Content tagged “Energy and resource”

Southwest La. industrial boom rolls ahead with megaproject announcement, LNG groundbreaking

Roughly nine months out from completing its $425 million chlor-alkali plant in Geismar, Westlake Chemical announced today plans to expand the ethylene capacity at its Sulphur plant and make other capital improvements totaling $330 million.
Louisiana Economic Development estimates the Sulphur expansion and upgrades will retain 480 existing jobs and create 25 new direct jobs, as well as 164 new indirect jobs. LED's Business Expansion and Retention Group began discussing the expansion project with Westlake Chemical in May.
To secure the project, the state is providing the company with an incentive package that includes a $2.5 million Modernization Tax Credit, to be claimed over five years. The company also is expected to utilize Louisiana's Quality Jobs and Industrial Tax Exemption programs. Westlake Chemical hopes to complete the ethylene expansion in late 2015 or early 2016, with hiring for the new direct jobs to begin late in the fourth quarter of this year.

Entergy official promises new industrial power demands can be met

Entergy can guarantee power for any new projects that are part of the expected industrial renaissance in Louisiana, says John Hurstell, the utility's vice president for system planning.
"We are adding generation as we speak," he says. "This is a once-in-a-lifetime opportunity for the state."
Hurstell was part of a panel discussion today at the LSU Center for Energy Studies' annual Energy Summit, where concerns were raised about potential new EPA regulations on power plant carbon emissions. Hurstell says that while it doesn't appear that EPA understands the energy business, he suggested stakeholders in government, industry and the environmental movement could hammer out a plan to reach carbon reduction goals that no one is happy with but that everyone can live with.

At $80 a barrel, oil muffles forecasts for US shale boom

The bear market in oil has analysts reassessing the U.S. shale boom after five years of historic growth. As Bloomberg reports, the U.S. benchmark price dropped to $79.78 a barrel on Oct. 16, the lowest since June 2012. At that level, one-third of U.S. shale oil production would be uneconomic, analysts for New York-based Sanford C. Bernstein & Co. say in a new report issued Monday.
Drillers would add fewer barrels to domestic output than the previous year for the first time since 2010, according to Macquarie Group Ltd., ITG Investment Research and PKVerleger LLC. Horizontal drilling through shale accounts for as much as 55% of U.S. production and just about all the growth, according to Bloomberg Intelligence.

Cleco to be bought by Australian-led investors for $3.4B

An investment group led by Macquarie Infrastructure and Real Assets will buy the Louisiana power company Cleco for $3.4 billion. The group will pay $55.37 in cash for each share of Cleco, which owns the regulated electric utility Cleco Power. That amounts to a 15% premium on the stock's closing price of $48.27 on Friday, the last trading day before the deal was announced. The buyer group includes British Columbia Investment Management Corp. The deal, expected to close in the second half of next year, is valued at about $4.7 billion when $1.3 billion in debt is included. Cleco Corp., based in Pineville, will continue to operate as an independent company under local management. The company also says there will be no change in utility rates or employment levels. The company generates and sells electricity mostly in Louisiana, where it has about 284,000 customers. Cleco also supplies wholesale power in Mississippi. Cleco's stock has climbed 3.5% so far this year, a slightly better gain...

Oil slump means canceled projects as investment declines

The global crash in crude prices is reverberating through the oil and gas industry, pressuring producers to curtail investment to protect profits and avoid cuts to dividend payments. Bloomberg reports projects in the Canadian oil sands, offshore fields in Norway and drilling-intensive U.S. shale deposits—including the Tuscaloosa Marine Shale below central Louisiana—are among the most vulnerable as oil prices come perilously close to production costs. The world's largest oil companies have rarely spent so much for so little reward. Even before this week's sharp drop-off in prices, French research house IFP Energies Nouvelles expected investment in the industry to fall 8% this year. With oil approaching a four-year low, producers will be even more cautious about sanctioning investment, says chairman Olivier Appert. "Oil companies will think twice before launching new...

La. chemical manufacturers not panicking over tumbling oil prices, Borne says

Despite this morning's drop in crude oil prices to a 47-month low before a rebound to around $84 per barrel, Louisiana Chemical Association President Dan Borné says he hasn't heard any major concerns from chemical manufacturers yet. "That's not to say that a precipitous drop in the price of oil, with no long-term prediction of ever recovering, would not cause some reassessment of investments in U.S. ethane crackers," Borné says. "But oil is an international commodity and can quickly fall prey to geopolitical events that can cause large swings in its price." This morning's decline comes on the heels of a more than $4 per barrel drop on Tuesday—the biggest daily decline in more than three years. Oil closed between $80 and $90 a barrel last week, while U.S. natural gas closed between $3 and $4 per mcf, which Borné says is still a very healthy ratio that makes U.S. ethane production "wildly competitive" with the rest of...

Perry calls for unlimited oil and gas exports, could hurt La.'s boom

Less stringent regulations on natural gas and oil exports could strengthen the U.S. economy and help win more allies on the world stage, Texas Gov. Rick Perry said Wednesday at an energy summit in Mississippi, but such a move could hike up oil and gas prices inside the U.S. That could slow Louisiana's industrial boom, as chemical and manufacturing plants rely on gas to produce their goods. The Associated Press reports that Perry called for unlimited exports. "If energy is going to be used as a weapon, America needs to have the largest arsenal. But our arsenal, that arsenal of American energy, will not be used to bully other nations, but to set them free," Perry said. The report says loosening regulations could benefit Perry's home state, where Kinder Morgan is seeking to build an $8 billion LNG export facility. Companies need special permission to export gas to most countries. Louisiana already has Cheniere Energy's Sabine Pass facility, which is approved to export even to countries...

Deal struck to replace Midla pipeline serving natural gas to EBR

American Midstream Partners, owner of the Midla natural gas pipeline system that services thousands of Louisiana customers in nine parishes from Ouachita to East Baton Rouge, announced today it has reached a deal to replace the aging pipeline that it sought to abandon last year. The Federal Energy Regulatory Commission helped negotiate the deal between Midla's owners and the municipalities whose residents are served by the pipeline, according to a press release from Sen. Mary Landrieu's office. The agreement for the new pipeline still needs to be signed by all parties involved in the negotiations, Landrieu says. FERC will also have to give final approval to the plan, and American Midstream Partners says it anticipates getting approval by late this year or early next year. The pipeline owners asked FERC last year for permission to abandon the line, citing safety concerns. But Landrieu, chairman of...

Spill claims boss responds to BP's mismanagement charges

Patrick Juneau, the Louisiana claims administrator that BP says is too loose with its oil spill settlement money, has struck back. As FuelFix.com reports, BP last month asked a federal court to remove Juneau from his post as the head of a claims administration office that has paid out more than $4 billion in oil spill damages to Gulf Coast residents and businesses. It says Juneau has misinterpreted its 2012 multibillion-dollar pact with plaintiff attorneys and has let hundreds of millions of dollars slip away to businesses that could not link their financial losses to the oil spill. BP has been fighting legal battles for more than a year over how the money has been paid out. But in a brief filed with the U.S. Supreme Court late last week, Juneau says he's following rules set out in the agreement to the letter. Juneau says two years ago he made doubly sure BP supported his process for determining whether businesses met all of the requirements for establishing their losses were caused...

Record pace of US natural gas output to spur exports to Mexico

Natural gas production expanding at the fastest pace in three years will spur exports to Mexico, according to the U.S. Energy Information Administration. As Bloomberg reports, marketed production will increase 5.4% this year to average 73.98 billion cubic feet a day, representing the biggest volume and percentage gains since 2011, the EIA says in its Short-Term Energy Outlook released today. The forecast was raised from last month's projection of 73.93 billion. The boom in shale drilling at deposits from the Marcellus in the East to the Eagle Ford in Texas will expand natural gas output for the 10th straight year in 2015. The surge in supply is boosting demand for the fuel from Mexico, the Energy Department's statistical arm says. "The strong increases already seen in the Lower 48 states this year will continue," the EIA says in the report. "Growing domestic production is expected to continue to put downward pressure on natural gas imports from Canada and spur exports to Mexico."...

LNG facility to break ground at Port of Greater Baton Rouge next year

Construction on a natural gas liquefaction and fueling facility is set to get underway on roughly 80 acres at the Port of Greater Baton Rouge next year. Houston-based Waller Marine Inc. and Omaha-based Tenaska NG Fuels LLC announced today plans to build the facility, known as Tenaska Bayou LNG, with construction expected to take between 18 months and two years. Commercial operation is expected to begin in the first quarter of 2017. The facility initially will be capable of producing 200,000 gallons of LNG daily, the companies say. According to a conversion table provided by the U.S. Department of Energy, 200,000 gallons of LNG is the energy equivalent of more than 133,000 gallons of gasoline. The plant will also provide compressed natural gas. The companies say the LNG and compressed gas will be a lower-cost and cleaner-burning alternative for high-horsepower marine, transportation, natural gas and oil exploration, as well as production industries throughout the region. "Baton Rouge...

How to kill a renaissance

There wasn't much fanfare at the time, but last April, the regional administrator of the Environmental Protection Agency sent a letter to the Louisiana Department of Environmental Quality advising that after 20 years of effort and untold millions of dollars in investment on the part of companies like ExxonMobil, CF Industries, BASF and Dow Chemical, the five-parish airshed that includes East and West Baton Rouge parishes was at long last in attainment for EPA's ozone standards.

Henry Hub not the king of US natural gas trade it once was

For nearly a quarter-century, traders around the world have looked to a spot in Louisiana for the best price of U.S. natural gas. But now, Reuters reports, they're looking east. The Henry Hub in southern Louisiana—which connects to more than a dozen on- and offshore pipelines from Texas and the Gulf of Mexico—has been surpassed as the most active place for trading physical U.S. natural gas by hubs in shale-rich Pennsylvania. "How important is the Henry Hub as a price proxy for the Eastern U.S.? My thinking is that, before long, it won't be very important at all," says Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas in New York. Only about 240,000 million British thermal units (mmBtu) per day of natural gas have traded in the day-ahead Henry Hub market this year, down 70% from an average of more than 825,000 five years ago, according to IntercontinentalExchange data. The Dominion South hub, a key supply point in the Marcellus shale in...

La. facing second greatest risk from aging pipelines in US

Aging, obsolete natural gas pipes pose a health and safety risk across the nation, and a new analysis shows that risk is greater in Louisiana than in any other state except Texas. The USA Today analysis of federal data shows that leaks in the pipes that carry natural gas to homes and businesses are all too common, occurring somewhere in the nation about once every other day. The least serious of these leaks are safety hazards. The worst of them have killed 135 people and caused billions in property damage. Louisiana has experienced more significant gas leak incidents since 2004 than any other state but Texas. A total of 151 major incidents resulted in three deaths and 12 injuries. Many of the leaks are in old-fashioned pipes made of cast iron or bare steel, many installed before 1970. Federal authorities have been pushing utilities to replace the metal pipes...

Lake Charles: A case study

Leading the nation in new capital investment, Lake Charles has been called the biggest story in economic development today. Combined, Calcasieu and Cameron parishes have less than 200,000 people, and residents are being told to prepare for a boom that could dramatically increase the local population, straining the area's infrastructure while also bringing untold economic benefits.

All over the planet, countries missing emissions targets

When President Obama speaks at the U.N. Climate Summit, The Washington Post reports, he will be able to make a decent case for what the United States has done to help. His administration has tightened fuel efficiency regulations, followed through on mercury rules for existing coal plants, pressed India and China on controlling potent hydrofluorocarbons, and used tax breaks and Energy Department funds under the stimulus act to promote wind and solar energy. He will also boast about a smattering of other new initiatives—including an order that federal agencies factor resilience to climate change into international aid and investments. And he can also highlight the formation of a public-private partnership to figure out how to voluntarily lower the release of methane by natural gas producers. Yet it isn't enough. Not nearly. Worldwide greenhouse gas emissions are still rising, driven by a hunger for energy as economies grow. Even many industrialized countries are going to...

Mexico's interest in US oil could crack open export door

U.S. oil producers anxious to export booming supplies of domestic crude may have another way around a ban in place since 1975, this one via Mexico. As Bloomberg reports, Mexico's state oil company, Petroleos Mexicanos, or Pemex, has expressed interest in importing some of the lighter oil the U.S. has in abundance, swapping it for heavier Mexican oil that U.S. refineries are able to process. If approved by the U.S. Commerce Department, it would be another exemption permitted by President Barack Obama's administration, which this year let two oil producers sell a lightly processed form of crude overseas. The drive to skirt the 39-year-old ban underscores a transformation as new drilling techniques have taken the U.S. from depending on oil imports to producing so much crude that Congress is debating an end to the prohibition. Legislation hasn't advanced, though producers have found ways of circumventing the ban to reach overseas markets. "There is no appetite for lifting the export...

Jindal to release comprehensive energy plan today

Gov. Bobby Jindal will today unveil a comprehensive energy plan during an address in Washington, D.C., to conservative think tank The Heritage Foundation. The Wall Street Journal reports "the proposal includes familiar measures likely to rally Republicans, such as approving the Keystone XL pipeline, as well as a few ideas that haven't been as widely embraced by his party, including a call to lift the ban on American oil exports." By releasing these policy prescriptions before the next White House race officially begins, the newspaper says, Jindal is presenting himself as a candidate well-versed in public policy, noting the governor in April released what many considered to be the first policy paper of the 2016 race

Face-off

In 2008 the U.S. Environmental Protection Agency lowered the acceptable limit for ozone in the air to 75 parts per billion. That standard was weaker than what many of the agency's scientific advisers had recommended. Since then, EPA has been reviewing its ozone rules, but President Barack Obama, reportedly wary of placing new regulatory burdens on industry, has delayed implementation. This year a court ordered the federal government to issue new ozone standards, and the new limit is expected to be between 60 and 70 parts per billion when finalized next year. Business Report asked an industry advocate and environmentalist to spell out their positions on the anticipated standards.

Chevron shuts down pipeline feeding La. hub following accident, worker death

Chevron Pipe Line Co. has shut down a natural-gas pipeline that feeds Gulf of Mexico production to the Henry Hub storage and delivery point in Louisiana in the wake of a deadly accident over the weekend. The Wall Street Journal reports a contract worker performing routine maintenance on an offshore gas pipeline was killed Saturday and two other workers were injured, citing company statements. The accident occurred six miles south of Timbalier Bay off the southeast coast of Louisiana, according to the U.S. Coast Guard. Chevron declined to identify the workers and offered no details about what happened offshore, but says the company has launched an investigation. The gas-handling line had a valve failure Saturday around 11:10 a.m., says Gregory Langley, a spokesman for the Louisiana Department of Environmental Quality. There has been no sheen on the water since the incident began, he adds. Gas flows through the pipeline have been halted until the investigation and repairs can be...

Feds OK groundbreaking on Sempra Energy LNG project in La.

The Energy Department today handed critical government licenses to the Cameron LNG project in southwestern Louisiana, giving it final authorization to liquefy natural gas and ship it around the globe. FuelFix.com reports that with the government's move, Sempra Energy can launch construction on its $10 billion Cameron LNG project, planned as an addition to an existing import terminal in Hackberry. Today's action came in the form of the Department of Energy finalizing Cameron LNG's existing conditional license to export up to 1.7 billion cubic feet of natural gas per day to Taiwan, Japan and other countries that do not have free-trade agreements with the United States. Cameron LNG secured a separate required approval from the Federal Energy Regulatory Commission in June. Only one other would-be LNG exporter in the continental United States has been fully authorized to ship to non-FTA countries: Cheniere Energy's Sabine Pass project, which is nearing completion in Cameron Parish after...

Keeping the faith with LSU alums

In the natural gas pipeline business, things occasionally go wrong. A bad day is when a catastrophic failure of the asset you're relying on to make money results in an explosion and fire.

Making a billion-dollar wager

There is an argument in philosophy known as Pascal's Wager. In essence, the argument is that if you find yourself forced to make a choice between two opposite and unknowable propositions, choose the one with the most upside potential.

Final investment decision announced on Cameron LNG project

Japanese partners in the Cameron natural gas liquefaction and export project in Hackberry announced Wednesday they have formally decided to go ahead with the $10 billion project that will send 8 million tons of natural gas to Japan annually from southwest Louisiana starting in 2018. The project entity has signed financing agreements amounting to $7.4 billion with the Japan Bank for International Cooperation and commercial banks to develop and operate liquefaction facilities with an export capability of 12 million tons per year at the site of the terminal. CB&I will be a joint venture contractor working on construction of the plant. Cameron, Sabine Pass and more than two dozen other projects are in a race to sell relatively cheap, abundant U.S. shale gas to foreign countries where it can fetch higher prices. But just because Asian demand for natural gas is rising doesn't mean every project to serve the demand will go forward, The Wall Street Journal reports. Japan's demand for...

In Conversation: Chris John

The oil and gas industry mostly got what it wanted during the last legislative session. But it continues to be criticized for damaging the coast, accepting tax breaks, fracking and other issues. Against that backdrop, the Louisiana Mid-Continent Oil and Gas Association in July released its latest report about the economic value of the energy sector, which says the industry supported nearly 300,000 jobs and $73.8 billion in sales in 2011 and contributed $4.2 billion to state and local treasuries in fiscal year 2013. The Grow Louisiana Coalition, established to promote the industry statewide, now can take those numbers on the road. Business Report spoke with LMOGA President Chris John the day the study was released.

La. lawmakers call for funds to finance oil-spill restoration

Louisiana lawmakers say federal agencies have been too slow to act on a law that steers money to Gulf Coast states to help them recover from the 2010 Deepwater Horizon oil spill. "Louisiana is ready to go," Sen. Mary Landrieu testified at a Senate Commerce, Science and Transportation subcommittee hearing on the status of restoration efforts under the 2012 RESTORE Act. "We don't want to delay or wait any longer." As The Advertiser reports, Congress passed the act two years after the spill killed 11 workers, polluted the Gulf Coast's ecosystem and devastated its economy. The region is still waiting on billions of dollars in fines and other payments from BP. Under the law, the five Gulf Coast states will finance restoration efforts using 80% of the spill-related fine money to be paid by BP. Lawmakers estimate the fines could range from $5 billion to $20 billion. The amount of the fines will be determined by an ongoing lawsuit under the Clean Water Act. Republican Sen. David...

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...