WV Permits August 19, to August 30, 2024
1. Marshall SWN
2. Marshall SWN
3. Marshall SWN
4. Monongalia Northeast Nat En.
5. Monongalia Northeast Nat En.
6. Monongalia Northeast Nat En.
7. Monongalia Northeast Nat En.
8. Monongalia Northeast Nat En.
9. Ohio SWN
10. Wetzel Antero
11. Wetzel Antero
12. Wetzel Antero
13. Wetzel Antero
