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Oil and Gas Roundup — April 24

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 3 to 115

Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. declined by 22 this week to 932 amid depressed oil prices. Oklahoma's rig count fell by three to 115.

Houston-based Baker Hughes said Friday 703 rigs were seeking oil and 225 explored for natural gas. Four were listed as miscellaneous. A year ago, 1,861 rigs were active.

Among major oil- and gas-producing states, Texas lost 19 rigs; North Dakota lost five; Oklahoma was down three; and Alaska, New Mexico and West Virginia each lost one.

Louisiana gained two rigs, while Arkansas, California, Colorado, Kansas and Pennsylvania each gained one. Ohio, Utah and Wyoming were unchanged.

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

Bill giving Oklahoma attorney general say in Clean Power Plan response passes House

Oklahoma’s attorney general would get to sign off on the legality of any state plan on upcoming federal carbon dioxide rules for power plants under a bill passed Thursday by the House of Representatives.

An amended Senate Bill 676 passed 68-21 and now goes back to the Senate for approval of the House amendments.

The bill, which was requested by Attorney General Scott Pruitt, would help the state in future legal fights over the Clean Power Plan, said its House sponsor, Rep. Jon Echols, R-Oklahoma City.

The Clean Power Plan, which the Environmental Protection Agency is expected to finalize some time this summer, would require existing power plants to reduce their carbon dioxide emissions 30 percent by 2030.

Under SB 676, the Department of Environmental Quality and staff at the Corporation Commission would come up with a state plan for the yet-to-be finalized Clean Power Plan rules.

The agencies are expected to take into account the rules’ effects on small business, local governments and electricity customers.

Read more from The Oklahoman.

Five facts to know about USGS’s new seismicity report

This week, the U.S. Geological Survey (USGS) released a report identifying the areas of the United States where induced seismicity has been linked to wastewater injection wells. 

Unfortunately, the report strangely loops natural earthquakes in with seismic events that could have been induced by injection activities, and in one notable example, ascribes fault to oil and gas production based upon research that concluded exactly the opposite.

While the report certainly adds to the growing body of literature on the topic, it should be noted that the areas it has identified – and, subsequently, the kinds of activities that may need to change in those areas – have already been incorporated into the public’s understanding. 

The study’s call for collaboration is currently being met as industry, scientists and regulators have been working together to address this important issue through best practices and updated regulations. In a nutshell, what’s outlined in the report is useful, but for the companies and regulators on the ground who are working to address the issue, there is likely very little “new” here.

Here are the five important things to keep in mind while evaluating the new report:

Fact #1: USGS’s report is all inclusive – assumes all seismicity is induced seismicity

Read more at Energy In Depth.

Regulatory hurdles still threaten U.S. shale, CEOs say

Leaders of prominent U.S. shale producers came together on Apr. 21 to drive home what's emerged as a primary theme during this year’s IHS CERAWeek in Houston: The urgent need to lift the export ban on US crude oil.

“It’s time to give the green light to US oil exports,” stated John Hess, chief executive officer of Hess Corp., during an upstream panel discussion alongside two other prominent U.S.-based chief executives.

Hess emphasized that the US already exports high quantities of petroleum products—3.8 million b/d in 2014 according to the US Energy Information Administration—so why not crude?

“Mexico and Canada export crude,” he said. “Why not the US?”
Harold Hamm, chief executive officer of Continental Resources Inc., echoed those sentiments, but thinks “it’s going to take a while to change the mindset of Americans from one of scarcity to that of abundance.” He emphasized educating the public on the benefits of exports.

Hamm lamented President Richard Nixon’s “failed cost control measures of the ‘70s” that brought about current laws that are a hindrance for producers. But he’s encouraged that politicians have been listening, and believes the legislative process to remove the export ban will move forward before yearend.

Read more at  Oil & Gas Journal.

U.S. carbon emissions declining to 20-year low, thanks to shale gas

A Bloomberg New Energy Finance (BNEF ) short-term energy forecast finds that electricity-related carbon emissions are dropping to their lowest levels since 1994.  That’s due in large part to the fact that power plants are likely to burn natural gas at a record rate in 2015.

In fact, on an emissions rate basis, “2015 will be the cleanest year in over 60 years for which we have historical data,” according to the recently released report. The report also states that power generation emissions will fall 15 percent below 2005 levels by 2015.

The bottom line is that as power plants continue to use more and more natural gas, carbon emissions will continue to fall.

The report acknowledges that renewables such as wind and solar will contribute to the latter trend. But it indicates natural gas will remain economically ideal long term thanks to an abundant supply and expected continued low prices. A 14 gigawatt natural gas build is forecast in 2015 and that upward trend is expected to continue.

Read more at Energy In Depth.
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