General
News
Report: 1 In 6 Oil Execs Say Drilling Will Not Recover.
According to E&E News, “The nation’s oil producers think it will take up to two years for oil output to recover in the wake of the coronavirus pandemic, according to a new survey
by the Federal Reserve Bank of Dallas. The survey of 168 energy firms shows that the oil industry remains in a deep slump, even as crude prices have begun to rebound in the last three months. Eighty-two percent of the companies that responded to the survey
said they curtailed their production in the second quarter of the year, and 71% still have some wells shut in. Of the oil producers and service companies that responded, only 3% said drilling activity will recover to pre-pandemic levels by the end of the year,
while 39% said it will take to 2022 or later and 16% — roughly 1 in 6 energy firms — said it will never recover. The Dallas Fed carried out the survey from June 10-18. The coronavirus forced people to stay home and take other precautions, which caused oil
consumption to drop by about 30% worldwide. Prices for U.S. benchmark West Texas Intermediate crude, which were above $60 a barrel at the beginning of the year, plunged below $20 a barrel in April. ‘Times like these are purely about survival and many of our
competitors and customers will not survive without a material change in the energy space, which I don’t expect for several quarters,’ one of the respondents wrote. The results come as other observers including the data firm Rystad Energy predict that oil demand
will begin to decline permanently by the end of the decade. Supermajor oil companies like BP PLC and Royal Dutch Shell PLC anticipate the same thing and are planning to move to more sustainable business (Energywire, June 22).” [E&E News,
6/25/20 (+)]
DEP Holds Virtual Hearings On Emissions Rule.
According to BCTV, “June 24th,2020 was the second day of virtual public hearings on the Department of Environmental Protection’s draft rule for controlling emissions from oil and
natural-gas facilities. Current emission rules only apply to new or modified facilities. The new rule would control emissions of methane and volatile organic compounds from existing oil and gas infrastructure. The Trump administration has been rolling back
federal clean-air regulations on the fossil-fuel industry, including methane-emission rules. Patrice Tomcik, project manager of state campaigns for the group Moms Clean Air Force, said that leaves it up to the states to take the lead in controlling those pollutants.
‘Cutting methane pollution will help reduce the impacts of climate change,’ she said, ‘and cutting volatile organic compounds will improve air quality and public health, which is really important right now.’ The final virtual public hearing begins at 6 p.m.
Thursday. Written comments also can be submitted to DEP through July 27. Tomcik noted that the importance of the new rule is illustrated by a recent report from the Environmental Defense Fund, which showed that methane pollution in the state is far worse than
the oil and gas industry acknowledges. ‘Pennsylvania’s oil and gas methane emissions are 16 times higher than what industry reported to the state,’ she said, ‘and that is a whopping 1.1 million tons of methane pollution per year.’ She said the climate impact
of that methane is double the impact of all tailpipe emissions per year in the state. Tomcik said she would like to see the DEP make the rule even stronger.” [BCTV,
6/24/20 (=)]
Broomfield Plans For Extraction’s Bankruptcy.
According to the Boulder Daily Camera, “Broomfield hired outside counsel in December, to protect its interest and those of residents, in anticipation Extraction Oil & Gas Inc. filing
for bankruptcy. Broomfield will participate in the bankruptcy proceedings, according to a letter the city posted on its website last week. Because of the company’s ‘declining financial situation,’ the city and county’s attorney’s office retained the law firm
of Shapiro Bieging Barber and Ottenson to ‘advise and represent the city in potential bankruptcy proceedings. John Leininger, one of the firm’s partners who has more than 20 years of bankruptcy experience and has worked on oil company bankruptcies, is lead
counsel on this matter, according to the statement. On June 14, Extraction Oil & Gas, Inc. filed for bankruptcy protection to allow it to reorganize under Chapter 11 of the Bankruptcy Code. The Operator Agreement between Broomfield and Extraction remains in
‘full force and effect’ during, and after, the bankruptcy proceedings, according to city officials. Extraction officials say the company’s current plan will leave the company and its existing management operating the company and its assets as debtors in possession
during the reorganization. ‘We do not expect to see any change in Extraction’s operations,’ according to the city’s letter. ‘Extraction has previously advised Broomfield that other than continuing production at the Interchange and Livingston Pads, it does
not have further drilling or fracking operations scheduled in Broomfield in 2020.’” [Boulder Daily Camera,
6/24/20 (=)]
Methane From Manure Offers Green Fuel Revenue For US Farmers.
According to Financial Times, “The rise of industrial-scale livestock farms in the US has put cheap meat on consumers’ plates, but it also has environmental costs. Among them are
emissions of methane. The powerful greenhouse gas forms when wet dung decomposes anaerobically in open slurry pits, a design feature of larger swine and dairy operations. In the US, some farmers and utilities are trying new ways to capture the waste gas and
convert it to fuel. ‘Renewable natural gas’ builds on the established technology of biogas, further refining it for shipment on commercial pipelines. RNG costs more than conventional natural gas, and there is far less supply. Yet it is attracting investment
with the help of subsidies and incentives. In North Carolina, home to 9.2m pigs, the OptimaBio company collects waste gas from custom-built manure digesters on five pig farms. Pipes send the gas to a centralised plant where it can be purified and pressurised
for sale to Duke Energy, a utility. OptimaBio pays the farmers for the fuel. ‘It’s a new agriculture revenue stream for those farmers beyond what they’ve traditionally realised in corn or beans or peanuts or pigs,’ says Mark Maloney, OptimaBio’s chief executive.
Smithfield Foods, the world’s largest pork producer, has since expanded on the concept. The Virginia-based company, a holding of WH Group of Hong Kong, has formed joint ventures to gather, process and sell methane from manure. One joint venture with the utility
Dominion Energy plans to invest $500m in RNG by 2028, starting with projects in North Carolina, Virginia and Utah and exploring others in Arizona and California.” [Financial Times,
6/24/20 (=)]
Chad Ellwood
Senior Research Associate
Climate Action Campaign
202.448.2877 ext. 119