Topic A: Energy - Analysis, discussion & commentary on energy exploration, development and innovation
Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
September 2, 2014

China Growth Fuels U.S. Methane Rebirth

Fuel Fix reports that “China’s growing appetite for methanol has ignited a renaissance in North America, where vast supplies of cheap natural gas from the U.S. shale boom are attracting Chinese investments into new methanol plants.”

“The methanol market has accelerated rapidly in recent years as the Chinese throw their money behind new projects to expand North America’s capacity to produce methanol. Made from natural gas, methanol is used in a wide range of products, including plastics, paints, solvents, refrigerants and pigments.”

“Other countries also use methanol as a replacement or an additive to gasoline, but the U.S. Environmental Protection Agency has not approved it as a transportation fuel.”

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WY Adds Oil Rigs, Expands Drilling

The Casper Star Tribune reports that “Wyoming and the country are heading in opposite directions, at least as far as drilling rigs are concerned.”

“Baker Hughes, the Houston-based oil services firm, reported that the number of drilling rigs nationally fell by 17 for the week of Aug. 22. The number of oil rigs fell by 25 for the week, the biggest weekly decline since December 2012.”

“Wyoming, meanwhile, continued to add to its fleet of drillers looking for oil and gas. The state added one more rig to its numbers last week, ending at 56 total. That was up nearly 11 percent over the same period last year, when Wyoming had 46 rigs.”

How ‘Internet of Things’ Could Change Oil and Gas Industry

Rigzone reports that “the global oil and gas industry’s hunt for hydrocarbons in increasingly remote, extreme environments and its focus on safety and efficiency as it faces a shortage of expertise is driving the need for Internet of Things solutions within the industry.”

“The Internet of Things – where objects, people and animals have unique identifiers and can transfer data over a network without requiring human-to-human or human-to computer interaction – has evolved from the convergence of wireless technologies, micro-electromechanical systems and the Internet. In the Internet of Things, a thing can be a person with a heart monitor implant, a car with built-in sensors that alert drivers to low tire pressure – or any natural or manmade object that can be assigned an IP address and able to transfer data over a network.”

“The shift from human input generating data – such as credit card transactions at a gas station pump – to data generated between machines, is greatly expanding the number of possible transactions that can occur. Presently, there are at least 10 billion unique devices currently connected, according to technology analysis firm Gartner. By 2020, Gartner expects the Internet of Things will have more than 50 billion devices.”

Report: How to Design and Enable a Successful Land Organization

A new PwC report states: “Nowhere has the impact of US onshore resource play development been felt more strongly than among Land organizations. The volume and pace of development within resource plays requires faster, more ‘nimble’, and more capable Land organizations than in the past. The strategic importance of land has been elevated, but E&Ps are only now beginning to assess their Land organizations holistically to understand what success looks like and how they can enable that success.”

“Drawing upon PwC’s Land Benchmarking Study and interviews with more than 70 oil and gas professionals from different functions across 20 E&Ps, we outline in this article a framework for understanding what success looks like within Land—we detail what the renewed strategic importance of Land means for operators in terms of organization, people, and process. Together with exploration and development, Land is one of the critical planks for a successful upstream operator.”

CA Senate Require Oil Industry to Outline Water Use

Reuters reports that “the California state Senate on Thursday unanimously approved a bill requiring oil companies to report how much water they use in their drilling operations and the water’s source, a move that comes amid a severe statewide drought.”

“Oil well operators used more than 80 billion gallons of water in California last year in ‘enhanced’ oil recovery techniques such as steam injection and water flooding, which help bring heavier, thicker crude to the surface.”

“Water also comes to the surface during oil drilling, but it is unclear how much of that ‘produced water’ is reused by the oil companies for new production because there are currently no reporting requirements, something the bill seeks to address. Oil drilling produced more than 130 billion gallons of water last year.”

U.S. to Resume Resume Fracturing Leasing in California

The Associated Press reports that “the U.S. Bureau of Land Management will resume issuing oil and gas leases next year for federal lands in California after a new study found limited environmental impacts from hydraulic fracturing and other enhanced drilling techniques, the agency said Thursday.”

“The move will end a halt that has stood since a federal judge ruled in 2013 that the federal agency failed to follow environmental law in allowing fracking on public land in Monterey County.”

“The study released Thursday was conducted for the BLM by the state-created California Council on Science and Technology. It concluded the current level of fracking and other well-stimulation techniques by drillers to get more oil out of rock formations did not seem to be poisoning water supplies or increasing earthquake risks in the state.”

U.S. Refinery Production Spikes

The New York Times reports that “United States refinery production in recent weeks reached record highs and left supply depots flush, cushioning the impact of all the instability surrounding traditional global oil fields.”

“So oil prices — and those at the pump — are easing.With the Labor Day weekend approaching, the national average price for a gallon of regular gasoline was $3.43 on Thursday, according to the AAA motor club, nearly a dime lower than a month ago. Energy and travel analysts project the lowest gasoline prices this holiday weekend of any Labor Day since 2010, and the highest level of motor travel since 2008.”

IL Fracking Rules Arrive on Friday

The Chicago Tribune reports that “highly anticipated rules to regulate hydraulic fracturing in Illinois are to be unveiled Friday.”

“Once the rules go into effect, Illinois hopes to become the center of the next oil boom. Fracking, which involves injecting fluids and chemicals at high volumes to crack open shale rock and unleash oil and natural gas, could bring bring jobs to a struggling southern Illinois economy. Ilinois also is counting on tax revenue on extracted oil and gas to fatten state and county coffers.”

“A year ago a draft version of the proposed rules proved controversial, drawing about 30,000 comments, mostly from anti-fracking groups who sought to delay the law from taking effect.”

Natural Gas Industry Fights Back Against Anti-Fracking Ad Campaign

NewsObserver.com reports that “the natural gas industry is striking back at recent TV ads by environmental groups attacking a handful of North Carolina legislators for their support of fracking. The radio spots began airing this week promoting the benefits of hydraulic fracturing and thanking seven lawmakers – six of whom face challengers in the November election.”

“Most of the lawmakers were part of what was dubbed ‘The Fracking Crew’ in ads that accused them of protecting polluters not people. The campaign – which reportedly cost more than $600,000 — was mostly paid for by a national environmental advocacy group with help from several North Carolina groups.”

“In response, the American Petroleum Institute has launched five radio spots touting fracking’s safety record and economic benefits that will help pay for education, public safety and other services. ‘Thousands of new high-paying jobs are on the way,’ the spot says.”

Report: Marcellus Region Still Strong for Natural Gas Shale

Fuel Fix reports that “the Marcellus region is now the biggest natural gas shale play in the world, and there’s still about $90 billion to be made by tapping the area’s reserves, according to a study by energy analyst group Wood Mackenzie.”

“The Marcellus, which stretches from New York to West Virginia, produced about 15.6 billion cubic feet of natural gas per day in August, about 38 percent of total U.S. natural gas production for the month, according to the U.S. Energy Information Administration. The agency doesn’t expect the boom to taper off anytime soon, and several of the biggest companies are cashing in.”

AK Keeps Oil Companies’ Tax System

The New York Times reports that “a hard-fought ballot referendum that would have overturned Alaska’s system of taxing oil industry profits, put to voters last week but until now considered too close to call, has failed by a narrow margin, with absentee ballots counted this week nailing down the outcome.”

“The referendum, Ballot Measure 1, drew millions of dollars in contributions from oil companies and raised political passions across the state. Former Gov. Sarah Palin, a Republican who has rarely commented on Alaskan political issues since resigning in 2009, even waded in with a ferocious and, to some voters, surprising attack on the oil tax policies of her successor, Gov. Sean Parnell.”

“Mr. Parnell pushed his tax overhaul through the state’s Republican-controlled Legislature last year, replacing a system called Alaska’s Clear and Equitable Share that had been Ms. Palin’s hallmark achievement — signed in 2007, before she became the Republican vice-presidential nominee. Mr. Parnell’s opponents, led by Democrats, said his plan was too generous to the oil companies in tax breaks and incentives, and they gathered enough signatures to put the question of repeal to voters.”

Who Might Join Colorado’s New Oil and Gas Task Force?

Denver Business Journal reports that “a lot of people want to be on Colorado’s latest hot seat.”

“In this case, that means Gov. John Hickenlooper’s still-to-be formed task force that will look at how to juggle oil and gas operations and the desires of local governments and communities.”

“State officials have said about 250 names have been submitted for the 20-member task force, which will be co-chaired by XTO Energy Inc. President Randy Cleveland and La Plata County Commissioner Gwen Lachelt, founder of the environmental group Earthworks’ Oil & Gas Accountability Project.”

Texas Lawmakers Looking at Oil Boom

Fuel Fix reports that “in a preview of priorities for the next legislative session, state lawmakers at a hearing on Tuesday examined the ways the oil boom is changing life in Texas.”

“Since the legislature last convened in 2013, budget officials have reported an unexpectedly large windfall from taxes on the petroleum industry, filling state coffers with a multi-billion dollar opportunity to address issues like the water shortage, transportation gridlock and troubled public schools. But industry practices have also wrecked roads, strained infrastructure, vexed police departments, drained water resources, polluted the air and set off knotty disputes among landowners, royalty claimants and oil companies.”

“Above all, the oil boom has emerged as a singular force driving the state’s great challenge of the 21st century, the post-urbanization population surge.”

Commentary: Should NATO Address Energy Security?

Nick Butler writes in the Financial Times: “In ten days time Nato’s leaders will gather in Wales for their bi-annual summit. There is certainly plenty to discuss at Celtic Manor – Ukraine, Iraq, Afghanistan and of course the continued inadequacy of defence spending which is leaving the military in many countries unable to fulfill all their stated commitments.”

“But tucked away in one bland paragraph of the draft communiqué now being circulated is a brief reference to energy security. Let’s hope there is substance behind the words.”

The piece concludes: “The fundamental principle is deterrence. That has been Nato’s watchword and greatest success. The principle should be extended – to ensure that gas supplies cannot be used as threats in any future political conflict.”

Instead of Treaty, Obama Pursues Climate Accord

The New York Times reports that “the Obama administration is working to forge a sweeping international climate change agreement to compel nations to cut their planet-warming fossil fuel emissions, but without ratification from Congress.”

“In preparation for this agreement, to be signed at a United Nations summit meeting in 2015 in Paris, the negotiators are meeting with diplomats from other countries to broker a deal to commit some of the world’s largest economies to enact laws to reduce their carbon pollution. But under the Constitution, a president may enter into a legally binding treaty only if it is approved by a two-thirds majority of the Senate.”

 

“To sidestep that requirement, President Obama’s climate negotiators are devising what they call a ‘politically binding’ deal that would ‘name and shame’ countries into cutting their emissions. The deal is likely to face strong objections from Republicans on Capitol Hill and from poor countries around the world, but negotiators say it may be the only realistic path.”

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