Industry Update

Post date: Mar 2, 2015 5:28:39 PM

Update on the Keystone XL

On February 11, the House of Representatives passed its 11th bill approving the long-delayed Keystone XL pipeline. It has ignited a debate that has become a focal point in Washington. Supporters claim it will improve U.S. energy security while creating thousands of jobs. On the other hand, environmentalists say it's a threat to the environment. They emphasized that the process of extracting oil from the oil sands in Alberta releases more greenhouse gases than traditional oil drilling. The White House opposes the bill because it circumvents the administration's review of whether or not Keystone XL is in the national interest. On February 24, President Obama vetoed the XL pipeline.

Wolf to Restore Ban on New Gas Drilling Leases

Governor Tom Wolf plans to sign an executive order ending the extraction of natural gas from rock buried deep beneath Pennsylvania's state parks and forests. He intends to sign this order on Thursday at Benjamin Rush Park in northeast Philadelphia. This order would restore a moratorium on new drilling leases involving public lands. Also, it would supersede an order that former Governor Tom Corbett signed in May 2014 as well as reinstate a ban that former Governor Ed Rendell instituted in 2010. The Marcellus Shale Coalition states that this order is a political move that unnecessarily bans the safe development of natural gas. Conversely, environmentalists praise the move, stating it reflects Wolf's support for strong environmental regulation.

Pipeline Companies Weather Downturn in Prices of Natural Gas, Oil

Although lower natural gas and oil prices are creating challenges for the energy industry, analysts state that drilling and gas production will protect pipeline builders in Western Pennsylvania. Since pipeline companies obtained funding and investment for projects when prices were higher, the falling prices are not hitting the pipeline companies as hard as with some gas exploration and production companies. Despite layoffs and budget cuts in the oil & gas industry, more than 50 pipeline projects are under way, including projects to transport Marcellus and Utica shale gas in 2016 and 2017. Analysts emphasize that the downturn will not affect these projects. Prices for gas liquids such as ethane, propane, and polypropylene have decreased but not as dramatically as dry gas and crude oil, providing support to many companies. Pipeline companies have benefited from higher prices for natural gas liquids. And, liquids continue to perform moderately well and remain profitable despite the downturn.

Source: Young Professional Women in Energy (YPWE) March 2015 Newsletter