United States District Court for the Eastern District of Louisiana Judge Martin Feldman on June 24 denied a request by the federal government to stay a preliminary injunction issued earlier that week that prohibits the Obama administration from enforcing a six-month deepwater drilling moratorium. According to the court documents, the "defendants' motion to stay pending appeal is hereby denied for the same reasons given" in the June 22 order.
In June's Short-term Energy Outlook released on June 8, the Energy Information Administration revised lower its 2010 price expectations for retail gasoline and retail diesel fuel from its Outlook in May, saying the downside adjustments were made because of a lower price outlook for crude. EIA, the statistical arm of the Department of Energy, pressed down its price projection for West Texas Intermediate crude oil, the U.S. crude benchmark, this year due to economic uncertainty.
An email from a Minerals Management Service field operations supervisor for the Gulf of Mexico on June 3 saying that the agency had stopped issuing permits to drill in the Gulf regardless of water depth triggered a rally in crude and natural gas futures trading on the New York Mercantile Exchange.
"This came on the heels of a drilling moratorium [the previous] week, which applied to deeper waters," said Peter Beutel, president of New Canaan, Conn,-based risk management firm Cameron Hanover, in a note to clients. "It is estimated that the moratorium could cut about 350,000 bpd of oil and gas production by 2015. A ban on shallow water drilling, though, would have a deeper impact."
President Obama during a televised news conference on May 27 announced that he is extending a moratorium on deepwater oil and natural gas drilling for six months amid ongoing investigations into the April 20 Gulf of Mexico rig disaster and subsequent oil spill.
Obama said an initial safety and environmental review that he ordered has been completed and new aggressive standards are necessary.
Andy Lipow, consultant and analyst with Lipow Oil Associates, LLC, said at the 30th annual International Liquid Terminals Association conference in Houston last week that there has been a significant increase in terminal construction globally over the past few years, with the trend continuing.
"It's occurred throughout the country," said Lipow, referring to additional capacity for oil products that took place in all five of the country's PAD districts. "Most of this has been built for logistics."
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