The following Shale Directories Members are OPEN for BUSINESS during COVID-19 related shutdown.*
Support them when and how you can!
Allison Crane & Rigging
American Energy Fabrication
EJ Breneman, L.L.C.
Frontier Group of Companies
Furbay Electric, Oil & Gas Division
Green Valley Seed
HYTORC Penn Ohio
Inland Tarp and Liner
MJ Painting Contractor Corp.
Mansfield Crane Service
Marshall County Co-Op – Southern States
NAI Ohio River Corridor
Oglebay Resort and Conference Center
Skycasters Converged Wireless
Zimmerman Steel and Supply Company, Inc.
*list subject to change
Shale Directories Conferences
8th Annual Utica Downstream
New Date January 21, 2021
New Location: Holiday Inn Belden Village
8th Annual Upstream PA 2020
New Date: February 4, 2021
Toftrees Golf Resort
State College, PA
Latest facts and two rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Great Recognition for PTTGCA. GC, the Bangkok-based parent company of PTTGC America, has been recognized for its efforts around environmental protection by two prominent international organizations. The Dow Jones Sustainability Index (DJSI) has rated GC No. 1 in the world for sustainability in the chemicals sector for the second consecutive year in a row and ranked GC among the top 10 companies in the DJSI World Indices and DJSI Emerging Markets Index for the eighth consecutive year. GC is also the first and only Thai-owned conglomerate to achieve the highest score in the 2020 annual environmental disclosure of the Carbon Disclosure Project (CDP). GC was awarded the leadership level top “A” grade for best-practice initiatives in both climate change and water security in CDP’s prestigious corporate sustainability standards.
The DJSI was jointly established by the S&P Dow Jones Indices and the SAM Corporate Sustainability Assessment and serves as an index to evaluate expertise in sustainable development of leading globally listed companies. CDP, a nonprofit organization recognized as the largest online data source for greenhouse gases, uses a scoring methodology ranging from A to D-; the average score for companies in Asia and for chemical companies is D. GC is Thailand’s first and only company to have received a score of A in the assessment. The CDP and DJSI rankings reflect GC’s commitment to applying a sustainable approach to driving its business by balancing three dimensions: the economy, environment and society under its principles of good corporate governance.
GC CEO Dr. Kongkrapan Intarajang said that the company is committed to operating as a sustainable organization and taking on a pivotal role in mitigating the impacts of climate change while transitioning to a low-carbon community in support of the Paris Agreement and the United Nations Sustainable Development Goals. GC is taking a leading role responding to climate change through its pledge to reduce greenhouse gas emissions by 20% in 2030 from the base year of 2012. By establishing comprehensive water management goals, both internally and externally, GC will ensure that its operations are accountable and that it maintains its leadership position in sustainability at the international level.
ETP Does Not Have to Reroute ME2. The Pennsylvania Environmental Hearing Board (EHB), a special court set up to hear appeals of decisions by the Dept. of Environmental Protection (DEP), ruled on Wednesday that Sunoco Pipeline’s Mariner East 2 project does not have to reroute around Marsh Creek State Park in Chester County as ordered by the DEP. At least, not yet.
UGI Is Trying to Take Its PennEast Pipeline Case to U.S. Supreme Court. PennEast pipeline update: U.S. Solicitor General files brief to U.S. Supreme Court; New Jersey resources still supports project. The U.S. Supreme Court has not made a decision yet on whether to hear an appeal from the PennEast Pipeline Company to overturn a 2019 Third Circuit Court of Appeals decision, denying the condemning of 42 parcels of New Jersey state-owned land for the company’s $1 billion pipeline project. However, the court recently received the court’s requested brief from the U.S. Solicitor General expressing the Trump Administration’s views on the issue. The Supreme Court had asked on June 29 for a brief to be filed from the administration before the justices make a decision.
Production Costs Down by 20%. Pressured by plunging oil prices and the need to adjust to the lower oil demand, U.S. oil producers have slashed costs and managed to bring down their average breakeven costs by nearly 20 percent to $45 a barrel on average, Bloomberg’s research service, BloombergNEF (BNEF), said on Thursday.
According to BloombergNEF’s estimates, U.S. oil producers have cut their average breakeven costs from an average of $56.50 per barrel last year to $45 a barrel now. Some of the most prolific areas in the U.S. shale patch, such as the core of the Permian and Eagle Ford basins, have even seen breakeven costs dropping to an average of $36.50 per barrel now, from $44 a barrel last year.
All companies, from the smallest driller to the largest corporations, have reduced capital spending this year in response to the collapse in oil prices, and they will continue to show spending discipline next year amid the uncertain recovery of oil demand and oil prices.
Due to the plunge in oil prices and oil demand, U.S. drillers quickly implemented drastic cost cuts. As a result, they improved efficiencies, optimized well and field operations, and renegotiated contracts, BNEF said.
Earlier this month, BNEF said that even though the U.S. shale patch had further reduced its breakevens over the past year, the decline in drilling costs alone may not be sufficient to help producers to lift production after this year’s downturn.
The Third-Quarter Dallas Fed Energy Survey from the end of September showed that most executives from 154 oil and gas firms—66 percent—believe U.S. oil production has already peaked.
Total U.S. crude oil production is set to remain close to its current levels of around 11 million barrels per day (bpd) through the end of 2021, as new drilling activity will not be enough to offset declines from existing wells, the Energy Information Administration (EIA) said last month.
Forbes 2020 Oil and Gas Industry Recap. Has the oil and gas industry ever had a worse year than it’s had in 2020?”
That’s the question I was asked recently by host Kym Bolado on the weekly “In The Oil Patch” radio program that airs in various markets across Texas. It’s an interesting question, and one that comes with no easy answer.
When contemplating the question, it’s easy to look back and 2015, or 1985 or some of the years during the decade of the 1970s, a time when it often appeared that the prophets of “Peak Oil” theory might actually be correct as years that might compare. I first came into the oil business right out of college in 1979, so my frame of reference encompasses all of those down years and more. They were all bad for the industry in their own ways, and the devastation the industry suffered in 1985 and the half-decade afterwards would certainly compare to the job-losses, bankruptcies and general carnage experienced in the U.S. industry in 2020.
Suffice it to say that no one in the oil business will be sorry to see this year finally come to a merciful end.
Comparisons between 2020 and 1985 seem especially relevant since the collapse in oil prices that took place in both years initially germinated for the same reason: An effort by Saudi Arabia to flood the global market with crude motivated both by a desire to reclaim lost market share and to slow a booming upstream industry in the United States.
It’s tempting to blame the 2020 price collapse on the COVID-19 pandemic, mainly because that is a true story in large part. But no one should discount the price war between Saudi Arabia and Russia that broke out on March 4 due to the collapse of the OPEC+ agreement as a big factor in taking an already-deteriorating situation and turning it into an existential crisis for many companies.
The OPEC+ collapse endured for only a handful of weeks but it led directly to that memorable day in April when the price for West Texas Intermediate turned deeply negative – falling as low as -$37.63 per barrel – in an unprecedented manner. That event was motivated by fears among traders that U.S. crude storage would become completely filled at some point during May amid reports of a flotilla of oil tankers containing 50 million barrels of Saudi crude headed to U.S. refineries. Those reports turned out later to have been not so accurate, but the damage had been done, and it was all quite a shock to the system.
By comparison, 1985 saw crude prices drop into the single digits – I personally knew multiple producers who sold oil in South Texas below $2 per barrel during that desperate year – but not below zero.
The business destruction in 2020 was not limited to the upstream segment of the industry: The midstream and service sectors suffered mightily as well. For the pipelines, the carnage related as much to bad politics and unprecedented court decisions as much as any other factor.
The politics in North Carolina became so convoluted in early July that Dominion Energy D -0.4% and Duke Energy DUK -0.2%, after years of planning and permitting activities, threw up their hands and cancelled plans to complete their $8 billion Atlantic Coast Pipeline project. Just days later, a federal judge in Washington, DC ordered Energy Transfer to shut down its Dakota Access Pipeline, an unprecedented activist decision that was later overturned, although the question remains up in the air as the year comes to a close. On the same day, the U.S. Supreme Court refused to overturn a decision another federal judge in Montana that halts the construction of the long-delayed northern leg of the Keystone XL pipeline on the grounds that the Corps improperly issued a fast-track water crossing permit for that project.
All of that, and the year comes to a close with the election of a new President, Joe Biden, whose administration promises to implement policies overtly hostile to all segments of the oil and gas business in the U.S.
But even with all of these factors and others, there remains plenty of room for optimism for the oil and gas business to carry forward into 2021. The Baker Hughes Rig Count, after hitting all-time lows in August, has risen dramatically since the first of September, a trend that promises to continue into 2021. The number of active rigs working today remains a fraction of what it was as 2020 dawned, but at least the trajectory is positive.
Oil prices have also been on a steady upward trajectory in recent months, and rose above $48 per barrel of West Texas Intermediate for the first time since February as this piece was being finalized. Other positives as this terrible year approaches its conclusion include the fact that U.S. exports of Liquefied Natural Gas (LNG) reached an all-time high during November and that the Port of Corpus Christi and other Gulf Coast ports continue forward on their various expansion and new business projects designed to facilitate their grown crude oil export volumes.
This kind of year-end recovery was not a feature of 1985. The industry depression that started that year carried over throughout 1986, and its after-effects lingered for the remainder of that decade.
Most men and women who choose to make a career in the oil and gas business tend to be optimists by nature – you almost have to be in order to survive the ups and downs in such an unpredictable business. Unlike 1985, the dynamics at play as this terrible year comes to a close at least provide a level of hope that did not exist in the industry 35 years ago.
PA’s Impact Fee Record Low. Pennsylvania’s drilling impact fee will hit a record low this year after the pandemic zapped energy demand.
The Independent Fiscal Office said the price of natural gas on the New York Mercantile Exchange (NYMEX), upon which the impact fee is based, declined 21 percent this year, landing at $2.08. The IFO estimates that any price below $2.25 would deplete funding for the impact fee by $53 million.
The impact fee, first established under Act 13 of 2012, authorizes a tax on unconventional gas wells. The Pennsylvania Public Utility Commission collects and redistributes the proceeds across the state’s 67 counties for economic development projects.
In 2018, the impact fee reached $254 million after a state Supreme Court ruling narrowed the definition of a certain type of low-producing well called a “stripper well,” boosting fee collections by $30 million.
But like most other industries in 2020, the pandemic hit natural gas production hard, depressing prices both in and out of state.
“The COVID-related economic slowdown has softened global energy demand and the lack of pipeline take-away capacity in the region has impacted commodity prices, leading to a pullback in production activity,” said David Spigelmyer, president of the Marcellus Shale Coalition.
The coalition said the fee has generated nearly $2 billion in less than a decade for local governments. Gov. Tom Wolf and Democrats have proposed an additional severance tax on natural gas producers to help fund infrastructure projects across the state, though it remains unpopular among Republicans who worry about driving companies out.
Natural gas production supports about 24,000 jobs, according to state data, and is second only to Texas in terms of overall gas procured, exceeding 6.8 trillion cubic feet in 2019.
“Our industry is resilient, and we know that natural gas will continue to drive job creation and economic growth, especially as critical pipeline infrastructure is brought online and in-state manufacturing expands,” Spigelmyer said.
The IFO will release an updated outlook on impact fee collections, not submitted until April 2021, at the end of January.
NatGas Needed to Grow Renewables. Natural gas power generation is “indispensable” to the growth of renewable electricity generation, the Progressive Policy Institute advises in a new report.
Providing an “instantly dispatchable” source of electricity, natural gas accelerates renewable energy growth and, moving forward, can be the key to decarbonizing the grid without disrupting reliability or hiking electricity costs for consumers, PPI concludes in Wind, Solar, and Gas: Managing the Risks of America’s Clean Energy Transition.
Natural gas-fueled power plants have the ability to quickly turn on and off in a matter of minutes, whereas wind and solar energy sources – because the sun isn’t always shining nor is the wind always blowing – require significant battery storage that take longer to initiate, on top of contributing to global e-waste problems.
“Demands to ‘ban fracking’ or keep shale gas ‘in the ground’ are not consistent with a balanced approach to decarbonizing the electric grid,” the Progressive Policy Institute writes.
Moreover, short timelines to achieve ambitious climate goals require a rapid deployment of renewable energy infrastructure, leading to construction mobilization, as Mark Mills said during SHALE INSIGHTTM, unseen since WWII.
Reliability and affordability are important factors for consumers, especially heading into the winter months, as natural gas and natural gas liquids are the backbone of winter heating.
For consumers in the New York and New England states, where limited pipeline capacity – blocked by anti-infrastructure actions – high energy costs and reliability threats are a reality.
As ISO-New England noted in a recent winter reliability report:
“Consecutive days of extremely cold weather can reduce fuel availability for generating power due to regional natural gas pipeline capacity constraints.”
Next month, the 117th Congress will be sworn in – ushering a new wave of policy initiatives reflective of each political party’s respective platform. While energy and climate policies are carefully weighed, debated, and amended, the course taken must leverage our natural gas abundance and its role in clean, reliable and affordable electricity generation.
PA NatGas Production Flattens. Pa. shale gas production flattens as drillers time the market, contain costs. Pennsylvania’s shale gas production flatlined in October after the nation’s largest gas producer returned 570 MMcf/d of shut-in gas to the market, keeping output roughly level as most of the state’s other major producers continued to let production slip. EQT Corp. and other producers have been turning their gas production on and off like a light switch, RBN Energy gas market analyst Sheetal Nasta wrote Dec. 14.
FERC Allowing More MVP Work. FERC narrows buffer zone, allowing more MVP pipeline work to resume. A divided Federal Energy Regulatory Commission again gave permission Dec. 17 to the Mountain Valley Pipeline to resume additional construction of the natural gas project, over objections from Democratic Commissioner Richard Glick, who argued outstanding permitting issues should first be resolved before FERC gives its nod. At issue was a request from MVP to limit a 25-mile zone around the Jefferson National Forest in which construction was still barred, reducing it to two smaller sections totaling about 7 miles. Note: Roanoke Times also reports.
New Climate Change, Energy Deal Coming. Lawmakers negotiating the first broad energy reform measure in nearly a decade reached a bipartisan, bicameral deal yesterday on a framework for a clean energy innovation package after nearly two years of legislative work. The timing of the compromise should enable Congress to attach it to the must-pass fiscal 2021 spending bill, should appropriators finish their own talks. Text of the deal has not been officially released and is likely to be unveiled as part of the omnibus spending accord.
We’ll watch this one closely and keep updated on all the legislation.
NatGas Production Decline in 2021. Seven major U.S. regions to extend natural gas production downtrend into 2021. Gas production from the Anadarko, Appalachian and Permian basins, as well as from the Bakken, Eagle Ford, Haynesville and Niobrara formations, is on track to decline 744 MMcf/d month/month (m/m) in January, to 80.777 Bcf/d, EIA said in its latest Drilling Productivity Report (DPR), published Monday. Among the major plays tracked in the DPR, only the Haynesville is expected to grow output from December to January, with production to rise 10 MMcf/d m/m to just over 11.3 Bcf/d.
Oil Production to Decline in 2021. U.S. shale oil output to drop in Jan. Business & Industry Connection. U.S. oil output from shale formations is expected to decline by about 136,000 barrels per day (bpd) in January to 7.44 million bpd, the lowest since June, the U.S. Energy Information Administration (EIA) said in a monthly forecast on Monday, as reported by Reuters. Output at nearly all seven major formations is expected to fall, except from the Haynesville region, where output is forecast to remain largely flat.
Pipeline and Leases Finalized. Port of Corpus Christi finalizes lease, pipeline deals with Bluewater Texas crude export project. The Port of Corpus Christi and the Phillips 66-led Bluewater Texas project finalized leasing and pipeline easement agreements Dec. 16 for the planned deepwater, crude oil export terminal. Register Now The proposed Bluewater terminal is one of four pending applications — and the only one off of Corpus Christi — to build offshore crude terminals that would allow VLCCs to fill up to capacity in deeper waters without the need for reverse lightering. While the race to build these offshore hubs has slowed from a sprint to a crawl during the ongoing coronavirus pandemic, some projects are still inching forward.
US Development Group’s New Pipeline. What’s that pipeline along Twin City Highway? Port Arthur Terminal has the answers. Motorists along sections of FM 366 and Twin City Highway near FM 365 have likely seen the pipeline construction adjacent to the railroad tracks. The pipeline belongs to Port Arthur Terminal LLC, a wholly owned subsidiary of US Development Group that announced this week construction of a $130 million terminal that will create jobs in the area.
FERC Approves Phase 2 of Kinder Pipeline. (Thank you, MDN). In March 2019 MDN told you about Kinder Morgan’s Natural Gas Pipeline Company of America LLC (NGPL) project that carries Marcellus/Utica gas from the Midwest all the way to the Gulf Coast to feed just about any of the existing or under construction LNG export plants in the region. Phase 1 of NGPL’s Southbound Expansion project was placed in service in October 2018, providing an extra 460,000 Dth/d (460 MMcf/d) of gas from NGPL’s interstate pipeline interconnects in Illinois, Arkansas, and Texas to markets in NGPL’s South Texas zone. The Federal Energy Regulatory Commission (FERC) has just given Phase 2 of the project permission for a partial startup.
Water Disposal Accelerates. Permian water disposal surges to record high. Water disposal in the Permian Basin is likely to hit a new all-time high in the fourth quarter of 2020, exceeding 1.3 billion bbl for the period for the first time in history, potentially further expanding Texas’ total water market which had already recovered close to its pre-COVID record in October, a Rystad Energy analysis projects.
PA Permits December 10, to December 17, 2020
County Township E&P Companies
- Clinton Grugan STL Resources
- Susquehanna Rush Epsilon
- Susquehanna Rush Epsilon
- Susquehanna Rush Epsilon
- Susquehanna Rush Epsilon
OH Permits December 10, to December 17, 2020
County Township E&P Companies
- Harrison Franklin EAP OHIO
- Harrison Franklin EAP OHIO
- Harrison Franklin EAP OHIO
- Harrison Franklin EAP OHIO
WV Permits December 7 to December 11, 2020
- Brooke SWN
- Harrison HG Energy
- Lewis HG Energy