North America

Border-Adjustment Tax Divides Energy Sector

24 Feb 2017   USA

The linchpin of a corporate tax overhaul proposed by House Republicans would mark a massive change for the U.S. oil and gas industry and has companies frantically studying whether to get behind it, fight it or stay on the sidelines. The proposal, a border adjustment tax, would remove companies’ ability to deduct import costs, including on raw materials, as regular business expenses. In turn, exports and other foreign sales wouldn’t…

Canada’s Fading Oil Promise Leaves U.S. Majors Struggling

24 Feb 2017   Canada

Oil-sands investments in Western Canada that gobbled tens of billions of dollars over the past decade are proving an Achilles heel for some of the world’s biggest energy producers. Exxon Mobil Corp. slashed proved reserves the most in its modern history after removing the entire $16 billion, 3.5-billion-barrel Kearl oil-sands project from its books on Wednesday. That followed ConocoPhillips ’ announcement a day earlier that erased 1.15 billion oil-sands barrels, plunging its reserves to a 15-year low. While prolific shale plays in Texas and Oklahoma are going through an investment boom with oil above $50 a barrel, the oil sands have fallen out of favor. Current investments in the region amount mostly to long-planned expansions by large Canadian producers like Suncor Energy Inc. , while majors like Statoil ASA have sold assets. Suncor, which took over Canadian Oil Sands Ltd. less than a year ago, is down more than […]

EIA Reports Minor Build In Crude Inventories, Draw In Gasoline Stocks

24 Feb 2017   Oil Supply, USA

After three straight weeks of builds in commercial oil inventories, today, the EIA had some more bad news for traders. The authority reported a build of 600,000 barrels, a day after the American Petroleum Institute estimated commercial inventories were down by 884,000 barrels in the week to February 17. Analysts expected an increase of 3.3 million barrels for the period. Last week, EIA’s report put crude stockpiles at a record high of 518.1 million barrels . This week’s figures were for a total inventory size of 518.7 million barrels, still above seasonal limits. Refineries operated at 84.3 percent of capacity in the seven days to February 17, processing 15.3 million barrels of crude daily, slightly down from the 15.5 million bpd in the previous week. Gasoline output averaged 9.4 million barrels, an increase on the previous week’s 9 million bpd. Gasoline inventories went down by 2.6 million barrels in […]

Is The Trump Administration About To Rescue The Russian Economy?

24 Feb 2017   Russia, USA

As oil prices continue their slow uphill climb and the global energy community reenters exploration mode, the Russian economy has much to gain from new American leadership that seems lenient on oil sector sanctions. On Tuesday, Representative Charlie Dent from Pennsylvania became the fourth Republican lawmaker to back a bill limiting newly inaugurated President Donald Trump’s ability to pull back sanctions against Russia. The legislation would require Trump to seek congressional approval before reducing or removing the punitive measures that are currently in place to punish Moscow for its support of Syrian President Bashar Al Assad’s murderous regime, the forced annexation of Crimea and now also for organized cyberattacks against American institutions in the months leading up to the 2016 presidential elections. “ In order to modify these imposed sanctions, the President would need to certify to Congress that the government of Russia has stopped the activities that warranted […]

U.S. gas prices holding steady

22 Feb 2017   Prices, USA

Weak consumer demand is offsetting volatility in oil prices and leaving retail gasoline markets relatively unchanged in the United States, analysis finds. Consumer price-watcher reports a national average retail price for a gallon of regular unleaded gasoline at $2.28, relatively unchanged from one week ago. Their analysis from last week , however, found this may be the seasonal bottom for retail gasoline prices. “Even as oil prices continue their seemingly confused sideways price pattern, weaker domestic gasoline demand and refiners moving to liquidate winter gasoline inventories in advance of their gradual switchover to summer blends sets the stage for higher prices in the weeks ahead,” petroleum analyst Dan McTeague said in a statement . Refiners during winter months use a blend of gasoline that’s cheaper to […]

‘’U.S. Oil Production To Soar By 3.5 Million Bpd Over The Next Five Years’’

22 Feb 2017   Oil Supply, USA

Two years ago, when Saudi Arabia launched an unprecedented campaign to crush high-cost oil producers, in the process effectively putting an end to the OPEC cartel (at least until last year’s attempt to cut production), it made a bold bet that U.S. shale producers would be swept under when the price of oil tumbled, leading to a tsunami of bankruptcies, as well as investment and production halts. To an extent it succeeded, but where it may have made a glaring error is the core assumption about shale breakeven costs, which as we reported throughout 2016 , were substantially lower than consensus estimated. In his latest note, BofA’s Francisco Blanch explains not only why a drop in shale breakeven costs is what is currently the biggest wildcard in the global race to reach production ” equilibrium “, but also why U.S. shale oil production could surge in the coming years, […]

Pruitt says he will lead US EPA with civility, attention to rule of law

22 Feb 2017   USA

Newly confirmed Environmental Protection Agency Administrator Scott Pruitt reiterated Tuesday his support of the agency’s mission and belief that being pro-energy and pro-environment was not an either-or proposition. Speaking to EPA employees Tuesday, Pruitt commended career staff’s contributions to the agency and the country and said “this is a beginning for us to spend time and discuss certain principles by which I think this agency should conduct itself, and I look forward to leading this agency with [those] principles in mind.” Related: Find more content about Trump’s administration in our news and analysis feature. While rumors have circulated that executive-level action could come as early as this week to roll back President Barack Obama’s climate agenda and reverse certain environmental regulations seen as burdening the power and gas sector, Pruitt’s remarks were light on concrete details for his vision of the agency. He told EPA staff that an “attitude […]

U.S. crude oil production increases following higher drilling activity

22 Feb 2017   Oil Supply, USA

U.S. crude oil production increased for the second consecutive month in November 2016, the first time this has occurred since early 2015. Increased drilling activity in the Permian region, which spans Texas and New Mexico, as well as the start of a number of new projects in the Federal Offshore Gulf of Mexico (GOM), more than offset declining production from other regions in October and November 2016. Increased drilling in the Permian region responded relatively quickly to a rise in the West Texas Intermediate (WTI) crude oil price, which increased from an average of near $30 per barrel (b) in the first quarter of 2016 to $45/b or higher beginning in the second quarter of 2016. In the GOM, the new projects that came online in the last quarter of 2016 were planned and approved during the 2012–14 period. U.S. crude […]

Mexico turns to the Jurassic era for shale oil

21 Feb 2017   Mexico, Shale Oil

Mexico’s plans to develop its shale oil resources have finally taken a step forward following years of largely fruitless efforts by the state owned company Pemex. Canada’s Renaissance Oil and Russia’s Lukoil are joining forces to develop the Amatitlan block of the Chicontepec region. They aren’t interested in the shallower tight oil, but in the stack’s deeper Pimienta shale formation, which is what they consider Mexico’s Eagle Ford. Renaissance and Lukoil agreed to a $60 million accelerated development plan for the Amatitlan block for 2017, which will include workovers of existing wells, and the drilling of new wells. The Pimienta formation, located in the Upper Jurassic layer of the Chicontepec, is an important play for the future production of Mexico, as output has been trending lower. Renaissance estimates original oil in place in the Amatitlan block at 4.2 billion barrels of oil equivalent, and estimated the Pimienta section at […]

After OPEC cuts heavy oil, China teapot refiners pull U.S. supply to Asia

21 Feb 2017   China, USA

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. Chinese independent, or teapot, refiners are bringing in rare cargoes of North American heavy crude in a new long-distance flow that traders say has only been made possible by OPEC’s output cuts and ample supplies in Canada and the United States. In April, at least 1 million barrels of the heavy crude Mars, pumped from the U.S. Gulf of Mexico, are expected to land in China’s Shandong province and 1 million barrels of a second unidentified heavy grade will arrive in China, trade and shipping sources said last week. This follows the arrival in January of 600,000 barrels of U.S. Gulf Blend, a heavy crude made up of a blend of various U.S. and Canadian grades loaded onto ships on the U.S. Gulf Coast, according to the sources and shipping […]

GOP’s Tax Reform Plan Brings Uncertainty to Oil, Gas

21 Feb 2017   USA

US corporate tax reform plan for a tariff on imports, but not exports, could boost income for domestic producers, but it might also pump up gasoline prices and raise refiners’ costs. House Republicans have a plan – and President Donald Trump has made a promise – to reform corporate tax in the United States. Economists say it could be a game-changer for oil and gas. Touted as tax reform worthy of the late President Ronald Reagan, the package of talking points, “A Better Way: Our Vision For A Confident America,” is making its way through the halls of Congress now that the new administration is installed. Among the key elements of the proposal is a controversial border adjustment tax (BAT), which would cut the tariff on exports and levy a 20 percent fee on imports, and chop corporate taxes from 35 percent to 20 percent. The U.S. corporate tax […]

Texas Oil Fields Rebound From Price Lull, but Jobs Are Left Behind

20 Feb 2017   Shale Oil, USA

In the land where oil jobs were once a guaranteed road to security for blue-collar workers, Eustasio Velazquez’s career has been upended by technology. For 10 years, he laid cables for service companies doing seismic testing in the search for the next big gusher. Then, powerful computer hardware and software replaced cables with wireless data collection, and he lost his job. He found new work connecting pipes on rigs, but lost that job, too, when plunging oil prices in 2015 forced the driller he worked for to replace rig hands with cheaper, more reliable automated tools. “I don’t see a future,” Mr. Velazquez, 44, said on a recent afternoon as he stooped over his shopping cart at a local grocery store. “Pretty soon every rig will have one worker and a robot.” Oil and gas workers have traditionally had some of the highest-paying blue-collar jobs — […]

Mexico says gasoline costs to fall slightly, prices set daily next week

18 Feb 2017   Mexico

A man points a nozzle at the camera at a Pemex petrol station in Mexico City, Mexico February 3, 2017. Mexico’s Finance Ministry said on Friday that national gasoline prices would fall 2 Mexican cents per liter on Saturday, but prices would be set daily beginning next week as the country moves toward a free market in gasoline. The ministry said in a statement that maximum prices would be published daily, with Saturday’s price holding until the next update on Tuesday. Prices will be set going forward on the web page of the Energy Regulator Commision ( Mexico raised gasoline prices at the start of the year, and the 14 percent hike in regular gas prices sparked protests and looting around the country. The hike helped drive the annual inflation rate in January to its highest level in more than four years. The government is expected to adjust the […]

Worst Gasoline Glut in 27 Years Could Be Oil Rally’s Nemesis

18 Feb 2017   Oil Supply, USA

A gasoline glut brought on by drivers buying less at filling stations is emerging as one of the biggest threats to the yearlong oil-price rally. U.S. gasoline consumption plummeted last month, nearly matching a 15-year low, government estimates show. It fell to as low as 8.2 million barrels a day, averaged over the four-week period ended Jan. 27. January sales at the pump fell 4.4% from a year ago, according to data from the…

Senate Confirms Scott Pruitt as E.P.A. Head

18 Feb 2017   USA

The Senate confirmed Scott Pruitt on Friday to run the Environmental Protection Agency , putting a seasoned legal opponent of the agency at the helm of President Trump’s efforts to dismantle major regulations on climate change and clean water — and to cut the size and authority of the government’s environmental enforcer. Senators voted 52 to 46 to confirm Mr. Pruitt, the Oklahoma attorney general who has built a career out of suing to block the E.P.A.’s major environmental rules and has called for the dissolution of much of the agency’s authority. One Republican, Susan Collins of Maine, crossed party lines to vote against Mr. Pruitt, while two Democrats, Joe Manchin III of West Virginia and Heidi Heitkamp of North Dakota, both from coal-rich states where voters generally oppose environmental rules, voted for him.

U.S. Rig Count Rises As Crude Inventory Levels Hit Record High

18 Feb 2017   USA

The number of active oil and gas rigs in the United States increased again on Friday by 10. Both benchmarks were trading down earlier on Friday under heavy pressure from record-high crude oil inventories ( 518.1 million barrels ), and record-high gasoline inventories ( 259 million barrels ). The total number of active oil and gas rigs in the United States is now 751, according to oilfield services provider Baker Hughes , which is 237 rigs above the rig count a year ago. The number of oil rigs increased by 6, up from 591 last week to 597 this week. The number of active oil rigs in the United States is now the highest since October 09, 2015. Oil rigs have increased by 120 since the OPEC agreement was announced on November 30, and are following a steep trajectory upwards as OPEC continues to hold its members to specified […]

Mexico City, Parched and Sinking, Faces a Water Crisis

17 Feb 2017   Climate, Mexico

On bad days, you can smell the stench from a mile away, drifting over a nowhere sprawl of highways and office parks. When the Grand Canal was completed, at the end of the 1800s, it was Mexico City’s Brooklyn Bridge, a major feat of engineering and a symbol of civic pride: 29 miles long, with the ability to move tens of thousands of gallons of wastewater per second. It promised to solve the flooding and sewage problems that had plagued the city for centuries. Only it didn’t, pretty much from the start. The canal was based on gravity. And Mexico City, a mile and a half above sea level, was sinking, collapsing in on itself. It still is, faster and faster, and the canal is just one victim of what has become a vicious cycle. Always short of water, Mexico City keeps drilling deeper for more, […]

Worst Gasoline Glut in 27 Years Could Be Oil Rally’s Nemesis

17 Feb 2017   USA

A gasoline glut brought on by drivers buying less at filling stations is emerging as one of the biggest threats to the yearlong oil-price rally. U.S. gasoline consumption plummeted last month, nearly matching a 15-year low, government estimates show. It fell to as low as 8.2 million barrels a day, averaged over the four-week period ended Jan. 27. January sales at the pump fell 4.4% from a year ago, according to data from the…

U.S. Crude Inventories Reach Record High After EIA Reports Significant Build

16 Feb 2017   Oil Supply, USA

For the third week in a row the Energy Information Administration (EIA) has reported an increase in commercial crude oil inventories of 9.5 million barrels, to a total of 518.1 million barrels – exceeding the seasonal limit. The report came a day after the API estimated commercial inventories had jumped by 9.94 million barrels . The news is bound to cause worry among OPEC members who are being made painfully aware by U.S. shale boomers that the production cut agreement agreed to in November was a windfall for them – a windfall that they will make the best of while it lasts. Though prices started the week on the rise, boosted by the latest positive update from OPEC, including the IEA praising the cartel for its 90-percent compliance rate, the API figures partially offset the rise and now the EIA figures might offset the rest. The weekly inventory reports […]

Trump’s First Law Removes Transparency Rule For Big Oil

16 Feb 2017   Congress

President Trump’s first legislative act was to sign into law a repeal of a transparency rule aimed at keeping public oil companies in check with regard to their international operations and limiting the scope for bribery and corruption. Part of the so-called Dodd-Frank Act, devised after the 2008 financial crisis to avoid a repeat of the events that led to it, the rule stipulated that U.S. public oil companies must declare all payments made to the U.S. and foreign governments and agencies in the form of royalties and taxes, starting from their financial year ending in or after September 2018. It was an Act that Big Oil was very vocally against, saying the rule put it at a disadvantage to its foreign peers. Many of these foreign competitors are based in Europe, however, and are bound by similar regulations issued by the EU, supporters of Dodd-Frank have argued. Public […]

Trump Signs Measure Curbing Dodd-Frank Rules on Mining, Oil and Gas Companies

15 Feb 2017   USA

President Donald Trump signed a joint resolution in the Oval Office Tuesday rolling back part of the Dodd-Frank financial regulation overhaul that would require resource extraction issuers to report payments made to governments for the commercial development of oil, natural gas or minerals. Mr. Trump was seated at his desk, flanked by Vice President Mike Pence and members of Congress including Rep. Jeb Hensarling (R., Texas) and…

Mexico’s Pemex Sets Euro Corporate Debt Record with $4.49 Billion Issue

15 Feb 2017   Mexico

Mexico’s national oil company Petróleos Mexicanos issued €4.25 billion ($4.49 billion) in bonds Tuesday, the largest euro-denominated emerging market corporate bond deal on record. Emerging market investments have recovered from an initial slump after President Donald Trump’s November election victory. Mexican assets in particular sold off after Mr. Trump’s win, with the peso falling by as much as 16% against the dollar in the months…

U.S. gas prices remain relatively stable

15 Feb 2017   Prices, USA

Retail gasoline prices in the United States continue to hold steady despite regional fluctuations because oil markets in are limbo, a market survey found. Motor club AAA reports an average retail price for a gallon of regular unleaded gasoline at $2.28, only a fraction of a cent higher than the previous day and less than a percent, or about 2 cents, higher than one week ago. By region, the West Coast markets remains the most expensive in the country with California holding the honors of the state in the Lower 48 with the highest price for gas at $2.87 per gallon. AAA data indicates some price hikes may be in store for this market because of a decline in gasoline inventories and unplanned maintenance […]

Chesapeake Energy Settles With Estate of Former CEO

15 Feb 2017   USA

Chesapeake Energy Corp. and the estate of its former chief executive, the late Aubrey McClendon, have agreed to settle a legal dispute involving claims that Mr. McClendon stole sensitive documents from Chesapeake to start a rival company. The Oklahoma City-based company was seeking $445 million in damages from Mr. McClendon’s estate for the alleged theft of maps and data. The company said Mr. McClendon took that information with him…

Canada closer to breaking oil landlock

14 Feb 2017   Canada

A review board in Canada said it started a detailed approval process for the route of the expanded Trans Mountain pipeline to the western shore. The National Energy Board said it approved a proposed draft for the detailed route of the Trans Mountain pipeline. The regulator said pipeline company Kinder Morgan must now submit actual plans for each segment of the detailed route and notify any landowners whose property would be crossed. “Trans Mountain must also publish notices in local newspapers along the pipeline route,” the NEB said in a statement . Kinder Morgan would nearly triple […]

More drilling permits issued in Texas

14 Feb 2017   Shale Oil, USA

The number of new drilling permits issued in Texas last month was more than 80 percent higher than the previous year, state data show. Texas is the No. 1 oil producer in the state and accounts for about half of all the drilling activity in the country. Preliminary data from the Railroad Commission of Texas, the state oil and gas overseer, show 81.5 million barrels of oil produced in November, about 1 million barrels less than the previous month. The Texas energy sector, as well as the state economy , was under pressure for most of last year because of a downturn in crude oil prices. Since late last year, crude oil prices recovered in response to a decision from the […]

Will The U.S. See A Carbon Tax Under Trump?

14 Feb 2017   USA

Last week a group of Republicans and businessmen tabled a proposal for a carbon tax, designed to replace the Obama administration’s string of environmental regulations aimed at reducing climate change-aggravating emissions. The idea is not new. It has been put forward before by energy industry representatives, including Exxon’s then CEO Rex Tillerson , now Secretary of State, as a transparent and direct way to curb the effects of CO2 emissions on climate, even though the company lobbied against carbon tax bills last year. Basically, the idea amounts to replacing regulations with taxation—the latter which would be much more efficient in achieving the ends for which the regulations were devised. Starting from US$40 per metric ton of carbon dioxide, taxes would be increased every year to motivate more aggressive efforts to curb these emissions. Annual revenues from the tax are estimated broadly in the US$200 billion to $300 billion range, […]

U.S. Dependent on China for Rare Earth Minerals

14 Feb 2017   -, China, USA

An overlooked report has revealed the United States is completely reliant on imports from foreign countries, most heavily China, for rare earth minerals critical to our national security. The report, released by the United States Geological Survey, stated the United States is 100% dependent on foreign imports for at least 20 elements and minerals, including 17 classified as rare earth minerals critical to the development of high-grade magnets used in aircraft and missile systems. In addition to the use in military hardware, many rare earth minerals are critical for the development of GPS systems, satellite imaging, night vision goggles, and consumer products like smartphones and flat-screen televisions. One country has a near monopoly over exporting rare earth minerals to the United States: China. According to the report, the United States is 100% reliant on foreign countries (most notably the African nations of Gabon and South Africa) for the mineral […]

U.S. boosts monthly rate of oil rig additions to most since 2012: Baker Hughes

11 Feb 2017   USA

U.S. energy companies accelerated the rate of growth in oil rigs added over the past four weeks by the most since 2012 as drillers take advantage of a rise in crude prices since OPEC agreed to cut supplies in late November. Drillers added eight oil rigs in the week to Feb. 10, bringing the total count up to 591, the most since October 2015, energy services firm Baker Hughes Inc said on Friday. During the same week a year ago, there were 439 active oil rigs. The average rate of rig additions over the past four weeks increased to 17, its highest rate of growth since February 2012, Baker Hughes data showed. Since crude prices first topped $50 a barrel in May after recovering from 13-year lows last February, drillers have added a total of 275 oil rigs in 33 of the past 37 weeks, the biggest recovery in […]

U.S. Oil-Rig Count Climbs by 8

11 Feb 2017   USA

The number of rigs drilling for oil in the U.S. rose by 8 in the past week to 591, according to oil-field services company Baker Hughes Inc. The U.S. oil-rig count is typically viewed as a proxy for activity in the sector. After peaking at 1,609 in October…

Oil Companies, Corrupt Governments to Benefit as Congress Guts Transparency Rule

10 Feb 2017   Congress

On February 3, the Republican-led Senate used an obscure procedural tool to end a bipartisan provision meant to fight corruption and overseas oil bribery, a rule opposed by Rex Tillerson as head of ExxonMobil. The Securities and Exchange Commission’s (SEC) transparency rule, part of the 2010 Dodd-Frank financial reform bill, was created to reduce corruption by requiring drilling and mining companies to disclose royalties and other payments made to governments in exchange for oil, gas, and mining extractions. Critics say overturning the rule could threaten national security. Written by Sen. Ben Cardin (D-MD) and Sen. Richard Lugar (R-IN), the transparency rule mandated that extractive companies listed on the U.S. Stock Exchange — including Exxon, Chevron, and several Chinese oil conglomerates — publish details of the hundreds of billions of dollars paid for the rights to a nation’s natural resources. The transparency rule was implemented in 2016 with broad support […]

U.S. gasoline tax hike may dent fuel demand in oversupplied market

10 Feb 2017   Prices, USA

A potential increase in gasoline taxes in several U.S. states could put a dent in demand at the pumps and mark another setback for a market already flooded with excess fuel. States where gasoline taxes in some cases have not risen in decades, are discussing hikes. Conditions might be ripe for the proposed increases to win approval in state legislatures, tax experts said this week. The discussions come at a time when U.S. refiners are still reeling from their worst year since the shale boom and face the prospect of weak retail demand for the first time in five years. Oversupply, in the world’s second largest energy consumer, was rampant in 2016 and this year looks no different. Any significant increase in taxes is likely to be […]

Arctic Oil Town Fears Future as Imperial’s 1920s Wells Shut

10 Feb 2017   Canada

When oil topped $100 a barrel three years ago, the tiny village of Norman Wells in Canada’s high arctic was gearing up to be the “Dubai of the Mackenzie River,” with oil revenue bringing prosperity to all. Now, with oil at half that price and one of Canada’s oldest wells set to close, the future is less certain for the 750 residents in the Northwest Territories town. Imperial Oil Ltd. , the Canadian unit of Exxon Mobil Corp., will probably shut in the wells this month, ending almost a century of production in the area about 1,700 kilometers (1,000 miles) north of the Calgary energy hub. Production is being halted after the lone Enbridge Inc. pipeline that carries oil south from Norman Wells was brought down late last year, Lisa Schmidt, an Imperial Oil spokeswoman, said by phone. Schmidt declined to say if production will resume. The town that […]

Trump Expected to Name Two Veteran Lobbyists to Advise on Energy Issues

9 Feb 2017   USA

President Donald Trump is likely to tap two veteran lobbyists to advise on energy and environmental issues in the White House, according to multiple people close to the new administration, filling key roles with longtime Washington experts. Michael Catanzaro, a lobbyist at CGCN Group, is likely to be tapped to cover domestic energy issues, and George David Banks, executive vice president at conservative nonprofit American…

Reduced US crude exports to Canada drag December total lower

9 Feb 2017   Canada, USA

US crude exports fell by 156,000 b/d in December, to 442,000 b/d, after exports into Eastern Canada dried up, a S&P Global Platts analysis of US Census Bureau data released Tuesday showed. US crude exports to Canada declined by 155,000 b/d, to 196,000 b/d, as flows from New York and Maine dropped to zero after averaging 187,000 b/d in October and 25,000 b/d in November. Crude exports from New York into Canada averaged 137,000 b/d over 2016 and are most likely rail shipments of Bakken crude. Statistics Canada data confirms that Canada slashed its US crude imports in December, bringing in more Nigerian, Algerian and Saudi Arabian cargoes, while total imports were down by 145,000 b/d at 593,000 b/d. The Statistics Canada data shows that New Brunswick imports from the US fell to zero in December, with the province’s US imports averaging 35,000 b/d in 2016 and shipments arriving […]

Suncor Output Hits Record With Oil-Sands Unit at Full Speed

9 Feb 2017   Canada, Tar Sands

Suncor Energy Inc.’s production rose to a record last quarter after the oil-sands giant took control of the Syncrude processing unit and put it at full throttle. Canada’s biggest energy company produced 738,500 barrels of oil equivalent a day in the period, up from 582,900 in the previous quarter, according to an earnings report Wednesday. The jump was largely due to its increased stake in the Syncrude upgrader, which processes bitumen mined in northern Alberta into light crude, and to boosting the utilization of the unit to 102 percent of nominal capacity, from 73 percent a year earlier. Suncor has slashed costs to weather the industry downturn and is now benefiting from a 76 percent rebound in oil prices over the past year as the Organization of Petroleum Exporting Countries and other major exporters curtail production. The company’s output has risen after it completed the acquisition of Canadian Oil […]

From Bust To Boom: Why Canada’s Rig Count Increased 50 Percent Last Year

9 Feb 2017   Canada

Canadian rigs are going back to the field, coaxed by higher commodity prices and greater productivity. Across the land, 345 iron masts were turning bits last week, so the year-over-year rig count is up by almost 50 percent. But where are they drilling? The pickup has been seen mainly in Alberta, somewhat in Saskatchewan and not so much in British Columbia. (Click to enlarge) The Western Canadian Sedimentary Basin (WCSB) blankets an area twice the size of Texas and mostly underlays British Colombia, Saskatchewan and Alberta. More like a rumpled blanket, the rocks underneath the WCSB hide all sorts of hydrocarbons, from natural gas, to condensates, to light oils through the heaviest, most viscous energy commodities. BC has mostly natural gas. Saskatchewan has mostly oil. Sandwiched between, Alberta has a smorgasbord of everything, including the contentious oil sands, which is a separate category of resource development. Depending on commodity […]

U.S. refiners give mixed reviews of GOP-backed border tax plan

9 Feb 2017   USA

U.S. independent refiners like Phillips ( PSX.N ) and Valero ( VLO.N ) have offered mixed support for Republican efforts to boost American jobs and products, expressing concerns about how a border tax on imports could upend the energy ecosystem. The comments by refining executives in a wave of recent earnings calls offer the first glimpse of the balancing act U.S. refiners must perform under the Trump Administration: Applaud pro-business proposals while raise alarms about protectionist policies that may hurt American consumers – and perhaps their own balance sheets. Congressional Republicans and the Trump administration are considering a basket of tax reforms, the centerpiece of which is a 20 percent tax on imports, to try to drive domestic manufacturing and energy industry growth. The tax would be offset by cutting income taxes on exports. Refining executives warned it would have significant consequences for the U.S. refining industry that imports […]

U.S. rig count up 4 percent

8 Feb 2017   USA

The number of rigs actively exploring for or producing oil or gas in the United States was up 4.4 percent year-on-year in January, Baker Hughes reported. Baker Hughes published its report for January rig counts . Rig counts reflect exploration and production activity and serve as a loose barometer for industry confidence in a particular market. In the United States, the oilfield services company recorded 683 rigs on average working as of January. That’s up nearly 8 percent from December and 4.4 percent higher than January 2016. The worldwide rig count was 1,918 for January, up 8.2 percent from December and up 1.4 percent year-on-year. Crude oil prices dropped below $30 per barrel in early 2016, but recovered to around […]

Republican grandees make case for US emissions tax

8 Feb 2017   Climate, USA

A group of former senior US officials from past Republican administrations has backed a tax on carbon dioxide emissions, with revenues used to pay hundreds of dollars to every American citizen each year, as the way to make the conservative case for tackling the threat of climate change.  The group includes James Baker, who was Treasury secretary for President Ronald Reagan and secretary of state for President George H.W. Bush; George Shultz, who was secretary of state under Mr Reagan; Hank Paulson, who was Treasury secretary under George W Bush; Martin Feldstein, who was the chairman of the Council of Economic Advisers for Mr Reagan, and Greg Mankiw, who performed the same role for the younger Mr Bush.

Some of them are meeting officials from President Donald Trump’s White House on Wednesday, to present a plan for addressing global warming that they say would “embody the principles of free markets and limited government.”  Their package includes a tax on carbon dioxide emissions, starting at $40 per ton, with all of the revenue recycled in dividends paid back to the public. The group, known as the Climate Leadership Council, argues that the tax, which could rise over time, would send “a powerful signal to businesses and consumers, while generating revenue to reward Americans for decreasing their collective carbon footprint.”

Oil benchmark futures play back in vogue as U.S. debates import tax

8 Feb 2017   USA

After several years of neglect, oil investors are again betting heavily on the price difference between two global benchmarks – Brent and U.S. crude futures – due to a push in Washington to impose a controversial import tax. At the start of this decade, the play on the spread between North Sea Brent and U.S. West Texas Intermediate (WTI) contracts futures earned traders and banks hundreds of millions of dollars, provided they played the high-stakes game right. This trade, nicknamed the “widowmaker” for its high level of risk, fell out favor about four years ago when the two contracts resumed moving in tandem, sharply reducing the spread volatility on which it depended. Then OPEC’s decision in November to cut crude output, hoping to reverse more than a year of steep […]

Volkswagen Forms U.S. Unit for Zero-Emission Vehicles

8 Feb 2017   Electric Cars, USA

Volkswagen AG launched a U.S. subsidiary Tuesday designed to oversee $2 billion in investments to promote zero-emission vehicles such as electric cars, a commitment the German auto giant made in the wake of cheating on U.S. emissions tests for several years. Dubbed Electrify America LLC, the organization is an attempt to show a renewed commitment to clean vehicles by pouring money into electric-vehicle charging stations in the U.S….

Shell, Phillips 66 buy 6.4 million barrels of oil from U.S. emergency reserve

8 Feb 2017   USA

Oil companies Shell and Phillips 66 together bought 6.4 million barrels of oil last week from the Strategic Petroleum Reserve (SPR), according to a Department of Energy document released on Tuesday. Shell bought 6.2 million barrels of oil and Phillips 66 bought 200,000 barrels on Jan. 18, according to the department document, seen by Reuters. The federal government held the sale to fund a revamp of the emergency oil stash, which is stored in salt caverns in Louisiana and Texas along the Gulf Coast. The Department of Energy had said it would sell up to 8 million barrels as part of its modernization program. Shell will take delivery of 1.7 million barrels of oil to a […]

EPA Scientists Worry Their New Boss Doesn’t Want Science

7 Feb 2017   Climate, USA

Scott Pruitt, Oklahoma’s attorney general, is probably going to be the head of the Environmental Protection Agency. The full Senate will almost certainly vote to confirm him to the cabinet-level job this week. And that has the scientists who work for the EPA freaking out. The problem is, well, that whole protecting-the-environment thing. Advocacy groups complain Pruitt ignored scientific reports that showed oil and gas drilling have caused an epidemic of earthquakes in Oklahoma and failed to enforce pollution rules that would have stopped waste from Arkansas chicken farms from floating downriver into Oklahoma. As Oklahoma’s AG, Pruitt sued the EPA over mercury, methane, and other environmental rules, although he lost. And he doesn’t seem to think climate change is a threat worth studying , […]

U.S. East Coast Has a Growing Appetite for Foreign Oil

7 Feb 2017   Oil Supply, USA

U.S. East Coast refineries, which have thrived for a few years on a boom of production from the Bakken shale play in North Dakota and eastern Montana, are increasingly looking abroad to supply their needs. Last year through November, the region imported 884,000 barrels a day, which would be the highest full-year total since 2011, data from the U.S. Energy Information Administration show. Rising supplies overseas made imported oil cheaper than domestic for the first time since 2013, data from the U.S. Energy Information Administration show. The price switch opened the doors for refineries like PBF Energy Inc., Philadelphia Energy Solutions and Phillips 66 to boost imports, says Andy Lipow, president of Lipow Oil Associates LLC in Houston. He said the new Dakota Access Pipeline, one of the energy projects supported by President Donald Trump, will make the East Coast even more reliant on imports. The 1,172-mile line developed […]

Iran says U.S. sanctions stop American oil firms taking part in projects

6 Feb 2017   Iran, USA

Iran has imposed no restrictions on U.S. oil firms willing to participate in energy projects in the country but American sanctions make such cooperation impossible, Iran’s deputy oil minister said on Monday. “Iran has not imposed any restrictions on the U.S. companies, but they cannot participate in our (oil and gas) tenders due to the U.S. laws,” Amir Hossein Zamaninia, deputy oil minister for trade and international affairs, was quoted as saying by state news agency IRNA. “Based on the U.S. Congress sanctions, the American oil companies cannot work in Iran,” he added. Iran said on Saturday that it will hold the country’s first tender in mid-February since the lifting of international sanctions to develop oil and natural gas fields. […]

US Could Export More Oil Than OPEC Countries In 2017

6 Feb 2017   exports, USA

The U.S. may export more oil in 2017 than four OPEC member states produce, according to a survey of energy analysts by Bloomberg. The U.S. is already outproducing Libya, Qatar, Ecuador and Gabon; in 2017, U.S. companies could ship more oil overseas than those OPEC nation pump out of the ground, according to Bloomberg . “The United States has dramatically increased energy production and use even as emissions continue to decline,” Reid Porter, a spokesman for the American Petroleum Institute (API), told The Daily Caller News Foundation. “For the first time in our lifetime, we can now say that North America has the potential to become a net energy exporter,” Porter said. “That’s a revolutionary change, a significant shift from where we were just a few short years ago.” The U.S. Energy Information Administration (EIA) expects oil production to top nine million barrels a day in 2017. The U.S. […]

Iran thumbs nose at Washington on oil

4 Feb 2017   Iran, USA

Iran is still able to get its crude oil to the international market and increase production despite souring U.S. relations, an Iranian official said Friday. The White House is expected to hit Iran with new sanctions in response to a recent missile test after putting Tehran “on notice” earlier this week . Iran secured relief from some Western sanctions in early 2016 after the United Nations confirmed compliance with a multilateral deal that scaled back Tehran’s nuclear research program. Alaeddin Boroujerdi, the chairman of Iran’s Foreign Policy and National Security Commission, said Iran was still secured by the Joint Comprehensive Plan of Action, as the nuclear agreement is called. “Despite enemies’ economic war against Iran, we were able to increase oil export from 1 […]

Republicans kill energy sector disclosure, emissions rules

4 Feb 2017   Congress

U.S. Republicans on Friday repealed a securities disclosure rule aimed at curbing corruption at oil, gas and mining companies and voted to ax emissions limits on drilling operations, part of a push to remove Obama-era regulations on the energy industry. In a 52-47 vote, the Republican-controlled Senate approved a resolution that wipes from the books a rule requiring companies such as Exxon Mobil and Chevron Corp to publicly state the taxes and other fees paid to foreign governments. The House of Representatives already has passed the measure. President Donald Trump is expected to sign it shortly. Exxon and other major energy corporations have fought for years to prevent the rule, required by the 2010 Dodd-Frank Wall Street […]

U.S. oil rig count rises to highest since October 2015: Baker Hughes

4 Feb 2017   Shale Oil, USA

U.S. energy companies added oil rigs for a 13th week in the last 14, extending a nine-month recovery as drillers take advantage of crude prices that have held mostly over $50 a barrel since OPEC agreed to cut supplies in late November. Drillers added 17 oil rigs in the week to Feb. 3, bringing the total count up to 583, the most since October 2015, energy services firm Baker Hughes Inc said on Friday. During the same week a year ago, there were 467 active oil rigs. Since crude prices first topped $50 a barrel in May after recovering from 13-year lows last February, drillers have added a total of 267 oil rigs in 32 of the past 36 weeks, the biggest recovery in rigs since a global oil […]