Read The Full Story Here
“How does this bust differ from the bust in the ’80s?”
I get asked that question quite often, partly because I’m growing old and it shows on my face, and partly because I’ve been in the oil and gas industry since 1979, and people assume — rightly or wrongly — that I know some stuff because of that. I did live through that bust in the ’80s, and it wasn’t fun. I got laid off from a job in 1985 and was out of work for a few months — the only time I’ve been unemployed since I was 16 years old — and that caused me and my wife great financial hardship.
So I do remember those days all too well. To understand why that bust happened, you first have to go back to the oil shocks of the 1970s, when the Saudis and other OPEC nations implemented oil embargoes, first in 1973 and then again in 1979.
Two memories from that period of time stick with me to this day. The first is of filling my mother’s 1972 Pontiac Grand Ville up with gasoline on the day in 1974 when the price of gas at the local Circle K in Beeville, Texas, reached the then unheard of sum of 50 cents per gallon. That was the first time I had ever had to come up with 10 bucks (the aircraft carrier-size Grand Ville had a 26-gallon tank) to fill up a car with gas. I knew I was going to have to start working overtime or get another job if I was going to keep putting gas in that car. The second memory is of sitting at a long-disappeared Texaco station at the corner of Richmond Avenue and Buffalo Speedway in Houston during the summer of 1979, having to wait in a very long line of cars on an odd-numbered day to pay over $1 per gallon for my allotment of gas to fill up my Chevy Caprice. Another 26-gallon tank that was even more costly to fill.
Read The Full Story Here
The history of the oil and natural gas industry in North America is in many ways intertwined with the history of the railroad, which in the mid-19th century became the main means of transcontinental transportation for Americans and Canadians.
As these great railroad systems were constructed across the continent, the companies building them gained ownership of great swaths of land, and, as importantly, obtained ownership of the minerals beneath the land. In the United States, as oil and natural gas began to be discovered across the Midwest and Rocky Mountain states, a good deal of it lay beneath land owned by rail companies like Burlington Northern, Union Pacific and Santa Fe.
These companies all eventually created subsidiaries to manage their oil and gas royalty holdings, and those subsidiaries eventually evolved into some of the country’s largest independent producers: Burlington Resources, Union Pacific Resources and Santa Fe Energy. Those companies are all gone today, having been merged with or acquired by ConocoPhillips, Anadarko Petroleum and Devon Energy, respectively, but their place in history is firmly established.
The growing glut of natural gas on the global market – spurred in part by increased exports of Liquefied Natural Gas (LNG) by U.S. producers over the last year – reminds us of the dynamic nature of the domestic natural gas market, and the role shifting public policies have played into that over the years.
My own frame of reference here begins during the summers of 1977 and 1978, when I earned college tuition money by taking summer jobs on pipeline crews in deep South Texas. In 1978, the Congress and the Carter Administration had become convinced by some really bad science that the U.S. would actually run out of natural gas in a few decades, and thus needed to conserve what little remaining reserves it had on-hand for home heating usage. Acting on this belief, then-President Jimmy Carter signed into law the Natural Gas Policy Act (NGPA) and the Fuel Use Act (FUA), both of which had major impacts on natural gas markets, and both of which inhibited investment in new natural gas-buring infrastructure.
The NGPA discouraged investment in drilling for new natural gas reserves by allowing the federal government to establish ceiling prices producers could receive for various categories of natural gas that were established under the law. The FUA was even more prohibitive on the demand side of the natural gas ledger, prohibiting utility companies from building new gas-fired power plants. The result? A Democratic Administration ironically actively encouraged the building of dozens of new coal-fired and nuclear power plants all over the United States, many of which are still operating, much to the chagrin of today’s climate alarm lobby.
Read The Full Piece Here
As the United States Senate finally begins taking up joint resolutions designed to reverse a handful of regulations implemented during the waning days of the Obama Administration, it’s worth discussing the indispensable role the Congressional Review Act (CRA) has come to play in halting regulatory excess, and more importantly, upholding the rule of law. While the merits of some of the regulatory actions targeted for reversal are certainly arguable, others lie so far outside the governing statutes that their reversal, either by congress or the courts, was almost inevitable from the day of their initial proposal.
Read the Rest Here.
- Desperate to find a means of distracting attention from President Trump’s great speech of Tuesday night, the fake reporters and fake editors at the Washington Post trotted out a fake new “outrage” involving – gasp! – the Russians!!!!!!! The Post ran a story early Thursday morning in blaring headlines designed to make the reader believe that Attorney General Jeff Sessions had personally conspired with Vladimir Putin to somehow fix the election. Naturally, the rest of the fake news media immediately jumped on the story, with congressional Democrats soon calling for Mr. Sessions’ resignation. This is what is known as “coordinating the daily narrative” among the fake news media and the DC Democrats.
- The trouble was, once the air had cleared a bit, it turned out that all there was to this story was that Sessions, in his capacity as a senior member of the Senate Armed Services Committee, had taken a meeting with the Russian Ambassador to the U.S. – at the ambassador’s request – in early September, and then had run into him in an airport terminal shortly thereafter. That’s it. That’s all there was. This is what the fake news media turns into a feeding frenzy when it doesn’t have any actual negative news about the President and his administration to feed upon.
- By the day’s end, Mr. Sessions had done what any responsible Attorney General should do, announcing that, because he did serve as a surrogate to the Trump campaign, he would recuse himself from any investigations the Justice Department might perform into campaign-related matters. It has been so long since the country had an Attorney General who actually would do what he or she is supposed to do in such a situation that all the fake reporters and fake talking heads in the fake news media had no real idea how to react to that action, so they tried to turn that into some sort of scandal as well.
- In the realm of real news, former Texas Governor Rick Perry was finally, at long last, confirmed by the Senate to become the country’s new Energy Secretary by our do-almost-nothing Senate. Now, if someone can just show him to his office, he can hopefully get started on eliminating the agency entirely.
- Meanwhile, in the House of Representatives, Republicans working on the “replace” part of the project to “repeal and replace” the death-spiraling Obamacare have set up a secured viewing room in one of the House office buildings as the only place containing a draft of their plan. The draft can only be viewed with permission from the GOP leadership in the house. Upon learning of this, GOP Senator Rand Paul and one of his assistants hilariously loaded up a copier onto a cart and camped out in front of the room’s door, demanding to be allowed in to make a copy of the draft. He hung out there for an hour or so, but was not allowed in. Bad, bad optics, Republicans.
- A new study out yesterday showed that 88% of the fake media’s coverage of the Trump Administration during its first month in office was “hostile”. All the fake journalists in the fake news media, upon seeing this result, began an immediate search for the heretic 12%. Beheadings and burnings at the stake will no doubt follow shortly. (That last sentence is a joke. I think. The one before it, sadly, most likely isn’t.)
Just another day in Fake News America.
That is all.
Even though the Alpine High resource sits geographically beneath the same land into which previous operators have drilled for many decades, it is in fact a new field in terms of the hydrocarbons being targeted. Because of this, one must view the Alpine High through the same lens used to view major new resource plays like the Eagle Ford Shale in Texas or the DJ Basin in Colorado.
, when operators in that area were drilling test wells involving 5-stage frac jobs and 3,000′ foot horizontal laterals, and were issuing celebratory press releases announcing oil wells that tested at initial flow rates of 1,000 barrels per day (bpd). Today, Eagle Ford operators are drilling wells with 2 mile or more laterals, frac jobs involving 30 or even more stages, and would want to commit harikari if a new well in the fairway of the play tested at only 1,000 bpd.
Read the entire piece here.
President Trump and the House of Representatives are acting on oil and gas issues…: …but the Senate doesn’t appear to have gotten the memo.
In his first six weeks in office, President Donald Trump has issued executive orders on the following actions that impact the oil and gas industry:
- directing the Army Corps of Engineers to expedite the completion of the Dakota Access Pipeline;
- directing the State Department to expedite the cross-border permitting of the Keystone XL Pipeline;
- directing the EPA to reconsider its vastly over-reaching Waters of the United States (WOTUS) rule making, which is currently on appeal at the federal appellate court level; and
- directing the EPA to reconsider elements of the Obama Clean Power Plan.
During those same six weeks, the House of Representatives has taken Congressional Review Act (CRA) votes to reverse the BLM Venting and Flaring regulation, and the BLM Planning 2.0 regulation. In addition, the House has begun the process for reversing the Office of Natural Resources Revenue’s (ONRR) Mineral Valuation Regulation. Upon learning of that effort, ONRR on Feb. 22 suspended planned implementation of that rule, pending congressional action and/or the outcome of ongoing litigation related to it.
Meanwhile, in the United States Senate…the crickets are chirping.
Read the entire piece here.