Energy In-depth: Big Oil’s Big Troubles

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NEW YORK TIMES: BIG OIL HAS BIG TROUBLES – Most of the nation’s so-called major oil companies recently completed their second quarter earnings reports and the news is not good. The nation’s four largest integrated oil firms, ExxonMobil, Chevron, ConocoPhillips and Occidental Petroleum, all saw profits well below a year ago and have responded by cutting back on spending, jobs or both.

According to the New York Times, the long decline in oil prices is hitting American oil companies where it hurts and forcing them to scale back investments in their production that would otherwise drive future growth.

A week ago, Exxon Mobil and Chevron posted their worst quarterly results of the current decade as oil and natural gas prices continued to plunge. Click here to read the Times story to learn how Big Oil is dealing with the worst downturn in a decade.

EPA ISSUES STATE CARBON EMISSION RULES, GOV. HUTCHINSON OPPOSES PLAN: The federal Environmental Protection Agency on Monday released its final rules on President Obama’s far-reaching and controversial “Clean Power Plan,” putting the nation on track to cut carbon pollution from the power sector 32% below 2005 levels by 2030.

EPA officials said the plan takes into account the more than 4.3 million comments received from states and stakeholders across the country following the first draft on June 2, 2014, and sets “common sense” achievable state-by-state goals to cut carbon pollution from existing coal-fired power plants 32% below 2005 levels by 2030. Read what supporters and opponents had to say here.

RUSSIA OVERTAKES U.S. IN CRUDE OIL PRODUCTION ARMS RACE: Russia has overtaken the U.S. as the world’s largest producer of crude oil and the second-largest producer of dry natural gas, according to the U.S. Energy Information Administration. Russia moved to the top position after the U.S. leapfrogged the former Soviet Union Republic and Saudi Arabia a year ago to take the top spot.

U.S. production, which was vaulted to the top largely by shale play drilling in Texas and North Dakota, has declined from a year ago as drillers have cut capital spending because of weak crude prices and the decades-old ban on oil exports.

Meanwhile, hydrocarbons play a large role in the Russian economy, as revenue from oil and natural gas production and exports accounts for more than half of Russia’s federal budget revenue. However, recent international sanctions on Russia, coupled with low oil prices, have put pressure on the Russian economy.

Russia exported more than 4.7 million barrels per day of crude oil and lease condensate in 2014, based on data from the Federal Customs Service of Russia. Countries in Asia and Europe received more than 98% of Russia’s crude oil exports. Asia accounted for 26% of Russia’s crude oil exports, and Europe — which depends on Russia for more than 30% of the region’s oil supply — accounted for 72% of Russian crude oil exports. Russia’s economy largely depends on energy exports: oil and natural gas revenues accounted for 68% of total export value in 2013.

MURPHY USA PROFITS FALL 64% AS UP-AND-DOWN FUEL PRICES CUT RETAIL MARGINS: Murphy USA Inc.’s second quarter earnings fell well short of expectations as volatile crude oil and gasoline prices cut into retail margins and overall sales, company officials announced after the close of market on Wednesday.

NATION’S FIRST OFFSHORE WIND PROJECT NOW UNDER CONSTRUCTION: As part of President Obama’s Climate Action Plan to develop clean energy sources and cut carbon pollution, U.S. Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management (BOEM) Director Abigail Ross Hopper recently celebrated the U.S.’ first commercial scale offshore wind farm.

The Deepwater Wind project is constructing a five-turbine, 30-megawatt wind farm in state waters about three nautical miles southeast of Block Island, off the coast of Rhode Island.

At 589 feet above sea level, the turbines will be among the tallest in the world. The project, scheduled to be online in 2016, is expected to power about 17,000 homes. The facility will provide electricity directly from the wind farm to Block Island.

Because the island uses only 1 megawatt of power in the off-season and 4 megawatts in the summer peak season, the remaining 90 percent of the energy produced during the off season will be sent to other state customers via a 25-mile bi-directional submerged transmission cable between Block Island and the Rhode Island mainland.