MARCELLUS/UTICA REGION: New York is in bad economic shape – fracking could change that if Cuomo would allow it; NATIONAL: Tight oil development will continue to drive future U.S. crude oil production; US natural gas in storage falls 36 Bcf as heating season likely wraps up; New reports offer solutions to protect against “recent surge” of climate liability lawsuits; INTERNATIONAL: Denmark wants a new route for Nord Stream 2 gas pipeline.
MARCELLUS/UTICA REGION
New York is in bad economic shape – fracking could change that if Cuomo would allow it
Fox News
Despite national economic success, including historically low unemployment, rising wages, and record numbers of people in the workforce, New York state remains stagnant. Democratic Governor Andrew Cuomo wrongly blames “the federal government” for these ills. In his inaugural address he blasted the discontinuation of state and local tax (SALT) deductions on his heavily taxed constituents as the culprit of a $2 billion shortfall in revenue to Albany. This is a lazy way of deflecting blame, and Cuomo didn’t help himself by going to the White House, hat in hand, seeking a reversal of the SALT deductions. No doubt the SALT provisions hurt, but Cuomo ignores the reality that high taxes and an unfriendly business climate are behind the mass exodus of people from his state. Last year, 190,000 New Yorkers fled to other states. Since 2010, a net one million New Yorkers have left. Once-booming Upstate cities like Buffalo, Rochester and Binghamton lead the state’s population loss. Rural areas are not faring any better. And New York is poised to lose multiple Congressional seats in the coming redistricting. The state’s influence on the federal government is waning. Cuomo’s reaction to this news has been downright insulting. Instead of taking responsibility, Cuomo blamed it on the weather last year, saying people are leaving for “climate-based” reasons. The 38,903 new citizens of Massachusetts didn’t seem to mind the cold. Neighboring Vermont saw the highest percentage of inbound moves of any state in 2018, despite its chilly winters. Gov. Cuomo favors New York City over the rest of the state. He lobbied heavily for Amazon to bring its 25,000 jobs and billions in investments to Queens, not Syracuse. In fact, 79 percent of New York’s private sector jobs were created near New York City. Upstate job growth was a “paltry” .03 percent since 2016, according to the Federal Reserve Bank of New York. It is truly “a tale of two New Yorks,” as some are labeling it. Upstate New Yorkers are familiar with Cuomo’s inept economic development schemes and focus on New York City, but there’s more to this story. Upstate New York is blessed with plentiful shale reserves. Safe, proven techniques can extract these reserves and create jobs for economically depressed areas of New York. Those who live along the Pennsylvania border have seen their neighbor’s economic growth: land is more valuable, there are jobs and business opportunities, and utilities are half the cost. But Cuomo ignored the potential for new jobs and banned hydraulic fracking in 2014. He fully-embraced the environmentalist agenda and last month pledged “100 percent” carbon-free energy by 2040, despite similar policies doubling monthly electric bills in other states. [MDN: Cuomo has been a complete disaster for NY state. It’s sad and it’s tragic. And it’s angering. Cuomo, together with willing accomplices in the state legislature, has turned MDN’s beloved home state into a dung heap. The exodus out of the state has turned into a stampede, showing no signs of lessening.]
NATIONAL
Tight oil development will continue to drive future U.S. crude oil production
U.S. Energy Information Administration – Today in Energy
EIA’s Annual Energy Outlook 2019 (AEO2019) Reference case projects that U.S. tight oil production, which became the more common form of oil production in 2015, will continue to increase through 2030, ultimately reaching more than 10 million barrels per day (b/d) in the early 2030s. Tight oil production reached 6.5 million b/d in the United States in 2018, accounting for 61% of total U.S. production. EIA projects further U.S. tight oil production growth as the industry continues to improve drilling efficiencies and reduce costs, which makes developing tight oil resources less sensitive to oil prices than in the past. Recent growth in U.S. crude oil production has been driven by the development of tight oil resources, primarily in the Permian Basin in western Texas and eastern New Mexico. Three major tight oil plays in the Permian Basin—the Spraberry, Bone Spring, and Wolfcamp—accounted for 41% of U.S. tight oil production in 2018. In the AEO2019 Reference case, approximately half of cumulative tight oil production through 2050 is expected to come from these three plays. The Bakken and Eagle Ford plays also remain major contributors to U.S. tight oil supply through 2050, accounting for 19% and 17% of cumulative tight oil production, respectively. [MDN: Translation…shale oil will continue to be THE main driver of oil production growth here in the U.S. for at least the next 10 years, likely longer. Thank you fracking and shale!]
US natural gas in storage falls 36 Bcf as heating season likely wraps up
S&P Global Platts
The heating season ended with a whimper as US gas in storage likely posted its final net withdrawal of the season last week due to dwindling demand, but multiple regions have a lot of work to do to approach five-year average levels in time for the next one. US natural gas in storage decreased 36 Bcf to 1.107 Tcf for the week ended March 29, the US Energy Information Administration reported Thursday. The withdrawal was slightly more than an S&P Global Platts’ survey of analysts calling for a 33 Bcf pull. However, the withdrawal was less than the 66 Bcf pull reported during the corresponding week in 2018 as well as the five-year average draw of 41 Bcf, according to EIA data. As a result, stocks were 285 Bcf, or 20.5%, less than the year-ago level of 1.392 Tcf and 551 Bcf, or 33.2%, less than the five-year average of 1.658 Tcf. NYMEX Henry Hub May contract was static at $2.72/MMBtu following the announcement on its first day as the prompt month, as the draw was in line with market expectations. However, the summer strip, running from May through October, was down half a cent to $2.80/MMBtu. [MDN: As we’ve pointed out and will keep pointing out, high natgas production is, itself, a form of “storage”–hence low storage numbers do not result in price spikes the way they used to.]
New reports offer solutions to protect against “recent surge” of climate liability lawsuits
Energy in Depth
The U.S. Chamber’s Institute for Legal Reform (ILR) recently released two reports examining the impacts of climate liability lawsuits in the United States. Waking the Litigation Monster focuses on the misuse of public nuisance action, while Mitigating Municipality Litigation examines the growing trend of municipalities engaging in costly lawsuits against different industries. The reports detail the ramifications of such litigation and offers potential solutions to mitigate such efforts in the future. The ILR reports demonstrate how these litigation efforts are being promoted by lawyers and politicians who are often more motivated by money and politics than the public interest. For example, the use of a contingency fee model – in which a lawyer’s pay-out is an agreed upon percentage of the settlement awarded– for legal counsel in large class-action lawsuits has led to plaintiffs’ lawyers to increasingly seek out politicians to undertake costly litigation against companies on issues such as climate change. [MDN: One thing is for sure…we cannot allow radical environmentalists who are ABUSING our system of laws and justice to continue doing it. We must fix the system, before it’s too late. This post outlines some of the fixes we need to make.]
INTERNATIONAL
Denmark wants a new route for Nord Stream 2 gas pipeline
Bloomberg
A controversial natural gas pipeline from Russia to Germany may be delayed after Denmark asked the company behind the link to investigate an alternative route. Denmark’s Energy Agency, which is carrying out an assessment on how the new gas link would affect the environment in its exclusive economic zone of the Baltic Sea, asked the pipeline’s promoters to study a different route. It has not rejected either of the two pending permit applications, Nord Stream 2 said on Wednesday. The move extends uncertainty about what European Union authorities might do to block the pipeline, which Nord Stream 2 says is on track to start working at the end of this year. The link has divided EU governments, with nations led by Poland concerned about the bloc’s increasing dependence on Russian gas and President Vladimir Putin’s meddling in Ukraine. The new link would allow gas to bypass Ukraine in flowing to Europe. “The DEA has requested Nord Stream 2 to include a route option in the Danish exclusive economic zone to the south of Bornholm into the environmental assessment,” Nord Stream 2 said in an e-mailed statement. “Nord Stream 2 will now carefully evaluate the request from the DEA and then decide what steps should be taken next.” Trump has criticized the link and called on Europe to buy alternatives to Russian gas, especially liquefied natural gas from the U.S. Nord Stream 2 argues a new pipeline is needed to guarantee supplies will continue to flow in the coming decades as EU import needs rise. Opponents of the project say it hurts the bloc’s cohesion and weakens the bloc’s Energy Union strategy aimed at integrating the region’s gas and power markets, diversifying energy supplies and improving security. [MDN: When we look at the map of where Nord Stream 1 & 2 go, it doesn’t appear to us it’s anywhere close to Denmark. The big news here is that the EU is not necessarily in unison on this project, providing a glimmer of hope that maybe it won’t happen.]
This post appeared first on Marcellus Drilling News.