An otherwise frustrating 2015 ended triumphantly when the 40-year-old ban on exports of US-produced crude oil ended as part of fiscal 2016 omnibus budget bill. But it still was possible to wonder if the US oil and gas industry was becoming a victim of its own success.
The US oil and gas supply outlook still remained favorable, and the export ban's removal meant domestic tight oil producers finally could start to pursue overseas customers. With their crude no longer stranded, they could begin to get higher prices.
But it still wasn't certain how deep their hoped-for recovery would be with global markets flooded with crude from Organization of Petroleum Exporting Countries and other producers. Motor fuel prices were at their lowest point in years as 2015 wound down, and it was clear that the public and most policymakers had grown complacent.
It also was apparent that the Obama administration, which was happy to take credit for all that domestic oil and gas production growth since 2008, believes that combating climate change impacts is a higher priority than addressing underlying energy problems.
The president made that clear when he rejected the Keystone XL crude oil pipeline project's cross-border permit on Nov. 6. Energy political dynamics in Canada, from where the crude was to come, changed during the year with elections of liberal leaders, first in Alberta and later in Ottawa.
Obama's action emboldened environmental activists, who intensified their "keep it in the ground" campaigns against any kind of fossil fuel. Within weeks, two US Bureau of Land Management oil and gas lease sales were postponed due to "stronger than anticipated public interest." The few tracts that would have been offered now will be part of sales in 2016.
Pipelines vs. rail
Resistance to new pipeline construction intensified. Opponents also bemoaned the growth of transporting crude by rail and its greater potential problems. There were signs that its overall crude transport share has peaked.
Hearings also will begin on Jan. 5 in Vancouver, Wash., for Tesoro Corp. and Savage Cos.'s proposed terminal that would receive as much as 346,000 b/d of crude by rail. It then would be loaded onto US-flagged marine vessels bound for Alaska, California, and Washington refineries.
US Environmental Protection Agency enforcement initiatives from ground-level ozone to requirements for refiners beyond their plants' fence lines also pose problems. One of 2015's few other victories came when an unprecedented habitat conservation effort by state wildlife agencies, local governments, landowners, recreation groups, and oil and gas producers kept the greater sage grouse from being listed as a threatened or endangered species.
Goodbye to 2015, then. This year won't be dull either.
About the Author
Nick Snow
NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.