Gulf Lease Sale Reflects Improving Market, Industry Optimism Under New Administration

RandallLuthi_web

For Immediate Release: Wednesday, March 22, 2017
Contact:  Nicolette Nye, (202) 465-8463, nicolette@nullnoia.org

Gulf Lease Sale Reflects Improving Market, Industry Optimism Under New Administration

 Washington, D.C. – NOIA President Randall Luthi issued the following statement following today’s Central Gulf of Mexico Oil and Gas Lease Sale:

 “We are very pleased with the results of today’s Central Gulf of Mexico lease sale, which not only reflect an improving offshore oil and gas market, but also optimism for increased opportunities for offshore leasing, exploration and development under the Trump administration.

“Today’s sale demonstrates that the offshore oil and gas industry remains committed to staying in U.S. waters and underscores the importance of offshore development to the U.S. economy and domestic energy security. The offshore oil and gas industry provides tremendous economic and energy benefits for our nation. Over the years, offshore lease sales in the Gulf of Mexico have contributed billions of dollars to the U.S. Treasury ($80 billion between 2005 and 2014) and recently that revenue stream began flowing to Gulf of Mexico states as well. What’s more, the Energy Information Agency (EIA) predicts that U.S. oil production in the Gulf of Mexico will reach record highs in 2017, which will continue to boost Gulf state economies.

“We wholeheartedly agree with the administration that responsible offshore oil and gas development and expanded Gulf production are critical to America’s economic and energy security, and we congratulate Interior Secretary Zinke and the Bureau of Ocean Energy Management on today’s successful sale.”

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ABOUT NOIA

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  NOIA’s mission is to secure reliable access and a fair regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources in an environmentally responsible manner. The NOIA membership comprises about 300 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance, and renewable energy.

Tomorrow’s Central Gulf of Mexico Lease Sale Could Surprise

RandallLuthi_web

For Immediate Release: Tuesday, March 21, 2017
Contact:  Nicolette Nye, (202) 465-8463, nicolette@nullnoia.org

 Tomorrow’s Central Gulf of Mexico Lease Sale Could Surprise

Washington, D.C. – NOIA President Randall Luthi today issued the following statement in advance of tomorrow’s Central Gulf of Mexico Lease Sale 247:

 “Tomorrow’s Central Gulf of Mexico lease sale is the final sale of the 2012-2017 OCS Oil and Gas Leasing Program, but it is also the first offshore lease sale under the Trump administration, and that makes it quite noteworthy.  While Central Gulf Lease Sales have traditionally drawn strong interest from industry, that has not been the case over the past few years, due to extended low commodity prices, increased Federal regulation, and the previous administration’s obvious lack of support for domestic fossil fuel production. However, with commodity prices and market conditions improving over the last year, and under a new administration that better understands the strategic importance of a strong oil and gas industry, the results of tomorrow’s sale may surprise.

“The offshore oil and gas industry has continually demonstrated a commitment to providing tremendous economic and energy benefits for our nation, despite the fact that unwise energy policies have closed over 94% of U.S. offshore areas to leasing and exploratory activities.

“The offshore energy industry remains forward looking. Tomorrow’s lease sale presents a new opportunity to safely produce reliable and affordable oil and natural gas for American consumers, bolster the U.S. economy and increase domestic energy security.  NOIA looks forward to the sale results.”

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ABOUT NOIA

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  NOIA’s mission is to secure reliable access and a fair regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources in an environmentally responsible manner. The NOIA membership comprises about 300 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance, and renewable energy.

Exxon to invest $20 billion on U.S. Gulf Coast refining projects

Reuters-Logo-FontReuters | March 6, 2017 |  Ernest Scheyder

Exxon Mobil Corp (XOM.N), the world’s largest publicly traded oil producer, said on Monday it would invest $20 billion through 2022 to expand its chemical and oil refining plants on the U.S. Gulf Coast.

The investments at 11 sites should create 35,000 temporary construction jobs and 12,000 permanent jobs, Chief Executive Darren Woods said in a speech at CERAWeek, the world’s largest gathering of energy executives.

Some of the expansions began in 2013, but the scope of the project is now growing and the timeline extended, Exxon said.

Woods ran Exxon’s refining division before becoming CEO two months ago, and the new spending benefits a sector with which he has significant experience and comfort. Investments in the high-margin projects should help ease concerns from Wall Street that Exxon’s growth potential – especially in oil and gas exploration and production – is sliding.

“Exxon Mobil is building a manufacturing powerhouse along the U.S. Gulf Coast,” Woods said. “These businesses are leveraging the shale revolution to manufacture cleaner fuels and more energy-efficient plastics.”

The investments across Texas and Louisiana will take advantage of cheap shale gas to make plastics and other chemicals for export. The strategy builds on prior steps Exxon and peers, including Dow Chemical Co (DOW.N), have taken in the wake of the American shale expansion, which sharply cut production costs.

“The supply is here. The demand is there. We want to keep connecting those dots,” Woods said.

Exxon last month pledged to boost this year’s spending by 16 percent to expand operations, especially in shale production, after the company posted a better-than-expected quarterly profit, helped by rising oil prices and lower costs.

U.S. President Donald Trump, who tapped former Exxon CEO Rex Tillerson for secretary of state, praised the company’s spending plans as an example of “a true American success story.” Most of the permanent jobs are expected to pay more than $100,000 per year.

Read the full story here.

How Large Are American Proven Oil Reserves?

Inside-SourcesInsideSources | March 6, 2017 | Erin Mundahl

In 2012, then-President Obama often repeated the line that the U.S. had only 2 percent of the world’s proven oil reserves, while American consumption far outpaced that. It was part of his argument for alternative fuels and green energy. Five years later, with gas prices much lower, the line seems bizarre. Was Obama wrong about the size of the proven oil reserves?

Throughout much of the 1940s, the United States had around 22 million barrels in proven oil reserves. Seventy years later, American proven oil reserves continue to hover at around 22 million barrels, despite decades of drilling. It’s not that once dry wells are filling up again. Rather, it comes down to the definition of proven oil reserves.

When it comes to oil, a large difference exists between proven resources and proven reserves. Resources implies the quantity of raw material in the ground, which can only be estimated. Reserves, however, is a commercial term.

“The term [proven reserves] is applied to known reservoirs where there is a probability of at least 90% that oil or gas can be produced in commercial quantities,” says William O’Keefe, former COO of the American Petroleum Institute.

“The fact that an area contains proven reserves does not guarantee production in economic quantities,” he cautioned.

This means that the size of American proven oil reserves can fluctuate dramatically on the basis of shifts in prices.

In December, the U.S. Energy Information Administration released trailing data on proved oil and natural gas reserves in 2015. The report shows the dramatic effect falling oil prices had on proved oil reserves. While oil production continued to increase in 2015, the sudden fall in prices made wells with higher extraction costs suddenly unprofitable.

Read the full story here.

NOIA Applauds Confirmation of Interior Secretary Zinke

RandallLuthi_webFor Immediate Release: Wedneday, March 1, 2017
Contact:  Justin Williams, (202) 465-8464, jwilliams@nullnoia.org

NOIA Applauds Confirmation of Interior Secretary Zinke,
Hopeful for Recommitment to Offshore Opportunities

 Washington, D.C. National Ocean Industries Association President Randall Luthi today issued the following statement on the Confirmation of Interior Secretary Ryan Zinke.

“The National Ocean Industries Association (NOIA) congratulates Secretary of the Interior Ryan Zinke on his bipartisan confirmation.  Secretary Zinke brings the promise of dawn after eight years of darkness for the offshore energy industry.  His confirmation testimony laid out a sensible and fair path forward for the United States to not only maintain, but increase its energy leadership.  That path leads to the return of a truly broad-based energy policy, using both traditional offshore energy sources, such as oil and natural gas, and non-traditional sources, such as wind.

“NOIA encourages Secretary Zinke to promote policies that both maintain access in current offshore development areas and increase the offshore areas available for sensible oil and natural gas exploration.  As the prior administration left office, it withdrew vast swathes of the Atlantic and Arctic oceans from leasing consideration, leaving almost 94 percent of the outer continental shelf off the table before even really looking to see what resources may lie there.  The prior administration’s answer to meeting the growing world energy demand appeared to be based almost solely upon renewable energy.  While renewable energy is undoubtedly a part of our energy future, Secretary Zinke promises a more realistic, rational and robust approach that acknowledges that oil and natural gas will still meet nearly 80 percent of the world’s energy needs in 2040.

“NOIA hopes Secretary Zinke will immediately begin work on a new five year offshore leasing program that addresses the recent illogical and shortsighted Atlantic and Arctic withdrawals.  We also hope he will reestablish the Department’s commitment to safe and sensible seismic surveying to determine the extent of our nation’s oil and natural gas resources in those areas.  We also support efforts to continue to develop offshore wind in a logical and sensible manner.  NOIA looks forward to working with Secretary Zinke on these issues and more in the coming years.”

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ABOUT NOIA

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  NOIA’s mission is to secure reliable access and a fair regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources in an environmentally responsible manner. The NOIA membership comprises about 300 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance, and renewable energy.

Offshore Energy Can Power U.S. Economic Growth

RandallLuthi_webFor Immediate Release: Tuesday, February 28, 2017
Contact:  Justin Williams, (202) 465-8464, jwilliams@nullnoia.org

Offshore Energy Can Power U.S. Economic Growth

Washington, D.C. – NOIA President Randall Luthi released the following statement after President Trump’s address to the joint session of Congress:

“As President Trump begins work on his ambitious agenda, it appears that efficiency and cost cutting are major themes throughout much of the federal government. Those of us in the energy producing industries say welcome to our world. While low commodity prices and overly burdensome regulations devastated job growth in the energy sector during the last two years, it also resulted in greater operational efficiency, particularly in the offshore industry. Ironically, as the administration begins to unravel some of the regulatory weight and uncertainty, it is also the energy industry that can assist the overall economic goals outlined tonight. Not only does a more robust offshore energy industry mean thousands of potential new jobs and billions in new government revenue, it also means lower manufacturing costs, more consumer savings and more energy security. In other words, America’s offshore industry provides a platform for inclusive economic growth and security for all Americans.

“However, there is much work to be done, and undone, before we can unlock our offshore resources. Due to federal actions of the past eight years, nearly 94 percent of our nation’s offshore resources are off limits to oil and gas exploration and development. In the few areas that do remain open, costly regulations that provide no safety or environment benefits are pricing companies out of doing businesses. Because of these challenges, the U.S. will need to adopt an “all of the above” policy approach in order to tap our offshore potential.

“NOIA hopes President Trump and his administration will begin work on a new five year offshore leasing program that addresses the illogical Atlantic and Arctic OCS withdrawals. NOIA also hopes that the administration continues their examination of many of the politically-driven regulations and decisions that were issued during the previous administration. In addition, it is imperative that we allow for safe and modern offshore seismic surveys if we are to have an accurate assessment of our nation’s oil and natural gas resources.

“NOIA stands ready to work with President Trump, his administration and Congress in helping fuel the American economy. Together, and with policies in place that increase, rather than decrease, access to federal offshore areas, we can strengthen our economy, keep energy affordable for American consumers and further our position as the global energy leader.”

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ABOUT NOIA

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  NOIA’s mission is to secure reliable access and a fair regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources in an environmentally responsible manner. The NOIA membership comprises about 300 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance, and renewable energy.