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Oil and Gas Roundup — Dec. 4

December 04, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

EPA to be 'flexible' on carbon standards

Environmental Protection Agency Administrator Gina McCarthy on Monday said her agency would give states great flexibility in meeting new requirements for carbon emissions from power plants.

The coming standards for both existing and proposed coal-fired power plants have been criticized by Republicans, who say the new rules will hurt the economy. The new rules are especially anticipated in the heavy coal producing states of West Virginia, Kentucky and Ohio.

"EPA next June will propose new standards that will also provide significant flexibility to the states that will protect public health from carbon pollution from existing power plants," McCarthy said on Monday at the liberal Center for American Progress event. 

"That will give opportunities to reduce power plant emissions."

McCarthy said the agency would be "really flexible on the implementation of these standards" with states.

And nine Northeastern and Mid-Atlantic states are asking for just that.

The Regional Greenhouse Gas Initiative called on the EPA on Monday to allow states to follow "flexible market-based carbon pollution programs."

The nine states have cut carbon dioxide emission by 40 percent since 2005 and want the EPA to let them develop a plan that will work for their region.
 
They ask for the ability to develop a "mass-based system of compliance, to demonstrate compliance on a regional-basis and on a multi-year basis," when establishing a common target to limit emissions.
 
While next summer the EPA's proposal for rules on existing power plants is expected, McCarthy said June is "not a deadline" for finalizing rules on new power plants.

— TheHill.com


Ban fracking? Why stop there?

Here's a modest proposal to resolve the fractious issue of fracking in Colorado. It’s a win-win amendment to the Colorado Constitution that will pass in a landslide.

First, let’s review. A number of Colorado cities — including Longmont, Boulder, Lafayette and Fort Collins — are appalled by the prospect of oil and gas drilling in their communities and have attempted to either ban it outright or to delay it for years by the imposition of long moratoriums. The bans and moratoriums are imposed either on oil and gas production directly, or on hydraulic fracturing (fracking), the well stimulation process used on 95 percent of the oil and gas wells drilled in the U.S.

While such measures are wildly popular in the towns that passed them, they are also a direct violation of Colorado law, which makes regulation of oil and gas production the exclusive province of state government. So the anti-frackers are expected to propose an amendment to the state constitution next year that would give local governments the power to ban oil and gas production or fracking, or both, within their jurisdictions.

The fight over the putative amendment is likely to be nasty, brutish and crude. And breath-takingly expensive. But both enviros and roughnecks could enthusiastically support the amendment, if it were worded like this:
“Colorado cities and counties shall have the power to regulate or prohibit the production of oil and natural gas and to regulate or prohibit the practice of hydraulic fracturing (fracking) within their borders.

“Upon the adoption of a permanent or temporary prohibition on oil or gas production or fracking by any recognized Colorado city or county, the sale of gasoline, diesel fuel and natural gas within that city or county shall be prohibited for the duration of the ban.”

Read more: http://www.boulderweekly.com/article-11994-ban-fracking-why-stop-there.html.


POLL-U.S. shale to keep lid on oil prices next year

Ample supplies boosted by the U.S. shale oil revolution and anaemic demand growth are expected to pressure crude oil prices next year, a Reuters poll of analysts forecast.

The monthly survey of 27 analysts projected Brent crude oil would average $104.10 a barrel in 2014, down from this year's closing average price of $108.50. Last month's poll saw Brent averaging $105.40 in 2014.

The poll expects Brent to average $102.60 in 2015.

"Increases in production from both the United States and Iraq will lead to excess supply in the market amid subdued demand growth," said Rahul Prithiani, director at CRISIL Research.

Analysts said the boom in U.S. shale oil production would be the single biggest factor impacting oil prices in 2014. Even analysts projecting substantial growth in global oil demand expected supply to outpace consumption.

"We see global demand growing slightly next year with supply growing faster (and) that should lead to a modest decline in world oil prices," said Pavel Molchanov, energy analyst at Raymond James.

Read more: http://in.reuters.com/article/2013/11/29/oil-poll-idINBQE7DN0FF20131129.


The next North Dakota: 5 states about to go oil boom

The black-gold rush in North Dakota—a technological revolution in oil production—is creating a new class of rugged millionaires. North Dakota might be grabbing headlines, but horizontal drilling and “fracking” to tap into newly accessible oil reserves is by no means limited to that state.

The shale revolution is still in its “early innings,” as a recent report by Credit Suisse put it. OPEC’s 2013 World Oil Outlook, published last month, said that new oil supply from the U.S. and Canada would hit nearly 5 million barrels a day within five years, up from last year’s forecast of 1.7 million barrels a day by 2018. As that boom plays out, tens of billions of dollars in new infrastructure and development will likely be invested in the coming years.

Where will the new investment be concentrated? Though oil and gas companies across the U.S. are busy buying up acres of mineral rights in oil shale hot spots in an effort to be early players in the next booms, most are staying quiet about early production numbers.

If they let on that they’ve uncovered another Bakken or Eagle Ford Shale, land and production costs could skyrocket. In Texas’s Eagle Ford, for example, companies were paying $250 to $450 an acre in 2009 when the area’s potential was unknown, but by 2011, an acre was going for $21,000 to $22,000.

The U.S. Geological Survey (USGS) and the Energy Information Administration (EIA) have only recently started to assess reserve areas, and the EIA  estimates 482 trillion cubic feet of natural gas and 33 billion barrels are recoverable, revised from a mere 4 billion barrels in 2007.

Read more: http://www.thefiscaltimes.com/Articles/2013/12/02/Next-North-Dakota-5-States-About-Go-Oil-Boom.
 
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