The State of Oil and Gas: May 15, 2017

The EPA issued a report last year that said the natural gas industry was leaking methane (natural gas) like crazy.  However, it was based off spreadsheets, algorithms, and estimates.  This year, the EPA has done a field test and found that last year’s report overestimated methane leakage by 97%.  Think about that for a minute.  Now, it’s just one test, and science needs to be repeatable to be reliable.  But when the numbers are that different it’s extremely likely that last year’s report is wildly incorrect.

It’s been quite a while since anything has been said about the possible cracker plant in Parkersburg, WV.  The Parkersburg News and Sentinel has a very short editorial which we link to here because we’d like to see more people talking about it.  A cracker plant would help West Virginia avoid the problem that it’s had for over 150 years of pulling natural resources out of the ground and shipping them out of the State as raw materials.

The price of oil has taken a real dip lately, today’s bump up in price notwithstanding.  The reason for that dip?  American frackers have been ramping up production like mad.

Rig counts dropped by one each in West Virginia and Pennsyvlania in the first week of May.  Hopefully that means drillers are slowing down a bit on purpose, which means they think that we’re producing as much gas as we can get out of the region and into storage for this year.  That’s healthy, smart thinking, if it’s on purpose.  If.

We’re on course to put record amounts of gas into storage again this year.  If you’ll remember, we did this same dance last year.  In the end, producers cut back and we ended up with less storage (still record highs) than what most experts predicted.  I imagine the same thing will happen this year.

Saudi Arabia is saying it will do whatever it takes to rebalance the oil market.  There’s dancing in the streets in Texas.

OPEC has been reduced to begging–begging American frackers to slow down production, that is.  If there was any question left as to who controls oil’s top end, it has been settled.

OPEC and Russia have reached a deal to extend the production cuts they agreed to six months ago.  Oil prices are pushing $50/bbl again for the first time in almost a month.

The FERC has a new date for review of the Atlantic Coast Pipeline EIS.  The final EIS will be made available on July 21, 2017.  After that, there will be 90 days for other federal agencies to make comments on the project.  The final approval will be on October 19, 2017.