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Oil and Gas Roundup — Dec. 11

December 11, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

New pipelines open up crude loop in North America

The undeniable success of American oil is such that the Bakken Shale region could declare independence (Bakkenistan? Shalezuela?), rock up to the next OPEC meeting and demand a seat on the board.

A million barrels a day are being pumped in North Dakota, something unthinkable as recently as five years ago. A similar amount is being pumped each day at Eagle Ford and Permian, both in Texas.

There was a time when that North Dakota crude would build up at Cushing, Okla. Now, thanks to new and improved pipeline routes south, a new glut is forming on the Gulf Coast.

Now, this situation isn’t going to last forever. The International Energy Agency sees a production plateau from 2020 and a slow decline beginning five years after that. So, naturally, those with money in the game want to make hay while this sun shines.

The result: a record number of permits for export of crude have been granted this fiscal year. By law, there is only one place that crude can go and that is Canada. It can be a profitable trade — the crude can be purchased at Gulf prices, and sold at international prices.

Read more: http://blogs.wsj.com/moneybeat/2013/12/11/new-pipelines-open-up-crude-loop-in-north-america/.


Drivers, heating oil customers to benefit from U.S. hydraulic fracturing oil boom

First fracking gave us more and cheaper natural gas. Now it promises to do the same for oil.

TransCanada Corp. announced last week it would begin operations along the southern stretch of its Keystone XL pipeline Jan. 3. This will allow a glut of crude oil extracted through hydraulic fracturing to be moved from stockpiles in Oklahoma to refineries along the Gulf Coast.

The development is the latest indication that at least some of the benefits of fracking, long associated with natural gas, will increasingly flow to consumers of home heating oil too, as well as to anyone who drives a car.

"It's really good news," said Tancred Lidderdale, an analyst for the U.S. Energy Information Administration. "It points to a promising future."

Already, across a swath of the country's middle section from west Texas to North Dakota, a domestic oil boom barely 5 years old is well underway, helping to stabilize petroleum product prices that, until recently, were on the rise. Not only is this oil cheaper to begin with, but it doesn't have to be transported across the ocean, sparing the end-user costly shipping fees.

Read more: http://www.mcall.com/business/mc-us-oil-production-rises-20131210,0,6593931.story#ixzz2nCeUHsv4.


Newfield Exploration will spend $170 million on new Eagle Ford wells

Oil company Newfield Exploration Co. will spend $170 million in the Eagle Ford Shale next year to drill 20 development wells, officials say.
Newfield, based in the Woodlands, expects next year’s production in the South Texas oil and gas formation to increase 30 percent over 2013, according to projections in a new shareholder update.

The company spent an average of $7.3 million on its Eagle Ford wells this year, reflecting continued efficiency gains in development, officials also say.

“Our three-year plan provides strong cash flow and production growth,” Newfield Chairman and CEO Lee K. Boothby said in a written statement.
The company plans to spend around $1.6 billion in 2014 in its continuing operations, which include oil and gas plays in Texas, the Rocky Mountains and Mid-Continent. It also has oil developments in offshore Malaysia and China.

— San Antonio Business Journal


Industry seeks repeal of Renewable Fuel Standard

Two major US oil industry groups said Tuesday the US Environmental Protection Agency violated the Clean Air Act in how it issued its 2013 Renewable Fuels Standard and asked a federal appeals court to overturn the blending mandate.



In an opening brief filed with the US Court of Appeals for the District of Columbia Circuit, the American Petroleum Institute and American Fuel and Petrochemical Manufacturers said the EPA was months late in issuing the 2013 rule.



"Although EPA was statutorily required to issue the 2013 RFS by November 30, 2012, it failed to issue the standards until August 15, 2013 — almost two-thirds of the way through the compliance year," the trade groups wrote in their brief. "Instead of benefitting from the lead time Congress mandated, obligated parties must scramble to alter their compliance strategies more than halfway through the compliance year."



The API and AFPM also said the EPA was far too optimistic in its projections of cellulosic biofuels availability, and they also accused the EPA of circumventing the law in granting Alon USA's Krotz Springs refinery in Louisiana an exemption from the 2013 RFS.

Read more: http://www.platts.com/latest-news/oil/washington/us-oil-industry-tells-appeals-court-2013-rfs-21933266.


Press on with hydraulic fracturing, says U.K. climate change chief

Lord Deben said exploiting Britain's shale gas reserves would provide a secure source of energy for decades without wrecking the environment.
Speaking to the Times of London, he dismissed environmental concerns raised by "people on the green end."

Lord Deben — who as John Gummer was environment secretary under John Major — chairs the Committee on Climate Change, which was set up in 2008 to advise the government on emissions and analyse climate change science, economics and policy.

"It just isn't true that fracking is going to destroy the environment and the world is going to come to an end if you frack," he said.
"And yet to listen to some people on the green end, that's what they say."

The peer — a former environment secretary — said people "ought to be worried about the security of our energy supplies" and suggested it would be "much better" to have more UK-sourced gas.

Read more: http://www.bbc.co.uk/news/uk-25327695.
 
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