Good morning; here's what the Oilman has for you today:

• The Great Gas Price Tank

• Alaska Judge Throws Out Anti-Willow Case

• Tweet of the Day

The Great Gas Price Tank

Natural gas prices in the U.S. last week tanked to below $2 per mmBtu. Since the start of 2023, prices have halved.

But drillers keep producing gas like they don’t care about prices.

What gives?

Oil’s closest associate

Some large gas producers have started to reduce their output in response to prices. But many others are boosting output.

Because they can’t cut it.

About a third of the natural gas that gets out of the ground in the U.S. is associated gas—a by-product of oil production.

Once upon a time, most of that gas was flared, meaning wasted.

Now things are changing, everyone wants to look responsible, and regulators are cracking down on flaring.

Also, why not make money on gas instead of wasting it?

Hope lies over the ocean

Okay, producing associated gas at no additional cost is all very well, but seriously, less than $2 per mmBtu?

This time last year, a million Btu was trading for close to $7.

Well, maybe last year’s rally could happen again if you ask some gas producers. Fingers crossed.

Take Europe: it doesn’t really have a huge choice of gas suppliers, and it likes the spot market for LNG. Sadly, it also has full gas storage after the mild winter.

The good thing about gas is it can’t sit in storage forever, so Europe will be back asking for more LNG before long.

China had a more regular winter, so it’s back on the LNG market and looking for bargains.

That’s where hope for higher gas prices lies.

Because back home, there are too many people who want to ban gas stoves and heaters.

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Alaska Judge Throws Out Anti-Willow Case

An Alaska District Judge has dismissed a case demanding the cancellation of the Willow oil project in a potentially big win for the industry.

Per the judge, the plaintiffs had failed to provide convincing evidence of “irreparable harm.”

Just when you thought climate change trumps everything…

President Biden approved the $8-billion Willow project last month to cries of dismay and horror from climate change circles.

Outside these circles, people saw the approval as an acknowledgment of hard energy realities.

Better late than never, right?

But environmentalists don’t give up easily and immediately attacked Willow.

They claimed Conoco’s construction would pose a danger of irreparable harm to the environment, aggravate climate change, and threaten habitats.

Judge Sharon Gleason ruled that building roads and a gravel pit wouldn’t really do all that.

The plaintiffs probably didn’t have time to put together a convincing case…because there isn’t one.

What if the trend spreads?

With the Willow approval, the Biden administration effectively admitted that the U.S. needs to produce more of its own oil.

That came after open calls on the industry to boost production last year, but that could’ve been a panic response to soaring prices at the pump.

Willow is different – it’s about long-term oil production. Supported by a very climate-conscious administration.

Now, a federal court has sided with the industry that the same climate-conscious administration officially wants to decimate.

What’s next – another lease sale? Oh, wait, that already happened.

Around the Global Patch

🇦🇪 UAE hosts U.N. climate meeting, announces Oil & Gas Expansion
🌏 Tough decisions for Asia RE: Inflation
🇳🇴 Norway to move on from Oil & Gas?

Tweet of the Day

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