A judge has ruled against the state of North Dakota in a lawsuit brought by an oil company over a gas royalty dispute.
In a case being closely watched by the industry, Northwest Judicial District Judge Robin Schmidt ruled in favor of Newfield Exploration, which sued the state and the Board of University and School Lands last year.
Newfield and the North Dakota Department of Trust Lands have been in a dispute over the interpretation of the state’s oil and gas leases. The department has alleged that Newfield and other companies have been underpaying the state for royalties on natural gas.
In response to a "concerns notice" from the department, Newfield filed a lawsuit in McKenzie County seeking a judge to declare the company has properly paid gas royalties and does not owe the state additional payments. The case focused on how the royalty is calculated when gas is sold to an unaffiliated third party, such as a gas processing plant.
In an order dated Thursday, Schmidt ruled in favor of Newfield, saying the lease requires Newfield to pay the state based on the gross proceeds it receives from the sale of gas. Schmidt wrote that the state’s argument that Newfield is required to pay based on what a third party receives for the processed gas “strains the language beyond reason and this court is not persuaded.”
The EU announced last week that they will now allow soybeans grown in the United States to be used for biofuel in the EU. This move came as part of a campaign to improve trade relations with the United States. The European Commission’s statement stipulates that the allowance of U.S. soybeans for use in biofuels will be valid until July 1, 2021, with a possible extension if the deal meets the sustainability criteria set by the EU in the future (2021-2030).
This is not the first that the step the EU and U.S. have taken to boost trade in the last year. In July, the Trump administration agreed not to place a tariff on European Union car imports. At that time, the two economic powers were already discussing the issue of soybeans as part of a potential no-tariff deal that also included non-auto industrial goods and liquified natural gas (LNG).
Change of heart for headquarters plans: The high-stakes Corporate Incentive Game just became tougher to play. Two of the most prominent headquarters deals of this century took major turns today, twists that will influence the ways in which many state and city leaders handle public incentives for years to come.
First, the New York headline: Amazon just bailed on its HQ2 plans for Queens amid an uproar over a roughly $3 billion package promised by state and city officials. The Seattle-based retail giant will go ahead with the other half of HQ2 in the D.C. area, put more jobs in Nashville, and expand other outposts. (Boston is among the cities that could be poised to land more Amazon jobs.)
Then, the Boston bombshell: General Electric made public its decision to sell its future headquarters property in Fort Point, and scale back its plans for the site. Instead of 800 jobs, there will be around 250. No shiny, 12-story waterfront tower -- at least not for GE. Instead, we get a more modest headquarters on the Channel: The industrial company will lease space in two brick buildings, and move in this summer from temporary offices nearby.
GE, a neighbor of Amazon’s in Fort Point, made some big promises when it agreed to move here three years ago from Connecticut. But the company’s situation has changed dramatically; thrifty new CEO Larry Culp is downsizing and divesting, the better to improve profits and restore investors’ shaken faith in the beaten-down stock. It seemed like nearly everyone had expected Culp to pare back the HQ.
The Baker and Walsh administrations also made promises back then: $120 million in state infrastructure funds for GE’s Fort Point property, and up to $25 million in city tax breaks. GE is now pledging to fully reimburse MassDevelopment for the $87 million in state funds that were spent so far. (Both GE and MassDevelopment own portions of the site.) And GE says it won’t take a dime in tax breaks from the city.
Relocation specialist John Boyd says he has never witnessed so much contentiousness over the issue of tax incentives as he’s seeing today. (The back-and-forth about Foxconn’s fate in Wisconsin is another example.) The New Jersey-based consultant sees an increasingly populist zeitgeist among politicians -- in part because of concerns about income inequality, the gulf between the haves and have-nots.
But Boyd also expects tax breaks and other incentives will continue to play important roles in corporate expansion decisions, particularly in high cost states such as New York and Massachusetts. For example: MassMutual and Wayfair won massive tax incentive packages within the past year from Massachusetts officials -- valued at $46 million and $31 million, respectively -- in return for aggressive job growth.
These kinds of deals could get more scrutiny in the months ahead. Boston City Councilor Michelle Wu just introduced a proposed ordinance this week that would create new requirements for corporate handouts. And Jamie Eldridge, a vocal tax-incentive foe in the state Senate, vowed to press for reforms on Beacon Hill.
A few dozen protesters marched in the snow outside GE's big event back in April 2016, when the company previewed its move to Boston’s business community. They were a bit of a ragtag bunch, easily discounted by the well-dressed power players convening upstairs in the State Street tower. But these kinds of activists are getting increasingly hard to dismiss.
Each time a politician agrees to a major tax credit package or another kind of subsidy, a political calculus is made -- the economic benefits will be worth the sacrifice, they will outweigh any backlash. That math could get trickier now. The changes at GE and Amazon could prompt public officials to be more cautious the next time they decide to dip into that well.
| $54.47 | 2/14/2019 | 02/14/2018 | 02/14/2017 | 02/14/2016 | 02/14/2015 |
|---|---|---|---|---|---|
| Active Rigs | 65 | 57 | 36 | 41 | 137 |
New Mexico boasts $2.2 billion in oil revenue for 2018.
New Mexico received US$2.2 billion in revenues from oil production last year, data from the state’s Tax Research Institute showed. This was a 26-percent increase on the year, or US$465 million. The total amount represented 32.3 percent of the New Mexico State General Fund recurring revenue.A reader wondered how that would compare with oil and gas revenue for North Dakota.I didn't want "to go there" because I assume there are many different ways to measure that statistic. But since I was asked, here goes.
Thirty percent of total revenue derived from taxes on oil and gas production or extraction must be transferred by the State Treasurer to a special fund in the state treasury known as the Legacy Fund. The Legislative Assembly may transfer funds from any source into the Legacy Fund and such transfers become part of the principal of the Legacy Fund.
Taking advantage of this authority, the legislature enacted language which provides additional deposits to the Legacy Fund from the Strategic Investment and Improvements Fund (SIIF) once a $300 million unobligated balance is met. This provision resulted in additional deposits to the Legacy Fund totaling $148.7 million in the 2011-13 biennium and $200.2 million in the 2013-15 biennium. This provision was removed from law in 2015 by the 64th Legislative Assembly.I don't know if New Mexico has something similar to North Dakota's Legacy Fund.
Global oil demand will prove resilient over the next two decades even if ambitious targets set in the Paris climate change accord are met and the adoption of renewable energy is “off the charts,” according to BP’s annual energy outlook. I
In a “rapid transition” to a lower-carbon world, set out by the UK oil and gas company on Thursday, demand for crude would only drop 20 per cent by 2040. The scenario included the most efficient use of energy by industry and buildings, increased electrification of transport and radical policies to clean up the power sector.
“Oil is playing a major role in the energy system out to 2040 . . . even with renewables off the charts,” said Spencer Dale, BP’s chief economist. “The level of understanding about the arithmetic on some of this stuff is not as high as it could be.”Exxon has been saying this for decades. By the way, that BP story above -- that seems like a shift in editorial policy from BP. For the past several years BP has been beating the drum for renewable energy.
U.S. crude oil, NGL and gas markets have entered a new era. Exports now dominate the supply/demand equilibrium. These markets simply would not clear at today’s production levels, much less at the flow rates coming over the next few years, if not for access to global markets. This year, the U.S. may export 20-25% of domestic crude production, 15% of natural gas and 40% of NGLs from gas processing, and those percentages will continue to ramp up. What will this massive shift in energy flows mean for U.S. markets, and for that matter, for the rest of the world?
Massachusetts lost 1,320 solar jobs last year, trailing only California, as the industry suffered its second straight year of falling employment, according to the Solar Foundation's annual jobs census. Massachusetts also fell to third among states in solar jobs, with 10,210, ceding the spot to Florida, which added 1,769 jobs to bring its total to 10,358. The report said installations of solar panels in Mass. were held back by the introduction of demand charges, the minimum price that solar panel owners pay to utilities per month, and uncertainty surrounding the state's SMART program, a newer form of state-sanctioned subsidies to reimburse solar panel owners that is somewhat less generous than a previous program. -- s/ Chesto, over at The Boston Globe.
The discovery was esoteric compared to other milestones of modern physics. If Feynman, Gell-Mann, Marshak, or Sudarshan had not made it in 1957, others would have soon after. Ye to Feynman it was as pure an achievement as any in his career: the unveiling of a law of nature. His model had always been Dirac's magical discovery of an equation for the election.In a sense, Feynman had discovered an equation for the neutrino."There was a moment when I knew how nature worked," he said. "It had elegance and beauty. The goddamn thing was gleaming."To other physicists, "Theory of the Fermi Interaction," barely six pages long, shone like a beacon in the literature. It seemed to announce the beginning of a powerful collaboration between two great and complementary minds.
For Mike Wirth, the future of Big Oil lies at home, under the dusty fields of West Texas.
As he celebrates his first year as chief executive of Chevron Corp., Wirth sees the Permian Basin as a plentiful source of high-quality crude for years to come, but that’s not all. The low break-even costs to pump in the Permian are forcing Chevron to be more efficient everywhere, Wirth said, from the deepwater platforms in the Gulf of Mexico to its liquefied natural gas plants.
In a time of transition, where everyone from politicians to shareholder activists is bashing Big Oil, shale’s success is forging a new reality, Wirth said: Lower your costs, or die.Repeating: The low break-even costs to pump in the Permian are forcing Chevron to be more efficient everywhere. And correct me if I'm wrong, but I believe it's less expensive to drill in the Bakken than in the Permian -- and oh, by the way -- oil produced per rig in the Bakken is two to three times that of the Permian.
| $53.47 | 2/14/2019 | 02/14/2018 | 02/14/2017 | 02/14/2016 | 02/14/2015 |
|---|---|---|---|---|---|
| Active Rigs | 64 | 57 | 36 | 41 | 137 |
Crude-by-rail (CBR) has been a saving grace for many Canadian oil producers. With extremely limited pipeline takeaway capacity, rail options from Western Canada to multiple markets in the U.S. have acted as a relief valve for prices — there for producers when they need it, in the background when they don’t.
In 2018, we saw a major resurgence in CBR activity from our neighbors to the north, with volumes reaching an all-time high of 330 Mb/d just this past November. But just as quickly as CBR seemed ready for takeoff, the rug got pulled out from underneath those midstream rail providers and traders who had lined up deals and railcars to take advantage of wide price spreads. When Alberta’s provincial government announced its 325-Mb/d production curtailment beginning at the start of 2019, many midstream/marketing and integrated oil companies bemoaned what it could potentially do to market opportunities.
And they were spot-on. Wide price differentials for Canadian crudes to WTI disappeared quickly and eliminated most, if not all, of the economic incentive to move crude via rail, and even by pipeline. In today’s blog, we recap the recent move away from crude-by-rail by some of Canada’s largest CBR players, and discuss the risks of long-term CBR commitments in volatile times. Archived.
