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Oil and Gas Roundup — Dec. 9

December 09, 2016
TOPICS: In the news
U.S. rig count jumps by 27, Canada by 30

The number of rigs exploring for oil and natural gas in North America jumped by 57 for the week ending Dec. 9, as the U.S. added 27 rigs and Canada 30. Oklahoma’s rig count fell by one to 80.

Nationwide, 498 rigs were exploring for oil (+21) and 125 for natural gas (+6).

Of the other major oil- and gas-producing states, Texas gained 17 to 303, Louisiana lost one to 47, North Dakota and New Mexico gained one apiece to 32 and 30, respectively, Colorado jumped six to 26, Wyoming was up three to 20 and Ohio was flat at 18.

Oklahoma regulators looking at new earthquake protocols for energy companies

Oklahoma regulators for the first time are expected to release industry guidelines soon on the small number of earthquakes possibly linked to hydraulic fracturing, a departure from their recent focus on the connections to wastewater disposal wells used in oil and gas development.

The hydraulic fracturing plan is expected to be released along with tougher, new directives on wastewater disposal wells linked to seismic activity near Cushing and Pawnee, Corporation Commission spokesman Matt Skinner confirmed to The Oklahoman on Thursday.

Recent earthquakes south and west of the Oklahoma City area prompted scientists and regulators to look again at possible links to hydraulic fracturing. Those areas fall outside two regional wastewater reduction plans for disposal wells unveiled earlier this year by the Oklahoma Corporation Commission.

Four earthquakes ranging from magnitude 3.4 to 3.0 struck south and southwest of Blanchard this summer. In Canadian County, three earthquakes of magnitude 3.3 and 3.1 hit south of Calumet in November. Both areas are in the fast-growing SCOOP and STACK plays.

Read Paul Monies’ story at NewsOK.

The EPA will likely conclude hydraulic fracturing doesn’t affect drinking water

The Environmental Protection Agency may soon dispel one of the green movements favorite myths: That hydraulic fracturing contaminates drinking water.
In the coming days, the EPA will finalize a 2015 report that found no link between fracking and “widespread, systemic impacts on drinking water.” If the agency’s final position hasn’t been co-opted by the environmental movement, as many other recent federal agency findings have, it should lay to rest the concern over fracking and groundwater.
The finding is hardly revolutionary. Years of scientific studies have confirmed the safety of fracking.
The 2015 EPA analysis was an extensive, five-year compilation of nearly 1,000 different data sources—including science and engineering journals, government studies and peer-reviewed EPA reports. Thomas A. Burke, an EPA science adviser, was quoted as calling it the “most complete compilation of scientific data to date.”
A new “study of the study” by Catalyst Environmental Solutions fully confirms the EPA’s findings. After analyzing a wide range of case studies and scientific reports, researchers concluded, “If there was a significant correlation between impaired drinking water resources and hydraulic fracturing, that connection would be manifested in the areas that EPA evaluated.”
In other words, if there were any truth to the claim that fracking contaminates water, the EPA’s study would have found it. Unfortunately, not everyone is happy with that conclusion.

Read more at The Hill.

How natural gas and nuclear have made the U.S. greener – times two

Two-thirds of US states saw their economies grow while they reduced their carbon-dioxide emissions from 2000 to 2014. They did this by relying more on natural gas and nuclear energy for electricity production and less on coal, according to a report published Thursday by the Brookings Institution.

Thirty-three states, primarily in the Northeast and South, as well as the District of Columbia, reduced their carbon emissions while they grew their gross-domestic products (GDP) during those years, a term known as “decoupling.” Many Northeastern states reduced their carbon emissions by increasing the amount of electricity they generate from natural gas, while parts of the South did so, in part, because they rely on nuclear energy.

Several analyses from earlier this year already found dozens of countries decoupled, a feat once thought near impossible because renewable energies were thought to hurt economic growth. In fact, the World Resources Institute (WRI) found in April that the United States is the largest country to experience multiple consecutive years of decoupling. But the study by the Brooking Institution’s Metropolitan Policy Program is the first of its kind to examine this trend state-by-state.

The study also comes as the world’s nations are poised to experience a shift in how they power their economies and lives, although the direction now remains unclear. In addition to 2015 being the first year in a decade with flat global carbon emissions, it also saw the passage of the Paris climate agreement. But President-elect Donald Trump could reverse this momentum. During his campaign, he promised to revive the coal industry, and tear up environmental regulations that he says hurt the economy.

Read more at the Christian Science Monitor.

In mammoth task, BP sends almost 3 million barrels of U.S. oil to Asia

Oil major BP is shipping almost 3 million barrels of U.S. crude to customers across Asia, pioneering a lengthy and complex operation likely to become more popular after OPEC last week announced deep production cuts.

BP's efforts, involving one of the world's longest sea routes, seven tankers and a series of ship-to-ship transfers, underscore a desire among oil traders to develop new routes to sell swelling supplies of cheap U.S. shale oil to Asia, the world's biggest consumer region.

While exports of U.S. crude have been allowed since a 40-year ban was lifted a year ago, the distance, cost and complexity of shipping to Asia has so far kept the flow to a trickle.

Now, using its global shipping and trading network, BP was able to grapple with U.S. port limitations and the need to transfer oil between ships off Malaysia to split cargoes for customers across Asia, according to trade sources and shipping data in Thomson Reuters Eikon.

"Keeping regional price differentials, different tanker rates, and the forward price curve in mind while considering the delivery needs and schedules of your counterparties is not something many oil trading firms can do," said a shipping source in Singapore, who had knowledge of the operations.

"BP is one of perhaps half a dozen firms capable of doing so," he added, speaking on condition of anonymity as he was not authorised to publicly discuss operations.

BP declined to comment.

Read more at Reuters.
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