By JOHN P. TRETBAR
Total domestic crude production hit a fresh weekly record 0f 10.369 million barrels a day last week, according to report from the U.S. Energy Information Administration. A report from the International Energy Agency notes that over the next three years, the U.S. will cover 80 percent of the growth in oil demand worldwide. Canada, Brazil and Norway will cover the remainder, which, according to the report, leaves no room for more OPEC supply. OPEC and other nations led by Russia agreed to production cuts last year in hopes of drawing down inventories and pumping up prices. According to S&P Global Platts, the cartel as a whole is currently well below their self-imposed production ceiling of 32.73 million barrels per day.
Independent Oil & Gas Service reported an increase in the Kansas rig counts for the week, while the national oil rig count went down. There were nine active drilling rigs in eastern Kansas, up two, and 27 in the western part of the state, up five. Drilling will commence soon on two leases in Barton County and one in Stafford County. Operators are moving in completion tools at three sites in Ellis County, one in Russell County and one in Stafford County. Baker Hughes reported 984 active drilling rigs nationwide, a drop of four oil rigs but an increase of seven exploring for natural gas. Canada reported 273 active rigs, a seasonal drop of 29 rigs.
Kansas operators filed 31 permits to drill at new locations last week, 12 in eastern Kansas and 19 west of Wichita, including two in Barton County. There have been 283 drilling permits filed in Kansas so far this year. Independent Oil & Gas Service reports 26 well completions for the week, 13 east of Wichita, 13 west, with one in Barton County and one in Russell County. So far this year, operators have completed 310 wells.
The Nebraska Supreme Court says TransCanada will not have to pay $354,000 in attorney fees for Nebraska landowners who fought eminent domain efforts to make way for the Keystone XL pipeline. The company ultimately dismissed its condemnation petitions in 2015, opting instead to pursue approval of a pipeline route by the Public Service Commission. In the formal opinion, the court held that the landowners did not offer sufficient proof they were entitled to an award of attorney costs and fees.
An Alaska regulator has asked the Legislature to require oil companies clean up old wells, even they’ve been sold to different companies. Cathy Foerster of the Alaska Oil and Gas Conservation Commission says she’s concerned that if a big oil field is sold to a smaller company that goes bankrupt, cleanups could cost the state billions. Foerster says it’s becoming more common for smaller companies to operate in the state, and she says some of those companies may be more financially unstable.
Saudi Arabia’s energy minister hinted the initial public stock offering of the state oil company Aramco could be delayed until 2019, pushing back a central plank of Crown Prince Mohammed bin Salman’s plan to modernize the economy. In an interview with Bloomberg, Khalid Al-Falih also said the IPO, potentially the largest ever, would be “anchored” by a listing on Saudi Arabia’s local exchange and any international listing would be announced in due course, if at all.
The Trump Administration may offer incentives to oil and gas producers to help reduce the practice of flaring natural gas produced at oil wells. During an energy conference in Houston last week, Interior Secretary Ryan Zinke raised the possibility of reducing royalties collected for production on public lands to help pay for the missing infrastructure. Zinke also said the government could speed up the permitting times for pipelines to move that gas to the marketplace. The ideas surfaced as the administration also moves to repeal the Obama-era flaring ban on oil and gas leases on federal land.
U.S. Interior Secretary Ryan Zinke postponed a federal oil and gas lease sale planned for March, less than a week after the sale was announced, in response to local opposition to the possibility of drilling near national parks and monuments. Zinke said the Bureau of Land Management will remove 17,300 acres near Livingston, Montana, which is a gateway to the Yellowstone National Park. Zinke said the area deserves more study. The remaining 83 parcels, which cover over 46,000 acres, will be offered for lease via an online auction as planned.
There could another attempt to take oil companies to court over global warming, and this time it’s not just infrastructure they’re worried about. The news comes from Arnold Schwarzenegger, who says he is meeting with law firms to file suit against the industry “…for knowingly killing people all over the world.” The former California governor and global environmental activist claims oil companies have known since 1959 that there would be global warming caused by fossil fuels, and that it would kill people. Schwarzenegger made that pronouncement Sunday during recording of a podcast for Politico Magazine. In January the City of New York joined several municipalities in California in announcing they would sue the major oil companies over the environmental costs associated with climate change.