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Europe saved $8 billion on gas bill in 2018 due to LNG, reforms: IEA

Europe Saved $8 Billion on Gas Bill in 2018 Due to LNG, Reforms: IEA

Europe saved $8 billion on its natural gas bill last year because of surging U.S. shale production.

Fatih Birol, speaking as the IEA released its annual gas report, said 2018 was a “golden year” for natural gas. This accounted for 45 percent of total global energy growth, which in turn was the fastest in two decades.

He is saying that the shift in global gas markets is stemming from the U.S. shale gas revolution. It is because of the rapid expansion of the liquefied natural gas industry. Secondly, the EU liberalization of energy markets had forced Russia to change its oil-indexed pricing of gas.

The change began, he said, when rising U.S. gas output led Qatar, the world’s largest LNG exporter, to divert LNG supplies to Europe, shaking up pricing on the continent and widening the influence of the Dutch TTF benchmark price.

“Because of the big challenge from LNG and better regulation, there was a lot of renegotiation of pipeline contracts and we estimate in 2018, Russian pipeline exports to Europe were $8 billion cheaper than they would have been with conventional oil indexation,” he told Reuters.

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Source: Reuters.com

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drilled wells

Horizontally Drilled Wells Dominate U.S. Oil and Gas Production

In 2004, horizontally drilled wells account for roughly 15% of U.S. crude oil production in tight oil formations. By the end of 2018, that percentage had skyrocketed to 96%.

The Horizontally Drilled Wells allows producers to access more of the oil- and natural gas-bearing rock than drilling vertically.

The lateral length of horizontal wells has also increased. It allows for more exposure to oil and natural gas-producing rock from a single well.

Presently, essentially all (99%) hydrocarbon production from the Marcellus has been from horizontal wells.

Drilling horizontally allows producers to access more of the oil- and natural gas-bearing rock. This will increase exposure to additional hydraulic fracturing. It has greater water volumes and pounds of proppant (small, solid particles, usually sand or a manmade granular solid of similar size).

The lateral length of horizontal wells has also increased, allowing for more exposure to oil- and natural gas-producing rock from a single well. Because tight formations have very low permeability, which prevents oil and gas from moving toward the wellbore, using hydraulic fracturing to increase permeability, along with horizontal drilling, is necessary for oil and gas to be produced from these formations economically.

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Source: kallanishenergy.com

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Utica Shale well activity as of June 1

UTICA SHALE WELL ACTIVITY AS OF JUNE 1

DRILLED: 229 (259 as of last week)

DRILLING: 156 (156)

PERMITTED: 489 (492)

PRODUCING: 2,223 (2,186)

TOTAL: 3,097 (3,093)

 

 

 

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Source: Cantonrep.com

Why Are Oil Prices Rising and Should Investors Be Worried?

The Longer-Term Fundamentals

While oil prices rising, investors shouldn’t lose track of the longer-term fundamentals.

At its peak in 2011, 60% of the U.S. total trade deficit was due to petroleum. Last year U.S. oil production rose by 17% to a record high of 10.95 million barrels per day, in turn pushing down net petroleum imports to just 3% of the total trade deficit. With an estimated 39.2 billion barrels of proven crude oil reserves in the U.S., it is likely that the country will soon become entirely self-sufficient and even become a net exporter of oil to the rest of the world.

Reshape the Dynamics

The sheer magnitude of the United States’ proven crude oil reserves underscores the nation’s potential to reshape the dynamics of the global energy landscape. As exploration and drilling technologies continue to advance, these reserves are becoming increasingly accessible and economically viable to extract. This bodes well for the United States’ goal of achieving energy independence, as it reduces reliance on foreign oil imports and strengthens domestic energy security.

Carries Significant Economic and Geopolitical Implications

Moreover, the possibility of the United States transitioning from a net importer to a net exporter of oil carries significant economic and geopolitical implications. As a net exporter, the country would not only reap the economic benefits of increased oil production and exports but also enhance its position as an influential energy player on the global stage. The potential for increased revenue from oil exports can contribute to economic growth, job creation, and reduced trade deficits. Furthermore, the ability to supply oil to the international market could provide the United States with leverage and influence in diplomatic negotiations and geopolitical affairs.

The Potential Environmental and Sustainability Considerations

However, it is important to consider the potential environmental and sustainability considerations associated with increased oil production. While the development of these reserves may provide short-term economic gains, it is essential to prioritize responsible and sustainable extraction practices to minimize adverse environmental impacts. Striking a balance between economic growth, energy security, and environmental stewardship will be crucial as the United States navigates its path towards self-sufficiency and potential oil exportation.

In Conclusion

The United States’ significant proven crude oil reserves offer a promising outlook for the nation’s energy future. The potential for achieving energy self-sufficiency and becoming a net exporter of oil presents numerous economic opportunities and geopolitical advantages. However, it is imperative that these developments are accompanied by responsible and sustainable extraction practices to mitigate environmental concerns. By striking a balance between economic growth and environmental stewardship, the United States can harness the full potential of its oil reserves while ensuring a sustainable energy future for generations to come.

 

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Source: ETF Trends

 

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This Natural Gas Stock Now Has Everything in Place to Succeed

Antero Resources (NYSE:AR) is sitting on a potential gold mine of liquids-rich natural gas stock. In the Marcellus and Utica shale region.

CEO Paul Rady; pointed out that “we began shipping volumes for the first time in February. Through our commitment on the Mariner East 2 pipeline”. Which is use by Energy Transfer and moves NGLs from processing facilities. In the Marcellus region to Philadelphia, where Energy Transfer’s Marcus Hook Terminal can export them to the global markets.

“We have 50,000 barrels a day of propane and butane capacity contracted on the pipeline, which equates to about one-third of the available capacity on ME2 today. As the largest shipper on ME2 and with approximately 50% of our NGL production being put up for sale into premium international markets today.

“boosted cash flow by approximately $20 million during the first quarter.” That number should improve as the company ramps up its exports. Antero only exported 29% of its volumes during the quarter but expected that number to reach 50% once it hits full stride.

 

 

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Source: The Motley Fool

 

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DRILLING REPORT

DRILLING REPORT: May 23 through May 29

Permit applications approved by the Texas Railroad Commission for May 23 through May 29 for Districts 7C, 8, and 8A. Numbers in parentheses indicate the number of permits approved for that leasehold. This is the latest drilling report.

  • Anadarko E&P Onshore, LLC, Longhorn 55-1-30 Unit, Loving, new drill.
  • Apache Corporation, Lumbee, Reeves, new drill.
  • APC Water Holdings 1, LLC, APC 54-1-6, Loving, new drill (3); APC 54-1-18, Loving, new drill.
  • BHP Billiton Petroleum (TxLa Op.) Co., Laverne 58-T2-12×1 SA, Reeves, new drill; State Hedblom 56-T3-24, Reeves, new drill (3); TBD 57-T1-41×32, Reeves, new drill.
  • Blackbeard Operating, LLC, 6 Pounder SE, Crane, new drill; Blackbeard Operating LLC, Sealy Smith Foundation A, Winkler, new drill (2).
  • Boaz Energy II Operating, LLC, Mabee, Terry, new drill.
  • Bold Operating, LLC, TSRH West 19-20 C, Reagan, new drill.
  • Capitan Energy Incorporated, Mother Fee 28, Culberson, new drill.
  • Carrizo Permian, LLC, Dorothy Unit 38, Reeves, new drill (3).
  • Centennial Resource Production, LLC, War Eagle B Unit, Reeves, new drill.
  • COG Operating, LLC, Spanish Trail 3-10 HZ Unit, Midland, new drill; Rudd Draw 26-21, Loving, new drill.

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Source: oaoa.com

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Upgrade and expand the pipelines so Texas can reap the energy rewards

Domestic Energy Golden Age

From wind and solar to oil and natural gas, the American energy sector is booming. The Permian Basin — with record crude-setting production and massive recoverable resources — is at the forefront of this domestic energy golden age.

Upgrade and Expand the Pipelines

The Permian Basin, sprawling more than 75,000 square miles across West Texas and New Mexico, has more than doubled its production in recent years. Recently called “America’s Hottest Oil Field,” the Permian accounts for around a third of American crude output today. And there’s no sign of it slowing any time soon, with major oil companies like Chevron and Occidental pouring billions in new investment into the region in hopes of expanding their operations.

Upgrade and Expand the Pipelines so Texas can reap the energy

The momentum across the Permian is a boon for the region’s economy, creating jobs and opportunity at a breakneck pace. It’s also good news for the rest of the nation’s energy outlook, helping us meet more of our own energy demands while exporting energy to our allies and trading partners.

Better pipeline infrastructure would also help put an end to one of the most tragically ironic dynamics at play in today’s American energy heyday: reliance on fuel imported from unfriendly regimes.

The dynamics that have led to this pipeline backlog – political and otherwise – must be addressed if we’re to meet our full energy potential.

 

 

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Source: Caller.com

 

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Affordable Natural Gas

Affordable Natural Gas and Bettering Low-Income Americans’ Lives

“Fracking saves low-income Americans’ lives”… This article is about research earlier this year. This is a calculation that lowers heating costs with surging domestic affordable natural gas production. Its result is 11,000 winter deaths in the U.S. each winter from 2005 to 2010.

A lot of taxpayer dollars are useable to help make life better for less-advantaged Americans. The energy produced right here at home has had a significant positive impact. The impact is on the quality of life for many of our fellow citizens.

The researchers are two from Northwestern University and a third from Monash University in Australia. With that, they take note that there is an increase in natural gas production. As a result, it was possible by advanced hydraulic fracturing and modern horizontal drilling, helped drive down energy prices, allowing Americans to affordably heat their homes without affecting their spendings for other needs, such as food and health care.

We find that lower heating prices reduce mortality in the winter months. The estimated effect size implies that the drop in natural gas prices in the late 2000s, induced largely by the boom in shale gas production, averted 11,000 winter deaths per year in the US. We also find that the effect does not just represent short-run hastening of mortality. We show that the effect, which is driven mostly by cardiovascular and respiratory causes, is robust to several checks on the specification.

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Source: API.org (American Petroleum Institute)

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Iran Oil Prices

Iran Oil Prices Can Rattle Sabers

In response to the escalating tensions between Iran and the U.S., some Iranian officials have threatened to close the Strait of Hormuz. So, will this affect the Iran Oil Prices? It’s not the first time the country has made the threat; it happened in December 2011.

Very few think Iran would actually try to close the Strait, though it might take steps to slow the traffic. Too many countries depend on the oil that passes through it, and Iran needs allies, not more enemies.

However, just the threat used to cause an economic shock and rising oil prices in most developed economies. For example, the last time Iran threatened to close the Strait average gasoline prices topped out at nearly $4.00 a gallon in early 2012.

That hasn’t happened this time. While U.S. average gasoline prices are up 50 cents or 60 cents a gallon for the year, they’re still well under $3.00 a gallon in most places (except California).

Part of that rise is a result of Saudi Arabia and the Organization of Petroleum Exporting Countries (OPEC) cutting back oil production in an effort to increase the price of oil. In addition, U.S. refineries are shifting to their “summer blend” of gasoline, which slows production and costs more, putting upward pressure on prices.

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Source: Thehill.com

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Oil Price: Saudis Raise To Asia As Demand Spikes

Saudi Arabia is Expected to Raise the Oil Price

Emboldened by strong prompt demand amid tighter oil supply due to the U.S. sanctions on Venezuela and Iran, the world’s top oil exporter, Saudi Arabia is expected to raise the oil price of the crude grades it sells on its premium market, Asia, for July, trade sources told Reuters on Thursday.

Oil Price: Saudis Raise To Asia As Demand Spikes

The Saudis could raise the price of their flagship Arab Light crude grade by up to $1 per barrel.

The price for Arab Light with a June delivery date is now the highest in almost a year, with Arab Medium selling at the highest price since the end of 2013, and Arab Heavy at a six-year high.

Increasingly Sought

Heavy grades of crude oil have become increasingly sought after by Asian refiners in recent years. This is primarily due to the rising demand for heavier, high sulfur content crude oil in the region. Asian refiners have been investing in upgrading their refining capacities to process heavy crudes, as they offer higher yields of valuable products such as diesel and fuel oil. This shift in demand has created a surge in the need for heavy grades, putting pressure on global supply.

Availability of Heavy Grades of Crude Oil

However, the availability of heavy grades of crude oil has been declining, posing a challenge to Asian refiners. One of the major factors contributing to this decline is the ongoing production slump in Venezuela. The country has been grappling with a severe economic and political crisis, which has significantly hampered its oil industry. The production decline in Venezuela, exacerbated by the political woes, has resulted in a reduced supply of heavy crude oil in the global market.

As a result, Asian refiners are finding it increasingly difficult to secure sufficient quantities of heavy crude to meet their growing demand. They have had to explore alternative sources, such as the Middle East and Africa, to fulfill their requirements. However, these regions also face their own production challenges, further complicating the supply situation. The tight supply of heavy grades has led to increased competition among refiners, driving up prices and putting additional strain on their profitability.

Long-Term Contracts

In response to these supply constraints, some Asian refiners are considering long-term contracts with oil-producing countries to secure a stable supply of heavy grades. Others are investing in upgrading their refining capacities to process different grades of crude oil, thereby diversifying their feedstock options. Additionally, efforts are being made to increase domestic production of heavy crude in Asian countries, reducing their reliance on imports.

In conclusion, the demand for heavy grades of crude oil among Asian refiners has been on the rise, driven by the need for higher yields of valuable products. However, the supply of heavy grades has been declining due to Venezuela’s production slump and political turmoil. This has created supply challenges for Asian refiners, leading to increased competition and higher prices. To mitigate the impact of these constraints, refiners are exploring various strategies such as securing long-term contracts, upgrading their capacities, and boosting domestic production.

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Source: Oilprice.com

 

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