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Oil and Gas Roundup — Nov. 18

November 18, 2013
TOPICS: In the news
A roundup of oil and natural gas news from around the state, nation and world:

State oil production growing fast

Three new hotels have popped up and long-vacant buildings are filled in Alva as the newest oil boom has sent thousands of rig hands, service company employees and other workers to northern Oklahoma.

“It has been a real stimulus and has allowed us to make some capital improvements that were long overdue,” Alva Mayor Arden Chaffee said.

The story has been similar in western and southern Oklahoma, as producers have invested millions of dollars throughout the state in an effort to revive many of the state's oldest oil fields.

The boom has supported a new hotel and three recreational vehicle parks in Chickasha.

“We've had a lot of activity in this area,” said Bud Andrus, president of the Chickasha Chamber of Commerce. “Three previously empty buildings have been purchased by oil field support companies in the last six or eight months.”

Oil production in Oklahoma has nearly doubled since 2005, reversing three decades of declines in the state.

Read The Oklahoman story:

U.S. rig count up 8 to 1,762

HOUSTON — Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. rose by eight this week to 1,762.

The Houston-based company said in its weekly report Friday that 1,385 rigs were exploring for oil and 370 for gas. Seven were listed as miscellaneous. A year ago there were 1,809 rigs.

Of the major oil- and gas-producing states, Oklahoma gained four rigs, Louisiana increased by three, Kansas and North Dakota by two, and New Mexico, Pennsylvania and West Virginia by one apiece.

Texas was down by nine and Colorado by one. Alaska, Arkansas, California, Ohio, Utah and Wyoming remained unchanged.

The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

U.S. approves additional LNG exports from Freeport LNG

The U.S. Department of Energy said on Friday it has conditionally approved more exports of liquefied natural gas from Freeport LNG in Texas, a move that could lead to more shipments of the fuel in coming years.

The approval is the fifth by the U.S. government since 2011 to countries with which it does not have a free trade agreement.

While the U.S. natural gas boom has led to a long list of applications to export the fuel, the Obama administration is weighing how fast to roll out approvals in order to keep domestic gas prices in check. The last approval, on Sept. 11, was for Dominion Resources Inc in Cove Point, Maryland.

Renewable fuels quota to be cut in U.S. EPA change

The Obama administration proposed a cut in the amount of renewable fuels that refiners must blend with gasoline next year, bowing to oil industry complaints that the targets contained in 2007 legislation were too high.

In a draft rule released today, the U.S. Environmental Protection Agency said it would require between 15 billion to 15.52 billion gallons of renewable fuels such as corn ethanol and biodiesel in 2014. That compares with 18.15 billion gallons set in the legislation, making it the first time the legal mandate would be cut.

This “acknowledges a drastic change in the U.S. energy outlook since the renewable fuels mandate was put in place,” Jason Bordoff, the head of the Center on Global Energy Policy at Columbia University and former White House official under President Barack Obama, said in a statement. It “marks a notable shift in the administration’s biofuel policy.”

The proposal, which was applauded by refiners and panned by corn growers and ethanol makers, would lower costs for refiners such as Valero Energy Corp. (VLO) that must blend the fuel into gasoline.

Read more:

Eagle Ford Shale turning Corpus Christi port into vital oil gateway

CORPUS CHRISTI, Texas — It's a Monday afternoon at the edge of Texas, but this might as well be the center of the oil field. Although the Port of Corpus Christi moves everything from enormous wind turbine blades to military equipment, the Eagle Ford to its north and the field's various and sundry products — from steel pipe to sand — seem to touch everything here these days.

The drilling boom has launched billions of dollars in port construction projects, as well as a round-the-clock frenzy to move products in and out of the oil patch, and to coastal terminals and refineries.

There are warehouses filled with bulk bags of ceramic proppant, the perfectly spherical sand-size beads used in hydraulic fracturing. Tug boats push inland, and oceangoing barges carrying crude oil. Steel oil-field pipe from South Korea sits stacked near a cargo dock. Workers build new storage tanks. Construction cranes punctuate the sky.

The only vessels that seem to be bringing oil into this port are heading to the Citgo refinery, owned by the national oil company of Venezuela, a country with plenty of its own hydrocarbons.

Read more:

Twenty ‘climate scientists’ deny science on hydraulic fracturing

This week, several news outlets reported that twenty of the nation’s “top climate scientists” sent a letter to Governor Jerry Brown telling him that hydraulic fracturing in California would be detrimental to the state’s commitment to combating climate change. (We’re supposed to ignore that they have never before raised a fuss in the 50 years hydraulic fracturing has been occurring here, apparently.)

In the letter, which was generated by the Center for Biological Diversity (classic press release fodder!), these “top climate scientists” engage in outright denial of well-established science.

You might be asking, “Okay, so they’ve said and done some unsavory and pretty silly things. But are their accusations in this instance valid?” The answer is no. Let’s have a look:

CBD Letter: “Shale gas and tight oil development is likely to worsen climate disruption, which could harm California’s efforts to be a leader in reducing greenhouse gas emissions… Research suggests that large quantities of methane are leaked during shale gas and tight oil development processes.”

FACT: No it isn’t. This claim comes primarily from two of the authors of the letter, Robert Howarth and Anthony Ingraffea. Neither is a climate scientist, but real climate scientists did feel the need to respond to their accusations.

Read more:

Shale revolution spreads with record wells outside U.S.

The hydraulic fracturing of shale in search of oil and gas has hardly started outside the U.S., but that’s changing.

A record 400 shale wells may be drilled beyond U.S. borders in 2014, with most in China and Russia, according to energy consultants Wood Mackenzie Ltd. While that’s a fraction of the thousands of shale wells drilled in the U.S., the number of rigs used onshore in Europe and the Asia-Pacific region has increased 10 percent over the past year, data compiled by oil services company Baker Hughes Inc. show. Most of those rigs are meant for shale, Bloomberg Businessweek reports in its Nov. 18 issue.

“It’s likely there will be a revolution,” Maria van der Hoeven, executive director at the Paris-based International Energy Agency, said in an interview in London. “But not everywhere at the same time. And you just can’t copy the U.S. experience.”

Fracking in the U.K. will start next year, after the government lifted an 18-month moratorium.

Read more:
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