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
The Energy Crisis Will Deepen by Daniel Yergin. Today’s global energy crisis could turn out to be even worse than what the world experienced in the 1970s. Much will depend on more informed collaboration between governments and industry leaders, with policymakers properly understanding and managing the energy flows on which modern economies depend.
Is today’s energy crisis as serious as similar previous ones – particularly the 1970s oil shocks? That question is being asked around the world, with consumers hit by high prices, businesses worried about energy supplies, political leaders and central bankers struggling with inflation, and countries confronting balance-of-payments pressures.
So, yes, this energy crisis is as serious. In fact, today’s crisis is potentially worse. In the 1970s, only oil was involved, whereas this crisis encompasses natural gas, coal, and even the nuclear-fuel cycle. In addition to stoking inflation, today’s crisis is transforming a previously global market into one that is fragmented and more vulnerable to disruption, crimping economic growth. And, together with the geopolitical crisis arising from the war in Ukraine, it is further deepening the world’s great-power rivalries. Today’s energy crisis did not begin with Russia’s invasion of Ukraine, but rather last year when energy demand surged as the world emerged from the COVID-19 pandemic. That is when China ran short of coal and prices shot up. The global market for liquefied natural gas (LNG) then tightened, with prices skyrocketing, and oil prices rose as well. Normally, with rising energy prices, a country like Russia would have increased its natural-gas sales to its main customer, Europe, above the minimum contracted volumes. Instead, it stuck to its contracts, even though it could have produced considerably more. At the time, it appeared that Russia was trying to force prices up. But, instead, the Kremlin may well have been preparing for war. Because Europe depended on Russia for 35-40% of its oil and natural gas, Putin assumed that the Europeans would protest the invasion but ultimately stand aside. Fixated on his self-appointed mission of restoring what he views as Russia’s historic empire, he did not anticipate how they would respond to an unprovoked war next door. Looking ahead, five factors could make today’s energy crisis even worse. First, Putin has opened a second front in the conflict by cutting back on the contracted volumes of natural gas that Russia supplies to Europe. The goal is to prevent Europeans from storing enough supplies for next winter, and to drive prices higher, creating economic hardship and political discord. In his speech in June at the St. Petersburg International Economic Forum, Putin made his reasoning clear: “Social and economic problems worsening in Europe” will “split their societies” and “inevitably lead to populism … and a change of the elites in the short term.”
As it is, Germany is now anticipating the need for gas rationing, and its minister for economic affairs, Robert Habeck, warns of a “Lehman-style contagion” (referring to the 2008 financial crisis) if Europe cannot manage today’s energy-induced economic disruptions.
Second, a new or revived nuclear deal with Iran is unlikely. Thus, sanctions on the country will not be lifted – and that means Iranian oil will not be flowing into world markets anytime soon. Third, although Saudi Arabia may step up its oil production to help “stabilize” oil markets in connection with US President Joe Biden’s upcoming visit, no gusher is likely to follow, because there does not appear to be a large amount of extra oil in Saudi Arabia (or in the United Arab Emirates) that can be produced on short notice. Meanwhile, many other oil-exporting countries cannot even return to their previous levels of production, owing to a lack of investment and maintenance since the pandemic. Fourth, China’s demand for oil has been significantly reduced by its “zero-COVID” lockdowns, which have sharply curtailed economic activity. But if it lifts many restrictions, a big increase in oil consumption and demand will follow. Lastly, however tight the market for crude oil, there is even more tightness in the refining sector that produces the gasoline, diesel, and jet fuel that people actually use. This sector has developed into a complex, highly interconnected worldwide system. Russia was refining products that it was shipping to Europe, while Europe was sending gasoline that it did not need to the US East Coast, and so forth. In some places, the system is going all out, with US refineries already operating at about 95% capacity. But the system overall still cannot keep up with demand. Russian refineries are functioning only partly, depriving Europe of oil products; and not enough European gasoline is reaching North America. Chinese refineries are operating at less than 70% capacity. Some four million barrels per day of refining capacity have been shut down worldwide, owing to the pandemic, new regulations, and challenging economics. Add in the risk of accidents, poor policy decisions, and a hurricane knocking out refineries on the US Gulf Coast, and the situation could get even worse. That said, a few countries could still boost production. Canada – the world’s fourth-largest oil producer, after the US, Saudi Arabia, and Russia – could provide extra barrels in collaboration with its major market, the US. And US shale oil production is back in gear and could add 800,000 to one million barrels per day of new production this year – far more additional production than the rest of the world combined. Other factors that could mitigate the crisis include price changes and how consumers respond. In May, US gasoline demand was 7% less than in May 2019, before the pandemic. Some of that, however, may be the result of more people working from home. An economic slowdown could also dampen prices. S&P’s latest global purchasing managers’ index points to a weakening of economic growth, with US manufacturing activity “slipping into a decline … to a degree only exceeded twice” – at the height of the pandemic lockdown and during the 2008 financial crisis. Likewise, European growth has slowed sharply to a 16-month low. Such slowdowns could reduce demand and lower energy prices. But, of course, they also will strain the Western alliance and popular unity.
The next six months will be critical, testing whether Europe can maneuver its way through the coming winter. In what Habeck called a “bitter” but “necessary” decision, Europe will need to burn more coal. In the difficult months ahead, there will need to be more informed collaboration between government and the industry that manages the energy flows on which modern economies depend.
Global NatGas Markets Getting Scared. Europe’s natural-gas markets are starting to digest the real possibility of Vladimir Putin cutting off supplies to Germany. If the Russian President really does close the taps, though, things would get much uglier. The cost of liquefied natural gas—Europe’s alternative to Russian pipeline gas—to be delivered to the region this year has more than doubled in the past month to around $50 per million British thermal units, or MMBtu. Prices for delivery in the years ahead have also successively crept up as traders bet on gas shortages in Europe until significant new LNG supplies come online. Recent moves reflect mounting worries that Moscow will stop piping gas into Germany. A handful of European countries have been cut off already, and supplies delivered down Nord Stream 1, a main artery for Russian gas into Europe, were reduced to 40% capacity last month.
Exposing the Renewable Lie. (Thanks, MDN) In 2012, fossil fuels accounted for roughly 82% of total U.S. energy consumption. We have seen an incredibly aggressive pro-renewable push since then, with countries (including the U.S.) pledging to hit net-zero emissions by 2050 as part of the 2015 Paris Agreement. Not a day goes by without an article in Big Media about renewables like wind and solar taking over “any day now.” Fossil fuels are passe, the past, almost gone, on the way out, killing the planet, etc. etc. And yet, renewables ARE NOT taking over. According to the U.S. Energy Information Administration (EIA), fossil fuels accounted for 79% of total U.S. energy consumption in 2021–a drop of 3% in 10 years.
Expensive Oil Will Be With Us a Long Time. The era of expensive oil is here to stay. Bloomberg. On July 6 the global benchmark for oil slid below $100 a barrel for the first time since April, raising the hopes of politicians, business owners, and drivers around the world that the days of high fuel prices were coming to an end. In fact, the underlying dynamics of oil supply and demand point to a prolonged period of higher prices, lasting months if not years. Demand for fuel is still growing as the world picks up where it left off before Covid-19 lockdowns. There’s a shortage of refineries to turn oil into fuel. And the world’s largest oil producers are hitting up against the limits of what they can drill. All this as Vladimir Putin’s war suppresses exports from Russia. At the most fundamental level, the world is now struggling to produce all the oil it needs.
Wall Street’s Says “It’s not boycotting fossil fuel companies.” But they are! Financial giants tell Treasurer they are not boycotting fossil fuel companies. WV Metro News. Big financial companies put on notice by West Virginia’s state treasurer are objecting. The state Treasurer’s Office last month sent letters to six of America’s largest investment companies, warning that they may be ineligible for some West Virginia contracts, alleging that they engage in “boycotts” of fossil fuel companies that remain major aspects of the state’s economy. The warnings came about after this year’s passage of Senate Bill 262, directing the Treasurer to keep a list of financial institutions that steer clear of investments in fossil fuel companies. BlackRock Inc., Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo, each have responded to say they do not engage in boycotts of fossil fuel companies. Instead, they contend that they provide guidance to investors based on assessing risk. MetroNews obtained the responses through a Freedom of Information Act request to the state Treasurer. A sixth company, U.S. Bancorp has until Wednesday to respond and has not done so yet.
Olympus Certifies NatGas. Appalachian pure-play Olympus certifies all-natural gas, midstream operations. NGI. Olympus Energy LLC has become the latest exploration and production (E&P) firm to claim the distinction of producing 100% certified natural gas after an analysis by Project Canary. Pittsburgh independent Olympus operates around 100,000 net acres with more than 10 producing wells in Marcellus, Utica and Upper Devonian plays of southwestern Pennsylvania. Olympus COO Mike Wahl told NGI the certification “adds approximately 140,000 MMcf/d” of certified natural gas to the market. The E&P expects that figure to grow as new production is evaluated by the certification process. Denver-based assessment company Project Canary gave Olympus platinum ratings, which is a designation that its with sustainability goals are higher than 90% of comparable companies.
TX vs. EPA. Ozone pollution standards may pit Texas against EPA. KERA News. The Permian Basin in West Texas and eastern New Mexico is one of the world’s most prolific oil and gas fields. It’s also critical to the state economy and biennial budget, which is largely funded by taxes on oil and gas. Anything to slow down production is likely to be viewed dubiously by state leaders, especially when the federal government is involved. That’s why a big fight may be brewing between Austin and Washington over new regulations by the Environmental Protection Agency. The EPA is currently mulling whether to declare certain Permian Basin counties in violation of federal ozone standards. James Osborne, who covers energy and politics for the Houston Chronicle, spoke with the Texas Standard about the potential showdown between Texas and the Feds.
Nexus Pipeline Approval Stands. FERC approval of Nexus natural gas pipeline exports to Canada upheld. NGI. Responding to a challenge filed by the City of Oberlin, OH, the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit) ruled Friday (July 8) that the Federal Energy Regulatory Commission acted appropriately under federal law when it granted a certificate to Nexus. The city had argued in part that FERC should not have considered demand for molecules bound for export when assessing the public need for the Nexus project. The court disagreed, finding FERC’s defense of its decision-making process reasonable in the case of Nexus. The 1.5 Bcf/d, 256-mile system is designed to connect Appalachian Basin supplies to markets in the Midwest, including the Dawn Hub in Ontario, Canada.
CNX to Utilize Methane Emissions. Newlight Technologies, Inc. (Newlight) and CNX Resources Corporation (NYSE: CNX) today announced that the companies have entered into a 15-year agreement to capture and utilize methane emissions for the production of Aircarbon®, a naturally-occurring molecule also known as PHB that replaces plastic but is carbon-negative and biologically degrades in natural environments.
Under the agreement, CNX and Newlight will work together to capture waste methane from third party industrial activity that would typically be vented to atmosphere. CNX will gather, process, and deliver the methane through new and existing natural gas pipeline infrastructure, and Newlight will acquire contractual rights to a portion of the captured methane to support the production of Aircarbon, similar to how solar, wind, and renewable natural gas are delivered contractually through new and existing grid infrastructure. Combined, by using greenhouse gas as a resource to make a naturally-occurring material that replaces plastic, the agreement will enable the large-scale reduction of both carbon emissions and plastic pollution.
“CNX is a world leader in methane capture and processing, and by partnering with their exceptional team, we will have the opportunity to meaningfully reduce the amount of carbon going into the air and plastic going into the ocean,” said Newlight CEO Mark Herrema. “Our goal is to abate methane emissions at world scale through the application of biological carbon capture, and this agreement takes us another step closer to that goal. We’re thrilled to have a strategic growth partner in CNX that shares our commitment to sustainable solutions and environmentally responsibly outcomes.”
The strategic partnership, with CNX capturing methane gas to support Newlight’s manufacturing needs, is expected to result in several manufacturing facilities in the Appalachian region and advance critical decarbonization goals while boosting area economic activity, capital investment, and job growth. The initial 15-year contract aligns with CNX’s commercial and capital allocation strategies in the decarbonization space and further solidifies Newlight’s position as a leader in carbon capture technology.
Newlight has recently announced plans to build a carbon capture-based manufacturing facility in partnership with Long Ridge Energy Terminal, a subsidiary of Fortress Transportation and Infrastructure Investors LLC in Hannibal, Ohio, and Newlight’s contractual rights to methane emissions derived from Newlight’s agreement with CNX will be used to create a portion of the Aircarbon being produced at the new Ohio facility. The greenhouse gas feedstock that will support production at the Ohio facility is also expected to include, over time, methane from anaerobic digestion of food and agricultural waste, as well as carbon dioxide from energy facilities and direct air capture.
“For years, government and economic development officials have worked to leverage the vast energy resources found in the Appalachian basin as a catalyst for economic growth and new manufacturing,” said CNX President of New Technologies Ravi Srivastava. “CNX is excited to work with Newlight to immediately accelerate those efforts.
Our Tangible, Impactful, Local ESG approach clearly demonstrates that assets and technologies unique to CNX and Appalachia can be leveraged to positively impact environmental and socio-economic challenges – from local to global – while ensuring that our region and the middle class are strengthened and supported in the process. We believe that is the definition of sustainability.”
Mr. Srivastava continued, “Like our recently announced partnership with Pittsburgh International Airport, our work alongside Newlight will showcase CNX’s unique combination of assets, innovative technologies, and proven operational expertise that are poised to help lead the sustainable energy revolution.”
Launching its first commercial-scale Aircarbon production facility in 2020, today Newlight’s customers and partners include consumer brands such as Shake Shack, Nike, Target, H&M, Ben and Jerry’s, Sumitomo, U.S. Foods, and Sysco.
EPA May Finally Be Calling Off the Dogs. EPA faces legal dead ends after SCOTUS climate decision. E&E News. Regulators at EPA will have to draft fresh carbon rules for power plants without knowing if they’ll survive the legal uncertainty created by the Supreme Court’s climate decision last month. That thrusts the agency into a yearlong process of writing rules to reduce power sector emissions with the risk that whatever they do could run afoul of the high court. If EPA runs repeatedly into legal dead ends as it refines its understanding of what the court will accept, it would leave the power grid unregulated for carbon for much of the decade, while potentially leading regulators to offer insufficient climate rules that might be accepted by the conservative court.
Pipelines Need to Realize True LNG Potential. What is keeping America from realizing its LNG potential? Oilprice. The United States is shipping record volumes of liquefied natural gas (LNG) to Europe to help EU allies in their efforts to fill gas storage ahead of the winter amid growing uncertainty about Russian gas supply. For the first time ever, the European Union imported in June more LNG from the United States than gas via pipeline from Russia, as Moscow slashed supply to Europe in the middle of last month. Going forward, demand for U.S. LNG is set to remain robust as Europe races to reduce its dependence on Russian pipeline gas. In the U.S., LNG export capacity is growing as new trains at Sabine Pass and Calcasieu Pass came online this year. But in order to continue growing, the LNG industry will need more domestic midstream infrastructure – pipelines – to carry natural gas from production centers to LNG export terminals on the U.S. Gulf Coast and demand centers on the Eastern Seaboard.
PA Permit July 5, to July 14, 2022
County Township E&P Companies
1. Allegheny Elizabeth Olympus
2. Allegheny Elizabeth Olympus
3. Allegheny Elizabeth Olympus
4. Allegheny Elizabeth Olympus
5. Allegheny Elizabeth Olympus
6. Bradford Asylum Chesapeake
7. Bradford Asylum Chesapeake
8. Bradford Troy Repsol
9. Bradford Troy Repsol
10. Bradford Troy Repsol
11. Bradford Troy Repsol
12. Bradford Troy Repsol
13. Bradford Troy Repsol
14. Bradford Wyalusing Chesapeake
15. Bradford Wyalusing Chesapeake
16. Bradford Wyalusing Chesapeake
17. Bradford Wyalusing Chesapeake
18. Butler Oakland Lola Energy
19. Susquehanna Bridgewater Coterra
OH Permits July 3, to July 9, 2022
County Township E&P Companies
1. Belmont Wayne Gulfport
2. Carroll Monroe EAP Ohio
3. Carroll Monroe EAP Ohio
4. Carroll Monroe EAP Ohio
5. Carroll Monroe EAP Ohio
WV Permits July 4, to July 8, 2022
1. Doddridge Antero
2. Doddridge Antero
3. Doddridge Antero
4. Doddridge Antero
5. Doddridge Antero
6. Doddridge Antero
7. Doddridge Antero
8. Marshall Tug Hill
Joe Barone 610.764.1232