Energy Tomorrow Blog
Posted September 23, 2014
FuelFix Blog: From steel pipe manufacturers to companies that produce sand and gravel, the U.S. shale boom is buoying businesses far removed from the oil and gas fields, a new study finds.
These companies are benefiting from the huge investments needed to explore, produce, process and transport oil and gas unlocked from previously inaccessible dense rock formations through advances in hydraulic fracturing and horizontal drilling, according to the findings by Houston-based energy analyst firm IHS.
The boom has been most generous to companies working in states with the most oil and gas activity, but the economic boost has also trickled down to steel-makers and machine tool manufacturers based in regions with no production, the report said.
Posted September 22, 2014
Washington Examiner op-ed (Karen Harbert): America's economic recovery is being fueled by energy. Increased natural gas production is at the center of our energy revolution, creating new opportunities at home and abroad.
Not long ago, conventional wisdom was that America’s natural gas production would decline over time. Terminals were planned and built in anticipation of the need to import natural gas from overseas. Now, these facilities are either being converted to export terminals or are idle.
Obviously, things have changed — and for the better. The combination of hydraulic fracturing and horizontal drilling made accessing unconventional oil and gas much easier, safer, and cost effective. More and more formations were discovered, and now, natural gas extracted from shale makes up over one-third of total U.S. natural gas production. Over time, this trend will continue to increase to about half of our natural gas production by 2030.
Posted September 19, 2014
Posted September 18, 2014
Associated Press: A Texas oil and gas boom fueled by hydraulic fracturing and new horizontal drilling techniques has generated a record $1.26 billion this year to support K-12 public education.
The San Antonio Express-News reports (http://bit.ly/1r2AJT0 ) that the Texas General Land Office released the fiscal 2014 figures on Wednesday. Office spokesman Jim Suydam said the boon is due to a rapid increase in drilling on state lands, including acreage on the Barnett Shale and the Eagle Ford Shale.
The money comes from the state's Permanent School Fund, now valued at more than $34 billion. The fund is generated by oil and gas royalties, lease rentals, bonuses and other sources. Only the fund's interest can be spent.
Lease income surged sevenfold in 2014 as compared to 2013, and lease bonus income jumped 86 percent over the same period.
Posted September 16, 2014
Steve LeVine (Quartz): Oil prices continue to plunge today despite the beheading of another western hostage by the Islamic State, tensions between Russia and the West, and mayhem in Libya. As Quartz has reported, one of the main reasons is surging US oil production, which has made up for supply disruption almost barrel for barrel—and is also a bad sign for the leaders of petrostates.
Now we have an estimate of where oil prices might have been absent the American oil boom—a sobering $150 a barrel, former BP CEO Tony Hayward told the Financial Times (paywall).
That’s 55% higher than the current benchmark price of $96.27 that was trading in Asia this morning. If Hayward’s number is right, it means that the US boom is saving the global economy about $4.9 billion a day in oil spending.
Posted September 15, 2014
(Wall Street Journal): Skeptics of the U.S. energy boom say it can't last much longer because it requires drilling an ever-increasing number of wells.
But the boom already has lasted longer than anyone would have imagined just a decade ago and has more room to run. That's because oil and natural-gas wells have become more productive—an unrecognized but potent trend that should keep the fuels flowing.
Posted September 12, 2014
NY Post (Editorial): Despite the years of stalling from Gov. Cuomo and the state Legislature, fracking has still managed to deliver real dividends for New York. Thanks to fracking, the Buffalo Bills are staying put.
The two main reasons the NFL franchise won’t be moving are as follows:
First, Terry Pegula this week won the bidding for the team. Pegula owns professional hockey’s Buffalo Sabres — and thus was seen as the most committed of the bidders to keeping the Bills in their home of 55 years.
Second, the cash the self-made billionaire and his wife used to buy the team (and to invest in Buffalo) comes largely from the fortune he made in fracking.
He’s not the only one profiting. As The New York Times reported this week, the fracking revolution has set off a boom in nearby Ohio, with benefits rippling through the Buckeye State’s economy.
Posted September 11, 2014
Oil & Gas Journal: The US Department of Energy approved Cameron Energy LLC and Carib Energy LLC’s requests for authorization to export LNG to countries that do not have a free-trade agreement with the US. Both applicants had completed reviews required under the National Environmental Policy Act, DOE said.
It gave the Cameron facility in Cameron Parish, La., permission to export LNG up to an equivalent of 1.7 bcfd of gas for 20 years. Carib Energy, a Crowley Maritime Corp. subsidiary, received approval to export up to an equivalent 0.04 bcfd for 20 years from its proposed Martin County, Fla., facility in International Standardization Organization approved containers, DOE said on Sept. 10.
The decision marked the last regulatory hurdle for the Cameron LNG facility and cleared the way for execution of the largest capital project in the history of its sponsor, San Diego-based Sempra Energy, Sempra Chair Debra L. Reed said.
“This landmark project will create thousands of jobs and economic benefits for Louisiana and the US for decades to come, while delivering natural gas to America's trading partners in Europe and Asia,” she said.
Posted September 10, 2014
Reuters: The U.S. government on Tuesday jacked up its forecast for oil production next year by 250,000 barrels per day (bpd) as the boom in shale oil drilling continues to confound expectations of slower growth.
The U.S. Energy Information Administration now expects domestic output to rise to 9.53 million bpd, growing by around 1 million bpd for a third consecutive year, according to its latest monthly short-term energy outlook. A month ago the EIA had predicted output growth would slow in 2015 to 800,000 bpd.
The U.S. shale boom has allowed producers to unlock thousands of barrels of reserves, putting the United States on course to become the largest producer of oil globally, which would dramatically reduce its dependence on imports.
"Rising monthly crude oil production, which will approach 10 million barrels a day in late 2015, will help cut U.S. fuel imports next year to just 21 percent of domestic demand, the lowest level since 1968," EIA Administrator Adam Sieminski said.
Posted September 9, 2014
"The more the US exports crude oil, the greater decline in gasoline prices," the study from The Brookings Institution's Energy Security Initiative claimed. "As counterintuitive as it may seem, lifting the ban actually lowers gasoline prices by increasing the total amount of crude supply, albeit by only a modest amount."
Brookings' finding are nearly identical to those of a May study from energy consultancy IHS which concluded that free trade of crude would cause US gasoline prices to fall 8-12 cents/gal due to the close link between gasoline and world oil prices.
Like IHS, the Brookings study claimed the impact of crude exports on gasoline prices dulls over time, falling from a 9-12 cent/gal drop in 2015 to 0-10 cents/gal by 2025.