.The Texas Energy Report

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.The Texas Energy Report

Oil industry giants organize to reduce emissions

By Alex Mills

 

October 24, 2019

Thirteen international oil and gas companies have committed $1 billion to reduce greenhouse gas emissions.

The organization, called the Oil and Gas Climate Initiative (OGCI), will support the goals of the Paris Agreement, which will include unlocking large-scale investments in carbon capture, use and storage (CCUS) and supporting new taxes and economic incentive aimed at reducing emissions.

The OGCI member companies are BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental, Pemex, Petrobras, Repsol, Saudi Aramco, Shell and Total. They account for 32 percent of global operated oil and gas production, OGCI said.

The CCUS is designed to help decarbonize multiple industrial hubs around the world, starting with hubs in the United States, United Kingdom, Norway, the Netherlands and China.

“The program seeks to create a commercially viable, safe and environmentally responsible CCUS industry and double the amount of carbon dioxide that is currently stored globally before 2030,” according to an OGCI statement.

The OGCI also wants to build on the industry’s reduction in methane emissions (9 percent in 2018) and to include carbon emissions in hope that future temperature increases will not exceed 2 degrees Celsius.

To complement its methane emissions-intensity target, OGCI seeks to reduce collective average carbon intensity by 2025. The goal will take into account carbon dioxide and methane emissions from members’ aggregated upstream oil and gas operations emissions equivalent in 2017.

“Member companies have developed a baseline and are aligning methodology and assumptions to work towards the collective target. Reducing carbon intensity involves actions including improving energy efficiency, minimizing flaring, upgrading facilities and co-generating electricity and useful heat,” OGCI said…….
 

Capitol Spec: Could Court Order For MQS Documents Turn Up Comms With West Texas Oilman?

Calls for the resignation of Speaker Dennis Bonnen are growing, now including Anderson, Lambert, Parker, Ashby, Stephenson, Raney

 

October 17, 2019

A state district judge has ordered Empower Texans CEO Michael Quinn Sullivan to provide state Democratic leaders with copies of a secret recording that was released this week, along with communications he had with others about a meeting with House Speaker Dennis Bonnen, which Capitol observers speculate includes the possibility of producing emails to West Texas oilman Tim Dunn…….
 

Exploration slows as financial situation tightens

By Alex Mills

 

October 17, 2019

The financial community has developed a negative opinion about the profitability of oil and gas wildcatters who primarily operate as producers of oil and natural gas from shale. A recent story in The Wall Street Journal started this way: “Horrific. Terrible. Abysmal. The worst. Those are terms equity analysts are using to describe investors’ attitude toward energy stocks.”

In addition to declining interest in investing in stocks of publicly-held companies, the Oil and Gas Journal reports negative perceptions have resulted in a reduction of access to external capital, a critical component of the financial life of many shale producers, which has resulted in an increase in mergers and acquisitions.

The production of crude oil and natural gas from shale rock is relatively new, getting its start some 30 years ago in the Barnett Shale just north of Fort Worth. Its success is attributed to new drilling techniques allowing drillers to drill thousands of feet vertical into the Earth and then drill horizontal several thousands of feet more and hit a target the size of a football field.

Shale rock is tight and lacks porosity and permeability. So, new hydraulic fracturing techniques had to be developed to force open the pores of the shale rock and let the oil and natural gas flow into the well bore and to the surface.

All of this was new and very expensive. Even though production increased significantly from these wells, the cost of exploration and production made margins thin in many cases, especially when oil slipped below $60 per barrel and natural gas below $3 per thousand cubic feet (Mcf)…..
 

President Trump Confirms Perry Will Step Down, Cruz Wishes Him Well

Updated to show President Trump confirmation 5:50 pm CDT

 

October 17, 2019

Energy Secretary Rick Perry has told President Donald Trump that Perry will resign, leaving his post “soon,” which Mr. Trump confirmed Thursday evening.

Perry was traveling with the president to Dallas for a rally on Thursday when he shared the news with the President aboard Air Force One.

Upon arriving in Texas, Trump said he has Perry’s replacement in mind, adding he will be making an announcement about it “shortly.”…….
 

Fire “Under Control” Late Tuesday at Texas Co.’s San Francisco Fuel Storage Area

San Francisco-area fire officials said Tuesday night they did not immediately know the cause of the fire or whether there might be any connection to a 4.5-magnitude earthquake Monday night centered north of Oakland in the Bay area … A Contra Costa County official said Tuesday that the earthquake caused two malfunctions at two oil refineries run by Marathon and Shell, with some equipment at the Shell facility “temporarily affected,”

 

October 15, 2019

Local agencies say a fire caused by an explosion is under control on Tuesday night at a fuel storage facility in the San Francisco Bay area managed by Texas-based NuStar Energy LP….
 

Gasoline, electricity prices expected to decline

By Alex Mills

 

October 11, 2019

Consumers can expect a slight decline in energy prices the remainder of this year and into 2020, according to projections from the U.S. Energy Information Administration (EIA).

Gasoline and electricity prices will follow declining prices for crude and natural gas. West Texas Intermediate is expected to average $56.26 in 2019 down from $65.06 ($9.80) in 2018, and decline another $1.83 to average $54.43 in 2020, according to EIA. Natural gas, the largest generator of electricity in the U.S., will average $2.43 per million British thermal units (Btu) during the fourth quarter of this year, which is a decline from $2.56 average in September.

While EIA forecasts softer commodity prices, it is expecting supplies to remain strong.

U.S. crude oil production averaged 11.8 million barrels per day (b/d) in July (the most recent month for which data are available), down 0.3 million b/d from June, according to EIA. Declining production was a result of Hurricane Barry, which disrupted crude oil production in the Gulf of Mexico. The slowing rate of growth in tight oil production reflects relatively flat crude oil price levels and slowing growth in well-level productivity in the Lower 48 states. However, EIA expects growth to pick up in the fourth quarter as production returns in the Gulf of Mexico and pipelines in the Permian Basin come online to link production areas in West Texas and New Mexico to refining and export centers on the Gulf Coast. U.S. crude oil production will average 12.3 million b/d in 2019, up 1.3 million from the 2018 level, and will rise by 0.9 million b/d in 2020 to an annual average of 13.2 million b/d……
 

Rick Perry Subpoenaed; Men Arrested, Ordered to Produce Pete Sessions Documents: Reports

October 10, 2019

UPDATE: This evening, former Rep. Pete Sessions stated, “[I]f I am ‘Congressman One’ I could not have had any knowledge of the scheme described in the indictment or have involvement or coordination of it.”

The Wall Street Journal and now other publications have indicated that Rep. Sessions is the vague “Congressman One” mentioned in the indictment of two men implicated in an alleged Ukraine oil and gas scheme, as explained in the story below.

“I was first approached by these individuals for a meeting about the strategic need for Ukraine to become energy independent,” Sessions added.

“There was no request in that meeting and I took no action. Over time, I recall that there were a couple additional meetings. Again, at no time did I take any official action after these meetings.”

The Hill noted this evening that Sessions wrote a letter to Secretary of State Mike Pompeo in May 2018 calling for the removal of a US ambassador, but he said in the statement that he did so because he had heard that she had been disparaging Trump privately.

The story, filed at 4:33 pm 10/10/19:

Former Texas Governor and current Energy Secretary Rick Perry has been subpoenaed to appear before US House Democrats conducting an impeachment inquiry, while two men who were alleged to have been part of an effort to influence the Ukrainian government — partly in connection with the state oil and gas company — have been indicted, arrested and have now been ordered to produce documents related to a meeting with former Texas US Representative Pete Sessions……..