Shale Directories Conferences
November 10, 2022
Hilton Garden Inn, Southpointe
Canonsburg, PA (near Pittsburgh)
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Toby Rice Gives Tour to 15 Washington Embassies. Over the roar of hydraulic fracturing machinery, the boss of America’s biggest natural gas producer weaves through a gaggle of foreign diplomats, sprinkling fine grains of sand into their hands.
Kitted out in company-branded hard hat and shirt, Toby Rice, chief executive of EQT, is in sales mode as he glad-hands dignitaries in the Pennsylvania sunshine.
He has bussed two dozen officials from 15 Washington embassies 230 miles deep into the shale gas heartlands to promote his answer to the energy crisis that is unfolding as the world searches for replacements to Russian fuel exports.
“That solution is unleashing US LNG,” he said, referring to liquefied natural gas, the chilled, condensed form of gas that can be funneled into tankers and shipped overseas.
As Europe tries to disconnect itself from Russian supply in the wake of Moscow’s invasion of Ukraine, proponents of the US gas industry see a huge opportunity for their LNG exports to plug the gap. Critics see a cynical ploy to use a foreign war to push more fossil fuels.
The frac sand Rice is sharing will be used to prop open fissures in rock deep underground to release gas from the Marcellus and Utica shale plays of the Appalachian basin — the epicenter of American production.
The US is the world’s leading producer of natural gas, pumping around 96bn cubic feet a day. In the first four months of the year, the country exported 11.5bn cu ft/d of gas in the form of LNG, three quarters of which went to Europe.
The sum is set to rise. In a deal struck with the Biden administration, Brussels has pledged to increase EU demand for American gas by 4.8bn cu ft/d by the end of the decade. For Rice, that is only a starting point: he wants the US to more than quadruple its global LNG exports to 55bn cu ft/d by 2030 — more than total European consumption.
“I’ve never been more excited about the future,” Rice said. “We need to recognize the fact that we are in a bad situation right now. And we need to unleash our resources — unleash American energy.”
The change in fortunes for the US gas industry has been rapid. Just 18 months ago its prospects looked bleak. A $7bn deal between French utility Engie and Texas LNG group NextDecade fell apart over concerns over the environmental impact of US gas.
But today the winds have changed as the geopolitical situation pushes energy security ahead of climate concerns in many countries. “The war in Ukraine has clarified a lot of minds,” said Fred Hutchison, president of the US LNG Association, the Washington-based lobby group that organized this week’s diplomatic bus tour. “There’s one hell of a scramble on right now.”
EQT’s own share price has more than doubled since the beginning of the year. The company’s first-quarter production volumes of 492bn cu ft were up by 19 per cent from the previous year, while its adjusted net income quadrupled to $334mn.
Still, while gas might be cleaner burning than coal, its combustion for heat and power pumps huge volumes of carbon dioxide into the atmosphere — reaching an all-time high of 7.35bn tonnes last year, according to the International Energy Agency. Expanding gas export infrastructure risks locking in dependence on fossil fuels that the world needs to shift away from if global warming is to be contained.
John Kerry, President Joe Biden’s climate envoy, this week blasted what he called “vested interests” that he said were “trying to exploit Ukraine and tell people we need a whole new generation of infrastructure built out” that would undermine climate targets.
US oil and gas operations also spew around 13mn tonnes of methane into the atmosphere annually, according to the Environmental Defense Fund. A far more potent greenhouse gas than CO₂ in the short term, methane is the primary component of natural gas.
“Methane is an issue we attach great importance to — we are looking for greener and cleaner natural gas,” said Thitiwat Sukhasvasti, a counsellor from the Thai embassy who joined the tour.
As the diplomats were shuttled between fields scattered with bales of hay and shining tractors, EQT talked up its measures to clamp down on leaks and clean up the production process. Some were impressed.
“For me personally, fracking was kind of a bad word — maybe up until today,” said Gints Zadraks, a counsellor at the Latvian embassy.
Yet, even beyond pollution, there are big challenges to any expansion of US LNG exports. Pipeline projects to carry gas from Appalachia to the coast have faced dogged opposition, forcing some to be cancelled.
For now, the country’s seven LNG export terminals are running flat out. One of these — the Freeport LNG facility on the Texas coast — was taken offline this week after an explosion, putting around a fifth of US capacity out of action for the next three weeks.
Chesapeake Moving into LNG. Chesapeake Energy aims to expand push into LNG with market adviser. Shale gas producer Chesapeake Energy plans to hire a liquefied natural gas (LNG) adviser, according to a job listing, as it seeks to expand into the fast-growing export market. U.S. natural gas producers have seized on LNG for future output, with several developing ties with gas buyers, LNG producers and pipeline operators. U.S. LNG exports rose 50% last year, to 9.7 billion cubic feet per day. The Oklahoma City firm, which does not currently produce LNG, wants someone to “lead new business opportunities for Chesapeake” in LNG and provide executives with “guidance on LNG marketing activities,” according to a LinkedIn posting.
Pittsburgh International Airport, known to fliers by the three-digit code PIT, is stepping up its natural gas development partnership with Appalachian Basin-focused independent CNX Resources Corp.
PIT Airport and CNX to Produce LNG at the Airport. PIT and CNX last month launched another phase of their public-private partnership, which includes a revenue-sharing deal for CNX-operated Marcellus Shale wells on airport property and a 20-MW natural gas-solar microgrid that supplies all of the airport’s electricity.
Under the latest deal, CNX plans to develop Utica Shale wells on airport property. It would deploy proprietary autonomous separation technology to convert dry gas produced onsite into liquefied natural gas (LNG), compressed natural gas (CNG) and electricity. Electricity also could be used to produce hydrogen, among other uses.
“In a nutshell, it’s a technology that leverages the ultra-high pressure of a Utica well and uses that pressure to create LNG and CNG and electricity,” CNX’s Yemi Akinkugbe, chief excellence officer, told NGI.
He said the technology could be deployed at the wellsite to create the derivative product, LNG or CNG, as well as “generate electricity that could be the feedstock for a future maturation of hydrogen.”
Citing intellectual property issues, the company disclosed few other specifics about the technology.
Akinkugbe said CNX’s technology deployment at PIT could highlight the potential role for natural gas in helping the aviation industry to decarbonize.
“LNG is improving as a potential aviation fuel going forward,” Akinkugbe said. “The key is getting the industry to embrace LNG as a sustainable aviation fuel. We’re saying this is an alternative that has a low cost, a much lower emissions signature and also benefits the region.”
PIT would “help bring more partners to the table” on the sustainability front, airport CEO Christina Cassotis told NGI.
“We’ve already been moving in this direction,” she said. “Last year, we became the first airport in the world to be completely powered by a microgrid powered by natural gas and solar energy.”
Besides LNG, CNG could be used for airport ground transportation, and hydrogen could ultimately be used to fuel planes as well as ground vehicles, Akinkugbe said.
CNX and PIT, whose partnership began nine years ago with the airport authority signing a deal with then-Consol Energy Inc., also envision creating a “sustainable fuel hub at PIT,” with LNG and CNG fueling depots for airlines, transit, cargo, fleet, military and other purposes.
“Natural gas and derivative products provide a path for the transportation industry both to reduce carbon emissions in the short term while working toward a goal of net-zero in the long term as hydrogen and other potential solutions mature,” said Cassotis.
She called the Utica deal with CNX “a massive opportunity to both lead the way on a transformational fuel strategy to reduce carbon emissions while cementing Pittsburgh’s role as an innovative world leader.”
Although PIT sits atop multiple natural gas fields, Akinkugbe said the technology could be used to produce derivatives at other airports without an underground natural gas bounty.
CNX said the partnership has generated nearly $105 million in lease and royalty revenues for the airport within the past decade.
“These funds are used to lower airline rates and charges as well as for capital projects,” Cassotis said.
By 2030, CNX projects another $24 million in royalties to PIT from existing Marcellus operations and an additional $27 million from the Utica deal.
The Utica “deal is an opportunity to make a global impact on reducing emissions now through LNG and CNG as we work toward a solution with hydrogen,” said Cassotis.
Akinkugbe told NGI the technology is currently being “fine-tuned” but could begin operations sometime in the 2023-2024 time frame.
MVP Tries One More Time. Mountain Valley Pipeline seeks new appellate court panel to hear legal challenges. Unhappy with the way it has been treated by a three-judge panel of an appellate court, Mountain Valley Pipeline is asking for a new slate of judges to hear the next round of its long-running legal battle with environmentalists. In an unusual move, the company building a natural gas pipeline through Southwest Virginia filed a motion last month requesting the 4th U.S. Circuit Court of Appeals to assign a new panel at random. Mountain Valley is hoping for better luck than it had with a panel that presided over 12 earlier challenges of government approvals for it and the now-defunct Atlantic Coast Pipeline. Those three judges, it says, vacated or stayed all but two of the permits, effectively killing Atlantic Coast and threatening to do the same for Mountain Valley.
NatGas Prices Fall Due to LNG Facility Fire. Fire at key us gas export terminal a blow for fuel-starved world. An explosion at a Texas liquefied natural gas plant that promises to reduce exports for weeks, lowering prices for the fuel in the US while boosting them in Europe. The Freeport LNG export facility will remain closed for at least three weeks after a fire on Wednesday, a company spokesperson said. It issued a force majeure to buyers with shipments scheduled till at least June 30, according to traders with knowledge of the matter. Almost a fifth of all overseas shipments of gas from the US went via the terminal last month.
NatGas Boom Returning to PA. Gas boom reboot predicted. An area law firm that has built a solid practice representing gas drilling companies in Pennsylvania is predicting a resumption of the gas boom following the COVID-19 slowdown. Pennsylvania is the second highest-producer of natural gas in the country, thanks to the Marcellus shale, where gas companies are employing hydraulic fracturing, or fracking, at well sites in the Northern Tier and in western Commonwealth counties. Fracking involves injecting liquid at high pressure to fracture subterranean rock to extract gas or oil.
New Method to Recycle Frac Water. Engineers develop method that can recycle water used in fracking and drilling. As demand for new energy sources grows, the wastewater co-produced alongside oil and gas (produced water) shows no signs of slowing down: The current volume of wastewater—the result of water forced underground to fracture rock and release the deposits—is estimated at 250 million barrels per day, compared to 80 million barrels per day of oil. Engineers at the University of Pittsburgh Swanson School of Engineering are developing a new way to reduce the environmental impact of drilling and fracking by cleaning the produced water for reuse, and it’s already being tested in Pennsylvania, Texas and North Dakota.
API Leads More Than 80 Groups to Challenge Biden. The American Petroleum Institute, Consumer Energy Alliance, Louisiana Mid Continent Oil and Gas Association, National Oceanic Industry Association and U.S. Chamber of Commerce today joined with more than 80 trade groups representing a diverse cross section of industries in calling on the Biden administration to act on policies that support U.S. energy security and increase domestic production of natural gas and oil. In a letter to President Biden, the signatories urged the administration to implement a new 5-year program for federal offshore leasing as soon as possible.
“For the U.S. to continue to be an energy leader into the future, smart and effective energy policies are needed today. However, your administration’s policies have often hindered domestic producers’ ability to deliver on this growing demand. Oil and natural gas leasing on Federal lands and waters has essentially stopped, despite court orders, and while DOI has taken steps to complete and implement the next 5-year Program, there will be an unprecedented gap between the current and next 5-year Program,” the letter states.
The letter follows testimony from Secretary Haaland last month, during which the Secretary confirmed that the Department of Interior (DOI) is far behind in the process of developing and implementing a 5-year program and will not have a new plan in place by the time the current program expires on July 1. Offshore production in the Gulf of Mexico currently represents over 15% of natural gas and oil production and is among the lowest carbon-intensive production in the world. Without a 5-year program in place, no new offshore lease sales can be held, leaving future domestic production in jeopardy.
“We are at a critical time where a lack of federal action and regulatory uncertainty may discourage companies from making the multi-billion-dollar investments needed to develop offshore resources in the U.S. and ensure the long-term viability of a lower-carbon national strategic asset,” the letter states. “If the door closes to new U.S. production, investment dollars will instead flow abroad to more active basins to the detriment of American workers, energy consumers, and the environment.”
The letter outlines the following actions that the administration can take to avoid further economic impact and help ensure accessible, affordable, and reliable energy here in the United States:
· Execute the laws that mandate the DOI complete a long-term offshore leasing program with robust lease sales to avoid unnecessary production and development disruption. This requires the prompt completion of the steps necessary to finalize the OCS Leasing Program for 2022-2027. The expected delay will harm American investment, production, and jobs. The delays are already having an impact on investment and jobs throughout the supply chain.
· Provide certainty on oil and natural gas leasing by compelling the DOI to meet deadlines and honor its obligation to lease on federal lands and waters.
NatGas Production at All-Time High in the Permian. Permian natural gas production hits all-time high. Permian Basin marketed natural gas production capped off a steady rise by reaching a new annual high in 2021, according to the Energy Information Administration. The EIA said Permian Basin marketed natural gas, which has been rising steadily since 2012, reached 16.7 billion cubic feet per day. The agency said the Permian Basin is the nation’s second-largest shale gas-producing region after the Appalachian Basin, which produced an average of 34.8 Bcf per day in 2021. Tall City Exploration III is one of the Permian Basin producers that has noticed that increase in production.
$140 Oil. Goldman Sachs predicts $140 oil as gas prices spike near $5 a gallon. High oil and gasoline prices will need to rise even higher this summer to incentivize new production and discourage consumption, according to Goldman Sachs. The Wall Street bank is now forecasting Brent crude oil prices will average $140 a barrel between July and September, up from its prior call of $125 a barrel. Brent is currently trading at about $120 a barrel. Worse, Goldman Sachs said summer retail gas prices are going to need to spike to levels normally associated with $160 oil in order to curtail demand. “A large spike in prices remains quite possible this summer,” Goldman Sachs strategists wrote in a report to clients.
OH’s Shale Industry Attracted $2.3 Billion. Ohio’s growing shale energy industry attracted $2.3 billion in direct investment in the first half of 2021, with cumulative investment reaching $95.3 billion. JobsOhio. Total investment in Ohio’s resource-rich shale energy sector was approximately $2.3 billion in the first half of 2021, according to a Cleveland State University (CSU) study. Prepared for JobsOhio, the latest report covers shale investment from January through June 2021 and cumulates total investment from 2011 forward. The study from CSU’s Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs revealed that, with previous investments to date, cumulative oil and gas investment in Ohio through June 2021 is estimated to be $95.3 billion. Of this, $65.9 billion has been in upstream, $21.4 billion in midstream, and $8.0 billion in downstream industries.
Permian Oil and Gas Growth Through 2023. Permian Basin oil and gas growth expected to lead U.S. in production through 2023. Carlsbad Current Argus. Energy companies continued to invest in the Permian Basin of southeast New Mexico and West Texas, an area believed to be among the most lucrative oil and gas regions in the world, as fuel demand surged, and fossil fuel producers sought to increase production. Orion Diversified Holding was the latest to purchase property in the region as it hoped to capitalize on the area’s growth. The company announced its purchase of 9,280 acres in Pecos County, Texas, near the state’s border with New Mexico in the western Delaware sub-basin, along with five oil and gas wells in Ector County near Odessa, Texas on the eastern side within the Midland sub-basin.
Laredo Energy Considering Sale. Laredo Energy VI Explores Sale Worth Up to $1 Billion. Bloomberg. The owners of Laredo Energy VI LP, a gas driller focused in the Eagle Ford Shale in South Texas, are considering a sale of the company worth up to $1 billion, according to people with knowledge of the situation. The company is working with an adviser to run an auction process for the assets and has opened its data room to potential suiters, said the people, who asked not to be identified because they weren’t authorized to speak publicly. The sale process comes about two years after holders of Laredo’s term loan due 2021 led by Riverstone Credit Partners and Chambers Energy Capital swapped their holdings into a majority equity stake, while private equity sponsor Avista Capital Partners kept a small slug of ownership, the people said.
PA Permit May 30, to June 9, 2022
County Township E&P Companies
1. Bradford Overton Chesapeake
2. Bradford Overton Chesapeake
3. Bradford Springfield Blackhill Energy
4. Fayette Luzerne EQT
5. Tioga Liberty PA GEN Energy
6. Tioga Liberty PA GEN Energy
7. Tioga Liberty PA GEN Energy
8. Washington Blaine Range
9. Washington Blaine Range
10. Washington Blaine Range
11. Westmoreland Penn Olympus
12. Westmoreland Upper Burrell Olympus
13. Westmoreland Upper Burrell Olympus
OH Permits May 29, to June 4, 2022
County Township E&P Companies
1. Belmont Richland Ascent
2. Belmont Richland Ascent
3. Carroll Monroe EAP OHIO
4. Carroll Monroe EAP OHIO
5. Guernsey Richland Utica Resources
6. Harrison Moorefield Ascent
WV Permits May 30, to June 3, 2022
1. Ritchie Antero
Joe Barone 610.764.1232