The Fish and Wildlife Service last week released a draft plan for the conservation of polar bears as part of an effort to reduce global greenhouse gas emissions. The plan recommends mitigating risks from oil and chemical spills, increased offshore oil drilling and shipping in the Arctic, among other things. Comments on the proposal are being accepted until Aug. 20.
Democratic senators last week missed the facts and made some misleading arguments when they called on President Barack Obama to maintain the ban on crude oil exports, writes Margo Thorning, senior vice president and chief economist for the American Council for Capital Formation. In contrast to their arguments, allowing exports would support job creation and refinery investments, help lower gasoline prices and reinforce national security through free trade, Thorning writes.
A Fish and Wildlife Service permit restricting simultaneous drilling in Royal Dutch Shell's oil exploratory program in the Arctic region is expected to raise drilling costs for the project, according to a source. The approval means that the company's annual operations in the region can last for only about two and a half months, instead of the proposed drilling period of over two years for $1.4 billion a year, the source said. The company still needs one more approval before it can begin its project.
A plan by a House of Representatives panel to tap the Strategic Petroleum Reserve to fund the 21st Century Cures Act is an act of "political expediency" that shows lawmakers' failure and cowardice to fairly address existing budget issues, writes Loren Steffy, managing director at 30 Point Strategies. Liquidating the reserve for such a purpose would deceive taxpayers and hurt domestic oil producers with weaker prices, he notes. Lawmakers should consider such a move only in relation to the energy market -- for the purpose of energy diversification or as part of a wider export strategy, Steffy writes.
Hess said it finalized a joint venture deal with Global Infrastructure Partners to sell half of its midstream assets in the Bakken Shale for $2.68 billion, forming Hess Infrastructure Partners. Proceeds from the sale are expected to help Hess build a foothold in the play and back its future expansion plans, the company said.
BP last week reached an agreement with Alabama, Florida, Louisiana, Mississippi and Texas to settle the damages linked to the 2010 Gulf of Mexico oil spill for $18.7 billion. The deal was the biggest environmental settlement and the biggest civil settlement with an entity ever recorded in U.S. history, according to the Justice Department. BP said its estimated total obligation is now $53.8 billion.
BP's $18.7 billion settlement over the 2010 Gulf of Mexico oil spill could make the oil giant ripe for a takeover bid, analysts say. Company officials have shrugged off talk of a possible acquisition and said they would focus on returning BP to growth. "We'll be able to spend more time on what we do well, which is finding, producing, developing, selling products in oil and gas," said CEO Bob Dudley.
Transportation of crude oil by rail in North America could continue to rise amid a dearth of pipelines, some analysts say. Crude-by-rail shipments in the next eight years could grow by twofold along Canada's East Coast and by threefold in the western part of the country, according to a Canadian Energy Research Initiative report released last month. Cory Garcia, equity research analyst at Raymond James & Associates, said demand for rail persists as refiners along the East and West coasts of the U.S. need light, sweet crude from the Bakken Shale where pipeline capacity is lacking.
SunEdison has started construction of a $420 million wind farm project in Bingham, Maine. The project, which will have 56 turbines, is expected to create 400 construction jobs and will power 65,000 homes when finished. Construction should be completed in 2016.
Domestic crude oil output in April reached its highest level since May 1971 at 9.701 million barrels per day, up 9,000 barrels per day, according to data released Tuesday by the Energy Information Administration. Shale drilling technology has driven the output growth by allowing access to previously isolated oil reserves. Meanwhile, monthly production is expected to decline beginning in June, the agency said.