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Oil and Gas Roundup — April 20

April 09, 2015
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

State rig count down 6 to 118

The number of rigs exploring for oil and natural gas in Oklahoma fell by six to 118 this week, according to Baker Hughes. There were 187 active rigs at this time in 2014.

The nationwide rig count declined by 34 this week to 954 amid depressed oil prices.

The Houston-based company said Friday 734 rigs were seeking oil and 217 explored for natural gas. Three were listed as miscellaneous. A year ago, 1,831 rigs were active.

Among major oil- and gas-producing states, Texas was down by 15 rigs; North Dakota lost five; Wyoming was down four; and California, Kansas and Pennsylvania each dropped two. Alaska, Arkansas, Ohio and Utah declined by one each.

Louisiana rose by 5 while New Mexico gained two. Colorado and West Virginia were unchanged.

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

Leading anti-HF professor: Our studies are ‘a form of advocacy’

A recent Center of the American West’s FrackingSENSE presentation featured a wide-ranging discussion that appeared to leave little question as to the motivations and celebrity influence used by a researcher known for his political activism against shale development.

The presentation, by Cornell University professor Anthony Ingraffea, was billed  as a conversation on “the opportunities, challenges, rewards, and burdens presented to university-based academics who enter into the conflict-rich terrain of unconventional oil and gas development.”

The conversation was striking in that Ingraffea dropped any pretense of being a nonbiased academic researcher. Because he is an advocate against shale development, Ingraffea acknowledged he brings a bias into his research.

"… I’d be lying if I told you I went into every one of those with an entirely objective, blank opinion …" he said.

Ingraffea’s admission of using studies to advocate against shale development comes as additional questions are being raised about the research used to justify a ban on fracking in New York. At least one of the prominent studies cited in the New York decision was authored and peer-reviewed by anti-fracking activists, who failed to disclose their affiliations, violating a number of scientific codes of conduct.

Read more at Energy In Depth.

NGV fleet expansions continue on multiple fronts

Fleets of all sizes are expanding their use of natural gas as a transportation fuel, led by United Parcel Service (UPS). The company plans to add 1,400 compressed natural gas (CNG) trucks and 12 fueling stations to its operations.

UPS is planning a nearly 30% boost in its already precedent-setting fleet of more than 5,000 alternative fuel and advanced technology vehicles. It will add up to 800 mostly Kenworth tractor trucks and 600 Freightliner (Morgan Olson custom chassis) package cars during the next year, all operating on CNG.

To support the expansion, UPS said it will add a dozen CNG fueling stations and upgrade three existing stations. TruStar Energy has been tapped to build the stations. Agility Fuel Systems and Quantum Technologies will be the major suppliers of CNG cylinder assemblies for the vehicles.

UPS plans to deploy the CNG vehicles in 15 cities -- Atlanta; Charleston, SC; Dallas; Denver; New Orleans; Oklahoma City; Doraville, GA; Lenexa, KS; Lexington, KY; Montgomery, AL; New Stanton, PA; Port Allen, LA; Shreveport, LA; and Richmond and Roanoke, VA.

Currently, the global operator has eight CNG fueling stations in four states (California, Colorado, Georgia and Oklahoma) and three countries overseas (Germany, the Netherlands and Thailand).

Read more at Natural Gas Intel.

Natural gas industry asks feds to put LNG projects on fast track

The U.S. should speed up its approval process for new liquefied gas export terminals if it wants to remain competitive against other countries eagerly preparing to supply the world with gas, a natural gas trade association argued Thursday.

America’s Natural Gas Alliance on Tuesday called on the federal government to revamp its lengthy and expensive permitting process for projects aimed at exporting supercooled gas to foreign markets, arguing that such exports are in the country’s national interest.

“The time is now for the U.S. to seize the day,” alliance President and CEO Marty Durbin said in a conference call with reporters.

The Department of Energy should issue blanket approval to all companies wanting to ship LNG to countries with which the U.S. does not have free trade agreements, rather than requiring each of those projects to undergo their own permitting process, Durbin said. The department should be able to make that change without congressional approval, alliance economist Erica Bowman said.

Projects would still need to get approval from the Federal Energy Regulatory Commission before they could start construction. That process alone can take up to two years and cost up to $100 million, which ensures that the projects receiving federal clearance are committed to moving forward, Durbin said.

After the shale boom unleashed a flood of cheap natural gas in the United States, companies scrambled to figure out ways to ship some of the abundant supply to overseas markets where it can command higher prices. More than 30 LNG export terminals have been proposed, although analysts doubt all will be built, particularly now that global oil prices have collapsed, making U.S. gas a less attractive commodity than it was a year ago.

Read more at FuelFix.

U.S. crude output rose to 42-year high in March

The U.S. pumped crude last month at the fastest pace since February 1973, sending March inventories to the highest level in 85 years.

Crude output climbed 13 percent from a year earlier to 9.32 million barrels a day in March, the American Petroleum Institute said in a monthly report Thursday. Production of natural gas liquids, a byproduct of gas drilling, climbed 9.1 percent to 3.05 million, a record for March. The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S.

“Production of both crude oil and natural gas liquids last month remained at the highest levels in decades even as rig counts reached a five-year low,” John Felmy, chief economist at the API in Washington, said in an e-mailed statement.

Drillers in the U.S. cut the number of active rigs seeking oil last week to the fewest since 2010, according to Baker Hughes Inc. The number of rigs drilling for oil dropped to 760, a decline of 52 percent over 18 weeks, the oilfield services company said April 10 on its website.

Crude stockpiles rose 22 percent from last year to end March at 468.7 million barrels, the highest for the month since 1930. Gasoline supplies climbed 4.9 percent from a year earlier to 231.8 million barrels, the most for the month since 1988.

Read more at Bloomberg.
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