At this week's CERAWeek energy conference hosted virtually by IHS Markit, executives from ConocoPhillips, Chevron, ExxonMobil and other oil companies took turns emphasizing the role of natural gas in the energy transition and painting a bullish outlook for gas demand. IHS Markit Senior Director Matthew Palmer expects US gas demand to continue its growth trajectory through 2050, driven by surging pipeline and liquefied natural gas exports, but said more pipelines are needed to transport the fuel to places where it is needed.
Trains 7 and 8 at the 18-train Calcasieu Pass LNG export facility in Louisiana will be put in place in the coming weeks, on the heels of the recent installation of trains 5 and 6, Venture Global LNG CEO Michael Sabel announced during the CERAWeek energy summit. Sabel said Venture Global's choice of smaller, modular trains manufactured in a factory setting and delivered in a completed state to the site allowed the company to save time and money.
US crude supplies surged by 21.6 million barrels last week, compared with analyst expectations for a 1.3-million-barrel increase, the Energy Information Administration reported. However, gasoline and distillate inventories plummeted by 13.6 million barrels and 9.7 million barrels, respectively, as a deep freeze ground Texas refining activity to a near halt.
A decline in gasoline inventories due to winter storm-related disruptions to US Gulf Coast refining activity, coupled with soaring demand for the fuel, threatens to push gasoline prices this summer above $3 per gallon for the first time since 2014, according to GasBuddy Head of Petroleum Analysis Patrick DeHaan. There's a risk of localized shortages, but refinery utilization is expected to bounce back ahead of the summer driving season, said PetroNerds President and CEO Trisha Curtis.
Oil and natural gas companies must commit to the clean energy transition if they want to stay relevant in the new energy future, Jennifer Granholm said during her first speech as energy secretary. "The bottom line is this particular growth of clean energy and reduction of carbon provides a huge opportunity, and I'm extending a hand of partnership," Granholm added.
PDC Energy will try to secure approval from Colorado regulators later this year for a drilling program of more than 500 wells in the Denver-Julesburg Basin, which would make it the first operator to test the state's newly-enacted 2,000-foot drilling setback. "If approved, these locations, combined with the company's current DUC and approved permit backlog, represent all projected wells turned to sales through 2026," PDC said.
US shale companies' reluctance to increase spending and production despite higher commodity prices will likely put OPEC in a better position to capitalize on the oil demand recovery and give the cartel a free hand to restore some of its curbed output. Occidental Petroleum President and CEO Vicki Hollub believes US shale production will never return to pre-pandemic levels, citing shale's steep decline rates, the large activity drop and investor pressure.
Texas' school system could lose up to $29 billion in public funding over the next 15 years due to declining revenue from oil and natural gas activities, according to a new report by two nonprofit policy groups, the Center for Houston's Future and Texas 2036. "If we live in a world where we do have low oil prices over a sustained period of time, the impacts could be quite large," said Brett Perlman, CEO of the Center for Houston's Future.
US crude oil stockpiles surged by nearly 7.4 million barrels last week, while gasoline and distillate inventories plunged by 9.9 million barrels and roughly 9.1 million barrels, respectively, according to the American Petroleum Institute.
Industry executives speaking at IHS Markit's CERAWeek energy conference said natural gas can play a crucial role in the fight against climate change and urged policymakers to recognize the fuel's importance. Gas has "done a lot to reduce greenhouse gas emissions in North America," said Enbridge' Michele Harradence, adding, "It is an excellent complement to renewable energy and provides low cost reliable backup needed to support growth of renewable infrastructure."
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