Last updateMon, 25 Mar 2019 8pm


BLM Has Record Year in Oil & Gas Lease Sales

The Bureau of Land Management (BLM) state offices generated $1.1 billion from oil and gas lease sales in calendar year 2018, an amount nearly equal to the BLM’s budget for Fiscal Year 2018, and the highest-grossing year on record, nearly tripling what had been the agency’s highest year ever in 2008, which generated approximately $408 million. In 2017, oil and gas lease sales generated $358 million. 

U.S. NGPL Production Continues to Grow

In EIA’s Annual Energy Outlook 2019 reference case, natural gas plant liquids (NGPL) production grows by 32% between 2018 and 2050 to 5.8 million barrels per day (b/d). Most of the increase in production is in the East, specifically the Appalachian Basin, and the Southwest, specifically the Permian Basin. Given projected crude oil and natural gas prices, producers are expected to focus on liquids-rich plays, and NGPL-to-gas ratios are highest in these areas. In addition, increased petrochemical feedstock demand spurs higher ethane recovery. 

U.S. Expands Role as Leading Ethane Exporter

U.S. exports of ethane have increased from nearly nothing in 2013 to an average of 260,000 barrels per day (b/d) through the first 10 months of 2018, accounting for about one-sixth of U.S. hydrocarbon gas liquids exports. Ethane is a key feedstock for petrochemical manufacturing. The U.S. became the world’s top exporter of ethane in 2015, surpassing Norway, the only other country to ship ethane internationally. In 2014 and 2015, all U.S. ethane shipments went to Canada, but in 2018 the U.S. sent ethane to 10 countries.

The U.S. petrochemical industry, responding to greater feedstock availability and consequent lower prices of ethane on the domestic market, added capacity at existing plants and built new petrochemical steam crackers, resulting in an estimated $200 billion dollars of new investment across the country. 

Trump Strengthens Buy American Preferences for Infrastructure Projects

On January 31, President Trump signed Executive Order 13858 entitled Strengthening Buy American Preferences for Infrastructure Projects. Executive Order 13858 is designed to strengthen the “Buy American principle” for Federal infrastructure spending by encouraging Federal funding recipients to use more American-made products in their infrastructure projects.

According to Kelley Drye & Warren, the Executive Order directs federal agencies to encourage federal assistance recipients to use – to the greatest extent possible – iron, steel and manufactured products in projects receiving the federal assistance, though it falls short of mandating they do so. 

U.S. Chemical Production Ends 2018 on a High Note

According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) rose by 0.6% in December, following a 0.3% gain in November and a 0.4% decline in October. During December, chemical output rose across all regions, with the largest gains in the Ohio Valley and Southeast regions.

Chemical production was mixed over the three-month period. There were gains in the production three-month moving average output trend in plastic resins, organic chemicals, synthetic rubber, coatings, adhesives, pesticides, other specialty chemicals, consumer products and manufactured fibers. These gains were offset by declines in the output of fertilizers, inorganic chemicals, and synthetic dyes and pigments. 

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