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Oil and Gas Roundup — Jan. 31

January 31, 2018
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Official: Lack of industry knowledge hampered EPA study on hydraulic fracturing and drinking water

It has been a little more than a year since the US Environmental Protection Agency (EPA) issued the final report of its study on the potential impacts of hydraulic fracturing on drinking water resources, and much of the oil and gas industry remains confounded as to how the agency arrived at its conclusion.

Shari Dunn-Norman, associate professor in the petroleum engineering department at Missouri University of Science & Technology, took the podium this week at SPE’s Hydraulic Fracturing Technology Conference in The Woodlands, Texas, and presented her observations on the findings. She was one of just three members with industry experience who served on a 31-person Scientific Advisory Board panel of “subject matter experts” that reviewed EPA’s work during the study.

Those three members coauthored a subsequent report summarizing the more than 1,000-page study through an industry lens (SPE-189873). Dunn-Norman explained that a number of factors muddied EPA’s study process, namely a lack of oil and gas industry consultation and knowledge, gaps in data, issues with data interpretation, and pre-existing negative perceptions of the completions practice and the industry as a whole, which led to the agency’s ultimate declaration that “activities in the hydraulic fracturing water cycle can impact drinking water resources under some circumstances.”

The final conclusion was a rewording that dramatically changed the meaning of the EPA’s initial conclusion issued in the first draft of its final report, released in June 2015, that said the agency “did not find evidence that these mechanisms have led to widespread, systemic impacts on drinking water resources in the United States,” an assessment that prompted the industry to say, “Yes, of course,” Dunn-Norman said.

Read more at The Society of Petroleum Engineers.

Refinery shutdowns drove record crude oil exports after Harvey

The shutdown or slowdown of many Gulf Coast refineries after Hurricane Harvey drove U.S. crude oil exports to record levels in September and October as inventories mounted and export facilities came back online, according to the U.S. Energy Administration.

In August and September, gross inputs to refineries in the Gulf Coast region fell 13 percent to 1.1 million barrels per day. Regional crude oil inventories increased by 6.9 million barrels during the same period.

As export facilities came back online in September, shipments reached a then-record high of 1.5 million barrels per day. In October, when refinery runs returned to pre-Harvey levels, exports set a new monthly record at 1.7 million barrels per day.

Asia accounted for much of the increase. Exports to that region averaged 312,000 barrels per day during the first eight months of 2017, but in September and October, they more than doubled to 636,000 barrels a day.

The administration noted that both exports and Gulf Coast refinery inputs remained relatively high throughout the remainder of the year, driving inventories down.

— Houston Chronicle

Crude slips amid biggest U.S. inventory expansion in 10 months

Crude fell as U.S. oil stockpiles reversed a record string of withdrawals and expanded the most in almost a year.

Futures slid in New York after the Energy Information Administration said American crude in storage tanks and terminals jumped by 6.78 million barrels last week, more than seven times the average increase expected by analysts in a Bloomberg survey. Domestic oil production rose to yet another record.

West Texas Intermediate for March delivery fell 23 cents to $64.27 a barrel at 10:37 a.m. on the New York Mercantile Exchange. Brent for March settlement, which expires Wednesday, dropped 17 cents to $68.85 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $4.58 to WTI. The more-active April contract slipped 9 cents to $68.43.

 — Bloomberg News.

‘Keep It In the Ground’ will try to stop losing ground in 2018 with same old failed strategy

Climate activist Bill McKibben might have summed up the past year for the “Keep It In the Ground” movement best when he recently said, “2017 was tough — we resisted, but we lost a lot of ground.”

For once, we couldn’t agree more with Mr. McKibben!

While the U.S. oil and natural gas industry enjoyed one of its best all-around years, 2017 started bad and just got worse for the KIITG movement. Following a devastating November 2016 election, the movement’s increasingly extreme —and downright scary — tactics made more headlines than anything that could be even remotely considered a tangible victory.

But McKibben et al. now insist “the wound-licking will be over,” as they will attempt a reboot starting with an event dubbed “Fossil Free Fast: The Climate Resistance” Wednesday in Washington D.C. McKibben, Sen. Bernie Sanders and “an all-star lineup” have said they plan to lay out a “clear call to action and roadmap for resistance” aimed to “unite progressive environmentalists to move us off oil and coal and gas and on to a world that works.”

“The resistance” will be televised (nationally livestreamed, to be precise) at more than 100 watch parties across the country thanks largely — sweet irony — to gadgets made from petroleum products and fossil fuel generated electricity.

Read more at Energy In Depth.

Trump: 'We have ended the war on American energy'

President Trump didn't give much of a shout-out to American Energy in his first State of the Union address Tuesday night. Two sentences was all we got: "We have ended the war on American Energy -- and we have ended the war on beautiful clean coal. We are now very proudly, an exporter of energy to the world."

He didn't need to say much. The first year of Trump’s quest for American energy “dominance” proved to be such a humdinger that 2017 will be hard pressed to top. Trump started a year ago by ordering expedited final approvals for the Keystone XL and Dakota Access Pipelines. He withdrew the U.S. from the Paris Climate Accord. And rescinded the Obama Administration’s Clean Power Plan. He scrapped the Waters of America rule, which would have put onerous regulations over the energy and ag industries. He supported opening a sliver of the Alaska National Wildlife Refuge to drilling and directed the Dept. of Interior to end the moratorium on coal leases in Federal lands. Just last week the administration moved to protect the handful of remaining U.S. solar cell manufacturers (most notably Tesla’s SolarCity division) but hurt installers by enacting tariffs on imports of Chinese PV panels.

What’s he got to show for it?

A lot. American oil production is surging, with drillers set to hit a record 10 million barrels per day, surpassing a 1970 record and on par with Russia and Saudi Arabia. Exports of crude oil and petroleum products has exploded 20% in a year to more than 7 million barrels per day. Natural gas production has also hit a record of more than 93 billion cubic feet per day. While wind power has risen to surpass hydropower as America’s biggest renewable power source. It was even a good year for coal miners, who had their best up-year amid a decade of steep market share losses, with no end in sight.

Read more at Forbes.
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