Preparing

With the final pollution standards for the oil and natural gas industry due to be issued within days, the industry is hoping for the best but preparing for the worst. An official with the American Petroleum Institute (API) said the group hopes the rule will be “reasonable” and “achievable,” while at the same time stressing that industry does not oppose the Environmental Protection Agency’s (EPA) efforts to reduce emissions from oil and gas operations.

A majority of states, including many deeply involved in shale development, are not preparing for the ways a changing climate might impact future water supplies, according to a new report from the National Resources Defense Council (NRDC).

As gasoline prices flirt with the $4/gallon level, the Senate majority is preparing to square off with Republicans over stripping major producers’ oil and natural gas subsidies.

As gasoline prices flirt with the $4/gallon level, the Senate majority is preparing a showdown with Republicans over rescinding major producers’ oil and natural gas subsidies.

El Paso Corp., which is preparing for a takeover by Kinder Morgan Inc. (KMI) and a blockbuster deal to sell its exploration unit, said fourth quarter profits more than doubled. The natural gas pipeline franchise also reported a solid performance, lifted by rising volumes from the Marcellus Shale. A consortium of private equity investors led by Apollo Global Management LLC late last month agreed to buy the exploration business, EP Energy, for about $7.15 billion (see NGI, Feb. 27). The KMI deal and the sale both are expected to close by the end of June (see related story). Beyond the big deals, El Paso’s net profits reached $185 million (24 cents/share) in 4Q2011, compared with $62 million (9 cents) in the year-ago period. After adjusting for the impacts of financial derivatives and other one-time charges, the company earned 28 cents in 4Q2011, versus 20 cents in 4Q2010. Net income in 2011, which was impacted by derivatives losses, fell to $141 million (18 cents/share), versus $721 million ($1.00) for 2010. Throughput for the Pipeline Group, including equity investments, rose 8% in 4Q2011 from a year earlier, primarily because of higher Marcellus Shale volumes on Tennessee Gas Pipeline. The Pipeline Group earned $417 million in 4Q2011, compared with $439 million in 4Q2010. E&P production volumes rose 11% from a year earlier to 880 MMcfe/d; the year-end production exit rate exceeded 900 MMcfe/d.

Wyoming is preparing a petition to the U.S. Supreme Court seeking a hearing of the state’s challenge to the federal “roadless rule,” which potentially has an impact on oil, gas and future mineral development on federal lands (see Daily GPI, Dec. 7, 2011). Gov. Matt Mead said he decided to seek high court review following the Tenth Circuit Court of Appeals denial of Wyoming’s petition for an en banc court rehearing in the case, which Mead has maintained “raises legal questions of exceptional importance.” The Tenth Circuit reversed of an earlier Wyoming federal district court injunction against the U.S. Forestry Service’s designation of additional wilderness areas through the roadless rule, and the state continues to argue that the federal forestry agency’s actions circumvented Congress, which is the only legitimate source of wilderness designations. “The roadless rule has seriously impacted Wyoming, our people, our industries and the health of our forests,” Mead said. “Given the consequences, it is important to ask the Supreme Court to hear this case.”

EQT Midstream Partners LP, a unit of Appalachian producer EQT Corp., is preparing to launch a public offering as a master limited partnership (MLP). The initial public offering (IPO) is expected to raise up to $250 million.

Ohio Gov. John Kasich is reportedly considering raising severance taxes on oil and natural gas, new taxes for the extraction of natural gas liquids (NGL) and a new impact fee on oil and gas operations.

As President Obama was preparing to deliver a major jobs speech to the nation Thursday night, the energy industry weighed in with a study showing more than 1.4 million new jobs, $800 billion in additional Treasury revenue, and 10 million bbls of additional daily oil and natural gas production by 2030 could be added with more flexible federal rules.