Point: US tops world in oil and natural gas jobs, but many more await

Editor’s Note: In this week’s point/counterpoint, writers address this question: Should the U.S. expand oil and gas projects to boost jobs?

It’s been a summer of good energy news for American consumers: Memorial Day gas prices averaging $2.36 and Independence Day gas prices at 12-year lows.

Americans have been hitting the road in record numbers, reaping the benefits of the U.S. energy revolution.

Just in time for Labor Day, a new report keeps the good news coming, confirming that the U.S. natural gas and oil industry is a blockbuster job creator.

The report from consulting firm PwC reveals that the industry supports 10.3 million U.S. jobs — up from 9.8 million in 2011…

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Has Gulf Of Mexico Production Peaked?

Amid strong indicators that U.S. shale production will reach new heights by the end of 2017, efforts to promote further exploration and production in the Gulf of Mexico, long a center of U.S. energy output, have run into some headwinds.

Some even doubt that Gulf production, much of it from expensive off-shore rigs, can compete in the “lower for longer” price climate that will likely endure through the end of 2017.

With a much longer lag-time for off-shore projects, production in the Gulf of Mexico (GOM) is less sensitive to short-term changes in price. But with the consensus around lower prices growing, it’s possible likely that investment in offshore may taper off, as investment seeks out more reliable returns from shale fields…

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These Major Oil Buyers Are Quietly Prepping For A Supply Shock

Continuing major changes in global oil flows this week. With big consumers like Indian Oil Corp and South Korean refiner SK Innovation making their first-ever purchases of U.S. crude exports.

And in Iran this week, the nation saw its first crude swaps in 7 years — with shipments of oil arriving in Caspian ports from Turkmenistan, to be swapped with shipments sailing out of the Iranian Persian Gulf.

But elsewhere, an even bigger shift in oil markets may be underway. With sources saying one of the world’s largest consuming markets is readying for a major supply dislocation…

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The great Louisiana budget divide

Enough apparently is enough. That can of fiscal-cliff-flavored LaCroix our—ahem—state leaders have been kicking up and down Fourth Street for the better part of two years has finally grown tiresome. Either that or some legislator lost the can in the bushes circling Huey Long’s tombstone.

Regardless, Gov. John Bel Edwards says he’s ready to open a serious can of reform on Louisiana’s byzantine tax code while also bringing much-needed sanity to the insane way our oil-and-gas-addicted state goes about its budgeting business.

It’s a promise we’ve heard before, dating back to the campaign trail of 2015, but now, Edwards says, he’s double-dog-dare serious. Fiscal conservatives in the state…

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Can The Permian Push Prices Down To $40?

Two analyst firms have revised upwards their production growth forecasts for the Permian, expecting oil output there to be 300,000 bpd higher by the end of this year. The firms are none other than Wood Mackenzie, whose analysts expect 300,000 bpd more in Permian output by end-2017—a 200,000-bpd increase to its year-end forecast—and Rystad, which sees the cumulative increase for June-December at 300,000 bpd.

That’s the kind of consensus market players like to see, especially when it comes a couple of days after reports that investors are pulling out from the Permian after Pioneer Resources reported the share of natural gas and gas liquids in its overall output has been rising at the expense of oil. Investors love their crude, after all, and are much less excited about gas…

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Lake Charles: Change comes with challenges

No change, however good, has ever come without a challenge.

The liquefied natural gas industry has already made its mark in Southwest Louisiana in the form of thousands of construction jobs and hundreds of permanent jobs, one reason the region is now the fastest job gainer in the state.

Two LNG facilities — Cheniere Energy’s Sabine Pass LNG and Cameron LNG — are under construction, and Cheniere is already operating. Eight other LNG projects are planned for the area, each bringing its own store of construction and permanent jobs.

More jobs will undoubtedly be a positive thing, raising standards of living for many. But it’s important to keep a few things in mind when considering how job hikes will affect Southwest Louisiana…

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US can boost gas exports, cut global emissions in one fell swoop

Infamously, Donald Trump has called climate change a hoax, but the rest of the world knows better. In fact, the main reason European and Asian nations are interested in importing U.S. natural gas is to displace coal and cut greenhouse gas emissions that cause climate change.

If the Trump administration truly cares about expanding U.S. gas exports, as they claim, they should maximize the competitive advantage that lower-emitting U.S. natural gas has over not only coal, but also over higher-emitting Russian gas.

This means the administration should stop the Environmental Protection Agency’s (EPA) attempt to rollback domestic regulations of methane emissions from gas development, and perhaps use the threat of sanctions against Russian gas pipelines (as allowed under the new Russia sanctions law) to expand U.S. markets…

 

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U.S. Inventory Reductions Probably Not Sustainable

The decline in U.S. comparative inventories since February is the most significant oil market development since prices collapsed three years ago. It means that U.S. demand has exceeded supply for most of the last 5 months. The main cause is lower net imports, not higher domestic consumption, and that is probably not sustainable.

Comparative inventory (C.I.) is the difference between current storage levels of crude oil plus a select group of refined products, and their 5-year average for the same weekly time period (Figure 1). It is an indicator that normalizes seasonal variations in production, consumption and refinery utilization.

 

C.I. is the key to understanding oil prices yet few analysts use or even discuss it. Instead they try to explain price fluctuations by events in the daily news cycle or by simple year-over-year comparisons…

 

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Dear Millennials, Big Oil Is Not Your Enemy

Oil and gas is, apparently, the latest industry that millennials have marked for death. They don’t want to work in the industry because it’s dirty, difficult, and dangerous. Accurate as this may be, that millennial perspective is far from the whole story of oil and gas.

On the face of it, especially to millennials, the oil industry is only about making as much money as possible by pumping and selling as much oil as possible, harming the environment irreparably in the process. But that’s a rather narrow view. It seems all too easy set aside the fact that thousands of everyday products are either entirely or partially derived from petroleum and natural gas.

Yes, that Super Bowl commercial had it right, whether we like it or not. To be fair, some of the products made from oil derivatives do have greener substitutes, but certainly not all—including some important ones such as heart valves and synthetic fibers. And the alternatives are not always rosy either. The alternatives to synthetic fibers happen to be cotton, hemp, wool, and—not to put too fine a point on it—leather and fur…

 

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Our Ports Are Key to Our Energy Revolution

U.S. energy exports are set to hit new record highs as America’s energy revolution fuels a resurgence in global exports.

Now, with the U.S. shipping its liquefied natural gas (LNG) to 23 countries around the world, our country is helping to create a more competitive global gas market.

Just last month, data released by the U.S. Energy Information Administration (EIA) revealed that LNG exports in the first four months of 2017 have already exceeded the total for all of last year, with shipments leaving Cheniere’s Sabine Pass export facility for many of those global destinations…

 

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