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In The Oil Patch – Mathusi Pahl (ep. 107)

In The Oil Patch – Episode 107: host Kym Bolado and her cohost Alvin Bailey caught up with Mothusi Pahl, Senior Vice President of Alphabet Energy! Mothusi and his team have taken huge strides in converting oilfield flares into a usable and extremely efficient energy source. You have to hear this interview!

As always, we also have our associate editor of SHALE Oil & Gas Business Magazine, David Blackmon with us to give us pertinent updates concerning the oil & gas industry.

Listen to the Podcast Here

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Gov. Cuomo Proves Pipeline Politics Aren’t Limited To DAPL

As crude oil from the Bakken region began to flow into the Dakota Access Pipeline (DAPL) in mid-April, Reuters carried a story indicating that the largest refiner on the East Coast will no longer be taking delivery of Bakken crude via rail:

“It’s the new reality,” said Taylor Robinson, president of PLG Consulting. “Unless there’s an unforeseen event, like a supply disruption, there will be no economic incentive to rail Bakken to the East Coast.”

Thus, the DAPL has already begun to improve the economics of drilling for and producing oil from the Bakken Shale, whose rig count has begun to rise over the last few months.  And while the aggressive and often-violent protesters who spent half a year opposing the project’s completion would never admit it, DAPL is also already improving the safety of moving Bakken crude out of the basin to be sold and refined.

While rail companies and regulators have moved in recent years to improve the safety aspects of shipping crude by rail following several high-profile incidents, the truth remains that pipelines are far and away the safest means of moving crude oil to market.  Rail will remain a part of the transportation mix for Bakken oil – it represented about 25% of that mix during February of this year – but its market share there will grow smaller in the coming months.  That’s a positive for producers, refiners and the public.

Unfortunately, the good news about oil and gas pipeline safety has apparently not made its way to the governor’s office in Albany , where Andrew Cuomo continues to cost his constituents billions of dollars each year through his efforts to obstruct the building of needed natural gas pipelines in the Empire State.   Gov. Cuomo is of course most famous for orchestrating a statewide ban on hydraulic fracturing, a ban that has denied New Yorkers to share in the riches provided to Pennsylvanians, West Virginians and Ohioans by the massive Marcellus Shale resource, which also extends into Southwestern New York.

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Thank Mother Earth for Oil, Natural Gas and Other Fossil Fuels

[Note:  I posted this piece at Forbes.com on April 22, 2013, but it remains relevant today.]

Today is Earth Day, and it is very likely that the fact that abundant fossil fuels like oil, natural gas and coal, are natural resources, and gifts to humanity from Mother Earth herself  will be lost amid all the frightful doom and gloom predictions that will be launched by environmental activists and repeated by various media outlets.

All the vitriol thrown at these fossil fuels by the environmental community notwithstanding, it is a simple fact that our prosperous, modern, energy-hungry society was made possible by the existence of these fuels.  Without the discovery of and ability to produce fossil fuels, it is likely that mankind would still be mired in a Medieval form of existence, reliant on burning wood for heat, horses for transportation, and still living largely in the dark after nightfall.

But what about wind, solar and nuclear?  The production of modern wind turbines, solar panels and nuclear power plants are extremely energy-intensive enterprises, and are by and large powered by the burning of fossil fuels.  In other words, without the massive energy levels generated by the fossil fuel chicken, the “green” energy eggs would not have been possible.

 

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In The Oil Patch – Omar Garcia (ep. 104)

If you want to keep current on what’s happening in oil and gas in Texas, the “Inside the Oil Patch” program airs every Sunday evening on AM 740 KTRH in Houston, and AM 550 KTSA in San Antonio. The show is sponsored by Shale Magazine, for which I am an associate editor. I do a ten minute segment on most of the shows. The hosts, Kym Bolado and Alvin Bailey, do a great job of putting together high quality guests and very informative shows.

Listen to the Episode Here

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USGS Haynesville/Bossier Resource Estimate Decimates The Notion Of “Peak Gas”

Hey, guess what?  There’s a bunch of natural gas out there along the Texas and Louisiana Gulf Coast!

That’s what the US Geological Survey (USGS) announced on April 13, with its assessment that the combined Haynesville and Bossier shales, sandstones and carbonates contain a gigantic volume of natural gas, which the USGS estimates at a total of 304 trillion cubic feet (tcf) in place.  That represents enough natural gas to supply country’s entire demand for natural gas for about 12 years, just from two formations, and it represents a 330% increase over the agency’s 2010 resource estimate.

As USGS noted, the formations also contain a very large volume of oil and natural gas liquids:

The Bossier and Haynesville Formations of the onshore and State waters portion of the U.S. Gulf Coast contain estimated means of 4.0 billion barrels of oil, 304.4 trillion cubic feet of natural gas, and 1.9 billion barrels of natural gas liquids, according to updated assessments by the U.S. Geological Survey. These estimates, the largest continuous natural gas assessment USGS has yet conducted, include petroleum in both conventional and continuous accumulations, and consist of undiscovered, technically recoverable resources.

The updated estimate is a part of an ongoing USGS program to re-visit many of the largest oil and gas producing basins in the country, in order to create a more accurate picture of the resource available for the nation’s use as we move into the future.  The agency previously released an updated estimate of oil contained in the Wolfcamp formation in the Permian Basin, which I analyzed last November.  This is an important exercise designed to better inform public policy decisions related to energy, especially given the amount of ridiculous mis-information that gets into the media every day, such as the always-present but never correct “peak oil” and “peak gas” theories.

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The Oil And Gas Situation: The Rigs Just Keep On Coming

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Some thoughts on the domestic oil and gas situation as we move into April…

The rigs just keep on coming…:  The industry activated more than 70 additional drilling rigs during the month of March, bringing the total new rigs activated during the first quarter of 2017 to more than 200.  My “bold” prediction as the year began was that it would take four months, not three, for the U.S. industry to bring that number of new rigs onto the market.  So, ok, I was too timid.

Interestingly, more than a dozen of these newly-active rigs have moved into the Haynesville Shale region, which is experiencing a somewhat surprising resurgence of activity, even in the seemingly interminable weak price market for natural gas.  The play’s abundance of pipeline takeaway capacity and proximity to major export facilities are two of the main reasons for this uptick in activity, as detailed by Forbes contributor Jude Clemente in his piece of March 25.

March’s increase in rigs drilling for oil was also less focused on the Permian Basin than in prior recent months, with other basins like the Eagle Ford, the SCOOP/STACK and the DJ Basin also seeing significant upticks in activity.  How much longer this rising rig count can last is anyone’s guess, but it was a major reason why…

 

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President Trump’s Latest Energy Executive Order Is Not Just About Coal

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An interesting facet of the news media’s coverage the past couple of days about President Trump’s Executive Order on Promoting Energy Independence and Economic Growth (hereinafter referred to as “Order”) is that the coverage focused mostly or entirely on the Order’s impacts on the U.S. coal industry and coal-related jobs.  Granted, the Order was cast as the President’s effort to essentially rescind major parts of former President Obama’s “Clean Power Plan”, which most recognize was an effort by his Administration to damage the nation’s coal industry.  But just as the “Clean Power Plan” had impacts and produced major regulatory efforts that reached far beyond the coal industry, President Trump’s newest executive order also impacts other segments of the nation’s energy sector.

Some major aspects of the Order contain significant implications for the oil and natural gas industry as well.

Here is a review of several of them:

  • Section 2 of the Order directs all relevant agencies to “review all existing regulations, orders, guidance documents, policies, and any other similar agency actions (collectively, agency actions) that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources.”   This is a very broad-ranging mandate that, when combined with other aspects of the Order, is likely to create a vast array of proposed regulatory rescissions and reforms.
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State Dept. Approves Keystone XL, World Does Not End. Film At 11.

It’s been a very busy week for pipeline-related matters.  On Monday, I wrote about the Dakota Access Pipeline, and the latest controversy surrounding whether the state of North Dakota will receive any help in paying the huge tab it has incurred policing and cleaning up after the protesters.  On Wednesday I wrote about the fact that anti-oil and gas conflict groups are shifting their focus from an upstream boogeyman (fracking) to a midstream target (pipelines).

Today, the pipeline-related topic moves to the grandaddy of all the conflict lobby’s boogeymen – the Keystone XL pipeline – and the Trump Administration’s announcement that the State Department has issued the cross-border permit necessary for Trans-Canada to proceed with completion of the northern leg of the Keystone system.  Friday’s announcement states that the State Department “considered a range of factors including, but not limited to, foreign policy; energy security; environmental, cultural and economic impacts; and compliance with applicable law and policy.”

The decision by the State Department comes as no surprise, given that it follows an executive order issued by President Trump in January, which instructed State to make a decision on whether to issue the permit after a study period to last no more than 60 days.  It is also in line with Trump’s “America First Energy Plan” which focuses on ways to make the U.S. less dependent on imports of oil from the Middle East.  Keystone XL, if completed, will carry large volumes of Canadian oil sands crude into the United States to be refined and consumed.

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