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SEC Investigations Serve As Reminder To Do Homework

August 19th, 2014 vaddison Posted in Uncategorized | Comments Off

Press releases from the U.S. Securities and Exchange Commission (SEC) don’t usually mean good news. More often than not, the SEC is alerting the public about charges it has filed against companies and individuals accused of wrongdoing.

Not even halfway through the month of August, the SEC has announced charges in connection to two investigations involving Houston-based oil and gas companies. The U.S. Commodity Futures Trading Commission also announced a court order concerning price rigging and a $13 million settlement reached with oil logistics firm Parnon Energy and London-based oil trader Arcadia Petroleum.

All should serve as a reminder for investors to complete their due diligence checklists and gather all of the information they can before making financial decisions.

The most recent SEC charges were brought against a Houston-based company called Chimera Energy and four individuals the SEC said were “behind an alleged pump-and-dump scheme that misled investors to believe the company was on the brink of developing revolutionary technology to enable environmentally friendly oil and gas production.”

Chances are you heard about the company’s claims to have found a technology that extracts shale oil without hydraulic fracturing. The SEC said the company issued about three dozen press releases within a two-month period about the technology.

“However, Chimera Energy did not actually license or even possess the technology it touted and had not achieved the claimed results in commercially developing it,” the SEC said in its press release. “While the stock was being pumped by the false claims, entities controlled by [Andrew I.] Farmer dumped more than 6 million shares on the public markets for illicit proceeds of more than $4.5 million.”

The feds also allege that the misleading press releases were approved by Charles E. Grob Jr. and Baldemar Rios, who operated the company at “the minimum level necessary to lend the company a veneer of legitimacy while concealing Farmer’s involvement altogether.” Carolyn Austin also was accused of dumping shares of the Chimera stock, boosting profits for Farmer. All four were charged with securities fraud, registration violations and reporting violations.

“Farmer and his accomplices secretly rigged the market for Chimera Energy stock and illegally profited by exaggerating the company’s capabilities and technology,” David Woodcock, director of the SEC’s Fort Worth regional office, said in the Aug. 15 news release. “They seized on fracking as a topic of public discourse and aggressively touted an entirely fictitious business to attract unwitting investors.”

Interesting side note: Courthouse News Service pointed out that “chimera,” according to the Merriam-Webster dictionary, means “something that exists only in the imagination and is not possible in reality.”

On Aug. 4, the SEC announced charges against Houston American Energy Corp. and John F. Terwilliger. Accusations are that the company and Terwilliger “fraudulently claimed that a Colombian exploration concession, in which Houston American only owned a fractional interest, held between 1 billion and 4 billion barrels of oil reserves and that the reserves were worth more than $100 per share to Houston American’s investors. The estimates lacked any reasonable basis and were falsely attributed to the concession’s operator, whose actual estimates were much lower.”

The oil and gas industry is inherently subject to risks. But doing research and asking questions can help in protecting investments and minimizing those risks.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Mexico’s Actions Show It Means Business

August 12th, 2014 vaddison Posted in Uncategorized | Comments Off

Mexican legislators are on a mission to do all that is in their power to turn around lagging production and stimulate the country’s economy by opening its oil and gas sector, among others, to private investors.

About eight months after they agreed to break the monopoly that state-owned Pemex has held since 1938, legislators have accomplished a feat in passing energy laws. Another milestone was reached this week when Mexico’s President Enrique Pena Nieto, who has pushed the reform as part of a sweeping overhaul of key segments of the government, enacted the legislation.

The country should be applauded for not only its initiatives, but its swiftness. The pace at which legislators and other officials involved in the process have worked has been quick, even despite the presence of disagreement on certain issues. Their counterparts across the border in the U.S., to the northeast in the nation’s capital, could learn a few lessons.

The Mexican government is pushing forward, and it is moving ahead of schedule.

Bloomberg reported that the government plans to announce which fields Pemex will keep for production as part of round zero. Instead of announcing the fields on Sept. 17, the news is scheduled to be announced Aug. 13, according to Pena Nieto.

“The energy reform opens a great opportunity for Mexico, and we need to seize it with complete and fast implementation,” Pena Nieto said. “I’ve told different areas of the government to accelerate all of the measures necessary to put this reform into action for the good of Mexico.”

The energy ministry will decide which fields Pemex gets to keep. The company has shallow-water E&P capabilities but lacks the technical know-how to tap deepwater and unconventional resources.

Pemex has requested 31% of the country’s prospective resources, which accounts for 34.5 Bbbl.

During a March 28 conference call about round zero, Gustavo Hernández, who was acting E&P director for Pemex at the time, said, “There are still lots of opportunities for other players to come to explore and to convert these prospective resources—both conventional and unconventional—accounting for 78 billion barrels to be discovered.”

Mexico is believed to have 156.6 Bboe of hydrocarbon resources, of which 112.8 Bboe are considered prospective resources.

The energy ministry will decide, with technical input from the National Hydrocarbon Commission, which fields Pemex gets to keep.

In order to get what it requested, “Pemex has to demonstrate that it has the technical, financial and operational capacities needed to explore and produce hydrocarbons in a sufficient and competitive manner,” Maria de Lourdes Melgar, undersecretary of hydrocarbons for the Ministry of Energy, said during the same call.

“It’s like a coin which has two sides,” Melgar added. “On one hand, we need to strengthen Pemex, providing the necessary resources to ensure current levels of production in an efficient manner, and that includes reserves. This is the first step toward converting Pemex into a productive state enterprise. On the other hand, from the prospective of the state, we need to multiply investments in E&P, increasing the number of players and creating a new oil industry, which will allow us to increase production and reserves.”

Mexico has shown that it is willing and ready to do business. Now, it is up to private investors to join in the action. Some companies already are getting involved. Pemex recently awarded unrelated contracts to CGG and GE Oil & Gas. CGG won a $200 million contract for ocean-bottom cable (OBC) 3-D/4C seismic work, while GE Oil & Gas was awarded a contract to provide vital surface equipment to Pemex for use at its offshore project in the Ayatsil heavy oil field in the Campeche Sound in the Gulf of Mexico.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Marcellus Production Soars To New High

August 6th, 2014 vaddison Posted in Uncategorized | Comments Off

Gas production in the Marcellus region has eclipsed previous rates, hitting a new record high that exceeded 450 MMcm/d (15 Bcf/d) in July.

The news about the large U.S. shale gas basin, which accounts for nearly 40% of the nation’s shale gas production, was released Tuesday by the U.S. Energy Information Administration (EIA). The EIA reported that gas production from the Marcellus region has skyrocketed from 60 MMcm/d (2 Bcf/d) in 2010.

The production increase was attributed to improved drilling productivity, which includes the better precision and efficiency that comes with horizontal drilling and hydraulic fracturing. The EIA predicts that these techniques will help push up production even further by the end of the month.

“With 100 rigs in operation and with each rig supporting more than 6 million cubic feet per day [170 Mcm/d] in new-well production each month, new Marcellus region wells coming online in August are expected to deliver over 600 [MMcf/d] [18 MMcm/d] of additional production,” the EIA said in its report. “This production from new wells is more than enough to offset the anticipated drop in production that results from existing well decline rates, increasing the production rate by 247 MMcf/d [7.4 MMcm/d].”

The year appears to be shaping up as a good one for oil and gas companies’ operations in the region, including Chesapeake Appalachia and Cabot Oil &Gas among others. Cabot called its Marcellus Shale properties the “cornerstone asset of its portfolio” that has driven record production and reserve growth.

For second-quarter 2014, Cabot reported production averaged 37.7 MMcm/d (1,258 MMcf/d), marking a 41% jump over the same time last year.

“Our operations in the Marcellus continue to meet expectations across our acreage position,” Cabot CEO Dan O. Dinges said in a July 24 news release about the company’s second-quarter results. “We recently placed on production three pads that encompass the northern- and eastern-most reaches of our acreage with great success.”

Chesapeake is scheduled to release its second-quarter results Aug. 6.

But higher output has brought some growing pains. The EIA pointed out that production has outpaced pipeline capacity in the region, prompting the need for pipeline expansion projects.

“As pipeline capacity is increased, markets in the Northeast gain greater access to Marcellus region gas, which can result in stabilized or decreased prices,” the EIA said. “Natural gas prices in the Northeast, such as the Dominion South trading point in southwestern Pennsylvania, have increasingly been below the Henry Hub price, in part because of increased access to Marcellus gas.”

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Arctic’s ‘Targeted Leasing’ Approach Could Work Elsewhere

July 29th, 2014 vaddison Posted in Uncategorized | Comments Off

Oil and gas industry officials seeking drilling access to more offshore areas have a chance to let their voices be heard by U.S. regulatory authorities.

Using the targeted leasing approach unveiled in 2012, the U.S. Bureau of Ocean Energy Management (BOEM) wants to find out which specific areas in the Beaufort Sea planning area have the most promising hydrocarbon potential. BOEM already has its own idea, but seeks industry’s input. The federal agency is also seeking knowledge about environmentally sensitive habitats as well as other native activities of importance in the area as part of its recently announced 45-day call for information and nominations.

“There is significant oil and gas potential in the Beaufort Sea, but this part of the Arctic Ocean is also a unique and sensitive environment that is critically important to the subsistence needs of Alaska Native communities on the North Slope,” BOEM Acting Director Walter Cruickshank said in a press release about the call for information. “Any consideration of future leasing must be done in a way that identifies not only the areas that have resource potential, but also those areas that must be protected for wildlife and traditional uses.”

The process will play a role in BOEM’s decision on which areas could be included in a potential oil and gas lease sale offshore Alaska. Industry is asked to rank its interest in certain areas on a five-level scale ranging from “critical interest” to “no interest.” BOEM said if a nomination is outside the area BOEM believes has high hydrocarbon potential, the company must provide detailed information, such as geologic, geophysical and economic data—about the desired area.

This doesn’t mean all areas with high interest will be shoo-ins for possible sales. Just as with previous targeted lease approaches, detailed environmental reviews and consultations under the National Environmental Policy Act and other laws will be part of the process.

The approach differs from area-wide leasing, which applies to lease sales in the Gulf of Mexico (GoM), in that:
 Industry provides information to back its nominations for areas proposed for leasing;
 The government also wants to know which areas should not be considered for leasing;
 The call for information and nominations happens prior to, instead of concurrent with, the notice of intent to prepare an environmental impact statement, which enables BOEM to “create a more geographically distinct proposal for analysis in the environmental impact statement.”

“BOEM hopes to lessen controversial issues and demonstrate its commitment to targeted leasing strategy early in the process,” the agency said on its website. “The process will allow local communities and other stakeholders to focus attention on a more compact proposed lease sale area, allowing them to concentrate their limited resources toward developing more detailed and relevant comments.”

This sounds like a logical approach to conducting lease sales, especially in environmentally-sensitive areas. But it also could take out some of the guesswork and perhaps save time and manpower if the same, or similar, approach was used for areas that are new to oil and gas drilling. This could apply both offshore and onshore.

Sure, that would mean another regulatory element; however, it could reduce issues that could surface later—whether it’s the presence of endangered birds or reptiles, or some other issue or circumstance unforeseen by the oil and gas industry, regulators or both. Maybe the timing is off, or there simply isn’t enough evidence to justify spending more money chasing oil and natural gas believed to be in place.

Perhaps, the targeted approach could have come in handy with Eastern Sale 225 in the GoM. That sale, which took place in March, didn’t get any bids for new leases.

In addition to Lease Sale 242, scheduled for 2017 in the Beaufort Sea program area, BOEM plans to institute targeted leasing for Lease Sale 237 in the Chukchi Sea program area. The Chukchi lease sale is scheduled in 2016.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Carbon Capture, EOR Projects Make Coal ‘Cleaner’

July 22nd, 2014 vaddison Posted in Uncategorized | Comments Off

As one of the top contributors to energy-related CO2 emissions, coal has been both a reliable power source and a target for reduced consumption as countries across the globe work to combat air pollution.

But huge steps are being made toward cleaning its dirty image. The term “clean coal” remains an oxymoron, for the most part; however, carbon capture-EOR projects—like the one being built by NRG Energy and JX Nippon Oil & Gas Exploration’s Petra Nova Holdings—could go a long way in making the term a reality by preventing most of the power plant CO2 from entering the atmosphere, instead delivering it via pipeline to oil fields for EOR projects.

“Using proven technology, the [Petra Nova] project will be a commercial-scale carbon capture system that captures 90% of the carbon dioxide [CO2] in the processed flue gas from an existing unit at the WA Parish power plant in Fort Bend County, southwest of Houston,” according to a Business Wire news release. Construction on the project has started, and when complete, “the project is expected to be the world’s largest post-combustion carbon capture facility on an existing coal plant.”

The captured CO2, anticipated to be about 1.6 million tons annually, will be compressed and delivered via a 132-km (82-mile) pipeline to the West Ranch oil field, which is co-owned by Petro Nova (NRG, 50% interest; and JX Nippon, 50% interest) and Hilcorp Energy.

“EOR is expected to boost oil production at the field from around 500 [bbl/d] to approximately 15,000 [bbl/d],” the release said. “The West Ranch oil field is currently estimated to hold approximately 60 [MMbbl] of oil recoverable from EOR operations.”

Technology and processes developed by Mitsubishi Heavy Industries and Kansai Electric Power Co. are making the project, which was also a recipient of a U.S. Department of Energy’s (DOE) Clean Coal Power Initiative Program grant, possible. The release stated that the process will use the KM-CDR Process and proprietary KS-1 high-performance solvent for CO2 absorption and desorption.

The project is one of several that illustrate how technology is making coal cleaner.

Another project is already making an impact.

Air Products and Chemicals Inc. has captured more than 1 million metric tons of CO2 at its facility in Port Arthur, Texas, according to the DOE. The company is using a technology called vacuum swing adsorption, enabling it to capture more than 90% of the CO2 from onsite steam methane reformers (SMR).

“Vacuum swing adsorption works by feeding the SMR product gas—a synthesis gas consisting predominantly of hydrogen and CO2 —into ‘adsorber vessels’ where the CO2 adheres to a solid sorbent while the remainder of the stream, primarily hydrogen, passes through the vessels,” according to an article posted June 27 on the DOE’s website. The hydrogen is purified for use in an adjacent refinery, while the CO2 is removed from the solid sorbent through a number of pressure adjustments inside the vessels.

Like the Petra Nova project, this one also pipes gas to an oil field for EOR—the West Hastings Field in southeast Texas. The DOE said the field could produce between 60 MMbbl and 90 MMbbl more of oil with the CO2 injection.

“This process is a promising approach that, if retrofitted to every steam methane reforming facility in the U.S., could reduce our CO2 emissions by about 56 million metric tons a year,” the DOE said.

Now, that would be a huge transformation indeed.

So far, the DOE said its projects have already captured and stored nearly 7.5 million metric tons of CO2 emissions. That, according to the agency, is the equivalent of removing more than 1.5 million vehicles from roads for a year.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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‘Good Neighbor’ Standards Are Worth Following

July 15th, 2014 vaddison Posted in Uncategorized | Comments Off

When oil and gas operations move into communities where they have not been present, it is crucial that relationships involve clear two-way communication, transparency and quick response to ease and eliminate concerns.

This should actually happen in all places where the oil and gas industry operates, regardless of how long oil and gas companies’ operations have been present.

Time has shown that any skimping in this regard can lead to misinformation being distributed, tarnished images, developmental hurdles or possibly squashed projects. This is why the initiative undertaken by the American Petroleum Institute (API) to create what it calls “good neighbor” standards for oil and natural gas developers can prove to be an effective tool in improving industry’s relationship with the public.

API’s guidelines, released last week, are geared toward areas where there are horizontal drilling and hydraulic fracturing operations. The guidelines offer ways for companies to help local residents prepare for what is to come during exploration, minimize interruptions in the community and manage resources, according to the news release announcing the standards.

“From entry through exploration and operation to eventual exiting, fostering broad stakeholder involvement through every phase of project development has become good industry practice. Operators should explain their activities, in a reasonable time frame, to community stakeholders and then identify, understand, listen and respond to legitimate issues and concerns,” the guidelines said. “Identifying and engaging the right stakeholders at the right time in an appropriate way allows for two-way communication to occur. Involving stakeholders in managing the potential impact on their community helps establish trust and build mutually beneficial relationships. While a balanced resolution between industry and stakeholders is ideal, some issues can present unique challenges.”

Recommendations, designed to fit the different stages of a typical oil and gas project’s life cycle, include activities such as:

 Entry. Selecting professional standards for landmen and ethical code of conduct protocols; identifying and engaging stakeholders on communication strategies; conveying key company messages on safety, environment and health practices; building a timeline for when to release information to the public; and developing information packets to distribute at community engagements;

 Exploration. Determining the best media and technology vehicles for community access to the company; assessing opportunities for workforce development with key community stakeholders; offering and providing access to a community feedback mechanism; and engaging in dialogue to address issues, challenges and opportunities;

 Development. Providing project updates by engaging emergency services and first responders; informing the community on potential economic impacts; seeking collaborations with local universities; and managing and promoting best practices;

 Operations/production. Addressing community concerns; developing and implementing an ongoing strategy to engage local government officials; and maintaining open communication; and

 Exit. Decreasing surface footprint; conducting community meetings during decommissioning; and soliciting key community leaders and other stakeholders for input on exit strategy.

These were just a few of several recommendations, or considerations, given for each phase.

“America’s energy revolution is creating millions of jobs and reenergizing communities from coast to coast,” API Director of Standards David Miller said in the release. “The energy revolution is now occurring in areas of the country where oil and natural gas exploration doesn’t have the same history as Texas or Oklahoma. API’s community engagement guidelines will serve as a gold standard for good neighbor policies that address community concerns, enhance the long-term benefits of local development, and ensure a two-way conversation regarding mutual goals for community growth.”

The guidelines are available for free via the API’s website. Hopefully, they will be put to use with good results for all.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Production, Sales From Federal Land Need Improvement

July 8th, 2014 vaddison Posted in Uncategorized | Comments Off

Unconventional shale plays across the U.S. continue to bask in the spotlight, pushing the nation’s oil and gas production levels to new highs.

Unfortunately, production and sales from federal and Indian lands are contributing little to the big picture.

In a continuing trend, sales of fossil fuels from production on federal and Indian lands fell by 7% in 2013 compared to the previous fiscal year, according to a report released recently by the U.S. Energy Information Administration (EIA). The amount dropped from 17,230 trillion Btu in fiscal year 2012 to 15,942 trillion Btu in fiscal year 2013.

The drop came despite what could be called a dismal increase of only 1% in sales of crude oil from federal lands. The EIA reported that sales of crude oil increased to 606 MMbbl last fiscal year, led by production from the federal Gulf of Mexico and Wyoming. Combined, these two areas accounted for 73% of all fossil fuels produced on federal and Indian lands in fiscal year 2013. The areas were followed by New Mexico, Colorado and Utah.

However, the lackluster gain was wiped away when declining coal, natural gas and natural gas plant liquids (NGPL) were added to the mix. Here is how sales fared for fiscal year 2013 compared to the previous fiscal year, according to the EIA’s report.

• Natural gas: dropped 10% to 109 Bcm (3,843 Bcf), with offshore and onshore sales decreasing at 13% and 8%, respectively. Production dropped two percentage points to 16%;

• NGPL: dropped 13% to 103 MMbbl, following a downward trend that emerged after the fiscal year 2010 peak. Onshore production volumes plummeted 21%, while offshore volumes were “virtually unchanged;” and

• Coal sales: dropped by 9% to 401 million short tons. Contributing most to the decline was Wyoming production.

In all, “sales of fossil fuels from federal and Indian lands accounted for about 26% of total fossil fuel sales volumes in the United States in 2013,” the EIA said in the report. “Since FY 2003, sales of fossil fuels produced on federal and Indian lands have fallen 21%, driven by declines in natural gas production and coal production. From FY 2003 to FY 2013, total U.S. fossil fuel production increased by 14%, with a 34% increase in production from nonfederal, non-Indian lands offsetting the decline from federal and Indian lands.”

More than 90% by some estimates of the domestic oil and gas production growth in the U.S. is happening on private or state lands, according to a blog post on the White House’s website. In the post, many of the industry’s strides were touted as was the president’s “all-of-the-above” energy strategy and a shorter processing time for onshore drilling permits (down from an average of 228 days in 2012 to an average of 194 days in 2013).

But it’s time for the feds to contribute a bit more to turn some of these declining federal production and sales stats into positives.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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New Center Focuses On Cyber Security

July 1st, 2014 vaddison Posted in Uncategorized | Comments Off

A new center has formed to provide a spot for oil and gas companies to share intelligence about cyber threats, incidents and ways the industry can protect itself against such attacks taking aim at U.S. energy networks.

The formation of the Oil and Natural Gas Information Sharing and Analysis Center (ONG-ISAC) is a much-needed one, considering the growing threat cyber attacks are posing to the industry. More than half of the 200 incidents that the Industrial Control Systems Cyber Emergency Response Team responded to in the first half of fiscal year 2013 were from the energy sector, according to the center’s website.

The industry-owned and -operated center, based in Washington D.C., allows anonymous submissions and authenticated information sharing as well as protection from the Freedom of Information Act disclosure and anti-trust violations in its effort to protect the operations of critical infrastructure. In addition to information sharing via a secure web port and automated sharing of threat indicators, the center’s members receive near real-time urgent or elevated cyber threat alerts, access to security analyst experts and coordinated industry-wide response to computer-based attacks, according to the center’s website.

Not only will members of the center work together to find threats and areas of vulnerability, they also will work with other centers, vendors and the U.S. government. Its information-sharing process, which is kept confidential given the need for highly secure environments when tackling cyber threats, has a four-color coded traffic light protocol that specifies who is allowed to receive certain information.

The American Petroleum Institute (API) helped form the center, which aims to attract not only upstream companies, but also midstream and downstream companies as well as industry groups and service and supply companies catering to the oil and natural gas sector. Annual membership fees vary based on annual corporate revenue and range from $2,000 for revenues of less than $250 million to $50,000 for those with revenues equal to or greater than $10 billion.

“Computer-based attacks are one of the fastest-growing threats to American businesses and infrastructure,” API Vice President Kyle Isakower said in a prepared statement. “The center builds on existing programs to help companies quickly identify and respond to threats against energy production and distribution systems such as refineries and pipelines and stay connected with law enforcement agencies.”

The effort is a step in the right direction. When it comes to guarding against cyber attacks, information sharing is critical, and having a team of experts keeping tabs on possible threats is extremely valuable, especially for companies that don’t have immediate access to such resources. In addition, businesses can learn from one another and devise best practices and strategies to follow.

Hopefully, this initiative will prove to be an effective tool to thwart cyber attacks.

Including the ONG-ISAC, there are 17 total ISACs, according to the National Council of ISACs. Other industries represented include the defense, emergency services, electricity, finance, information technology, maritime, communications, health, nuclear energy, public transit, real estate, research and education, supply chain, surface transportation, and water sectors. An ISAC also exists for local, state, tribal and territorial governments.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Research Efforts Get $100 Million Boost

June 24th, 2014 vaddison Posted in Uncategorized | Comments Off

Innovative technology, specifically the combination of horizontal drilling and hydraulic fracturing, is what led to the shale revolution unfolding across North America. But a steady flow of new technology and techniques involving seismic, drilling and subsea applications to name a few have led to enhanced operations.

Technological advances are still needed to confront a myriad of challenges—such as reducing or eliminating carbon emissions or figuring out ways to boost recovery from shale wells—as the industry works to meet the world’s growing energy needs. Lots of brainpower will need to be harnessed to tackle these and other challenges. That is why funding research remains critically important.

The U.S. Department of Energy (DOE) recently announced the awarding of $100 million for Energy Frontier Research Centers (EFRCs). The awards represented the second tranche of funding for EFRCs.

“We are mobilizing some of our most talented scientists to join forces and pursue the discoveries and breakthroughs that will lay the foundation for our nation’s energy future,” U.S. Energy Secretary Ernest Moniz said in a prepared statement when the awards were announced. “The funding we’re announcing today will help fuel scientific and technological innovation.”

In all, 32 projects were selected from more than 200 proposals. Of those awarded funds, 10 are new projects and the rest are funding renewals, according to a DOE news release. The award amounts range from $2 million to $4 million per year for each center for up to four fiscal years.

“The centers selected for the second round of funding will help lay the scientific groundwork for fundamental advances in solar energy, electrical energy storage, carbon capture and sequestration, materials and chemistry by design, biosciences, and extreme environments,” the release said.

The centers are tackling an array of projects. Here’s a look at a few of the projects.

• The University of California-Berkeley and the Center for Gas Separations Relevant to Clean Energy Technologies are looking to “create new synthesis strategies, combined with novel characterization and computational methods, for tailoring materials for the efficient separation of gases, such as natural gas, hydrocarbons and carbon dioxide;”

• The University of Illinois at Urbana-Champaign and the Center for Geologic Storage of CO2 aim to “discover new basic science solutions that address uncertainties in current technology at field carbon dioxide storage demonstration projects;”

• Montana State University and the Center for Biological Electron Transfer and Catalysis are investigating “the mechanisms and structural basis controlling electron transfer in model enzymes to develop modular biochemical conversions for the production of hydrocarbon and hydrogen biofuels;” and

• The University of Texas at Austin and the Center for Frontiers of Subsurface Energy Security are working to “understand and control emergent behavior arising from coupled physics and chemistry in heterogeneous geomaterials, particularly during the time and length scales for geologic carbon dioxide storage.”

In the four years that the EFRCs have been around, they have created about 5,400 scientific publications and hundreds of inventions, according to the DOE. It’ll be interesting to learn about the findings of efforts currently underway. Research being conducted today could lead to breakthroughs that can transform the energy industry and how operations are conducted not only domestically but also abroad.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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US Oil Exports Hit 15-Year High

June 17th, 2014 vaddison Posted in Uncategorized | Comments Off

The U.S. has marked another milestone: Crude export levels reached a 15-year high. The accomplishment was announced this week by the U.S. Energy Information Administration (EIA).

Having surpassed 200,000 bbl/d in five of the past six months, the U.S. reached a new high in April when it exported 268,000 bbl/d, the EIA said in a report. Most of the exports—nearly 75%— departed from the Houston-Galveston area. The region’s exports, which averaged 134,000 bbl/d for first-quarter 2014, have skyrocketed with a 283% increase over last year’s record high of 35,000 bbl/d. Besides the Houston-Galveston area, oil was loaded for export in Port Arthur, Texas, and New Orleans.

While exports from the Gulf Coast region dominated, exports from the East Coast dropped slightly compared to last year. EIA figures showed East Coast exports averaged about 30,000 bbl/d in first-quarter 2014, with exports spread evenly among the Port of New York and Portland, Maine.

Just about all of the crude oil has gone to Canada.

So what’s behind the surge in exports? Rising crude oil production, which has set its own record as output from shale plays—led by the Eagle Ford and Bakken formations—surges. Crude oil production was 8.2 MMbbl/d in March, according to the EIA. An earlier report showed that annual crude oil production has steadily risen. Output averaged 7.5 MMbbl/d in 2013, which was 967,000 bbl/d higher than the 2012 average.

Crude export levels could reach greater heights, but a law forbidding crude exports is blocking the way. Exceptions to the law made way for these record-setting exports.

“To export crude oil from the United States, a company must obtain a license from the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce,” the EIA explained in the report.
Exports, including those from Alaska’s Cook Inlet and those to Canada, are generally approved under export licensing requirements.

Also usually getting the green light are exports in connection with the refining or exchange of strategic petroleum reserve oil, exports of foreign-origin crude and California heavy crude up to an average of 25,000 bbl/d, foreign-origin crude exports, and exports that are consistent with international energy supply agreements as well as temporary exports or exchanges, the EIA said.

The report came as some continue to push for federal authorities to lift the oil export ban, while others argue against the move. Keeping resources at home could provide some economic security.

But the list of benefits to removing the ban sounds enticing. A summary of the possible impacts of U.S. crude oils by ICF International and EnSys Energy states that an expansion of crude exports could result in between $15 billion and $70 billion of additional crude oil E&P investment between 2015 and 2020, GDP could grow by an estimated $38 billion by 2020, and up to 300,000 more jobs could be created.

Moreover, lifting the restrictions could narrow the U.S. trade deficit by $22 billion in 2020 due to increased global oil trade. Perhaps of more interest to the typical American is the possibility for a drop in gasoline prices.

“The greatest potential annual decline is 3.8 cents per gallon in 2017. These price decreases for gasoline, heating oil and diesel could save American consumers up to $5.8 billion per year, on average, over the 2015 to 2035 period,” the two groups said. Now that has the potential to get more people behind the movement to lift the ban.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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