June 18, 2018
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Lead Stories
Midland Reporter Telegram – June 16, 2018
Pipeline constraints hit WT Sour, Intermediate prices
The pipeline constraints that have sent the differential between West Texas Intermediate-Midland and West Texas Intermediate-Cushing skyrocketing also have impacted West Texas Sour prices.
In recent weeks, companies such as Plains All American and Phillips 66 have set their posted prices for West Texas Sour almost $12 below what they pay for West Texas Intermediate. The posted price for West Texas Sour ended the week at $49.80, compared to $61.50 for West Texas Intermediate, according to Plains All American.
Austin American Statesman* – June 15, 2018
Why Texas officials decided not to levy penalties after pipeline leak
A buried pipeline running across a Fayette County ranch was leaking, and at least 42 barrels, or 1,700 gallons, of liquid gas containing a known carcinogen were seeping into the ground and possibly making their way into the Central Texas water table. The landowner told the company that owned the pipeline of an unusual odor and dying mesquite trees.
Officials with the pipeline giant, Denver-based DCP Midstream, said they would alert state regulatory authorities.
San Antonio Express News* – June 15, 2018
Rash of earthquakes prompts fear of oil boom in Balmorhea
BALMORHEA — When a section of concrete wall recently collapsed at one of the world’s largest spring-fed pools and forced the closure of Balmorhea State Park to swimmers, hearts around Texas skipped a beat.
With the region riding a runaway energy boom, some feared drilling, fracking or seismic activity related to high-pressure disposal wells had caused the pool failure.
Houston Chronicle* – June 15, 2018
Energy companies regain top Chronicle 100 spots
After years in the financial doldrums, Houston’s energy companies re-emerged last year, climbing at last out of the oil crash that had weighed on their finances since 2014. …
Coming in at No. 1 is Westlake Chemical Corp., the chemical and plastics manufacturer, which gave its shareholders a more than 90 percent return in 2017. And rounding out the rest of the list were energy companies such as refiners CVR Energy and Phillips 66, exploration and production company EOG Resources and liquefied natural gas exporter Cheniere Energy. …
Oil & Gas
CNBC – June 18, 2018
US oil slumps as China threatens duty on U.S. crude imports
U.S. oil prices slumped on Monday after China threatened duties on American crude imports in an escalating trade dispute with Washington.
U.S. West Texas Intermediate (WTI) crude futures touched their lowest level since April, falling to $63.59 per barrel before edging back to $63.83 a barrel by 0426 GMT.
Oil Price – June 15, 2018
Rig Count Falters Amid Oil Price Correction
Baker Hughes reported a dip in the number of active oil and gas rigs in the United States today. Oil and gas rigs decreased by 3 rigs, according to the report, with the number of oil rigs increasing by 1, and the number of gas rigs decreasing by 4.
The oil and gas rig count now stands at 1,059—up 126 from this time last year.
Midland Reporter Telegram – June 15, 2018
Five Permian counties drop out of rig count
Several counties this week ceased rig activity in the Permian Basin, according to Baker Hughes data.
Cochran, Hockley, Nolan, Mitchell and Stonewall counties recorded rigs last week but didn’t have any this week, which helped push down the Permian’s basinwide count by four to 476.
Midland Reporter Telegram – June 17, 2018
RRC: Midland leads way for drilling permits, oil completions
The Midland district again dominated monthly Railroad Commission drilling permit and completion statistics.
The commission’s statistics for May show 597 permits to drill oil and gas wells in the Midland district. That number was more than double the next two entiries (San Antonio area and Refugio area) combined. Across the state, there were 1,243 permits to drill oil and gas wells across the state in May.
Rigzone – June 15, 2018
Texas Oil Port to Raise $300 mln for Work to Handle US Shale Export Boom
Port officials on Tuesday are expected to consider $300 million in financing that would prepare the country’s largest oil-export port – Corpus Christi, Texas – to handle a surge in U.S. shale production over the next five years.
International buyers would like more U.S. crude but are unable to get it because of infrastructure constraints along the U.S. Gulf Coast. Terminals originally designed for imports only recently have revamped operations to handle exports including accepting larger tankers preferred by China and other oil buyers.
San Antonio Express-News – June 15, 2018
May marks 23 consecutive months of Texas job growth
Texas employers took on 34,700 additional workers in May, marking 23 consecutive months of job growth and putting Texas in the lead for job creation over the past 12 months.
The statewide unemployment rate held steady at 4.1 percent.
CNBC – June 16, 2018
Saudi Arabia may have gotten blown out by Russia during its first match at the World Cup, but there seems to be no hard feelings between Crown Prince Mohammed bin Salman and Vladimir Putin.
The two leaders met this past week as the Russian national soccer team clobbered Saudi Arabia 5-0 in Moscow. It appears both have agreed to cement the cornerstone of an already deepening energy and economic relationship, even as they look to alter a successful oil production deal that brought them together.
New York Times* – June 16, 2018
An Oil Giant Is Taking Big Steps. Saudi Arabia Can’t Afford for It to Slip.
RAS TANURA, Saudi Arabia — This port, on the calm blue waters of the Persian Gulf, operates with militarylike precision. Black- and red-hulled super oil tankers must ask for permission to load months in advance. Detailed records go back 30 years to trace any vessels that have broken the rules by dumping oil or using substandard equipment. High-tech radars constantly scan for potential troublemakers, like boats sent from Iran. …
The state-run oil giant that operates the port, Saudi Aramco, is the economic force behind Saudi Arabia’s transformation into a regional powerhouse.
Zacks – June 15, 2018
Baker Hughes Wins Cheniere’s Corpus Christi Expansion Deal
Baker Hughes, a GE company recently received a contract from Cheniere Energy, Inc. (LNG – Free Report) to provide turbomachinery equipment for the latter’s Corpus Christi LNG facility expansion. Notably, last month Cheniere announced its intention of moving forward with its South Texas gas terminal’s expansion plans.
Baker Hughes has been awarded the contract through Cheniere’s Engineering, Procurement and Construction partner for the project, Bechtel Oil, Gas & Chemicals, Inc.
Houston Chronicle* – June 15, 2018
LyondellBasell in talks to acquire Braskem
LyondellBasell is in talks to acquire Braskem, a South American petrochemical maker with several plants along the Gulf Coast.
The Houston petrochemical maker announced Friday it has begun discussions with Brazilian construction firm Odrebecht, Braskem’s controlling shareholder.
Houston Chronicle* – June 15, 2018
Anadarko signs on buyers for $20B Mozambique LNG project
Anadarko Petroleum’s $20 billion liquefied natural gas project on the coast of Mozambique is one big step closer to fruition after signing on major buyers on Friday.
The non-binding agreement would see the United Kingdom’s Centrica and Japan’s Tokyo Gas Co. step up to buy 2.6 million metric tons of LNG per year from the large development, which received approval from the Mozambique government in March.
Wall St. Journal* – June 17, 2018
Business Is Booming at the Panama Canal
Ships moving natural-gas and petroleum-product exports from the U.S. are the fastest-growing business for the Panama Canal, with annual revenue from tolls growing more than 20 times over the past two years.
Liquefied-natural-gas shipments from U.S. energy producers in Texas took off in 2016, when the waterway expanded its locks, which allowed ships three times as big as before to cross. The new gates opened up as demand for LNG steadily increased from customers in China, South Korea, Mexico and Japan, mainly for clean power generation.
Utilities
E&E News – June 15, 2018
When the Breeze stops: Retail default hits as summer arrives
The week after Memorial Day wasn’t a normal one for Texas’ celebrated retail power market.
On May 29, the grid operator told a group of industry players that an electric retailer was about to lose its customers. News spread the next day with a wider market notice and some media coverage.
It became personal for me on May 31, when an official-looking email arrived. Then my phone rang.
Courthouse News – June 14, 2018
Nonprofit Condemns Utility Policies That Hurt Immigrants
After a nonprofit scolded 16 cities across the U.S. South about policies that make it difficult for immigrants to get public utilities, at least three have denied that they make service contingent on proof of ID.
Project South, founded in 1986 to help solve social, economic and political issues, brought the issue to a head on June 12 with a volley of letters that called on 16 city mayors to end their policies of requiring that customers show U.S.-issued photo ID and a Social Security number to obtain gas, water and electricity.
Sydney Morning Herald – June 6, 2018
Australia: Too much of a good thing: Solar power surge is flooding the grid
The rising number of solar rooftop installations is creating concerns that too much energy is flooding into the electricity grid, and could cause blackouts as the system struggles to control the excess power.
“Solar spill”, when high levels of energy are generated by rooftop installations in the middle of the day when demand is low, is becoming a problem for Australia’s electricity networks, according to Andrew Dillon, the head of the grid representative body Energy Networks Australia.
Alternatives and Renewables
San Antonio Express News* – June 15, 2018
German company to build 100 MW solar project in Texas
A German company will make its first foray into the Texas solar industry with a 100 megawatt farm in West Texas.
E.ON said last week its West of the Pecos solar project will be located in Reeves County west of Midland-Odessa and should come online by 2020. The project is expected to provide for 700 jobs and consist of more than 350,000 photovoltaic cells.
Houston Chronicle – June 15, 2018
AT&T, the Dallas telecommunications company, is buying 820 megawatts of electricity generated by wind power from NextEra Energy Resources, a Florida utility. The power will come from four NextEra-owned wind farms that are under construction in Texas and Oklahoma.
Three of the wind farms are expected to become operational in December including one that straddles Duval and Webb counties in South Texas, another that adjoins Wilbarger and Hardeman counties in North Texas and one in Caddo County in central Oklahoma. Another wind farm in Hardeman County will be ready in December 2019.
Houston Chronicle* – June 15, 2018
Turbines on the way for $300 million wind farm
The owner of a $300 million South Texas wind farm has put in a turbine order with a Danish wind company to supply 212 megawatts of wind turbines for the project.
Boston-based Longroad Energy made the order from Danish wind turbine maker Vestas for the 238-megawatt Rio Bravo wind farm in Starr County west of McAllen. The turbines will start to be delivers at the beginning of 2019.
Regulatory
KSAT (San Antonio) – June 16, 2018
San Antonio close to exceeding federal air quality standards, which could rock local economy
Air quality affects all of us, and according to the Texas Department of Transportation, San Antonio is on the verge of breaking the Texas Clean Air Act.
Houston/Galveston, Dallas/Ft. Worth and El Paso have already exceeded the allowed level of air pollutants and are in “non-attainment” status, which means exceeding federal air quality standards.
San Antonio, Austin and Beaumont are all close to non-attainment.
Austin Chronicle – June 15, 2018
Point Austin: The Struggle Continues
That was one refrain sung by several dozen demonstrators Monday afternoon in front of the Capitol gates, the latest in a series of nationally linked public actions organized by the Poor People’s Campaign, reinvigorated by the Rev. William Barber from North Carolina. …
Some of the national demonstrations have been marked by civil disobedience – Barber was among nearly 150 people arrested in D.C. last month for blocking the Capitol. Monday’s demo held no such plans, but during the previous week’s protest at the Railroad Commission offices, activists blocked doors and seven people were arrested.
Austin American Statesman* – June 15, 2018
A&M System’s charge at Los Alamos includes improving safety culture
Texas A&M University System officials were thrilled earlier this month when the system and its two partners won the contract to manage and operate Los Alamos National Laboratory, birthplace of the atomic bomb. Now comes the hard part: changing the lab’s culture to improve safety, security and efficiency.
The National Nuclear Security Administration, a semi-autonomous arm of the U.S. Department of Energy that oversees the federally owned lab, declared repeatedly when it requested proposals to run the lab that “organizational culture change” is needed.
Wall St. Journal* – June 15, 2018
China Warns of Corporate Casualties as Trade War Brews
When a group of American executives and other global corporate chieftains met with Chinese Vice President Wang Qishan in late March, they received a stern message about the simmering U.S.-China trade conflict: If tensions escalate, buckle up.
“The message was pretty clear,” said a person who attended. “A lot of companies would become victims in a U.S.-China trade war.”