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Utica Green Upstream & Midstream Conference
March 25, 2022
Pro Football Hall of Fame
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April 21, 2022
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Hilton Garden Inn, Southpointe
Canonsburg, PA
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Senator Manchin Taking on FERC. With energy independence a goal discussed by every leader in West Virginia now, Sen. Joe Manchin, D-W.Va., is set to meet with the Federal Energy Regulatory Commission on Thursday to find out why guidelines were changed recently that may impede pipeline construction with even stricter regulations.
“FERC reversed decades of precedent,” he said of new guidelines that require stricter considerations in several areas.
“It is a tremendous drawback … for our energy reliance and reliability,” Manchin said during a virtual press conference from his Washington office Wednesday. “They (the five members of the FERC board) are going to have to explain to me why they have taken these drastic measures … and why they think they have the ability to do that. Why did they … make those changes?”
Manchin, Gov. Jim Justice and Sen. Shelley Moore Capito, R-W.Va., all want to pursue energy independence in light of the impact from the Russian invasion of Ukraine and use natural gas from West Virginia to help do so, as well as help countries in Europe that need it.
When FERC decided (by a 3-2 vote) on guidelines last month, Manchin, who is chairman of the Senate Energy and Natural Resources Committee, was quick to respond.
“Today’s reckless decision by FERC’s Democratic Commissioners puts the security of our nation at risk,” he said. “The commission went too far by prioritizing a political agenda over their main mission – ensuring our nation’s energy reliability and security. The only thing they accomplished today was constructing additional road blocks that further delay building out the energy infrastructure our country desperately needs. Energy independence is our greatest geopolitical and economic tool and we cannot lose sight of that as instability rises around the globe.”
With the changes, gas pipeline reviews will consider a project’s effect on climate change, look at a wider set of impacts on landowners and environmental justice communities, and scrutinize the economic need related to the public need.
On Wednesday, Manchin called the changes “sweeping and ill-informed” and he is now seeking answers and remedies.
“We cannot get a pipeline out of the Marcellus Shale (in north-central West Virginia),” he said, referring to the shutdown of the Atlantic Coast Pipeline project and the problems with finishing the Mountain Valley Pipeline (MVP).
Both natural gas pipelines were inundated with lawsuits filed by environmental groups that cite the impact on the environment, danger to residents and the validity of going through unwilling landowners’ property because of eminent domain.
“The Mountain Valley Pipeline is 95 percent complete,” Manchin said. “That means the pipeline is in the ground, covered and reclamation done (on the land above it). But they have been blocked. That pipeline must be connected to the market.”
The 303-mile, 42-inch-diameter MVP would carry natural gas from West Virginia to Chatham, Va., and then connect with another pipeline. It crosses Summers and Monroe counties in West Virginia and Giles, Montgomery, Roanoke and Franklin counties in Virginia.
Initially slated to be in use by the end of 2018, but delayed by protests and court cases, the $3.5 billion project now has a price tag of more than $6 billion and is scheduled to be in operation in 2023.
The latest setback come early last month when the Court of Appeals for the 4th Circuit in Richmond, Va., invalidated approvals previously granted by the U.S. Forest Service and the Bureau of Land Management (BLM) to construct the pipeline on federal land.
That includes Jefferson National Forest, which the MVP must pass through in Monroe and Giles counties, with a total of about 3.5 miles on federal land involved.
But Manchin said Wednesday that ruling can be changed.
“The 4th Circuit has been unmerciful on allowing any progress,” he said, adding the case can be moved to the D.C. Circuit Court.
Manchin also said the Biden administration is not helping but can help “clarify” the FERC changes.
“We need to ramp up (the supply of natural gas),” he said, and the Marcellus Shale is the “richest formation in the world.”
Ban It. Bipartisan lawmakers call on Biden administration to end Russian oil imports. While the administration moved quickly to put economic pressure on Russia – cutting it off from global financial markets in a matter of days – Putin’s military assault shows no signs of stopping. Heavy bombing and missile strikes targeting civilian infrastructure have created an alarming humanitarian crisis. In response, angry US lawmakers from across the political spectrum are publicly urging the administration to hit Putin where it hurts the most: imposing sanctions on Russia’s massive energy sector. They also introduced several proposals in the last few days that would end Russian oil imports to the US during this crisis.
Hawaiian Refiner Takes on Putin. First U.S. refiner suspends purchases of Russian crude for Hawaii refinery. Par Pacific Holdings Inc (PARR.N) said on Thursday it would suspend the purchases of Russian crude oil for its Hawaii refinery, the first U.S. refiner to publicly refuse the country’s oil following a wave of sanctions imposed after Moscow’s invasion of Ukraine. “We will continually monitor and evaluate our posture on Russian crude over the coming weeks and months. In the meantime, we are turning to other grades of crude, principally from North and South America, to meet fuel production requirements,” Par Pacific said in a statement.
9 Out Of 10 Americans Support Energy Independence.
New polling conducted by Morning Consult on behalf of API found:
- 90 percent of voters support the U.S. developing its own domestic sources of energy rather than relying on other regions of the world (Democrats 92%; Independents 86%; Republicans 90%).
- 85 percent believe producing natural gas and oil here in the U.S. helps America maintain a leadership role during a period of global uncertainty (Democrats 82%; Independents 78%; Republicans 91%).
- 85 percent believe that producing natural gas and oil here in the U.S. could help lower energy costs for American consumers and small businesses (Democrats 81%; Independents 80%; Republicans 90%).
- 84 percent agree that producing natural gas and oil here in the U.S. helps make our country and allies more secure against actions by other countries such as Russia (Democrats 83%; Independents 78%; Republicans 88%).
Earlier this week, API President and CEO Mike Sommers sent a letter to Department of Energy Secretary Jennifer Granholm and other administration officials outlining steps key regulatory agencies should take to ensure long-term American energy leadership and security at a time of increased geopolitical volatility. API also submitted a letter to Secretary Deb Haaland seeking clarification on DOI’s response to Louisiana v. Biden regarding leasing and permitting delays and urging the department to prioritize and move forward with its statutory requirements to issue quarterly lease sales and issue a five-year plan for offshore development.
API’s ongoing “Keep America Competitive” campaign, launched in 2021, emphasizes the importance of American energy leadership for reducing reliance on foreign energy sources
European NatGas Rises 60%. Europe’s natural gas problem gets worse. European natural gas prices have risen an astounding 60% this week, as investors panic about disruptions to supplies. Benchmark natural gas prices briefly touched a record high of €194 euros per megawatt-hour on Wednesday. Europe gets 40% of its natural gas from Russia. Gas is crucial for heating homes, power generation and industrial activity on the continent, and the surge could upend its economy. For now, Russian gas continues to flow west. But military destruction of pipelines in Ukraine, sanctions, or Russian political decisions to cut supplies are all at risk, analysts say.
NatGas Necessary for Net-Zero. Natural gas industry “essential” to US net-zero future – study. Natural gas, its utilities and its delivery infrastructure will be essential for the US net-zero transition, announced the American Gas Association (AGA), a Washington, D.C.-based trade organization, in February. It released a plan and analysis setting out why. The report, titled Net-Zero Emissions Opportunities for Gas Utilities, suggests a nationwide strategy to leverage the benefits of gas technologies and distribution infrastructure. The AGA modelled various scenarios and technologies and concluded that pathways using natural gas and its infrastructure offer opportunities to incorporate renewable and low-carbon gases, give customers choice and help minimize impacts on them, keep energy reliable, improve overall energy system resilience and accelerate emissions reductions.
Silicon Betting on O&G Industry. Silicon Valley fund goes old school with big stakes in oil and gas midstream. A Silicon Valley venture capital firm that invested early in startups such as Apple and Google went old school in the fourth quarter of 2021, buying more than $6 billion worth of stock in energy and industrial companies with a heavy emphasis on oil and gas pipelines. Sequoia’s energy investments spanned the entire energy complex, from utilities such as NextEra Energy Inc. and Dominion Energy Inc. to upstream exploration and production companies such as America’s largest natural gas producer EQT Corp. and shale oil and gas pioneer Devon Energy Corp.
PA Needs to Supply More NatGas. Calls for Pennsylvania to supply more natural gas. George Stark is the spokesman for Coterra Energy, which has natural gas wells in Susquehanna County. “You’re seeing all these prices increase because of the volatility. And one way in which you reduce volatility is you increase supply. And we have the supply here. We’re blessed with an abundant resource,” Stark said. Stark says some of the natural gas from Susquehanna County is currently sent to Japan. Stark would like to see a new pipeline built to allow some of that gas to be sent to parts of the U.S. that rely on gas from Russia.
Investigate Russian Funding of Anti’s. Investigate Russia’s covert funding of US anti-fossil fuel groups. In 2014 – the same year Russia annexed Crimea – then-North Atlantic Treaty Organization (NATO) Secretary-General Anders Fogh Rasmussen warned that Russia was covertly working to undermine European and U.S. fossil fuel production. Three years later, in 2017, Reps. Lamar Smith (R-Texas) and Randy Weber (R-Texas) sent a lengthy letter to then-Treasury Secretary Steven Mnuchin making a similar accusation. Importantly, their letter connected some of the dots highlighting Russia’s covert efforts to fund various environmental organizations that were trying to limit or end U.S. hydraulic fracturing, or fracking, for shale gas and oil.
WV Pushing for More Horizontal Drilling. Sweeping horizontal well drilling bill making its way through WV House. The West Virginia House Judiciary Committee is slated to consider an expansive bill Thursday morning intended to encourage horizontal well drilling for oil and gas production. Senate Bill 694 would set application requirements for horizontal well unit controllers seeking to combine oil and gas tracts to drill wells, expand the state body that regulates deep well drilling, and give options for compensation to owners entitled to lease an oil and gas estate. The Senate passed the bill in a 26-7 vote Friday.
25 States Support NatGas by Rail. 25 states line up against Biden attack on natural gas industry. Stream. Half of all U.S. states penned a letter to the Biden administration, arguing against its decision to reverse a Trump-era rule allowing energy firms to transport natural gas via rail. The 25-state coalition said that proposed prohibition of natural gas rail transport would have “devastating effects” on the economy and national security, according to the letter led by Republican Louisiana Attorney General Jeff Landry. The Monday letter was addressed to Pipeline and Hazardous Materials Safety Administration (PHMSA) Acting Administrator Tristan Brown.
Oleg Tolmachev in the Ukraine. (Thanks, MDN) For years we wrote about Oleg Tolmachev, chief driller at Eclipse Resources. He was the guy who figured out how to drill those record-breaking, super long onshore laterals–some of the longest on record. Eclipse was sold to and merged in with Montage Resources. Montage was then sold to and merged in with Southwestern Energy. Somewhere along the way Tolmachev departed. Some 13 months ago Tolmachev was hired by Ukraine to help that country figure out how to drill and frack wells so it can wean itself off Russian natural gas and oil. Today Tolmachev is working to keep the natural gas flowing in the country, a country besieged by Russian invaders.
U.S. LNG Stands for Energy Security. While it’s unclear what lies ahead as Russia invades Ukraine, we know one thing for sure: American energy is a positive force in difficult times, helping to provide stability and security for allies abroad. We continue to see this time and again as events unfold in Europe.
As the EU’s top energy official recently acknowledged, U.S. natural gas producers and exporters have mobilized to help ease Europe’s ongoing energy crisis. Even before Russia attacked Ukraine, Europeans were paying natural gas prices five times as high as they were a year ago, driving increases in heating and power costs. War means Russian gas supplies could become even more constrained.
It’s no surprise Vladimir Putin uses energy as a weapon–but like in World War II and other crises, America has Europe’s back. U.S. liquefied natural gas (LNG) export facilities have significantly increased LNG volumes headed to Europe. In fact, U.S. LNG shipments to Europe eclipsed Russian natural gas pipeline deliveries in January for the first time ever.
This is what we mean by “American energy leadership”: using abundant American energy as a positive influence that benefits America’s friends. This is exactly what the world’s leading producer of natural gas and oil should do, especially in times of turbulence.
Our capabilities didn’t spring up overnight. America is positioned to play this role because of our abundant natural gas and our lead in the technologies and innovations needed to develop and export it as LNG. It wasn’t long ago that experts thought America was running out of natural gas. A dozen facilities were built to import it. Thanks to the U.S. shale revolution and the development of modern hydraulic fracturing and horizontal drilling, America became an energy powerhouse. Plans for importing LNG were shelved. U.S. facilities were configured to export LNG instead.
Perfect timing, it turns out. Late last year, as Putin escalated threats against our European partners, America overtook Australia and Qatar as the world’s largest LNG exporter. Experts predict America will surpass all other nations in creating the most LNG capacity by the end of 2022.
The current emergency is front of mind, but American LNG exports are key to a forward-looking geopolitical strategy built around accessible energy that helps nations address any number of challenges. For example, in our country, the increased use of natural gas to fuel power generation was key to U.S. carbon dioxide emissions dropping to their lowest levels in a generation. This has allowed America to become the world’s leader in reducing CO2 emissions, which is key to achieving climate goals and building a lower-carbon future.
Long-term, America is by far the best-prepared nation to help Europe and others meet energy needs amid international turmoil, while furthering our shared energy security and decarbonization goals. Certainly, President Biden deserves some credit for recognizing, along with European Commission President Ursula von der Leyen, the critical contribution of U.S. LNG exports in the current situation as well as in the upcoming energy transition. The Commission’s recognition of natural gas as sustainable for the purposes of investing is another positive development.
Still, not everyone sees the benefits for all involved. Here at home, in the U.S. Senate, some would restrict or halt American LNG exports. They argue that slowing or stopping LNG exports will ease prices here. However, reports from the previous two administrations show that as LNG exports grew, domestic prices stabilized. In fact, during the period that saw the most rapid growth in LNG exports–the second half of 2019, when exports nearly doubled–prices did not rise but actually dropped.
Many of those same senators also favor policies that restrict U.S. natural gas and oil development on federal lands and off our shores for “environmental” reasons, yet a report under the Obama administration shows those restrictions could lead to increased foreign energy imports and higher emissions. These are steps in the wrong direction and must be rejected.
What Is ‘Responsible’ NatGas? Suddenly, certified gas is on every natural gas driller’s lips, the industry’s version of conflict-free gems or fair-trade coffee.
Companies are racing to certify their gas as “responsibly sourced” or “low-emitting,” in an effort to be accepted into the energy transition.
Companies like EQT Corp. and Southwestern Energy Corp. were hoping certifying some of their wells would set them apart from competitors, especially as their clients, utilities in the U.S. and abroad, try to negotiate their place in more climate-conscious economies. Instead, the idea of certified gas has caught on so quickly that the industry predicts it will go from differentiator to status quo in short order.
With still one foot in the pilot phase, many oil and gas companies have had some of their production certified by one group or another to testify to how little their wells leak methane, or how responsibly they handle their waste, or how robust is their outreach is to local communities.
Will emission data endear customers and investors to natural gas?
Michael Kennedy, CFO for Antero Resources, a Colorado-based driller that announced earlier this month that an undisclosed number of its wells in Appalachia were certified by Project Canary, said certified gas is the new “license to operate.”
In a bullish analysis of the trend, the global consultancy Wood Mackenzie predicted that certifying gas, especially in the Marcellus and Haynesville shale gas plays, could lead to “better pricing and position for U.S. LNG (liquefied natural gas) as green LNG, making it more globally competitive.”
As sanctions against Russia increasingly imperil Europe’s reliance on Russian gas, U.S. gas producers are eager to ink agreements with European utilities, which require some demonstration that importing these fossil fuels doesn’t sacrifice their climate commitments.
Operators of liquefied natural gas terminals, where gas is turned into a liquid for shipping, have seized on this trend.
Cheniere Energy, a Texas based firm that operates LNG facilities on the Gulf Coast, is developing “carbon emission tags” for its LNG cargoes this year.
It will calculate those tags according to its own “proprietary lifecycle analysis model,” the company said in a statement announcing its intentions last year.
Some skeptics of certified gas, and even some of its proponents, lament there is no one set of criteria to define what responsible production means.
A drilling rig at EQT Corp’s Fetchen well pad Tuesday, Feb. 27, 2018, in Forward Township, Allegheny County. Downtown-based EQT is launching with a $75 million fund to invest in technologies that promote natural gas while lowering EQT’s carbon footprint.
‘A big opportunity’: EQT, pledging to reach net-zero emissions by 2025, launches carbon storage pilots
There are at least four certification schemes used in the industry in the U.S., but it’s still the producers and the buyers who call the shots on what matters to them.
Colorado-based company Project Canary is one of the leading certifiers in the U.S. It began as a methane monitoring effort and, in 2020, merged with a firm that developed the TrustWell certification. Now, Project Canary said it has 600 data points that determine its certification, including how much methane is lost to the atmosphere.
So what methane score qualifies as good?
“Each buyer and seller are actually negotiating that number,” the company’s CEO Chris Romer said earlier this month. “It’s like an early market where nobody knows where the buyers and sellers (end up).”
“We don’t think Canary’s job is going to be to tell utilities and operators what the standard is,” he added, although the company’s highest certification attests that no more than 0.28% of gas leaks out.
The TrustWell certification has two buckets: local factors — for example, if the well is located in a populated area — and control factors — how the company handles methane emissions, water withdrawals, etc.
As an example, frack trucks traveling to a remote location with no residents around will have a lower emphasis placed on their performance than those driving through suburban streets.
“It’s the same thing with methane,” said Will Foiles, Project Canary’s chief operating officer. If the well is in an area with already compromised air quality, the impact from emissions would be weighted more heavily.
In drought areas, water withdrawals are more important.
For methane emissions, which are a chief concern for many utilities with greenhouse gas reduction goals, companies and customers negotiate their own metrics and Project Canary certifies that those metrics are met.
“This is exactly the business we’re in,” Mr. Romer said. “We’re not the arbiter.”
But an arbiter will materialize one way or another, he predicted.
FERC it
In the U.S., the issue of certification standards is being debated before the Federal Energy Regulatory Commission. In December, Tennessee Gas Pipeline, a 11,760-mile pipeline network that carries gas between New England, Appalachia and the Gulf Coast, asked for the right to aggregate and sell certified gas at certain pooling points on its system. The pipeline argued that this would be the first liquid market for certified gas and that it would accelerate the development of such gas to the benefit of customers and the environment.
Certified gas, in this context, would be gas that fetches a “gold” or “platinum” rating from Project Canary or a letter grade of C or higher from MiQ, a nonprofit methane-focused certificate registry.
Marcellus producers including Southwestern Energy Corp., EQT Corp., and Antero wrote in favor of the proposal.
Bigger fish, including Chevron and Shell, asked regulators to pump the brakes, arguing that allowing a piecemeal approach to certified gas — one without a single, unified standard — would actually fracture the market for it.
Tennessee Gas Pipeline said it wants the market to decide what responsible gas means.
The current certifications are tied to assets, not companies. There is no such thing as a certified operator, although Georges Tijbosch, CEO of MiQ said at a webinar earlier this month that large investors like pension funds are asking for just that: “When we can look at companies?”
“My answer is the when a company certifies all of its wells,” he said.
That’s what Findlay-based Penn Energy Resources has done. Earlier this year, the driller, which operates north of Pittsburgh, had Project Canary certify all of its wells.
“We went all in,” CEO Rich Weber said.
Mr. Weber wondered at first if the label is necessary, if anyone would care. Ultimately, the company decided it could be used to vouch for the company’s environmental and social practices to stakeholders ranging from local governments to landowners to utilities buying the gas. Less than a week after PennEnergy announced the certification, its general counsel invoked it in a debate over Economy Borough’s oil and gas ordinance.
“I liken it to a bond rating,” Mr. Weber said. “When you’re an investor in a company, you look at S&P and Moody’s.”
Just like investment-grade bonds see better rates, certified gas is now fetching a small premium, although industry players suspect that will fizzle as certified gas because the default.
“I think the vast majority of gas sold in the U.S. in the next year is going to qualify as RSG,” he said.
Once the trend is firmly established, governments might feel freer regulating things like methane, Mr. Tijbosch said during the webinar.
MiQ puts itself in the middle of a Venn diagram between voluntary action and regulation.
“We create the market now. We create the precedent. We create the case study so that it can be studied and eventually adopted into legislation,” Mr. Tijbosch said.
PA Permit February 21, to March 3, 2022
County Township E&P Companies
- Permit report not accessible on PADEP website
OH Permits February 20, to February 26, 2022
County Township E&P Companies
- Harrison Green Ascent
- Harrison Green Ascent
WV Permits February 21, to February 25, 2022
- Marshall Tug Hill
