-Mexico state oil company Pemex will delay plans to upgrade three of its six refineries amid a $4.1 billion cut to this year’s budget. Via Platts, Pemex said contractors would be asked to renegotiate the terms of their current deals. Pemex last year announced $20 billion in capital spending to upgrade its Tula and Salamanca refineries in central Mexico and its Salina Cruz site on the Pacific Coast.
-A CSX Corp. train that derailed in West Virginia Monday was hauling crude oil in newer CPC 1232 model tank cars, not the older DOT-111 tanks cars U.S. authorities are seeking to phase out, Reuters reports As many as nine or 10 cars caught fire after the derailment and at least one landed in the Kanawha River. There were no serious injuries reported, but the fire destroyed a house and two nearby towns were evacuated. The Department of Transportation last summer proposed the phase-out of DOT 111 tank cars unless they are retrofitted to new standards that would make them less prone to puncture.
-Meanwhile, North Dakota regulators said they contained a 21,000-gallon saltwater spill at an oil well near the town of Fortuna, N.D. Via the Associated Press, the spill was attributed to a pump leak.
-The Ohio Supreme Court today ruled municipalities can’t block drilling activity that is permitted by the state. Via the Associated Press, the case stems from a lawsuit filed by the city of Munroe Falls against Beck Energy Corp. over a well the company was permitted by the state to drill on private property. In the suit, the city alleged the company illegally bypassed local drilling restrictions. The high court ruled the city’s rules constituted an exercise of “police power,” rather than local self-government protected by Ohio’s constitution. Under state law, Ohio has “sole and exclusive authority” to regulate the location of wells.
-The current disparity between supply and demand in the oil market will likely take several years to work through, BP said in its most recent Energy Outlook report. Tight oil production drove the largest single-year rise in U.S. history in 2014. The recent drop in oil prices, however, has driven many E&P firms in the U.S. to cut back their capital spending. Nevertheless, BP said the U.S. is likely to become self-sufficient in oil by the 2030s. BP Chief Economist Spencer Dale said the oil price plunge is a “stark reminder that the norm in energy markets is one of continuous change.”
