the first indication that low prices for gas and oil may have claimed a victim came this week as heavily indebted and over-leveraged Chesapeake Energy was forced to sell 413,000 acres with 1,500 wells in West Virginia and southwest Pennsylvania to its rival Southwestern Energy Corp for $5.38 billion...although this deal was probably in the works before the oil price collapse of recent weeks, the fact that they went through with it this week at fire-sale prices indicates that their cash flow had probably dwindled to nearly nothing in the face of low gas & oil prices, and that they needed to sell these proprieties just to raise enough cash to keep their other operations running...for the time being, Chesapeake's problems may be an isolated case, as it had run up $16.2 billion in debt under McClendon, while its capital spending exceeded cash flow by $47.4 billion over the last five years as gas prices collapsed, but if the low oil prices last several weeks persist through the winter, we can expect that more similarly over leveraged oil patch frackers will feel the pinch and will be squeezed in the same way...
there was a fairly large spill of crude oil in Louisiana last week that received little media coverage...early in the week, pipeline workers discovered a 160,000 gallon crude oil spill in Tete Bayou, a wildlife area near the Texas border about 15 miles northwest of Shreveport....even though the pipeline company has hired 250 spill remediation contractors to mop up the spilled oil, the EPA expects that the spill’s cleanup will likely take months...what's relevant to us in this is that the pipeline is owned by Sunoco Logistics, who will be building a pipeline through Portage county that will move up to 85,000 barrels of petroleum a day, and that it seems that just about anywhere Sunoco has pipelines, there's been a spill, including a few larger spills Ohio; in Wood County and into the Ohio River... the new Sunoco Logistics pipeline will run from Pittsburgh to Detroit, through the Youngstown, Akron, Findlay and Toledo areas..
you'll probably recall that roughly a month ago West Virginia opened bidding for fracking rights under the northernmost 22 miles of the Ohio River bordering that state...turns out major opposition to that plan is coming from Atlanta-based Axiall Corporation, a major West Virginia chemical plant owner that uses saltwater wells under its plant as a key ingredient in their manufacture of caustic soda...seems that high pressured fracking wells on the Ohio side of the river blew into their brine well on the West Virginia side, traveled up into their plant and “began spewing flammable natural gas.” right in the middle of their manufacturing process, and did enough damage to shut down their plant for 6 months...in their lawsuit to stop the fracking, they site the unique geologic conditions beneath the river as a cause for the “near-catastrophic” incident...what we can learn from this is that the geology of the area shale does not respect manmade boundaries such as state lines or boundaries on the surface such as major rivers, and that their are likely more unknowns than knowns to deal with when they start fracturing those rock layers...
in other locally relevant news, an investigation of Ohio land records by the Columbus dispatch found that parties other than the state own the mineral rights to about 40% of Ohio's parklands and nature preserves - the concern is not so much for the always possible fracking, but that most of the these state parks and forests are in coal mining counties, and as the result of the Ohio Supreme Court ruling that mineral rights underlying park lands include the right to strip mine for coal irregardless of what's on the surface, that these state parklands and preserves could be utterly destroyed by such activity...
we'll start today's batch, which include links to all the above stories, with an excerpt from the latest pro-fracking oped from the Youngstown Vindicator:
Youngstown Vindicator: Arrogance is the hallmark of anti-fracking campaign: To understand the mentality of the individuals who refuse to take “no” for an answer in their campaign to ban fracking and other related gas and oil activities in the city of Youngstown, consider this comment: “There’s no one protecting our air and property rights, so the community members have to do it.” Thus said Susie Beiersdorfer, one of the mainstays of the committee that has again placed the anti-fracking Community Bill of Rights charter amendment on the Nov. 4 general election ballot in Youngstown. On three previous occasions, city residents rejected the anti-fracking charter amendment and the arguments put forth by Beiersdorfer, and her husband, Ray, a public employee. But they and other self-styled protectors of the people of Youngstown who are thought of as environmental bumpkins refuse to give the voters the respect they deserve. Let Susie Beiersdorfer’s opinion of city residents be your guide as you attempt to understand what’s driving the anti-fracking proponents. “There’s no one protecting our air and property rights …” No one. Not the mayor, not members of city council, not community leaders, not business leaders, not the clergy — and not even the U.S. and Ohio environmental protection agencies. In the view of the Community Bill of Rights committee, the city of Youngstown is a cauldron of pollution, and only a select few know what’s best for residents who are in harm’s way.
Land records show many state parks could see mining, drilling | The Columbus Dispatch: About 40 percent of Ohio’s natural treasures — its state parks, forests and wildlife and nature preserves — could be undermined in the quest to remove valuable coal, oil, natural gas and other minerals. Mineral rights owned by other parties could permit mining or drilling in parts of 18 state forests, 24 state parks and 53 natural areas, according to an analysis of state land records by The Dispatch. Even the parcel holding one of the crown jewels of Ohio’s park system — Old Man’s Cave in Hocking Hills State Park southeast of Columbus — potentially could be drilled for oil and natural gas. All told, parcels containing more than 117,000 acres, about 20 percent of the park and forest land owned by the Ohio Department of Natural Resources, could be mined and drilled. Environmentalists say the prospect of mining grew more ominous last month when the Ohio Supreme Court ruled that mineral rights underlying park lands include the right to strip mine coal unless expressly forbidden in deeds. ODNR reports it has not received “any new or renewed interest” in mining on state properties in the wake of the court ruling. And, numbers suggest a flurry of coal mining in state parks is unlikely amid an industry downturn. Many of the ODNR properties involving mineral-rights are located in Ohio’s coal country. The state has 55 surface coal mines — half the number of 14 years ago — and 10 underground mines across 17 counties in eastern and southeastern Ohio. The underground operations produce 73 percent of the coal mined in Ohio, which ranks 10th among the states in coal production. When the state bought or was given land in decades past, some sellers retained the mineral rights to extract coal, oil and natural gas underlying the land. The fact that owners held on to the mineral rights allowed the state to buy land at deep discounts, officials said. In the Ohio Supreme Court case, ODNR unsuccessfully argued that strip mining would “utterly destroy” its lands, saying only underground mining was allowed unless strip mining was specifically authorized in mineral-rights deeds.
High pollution levels found near Ohio gas wells - A study in a rural Ohio county where oil and gas drilling is booming found air pollution levels near well sites higher than those in downtown Chicago. A team from the University of Cincinnati and Oregon State University placed 25 monitors as close as one-tenth of a mile from gas wells in Carroll County, about 100 miles south of Cleveland. The monitoring occurred over a three-week period in February. The monitors detected 32 types of hydrocarbon-based compounds, some of which are found in vehicle exhaust, tobacco smoke and are produced when materials are burned. The researchers would not discuss the specifics of their findings. They plan additional monitoring to produce more precise measurements that account for drilling activity, wind and weather. They also plan to analyze wrist monitors that some residents living near wells wore for three weeks. Erin Haynes, a professor of environmental health at the University of Cincinnati, said Carroll County was chosen for the study because of residents' concerns about hydraulic fracturing, known as fracking. The researchers hope to eventually determine if fracking harms people's health. Carroll County is located on the Utica shale, which lies beneath portions of Ohio, Pennsylvania, West Virginia and New York. The state reports there are 282 active fracking wells in Carroll County.
Fracking May Be Dangerous To Nearby Residents - Fracking sites may threaten the health of local residents, according to new research. "Those who live in close proximity to fracking sites exhibited a greater likelihood to suffer [health] problems than those who lived farther away from natural gas wells, according to a new study of Pennsylvania’s Marcellus shale region," RT reported.Titled “Proximity to Natural Gas Wells and Reported Health Status: Results of a Household Survey in Washington County, Pennsylvania,” the study was published in Environmental Health Perspectives. The study concluded: "While these results should be viewed as hypothesis generating, and the population studied was limited to households with a ground fed water supply, proximity of natural gas wells may be associated with the prevalence of health symptoms including dermal and respiratory conditions in residents living near natural gas extraction activities. Further study of these associations, including the role of specific air and water exposures, is warranted."The study by Yale University researchers "addressed 492 individuals in 180 households in southwestern Pennsylvania, where the Marcellus shale has attracted its fair share of the fracking surge seen throughout the United States," RT reported. Washington County, where the study was, is a fracking hot spot.
Fracking companies use loophole to avoid permits for dangerous chemicals, report says | The Columbus Dispatch: Federal laws meant to protect drinking water require fracking companies to get a permit before using diesel fuel in the drilling process. That permit is important: Diesel contains chemicals that can cause cancer and damage nerve tissues. The permits regulate the length and depth of concrete and steel well casings that keep those chemicals from reaching groundwater. But a loophole in the law allows oil and gas companies to separately inject the same toxic chemicals without a permit, according to a report released by the nonprofit, nonpartisan Environmental Integrity Project. Four chemicals in diesel — benzene, toluene, ethylbenzene and xylene — are the biggest worries to federal regulators and environmental and health officials. Benzene is a known carcinogen. Ethylbenzene and toluene can cause neurological problems. The Safe Water Drinking Act requires extensive oversight if diesel is used during drilling or fracking, in part because of its benzene content. Diesel can be used, for example, as a lubricant for a pipe or drill going into the ground. Yet all those chemicals are allowed to be used during fracking without a permit issued under the Safe Water Drinking Act, the Environmental Integrity Project said.
‘Fracking loophole’ allows drilling companies to use unregulated toxins – report — A number of US oil companies are taking advantage of the so-called “Halliburton Loophole” to circumvent federal legislature regulating diesel-based fluids in fracking, instead exploiting the environment with even more toxic chemicals, new report says. “Because of a gap in the Safe Drinking Water Act, companies are allowed to inject other petroleum products (beyond diesel) without a permit, and many of these non-diesel drilling fluids contain even higher concentrations of the same toxins found in diesel,” report by the Environmental Integrity Project released on Wednesday reads. Titled “Fracking’s Toxic Loophole”, the report says that the 2005 Energy Policy Act authorities the Environmental Protection Agency’s (EPA) to “regulate diesel-based fracking fluids because of the toxicity of BTEX compounds” found in diesel. However due to the so-called “Halliburton loophole” in the legislature the federal government is not applying the same protection standards to other fracking fluid other than diesel-based.
Environmental Watchdog finds oil, gas companies using cancer-causing chemicals -- Oil and gas companies are exploiting federal loopholes to frack with cancer-causing petroleum-based products, a report by the Environmental Integrity Project (EIP) said. "Despite a federal ban on the use of diesel fuel in hydraulic fracturing without a permit, several oil and gas companies are exploiting a Safe Drinking Water Act loophole, pushed through by Halliburton to frack with petroleum-based products, containing even more dangerous toxic chemicals than diesel," a statement published on the watchdog's website Wednesday said. The group found that one of the primary ingredients in fluids, used in fracking, contains a highly toxic chemical called benzene, which is more toxic than diesel fuel and harmful to drinking water supplies and public health. According to the statement, permits are required for fracking with diesel fuel; however, companies can inject other petroleum products even more toxic than diesel without using a permit. "This double standard illustrates what happens when Congress manipulates environmental statutes for the benefit of polluters, instead of allowing EPA [US Environmental Protection Agency] to make public health decisions based on the best available science," The study recommends that Congress should revise and repeal the 2005 loophole by advising the US Environmental Protection Agency to require safeguards for the Safe Drinking Water Act from using chemicals that contain large amounts of benzene and other toxic chemicals.
Fracking Companies Using Toxic Benzene in Drilling: Group - Some oil and gas drillers are using benzene, which can cause cancer, in the mix of water and chemicals they shoot underground to free trapped hydrocarbons from shale rock, an environmental watchdog group said today. Benzene isn’t banned in hydraulic fracturing, although diesel is restricted because regulators determined it may have carcinogens, including benzene. Drillers need a permit before using diesel in the fracking mixture that’s blasted into shale with oil and gas deposits; they don’t need one for benzene. The Environmental Integrity Project today said at least six fracking fluid additives contain that compound. “It’s bombs away. You can use benzene in large quantities, just as long as you don’t call it diesel,” said Eric Schaeffer, the Washington-based group’s executive director. Schaeffer said the compound could contaminate drinking water, although the group didn’t provide any evidence today showing such contamination. In 2005, Congress exempted fracking from requirements of the Safe Drinking Water Act. Health advocates called it the “Halliburton loophole,” referring to Halliburton Co. (HAL:US), the largest provider of fracking services, led by Richard Cheney before he was elected vice president in 2000.
Chesapeake has $5B deal to sell part of its Marcellus portfolio: Chesapeake Energy Corp. announced Thursday that it will shed its liquids-rich Marcellus Shale acreage in a $5.38 billion deal with Southwestern Energy Co. Oklahoma-based Chesapeake, whose leasing appetite in the Marcellus made it among the top companies holding claim to the land here, said the area being sold — mostly in West Virginia and in the western part of Pennsylvania’s Washington County — wasn't being properly valued by the market and was near the bottom of Chesapeake’s priority list. Jason Ashmun, vice president of the Appalachian North Business Unit for Chesapeake, said the company has been “on the bubble” about its southern Marcellus acreage, which includes about 14,000 acres in southwestern Pennsylvania. As is common among energy exploration companies, Chesapeake’s teams in the company’s various operation territories compete for capital allocations, which have been on the decline since CEO Doug Lawler replaced Aubrey McClendon at the helm last year. Mr. Lawler’s arrival signaled a shift in the company’s spending strategy and a greater focus on efficiency. “Chesapeake’s very aggressive historical push for growth necessitated investment that substantially outstripped operating cash flow,” said analysts from Standard & Poor’s in a note Thursday morning.
Chesapeake to Sell Gas Assets for $5.38 Billion - WSJ - Chronically cash-strapped Chesapeake Energy Corp. finally has some spending money. The Oklahoma City company on Thursday agreed to sell a big slice of its oil-and-gas holdings to rival Southwestern Energy Corp. for $5.38 billion. It was the boldest move yet by Chesapeake Chief Executive Doug Lawler to transform the driller, which for the past seven years has spent billions more than its wells generated. Analysts said proceeds could be used to pay down some of Chesapeake’s $11.5 billion in debt. For several years before the global financial crisis, investors rewarded Chesapeake as co-founder Aubrey McClendon borrowed heavily to snap up oil and gas prospects and drill more wells than its rivals. That changed in 2012 as the company’s debt reached around $16.2 billion, and shareholders began to fret about the CEO’s appetite for risk and enthusiasm for spending. With the sale to Southwestern, Chesapeake will shed 413,000 acres with 1,500 wells in West Virginia and southwest Pennsylvania. The deal included wells in the Marcellus and Utica shales that produced the equivalent of about 336 million cubic feet of gas a day last month.
Pa. studies on shale-site air emissions incomplete, according to court documents: Three widely cited state studies of air emissions at Marcellus Shale gas development sites in Pennsylvania omit measurements of key air toxics and calculate the health risks of just two of more than two dozen pollutants. State regulators and the shale gas drilling industry over the past four years have repeatedly used the regional studies to support their positions that air emissions from drilling, fracking wastewater impoundments and compressor stations don’t pose a public health risk. The revelations about the shortcomings of the state Department of Environmental Protection’s short-term air sampling reports are contained in sworn depositions by two DEP air program employees who worked on them. Those documents were filed in a Washington County Common Pleas Court civil case in which three families allege that air and water pollution from Range Resources’ Yeager drilling and 13.5-million gallon fracking wastewater impoundment in Washington County made them sick. In a parallel case, now before the state Environmental Hearing Board, one of those individuals, Loren Kiskadden, has appealed a DEP ruling that myriad spills and leaks at the Yeager drill site and impoundment did not contaminate his well water supply a half mile away.
Fracksylvania DEP Cooks Books on Fracking Air Pollution Reports --Three widely cited state studies of air emissions at Marcellus Shale gas development sites in Pennsylvania omit measurements of key air toxics and calculate the health risks of just two of more than two dozen pollutants.State regulators and the shale gas drilling industry over the past four years have repeatedly used the regional studies to support their positions that air emissions from drilling, fracking wastewater impoundments and compressor stations don’t pose a public health risk.The revelations about the shortcomings of the state Department of Environmental Protection’s short-term air sampling reports are contained in sworn depositions by two DEP air program employees who worked on them.Those documents were filed in a Washington County Common Pleas Court civil case in which three families allege that air and water pollution from Range Resources’ Yeager drilling and 13.5-million gallon fracking wastewater impoundment in Washington County made them sick.In a parallel case, now before the state Environmental Hearing Board, one of those individuals, Loren Kiskadden, has appealed a DEP ruling that myriad spills and leaks at the Yeager drill site and impoundment did not contaminate his well water supply a half mile away.“The DEP’s willingness to allow Pennsylvania’s citizens to continue to rely upon what it knows to be an inaccurate air study is unacceptable and completely contrary to the department’s obligations to the public,”
Pennsylvania DEP = “Department of Environmental Predation” - Pennsylvania and New York are the only states that combine their minerals resource departments with their environmental departments. Then task that department, the DEP in Pennsylvania and the DEC in New York, with promoting oil and gas development. The fracking fox guarding the environmental hen house. Raw data showing high concentrations of certain pollutants at gas operations and health risks of 25 chemicals were left out of the state’s studies. Pennsylvania regulators used flawed methodology to conclude that air pollution from natural gas development doesn’t cause health problems. The revelation has further eroded trust in an embattled state agency. The news was first reported Monday by the Pittsburgh Post-Gazette. The paper cited court documents that show how air quality studies conducted by the Department of Environmental Protection in 2010 and 2011 failed to analyze the health risks of 25 chemicals. The studies also didn’t report some instances where high pollutant levels were detected. The evidence came from statements of two DEP scientists who were deposed in a lawsuit. Their depositions call into question the report’s conclusion that the air sampling found no health risks from shale development.
USGS Release: Measuring Landscape Disturbance of Gas Exploration in Eight Pennsylvania Counties Landscape change in Pennsylvania's Cameron, Clarion, Elk, Forest, Jefferson, McKean, Potter, and Warren counties resulting from construction of well pads, new roads and pipelines for natural gas and coalbed methane development is being documented to help determine the potential consequences for ecosystems and wildlife, according to a new U.S. Geological Survey report. Using geospatial data and high resolution aerial imagery from 2004-2010, USGS researchers documented spatially explicit patterns of disturbance, or land use, related to natural gas resource development, such as hydraulic fracturing, particularly disturbance patterns related to well pads, roads and pipeline construction. Spatially explicit data on the level of landscape disturbance -- which is geographic information systems data, mapped to a high degree of spatial accuracy -- is critically important to the long-term study of the potential impacts of natural gas development on human and ecological health. Through programs such as the National Land Cover Database, and Land Cover Trends, USGS has a long record of studying the consequences of land-use and land-cover changes. The current level of natural gas development in much of the country, and its effects on the landscape, is an important contemporary land-use/land-cover issue. "Landscape disturbance effects have consequences for the ecosystems, wildlife, and human populations that are collocated with natural gas extraction activities. This study examines the landscape consequences of gas extraction for eight counties in Pennsylvania; and is the final publication in the series that documents landscape disturbance in the Marcellus Shale region of the state," said Lesley Milheim, lead author of the study.
Duke professor finds fracking footprint - — A prominent Duke University researcher contributed to a recent discovery that makes it easier to say what role the controversial technology of hydraulic fracturing plays in water pollution. Duke geochemist Avner Vengosh worked with other American and French scientists in identifying what they believe is the unique, chemical “fingerprint” left behind by the relatively new process of extracting natural gas from shale. “So if there is contamination, we can tell the source,” Vengosh said. “Once you see this kind of water in the environment, you will be able to say, ‘Yes, this is fracking.’ ” The group of researchers published their findings today in the journal “Environmental Science & Technology.” The study comes at an opportune moment for North Carolina, which is poised to allow fracking for the first time in parts of the state with substantial shale reserves including Rockingham and Stokes counties. The new fingerprint could put an end to debates between the industry and environmentalists over pollution linked to hydraulic fracturing, Vengosh said.
Frackwaste Water Chemical Signature Identified by Scientists --As if there was ever any doubt where all that frackwaste water is going, (the local river) a team of scientists have developed an chemical signature for frack waste waster – so that it can be positively identified in the field. A team of U.S. and French scientists say they have developed a new tool that can specifically tell when environmental contamination comes from waste produced by hydraulic fracturing, better known as fracking. In peer-reviewed research published in the journal Environmental Science & Technology on Monday, the researchers say their new forensic tool can distinguish fracking wastewater pollution from other contamination that results from other industrial processes — such as conventional oil and gas drilling. Fracking is a controversial oil and gas well stimulation technique that uses a great deal of water, mixed with chemicals, to extract oil and gas from miles deep underground. The disposal of this often-radioactive water mixture, known as “fracking fluid,” is widely considered to be one of the biggest environmental threats that fracking poses, along with the emissions of greenhouse gases like methane and carbon dioxide. There have been many claims of water contamination since the technique gained popularity in 2008, but it’s been difficult to determine if fracking was really the cause — mainly because fracking companies are not required to disclose what chemicals they use in the process (the mixture is often considered a trade secret). With the new tool, though, scientists no longer need to know the chemical make-up of the fracking fluid to determine whether it’s getting into the environment, Duke . “This is one of the first times we’ve been able to demonstrate that, here, you have a spill in the environment, and yes, this is from fracking fluid and not from other source of contamination,” Vengosh said. “It’s a pretty cool way to overcome the issue of trade secrets.”
Scientists Can Now Tell If Water Contamination Comes From Fracking Waste --A team of U.S. and French scientists say they have developed a new tool that can specifically tell when environmental contamination comes from waste produced by hydraulic fracturing, better known as fracking. In peer-reviewed research published in the journal Environmental Science & Technology on Monday, the researchers say their new forensic tool can distinguish fracking wastewater pollution from other contamination that results from other industrial processes — such as conventional oil and gas drilling. Fracking is a controversial oil and gas well stimulation technique that uses a great deal of water, mixed with chemicals, to extract oil and gas from miles deep underground. Once the rock is fractured by the high pressure fluid, fossil fuels follow the fracking fluid to the surface. The disposal of this often-radioactive water mixture, known as “fracking fluid,” is widely considered to be one of the biggest environmental threats that fracking poses, along with the emissions of greenhouse gases like methane and carbon dioxide. There have been many claims of water contamination since the technique gained popularity in 2008, but it’s been difficult to determine if fracking was really the cause — mainly because fracking companies are not required to disclose what chemicals they use in the process (the mixture is often considered a trade secret). With the new tool, though, scientists no longer need to know the chemical make-up of the fracking fluid to determine whether it’s getting into the environment, Duke University geochemist Avner Vengosh told ThinkProgress on Monday.“This is one of the first times we’ve been able to demonstrate that, here, you have a spill in the environment, and yes, this is from fracking fluid and not from other source of contamination,” Vengosh said. “It’s a pretty cool way to overcome the issue of trade secrets.”
Scientists can now see fracker's “fingerprints” all over polluted water - People are getting sick all across fracking country, and many are blaming their mysterious illnesses — headaches, excruciating rashes, even liver damage — on the chemicals oil and gas companies have been pumping into the earth. But thanks to trade-secret laws, which allow companies to stay mum about the chemicals in their fracking fluid, it’s been difficult to pin the blame on the practice — until now that is. Researchers from Dartmouth College, Stanford University, and the French Geological Survey claim they’ve created a tool that detects a specific chemical fingerprint unique to fracking fluid, allowing scientists to pinpoint fracking as a culprit in water pollution.According to their research, boron and lithium — which both occur naturally in shale — mix with fracking fluid when it’s injected underground, altering the wastewater’s chemical makeup in ways different from other fossil fuel extraction methods. As Avner Vengosh, a geochemist at Duke University, told Think Progress, this new detection method, which hones in specifically on this chemical fingerprint, bypasses the whole trade-secret hiccup:“Many of the fracking operations today are happening in areas that have a legacy of 20, 30 years of conventional oil and gas development,” Vengosh said. “So when there’s contamination, [fracking companies] can say ‘Oh, it’s not us — it’s the legacy of 30 years of operations here.”“We now have the tools to say, well, sometimes you’re right and sometimes you’re wrong,” he added.
Marshall County chemical maker wary after ‘near-catastrophic’ fracking incident -- As the Tomblin administration considers a plan to allow natural gas drilling under the Ohio River, a major chemical maker in Marshall County has been fighting a proposal for hydraulic fracturing near its plant, citing a “near-catastrophic” gas-well incident last year that might be linked to geologic conditions beneath the river. Atlanta-based Axiall Corp. has been waging a legal battle to stop Gastar Exploration from fracking natural gas wells that Gastar had drilled on Axiall property under leases Gastar obtained from PPG Industries, the former owner of Axiall’s chlorine and caustic soda plant at Natrium, located along the Ohio near the Marshall-Wetzel county line. Axiall says it is concerned about a repeat of an August-September 2013 incident it blames on high-pressure fracking fluids being used by another company, Triad Hunter, to release natural gas from the Marcellus Shale at a well site on the other side of the river. In court documents, Axiall lawyers say increased underground pressure from the fracking at Triad Hunter traveled under the river and somehow made contact with brine wells Axiall uses to obtain saltwater, one of the key materials used in its manufacturing process. Axiall says those pressures led to a blowout in which one of its brine wells at its plant “began spewing flammable natural gas.” No injuries were reported, but parts of Axiall’s brine production were closed for more than six months for repairs and the company had to set up several large flares to burn off excess natural gas. Axiall was “fortunate to have been able to limit the environmental impact of the Triad Hunter incident and avoid bodily injury or loss of life due to a natural gas explosion or other disaster,” the company says in court records.
Fracking Ban Ballot Initiatives Intensify - County ballot issues to ban fracking could have a large impact outside those counties. And the campaign money being spent on both sides—but primarily by big energy companies—shows how much is at stake. The highest profile and most contentious ban is the one on the ballot in Denton, Texas, north of Dallas, located in the heart of the Barnett shale region. Citizen groups, concerned about their families’ health and safety and frustrated by the city’s failure to enact any restrictions on fracking, gathered enough signatures to force city council to vote on the ban in July. After the council voted against it, the issue went to the November ballot. The battle has positioned the industry-backed group Denton Taxpayers for a Strong Economy against the community group Denton Drilling Awareness Group/Frack Free Denton. The Denton Chamber of Commerce and the Denton County Republican Party have come out against the ban.
Letter: Group biased toward fracking | The Sanford Herald: To the Editor: Fracking does pose health issues, but according to Katie Brown, spokeswoman for Energy in Depth, it does not. Energy in Depth, hmmmm ... looks a lot like the Energy Department. Of course I had to Google EID and found them to be a “research, education and public outreach campaign focused on getting the facts out about the promise and potential of responsibly developing America’s onshore energy resource base” especially abundant sources of oil and natural gas from shale and other ‘tight’ formations across the country.” Oh, and of course they were launched by Independent Petroleum Association of America in 2009. A little more digging, and the management team and board of directors are all oil boys! No surprise here, so do you think EID has their own biases? Sure they do! In a recent article in Scientific Magazine entitled “Fracking Sludge in Open Pits Goes Unmonitored as Health Worries Mount,” a “commercial waste facility that will receive millions of barrels of toxic sludge from oil and gas production for disposal in enormous open air pits is taking shape” less than a half mile from Nordheim School in Nordheim, Texas. Nordheim school has 180 children ranging from kindergarten through 12th grade. The proposed waste disposal pits will be as large as nine city blocks. “In the state of Texas, as in most states, air emissions from oil and gas are among the least regulated, least monitored and least understood components of the extraction and production cycle.”
Most People in NYS, Ma., Vt and NH Won’t Get Fracked. They’ll Get Gassed. - Sane Energy Project has long focused on infrastructure, and truth be told, it used to get a little lonely banging the drum about pipelines and compressor stations. But we’ve reached a turning point for the anti-fracking movement in New York State: it’s way beyond just talking about a ban now. Because really, we are already being fracked, in every way BUT the drilling. Due to the efforts of our members and allies, and with the help of our YOU ARE HERE map, people all over the region are now up in arms about shale gas infrastructure of every stripe. New coalitions are coming together, blockades are planned, forums are being held, hearings and rallies are packed! Here’s a roundup of recent and upcoming actions:
Fracking boom prompts gas pipeline development: Spurred by the nation's fracking boom, Dominion proposed in September its largest natural gas pipeline — a nearly $5 billion project to move vast supplies produced in the mid-Atlantic to the Southeast. Dominion and Duke Energy, along with two other partners, are seeking federal approval for a 550-mile pipeline — called the Atlantic Coast Pipeline — that would stretch from Harrison County, West Virginia., through Virginia and North Carolina to Robeson County, near the South Carolina border. "This will be one of the largest pipelines to take advantage of the abundant supply of natural gas in the Marcellus and Utica shale fields in West Virginia, Ohio and Pennsylvania," says Dominion spokesman Jim Norvelle. The combined use of horizontal drilling and hydraulic fracturing or fracking, which can extract oil and gas from underground rock, are a major reason why these two shale formations now generate more than a quarter of the nation's natural gas. "This new technology of getting natural gas out of the ground is a game changer," says Norvelle, noting manufacturers are using this energy to power factories. He says Duke Energy is looking to close a number of coal-fired power plants and use natural gas plants instead.
A host of chemicals emissions are seeping from oil and gas operations --A host of chemical emissions seep are seeping from oil and gas drilling pads with different ones coming from different places in the operation – from the wellhead to tanks to valves, according to a new study. “The hope is that this helps us understand what kinds of emissions are coming from which equipment on a site,” said Carsten Warneke, a University of Colorado researcher and lead author on the study. The data will may help regulators better manage oil and gas field emissions. The study is one of several being done in Utah’s Uintah Basin, which has been the scene of winter ozone levels that exceeded readings in New York City. The eastern Utah basin is home to more than 10,000 oil and gas wells, with 1,000 wells being added every year. The research was conducted by scientists at the Cooperative Institute for Research in Environment Sciences at the University of Colorado-Boulder and the National Oceanic and Atmospheric Administration. An earlier study by researchers at CU’s Institute of Arctic and Alpine Research identified 10 volatile organic chemicals, including toluene, which at high levels can affect the nervous system, and the carcinogen benzene. The levels of these chemicals, excluding methane, were higher than in the 28 largest U.S. cities and Mexico City. Levels of benzene exceeded a chronic-effects health threshold in 254 of 329 measurements taken in 2013, the study said. Those measurements were made from instruments on balloons about 620 feet above the oil and gas fields.
Fracking Threatens Millions of Californians » A new report shows that 5.4 million Californians—more than 14 percent of its 38.3 million population—live within a mile of an oil or gas well, and almost four million of those, or nearly 70 percent, are Hispanic, Asian or African-American, according to a new Natural Resources Defense Council (NRDC) report Drilling in California: Who’s at Risk? Non-whites make up slightly more than 40 percent of California’s total population. “California’s communities of color have long been dumping grounds for industrial pollution—and our analysis shows that fracking is poised to pile on more if the oil and gas industry has its way,” said NRDC senior scientist Miriam Rotkin-Ellman and one of the report’s authors. “From polluted skies to contaminated drinking water and hazardous waste, communities of color in California get way more than their fair share. If the oil and gas industry gets their way, drilling—and the environmental and health threats from fracking, acidizing and other technologies—will be piled onto communities already staggering under smoggy skies and unsafe water. From Los Angeles to the state’s farms and ranches, this industry must not be allowed to poison our people’s health.”
Texas’ Top Toxicologist: EPA’s New Smog Regulations Unnecessary, Just Stay Indoors - Texas’ chief toxicologist is arguing that the EPA shouldn’t tighten ground-level ozone, or smog, rules because there will be little to no public health benefit. Dr. Michael Honeycutt heads the toxicology division of the Texas Commission on Environmental Quality (TCEQ), the state agency tasked with protecting Texans from pollution.“Ozone is an outdoor air pollutant because systems such as air conditioning remove it from indoor air,” he argues on a blog post on the TCEQ website. “Since most people spend more than 90 percent of their time indoors, we are rarely exposed to significant levels of ozone.” He adds that those who are “near death” and thus more vulnerable to ozone spend even more time inside. The overwhelming majority of scientists believe that the EPA should tighten ozone restrictions — as the agency is widely expected to do before December. In 2008 the EPA set the current ozone standard at 75 parts per billion (ppb). In June 2014, the EPA’s Clean Air Scientific Advisory Committee (CASAC) unanimously recommended that the agency lower the limit of ozone pollution from its current standard to between 60 and 70 ppb. A federal judge ruled that the agency needs to produce a draft of new, more stringent ozone regulations by December.
Reinert Interview: Energy Environmental Sacrifice Areas | Big Picture Agriculture: I’ve flown over the tar sands area in a helicopter, and took photographs of it for Bloomberg news, and if you see the incredible destruction of the arboreal forest there you can’t imagine that it can ever be cleaned up. There is destruction elsewhere. Parts of Africa have badly leaking and poorly maintained oil fields. You saw what happened in Ecuador with Chevron, and the destruction of indigenous species. You see ecological destruction in Brazil with the ever greater quest for ethanol because as sugarcane farmers push other farmers and cattle ranches further to the edge, the rainforest gets torn down. In Georgia, they’re clearcutting forest and exporting wood to the E.U. for the purpose of using renewables to replace coal with wood. West Virginia comes as close as anywhere for being a sacrifice state. That’s where I grew up so I’ve seen how disgusting and ugly the mountain topping is for coal mining. I tubed on the Elk River when I was young, where the terrible chemical spill was earlier this year. There are some badly contaminated port areas. Then, there’s the Dead Zone in the Gulf of Mexico related to our ethanol production. I could go on and on.
Fossil fuel industry sustained by ‘toxic triangle’ that puts 400 million at risk - Political inertia, financial short-termism and vested fossil fuel interests have formed a “toxic triangle” that threatens to push up global temperatures, putting 400 million people at risk of hunger and drought by 2060, Oxfam said on Friday, a week before an EU summit to finalise a new climate and energy policy framework. In its Food, Fossil Fuels and Filthy Finance report, Oxfam warned that EU leaders must resist pressure from the fossil fuel industry, which spends at least €44m (£35m) a year on lobbying the European bloc. The report also urged leaders to commit to cuts of at least 55% in carbon dioxide emissions, energy savings of at least 40%, and an increase in the use of sustainable renewable energy to at least 45% of the energy mix. EU leaders meet in Brussels on 23-24 October to agree targets for emissions cuts by 2030, deployment of renewable energy and improving energy efficiency. The meeting comes ahead of the UN climate change conference in Paris next year. The leaders are expected to agree an emissions cut target of 40% from 1990 levels, but Oxfam said this would not be enough for Europe to make a fair contribution to tackling climate change. The EU emits about 10% of global carbon dioxide. “The fossil fuel industry has conjured a toxic triangle that is trapping us into a warming world. Governments and investors are helping the industry to recklessly protect its own profits at the expense of us all. The world’s poorest are already being hit hardest and millions more will be made hungry by climate change,” the Oxfam chief executive, Mark Goldring, said. Oxfam says the “toxic triangle” supported spending of more than $674bn (£423bn) on fossil fuels in 2012. Investment in the industry was propped up by tax breaks, government incentives and an estimated $1.9tn of subsidies a year. More than $500,000 a day was being spent on lobbying US and EU governments, it says.
Mountaintop Removal Linked to Cancer - We know what a mess mountaintop removal makes when the tops of mountains are literally blown off to access the coal inside them. Forests are stripped and debris is dumped into streams and valleys, leaving behind a ravaged landscape. It’s partly responsible for the loss of jobs in the coal industry since it requires only a handful of workers to operate the huge machines involved. Now we’re learning that the process, which has been touted by advocates as cleaner and safer than below-ground coal mining, is the direct cause of a lung cancer epidemic in the Appalachian communities—primarily in West Virginia, Kentucky and southwestern Virginia—where mountaintop removal coal mining is taking place. A new peer-reviewed study by researchers from West Virginia University’s Mary Babb Cancer Center found that the coal-dust particulates it blows into the atmosphere has fueled an epidemic of lung cancer. “Epidemiological studies suggest that living near mountaintop coal mining activities is one of the contributing factors for high lung cancer incidence,” the study states unequivocally in its introduction.
The dirty effects of mountaintop removal mining -FOR DECADES, coal companies have been removing mountain peaks to haul away coal lying just underneath. The technique made it economical for them to extract more coal from troublesome seams in the rock, which might be too small for traditional mining or lodged in unstable formations. More recently, scientists and regulators have been developing a clearer understanding of the environmental consequences. They aren’t pretty. Environmentalists were appalled, but the practice spread and now accounts for more than 40 percent of West Virginia coal production. Burning coal has a host of drawbacks: It produces both planet-warming carbon dioxide and deadly conventional air pollutants. Removing layers of mountaintop in the extraction process aggravates the damage. The displaced earth must go somewhere, typically into adjoining valleys, affecting the streams that run through them. The dust that’s blown into the air on mountaintop removal sites, meanwhile, is suspected to be unhealthy for mine workers and nearby communities. Scientists have recently produced evidence backing up both concerns. Over the summer, a U.S. Geological Survey study compared streams near moutaintop removal operations to streams farther away....the researchers found decimated fish populations, with untold consequences for downstream river systems. The scientists noted changes in stream chemistry: Salts from the disturbed earth appear to have dissolved in the water, which may well have disrupted the food chain. Last week, the Charleston Gazette reported on a new study finding that dust from mountaintop removal mining appears to contribute to greater risk of lung cancer. West Virginia University researchers took dust samples from several towns near mountaintop removal sites and tested them on lung cells, which changed for the worse. The findings fit into a larger, hazardous picture: People living near these sites experience higher rates of cancer and birth defects.
Washington Post Editorial Board Damns Mountaintop Removal Coal Mining » In light of a new study finding that particulates kicked up by mountaintop removal (MTR) are connected to the lung cancer epidemic in the regions where this form of coal mining is rampant, the Washington Post‘s editorial board added up all the evidence and came out with a powerful editorial damning the practice for its health and its environmental impacts. “For decades, coal companies have been removing mountain peaks to haul away coal lying just underneath,” said the paper. “More recently, scientists and regulators have been developing a clearer understanding of the environmental consequences. They aren’t pretty.” MTR, which involves blowing the tops of mountains or using massive earth movers to remove them to extract the coal inside them, has grown in popularity in the last several decades since it allows the mining of coal seams that otherwise would not have been cost-effective to mine and it requires fewer workers than underground coal mining. It’s become a big business, particularly in West Virginia and eastern Kentucky where the process became common in the 1990s.
U.S. Utilities Facing Fuel Shortage Problems As Winter Approaches - American utility companies are facing lower-than-average fuel supplies as they begin to stockpile for the winter. Part of the reason is the country’s oil boom. Moving oil by rail has become so widespread that train backups are making it hard for utilities to receive shipments of coal, which in some cases is leaving power plants critically low on fuel supplies. Coal stocks were inordinately depleted during the unusually long, cold snowy winter in the U.S., which saw an elevated level of electricity demand. Months later, coal-fired power plants are still struggling to replace their coal supplies. “Coal piles around the country have gotten to levels that don’t make us 100 percent comfortable,” David Crane, CEO of NRG Energy, told Bloomberg in an interview. The amount of coal on hand hit just 39 days’ worth of supply in July 2014, the month for which the latest data is available. That is down from a 57-day supply at the same time in 2013.
Methane Leaks Wipe Out Any Climate Benefit Of Fracking, Satellite Observations Confirm -- Satellite observations of huge oil and gas basins in East Texas and North Dakota confirm staggering 9 and 10 percent leakage rates of heat-trapping methane. “In conclusion,” researchers write, “at the current methane loss rates, a net climate benefit on all time frames owing to tapping unconventional resources in the analyzed tight formations is unlikely.” In short, fracking speeds up human-caused climate change, thanks to methane leaks alone. Remember, natural gas is mostly methane, (CH4), a super-potent greenhouse gas, which traps 86 times as much heat as CO2 over a 20-year period. So even small leaks in the natural gas production and delivery system can have a large climate impact — enough to gut the entire benefit of switching from coal-fired power to gas. Back in February, we reported that the climate will likely be ruined already well past most of our lifespans by the time natural gas has a net climate benefit. That was based on a study in Science called “Methane Leaks from North American Natural Gas Systems” reviewing more than 200 earlier studies. It concluded that natural gas leakage rates were about 5.4 percent. The new study used satellites to look at actual “methane emissions for two of the fastest growing production regions in the United States, the Bakken and Eagle Ford formations,” between the periods 2006–2008 and 2009–2011. They found leakages rates of 10.1 percent and 9.1 percent respectively!
Oldest Horizontally Fracked Wells in the World are the Biggest Leakers (Original audio source) This is how the industry is spinning the news about the methane hot spot in the coal bed methane fields. That it “predates’ the fracking boom. It predates shale gas, but does not predate fracking. “Methane hotspot seen from space predates shale gas fracking boom. NASA and University of Michigan scientists analyzed satellite data from 2003 to 2009, and a map of their results shows a bright red spot at the Four Corners, which is most likely related to coal bed methane extraction there, as it predates the boom in shale gas fracking. Living On Earth. 19 October 2014.” Those coal bed methane wells are the granddaddies of the fracking boom, they were the first commercial horizontally fracked wells in the world. The source rock just isn’t shale. Big fracking deal. Two major corrections to the report of the methane leaks seen from space – the coal bed methane wells are by no means “conventional” wells. In fact, they are the oldest “unconventional” commercially horizontally fracked gas wells in the world.“FRANKENBERG: We only looked particularly at this Four Corners site, and we observed the enhancements already starting in 2003, and at the time there was no considerable fracking activity in this area. It’s an established technique in the Four Corners area to extract the coalbed methane, and I think it started already in the 90s.” The coal bed methane seams are “unconventional” – drilled and fracked horizontally.
North Dakota aims to reduce natural gas flaring - (EIA) About one-third of the natural gas North Dakota has produced in recent years has been flared rather than sold to customers or consumed on-site. The rapid growth in North Dakota oil production, which rose from more than 230,000 barrels per day (bbl/d) in January 2010 to more than 1,130,000 bbl/d in August 2014, has led to increased volumes of associated gas, or natural gas that comes from oil reservoirs. These increased volumes require additional infrastructure to gather, process, and transport gas volumes instead of flaring them. These additions can take time to build, and well operators are often reluctant to delay production. In an effort to reduce the amount of natural gas flared, North Dakota's Industrial Commission (NDIC) established targets that decrease the amount of flared gas over the next several years. The first target of 26% flared is set for fourth-quarter 2014, with continued decreases in flaring reaching 10% by 2020. North Dakota recently reported that it was close to achieving the 26% reduction target for natural gas flaring, as the percentage in August was 28% flared, or 375 million cubic feet per day (MMcf/d) out of a total production of 1,340 MMcf/d. The rest of the produced natural gas was either sold or used at the production site.
A year after N.D. oil spill, cleanup goes on — One year after a pipeline rupture flooded a wheat field in northwestern North Dakota with more than 20,000 barrels of crude, Tesoro Corp. is still working around the clock cleaning up the oil spill — one of the largest to happen onshore in U.S. history. Cleanup costs have soared from the company’s original estimate of $4 million to a forecast of more than $20 million, and it may be at least another year before the work is completed, the company and state officials said. The oil-sopped parcel of land, about the size of seven football fields, is not usable for planting now. “It’s a big cleanup and it’s become part of our life,” farmer Steve Jensen said Monday. “The ground is still saturated with oil. And they’re out there seven days a week, 24 hours a day.”
‘It Will Never Be The Same’: North Dakota’s 840,000-Gallon Oil Spill One Year Later - One year ago, when more than 20,000 barrels (840,000 gallons) of crude oil spilled from a pipeline and soaked a wheat field in Tioga, North Dakota, the public almost never knew about it. After the spill was discovered by a lone farmer, it was not reported for nearly two weeks, and only after reporters from the The Associated Press asked about it specifically. Now, a year later, environmentalists say North Dakota’s oil spill reporting process has improved, but that more needs to be done to prevent those types of spills from happening in the first place. In North Dakota’s Bakken shale, more than 1.2 million barrels of oil are produced every day, and spills from wells and pipelines happen frequently. By all accounts, the year-old 20,000-barrel spill — one of the largest onshore spills in U.S. history — happened by chance. Tesoro Corp., the company who owns the pipeline, told the AP that the spill was caused by a lightning strike. The freak nature of the accident is apparently why no one knew about it until wheat farmer Steve Jensen discovered it during a harvest. To this day, the farmland is still sopped with oil, and Tesoro is still working to clean it up. “It’s a big cleanup and it’s become part of our life,” Jensen told the AP on Monday. “The ground is still saturated with oil. And they’re out there seven days a week, 24 hours a day.” The AP conducted an investigation after the spill, and found that nearly 300 oil spills and 750 “oil field incidents” had occurred in North Dakota since January 2012 — none of which were reported to the public.
The drilling industry’s explosion problem - Temperatures below 20 degrees Fahrenheit froze the valve on the back of Greg Bish’s frack truck. To thaw it, he fetched a blowtorch and put the 4-inch flame to the metal. The explosion blew him 75 feet, over a 7-foot-tall barbed-wire fence, and killed him. It might seem dangerous to apply a propane torch to the back of a large metal tank holding natural gas production waste, as Bish did that morning in 2010 just outside Elderton, Pa. But in the oil and gas industry, it’s not unusual. The oil and gas industry has more deaths from fires and explosions than any other private industry, according to an EnergyWire review of federal labor statistics. It employs less than 1 percent of the U.S. workforce, but in the past five years it has had more than 10 percent of all workplace fatalities from fires and explosions. An investigation of the drilling industry’s worker safety record and what it means for those living amid the boom. The pace dipped last year but has stayed high even as oil and gas companies, using advanced hydraulic fracturing techniques, pushed into more densely populated areas and fought to keep their exemption from regulations designed to prevent explosions at industrial sites.
Environmental groups: Crude oil train laws not sufficient --Stricter federal laws regulating the shipping of crude oil by rail do not go far enough to ensure the prevention of an oil spill or explosion, area environmental groups say.The U.S. Department of Transportation is considering new regulations for trains carrying crude oil out of South Dakota’s Bakken Shale, but Ned Sullivan, of the land trust organization Scenic Hudson, said those regulations come with too many loopholes. “A crude oil spill into the Hudson River would be catastrophic to the public health and natural resources of our region,” Sullivan said in a statement. “The federal government has the responsibility to create a system of regulations, inspections and emergency response procedures to protect our communities and the Hudson River .” The country is in the midst of a surge in the crude oil industry – with the amount moving through the United States rising from 9,500 carloads in 2008 to 415,000 carloads in 2013, according to the DOT. The Hudson Valley sees between 15 and 40 trains carrying crude travel through the area each week, reports say. On average, a shipment travels 1,000 miles from mine to refinery. Paul Gallay, the president of the environmental group Riverkeeper, said the proposed changes “defer to the rail and oil industry at every turn.”
Crude oil train disclosures raise risk of attack, regulators told --Information about rail shipments of crude oil should be kept secret because of potential threats from foreign terrorists and environmental extremists, two rail industry trade groups argued to federal regulators in an August document that was made public this week.However, the comments did not appear to sway the U.S. Department of Transportation, which earlier this month said that the public release of such documents posed no meaningful security threat, nor did any federal law shield them from disclosure. The Association of American Railroads and the American Short Line and Regional Railroad Association wrote that the disclosure of the documents was “antithetical” to security concerns expressed by the FBI and the Transportation Security Administration. “The public availability of this information elevates security risks by making it easier for someone intent on causing harm to target trains transporting crude oil,” the groups wrote. However, neither FBI nor TSA could point to specific threats.
Fracking Boom Prompts Oil Industry to Push for Crude Exports -- Oil and coal producers in the U.S. are planning to use mile-long tanker trains to transport vast quantities of fossil fuels to the coast through areas that environmental groups believe should be protected. The change in world fossil fuel production, consumption and costs caused by tar sands exploitation in Canada and the fracking boom in the U.S. is causing what Bill McKibben—author, environmental activist and co-founder of the international climate campaign group 350.org—calls a “chokepoint” in the unspoiled Northwest of the country. Coal is already being exported in even larger amounts from the U.S. because it cannot compete with cheaper gas from fracking. Now campaigners fear that the oil industry also wants to export cheap oil to Asia—although so far the companies deny it, saying it will be sent by sea to other parts of the U.S.The largest of the 11 proposals to build new or expand existing crude-by-rail terminals is that of Tesoro-Savage at the Port of Vancouver, Washington, just across the Columbia River from Portland.The company wants the capacity to transfer crude oil from the North American interior to seagoing tankers and barges. Four “unit trains,” each a mile long and comprising up to 100 tanker cars, would arrive at the terminal daily, delivering 360,000 barrels of oil. This would be the largest such terminal in the region.
Gas Pipeline Expansion Should Alarm Homeowners - Homeowners and communities are unprepared for an invasion of their cherished private yards and public spaces. The Mid-Atlantic region is facing an expansion of natural gas transport infrastructure that threatens communities’ health, safety and homes. With increased hydraulic fracturing (“fracking”) and plans to export liquefied natural gas (LNG), the gas industry needs supporting infrastructure. Beyond drilling wells, energy companies are building compressor stations and laying thousands of miles of pipelines. The Interstate Natural Gas Association of America has estimated that from 2011 to 2035 the industry must build nearly 15,000 miles of subsidiary lines — each year. It is hard to ignore the compressors and pipelines extending quickly through the Mid-Atlantic. Last month, Dominion Power gained the approval of the Federal Energy Regulatory Commission for a plan to convert a dormant LNG import facility at Cove Point on the Chesapeake Bay into a major exporting facility for fracked gas. With the FERC’s green light, Dominion will start exports from the Lusby, Md., facility in 2017. Now, residents are engaged in battles to protect their families and neighborhoods: Dominion’s plans will turn their lives upside down, threatening quality of life, health, safety and property values. Families are distraught. Approximately 360 homes lie within 4,500 feet of the site, to which large trucks will regularly haul heavy equipment and construction will generate noise. While an increase in pollution is undisputed, Dominion has easily satisfied the FERC’s pollution-abatement requirement by buying clean-air credits from elsewhere in Maryland — which will not alleviate the toxic conditions around the facility. Moreover, the possibility of an explosion is undeniable. Homeowners know that, unlike with oil-based fires that burn locally, an LNG fire could trigger an explosion that could race along the pipeline.
Pipeline Spills ‘Significant’ Amount Of Oil Into Louisiana Bayou - Pipeline workers discovered a 4,000-barrel crude oil spill in Louisiana last week, and say that mopping up the spill will likely keep cleanup crews and regulatory agencies in the sparsely-populated area for months. The oil spilled into Tete Bayou, and though it’s been contained enough to prevent it from entering Caddo Lake, which is a source of drinking water, the spill has killed 84 animals — mostly fish and reptiles — as of Sunday morning. Though no evacuations were ordered, strong fumes from the oil spill caused three families who lived nearby to voluntarily leave. Sunoco Logistics, which owns the pipeline, is paying for the families’ living expenses while they’re away from their homes.“I would call it a significant size spill,” Bill Rhotenberry, the Environmental Protection Agency’s federal on-scene coordinator told the Shreveport Times. The Sunoco pipeline carries oil 1,000 miles from Longview, Texas to Samaria, Michigan. Sunoco says that once pipeline monitors discovered a drop in pressure in the line at around 8 a.m. last Monday, they shut the pipeline down within 20 minutes. The segment of pipeline that runs from Longview into Mayersville, Mississippi remains shut off. The cause of the spill is being investigated. Sunoco has sent about 250 contractors to the site of the spill to clean up the spilled oil, and so far, about 2,400 barrels have been recovered. According to the EPA, the spill’s cleanup will likely take months. The EPA is also monitoring air quality near the pipeline spill to ensure it doesn’t pose a public health risk. So far, however, the agency says the levels of volatile organic contaminants (VOCs) coming from the spilled oil aren’t concerning.
Paying the Price of Tar Sands Expansion - In December 2013, after six years of community pushback, court battles, Environmental Protection Agency citations, and ongoing construction in spite of it all, BP’s $4.2 billion retrofitted facility came fully online. Part of the Whiting Refinery Modernization Project, this new coker creates a byproduct called pet coke that is burned for fuel like coal, but is much dirtier.It was now a tar sands refinery, capable of refining 350,000 barrels of the world’s dirtiest oil per day. And it was paid for, in large part, by U.S. taxpayers. A little-known tax break allows companies to write-off half of the cost of new equipment for refining tar sands and shale oil. According to a report by Oil Change International, this subsidy had a potential value to oil companies (and cost to taxpayers) of $610 million in 2013. Tar sands are petroleum deposits made up of bitumen mixed in with sand, water and clay. Their production is extremely destructive at every stage: from strip mining indigenous lands in Canada, to disastrous accidents along transportation routes, to dangerous emission levels produced by refining the heavy crude, to the hazards imposed on communities saddled with tar sands byproducts like petroleum coke (“petcoke”), and finally to the greenhouse gases pumped into the atmosphere when the end product is used for fuel. Despite all the reasons to keep tar sands in the ground, the refining equipment tax credit has helped put tar sands development in the U.S. on the rise, accelerating climate change at the expense––in every sense of the word––of American taxpayers.
Enbridge oil pipeline project delayed by spill concerns - Citing water-safety concerns, the Canada National Energy Board denied the application for an oil pipeline project proposed by Enbridge Pipelines of Calgary that would carry crude oil across the watersheds of Lake Ontario and St. Lawrence River — a move praised by Clayton environmental advocacy group Save the River, which opposed to the project. The denial of the application, made Oct. 6 by the energy board, will delay a project that would reverse the direction of oil shipped through a 639-kilometer section of Enbridge’s Line 9B pipe that runs from North Westover, Ontario, to Montreal, crossing numerous tributaries of the St. Lawrence River. Enbridge, meanwhile, will have to go back to the drawing board to address safety concerns expressed by the board. The pipeline’s oil capacity would increase from about 240,000 to 300,000 barrels per day under the plan, which would allow Enbridge to transport tar-sands oil — called diluted bitumen — from Alberta and the U.S. Bakken region to refineries in Quebec and eastern Canada. “Why anyone thinks using this pipeline to move heavy oil through these vitally important and sensitive watersheds is a good idea is beyond us,” D. Lee Willbanks, executive director of Save the River, said in a news release "Governments on both sides of the river must hold shippers of heavy oil, whether on land or the water, to the highest standards if this toxic product is going to be shipped at all.” The energy board decided that the Enbridge proposal did not include enough shutoff valves on each side of all major waterways that Line 9B crosses to limit the damage of accidental oil spills. The proposal that was rejected included shutoff valves within 1 kilometer (1,093.6 yards) at only six of 104 waterways crossed by the pipeline.
Oil at $80 a Barrel Muffles Forecasts for U.S. Shale Boom -- The bear market in oil has analysts reassessing the U.S. shale boom after five years of historic growth. The U.S. benchmark price dropped to $79.78 a barrel on Oct. 16, the lowest since June 2012. At that level, one-third of U.S. shale oil production would be uneconomic, analysts for New York-based Sanford C. Bernstein & Co. led by Bob Brackett said in a report yesterday. Drillers would add fewer barrels to domestic output than the previous year for the first time since 2010, according to Macquarie Group Ltd., ITG Investment Research and PKVerleger LLC. Horizontal drilling through shale accounts for as much as 55 percent of U.S. production and just about all the growth, according to Bloomberg Intelligence. The Paris-based International Energy Agency predicted in November that the U.S. would pass Russia and Saudi Arabia to become the biggest producer in the world by 2015. Though some forecasts show oil rebounding or stabilizing, any slower increase in U.S. output would shake perceptions for the global market, Output, much less growth, is difficult to maintain because shale wells deplete faster than conventional production. Oil production from shale drilling, which bores horizontally through hard rock, declines more than 80 percent in four years, more than three times faster than conventional, vertical wells, according to the IEA. New wells have to generate about 1.8 million barrels a day each year to keep production steady, Dwivedi said. At $80 a barrel, output would grow by 5 percent, down from a previous forecast of 12 percent, according to New York-based ITG.
Low Oil Prices Hurting U.S. Shale Operations - Yves Smith - Yves here. In yesterday’s Water Cooler, Lambert posted a link from Bloomberg that indicated that oil at $80 a barrel would pop the fracking bubble, an outcome we’d discussed previously. Some readers in comments expressed doubts. In fact, it was already happening as oil prices were falling from over $100 a barrel through the nineties. Seasoned energy hands had warned that shale operations could be shut down rapidly, and that has started to take place. However, the author of this article argues that the shutdowns are likely to be delayed and that most US shale operations have low break-even costs, insulating them from the impact of the oil price drop. However, he misses that another driver of the shale boom has been access to super-cheap credit and an overly-bullish mentality that has not factored in the short production lives of shale wells. The junk bond market has been much less accommodating of late, and if that skittishness continues, the prognosis isn’t quite as sanguine for the industry as Cunningham suggests.
Houston, We Have A "Fracking" Problem --Last week, I touched on the issue of oil prices and demand stating:"First, the development of the “shale oil” production over the last five years has caused oil inventories to surge at a time when demand for petroleum products is on the decline as shown below.""The obvious ramification of this is a “supply glut” which leads to a collapse in oil prices. The collapse in prices leads to production “shut ins,” loss of revenue, employee reductions, and many other negative economic consequences for a city dependent on the production of oil.Secondly, I have also discussed that the “fracking miracle” may not be all that it is believed to be due to fast production decline rates and massive amounts of leverage. Just recently Yves Smith posted an article discussing this very issue stating:"“The oil and gas sector is capital intensive. Drillers have borrowed phenomenal amounts of money, which was nearly free and grew on trees, to acquire leases and drill wells and install processing equipment and infrastructure. Even as debt was piling up, the terrific decline rates of fracked wells forced drillers to drill new wells just keep up with dropping production from old wells, and drill even more wells to show some kind of growth. One heck of a treadmill. Funded in part by junk debt.As with all things, the question of oil prices is nothing more than a supply/demand issue. As shown above, the sharp increase in production brought on by "fracking" has certainly been quite remarkable. However, this remarkable resurgence in oil production currently faces two extremely strong headwinds. The total amount of available refining capacity and the level of end demand are both declining. While the "fracking miracle" has boosted the production of raw crude in recent years, such production is only useful if you can convert the base commodity into a useful byproduct. The problem, as shown in the two charts below, is that the the number of operating refineries has continued to fall, as the regulatory environment has stifled the ability to build new plants, and operating plants are already running near full capacity.
Falling oil and gas prices are unambiguously good for the US economy, could save consumers $83 billion over next year - Over the last six months, retail gas prices in the US have fallen by 62 cents, from $3.71 per gallon in late April to $3.09 per gallon currently, according to GasBuddy.com (see blue line in chart above). That’s almost a 17% decline in prices at the pump, and have followed a 22% decline in oil prices over that period, from about $105 per barrel in August to about $82 per barrel currently (see brown line in chart above). How does that fall in retail gas prices translate into savings for consumers and households? The EIA estimates that Americans consume an average of 368,510,000 gallons of gas every day, so every one cent decline in the price of gas saves consumers $3.685 million per day, and $1.345 billion per year. Therefore, the 62 cent decline in gas prices since April will save consumers more than $83 billion over the next year, compared to the amount that would have been spent if prices stayed at $3.71 per gallon. On a per household basis, that would translate to an annual savings of more than $700 on average for every one of America’s 118 million households. For every additional penny that prices at the pump continue to fall, we can think of that as an additional $1.345 billion annual “tax cut” for consumers and alternatively as a $1.345 billion “economic stimulus” for the US economy. And therefore, those lower oil and gas prices are “unambiguously good for the US economy,” as Larry Kudlow pointed out in a recent commentary,
The good, the bad and the ugly of falling energy prices - The recent correction in the price of crude oil should have an immediate positive impact on the US consumer as well as on a number of business sectors. However there also may be a significant economic downside to this adjustment. Here are some facts to consider.
- 1. The good: The US consumer is not only about to benefit from materially lower gasoline prices (see chart), but also from cheaper heating oil. With wages suppressed, the savings could be quite impactful, particularly for families with incomes below $50K per year. Merrill Lynch: - ... consumers will likely respond quickly to the saving in energy costs. Many families live “hand to mouth”, spending whatever income is available. Over time, energy costs have become a much bigger part of budgets for low income families. In 2012, families with income below $50,000 spent an average of 21.4% of their income on energy. This is almost double the share in 2001, and it is almost triple the share for families with income above $50,000.
- 2. The bad: The US has become a major energy producer, with the sector partially responsible for improving economic growth and lower unemployment in recent years. As an example here is the GDP of Texas as a percentage of the US GDP. This trend is driven in part by the recent energy boom in the state.
- 3. The ugly: A significant number of middle market energy firms in the US - many funded via private capital (above) - are highly leveraged. The leveraged finance markets are becoming quite concerned about the situation - even for larger firms with traded debt. Here is the yield spread between the energy sector loans in the Credit Suisse Leveraged Loan Index and the index as a whole.
Despite Slumping Prices, No End in Sight for U.S. Oil Production Boom - Even after a drop of as much as 25 percent in oil prices since early summer, several government and private reports say that it would take a drop of $10 to $20 a barrel more — to as low as $60 a barrel — to slow production even modestly.On the downside, taxes and royalties on oil will decline, potentially cutting into the finances of oil-producing states like Texas, Alaska, Oklahoma and North Dakota. And it will continue to put pressure on the Organization of the Petroleum Exporting Countries to cut output to support prices, as well as cause economic pain to big producers like Russia, Venezuela and Iran. Current production levels can be sustained in the shale fields in 2015 even if the Brent global oil benchmark, which fell to just under $84 a barrel at one point this week, dropped to as low as $60 to $65, according to Rystad Energy, an international oil and gas consultancy based in Norway.Slowing American oil production is like slowing a freight train moving at high speed. The current production of 8.7 million barrels a day, the highest in nearly a quarter-century, is more than a million barrels a day higher than it was only a year ago. Most companies make their investment decisions well in advance and need months to slow exploration because of contracts with service companies. And if they do decide to cut back some drilling, they will pick the least prospective fields first as they continue developing the richest prospects.
Natural Gas: The New Gold - IMF blog - Natural gas is creating a new reality for economies around the world. Three major developments of the past few years have thrust natural gas into the spotlight: the shale gas revolution in the United States, the reduction in nuclear power supply following the Fukushima disaster in Japan, and geopolitical tensions between Russia and Ukraine. Over the last decade, the discovery of massive quantities of unconventional gas resources around the world has transformed global energy markets, and reshaped the geography of global energy trade (see map). Consumption of natural gas now accounts for nearly 25 percent of global primary energy consumption. Meanwhile, the share of oil has declined from 50 percent in 1970 to about 30 percent today. Natural gas, however, is different from other energy sources. Being lighter than air, it is a commodity that doesn’t travel very easily and is expensive to transport. Hence, natural gas markets tend to be regional, and much less integrated than oil markets. Shipping or transporting natural gas requires either costly pipeline networks or liquefaction infrastructure and equipment, including dedicated vessels, and then re-gasification at the destination. The limited global integration of gas markets has resulted in substantial price differences across regions in recent years due to the U.S. shale gas boom and the Fukushima disaster, in spite of increasing liquefied natural gas trade. With advances in shale rock drilling, a sharp surge in U.S. gas production has made the country the world’s largest natural gas producer, and soon expected to become a net exporter of natural gas. The shale gas boom has also had a significant impact on the patterns of global energy trade: U.S. fossil fuel imports decreased to $225 billion in 2013 from $412 billion in 2008. Surging supply has also steeply driven down natural gas prices in the United States by about 70 percent in recent years, introducing substantial price differences across other regions (see chart). For instance, U.S. gas sells for $4 per million British thermal units, compared with $10 in Europe and close to $17 in Asia.
Drowning In Oil Again: For 4 years now the oil price (Brent) has been range bound between $90 and $130 per barrel (Figure 2). This is where it settled after the convulsions of the $148 per barrel peak in 2008 followed by the financial crash. Recently it has dipped to around the $80 mark and although we have seen a slight recovery many analysts believe it could break lower. With the world in turmoil, including OPEC producers Iraq and Libya ± Iran, and Russia cast out by the West, one might expect the oil price to be quite perky. But the opposite is true. This post takes a look at some of the key production indicators from OPEC, Europe, N America and Russia. But I believe one needs to look no further than Figure 1 to understand the weakness in the oil price. Rampant production in the USA, the world’s largest oil producer and importer, means that competition for supplies on the international markets is weakening. The world is once again drowning in oil. So does that mean the real energy crisis is over? Well not quite. One needs to understand that shale oil, the US miracle, is expensive to produce. Over production of an expensive resource that dumps the price below the profit level is one of the effects of broken capitalism on the back side of Hubbert’s peak.
Oilprice Intelligence Report: Pressure May Remain On Oil Prices Oil prices continued to fall this week on ample supply and signals from OPEC members Saudi Arabia and Kuwait that they can deal with lower prices and are unlikely to reduce output. On Monday, Brent crude futures dropped further to $87.74 a barrel—the lowest level since December 2010--while WTI futures were down to $84.68 a barrel. Saudi Arabia, for its part, has suggested it could handle $80/barrel prices. On Tuesday, Brent crude prices slipped further, to$87.03. Kuwait has also said that it will not be cutting output and predicted prices falling to as low as $76 a barrel before winter sets in and prices start to rise again. The next OPEC meeting is scheduled for 27 November, when the organization will consider targets for 2015. But it is unclear how long the party will last. Several major investment banks predict the decline in oil prices will soon come to a halt, with a likely floor price of around $80 per barrel. The rebound could already be underway, with both WTI and Brent trading in positive territory after hitting lows on Thursday. WTI briefly dropped below $80 per barrel. But oil was back up on Friday after Goldman Sachs said that oil markets are not oversupplied. “Prices have likely overshot to the downside,” the bank wrote in a research note.
How will Saudi Arabia respond to lower oil prices? -- Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath. When oil demand fell in the 1981-82 recession, the Saudis cut production by 6 million barrels a day in an effort to soften the decline in oil prices. They also cut production in response to lower demand in the 2001 recession and the most recent recession. On the other hand, the kingdom boosted production quickly beginning in August 1990 and January 2003 in anticipation of lost production from Iraq in the two Gulf Wars. This historical behavior led many observers to believe that Saudi Arabia would always play the role of a swing producer to stabilize the price of oil. But that’s hardly an accurate characterization of what happened during 2005-2007, when Saudi production declined even as prices skyrocketed. If that production decline was intentional, it was a dramatic departure from previous patterns. I remain skeptical of the claim that Saudi Arabia is ever going to produce much in excess of 10 mb/d, regardless of what’s going on in the market.Last week I discussed the three main factors in the recent fall in oil prices: (1) signs of a return of Libyan production to historical levels, (2) surging production from the U.S., and (3) growing indications of weakness in the world economy.As far as Libya is concerned, the politics on the ground remain quite unsettled. It makes sense to wait and see if anticipated production gains are really going to hold before anybody makes major adjustments. In terms of surging U.S. production, the key question is how low the price can get before significant numbers of U.S. producers decide to pull out. If world economic growth indeed slows, and if most of the frackers are willing to keep going strong even if the price falls to $80 a barrel, trying to maintain the price at $90 could be a losing bet for the Saudis.
Gail Tverberg: Eight Pieces of Our Oil Price Predicament - naked capitalism Yves here. As oil prices have come into focus as a result of a recent Saudi decision to facilitate a reset at a lower price per barrel, they've come into focus yet again as a critical nexus of economic and political power, and that's before you get to the complicating overlay of climate change considerations. This article by Gail Tverberg takes a more sophisticated, multi-persepctive approach than the overwhelming majority of articles on this topic. One of her big messages is that there is no way the world economy is getting divorced from oil any time soon. Even so, I have some minor points of contention. For instance, she correctly points out that oil producers, even the Saudis, need oil prices to be at a moderately high prices to sustain national budgets. But Riyadh has a very low production break even point, a large cash horde, and plenty of borrowing capacity. The desert kingdom could afford a price war, say to hurt geopolitical enemies or to forestall investment in and development of alternative energy sources. Low oil prices make other energy sources look unattractive, and volatile prices also deter investment, making it well-nigh impossible to forecast cost advantages (if any) and end user takeup
Update on crude oil markets -- Crude prices came under pressure again today. According to Reuters (from last week), the Saudis “will accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two”. Their goal is to shake out some of the high-cost competition (such as the US). The Saudis also do not want to choke off the economies of their customers by cutting production – current production levels are likely to stay unchanged. Spot crude is now holding right in the middle of the Saudis’ preferred range at around $85/bbl. Both OPEC and non-OPEC producers are not particularly happy with Saudi Arabia right now (particularly Russia, Iran and Venezuela) – these countries all want to see production cuts. There remains a difference in demand profile between international crude markets and those in the US. While both of the futures curves shifted sharply lower, the WTI curve, unlike Brent, remains in backwardation. It means that US crude oil market participants have an incentive to take oil out of storage rather than storing it. This indicates a more robust US spot crude demand than exists globally.
These 6 Countries Will Be Screwed If Oil Prices Keep Falling - The collapse in oil prices is already a major cause of concern for countries heavily reliant on exports of the commodity. For some, it could be a matter of avoiding a severe recession. Here's why: For governments in oil-exporting countries to meet their spending commitments they need oil to remain above a certain price. With oil prices under $87 a barrel, countries that rely on high oil prices, including Venezuela, Russia, and Saudi Arabia, may have a reason to be concerned. This chart shows the price per barrel that the six most exposed countries need to meet their national budgets. Remember, the price Friday is a piffling $87.Venezuela literally needs the price of oil to double to keep its house in fiscal order. If the price remains depressed, these countries will either be forced to borrow more to cover the shortfall in oil tax revenues or backtrack on spending promises. Cutting back on spending pledges would be highly embarrassing for these countries' governments. In the cases of Russia and Venezuela, tapping bond markets for financing could be very expensive as both countries are currently regarded as highly risky by international investors.
U.S. threatens sanctions on buyers of ISIS oil : The Obama administration on Thursday threatened to slap sanctions on anyone buying oil from Islamic State militants in an effort to disrupt what it said was a $1 million a day funding source. "With the important exception of some state-sponsored terrorist organizations, ISIL is probably the best-funded terrorist organization we have confronted," Cohen said, referring to another name for Islamic State. His remarks were prepared for delivery at the Carnegie Endowment for International Peace. ISIS is generating tens of millions of dollars a month through a combination of oil sales, ransom, extortion and other criminal activities and support from wealthy donors, Cohen said in laying out the most comprehensive outline yet of the U.S. financial strategy against the group. Cohen said that each day, ISIS earns $1 million from oil sales alone. Cohen, the Obama administration's point man on sanctions, said the Syrian government, which has been fighting a long civil war against opposition forces, has also apparently agreed to buy oil from IS. "The middlemen, traders, refiners, transport companies, and anyone else that handles ISIL's oil should know that we are hard at work identifying them, and that we have tools at hand to stop them," Cohen said.
Meanwhile, This Is Who Is Quietly Buying All The Cheap Oil -- With the US Shale Oil industry up in arms, Venezuela screaming, and Russia awkwardly quiet (as the Ruble slides with the falling oil price stabilizing domestic inflows), the 'secret' Saudi-US oil deal that pressured prices for crude down to $80 (18-month lows today) has 'hurt' a lot of the world's producer nations. However, as Bloomberg reports, there is one nation that is very grateful. The number of supertankers sailing toward China’s ports surged to a nine-month high as over 80 very large crude carriers (VLCCs) - the industry’s biggest ships - sail toward the Asian country’s ports. At an average of 2 million barrels each, the 160 million barrels will help refill China's 727 million barrel SPR which it started in 2012. There are 89 tankers sailing for Chinese ports, 80 of which are VLCCs - the highest since January 3rd.
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