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  • W&J Energy Review | November 10, 2014


Editors: Diana Stares, Jack Myint


Local Affairs

What Wolf’s win means for energy and the environment | NPR, November 4 2014

For the first time since 1954, an incumbent Pennsylvania governor did not either win re-election or cede power to someone from their own party. That’s an historic loss for Pennsylvania’s GOP, which has been supportive of the gas industry, so reaction to Wolf over Corbett broke down along predictable lines. Lou D’Amico of the Pennsylvania Independent Oil and Gas Association says Wolf’s policies could lead to job loss. Cindy Dunn, director of PennFuture said, “For the environmental voters, it was a referendum of Gov. Corbett’s handling of the gas industry.” Let’s take a look at what Wolf’s win might mean for energy and environment. Wolf’s plan to replace the current impact fee with a 5 percent tax on the market value of natural gas may run up against more opposition than he seems to expect. He says at current production levels this tax could bring in $1 billion, which is about $800,000 more each year than the current impact fee. He says he’ll use that money to help boost funding for the state’s failing public school systems.But he’s got to contend with a Republican legislature. And ideas that poll well with voters during a campaign pre-election does not always translate well to momentum in Harrisburg post-election. Still, drillers are worried, and not so sure they’ve got the support in Harrisburg they need to head off a tax hike.

5 Simple Things that Governor Tom Wolf can do for Pennsylvania's Environment | PR NewsWire, November 6 2014

The November 4th election saw the loss of pro-environment seats in both houses of the legislature, predicting further attacks on the environment.  Fortunately, Governor-Elect Tom Wolf will have significant power to block those attacks and to move forward on crucial environmental protections, and has promised a cleaner future for Pennsylvania. Clean Water Action, Conservation Voters of Pennsylvania, PennEnvironment, PennFuture, and the Sierra Club Pennsylvania Chapter congratulate Governor-Elect Wolf on his victory and look forward to working with his administration to protect Pennsylvania'senvironment. To that end, these organizations urge Governor-Elect Wolf to prioritize the following during his first 100 days in office.

  • Save Pennsylvania's State Parks and Forests
  • Plan for the Future on Climate and Energy
  • Let the Department of Environmental Protection Protect the Environment
  • Keep Our Water Safe
  • Regulate Methane and Clean Up Pennsylvania's Air


Axion Supplying Energy-Storage System to Pennsylvania Solar Farm | Bloomberg, October 30 2014

Axion Power International Inc. (AXPW), the energy-storage-system maker that’s declined 64 percent this year, will supply equipment to the largest solar farm in Pennsylvania. The Coatesville Solar Initiative, being developed by Keares Electrical Contracting Inc., could end up using 5,000 to 6,000 batteries for energy storage and frequency regulation, New Castle, Pennsylvania-based Axion said today in a statement. Financial terms weren’t disclosed. The proposed solar project would be capable of generating 9.1 megawatts. The Coatesville Area School District has agreed to a 25-year contract to buy electricity from it.

Europeans shop for U.S. energy in Philly |, November 6 2014

Trade reps from Italy, Germany, Britain, Poland, Holland, Sweden and other countries, in Philadelphia for a tour of business sites today as European and North American diplomats are inching toward new global free-trade deals, were eager to learn more about importing cheap gas and other fuels and raw materials from Pennsylvania and other states. "How many of your countries import gas from the Soviet Union?" Michael Krancer, a former Pennsylvania environmental secretary who now represents oil refineries and gas fracking companies as head of the Blank Rome law firm's energy practice, asked the Europeans who assembled at the Reed Smith law firm for breakfast before touring the Navy Yard business center. "I don't need to tell you what energy development means for the good guys in the world," Krancer went on, warming to his pitch: “The energy business is centered here in Philadelphia. We have an amazing location to take advantage of the resources in your back yard... This is the place to invest your money."

Pennsylvania and Ohio regulatory efforts regarding NORM/TENORM in oil and gas production wastes | Lexology, November 3 2014

The Pennsylvania Department of Environmental Protection's (DEP) Bureau of Radiation Protection uses 2001 regulations requiring monitoring for and responding to radioactive material entering solid waste facilities to regulate naturally occurring radioactive materials ("NORM") in shale gas wastes. Solid waste facilities must screen loads of waste for gamma radiation exposure rates over 10 microRoentgen per hour (10 µR/hr) above background. Pennsylvania places significant restrictions on disposal of material that exceeds the radiation screening limit. If a load of waste triggers an alarm and can be traced to oil and gas production, it may be disposed of in a landfill only if it meets certain requirements. Disposing of higher concentrations and volumes, requires approval from the Bureau of Radiation Protection, additional recordkeeping and waste tracking, and the facility must be able to demonstrate that the dose from all pathways is less than 25 millirem per year. The Bureau of Radiation Protection has undertaken a comprehensive study of NORM waste generated during oil and gas activities. This study will build on information gathered by the Bureau of Oil and Gas Management, and the Bureau of Radiation Protection in the 1990s when it determined that no additional regulation was required for oil and gas NORM. A final study report is anticipated by the end of 2014. Based on the scope of the study, the Pennsylvania DEP Bureau of Radiation Protection may undertake additional rulemaking to regulate oil and gas NORM in waste water discharges, and at oil field production and processing sites.

New Pennsylvania natural gas pipeline planned | Mcall, November 6 2014

So much natural gas is gushing from western Pennsylvania and neighboring states that investors want to build yet another cross-state pipeline. Sunoco Logistics Partners LP announced Thursday it will invest about $2.5 billion in a Mariner East 2 pipeline to transport natural gas liquids from the Marcellus and Utica Shale in western Pennsylvania, Ohio and West Virginia to the Marcus Hook industrial complex along the Delaware River just outside Delaware. "There's tremendous production," said Sunoco spokesman Jeffrey Shields, "and the producers need pipeline capacity. Otherwise, [the liquids] are going down to the Gulf Coast" via existing pipelines. Mariner East 2, running alongside the company's Mariner East 1, will provide an initial capacity of 275,000 barrels a day of NGLs such as propane, butane and ethane. It is expected to enter service by the end of 2016. Mariner East 1 has a capacity of 70,000 bpd and is expected to begin propane service by the end of 2014.

National Affairs

How the GOP could shake up U.S. energy policy | CBSNews, November 6 2014

What's next for America's energy policies and initiatives in the wake of the massive political changeover in Washington? President Barack Obama has made energy -- and the national transition toward alternative and renewable energy sources -- a signature focus of his administration. But with both the House and Senate coming under Republican control in January, some of those energy initiatives might be delayed, derailed or halted entirely. Thomas Lorenzen, now a partner with the international law firm of Dorsey & Whitney, was assistant chief in the Justice Department's environment and natural resources division between 2004 and 2013. He believes the new GOP-dominated Congress might work to undo the administration's initiatives on carbon regulations, as well as the upcoming ozone standard and the so-called Waters of the United States rule, which expands Environmental Protection Agency (EPA) jurisdiction over a wide expanse of U.S. bodies of water.

US Solar Costs Catching Up to Conventional Energy | Discovery News, October 30 2014


For years, one of the big arguments against solar energy is that it’s too expensive for consumers, and can’t compete price-wise with conventional electricity produced by burning fossil fuel in utility plants. But that may be changing. Two new studies indicate that solar is getting affordable more quickly than expected, and that it’s on track to be as cheap or cheaper than average electricity-bill prices for most of the United States in just two years. One study, by Deutsche Bank energy analyst Vishal Shaw, isn’t yet available on the financial institution’s website, but its findings have been reported in Bloomberg News and other media outlets. Shaw reportedly predicts that solar will reach parity with conventional electricity prices in as many as 47 states by 2016. He also says that solar will become mainstream as prices continue to drop and financing becomes more affordable. That progress is contingent upon Congress preserving the current 30 percent tax break for solar energy users. But even if the subsidy is reduced to 10 percent, consumers in at least 36 states would still find solar energy to be as cheap as conventional electricity by 2016.

The Driving Force Behind the US Oil Boom | 24/7 WallStreet, November 7 2014

The shale revolution’s sweet spot is oilfield services, the lower-risk backbone of the American oil and gas boom that pays off regardless of a play’s economicsBehind the stardom of the explorers and producers who have put themselves on the revolutionary shale map and absorb most of the risk—are the service providers who make up a highly lucrative market segment. The US land-based rig count rose 3% over the last quarter, reaching a two-year high of 1,870 active rigs. A major factor in this growth has been an uptick in horizontal drilling in the Permian Basin, Texas’ revived giant, where the rig count was up 21% year-on-year. And while oil prices slumped in October, drilling activity continues to rise, according to Baker Hughes, the third-largest oil services company. Baker Hughes’ rig count is up 3.8% in the fourth quarter of this year, compared to the third quarter.

US oil boom: Can the industry survive falling prices? | BBC News, November 5 2014

Nationwide, from North Dakota to Texas, technological improvements in horizontal drilling, or fracking, have led to an oil boom across the country, pushing US oil production to a 31-year high. In Oklahoma, the discovery of oil resources contained within the Woodford-Cana shale has led some to speculate that the state could once again become the nation's leading oil producer, a position it last held at the turn of the 20th Century. But all of this production is dependent on high prices, which have been plummeting over the summer. The price per barrel of the benchmark Brent Crude index recently hit a four-year low, and that has some wondering about the economics of continued production if there is in fact a global supply war. However, Fadel Gheit, a senior analyst covering oil at Oppenheimer and Company, says that prices would have to fall significantly to really force any producer in the US out of business.

International Affairs

Global energy demand to soar 60% by 2040, says OPEC | MSN News, November 7 2014

Global energy demand will increase by 60 percent by 2040 compared to 2010 levels, OPEC said Thursday, with greenhouse-gas-emitting fossil fuels remaining by far humanity's main source of power. World oil output is projected to soar from 81.8 million barrels per day (mbpd) to 99.6 mbpd over the same period, the Organization for the Petroleum Exporting Countries said in its new annual report. The share of oil in global energy use is however projected to fall from 31.9 percent to 24.3 percent, while that of all fossil fuels -- oil, coal and gas -- will dip from 81.6 percent to 78.4 percent. Hydro, biomass and other renewables will account for 15.8 percent, up from 12.7 in 2010 and nuclear power will represent 5.7 percent, little changed from 5.6 percent, the 12-member OPEC said. Renewables like solar and wind "are expected to continue to grow at a fast pace, partly as a result of government support. However, given their low initial base, their share of the global energy mix is expected to remain modest by 2040," OPEC said.

Oil Prices Spiral, Kremlin Backlash over U.S. Sanctions and Solar 3D Acquisition | Breaking Energy, November 7 2014

As global oil prices continue to plunge based on an aggressive international trading policy by Saudi Arabia, questions are being raised about the sustainability of the U.S. shale boom. “The price of oil fell some more on Tuesday, down as low as $75.84 before closing at $77 a barrel. The decline is blamed on Saudi Arabia cutting prices rather than cutting output amid signs of global glut. That’s discouraging to America’s highly leveraged drillers, who had been hoping beyond hope that $80 would act as a floor on prices. If prices don’t recover soon this could be the beginning of the end of the Great American oil fracking boom. Already ConocoPhillips and Shell have announced a pull back in onshore investment. But the real pain will be felt by the army of smaller independent producers.”  The Kremlin has accused the United States government of launching a money laundering investigation into his inner circle of confidants amid mounting Western sanctions.“


Converting Global Warming to Global Energy | EnergyCollective, November 5 2014

As a business strategy, the legitimate conversion of a liability into income is the most successful possible outcome. Creative accounting is not new to the energy sector as witness Enron’s inflation of revenues through a model that failed to record the cost of goods sold. This and like aggressive accounting tactics confused both shareholders and analysts alike with the result they were ultimately burned by the biggest bankruptcy in American history to that point. Overhanging the planet today is a far greater potential calamity based on inadequate disclosure of the liabilities associated with the burning of fossil fuels and the attempted concealment of the bad news. 


East Africa: The New Global Energy Hot Spot | Arabian Gazette, November 6 2014

East Africa is undergoing a major transformation to become a new world-class player on the energy market. By 2025, East Africa is expected to experience an incremental production growth of nearly 1 million barrels per day (b/d), led by Mozambique and Tanzania. With the highest number of gas discoveries between 2010-2013 in East Africa, accounting for more than 25 percent of added reserves worldwide –and as the largest contributor, with over 50 percent of total regional M&A (mergers and acquisitions) value in 2013 – the region comes to the fore of international openness to investment, boosting its attractiveness and competitiveness, according to new analysis from IHS Inc., the leading global source of critical information and insight. According to the US Energy Information Administration (EIA), “Mozambique has become one of the most promising countries in Africa in terms of natural gas and coal resources.” The Oil & Gas Journal released on January 1, 2014, raised Mozambique’s proved natural gas reserves to 100 trillion cubic feet (Tcf), up from 4.5 Tcf the previous year, placing the country as the third-largest proved natural gas reserve holder in Africa, after Nigeria and Algeria.


Middle East and North Africa accounts for 48 percent of global energy subsidies, warns World Bank | YourMiddleEast, November 5 2014

Arab states in the Gulf, which pump a fifth of the world's crude oil, spend more than $160 billion on energy subsidies annually, a top World Bank official said Tuesday. "Gulf states spend around 10 percent of their gross domestic product every year on energy subsidies including fuel and electricity. That amounts to $160 billion," said Shantayanan Devarajan, the bank's chief economist for Middle East and North Africa. The six countries of the Gulf Cooperation Council – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates – had a combined GDP of $1.64 trillion at the end of 2013, according to the International Monetary Fund. Saudi Arabia, the world's top oil exporter, accounts for almost half of the GCC subsidies."The GCC and other MENA states must start cutting energy subsidies now otherwise problems associated with them will get worse," Devarajan told a news conference in Kuwait on a World Bank report on subsidies.


World Energy Solutions Enters Into Agreement to be Acquired by EnerNOC | Market Watch, November 4 2014

World Energy Solutions, Inc. an energy technology and services firm, today announced it has entered into an agreement to be acquired by EnerNOC, Inc. a leading provider of energy intelligence software (EIS), for $5.50 per share. Under the terms of the agreement, a subsidiary of EnerNOC will commence a tender offer to acquire all of the Company's shares of common stock for $5.50 per share in cash, representing an approximate 35% premium over the 20 trading-day average of the Company's shares and an approximate 33% premium to the closing price of the Company's shares on November 3, 2014. EnerNOC's obligation to purchase the shares of the Company's common stock tendered in the tender offer is subject to certain conditions, including that holders of at least a majority of the shares are tendered during the tender offer period. Following completion of the tender offer, the remaining shares will be acquired in a second step merger at the same cash price as paid in the tender offer.

The Top 9 Stories You Need To Know About Today In O&G | OilPro, November 7 2014

  • US Shale Outlook For 2015 Starts To Crack.
    While most E&Ps have taken a wait and see approach to their 2015 budgets so far, cutbacks are now starting to trickle in. Following Rosetta's cut on Tuesday, Continental, the biggest Bakken E&P, ditched their 2015 growth plans, cutting expected investments by $600mm. [Oilpro]

  • Statoil Suspends 2 Floating Rigs On Oversupply In Its Portfolio.
    Statoil has decided to suspend two semisubmersibles (one MW, one UDW) due to overcapacity in its rig portfolio. Transocean Spitsbergen and Songa Trym will be suspended through year-end, a period which might be extended. [Oilpro]

  • UK Awards Offshore Blocks In 'Biggest Ever' Licensing Round.
    The UK Government announced 134 licences covering 252 blocks in the 28th offshore licensing round. A further group of applications will be decided later, but this looks like one of the biggest rounds ever in the five decades since the first licensing round in 1964. [Offshore Energy Today]

  • UPDATE: Saudi Aramco Oil Pipeline Explosion Not As Bad As Initially Feared.
    Crude oil prices spiked $2/barrel and social media lit up yesterday when a Saudi Aramco pipeline fire erupted. Turns out the pipeline was flowing diesel, foul play was not involved, and the initial panic has faded. [Oilpro]

  • Gunmen Attack & Halt Libya's Biggest Oilfield - A Reminder Mid East Tensions Remain High.
    Gunmen with heavy weapons stormed Libya's key El Sharara oilfield causing production to be shut-in. Reports suggest closed production could be back online soon, but this attack is a reminder that Mid East tensions remain high - a factor that has been all but forgotten as traders throw up their hands, run for the exits, and sell crude oil contracts. [Oilpro]

  • Plains All American Buys Half A Texas Pipeline For $1.1 Billion.
    Plains today announced that it agreed to purchase Occidental Petroleum's 50% interest in BridgeTex for $1.075 billion. The BridgeTex pipeline is a new 300,000 barrel-per-day crude oil pipeline system that extends from Colorado City in West Texas to Texas City. [Plains All American Pipeline, L.P.]

  • Enron Castaway EOG Resources The "Apple of Oil"?
    EOG Resources, formerly part the Enron empire, has emerged as the most-recommended stock in the oil industry. The Houston-based company is the only shale producer expected to generate as much or more cash than it spends both this year and next. [Bloomberg]

  • OPEC’s Weak Links Feeling Pain That Shale Producers Share.
    While Saudi Arabia is as flush with cash as ever, the finances of some fellow OPEC members are deteriorating quickly. US shale producers have some allies in the confrontation with Saudi. [Bloomberg]

  • Australia's Woodside Opens Door To Resolving E.Timor Gas Dispute.
    Australia's Woodside Petroleum is in talks with East Timor on building an onshore gas plant, potentially removing one of the major barriers to developing gas fields that could provide billions of dollars to one of the world's poorest countries. [Reuters]