What You Should Know in Oil and Gas Today
The Big Story
Energy Transfer told reporters yesterday that it has no plans to shut down its Dakota Access Pipeline, despite an order by an Obama-appointed federal judge, James Boasberg, that it do so within 30 days. As reported at World Oil, the Dallas-based company run by billionaire Kelcy Warren said it’s also accepting nominations for capacity on the pipeline in August. The U.S. District Court for the District of Columbia had ordered the pipeline to be drained by Aug. 5.
“We are not shutting in the line,” Energy Transfer spokeswoman Vicki Granado said in an email, adding James E. Boasberg “exceeded his authority and does not have the jurisdiction to shut down the pipeline or stop the flow of crude oil.”
Thus, the company prepares for yet another legal battle, this one a certain appeal to the DC Circuit Court of Appeals to overturn Judge Boasberg’s decision. It’s important to note that the Dakota Access line has already been subjected to no fewer than three separate environmental impact reviews in two different presidential administrations, and that the basis for this judge’s decision is that he wants yet another such review to be performed.
It is absurd and disgusting that any company has to defend itself in this kind of absurd legal process in the United States of America, and clear signal that the U.S. court system is verging on losing any sense of justice or legitimacy.
On to other stories…
Brouillette is heading home today. Energy Secretary Dan Brouillette, a San Antonio native, is headed back to his old stomping grounds for a roundtable discussion with industry leaders here. The Secretary DOE’s Strategic Petroleum Reserve Big Hill Site in Winnie, Texas, with state and local officials.
A very interesting report in the Wall Street Journal today about the wide variety of views among industry analysts about the direction oil prices could take in the coming years. The Journal quotes one analyst, Trevor Woods, chief investment officer of Ohio-based hedge fund Northern Trace Capital, as predicting that prices could reach as high as $150 per barrel by 2025. The great thing about predicting oil prices 5 years in advance is that, once that distant date arrives, everyone has forgotten that you said that stuff. Anyway, it’s an interesting read.
Hey, remember a couple of months ago when bullish analysts were predicting that natural gas prices could spike up into the $3-4 range this coming winter? Yeah, no one is saying that now. FX Empire analyst Christopher Lewis is now hoping they might run all the way up to … $2 per Mmbtu. Ugh.
Something called RA News has an interesting report this morning about the efforts by the Texas Railroad Commission to figure out a way to better regulate the wasteful flaring of natural gas in the Permian Basin and elsewhere in the state. Not sure who these folks are, but it’s a pretty solid piece if you want to understand the environmentalist perspective on the subject.
This is a big deal. The Denver Post reports that the New Mexico Environment Department issued a major fine of $5.3 million Tuesday against DCP Midstream for what it calls “repeated violations of state air pollution standards.” DCP also received an order to immediately comply with all air permit limits and state and federal air quality laws. The company said it plans to reply shortly.
We’ll close with another bit of positive news, which is that crude prices are holding steady above $40 per barrel this morning despite a rather large crude inventory build of 5.65 million barrels for last week reported by the U.S. Energy Information Administration. Given all of the massive volatility seen over the past few months, it is nice to see the markets responding calmly for a change.
That’s all for today.