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Oil
slips towards $76 as demand lags economic recovery
David Sheppard
http://www.reuters.com/article/idUSTRE5B30OK20100204
LONDON (Reuters) - Oil fell toward
$76 a barrel on Thursday as rising crude inventories in the United States
signaled a rebound in U.S. economic activity was failing to translate
into higher demand.
U.S. crude for March delivery
declined 74 cents to $76.24 a barrel at 1228 GMT, while London ICE Brent
shed 76 cents to $75.16.
A government report on
Wednesday showed U.S. crude stockpiles rose by more than expected as
imports jumped and refineries kept operating at unusually low rates.
Although manufacturing has
picked up, U.S. demand for distillate fuel, including diesel, was more
than 9 percent lower in January than last year, according to the U.S.
Department of Energy.
U.S. oil refineries are now
operating at just 77.7 percent of capacity, the lowest recorded level
since 1990 barring hurricane disruptions.
"There was not much
inspiring on the demand side, with total product demand down 2 percent
from a year ago," MF Global analyst Edward Meir said.
"We suspect that the bias
in energy will be lower over the next two days, particularly if the
dollar continues to regain its footing."
The dollar rose to a
seven-month high against the euro on Thursday. Strength in the greenback
often pressures dollar-priced commodities as they become more expensive
for holders of other currencies.
INDUSTRIAL DEMAND
Oil has rebounded by more than
$4 this week from a six-week low of $72.43 on January 29. But prices are
still far from a 15-month high close to $84 reached on January 11 and
well below the record peak close to $150 in July 2008.
Employment data out in the
United States on Friday is expected to provide the next indication of the
pace of economic recovery.
Non-farm payrolls are expected
to have increased by 8,000 in January, the second monthly gain since the
recession started in December 2007, according to 20 forecasters polled by
Reuters.
Some energy analysts, including
Barclays Capital's Paul Horsnell, head of commodities research, remain
upbeat that industrial demand for oil will soon recover.
"The evidence of a
recovery in manufacturing, better trucking indications and a slow turning
of the manufacturing goods inventory cycle all still point to an
improvement in diesel demand that will eventually percolate through to
the data," Horsnell said in an e-mailed note.
Royal Dutch Shell Plc posted a
75 percent fall in fourth-quarter profits to $1.18 billion on Thursday,
as the oil major was punished for falling output and its focus on the
depressed refining and natural gas businesses.
Full year output from Europe's
second largest oil company was down 3 percent, while low refining margins
hit the firm with a $1.76 billion loss at its oil processing arm.
Weak demand has seen the price
of oil products like gasoline and diesel struggle to keep pace with
relatively high crude prices. Crude has been supported during the global
slowdown by expectations booming demand from emerging markets could
outstrip supplies in the future.
State-owned Chinese oil firm
CNPC expects China's crude oil imports to increase 9.1 percent to 212
million tonnes in 2010, or 4.24 million barrels per day, a company report
showed on Thursday.
China's apparent oil demand
will grow more than 5 percent to 427 million tonnes this year, or 8.54
million barrels per day (bpd), the report said.
___________________________________
Twin
Turbine 4000HP
Frac
Pump
Twin
Turbine 2000HP
Pump
Package
Turbine Nitrogen
Pumper
_______________________
Obama
budget seeks to end oil, gas subsidies
Tom Doggett
WASHINGTON
Mon Feb 1, 2010 4:16pm EST
http://www.reuters.com/article/idUSTRE6103RM20100201
WASHINGTON (Reuters) - The
Obama administration on Monday asked Congress for a second time to end
some $36.5 billion in subsidies for oil and gas companies, saying it
would help fight global warming.
In its proposed budget for the
government's 2011 spending year that starts October 1, the administration
said eliminating the subsidies would "foster the clean energy
economy of the future and reduce our reliance on fossil fuels that
contribute to climate change."
The industry tax breaks that
would be lost include: deductions for certain drilling costs, tax credits
for low-volume oil and gas wells and a manufacturing tax deduction for
oil and gas companies.
"We will not continue
costly tax cuts for oil companies," President Obama said.
The changes would take effect
on January 1, 2011, and save $36.5 billion over 10 years, according to
the budget proposal.
This is the second year the
administration has sought to end the subsidies. The move has been
strongly condemned by oil and gas companies, which argue that abolishing
the tax breaks would reduce domestic drilling, cost jobs and increase
U.S. reliance on foreign energy suppliers.
"With America still
recovering from recession and one in 10 Americans out of work, now is not
the time to impose new taxes on the nation's oil and natural gas
industry," said Jack Gerard, president of the American Petroleum
Institute.
Devon Energy Corp spokesman
Bill Whitsitt said repealing the tax breaks would "slow down a real
revolution" in growing natural gas exploration.
"We applauded the
president last week during his State of the Union address for stating his
desire to increase domestic energy production," said Charles Drevna,
president of the oil refiners trade group. "The additional taxes on
our businesses run counter to those stated objectives, however, and will
do nothing to stimulate increased investment."
U.S. Interior Secretary Ken
Salazar disputed the oil and gas industry's contention that removing the
subsidies will slow domestic oil and gas production.
"All you have to do is to
look at record profits in the oil and gas world over last several years
and, in my view, you're going to continue to see a great interest in oil
and gas because it's an essential part of our economy today,"
Salazar said. "I think the oil and gas industry will do just
fine."
The White House justified its
action by pointing out that the United States and other industrialized
countries agreed last year to phase out fossil fuel subsidies, which
could reduce global greenhouse gas emissions by 10 percent.
It also said ending the
subsidies would not have much of a financial impact on energy companies,
as $36.5 billion represents about 1 percent of expected domestic oil and
gas revenues over the coming decade.
While the Obama administration
slammed the oil and gas industry in its budget, renewable energy got a
funding boost.
Research and development for
solar energy was given $302 million, up 22 percent; wind energy received
$123 million, a 53 percent increase, and geothermal energy was given $55
million, up 25 percent.
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Hub
City Industries, a proud supporter of LSU Athletics, announces the most
recent season ticket acquisition....2010 LSU Tiger Baseball!!
Coming
off of a 2009 National Championship, LSU returns a total of four
preseason All-Americans, including the preseason National Player of the
Year Anthony Ranaudo. Add to that the comforts of the new Alex
Box Stadium, and Tiger Baseball is primed to have another successful
year in Baton Rouge.
For
more information on being a guest of HCI
and
cheering on the Tigers to another National Championship in 2010, contact:
Glenn
Dauterive - 337.706.1705
Andrew
Ward - 337.322.0975
______________________________________
TDE
Frac vs. Diesel
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HCI has
mounted 2 such frac units (total 4500 HP) on a single trailer
with a full control house.
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Weights
are w/o trailer. Frac unit is road legal with two on a trailer.
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Massive
exhaust available
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The
turbine produces 27 lbs/sec of 1,000F heat. Use for process work,
including frac fluid evaporation.
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Chopper,
air cargo and highway
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Manufactured
with forklift pockets and is light enough for air transport.
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Bio-fuel,
diesel #2, kerosene, or Jet A
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Bio-fuel
is a proven fuel source for TDE.
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Certified
on #2 diesel and B-100 bio-fuel.
75-85% lower Nox and CO than a diesel.
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Easy
PMs and same day exchanges
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The
turbine only weighs 770 lbs - PMs take 4 hours - field repairs and
engine exchanges done on one shift.
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Life
is reduced when running at max power
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The
turbine has fewer moving parts - designed for harsh military duty and
high cycles.
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Two
TDE frac units were measured on one trailer with ALL equipment
running (14bpm @9000 psi).
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Cannot
achieve rated power
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The
turbine has power to spare to meet pump demand when at high
altitude.
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Targeted oil, gas incentives defended
http://www.2theadvocate.com/news/83511702.html
WASHINGTON Louisiana
Department of Natural Resources Secretary Scott Angelle on Wednesday
criticized the White House for its plan to eliminate tax incentives for
the oil and gas industry.
In his budget released Monday,
President Barack Obama proposed reinstating $36.5 billion in oil and gas
taxes over the next 10 years through elimination of tax incentives. The
impact will hit hard at gas and oil producing states such as Louisiana,
Angelle said.
Angelle said he understands the
Obama administrations desire to move toward so-called clean energy such
as biofuels and renewable sources.
We ought not to do that at the
expense of traditional hydro-carbons, Angelle said.
In introducing the budget, the
Obama administration said the changes would affect about 1 percent of oil
and gas production revenue.
The oil and gas subsidies are
costly to the American taxpayer and do little to incentivize production
or reduce energy prices, the administration said.
The administration proposed
repealing a provision that allows deductions based on wells being
depleted. The Obama administration says it will save the government $10
billion. Doing away with the expensing of intangible drilling costs such
as rigs would generate $7.8 billion, according to the administration.
The biggest impact would be the
repeal of a domestic manufacturing tax deduction for oil and gas
companies adding up to $17.3 billion.
Even with the existing tax
incentives to promote domestic energy exploration and production, our
country still has to import almost 60 percent of our oil, Angelle said.
The Obama moves could affect
Louisiana jobs, Angelle said. The oil and gas industry directly employees
50,000 people in Louisiana, he said.
These tax proposals are a
particular threat to our small, independent producers, Angelle said. That
means producers who drill 98 percent of the wells in Louisiana.
A study on the impact of energy
production, refining and pipeline industry in the state shows that those
industries support more than $70 billion in sales, Angelle said.
Similar proposals by the Obama
administration last year were removed by Congress in the budget process.
______________________________________________
Exxon
Mobil, XTO defend fracing as safety debate continues
JOHN-LAURENT
TRONCHE
http://www.fwbusinesspress.com/display.php?id=11861
Questions surrounding the
hydraulic fracturing process continue to creep up, in media and, most
recently, Congressional testimony regarding the proposed Exxon Mobil
Corp. buyout of Fort Worths XTO Energy Inc., but some analysts believe
natural gas exploration companies have little to worry about when it
comes to increased regulation.
Hydraulic fracturing, fracing
(pronounced fracking) for short, is a decades-old process whereby water,
mixed with sand and chemicals, is injected into a well to break up the
porous shale and allow for enhanced recovery of natural gas. Industry
proponents argue that producing natural gas wells wouldn't be possible
without fracing.
Some of the chemicals used,
according to Chesapeake Energy Corp., include hydrochloric acid, citric
acid, isopropanol, petroleum distillate and potassium chloride. Most
Barnett Shale operators do not list the chemicals used because they
consider the information proprietary. Some producers have called on
drilling services companies to make the information public.
XTO Energy Chairman Bob Simpson
and Exxon Mobil CEO Rex W. Tillerson testified Jan. 20 to the Energy and
Environment Subcommittee on the merits of unconventional shale gas
exploration and production, during a meeting called two weeks ago by Rep.
Ed Markey, D-Mass., chair of the subcommittee of the House Energy and
Commerce Committee.
Markey said Exxon Mobils
planned acquisition of XTO Energy represents a fundamental long-term
shift in domestic energy markets that deserves our close attention.
Natural gas can only play this
role if it is produced in a safe and sustainable way, Markey said in his
opening statement, adding that Congress in a recent spending bill asked
the EPA to study the potential impacts of hydraulic fracturing on
drinking water sources.
During the Jan. 20 testimony,
Rep. Diana DeGette, D-Colo., who has proposed legislation that would
require companies to comply with the Safe Drinking Water Act by
disclosing the chemicals used during fracing, said she supports hydraulic
fracturing so long as its done safely.
A recent Environmental Working
Group report stated that oil and natural gas producers are skirting
federal law and injecting toxic petroleum distillates into thousands of
wells, thereby threatening water supplies while federal and state
regulators largely look the other way.
The House of Representatives
and U.S. Senate bills put forth are HR 2766 and S 1215, respectively, Act.
HR 2766, known as the Fracturing Responsibility and Awareness of
Chemicals Act of 2009, or FRAC Act for short, was introduced in June 2009
by Rep. DeGette. Its Senate companion was put forth by Sen. Robert Casey,
D-Penn. Cosponsors of both bills are Democrats, with the exception of
Vermont Sen. Bernie Sanders, an independent. (The sole Republican, New
York Rep. John McHugh, was a cosponsor of the House bill, but was
appointed by the president to succeed Fort Worth native Pete Geren as
U.S. Secretary of the Army.)
The Safe Drinking Water Act was
passed by Congress in 1974 to ensure a safe drinking water supply by
regulating what can and cannot be injected into the ground. In 2005, at
the behest of then-Vice President Dick Cheney, formerly a CEO of
Halliburton Co., which developed hydraulic fracturing in 1949, the Safe
Drinking Water Act was amended to exempt hydraulic fracturing from
federal regulation through the Energy Policy Act of 2005, which specified
that the definition of underground injection excludes the injection of
fluids or propping agents. (The task force that drafted the fracing
legislation was comprised of energy industry executives, according to a
Washington Post report. Activists refer to the 2005 act as the
Halliburton loophole, much to the chagrin of energyindustry
representatives, who insist there is no exemption, but rather a
clarification of the Safe Drinking Water Acts intention.)
Currently, the oil and gas
industry in Texas reports to the Railroad Commission of Texas, which,
despite its name, has primary regulation over the industry, pipelines,
utility companies and more.
Virginia-based FBR Capital
Markets analysts believe the EPA study, to which Rep. Markey referred,
will take at least a year, making federal oversight of fracing unlikely.
(A provision in the Exxon Mobil-XTO deal could allow the former to
abandon the acquisition should the federal government be handed oversight
of fracing.)
After extensive conversations
with policymakers and industry sources, we believe that there is a much
lower-than-expected likelihood that Congress will take action to curtail
hydraulic fracturing in 2010, according to a report by FBR Analyst
Benjamin Salisbury, a senior associate in energy and natural resources
research-energy policy. In our view, Congress is unlikely to repeal the
Safe Drinking Water Act exemption for hydraulic fracturing before a
government-funded study evaluates the risk.
Despite the unlikelihood of
change, Salisbury states concerns about fracturing create a compelling
narrative that is likely to resonate in communities that could be
affected by fracturing.
Many policymakers believe that
fracturing has already contaminated drinking water and that the SDWA is
an appropriate measure to protect communities, as hydraulic fracturing is
becoming increasingly common and taking place closer to large population
centers, Salisbury writes.
In his report, Salisbury
references a recent study conducted for the U.S. Department of Energy by
Advanced Resources International that estimates compliance costs for
federal regulation of fracing at more than $100,000 per well.
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