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Oil and Gas Roundup — Sept. 11

September 11, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Meetings set for Okla. residents along Enbridge oil pipeline route

Residents in the path of Enbridge Energy Co.'s crude oil pipeline running through northeastern Oklahoma will get to have their say soon while the Canadian firm plans for construction to start next month.

Public hearings are scheduled in Drumright and Pawhuska next week to discuss the final Oklahoma leg of the Flanagan South pipeline that will travel from terminals near Chicago to the Cushing oil hub. The 36-inch, 600-mile Flanagan South will run Canadian oil sands and northern U.S. crude.

It will run mostly adjacent to the company's existing 22- to 24-inch Spearhead Pipeline. Together the pipelines will have a capacity to transport 775,000 barrels a day of sweet crude from the Bakken formation in Montana and North Dakota and the oil sands of western Canada once complete in mid-2014.

U.S. Pipeline and Westwood Survey were awarded the construction contract that includes Oklahoma and Kansas. Enbridge spokeswoman Katie Lange said that the unions will hire about 40 to 50 percent of the workforce locally. At peak, there could be anywhere from 400 to 700 total workers.

So far, Lange said about 70 to 80 workers will come from the Osage Nation but more will be hired later as work continues.

Read the Tulsa World story:

Continental Resources expects production to increase

Continental Resources Inc. is on pace to meet its goal of tripling production from 2012 to 2017, the Oklahoma City energy company said Tuesday.

Continental executives said the company's 2014 oil and natural gas production is expected to increase 26 to 32 percent from 2013 levels with a capital expenditure budget of $4.05 billion.

“Our 2014 plan year two on the five-year road map is characterized by continued strong production growth, continued capital discipline and continued achievement of key exploration milestones in the Bakken and SCOOP, as we work toward the transition to full field development of these tremendous plays,” CEO Harold Hamm said in a conference call with analysts Tuesday afternoon.

Read the Oklahoman story:

Valero asks Obama administration to waive ethanol mandate

Valero Energy Corp. (VLO), the world’s largest independent refining company, called on the Obama administration to waive the country’s biofuel target immediately, saying the cost to reach it has skyrocketed.

“We need the waiver now,” Valero Chief Executive Officer Bill Klesse, said in a letter to Environmental Protection Agency Administrator Gina McCarthy, dated yesterday. Valero is also the third-largest U.S. ethanol producer, after Archer-Daniels-Midland Co. (ADM) and Poet LLC.

Refiners are required by law to use 13.8 billion gallons of ethanol in 2013. Renewable Identification Numbers are attached to each gallon of ethanol to track compliance. Once the additive is blended into gasoline, refiners can retain the certificate to show compliance or trade it to another party. RINs prices have risen more than eight-fold so far this year.

RINs have increased because of falling gasoline demand and higher biofuel consumption targets, Klesse said in the letter.

Read more:

Oil industry touts $81B in carbon-cutting efforts

The oil and gas industry’s largest trade group on Tuesday touted the sector’s investments in cleaning up greenhouse gas emissions, saying energy companies are doing more than the federal government to rein in the climate pollution.

According to a new study commissioned by the American Petroleum Institute, U.S. oil and natural gas companies spent $81 billion on greenhouse gas technologies from 2000 and 2012. During the same time period, the federal government invested $80 billion in carbon-cutting technology, and $91 billion was spent by all other industries combined.

API President Jack Gerard said the numbers reveal the “often unheralded” work by oil and gas companies to rein in carbon dioxide emissions.

“Between 2000 and 2012, America’s oil and natural gas companies invested more to reduce greenhouse gas emissions than the federal government and almost as much as all other industries combined,” Gerard said.

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Natural gas boom may be America's best antipoverty program

By now even the Obama Administration has recognized that the natural gas drilling boom has led to more high-wage jobs, more secure energy supplies and lower manufacturing costs. But one of the biggest benefits from fracking and other new drilling technologies is often overlooked: the windfall to American consumers, especially the poor.

A new study by the Colorado-based energy broker Mercator Energy quantifies the multibillion-dollar annual savings to American households through lower utility bills from the fall in natural gas prices.

From 2003-08, shortly before the fracking revolution took hold, the price of natural gas averaged about $7.20 per million BTUs. By 2012 after new drilling operations exploded across the U.S. — from West Texas to Pennsylvania to North Dakota — the increase in natural gas production had slashed the price to $2.80 per million BTUs.

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