TransCanada will continue to seek approval for building the Keystone XL pipeline in spite of speculations that President Barack Obama will reject the project, said President and CEO Russ Girling. Demand for the pipeline "remains high as consumers continue to use more and more gasoline refined from barrels of crude oil," he said. However, the company has not made any decision on whether it will use a North American Free Trade Agreement provision to press for a federal decision, Girling said.
Congress has begun considering the Strategic Petroleum Reserve as a source of funding, rather than as an aid to national security, observers say. Lawmakers in July unveiled two bills that would raise nearly $15 billion from selling off 180 million barrels of oil from the stockpile. They are "starting to look at the SPR like it's free money. And there's a race to see who can grab it first," said Robert McNally, founder and president of The Rapidan Group.
The derailment of a Bakken crude train in Montana last month has prompted observers to doubt the effectiveness of North Dakota's vapor pressure standard. Statoil, the shipper of the crude, said it complied with the standard of 13.7 pounds per square inch, and the accident did not result in ignition; however, a 2013 accident in Casselton, N.D., which involved a vapor pressure of below 11 pounds per square inch, resulted in an explosion. Philip Rinaldi, partner and CEO at Philadelphia Energy Solutions, said recently issued federal rules on railcars have a greater likelihood for minimizing such accidents, compared with vapor pressure standards.
Using a hybrid organizational approach to supply chain management has allowed upstream oil and natural gas companies to have an average of over 45 fewer supply chain full-time equivalent workers, according to a PricewaterhouseCoopers report. Such companies were found to have improved efficiency in terms of strategic FTEs, spend under formal contracts, average cost savings targets per year and inventory values. Companies who also make supplier selection decision with a supply chain organization had about 1,000 fewer suppliers than those who did not, the report found.
The Securities and Exchange Commission should reassess the financial risk disclosures by offshore oil and natural gas drillers, particularly those operating in Arctic waters, ranking members of the House Natural Resources and Financial Services Committees wrote in a letter to the agency last week. "Full disclosure of risk is essential to good decision-making by the public, and without it, our markets cannot function properly," Rep. Alan Lowenthal, D-Calif., said in a statement.
Oil producers' productivity and cost-reduction efforts may drive prices to settle at about $50 per barrel by 2020, said Michele Della Vigna, managing director at Goldman Sachs. He said, "Deflation is accelerating from a cost perspective. Efficiency is improving in all the mature regions and productivity is sharply improving in almost all the shale places in the U.S."
The Environmental Protection Agency on Sunday released a rule requiring a 32% carbon dioxide emissions reduction for power plants from 2005 by 2030, higher than the 30% target originally proposed. "We're disappointed and discouraged that they [the administration] seem to be ignoring the fact that natural gas has greatly reduced emissions," said Marty Durbin, president and CEO of America's Natural Gas Alliance. Different industry groups are also looking to file lawsuits against the rule.
Sen. Bill Nelson, D-Fla., said last week that he will use all procedural means to block legislation that would lift the moratorium on drilling in the eastern Gulf of Mexico if the bill advances to the Senate floor. The legislation, which recently cleared the Senate Energy and Natural Resources Committee, would also allow crude oil exports and provide offshore revenue sharing for coastal states.
Lifting the ban on U.S. crude oil exports would lead to an average 8-cents-per-gallon drop in domestic gasoline prices through a surge in crude output, according to an IHS study. The study reaffirms that concern about a potential price hike at the pump as an effect of crude exports "is unfounded," said Kurt Barrow, vice president of oil markets and downstream for IHS.
The Senate Energy and Natural Resources Committee on Thursday passed legislation that would repeal the ban on crude oil exports, expand offshore drilling, expedite review of liquefied natural gas exports and create offshore revenue sharing for states. "Free trade in energy will allow America to harness the full economic opportunities created by our energy revolution," said Louis Finkel, executive vice president for government affairs at the American Petroleum Institute. Both chambers of Congress should also "quickly send this important legislation to the president's desk," Finkel said.