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Oil and Gas Roundup — August 5

August 05, 2016
TOPICS: In the news
A rundown of oil and natural gas industry news from around the state, nation and world:

Oklahoma, U.S. rig counts both climb

The number of rigs exploring for oil and natural gas in Oklahoma increased by one this week to 614, according to information from Baker Hughes.

The national rig count also increased by one, to 464, with 443 on land and 21 offshore or in inland waters. The land rig count was up three.

A year ago, 107 rigs were active in Oklahoma and 884 in the U.S.

Of the other major oil- and gas-producing states, Texas was up three to 217, Louisiana lost four to 42, New Mexico was up two to 30, North Dakota gained one to 28, and Colorado was off one to 20.

The Permian remains the nation's most active basin by far, with 177 active rigs. The Eagle Ford follows with 37, the Cana Woodford with 29 and the Williston with 28.

Lawsuit on drilling waste draws concerns from industry, regulators

A decades-old exemption for drilling waste from a federal law is being challenged by environmental groups, with the issue drawing concerns from the energy industry and state regulators.

A coalition of seven environmental groups sued the Environmental Protection Agency in May, claiming the agency failed to issue nonhazardous drilling waste regulations and then didn't revise them regularly.

The case is still in the early stages, but some regulators and industry representatives worry about a ruling against the EPA or the possibility of new regulations.

Attorneys and staff at the Oklahoma Corporation Commission heard an update Tuesday on the federal case by a group of attorneys from the Crowe & Dunlevy law firm. The presentation was part of "desk week" at the agency. That's when the commission's court system and related departments work on planning and other matters such as required continuing legal education.

After a review, EPA decided in 1988 that classifying drilling wastes as hazardous under the Resource Conservation and Recovery Act was unwarranted because existing state and federal programs were adequate.

Read The Oklahoman story.

Is Trump flip-flopping on HF?

Donald Trump’s latest remarks that local communities should be able to ban fracking have raised eyebrows in the oil industry, straying from the Republican energy strategy and pitching oil groups against the Republican presidential nominee.

In an interview with a Colorado television station on Friday, Trump said “I’m in favor of fracking,” but added “I think that voters should have a big say in it.”

These comments have baffled representatives in the oil industry, who have not been overly enthusiastic in supporting Trump up until now.

Yet, many in the oil and gas industry still believe that Trump is a better candidate than Hillary Clinton. The American Energy Alliance pro-drilling group, for example, has endorsed Trump for president.

Now, some observers say, Trump has expressed views on fracking that are similar to those of Clinton.

Back in March, Clinton said during a Democratic presidential debate that she would not back fracking in municipalities and states that do not support it. However, a ban on fracking has not been included in the Democratic Party’s platform.


EIA: U.S. crude-oil shipments by rail on decline

Movements of crude oil by rail in the US averaged 443,000 b/d in the first 5 months of 2016, down 45% from the same period last year, according to the US Energy Information Administration’s energy-by-rail data methodology report. Fewer shipments of crude oil by rail from the Midwest (PADD 2) to the East Coast (PADD 1) account for about half of the decline.

The decrease in crude oil shipments by rail since last summer has been mainly attributable to narrowing price differences between US and imported crude oil, the opening of crude-oil pipelines, and declining production in the Midwest and Gulf Coast onshore regions.

“The economics of crude-by-rail transportation depend largely on the relationship between the prices of domestic and international crude oils. Domestic crude oils priced in the Midwest and West Texas are no longer heavily discounted relative to imported crude oils priced in the North Sea. The narrower the spread between domestic and imported crude oils, the more likely coastal refiners will choose to run imported crudes rather than domestic supplies shipped by rail,” EIA said.

Crude oil carried by rail from the Midwest to the East Coast remains the country’s largest crude-by-rail movement at 176,000 b/d, or 45% of the total crude oil moved by rail in the US in May. Crude oil imports processed by East Coast refineries have generally increased since early 2015, averaging 760,000 b/d in May, up from 666,000 b/d in May 2015.

— Oil & Gas Journal.
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