Published on:

By

A new Texas oil pipeline started shipping condensates from Eagle Ford in May 2013. The new pipeline is owned by Double Eagle Pipeline LLC, a 50-50 joint venture between Magellan Midstream Partners and Kinder Morgan Energy Partners (KMEP). The condensates are coming from Karnes County and Live Oak County in Texas and are being transported via KMEP’s already existing 50 mile pipeline from Three Rivers, where Double Eagle’s new unloading and storage facility is also in operation, and from there to Magellan’s Corpus Christi terminal

Construction is expected to be completed on the new Double Eagle 140 mile long western leg of the pipeline, from Gardendale in LaSalle County to Three Rivers, within the next few months. The expected capacity is 100,000 b/d with a possible maximum of 150,000 with additional pumps. The project costs $150 million, to be shared equally between KMEP and Magellan. Magellan Chairman and Chief Executive Officer Mike Mears said that shipper interest in the Double Eagle pipeline has increased as completion on the new pipeline gets closer. In preparation for these expansions, Magellan improved the terminal at Corpus Christi, including construction of new 50,000 barrel condensate storage and a new dock delivery pipeline.

This is just the latest news in pipeline construction and expansion in Texas, particularly in this oil rich area of southern Texas. Last month, Plains All American Pipeline LP announced it is building a 310 mile Cactus Pipeline from McCarney in Upton County to Gardendale. The estimated cost will be $350-$375 million. The Cactus Pipeline is expected to be functional in 2015 and will have a capacity of 220,000 b/d of sweet and sour crude oil from the Permian Basin. It will connect with the Plains All American-Enterprise Products Partners Eagle Ford Joint Venture Pipeline, which serves Three Rivers and Corpus Christi as well as the Houston area through the Enterprise South Texas Crude Oil Pipeline. This will displace foreign imports of sour crude oil into the Gulf.

Continue reading →
Published on:

By

In April 2013. representatives in the US House of Representatives announced that bipartisan legislation would be introduced in 2014 to take out corn based ethanol requirements in the federal Renewable Fuel Standard

The bill is called the Renewable Fuel Standard Reform Act. Those involved in the oil and gas industry know that the standards involving ethanol can effect the market by conferring an artificial advantage for the so called “renewable” fuels over oil and gas.

The current Renewable Fuel Standard requires 36 billion gallons of renewable fuels to be included in the domestic fuel supply by 2022, and almost all of that is from corn-based ethanol. This requirement uses a massive percentage of America’s corn supply and diverts it to fuel. In 2011, 40% of the nation’s corn went to making ethanol, which is about five billion bushels of corn. Because so much of the corn crop is used for ethanol, there is less for food and for livestock feed. The end result is a substantial increase in the price of corn and everything that has corn as an ingredient, hurting consumers and many small businesses. In addition, ethanol in fuel wrecks havoc on everything from car engines, to lawnmowers to chainsaws. No one has bothered yet to assign a cost for these damages to consumers.

Continue reading →
Published on:

By

A disagreement between groups of states is threatening to spill into a lawsuit over methane emissions regulations. Several northeastern states, including Connecticut, Delaware, Maryland, Massachusetts, New York, Rhode Island and Vermont, are threatening to sue the Environmental Protection Agency (EPA) under the Clean Air Act, trying to force the EPA to reconsider its decision not to impose regulations on methane emissions for oil and natural gas drilling, production and processing facilities.

In response to that threat, Oklahoma Attorney General E. Scott Pruitt wrote a letter to the EPA, joined by Alabama, Arizona, Indiana, Kansas, Montana, Nebraska, North Dakota, Ohio, South Dakota, Texas, West Virginia and Wyoming, calling on the EPA to resist this attempt to force a reconsideration of the methane emissions issue.

Attorney General Pruitt’s letter noted that the New Source Performance Standards (NSPS), pursuant to the Clean Air Act, may be reviewed and revised every eight years and that in the most recent review, the EPA did not chose to regulate the methane emissions at issue here. The EPA decided to review state standards instead. In their attempt to change the EPA’s decision, the northeastern states put forth several arguments, each of which the Attorney General countered in his well reasoned letter.

Continue reading →
Published on:

By

As many of you are already aware, oil and gas pipelines in Texas and in the United States are being constructed at a record pace. Oil and gas pipeline construction is expected to be up by 73% in 2013. The Pipeline & Gas Journal recently reported that 116,837 miles of pipeline are planned this year worldwide, and almost 42,000 miles of new pipeline are planned for North America alone. Part of the increase in construction is due to shale oil and gas plays, that have resulted in increased production of both oil and natural gas.

I am honored to have been asked to present a telephone conference regarding the basics of oil and gas pipeline negotiation on October 3, 2013. It is basically my version of “Texas Oil & Gas Pipelines 101”. I’m looking forward to it and it should be fun. If you have any interest in attending, you can sign up at the National Business Institute CLE page for this telephone conference, which you can access here.

if you are an attorney, you can get CLE credit for the seminar. However, if you are a landowner faced with a request for a pipeline easement, you may find this informative as well.

Published on:

By

Another recent study, this one by the American Petroleum Institute (API), a national association that represents the oil and gas industry, has shown how drilling and spending on shale oil and gas boomed in 2011. This report stated that 10,731 shale oil and natural gas wells were drilled and $65.5 billion was expended in that year alone. Just a few years ago, in 2009, there were only 5,531 such wells and 7,077 shale wells. Almost twice as many shale gas wells were drilled in 2011 as the year before, with 6,759 drilled in 2011 compared to 3,414 in 2010.

This is great news for the American oil and industry, especially for those states like Texas rich in shale oil and gas. The number of wells drilled was up 43.8 percent from 2010, and drilling expenditures were up 87.6 percent in the same time frame. Shale gas drilling expenditures accounted for more than half of all drilling expenses in 2011, up from only one-fourth in 2009. Shale wells now account for almost a quarter of all wells drilled in the US–API’s Statistics Director Hazem Arafa estimates it at 23%.

Meanwhile, offshore drilling declined in the past years, in large part due to the moratorium after the Deepwater Horizon incident, but picked up again in 2011, with expenditures rising to $8.1 billion. That is still very little compared to the 2009 expenditures of $24.9 billion, but is more than double the 2010 figure of only $4 billion. Overall, all types of wells drilled totaled 44,160 with an expenditure of $124,794,493,000 in 2011, showing the health of the entire industry which supports 9.2 million US jobs and produces $85 million a day in government revenue. This industry represents 7.7% of the US’s total economy and has invested over $2 trillion in the US since 2000, investing in all kinds of energy solutions.

Continue reading →
Published on:

By

The US House of Representatives Natural Resources Committee has held at least five meetings in the last two years on the problem of federal oil and gas regulations overlapping with existing state regulations. The Committee’s chairman, Representative Doc Hastings, had a common sense solution to this confusion: “There is a simple solution to prevent duplication: Don’t duplicate the states. The ‘one size fits all’ regulatory structure being pursued by the Obama administration is a waste of time and energy.” This issue is particularly significant in light of the increase in hydraulic fracturing, a process that has become increasingly politicized at the national level.

That is exactly the message of three of the witnesses at the Committee’s latest meeting. These three witnesses, all state officials, agreed that states are in a unique position to understand the geological and environmental conditions and issues within their states. The states represented by these three witnesses were Utah, Texas, and Ohio.

1209912_missouri_capital.jpgUtah’s Lieutenant Governor Gregory Bell told the Committee: “From Utah’s perspective, increasingly national political considerations are unduly influencing land use decisions that are more effectively addressed locally.” He went on to assert that “political jockeying” in Washington within national policy debates hurts local communities, who are better placed to decide what is best for their land. He pointed to the sequester cuts to mineral lease royalty payments, which confuses what royalties are supposed to be- they should be dedicated revenues held in trust, not subject to federal spending rules.

Continue reading →
Published on:

By

Due to increasingly onerous regulations, oil and gas industry associations have filed suit in federal court over the Environmental Protection Agency’s (EPA) planned regulation of greenhouse gases from power plants and vehicles. The regulations come from a 2009 EPA finding that greenhouse gases pose a public health threat- the so-called “endangerment finding”.

Last year, a three judge panel at the District of Columbia’s Circuit Court of Appeals upheld the EPA regulations. That same court denied the energy industry Petitioners a rehearing in December, so the Petitioners recently asked the US Supreme Court to review the regulations at issue.

The Petitioners’ request explains that the regulations are hurting the economy, that there are clear legal issues that need to be adequately addressed, and that the need for review was particularly acute in light of two articulate dissenting opinions at the Court of Appeals, one by Judge Brett Kavanaugh and one by Judge Janice Rogers Brown.

Continue reading →
Published on:

By

Good news for Texas mineral owners and the Texas oil and gas industry in the form of more investment in our shale resources! An new oil and gas company out of Fort Worth, Texas, Titan River Energy, has announced they will use $100 million from a capital commitment to drill and develop in Texas’s oil shales. Titan River gets its name, according to Charles “Chip” Simmons Jr., Titan River chief executive officer, from the largest of Saturn’s moons, “the only place other than Earth where we’ve discovered [liquid] hydrocarbons.” Mr. Simmons said, “One of the things that differentiates Titan River is we’ve got all the capability to not only pursue land acquisitions but also geologic assessments, drilling, completion and operations.”

161276_oil_drilling_rig_4.jpgThe $100 million for this new investment was provided by Ridgemont Equity Partners of North Carolina and Post Oak Energy Capital of Houston. Titan River will also invest an undisclosed amount in the project. Titan River has already leased 2,500 square feet of office space in downtown Fort Worth for a corporate headquarters and another office in The Woodlands.

Titan River has most recently focused on Eagle Ford Shale, but the company is interested in the Wolfcamp Shale as well. The company is looking statewide in Texas for possible production locations. Lee Matthews, the Chief Operating Officer and President of Titan River, hinted they may expand outside Texas. He has said that “We’re not totally limited to Texas, but our preference is to get started in our home state.” Mr. Simmons has been quoted as saying that the focus will be on converting acreage into reserves through drilling joint ventures, farm-ins and leasing opportunities. Mr. Matthews told reporters that starting an upstream operating oil and gas company was a lifelong goal. The management team includes Don Pearce, executive vice president of drilling operations; Kent Bowker, executive vice president of geology; and Brennan Potts, vice president of land and business development.

Continue reading →
Published on:

By

The Environmental Protection Agency’s (EPA) Science Advisory Board, recently announced the creation of a new panel on hydraulic fracturing, generally referred to as “fracing”. The formation of the panel comes as the Obama administration is working to revise draft rules for fracing. With new technologies like fracing leading to historic amounts of oil and gas production for the US, this topic is hotter than ever.

The new panel, called the Hydraulic Fracturing Research Advisory Panel, will be made up of 31 experts (see the list of experts here).Among the 31 are several consultants, two government employees, and 21 academics and college professors. To compose the panel, the EPA asked for nominations of recognized scientists and engineers in the field of hydraulic fracturing, which resulted in 144 candidates. That group was whittled down to 31 through checks for financial and other conflicts of interest. There are at least three experts representing each of the following areas: Petroleum/Natural Gas Engineering; Petroleum/Natural Gas Well Drilling; Hydrology/Hydrogeology; Geology /Geophysics; Groundwater Chemistry/Geochemistry; Toxicology/Biology; Statistics; Civil Engineering; and Waste Water and Drinking Water Treatment. The Chair of the panel is Dr. David A. Dzombak, an environmental engineering professor at Carnegie Mellon University in Pittsburg.

This panel of experts will peer review the EPA’s 2014 draft report on the potential impact of hydraulic fracturing on drinking water. It will also provide scientific feedback on the EPA’s research methods. In particular, the panel is expected to provide information on emerging science and technology for the Science Advisory Board. The report itself is the product of a request by Congress that the EPA commenced in 2010. The draft study plan for the proposed report was submitted in March 2011.

Continue reading →
Published on:

By

The reaction to the death of Venezuelan strongman Hugo Chavez has varied around the world. His antagonism towards the US was well known and vocal. But now that he is gone, the oil and gas industry is curious about what will happen to Petroleos de Venezuela SA (PDVSA), the Venezuelan national oil company, which controls most of the country’s substantial oil and gas resources.

Since Chavez was elected, only two multinational oil companies remained in Venezuela, Chevron and Repsol SA. So the future of PDVSA is crucial not only to Venezuela, but to the world oil market, since Venezuela is a leading oil producing nation.

VEN_orthographic.svg.png Chavez based much of his popularity on handouts during his 14 years in power. A lot of the money he used for these handouts came from Venezuela’s oil wealth, to the detriment of proper management and maintenance at PDVSA. Since Chavez came to power in 1999, PDVSA’s output has declined by 600,000 barrels per day. The refineries are only working at 60% of capacity. The company employed 30,000 workers in 1999, but currently employees only 115,000. PDVSA has had to rely on Chinese financial support, especially since the company is $85 billion in debt, but even the Chinese show signs of weariness at the mismanagement at PDVSA.

Continue reading →