Natural gas prices are at $8.39/MMBtu after reaching a low of $7.84 a week ago and a high of $9.26 on the first of the month. Volatility is the watchword these days. Drilling rigs are at 759, a decline of four since last month! We got up to 765 around the first of the month, so that’s a decline of six in the last two weeks. I’ve got to admit, that’s strange and unexpected. Looking at the news I don’t have a good explanation for it. Gas storage is at 2,771 Bcf, and increase of 77 Bcf, and still very close to the five year low.

The group called Appalachian Energy Frontier is made up of nine members. Its goal is to bring development of hydrogen energy to our area. Three of the members, Equinor, Shell, and US Steel, have applied for the $2 billion grant that is available through the US government for the development of a hydrogen hub. At first blush it’s a little odd that only three members would apply, but the AEF is really only an informational group, trying to raise awareness and educate the public and private sector about hydrogen.

Eighty percent of West Virginians support oil and gas drilling. You don’t say? There are some other statistics in the report, so a quick click through is probably worth it.

FERC has granted Mountain Valley Pipeline a four-year extension on its certificate.

Plugging old oil and gas wells is a good thing any way you look at it. The Department of the Interior has released money to the States for plugging, and West Virginia is getting $25 million. They plan to plug 160 wells with that. That’s not a lot of wells, but a little is better than nothing. At least we’re not PA, they’re only plugging 50 wells with their $25 million.

Southwestern won’t be able to drill within Weirton City limits.

We’re shipping more and more natural gas overseas, but there’s a limit to the number of tankers that can ship LNG. They’re specially built for the purpose. Combine that with decreasing volumes from Russia, and Europe is looking at very high prices. Winter might be tough for them over there.

Russell Johns, a professor at Penn State University, has written a letter to the editor, published in the Daily Collegian, in which he states that natural gas and nuclear have a smaller carbon footprint than solar and wind energy production. I’d like to see actual numbers on that.

EQT has bought Tug Hill for $5.2 billion. Any of our clients who signed leases with Tug Hill will now be working with EQT. It doesn’t change the lease in any way. EQT has to honor the terms of the lease exactly as it was signed.

The UK banned fracking a few years ago. Now that the energy is truly needed, the UK has reversed its ban.

I haven’t seen an article talking about Technically Recoverable Resources (TRR) in quite a while, so here’s a link to an article about CNX over at Seeking Alpha. It includes a bunch of interesting maps and analysis of the best areas to drill. I had no idea that Monongalia County was such a good area for Utica development. I’m surprised that nobody has pushed harder there. Prices are pretty low, relative to the rest of the “good” counties. Seems like a great long-term investment area. Northeast Natural Energy is the only company really working there, well, and CNX, as evidenced by the article. But CNX doesn’t do as much leasing there as NNE, so they aren’t first in my mind when I think of Mon County natural gas development.

Two people in the northern panhandle filed a lawsuit trying to invalidate West Virginian’s new forced pooling law. That lawsuit has been thrown out, but they could still refile.

Shelley Moore Capito has introduced a bill to the Senate that will codify the agreement that Joe Manchin made regarding permitting for the Mountain Valley Pipeline.

Antero has acquired pipelines and compression stations from Crestwood in the Harrison and Doddridge County area. This announcement notes that it brings 425 drilling locations under Antero’s control. Perhaps Antero will increase drilling and leasing activity in Harrison County again. It sure has been a while since Harrison was a hotbed of activity.

Gas prices are at $8.79/MMBtu. Rigs are at 763, up from 756 a month ago, but down four from the high. Gas storage is at 2,501 Bcfs, still hanging out near the five year lows.

Libya may begin producing at full capacity here soon, as the government has reached an agreement with the protesters.

In a royalties case involving EQT, the judge in the case has apparently gone off the deep end, waving a Colt 45 around and making a lot of other comments that are not, well, judicious. He also placed the gun on the bench and rotated it until it was pointing at EQT’s lawyer. I hesitate to post this as Judge Hummel seemed like a pretty decent person the two times I interacted with him, and I suspect there will be more to the story. Remember, this is EQT we’re dealing with here, and nobody likes EQT around here, for good reason. A judge has to show up and be the judge, but I can imagine EQT lawyers being really bad to him over a long time as well. It will be interesting to see how this plays out. One thing I’ve learned as an attorney is that there are always at least three sides to every story, and if more than two people are involved, the number just goes up. Last point, though, is that one of the first rules of gun safety (most gun safety lists make this rule number one or number two behind “always treat every gun as if it’s loaded”) is that you always keep a gun pointed in a safe direction. It should never be pointed at a person unless you intend to shoot them. That was a serious lapse in judgment, and if it happened, then something needs to be done.

UPDATE: A prosecutor reviewed footage of the incident and said he did not see any criminal actions. Judge Hummel displayed the pistol for a few seconds, but did not point it at anyone. There will be more news about this incident in the future.

This could be big news, bigger than a judge going off the deep end. An EQT well seems to have “communicated” with an abandoned gas well (this part’s not a huge surprise) and a water well in PA (this part is). Early in my career I had a few people call me telling me that fracking had destroyed their water wells, but the investigation never went anywhere. It was something that everyone thought could happen, but no one could ever find hard evidence of. This case seems to be the hard evidence. This could shake things up in the industry.

Joe Biden is in Saudi Arabia to talk energy. The U.S. President was told, essentially, that his energy policy is bad.

This article suggests that OPEC will not be able to balance supply and demand either in this year or next.

A 30,000 foot analysis of the production capacity of OPEC members and world demand.

Peace may be coming to Libya! The Prime Minister and the rebel leader are making friends. How long will it last? Who knows, but even a little less war is a good thing.

Hydrogen storage may become a thing in the future, and depleted natural gas formations are currently the cheapest option. Whether they are the overall best option remains to be seen. However, it’s important to note that some oil and gas leases may allow for the company to convert them over to storage agreements. If that’s the case, you may end up in a long-term agreement that doesn’t pay you much money. When negotiating an oil and gas lease, make sure it’s for the development of oil and gas only.

An engineering professor at WVU is developing a coating for power plant turbine blades that will allow hydrogen gas to be used on existing equipment.

And Libya is now exporting oil.

We all know polls can be, er, loose with the truth. The truth lies in how the questions are presented and how the results are interpreted. EQT recently paid for a poll that showed that a huge majority of voters across the country and in all political affiliations support natural gas. The interesting thing is, the polling company is the same polling company that Joe Biden uses. That’s some good political thinking. I still don’t like EQT’s treatment of mineral and royalty owners, but I’ll give them props for this move.

The Freeport LNG plant won’t return to service until October. Expect natural gas prices to stay high until then. Interestingly, the plant has a pretty poor safety record. We had been unaware of this until now.

Some West Virginia landowners have sued EQT and Diversified, claiming that EQT sold Diversified its collection of old wells just to avoid the plugging liability, and that Diversified has been cooking the books to make itself look solvent. In other words, EQT is avoiding liability by using a bankrupt company to hold liabilities. Whether that’s true or not, Diversified collecting so many old wells does set off alarm bells.

The United States became the world’s largest LNG exporter in the first half of this year. With Freeport down until October, we may lose that title for a while, but not for long, I suspect.

Diversified Energy has announced their acquisition of a third plugging company.

Joe Manchin reached some kind of agreement with Nancy Pelosi and has agreed to support the Inflation Reduction Act. Hopefully there’s something that will benefit the Mountain Valley Pipeline in the future, but the Act itself doesn’t.

The State of West Virginia has blacklisted five financial institutions that have policies against coal, natural gas pipelines, and other activities which the state relies on.

Word is coming out that part of Joe Manchin’s deal was that regulatory agencies would be a little more lenient on permitting, and that all litigation for the MVP would get moved to the D.C. circuit instead of the 4th circuit. We’re not sure what to think about this. There doesn’t seem to be anything solid here, yet. Manchin has enough political clout that a promise to him probably won’t be broken, but it’s hard to trust right now.

Just for fun, here’s a good article about hydrogen’s use in our energy industry and whether a hydrogen hub makes sense.

The cracker plant is up and running! All the producers are happy to hear that.

A 30-inch natural gas pipeline near Coolidge, AZ exploded, killing a father and daughter, and severely injuring the wife. Don’t let anyone tell you that pipelines are completely and totally safe.

Natural gas prices are at $6.96/MMBtu, down significantly from last month’s $7.42. Natural gas in storage is at 2,369 Bcf, which is below the five year average but just above the five year low. Drilling rigs are at 752, up 19 from last month. Slow and steady increase, we like it. We wouldn’t mind seeing a little more increase, but at least it’s not booming so we hopefully won’t see a crazy bust.

The website Modern Diplomacy has published an opinion piece calling for the Biden Administration to allow drilling for kerogen in the Green River Formation. This is a formation/play that I had not previously been aware of, and it’s different enough that reading the article is well worth it.

The first four paragraphs of this article are about the Eastern Panhandle Expansion, which would bring gas from Pennsylvania to West Virginia, through Maryland. It’s only an eight mile pipeline, with only one mile of it in Maryland, but one part of the government of Maryland is blocking the pipeline. It’s a little frustrating to see, even if it’s just a relatively small pipeline which will only provide gas to a relatively small number of people.

EQT is investing in a fuel cell that uses natural gas.

The Fed increased interest rates, and oil prices went down.

Pilot Co. runs truck stops across the country, and is investing in CNG and hydrogen. This is large scale adoption of those technologies, and hints at large trucks running on both fuels in the near-ish future.

Tug Hill is considering selling out–for $5,000,000,000.

Put on your tin hats. There are suggestions floating around that the Freeport LNG explosion was caused by Russian hackers. It’s just suggestions for now, so don’t get all uptight and worried about it.

SWN has announced the buyback of up to $1 billion worth of its stock. That’s always a good sign.

The Biden Administration wrote a letter to oil refineries. Chevron wrote back. Both letters are worth reading. Interestingly, Joe Biden quickly said that the Chevron letter showed that the oil refineries were “sensitive” and that they had gotten their feelings hurt. I didn’t get that sense from the Chevron letter at all. To me, the Biden Administration letter came across as somewhat poorly researched and written. It didn’t come across as a first or rough draft, but it seemed to lack some polish. I am not getting into politics here, because oil and gas issues cross the political divide, but this makes the Biden Administration appear desperate.

Natural gas production went up about 2% in 2Q 2022. The article predicts that natural gas production will continue to increase, but in the low single digits.

Cheniere Energy is expanding its Corpus Christi LNG plant.

Oil drilling has increased, and DUCs have decreased. The same is true for the natural gas industry, with the actual numbers being a little different, of course.

Europe is increasing new natural gas production projects.

Mountain Valley Pipeline’s request for a new panel of judges has been denied.

When the Freeport LNG plant went offline natural gas use declined, so natural gas storage naturally increased and the price of natural gas naturally went down.

The American Petroleum Institute and others invited President Biden to visit some American oil and gas sites before he goes to visit Saudi Arabia next month.

The Biden Administration met with oil and gas executives. The meeting was described in various ways, but seems to have been productive.

Mountain Valley Pipeline has asked for another four years to complete the project. This pipeline does not need another four years. This is just MVP signaling that it won’t give up.

Someone over at Yahoo Finance thinks that massive investment is on its way to oil and gas.

The industry is talking more and more about re-fracking. We figured it was only a matter of time.

Refining capacity on the East Coast has dropped from 1.2 Mbpd to 0.8 Mbpd since 2017.

West Virginia oil and gas production increased by 6% last year.

The Supreme Court sided with the State of West Virginia in it’s case against the EPA. If people want something done about environmental (or other) issues, it’s going to have to be through legislation, through elected representatives, which is the way it should be. Major decisions need to be made by those who can be held accountable for those decisions, not unelected bureaucrats.

Libya has shut down two export terminals and an oil field.

PHMSA has delayed its new regulations on gathering lines.

Get this! The European Union has voted that the use of natural gas (in some circumstances) is considered to be green. Go figure.

Natural gas prices are $7.19. That’s down from a high of $9.32, and lower than last month. I expect that next month will see continued high prices. Drilling rigs are at 733, up 19 from last month, and still a gradual increase. Storage is at 1,999 Bcfs, up 97 Bcfs from last month. Numbers are below the five year average, but trending slightly up from it.

Diversified Energy has become a large player in the oil and gas industry by buying up old shallow wells and either putting them back into production or plugging them. They’ve acquired a plugging company with two plugging crews and expect to add another plugging crew by the end of the year, making a total of nine.

A study by Rystad Energy predicts (I know, I know) that by 2027 employment numbers in the oil and gas industry will have returned to the same level they were pre-pandemic. That’s interesting in itself, but more telling is how hard the industry was hit by the pandemic. 20% of workers were laid off. That’s tough. No wonder production numbers took a hit. Production isn’t directly correlated to employees, but that’s going to leave a mark.

The wastewater from fracking contains lithium, which is pretty important for making batteries. A researcher named Kyung Jae Lee, with the University of Houston, is working to extract the lithium from the wastewater and use it for making batteries.

Some landowners are suing to have the new West Virginia forced pooling legislation set aside. We wish them the best of luck.

Here’s some analysis of why oil and gasoline prices are so high. It’s not looking like prices at the pump are going to go down any time soon.

Dick Glick has been nominated for another term as FERC chairman. This is bad news for the ACP. He’s not a fan of pipelines.

Finland has signed a deal to import LNG from a company called Excelerate Energy. At the same time, Russia has cut off Finland. In the grand scheme of things, this isn’t a big deal because Russia only provided about 5% of Finland’s natural gas, but the symbolism is important.

Encino Energy just signed a lease for 7,300 acres of land just across the Ohio River from Marshall and Wetzel Counties. The bonus was $5,500/acre and the royalties are 20%. Ohio property hasn’t been as interesting to drillers lately, so this is a good deal for the Muskingum Watershed Conservancy District. Our clients should keep these prices in mind when they’re negotiating for themselves.

The Wall Street Journal points out that oil executives are now given bonuses for making a profit. Previously, they were given bonuses for producing large quantities of oil and natural gas. This is likely the major reason why production is not booming right now.

Saudi Arabia could produce more oil, and probably do it pretty quickly. Well, relatively speaking. But they’re not likely to. An article over at oilprice.com goes into why.

Nucor Steel is building a new plant in Mason County, West Virginia. One big reason is the abundance of relatively cheap natural gas.

One reason our prices at the pump are so high is that during COVID some marginally profitable refineries became unprofitable. The Biden Administration is looking into the possibility of opening some back up.

Lease deals in Ohio are getting better. Nobody has written this article for West Virginia yet. Deals have been getting better here since last fall.

Natural gas production has hit new highs, but still prices climb.

The Mountain Valley Pipeline has requested a new panel of judges for its next hearing in front of the 4th Circuit Court. Previous hearings have all been in front of the same three judges, which is a little suspect because the panels are supposed to be chosen at random.

The Freeport LNG plant had an explosion and fire that will put it out of operations for three weeks. Thankfully, no one was killed or injured.

There’s always an opposite point of view to consider, so here’s an article published by Forbes that analyzes the oil market and discusses how prices could go down.

Libyan oil production is being disrupted even more. The numbers aren’t ridiculously large, but they’re big enough to affect prices.

Oil deals are made in U.S. dollars. Other countries have to buy or use dollars, not their own currency. When the dollar strengthens in relation to their own currency, that makes buying oil more expensive for them. Right now, the dollar is strengthening and oil prices are going up. Usually, when the dollar strengthens the price of oil goes down because of decreased purchasing. That’s not happening right now.

If you want to read more than you ever thought you wanted to about the Appalachian region supply/demand balance, RBNEnergy has an article for you.

Natural gas prices are $7.96. That’s down from a high of $8.78, and up from a low of $6.53. Note that if you had predicted one year ago that that this last 30 days’ low would have been the high, you would have been laughed out of the room/internet. Drilling rigs are at 714, up 21 from last month, and still a gradual increase. Storage is at 1,643 Bcfs, up 76 Bcfs from last month.. It’s the injection season, so that’s expected. Numbers are below the five year average, and getting close to the five year low.

The Biden Administration has re-started leasing federal lands for oil and gas development.

We’ve come out of the winter with less natural gas in storage than we have in the last three years.

A Libyan oil field has been shut down by tribal leaders. That takes about 450,000 barrels of oil per day off the market. That’s not a small amount, and should affect international prices.

The small West Virginia town of Bethlehem is located in the northern panhandle, and has a lot of oil and gas development nearby. One issue that the residents of Bethlehem probably did not anticipate was the noise of trucks driving through at, literally, all hours of the night. You would think that the oil and gas companies would do something about this before they develop a lot of ill will with the community, but in my experience it takes a lot more than a newspaper article to get to them to mitigate anything.

The West Virginia Supreme Court ruled against Antero Resources regarding tax valuation of wells in 2016 and 2017. This isn’t likely to affect any of our clients in any way, but if you’re interested in reading up on some tax law, here’s the link to the decision.

The number of drilling rigs goes up and down, has been as high as 2000 in the past, and has been tracked for decades. The number of frac spreads, on the other hand, has a much shorter history and far less recognition. What’s a frac spread? How many are there and how many can there be? Why are they important? This article answers these questions.

Hackers, probably Russian, have attacked U.S. LNG facilities with malware.

The White House is not very happy that it has to lease those federal lands for oil and gas production.

Russia is cutting off natural gas supplies to Poland and Bulgaria.

Libya has, perhaps temporarily, resumed full production of oil again.

Natural gas production growth has slowed, mainly due to the inability of anyone to build new pipelines. Don’t mistake the headlines–natural gas production is growing. Just not as quickly as it used to be.

Mountain Valley Pipeline is asking for new permits. For the third time. Hopefully this time they’ll figure out how to avoid legal challenges, a/k/a do things right. I’m not an environmentalist, and I’d like to see this pipeline built, but I’m none too fond of the companies that have tried to build pipelines through this area and the way they’ve got about it.

The Biden Administration has canceled a lease on federal lands in Alaska. The administration cited a lack of industry interest in the lease, but Senator Murkowski from Alaska says the industry is interested in leasing the land. It will be interesting to see how this plays out.

Natural gas prices are spiking again. They hit $7.30/MMBtu on April 14th, the last day of trading last week (because of Good Friday). Rig counts are at 693, up 30 from last month, and still part of a long, gradual climb. The last storage report was from April 8, and showed 1,397 Bcf in storage. That’s well below the five year average, but still not below the five year low.

Mountain Valley Pipeline is appealing a 4th Circuit Court decision.

LNG from the U.S. will not immediately replace natural gas flowing through pipelines from Russia to Europe. The sheer quantity of natural gas that the pipelines supply can’t be matched by the number of cargo ships available. Kind of like wind and solar trying to match domestic natural gas electrical generation. There are other reasons listed in the linked article, too.

Looks like the legislature fixed the mineral rights property tax issue that they created last year.

A pipeline in Michigan exploded. Thankfully there were no injuries or deaths. Natural gas is a great source of energy, but you have to think twice before allowing a large pipeline to be installed near you.

When you’re negotiating with a pipeline company, keep the following in mind. Mountain Valley Pipeline wanted to pay about $150,000 for some property, and a jury awarded the landowner over $500,000 for it in the eminent domain proceeding.

RBNEnergy analyzes whether the U.S. could supply Europe with enough LNG to replace all the gas Russia supplies Europe with.

Schlumberger, Halliburton, and Baker Hughes have stopped work in Russia. This is big. Oil and natural gas production relies on service providers, and these are the service providers. oil and natural gas production is going to slow way down in Russia.

West Virginia has submitted an official proposal for a $2 billion hydrogen hub. Those are big numbers. This would be very good for West Virginia’s economy.

The percentage of U.S. LNG going to Europe has increased from 30% to 70% in the last couple months. We’re not producing more, just sending more of what we produce to Europe. That does hint at an increased demand, at least until the war in Ukraine is over.

It might seem like a small change, but FERC has decided that analyzing the environmental impacts of a pipeline will only be done for future projects. In other words, that analysis won’t apply to the Mountain Valley Pipeline.

If you’re wondering why oil and natural gas producers aren’t producing more in response to high prices, Forbes has an analysis for you.

Did you know that EQT’s stock was considered to be “junk”? I didn’t, but they just got upgraded from BBB- to BBB, which takes them out of junk stock territory.

The Biden administration has announced the release of 1 million barrels of oil per day for 180 days. The announcement anticipates a ramp up of domestic production by the end of the year.

The US Transportation Department has adopted a new rule requiring automatic shut off valves for all new pipelines.

Work on an intermodal port in the northern panhandle of West Virginia continues. It could eventually be a benefit to the oil and gas industry.

Shelley Moore Capito is getting in on some of Joe Manchin’s action, pushing for the Mountain Valley Pipeline to be completed.

An analysis of natural gas prices through the summer and into the fall. The company behind the article owns Antero stock and suggests buying it, so they’ve got an axe to grind, but the analysis seems reasonable.

Libya can supply Europe with natural gas. Libya needs to be more stable. Maybe now that Europe needs Libyan gas, we’ll see outside intervention? Could war in one part of the world lead to peace in another?

Years ago, the UK banned fracking. Now that they’re not taking gas from Russia, they’re taking another look at fracking.

RBNEnergy published a quick but thorough look at why natural gas prices are so high.

China cut back on its purchases of LNG. This may help lower the cost of natural gas.

Here’s a good overview of the Marcellus/Utica gas play in relation to other natural gas plays.

So EQT is getting into the rare earth minerals business? Hmm. It’s not April 1st, so this must be real, but it’s not a clear logical business move.

Gas prices are at $4.65/MMBtu, with a high of $5.02 and a low of $4.40 in the last month. Prices are stabilizing a bit, but who knows what the near future is going to bring. There are 663 drilling rigs, up 28 since last month. That slow but steady increase continues. Will it remain slow but steady with the war in Ukraine? Natural gas in storage is at 1,519 billion cubic feet, well below the five year average, but not the lowest we’ve seen in five years.

Well, it’s more bad news for the Mountain Valley Pipeline.

The West Virginia legislature continues to loosen regulations on above ground storage tanks. Not everyone is happy about that.

With oil prices pushing $100/bbl, we can expect to see increased oil drilling and along with increased oil drilling comes “associated gas”, the natural gas that is produced in association with oil. The Marcellus Shale doesn’t produce oil, so we don’t have associated gas. We just produce gas. Associated gas usually takes some of the market away from those of us in the areas that only produce gas. This time around, that may not be the case.

Joe Manchin is starting to throw some of his political weight at the MVP and FERC. The catalyst for this is FERC changing its review process for pipelines and other projects. The review process will now include a project’s effects on climate change, landowners, environmental justice communities, and the economy.

A California utility is building a pipeline, but for hydrogen. Since it won’t cross state lines it won’t have to go through FERC, so we won’t see a fight there. It’s hard to imagine that there would be fight there anyways, though, since hydrogen is the latest environmentalist “savior energy”. (Natural gas was a “savior energy” not terribly long ago.) This thing won’t see any opposition, even though it’s going to cross high desert mountains, a far more environmentally sensitive area than the Appalachians.

West Virginia’s new-ish Public Energy Authority had its first meeting. It will be interesting to watch the progress of the committee, and we hope it will make decisions that will benefit natural gas development.

Jim Justice met with other West Virginia politicians to discuss the hydrogen hub plan, and he pushed for energy independence.

Russia invaded Ukraine and all of a sudden Germany is re-thinking its energy policies which previously were very reliant on Russian natural gas. One part of that is to build two new LNG terminals, which will very likely be supplied by the US.

EQT is investing in fuel cells.

IEA members agreed to release 60 million barrels of oil in response to skyrocketing oil prices.

Senator Joe Manchin is stepping into the ring with FERC over the MVP. This could get interesting.

Hacking of oil and gas companies, including EQT, increased in the days prior to the Ukraine invasion, and Russia was responsible for at least some of it.

The Biden administration seems to be coming around to the idea that the U.S. needs to produce more natural gas and oil.

The Biden administration had banned imports of oil, natural gas, and coal from Russia. While this is a good step, we don’t import much of Russia’s output. The rest goes to Europe and some other buyers. Europe needs to get on board, too.

It looks like forced pooling is going to be a real thing in West Virginia now. The House passed a bill that the Senate already passed, with some changes. The Senate approved the changes, and the bill is on to the Governor, who will likely sign it into law. This is disappointing.

HG Energy is for sale. Anybody have a spare $3 billion lying around?

EQT has made a plan to “unleash natural gas“. Some of the numbers are pretty interesting, but the plan relies on a new 6,500 miles of pipelines, which are hard to get through the FERC approval process right now. I’ll be interested to see how he plans to change FERC’s approval process.

West Virginia Senator Joe Manchin is now suggesting that the President use the Defense Production Act to allow the Mountain Valley Pipeline to get built. He’s also suggesting he might use legislation to get it built. He really wants this thing built.

Natural gas prices are at $4.37/MMBtu, with a high of $6.27 when it was really cold, and a low of $3.80 before it got really cold. There are 635 drilling rigs, up from 601. That’s a pretty big increase compared to what we’ve seen previously, but not absolutely crazy. We’re still hoping investors will keep the industry from going crazy with drilling. Opening things up just a little bit right now wouldn’t be a bad thing, though. Storage levels are a bit below average, at 2,101 billion cubic feet. It’s not hard for the industry to bring production back up, so being a bit below average isn’t seriously affecting prices.

West Virginia has chosen to no longer use BlackRock investment Fund for banking purposes. This is in response to BlackRock urging companies to embrace investment strategies that would be detrimental to coal, oil, and natural gas development. This sounds like a bit of drama that could drag out for a while.

Natural gas production from the Marcellus region has fallen off and prices have, of course, risen. It’s likely a temporary thing, though.

A ban on exporting natural gas has been discussed in Washington DC in the past, and a few politicians are talking about one, but it is not seriously being considered.

Schlumberger provides services to producers. In fact, there’s not a bigger services provider. Schlumberger’s earnings announcement includes their expectations for 2022, and they expect to be providing more services to the industry.

The EIA is predicting growth in 2022 and 2023.

Shelly Moore Capito is suggesting that the Build Back Better bill is not dead, and that it includes money for a hydrogen/ethane storage hub that has been proposed for the Marcellus/Utica area.

Good news. Bad news. Good news. Bad news. The Mountain Valley Pipeline has lost its permit to cross the Jefferson National Forest. What’s next? Good or bad? Your guess is as good as mine.

This Forbes article suggests it’s time for investors to open up their wallets with respect to oil and gas producers. I’m not of that opinion myself, as producers will overspend any chance they get. Of course, a little more production would be a good thing. Slow growth is good.

The price of natural gas spiked on day last week, but it was due to a short squeeze, not supply/demand fundamentals. Well, it was supply/demand, but not the supply of natural gas. It was the supply of trading contracts that was in play.

The United States is the world’s leader in natural gas exporting.

Oilfield services companies are predicting increased drilling this year, and have already scheduled up their completion crews for the year.

West Virginia could receive as much as $141 million in federal grant money to plug orphaned wells. The article notes that there are over 4600 eligible wells in West Virginia, but the actual number of abandoned/orphaned wells in West Virginia is much higher than that.

OPEC+ agreed to increase oil production by another 400,000 barrels per day in March, but the price of oil didn’t really move.

A number of large companies have signed on to work on a carbon capture and hydrogen storage hub in Ohio, PA, and WV. This is a very long term project, but worth keeping an eye on.

The legislature seems to be giving the State Tax Department a do-over on that tax assessment rule the Department botched last year. Let’s see if the Legislature does a better job of directing the Department on what do do this time.

Investors are still pushing oil and gas companies to make profits, not drill. Interestingly, not drilling seems to be making profits. It’s taken an outside influence to force oil and gas companies to do what they should have done all along.

Dominion is selling Hope Natural Gas, a West Virginia natural gas utility, to a company called Ullico. Presumably everything will stay the same except the owner.

Natural gas prices are at $4.26/MMBtu, having hit a low of $3.56 on December 30, and a high of $4.86 on January 12. Rig counts are at 601, up 25. Gas storage numbers are down, and right at the five year average. With some cold weather coming up, gas prices will probably go up a bit.

Landowners challenging the Mountain Valley Pipeline’s use of eminent domain are arguing that the “non-delegation doctrine” should be applied here. If that happened here, the precedent would affect the way other Federal agencies operate, possibly making it so that our country would have far fewer regulations, but possibly giving us far more laws. I doubt this challenge will succeed, but it would be absolutely fascinating to watch the fallout if it did. It would be one of the most important cases of our lifetime.

LNG exports continue to pick up, hitting a record of 13 billion cubic feet per day. At least some of that gas comes from the Marcellus shale and West Virginia.

The Mountain Valley Pipeline has received approval from West Virginia to proceed with construction across streams and wetlands. This will probably be the last legal challenge that MVP will face in West Virginia, but who knows? Environmentalists have proven tenacious, to say the least. MVP currently expects to be in operation by this summer (2022).

RBNEnergy reviewed their predictions for 2021, and made new predictions for 2022. This always makes for good reading.

There was an explosion and fire at a compressor station in Pennsylvania. Nobody was hurt, and only a little grass was burned. As far as natural gas accidents go, this was a tame one.

The increased buildout of liquefaction plants has increased the amount of LNGs we can export. Consequently, the domestic price of natural gas is becoming more and more tied to the price of natural gas in foreign markets. Foreign markets are more volatile than ours, so we can expect that our prices are going to become more volatile as well.

Here’s a Forbes article about why we aren’t going to have all-renewable energy in the very near future.

And just like that, West Virginia’s decision to approve MVP’s permit has been challenged.

About 65% of oil and gas executives surveyed believe that natural gas prices will average somewhere between $3.50/MMBtu and $4.50/MMBtu over the 2022 calendar year.

Libya had scheduled elections, but they were canceled and there’s no certainty as to when they will happen. The threat of civil war is looming again, and as a consequence, oil production is down again.

OPEC+ has agreed to increase crude oil output by 400,000 barrels per day starting in February.

The West Virginia DEP has issued a construction permit for a natural gas fired power plant. It will be an expansion of an existing coal fired power plant just north of Morgantown, West Virginia. This is the kind of thing we need in West Virginia. Pervious efforts to build natural gas fired power plants have been slow to develop, even being opposed by Jim Justice, our current governor and coal company operator. West Virginia needs to add value to the natural gas produced here instead of shipping it elsewhere to be turned into energy or other industrial uses.

EOG Resources, one of the big oil producers, has said it could move back into growth mode, depending on macro-economic factors. It will be interesting to see whether other producers follow suit.

The discussion about West Virginia’s new tax rule for valuing oil and gas production is providing us more detail about what’s wrong with the new rule. Apparently there’s a “reasonableness” standard involved, and the legislature never intended for there to be a reasonableness standard. That’s awkward.

An article at NGI describes ongoing projects and challenges in the Marcellus/Utica region. It’s a pretty good overview of big picture items.

Libyan oil output is rebounding.

One West Virginia legislator is pushing for oil and gas companies to automatically deduct income taxes from royalty owners’ checks. She thinks that out-of-state owners are not paying West Virginia income taxes. She’s probably right.

By the way, the West Virginia legislature is in session, and we’ll keep an eye out for other stories that may impact West Virginia mineral and royalty owners.

Natural gas prices are at $3.88/MMBtu, having hit a low of $3.66 on December 6, and a high of $5.45 on November 26. Rig counts are at 576, up 13. Slow and steady is great! Gas storage numbers are from December 3, but seem to be trending toward the five year average. With some warm weather in the near-term forecast, we could see gas prices drop closer to $3.00 in the next week or so.

A lot of people that I talk with wonder whether oil and gas are going to be needed in the future, and based off what you see in the news and on social media you can be forgiven for thinking that they won’t be. However, the more rational number crunchers at the United States Energy Information Agency (a government agency, not some oddly named private organization) show that in 30 years the amount of energy provided by solar generation will only make up 20% of our energy needs. If you take a close look at that graph, you will notice that the total amount of energy produced by other sources (including wind) will be greater than the total amount we use today. So while solar generation will grow, it’s not going to actually cut in to oil and gas. Combined with wind it probably will, but not enough to make oil and gas properties obsolete. Don’t sell your oil and gas mineral rights just because you think renewables are going to take over energy production.

A Reuters article stating that drilling activity will have to pick up next year.

President Biden is putting pressure on OPEC+ to increase oil production. He should be putting that pressure on American producers. However, he’s trying to look like a good environmentalist at home, and after his federal land development ban back in the first part of this year he needs to not flip-flop, so he’s not. Seems a little short-sighted to me. Additional drilling here in America would put Americans to work and reduce the cost of gasoline and electricity. There are a lot of wins there.

West Virginia’s legislature really messed things up when they changed the law on how to value natural gas production for taxation purposes. There’s some talk of throwing the law out completely and starting over from scratch.

COVID was the driving factor in last year’s ridiculously low natural gas prices. We haven’t had to mention COVID for a few months, but there’s a new variant emerging in South Africa that has the stock market spooked, and that’s usually a sign that it’s serious. So keep an eye on the Omicron variant of COVID. UPDATE on Dec. 15: Omicron has emerged as a well publicized concern, but it’s full effects are not yet known.

The Biden administration has ordered the release of oil from the Strategic Oil Reserve. This will drive down the price of gasoline, at least temporarily. Drilling is the only thing that will drive the price down long term. UPDATE on Dec 14: The release was supposed to be coordinated with releases by other countries, which have not complied so far.

There is an interesting court case ongoing in Ohio. It pits a farm that is owned by an agricultural easement against a pipeline company. The pipeline is trying to use eminent domain to force a right of way onto the farm. The farm is arguing that the agricultural easement protects it from all uses other than agricultural. Interestingly, a nearby city tried to use the farm for a sewer pipeline at one point, and was denied. Also interestingly, the State of Ohio Department of Agriculture actually owns the agricultural easement, but is not helping to defend this suit in spite of the fact that it has defended other agricultural easements. There are other agricultural easements in Ohio, and their “owners” are watching.

Here’s an article that makes the argument for why a release of oil from the Strategic Petroleum Reserve is not going to drive gasoline prices down.

Producers have been using up their Drilled but UnCompleted (DUC) wells, but the supply is dwindling and at some point producers have to lean more toward drilling new wells. When that happens, profits will drop. How that plays out will be interesting to watch.

Crude oil drops below $65/bbl, but it’s not likely to last. Take predictions with the usual grain of salt.

The State of West Virginia ran a budget surplus last month, in large part because of high oil and gas prices. Now remember, State-officials-in-charge-of-spending, that we have lean times coming up. Put that money into a rainy day fund, because if there’s one thing we know it’s that oil and gas prices go down after they go up.

We’re exporting more gas, with deliveries to LNG facilities hitting a record high in November.

RBNEnergy explains that we are running out of pipeline capacity in the Appalachian region (West Virginia, Ohio, and PA) even if the Mountain Valley Pipeline gets built. MVP will make a difference, but only for a short period of time. Trouble is, I don’t see new pipelines getting built after ACP got the ax. The same problems that plagued it and still plague MVP will be problems for every other pipeline project. That’s going to lead to reduced royalty payments for West Virginia mineral owners, and higher natural gas prices for everybody.

Wegmans is shifting its trucking fleet from diesel to compressed natural gas.