January 2015

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On Wednesday, January 28, as required by the Outer Continental Shelf Lands Act, Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management (BOEM) Director Abigail Ross Hopper announced the next step in the development of our nation’s Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022. The Draft Proposed Program (DPP) includes 14 potential lease sales in eight planning areas – 10 sales in the Gulf of Mexico, three off the coast of Alaska, and one in a portion of the Mid- and South Atlantic, which includes areas off the coast of Virginia, North Carolina, South Carolina and Georgia. (more…)

Oil prices surged following Saudi Arabia’s Royal Court announcement of the death of King Abdullah on Friday. Brent crude climbed as much as 2.6 percent, while West Texas Intermediate jumped 3.1 percent, following the announcement. It is yet to be seen whether Saudi Arabia, OPEC’s largest oil producer, will change its policies with respect to its oil output, but many analysts do not expect Saudi’s oil policies to change with the crowning of King Abdullah’s half-brother, Crown Prince Salman. In fact, Bloomberg reports that King Salman announced he will maintain the policies of his predecessor and that Saudi Oil Minister Ali Al-Naimi will remain in his post. (more…)

The last six to seven months have seen an approximate 70 percent drop in crude oil prices, from $115 per barrel in June to just $45 as of January 14. There are multiple factors contributing to the significant drop in price, one of which is the United States’ new status as the world’s largest oil producer, increasing its oil production by 95 percent in the last six years through the use of horizontal drilling and hydraulic fracturing. Because the country now imports significantly less oil than it had previously, it has created an excess supply. Other oil-producing countries are not willing to reduce their own production to reduce the supply and increase the demand, thus restoring the fallen price. The consequences of falling oil prices are as legion as the causes, including the cancellation of oil and natural gas projects, the layoff of oilfield workers, a decline in the number of oil rigs and serious economic disruption in countries like Russia and Iran. (more…)