News From The Oil Patch 3/11/2014
The government has finalized rules for cleaner gasoline in the US. The EPA says the new standards will reduce emissions of a number of different pollutants. Critics, notably the American Petroleum Institute, say the standards won't improve air quality, will add up to nine cents to the cost of a gallon of gas, and increase CO2 emissions at refineries.
What little science there is so far continues to point the finger at underground disposal of wastewater rather than fracking as the cause of a dramatic increase in earthquakes in Oklahoma and southern Kansas. A United States Geological Survey study showed that a quake near Prague, Oklanoma last November, already believed to be caused by wastewater injection, likely caused thousands of aftershocks.
A state securities regulator has ordered an exploration and production company to stop accepting bitcoins as payment for investments in its Texas oil wells. Texas Securities Commissioner John Morgan entered an emergency order on Monday against Balanced Energy LLC, which claimed it was the first energy company to accept Bitcoins. Unlike conventional money, Bitcoins are bought and sold on a peer-to-peer network that lacks central control. But Morgan says the price of digital currency is subject to extreme swings, which could affect the amount of money available for business operations.
Oil traders are facing what Reuters calls a confounding political landscape in Washington. While energy policy has typically moved at a steady pace for much of the past few decades, Washington is now grappling with a host of pressing questions that will affect oil prices: easing a crude oil export ban that could raise domestic crude prices; adjusting ethanol quotas in order to curb gasoline rates and imposing new rules on tank car safety that could slow the nascent oil-rail boom. Greg Armstrong of Plains All American Pipeline told reporters that, if given the choice, he's rather predict the weather.
The oil boom in the Eagle Ford Shale of Texas is driving yet another boom: mothballed refineries that were closed by Gulf Coast competition and cheap international crude oil. The New York Times labels this "a cautious refining revival."
A federal appeals court says BP must abide by terms of a $9.2 billion settlement with victims of the Gulf of Mexico oil spill after failing to satisfy judges that a claims administrator is misinterpreting the deal. The company must resume paying millions of dollars in business-loss claims that were temporarily halted in December while the company fought to block payments not directly linked to the spill. U.S. Circuit Judge Leslie Southwick wrote in the panel’s 2-1 ruling that in light of reading the settlement agreement, that it does not require a claimant to submit evidence that the claim arose as a result of the oil spill.
A federal judge has blocked US courts from being used to collect a US$9 billion ($10.7 billion) Ecuadorian judgment against Chevron for rainforest damage, saying lawyers poisoned an honorable quest with their illegal and wrongful conduct. Judge Lewis Kaplan said Justice is not served by inflicting injustice, and the ends do not justify the means. The judge said it was a sad outcome to have to rule that the Ecuadorian court judgment "was obtained by corrupt means," because it will mean it will likely never be known whether there was a case to be made. Chevron called it a victory for the company and its stockholders.
More calls to regulate oil by rail out of the Bakken Shale in North Dakota, this time from lawmakers in neighboring Minnesota and the Governor of New York. State Representative Frank Hornstein says most of the shipments travel through Minnesota. He plans to release a bill to improve the state's ability to prepare for and fight oil disasters. But the Forum News Service says no decision has been made about how to fund those actions.
New York Gov. Andrew Cuomo is calling on high-ranking federal officials to beef up safety standards for trains that carry crude oil from North Dakota and Canada. The governor cited two oil train derailments that occurred in upstate New York in February that involved neither injuries nor spilled oil.
Missouri Governor Jay Nixon on Monday sent a letter to the Secretary of State urging the State Department to approve the Keystone XL Pipeline in order to boost American energy independence and create jobs. The first leg of Keystone already crosses Missouri. In the letter, Nixon said that "...with the proper oversight and safeguards, these projects can help meet our energy needs, without compromising our responsibility to protect the environment.”
Far less Canadian oil sands crude reached the Gulf Coast by rail last year than the U.S. State Department had been expecting. Reuters reports the data could flavor the final stages of the Keystone XL pipeline debate. In January, the State Department concluded that practically nothing would hamper development of the Canadian oil sands since energy companies could easily move the fuel by rail if TransCanada Corp's pipeline was rejected.
Exxon Mobilexpects its capital spending to fall in 2014, even as the oil company looks to start on a record 10 new projects. Exxon anticipates starting production at 10 major projects this year, including a liquefied natural gas project in Papua New Guinea, and the largest offshore oil and gas platform in Russia.
SandRidge Energy is adding Sumner County to its Kansas drilling program. CEO James Bennett tells investors that the company has 100,000 acres under lease in Sumner County. The company announced plans to drill 100 wells in Kansas in 2014, at a cost of more about $350 million. SandRidge is one of the few large operators who continue to produce in the Mississippian Lime Play in Kansas. Shell, Apache, Chesapeake, and Encana have all left the state.
According to the February Online Job Openings Report from North Dakota’s Job Service agency, the ratio of unemployed people to job openings is .6. That means there is less than one unemployed worker for every job opening. That's actually up from a 0.4 ratio recorded throughout the holiday season. The national ratio for unemployed workers to job openings was 2.9, according to the Job Service report.
Royal Dutch Shell on Friday said construction crew members punctured its so called Ho-Ho pipeline near in southeastern Texas on Thursday afternoon, releasing 364 barrels of crude oil. The company said it shut the pipeline after the leak. Emergency crews and first responders were deployed to the scene and are using absorbent booms to contain the oil.
The company at the center of an alleged fraud that forced Citigroup to cut profits last year won billions of dollars in contracts from Mexico's state oil monopoly over the past decade, even after Mexican officials and private lawsuits raised red flags about the contractor's activities. Oceanografia provided engineering and maintenance services on offshore oil platforms and pipelines. The auditors urged Pemex's internal control office to examine whether Pemex officials improperly changed contracting terms at Oceanografia's request and favored the firm over competitors.