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Oil and Gas Roundup — Oct. 6

October 06, 2014
TOPICS: In the news
Oklahoma reconsiders wind subsidies as industry power grows

CALUMET (AP) — A decade ago, states offered wind-energy developers an open-armed embrace, envisioning a bright future for an industry that would offer cheap electricity, new jobs and steady income for large landowners, especially in rural areas with few other economic prospects.

To ensure the opportunity didn’t slip away, lawmakers promised little or no regulation and generous tax breaks.

But now that wind turbines stand tall across many parts of the nation’s windy heartland, some leaders in Oklahoma and other states fear their efforts succeeded too well, attracting an industry that gobbles up huge subsidies, draws frequent complaints and uses its powerful lobby to resist any reforms. The tension could have broad implications for the expansion of wind power in other parts of the country.

“What we’ve got in this state is a time bomb just waiting to go off,” said Frank Robson, a real estate developer from Claremore in northeast Oklahoma. “And the fuse is burning, and nobody is paying any attention to it.”

Today, many of the same political leaders who initially welcomed the wind industry want to regulate it more tightly, even in red states like Oklahoma, where candidates regularly rail against government interference. The change of heart is happening as wind farms creep closer to more heavily populated areas.

Opposition is also mounting about the loss of scenic views, the noise from spinning blades, the flashing lights that dot the horizon at night and a lack of public notice about where the turbines will be erected.

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Shale boom driving gas prices lower, AAA says

WASHINGTON, D.C. (UPI) — Retail prices for gasoline are moving lower thanks in part to the increase in production from North American shale, motor club AAA said.

AAA said in its weekly roundup of retail gasoline prices that consumers in the United States paid the lowest prices on average in September in four years, with a monthly average of $3.39 per gallon.

That's 13 cents less than September 2013 and 44 cents less than the same month two years ago.

Gasoline prices start a seasonal decline in September because the summer travel season is over and refineries start making a winter blend of gasoline, which is less expensive to produce.

Avery Ash, a spokesman for AAA, said gasoline prices should continue their decline, with the national average price for a gallon of regular unleaded expected to drop another 20 cents by the end of November.

"If everything goes smoothly, buying gas for less than $3.00 per gallon should be refreshingly common in many parts of the country this winter," he said in a statement Tuesday.

Though refinery issues play into the price at the pump, AAA said gasoline prices in general have been less expensive than in years past because of the increase in production from shale basins in North America.

"U.S. refineries have taken advantage of increased crude oil supplies to make more gasoline," the motor club said. "In addition, increased domestic production has helped insulate U.S. consumers from conflicts and instability overseas."

Maze of federal oversight impedes North Dakota's anti-flaring push

North Dakota's oil producers will struggle to comply with aggressive rules taking effect on Wednesday designed to curb the wasteful burning of natural gas, hindered by lengthy federal reviews of crucial pipelines.

The No. 2 U.S. oil state is pushing to resolve a problem commonly known as flaring, an environmental and economic squandering akin to burning cash.

Energy companies have been preparing since June for the deadline requiring them to capture 74 percent of natural gas extracted alongside crude oil from thousands of wells. The standards get tougher in January.

But the energy industry and state officials say they are bound to fall short of the goal through 2015, flaring gas in excess of targets and consequently having to trim oil production to comply with penalties built into the new standards.

The main reason, according to Reuters interviews and reviews of regulations, is simple: a Byzantine web of state and federal agencies who must sign off on new pipelines.

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Evans speaks to Edmond Economic Development Authority

EDMOND — It will be important for leaders of economic development and business to decide as a group what really constitutes Oklahoma’s energy industry, said Russell Evans, executive director of the Steven C. Agee Economic Research & Policy Institute at the Meinders School of Business at Oklahoma City University.

Oklahoma’s energy sector continues to shape economic projections for the state.

Evans spoke Thursday at the Edmond Economic Development Authority’s 4o’clock 4cast at the W. Roger Webb Forensic Science Institute on the campus of the University of Central Oklahoma.

“There’s a bucket that we’ve relied on when doing economic analysis, which is essentially oil and gas exploration and production,” Evans said. “Well now there’s a whole host of other activities that don’t go in that bucket. They go in a different bucket.”

Natural gas distribution does not go in the mining bucket. It fits in the utilities bucket although it provides energy jobs, he said. Many manufacturing jobs also deal with energy.

“So if you want to get your economic impact of your energy sector, you’ve got to get those refining jobs out of your manufacturing bucket and put them into your energy bucket,” he explained.

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