The 2021 Oil and Gas Annual Report released today by the Pennsylvania Department of Environmental Protection (DEP) shows that production and compliance inspections increased in 2021. Pennsylvania continues to be the second largest producer of natural gas in the nation, behind Texas.
“In 2021, DEP remained committed to enforcing violations of the oil and gas industry,” said DEP Acting Secretary Ramez Ziadeh. “Governor Wolf and DEP continued their priority of maintaining environmental protection for Pennsylvania’s residents and visitors.”
The report notes that DEP personnel completed 34,145 compliance inspections at conventional and unconventional well sites in 2021, about 8,262 more than in 2020. All inspections continue to be done electronically.
DEP issued 770 unconventional well permits in 2021, about 150 fewer than the previous year. Sustained low commodity prices coupled with longer wellbores contributed to a decline in permit applications. An interactive map shows well drilling locations by county.
In 2021, more than 7.6 trillion cubic feet of natural gas was produced from unconventional and conventional gas wells in Pennsylvania. This represents the largest volume of natural gas on record that has been produced in Pennsylvania in a single year. In 2021, there was 7,572,916,109 cubic feet of natural gas produced from unconventional wells, and 76,454,176 cubic feet of natural gas produced from conventional wells. In 2020, data confirmed that 7,091,486,278 cubic feet of natural gas was produced from unconventional wells and 83,837,607 cubic feet of natural gas was produced from conventional wells.
Allentown-based CrossAmerica Partners LP has entered into a definitive agreement to acquire Community Service Stations’ wholesale fuel supply portfolio in the greater Boston area.
That includes the wholesale fuel supply contracts to 39 dealer-owned locations, 34 subjobber accounts and two commission locations (one fee-based and one lease) totaling approximately 75 million gallons of fuel annually through such brands as Exxon Mobil, Shell and Gulf.
With a footprint in 34 states, CrossAmerica Partners LP is a major U.S. wholesale distributor of motor fuels; operator of seven convenience store brands; and and owner and lessee of real estate used in the retail distribution of motor fuels. It distributes branded and unbranded petroleum for motor vehicles to about 1,750 locations and owns or leases approximately 1,150 sites.
CrossAmerica Partners was formed in 2012 and has well-established relationships with several major oil brands.
“We are excited to acquire these attractive assets from one of the leading wholesale distributors in the Boston area,” CrossAmerica’s president and CEO, Charles Nifong, said in a release. “This acquisition expands our fuels business in the New England market with new dealers and strengthens our relationship with several of our major fuel supplier partners.”
The transaction is expected to close in the fourth quarter of this year.
No business or industry has gone untouched by the COVID-19 pandemic, but for the home heating oil industry, which saw a record drop in crude oil prices just as the effects of the virus became widespread in the U.S., it’s been a particularly interesting ride.
With a wide range of sizes, services and territories for independent home heating oil companies, the impact has been varied, but most say that as they exit their busy season they’re doing just fine.
Smaller companies, like Russel E. Conrad Inc. in Kutztown, which has only five employees, including owner Patrick Conrad, were able to keep a full staff through the pandemic.
It was a little rougher on larger independent companies, like Apgar Oil in Allentown, where co-owner Jane Apgar Domitrowits had to lay of five of her six technicians because of the cancellations of regular service appointments, which are a large part of her company’s business.
“April was terrible. Everyone was so fearful. No one wanted us in their house, which I understand,” she said.
Apgar kept one service tech on for emergencies. Drivers were all still needed because oil deliveries are contactless and the weather was still cold so heating oil was needed.
Conrad saw a need for service repair over the past couple of months, especially in April and early may when the weather became colder.
“People were appreciating having emergency services,” Conrad said.
At Weaver Fuels in Allentown, Dave Oswald, general manager, said his service repair techs weren’t particularly busy to begin with.
“When this hit there wasn’t a whole lot on the board. It’s kind of our lull for the year,” he said. “Anything of the preventative maintenance variety is just being pushed off.”
What did keep the companies busy was the sudden and dramatic drop in prices. As of May 1, Apgar, for example, was selling heating oil at $1.999 per gallon. Last year the price was $2.649.
The price drop has generated a lot of interest and late-season oil sales.
Apgar said people have been calling her shop asking to pre-purchase their oil for next season, even though their pre-buy promotions haven’t gone out yet.
“I think people are really going to breeze through the pre-pay this season because the price is so low,” she said.
Weaver said the recent cold weather came at a good time for people to get one last delivery of oil for the season and the phone has been ringing regularly with calls from people who normally would have been done buying for the year.
Conrad, said because the prices are so low, people who don’t even need oil are calling him looking to top off their tanks so they can take advantage of the savings while they last.
“They’re hearing the price and asking if they can get 70 or 80 gallons, which some companies won’t even do, but we’ll make the deliveries for them,” he said.
The one point of confusion, said Apgar, was from some people who had seen news stories that the price of crude oil had dropped to zero because companies were running out of places to store it.
“People have actually called us and asked ‘can I have some of that free oil?’” she said.
Unfortunately, there is no free oil, she’s had to explain, but the prices are as low as they’ve been in many, many years.
She’s recommending that people buy early this year to make sure they take advantage of the price. Prices could go lower, she notes that even she can’t time the market. But, she said buying early is almost always the best bet, and she can’t picture prices dropping much lower.
“This year people should be should be jumping on that like a hot tamale,” she said.
There may not be many places you could go right now, but if you could it would be a lot cheaper to get there.
As most people in Pennsylvania shelter in place, not going out to restaurants or stores and commuting only to the most essential jobs, gas prices are hitting record lows.
Some states have seen drops as high as 40 cents per gallon over this time last month.
“We’ve seen a drop in demand. We don’t have as many people driving as we normally do,” said Thresa Podguski, director of legislative affairs for AAA East Central in Allentown.
She said while the original gas price drops, which began in February, were largely due to crude price wars between Saudia Arabia and Russia, the latest declines could be attributed to the lower demand caused by people staying at home.
In Pennsylvania the average price for a gallon of gas as of March 24 was $2.33, down from $2.45 on March 17 and significantly lower that the price on March 24 of last year, when it was at $2.79.
In the Lehigh Valley the average price for a gallon of gasoline was $2.28, down from $2.42 on March 17 and $2.78 cents on March 24 of last year.
The average price for a gallon of gasoline in the Harrisburg area was $2.32, down from $2.38 cents one week ago and $2.64 this time last year.
In Berks County the average price for a gallon of gasoline was $2.41 down from $2.67 cents one week ago and $2.77 this time last year.
Because of the low demand from people not driving, Podguski said that gasoline stocks have declined to stock levels of 62 million barrels in the Mid-Atlantic region as regional refinery use is down to its lowest point since 2012.
That has kept prices in the region slightly higher than those in other parts of the country, even though they are dropping to extremely low levels.
To put the prices in perspective, she said spring is traditionally the time when people get out and drive more.
“Historically, the beginning of spring has gas prices starting to show an increase because of the demand,” she said.
With that not being the case this year, Podguski said lower usage will push pump prices to less expensive levels for the foreseeable future.
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