Facts & Rumors # 540
January 27, 2024
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Biden Wants Russian to Win! He’s Hurting our Allies. The American Petroleum Institute (API) today released the following statement from President and CEO Mike Sommers on the Biden administration’s announcement to pause approvals of new LNG export facilities, unnecessarily increasing project wait times at a time of geopolitical turmoil and rising coal use around the world.
“This is a win for Russia and a loss for American allies, U.S. jobs and global climate progress. There is no review needed to understand the clear benefits of U.S. LNG for stabilizing global energy markets, supporting thousands of American jobs and reducing emissions around the world by transitioning countries toward cleaner fuels. This is nothing more than a broken promise to U.S. allies, and it’s time for the administration to stop playing politics with global energy security.”
The announcement undercuts President Biden’s own pledge to send increased U.S. LNG supplies to our allies overseas to help end dependence on Russian gas. The pledge also committed the United States to “maintaining an enabling regulatory environment” for LNG.
An analysis of President Biden’s 2022 pledge to send more U.S. LNG supplies to our allies overseas found that its economic impact to the American economy could be as high as 71,500 jobs per year, $63 billion in capital expenditures and a GDP boost of $46 billion between 2025 and 2030. In 2022, the U.S. surged more than 800 LNG cargoes to Europe – a 141% increase from 2021. Recent studies shows that both Europe and Asia face long-term natural gas supply gaps that threatens their energy security.
In the U.S., natural gas prices remain among the lowest in the world according to the International Energy Agency (IEA). While U.S. LNG exports reached record highs in 2023, domestic prices declined 62% as U.S. natural gas production also surged to record levels—demonstrating this industry’s ability to meet rising global demand for natural gas while maintaining a well-supplied domestic market.
U.S. LNG is critical for accelerating global emissions reductions by displacing higher-emitting fuels. Coal-to-gas switching is the main reason that the U.S. has led the world in reducing CO2 emissions over the past two decades. Global coal consumption continues to surge, likely reaching another all-time high in 2023. By 2024, three out of every four tons of coal consumed will occur in China, India and Southeast Asia. LNG can displace higher-emitting fuels like coal, allowing these countries advance their respective climate goals.
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 approximately 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.
To learn more about API and the value of oil and natural gas, please visit API.org.
FERC Approves Pipelines. Let’s Hope Many More Come! FERC greenlights pipeline projects. World Pipelines. The Federal Energy Regulatory Commission approved key pipeline projects on Thursday 18 January during its first open meeting of 2024 – including a high-profile permit for the nation’s largest public power provider, which is seeking to transition away from coal. FERC voted to approve a permit for a 32-mile natural gas pipeline that would help fuel proposed gas-fired generation at the Tennessee Valley Authority’s Cumberland Fossil Plant. The commission also approved a Texas-to-Louisiana project by Williams Cos., which aims to expand an existing 024Democrats diverge. Acting Chair Willie Phillips voted in favor of all pipeline certificates, while Commissioner Allison Clements dissented in part on the pipeline for TVA and in full on the Williams project. Commissioner Mark Christie, FERC’s lone Republican, voted the same as Phillips on the two projects and other commission business.
2024 A Year of Divergence. 2024 oil and gas outlook: A year of divergence. Forbes. January, and the new year in general, is a time of planning and setting expectations. We all do it (or should anyway). We attempt to evaluate where we’re going based on where we are, who we are, and where we have been. When it comes to the oil and natural gas upstream markets, it appears each commodity and their producers are heading to different places in 2024. We can see it through market sentiment, prices, production, and corporate actions such as mergers. U.S. oil seems to be headed toward a period of decreasing growth and increasing upward price pressure. U.S. natural gas on the other hand, appears to be back in a somewhat oversupplied position while hoping that LNG market channels ease the price pressure that has pushed it back under $3 per Mcf again.
2024 Tough Year in the Oil Patch. E&P companies face tough year despite oil patch ‘bumper crop’. Oil Price. The U.S. Energy Industry has defied past norms where declines in drilling and completion activity would quickly result in lower production. Technology has turned that paradigm on its head in recent years. Extended reach laterals, optimizing well spacing, and increasing the Completion Intensity-frac stages per foot, upping sand and water concentrations per foot, have enabled this result. In the most recent Energy Information Agency-Drilling Productivity Report-DPR, the tally is in, once again we have a “bumper crop” in the U.S. oil patch.
‘Persistent” Oil Shortage. Persistent’ oil shortage on horizon without more drilling. Dallas Express News. Occidental Petroleum CEO Vicki Hollub told world leaders at the World Economic Forum in Davos, Switzerland, that the global crude oil supply will dwindle in 2025 without more drilling. Hollub predicted that a lack of newly drilled oil would lead to a “persistent” shortage. “In the near term, the markets are not balanced; supply, demand is not balanced,” Hollub said, per Reuters. “2025 and beyond is when the world is going to be short of oil.”
Private-Equity Firms Sticking with NatGas. Some private-equity firms stick with natural gas despite climate concerns. WSJ. Some private-equity firms are pressing forward with investments in natural gas, betting that sustained demand for the fuel will trump opposition to expanding gas infrastructure while many governments worldwide prioritize a shift to clean energy. “We have made a fundamental bet that natural-gas demand will be around for a lot longer than most people expect,” said Jason Downie, a co-founder and managing partner at private-equity firm Tailwater Capital. The Dallas firm backs energy-infrastructure businesses such as operators of natural-gas pipelines and storage systems.
Oil in OH. Thanks, MDN. Black gold: EOG Resources drills gushers in Ohio Utica. Marcellus Drilling News. Perhaps our headline is slightly misleading. EOG is not the modern equivalent of Jed Clampett walking along and seeing crude bubbling up out of the ground (as in the fictional The Beverly Hillbillies show of the 1960s with the “Ballad of Jed Clampett” that says, “Oil that is, black gold, Texas tea.”). What EOG and other Ohio drillers (like Encino Energy and Ascent Resources) have done is more like rocket science than winning a lottery. The oil has been locked away in the Utica/Point Pleasant shale layer for millennia. Aubrey McClendon, co-founder and former CEO of Chesapeake Energy, was the first to see the vision of freeing oil from the Utica.
OH Courts Cannot Say, “No!” Commission claims court can’t review decisions on drilling under Ohio park and wildlife areas. Energy News Network. An Ohio commission is arguing its decisions last fall to allow oil and gas drilling under a state park and two wildlife areas are final and cannot be appealed. Environmental groups challenging the Ohio Oil & Gas Land Management Commission say it failed to follow state law when it approved land parcels for leasing of drilling rights at Salt Fork State Park, Zepernick Wildlife Area and Valley Run Wildlife Area. Among other things, state law says the commission must consider nine factors in reaching its decisions, including environmental impacts, consequences for visitors or users of state lands, public comments or objections, economic issues, and others. State lawyers have filed a motion to dismiss, claiming the court can’t review the decisions because the statute doesn’t expressly provide for judicial review.
TX Denser Oil. Denser Texas crude leads U.S. oil production growth. Oil Price. Higher production of relatively denser crude oil in Texas, the top oil-producing U.S. state, drove part of the U.S. crude oil output growth last year, the Energy Information Administration (EIA) said on Tuesday. Oil produced in Texas generally has a relatively broad distribution of API gravities. In June 2023, production of crude oil with an API gravity between 30.1 and 40.0 degrees reached 2.58 million barrels per day (bpd), exceeding the Texas production of crude oil with a gravity between 40.1–50 degrees (the lighter crude) for the first time, the EIA said in an analysis.
PA Permits January 15, to January 24, 2024
County Township E&P Companies
1. Armstrong Rayburn Exco Resources
2. Bradford Overton Chesapeake
3. Bradford Overton Chesapeake
4. Bradford Overton Chesapeake
5. Lycoming Plunketts Creed EQT
6. Susquehanna Great Bend SWN
7. Washington Amwell Rice
8. Washington Donegal SWN
9. Washington Donegal SWN
10. Westmoreland Bell CNX
11. Westmoreland Bell CNX
OH Permits January 14 to January 20, 2024
County Township E&P Companies
1. Jefferson Mount Pleasant Ascent
2. Jefferson Mount Pleasant Ascent
3. Harrison Athens Ascent
4. Harrison Athens Ascent
5. Harrison Athens Ascent
WV Permits January 15, 2024 to January 19, 2024
1. Brooke SWN
2. Brooke SWN
3. Wetzel EQT
4. Wetzel EQT
5. Wetzel EQT
6. Wetzel EQT
7. Wetzel EQT
8. Wetzel EQT
9. Wetzel EQT
