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Oil and Gas Roundup — Jan. 10

January 10, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Thanks to HF, natural gas supplies (barely) withstand 'polar vortex' assault

The polar vortex gripping the nation has brought a crazy week for natural gas. On Monday the demand for gas nationwide hit a record 125 billion cubic feet as homeowners and power generators sought to burn as much of it as they could get to keep the cold at bay. In a normal early-January week the draw on natural gas inventories is about 170 billion cubic feet. This week, according to market watcher Bentek, the drawdown is expected to be on the order of 310 bcf — the most ever.

The record demand stretched supplies in the Northeast. In the New York region on Monday prices for natural gas reached a record $100 per mmBTU. This is natural gas we’re talking about, not gasoline or oil. A week before spot prices were on the order of $4.25 per mmBTU.

“On Monday the message was, ‘We need every molecule we can get,’” says one natural gas trader in Houston. The price shock was felt as far south as east Texas, where spot prices were up to $40.20 per mmBTU, nearly matching the record set back in 2004.

Natural gas utilities, which serve homeowners and small businesses, have the first call on gas supplies in times like this as they are required by regulators to maintain a supply cushion for in order to keep grandma from freezing to death. That meant some power generators in the Northeast got pushed out. There’s also anecdotal reports of coal-fired plants going offline because their coal slurries froze up.

Read more: funding anti-hydraulic fracturing activists

WASHINGTON — The online progressive organization MoveOn will announce Thursday a new program to support local anti-fracking activists across the U.S. The "Frack Fighters" program provides funding and training to 100 activists fighting natural gas projects.

The effort comes as activists in Colorado and Pennsylvania have won recent fights to ban hydraulic fracturing, or fracking, a process used to extract natural gas from shale rock, in their communities. MoveOn's work is inspired by "both the victories and the potential for more victories," said Victoria Kaplan, the group's campaign director.

The group has selected 100 local activists from 37 states who are leading opposition to some element of natural gas development, from extraction to pipelines to wastewater disposal. Each will receive a $500 support grant as well as training and networking opportunities. The goal of the program, said Kaplan, is to "increase the capacity of grassroots leaders who are already driving strategic campaigns in their own communities to fight fracking."

Kaplan noted that the activists who have been awarded grants range in age from 16-year-olds to people in their 70s. A quarter are minorities and 60 percent are women. "This movement is diverse in many ways," said Kaplan. "That, I think, is a sign of a really formidable, powerful movement."

Read more:

Chamber of Commerce joins call to lift ban on US oil exports

WASHINGTON — The Chamber of Commerce added its voice to the growing clamor to export American oil on Wednesday, with the group’s CEO casting a U.S. ban on foreign crude sales as an antiquated policy that is on its way out.

“It’s important to look at energy as the next great American revolution that has the potential to help us on national security,” Thomas Donohue told reporters after his “State of American Business” address. “I think you will see us negotiating and working our way through it this year.”
Donohue suggested big changes to the 39-year-old crude export ban are inevitable.

“I want to lift the ban,” he said. “I just want to get it done in a reasonable sequence. It’s not going to happen overnight, but it’s going to happen.”

Donohue’s predictions, delivered one week into the new year, underscore the sense of urgency surrounding the oil export ban, already shaping up to be one of the most heated energy debates in 2014. And increasingly, it appears the White House will be at the center of it.

Read more:

API: U.S. energy policy choices may be crucial this year

Policy choices during 2014 could determine whether the US realizes its full oil and gas production potential and becomes a world energy superpower, or simply continues to play a supporting role in global markets, American Petroleum Institute Pres. Jack N. Gerard said.

“We can erase what for decades has been America’s greatest economic vulnerability—our dependence on energy sources from other continents, particularly from less-stable and friendly nations—and fundamentally alter the geopolitical landscape for decades to come, all while providing a much needed boost to our economy,” he maintained.

“But only if we get our energy policy right,” Gerard added in his annual State of American Energy address at the Newseum in Washington, D.C.

He said the US potentially could shed the foreign energy dependence yoke thanks to the American oil and gas industry’s innovative and entrepreneurial spirit that developed new technologies to recover supplies from previously inaccessible deposits.

“Implementing smart, pro-growth energy policies will help to ensure that future Americans only know their country as an energy leader,” Gerard said. “In other words, elections matter. In exactly 10 months, we will choose who will lead us in Washington, DC, and in many state and local governments. These choices will have a lasting and profound impact on the direction of our nation’s energy policy.”

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China could double oil, gas production by 2030

China's oil and gas production could double from current volumes to 700 million mt of oil equivalent by 2030, largely boosted by a growth in natural gas production as well as unconventional resources, the country's Ministry of Land and Resources said Thursday.

The MLR forecasts that from now until 2030, China's annual crude production will be sustained at over 200 million mt (4.02 million b/d), possibly hitting a peak of 250 million mt.

On the other hand, natural gas output will more than double to reach 300 billion cubic meters (29.01 Bcf/d) by 2030.

In addition, if targets for unconventional resource production are met -- of which unconventional oil output is at 50 million mt/year and unconventional gas output at 150 billion cu m/year -- China could see its total oil and gas production reach 700 million mtoe by 2030, the ministry said.

This would mean unconventional resources, including tight oil, shale gas and CBM, would account for a third of China's total oil and gas production.

In comparison, China produced 210 million mt of crude oil in 2013, the MLR said. This translates into an average of 4.22 million b/d.

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