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Oil and Gas Roundup — June 8

June 08, 2016
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Report: U.S. now ranks fourth in energy security

The United States now ranks fourth in energy security out of the 25 biggest energy-consuming countries, according to a report released Tuesday by the U.S. Chamber of Commerce.

The 2016 International Index of Energy Security Risk showed Norway retained its top ranking, while Ukraine remained the least energy-secure country. The U.S. improved from No. 6 in the previous year’s index, in part because of an increase in oil and natural gas production from shale formation, according to the report, which said crude oil production increased by 3.8 million barrels per day from late 2011 to 2015.

“In this era of an increasingly extreme ‘keep it in the ground’ movement, it is important to recognize that the shale revolution has made America almost 25 percent more secure than it was in 1980, reducing our risks across a variety of metrics,” Karen Harbert, president and chief executive of the Chamber’s Institute for 21st Century, said in a statement. “It’s vitally important that we don’t squander our energy advantage through bad policy choices.”

— Morning Consult.

U.S. oil deficit hits 17-year low as prices dip and shale flows

Last week’s tepid jobs report may have dominated financial headlines in the U.S., but the oil market quietly had some better news for the American economy.

The U.S. petroleum trade deficit, the gap between the value of imports and exports, shrank to a seasonally adjusted $3.13 billion in April, the Census Bureau said on June 3. That left the shortfall at its smallest since 1999.

Much of that reduction can be traced to falling oil prices: Although the U.S. is actually importing slightly more oil by volume than it was at this time last year, it’s coming in at lower prices because the global benchmark has fallen more than 50 percent from its June 2014 peak.

But part of that shrinking deficit can also be traced to the U.S. shale boom, even if production has started to ease lower this year.

All that cheap American crude and natural gas has helped U.S. refiners ramp up exports of gasoline and other refined products, cutting into the deficit and turning the U.S. into the world’s biggest fuel exporter.

Read more at Bloomberg News.

Federal pipe safety proposal too complex to be practicable, industry says

The natural gas industry is concerned that a sweeping gas pipeline safety regulatory proposal is too complex and may take years to refine before it can be finalized.

"This is probably one of the largest, if not the largest, rulemaking the gas industry has ever looked at," Christina Sames, the American Gas Association's vice president of operations and engineering, said June 2 at a meeting of the U.S. Pipeline and Hazardous Materials Safety Administration's advisory committees.

Andy Drake, Spectra Energy Corp's vice president of asset integrity, said the language in the gas transmission safety proposal encompasses too much of the sector, and he expressed doubts about whether the PHMSA would be able to get the lengthy proposed rule into actionable form within a reasonable timeline.

Many facets of the proposed rulemaking, issued March 17, originate from congressional mandates imposed more than four years ago and National Transportation Safety Board recommendations stemming from major accidents, such as the 2010 San Bruno, Calif., pipeline explosion.

"We're trying to solve every possible problem, and we're not looking at: 'What are the biggest issues we're facing?'" said Drake, who serves on PHMSA's gas pipeline advisory committee. "The requirements become so burdensome and prescriptive and onerous that the rule actually comes close to impossible."

Read more at SNL Financial.

New report underscores importance of oil and natural gas jobs in alleviating poverty

A new report from Speaker Paul Ryan’s Task Force on Poverty, Opportunity and Upward Mobility, underscores the importance of America’s energy industry in creating the types of jobs that are critical to alleviating poverty across the nation.

The report outlines a series of policy recommendations with an emphasis on job training and workforce development in career fields that are in demand. From the report:

“In the modern economy, careers in innovative and in-demand fields are opening up to professionals with the right skill sets, and for many, career and technical education (CTE) is the stepping stone to opportunity and success. By empowering young Americans with the job skills necessary to become independent and productive citizens, we can reduce the number of American’s trapped by our failed welfare system in the future.”

As the American Petroleum Institute (API) highlights in a press release lauding the recommendations, research shows that many of the in-demand jobs in the coming decades will be in oil and natural gas development. From API Executive Vice President Louis Finkel:

“Pro-energy policy is the best starting point for any plan to reduce poverty in America and turn our still-struggling economy around,” said Finkel. “With average salaries $50,000 higher than other industries and job opportunities across a range of skills and education levels, the oil and natural gas industry offers obvious solutions to disappointing job growth and wage stagnation.

Read more at Energy In Depth.
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