A tug boat navigates the Houston ship channel with a flare from an oil refinery and storage facility in the background south of downtown Houston
The campaign to end a 39-year ban on the export of most domestically produced crude oil has gathered momentum over the past week. First came a report from the Government Accountability Office, indicating that removing the ban would boost domestic production by encouraging further investment. A few days later, fourteen independent oil producers joined to register the first lobbying group specifically aimed at lifting the embargo.
“They’re probably tilting at windmills, but it’s going to be a good try,” says Barbara Shook, senior reporter-at-large for Energy Intelligence Group. “They’ll have better luck after the November elections if the Republicans take control of both houses of the Congress. The Obama Administration is definitely against repealing the ban on exports.”
The Commerce Department issued a ruling in June that allowed limited exports of ultra-light crude oil, known as condensates. That led U.S. crude exports to spike in July to 401,000 barrels per day, the highest level in 57 years.
An oil rig south of Pyote, Texas, December 11, 2013.
Crude oil is now trading at roughly $13 a barrel less than it did a year ago. That’s in spite of the seizure of Iraqi and Syrian oil facilities by ISIS and a U.S.-led bombing campaign against those facilities.
“The beginning of the bombing campaign in Syria and Iraq recently was met with a big yawn by the energy markets and really had no upward effect at all on crude oil prices,” says economist Karr Ingham, creator of the Texas Petro Index on behalf of the Texas Alliance of Energy Producers.
According to the latest index, the state’s crude oil production approached 96 million barrels in August, up more than 23 percent from August of last year. Ingham suspects the rise in U.S. production is helping to hold down prices and stabilize energy markets. “Don’t you wonder if we are not seeing the benefits of expanded crude oil production in North America playing out before our very eyes?” he says. “I wonder if that’s not exactly what we’re seeing. I certainly hope that’s the case. This may in part be what energy independence looks like.”
The Three Rivers ISD school bus was totaled in this accident in January 2014, after a fracking crew driver fell asleep and hit the bus. Three workers in a commercial van were killed; but the children were safe.
State Highway 72 cuts through the heart of the Eagle Ford Shale in South Texas. The two-lane artery links oil boomtowns like Kenedy and Tilden to the Three Rivers Valero refinery. Local residents call the highway “Death Row.”
“Every week someone dies, just about,” says Steve Alaniz, a construction manager based in Three Rivers. “There’s so many guys that work nights, and there’s so many people getting up early. Everybody’s in a hurry. The roads aren’t big enough for this kind of traffic.”
Early on the morning of January 30, a Three Rivers school bus was pulling into an RV park off Highway 72, when a van filled with oilfield workers employed by Compass Well Services plowed into the bus’s rear end. Alaniz was one of the first on the scene. He found the students safe at the front of the bus, thanks to school district policy in response to the heavy traffic. Continue Reading →
ExxonMobil's refinery in Baytown is one of the nation's biggest
The Texas petrochemical industry is in the midst of its biggest expansion in decades. That’s thanks largely to the availability of cheap natural gas, used both for fuel and as a raw material. It’s hardly the first time the region has seen this scenario.
Barbara Shook is senior reporter-at-large for Energy Intelligence Group. She spends much of her time these days covering the construction boom in the petrochemical industry. Last week, she was on hand at a ceremony at ExxonMobil Chemical’s Baytown plant, where a multi-billion dollar expansion is already under way.
“This is my second petrochemical boom,” Shook says. “I watched the first one in the early 1950s from my father’s ’48 Ford pickup truck. He was the construction superintendent on a power plant for a big petrochemical plant in East Texas. That one was also fueled by natural gas and natural gas liquids, just like this one is.”
Texas had just passed a ban on flaring, which forced producers to find new markets for gas.
There are currently two multi-billion dollar projects underway in Greater Houston besides ExxonMobil’s. They include expansions of ChevronPhillips’ Baytown facility, as well as the Dow Chemical complex in Freeport.
A Chesapeake Energy Corp. worker stands beside a Chesapeake oil drilling rig on the Eagle Ford shale near Crystal City, Texas, June 6, 2011.
The oil and gas industry added 10,500 new jobs over the second quarter, according to industry news service Rigzone. That’s a two-thirds increase over the same period in 2013.
Between April and June, companies in the oil and gas sector added more than 4,000 new positions in Texas. That gave the Lone Star State a commanding lead in job creation for the industry. Louisiana came in second, with about 600 new oil and gas jobs. Alaska took third with 500.
“In total, looking at the first half of the year, over 20,000 positions in the U.S. were created,” says Paul Caplan, president of Rigzone. “Last year at this time, the halfway mark of the year was about 12,600, so we’re talking about a substantial increase in the number of, especially, production jobs.”
Turnover in the oil and gas industry is running on the high side. In the second quarter, nearly 17,000 professionals a month voluntarily left jobs in the mining and logging industry, which Rigzone uses as a proxy for the U.S. oil and gas sector. That compares to an average of roughly 12,000 workers a month over the past ten years.
The House of Representatives has passed a bill to extend anti-terrorism protections for chemical plants through 2017. The bill’s lead sponsors included two Houston congressmen – Republican Rep. Michael McCaul and Democratic Rep. Gene Green.
“Last year, because of the budget problems, when we shut down the government for thirteen days, this law was not into effect,” says Rep. Green. “We want to give it its own freestanding law, so there can be some certainty.” Continue Reading →
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