Jack Gerard, the CEO of the American Petroleum Institute, or API, spoke at a lunch for business leaders in New Orleans on Thursday, July 17. In his speech, Gerard called for policy changes on the part of the Obama administration in regard to its approach to energy policy.
Gerard called the Obama administration’s current approach to energy policy irrational and stated that the nation needs the White House to take on a more significant and proactive leadership role to help it to make necessary adjustments for the era of energy abundance and security.
Gerard feels that the country is currently standing at an energy crossroads, but that government policy will play a key role in deciding how the United States continues in the industry in the future. It is currently the world’s largest producer of both oil and natural gas, but, according to Gerard, the energy policy of the Obama administration has not done much to help fuel that growth and is not doing anything to maintain it.
For more on Jack Gerard’s speech and opinions, read the full article at http://www.nola.com/business/index.ssf/2014/07/american_petroleum_institute_h.html
Governor of Texas, Rick Perry sent a fiery letter to President Obama attacking the president’s policies, and lack of action particularly on energy issues. The letter was sent on Friday May 16 and made public on Monday, May 19. In his letter, Governor Perry criticized the president’s failure to grant approval for the Keystone XL Pipeline, as well as his current approach towards energy. He added that President Obama’s stance on energy is suffocating the industry and encouraged him to replicate Texas’ energy approach on a nationwide scale.
Perry also hurled a string of criticisms in his letter regarding the regulations implemented by the Environmental Planning Agency (EPA). The EPA has implemented new rules relative to coal fired plants which Texas has since challenged. One of the rules is that states will be held accountable for pollution that drifted into other states. Despite the challenges to the new rules, they were upheld by both the Supreme Court and the federal appeals court.
In a recently released report, Gulfport Energy Corp. said that the company’s output is in line with guidance. The company is estimating that its production will be at an average of 27,100 boe/d. This estimation does not include the company’s latest acquisition of the Utica Shale from Rhino Resources Partners LP which produced approximately 900 boe/d during the quarter.
Gulfport is optimistic about the future of production despite the harsh winter conditions experienced. This is because downtime was factored in the guidance. The company will begin hydraulic fracturing shortly in the Darla pad in Utica. However, reports into its performance wont be made available until September. An update will be provided about the dry-type gas curve by June the latest.
Gulfport already owns 165,430 acres within the Utica but has further plans to increase its assets. Plans are afoot to acquire at least 8,000 additional acres in the Utica formation.
Energy reforms in Mexico have allowed for Texas companies to begin investment in the Eagle Ford Shale zone which runs along the Texas-Mexico border. With new investments in the area, the Eagle Ford Shale play could see up to $1.2 trillion in investments.
Now that the Mexican government has opened up the oil and gas industry to private investment, ventures will able to take hold on both sides of the border. The Mexican government does not have the money or the resources to tap into the shale deposits that is has on its own soil. However, it believes that it can partner with big money and get into those deposits.
This change means that millions of jobs and billions of dollars will be created through the exploration of the shale zone along the border. Texas companies will win the biggest, but the entire state will be able to tap into greater energy resources as a result of this change in Mexican policy.
Despite the current shattering low prices of natural gas nationwide, Blackstone Group is making a giant leap of faith by purchasing three gas fired plants in Texas. The plants are being sold by retail electricity provider, Direct Energy, who initially purchased the plants to protect itself against the price increases in the domestic power market of the day.
Direct Energy bought the three plants for $331 million and is selling them to Blackstone for double the price. This investment will cost Blackstone Group $685 million. Reports have however surfaced that the investment firm is hoping that the state’s electricity prices remain very low.
Fears abound among state regulators that Texas’ increasing population could erode the electricity supply. As a result the Public Utilities Commission is considering paying power plants to keep excess energy. Currently, power plants are only paid for the power that they supply. This will be an incentive for energy companies to build more power plants.
The Independent Petroleum Association of America has elected a Houston based energy CEO to be their chairman. Michael Watford is the current chairman and CEO of Ultra Petroleum Corp, a Houston based energy company that specializes in acquisition and development of oil and natural gas properties. Houston is at the center of the formidable Texas energy industry. It is headquarters for numerous energy companies and electricity providers who serve the large Texas deregulated electricity market.
Over Watford’s 14 year term as CEO of Ultra Petroleum the natural gas company has seen its market value increase over 100 fold; from $50 million to $5.5 billion. He will take over for the outgoing chairman Virginia Lazenby. Watford’s term will be for 2013- 2015.
The IPAA represents thousands of independent oil and natural gas producers and service companies from across the United States. According to the association’s website, their mission is to “ensuring a strong, viable domestic oil and natural gas industry, recognizing that an adequate and secure supply of energy is essential to the national economy.”