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Oil and Gas Roundup — Dec. 31

December 31, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Oklahoma gains four rigs as national count falls

Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. fell by 35 last week to 1,840.

The Houston firm said Monday in its weekly report that 1,499 rigs were exploring for oil and 340 for gas. One was listed as miscellaneous. A year ago 1,757 rigs were active.

Of the major oil- and gas-producing states, Oklahoma gained four rigs, Ohio rose by two and Louisiana and Colorado were up one each.

California dropped by 17, Texas lost 16 and North Dakota and West Virginia were down three apiece. Alaska, Kansas, New Mexico, Pennsylvania and Wyoming each fell by one. Arkansas and Utah were unchanged.

The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

Is the liquid gas market set to explode or fizzle?

North America's oil and natural gas boom is expected to continue well into 2015, and for years beyond that.

It's gotten to the point where so much natural gas is being produced that oil and gas companies drilling in Texas' Eagle Ford Shale field have been forced to burn off billions of cubic feet of natural gas over the past several years, due to a lack of pipelines to transport it to markets.

Natural gas usage, and especially liquefied natural gas, has grown internationally as a cleaner and cost-effective alternative to coal and oil.

A report by the professional services firm EY — formerly known as Ernst & Young — says overall global demand for natural gas has grown by around 2.7 percent since 2000, but global demand for LNG has risen by an estimated 7.6 percent during that same period — and by 2030, it could be nearly double the 2012 level of around 250 metric tons.

Some industry observers say the U.S. could soon become a major exporter of LNG. But there are also concerns the LNG market is starting to flat-line in terms of production, and at least one energy sector analyst expects the global gas market to contract by decade's end.

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Portman's energy bill has brighter future

WASHINGTON, D.C. – It was one of the best-liked bills of the 113th Congress: a bipartisan proposal to boost energy efficiency, supported by business and environmental groups alike.

It didn't have a whiff of controversy or contention. And yet it was stalled, stymied and stopped at every turn.

Its chief sponsor, Sen. Rob Portman, R-Ohio, says the bill's fate will improve come January, when the 114th Congress convenes and the new Republican majority takes over the Senate. The implications could be significant, particularly in Ohio, where manufacturers and consumers stand to benefit – or lose out — depending on the outcome.

"Ohio will benefit directly," Portman said before the Senate first took up the legislation last year, noting that it is designed to cut energy consumption by manufacturers and other industrial businesses that form the backbone of the Buckeye State's economy.

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Opinoin: New York's HF ban reveals energy hypocrisy

When I visit New York City, I often get a headache from the pollution. I notice that the governor hasn't banned the use of cars. In fact, of all the things that cause pollution in New York State, Gov. Andrew Cuomo last week chose to ban hydraulic fracturing, the process used to extract oil and natural gas from shale rock deep in the earth.

The decision came after a six-year moratorium on fracking in the Marcellus Shale formation upstate. New York officials decided that fracking could contaminate the air and water and pose a threat to public health.

First of all, it's important to understand that Cuomo has not banned fracking as he claims. Instead, he's banned all oil and gas drilling activity in the state. In a report used to justify the ban, state health officials fretted over fracking's purported dangers, but never distinguished how fracking differs from conventional drilling in terms of its environmental impact.

The report mentions water contamination and surface spills. In fact, the water contamination that has occurred at fracking projects in other states has been the result of poor wastewater disposal or failed well casings – the tubes that are designed to project the water table as the drill bit passes through. These aren’t problems unique to fracking, and most states in which drilling is common already have regulations to address them.

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Senate panel sets hearing on Keystone XL

The Senate Energy and Natural Resources Committee will hold a hearing on the contentious Keystone XL oil pipeline next week.

The hearing, announced Tuesday, will be the first one held by new Chairwoman Lisa Murkowski (R-Alaska).

Notice of the hearing comes as Republicans are gearing up to take control of the Senate.

Before the end of the 113th Congress, incoming Senate Majority Leader Mitch McConnell (R-Ky.) said legislation approving the $8 billion oil sands project would be the first item brought to the floor by the GOP in January.

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