The US Energy Information Administration projects that the nation’s unconventional oil and gas production will reach record levels in November. There are indications that inflation could limit growth moving forward.

According to the EIA’s monthly Drilling Productivity Report, shale oil production should surpass 9 million barrels per day in October. It will increase to 9.1 million bpd in November. Shale gas production is anticipated to increase to 94.5 billion cubic feet per day this month.

U.S. dry natural gas production in 2021 was about 34.5 trillion cubic feet (Tcf). It is an average of about 94.6 billion cubic feet per day and the highest annual amount recorded. Most of the production increases since 2005 are the result of horizontal drilling and hydraulic fracturing techniques. Notably in shale, sandstone, carbonate, and other tight geologic formations. Natural gas is produced from onshore and offshore natural gas and oil wells and from coal beds. In 2021, U.S. dry natural gas production was about 13% greater than U.S. total natural gas consumption.

U.S. dry natural gas production in 2021 was about 1 Tcf greater than in 2020. This is as the natural gas drilling industry recovered from the effects of the COVID-19 pandemic and encouraged by increases in demand, especially for exports, and by higher prices for natural gas.

Five of the 34 natural gas-producing states accounted for about 70% of total U.S. dry natural gas production in 2021. 09178789739

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Source: Upstream

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Exxon Mobil Corp. is considering a takeover of Plano-based Denbury Incorporated. They are an oil and gas producer with the largest carbon dioxide pipeline network in the U.S. This is according to people familiar with the matter.

Irving-based Exxon has expressed preliminary interest in the company. They are asking not to be identified because the matter isn’t public. They are adding that no final decision has been made. With that Exxon could opt against proceeding with a potential deal.

If a takeover happens, it would be the biggest carbon-management investment since the Inflation Reduction Act was passed in August. It will be providing large tax incentives for burying carbon dioxide. The legislation increased tax credits for carbon capture 70% to $85 a ton.

Executives including Exxon CEO Darren Woods have praised the act. Is is bringing financial support for carbon capture. Morgan Stanley says could be highly profitable in the future.

Shares of Denbury jumped as much as 12% and traded at $98.83 in New York Monday afternoon, giving the company a market value of about $4.9 billion. A Denbury representative declined to comment, while an Exxon representative didn’t immediately respond to a request for comment.

Carbon capture is the bedrock of Exxon’s climate strategy, which aims to eliminate the oil giant’s operational emissions by 2050. Denbury’s 1,300 miles of pipelines in the Gulf Coast and the Rocky Mountains dedicated to transporting carbon dioxide would give Exxon critical and hard-to-replicate infrastructure that will be essential if its carbon capture push is to be a success.

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Source: The Dallas Morning News

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The U.S. Interior Department took initial steps on Thursday toward holding oil and gas drilling auctions in New Mexico, Wyoming, and the Gulf of Mexico in the coming months.

Terms of the onshore sales will reflect new requirements under President Joe Biden’s new climate change and drug pricing law the Inflation Reduction Act (IRA), including higher royalty rates, minimum bids, and rents, Interior said.

Interior’s Bureau of Land Management said it was seeking public input for 30 days on a plan to offer 251,086 acres in Wyoming and 10,124 acres in New Mexico to oil and gas companies.

The IRA, which Biden signed into law in August, contains nearly $370 billion for climate change and clean energy initiatives such as incentives for solar and wind power. But it also contains protections for the powerful oil and gas sector.

Biden vowed during his 2020 election campaign to end federal oil and gas drilling to fight climate change, but faced pressure to increase fuel production in the face of soaring prices.

Interior said it would evaluate potential sale parcels in other states in the coming weeks.

Separately, the Interior’s Bureau of Ocean Energy Management released a draft environmental review for two Gulf of Mexico drilling auctions that are required to be held next year.

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Source: Reuters

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Oil demand in the US soared during the summer, even as higher pump prices forced many Americans to cut back on driving.

Overall petroleum supplied, a proxy for demand, posted its best July since 2019, according to government data released Friday. June was even stronger, with demand for the month at a 16-year high. The boost came despite a marked drop in gasoline consumption, which fell 6% from a year ago and double June’s decline.

The shocks of high gasoline costs are ricocheting through the economy, and industry analysts see little relief on the horizon. Crude oil, the natural resource used to produce gasoline and diesel fuel, has seen dramatic changes to its supply throughout the pandemic.

The onset of the pandemic led to an initial drop in prices for petroleum-based products, and then, just as abruptly, prices rose sharply

Demand has started to fall by single-digit percentage points in parts of the country where gasoline prices have hit the highest. As petrol prices continue to break records in the United States, putting a significant strain on Americans‘ wallets and threatening economy.

Oil and gas will continue to remain a significant part of oil-producing countries’ energy mix. The need for energy grows every year. With that, this will ensure global energy security in line with the green shift in mind as experts say.

The UAE was seeing record growth in renewables. This is what Sultan Al Jaber said. He is the United Arab Emirates’ special envoy for climate change and minister of industry and advanced technology

But while wind and solar accounted for most of the new power generation capacity last year, he said this still only comprises 4 percent of today’s energy mix.

“A successful energy transition must progress with economic and climate action in tandem. As part of this, we know we must do more now to reduce the impact of oil and gas on the climate,” he said.

In its monthly oil market report published on Sept 13, the Organization of the Petroleum Exporting Countries reported that world oil demand growth in 2022 remained unchanged from the previous month’s assessment “at a healthy level of 3.1 million barrels per day”.

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Source: Hellenic Shipping News

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