Accurate

A report by an economics professor at Ohio State University says shale gas development in eastern Ohio will generate jobs, but only a fraction of the total projected by the industry.

Wednesday’s minimal gains proved to be an accurate harbinger of a three-day market rally coming to an end. A flat Westcoast Station 2 was the sole exception to falling quotes at all other locations Thursday as the previous day’s 12.7-cent drop by prompt-month futures joined generally pleasant early-fall weather in applying downward pressure to physical gas numbers.

Estimates now used by the Environmental Protection Agency (EPA) and independent researchers to determine greenhouse gas (GHG) emissions from upstream shale gas production likely are “significantly overstated” because they are based on assumptions that don’t reflect current industry practices, according to IHS Cambridge Energy Research Associates (IHS CERA).

The day before the Pittsburgh City Council voted to prohibit natural gas drilling there (see Shale Daily, Nov. 17), commissioners in South Fayette Township, on Pittsburgh’s southwestern edge, voted to ban drilling in conservation areas and all residential zones, including suburban communities and rural farmland.

Southwestern Energy Production Co. (SEPCO), a subsidiary of Southwestern Energy Co., said last week a lawsuit claiming that its drilling in Lenox Township, PA, contaminated nearby water wells contains “unfounded allegations.”

A producer was accurate for the most part in predicting a modest rally in the cash market Thursday as a result of the huge recovery from negative territory by May futures the day before (see Daily GPI, April 3). Most points did see gains, with a majority of them in single digits. However, quite a few quotes at scattered locations were flat to down as much as about 20 cents.

The signs of a potential reversal in this week’s cash price run-up that began to surface Wednesday (see Daily GPI, Sept. 1) proved to be highly accurate. The September aftermarket, which had gotten off to a strong start the day before, was headed downhill in a hurry Thursday with losses ranging from about 30 cents to $2.60 or so.

NGI sources generally were correct Thursday in predicting a moderate cash rally for Friday, but not entirely accurate. Prices fell at virtually all Northeast citygates Friday as a cold front took regional temperatures lower for the weekend, and at scattered points elsewhere. Otherwise quotes ranged from flat to as much as 20 cents higher.

As part of a plan to ensure more accurate reserves reporting, oil and natural gas companies have been asked by the Securities and Exchange Commission (SEC) to report information for periods ending on or after Dec. 15, 2004 about how they account for exploratory drilling and other operations.