Facts & Rumors # 556
June 15, 2024
AI Data Centers Are Making an Energy Grab. An AI Data Center requires tremendous amounts of energy. A Data Center has 100,000 servers or GPU/NPU chips, 300,000 square feet consuming 300 MW power costing $2-3.5 billion. Newer AI Data Center designs are calling for 900,000 square feet centers which could require 900 MW of power.
What is the critical component to the success of an AI Data Center? There are two critical components for success; first a guaranteed supply of energy; second the lowest price for energy. NatGas meets these critical needs.
CNBC reported on Wednesday that demand for NatGas will be so great, AI Data Centers are exploring signing 10-year deals with NatGas producers. The NatGas companies mentioned in this report were EQT and Coterra Energy.
The Appalachian Basin with its vast reserves of NatGas could see AI Data Center deals being signed with a year.
Stay tuned!!! The NatGas market in the U.S. will be experiencing a considerable transformation in the next few years.
1GW Data Center Coming to WV. A renewable investment firm has announced plans for a hydrogen production facility and 1GW data center campus in West Virginia. 1GW of electricity can supply enough electricity for cities like – Philadelphia, Phoenix, San Antonio and San Diego.
Texas-based Fidelis New Energy, which has previously invested in carbon capture, hydrogen, and renewable fuel production facilities, this week announced it had selected Mason County in West Virginia as the location for a hydrogen production facility and data center campus – known as the Mountaineer GigaSystem and the Monarch Cloud Campus.
Once fully built out, the company said the cloud campus’ capacity could reach 1GW, powered by the hydrogen produced on-site via natural gas. Waste heat from the data centers will be fed into co-located greenhouses for food production. The data center campus could see up to $5 billion invested, according to Fidelis.
“We are proud to have selected West Virginia as home to the Mountaineer GigaSystem where it can serve as a major anchor and support for the broader ARCH2 Hydrogen Hub,” Pete Hollis, SVP and global head of CCUS of Fidelis said. “The state’s position at the forefront of energy and chemical production in the United States makes it a natural choice for a project such as ours.”
The first phase of the Mountaineer GigaSystem is expected to commence operations in 2028. The site would be built out over four phases, with each phase producing over 500 metric tons per day of net-zero carbon hydrogen. The company said once its carbon capture and sequestration (CCS) facilities are live, the site could permanently store approximately 10 million metric tons per year of CO2.
Fidelis says it has developed a proprietary hydrogen technology known as FidelisH2. The company said its H2PowerCool technology utilizes FidelisH2 hydrogen as a net-zero energy source to power and cool data centers.
Fidelis also announced a letter of intent with energy technology and service provider Babcock & Wilcox (B&W) to support the evaluation, development, and delivery of its BrightLoop hydrogen technology at the Mountaineer site. BrightLoop systems enable the production of hydrogen from waste biomass including fallen trees, sawmill waste, and other solid fuels as well as natural gas.
Dan Shapiro, CEO and co-founder of Fidelis said. “We would like to express our gratitude to Governor Jim Justice and his administration, including Director Mike Graney, Secretary Mitch Carmichael, the West Virginia Economic Development Authority, and Mason County Economic Development for recognizing the value the Mountaineer GigaSystem and the Monarch Cloud Campus bring to West Virginia.”
West Virginia Gov. Jim Justice added: “I am beyond excited that West Virginia will be the home of the Mountaineer GigaSystem and Monarch Cloud Campus. West Virginia has a long history as an energy powerhouse for our nation, thanks to our hardworking people who know how to get the job done.”
He continued: “And now, we’re in a great position to make the most of a new fuel – hydrogen – through this incredible project in Mason County. There’s simply no doubt that Fidelis is going to help shape the future of West Virginia in a major, major way by assisting in the commercial lift-off of some truly exciting new industries.”
West Virginia Senate President Craig Blair added: “This investment by Fidelis will enable them to use our abundant natural gas resources to produce clean hydrogen energy, which then will be used to power manufacturing sites and more. I am pleased to welcome them to West Virginia.”
Fidelis was established in 2019 by Shapirio and Bengt Jarlsjo, who previously held roles at The Shaw Group, Inc., Quanta Capital Solutions, Inc., and First Infrastructure Capital Advisors, LLC.
Mason County is in the west of West Virginia, on the state line bordering Ohio.
Oil Will Peak in 2029. Oil demand set to peak by 2029, major supply glut looms, IEA says. Reuters. Global oil demand will peak by 2029 and begin to contract the following year, while the U.S. and other non-OPEC countries add to supply, the International Energy Agency said on Wednesday, resulting in a major surplus this decade. The report from the IEA, which advises industrialized countries, contrasts with the view of oil producer group the Organization of the Petroleum Exporting Countries (OPEC), which sees demand rising long after 2029 in part due to a slower shift to cleaner fuels. IEA, Financial Times, S&P Global, and WSJ also report.
MVP Gets FERC Approval. Mountain Valley gets regulator’s approval for U.S. natural gas pipeline. Reuters. Mountain Valley can begin operating its $7.85 billion Virginia natural gas pipeline after receiving approval from the U.S. Federal Energy Regulatory Commission (FERC) according to a filing on Tuesday. The Mountain Valley project, the only big gas pipeline under construction in the U.S. Northeast, has encountered numerous regulatory and court fights that have stopped work several times since construction began in 2018. Associated Press, E&E News, and Politico also reports.
Larger Records in 2024. EIA forecasts larger records for 2024 U.S. oil output, global demand. Reuters. U.S. oil output and global oil demand will likely post bigger records this year than previously expected, the U.S. Energy Information Administration said on Tuesday. The agency now expects U.S. oil output to grow by around 310,000 barrels per day (bpd) to 13.24 million bpd this year, about 40,000 bpd higher than its previous forecast in May. It expects U.S output to be around 13.71 million bpd next year, slightly below the previous 13.73 million bpd forecast.
U.S. LNG to Cut Coal Emissions in Asia. Rystad Energy: U.S. LNG to Asia for power generation expected to cut emissions vs coal. LNG Industry. The value-chain emissions of LNG are lower on average than for coal-fired power generation, even when the fuel is shipped over long distances, according to new research from Rystad Energy. Natural gas that is produced and liquefied in the US and shipped to Asia on return journeys of about 23 000 miles could emit up to 50% less than even the cleanest coal power plants. However, there are significant variations between US LNG sources, coal sources and types, and power plants, as well as uncertainties regarding methane emissions through both value chains.
New Gas Refinery. First in 50 Years. Houston energy company to build largest new refinery in half a century. Chron. A Houston company will construct the largest new refinery in the last 50 years in Brownsville, Texas. Element Fuel Holdings LLC is spending between $3 and $4 billion on the project, which will produce more than 160,000 barrels per day of gasoline, diesel, and jet fuel from shale oil production, according to a report by the Houston Business Journal. “Since no one’s built a refinery in 50 years, there’s probably a better way to do it. Let’s optimize it,” Element Fuels founder and co-CEO John Calce told the business outlet. The refinery will be located in the Port of Brownsville and constructed in three phases. The first construction phase includes building a naphtha hydrotreater and reformer, which is expected to be operational by 2027.
Shale Drilling Lowest Since 2022. Shale drilling slides to lowest level of activity since 2022. Bloomberg. Drilling in the US shale patch dropped to the lowest level in almost two-and-a-half years as operators vow to make good on promises to investors for subdued production growth this year. The number of US rigs drilling for oil fell by four to 492, the lowest since January 2022, according to data released Friday by Baker Hughes Co. The rig count is down 1.6% so far this year, while oil prices are up 5.6% in the same period.
Logjam on Matterhorn Express Pipeline Time running out for FID on next Permian NatGas pipeline. Hart Energy. All eyes are on the Matterhorn Express Pipeline, which is expected to begin service over the next few months and alleviate some of the takeaway demand tightening the Permian Basin. But not for long—a logjam in natural gas takeaway capacity is expected again in the Permian Basin sooner rather than later, according to analysis by Enverus.
Seneca Doubled Production. National Fuel Gas Co.’s Seneca Resources Corp. more than doubled fiscal fourth quarter production from its activities in Appalachia. This contributed to better Seneca results and for National Fuel overall during the quarter and fiscal year.
Seneca fourth quarter production of crude oil and natural gas increased 3.8 Bcfe, or 29%, to 16.8 Bcfe. Appalachian production increased 130% to 12 Bcfe, including production from the Marcellus Shale of 10.1 Bcfe. Total production for fiscal 2011 increased 36% to 67.6 Bcfe. Seneca’s total reserves at Sept. 30 were 935 Bcfe, an increase of 235 Bcfe, or 34%. Seneca replaced 448% of fiscal 2011 production.
Matador to Buy Permian Assets. Matador agrees to buy Permian oil assets worth $1.9 billion. Bloomberg. Oil producer Matador Resources agreed to buy assets in the Permian Basin from a portfolio company of EnCap Investments LP for $1.9 billion cash, the latest in a series of shale industry tie-ups. The deal includes oil and gas producing properties and undeveloped acreage in New Mexico and West Texas owned by Ameredev II Parent, Matador said in a Wed. statement. Matador, which primarily operates in the region, said the assets will provide more contiguous acreage for the firm to drill longer lateral wells and more efficiently tap the oil-rich rocks in the western Permian. The deal includes a 19% stake in Piñon Midstream.
PA Permits May 27 to June 6, 2024
County Township E&P Companies
1. Greene Richhill CNX
2. Washington Amwell Range
OH Permits May 27, to June 6, 2024
County Township E&P Companies
1. NO NEW PERMITS
WV Permits June 3, to June 7, 2024
1. Doddridge HG Energy
2. Doddridge HG Energy
3. Doddridge HG Energy
4. Doddridge HG Energy
5. Doddridge HG Energy
