Free Republic

HOUSTON – High-horsepower pumps and big hydraulic fracturing trucks, the primary tools used to bust open U.S. shale rock, have carved out parking spaces of their own at the Offshore Technology Conference. They’re an attraction for foreign onlookers interested in the technology that brought a rush of American oil to market. But more and more, they’re a jumping off point for oil producers looking to break open hard sandstone reservoirs found in deeper offshore fields, like at Chevron’s Jack/St. Malo project in the Gulf of Mexico. Offshore producers have fractured conventional wells for decades, but advances in the landlocked U.S....

Monthly rail receipts of crude oil accounted for more than half (52%) of the crude oil supply to East Coast refineries in February. As U.S. and Canadian production of crude oil has increased, crude supply by rail to East Coast (PADD 1) refineries has grown, displacing waterborne imports of crude oil from countries other than Canada, such as Nigeria. While refinery utilization in Petroleum Administration for Defense District (PADD) 1 in early 2015 has been below typical levels, this still marks the first time in EIA's dataset that crude deliveries by rail have accounted for such a high percentage of...

Glen Hann and his wife traveled from Newfoundland to western Canada’s oil fields eight winters in a row, returning to this former fishing town in the spring with income they could never hope to earn closer to home. Then, this past December, Mr. Hann’s employers told him to stay home. Mr. Hann is among the thousands of Newfoundlanders who have traveled west over the past decade to work in Canada’s booming oil sands, a trek that has become one of North America’s longest commutes and has supported communities in some of Canada’s poorest eastern provinces. Now, falling oil prices are...

The meteoric rise in U.S. oil production has ended, easing a global glut and driving a rebound in crude prices from below $50 a barrel, according to crude trader and hedge fund manager Andrew J. Hall. “We have now reached a turning point,” Hall said in a letter Friday to investors in Astenbeck Capital Management LLC, his commodities hedge fund. Growing demand and supply pullbacks “rendered all the doomsday forecasts self-defeating.” Oil production from Texas to North Dakota peaked at almost 10 million barrels a day in February and has been falling since then, Hall wrote. A drastic reduction in...

New safety rule on crude tank cars is coordinated through the US and Canada, likely to increase industry costs. With an emphasis on enhanced tank car construction and braking standards, U.S. and Canadian transportation officials have released a new rule to boost the safety of crude by rail in North America. “Our close collaboration with Canada on new tank car standards is recognition that the trains moving unprecedented amounts of crude by rail are not U.S. or Canadian tank cars – they are part of a North American fleet and a shared safety challenge,” said U.S. Transportation Secretary Anthony Foxx...

The Gulf of Mexico’s Paleogene play, also known as the Lower Tertiary, has been described as the scene of a 21st century “gold rush” for the energy industry. It also has been characterized as an innovation rush. Both are true. The Lower Tertiary is estimated to contain between 14 and 40 billion barrels of oil—worth as much as $2.4 trillion at $50-$60 per barrel. Compared with total recent U.S. reserve estimates of 29 billion barrels, the scale of this ultradeepwater frontier is tremendous. The size of the Lower Tertiary prize is huge, but so are its challenges: water depths of...

ubai Electricity and Water Authority (Dewa) has opened the bids it has received for the first phase of the Hassyan clean-coal power plant, which is based on the Independent Power Producer (IPP) model. The first phase of the 1,200MW project is expected to be operational by 2020. Four global bidders have been shortlisted after opening the bids. The agency said in a statement on Saturday that the bids will be evaluated and the best bid will be selected based on the criteria developed by the advisory committee that oversees the project. Dewa previously extended the bid deadline for the first...

Ford Motor Co. says the 2016 F-150 pickup will be available with a 5.0-liter V8 engine that can run on compressed natural gas or propane, part of a growing lineup of CNG vehicles from the Dearborn, Mich.-based automaker. Ford’s commercial vehicle customers, in particular, have been asking for more trucks and vans that can run on compressed natural gas because it lowers their fleet operating costs and reduces greenhouse gas emissions. CNG sells for an average of $2.11 per gallon of gasoline equivalent, as of April 30, 2015, and is as low as $1 in some parts of the country,...

Market participants expect the price of Brent to average around $75 per barrel through the rest of the decade, not much above the current level. Spot Brent prices have risen around $20 per barrel from their mid-January low, from $46 to $66, an increase of more than 40 percent. Over the same period, however, futures prices for oil delivered at the end of 2017 have increased just $4.50 per barrel and remain semi-fixed a little over $70. As spot prices have risen, the slope of the forward curve has become flatter, ensuring prices for 2017 and beyond are almost unchanged...

The Alaska Permanent Fund, established using revenues paid to the state by oil and natural gas producers, provides Alaska residents with an annual cash dividend, which is unique among natural resource permanent funds in the United States. In 2014, the annual dividend was $1,884 per resident, more than double the 2013 dividend and the highest since 2008. All Alaska residents receive an annual cash dividend from the permanent fund. The fund was established by voters in 1976, as the extent of Alaska's oil and natural gas resources began to emerge, and retains at least 25% of the royalties that oil...

Saudi Arabia has been making some big moves lately, most notably in its leadership reshuffle, but the country also has raised the number of rigs it has actively drilling for oil and natural gas by 30% since March 2014. James Williams, an energy economist at WTRG Economics, suggests that the Saudis are working toward increasing their oil-production CLM5, -0.65% LCOM5, -0.99% capacity to gain even more leverage over the oil market than they already have as the Organization of the Petroleum Exporting Countries’ so-called swing producer. The concept isn’t totally new, as some media reports also mention Saudi efforts to...

The Navy on Thursday began deploying warships to protect American commercial vessels passing through the Strait of Hormuz against any interference from Iran, which this week seized a cargo ship in the narrow waterway, though which about 20 percent of the world’s oil passes. Military officials said American warships and aircraft would maintain a presence in and around the strait and stay in contact with some American cargo ships traversing the sea lane, which separates the Persian Gulf from the Arabian Sea. But the officials drew a distinction between the new effort, which they characterized as “accompanying” commercial vessels, and...

The oil industry has always had buzz words and unique verbal shorthand. Remember the “Year of the MLP” (2007) and “Drill, Baby, Drill” (2008)? During the last down cycle in 2008-2009, oil executives debated whether the recovery – when it came – would be “V”-shaped or “U”-shaped. That is, a relatively rapid bottoming of oil prices in the former instance, followed by a fairly quick rebound – or, alternatively, a steep falloff of oil prices, a plateau as the market got its bearings and settled out, and then a fairly rapid climb back up the price ladder. It turned out...

Billionaire environmentalist Tom Steyer has a new mission — keeping oil from Canada’s tar sands out of California. Steyer’s NextGen Climate organization released a report Tuesday warning that an “invasion” of tankers and railcars carrying crude from the oil sands could soon hit West Coast refineries, which currently process very little Canadian oil. Steyer, a major Democratic donor who quit his hedge fund to focus on fighting climate change, has risen to prominence as a vocal opponent of the Keystone XL pipeline extension, which would link the oil sands to American refineries on the Gulf Coast. But Tuesday’s report, prepared...

Oil prices hit the highest this year on Wednesday after the first crude stock draw in five months at the U.S. Cushing, Oklahoma hub suggested an oil glut may be starting to ease. Government data showing a smaller-than-expected rise last week in crude inventories throughout the United States also aided sentiment, although some traders felt the market was ignoring bearish elements like higher production. Oil has staged its strongest recovery this month since a selloff that began in June last year. U.S. crude futures are poised to end April up nearly 23 percent and Brent almost 20 percent higher, the...

Like cars, some microbes use oil as fuel. Such microorganisms are a big reason why BP's 2010 oil spill in the Gulf of Mexico was not far worse. "The microbes did a spectacular job of eating a lot of the natural gas," says biogeochemist Chris Reddy of the Woods Hole Oceanographic Institution. The relatively small hydrocarbon molecules in natural gas are the easiest for microorganisms to eat. "The rate and capacity is a mind-boggling testament to microbes," he adds. As Reddy suggests, the microbes got help from the nature of the oil spilled—so-called Louisiana light, sweet crude mixed with natural...

The U.S. could export anywhere between 0.2 trillion cubic feet and 10.3 trillion cubic feet of liquefied natural gas annually by 2040, according to the latest government projection. Where along that spectrum the actual figure lands will be determined by global energy prices and the availability of U.S. natural gas, the agency said in a Tuesday rehashing of projections made in the Annual Energy Outlook for 2015. The wide range of outcomes hasn’t stopped U.S. companies from proposing dozens of new export facilities. While market watchers have said that it’s unlikely all of these facilities will come online, several are...

Oil and gas companies are continuing to pile up debt, a trend some warn could extend the slump in energy prices and hit economies reliant on the sector for growth and tax revenue. Both independent and state-owned companies are involved in the borrowing bonanza, issuing $86.8 billion worth of bonds in dollars, euros and yen globally this year, up 10% from the same period in 2014, according to Dealogic, a data-tracking company. The rise is largely due to a high number of bond sales in Europe, the Middle East and Africa, and in the U.S., where both Exxon Mobil Corp....

As a response to lower oil prices, E&P companies have guided considerable cuts in their 2015 investment budgets. Preliminary budgets indicate a ~20% drop in global E&P investments this year, with shale declining the most. Observing historical trends, Figure 1 shows global investments for offshore and shale oil and gas. During the past decade, offshore investments have increased from ~ US$150 billion in 2005 to ~ US$360 billion in 2014. The growth in offshore investments is a combination of higher activity and higher unit costs (i.e., rig rates). Also over the last 10 years, shale activity accelerated as horizontal hydraulic...

Local governments wouldn’t be able to ban fracking under a bill the Florida House passed. The House voted 82-34 for the bill Monday. It calls for a study of hydraulic fracturing and regulation of the drilling practice. Democrats opposed the bill, saying fracking should be banned in Florida because of the potential to contaminate groundwater.