Shale Directories Conferences
November 10, 2022
Hilton Garden Inn, Southpointe
Canonsburg, PA (near Pittsburgh)
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Butane Can Lower Gasoline Prices. Leaders from Appalachian natural gas producers told U.S. Sen. Joe Manchin (D-WV) in a letter last week that butane could be an effective means of lowering gasoline prices.
Representatives from Marcellus Shale Coalition in Pennsylvania, Kentucky Gas and Oil Association, and the Gas and Oil Association of West Virginia wrote the Senator to express their view that while President Joe Biden’s administration permitted increased ethanol blends to reduce pump prices, they believe butane blends could also lower gas prices.
“Butane has always been relied upon as a historically cost-effective way to blend gasoline during periods of supply disruptions in the summer,” the authors Dave Callahan, Ryan Watts, and Charlie Burd write. “Most recently, the Biden Administration issued a waiver in the spring of 2021 when the Colonial Pipeline was offline, allowing gasoline blenders to utilize butane to increase supply and lower costs for the consumer.”
According to Callahan, Watts, and Burd, butane is less than half the cost of ethanol per gallon, and all 150,000 U.S. gasoline stations and vehicles on the road can handle butane-blended fuel. Permitting butane blends, they said, would be an effective strategy for further driving down the costs at the pump.
“We would respectfully request that the oil and gas industry be given the same opportunity as the ethanol industry and issued an RVP waiver through the summer,” the energy leaders wrote. “We believe that this is the most effective way to help lower fuel prices and would advocate that the Administration use all resources available to help lower prices, which includes the use of both butane and ethanol as blending agents.”
Mariner East Delivery Export Boom in Philadelphia. Nearly once a day last year, a large tanker sailed up the Delaware River and docked at Marcus Hook Terminal to take on a cargo of liquid fuel, produced mostly from the Marcellus and Utica Shale formations in Western Pennsylvania and neighboring states.
The fuels — propane, butane, and ethane — were destined for markets in Europe, the Caribbean, Asia, Africa, and South America, where they’re used for heating, motor fuel, and as raw material for petrochemical manufacturing. Almost all the products were piped into Marcus Hook via the controversial Mariner East Pipeline system, the fuel transportation network whose protracted construction was hugely disruptive along its 350-mile route but finally seems to be delivering on its promise as an economic engine.
For all of 2011, when shale gas extraction was picking up momentum in Pennsylvania, only one vessel departed Delaware Bay loaded with gas liquids, according to data supplied by the Maritime Exchange for the Delaware River and Bay, a trade group for the shipping industry. Gas liquids are a byproduct of natural gas production, as well as oil refining.
By last year, 328 tankers left Delaware River terminals carrying shipments of gas liquids, or nearly one out of four of the 1,346 cargo vessels that set sail from the region (container vessels accounted for the majority). While other industrial sectors stalled during the pandemic, the number of vessels loaded with propane, butane, and ethane at Philadelphia-area wharves jumped 61% in the last two years.
High Gasoline Prices for Many Years. High gasoline prices may last for years. Gasoline and diesel prices hit new records yesterday, touching off a war of words between President Joe Biden and Senate Republicans on the direction of the economy. The national average price for regular gasoline hit $4.37 a gallon, and diesel hit $5.50, according to AAA. Those are both all-time highs. Gasoline averaged $2.97 per gallon a year ago. The roots of the price spike go back to the beginning of the pandemic and will be hard to fix, analysts said. The oil industry shut down oil fields, laid off workers and closed refineries at the beginning of the pandemic, when the recession and lockdowns cut into fuel consumption. As people returned to work, there was less oil available to meet the demand, said Devin Gladden, a spokesperson for AAA.
Uncle Joe Is Out of His Mind! Biden cancels massive oil and gas lease sale. The Biden administration canceled one of the most high-profile oil and gas lease sales pending before the Department of the Interior Wednesday, as Americans face record-high prices at the pump, according to AAA. The DOI halted the potential to drill for oil in over 1 million acres in Alaska’s Cook Inlet, along with two lease sales in the Gulf of Mexico. The move comes as Biden has taken a few actions to combat high gas prices, despite his administration’s generally hostile approach to the oil industry. “Due to lack of industry interest in leasing in the area, the Department will not move forward with the proposed Cook Inlet OCS oil and gas lease sale 258,” a DOI spokesperson told FOX Business in a statement Thursday. He Is Truly Clueless!
TX Permits and Completions Way Up! Texas drilling permits and completions up substantially in April 2022. The number of original drilling permits issued by the Railroad Commission of Texas in April 2022 rose 29% to 946, compared to the year-ago figure of 732. The April 2022 total includes 836 permits to drill new oil or gas wells, 12 to re-enter plugged wellbores and 92 for re-completions of existing wellbores. The breakdown of well types for original drilling permits in April 2022 is 223 oil, 74 gas, 593 oil or gas, 46 injection, and 10 other permits. Meanwhile, in April 2022, commission staff processed 493 oil, 143 gas and 232 injection completions for new drills, re-entries and re-completions, totaling 868 completions. This compares to 449 oil, 106 gas, and 98 injection completions, for a total of 653 in April 2021. This represents a 33% increase in well completions processed for the month of April.
Strong Summer Demand for NatGas. Strong demand from the industrial sector and the “ripple effect” of Europe’s energy crisis will be among the key factors putting upward pressure on natural gas prices this summer, according to projections from the Natural Gas Supply Association (NGSA).
In its 2022 Summer Outlook, published Wednesday, the trade group predicted downward pressure from weather and production compared to last summer, with low storage inventories and overall demand expected to apply upward price pressure.
NGSA said it expects the market to “remain in a tight balance this summer, resulting in upward pressure on natural gas prices compared to last summer’s average of $3.85/MMBtu” for Henry Hub.
“The fundamentals in NGSA’s outlook show strong demand for natural gas at home and globally,” said NGSA Chairman David Attwood, who also serves as ExxonMobil’s vice president of the Americas for Global Gas Optimization & Trading.
“They also underscore the critical role of natural gas in keeping the lights on, maintaining energy security, fueling industrial growth and achieving the world’s ambitious decarbonization goals. It’s clearer than ever that we need more natural gas, and regulations that acknowledge this reality.”
In the context of $7-plus New York Mercantile Exchange futures for the summer contracts as of Wednesday’s trading, with bullish sentiment stoked by domestic supply adequacy concerns and geopolitical tensions, predicting upward pressure on prices versus last summer might qualify as something of an understatement.
Still, in the summer/summer comparison, NGSA expects supply growth to outpace demand in 2022. Versus summer 2021 output, production this summer is set to rise 3.6 Bcf/d, or 4%, while demand is projected to grow 2.7 Bcf/d, a 3% increase.
“Although the extensive gain in oil and gas prices should signal for more drilling, increased price volatility, military conflict in Europe and uncertainty around” environmental, social and governance issues raise doubts over demand longer term, according to the report. EVA said it expects “moderate near-term production growth as North American producers stick to financial disciplines to avoid over-investment.”
U.S. gas-weighted producers are projected to increase capital expenditures by 30% this year. However, given “the inflationary shock and a sharp decline” in drilled but uncompleted wells, “the published budget may only be able to support a moderate growth from the current production level,” according to the report.
Looking more closely at the demand side of the market, NGSA highlighted industrial consumption and exports as key growth drivers this summer. Via liquefied natural gas and via pipeline to Mexico, exports are expected to average 19.4 Bcf/d this summer, a 2.5 Bcf/d increase over the year-earlier period, according to the trade group.
Industrial demand, meanwhile, is set to grow 0.7 Bcf/d, or 3%, this summer, with growth attributable to “strengthening industrial activity and higher rates of use of facilities this summer,” NGSA said. “New builds, capacity expansions and facility restarts in the natural gas-intensive petrochemical and fertilizer industries continue to contribute to industrial demand.”
Electric demand is expected to decrease slightly by 0.6 Bcf/d this summer on anticipated cooler temperatures and less coal-to-gas economic switching, the trade group said.
Still, EVA cautioned that “higher prices for replacement coal due to spikes in international coal markets will keep the competition between coal and gas tight for the summer, especially in the eastern part of the country.”
With residential/commercial demand projected to be flat summer/summer, NGSA predicted an overall increase in domestic consumption of 0.1 Bcf/d versus Summer 2021 levels.
Storage injections, meanwhile, are expected to increase 14% summer/summer, accounting for 9.8 Bcf/d on average, according to the NGSA outlook. EVA modeled a total injection of 2,096 Bcf for this summer, with U.S. working gas in storage expected to lag the five-year average throughout 2022.
New Englanders Will Shiver This Winter. How the Ukraine war could make New Englanders shiver. E&E News. As coal, oil and nuclear power plants have retired en masse in recent years, New England has turned to liquefied natural gas to keep the lights on and energy prices low. But with Europe scrambling to offset its use of Russian gas by importing more LNG, the region could find itself facing skyrocketing gas prices next winter. The dynamic illustrates New England’s mounting reliance on natural gas and the halting nature of efforts to green the region’s power supplies. The six New England states, which are served by a common electricity market, have struggled to replace their retired power plants with large-scale renewable projects or new pipelines to serve their existing gas facilities. Now, the region faces skyrocketing gas prices.
Appalachia Is the Third Largest NatGas Producer in the World. Stop demonizing the industry. As the collective voice for Pennsylvania, Ohio, and West Virginia’s natural gas and oil industry, we’re proud of the contributions American energy has made in creating a cleaner and healthier planet, stronger communities with good-paying jobs, and a more prosperous economy. Driven by the Shale Revolution that unlocked Appalachia’s natural gas and oil resources, America is now the world’s top natural gas and oil producer and the world’s top environmental performer. That’s because our members carefully develop these critical resources under the strictest environmental and safety standards, and we see it as a privilege to contribute to our nation’s environmental and energy leadership.
Chevron Will Continue in the Permian. Chevron expects continued Permian Basin growth amid global energy volatility. One of the world’s largest energy companies and leading oil producers in the Permian Basin announced it planned to increase production in the region in response to apparently sustained $100 or more per-barrel oil prices this year. In response to the higher prices, surpassing pre-COVID-19 levels as the health crisis subsided and fuel demand grew, Chevron in Friday investor announcement raised its projected oil production in the Permian 15 percent more than 2021. That meant the global company planned to produce between 700,000 and 750,000 barrels of oil a day out of the prolific region shared by southeast New Mexico and West Texas.
American LNG Buffers War Impact. Without American LNG, the fight against Russia would have been much, much worse. Opinion. This year, Russia invaded Ukraine, threatening not just the sovereignty of European nations, but also the world energy market. When America, along with our allies and trade partners, rightfully sanctioned Russia, refusing to fill Moscow’s coffers, the global energy market was impacted. American LNG has served as a tourniquet, staunching the possibly devastating economic impact of removing one of the world’s largest energy producers from the world stage. Energy expert and author Daniel Yergin, in a recent interview, best summed up America’s energy position like this: “Today, we [the United States] are basically self-sufficient, if you look on a net basis. And we’re the world’s largest oil producer. And this was unthinkable a decade and a half ago.”
National Fuel Getting Out of Oil. Selling high: National Fuel is getting out of the oil drilling business. With crude oil prices at an eight-year high, National Fuel Gas Co. is selling its California oil drilling business to focus on its natural gas production operations closer to home in Pennsylvania. The sale of the California oil and gas assets to Sentinel Peak Resources California will net National Fuel between $280 million and $310 million, depending on whether oil prices remain above $95 a barrel over the next three years. David P. Bauer, National Fuel’s president and CEO, said with crude oil prices at just under $110 a barrel, this was a good time to sell the California business. “Given the strength of commodity prices, and the continued growth of [National Fuel’s] Appalachian position, the timing was right to pursue a sale,” he said.
Chesapeake Looking for LNG Deals. Chesapeake Energy wants to make LNG deals, invest in export terminal. Shale gas producer Chesapeake Energy will try to capitalize on its enlarged Haynesville Shale position along the US Gulf Coast by cutting more deals for LNG exports priced at global indexes, executives said. Shale gas producer Chesapeake Energy will try to capitalize on its enlarged Haynesville Shale position along the US Gulf Coast by cutting more deals for LNG exports priced at global indexes, executives said. Chesapeake is joining its shale gas competitors in pressing for pipeline improvements and new LNG export terminals to ship gas to Europe and break the continent’s dependence on Russian natural gas after the invasion of Ukraine.
Pioneer CEO Says Growth Forecasts Too High. Pioneer Natural CEO Sheffield says oil growth forecasts too high. U.S. forecasts anticipating oil production rising 800,000 to 1 million barrels per day this year are “too aggressive,” shale giant Pioneer Natural Resources’ CEO Scott Sheffield said on Thursday, suggesting oil prices could rise further. The U.S. Energy Information Administration (EIA) forecasts oil production to rise by about 800,000 bpd this year to average 12 million bpd and hit nearly 13 million bpd in 2023, according to its most recent estimate. “The growth profile that EIA has, and some of the other think-tank firms, I think it’s too aggressive over the next two years for U.S. oil production,” Sheffield told investors during an earnings call.
West Virginian Weld in Germany for Energy Discussion. Weld invited to Germany for international energy discussion. West Virginia Senate Majority Whip Ryan Weld is in Germany attending an international discussion about energy policy. Weld, R-Brooke, was invited to participate in the Aspen Institute Germany’s Transatlantic Laboratories of Democracy Initiative happening this week in Schwerin, Germany. The same American and German leaders will gather again in the fall for a second program on U.S. soil in Trenton, New Jersey. The program brings together seven U.S. state legislators and seven German state parliament members to exchange ideas on how to tackle current international policy challenges. Energy policy is the designated topic for discussion at this week’s program, according to Weld.
OH Gov. DeWine Blames Biden. Ohio Gov. DeWine blames President Biden for gas prices. Ohio Gov. Mike DeWine blamed President Joe Biden for the high gas prices in a tweet on Thursday. The national average for a gallon of gas on Thursday is $4.41, according to AAA. It’s up more than 20 cents from a month ago and more than a $1.30 from a year ago. Prices in Ohio range from $4.23 to $4.41 a gallon. “Gas prices are at an all-time high. While Jon Husted and I have worked to keep pipelines open, President Biden and his Administration have restricted pipelines, driving up gas prices and hurting Ohioans,” DeWine said.
Europe Needs to Change for LNG Imports. ‘Reality bites’: LNG executives agree Europe must change approach to imports. European nations seeking to replace Russian natural gas with US liquefied natural gas imports are facing a difficult choice to either change their business approach or suffer the results of a near-term energy shortfall, according to leading industry executives. Panelists at the S&P Global Commodity Insight’s LNG Conference in Houston said Europe is set to endure an unavoidable supply shortfall due to a lack of US LNG capacity and continued competition from Asia. “TTF pricing is now the premium price in the market,” said Brad Phillips, director of LNG marketing for Freeport LNG in Texas. “[European] utility companies are between a rock and a hard place. These companies had to go out unexpectedly and procure LNG spot cargoes at ludicrous prices.”
U.S. Pipeline Operators Getting Ready for Higher Shale Output. The volume of crude oil flowing on pipelines from the top U.S. shale field to export hubs on the U.S. Gulf Coast could surge to pre-pandemic levels by October, analysts said, signaling the end of desperate days for some Texas oil pipeline operators. The pandemic doused a shale-oil pipeline construction boom that had added 2.5 million barrels per day export capacity from West Texas to hubs on the U.S. Gulf Coast. As Permian output rises, “spare capacity will begin tightening and tariffs to the water should return to a more normalized level,” Willie Chiang, chief executive officer at oil pipeline operator Plains All American (PAA.O), said in a call with investors last week.
Senate and House Democrats Support the O&G Industry. Senate, House Democrats show why Gulf of Mexico oil & gas is a bipartisan endeavor. Wednesday, the Senate approved language calling for Senate negotiators to support the issuance of a new Five-Year Program for offshore oil and gas leasing as soon as possible and that the new program should include at least two area-wide lease sales per year. The Senate voted on this language as part of the Motions to Instruct for the upcoming negotiations around the China competitiveness bill. Notably, the vote passed with support from four Democrats. National Ocean Industries Association (NOIA) President Erik Milito issued the following statement in response to the Senate vote and the House letter. “The benefits that flow from the Gulf of Mexico oil and gas industry are vast and they lift every American,” Milito said. “Supporting the Gulf of Mexico energy industry should always be a bipartisan endeavor, and we applaud Senators Manchin, Sinema, Hickenlooper, and Kelly and Representatives Gonzalez, Cuellar, Garcia, and Fletcher for their leadership and for standing up for what is a national strategic energy asset.”
More PA Pipelines. Here’s Why Pennsylvania needs more natural gas, pipeline infrastructure. Opinion. As Russia’s unprovoked invasion of Ukraine, and most recent action to cut off gas supplies to Poland and Bulgaria, continues to impact already volatile energy markets, the European Union (EU) is looking to the U.S., the world’s largest producer of natural gas, for help. In an effort to diminish Europe’s reliance on Russian natural gas, President Biden and the EU announced an agreement establishing a joint task force to expand U.S. liquified natural gas (LNG) exports. Additionally, the Department of Energy recently approved four new LNG permits for projects in Texas and Louisiana. Welcome news, certainly. Yet, while the White House strikes a deal to send more LNG to Europe, the administration unveils astoundingly contradictory policies that undermine America’s energy leadership and ability to deliver cleaner, reliable U.S. LNG across the Atlantic.
New York Leads America Off a Renewable-Energy Cliff New York leads America off a renewable-energy cliff. Wall Street Journal. The Biden administration blames the energy crisis on Vladimir Putin and America’s energy producers. In reality, it’s the result of a failed approach that pursues unattainable green-energy goals instead of realistic ones. If this approach continues, costs will keep skyrocketing while dependence on foreign sources increases. That’s what happened in my home state. Large portions of New York sit atop massive but untapped sources of natural gas. The Utica Shale stretches from my congressional district into Pennsylvania, West Virginia, Maryland and Ohio. It contains 38 trillion cubic feet of natural gas, 940 million barrels of oil and 208 million barrels of natural-gas liquids.
PA Permit April May 2, to May 12 2022
County Township E&P Companies
1. Greene Center Rice
2. Greene Center Rice
3. Greene Morris EQT
4. Lycoming Gamble Seneca
5. Susquehanna Bridgewater Coterra
6. Tioga Delmar Seneca
7. Tioga Delmar Seneca
8. Tioga Delmar Seneca
9. Washington Amwell EQT
10. Washington Fallowfield Rice
11. Westmoreland Penn Olympus
12. Westmoreland Penn Olympus
OH Permits May 1, to May 7, 2022
County Township E&P Companies
1. Columbiana Hanover EAP OHIO
2. Columbiana Hanover EAP OHIO
3. Columbiana Hanover EAP OHIO
4. Guernsey Madison Ascent
5. Guernsey Madison Ascent
6. Guernsey Madison Ascent
7. Guernsey Madison Ascent
8. Harrison Archer EAP OHIO
9. Harrison Archer EAP OHIO
10. Harrison Archer EAP OHIO
11. Harrison Archer EAP OHIO
WV Permits May 2, to May 6, 2022
1. Wetzel Antero
2. Wetzel Antero
3. Wetzel Antero
4. Wetzel Antero
5. Wetzel Antero
6. Wetzel Antero
Joe Barone, , 610.764.1232