Archives for March 2017

Activists attempt to link unrelated incidents to stymie offshore energy

March 29, 2017 by Justin Williams

Alaska Journal of Commerce | March 28, 2017 | Randall Luthi

Companies that work in any offshore industry understand the seriousness of their work and take extra precautions whenever possible to preserve the waters they do business in. That’s why it’s frustrating when environmental activist groups attempt to mislead the general public about offshore industries and the important business they do.

It has become common practice for environmental non-governmental organizations, or ENGOs, to distort small events in an attempt to convince people that all offshore activity is unsafe.

No one is more familiar with such tactics than the offshore energy industry. ENGOs frequently target offshore oil and gas operations and use minor incidents as justification for why the offshore energy industry should be stopped entirely. One such example is currently taking place in the waters of Alaska’s Cook Inlet.

An independent operator, Hilcorp LLC, detected a small natural gas leak in one of its 8-inch pipelines in Cook Inlet and immediately reported it to the appropriate regulators. Due to the current ice conditions, the company cannot safely send divers to repair the leak at this time.

The company has stated that their actions are dictated by safe operations and environmental considerations. In the meantime, the company has lowered the pressure of the line and is conducting a variety of monitoring activities to ensure that the leak has minimal impacts to the environment.

Unfortunately, activist organizations are seeking to use this Cook Inlet incident as justification for why the company should not be allowed to operate in other offshore areas and attempting to convince the public that any form of offshore energy development is hazardous. Nothing could be further from the truth.

These overzealous recriminations are hollow, but dangerous; especially when they catch the attention of large ENGOs who exploit the incidents to achieve their national goals. In this case, Cook Inletkeeper’s dramatic over-exaggeration of the incident has caught the attention of national groups such as the Wilderness League and Inside Climate News.

These organizations have now inserted themselves into public discussion of the incident and are attempting to influence the regulatory outcome. Groups such as Greenpeace and the Sierra Club use these devious playbooks as well — both groups have highlighted minor local incidents in an attempt to achieve wider objectives and incite regulatory change.

Make no mistake, incidents of any size should be avoided and given immediate attention. That’s why response plans are imperative for companies who work in the offshore energy industry. The company being targeted by activists in Cook Inlet had a response plan in place, and carried it out immediately upon discovering the leak.

Read the full op-ed here.

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

March 22, 2017 by Justin Williams

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.”

###

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

March 21, 2017 by Justin Williams

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.”

###

ABOUT NOIA

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

March 7, 2017 by Justin Williams

Reuters | 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?

March 7, 2017 by Justin Williams

InsideSources | 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.