Under a new bill making its way through the state Legislature, oil producers would be able to resume work, for a two-year, initial exemption period beginning in July, on inactive wells that had been deemed inactive prior to July 1, 2010. During that initial period, oil and gas production from the wells would face a lower severance tax. The (Lafayette) Advertiser reports that the legislation filed by second-year lawmaker Rep. Stuart Bishop, R-Lafayette, may prove to be one of the most important bills of the 2013 session, as it would benefit both state coffers and the interests of the state's oil and gas industry. House Bill 474 essentially restores some incentives for oil and gas producers to return to work on inactive wells, which produce no or little oil and, hence, no revenue for the state or the producer, says Don Briggs, president of the Louisiana Oil and Gas Association. Previous state severance tax exemptions lapsed in 2010. Oil and gas industry representatives say the...
Prices paid by U.S. importers fell in April for the second straight month, pushed lower by another decline in imported petroleum. The Labor Department says import prices—which when decreasing help keep inflation in check—fell 0.5% last month compared with March, when prices had fallen 0.2%. It was the largest decline since a 0.6% drop in December. Imported petroleum products decreased 1.9% in April. Excluding petroleum, import costs dropped only 0.1%. Import prices have now fallen 2.6% over the 12 months ending in April. The prices charged by U.S. exporters, meanwhile, fell 0.7% in April compared with March. The decline was propelled by a 2.2% drop in U.S. farm exports. Over the past year, export prices have decreased 0.9%.
Pipelines in North America spilled three times as much crude oil as trains for comparative distances over an eight-year period, the International Energy Agency reports in a study it based on U.S. Department of Transportation data. However, as Bloomberg reports, the Paris-based energy adviser also says that the risk of a train spill was six times greater than a pipeline incident over the period between 2004 and 2012. The calculation included an estimate that the average load of crude carried by train travels 1,000 miles, which the organization says is conservative, since most Bakken crude, for example, is shipped 1,700 miles from North Dakota to St. James, La. The analysis of the eight-year period didn't include a spill of 715 barrels of crude from a derailment in Minnesota in 2013 that was more than double the amount spilled by trains in the previous four years, the report notes.
Interior Secretary Sally Jewell delivered a blunt message to some of the nation's top oil industry executives during an inaugural meeting with the group on Wednesday: Don't cast blame our way. "I did poke them a little bit about not throwing the regulators under the bus or blaming us when there is actually shared responsibility, perhaps, when something doesn't move forward," Jewell tells The Houston Chronicle. "We don't want to be in the way of development, but we have a job to do protecting the assets of the American people." The closed-door gathering at the Offshore Technology Conference included top representatives from oil companies Anadarko, BP and Marathon Oil, as well as contractors FMC Technologies, Halliburton, Transocean and Schlumberger, and the trade groups American Petroleum Institute and National Ocean Industries Association. Some oil industry leaders have loudly complained about the pace of regulatory changes coming from the nation's capital and pleaded for a...
In the frantic days and weeks after BP's Macondo well exploded on April 20, 2010, blame was focused on a piece of equipment to which, under ideal circumstances, people don't give much thought. Bulky, heavy and designed for redundancy rather than beauty, blowout preventers are the last line of defense against a runaway well. But the collection of valves and shears sitting atop the BP well on the bottom of the Gulf of Mexico failed to stop the flow of oil in 2010. Three years later, Pete Miller, CEO of National Oilwell Varco, still bristles at the suggestion that the blowout preventer was at fault. Never mind that his company didn't make it—competitor Cameron International built the device—and wasn't involved with the Macondo well. As The Houston Chronicle reports, Miller has staked a piece of his company's future on expanding production of blowout preventers and exporting them around the world. So he takes criticism of the blowout preventer used on the Macondo well...
As of this morning, no injuries have been reported following an overnight explosion of an oil tank in the Denham Springs area, The Associated Press reports. The occupants of about 30 to 35 homes in the area of the explosion were evacuated as emergency rescue responders worked to contain fire at the site. Livingston Parish Office of Homeland Security and Emergency Preparedness Director Mark Harrell tells The Times-Picayune that one of two oil holding tanks at the scene ruptured and caught fire. He says it wasn't known why the tank ruptured. The second oil tank had not exploded but was bulging from the heat. Harrell says the fire has been contained in a 200-square-foot area. He added that evacuated residents will be allowed to return to their homes once the fire is out.
Community groups in Louisiana and Texas have filed a lawsuit against the U.S. Environmental Protection Agency accusing it of using "outdated and inaccurate formulas" to report emissions from refineries and chemical plants. The Louisiana Bucket Brigade, The Environmental Integrity Project in Texas, Air Alliance Houston and other groups filed the lawsuit today in the U.S. District Court in Washington. The groups say recent studies at three large Gulf Coast refineries found emissions to be up to 100 times higher than estimates reported to the agency using what the environmental community believes to be "outdated and inaccurate" information and technology. The Associated Press could not immediately reach the EPA this morning for comment on the lawsuit.
Mayor Kip Holden is defending a contract that his chief administrative officer, William Daniel, signed with a Florida law firm to represent the city-parish in a claim against BP regarding the 2010 Gulf oil spill. Some Metro Council members are questioning the deal because the firm, Farrell and Patel of Coral Gables, Fla., will get 40% of any money it recovers from claims of lost revenues as a result of the spill. "We didn't go out hunting for this firm," Holden tells Daily Report. "They came to us and said, 'This money is out there. … Are you interested in trying to get it?' Our answer was yes." Some council members have suggested local law firms would charge much less on a contingency basis than 40%. But Holden says out-of-state firms are involved in a variety of class action suits in the state, including the multibillion-dollar tobacco litigation. What's more, he says, "If local law firms knew about the potential of recovering money from BP, why didn't they call us?"...
BP has agreed to fund approximately $340 million in coastal restoration projects for Louisiana, Gov. Bobby Jindal says. The investment is part of the $1 billion that BP agreed to pay for damaged natural resources resulting from the Deepwater Horizon oil spill of 2010. The $340 million will go toward the restoration of four barrier islands from Terrebonne Parish to the east bank of Plaquemines Parish, as well as two Fish Stock Research and Enhancement Centers. Prior to today's announcement, BP had only approved 10 projects, representing nearly $70 million of the $1 billion it has agreed to pay. Jindal says the state has been frustrated by the slow pace of progress from BP in committing funds for restoration needs and that this new investment is long overdue. "We are going to hold BP accountable for all of the damages they have caused to our coast, our fishermen, our small businesses and our families," the governor says in a statement. Although the spill occurred three years ago,...
British oil giant BP says its first-quarter profit nearly tripled as it recorded a big gain from the sale of its 50% stake in a Russian joint venture. The company has reported its profit attributable to BP shareholders for the three months ended March 31 was $16.86 billion, compared to a profit of $5.77 billion a year earlier. Revenue in the quarter rose 10% to $107.21 billion, compared to $97.42 billion a year earlier. BP completed the sale of its interest in TNK-BP to Rosneft on March 21, for a total of $27.5 billion in cash and Rosneft shares. The gain on the sale was $15.5 billion for BP. As for its continuing liability from the 2010 Gulf of Mexico oil spill, BP says its total cumulative charge for the disaster remained at $42.2 billion at the end of the January-March quarter. There persists significant uncertainty, however, about what its total financial exposure will be, BP says. The first phase of a civil trial in federal court in New Orleans ended earlier this month. The...
The chance of getting killed while working in the offshore oil and gas industry is seven times higher than for all workers in the United States, according to a new study by the Centers for Disease Control and Prevention of offshore fatal injuries between 2003 and 2010. As The Times-Picayune reports, it's getting to work that is the most dangerous part of an offshore worker's job. The study concludes that 65 of the 128 deaths during the seven-year period studied, or 51%, were attributed to transportation accidents, and 49 of those involved helicopter accidents, all in the Gulf of Mexico. "Catastrophic events like the Deepwater Horizon explosion attract intense media attention, but do not account for the majority of work-related fatalities during offshore operations," says an editor's note accompanying the study. "This report found that transportation events (specifically helicopter crashes) were the most frequent fatal event in this industry." The study also points out that...
Cheap natural gas and a $1.2 million state grant have helped lure a second Methanex methanol plant to Geismar. Gov. Bobby Jindal joined Methanex officials in Gonzales today to announce the second plant relocation today—at a job fair being held to begin filling 130 positions for the first methanol plant, which is expected to be operational by the end of next year. Canada-based Methanex will receive a $1.2 million performance-based grant from the state for site infrastructure improvements on the second plant, which will bring an estimated 35 new jobs to the area and $550 million in total capital investment. In total, the two Geismar plants will bring a $1.1 billion investment to Ascension Parish. LED officials estimate the two plants could bring a total of 1,368 in direct and indirect jobs to the area. Methanex officials say they will break ground on the second plant in 2014, with construction expected to take about two years. In addition to the grant, Methanex is expected to...
A Gulf of Mexico lease sale scheduled to take place Aug. 28 in New Orleans will offer up drilling rights on 3,953 blocks spanning roughly 21.1 million acres, the U.S. Department of the Interior announced today. The lease sale will come one year after a similar auction of Gulf acreage netted nearly $134 million, The Houston Chronicle reports. For the first time in years, companies will not be able to take advantage of a federal royalty relief program aimed at gas extracted from deepwater tracts purchased in the lease sale, since that provision is set to expire May 3. And while companies will have a chance to bid on acreage near the international boundary dividing the United States and Mexico continental shelf, those offers may never be unsealed. The area has been off-limits for more than a decade. The Interior Department has more on today's announcement
A new report raises serious concerns about the online database used by 11 states, including Louisiana, to track the chemicals used in hydraulic fracturing, or fracking. The Harvard Law School report says FracFocus, a registry site formed by industry groups in 2011, has loose reporting standards, makes it difficult for states to track whether companies submit chemical disclosures on time, and allows for inconsistency in declaring chemicals trade secrets. Along with Louisiana, Colorado, Pennsylvania and Oklahoma are among the states that require companies to divulge fracking chemicals through FracFocus. The controversial method, which involves pumping water, fine sand and chemicals underground to split open oil- and gas-bearing rocks, is credited with the natural gas boom that has been bolstering the economy in many areas of the nation. You can find the complete report, "Legal Fractures: Why the Voluntary Chemical Disclosure Registry Fails as a Regulatory Compliance Tool,"
What's the most important thing the world's industries can do to ensure a reliable energy supply? According to an ExxonMobil official: Use less of it. "The largest source of energy for the future is learning how to use it more efficiently today," says Paul Stratford, manager of the company's Baton Rouge chemical plant. Of course, conservation only gets us so far. While renewables are projected to become more important to the world's energy mix, he says, oil, natural gas and coal still are expected to be the primary fuel sources through 2040. As unconventional recovery methods like hydraulic fracturing, or fracking, increase the availability of natural gas, gas is beginning to displace coal to an extent. Exxon recently announced a more than $200 million investment in its Baton Rouge chemical and lubricants plants. It's also planning a multibillion-dollar expansion of its Baytown, Texas, chemical plant. "I would like to see this kind of project in Baton Rouge as well," Stratford says,...
The Louisiana Mid-Continent Oil and Gas Association says its effort to get residents in the state to sign a petition in favor of the controversial Keystone XL pipeline has netted 16,997 signatures. The association worked with the Consumer Energy Alliance to get the signatures on the petition, which will be sent to the U.S. Department of State. "Construction [of the pipeline] will bring new jobs, new customers, new business, new sales and new investment. New infrastructure projects are a big part of what can be done to boost the economy—we need it now," says LMOGA President Chris John in a prepared statement. The association's announcement on its petition comes one day after the Environmental Protection Agency sent a letter to the State Department urging it to conduct a more thorough analysis of oil spill risks and alternative pipeline routes, as well as greenhouse gas emissions associated with the $7 billion pipeline. Despite more than four years of study, the State...
Claiming more than $35 million in damages, the city of Baton Rouge has filed suit against BP and many of its contractors over the 2010 Gulf of Mexico oil spill, according to court documents. The suit, filed on Friday, says the city's losses include, but are not limited to, "the loss of business, loss of profits, loss of revenue, loss of equity, loss of earnings and impairment of earning capacity, diminution of property and business value, cost of cleanup, response, removal, restoration, and remediation of oil contaminated properties and waters." Specifically, the city says the oil spill caused it to miss out on approximately $9 million in business, sales, occupancy and gaming taxes, as well as licenses and permits. The suit has been assigned to U.S. District Judge James Brady. The city is represented by New Orleans attorney Sarah Spigener, as well as Wesley Farrell and Terry Gray of Coral Gables, Fla.-based Farrell & Patel, according to the suit. Along with BP, others named in the...
While there are few active wells in his parish now, and getting solid information from oil companies "is like pulling teeth," Dennis Manshack, director of economic development for West Feliciana Parish, still sounds confident about prospects for the Tuscaloosa Marine Shale play. "One [well] in our parish is producing about 500 barrels a day, and it's not on an artificial pump, it's actually pressure coming out of the ground," he says. Another Tuscaloosa well across the state line in southwest Mississippi is producing 1,200 barrels a day. "They have gone from 250 barrels to 1,200 barrels a day, just by changing the method to get the oil out of the ground," Manshack says. "It's coming. They don't spend $8 million to $10 million on a drilling rig to drill without knowing something's there." Interviews were held this week in West Feliciana for a worker-training program by the Petroleum Education Council. Participants will pay $500 for a 10-day intensive training program specifically...
An agreement has been finalized between the Capital Area Ground Water Conservation Commission and the Louisiana Office of Conservation to coordinate efforts on meeting goals for maintaining the sustainability of the East Baton Rouge Parish water supply. Commissioner of Conservation Jim Welsh signed this week a memorandum of understanding approved last month by the local conservation commission. In part, the agreement helps clarify the roles of the groups, which have separate, but overlapping authority over management of the Southern Hills Aquifer system supplying the Baton Rouge area. According to a news release, CAGWCC has wider immediate powers as the frontline management authority to take action in its jurisdiction, but the Office of Conservation has a wider range of staff expertise to analyze data and recommend actions for resolving management issues. The new agreement, Welsh says, will help both agencies "manage groundwater in the Baton Rouge area and deal with saltwater...
Since 2008, foreign companies have invested more than $26 billion in tight oil and shale gas plays in the United States, The Houston Chronicle reports, citing a new analysis published by the U.S. Energy Information Administration. Among recent deals, for example, earlier this year the Chinese company Sinochem inked a $1.7 billion joint venture with Pioneer Natural Resources to acquire a stake in the Wolfcamp shale play in West Texas. Overall, investment in shale plays in the United States totaled $133.7 billion between 2008 and 2012, EIA says. The agency says most of the recent joint venture deals with foreign companies involve liquids-rich areas such as the Eagle Ford, Utica, and Wolfcamp. Plays with a higher liquid-to-gas ratio are more attractive because of the higher value of hydrocarbons that have crude oil and petroleum liquids in addition to natural gas, EIA says. Most of the foreign investment in joint ventures involves buying a percentage of the host company's shale...
A pair of LSU professors have received grant funding to establish a first-of-its-kind lab at the university that simulates hydraulic fracturing—a technique for oil and gas drilling better known as "fracking." Juan Lorenzo, associate professor of geology and geophysics, and Arash Dahi Taleghani, assistant professor of petroleum engineering, received the nationally competitive grant from the Research Partnership to Secure Energy for America. The new fracking lab on campus will allow the duo to control all of the variables in the process and test hypotheses to understand how and why rocks break in a particular way during the fracking process. Over the next two years, the Gas Technology Institute in Chicago will head a team of experts from LSU, Lawrence Berkeley National Laboratory, University of California at Berkeley, and the private sector to develop advanced methods and techniques for the design and execution of environmentally safe and economically efficient fracking. The...
Kinder Morgan Energy Partners announced this morning plans to invest $58 million to expand the chemical storage capacity at its Gesimar plant. The expansion is being driven by a long-term contract Kinder Morgan has signed to support Methanex Corp.'s relocation of a Chilean methanol production plant to Geismar. Kinder Morgan's investment will include the construction of a methanol storage facility near its Geismar Liquids Terminal, according a news release. Kinder Morgan will build, own and operate the storage tanks and related infrastructure. "The assets will provide critical marine, rail and truck access in support" of the relocated Methanex plant, Kinder Morgan says in the release. The terminal infrastructure is expected to be in service during the second half of next year, coinciding with the anticipated startup of the relocated plant.
For the fifth straight week, gas prices fell by a few cents over the past seven days, according to the AAA Daily Fuel Gauge. As of this morning, a gallon of regular, unleaded gas was selling for an average of $3.43, down 4 cents on the week. The slow trickle down began at the end of February, when prices had been steadily rising for more than a month and a gallon of gas was selling for about 25 cents more compared to today. Last year at this time, gas was selling for $3.79 in the Baton Rouge metro area. The local average continues to remain below both the state and national average. The Louisiana average is at $3.46 at the start of April, which is 4 cents lower than a week ago, 16 cents lower than a month ago and 34 cents lower than a year ago. The U.S. average is at $3.63 this morning, down 3 cents on the week and 12 cents on the month. A year ago, the U.S. average was $3.92. You can see the complete report
Royal Dutch Shell has shut a 170,000-barrel-a-day pipeline that moves Gulf of Mexico crude to Houma after the pipe leaked in Terrebonne Bay, Bloomberg reports. Shell shut the 16-inch pipeline, which starts on Caillou Island, at about 5 p.m. Saturday after a light oil sheen was observed near a pump station, Kim Windon, a Houston-based spokeswoman for Shell, confirms in an email. Less than a gallon of crude was released, based on initial information, she says. Shell plans to inspect and repair the pipeline as soon as possible, weather permitting, and is investigating the cause of the leak, Windon adds. The Caillou-to-Houma pipeline connects with a 20-inch pipeline that brings crude from producers in Eugene Island, Ship Shoal, Green Canyon and other Gulf formations to Caillou Island.
A Transocean employee who served as chief mate on the Deepwater Horizon oil rig testified today that he believes the rig crew's emergency training saved lives following the 2010 explosion that killed 11 workers and triggered the nation's worst offshore oil spill. David Young, who was second-in-command to the rig's captain, testified that he believes 115 workers managed to escape the burning rig that BP had leased from Transocean because they followed their training. "What would you say the top priority of the Deepwater Horizon crew was?" Transocean attorney Luis Li asked at the start of the fifth week of a federal trial over the disaster. "For everybody to be able to go home safely back to their families," said Young, a witness called by his employer, a Swiss-based drilling company. Young, now the captain on a different Transocean-owned rig in the Gulf, said he believes the rig's crew had an excellent safety culture. But plaintiffs' attorneys have accused BP and its contractors of...
Chevron Corp. announced this morning that it has struck oil at the Coronado prospect in the deepwater Gulf of Mexico about 190 miles off the coast of Louisiana. The well is located in waters about 6,100 feet deep and is drilled to a depth of about 31,800 feet deep. The well results are still being evaluated, Chevron says, and additional work is needed to determine the extent of the find. Chevron has a 40% working interest in the prospect and is also the operator of the well. Its other owners are ConocoPhillips, which has a 35% stake; a subsidiary company of Anadarko Petroleum Corp., with a 15% stake; and Venari Offshore, with a 10% stake. The discovery has been made in an area of the Gulf in which Chevron is exploring "multiple projects," says Gary Luquette, president of Chevron North America Exploration and Production Co., in a prepared statement. "It also highlights the importance of the deepwater Gulf of Mexico as a source of domestic energy for the United States," he notes.
A British firm today signed its first liquefied natural gas import deal with Houston-based Cheniere Energy for 20-years' worth of shipments from the Sabine Pass LNG plant outside Lake Charles, Reuters reports. The shipments are to start in September 2018. The deal, which includes enough fuel for an estimated 1.8 million homes annually, is the first-ever, long-term LNG supply deal for Britain, and it marks a breakthrough for U.S. gas in Europe. The 20-year deal has an option for an additional 10 years of shipments. Prime Minister David Cameron welcomed the deal for diversifying the UK's energy mix away from dependency on a small group of existing gas suppliers and for giving Britain its first taste of cheap U.S. shale gas. Home energy costs have been surging in the U.K. in recent years because of scant supplies. Reuters first reported earlier this month that Britain's biggest household energy supplier, Centrica, was in talks with U.S. companies to secure the country's first long-term...
After steady rises throughout the first two months of the year, gas prices in Baton Rouge have now trickled down for four straight weeks, according to the AAA Daily Fuel Gauge. As of this morning, a gallon of regular unleaded gas is selling for an average of $3.49 in Baton Rouge, down 4 cents compared to the average price a week ago. One month ago, the average local price was $3.65 per gallon, and gas is now selling for 27 cents less than it was at this time last year. The AAA Daily Fuel Gauge tracks prices in metro areas across the United States. The Louisiana average as of this morning is $3.50, down 3 cents on the week and 16 cents on the month. The U.S. average is $3.66, which is an increase of 2 cents on the week, but a decrease of 12 cents compared to a month ago. Hawaii is paying the highest average price in America, at $4.39. Wyoming motorists are paying the lowest average price in the country, $3.32. You can check out the complete report
To highlight the major shortage of skilled workers the energy industry faces in the coming decade, Daniel Lumma, senior vice president of Kiewit Oil, Gas and Chemical North America in Houston, points to Lake Charles. Major gas-to-liquids projects worth billions of dollars announced in recent years are projected to create thousands of jobs. But, as Lumma told members of the American Fuel and Petrochemical Manufacturers at its annual meeting in Houston on Tuesday, filling those jobs is going to a nearly insurmountable challenge. "If all of those projects happen, the peak workforce would have to multiply five to six times above what it is right now," Lumma says. "The fact is, that's not going to happen. We're heading into a very, very significant demographic issue." There are about 4.5 million to 5 million skilled trade workers in the oil and gas industry in North America, and that's down about a million from the mid-2000s, The Houston Chronicle reports. Another statistic Lumma...
The drinking water in Baton Rouge has long been a source of civic pride. The quality of the water has been lauded for decades, and its crisp, clean taste regularly wins national awards.
The average price of a gallon of regular, unleaded gas fell 3 cents on the week in Baton Rouge, hitting $3.51 as of this morning, according to the AAA Daily Fuel Gauge report. That makes it three straight weeks in which gas prices posted a decline in the city. One month ago, gas was selling for 3 cents higher than it is today. A year ago, gas was 15 cents higher, at $3.66. The Louisiana average price is $3.53 as of this morning—also three cents lower than one week ago, and 13 cents lower compared to a year ago. Local and state averages remain well below the national average of $3.68 per gallon. National prices have fallen one penny on the week and are the same as they were one month ago. A year ago, the U.S. average was $3.83 per gallon. Complete details can be found in the AAA Daily Fuel Gauge report here. Meanwhile, a recent report in The New York Times...
Louisiana Oil & Gas Association President Don Briggs says his industry is working with the Jindal administration to adjust the state's tax incentive programs. "Some things are going to stay, some things are going to be taken out," Briggs says. "We're just going to have to give a little bit." For example, the state has a severance tax exemption for horizontal wells that lasts for two years or until the wells pay off their costs, whichever comes first. That might be changed to a five-year, 50% reduction, which would still benefit well owners but provide more upfront money to the state, Briggs says. Department of Revenue head Tim Barfield says they're looking for a balance that raises more money yet doesn't put the state's oil and gas industry at a competitive disadvantage, keeping in mind that the industry will benefit from the elimination of income and franchise taxes. In other words, Barfield wants incentives that are generous enough to keep companies drilling in Louisiana, but not...
The oil and gas industry's biggest trade group is launching a new ad campaign aimed at dissuading lawmakers from cutting tax incentives cherished by the sector. The Houston Chronicle reports the TV commercials by the American Petroleum Institute will air in the nation's capital as lawmakers inch closer to a broad debate over remaking the nation's tax code and as the Obama administration readies a federal budget proposal expected to once again target industry tax breaks for elimination. Sen. Robert Menendez, D-N.J., just reintroduced legislation that would block the nation's largest oil companies from claiming a suite of tax deductions. "We decided to run the ads to remind Congress that at a time when many families have had to scramble to balance their budgets, asking them to pay more for the energy they need to live their lives is bad policy and, frankly, bad politics," says Marty Durbin, API's executive vice president. API isn't the only group joining the fray. The National...
The chief lobbyist for the U.S. Chamber of Commerce told BRAC shareholders today that policies of the Obama administration could hinder the country's progress toward becoming the worldwide leader in production of oil and natural gas. Bruce Josten, executive vice president of government affairs with the U.S. Chamber, says the country is witnessing "one of the most important transformational changes of our lifetimes" on the energy front. "Amazingly, all of these advances … are taking place despite the president's policies on energy, not because of them," says Josten, who delivered the keynote address at BRAC's annual shareholders meeting this morning. He specifically criticized President Barack Obama for blocking drilling on federal land. "We are positioned to be far more competitive in manufacturing if we get the right policy prescription in place," he says. "And to do that, in my opinion, we have to look at our natural resources the way the Canadians do, as national assets to...
America is awash in natural gas, thanks to the controversial practice of hydraulic fracturing, or fracking. And now a San Francisco startup company, Siluria Technologies, has a new way to turn that gas into chemicals, jet fuel and gasoline, The Houston Chronicle reports. The ability to make liquid fuels from natural gas has existed since the 1920s. But up until now it hasn't been cheap, requiring high heat and pressure to work. Siluria's technology needs less heat and less energy—and therefore costs less. The company is gearing up to build its first demonstration plant. And it has hired a new chief executive officer with deep experience in the chemical industry to guide Siluria out of the lab and into the marketplace. "There's going to be this long period of time when we have this excess gas," says Edward Dineen, the company's new CEO. "If you believe that, and I do, then having technologies that give you better options for that gas would make sense." Dineen most...
As of this morning, the average price for a gallon of regular unleaded gas in Baton Rouge is $3.54—16 cents higher than it was just one week ago. It marks the fourth straight week that local gas prices have risen, according to the AAA Daily Fuel Gauge Report. One month ago, gas was selling for $3.19 in Baton Rouge. One year ago, it was selling for $3.48 locally. The average price for a gallon of diesel has also risen sharply in Baton Rouge, and is at $3.97 this morning—a dime more than a week ago and a quarter more than one month ago. The Louisiana average for a gallon of regular unleaded gas is at $3.56 this morning, which is 17 cents higher than a week ago, 35 cents higher than a month ago, and 7 cents higher than a year ago. However, the local and state averages remain below the national average of $3.73 for a gallon of regular gasoline. The national average is 15 cents higher than a week ago, 43 cents higher than a month ago, and 18 cents higher than a year ago. You...
BP has signed a 20-year agreement to ship liquefied natural gas processed at a terminal in Freeport, Texas, which is the first of several facilities awaiting federal approvals for natural gas exports, a Freeport LNG executive announced today. The agreement would commit BP to pay for processing of 4.4 million tons of LNG per year at the Freeport LNG facility, where it would be loaded onto BP tankers and shipped abroad, Freeport LNG CEO Michael Smith tells The Houston Chronicle. "I think it sends a very strong message that a super major made this commitment," Smith says. "It makes sense to export gas, and they want to be in one of the first facilities of its kind to be able to export gas." BP marks the third company to sign an agreement to buy LNG exported from the facility; two Japanese companies, Osaka Gas and Chubu Electric Power, have contracted for another 4.4 million tons of LNG per year from the facility. The construction and shipping of natural gas from the Freeport site...
Another week, another nickel. After spiking 13 cents the week previous, the price of a gallon of regular unleaded gas in Baton Rouge rose by another 5 cents over the past week. As of this morning, Baton Rouge motorists are paying about $3.38 a gallon. That's 17 cents more per gallon than they were paying one month ago, but it's still 6 cents cheaper compared to last year at this time. Baton Rouge's average price is now just a penny below the state average of $3.39—which is also up 5 cents on the week. The state average is also lower than the national average of $3.58, up 6 cents over the past week. U.S. average prices have climbed 27 cents over the past month and are 8 cents higher this morning than they were one year ago. You can check out the complete AAA Daily Fuel Gauge Report here for gas price information from every state and major metro area in the...
Houston-based Genesis Energy plans to spend $125 million to modernize and expand its Port Hudson terminal, and construct an 18-mile crude oil pipeline connecting the terminal to ExxonMobil's Baton Rouge refinery. The project, which was jointly announced by Gov. Bobby Jindal and Genesis President and COO Steve Nathanson this morning, is expected to create 50 new jobs. The expansion also will result in an estimated 220 new indirect jobs, along with 45 construction jobs, LED says. Construction will begin soon, with the terminal and new crude oil pipeline work to be completed by the end of the year. The pipeline, 20 inches in diameter, will have an estimated capacity of 350,000 barrels of crude oil per day. LED says Genesis is expected to utilize Louisiana's Quality Jobs and Industrial Tax Exemption incentives for the project. In addition to improvements at the company's existing terminal in Port Hudson, including barge dock and truck station facilities, Genesis will add approximately...
Despite a Methanex Corp. quarterly report released Thursday in which company officials appeared to confirm reports that it plans to relocate a second methanol plant from Chile to Geismar, a company spokesman says Methanex has not made a final decision on the matter. "We are evaluating the potential relocation of a second plant from Chile to Louisiana and expect to make a decision on this second relocation in the first half of 2013," says Baljit Lalli, communications manager. A line in the company's quarterly report refers to "the second facility that management also intends to relocate to Geismar." Methanex announced in July that it was relocating one plant from Chile to a 225-acre site in Geismar. That plant is expected to be operational sometime in the second half of 2014. "A key area of focus for me as the new CEO will be the successful execution of our value-creating growth projects in Louisiana and New Zealand," says Methanex President and CEO John Floren in the quarterly...
It's judgment day for BP. The British oil giant will learn today whether a U.S. judge accepts or rejects a criminal plea deal the company reached with the Justice Department over the 2010 Gulf of Mexico rig explosion and oil spill, The Houston Chronicle reports. The setting is a federal courtroom in New Orleans. U.S. District Judge Sarah Vance has said she will announce her decision at the hearing, which was set to begin at 10 a.m. Lawyers for BP and federal prosecutors are expected to address the court. So, too, will relatives of some of the 11 men who were killed when the Deepwater Horizon drilling rig exploded and sank. Federal probation officials have filed under seal a pre-sentence investigation report and recommendation, which the judge will review. It has been revised or added to twice since the original report was issued, records show. Today's hearing is likely to be crowded and emotional. BP has agreed to plead guilty to 14 criminal charges, including manslaughter and...
Louisiana and the Gulf Coast likely will be the prime beneficiaries of a natural gas–fueled industrial building boom over the next several years, says David Dismukes of LSU's Center for Energy Studies. However, several variables— such as tax reform, which will be a hot topic at this year's legislative session—could affect the economics of some of those potential projects, he says. "Everybody's sitting back waiting and watching," Dismukes says, when asked about the state-level tax reform conversation. "They will sit down and redo the books on these projects as soon as they get a more concrete idea of how it's going to change things." The Jindal administration wants to protect incentives such as exemptions for business utilities and purchases of manufacturing machinery and equipment. However, Dismukes says the state's Quality Jobs and Enterprise Zone programs could be in play. Changes in federal tax policy and environmental regulations also could make a difference,...
The average price of a gallon of regular unleaded gas ticked up 2 cents over the past week in Baton Rouge and hit $3.20 this morning, according to the AAA Daily Fuel Gauge Report. A week ago, gas was selling for $3.18 per gallon on average locally; a week before that, $3.21. The average price today is 9 cents higher than it was one month ago, but 12 cents lower than it was one year ago. Baton Rouge's average price remains just below the state average of $3.21, which is also lower than the national average of $3.34. You can check out the complete AAA Daily Fuel Gauge Report here for gas price information from every state and major metro area in the country.
Natural gas is the most important feedstock for Louisiana chemical plants, so cheap gas has been a big plus for the Capital Region in recent years and, on balance, for the state as a whole. But for producers, low natural gas prices are forcing a shift into oil and liquid plays. In 2008, 82% of all the rigs in the United States were drilling for natural gas, says Don Briggs, president of the Louisiana Oil & Gas Association. Today, only 25% are doing so. In Louisiana's Haynesville Shale, the number of rigs has plummeted from 140 at one point to 17. A price of about $5 per million British thermal units would still be good for the plants, Briggs says, while allowing producers to make a profit. "But $3.80 is a little tough," he says. "You can't drill for something, if it's costing you $4 to find, you can't find it and sell it for $3.50." Natural gas is expected to remain cheap for a few more years, although liquid natural gas exports may help lift the prices to some extent, Briggs says.
As lawmakers review the state's tax breaks, Don Briggs, president of the Louisiana Oil & Gas Association, hopes an incentive for horizontal drilling survives. While some estimates show the incentive costs the state more than $200 million a year, Briggs says that number is unrealistic when there are only about 17 rigs drilling in the Haynesville Shale, as compared to 140 when natural gas prices were high. He says $36 million over the next two years is a more realistic cost estimate. "It's an important credit, especially with prices as low as they are," Briggs says. "I know one company just last night told us they were moving four rigs [into the Haynesville Shale], and they're very concerned about losing this exemption." The Haynesville, a natural gas play in north Louisiana, is competing with formations in other states, such as the Marcellus Shale in the Northeast, which is rich with liquids as well as natural gas. As for other tax benefits important to his members, Briggs mentions a...
In the latest debate on hydraulic fracturing, the Obama administration scrapped a 2012 plan to impose tough new mandates governing the use of the drilling technique on public lands. Earlier this month, LOGA President Don Briggs found himself battling Hollywood, not regulators, over the way the Matt Damon movie Promised Land, directed by Gus Van Sant, portrays fracking. "It's dangerous to the industry because it's not factual," Briggs says. Though officials with the Louisiana Environmental Action Network say they did not see the movie, they're concerned about fracking not only in Pennsylvania—where the film is set—but also along the Tuscaloosa Marine Shale, closer to home. "You need sufficient regulatory requirements on the...
A favorable business climate in the United States has helped make the country the world leader in the shale revolution, according to a new report, "Energy and the New Global Industrial Landscape: A Tectonic Shift?" As The Houston Chronicle reports, research firm IHS notes in the report that shale gas and tight oil deposits are being discovered all over the world. However, the report adds that the U.S. has the right economic ingredients to help the industry flourish, including private property ownership rights, good energy infrastructure and access to risk-based investment capital. "This is primarily a story of market forces and entrepreneurship, not government incentives or intervention," IHS writes in the report. IHS projects that growth in unconventional oil and gas will add more than 3 million jobs by 2020 and generate more than $110 billion in taxes. U.S. oil output has increased 25% since 2008 to about 6.4 million barrels per day. Natural gas supplies also have surged,...
Predicting energy demand, population growth, policy changes and other global trends that will affect oil prices and industry strategy decades from now is far from an exact science. But as The Houston Chronicle reports, major oil and gas companies see value in trying. BP, Royal Dutch Shell and Exxon Mobil Corp. are among the companies that publish outlooks forecasting the future of the energy sector. BP's updated 2030 outlook is set for release Wednesday. The goal: to figure out what the energy world will look like in the future so they can make the most profitable exploration and production decisions today. By releasing their conclusions publicly, these companies also spark an annual conversation about the world's energy needs. "You have to know what the future framework is before you can make commitments that are in the billions to tens of billions of dollars," explains John Felmy, the American Petroleum Institute's chief economist. The challenge is how to forecast events 20...
Louisiana's attorney general has spent nearly $24 million building the state's legal case against BP over the 2010 Gulf of Mexico oil spill, with much of the money paid to outside law firms that have contributed to his campaigns. Attorney General Buddy Caldwell's payments to outside lawyers—$15.4 million and counting—account for about two-thirds of his total spending, according to figures obtained by The Associated Press. While Louisiana took a much harder hit than other states during and after the disaster, that spending far exceeds the contract work paid by Caldwell's counterparts, according to data provided by their offices. Alabama Attorney General Luther Strange opted to let lawyers on his staff take on the work, and he says his office's tab is well under $200,000 so far. New Orleans-based U.S. District Judge Carl Barbier, who is presiding over most of the claims spawned by the spill, at one point appeared to take issue with Caldwell's use of outside lawyers,...
The oil and gas industry, which usually finds itself doing battle with politicians and regulators, has recently been taking on an unlikely foe: Matt Damon. Locally, the Louisiana Oil & Gas Association is churning out responses to the actor's new film, Promised Land. The flick, shot in Pennsylvania, digs into a national debate over fracking with disturbing images of groundwater contamination and flaming water faucets. LOGA President Don Briggs first issued a column entitled "Facts Not Required" characterizing the film as a "mass scale public relations campaign" against hydraulic fracturing and urging the oil and gas industry to better educate the public on the safety of the process to "beat Hollywood to the punch." The organization followed up this afternoon with the release of a five-minute video offering the history of hydraulic fracturing and facts about the process meant to "debunk the deceptive content of Promised Land." This isn't the first time the industry has...
Driven by the shale boom, the United States in 2014 will hit its highest daily oil production level since 1988 and will grow oil output at the highest rate ever, the U.S. Energy Information Administration predicted Tuesday. As The Houston Chronicle reports, U.S. daily oil production—which averaged 6.4 million barrels a day in 2012—will surge 23% to average 7.9 million barrels a day in 2014, according to administration projections. The daily production rate will jump 900,000 barrels between 2012 and 2013, a record for growth in a single year, EIA Administrator Adam Sieminski announced during a conference call with reporters. The previous record of 800,000 barrels per day was set a year ago and was the largest one-year jump since 1951. Oil was first produced in the United States in 1859. "That is the largest single-year growth in U.S. production all the way back to the drake oil well in Titusville, Pennsylvania, in 1859," Sieminski says. "That is pretty impressive."...
Apache Corp. this month is set to become the first company to power an entire hydraulic fracturing job with engines running on natural gas, cutting fuel costs by about 40%, an executive tells The Houston Chronicle. The Houston-based oil and gas company has been working in recent months with Schlumberger, Halliburton and Caterpillar to advance its use of natural gas in oil field operations, says Mike Bahorich, Apache's executive vice president of technology. The goal is to reduce costs, while increasing use of the domestically produced fossil fuel and cutting emissions, Bahorich adds. Other companies have fueled part of their fracking projects with natural gas, but Apache plans to be the first to run a full spread of 12 hydraulic fracturing pumps on the fuel this month. "I would challenge you to think of an idea that could generate more value for our economy and our environment than switching from oil to natural gas," Bahorich says. The full story can be found
The new rules governing the state's alternative-fuel vehicle tax credit, which go into effect today and eliminate "flex-fuel" vehicles from eligibility, accurately reflect legislative intent and the wording of the statute, says Tim Barfield, head of the Louisiana Department of Revenue. Rules issued by former Revenue Secretary Cynthia Bridges on April 30 said owners of flex-fuel vehicles, which can burn both alternative fuels and petroleum-based gasoline from the same tank, are eligible for the credit, an interpretation that could have cost the state hundreds of millions of dollars per year, by some estimates. Only owners of vehicles with a standalone alternative fuel tank or battery are eligible under the new rules. Officials say about $7.6 million in tax credits—worth up to $3,000 each—have been paid out under the original rules. Claims for flex-fuel vehicles received by June 14...
David Constable, CEO of Sasol—the South African energy company that is planning to spend between $16 billion and $21 billion to develop the United States' first gas-to-liquids plant in south Louisiana—tells The New York Times the project "can be a game-changer" for the nation. However, the focus of the article is the risky nature of gas-to-liquids technology, which is in use at just a handful of plants worldwide. "The record for converting gas to liquids is spotty," the article says. "The newest and largest plant in operation, Royal Dutch Shell's giant Pearl plant, … in Qatar, cost the leviathan sum of $19 billion, more than three times its original projected cost, and has been plagued with unexpected maintenance problems." The article also notes that BP and ConocoPhillips built and briefly operated demonstration plants in Alaska and Oklahoma, but stopped short of full development of the technology. Exxon Mobil and ConocoPhillips, too, announced plans to...
A new study by the Pew Center on the States says Louisiana is among a number of states that have created tax traps for themselves by offering incentives for economic development that are open-ended or lacking sufficient controls. According to the study, called "Avoiding Blank Checks: Creating Fiscally Sound State Tax Incentives," Louisiana's exemption for horizontal natural gas drilling, created in 1994, cost the state just $285,000 in forgone revenues in fiscal year 2007. But at the end of fiscal year 2010, the price tag of the exemption had grown to $239 million, the study says. To avoid creating such tax traps, the study suggests that states do their homework before implementing them, including: gathering reliable economic impact projections, making lawmakers aware of any uncertainties surrounding the potential cost, linking cost estimates to policy making, and making the process transparent. Setting caps on how much the state will provide in tax exemptions through incentive...
At $3.12, the average price of a gallon of regular unleaded gas is 4 cents lower today than it was a week ago in Baton Rouge, according to the AAA Daily Fuel Gauge Report. Local gas prices are now 8 cents lower than they were two weeks ago and 11 cents lower than they were a month ago. Nonetheless, they remain 2 cents higher than they were a year ago. The average price across Louisiana is at $3.14 this morning, down 5 cents on the week and 12 cents on the month—but up one penny from a year ago. Local and state averages continue to trend below the national average of $3.34 per gallon, which is down 4 cents on the week and 10 cents on the month. Yet the national average this morning is 6 cents higher than it was a year ago. You can check out the complete AAA Daily Fuel Gauge report here.
Gov. Bobby Jindal's administration has pledged an incentive package valued at more than $135 million to South African energy company Sasol Ltd., which is developing a multibillion-dollar complex in southwest Louisiana to turn natural gas into chemicals, diesel and other fuels. Incentives include tax breaks, a $20 million worker training facility, and a $115 million payment to the company for land and infrastructure that will be left to a future governor's administration and lawmakers to fund. Sasol announced on Monday it plans to spend between $16 billion and $21 billion on the construction of a chemical plant and a gas-to-liquids plant at a site in Westlake, near Lake Charles. The project is described as the largest manufacturing investment in Louisiana's history. The governor's office says Sasol will create 1,250 new permanent jobs, while an LSU study says the project will generate an economic impact of $46 billion over 20 years. Landing the facility in Louisiana comes with a...
South African chemicals and energy company Sasol Ltd. announced today it anticipates spending between $16 billion and $21 billion to build a complex in Louisiana to convert natural gas into diesel, other fuels and chemicals. When, and if, that projection comes to fruition, Gov. Bobby Jindal says it would represent the largest industrial investment in state history. "It also represents one of the largest foreign direct investment manufacturing projects in the history of the entire United States," says the governor, who joined Sasol officials today to shed additional light on the scope of the project, which has been in development for years. Sasol says it will soon begin initial engineering work on a complex in Westlake that will use domestic natural gas—which is among the cheapest in the world—to make higher-value chemicals and fuels. The company plans to first spend $5 billion to $7 billion on a chemical plant, and later add an $11 billion to $14 billion gas-to-liquids...
The average gallon of regular unleaded gas is selling for $3.20 in Baton Rouge this morning, according to the AAA Daily Fuel Gauge. That's about 2 cents more than the average price per gallon one week ago, but 20 cents lower than it was one month ago. A year ago, gas was selling for 13 cents less per gallon than it is today. The state average this morning is $3.22 per gallon, up one penny on the week. The U.S. average, at $3.42 per gallon, is also one cent higher than it was a week ago. Baton Rouge gas prices have consistently tracked slightly below the state average in recent months and have been trending downward in recent weeks. Baton Rouge gas prices hit a historical high of $3.99 per gallon on July 18, 2008. You can check out the Daily Fuel Gauge here.
Before last week's fatal fire on one of Black Elk Energy's oil production platforms, The Houston Chronicle reports, the five-year-old firm had racked up more than 300 documented mistakes and violations offshore. The report cites federal regulators who cracked down on the Houston-based firm Wednesday. The federal government ordered the company to immediately cease burning, welding and other activities that could ignite fires at all of its 98 oil and gas production facilities in the Gulf of Mexico. Regulators also are insisting on a third-party audit of Black Elk's safety management systems and are barring the company from launching work at facilities that are currently offline. Moreover, the Bureau of Safety and Environmental Enforcement is ordering Black Elk Energy to submit a performance improvement plan detailing the steps it will take to ensure compliance in its operations. The bureau has threatened that unless there is swift evidence of improved performance, the company...
Black Elk Energy has halted the search for a worker missing since Friday's fire aboard the company's oil platform in the Gulf of Mexico. The missing crewman, Jerome Malagapo of the Philippines, was employed by Grand Isle Shipyard Inc., which had a contract with Black Elk to refurbish the platform. The company says in a statement released Tuesday night that it will focus on the victims and their families, including those injured in the incident. The body of 42-year-old Elroy Corporal was found over the weekend. Four workers who suffered burns during the platform fire are being treated at the Baton Rouge General Medical Center. The cause of the explosion and fire aboard the platform remains under investigation. The Houston Chronicle reports initial investigations of the lethal explosion are focusing on the possibility that a torch ignited flammable materials on the site. Such activities that involve burning, welding or other operations capable of starting fires or...
The embassy of the Philippines in Washington has released the identity of a worker killed in a fiery explosion on an oil platform off the coast of Louisiana on Friday. In a news release on the embassy website, he is identified as 42-year-old Elroy Corporal. Meanwhile, the embassy says it is holding out hope that another unidentified Filipino worker who has been missing since Friday's accident will be found alive. Houston-based platform owner Black Elk Energy says it planned to take a search-and-rescue dog aboard its fire-damaged offshore platform today as it continues to look for signs of the missing worker. In addition to the one dead and one missing worker, four Filipino contract workers are being treated in Baton Rouge for serious burns. One of them has been identified as 50-year-old Wilberto Ilagan, who was most...
Now that a settlement in the criminal lawsuit of the BP oil spill of 2010 has been reached, officials say it was heartening to see U.S. Attorney General Eric Holder take a tough stance on the oil giant and require it to pay out $4.5 billion for damages and misconduct. "It's very clear that he's not taking this lightly," says Garret Graves, chair of the Coastal Protection and Restoration Authority of Louisiana. "And we're finally going to cross that threshold in requiring BP to restore the Gulf." But the civil lawsuit, which is scheduled to go to trial in February, and the Natural Resource Damage Assessment remain the larger issues to settle. "We're now going to focus on the civil lawsuit," says Nick Speyrer, spokesman for The Water Institute of the Gulf, which BRAF helped form in 2011. Any settlement from that civil suit will largely fund the state's $50 billion master plan for coastal restoration and hurricane protection over the next 50 years, says Speyrer. Meanwhile, from the...
An explosion and fire ripped through a Gulf oil platform today as workers used a cutting torch, sending four people to a hospital with critical burns and leaving two missing in waters off Louisiana. Coast Guard Capt. Ed Cubanski says the well was not producing at the time and no oil was leaking. A relatively small amount of oil spilled from the rig when workers using a torch cut into a 75-foot-long, 3-inch-wide line on the platform. Cubanski says a sheen one-half mile long and 200 yards wide was reported in the area. The fire has since been extinguished, Coast Guard spokesman Drake Fore says, adding Coast Guard aircraft and boats were searching for two missing people. Nobody was believed killed in the fire, but Cubanski says 11 people were flown from the platform to area hospitals or for treatment on shore by emergency medical workers. Taslin Alfonzo, spokeswoman for West Jefferson Medical Center in suburban New Orleans, says four injured workers were brought to the hospital in...
While BP has resolved a sweeping criminal probe of its role in the massive 2010 oil spill in the Gulf of Mexico, two company employees charged in the deaths of 11 rig workers claim the Justice Department is trying to make them scapegoats for the disaster. Attorneys for the highest-ranking BP employees aboard the Deepwater Horizon during the deadly explosion in April 2010 vowed to fight manslaughter charges against their clients. According to the indictment unsealed Thursday, Robert Kaluza and Donald Vidrine are accused of disregarding abnormal high-pressure readings that should have been glaring indications of trouble just before the blowout. Vidrine's attorney, Bob Habans, says in a statement that prosecutors showed "exceedingly poor judgment" in charging his 65-year-old client. "It is almost inconceivable that any fair-minded person would blame this hard-working and diligent man for one of the most catastrophic events in the history of the oil business," Habans' statement reads.
Oil giant BP and the U.S. government portrayed in public a united front as a out-of-control well spewed oil into the Gulf of Mexico in 2010. But The Houston Chronicle is reporting that the two privately sought to withhold potentially critical information from each other, possibly slowing efforts to solve the crisis, citing new testimony in the case. Last month's closed-door testimony by Marcia McNutt, head of the U.S. Geological Survey, in the ongoing litigation over the disaster could complicate a Justice Department probe that has focused on whether BP and its partners obstructed justice by lying to investigators. "It could have impeded the investigation, and both sides may share some blame in that regard," says Blaine LeCesne, a law professor at Loyola University in New Orleans who has followed the case. Motivations aren't clear from transcripts the newspaper obtained of McNutt's two-day deposition in New Orleans, but BP's pocketbook and the government's ability to punish...
LED Secretary Stephen Moret has been predicting a sustained industrial construction boom in Louisiana, thanks partly to low, stable natural gas prices. The main caveat he has mentioned has been the possibility of an adversarial stance by the Obama administration against hydraulic fracturing, or "fracking," a controversial technique used to unlock vast supplies of fuel. But Moret tells Daily Report the benefits that cheap natural gas bring to the nation—and the fact natural gas is cleaner than other energy alternatives such as coal—make it unlikely that the federal government will want to limit fracking. "I'm hopeful there will be a largely supportive federal administration on that issue," he says. Moret remains concerned about possible environmental regulations, perhaps aimed at curbing greenhouse gases, that could slow down some industrial projects. "It's not a certainty," he says. "I'm just raising it as a point of concern we're going to be watching carefully."...
Some of the biggest campaign spending in the Louisiana Supreme Court race recently—some $380,000 for 1st Circuit Judge Jeff Hughes—came from the third-party group Citizens for Clean Water and Land, a PAC formed last summer by trial attorneys with a stake in the outcome of oilfield legacy lawsuits. That's the same group that funded a high-profile TV ad campaign in September featuring Hays Town II and Jimmy Jenkins and their nonprofit group Save BR Water, which advocates tougher regulations for the municipal drinking water supply. Some have suggested the PAC teamed up with the nonprofit and its well-known founders to elevate its profile, give it legitimacy, and help it raise money to spend on Hughes in the November primary. But that wasn't the case, insists political consultant Roy Fletcher, who produced the commercials for the PAC. "The point of the [Save BR Water] ad campaign was to raise awareness about clean water," says Fletcher. "The point was not to raise money for...
LSU Law Center Chancellor Jack Weiss tells The Times-Picayune that legal and regulatory issues in the energy industry have become more specialized and complex, prompting the law center to begin a specialized program studying energy law. The center will collaborate with the Baton Rouge campus in areas that will increase the knowledge base of students in the energy law program. The center plans to offer courses in geology, petroleum engineering, nuclear sciences, coastal sciences, environment science and chemical engineering that will train potential lawyers to work with scientific expertise in the 21st-century realm of energy law. Oil and gas, however, will remain at the core of the program, Weiss says. Students outside the energy law program will also have the opportunity to gain an understanding of the legal subject matter that surrounds science, engineering and other disciplines critical to the new world of energy. Practicing attorneys in the energy field will be able to...
The International Energy Agency expects the United States will overtake Saudi Arabia and Russia as the world's top oil producer by 2017, thanks to increased output achieved by new exploration technologies. The World Energy Outlook 2012 released this morning by the Paris-based IEA also predicts that greater oil and natural gas production as well as rising energy efficiency will allow the United States, which currently imports around 20% of its energy needs, to become nearly self-sufficient by around 2035. The IEA says rebounding U.S. oil and gas production and increasing oil and shale gas resources are "steadily changing the role of North America in global energy trade" and will speed up the change of direction of international oil trade from the Middle East toward Asia. It also says the United States will overtake Russia as the world's leading gas producer within the next three years. Reuters has a full examination of the report's details
Only a few years ago, people were beginning to worry about the future of the petrochemical industry in the United States, which was being threatened by the availability of inexpensive fuel and labor overseas. Today, cheap, abundant natural gas has local industry watchers more optimistic than at any time in recent memory.
The four-year outlook for the oil and gas industry is sobering, now that President Barack Obama has been re-elected, but shouldn't entail any surprises, National Ocean Industries Association President Randall Luthi says. Industry leaders had hoped Republican Mitt Romney would get elected and open up regulations for more oil and gas exploration. Luthi says federal inspections and permitting, under Obama, have become more costly and time-consuming. "In spite of what I consider this deeply disappointing administration's plan, things are on the uptick, and you know it far better than I do. Rigs and jobs are beginning to return to the Gulf of Mexico. Most financial gurus are predicting a good 2013 for the offshore energy industry," Luthi told a group of industry leaders in Lafayette on Wednesday. "However, I would argue that it's not going to come without a price. I think it's way too early to decide how high that price is going to be, whether it will have a stopping or stalling effect on...
U.S. oil production rose to the highest level in nearly 18 years as the shale-drilling boom cut reliance on foreign fuel and nudged the country ever closer to energy independence. Bloomberg reports national output swelled by 8,000 barrels per day to 6.68 million in the week ended Nov. 2, the Energy Department reports. It was the most since Dec. 23, 1994. Improvements in horizontal drilling and hydraulic fracturing, or fracking, have unlocked fuel trapped in deep underground rock formations in states such as North Dakota, Texas and Oklahoma. The U.S. met 83% of its energy needs in the first six months of 2012, on track to be the highest annual level since 1991, according to department data compiled by Bloomberg. Production advanced 31% this year in North Dakota, 19% in Texas, and 11% in Oklahoma, department records show. Crude imports have declined 11% this year. "Every added barrel we make here is another barrel we don't need from somewhere else," says Kyle Cooper,...
More than 100 nonprofit groups and government entities have been picked to get shares of $43.7 million in BP funds to promote the Gulf Coast's tourism and seafood industries following the company's 2010 oil spill. The first round of grants announced today by court-supervised claims administrator Patrick Juneau are part of a proposed settlement between BP and a team of private plaintiffs' attorneys. The deal calls for BP to fund a total of $57 million in tourism and seafood promotion grants. The 110 grant recipients were picked from a pool of more than 350 applicants. In Louisiana, 43 recipients will get $15.9 million. In Florida, 33 organizations will receive $13.4 million. In Alabama, 21 groups will get $8.3 million. In Mississippi, 13 organizations will get $6 million. Specifics on which organizations were selected and how much funding each will receive were not available as of press time.
Nucor Corp. announced today it has agreed to team up with the U.S. division of Encana Corp. on a project that would provide natural gas for its steelmaking facilities—including the massive $750 million iron plant under development in St. James Parish. Financial terms were not disclosed. Nucor says that Encana will drill and operate onshore natural gas wells. Nucor will pay its share of the costs plus an additional amount of carried interest as each well is drilled, subject to caps. Either company may suspend drilling if natural gas prices fall below a predetermined threshold. Nucor, like other manufacturing companies, is striving to take advantage of cheap natural gas to fuel its operations while supply is high. The Charlotte, N.C.-headquartered firm says that with today's deal in place it expects to be able to better manage its exposure in the natural gas commodities market. It also will give Nucor a competitive advantage in natural gas costs for its Louisiana facility, which...
Entergy Corp. moved a step closer to turning over control of its power transmission system to a regional grid operator last week, a plan that the New Orleans utility giant hopes to have in place by the end of 2013. Entergy, which operates electric utilities in Louisiana, Arkansas, Mississippi and Texas, has met with regulators over the past year to win support for joining the Midwest Independent Transmission System Operator, an Indiana-based group that spans more than a dozen states and one Canadian province. The Times-Picayune reports utility regulators in Arkansas and Texas both approved the plan last week. The Louisiana Public Service Commission, which regulates Entergy Louisiana, signed off on it in May, and regulators in Mississippi are expected to follow suit in mid-November. The timing will likely leave the New Orleans City Council, which regulates Entergy New Orleans, as having the final say. In New Orleans, the move is projected to save customers up to $46 million...
Last week marked the second in a row that Baton Rouge drivers got a pretty significant break at the gas pump. The average price of a gallon of unleaded regular gas fell 11 cents from Monday, Oct. 22, through today, according to the AAA Daily Fuel Gauge Report. Gas prices also fell 8 cents over the week prior to that. As of this morning, Baton Rouge prices are averaging $3.37 per gallon. One month ago, the average price in Baton Rouge was $3.56 a gallon. However, today's prices are still 9 cents higher than the $3.28 per gallon motorists in Baton Rouge were paying a year ago. Nonetheless, the local average remains below the $3.39 state average and the $3.54 national average. Check out the complete Daily Fuel Gauge Report here.
Louisiana's revenue department will decide by next week whether to make changes to proposed regulations that spell out limits on the state's alternative fuel vehicle tax credit. The tax break program's cost has grown much larger than estimated and become a headache for Gov. Bobby Jindal's administration because of differing interpretations about what should be included. Proposed regulations would limit the tax credit program costs to an estimated $10 million, higher than initial projections but far less than analysts suggest the current law could cost. The regulations put forward by the Jindal administration would eliminate "flex-fuel vehicles" from being eligible for the tax break. Comments about the program were aired today at a public hearing by people who want the regulations rewritten. Ronald Gitz, executive director of the Society of Louisiana Certified Public Accountants, says flex-fuel cars and trucks—which have the ability to burn ethanol but also use...
Big Oil's bottom line is expected to take a pretty big hit in third-quarter earnings reports because of sharply lower natural gas prices in North America and downtime at production and refining facilities due to hurricanes and seasonal maintenance, The Houston Chronicle reports. ConocoPhillips reports its earnings today, followed by next week's blitz from BP, Exxon, Chevron and Shell. Tudor, Pickering, Holt & Co. analyst Robert Kessler says that among the biggest unknowns is the extent to which shutdowns affected profits at the major oil and gas companies. "Whether it be Alaska or the Gulf of Mexico or the North Sea, all faced some asset downtime, which affected the companies depending on where their assets are," Kessler says. Falling oil prices hit large crude producers like ConocoPhillips, which also could see cash flow constraints because of slower-than-expected asset sales, says James Sullivan, senior analyst for Alembic Global Advisors. Oil prices remain a key driver of...
The Pelican State has long prided itself on being a top producer of energy in the United States, and a new federal analysis of American energy production confirms Louisiana was the nation's No. 4 overall energy provider as of 2010. But the U.S. Energy Information Administration's analysis also shows Louisiana is the No. 3 energy consumer. It notes the state's high overall energy consumption is "driven largely by its industrial sector," and that Louisiana ranks second only to Texas for total industrial energy consumption. However, Louisiana's residents are also doing more than their fair share of energy consuming. "Louisiana's per capita residential electricity consumption is high, due in part to high demand for air-conditioning during the hot summer months and the widespread use of electricity as the primary energy source for home heating," the analysis says. Wyoming and Alaska are ranked as the top two energy-consuming states. On the production side, Texas ranks No. 1, Wyoming No.
The average price of a gallon of unleaded regular gas has decreased 8 cents in Baton Rouge over the past week, according to AAA Daily Fuel Gauge Report. As of this morning, gas is selling for $3.48 a gallon in the city, down from $3.56 a week ago. One month ago, gas was selling locally for $3.62 on average. But while $3.48 a gallon might look good compared to a week or month ago, it's still 16 cents higher than the $3.32 per-gallon-average of one year ago. Baton Rouge prices today remain below the state average of $3.50 per gallon and the national average of $3.66. However, all those averages could see significant decreases in coming weeks. USA Today is reporting this morning that average gas prices across the country could fall by as much as 50 cents a gallon in the near future due to rising inventory and lower demand. "Most of the country is heading appreciably lower the next few weeks,'' says Tom Kloza, of the Oil Price Information Service, who predicts retail prices will...
The Greater Baton Rouge Clean Cities Coalition is promoting the use of alternative fuel and advanced-technology vehicles from 12:30 to 6:30 p.m. today as part of Louisiana Alternative Fuel Vehicle Odyssey Day, being held at the Capitol Park Welcome Center, 702 North River Road. Executive Director Lauren Stuart says the nonprofit coalition has no preference among cars that run on natural gas, electric batteries or a hybrid of gasoline and electric. "We are fuel neutral, so we support all alternative fuels," Stuart says. However, the coalition does have opinions—based on success stories—on which fuels and technologies work best for certain uses: Hybrid cars are ideal for large fleets; electric cars are ideal for daily commuters; and heavy equipment that operates on compressed natural gas is best for construction sites. Stuart says cars with advanced technology are more durable than conventional gasoline-powered vehicles and have less wear and tear. And she says the biggest...
If you're planning on filling up in Baton Rouge today, you'll probably pay somewhere around $3.56 for a gallon of regular unleaded gas. According to AAA's Daily Fuel Gauge Report, today's average is 3 cents more than the Baton Rouge average a week ago. It's also a dime less than a month ago, but 23 cents higher than a year ago. Baton Rouge's average is 2 cents lower than the state average of $3.58 a gallon, which is 20 cents lower than the national average. Nationally, the $3.78 per gallon Americans are paying today is 3 cents less than they paid a week ago and 8 cents less than they paid a month ago—but 33 cents more than they paid a year ago. The highest average gas price in Baton Rouge was set on July 18, 2008, when a gallon of regular unleaded sold for $3.99. The U.S. average peaked a day previous at $4.11.
Entergy expects its third-quarter earnings to come in below its prior-year results and Wall Street's forecast, partly because of a higher income tax expense. The utility announced this morning that the year-ago period also benefited from an Internal Revenue Service¬–related settlement. Entergy anticipates third-quarter adjusted earnings of about $1.94 per share. A year earlier its earnings were $3.53 per share. Analysts polled by FactSet have predicted $2.11 per share. The company says earnings fell at both its utility and wholesale commodities segments during the quarter as they dealt with some increased expenses. The wholesale commodities unit also faced lower pricing for the nuclear fleet. Entergy Corp. still expects full-year adjusted earnings of $4.85 to $5.65 per share. Wall Street foresees $5.45 per share. Entergy delivers electricity to customers in Louisiana, Arkansas, Mississippi and Texas.
Horizontal drilling has been in the oil and gas industry's toolbox for a long time. But it was the development about five years ago of new chemicals that prevent algae growth that revolutionized hydraulic fracturing—or "fracking"—says Winston Porter, a former assistant administrator at the Environmental Protection Agency. "And it looks like most of this stuff is pretty benign stuff," Porter says. Porter is one of the guest speakers at the National Ground Water Association forum on Wednesday, Oct. 17, at the Baton Rouge Marriott, 5500 Hilton Ave. The two-day series of speakers and presentations begins on Tuesday, Oct. 16. A chemical engineer by trade, Porter has made his presentation "America's Energy Future" around the country. Now averaging about $3 per British thermal unit, natural gas is cheap in the United States, but is selling between $10 and $15 per Btu in India and China. Porter says overseas demand will eventually push domestic natural gas prices higher. Before...
Someday, Entergy Corp. may own power plants in Jackson, Miss., and Malvern, Ark. But no one's sure when, or even if, the New Orleans-based utility will complete its $469 million purchase of two natural gas–fired plants from KGen Power Corp. That's because the U.S. Justice Department may halt the deals. In 2010, the Justice Department told Entergy it was investigating whether the company had unfairly favored use of its own power plants, controlled transmission lines to strangle independent power generators, and then swooped in to buy their modern plants on the cheap. Entergy found out about the inquiry as it was buying a Louisiana generator, the fifth in a series of purchases. Now antitrust approval to buy two more has been delayed. "We don't know really what's going on at DOJ," Entergy CEO Wayne Leonard told investors on an April 26 conference call. Entergy spokespersons say the situation has changed little since then. Justice Department officials didn't respond to requests for...
As of the end of the second quarter, Louisiana ranks sixth in the country for total oil production and third for gas production, according to a newly released overview of drilling and production activity from the Oil & Gas Journal. While the northern portion of the state continues to be dominated by natural gas production along the Haynesville Shale, the report notes 2012 will not be as fruitful as in recent years. "During the last three years, gas production in the state has doubled, and in 2011, 62% of state gas production was sourced from the Haynesville," it reads. "Production levels have recently declined due to weak gas prices and a significant retrenchment in the number of rigs working in the Haynesville. Gas production in 2012 will fall from the 2011 level." The boom that hydraulic fracking has created in recent years is reflected in the ratio of gas to oil wells in the state, the report says. "In the mid-1980s, oil wells outnumbered gas wells two to one," it says,...
The biggest, baddest engines in the world, long chained to diesel fuel, are on the verge of a mass transformation because of cheap natural gas—with oil field equipment holding particular potential, reports The Houston Chronicle. The newspaper quoted executives gathered Thursday in Houston in the middle of a three-day summit of heavy fuel users and producers. "Here's the first reason that large engines are going gas: large engines burn the most fuel. I could try to make it harder, but that's pretty straightforward," says Joel Feucht, director of gas engine strategy for Caterpillar's energy and power systems division. Oil companies alone use nearly 1.2 billion gallons of diesel fuel a year just for pressure pumping equipment that supports hydraulic fracturing, says David Hill, vice president of natural gas economy operations for Encana Corp. After the diesel used to power drilling rigs themselves has been added to the equation, the total is more than 2.8 billion gallons...
The glut of natural gas unleashed by hydraulic fracturing—and the resulting low prices—make the idea seem like a no-brainer: Ditch coal-fired electric plants, with all their baggage involving air pollution and water consumption, and switch to natural gas. And as The Houston Chronicle reports, trends over the past year suggest that's starting to happen nationally, as natural gas has overtaken coal for generating electricity. Use of coal to generate electricity was down almost 18% for the first seven months of 2012, compared with the same period in 2011, according to the U.S. Energy Information Administration. Natural gas use was up by 30%. But low natural gas prices alone aren't enough to prompt power companies to shift multimillion-dollar investments. "Nobody's going to tear down a half-billion-dollar coal plant to put in a new natural gas plant just because natural gas is slightly cheaper," says Edward Hirs, an energy economist at the University of Houston. In a...
The oil and gas industry is being hit by "a tsunami of regulations" that threaten to add costs, suppress job growth and curb domestic energy production, the American Petroleum Institute says. In a conference call with reporters timed just two months before the Nov. 6 election, API officials accused the Obama administration of imposing unneeded regulations and ignoring industry input on the rules, The Houston Chronicle reports. "We've seen numerous examples of regulatory decisions that move in the wrong direction," says Erik Milito, API's upstream group director. In particular, Milito singled out the Interior Department's five-year plan for offshore energy development, which includes a dozen sales of Gulf of Mexico leases and three auctions of drilling rights in waters around Alaska. API's director of scientific and regulatory affairs, Howard Feldman, blasted the administration for advancing "a tsunami" of environmental rules that would apply only to U.S. refineries, not to...
A new proposed rule concerning Louisiana's alternative fuel tax credit law would eliminate flex-fuel vehicles from eligibility, thereby reducing the state's future exposure from an estimated $250 million a year to about $10 million, according to a fiscal impact statement. While the Revenue Department says less than 10% of eligible vehicle owners historically have claimed the credit, the statement notes the state's exposure under the old rule could exceed $400 million, based on vehicles sold since 2009 (and another $30 million already has been paid or claimed). "Revenue insists that door is closed" by the new rule, says Greg Albrecht, the Legislature's chief economist. William Potter, a CPA and director with Postlethwaite & Netterville, says he's still not entirely clear on what the rule change would mean. "I personally think it's a poorly drafted statute," Potter says. "I also think the...
On the campaign trail, both Mitt Romney and President Barack Obama have vowed to liberate the United States from reliance on foreign oil, offering voters a pledge of at least North American "energy independence." In some ways, that's an easy promise to make. As The Houston Chronicle reports, no matter who resides in the White House during the next four years, the United States is already on a trajectory to derive much of its oil and all of its natural gas from within its own borders, thanks to technologies allowing energy companies to harvest the fossil fuels from dense rock formations. But abundant domestic supplies don't guarantee a drop in the cost of energy, most analysts agree. That's because oil prices are set on a world market, subject to a complex mix of factors outside the United States' control. And even if the United States or North American oil imports plummeted to zero, the nation would still be connected to that global market. Michael Levi, a senior fellow for...
A series of television ads hit local airwaves today calling on state regulators to do a better job protecting Baton Rouge's drinking water supply. The 30- and 60-second commercials are part of a $100,000 media buy sponsored by Citizens for Clean Water and Land, a PAC that was incorporated last summer by a group of attorneys and landowners who "want to make sure polluters are held responsible for their actions and regulators are held responsible for enforcing regulations," says attorney John Carmouche, one of the PAC's founders. The ads, which will run for three weeks on local network and cable stations, are narrated by well-known civil engineers A. Hays Town II and Jimmy Jenkins, who have founded a separate organization, Save BR Water, to raise public awareness about saltwater intrusion into the municipal drinking water supply. Political consultant Roy Fletcher, who produced the commercials, says Town's group approached Carmouche's group about partnering on the campaign and it made...
Drivers in the United States feel less "pain at the pump" than all but a handful of other nations—most of which are major oil producers that heavily subsidize fuel prices. That’s the conclusion of Bloomberg’s quarterly gasoline price ranking, and one that’s at odds with the experience of many Americans. If filling the tank in the United States is as relatively inexpensive as the ranking shows, why do many Americans say it hurts so much? The gas ranking first ran in May, when U.S. gasoline prices spiked, to put some of the campaign-season economic and political debate into perspective. The pain factor is calculated by dividing a nation’s average price per gallon of gasoline by its average daily income; in other words, it’s the share of a person’s wallet needed to buy a gallon of gasoline in each country. But what this ranking doesn’t take into account is the amount of gasoline consumed. When that’s considered, a very...
For more than a decade, the world's biggest liquefied natural gas producers led by Royal Dutch Shell plotted how to move their $170 billion industry onto barges at sea to tap remote fields. Now they're finally doing it. The Houston Chronicle reports Shell will forge the hull of a floating LNG plant in South Korea by year-end that will be the world's largest vessel, weighing six times as much as the biggest aircraft carrier, a Nimitz-class warship. Some 5,000 workers will build the factory to produce LNG off Australia's northwest coast in a $13 billion project that also will shield Shell from escalating costs it would have to pay at the country's onshore plants. Rivals, including both Malaysia's Petroliam Nasional Bhd. and GDF Suez SA of France, likewise want to compress gas into liquid at sea, where many of the largest finds were made in the last decade. It's a generational change for a land-based industry that started about 50 years ago in Algeria, where Shell provided...
Entergy released its estimated tally on its total cost of damages caused by Hurricane Isaac this morning, saying it's somewhere between $400 million and $500 million. Those damages are expected to reduce Entergy's third-quarter revenue, the company says in a news release. Entergy says it will try to recoup the costs by all means available, including using reserves built up for just such events, as well as borrowing, insurance and—perhaps most important to Entergy's customers—additional user charges. No further details on how much customers may see bills increase as a result of the storm's cost were available as of this morning. Entergy notes that it's hard to predict how much of its restoration costs it may recoup through all of its efforts or when it may recover them. Entergy Gulf States Louisiana estimates costs in the Baton Rouge area were $70 million to $90 million, while costs across Louisiana totaled $240 million to $300 million. Meanwhile, Entergy Mississippi...
Entergy officials started tracking Isaac back when he was still getting organized in the Atlantic Ocean. The weekend before landfall, projections had the storm headed for Florida, and Entergy was preparing to send a support team to help utilities in the Sunshine State. But as the storm drifted west, Entergy realized Louisiana was going to need help.
The year Business Report was born, 1982, was not an auspicious time to launch a new venture. In fact, Louisiana was just entering the worst recorded recession in its history, according to economist Loren Scott.
Legislation would allow drilling to resume at inactive La. wells
Under a new bill making its way through the state Legislature, oil producers would be able to resume work, for a two-year, initial exemption period beginning in July, on inactive wells that had been deemed inactive prior to July 1, 2010. During that initial period, oil and gas production from the wells would face a lower severance tax. The (Lafayette) Advertiser reports that the legislation filed by second-year lawmaker Rep. Stuart Bishop, R-Lafayette, may prove to be one of the most important bills of the 2013 session, as it would benefit both state coffers and the interests of the state's oil and gas industry. House Bill 474 essentially restores some incentives for oil and gas producers to return to work on inactive wells, which produce no or little oil and, hence, no revenue for the state or the producer, says Don Briggs, president of the Louisiana Oil and Gas Association. Previous state severance tax exemptions lapsed in 2010. Oil and gas industry representatives say the...
American importer costs fall, pushed by cheaper oil
Prices paid by U.S. importers fell in April for the second straight month, pushed lower by another decline in imported petroleum. The Labor Department says import prices—which when decreasing help keep inflation in check—fell 0.5% last month compared with March, when prices had fallen 0.2%. It was the largest decline since a 0.6% drop in December. Imported petroleum products decreased 1.9% in April. Excluding petroleum, import costs dropped only 0.1%. Import prices have now fallen 2.6% over the 12 months ending in April. The prices charged by U.S. exporters, meanwhile, fell 0.7% in April compared with March. The decline was propelled by a 2.2% drop in U.S. farm exports. Over the past year, export prices have decreased 0.9%.
Pipelines spill three times as much oil as trains, IEA says
Pipelines in North America spilled three times as much crude oil as trains for comparative distances over an eight-year period, the International Energy Agency reports in a study it based on U.S. Department of Transportation data. However, as Bloomberg reports, the Paris-based energy adviser also says that the risk of a train spill was six times greater than a pipeline incident over the period between 2004 and 2012. The calculation included an estimate that the average load of crude carried by train travels 1,000 miles, which the organization says is conservative, since most Bakken crude, for example, is shipped 1,700 miles from North Dakota to St. James, La. The analysis of the eight-year period didn't include a spill of 715 barrels of crude from a derailment in Minnesota in 2013 that was more than double the amount spilled by trains in the previous four years, the report notes.
Interior secretary to oil industry: Don't throw regulators under the bus
Interior Secretary Sally Jewell delivered a blunt message to some of the nation's top oil industry executives during an inaugural meeting with the group on Wednesday: Don't cast blame our way. "I did poke them a little bit about not throwing the regulators under the bus or blaming us when there is actually shared responsibility, perhaps, when something doesn't move forward," Jewell tells The Houston Chronicle. "We don't want to be in the way of development, but we have a job to do protecting the assets of the American people." The closed-door gathering at the Offshore Technology Conference included top representatives from oil companies Anadarko, BP and Marathon Oil, as well as contractors FMC Technologies, Halliburton, Transocean and Schlumberger, and the trade groups American Petroleum Institute and National Ocean Industries Association. Some oil industry leaders have loudly complained about the pace of regulatory changes coming from the nation's capital and pleaded for a...
Company sees big business in blowout preventers
In the frantic days and weeks after BP's Macondo well exploded on April 20, 2010, blame was focused on a piece of equipment to which, under ideal circumstances, people don't give much thought. Bulky, heavy and designed for redundancy rather than beauty, blowout preventers are the last line of defense against a runaway well. But the collection of valves and shears sitting atop the BP well on the bottom of the Gulf of Mexico failed to stop the flow of oil in 2010. Three years later, Pete Miller, CEO of National Oilwell Varco, still bristles at the suggestion that the blowout preventer was at fault. Never mind that his company didn't make it—competitor Cameron International built the device—and wasn't involved with the Macondo well. As The Houston Chronicle reports, Miller has staked a piece of his company's future on expanding production of blowout preventers and exporting them around the world. So he takes criticism of the blowout preventer used on the Macondo well...
No injuries reported following overnight oil tank explosion
As of this morning, no injuries have been reported following an overnight explosion of an oil tank in the Denham Springs area, The Associated Press reports. The occupants of about 30 to 35 homes in the area of the explosion were evacuated as emergency rescue responders worked to contain fire at the site. Livingston Parish Office of Homeland Security and Emergency Preparedness Director Mark Harrell tells The Times-Picayune that one of two oil holding tanks at the scene ruptured and caught fire. He says it wasn't known why the tank ruptured. The second oil tank had not exploded but was bulging from the heat. Harrell says the fire has been contained in a 200-square-foot area. He added that evacuated residents will be allowed to return to their homes once the fire is out.
Louisiana, Texas community groups sue EPA for emissions
Community groups in Louisiana and Texas have filed a lawsuit against the U.S. Environmental Protection Agency accusing it of using "outdated and inaccurate formulas" to report emissions from refineries and chemical plants. The Louisiana Bucket Brigade, The Environmental Integrity Project in Texas, Air Alliance Houston and other groups filed the lawsuit today in the U.S. District Court in Washington. The groups say recent studies at three large Gulf Coast refineries found emissions to be up to 100 times higher than estimates reported to the agency using what the environmental community believes to be "outdated and inaccurate" information and technology. The Associated Press could not immediately reach the EPA this morning for comment on the lawsuit.
Holden defends hiring Florida firm in BP suit
Mayor Kip Holden is defending a contract that his chief administrative officer, William Daniel, signed with a Florida law firm to represent the city-parish in a claim against BP regarding the 2010 Gulf oil spill. Some Metro Council members are questioning the deal because the firm, Farrell and Patel of Coral Gables, Fla., will get 40% of any money it recovers from claims of lost revenues as a result of the spill. "We didn't go out hunting for this firm," Holden tells Daily Report. "They came to us and said, 'This money is out there. … Are you interested in trying to get it?' Our answer was yes." Some council members have suggested local law firms would charge much less on a contingency basis than 40%. But Holden says out-of-state firms are involved in a variety of class action suits in the state, including the multibillion-dollar tobacco litigation. What's more, he says, "If local law firms knew about the potential of recovering money from BP, why didn't they call us?"...
BP to give $340 million for La. coastal restoration efforts
BP has agreed to fund approximately $340 million in coastal restoration projects for Louisiana, Gov. Bobby Jindal says. The investment is part of the $1 billion that BP agreed to pay for damaged natural resources resulting from the Deepwater Horizon oil spill of 2010. The $340 million will go toward the restoration of four barrier islands from Terrebonne Parish to the east bank of Plaquemines Parish, as well as two Fish Stock Research and Enhancement Centers. Prior to today's announcement, BP had only approved 10 projects, representing nearly $70 million of the $1 billion it has agreed to pay. Jindal says the state has been frustrated by the slow pace of progress from BP in committing funds for restoration needs and that this new investment is long overdue. "We are going to hold BP accountable for all of the damages they have caused to our coast, our fishermen, our small businesses and our families," the governor says in a statement. Although the spill occurred three years ago,...
BP's profit triples in 1Q, but Gulf oil spill liabilities remain uncertain
British oil giant BP says its first-quarter profit nearly tripled as it recorded a big gain from the sale of its 50% stake in a Russian joint venture. The company has reported its profit attributable to BP shareholders for the three months ended March 31 was $16.86 billion, compared to a profit of $5.77 billion a year earlier. Revenue in the quarter rose 10% to $107.21 billion, compared to $97.42 billion a year earlier. BP completed the sale of its interest in TNK-BP to Rosneft on March 21, for a total of $27.5 billion in cash and Rosneft shares. The gain on the sale was $15.5 billion for BP. As for its continuing liability from the 2010 Gulf of Mexico oil spill, BP says its total cumulative charge for the disaster remained at $42.2 billion at the end of the January-March quarter. There persists significant uncertainty, however, about what its total financial exposure will be, BP says. The first phase of a civil trial in federal court in New Orleans ended earlier this month. The...
Offshore workers 7 times more likely to die on the job, study says
The chance of getting killed while working in the offshore oil and gas industry is seven times higher than for all workers in the United States, according to a new study by the Centers for Disease Control and Prevention of offshore fatal injuries between 2003 and 2010. As The Times-Picayune reports, it's getting to work that is the most dangerous part of an offshore worker's job. The study concludes that 65 of the 128 deaths during the seven-year period studied, or 51%, were attributed to transportation accidents, and 49 of those involved helicopter accidents, all in the Gulf of Mexico. "Catastrophic events like the Deepwater Horizon explosion attract intense media attention, but do not account for the majority of work-related fatalities during offshore operations," says an editor's note accompanying the study. "This report found that transportation events (specifically helicopter crashes) were the most frequent fatal event in this industry." The study also points out that...
Methanex announces second plant relocation to Geismar
Cheap natural gas and a $1.2 million state grant have helped lure a second Methanex methanol plant to Geismar. Gov. Bobby Jindal joined Methanex officials in Gonzales today to announce the second plant relocation today—at a job fair being held to begin filling 130 positions for the first methanol plant, which is expected to be operational by the end of next year. Canada-based Methanex will receive a $1.2 million performance-based grant from the state for site infrastructure improvements on the second plant, which will bring an estimated 35 new jobs to the area and $550 million in total capital investment. In total, the two Geismar plants will bring a $1.1 billion investment to Ascension Parish. LED officials estimate the two plants could bring a total of 1,368 in direct and indirect jobs to the area. Methanex officials say they will break ground on the second plant in 2014, with construction expected to take about two years. In addition to the grant, Methanex is expected to...
Lease sale to offer up to 21.1 million acres of Gulf for oil, gas drilling
A Gulf of Mexico lease sale scheduled to take place Aug. 28 in New Orleans will offer up drilling rights on 3,953 blocks spanning roughly 21.1 million acres, the U.S. Department of the Interior announced today. The lease sale will come one year after a similar auction of Gulf acreage netted nearly $134 million, The Houston Chronicle reports. For the first time in years, companies will not be able to take advantage of a federal royalty relief program aimed at gas extracted from deepwater tracts purchased in the lease sale, since that provision is set to expire May 3. And while companies will have a chance to bid on acreage near the international boundary dividing the United States and Mexico continental shelf, those offers may never be unsealed. The area has been off-limits for more than a decade. The Interior Department has more on today's announcement
Report says fracking database 'fails'
A new report raises serious concerns about the online database used by 11 states, including Louisiana, to track the chemicals used in hydraulic fracturing, or fracking. The Harvard Law School report says FracFocus, a registry site formed by industry groups in 2011, has loose reporting standards, makes it difficult for states to track whether companies submit chemical disclosures on time, and allows for inconsistency in declaring chemicals trade secrets. Along with Louisiana, Colorado, Pennsylvania and Oklahoma are among the states that require companies to divulge fracking chemicals through FracFocus. The controversial method, which involves pumping water, fine sand and chemicals underground to split open oil- and gas-bearing rocks, is credited with the natural gas boom that has been bolstering the economy in many areas of the nation. You can find the complete report, "Legal Fractures: Why the Voluntary Chemical Disclosure Registry Fails as a Regulatory Compliance Tool,"
ExxonMobil official touts conservation, fracking
What's the most important thing the world's industries can do to ensure a reliable energy supply? According to an ExxonMobil official: Use less of it. "The largest source of energy for the future is learning how to use it more efficiently today," says Paul Stratford, manager of the company's Baton Rouge chemical plant. Of course, conservation only gets us so far. While renewables are projected to become more important to the world's energy mix, he says, oil, natural gas and coal still are expected to be the primary fuel sources through 2040. As unconventional recovery methods like hydraulic fracturing, or fracking, increase the availability of natural gas, gas is beginning to displace coal to an extent. Exxon recently announced a more than $200 million investment in its Baton Rouge chemical and lubricants plants. It's also planning a multibillion-dollar expansion of its Baytown, Texas, chemical plant. "I would like to see this kind of project in Baton Rouge as well," Stratford says,...
Nearly 17K Louisianans sign petition in support of Keystone XL pipeline
The Louisiana Mid-Continent Oil and Gas Association says its effort to get residents in the state to sign a petition in favor of the controversial Keystone XL pipeline has netted 16,997 signatures. The association worked with the Consumer Energy Alliance to get the signatures on the petition, which will be sent to the U.S. Department of State. "Construction [of the pipeline] will bring new jobs, new customers, new business, new sales and new investment. New infrastructure projects are a big part of what can be done to boost the economy—we need it now," says LMOGA President Chris John in a prepared statement. The association's announcement on its petition comes one day after the Environmental Protection Agency sent a letter to the State Department urging it to conduct a more thorough analysis of oil spill risks and alternative pipeline routes, as well as greenhouse gas emissions associated with the $7 billion pipeline. Despite more than four years of study, the State...
Baton Rouge files suit against BP, Transocean and contractors
Claiming more than $35 million in damages, the city of Baton Rouge has filed suit against BP and many of its contractors over the 2010 Gulf of Mexico oil spill, according to court documents. The suit, filed on Friday, says the city's losses include, but are not limited to, "the loss of business, loss of profits, loss of revenue, loss of equity, loss of earnings and impairment of earning capacity, diminution of property and business value, cost of cleanup, response, removal, restoration, and remediation of oil contaminated properties and waters." Specifically, the city says the oil spill caused it to miss out on approximately $9 million in business, sales, occupancy and gaming taxes, as well as licenses and permits. The suit has been assigned to U.S. District Judge James Brady. The city is represented by New Orleans attorney Sarah Spigener, as well as Wesley Farrell and Terry Gray of Coral Gables, Fla.-based Farrell & Patel, according to the suit. Along with BP, others named in the...
Drilling down
The lower half of Louisiana is an oil-rich area. Oil prices are at a fairly respectable $94 a barrel.
Parish official remains confident about Tuscaloosa shale
While there are few active wells in his parish now, and getting solid information from oil companies "is like pulling teeth," Dennis Manshack, director of economic development for West Feliciana Parish, still sounds confident about prospects for the Tuscaloosa Marine Shale play. "One [well] in our parish is producing about 500 barrels a day, and it's not on an artificial pump, it's actually pressure coming out of the ground," he says. Another Tuscaloosa well across the state line in southwest Mississippi is producing 1,200 barrels a day. "They have gone from 250 barrels to 1,200 barrels a day, just by changing the method to get the oil out of the ground," Manshack says. "It's coming. They don't spend $8 million to $10 million on a drilling rig to drill without knowing something's there." Interviews were held this week in West Feliciana for a worker-training program by the Petroleum Education Council. Participants will pay $500 for a 10-day intensive training program specifically...
New agreement reached to manage Baton Rouge water supply
An agreement has been finalized between the Capital Area Ground Water Conservation Commission and the Louisiana Office of Conservation to coordinate efforts on meeting goals for maintaining the sustainability of the East Baton Rouge Parish water supply. Commissioner of Conservation Jim Welsh signed this week a memorandum of understanding approved last month by the local conservation commission. In part, the agreement helps clarify the roles of the groups, which have separate, but overlapping authority over management of the Southern Hills Aquifer system supplying the Baton Rouge area. According to a news release, CAGWCC has wider immediate powers as the frontline management authority to take action in its jurisdiction, but the Office of Conservation has a wider range of staff expertise to analyze data and recommend actions for resolving management issues. The new agreement, Welsh says, will help both agencies "manage groundwater in the Baton Rouge area and deal with saltwater...
Foreign investment in American shale plays ramps up
Since 2008, foreign companies have invested more than $26 billion in tight oil and shale gas plays in the United States, The Houston Chronicle reports, citing a new analysis published by the U.S. Energy Information Administration. Among recent deals, for example, earlier this year the Chinese company Sinochem inked a $1.7 billion joint venture with Pioneer Natural Resources to acquire a stake in the Wolfcamp shale play in West Texas. Overall, investment in shale plays in the United States totaled $133.7 billion between 2008 and 2012, EIA says. The agency says most of the recent joint venture deals with foreign companies involve liquids-rich areas such as the Eagle Ford, Utica, and Wolfcamp. Plays with a higher liquid-to-gas ratio are more attractive because of the higher value of hydrocarbons that have crude oil and petroleum liquids in addition to natural gas, EIA says. Most of the foreign investment in joint ventures involves buying a percentage of the host company's shale...
LSU professors get grant for 'fracking' lab
A pair of LSU professors have received grant funding to establish a first-of-its-kind lab at the university that simulates hydraulic fracturing—a technique for oil and gas drilling better known as "fracking." Juan Lorenzo, associate professor of geology and geophysics, and Arash Dahi Taleghani, assistant professor of petroleum engineering, received the nationally competitive grant from the Research Partnership to Secure Energy for America. The new fracking lab on campus will allow the duo to control all of the variables in the process and test hypotheses to understand how and why rocks break in a particular way during the fracking process. Over the next two years, the Gas Technology Institute in Chicago will head a team of experts from LSU, Lawrence Berkeley National Laboratory, University of California at Berkeley, and the private sector to develop advanced methods and techniques for the design and execution of environmentally safe and economically efficient fracking. The...
Kinder Morgan to spend $58M on Geismar plant expansion
Kinder Morgan Energy Partners announced this morning plans to invest $58 million to expand the chemical storage capacity at its Gesimar plant. The expansion is being driven by a long-term contract Kinder Morgan has signed to support Methanex Corp.'s relocation of a Chilean methanol production plant to Geismar. Kinder Morgan's investment will include the construction of a methanol storage facility near its Geismar Liquids Terminal, according a news release. Kinder Morgan will build, own and operate the storage tanks and related infrastructure. "The assets will provide critical marine, rail and truck access in support" of the relocated Methanex plant, Kinder Morgan says in the release. The terminal infrastructure is expected to be in service during the second half of next year, coinciding with the anticipated startup of the relocated plant.
B.R. gas prices trickle down for fifth straight week
For the fifth straight week, gas prices fell by a few cents over the past seven days, according to the AAA Daily Fuel Gauge. As of this morning, a gallon of regular, unleaded gas was selling for an average of $3.43, down 4 cents on the week. The slow trickle down began at the end of February, when prices had been steadily rising for more than a month and a gallon of gas was selling for about 25 cents more compared to today. Last year at this time, gas was selling for $3.79 in the Baton Rouge metro area. The local average continues to remain below both the state and national average. The Louisiana average is at $3.46 at the start of April, which is 4 cents lower than a week ago, 16 cents lower than a month ago and 34 cents lower than a year ago. The U.S. average is at $3.63 this morning, down 3 cents on the week and 12 cents on the month. A year ago, the U.S. average was $3.92. You can see the complete report
Shell shuts Gulf crude pipeline after leak in Louisiana
Royal Dutch Shell has shut a 170,000-barrel-a-day pipeline that moves Gulf of Mexico crude to Houma after the pipe leaked in Terrebonne Bay, Bloomberg reports. Shell shut the 16-inch pipeline, which starts on Caillou Island, at about 5 p.m. Saturday after a light oil sheen was observed near a pump station, Kim Windon, a Houston-based spokeswoman for Shell, confirms in an email. Less than a gallon of crude was released, based on initial information, she says. Shell plans to inspect and repair the pipeline as soon as possible, weather permitting, and is investigating the cause of the leak, Windon adds. The Caillou-to-Houma pipeline connects with a 20-inch pipeline that brings crude from producers in Eugene Island, Ship Shoal, Green Canyon and other Gulf formations to Caillou Island.
Rig chief mate: Training saved lives after BP blowout
A Transocean employee who served as chief mate on the Deepwater Horizon oil rig testified today that he believes the rig crew's emergency training saved lives following the 2010 explosion that killed 11 workers and triggered the nation's worst offshore oil spill. David Young, who was second-in-command to the rig's captain, testified that he believes 115 workers managed to escape the burning rig that BP had leased from Transocean because they followed their training. "What would you say the top priority of the Deepwater Horizon crew was?" Transocean attorney Luis Li asked at the start of the fifth week of a federal trial over the disaster. "For everybody to be able to go home safely back to their families," said Young, a witness called by his employer, a Swiss-based drilling company. Young, now the captain on a different Transocean-owned rig in the Gulf, said he believes the rig's crew had an excellent safety culture. But plaintiffs' attorneys have accused BP and its contractors of...
Chevron makes deepwater oil discovery off Louisiana coast
Chevron Corp. announced this morning that it has struck oil at the Coronado prospect in the deepwater Gulf of Mexico about 190 miles off the coast of Louisiana. The well is located in waters about 6,100 feet deep and is drilled to a depth of about 31,800 feet deep. The well results are still being evaluated, Chevron says, and additional work is needed to determine the extent of the find. Chevron has a 40% working interest in the prospect and is also the operator of the well. Its other owners are ConocoPhillips, which has a 35% stake; a subsidiary company of Anadarko Petroleum Corp., with a 15% stake; and Venari Offshore, with a 10% stake. The discovery has been made in an area of the Gulf in which Chevron is exploring "multiple projects," says Gary Luquette, president of Chevron North America Exploration and Production Co., in a prepared statement. "It also highlights the importance of the deepwater Gulf of Mexico as a source of domestic energy for the United States," he notes.
Louisiana LNG plant to begin exporting to U.K. in 2018
A British firm today signed its first liquefied natural gas import deal with Houston-based Cheniere Energy for 20-years' worth of shipments from the Sabine Pass LNG plant outside Lake Charles, Reuters reports. The shipments are to start in September 2018. The deal, which includes enough fuel for an estimated 1.8 million homes annually, is the first-ever, long-term LNG supply deal for Britain, and it marks a breakthrough for U.S. gas in Europe. The 20-year deal has an option for an additional 10 years of shipments. Prime Minister David Cameron welcomed the deal for diversifying the UK's energy mix away from dependency on a small group of existing gas suppliers and for giving Britain its first taste of cheap U.S. shale gas. Home energy costs have been surging in the U.K. in recent years because of scant supplies. Reuters first reported earlier this month that Britain's biggest household energy supplier, Centrica, was in talks with U.S. companies to secure the country's first long-term...
Gas prices fall 4 more cents in B.R.
After steady rises throughout the first two months of the year, gas prices in Baton Rouge have now trickled down for four straight weeks, according to the AAA Daily Fuel Gauge. As of this morning, a gallon of regular unleaded gas is selling for an average of $3.49 in Baton Rouge, down 4 cents compared to the average price a week ago. One month ago, the average local price was $3.65 per gallon, and gas is now selling for 27 cents less than it was at this time last year. The AAA Daily Fuel Gauge tracks prices in metro areas across the United States. The Louisiana average as of this morning is $3.50, down 3 cents on the week and 16 cents on the month. The U.S. average is $3.66, which is an increase of 2 cents on the week, but a decrease of 12 cents compared to a month ago. Hawaii is paying the highest average price in America, at $4.39. Wyoming motorists are paying the lowest average price in the country, $3.32. You can check out the complete report
Workforce shortage poised to pound energy industry
To highlight the major shortage of skilled workers the energy industry faces in the coming decade, Daniel Lumma, senior vice president of Kiewit Oil, Gas and Chemical North America in Houston, points to Lake Charles. Major gas-to-liquids projects worth billions of dollars announced in recent years are projected to create thousands of jobs. But, as Lumma told members of the American Fuel and Petrochemical Manufacturers at its annual meeting in Houston on Tuesday, filling those jobs is going to a nearly insurmountable challenge. "If all of those projects happen, the peak workforce would have to multiply five to six times above what it is right now," Lumma says. "The fact is, that's not going to happen. We're heading into a very, very significant demographic issue." There are about 4.5 million to 5 million skilled trade workers in the oil and gas industry in North America, and that's down about a million from the mid-2000s, The Houston Chronicle reports. Another statistic Lumma...
Deep trouble
The drinking water in Baton Rouge has long been a source of civic pride. The quality of the water has been lauded for decades, and its crisp, clean taste regularly wins national awards.
B.R. gas prices lower 3 cents on the week
The average price of a gallon of regular, unleaded gas fell 3 cents on the week in Baton Rouge, hitting $3.51 as of this morning, according to the AAA Daily Fuel Gauge report. That makes it three straight weeks in which gas prices posted a decline in the city. One month ago, gas was selling for 3 cents higher than it is today. A year ago, gas was 15 cents higher, at $3.66. The Louisiana average price is $3.53 as of this morning—also three cents lower than one week ago, and 13 cents lower compared to a year ago. Local and state averages remain well below the national average of $3.68 per gallon. National prices have fallen one penny on the week and are the same as they were one month ago. A year ago, the U.S. average was $3.83 per gallon. Complete details can be found in the AAA Daily Fuel Gauge report here. Meanwhile, a recent report in The New York Times...
State, oil and gas industry work toward middle ground on tax incentives
Louisiana Oil & Gas Association President Don Briggs says his industry is working with the Jindal administration to adjust the state's tax incentive programs. "Some things are going to stay, some things are going to be taken out," Briggs says. "We're just going to have to give a little bit." For example, the state has a severance tax exemption for horizontal wells that lasts for two years or until the wells pay off their costs, whichever comes first. That might be changed to a five-year, 50% reduction, which would still benefit well owners but provide more upfront money to the state, Briggs says. Department of Revenue head Tim Barfield says they're looking for a balance that raises more money yet doesn't put the state's oil and gas industry at a competitive disadvantage, keeping in mind that the industry will benefit from the elimination of income and franchise taxes. In other words, Barfield wants incentives that are generous enough to keep companies drilling in Louisiana, but not...
Big oil, gas launch offensive to preserve tax incentives
The oil and gas industry's biggest trade group is launching a new ad campaign aimed at dissuading lawmakers from cutting tax incentives cherished by the sector. The Houston Chronicle reports the TV commercials by the American Petroleum Institute will air in the nation's capital as lawmakers inch closer to a broad debate over remaking the nation's tax code and as the Obama administration readies a federal budget proposal expected to once again target industry tax breaks for elimination. Sen. Robert Menendez, D-N.J., just reintroduced legislation that would block the nation's largest oil companies from claiming a suite of tax deductions. "We decided to run the ads to remind Congress that at a time when many families have had to scramble to balance their budgets, asking them to pay more for the energy they need to live their lives is bad policy and, frankly, bad politics," says Marty Durbin, API's executive vice president. API isn't the only group joining the fray. The National...
Obama's policies could hinder U.S. energy production, U.S. Chamber lobbyist says
The chief lobbyist for the U.S. Chamber of Commerce told BRAC shareholders today that policies of the Obama administration could hinder the country's progress toward becoming the worldwide leader in production of oil and natural gas. Bruce Josten, executive vice president of government affairs with the U.S. Chamber, says the country is witnessing "one of the most important transformational changes of our lifetimes" on the energy front. "Amazingly, all of these advances … are taking place despite the president's policies on energy, not because of them," says Josten, who delivered the keynote address at BRAC's annual shareholders meeting this morning. He specifically criticized President Barack Obama for blocking drilling on federal land. "We are positioned to be far more competitive in manufacturing if we get the right policy prescription in place," he says. "And to do that, in my opinion, we have to look at our natural resources the way the Canadians do, as national assets to...
Startup turning natural gas into liquid fuels
America is awash in natural gas, thanks to the controversial practice of hydraulic fracturing, or fracking. And now a San Francisco startup company, Siluria Technologies, has a new way to turn that gas into chemicals, jet fuel and gasoline, The Houston Chronicle reports. The ability to make liquid fuels from natural gas has existed since the 1920s. But up until now it hasn't been cheap, requiring high heat and pressure to work. Siluria's technology needs less heat and less energy—and therefore costs less. The company is gearing up to build its first demonstration plant. And it has hired a new chief executive officer with deep experience in the chemical industry to guide Siluria out of the lab and into the marketplace. "There's going to be this long period of time when we have this excess gas," says Edward Dineen, the company's new CEO. "If you believe that, and I do, then having technologies that give you better options for that gas would make sense." Dineen most...
B.R. gas prices rise for fourth straight week
As of this morning, the average price for a gallon of regular unleaded gas in Baton Rouge is $3.54—16 cents higher than it was just one week ago. It marks the fourth straight week that local gas prices have risen, according to the AAA Daily Fuel Gauge Report. One month ago, gas was selling for $3.19 in Baton Rouge. One year ago, it was selling for $3.48 locally. The average price for a gallon of diesel has also risen sharply in Baton Rouge, and is at $3.97 this morning—a dime more than a week ago and a quarter more than one month ago. The Louisiana average for a gallon of regular unleaded gas is at $3.56 this morning, which is 17 cents higher than a week ago, 35 cents higher than a month ago, and 7 cents higher than a year ago. However, the local and state averages remain below the national average of $3.73 for a gallon of regular gasoline. The national average is 15 cents higher than a week ago, 43 cents higher than a month ago, and 18 cents higher than a year ago. You...
BP inks 20-year LNG export contract for Texas terminal
BP has signed a 20-year agreement to ship liquefied natural gas processed at a terminal in Freeport, Texas, which is the first of several facilities awaiting federal approvals for natural gas exports, a Freeport LNG executive announced today. The agreement would commit BP to pay for processing of 4.4 million tons of LNG per year at the Freeport LNG facility, where it would be loaded onto BP tankers and shipped abroad, Freeport LNG CEO Michael Smith tells The Houston Chronicle. "I think it sends a very strong message that a super major made this commitment," Smith says. "It makes sense to export gas, and they want to be in one of the first facilities of its kind to be able to export gas." BP marks the third company to sign an agreement to buy LNG exported from the facility; two Japanese companies, Osaka Gas and Chubu Electric Power, have contracted for another 4.4 million tons of LNG per year from the facility. The construction and shipping of natural gas from the Freeport site...
B.R. gas prices continue to climb
Another week, another nickel. After spiking 13 cents the week previous, the price of a gallon of regular unleaded gas in Baton Rouge rose by another 5 cents over the past week. As of this morning, Baton Rouge motorists are paying about $3.38 a gallon. That's 17 cents more per gallon than they were paying one month ago, but it's still 6 cents cheaper compared to last year at this time. Baton Rouge's average price is now just a penny below the state average of $3.39—which is also up 5 cents on the week. The state average is also lower than the national average of $3.58, up 6 cents over the past week. U.S. average prices have climbed 27 cents over the past month and are 8 cents higher this morning than they were one year ago. You can check out the complete AAA Daily Fuel Gauge Report here for gas price information from every state and major metro area in the...
Genesis Energy to expand terminal, build crude pipeline to Exxon's B.R. refinery
Houston-based Genesis Energy plans to spend $125 million to modernize and expand its Port Hudson terminal, and construct an 18-mile crude oil pipeline connecting the terminal to ExxonMobil's Baton Rouge refinery. The project, which was jointly announced by Gov. Bobby Jindal and Genesis President and COO Steve Nathanson this morning, is expected to create 50 new jobs. The expansion also will result in an estimated 220 new indirect jobs, along with 45 construction jobs, LED says. Construction will begin soon, with the terminal and new crude oil pipeline work to be completed by the end of the year. The pipeline, 20 inches in diameter, will have an estimated capacity of 350,000 barrels of crude oil per day. LED says Genesis is expected to utilize Louisiana's Quality Jobs and Industrial Tax Exemption incentives for the project. In addition to improvements at the company's existing terminal in Port Hudson, including barge dock and truck station facilities, Genesis will add approximately...
Methanex addresses second Geismar plant
Despite a Methanex Corp. quarterly report released Thursday in which company officials appeared to confirm reports that it plans to relocate a second methanol plant from Chile to Geismar, a company spokesman says Methanex has not made a final decision on the matter. "We are evaluating the potential relocation of a second plant from Chile to Louisiana and expect to make a decision on this second relocation in the first half of 2013," says Baljit Lalli, communications manager. A line in the company's quarterly report refers to "the second facility that management also intends to relocate to Geismar." Methanex announced in July that it was relocating one plant from Chile to a 225-acre site in Geismar. That plant is expected to be operational sometime in the second half of 2014. "A key area of focus for me as the new CEO will be the successful execution of our value-creating growth projects in Louisiana and New Zealand," says Methanex President and CEO John Floren in the quarterly...
BP to learn its fate in Gulf oil spill criminal case
It's judgment day for BP. The British oil giant will learn today whether a U.S. judge accepts or rejects a criminal plea deal the company reached with the Justice Department over the 2010 Gulf of Mexico rig explosion and oil spill, The Houston Chronicle reports. The setting is a federal courtroom in New Orleans. U.S. District Judge Sarah Vance has said she will announce her decision at the hearing, which was set to begin at 10 a.m. Lawyers for BP and federal prosecutors are expected to address the court. So, too, will relatives of some of the 11 men who were killed when the Deepwater Horizon drilling rig exploded and sank. Federal probation officials have filed under seal a pre-sentence investigation report and recommendation, which the judge will review. It has been revised or added to twice since the original report was issued, records show. Today's hearing is likely to be crowded and emotional. BP has agreed to plead guilty to 14 criminal charges, including manslaughter and...
Manufacturing boom predicted in La. despite uncertainty
Louisiana and the Gulf Coast likely will be the prime beneficiaries of a natural gas–fueled industrial building boom over the next several years, says David Dismukes of LSU's Center for Energy Studies. However, several variables— such as tax reform, which will be a hot topic at this year's legislative session—could affect the economics of some of those potential projects, he says. "Everybody's sitting back waiting and watching," Dismukes says, when asked about the state-level tax reform conversation. "They will sit down and redo the books on these projects as soon as they get a more concrete idea of how it's going to change things." The Jindal administration wants to protect incentives such as exemptions for business utilities and purchases of manufacturing machinery and equipment. However, Dismukes says the state's Quality Jobs and Enterprise Zone programs could be in play. Changes in federal tax policy and environmental regulations also could make a difference,...
Gas prices inch up in B.R.
The average price of a gallon of regular unleaded gas ticked up 2 cents over the past week in Baton Rouge and hit $3.20 this morning, according to the AAA Daily Fuel Gauge Report. A week ago, gas was selling for $3.18 per gallon on average locally; a week before that, $3.21. The average price today is 9 cents higher than it was one month ago, but 12 cents lower than it was one year ago. Baton Rouge's average price remains just below the state average of $3.21, which is also lower than the national average of $3.34. You can check out the complete AAA Daily Fuel Gauge Report here for gas price information from every state and major metro area in the country.
Association anticipates ongoing tight times for natural gas production
Natural gas is the most important feedstock for Louisiana chemical plants, so cheap gas has been a big plus for the Capital Region in recent years and, on balance, for the state as a whole. But for producers, low natural gas prices are forcing a shift into oil and liquid plays. In 2008, 82% of all the rigs in the United States were drilling for natural gas, says Don Briggs, president of the Louisiana Oil & Gas Association. Today, only 25% are doing so. In Louisiana's Haynesville Shale, the number of rigs has plummeted from 140 at one point to 17. A price of about $5 per million British thermal units would still be good for the plants, Briggs says, while allowing producers to make a profit. "But $3.80 is a little tough," he says. "You can't drill for something, if it's costing you $4 to find, you can't find it and sell it for $3.50." Natural gas is expected to remain cheap for a few more years, although liquid natural gas exports may help lift the prices to some extent, Briggs says.
Association head defends drilling tax breaks
As lawmakers review the state's tax breaks, Don Briggs, president of the Louisiana Oil & Gas Association, hopes an incentive for horizontal drilling survives. While some estimates show the incentive costs the state more than $200 million a year, Briggs says that number is unrealistic when there are only about 17 rigs drilling in the Haynesville Shale, as compared to 140 when natural gas prices were high. He says $36 million over the next two years is a more realistic cost estimate. "It's an important credit, especially with prices as low as they are," Briggs says. "I know one company just last night told us they were moving four rigs [into the Haynesville Shale], and they're very concerned about losing this exemption." The Haynesville, a natural gas play in north Louisiana, is competing with formations in other states, such as the Marcellus Shale in the Northeast, which is rich with liquids as well as natural gas. As for other tax benefits important to his members, Briggs mentions a...
LEAN says fracking regulations won't hurt industry
In the latest debate on hydraulic fracturing, the Obama administration scrapped a 2012 plan to impose tough new mandates governing the use of the drilling technique on public lands. Earlier this month, LOGA President Don Briggs found himself battling Hollywood, not regulators, over the way the Matt Damon movie Promised Land, directed by Gus Van Sant, portrays fracking. "It's dangerous to the industry because it's not factual," Briggs says. Though officials with the Louisiana Environmental Action Network say they did not see the movie, they're concerned about fracking not only in Pennsylvania—where the film is set—but also along the Tuscaloosa Marine Shale, closer to home. "You need sufficient regulatory requirements on the...
Friendly business environment fuels U.S. oil boom, report says
A favorable business climate in the United States has helped make the country the world leader in the shale revolution, according to a new report, "Energy and the New Global Industrial Landscape: A Tectonic Shift?" As The Houston Chronicle reports, research firm IHS notes in the report that shale gas and tight oil deposits are being discovered all over the world. However, the report adds that the U.S. has the right economic ingredients to help the industry flourish, including private property ownership rights, good energy infrastructure and access to risk-based investment capital. "This is primarily a story of market forces and entrepreneurship, not government incentives or intervention," IHS writes in the report. IHS projects that growth in unconventional oil and gas will add more than 3 million jobs by 2020 and generate more than $110 billion in taxes. U.S. oil output has increased 25% since 2008 to about 6.4 million barrels per day. Natural gas supplies also have surged,...
Oil companies read tea leaves to discern industry's future, formulate strategies
Predicting energy demand, population growth, policy changes and other global trends that will affect oil prices and industry strategy decades from now is far from an exact science. But as The Houston Chronicle reports, major oil and gas companies see value in trying. BP, Royal Dutch Shell and Exxon Mobil Corp. are among the companies that publish outlooks forecasting the future of the energy sector. BP's updated 2030 outlook is set for release Wednesday. The goal: to figure out what the energy world will look like in the future so they can make the most profitable exploration and production decisions today. By releasing their conclusions publicly, these companies also spark an annual conversation about the world's energy needs. "You have to know what the future framework is before you can make commitments that are in the billions to tens of billions of dollars," explains John Felmy, the American Petroleum Institute's chief economist. The challenge is how to forecast events 20...
La. has spent nearly $24M on oil spill litigation
Louisiana's attorney general has spent nearly $24 million building the state's legal case against BP over the 2010 Gulf of Mexico oil spill, with much of the money paid to outside law firms that have contributed to his campaigns. Attorney General Buddy Caldwell's payments to outside lawyers—$15.4 million and counting—account for about two-thirds of his total spending, according to figures obtained by The Associated Press. While Louisiana took a much harder hit than other states during and after the disaster, that spending far exceeds the contract work paid by Caldwell's counterparts, according to data provided by their offices. Alabama Attorney General Luther Strange opted to let lawyers on his staff take on the work, and he says his office's tab is well under $200,000 so far. New Orleans-based U.S. District Judge Carl Barbier, who is presiding over most of the claims spawned by the spill, at one point appeared to take issue with Caldwell's use of outside lawyers,...
LOGA takes on Matt Damon
The oil and gas industry, which usually finds itself doing battle with politicians and regulators, has recently been taking on an unlikely foe: Matt Damon. Locally, the Louisiana Oil & Gas Association is churning out responses to the actor's new film, Promised Land. The flick, shot in Pennsylvania, digs into a national debate over fracking with disturbing images of groundwater contamination and flaming water faucets. LOGA President Don Briggs first issued a column entitled "Facts Not Required" characterizing the film as a "mass scale public relations campaign" against hydraulic fracturing and urging the oil and gas industry to better educate the public on the safety of the process to "beat Hollywood to the punch." The organization followed up this afternoon with the release of a five-minute video offering the history of hydraulic fracturing and facts about the process meant to "debunk the deceptive content of Promised Land." This isn't the first time the industry has...
U.S. oil production expected to reach fastest rate ever in 2014
Driven by the shale boom, the United States in 2014 will hit its highest daily oil production level since 1988 and will grow oil output at the highest rate ever, the U.S. Energy Information Administration predicted Tuesday. As The Houston Chronicle reports, U.S. daily oil production—which averaged 6.4 million barrels a day in 2012—will surge 23% to average 7.9 million barrels a day in 2014, according to administration projections. The daily production rate will jump 900,000 barrels between 2012 and 2013, a record for growth in a single year, EIA Administrator Adam Sieminski announced during a conference call with reporters. The previous record of 800,000 barrels per day was set a year ago and was the largest one-year jump since 1951. Oil was first produced in the United States in 1859. "That is the largest single-year growth in U.S. production all the way back to the drake oil well in Titusville, Pennsylvania, in 1859," Sieminski says. "That is pretty impressive."...
Fracking with natural gas could trim fuel costs by as much as 40%
Apache Corp. this month is set to become the first company to power an entire hydraulic fracturing job with engines running on natural gas, cutting fuel costs by about 40%, an executive tells The Houston Chronicle. The Houston-based oil and gas company has been working in recent months with Schlumberger, Halliburton and Caterpillar to advance its use of natural gas in oil field operations, says Mike Bahorich, Apache's executive vice president of technology. The goal is to reduce costs, while increasing use of the domestically produced fossil fuel and cutting emissions, Bahorich adds. Other companies have fueled part of their fracking projects with natural gas, but Apache plans to be the first to run a full spread of 12 hydraulic fracturing pumps on the fuel this month. "I would challenge you to think of an idea that could generate more value for our economy and our environment than switching from oil to natural gas," Bahorich says. The full story can be found
Revenue's Barfield says new alt-fuel rules will hold up in court
The new rules governing the state's alternative-fuel vehicle tax credit, which go into effect today and eliminate "flex-fuel" vehicles from eligibility, accurately reflect legislative intent and the wording of the statute, says Tim Barfield, head of the Louisiana Department of Revenue. Rules issued by former Revenue Secretary Cynthia Bridges on April 30 said owners of flex-fuel vehicles, which can burn both alternative fuels and petroleum-based gasoline from the same tank, are eligible for the credit, an interpretation that could have cost the state hundreds of millions of dollars per year, by some estimates. Only owners of vehicles with a standalone alternative fuel tank or battery are eligible under the new rules. Officials say about $7.6 million in tax credits—worth up to $3,000 each—have been paid out under the original rules. Claims for flex-fuel vehicles received by June 14...
Sasol CEO says La. gas-to-liquids plant 'can be a game-changer' despite risks
David Constable, CEO of Sasol—the South African energy company that is planning to spend between $16 billion and $21 billion to develop the United States' first gas-to-liquids plant in south Louisiana—tells The New York Times the project "can be a game-changer" for the nation. However, the focus of the article is the risky nature of gas-to-liquids technology, which is in use at just a handful of plants worldwide. "The record for converting gas to liquids is spotty," the article says. "The newest and largest plant in operation, Royal Dutch Shell's giant Pearl plant, … in Qatar, cost the leviathan sum of $19 billion, more than three times its original projected cost, and has been plagued with unexpected maintenance problems." The article also notes that BP and ConocoPhillips built and briefly operated demonstration plants in Alaska and Oklahoma, but stopped short of full development of the technology. Exxon Mobil and ConocoPhillips, too, announced plans to...
La. gas drilling tax incentive highlighted in new Pew Center study
A new study by the Pew Center on the States says Louisiana is among a number of states that have created tax traps for themselves by offering incentives for economic development that are open-ended or lacking sufficient controls. According to the study, called "Avoiding Blank Checks: Creating Fiscally Sound State Tax Incentives," Louisiana's exemption for horizontal natural gas drilling, created in 1994, cost the state just $285,000 in forgone revenues in fiscal year 2007. But at the end of fiscal year 2010, the price tag of the exemption had grown to $239 million, the study says. To avoid creating such tax traps, the study suggests that states do their homework before implementing them, including: gathering reliable economic impact projections, making lawmakers aware of any uncertainties surrounding the potential cost, linking cost estimates to policy making, and making the process transparent. Setting caps on how much the state will provide in tax exemptions through incentive...
B.R. gas prices continue downward trend
At $3.12, the average price of a gallon of regular unleaded gas is 4 cents lower today than it was a week ago in Baton Rouge, according to the AAA Daily Fuel Gauge Report. Local gas prices are now 8 cents lower than they were two weeks ago and 11 cents lower than they were a month ago. Nonetheless, they remain 2 cents higher than they were a year ago. The average price across Louisiana is at $3.14 this morning, down 5 cents on the week and 12 cents on the month—but up one penny from a year ago. Local and state averages continue to trend below the national average of $3.34 per gallon, which is down 4 cents on the week and 10 cents on the month. Yet the national average this morning is 6 cents higher than it was a year ago. You can check out the complete AAA Daily Fuel Gauge report here.
Sasol getting incentives package worth $135M from Louisiana
Gov. Bobby Jindal's administration has pledged an incentive package valued at more than $135 million to South African energy company Sasol Ltd., which is developing a multibillion-dollar complex in southwest Louisiana to turn natural gas into chemicals, diesel and other fuels. Incentives include tax breaks, a $20 million worker training facility, and a $115 million payment to the company for land and infrastructure that will be left to a future governor's administration and lawmakers to fund. Sasol announced on Monday it plans to spend between $16 billion and $21 billion on the construction of a chemical plant and a gas-to-liquids plant at a site in Westlake, near Lake Charles. The project is described as the largest manufacturing investment in Louisiana's history. The governor's office says Sasol will create 1,250 new permanent jobs, while an LSU study says the project will generate an economic impact of $46 billion over 20 years. Landing the facility in Louisiana comes with a...
Sasol: Gas-to-liquids plant in La. could cost as much as $21B
South African chemicals and energy company Sasol Ltd. announced today it anticipates spending between $16 billion and $21 billion to build a complex in Louisiana to convert natural gas into diesel, other fuels and chemicals. When, and if, that projection comes to fruition, Gov. Bobby Jindal says it would represent the largest industrial investment in state history. "It also represents one of the largest foreign direct investment manufacturing projects in the history of the entire United States," says the governor, who joined Sasol officials today to shed additional light on the scope of the project, which has been in development for years. Sasol says it will soon begin initial engineering work on a complex in Westlake that will use domestic natural gas—which is among the cheapest in the world—to make higher-value chemicals and fuels. The company plans to first spend $5 billion to $7 billion on a chemical plant, and later add an $11 billion to $14 billion gas-to-liquids...
B.R. gas prices seesaw up 2 cents on the week
The average gallon of regular unleaded gas is selling for $3.20 in Baton Rouge this morning, according to the AAA Daily Fuel Gauge. That's about 2 cents more than the average price per gallon one week ago, but 20 cents lower than it was one month ago. A year ago, gas was selling for 13 cents less per gallon than it is today. The state average this morning is $3.22 per gallon, up one penny on the week. The U.S. average, at $3.42 per gallon, is also one cent higher than it was a week ago. Baton Rouge gas prices have consistently tracked slightly below the state average in recent months and have been trending downward in recent weeks. Baton Rouge gas prices hit a historical high of $3.99 per gallon on July 18, 2008. You can check out the Daily Fuel Gauge here.
Black Elk Energy had history of violations before fatal fire
Before last week's fatal fire on one of Black Elk Energy's oil production platforms, The Houston Chronicle reports, the five-year-old firm had racked up more than 300 documented mistakes and violations offshore. The report cites federal regulators who cracked down on the Houston-based firm Wednesday. The federal government ordered the company to immediately cease burning, welding and other activities that could ignite fires at all of its 98 oil and gas production facilities in the Gulf of Mexico. Regulators also are insisting on a third-party audit of Black Elk's safety management systems and are barring the company from launching work at facilities that are currently offline. Moreover, the Bureau of Safety and Environmental Enforcement is ordering Black Elk Energy to submit a performance improvement plan detailing the steps it will take to ensure compliance in its operations. The bureau has threatened that unless there is swift evidence of improved performance, the company...
Search for missing oil platform worker ends
Black Elk Energy has halted the search for a worker missing since Friday's fire aboard the company's oil platform in the Gulf of Mexico. The missing crewman, Jerome Malagapo of the Philippines, was employed by Grand Isle Shipyard Inc., which had a contract with Black Elk to refurbish the platform. The company says in a statement released Tuesday night that it will focus on the victims and their families, including those injured in the incident. The body of 42-year-old Elroy Corporal was found over the weekend. Four workers who suffered burns during the platform fire are being treated at the Baton Rouge General Medical Center. The cause of the explosion and fire aboard the platform remains under investigation. The Houston Chronicle reports initial investigations of the lethal explosion are focusing on the possibility that a torch ignited flammable materials on the site. Such activities that involve burning, welding or other operations capable of starting fires or...
Filipino worker killed in offshore fire identified
The embassy of the Philippines in Washington has released the identity of a worker killed in a fiery explosion on an oil platform off the coast of Louisiana on Friday. In a news release on the embassy website, he is identified as 42-year-old Elroy Corporal. Meanwhile, the embassy says it is holding out hope that another unidentified Filipino worker who has been missing since Friday's accident will be found alive. Houston-based platform owner Black Elk Energy says it planned to take a search-and-rescue dog aboard its fire-damaged offshore platform today as it continues to look for signs of the missing worker. In addition to the one dead and one missing worker, four Filipino contract workers are being treated in Baton Rouge for serious burns. One of them has been identified as 50-year-old Wilberto Ilagan, who was most...
Big BP payout still looms in civil lawsuit regarding oil spill
Now that a settlement in the criminal lawsuit of the BP oil spill of 2010 has been reached, officials say it was heartening to see U.S. Attorney General Eric Holder take a tough stance on the oil giant and require it to pay out $4.5 billion for damages and misconduct. "It's very clear that he's not taking this lightly," says Garret Graves, chair of the Coastal Protection and Restoration Authority of Louisiana. "And we're finally going to cross that threshold in requiring BP to restore the Gulf." But the civil lawsuit, which is scheduled to go to trial in February, and the Natural Resource Damage Assessment remain the larger issues to settle. "We're now going to focus on the civil lawsuit," says Nick Speyrer, spokesman for The Water Institute of the Gulf, which BRAF helped form in 2011. Any settlement from that civil suit will largely fund the state's $50 billion master plan for coastal restoration and hurricane protection over the next 50 years, says Speyrer. Meanwhile, from the...
Gulf rig fire leaves 4 workers with severe burns, 2 missing
An explosion and fire ripped through a Gulf oil platform today as workers used a cutting torch, sending four people to a hospital with critical burns and leaving two missing in waters off Louisiana. Coast Guard Capt. Ed Cubanski says the well was not producing at the time and no oil was leaking. A relatively small amount of oil spilled from the rig when workers using a torch cut into a 75-foot-long, 3-inch-wide line on the platform. Cubanski says a sheen one-half mile long and 200 yards wide was reported in the area. The fire has since been extinguished, Coast Guard spokesman Drake Fore says, adding Coast Guard aircraft and boats were searching for two missing people. Nobody was believed killed in the fire, but Cubanski says 11 people were flown from the platform to area hospitals or for treatment on shore by emergency medical workers. Taslin Alfonzo, spokeswoman for West Jefferson Medical Center in suburban New Orleans, says four injured workers were brought to the hospital in...
Defense lawyers say charged BP rig workers are scapegoats
While BP has resolved a sweeping criminal probe of its role in the massive 2010 oil spill in the Gulf of Mexico, two company employees charged in the deaths of 11 rig workers claim the Justice Department is trying to make them scapegoats for the disaster. Attorneys for the highest-ranking BP employees aboard the Deepwater Horizon during the deadly explosion in April 2010 vowed to fight manslaughter charges against their clients. According to the indictment unsealed Thursday, Robert Kaluza and Donald Vidrine are accused of disregarding abnormal high-pressure readings that should have been glaring indications of trouble just before the blowout. Vidrine's attorney, Bob Habans, says in a statement that prosecutors showed "exceedingly poor judgment" in charging his 65-year-old client. "It is almost inconceivable that any fair-minded person would blame this hard-working and diligent man for one of the most catastrophic events in the history of the oil business," Habans' statement reads.
After BP spill, information trickled as oil gushed
Oil giant BP and the U.S. government portrayed in public a united front as a out-of-control well spewed oil into the Gulf of Mexico in 2010. But The Houston Chronicle is reporting that the two privately sought to withhold potentially critical information from each other, possibly slowing efforts to solve the crisis, citing new testimony in the case. Last month's closed-door testimony by Marcia McNutt, head of the U.S. Geological Survey, in the ongoing litigation over the disaster could complicate a Justice Department probe that has focused on whether BP and its partners obstructed justice by lying to investigators. "It could have impeded the investigation, and both sides may share some blame in that regard," says Blaine LeCesne, a law professor at Loyola University in New Orleans who has followed the case. Motivations aren't clear from transcripts the newspaper obtained of McNutt's two-day deposition in New Orleans, but BP's pocketbook and the government's ability to punish...
Moret cautiously optimistic about Obama's natural gas policy
LED Secretary Stephen Moret has been predicting a sustained industrial construction boom in Louisiana, thanks partly to low, stable natural gas prices. The main caveat he has mentioned has been the possibility of an adversarial stance by the Obama administration against hydraulic fracturing, or "fracking," a controversial technique used to unlock vast supplies of fuel. But Moret tells Daily Report the benefits that cheap natural gas bring to the nation—and the fact natural gas is cleaner than other energy alternatives such as coal—make it unlikely that the federal government will want to limit fracking. "I'm hopeful there will be a largely supportive federal administration on that issue," he says. Moret remains concerned about possible environmental regulations, perhaps aimed at curbing greenhouse gases, that could slow down some industrial projects. "It's not a certainty," he says. "I'm just raising it as a point of concern we're going to be watching carefully."...
Clean Water and Land PAC money makes its way into Supreme Court race
Some of the biggest campaign spending in the Louisiana Supreme Court race recently—some $380,000 for 1st Circuit Judge Jeff Hughes—came from the third-party group Citizens for Clean Water and Land, a PAC formed last summer by trial attorneys with a stake in the outcome of oilfield legacy lawsuits. That's the same group that funded a high-profile TV ad campaign in September featuring Hays Town II and Jimmy Jenkins and their nonprofit group Save BR Water, which advocates tougher regulations for the municipal drinking water supply. Some have suggested the PAC teamed up with the nonprofit and its well-known founders to elevate its profile, give it legitimacy, and help it raise money to spend on Hughes in the November primary. But that wasn't the case, insists political consultant Roy Fletcher, who produced the commercials for the PAC. "The point of the [Save BR Water] ad campaign was to raise awareness about clean water," says Fletcher. "The point was not to raise money for...
Energy law center at LSU will tackle 21st-century issues
LSU Law Center Chancellor Jack Weiss tells The Times-Picayune that legal and regulatory issues in the energy industry have become more specialized and complex, prompting the law center to begin a specialized program studying energy law. The center will collaborate with the Baton Rouge campus in areas that will increase the knowledge base of students in the energy law program. The center plans to offer courses in geology, petroleum engineering, nuclear sciences, coastal sciences, environment science and chemical engineering that will train potential lawyers to work with scientific expertise in the 21st-century realm of energy law. Oil and gas, however, will remain at the core of the program, Weiss says. Students outside the energy law program will also have the opportunity to gain an understanding of the legal subject matter that surrounds science, engineering and other disciplines critical to the new world of energy. Practicing attorneys in the energy field will be able to...
U.S. projected to become world's top oil producer by 2017
The International Energy Agency expects the United States will overtake Saudi Arabia and Russia as the world's top oil producer by 2017, thanks to increased output achieved by new exploration technologies. The World Energy Outlook 2012 released this morning by the Paris-based IEA also predicts that greater oil and natural gas production as well as rising energy efficiency will allow the United States, which currently imports around 20% of its energy needs, to become nearly self-sufficient by around 2035. The IEA says rebounding U.S. oil and gas production and increasing oil and shale gas resources are "steadily changing the role of North America in global energy trade" and will speed up the change of direction of international oil trade from the Middle East toward Asia. It also says the United States will overtake Russia as the world's leading gas producer within the next three years. Reuters has a full examination of the report's details
Halycon days
Only a few years ago, people were beginning to worry about the future of the petrochemical industry in the United States, which was being threatened by the availability of inexpensive fuel and labor overseas. Today, cheap, abundant natural gas has local industry watchers more optimistic than at any time in recent memory.
Oil and gas leader reacts to Obama re-election with lament on costs, permitting
The four-year outlook for the oil and gas industry is sobering, now that President Barack Obama has been re-elected, but shouldn't entail any surprises, National Ocean Industries Association President Randall Luthi says. Industry leaders had hoped Republican Mitt Romney would get elected and open up regulations for more oil and gas exploration. Luthi says federal inspections and permitting, under Obama, have become more costly and time-consuming. "In spite of what I consider this deeply disappointing administration's plan, things are on the uptick, and you know it far better than I do. Rigs and jobs are beginning to return to the Gulf of Mexico. Most financial gurus are predicting a good 2013 for the offshore energy industry," Luthi told a group of industry leaders in Lafayette on Wednesday. "However, I would argue that it's not going to come without a price. I think it's way too early to decide how high that price is going to be, whether it will have a stopping or stalling effect on...
America sets record for oil production
U.S. oil production rose to the highest level in nearly 18 years as the shale-drilling boom cut reliance on foreign fuel and nudged the country ever closer to energy independence. Bloomberg reports national output swelled by 8,000 barrels per day to 6.68 million in the week ended Nov. 2, the Energy Department reports. It was the most since Dec. 23, 1994. Improvements in horizontal drilling and hydraulic fracturing, or fracking, have unlocked fuel trapped in deep underground rock formations in states such as North Dakota, Texas and Oklahoma. The U.S. met 83% of its energy needs in the first six months of 2012, on track to be the highest annual level since 1991, according to department data compiled by Bloomberg. Production advanced 31% this year in North Dakota, 19% in Texas, and 11% in Oklahoma, department records show. Crude imports have declined 11% this year. "Every added barrel we make here is another barrel we don't need from somewhere else," says Kyle Cooper,...
Recipients picked for BP tourism, seafood grants
More than 100 nonprofit groups and government entities have been picked to get shares of $43.7 million in BP funds to promote the Gulf Coast's tourism and seafood industries following the company's 2010 oil spill. The first round of grants announced today by court-supervised claims administrator Patrick Juneau are part of a proposed settlement between BP and a team of private plaintiffs' attorneys. The deal calls for BP to fund a total of $57 million in tourism and seafood promotion grants. The 110 grant recipients were picked from a pool of more than 350 applicants. In Louisiana, 43 recipients will get $15.9 million. In Florida, 33 organizations will receive $13.4 million. In Alabama, 21 groups will get $8.3 million. In Mississippi, 13 organizations will get $6 million. Specifics on which organizations were selected and how much funding each will receive were not available as of press time.
Nucor, Encana sign natural gas agreement
Nucor Corp. announced today it has agreed to team up with the U.S. division of Encana Corp. on a project that would provide natural gas for its steelmaking facilities—including the massive $750 million iron plant under development in St. James Parish. Financial terms were not disclosed. Nucor says that Encana will drill and operate onshore natural gas wells. Nucor will pay its share of the costs plus an additional amount of carried interest as each well is drilled, subject to caps. Either company may suspend drilling if natural gas prices fall below a predetermined threshold. Nucor, like other manufacturing companies, is striving to take advantage of cheap natural gas to fuel its operations while supply is high. The Charlotte, N.C.-headquartered firm says that with today's deal in place it expects to be able to better manage its exposure in the natural gas commodities market. It also will give Nucor a competitive advantage in natural gas costs for its Louisiana facility, which...
Entergy moves closer to joining regional grid operator
Entergy Corp. moved a step closer to turning over control of its power transmission system to a regional grid operator last week, a plan that the New Orleans utility giant hopes to have in place by the end of 2013. Entergy, which operates electric utilities in Louisiana, Arkansas, Mississippi and Texas, has met with regulators over the past year to win support for joining the Midwest Independent Transmission System Operator, an Indiana-based group that spans more than a dozen states and one Canadian province. The Times-Picayune reports utility regulators in Arkansas and Texas both approved the plan last week. The Louisiana Public Service Commission, which regulates Entergy Louisiana, signed off on it in May, and regulators in Mississippi are expected to follow suit in mid-November. The timing will likely leave the New Orleans City Council, which regulates Entergy New Orleans, as having the final say. In New Orleans, the move is projected to save customers up to $46 million...
B.R. gas prices dip another 11 cents on the week
Last week marked the second in a row that Baton Rouge drivers got a pretty significant break at the gas pump. The average price of a gallon of unleaded regular gas fell 11 cents from Monday, Oct. 22, through today, according to the AAA Daily Fuel Gauge Report. Gas prices also fell 8 cents over the week prior to that. As of this morning, Baton Rouge prices are averaging $3.37 per gallon. One month ago, the average price in Baton Rouge was $3.56 a gallon. However, today's prices are still 9 cents higher than the $3.28 per gallon motorists in Baton Rouge were paying a year ago. Nonetheless, the local average remains below the $3.39 state average and the $3.54 national average. Check out the complete Daily Fuel Gauge Report here.
Alternative fuel tax break regulations considered
Louisiana's revenue department will decide by next week whether to make changes to proposed regulations that spell out limits on the state's alternative fuel vehicle tax credit. The tax break program's cost has grown much larger than estimated and become a headache for Gov. Bobby Jindal's administration because of differing interpretations about what should be included. Proposed regulations would limit the tax credit program costs to an estimated $10 million, higher than initial projections but far less than analysts suggest the current law could cost. The regulations put forward by the Jindal administration would eliminate "flex-fuel vehicles" from being eligible for the tax break. Comments about the program were aired today at a public hearing by people who want the regulations rewritten. Ronald Gitz, executive director of the Society of Louisiana Certified Public Accountants, says flex-fuel cars and trucks—which have the ability to burn ethanol but also use...
Lower prices to hit Big Oil's 3Q profit
Big Oil's bottom line is expected to take a pretty big hit in third-quarter earnings reports because of sharply lower natural gas prices in North America and downtime at production and refining facilities due to hurricanes and seasonal maintenance, The Houston Chronicle reports. ConocoPhillips reports its earnings today, followed by next week's blitz from BP, Exxon, Chevron and Shell. Tudor, Pickering, Holt & Co. analyst Robert Kessler says that among the biggest unknowns is the extent to which shutdowns affected profits at the major oil and gas companies. "Whether it be Alaska or the Gulf of Mexico or the North Sea, all faced some asset downtime, which affected the companies depending on where their assets are," Kessler says. Falling oil prices hit large crude producers like ConocoPhillips, which also could see cash flow constraints because of slower-than-expected asset sales, says James Sullivan, senior analyst for Alembic Global Advisors. Oil prices remain a key driver of...
Louisiana No. 3 for U.S. energy consumption, No. 4 for production
The Pelican State has long prided itself on being a top producer of energy in the United States, and a new federal analysis of American energy production confirms Louisiana was the nation's No. 4 overall energy provider as of 2010. But the U.S. Energy Information Administration's analysis also shows Louisiana is the No. 3 energy consumer. It notes the state's high overall energy consumption is "driven largely by its industrial sector," and that Louisiana ranks second only to Texas for total industrial energy consumption. However, Louisiana's residents are also doing more than their fair share of energy consuming. "Louisiana's per capita residential electricity consumption is high, due in part to high demand for air-conditioning during the hot summer months and the widespread use of electricity as the primary energy source for home heating," the analysis says. Wyoming and Alaska are ranked as the top two energy-consuming states. On the production side, Texas ranks No. 1, Wyoming No.
Gas prices in Baton Rouge dip 8 cents on the week; expected to drop further
The average price of a gallon of unleaded regular gas has decreased 8 cents in Baton Rouge over the past week, according to AAA Daily Fuel Gauge Report. As of this morning, gas is selling for $3.48 a gallon in the city, down from $3.56 a week ago. One month ago, gas was selling locally for $3.62 on average. But while $3.48 a gallon might look good compared to a week or month ago, it's still 16 cents higher than the $3.32 per-gallon-average of one year ago. Baton Rouge prices today remain below the state average of $3.50 per gallon and the national average of $3.66. However, all those averages could see significant decreases in coming weeks. USA Today is reporting this morning that average gas prices across the country could fall by as much as 50 cents a gallon in the near future due to rising inventory and lower demand. "Most of the country is heading appreciably lower the next few weeks,'' says Tom Kloza, of the Oil Price Information Service, who predicts retail prices will...
Odyssey Day promoting green vehicles in B.R. today
The Greater Baton Rouge Clean Cities Coalition is promoting the use of alternative fuel and advanced-technology vehicles from 12:30 to 6:30 p.m. today as part of Louisiana Alternative Fuel Vehicle Odyssey Day, being held at the Capitol Park Welcome Center, 702 North River Road. Executive Director Lauren Stuart says the nonprofit coalition has no preference among cars that run on natural gas, electric batteries or a hybrid of gasoline and electric. "We are fuel neutral, so we support all alternative fuels," Stuart says. However, the coalition does have opinions—based on success stories—on which fuels and technologies work best for certain uses: Hybrid cars are ideal for large fleets; electric cars are ideal for daily commuters; and heavy equipment that operates on compressed natural gas is best for construction sites. Stuart says cars with advanced technology are more durable than conventional gasoline-powered vehicles and have less wear and tear. And she says the biggest...
B.R. gas prices rise 3 cents on the week
If you're planning on filling up in Baton Rouge today, you'll probably pay somewhere around $3.56 for a gallon of regular unleaded gas. According to AAA's Daily Fuel Gauge Report, today's average is 3 cents more than the Baton Rouge average a week ago. It's also a dime less than a month ago, but 23 cents higher than a year ago. Baton Rouge's average is 2 cents lower than the state average of $3.58 a gallon, which is 20 cents lower than the national average. Nationally, the $3.78 per gallon Americans are paying today is 3 cents less than they paid a week ago and 8 cents less than they paid a month ago—but 33 cents more than they paid a year ago. The highest average gas price in Baton Rouge was set on July 18, 2008, when a gallon of regular unleaded sold for $3.99. The U.S. average peaked a day previous at $4.11.
Entergy expects 3Q profit below expectations, 2011 gains
Entergy expects its third-quarter earnings to come in below its prior-year results and Wall Street's forecast, partly because of a higher income tax expense. The utility announced this morning that the year-ago period also benefited from an Internal Revenue Service¬–related settlement. Entergy anticipates third-quarter adjusted earnings of about $1.94 per share. A year earlier its earnings were $3.53 per share. Analysts polled by FactSet have predicted $2.11 per share. The company says earnings fell at both its utility and wholesale commodities segments during the quarter as they dealt with some increased expenses. The wholesale commodities unit also faced lower pricing for the nuclear fleet. Entergy Corp. still expects full-year adjusted earnings of $4.85 to $5.65 per share. Wall Street foresees $5.45 per share. Entergy delivers electricity to customers in Louisiana, Arkansas, Mississippi and Texas.
Conference on groundwater and fracking in B.R. next week
Horizontal drilling has been in the oil and gas industry's toolbox for a long time. But it was the development about five years ago of new chemicals that prevent algae growth that revolutionized hydraulic fracturing—or "fracking"—says Winston Porter, a former assistant administrator at the Environmental Protection Agency. "And it looks like most of this stuff is pretty benign stuff," Porter says. Porter is one of the guest speakers at the National Ground Water Association forum on Wednesday, Oct. 17, at the Baton Rouge Marriott, 5500 Hilton Ave. The two-day series of speakers and presentations begins on Tuesday, Oct. 16. A chemical engineer by trade, Porter has made his presentation "America's Energy Future" around the country. Now averaging about $3 per British thermal unit, natural gas is cheap in the United States, but is selling between $10 and $15 per Btu in India and China. Porter says overseas demand will eventually push domestic natural gas prices higher. Before...
Inquiry stalls Entergy power plant purchases in Miss., Ark.
Someday, Entergy Corp. may own power plants in Jackson, Miss., and Malvern, Ark. But no one's sure when, or even if, the New Orleans-based utility will complete its $469 million purchase of two natural gas–fired plants from KGen Power Corp. That's because the U.S. Justice Department may halt the deals. In 2010, the Justice Department told Entergy it was investigating whether the company had unfairly favored use of its own power plants, controlled transmission lines to strangle independent power generators, and then swooped in to buy their modern plants on the cheap. Entergy found out about the inquiry as it was buying a Louisiana generator, the fifth in a series of purchases. Now antitrust approval to buy two more has been delayed. "We don't know really what's going on at DOJ," Entergy CEO Wayne Leonard told investors on an April 26 conference call. Entergy spokespersons say the situation has changed little since then. Justice Department officials didn't respond to requests for...
Louisiana ranks 6th for oil production, 3rd for gas
As of the end of the second quarter, Louisiana ranks sixth in the country for total oil production and third for gas production, according to a newly released overview of drilling and production activity from the Oil & Gas Journal. While the northern portion of the state continues to be dominated by natural gas production along the Haynesville Shale, the report notes 2012 will not be as fruitful as in recent years. "During the last three years, gas production in the state has doubled, and in 2011, 62% of state gas production was sourced from the Haynesville," it reads. "Production levels have recently declined due to weak gas prices and a significant retrenchment in the number of rigs working in the Haynesville. Gas production in 2012 will fall from the 2011 level." The boom that hydraulic fracking has created in recent years is reflected in the ratio of gas to oil wells in the state, the report says. "In the mid-1980s, oil wells outnumbered gas wells two to one," it says,...
Natural gas winning place as new oil field fuel
The biggest, baddest engines in the world, long chained to diesel fuel, are on the verge of a mass transformation because of cheap natural gas—with oil field equipment holding particular potential, reports The Houston Chronicle. The newspaper quoted executives gathered Thursday in Houston in the middle of a three-day summit of heavy fuel users and producers. "Here's the first reason that large engines are going gas: large engines burn the most fuel. I could try to make it harder, but that's pretty straightforward," says Joel Feucht, director of gas engine strategy for Caterpillar's energy and power systems division. Oil companies alone use nearly 1.2 billion gallons of diesel fuel a year just for pressure pumping equipment that supports hydraulic fracturing, says David Hill, vice president of natural gas economy operations for Encana Corp. After the diesel used to power drilling rigs themselves has been added to the equation, the total is more than 2.8 billion gallons...
Coal vs. natural gas: It's complicated
The glut of natural gas unleashed by hydraulic fracturing—and the resulting low prices—make the idea seem like a no-brainer: Ditch coal-fired electric plants, with all their baggage involving air pollution and water consumption, and switch to natural gas. And as The Houston Chronicle reports, trends over the past year suggest that's starting to happen nationally, as natural gas has overtaken coal for generating electricity. Use of coal to generate electricity was down almost 18% for the first seven months of 2012, compared with the same period in 2011, according to the U.S. Energy Information Administration. Natural gas use was up by 30%. But low natural gas prices alone aren't enough to prompt power companies to shift multimillion-dollar investments. "Nobody's going to tear down a half-billion-dollar coal plant to put in a new natural gas plant just because natural gas is slightly cheaper," says Edward Hirs, an energy economist at the University of Houston. In a...
Oil trade group denounces wave of regulations
The oil and gas industry is being hit by "a tsunami of regulations" that threaten to add costs, suppress job growth and curb domestic energy production, the American Petroleum Institute says. In a conference call with reporters timed just two months before the Nov. 6 election, API officials accused the Obama administration of imposing unneeded regulations and ignoring industry input on the rules, The Houston Chronicle reports. "We've seen numerous examples of regulatory decisions that move in the wrong direction," says Erik Milito, API's upstream group director. In particular, Milito singled out the Interior Department's five-year plan for offshore energy development, which includes a dozen sales of Gulf of Mexico leases and three auctions of drilling rights in waters around Alaska. API's director of scientific and regulatory affairs, Howard Feldman, blasted the administration for advancing "a tsunami" of environmental rules that would apply only to U.S. refineries, not to...
Louisiana hopes to dodge $400 million bullet
A new proposed rule concerning Louisiana's alternative fuel tax credit law would eliminate flex-fuel vehicles from eligibility, thereby reducing the state's future exposure from an estimated $250 million a year to about $10 million, according to a fiscal impact statement. While the Revenue Department says less than 10% of eligible vehicle owners historically have claimed the credit, the statement notes the state's exposure under the old rule could exceed $400 million, based on vehicles sold since 2009 (and another $30 million already has been paid or claimed). "Revenue insists that door is closed" by the new rule, says Greg Albrecht, the Legislature's chief economist. William Potter, a CPA and director with Postlethwaite & Netterville, says he's still not entirely clear on what the rule change would mean. "I personally think it's a poorly drafted statute," Potter says. "I also think the...
Energy independence won't guarantee low prices
On the campaign trail, both Mitt Romney and President Barack Obama have vowed to liberate the United States from reliance on foreign oil, offering voters a pledge of at least North American "energy independence." In some ways, that's an easy promise to make. As The Houston Chronicle reports, no matter who resides in the White House during the next four years, the United States is already on a trajectory to derive much of its oil and all of its natural gas from within its own borders, thanks to technologies allowing energy companies to harvest the fossil fuels from dense rock formations. But abundant domestic supplies don't guarantee a drop in the cost of energy, most analysts agree. That's because oil prices are set on a world market, subject to a complex mix of factors outside the United States' control. And even if the United States or North American oil imports plummeted to zero, the nation would still be connected to that global market. Michael Levi, a senior fellow for...
Environmental PAC rolls out TV ads about B.R. water supply
A series of television ads hit local airwaves today calling on state regulators to do a better job protecting Baton Rouge's drinking water supply. The 30- and 60-second commercials are part of a $100,000 media buy sponsored by Citizens for Clean Water and Land, a PAC that was incorporated last summer by a group of attorneys and landowners who "want to make sure polluters are held responsible for their actions and regulators are held responsible for enforcing regulations," says attorney John Carmouche, one of the PAC's founders. The ads, which will run for three weeks on local network and cable stations, are narrated by well-known civil engineers A. Hays Town II and Jimmy Jenkins, who have founded a separate organization, Save BR Water, to raise public awareness about saltwater intrusion into the municipal drinking water supply. Political consultant Roy Fletcher, who produced the commercials, says Town's group approached Carmouche's group about partnering on the campaign and it made...
American drivers' pain at the pump is self-inflicted, analysis shows
Drivers in the United States feel less "pain at the pump" than all but a handful of other nations—most of which are major oil producers that heavily subsidize fuel prices. That’s the conclusion of Bloomberg’s quarterly gasoline price ranking, and one that’s at odds with the experience of many Americans. If filling the tank in the United States is as relatively inexpensive as the ranking shows, why do many Americans say it hurts so much? The gas ranking first ran in May, when U.S. gasoline prices spiked, to put some of the campaign-season economic and political debate into perspective. The pain factor is calculated by dividing a nation’s average price per gallon of gasoline by its average daily income; in other words, it’s the share of a person’s wallet needed to buy a gallon of gasoline in each country. But what this ranking doesn’t take into account is the amount of gasoline consumed. When that’s considered, a very...
Shell leads LNG competitors out to sea with biggest ship
For more than a decade, the world's biggest liquefied natural gas producers led by Royal Dutch Shell plotted how to move their $170 billion industry onto barges at sea to tap remote fields. Now they're finally doing it. The Houston Chronicle reports Shell will forge the hull of a floating LNG plant in South Korea by year-end that will be the world's largest vessel, weighing six times as much as the biggest aircraft carrier, a Nimitz-class warship. Some 5,000 workers will build the factory to produce LNG off Australia's northwest coast in a $13 billion project that also will shield Shell from escalating costs it would have to pay at the country's onshore plants. Rivals, including both Malaysia's Petroliam Nasional Bhd. and GDF Suez SA of France, likewise want to compress gas into liquid at sea, where many of the largest finds were made in the last decade. It's a generational change for a land-based industry that started about 50 years ago in Algeria, where Shell provided...
Entergy says its Isaac costs range from $400M to $500M
Entergy released its estimated tally on its total cost of damages caused by Hurricane Isaac this morning, saying it's somewhere between $400 million and $500 million. Those damages are expected to reduce Entergy's third-quarter revenue, the company says in a news release. Entergy says it will try to recoup the costs by all means available, including using reserves built up for just such events, as well as borrowing, insurance and—perhaps most important to Entergy's customers—additional user charges. No further details on how much customers may see bills increase as a result of the storm's cost were available as of this morning. Entergy notes that it's hard to predict how much of its restoration costs it may recoup through all of its efforts or when it may recover them. Entergy Gulf States Louisiana estimates costs in the Baton Rouge area were $70 million to $90 million, while costs across Louisiana totaled $240 million to $300 million. Meanwhile, Entergy Mississippi...
Power to the people
Entergy officials started tracking Isaac back when he was still getting organized in the Atlantic Ocean. The weekend before landfall, projections had the storm headed for Florida, and Entergy was preparing to send a support team to help utilities in the Sunshine State. But as the storm drifted west, Entergy realized Louisiana was going to need help.
The other recession
The year Business Report was born, 1982, was not an auspicious time to launch a new venture. In fact, Louisiana was just entering the worst recorded recession in its history, according to economist Loren Scott.
The price of natural gas
Lafayette and Houma are the biggest oil towns in Louisiana. When the price for a barrel of oil rises, those cities thrive.