The week in energy
OPEC and allies agree to trim production
OPEC and its allies, including Russia, reached a deal to jointly cut oil production by 1.2 million barrels a day and help stabilize sliding oil prices. The Organization of the Petroleum Exporting Countries, led by Saudi Arabia, agreed to reduce production by 800,000 barrels a day, while non-OPEC partners led by Russia said they would cut output by 400,000 barrels. The deal followed steep drop in oil prices from about $76 a barrel to just over $50. Prices jumped by about 5 percent after the deal was made public.
U.S. is now a net exporter of petroleum
The U.S. has become a net exporter of petroleum products for the first time in nearly 70 years as the nation shipped record volumes of crude to foreign markets. The Energy Department said that oil producers exported a record 3.2 million barrels of crude a day last week — more than double the volume of a year ago — while the nation shipped out 211,000 more barrels a day of petroleum products than it imported. It was the first time petroleum exports exceeded imports since 1949.
Massive resources of oil and gas cited in Permian
The Permian Basin's Wolfcamp and Bone Spring formations in West Texas and New Mexico hold the most potential oil and gas resources ever assessed, the U.S. Interior Department said. The Wolfcamp shale and overlying Bone Spring in the Permian's burgeoning Delaware Basin hold an estimated 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas and 20 billion barrels of natural gas liquids, according to the assessment. To put those numbers into perspective, the Delaware Basin's Wolfcamp and Bone Spring plays would hold almost seven times as much oil as North Dakota's Bakken Shale.
Natural gas is in the middle of a hot streak
Natural gas prices have climbed by more than 50 percent over the past two months, meaning higher heating and electricity costs as winter arrives while helping some energy companies in Houston offset profits lost during the recent plunge in oil prices. Natural gas prices have hit their highest sustained levels in four years as stockpiles have dwindled and demand has grown. Whatever savings consumers are realizing from lower gasoline prices are likely to be offset somewhat by higher utility bills.
Tight power supplies forecast for summer
Higher-than-expected demand for electricity coupled with cancellations of planned power generation projects will leave less room for error in the coming summer, according to the manager of the state's power grid. The Electric Reliability Council of Texas is forecasting next summer's reserve margin for electricity, a measure of the cushion between expected supply and demand, will slip to 8 percent from the 11 percent forecast in May. The tight supplies could mean higher electricity prices.
Nominee wins confirmation for FERC seat
The Senate narrowly confirmed Bernard McNamee, policy director at the Department of Energy and a former top staffer to Sen. Ted Cruz and Texas Attorney General Ken Paxton, to sit on the Federal Energy Regulatory Commission. McNamee's nomination drew controversy after a 10-monthold video emerged of McNamee, then with the conservative think tank Texas Public Policy Foundation, calling carbon dioxide "not a real pollutant" and railing against renewable energy, saying it "screws up the whole physics of the grid.”