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Oil and Gas Roundup — Nov. 20

November 20, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Editorial: Dems committed to Obama's war on energy

The application with the U.S. State Department to build the Keystone XL oil pipeline has now been languishing for six years amid political delays by President Obama. And now that her re-election is in great peril in Louisiana's Dec. 6 Senate runoff election, Sen. Mary Landrieu, D, finally decided it was time to force a Senate vote on the matter.

Good for her, even though it didn't work. Hopefully, her new senator (should she decide to go back and live in Louisiana) will continue the effort next year.
Why is Keystone so important? It is just one pipeline, after all. But it has become something much bigger than that — it is an illustration of Obama's backward energy policy.

Obama was not shy about his green leanings during his 2008 campaign. He promised policies that he acknowledged would put the coal industry out of business. His EPA rose to the challenge both in substance and rhetoric — especially noteworthy was his appointees' loose talk of wiping out coal towns and “crucifying” coal producers.

But coal is just one variable in the equation from which Obama has worked to subtract. Oil and gas permitting on federal lands has plunged on his watch, with oil production down 16 percent between 2010 and 2013, and natural gas down 24 percent during the same period. The current oil and gas boom on private and state lands has occurred in spite of Obama, not because of him.

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House passes bill to limit EPA 'secret science'

The House on Wednesday passed legislation to prevent the Environmental Protection Agency from issuing new regulations unless it provides the scientific data to justify them.

Passage of the measure, H.R. 4012, fell largely along party lines with a vote of 237-190.

The bill is part of the House GOP's package of legislation on the floor this week to limit the EPA's regulatory powers. On Tuesday, the House passed a measure to reform the EPA's Scientific Advisory Board.

Republicans said the measure would enhance transparency at the EPA.

"Costly environmental regulations should only be based on data that is available to independent scientists and the public," said House Science, Space and Technology Committee Chairman Lamar Smith (R-Texas).

But Democrats said imposing such a requirement could force the EPA to release confidential patient information used in scientific studies, a violation of federal law.

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Article: Halliburton-Baker Hughes merger won't cause higher drilling costs

Low oil prices that threaten producers' profits may be a boon in one way, as they force service companies to keep prices low for the drill bits, cement and piping for oil extraction, even if two of the largest providers of such products merge.

Halliburton Co, said on Monday it will buy Baker Hughes Inc, in a $35 billion deal that would create an oilfield services company to take on global oil services leader Schlumberger NV.

Some experts have raised concerns that the deal, which would merge the world's second- and third-largest service companies, will reduce competition and potentially raise the price of materials vital for drilling.

The United States is home to half of Baker Hughes' and Halliburton's existing operations, according to company filings. Together they would dominate some key and costly parts of the oil production supply chain, overtaking Schlumberger in areas including well cementing and hydraulic fracturing.

But a 30 percent dip in oil prices since June, fueled by record high supply, may prevent the new company from raising prices in U.S. shale formations, giving breathing room for oil companies considering cost-cutting next year.

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EPA finalizes methane emissions control rule, proposes another

The US Environmental Protection Agency issued a final regulation aimed at improving the clarity and consistency of oil and gas data submitted to its greenhouse-gas reporting program (GHGRP). It also proposed a rule that would add emissions reporting for sources that the program does not cover currently to its Subpart W.

The final rule, which EPA proposed on Mar. 10, was designed to make corrections to and clarify existing regulatory requirements, the agency said Nov. 13. It will become effective on Jan. 1, 2015.

An EPA spokeswoman said the proposed rule reflects the oil and gas industry’s rapid growth and changes. It would require new data to be reported for onshore gathering and boosting activities, onshore gas transmission pipelines, and completions and workovers of oil wells which are hydraulically fractured, she said on Nov. 16 in response to an OGJ inquiry.

“By increasing access to GHGRP’s oil and gas systems data, we can increase the understanding of sources in the industry for which the public previously had little information,” the spokeswoman said. “These revisions will further enhance the quality of the data and allow the GHGRP to continue to serve as an important tool for the agency and the public to understand emissions from this sector.”

Comments will be accepted for 60 days following the proposal’s publication in the Federal Register. EPA anticipates that a final version would take effect on Jan. 1, 2016.

Officials from several oil and gas trade associations said the industry has made progress already to curb methane emissions. “We continue to see concern raised about it,” America’s Natural Gas Alliance Pres. Martin J. Durbin said on Nov. 17. “There’s some good news about methane not only on the production side, but across the entire system. Emissions are being reduced not just in production, but in transmission, storage, and distribution. There are enormous improvements across the industry.”

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Three men indicted in Eagle Ford oil theft scheme

Federal authorities have arrested three South Texas men who have been charged with stealing approximately $1.5 million worth of oil from two companies operating in the Eagle Ford Shale, according to an announcement by United States Attorney Robert Pitman.

A federal grand jury indicted Victor Manuel Guerra Jr., 37, of Laredo; Juan Martin Bernal, 49, of Eagle Pass; and Carlos Samuel Pena, 25, of Del Rio on multiple counts of theft of oil from interstate shipment, wire fraud and money laundering. The indictment alleges that between January 2011 and August 2014 the defendants took part in a scheme that used a wastewater removal truck to pilfer oil from Newfield Exploration Co. and Anadarko Petroleum Corp. The stolen oil was then sold via wire transfer to third-party buyers.

If convicted, the theft and money laundering counts are punishable by imprisonment up to 10 years and a fine of $250,000 and the wire fraud counts are punishable by imprisonment up to 20 years and a fine of $250,000.

"While the theft the defendants allegedly engaged in resulted in significant losses for two publicly traded companies, this type of criminal activity often harms the American public as well by hindering the creation of new jobs, raising prices for consumers, and depriving communities of tax revenue needed to fund infrastructure and other vital projects," said Christopher Combs, Special Agent in Charge of the San Antonio Division of the FBI.

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