Natural Gas Prices Force Down Marcellus Rigs
As natural gas prices drop this year, the Marcellus Shale region in Pennsylvania slows substantially. The number of rigs operating in the state is down 29 percent from its peak a year prior, according to Baker Hughes Inc., a tracker of the industry.
The slowdown is no surprise seeing as many exploration companies have been planning on shifting drilling equipment to areas where the oil and natural gas is more profitable. The warm winter, further depressing demand and prices, had an influence as well.
In the northern area of the state, where the most intensive drilling activity has taken place over the last few years, is particularly slowing down.
"You can clearly see there's a leveling off in traffic, both physical truck traffic and business development," Thomas B. Murphy, codirector of the Penn State Marcellus Center for Outreach and Research, told the Inquirer.
That doesn't mean the boom is over, however.
"We're really talking about a long-term play," Kathryn Z. Klaber, president of the Marcellus Shale Coalition, the industry trade group, told the Inquirer. "This relatively short-term drop in price does not change the overall viability and attractiveness of a play like the Marcellus."
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For now, the market is oversupplied. Should commodity prices rise again, drilling activity will likely increase in order to chase higher profits. For many, continuing to operate under current conditions won't produce a profit. Some, however, remain in order to secure expiring leases for mineral rights, while others are stuck drilling unprofitable new wells under the terms of deals struck with foreign investors.
In the Marcellus region, so many wells have been drilled that are not yet in production that it will take some time for the market to catch up. Over half of the more than 5,000 wells drilled in the area are still waiting on completion or on construction of pipelines to carry away production.
Once prices are better, those wells will be able to come back into production quickly.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.