Oil Export Ban May Hurt Economy

March 30, 2015 Elizabeth Alford

U.S. crude production reached record levels in 2014 and the growing surplus has many questioning why a 40 year-old oil export ban is still on the books.

The export ban on all petroleum products was imposed during the 1970s as a way for the government to control prices during a time of scarcity. But times have changed and since 2008, U.S. crude oil output has increase by 81%. This record production is beginning to overtake the industry's ability to economically process these growing volumes and producers and analysts are raising their voices to advocate for a repeal on the anachronistic law.

“Reporting to the Senate Committee on Energy and Natural Resources, IHS Vice President, Ambassador Carlos Pascual testified “The conditions that justified the crude oil export ban in 1973 no longer apply. More importantly, continuation of this ban hurts American consumers, causes an unnecessary drag on American productivity, and does not let the United States exploit fully the national security benefits from our energy resurgence.”

Earlier this month, IHS issued a report on the implications of the current ban and concluded that lifting the export ban could create hundreds of thousands of additional U.S. jobs and add billions to the U.S. economy.

The report goes on to say that eliminating the ban will have far-reaching consequences for the U.S. economy including:

Further increases in domestic oil production
Lower gasoline prices
964,000 additional jobs
Benefits to manufacturing and service-related sectors in every state
Strengthening national security and America’s position in the world

Read more at ihs.comPhoto: © Hramovnick

Halliburton Closing Minot Facility

March 26, 2015 Elizabeth Alford

Beginning April 1st, Halliburton will no longer have a presence in Minot, North Dakota. A spokesperson confirmed Tuesday that the company will suspend operations and close the facility, transferring employees to their Williston and Dickinson locations.

This is the latest in a string of announcements from Halliburton about their efforts to streamline operations in the face of the current crude pricing downturn. Earlier this year the company reported worldwide layoffs of 6,500 people followed by an announcement that they would close their facility in Regina, Saskatchewan in March.

Related: Energy Giants Announce Layoffs

“Spokesperson Susie McMichae said that “The company continue to make adjustments to its workforce based on current business conditions. We value every employee we have, but unfortunately we are faced with the difficult reality that reductions are necessary to worth through this challenging market environment.”

Harold Hamm Gains More Bakken Acreage

March 25, 2015 Elizabeth Alford

Continental Resources strengthened its position in North Dakota by winning the right to drill on an additional 160 acres located near the Fort Berthold Indian Reservation.

Continental’s Harold Hamm spent 2.3 million for the privilege at a state land auction last Friday, beating out the competition in the last 30 seconds of bidding. The funds from this sale are earmarked for educational uses around the state.

Low oil prices have caused companies to reduce spending for 2015 and order to wait out the pricing situation including EOG, Occidental Petroleum and ConocoPhillips.

Even as Continental announced it would slash its budget by 48%, CEO Harold Hamm remained publicly optimistic about his company's ability to navigate the rough waters.

“Hamm commented that “We concluded 2014 with a strong fourth quarter performance, capping off another year of exceptional production and proved reserves growth (...) We believe that our momentum coming out of 2014 will allow us to grow our production 16% to 20% this year.”

The Bakken continues to be the backbone of Continental’s operations. The company is the largest acreage holder in the Bakken and the second largest oil producer in the region. In February, Continental announced that Bakken production was up 30% over last year and overall output was expected to jump 20% for 2015.

Bakken Oil Field Deaths on the Rise

March 24, 2015 Elizabeth Alford

More Oilfield Layoffs — Oil Field Jobs: the Most Dangerous in America

Working in the oil fields may be lucrative these days, but it is also one of the most dangerous jobs in the country.

According to OSHA, 34 North Dakota workers in the oil and gas and construction industries have died because of work-related injuries since 2012. Eight of these fatalities have happened since October, marking a sharp increase and leading some to speculate that the pricing downturn is making an already dangerous job even worse.

In July, the U.S. Department of Labor's OSHA launched an enforcement program to prevent injuries and fatalities in North Dakota’s high-hazard industries. Since then, crude prices have plummeted, causing some to believe there is a connection between a rough pricing environment and more dangerous work conditions.

“Eric Brooks, OSHA’s area director in Bismarck told the Wall Street Journal, “These are the kinds of incidents that we haven’t seen in a while. With the drop in oil prices, companies may be looking to protect the profit margin by hiring contractors that are not experienced.”

In order to survive the downturn, producers are forced to make tough decisions that may contribute to unsafe conditions in an industry known for 12-hour work shifts, rampant turnover and long stretches without time off.

Since the Bakken boom in 2008, thousands have flocked to North Dakota from all over the country in search of better opportunities and they have not been disappointed. The state boasts the lowest unemployment in the country and all sectors have seen wage increases including upwards of $100,000 for truckers and store clerks who can earn double the minimum wage. But the highest paid work in the oil fields definitely come with greater risk.

“These industries are inherently dangerous, and workers are exposed to multiple hazards every day. Their safety must not be compromised because demand for production keeps increasing,” said Eric Brooks. “Workers are coming to these growing industries to find jobs, not catastrophic injury and preventable death. These employers have a legal responsibility to protect every employee that works for them.”

New Fracking Rules for Public Lands

March 23, 2015 Elizabeth Alford

Hamm Claims Russia Financed Anti-Frack Movement — New Regulations For Fracking on Public Lands

After a four-year process that included over 1.5 million public comments, the Bureau of Land Management (BLM) finalized new rules on Friday to regulate hydraulic oil and gas fracturing on public lands.

Since 2007, there has been a steady increase in the use of hydraulic fracturing, but the rules to oversee the practice had not been updated in three decades. The BLM began its work to update existing rules in 2010 after growing public concern amidst the shale oil boom that expanded the use of hydraulic fracturing, the technology that extracts oil from the rock.

“Secretary of the Interior Sally Jewell said that “Current federal well-drilling regulations are more than 30 years old and they simply have not kept pace with the technical complexities of today’s hydraulic fracturing operations. This updated and strengthened rule provides a framework of safeguards and disclosure protocols that will allow for the continued responsible development of our federal oil and gas resources. As we continue to offer millions of acres of public lands for conventional and renewable energy production, it is absolutely critical the public have confidence that transparent and effective safety and environmental protections are in place.”

The rules go into effect in 90 days and require the following:

A validation of well integrity in order to protect groundwater supplies
Companies to publicly disclose chemicals used in hydraulic fracturing through the website FracFocus, within 30 days of completing fracturing operations
Higher standards for interim storage of recovered waste fluids from hydraulic fracturing to mitigate risks to air, water and wildlife
Companies to submit more detailed information before fracking to reduce the risk of cross-well contamination

This ruling only applies to development on public and tribal lands and could potentially impact more than 90,000 oil and gas wells and set a precedent for future regulations.

Response to the ruling has been swift, with environment groups applauding this as a necessary first step towards protecting our public lands. But the backlash from the energy industry was just as quick with Independent Petroleum Association of America already filing a lawsuit that challenges the regulation.