Facts & Rumors # 560
July 20, 2024
BP Has Positive Outlook for NatGas. BP says demand for natural gas will likely rise for decades despite efforts to ease global warming. Houston Chronicle. Global demand for natural gas will continue to rise through 2050 under governments’ existing climate policies, an economist for BP said Wednesday. Spencer Dale, the oil giant’s chief economist, said that while clean energy sources like wind and solar were growing at a rapid pace, they were not growing fast enough to keep up with rising energy consumption in developing countries. As a result, greater supplies of natural gas from regions like Texas will be needed to feed their power grids and industrial sectors. “It’s relatively easy to decarbonize power markets in the developed world because the growth is so much slower,” Dale said.
EOG Has Wildcatter in the Eagle Ford. EOG resources wildcatting Pearsall in Western Eagle Ford step out. Hart Energy. EOG Resources has a Nabors Industries rig drilling a wildcat Pearsall well in Burns Ranch’s Indio Tanks Field in southern Frio County, Texas, in a half-county step out from its Eagle Ford Shale development east of there. EOG received the permit on May 31 and Nabors rig #1205 spud the two-section wildcat on June 25, according to Texas Railroad Commission (RRC) files and J.P. Morgan Securities analyst Arun Jayaram. The well, Burns Ranch #1H, about six miles east of Dilley, Texas, has a permitted depth of up to 12,000 ft.
Freeport Cancellations Could Be Causing Low NatGas Price. Freeport LNG cancels at least 10 cargoes after Hurricane Beryl outage in Texas. Oil & Gas 360. The Freeport liquefied natural gas (LNG) export terminal in Texas has canceled at least 10 cargoes for loading through August after Hurricane Beryl forced the facility to shut, according to traders familiar with the matter. That number is expected to keep rising as long as the facility is not at full capacity, said the traders, who weren’t authorized to speak publicly on the matter. Gas delivered by pipeline into Freeport was at less than a third of normal on Thursday, indicating most of the terminal is still offline, according to preliminary data from BloombergNEF.
NatGas Low Price Could End. U.S. NatGas prices climb 4% on small storage build, hot weather forecasts. Reuters. U.S. natural gas futures climbed about 4% on Thursday, a day after dropping to a 10-week low on a much smaller-than-expected storage build last week. Prices were also boosted by forecasts for hot weather to return in late July and early August, which should increase the amount of gas power generators burn to keep air conditioners humming.
LNG Pipeline Opens in TX. U.S. LNG pipeline ADCC begins operations. Offshore Technology. US Infrastructure company WhiteWater has revealed that the ADCC Pipeline has commenced delivery of natural gas to Cheniere’s Corpus Christi LNG export terminal in Texas. The 42in intrastate ADCC Pipeline, which spans approximately 40 miles, transports natural gas from Whistler Pipeline’s Agua Dulce Header to Cheniere’s Corpus Christi liquefaction facility.
“Economic Powerhouse” Permian basin contributes over $100 billion, 800,000 jobs on leading U.S. oil and gas production. Oil & Gas 360. The Permian basin continues to grow rapidly, reflecting the region’s importance as an economic powerhouse for Texas, New Mexico and the country. This year’s Economic Report from the Permian Strategic Partnership (PSP) highlights the region’s essential role in supporting critical government functions such as road improvements, public schools and teachers, police and fire departments, community hospitals and universities.
Faster Approvals in PA. Thanks, MDN. A MAJOR victory for Pennsylvania Republicans that is not getting the attention it should. For years, PA State Sen. Gene Yaw and others have lobbied for review by qualified third parties to speed up the turnaround time to approve relatively simple permits issued by the Dept. of Environmental Protection (DEP), including earth disturbance/erosion permits, known as Chapter 102 permits, and water obstruction and encroachment permits, known as Chapter 105 permits. The DEP fought it tooth and nail, perceiving such a change as a threat to its bureaucratic power. No more. The DEP is now silent in its opposition as a third-party review of permits was adopted and signed into law as part of the recently passed state budget.
Refrac – Where, When and How? Where, when and how to refrac—weighing all the options. Hart Energy. They are called re-fracs, re-entries, re-completions and other variations on re-peat terms. Whatever the name, the purpose is the same—to re-enter an existing and declining well to access more rock and pump new life out of it—and it is becoming a much more common practice for operators.
OH Receives Request to Leesville Wildlife Area. State receives requests to conduct fracking in Leesville Wildlife Area in Carroll County. Canton Repository. The Oil and Gas Land Management Commission has received two requests to open the Leesville Wildlife Area in Carroll County to hydraulic fracturing. The requests, which were received by the commission June 24 and posted Wednesday, seek permission to drill for oil or natural gas on 65 acres of public land in Orange Township and 62 acres in Monroe Township.
West TX NatGas Hub. Waha Hub focus of area natural gas industry. Odessa American. The Waha Hub operates in semi-obscurity out here some 60 miles southwest of Odessa in Pecos County, but it is an indispensable part of the Permian Basin’s natural gas industry. The Permian Basin Petroleum, Texas Oil & Gas and Texas Pipeline associations say it has also been the scene of consternation as the price of gas has sometimes gone negative in recent years.
Energy Transfer Acquires WTG Midstream Holdings. Energy Transfer LP ET completed the previously announced acquisition of WTG Midstream Holdings LLC. The firm paid $2.28 billion in cash and nearly 50.8 million newly issued ET common units to complete the acquisition.
This acquisition expanded Energy Transfer’s presence in the Midland Basin as it added 6,000 miles of complementary gas-gathering pipelines in the region. The deal added eight gas processing plants with a total capacity of 1.3 billion cubic feet per day and two additional processing plants, which are under construction.
Benefits From Acquisition
The completion of the acquisition will provide incremental revenues to Energy Transfer from gathering and processing activities, along with downstream transportation and fractionation fees. The firm expects the WTG assets to add 4 cents of Distributable Cash Flow per common unit in 2025, increasing to around 7 cents per common unit in 2027.
Expanding Through Acquisition
Energy Transfer, apart from using organic methods to expand its operation, is making strategic acquisitions to expand. Last year, the firm acquired Crestwood Equity Partners LP. This acquisition allowed the firm to own and operate more than 125,000 miles of pipelines and related assets in all the major producing regions of the United States.
Other firms operating in the midstream space are also making acquisitions to expand operations. Antero Midstream Corporation AM completed a bolt-on acquisition of gathering and compression assets in the Marcellus Shale for $70 million from Summit Midstream Partners LP SMLP. The assets acquired in May 2024 include two compressor stations and 48 miles of high-pressure gas gathering pipelines. This acquisition is expected to be more than 5% accretive to the free cash flow after dividends through 2027.
J.D. Vance Energy Position. Donald Trump’s decision to choose Sen. J.D. Vance as his running mate likely fortifies the former president’s reputation as the pro-oil choice for voters.
Vance, who Trump named Monday as his pick for vice president, is a strong supporter for drilling and hydraulic fracturing. He has also criticized renewable energy sources like wind, expressed doubts that human activity is causing climate change and painted President Joe Biden as a threat to U.S. energy — even as the country produces record amounts of oil and gas.
“The Biden administration is doing everything it can to subsidize alternative energy sources and demonize our nation’s most reliable sources of power,” Vance wrote in an August op-ed in Ohio’s Marietta Times that championed the state’s oil and gas resources.
Since entering Congress in 2023, the Ohio Republican has repeatedly backed oil and gas interests — and railed against the Biden administration clean energy policies that are delivering big economic gains to the Buckeye State.
The oil and gas industry spent more than $283,000 on Vance’s 2022 election campaign, more than all but 18 other members of Congress, according to the campaign finance website OpenSecrets.org. Officials from the Ohio-based Artex Oil contributed $27,000, ranking the company fifth among all of Vance’s campaign contributors, while the global commodities trader Vitol SA ranked 20th. Artex and Vitol officials also contributed to Vance’s Leadership PAC, “Working for Ohio,” as did Marathon Petroleum.
Vance could influence the political calculus in Pennsylvania, one of the country’s largest energy producers and home to a large swath of the Marcellus Shale. Trump has made clear that he’s eyeing the Midwest in picking Vance, saying in a statement that the vice-presidential candidate’s campaign focus would be on “the people he fought so brilliantly for, the American Workers and Farmers in Pennsylvania, Michigan, Wisconsin, Ohio, Minnesota and far beyond.”
Mike Chadsey, spokesperson for the Ohio Oil and Gas Association, said Vance is “somebody who understands kind of what we do and how we do it.”
“He’s gonna continue to be an advocate for the industry, and energy investment, helping make sure that those issues stay at the forefront; those concerns become voiced in the White House” if Trump wins, Chadsey said.
Vance’s positions on energy line up with those of Trump, drawing sharp criticism from environmentalists who say the Republican ticket would likely stymie the country’s clean energy growth. At the conservative Turning Point Action conference last month, Vance called wind turbines “hideously ugly” and echoed Trump’s claim that they “kill all the birds.”
“J.D. Vance is Donald Trump’s dream come true — a climate denier who is all too happy to do Big Oil’s bidding and pad their profits at the expense of working people,” Lori Lodes, executive director of advocacy group Climate Power, said in a statement. “We cannot allow an out-of-touch, pro-polluter ticket to win in November.”
Vance has championed hydraulic fracturing or “fracking,” a technique that shatters rock with chemicals and water to release oil and natural gas from tight shale formations. Key to production in shale regions like Ohio, fracking is opposed by environmentalists who point to its potential to pollute groundwater with toxins.
“Ohioans are lucky to live on top of the Utica Shale oil and gas basin,” Vance wrote in his August op-ed. “New technologies like horizontal drilling and hydraulic fracturing have allowed us to unleash these abundant natural resources.”
Fossil fuels, EVs and solar tariffs
The Trump campaign did not respond to a request for comment on Vance’s energy priorities. A Vance spokesperson also did not respond for comment.
But Vance’s Senate record has earned him a zero on the League of Conservation Voters’ scorecard, which weighs lawmakers’ votes on legislation to address climate change and environmental degradation.
Last year, Vance co-sponsored the “Power Act,” S. 319, which would order the president to seek Congressional approval before delaying leasing or permitting for oil, gas and mining on federal lands. He also co-sponsored the “STOVE Act,” S. 244, to block federal agencies from issuing rules that would ban gas stoves and other appliances. The Biden administration has not banned gas stoves, but Republicans were critical of Department of Energy efficiency standards for appliances that were finalized this year.
Vance has been outspoken about protecting domestic manufacturing, including for clean energy. He co-sponsored a measure last year to overturn the Biden administration’s suspension of tariffs on Chinese solar components, saying the president’s policies would hurt American workers.
But Vance also introduced a bill last year that would repeal the federal tax credit for electric vehicles. Titled the “Drive American Act,” S. 2962 would instead offer tax credits for U.S.-made vehicles powered only by gasoline or diesel.
“While most Americans want to drive a gas-powered car, the Biden administration pursues a policy explicitly designed to increase the cost of gas. They do this in the name of the environment, but all they’re doing is enriching the dirtiest economy in the world at the expense of auto workers in Ohio, Pennsylvania, and Michigan,” he said in a statement last September, referring to China.
Vance has said he would like to get rid of much of the Inflation Reduction Act, Biden’s landmark 2022 climate law. But like many red states, Ohio has seen economic gains from the law’s provisions — and Vance owns stakes in companies that have benefited from Biden’s climate spending programs.
Vance recently told POLITICO’s E&E News that if some local companies support certain provisions, lawmakers might want to keep them instead of repealing the entire law.
“The Inflation Reduction Act is mostly a lot of green energy stuff,” he said. “And I think it’s made our economy less energy independent.”
Megan Jacobs, a spokesperson for the League of Conservation Voters Victory Fund, said Vance espouses the “same mix of extreme rhetoric and Big Oil talking points we already hear from Trump.” She pointed to his supportive comments of Project 2025, a policy blueprint for a potential second Trump administration spearheaded by the Heritage Foundation and partly written by former Trump appointees.
“Vance is cosigning this power-hungry takeover and is willing to put Big Oil’s wish list ahead of the health and safety of families and communities across the country,” she said.
Climate change flip
Vance became a polarizing national figure in 2016 when he released his memoir, “Hillbilly Elegy,” about growing up in southwestern Ohio.
Fans of the book praised it as a portrait of escaping generational poverty in one of the poorest regions of the United States through education. Its detractors, however, accused Vance of ignoring the social ills plaguing the Appalachian region, including a history of environmental and economic damage from mining industries.
At the time, Vance was a critic of Trump, who was making his first presidential run.
“I’m a ‘Never Trump’ guy,” Vance said in an interview with Charlie Rose that year.
Vance’s position had flipped by the time he ran for office in 2022. The former venture capitalist ran on an avid pro-Trump campaign and decried “woke” social movements and environmental, social and governance investing. Vance called ESG — wherein financial institutions weigh environmental risks and sustainability in investing — a “massive racket” from Wall Street that costs jobs in America’s heartland.
Vance has also switched his tune on climate change since being in the public eye.
Vance told an Ohio State University crowd in 2020 that “we of course have a climate problem in our society.” At the time, he placed some blame on China’s greenhouse gas emissions, but also said the U.S. lagged in switching to other energy sources and called solar energy the “biggest improvement in emissions.”
Two years later, amid his rise in the Republican Party, Vance began expressing doubt about human-driven climate change. (Scientists have established that burning fossil fuels is the main driver of global warming.)
“Even if there was a climate crisis, I don’t know how the way to solve it is to buy more Chinese-manufactured electric vehicles,” he said in a conversation with conservative radio hosts Clay Travis and Buck Sexton.
Meanwhile, Vance has excoriated the Biden administration for the clean energy policies and tax breaks that are landing some new jobs-producing projects in Ohio. Climate Power, which supports Democratic candidates, says the Inflation Reduction Act has so far produced nearly 14,000 jobs in the Buckeye State.
A mapping of new clean energy projects in the U.S. by E2, another clean energy advocate, shows major projects underway in Ohio, such as a$3.5 billion project to produce lithium batteries for electric vehicles. On top of a range of EV and battery projects, the federal government is also underwriting a new clean steel plant in the state run by U.S. steel giant Cleveland Cliffs.
The Trump campaign is pledging to cut taxes for fossil fuel producers. The former president is also vowing to leave the Paris climate agreement and cut federal subsidies for clean energy technology. That all falls under Trump’s pledge to “drill, baby, drill.”
The Republican National Committee platform, meanwhile, points to “crippling restrictions on American Energy Production” and calls for the U.S. to be the “dominant energy producer in the world.”
The U.S. produced more crude oil last year than any country in history. It also is producing and exporting record volumes of natural gas.
PA Permits July 8, to July 18, 2024
County Township E&P Companies
1. Armstrong North Buffalo Snyder Bros
2. Armstrong North Buffalo Snyder Bros.
3. Armstrong North Buffalo Snyder Bros.
4. Armstrong North Buffalo Snyder Bros.
5. Armstrong North Buffalo Snyder Bros.
6. Armstrong North Buffalo Snyder Bros.
7. Armstrong North Buffalo Snyder Bros.
8. Armstrong North Buffalo Snyder Bros.
9. Armstrong North Buffalo Snyder Bros.
10. Greene Aleppo EQT
11. Sullivan Forks Chesapeake
12. Sullvan Forks Chesapeake
13. Sullivan Forks Chesapeake
14. Sullivan Forks Chesapeake
15. Susquehanna Middleton Coterra
16. Washington Amwell Range
17. Washington Amwell Range
18. Washington Amwell Range
19. Washington Amwell Range
20. Wahington Union EQT
21. Washington Union EQT
22. Washington Union EQT
23. Washington Union EQT
24. Washington Union EQT
25. Westmoreland Upper Burrell Olympus
OH Permits July 7, to July 13, 2024
County Township E&P Companies
1. Guernsey Center EAP OHIO
2. Guernsey Center EAP OHIO
3. Guernsey Center EAP OHIO
4. Guernsey Center EAP OHIO
5. Guernsey Center EAP OHIO
WV Permits July 7, to July 12, 2024
1. Wetzel EQT
