North America

Trump Lays Plans to Reverse Obama’s Climate Change Legacy

22 Mar 2017   Climate, USA

President Trump is poised in the coming days to announce his plans to dismantle the centerpiece of President Barack Obama ’s climate change legacy, while also gutting several smaller but significant policies aimed at curbing global warming. The moves are intended to send an unmistakable signal to the nation and the world that Mr. Trump intends to follow through on his campaign vows to rip apart every element of what the president has called Mr. Obama’s “stupid” policies to address climate change. The timing and exact form of the announcement remain unsettled, however.

Trump’s Budget: Valuing Military Over Energy

22 Mar 2017   Climate, USA

Last week President Trump unveiled his budget blueprint , which detailed savage cuts to most areas of discretionary spending while boosting defense outlays by a whopping $54 billion. Nearly all government agencies were major losers under the President’s budget, except for those dealing with defense and border security. The Department of Energy would see a 5.6 percent cut, or a reduction of $1.7 billion. But digging into those numbers, certain areas of DOE were winners while others were losers. Areas of DOE dealing with clean energy, smart grid technologies, and electric vehicles are either entirely eliminated or suffer steep cuts. Meanwhile, DOE’s nuclear weapons programs, where the bulk of the agency’s funding is allocated, would see an 11 percent increase. The blueprint also includes $120 million to restart the licensing for the Yucca Mountain nuclear waste storage facility in Nevada, which has been on ice for years. One item […]

Why Shell’s Oil Sands Sell Off Is Great News For Canadian Oil

22 Mar 2017   Canada, Tar Sands

There was a time when if a Canadian exploration and production (E&P) company bought out a foreign-controlled competitor, it was not only good for the country but financially beneficial because it qualified for government incentives. That Canada’s E&P industry was in the hands of too many foreign operators was regarded as a big problem in the National Energy Program of 1980. Patriating this key industry became a priority if not an obsession. Thirty-seven years later, this is clearly not an issue. However, industry watchers must reflect upon the multitude of responses to the announcement by Canadian Natural Resources Limited (CNRL) it was purchasing effectively all (except 10 percent of Athabasca Oil Sands Project or ASOP) of the oil sands production operations and leases held by the Shell Canada affiliates – Shell Canada Energy, Shell Canada Limited and Shell Canada Resources (Shell) for cash and shares totaling $11.1 billion. The […]

Rig count hangover bruises crude oil prices

21 Mar 2017   USA

Under broader pressure from the so-called Brexit, crude oil prices moved lower early Monday on a hangover from higher U.S. exploration and production work.  Energy companies working in shale oil basins in the United States have adapted to lower price points so that, once the market does recover, they’re more efficient at returning to work. After forecasting production declines for 2017, U.S. federal data instead show steady gains and production so far in March has been at around 9 million barrels per day.  Data last week from oilfield services company Baker Hughes showed an increase in the number of rigs deployed in the United States for the ninth week in a row. Rig counts serve as a rough estimate of exploration and production, which in itself is indicative of energy sector spending and confidence. Gains in production from the United States, and producers from the Organization of Petroleum

Slow, steady economic growth for shale-rich Colorado

21 Mar 2017   USA

The economy for shale-rich Colorado is improving, though a tight labor market and pressure outside the energy sector may be constraining, a budget report finds. The labor market for Colorado is one of the strongest in the country, with the January unemployment rate ranking the third lowest at 2.9 percent. In his State of the State address in January, Colorado Gov. John Hickenlooper said his agenda balanced clean energy with gains from shale oil and gas. Oil from Colorado accounts for about one out of every 50 barrels produced in the United States. Spending in the oil and gas sector declined and put some pressure on tax revenue growth early last year when crude oil prices dropped below […]

Plenty of Cash Lies Buried on Canada’s Oil Sands

21 Mar 2017   Canada, Tar Sands

Earlier this month, Marathon Oil agreed to spend more than $1 billion on acreage in the Permian Basin, the very hottest place on the planet to drill for oil. On the same day, it announced the sale of other properties 2,000 miles due north in Canada’s oil sands, a significantly less popular place to invest right now. Shareholders applauded, sending Marathon’s shares up 8% on the news, but the price of the company buying its unwanted…

Despite growth late in the year, U.S. crude oil production decreased in 2016

21 Mar 2017   Oil Supply, USA

Despite increasing crude oil prices throughout most of 2016, total U.S. crude oil production in 2016 was below its 2015 level . However, monthly production began growing in the fourth quarter of the year after declining over the first three quarters. Total 2016 production remained above the five-year average. With the removal of restrictions on exports of domestically produced crude oil at the end of 2015, crude oil exports increased. At the same time, the difference between Brent and West Texas Intermediate (WTI) crude oil prices narrowed, which made crude oil imports relatively more attractive and caused total imports of crude oil in 2016 to also increase. Both Brent and WTI crude oil spot prices increased in 2016. The Brent spot price increased from $31 per barrel (b) in January to $53/b in December, while the WTI spot price increased from […]

U.S. Rig Count Soars, Putting Yet More Pressure On OPEC

18 Mar 2017   USA

This week’s Baker Hughes report shows the U.S. domestic oil and gas rig count up 21 rigs this week, bringing the total to 789 active oil and gas rigs—a fantastic 313-rig increase over last year. The bulk of this week’s gains were oil rigs, which saw a 14-rig gain, while gas saw a build of 6, with one miscellaneous rig added last week. The number of active oil rigs in the United States now sits at 631—244 rigs over the number of rigs this time last year. In sharp contrast, Canada saw a 31-rig decrease to its oil rigs, while the number of gas rigs in Canada dipped by 10 this week. Both West Texas Intermediate and Brent barrels were traded slightly up (.02% and .04% respectively) on Friday preceding the release of the report, with WTI still trading below $49 per barrel at $48.76. At 12:32pm EST, Brent […]

OPEC Can’t Count on American Drivers to Help Boost Oil Prices

17 Mar 2017   USA

Rising U.S. oil production isn’t the only thing getting in the way of OPEC’s efforts to drain a global glut. American drivers aren’t helping either. The Organization of Petroleum Exporting Countries is counting on growing demand to bolster the production cuts it’s making in a bid to balance the market. But motorists in the U.S. — the world’s largest consumer of gasoline — are using less, not more. And that’s not likely to change any time soon. About 40 percent of the crude in America is processed into the motor fuel, government data show. As the price of gasoline has risen more than 30 percent since February 2016, drivers are burning less, swelling supplies to near record highs. Meanwhile, new cars offer consumers an ever-widening variety of more efficient options to cut back on fuel use. “Don’t expect the U.S. driver to save the market this year — he […]

Trump’s proposed FY 2018 budget cuts overall DOE budget 5.6%; eliminates ARPA-E, ITLGP, ATVMP

17 Mar 2017   USA

The Trump Administration has released its “America First” budget blueprint for the FY 2018 budget. The core of the blueprint is a $54-billion increase in defense spending in 2018 that is offset by targeted reductions in other areas. For the Department of Energy (DOE), the blueprint requests $28.0 billion—a $1.7-billion (5.6%) decrease from the 2017 annualized CR level. Within that, the proposed budget would provide a $1.4-billion increase above the 2017 annualized CR level for the National Nuclear Security Administration—an 11% increase. The new budget proposal focuses resources toward early-stage research and development of energy technologies and reflects increased reliance on the private sector to fund later-stage research, development, and commercialization. The budget proposal emphasizes what it calls energy technologies best positioned to enable American energy independence and domestic job-growth in the near to mid-term. It also emphasized continued progress on cleaning up sites contaminated from nuclear weapons production […]

White House seeks to cut EPA budget 31 percent as Trump targets regulation

17 Mar 2017   USA

President Donald Trump’s administration is proposing a 31 percent cut to the Environmental Protection Agency’s budget, eliminating its climate change programs and trimming back core initiatives aimed at protecting air and water quality, according to budget documents released on Thursday. The White House’s proposed 2018 budget for the agency comes as Trump seeks to clear away regulations he claims are hobbling U.S. businesses – like oil drillers and coal miners. The proposed cuts are a starting point in negotiations with Congress, and could be tempered. The proposal would eliminate 3,200 EPA employees, or 19 percent of the current workforce, and effectively erase former President Barack Obama’s initiatives to combat climate change by cutting funding for the agency’s […]

Tax Breaks Could Save U.S. Oil Industry Billions

17 Mar 2017   USA

A tax reform proposed by the Trump administration could free up to $10 billion annually for the U.S. oil industry and maybe encourage more investments in additional production. Leaving aside the chances of this reform turning into actual legislation in its current version, these savings may not be good news for the industry. The proposal sees a cut in top-tier corporate tax from the current 35 percent to between 15 and 20 percent. Since oil and gas are among the most heavily taxed industries in the U.S, Bloomberg notes, the annual savings could exceed $10 billion. There is a catch, however: to benefit from these cuts, E&Ps will have to surrender some existing tax incentives, a Bloomberg Intelligence analyst, Vincent Piazza, notes. Even if they do, it remains uncertain if the savings will be put to work building production and if they are, this may actually spell doom for […]

What Really Caused The EIA Oil Draw?

16 Mar 2017   Oil Supply, USA

Crude prices are rebounding today, bouncing off the trampoline of price support at $48 for WTI and $50 for Brent. A surprise draw to U.S. crude inventories ( not to some ) has been behind the rally (see more below), while the monthly IEA report followed in OPEC’s footsteps by showing higher Saudi production, and higher OECD petroleum inventories. All that said, hark, here are five things to consider in oil markets today: 1) Hot on the heels of yesterday’s OPEC report, the IEA has released its respective monthly report today. In similar fashion to OPEC, the Paris-based agency has highlighted how OECD inventories have increased . After six consecutive months of dropping, stockpiles have rebounded by 48 million barrels in January, to back above 3 billion (beeelion) barrels. As we pointed out yesterday , the goal of the OPEC production cut is to reduce OECD inventories back in […]

U.S. oil stockpile decline reverses nine weeks of builds: EIA

16 Mar 2017   Oil Supply, USA

U.S. crude stocks fell last week as imports plummeted, dropping after nine consecutive increases, while gasoline and distillate inventories declined more than expected, the Energy Information Administration said on Wednesday. The stockpiles have been closely watched by oil traders eager to determine whether a November agreement to cut output by the Organization of the Petroleum Exporting Countries is reducing a global supply glut. [O/R] Crude inventories fell by 237,000 barrels in the last week, compared with analysts’ expectations for an increase of 3.7 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.13 million barrels, EIA said. U.S. crude oil imports fell by 565,000 barrels per day to 6.69 million bpd last week, the lowest level in a month, mostly due to large declines from […]

Trump reopens review of US fuel efficiency standards

Donald Trump on Wednesday ordered the reopening of a review of future fuel economy and emissions standards for US cars, in a move that could slow down development of electric vehicles and new efficiency technologies. Regulations confirming standards for vehicle emissions in 2022-25, which were hurried through in the final fortnight of Barack Obama’s administration, will instead be reviewed next year. The Obama administration estimated that the rules would cost car manufacturers in the US $33bn. The new administration’s move, which had been sought by the large car manufacturers, coincided with a visit by the president to Michigan to meet industry executives and workers. Addressing autoworkers bussed to a disused factory outside Detroit which the President said had been used during the second world war to build B-24 bombers, Mr Trump promised to “make Detroit the car capital of the world again” adding: “we are going to restore the originally scheduled midterm review and ensure that any regulations we have protect your jobs.” Jessica Caldwell, analyst at Edmunds, said the emissions targets had forced manufacturers to shift research and development budgets from the trucks and SUVs consumers most wanted towards electric vehicles and hybrids, whose sales are shrinking. “Trump is likely scoring points with the auto executives by promising to rethink these regulations, but he’s making it clear he expects the automakers to return the favor by ramping up investments here in the US,” she said.

Could Rosneft Take Control Of Citgo?

16 Mar 2017   Russia, USA, Venezuela

Rosneft could take control of 49.9 percent of Citgo – the troubled U.S. business of Venezuela’s state-owned oil company, media are warning. PDVSA used the stake as collateral for a $1.5-billion loan provided by Rosneft last year, and the Russian company immediately filed a lien with the Delaware Department of State asserting its right to ownership in case PDVSA defaults on debt payments. Now, the possibility of a default has become more pronounced, spurring speculation about what might happen should this possibility turn into a certainty. The loan deal itself sparked protests in the U.S. energy industry, with ConocoPhillips and a Canadian miner, Crystallex, asking the federal court in Delaware to cancel the lien, even though the use of stock as collateral in loan agreements is standard practice. This time, however, there are geopolitical implications weighing in, and it’s these implications that will, in all likelihood, make the idea […]

EPA re-opens Mid-Term Evaluation Process for light-duty vehicle greenhouse gas standards 2022-2025

Administrator Scott Pruitt and Department of Transportation Secretary Elaine Chao announced that EPA intends to reconsider its final determination issued on 12 January 2017 which recommended no change to the greenhouse gas standards for light duty vehicles for model years 2022- 2025. ( Earlier post .) EPA will reconsider that determination in coordination with NHTSA as part of a renewed Mid-Term Evaluation process. This process was established as a part of the 2012 final greenhouse gas emissions standards for model years 2017-2025, requiring EPA to determine no later than 1 April 2018 whether the greenhouse gas standards for model years 2022-2025 established are appropriate. In coordination with EPA, the DOT’s National Highway Traffic Safety Administration (NHTSA) is evaluating its fuel economy standards for that period. In accord with this schedule, […]

The U.S. Border Tax Would Hit Texas Hard

15 Mar 2017   USA

The proposed border adjustment tax has been dividing U.S. lawmakers. It is also dividing companies into those who support it and those who do not, as the simplified theory of the proposal – tax imports and exempt export revenue from taxable income – is expected to create clear-cut winners and losers among U.S. businesses. It is also dividing the U.S. states into two groups: states that are expected to benefit, and states who stand to lose from the tax plan. The state of Texas and its economy are expected to be on the losers’ end should the border tax pass as-is, even though the probability of the plan passing all legislative vetting is not considered to be very high. Because of its physical location, adjacent to Mexico, along with its vast energy industry, Texas’ economy is a global one. Texas is the home of energy giants ExxonMobil, Valero Energy, […]

Will Trump Send Oil Prices Crashing?

14 Mar 2017   Prices, USA

Oil markets are looking particularly bearish this week, with WTI once again below $50, the OPEC cuts in jeopardy over Iran and Iraq ramping up production, the second U.S. shale revolution underway, and an overwhelming U.S. supply glut which shows no signs of easing. In this environment, signs that President Donald Trump’s energy policies could further disrupt markets are worrying for the industry. With his pro-drilling nominations for the Departments of State, Energy, Interior, and EPA, the American renaissance of oil and natural gas production is set to skyrocket, which will cause prices of WTI and Brent to move lower in the foreseeable future. Some of the geopolitical conflicts that could offset this downward pressure are: 1) Rising tensions in East Asia involving the U.S., China, South Korea, and Japan, 2) Iran’s aggressive stances towards the west, 3) Russia’s movements against NATO in Ukraine, and 4) the possible collapse […]

Trump Tax Cut May Save Oil Drillers $10 Billion, Boost Drilling

14 Mar 2017   USA

The Trump administration’s plan to slash corporate tax rates could free up more than $10 billion a year for U.S. oil explorers, opening new opportunities to boost drilling at a time of uncertainty in the marketplace. Crude prices in New York have fallen 10 percent since the end of 2016 as added drilling in America’s shale fields offset an OPEC-led drive to raise prices by cutting production. The U.S. push has spurred concern that another price rout could be just around the corner, following a two-year decline that saw prices fall as low as $26.05 a barrel in February 2016. Republicans led by President Donald Trump have said they want to cut the top corporate rate to 15 or 20 percent, from 35 percent now. That could mean more than $10 billion in savings for oil producers that are one of the country’s most-heavily taxed industries, according to Bloomberg […]

U.S. Shale Faces A Workforce Shortage

14 Mar 2017   Shale Oil, USA

A problem for the U.S. shale oil and gas industry that analysts and observers have warned about for a long time has materialized: there is a shortage of workers. According to one service provider for E&Ps, trucker jobs remain vacant even with an annual paycheck of $80,000 , which is certainly a big change from a couple of years ago when layoffs were sweeping through the shale patch. This shortage could dampen the prospects of not just shale producers, who are eager to ramp up production as quickly as possible and take advantage of higher international oil prices, but it will also seriously hamper the recovery of the oilfield services segment, which has been hit harder than E&Ps by the price crash. We wrote earlier this year how oilfield service providers are starting to get back at producers with higher fees for their services, to make up for the […]

Saudi deputy crown prince to meet Trump, investment in focus

13 Mar 2017   Saudi Arabia, USA

Saudi Deputy Crown Prince Mohammed bin Salman attends a graduation ceremony and air show marking the 50th anniversary of the founding of King Faisal Air College in Riyadh, Saudi Arabia, January 25, 2017. Deputy Crown Prince Mohammed bin Salman, in charge of Saudi Arabia’s reforms, left on Monday for Washington to meet President Donald Trump on a visit expected to promote the world’s top oil exporter as an investment destination. It will be the first meeting since Trump took office in January between the U.S. President and the powerful prince leading the kingdom’s efforts to revive state finances by diversifying away from falling crude oil revenues. Under the plan, which seeks to promote the private sector and make state-owned companies more efficient, Riyadh plans to sell up to 5 percent of state oil giant Saudi Aramco in what is expected to be the world’s biggest initial public offering. Facing […]

Energy sector weighs rewards and risks of Trump presidency

13 Mar 2017   USA

ExxonMobil, the largest US oil group, proclaimed this week that it was creating more than 45,000 construction and production jobs by investing $20bn in petrochemical, refining and liquefied natural gas projects along the Gulf of Mexico coast. None of the projects was newly announced — the investment programme started in 2013, to take advantage of the low-cost oil and gas released by the US shale boom — and some are not certain to go ahead. But that did not stop the positive news coverage, and President Donald Trump tweeted about the statement no fewer than five times.  “ExxonMobil: special company, special people,” the president said in a video clip.  Darren Woods, Exxon’s chief executive, who announced the numbers at the CERAWeek energy conference in Houston, provided a carefully worded statement for the White House press release, observing that “investments of this scale require a pro-growth approach and a stable regulatory environment and we appreciate the president’s commitment to both”.  The mutually advantageous publicity for Exxon and Mr Trump was a sign of how US energy companies are building relationships with an administration that offers great opportunities in terms of deregulation and support for new infrastructure, but also risks in tax reform and disruption to trade.

Canada Oil Dependence on U.S. Loosens in Age of Donald Trump

11 Mar 2017   Canada

The Canadian oil patch’s half-century bond to the U.S. market is loosening one tanker load at a time in Donald Trump’s “America First” era. Last month, a ship loaded oil off Newfoundland and set sail on a 10,000-plus nautical mile, or 18,500 kilometer, journey to China, following on the heels of an oil-sands cargo shipped from the U.S. Gulf Coast. India-based Reliance Industries Ltd . is set to receive the first shipment of heavy Canadian crude in April, a person familiar with the orders said last month. For a country that sent about 99 percent of its crude exports to the U.S. last year, the recent flow to Asia is a welcome sign of diversification to many Canadian producers and political leaders. While the shipments represent baby steps in efforts to wean Canada off the almost exclusive dependence on the juggernaut to the south, they are part of a […]

DOE economist talks SPR exports, storage and sales

11 Mar 2017   USA

The presenter who arguably received the best questions at Wednesday’s Crude Oil Quality Association meeting in New Orleans was the US Department of Energy’s economist, Kenneth Vincent. His presentation was part overview, such as the locations of the four salt caverns that hold the more than 700 million barrels of US oil – Texas and Louisiana, and the maximum drawdown capacity – 4.4 million b/d. But there were also some nuggets not found on factsheets such as the how the physical salt caverns are shrinking due to geological pressures and how “distribution issues are a major concern (for the DOE) currently and going forward.” Following the presentation, the overflowing room of oil industry participants had plenty of questions for Vincent. And if they didn’t know the answers, and I didn’t know the answers, I reckon you might be interested too: Q: Are there any restrictions on who you can […]

Majors exiting Canada’s oil sands acting in own interest: Trudeau

11 Mar 2017   Canada

Canadian Prime Minister Justin Trudeau on Friday dismissed a recent string of major oil companies selling their holdings in the heavy oil sands of Western Canada and moving investments to shale fields. Royal Dutch Shell ( RDSa.L ) and Marathon Oil ( MRO.N ) this week disclosed sales of operations that largely removed both firms from the carbon-heavy oil reserves. Shell is selling its interests to Canadian Natural Resources( CNQ.TO ). Last month, Exxon Mobil ( XOM.N ) wrote down all of its oil reserves from its Kearl project in northern Alberta, saying extracting the oil was no longer economic at current prices. “Businesses will make the decisions they make,” Trudeau said. In a wide-ranging media briefing, Trudeau said oil and gas executives are looking for greater clarity […]

Trudeau Walks a Thin Tightrope Between Fossil Fuels, Renewables

10 Mar 2017   Canada

Under Prime Minister Justin Trudeau, Canada’s government is playing both sides of the fence in its national energy strategy. During Trudeau’s first 16 months, three energy projects — a pipeline and two export terminals — were approved by the government with the aim of helping drillers ship their products abroad from the resource-rich West Coast, a boost to the country’s economy. At the same time, he has consistently expressed his support for development of renewable energies, becoming a forceful voice in the campaign against climate change at a time when U.S. support is waning. “When we go camping, we light our fires before the sun goes down. And that doesn’t mean we’re anti-daylight,” Trudeau said Thursday at CERAWeek by IHS Markit , the Houston energy meeting that annually draws executives from around the world. “It’s exactly the same with energy. Innovating and pursuing renewables isn’t somehow in competition with […]

EPA Administrator Pruitt says rules must give market certainty

10 Mar 2017   Climate, USA

US Environmental Protection Agency Administrator Scott Pruitt extended a hand of friendship to the energy industry Thursday, expressing his desire to reshape the office he heads into one that cooperates with stakeholders instead of one that creates economic uncertainty through its rulemaking. During a speech to global oil, gas and power leaders at the CERAWeek by IHS Markit conference in Houston, the former Oklahoma attorney general, who began his new job last month after a bruising confirmation process, said he wants to be a partner, not a foe, of the sectors EPA regulates. “I want the states to see the EPA as a friend, as a partner, and not an adversary,” Pruitt said. “Regulators ought not to use their authority to pick winners and losers.” Pruitt rushed out of the conference after his remarks without taking questions from reporters. Related CERAWeek story: FERC’s independent approach won’t change after Trump […]

U.S. crude oil and natural gas production both fell in 2016

10 Mar 2017   USA

Based on data in EIA’s Monthly Crude Oil, Lease Condensate, and Natural Gas Production Report , average crude oil production in the Lower 48 states fell to 8.39 million barrels per day (b/d) in 2016, a decrease of approximately 0.55 million b/d, or 6.1% from the 2015 average. Natural gas gross withdrawals in the Lower 48 states also decreased in 2016, averaging 80.39 billion cubic feet per day (Bcf/d), or 1.03 Bcf/d (1.3%) lower than in 2015. EIA now has two complete years of monthly survey-based data on crude oil and natural gas production since expanding the EIA-914 survey in 2015. Source: U.S. Energy Information Administration After declining throughout 2015, crude oil and natural gas prices began to recover in 2016, increasing through much of the year, which drove production increases in the second half of 2016. The price for West Texas Intermediate (WTI) crude oil, after reaching a […]

Canadian Oil Gets More Canadian as Internationals Pull Back

10 Mar 2017   Canada

The Syncrude Canada Ltd. oil sands upgrading plant near Fort McMurray, Alberta, Canada, on June 4, 2015. The future of the Canadian oil sands is looking a lot more Canadian. Calgary-based Canadian Natural Resources Ltd. said Thursday it will spend C$12.7 billion ($9.4 billion), its biggest purchase ever, to buy Alberta oil fields and facilities that process the sticky bitumen from oil sands from Royal Dutch Shell Plc and Marathon Oil Corp. “At the time you see some of the majors pivoting to other assets, you see Canadian companies that are doubling down on the oil sands,” Kevin Birn, a director at IHS Energy in Calgary, said by phone Thursday. The deals come as West Texas Intermediate, the benchmark U.S. crude, falls below $50 a barrel. It’s also less than a month after two major U.S. producers had to remove billions of barrels of Canadian oil from their stated […]

U.S. oil production forecasts revised higher:

10 Mar 2017   Oil Supply, USA

U.S. oil production forecasts for 2017 and 2018 have been boosted significantly as a result of rising prices as well as improved modeling techniques for predicting output down to the well level. Crude production is expected to reach 9.53 million barrels per day (bpd) in December 2017, according to the latest forecasts from the U.S. Energy Information Administration (EIA). Forecast output for December 2017 has been revised up from 8.29 million bpd when the agency prepared its predictions in March last year ( tmsnrt.rs/2moZoqc ). The forecasts are contained in the “Short-Term Energy Outlook” EIA publishes every month. Forecast output has been revised higher every month since September 2016. Revisions are concentrated in output from the Lower 48 states, excluding federal waters in the Gulf of Mexico, so they are mostly about shale output, rather than […]

Shell Becomes Gas Company With $7.25 Billion Oil-Sands Sale

Shell remaking itself for low-carbon world, but some want more Royal Dutch Shell Plc just took a big step toward remaking itself as a natural gas company. With Thursday’s deal to sell $7.25 billion of Canadian oil-sands assets, Shell will boost the share of cleaner-burning gas in its proven reserves from about half to 60 percent, Shell data show. It will also rid itself of some of the most polluting assets on its books. Chief Executive Officer Ben Van Beurden is reshaping Europe’s biggest oil company not just to survive lower crude prices but also to endure the transition to a low-carbon world. His record acquisition of BG Group Plc has given him gas deposits from Kazakhstan to Australia. On Thursday he sharpened Shell’s commitment to reducing pollution, changing executive pay policy to reward efforts to control it. The oil-sands divestment is a big step in “transforming the company […]

U.S. crude stockpiles soar, gasoline inventory plunges: EIA

9 Mar 2017   Oil Supply, USA

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. U.S. crude oil inventories surged last week to another record high, while gasoline stocks went the other direction, posting their largest one-week drop in nearly six years, the Energy Information Administration said on Wednesday. Crude inventories rose 8.2 million barrels in the week to March 3, compared with analysts’ expectations for a 2 million-barrel build. Most of that – 4.6 million barrels – came from an unexpectedly large surge in stocks on the west coast. The ninth weekly crude build boosted total stockpiles, excluding the nation’s strategic petroleum reserves, to a fresh record of 528.4 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures also rose 867,000 barrels, the EIA said. On the other side of the refining equation, gasoline posted its biggest weekly inventory […]

Dollar Rises to Weekly High After ADP Data Shows Surge in Hiring

9 Mar 2017   USA

The dollar rose to a high for the week after a private employment survey signaled upside risks to forecasts for Friday’s U.S. jobs report. The greenback rose versus all of its G-10 peers and the Bloomberg dollar index touched its highest since Federal Reserve Chair Janet Yellen said on March 3 that a rate hike seemed likely this month. The dollar gain was underpinned by a rise in the 10-year Treasury yield to its highest since December, while commodity-related currencies were hurt by a drop in crude oil and metals. The ADP Research Institute reported that private payrolls grew 298,000 in February, well above forecasts, prompting Goldman Sachs and Morgan Stanley to raise their estimates for the jobs report. Commerce Secretary Wilbur Ross said that the administration is working on getting trade promotion authority and likely will begin renegotiating Nafta later this year; Canada and Mexico will need to […]

Oklahoma oil, gas tax collections lower year-over-year

9 Mar 2017   USA

Tax collections from oil and gas production last year were more than 10 percent off the previous year, though the Oklahoma state treasury expressed optimism. S&P Global Ratings lowered its credit rating for Oklahoma by one notch to AA- last week, but kept its outlook stable. The ratings agency said the state economy is diversifying away from oil and gas, but some metrics show a state of contraction against growth in the national economy. The state government reported taxes on oil and gas production in February were up 32.4 percent year-over-year and 14.7 percent higher than from January. For full-year 2016, tax collections brought in $367.3 million, down 12.4 percent from the previous 12-month period. […]

Texas energy sector recovery in its infancy

9 Mar 2017   USA

Energy sector components are aligning to spawn recovery in Texas, the No. 1 oil producer, but it’s still early in the expansion, an industry economist said. As the top oil state in the country, the energy sector in Texas generated about $9.4 billion in taxes and revenue last year, according to the Texas Oil & Gas Association. Even during last year’s market downturn, the trade group said that worked out to be about $26 million per day in state and local revenue. Crude oil prices have been steady around $55 per barrel for most of the year in response to a decision from the Organization of Petroleum Exporting Countries to put a lid on output in an effort to […]

US crude exports hit record levels in January, February

9 Mar 2017   exports, USA

US crude exports hit record highs in January and February, as domestic crude price discounts to Brent and Dubai widened significantly, an S&P Global Platts analysis of government data showed Tuesday. US Census Bureau data showed US crude exports rising by 304,000 b/d to 746,000 b/d in January, which was followed by a report by the US Energy Information Administration showing US crude exports averaging 900,000 b/d in the four weeks ending February 24. Congress’ December 2015 decision to lift restrictions inaugurated a new era in US oil trade, with exports averaging an annual record of 521,000 b/d in 2016. Additionally, rising production from the Permian Basin in West Texas, in combination with a significant buildout in infrastructure to access export markets, has deepened price discounts for US light sweet crudes, allowing US crude exports to take off. “It’s pure economics,” said Tony Starkey, manager of energy analysis at […]

Shell agrees $7.25 billion Canadian oil sands sale

9 Mar 2017   Canada, Tar Sands

Royal Dutch Shell has agreed to sell most of its Canadian oil sands assets for $7.25 billion to Canadian Natural, the company said on Thursday. The deal also includes a joint acquisition by Shell and Canadian Natural of Marathon Oil Canada Corporation, a subsidiary of Marathon Oil, for $1.25 billion each to be paid in cash, Shell said. Shell will sell its existing and undeveloped Canadian oil sands interests and reduce its share in the Athabasca Oil Sands Project (AOSP) to 10 percent, but it will remain as operator of the AOSP Scotford upgrader and the Quest carbon capture and storage project. (Reporting by Karolin Schaps; editing by Jason Neely)

Shell Cuts Debt With $7.25 Billion Sale of Canada Oil Sands

9 Mar 2017   Canada, Tar Sands

Royal Dutch Shell Plc will sell almost all of its production assets in Canada’s oil sands in a $7.25 billion deal that cuts debt and reduces involvement in one of the most environmentally damaging forms of fossil-fuel extraction. All of the company’s oil-sands interests apart from a 10 percent stake in the Athabasca mining project will be sold to Canadian Natural Resources Ltd., Shell said Thursday. The Hague-based company will continue as operator of the Scotford upgrader, which converts heavy oil to lighter liquids for easier transport, and the Quest carbon capture and storage project. The Anglo-Dutch producer is almost two-thirds of the way through a $30 billion divestment program to reduce debt, which soared following its biggest-ever acquisition of BG Group Plc last year. The company this week ended an almost two-decade old U.S. refining partnership with with Saudi Arabian Oil Co. and earlier this year sold a […]

As Trump Makes Threats, Iran Makes Friends

8 Mar 2017   Iran, USA

The Islamic Republic is expanding its reach and raising questions over U.S. ambitions to contain the country. Nigerian carpenter Bashir Muhammad has never been to Iran, but he would fight to the death for the country. “If Iran wants our help, we are ready to go and help it, even with our blood,” he said. “Donald Trump needs to know that Iran has followers all over the world ready to help defend it against America.” Touring the narrow unpaved streets of Zaria in Nigeria’s predominantly Muslim north, Muhammad shows Iran’s success in building enclaves of fervent support way beyond the Middle East and the limits of any harsher foreign policy planned by the U.S. president to contain […]

Gas prices steady, but wild swings reported regionally

8 Mar 2017   Prices, USA

Steady crude oil prices kept U.S. retail gasoline prices in check, though some regions posted major swings on the back of refinery issues, AAA reported. AAA listed a national average retail price for a gallon of regular unleaded gasoline at $2.31 for Tuesday, down a fraction of a penny from the previous day, but up about 2 cents from the previous week. Gasoline prices one month ago were 4 cents, or about 1.7 percent higher, highlighting some of the market’s stability. “Retail prices continue to fluctuate but have remained between $2.28-2.32 for more than a month as reports of increased U.S. production continues to counter OPEC rebalancing efforts,” the motor club said in a weekly […]

Exxon’s $20 Billion Spending Plan Points to U.S. Energy Surge

Exxon Mobil Corp. plans to spend about $20 billion on refineries, petrochemical plants and other projects in and around the Gulf of Mexico, Chief Executive Darren Woods said Monday, underscoring how the giants of the global energy industry are turning to America. Mr. Woods outlined the 11-project spending plan, largely aimed at creating new outlets for U.S. natural gas, in a speech at the annual CERAWeek conference. It came…

White House tries to join CERAWeek party

8 Mar 2017   USA

Share Shortly after ExxonMobil Chairman and CEO Darren Woods took the stage at CERAWeek by IHS Markit in Houston, the White House sent out a statement congratulating Woods and his company on a $20 billion plan to expand refining and chemical-manufacturing along the Gulf Coast. “This is exactly the kind of investment, economic development and job creation that will help put Americans back to work,” President Donald Trump said in a statement. The plan, which will include 10 years of investments at 11 chemical, refining, lubricant and liquefied natural gas projects at proposed and existing facilities, typifies the type of fossil fuel industry endeavor analysts expected to see a boost following Trump’s ascension to the presidency. While Trump appeared to take at least partial credit for ExxonMobil’s $20 billion plan, calling it a result of “our policies,” the bulk of the investments had been made while President Barack Obama […]

Shell accelerates plan to boost U.S. shale output: exec

8 Mar 2017   Shale Oil, USA

Royal Dutch Shell is ramping its North American shale output earlier than planned to lock in quick returns from what has become one of its most profitable businesses, the head of Shell’s unconventional energy business said. The Anglo-Dutch company plans to make shale oil and gas in the United States, Canada and Argentina a key engine of growth in the next decade, targeting output of around 500,000 barrels of oil equivalent per day (boepd), Greg Guidry told Reuters in an interview. A drive to cut the cost of producing oil and gas from U.S. shale deposits has proven so effective that Shell has accelerated development plans, Guidry said on the sidelines of the CERAWeek industry conference in Houston. It aims to boost […]

Oil And Gas IPOs Return Amid Oil Price Recovery

7 Mar 2017   Shale Oil, USA

The oil price crash has left energy companies scrambling to shore up balance sheets and streamline costs. But the recent recovery of crude prices has instilled cautious confidence among oil and gas firms that they might be able to raise capital for expansion via initial public offerings (IPOs). After two years of near zero activity in the energy IPO market, new research by Simmons & Co has shown that there are plans for more than 20 oil and gas share listings, The Street reports. With the price of oil holding above US$50 for more than three months now, it looks like institutional investors and private equity firms believe the time has come to return to financing growth in the oil and gas sector, which has had a rough two years in the downturn. It took the industry two years and two months to see the first exploration and production […]

Electricity Consumption Continues To Fall

7 Mar 2017   USA

Electricity sales in 2016 fell, the sixth year in the past ten in which America’s electricity users managed to do with less. Industrial firms made the sharpest cuts in their electricity usage. Their consumption fell in seven of the past ten years. The 1.3 percent drop in total consumption in 2016 looks small but it comes despite economic growth and lower real price of electricity. Okay, economic growth has not been robust and the real decline in price small, but electric sales always used to go up when the price of electricity declined and the economy grew. In economic parlance, electricity had a negative price and positive income elasticity. In the old days a 1.6 percent improvement in real gross domestic product (GDP) and a 2.5 percent real price decrease together should have spurred consumers to use at least 1-2 percent more electricity. But, with similar conditions in both […]

Coal exports from Hampton Roads, Virginia, continue to climb in February

7 Mar 2017   Coal, USA

Coal exports from terminals in Virginia’s Hampton Roads region totaled 2.8 million st in February, up 8.2% from the prior month and up 50.7% from the year-ago month, according to export data released Monday by the Virginia Maritime Association. It was the highest monthly total since March 2015, and the fifth straight month of higher exports, as higher seaborne prices increased demand for US thermal and metallurgical coals . At the three individual terminals in Hampton Roads, Lambert’s Point, also known as Pier 6, exported 1.16 million st in February, up 0.5% from January and up 23.5% from last year. It was the also highest monthly total for the Norfolk, Virginia, terminal — which is owned and operated by Norfolk Southern — since March 2015. Article continues below… Platts Coal Trader provides the latest prices for key benchmark coals, as well as: Daily pricing for tons and allowances for […]

The Most Dangerous Bill You’ve Never Heard Of Just Passed The House

7 Mar 2017   Congress

Last, week, under the cover of a media bliss-out except among Koch funded right-wing channels, the House of Representatives passed a bill which would effectively repeal future standard setting under every important environmental, public health, consumer protection, labor standards, occupational safety and civil rights law on the books. The bill, called the REINS Act, requires that any future major regulation adopted by an Executive Agency — say a new toxic chemical standard required by the recently enacted Chemical Safety Act, or a new consumer protection rule about some innovative but untested kind of food additive — must be approved by a specific resolution in each House of Congress within 70 days to take effect. To give a sense of the scale of this road-block, in 2015 there were 43 such major federal regulations passed to protect the public; among them were food safety regulations, the Clean Power Plan regulating […]

Trump To Undo Fuel Efficiency Standards

7 Mar 2017   Climate, USA

The Trump administration is set to undo one of former President Obama’s signature achievements. On Tuesday, the EPA and the Transportation Department are expected to jointly announce the rollback of fuel efficiency requirements for the nation’s auto fleet, a move that will not require the approval of Congress. In the wake of the financial crisis and the crumbling of top U.S. automakers, the federal government bailed out General Motors and Chrysler, while other companies were severely damaged and barely survived the downturn. With their backs against the wall, the Obama administration was able to push through historic fuel efficiency requirements, known as corporate average fuel economy (CAFE) standards, the most stringent in decades. For cars made between 2012 and 2016, car companies had to achieve an average fuel economy of 35.5 miles per gallon, up from 25 mpg previously. For model years 2017-2025, fuel efficiency had to jump to […]

Did This Geologist Just Pinpoint This Decade’s Biggest Natural Gas Discovery?

7 Mar 2017   Canada

Nearly a decade ago, I got interested in finding oil and gas fields from space. That odd-sounding strategy came to me while I was living in Canada’s petro-center, Calgary. And met a group of explorationists working with PhD experts in satellite imaging. Skitterphoto / Pixabay I was fascinated when this team explained how they could filter remote sensing data from proprietary satellites to spot minute amounts of hydrocarbons leaking from the Earth’s surface. Using this cheap and easy data to determine where big oil and pools were located at depth — and where we should be drilling exploration wells. As it turned out, that group had mixed success. Obtaining satellite data wasn’t always easy — and filtering it to ensure we were looking at real anomalies was a sensitive business. Since then, I’ve been a little skeptical when people proposed satellite imaging exploration strategies. Although there was enough to […]