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Why Cheap Oil Is Bad News for U.S. Gas-Export Hopes

For the past year, many in the United States have been rubbing their hands at the prospect of a huge natural-gas export boom, raising hopes of a flood of cheap and clean fuel being shipped to friends in Europe and Asia. But the long-awaited gas boom has yet to materialize — and with oil prices well below last year’s highs, it might never. At the peak of enthusiasm over U.S. gas exports, more than 30 proposed projects jumped on the bandwagon, with grandiose visions of dispatching tankers full of liquefied natural gas (LNG) from the East Coast, the Gulf Coast, and the Pacific Coast to thirsty markets all around the world. Leading U.S. politicians, from President Barack Obama to House Speaker John Boehner , R-Ohio, all have touted the prospects of Washington turning its energy wealth into geopolitical coin, especially now that Europe is redoubling efforts to reduce its […]

Posted On : Published By : Tom Whipple
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Managing earthquake risks in oil and gas production:

LONDON Underground disposal of waste water produced from oil and natural gas wells has been blamed for triggering thousands of small earthquakes in Oklahoma and a number of other U.S. states since 2009. Heightened seismic activity corresponds closely with the timeframe and location of increased drilling and hydraulic fracturing across the southwest United States, according to the U.S. Geological Survey (“Incorporating induced seismicity in the 2014 United States national seismic hazard model”, 2015). Most tremors have been barely perceptible to humans, but one at Prague in Oklahoma was recorded at magnitude 5.6, enough to cause severe shaking and damage to buildings. The quake swarms have sparked a debate about safety and economic opportunity in states and communities that depend heavily on oil and natural gas production for jobs and income. WASTE WATER INJECTION Most tremors seem to have been caused by re-injection of waste water brought to the surface […]

Posted On : Published By : Tom Whipple
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Permian basin sees first rig increase since oil rout: Baker Hughes

After weeks of idling rigs on slumping crude prices, U.S. oil drillers added rigs to the Permian Basin for the first time this year, industry data showed on Friday. Energy companies increased by one each the number of oil rigs in the Permian basin of West Texas and eastern New Mexico – the biggest and fastest growing U.S. shale oil field – and in the Barnett in Texas. That was the first increase in the Permian since December and the first in the Barnett since March, oil services company Baker Hughes Inc said on Friday. Overall, the number of active oil rigs declined for the 22nd week in a row, but the rate of that decline has slowed in recent weeks, suggesting the collapse in drilling may be coming to an end as prices recover after falling 60 percent from June to March. The number of rigs drilling for […]

Posted On : Published By : Tom Whipple
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Exclusive: Oil on fiery North Dakota train less volatile than limit

WILLISTON, N.D. Crude oil aboard a BNSF train that derailed in North Dakota on Wednesday caught fire even though it was less flammable than required by a state law that took effect last month. Test results sent to federal investigators and seen by Reuters show the state’s new rule may not be stringent enough to significantly reduce the risks of fireballs after derailments of trains carrying crude. In this crash, the crude on board contained about 20 percent fewer volatile gases than regulations mandate. The oil, transported in tank cars owned by Hess Corp, had a vapor pressure of 10.83 psi, according to test results. This pressure is less than the new threshold of 13.7 psi. State regulators have used vapor pressure as a proxy for measuring the amount of flammable gases known as light-ends that are present in crude. Samples of the crude oil involved in this latest […]

Posted On : Published By : Tom Whipple
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Tesla’s Battery Grabbed $800 Million in Its First Week

Photographer: Tim Rue Tesla is already building a 5-million-square-foot battery factory. It’s not big enough. That was the message from Tesla Chief Executive Officer Elon Musk this week while discussing, for the first time, the early response to his new product line of storage batteries designed for use in homes and businesses. The numbers are impressive. In the first few days of reservations since the battery announcement on April 30 , Tesla took orders worth roughly $800 million in potential revenue, according to figures compiled by Bloomberg Business.  If those numbers were realized, it would be almost as much as the company took in from car sales in the entire first quarter of 2015. "It’s like crazy off-the-hook," Musk said during an earnings presentation on Wednesday. "The sheer volume of demand here is just staggering." Before anyone gets too excited, it’s important to note the biggest caveat: reservations don’t necessarily convert to sales. That’s especially true for the […]

Posted On : Published By : Tom Whipple
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America’s Oil Drilling Boom Is Sputtering Back to Life

The oil boom isn’t dead after all. For the first time in five months, a rig in the Williston Basin, where North Dakota’s Bakken shale formation lies, sputtered back to life and started drilling for crude once again. And then one returned to the Permian Basin, the nation’s biggest oil play, field services contractor Baker Hughes Inc. said Friday. Shale explorers including EOG Resources Inc. and Pioneer Natural Resources Co. say they’re preparing to bounce back from the deepest and most prolonged slowdown in U.S. oil drilling on record. The country has lost more than half its rigs since October, casualties of a 49 percent slide in crude prices during the last half of 2014. Futures rallied above $60 a barrel earlier this week, and a sudden return to oil fields would threaten to end this fragile recovery. “You’re inviting a lot of pent-up supply to come back into […]

Posted On : Published By : Tom Whipple
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Rail traffic to resume through N.D. town

Rail traffic set to resume through small North Dakota town where cars carrying Bakken oil derailed. File Photo by Steven Frame/Shutterstock. HEIMDAL, N.D., May 8 (UPI) — Rail traffic is expected to continue through a small North Dakota town at the center of latest oil train debate before the weekend, rail company BSNF said. Six of the 107 cars carrying Bakken crude oil through Heimdal, N.D. caught fire after derailing Wednesday. BNSF said most of the oil still in the derailed cars was removed and rail traffic should continue through the area before the weekend. "BNSF crews are currently working to clean up the area, remove the derailed cars, and repair the damaged track at that location," the company said in a late Thursday statement. Fires associated with the derailment were extinguished Thursday afternoon. The 40 or so residents of Heimdal who were evacuated after the incident were cleared […]

Posted On : Published By : Tom Whipple
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Murkowski wants clarity on condensates

Sen. Lisa Murkowski, R-Alaska, introduces bill that would clarify federal definition of condensate, an ultra-light form of crude oil cleared at times for exports from the domestic market. File Photo by UPI/Molly Riley. WASHINGTON, May 8 (UPI) — Federal law lacks a clear definition of condensate, a light form of oil found in shale and cleared for exports, a bill tabled by U.S. Sen. Lisa Murkowski read. Murkowski, R-Alaska, chairwoman of the Senate Energy Committee, introduced 17 separate energy measures. Among them, S. 1224 seeks to standardize the federal definition and policies regarding condensate . "Many federal agencies have conflicting definitions of what qualifies as ‘condensate’ and how it differs from ‘crude oil,’" a background on the so-called Condensate Act reads. "In common parlance, one man’s ‘heavy condensate’ is another man’s ‘light crude.’" When last year the U.S. Bureau of Industry and Security, a division of the Commerce Department, […]

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U.S. Oil Rigs Fall to 668 in Latest Week

The number of U.S. oil drilling rigs—a proxy for activity in the oil industry—has fallen sharply since prices headed south last year. There are now about 58% fewer rigs working since a peak of 1,609 in October. That hasn’t yet translated into a drop in actual output, even though it has squelched production capacity. Crude-oil futures were recently up about 0.51% to $59.24 a barrel. According to Baker Hughes, gas rigs were down one to 221 this week. The U.S. offshore rig count is at 34, unchanged from last week and down 25 from last year. For all rigs, including natural gas, the week’s drop was 11 to 894.

Posted On : Published By : Tom Whipple
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Oil Jobs Fall To the Lowest Level in More Than a Year

Employment in the oil and gas extraction sector has decreased from a year earlier. One of the areas most affected is North Dakota, where Scott Berreth, a derrick hand for Raven Drilling, works on an oil rig drilling into the Bakken shale formation. ANDREW BURTON/GETTY IMAGES The number of Americans working on oil and gas wells has dried up to its lowest level in more than a year. Employment in in oil-and-gas extraction fell by 3,300 in April to a seasonally adjusted 194,400, t he Labor Department said Friday. That’s the fewest since March 2014 and represents a year-over-year decline for an industry that until recently had been a growth engine for the labor market. The decrease comes while the broader economy added 223,000 jobs to payrolls last month . Employment in the energy-extraction sector reached 201,500 in October. The recent peak, driven by the expansion of hydraulic fracturing, […]

Posted On : Published By : Tom Whipple