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How Shale Helped Frack Mexico’s Energy Impasse

After decades of inertia, the energy-reform proposal given general approval by the Mexican Senate late Tuesday goes even further than many had expected. The country’s rapidly changing energy relationship with its northern neighbor helps explain why. Mexico’s dismal decline in oil production, to 2.94 million barrels per day last year from 3.85 million in 2004, is the obvious impetus for trying to coax in more foreign money and expertise. But an even starker picture emerges when you look at Mexico’s overall energy trade in oil and gas with the U.S. Using trailing 12-month averages, Mexico’s exports of crude oil to the U.S. peaked at 1.63 million barrels per day in fall 2006. By August this year, that was down to less than 0.9 million barrels—a level last seen in the early 1990s. U.S. exports of crude oil are effectively prohibited, but that isn’t true for refined products such as […]

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Mexico Lower House Passes Oil Overhaul to End State Monopoly

Mexico ’s lower house passed an energy bill that ends Petroleos Mexicanos’s 75-year oil monopoly in a bid to attract foreign investment and boost growth. Lawmakers approved the bill in general terms in a 354-134 vote late yesterday and continue to discuss minority-party challenges to specific articles. If these are rejected, the initiative will be sent to Mexico’s states, where it’s likely to receive approval from more than half of the legislatures, the threshold for changing the constitution. The bill, passed by the Senate two days ago, would change Mexico’s charter to permit companies such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) to drill for oil for the first time since 1938. It would allow production sharing and licenses for outside companies that will also be able to log crude reserves for accounting purposes. Supporters say it will boost economic growth, while opponents say it will funnel […]

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Japan sets aside $1 billion for nuclear fallout storage

The total cost of Japan’s Fukushima nuclear plant meltdown may never be known, but the country has at least put a number on how much it anticipates storing the radioactive debris will cost it.  Asahi Shimbun reports that the 2014 Japanese budget includes a 100 billion yen provision (roughly $970 million) for the purchase and development of land for “intermediate storage facilities.” Once construction and operation costs are also included, the total anticipated expense is calculated to be 1 trillion yen, or just under $10 billion. Though Tokyo Electric Power Co., the operator of the disaster-stricken plant, was expected to handle all decontamination work, its financial struggles have delayed the cleanup and the government is now stepping in with public funds to speed things up. Construction and operation costs raise the total to 1 trillion yen There are multiple candidate sites in […]

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Exxon Presses for Exports

Exxon Mobil Corp, the nation’s largest energy producer, is calling for the U.S. to lift restrictions on exporting domestic oil that date back to the Arab oil embargo of 1973. The Irving, Texas, company’s public support for crude exports comes as it forecasts decades of abundant supplies of petroleum in the U.S. and elsewhere as well as increasing global demand for oil, according to its annual energy […]

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China’s Excess Fuel Supply Forecast at 34 Million Tons in 2020

China will face an excess supply of 34 million metric tons of fuels by 2020, below previous estimates, as new refineries may be delayed or scrapped, according to the nation’s biggest oil and gas producer. Diesel supply may exceed demand annually by 14 million tons, said Dai Jiaquan, a director at China National Petroleum Corp.’s Economic and Technology Research Institute. Gasoline will be oversupplied by 12 million tons and kerosene by 8 million tons, he said in a speech in Beijing today. An excess of 34 million tons is equivalent to 16 months worth of China’s exports including fuel oil , according to customs data. “The fuel glut in 2020 is significantly lower than our previous forecast,” Dai said without providing details. “We believe refiners may have to delay or cancel expansion plans due to environmental reasons, especially those in northern China.” China, the world’s second-largest oil consumer, faces […]

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Deepwater Oil Drilling in Gulf Included in Budget Deal

Deepwater oil and gas exploration would be allowed to proceed in parts of the western Gulf of Mexico as part of a budget compromise announced yesterday. Language in the legislation would implement a 2012 U.S.- Mexico Agreement concerning hydrocarbon reservoirs in parts of the gulf that cross the international maritime boundary. U.S. domestic crude production rose to a 25-year high as the combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies trapped in shale formations from Texas to North Dakota. Output from federal waters in the Gulf of Mexico will account for 17 percent of total U.S. production this year, down from 20 percent in 2012, government data showed. “It’s a step in the right direction and it will add to oil supply,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago . “It’s another reason that oil will be relatively cheap. The […]

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Fracking Boom Pushes U.S. Oil Output to 25-Year High

U.S. crude production rose to the highest level in a quarter-century as a shale drilling boom in states such as Texas and North Dakota cut the need for foreign oil and pushed the country closer to energy independence. The U.S. pumped 8.075 million barrels a day in the week ended Dec. 6, a gain of 0.8 percent, or 64,000 barrels a day, the Energy Information Administration said today. It’s the most since October 1988. “You can’t swing a cat without hitting a barrel of oil in North America,” said Stephen Schork , president of the Schork Group Inc., an energy consulting firm in Villanova, Pennsylvania. “It’s amazing how quickly things can change.” U.S. oil output grew 18 percent in the past 12 months, the fastest pace on record, boosting fuel exports and reducing reliance on imports, according to the EIA. The boom will make the country the world’s largest […]

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Exxon: Rising living standards propel energy needs

Exxon Mobil says the drive for higher living standards around the world will keep demand for electricity and transportation fuels growing even as economies get more efficient and governments put a price on pollution. The company’s annual long-term energy outlook, released Thursday, predicts world energy demand will grow 35 percent by 2040 as electricity and modern fuels are brought to some of the billions of people in the developing world who currently live without power or burn wood or other biomass for cooking and heating. Those growing needs will be somewhat offset by a slow decline in consumption in the far more energy-hungry economies of the developed world. “People want a warm home, a refrigerator, a TV, someday a car, and a cellphone,” said William Colton, Exxon’s vice president for corporate strategic planning, in an interview. There are ample supplies of fuel to meet the […]

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In Utah, Energy and Environment Clash

After watching its oil industry dwindle for decades, Utah is suddenly seeing a burst of activity that it hopes will make it the next North Dakota. The push is being led not by global energy titans, but smaller companies that have honed their techniques looking for oil in places like North Dakota’s Bakken Shale. These companies are now moving quickly here to snap up leases and bring advanced drilling techniques like hydraulic fracturing and horizontal wells to Utah’s boom-and-bust oil patch. But the surge in oil drilling in places like Vernal has drawn the ire of some in the state’s far-larger tourism-and-recreation industry, which doesn’t want more drill pads and oil-tanker trucks in the spectacular scenery of the high desert. No one would have imagined such a dispute just a few years ago, when most here thought the sagebrush-covered hills of eastern Utah were largely out of fresh […]

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North Sea Oil Output Seen 4% Lower in January Than December

The amount of crude oil to be pumped from fields in the North Sea in January will be lower than in December, according to loading programs for the four key grades. The biggest fall will be in the Brent grade, where only five cargoes of crude will be loaded, compared with seven scheduled to load in December. Loading programs are released and circulated among oil traders and brokers, but don’t give a perfect indication of oil volumes because they can be subject to change. The total month-on-month fall will be 3.9%, according to the programs. These changes are often seasonal, and can alter dramatically if one of the four key fields — Brent, Forties, Oseberg and Ekofisk — have scheduled maintenance work or need to be shut in for emergency reasons. Overall, however, production in the North Sea is in decline. To date, 41 billion barrels […]

Posted On : Published By : Tom Whipple