Shale Directories Conferences
November 10, 2022
Hilton Garden Inn, Southpointe
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Appalachian Basin’s Long Ridge Energy First Hydrogen Burning Power Plant. Long Ridge Energy Terminal (“Long Ridge”), a subsidiary unit of Fortress Transportation and Infrastructure Investors LLC (NYSE: FTAI) and an affiliate managed by GCM Grosvenor (NASDAQ: GCMG), announced a successful first step to transition Long Ridge’s power plant toward carbon-free hydrogen: following the start of commercial operation achieved in October 2021, the plant conducted a successful demonstration using a hydrogen-blended fuel in GE’s HA gas turbine at Long Ridge’s 485 MW combined-cycle power plant located in Hannibal, Ohio. The hydrogen blending test was completed on March 30, 2022 at the facility using hydrogen produced as by-product from a nearby industrial facility.
“This is a profound achievement for Long Ridge Energy Terminal, GE, and the entire power generation industry. Our Hannibal power plant is the first GE H-class plant worldwide in commercial operation to blend hydrogen successfully and we will continue to work with GE to lead the deployment of utility-scale hydrogen solutions and sustainable energy storage,” said Bo Wholey, President of Long Ridge Energy Terminal. “We are focused on delivering low-carbon, reliable, and cost-effective energy to our customers including local data centers and technology companies. Data centers represent one of the many industries that can benefit from hydrogen-fueled power generation and – supported by GE’s advanced gas turbine – we are committed to meeting these needs.”
The plant is powered by a GE 7HA.02 gas turbine, which can burn between 15-20% hydrogen by volume in the gas stream initially and is expected to have the capability to utilize up to 100% hydrogen over time. For the demonstration, GE provided an integrated system – GE’s H2 Integrated Fuel Blending System – to allow an initial blending of 5% hydrogen by volume and natural gas to demonstrate the capability. The
blended fuel was injected to the combustion system of the gas turbine, and further upgrades will allow the power plant to utilize higher percentages of hydrogen subject to fuel availability and economics.
“Gas turbines—whether new or retrofitted—can help the power generation industry reduce its carbon emissions this decade by blending hydrogen with natural gas, and this first-of-its-kind demonstration in a H-Class “utility-scale” gas turbine is a major milestone for GE’s and the industry’s journey towards lower-carbon power generation,” said Scott Strazik, CEO of GE’s Global Energy Business Portfolio. “This milestone is built on a great legacy of hydrogen fuels experience across GE’s non-HA gas turbine fleets where GE has more than 8 million operating hours burning hydrogen or similar low carbon fuels. We are pleased to collaborate with Long Ridge to demonstrate pre-combustion decarbonization is something we can and must pursue today, even on GE’s largest utility scale HA gas turbines, to demonstrate that gas generation can be a destination technology in the energy transition.”
The facility plans to produce hydrogen onsite and is considering the use of below-ground salt formations
for large-scale hydrogen storage. In this way, the plant will be able to support a balanced and diverse power generation portfolio in the future and leverage an overall energy storage capability ranging from accommodating seasonal fluctuations related to renewable power, to cost effective, dispatchable intermediate and baseload power.
Manchin’s Energy Plan. Manchin’s energy plan is just what Biden needs. If President Joe Biden is serious about expanding U.S. energy production, then he will put the full weight of his office behind Senator Joe Manchin’s efforts to come up with a compromise climate and energy bill. Biden can help quiet those fears by supporting Manchin’s efforts to pair short-term commitments in traditional energy production to long-term investments in green technology. Ideally, such an effort would also include medium-term investments in terminals to export liquefied natural gas. The administration would also be sending a clear signal to U.S. oil and gas companies — which are now sitting on piles of cash — that the rug won’t be pulled from under them when the war in Ukraine ends. That will encourage them to spend their capital to expand fracking now, bringing prices down in the short term.
Could EQT Become an LNG Exporter? EQT exploring equity stake in LNG export capacity, deals with overseas gas buyers. NGI. EQT Corp. is in discussions with multiple liquefied natural gas (LNG) end-users across the world and may invest in liquefaction capacity as the call for U.S. exports grows. The country’s largest natural gas producer already sells volumes to U.S. export terminals. It moves 1 Bcf/d from the Appalachian Basin to the Gulf Coast. However, the independent expects LNG exports to have a meaningful impact on its balance sheet by the middle of the decade. CEO Toby Rice said the company wants to provide overseas buyers with more security from volatile prices in Europe and Asia, where the Title Transfer Facility (TTF) and Japan-Korea Marker benchmarks have hit record highs this year.
Drillers in Good Cash Position. Positive cash flows break link between shale gas drillers and banks. S&P Global. Two years of spending discipline and paying down debt have let shale gas drillers cut the cord between their capital-intensive operations and their banks, leaving the sector less vulnerable to coming interest rate hikes proposed by the Federal Reserve, analysts said. The Federal Open Market Committee, a committee within the Federal Reserve System, raised its benchmark interest rate by a quarter percentage point in March and hinted in its minutes that it may continue interest rate increases in increments of 0.5% per month for several months to choke off inflation. The Fed has not raised rates that quickly since 2000. An increase in the federal funds rate would trickle down through the credit products used by exploration and production companies, or E&Ps.
Philadelphia LNG Export Facility? (Thanks, MDN) Pennsylvania State Rep. Marina White (Republican from Philadelphia, a true rarity) sponsored a bill that’s getting traction in Harrisburg. House Bill (HB) 2458, which passed with a vote by the full House on April 13, creates a task force to study how to establish Philadelphia LNG exports to international markets, particularly those in Europe. The bill creates a task force to study the economic feasibility, financial impact, and the security needed to turn the Port of Philly into an LNG export terminal, exporting PA’s abundant and clean Marcellus Shale gas.
Record Number of Drilling Permits in TX. Railroad Commission of Texas issues record number of oil drilling permits. The Railroad Commission of Texas issued more than a thousand drilling permits in March. That’s an all-time record and Todd Staples, the President of the Texas Oil and Gas Association, says that’s good news. “It’s sending the signal that industry is responding. Our rig count is up about 60 percent from the previous year,” Staples said. “In fact, just the last week of March – the rig count -we had 25 added in the nation, and 20 of those was right here in the state of Texas.” Staples is calling this a step in the right direction but adds the Fed needs to reset American energy policy to open up more growth in the industry.
NatGas Pipeline to NY. (Thank you, MDN) A Tennessee Gas Pipeline plan to flow more Marcellus gas to Westchester County, NY and New York City for Consolidated Edison customers, called the East 300 Upgrade Project, took a giant leap forward last Thursday when the Federal Energy Regulatory Commission (FERC) issued permits that allow Tennessee Gas Pipeline to upgrade two existing compressor stations (in PA), and build a brand new compressor station in West Milford (Passaic County, NJ), just across the border and not far from Westchester County. This is a major victory and a sign this project will now get completed.
New low-emissions, gas-fired compressors will be added in Pennsylvania at two existing compressor stations, but the brand-new compressor station planned for West Milford will be, according to Tennessee Gas Pipeline, powered with electricity (super quiet) and have almost zero emissions. The company says emissions from the new NJ compressor station will be lower than “a trash collection or recycling facility” which had been planned for the same site.
There is absolutely no reason to oppose the NJ compressor station other than an irrational hatred of fossil fuels, believing that fossil fuels are toasting the planet. Irrational is the word that best describes Food & Water Watch and the New Jersey Highlands Coalition, which together have sued Tennessee Gas Pipeline in New Jersey Supreme Court to try and block the West Milford compressor (see Radicals Challenge No-Emissions Compressor in NJ Supreme Court). With FERC’s permit now in place allowing construction to begin, perhaps the NJ compressor will be done and running before the Supreme Court case is even heard! One can hope.
Why NatGas Prices Are Not Falling. Despite the highest natural gas futures prices in over a decade, its use for power generation in the Lower 48 has set records in recent months. This is in part by design: economics and environmental regulation have broadly favored gas-fired plants and pushed into retirement hundreds of coal-fired plants in the last decade or so, reducing price-driven fuel-switching capabilities between the two fuels. However, there’s more to it than that: a tight coal market, marked by low stockpiles, high export demand and record high prices, is limiting gas-to-coal switching even further, making gas burn for power much more inelastic to price.
Move to Generate Millions in PA – Drill on State Lands. A Pennsylvania House Republican wants to end the state’s moratorium on oil and natural gas leases on state-owned land, as a matter of foreign policy and of solving some of the state’s economic issues.
“I’m looking for ways to say, ‘Hey, what can we do in Pennsylvania to stop buying gas from people who absolutely hate us?’” said Rep. Clint Owlett, R-Wellsboro.
Owlett’s proposed HB2461 would allow oil and natural gas development on state forest and park property for nonsurface drilling. Essentially, well sites outside state-owned land could drill horizontally for natural resources without building new well pads on state property, subject to approval from the secretary of the Department of Conservation and Natural Resources. The secretary would have 60 days to approve or deny a lease.
Owlett argued that allowing drilling would be more environmentally friendly than in the past, given better data and technological improvements.
“We’ve learned a lot since 2010 and we know where the gas is at – the technology has gone in an amazing way that we can access vast amounts of those resources without even touching foot on state property,” Owlett said.
Initial lease payments from expanding nonsurfacing drilling, Owlett said, could be as much as tens of millions of dollars, and royalties over a decade could reach hundreds of millions of dollars. That money could fund DCNR projects, such as stream bank restoration, he said.
Gov. Tom Wolf’s administration has been opposed to expansion. In 2015, he signed an executive order placing a moratorium on new leases. During budget hearings, the Department of Conservation and Natural Resources dismissed the idea of more leases as unnecessary and said a majority of land already permitted has not been developed.
Owlett acknowledged the administration’s stance, but argued that the change would be strategic and limited.
“I tried to check so many boxes in this legislation to try to get the governor to be a yes,” he said. “There’s not a lot of land, but there’s definitely acres out there that would make a whole lot of sense to do that to right now.”
API Appreciates DOE Move on LNG Export Permits. American Petroleum Institute (API) Vice President of Natural Gas Markets Dustin Meyer released the following statement regarding the U.S. Department of Energy’s decision to approve two new liquified natural gas (LNG) export permits.
“We welcome the Department of Energy’s continued commitment to increasing U.S. LNG exports during this consequential moment in history. The additional permits granted today are an important step forward, and further progress could send a clear and powerful signal that America is serious about strengthening global energy security while supporting emissions reductions. We will continue working with the administration to ensure a timely and efficient permitting system to advance not only U.S. LNG projects, but also the pipeline infrastructure needed to sustain export growth.”
Earlier this week, API filed comments to the Federal Energy Regulatory Commission (FERC) raising concerns that the Commission’s recently proposed policy changes would undermine development of the natural gas infrastructure and facilities that are needed to increase supply here in the U.S. and expand LNG exports to our allies overseas. In addition, API has raised concerns that revised NEPA regulations will slow the permitting process for critical energy infrastructure dramatically and create new obstacles for natural gas development.
API represents all segments of America’s natural gas and oil industry, which supports more than 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our nearly 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 800 standards to enhance operational and environmental safety, efficiency and sustainability.
Kinder Morgan to Expand NatGas Compression in the Permian. Kinder Morgan to Expand Natural Gas Compression as Permian Takeaway Constraints Loom
Kinder Morgan Inc. (KMI) is planning compression expansions on its Permian Highway Pipeline (PHP) and Gulf Coast Express (GCX) natural gas pipelines in order to alleviate takeaway constraints in the Permian Basin expected to mount by 2023.
“Combined, the two expansions can add 1.2 Bcf per day of capacity out of the Permian,” CEO Steven Kean told analysts during a conference call to discuss first-quarter earnings.
Once a final investment decision (FID) is taken, KMI estimates the expansions could be in service within 18 months, meaning they may be online as soon as 4Q2023, management said.
“We believe the market will need that capacity in that timeframe and see one or both of these expansions as the near-term solution, pushing out our potential greenfield third pipeline further in time,” Kean explained.
Achieving a 2023 in-service date “will really help alleviate a containment issue that we’re starting to see now and certainly expect to get much worse as we get into 2023,” said KMI’s Tom Martin, president of natural gas pipelines.
Martin said the firm expects a greenfield pipeline to be needed in the Permian by 2026, “which would lend itself toward” an FID by “sometime early next year with that kind of a project.”
In addition, KMI is looking into a small-scale expansion at its Elba Island liquefied natural gas (LNG) terminal, Martin said. While it’s still early days in terms of greenlighting an expansion, “the market opportunity suggests there may be something worth looking at,” he told analysts.
Is Pittsburgh Changing Its Attitude Toward Fracking. Allegheny County Council to reconsider ban on fracking in county parks. WESA. Allegheny County Council is revisiting a bill that would ban new natural gas drilling – also known as fracking– and other industrial activity inside and underneath county parks. Council president Pat Catena sent the bill to council’s sustainability committee, which is headed by fracking skeptic Anita Prizio. If passed, the bill would prohibit private companies and public institutions from mining, fracking, quarrying, or “any other land uses that are not directly associated with the public’s recreational use and enjoyment of county parks.” The ban would not apply to an existing lease that has been in effect at Deer Lakes Park since 2014. It would prevent those operations from being expanded, however.
New TX Oil Boom. A new Texas oil boom is coming, finally. In the two months since Russia invaded Ukraine and oil prices shot up to more than $100 a barrel, the perplexing question for the Texas energy industry has been: Why isn’t anyone drilling? The answer initially was that the oil business has become beholden to a new group of investors who have no interest in strapping in for a roller-coaster ride. They ponied up their money for a nice calm turn on the kiddie train. This dynamic still holds, but evidence is emerging that the recent fossil fuel boom may stick around for a while. That could melt the frosty resistance to deploying more rigs—if only the exploration companies can find enough workers and parts to make that happen.
CNX Continuing Electric Push. CNX extends contract for electric fracturing fleet in Appalachia. CNX Resources Corp. said Tuesday it would extend a long-term agreement with Evolution Well Services to continue utilizing an all-electric fracturing fleet in the Appalachian Basin. COO Chad Griffith said after four years of working with Evolution’s fleet the “safety, environmental and efficiency benefits” have been clearly demonstrated. CNX holds more than one million Marcellus and Utica shale acres scattered across Ohio, Pennsylvania and West Virginia.
ExxonMobil Winner in the Permian. ExxonMobil takes top score for its natural gas from US Permian basin. US-based natural gas certification group MiQ awarded ExxonMobil’s Poker Lake facilities in New Mexico with its “A” grade certification of its natural gas as part of the US supermajor’s efforts to decarbonize its Permian basin assets. About 200 million cubic feet per day of ExxonMobil’s gas from the facilities is certified and is the first natural gas production associated with oil to be certified, the company said, as independently certified gas becomes more desirable in the market. “This certification further validates the steps we have taken to reduce methane emissions, which is part of our plans to achieve net zero Scope 1 and 2 greenhouse emissions in our Permian basin unconventional operations by 2030,” said ExxonMobil’s senior vice president of unconventionals Tom Schuessler.
Gas Flaring Way Down. Gas flaring activity in the global upstream sector sunk last year to its lowest level in a decade due to improved productivity, increased environmental awareness, and lower fuel demand caused by Covid-19 lockdowns and travel restrictions, Rystad Energy research shows. Improvements in the US shale sector are a significant driver of the decline in flaring activity. The tight oil sector, dominated by the US, flared the equivalent of about 12 million tonnes of CO2 in 2021, less than half of the 30 million tonnes seen in 2019. Improvements in the offshore market in Africa are particularly positive from a climate perspective, including significant reductions in Algeria, both in upstream flaring activity and performance.
TX Republicans Squeezing Wall Street. Texas Republicans squeeze Wall Street firms over climate policies. Los Angeles Times. Texas Republicans are intensifying their campaign against Wall Street’s embrace of sustainable investing. State Comptroller Glenn Hegar is demanding that more than 140 financial firms disclose their climate policies — and whether they restrict or prohibit doing business with energy companies. The firms include private equity giants such Blackstone Inc. and Apollo Global Management Inc. and lesser-known players such as Angel Oak Capital Advisors. The comptroller’s letter gives the firms 61 days to respond. Failure to do so “will result in the presumption under Texas law that your company is boycotting energy companies,” according to the letter.
Halliburton 1st Qtr. Results. Oilfield services firm Halliburton Co (HAL.N) on Tuesday posted an 85% rise in first quarter adjusted profit and raised its forecast for customer spending in North America as a rally in oil and gas prices boosted demand. Halliburton said it anticipates North American spending to grow by 35% this year due to stronger activity and inflation, revising higher an earlier estimate of a 25% increase. Oil futures climbed to their highest invasion of Ukraine. U.S. oil is around $105.34 a barrel while Brent is trading at $110.25 a barrel.
PA Permit April 11, to April 28, 2022
County Township E&P Companies
1. Armstrong Boggs Snyder
2. Armstrong Boggs Snyder
3. Armstrong Boggs Snyder
4. Armstrong Boggs Snyder
5. Armstrong Manor Exco Resources
6. Armstrong Manor Exco Resources
7. Bradford Springfield Blackhill Energy
8. Bradford Springfield Blackhill Energy
9. Bradford West Burlington Chesapeake
10. Bradford West Burlington Chesapeake
11. Butler Parker Laurel
12. Butler Parker Lola Energy
13. Butler Parker Lola Energy
14. Butler Parker Lola Energy
15. Butler Parker Lola Energy
16. Greene Aleppo EQT
17. Greene Aleppo EQT
18. Greene Aleppo EQT
19. Greene Aleppo EQT
20. Greene Aleppo EQT
21. Lycoming Penn Exco Resources
22. Susquehanna Auburn Chesapeake
23. Susquehanna Auburn Chesapeake
24. Susquehanna Gibson Coterra
25. Susquehanna Gibson Coterra
26. Susquehanna Gibson Coterra
27. Susquehanna Gibson Coterra
28. Susquehanna Great Bend SWN
29. Susquehanna Great Bend SWN
30. Susquehanna Great Bend SWN
31. Susquehanna Great Bend SWN
32. Susquehanna Great Bend SWN
33. Susquehanna Great Bend SWN
34. Tioga Covington Seneca
OH Permits April 10, to April 23, 2022
County Township E&P Companies
1. No New Permits
WV Permits April 11, to April 22, 2022
1. Brook SWN
2. Brook SWN
3. Ohio SWN
4. Ohio SWN
5. Marshall Tug Hill
6. Tyler Antero
7. Tyler Arsenal
8. Tyler Arsenal
9. Tyler Arsenal
10. Tyler Arsenal
Joe Barone 610.764.1232