August 16, 2018
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Lead Stories
Houston Chronicle* – August 15, 2018
Local economists declare the end of Houston’s oil bust
The Greater Houston Partnership has declared the end of the oil bust.
The majority of Houston’s largest energy companies reported profits in the second quarter as U.S. crude oil prices topped $70 a barrel, the organization reported, and bankruptcies within the industry have slowed considerably since their 2016 peak. Capital spending on exploration this year is expected to reach the highest level since the start of the recovery.
All that, the organization says, spells the end of Houston’s fifth energy downturn in the past 40 years and precipitates faster job creation throughout the local economy. Already, companies are hiring at the fastest rate in almost five years.
Law.com – August 15, 2018
Texas Judge Greenlights Securities Fraud Class Action Against Exxon, Rex Tillerson
A Texas judge has left alive nearly all of a federal class action accusing Exxon Mobil Corp. and former CEO Rex Tillerson of securities fraud related to its alleged misstatements on the value of oil and gas reserves and the potential costs of paying carbon taxes, which ultimately led to its stock plummeting by 20 percent, erasing billions of dollars in value.
Ruling on Exxon Mobil’s motion to dismiss, U.S District Judge Ed Kinkeade of Texas’ Northern District Court struck portions of two expert opinions attached to the amended complaint, but said the plaintiffs sufficiently pleaded their allegations that the energy giant knowingly kept its stock inflated by refusing to write down the value of its assets, even as competitors were downgrading their own values as the price of oil began to crater in 2014.
KGBT (Harlingen) – August 15, 2018
Construction on liquid gas facilities at Port of Brownsville delayed
The installation of liquid natural gas pipelines at the port has been a process several years in the making. But in the past week, two companies had their applications withdrawn.
“We just choose to withdraw temporarily or indefinitely until they get us the information,” said Kimberly Older, chief regulator with the Army Corps of Engineers’ Galveston division. “That is not pending on our workload. It’s nothing negative against any applicant.”
New York Times* – August 14, 2018
Gillis, McBride: Here’s How to Cut Greenhouse Gas Emissions Without Taxing Them
Every indication is that these emissions-pricing plans will keep failing, even if Democrats manage to seize the House in November. But a different approach might stand a better chance in Congress — one that would focus on building more clean energy, rather than taxing emissions. This could be accomplished by setting a national clean-energy standard.
This policy would require the share of American electricity from low-emitting sources to increase steadily over time.
Oil & Gas
CNBC – August 16, 2018
Oil rises as China, US set for trade talks, but markets weary of slowing demand
Oil prices on Thursday recouped some of the previous day’s losses after Beijing said it would send a delegation to Washington to try to resolve trade disputes between the United States and China that have roiled global markets.
Brent crude oil futures were at $71.03 per barrel at 0455 GMT, up 27 cents, or 0.4 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 5 cents at $65.06 a barrel, held back somewhat by rising U.S. crude production and storage levels.
Houston Chronicle* – August 15, 2018
Texas oilfield services companies file more than half of US oilfield bankruptcies
More than half of the oilfield services companies that sought bankruptcy protection in the United States over the past three years filed their petitions in Texas.
Oilfield services companies filed a total of 167 bankruptcy petitions between the first quarter of 2015 and the first quarter of 2018 and 86 of them were filed in in Texas, according to the law firm Haynes and Boone which tracks energy-related bankruptcies.
E&P – August 15, 2018
DUC, Abnormal DUC Counts Rise in Permian
The Permian Basin’s inventory of drilled but uncompleted (DUC) wells continues to swell amid increased drilling activity as operators work their way through cycle times.
But infrastructure bottlenecks in one of the world’s most active basins are playing a role in the rising number of “abnormal” DUCs, or wells that remain uncompleted longer than the typical four to seven months it usually takes an operator to complete a well, according to Artem Abramov, vice president of shale analysis for Rystad Energy.
S&P Global Platts – August 15, 2018
US Gulf of Mexico lease sale suggests oil companies are thinking more long term
Results from Wednesday’s US Gulf of Mexico lease sale [with $178 million in winning bids] suggest that oil operators are once again starting to think long-term, selecting acreage in frontier plays that may not pay off for a decade or more.
Bidders in Lease Sale 251 appeared more willing to focus on deepwater exploratory prospects than in the last couple of auctions, when companies chose acreage for its proximity to infrastructure and near-term production prospects, Mike Celata, regional Gulf director for the US Bureau of Ocean Energy Management, said.
Inside Climate News – August 15, 2018
Water Use In Fracking Soars — Exceeding Rise in Fossil Fuels Produced, Study Says
As the fracking boom matures, the drilling industry’s use of water and other fluids to produce oil and natural gas has grown dramatically in the past several years, outstripping the growth of the fossil fuels it produces.
A new study published Wednesday in the peer-reviewed journal Science Advances says the trend—a greater environmental toll than previously described—results from recent changes in drilling practices as drillers compete to make new wells more productive.
CNN – August 15, 2018
Big Oil is racing to pump all the oil out of Texas
Oil executives are betting they can maximize their chances of success by working together.
The recent deals “signal a clear shift in the US shale industry towards consolidation as players seek operational and capital efficiencies,” analysts at research firm Rystad Energy wrote in a report on Wednesday.
The boom in the Permian has sparked some concerns that the shale industry could be overextending itself once again. It was just a few years ago that excessive shale production caused oil prices to crash around the world. Dozens of US oil companies filed for bankruptcy.
Houston Chronicle* – August 15, 2018
Truckers asleep at the wheel as diesel price shock creeps closer
Every time Chuck Paar makes the over 500-mile round trip from his home in Mt. Jewett, Pennsylvania, to Buffalo and Syracuse, New York, his 18-wheel tractor trailer carries 25 tons of sand or cement and burns about $265 of diesel in one day. That’s up from as little as $166 for the same route two years ago, and the increased cost of fuel is squeezing already thin industry profit margins.
It’s about to get worse.
Houston Chronicle* – August 15, 2018
Fewer than 1,500 gallons of oil spilled into Galveston Bay in 2017, a report released Wednesday stated — a spot of good news for Texas’ largest estuary, which churned with more than 90,500 gallons the previous year.
“Oil spills have been declining since 2003,” said Lisa Gonzalez, president and CEO of the nonpartisan research group, Houston Advanced Research Center. “We got through 2017 without a large oil spill in the bay.”
Houston Chronicle* – August 15, 2018
TechnipFMC sues McDermott for trade secret theft
TechnipFMC is suing rival McDermott International and its new chief operating officer for the alleged theft of trade secrets that Samik Mukherjee brought with him when he switched companies.
TechnipFMC claims that Mukherjee downloaded thousands of sensitive and confidential documents the day before he resigned his executive vice president position at TechnipFMC to accept the second-in-command role at McDermott. The lawsuit claims McDermott is already winning work based on some of the sensitive information.
Forbes – August 15, 2018
Lynch: If Turkey Catches Pneumonia, Will The Oil Market Catch A Cold?
Contagion isn’t just for people. Financial markets are being roiled by the collapse of the Turkish Lira, as President Erdogan does his impression of King Canute, trying to hold back a tide of bearish sentiment. Unfortunately for him, global markets are no more obedient than the tide was for Canute (aka Knut), and the lira has dropped 40% so far this year against the U.S. dollar, creating serious fears about the broader economic impact.
Could this be rather like the 1998 Southeast Asian recession, which was a contributing factor in the oil price crash that year, when prices touched $11, albeit it briefly. Given that Turkey uses only 1 million barrels per day of oil, an economic collapse in that country would not seem important to global petroleum markets and prices.
Oil Price – August 15, 2018
Oil Demand Growth Starts To Weaken In Asia
According to shipping data quoted by Reuters, the combined oil imports of China and India—the countries solely responsible for buying 12 percent of the world’s oil—were 500,000 bpd lower in July compared to the average combined imports of 12.4 million bpd in January to June this year.
China’s crude oil imports in July rose for the first time in three months, but were still at their third lowest monthly level so far this year due to the weakened crude demand from the small independent refiners, the so-called teapots, who grapple with higher taxes and waning margins.
Bloomberg News* – August 15, 2018
Shipping-Fuel Rule Change Cuts Demand for Canadian Oil
As if pipeline bottlenecks weren’t enough, Canadian heavy oil producers are facing a new barrier to marketing their crude.
New rules limiting the amount of sulfur allowed in shipping fuel is expected to cut demand for both high-sulfur fuel oil and the sour crude that yields it. In Canada, that could extend — or worsen — the biggest price slump in nearly five years.
S&P Global Platts – August 15, 2018
Libyan crude oil output jumps to two-month high above 1 million b/d
Libya’s crude oil recovery has seen output rise above 1 million b/d for the first time since early June, sources close to production said Tuesday.
The latest increase came mainly from the Sharara oil field where production has moved above 250,000 b/d, up from 218,000 b/d last week, the sources said.
Bloomberg News* – August15, 2018
Billionaires Druckenmiller, Soros Throw Weight Behind Oil Rally
The recovery in the oil industry is attracting some of the most recognized billionaires in money management.
Stanley Druckenmiller’s Duquesne Family Office bought 1.68 million shares in VanEck Vectors Oil Services ETF in the second quarter, the third-biggest addition to its portfolio in the period, a regulatory filing showed Tuesday. It also added the Energy Select Sector SPDR Fund. George Soros’s hedge fund bought energy stocks including Chevron Corp.
Utilities
Athens Review – August 14, 2018
Commissioners save county money on electricity rate
Henderson County has benefitted for several years of decreased electricity rates, and the trend is expected to continue.
Commissioners authorized Jack Bailey of Texas Power Consultants on Tuesday to lock in a rate at the current price, about 3.9 cents per kilowatt hour.
Greentech Media – July 30, 2018
‘Electrification of Everything’ Would Spike US Electricity Use, but Lower Final Energy Consumption
Widespread deployment of EVs, heat pumps, and other electric technologies could increase U.S. electricity consumption by nearly 40 percent by mid-century, according to a new government report.
The report, the second in the National Renewable Energy Laboratory’s Electrification Futures Study series, analyzes the demand-side impacts of a transition to electricity in transportation, residential and commercial buildings, and industry through 2050.
Power Magazine – August 1, 2018
Agreements Sealed for the World’s Biggest Nuclear Plant
The massive project to build six EPR reactors at the Jaitapur site in Maharashtra, India, received a significant boost in late June as GE and French utility EDF signed a strategic cooperation agreement that sets out who will provide the supply of key equipment and services.
In a joint statement, the companies said the agreement lays the foundations for a long-term partnership concerning construction of the conventional island on each of the six reactors. It was an important step in implementing the Industrial Way Forward Agreement, which EDF inked with India’s state-owned nuclear operator, Nuclear Power Corp. of India Ltd. (NPCIL), in March.
The Hill – July 31, 2018
Warner: America must get serious about nuclear energy and national security
To start with the obvious: 99 percent of our military bases rely on the electric grid. Increasingly, that grid relies on just-in-time deliveries of fossil fuel, reliant on far-flung networks of pipes, rails and barges. America’s nuclear plants keep 18 months to two years of fuel on site, and are hardened against natural and man-made threats.
And today our military doesn’t have weapons, it has weapons systems — systems that are based on extensive infrastructure.
Alternatives and Renewables
Austin American Statesman* – August 11, 2018
Ross: I’m Georgetown mayor. We raise a glass to renewable energy
I want to thank the American-Statesman for publishing the Texas Public Policy Foundation’s editorial concerning Georgetown’s move to 100 percent renewable energy. The city of Georgetown has been fortunate to receive coverage from across the world regarding our energy portfolio. One analysis shows that the move to renewables has garnered over 2.1 billion impressions around the globe, which is equivalent to a $20 million advertising campaign.
It’s refreshing to get some coverage that challenges the overwhelming support we have received. Our community started making the move to renewable energy in 2008. At that time, the city had a goal of 30 percent renewable energy by 2030.
Wall St. Journal – August 15, 2018
SEC Sends Subpoena to Tesla in Probe Over Musk Tweets
Federal regulators have subpoenaed Tesla Inc., TSLA -2.57% ramping up an investigation into Chief Executive Elon Musk’s tweet last week that he had secured funding to take the electric-car maker private.
The subpoena from the Securities and Exchange Commission seeks information from each of Tesla’s directors, according to a person familiar with the matter. It isn’t known what information is being sought.
Pittsburgh Post Gazette – August 15, 2018
Battery firm Axion files for bankruptcy
Axion Power, a New Castle-based company that has promised for 15 years to crack the code of large-scale battery storage technology, filed for Chapter 7 bankruptcy last week. It plans to liquidate its assets.
The company decided to liquidate after a major deal with a Chinese firm it had been pursuing since 2015 fell through, according to its attorney, Michael J. Henny.
Regulatory
Community Impact Newspaper – August 15, 2018
As lake levels drop, LCRA undergoes review that could lead to legislative changes
The Lower Colorado River Authority is in the midst of its first sunset review, which could result in the Texas Legislature mandating the entity make changes to its performance and mission.
Organizations such as nonprofit Central Texas Water Coalition see the sunset process as an opportunity to invoke change.
Houston Chronicle* – August 15, 2018
Report: EPA readies Clean Power Plan replacement
The Environmental Protection Agency is getting ready to replace the Obama administration’s program to reduce greenhouse gas emissions coming from power plants, Politico is reporting.
The new climate proposal for coal-burning power plants, expected to be released in the coming days would give states wide latitude to write their own modest regulations for coal plants or even seek permission to opt out, according to the document and a source who has read other sections of the draft.
E&E News – August 13, 2018
Pennsylvania: How the boom billionaires made their mark on state politics
By the time the 2010 governor’s election rolled around, the shale-drilling boom had started to overhaul Pennsylvania’s economy and its politics.
The first successful wells in the Marcellus Shale field were less than 5 years old, but the gas industry was already spreading to more than half of Pennsylvania’s counties, giving it a bigger footprint than the coal industry.