10 Things You Should Know About Oil and Gas Today
The Big Story
In an effort to address the chronic natural gas flaring issue that has given the industry a major black eye over the last 20 years, ExxonMobil rolled out a new initiative focused on the Permian Basin on Tuesday. Working in conjunction with the University of Texas at Austin, Environmental Defense Fund, Gas Technology Institute and Pioneer Natural Resources, Exxon says that Project Astra will involve the deployment of several types of methane-sensing technologies across the Permian Basin of West Texas.
Here’s an excerpt from a piece by Sergio Chapa at the Houston Chronicle:
Costs were not disclosed but the technologies will be evaluated on their ability to operate autonomously while UT researchers will use virtual reality equipment to create a simulation and a minute-by-minute model documenting methane concentrations.
The simulation, expected to be completed by the end of this year, will be used to identify the types and locations of methane sensors that would be most effective in collecting data.
The project comes as environmentalists and others are concerned about flaring, the industry practice of burning excess natural gas at oil wells. Methane is a potent greenhouse gas and the primary component of natural gas.
It is great to see these two big Permian producers taking such a proactive approach to this lingering issue, and the effort increases optimism that an organized industry-wide approach will finally come along.
Meanwhile, the Climate Change alarmist lobby will be thrilled to know that, thanks to the global economic depression created by COVID-19, world carbon emissions are down by 17% year-over-year. That’s according to a new study published yesterday in the journal Nature Climate Change. All the people waiting in food lines right now will no doubt pop the cork on a bottle of champagne to celebrate. Hooboy.
While all of that emissions news was happening, the U.S. Energy Information Administration announced its belief that global crude oil storage levels will peak late in the second quarter. Here’s an excerpt from another report by the very busy Sergio Chapa:
Storage tanks around the world added 6.6 million barrels of oil per day during the first quarter, but that accelerated to 11.5 million barrels per day in the second quarter as shutdown orders related to the coronavirus pandemic stunted travel and economic activity, the U.S. Energy Information Administration said Tuesday.
Those shutdown orders are expected to ease around the world during summer, boosting demand and oil prices, the EIA said.
Starting in the third quarter, the EIA said, global consumption of crude oil, gasoline, diesel, jet fuel and other products will increase for at least six consecutive quarters — reducing inventories and raising prices. The price of U.S. oil was just above $30 on Tuesday.
Speaking of crude oil storage, another report in the Chronicle by – guess who? – Sergio Chapa says that ongoing projects at the Port of Corpus Christi will add another 17 million barrels of capacity there by the end of August. No wonder PortCC CEO Sean Strawbridge likes to refer to his operation as the next Cushing.
Google says that it will “no longer build custom artificial intelligence tools for speeding up oil and gas extraction” going forward. So, hey, now is a very good time to switch to Duck Duck Go, folks.
The price for WTI jumped up by 5% this morning after the release of another bullish crude inventory report by the EIA.
In case you still had any doubts, S&P Global Platts reports this morning that the North Dakota Industrial Commission will follow the leads of fellow regulators in Oklahoma and Texas and do nothing with proposals to regulate oil production in its state.
U.S. Energy Secretary Dan Brouillette is quoted in this piece by the CBS affiliate in New Orleans as saying that DOE has “now contracted to store an additional 23 million barrels in Louisiana. We have room for another 41 million plus barrels of oil and we’re gonna continue filling it up to the very top.” We’ll see.
Finally, in Colorado, a leftist effort to replace the Colorado Conservation Commission with a new, radical regulatory board has come a crapper at the state’s Supreme Court. Excerpt:
The proponents of four ballot initiatives to replace Colorado’s oil and gas regulatory body have withdrawn their request for the state Supreme Court to overturn the Title Board’s decision that denied a ballot title to the measures.
Initiatives 307-310 would have created a new, independent board to perform the duties of the Colorado Oil and Gas Conservation Commission. At its hearing before the Title Board, proponents cited the legislative redistricting commissions that voters approved in 2018 and the state’s ethics commission as templates for a redesigned board with minimal political influence.
It’s always nice to close these things out with a bit of good news.
That’s all for today.