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Oil and Gas Roundup — Jan. 8

January 08, 2018
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Rig count down 2 in state, 5 nationwide

The number of rigs exploring for oil and natural gas in Oklahoma decreased by two to 118 for the week ending Jan. 5, as the U.S. count fell by five to 924.

The Sooner State’s rig count is up from 86 in January 2017 but down from 136 six months ago.

Canada’s rig count jumped 38 to 174, moving the North American rig count up 33 to 1,098.

Of the other major oil- and natural gas-producing states, Texas was up one to 454, New Mexico gained one to 76, Louisiana fell six to 56, North Dakota was off one to 45, and Pennsylvania (36), Colorado (34) and Ohio (27) were unchanged.

Texas’ Permian Basin stood for 400 of rigs running, up two, with the Cana Woodford (73) and the Eagle Ford (70) standing flat as the top basins.

ONEOK Inc. to build $1.4 billion natural gas pipeline system

ONEOK Inc. on Thursday announced plans to build a $1.4 billion pipeline system to move natural gas liquids from eastern Montana to the Tulsa company's existing facilities near Bushton, Kansas.

The 900-mile Elk Creek Pipeline is expected operational by the end of 2019 and is designed to transport up to 240,000 barrels per day of unfractionated natural gas liquids. The pipeline is projected to cost about $1.2 billion, with related infrastructure costs expected to total about $200 million.

The pipeline will be designed with the ability to expanded to 400,000 barrels per day with additional pump facilities.

The project is part of ONEOK's previously announced, broader effort to invest $3 billion to $3.5 billion in capital-growth projects.

Read Adam Wilmoth’s story at NewsOK.

Anadarko works to phase in natural-gas powered rigs and fracking fleets

Anadarko Petroleum is phasing in natural gas powered drilling rigs and hydraulic fracturing fleets, which are not only more environmentally friendly but easier on the ears ­— a chief complaint of residents living near drilling sites.

"When we saw the benefit on the noise side and then also realized the emissions that we were reducing it was an easy choice to start extending it throughout our drilling and frac fleets," said Anadarko drilling manager, Kris Honas.

In May, Honas said the company "fell into the very first rig" when the only one Precision Drilling had to offer that fit their needs ran on natural gas. It had two gas generators, which Honas said elicited some "growing pains" in getting the rig operating smoothly. Once they worked out the kinks the company has operated with them since.

We "now love the benefits offered by the gas generators," Honas said. The benefits also have not come at the cost of the typical performance and reliability of traditional generators.

As of now, only one of Anadarko's six rigs in the DJ Basin runs completely on natural gas. The majority of rigs are diesel because natural gas has only in the past decade become an economical and dependable fuel. Switching over to 100 percent natural gas rigs and fleets can take time because they must be built from the ground up.

Read more.

Can't please everyone: Trump energy policy riles competing sectors

When the administration of U.S. President Donald Trump proposed new subsidies for coal and nuclear plants, it seemed like an obvious way to deliver on campaign promises to boost the nation’s energy industry.

And yet the plan, announced in September, set off sharp criticism from other sectors that Trump has also vowed to help, such as natural gas and utilities.

“Subsidies don’t make you competitive - and don’t make you great again,” said Robert Flexon, the president and chief executive of Dynegy Inc (DYN.N), a Houston-based utility that owns both coal- and gas-fired power plants.

Squabbling over the proposal exemplifies the administration’s larger struggle to deliver on promises of a sweeping “energy renaissance” across the coal, oil, gas and nuclear industries.

Trouble is, policies that help one of those sectors often hurt another, illustrating the complexity of energy regulation and the difficulty in appeasing competing interests. While election campaigns often seek to neatly divide voters into two camps - those supporting energy vs. those supporting the environment - such rhetoric fails to capture the messier policy impacts on profits, hiring and emissions reductions across the energy landscape.

Read more at Reuters.

Trump proposal would allow oil and gas drilling along most of U.S. coastline

Nearly the entire U.S. coastline - from Alaska to Florida to New England - would be opened to offshore drilling under a proposal by the Trump administration, a dramatic shift from previous administrations that limited offshore oil and gas production primarily to the Gulf of Mexico.

Interior Secretary Ryan Zinke said Thursday that up to 90 percent of the Outer Continental Shelf, which begins roughly three miles off the U.S. mainland, is under consideration for oil and gas lease sales beginning next year and extending through 2024. That includes almost the entire Pacific and Atlantic coastlines, as well as the Eastern Gulf of Mexico.

"This is the largest number of lease sales ever proposed," Zinke said. "If you look at the last eight years the opportunity to generate revenue through responsible energy development took a backseat to, in many cases, special interest groups."

The move marks a victory for the offshore oil and gas industry, largely centered in Houston, which has lobbied for years to drill in the Atlantic and Arctic Oceans.

Most of the world's biggest oil companies, including Exxon Mobil, Chevron and Royal Dutch Shell, have a major presence in Houston, as do firms specializing in offshore drilling and services, including TechnipFMC, National Oilwell Varco, McDermott International and Transocean.

Read more from the Houston Chronicle.
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