Federal regulators have made a mistake in their decision to allow almost a billion cubic feet of natural gas per day to be exported from New England, according to Sen. Edward Markey, D-Mass. He said allowing gas to be transported by pipeline through the region for export won't benefit residents but will simply treat New England as a production highway.
Oil companies faced with a collapsing market must walk a fine line between cutting expenses to stay viable and maintaining their infrastructure and ability to produce. Big Oil's leaders are taking different approaches to the crisis, with firms such as Chevron and Hess pulling back from more expensive deepwater projects and others using the opportunity to acquire smaller competitors. "Companies want to strike a balance between long and short-cycle investments while maintaining a robust balance sheet to fund their way through the down cycle," said Brendan Warn, an analyst with BMO Capital Markets.
Major natural gas companies in the Marcellus Shale are planning cutbacks in their drilling plans for 2016, which is gloomy news for the construction firms and other companies that depend on their business. Companies including Seneca Resources, Cabot Oil and Gas, EQT, Southwestern Energy and Consol Energy have announced plans to cut capital spending this year. "These severe market headwinds are forcing dozens of energy and supply chain companies to reduce investments, close their doors and lay off hardworking men and women," said Marcellus Shale Coalition spokeswoman Erica Clayton Wright.
Bakersfield, Calif., has a long history with the oil industry and is well-acquainted with its boom and bust cycles. The current slump is tougher than most, however, on Kern County, which claims to produce more oil than any other county in the US. The number of people who held oil and natural gas drilling and extraction jobs in Bakersfield fell 18.5% from December 2014 to December 2015, according to state data. "I'm just hoping a lot of my guys will be able to hang on," said Les Clark, executive vice president of the Independent Oil Producers' Agency in Bakersfield.
Many producers are opting to continue at least some production in anticipation of recovery, according to Wood Mackenzie. The company reports less than 100,000 barrels per day have been shut in worldwide. "Given the cost of restarting production, many producers will continue to take the loss in the hope of a rebound in prices," said Robert Plummer, the firm's vice president of investment research.
As Fairway Energy Partners begins construction on crude oil storage caverns in Houston, the company has discovered the site can hold 1 million barrels more than expected. The extra space was found at naturally occurring salt domes that had been used for brine production, CEO Chris Hilgert said. With the additional space, the site's capacity stands at 11 million barrels.
One of the companies awaiting the proposed Atlantic Sunrise pipeline urged federal regulators to approve the project promptly, calling it "a critical pathway to connect Marcellus production to markets along the Eastern Seaboard." Chief Oil & Gas Senior Vice President of Marketing Andrew Levine said in a letter to the Federal Energy Regulatory Commission that the Transcontinental Gas Pipe Line project "is essential to meeting the market demands for the 2017 heating season."
A $10-per-barrel oil tax proposed by President Barack Obama will be "dead on arrival" when it reaches Congress, said House Speaker Paul Ryan, R-Wis. The tax would help fund investments in clean transportation. "The president should be proposing policies to grow our economy instead of sacrificing it to appease progressive climate activists," Ryan said.
Plummeting oil prices and slowing oil activity in North Dakota have caused losses at a new, $430 million refinery, MDU Resources said. The Dakota Prairie Refinery near Dickinson, N.D. -- a project of MDU Resources and Calumet Specialty Products -- began selling fuel in May but has lost money and also had "down time and equipment challenges," MDU spokeswoman Laura Lueder said.
- Page 1