Carson Imposes Emergency Ban on All Oil Drilling

Prompted by concerns over hydraulic fracturing, or “fracking,” the City of Carson on March 19 imposed a 45-day ban on all oil drilling activity. The emergency moratorium could be extended for up to two years. It effectively blocks plans by Occidental Petroleum to drill more than 200 wells in the community, which is south of Los Angeles and adjacent to Long Beach.

Occidental has stated repeatedly that it does not plan to use fracking in the planned wells, and that the technique (pumping water, sand and chemicals into a well under pressure to fracture rock around the well bore) would not be effective for the wells. Continue reading

LA Chamber: City Fracking Ban Kills Middle-Class Jobs

Editor’s note: Gary L. Toebben, President and CEO of the Los Angeles Area Chamber of Commerce, provided the following cogent and powerful critique in the Chamber’s blog of the Los Angeles City Council’s vote to halt fracking. I share his view that the Council’s ill-advised decision was based on misinformation and fear, not science.  Dennis Luna, Editor, California Oil and Gas Report.

During the 20th Century, the growth of middle class jobs in Los Angeles and Southern California was fueled by oil, manufacturing and construction. Today, all three of these industries are under attack by new regulations and a not-in-my-back-yard mentality, which together are depleting the number of middle-class jobs in these sectors.

Last Friday, the Los Angeles City Council took another step in this direction by directing the City Attorney to draft a moratorium on hydraulic fracturing (fracking) and other commonly used drilling techniques.

Jobs related to oil drilling are good middle class jobs and are often union, paying an average of $80,000 per year.

Oil drilling standards are set and regulated at the state level and California has the highest drilling standards in the nation. California Senate Bill 4 authored by prominent environmentalist State Sen. Fran Pavley and signed into law in 2013 by Gov. Jerry Brown, further sets out a process to create an even broader set of regulations and protections for our environment, while still allowing our state to take advantage of domestic oil and gas resources that create jobs, generate tax revenue and provide the energy our businesses and residents need. Continue reading

LA City Council Votes To Ban Fracking

February 28, 2014 – The Los Angeles City Council voted unanimously on Friday to ban hydraulic fracturing, acidizing, gravel packing and other well stimulation techniques until the council decides that state and federal regulations adequately protect the city’s residents from the alleged risks associated with these methods.

The Council’s motion would affect “companies conducting fracking within the City or in areas providing drinking water to the City,” requiring them to “mitigate the effects on climate change, protect environmental quality and natural resources, [and] promote community awareness.” It would allow government access to and testing of chemicals used in well stimulation, regulate wastewater disposal, and require disclosure and testing of treated wells.

When the moratorium is enacted, Los Angeles would become the largest city in the nation to ban fracking, and the first oil-producing city in California to do so, said Rock Zierman, chief executive of the California Independent Petroleum Assn. Continue reading

Occidental Petroleum to Split Off California Business

Occidental Petroleum Corporation (NYSE:OXY) announced on Friday that it will separate its California operations into an independent, separately traded company. The new California company, whose name was not announced, will have 8,000 employees and contractors and will establish its headquarters in the state.

Occidental said the new company will be California’s largest natural gas producer and the state’s largest oil and gas producer on a gross-operated barrels of oil equivalent basis. It will be the largest holder of oil and gas mineral acreage in the state, with approximately 2.3 million acres and major operations in Los Angeles, San Joaquin, Ventura and Sacramento. Continue reading

Obama On Energy Policy

By Olman Valverde

President Obama’s references to energy policy during Tuesday evening’s State of the Union speech indicated that he remains committed to an “all-of-the-above” approach to energy policy. The President offered words of support for environmentalists, climate activists, the natural gas industry and solar.

For the oil industry, however, the President called for a change to tax policy that would reduce support for fossil fuel production, that is not being well received by industry. It is also far from clear that there is political support for this proposed change.

The President acknowledged the benefits to the U.S. economy from the production of natural gas. At the same time, it was clear from his comments that climate change will continue to dominate the discussion of fossil fuel energy.

One potential positive sign for the oil industry was that President Obama did not mention or directly attack hydraulic fracturing, the key reason for the growth in domestic energy and its consequent significant benefit to the American economy. However, his reference to “if extracted safely” indicates an awareness of the concerns of environmentalists.

Continue reading

U.S. Oil Production Up Nearly 1M BPD

January 24, 2014 – Oil production in the United States rose by 992,000 barrels per day in 2013, a record increase, according to the International Energy Agency.

Production averaged 7.5 million barrels per day through the year, rising to over 8 million barrels daily in November and December, according to the Paris-based research organization. The increase was mainly due to production from shale plays. The IEA said it expects production to continue to rise in 2014, to 8.3 million BPD. Continue reading