Henry A. Waxman (D Ca.), Chairman of the Energy and Commerce Committee, and Edward J. Markey (D. Mass.), Chairman of the Energy and Environment Subcommittee, released a discussion draft of The American Clean Energy and Security Act of 2009. Among other things, the Act seeks to encourage the development of renewable energy sources and carbon capture and storage technologies. Both a copy of the draft and a summary can be found here.
Legislation has been introduced into the Ohio House of Representatives that would create an oil and gas leasing board having exclusive authority to lease state lands for oil and natural gas development. A copy can be found here.
This report from the NYT discusses the continued investment in oil shale development despite opposition from the Obama Administration. To quote the Vice President for Energy and the Environment at Red Leaf Resources: "There are no silver bullets. We can economically and environmentally produce a number of resources, and oil shale can be a part of that going forward."
U.S. EPA has announced that it is extending the deadline for compliance with recent, substantial amendments to the SPCC Rule until January 14, 2010. EPA will also be asking for comment on whether a further extension of the rule may be warranted for some regulated entities.
The Maryland Public Service Commission has directed several of the state's local natural gas distribution companies to purchase a significant share of their summer injection needs immediately to take advantage of low natural gas prices and protect against future price volatility. A copy of the order to Columbia Gas of Maryland, Inc., and others, for example, can be found here.
[Update: The Maryland PSC has rescinded its earlier orders following an emergency hearing at which LDCs explained that due to a run up in natural gas prices they would not be able to meet the prices set by the PSC. Still, the PSC found that its prior reasoning for directing summer gas injection purchases remained valid, and issued redacted orders appearing to direct the LDCs to procure unstated volumes at unstated prices. (Moved up.)]
This is interesting - There are some NY legislators opposed to a new 5% production tax proposed by Governor Paterson, according to this report from the Long Island Exchange.
This should come as no surprise - Concerns are increasing that reduced investment and low prices may result in lower production and future price shock when the economy picks up, according this article in the NYT. The article discusses a new study by Cambridge Energy Research Associates (CERA) scheduled for release today.
The Colorado legislature has given final approval to controversial new oil and gas drilling regulations, according to this report from the Denver Post. If signed into law by the Governor, they would go into effect next month.
Some Democrats in Congress have warned the Obama Administration that newly proposed fees and taxes on the oil and gas industry could lead to a decrease in domestic production and higher consumer prices, according to this article in the Houston Chronicle.
The PA House Republican Energy Task Force unveiled their Energize PA plan to expand natural gas drilling on state forest lands over the next three years. This is in contrast to the new severance tax proposed by the PA Governor in February. More details can be found here (a press release from PA Rep. Reed's office).
This NYT article takes a look at the impact of increases in liquefied natural gas imports and declining demand on natural gas prices and U.S. production.
Red Adair was famous in the industry for fighting oil fires. He can be heard in an interview on Voices of America radio here. Very cool.
The West Virginia Department of Environmental Protection has released a draft guidance document on appropriate water use and disposal when drilling in the Marcellus Shale. Comments are due April 17, 2009. A copy can be found here, at the Department's website.
Last month, an SMU researcher issued a report concluding that natural gas production in the Barnett Shale released significant volumes of volatile organic compounds. Last week, the Barnett Shale Energy Education Council released a counter-study concluding that natural gas drilling in the Shale released far less air pollution than the SMU estimate, according to this report from the Star Telegram.
The nation's largest independent refiner, Valero Energy, has agreed to buy seven ethanol plants from VeraSun Energy, according to this NYT report. The price tag - $477 million.
This article from the NYT notes the tensions created by President Obama's goals of obtaining sufficient, diverse sources of energy supply for the country while reducing fossil fuel consumption and curbing carbon emissions. As the president of the National Petrochemical and Refiners Association put it, "[T]he new administration 'looks at the oil and refining industry as a piggy bank to fund other energy programs.'”
API officials are meeting with the new Interior Secretary, Ken Salazar, this week to discuss the Administration's proposals to impose new fees and eliminate tax incentives for American energy producers, according to this report from the Houston Chronicle. Among other things, at issue are plans to repeal deductions for intangible drilling costs, prevent oil and natural gas companies from claiming domestic manufacturing deductions and a repeal the percentage depletion for wells.
[Update: The Fort Worth Business Press is reporting that the Natural Gas Council has sent a letter to Congress pointing out the effect of the new Administration's tax proposals on the production industry and, ultimately, prices to the consumer. A similar letter from IPAA can be found here. (Moved up)]
The Interior Department's Inspector General has stated in written testimony to the Energy and Mineral Resources Subcommittee that oil and gas companies holding federal leases "have little obligation to actually produce," according to this report from the NYT. This has prompted the Administration to consider imposing new fees on non-producing Gulf of Mexico leases as part of the Democrats "use it or lose it strategy" for encouraging use of federal leases.
Environmental groups are urging Pennsylvania to adopt a state severance tax, according to this report from the Pittsburgh Post-Gazette. This would be in addition to other fees imposed on producers in the state.
Some natural gas customers are complaining about the contracts they entered into now that gas prices have declined, according to this report from the Columbus Dispatch.
Controversial new rules for drilling in Colorado passed an informal vote in the state House of Representatives, according to this report from the Denver Post. The legislation still needs a formal, recorded vote before moving to the state Senate.
From the NYT - Falling energy prices are leading oil and gas producers to decrease their drilling programs. Of course, "That means a glut could rapidly turn to scarcity, sending energy prices soaring again."
Cabot Oil and Gas Company has been charged with violations of Pennsylvania water law in connection with drilling certain natural gas wells in Susquehanna County, according to this report from News Channel 34. A more detailed report can be found here from the Wayne Independent.
While power use could increase more than 20% over the next two decades, companies are reconsidering new coal-fired power plant construction over uncertainty regarding greenhouse gas regulation, according to this USA Today report.
Legislation has been proposed in Kentucky to authorize the leasing of state lands for oil and gas development, according to this report from the Lexington Herald-Leader.
Oklahoma's Attorney General is investigating whether Canadian oil imports are being used to drive down Oklahoma oil prices, according to this report from MSNBC.
An article from U.S. News and World Report argues that we need to be careful to avoid simply replacing our dependence on foreign oil with a dependence on foreign natural gas. This is particularly true where major foreign producers might be tempted to use that dependence as a political weapon, like Russia did only recently to the Ukraine.
Today the U.S. EPA proposed a rule that would require approximately 13,000 large source facilities to annually report their greenhouse gas emissions. The facilities covered include fossil fuel suppliers, industrial chemical suppliers, motor vehicle and engine manufactures and large direct GHG emitters (defined as facilities that emit 25,000 metric tons or more of GHG emissions). The proposed rule will soon be published in the Federal Register; a pre-publication copy can be found here.
In USA Today: Cutbacks in drilling projects and capital investments are likely to lead to future crude oil price increases faster than many analysts expect. This follows a potential 9% decline in daily crude oil production in 5 years if current trends persist. An interesting article.
On February 26, 2009, President Obama proposed to increase U.S. EPA's budget nearly 30% ($3 billion) to $10.5 billion. One highlight of the budget initiative is "strengthening EPA's core research, enforcement and regulatory capabilities." The proposal also includes reinstatement of the Superfund excise tax which would collect over $1 billion annually to fund contaminated site clean ups.
A new study released by Informa Economics finds that it is impossible to assign a cause to the increased volatility experienced by commodity markets over the past several years. "Perhaps increased participation by these groups [e.g., index traders and money managers] resulted in increased volatility. Alternatively, higher volatility may have attracted money from these groups into these markets." A copy of the study can be found here.
Interestingly, it notes that natural gas and crude oil markets showed much less evidence of increased volatility than grain contracts.
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