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U.S. Opening Door to More Oil Exports Seen Foiling OPEC Strategy

The Obama administration’s move to allow exports of ultralight crude without government approval may encourage shale drilling and thwart Saudi Arabia’s strategy to curb U.S. output, further weakening oil markets, according to Citigroup Inc. A type of crude known as condensate can be exported if it is run through a distillation tower, which separates the hydrocarbons that make up the oil, according to U.S. government guidelines published yesterday. That may boost supplies ready to be sold overseas to as much as 1 million barrels a day by the end of 2015, Citigroup analysts led by Ed Morse in New York said in an e-mailed report. Saudi Arabia led the Organization of Petroleum Exporting Countries to maintain its production quota at a meeting last month even as a shale boom boosted U.S. output to the highest in more than three decades. That prompted speculation OPEC was willing to let prices […]

Posted On : Published By : Tom Whipple
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Alaska governor orders halt to state funds for alternate North Slope natural gas pipeline

Anchorage (Platts)–30Dec2014/302 pm EST/2002 GMT Alaska Governor Bill Walker ordered a halt to state funds being spent on a state-led North Slope natural gas pipeline as a budget contingency, a spokesman for the Alaska Gasline Development Corp said Tuesday. The order affects unencumbered state funds appropriated for a 36-inch pipeline being planned by the state gas corporation as a backup in case an industry-led 42-inch pipeline plan associated with a large LNG export project does not proceed, AGDC spokesman Miles Baker said. "The governor’s order does not affect state funds being spent in support of the larger industry-led project in which the state is a partner," Baker said. The state’s gas corporation is also the entity participating with North Slope producers BP, ConocoPhillips and ExxonMobil and pipeline company TransCanada in the larger project, he said. Walker’s action affects several other large state-funded projects and was taken in view of […]

Posted On : Published By : Tom Whipple
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House vows to deliver on energy promises

Rep. Fred Upton, R-Mich, vows to advance era of energy abundance as new GOP-led Congress readies to take its seat. UPI/Yuri Gripas. WASHINGTON, Dec. 30 (UPI) — House Republicans will work to create the "architecture of abundance" needed to take advantage of North American energy leadership, a lawmaker said. The House Energy and Commerce Committee published a 105-page strategy document meant to highlight the agenda of the incoming Republican-led Congress. It says federal policies are ill-suited to develop the infrastructure needed to take advantage of the oil and gas production boost in the United States. "Creating this architecture of abundance is slowed at every step by archaic federal rules that can cause years of delays and even block some pipeline and power line projects outright," the paper reads. Rep. Fred Upton, the committee’s chairman, said the new Congress would work to advance its blueprint when it comes into power […]

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More Budget Cuts for Continental Resources

Continental Resources CEO, Harold Hamm For the second time in as many months, Continental Resources announces huge adjustments to its 2015 budget in response to plummeting oil prices. More about Bakken operators slashing budgets for 2015 In a press release before Christmas, the energy giant announced the details including plans to slash their 2015 capital expenditures to $2.7 billion. Additional cuts will come as they decrease the number of operated rigs, which they predict to drop from 50 to approximately 31 operated rigs by the end of 2015. In an interview with Forbes, CEO Harold Hamm explained that the company is taking the necessary precautions to weather this storm and protect bondholders. Seemingly unfazed in his comments, Hamm credits his confidence to his past experience with these types of scenarios. Harold Hamm tells Forbes that “It’s all part of our plan. If prices go down, we are going to cut […]

Posted On : Published By : Tom Whipple
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U.S. drivers feeling oil stimulus, AAA says

Prices at the pump fall along with oil, though markets outside U.S. may start to suffer, AAA warns. (Graph: AAA Fuel Gauge report) Perceived oversupply in the oil market is bringing relief to U.S. drivers, but may have negative effects elsewhere in the global market, motor club AAA said. AAA reports a retail national average price of $2.27 for a gallon of regular unleaded gasoline. That’s down about 50 cents, or 18 percent, from one month ago and $1.04, or 31 percent, from this date in 2013. Two states, Missouri and Oklahoma, are reporting a state average price per gallon below the $2 mark. The low price at the pump is a reflection of the low price of oil , which for the global benchmark Brent is down close to 50 percent from its yearly peak in mid June. "The global oil market remains in a state of perceived […]

Posted On : Published By : Tom Whipple
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Oil prices a cause for Scottish concern

Scottish Deputy First Minister John Swinney says oil prices may drag on parts of the economy. (Photo: Scottish government) EDINBURGH, Scotland, Dec. 30 (UPI) — Scotland is concerned about how low oil prices may impact North Sea operations, but is confident about future growth, the deputy first minister said Tuesday. The Scottish government said its economy is on pace to turn in its strongest performance in seven years as well as marking its second straight year of continuous growth. Deputy First Minister John Swinney said the labor market in particular was strong. "Scotland is leading the way with the highest employment and economic activity rates and lowest unemployment rate of the home nations of the United Kingdom," he said in a statement. Though fiscal year 2016, the government said it expects to see $7 billion in new infrastructure investment. Despite the mid-term growth expectations, the government said low oil […]

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Vermont Nuclear Power Plant Shut Down as Industry Evolves

ENLARGE The Vermont Yankee Nuclear Power Station in Vernon, Vt., had been generating electricity since 1972. Associated Press The Vermont Yankee nuclear plant ended more than four decades of electricity production on Monday, moving to full retirement amid growing competition from cheap natural gas from the shale boom. Environmentalists, who had waged a lengthy fight to close the General Electric Type 4 boiling-water reactor, in Vernon, Vt., applauded the news. Others lamented the loss of a source of low-cost, carbon-free electricity and jobs in the region. Owner Entergy Corp. said the Vermont Yankee Nuclear Power Station produced 171 billion kilowatt-hours of electricity since 1972—more than 70% of the electricity generated in Vermont over that period. ISO New England, the agency that oversees the area’s high-voltage electricity grid, already has determined that the region’s power system can reliably operate without Vermont Yankee given other power sources and the interconnectedness of […]

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Oil workers to pay for near 50% price fall

A BP oil and gas platform in the British North Sea Oil prices are on course for their largest annual slide since 2008, capping another dire year for commodities, as crude fell again on Tuesday to hover at close to half its level of six months ago. Brent’s 49 per cent plummet since June — alongside a near halving of iron ore prices and sharp drops in coal and copper — has also helped drag the Bloomberg Commodity index down 15.6 per cent in 2014 to a five-year low. While the international benchmark’s price plunge could prove a significant boon for the global economy, it has thrown big oil exporters such as Russia and Venezuela into disarray, and forced oil companies to re-examine their investment plans and look for ways to reduce costs. In a sign of how the oil majors are scrambling to make savings, BP , Royal […]

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Gazprom buys out South Stream partners

Russian buys out partners in South Stream project meant to splash on the European coast of the Black Sea. (Photo: Gazprom) Gazprom announced it bought out its partners at Italian energy company Eni, French major EDF and Germany’s Wintershall to take full control over the venture. None of the companies involved in the operation disclosed the financial terms of the sale, other than to say they were reimbursed fully for their cash investments . South Stream had an optimum capacity of 2.2 trillion cubic feet per year. It would’ve stretched across the Black Sea to Bulgaria and then north to European markets. Russian officials in mid-December confirmed the project was no longer viable as envisioned in 2007. Instead, Gazprom Deputy Chief Executive Officer Alexander Medvedev said a project dubbed Turkish Stream may take its place in the Black Sea. Fitch Ratings said the South Stream decision reflects low demand […]

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How Putin Forged a Pipeline Deal That Derailed

SOFIA, Bulgaria — Barely two weeks after President Vladimir V. Putin annexed Crimea on one side of the Black Sea, he won a different prize on the other side. In Bulgaria’s Parliament, lawmakers gave initial passage to a bill clearing the way for a mammoth gas pipeline from Russia . The pipeline, known as South Stream, was Mr. Putin’s most important European project, a tool of economic and geopolitical power critical to twin goals: keeping Europe hooked on Russian gas, and further entrenching Russian influence in fragile former Soviet satellite states as part of a broader effort to undermine European unity. The bill that Parliament took up on April 4 was arcane. But it swept aside a host of European regulations — rules that Mr. Putin did not want to abide by — for a pipeline that would deliver gas throughout southern Europe. It was a dream bill for […]

Posted On : Published By : Tom Whipple