As an update to the Recipe Box, I have been testing out new recipes lately.

Testing recipes means that I am trying out things that I have never attempted to bake before…the risk is high and the reward unknown.  You could end up with a masterpiece or you could end up with the creature from the black lagoon.

For example, I tried a new pound cake recipe that had sweetened condensed milk in it as a secret ingredient; the result was a sunken in disaster contained in my bundt pan.  The secret is out – that ingredient didn’t work! I tried a blonde brownie recipe that ended up more akin to blonde brownie soup for some reason.  It just would not bake up in the middle.  Then I went back to basics and baked a simple cherry pie to make sure that all was right in the world and that I could still bake.  If there is certainty in life in anything for me, it is with pie – sometimes you have to break out a trusted recipe after too much unknown.

When you put the pan in the oven when you are testing a recipe, the future is very uncertain.

This is a lot like the future of coal in Wyoming…

Coal in Wyoming is a lot like flour in your cake. It is, or traditionally has been, the backbone. Take Kemmerer, Wyoming, for example – its future is now uncertain due to its historical reliance on coal. Coal has been a significant factor in Kemmerer’s health and viability historically. A recent article in the Casper Star Tribune entitled, Indebted Coal Firm that Operates Kemmerer Mine Finds New Financing, Still Faces Uncertainty, highlights these issues for coal-reliant communities in Wyoming, like Kemmerer.

The future of coal in Wyoming is obviously unknown due to a number of factors, including market conditions, federal regulation and politics.  In fact, the impact of state politics on the future of coal was discussed in a recent Casper Star Tribune article entitled, Wyoming’s Governor Has Walked a Moderate Path on Coal, Now Candidates are Lining Up to take the Reins.

The other big factor that has an impact on the future of coal is a basic one – financial pressures. A great discussion of the money factor and its impact on coal can be found in the Casper Star Tribune article entitled, Wyoming Coal Newcomer Argues that it Failed to Make Debt Payments Because the Bank Ceased Communications.

What will happen to Wyoming coal?

Your guess is as good as mine, but the one thing we do know is that change is certainly afoot. We discussed the Wyoming Integrated Test Center in our last post, which can be found here.  Big and new things are on the horizon for coal – however, it is the same as when we are testing recipes…we have to just wait and see how it will turn out.

Many of you may not be aware of the happenings in the Cowboy State concerning the future of the energy industry. Wyoming is not just sitting back and allowing market forces to have huge impacts on the state, it is taking steps to be on the forefront instead.  Here are a couple of big things going on in Wyoming.

Carbon Emissions – ITC

A new Wyoming research center is the driving force for change. The Wyoming Integrated Test Center (“ITC”) was dedicated by Governor Mead in Campbell County, Wyoming, last week. Check out the ITC website here.

  • What is the ITC?

Bottom line: It is a big deal – it is a collaborative effort that has the ability to change the future of energy by developing ways we can use power plant emissions.

The specifics: According to the About ITC website, the funding for the ITC came from the Wyoming State Legislature ($15 million), the Tri-State Generation and Transmission Association ($5 million), the National Rural Electric Cooperative Association ($1 million) and Basin Electric Power Cooperative is providing the host site at their Dry Fork Station located in northern Wyoming and additional valuable in-kind contributions (important things like engineers and construction management services). Supporters also include Rocky Mountain Power, Black Hills Power, XPRIZE Foundation and the University of Wyoming School of Energy Resources – the ITC is a true public-private partnership with a shared goal.

The goal is simple yet significant – to develop commercial uses for carbon dioxide emissions. Check out more on the science of this here.

The headline from the Casper Star Tribune says it all, In Unassuming Wyoming, A Quest to Change the National and Global Future of Coal.

Since this project involves coal, obviously it is hotly contested and controversial. Opponents reportedly question the use of taxpayer funds on the ITC and wonder whether the cause is useless because coal is a sinking ship.

Oil and Gas – Secondary Recovery

In addition, secondary recovery in oil and gas operations is a focus of the Cowboy State. The Casper Star Tribune highlighted this focus in its article yesterday entitled, UW Institute Fosters $2 Million of Research into Oil and Gas Recovery in Wyoming. The Enhanced Oil Recovery Institute reportedly, “announced recently that $2.2 million of research is about to roll out in Wyoming.” The plan is to dig deep into figuring out ways to increase secondary recovery and optimize production using new technology in Wyoming’s old wells.

Wyoming is clearly a force for change in the energy industry – there is something to be said for that Cowboy grit and work ethic. Cowboys know when to adapt and when to buckle down to figure out a problem. One thing is true – do not underestimate the Cowboy state.

It is finally Friday. Many of us have had a long week and we are finishing the week strong. We are looking forward to a glass of champagne in our pjs since it is finally the weekend and we made it through the week. Ok, maybe that is just *some* of us.

Back to business before bubbly…

We are not the only thing that is finishing the week strong – oil is up.

Oil reportedly closed at a three-year high today – check out the Wall Street Journal article entitled Oil Closes at Three-Year High: Light, Sweet Crude for May Delivery Settled Up 32 Cents, or 0.5%, to $67.39 a barrel. According to today’s Wall Street Journal article: “Prices have climbed as supply cuts from major oil exporters and strong global demand have helped ease a longstanding glut. Increased geopolitical risk has also put a premium on crude, as production from countries like Iran and Syria has been threatened.”

According to Bloomberg Energy, WTI Crude Oil is at $67.39 per barrel and Brent Crude is at $72.58 as I write this.

The uptick was also discussed in Bloomberg’s article, Oil Posts Biggest Weekly Gain Since July Amid Global Conflict, featured in Oil & Gas 360.

Bottomline – oil prices are up. Good news – champagne Friday. Bad news – the reasons behind the bump in prices.

According to many folks in the know, the jump in prices is at least partially attributable to big-ticket issues that stress us all out, like major potential conflict. IE: the Wall Street Journal article notes supply concerns due to potential conflicts in the Middle East and trade tensions with China and Bloomberg’s article notes “geopolitical tensions from Saudi to Syria boosting prices.”

The jump in prices is also partially attributable to that good ‘ol surplus we had forever finally reducing – it has always been about supply and demand.

Coco Chanel famously said, “I only drink champagne on two occasions: when I am in love and when I am not.” Those of us in the energy industry have a similar mindset when it comes to oil prices – we only drink when prices are up and when prices are down. I am kidding…today, we toast to finishing the week strong.

Today, the U.S. Energy Information Administration (“EIA”) issued its Today in Energy entitled U.S. Crude Oil Production Growth Projected to be Led by Light, Sweet Crude Oil.

We all know that I have a sweet tooth, but we aren’t talking those kinds of sweets today – we are talking light, sweet crude. It is no secret that light, sweet crude oil accounted for the growth in domestic production in recent years – but just how much growth is attributable to lighter crude from tight formations?

According to the EIA’s Today in Energy, “light, sweet crude oil, defined as having an API gravity of 35 or higher and a sulfur content of 0.3% or less” accounted for “nearly 90% of the 3.1 million barrel per day (b/d) growth in production from 2010 to 2017.”

In fact, just last week on April 4, 2018, the EIA issued a Today in Energy entitled U.S. Production of Crude Oil Grew 5% in 2017, Likely Leading to Record 2018 Production. This article discussed the significant increase in domestic crude oil production due to the development of tight rock formations. Specifically, the EIA’s April 4 Today in Energy provides as follows:

“Annual average U.S. crude oil production reached 9.3 million barrels per day (b/d) in 2017, an increase of 464,000 b/d from 2016 levels after declining by 551,000 b/d in 2016.”

“In November 2017, monthly U.S. crude oil production reached 10.07 million b/d, the highest monthly level of crude oil production in U.S. history.”

As I write this, according to Bloomberg Energy, oil prices are pretty steady – WTI Crude Oil is at $63.30 per barrel and Brent Crude is at $68.65 per barrel.

I took this photo while flying into North Dakota a couple of weeks ago – flying high above North Dakota’s Bakken oil play and the mecca of light, sweet crude.

Flying into the Yellowstone Regional Airport in Cody, Wyoming, last week gave me a much-needed dose of the Cowboy State. Cody, a quiet and welcoming cowboy town named after Colonel “Buffalo Bill” Cody, is an amazing gem of the West.

I had a little free time so I stopped into the Buffalo Bill Center of the West for the first time and toured the Whitney Western Art Museum, the Buffalo Bill Museum, the Plains Indian Museum and the Draper Natural History Museum. If you haven’t already been – trust me, it is worth the trip! It is a truly amazing place to get a one of a kind glimpse into the American West.

I haven’t provided you with an update in a while. The trip got me thinking – what is new in the Cowboy State?

Wyoming Rig Count

WOGCC Creates New APD Approval Policy

  • The Wyoming Oil & Gas Conservation Commission (“WOGCC”) recently came out with a new policy for the approval of Applications for Permits to Drill (“APDs”). The WOGCC press release on the new APD policy can be found here. The official WOGCC Memo on Application for Permit to Drill Processing can be found here.
  • This new policy sparked my interest because we have been dealing with the exact same kind of issues here in Colorado when it comes to competing APDs and determining which is first in line. The commissions are being bombarded with APDs – the WOGCC Memo provides that “an unprecedented number of applications for permit to drill” are being received; “the monthly average for APDs received for 2017 was 1,050, which is an increase of 83% compared to the average for 2015.”
  • The new WOGCC policy provides that a basic completeness check will be conducted in order to prioritize the approval process. Simply put, the WOGCC will make sure submitted APDs are complete and contain all required information prior to processing for final approval. Operators cannot file an incomplete APD and expect to have the effective APD just because it was filed first– completeness of the APD is required for priority.

Demand for Energy Jobs Increasing

Emissions Rule Stayed

In sum, there is a lot going on in the Cowboy State!

Behind the Energy Law Today blog is usually one face – me, Melissa J. Lyon. Sometimes we feature guest authors, but most of the time it is just me and I bring you along on this energy and natural resources law journey with me.

Thinking back, I realized I have been writing this blog since 2014 and some of my most-read articles are ones like this one, where I provide you with a real life update of what I have been up to…

I have updated you as to the happenings in the energy sectors of various places I have traveled to (for example, What Fuels Tennessee?, Through the Eyes of the Cowboy State: A Commentary on Wyoming Being Featured in the New York Times, Status Update: The Paris Agreement), I have reported back from conferences and provided insight on great books and industry events, I even share with you how my recipes relate to industry issues (recently – Resilience is Key: Gingerbread and Oil Prices, and my all time fav from back in 2016, It Takes the Right Ingredients: The Recipe for Oil and Gas Economics and the Perfect Pie Have Common Components)…but this time, I have something much more thought provoking to tell you about. This update is about “Thriving in Chaos.”

Enter Corinne Hancock. Earlier this month, Fox Rothschild brought Corinne Hancock in as a speaker and she spoke about “Thriving in Chaos.”

Something near and dear to many of us!

This program truly resonated with me and has made me think about all of the chaotic events that life throws at us – in business, in our personal lives, with our families and with our friends and children – and how we not just survive these times, but we learn to “thrive” in them, as Corinne would say.

As you know, I often write about the price of oil, not to mention that I am an attorney (an often chaotic profession in and of itself!) – chaos is inherent in this biz.  Chaotic is a great word to describe the volatility of the price environment over the past few years. We remember days, not that long ago, when oil was lower than we could imagine, yet many companies found a way to thrive during these difficult times, becoming more innovative and creative with how they approached problems.

As I write this, oil is up according to Bloomberg Markets’ article entitled, “Oil Jumps to Three-Week High as Advancing Stocks Fan Optimism.” WTI Crude Oil is at $63.95 per barrel and Brent Crude is at $67.54 per barrel, according to Bloomberg Energy.

The energy sector is the epitome of “thriving in chaos,” so that is probably why I found Corinne’s program so spot on and insightful. Corinne importantly teaches that, “how we react can be the difference between success and failure.” This is interestingly the one thing that we can control – our reaction.

No matter your chaotic environment, remember that “how we react can be the difference between success and failure.” Check out Corinne Hancock here if you would like more info on her programs!

“Do good things.” I could not tell you how many times my father has told me this – I would conservatively guess he has told me those words about 2 million times in my life.

I have mentioned this for quite some time now – that we need to focus on the good works and how much companies in the energy sector give back to their communities. From fundraisers to urgently responding to incidents of neighboring operators to lend a helping hand, I try to spread the word about the many good works that companies in the energy sector do and highlight the positives that these companies bring to their communities, and the Colorado Oil and Gas Association (“COGA”) is doing the same!

COGA is issuing an industry-wide community impact report – the form for submission can be found here.

What is it?

The goal is that the complete report will reflect industry efforts and employees’ efforts from last year to “highlight industry’s social responsibility and celebrate giving back.” If you know of a good thing a company in the energy sector has done in 2017, I urge you to go online and complete the form submission.

Why is this important?

It is crucial to highlight the good works of people, across all industries. Good spreads more good – I think I once heard that this is called a ripple effect. It reminds me of throwing a rock into a pond – the good continues to ripple out. The impacts of one good act spread and spread. In a time when we focus so much energy on negative things and events, we have to shift to focus on the good.

“Do good things.”

The 2018 Wyoming Budget Session of the 64th Legislature began today and there are several key bills relating to energy issues that are up before the Cowboy State’s legislature. I will highlight a few here and track them through the session to see how they end up – stay tuned!

All of the Bills before the Wyoming Legislature, and their statuses as the session progresses, can be found here at the House Bills Index/Senate Files Index.

A Few Key Energy Bills Before the Wyoming Legislature:

  • Senate File No. 14 – “Biennial Energy Strategy,” Sponsored by the Joint Minerals, Business & Economic Development Interim Committee
    • The Introduced Senate File No. 14 can be found here
    • In sum, Senate File No. 14 proposes, among other things:
      • A biennial energy strategy, which means a “coordinated and comprehensive biennial plan that: (A) Includes the activities of agencies, boards and commissions, policy initiatives and other actions aimed at achieving excellence in energy development, production, technological innovation, regulation and stewardship of natural resources for the highest benefit of Wyoming citizens; (B) Includes programs and initiatives intended to increase economic competitiveness, expansion and diversification, to provide for efficient and effective regulation and natural resource conservation, reclamation and mitigation and to develop education, innovation and new technologies; and (C) Identifies appropriate means to complete initiatives and work with agencies, boards, commissions and other interested parties to implement initiatives.”
      • The creation of an energy strategy committee within the governor’s office and assigning duties of the committee
  • House Bill No. 104 – “Wind Energy Production Tax,” Sponsored by Representatives Madden and Blackburn and Senator Case
    • The Introduced HB0104 can be found here
    • In sum, House Bill No. 104 is “an Act relating to the tax on production of energy from wind resources; increasing the tax rate; providing for distribution of the tax; repealing an exemption…”
      • In short…this one will be hotly debated!

The Casper Star Tribune also published an article entitled, “What to Watch for at the Wyoming Legislature this Year,” that discusses some other interesting issues before the Legislature this year.

Stay tuned! I will keep you updated on these key energy-related bills!

For many, this month has been very good to us. January is traditionally a month of hope and resolutions that many feel will set the tone for the upcoming year.  Based on this month, we are looking forward to a great 2018!

Crude oil is in a similar position – January has been very good for it.

According to the Bloomberg article entitled, Dollar Helps Propel Oil to Three-Year High as Supplies Tighten, “[o]il just got an extra tailwind from a weakening dollar as this month is shaping up to be the best January for black gold in 12 years.”

As I write this, according to Bloomberg Energy, WTI Crude is at $66.20 per barrel and Brent Crude is at $70.48 per barrel.

Basically oil is rallying and prices are increasing as the dollar is weakening…

In other news, Baker Hughes released its U.S. rig count today, which can be found here. According to Baker Hughes’ Rig Count Overview & Summary Count, as of today, the U.S. rig count has increased 11 from the prior count on January 19, 2018 and a whooping 235 rig increase since the same time last year.  Huge increase since January of 2017!

The U.S. Energy Information Administration (“EIA”) also released its Drilling Productivity Report for January 2018, which can be found here. The report shows that oil and natural gas production are up through the month of December 2017 for the Anadarko region, Bakken region, Eagle Ford region, Niobrara region, Permian region and projected oil and natural gas production through February 2018 are also on the increase for all regions except the Appalachia and Haynesville regions.

January has been good to us.

Side note, I recently read in The Old Farmer’s Almanac that there are two full moons this month – the Wolf Moon, the first full moon of the year, was on January 1, and we have another full moon coming on January 31. According to The Old Farmer’s Almanac, since the second full moon that will occur January 31 has no given name, that makes it a Blue Moon.

Things really do happen once in a Blue Moon!

And for that, I think we should celebrate how good January has been to us by cracking open a Blue Moon beer!

You may remember a prior blog post I wrote back in May of 2016 about Denver’s office real estate market feeling the pinch of the downturn in the oil and gas industry – Denver Feeling the Pinch: Denver Office Market Finally Feeling the Effects of Downturn in Energy Industry. A few months later in September of 2016, I wrote a follow up piece discussing this further in the blog entitled, Denver Office Market Still Feeling the Impacts of the Downturn in Energy Industry.

Well folks, we all know how far-reaching the impacts of the oil and gas sector can be, and today we have some more good news. I read an article today that discusses how the Denver office market is getting fresh blood from some new energy companies and how it is back on the upswing!

Denver Bisnow featured an article today entitled, Denver Office Market Improves with Recovering Energy Prices that discusses how energy companies are filling the downtown Denver office space back up.

We all know that I am the forever optimist – but I write this piece to show again how the energy sector can positively impact so many different areas. From the real estate market to the service sector, the energy industry’s benefits are widespread!