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
Americans Don’t Need OPEC. Texas energy leader: Americans don’t need OPEC+, they need U.S. oil & gas. World Oil. Press Release. Railroad Commission of Texas Chairman Wayne Christian issued the following statement regarding the decision by the Organization of Petroleum Exporting Counties and Russia (OPEC+) to cut crude oil output by two million barrels per day. With U.S. energy costs up more than 20% and gasoline prices rising again to almost $4 a gallon, Chairman Christian urges President Biden to unleash domestic oil and natural gas production to lower prices for consumers. “Winter is coming: the U.S. and our European allies need more U.S. oil and gas today—not after the midterm election,” said Chairman Christian. “OPEC+ and Putin aren’t the answer to our energy security. Harnessing the Permian Basin is. We achieved energy independence under former President Trump in 2019 by increasing U.S. production, and we can do it again.”
Administration Tells Europe “We have your energy back, but tell U.S. refiners stop sending products to Europe.” The American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM) today released the following statement after a meeting that included Secretary of Energy Jennifer Granholm, senior White House officials and leaders of the top U.S. refining companies:
“U.S. refiners and administration officials met to discuss current market imbalances and our industry’s ongoing work to efficiently and affordably supply fuel to the U.S. market. As the administration refuses to rule out limitations on exports, we shared the significant unintended consequences that would come with such a policy, including potential cost increases, refinery closures, job losses and productivity declines.
“The administration continues to govern with contradictory energy policies and rhetoric. On the one hand committing to provide energy resources to our allies while at the same time threatening limitations on exports; talking about the need for permitting reform to accelerate critical energy infrastructure while actively cancelling pipelines; talking about the need for more supply while restricting access to additional federal oil and gas leasing; talking about reducing costs while increasing taxes on domestic producers during a time of historically high inflation.
“The focus of this administration should not be on trapping product in the United States or diverting fuel away from retail sales and into storage, but rather, on how to better produce and more affordably move U.S. product within the United States. The oil and natural gas industry stands ready to continue to meet U.S. consumers’ need for affordable, reliable energy while supporting our allies around the world. “
The American Petroleum Institute (API) President and CEO Mike Sommers and American Fuel and Petrochemical Manufacturers (AFPM) President and CEO Chet Thompson today sent a letter to U.S. Secretary of Energy Jennifer Granholm raising significant concerns that the administration could pursue a ban or limits on refined petroleum products.
“Banning or limiting the export of refined products would likely decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices, and alienate U.S. allies during a time of war,” Sommers and Thompson wrote.
“From the United States’ approximately 18 MMBD of refining capacity, about 3.5 MMBD of gasoline, diesel, and other refined products are exported,” Sommers and Thompson said. “Restricting these exports would cut off important supply from the international market, putting upward pressure on prices, threatening the global flow of essential energy, undermining U.S. allies and creating negative global economic consequences, including here in the United States.”
“Global commodity prices—including for crude oil, gasoline, and diesel—are set by the global market, not by refiners, in the same way, that farmers do not control the price of corn or wheat,” Sommers and Thompson wrote. “Gasoline and diesel fuel prices are primarily driven by the cost of crude oil, which accounted for much of the changes in gasoline and diesel prices through the first seven months of 2022. Refiners’ crude oil acquisition costs represented close to 60 percent of the retail price at the gasoline pump in 2022, according to the EIA.”
“The U.S. refining sector, bolstered by our technologically advanced facilities and best-in-class workforce, is the most competitive, efficient, and resilient in the world. Participation in the global market is foundational to our position as the world’s refining leader, benefitting American consumers and fuel manufacturers alike,” Sommers and Thompson said.
Sommers and Thompson concluded, “We urge the Biden administration to speak clearly and with one voice to disavow a refined product export ban or export restrictions, which would only further raise global and U.S. prices, roil energy markets, and deter needed investments across the U.S. energy supply chain. Your understanding and collaboration would be helpful to further a constructive dialogue.”
NatGas to Remain Tight. Natural gas markets expected to remain tight into 2023 as Russia further reduces supplies to Europe. IEA. Press Release. European demand for LNG sets off global competition for supplies, even as demand tumbles in Europe and Asian growth stalls, according to latest IEA market report. Russia’s continued curtailment of natural gas flows to Europe has pushed international prices to painful new highs, disrupted trade flows and led to acute fuel shortages in some emerging and developing economies, with the market tightness expected to continue well into 2023, according to the IEA’s latest quarterly Gas Market Report.
Shell Cracker Cranking Up Soon. An ethane cracker in western Pa. will soon start up. We answered your questions about it. The Allegheny Front. Shell’s ethane cracker is scheduled to come online soon, producing up to 1.6 million metric tons of plastic pellets a year. The plant will produce this plastic by processing ethane, a component of the natural gas found in the Marcellus and Utica shale formations nearby. Construction of the plant was Pennsylvania’s largest industrial project since World War II, according to Gov. Tom Wolf, and benefitted from the largest state subsidy ever – a $1.65 billion tax credit, plus various state and local tax breaks. More than 8,500 construction workers, many from out of state, crowded Beaver County over the last few years to construct the plant. When it is finished, it will employ 600 permanent workers.
Transco Pipeline Hearing in PA. Pa. DEP hearing about proposed pipeline draws support, environmental concerns. Audacy. The Pennsylvania Department of Environmental Protection got mixed reactions during a virtual town hall Wednesday about a proposed pipeline expansion involving Bucks, Chester and Delaware counties. Transcontinental Gas Pipeline, also known as Transco, applied for three permits with the DEP. The company cannot begin its 36-mile expansion of the pipeline without them. The permits deal with water obstruction and any disturbances to land, specifically dealing with oil or gas. Transco said that part of the project won’t disturb anything above the ground in Delaware County.
Positive MVP Comments. Disputed gas pipeline seen surviving without Congress or Manchin. Bloomberg Government. Manchin (D-W.Va.) failed to persuade his colleagues to back his energy permitting bill in stopgap spending legislation. But the Mountain Valley Pipeline in Appalachia could get the green light in coming months and go into operation by the second half of 2023 — the schedule the lead partner, Equitrans Midstream, proposed for the pipeline set to cross parts of West Virginia, Virginia, and North Carolina. “It looks feasible to us,” said Christi Tezak, managing director of research at ClearView Energy Partners LLC, an independent energy policy research firm. “Anybody who is saying the Mountain Valley Pipeline is in limbo isn’t paying attention.”
Rig Count Growth Slowest in 2 Years. U.S. oil & gas rig quarterly growth slowest in two years -Baker Hughes. Reuters. U.S. energy firms this week added oil and natural gas rigs for a third week in a row, but growth in the third quarter slowed due to recession fears and nagging supply shortages. The oil and gas rig count, an early indicator of future output, rose one to 765 in the week to Sept. 30, energy services firm Baker Hughes Co said in its closely followed report on Friday. Baker Hughes said that puts the total rig count up 237, or 45%, over this time last year. U.S. oil rigs rose two to 604 this week, while gas rigs fell one to 159. Note: NGI also reports.
Limiting U.S. Energy Exports Hurts Consumers. Why limiting U.S. energy exports would only worsen domestic supply problems. Forbes. Opinion. Another active week in the energy space ended with the Wall Street Journal reporting that the CEO of ExxonMobil, Darren Woods, was having to waste his time arguing with officials at the U.S. Department of Energy about their apparent ongoing desire to limit U.S. exports of crude oil and other fuels, even liquefied natural gas (LNG). Quoting from a letter Mr. Woods sent to DOE, the CEO said that “Continuing current Gulf Coast exports is essential to efficiently rebalance markets—particularly with diverted Russian supplies. Reducing global supply by limiting U.S. exports to build region-specific inventory will only aggravate the global supply shortfall.
Export Ban Dead End. Reversing energy export boom is economic dead end for Biden. Forbes. Opinion. Oil prices are back on the rise, and the Biden administration is correct to be concerned about volatile energy markets heading into the tightly contested midterm elections. But once again, the administration is considering counterproductive policies like restricting exports of U.S. energy while blaming the domestic oil and gas industry for its problems. The administration has toyed with export restrictions, but with the election nearing and inflation still soaring, the prospects now look stronger. News that the OPEC-plus cartel will likely announce a significant production cut this week to support oil prices – a major blow to the White House – will also factor in. But keeping more energy at home and off the global market won’t make these commodities, which are priced in international markets, any cheaper. Indeed, such measures could backfire and send fuel prices higher.
U.S. oil groups urge Biden to take fuel export ban off table – letter. Reuters. The largest U.S. oil trade groups said on Tuesday that they have “significant concerns” that the Biden administration is considering limiting fuel exports to lower consumer prices and urged top officials to take the option off the table, according to a letter seen by Reuters. The joint letter from the American Petroleum Institute and the American Fuel and Petrochemical Manufactures to Energy Secretary Jennifer Granholm represents the latest volley in a clash between the oil industry and the Biden administration over high energy prices. President Joe Biden has made battling an energy-led surge in consumer prices a top priority and has repeatedly chided oil companies for earning bumper profits at a time of record gasoline prices.
TX & NM Reach Agreement. New Mexico, Texas reach agreement for cross-border oil and gas wells. KRQE. New Mexico and Texas have finalized an agreement to develop and operate oil and gas wells that cross state lines. Officials say this agreement responds to unique development scenarios that came up due to the resource being cross-border. In 2021, the New Mexico Oil Conservation Commission issued conditional approval for a cross-border well, but the two states needed to enter into a memorandum of agreement before facilities could be built. It outlines how the product from the wells will be distributed and reporting, permitting and operating requirements for each state.
TX Wants Oversight of CO2 Wells. Other states may follow. E&E News. Texas hopes to attract some of those projects in its bid for primacy over Class VI wells. The application to EPA is “part of a larger policy framework to position Texas as the undisputed leader in carbon capture and storage technologies,” said Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association. “Primacy over Class VI wells should be granted for consistency sake and to help the state more effectively encourage investment in emission reduction technologies and related projects,” Longanecker, whose association represents Texas oil and gas companies, said in an emailed statement.
Production Costs Up. Dallas Fed Survey: Oil and gas industry says production costs on the rise for last 21 months. Houston Chronicle. Oil and gas companies are paying more – and waiting longer – for resources and equipment, even as they continue to steadily increase production, according to the latest survey of energy firms from the Federal Reserve Bank of Dallas. The Dallas Fed Survey asks executives in both the oil field services and exploration and production industries about the health of the industry and their outlook for the coming months. The survey covers companies in Texas, northern Louisiana, and southern New Mexico. For the three-month period ending Sept. 30, firms said costs increased for the seventh straight quarter, likely due to inflation and supply chain challenges. Oil and gas production continued to increase, but at slightly slower pace than the previous quarter, according to survey respondents.
DT Midstream Doubling Millennium NatGas Stake. DT Midstream doubling millennium natural gas pipeline stake for $552M. NGI. DT Midstream Inc. (DTM) has inked a deal to acquire an additional 26.25% stake in the Millennium Pipeline Co. LLC., a natural gas system, for about $552 million. The 263-mile conduit, which entered service in 2008, delivers natural gas from the Marcellus and Utica shales to utility and power plant markets across New York and New England. DTM is a founding developer and existing co-owner of the system with a roughly 26% stake. “Increasing our ownership in a premium integrated asset like Millennium Pipeline directly aligns with our strategic investment thesis and accelerates our growth plan,” said DTM CEO David Slater. “This transaction also increases the revenue contribution from our pipeline segment, underpinned by take-or-pay contracts with high credit quality customers.”
No Switching Back to Coal. Switching from natural gas to coal said more difficult for electric utilities. NGI. A buffer against higher natural gas prices that has traditionally been available to U.S. electric utilities, gas-to-coal switching, has become less tangible as more coal-fired power plants are retired and supply chain challenges linger, according to analysts. “I do not think utilities have any options, other than to burn dry gas in their” combined cycle gas turbine (CCGT) power plants and generate power needed in the United States, Chiron Financial LLC’s Tom McNulty, manager of investment, told NGI.
Team Pennsylvania’s Hydrogen and Carbon Capture Report. Team Pennsylvania Foundation announced the publication of a new report, Successful Deployment of Carbon Management and Hydrogen Economies in the Commonwealth of Pennsylvania. The report, authored by the Great Plains Institute (GPI), outlines a road map for the state to meet its climate goals and capitalize on a competitive edge in energy production and industrial manufacturing. A public discussion on the report’s findings, recommendations, and implications will be hosted by Team Pennsylvania at the Global Clean Energy Action Forum in Pittsburgh, at 10:15 AM on September 23.
“Hydrogen and carbon capture offer so much to Pennsylvania’s workers, communities, environment, and economy,” said Abby Smith, Team Pennsylvania Foundation’s President & CEO. “Ultimately, it will take the courage to have some difficult discussions about our priorities if Pennsylvania intends to be a leader in the energy transition. Team Pennsylvania is committed to doing our part as conveners to accelerate the needed policy approaches to create and preserve jobs while reducing our carbon footprint.”
Hydrogen (H2) can play a critical role as an energy carrier in reducing carbon dioxide (CO2) emissions from difficult-to-decarbonize industries like manufacturing and transportation. Carbon Capture, Utilization, and Sequestration (CCUS) represents a suite of technologies that catch and isolate CO2 at industrial facilities before it is emitted into the atmosphere and either use it for industrial applications or permanently store it underground. CCUS is already in use at over 30 facilities around the world, including in the United States.
Hydrogen and CCUS technologies have received significant attention in the recently passed Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). The IRA creates enormous tax incentives for the production of clean hydrogen and increases tax credits on the capture and permanent storage of CO2. The IIJA appropriated billions of dollars to establish regional hydrogen and carbon capture “hubs” throughout the country, and hundreds of millions of dollars to assist states to plan for them.
“GPI is proud of the steps that Team Pennsylvania and the Pennsylvania Energy Horizons Cross-Sector Collaborative have taken to help prepare Pennsylvania for the deployment of carbon management and hydrogen technologies,” said Matt Fry, a senior policy manager for GPI’s Carbon Management program and lead author of the road map. “This work has the potential to boost the state’s economy and provide the commonwealth with sustainable jobs, all while achieving significant emissions reductions in line with the state’s decarbonization goals.”
Due to its abundant energy resources, unique geology, skilled labor force, and strong cross-sector partnerships, the Commonwealth of Pennsylvania is well-positioned for investment in an emerging hydrogen and carbon capture economy. However, the report from Team Pennsylvania and GPI identifies significant policy hurdles the state must overcome to realize a new era in low-carbon energy.
In July 2022, Team Pennsylvania Foundation issued a press release announcing the Pennsylvania Energy Horizons Cross-Sector Collaborative, a partnership of energy stakeholder organizations. The collaborative brings together over 50 public, private, and non-governmental organizations committed to leveraging CCUS and hydrogen technology to decarbonize Pennsylvania’s economy and accelerate its economic growth. Participants of the Pennsylvania Energy Horizons Cross-Sector Collaborative are listed here.
The Cross-Sector Collaborative will build on the extraordinary momentum behind these issues, begin acting on the suggested recommendations in the road map, and demonstrate that strong relationships between the public, private, and nonprofit sectors can deliver jobs, economic growth, and environmental justice to the benefit of all Pennsylvanians.
Road Map Files for Download:
PA Permit September 26, to October 6, 2022
County Township E&P Companies
1. Bradford Leroy Chesapeake
2. Susquehanna Hartford Coterra
3. Washington Nottingham Range
OH Permits September 25, to October 1, 2022
County Township E&P Companies
1. Carroll Union EAP OHIO
2. Carroll Union EAP OHIO
3. Guernsey Wills Utica Res. Oper.
4. Jefferson Wells Ascent
WV Permits September 19, to September 23, 2022
1. Brooke SWN
2. Brooke SWN
3. Marshall Tug Hill
4. Tyler Antero T
5. Tyler Antero
6. Tyler Antero
7. Wetzel Antero
8. Wetzel EQT