The Marcellus Shale| December 2020
The Marcellus Shale is the largest gas play onshore in the US. Located in the Northeast, it supplies the high demand markets along the East Coast. Most of the basin’s gas is produced through unconventional methods, while the little oil produced is mostly by conventional means. Some of the top formations include Onondaga and the Huntersville.
State Drilling Statistics (End of December)
Active Drilling Rigs in Basin- 26
Total Rigs in Pennsylvania- 19
Total Rigs in United States- 351
Total U.S. Rigs down 56% YTD
Marcellus Top Producers
Top Gas Producer- Cabot Oil & Corp.
Top Condensate Producer- Range Resources Appalachia LLC
Lots of Gas and No Way to Move it
Although Pennsylvania is chock full of natural gas produced from the nearby Marcellus, it struggles to quickly deliver it to local markets. December kicked off some heavy winter weather for the New England region, and while states like Massachusetts may be doing okay now, drastic weather changes could leave entire cities without heating. This was observed in the winter of 2017-2018 where two feet of snow was dumped and not enough natural gas was stored nearby or available to move at such a high demand. This resulted in a Russian tanker offloading Russian LNG in Boston just to meet the region’s energy demand, even though nearby oil producing states were absolutely swimming in the stuff. The biggest problem lies in insufficient pipeline infrastructure and local storage. Although there was a ripe opportunity to build a pipeline after this incident, Oklahoma based Williams Companies Inc. pulled the plug on a new pipeline saying it would be easier to upgrade existing pipelines than deal with regulatory framework that could leave the entire project dead in the water. While December introduced a manageable winter into the Northeast, there is still great potential for polar vortexes in 2021.
West Virginia Combines O&G Advocacy Groups
West Virginia is often overlooked as a natural gas producer in the grand scope of the United States, but it is not to be ignored. The previously known West Virginia Oil and Natural Gas Associate and Independent Oil and Gas Association of West Virginia have decided that their goals of promoting the industry and downstream companies ran in parallel. In December they came together under the name of Gas and Oil Association of West Virginia, or GO-WV for short. The group will spend the next several months working on the consolidation of the two groups and identifying issues to be addressed through legislative means in 2021.
Pennsylvania Not Fully Convinced of TCI
The Transportation and Climate Initiative, or TCI, is an initiative that aims to require hundreds of fuel distributors in participating states to buy permits for the carbon dioxide emitted from the combustion of the fuels that they sell. The number of permits will decline as time progresses with an overall goal of reducing tailpipe emissions as much as 25 percent. The initiative was pitched to Northeastern and Mid-Atlantic states, and the initial deadline was for the end of December. While almost every state expressed interest, only a few opted in, of which Pennsylvania was not one. In Pennsylvania, transportation emissions only run third to electricity generation and manufacturing. Governor Wolf expressed that he favored the plan, but did not favor the likely gas price increase that would accompany joining the initiative. Even though Pennsylvania may not be involved in the TCI, Wolf has still made climate change a high priority for the state and set goals to comply with the 2015 UN Paris Agreement, which the United States are not observing on a federal level.
Top Gas Producers (2020 cum)
Top Condensate Producers (2020 cum)
Top Oil Producers (2020 cum)
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