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California Rains on Gas Drillers

ENLARGE Rain is forecast for drought-stricken California this week. That will help fill the West’s hydropower reservoirs and weigh on natural-gas prices. Photo: Associated Press Shivering New Yorkers will no doubt be pleased to hear that San Francisco, after its driest January on record, is due a spot of rain this week. One group that won’t be happy: natural-gas producers. A year ago, the combination of a frozen New York and a parched Bay Area was a boon to struggling gas drillers. When the West’s hydropower reservoirs are depleted, the region burns more gas to keep the lights on. If Northeasterners are simultaneously firing up the heating (and their own power stations) to fend off the cold, this boosts gas demand. Throw in the bottlenecks created by kinks in the country’s pipeline network, and you end up with regional price spikes. On some days in January 2014, gas delivered […]

Posted On : Published By : Tom Whipple
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Pennsylvania reinstates drilling moratorium

Pennsylvania Gov. Tom Wolf reinstates moratorium on oil and gas leases in state land. (Photo: Commonwealth of Pennsylvania) Louis D’Amico, president and executive director of the Pennsylvania Independent Oil & Gas Association, said the moratorium struck a blow against an industry that’s already returned more than $700 million in revenue to the state in the last seven years. "This is a lose-lose for Pennsylvania’s taxpayers and energy consumers," he said in a statement Thursday. His comments follow a decision from state Gov. Tom Wolf to reinstate a moratorium on oil and gas leases in state parks and forests. A ban was enacted in 2010 by Gov. Ed Rendell , but modified last year by Gov. Tom Corbett to allow drillers to explore for oil or gas so long as it didn’t interfere with land integrity. Wolf said the decision was about striking a balance to economic vitality and preservation. […]

Posted On : Published By : Tom Whipple
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Pennsylvania Governor Bars New Oil and Gas Drilling in State Parks, Forests

By Kris Maher The natural gas industry sharply criticized Pennsylvania Gov. Tom Wolf’s decision Thursday to reinstate a moratorium on future drilling in state parks and forests, which includes cases where private landowners own the mineral rights beneath parks. Mr. Wolf, a Democrat who took office two weeks ago, signed an executive order barring new leases for oil and gas development on those public lands. Unlike with state forests, Pennsylvania doesn’t own the mineral rights for the vast majority of land beneath state parks. At a public signing, Mr. Wolf noted that the parks in the state are visited by 38 million people annually, support more than 13,000 jobs and bring in $1.2 billion to the state’s economy. "Natural gas development is vital to Pennsylvania’s economy, but so is the economic and environmental viability of our parks and forests," Mr. Wolf said. Dave Spigelmyer, head of the Marcellus Shale […]

Posted On : Published By : Tom Whipple
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Texas RRC oil and Gas Production Data

The Texas Railroad Comission  has released their oil and gas production data for November. As most of you know, the Texas RRC data is always incomplete. Some data is updated immediately but the rest trickles in slowly, sometimes taking many months to years to complete. Nevertheless we can glean some indication of what is happening from what data is reported. That is, if production is increasing, then the incomplete month to month data should be increasing. And it is, but very slowly. The last data point in all charts below is November 2014 and the oil is in barrels per day. Texas crude only is still increasing but the increase rate seems to be slowing down. Texas RRC Condensate It is rather hard to tell what condensate is doing but the rate if increase, if any, seems to be slowing. Texas RRC C+C Combining the two we see a […]

Posted On : Published By : Tom Whipple
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Natural gas to unseat coal as generation king by 2035

Natural gas to unseat coal as generation king by 2035 thumbnail Information Administration predicts that natural gas will dethrone King Coal by 2035, and a number of market forces are at work that may assure that ascension. Coal through the first three quarters of 2014 provided roughly 51 percent of the nation’s electricity, and Wyoming supplies about 40 percent of that coal. Comparatively, natural gas through the period fueled about 20 percent of utility generation. In other words, the transition hasn’t happened just yet. However, 45 gigawatts of coal-fired capacity is set to retire in the next two years, and most of it will likely be replaced by natural gas generation. In Wyoming, the 132-megawatt Cheyenne Prairie Generating Station recently went online, replacing 82 megawatts of “older, coal-fired generation that cannot be economically retrofitted to meet new EPA air emissions regulations and must be retired,” according to a company […]

Posted On : Published By : Tom Whipple
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Shale Gas Lobby Backfires in Pennsylvania

Sign image via weaverphoto/flickr. Creative Commons license. 2.0. This past November, Gov. Tom Corbett became the first standing governor in the last 40 years in Pennsylvania to lose a second term reelection. As the GOP scored overwhelming victories nationally that November night, incumbent Gov. Corbett lost by more than 325,000 votes to Democrat Tom Wolf. Corbett was a powerful first term governor who oversaw the huge shale gas industry drilling boom in the Pennsylvania Marcellus Shale formation which vaulted the state into the middle of a unexpected U.S. energy boom. By the time Corbett took office for his first term, Pennsylvania’s shale gas industry was creating jobs in several of the depressed regions of the state and had created an opportunity for a tax revenue base which would have been the envy of virtually all mid-Atlantic and northeast region states. Yet these facts did not translate into success for […]

Posted On : Published By : Tom Whipple
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US EIA sets 2016 natural gas price forecast at $3.86/MMBtu

Washington (Platts)–13Jan2015/428 pm EST/2128 GMT Spot natural gas prices at the benchmark Henry Hub in Louisiana are expected to average $3.86/MMBtu in 2016, the US Energy Information Administration said Tuesday in its first forecast for that time frame. The January Short-Term Energy Outlook also cut the agency’s 2015 natural gas price call to $3.44/MMBtu, which is 39 cents below last month’s forecast. In comparison, Henry Hub spot prices averaged $4.39/MMBtu in 2014, the agency said. In its outlook, EIA cut the price estimate for first-quarter of 2015 by 72 cents to $3.23/MMBtu, and it reduced its Q2 outlook by 33 cents to $3.30/MMBtu. The drop in near-term prices comes from a warm December, EIA Deputy Administrator Howard Gruenspecht said Tuesday on a conference call. Production also is playing a role, according to the outlook. "EIA expects the Henry Hub natural gas spot price to average $3.52/MMBtu this winter compared […]

Posted On : Published By : Tom Whipple
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Power generation to be biggest demand driver for natural gas: API

Houston (Platts)–8Jan2015/245 pm EST/1945 GMT A continued increase in demand for natural gas for use in power generation is expected to be the biggest driver for US gas demand in the coming year, the chief economist of the American Petroleum Institute said. "The biggest trend is probably what we’ve seen in previous years and that’s more natural gas in power generation, as we see more coal plants shut down, primarily for environmental regulations," John Felmy said in an interview Wednesday. "You may see some increases in industry use as the economy improves and perhaps some commercial [demand], but I think electric power is going to be the biggest growth." According to the "The State of American Energy Report 2015," API’s annual outlook on US energy trends for the new year released earlier this week, "The United States has vaulted past Russia to become the world’s largest natural gas producer […]

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New Research Links Scores of Earthquakes to Fracking Wells Near a Fault in Ohio

Not long after two mild earthquakes jolted the normally steady terrain outside Youngstown, Ohio, last March, geologists quickly decided that hydraulic fracturing operations at new oil-and-gas wells in the area had set off the tremors. Now a detailed study has concluded that the earthquakes were not isolated events, but merely the largest of scores of quakes that rattled the area around the wells for more than a week. The study, published this week in The Bulletin of the Seismological Society of America, indicates that hydraulic fracturing, commonly called fracking, built up subterranean pressures that repeatedly caused slippage in an existing fault as close as a half-mile beneath the wells. The number and intensity of fracking-related quakes have risen as the practice has boomed. In Oklahoma, for example, quakes have increased sharply in recent years, including the state’s largest ever, a magnitude 5.7 tremor, in 2011. Both state and federal […]

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Sharp declines in well production typical in Ohio’s Utica Shale

In the world of shale gas in Ohio, the top-producing wells aren’t king of the hill for long. Take the Tippens 6HS well, for example. Located in Monroe County in southeastern Ohio, it produced more natural gas in the first quarter of 2014 than any other Utica Shale well in the state — some 1.117 billion cubic feet of the resource in 80 days, according to Ohio Department of Natural Resources records. That’s enough natural gas to fuel 12,000 houses for a year. But the well that gushed 13,972 thousand cubic feet of natural gas per day in the first three months of 2014 saw daily production drop 41 percent in the second quarter to 8,180 thousand cubic feet per day and another 26 percent in the third quarter to 6,015 thousand cubic feet per day. By autumn, the Tippens well was producing less than half the natural gas […]

Posted On : Published By : Tom Whipple