Last updateFri, 11 Oct 2019 2pm

USDA Investing $135M in Rural Water Infrastructure Projects

U.S. Department of Agriculture (USDA) is investing $135 million in 49 projects to improve rural water infrastructure in 24 states. USDA is making the investments through the Water and Waste Disposal Loan and Grant program. Rural cities and towns, water districts and other eligible entities can use the funds for drinking water, stormwater drainage and waste disposal systems in rural communities with 10,000 or fewer residents.

USDA had $2.9 billion available for USDA Water and Environmental Program loans and grants at the beginning of fiscal year 2019. USDA will make additional funding announcements in coming weeks.

Permian Midstream Bottlenecks May Choke Output

Rapidly rising production in the Permian basin has led to soaring levels of associated gas, outpacing pipeline infrastructure and placing increasing slowdown pressure on other production streams like crude oil and natural gas liquids, Dr. Eugene Kim, Research Director, Americas Gas, told delegates at the Unconventional Resources Technology Conference in Denver.

Natural gas pipelines hit a takeaway pipeline capacity wall in late March 2019, triggered by reduced shoulder season gas demand and pipeline maintenance. The negative pricing that followed highlighted how midstream constraints can cause market volatility, affecting producer development economics and plans.

U.S. Chemical Production Up for Straight Third Month

According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) rose by 0.2% in June, following a 0.4% gain in May and a 0.3% gain in April. Compared with June 2018, U.S. chemical production was up 1.5% on a year-over-year basis, a weaker comparison than in May. Chemical production was higher than a year ago in all regions, with the largest gains in the Gulf Coast and Northeast regions.

IEA: Oil Demand Growth at Lowest Since 2008

Oil demand growth estimates from the International Energy Agency (IEA) have been cut back sharply. In the first half of 2019, IEA reports an increase of only 0.6M b/d, with China the sole source of significant growth at 0.5M b/d. Two other major markets, India and the U.S., both saw demand rise by only 0.1M b/d. The U.S.-China trade dispute remains unresolved, and in September new tariffs are due to be imposed. Tension between the two has increased further this week, reflected in heavy falls for stock and commodity markets.

Texas Upstream Industry Facing “Headwinds”

The Texas upstream (exploration and production) oil and gas economy is in a mild state of contraction midway through 2019, according to Karr Ingham of the Texas Alliance of Energy Producers and the creator of the Texas Petro Index.

Ingham said there are numerous headwinds to expansion at the midway point in 2019 including sluggish crude oil prices, the natural gas supply glut which is hampering further crude oil production development in Texas, the imposition of steel tariffs adding direct industry upstream costs, and the current trade environment which is slowing national and global economic growth.

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