Content tagged “Energy and resource”

Dropping oil, gas industry preferences would cut taxes for all, assessor says

Eliminating a series of preferences granted to the oil and gas industry would result in a tax cut for every citizen who pays property taxes, says the chairman of the Louisiana Assessors Association Oil and Gas Committee. The Shreveport Times reports that Robert Gravolet, the assessor in Plaquemines Parish, told the Louisiana Tax Commission Tuesday that the commission's current structure grants huge breaks to one industry, and "tax rates could be lowered statewide" if those breaks were eliminated. Gravolet couldn't estimate how much equalizing assessment would save regular property owners, but he says it would be "substantial." The current assessment is "not uniform, it's not equal, it's not fair," he said. Assessors propose that the commission lift its current exemption on taxing horizontal drilling, change the way the apparatus used in drilling wells is taxed and set up a new tax structure for injection wells used to extract brine and those used at natural gas storage...

Lafayette lawyer fires back at BP after taking heat for handling of oil spill claims

Lafayette attorney Patrick Juneau has administered some of the biggest claims settlements in U.S history. He handled Vioxx and Toyota settlements. And he is the administrator for BP settlements, paying claims to those who can prove their businesses were damaged by the impact of the catastrophic Deepwater Horizon oil spill. The BP settlement is complex and mammoth—more than 1,000 pages—and Juneau had nothing to do with writing or approving it. He was appointed by a federal court to administer it, which includes filing and reviewing claims in a timely fashion and keeping track of the company's appeals. Not once in his career, Juneau maintains, has a corporation attacked his integrity—until BP. In a recent interview with The Daily Advertiser, Juneau fights back. "BP's CEO Bob Dudley said I was willfully misinterpreting the settlement; that's a lie and, yes, it is actionable," Juneau says. "BP agreed to the settlement and its terms and it had the advice of some...

Lafayette firm acquires 50% stake in La. oil leases

In a deal valued at $24 million, Lafayette-based PetroQuest Energy Inc. has reached an agreement with Houston-based Midstates Petroleum Company Inc. under which it has acquired a 50% stake in Midstates' lease ownership rights to approximately 30,000 acres in the Fleetwood area of the state, west of Baton Rouge. PetroQuest will pay $10 million to Midstates as part of the deal; $3 million now and the remaining $7 million in January next year. PetroQuest will also credit $14 million to Midstates' for future exploration drilling activity in the area, the companies announced this morning in a press release. "We have been excited about the organic growth opportunity this area possesses for quite some time but have been focusing our capital in our Midcontinent region," says Peter Hill, interim president and CEO of Midstates, in...

With private rulings, US loosens four-decade ban on oil exports

The Obama administration has cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad. The Wall Street Journal reports that in separate rulings that haven't been publicly announced, the Commerce Department has given Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultralight oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel. The shipments could begin as soon as August and are likely to be small, sources familiar with the matter tell the newspaper. It isn't clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department's Bureau of Industry and Security approved the moves using a process known as a private ruling. For now, the rulings apply narrowly to the two...

Money, carbon and morality

On more than one occasion when I was working for a multinational company engaged in the transportation of fossil fuels, I was accused of being morally deficient.

A higher standard

On June 14, 2012, ExxonMobil's Baton Rouge refinery sprang a benzene leak. At first, the company said only 10 pounds escaped. The final number was closer to 31,000.

Haynesville drilling production forecast to rise in July

The U.S. Energy Information Administration expects that the Haynesville Shale that stretches across northwest Louisiana and northeast Texas will produce about the same amount of crude oil next month as it is this month, but that gas production will increase. The EIA's latest Drilling Productivity Report—which tracks production at the nation's six largest shale plays, including the Haynesville, Eagle Ford, Permian, Bakken, Marcellus and Niobrara—says Haynesville oil production is expected to remain steady at roughly 54,000 barrels a day. But shale gas production in the Haynesville is expected to rise to approximately 19 million cubic feet per day in July to roughly 6.89 billion cubic feet each day. While oil production along the Haynesville is up slightly from one year ago, the EIA says gas production is actually down from a year ago. Overall, the nation's largest shale fields are expected to produce 4.5 million daily barrels in July, up from 4.4 million this month.

Jindal in Houston today to talk about new energy policy

Gov. Bobby Jindal and some other Republican governors from oil-and-gas-rich states are gathering in Houston today to discuss energy policy and slam the newest regulations passed by the EPA and backed by President Barack Obama. The Associated Press reports other governors attending the meeting will be Texas Gov. Rick Perry, North Dakota Gov. Jack Dalrymple and Wyoming Gov. Matt Mead. The Republican Governors Association is hosting the energy press briefing. According to a news release, the governors will discuss the Obama administration's "latest job-killing EPA regulations, how this White House has continually failed to lead on energy policy, and how Republican governors are promoting an 'all-of-the-above' energy strategy in their states." Jindal was in Iowa over the weekend, where he spent two days giving speeches and raising funds at events including the 2014 Iowa Republican State Convention. While there, he sat down for an interview with The Des Moines Register, which...

Gas utilities try to stay one step ahead of regulators on pipeline leaks

The American Gas Association, a national trade association representing local gas utilities that sell natural gas directly to consumers, is trying to stay one step ahead of regulators by exhorting its members to replace leaky pipes and take other steps to reduce releases of methane into the atmosphere, according to FuelFix.com. Gregg Kantor, the group's chairman and the CEO of Portland-based Northwest Natural Gas Co., says that aging pipelines and methane leaks are "a real issue that affects everyone, and we are hearing about it from our customers. This is a recognition that we have to deal with it." Methane—the primary component of natural gas—is 25 times more potent a greenhouse gas than carbon dioxide. Kantor says the AGA's concern is both over replacing older pipelines that leak small quantities of methane and the routine maintenance practice of "blowing down" sections of pipeline by emptying all of the pipeline segment's methane into the air. Louisiana has more than...

Executive Editor: Effect of new EPA rules in BR may be muted

If you read the reports on how the Environmental Protection Agency's new rule limiting carbon emissions by electric utilities will affect the national economy, Business Report Executive Editor David Dodson says, you may have gotten the impression that it won't amount to much and could even have health benefits. "Either that or the rule will usher in the end of life as we know it," Dodson writes in his latest column. "I'm going to go way out on a limb here and suggest that the truth will probably fall somewhere in the middle." Part of the reason the impact of the new rule may be muted in Baton Rouge is the foresight of management at Entergy back in the day, says Dodson. "Entergy is one of the nation's largest generators of nuclear power, and because nuclear power is essentially emission-free, the nuclear component of Entergy's power portfolio will not be impacted," Dodson writes. "Shareholders and ratepayers will benefit as a result, even the ones who complained about Entergy's...

Potential for Gulf shut-in production due to hurricanes higher than last year

The National Oceanic and Atmospheric Administration is predicting a relatively mild hurricane season, but even a quiet season like last year can lead to disruptions to offshore crude oil and natural gas production in the Gulf of Mexico. The U.S. Energy Information Administration recently analyzed the potential for Gulf shut-in production during the upcoming months, given NOAA's outlook for hurricane activity. EIA's mean estimate of offshore production outages during the current hurricane season totals 12 million barrels of crude oil and 30 billion cubic feet (bcf) of natural gas, more than three and four times higher than last year, respectively. "These estimates are highly uncertain as it is difficult to predict the location and intensity of individual storms," said a report on the analysis released by EIA this morning. "If the actual storm activity in the Atlantic Basin falls within NOAA's predicted range, EIA estimates (within a 70% confidence interval) that Gulf of Mexico outages...

Industrial ‘boom’ demands smart planning, panelists say

As the Capital Region and southeast Louisiana brace for $21 billion in new investment, panelists at a “Boom Without Bust” policy forum hosted by CPEX this morning agreed that leaders should work together to address challenges that will emerge due to limited infrastructure, transportation and workforce. “We’re already crowded,” said CPEX Vice President of Policy and Advocacy Jessica Kemp. The goal should be to invest the rewards of the economic “boom,” Kemp said, while avoiding a “bust” of unsustainable business and vacant homes. Fred Tombar, who directs the Louisiana Housing Corp., said his organization recently has arranged funding for 14 developments, half in this region and three in Ascension Parish alone. He is awaiting an LSU statewide housing assessment to figure out how much more will be needed, and where. Tombar wants to “avoid the sins of the past,” such as the FEMA trailer villages that sprung up after...

Water bill to benefit La. ports

Ports that move large amounts of energy resources—including five in Louisiana—would share a new pot of federal money to maintain and improve shipping channels under legislation passed by the Senate last week. Twelve ports in five states—Alabama, Louisiana, Maryland, Texas and Virginia—would get special treatment under the Water Resources Development Act because they move a high volume of cargo and at least 25% of that activity is in energy commodities such as petroleum, natural gas, coal, wind and solar energy components, and biofuels. The Senate passed the $12.3 billion measure 91-7, and the House has approved the legislation 412-4. It now goes to President Barack Obama for signing. The bill is an authorization measure, not a spending bill. There is no guarantee the projects authorized will be funded, but projects that receive priority in such bills stand a better chance of receiving money. Sen. David Vitter, top Republican on the Senate Environment and...

Lone project announcement lands La. in Q1 list of top 10 states for clean energy jobs

Illustrating just how few and far between announcements for clean energy and clean transportation projects have become in recent months across the U.S., a new report released this morning by a group that has tracked such announcements since 2011 includes Louisiana—which is listed as having had just one clean energy project announcement in the first quarter—in its top 10 listing of states that created the most clean energy jobs during the three-month quarter ending March 31. It was on March 31 that Gov. Bobby Jindal joined officials from IntegriCo Composites to announce the Texas firm will relocate its corporate headquarters to Webster Parish and build a $20 million plant to manufacture plastic railroad ties from recycled materials. The project is expected to create 300 jobs. That was good enough for a No. 10 ranking for Louisiana on the listing by Environmental...

Dow executive: Watch out for speed bumps on the way to the manufacturing boom

A senior executive for the Dow Chemical Co. advised the Rotary Club of Baton Rouge luncheon crowd today to watch out for two speed bumps on the way to the boom in construction and manufacturing that is about to get underway in south Louisiana. Jim Fitterling, a Dow executive vice president based in Midland, Michigan, said the manufacturing sector is already feeling the effects of an impending shortage of knowledge workers, primarily in science, technology, engineering and mathematics. "And it's only going to get worse. Engineers are already in short supply," Fitterling said. Louisiana also needs to be concerned about the number of skilled laborers it has, especially welders and pipefitters. The second potential obstacle, Fitterling said, is the possibility of unfettered export of North American energy to other parts of the globe, particularly in the form of liquefied natural gas. "Right now, we are enjoying a resurgence in domestic manufacturing because we have a low-cost feedstock...

Increased US natural gas supply easing shortage concerns

Faster-than-expected gains in U.S. natural gas inventories are easing concern that a shortage is looming next winter, spurring speculators to cut bullish bets. Bloomberg reports this morning that money managers' net-long position fell 9.1% in the week ended May 13 to the lowest level since December, the U.S. Commodity Futures Trading Commission says. Bearish wagers are the highest in more than four months. Gas futures fell 9.2% in the period as stockpile gains topped analysts' forecasts for a third week. Production from shale deposits in the U.S. Northeast and Midwest climbed to a record 16.1 billion cubic feet a day in the week ended May 9, Credit Suisse Group AG says in a May 15 report. "We're on the path to a more comfortable supply situation by the end of the summer," says Tom Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami. "That's giving the bears a little bit of ammunition." Natural gas slid 44.1 cents to $4.358 per million British thermal...

Editor: There's more to the CB&I job moves than meets the eye

When CB&I announced its $3.04 billion acquisition of The Shaw Group in 2012, experts predicted the day would come when the Netherlands-based company would relocate its administrative employees from Essen Lane in Baton Rouge to the company's U.S. headquarters in The Woodlands, Texas. "That day is now here," says Business Report Editor Stephanie Riegel in her latest column. "In late April, CB&I confirmed that an unspecified number of employees with corporate-level and so-called back-office jobs—accounting, marketing, IT and HR—will be moving this fall to the company's administrative campus in The Woodlands, where a 150,000-square-foot building is under construction and expected to be completed later this year." Not surprisingly, Riegel says, CB&I put a positive spin on the story, explaining that while the company is moving administrative jobs out of Baton Rouge, it will continue to "grow operations here beyond the current numbers." Local CB&I spokeswoman Gentry...

Executive Editor: Defining an aging pipeline's 'obligation to serve' no easy task

In his latest column, Business Report Executive Editor David Dodson takes a look at the controversy surrounding an interstate natural gas pipeline called Midla, which meanders parallel to the Mississippi River from a rapidly depleting gas reservoir near Monroe all the way to Scotlandville, with some stops across the river near Natchez along the way. "The pipeline is approaching its 90th birthday, which is about 50 more birthdays than pipelines of its vintage were designed to have," Dodson writes. "It is a very leaky bucket, experiencing about 20 incidents a year, according to its owner, American Midstream LLC (which is in turn controlled by a hedge fund on the East Coast)." The aging pipeline is a hazard, Dodson says, and Midla and its new owners have known for a long time that they're in a pickle. "They are operating an early 20th-century asset in a 21st-century environment, and the few customers it has left have said plainly they won't pay to repair or replace the line," he...

Playing with fire

I guess i shouldn't be be so surprised that a state whose mantra is "Get Government Off Our Backs" doesn't really mean that for a minute.

Two more LNG facilities announced for La. have state poised to be export powerhouse

Significant announcements were made separately today by two companies planning to develop liquefied natural gas facilities in southwest Louisiana. Southern California Telephone & Energy announced it has acquired a roughly 232-acre site on Monkey Island in Cameron Parish as a future site for a projected $2.4 billion facility capable of producing more than 2.5 billion cubic feet per day equivalent of liquefied natural gas. Meanwhile, Louisiana LNG Energy LLC announced it has secured funding from an affiliate of hedge fund ArcLight Capital Partners LLC to build a smaller-scale liquefied natural gas facility on the Mississippi River, south of New Orleans, that would be capable of liquefying about half a billion cubic feet of natural gas a day. Greg Michaels, chairman and CEO of Southern California Telephone & Energy, says in a press release that several factors are converging to make LNG exports an attractive investment: the shutdown of the Fukushima nuclear plant and other nuclear plant...

Spill-containment system for Gulf nears completion

Marine Well Containment Co. says by year's end it will complete an even larger system for responding to oil spills in the Gulf of Mexico than its current one. As FuelFix.com reports, Marty Massey, the Houston-based company's chief executive, told an Offshore Technology Conference audience on Tuesday that the spill-containment system will be able to collect up to 100,000 barrels of oil a day from a leaking well in 10,000 feet of water. It includes a capping stack rated for 15,000 pounds of pressure per square inch. The expanded system will be available roughly four years after the nonprofit company was formed by Exxon Mobil, Chevron Corp., Shell and ConocoPhillips in response to the Gulf of Mexico spill in 2010, which lasted 87 days and fouled some 68,000 square miles of waters in part because technology failed. Each of the oil giants—all of which are active in the Gulf— pledged $250 million to develop a rapid-response system for future spills. Since then, BP, Apache...

Goodrich Petroleum stepping up Tuscaloosa Marine Shale drilling

In a quarterly report released today, Houston-based Goodrich Petroleum Corp. says it has begun drilling a new well in West Feliciana Parish as part of its continued expansion of work along the Tuscaloosa Marine Shale. Goodrich—which reports holding "in excess of 300,000 net acres" in the shale play stretching across central and southeastern Louisiana and into central Mississippi—says it will begin drilling two new wells in Amite County, Mississippi, in the coming days. During the first quarter, Goodrich says it's conducting drilling operations on eight wells in the Tuscaloosa shale. Three new wells were added to production in the shale during the quarter, and the company says it will begin fracking operations on a well in East Feliciana at the end of May. As Daily Report highlighted...

New estimate places bird deaths as a result of Deepwater Horizon at 800,000

After the Deepwater Horizon oil rig blew out in the Gulf some 50 miles from the Louisiana coast in April 2010, The New York Times reports, responders were left to cope with a search area of nearly 40,000 square miles, as well as wind and currents that kept evidence of damage away from the more easily searchable coastline. Patrollers recovered fewer than 3,000 dead birds. But some had suspected that many more were unaccounted for. Now a team of scientists has tried to quantify the extent of damage inflicted on the Gulf's bird population from the oil spill caused by the explosion. Based on models using publicly available data, the studies estimated that about 800,000 birds died in coastal and offshore waters. Steve Hampton, a resource economist with the California Department of Fish and Wildlife who models bird deaths for West Coast oil spills, says he thinks the estimate is high. The newspaper notes that most Gulf Coast bird specialists cannot comment on independent research...

Gulf's bounty commands attention amid shale drilling boom

Seven decades after oil companies first bored wells beneath the Gulf of Mexico, it retains its allure, as recent discoveries tempt the industry with the prospect of pulling crude from 200-million-year-old rock buried miles below the seafloor. And as FuelFix.com reports, the Gulf's appeal is so strong that it anchors many oil companies' portfolios, despite an onshore drilling boom that is putting rigs to work from North Dakota to West Texas. "This basin keeps reinventing itself," says University of Texas geologist John Snedden. "We keep finding new plays. And that's why everybody's here." The oil riches of the Gulf and coastal territories around the globe draw tens of billions in oil company investment. And while offshore wells can be at least 30 times more expensive than the ones on land, they promise bigger yields—with production that can span decades—in contrast to what some energy analysts describe as the "drilling treadmill" necessary to keep oil flowing from onshore...

Feds: No significant environmental damage will be caused by Cameron Parish LNG plant

A proposed liquefied natural gas export terminal in Cameron Parish would not significantly damage the environment, the Federal Energy Regulatory Commission staff says. The conclusion also applies to 21 miles of pipeline and associated facilities proposed for Cameron, Calcasieu and Beauregard parishes. The project has adequate plans to compensate for filling in 213 acres of wetlands, according to an environmental impact study released Wednesday. It says those include using dredged material to turn an area of open water into brackish marsh and buying credits from approved mitigation banks. The report by FERC environmental staffers concluded that construction and operation won't affect any of the eight threatened or endangered species in the area, though it says surveys for the red-cockaded woodpecker should be updated within a year before construction. Cameron LNG LLC and Cameron Interstate Pipeline LLC have included adequate safety features in their plans, it says. And it says the...

Perkins Rowe's owners building new chilled water plant

Some tenants in Perkins Rowe are still without air conditioning this morning, more than 24 hours after construction crews doing underground work punctured a line that supplies chilled water to the development's air conditioning system. Perkins Rowe management remains vague about the nature of the underground work that caused the problem. However, Daily Report has learned that Perkins Rowe's new owners are in the process of building a new chilled water plant for the tenants' air conditioning system. Gallo Mechanical filed for a plumbing permit with the Department of Public Works March 21 to "run new chilled water lines to a new underground and above ground chilled water plant," says city-parish Department of Public Works Director David Guillory, citing the permit application. He says a construction permit for the plant has not been filed yet but his office expects one in the next week or two. "We knew this was coming," Guillory says. Construction of a new chilled water facility...

The pipeline predicament

Last summer, Slaughter Mayor Robert Jackson began getting letters from American Midstream Partners, owner of the Midla natural gas pipeline system that supplies energy to his small East Feliciana Parish town.

Four years after spill, BP busier than ever in the Gulf

BP's oil empire began to shrink many decades before a massive oil spill first fouled the Gulf of Mexico and then nearly toppled its industry reign four years ago Sunday. As FuelFix.com reports, it was about 40 years ago that Saudi Arabia and other oil-rich states first began to siphon BP's 1 billion barrels of Middle Eastern oil—four-fifths of its reserves in 1975—into state-owned companies like Saudi Aramco. That tightening grip on global oil is one big reason BP, even after the worst offshore oil spill in American history, is doubling down on the Gulf. The London oil company in 2012 sold stakes in three deepwater Gulf fields in part to collect cash for oil spill costs. But in the past year, BP has begun to regain its momentum and help push the U.S. deepwater region past its previous oil production peak, reached in 2009. BP has rebuilt its armada of deepwater drilling rigs to nearly double its size before April 20, 2010, fired up three big expansion projects since last...

Gas boom creating chemical bond between Gulf Coast, foreign firms

FuelFix.com yesterday took a look at the role of low-priced ethane in the petrochemical boom. Foreign companies are making big bets on the Gulf Coast petrochemical corridor, where capital investment is surging because of cheap U.S. natural gas, other lower costs and the existing industry infrastructure. As yesterday's article suggested, domestic natural gas and its byproducts, including ethane—a building block petrochemical companies use to make plastics and other materials—are low-priced here relative to most of the world because of the surge in oil and gas production from U.S. shale plays. The bargain-rate raw material has caused a stampede of recent international investment along the Gulf Coast in Louisiana and Texas, the center of the U.S. petrochemical industry. More than $90 billion of new plants and plant expansions are planned or under construction in the petrochemical belt that stretches from the Upper Texas Coast to New Orleans. Foreign investors include South...

ExxonMobil reopens BR terminal

ExxonMobil's Baton Rouge terminal gasoline loading racks—which the company closed more than a week ago to investigate reports of bad gasoline giving local motorists problems—will reopen today, says Stephanie Cargile, the company's public and government affairs manager. Exxon shut down the terminal racks on Wednesday last week and soon after traced the problems to two batches of gasoline—totaling 120,000 barrels, or approximately 5 million gallons—that were shipped from the facility between March 12 and 15. While the gasoline met regulatory specifications, Cargile says, an internal investigation by ExxonMobil identified an atypical variation in the affected unleaded, regular fuel. She says the variation is consistent with the kinds of issues that a number of local auto repair shops reported seeing in impacted vehicles: primarily, gummed engines that ran roughly...

Energy industry leaders clash over oil exports

Oil industry leaders clashed Wednesday on the nation’s 39-year-old crude export ban, as a Dallas-based refiner insisted that lifting those trade restrictions would spike gasoline prices. "There’s probably a 10-to-20 cent per gallon uplift in the cost of gasoline in the markets we serve which would result from this policy decision,’’ says Michael Jennings, CEO of HollyFrontier Corp. But Erik Milito, upstream director of the American Petroleum Institute that supports oil exports, countered that ending the ban would deliver broad "consumer-level benefits.’’ "Additional exports could help increase supplies, put downward pressure on the prices at the pump and bring more jobs to America,’’ Milito told a House Foreign Affairs subcommittee hearing on the issue. Pocketbook issues are emerging as a major factor in the debate over exporting U.S. crude. Domestic oil production is surging and imports are in decline, hitting a two-decade low last...

Getting water from the moon

When actress Linda Hunt accepted the Academy Award for her role in The Year of Living Dangerously in 1983, she said she was reminded of an Indonesian saying she learned while working on the film.

LOGA vows to continue fight against AG over oil and gas lawsuit

Louisiana Oil & Gas Association Vice President Gifford Briggs says LOGA plans to push forward with a lawsuit it has filed against Attorney General Buddy Caldwell, who the association claims did not have authority to approve the hiring of private counsel to represent a Louisiana levee board suing 97 oil and gas companies. "It is our full intention to appeal up to the First Circuit and continue going forward," says Briggs, who was guest speaker of the Baton Rouge Press Club this afternoon. Earlier this month, 19th Judicial District Court Judge Janice Clark ruled against LOGA in its suit against Caldwell, which effectively allowed the suit by the Southeast Louisiana Flood Protection Authority – East against the 97 oil and gas companies to move forward. Briggs today pointed to a 1997 Louisiana Supreme Court ruling specifying that contingency fee contracts are illegal unless they have the explicit authority of the Legislature. Briggs also highlighted several proposed bills today...

Texas company plans $20 million plastic railroad tie plant in north La.

A Texas company is planning to build a $20 million plant near Springhill, in north Louisiana’s Webster Parish, at which plastic railroad ties and other railroad products will be manufactured. The Associated Press reports that Gov. Bobby Jindal is set to announce later this afternoon that IntegriCo Composites will also move its corporate headquarters from Temple, Texas, to Webster Parish, and that the company plans to hire 300 people with an average salary of $35,000 a year, plus benefits. It's leasing 178,000 square feet of manufacturing space and 12 adjacent acres from the North Webster Parish Industrial District. The state and parish are providing incentives valued at $10 million. The state is offering $2.5 million in infrastructure improvements and the same amount in performance-based awards. The parish is providing a 10-year performance-based grant of $500,000 annually to support IntegriCo's lease of manufacturing equipment at the industrial park.

Alternative fuels company building La. production facility secures $100 million

Cool Planet—the Colorado-based company that creates gasoline and biochar from organic materials and is developing its first production plant in Alexandria—announced this morning that it has raised $100 million in Series D financing, Forbes reports. "The private placement was jointly led by UBS and Goldman Sachs, and included all of the existing investors, as well as over 50% from new sources of capital," Forbes says. "North Bridge Venture Partners and Concord Energy were lead investors in the round. Existing investors BP, Energy Technology Ventures (GE, ConocoPhillips and NRG Energy), Google Ventures and the Constellation division of Exelon also threw more chips on the table." Among other things, Forbes reports, the company will use the new capital injection to "help it speed construction of its 10...

Report: New natural gas pipelines needed in La. by end of the decade

Surging demand for natural gas in Louisiana will require by the end the decade the construction of new pipelines in a state that is already the "crossroads of the industry" and home to thousands of miles of existing pipelines. That's among the findings in "How Louisiana Satisfies Growing Southern Gas Demand: Implications for Portfolio and Investment Strategies in the Delta State," a white paper recently published by consultant ICF International, which predicts that a combination of the new petrochemical plants slated for construction, growing exports of liquefied natural gas and growth in the use of natural gas to generate electricity will make Louisiana a major importer of natural gas. "All together, these three major gas demand sources could nearly double Louisiana's annual gas demand as early as 2020," ICF concludes. On the supply side, Louisiana will be greatly aided by increased production from shale gas plays, some of them as far away as Pennsylvania. But given the timelines...

Complaints from B.R. motorists about bad gas continue; investigation ongoing

Louisiana Department of Agriculture and Forestry Commissioner Mike Strain says this morning that he is scheduled to meet with the ExxonMobil project manager this afternoon to discuss the ongoing investigation into bad gasoline that has been giving local motorists problems over the past week. The questionable gas has been traced to two batches, totaling 120,000 barrels, that were shipped between March 12 and 15 from Exxon's Baton Rouge terminal. Tests on the gasoline taken from a number of local gas stations will continue to be conducted by the agriculture department, he says. "We're not going to send out all the fuel samples at once until we have an idea what compound we're looking for," Strain says. Earlier tests done by the department Wednesday and Thursday ruled out bad water, ethanol, sulphur and vapor pressure as causes. Strain says his office received five more complaints from affected motorists this morning, bringing the total number of complaints to 34. "But I think those are...

ExxonMobil Baton Rouge terminal remains closed for investigation of bad batches of fuel

The ExxonMobil Baton Rouge terminal remains closed this afternoon as officials home in on two bad batches of fuel, says Todd Spitler, downstream media advisor for ExxonMobil Public and Government Affairs. "At this time, we believe the issue is limited to two batches of fuel that were shipped in mid-March," says Spitler, adding that Exxon "cannot speculate on the duration of the closure as we continue to work closely with local officials to investigate the matter." As Daily Report first reported, Exxon began investigating the issue with unleaded regular gasoline purchased at local retail stations Wednesday afternoon. While Exxon could not provide any additional details as to what might have caused the two mid-March batches to sour, additional testing done by the Louisiana Department of Agriculture and Fisheries has ruled out bad sulphur or vapor pressure as causes. While...

ExxonMobil B.R. terminal remains closed over gasoline concerns

ExxonMobil's Baton Rouge terminal remains closed this morning as the company continues to investigate reports of questionable gasoline being sold at local stations, and Exxon officials say they will release an update later today. As Daily Report first reported Wednesday afternoon, the terminal was shut down in response to numerous reports of motorists experiencing mechanical problems with their vehicles shortly after filling up with regular unleaded gasoline at various gas stations in Baton Rouge over the past few days. The terminal is where Exxon blends and ships gasoline to the market. Deliveries of gas from the terminal are not limited to Exxon-branded gas stations, says Stephanie Cargile, ExxonMobil public and government affairs manager for the Baton Rouge area. "ExxonMobil no longer owns or operates retail gas stations in the U.S.," she says. "Exxon- and Mobil-branded...

Methanex CEO: 'It is possible we'll be moving a third Chile plant to Geismar'

Vancouver-based Methanex, the world's largest supplier of methanol, has already announced that it's moving two of its four Chile production facilities to Geismar. Now it appears a third plant relocation to the Capital Region is also possible. Speaking at the annual Methanol Policy Forum in Washington, D.C., recently, Methanex President and CEO John Foren said the company is considering building a new plant at its Canadian site in Medicine Hat, Alberta, adding that it's also considering relocating more of its Chile and China production facilities to the United States, chemical industry news service ICIS reports. "It is possible we'll be moving a third Chile plant to Geismar, and we're also looking at a new build in Medicine Hat," ICIS quotes Floren as saying. Floren also said that of the five U.S. methanol plants that the company moved offshore in the mid-2000s, three went to China. Citing the shale gas revolution, Floren said those China plants "may come back to the U.S." It was in...

ExxonMobil investigating reports of bad gas being sold in B.R.

In response to numerous reports of bad gasoline being sold at various gas stations in Baton Rouge, an ExxonMobil spokesperson says the company has begun an investigation of its Baton Rouge terminal. “We have been made aware of this issue with gasoline purchased at select stations in Baton Rouge. When we learned about it we immediately began an investigation,” says Stephanie Cargile, ExxonMobil public and government affairs manager for the Baton Rouge area. “In doing so we have shut down our Baton Rouge terminal while the investigation continues.” Responding to complaints from Baton Rouge motorists that have been phoned in over the past three days, the Louisiana Department of Agriculture and Forestry has tested several stations for bad gas and continues to test others, says department spokesperson Veronica Mosgrove. As of this afternoon, Mosgrove says the test results from at least three local stations have not uncovered any problems regarding water or ethanol...

Cheap gas fuels chemical boom as Dow invests billions in La., Texas

Dow Chemical Co. and other U.S. chemical makers will boost output capacity 30% in a decade as they invest billions of dollars in factories to take advantage of low-cost shale gas, researcher IHS Inc. says. The producers are adding 105 million metric tons of capacity by 2024, led by ethylene and methanol units on the Gulf Coast, Russell Heinen, a senior director at the firm, said in his presentation at the IHS World Petrochemical Conference in Houston today, Bloomberg reports. Growth will peak in 2017 with the addition of 23 million tons of capacity. Gas prices that have dropped by half in a decade in the U.S. are allowing producers to process liquids such as ethane into chemicals at a lower cost than other regions of the world. Dow is spending about $4 billion to expand output in Louisiana and Texas. "Companies are placing bets that the energy revolution is real and sustainable," Jim Fitterling, Dow's executive vice president of feedstocks, performance chemicals and supply, said...

Landrieu poised to lead Energy and Natural Resources Committee in new direction

As Mary Landrieu, the new chairman of the Senate Energy and Natural Resources Committee, holds her first hearing today, The Wall Street Journal's Amy Harder says "it will be clear that the Louisiana Democrat is decidedly more pro-fossil fuel than her predecessor, Sen. Ron Wyden D.-Ore., and that she is planning to shift the committee in that direction." In a new blog post, Harder lists "five ways you know there's a new gavel in town," starting with the title of today's hearing: "Importing Energy, Exporting Jobs: Can it be Reversed?" "Landrieu is a big supporter of energy exports and is going to make that a defining part of her chairmanship," Harder writes. "Contrast that with the title of a similar hearing on natural gas Mr. Wyden, who is much more cautious on energy exports, held in February of last year: 'Opportunities and Challenges for Natural Gas.'" Harder says you can also expect Landrieu to make a pitch for the Keystone XL pipeline at today's hearing, which she says...

La.'s appetite for natural gas may double in six years, report says

Louisiana has long been a net importer of natural gas, but sea changes in where that gas is produced and how it arrives at Louisiana homes and plants will bring changes in natural gas production, transportation and marketing. That is among the conclusions in a recent white paper published by ICF International, a leading energy consultant. The study—"How Louisiana Satisfies Growing Gas Market Demand: Implications for Portfolio and Investment Strategies in the Delta State"—explains that Louisiana, for decades the crossroads of the natural gas industry in North America, is in a ticklish situation. State offshore production is dwindling, and while an expected resurgence in production from the Haynesville Shale is a positive development, most of that gas actually is produced in east Texas. The infrastructure needed to get that gas to Louisiana petrochemical and other industrial users in the southern parishes is aging and inadequate, ICF says. Costly new pipelines may be needed...

Louisiana shale gas set to see second life, report says

The surge in Gulf Coast petrochemicals and natural gas-fired power generation, combined with exports of natural gas, could push up Louisiana's demand for the fuel and revive a voracious market for Haynesville and Marcellus shale gas, according to an ICF International report. As FuelFix.com reports, the Haynesville Shale, which lies on the Louisiana-Texas-Arkansas border, was considered one of the hottest shale plays in 2008. But by 2012, the collapse of natural gas prices led to an exodus of operators to other plays in search of more oil-rich sites. But growing use of natural gas for electricity generation and newly approved gas exports could revive demand for natural gas in Louisiana, according to consulting firm ICF International's recent report. The chief driver for the anticipated increase will be natural gas exports, and Louisiana has positioned itself well to capture new international customers, ICF International notes. Louisiana's Sabine Pass export terminal is to date the...

Investor activism threatening oil industry amid shale worries

Well-heeled investors who control a growing block of money behind the North American energy surge have stepped up their bid to wring profits from oil companies, steering capital away from projects and toward dividends. As FuelFix.com reports, the financiers got pushy last year after growing tired of waiting for emerging shale reservoirs to become lucrative. They booted executives and pressed more than a dozen large firms to cut spending, sell international assets and spin off businesses into shareholder-friendly corporate structures. And they are not expected to back down this year. But as shareholder activism spreads across the industry, it's raising questions about whether American oil companies can maintain their position if they abandon plans to explore for hydrocarbons abroad and develop more resources. It also could strain executives' ability to reach long-term operational goals, diverting too much attention to short-term volatility in stock prices. "Its' a hard thing to build...

Natural gas industry struggles to keep promises

America's plan to use more natural gas to run power plants, make chemicals, drive vehicles and heat homes may not go as smoothly as expected. There's plenty of natural gas in the ground, everyone seems to agree. But, The Associated Press reports, the harsh weather this winter shows there are obstacles to producing it, and more pipelines have to be built. The bitter temperatures boosted demand for natural gas to heat homes and businesses. But wells in some places literally froze, making it difficult for some drillers to keep gas flowing. And the high demand clogged pipelines, so even when there was enough production, the gas couldn't get where it needed to go. Shortages cropped up, and prices in some places soared to record levels. Californians and Texans were asked to reduce their power consumption because utilities were running low on gas to run power plants. Montana State University in Billings had to cancel classes for a day because of a natural gas shortage. "We struggled to get...

Briggs expected to testify today in LOGA suit against AG

Louisiana Oil & Gas Association President Don Briggs is scheduled to testify in court today as his organization pursues legal action against Attorney General Buddy Caldwell. As Gannett Louisiana reports, the legal path to the courtroom has been complex—but the debate it sparked is clear: Do environmentalists' lawsuits risk driving oil company work and jobs away from Louisiana? Or is that contention merely a point of view oil company advocates use to exploit Louisianans' fear of unemployment and poverty? LOGA filed suit against Caldwell Dec. 20 after he allowed the Southeast Louisiana Flood Protection Authority – East, a state agency, to retain a private lawyer to sue 97 oil companies for failing to repair damage they allegedly caused to Louisiana's coast and wetlands. Briggs often publicly asserts there are about 400 ongoing frivolous lawsuits filed by environmentalists in Louisiana, but Lafayette's The Advertiser reports LOGA was unable to supply it a list. The...

Years likely needed for U.S. LNG exports to blunt Russia energy sales

U.S. efforts to speed natural gas exports as a way to loosen Russia's grip on European energy supplies may be thwarted by lengthy reviews and developer reluctance to proceed with multibillion-dollar projects, Bloomberg reports. Russia's military escalation in Ukraine is spurring calls in Congress for quick U.S. approval of plans to export liquefied natural gas from plants owned by companies including Cheniere Energy Inc., Dominion Resources Inc. and Sempra Energy. Russia provides 30% of Europe's gas needs using pipelines that cross Ukraine. While the shale-gas boom has made the U.S. the world's largest natural gas producer, efforts to ship the fuel are bogged down by rules, financing needs and construction demands. Winning U.S. approval can take three years or longer, and not all companies planning a project are committed to completing the work. Only one facility—Cheniere's $10 billion Sabine Pass terminal in Cameron Parish—has the required approvals from the Energy...

Executive editor: Success of industrial boom hinges on people as much as natural resources

Nothing is more sobering for the overly exuberant than hearing the straight skinny from people who know what they're talking about, says Business Report Executive Editor David Dodson. "Case in point: I attended a recent symposium on the impending construction boom in which a panel of experts from various fields recounted their experience with past surges in industrial activity," Dodson writes in his latest column. "Talk about a buzzkill." It's not that the panelists were being negative, Dodson says—far from it. "But they were injecting a note of reality that has thus far been missing in the chorus of hurrahs that attends each new plant construction announcement," he says. "If there were a theme to the symposium, it was that while the whole Louisiana Industrial Renaissance thing is predicated on long-term supplies of relatively inexpensive natural gas—something over which we in Louisiana exercise almost no control—the success of the overall enterprise boils...

LMOGA forms new committee to promote Gulf energy

The Louisiana Mid-Continent Oil and Gas Association is launching a new committee to promote Gulf of Mexico energy production and advocate for the industry's continued expansion. "Gulf energy production creates jobs in every state, and it yields an economic impact of $44.3 billion on Louisiana alone," says LMOGA Chairman Jim Hutchison in a news release issued today. "To continue this great success story, it's imperative that we increase our outreach efforts with federal leaders and have a seat at the table when key policy decisions are being made." LMOGA says the Offshore Committee will be coordinated by Lori LeBlanc, a Thibodaux-based independent consultant who specializes in advocacy for environmental and energy issues. As far as specific policies the committee may target, the association mentions in its press release "the Rigs to Reef program, national ocean policy, impacts of new mitigation requirements, outer-continental-shelf lease sales, revenue sharing, and industry safety and...

Don't expect international shale boom quite yet, experts say

While tight oil plays in the U.S. are booming, reproducing that success abroad could be challenging for American companies, according to energy executives and analysts who spoke Tuesday at the IHS CERAWeek energy conference in Houston. Peter Stark, senior research director and advisor at IHS, says he has identified 148 tight oil plays internationally with 288 billion barrels of oil equivalent technically recoverable. Those plays could hold promise at a time when, internationally, the volume of conventional oil discoveries is slumping and U.S. unconventionals are moving from a drilling boom phase to a slower period of steady production. But Stark warns that international tight oil won't necessarily fill the gap left in the wake of U.S. shale. He cites the difficulty of replicating the fiscal climate, regulatory regime and business conditions that have facilitated the boom in North America. Robert Ryan Jr., vice president of upstream global exploration at Chevron, adds that it's hard...

BP to splinter off U.S. onshore business as it cuts assets

BP is planning to split its U.S. onshore oil and gas business into a separate company by next year, a bid to become more competitive with smaller rivals that dominate the region's shale reservoirs, executives announced this morning. The move would install a new management team to oversee about 7.6 billion barrels of BP's oil and gas reserves across 5.5 million acres in the Eagle Ford Shale in south Texas, natural gas-rich regions in Oklahoma and Arkansas, and elsewhere. As FuelFix.com reports, that's more than a third of its energy reserves across the globe. "With the rapidly evolving environment, our business has become less competitive," BP CEO Bob Dudley told investors in a conference call early today. The new business "will have separate governance, processes and systems designed to improve the competitiveness of its portfolio." The splintered company would...

Canadian firm takes another step toward $300 million facility in Geismar

A contract and strategic partnership inked between Canada-based Avalon Rare Metals Inc.—which in August 2012 announced it had selected Geismar as the site of a potential $300 million rare earth elements separation plant and refinery—and a Belgian chemical firm appears to have boosted the likelihood of the Geismar project coming to fruition. Construction of the Geismar facility depends on a final investment decision by Avalon, a mineral development company that focuses on deposits of rare metals in North America. That decision is expected by the end of this year. In announcing a 10-year agreement on Monday with Brussels-based Solvay—which will process Avalon's rare earth elements into oxides at its separation and refining plant in France—Avalon says the deal also "makes the property optioned in Geismar...

Getting ahead of the boom

A playlist of the challenges and opportunities the coming industrial construction boom poses was laid out at a recent symposium in which veterans of previous upturns in the industrial sector told war stories and cautionary tales to a crowd of several hundred industrial contractors, suppliers, educators, lawyers and financiers.

Battle shaping up over 'Big Oil' lawsuit bill

Advocates of a south Louisiana flood control board's lawsuit against scores of oil and gas companies over erosion of coastal wetlands are making plans to fight legislation they say could undermine the suit. The Associated Press reports that the bill filed for the legislative session that begins March 10 would, among other things, ensure Gov. Bobby Jindal's power to reject an independent committee's nominations for membership on the Southeast Louisiana Flood Protection Authority-East. The proposed legislation—Senate Bill 79—has been filed by Sen. Robert Adley, R-Benton. Jindal opposes the lawsuit filed by the SLFPA-E in July 2013 against 97 oil, gas and pipeline companies. The levee board suit seeks compensation for wetlands damage and erosion in south Louisiana that it attributes to the network of canals cut by energy companies over the course of decades. Advocacy group Levees.Org...

LSU scientists estimate Tuscaloosa shale holds upwards of 7 billion barrels of oil

LSU scientists estimate the Tuscaloosa Marine Shale geologic formation—which stretches in a boomerang shape across Louisiana's midsection and into southern Mississippi—holds 7 billion barrels of oil, though that total isn't proven yet. Most of it is a light, sweet crude that can be sold to refiners for more than $100 a barrel. By comparison, the federal government estimates that the entire United States has about 40 billion barrels of proved oil reserves. If the LSU estimate proves accurate, the Tuscaloosa shale would be among the very largest fields in the nation. The shale reserve estimates come from a new feature story by The Associated Press that focuses on the potential of the Tuscaloosa shale, as well as the heightened hopes of the many communities—mostly rural—above it that have been waiting on a boom for years now. A steady trickle of drilling is already boosting the regional economy along the shale, and the AP reports that increased spending by two...

Dream of U.S. oil independence slamming up against rising shale costs

The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems. As Bloomberg reports, there are a few roadblocks. Among them, independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota's Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60. Closer to home, Houston-based Sanchez Energy Corp. plans to spend as much as $600 million this year—almost double its estimated 2013 revenue—on the Eagle Ford shale formation in south Texas, which along with North Dakota is one of the hotbeds of a drilling frenzy that's pushed U.S. crude output to the highest in almost 26 years. "We are beginning to live in a different world where getting more oil takes more energy, more effort and will...

Surge in fuel exports boosting U.S. trade balance

Growing production of U.S. oil and gas is helping to improve the nation's trade balance, according to a federal report released on Monday. As FuelFix.com reports, dramatic growth in the export of refined petroleum products, such as jet fuel and gasoline, has led the way. The value of net refined exports increased 55% in 2013 over the prior year, reaching $33 billion, according to the U.S. Energy Information Administration. U.S. refiners are finding cheaper domestic alternatives to overseas oil, causing a rally in the ratio of refined fuel exports to imports. Overall energy export values increased 8% in 2013 over the prior year. Total energy imports to the U.S. fell by 11% for the same time period. The shifts have helped push down the U.S. trade deficit to its lowest level in four years, because of the importance of energy imports and exports. Energy accounts for 15% of gross goods imports and 7% of gross goods exports, the EIA says. The increase in production also has dampened...

Oil spill, temporary river shutdown highlight risk of U.S. oil boom

The Louisiana barge crash and subsequent oil spill on Saturday that temporarily shut down a stretch of the Mississippi River as far north as Baton Rouge through Monday afternoon highlights the transportation risks of the U.S. energy boom, according to some sources cited in a Bloomberg report. "We're facing the imminent risk of a barge disaster or a rail disaster" as more oil is shipped to the Gulf of Mexico for refining, says Jonathan Henderson, a spokesman for the New Orleans-based Gulf Restoration Network. A surge in U.S. oil production, reflecting in part advances in drilling techniques, has unlocked millions of barrels of oil from geologic formations such as North Dakota's Bakken shale, reducing U.S. reliance on imports. It has also ignited a debate over how to safely get the oil to refineries after a series of rail accidents involving oil tank cars, including a July derailment that killed 47 in a Quebec city. Of course, there are many in the oil and gas industry who maintain the...

'Business Report': Big industry battles over whether LNG exports might hamper domestic economic growth

Chris John says when he was in Congress from 1997 to 2005, America's energy picture was very different. "We were building natural gas import facilities because we didn't have enough natural gas," the head of the Louisiana Mid-Continent Oil and Gas Association tells Business Report for a new feature in the current issue by staff writer David Jacobs. "The dynamics of the natural gas market has really taken a 180 [degree turn] over a short period of time." Today, thanks to the shale gas revolution, we have more natural gas than we know what to do with, which has deflated the price and fueled a resurgence for the Capital Region's gas-dependent chemical sector. But while cheap natural gas is great for the plants and for anyone who pays an electric bill, it's not so good for the oil and gas companies that try to sell the stuff. So the energy industry is keen to liquefy natural gas and export it to nations where it might fetch more than three times the domestic price, and the U.S.

Asian tigers stalk U.S. gas as La. shale profits taper

DeSoto Parish has a problem. And as Bloomberg reports, the solution may lie 10,000 miles away in Jakarta, Indonesia. DeSoto and other communities in the Haynesville shale formation have become victims of the energy industry's success in extracting natural gas from deeply buried rock, Bloomberg reports. Even as U.S. gas production surges to a record, outpacing domestic demand, Haynesville output has slumped 40% since 2011 amid falling prices, as companies shift rigs to reservoirs richer in lucrative oil and gas liquids. Tax revenue has tumbled by the same percentage over the past two years from a record $50 million in the parish. Meanwhile, Indonesia's energy use may more than double from 2010 through 2035, according to the Asian Development Bank. As early as next year, cargoes of liquefied natural gas shipped from Gulf Coast terminals to fast-growing Asian countries will propel the region into the ranks of global gas exporters such as Qatar and Australia for the first time. "LNG...

Profits from U.S. natural gas exports could disappoint, study says

New natural gas export terminals in the U.S. might not be as profitable as once imagined—at least for a few years—due to overbuilding, a new study from Rice University warns. From about 2016 to 2025, the cost of liquefying natural gas in the United States and shipping it to Asia likely will exceed the difference in the commodity's price in the two regions, according to the study, released today. Just last week, the sixth LNG export facility in the U.S.—and the second in Louisiana—received approval from the U.S. Department of Energy. Today, FuelFix.com reports, natural gas costs more than $18 per thousand cubic feet in Asia, while the U.S. price generally has held below $4 per thousand cubic feet during the past couple of years. That has helped fuel a rush to build liquefied natural gas export facilities along the Gulf Coast and in Canada, as producers view...

Westlake marks completion of $425 million Geismar plant

The completion of Westlake Chemical's $425 million chlor-alkali plant in Geismar means the company is now providing internally produced chlorine for its adjacent vinyl chloride monomer (VCM) and polyvinyl chloride (PVC) plant. Gov. Bobby Jindal joined Westlake CEO Albert Chao in Geismar today to highlight the completion of the chlor-alkali plant, which includes the capacity for 350,000 tons of chlorine per year and 385,000 tons of caustic soda per year. On top of creating 70 new direct jobs and retaining 75 existing employees, LED estimates the project will result in an additional 384 indirect jobs. Development of the new chlor-alkali plant began in 2010 and created 2,000 construction jobs at peak activity. For its downstream building products companies, Westlake provides PVC pipe for water and sewer applications, PVC siding, windows, fencing and other building products. "The new facility is adjacent to the existing facilities and the construction of this new plant is consistent with...

To export, or not to export

Chris John says when he was in Congress from 1997 to 2005, America's energy picture was very different.

Construction boom veterans: The time to act is now

Several hundred industrial contractors, suppliers, educators, lawyers and financiers gathered Thursday evening to hear directly from those who have been in the trenches what the coming industrial boom will mean for their businesses. Veterans from industrial construction, plant operations and human resources had cautionary tales for the crowd of listeners eager to hear how their companies can hitch their wagons to the construction boom star. The event, hosted by Regions Bank and co-sponsored by the Kean Miller law firm and Business Report, provided historical perspective on why Louisiana is a magnet for industry, especially petrochemicals, and what we can learn from previous booms. The first thing to understand, according to Dan Borné, president of the Louisiana Chemical Association, is that the impending boom did not occur out of nowhere. "We shouldn't lose sight of the gifts that have provided the platform," he said. "God gave us dead dinosaurs to create a Jurassic Park of...

Conflict creeps into an oil industry awash in crude

T. Boone Pickens has personified the nation's oil industry for more than a generation. So when he made an offhand comment at a conference in Houston a few weeks ago expressing reservations about lifting the nation's ban on exports of crude oil, The New York Times reports, he startled some of his old allies in the business. Scott Sheffield, chief executive of Pioneer Natural Resources and one of the top oil executives in Texas, picked up the phone to have a chat. "We had lunch and he made sense," says Pickens, who has since revised his position. Chalk one up for the oil producers, who have begun lobbying the Obama administration, Congress and the public to let them export the bounty of crude oil flowing out of new shale fields across the country. Opposing them are their erstwhile cousins, the independent refiners, who insist that they need abundant, economical domestic supplies of oil so they can compete with foreign refiners. It is a rare clash in a deeply guarded industry...

Feds approve second La. LNG export terminal, sixth overall

Sempra Energy subsidiary Cameron LNG announced today that its plans to build a liquefied natural gas export terminal near Hackberry in Cameron Parish have been approved by the U.S. Department of Energy. The approval marks the sixth LNG export facility in the U.S.—and the second in La.—authorized to ship domestic natural gas to non-free-trade-agreement countries such as India, China and Japan—all huge markets for LNG. "Exporting natural gas will lead to the creation of thousands of new jobs and economic growth here in the U.S. and enable our partners to deliver domestically produced natural gas to our allies abroad and to the world marketplace," says Debra L. Reed, chairman and CEO of Sempra Energy, in a press release. It is a sentiment echoed by Sen. Mary Landrieu—the likely successor to Oregon Sen. Ron Wyden as chair of the powerful Senate Energy and...

Executive Editor: Obama's latest pledge to slash bureaucracy, streamline permitting just more 'rhetoric and high oratory'

Had Business Report Executive Editor David Dodson been eating while he watched President Barack Obama's recent State of the Union address, he says he would have choked. "I will act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible," said the president. "If challenged to find the polar opposite of slashing and streamlining, I could not ask for a more shining target than the administration's handling of the long-delayed Keystone XL pipeline permit," writes Dodson in his latest column. For full disclosure, until six months ago, Dodson worked for TransCanada's Keystone XL. On the notion that the president intends to slash bureaucracy, Dodson says the folks over at the U.S. Fish and Wildlife Service must not have heard the president when he made a similar statement in March 2012—from a TransCanada pipe yard in Oklahoma—about how he was going to streamline the...

Old Entergy headquarters on Government eyed as possible train station

The site of the city's first electric railway service in the 1800s could once again be a train station—as well as a major catalyst for the redevelopment of Mid City. The site is the long-blighted, six-acre parcel on Government Street that houses 11 buildings and, for most of the 20th century, was the local headquarters of Entergy. The utility company donated the parcel late last year to the East Baton Rouge Redevelopment Authority, which has begun the process of cleaning up the property and planning for a mixed-use development on the site. "As we begin to plan we are going to have at least one set of alternative plans drawn up that has a train station at the site," says RDA President and CEO Walter Monsour. "That's where the original train station was so it makes sense." An existing rail line borders the western edge of the property. At a meeting earlier today of the...

Words aren't facts

President Barack Obama gave a pip of a speech to the nation Jan. 28. If rhetoric and high oratory were the measure of such things, then the state of the Union would indeed be strong.

Methanex says 'important milestone' reached on Geismar plant relocations

In a fourth-quarter report released today, Methanex Corp. President and CEO John Floren says the Vancouver-based methanol producer has met an "important milestone" in the relocation of two plants from Chile to Geismar. The milestone Floren refers to is the relocation of all "major equipment pieces" to the site of the first Geismar plant. "We are targeting to be producing methanol from Geismar 1 in late 2014 and from Geismar 2 in early 2016," Floren says in a press release accompanying the fourth-quarter report. "These key projects support the 3 million tonne increase in our operating capacity to 8 million tonnes by 2016, a time when new market supply is expected to be limited." Methanex reports its its adjusted net income rose to $167 million during the last quarter of 2013, up from $117 million the previous quarter. The company's 2013 total adjusted...

Lake Charles export facility to be most efficient in world, official says

The president of Magnolia LNG—whose parent company is Australian-based Liquefied Natural Gas Limited—updated Lake Charles Port Board members on the company's estimated $3.5 billion liquefied natural gas project on Wednesday. He also presented a check to extend the company's lease with the port for a year. As KPLC-TV reports, Magnolia President Maurice Brand told the board the export facility will be the most efficient in the world. "Most energy plants will use 9% to 10% of the gas that's utilized actually in the plant itself. We're typically going to be somewhere in the 6% to 8% range. So that has a big impact; it's about a 30% improvement in efficiency, therefore there's 30% less greenhouse gas emission," Brand told the board. Meanwhile, Magnolia—which announced the project last year and expects to break ground on it next year—also says it has reached an agreement with Kinder Morgan...

Environmentalists cringe as Obama touts oil and gas

President Barack Obama celebrated "booming" U.S. oil and gas production during his fifth formal State of the Union address Tuesday night, delivering a blow to environmentalists worried the president isn't doing enough to combat climate change, Fuelfix.com reports. From his podium in the House of Representatives, Obama held steadfast to his pledge of an "all-of-the-above energy strategy" that he claimed was bringing America "closer to energy independence than we've been in decades." And the president touted the potential of natural gas to help the U.S. pare its emissions of heat-trapping gases while making the transition to cleaner energy sources, such as wind and solar. "If extracted safely," Obama said, natural gas is "the bridge fuel that can power our economy with less of the carbon pollution that causes climate change." For some, Obama's approach may have been viewed as pragmatic—acknowledging the fossil fuels pouring out of West Texas and North Dakota while reminding...

'Business Report': Oil and gas industry aims to further tweak rules governing 'legacy lawsuits'

The 2012 session of the Louisiana Legislature included a minor political crisis for the Jindal administration. The issue: so-called legacy lawsuits. As Business Report's David Jacobs details in a feature from the current issue, oil and gas companies were hoping the industry-friendly governor would be their ally in thwarting expensive legal actions—otherwise known as Act 312 suits—by landowners over environmental damage that often is decades old. But as the session dragged on and a flurry of competing bills were debated, their worries grew that Jindal would side with the wealthy landowners instead. Eventually a deal was reached that gave the industry most of what it wanted. But now, not even two years later, oil and gas interests are unhappy with their lot once again. "We're going to need to tweak it," says Don Briggs, president of the Louisiana Oil & Gas Association. "When you create a law, you don't necessarily get it right the first time." Briggs claims...

'Business Report': Billion-dollar businesses are banking on Louisiana-made ethylene

Businesses across south Louisiana are well-acquainted with the economic tsunami generated by cheap natural gas that is spurring billions of dollars in industrial investment in Louisiana. But as Business Report details in a feature from the current issue, less commonly understood is how the state's abundant resources are changing the dynamics of the global chemical industry. Geographic shifts are underway in the supply chain of key materials that drive chemical production, and Louisiana's wealth of natural gas has helped boost North America's profile in the worldwide chemical marketplace. The action stems largely from profits associated with ethylene, a hydrocarbon that is one of the chemical industry's primary building blocks. "Companies want to make as much ethylene as possible and sell it into the business supply chain," says Dan Borné, president of the Louisiana Chemical Association. Known among producers as the workhorse of the petrochemical industry, ethylene is the most...

Investor calls on Dow to shed additional petrochemical assets

Hedge fund Third Point LLC announced today that it has increased its stake in Dow Chemical with an eye toward pressuring the company to conduct a strategic review of its operating assets. The Associated Press reports Third Point is now among Dow's top 10 shareholders and Dow is Third Point's single largest investment, and CNBC reports that Third Point has increased its stake in Dow by $1.3 billion. Activist investor Dan Loeb says in a memo to Third Point investors that Dow is underperforming and should expand its previously announced decision to sell or spin off approximately $5 billion in chlorine and brine assets, including a portion of Dow's facilities in Plaquemine. CNBC reports Dow shares jumped 6.6% on the news to $45.93 at the close in New York, the biggest gain in more than two years. Dow...

How America's fracking boom is helping boost Treasuries demand

With the U.S. economy relying less on oil and gas imports than at any time in two decades, energy expenses for Americans have fallen and cut into inflation more than any other living cost in the past year, according to data compiled by the Labor Department. Economists are predicting that consumer prices will rise less than 2% for a second straight year in 2014, the first time that's happened during an expansion in a half-century. And as Bloomberg reports, slowing inflation—which increases the purchasing power of fixed-rate payments—would give support to Treasuries after the Federal Reserve's plan to curtail its unprecedented bond buying ignited their first annual losses since 2009. Ten-year notes yielded 1.76% last month after deducting inflation, close to the highest since 2011. Spending fewer dollars on foreign oil also means that any gain in crude prices no longer leads to a weaker greenback, upending a decade-long relationship that may strengthen the value of U.S.

The legacy quest

The 2012 session of the Louisiana Legislature included a minor political crisis for the Jindal administration. The issue: so-called legacy lawsuits.

Chemical gold

Businesses across south Louisiana are well-acquainted with the economic tsunami generated by cheap natural gas that is spurring billions of dollars in industrial investment in Louisiana.

U.S. oil boom will slow in 2015, feds forecast

U.S. daily crude production will slow next year for the first time since the nation's shale oil boom began three years ago, according to a new federal estimate. In its first forecast of the nation's energy position in 2015, the U.S. Energy Information Administration projects that oil producers will increase production by about 750,000 barrels of oil per day in 2015. That's a drop from an expected daily increase of 1.3 million barrels in 2014 and the growth of the past two years. Falling oil prices could dampen the incentive for energy companies to produce as much crude in 2015, a symptom of shrinking demand for motor fuels as automakers sell more efficient cars and American drivers burn less rubber, says John Staub, head of the EIA's exploration and production team. "People aren't traveling quite as much as in the past," Staub tells Fuelfix.com. Still, the EIA's projected daily production of 9.3 million barrels per day in 2015 comes close to levels in 1972, one of the nation's...

Shale-oil boom puts spotlight on lifting of U.S. crude export ban

The U.S. government virtually banned the export of crude oil in the wake of the mid-1970s energy crisis. But as America pumps more crude, The Wall Street Journal reports, 2014 could be the year those constraints are lifted. For decades, even discussing the possibility of exporting domestic oil was a political nonstarter in Washington. Now, surging U.S. production has led to the beginning of a glut along the Gulf Coast, home to the largest refinery complex in the world. Too much crude is driving down prices there, making producers eager to export some of their oil to places like Europe where prices are higher. Signs that the energy industry would challenge the export restrictions began appearing in the final months of 2013, with the American Petroleum Institute, the oil industry's main lobbying group in Washington, D.C., saying it was looking to end the ban. Last month, Ken Cohen, vice president of public and government affairs at Exxon Mobil Corp., the nation's biggest energy...

Shale boom expected to push pump prices down next year

Barring bad weather and major disruptions in the global oil supply, market forces may curb unbridled U.S. gasoline prices next year more than any year since the country emerged from economic recession. Unforeseen incidents still have power to galvanize prices at the pump, and some parts of the U.S. may see prices swing 75 cents in either direction—markets are still volatile on a weekly basis—but the average price of gasoline could fall by 10 cents next year, according to the consumer gasoline information website GasBuddy.com. Booming oil production at U.S. shale plays shielded the country from big spikes in crude prices this year, even as international conflicts in the Middle East slowed the flow of oil several times. That, GasBuddy says in a recent report, could drive gas prices lower next year as well. As always, crude costs and gasoline prices will likely vary widely across the country. Fuelfix.com

2013 U.S. oil boom is biggest ever, data shows

The United States' average daily oil production is on track to surge by 1 million barrels per day this year, the biggest one-year jump in the nation's history, according to federal data. Fuelfix.com reports the country has pumped an average of 7.5 million barrels of crude per day in 2013, up from 6.5 million barrels per day in 2012. That breaks last year's record, when oil production jumped by 837,000 barrels per day between 2011 and 2012. The U.S. Energy Information Administration projects that oil production will jump by another 1 million barrels per day in 2014, largely buoyed by drilling activity in Texas' Eagle Ford Shale and Permian Basin regions, as well as North Dakota's Bakken Shale. The Gulf of Mexico also is seeing a boost, with oil production expected to grow to 1.4 million barrels per day in 2014, up by 100,000 barrels. The data is evidence of the astonishingly rapid turnaround in the nation's energy story. Oil production declined in 29 of the 40 years between 1971 and...

BP takes latest arguments over spill payments to appeals court

BP is again asking a New Orleans appeals court to intervene after a federal judge denied its latest attempt to block some payments in its multibillion-dollar oil spill settlement. On Tuesday, U.S. District Judge Carl Barbier tossed the British oil giant's argument that settlement claimants must show that the 2010 Gulf of Mexico disaster actually caused profit or revenue losses, and BP promised to take the matter to a higher court. Barbier said BP could not take a position that contradicted its earlier stance in the settlement. He cited court documents in which BP said businesses' profit losses can be "presumed to be caused by the spill" after claimants meet certain criteria, such as geographic proximity to the spill. The Associated Press reports BP filed a notice of appeal today. In court documents, BP claimed last month it paid more than $540 million to claimants who could not have been harmed by the spill. All told, the company has paid out $3.8 billion to claimants since the...

Living in the industrial boom

In Williston, N.D., a prairie town that has seen its population jump from 1,500 to nearly 8,000 in just a few years due to a rise in oil and gas exploration, workers have struggled to find a place to call home.

Transmission transition

It's been a good news/bad news month for Entergy.

Iowa firm to acquire 50% stake of shuttered biofuels plant in Geismar

Ames, Iowa-based Renewable Energy Group Inc. has entered into an agreement with Syntroleum Corporation to acquire "substantially all of the assets" of the Tulsa, Okla.-based company, including a 50% stake in Dynamic Fuels LLC, a 75-million-gallon-a-year capacity renewable diesel production facility in Geismar. The Dynamic Fuels plant, which makes fuel from animal fat, has reportedly not been in operation since the fall of 2012. Under the deal, Syntroleum will received approximately 3.8 million shares of REG common stock, which were worth about $40 million at the close of Tuesday. Along with the Geismar facility, "Syntroleum and its 50%-owned subsidiary Dynamic Fuels represent an attractive entry path for REG into renewable diesel," says REG President and CEO Daniel Oh in a news release. "They have invested substantial...

Ex-BP engineer convicted on one obstruction charge, acquitted on second

A former BP drilling engineer was convicted today of deleting text messages from his cellphone to obstruct a federal investigation of the company's massive 2010 oil spill in the Gulf of Mexico. Kurt Mix was found guilty on one charge and acquitted of a second charge. A federal jury deliberated for more than nine hours over three days before reaching the verdict on his case. The count of obstruction of justice carries a maximum sentence of 20 years in prison and a $250,000 fine. Mix will be released on his present bond, and sentencing is scheduled for March 26. The Associated Press reports Mix hugged his friends and family members in the courtroom before leaving the courthouse hurriedly. "I'm only going to speak through counsel," he told one reporter trying to ask him a question. Trailing behind her brother in the courthouse lobby, Bridget Mix called the verdict "just unbelievable." "You can't wrap your head around any of it," she said. Prosecutors argued that the 52-year-old engineer...

Shale well depletion raises questions over U.S. oil boom

The stubborn rock that the energy industry breached to unleash a nationwide oil and gas rush remains a worthy foe, as producers must turn their drills ever faster to keep the boom's lifeblood flowing. Fuelfix.com reports that engineers have long known that shale—the source rock that fed North American sandstone reservoirs for millennia—could never muster the natural pressure producers needed to extract oil and gas. Its molecules are too tightly packed: Shale is about 1,000 times denser than brick, and so far, only hydraulic fracturing can induce enough artificial permeability to clear a path for the fossil treasure. But that technique also creates an initial production spike that soon turns south: Behind the headlines boasting of a U.S. oil boom, producers have been grappling with rapid production declines at aging shale-play wells. The only answer: drill more and more wells. In recent months, falling production at individual wells has garnered more industry attention and...

Lawyers for levee board, oil and gas companies at odds over which court should hear suit

A legal tug-of-war continues in a state levee board's lawsuit against 97 oil, gas and pipeline companies over the erosion of wetlands. The Associated Press reports the Southeast Louisiana Flood Protection Authority - East wants U.S. District Judge Nannette Jolivette Brown to send the case back to Orleans Parish Civil District Court, where the board filed it in July. Attorneys for Chevron USA Inc. got the lawsuit moved to federal court in August, arguing that federal laws govern many of its claims. Since then, lawyers have filed hundreds of pages of arguments and exhibits just on the question of which court should hear the case. Brown has scheduled arguments on the matter today. The lawsuit says oil and gas canal and pipeline work has contributed to the erosion of wetlands that protect New Orleans when hurricanes move ashore. Corrosive saltwater from a network of oil and gas access and pipeline canals has killed plants that anchored the wetlands, letting waves sweep away hundreds of...

Williams Olefins facing $99,000 in OSHA fines over Geismar explosion

The U.S. Occupational Safety and Health Administration this afternoon announced it is proposing $99,000 in fines for Williams Olefins as a result of the June explosion and fire at the company’s Geismar plant that killed two people and injured 80. “Williams Olefins violated safety and health standards which, when followed, can protect workers from hazardous chemicals,” says Dorinda Folse, OSHA’s area director in Baton Rouge, in a news release issued this afternoon. “It is the employer’s responsibility to find and fix workplace safety violations and to ensure the safety of its workers. Failing to do so cost two workers their lives.” OSHA says Williams Olefins was cited for five serious safety violations and one willful violation for failing to develop clear, written procedures for how to change and put idle pressure vessels into service. OSHA says a willful violation is one committed with intentional, knowing or voluntary disregard for the...

Miss. utility regulators reject Entergy-ITC transmission merger

Mississippi utility regulators have unanimously rejected a proposal by Entergy Corp. and ITC Holdings Corp. for Entergy to spin off its 15,400-mile electric transmission business to ITC via a merger. Entergy's transmission system serves parts of Louisiana, Mississippi, Arkansas and Texas. Public Service Commission members say the deal could've meant a $300 million rate increase for Mississippi customers over 30 years. Entergy executives say they're disappointed in the Mississippi regulators' vote today and will work with ITC to determine the companies' next steps. In 2011, New Orleans-based Entergy said it would transfer its high-voltage lines to Novi, Mich.-based ITC, which would issue Entergy shareholders enough stock to give them a majority of ITC shares worth more than $2 billion. ITC would assume $1.78 billion in debt under the deal, The Associated Press reports. The merger request also was filed in other states Entergy serves—Louisiana, Arkansas and Texas. Regulators in...

Boom to bust?

December brought a spate of bad news for industry in the Capital Region. In the span of one week, a $12.5 billion potential project was shelved and two other companies announced cutbacks.

Seeking the sustainable

I was watching LPB the other night, which is what I do whenever Diners, Drive-ins and Dives isn't airing, and I came across a wonderful documentary by filmmaker Kevin McCaffrey called Cajun Food Traditions Now. It isn't new (LPB first aired the piece in 2011), but it was new to me.

Feds order two La. companies to stop offshore work

The federal government has ordered five companies—all of which are relatively small operators, according to Fuelfix.com—to halt offshore oil and gas operations after they failed to give regulators an audit of safety plans newly required since the 2010 Deepwater Horizon disaster. Two of the companies forced to shut down their offshore work are headquartered in Louisiana: Virgin Offshore USA of New Orleans and Matagorda Island Gas Operations of Morgan City. Houston-based Breton Energy, EP Energy and XTO Energy are the other three firms impacted by the order, but EP Energy says its shutdown order has been made in error, the order having been sent to the company for facilities that have since been sold to other operators. The Bureau of Safety and Environmental Enforcement, which ordered the stand down, estimates the effect on U.S. oil and gas supplies would be "minuscule," given most of the firms are primarily involved in decommissioning old offshore facilities. Only...

Board delays vote on 'Big Oil' lawsuit

A south Louisiana flood control board has postponed a vote on whether to stop action on a lawsuit against oil and gas companies over coastal wetlands loss. A resolution to stop action on the lawsuit was on the agenda released this week for today's meeting of the Southeast Louisiana Flood Protection Authority – East. But new board member Lambert Hassinger Jr. called for a delay, pending an Ethics Commission review of whether he can vote on the issue. Hassinger is seeking a review of whether his law firm's representation of oil and gas companies is a conflict of interest, according to The Times-Picayune. Hassinger was appointed to the board by Gov. Bobby Jindal, who opposes the lawsuit.

BP says it has its largest-ever fleet at work in the Gulf

Three years after the Deepwater Horizon disaster, BP has built up its largest fleet ever in the Gulf of Mexico, adding two drilling rigs in recent weeks to its U.S. offshore operations, the company announced Tuesday. As Fuelfix.com reports, the two rigs boosted BP's Gulf fleet to nine, following two others added in late 2012. It's another sign the skies are clearing over the Gulf, where BP's blown out Macondo well spilled millions of barrels of oil into the ocean and the federal government instituted a three-month drilling moratorium on some deepwater operations in 2010. The two new rigs reflect "the vital importance of the deep-water Gulf of Mexico to the future of BP," Richard Morrison, the company's regional president for the Gulf, says in a written statement. Every year for the next decade, the British oil giant is planning to spend about $4 billion on its deepwater fields in the Gulf. As international oil giants dip back into the Gulf, the region's daily production could rise by...

BP releases trove of Gulf environmental data on new website

BP has released a massive amount of environmental data it uses in its efforts to clean up the Gulf, where the company's Macondo well spilled millions of barrels of oil in 2010. Fuelfix.com reports the company is planning to publish data on everything from aquatic life and birds to Gulf shorelines and environmental toxicology, but BP's first data dump includes 2.3 million lines of water chemistry data and measures the amount of crude-related chemicals that were in the ocean. BP also published data on the composition and degradation of the oil released from its well. The data—published on a new website Monday—follows another website the company launched this month to "set the record straight" on the Gulf. The second site is an attempt to allow interested outsiders to use the environmental data in scientific studies or to come to their own conclusions about the Gulf, BP says. The company has...

Environmental activists hold strategy session in B.R.

Supporters of a lawsuit against oil and gas companies over coastal land loss have organized a new nonprofit, Restore Louisiana Now, that will discourage the Louisiana Legislature from intervening in the suit. "This is a fight for the survival of this state and our way of life," John Barry, former vice president of the Southeast Louisiana Flood Protection Authority - East, told a group of environmental activists at the Burden Conference Center today. Lt. Gen. Russel Honoré headlined the meeting. "The industry has been given a free ride to do what they want in Louisiana," Honoré said. Topics on today's agenda included the Bayou Corne sinkhole, saltwater intrusion into the Baton Rouge-area...