General News
Industry Fears Shutdown Will Hurt Production. According to E&E News, “The oil industry is
watching the federal government shutdown with a sense of unease. The lapse in funding hasn’t yet widely affected production on federal land, and the Interior Department has continued to issue drilling permits and hold auctions for oil and gas acreage on federal
land, angering environmentalists. But the impasse has already gone on longer than any other in the modern era, and Congress and the Trump administration have yet to resolve the conflict over a border wall that derailed the budget in December. Trade groups
and state regulators say that a continued shutdown could start to cut into production if the federal government is unable to handle basic functions for a couple of months. A significant drop in production, if it happens, could cut into profits for oil companies
and tax revenue for state governments. ‘If this drags on for months, we will definitely have a situation where permits will not be available to keep rigs running,’ Kathleen Sgamma, president of the Western Energy Alliance, said in an interview Friday.” [E&E
News,
1/22/19 (=)]
Oil Majors Join Talks Over 'Big' LNG Project. According E&E News, “Top Alaska officials
have begun talks with the state’s three major oil companies in hopes of renewing their joint venture to build a multibillion-dollar natural gas pipeline and export project. Alaska Department of Revenue Commissioner Bruce Tangeman said the state is reconnecting
with BP Alaska, ConocoPhillips Alaska Inc. and Exxon Mobil Corp. to determine if they’re again willing to take a significant role in building the ambitious Alaska liquefied natural gas project. ‘We’ll be talking with them to see what is the [economic] climate
now: Is there an appetite to re-engage and see if we can move forward as a partnership again?’ Tangeman explained last week at the annual Alaska Support Industry Alliance conference in Anchorage. He said the Alaska Gasline Development Corp. (AGDC), the state
agency in charge of the gas line project, is also doing a stage-gate analysis of the project’s status, scrapping the deadline-driven approach that has been in place for the last two years. Under former Gov. Bill Walker (I), the gas line agency intended to
begin construction of the LNG export project late this year. But Tangeman indicated that current Gov. Mike Dunleavy (R) doesn’t plan to make a final investment decision on the project in the next year.” [E&E News,
1/22/19 (=)]
Oil Steadies Near 2-Month High As U.S. Drilling Slows. According to E&E News, “Oil steadied
near a two-month high in New York amid a pullback in U.S. drilling activity, while ongoing U.S.-China trade talks left an uncertain outlook for demand. Futures rose 0.3 percent after surging 3.3 percent on Friday. The number of rigs drilling for oil in the
U.S. fell to the lowest since May, according to Baker Hughes data. China and America, the world’s biggest oil consumers, have made little progress in talks on intellectual property, a major sticking point as they pursue a deal to end a tariff battle, according
to people familiar with the discussions. ‘The price volatility seen over the latter part of last year certainly appears to have made producers hesitant to pick up drilling activity,’ said Warren Patterson, senior commodities strategist at ING Bank NV. Oil
is off to its best start to a year since 2001 after plunging almost 40 percent last quarter on fears of a global supply glut and weaker consumption. To counter those worries, OPEC and its partners have started to cut production to balance the market while
the International Energy Agency expects relatively strong demand this year. Still, concerns persist after China’s economy expanded at the slowest annual pace since 1990.” [E&E News,
1/22/19 (=)]
High Levels Of Methane Threaten Plan To Move Cumberland Garage. According to the Portland
Press-Herald, “High levels of methane gas at a closed-out demolition landfill near the town of Cumberland’s Public Works garage could lead the town to scrap plans to move the garage, and prevent additional housing from being built in the area. Town Manager
Bill Shane reported the situation last Monday to the Town Council, which unanimously endorsed moving a fleet of 26 school buses from the garage to a facility in neighboring North Yarmouth. The council also unanimously dropped Skillin Road as a potential site
for a new Public Works garage. Part of the landfill closure required the town to install a set of monitored gas vents around the property. Shane said methane levels in recent months were recently as high as 9.5 percent on top of the landfill, creeping up to
16.4 percent closer to the property line of homes along Wyman Way.” [Portland Press-Herald,
1/20/19 (=)]
Chad Ellwood
Research Associate
202.448.2877 ext. 119