Tag Archives: oil

The Dune Express

Energy News, , , , ,

The Permian Basin, spanning West Texas and New Mexico, now features America’s longest conveyor belt. Atlas Energy Solutions’ “Dune Express” extends 42 miles from Kermit, Texas, into Lea County, New Mexico, transporting sand for hydraulic fracturing operations.

During the fracking process, liquid is pumped into the ground at high pressure to create fractures that release oil. The sand serves a critical function—keeping these fractures open as water, oil, and gas flow through them.

This $400 million project, partially funded when the company went public in March 2023, addresses logistical challenges in one of America’s most productive oil regions. The belt began operations in January and currently runs 12-14 hours daily at half capacity, with plans to transition to continuous operation later this year.

With a freight capacity of 13 tons and operating at 10 mph, the conveyor system was designed to improve efficiency and safety in sand transportation. Before the Dune Express, sand was typically hauled by tractor-trailers. CEO John Turner noted that replacing truck transport with the conveyor belt reduces road hazards in the heavily trafficked area.

This project could have an impact on the region’s economic interests. Currently, Texas leads U.S. oil production, with the Permian Basin generating over $113 billion in economic output and supporting more than 444,000 jobs. Neighboring New Mexico, the nation’s second-largest oil producer, depends on the oil and gas industry for approximately 50% of its state budget, funding services like education and infrastructure.

The project has raised environmental concerns regarding potential impacts on local habitats. However, regional officials have noted that the reduction in truck traffic may decrease accidents on nearby highways, creating safer conditions for road users while supporting the economic activity of this energy-producing region.

New Iran Sanctions Disrupt US and Overseas Business

Trade, , , , , , ,

Treasury Secretary Steven Mnuchin

The effect of the US pulling out of the Iran nuclear agreement will not only reverberate in Iran. US companies will also feel the bite of newly imposed economic sanctions on the regime of Ali Khamenei, Iran’s Supreme Leader.

The US withdrawal from the agreement will force the US government to revoke existing licenses allowing for US companies to do business with Iran. Treasury Secretary Steven Mnuchin said on Tuesday that licenses held by Boeing Company and Airbus Group, Boeing’s European competitor, will be nullified by the US withdrawal from the agreement.

“The existing licenses will be revoked,” Mnuchin said to reporters.

The company responded by saying it will consult with the government on what their next move should be.

“As we have throughout this process, we’ll continue to follow the U.S. government’s lead,” Boeing commented.

Airbus is also dependent on licensing from the US to sell its airplanes to Iran due to the US-made parts Airbus uses in its aircraft.

There will be waivers and exemptions made under certain conditions for certain products and countries, but those conditions were not discussed by Mnuchin.

Mnuchin added that the new sanctions will also seriously limit the sale of oil by Iran, which sells about 5 percent of the world’s oil, making it the fifth largest oil producer in the world. He said that there will be a 6-month grace period to allow countries to finish up existing contracts and implement “significant reductions” in the amount of crude oil they purchase from Iran.

The secretary said he does not believe the price of oil will rise by much since he expects other countries will respond to the new sanctions with increased oil production.
Mnuchin said that the goal of the new sanctions is to force Iran to come to the table to renegotiate the Iran nuclear deal.

Eighteen More Oil Rigs Bodes Well for Oil Economy

Economy, , , , , ,

U.S. offshore natural gas production wells in the Gulf of Mexico and Southern California.

With the addition of two new oil rigs operating in the Gulf of Mexico 16 new ones across the US, there are now a total of 653 drilling for oil and gas.

It is good news for the oil industry, but those numbers are far below the number of rigs operating in 2014 and 2015. According to numbers released last week by the Houston-based oilfield-services company Baker-Hughes, this year’s number is lower by 47 since last year, and is still 65 percent lower than the 1,882 which were pumping out oil and gas at the end of 2014.

Of the 653 rigs working today, 129 are looking for natural gas and the remainder, 523, are bringing out oil.

The oil industry has been suffering as an oil glut continues to keep prices of oil low. Caused by a growing trend of drilling in US shale fields, combined with increased oil production by OPEC, the oil glut brought oil prices to half, and lower, than their mid-2014 high of $115 per barrel.

Lower oil prices froze exploration for new sources of oil and natural gas, and many people in the industry were laid off. The fact that the US rig count has been growing and now is higher than its been since January, could be a harbinger of better times for the industry.