Facts & Rumors # 569
September 28, 2024
Toby Rice – AI Will Increase NatGas Demand. Data centers for artificial intelligence will comprise the biggest addition to US natural gas demand in coming years, according to the boss of the EQT Corp., the country’s largest producer of the fossil fuel.
US consumption has already soared over the past decade. Gas became the No. 1 power plant fuel after generators switched from coal, a dirtier source of energy. The start-up of export facilities on the Gulf Coast also added major new customers outside the US.
But AI may deliver a more sudden and dramatic jolt to US energy markets. The immense scale of the power needed to run planned data centers that train or execute AI capabilities has become a major narrative for both the energy and tech industries this year. The extent of tech companies’ needs was highlighted last week when Microsoft struck an unprecedented two-decade deal to purchase electricity from a restarted Three Mile Island nuclear plant in Pennsylvania.
AI-related electricity demand is expected to translate to between 6 billion to 13 billion cubic feet of gas a day in the short term, Toby Rice, EQT’s chief executive officer, said Tuesday. That compares with current total US consumption of just over 100 billion cubic feet a day.
Rice says EQT can tap new customers in Virginia, the hottest data center market in country. His company’s Mountain Valley Pipeline went into service earlier this year, bringing gas from the Marcellus shale basin into the state, a favored location for tech companies like Amazon.
He sees similar opportunities in the southeast of the country, and added that tech companies are also looking nearer to EQT’s home town of Pittsburgh as well as Ohio and West Virginia. The region already has power-related infrastructure.
“People are looking for gigawatt-type scale footprints,” Rice said in an interview in New York. “We’ve got a lot of these retired coal facilities that have existing electric infrastructure already built. You just need to put in the power plant, switch that coal with natural gas and it could be a faster opportunity.”
For all the transformative talk surrounding AI and energy, US gas prices have been subdued over the past two years. Current benchmark gas futures trade at around $2.50 per million British thermal units.
Toby Rice’s NatGas Price Perspective. EQT CEO sees natural gas prices remaining below $3/mmBtu. Reuters. The CEO of U.S. natural gas producer EQT Corp on Wednesday said U.S. prices for the fuel will remain below $3 per million British thermal units in the short term. As prices fell to multi-year lows earlier this year, EQT curtailed 1 billion cubic feet per day (bcfd) of its gas output. Several rival U.S. shale gas producers also cut drilling to stem over production.
OH Drought Could Cause Problems for Frack Water. Ohio drought renews worries about massive use of water for fracking. Columbus Dispatch. The driest summer in more than a decade prompted an Ohio watershed district this summer to take the unprecedented step of limiting the use of water for oil and gas fracking. The restrictions applied only to Atwood Lake, a popular boating and fishing spot southeast of Canton that has experienced a foot and a half drop in water levels over the past few months of drought.
EQT to Resume Some Drilling. Thanks, MDN. MDN brought you the news that the largest natural gas producer in the country, EQT Corporation, totally focused on drilling in the Marcellus/Utica, was still curtailing (intentionally reducing) some of its M-U production through the second half of 2024. A number of other M-U producers, BIG producers, also announced curtailments this year, including Chesapeake Energy and Coterra Energy. EQT CEO Toby Rice told Reuters yesterday that his company will begin to restore some of the curtailed volumes starting in October.
NatGas Critical to Reshoring Manufacturing. Natural gas must be top of mind for policymakers when discussing reshoring manufacturing, according to a new report from the Center for Strategic and International Studies (CSIS). Exponential growth in semiconductors and electric vehicles (EVs) demand has led to a renewed effort to invest in U.S. based manufacturing. In their report, CSIS, with the support of the American Gas Foundation, explores this reshoring of manufacturing and how U.S. natural gas can provide dispatchable, cost-efficient energy for manufacturing in a carbon-competitive world. Spending across sectors of computer and electrical manufacturing facilities has increased nearly four times since 2022. The report explains: “By April 2024, project announcements reached $367.9 billion for semiconductor manufacturing and $84.4 billion for EV manufacturing. These industries now account for nearly 60 percent of all manufacturing investment in the United States.” The reasons behind this increased domestic investment are multifaceted with many companies looking to diversify their supply chains from East Asia, automakers responding to increased EV demand, as well as federal government initiatives including the, Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act and the Inflation Reduction Act, which provide incentives for semiconductor and EV projects. Overall: “The Biden administration aims for the United States to produce 20 percent of global leading-edge logic chips and for EVs to comprise 50 percent of new vehicle sales by 2030.” This, of course, means new and reshored manufacturing stateside.
NERC Concerned about NatGas Supplies. In a statement issued last week, the North American Electric Reliability Corporation (NERC) said it “remains concerned about maintaining sufficient natural gas supplies to address extreme winter conditions” for this upcoming winter heating season. In a “Statement on Criticality of Natural Gas this Winter” (full copy below), NERC noted that next month marks the one-year anniversary of the FERC/NERC/Regional Entity staff report on Winter Storm Elliott—a wide-area extreme cold event that affected states in the Eastern Interconnection from Georgia to Maine and from Nebraska to Pennsylvania. The primary cause of that almost-outage was, says NERC and the report, reduced production (freezeoffs) at Marcellus/Utica wells.
CNX Report Shows “No Public Health Threat” Thanks, MDN. CNX Resources released its first Radical Transparency™ assessment report in August (see Independent Monitoring of CNX Ops Shows No Public Health Threat). The initial results of nine months of continuous air emissions monitoring at natural gas well sites and compressor stations in southwestern Pennsylvania indicate that CNX natural gas development poses no public health risk. Period. The data is collected and disseminated to the public by an independent third-party contractor. This is objective you-can’t-argue-with-it data and shows CNX is not causing any kind of public health hazard. Big Green is apoplectic that their lying narratives are now countered by objective (truthful) data and is attempting to smear CNX and its objective data.
Outlook Dims for Oil and NatGas Activity Oil and gas activity edges lower as outlooks dim, uncertainty rises. Federal Reserve Bank of Dallas. Activity in the oil and gas sector declined slightly in third quarter 2024, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index decreased from 12.5 in the second quarter to -5.9 in the third quarter. The business activity index was 0 for exploration and production (E&P) firms compared with -18.1 for services firms, suggesting activity was unchanged for E&P firms but declined for service firms. The oil production index increased from 1.1 in the second quarter to 7.9 in the third quarter, suggesting oil production slightly increased in the quarter. Meanwhile, the natural gas production index declined from 2.3 to -13.3, suggesting natural gas production decreased in the quarter. Also covered by Dallas Morning News, E&E News and Reuters.
European Methane Regs Will Hurt U.S. LNG. Thanks, MDN. The European Union’s idiotic methane regulations will soon come into full force, prompting oil, gas, and coal companies to monitor, measure and report their emissions. The same restrictions will also apply to energy imports coming from other countries, including the U.S. (see Europeans Presume to Impose Their Regulations on American Gas). The arrogant Europeans presume to tell us that we must follow *their* regulations! To which we say (multiple expletives deleted). Even though the new regs are not in full force until next May, the regs are already having an effect on U.S. companies, including drillers.
EPA Learns 89.9% Say “False.” Thanks, MDN. Our friend Tom Shepstone, over at the Energy Security and Freedom Substack website, has a great post today about a Twitter (now called X) poll conducted by the federal Environmental Protection Agency (EPA). The EPA is a big pusher of the mankind-is-causing-catastrophic-global-warming hoax. This is soooo funny. Tom noticed the EPA had published a “Climate Week Quiz” asking the following question: True or False: Humans are the dominant cause of climate change. We can’t stop laughing because 89.9% of the 15,908 votes cast (as of this morning) say FALSE.
White Hawk Makes Marcellus Purchase It’s a shale play where Oklahoma City’s Chesapeake Energy also has operations. The natural gas mineral and royalty assets acquired by WhiteHawk Energy are across southwestern Pennsylvania and northern West Virginia and expands the company’s holdings to more than 1 million acres and nearly 3,400 producing wells in the U.S. areas of operation.
WhiteHawk said the acquisition expands its core Marcellus position to include top-tier operator Antero Resources Corporation alongside additional mineral and royalty interests operated by EQT Corporation, Range Resources Corporation and CNX Resources Corporation. Inclusive of the acquired assets, WhiteHawk owns natural gas mineral and royalty interests across approximately 1,050,000 gross unit acres and over 3,400 producing wells.
PA Permits September 16, to September 26, 2024
County Township E&P Companies
1. Armstrong Boggs Snyder Bros.
2. Greene Jefferson EQT
3. Greene Jefferson EQT
4. Greene Jefferson EQT
5. Greene Jefferson EQT
6. Greene Jefferson EQT
7. Susquehanna Auburn Coterra
8. Susquehanna Auburn Coterra
9. Washington Chartiers Range
OH September 8, 2024 to September 14, 2024
County Township E&P Companies
1. Harrison Short Creek Ascent
2. Harrison Short Creek Ascent
3. Guernsey Richland INR
4. Monroe Sunbury SWN
5. Monroe Sunbury SWN
6. Monroe Sunbury SWN
7. Monroe Sunbury SWN
WV Permits September 16, to September 20, 2024
1. Monongalia Northeast Nat. Res.
2. Monongalia Northeast Nat. Res
3. Monongalia Northeast Nat. Res.
