From:

Subject:
Date:
To:

Douglas Grandt answerthecall@me.com

Follow-up to my September 5 and September 25 letters (Mindy Myers)
October 13, 2015 at 5:01 PM
Mindy Myers (Sen. Warren) Mindy_Myers@warren.senate.gov

Dear Mindy Myers,

Reports of a depressed oil drilling and production industry continue to appear in the media, validating my fears expressed in subject
letters. Four recent articles should give you pause they are attached hereto for you convenience.
Two bills before the Senate (S. 2011 and S. 2012) are based on a presumption that the petroleum industry is vibrant and healthy, but
reports indicate the opposite. Please consider the facts, and request your colleagues and the leadership of the Senate Energy and
Natural Resources Committee (ENR) to hold these bills in abeyance until you have had the benefit of testimony from petroleum industry
CEOs. Please invite CEOs to an ENR hearing and assess their viability in the national interest as cornerstones of the energy bills:
Bit.ly/S_2011_Offshore_Production_and_Energizing_National_Security_Act_of_2015_OPENS
Bit.ly/S_2012_The_Energy_Policy_Modernization_Act_EPMA
Looking forward to your response,
Doug Grandt

Jobs report: Thousands more oil and gas cuts in September

Posted on October 2, 2015 | By Joshua Cain | Bit.ly/FuelFix02Oct15
Weak oil prices continue to hammer an already beleaguered oil and gas workforce in the U.S., with another 8,300 jobs cut in
September, according to Labor Department data released Friday.
The oil field services sector has continued to bear most of those losses; the data showed 7,200 fewer jobs in support activity for
mining, which includes oil and gas as well as other minerals. Job losses in oil and gas extraction slowed last month, but the sector still
saw 1,100 jobs cut.
Overall, the mining industry has 104,700 fewer jobs now than at the same time in 2014.
The U.S. still added 142,000 jobs last month, and the unemployment rate was steady at 5.1 percent. But pain in the energy industry
due to low oil prices may have helped drag down employment growth in the U.S. a Bloomberg survey expected September to see
201,000 more jobs with weakness in oil and gas contributing to an overall slowdown in manufacturing and exports. Next to mining,
which saw the biggest decline of any industry, manufacturing was second with 9,000 job cuts.
The lob losses reflect instability in the price of U.S. crude, which swung from a six-year low of just under $39 to nearly $49 in the final
week of August. Since then, oil prices have slowly fallen o to close at $44.74 on Thursday.
Several oil and gas majors have announced layos in recent weeks: Halliburton confirmed Sept. 23 that it would extend layoffs to
management positions across North America, and Chesapeake Energy said Sept. 29 that it would cut 15 percent of its workforce.
According to energy recruitment firm Swift Worldwide Resources, more than 200,000 workers in the global oil and gas industry may
now have lost their jobs following the collapse in crude prices that began in June 2014.
http://fuelfix.com/blog/2015/10/02/jobs-report-thousands-more-oil-and-gas-cuts-in-september/#35109101=0

Texas shed 28,300 oil and gas jobs since December

Posted on October 1, 2015 | By Rhiannon Meyers | Bit.ly/FuelFix01Oct15
The oil slump has claimed at least 28,300 oil and gas jobs in Texas since December as the industry continues to pare back amid the
worst downturn in years, according to the latest estimates released by an industry group.
Oil and gas employment in the state set a record high in December with 305,000 on the payroll following a rapid hiring spree by energy
companies rushing to extract oil and gas from shale plays across the state, according to data compiled by petroleum economist Karr
Ingham for the Texas Alliance of Energy Producers.
But falling oil prices put an end to industrys job expansion. The number of Texans on the industry payroll has fallen 7.7 percent to
281,600 in August, according to estimates based on Texas Workforce Commission data, which is not seasonally adjusted.
An index developed by Ingham to gauge the health of Texas oil industry continues to slump following the collapse in employment
numbers, the price of oil, the rig count, drilling permits and well completions. The Texas Petro Index, which has measured job numbers,
rig activity and production totals for nearly two decades, tumbled another 10.7 points in August to 235.4. Thats 24 percent lower than
last year.
The continued slide in the monthly index, which has been designed to measure broader economic trends in the states oil and gas
industry, underscores how the industry continues to feel the pain from weak oil prices with no recovery yet in sight, Ingham said in a
statement.
Related: Texas on track to beat 1972 oil production record
Despite the plunging rig count and dwindling number of well completions, the state continues to produce more oil than it did a year
ago, Ingham said. Although the rate of production growth has slowed, Texas in August unleashed 110.5 million barrels of crude onto
the market, or 12.3 percent more than a year ago, placing the state on track to bust its 40-year-old production record this year, Ingham
said.
The Energy Information Administration has revised its production-estimation methodology and now says Texas production likely
peaked in April, Ingham said in a statement. That may be right, but either way Texas production is still significantly higher this year
compared to last, and thats not likely going to change by year-end.
The latest figures by the EIA show that Texas produced about 3.45 million barrels of crude and lease condensate per day in July, an
increase of 7 percent from the same time last year.
The value of that oil has dropped significantly, however. With crude fetching an average of $39.67 a barrel in August, Texas-produced
oil was worth $4.48 billion in August, or 52 percent less than last year, according to the Texas Petro Index.
http://fuelfix.com/blog/2015/10/01/texas-sheds-28300-oil-and-gas-jobs-since-december/#35109101=0

Former IEA chief: Oil will stay below $100 until 2020 because of U.S.
shale boom
Posted on October 13, 2015 | By Bloomberg | http://bit.ly/FuelFix13Oct15

Oil prices wont rebound to $100 a barrel before 2020 to 2025, when U.S. shale production will gradually start to decline, according to
a former head of the International Energy Agency.
Demand for crude in China, India, Southeast Asia and Africa will drive up global prices in the long term, Nobuo Tanaka, who served
for four years as the IEAs executive director, said in an interview in Abu Dhabi. Tanaka left the IEA, an advisory body to the worlds
industrialized nations, in September 2011 and currently works as a professor at the University of Tokyo School of Public Policy.
Price will not go up to a hundred as easily as before, Tanaka said. The shale production in the U.S. will gradually slow down after
2020 or 2025, so again theres a chance of higher prices coming after that.
Brent crude, a global pricing benchmark, dropped 44 percent in the last 12 months and was 20 cents higher at $50.06 a barrel on
Tuesday in London at 12:01 p.m. local time. The Organization of Petroleum Exporting Countries, led by Saudi Arabia, decided on June
5 to keep its crude production target unchanged to force higher-cost producers such as U.S. shale companies to cut back. The
producer group has exceeded its target for 16 consecutive months, data compiled by Bloomberg show.
Built-In Stabilizer
Shale production is a built-in stabilizer, Tanaka said. OPEC used to manage the production to stabilize the price; that was the regime
before but now when OPEC gave up this kind of function, now the shale oil is acting in the market as a built-in stabilizer. These are new
dynamics of the market.
The gap between crude oil supply and demand will continue until the end of the year, and a supply shortfall may develop in the third or
fourth quarter of 2016, he said. Until that time, if the current situation continues, the price will stay as low as the current one.
Iran, the fifth-largest producer in OPEC, is preparing to bounce back from economic sanctions that choked o investment in its oil
industry. The nation could boost output to 3.6 million barrels a day from its current 2.9 million in six months, the Paris-based IEA said in
in its monthly report Tuesday.
Iran has said it will increase oil exports by 500,000 barrels a day within six months of the lifting of sanctions and then double that
increase to 1 million barrels daily. Certainly that eases the market situation and means the oversupply will continue, Tanaka said.
http://fuelfix.com/blog/2015/10/13/former-iea-chief-oil-will-stay-below-100-until-2020-because-of-u-s-shale-boom/#35602101=5

Oil Glut to Stay in 2016 as IEA Sees Slower Demand Growth

October 13, 2015 4:00 AM EDT Updated 7:47 AM EDT | Grant Smith | http://bit.ly/Bloom13Oct15
Global oil markets will remain oversupplied next year as demand growth slows and Iranian exports are poised to recover with the lifting
of sanctions, the International Energy Agency said.

While supplies outside OPEC will decline in 2016 in response to lower prices, demand growth will ease from this years five-year high
amid a weaker outlook for the world economy, allowing the crude surplus to endure, the IEA predicted. Iran could swell the glut if
restrictions on its sales are removed with the completion of a nuclear accord, while Iraq has replaced the U.S. as the biggest source of
new supplies as its output reaches record levels.

The market may be off balance for a while longer, the Paris-based adviser to 29 nations said in its monthly report. A projected marked
slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels -- should international sanctions be eased
-- are likely to keep the market oversupplied through 2016.

Oil rallied above $50 a barrel in New York last week for the first time since July amid expectations that a slump in U.S. drilling and
cutbacks in investment will help whittle away the global supply glut. The advance has stalled as OPEC members boost production,
Chinas economy shows signs of slowing and U.S. oil output remains elevated.

Demand Growth Slows

Global oil demand is growing at the fastest rate since 2010 this year, but the expansion will slow markedly in 2016 as the stimulus from
lower prices fades, said the International Energy Agency.

Global demand growth will revert to long-term trend levels of 1.2 million barrels a day in 2016, down from 1.8 million this year, amid a
softer economic outlook for oil producers such as Canada, Brazil, Venezuela, Russia and Saudi Arabia. Consumption worldwide will
average 95.7 million barrels a day next year, about 100,000 a day less than projected in last months report.

The demand outlook for 2016 looks markedly softer because of downgrades to the macroeconomic outlook and expectations that
crude oil prices will not repeat the heavy declines seen in 2015, according to the report.

Oil prices pared gains after the report, sinking to a one-week low of $46.60 a barrel in New York.

Iran, which plans to revive exports if an agreement on its nuclear program with world powers is completed, could boost output to 3.6
million barrels a day from its current 2.9 million, the agency estimated. This could be added in six months and almost double the
increase in oil inventories projected for next year, the IEA said.

Iraq Supply
Record output from Iraq pushed supplies from the Organization of Petroleum Exporting Countries higher in September, according to the
report. The Middle East nation raised production by 130,000 barrels a day to 4.3 million. Still, severe budgetary strain and ongoing
issues with security and infrastructure are likely to limit supply growth in the near term, the IEA said.

Output from OPECs 12 members increased by 90,000 barrels a day to 31.72 million in September, the highest since July, according to
the report. Production from Saudi Arabia, while slightly lower than August at 10.2 million barrels a day, remained above 10 million for a
seventh straight month.

While the agency boosted estimates for 2016 non-OPEC supply, amid stronger-than-expected output from Russia, Brazil and Canada, it
will still contract sharply next year. Total supply from nations outside OPEC will decline by 500,000 barrels a day, which the IEA said
last month was the steepest drop since 1992. U.S. oil output will fall to 12.56 million barrels a day in 2016, from 12.75 million this year.

Non-OPEC supply growth is disappearing fast, the agency said. Much of the slowdown is in the U.S.

Despite signs that output will ultimately falter, global markets remain oversupplied. Oil inventories in developed nations expanded in
August by double the normal amount, leaving them 204 million barrels above the seasonal average, the IEA said.

The IEA stands out as more bearish on the outlook than OPEC and the U.S. Energy Information Administration, Jens Naervig
Pedersen, an analyst at Danske Bank A/S, said in a report. Global growth concerns should limit upside above the current range in oil
prices, he said.
http://www.bloomberg.com/news/articles/2015-10-13/oil-surplus-to-persist-in-2016-as-iea-sees-demand-growth-slowing