follow us Twitter Facebook
<< Back to News

Oil and Gas Roundup — June 15

June 15, 2017
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Two controversial methane rules stalled in less than 24 hours

In a span of less than 24 hours, the Trump administration this week announced it intends to not only delay the EPA’s methane rule targeting new and modified oil and gas infrastructure for two years, but also indefinitely postpone compliance with key parts of the equally controversial Bureau of Land Management (BLM) methane rule.

The latter news broke Wednesday, while the former announcement came late Tuesday, adding to the 90-day compliance delay on the rule announced by EPA just two weeks ago.

EPA explained it was proposing the two-year delay on its methane rule “to ensure portions of the agency’s 2016 New Source Performance Standards for the oil and natural gas industry do not take effect while the agency works through the reconsideration process.” The EPA also stated in a press release that,

“Under the proposal, sources would not need to comply with these requirements while the stay is in effect. Since issuing the final rule, EPA has received several petitions to reconsider certain aspects of the rule.”

There will now be a 30-day public comment period before decision is finalized.

Not surprisingly, the EPA’s proposal extend its New Source Performance standard delay was criticized by environmental groups that have already sued EPA over its original 90-day delay.

But as EID has highlighted numerous times since the rule was unveiled last year, there is no shortage of evidence that voluntary mitigation measures have significantly reduced oil and natural as system methane emissions, illustrating that the EPA rule is a solution in search of a problem.

Read more at Energy In Depth.

EIA says drillers still falling behind in one vital health metric: proved reserves

The oil industry fell behind for the second year in a row as one of its most vital metrics of long-term health – proved oil reserves – dropped again in 2016, the Energy Department said Monday.

Sixty-eight public companies that produce a quarter of the world's oil saw proved reserves -- the oil they believe they can extract at current crude prices -- fall by a net 8.2 billion barrels last year. All told, global proved liquids reserves declined from around 118 billion barrels in 2014, the year oil prices started falling, to around 100 billion barrels last year.

That drop was partly offset by a handful of new discoveries and expansions of existing projects, which replenished 4.9 billion barrels in reserves. Those companies pumped 8.9 billion barrels of oil and other liquids last year, according to the Energy Information Administration.

The industry's decline in proved reserves isn't likely to be corrected this year. Since the summer of 2014, oil companies have relentlessly cut costs and spending on oil exploration as prices fell, risking a future financial squeeze if they fail to replenish the reserves they've burned through over the past few years.

While smaller oil companies that pump less than 250,000 barrels a day raised capital spending by $2.6 billion in the first quarter, much larger companies cut spending by $10.8 billion compared to the same period last year. The EIA said the largest declines in proved reserves came in Canada, where companies wrote off billions in oil sands assets that were no longer financially viable at low oil prices.

— Houston Chronicle.

BP: U.S. will dominate global LNG markets, natural gas production by 2035

BP released its latest Energy Outlook this week, reaffirming its earlier forecast that the U.S. will be energy self-sufficient by 2023 while continuing to lead the world in natural gas production.

From the report: “We project that the US becomes energy self-sufficient in 2023 and maintains its position as the world’s largest liquids and natural gas producer.”

The BP report also adds to the growing consensus that America will continue emerging as a dominant player in the global liquefied natural gas (LNG) market going forward. Of course, this is all thanks to shale resources being unlocked by hydraulic fracturing (fracking).

The Energy Information Administration’s (EIA) most recent Drilling Productivity Report projects that U.S. shale gas will reach just under 52 billion cubic feet (Bcf) per day in July, an increase of 684 million cubic feet (Mcf) per day from June. This continued growth in shale production is what led to BP’s analysists saying that by 2035 the U.S. will produce a whopping 70 percent of the world’s natural gas supply and account for 25 percent of global output. Total U.S. natural gas production will increase by 55 percent during that time period, according to BP.

In fact, the report finds that by 2020, natural gas will not only be America’s primary fuel source for power generation, but emerge as the country’s top fuel, period. BP projects that by 2023 natural gas will account for 39 percent of U.S. energy consumption, outpacing all other fuels.  This switch to natural gas is being driven not only by an abundance of the resource, but also from the environmental benefits such as lower emissions that switching entails.

For instance, the BP report found that over the last three years, carbon emissions rose at the slowest pace worldwide since the early 1980s.

Read more at Energy In Depth.

Middle East fears prompt call for hydraulic fracturing in U.K.

A dispute in the Middle East which has seen two cargoes of Liquefied Natural Gas diverted from the UK in the last week could mean the area needs gas from fracking, an energy expert has claimed.

But opponents of shale gas drilling say the claims are scaremongering to justify an environmentally damaging industry.

Saudi Arabia, the United Arab Emirates and Egypt have all cut ties with the Gulf state of Qatar, a major supplier of LNG, over concerns that it is funding and supporting terrorism. The ongoing diplomatic row has forced wholesale gas up by 4.5 per cent.

Nick Campbell, energy risk manager at Kirkham-based Inspired Energy, said it could get worse, especially if problems continue into the winter months.

He said: “We saw the issue of reduced LNG last winter, when the Far East purchased global supplies as temperatures dropped.

“If this was to continue into next winter, coupled with issues with Qatari deliveries into the UK, this would help to support winter gas prices at a time when demand is at its highest.”

In 2015 Qatar supplied more than 20 per cent of Britain’s gas imports.

The pro-fracking Lancashire For Shale group said ongoing price volatility could hit householders, businesses and hospitals. It said Blackpool Victoria hospital relied on gas for most of its energy requirements.

A spokesman said: “According to one publicly available annual report, it used 80 GWh (gigawatt hours) of gas in 2012/2013 compared with under 20 GWh of electricity.

Read more.
<< Back to news