-Refiners’ investments in modifications to process light crude from shale plays will primarily benefit the Gulf Coast, FuelFix reports. The investments will be relatively modest, a Dallas-based petrochemical consultant said, since most projects will involve retrofitting, upgrading and expanding existing facilities. Much of the spending will be done at Gulf Coast refineries since transporting crude to the east and west coasts is typically cost prohibitive.
-Meanwhile, the Houston Business Journal reports on the potential slowing of the oil boom in south Texas as a result of deteriorating infrastructure. Chestnut Exploration & Production CEO Mark Plummer said governments at all levels should reinvest tax dollars to repair infrastructure given the economic contributions of oil and gas drilling. The state of Texas received approximately $4.5 billion in oil and gas-related taxes this past year.
-Bloomberg explores how shippers such as Diversified CPC International and Dow Chemical are challenging the rail industry’s rising rates. The American Chemistry Council cited data showing the average shipping cost per rail has increased 93% since 2001. The rail industry, however, says inflation-adjusted cost for each ton hauled per one mile has decreased 42% since price controls were lifted in 1980. Shippers are challenging railroad rate increases at the Surface Transportation Board and seeking the right to transfer cargoes mid-journey if cheaper rates are available.
-A state law in Alaska that would give tax breaks to oil companies appeared to survive a referendum today. Via Fox News, Gov. Sean Parnell called on oil producers to “put their money where their mouth is” and reinvest the money generated by the tax incentives into the state’s energy sector. The legislation would replace a law passed under former Gov. Sarah Palin that contained a progressive surcharge. Critics said that law discouraged new investment.
-Pemex today announced it would consolidate its natural gas, refining and petrochemicals divisions into a single unit called Industrial Transformation. The company will also create three new subsidiaries focused on drilling services, logistical and transportation services and electric power generation, respectively. Pemex will keep its profitable E&P unit intact.
