Natural gas prices are at $2.53/MMbtu, with a high of $2.59 and a low of $2.16. Most of the time, the price was around $2.25 to $2.35. Drilling rigs are down to 695, a steep drop from 731 last month. Storage is at 2,634 Bcf, still higher than the five year average, but not above the five year high. Weather is still the main driving factor, and the overall temperatures for this summer have been pretty average so far.

The U.S. Forest Service has issued a new Record of Decision, approving the Mountain Valley Pipeline’s crossing of the Jefferson National Forest.

The EIA predicts that natural gas prices will return to more healthy levels before the end of the year. As usual with predictions, it’s the analysis that’s most important.

Oil prices are expected to drop, based mainly on the Chinese economy growing a little less than predicted.

The American Petroleum Institute released numbers showing how much the oil and gas industry contributes annually to the West Virginia economy.

The Institute for Energy Research is suggesting that the Biden Administration only wants permitting reform for green energy projects, and will try to keep other projects (MVP) from benefitting from the new permitting regulations everyone is working on.

WVU Energy Institute is getting a new director, Sam Taylor. His background is in clean and renewable energy, and the Institute is going to be moving in that direction. They’re even changing the name to the WVU Institute for Sustainability and Energy Research. I don’t mind an emphasis on renewables, but shifting a West Virginia institution’s focus from natural gas to renewables doesn’t seem like a great idea.

One investor analyzes the price of natural gas, noting the variables that could affect whether price will go up or down. It’s pretty comprehensive analysis, even including a short discussion of the European variable, which is becoming more important as we export more LNG.

Drillers are auctioning off rigs at fire sale prices.

Joe Manchin published a press release stating that the recent approvals by the Biden Administration regarding the Mountain Valley Pipeline show that the President realizes the MVP is vital for our nation.

Energy Secretary Granholm came out in support of the MVP again.

The Bureau of Land Management has issued a new Record of Decision approving the Mountain Valley Pipeline.

The PA cracker plant will be shut down for a few more weeks, it looks like. I hope they get their issues ironed out. I wouldn’t want to be one of their neighbors right now.

Large swaths of the U.S. could experience blackouts if summer weather hits extremes. If you’d like to read the actual report, it’s here (.pdf warning).

West Virginia’s U.S. House of Representatives member Carol Miller has introduced a new bill that would approve everything needed for the MVP to be built. It’s focused solely on the MVP, and wouldn’t affect any other permitting legislation, or be affected by it. It’s an interesting take.

Everyone who is anyone in West Virginia politics is against the EPA’s new power plant emissions regulations.

The PA cracker plant will pay a $10 million fine for exceeding pollution limits. About $6.2 million of that will go to the local neighborhood in various ways.

SCOTUS reigned in the WOTUS regulations. Essentially, the Waters of the United States (WOTUS) are any navigable waters and waters connected to them. Previously, it was any waters with a nexus to navigable waters. The previous definition was very broad and, I would argue, overly broad. Our waters need protecting, but when you can define waters of the United States in such a way that drainage ditches count, you’re over-regulating.

The Fourth Circuit has remanded FERC’s MVP permit, stating that the FERC had not properly explained its decision to not prepare a supplemental environmental impact statement.

RBNEnergy analyzes the natural gas market trends for the next few months.

It looks like Joe Manchin got permitting language into the debt ceiling bill. Here’s some analysis of the political reasons why it will probably survive and get passed.

Our oil supply is high, so prices are going lower. Haven’t seen this play out at my local gas station yet, but stay tuned.

The MVP will be completed. The debt ceiling bill which includes the MVP permitting language passed the Senate. It’s expected to be completed by the end of 2023.

Saudi Arabia is going to unilaterally (without it’s OPEC+ partners) cut production by 1 million barrels per day in July. They really want to keep the price of oil up.

Exxon thinks that new methods of fracking will increase the amount of oil they capture from any given acre of ground. This isn’t necessarily news, as oil and gas producers are constantly looking for new ways to increase production, but they mention two specific methods, and you don’t usually hear specifically what a company is looking at improving.

RBNEnergy analyzes the MVP permitting language of the debt ceiling legislation. While the MVP is not out of the woods yet, there is some light showing through the trees ahead.

A brine treatment plant (think fracking wastewater) in Fairmont, WV, had an explosion and fire.

Hope Gas is acquiring another asset, about 900 miles worth of pipelines here in West Virginia.

A new natural gas fired power plant has opened in Guernsey County, Ohio. West Virginia needs these.

Saudi Arabia’s unilateral cut in oil production has not increased prices. Traders see weak demand in the near future, so prices are staying down. I’m not complaining.

MVP opponents are already planning a march on D.C. to protest the presumed permitting of the MVP.

Interesting. A company called Clean-Seas has announced that it will build a new facility in West Virginia. This facility will take waste plastics and turn them into fuel, including hydrogen. This will probably help West Virginia get a hydrogen hub.

Oil demand is growing, and oil supply is growing, but not as much as demand.

While the MVP is in the news, other pipelines have been built and often have created problems for landowners. We don’t oppose pipelines, but we definitely make sure to negotiate for protections for our clients who deal with pipelines on their property.

Emboldened by their success in overcoming the MVP’s regulatory hurdles, Senator’s Capito and Manchin have targeted the EPA’s new power plant regulations. Capito has introduced legislation to block them, and Manchin has proposed extending the public comment period by 60 days and doing a public hearing in West Virginia.

Here’s a prediction that we’re going to see an energy crisis of sorts this fall. As usual, predictions aren’t worth the paper they’re printed on, but the analysis can be useful.

MVP has put the 4th Circuit on notice in a court filing that when West Virginia issues a water permit, it will begin construction. And just like that, the permit has been issued.

Encino Energy has suddenly produced an enormous amount of oil from the Utica formation up in Ohio, just north of the northern panhandle of West Virginia. This may be the beginning of a new drilling boom. The technology they used may or may not translate to the Utica in West Virginia. This is something to keep an eye on, though.

Natural gas prices are at $2.38/MMBtu, with a low of $2.10 and a high of $2.41. Gas storage is at 2,141 Bcfs, above the five year average. The rig count has fallen off a cliff, down to 731 from a high of 755 two weeks ago. The rig count number is a little hard to explain, as it’s so sudden. I would have expected it to go down, but rather more gradually.

The PA cracker plant smells bad. It’s not supposed to. Neighbors are not happy. I suspect this cracker plant was not ready to be opened when they opened it. Granted, I haven’t tried to construct a multi-billion dollar network of pipes and furnaces, but it seems like this hasn’t been done properly. It also seems like the plant’s public affairs office isn’t doing a good job of working with the neighbors. Par for the course with oil and gas companies, sadly.

Joe Manchin is going to re-introduce the permitting bill that died last session. Here is the news that the bill has been introduced, along with some bullet points from the legislation.

Wal-Mart is adding natural gas powered trucks to its fleet.

A company named Chemours (previously spun off from DuPont) and TC Energy are working together to build a plant that will use natural gas to run the electrolysis system for producing hydrogen at a plant near Parkersburg, West Virginia. This could help bring a hydrogen hub to West Virginia.

Did you know that American agriculture makes up 15% of the demand for natural gas? I didn’t. This article will bring you (and me) up to speed.

Energy Secretary Jennifer Granholm is in favor of the Mountain Valley Pipeline.

A methanol plant that was begun in 2017 has officially been opened in Institute, West Virginia. A lot of West Virginia politicians were in attendance. This is the kind of thing we need here in WV. Pipelines are great and all, but turning our raw materials into finished products, or even just adding value before shipping it out of state, is what we really need.

We used less gas from storage this last winter than we have in the last seven years. That’s the main reason that natural gas prices are so low right now.

Natural gas production is expected to increase in May.

During Antero’s quarterly earnings call, they boasted that they now hold the world record for lateral feet drilled in 24 hours at 12,340. That’s about 8.5 inches per minute. Also, that’s longer than many horizontal sections of existing wells, so that gives you an idea how quickly the drilling portion of well development can happen.

If you’d like to read EQT’s quarterly earnings call transcript, you can find it here.

If you’d like to read SWN’s quarterly earnings call transcript, you can find it here.

If you’d like to read CNX’s quarterly earnings call transcript, you can find it here.

NNE is doing something unusual. They’re drilling a deep geothermal and carbon capture data well. It’s not for “production”, it’s for “science”. In other words, they’re collecting data. Sometimes wells are for both production and science. Shoot, in oil and gas if you’re not doing some kind of science on every well you drill you’re going to get left behind. This one’s primarily for the science, though, as both deep geothermal and carbon capture are such new technologies.

Equitrans, the midstream company that’s building the MVP, published it’s first quarter report. I haven’t read the whole thing, but it does discuss the MVP, stating it believes permitting will be successful, but also that there’s a lot of uncertainty around the project.

Senator Shelley Moore Capito from West Virginia has introduced a permitting reform bill to Congress. That makes three bills on permitting, all from West Virginia representatives. This is important for West Virginia’s lawmakers.

Natural gas production and demand both continue to grow.

Oh, great. I get to vote for either Joe Manchin, Jim Justice, or Alex Mooney for U.S. Senate this next time around. Fabulous choices, just…..fabulous. In spite of his vote for the IRA in exchange for, well, nothing, I’ll probably still vote for Joe Manchin because he seems to be more independent-thinking than the others.

The Commissioners of the FERC told the Senate that there is an electric power emergency coming. With the shut-down of coal and natural gas fired power plants, the lack of new power generation capacity, and the lack of natural gas (current low prices are temporary), and subsidized renewable power generation that can sell power far cheaper than other sources (driving them into unprofitability and consequently early shutdowns), we’re simply not going to be able to generate enough electricity for the nation. No dates, or even estimates, seem to have been provided, so I assume this is in the coming years, not months.

OPEC+ can cut back a lot of production still, and is signaling that it will as needed. That means the price you pay at the pump this summer is not going to be less than it is now, and will probably go up since summer is the high-demand season for gasoline.

The EIA is predicting record natural gas production this year and next.

The White House is now on record backing Joe Manchin’s permitting reform bill.

Joe Manchin is going to oppose all nominees to the EPA in protest of a recent EPA proposal that will regulate carbon pollution from fossil fuel power plants.

The Clean Air Council has filed a lawsuit in an attempt to shut down the PA cracker plant.

Natural gas prices are at $2.28/MMBtu, up a little from last month, and up from a low of $2.02, but not exactly a healthy price. Oil prices are at about $80/bbl, up from about $63/bbl. Drilling rigs are at 748, down six from last month, though they did get up to 758 one week. Gas storage levels are at 1,885 Bcf, and starting to climb as we’re in injection season. We’re still above the five year average, but not at the five year high any more.

Natural gas consumption was up last year according to the EIA.

Ethane demand was up last year, too, which is good for West Virginia because a lot of our gas has ethane which is split off and sent up to the cracker plant in PA.

They’ve had to flare gas at the Shell cracker plant in PA again.

People have been exploring the possibility of using the Marcellus/Utica region for carbon capture and sequestration. Enverus has published a report stating that it would be uneconomical.

Saudi Arabia is still talking about divesting. They want to decrease their reliance on oil exports for revenue. Last year the percentage of their budget that came from oil exports was as high as 79%. They have a long ways to go.

Implementation of the Biden administration’s version of the Waters of the United States (WOTUS) rule has been stayed by a Federal judge until a Supreme Court decision in Sackett v. EPA has been handed down later this year.

Sempra has given the green light to a new LNG plant in Port Arthur, Texas. It’ll be years before it’s finished, but it will likely use some gas from the Marcellus region. Interestingly, the builder is Bechtel, the same company that was going to build a cracker plant in West Virginia. Too bad they didn’t do that. We could use another cracker plant.

A West Virginia Congresswoman, Carol Miller, has introduced an amendment to H.R. 1, The Lower Energy Costs Act, that will ensure that the Mountain Valley Pipeline gets completed.

Pipeline construction seems to have destroyed a PA man’s property, and the pipeline hasn’t made it right yet. He’s suing. We take care of this kind of thing before any documents are signed, including making sure the space the pipeline can use is very clearly defined. This is also one reason that I hate our eminent domain laws, they give way too much power to a pipeline and not enough control to the landowner.

Here’s an opinion piece published in the Charleston Gazette-Mail which makes an argument in favor of the Mountain Valley Pipeline.

Silicon Valley Bank going into receivership affected everything to some extent, and even touched oil and gas. According to this article, it affected oil prices, but not a lot.

Republicans and Independents support H.R. 1, The Lower Energy Costs Act. No data is provided on Democrats, presumably because they weren’t polled for the survey.

A federal judge has ordered the federal government to resume lease sales in North Dakota.

Here’s an interesting article that focuses on volatility in the oil and gas market.

Researchers at WVU will be looking into methane leaks at storage tanks and ways to mitigate methane loss. Can’t imagine the industry is too upset about that.

The 4th Circuit actually approved a Virginia water permit for the Mountain Valley Pipeline! The 4th Circuit said the state agency followed proper procedures and so it won’t invalidate the permit.

The Marcellus/Utica area produced the most natural gas of any area, but only grew by 1% in 2022, due to pipeline takeaway constraints. Anyone keeping up with this monthly blog post is probably not surprised by either of those facts.

Shell says that emissions at the PA cracker plant are at or below permitted numbers because of greater efficiency than expected in the flaring system. Sure wish they didn’t have to flare as much as they do. Such a waste.

A group of PA volunteers monitors the quality of water in streams. 19 of those streams are at risk from Marcellus shale well drilling, but none of them have shown signs of contamination or even significant changes from drilling activities.

An article in the New Yorker discusses Republican efforts to tie permitting reform to raising the debt ceiling, and why Democrats should be excited about it.

The Freeport LNG plant is back to full capacity!

This could be a very big deal. The way that the Brent oil price is calculated is about to change, taking into effect oil delivered to Europe from the United States. The actual details are important, so click through and do some outside reading if this is important to you.

In related news, the amount of oil the U.S. exports increased in 2022, up 22%!

The U.S. is producing more and more natural gas, and shipping LNG worldwide will help use up all that gas.

Here’s an article on natural gas prices written from the point of view of a stock trader.

H.R. 1, The Lower Energy Costs Act, passed the House, but is unlikely to pass the Senate.

OPEC+ has announced a 1,000,000 bpd cut in production. Sheesh.

Natural gas prices are low, but production continues to increase, thanks mostly to oil production and the natural gas that is naturally associated with it.

The 4th Circuit has thrown out West Virginia’s water permit for the Mountain Valley Pipeline. Joe Manchin was not happy. Probably taking out his frustrations with himself for his own mistake on others. I’ll stop harping on that mistake someday, because everybody makes mistakes. Just not today.

And just like that, US LNG exports have hit a new record high.

This article by Irina Slav over at oilprice.com lists five major trends driving oil and gas in 2023.

Low natural gas prices are due to low natural gas consumption, and January and February of 2023 saw the lowest consumption for a January and February since 2017.

The Forest Service has issued its final Environmental Impact Statement, for the third time. Legal challenges will be filed.

West Virginia passed a bill that will promote the development of natural gas power plants. The coal industry had some arguments against it, of course, but the fact is we’re shipping jobs out of state when we ship the raw material out of state.

Natural gas prices are at $2.41/MMBtu. Whew. That’s low. They hit a low of $2.07 and a high of $3.01. It’s very weather dependent right now. With some cold weather in the forecast, we’ll probably see prices climbing back up to around $3.00. Natural gas storage levels are at 2,030 billion cubic feet, right at the top of the five year average. That number is down from last week, of course, but about 500 billion cubic feet more than we had last year at this time. Drilling rigs are at 746, down from 761 last month. Oil and gas producers have seen the writing on the wall and are brining less new product online. That will keep prices from really bottoming out, but weather is always the biggest factor.

I’m not the only one that thinks the price of natural gas has bottomed out. There are more articles out there that say the same thing. While the price may not rebound strongly, and there’s always the off chance that it will go down some more, I think we’ve hit bottom.

Did you know that the main thing keeping new LNG plants from opening up is the difficulty of finding buyers? That’s what this article seems to suggest. I really though there was more than enough demand out there in our great big world, but that’s not necessarily the case for LNG.

OPEC+ is sticking to its guns. They won’t change the production numbers they arrived at last fall, which means that oil prices (and consequently prices at the pump) are not likely to go down this year.

EQT seems to be expecting natural gas prices to stay roughly the same over the course of this year.

The cracker plant up in PA has been hit with fines over its emissions. Turns out, when your plant isn’t running right and you have to flare a bunch of gas, you emit more waste particles. They should really have gotten that plant running right before turning it on. I know that’s a little simplistic, as that plant is ridiculously complex, but they really should have it running right by now.

West Virginia Attorney General Patrick Morrisey is suing the Biden Administration over the Waters of the United States (WOTUS) rule. It’s complicated, but expanding the rule to include more waters and wetlands essentially takes away State authority, giving it to the federal government. There are a lot of ramifications, too. It’s worth doing some research on.

Freeport LNG has been greenlighted to restart two of its three liquefaction trains. One is already operational, and it seems as if the second will be operational by the time this blog post is published. It’s unclear how much longer the third will take.

If you’d like to read Antero’s Q4 2022 Earnings Call Transcript, it’s available. We haven’t read it yet, but there’s always something of interest to be gleaned from it.

Tax values for oil and gas rights in West Virginia are outrageous. I’m not sure who the legislature had “fix” the tax valuation problem, but they didn’t fix it. One of the main issues is that the tax bills are two years behind. People are paying for 2021 in 2023. It’s weird. They also value the minerals in the ground based on the production, which is just not an accurate value. I can’t criticize too much, though, because I don’t have a solution. This is going to take a bunch of smart people some serious time to figure out. Or maybe they could just look at how some other oil and gas states do it and pick one that makes sense. Don’t reinvent the wheel unless you have to, folks.

A post over at Rigzone does a good job analyzing the short-term price of natural gas. The short story is that we are probably at rock bottom, but the price of natural gas isn’t going to rise much until later in the year.

Cheniere intends to expand Sabine Pass. More LNG exports! It’ll be years away, of course, as this is just the planning stage.

Senator Ted Cruz has introduced legislation that would increase LNG exports. Again, it’s early in the process so don’t get too excited yet.

Permitting reform is back on the menu, folks! Ah, but it’s going to be a long slog, I fear. I’ll expect permitting reform when I see it.

There’s a little doom and gloom popping up in the press. It’s hard to predict oil and gas prices and activity. The main problem is that natural gas prices are affected by the weather, and we don’t know for sure what the weather next week is going to be like, let alone next year.

The coal lobby doesn’t like the natural gas bill that the WV legislature is looking at, and has proposed its own bill for coal.

The US Fish and Wildlife Service has released another ruling stating that the Mountain Valley Pipeline will not hurt endangered species. It has come under quick attack from environmental groups.

Freeport LNG has been given approval to restart its third and final liquefaction train.

Here’s a bit of a doom and gloom article from Irina Slav over at oilprice.com. Perhaps doom and gloom is too strong of a description, but whenever you see a headline like, “The Shale Boom is Over” it’s hard to think in other terms. The headline is a quote from Pioneer CEO, Scott Sheffield, and is supported by some numbers and logic. And it may very well be true. The boom in the Marcellus Shale area is certainly over, but ongoing production is not. We’re filling the pipelines out of this area all day every day, and it will be a long time before the pipelines start to run at less than full capacity on a regular basis. The only thing constraining the Marcellus is takeaway capacity. So we’re at the end of a boom, but you can’t define it as a bust.

Joe Manchin is opposing Joe Biden’s nominee for Interior Secretary. Speculate away.

A truck hauling drilling mud for Tug Hill/EQT spilled that drilling mud on 14 miles of roads in Marshall County. Somebody forgot to close a valve.

Gas prices are at $2.51/MMBtu, having gotten as low as $2.41/MMBtu and as “high” as $3.59/MMBtu on January 17. Prices have been around the $2.40 to $2.60 range since February 1, so they may have bottomed out. We know they can go lower, but it took a pandemic to do that. Gas storage is at 2.366 Bcf, over the five year average of 2,249 Bcf. At least this month we didn’t add to storage. Drilling rigs are at 761, down 14 from last month. That points toward reduced production in the near future.

The Freeport LNG plant is still offline, and new projections are for the end of February or the beginning of March. It’s the repair job that never ends. The linked article points out that every week it’s offline means one less LNG tanker moving LNG to Europe. That’s actually a lot of gas.

Toby Rice, EQTs CEO, had some things to say about gas production and energy prices in the near future.

Chesapeake’s CEO publicly asked his peers to cut back on natural gas production due to its low, low price. Previously I would have scoffed at an appeal of this sort possibly working, but recent changes in the industry suggest that oil and gas producers have been acting with more financial discipline and constraint, and looking ahead to the future, so maybe this will work.

CNX is using waste heat from a compressor station in West Virginia to generate electricity.

West Virginia coal companies are opposed to the development of natural gas, at least as far as they can oppose it. That means that power plants and other facilities that could add value to the product before it leaves the state are opposed by one of the largest and most powerful lobbies in the state. It’s no wonder we can’t get natural gas power plants built here.

Libya and Italy are partnering up to produce natural gas in the Mediterranean.

Equitrans has gotten approval of its EIS for a pipeline from Green County, PA to Wetzel County, WV. It’s a short pipe, only 5.5 miles long, so not too big a deal in the grand scheme of things. But for people whose property it will cross, it could be a very big deal. It’s an expansion of an existing pipeline called the Ohio Valley Connector.

Just in case you were wondering, we have enough proved reserves of natural gas (625 trillion cubic feet) for the next 20 years at current levels of use (30 trillion cubic feet per year). Yearly growth is growing, of course, but so are proved reserves. Also, proved reserves are an awfully conservative estimate of how much gas we can get out of the ground. As the price of natural gas goes up, the proved reserve number goes up because it’s partially determined by the economics of drilling for the gas. There’s a lot of natural gas in the ground. We’ll be using it for at least another generation.

After the Inflation Reduction Act, building new renewable power generation would be cheaper than building new coal plants in West Virginia (and probably everywhere). This is because of tax incentives. However, coal still has an amazingly powerful lobby here, so getting permits for renewables will be an enormous hurdle. It’s already an enormous hurdle for natural gas, which the coal lobby has less reason to oppose than renewables.

This is disappointing. Back in 2014, West Virginia created a Future Fund, essentially a savings account that would be funded using 3% of the severance taxes collected from oil, gas, and coal sales. It should have been a large fund, but there were exceptions built in to the funding. Because of the exceptions no money was every put into the fund. Legislators have decided to kill the Fund this year.

This article is based more in stock trading theory than in the supply side of oil and gas, but it will be interesting to those of you who trade stocks. It says there are five reasons why natural gas prices are likely to go up.

West Virginia Senator Shelley Moore Capito has released a press release about the Mountain Valley Pipeline. There’s little of substance to it. It’s important mainly because it shows that she and Senator Manchin are still thinking about and working on the pipeline and permit reform.

It was only a matter of time. An environmental group has filed a notice of intent to sue the PA cracker plant for exceeding its permitted emissions limits.

Diversified Energy has a new headquarters in Bridgeport, West Virginia. The grand opening was on February 3, and they got some very important people there.

The respective oil and gas associations of WV, PA, and OH put out a press release promoting the benefits of natural gas. These press releases don’t really do much. They’re mostly read by those who agree with them. But putting your opinion out there is still important.

The public comment period on the third version of the EIS for the Mountain Valley Pipeline has been extended until February 21st.

Freeport LNG has been granted permission to load LNG onto ships. This isn’t a full restart of the plant, but it’s a step that way. Full operations are not expected to resume until mid-March.

Diversified Energy is right back in the news, announcing it has acquired $163 million to fund acquisitions. The acquisitions will not be in the Marcellus/Utica area, but since Diversified is now headquartered here, it seemed appropriate to point this out.

RBNEnergy has published a long-term prediction of what’s going on with natural gas supply and demand. As with everything RBNEnergy, it’s worth the read.

Senator Joe Manchin is mad about how the President is implementing the IRA. I have very little sympathy for him. He threw away all his negotiating leverage, expecting other politicians to act on a promise that was going to be hard for them to get political action on. He’s now trying to win back some negotiating leverage, but he’s having to work hard for it. And now he’s mad. Sigh. Seems a little petulant.

The Progressive Policy Institute, a Democrat, left leaning organization, has published a paper supporting doubling natural gas exports and building new natural gas pipelines. That’s wild!

The WV House has approved legislation giving $105 million to a company that will build batteries in the northern panhandle. I get frustrated hearing the opposition say that batteries will be in competition with oil and gas. Batteries are energy storage, not energy production. The energy they store will come primarily from natural gas, oil, and coal, with some renewables sprinkled in there. More batteries is good for West Virginia, particularly when they’re built here.

This post is up a few days late this month. Family responsibilities and an enormous amount of oil and gas news is to blame, not my lack of focus. Nope, definitely not that.

The price of natural gas is at $3.42/MMBtu, a crazy drop from the high of almost $7.00/MMBtu last month. In fact, it’s been a very consistent drop. The issue has been warmer winter weather than usual, leading to less need for heating. The price may have bottomed out, as there is a chance of a good winter storm coming through toward the end of January. The weather guys are all over the place at the moment, though. We’ll see what happens.

Gas storage is at 2,902 Bcf, right at the five year average. There was actually an increase of 11 Bcf last week, something that never happens this time of year. Rig counts were at 775, down one from last month.

Welcome back to prediction season! All the prognosticators, prophets, and seers of oil and gas will be giving their opinions about where the price of energy will go in the next year. Kind of like weather predictions, most, if not all, will be wrong. It’s the analysis that you want to pay attention to.

RBNEnergy did an article about the methane emissions that would be offset by the Mountain Valley Pipeline being built and used.

This article includes quotes from a number of legislators and makes it seem as if Joe Manchin’s permitting legislation is not dead.

Some northern panhandle residents are requesting more monitoring of a compressor station. The compressor is noisy and puts off a lot of air pollution. This is pretty typical for compressors. They should probably be a little more regulated and the pipeline companies should be more considerate of their neighbors. Good will does affect the bottom line.

The Freeport LNG plant is taking natural gas again. It’s a small amount, and the company predicts the plant will be back online in Q1 of 2023, so this is probably nothing at the moment. When it does come back online it will affect the price of natural gas, both domestically and internationally. UPDATE: a restart has been pushed back to the end of January.

Both natural gas and coal use increased last year. So did solar and wind use. So we are using more of everything, not reducing anything.

Lawyers representing the West Virginia State officials that are named as defendants to the suit that is challenging the West Virginia forced pooling law have appealed to federal court. This after the federal court remanded the case to the State court.

I think we should build the Mountain Valley Pipeline. I don’t think we should use misinformation to get it done. This article quotes Joe Manchin’s numbers, and while they’re correct numbers, they’re also badly used. First, he says that if we don’t complete the pipeline we’ll lose out on 2,500 jobs. Those are construction jobs, not pipeline operations jobs (there will be about 40 of those), and since the pipeline is just about finished, a lot of those workers have completed their jobs. Second, he says WV will lose out on about $40 million in severance taxes. That’s in the short term. Long term, all that gas is going to get produced anyways. He says landowners will lose out on $300 million in royalties. Again, that’s short term. In the long term, all that gas is going to get produced and those royalties will be paid. There are good arguments for completing the MVP, but these aren’t them.

Here’s another article about Atlantic Coast Pipeline easements getting released. It’s been a long, hard slog for a lot of landowners to get this done. Our clients don’t have to worry about it. We got language in the easement agreement stating that it would expire on its own if it was not used for a specific period of time. Every landowner should get this language in their pipeline agreements.

RBNEnergy makes predictions at the beginning of every year. These are not your typical “gas is going up to $100/Mcf” kinds of predictions. They’re more focused on things that will affect the balance of supply and demand. For instance, they predict that the Appalachian region will be constrained by takeaway capacity in 2023, with total production from the region being 35 Bcf per day or so.

A natural gas processing plant exploded in SW PA on Christmas morning. There were no deaths or injuries, thank goodness, but one family evacuated over fear that an additional explosion might follow.

Production across the Marcellus/Utica region dropped by almost 1/3 due to the the winter storm that dropped temperatures to below 0 degrees Fahrenheit and brought high winds with it. Regular production was restored within a few days. New England turned to fuel oil to provide its energy needs during the storm, not renewables. If they’d allow some pipelines to be built, they could use cheaper and cleaner natural gas.

Hope Gas is buying People’s Gas of West Virginia. These are utilities, so not involved much in gas production, but any West Virginia readers will want to know about this.

Right on the heels of extreme cold comes unexpected warmth, and natural gas prices are going down because of it.

EQT’s purchase of Tug Hill has been slowed down by the FTC, so the two companies have agreed to extend the deadline for closing.

There’s a new chairman at the FERC, Willie Phillips. He seems qualified, and there’s not a lot of negative chatter about him, so we’ll see how this goes. At the moment he has the designation of acting chairman, so it could be temporary. Here’s some analysis by knowledgeable people.

This probably deserves its own post, but for now this will have to suffice. The 4th Circuit Court of Appeals ruled that the Market Enhancement clause, the clause that Antero Resources always tries to get people to agree to, allows some post-production costs in some circumstances. We’ve encouraged our clients to wait Antero out, to not settle for the Market Enhancement clause. In some cases we’ve allowed our clients to sign leases with the Market Enhancement clause in it, but only where the other option was to not get a negotiated lease at all. We don’t like the Market Enhancement clause, and I think if you ever get a chance to read it, you will understand why. Don’t use Antero’s Market Enhancement clause.

We’ve wondered why Antero shuttered its frackwater treatment plant in Doddridge County. They just won a lawsuit against the company that built it for them, with $242 million in damages. That’s got to be what they paid for the plant. I suspect the plant was defective in some way that was impossible to fix. It’ll be interesting to see what details emerge about it in the future.

The first round of cuts for the hydrogen hubs is out, and West Virginia is, well, not out. Apparently there were a few applications that were TBD, including WV, but that’s better than being told no.

A food products manufacturing plant is locating in Marshall County, West Virginia, in part because of the abundant natural gas available here. This is the kind of thing we need a lot more of in WV. We should be adding value to our energy resources before shipping it abroad, rather than just taking it out of the ground and selling it as-is.

Natural gas prices are at $6.94/MMBtu. They hit a high of $7.31 and a low of $5.47. Most of that movement has been weather related. Gas storage is at 3,412 Bcf, right about the five year average. Drilling rigs are at 780, having hit 784 for a couple weeks. That’s only one higher than last month.

The cracker plant in PA has finally, officially, commenced operations! While it has been operating, it hasn’t been at full capacity until now. Even now, we’ve seen statements that it won’t hit full capacity until sometime next summer.

Use of natural gas increased during 2021, due mainly to exports and industrial use.

Frac sand mines have seen an increase in demand, but like the rest of the drilling industry they are remaining disciplined, not opening new mines or increasing capacity. Maybe we really are seeing the last of the boom/bust cycle. At least, while the current generation of entrepreneurs and investment bankers is in charge.

The new lawsuit against the West Virginia forced pooling law is being litigated, with the plaintiffs responding to the defendants’ motion to dismiss. A motion to dismiss is pretty standard at this point in litigation, as is a response.

RBNEnergy’s short write up on the new cracker plant up in PA is worth the read.

This is interesting. Someone is studying the feasibility of using old oil and gas wells for geothermal heating. Not generating electricity, just heating homes, barns, and greenhouses using hot water from the wells. Seems like a worthwhile study.

Judge Hummel, the judge who pulled out a gun during a hearing involving EQT lawyers, has resigned from the bench.

This article is poorly named, but it includes some interesting data regarding DUCs and drilling rigs.

The cracker plant up in PA has had a “flaring episode“.

Pennsylvania Senator Pat Toomey has introduced a bill to help the Mountain Valley Pipeline get permitted. That effort comes from an unexpected source, but it’s still welcome.

OPEC+ cut oil production by 1 million bpd in November. Surprisingly, oil prices mostly went down in November.

Democrats are trying to put Senator Manchin’s permitting bill in a defense spending bill.

The court challenge against the new pooling law has run into a snag. The federal judge has remanded the case to State court, saying that there were State law issues that needed to be determined at that level.

RBNEnergy analyzes the “frac spread” or the difference between the price of gas coming out of the ground and the price of a barrel of NGLs. Don’t read this while sleepy.

That was quick. Manchin’s permitting bill language was removed from the defense spending bill.

The U.S. is going to double the amount of LNG it sends to the U.K.

Two oil and gas companies are suing the Biden Administration to try to force the leasing of federal land out west.

West Virginia really needs to jump on this train. CNX is talking about using natural gas here where it’s produced. This is something I’ve mentioned in the past, something that would be great for West Virginia. It’s never good to be the place where other people come to take things away. You have to add value to the product or you’ll never become a stable economy.

West Virginia’s first natural gas fired power plant will be in Doddridge County. If it gets built. There have been others announced in the past. We’ll see if this one gets past the coal baron old guard.

If you’d like to read a lot more about hydrogen as a power source, here’s the article for you.

This report is out late this month. We were on vacation on the 15th, and it has taken some time to get around to this item on the to-do list after getting back. My apologies for it being so late.

These numbers are taken from the 15th of November. Natural gas prices are $6.03/MMBtu. They hit a low of $4.96 and a high of $6.94 in the last month. Gas storage is at 3.6 Tcf, up a bit from last month. Next month the numbers should be going down. Drilling rigs are at 779, up 10 from last month.

Here’s a pretty bare-bones prediction of natural gas supply and demand forces for the upcoming winter. This prediction does not include a price prediction, so it’s actually worth looking at.

The WVU Energy Institute is excited about, or at least is doing research into, hydrogen. Seems like everybody is interested in hydrogen as an energy storage solution these days. Of note in this article is a mention that the carbon from burning natural gas to create hydrogen would be easily (well, more efficiently) stored in depleted natural gas formations. I’ve wondered why burning natural gas to create hydrogen would be efficient. This helps me understand that better. A large energy plant is always more efficient than many small generators, and you could plausibly save enough on that fact alone to make capturing the carbon at that one location and sequestering it financially viable.

Joe Manchin is now the third least popular U.S. Senator, according to a Morning Consult poll. He was pretty popular before his disastrous handling of the MVP/IRA deal.

The Mountain Valley Pipeline has cancelled eminent domain proceedings for a portion of the pipeline called the Southgate Extension. It’s unclear exactly why, and this portion of the pipeline is not needed to complete the pipeline, so the ramifications of this decision remain unclear.

One reason that manufacturers are making the decision to locate in West Virginia is that we have energy here. To be honest, I hadn’t heard that manufacturer’s were moving to West Virginia in droves, but the article makes some good points as to why it would be smart, and financially beneficial, to do so.

Lithium is necessary for batteries (using current technology) and rather rare. Most of our supply comes from overseas. There are quite a number of lithium production projects planned for the next few years, though.

A federal judge is questioning whether West Virginia’s DEP created regulations that meet the standards sent down by previous rulings.

Just in case you were wondering, here’s an article about why there’s a diesel shortage right now. Side note, gas prices are complex, and this article addresses only one of the factors that can determine the price of gas.

The increase in the cost of natural gas led to natural gas being used less for generating electricity. The usual replacement for natural gas is coal.

The Inflation Reduction Act is likely to increase demand for hydrogen and reduce the demand for natural gas.

Here’s a Bloomberg Energy post about the souring relationship between oil companies and the Biden Administration.

Senator Manchin is throwing his weight around again. This time he is refusing to have a hearing to re-approve the FERC’s Chairman, Rich Glick. Glick is anti-natural gas and pipelines, and is an odd person to have in charge of the FERC, and Manchin has been working to get the Mountain Valley Pipeline built, so it makes sense that Manchin would be hesitant to hold a confirmation hearing for him.

The Saudis are saying they’ll “be cautious” with oil production. OPEC meets December 4, and this statement hints that they will not increase oil production.

West Virginia has collected a lot more severance tax this year. A lot more. Sure do hope the State invests that money rather than just spend it.

Natural gas prices are at $6.05/MMBtu. That’s as low as prices have been since July, and we didn’t establish a new high this month–the price has pretty consistently gone down. Drilling rigs are at 769, up six from last month. Storage is at 3,231 Bcf, which is a move in the right direction just before storage season ends. We’re still below the five year average, but right between the five year average and the five year low. Last month we were awfully close to the five year low. Those higher storage numbers probably have something to do with the lower price of natural gas.

While the number of drilling rigs has been growing slowly, and even declining (first two weeks of September 2022), the number of drilling rigs focused specifically on natural gas has increased to above pre-pandemic levels.

Is this finally actually going to happen? Will West Virginia finally get a natural gas fired power plant? There have been three announced in the past, two up in the northern panhandle and one in Harrison County, but none of them has even broken ground. We now have an announcement that a company called Competitive Power Ventures will be building one, location undetermined. This article from a Connecticut newspaper (it seems the company is based in CT) has a lot more detail, but is still lacking the location.

The United States has passed the 100 Bcf/d production mark for natural gas for the first time.

Here’s a prediction that this winter will see higher natural gas prices. Take any prediction with a grain of salt because the oil and gas industry is ridiculously unpredictable, but the analysis on this one is worth reading.

Here’s an analysis of U.S. oil production, and the reasons why it’s not growing enough.

The PA cracker plant hasn’t been operating long, and it’s already had an “incident”. A process compressor shut down and the result was flaring and a lot of black smoke. Nothing seems to have been hurt, and it’s no surprise that such a complex plant would have some troubles starting up. Hopefully there won’t be any other issues going forward.

Joe Manchin has introduced legislation that will expedite permitting of the Mountain Valley Pipeline. The legislation has created a lot of discussion, and a good portion of the discussion is included in this article. UPDATE: Joe Manchin has pulled his legislation from the Continuing Resolution it was attached to. The deal is dead, at least for the moment.

Some people are challenging the Mountain Valley Pipeline in another way, attacking eminent domain. Now, I think the MVP should be built. I am, however, not a fan of eminent domain. It has it’s place, but it’s abused and misused at this point in our legal history. A challenge to eminent domain holds a place near and dear to my heart, and if they succeed, I’ll be very happy. MVP will have to deal with landowners in the way it should have years ago, contractually. Will MVP pay more now than it would have years ago? Yes. Should MVP have dealt with these people in a different way? Absolutely yes. It’s the price of business. I have clients who were mistreated by MVP. They should have gone about things differently. Build the pipeline, but treat the landowners right.

Here’s some analysis as to why natural gas prices are so high right now. One reason they don’t mention is that oil and gas CEOs are now incentivized to turn a profit rather than incentivized to produce a lot of gas. That’s a rather recent change in the industry, and will probably dictate the amount of supply for years to come. There will be “balance”, or rather, CEOs will determine how much gas to produce based on what the market can take at a price that provides the highest profit for the company.

President Joe Biden has told gasoline sellers to bring prices down, now. It’s odd, he’s done that once before and pretty much gotten the same response–nothing. The market does what the market’s going to do. Even a person as powerful as the President of the United States can’t just tell the market to do something and expect it to happen.

The State of West Virginia is teaming up with some private companies, including EQT, to bring a hydrogen hub to West Virginia.

The Nord Stream pipeline, which carries natural gas from Russia to Europe, was destroyed. There’s a lot of talk around who did it, but it’s considered highly likely that it was destroyed on purpose by Russia.

If you would like to read a lot more detail about EQT’s acquisition of Tug Hill, RBNEnergy has an article for you.

The major thing that has oil and gas companies troubled is inflation. Join the club. They also have a couple other concerns.

OPEC+ has decided to cut production by 2 million barrels of oil per day. That’s a serious cut, and will increase prices for gasoline.

The number of Drilled but UnCompleted (DUC) wells has gotten to its lowest point since 2014.

Opposition to pipelines in Appalachia has discouraged investment capital in the region.