Trump signs executive order on offshore drilling
President Trump signed an executive order to expand offshore drilling for oil and gas in an effort to reduce the cost of energy, create new jobs and make America more energy-independent. The oil and gas industry applauded the move, but environmental groups cautioned that an inevitable oil spill would hurt tourism along the Atlantic coast where more than 100 cities and towns have passed resolutions banning offshore drilling. Other groups raised concerns about the potential danger to sea life, which would impact the production of seafood.
As part of the order, Interior Secretary Ryan Zinke will review a five-year plan in which former president Obama banned drilling in parts of the Pacific, Arctic and Atlantic oceans. According to Zinke, the review will be a lengthy process.
While Trump claims his order is permanent, some lawyers say that Trump’s power on the matter is unclear because the Outer Continental Shelf Lands Act, which Obama used to issue his ban, does not explicitly allow a president to get rid of a designation.
New pipeline capacity accommodates increasing crude oil production
The West Texas Intermediate (WTO) crude oil priced at Midland, Texas, compared with WTO at Cushing, Oklahoma, is feeling modest downward pressure from increasing crude oil production in the Permian basin of western Texas and eastern New Mexico, filling available pipeline capacity. But the discount offered by Midland compared to Cushing is unlikely to be large or persistent in 2017 because it followed the rapid increase in Permian production from 2010 through 2014, according to the U.S. Energy Information Administration (EIA).
API gravity of crude oil products in US varies widely
Key characteristics of crude oil, particularly American Petroleum Institute (API) gravity, are used by refineries to evaluate different crude streams for processing into petroleum products, according to the EIA. In 2016, slightly more than half of the 8.4 million barrels per day (b/d) of crude oil produced in the Lower 48 states was light oil, or, in other words, less dense oil with an API gravity of at least 40.1. Light oil also made up more than half of the oil produced in 2015.
Natural gas to be largest source of electricity generation this summer
Electricity generation fueled by natural gas during June, July and August will be lower than last summer, but will continue to exceed generation of any other fuel, including coal-fired generation, according to the EIA April 2017 Short-Term Energy Outlook (STEO). This is the third summer in a row that natural gas-led electricity generation has taken the lead. The projected share of total U.S. generation for natural gas is expected to average 34 percent, down from 37 percent last summer. Coal’s generation share was 32 percent.
Natural gas stocks end heating season on a high
At the end of the first quarter of 2017, which marked the end of the heating season, working natural gas storage totaled 2,051 billion cubic feet (Bcf), according to the EIA Weekly Natural Gas Storage Report. The data report, released April 6, showed working natural gas storage at 15 percent higher than the five-year end-of-season average, though storks were 17 percent lower than last year’s record end-of-season high.
Natural gas generators take up lion’s share of US capacity
Natural gas-fired generators were responsible for 42 percent of the operating electricity generating capacity in the U.S. in 2016, edging out coal to become the leading generation source, according to the EIA. In 2016, natural gas provided one-third of total electricity generation. Its increased is credited primarily to continued cost-competitiveness of natural gas relative to coal.