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Oil prices rise in response to turmoil in Middle East

By Alex Mills

 

June 27, 2019

 

Oil prices continued to rise last week as tension between the U.S. and Iran escalated sparking fear of declining availability of oil from the Persian Gulf.

Crude oil closed at $59.14 on Wednesday on the New York Mercantile Exchange and $66.26 for Brent, the international benchmark traded in London.

President Trump blamed Iran for attacks on oil tankers that had passed through the Strait of Hormuz and shooting down a U.S. drone over the Gulf. Trump announced last week new and tougher sanctions against Iran.

Iran threatened to shut down all exports through the strait if sanctions were not lifted. Approximately 20 percent of the oil consumed worldwide flows out of the Gulf through the strait.

The Wall Street Journal reported that “RBC Capital Markets forecasts that 21 very large crude carriers (VLCC) will be loaded this month along the U.S. Gulf Coast, well above the monthly average this year of 13 ships and the record of 17 reached in March.”

Day rates for oil tankers have increased along with insurance premiums, the newspaper stated.

The threat of hostile activities against oil tankers in the Persian Gulf has created an increase in demand for U.S. oil exports.

Texas is a leading producer of crude oil, and production continues to rise with some 40 percent of all U.S. production coming from Texas. The Permian Basin of West Texas leads the way accounting for 54 percent of the permits to drill in Texas in May….
 

TXOGA At 100: Texas Oil and Natural Gas Making America Safer and More Secure: News Release

June 26, 2019

 

The Texas Oil & Gas Association released the following column as a part of TXOGA’s year-long celebration of its centennial anniversary.

 

One of the utmost responsibilities of the government – to many, the most important responsibility – is to provide for the common defense. Millions of women and men have answered the call to duty to defend freedom and liberty at home and abroad.

 

Throughout the decades, our nation’s armed forces have had a steadfast partner in the oil and natural gas industry.

 

Today, thanks to the ingenuity, innovation and perseverance of the industry, the United States is less dependent on unstable foreign sources of the energy needed to power modern life. The Texas oil and natural gas industry is at the epicenter of the American energy resurgence that has made this possible.

 

 

 

The role of Texas oil and natural gas in our national security spans generations. For more than a century, the Lone Star State has been producing oil, providing fuel and diesel that powered allied aircraft, tanks and trucks to victory in World War I and World War II.

Of World War I it was said that “The Allies floated to victory on a sea of oil.” It was equally true of World War II, when these words were uttered: “The responsibility which rests upon the petroleum industry…is nothing less than the responsibility for victory.” Indeed, of the 7 billion barrels of oil used by the Allied Forces to win World War II, 6 billion of those barrels came from the United States.

 

Five Petroleum Administration for Defense Districts (PADDs) were created during World War II to monitor fuel supplies and distribution capacity across the country. These PADDs were run by the Petroleum Administration for War, an important cooperative program between the government and the petrolumn industry that was seen as essential to our country’s vast and growing national defense efforts at the time.

Moving fuel quickly and efficiently became a wartime priority. Two pipelines – Big Inch and Little Big Inch – were built to transport crude oil from Texas to refineries in the Midwest and on the East Coast that were humming as part of the war effort.

 

 

Elsewhere, U.S. oil fuel tankers and cargo ships found themselves under constant attack – a serious problem given the crucial role petroleum played in the war. At the time, the President of Cities Service Co., – now CITGO – was a member of the Petroleum Industry War Council which recommended using the Civil Air Patrol for protection duties. During World War II, the Civil Air Patrol flew 24 million miles to safeguard oil tankers and other merchant traffic, and in 2014, Congress awarded the Congressional Gold Medal to Civil Air Patrol members for their role in protecting ships and oil tankers transporting fuel during the war. Today, the Civil Air Patrol is still active, comprised of an all-volunteer fleet that no doubt relies on oil and gas to provide emergency services and disaster relief missions nationwide.

 

Soldiers themselves stay safe at home and abroad thanks to petroleum-based products like medical supplies, computers systems and GPS devices, artillery lubricant, and military uniforms, including the universally-recognized “Army green” dye.

 

Starting in the 1950s, the Space Race played an important role in establishing America as a global leader in technological know-how. It was no coincidence that the Johnson Space Center was located in Houston, the Energy Capital of the World, because oil and natural gas has long powered our nation’s endeavor to reach the moon and beyond. Space shuttle fuel, suits and helmets that protect astronauts in space, and the parachutes that guide safe landings back on Earth are just a few space exploration essentials made from refined petroleum products.

 

On Earth and in space, oil and natural gas production, pipelines and refineries have all worked together for 100 years to make our nation prosperous and secure. Access to the energy that the Texas oil and natural gas industry provides has been and will continue to be central to our defense and security. The importance of this industry in Texas to our nation’s energy security cannot be understated.

 

Life is better because of oil and natural gas. Whether it’s The Battle of Midway, the race to the Moon, or conflicts in the Middle East, and whether it’s 1919, 1942, 1969 or 2019, America and the world are safer and more secure because of oil and natural gas.

www.txoga100.com

Texas expands protections for state’s royalty owners: TIPRO News Release

By Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association (TIPRO)

 

June 25, 2019

 

In a win for Texas royalty owners, earlier this month Texas Governor Greg Abbott signed into law new protections designed to safeguard mineral owners from fraudulent activity and strengthen private property rights.

Royalty owners, who lease the mineral rights beneath their land, represent an important segment of the oil and gas industry, directly supporting growing production of oil and gas across the nation. There are millions of royalty owners throughout the United States, with a large percentage living in the Lone Star State. Over 600,000 Texas households receive billions of dollars in oil and gas royalties each year.

Unfortunately, in recent years, royalty owners in Texas have become increasingly vulnerable to falsified lease offers that cause minerals owners to unknowingly sell a majority of their royalty interests through intentionally deceptive agreements emulating authentic leasing documentation. Under the guise of an offer to “top lease” minerals in exchange for a cash payment, bad actors have been trying to con mineral and royalty owners, a high percentage of which being the elderly and senior citizens, into selling mineral interests rather than properly leasing them. In these situations, the supposed buyer claims that in exchange for the “top lease,” the mineral or royalty owner will receive a cash payment and a 25 percent “royalty.” The owner is then presented with a document intended to mimic an oil and gas lease. However, the document is not a legitimate top lease. Instead, the owner is selling 75 percent of their royalties for as long as the “royalty lease” is in effect. Oftentimes, the goal of such schemes is to try to time the purchases with redevelopment of new horizontal wells and take 75 percent of the owners’ royalty stream for a minimal payment.

House Bill 3838, approved by Governor Abbott on June 10, 2019, amends the Texas Property Code to require mandatory disclosures in offers to purchase mineral and royalty interests in the state of Texas. Under the legislation authored by Texas Representative Ernest Bailes, a document which does not contain the appropriate disclaimers is void. This will allow operators to have title certainty, because if the document does contain the required disclaimer, it would be presumed valid. By requiring the disclaimer, this practice should be greatly curtailed, if not eliminated, because the vast majority of the sales would not occur if the owners knew that it was not a valid lease….
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Produced Water May Provide Relief for Declining Water Supplies in Areas of the US: Ground Water Protection Council Press Release

June 24, 2019
 
The Ground Water Protection Council (GWPC) released today a report that examines current regulations, practices, and research needed to expand the use of produced water, a byproduct of oil and gas production, as a resource….
 

U.S. becomes a net exporter of crude oil

By Alex Mills

 

June 24, 2019

 

Not very long ago, the U.S. imported vast amounts of oil from all over the world. Most of it came from countries that were member of the Organization of Petroleum Exporting Countries and some were not very friendly to the U.S.

Just 10 years ago, the U.S. imported 14 million barrels of oil per day, and produced only 5 million b/d, according to the Energy Information Administration at the Department of Energy.

In March 2019, the U.S. oil imports dropped to 9 million b/d and production rose to 12 million b/d.

This remarkable turnaround has strengthened the nation’s economic position around the world and reduced significantly our vulnerability to countries that might threaten to use the “oil weapon” against the U.S. as used previously.

How did this happen?

Some believe good old American ingenuity was a key factor. Some also attribute it to private enterprise driven by a capitalist system, which often rewards the successes of risk takers….
 

Tillerson’s Russia Ties, Rick Perry’s Disparaging Remarks Featured In Website’s Reveal of Trump Documents

June 23, 2019

 

Axios says a leaker has provided the website with a series of documents used in vetting candidates for important Trump administration jobs, including Rick Perry, claiming the former Texas governor described “Trumpism” in a most negative way….
 

The Art of the Push Poll: American Energy Allliance News Release Responds to Article in The Hill

June 21, 2019
 
As you may have seen, there’s a new poll out from Frank Luntz and the Climate Leadership Council that purports to show widespread GOP support for a carbon tax. Here’s what The Hill reported:

“Prominent GOP pollster Frank Luntz is warning Republican lawmakers that the public’s views on climate change are shifting and that ignoring the issue could cost them important votes at the ballot box.

In a memo circulated to Republican congressional offices on Wednesday, Luntz Global Partners warned that 58 percent of Americans, as well as 58 percent of GOP voters under the age of 40, are more concerned about climate change than they were just one year ago…Luntz Global conducted the online poll of 1,000 voters on behalf of the Climate Leadership Council, which is promoting its own carbon tax and dividend plan. The survey found that GOP voters supported the plan by a 2-1 margin.”

We’ve got some serious doubts.

For starters, check out the wording here:

“Business and environmental leaders are proposing a bipartisan climate solution that charges fossil fuel companies for their carbon emissions and gives all the money directly to the American people through a quarterly check. This new climate solution is called ‘Carbon Dividends’, because all households would receive a quarterly cash payment as part of an effort to solve climate change. Would you support or oppose this plan?”

In layman’s terms, they’re asking: “Would you like fossil fuel companies to send you a big wad of cash?”

For more, read the full response here from AEA President Tom Pyle.