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Oil and Gas Roundup — Dec. 23

December 23, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

State drilling rig count remains at 174

The number of drilling rigs actively exploring for oil or natural gas in Oklahoma did not change this week, remaining at 174, Baker Hughes Inc. reported Friday.

The tally is down nine from a year ago, when it was 183.

Nationwide, the net number of active drilling rigs fell by 14 this week to 1,768, according to Houston-based Baker Hughes. That's down by six from a year ago.

Of the rigs operating across the nation, 1,395 were exploring for oil, 372 for gas and one was listed as miscellaneous.

Friday on the New York Mercantile Exchange, benchmark U.S. crude oil rose 28 cents to close at $99.32 a barrel. For the week, oil rose about 3 percent, largely due to signs of improvement in the U.S. economy.

The last time oil closed above $100 a barrel was Oct. 18.

Natural gas dropped 4 cents Friday to $4.42 per thousand cubic feet.

— Tulsa World


Hydraulic fracturing makes Texas power supply drought resistant

A new University of Texas-Austin study shows that producing electricity from natural gas saves much more water than producing power from coal, even accounting for water lost in hydraulic fracturing for shale gas.

In other words, fracking for natural gas used to produce electricity may make Texas more drought-resistant as the state shifts from coal power generation to natural gas power generation.

The study, funded by the state of Texas, looks at how Texas’ devastating 2011 drought affected electricity demand and power plant water consumption as compared to 2010. Texas is unique among states because its power grid is entirely isolated from the rest of the country. It also produces more electricity than any other state, about half of which is produced using natural gas, according to the study.

Electricity produced using natural gas combustion turbines and natural gas combined-cycle generators requires roughly 30 percent of the water needed for coal power plants. The study estimates that the amount of water saved by shifting a power plant from coal to natural gas is up to 50 times the amount of water lost in fracking to extract the natural gas from underground shale formations.

Read more: http://www.cadillacnews.com/ap_story/?story_id=187586&issue=20131220&in_paper=1.


California taxes oil in many ways

Tom Steyer, the San Francisco billionaire environmentalist, has launched a campaign to increase taxes on energy production in California. He thinks oil companies are allowed to "siphon California resources without providing any meaningful return to Californians."

Beginning an education campaign on inaccurate claims doesn't bode well for the quality of the educational experience.

To claim Californians receive no meaningful return for the oil we produce is puzzling. Oil companies in California generate $6 billion in tax revenues for state and local governments, according to an analysis by Purvin & Gertz in 2011. While it's true California does not have an oil severance tax per se, California taxes oil companies and oil production in a variety of other ways.

We have the highest corporate income tax in the United States. Texas, an oil producing state with an oil severance tax, has no state income tax. We have high sales taxes. Alaska, another oil producing state with a severance tax, has no state sales tax.

And California assesses oil-producing property based on the present value of the oil in the ground, meaning oil in California is taxed whether it's extracted or not.

Only a billionaire would claim California is a low-tax state.

Read more: http://www.sfgate.com/opinion/openforum/article/State-already-taxes-oil-in-many-ways-5086799.php.


Mexico enacts law to privatize oil, gas industry

MEXICO CITY — Mexican President Enrique Pena Nieto signed into law a sweeping reform that will allow private companies to drill for oil and gas, and end a seven-decade-long monopoly held by the state oil company.

Mexican law previously restricted such work to Petroleos Mexicanos, or Pemex, in constitution articles that have long been considered sacred. The monopoly was seen as safeguarding the country's patrimony from foreign exploitation after the Mexican Revolution.

Pena Nieto said the new energy laws and other reforms have strengthened confidence in Mexico, citing them as the reason Standard & Poor's raised the country's credit rating one step to BBB+.

"We, Mexicans, have decided to set aside myths and taboos, to take a big step forward," said Pena Nieto, who argues that Mexico needs the foreign companies' expertise and technology to exploit its vast reserves.

He called the energy bill "a fundamental, historic reform" needed for Mexico to speed up the lagging pace of its economic growth.

Read more: http://www.usnews.com/news/business/articles/2013/12/20/mexicos-president-enacts-energy-reform.


There shale be energy! World powers embrace HF

The oil and natural gas boom in the U.S. may have sparked a worldwide energy revolution, as world powers like China and Britain look to hydraulic fracturing.

The United States and China have partnered on hydraulic fracturing to unlock vast amounts of natural gas buried under Chinese soil. The deal was agreed to after Vice President Joe Biden visited Asia this month to promote shale gas development. Environmental Protection Agency administrator Gina McCarthy also visited China this month to discuss environmental protection and global warming.

European nations are also embracing hydraulic fracturing. Britain recently opened up nearly half the country to oil and gas drilling, and is in the midst of an effort to block new European Union environmental rules from crippling energy development in Europe. Britain has the support of other nations including the Netherlands, Romania and Poland — all of which have large shale reserves.

Hydraulic fracturing has allowed the U.S. to unlock vast oil and natural gas reserves and have put it on the path to surpassing Russia and Saudi Arabia as the world’s top oil and natural gas producer. Low natural gas prices have sparked a manufacturing boom as well in the U.S. According to the International Energy Agency (IEA), the natural gas boom has caused U.S. gas prices to fall to one-third of European prices and one-fifth of Japanese prices.

Read more: http://dailycaller.com/2013/12/19/there-shale-be-energy-world-powers-embrace-fracking/#ixzz2oJ6R28TX.
 
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