Posted May 14, 2015
Wall Street Journal: After slashing production for months, U.S. shale-oil companies say they are ready to bring rigs back into service, setting up the first big test of their ability to quickly react to rising crude prices.
Last week, EOG Resources Inc. EOG, -0.08% said it would ramp up output if U.S. prices hold at recent levels, while Occidental Petroleum Corp. OXY, +0.93% boosted planned production for the year. Other drillers said they would open the taps if U.S. benchmark West Texas Intermediate CLM5, -0.88% reaches $70 a barrel. WTI settled at $60.50 Wednesday, while global benchmark Brent LCOM5, -0.13% settled at $66.81.
An increase in U.S. production, coupled with rising output by suppliers such as Russia and Brazil, could put a cap on the 40% rally in crude prices since March and even push them lower later in the year, some analysts say.
“U.S. supply could quickly rebound in response to the recent recovery in prices,” said Tom Pugh, a commodities economist at Capital Economics. “Based on the historical relationship with prices, the fall in the number of drilling rigs already looks overdone, and activity is likely to rebound over the next few months.”
Posted April 28, 2015
New analysis of the performance of oil and natural gas stocks in public pension funds shows the importance of a healthy energy sector to the futures of millions of Americans – as well as the misguided nature of efforts to force institutions to end investments in oil and natural gas.
The first strengthens our country’s economy and makes more secure the future for a broad swath of people – starting with retired teachers, police officers and firefighters, among others – while the second most likely would do harm to a lot of regular Americans. ...
“In short, returns on state pension funds from investments in oil and natural gas companies provide strong earnings for public pension retirees, including America’s teachers, firefighters and police officers, according to the study,” said Kyle Isakower, API vice president of regulatory and economic policy, who briefed reporters during a conference call.
Posted April 21, 2015
The theme of this year’s CERAWeek mega-conference in Houston is “Turning Point: Energy’s New World.” It is a new world, with the United States producing more energy from oil and natural gas – the lead fuels of the U.S. and the world’s economies – than any other country. Just a decade ago few could have imagined the possibilities.
Posted April 14, 2015
The U.S. Energy Information Administration’s (EIA) new Annual Energy Outlook for 2015 contains a number of stats, charts and projections, but you could boil them down to a couple of important points.
First, oil and natural gas are and will continue to be the foundation of an all-of-the-above energy approach that’s key to continued U.S. economic growth, energy security and overall security. EIA says oil (36 percent) and natural gas (27 percent) supply 63 percent of America’s energy now, and EIA projects they will supply 62 percent in 2040 (oil 33 percent and natural gas 29 percent). This is because oil and natural gas are high in energy content, portable and reliable. They’re the workhorse fuels of the broader economy, making modern living possible as fuels and as the building blocks for a number of products Americans depend on every day. America is and will be dependent on a variety of energies, but oil and natural gas are and will play leading roles.
The great news is the U.S. is in the midst of a revolution in domestic oil and natural gas production, leading to a second big takeaway from EIA’s report – that domestic output is and will continue to reduce U.S. dependence on imported energy.
Posted April 3, 2015
A couple of data points and some observations on energy security.
First data point: The U.S. Energy Information Administration (EIA) reports that last year the United States enjoyed the largest volume increase in crude oil production since record keeping began in 1900. That’s right, the largest increase in 115 years!
Production of crude (including lease condensate) increased during 2014 by 1.2 million barrels per day to 8.7 million barrels/day. EIA says that on a percentage basis 2014’s output increased 16.2 percent, the highest growth rate since 1940.
You can thank shale and fracking.
Posted March 24, 2015
Last week’s release of the federal Bureau of Land Management’s new hydraulic fracturing rule suggests it’s time to update an infographic we posted last summer on the administration’s regulatory march that could impede America’s energy revolution.
Unfortunately, the administration’s plans for energy regulation aren’t encouraging – not if you truly grasp the historic opportunity that surging domestic production of oil and natural gas is providing the United States.
We’re talking about the complete rewrite of America’s energy narrative, from one of scarcity – limiting America’s economic possibilities and overshadowing its national security concerns – to one of abundance in which the U.S. is more self-sufficient, more prosperous and more secure in the world.
We call that historic, revolutionary, a true renaissance in American energy.
Posted February 26, 2015
The president’s Council of Economic Advisers (CEA) understands the significance of the U.S. energy revolution quite well – reflected in the energy chapter of its recent 2015 Economic Report of the President.
The chapter should be widely read by policymakers, from the president and Congress on down, because it notes the role of surging domestic oil and natural gas production in the ongoing energy revolution. From there it’s possible to identify needed policies for the future.
Posted February 14, 2015
Some time ago the Keystone XL pipeline debate stopped being a discussion of energy infrastructure and whether the privately financed project was in the national interest. Thank Keystone XL’s opponents, who detached the debate from fact and scientific analysis to better serve their purposes.
Keystone XL’s most ardent foes readily acknowledged as much. They said that for them the pipeline was a symbol to be used in pursuit of political power. As one anti-pipeline activist put it: “The goal is as much about organizing young people around a thing. But you have to have a thing.”
Symbolism over substance, politics over the greater public good? Too often that’s the way it’s played Inside The Beltway. But at some point political power needs to give way to actual power, and public policy should be grounded in our energy reality, not symbolism. It should be fact-based and consider the impacts on the daily lives of real people, not narrow ideological agendas.
Posted February 2, 2015
Taking a look at the president’s new budget request for the Interior Department, we see the administration asking for $13.2 billion, an increase of nearly $1 billion over the enacted funding level for the current fiscal year.
Now take a look at data from Interior’s Office of Natural Resource Revenue, which tabulates federal revenues from energy developed in federal areas onshore and offshore.
It’s a lot of information, but check the bottom line: For fiscal year 2013, revenues from oil and natural gas developed in federal areas totaled about $12.9 billion. For FY2014 the total was about $11.7 billion. Federal revenues from oil and natural gas development in FY2014 were about $1.2 billion less than in FY2013.
Interestingly, the amount of lost revenue is just about equal to Interior’s requested budget increase for FY2016. In other words, Interior lost $1.2 billion in revenue from 2013 to 2014 and basically is looking to taxpayers to fill in the gap in the next budget.
Posted January 15, 2015
Charting some of the latest Bureau of Land Management (BLM) data on federal oil and natural gas activity – which mostly shows continuing decline.
First, BLM issued fewer new oil and natural gas leases in fiscal year 2014 than in any year since FY1988. That year 9,234 new leases were issued, a number that fell to 1,157 in FY2014. Last year’s number was a retreat from FY2013, when 1,468 new leases were issued.
Other indicators also show declining oil and natural gas opportunity in areas controlled by the federal government.