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Oil and Gas Roundup — Sept. 26

September 26, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Benefits of shale boom spreading, study finds

WASHINGTON, D.C. —  A study finding the U.S. energy boom is reaching other economic sectors gives credibility to the industry's stance, the American Petroleum Institute said.

A study from IHS Global Insight, commissioned by the Energy Equipment and Infrastructure Alliance, finds total labor income generated by employment in industries across many aspects of the energy sector supply chain could reach $60 billion in 2025. That's a 46 percent increase from 2012.

"America's rise as an energy superpower is creating an economic ripple effect of fast-paced growth, higher wages, and new jobs," API Vice President for Economic Policy Kyle Isakower said in a statement Wednesday. "API released its own survey of 30,000 vendors and supporting businesses in every single state that that help deliver affordable energy to U.S. consumers."

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Better communication needed about benefits of hydraulic fracturing

The results of a CBC/Radio-Canada poll released in September showed that while those polled were relatively evenly split on whether hydraulic fracturing was important to the economy, most respondents were more concerned with things like growing the economy and creating jobs.

Given the fact that hydraulic fracturing has been shown to bring about significant job creation and economic development for municipalities nearby, the results of the poll seem to indicate that the energy industry could do a better job of communicating with the public regarding the fiscal benefits of hydraulic fracturing.

What is at question, according to economist Karr Ingham, is how they should do that. Currently, the industry seems to be struggling to get the message out, Ingham — who created the Texas Petro Index (TPI) for the Texas Alliance of Energy Producers – admitted, adding that it doesn’t help that groups against the oil and gas industry are constantly on the attack.

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Countries, oil and gas firms launch methane taskforce at U.N. meeting

Governments of major producing countries and six multinational oil and gas companies formed a methane emissions reduction taskforce during the United Nations' global climate change summit in New York.

The Oil and Gas Methane Partnership will be a UN Climate and Clean Air Coalition initiative that “provides involved companies with a systematic, cost-effective approach for reducing their methane emissions and for credibly demonstrating to stakeholders the impacts of their actions, the White House said on Sept 23.

“I am so glad to see concrete initiatives that will help reduce the release of short-lived climate pollutants into the atmosphere,” U.N. Sec. Gen. Ban Ki-moon said of the group’s formal launch during the climate change summit. “These announcements show how governments, corporations and civil society can work together to reduce emissions.”

Significant action is needed especially by the oil and gas sector, which the U.N.’s CCAC said is responsible for more than 20 percent of the world’s methane emissions—second only to the agriculture sector.

It said industry participants include Eni SPA of Italy, Petroleos Mexicanos of Mexico, Norway’s Statoil Group, Houston-based Southwestern Energy Co., BG Group (the former British Gas), and PTT, Thailand’s national oil and gas company.

The U.S., Russian, Nigerian, Norwegian and Mexican governments are among those from producing countries that are participating, CCAC added.

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Mexican cartels steal billions from oil industry

CIUDAD MIER, Mexico — Mexico overcame 75 years of nationalist pride to reform its flagging, state-owned oil industry. But as it prepares to develop rich shale fields along the Gulf Coast, and attract foreign investors, another challenge awaits: taming the brutal drug cartels that rule the region and are stealing billions of dollars' worth of oil from pipelines.

Figures released by Petroleos Mexicanos last week show the gangs are becoming more prolific and sophisticated. So far this year, thieves across Mexico have drilled 2,481 illegal taps into state-owned pipelines, up more than one-third from the same period of 2013. Pemex estimates it's lost some 7.5 million barrels worth $1.15 billion.

Pemex director Emilio Lozoya called the trend "worrisome."
More than a fifth of the illegal taps occurred in Tamaulipas, the Gulf state neighboring Texas that is a cornerstone for Mexico's future oil plans. It has Mexico's largest fields of recoverable shale gas, the natural gas extracted by fracturing rock layers, or fracking.

Mexico, overall, is believed to have the world's sixth-largest reserves of shale gas - equivalent to 60 billion barrels of crude oil. That's more than twice the total amount of oil that Mexico has produced by conventional means over the last century.

The energy reform passed in December loosened Mexico's protectionist policies, opening the way for Pemex to seek foreign investors and expertise to help it exploit its shale fields. It hopes to draw $10 billion to $15 billion in private investment each year.

The attractiveness of the venture may hinge on bringing Tamaulipas under control.

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