May 24, 2013
U.S. Oil Markets More Attractive than Canada’s
Shale oil plays in the United States may be more attractive to investors than oil sands in Canada’s Alberta province, a financial analyst said.
Canadian crude oil prices are lower than other benchmarks in part because deliveries are limited by a lack of pipeline access.
Oppenheimer & Co. analyst Fadel Gheit told Bloomberg News U.S. shale oil markets were more attractive because of Canadian market issues.
"The oil sands is languishing right now because they’re really in direct competition with the shale plays in the United States,” he said.
Al Monaco, chief executive officer at Canadian pipeline company Enbridge, told Bloomberg this week pipelines are an integral part of the Canadian economy.
"When you really get down to it, Canada is an export-driven resource economy,” he said.
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Today's Links
U.S. Chemical Investment Breakdown Proves Gulf Coast is Still King
Tow Vessel Fuel Problems Preceded Shell Grounding
U.S. Braces for ‘Active’ Hurricane Season
Here Come The Millennials: Good For Energy Demand?
Earl’s Pearl of the Day: "The key is to keep company only with people who uplift you, whose presence calls forth your best.” — Epictetus
May 23, 2013
Tony Blair: Oil Boom Can Ease West’s Dependency on Middle East
The world is increasingly interdependent, making it difficult for any nation to prosper in isolation, former British Prime Minister Tony Blair told a Houston audience Wednesday.
In a luncheon keynote speech at KPMG’s Global Energy Conference, Blair said European nations, like the United States, are uneasy with their reliance on oil and gas from the Middle East, and said the boom in production from shale may ease some of the need for energy from that often tumultuous region.
In discussing energy issues, he said the pace of China’s energy technology development will be key to meeting its growing demand, but expressed optimism that the world’s most populous nation will have a benign economic and political evolution.
He described the U.S.-China relationship as "a defining issue for the United States.”
Blair had other advice for Britain’s ally across the Atlantic. "Give up on wanting to be loved for being the world’s super power,” he said, but understand "people around the world look to the United States as a beacon of hope.
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Today's Links
New U.S. Energy Chief Is Cautious on Gas Exports
Keystone XL’s Southern Leg Nears Completion
House Votes to Override Obama on Keystone
Virginia Officials Try Again for Offshore Energy
Earl’s Pearl of the Day: "Personality can open doors, but only character can keep them open.” —Elmer G. Letterman
May 22, 2013
Feds Float 2-month Timeline for New LNG Export Approvals
A top Energy Department official hinted Tuesday the Obama Administration could issue licenses to export natural gas every two months, while acknowledging pressure to speed up the review process for projects with firm contracts and solid financing deals.
The comments by Christopher Smith, the acting assistant secretary for fossil energy, shed new light on how the administration might scrutinize 19 pending applications to export natural gas to countries that do not have free trade agreements with the United States.
So far, the Energy Department has blessed two such projects — Cheniere Energy’s Sabine Pass terminal in western Louisiana, which secured an export license last year, and the Freeport LNG terminal in Quintana Island, granted conditional export approval on Friday.
Energy Secretary Ernest Moniz, who was sworn in on Tuesday, reaffirmed to reporters he plans to review economic data on natural gas exports before the department acts on any of the remaining applications.
Separately, during a Senate Energy and Natural Resources Committee roundtable, Smith said the DOE issued Freeport LNG’s conditional approval roughly two months after a public comment period closed. When Sen. Lisa Murkowski (R-Alaska) questioned if a continual 60 day process is possible, Smith signaled that would be the timeline going forward.
The DOE and FERC both have roles vetting proposed liquefied natural gas export facilities. The DOE is fielding export applications on a first-come, first-served basis, but the department’s initial order gave some preference to companies that already have launched the expensive and separate regulatory process with the commission.
"Essentially, it’s first-in, first-out with priority given to those projects that have initiated that FERC pre-filing process, which is the part of the evaluation where you start spending more serious sums of money,” Smith said. "As we go through this process, some companies will make the argument they should be ahead of other companies because they’ve achieved certain milestones, and I think that’s an argument we understand and we’re sympathetic to.”
But for now, the DOE has not changed the order in which it will review applications. "It would not be out of the realm of the possible to consider different ways of ordering,” he said, "but for now, the policy … is we’ve set an order … and that’s the sequence we’re currently working through.”
Smith’s carefully worded comments could give room for Moniz to make changes and put his imprint on one of the biggest policy debates at the Energy Department.
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Today's Links
Obama Threatens Keystone XL Veto
Five States Help Boost U.S. Oil Production
Companies Pitch in for OKC Relief Efforts
Using Solar Power to Pump Oil
Earl’s Pearl of the Day: "Courage is resistance to fear, mastery of fear — not absence of fear.” — Mark Twain
May 21, 2013
Judge tosses obstruction charge against former BP exec in spill case
A federal judge Monday threw out an obstruction of Congress charge against a former BP executive who had been accused of lying about the amount of oil that was flowing after the 2010 Gulf of Mexico oil spill.
U.S. District Judge Kurt D. Engelhardt handed a major victory to David Rainey of Houston by issuing the 44-page ruling on several pre-trial motions.
Rainey still faces a charge of making false statements to federal investigators, stemming from an interview he gave to prosecutors before he was charged. He faces up to five years in prison on that charge.
In dismissing the obstruction of Congress charge, the judge sided with the defense arguments that the government failed to allege knowledge of a pending congressional investigation and that the law Rainey was charged under does not apply to congressional subcommittee investigations.
"We’re gratified by the court’s thoughtful and well-reasoned opinion,” Rainey attorney Brian Heberlig said in a telephone interview.
Justice Department spokesman Peter Carr said the agency was reviewing the decision and would have no further comment at this time.
Rainey faces an Oct. 15 trial on the remaining charge. He has pleaded not guilty. Prosecutors can appeal the dismissal of the obstruction charge, though it wasn’t immediately clear if they will.
Rainey no longer works for BP. He is now president of exploration for BHP Billiton.
Two BP well-site leaders face manslaughter charges in the Gulf oil spill case, while a former BP engineer faces obstruction of justice charges. BP pleaded guilty to manslaughter, obstruction and other charges and agreed to pay $4.5 billion in criminal fines and Securities and Exchange Commission fines.
The British oil giant owned the undersea well that blew out in the Gulf off Louisiana, triggering an explosion on the Transocean-owned Deepwater Horizon rig that killed 11 men. The resulting oil spill was the worst offshore spill in U.S. history.
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Today's Links
Texas Company Planning Eagle Ford Refinery
PAA to Extend Western Oklahoma Oil Pipeline
Alaska Pushes to Study Arctic Refuge Oil Amid U.S. Reluctance
Oil Fixing Probe Accelerates as EU Asks Traders for Help
Earl’s Pearl of the Day: "Freedom is a possession of inestimable value.” — Cicero
Tonight is the BIC Alliance hospitality event at AFPM! We look forward to seeing you there!
May 20, 2013
Energy Department Approves Natural Gas Export Permit
The Obama Administration has cleared the way for broader natural gas exports by approving a $10 billion facility in Texas, a milestone in the United States’ transition into a major supplier of energy for world markets.
The decision shows how the boom in U.S. natural gas production has caused a 180 degree shift in a key area of energy trade.
Five years ago, many companies built natural gas import terminals, anticipating greater U.S. demand for imported fuel. Now a group of private investors, that includes ConocoPhillips, plans to turn one of those terminals — in Quintana Island, Texas — into an export facility to ship natural gas to Japan and other nations. The project is known as Freeport LNG.
In giving Freeport the green light, the DOE signaled it found the prospective benefits from exporting energy outweighed concerns about possible downsides for the U.S. economy.
Proponents of greater exports, including the oil and gas industry, say exporting inexpensive natural gas will help the U.S. trade balance, help advance the adoption of clean burning fuels around the world and shore up energy poor U.S. allies.
Opponents counter exports may cause domestic prices to rise, hurting consumers and some industries such as chemicals that have benefited from cheap natural gas.
API urged the DOE to approve the remaining applications without delay "so the United States can achieve its full energy and economic potential.”
The DOE said it has given preliminary authorization to the Freeport project to export up to 1.4 billion cubic feet per day of liquefied natural gas. The approval is needed for exports to countries with which the United States doesn’t have a free trade agreement, a category that includes major trading partners in Europe and Asia. The project still requires final approval from the Federal Energy Regulatory Commission.
The Freeport terminal is the second export facility approved by the Obama Administration. Cheniere Energy’s Sabine Pass facility in Louisiana won approval in May 2011 to export LNG to the countries without free trade agreements.
The DOE will next consider the application of a slightly larger export facility in Lake Charles, La. While there are nearly a score of outstanding applications, analysts expect only a handful will be built due to the high cost of gas liquefication facilities.
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Today's Links
Coast Guard to Take Testimony on Shell’s Arctic Grounding
Arctic Nations Adopt Marine Oil Pollution Preparedness Agreement
Could Philadelphia Become ‘Cushing East’?
Texas to Sue BP over Gulf spill
Earl’s Pearl of the Day: "We are what we believe we are.” — C. S. Lewis
Don't Forget to visit the BIC Hospitality Event at AFPM this week! Have a great show to all who are attending!
May 17, 2013
Third U.S. House Committee Approves Keystone XL Pipeline
The House Transportation Committee approved a measure that would allow construction of the Keystone XL pipeline without action by President Barack Obama, the third panel to push the pipeline bill this year.
The bill now goes to the full House after the committee voted 33-24. The Republican-led initiative is largely symbolic. The Democratic-controlled Senate isn’t considering a similar bill and it would be subject to a veto by Obama.
"The administration has had enough time,” said Representative Bill Shuster (PA), the Republican chairman of the House transportation panel. "The studies have been done and this project checks out. It’s time to let this project proceed.”
The House Natural Resources Committee and the Energy and Commerce Committee previously approved the Keystone bill. The measure seeks to bypass the permit process that requires the State Department to review and decide on the pipeline because it crosses an international boundary.
Democrats on the transportation panel said the jobs that would be created by the project would only be temporary and building the pipeline posed risks to the environment. Rep. Nick Rahall (WV), the top Democrat on the panel who said he supported Keystone, opposed the bill because he said it would give Calgary-based TransCanada Corp. the permits it needs for construction, an advantage he said isn’t available to U.S. companies.
TransCanada’s $5.3 billion pipeline, which would carry tar sands oil from Canada to U.S. refineries near the Gulf of Mexico, has been among the most prominent energy fights for the past two years. Obama’s Administration is expected to decide on whether to permit the pipeline to cross the border later this year.
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Today's Links
For U.S. LNG and LPG Exporters, Canal Expansion Adds Market Flexibility
Moniz Formally Approved as U.S. Energy Secretary
Senate Panel Advances Nominee for EPA
New Eagle Ford Rail Park Planned for Bexar County
Earl’s Pearl of the Day: "Believe you can and you’re halfway there.” — Theodore Roosevelt
May 16, 2013
New Pipeline to Triple Gas Imports from United States
The construction of a natural gas pipeline from southern Texas to central Mexico for state-owned oil company Petroleos Mexicanos, or Pemex, will allow gas imports from the United States to triple, to around 3 billion cubic feet per day by 2015 to meet increasing demand by industry for the relatively cheap fuel, a Pemex official said Wednesday.
Alejandro Martinez Sibaja, the director of Pemex’s gas division, said in an interview that Mexican industry is currently hampered by its reliance on more expensive fuels because of the lack of pipeline capacity for natural gas to come across the border.
"The lack of gas means our industries are having to burn fuel oil,” which is currently about three times as expensive as natural gas, Martinez said. "A lot of investment is looking to come to Mexico, so we have to respond by providing natural gas as part of our offer to get these companies to come.”
Click here for more information.Today's Links
Wolverine Terminals to Invest $30 Million in Louisiana Terminals ProjectDrilling Rig Boom in Texas — and Across the United StatesNatural Gas Onshore Eases Hurricane ThreatFormer BP Chief Becomes Interim Chairman for Swiss Firm
Earl’s Pearl of the Day: "We are what we repeatedly do. Excellence, then, is not an act, but a habit.” — Aristotle
May 15, 2013
Gulf of Mexico Growth Increases Need for Storm Evac Planning
The growth in deepwater operations in the Gulf of Mexico has increased the need for emergency transportation facilities that can move workers out of harm’s way in case of a hurricane, a Shell transportation expert said.
Deepwater drilling in the Gulf of Mexico has increased for many of the major operators, according to Patrick Bosman, aviation manager for the Gulf of Mexico for Royal Dutch Shell. Shell has more than 2,500 workers out in the Gulf on any given day, increasing the demand for helicopters in the case of an emergency. Shell’s Perdido installation, for example, is more than 200 miles from the coast, so a round trip helicopter evacuation trip takes several hours.
"It takes about three days to conduct an evacuation and we need those three days,” Bosman said. "We have to prepare for a full-blown evacuation.”
While the threat of an explosion or a cyber attack has received more attention, hurricanes demand more planning because of the resources required, as many platforms need to be evacuated in a short time period, each requiring multiple helicopters.
Companies typically begin evacuating nonessential offshore workers with the first notification of a possible hurricane, as they try to assess the extent of the threat. If the storm progresses, the installation is secured and fully evacuated.
The worst case scenarios involve hurricanes that arrive with little warning, such as 2005’s paralyzing Hurricane Katrina, which found the industry relatively unprepared.
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Today's Links
Kinder Morgan Project Aims to Ease Houston Ship Channel Congestion
EU Oil Manipulation Probe Shines Light on Platts Pricing
Alaska: Cook Inlet Cosmopolitan Well Spudded
Job Market Particularly Strong for Deepwater Pros
Earl’s Pearl of the Day: "Life shrinks or expands in proportion to one’s courage.” — Anais Nin
May 14, 2013
IEA Sees U.S. Oil Shockwaves Ousting OPEC as Supply Driver
The United States shale boom will send "shockwaves” through the global oil trade over the next five years, benefiting the nation’s refiners and displacing Organization of Petroleum Exporting Countries (OPEC) as the driver of supply growth, the International Energy Agency (IEA) said.
North America will provide 40 percent of new supplies to 2018 through the development of light, tight oil and oil sands, while the contribution from OPEC will slip to 30 percent, according to the IEA. The IEA trimmed global fuel demand estimates for the next four years and predicted consumption in emerging economies may overtake developed nations this year.
"The supply shock created by a surge in North American oil production will be as transformative to the market over the next five years as was the rise of Chinese demand over the last 15,” the Paris-based adviser to 28 oil-consuming nations said in its medium-term market report.
The development of U.S. shale resources, enabling the nation’s highest level of energy independence in two decades, is creating a "chain reaction” in the global transportation, processing and storage of oil that may escalate as other countries try to replicate the American oil boom, according to the IEA. Crude futures for settlement in 2018 are trading at a discount to current prices, signaling expectations for increasing supplies and constrained demand.
"The U.S. production comes as a godsend solution for a market where emerging market demand is continuing to increase, while supply in the Middle East and North Africa won’t increase that much,” Bjarne Schieldrop, chief commodity analyst at SEB AB in Oslo, said.
North American production will increase by 3.9 million barrels a day from 2012 to 2018, making up more than half of the non-OPEC gain. Access to these supplies has rescued many U.S. refineries from closure and will secure their place as exporters of gasoline and naphtha, while hurting other operators that aren’t configured to process the new lower-sulfur, low-density crude, the IEA said.
"Tight oils are a very important source of current supplies, and will be for the foreseeable future, but one shouldn’t get carried away,” said Amrita Sen, chief oil market analyst at Energy Aspects Ltd. in London. "If we get a few years of oversupply, prices falls and we will see tight oils output fall.”
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Today's Links
House Bill Aims to Expedite U.S. Gas Pipeline Construction
With Pipelines on Hold, Oil Storage Services Boom
Chesapeake Thinks It Has 342 Million Barrels in Eagle Ford
U.S. Ethylene Cracker Margins Rise on Production Outages, Drop in Feedstock Costs
Earl’s Pearl of the Day: "You cannot shake hands with a clenched fist.” — Indira Gandhi
May 13, 2013
Arctic Oil, Natural Gas Defined as U.S. Priority
Arctic territory off the northern coast of Alaska is a key element of U.S. national and energy security interests, a national plan states.
A U.S. government 13-page national strategy says the arctic off Alaska region has conventional oil and natural gas resources make up about 13 percent of the world’s undiscovered oil and 30 percent of the undiscovered natural gas.
Parts of the region have become more accessible to energy explorers because of warming trends. The national strategy said these "fresh ideas” have led to concerns about uncoordinated development of arctic reserves.
"It is imperative the United States proactively establish national priorities and objectives for the arctic region,” the plan states.
Last year Shell delayed plans for the region following equipment issues and weather delays. ConocoPhillips said it is reluctant to move forward because of regulatory uncertainty.
The strategy said arctic oil and natural gas reserves are included as part of President Barack Obama’s so-called all-of-the-above domestic energy initiative and therefore is part of the nation’s energy security priorities.
"The arctic region’s energy resources factor into a core component of our national security strategy: energy security,” it states.
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Today's Links
Lebanon Has 30 Trillion Cubic Feet of Offshore Gas
U.S. Drilling Rig Count Up 5 Units to 1,769
Drilling Waste Finds New Use
OTC Crowd Reaches 30-Year High
Earl’s Pearl of the Day: "Holding on to anger is like grasping onto a hot coal with the intent of throwing it at someone else. You are the one who gets burned.” — Buddha
May 10, 2013
ExxonMobil to Build $10 Billion U.S. LNG Export Plant with Qatar
ExxonMobil, the largest energy company by market value, signed an agreement with Qatar Petroleum International (QPI) to move forward with construction of a $10 billion natural gas export terminal in Texas.
The project will involve installing liquefaction equipment at an existing import facility in Sabine Pass, Texas. It won permission last year to export the fuel to nations with free trade agreements with the United States and is awaiting approval to send the fuel to all other countries.
Exxon and state-owned Qatar Petroleum plan to ship as much as 15.6 million metric tons of gas annually from the Golden Pass facility. A boom in U.S. production has spurred several proposals to export the fuel, which is cooled to liquid form at -260F to reduce volume and allow for transportation by ship.
"This agreement sets out a highly competitive commercial blueprint for Golden Pass Products, with a commitment that builds on the unique combined strengths of QPI and ExxonMobil through the global downstream LNG value chain,” said Bill Collins, president of Golden Pass.
Exxon has been expanding its worldwide gas portfolio with acquisitions such as the 2010 purchase of XTO Energy in the United States and investments in projects that include the $52 billion Gorgon LNG complex in Australia. Gas accounted for half of Exxon’s global production during the first three months of this year.
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Today's Links
BSEE, Coast Guard Enter Agreement to Improve Offshore Oversight
U.S.-Mexico Collaboration Seen Necessary on Eagle Ford Drilling
Harper to Visit New York in Push for Keystone Approval
California Postpones Oil, Gas Lease Auctions
Earl’s Pearl of the Day: "He who labors diligently need never despair; for all things are accomplished by diligence and labor.” — Menander
May 9, 2013
BP Exec Tells OTC Audience about Lessons Learned in Gulf Spill Response
Even as BP continues to fight litigation that could result in it having to pay billions of dollars more in fines and damages stemming from the 2010 Gulf of Mexico oil spill, a senior company official says the British oil giant has already gone "above and beyond” what the law requires.
Mike Utsler, who is heading BP’s Gulf restoration effort, acknowledged at a luncheon gathering at the Offshore Technology Conference in Houston there is still more work to be done to right the wrong. But, he insisted, BP continues to meet its obligations and commitments.
"We’ve made tremendous progress in the cleaning of those shorelines,” Utsler said.
Utsler also spoke about the lessons learned, the technology advancements that were created and the industry collaboration that was generated following the worst offshore oil spill in U.S. history.
"I don’t believe any of us had a true appreciation of the scale and magnitude we would face in terms of challenges in the area of data management,” Utsler said.
He said the volume of data BP amassed following the disaster was equivalent to roughly half the data and information contained in all the university libraries in the United States.
"Communication from air to sea to land, from office to beach to boat, to deepwater environments, we had to build an infrastructure of communications,” Utsler said. "It was a massive undertaking, but also a major learning experience.”
As a leader in that effort, Utsler said he has faced many challenges, but also has found the work rewarding.
"We faced so many challenges in understanding our stakeholders and managing our stakeholders in a crisis,” he said. "Was it perfect? No. Did it offer growing pains? Yes it did.”
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Today's Links
Shell Moving Forward on Significant Offshore Projects
Deepwater Well Containment Exercise Completed
Offshore Operators Should Focus on Building Safety Barriers
NATO Won’t Up Presence In The Arctic
Earl’s Pearl of the Day: "Waste not fresh tears over old griefs.” — Euripides
May 8, 2013
Exxon Starting Development of $4 Billion Gulf of Mexico Field
ExxonMobil, the largest U.S. oil company, said it will invest more than $4 billion in the development of its Julia oil field in the Gulf of Mexico.
Oil production is expected to start in 2016 from the field, which was discovered in 2007. The resource in place is estimated to be almost 6 billion barrels.
The Julia unit was the subject of a 2011 Exxon lawsuit against the United States over the government’s decision to cancel the offshore leases because Exxon hadn’t proceeded quickly enough with development. The litigation was later settled, allowing the company "to develop this very large, but technically challenging, resource as quickly as possible using a phased approach,” Patrick McGinn, an Exxon spokesman, said in January 2012.
An initial phase of the project is designed for daily output of 34,000 barrels of oil. It will have tie-backs to a production facility operated by Chevron. Exxon and Statoil both have a 50-percent stake in the Julia unit.
"Julia is one of the first large oil discoveries in the ultra-deepwater frontier of the Gulf of Mexico,” Neil Duffin, president of Exxon’s development company, said. "This resource is located more than 30,000 feet below the ocean’s surface. Enhanced technologies will be deployed to ensure the safe and environmentally responsible development of this important energy resource.”
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Today's Links
Enbridge to Add Facilities at Cheecham Terminal for Surmont Phase 2
Shell Gets Rolling on Stones
U.S. to Release Arctic-Specific Drilling Rules Before Year End
U.S. Lowers Forecast for Summer 2013 Gasoline Prices
Earl’s Pearl of the Day: "Success is liking yourself, liking what you do, and liking how you do it.” — Maya Angelou
May 7, 2013
Cheniere LNG Facility Ahead of Schedule
Cheniere Energy said construction is ahead of schedule at its Sabine Pass LNG facility in Louisiana.
Cheniere said its Cameron Parish facility’s first two production units are expected to begin producing LNG in late 2015. About 26 percent of the construction was completed as of March 31.
Two additional units have received the necessary approval from the Federal Energy Regulatory Commission and U.S. Department of Energy. The company is in the process of securing the financing to build those units.
Cheniere originally built multibillion-dollar facilities to import LNG into the United States, but now, due to a glut of North American gas, is converting the existing import terminals to export the fuel.
This is the first project to achieve federal regulatory approval that will allow Cheniere to chill gas to minus 260 degrees Fahrenheit so it can be transported overseas by ship.
Cheniere borrowed $5.9 billion to convert the first two units. Korea Gas Corp., BG Group Plc, Gas Natural SDG SA and Gail India Ltd. have agreed to buy a combined 16 million tons a year from the Sabine Pass terminal.
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Today's Links
Rick Perry to Obama: Give Coastal States More Access & Dollars
U.S. Gas-Export Debate Tips to Geopolitical Edge
Interior Secretary Tours Rig in U.S. Gulf
U.S. House Ways and Means Panel Releases Details of Energy Tax Reform Plans
Earl’s Pearl of the Day: "That which does not kill us makes us stronger.” — Friedrich Nietzsche
May 6, 2013
SEC Warns of Oil and Gas Securities Scams
The U.S. Securities and Exchange Commission (SEC) has cautioned investors over potential frauds involving private securities offerings for oil and gas ventures, a threat that has been on the rise in recent years, according to the agency.
While the alert was not prompted by any single case, the SEC said it is handling an average of more than 20 fraud cases per year related to private oil and gas ventures. In 2006, there were "few” such cases, the alert said.
The SEC identifies several "red flags” in the alert, such as sales pitches referring to recent news events like high oil or gas prices, "can’t miss” wells and "guaranteed” returns, abnormally high rates of return and sales pitches touting new technology, especially if it relates to getting higher production out of low-producing wells.
Investors should look at the industry track record of a company and understand in detail how invested money will be used, the SEC said.
Click here for more information.
Today's Links
Cheniere: LNG Facility Ahead of Schedule
ConocoPhillips and Buccaneer Ink Alaskan Deal
Offshore Operators Seek Clarity on Regulations
Oil Industry On Alert — Active Hurricane Season Forecast
Earl’s Pearl of the Day: "You should not live one way in private, another in public.” — Publilius Syrus
May 3, 2013
For U.S. LNG, LPG Exporters, Canal Expansion Adds
Flexibility
The $5.25 billion Panama Canal expansion project coincides
with the planning and development of infrastructure to export large volumes of
natural gas from the United States. The Panama Canal Authority is taking steps
to capture a share of this emerging source of business by adjusting its
operational plans for the important Central American waterway. Approximately
1,700 miles to the northwest, on the Texas/Louisiana Gulf Coast, two companies
instrumental in selling liquefied natural gas (LNG) and liquefied petroleum gas
(LPG) produced in the United States view the project in Panama as a means of
reaching more customers.
Click here for more information.
Today's Links
Study: Oil, Gas Industry Needs to Step Up Water Management
Oil Drilling Technology Leaps, Clean Energy Lags
Enterprise to Expand Crude Oil Storage, Distribution Serving Southeast Texas
Boise to Invest $111 million in Louisiana Paper Mill Upgrade
Earl’s Pearl of the Day: "Happiness is not something ready made. It comes from your own actions.” — Dalai Lama
May 2, 2013
Phillips 66 to Increase Export Capacity, Refine More North American Crude
U.S. refiner Phillips 66 said it plans to increase its product export capacity by 50,000 bpd to 370,000 bpd by the end of this year and to raise the volume of less expensive North American crude it processes at its U.S. refineries.
Announcing its earnings for first quarter 2013, which more than doubled to $1.4 billion, Phillips partly credited the increased use of "advantaged crudes” in its refineries, which pushed profit margins to $13.94 per barrel in the first quarter.
Phillips is moving this cheaper crude from the Midcontinent and Canada to its refineries on both coasts using rail and barge. It recently took delivery of 400 railcars out of the 2,000 ordered to move primarily Bakken to the East and West coasts.
Over the next 12 months, the company expects to process an additional 150,000 bpd of low-cost North American crude oil.
Phillips 66 also said it exported 150,000 bpd of refined products in the first quarter, a "significant increase” from the same period of 2012.
Projects completed at its Ferndale, San Francisco and Alliance refineries expanded refined product export capability by 35,000 bpd. In total, Phillips 66 has the capacity to export 320,000 bpd from its domestic refineries.
"Through further investment at [our] facilities on the Gulf and West coasts, export capability is expected to increase to 370,000 bpd by the end of 2013,” Phillips 66 CEO Greg Garland said.
Phillips 66 also said it was pursuing the development of a 100,000-bpd capacity NGL fractionator at Old Ocean, Texas, the site of its 247,000-bpd Sweeny refinery.
If approved, construction is expected to begin in the first half of 2014, with start-up anticipated in the second half of 2015.
"Our plans for a new NGL fractionator on the Gulf Coast reinforce our commitment to the American energy landscape and highlight our unique opportunities across the downstream value chain,” Garland said.
Click here for more information.
Today's Links
Enbridge to Build East Texas Cryo Plant
Shale Gas Boom Fuels Rebound in Growth for N. American Smart Grid Equipment
Petrobras Sells Stake in Gulf of Mexico
OTC Looks to Social Media to Expand Attendee Experience
Earl’s Pearl of the Day: "If you wish your merit to be known, acknowledge that of other people.” — Oriental Proverb
May 1, 2013
Bakken Resource Estimate Jumps
The Bakken and Three Forks tight-oil formations in North Dakota and Montana contain more than twice as much recoverable oil than previously thought, according to a new assessment by the U.S. Geological Survey (USGS).
The updated assessment, which also includes reserves in South Dakota, found the formations contain an estimated mean of 7.4 billion barrels of undiscovered, technically recoverable oil.
According to the assessment, the Bakken holds an estimated mean oil resource of 3.65 billion barrels and the Three Forks Formation has an estimated mean resource of 3.73 billion barrels.
That represents a more than twofold increase over the estimated mean of 3.65 billion barrels in the 2008 assessment.
"These world-class formations contain even more energy resource potential than previously understood, which is important information as we continue to reduce our nation’s dependence on foreign sources of oil,” said recently confirmed Interior Secretary Sally Jewell.
Since the 2008 assessment, more than 4000 wells have been drilled in the Williston basin, which has added to federal and industry understanding of the Bakken geology.
The USGS also estimates the formations contain a mean of 6.7 trillion cubic feet of undiscovered, technically recoverable natural gas — a threefold increase over the 2008 estimate.
The USGS considers the Bakken and Three Forks to be the largest continuous oil formation in the lower 48 U.S. states.
Click here for more information.
Today's Links
Judge Orders Some BP Attorney Materials Turned Over in Gulf Oil Spill Case
BSEE Launches Deepwater Oil, Gas Containment Exercise in GOM
Booming North American Oil Supply Boosts U.S. Refiners’ Profits
Saudi Oil Minister Says Saudis Welcome U.S. Production Growth
Earl’s Pearl of the Day: "Good manners will open doors the best education cannot.” — Clarence Thomas
April 30, 2013
Shell Australia Head to Run U.S. Arctic Operations
Royal Dutch Shell is moving its Australian head to run operations in the U.S. Arctic Ocean, a person familiar with the matter says, as the oil major attempts to recover from a series of drilling setbacks in the icy north.
Ann Pickard, who has been overseeing billions of dollars of investments in Australian gas-export projects, would take up a new role in the United States on June 1, the person said.
The reshuffle comes after Shell’s planned summer drilling program in the U.S. Arctic Ocean was cancelled due to severe damage to rigs capable of operating in harsh conditions. It was the second consecutive year the company wasn’t able to drill in the region, having been frustrated before by bad weather and mechanical and regulatory challenges.
Shell’s Arctic drilling plans form an important plank in its efforts to replace falling output elsewhere. They also underscore the difficulty that big energy companies face in finding significant deposits of conventional oil as easy-to-access reserves are depleted and many big discoveries lie in countries less welcoming to foreign investment.
Pickard will succeed David Lawrence who left Shell in March by "mutual consent” in the wake of the setbacks.
The U.S.-born executive is no stranger to tough assignments. She spent five years in Nigeria as a regional vice president for sub-Saharan Africa at a time when Shell’s operating record in the country was under scrutiny due to years of oil spills, while militants often targeted its oil installations such as pipelines. That stint led "FORTUNE” Magazine to call her the "the bravest woman in oil” and one of the 50 most powerful women in business.
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Today's Links
Surge in U.S. Natural Gas Pushes Other Countries to Diversify
U.S. Crude Exports Jump to 13-year High
Alberta Eyes Oil Pipeline to Arctic
Malware Offshore: Danger Lurks Where the Chips Fail
Earl’s Pearl of the Day: "Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment.” — Buddha
April 29, 2013
Bill Would Force Feds to Sell Drilling Leases Off Virginia Coast
The Obama Administration would be forced to sell offshore drilling leases off the coast of Virginia under a bill introduced in the House on Friday.
The measure, sponsored by Virginia Republican Scott Rigell, aims to mandate the reschedule Lease Sale 220, an auction which was first planned for 2011 under President George W. Bush but canceled in the wake of the Deepwater Horizon disaster in 2010.
Rigell’s bill also would force the Interior Department to conduct at least one auction for the region 50 miles off Virginia’s coast during each five-year lease sale program.
The government’s current five-year plan, spanning 2012 to 2017, contains no auctions for Atlantic oil and gas drilling rights, though the Interior Department is on track to allow seismic research in the region. Assistant Interior Secretary Tommy Beaudreau told Congress by helping to define the potential energy resources along the East Coast, those seismic surveys would inform future decisions about leasing in the area.
Although some Virginia leaders have lobbied hard for the auction of nearby offshore tracts, Interior Department officials said the auction ultimately wasn’t included in the 2012-2017 plan because of opposition from other Atlantic Coast states and concerns raised by the Defense Department, which conducts exercises in the region.
Rigell’s bill includes a sweetener for Mid-Atlantic states to go along, by allowing them to cash in on 37.5 percent of royalties paid to the federal government for oil and gas produced on the offshore leases. Similar revenue sharing agreements are already in place for Gulf Coast states, beginning in 2017. And coastal senators Mary Landrieu (D-La.) and Lisa Murkowski (R-Alaska) are leading a push to expand revenue sharing even further.
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Today's Links
TransCanada Pushes Back Proposed Keystone XL In-Service Date
Heavy Louisiana Sweet Strengthens as Brent Spread to WTI Widens
EPA Lowered Estimates of Methane Leaks During Natural Gas Production
Overall Oil, Gas Wages Flat, but Specialty Positions Still Command Top Pay
Earl’s Pearl of the Day: "Always do your best. What you plant now, you will harvest later.” — Og Mandino
April 26, 2013
Methanex to Move Another Methanol Plant to Louisiana
Methanex Corp. has reached a final investment decision to proceed with the relocation of a second 1-million-ton-per-year methanol plant from its Chile site to Geismar, La. The plant is expected to be operational by early 2016 and has an estimated total cost of approximately $550 million.
John Floren, president and CEO of Methanex, commented, "We are excited to move forward with the Geismar II project. We have made excellent progress with our first plant relocation, Geismar I, and that project is proceeding on schedule and on budget. The first shipment of equipment has been loaded and is currently in transit to Louisiana. Methanex will leverage its experience gained from Geismar I to ensure a smooth execution for Geismar II.”
Mr. Floren added, "The global demand outlook for methanol is very favorable and demand is expected to outpace capacity additions in the industry over the next several years. Relocating a second plant to Louisiana allows us to benefit quickly from the competitive natural gas price environment in North America and add additional molecules to our system to supply our customer’s growing requirements for methanol.”
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Today's Links
Transocean Ordered to Turn Over Deepwater Horizon Docs
ConocoPhillips: No New Timeline for Arctic Drilling Program
U.S. Offshore Deaths ‘Seven Times’ Average
Frac Daddy to Represent Oil Field Workers in Kentucky Derby Run
Earl’s Pearl of the Day: "It’s all knowing what to start with. If you start in the right place and follow all the steps, you will get to the right end.” — Elizabeth Moon
April 25, 2013
Western Gulf Lease Sale Set for Aug. 28
Oil and gas companies will have a chance to buy drilling rights on more than 21 million acres in the western Gulf of Mexico during a lease sale in August.
The lease sale will come one year after an auction of similar western Gulf tracts that netted nearly $134 million.
Some 3,953 blocks spanning 21.2 million acres will be up for grabs in the auction, with water depths ranging from 16 to roughly 11,000 feet.
For the first time in years, companies will not be able to take advantage of a federal royalty relief program aimed at gas extracted from deep water tracts purchased in the lease sale, since that provision is set to expire on May 3.
The proposed notice of sale unveiled Wednesday includes details about the possible terms that will govern five-, seven- and 10- year leases purchased in the upcoming auction, as well as the environmental mitigation that energy companies would be required to follow.
Companies will be forced to pay a minimum bonus bid of $25 per acre (or fraction) for acreage in less than 400 meters of water and $100 or more per acre for blocks in deeper territory. Energy produced from the leases would be subject to an 18.75 percent royalty rate plus annual rental fees starting at $7 per acre for the shallowest territory — but increasing to as high as $44 an acre after eight years.
This will be the first sale since former REI CEO Sally Jewell was sworn in as secretary of the interior. In a news release, Jewell described the Gulf of Mexico as "a cornerstone of the United States’ energy portfolio.”
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Today's Links
Japanese Minister to Visit U.S. to Urge LNG Exports
Chesapeake Named No.21 to the Best for Vets Employers
Baucus’ Retirement Could Put Louisiana Democrat in Charge of Energy Panel
Ice Gas: A Step Closer to Commercial Production
Earl’s Pearl of the Day: "There is a sacredness in tears. They are not the mark of weakness, but of power.” — Washington Irving
April 24, 2013
Gulf Heats Up with High Rig Counts and Cutting-Edge Technology
Activity in the Gulf of Mexico is continuing to heat up, with both operators and oil field services companies seeking ways to stake out their share of the market.
The U.S. Gulf of Mexico now has 37 active floating rigs, five more than the pre-Macondo count of 32 rigs, according to a Barclay’s analyst. This number is expected to continue to grow, with 15 additional units scheduled to enter the market, 13 of which are new.
For operators, the cost of these new wells is tied to the time it takes to drill them, and oil field services companies are racing to provide the most efficient results.
Chevron and Halliburton announced Tuesday they have completed three offshore wells in the Gulf of Mexico using new Halliburton technology that shaved 18 days off the well completion time.
The technology, which is designed for work in the ultra-deep waters, stimulates a greater area within the reservoir in a shorter period of time than traditional methods, by reducing the number of trips needed to stimulate the well. It uses a combination of strong pumping power and a special formula of well fluids.
"Having to make multiple runs in and out of the wellbore equates to a large expense for operators,” said Ron Shuman, senior vice president of Halliburton’s Southern and Gulf of Mexico regions. "The ‘single trip’ element of this system provides significant time savings with improved reliability and better asset optimization.”
The incentive to develop these kinds of technology improvements is likely to continue if activity in the Gulf reaches the rate predicted by Barclays — an estimated 52 rigs in 2014 and as many as 60 by 2015.
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Today's Links
Three North Slope Exploratory Tests Find Oil
Anadarko Seeks Dismissal of Investor Suit Over Gulf Spill
Task Force Unveils Oil, Gas Road Safety, Management Recommendations
Critics, Allies Blast Obama Over Keystone Pipeline
Earl’s Pearl of the Day: "Make up your mind to act decidedly and take the consequences. No good is ever done in this world by hesitation.” — Thomas H. Huxley
April 23, 2013
Bill Seeks to Allow Drilling Near U.S. Mexico Maritime Border
A legislative hearing will take place Thursday in Washington D.C. as lawmakers consider a bill that would lift the current moratorium on drilling along the U.S.-Mexico maritime border in the Gulf of Mexico.
H.R. 1613, the Outer Continental Shelf Transboundary Hydrocarbon Agreement Authorization Act, would amend the Outer Continental Shelf Lands Act and implement the terms of the U.S.-Mexico Transboundary Hydrocarbon Reservoirs Agreement. That agreement, signed in February 2012 by then Secretary of State Hillary Clinton and Mexico’s Minister of Foreign Affairs Patricia Espinosa Castellano at the G-20 Summit in Los Cabos, Mexico, would govern development of shared oil and natural gas resources in the U.S. Gulf between the United States and Mexico maritime border.
The agreement lifts the current moratorium on exploration and production along the Western Gap section of the boundary, opening up 1.5 million acres in the Gulf previously off limits due to border issues, and provides a framework for the safe management of oil and gas resources in the boundary area. Leaseholders on the U.S. side of the boundary and Petroleos Mexicanos would be able to explore and exploit a transboundary reservoir as a unit as leaseholders are permitted to do on the U.S. side of the boundary. The agreement also would allow a means of resolving disputes and establish a system of joint inspections.
"This bill is another step toward embracing an all of the above approach to energy that safely develops our natural resources to help achieve North American energy independence,” said Rep. Jeff Duncan (R-S.C.), who co-authored the bill along with House Natural Resources Committee Chairman Doc Hastings (R-Wash.) and House Foreign Affairs Subcommittee on Western Hemisphere Chairman Matt Salmon (R-Ariz.), in a statement. "This bill will help lower energy costs while creating American jobs by safely opening up more areas in the Gulf of Mexico for exploration and production.”
"Approval and implementation of this agreement is unquestionably in the national interests of the United States as a step toward energy security and job creation in the United States, as well as much needed energy reform in Mexico and Western Hemisphere energy independence,” said Salmon in a statement. "We can achieve energy independence and better energy cooperation with our neighbor and this is an important step in that direction.”
The U.S.-Mexico maritime border area could hold up to 172 million barrels of oil and 304 billion cubic feet of natural gas, according to the U.S. Department of the Interior.
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Today's Links
Survey Finds Majority Backs Keystone Pipeline
Irish Spud for ExxonMobil
Chevron’s Big Foot Hull Arrives in Texas
BP Oil Spill Settlement Claims Can Be Paid While BP Appeals Judge’s Decision
Earl’s Pearl of the Day: "Wisdom is knowing what to do next; virtue is doing it.” — David Starr Jordan
April 22, 2013
Halliburton in Settlement Talks to Resolve Gulf Spill Claims
Oil field services firm Halliburton said Monday it has recently entered into settlement discussions and offered cash and stock to resolve a substantial portion of private claims related to the 2010 Gulf of Mexico oil spill. It said the deal it is discussing is in an advanced stage.
"We are working hard to come to a reasonable settlement that will be in the best interest of our shareholders,” CEO Dave Lesar said.
The news came as Halliburton reported an $18 million loss in the first quarter, or 2 cents a share, compared to a profit of $627 million, or 68 cents a share, a year earlier. Gulf operations in the first quarter were impacted by maintenance activity on blowout preventer stacks, executives said. Revenue in the quarter ended March 31 rose to $6.97 billion from $6.87 billion a year earlier.
"With respect to the ongoing Multi-District Litigation trial regarding the Macondo well incident, we have recently participated in court facilitated settlement discussions with the goal of resolving a substantial portion of private claims,” Lesar said.
He added, "Our most recent offer includes both stock and cash, with the cash components payable over an extended period of time.”
The company said the settlement discussions do not cover all possible parties and claims relating to the Macondo incident, and there are additional reasonably possible losses relating to the Macondo incident for which "we cannot reasonably estimate at this time.”
"Putting the issue behind Halliburton would be a good thing, but pricier than we’d thought,” Tudor, Pickering, Holt & Co. analysts Jeff Tillery and Byron Pope said.
The first phase of a civil trial over the oil spill ended last week. Halliburton, which provided the cement for BP’s undersea well that blew out, faces the potential of billions of dollars in punitive damages.
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Today's Links
Florida Becomes fourth State to Sue BP Over Oil Spill
Nighthawk Commences New Drilling Campaign in Colorado
Texas Fertilizer Plant President Comments on Disaster
Kentucky Plant to Make Fertilizer from Coal Byproducts
Earl’s Pearl of the Day: "Opportunity is rare, and a wise man will never let it go by him.” — Bayard Taylor
April 19, 2013
Committee Endorses Moniz to be Energy Secretary
A Senate committee endorsed President Barack Obama’s nomination of Ernest Moniz to be energy secretary on Thursday, queuing up a possible Senate vote on his confirmation next week.
The Senate Energy and Natural Resources Committee voted 21-1 to approve Moniz, with the only "no” coming from Republican Sen. Tim Scott of South Carolina, who has concerns about proposed spending cuts that would affect a nuclear fuel facility in his home state.
Panel Chairman Ron Wyden (D-Ore.) noted if confirmed, Moniz could be the first secretary of energy who would not "confront energy shortages and scarcity” in the job. Instead, he likely "would oversee an era of abundant carbon-reducing natural gas and dramatic growth of renewable energy technologies.”
Of course, the change in the nation’s energy landscape brings new challenges, including oversight of the hydraulic fracturing process that is key to unlocking natural gas and oil in dense rock formations nationwide and tough decisions on whether to grant wider exports of U.S. fossil fuels.
If confirmed, Moniz would immediately confront the latter issue, as the Energy Department vets 20 applications to export some 26 billion cubic feet per day of natural gas to countries that do not have free trade agreements with the United States.
Sen. Lisa Murkowski (R-Alas.) praised Moniz’s outlook. As energy secretary, "he will focus on an energy policy that is affordable, abundant, clean, diverse and secure,” Murkowski said.
Beyond natural gas exports and drilling safety, Moniz would have to tackle other big issues at the Energy Department, if confirmed, including dealing with questions surrounding the disposal of radioactive waste from nuclear power plants and government loan guarantees for nascent energy technology.
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Today's Links
Shell Interested in Buying Petrobras Blocks in Gulf of Mexico
Anadarko Makes New Mozambique Gas Find
Feds: Emergency Containment Equipment A Must for Arctic
API: Time to Approve Keystone XL
Earl’s Pearl of the Day: "Time is the most valuable thing a man can spend.” — Theophrastus
April 18, 2013
Explosion Hits Fertilizer Plant North of Waco, Texas
Police say between five to 15 people were killed and more than 160 were injured in a massive explosion at a fertilizer plant near Waco, Texas, late Wednesday.
The explosion at West Fertilizer in downtown West — a community of roughly 2,600 residents about 20 miles north of Waco — happened around 8 p.m. and could be heard as far away as Waxahachie, a town located 45 miles north. It sent flames spiraling high into the evening sky and rained burning embers, shrapnel and debris down on frightened residents.
A member of the city council, Al Vanek, said a four block area around the explosion was "totally decimated.” Other witnesses compared the scene to that of the 1995 Oklahoma City bombing and authorities said the plant made materials similar to that used to fuel the bomb that tore apart that city’s Murrah Federal Building.
The U.S. Geological Survey reported the blast registered a magnitude 2.1, which is comparable to a minor earthquake.
"They are still getting injured folks out and they are evacuating people from their homes,” Waco Police Department Sgt. William Patrick Swanton said early Thursday. He added later: "At some point this will turn into a recovery operation, but at this point, we are still in search and rescue.”
Gov. Rick Perry will hold a press conference on the incident at 11:45 local time, Swanton said. In a statement released Wednesday, Perry said his "thoughts and prayers” were with West residents and first responders.
Swanton said authorities believe between five and 15 people were killed in the blast, but stressed that’s an early estimate as search and rescue operations remain underway. There is no indication the blast was anything other than an industrial accident, he said. At least three firefighters are still missing.
The still-smoldering fire was "somewhat under control” by early Thursday, Swanton said, adding authorities were not concerned about lingering smoke.
The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) is sending a national response team to the site. ATF spokeswoman Franceska Perot said Thursday the unit includes fire investigators, explosives experts, chemists and canine units.
The town’s volunteer firefighters responded to a call at the plant about 6 p.m., Swanton said. West Mayor Tommy Muska, who is also a volunteer firefighter, was among them and he and his colleagues were working to evacuate the area around the plant when the blast followed about 50 minutes later. Muska said it knocked off his fire helmet and blew out the doors and windows of his nearby home.
The main fire was under control as of 11 p.m., Texas Department of Public Safety spokesman D.L. Wilson said, but residents were urged to remain indoors because of the threat of new explosions or leaks of ammonia from the plant’s ruins.
Lucy Nashed, a spokesman for Gov. Perry’s office, said personnel from several agencies were en route to West or already there, including the Texas Commission for Environmental Quality, the state’s emergency management department and an incident management team. Also responding is the state’s top urban search and rescue team, the state health department and mobile medical units.
The U.S. Chemical Safety Board said it was deploying a large investigation team to West. American Red Cross crews from across Texas also headed to the scene.
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Today's Links
First Phase of BP Trial Ends, Second Phase to Begin in September
ExxonMobil Chemical Headquarters is on the Market
ConocoPhillips to Increase Alaska production
Official: Australia to Be Largest or Second-Largest LNG Exporter by 2018
Earl’s Pearl of the Day: "It is not enough to have a good mind. The main thing is to use it well.” — Rene Descartes
April 17, 2013
Alaska, U.S. Team Up for Unconventional Push
The Alaska Department of Natural Resources (DNR) and the U.S. Department of Energy’s Office of Fossil Energy have signed a memorandum of understanding (MOU) to work together — and with potential investors — to study unconventional energy resources in Alaska’s Arctic.
In signing the MOU, DNR commits to helping DOE with its ongoing assessment of unconventional energy resources and DOE’s field evaluation of potential unconventional energy production technologies on the North Slope.
The agreement includes facilitating access to state lands and assisting with permitting and logistical issues, as well as providing expert review and interpretation of scientific data and reports by Division of Oil & Gas and Division of Geological & Geophysical Survey scientists.
"This is a clear example of how the state and the federal government can work together on energy issues that will play a critical role in Alaska’s future,” said DNR Commissioner Dan Sullivan. "As a state, we want to responsibly develop and commercialize all of the North Slope’s energy resources.”
Through its National Energy Technology Laboratory, DOE will have the lead role in developing research and development projects and providing scientific oversight of the field studies.
In the agreement, DOE commits to sharing the available technical data with the State of Alaska.
According to the agreement, Alaska DNR and DOE may also work together to highlight the potential of all of Alaska’s natural resources, including conventional resources such as natural gas, and unconventional resources such as gas hydrates and viscous oil, as important supply sources to meet domestic energy demands and to ensure domestic economic and energy security.
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Today's Links
Cheniere Sees Financing, Decision on Sabine Pass Units
Republicans Push Bill to Force Keystone XL Approval
Global Impact of North American Shale Gas Boom Forces Qatar to Shift Focus
Group Pushes for More Processing and Refining in Alberta
Earl’s Pearl of the Day: "That which we persist in doing becomes easier, not that the task itself has become easier, but that our ability to perform it has improved.” — Ralph Waldo Emerson
April 16, 2013
Plains All American Announces New Permian Basin Pipeline
Plains All American Pipeline has announced plans to build a 310-mile, 20-inch pipeline to move crude oil across West Texas, capitalizing on the renewed burst of exploration and production in the Permian Basin.
Brad Leone, a spokesman for Plains, said Monday the company has not yet announced a start date for construction of the Cactus Pipeline, but crude oil is expected to begin flowing in the first quarter of 2015.
Plains said its total investment in the project will be as much as $375 million.
The pipeline’s initial capacity will be approximately 200,000 bpd, although that could increase if demand warrants.
"That’s a sizeable quantity,” said John M. White, an analyst with Triple Double Advisors in Houston. "It’s another piece of the West Texas, South Texas, Gulf Coast crude oil infrastructure build out.”
The pipeline will move crude from the Permian to the Plains All American-Enterprise Products Partners Eagle Ford Joint Venture Pipeline, which serves the Three Rivers and Corpus Christi markets.
That venture can also serve the Houston-area market through a connection to the Enterprise South Texas Crude Oil Pipeline, according to the Plains announcement.
White noted as the Permian Basin once again becomes an increasingly prolific source of domestic crude oil production it makes sense to bypass the bottleneck at the traditional terminal at Cushing, Okla.
"Instead, they’re taking it directly to Gardendale in the Eagle Ford,” he said. "This makes much more sense from a cost standpoint and a logistical standpoint.”
From Gardendale, the crude can be shipped to refineries along the Gulf.
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Today's Links
Forest Oil Partners with Schlumberger on Eagle Ford Development
Freeport LNG May Get U.S. Export Approval in Months
BP Official Says He Wasn’t to Blame for Rig Explosion
Legislation Targets Mandates for Water Recycling in Oil, Gas Industry
Earl’s Pearl of the Day: "You can’t do anything about the length of your life, but you can do something about its width and depth.” — Evan Esar
April 15, 2013
U.S. Tight Oil Threatens CIS Crude Exports, Russian Academy Says
Crude oil exports from the Commonwealth of Independent States (CIS) may drop 17 percent by 2040 as tight oil production in the United States soars, the Russian Academy of Sciences said in a presentation on its website.
CIS exports will decline to 293 million metric tons in 2040 from 355 million tons in 2010, according to the academy’s base scenario. Russian crude output will fall by as much as 50 million tons annually by 2020 in the report’s "shale breakthrough” scenario, as high costs and the current tax system limit competitiveness on global energy markets.
New drilling technology including hydraulic fracking will transform the United States into the largest crude producer and a net exporter starting around 2020, the International Energy Agency said in November. Russian President Vladimir Putin has called for his country to maintain output at 10 million barrels a day for the next decade. Oil and gas provide about half of the government’s budget revenue.
"Russia is a price taker on the oil market that will export as much as it can,” Ildar Davletshin, a Moscow-based oil and gas analyst at Renaissance Capital Ltd., said. "There is some concern Russia will be left behind as it is still reliant on old technology, and a 10-percent decline in output by 2020 is not unreasonable.”
Russia produced 518 million tons, or 10.4 million barrels a day, of crude and gas condensate in 2012, according to the Energy Ministry.
The CIS includes most former Soviet republics, including oil exporters Russia, Kazakhstan and Azerbaijan.
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Today's Links
Oil Rigs in U.S. Rise for Third Week, Baker Hughes Says
Alaska Legislature Passes Oil Tax Overhaul
Williams Partners and Shell Form Midstream JV for Marcellus, Utica
Should the U.S. Expand Offshore Oil Drilling?
Earl’s Pearl of the Day: "Every time you subtract negative from your life, you make room for more positive” — Zig Ziglar
April 12, 2013
Louisiana Bill Taps Refineries for Oil Spill Response Fee
A Louisiana lawmaker is proposing a fee on refineries to shore up response funds available to the state in the case of another catastrophic oil spill.
The proposal, House Bill 636, would impose a 25-cent fee on every barrel of crude oil a Louisiana refinery receives for storage or processing to create the state’s Oil Spill Contingency Fund. The fee would be ramped up to a half-cent per barrel if the fund runs low.
The bill, introduced by Rep. Mike Danahay (D–Sulphur) has been referred to the House Ways and Means Committee.
The state oil spill response fund is currently funded with a 4-cent-per-barrel fee on crude transferred from a vessel or marine terminal within the state. The fee only kicks in when the fund balance is below $5 million or in the case of a large spill, and the fund is capped at $30 million.
House Bill 636 would remove the $30 million ceiling and charge a fee at all times. Refineries would pay the higher, half-cent rate when the fund balance is less than $5 million, in the case of a large spill event or if response spending is expected to deplete more than 50 percent of the fund.
The bill also proposes lifting restrictions on ways contingency funds can be spent, including a $750,000 cap on grants for research, testing and development of discharge and blowout prevention as well as improved training.
The Oil Spill Contingency Fund was created in 1995 to clean pollution and remediate natural resource damages in the case of unauthorized discharges of oil.
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Today's Links
ExxonMobil to Sell Virginia Campus, Shift Work to The Woodlands
Houston: Oil, Gas Boomtown
IEA Cuts World Oil Demand Forecast
FERC Chairman on Gas Pipeline Reviews: We Are Fast But Could Be Faster
Shale Boom Transforming U.S. Industry to Boost BHP, CFO Says
Earl’s Pearl of the Day: "Try to learn something about everything and everything about something.” — Thomas H. Huxley
April 11, 2013
ConocoPhillips Suspends 2014 Alaska Drilling Plans
ConocoPhillips will place on hold its 2014 drilling plans for Alaska’s Chukchi Sea due to the uncertainties of evolving federal regulatory requirements and operational permitting standards.
While the company is confident in its expertise and ability to safely conduct offshore Arctic operations, ConocoPhillips believes it needs more time to ensure all regulatory stakeholders are aligned, said ConocoPhillips Alaska President Trond-Erik Johansen in a statement.
"We welcome the opportunity to work with the federal government and other leaseholders to further define and clarify the requirements for drilling offshore Alaska,” Johansen commented. "Once those requirements are understood, we will reevaluate our Chukchi Sea drilling plans. We believe this is a reasonable and responsible approach given the huge investments required to operate offshore in the Arctic.”
Royal Dutch Shell in February suspended its 2014 offshore Alaska drilling plans, saying it needed more time to ensure the readiness of its equipment and employees for future drilling.
Last month, the U.S. Department of the Interior (DOI) concluded Shell failed to finalize key components of its 2012 Alaska Arctic drilling program. DOI called on the industry and government to collaborate to develop an Arctic-specific model for offshore Alaska oil and gas exploration.
DOI Secretary Ken Salazar said the agency would proceed with ConocoPhillips using the same regime it did with Shell. While the Obama Administration is interested in pursuing Arctic resources, Salazar said they wouldn’t allow shortcuts in terms of requirements, and that exploration would only be carried out with the "utmost safety.”
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Today's Links
Senate Confirms Sally Jewell as Interior Secretary
Alberta Premier Makes Final Keystone XL Pitch in Washington
Amount of Potential Recoverable U.S. Gas Resources Grows
Lower Summer Gasoline Prices in Forecast
Earl’s Pearl of the Day: "Hope is the pillar that holds up the world. Hope is the dream of a waking man.” — Pliny the Elder
April 10, 2013
Developers Propose Floating LNG Export Plan for Mississippi River
CE FLNG and CE Pipeline asked the Federal Energy Regulatory Commission (FERC) to begin review under the National Environmental Policy Act of their floating natural gas liquefaction and export project on the Mississippi River near Plaquemines Parish, La., which would be capable of producing up to 8 million tons of LNG per year.
The companies, indirect subsidiaries of Cambridge Energy Group, filed their request to initiate the FERC prefiling process on April 1. Under their proposed project schedule, the companies would submit a Natural Gas Act application in October, FERC would give the project a certificate in December 2014 and allow construction to proceed in February 2015, and the companies would put the project in service by February 2018.
The companies proposed to build and operate two purpose built floating liquefaction, storage and offloading units, or FLSOs, that can each produce up to 4 million tons of LNG per year for owners of gas sourced from the United States. Each FLSO would have four liquefaction trains plus storage. The project will require dredging of the Mississippi River to accommodate the delivery of the FLSOs, a berth for the FLSOs and a berth and turning basin for LNG carriers calling on the terminal. The carriers would need to use about 33 miles of the river.
The project also will require an approximately 45-mile pipeline with compressor stations to move the gas from the gas pipeline network to the shore side facilities. The pipeline may need to be extended an additional 27 miles to make a direct connection to the Enterprise Products Partners LP processing plant at Toca in St. Bernard Parish, La., the developers said. The CE companies will own the natural gas or LNG that passes through the terminal.
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Today's Links
Obama’s Energy Department Nominee Stays Neutral on Natural Gas Exports
BP Executive Says Safety Was Top Priority
Gasoline Cargoes to U.S. Seen Declining as Refinery Output Gains
U.S. Virgin Islands and Hovensa Agree to Refinery Sale Process
Earl’s Pearl of the Day: "The most important thing in communication is hearing what isn’t said.” — Peter Drucker
April 9, 2013
Integrated Management, Planning Needed for Arctic Development
Decisions regarding development and conservation in the Arctic will require an integrated management approach involving the best available science to integrate cultural, environmental and economic factors, according to a recent report by the U.S. Department of the Interior’s (DOI) Alaska Interagency Working Group.
The report – Managing for the Future in a Rapidly Changing Arctic – chronicles how Arctic residents are dealing with rapid, climate change induced impacts on their resources and traditional ways of life, at the same time new economic activity and opportunities in oil and gas, marine transportation, tourism and mining are emerging.
While the report does not recommend new regulations or represent new policy decisions, it does call for a review of activities of more than 20 federal agencies involved in the U.S. Arctic by the end of this year with an eye toward increased coordination and the elimination of duplication of efforts.
"It is imperative we reduce redundancies and streamline federal efforts as we safely and responsibly explore and develop Alaska’s vast resources while preserving the region’s rich ecosystems that will sustain future generations,” said Interior Deputy Secretary David J. Hayes.
DOI also has launched a new government website, the Arctic Science Portal, by the Arctic Research Commission. This website will provide decision makers and other interested parties with easier access to scientific information about the Arctic.
Click here for more information.
Today's Links
Sasol Orders Ethylene Compressor Trains for Lake Charles Cracker
Shell, Gazprom to Develop Arctic Oil Fields
Killing Keystone Seen as Risking More Oil Spills by Rail
Gasoline at U.S. Pumps Drops to Lowest for Season in Three Years
Earl’s Pearl of the Day: "It is a rough road that leads to the heights of greatness.” — Lucius Annaeus Seneca
April 8, 2013
Capacity Added Despite No Construction of New Refineries
It’s a frequently repeated factoid about the energy industry: No new major refinery has been built in this country in decades.
A Valero Energy Corp. plant in Corpus Christi,Texas, often is cited as the last major plant to open — in 1983 — when the San Antonio company built a complex refinery on the site of a simple plant that first opened in 1975.
Since 1983, several small refineries have opened. U.S. Energy Department figures show six plants have come on line since Valero’s big Corpus complex, but none is a major, sophisticated refinery.
More small plants are planned. Construction on a simple, 20,000-bpd plant in North Dakota began last month. Set to open in 20 months, the plant will produce mostly diesel for trucking use within the state, according to a spokesman for one of the owners, MDU Resources Group.
While it’s true no new major refineries have been built in decades, it ignores the fact significant capacity has been added at the nation’s refineries.
A big example is the recent expansion of Motiva Enterprises’ Port Arthur, Texas, refinery, where capacity was boosted by 325,000 bpd, making the plant the nation’s largest at 600,000 bpd.
In 2009, Marathon Petroleum Corp. doubled the capacity of its Garyville, La., plant to 490,000 bpd, making it the nation’s fourth largest.
When experts say no new plant has been built in many years, "they’re talking about no substantial new plants,” said Terrence Higgins, executive director of refining and special studies at energy industry publisher Hart Energy.
The Motiva and Marathon expansions "are not new refineries, but they’re whole new complexes,” Higgins said.
While refinery capacity has fluctuated over the years, as some plants have closed and others have opened, overall it has risen in the past decade.
Nationally, more than 1 million bpd of capacity have been added in the past decade, according to figures from the Energy Information Administration, the statistical arm of the Energy Department.
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Today's Links
U.S. Court Rules Against BP on Oil Spill Settlement Payments Dispute
Texas Cashes in on Energy
Shell Submits Kitimat Project Plans for Environmental Review
India Seeks Access to U.S. Natural Gas
Earl’s Pearl of the Day: "There’s only one corner of the universe you can be certain of improving, and that’s your own self.” — Aldous Huxley
April 5, 2013
Natural Gas Driving Industrial Development
The significant growth in Louisiana’s petrochemical and chemical
industry is being driven by the ample supply of cheap natural gas in the
Haynesville Shale in northwest Louisiana, an official with Chesapeake Energy
said Thursday.
Kevin McCotter, a vice president of corporate development for
Chesapeake who is based in Shreveport, said the Haynesville Shale contains 250
trillion cubic feet of natural gas. One cubic foot of natural gas is about the size
of a basketball and provides enough energy to keep a hot water heater running
for about an hour and 15 minutes.
"That’s one of the benefits of Haynesville, 250 trillion cubic feet of
natural gas, 250 miles straight down a pipeline to the Gulf Coast,” said
McCotter, who was one of the speakers at a BIC Alliance State-of-the-Industry
seminar held at Ashley Manor. About 100 people attended the seminar, sponsored
by BIC Alliance, which has offices in Baton Rouge and Houston and works to
connect various industry groups.
Click here for more information.
Today's Links
BSEE
Finishes Final Offshore Workplace Safety Rule
ExxonMobil CEO Zeroes In On Risk
BP Wind Sale Highlights Renewable Energy Struggles
Shell Cleaning Houston Crude Leak
Earl’s Pearl of the Day: "Believe you can and you're halfway there.” — Theodore Roosevelt
April 3, 2013
Phillips 66 Announces Plans for New Gulf Coast FacilityPhillips 66 announced Tuesday it will pursue building a 100,000-bpd natural gas liquids fractionator in Old Ocean, Texas, near the company’s refinery in Sweeny.
If approved by regulators, construction is expected to begin in early 2014, with start-up expected in the second half of 2015.
The project would create more than 25 full-time jobs and hundreds of temporary construction jobs, the company said in its announcement.
Fractionation is the process of separating natural gas liquids into different components used in various industries, including the manufacturing of plastics for everyday items.
Phillips 66 Chairman and CEO Greg Garland said the company wanted to take advantage of strong existing midstream transportation and storage infrastructure.
"We see excellent market-facing opportunities to grow the natural gas liquids business, and the chance to supply purity NGLs and liquefied petroleum gas to the petrochemical industry and heating markets,” he said.
Phillips 66 was created last year in a split with ConocoPhillips. It includes refining, midstream and chemicals businesses and includes natural gas liquids gathering, long haul transportation, storage and fractionation.
Click here for more information.Today's LinksTransCanada to Seek Commitments for Oil Pipeline to Eastern CanadaExxon, BHP Plan World’s Largest Floating LNG Plant Off AustraliaHalliburton Defense in Gulf Oil Spill Trial Nearing EndJapan to Study Ice Gas ReservesEarl’s Pearl of the Day: "If an idea’s worth having once, it’s worth having twice.” — Tom Stoppard
Don't forget to RSVP for our State-of-the-Industry seminar & Industry Appreciation Crawfish Boil tomorrow in Baton Rouge!
April 2, 2013
CME Exec: Once Marginal U.S. Refineries on the ReboundNew supplies of light sweet crude oils from the Bakken, Eagle Ford and Midcontinent are injecting new life into U.S. refineries whose fate until recently was bleak, according to a top executive with the derivatives and futures exchange CME Group.
"I think it’s really going to change the way refiners run,” said Gary Morsches, New York-based managing director of global energy with CME Group.
Greater access to domestically produced light sweet crudes compatible with the WTI benchmark has dramatically improved the economic viability of smaller, less complex refineries, Morsches explained at the North American Crude Marketing Conference in Houston. Moreover, he expressed optimism that the long-term outlook for these facilities is positive.
Pipeline projects such as TransCanada’s Keystone Southern Extension and Enterprise and Enbridge’s joint Seaway Pipeline Reversal and Expansion, together with continually expanding crude by rail capacity, should deliver more than 2 million bpd of Bakken and Midcontinent crude to the Gulf Coast by 2014. Bakken crude also is increasingly making its way to East Coast refineries via rail and barge, lessening the need to import more expensive Brent crude into the region.
"That’s very significant,” said Morsches. "Now refiners have access to crude slates, crude quality they have not had very good access to and it’s changing the way refiners are running, changing the crude slates refiners are choosing to run with, changing the output of those refineries, but these changes are not that hard to achieve.”
Although less complex refineries already have the distillation, reforming and catalytic cracking capacities necessary to run light crudes, Morsches expects these facilities to take steps to optimize their increasingly strong competitive position via capital projects. He predicted debottlenecking will be "in vogue” as simpler refineries seek to run higher throughputs of light crudes and produce more high-value products.
Click here for more information.Today's LinksPlanned Work Completed at LyondellBasell’s Houston RefineryKinder Morgan Providing Storage Facilities for New Methanol PlantApache Confirms 14 Blocks from Gulf of Mexico Lease SaleThree Years after Gulf Spill, BP Faces Big Week in CourtEarl’s Pearl of the Day: "The purpose of life is a life of purpose.” — Robert Byrne
April 1, 2013
New Refineries Planned for Bakken ShaleCrude oil production in North Dakota’s Bakken Shale continues to grow at a faster pace than the pipelines and railcars needed to move the crude to large national refineries. That has led to some companies building small refineries in North Dakota, trying to take advantage of the low cost of Bakken crude and a growing demand for fuel in the local area.
The first of three new refineries in the works is the 20,000-bpd Dakota Prairie refinery, which broke ground last week. Its owners, a joint venture between MDU Resources Group and Calumet Specialty Products Construction, estimate construction will be completed within the next two years.
"Through this joint venture we are continuing to expand both our midstream energy business and our vertically integrated investment in the Bakken oil play,” said David L. Goodin, president and chief executive officer of MDU Resources. "There is a strong existing market for the plant’s production.”
Dakota Oil Processing plans to spend $200 million to build and start-up a second refinery, the Trenton Diesel Refinery, which will also have a 20,000-bpd capacity. It has received an air quality permit and the project is under planning, but no start-up date has been announced.
There is also a third refinery being planned by three affiliated tribes — the Mandan, Hidatsa and Arikara Nation — according to Hart Energy Research’s North American Shale Quarterly Service. Construction for the refinery, the Thunder Butte Petroleum Services, is scheduled to begin in the spring of this year and will have a capacity of 20,000 bpd when completed.
These three refineries are some of the first to be built in the United States in the past decades. The projects fly in the face of conventional refining wisdom, which counsels refineries can only be profitable if they are large enough to achieve economies of scale.
North Dakota’s currently lone refinery, the Tesoro Mandan refinery, has a capacity of 60,000 bpd and can process diesel fuel, jet fuel, heavy fuel oils and liquefied petroleum gas. It is located near Bismark.
The two new refineries will focus on creating the diesel and kerosene that are needed locally.
Click here for more information.Today's LinksAnadarko’s Plant Nears CompletionSuncor Goes Direct to Refiners for Profit BoostNatural Gas Begins to Flow from Israel’s Tamar FieldStudy Touts Job Creation Benefits of Shipping Oil Sands as Heavy CrudeEarl’s Pearl of the Day: "Make the most of yourself, for that is all there is of you.” — Ralph Waldo Emerson
March 28, 2013Magnolia LNG Asks FERC to Begin Early Review of Export ProjectMagnolia LNG submitted to FERC’s prefiling process its plans for a $2.2 billion natural gas liquefaction and export terminal in the Port of Lake Charles, La.
Magnolia filed a March 12 request to begin early review under the National Environmental Policy Act. The company proposed not only to build the four train Magnolia Liquefied Natural Gas Project for overseas LNG export but also to operate LNG carriers and barges for domestic marine distribution and possible LNG bunkering, and to operate LNG trucks for over-the-road distribution to refueling stations in Louisiana and surrounding states.
In January, Magnolia and Louisiana Gov. Bobby Jindal introduced the plans to develop the project, which they said might eventually expand to produce 8 million metric tons of LNG annually. The developer announced in early March it had signed an exclusive lease option agreement with the Lake Charles Harbor and Terminal District Authority to secure the project site.
Under the proposed schedule included in the prefiling request, Magnolia planned to file a Natural Gas Act Section 3 application for the project by Nov. 1, receive its FERC certificate in December 2014, begin construction in March 2015 and put the project in service in October 2017.
"Magnolia will operate the LNG facility using a tolling structure,” the company told FERC. "At this time, Magnolia anticipates it will not own the natural gas or the LNG that passes through the terminal. However, Magnolia will inform the commission if it plans to acquire and/or take title to any natural gas that is transported to or liquefied in the LNG facility at a future date.”
Click here for more information.Today's LinksU.S. Shale Boom: Downstream Picture Starts to EmergeShell Facing New Probe over Alaska DrillingGreenland ‘reluctant’ on New Offshore DrillingAPI Official Chosen to Lead America’s Natural Gas AllianceEarl’s Pearl of the Day: "If you want change, you have to make it. If we want progress, we have to drive it.” — Susan Rice
March 26, 2013Macondo Rig Fire was ‘Too Big to Fight’The officer in charge of safety on Transocean’s Deepwater Horizon drilling rig said the post-blowout fire was too big to fight and the evacuation saved lives.
In the fifth week of a trial to apportion blame among BP, Transocean Ltd. and other contractors for the Macondo oil well disaster, David Young, the rig’s chief mate, said the captain told him to do whatever he needed to do to get the fire on April 20, 2010 under control.
"I pulled him outside and showed him the size of the fire we were dealing with and ... basically told him we couldn’t fight that fire,” Young said on Monday in a New Orleans federal court before U.S. District Judge Carl Barbier.
Young then helped load injured and other crew into lifeboats and rafts before jumping into a raft himself, he said. Later, he and others in his raft were pulled onto one of the lifeboats.
"Do you believe the Deepwater Horizon’s emergency training saved lives that night?” Transocean attorney Luis Li asked.
"I do, because we got 115 people off,” Young replied.
Eleven workers died as a result of the blowout and fire, and more than 4 million barrels of oil gushed into the Gulf from the damaged well. BP and its contractors are being sued by the U.S. Justice Department along with the Gulf states, companies and individuals affected.
Transocean’s chief executive testified last week his workers made mistakes that day, but were not responsible for overall safety at the site. While BP accepts its role in the accident, it believes Transocean and well cementing provider Halliburton share the blame.
Transocean has pleaded guilty to federal charges connected with Clean Water Act violations and agreed to pay $1.4 billion in criminal and civil fines and penalties.
Transocean is expected to call its final witnesses on Tuesday, beginning with Bill Ambrose, Transocean’s director of special projects. Other defendants then will begin calling their witnesses.
Click here for more information.Today's LinksChevron Announces Oil Discovery in Deepwater U.S. Gulf of MexicoACC’s Dooley Predicts Chemical Boost for Mountain StateNew Beaumont Terminal to Carry Crude to Gulf Coast Refiners
Two Miles of Sea Covers Big Oil’s Next Generation Field Earl’s Pearl of the Day: "Always tell the truth. Then you’ll never have to remember what you said the last time.” — Sam Rayburn
March 25, 2013
Cyberattack Risk High of Oil and Gas IndustryIn the months since a virus ripped through 30,000 of Saudi Aramco’s computers, the world’s largest oil company has become the canary of the industry, warning others of the serious threats already lurking on their systems.
Although the attack did not disrupt Saudi Aramco’s oil and gas operations, the company’s top man warned in a recent interview the risk to the industry remains high.
Chief Executive Officer Khalid Al-Falih said despite aggressive efforts by Saudi Aramco and others to guard against online threats, operations throughout the energy industry will remain in danger unless all companies adopt strong Internet security measures.
"What happens to one company affects us all,” Al-Falih said.
Saudi Aramco, which is wholly owned by the Kingdom of Saudi Arabia, produces more hydrocarbons than ExxonMobil, Chevron and BP combined.
But even though the mammoth energy company has increased its focus on Internet security, it continues to deal with a high volume of threats, Al-Falih said.
"Every company today you talk to will tell you they are being tested every day by hackers,” Al-Falih said. "So it’s nothing new for us. We have been attacked hundreds of thousands of times before this attack penetrated us.”
While Saudi Aramco’s security measures have protected it from any interruption in its oil production, delivery or other fundamental operations, companies with less robust cybersecurity efforts may be at greater risk, he said. And that presents a threat to other oil and gas companies, Al-Falih said.
"We provide our petroleum to systems that are run by other companies,” he said. "So in an extreme case, if refineries are hacked and disrupted, that will impact demand on us and our petroleum. And the reputation of the industry as a whole is important to us.”
Oil companies use computer systems to manage and control massive operations, and to monitor them for safety. A computer infection on one of those control systems could cause a company’s entire operation to malfunction.
Click here for more information.Today's LinksCentrica Signs Deal for U.S. Gas ImportsShell Executive Managing Arctic Alaska Oil Program to Leave CompanyRussia Lets China into Arctic Oil Rush as Energy Giants EmbraceSalazar Finalizes Oil Shale Plan; BLM Proposes RevisionsEarl’s Pearl of the Day: "Self-confidence is the first requisite to great undertakings.” — Samuel Johnson
March 22, 2013BP Seeks Sanctions Against Halliburton in Spill TrialBritish oil giant BP and the state of Alabama want sanctions against Halliburton in the civil trial over the 2010 Gulf of Mexico oil spill, for not turning over for nearly three years cement samples that may have been used with the well that blew out.
Attorneys for BP and Alabama told U.S. District Judge Carl Barbier in New Orleans on Thursday they would be filing motions for sanctions. BP filed its motion Thursday night. Alabama’s motion was expected to follow.
"Halliburton’s conduct has undermined the integrity of these proceedings and severely prejudiced BP and the other parties,” BP said in its motion.
Possible sanctions could include preventing Halliburton from using certain defenses at the trial, which could make it harder for the company to challenge a finding of gross negligence. Such a finding would allow punitive damages against the company for the worst offshore oil spill in U.S. history.
Among other things, BP said in its filing it wants the court to order that Halliburton’s final cement design was unstable and caused hydrocarbons to enter the well.
According to lawyers who were in court, Halliburton attorney Don Godwin told Barbier he would like an opportunity to respond to the motions once he reads them, and Barbier said he could.
Godwin said, "We’ll aggressively defend as it has no merit. BP is attempting to deflect attention from itself. Halliburton will not be intimidated by BP for things it did not do.”
Last week, Godwin acknowledged officials recently discovered cement samples possibly tied to the ill-fated drilling project weren’t turned over to the Justice Department after the oil spill.
Also, a former Halliburton lab manager testified Tuesday a company official asked him not to record results of a cement stability test related to BP’s blown out Macondo well.
The test was conducted shortly after the spill, using ingredients similar to those used to seal the undersea well that blew out. Timothy Quirk said he told the results to the company official that asked for the test, then he threw away his notes.
BP said in its motion Thursday any testing of the samples recently found could be difficult because they would likely have deteriorated given the amount of time that has passed.
BP also wants the court to order the test Quirk performed, the notes of which were destroyed, further establishes the cement used on the Macondo well was not stable.
Barbier already has refused to drop gross negligence claims against Halliburton, BP and Transocean at this stage in the trial. He did dismiss gross negligence claims Wednesday against two lesser players in the trial, M-I Swaco and Cameron.
Click here for more information.Today's LinksRosneft Becomes World's Largest Listed Oil Producer with Completion of DealAlaska Senate Approves Cut on Oil TaxesAPI: U.S. February Oil Use Down 4.1% Versus Year EarlierBaker Hughes Builds New Training Center for Rig WorkersEarl’s Pearl of the Day: "Life will always be to a large extent what we ourselves make it.” — Samuel Smiles
March 21, 2013Oil Companies Bid $1.6 Billion for Gulf Drilling RightsDozens of companies offered up $1.6 billion for the rights to drill in the central Gulf of Mexico during a government lease sale Wednesday that affirmed a drilling revival in the region and the industry’s interest in tapping ever deeper territory.
All told, 52 oil and gas companies submitted 407 bids on 320 blocks, with high bids totaling $1.2 billion.
Tommy Beaudreau, the director of the Bureau of Ocean Energy Management that conducted the auction, called it an "extremely successful and an extremely robust sale.” And bureau officials said it ranked as the sixth highest grossing central Gulf auctions since area wide leasing began decades ago.
"It serves as a reminder the Gulf of Mexico, and, in particular, the deepwater Gulf, will continue to play a major role in future energy development in the country,” Beaudreau said. "The Gulf of Mexico remains one of the cornerstones of the United States’ domestic energy portfolio and it will stay that way for many, many years to come.”
In opening the sale at the Mercedes-Benz Superdome in New Orleans, outgoing Interior Secretary Ken Salazar said the auction was a sign Gulf drilling is going strong, nearly three years after the BP oil spill devastated the region.
He praised the oil industry for making strides to improve safety in the wake of the spill.
"People of industry stood up and said ‘we are going to get it right,’ and we are getting it right,” Salazar said.
As the auction got under way, officials with the Bureau of Ocean Energy Management opened the submitted bids and read them aloud, sometimes in a dry monotone that belied the millions of dollars at stake.
Most of the interest was concentrated in the Walker Ridge area of the Gulf, where at least six companies are vying for some 24 tracts. Chevron and Statoil recently have announced promising discoveries there.
The sale’s highest bid — $81.8 million offered by Statoil and Samson — was for Walker Ridge block 271.
Industry representatives and analysts had anticipated the sale would mark a return to more normal conditions that existed before the 2010 Gulf oil spill prompted the cancellation of lease sales. The first central and western Gulf sales after the spill were blockbusters, driven by pent-up demand.
Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said the bid totals "clearly demonstrate that industry remains committed to doing business in the Gulf of Mexico.”
Click here for more information.Today's LinksBP Declines to Bid on New Gulf Drill LeasesPhillips 66 Signs Three Pacts to Raise Supplies of North American Crude OilGroups Praise Revenue Sharing Bill, Call for More Access to U.S. AcreageRigs-to-Reefs Program Making a Splash in TexasEarl’s Pearl of the Day: "Just because something doesn't do what you planned it to do doesn't mean it's useless.” — Thomas A. Edison
March 20, 2013Bidding Begins in Gulf Drilling Lease SaleThe federal government is kicking off an auction of leases to drill in the Central Gulf of Mexico today, but it probably won’t look much like last year’s sale of similar territory, when pent-up, post-spill demand spurred a buying frenzy.
Instead, this time, industry leaders and analysts expect a return to more normal patterns as major oil companies and new players stake out territory in the Gulf for years to come.
"This is hopefully a back-to-normal central sale,” said Randall Luthi, head of the National Ocean Industries Association. As such, "it will be a pretty accurate barometer” of the oil industry’s continued interest in the Gulf of Mexico.
During the last Central Gulf lease sale in June, energy companies offered more than $1.7 billion in high bids for more than 2.4 million acres. The high demand for offshore acreage was fed in part by the cancellation of a previously planned Central Gulf sale after the 2010 oil spill, Luthi noted.
This time around, nearly four dozen companies submitted 407 bids on 320 offshore blocks to the Interior Department’s Bureau of Ocean Energy Management. The bids will be unveiled when the auction gets underway at 9 a.m. at the Mercedes-Benz Superdome in New Orleans.
The area up for grabs encompasses 7,299 blocks spanning 38.6 million acres, though interest may be focused on the 306 blocks that are being made available for the first time in years. The territory is newly available because previous leases have been relinquished, terminated or expired since the last central sale.
The available acreage includes shallow tracts just nine feet deep as well as far deeper territory in more than 11,115 feet.
Click here for more information.Today's LinksMexico Considers Opening Waters to International Oil FirmsPlaintiffs to Formally Rest Case in Gulf Oil Spill Trial
Alberta Government Buys ‘The New York Times’ Ad Promoting Keystone XLGulf Coast Oils Surge as U.S. Refinery Turnarounds Near EndEarl’s Pearl of the Day: "I don’t measure a man’s success by how high he climbs but how high he bounces when he hits bottom.” — George S. Patton
March 19, 2013Transocean CEO Takes Witness Stand in Gulf Oil Spill TrialThe chief executive officer of Swiss drilling contractor Transocean is set to take the witness stand today in the civil trial over the 2010 Gulf of Mexico oil spill.
Steve Newman will be questioned under oath about the seaworthiness of the Deepwater Horizon drilling rig and the competency of its crew before the fateful explosion off the coast of Louisiana that killed 11 workers. The resulting oil spill was the worst offshore spill in U.S. history.
Newman has defended the company’s actions in previous statements and public settings. He told the Senate Committee on Energy and Natural Resources on May 11, 2010 that nothing is more important to the company than safety.
And while he didn’t want to speculate at the time on the exact cause of the explosion and oil spill, Newman said he believed it was important to point out the roles of the various parties involved in the operation.
Newman noted at the hearing BP was the operator of the well and Halliburton provided the cement for the well.
"The one thing we know with certainty is on the evening of April 20, there was a sudden, catastrophic failure of the cement, the casing, or both,” Newman said. "Therein lies the root cause of this occurrence; without a disastrous failure of one of those elements, the explosion could not have occurred. It is also clear the drill crew had very little, if any, time to react.”
Newman also defended his firm’s maintenance of the rig’s blowout preventer, which failed to stop the flow of oil to the sea.
"Some have suggested the blowout preventers used on this project were the cause of the accident. That simply makes no sense,” Newman said.
Nine of the 11 men killed on the rig worked for Transocean. The other two worked for M-I Swaco, a unit of oilfield services firm Schlumberger.
Click here for more information.Today's LinksValero Restarts Idled Ethanol PlantsRefiners Hear the Good and the Bad on Fossil Fuels
Saudi Arabia to Drill for Shale Gas This YearOnshore Services Work Gains SteamEarl’s Pearl of the Day: "Love is, above all else, the gift of oneself.” — Jean Anouilh
March 18, 2013
BP Seeks To Block Gulf Spill Settlement PaymentsBP sued Friday to block what could be billions of dollars in settlement payouts to businesses over the 2010 Gulf of Mexico oil spill.
The London-based oil giant accused the court appointed administrator for the settlement, Patrick Juneau, of trying to rewrite the terms of the deal. BP said Juneau violated the settlement in the way he used a complex formula to determine the payments to businesses.
"Although the ultimate exposure is at this time inestimable, it grows daily and could cost BP billions,” the company’s lawyers wrote Friday.
U.S. District Judge Carl Barbier appointed Juneau and has upheld his decisions for calculating payments. Juneau’s spokesman declined to comment on BP’s lawsuit.
Attorneys who worked on the class action settlement with BP said the payments to businesses were spelled out in the agreement.
"Simply put, BP undervalued the settlement and underestimated the number of people and businesses that qualify under the objective formulas BP agreed to,” attorneys Steve Herman and Jim Roy said in a statement.
Friday’s court filing asked Barbier to block payments to any businesses whose awards are part of the January decisions. As an alternative, BP asked to block payments to businesses in certain industries, including agriculture, construction, professional services, real estate, manufacturing and retail.
BP estimated a year ago it would spend roughly $7.8 billion to resolve tens of thousands of claims covered by the settlement. It revised its estimate earlier this year, saying it expected to pay $8.5 billion, but now says it can’t give a reliable estimate.
Click here for more information.Today's LinksStatoil, Exxon Make Third ‘High-Impact’ Gas Find off TanzaniaEnergy Boom Helps Fuel West Texas, Great Plains Population GrowthDays of Promise Fade for EthanolJob Safety Analysis — Meeting New Requirements for TrainingEarl’s Pearl of the Day: "We may go to the moon, but that’s not very far. The greatest distance we have to cover still lies within us.” — Charles de Gaulle
March 15, 2013Arctic-Specific Rules Required After Shell’s 2012 MishapsRoyal Dutch Shell was blasted by the U.S. government for the series of mishaps that dogged its attempts to explore for oil in the Arctic, and ordered to file detailed plans before it can resume those efforts.
An Interior Department review of Shell’s exploration off the north coast of Alaska in 2012, which was released yesterday, found shortcomings in oversight of its various contractors and said the company started its work "not fully prepared” for the challenges it faced.
Interior Secretary Ken Salazar ordered the staff review of Shell’s 2012 experience in January. The company had already announced a pause in its Arctic operations due to equipment repairs that forced it to skip this year’s drilling season.
"Before Shell is allowed to move forward, they are going to have to demonstrate to us they have a comprehensive management plan in place,” Salazar said.
Interior, which regulates offshore drilling, will require the company to provide a detailed plan of both its drilling and transport operations. The plan must include how it will manage contractors, who contributed to Shell’s woes. It will also need third-party approval of that plan, Salazar said.
"The traditional operator-specific, ‘go it alone’ model common with exploration programs in other regions is not appropriate for Arctic offshore operations,” the Interior Department report said.
Shell will "apply lessons learned” from the Interior report along with a separate Coast Guard investigation and its own assessment to bolster its offshore program, Curtis Smith, a company spokesman in Alaska, said.
"Alaska remains a high potential area over the long term, and we remain committed to drilling there safely again,” Smith said.
Two ships Shell was using in the Beaufort and Chukchi seas were being towed to Asia for repairs, meaning it will miss any chance to resume drilling in 2013. The company never got a U.S. permit last year to tap an oil reservoir off Alaska’s north coast because of issues with a spill containment system, though it was allowed to conduct preliminary drilling. Shell also encountered weather delays and was cited for violating air pollution standards.
Click here for more information.Today's LinksFlight Restrictions Due to Gulf FireballExxonMobil Unveils Its U.S. Energy OutlookBP Allowed to Bid in Gulf Lease SaleTransocean Maintenance Showed Negligence, Engineer SaysEarl’s Pearl of the Day: "Blessed is he who expects nothing, for he shall never be disappointed.” — Alexander Pope
March 14, 2013
La. Pipeline Blaze Could Burn Until TodayA fire raging in a coastal Louisiana bayou where a tugboat struck a gas pipeline appeared to have diminished Wednesday night but is far from extinguished, the Coast Guard said.
Smoke was still visible in New Orleans, 30 miles to the north, and officials say they don’t expect the fire sparked by Tuesday night’s crash to be out until today or later.
It started when a tug pushing an oil barge struck a liquefied natural gas pipeline in shallow Bayou Perot, where Lafourche and Jefferson parishes meet. Four people were injured, one critically.
No oil had spilled as of Wednesday evening and what appeared to be pockets of oil on the water turned out to be ash from the burned gas, the Coast Guard said.
At a news conference, Capt. Jonathan Burton stressed the barge remained intact and none of the oil appeared to be leaking. However, as a precaution, protective boom was deployed in the area around the site and in nearby environmentally sensitive areas. Oil skimmers were also dispatched.
"We’re not waiting for something to happen,” Burton said. Preparations included consulting with the National Oceanic and Atmospheric Administration on where currents might take the oil if it were released.
Burton said investigators hadn’t determined why the tug, owned by Settoon Towing, hit the pipeline. The Coast Guard estimated water at the site to be 2 or 3 feet deep.
Asked specifically if the tug, the Shanon E. Settoon, was outside navigation channels, Burton would only say the accident was under investigation.
Click here for more information.Today's LinksWorker: Rig Was Bustling Before BP Well BlowoutLyondellBasell Details Ethylene Boost at Corpus Christi, Plans PE UnitEnterprise Products Partners Considers Building Ethane PipelineU.S. Oil, Gas Production to Climb While U.S. Energy Consumption DeclinesEarl’s Pearl of the Day:"You may be disappointed if you fail, but you are doomed if you don’t try.” — Beverly Sills
A reminder to RSVP for the BIC Crawfish Boil in Kemah! We're one week away & we look forward to seeing you there!
March 13, 2013CHS Plans to Boost McPherson, Kan., Refinery Production
A planned $327 million expansion will boost refining capacity by 18 percent at the National Cooperative Refinery Association facility at McPherson, Kan., CHS Inc., an energy, grains and foods business and the nation’s leading farmer-owned cooperative, announced Tuesday.
The multifaceted project, which will begin this spring, will boost refining capacity to 100,000 bpd from the facility’s current 85,000 bpd. Completion will take place in phases during the second half of calendar year 2015 and the first months of 2016, with production coming on line in early 2016.
The expansion project will take place concurrent with construction of a $555 million replacement coker already in progress. The McPherson refinery will continue to operate normally during both construction projects.
"Investing in additional refining capacity at McPherson is further evidence of our commitment to expanding our energy platform to add value for our owners and customers while becoming the premier marketer of refined fuels to rural America,” said Jay Debertin, CHS executive vice president and chief executive officer, Energy and Foods.
Debertin added the additional refined fuels gallons produced will allow CHS to better match production from McPherson and its 55,000-bpd refinery at Laurel, Mont., with customer demand. "The added refinery production will be equally divided between diesel and gasoline to best meet our customers’ agricultural needs in rural America,” he said.
Click here for more information.Today's LinksIEA Sees Weaker Oil Demand Growth, More SupplyOil Drillers Boost Efforts to Coax More From ShaleKeystone PR Battle Ramps UpOil Industry Labor Shortage Affecting Safety, Report SaysEarl’s Pearl of the Day:"If you can find a path with no obstacles, it probably doesn’t lead anywhere.” — Frank A. Clark
March 12, 2013
Japan Achieves First Gas Extraction from Offshore Methane HydrateA Japanese energy explorer said Tuesday it extracted gas from offshore methane hydrate deposits for the first time in the world, as part of an attempt to achieve commercial production within six years.
Since 2001, Japan, which imports nearly all of its energy needs, has invested several hundred million dollars in developing technology to tap methane hydrate reserves off its coast that are estimated to be equal to about 11 years of gas consumption.
State-run Japan Oil, Gas and Metals National Corp., (JOGMEC) said the gas was tapped from deposits of methane hydrate, a frozen gas known as "flammable ice,” near Japan’s central coast.
Japan is the world’s top importer of LNG and the lure of domestic gas resources has become greater since the Fukushima nuclear crisis two years ago triggered a shake-up of the country’s energy sector.
Japan’s trade ministry said the production tests will continue for about two weeks, followed by analysis on how much gas was produced.
Methane is a major component of natural gas and governments including Canada, the United States, Norway and China are also looking at exploiting hydrate deposits as an alternative source of energy.
Japan used depressurization to turn methane hydrate to methane gas, a process thought by the government to be more effective than using the hot water circulation method the country had tested successfully in 2002.
Click here for more information.Today's LinksWith or Without Keystone Pipeline, Oil Will Roll into U.S.Halliburton Exec Testifies at Gulf Spill TrialHanwha Eyes U.S. Ethylene PlantInnovative Oil Field Equipment and Strategies are Reshaping IndustryEarl’s Pearl of the Day:"Most folks are about as happy as they make up their minds to be.” — Abraham Lincoln
BIC Alliance is proud to announce our involvement with "The Boot Campaign." This charity helps our armed forces veterans upon their return home. We have purchased a pair of boots and a t-shirt for each of our employees and we hope you will join us in getting your boots on!
Click here to learn more about The Boot Campaign.March 11, 2013State Department Releases Draft SEIS for Revised Keystone XL
The U.S. Department of State released a draft supplemental environmental impact statement (SEIS) for the proposed Keystone XL crude oil pipeline’s new presidential permit application.
The SEIS includes a comprehensive review of the pipeline’s new proposed route across Nebraska, new information and circumstances on its largely unchanged route across Montana and South Dakota, and expanded and updated information that was not included in the project’s original final EIS in 2011, officials said.
It makes no recommendations on whether the project’s new cross-border permit application should be approved or denied, they emphasized.
TransCanada Corp., the project’s sponsor, noted while it is still reviewing the draft SEIS, the document builds on more than 10,000 pages of already completed reviews and reaffirms "there would be no significant impacts to most resources along the proposed project route.”
TransCanada Chief Executive Russ Girling said, "Completing the draft SEIS for Keystone XL is an important step toward receiving a presidential permit for this critical energy infrastructure project. No one has a stronger interest than TransCanada does in making sure Keystone XL operates safely, and more than four years of exhaustive study and environmental review show the care and attention we have placed on ensuring this is the safest oil pipeline built to date in the United States.”
Karen A. Harbert, president of the U.S. Chamber of Commerce’s Institute for 21st Energy, said the draft SEIS for the project’s new cross-border permit application was long overdue, and continues to build a strong case for Keystone XL’s construction. "We’ll be working over the next 45 days to ensure the voice of the majority of American people, who favor this project, is heard loud and clear by the Obama Administration,” she said.
Click here for more information.Today's Links
Obama Confers With Energy, Oil Executives on Second-Term AgendaRussian Arctic Set to Become the New FrontierSecurity Threats a Certainty on Energy Networks, ex-CIA Head SaysOTC Announces Technology AwardsBIC Alliance is proud to announce our involvement with "The Boot Campaign." This charity helps our armed forces veterans upon their return home. We have purchased a pair of boots and a t-shirt for each of our employees and we hope you will join us in getting your boots on!
Click here to learn more about The Boot Campaign.Earl’s Pearl of the Day:"If you don’t make mistakes, you’re not working on hard enough problems. And that’s a big mistake.” — Frank Wilczek
March 8, 2013
Bill Gates Urges Government to Spend More on Energy R&DMicrosoft Chairman and Co-Founder Bill Gates urged the U.S. government and other countries on Thursday to spend more money on energy research and development (R&D) as a catalyst to innovation he believes will bring more options to people around the world.
"It’s an incredible travesty that we’re spending so little,” Gates, a billionaire philanthropist, said during a question and answer session at the IHS CERAWeek industry event in Houston.
He said the shortfall in government spending is a pitfall of capitalism.
"It’s always pretty stunning how low the energy (research and development) number is,” he said, adding, "We should put a lot more into basic research.”
Gates said some money is being spent on energy R&D but largely outside of government.
"I think it’s fantastic for the world that this venture capital ... is focused on energy,” he said.
Gates said with energy innovation comes risk, and when it comes to meeting the world’s energy needs, he believes more efforts are worth the risk.
"It’s an incredibly daunting field,” Gates said. "There are going to be a lot of failures.”
Click here for more information.Today's LinksKatoen Natie to Build Petchem Storage, Processing Facility in La.Statoil ‘Gets Cold Feet’ Off Alaska
Valero Refinery Revived on Eagle Ford CrudeOil, Gas Industry Seeks to Address New Face of RiskEarl’s Pearl of the Day:"Speak when you are angry — and you will make the best speech you’ll ever regret.” — Laurence J. Peter
March 7, 2013
GM’s Akerson Calls for National Energy PolicyThe head of General Motors (GM) called Wednesday for President Obama to create a national panel to craft a long-term energy policy, built on the nation’s newfound bounty of natural gas and tight oil.
Daniel Akerson, who has served as GM’s chairman and CEO since 2010, also said his company is building more natural gas vehicles — including those that can run on either compressed natural gas or gasoline until the alternative fuel is more widely available — in order to take advantage of the cleaner burning fuel.
Akerson spoke Wednesday to delegates at the IHS CERAWeek energy conference, and his call for a long-term national energy policy echoed that of other executives, who said their companies are reluctant to invest in multibillion-dollar infrastructure projects without some assurance of where the country is headed.
"Everywhere you look, there’s an opportunity to seize the energy high ground,” he said.
He suggested a "blue-ribbon commission” made up of energy producers and consumers, asked to develop a plan to improve the nation’s standard of living by extending the national shale gas and tight oil "dividend.”
That would include affordable energy, cleaner air and water, and a lower trade deficit, he said.
Click here for more information.Today's LinksBP, Transocean Officials Botched Tests, Witness TestifiesExxon to Invest $190 Billion Over Next 5 Years on New Resource OpportunitiesDearth of Skilled Workers Imperils $100 Billion ProjectsU.S. Interests in Middle East Remain Despite Shale RevolutionEarl’s Pearl of the Day:"If you want others to be happy, practice compassion. If you want to be happy, practice compassion.” — The Dalai Lama
March 6, 2013ExxonMobil Plans Multibillion-dollar Baytown Plant ExpansionExxonMobil is expanding the capacity of its Baytown complex to boost its capacity for turning natural gas into petrochemical building blocks, a multibillion-dollar upgrade the company believes makes sense even if gas prices rise from lows that have driven a manufacturing surge.
Irving-based ExxonMobil is the largest U.S. producer of natural gas and plans to leverage its bounty into a huge expansion of its petrochemical facilities in the Gulf Coast, including the new steam cracking capacity at its Baytown plant. It did not put a precise price tag on the work.
When the permits are approved, construction of the plant will take about three years, and ExxonMobil says the plant could be up and running by the end of 2016.
"The project is going to be an expansion of our Baytown project, which is already the largest integrated refining complex in the country,” said Steve Pryor, president of ExxonMobil Chemical Co. "It builds on our strengths as an integrated petrochemical company and will take advantage of all the shale gas that is coming on.”
The expansion will increase the Baytown plant’s capacity to convert ethane, a natural gas liquid, into the chemical building block ethylene, and from that to produce the plastic polyethylene.
Pryor said the expanded plant will have features that will keep it economically competitive, even if the price of natural gas rises.
Click here for more information.Today's LinksU.S. Becomes World’s Biggest Fuel ProducerU.S. Keystone Decision May Delay TransCanada Six MonthsBest Practices for Oil, Gas Water Management Still EvolvingAfter Chįvez, a Question of His Country’s OilEarl’s Pearl of the Day:"Nothing can bring you peace but yourself.” — Ralph Waldo Emerson
March 5, 2013
Shell to Build LNG Plants in U.S., Canada for Transport FuelRoyal Dutch Shell said it will build two small-scale gas liquefaction units in Louisiana and Ontario as part of an investment plan to unlock value in the use of LNG as a transport fuel.
"These two units will form the basis of two new LNG transport corridors in the Great Lakes and Gulf Coast regions,” Shell said in a statement on Tuesday.
Shell, which has bet the most heavily of all the top oil firms on a future for cleaner-burning natural gas, said it is using its expertise to make LNG a viable fuel option for the commercial market.
In the Gulf Coast corridor, Shell plans to install the liquefaction unit at its Geismar Chemicals facility to supply LNG along the Mississippi river and intra-coastal waterway and to exploration areas offshore in the Gulf of Mexico and onshore in Texas and Louisiana.
Shell plans to build the liquefaction unit at its Sarnia Manufacturing Center for the Great Lakes corridor. This project will supply LNG fuel to all five Great Lakes, their bordering U.S. states and Canadian provinces, and the St. Lawrence Seaway.
Each unit will be able to produce 250,000 tons of LNG, Shell said.
The two liquefaction units are expected to begin operations and production in about three years after final regulatory permission.
Click here for more information.Today's Links
Chemical Industry Surging on U.S. GasBP Executive Defends Report on Gulf Oil SpillSasol Progresses with Lake Charles Cracker ProjectTalent Gap Seen in Oil and Gas Industry Work ForceEarl’s Pearl of the Day:"A mind troubled by doubt cannot focus on the course to victory.” — Arthur Golden
March 4, 2013
Obama Nominates McCarthy for EPA, Moniz for Energy ChiefPresident Obama on Monday nominated Gina McCarthy to head the Environmental Protection Agency (EPA) and Ernest Moniz as the next Energy secretary.
At a White House event, Obama heralded the picks as a "great team” that would address his "top priorities going forward.”
"They’re going to be making sure we’re investing in American energy, we’re doing everything we can to combat the threat of climate change, we’re going to be creating jobs and economic opportunity in the first place,” said the president. "They are going to be a great team. And these are some of my top priorities going forward.”
McCarthy, currently the EPA’s assistant administrator for air and radiation, would replace former EPA Administrator Lisa Jackson, who left the agency in February.
Moniz, Obama’s Energy pick, is a physicist at the Massachusetts Institute of Technology (MIT), where he directs the MIT Energy Initiative. He has long been seen as the front-runner to replace outgoing Energy Secretary Steven Chu.
The selections of Moniz and McCarthy will round out Obama’s second-term energy and environment team, following his nomination last month of Sally Jewell to head the Interior Department.
Click here for more information.Today's LinksBP Spill Judge to Hear From Explosion Survivor This WeekBarnett Shale to Remain Major Contributor to U.S. Gas ProductionLayers of Energy Topics Will Fuel CERAWeek Conference in HoustonU.S. Review Gives Boost to Keystone PipelineEarl’s Pearl of the Day:"Truth, like surgery, may hurt, but it cures.” — Han Suyin
March 1, 2013Louisiana Group Plans to Build Largest Methanol Plant in North AmericaSouth Louisiana Methanol (SLM) is planning to construct what it claims to be the largest methanol manufacturing plant in North America, with an investment of $1.3 billion.
Built in St. James Parish, La., the SLM methanol production plant will convert 163,000 btu per day of natural gas to 5,000 metric tons per day (mtpd) of methanol and is expected to make the company directly competitive with overseas plants.
SLM CEO Barry Williamson said Louisiana offers a high-quality work force, access to abundant natural gas and a strong network of pipelines and transportation facilities, making it an ideal partner for the production and distribution of methanol.
"We will utilize proven technology to build the largest methanol plant in North America, which will consume CO2 for a more efficient process, ensuring strong environmental stewardship,” Williamson added.
"The conversion of natural gas to methanol offers natural gas producers an alternative avenue to LNG, enabling the creation of products, which are consumed at home on a long-term basis.”
The construction of the methanol plant is scheduled to commence later this year, while the full commissioning and start-up is slated for 2016.
Click here for more information.Today's LinksBP Oil Spill Probe Did Not Address Cost OverrunsCanada Resources Minister Doesn’t Expect Keystone RejectionLawsuit Challenges Alaska Petroleum Reserve AccessJudge to Hear Suit over Grand Canyon Mining BanEarl’s Pearl of the Day:"Responsibility walks hand in hand with capacity and power.” — J. G. Holland
February 28, 2013
Coast Guard Responds to Oil Spill off Louisiana ShoreThe U.S. Coast Guard is investigating a report of an inactive wellhead spewing oily water into marshland about 50 miles south of New Orleans.
According to the Coast Guard the accident occurred Tuesday around 8 p.m. when a 42-foot crew boat came into contact with the wellhead nine miles south of Port Sulphur, La., and compromised the dormant geyser.
No injuries were reported.
The wellhead is owned by Swift Energy and has been inactive since December of 2007. Swift Energy’s president, Bruce Vincent, said the well was shut down because it was considered under producing.
The Coast Guard does not know how much of the water and oil mix is flowing out of the well but Vincent said the last time the well flow was assessed, only 18 barrels of oil a day were flowing. That pales in comparison to the 2010 BP oil spill, which released an average of about 60,000 barrels a day or 2.5 million gallons.
Vincent said officials at the company are developing plans to control the flow and hope to have the well capped in the next couple of days. He also noted the flow is not continuous. "It’s what I would call surging or burping,” he said. "It flows for a while then stops flowing and builds up pressure then flows again.”
Swift Energy has deployed a small army to clean up the spill. "We have containment booms around the wellhead — those are in place,” said Vincent. "We also have skimmers skimming up the oil that’s contained within that boom area. We also have been deploying additional booms to protect the marsh area.”
Click here for more information.Today's LinksBP Safety Expert Returns to Stand in Gulf Oil Spill TrialShell Suspends Drilling in Alaska’s ArcticGasoline Futures Slump as Northeast Supply Worries EaseSenator Meets With Interior Nominee JewellEarl’s Pearl of the Day:"I’d rather be a failure at something I love than a success at something I hate.” — George Burns
February 27, 2013
Witness Says Deepwater Horizon Accident Was ‘Classic Failure of Management’An expert witness for plaintiffs suing BP said the 2010 Deepwater Horizon accident was "a classic failure of management and leadership in BP.”
Robert Bea, a University of California Berkeley engineering professor who has worked as a safety consultant for BP starting in 2001, said Tuesday he sent many warnings to the company’s management in the years before the accident about how cost-cutting would hurt the safety of operations.
"It was too lean,” Bea said of BP’s operations after it reduced spending.
Bea also criticized BP’s own internal investigation of the Deepwater Horizon incident for failing to investigate management decisions leading up to the accident. Instead, he said, BP’s study, known as The Bly Report, focused on the direct cause of the explosion on the drilling rig and the role equipment and crew on the rig played.
During cross examination, Mike Brock, a lawyer for BP, tried to challenge the credibility of Bea’s testimony, emphasizing the limits of his expertise and emphasizing the role the companies suing BP played in providing him information for a report he did that was critical of BP’s work leading up to the blowout.
"You understood that plaintiff’s legal team was focused on finding documents that hurt BP, not helped BP?” Brock asked.
Bea said he and his colleagues "were searching for the truth, the facts.”
BP has argued the accident was due to many errors and misjudgments by all of the companies involved in the project, including rig owner Transocean and cement contractor Halliburton.
Click here for more information.Today's LinksTexas Oil Production Surpasses NorwayLouisiana 8th in U.S. for Export Increases in 2012CEOs Unveil Their Vision for U.S. Energy PolicyAlaska Seeks Consultant to Help Promote GasEarl’s Pearl of the Day:"It is best to do things systematically, since we are only human, and disorder is our worst enemy.” — Hesiod
February 26, 2013Engineering Expert Takes Stand as Testimony Starts in Gulf Spill TrialAn engineering professor who specializes in risk assessment and management took the stand Tuesday in the civil trial over the 2010 Gulf of Mexico oil spill disaster.
Robert Bea of the University of California-Berkeley is discussing safety processes at the companies involved and other issues related to the causes of the Macondo well blowout and Deepwater Horizon rig explosion. Bea was consulted by the White House commission that investigated the explosion and has produced several reports faulting BP and its partners for their attitude toward safety.
One of his reports, produced Aug. 26, 2011, was admitted into evidence as his testimony began. Bea, a professor emeritus in civil and environmental engineering, is co-founder of the Center for Catastrophic Risk Management. He also is a former engineer at Shell Oil.
Also among the first witnesses is Lamar McKay, the former head of BP America. Lawyers this week also are expected to play video footage of former BP CEO Tony Hayward’s deposition in the case.
During the first phase of the trial, expected to last up to three months, U.S. District Judge Carl Barbier in New Orleans will hear evidence on causes of the blowout and will determine how to allocate fault, which may or may not include percentages of blame.
The second phase will address the amount of oil that spilled.
Barbier also is expected to determine if the disaster resulted from gross negligence. Further proceedings could determine how much in punitive damages should be assessed, and separate trials could determine damage awards for individuals and businesses that opted out of a multibillion-dollar settlement last year between BP and private parties claiming economic or health damages.
Click here for more information.
http://fuelfix.com/blog/2013/02/26/engineering-expert-takes-stand-as-testimony-starts-in-gulf-spill-trial/Today's LinksCrude Export Ban No Match for Lightest U.S. Shale OilChevron May Consider Expanding LNG Export Project in CanadaUpgrades Needed to Fuel Domestic Energy BoomMiller Energy Brings Alaska Well On lineEarl’s Pearl of the Day:"In the business world, the rearview mirror is always clearer than the windshield.” — Warren Buffett
February 25, 2013Gulf Oil Spill Trial Starts with Billions of Dollars at Stake for BP, OthersBillions of dollars are at stake as a federal civil trial over the Gulf of Mexico oil spill starts today nearly three years after the deadly disaster.
Opening statements are expected to last the entire day in the maritime trial of the century as British oil giant BP defends itself against damages sought by the U.S. government and states affected by the 2010 spill.
Since the Macondo well blew out and the Deepwater Horizon rig exploded some 50 miles off the coast of Louisiana, BP has already spent more than $24 billion on costs related to the disaster and compensating victims.
It also has agreed to pay $4.5 billion in penalties to resolve criminal charges and related securities violations, and it expects to pay out $7.8 billion as part of a settlement of a class action lawsuit with thousands of spill victims. People who have opted out of that deal have preserved their claims in the civil case.
Those figures pale in comparison to what the company faces if the federal government and Gulf States have their way at the trial. They will try to prove BP acted with gross negligence, a finding that if found by the judge would allow for the highest civil penalties to be imposed.
According to a recent BP filing, the cumulative amount of economic damage claims being asserted by the Gulf States and local communities is roughly $34 billion. That figure does not include federal Clean Water Act claims or natural resources damage claims. BP faces a maximum Clean Water Act penalty of $17.6 billion.
Nearly seven hours have been set aside for opening statements in a trial over the deadly rig explosion in the Gulf that resulted in the nation’s worst offshore oil spill.
Click here for more information.Today's LinksBP Gulf of Mexico Spill, From Disaster to Trial: TimelineCheniere: First LNG Export Facility to Start in Late 2015Fight over Gas Exports is a Prelude to Oil Exports BrawlShell Reassesses Development Plan for North Sea Fram FieldEarl’s Pearl of the Day:"It’s not the will to win that matters ... everyone has that. It’s the will to prepare to win that matters.” — Paul "Bear” Bryant
February 22, 2013Salazar Signs Management Plan for Alaska ReserveA management plan for the vast National Petroleum Reserve-Alaska (NPR-A) splits an Indiana-size area roughly in half between conservation areas and land available for petroleum development, and allows pipelines carrying oil or gas to be constructed through the reserve.
Interior Secretary Ken Salazar announced Thursday he had signed a record of decision for the reserve west of Prudhoe Bay and south of Barrow on Alaska’s North Slope. He said the balanced approach under the plan was the result of extensive local testimony.
"This comprehensive plan will allow us to continue to expand our leasing in the NPR-A, as has happened over the past three years, while protecting the outstanding and unique resources that are critically important to the culture and subsistence lifestyle of Alaska natives and our nation’s conservation heritage,” Salazar said.
Perhaps as important to the petroleum industry was the commitment to access through the reserve for a pipeline that can connect oil drilled offshore in the Chukchi and Beaufort seas to the trans-Alaska pipeline. The management plan provides "explicit confirmation” that potential pipelines carrying oil or gas can be constructed through the reserve, Salazar said in his announcement.
The Bureau of Land Management manages the reserve and estimates lands made available for development contain nearly three-fourths of estimated economically recoverable oil and over half of the estimated economically recoverable gas.
Click here for more information.Today's LinksEU Reaches Preliminary Deal on Offshore Oil, Gas Safety RulesU.S. Railcar Oil Deliveries Hit Record in 2012 Kinder Morgan Energy Partners Planning Houston Rail ProjectIsrael Gives Go-Ahead to Drilling on Golan HeightsEarl’s Pearl of the Day:"Live in such a way that you would not be ashamed to sell your parrot to the town gossip.” — Will Rogers
February 21, 2013Deep Water Oil’s Lasting AllureAs the U.S. energy boom heats up in landlocked states from North Dakota to Oklahoma, some oil companies are still making multibillion dollar bets on finding crude in the deepest waters of the Gulf of Mexico.
About 600 workers at a shipyard in Corpus Christi, Texas, are building three story steel structures that will make up Chevron’s outpost many miles offshore, in an area geologists say is promising, but where almost no oil has yet been pumped.
"It’ll be the first house in the neighborhood,” said Glenn Lohfink, the Chevron construction manager at the site.
The target Chevron is aiming at is called the Lower Tertiary, considered by many to be the Gulf of Mexico’s last frontier. Its heart is buried thousands of feet below sea level, hundreds of miles from shore and almost a three-hour helicopter ride from New Orleans.
Lower Tertiary oil fields haven’t been fully decoded by geologists, but Chevron is investing $7.5 billion just to start tapping its first two discoveries there, the Jack and St. Malo fields. The company expects to install a platform with the capacity to produce 177,000 barrels of oil and natural gas a day, generating annual revenue worth billions of dollars at current prices of roughly $96 a barrel for decades to come.
Chevron’s platform will serve as a beachhead for further exploitation of the area, connecting not only Jack and St. Malo but neighboring fields such as ExxonMobil’s Julia discovery.
Click here for more information.Today's LinksShell’s Olympus Platform Readies for Gulf of Mexico JourneyU.S. Court Decision Could Reduce BP’s Final Oil Spill PenaltyOfficial: Alaska ‘Well Positioned’ for LNG Export PotentialJapan Prime Minister to Ask Obama for Shale ExportsEarl’s Pearl of the Day:"Achievable goals are the first step to self improvement.” — J. K. Rowling
February 18, 2013Companies Detail 800-Mile Alaska Gas PipelineExxonMobil, ConocoPhillips, BP and TransCanada said Friday they plan to develop a natural gas pipeline from Alaska’s North Slope to a port where the gas would be prepared for export as part of a project expected to cost $45 billion to $65 billion.
Under the companies’ plan, or "concept,” an 800-mile pipeline would be built with the capacity to ship 3 billion to 3.5 billion cubic feet of gas to an area near a port where the gas would be turned into a liquid. The liquefied natural gas would be stored in tanks and loaded onto tankers from a loading jetty with two berths, according to a plan attached to the letter. In addition to those facilities, a natural gas treatment facility would be built on the North Slope, near Prudhoe Bay, near where the gas would be produced.
The liquefaction plant would be built on a 400-acre to 600-acre site and be able to process 15 million to 18 million tons of gas a year, executives with the companies said in the letter.
"We remain committed to responsibly developing the State’s considerable resources and will keep you advised of our progress,” read a letter to Alaska Governor Sean Parnell, which was signed by Randy Broiles at ExxonMobil, Trond-Erik Johansen at ConocoPhillips, Janet Weiss at BP and Tony Palmer at TransCanada.
If built, the gas pipeline and export facility would be one of the largest LNG projects in the world, said Gov. Parnell, who has strongly supported development of Alaska’s gas and a pipeline to ship the gas to overseas markets. As part of an agreement with the state, the companies promised to provide periodic updates on their pipeline development plans.
Click here for more information.Today's LinksApache Prevents Blowout in Gulf of Mexico WellChina Says ConocoPhillips Can Resume ProductionObama Faces Risks in Pipeline DecisionOil’s New Reign in Texas Draws Comparisons to the KingdomEarl’s Pearl of the Day:"Nothing is impossible. Some things are just less likely than others.” — Jonathan Winters
February 15, 2013Judge Approves Transocean SettlementA federal judge in New Orleans approved Transocean’s $400 million criminal settlement with the Justice Department over the 2010 Deepwater Horizon accident, a spokesman for the company said Thursday.
Judge Jane Triche Milazzo accepted Transocean’s guilty plea to one criminal misdemeanor violation of the Clean Water Act for failing to properly monitor the well at the time of the deadly 2010 blowout in the Gulf of Mexico, the spokesman said.
The company will pay a $100 million fine within 60 days and $150 million each over the next three to five years to the National Fish and Wildlife Foundation and the National Academy of Sciences for oil spill response and habitat rehabilitation.
Transocean also agreed to pay $1 billion in fines for civil violations of the Clean Water Act, but that settlement must be approved separately by another judge. The settlement agreements were announced in early January.
Oil giant BP, which was leasing the rig to drill an exploratory well, agreed to pay $4.5 billion in November to settle all criminal and some civil charges in the case.
BP still faces what could be many billions of dollars in fines for violating the Clean Water Act, as well as billions of dollars in payments under the Natural Resources Damages Assessment process. The first phase of a civil trial over culpability in the accident is scheduled to begin before a federal judge in New Orleans on Feb. 25.
Click here for more information.Today's LinksAirgas Announces Plans for New Carbon Dioxide Plant
Governors Ask Nominee Jewell to Open Atlantic Waters for Exploration
Marcellus Shale Gas Boom Expected to Slow in 2013Lebanon Kicks Off Offshore Licensing RoundEarl’s Pearl of the Day:"An honest man can feel no pleasure in the exercise of power over his fellow citizens.” — Thomas Jefferson
February 14, 2013TransCanada Official: Keystone Decision from State Dept. 2-3 Months AwayA senior executive of TransCanada Corp. said the company expects final State Department approval for the Keystone XL pipeline expansion in two to three months, following a final U.S. environmental assessment, which he said was "imminent.”
Alexander Pourbaix, TransCanada’s president for energy and oil pipelines businesses, said based on feedback from Washington, he would expect a final decision from State in the first half of 2013. He said after State receives a final U.S. government-ordered environmental assessment, which he said he would expect to be finished within weeks, the agency would have all the pieces of information it needs to make a decision.
TransCanada is awaiting State Department approval for the Keystone XL project, which envisions increasing oil export capacity from Canada to the United States. Early last year, the Obama Administration rejected the line — which needs State approval because it crosses the U.S. border — but said it was open to reconsidering the pipeline.
Click here for more information.Today's LinksAPI: 69% of Voters Support Keystone XL PipelineExxonMobil Grows Arctic Reach in RussiaNexen Secures U.S. Approval of Its Sale to CNOOC of ChinaPuzzled at the PumpEarl’s Pearl of the Day:"A people that values its privileges above its principles soon loses both.” — Dwight D. Eisenhower
February 13, 2013
President ‘Will Keep Cutting’ O&G Red TapeIn his State of the Union address Tuesday night, President Obama pledged to keep cutting red tape in the energy sector and to speed up new oil and gas permits, while also announcing the launch of a new oil and gas sector-funded Energy Security Trust aimed at developing technologies to help wean U.S. vehicles off oil.
President Obama noted the recent boom in natural gas had led to cleaner power and greater energy independence.
"That’s why my administration will keep cutting red tape and speeding up new oil and gas permits. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water,” he said.
President Obama also proposed the launch of a new Energy Security Trust that would be funded by revenues from the oil and gas sector. This trust "will drive new research and technology to shift our cars and trucks off oil for good,” he said.
Click here for more information.Today's LinksBig Oil Warms Up to Arctic Despite ChallengesStatoil Pipeline May Pave Way for Permanent Arctic HubNorth America Oil, Gas Resources Main Focus of 2012 M&A ActivityNorth Dakota Governor: Refinery Construction Could Start This SpringEarl’s Pearl of the Day:"Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight.” — Benjamin Franklin
February 10, 2013Keystone XL Pipeline Action is Near, Kerry SuggestsSecretary of State John F. Kerry says he would stick to a "very open and transparent” permitting process for the proposed Keystone XL oil pipeline, adding, "I hope we will be able to make an announcement in the near term.”
Emerging from a meeting with Canadian Foreign Minister John Baird, Kerry said, "We have a legitimate process underway, and I’m going to honor that.” He said it was "fair and accountable.”
It was Kerry’s first meeting as secretary with a foreign diplomat, a nod to neighborliness but also to the importance of settling the Keystone XL issue.
Baird said he and Kerry talked about making a decision "based on science.”
"I also underlined on the environment, on greenhouse gas emissions, we’ve accepted the same reductions, targets as President Obama has, 17-percent reduction,” Baird said. He noted Canada is planning to phase out all coal-fired electricity plants.
The State Department will soon release a new environmental impact statement, based on TransCanada’s revised application. That will trigger a several-week period for public comments and responses.
Click here for more information.Today's LinksPickens: Lack of Gov’t Leadership ‘Missing Link’ in O&G DevelopmentEnergy Exports Boosting U.S. Trade PositionCEA: Five Oil & Gas Predictions for 2013Australian Oil Workers Are World’s Best PaidEarl’s Pearl of the Day:"Sometimes the questions are complicated and the answers are simple.” — Dr. Seuss
February 8, 2013U.S. to Lease 38 Million Acres in Gulf Next MonthThe U.S. Department of the Interior has finalized plans to auction oil and gas drilling leases for as much as 38 million acres in the Central Gulf of Mexico next month, giving oil companies a chance to expand their footprint in the booming offshore oil region.
The lease sale scheduled for March 20 in New Orleans will offer all unleased areas in the Central Gulf of Mexico Planning Area — offshore Louisiana, Mississippi and Alabama — which the department said could lead to the production of as much as nearly a billion barrels of oil and nearly 4 trillion cubic feet of natural gas.
The Central Gulf was the site of the 2010 Deepwater Horizon blowout. Drilling activity has rebounded, and companies have indicated they expect the boom to continue in deepwater areas, where exploration and production companies are snapping up newly built rigs capable of drilling to greater depths.
The upcoming sale includes shallow water acreage as close as three miles from the coast as well as tracts as far as 230 miles offshore in waters more than 11,000 feet deep.
The Bureau of Ocean Energy Management’s five-year plan calls for one more Gulf of Mexico lease sale to be held this year in the Western Gulf. There are four more Central Gulf sales planned through 2017, as well as several in other areas of the Gulf of Mexico and off the coast of Alaska.
Click here for more information.Today's LinksDomestic Crude puts U.S. Refineries in a Sweet SpotDOI Calls for Drillers to Inspect, Replace Bolts after Defects FoundStranded Shell Drill Vessel Won’t Face State TaxJapan’s Tepco Turns to U.S.’s Cameron for LNGEarl’s Pearl of the Day: "Take chances, make mistakes. That’s how you grow. Pain nourishes your courage. You have to fail in order to practice being brave.” — Mary Tyler Moore
February 7, 2013BP to Contest $34B Gulf Suits from State, Local GovernmentsBP plans to "vigorously contest” legal claims for tens of billions of dollars in damages stemming from the 2010 Gulf of Mexico disaster, describing the lawsuits as "seriously flawed.”
Demands from U.S. state and local governments for $34 billion risk ballooning BP’s overall bill for the Deepwater Horizon rig explosion and oil spill to more than $90 billion, more than double the amount the U.K. oil giant has already provisioned for.
Alabama, Mississippi, Florida and Louisiana are seeking the money in compensation for economic losses and property damage caused by the incident. BP is already facing spill costs of around $58 billion, which includes penalties, damages and cleanup costs the U.K.-based energy giant has already paid out, committed to spend or could yet be fined when the matter goes before a New Orleans judge in a civil trial due to start Feb. 25.
BP Chief Financial Officer Brian Gilvary said the bulk of the state claims are based around losses in potential tax revenues and as such will be hard to prove.
"That will be an interesting thing to try to prove given we have provided one of the biggest fiscal stimuli the Gulf has ever seen; we hired up over 40,000 people to deal with it and paid taxes as a consequence,” Gilvary said.
BP has already provided for what it believes is a "fair and reasonable” assessment of the state economic losses in its $42.2 billion provision, Gilvary said. But he declined to say how much had been allocated.
Click here for more information.Today's LinksOilmen Hope to Make New History at SpindletopU.S. Coal Finds Warm Embrace OverseasHoward Midstream to Build Gas Plant, Rail Hub in S. TexasWhy Should the Obama Administration Approve the Keystone XL Pipeline?Earl’s Pearl of the Day:"Success is not final, failure is not fatal; it is the courage to continue that counts.” ― Winston Churchill
February 6, 2013U.S. DOE to Move Carefully on LNG Export RequestsThe U.S. Department of Energy plans to move carefully as it considers applications to export LNG to countries that do not have free trade agreements with the U.S., Christopher A. Smith, deputy assistant U.S. energy secretary for oil and gas in DOE’s fossil energy office, said at a meeting of state utility regulators.
"This is a tremendously important decision,” he told the National Association of Regulatory Commissioners Gas Committee during NARUC’s 2013 winter meeting. "Our approach is to make sure we’ve done all the proper groundwork and analysis to create a transparent process that withstands public scrutiny.”
Federal law stipulates that LNG agreements with countries that are United States free trade partners must be processed immediately, but applications involving other nations have to be reviewed to determine if they would be in the national interest. DOE has 16 such applications pending, and recently opened a reply period to comments it received about a general policy.
Click here for more information.Today's LinksWhite House Weighs Emission RulesDeep-Sea Drilling Muddies Political Waters
Petrobras Working to Sell Texas Refinery, But Not at Any Price - CEOOccidental Petroleum Seeks to Build Texas Ethylene PlantEarl’s Pearl of the Day:"Truth is the only safe ground to stand on.” — Elizabeth Cady Stanton
February 5, 2013Offshore Boom Will Boost Equipment SuppliersRecent deepwater discoveries combined with a shortage of drilling vessels should make for a booming year for offshore equipment supplies, a Barclay’s report said Monday.
Platform and rig builders are struggling to keep up with the demand for offshore drilling rigs, as exploration throughout the Gulf of Mexico, Brazil and Africa continues to grow. Many offshore projects are moving from exploration to production, further increasing the demand for offshore equipment.
"We anticipate roughly 80 jackups and 50 floaters (drillships) will be delivered into the offshore market over the next two years and expect relatively few of these units will displace rigs currently working,” Barclays wrote.
About 40 percent of the 50 drillships have been contracted out through 2014, a further indication of a growing demand for the equipment that will be needed for drilling.
Click here for more information.Today's LinksCanada Backs Export License for Shell LNG ProjectShipping Landlocked Alberta Oil North an OptionAmerica’s Plastic RevivalCoal, Solar Companies Claim Super Bowl Outage Makes Their CaseEarl’s Pearl of the Day:"We must learn to live together as brothers or perish together as fools.” — Martin Luther King Jr.
February 4, 2013Genesis Energy to Expand Terminal, Build Crude Pipeline to Exxon’s Baton Rouge RefineryGenesis Energy announced the company plans to invest approximately $125 million to improve existing assets and develop new infrastructure in Louisiana to connect into ExxonMobil’s Baton Rouge Refinery. The project is expected to generate positive economic benefits both for the community of Baton Rouge and the state of Louisiana.
"With the expansion of our operations in Louisiana, Genesis looks forward to a strong future in the state and to increasing our contribution to the local economy,” Genesis CEO Grant Sims said.
Genesis will improve its existing terminal at Port Hudson and build a new 18-mile crude oil pipeline connecting Port Hudson to the Maryland Terminal and continuing downstream to the Anchorage Tank Farm. The company also plans to build a new crude oil unit train facility at the Baton Rouge Maryland Terminal.
The new 18-mile pipeline will have an ultimate capacity of about 350,000 bpd, and in addition to its connection to the ExxonMobil Baton Rouge Refinery, the pipeline will have potential access to other local refineries representing approximately 140,000 bpd.
Project construction is scheduled to begin in early 2013. The Port Hudson upgrades and new crude oil pipeline are expected to be completed by the end of 2013.
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Today's LinksEnergy Secretary Chu to ResignVast Oil Reserve May Now Be Within ReachFor BP, the Cleanup Isn’t Entirely Over‘Abnormality’ Causes Super Bowl OutageEarl’s Pearl of the Day:"You make a living by what you get; you make a life by what you give.” —Winston Churchill
January 31, 2013
Ethanol Industry Turns to Plant Residue, Scraps
After decades of talk, the ethanol industry is building multimillion-dollar refineries in several states that will use corn plant residue, wood scraps and even garbage to produce the fuel additive.
The breakthrough comes at a key time for the industry, after the drought heightened criticism about the vast amount of corn used to brew up ethanol rather than be transformed into animal feed or other foods. The corn crop already was smaller than expected because of drought last year, and livestock groups were especially critical of how 40 percent of the crop being diverted toward ethanol caused corn prices to soar.
The new cellulosic ethanol technology could quiet that criticism while also making use of material largely seen as worthless.
For more information, click here.
Today's Links
Kinder Makes Shale Grab with $4 Million Deal
Petrolia Confirms Hydrocarbons at Bourque Well
Rodriguez Well Makes Significant Gas Condensate Discovery
Earl’s Pearl of the Day: "The highest reward for a man’s toil is not what he gets for it but what he becomes by it.” — John Ruskin
January 30, 2013
Offshore Drillers Could Learn from Aviation
They did, in fact, ground the planes.
After the recent problems with batteries on the Boeing 787, the Federal Aviation Administration ordered all of the aircraft flown by U.S. carriers removed from service.
Rather than using commercial aviation as an excuse, the offshore energy industry should use it as a model for improving safety.
Among safety experts, the exploding batteries aboard the Dreamliners are known as a leading risk indicator. In other words, they could be a sign of a bigger problem.
For more information, click here.
Today's Links
Cheapest Wind Energy Spurring Renewables Deals
Power Plant Announced for South Texas
API Launches Oil Spill Research Website
Victoria Finds More Customers for Cameroon Gas
Earl’s Pearl of the Day: "If you are not the hero of your own story, then you’re missing the whole point of your humanity.” — Steve Maraboli
January 29, 2013
United States Will Remain Largest Source of New Oil Growth in 2013
Topping the list of the big oil and gas stories in 2012 was the dramatic surge in U.S. oil production. In 2013, the United States will remain the largest source of new oil growth worldwide aided by the shale boom.
The big turnaround of U.S. oil production brought by new light tight oil developments was fully recognized in 2012, putting to rest the long-held notion that domestic oil production was in terminal decline. The rise in domestic oil output and the expectation that U.S. oil development will continue to grow amid high oil prices prompted some market observers to predict the United States could become the world’s largest oil producer, upstaging Saudi Arabia, by 2020.
For more information, click here.
Today's Links
Chattanooga Could Be Hot Spot for Fracking
National Mining Association Upbeat About 2013
Olympus Hull Arrives in Gulf of Mexico
UTEC Consolidates Middle East Position
Earl’s Pearl of the Day: "Not what we have, but what we enjoy, constitutes our abundance.” — Epicurus
January 28, 2013Billions in Gas and Drilling Royalties Transform Lives
Private landowners are reaping billions of dollars in royalties each year from the boom in natural gas drilling, transforming lives and livelihoods even as the windfall provides only a modest boost to the broader economy.
For some landowners, the unexpected royalties have made a big difference.
"We used to have to put stuff on credit cards. It was basically living from paycheck to paycheck,” said Shawn Georgetti, who runs a family dairy farm in Avella, about 30 miles southwest of Pittsburgh.
For more information, click here.
Today's Links
Drilling Boom Creates Long Lines in West Virginia
Smaller Offshore Drillers Enjoy Solid Returns
Russia to Receive Up to $5 Billion from Offshore Licenses in 2013
Will New York Join the Fracking Club?
Earl’s Pearl of the Day: "The future belongs to those who believe in the beauty of their dreams.” — Eleanor Roosevelt
January 25, 2013
Lawmakers Urge Exports of U.S. Natural Gas
The United States can safely export more of its natural gas bounty without causing prices to skyrocket, 110 lawmakers told Energy Secretary Steven Chu on Thursday.
The assertion directly responds to the biggest argument mounted against more foreign sales of the fossil fuel, mostly by a cadre of chemical makers and manufacturers that rely on natural gas supplies to power their plants and as a feedstock they transform into other materials.
The lawmakers — 89 Republicans and 21 Democrats — said market forces will keep prices in check, even if American producers sell natural gas to European and Asian markets where gas fetches three and four times as much as it does in the United States.
For more information, click here.
Today's Links
AGA Not Opposed to U.S. LNG Exports
A Compelling Personal Story and a Push for Energy Independence
Closed Refinery Revived with Eagle Ford Crude
Johan Sverdrup Appraisal Well Successful
Earl’s Pearl of the Day:"Successful people are not gifted. They work hard, then succeed on purpose.” — G.K. Nielson
January 24, 2013
Railroads Focus on Natural Gas
U.S. railroads are looking at natural gas to meet a 2015 deadline for lowering emissions, but it’s unlikely more than a handful of locomotives will be using the fuel by then.
"We don’t want to kid ourselves about how long a transformation will take,” said David Hill, vice president of operations with Encana, which is working with Canadian National Railway on a project to power locomotives using liquefied natural gas (LNG).
He and other speakers at the World LNG Fuels Conference, which ended Wednesday at the George R. Brown Conference Center, said natural gas could help railroads lower emissions and save on skyrocketing diesel fuel bills.
For more information, click here.
Today's Links
Cyprus Signs Gas Drilling Deal with Consortium
Oil Prices Get Boost from China Manufacturing
Norway to Review Security at Domestic Oil, Gas Facilities
Sanchez Energy Offers Pure Play on Focus on Eagle Ford
Earl’s Pearl of the Day:"Nothing is a waste of time if you use the experience wisely.” — Auguste Rodin
January 23, 2013
NC Fracking Group Tackles Disclosure Rules
Interest groups hashing out fracking regulations started work Tuesday by tackling rules on what the public will be told about chemical additives pumped underground and how broad trade secrecy exceptions will be allowed.
The group bringing together oil and gas representatives, state government agencies, environmentalists, and advocates for cities and rural communities started debating what drillers must disclose about chemicals used during the process called hydraulic fracturing, or fracking. The process involves pumping a mixture of water, sand and chemicals to crack open underground shale rock and release natural gas.
For more information, click here.
Today's Links
Eagle Ford November Crude Output Rises 70 Percent from a Year Earlier
Ikea to Double Renewable Energy Investment to $4 Billion by 2015
Thousands of Jobs Will Open Up as Western Australia’s LNG Industry Develops
Chevron Signs Petroleum Deals in Offshore Morocco
Earl’s Pearl of the Day: "Confidence is everything. From there, it’s a small step to winning.” — Craig Stadle
January 22, 2013
Friendly Business Environment Fuels U.S. Oil Boom
A favorable business climate in the United States has helped make the country the world leader in the shale revolution, a report said Monday.
In the report, "Energy and the New Global Industrial Landscape: A Tectonic Shift?”, research firm IHS notes shale gas and tight oil deposits are being discovered all over the world. However, the report adds the United States. has theingredients to help the industry flourish, including private property ownership rights, good energy infrastructure and access to risk-based investment capital.
For more information, click here.
Today's Links
Firsthand Look at Natural Gas as Transportation Fuel
Buccaneer Energy Could Begin Drilling Soon
Russian Oil Production to Peak Soon
Cairn Fully Funded for Exploration Campaign
Earl’s Pearl of the Day: "Respect is a two way street. If you want it, you’ve got to give it.” — R.G. Risch
January 21, 2013
Planning, Stamina Needed for Marathoning and O&G Exploration, Production
What do running marathons like the Jan. 13 Chevron Houston Marathon and working in the oil and gas exploration and development have in common? Both require planning, stamina and the flexibility to respond to unforeseen conditions, according to people who work in the oil and gas industry.
Just like global E&P efforts, particularly for unconventional oil and gas resources and deepwater, the number of people who run marathons worldwide has grown in recent years. More than 551,000 people completed a marathon in 2011, according to the marathon running statistic website www.statisticbrain.com.
E&P activity and marathons are both about planning, from the route a runner or well runs, the casing or runner’s body, the fluids, the support team and the drill bit or running shoes, said John Graves, money manager and author of the book "Fracking: America’s Alternative Energy Revolution.” Training for serious running is like prepping a site for drilling.
For more information, click here.
Today's Links
Quarterly Forecast for Big Oil: Sunny and Profitable
To Frack or Not to Frack?
Petronas’ Sarawak Marks First Onshore Discovery in 24 Years
Serica Energy Sees Busy Year Ahead
Earl’s Pearl of the Day: "Be kind, for everyone you meet is fighting a hard battle.” — Plato
January 18, 2013
Obama to Confront Oil Pipeline, Climate Change
President Barack Obama’s second-term energy agenda is taking shape and, despite the departure of key Cabinet officials, it looks a lot like the first: more reliance on renewable energy sources, such as wind and solar, and expanded production of oil and natural gas. Obama also is promising to address climate change, an issue he has acknowledged was sometimes overlooked during his first term.
"The president has been clear that tackling climate change and enhancing energy security will be among his top priorities in his second term,” said Clark Stevens, a White House spokesman.
While the administration has made progress in developing renewable energy and improving fuel efficiency standards for vehicles, "we know there is more work to do,” Stevens said.
For more information, click here.
Today's Links
Oil Industry Battles Back on Natural Gas Exports
Iraq, BP Considering Kirkuk Field DealMarquee Energy Achieves
100-Percent Drilling Success on Core Oil Assets
Deep Sea Supply Wins Work for Vessel Trio
Earl’s Pearl of the Day: "The reward of a thing well done is to have done it.” — Ralph Waldo Emerson
January 17, 2013
Cheap Natural Gas Gives U.S. Refineries an Advantage
Refinery expansion projects could add as much as 9 million barrels a day to the world’s transportation fuel supply over the next five years, according to a report from Hart Energy.
That could mean competition for U.S. exports to Latin America and elsewhere.
But even if all of the expansion projects are completed — and that’s a big if — analysts expect increased demand to absorb the new supply and provide a continuing market for U.S. products, at least for the next few years.
For more information, click here.
Today's Links
High-Tech Energy Attracts $1.12 Trillion in Global Revenue
Parnell Sets New Benchmarks for Gas Pipeline
Grand Gulf Energy Spuds Port Hudson 1 Well
Deep Sea Supply in $852 Million Brazil Venture
Earl’s Pearl of the Day: "Attitude is a little thing that makes a big difference.” — Winston Churchill
January 16, 2013Natural Gas Storage Gives Power Plants Flexibility
Natural gas storage for electric generation is helping to make the resource a flexible fuel for on-demand power production, speakers at a Houston conference said Tuesday.
The abundance of natural gas from shale has filled storage facilities with surpluses of the cheap resource. That has given electric power generators the ability to load up on the resource and ramp up gas-fired plant operations when power markets are strained and opportunities for returns are highest, said Paul Sierer, senior commercial transactor for Constellation, an Exelon company. He and others offered their insights on natural gas storage and electricity at the 11th Annual Platts Gas Storage Outlook conference held in the Hilton Houston Post Oak.
The capability to tap into gas in storage has become increasingly important as power markets have become stressed due to population and energy demand growth, increasing the need for on-demand generation that can be called into action within hours or even minutes, Sierer said.
For more information, click here.
Today's LinksMitsubishi Invests $770 Million in German Offshore Wind
Big Sky to Spud Wolfberry Well
ConocoPhillips Agrees to Sell Cedar Creek Assets to Denbury
Huntington Risers Hooked Up
Earl’s Pearl of the Day: "Success is doing ordinary things extraordinarily well.” — Jim Rohn
January 15, 2013Oil Companies Read the Tea Leaves
Predicting energy demand, population growth, policy changes and other global trends that will affect oil prices and industry strategy decades from now is far from an exact science. But major oil and gas companies see value in trying.
BP, Royal Dutch Shell and ExxonMobil are among the companies that publish outlooks forecasting the future of the energy sector. BP’s updated 2030 outlook is set for release Wednesday.
The goal is to figure out what the energy world will look like in the future so they can make the most profitable exploration and production decisions today. By releasing their conclusions publicly, these companies also spark an annual conversation about the world’s energy needs.
For more information, click here.
Today's Links
Shale Play Classes Offered
San Antonio Utility Signs 25-Year Wind Power Agreement
Miller Energy All Smiles Over Tennessee Well
Icahn Takes Stake in Transocean
Earl’s Pearl of the Day: "Happiness, I have discovered, is nearly always a rebound from hard work.” — David Grayson
January 14, 2013
Turning Over New Leaf in Climate Change
In a tidy white lab on the southern edge of Berkeley, Calif., scientists are trying to duplicate one of nature’s greatest tricks, pulling energy out of thin air.
They’re designing artificial leaves that can convert sunlight, carbon dioxide and water into chemical fuel, much like the photosynthesis of flowers and trees.
The team has already built a crude prototype from silicon, polymers and platinum that can create a simple and clean hydrogen fuel. If the scientists figure out how to cheaply produce more complicated energy sources, it would enable mass production of "drop-in” fuels that could power automobiles, trucks, planes and ships without pumping more greenhouse gas into the atmosphere.
For more information, click here.
Today's Links
Eagle Ford Drilling Fuels Income Surge for All
Oil Industry Beats Buffet in Railroad Investment Surge
Tullow Targets 1 Billion Barrels with 40 Wells Planned for 2013
First Oil Produced from Cormorant East
Earl’s Pearl of the Day: "Show me a thoroughly satisfied man and I will show you a failure.” — Thomas Edison
January 11, 2013
Oil and Gas Investments Vital to Nation’s Economy, Prosperity
America’s energy production and energy security require a focus on more than just an increase in oil production, API President and CEO Jack Gerard told reporters and Washington guests attending API’s State of American Energy event Tuesday.
He also reiterated welcoming President Obama’s campaign promise to support oil and natural gas development as part of an all-of-the-above energy strategy.
"With a newly elected Congress and a president beginning his second term, we are standing on the threshold of a new year – one that represents tremendous opportunities to move forward on building our economy and creating jobs for Americans who are looking for work. The oil and natural gas industry has been a bright spot in the past few years of sluggish economic growth and listless job creation … we are ready to do more.”
For more information, click here.
Today's Links
Chevron Expects 4Q Profit to Beat 3Q
Kinder Morgan to Increase Size of Trans Mountain Pipeline Expansion
Gazprom Begins New Tight Oil Project
Farstad Shipping Wins $58 Million Offshore Charters
Earl’s Pearl of the Day: "I have had dreams and I have had nightmares. But I have conquered my nightmares because of my dreams.” — Jonas Salk
January 10, 2013
Senate Proposal to Give U.S. Energy Revenues to States
Energy-rich states would be in a position to receive millions of dollars of oil royalties and other energy revenue currently collected by the federal government under a proposal being put together by a pair of key lawmakers.
The plan, being developed by top members of the Senate Energy and Natural Resources Committee, would allow states like Alaska to collect a share of royalties from oil in the U.S.-controlled waters of the Arctic Ocean and sets up other states like California to collect a share of revenue from solar power produced on public lands.
The federal government already distributes some oil and natural gas royalties to the states, but the setup is limited in scope.
Sens. Lisa Murkowski (R -Alaska) and Mary Landrieu (D-La.) are drafting the bill to expand the current revenue sharing arrangements. The legislation, which aides say is in its early stages but could be introduced as early as this month, would force the government to hand over 27.5 percent of energy revenue from offshore production. An additional 10 percent would be provided to states if they agreed to use the money for specific purposes, such as restoration projects.
For more information, click here.
Today's Links
Shale Playground in West Texas
Total Will Start Shale Drilling in Denmark This Year
LOGA Takes on Matt Damon
Subsea 7 JV Wins Pemex Contract
Earl’s Pearl of the Day: "Every day you have to test yourself. If you don’t it’s a wasted day.” — Terry Butts
January 9, 2013Oil Production to Grow at Fastest Rate Ever
Driven by the shale boom, the United States in 2014 will hit its highest daily oil production level since 1988 and will grow oil output at the highest rate ever, the U.S. Energy Information Administration predicted Tuesday.
U.S. daily oil production, which averaged 6.4 million barrels a day in 2012, will surge 23 percent to average 7.9 million barrels a day in 2014, the administration said.
For more information, click here.
Today's LinksWhy Venezuela and Chavez are Big Players in the Energy Sector
Deloitte Reports Boost Natural Gas Exports
Shell Relaunches Houston Technology Center
TransCanada Wins $5 Billion Pipeline Deal
Earl’s Pearl of the Day: "Desire is half of life. Indifference is half of death.” — Kabil Gibran
January 8, 2013
Energy M&A Activity Set Records in 2012
Fear of the fiscal cliff and the prospects of a second Obama Administration helped drive a record $254 billion in energy industry merger and acquisition deals last year, according to a new report.
"Many sellers were motivated to complete deals in advance of the uncertainties surrounding the second term of President Obama and the implications of U.S. governmental policy changes regarding the fiscal cliff,” said a report issued Monday by energy research firms PLS and Derrick Petroleum Services.
More than 670 deals were brokered in 2012, and deal values were 50-percent higher than the previous year as energy companies around the world jockeyed for position in a climate of high oil prices, depressed natural gas prices, the growth of emerging economies and President Obama’s re-election in November. Concerns that his second term will bring costly new regulation prompted some deals, the report suggests.
For more information, click here.
Today's LinksCalifornia Company Gets Keys to Exxon Tower
Lundin Budgets $1.7 Billion for Upstream in 2013
Ferus and Encana’s LNG Plans Focus on Canada
Assessment Underway for Kulluk
Earl’s Pearl of the Day: "The man that trims himself to suit everybody will soon whittle himself away.” — Charles Schwab
January 7, 2013
Oil Industry’s New Workers Have Great Eyesight — And Feathers
Until recently, falconry — the ancient art of hunting small game with trained birds of prey — was just a hobby for Michael Gregston, who makes a living leading canoe trips down the Missouri River. But to supplement his income, he has been toting four of his rare hawks and falcons in the bitter cold to an unusual destination for a bird enthusiast, an oil refinery.
"The battle begins when the sun goes down,” said Gregston, 60 years old.
Donning a bright green hard hat and fireproof suit on a recent afternoon, he prepared to fly his prized birds into the labyrinth of pipes and towers at the Phillips 66 refinery in Billings, Mont., where thousands of starlings roost each night. With two nearby refineries likely facing similar starling infestations, he said, "I think I have some job security.”
Big oil has never had the most bird-friendly reputation. But refineries across the country are now paying thousands of dollars a day to bring in rare raptors to chase away the nuisance birds that sully their facilities. It is a relatively new form of pest control that is also becoming popular at farms and vineyards.
For more information, click here.
Today's LinksA&M Scientists Study Plant Waste as Potential Biofuel
Natural Gas Vies with Electric Hybrid in GE Auto Fleet
ExxonMobil Greenlights Hebron Oilfield Development
Italian Juniors Report Positive Progress
Earl’s Pearl of the Day: "The greatest discovery of all time is that a person can change his future merely by changing his attitude.” — Oprah Winfrey
January 4, 2013
Petrobas Declares Two Campos Basin Oil Fields Commercial
Brazil’s Petrobras said Thursday it declared two offshore oil fields in the Campos Basin holding an estimated 350 million barrels of oil commercially viable.
Petrobras said the Aruanaand Oliva fields would be renamed Tartaruga Verde and Tartaruga Mestica, respectively. Tartaruga Verde holds an estimated 230 million boe, while Tartaruga Mestica has 121 million boe.
The two fields, however, are unlikely to help Petrobras shake off its recent production troubles. Tartaruga Verde and Tartaruga Mestica aren’t expected to start producing crude oil until 2017, with initial development part of the company’s $237 billion investment plan for the 2012-2016 period.
For more information, click here.
Today's Links
Valero Joint Venture Plans Oil Dock at Sabine Neches
FMC Technologies Expands with Land Purchase
West African Find for Harvest
Iceland Inks Pact with Petoro
Earl’s Pearl of the Day: "Love and compassion are necessities, not luxuries. Without them humanity cannot survive.” — Dalai Lama
January 3, 2013Developing America’s New Energy Future
As we take the opportunity to reflect back on 2012, it’s worth remembering this past year as the beginning of an exciting new chapter in our nation’s energy future.
For the first time in many decades, advances in technology allow us to be optimistic about our capacity to restore our nation’s energy security.
Americans across the country, and across party lines, are beginning to sense that this new U.S. energy growth could help propel significant economic expansion over the coming years.
For more information, click here.
Today's Links
Independent Takes Midsize Gamble on Woodbine Play
MidAmerican to Buy Two California Solar Power Projects
Explorers Head to Europe’s Fringes in 2013
Alaska Proposes Changes to Hydraulic Fracturing Rules
Earl’s Pearl of the Day: "If your ship doesn’t come in, swim out to it.” — Jonathan Winters
January 2, 2013Gulf of Mexico Will Be Strongest Offshore Market, Analysts Say
The deepwater Gulf of Mexico is poised for a strong comeback, with the number of floating rigs growing from about 36 today to 60 in 2015, analysts at the International Strategy and Investment Group forecast.
In its recently released report, "U.S. Gulf of Mexico Deepwater Outlook: Rising Up From the Ashes,” the investment firm projects companies will drill about 70 development wells in 2015, triple the number drilled this year and the highest level since 2002.
For more information, click here.
Today's Links
Energy’s Momentum Drives Real Estate Projects
Drilling Rig Set to Weather Fierce Storm in Small Alaska Port
BP Starts Up Skarv Field
Let’s Avoid Smothering Shale-Gas Boom
Earl’s Pearl of the Day: "Every day do something that will inch you closer to a better tomorrow.” — Doug Firebaugh
December 28, 2012
New Petroleum Engineering Leader Says Safety is Group’s Focus
As Egbert Imomoh prepares to take on his post as 2013 president of the Society of Petroleum Engineers, the industry continues to come under scrutiny on issues ranging from increased risks and safety to a push to perform more research and gather more data about emerging technologies.
All this takes place against the backdrop of a growing uncertainty about attracting and training new petroleum engineers as the aging work force nears retirement.
Imomoh, nonexecutive chairman and co-founder of Afren, a Nigeria-based independent oil and gas company with assets in Africa and Kurdistan, talked to the "Houston Chronicle” recently about what lies ahead – and how he plans to face the challenges that have been set out before him.
For the full Q&A, click here.
Today's Links
Cutting Water Use, Costs Through Teamwork
Chevron CEO: Affordable Energy is Crucial
Keppel O&M Bags Three New Contracts Worth $343 Million
Leighton Seeks to Employ 1,200 for New Work Awarded for Ichthys Project
Earl’s Pearl of the Day:"Action is the real measure of intelligence.” — Napoleon Hill
December 27, 2012
Judge Keeps Environmental Groups Out of Coal Fight
A federal judge won’t let environmental groups join the legal battle between North Dakota and Minnesota over coal power plants.
U.S. Magistrate Judge Steven Rau ruled Friday that the Minnesota attorney general is able to defend the lawsuit, and the case "will not be enhanced in any significant way” by adding environmental interests as parties.
For more information, click here.
Today's LinksConocoPhillips Eyes Unconventional Oil and Gas in ChinaChevron Takes Stake in Canadian Projects
Sunbird to Acquire Stake in Ibhubesi Projects
Sudan to Add Capacity with New Field
Earl’s Pearl of the Day: "If you don’t have confidence, you’ll always find a way not to win.” — Carl Lewis
December 26, 20122012’s Top 5 Oil and Gas Plays
2012 has been a stellar year for oil and gas. From East Africa to North America, new technology, major new discoveries, an unparalleled appetite for exploration and a metamorphosing perception of risk have changed the playing field.
We’re looking at potential rather than existing production, and here are our Top 5 picks for this year:
For more information, click here.
Today's Links
Canadian Plant to Feed Engines with LNG
Marcellus Natural Gas Production Expanded in 2012
Offshore with the Weathermen
Chevron Takes Stake in Canadian Projects
Earl’s Pearl of the Day: "I don’t let my mouth say anything my head can’t stand.” — Louis Armstrong
December 21, 2012Plans Available for Alaska’s National Petroleum Reserve
Secretary of the Interior Ken Salazar announced Wednesday the availability of the Integrated Activity Plan (IAP) and Final Environmental Impact Statement (EIS) for the National Petroleum Reserve in Alaska (NPR-A). The preferred alternative identified in the EIS would allow for the development of 72 percent of the estimated economically recoverable oil in the reserve while protecting the vital subsistence resources of Alaska natives and the habitat of world-class wildlife populations.
Secretary Salazar also issued a memo to the Bureau of Land Management (BLM) confirming the preferred alternative will allow for the potential construction of pipelines carrying oil or gas from operations in the Chukchi and Beaufort Seas through the NPR-A.
After receiving more than 400,000 public comments and following two days of meetings and visits with North Slope leaders, Salazar first announced the key elements of the Preferred Alternative for the IAP/EIS in August. Release of the Final IAP/EIS today paves the way for the secretary to issue a Record of Decision that adopts the final management plan in the first quarter of 2013.
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Today's Links
Statoil to Invest More Than $7 Billion in UK Mariner Field
Chevron Will Move Up to 800 Upstream Jobs to Houston
SandRidge to Sell Permian Assets for $2.6 Billion
EMGS Forges Frame Pact with Shell
Earl’s Pearl of the Day: "The only disability in life is a bad attitude.”— Scott Hamilton
December 20, 2012Administration Says Pipelines Would Be Allowed in Petroleum Reserve
The Obama administration’s plan for managing wildlife and oil production in the 23-million-acre National Petroleum Reserve-Alaska will not prevent the construction of new pipelines that could carry crude across the state, said Interior Secretary Ken Salazar on Wednesday.
The Interior Department confirmed that policy regarding pipelines in unveiling a final environmental assessment of the government’s proposed management program for the 89-year-old reserve in northwest Alaska.
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Today's Links
Canada Open for Business
YPF, Chevron Sign Argentina Shale Pact
Drilling Ops Completed at Petrolias Bourque Well
Oil Shows at Sverdrup Appraisal
Earl’s Pearl of the Day: "Do not dwell in the past; do not dream of the future, concentrate the mind on the present moment.” — Buddha
December 19, 2012Officials Say Wider Canal Can Boost Natural Gas Exports
Transportation and port officials reiterated Tuesday that the nearly complete expansion of the Panama Canal will provide opportunities for growth in exports, but won’t immediately strain the state’s road, railroads and pipelines.
During a state Senate Transportation Committee hearing at the Capitol in Austin, the heads of the Texas Department of Transportation and the Port of Houston Authority summarized and elaborated on the findings of a report last week that described the effects on Texas of the $5.25 billion project that will nearly triple the canal’s capacity.
The report said the bigger canal mainly will allow for more exports to Asia, including natural gas as soon as companies get government permits to liquefy the gas for export in special tankers.
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Today's Links
United States May Already Be World’s No. 1 Oil Producer
Norway’s Statoil Buys U.S. Shale Gas Land
Transocean Bags New Contracts, Extensions Totaling $119 Million
Dockwise Installs Shwe Topsides
Earl’s Pearl of the Day: "Nothing can add more power to your life than concentrating all your energies on a limited set of targets.” — Nido Qubein
December 18, 2012
Governors, Attorney Generals Seek Withdrawing of Fracking Rule
Republican government officials again asked President Obama to withdraw rules proposed by the Bureau of Land Management (BLM) that would regulate hydraulic fracturing on federal U.S. and Indian lands.
The proposed BLM rule ignores the "strong and efficient” track record of states to regulate oil and natural gas production, as well as the rule’s "significant and destructive impacts” on U.S. states, and needs to be taken into serious consideration, said Louisiana Gov. Bobby Jindal, who serves as chairman of the Republican Governors Association, and Oklahoma Attorney General E. Scott Pruitt, who serves as chairman of the Republican Attorneys General Association, in a Dec. 17 statement.
Jindal and Pruitt said the proposed rule would only discourage exploration and production on federal and Indian lands, potentially costing the federal and state government — that share federal royalties — billions of dollars in revenue, as well as negatively impact employment for states with federal lands.
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Today's Links
ND Oil Rises to Record 23.1 Million Barrels in October
Chesapeake Declares Dividend, Despite Cost-Saving
Talisman Finalizes $1.5 Billion North Sea Deal
ConocoPhillips Sells Algerian Arm for $1.75 Billion
Earl’s Pearl of the Day:"We should not let our fears hold us back from pursuing our hopes.” — John F. Kennedy
December 17, 2012
Rice Students Design an Offshore Oilfield City of Tomorrow
A team of Rice University students has conceived an award-winning concept for a facility that would allow oil and gas employees to work and live offshore Brazil.
The three students — dubbed Team Petropolis — were presented with the opportunity to address the challenge Petrobras faces in housing workers as its exploration efforts move further offshore Brazil as part of the 2012 Challenge for the Odebrecht Award for Sustainable Development.
As part of the competition, the students addressed a need raised in a May 2011 "Rio Times” article. This article discussed the fact Petrobras’ fixed and floating platforms already serve as small autonomous floating cities with energy and water. But additional platforms will be needed to meet activity, and the growing distance of exploration offshore from the coast will make running helicopter trips unfeasible. To meet this need, Petrobras said it was planning 50 additional floating cities offshore Brazil.
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Today's Links
Encana’s PetroChina Partnership May Be First of Many
Fuel Cell Park in Bridgeport Moves Forward
School to Make Own Electricity with Solar Arrays
Scana Inks Propulsion Deals
Earl’s Pearl of the Day:"You drown not by falling into a river but by staying submerged in it.” — Paulo Coelho
December 14, 2012
New JIP Seeks to Explore Arctic Oil Spill Response Technology
A number of research projects into Arctic oil spill response technology are underway thanks to a joint industry program (JIP) that officially launched in January of this year.
The Arctic Oil Spill Response JIP, under the auspices of the International Association of Oil and Gas Producers, will conduct research over a four-year period in six areas related to oil spill response preparedness, including dispersants, environmental effects, trajectory modeling, remote sensing, mechanical recovery and in-situ burning. Research projects being conducted under the JIP include the fate of dispersed oil under ice, dispersant testing under realistic conditions, and oil spill detection and mapping in low visibility and ice.
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Today's Links
Dow Chemical Opens New Facility in Chicago
Helix to Sell Oil and Gas Assets
Last Phase of Slip C Dredging Project at Port Fourchon Complete
TGS Begins 3-D Shoot in Central U.S. Gulf
Earl’s Pearl of the Day: "If you want the present to be different from the past, study the past.” — Baruch Spinoza
December 13, 2012
UK Lifts Shale Gas Fracking Ban
UK Energy and Climate Change Secretary Ed Davey announced Thursday the government has allowed the resumption of exploratory hydraulic fracturing (fracking), but any fracking activities would be subject to new controls to mitigate the risks of seismic activity.
The news follows the Chancellor of the Exchequer’s Autumn Statement on Dec. 5 in which he announced plans to better exploit the UK’s gas resources and the Department of Energy and Climate Change would establish an Office for Unconventional Gas and Oil.
Exploratory fracking has been suspended in the UK since May 2011 after two small seismic tremors were detected near the country’s only fracking operation in the Bowland Basin to the east of Blackpool in Lancashire, northern England. On Monday this week, Rigzone reported that the British Geological Society believes shale deposits under Blackpool are 50-percent greater than previously thought at 300 trillion cubic feet of gas.
For more information, click here.
Today's Links
Feds Auction Prime California Land for Oil Development
Tesoro to buy pipeline, terminals
Texas Offshore Wind Project Wins Federal Grant
Brazil’s Remote Fossil Fuel Reserves Encourage FPSO Industry
Earl’s Pearl of the Day:"Kind words can be short and easy to speak, but their echoes are truly endless.” — Mother Teresa
December 12, 2012Shell Looks to Renewable Energy to get at Fossil Fuel
One of the world’s largest oil companies, Royal Dutch Shell,has invested in a Fremont, Calif., start-up that uses solar power to squeeze petroleum from aging oil fields.
GlassPoint Solar’stechnology generates high-pressure steam to heat oil underground, helping it flow to the surface. The company is announcing Tuesday it has raised $26 millionin its latest financing round.
In addition to Shell, other investors include RockPort Capital,Nth Powerand Chrysalix Energy Venture Capital.
Founded in 2008,GlassPoint last yearinstalled one of its systems in Kern County, Calif. Shell’s involvement could someday help the start-up take its technology worldwide.
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Today's Links
Rosneft Buys Other Half of TNK-BP for $28 Billion
BHP Sells Australia Gas Stake to PetroChina
Petronas Aims to Create Thousands of Jobs in Canadian Gas Industry
First LNG-Fueled Hydraulic Fracturing Completed in Eagle Ford Play
Earl’s Pearl of the Day: "Four things for success: work and pray, think and believe.” — Norman Peale
December 11, 2012
Dow Chemical Seeks U.S. Permit for Biggest Ethylene Plant
Dow Chemical applied for a federal permit to build the company’s biggest ethylene plant as cheap natural gas gives manufacturers a cost advantage.
The plant in Freeport, Texas, would have capacity to make 1.5 million tons of ethylene a year, Nancy Lamb, a Dow spokeswoman, said today by phone. That’s the same size as Texas ethylene plants proposed by Chevron Phillips and ExxonMobil and it would be Dow’s largest in the world, according to data compiled by Bloomberg.
For more information, click here.
Today's Links
Spectra Buys Express Platte Pipeline for $1.49 Billion
Tullow Buys Spring Energy Norway
Titanium Explorer Begins U.S. Gulf Operations
Jacobs Wins Santos GLNG Gig
Earl’s Pearl of the Day: "The only limit to your impact is your imagination and commitment.” — Tony Robbins
December 10, 2012Western States Look to Capitalize on Energy Boom
Petroleum producers in southeastern New Mexico are on track to pump out 80 million barrels of oil this year — numbers that haven’t been seen since the 1970s.
In Texas and North Dakota, the oilfields are booming. Companies are exploring possible shale plays in more pockets around the West, and there are no signs that Wyoming stands to lose its position as the nation’s top coal producer.
Federal projections released this week by the U.S. Energy Information Administration suggest the next three decades will see similar flurries of domestic energy development as technology improves and pressures mount to reduce America’s reliance on Mideast oil, and the West will be a player.
For more information, click here.
Today's Links
Fracking Survey Finds Support in Unexpected Places
Drilling Company Looks High and Low for Workers
Wintershall Spuds Rodriguez Well
Ugandan Parliament Passes Long-Awaited Oil Bill
Earl’s Pearl of the Day: "You are never too old to set another goal or to dream a new dream.” — C.S. Lewis
December 7, 2012Enbridge Proceeding with $6.2 Billion Pipeline Expansion
Enbridge Corp. said it will proceed with a $6.2 billion program to increase pipeline capacity to open North Dakota and western Canada light oil production to expanded markets.
The company said its Light Oil Market Access Program will provide access from the Enbridge system to refinery markets in Ontario, Quebec and the U.S. Midwest for an additional 400,000 barrels per day.
The project involves increasing pipeline capacity on Enbridge’s North Dakota regional system, expanding capacity on the U.S. mainline system and enhancing Canadian mainline terminal capability.
For more information, click here.
Today's Links
China Announces Potential Winners of Shale Gas Block Auction
Noble Energy Looks to Colorado Shale
Exxon and Rosneft Plan Tight Oil JV
PKN Picks Up Polish Shale Gas Blocks
Earl’s Pearl of the Day:"He who believes is strong; he who doubts is weak. Strong convictions precede great actions.” — J.F. Clarke
December 6, 2012
U.S. Gas Exports Clear Hurdle
Shipping some of the newly abundant U.S. natural gas overseas would benefit the nation’s economy more than keeping it all at home, according to a long-awaited government study that has the potential to reshape the global energy market.
The endorsement could turn the tide in a politically sensitive issue. Gas producers are eager to export more, while big consumers including manufacturers and chemical companies are leery that exports could raise domestic prices. Environmental groups, meanwhile, fear that allowing exports would encourage more natural-gas production.
The administration had said the study would be central to its decision on approving exports. It analyzed more than a dozen scenarios for U.S. production and exports of natural gas. It found that "across all these scenarios, the United States was projected to gain net economic benefits” from liquefying and then exporting natural gas.
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Today's Links
U.S. Expected to Reduce Energy Import Gap to 9 Percent by 2040
Government Report Predicts Big Economic Boost from Natural Gas Exports
Total Hits Oil Pay in Gulf of Mexico
How Fracking Could Save the Dollar
Earl’s Pearl of the Day: "Don’t be afraid to go out on a limb. That’s where the fruit is.” — H. Jackson Browne
December 5, 2012Rural America Already Enjoying the Oil Boom
United States oil production is running at a 15-year high, and the boom is boosting incomes in the heartland.
Official data shows crude-oil production reached its highest level in nearly 15 years in September, with average daily production of nearly 6.5 million barrels,"The Wall Street Journal” says.
And small-town America is feeling the benefit most. While city- and suburb-dwellers haven’t recovered the spending power lost in the slump, people in towns and rural areas are enjoying an advance in income, thanks in part to the expansion of energy production.
For more information, click here.
Today's Links
Tools without Sparks Could Save Lives Offshore
Oil Rises as Optimism About U.S. Economy Grows
Asia’s Thirst for Natural Gas Fuels Investment Opportunities
Lukoil to Drill Five African Wells in 2013
Earl’s Pearl of the Day: "Success isn’t measured by money or power or social rank. Success is measured by your discipline and inner peace.” — Mike Ditka
December 4, 2012Canadian Official Pushes Strong Energy Trade with United States
Open markets and more pipelines are necessary to make North America the world’s new Saudi Arabia of energy supply, panelists said during a Manhattan Institute discussion Monday.
Speaking during the panel discussion, John Prato, consul general of Canada in New York, encouraged the United States to capitalize on rapidly growing oil production in Canada — even as the U.S. expands its own oilfield activity — to maintain "the largest trading relationship in the world.”
The U.S.-Canadian energy trade is worth more than $100 billion annually, according to the Energy Information Administration.
For more information, click here.
Today's Links
Tuesday Hearing on New Nebraska Pipeline Planned
Graduate Focus for North Sea Oil and Gas Firms
Husky "On Track” with New Business Initiatives
Subsea 7 Bags Lianzi Topsides Gig
Earl’s Pearl of the Day: "Discipline is the bridge between goals and accomplishment.” – Jim Rohn
December 3, 2012Luring Top Oil Talent Demands Perks
Skyrocketing demand for petroleum engineers and other oil and gas workers has companies going to new lengths to lure top talent and keep employees out of competitors’ grasps.
Winning over recruits isn’t just a matter of providing 35-percent salary hikes and $100,000 signing bonuses. Headhunters say company culture and nonmonetary perks are gaining sway in attracting and retaining employees.
For more information, click here.
Today's Links
BP Emphasizes Improved Safety Culture
Eagle Ford Emerges as a Top Play
Woodside Buys Stake in Major Gas Discovery Offshore Israel
Pertamina Hulu Energi Finds New Oil and Gas Reserves Offshore East Java
Earl’s Pearl of the Day: "Don’t be afraid to give your best to what seemingly are small jobs.” — Dale Carnegie
November 30, 2012
Fracking Companies Embrace Solar to Cut Carbon Emissions
The vast majority of hydraulic fracturing sites in the United States are powered by emissions-spewing, noisy diesel engines.
So, Ron Hyden, who’s seen a lot during his four decades in the oil patch, is eager to show off something new: a machine used in fracking that relies on gravity and electricity generated from solar panels to send sand into a labyrinth of tubes before it’s shot underground to prop open tiny cracks in natural gas- or oil-bearing rock.
For more information, click here.
Today's Links
High-Tech, Energy Efficient Home will be in Historic Neighborhoods
Oil Heads for First Monthly Gain Since August on Economy
Rosneft to Boost Energy Development in Russian Far East
Sound Oil on Track for First Gas Sales
Earl’s Pearl of the Day: "You don’t always get what you wish for, you get what you work for.” — Unknown
November 29, 2012Energy Future Remains Positive
The need for more energy – from freeways to battlefields – could be slashed by making fossil-fuel burners more efficient and making renewables more dependable, speakers at a Houston conference said.
A prime example cited is the automobile engine. Lawrence Burns, a former General Motors executive who is now director of the program on sustainable mobility at Columbia University, said 75 percent of the energy generated by cars is lost as heat and friction, and much of the remainder is used to move heavy components, leaving enormous potential to boost fuel efficiency.
Only 1 percent of the energy generated by vehicles is used to move drivers, he said.
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Today's Links
Room for Feds and States in Regulation of Hydraulic Fracturing
France Can Frack Without Destroying Environment
Norway Oil Services Firms Thinks They Can Handle Record Demand
Wood Group Kenny Wins Rosebank FEED
Earl’s Pearl of the Day: "Shun idleness. It is the rust that attaches itself to the most brilliant metals.” — Voltaire
November 28, 2012Upstream Capital Will Reach historic Peak in 2012
While the rest of the economy is still recovering sluggishly, expected investment in upstream capital spending is at a record high of $550 billion for 2012, according to a recent report by Wood Mackenzie.
Confidence in high oil prices and new opportunities worldwide have pushed capital development spending $55 billion higher than in 2011 and $120 billion higher than pre-recession investment in 2008, the report said. This growth, however, has been driven largelyby North American investment in unconventional reservoirs, with investment in other markets slowing.
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Today's Links
Ad Campaign Pushes for NY Gas Drilling, Fracking
NeoScope Harnesses Nuclear Power to Enhance Drilling Measurements
Kea Spuds Puka 2 Well in New Zealand
Imperial in on Celtic Acquisition Act
Earl’s Pearl of the Day: "Fear not that your life will someday end. Fear only that you do nothing with it.” — Anonymous
November 27, 2012T.D. Williamson Inks Global Services Contract with BP
T.D. Williamson (TDW), a world leader in pipeline services and equipment, announced it has signed a global pipeline intervention and isolation services contract with BP.
Activities covered by the agreement include hot tapping and STOPPLE plugging as well as SmartPlug pressure isolation. The three-year contract earned by TDW is one of only four such contracts awarded worldwide by BP.
For more information, click here.
Today's Links
U.S. Scientists Find Lessons from Japan Nuke Crisis
First Reserve Acquires Stake in Ameriforge
Petronas Discovers More Than 4 TCF of New Gas Reserves Offshore Sarawak
Cameron Secures Drillship Package Work
Earl’s Pearl of the Day: "Life is too short not to make the best and the most of everything that comes your way every day.” — Sasha Azevedo
November 26, 2012Natural Gas Drillers Target U.S. Truck, Bus Market
Surging gas production has led the drilling industry to seek out new markets for its product, and energy companies, increasingly, are setting their sights on the transportation sector.
Touting natural gas as a cheaper, cleaner-burning alternative to gasoline and diesel, drillers, public utilities and government officials are trying to boost demand for natural gas buses, taxis, shuttles, delivery trucks and heavy-duty work vehicles of all sorts, while simultaneously encouraging development of the fueling infrastructure that will be needed to keep them running.
The economics are compelling. Natural gas costs about $1.50 to $2 per gallon equivalent less than gasoline and diesel. That can add up to tens of thousands of dollars in savings for vehicles that guzzle the most fuel.
For more information, click here.
Today's Links
Baker Hughes Using Natural Gas in Fracturing Jobs
Cameron Wins $275 Million Deepwater Drillship Equipment Contract
ConocoPhillips to Sell Kazakh Waters Interest; Expects Proceeds of $5 Billion
Lundin Makes Small Oil Discovery in Barents Sea
Earl’s Pearl of the Day: "If you have time to whine and complain about something then you have the time to do something about it.” — Anthony J. D’Angelo
November 21, 2012Industry Vet Sets Sights on Marcellus 2.0
In the latter part of the previous decade, attractive natural gas wellhead prices and technological advances in exploiting shale formations prompted an exodus to Appalachia. Some of the companies flocking to the Marcellus shale formation and its enormous store of natural gas willingly paid landowners several thousand dollars per acre merely to stake their claim and, when the time was right, flip their leaseholdings for a handsome profit to another speculator or to an operating company.
For a number of these companies seeking to cash in, the big payoff never came. Plummeting natural gas prices made acquiring acreage in a largely dry gas play much less appealing. Speculators caught up in the initial rush to the Marcellus found themselves saddled with overpriced leaseholdings that were not generating income.
In the view of one long-time observer of U.S. oil and gas industry trends, the "bubble” that characterized much of the activity in the Marcellus in recent years has not burst per se. Rather, Raymond Schmaus maintains the bubble has morphed into a more stable and predictable environment that favors the long-term investor. The president of the Pittsburgh-based oil and gas title abstract firm Armstrong Search Associates Inc. welcomes this change, which he said favors operating companies looking to maintain a lasting presence in the Marcellus and the overlapping, liquids-rich Utica shale formations.
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Today's Links
Oil Friendly Texas Also Gives Howdy to Renewables
50-Acre Solar Array Would Power 10,000 Homes
Petronas, Progress Energy Extend Tie-Up as They Seek Approval
Lundin Hits Gas Off Malaysia
Earl’s Pearl of the Day:"Enlightenment is not a peak experience. It is a permanent shift in paradigm that deepens day by day.” — Shizen Young
November 20, 2012Magnolia Spuds First Operated Well in Oklahoma
United States onshore-focused Magnolia Petroleum reported Tuesday it has spud its first well as operator in the Mississippi Lime Formation, Oklahoma.
The company said it began drilling at the Roger Swartz No. 1 well, located in Noble County, Okla., on Nov. 19. Drilling is expected to last between eight and 10 days and cost an estimated $730,000. Its targeted total depth is 5,500 feet.
Magnolia’s directors believe a further seven potential well sites could exist in the vicinity of the well, which lies in 800 acres Magnolia acquired in February this year. Magnolia, which currently has a 100-percent interest in the well, has made a farm-in deal in which third parties can acquire a 16.25-percent working interest once a pay out has been achieved.
For more information, click here.
Today's Links
Total Sells Nigeria Offshore Oil Stake for $2.5 Billion
WestSide Receives $192.4 Million Takeover Bid from Undisclosed Party
Shell Flows First Oil from Gumusut-Kakap
Statoil Signs Gas Supply Agreement
Earl’s Pearl of the Day: "The man who wins is the man who thinks he can.” — Vince Lombardi
November 19, 2012Crowning Glory for Santos
The company said the pay was confirmed by wire line logging in the Jurassic-aged Montara, Plover and Malita reservoirs between 4,873 and 4,998 meters.
In addition, multiple condensate-bearing gas samples were recovered and pressure data had indicated that gas was expected to flow at a high rate.
Santos Head of Exploration Bill Ovenden said Crown-1, which had previously been described by the company as "LNG-scale,” was an important gas discovery for the company.
"The Crown discovery is well positioned, in close proximity to existing and proposed LNG projects in the Browse basin and other material exploration prospects,” he said in a statement on Monday.
Crown-1 is located in Block WA-274-P, which is operated by Santos with a 30-percent interest. It is partnered with Chevron and Inpex.
For more information, click here.
Today's Links
Gas Drilling Presents Obama with Historic Choices
Iran Starts Building Gas Pipeline to Syria
BP Scoops Up Four Blocks Offshore Canada
Subsea 7 Revenues Rise on High Offshore Activity
Earl’s Pearl of the Day: "Leadership is getting someone to do what they don’t want to do, to achieve what they want to achieve.” — Tom Landry
November 15, 2012
Reaping the Benefits of Natural Gas Will Require Action Now
Reports about the game-changing nature of the country’s natural gas reserves, newly recoverable with the combination of hydraulic fracturing and horizontal drilling, seem to come out every week.
But Marc S. Lipschultz, global head of energy and infrastructure for KKR & Co., said the ability to reap the economic benefits are far from assured.
Among the key challenges, he said, are smoothing the boom-and-bust cycles in gas prices and mitigating the environmental impacts of gas drilling that limit social acceptance.
For more information, click here.
Today's Links
Fulbright & Jaworski Energy Practice Powers Merger with British Firm
Statoil Upbeat on ‘Hot’ East African Projects
Canada Oil Sands Continue to Gain Global Attention
Former Shale Foe Makes Deal to Allow Drilling on Her Historic Farm
Earl’s Pearl of the Day:"Don’t cheat the world of your contribution. Give it what you’ve got.” — Steven Pressfield
November 14, 2012Clough Amec Inks Chevron Deal
The 12-month contract extension covering oil facilities at Barrow and Thevenard islands off Onslow, Western Australia is worth in excess of $20.9 million to Clough Amec.
It is the second one-year extension to an initial three-year contract inked in 2008.
"The scope of work includes conceptual studies, front-end engineering design, detailed engineering, procurement support, development of construction work packs and construction planning,” the joint venture partners said.
For more information, click here.
Today's Links
‘It’s Up To Us’ on Shale Boom, Energy Leader Says
Ohio Renews Injection-Well Permitting
Shell in Asset Swap with Murphy
Dolphin on Seismic Profits Roll
Earl’s Pearl of the Day: "If you have everything under control, you're not moving fast enough.” — Mario Andretti
November 13, 2012United States on Course to Regain World Oil Crown
In a turnaround that would have seemed far-fetched a few years ago, the United States is projected to surpass Saudi Arabia as the world’s top oil producer by 2020 while cutting its own energy use faster than any other nation, the International Energy Agency reports.
The agency’s "World Energy Outlook 2012” published Monday projects the United States to remain the world’s top oil producer until the late 2020s. Experts said that would be an economic boon for the national and the Houston economies.
The energy agency cited a combination of industry innovations and government efficiency mandates for the coming changes in the United States, far different from the era of shrinking oil production and gas-guzzling SUVs in the early 2000s.
For more information, click here.
Today's Links
Blackstone, LLOG Agree on $1.2 Billion Gulf of Mexico Oil Deal
LSU to Offer Specialized Study in Energy Law
Indonesia Opens Its Doors to New Oil and Gas Investments
Kuwait to Invest $56 Billion on Oil and Gas Expansion Over Five Years
Earl’s Pearl of the Day: "No matter how many goals you have achieved, you must set your sights on a higher one.” — Jessica Savitch
November 12, 2012Alaska Ice Tested as Possible Energy Source
A half mile below the ground at Prudhoe Bay, above the vast oil field that helped trigger construction of the trans-Alaska pipeline, a drill rig has tapped what might one day be the next big energy source.
The U.S. Department of Energy (DOE) and industry partners over two winters drilled into a reservoir of methane hydrate, which looks like ice but burns like a candle if a match warms its molecules. There is little need now for methane, the main ingredient of natural gas. With the boom in production from hydraulic fracturing, the United States is awash in natural gas for the near future and is considering exporting it, but the DOE wants to be ready with methane if there’s a need.
For more information, click here.
Today's Links
A prediction: Shale Oil Plays Will Grow for Decades
Drilling Boom, Retirements Create Need for Energy Workers
Providence Says Drombeg Could Contain 870 Million Barrels
Wentworth Pushes Ahead with Mnazi Bay
Earl’s Pearl of the Day:"Goals are the fuel in the furnace of achievement.” — Brian Tracy
November 9, 2012
How Shale Gas is Reshaping the Oil Market
The Organization of the Petroleum Exporting Countries is sending mixed messages on the shale gas boom.
On the one hand,as Dow Jones Newswires reports, the producer group doesn’t seem particularly concerned. On the other,as Reuters notes, it has at least acknowledged that the huge amounts of shale oil and gas coming onto the market—particularly in the United States—are changing the global supply picture.
"The Wall Street Journal” reports how the U.S.’s reliance on OPEC’s oilwill fall significantly in the coming yearsalthough, due to the cost of extracting domestic unconventional oil.
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Today's Links
Halliburton Expands Facility to Offer ‘Real World’ Testing for Perforating
NADBank Expands Renewable Energy Portfolio
Chronicle Names Top Workplaces
Subsea 7 Wins Gullfaks C Contract
Earl’s Pearl of the Day: "You just can’t beat the person who never gives up.” — Babe Ruth
November 8, 2012U.S. Oil Production Sets New Record
U.S. oil production rose to its highest point in almost 18 years as a shale drilling boom cut reliance on foreign fuel and nudged the country closer to energy independence.
Output swelled by 8,000 barrels to 6.68 million barrels a day in the week ended on Nov. 2, the Energy Department reported. It was the most since Dec. 23, 1994. Improvements in horizontal drilling and hydraulic fracturing, or fracking, have unlocked fuel trapped in deep underground rock formations in states such as North Dakota, Texas and Oklahoma.
For more information, click here.
Today's Links
Sandy Offers Energy Lessons
Industry Looks Ahead to a Second Term Under Obama
Gulf of Mexico is in a Growth Mode — Will it Continue?
Hallin Starts Work in Indonesian Field
Earl’s Pearl of the Day: "Once a word leaves your mouth, you cannot chase it back even with the swiftest horse.” — Chinese Proverb
November 7, 2012Encana, Nucor Ink Gas Drilling, Supply Agreement
Charlotte, N.C.-based steel product manufacturer Nucor Corp. has entered a long-term agreement with Encana Oil & Gas to conduct a U.S. onshore natural gas drilling program.
Nucor believes the agreement will provide the company with a reliable, low-cost supply of natural gas for its current and future gas needs for more than 20 years, Nucor said in a statement Tuesday.
The agreement calls for Nucor to pay its share of costs plus an additional amount of carried interest as each well is drilled, subject to a cap on carry paid for each well and a cap on total carried interest. Drilling may be suspended by either Nucor or Encana if U.S. domestic gas prices fall below a predetermined threshold.
For more information, click here.
Today's Links
Vietnam Moves on Oil Refinery and Nuclear Plant
Two Energy Producers Please Investors
Crude Surges 3.6-Percent Higher
Chevron’s Cambo-5 Well a Go
Earl’s Pearl of the Day: "Success isn’t something that just happens — success is learned, success is practiced and then it is shared.” — Sparky Anderson
November 6, 2012
ExxonMobil Continues Sandy Support in Relief, Recovery
ExxonMobil continues to work to support distribution of gasoline and fuel throughout the areas affected by Hurricane Sandy and is donating $1 million to the American Red Cross for disaster relief assistance in New York, New Jersey and the Caribbean.
"Hurricane Sandy has had a devastating impact on people and communities along the east coast and in the Caribbean,” said ExxonMobil Vice President of Supply and Transportation Andrew W. Madden. "It’s our hope that ExxonMobil’s donation to the Red Cross will help provide comfort to those affected and help people rebuild their lives as quickly as possible.”
ExxonMobil’s three terminals in Massachusetts and Rhode Island are operating normally and the company does not own or operate any gas stations, fuel terminals or refineries in the impacted areas. ExxonMobil has been working with distributors, suppliers and local, state and federal agencies to re-establish the fuel supply infrastructure.
For more information, click here.
Today's Links
Marathon Oil Profits Rise on Higher Production
Indonesian Government to Boost Oil Production by 2014
Total in ‘Danish Shale Gas Foray’
Petroceltic Planning 10 Wells
Earl’s Pearl of the Day: "I don’t do things half-heartedly. Because I know if I do, then I can expect half-hearted results.” — Michael Jordan
November 5, 2012
SapuraKencana Petroleum Buys Seadrill’s Tender Rig Business for $2.9 Billion
SapuraKencana Petroleum is buying Seadrill’s rigs business, including its full tender rig organization, for an enterprise value of $2.9 billion, Seadrill said Monday in a statement.
The total enterprise value includes $363 million in remaining capital expenditure linked to a newbuilds program and all the debt in Seadrill’s tender rig business, which is approximately $800 million as of Dec. 31, 2012.
A non binding memorandum of understanding signed on Monday could see SapuraKencana Petroleum taking control of an enlarged rig business, which is comprised of 16 tender rigs in operation, and an additional five units currently under construction. The operating rigs and newbuilds are currently contracted under long-term fixed price contracts with Chevron, Shell, PTTEP and Petronas Carigali.
For more information, click here.
Today's Links
Why Not a ‘Lewis and Clark Project’ for Energy?
China Looks to Boost Natural Gas Supply Through Shale Gas Subsidies
Inpex Plunges into Indian Deep Water
BG Inks New $3 Billion Loan
Earl’s Pearl of the Day: "Every saint has a past. Every sinner has a future.” — Warren Buffet
November 2, 2012
American Public Supports Oil and Gas Development on Public Lands
Released in July of last year, Western Energy Alliance’s "Blueprint for Western Energy Prosperity” found that by 2020, just six oil and natural gas producing states in the West could produce as much oil and natural gas on a daily basis as the U.S. imports from Russia, Iraq, Kuwait, Saudi Arabia, Venezuela, Algeria, Nigeria and Colombia combined. This energy production could result in a doubling of investment in the region to the tune of $58 billion annually allowing direct, indirect and induced jobs to increase by 16 percent. Federal government policies, however, are significantly undermining these projections of growth, investment and expansion. The blueprintidentifies government policies that are making western energy development increasingly more difficult, time consuming and expensive, and recommends policies to overcome those obstacles.
Building upon the foundation of these dramatic production and economic findings, the Alliance turned to the Tarrance Group, a nationally recognized polling and research firm, to conduct public opinion research of 1,000 high-performing voters in Colorado, Montana, New Mexico, North Dakota, Utah and Wyoming. The results have given the Alliance new and valuable insight into the public’s view on energy development, energy security and the Obama Administration’s management of our nation’s energy policy. The Alliance is busy rolling out the key finding to elected officials and interested stakeholders.
"Seventy-two percent of those surveyed support increased energy development on public lands — and 56 percent strongly support it,” said Tim Wigley, president of Western Energy Alliance. "That’s an overwhelming number of Westerners who want the economic benefit oil and natural gas development brings. It also shows the public is tuned into energy issues in 2012.”
For more information, click here.
Today's Links
Alternative Energy Isn’t Dying
Gas Boom Means U.S. Exports Grow at Fastest Rate Since ‘70s
Indonesia Green Lights BP’s Proposed $121 Billion LNG Train
SapuraKencana Lands Contract Double
Earl’s Pearl of the Day:"If you want to live a healthy life, tie it to a goal, not to people or objects.” — Albert Einstein
November 1, 2012
Siemens Prepping Workers for Future U.S. Manufacturing Surge
In recent debates preceding next month’s U.S. presidential election, President Barack Obama and Republican presidential contender Mitt Romney have both pitched plans to revive the U.S. economy through the creation of high-tech, high-paying technical jobs.
While significant demand exists in the United States for highly skilled manufacturing jobs, attracting employees to fill its existing and future work force presents a challenge for Siemens as it seeks employees with skills in science, technology, engineering and math (STEM), said Doug Keith, president of Siemens Corp.’s Drive Technology Division, in an interview with Rigzone.
Workers with STEM skill sets are needed to fill Siemens’ power engineering positions; these jobs tend to stay open the longest due to availability of suitable candidates, Keith said. Power engineering is a subfield of energy engineering that deals with the generation, transmission and distribution of electric power and electrical devices such as motors. These motors are used to power energy infrastructure from drilling rigs to pipelines and downstream equipment.
For more information, click here.
Today's Links
Full Steam Ahead on Keystone
Cheap Natural Gas Fuels Plant Expansions
Shell Sees Net Profits Rise
Statoil Extends Aker Gig
Earl’s Pearl of the Day:"Nobody can go back and start a new beginning, but anyone can start today and make a new ending.” — Maria Robinson
October 31, 2012Drilling Permits Up as Gulf Trends Toward Bigger, Deeper Facilities
Two years after the blowout of BP’s Macondo well killed 11 workers, unleashed the nation’s worst environmental disaster and triggered a five-month halt on much offshore oil drilling, that activity has rebounded in the Gulf of Mexico, according to a report issued Wednesday.
The analysis by Quest Offshore concludes that the pace of government approvals of Gulf drilling permits has been climbing over the past six months and now is back to pre-Macondo levels. According to the research firm, the Interior Department signed off on 78 new exploration drilling permits and 36 new development drilling permits over the past year.
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Today's Links
BP Works through Uncertainty
Shell Concludes Inaugural Arctic Drilling Season
African Successes for Afren and Tullow
Cameron Booms in Third Quarter
Earl's Pearl of the Day: "We learn wisdom from failure much more than success. We often discover what we will do, by finding out what we won't do." - Samuel Smiles
October 29, 2012Seawater Gives New Life to Oil Wells in Gulf
Deepwater drillers are pushing the boundaries of modern technology to help revive the Gulf of Mexico as one of the world’s most prolific oil producers.
In offshore frontiers hit by the 2010 oil spill and drilling moratorium, pioneers are adapting water injection, an old technique for boosting oil recovery, to challenging new environments in the deepest drilling regions of the Gulf. By flushing massive loads of high-pressure water through miles of ocean and earth, they’re stimulating the deepest reservoirs and bringing up more oil.
The technique has been used for decades on land to enhance oil recovery. But applied far at sea, it can be an especially pricey and complex venture. As technology advances, oil companies are applying injection to their most expensive offshore projects, making deepwater fields more economic by sweeping crude out of reservoirs’ hardest-to-reach crevasses.
For more information, click here.
How Sandy’s Affecting Energy Markets
They’re Making Deals in the Oil Field
Eagle Ford Jobs to Grow, Evolve as Play Enters Production Phase
Beach Starts Shale Fracking Campaign
Earl’s Pearl of the Day: "There are no shortcuts to any place worth going.” — Beverly Sills
October 25, 2012
Chevron Hits More Oz Gas
The US supermajor made the latest find at its Satyr-4 exploration well after drilling to a total depth of 4579 metres, it said on Thursday.
Chevron, which operates Block WA-374-P with a 50% share, found a net gas column of around 67 metres after drilling in a water depth of 1088 metres some 120 kilometres north-west of Barrow Island.
For more information, click here.
Today's Links
Oil Rises 7 Percent After Fall Last Week
Voters Should Educate Selves about Energy
Shell Buys Beryl Fields in North Sea
PGS’ Profits Surge Beat the Street
Earl’s Pearl of the Day: "If what you did yesterday seems big, you haven’t done anything today.” — Lou Holtz
October 24, 2012
Unconventional Plays to Support Nearly 3.5 Million Jobs by 2035
The entire upstream unconventional oil and gas sector will support more than 1.7 million jobs in 2012 at average wage levels - dramatically higher than the general economy, according to a new IHS Global Insight report released Tuesday.
The number of jobs supported by upstream unconventional activity is expected to grow to 2.5 million over the next three years, 3 million in 2020, and reach nearly 3.5 million in 2035, according to the report "America's New Energy Future: The Unconventional Oil and Gas Revolution and the Economy".
For more information, click here.
Today's Links
Oil Jobs Expected to Flow into San Antonio
Who Might Lead Energy, Interior and EPA Under Romney, Obama
China’s CBM Industry to Grow on Rising Natural Gas Needs
Statoil Appraisal Positive for Peregrino II
Earl’s Pearl of the Day: "If you can’t excel with talent, triumph with effort.” — Dave Weinbaum
October 23, 2012Shell, Exxon to Drill Fram Field after Reducing Costs
Royal Dutch Shell and Exxon Mobil agreed to develop the Fram oil and gas field in the U.K. North Sea after managing to reduce drilling costs.
The partners plan to convert a tanker into a floating production, storage and off-loading vessel, or FPSO, to begin extraction within three years, Shell Vice President Glen Cayley said by telephone. Fram will reach peak output of about 35,000 barrels of oil equivalent a day within two years of starting.
For more information, click here.
Today's Links
Unconventional Oil and Gas to be Economic Driver
Public Officials to Discuss Future of Energy Jobs at Pre-Election Forum
WGP Completes Arctic 2D Seismic Survey
Maersk Secures $694 Million Contract
Earl’s Pearl of the Day: "If you aren’t going all the way, why go at all?” — Joe Namath
October 19, 2012Exxon Talking with Oil Majors to Sell South Iraq Stake
Exxon Mobil is in talks to sell its stake in a contract to develop a multibillion-dollar oil project in southern Iraq as it gears up to start drilling for oil in the Iraqi Kurdistan region, people familiar with the matter said Thursday.
The U.S.-based energy giant's move to exit southern Iraq and push forward with its plans in the northern Kurdistan region suggests the central government's efforts to keep ExxonMobil operating solely in southern Iraq are likely to fail. This comes as talks between the Kurdistan Regional Government, or KRG, in Erbil and the federal government in Baghdad, aimed at resolving differences over oil rights, appear to have stalled again after a brief period of progress.
ExxonMobil is negotiating with international oil companies to take over its service agreement to develop the massive West Qurna-1 oil field in southern Iraq, one person familiar with the Iraqi oil ministry and another person familiar with ExxonMobil's operations in Kurdistan said Thursday.
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Today's Links
Baker Hughes Expects Improvement in International Margins
Schlumberger Third Quarter Profit Rises on Strong Revenue
Natural Gas: Smart Power, Smart Politics
Turkmen Offshore to See 80-Percent Investment Boost
Earl’s Pearl of the Day: "Go in the direction of your dreams. Live the life you’ve imagined.” — Thoreau
October 18, 2012Kinder Morgan Energy Partners Profit Soars
Oil and natural gas pipeline and storage titan Kinder Morgan Energy Partners reported Wednesday that its third-quarter profit soared 76 percent on a nearly 11 percent increase in revenue.
The company said its net income totaled $379 million, or $1.26 per distribution unit, compared with $215 million, or $1.16 a unit, a year earlier.
Kinder Morgan Energy Partners reported third-quarter distributable cash flow before certain items of $455 million, up 15 percent from $394 million for the comparable period in 2011. Distributable cash flow per unit before certain items was $1.28 compared to $1.19 for the third quarter last year, the firm said.
Revenue in the quarter rose to $2.34 billion, compared with $2.11 billion a year earlier.
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Today's LinksFirst Oil Nears for Kazakhstan’s Supergiant Field
Exxon’s Biggest Canada Deal Signals Shale Rush
Aker Wins Shetland Gas Plant Contract
Wood Group Scoops Pipeline Project
Earl’s Pearl of the Day: "It’s repetition of affirmations that leads to belief. And once that belief becomes a deep conviction, things begin to happen.” — Muhammed Ali
October 17, 2012
Exxon to Buy Alberta’s Celtic For $2.91 Billion
Exxon Mobil, the largest U.S. energy company, agreed to buy Celtic Exploration for $2.86 billion in cash and stock, adding production in Alberta’s Montney and Duvernay shale.
Celtic’s shareholders will receive $24.50 a share and half a share of a new company that will hold assets not included in the agreement, Calgary-based Celtic said today in a statement. The cash value per-share represents a 35 percent premium to Celtic’s closing price yesterday.
The purchase includes 545,000 net acres in the Montney shale and 104,000 acres in the Duvernay, plus other Alberta land. Current production on the acreage is 72 million feet of natural gas a day and 4,000 barrels a day of oil and natural gas liquids.
For more information, click here.
Today's Links
Aker Wins Shetland Gas Plant Contract
Brazil Oil Workers Approve Petrobras Wage Contract
UAE Shah Gas Project on Track for 2014
Steffy: A Few More Thoughts About Drilling on Public Lands
Earl’s Pearl of the Day: "The mind is its own place, and in itself, can make Heaven of Hell and Hell of Heaven.” — John Milton
October 16, 2012Eagle Ford Emerges as Top Player
The Eagle Ford Shale started as a natural gas play around mid-2010, and if it has stayed that way, there wouldn’t be so much talk about it.
But as natural gas prices fell, the industry within a year had switched gears in South Texas, focusing instead on extracting the more profitable crude oil and natural gas liquids from the shale rock.
That play-within-a-play characteristic of the Eagle Ford Shale is making it a premier shale play, speakers said Monday at Hart Energy’s third annual DUG Eagle Ford Conference at the Convention Center.
For more information, click here.
Today's Links
Robot Submarine Seeks Oil Sheen Source Near Deepwater Horizon Site
Most Eligible Parties Will Accept Spill Deal
Investment Confidence Returning to UK Continental Shelf
Repsol Date for Darwin Probe
Earl’s Pearl of the Day: "Shallow men believe in luck. Strong men believe in cause and effect.” — Ralph Waldo Emerson
October 15, 2012Houston, Where Energy Conferences Just Don’t Stop
If you pay attention to oil and gas - and in Houston, a lot of people do - you probably already know about OTC and CERAWeek.
The Offshore Technology Conference and the conference sponsored by IHS-Cambridge Energy Research Associates are held every spring, drawing thousands of energy professionals to town.
But October is turning out to be pretty buzzy, too, with conferences, a trade show and even an energy-themed family day planned for the plaza in front of Houston's City Hall.
Energy Week will kick off with a two-day conference and trade show focused on technology for independent oil and gas producers, set for Wednesday and Thursday at the George R. Brown Convention Center.
For more information, click here.
Today's Links
Titanic Tycoon Plans Stake Sale Talks for $8 Billion Gas Project
Tungesvik Takes Helm of Statoil Canada
Tullow Enters Greenland farm-in with Maersk
Seadrill Launches New York Listing
Earl’s Pearl of the Day: "Strength doesn’t come from what you can do. It comes from overcoming the things you once thought you couldn’t.” — Rikki Rogers
October 12, 2012
EPA Approves More Flexible Rules for Plant Expansion
Federal environmental regulators have approved a Texas permitting regime that gives oil refineries, chemical plants and other large industrial facilities flexibility to expand as long as the changes do not harm local air quality.
The Environmental Protection Agency said Thursday the approval came after the state made changes to bring some pieces of the program into compliance with the federal Clean Air Act.
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Today's Links
Subsea 7 Wins $300 Million North Sea Contract from BP
With a Dearth of Pipelines, U.S. Oil Exports Rising
Rise of Chinese Shipyards in the FPSO Industry
Woodside Extends Prosafe Rig Deal
Earl’s Pearl of the Day: "There are no secrets to success. It is the result of preparation, hard work and learning from failure.”— Colin Powell
October 11, 2012Shell Opening New Arctic Frontier
Despite repeated setbacks, many members on the 124-person team boring an exploratory well for Shell are convinced the company will strike oil here, opening a new frontier in U.S. oil development and making a discovery that could rival the bounty in the deepwater Gulf of Mexico.
"The potential is huge, and everyone on board knows it,” said Craig Amos, a Halliburton employee who helps track pressure and other data poring from Shell’s Burger Well A.
"They say it’s bigger than Texas,” he added.
The enthusiasm was palpable early last month, when Shell began boring its first well in the Chukchi Sea, more than two decades after the last round of exploration in the region.
Shell estimates that about half the time it will take to drill its Arctic wells to their target depth is consumed by the initial drilling and site preparation it is now performing in the Chukchi and Beaufort seas. That initial prep work includes excavating a cellar in the sea bed to hold emergency equipment and keep it out of the way of floating ice as well as drilling and cementing casing in the first 1,400 feet of the Arctic wells.
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Today's Links
Pay Skyrockets at Oil and Gas Firms
Houston Firm Drilling Exploratory Well in New York Shale
Lundin Makes Oil Discovery at Albert Prospect
Musings: Is America Knocking on the Door of Energy Independence?
Earl’s Pearl of the Day: "Weakness of attitude becomes weakness of character.” — Albert Einstein
October 10, 2012Shale Gas Bonanza Could Extend to Other Industries
The shale gas boom could cut costs significantly for the chemical industry and ultimately benefit the apparel, electronics, machinery and other industries, according to a report released Tuesday.
The report by PricewaterhouseCoopers suggests cheap natural gas liquids could even prompt some companies to move production back to the United States.
It already has spurred an estimated $15 billion in new investments in Texas chemical plants, according to Hector Rivera, president and CEO of the Texas Chemical Council and Association of Chemical Industry of Texas.
Rivera said the rebound started as the nation began to recover from the recession.
For more information, click here.
Today's Links
Natural Gas Could Be Cheaper, Cleaner Way to Run a Railroad
OPEC Raises Demand for Forecast for Its Crude
GE Launches All-In-One Natural Gas Fueling Pumps
New Gas Field Discovered in Red Sea
Earl’s Pearl of the Day:"Even if you fall on your face, you’re still moving forward.” — Victor Kiam
October 9, 2012$2.5 Billion Sale Makes Marathon fourth Largest Domestic Refiner
The planned sale of BP’s Texas City, Texas, refinery to Marathon Petroleum reinforces Marathon’s entrance as a major player in the U.S. refining sector and helps BP focus its strategy.
The $2.5 billion deal for one of the nation’s largest and most complex refineries, announced Monday, will make Marathon the fourth-largest domestic refiner.
"This is a unique opportunity to acquire world-scale refining assets at an attractive price,” said Marathon Petroleum CEO Gary Hemminger during a conference call with analysts Monday morning. "These refining and related assets strategically complement our existing business and provide the immediate scale for us to expand our Marathon brand business even further in the Southeast.”
Marathon Petroleum, based in Findlay, Ohio, spun off last year from Houston-based Marathon Oil, now an independent oil and gas company.
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Today's Links
Oil Prices Rebound on Jitters About Supplies
FPSO Industry Finds Growth in Deep Waters
IEA Optimistic About Future of Iraq Oil Industry
Cooper Energy Announces Oil Discovery at Windmill-1
Earl’s Pearl of the Day: "You never achieve success unless you like what you are doing.” — Dale Carnegie
October 8, 2012TPC Group Draws Higher Offer
TPC Group said it received an all-cash offer for $44 to $46 a share from rival Innospec in a deal financed by the private equity firm Blackstone. The deal, which could be worth as much as $721 million at those prices, tops an earlier $628 million offer TPC had accepted from First Reserve Corp. of Greenwich, Conn., and New York-based SK Capital Partners.
After reviewing Innospec’s offer, TPC’s board determined it could lead to a bid that’s superior to the $40 per share deal it accepted in August, the company said in a statement.
First Reserve and SK Capital previously declined to comment on whether they would increase their bid. Now, if they want to stay in the running, the next move is up to them.
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Today's Links
Total Swaps North Sea Assets with Exxon
Do We Need Subsidies for Solar and Wind Power?
A Tale of One Shale Helped Guide Another
Apache Awards Subsea 7 Julimar Contract
Earl’s Pearl of the Day: "You will never change your life until you change something you do daily.” — Mike Murdoch
October 5, 2012Calpine Buys Texas Power Plant for $432 Million
Calpine said it will buy a natural gas-fired power plant in Texas for about $432 million to boost its presence in a state where the supply of surplus power is shrinking.
Calpine is buying the 800-megawatt plant near Laguna Park in central Texas from Bosque Power. Calpine said it will use cash on hand for the deal, which it expects to close in early November.
It said the price will also include unspecified adjustments but did not provide an estimate of how that would affect the closing price.
For more information, click here.
Today's Links
Eagle Ford Could Keep Pump for Another 16 Years
Crude Rallies Sharply as Gasoline Surges
Debate: Candidates Recognize Need for National Energy Policy
Singapore’s Sembcorp Marine Inks Letter of Intent to Build Rig for Prosafe
Earl’s Pearl of the Day: "To give anything less than your best is to sacrifice the gift.” — Steve Prefontaine
October 4, 2012
Gulf of Mexico Poised for Resurgence in 2013
The Gulf of Mexico is set to top peak production by 2019 after high levels of investment and successful projects have spurred a resurgence, according to the energy consulting firm Wood Mackenzie.
The firm said the area is expected to top 2 million barrels of oil equivalent a day by 2019, and the region is currently being defined by large investments, wide range of opportunities and large number of explorers.
Production is now around 1.4 million barrels of oil a day.
Offshore drilling, particularly in the Gulf of Mexico, has become a sticking point between the energy industry and the government. Industry officials claim a slow approval process by the government is causing production to suffer.
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Today's Links
Gasoline Poised to Fall as Refineries Return
Stanislaw: De-Politicize Energy
BP Starts-Up Devenick Gas Project
Oil Gains as Syria-Turkey Tensions Rise
Earl’s Pearl of the Day: "Never let your head hang down. Never give up and sit down and grieve. Find another way.” — Satchel Paige
October 3, 2012
Biofuels Industry Lauds Automakers for Approving Higher Ethanol Fuel Blend
Ford and General Motors have approved use of a higher concentration of ethanol fuel in new vehicles — a significant victory for the biofuels industry.
New GM and Ford vehicles will accept a fuel blend that’s 15-percent ethanol, as opposed to the standard 10-percent blend. For GM, that will begin with 2012 models, while Ford will accommodate the fuel in 2013 models, according to "Oil Price Information Service,” which first reported the news.
The auto industry’s resistance to higher blends of ethanol — which it says are more corrosive to older engine models — has long been a roadblock in getting higher concentrations of ethanol fuel blends on the market.
Clearing that is important for the biofuels industry, which has said it needs the higher blend, known as E15, to meet a mandate that requires refiners to blend 36 billion gallons of biofuels into traditional transportation fuel by 2022.
For more information, click here.
Today's Links
Magnolia Petroleum Increases Participation in Oklahoma Wells
Oil Patch Start-ups Speed Date Investors
Deepwater Explorations to Dominate Australia’s LNG Market
Marathon Enters Ethiopia with Acquisition
Earl’s Pearl of the Day: "Change the changeable, accept the unchangeable and remove yourself from the unacceptable.” — Denis Waitley
October 2, 2012Energy XXI Adds Assets in the Gulf
In an expansion of its shallow-water business, Energy XXI said Monday it will buy Gulf of Mexico assets from ExxonMobil and will enter a joint venture with the company to explore for oil and gas in an adjacent area of the Gulf.
The Houston-based independent, which was formed in 2005, also announced the completion of its first horizontal well in the Gulf.
Energy XXI did not disclose the purchase price for the Gulf assets but estimated its total commitment to the joint venture at $75 million, assuming successful completion of two earning wells.
Energy XXI will operate the joint venture and drill the initial prospect, which it expects to begin by the end of the year.
For more information, click here.
Today's Links
Nabors Tells SEC Fracking Isn’t Risk to Water Supplies
Crude Gets Small Boost from ISM Data
ExxonMobil to Drill Irish Atlantic Frontier Early Next Year
Shale Gas Joint Venture Formed in China
Earl’s Pearl of the Day: "A gem cannot be polished without friction, nor a man perfected without trials.” — Chinese Proverb
October 1, 2012Shale Play is Engine of Growth for Rail
All across South Texas, rail yards are adding track to service the shale drilling boom happening in a 20-county swath of the state, stretching from the border toward East Texas.
Hondo Railway started as the South Texas Liquid Terminal in San Antonio in the late 1970s, specializing in transporting about 1,500 rail cars a year filled with high-fructose corn sweetener from the Midwest for soft drink bottlers throughout South Texas.
But about six years ago, the company lost its lease on Union Pacific land where it had been operating and had to quickly find another spot or shut down. It found acreage — the cotton field — at Hondo’s
South Texas Regional Airport, about 30 miles west of San Antonio off U.S. 90.
South Texas Liquid Terminal made the move and opened a new entity, Hondo Railway, with 13,000 feet of track and hopes of diversifying beyond corn sweetener. Now it has 80,000 feet of track and moves fracturing sand, crude oil, ethanol, cornstarch and everything from lumber to power plant parts.
For more information, click here.
Today's LinksTransocean Ban on Renting Rigs to Petrobras in Brazil Eased
Gas Futures Jump 6.3 Percent
Aker Wins Extension to Troll Contract
Iraqi Crude Oil Production Reached Highest Level in Decades
Earl’s Pearl of the Day: "Courage is resistance to fear, mastery of fear, not absence of fear.” — Mark Twain
September 28, 2012Transocean Announces 10 Year Contracts for Four New Ultra-Deepwater Drillships
Transocean said Friday that it was awarded 10-year contracts for four new drillships by oil giant Royal Dutch Shell, which will bring about $7.6 billion in revenue.
The contracts are expected to start in 2015 and 2016 after the drillships, designed to operate in ultra-deep water, are built. The construction of the vessels will add $3 billion to Transocean’s capital budget, the company said.
For more information, click here.
Today's Links
BP Products Agrees to Pay $210,000 for Oil Spill Response Violation
Natural Gas Wins Place as Oil Field Fuel
Providence to Focus on Ireland after UK Asset Sale
New Zealand Oil and Gas Confirms Commitment to Drill
Earl’s Pearl of the Day: "You may have to fight a battle more than once to win it.” — Margaret Thatcher
September 26, 2012U.S. Interior Department Schedules Sale of Alaska Drilling LeasesThe Obama Administration has announced it will offer oil drilling leases on nearly 4.5 million acres in Alaska’s National Petroleum Reserve during an auction scheduled for November.
The auction, which will allow energy companies to bid for exploration rights on selected tracts in the 23-million-acre reserve, is part of President Barack Obama’s 2011 pledge to hold annual lease sales in the government-owned swath of land on Alaska’s North Slope.
The administration also said it will hold a separate auction in March for leases on about 38 million acres in the central Gulf of Mexico.
"The energy resources of the National Petroleum Reserve in Alaska are essential to meeting our nation’s energy demands and will enhance domestic energy production and decrease dependency on foreign oil sources,” Interior Secretary Ken Salazar said in a statement.
The lease sale in the Alaska reserve is scheduled to take place Nov. 7.
Click here for more information.Today's LinksWestlake Chemical to Start-Up Ethylene Expansion at Lake CharlesShale Means U.S. No Longer an Energy ‘Couch Potato’Energy, Unemployment and The Health of the U.S. Economy
Could Scotch Whiskey Leftovers Power Cars?Earl’s Pearl of the Day:"We would accomplish many more things if we did not think of them as impossible.” — Vince Lombardi
September 24, 2012Quicksilver Agrees to Joint Venture with Shell Unit in Colorado
Quicksilver Resources Inc. said Monday it agreed to a joint venture with a unit of Royal Dutch Shell in Colorado’s Sand Wash Basin.
According to the agreement, Shell unit SWEPI LP and Quicksilver will each own 50 percent of 330,000 acres in the emerging oil and gas play. Quicksilver will receive an undisclosed payment for the acreage it contributes to the joint venture in excess of Shell’s own contribution.
The move comes as international oil giants deepen their involvement in North American onshore oil fields, which have been revitalized by hydraulic fracturing techniques. Shell earlier this month bought acreage in West Texas from Chesapeake Energy Corp., and Exxon Mobil Corp., the world's largest publicly traded oil company, last week agreed to purchase land in North Dakota’s Bakken Shale from Denbury Resources Inc.
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Today's Links
Auto Industry Revs Up for Race to Meet Fuel Standards
Simple Math to Put "Energy Independence” Into Perspective
Indian Consortium Bids for ConocoPhillips Assets in Canada
Norway Takes New Approach to Naming Offshore Fields
Earl’s Pearl of the Day: "Wealth is the ability to fully experience life.” — Thoreau
September 19, 2012Sunoco Hands Over Keys to Philly RefinerySunoco Inc. Chief Executive Brian P. MacDonald has handed over the ceremonial keys to the company’s Philadelphia oil refinery, saving 850 jobs and giving new life to the sprawling 146-year-old plant.
"Hopefully, the transaction will be as good as the publicity has been,” said William E. Conway Jr., co-chief executive of the Carlyle Group.
Carlyle will be responsible for operating the facility, the largest refinery on the East Coast. It says it is "reimagining” the plant as a regional energy hub that will rely upon growing production of Marcellus Shale natural gas to manufacture motor fuels, electricity and chemicals.
"We’re not rescuing anything,” said Philip L. Rinaldi, the chief executive of the new venture called Philadelphia Energy Solutions. "We’re coming in here to build industries.”
The refinery’s transfer to Carlyle marks the end of more than a century of fuel manufacturing for Sunoco, which began refining in 1894 with the acquisition of a plant in Toledo, Ohio.
The deal involved a remarkable degree of cooperation among Sunoco, Carlyle, labor and political leaders, including officials in the White House. Gov. Corbett, a Republican, and U.S. Rep. Bob Brady, a Democrat, heaped praise on each other Wednesday. Leo W. Gerard, the international president of the United Steelworkers, extolled the union’s cordial relationship with Carlyle executives.
Click here for more information.Today's LinksShell Leads LNG Competitors Out to Sea With Biggest Ship
After Spill, Gulf Oil Drilling ReboundsWorld Seeks U.S. Know-How on ShaleUK Lawmakers Call for Arctic Exploration Moratorium
Earl’s Pearl of the Day:"Advice is like snow - the softer it falls, the longer it dwells upon, and the deeper it sinks into the mind.” — Samuel Taylor Coleridge
September 19, 2012BP Reportedly in Talks to Sell Texas City Refinery to Marathon Petroleum
British Petroleum (BP) may be selling its Texas City, Texas, refinery for nearly $2.5 billion, according to the "Houston Business Journal.”
The report says BP and Ohio-based Marathon Petroleum have been in serious negotiations about the property for months, but that a deal is not definite. Though analysts anticipate a deal getting done before the end of the year.
BP has sold off billions in assets recently, including its Southern California refinery last month.
For more information, click here.
Today's Links
Shell Expects to Meet Iraq Oil Field Target Despite Setbacks
Phillips 66 CEO Says Exports Will Ease U.S. Refining Challenges
Osage Begins Drilling Oklahoma Well
Offshore Morocco: Drilling Deeper
Earl’s Pearl of the Day: "Nothing changes if nothing changes. And if I keep doing what I’ve always done, I’ll keep getting what I’ve always got, and I’ll keep feeling what I’ve always felt.” — Earnie Larsen
September 18, 2012
Shell Delays Quest to Strike Arctic Oil
Royal Dutch Shell said Monday it would push back to next year its plans to find oil in Alaska’s Arctic offshore after a key oil containment system was damaged during a test.
The delay is a major setback for the Anglo-Dutch oil giant, which has spent six years and $4.5 billion in a bid to open up one of the world’s last great oil frontiers, which geologists say contains vast amounts of oil and gas.
Shell’s effort had been hampered by delays due to regulatory issues, mishaps and persistent sea ice, but it had expected to drill wells to depths where they might strike oil before harsh weather set in between late September and late October. Now, it will have to focus solely on drilling the initial stages of the exploration wells, known as "top holes,” reaching a limited depth. Shell said it would concentrate on drilling as many of these as possible before winter ice takes hold.
Marvin Odum, the head of Shell’s exploration and production operations in the Americas, said "it’s a disappointment that we won’t be drilling into hydrocarbons this year.” He added, however, the company has been successful at building the basis of a multiyear exploration program and expectations for its outcome haven’t changed.
Shell was expecting to receive a permit from U.S. authorities to drill wells all the way to oil-bearing depths once its Arctic Containment System, a newly designed set of safety equipment designed to contain oil spills, was successfully tested. But during a final test, a containment dome, designed to be put on top of a leaking well, was damaged, it said. "It is clear that some days will be required to repair and fully assess dome readiness,” Shell said in a statement. "We are disappointed that the dome has not yet met our stringent acceptance standards.”
Mr. Odum said Shell would seek to make sure the containment system works as soon as possible, even if it isn’t intended for use this year.
Click here for more information.
Today's Links
Oil Makes Its Rail Connection
Petroleum Companies Appeal Federal Leasing
EPA Raises Biofuels Targets for 2013
S. Dakota Mining School’s New Grads Beat Harvard’s for Pay
Earl’s Pearl of the Day: "One can never consent to creep when one feels an impulse to soar.” — Helen Keller
September 17, 2012
EPL to Buy Gulf of Mexico Properties from Hilcorp
EPL Oil & Gas agreed to buy certain shallow-water Gulf of Mexico properties from Hilcorp Energy for $550 million.
The properties include three fields that are on the Central Gulf of Mexico shelf in the vicinity of EPL’s existing core field areas. The shelf oil and natural gas interests are currently producing about 10,000 barrels of oil equivalent per day, about 50 percent of which are oil.
EPL has submitted a 10-percent cash deposit and expects to close the deal by Oct. 31.
For more information, click here.
Today's Links
Exxon Valdez Could Affect BP Settlement
Bacteria Removed At Least 200,000 Tons of Oil and Gas Following Macondo
Subsea Equipment Providers See Boom Ahead
Federal Stimulus Sends Crude to Four-Month High
Earl’s Pearl of the Day: "The first requisite of success is the ability to apply your physical and mental energies to one problem without growing weary.” — Thomas Edison
September 14, 2012Making Sense of the U.S. Oil Boom
Due to hydraulic fracturing and deepwater technology, the United States is now pumping oil in larger quantities than it has in more than a decade, and its growing status as a crude producer is taking the world by storm.
In a conversation with "The Wall Street Journal,” Daniel Yergin, the energy industry’s most prominent chronicler, talks about the American oil renaissance and its profound implications for the United States in a changing world. Yergin, currently vice chairman of IHS, a consulting firm in Englewood, Colo., is the author of "The Quest: Energy, Security, and the Remaking of the Modern World.” His history of the oil industry, "The Prize,” earned a Pulitzer Prize.
To see the transcript of Yergin’s Q&A with "The Wall Street Journal,” click here.
Today's LinksGas Prices, Cars Push Retail Sales Up 0.9 Percent
North American Energy Independence Hinges on Right Government Policies
Total to Drill First Ugandan Exploration Oil Well by Year’s End
Petrobas Gains Pre-salt Approval
Earl’s Pearl of the Day: "Always look at what you have left. Never look at what you have lost.” — Robert Schuller
September 12, 2012Two States Say Spill Deal is Inadequate
A proposed settlement of claims relating to the 2010 Gulf of Mexico oil spill is insufficient for spill victims in Louisiana and Mississippi, the states have told a federal judge overseeing the deal.
The two states aren't party to the proposed settlement between BP and a committee representing plaintiffs, and they aren't asking U.S. District Judge Carl Barbier to throw it out.
The settlement does not address civil and possible criminal complaints by federal, state and local governments.
Mississippi Attorney General Jim Hood focused on provisions of the settlement that carve the region into zones, each with different paperwork requirements and different formulas for amounts claimants can receive.
In one zone, for example, the settlement stipulates claimants who can prove damages need not prove the oil spill caused them, Hood said. In another zone, business claimants must show their profits were lower in the year of the spill than afterward.
For more information, click here.
Today's Links
Onshore U.S. Exploration Creating Future Opportunities for Upstream MLPs
Chesapeake Energy Selling Some Assets for $6.9 Billion
Nations Meet to Keep Caribbean Clean Amid Oil Quest
Petrobas Starts Output at Baleia Azul Presalt Field
Earl’s Pearl of the Day: "Only those who risk going too far can possibly find out how far one can go.” — T.S. Eliot
September 11, 2012Shell Interrupts Drilling in Alaska Arctic to Avoid IceOne day after starting to drill the first well in Alaska’s Arctic offshore in more than two decades, Royal Dutch Shell said Monday it needed to move its rig as a precaution against sea ice that could move into the area.
Shell said it decided to temporarily move off the Burger-A well after the wind shifted, in order to avoid a chunk of ice it has been monitoring.
"Part of working in ice is having the ability to temporarily relocate,” spokesman Kelly op de Weegh said.
The Noble Discoverer, one of the two drillships Shell leased for the Alaska drilling campaign, began digging the "top hole” of the prospect on Sunday.
Shell said the ship is disconnecting from its anchors and will come back to the area and resume drilling the initial phases of an exploratory well when the ice moves on.
The company plans to do work in up to five Arctic wells this season — three in the Chukchi Sea and two in the Beaufort Sea.
Click here for more information.Today's LinksGulf Coast Refiners, Petchem Plants Apply Hard-Won Preparedness LessonsSpectra Plans Export Network for Natural Gas in CanadaCrude Edges Higher as Traders Look to FedDiplomat: U.S. Ready to Help Implement Trans-Caspian Pipeline ProjectEarl’s Pearl of the Day: "A discovery is said to be an accident meeting a prepared mind.” — Albert Szent-Gyorgyi
September 10, 2012BP Agrees to $5.55 Billion Deal with Plains for Gulf Assets
BP announced this morning plans to sell a number of assets in the Gulf of Mexico to Plains Exploration and Production Co. for $5.55 billion in cash as part of a plan to divest its assets.
The deal includes a number of natural gas and oil fields in the Gulf of Mexico, including two non-operating assets — Ram Powell and Diana Hoover. The deal also includes three operating assets — Horn Mountain, Holstein and the Marlin Hub, which is comprised of Marlin, Dorado and King fields.
BP has sold more than $32 billion in assets since 2010 as part of a plan to divest its assets to focus on areas of growth, the company said.
The deal with Plains doesn’t signal an end to BP’s presence in the Gulf though, Brett Clanton, a BP spokesman, told Bloomberg.
"No one should confuse our effort to sell these older, non-strategic assets, which we announced months ago, with our ongoing commitment to the Gulf of Mexico,” Clanton said.
For more information, click here.
Today's Links
Finding Common Ground in the Gulf
Transocean in Talks for Four New Deepwater Rigs
Drillers See Robust Demand for Ultra Deepwater Rigs
Apache’s Kenyan Well Hits Gas
Earl’s Pearl of the Day: "When you play, play hard; when you work, don’t play at all.” — Theodore Roosevelt
September 7, 2012
Bingaman Exit Could Help Gulf States Get More Offshore Drilling Royalties
The retirement of Senate Committee on Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) makes getting a bill to increase federal offshore drilling payments to coastal states more likely next Congress, staff for Sen. Mary Landrieu (D-La.) told The Hill on Thursday.
Landrieu said in a letter, hand delivered Monday to President Obama, the flooding caused by Hurricane Isaac calls for another debate on revenue payments to coastal states. The letter signaled the Louisiana Democrat would push a bill to alter the payment structure and schedule next Congress after coming up short last year.
The four states Landrieu seeks to aid — Alabama, Louisiana, Mississippi and Texas — are scheduled to get 37.5 percent of federal revenues from energy production in the Gulf of Mexico beginning in 2017.
Landrieu’s proposal would lift the $500 million cap on those royalties and start paying the states in 2015. It also would create a revenue-sharing mechanism for states engaging in future federal offshore renewable energy production.
Staff admitted the renewable energy portion of the bill was scraped together at the last second to sway some Democrats. Staff said those Democrats hinted they liked the idea but ultimately decided the language needed more work.
For more information, click here.
Today's Links
Oil Firms Show Record Interest in Mature Areas Offshore Norway
Saudi Aramco, Total Refinery on Schedule
Delta Looking to Transport Bakken Crude by Rail
South Africa Lifts Ban on Shale Gas Exploration in Karoo Region
Earl’s Pearl of the Day: "We are what we repeatedly do. Excellence, then, is not an act, but a habit.” — Aristotle
September 5, 2012BREAKING NEWS:
Department of Justice Accuses BP of Gross Negligence in Gulf Oil Spill
The U.S. Department of Justice has accused BP Plc (NYSE: BP) of gross negligence in the 2010 Gulf of Mexico oil spill, according to media reports.
For more information, click here.
Midstream Trio Plans Utica Shale Pipeline Project
Three big energy midstream players are teaming up to get a head start on what they believe will be a growing demand for natural gas transportation as the Utica shale develops in the Northeast.
Spectra Energy Corp., Enbridge and DTE Energy Corp. have completed a memo of understanding to develop the Nexus Gas Transmission system to move natural gas from the Ohio Utica shale to markets in the Midwest and Canada, Houston-based Spectra said Tuesday.
The system would include new pipeline through northeastern Ohio and parts of Michigan at a cost of $1.2 billion to $1.5 billion, said Brian McKerlie, vice president of business development for Spectra.
The new system would service local distribution companies, power generators and industrial users throughout Ohio, Michigan and Ontario. It would include 250 miles of new large-diameter pipe with the capacity to transport 1 billion cubic feet per day of natural gas.
Low natural gas prices have prompted operators to shift toward shales rich in more lucrative natural gas liquids and oil, and to view dry natural gas as a byproduct of that production. But McKerlie said the natural gas market in Michigan and Canada is robust enough to support the proposed infrastructure investment.
For more information, click here.
Today's Links
PDVSA Refinery Resumes Ops; Safety Questions Linger
ERCOT Says Grid is Ready for Fall and Winter
Key Designer of Fuel Mileage Standards to Leave EPA
Oil Exploration Giants Should Take Cue From NASA’s Mission to Mars
Earl’s Pearl of the Day:"Pleasure in the job puts perfection in the work.” — Aristotle
September 4, 2012EPA to Grant Shell Request for Alaska Air-Quality Permit ChangesU.S. regulators granted a request from Royal Dutch Shell to alter the terms of an air pollution permit for the company’s Alaska drilling activities, removing a potential headache for the company as it proceeds to drill in the Arctic Ocean for the first time in decades.
The EPA said it would issue an order setting new air pollution limits for Shell’s activities, which include running diesel engines on its drill ship in the Chukchi Sea. Without the order, Shell would have faced fines for violations of clean air rules and negative headlines around its closely watched efforts in Alaska.
In June, Shell told the agency emissions from the engines exceeded the limits established in the original permit and asked for the permit to be changed to levels that are "achievable.”
A Shell spokesman said Friday the EPA’s decision was "more good news” one day after the company received a permit from the Interior Department to start drilling to a depth of about 1,400 feet below the floor of the Chukchi. That work could be underway within days, although the company still may not have enough time to complete the well by a Sept. 24 deadline set by U.S. regulators.
Click here for more information.Today's LinksStatoil Delays Start of Chukchi Drilling Until at Least 2015Valero to Convert Aruba Refinery to TerminalMexico Turns to Texas for Relief During Natural Gas CrisisSaudi Arabia May Become Oil Importer by 2030Earl’s Pearl of the Day:"Never explain — your friends do not need it and your enemies will not believe you anyway.” — Elbert Hubbard
August 31, 2012Energy Firms in Gulf Re-staff Platforms, Refineries
United States Gulf Coast oil and gas companies on Thursday assessed damage from Hurricane Isaac and began to re-staff evacuated refineries and offshore platforms as the now-weakened storm winds its way through central Louisiana.
Analysts with Tudor, Pickering, Holt & Co. said energy markets aren’t expecting "lasting disruptions” but they are "looking for confirmation of this” from oil and gas companies.
So far, the markets are being mostly reassured. Valero Energy Corp. said Thursday two of its Louisiana refineries that were shut down in anticipation of the storm have sustained no major damage and are starting to be re-staffed. The refineries, in Meraux and Norco, had been shut down early in the week.
As of Wednesday afternoon, refiners had shut down about 936,500 barrels a day of refining capacity, or 5.4 percent of the nation’s total, according to a tally by the U.S. Department of Energy.
On Thursday, about 1.3 million barrels a day of oil, or 95 percent of the crude oil production in the Gulf of Mexico’s federal waters, remained offline, according to the U.S. Bureau of Safety and Environmental Enforcement (BSEE). So did 3.3 billion cubic feet a day of natural gas, or 73 percent of the region’s natural gas output. The shut-in production figures showed little change from the numbers released on Wednesday by BSEE.
The Department of Energy (DOE) said Thursday about 39 percent of Louisiana electric customers were without power. About 11 percent of electric customers in Mississippi had also lost power, the DOE said.
For more information, click here.
Today's LinksBP Will Donate $1 Million for Isaac Relief
Shell Wins Conditional OK to Drill in Arctic
Apache Deploying Wireless Seismic Technology in Alaska’s Cook Inlet
Crude Prices Higher, Investors Await Fed Speech
Earl’s Pearl of the Day: "It is not enough to aim; you must hit.” — Italian Proverb
August 28, 2012
Gulf Coast Refiners Shut Facilities as Isaac Looms
With the prospect of Tropical Storm Isaac turning into a hurricane and making landfall in the midst of one of the busiest refining hubs in the United States, refining companies began closing their Gulf Coast facilities, shutting down at least 8 percent of the country's total fuel production capacity.
The storm has caused energy companies to pull workers from more than half of the nearly 600 production platforms dotting the Gulf, shutting in about 78 percent of the region's oil production and nearly half of its natural gas production. In total, some 1.08 million barrels of oil a day and 2.2 billion cubic feet a day of natural gas are off-line in the region.
The storm-induced refinery closures have already shut down 1.3 million barrels a day of fuel production capacity, or 8 percent of total output, according to the Department of Energy.
The National Hurricane Center's hurricane warning extends along the coastline of the eastern half of Louisiana, all of the coastlines of Mississippi and Alabama, and parts of western Florida.
Isaac's approach caused Marathon Petroleum Corp. and Phillips 66 to start shutting two Louisiana refineries with a combined capacity of 711,000 barrels a day Monday, with other refiners expected to follow suit as the hurricane nears.
Valero Energy Corp. said it was shutting down its 270,000-barrel-a-day refinery in Norco, La., and its 135,000-barrel-a-day refinery in Meraux, La., "as a precautionary measure."
For more information click here Today's LinksChevron Cash Fuels Deal Talk
Venezuelan Govt: Oil Supplies Not Affected by Refinery Accident
TPC Group Would Go Private with Sale
Havyard Scoops PSV Order
Earl’s Pearl of the Day: "Let no man pull you low enough to hate him.” — Martin Luther King Jr.
August 27, 2012Isaac’s Advance Roils Oil, Gasoline MarketPrices for crude oil and gasoline rose today as the advance of Tropical Storm Isaac caused companies to shutter offshore production in the Gulf of Mexico and threatened Gulf Coast refineries.
Crude futures for October delivery on the New York Mercantile Exchange rose $1.03 a barrel to $97.18, the biggest increase in a week. Forecasters are predicting Isaac will pick up strength, becoming a hurricane and making landfall early Wednesday between New Orleans and the Florida Panhandle.
About 24 percent of U.S. oil production and more than 8 percent of natural gas production has been affected by the storm, as oil companies pulled crews from 39 rigs, according to the Bureau of Safety and Environmental Enforcement. The affected facilities account for about 6.5 percent of the 596 manned platforms operating in the Gulf, BSSE said.
As Isaac continues to churn its way toward the coast, it’s likely to be a volatile week in the energy markets.
Click here for more information.
Today's LinksShell Asks for Arctic Drilling ExtensionKinder Morgan Energy Will Invest $90 Million in ProjectBP’s Pockets are Jingling as Assets Sold
PetroChina Seeks Acquisitions in Central Asia, East Africa, Australia, CanadaEarl’s Pearl of the Day:"The roots of true achievement lie in the will to become the best that you can become.” — Harold Taylor
August 23, 2012GOP Lawmaker Calls on White House to Push Natural Gas ExportsRep. James Lankford (R-Okla.) put more pressure on the Obama Administration to expedite approvals for liquefied natural gas (LNG) export facilities, calling it a "lay-up” for job creation.
Lankford said on CNBC’s "Squawk on the Street” LNG exports would offer economic "predictability” by providing a place to park "billions of dollars of investment.”
"Jobs are sitting around ready to go in natural gas,” Lankford said. "All we lack is federal predictability.”
Earlier this month, Lankford joined 33 other Republicans and 10 Democrats from Arkansas, Louisiana, Oklahoma and Texas in a letter urging Energy Secretary Steven Chu to fast-track LNG export facility certifications. Lankford said Chu had not yet responded.
With international natural gas prices fetching three times the cost than it does in the United States, the lawmakers contend the nation could capitalize by exporting the energy source.
U.S. firms are jumping at the chance to take advantage of overseas markets, with the domestic one already flooded with cheap natural gas. ExxonMobil, which had in the past abandoned plans to export LNG, last week filed a joint proposal with Qatar Petroleum International to convert a Houston-area LNG facility into one that exports.
The Energy Department and the Federal Energy Regulatory Commission must rule on that project, which could bring in up to $10 billion of investment.
Click here for more information.Today's LinksGulf of Mexico Well Costs Up 10 percent, ConocoPhillips Exec SaysSEC Approves O&G Payment Disclosure AmendmentU.S. Oil Imports Seen Hitting 20-Year Low 42% of Use
Sinkhole Drillers Halt to Insert Pipe CasingEarl’s Pearl of the Day:"More often than not, a hero’s most epic battle is the one you never see; it’s the battle that goes on within him or herself.” — Kevin Smith
August 22, 2012
Rosneft Breaks Seismic Ice in ArcticRussian state-owned Rosneft has kicked off extensive seismic survey work a year ahead of schedule on a pair of Kara Sea blocks under its exploration pact with U.S. giant ExxonMobil.
A 3-D seismic survey covering an area of 3,000 square kilometers in the East Prinovozemelsky 1 block and site investigation work is also being carried out to help determine the locations of the first wildcat wells.
Rosneft subsidiary RN Shelf Far East has also launched a 2-D shoot over 5,300 kilometers in the East Prinovozemelsky 2 block.
The two tracts are among three East Prinovozemelsky blocks in the Kara Sea included in a landmark $3.2 billion exploration joint-venture deal signed by Rosneft and ExxonMobil earlier this year that will also encompass acreage in the Black Sea, as well as exploitation of unconventional plays in North America.
Earlier this month, the pair opened a prequalification round for a tender to build an Arctic-class rig to carry out exploration and appraisal drilling in the frontier offshore play.
The tender is likely to attract harsh-environment rig players such as Norway’s Odfjell Drilling, which is eyeing "concrete” opportunities for contracts in the Russian sector.
RN Shelf has also started another 3-D seismic survey covering 1,200 square kilometers on the South Russky block in the Pechora Sea.
Work on all three surveys is due to run until October.
Click here for more information.Today's LinksU.S. Appeals Court Vacates EPA Cross-State Pollution RuleWhite House Worked With Buyout Firm to Save PlantOfficial: Israel Holds Opportunity for U.S. Oil and Gas FirmsStrange Bedfellows Debate Exporting Natural GasEarl’s Pearl of the Day:"I hear and I forget. I see and I remember. I do and I understand.” — Confucius
August 21, 2012Shell’s Drilling Rig Begins Two-Week Trek to Arctic SeaShell’s Kulluk drilling rig began a two-week journey to the Beaufort Sea north of Alaska on Monday, marking a major step forward in the company’s slow march toward a new era of oil exploration in the region.
The 29-year-old conical drilling rig is being towed from Dutch Harbor, Alaska, to Shell’s Sivilluq prospect, where the company hopes to drill at least one well before ice encroaches on the region this fall.
The departure of the Arctic-bound rig is a sign of Shell’s confidence the company soon will be able to launch drilling in the area, despite setbacks that have shortened its window for oil exploration. Shell executives say they now are aiming to complete two wells in the Chukchi and Beaufort seas this summer, down a previous goal of five.
"We expect to drill this year,” said Shell spokeswoman Kelly op de Weegh. "It’s disappointing to lose any days in such a small window, but we look forward to making the most of the time we have.”
The company has been waiting for ice to clear, federal drilling permits and for a critical oil spill response vessel to be ready before it can begin the work. That spill response barge, the Arctic Challenger, still awaits a Coast Guard certification and approval from federal drilling regulators.
Shell committed to regulators to have the Challenger containment barge at the ready during drilling in hydrocarbon-bearing zones as part of the company’s oil spill response plan for the region.
Op de Weegh said Shell isn’t backing down from that pledge. "We are committed to having the Arctic containment system in place before drilling through liquid hydrocarbon zones, and that commitment will not change,” op de Weegh said.
"We are nearing completion of this first-of-its-kind Arctic containment system, which houses response, containment and separation processes in one vessel. While it’s a fourth line of defense in the unlikely event of a loss of well control, it will not be deployed until it meets our high standards.”
Click here for more information.Today's LinksB.C. Businessman Proposes $13B West Coast RefineryU.S. Says Oil Firms Should Respect Baghdad Government
Fuel Industry Pushes to Keep High-Ethanol Blends Off the MarketLouisiana Sinkhole 40 Days, 40 Nights Salt Dome Drilling BeginsEarl’s Pearl of the Day:"Treat your friends as you do your pictures, and place them in their best light.” — Jennie Jerome Churchill
August 20, 2012
Obama Administration Revives Talks Over Emergency Oil ReleaseThe Obama Administration is reviving talks over the possible release of U.S. emergency oil supplies as the price of crude oil tops $95 a barrel, an administration official said.
The talks are in early stages and a final decision appears far from imminent, the official said. But the rising price of crude, along with increases in gasoline, is raising fears that high fuel costs could damage an already sensitive economy.
The average price of gasoline has reached $3.70, up from $3.40 a month ago, according to the "AAA Fuel Gauge.” The price of oil, meanwhile, settled at $95.60 a barrel Thursday, reaching a new three-month high.
A White House spokesman declined to comment on the issue.
The Strategic Petroleum Reserve is a 700-million-barrel stockpile of oil to be used in case of supply disruptions. The Obama Administration last released oil reserves in 2011 as part of a coordinated effort to offset drops in oil production in war-torn Libya.
The administration is also reaching out to ally countries to discuss the possibility of a coordinated release of emergency oil supplies, the official said.
The White House last considered a release of strategic reserves last spring, when oil prices were trading near $110 a barrel. The idea was shelved when oil prices fell.
Click here for more information.Today's Links
Shell Races the Ice in AlaskaOpinion: Developing Arctic Resources Will Put Americans to Work
Mexico Pipeline Expansion May Bring More Money to TexasTallgrass Energy Partners to Acquire Significant Midstream Assets from Kinder Morgan Energy PartnersEarl’s Pearl of the Day:"We cannot fail to win unless we fail to try.” — Tom Clancy
August 17, 2012Long Arm of Offshore Law Extends to ContractorsFederal regulators reaffirmed a year-old plan to go beyond policing oil companies and punish service companies, rig suppliers and other contractors that run afoul of rules governing offshore drilling.
The Interior Department’s Bureau of Safety and Environmental Enforcement (BSEE) used a policy document to lay out its approach to issuing what it calls "incidents of noncompliance” against contractors that violate offshore regulation. Those notices are the first step in a process that can lead to fines against companies.
"While the primary focus of BSEE’s enforcement actions will continue to be on lessees and operators, BSEE will, in appropriate circumstances, issue incidents of noncompliance to contractors for serious violations of BSEE regulations,” the document says.
The move solidifies a relatively new approach to offshore drilling oversight at the Interior Department, a year after drilling regulators first announced they would stop focusing solely on the lease owners and operators that search for oil and gas in federal waters.
In the policy document, the safety bureau says it will consider the gravity of a violation when considering whether a contractor should get a citation. Other factors include whether a contractor could reasonably predict its actions would result in serious injury or environmental damage.
The bureau also pledged to consider how much power a contractor has in taking actions that violate outer Continental Shelf regulations — a recognition that when it comes to offshore drilling, operating oil companies usually dictate the way things are done.
According to the policy guidance, the safety bureau will weigh whether a contractor had control over any activity that resulted in a violation and whether the firm should have known that the action would run afoul of regulations.
Click here for more information.Today's LinksOffshore Drilling Boom Continues Unabated, Despite Economic TurmoilCO2 Emissions in U.S. Drop to 20-year LowMexichem Plans Ethane Cracker JV with OxyChemSixel: ‘Next Level’ for Women in Energy
Earl’s Pearl of the Day:"You better live your best and act your best and think your best today, for today is the sure preparation for tomorrow and all the other tomorrows that follow.” — Harriet Martineau
August 16, 2012Shell’s Arctic Oil Drilling Window Closing as Permits AwaitedThe short window for Royal Dutch Shell to drill exploratory wells off Alaska’s Arctic coast is rapidly narrowing as the company still hasn’t completed the retrofit of its vital oil spill response vessel or received final permits for its use.
Shell initially planned to begin exploration activities in the Chukchi and Beaufort Seas in July. However, the company said Wednesday it is still working with U.S. officials on a schedule for inspections and deployment of the converted barge, the Arctic Challenger, which needs to be in place before drilling can start.
"Progress related to the final construction of the Arctic Challenger containment barge remains steady. We continue to work closely with the U.S. Coast Guard to outline a schedule for final inspections and an on-water deployment that would lead to certification,” a Shell spokesman said.
There’s no set timeline for the completion of the process, the spokesman added.
Shell has to wrap up drilling for oil in the Chukchi Sea by Sept. 24 and in the Beaufort Sea by the end of October. The deadlines are designed to create a buffer of time during which Shell can respond to any potential oil spills before ice moves in.
Wells in that area can take from 25 to 40 days to drill, although it’s hard to give a precise time due to the complexities of drilling in such an environment, the Shell spokesman said.
Click here for more information.Today's LinksRegulators Tweak Final Offshore Well RulesMurkowski: Consider Asia for Alaska Natural China’s Sinopec Pursues Big Energy Deal in TexasEPA Likely to Approve Grain Sorghum for Cleaner Ethanol
Earl’s Pearl of the Day:"I’d rather be a failure at something I love than a success at something I hate.” — George Burns
August 15, 2012BP Said to Seek $7.9 Billion Selling Gulf of Mexico FieldsBP Plc is seeking as much as $7.9 billion before tax payments for a group of Gulf of Mexico oilfields as it unloads assets following its 2010 spill in the region, two people with knowledge of the matter said.
The oil producer, Europe’s biggest after Royal Dutch Shell Plc, has prepared preliminary information for prospective buyers of assets including the Horn Mountain, Holstein, Diana Hoover and Ram Powell fields, said the people, who asked not to be identified because the sale process is confidential.
Because of taxes payable by the eventual buyer, the maximum proceeds BP can expect from the fields will probably be $5 billion to $6 billion, one of the people said. The fields, which hold proven reserves of about 120 million barrels of oil, produced about 58,000 barrels a day in the first quarter, the person said.
Chief Executive Officer Bob Dudley plans to sell $38 billion of assets by the end of next year, shrinking BP after the accident at its Macondo well, the worst offshore spill in U.S. history, wiped out a third of its market value. The London-based company said in May it plans to sell some "nonstrategic” assets in the Gulf.
"We’re progressing the planned divestments [in the region] to really focus our Gulf of Mexico footprint,” Dudley said on a July 31 conference call.
BP does not comment on speculation about the value of assets it’s selling, Brett Clanton, a BP spokesman, said in an email.
"But no one should confuse our effort to sell these older, nonstrategic assets, which we announced months ago, with our ongoing commitment to the Gulf of Mexico,” he said. BP intends to continue investing at least $4 billion annually in the Gulf over the next decade, Clanton said in the email.
Click here for more information.Today's LinksBP Scrapes Barrel with Latest SaleUSGS releases U.S. Oil, Gas Reserves Growth EstimatesLandrieu Presses Coast Guard on BP Spill CleanupSurvey Says Voters Back Offshore Drilling
Earl’s Pearl of the Day:"We all have a few failures under our belt. It’s what makes us ready for the successes.”—
Randy K. Milholland
August 14, 2012Interior to Open More of National Petroleum Reserve for O&G DevelopmentSecretary of the Interior Ken Salazar on Monday outlined a proposed plan to open additional acreage in the National Petroleum Reserve in Alaska (NPR-A) for oil and gas development. The proposed plan would make approximately 11.8 million acres available for leasing.
In March, the Interior released the draft Integrated Activity Plan and Environmental Impact Statement (IAP/EIS), which included four future management alternatives for the NPR-A.
The Interior Department decided to modify Alternative B of that plan after receiving more than 400,000 public comments on the IAP/EIS and feedback from a wide variety of stakeholders, including Alaska Native tribal governments, corporations and other Native organizations, local, state and government agencies, conservation groups and business and industry organizations.
The proposal to open more acreage in drilling comes on the heels of President Obama’s directive in May 2011 for annual oil and gas lease sales to be held in the NPR-A. The U.S. Bureau of Land Management last December offered 3 million acres in a lease sale, which resulted in 17 winning bids covering over 140,000 acres. Another lease sale is scheduled to be held in the NPR-A this November.
According to the Department of the Interior, the NPR-A is estimated to hold approximately 549 million barrels of discovered and undiscovered economically recoverable oil and approximately 8.7 trillion cubic feet of discovered and undiscovered economically recoverable natural gas.
The preferred alternative plan allows for the possibility of pipelines and related infrastructure to be constructed in the NPR-A to accommodate future oil and gas production in the Chukchi and Beaufort seas.
The final IAP/EIS is expected to be released late this year.
Click here for more information.Today's LinksHawaii Gas Seeks Liquefied Natural Gas ApprovalWest Texas Taking ‘Intelligent Approach’ to Oil BoomU.S. Mill Re-Opens to Meet China’s Rising Demand for DiapersOlympic Stadium’s Chemically Produced Wrap Getting RecycledEarl’s Pearl of the Day:"Always be a little kinder than necessary.” — James M. Barrie
August 13, 2012Feds Give New Guidelines for Offshore Spill Response Plans
Federal regulators have given offshore drilling operators the most specific instructions yet for how the companies should prove they are ready to respond to oil spills.
The guidance came in the form of a "notice to lessees” issued late last week by the Bureau of Safety and Environmental Enforcement (BSEE).
The 41-page document outlines standards for the oil spill response plans required of companies drilling on the nation’s outer continental shelf. The plans document exactly what resources companies have to respond to spills from their offshore operations.
The bureau is pushing companies to adopt "flexible and innovative offshore oil spill response techniques” — even if those approaches or equipment don’t already have a rating for the amount of oil they can recover on any given day.
For instance, while some long-standing oil removal equipment, including skimmers, has been rated for its daily recovery capacity, that isn’t the case with more cutting-edge technology.
"BSEE encourages you to use new technology and response systems that will increase the effectiveness of mechanical recovery tactics,” the bureau said, adding its review will consider "the complete response strategy” companies detail.
Current regulations require offshore operators to show plans to support oil spill responses for worst case scenarios where the spills last 30 days.
But in the new notice, the bureau made clear operators should go beyond that and describe how they would get supplies in case a spill continued gushing unchecked for even longer — as did the 2010 Gulf of Mexico spill that led to the creation of the bureau and the new response rules.
Click here for more information.Today's LinksAlaska Governor Asks Salazar to Expedite Point Thomson DecisionStudy: U.S. Natural Gas Market Has Grown 15% Since 2009BP Sells Texan Midstream AssetsCNOOC to Submit Oil Deal for Review
Earl’s Pearl of the Day: "It is better to know some of the questions than all of the answers.” — James Thurber
August 10, 2012Cheniere Proceeding with LNG Export FacilityCheniere Energy Partners LP is moving ahead with the construction of facilities to liquefy and export natural gas in Louisiana, moving the United States one step closer to becoming a major exporter of the commodity.
The company said Thursday it had given engineering contractor Bechtel Oil, Gas and Chemicals Inc. the green light to start building two liquefaction trains at its Sabine Pass, La., import terminal. The first liquefaction train, which will turn natural gas stemming from booming U.S. shale fields into liquid that can be exported overseas, is expected to start operating as early as 2015, and the second train will start six to nine months later.
Cheniere, which originally built the Sabine Pass facility to import natural gas at a time when experts perceived there would be shortages of the commodity, began its effort to turn it into an export terminal about two years ago. The company has struck long-term agreements with four global buyers to supply more than 2 billion cubic feet a day of natural gas for 20 years.
"It is a testament to the flexibility of the U.S. markets and institutions that a small company like ours was able to accomplish so much in a short time,” said Cheniere Chief Executive Charif Souki.
Cheniere expects the project to cost about $5.6 billion, funded by $2 billion of equity and $3.6 billion of debt. The effort is backed by private-equity firm Blackstone Group.
"We are pleased to provide the growth capital to fund the construction of the first LNG export facility in the continental United States, creating thousands of jobs for American workers and providing significant benefits to the U.S. economy,” David Foley, senior managing director of Blackstone, said.
Cheniere is the only company that has received approval from the Obama Administration to export LNG to countries lacking a free-trade agreement with the United States.
Click here for more information.Today's LinksSuits Filed in Shaw DealSinkhole Free of Radiation but Residents Still MadAPI: Obama Administration Should ‘Make Good’ on Energy StrategyEIA Projects Slightly Higher Global Oil Demand Growth
Earl’s Pearl of the Day:"The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger —- but recognize the opportunity.” — John F. Kennedy
August 9, 2012Allen Parish Agrees to Property Lease for RefineryThe Allen Parish, La., Police Jury has agreed to lease more of the former Arizona Chemical property in Oakdale to a Texas-based company for a $100 million refinery.
The company, Virtual Engineering Operations (VEOPS) of Kingwood, Texas, plans to build a refinery to process 20,000 barrels a day of crude to produce diesel fuel for farmers, jet fuel and heating oil.
The company hopes to increase its production to 40,000 barrels a day in the future with construction of a pipeline.
In April, the Police Jury granted a 49-year lease to the company for 67 acres of the property at a cost of $100 per acre for five years, then $1,000 per acre for the remainder of the lease. The panel on Monday agreed to lease 153 acres to the company.
VEOPS President J. Craig Harrington said the additional acreage is needed for a railroad track. The rail system is needed to unload products from 120 rail cars expected to arrive at the facility.
"We are also looking at the possibility of other companies coming in and using the track,” Harrington said. "We want to make the land available for more industrial development in the area.”
Harrington said plans for the refinery are on track and moving forward. The project is in the engineer design phase, he said. "We have to make sure everything is covered and put bids together,” Harrington said.
Construction on the facility is expected to begin in the next two to three months.
Click here for more information.Today's LinksChevron Removes Natural Gas from Louisiana Cavern after Sinkhole FoundAdmiral Confident in Coast Guard Arctic Readiness
GOP Governors Decry Limited Role in Offshore PlanningChina Accuses the U.S. of Interference in South China Sea DisputesEarl’s Pearl of the Day:"It is no good to try to stop knowledge from going forward. Ignorance is never better than knowledge.” — Enrico Fermi
August 8, 2012Lawmakers Urge Faster OK of LNG ExportsNearly four dozen Republican and Democratic lawmakers from oil patch states implored the Obama Administration Tuesday to fast-track permits for export of liquefied natural gas.
The bipartisan push comes as a glut of domestic natural gas keeps prices low and has sent energy companies scrambling to find new markets for the fossil fuel.
In a letter to Energy Secretary Steven Chu, the lawmakers said exports are necessary to continue fostering development in Texas, Louisiana and other states that long have shipped gas via pipelines to other parts of the country that didn’t produce it themselves.
"Large portions of the country which were previously served by our region via pipeline now have a closer commodity at hand,” said the 44 lawmakers, led by Rep. Gene Green (D-Houston) and Rep. James Lankford (R-Okla.). "As such, without the ability to market to international customers, this could have a severe impact on production in our states.”
The lawmakers suggested the Energy Department is moving too slowly in vetting applications from at least seven companies to begin exporting liquefied natural gas, including a proposal from Texas’ Freeport LNG Development.
Federal regulators recently approved Houston-based Cheniere Energy’s plans to begin exporting LNG from its Sabine Pass terminal in southwest Louisiana, but the Energy Department has postponed verdicts on similar proposals until it gets the results of a study evaluating how selling more American harvested natural gas overseas would affect prices for U.S. consumers. The study is expected to be out this summer.
The administration is struggling to decide whether — and how much — the United States should share its new natural gas bounty with foreign countries. It already sells a relatively small amount of natural gas to Mexico, Canada, Brazil and other countries, but pending proposals could put the United States on track to export about 16 billion cubic feet daily.
"As part of the department’s statutory responsibility to determine whether natural gas exports are in the public interest, the Energy Department is assessing the economic impacts of increased natural gas exports,” spokeswoman Jen Stutsman said.
White House energy and climate change adviser Heather Zichal has said a major concern is ensuring if natural gas is exported, it won’t send prices too high inside U.S. borders — hurting American consumers and manufacturers who use natural gas as a building block to make other products.
In their letter, the oil patch lawmakers insist if U.S. regulators drag their feet, American producers could lose out to foreign competitors.
Click here for more information.Today's LinksShell: Oil Spill Barge Close to Beginning Arctic JourneyGPCA Official: Downstream Sector Must Act to Fill Widening Job GapKuwait Going Ahead with $14.5B RefineryGreek, Italian Governments Back Trans-Adriatic Gas PipelineEarl’s Pearl of the Day: "Only a fool would choose ignorance over learning or mediocrity over excellence.” — Earl B. Heard
August 7, 2012Coast Guard Prepares for Expanded Arctic RoleThe Coast Guard is ready for expanded activity in Arctic waters, including petroleum exploration, Commandant Robert Papp told a U.S. Senate subcommittee Monday, even though the nearest agency base is more than 750 miles southeast of the Bering Strait, on Kodiak Island.
"For right now, we are well prepared, because like we always do traditionally, we have multimission assets we can deploy that are very capable and are sufficient for the level of human activity going on this summer and perhaps for the next three or four summers,” Papp told a U.S. Senate Homeland Security Appropriations Subcommittee.
Sen. Mary Landrieu (D-La.) conducted the hearing in a hangar of Air Station Kodiak at the request of Sen. Lisa Murkowski (R-Alaska) with the intent of discussing Coast Guard needs as melting summer sea ice opens more of the Arctic to cargo vessels, ecotourism and possibly commercial fishing.
Landrieu asked whether the Coast Guard was prepared if something went terribly wrong with petroleum drilling, as happened in the Gulf of Mexico two years ago when the Deepwater Horizon drilling rig exploded.
Landrieu said the Gulf spill drew a response of 47,000 personnel and 7,000 vessels and she didn’t see those kinds of assets at the Kodiak base if Shell’s response measures were insufficient. "The Coast Guard is it,” she said.
In response, Papp said he had faith in Shell’s preparations."I have to say I’m impressed with the amount of effort, work and commitment of resources Shell has done,” he said.
The Deepwater Horizon rig was by itself, Papp said. Shell will have 22 spill response vessels and a containment apparatus staged near Arctic Ocean drilling sites.
"They will have everything in place, ready to go, an overabundance of caution in case something happens,” he said.
Papp said the comparison between the Gulf of Mexico and Shell’s proposed Alaska wells as a comparison of apples to oranges, to a certain extent. The Alaska wells will be drilled in water up to 150 feet deep, compared to 5,000 in the Gulf, and pressure in the petroleum reservoirs will be far less.
"But even saying that, we’re looking at the worst case discharge possibility and I think Shell has well prepared for that,” he said.
Click here for more information.Today's LinksMurkowski, Hoeven Tour Alaska, Press for Expanded Drilling
Kinder Morgan Deals for PipelinesU.S. Firm Gets Involved in Falklands DrillingMSHA’s ‘Examinations’ Rule for Underground Coal Mines Effective Aug. 6Earl’s Pearl of the Day:"Having a dream is what keeps you alive. Overcoming the challenges make life worth living.” — Mary Tyler Moore
August 6, 2012
Marcellus Shale Becoming Top U.S. Natural Gas FieldThe Marcellus Shale is about to become the most productive natural gas field in the United States, according to new data from energy industry analysts and the federal government.
Though serious drilling only began five years ago, the sheer volume of Marcellus production suggests in some ways there’s no going back, even as New York debates whether to allow drilling in its portion of the shale, which also lies under large parts of Pennsylvania, West Virginia and Ohio.
The top spot for the Marcellus "doesn’t surprise me,” said Jay Apt, a professor of technology at Carnegie Mellon University. "But will it lead to industries that spring up to use that gas?” he asked, adding much of the bounty could also end up being shipped to Canada, the Gulf Coast or overseas.
In 2008, Marcellus production barely registered on national energy reports. In July, the combined output from Pennsylvania and West Virginia wells was about 7.4 billion cubic feet per day, according to Kyle Martinez, an analyst at Bentek Energy. That’s more than double the 3.6 billion cubic feet from last April, and represents more than 25 percent of national shale gas production.
That’s neck-and-neck with production from the Haynesville region in Arkansas and Texas, but new drilling permits there have declined sharply.
The Powell Shale Digest, an industry newsletter based in Fort Worth, Texas, concluded a recent report from the U.S. Energy Information Agency (EIA) means "it is reasonable to assume” the Marcellus has or will soon pass Haynesville as the top producer.
Apt said having a natural resource bounty is one thing, and using it wisely is another. The current wholesale price of natural gas is about $3 here, but $12 or more in Europe and Japan.
"It’s clear people will want to export” the Marcellus gas, Apt said, adding such an outcome could lead to what economists call "the resource curse,” which is when the general population hardly benefits, while a few get very rich.
But Apt said there are some hopeful signs, such as the Shell Oil Co. plan to build a petrochemical plant to turn Marcellus gas into other consumer and industrial products including plastics. It’s widely believed if Shell moves ahead with plans to build that $2 billion plant north of Pittsburgh, other small industries will follow.
For now, it looks like the Marcellus region will be in the top production spot for several years, analysts say. While drilling has slowed, there were still 288 new well permits issued in May, and more than 1,200 for the first five months of the year, according to data from LCI Energy Insight, an El Paso firm that tracks national energy trends.
Click here for more information.Today's LinksPHMSA Orders Enbridge to Submit Lakehead Safety PlanUnderground Gasoline Pipeline Will Run from Norco, La., through Lake Pontchartrain, to MississippiBP, Transocean and Halliburton Setting Aside Billions for Possible Deepwater Settlement
Report: Concerns over Guar Supply OverblownEarl’s Pearl of the Day:
"Study without desire spoils the memory, and it retains nothing that it takes in.” — Leonardo da Vinci
August 2, 2012Transocean CEO: Making Progress on Deepwater Horizon ResolutionTransocean Ltd. is making progress toward a settlement in the Deepwater Horizon case, Chief Executive Officer Steve Newman said Thursday.
Transocean owned and operated the drilling rig that exploded in the Gulf of Mexico in April 2010, killing 11 people and sending massive amounts of crude oil into the U.S. Gulf of Mexico. The rig was leased by BP PLC.
A trial at a federal court in New Orleans is scheduled for January and "we are well prepared to defend the company in court if necessary,” Newman said. "At the same time, we continue to explore the possibility of a resolution.”
When the company disclosed its earnings results late Wednesday, it said it set aside an additional $750 million in estimated loss contingency for Deepwater Horizon related expenses, an amount Newman said "reflects our efforts in this regard.” Analysts with Tudor, Pickering, Holt & Co. said the Deepwater Horizon contingency estimates now total $1.95 billion.
Newman said he believes "we are making progress” in the negotiations.
Click here for more information.Today's LinksU.S. Bolsters Gulf Naval PresenceTesoro to Ship Bakken CrudeClinton Urges Sudan, South Sudan to Resolve Oil Row
Oil Companies Provide Different Shale AccountsEarl’s Pearl of the Day:"Success is the ability to go from one failure to another with no loss of enthusiasm.” — Sir Winston Churchill
August 2, 2012U.S. Oil Reserves Jumped in 2010
U.S. energy officials estimate oil and natural gas reserves jumped in 2010 by the highest margin in at least three decades, lending weight to the idea the United States can meet more of its own energy demand.
The Energy Information Administration (EIA) said in its annual report proven reserves of crude oil jumped by 13 percent, with the highest increases seen in Texas, North Dakota and the Gulf of Mexico. Proven reserves of natural gas rose by 12 percent.
The increases were the highest recorded by EIA since it began publishing the estimates in 1977. "These reserve increases underscore the potential of a growing role for domestically produced hydrocarbons in meeting both current and projected U.S. energy demands,” EIA Chief Adam Sieminski said.
The EIA’s estimates identify how much oil or natural gas can be produced with reasonable certainty, given current economics and existing technology. Higher oil prices, which make it profitable to do more types of drilling, helped to boost the oil reserves in 2010. The increased use of hydraulic fracturing, meanwhile, helped to buoy the amount of natural gas reserves by allowing operators to tap into supplies locked in shale rock formations.
The jump in energy reserves comes as lawmakers are debating how quickly the United States should be expanding domestic production. Earlier this year, Republicans criticized the Obama Administration for keeping a lock on offshore drilling in the Atlantic and Pacific oceans. The administration says it wants to promote oil drilling in areas where resources are known to exist and production already takes place.
The EIA estimates show 25.2 billion barrels of oil could be recovered in the United States, up from the previous estimate of 22.3 billion barrels. Current U.S. petroleum consumption is about 7 billion barrels annually.
Natural gas reserves are estimated at 318 trillion cubic feet (tcf), up from the previous estimate of 284 tcf. Annual U.S. natural gas consumption is about 24 tcf.
Click here for more information.
Today's Links
Republicans Seek to Force Spill Report TestimonyMississippi Lime Play Sprawls Northward into NebraskaLobbyist for Keystone: ‘They Want to Eliminate Fossil Fuel Use’Russia Watchdog Seeks to Widen Offshore Access for Oil ProducersEarl’s Pearl of the Day:"It is easier to get forgiveness than permission.” — Stuart’s Law of Retroaction
August 1, 2012Shell Takes Key Step on Scaled-back Alaska DrillingShell has begun preparations to install anchors at the site of one of its planned wells in the Chukchi Sea north of Alaska — a major step toward launching a new era of Arctic oil exploration, even as the company has been forced to scale back its drilling plans.
Delays in construction of an emergency spill containment barge, last-minute problems with an essential air pollution permit and stubborn sea ice still clinging to Alaska’s coast have shortened the company’s drilling window. And now Shell believes just two out of 10 wells planned for the Beaufort and Chukchi seas are likely to be completed this year.
Even those might be tough, conceded Shell Alaska Vice President Pete Slaiby. "We hope we get two wells drilled to completion,” he said. "But it’s going to be a challenge.”
Shell has to stop drilling in hydrocarbon-bearing zones by Oct. 31 in the Beaufort Sea and Sept. 24 in the neighboring Chukchi Sea. Shell also will be forced to suspend operations in the Beaufort Sea to allow native Alaskans time to hunt the bowhead whale that migrate through the area; whether the company can resume work there this year would be up to Interior Department officials.
Operations have to be managed around sea ice, which can swiftly encroach on ships in fall. One of Shell’s ice management vessels is in the Chukchi Sea now, and another, the Aiviq, is set to soon deliver the first set of anchors that will be used to position the Noble Discoverer drillship above the company’s Burger prospect.
Slaiby said the deployment of the anchors — which each will take about eight hours to set — marks a "red letter day.”
The development also underscores Shell’s confidence it will be allowed to drill, even though it still must secure Interior Department permits for individual wells and win other approvals.
The EPA has yet to rule on a request by Shell to waive some emissions limits in a permit governing pollution from the Discoverer drillship.
And as of mid-Tuesday, Shell was still working on the classification and inspection of the newly built Arctic Challenger oil spill containment barge required under its government-approved spill response plan.
Slaiby said he expects sea trials of the barge to begin this weekend, paving the way for Shell to seek a "certificate of inspection” from the Coast Guard before the Challenger gets under way.
Click here for more information.Today's Links
U.S. Senate Revives Fuel Cell and Hydrogen CaucusFreeport in Talks with Shell to Export LNG from U.S. MSC: Drought Effects Pose Problems for U.S. RefinersSports Star Set to be New Face of CoalEarl’s Pearl of the Day:
"Act as if it were impossible to fail.” — Dorothea Brande
July 31, 2012CB&I Makes Deal to Buy Shaw GroupEngineering and construction firm Chicago Bridge & I Co. (CB&I) has agreed to buy another industry player in a $3 billion cash and stock deal that will create one of the largest firms of its kind, executives announced Monday.
Both companies — CB&I and The Shaw Group — are involved in historic projects worldwide, including the first nuclear reactors permitted for construction in the United States since 1978.
The combined business will have about 50,000 employees, a talent base CB&I President and CEO Philip K. Asherman said was a key part of the deal for the two engineering, procurement and construction companies. Together, they will have more than $28 billion in contract commitments for future work.
CB&I, which is based in The Hague but operates out of The Woodlands,Texas, and Baton Rouge, La.-based Shaw expect the deal to close in the first quarter of 2013.
"This scale places us in a position where we’ll be one of the largest western companies in the business and likely the largest company in terms of resources targeted to the energy sector,” Asherman said.
CB&I will acquire Shaw for $46 a share, including $41 per share in cash and $5 in CB&I equity, the companies said. The deal will be funded with cash from both companies as well as $1.9 billion in debt. Asherman will remain president and CEO of the expanded company, while Shaw Chairman, President and CEO J.M. Bernhard Jr. will leave the company.
The Shaw brand will remain a part of CB&I, as a unit called CB&I Shaw, which will build on its prior relationships with governments and private clients as part of its environmental and infrastructure division, among other focuses. Asherman said the business would continue to have a strong presence in Louisiana.
"We see only additional opportunity for those 4,500 employees in all the areas in Louisiana and we expect to continue that,” he said. "It will not be a migration to Texas.”
Click here for more information.Today's LinksBP in Talks on Potential U.S. Gas ExportsU.S. Officials Call Gulf Spill Drill a Success
Saudi Oil Output Seen at Record Pace More College Grads Want to Work for Energy FirmsEarl’s Pearl of the Day:"The foolish man seeks happiness in the distance, the wise grows it under his feet.” — James Oppenheim
July 30, 2012Eagle Ford a Contender for Top U.S. PlayHighly productive wells and the vast size of the Eagle Ford Shale are combining to make the South Texas shale play a contender for being the nation’s best, according to a new report.
The report, from information and analytics firm IHS, looked at well performance for oil and oil-rich liquids in the Eagle Ford as well as in the Bakken Shale of North Dakota and Montana, currently the nation’s top play. The Bakken has more wells than the Eagle Ford, but so far, on a per well basis, the Eagle Ford seems to be producing more than the Bakken.
The IHS analysis shows "Eagle Ford drilling results appear to be superior to those of the Bakken,” said Andrew Byrne, director of equity research at IHS and the study’s author.
The Bakken shale is the play against which others are measured, Byrne said, because "it was the key play that really opened up development of unconventional resources” using high-tech drilling methods and hydraulic fracturing.
"The results from the Bakken were so strong it set the standard by which all others will be measured. It was the one play that incited the industry into pursuing these opportunities,” he said.
Wells in the Eagle Ford Shale have a stronger flow — 300 to 600 barrels a day of oil and oil-rich liquids, based on average production in a peak month — than in the Bakken, where flow ranges from 150 to 300 barrels a day."
One of the reasons we really like the Eagle Ford is its potential as a large total resource. It could be one of the best, if not the best, in North America,” Byrne said.
The Eagle Ford sweeps 400 miles from East Texas to counties south of San Antonio and on to the border.
The play "gets uniformly strong results, and that’s making the play look that much bigger and better,” Byrne said.
Click here for more informationToday's Links
Emergency Drill Tests Containment Equipment in GulfSabic and ExxonMobil’s $3.4 Billion Elastomers JV Will Help to Create a Major Rubber Industry in Saudi ArabiaRepsol Follows BP into Namibia on Prospects for First OilStudents Explore Career Options at Marcellus CampEarl’s Pearl of the Day:"A wise man can see more from the bottom of a well than a fool can from a mountain top.” — Unknown
July 27, 2012Bakken Crude Reaching Louisiana Refiners by BargeSurging oil production in the land-locked Bakken Shale is finding a new outlet on one of America’s first highways — the Mississippi River.
Kirby Corp. said it is shipping crude from the Bakken, an oil rich shale located in North Dakota and Montana, to refiners in Louisiana using barges on the Mississippi, the first major barge operator to do so. The move comes as producers in the Bakken, where production is growing faster than energy companies’ ability to ship it out, scramble to get their crude to more profitable markets.
The phenomenon underscores the growing geographic reach of U.S. light, sweet crude, a bounty that has been unlocked in recent years by advanced drilling techniques. It will give more Gulf Coast refineries access to the relatively inexpensive crude that has driven profits for their Midwest competitors.
Last weekend in St. Louis, Kirby loaded a unit-train of Bakken oil on its barges that had arrived by rail. The barges take a week to travel down the Mississippi River to bring the oil to the Baton Rouge, La., area, said company spokesman Steve Holcomb.
"We’ve moved Canadian tar sands from St. Louis before, but this is the first time we have loaded crude oil that originated out of the Bakken,” Holcomb said.
The Mississippi oil trade, which barely even existed until 2007, has until now been conducted by less than 100 barges operated by small, private companies. The business should start seeing more Bakken oil traffic now that Kirby, which owns more than quarter of the country’s tank barges, has shown it thinks the trade profitable, said Kevin Sterling, analyst at BB&T Capital Markets.
The oil will be welcome at the 19 refineries in Louisiana, many of which are large facilities operated by Exxon Mobil Corp., Phillips 66 and Marathon Petroleum Corp. Louisiana is the second largest refining state in the United States after Texas, according to the Energy Information Agency.
Rail cars have so far been the main mode of transport for oil out of the Bakken but the increase in traffic has made rail cars harder to come by and barges more attractive for deliveries, said John Heida, director of North American oil research at analyst-firm IHS.
"The volume of oil coming out of the Bakken might not change, but [barges] will make it easier to get it down to the Gulf Coast,” Heida said.
Click here for more information.Today's Links
TransCanada Gets Gulf Coast Pipe NodShell Scales Back Arctic Drilling PlansEnergy and Jobs Act Could Reduce Unemployment and Help Faltering EconomyPickens: Let’s Make the Switch to Natural GasEarl’s Pearl of the Day:"The knowledge that you have emerged wiser and stronger from setbacks means that you are, ever after, secure in your ability to survive.” — J. K. Rowling
July 26, 2012House Rejects Obama Administration Drilling PlanThe House of Representatives rejected an Obama Administration plan for selling offshore drilling leases over the next five years and instead voted to replace it with a more aggressive GOP alternative.
Although a bipartisan coalition of Senators introduced a similar proposal, neither pro-drilling measure is expected to clear Congress, much less with the support needed to override President Barack Obama’s threatened veto.
Still, Republicans were able to muster a strong showing of support for their plan, which passed 253-170 and would schedule 29 offshore oil and gas lease sales over the next five years, nearly double the 15 that would be allowed under the administration’s existing schedule. In a separate 164-261 vote, the House rejected the administration’s five-year plan, which was formalized in late June.
"The bipartisan plan passed today is what a real vision for America’s energy future should look like — more American jobs, more American energy and less dependence on unfriendly foreign countries,” Rep. Doc Hastings (R-Wash.) said.
Hastings’ bill would schedule 29 lease sales and give oil companies several opportunities to bid on drilling rights in the Chukchi and Beaufort seas north of Alaska. The measure also would schedule a sale of North Aleutian Basin drilling rights in 2016 and give energy companies two cracks at leases off the south California coast in 2014 and 2017.
The GOP bill also would force a sale of offshore drilling leases in an area off the coast of Virginia, which was originally scheduled for 2011 but indefinitely postponed amid opposition from leaders in neighboring northern states and concerns raised by the Defense Department, which conducts exercises in the region.
In the Senate, a bipartisan coalition led by Sen. Lisa Murkowski (R-Alaska) introduced another drilling plan. It was co-sponsored by Sens. Jim Webb (D-Va.), Mark Warner (D-Va.), Mary Landrieu (D-La.), John Hoeven (R-N.D.) and Jim Inhofe (R-Okla.).
The Senate plan would schedule 27 lease sales, including auctions of tracts off the mid-Atlantic Coast. It also would provide a big incentive to states to endorse drilling in nearby waters by giving them a 37.5-percent cut of any federal royalties derived from oil and gas drilling off their coasts. Similar revenue-sharing proposals have been controversial in the Senate.
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INGAA: Firm Supply Contracts Would Encourage Pipeline GrowthShell May Trim 2012 Alaska Drilling for Inspections, IceBiofuels Battle Ignites AgainFracking Best Practices: Top 10 RecommendationsEarl’s Pearl of the Day:"Nothing is permanent in this wicked world, not even our troubles.” — Charlie Chaplin
July 25, 2012Fight Over Drilling Ban Postponed – For Now
The anticipated showdown between House Republicans and Interior Department officials over the Obama Administration’s decision to temporarily halt deepwater drilling after the 2010 Gulf oil spill won’t materialize today.
House Natural Resources Committee Chairman Doc Hastings (R-Wash.) postponed his panel’s planned hearing with Interior Department officials late Tuesday after he said the administration did not commit the invited witnesses would attend the hearing. Hastings said the rescheduled hearing, expected to occur in September, would allow time "to ensure cooperation.”
The panel has been investigating how the Interior Department assembled a report that recommended a moratorium on some drilling in the Gulf of Mexico roughly a month after the lethal blowout of BP’s Macondo well. The committee is probing whether the report was packaged and edited so it appeared professional engineers and industry experts who peer reviewed the document signed off on the recommendations, including the urging for a moratorium.
Eight of 15 experts named in the report insisted they did not endorse the ban recommendation and said it was added only after they reviewed the document.
Hastings has repeatedly rapped the Interior Department for stonewalling the committee’s investigation.
"There is a clear pattern of actions by the Interior Department to withhold information and answers on the administration’s falsely edited report and decision to impose a Gulf drilling moratorium that cost thousands of jobs, inflicted widespread economic harm and restricted American energy production,” Hastings said.
Administration officials have stressed they have given the committee nearly 2,000 pages of documents and cooperated with the probe.
"We will continue to work with the committee to meet their legitimate oversight interests,” said Interior Department spokesman Blake Androff.
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Coast Guard Girds for Heavier Traffic in the Arctic 
Oil Lease Sale Draws $1.7 Billion in Winning Bids 
Phillips 66 CEO Says Decision on Louisiana Refinery Will Come in Summer