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North Dakota reviews oil-train safety

North Dakota Gov. Jack Dalrymple calls for tighter rules to ensure safe transport of crude oil from state’s Bakken shale reserve. Photo by Steven Frame/Shutterstock There’s no way to offer a single solution that would allay concerns about the safety of crude oil transit by rail, North Dakota Gov. Jack Dalrymple said. Dalrymple spoke with U.S. Transportation Secretary Anthony Foxx to discuss efforts to improve the safe transport of crude oil by rail from the state. The Republican governor said he called on the secretary to adopt new standards for rail cars carrying crude oil as soon as possible . "Secretary Foxx and I agree that there is no single solution to improving the safety of rail transportation," Dalrymple said in a statement Wednesday. North Dakota crude oil production is more than existing pipeline capacity can handle, forcing many in the industry to use rail as an alternative transit […]

Posted On : Published By : Tom Whipple
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Rig data paints mixed oil picture

Mixed pictures emerge on how rig activity may or may not impact oil production in key U.S. shale basins. Photo by UPI/Shutterstock/Calin Tatu. North Dakota state data show 107 active rigs as of Thursday, down 45 percent year-on-year and 3.6 percent less than last week. The rig count of 111 last week was the lowest since April 2010 . Bentek Energy, a forecasting division of energy reporting agency Platts, found crude oil production in and around the Bakken shale formation in North Dakota averaged 1.2 million barrels per day. That is around 276,000 bpd higher than February 2014, despite the drop off. "Producers are countering the decline in rig count with a drive for efficiency gains in drilling and completion techniques and an increased focus on their more productive acreage," Catherine Bernardo, Bentek’s manager of energy analysis, said in a statement. Data from the North Dakota Industrial Commission found […]

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Low oil prices may hurt Colorado economy

Low oil prices may hurt Colorado’s economy, state budget report finds. Photo by Calin Tatu/Shutterstock The Colorado Office of State Planning and Budget said the state’s general revenue fund for fiscal year 2014-14 was relatively unchanged, with growth expected at 8.8 percent. Revenue growth for the fiscal year ending in 2016 is expected to decline by 0.4 percent, or $43.7 million, because of issues in the energy industry. "Because the oil and gas industry and the economic activity associated with it have been an important part of the state’s growth in the current expansion, there is risk of a larger economic slowdown than forecast, especially if oil prices decline further and remain low," an OSPB report published Wednesday said. Colorado’s government in February endorsed recommendations set forth by an oil and gas task force that gave more input to local officials on large-scale drilling operations, though it kept some […]

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Fed urges lawmakers to toughen rules on Wall St. and commodities

WASHINGTON/NEW YORK (Reuters) – U.S. lawmakers should consider overturning a decades-old rule that allows Morgan Stanley and Goldman Sachs to extract, transport and trade physical commodities, a top Federal Reserve official said on Thursday. Asked at a Senate Banking Committee hearing on bank regulation what rules could be strengthened, Fed Governor Daniel Tarullo said one target was the commodities exemption the two banks enjoy, which allows them to handle everything from crude oil cargoes and copper pallets to electricity lines and aluminum stockpiles. Without naming the banks Tarullo said "it would be very much worth considering treating those two firms like the other banking companies." Tarullo, the Fed’s point person for bank regulation was joined by two other bank regulators on the panel, which was called by Senate Banking Committee Chairman Richard Shelby to examine the regulatory regime for regional banks. Regional banks, such as Comerica Inc, fall in […]

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Debt Is Oil Patch’s Four-Letter Word

The 60 percent plunge in crude oil prices since mid-2014 isn’t just about increased production and slower global growth. Debt may be the four-letter word when it comes to explaining the extent of the energy sector’s collapse, a paper in the Bank for International Settlement’s Quarterly Review shows. While production has certainly increased and consumption cooled, current estimates of both are little changed from previous forecasts. This stands in contrast to the last two periods of similar oil-price declines in 1996 and 2008, which were attributed to big reductions in demand and/or a surge in production, according to the paper. Bank for International Settlements This time, low borrowing costs, a product of easy Federal Reserve monetary policy, are a new wrinkle. Cheap financing has made it easier for exploration and production (E&P) companies to finance operations and expand rapidly as the era of hydraulic fracturing kicked into high gear. Debt […]

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Pimco Lowers U.S. Forecast Amid Strong Dollar, Oil Plunge

(Bloomberg) — Pacific Investment Management Co., the manager of the world’s biggest bond mutual fund, lowered its expectations for U.S. economic growth this year because of the impact of a strong U.S. dollar and a slowdown in spending among energy companies. Pimco sees economic expansion of 2.5 percent to 3 percent, Rich Clarida, global strategic adviser, and Andrew Balls, chief investment officer for global fixed income, said in a report on the Newport Beach, California-based company’s website today. That’s down from its 2.75 percent to 3.25 percent projection in December. “Our baseline view remains that the U.S. is on track for solid if not spectacular above-trend growth,” they wrote in the outlook, formulated after a quarterly meeting that included experts such as former Federal Reserve Chairman Ben S. Bernanke. Pimco said a stronger labor market and falling oil prices are a positive for U.S. consumers despite headwinds from sluggish […]

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The Economic Impact of Shale Oil

North Dakota Sees $4.4 Billion in Revenues N.D. Economy Booming During a recent event dubbed “Energy Day” in Bismark, N.D. various groups came together to recognize the impact of the oil and gas industry. The day included legislative committee hearings, an education session and facts and figures regarding the industry’s importance to North Dakota’s economy. According to one study, presented by Dean Bangsund of ND University, oil and gas had a $43 billion economic impact on North Dakota in 2013 and affected many parts of the aspects of the state’s economy. Highlights include: Retail trade saw the largest impact, accounting for $11.3 billion of the total. Personal income saw the second-largest impact at $9.3 billion. The finance, insurance and real estate industry ($4.5 billion) overtook the government $4.4 billion in government revenues Researcher Dean Bangsund told Bakken Magazine  “This study helps confirm that the petroleum industry is one of […]

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Fracking Rules Expected to Be Unveiled by Obama Administration Friday

Pump jacks and wells are seen in an oil field near McKittrick, Calif., where gas and oil are being extracted by hydraulic fracturing. Photo: David McNew/Getty Images WASHINGTON—The Obama administration on Friday is expected to issue long-awaited regulations setting new standards for hydraulic fracturing in the oil and natural-gas industries, people familiar with the matter said. The drilling technology has been key to unlocking vast reserves of oil and gas across the U.S., but qualms about its environmental impact have made it controversial. The regulations will set standards for wells and disposal of wastewater—and also require companies to disclose chemicals used, Interior Secretary Sally Jewell said on Tuesday in remarks discussing the rules. “The rule will include measures to protect our nation’s groundwater—requiring operators to construct sound wells, to disclose the chemicals they use, and to safely recover and handle fluids used in the process,” Ms. Jewell said at […]

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Water rationing may become a way of life in California drought

LOS ANGELES — After the driest January on record and dire predictions of the worst and most persistent drought in 1,000 years , California is once again cracking down on water wasters and reminding residents that water rationing may be a way of life for years to come. The State Water Resources Control Board sounded an alarm this week by mandating tougher restrictions, forcing local water agencies that don’t already limit outdoor watering to institute a two-days-a-week maximum. All restaurants are now required to serve water only upon request and hotels must offer guests the option of not having towels and linens laundered every day. A majority of the state’s 415 urban water districts already have drought emergency plans , but the state’s call to action is expected to generate tougher rules and stiffer enforcement statewide. Thursday, Gov. Jerry Brown is expected to announce $1 billion in emergency drought funding. […]

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Shale Producers Have Found Another Lifeline: Shareholders

(Bloomberg) — U.S. oil producers are issuing new shares of stock at the fastest pace in more than a decade, looking to investors for a cash lifeline to pay down debt and keep drilling as crude prices continue to sink. Tapping equity markets has become the best option for companies such as Dallas-based RSP Permian Inc., which announced March 17 it’s seeking to raise as much as $232 million by selling additional shares. Calgary-based Encana Corp. and Noble Energy Inc. of Houston also have issued shares in the past two months to reduce debt. That brings funds raised in the first three months of the year to about $8 billion, more than 10 times the total in the same period last year. As the continued slide in oil prices further crimps cash flows, banks are pressuring these companies to shore up their capital and reduce debt to lower servicing […]

Posted On : Published By : Tom Whipple