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Montalbano B.,Energy Policy Research Foundation Inc.
Oil and Gas Journal

Increasing US production of unconventional oil and gas, alongside steadily growing Canadian oil sands shipments to US refiners, provides the US economy with the potential for a sustained renaissance in the production of refined petroleum products. US Gulf Coast refiners shipped more than 3 million b/d of refined products to world markets as far as Brazil and Europe in October 2011. Although US East and West Coast markets continue to import refined products, the rising shipments from Gulf Coast refiners moved the US into a position as a net exporter of 1 million b/d of finished petroleum products. Purchased natural gas often comprises at least 25% of a refinery's fuel input, and lower natural gas prices reduce operating costs and increase margins in a business known for stiff competition and low margins. Outside the Middle East, most international refining centers face considerably higher fuel costs. Source

Pugliaresi L.,Energy Policy Research Foundation Inc.
Geopolitics of Energy

The National Petroleum Council (NPC) has issued an extensive report on the North American potential to expand oil production in response to a 2009 request from US Secretary of Energy Steven Chu. The proposed pipeline is an expansion of TransCanada's current Keystone pipeline network and will include sufficient capacity to carry both Canadian oil sands production and up to 100,000 b/d of crude oil from the surging production now taking place in North Dakota, largely from the Bakken formation. Technical and environmental reviews of the project have been underway in Canada and the US since 2008. The project required an environmental assessment under a federal law called the National Environmental Policy Act (NEPA). Although Canada would gain some risk-diversification by opening up sales to markets outside of the US, on balance, both the US and Canada would lose an opportunity for expanded trade between two stable and reliable allies in which long-term supply arrangements are assured. Source

Curtis T.,Energy Policy Research Foundation Inc. | Ware T.,Energy Policy Research Foundation Inc.
Oil and Gas Journal

Public concerns about flaring of natural gas have led to suggestions that the practice be prohibited in booming North Dakota. Policies on flaring must weigh prospective losses against any gains in environmental protection and saved gas. A decision to prevent flaring would have to be based on the conclusion that the environmental benefits outweigh the economic costs of delayed oil production. Operators decide to flare gas when doing so enables them to generate the more-valuable crude stream until equipment is installed to capture associated gas. Millions of dollars have been deployed for natural gas infrastructure, and large outlays are expected over the next several years. Despite the large growth in gas capturing, gathering capacity has failed to prevent flaring. Regulations in North Dakota allow companies to flare gas from an oil well for up to 1 year before being forced to shut in the well, pay royalties, or connect gas output to gathering lines and facilities so it can be used for on-site power or sold. Source

Harbison S.,Energy Policy Research Foundation Inc. | Montalbano B.,Energy Policy Research Foundation Inc. | Pugliaresi L.,Energy Policy Research Foundation Inc.
World Oil

The government of Iraq held a competitive auction for the rights to develop 60 billion bbl of proved crude oil reserves across 10 major fields in 2009. The US Energy Information Administration estimates Iraq's proved reserves at 115 billion bbl, ranking the country third in proven reserves behind Saudi Arabia and Iran. Furthermore, before it was dismantled in 1987, the Iraq National Oil Company (INOC) had done evaluations of its reserves on several occasions over several decades. The Iraqi government expects to receive over 95% of total revenues generated by the auctioned fields. This has already diffused early political opposition to the auctions as proposed. More than 40 companies were prequalified for the auction's first round in mid-2009. The initial auction did not go well. It was clear that the government and the companies had widely different perceptions of the contracts' value. Source

Harbison S.,Energy Policy Research Foundation Inc. | Montalbano B.,Energy Policy Research Foundation Inc. | Pugliaresi L.,Energy Policy Research Foundation Inc.
Oil and Gas Journal

Oil companies are investing heavily in Iraq in order to boost their oil production goals. Announcements from operators of three major field-development projects, mainly BP, ExxonMobil, and Eni, confirmed that they had achieved or exceeded contractual targets. The establishment of the government of Nouri al-Maliki enabled several of Iraq's most senior oil professionals to write an oil law by early 2007 that could serve as a legal basis for oil development. The auctions were seen to be politically risky and unlikely to succeed. Terms had to be tough to accommodate the deep political aversion to foreign control of Iraqi oil. Iraq's goals do not match the efficiency-focused approach that major oil companies take toward large projects. Six of the world's eight largest international oil companies participate in the Iraqi projects, four as operators. Source

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