Tom Shepstone
Shepstone Management Company, Inc.
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Readers pass along a lot of stuff every week about natural gas, fractivist antics, emissions, renewables, and other news relating to energy. As usual, emphasis is added.
Will Southeast PA Get Its Comeuppance?
Southeast Pennsylvania might as well be another country as far as the rest of the Keystone State is concerned, especially in its attitude on gas, but Dan Markind says that may have to change:
Votes on natural gas matters, from taxes to regulations, generally have broken along party lines. With most of the Democratic votes coming from the cities and in the heavily populated southeast – where there currently is no shale industry – that part of the state has been generally unwelcoming to energy interests. However, for the most part, the rest of the state has been more supportive of the industry.
Now it is the southeast, and especially Philadelphia, that will be begging for revenue and aid. But the region will find little support from much of the rest of the state which, except for Pittsburgh in the southwest, is heavily rural and decidedly Republican. Southeastern Democratic votes have spearheaded drives for more taxes on the gas industry and more regulation, including a prohibition on drilling in the Delaware River Basin which constitutes the state’s eastern border with New York and New Jersey. These restrictions on the gas industry have generally not gone over well in other areas of the state more sympathetic to the industry.
To get anything from the rest of Pennsylvania, the Democrats in the southeast will likely be asked to give on much of the industry regulation and many of the prohibitions in certain areas, like pipeline permitting. While it will be necessary to maintain the environmental balance enshrined in the Pennsylvania Constitution, much other regulation will be vulnerable. This is not entirely a bad thing, as the Wolf Administration often has engaged in regulatory practices that seem designed more to hinder gas development than regulate it.
Hmm…
Paris Accord? What Paris Accord?
Whatever happened to the Paris accords?
“The Paris agreement signals that deniers have lost the climate wars,” read the Guardian headline on December 14, 2015. The subtitle to Dana Nuccitelli’s piece: “195 world nations have agreed to ignore climate science denial and cut carbon pollution as much as possible.”
This, in fact, was the same hyperbole following the Kyoto Protocol more than two decades before. “We’ve bet on the future, while others have bet on the past,” proclaimed Enron lobbyist John Palmisano from Kyoto, Japan in late 1997…
Fast forward to today. Virtually all countries have chosen business-as-usual energy policy in place of the voluntary, aspirational goals of the Paris Climate Accord. Of the 189 signatories to the Accord, 181 countries have not updated their Nationally Determined Contributions (NDC) targets to indicate decarbonization “progress.” For the Climate Action Tracker, the nation-by-nation analysis (updated May 20, 2020) is quite grim with “critically insufficient,” “highly insufficient,” and “insufficient” predominating over “2C compatible,” “1.5C Paris Agreement Compatible,” and “Role Model.”
…Russia, Japan, Indonesia, Singapore, Australia, the U.S.–it is a big show of sovereignty and self-interest.
The COP25 United Nations climate conference last year in Madrid, Spain was recognized by friend and foe as an empty vessel for the ephemeral goal of “climate progress.”
…Hyperbole toward the Paris Climate Accord, joining that of the Kyoto Protocol, is over. Dense, mineral energies are the wave of the future, while dilute, intermittent, earth-defacing renewables are in trouble. Dana Nuccitelli–are you listening?
Perhaps those pushing the Paris Accords will now consider the U.S. approach, which is resulting in real CO2 reductions far surpassing anything achieved by the blathering socialists trying to use the accords to rob the United States? Don’t count on it.
There Is A Future for Marcellus and Utica Shale!
Some upbeat news for the Appalachian Basin:
While the economic crisis and a crash in demand for natural gas hit the local natural gas industry hard, it also unsettled markets in a way that could be beneficial long term for Marcellus and Utica natural gas producers. Already local publicly traded companies have seen their stock prices increase since the beginning of the year and, more importantly, seen indications of higher gas pricing later this year and into 2021.
It’s not a cure for what’s happening in the industry, where prices and activity are still low. There’s likely to be a lot of pain ahead, as [CNX executive Nick] DeIuliis well knows.
“In the short term, you really have a perfect storm in the energy sector,” he said. “You’ve got the virus shutting down economic activity, which is hurting demand and hurting pricing for oil and natural gas. You have balance sheets in the energy space that are, on average, looking stressed to begin with going into this stage, and then, you’ve got a lot of entities in the oil and natural gas space that are not hedged on the revenue side, so they’re exposed to these short-term gyrations.”
But when the storm that is blowing through the Appalachian natural gas industry passes, he believes the survivors will be in a better place than they were a few years ago.
“I think long-term, it spells good, it spells positive,” DeIuliis said. “But what the timing of that is, and the levels, that’s all to be determined.”
Natural gas is simply a commodity business and DeIuliis is correct. The solution to low prices is low prices.
This post appeared first on Natural Gas Now.