Sunday, November 23, 2014

Fed data shows drilling slowdown, Halliburton acquires Baker Hughes, Kasich & ODNR sued, et al

after weeks of anecdotal stories about drillers cutting back on activity, this week's economic data provided the first hard evidence that it's actually been occurring...the Fed's G17 release on Industrial production and Capacity Utilization for October showed that US industrial production fell slightly, primarily because production from the "mining" sector, which includes gas & oil production, fell .9% for the month, while the oil & gas extraction component of that fell 1.1%, the kind of drop not usually seen unless weather disrupts drilling in the Gulf...the associated drop in capacity utilization, which is the percentage oil & gas drilling equipment that was in use during the month, was even more pronounced; from an operating rate of 98.9975% in September, equipment utilization for gas and oil drillers fell to 96.7865% in October, a drop of 2.2% in the percentage of gas & oil well drilling equipment that was in use, which probably means they had ordered new equipment earlier this year only to idle it when it was delivered...admittedly, one month's data doesnt prove a lot, especially in light of the growth the industry has seen over recent years, but we're already well through November without a change in the downward trajectory of oil prices, so if that continues, we may see a contraction in the industry in the coming year at least as great as the recent expansion...

the major news in the gas and oil industry this week, which was left mostly untouched by environmental websites, was the acquisition of Baker Hughes by Halliburton for $34.6 billion...although neither company is a household name, you should be familiar with Halliburton, if only because of the "Halliburton loophole" which was included in the Energy Policy Act of 2005 by former Halliburton CEO Dick Cheney, which exempted the industry from disclosing the chemicals involved in fracking operations that would normally be required to be made public under federal clean water laws...and you may also remember Baker Hughes as the distributor of the hot-pink fracking drill bits in their anti-cancer ad campaign purporting to imply fracking helps cure breast tie this together, Halliburton and Baker Hughes, together with Schlumberger, are the three largest (Fortune 100 size) oil & gas industry servicing companies; they've developed the technology and tools for drilling, provide the software to map the reservoirs, and supply the machines and chemicals for fracking; all the companies in the industry, from Exxon to a start-up wildcatter, use their services....why this is important to us is that up until now, Baker Hughes has been the only supplier of those proprietary chemicals used in fracking willing to disclose all of its fracking fluid components, phasing out the use of their “trade secret” claims; hence drillers that are using Baker Hughes' fluids have posting that information to since the beginning of October...Halliburton, on the other hand, has been one of the companies most committed to keeping their fracking fluids, assuming this merger isnt challenged on anti trust grounds (unlikely because Schlumberger is larger than either) we may see a return to the more regressive attitudes about chemical disclosure in the future..

the major news in Ohio this week was that two water watchdog groups, the Fresh Water Accountability Project and Food & Water Water Watch, sued Gov Kasich and the ODNR, charging that they illegally approved 23 specific fracking waste handling facilities...what the complaint is about isn't any news to any of us who've been watching Ohio become a dumping ground for the waste deemed too toxic or too radioactive to dispose of in Pennsylvania...and we know why this is happening, too; ODNR is paid 5 cents a barrel for in-state waste and 20 cents a barrel out-of-state waste, which encourages the ODNR to quadruple their profits while allowing Ohio to be turned into the national cesspool...remember, the Federal Government Accountability Office (GAO) reported a few months ago that Ohio had the weakest regulatory oversight of fracking waste disposal in the nation, with no requirements that wast haulers disclose the chemicals in the waste before getting a permit to dump a result of the lack of regulation in Ohio, Pennsylvania has fewer than a dozen injection wells while Ohio has hundreds; hopefully this lawsuit will move Ohio towards changing that...

so once again we'll start with the news relevant to Ohio...other stories this week included below involve the arrest and jailing of Sandra Steingraber and 50 others, who've been attempting to block a gas storage facility being constructed in the salt caverns adjacent to Seneca Lake, and details on the one-vote defeat of the "Keystone XL Pipeline Approval Act.” in the Senate, which we expect will be back for another vote when the new Congress convenes in January...

Concerns, protests over Ohio fracking: About a half-dozen members of Radioactive Waste Alert and Food & Water Watch protested outside a downtown Columbus hotel where Gov. John Kasich offered a pre-election speech. The environmental advocates are seeking a ban on horizontal hydraulic fracturing-related activities in the state. “We’re out here today to demand that Gov. Kasich give us answers on how he’s going to protect us from the toxic radioactive waste from fracking and how we can move forward with an honest debate about whether or not we should be fracking in the first place,” said Alison Auciello, an organizer with Food & Water Watch.   During that same speech, Kasich again smacked out-of-state oil and gas companies, industry groups and Republican lawmakers for refusing to back his proposed increase to severance taxes, saying he would continue to fight to implement higher rates on fuel produced via horizontal hydraulic fracturing. He said he may push for a higher rate than he initially proposed, using the proceeds to help local communities affected by the fracking industry and to cut overall tax rates. “This is a total and complete ripoff of the people of this state,” Kasich said of the current severance tax rate. “It’s outrageous.”

ODNR sued for approving fracking waste sites: A lawsuit was filed in Franklin County court against Gov. Kasich and the Ohio Department of Natural Resources for the approval of at least 23 fracking waste handling, storage, processing and recycling facilities to operate. The facilities were authorized by ODNR “Chief’s Orders," bypassing the official rule making process required to permit such facilities, according to a press release from the Fresh Water Accountability Project, which along with Food and Water Watch brought the suit. “I do not know what it takes to get our governing bodies to take action to protect Ohio’s environmental and economic future. These facilities are an imminent threat to public health,” Lea Harper, managing director of FWAP, said in a statement.

Groups Sue Ohio Governor for Illegally Making State a Fracking Waste Dump -- Two environmental watchdog groups have sued Ohio Governor John Kasich and the Ohio Department of Natural Resources (ODNR), charging that they illegally approved 23 facilities to handle the handling, storage, processing and recycling of fracking waste, bypassing the official rulemaking process. The lawsuit was filed by the Fresh Water Accountability Project and Food & Water Water Watch in the Franklin County court.  The suit says that ODNR skirted the formal process, including a legally required public comment period. No regulations have been made available to the public to comment on. The Ohio-based Fresh Water Accountability Project has already asked the ODNR, Governor Kasich and the U.S. Environmental Protection Agency to step in and stop the building and operation of frack waste facilities until the proper procedures are followed. But given Ohio’s track record on friendliness toward fracking operators and the governor’s own track record of anti-environmental policies, secrecy and failure to listen to opinions that diverge from his own, a lawsuit may have been the only way to go. “It truly is unfortunate that the only remedy that can now be sought is through the courts once again,” said Lea Harper, managing director of the Fresh Water Accountability Project

Fracking industry suing over drilling bans -- As fracking spreads in the United States, voters in more and more cities are banning drilling, waste disposal and other practices associated with deep-shale oil and gas wells. But those bans have prompted lawsuits filed by state governments or the oil and gas industry raising a legal question: Who gets to say where fracking can happen? “The Ohio legislature made it very clear that the state, not the local governments, controls this type of activity,” said John Keller, a Columbus lawyer who is representing Beck Energy Corp. of Ravenna in a lawsuit filed against the city of Munroe Falls in Summit County. “Just like the federal government can take control of certain activities, such as immigration, the state can pre-empt local governments from certain activities, one of which is oil and gas drilling,” Keller said. The Ohio Department of Natural Resources issues permits for oil and gas drilling, injection wells and other activities related to the field. But community leaders and environmental activists say the law is not that clear. The measure in Munroe Falls doesn’t outright ban oil and gas development, but it uses zoning laws to require a wider berth around the wells than what is required under state laws.

Waterless fracking comes to Tuscarawas County - A Canadian company that specializes in waterless fracking is putting its technology to use in the Utica Shale play in Tuscarawas County. Besides saving water, the new technology has the potential to give energy companies access to the oil trapped deep underground in the Utica play. GasFrac Energy Services uses liquid butane and mineral oil to fracture wells, instead of water — which is how all previous wells have been fracked in the Utica play. It generally takes more than 2 million gallons of fresh water to frack a well. The company announced last week that it had begun fracturing its first well in the Utica, but it did not disclose its partners in the well. It said a number of companies have an interest in the project. One of the likely partners is EV Energy Partners, which is drilling a test well in Clay Township near Port Washington with eight other companies. That well is being fractured with liquid butane and mineral oil. According to EV Energy, the well could begin production in December.

Company Halts Plan To Frack 3,000 Feet From Pennsylvania School -- A company’s plan to frack for natural gas about a half mile from a Pennsylvania school district of 3,200 kids has been suspended, just weeks after a group of concerned parents and environmentalists launched a legal challenge against the project. Rex Energy announced last weekthat it would stop preparing to drill on the farm of Bob and Kim Geyer in Middlesex, Pennsylvania — a property located about 3,000 feet from the Mars School District. The reason, Rex told the Butler Eagle, was a lawsuit brought in October by local families and environmental groups Delaware Riverkeeper Network and Clean Air Council.. “This isn’t just about the Geyer’s site — it’s about anybody that wants to develop, and the state government needs to realize that they need to stop putting children in harm’s way in order to continue to develop shale.” The lawsuit commenced last month argued that the Middlesex Township Board of Supervisors violated Pennsylvania’s state Constitution when it voted to change the township’s zoning law back in August. Those changes legally opened up most of the rural town of Middlesex for fracking, even on residential lands. The zoning law change has wide implications for drilling and fracking in Middlesex, but the main reason for the change was to pave the way for the proposed gas wells near the school. The Geyer well site would be placed on farmland owned by Middlesex residents Bob and Kim Geyer, and operated by a company called Rex Energy. The wells would be about 3,000 feet from all of the school district’s buildings, a youth homeless center, and just 800 feet from a residential community where many of the schoolkids live.

Chesapeake Energy Faces Subpoena on Royalty Payment Practices - The U.S. Department of Justice is investigating how Chesapeake Energy pays landowners for the natural gas it drills on their property, according to disclosures made earlier this month in the company's filings with the Securities and Exchange Commission.   The probe comes afteryears of complaints by landowners that they are being underpaid, and an investigation by ProPublica, which found the company was using the fees it had been been paying those landowners to repay billions of dollars of hidden corporate debt instead.  Chesapeake received subpoenas about its royalty practices from the federal government and several states, the company stated Nov. 6. The company did not respond to a request for comment from ProPublica.   In lawsuits filed in several states, Chesapeake has been accused of inflating its operating expenses and then deducting those expenses from the share of income it pays for the right to drill on peoples' land. Chesapeake has paid hundreds of millions of dollars in judgments and to settle some of these cases.  In mid-2013, landowners in Pennsylvania who had leased their gas rights to Chesapeake saw the payments they were receiving abruptly slashed by as much as 97 percent. In some cases checks for thousands of dollars a month were replaced with payments for less than a dollar. Those early complaints prompted a probe by Pennsylvania's Attorney General and a letter from the state's governor, Tom Corbett, to Chesapeake's chief executive calling the practices"unfair and perhaps illegal."

As fracking booms, waste spills rise — and so do arsenic levels in groundwater -  There are now 8,000 fracking wells in Pennsylvania, producing billions of gallons of "frackwater" — and an average of more than one wastewater spill per week so far this year.  And as the industry booms, scientists from the US Geological Survey, are trying determine the effects of this wastewater on local groundwater and the surrounding environment. "One of the main things we’re trying to do is identify what the important potential pathways to the environment are," says Isabelle Cozzarelli, a geochemist leading the team of USGS researchers.  Her team is looking closely at one question in particular: What happens when tiny organisms in the soil come in contact with frackwater? These bugs are like the Earth’s gut bacteria, Cozzarelli explains. This is where researchers have found an unexpected problem: the more food the bacteria get from a spill, the more iron they breathe. Iron minerals found in soil are a frequent host for another element: arsenic, a known human carcinogen. When a bacteria breathes in that iron, the arsenic is released and becomes water-soluble. And suddenly unsafe levels of arsenic get released into the groundwater.

Where Not to Frack a Big Gas Well -- Where there already is a high likelihood of methane leakage into groundwater.  Which indicates that localized faulting is venting bigogenic and thermogenic gas layers into the aquifer.  Not a good place to punch thousands of massively big fracking holes. . . which simply act as conduits for gas deposits into groundwater.  – Well-water tested in Wayne and Pike counties contains low-to-moderate concentrations of naturally occurring methane, according to new studies by the U.S. Geological Survey.  None of the water tested in these two studies exceeded the Pennsylvania Department of Environmental Resources action level of 7 milligrams per liter for methane in well water.  In Wayne County, about 65 percent, or 22 of the 34 private drinking-water supply wells tested-contained concentrations of dissolved methane high enough to detect in laboratory testing, but most methane concentrations were low, less than 0.1 milligrams per liter. Three — or about 10 percent — of the 34 tested wells in Wayne County produced groundwater with dissolved methane concentrations near or greater than 1 milligram per liter and as high as 3.3 milligrams per liter; these relatively elevated concentrations are at least 10 times greater than methane concentrations in the other well-water samples. In the Pike County study, about 80 percent — or 16 of 20 tested wells — contained detectable concentrations of methane, with two wells having methane concentrations greater than 1 milligram per liter and as high as 5.8 milligrams per liter. The concentrations of dissolved methane in about 10 percent of well-water samples in both studies were high enough to allow for isotopic analysis to identify the type of natural gas in the water.

Williams Exploration Bails on NE Marcellus - WPX Energy Inc. will divest from the Marcellus Shale with no plans to drill any new wells in Pennsylvania for the foreseeable future. The Tulsa-based company spun off from Williams Companies Inc. in 2011. Its new CEO, petroleum engineer Rick Muncrief, joined the company in May and took a hard look at WPX’s assets, spokeswoman Susan Oliver said. WPX will now focus on developing its acreage in the oil and natural gas liquids fields of Colorado, North Dakota and New Mexico, she said. “The decision was made to divest of the Marcellus asset because we get a better return with drilling for oil and natural gas liquids than the dry gas here,” she said. Its decision came as no surprise to Lou D’Amico, president and director of the Pennsylvania Independent Oil and Gas Association.  “I think there are a number of companies that are looking at possibility of getting out of the dry gas portion of the Marcellus,” he said. “Right now with the current prices, there’s not a lot to justify additional drilling in the area.”

What It’s Like to Have Fracking Next Door (video) Ed Wade’s property straddles the Wetzel and Marsh county lines in rural West Virginia and it has a conventional gas well on it. “You could cover the whole [well] pad with three pickups,” said Wade. And West Virginia has lots of conventional wells — more than 50,000 at last count. West Virginians are so well acquainted with gas drilling that when companies began using high-volume horizontal hydraulic fracturing in 2006 to access areas of the Marcellus Shale that underlie the state, most residents and regulators were unprepared for the massive footprint of the operations and the impact on their communities. When it comes to a conventional well and a Marcellus well, “There is no comparison, none whatsoever,” said Wade, who works with the Wetzel County Action Group. “You live in the country for a reason and it just takes that and turns it upside down. You know how they preach all the time that natural gas burns cleaner than coal; well, it may burn cleaner than coal, but it’s a hell of a lot dirtier to extract.”

Legal Experts Say Pipeline Companies Cant Yet Claim Eminent Domain / Public News Service: - Pipeline companies who want to build lines through West Virginia and neighboring Virginia have told some landowners they can survey on their land without the landowners' permission. Legal experts, however, say those companies don't have that right - yet. Attorney Joe Lovett with with Appalachian Mountain Advocates says pipelines can only claim eminent domain, and the right to survey without permission, when they prove their projects serve a genuine public need. He says the pipeline companies in question haven't done that. "The power of eminent domain is an extraordinary power, only granted for public purposes," says Lovett. "It's improper for a company just to assert that its project is for public use, without actually having had that determined."  Three planned natural gas pipelines - including Dominion's huge Atlantic Coast Pipeline - would bring Marcellus Shale natural gas to eastern states, including Virginia and North Carolina. The companies say the pipelines are needed to bring natural gas, largely extracted by hydraulic fracturing, or "fracking," to market. Dominion has sent letters to West Virginia and Virginia landowners, indicating they may sue if denied permission to survey for the pipelines' routes. Lovett and other lawyers have described that as bullying. More importantly, Lovett says, the pipeline companies' threat to litigate might be a bluff. He says if a pipeline is coming through your land, get an attorney.

Marcellus Watch: LPG storage plan needs to stand trial - Crestwood’s plan is to turn a profit by stuffing natural gas and LPG from Marcellus Shale fracking operations in Pennsylvania into the cheapest, riskiest type of underground storage facility in the industry — salt caverns.  The Seneca caverns are deeply flawed, bounded by layers of salt and brittle shale rock. They are subject to collapse and leakage, and the residents who live next to them face the statistically significant prospect of a catastrophic accident or a forced evacuation.The company has repeatedly attempted to conceal that danger from the people it would put at risk. The DEC has enabled that irresponsible behavior out of fear that transparency invites controversy.In late 2011, the agency held two public hearings on the LPG project in a Watkins Glen school auditorium.But they were largely for show because the DEC was withholding key information from the hundreds who showed up. The DEC still keeps key parts of the company’s “reservoir suitability report” under lock and key. And while the state geologist must by law sign off on the integrity of caverns used for hydrocarbon storage, his reports — if they exist — aren’t public record.

Steingraber, Boland and Micklem Sentenced to 15 Days in Jail for Protesting Methane Gas Storage --  Renowned author, biologist and advocate Sandra Steingraber, PhD, U.S. Air Force veteran Colleen Boland (retired) and avid environmentalist Roland Micklem headed to the Chemung County jail Wednesday evening after pleading guilty and refusing to pay a fine in New York’s Reading Town Court. Judge Raymond Barry issued the maximum jail sentence of 15 days.  Steingraber, Boland and Micklem were arrested forblockading the gates of Texas-based Crestwood Midstream’s gas storage facility on the shore of New York’s Seneca Lake. They are part of the “We Are Seneca Lake” campaign working to stop the major expansion project at Crestwood’s methane gas storage facility where plans are underway to store highly pressurized, explosive gas in abandoned salt caverns on the west side of Seneca Lake. Micklem, who will not have to serve his full sentence, was released yesterday afternoon for health reasons. “I’m a die-hard environmentalist and I think that if we do not protect our environment, we are all history. A man’s got to do what a man’s got to do,” said the 86-year-old. Yesterday nine more people were arrested for trespassing while blockading the gates of Crestwood, including winery owners and local business leaders, which shut down the facility for more than seven hours. To date, there have been 61 arrests involving 56 individuals in the last four weeks. Today, 12 more people are blockading the gates at the Crestwood facility. More than 600 citizens have signed a pledge to resist the Seneca Lake fracked-gas infrastructure project.

“All My Pals Are in the Slammer”  - Sounds like a country and western song. But it describes what happened to my Upstate friends when nut cuttin’ time came on global warming. Most of the people arrested are friends of mine, including our dear friend Sara Hess, who sent me this: “Yesterday, I joined the growing ranks of people who have been arrested at Crestwood’s gates near Watkins Glen.  During the arrest, a man asked me why we were using this tactic.  He suggested that rather than paying fines ($375 each, if we chose to pay it), we could hire a lobbyist.  The obvious implication was that a lobbyist could make a difference, whereas, we were just wasting our time and money. I replied that we had already filled buses with hundreds of people, taking them to Albany to talk to the Governor and legislators to try to stop drilling and fossil fuel build-out in New York.  And that we had a legal team of excellent attorneys, working on legal angles. With more time and thought, I would have added that we have sent tens of thousands of comments to FERC and the DEC, and attended multiple hearings and meetings, at every opportunity we had.  That we had persuaded 3 of the 4 counties and 5 townships with shorelines on Seneca Lake to oppose the gas storage.  Personally, over the past 6 years, I joined with thousands of others who have devoted significant time and energy to the anti-fracking movement, which is now focused on stopping the gas industry from rapidly installing new pipelines, storage facilities, waste dumps, compressor stations, and more in New York.  I recently made a list of over 60 different tactics we’ve used, including everything from mass marches to show our strength, to installing solar panels on our roofs. But, until yesterday, I had not taken the step of civil resistance.  The man asked me yesterday, “Why this?”, but, given my years of looking intently for ways to influence public policy, the other question is “Why now?” All I can say is, I’ve tried everything else.  This is a last resort, certainly not the first one.

Sandra Steingraber: Why I am in Jail - I have come to believe that a successful civil disobedience campaign likewise depends on the willingness of at least some of us to gladly accept jail time over other kinds of sentences, such as paying fines. There are four reasons for this. First, it shows respect for the law. In my case, I was arrested for trespassing on the driveway of a Texas-based energy company that has the sole intention of turning the crumbling salt mines underneath the hillside into massive gas tanks for the highly-pressurized products of fracking: methane, propane and butane. I refuse to pay a fine to excuse my crime and so accepted the lawful consequences of my actions. Second, extending one’s civil disobedience testimony in jail shows seriousness of intent. By our willing separation from our families, by our sacrifice and consent to suffer, by our very absence, we are saying that we object in the strongest terms to the transformation of our beloved Finger Lakes community into a hub for fracking. . Third, by filling the jails with mothers, elders and veterans, we peacefully provoke a crisis that cannot be ignored by media or political leaders. Of course, civil disobedience is always a method of last recourse, deployed when all other methods of addressing a grievance have been exhausted. We have turned over all stones. We have submitted comments, written letters, offered testimony, filed Freedom of Information requests for secret documents—only to see our legitimate concerns brushed aside. And the fourth reason is this: spending time in jail is a time of personal transformation. Alone with a pencil, some inmate request forms for stationery, the Bible and your own thoughts, you discover that you are braver than you knew. You are doing time, and time offers the possibility of rededicating oneself to the necessary work ahead: dismantling the fossil fuel industry in the last 20 years left to us, before the climate crisis spins into unfixable, unending calamity.

Finger Lake Fracking --“These are just ordinary people who have exhausted every possible means of expressing their opposition and are at wits’ end,” says Yvonne Taylor, a co-founder of Gas Free Seneca. On Wednesday evening, Steingraber was taken away in handcuffs from the small town hall in Reading, New York, alongside 86-year-old Roland Micklem and Colleen Boland, a retired Air Force sergeant. All three had pled guilty to trespassing on the property of Crestwood Midstream, a Houston-based natural gas company that stores fracked methane in giant underground salt caverns along the western shore of Seneca Lake, the largest of the Finger Lakes.  Steingraber, Micklem and Boland, who each chose to spend 15 days in jail rather than pay the $250 fine, are among more than 50 people who have been arrested over the past four weeks during a series of blockades to protest Crestwood’s plans to expand its methane storage in the salt caverns by a third. (Micklem ended up being released Thursday due to health concerns.)  In addition to the methane expansion, the activists are also fighting a separate Crestwood project that would convert two caverns into a facility that could store 2.1 billion barrels of liquefied petroleum gas (LPG)—mostly propane and some butane. The projects, which were first proposed five years ago by Inergy, Crestwood’s predecessor company, have faced strong opposition from locals who see the potential for catastrophic accidents and environmental devastation, and fear the industrialization of a region whose economic condition depends heavily on its environmental integrity. So far, 13 municipalities have passed resolutions opposing the LPG project, including Watkins Glen, which lies two miles south of the Crestwood site and is home to 1,900 people.

Hundreds Rally Against Proposed Natural Gas Pipeline In Massachusetts -- Hundreds of residents from three Northeastern states rallied against a proposed natural gas pipeline Saturday, saying that the proposal isn’t worth the possible damage a pipeline could inflict on the environment. About 500 people attended the Stop The Pipeline Statewide Summit in Fitchburg, MA to learn more about the proposed pipeline and to speak out about their concerns of property and environmental damage that could come along with it. The proposal in question is Kinder Morgan’s Tennessee Gas Pipeline Northeast Energy Direct project, which proposes expanding an existing natural gas pipeline from Pennsylvania to Wright, NY and from Wright to Dracut, MA. The summit is just the latest example of the opposition that’s been building this year against Kinder Morgan’s proposed expansion in the Northeast. Critics say that the pipeline’s large capacity — it’s projected to carry 800 million to 2.2 billion cubic feet of natural gas per day — brings more gas into the Northeast than the region needs and heightens concerns about explosions. Many Northeast residents are refusing to let pipeline surveyors on their land, and 39 communitieshave passed non-binding resolutions against the pipeline. Sen. Ed Markey (D-MA) has also taken an interest in the pipeline, saying in October that he will make sure that Kinder Morgan and the Federal Energy Regulatory Commission (FERC) are “completely transparent about whether this pipeline will be used to export the natural gas to foreign markets and that the interests of the people are put before the interests of the oil and gas industry.”

Fracking Approved in Largest National Forest in Eastern U.S. -- Despite strong opposition from both elected officials in the affected areas and environmental groups, the U.S. Forest Service (USFS) has approved fracking in George Washington Forest. Objections to the plan came from members of Congress from Maryland, Virginia and Washington, D.C., Virginia Governor Terry McAuliffe and Washington D.C. city council, which passed a resolution opposing it in March.  The forest, located in Virginia and West Virginia, is the largest national forest on the east coast. It contains the headwaters of the Potomac River, which feed into the Chesapeake Bay and provide drinking water for millions of people the Washington D.C./Chesapeake region. The USFS had initially proposed  to ban fracking in the 1.1 million acre forest, the first outright ban of the practice in a national forest. But when the plan was released in 2011, energy companies complained and exerted pressure on the USFS. About 10,000 acres of the forest are already been leased to oil and gas companies, with private mineral rights existing under another 167,000 acres. The newly released plan will only allow fracking on that land, which is located in sparsely populated rural Highland County, Virginia.

Texas messes with Denton - A week after a historic vote to ban hydraulic fracturing (or fracking — the controversial drilling method that forces oil and gas from shale formations with pressurized water, sand and a host of chemicals), Denton, Texas, has been told the state will continue to issue drilling permits within the city limits. “It’s my job to give permits, not Denton’s,” said Christi Craddick, chairwoman of the Railroad Commission of Texas. “We’re going to continue permitting up there because that’s my job.”  Though other municipalities have tried to regulate local drilling, Denton, a town of 121,000 in the Dallas-Fort Worth metroplex, became the first in Texas to ban fracking outright when they approved the prohibition by 18 percentage points Tuesday. Denton already has more than 270 wells inside its borders, and area residents have complained of health problems they say are tied to hydrocarbon extraction. Concerned that a local law could set a precedent, oil and gas companies pumped nearly $700,000 into efforts to defeat the anti-fracking measure — outspending ban advocates 10 to 1. Within days of passage, industry representatives went to court, seeking an injunction against Denton’s law. But now it is the town that must lawyer up to defend its voters against the TRC. Denton spokeswoman Lindsey Baker told the AP that the town has a $4 million fund to fight the challenges, and Mayor Chris Watts has said his administration will “exercise the legal remedies that are available” to defend their ban.

Memo Proves Toxic Chemicals Released in the Eagle Ford Shale - Myra Cerny said her family and grandkids can't come to her home anymore "because of what's going on." What's going on, Cerny said, is a constant plume of toxic chemicals being blown over her home from nearby gas & oil drilling rigs, wells and storage sites.  Cerny said has occasionally gotten so bad that she and her family have had to evacuate the house. When they come back, she said it smells as if a bug bomb has gone off. According to Cerny, the environmental group Earthworks has done air sampling tests in her backyard and found high levels of Benzene, Toulene, H2s and other potentially deadly gases. The TCEQ sent investigators down to look at the facility after numerous complaints from a nearby homeowner. Several times during the three day investigation, the Mobile Response team had to put on respirators and documented instances where they both had "adverse health effects" including "moderate to severe skin irritation." When we began our investigation into this, we sent a Freedom of Information Act request to the Texas Commission on Environmental Quality and almost immediately ran into resistance. At one point, TCEQ sent a response telling us the information we requested would cost roughly $1300.As we pushed back, TCEQ relented and sent us almost everything we asked for. The most significant find in the information we requested was an inter-office memo on an investigation of a saltwater disposal facility in Karnes County. The report showed investigators found benzene levels at several locations around the facility as high as 88 ppbv (parts per billion) That doesn't sound like a high level, unless you consider the fact many experts say you should not breathe air containing just 5 ppbv.

More research confirming large methane leakage from shale boom -- In a recent publication in Earth's Future, a German-US team of researchers showed increasing atmospheric methane abundances over two rapidly developing shale areas, the Bakken and Eagle Ford shales in North Dakota and south Texas, respectively. Their methane emissions estimate is based on the difference in atmospheric methane in these areas between the years prior said rapid development, 2006-2008, and during it, 2009-2011.  Data for the authors' analyses came from the European Space Agency (ESA) ENVISAT's instrument SCIAMACHY, and is unfortunately not available beyond early 2012, when contact with the satellite was lost. The instrument measured the total amount of methane in the atmosphere, the overwhelming amount of which is in the lower 10-12 km, the troposphere. Based on the resolution of the instrument, and the amount of time the satellite spent overhead, the authors used 3 years of data to get high enough precision for their study. They also accounted for how winds displaced the emitted methane differently between the two study periods. The result is depicted in Figure 1 below.  Yellow and orange colors indicate that methane abundance has increased between the periods. The overlap of these regions with the oil and gas wells alongside the slight displacement in accordance with the average wind differences as indicated by the arrows, is a clear sign of the industry's impact on methane. Unlike the recent studies by NOAA, comparisons to the same shale area over time avoids necessary corrections for methane sources other than oil and gas mining activities, since these other sources are not significantly changing in time.

How EPA Could Cut National Methane Leaks Almost In Half - Three top environmental groups released a report on Thursday detailing how the federal government could cut the country’s methane emissions almost in half.. As the rise of hydraulic fracturing has lead to a boom in natural gas (as well as oil) production in North America, it’s also become apparent that methane has a tendency to leak into the atmosphere at various points in the industry’s infrastructure. That’s a problem, because methane is an extremely potent greenhouse gas. It traps 36 times more heat than an equivalent amount of carbon dioxide overall, and in its first 20 years in the atmosphere it can trap 87 times more. According to the report — co-written by the Natural Resources Defense Council (NRDC), the Sierra Club and the Clean Air Task Force — specific new regulations could reduce these emissions by 42 to 48 percent, and thus prevent the release of anywhere from 3.2 to 3.7 million metric tons of methane per year. Over a two-decade time frame, this would be equivalent to preventing more than 320 million metric tons of carbon emissions each year. The rules recommended by the report would be implemented by the Environmental Protection Agency (EPA), and would be aimed at improving leak detection and repair, cleaning up older equipment, and curbing the industry’s habit of sometimes intentionally releasing the gas for various reasons. Right now many leaks at wellpads, processing plants, and other facilities often go undetected under EPA’s current standards. And many rules for maintaining equipment apply to new setups and sources, but not to existing ones — even though the latter are responsible for the vast majority of the leaks. Meanwhile, current EPA rules preventing “completion emissions” — the burst of gas that can happen right after hydraulic fracturing is complete — apply to natural gas wells but not oil wells, even though the latter often leak methane as well.

Fracking emissions still high despite regulations: – Hydraulic fracturing, or fracking, once again hit the spotlight in Colorado on Thursday, with a report suggesting air-quality regulations are not keeping up with the industry’s rapid growth. The report, by researchers at the University of Colorado, follows a study released Wednesday that found chemicals used in fracking fluids are no more harmful than those found in common household cleaners. That report was also conducted by researchers at CU. Both reports came as Boulder County on Thursday extended a moratorium on gas and oil development. The continued suspension of activities again highlights the tension between local governments and the industry. The report concerning emissions was released by Chelsea Thompson, a researcher with the Institute of Arctic and Alpine Research at CU in Boulder. The study is expected to be published today by Elementa: Science of the Anthropocene, which focuses on scientific solutions to human impact. The report focused on emissions near gas and oil sites in the northern Front Range, which has seen expanded fracking, such as near Erie and Longmont. It took into account emissions regulations implemented in 2008 in Colorado that aim to capture 90 percent of energy development-caused emissions.

Water is the biggest output of U.S. oil and gas wells (Reuters) - The biggest product of the U.S. petroleum industry is not oil, gas or condensate but water -- billions and billions of gallons containing dissolved salts, grease and even naturally occurring radioactive materials. In 2007, when the shale revolution was still in its infant stages, the U.S. oil and gas industry was already producing more than 20 billion barrels of waste water per year, according to researchers at the Argonne National Laboratory (“Produced water volumes and management practices in the United States”, 2009). The industry’s daily output was 5 million barrels of oil, 67 billion cubic feet of natural gas, and 55 million barrels of water, according to federal government statistics. true Argonne estimated that more than 7.5 barrels of water were produced for every barrel of crude, and 260 barrels of water for every million cubic feet of natural gas, based on state and federal records for onshore oil and gas production. If offshore production is included, the figures drop slightly to 5.3 barrels for every barrel of crude and 182 barrels for every million cubic feet of natural gas. But all these numbers are likely to understate the water-to-oil and water-to-gas ratios, since some of the most important states, including Texas, did not report their production statistics in sufficient detail to compute ratios accurately.

'Monster' Fracking Wells Guzzled 3.3 Billion Gallons Of Water In Drought-Stricken Areas, Environmental Report Finds: Hundreds of massive oil and gas wells in the United States guzzled 10 million to 25 million gallons of water each through the hydraulic fracturing, or fracking, process, a study found. Many of those wells were drilled in Texas, where large swaths of the state are suffering exceptional or extreme drought.  More than 3.3 billion gallons of water was used to drill 261 “monster wells” in the 3 1/2-year period from April 2010 to December 2013, according to the Tuesday report by Environmental Working Group, a Washington research and advocacy group. About two-thirds of those fracking operations were in drought-stricken areas in Texas, Pennsylvania and Colorado.  “The amount of water used in these wells is staggering,” Bill Walker, a co-author of the report and EWG consultant, said in a statement. “The water used to frack a single monster well could meet the water needs of a drought-stricken county in Texas twice over.” The U.S. Environmental Protection Agency has estimated the largest fracking projects use as much as 5 million gallons of water on average for drilling. But the EWG report suggests that figure is too low.

3 Billion Gallons Of Fracking Wastewater Pumped Into Clean California Aquifiers: "Errors Were Made" State Admits -- Dear California readers: if you drank tapwater this morning (or at any point in the past few weeks/months), you may be in luck as you no longer need to buy oil to lubricate your engine: just use your blood, and think of the cost-savings. That's the good news.  Also, the bad news, because as the California’s Department of Conservation’s Chief Deputy Director, Jason Marshall, told NBC Bay Area, California state officials allowed oil and gas companies to pump up to 3 billion gallons (call it 70 million barrels) of oil fracking-contaminated waste water into formerly clean aquifiers, aquifiers which at least on paper are supposed to be off-limits to that kind of activity, and are protected by the government's EPA - an agency which, it appears, was richly compensated by the same oil and gas companies to look elsewhere.And the scariest words of admission one can ever hear from a government apparatchik: "In multiple different places of the permitting process an error could have been made." Because nothing short of a full-blown disaster prompts the use of the dreaded passive voice. And what was unsaid is that the "biggest error that was made" is that someone caught California regulators screwing over the taxpayers just so a few oil majors could save their shareholders a few billion dollars in overhead fees.  And now that one government agency has been caught flaunting the rules, the other government agencies, and certainly private citizens and businesses, start screaming: after all some faith in the well-greased, pardon the pun, government apparatus has to remain:

Thousands Of California Kids Attend School Near Fracking — And Most Of Them Are Minorities - More than 350,000 of California’s six million schoolchildren attend school within one mile of active oil and gas drilling, and most of those kids are minorities, according to a report scheduled to be released Tuesday by the non-profit FracTracker Alliance. FracTracker’s California program director Kyle Ferrar paired oil well data sets from the California Department of Conservation Division of Oil Gas and Geothermal Resources with state school district and enrollment demographic data, and found two key trends: One is that a large number of California children attend school within close proximity to oil and gas development, including fracking. And the second is that those schools closest to oil and gas operations are predominantly Hispanic and non-white.The findings are important, environmentalists say, because California has no specific laws that safeguard the health of children who attend school near industrial activities. The state has no limits on how close industry may place regular or fracked oil wells next to schools, and companies are not required to give notice to students, parents, teachers or school officials before oil extraction begins. California state regulators are not required to consider a well’s proximity to a school before issuing a permit.

Bought by Halliburton, future unclear for Baker Hughes’ fracking disclosure policy - The drilling industry awoke Monday morning to the news that two major oil field services firms would become one. Halliburton will buy Baker Hughes for $34.6 billion, a union that EnergyWire reports will “create a powerhouse in the hydraulic fracturing business.” Halliburton, Baker Hughes and Schlumberger are the three biggest suppliers of oil and gas development tools and technology, including the chemicals used to frack wells. That’s why it made headlines last spring when Baker Hughes announced it would adopt a new policy of disclosing “100 percent” of its fracking fluid recipes and phasing out the use of “trade secret” claims. Drillers that are Baker Hughes’ clients have begun posting the information to the website as of Oct. 1. However, it’s unclear whether Halliburton will follow suit when the merger is final.

Halliburton lobbies White House on fracking rules -- Officials from oil and gas drilling services giant Halliburton Co. lobbied White House officials this month on the Obama administration’s proposed hydraulic fracturing rules. The Halliburton representatives complained that the Interior Department’s proposed rules for fracking on federal land do not go far enough in allowing Halliburton to keep secret the chemicals it uses in fracking.Requiring certain disclosures of the chemicals that fracking companies use was one of the main focuses of Interior’s rules proposed in 2013.  “As currently drafted, the rule would require the holders of most trade secret information — the service companies and chemical suppliers — to disclose their trade secrets to operators and would allow only the operators to seek protection for trade secrets,” Halliburton said in an informational handout it gave to White House officials and others from the Obama administration.  The meeting took place Nov. 4, but it was only disclosed Tuesday.

Landowners tell proposed LNG export terminal in Coos Bay: 'Keep your pipeline off my property' | Bill Gow stands on a wooden platform perched high above a lush valley south of Roseburg, his Stetson tipped back as he surveys the 1,400-acre ranch where his family runs cows for a living. "This is why I worked 24-7 my whole life, so I could wake up and have this," he says. "This is all I ever wanted." It's not hard, then, to understand Gow's sense of violation, his creeping feeling of helplessness, with a Canadian energy company's plan to carve a swath the width of freeway through his land and bury a 36-inch-diameter, high-pressure gas pipeline. Calgary-based Veresen Inc. and its pipeline partner, Tulsa-based Williams Companies Inc., are not asking if Gow wants to host their gas line. They're telling him. If regulators approve Veresen's plan to build an export terminal for liquefied natural gas in Coos Bay, its Pacific Connector Pipeline is coming across his land. The only thing left to settle is the price. And he may not have much say in that either. It's called eminent domain.

Introducing "Natural Gas Exports: Washington's Revolving Door Fuels Climate Threat" -- DeSmogBlog's Steve Horn and Republic Report's Lee Fang have co-written an in-depth report on the influence the government-industry revolving door has had on Big Oil's ability to obtain four liquefied natural gas (LNG) export permits since 2012 from the Obama Administration.  Titled “Natural Gas Exports: Washington's Revolving Door Fuels Climate Threat,” the report published here on DeSmogBlog and on Republic Report serves as the launching pad of an ongoing investigation. It will act as the prelude of an extensive series of articles by both websites uncovering the LNG exports influence peddling machine.   The report not only exposes the lobbying apparatus that has successfully opened the door for LNG exports, but also the PR professionals paid to sell them to the U.S. public. It also exposes those who have gone through the “reverse revolving door,” moving from industry back to government and sometimes back again.  It reveals that many former Obama Administration officials now work as lobbyists or PR professionals on behalf of the LNG exports industry, as do many former Bush Administration officials. So too do those with ties to potential 2016 Democratic Party presidential nominee, Hillary Clinton.

Did Russia and China just sign a death warrant for U.S. LNG exports? --Russia and China have signed two large natural gas deals in the last six months as Russia turns its attention eastward in reaction to sanctions and souring relations with Europe, currently Russia's largest energy export market. But the move has implications beyond Europe. In the department of everything is connected, U.S. natural gas producers may be seeing their dream of substantial liquefied natural gas (LNG) exports suffer fatal injury because of Russian exports to the Chinese market, a market that was expected to be the largest and most profitable for LNG exporters. Petroleum geologist and consultant Art Berman--who has been consistently skeptical of the viability of U.S. LNG exports--communicated in an email that Russian supply will force the price of LNG delivered to Asia down to between $10 and $11, too low for American LNG exports to be profitable.Now, let's back up a little. U.S. natural gas producers have been trying to sell the story of an American energy renaissance based on growing domestically produced gas supplies from deep shale deposits--now being exploited through a new form of hydraulic fracturing called high-volume slick-water hydraulic fracturing. The problem has been that overproduction and low prices--now only a fraction of the $13 per thousand cubic feet (mcf) at the peak in 2008--have undermined the financial stability of the natural gas drillers. Here's why: Natural gas from shale, referred to as shale gas, is generally more expensive to produce than conventional natural gas and will require that natural gas prices go much higher than they are today--from around $4 per mcf almost certainly to over $6 per mcf and perhaps more to pay the costs of bringing that gas out profitably. But at that price, U.S. LNG is no longer competitive in Europe. And now, because of the Russian-Chinese natural gas pipeline deals, it may no longer be competitive in Asia. Those are the two largest markets for LNG. Without them it is doubtful that the United States will be exporting much LNG--except perhaps at a loss.

Energy in 25 years: Private equity bets on energy 'revolution'—in oil and gas: Private Equity funds have raised $157 billion since 2009 to invest in energy, according to data from intelligence firm Preqin. And they're in the middle of raising even more, with nearly $32 billion collected by 33 funds this year. Energy-focused PE funds that launched between 2002 and 2011 average net returns of nearly 14 percent annually, versus 9.5 percent for the industry generally, according to Preqin. Warburg Pincus, for example, announced in October that it raised $4 billion for a new energy fund, $1 billion more than it had originally sought. Energy Capital Partners said in April that it collected more than $5 billion for its latest offering, blowing by the original $3.5 billion target. And Carlyle Group is making "great progress" to its goal of gathering nearly $8 billion for two energy funds by 2015. "It's an unlimited opportunity set," Steenberg said of dramatic changes he anticipates in energy. "Three letters: L-N-G."  That's what David Foley, CEO of Blackstone Energy Partners, said when asked what investors are doing now that will shape the future of energy.  Indeed, natural gas appears to be private equity's biggest play (the L refers to "liquefied"). Thanks in large part to advances in drilling technology, the U.S. now dominates production of natural gas. Despite environmental concerns around fracking, production has surged because of the country's large shale reserves in places like North Dakota and Texas. BP projects that shale gas supply will continue to be dominated by North America: the continent produces 99 percent of it today; in 2035, it will still create 70 percent.  Foley said that the low cost of natural gas compared to crude oil represents a major arbitrageopportunity. "In commodity businesses where there's usually easy substitution, that's amazing to have that kind of difference in price per Btu,"

Drill, Baby, Drill! US Fracking Drives Down Saudi Oil Prices - Rush -- I mentioned the plummeting oil price, and there are a lot of people trying to figure out, why is this happening?  There are a lot of people that do not understand what it is that's driving down the crude oil price.  What explains it?  When it happens and it's a mystery, people look to traditional explanations, "Well, are people driving less?  Is the demand for gasoline down?  The economy bad?  What's going on?"  And in this case that's not the answer. The simple explanation for much, not at all, but for much of the drop in the price of oil is found in Saudi Arabia.  The Saudis are lowering their price because they are scared.  They are very worried about the amount of oil now available in the United States and North America via fracking.  Shale gas and oil.  And it's been reported in a number of official publications that the amount of oil, the reserves that are available in the United States and North America since fracking has become affordable, the reserves we have are greater than the reserves in Saudi Arabia.  Now, the Saudis have owned the notion that they have the world's greatest supply of oil.  And they are threatened gravely by this.  They are lowering the price that they are charging in order to strangle their competition, which is in this country, in the Dakotas, anywhere where there is shale gas and oil and fracking going on.  We got a Big Oil boom in this country, and they are doing everything they can in Saudi Arabia to strangle it.  They're trying to lower the price, get it to the point where it's no longer profitable or sensible for the companies in this country to continue to frack and produce the oil.  About $65 a barrel is that price, and the Saudis are doing what they can to get that price down there.

Shale Oil: Expensive, Over-Hyped, & Short-Lived - The mainstream press has faithfully repeated every press and PR statement made by the shale producers. And if you simply followed the headlines, you might even believe this about the US:

  • It is soon going to be energy independent,
  • Its oil production will surpass even Saudi Arabia putting it in the number one spot,and
  • The US will even be exporting oil again like the days of old.

The only problem with this story is that it is misleading in some very important ways. And entirely false in others.  Here are there are five main things to know about the shale plays.

  1. They deplete very quickly. The typical shale, or tight rock, well production declines by 80% to 90% within three years.
  2. They are expensive. All oil and gas coming form them is several times more expensive than what we got from conventional oil plays.
  3. They are environmentally damaging because the fracking fluid is highly toxic and much of it escapes during the blowback process and sometimes water wells are contaminated.
  4. Because each well has low flow and depletes quickly, massive numbers of wells must be drilled creating significant infrastructure damage to roads and bridges. Currently no state or municipal authorities are capturing anything close to the total cost of the infrastructure damage from the shale operators which means taxpayers are gong to be left paying those bills. 
  5. Not all shale plays are created equal – some are vastly superior to others.  And even within a given play there are sweet spots and dry holes which can only be determined by punching a well in and seeing what comes out.  Some call this the ‘mapping by braille’ approach.

When we put all of these together it adds up to a very expensive set of plays that will only last for a very short while.

Crude slide sparks oil-related debt fears - A huge chunk of the shale oil boom can be traced back to Wall Street, where years of low interest rates have encouraged energy companies to fuel their growth by tapping eager investors in the bond and loan markets. Now with the US oil price slipping from $102.90 a barrel to a low of $74.21 in little more than three months, many are left wondering what will become of such companies and the credit investors who bet on them. More than that, the worry is that a downturn in oil-related debt could spark wider turmoil in the market for bonds and loans. “We should be concerned,” says Oleg Melentyev, credit analyst at Deutsche Bank. “Oil dropped 25 per cent in a matter of three months and nobody was predicting it – it just happened. We don’t have a high degree of confidence to say this is the bottom, we don’t know.” Almost 2,000 miles away from Mr Melentyev’s Wall Street offices, memories of the oil bust that spurred a statewide recession in the 1980s still loom large in Odessa. Here city officials are already on alert for a potential turn of the commodities cycle. “Our oil and gas businesses in West Texas are accustomed to the cyclical nature of the business and because of that last big bust an important lesson was learnt to not over extend,” . “As far as their borrowing capacity goes, I feel like the banks and the businesses have been very prudent during this recent high level of activity.” Others are not so sure. Mr Melentyev and his colleagues at Deutsche worry that the tendency of oil and gas companies to borrow to finance their operations has left the sector highly leveraged and susceptible to further declines in the price of oil. The analysts say a drop in oil prices to $60 a barrel could cause energy companies that have built their business on prices closer to $90 a barrel to default on their debt – a development that could “push the whole US energy sector into distress”.

The Economic And Strategic Implications Of Low Oil Prices - If oil prices continue to spiral downward, what will be the economic and strategic results? Not too bad, says Gawdat Bahgat. Consumers will benefit at the expense of producers and, perhaps more controversially, the ‘oil for security’ bargain crafted between Western powers and Middle Eastern suppliers will remain intact. The rise in oil and gas production, the diversification of the energy mix, and the decline in consumption have fundamentally altered the global energy landscape. Almost all countries in the world have contributed to these new dynamics, albeit to different degrees. The potentially prolonged period of low oil and gas prices is likely to have significant and wide-spread implications. Consuming countries will benefit from cheap oil and gas while producing countries are likely to lose out (at least in the short term). Lower prices mean that the billions of dollars the United States and Europe would have transferred to producing countries will, instead, be spent and/or invested in their domestic economies. These ‘saved funds’ can be used to stimulate the economy and generate jobs. On the other hand, low prices might negatively impact (slow or even undermine) the shale revolution. Shale/tight oil and production from the North Sea are expensive. Production costs in the Middle East are the cheapest. Middle Eastern producers can make profits even at $70 per barrel. However, such a low price would not be enough to allow them to balance their budgets. In the last few decades most Middle Eastern producers have achieved very modest success in their efforts to reduce their heavy dependency on oil and gas revenues. They need high prices to maintain and support the high standard of living they enjoy. Several Middle Eastern producers have created sovereign wealth funds (oil funds) to invest their oil revenues. These funds such as the United Arab Emirates’ Mubadala, Qatar Investment Authority and Kuwait Fund are among the richest in the world. Their massive financial assets can help to overcome the declining oil revenues. Less wealthy oil producers such as Iran will have to be more aggressive in reforming their economies and creating other sources of revenue.

Why the oil rig count reversed despite the fall in crude price - Last week, Baker Hughes’ major basin oil rig count increased by ten—from 1,568 to 1,578. The main additions occurred in the Utica Shale and “Other” rigs. Rig counts increased my five and three rigs, respectively. Other rigs represents rigs in basins that are smaller or that don’t fall within a specific geographic basin. This week’s increase was a reversal from the 14 oil rig count decrease in the previous week. This week’s increase in oil rig count was the third addition in the past eight weeks. It was also the second highest addition in the past three months. Meanwhile, the current oil rig count isn’t far off its highest weekly count ever. On October 1, the rig count was 1,609. This is the highest it has been since January 2005. US oil price and rig count The oil rig count is slowly responding to falling oil prices in the US. By the end of last week, West Texas Intermediate’s (or WTI) oil price fell ~28% from its high in June. Despite the increase, this week’s count was the second lowest count in the past 11 weeks.  If oil prices continue to decline, drillers will have less incentive to drill. Oil prices below the break-even point would cause some upstream companies to stop operations. Oil producers working some of the unconventional shales, in particular, have a higher break-even point. These operations are usually more prone to oil price declines than conventional oilfields in the US.

Getting the word out -  A groundbreaking study traces toxins from Alberta's oilsands to northern Alberta's wildlife, vegetation and a cluster of cancer cases among First Nations in the region. Never heard of it? That's no surprise.Apart from a statement on the University of Manitoba website and an online link to years of research, there was no flashy announcement last July. No headlines warning of dire findings. No public response of note from government or industry. So activists determined to expose what they see as deadly spinoffs are reaching for the playbook of 1960s U.S. civil rights activists. And they're sticking with their high-profile advocates -- such as actor Leonaro di Caprio and Canadian rocker Neil Young. Stéphane McLachlan, the Winnipeg scientist who authored the study, was disappointed with the response. "The government responded by ignoring the whole thing. They had no choice. If they had recognized there was a problem, it would have been a slippery slope," the scientist shrugged. "The results are grounded in the environmental sciences but also in traditional knowledge. Unlike any of the other studies, it had been actively shaped and controlled by both the Athabasca Chipewyan First Nation and the Mikisew Cree First Nation from the outset," said McLachlan, co-ordinator for the U of M's Environmental Conservation Laboratory.

House votes to approve Keystone pipeline, showdown looms in Senate | Fox News: The House voted Friday to approve the Keystone XL Pipeline, sending the bill to the Senate for a showdown vote next week that could -- for the first time -- put the legislation on President Obama's desk. The measure passed Friday on a 252-161 vote, with 31 Democrats joining Republicans to approve it. An identical bill is expected to be voted on in the Senate on Tuesday. The legislation has re-emerged after Democratic Louisiana Sen. Mary Landrieu began championing it, in a bid to not only help the energy industry but also her struggling runoff Senate bid. In response, Republican Rep. Bill Cassidy, who is running against Landrieu in the runoff, sponsored the House bill that was approved on Friday. Though the Louisiana election battle is a driving force behind the latest Keystone push, the legislation nevertheless could land on Obama's desk if the Senate passes it next week. Senate supporters said they were confident they'd have the 60 votes needed for passage. This would force Obama to either sign it -- defying his environmentalist supporters -- or veto it.

South Dakota Native Americans describe House vote on Keystone XL pipeline as an ‘act of war’ --  Native Americans in South Dakota say they consider last week’s House vote to approve the pipeline “an act of war.” The proposed project, aimed at pumping tar sands crude oil from Canada to U.S. refineries, would completely cross South Dakota. Environmentalists oppose the pipeline because it represents continued reliance on fossil fuels. Most, if not all, of the oil would be exported to other countries, so the argument that it would somehow lower fuel prices rings hollow and false.Of course the U.S. government has hardly ever taken Native American concerns seriously, so it would be a surprise if that happened now, but Rosebud Sioux (Sicangu Lakota Oyate) Tribal President Scott said his nation has yet to be properly consulted on the project, which would cross through tribal land. Concerns brought to the Department of Interior and to the Department of State have yet to be addressed, he said in a statement. “The House has now signed our death warrants and the death warrants of our children and grandchildren,” Scott said. “We are outraged at the lack of intergovernmental cooperation. We are a sovereign nation and we are not being treated as such. We will close our reservation borders to Keystone XL. Authorizing Keystone XL is an act of war against our people,” he said. In February of this year, the Rosebud Sioux Tribe and other members of the Great Sioux Nation adopted tribal resolutions opposing the Keystone XL project. “The Lakota people have always been stewards of this land,” Scott said. “We feel it is imperative that we provide safe and responsible alternative energy resources not only to tribal members but to non-tribal members as well. We need to stop focusing and investing in risky fossil fuel projects like TransCanada’s Keystone XL pipeline. We need to start remembering that the earth is our mother and  stop polluting her and start taking steps to preserve the land, water, and our grandchildren’s future.”

American Indian Tribe Calls Keystone XL Pipeline Vote An ‘Act Of War’ - As the U.S. Senate prepares to vote this week on a bill to force approval of the controversial Keystone XL pipeline, which the House of Representatives already passed on Friday, American Indian groups who would be directly impacted by the tar sands project are converging on Washington D.C. to voice their opposition.  The Rosebud Sioux Tribe, whose territory in South Dakota lies along the proposed route of the pipeline, released a statement last week calling Congressional approval of the project an “act of war against our people.”  In a call with reporters on Monday, President Cyril Scott of the Rosebud Sioux Tribe vowed to fight back should the pipeline win government approval.  “Did I declare war on the Keystone XL pipeline? Hell yeah, I did,” said Scott. “I pledge my life to stop these people from harming our children and grandchildren and way of life. They will not cross our treaty lands. We have so much to lose here.”

CEO of TransCanada Concedes just 50 permanent jobs from Keystone XL Pipeline:  Seeming overlooked during yesterday's (11/16/14) interview on ABC's "ThisWeek", Russ Girling, current CEO of "TransCanada"... the company behind the Keystone XL Pipeline... conceded a claim by Reuters last year that, once constructed, the Keystone XL would produce as few as "FIFTY permanent jobs." But, he went on to argue, that the number did not take into account the nearly "9,000 temporary construction jobs" or the estimated "42,000 'indirect' jobs (from new businesses along the construction route)." Seriously? These are the “jobs, jobs, jobs” Republicans have been promising? The very thought that this country may risk certain environmental disaster to create fewer jobs over TWO years than it needs every TWO weeks just to keep up with population growth, is unfathomable. Tell me we’re not being ruled by people THAT dumb! Remember when supporters of the pipeline were claiming as many as "one MILLION new jobs?"

So, you want a pipe line? Jobs? - A very interesting article at Daily Kos has been posted.   Title: There’s been HOW many Pipeline spills in Alberta in the last Four Months? Seems the Canadian news system does not find oil, gas and toxic water spills from the mining of carbon fuels to be news worthy.   But, the native Indian sure find it news worthy.  Their news outlet, West Coast Native News has been tracking all the spills.   You know, it’s there yard getting contaminated. The Kos article quotes WCNN:  Over the past year WCNN has reported on many Crude oil and Toxic produced water spills all over Alberta, in fact we have reported over 600,000 Litres of toxic crap that has been spilled just last month and yet not one mainstream media outlet has picked up the incidents. So lets take a look back at just the last month (October) and see just what the mainstream is not telling you.  Of that 600,000 liters (165,107.5 gallons or 3931 barrels) 136,000 is crude oil.   That is, for us non metric thinkers, 35,927.4 gallons or 855.41 barrels of crude oil spilled in one month.  How long has there been mining in the area with pipeline transportation? You can go here to get the raw data from the regulatory agency, Alberta Energy Regulator.  The volumes are in cubic meters however.  In the month of October there are 46 spills reported, well or pipeline.  Twenty three (23) are pipeline spills.  There are at total of 10 crude oil spills including the 4 pipeline spills.   The other spills are some mixture of water (salt or fresh) with petroleum, or raw gas releases, contaminated water, etc.  NONE of them are listed as having an emergency status phase. So, we’ll be getting jobs alrighty.  They will be clean up and repair jobs involving environmental personnel and tech/science jobs for those trying to find ways to clean up this mess to that there are for real ” No reported impacts to any water body or wildlife.”  Jobs for those tech/science people figuring out how to transport the cleaned up toxic waste with out spilling it.    And jobs for those manning the toxic waste disposal facilities.  And jobs for those transporting the toxic waste.  Then we’ll have jobs for the lawyers sorting out the civil suites do to pollution and the lawyers lobbying congress to keep it all under wraps.  And jobs for the advertising agencies, those trying to make the public aware and those trying to blind the public (probably more of these later that the former).  Jobs for those trying to figure out how to get fresh water to the public. 

Naomi Klein: Debating Whether Keystone XL Has Climate Impact Is Absurd - Today on Democracy Now! journalist and best-selling author Naomi Klein joined Amy Goodman and Juan González to discuss the expected Senate vote this week to approve a pro-Keystone XL bill backed by Louisiana Democratic Sen. Mary Landrieu. Last week, House lawmakers passed similar legislation to approve the Keystone XL tar sands pipeline that will bring this carbon-intensive oil from Alberta, Canada, to the Texas Gulf Coast. On Friday, President Obama strongly suggested that the legislation, if passed by the Senate, won’t get past his desk. Watch as Klein shares with Goodman her thoughts on the pending vote, “The idea that it’s still up for some kind of debate whether or not building Keystone XL has a climate impact is absurd. Keystone is a pipeline that is intimately linked to plans by the oil and gas industry to dramatically expand production in the Alberta tar sands. They have pipeline capacity more or less to get the oil out that they are producing right now, but they have active plans to double and triple production in the Alberta tar sands digging up one of the highest carbon fuels on the planet with tremendous local health impacts to first nations people to indigenous people living in that region, violating their treaty rights.”

Economics no longer make Keystone pipeline viable - CNBC - What if they voted for a pipeline but nobody came? As Congress rushes to approve the long-delayed Keystone XL pipeline, it is questionable whether or not the project will make as much of a difference as proponents expect. Since June, crude oil has declined by 28 percent, pushing the price that oil from new wells in Canada may command below what the expected cost will be to produce it. The so-called "heavy oil" extracted from sand in Alberta, which the proposed pipeline would carry to Nebraska, en route to refineries on the Gulf Coast, will cost between $85 and $110 to produce, depending on which drilling technology is used, according to a report in July by the Canadian Energy Research Institute, a nonprofit whose work is often cited by Keystone proponents. West Texas Intermediate crude oil traded today at $76.67. "Anything not under construction [is] at risk of being delayed or canceled altogether," said Dinara Millington, vice president for research at Calgary-based CERI. Her cost estimates include the price of drilling new wells, meaning that existing wells that have already been paid for can continue to pump oil profitably, she said. CERI' s analysis squares with the views of other experts, who have pointed to low prices as a sign that economic facts, at least for now, don't match political rhetoric coming from Washington, where Keystone has been a goal for both Republicans and for Senate Democrats from oil-producing states.

Senate Defeats Bill on Keystone XL Pipeline in Narrow Vote - Senate Democrats, by a single vote, stopped legislation that would have approved construction of the Keystone XL pipeline, one of the most fractious and expensive battles of the Obama presidency.The vote represented a victory for the environmental movement, but the fight had taken on larger dimensions as a proxy war between Republicans, who argued that the project was vital for job creation, and President Obama, who had delayed a decision on building it.Senator Mary L. Landrieu, Democrat of Louisiana, who is facing a runoff election Dec. 6, had pleaded with her colleagues throughout the day to support the pipeline, leading to a rare suspense-filled roll call in the Senate. But she was ultimately rebuffed and fell short by one. The bill was defeated with 59 votes in favor and 41 against, and Ms. Landrieu needing 60 votes to proceed. The vote was also a reflection of how a once-obscure pipeline blew up into an expensive national political battle between environmentalists and the oil industry. Although the TransCanada company proposed the pipeline in 2005, it generated so little attention that Secretary of State Hillary Rodham Clinton was poised to approve it in 2011 with little fanfare.  But at that point, environmentalists looking to press Mr. Obama to act on climate change issues seized it as a potent symbol, leading to protests outside the White House and millions of dollars from environmentalists and the oil industry poured into political races on both sides. The political fallout, though, affected Ms. Landrieu more than the president, at least in the near term. She was able to persuade 14 Democrats to join all 45 Republicans to support the pipeline, but 40 Democrats and Senator Angus King, independent of Maine, combined to stop the legislation.

BREAKING: Senate Rejects Keystone XL Pipeline By One Vote -- The U.S. Senate has narrowly rejected a bill to approve construction of the Keystone XL pipeline, the controversial project that would carry tar sands oil from Alberta, Canada to refineries on the Gulf Coast of the United States.  Coming into the floor debate on Tuesday, there was not certainty as to what the outcome would be — a true rarity for the Senate. At the beginning of the debate on Tuesday afternoon, bill sponsor Sen. Mary Landrieu (D-LA) said the debate was “one of the first debates I’ve been in in 8 years where the outcome is uncertain … [but] I know in my heart we have 60 votes.”  As it turns out, Landrieu did not have the 60 votes to pass her bill. It failed by a final count of 59 to 41.   The vote represented the first time the Keystone XL pipeline had been heard by the Senate, mainly because Senate Majority Leader Harry Reid (D-NV) had historically refused to bring the issue to the floor. But the Senate Democratic leadership changed tactics and pushed Landrieu’s “Keystone XL Pipeline Approval Act” to the floor this week in large part because of Landrieu’s drive, and also to try and save her Senate seat. Landrieu is behind in the polls for her Dec. 6 runoff election against Rep. Bill Cassidy (R-LA), and some believed the pipeline’s passage would help win her some support in the oil and gas-centered state.

Native Americans Arrested Following Keystone XL Pipeline Vote » Anyone following the Keystone XL pipeline vote in the Senate yesterday heard what appeared to be chanting or singing in the background when the final tally of 41-59 was announced, signaling that approval of the pipeline had failed to clear the bar of 60 votes and that congressional approval of the pipeline was delayed for the time being.  That sound was coming from Native Americans in the gallery, singing a traditional tribal tune. Five of them were removed from the gallery and arrested.  According to Red Power Media, one of the protesters was Greg Grey Cloud of the Rosebud Sioux tribe. “Grey Cloud, who wore a headdress, continued singing as he was knocked to the floor and pulled to the wall of the hallway,” said Red Power Media. “Protesters were handcuffed with plastic zip-ties while standing shoulder to shoulder, facing the wall. They were then paraded down a corridor and one of the protesters began singing again. The group was arrested for ‘disrupting Congress.'”  The Rosebud Sioux tribe had already declared the House approval of the pipeline last Friday an “act of war” and said that it would close its tribal borders to pipeline construction.

Keystone Fails in Senate (for Now) -- More than six years after TransCanada first presented its plan for a pipeline to carry oil from Canada's tar-sands fields to Texas's Gulf Coast, an end may finally be in sight for the controversial, oft delayed, increasingly expensive, and perhaps increasingly irrelevant Keystone XL pipeline.  But that end didn't come Tuesday, Nov. 18, when the Senate, in a nail-biting, made-for-C-SPAN moment late in the afternoon, killed Keystone's chances of passing -- for at least two months. Congress will get another chance in January, when Republicans will have control of the Senate. But the biggest question may simply be: Does Keystone even matter anymore? When TransCanada first broached it in the fall of 2008, it was seen by both the Canadian oil industry and environmentalists as a make-or-break issue for the development of the landlocked Canadian tar sands since it would provide a straightforward and affordable way to get the crude to market. Without ready market access, Canadian crude traded -- and still trades -- at a discount to U.S. oil benchmarks.  Environmentalists, for their part, made opposition to Keystone one of their top priorities, arguing that the pipeline would open the doors to tar-sands development that otherwise wouldn't happen. Because tar-sands production emits more greenhouse gases than regular crude production, greenlighting Keystone would be tantamount to signing off on more greenhouse gas emissions for decades to come, they argue. James Hansen, a former NASA official and leading voice on climate change, famously called Keystone "game over" for the global climate.  But here's the thing: The energy world has changed a lot since 2008. Keystone has proved crucial neither to the development of Canada's tar sands nor to getting it to market. And this means that Keystone, though not environmentally friendly by definition, has also proved to be less of a concern in terms of future greenhouse gas emissions. In its last assessment of Keystone's impact on greenhouse gas emissions, the State Department determined that the pipeline by itself would not lead to increased emissions.

Gulf-Bound Tar Sands for Export? Follow the Oiltanking Trail -- The U.S. Senate failed to get the necessary 60 votes to approve the northern leg of TransCanada's Keystone XL pipeline, but incoming Senate Majority Leader Mitch McConnell (R-Ky.) already promised it will get another vote when the GOP-dominated Senate begins its new session in 2015.  Though the bill failed, one of the key narratives that arose during the congressional debate was the topic of whether or not the tar sands product that may flow through it will ultimately be exported to the global market. President Barack Obama, when queried by the press about the latest Keystone congressional action, suggested tar sands exports are the KXL line's raison d'etre.  Obama's comments struck a nerve. Bill sponsor U.S. Sen. Mary Landrieu (D-La.) and supporter U.S. Sen. John Hoeven (R-ND) both stood on the Senate floor and said Keystone XL is not an export pipeline in the minutes leading up to the bill's failure.  “Contrary to the ranting of some people that this is for export…Keystone is not for export,” said Landrieu, with Hoeven making similar remarks.  But a DeSmog probe into a recent merger of two major oil and gas industry logistics and marketing companies, Oiltanking Partners and Enterprise Products Partners, has demonstrated key pieces of the puzzle are already being put together by Big Oil to make tar sands exports a reality.    And both Keystone XL and Enbridge's “Keystone XL Clone” serve as key thoroughfares for making it happen.  On November 13, the day before the U.S. House of Representatives voted to approve Keystone XL North, Enterprise acquired Oiltanking. Both companies stand to gain from its prospective approval, as well as the recent approval of Keystone XL's Clone, and both companies have made big bets on fossil fuel exports at-large.   The Keystone XL clone — the Alberta to Freeport, Texas combination of Enbridge's Alberta Clipper, Flanagan South and Seaway Twin pipelines — has a key tie to Enterprise Products. That is, Enterprise co-owns the Cushing, Oklahoma to Freeport, Texas Seaway Twin pipeline with Enbridge.

The Fracking Revolving Door - There was much speculation about Louisiana Senator Mary Landrieu‘s motivation for pushing the first full Senate vote this week on approving the Keystone XL pipeline. Some revolved around her trying to improve her chances in the Dec. 6 Senate runoff against Republican Congressman Bill Cassidy (neither candidate got a majority on Nov. 4). Others say she’s likely to lose anyway and that her grandstanding was directed at oil and gas companies that might provide a lucrative landing spot for her after she leaves the Senate in January. That latter speculation isn’t idle, as a new report from DeSmogBlog and Republic Report indicates. Natural Gas Exports: Washington’s Revolving Door Fuels Climate Threat lays out how corporate lobbyists swap roles with politicians and government officials constantly, leading to excessive influence by corporations on lawmakers, the Obama administration and federal agencies. It describes how this revolving door eased the way for Big Oil to land four permits for liquified natural gas (LNG) export facilities from the Obama administration since 2012. And while the report, the first salvo in an ongoing investigation of what it calls “the LNG exports influence peddling machine,” looks specifically at LNG export facilities, its conclusions could be applied to the entire machinery ofclimate denier influence in Washington DC. Corporate lobbyists have helped to engineer a transformative shift with little scrutiny or meaningful debate: plans to extract U.S. natural gas and export the gas overseas to more lucrative markets. This shift—if fully realized—will continue to transition the U.S. into a resource colony, where our communities, homes, air and water are exploited and polluted so that large multinational corporations can pursue ever-higher profits by selling U.S. fossil fuels abroad.”Four permits for LNG export facilities have already been approved, with many more in the pipeline. To feed these facilities and as domestic gas prices rise as a result of export, there will likely be increased pressure to expandfracking dramatically.

Leaked Documents Reveal Shady Tactics Behind PR Push For Even Bigger Canadian Pipeline -  With the debate still raging over Keystone XL, the company behind the pipeline is already hard at work promoting a PR strategy for its larger and entirely Canadian pipeline, Energy East. New documents made public this week show that Transcanada is working with the world’s largest independently owned PR firm, Edelman, to help garner support for the literally trans-Canada pipeline that would bring heavy crude from the western tar sands to the eastern ports for export. With clients like the American Petroleum Institute (API) and the Koch-funded American Legislative Executive Council (ALEC), Edelman recently made unwanted news for refusing to commit to turning away clients that support climate-denying agendas.   The leaked documents first obtained by Greenpeace as prepared by Edelman for TransCanada in May and August reveal in great detail how Edelman recommends the Canadian company target opposition by building a grassroots network of some 35,000, including a large chunk of the company’s own employees. Edelman recommends putting pressure on opponents by “distracting them from their mission and causing them to redirect their resources.” It advises working with “supportive third parties who can in turn put the pressure on, particularly when TransCanada can’t” to achieve these aims.  This technique of creating artificial grassroots coalitions is referred to as ‘astroturfing’ in the industry, and it is an approach that Edelman is closely linked to, especially when it comes to an ill-begotten Walmart campaign in 2006 in which bloggers were used as PR hacks without the proper transparency.

TransCanada Plots Dirty PR Campaign to Push New Pipeline -- Greenpeace has leaked documents which reveal the company’s secret strategy, much of which hinges on the same astroturf and dirty tricks tactics used by Rick Berman, whose smear campaign against environmentalists was exposed a few weeks ago  by the New York Times. And the firm that prepared the strategy was Edelman, the world’s largest public relations company, which earned itself a blizzard of unfavorable publicity last summer, both for its work for big-timeclimate deniers and its inept damage control. Edelman’s clients included the American Petroleum Institute and the American Legislative Exchange Counsel (ALEC) and its previous work included an ad campaign for Keystone XL. The documents, written between May and August 2014, don’t merely suggest promoting the benefits of shipping tar sands oil from Alberta to eastern Canada for export to other countries. They also advocate for the company to “Add layers of difficulty for our opponents, distracting them from their mission and causing them to redirect their resources.” More than 50 Edelman and TransCanada staff would be devoted to the Washington D.C.-based campaign, some of which—primarily the positive PR part—has already been launched.

Chinese oil patch investors crying foul on immigration laws - The Chinese consul general in Calgary told the Globe and Mail that Chinese companies struggle to turn a profit on Canadian investments.  He said hiring Albertans "is so expensive" and that it "adds to the financial burden" of the Chinese companies operating in the oilsands. In the face of falling oil prices, pricier Canadian workers are only getting more burdensome for Chinese firms invested in Canadian resources.  This is the latest controversy over Chinese foreign workers in Canada. In one high-profile case, two Canadian labour unions brought a court challenge against HD Mining over the use of Chinese workers in a B.C. coal mine. The unions claim the company turned away qualified Canadian job applicants in favour of cheaper, Chinese labour.  That case was dismissed by a federal court. But more recently, an executive from Chinese state-owned firm Sinopec warned Chinese investments in Canadian projects were at risk unless Canada loosened restrictions on temporary foreign workers.

Saudi Arabia at the G20: Is it waging Econ War on Iran, Russia and N. Dakota? -- Saudi Arabia maintained to journalists that Riyadh is not behind the recent fall in gasoline prices. The suspicion has arisen that Riyadh is “flooding the market,” a technique it has used in the past, of pumping a lot of oil even in the face of weakening market demand, thus driving the price down. Saudi Arabia is annoyed at Russia over Moscow’s support for the Bashar al-Assad regime in Damascus. SA will support the US in the latter’s annoyance with Russia over Ukraine. Saudi is perpetually annoyed with Iran, its Shiite rival that also supports al-Assad and the civilian nuclear enrichment program of which it fears for its dual-use, weapons potential. And Saudi Arabia is threatened by the rise of hydraulic fracturing as a way to produce petroleum, which detracts from the centrality of the vast Saudi reserves. Saudi Arabia is not hurt as much by falling oil prices as many other OPEC countries. In part, it has larger reserves than most such countries, and so can afford to be patient until prices recover. In part, it has relatively low extraction costs, so it keeps much more of the current $80 a barrel than many countries. Some proposed drilling projects in Norway and Britain don’t make any economic sense at $80 a barrel or less.  Saudi Arabia, however, says it is no longer the world swing producer. It produces 9.5 million barrels a day or so, about ten percent of the world production of 90 million barrels a day. While it used to matter a lot whether Saudi did 8 mn barrels a day or 9.5 mn barrels a day, nowadays a small difference like that, Saudi Arabia says, would likely be made up by other suppliers, including new fields drilled via hydraulic fracking. The fact is that demand is soft, which is what is driving prices down despite substantial decreases in Libyan, Iranian, Syrian, Iraqi and South Sudanese exports. The softness in demand, in other words, is so great that prices have come down despite significant production shortfalls in some former producing countries. Saudi Arabia may be happy about idling some proposed North Dakota or Norwegian fields, reducing competition. But it denies responsibility.

Russia Can Survive An Oil Price War --  Russia has proven before – the 2008 financial crisis for example– that it can ride its resource rents through a prolonged economic slump. Higher oil price volatility and sanctions separate the current downturn from that of 2008, but Russia’s economic fundamentals remain the same – bolstered by low government debt and a large amount of foreign reserves. Moreover, Western involvement in Russian oil and gas plays is more pronounced than ever.Economic diversification has not come easy for Russia, arguably for a simple, but effective reason; oil and gas are a source of tremendous wealth for the country. However, the dire straits of the 2008 global crisis illustrated the importance of financial diversification. Since then, Russian state-owned oil and gas giants Rosneft and Gazprom have increasingly allowed Western majors like BP, Eni, Exxon, Shell, Statoil, and Total access to some of Russia’s underdeveloped, but prized projects. Western companies have an estimated $35 billion tied up in Russian oil with hundreds of billions more planned and service providers Halliburton and Schlumberger each derive approximately five percent of their global sales from the Russian market. The Western majors remain committed to their extra-national ventures and these powerful relationships ultimately limit the sanctions’ scope. Still, with their cooperation put on hold, Russia has been forced to look elsewhere, and increasingly within. Rosneft is set to announce new Arctic partners by the end of the year, a role formerly dominated by Exxon. China appears a likely suitor as the two countries have already embarked on a promising oil partnership in Russia’s Far East in addition to the highly publicized long-term gas deals. Domestically, Rosneft and Gazprom have strengthened their alliance and Putin has approved the creation of a state-owned oil services company.

And The Biggest Winner From The Oil Price Plunge Is... -- "The Chinese, among others, seem to be responding to the lower oil price with additional demand," notes one tanker executive as Bloomberg reports the number of supertankers sailing toward China’s ports matched a record on Oct. 17 and is still close to that level now. The plunge in price has enabled China to add 35 million barrels to its inventories in the past three months as the nation fills its strategic petroleum reserves, OPEC said yesterday. Furthermore, though the oil slide is hurting nations from Venezuela to Iran - that depend on energy for revenues - ship owners serving the industry’s benchmark Middle East-to-Asia trade routes are reaping the best returns from charters in years as the slump drives down the industry’s single biggest expense. As one analyst notes, "we've seen the Chinese buying a lot from the Middle East and that’s really let rates cook." So it appears the Chinese, in the face of the worst growth and economy in years, are rational enough to buy more at lower prices (as opposed to the buy-more-because-stocks-are-at-all-time-highs Western investors).

China Shale Boom Fizzles as Clean Energy, Imports Take Lead -  China has sharply cut its output target for shale, signaling the country’s drilling boom is fizzling out before it even gets going. The nation has reduced its goal for the end of the decade to a third of an earlier estimate, as difficult geology, lack of infrastructure and limited exploration rights conspire against shale-gas ambitions. Big gas import deals, a lower oil price and China’s commitment to clean energy are also weighing on shale’s promise. “It’s a reality check for policy makers who’ve finally realized the shale gas boom may not come as easily as many thought,” said Shi Yan, an analyst at UOB-Kay Hian Ltd. in Shanghai. “Progress has been made in many areas, but none of them are big enough to trigger a shale revolution.” China, which has the world’s largest shale gas reserves, awarded 18 companies exploration rights in two auctions in 2011 and 2012, in an attempt to replicate the U.S. shale boom and cut its reliance on imports. Only one of these, state-owned energy giant China Petroleum & Chemical Corp, has started to commercially produce the fuel. It’s bigger rival, PetroChina Co., is also producing shale gas from its own reserves.


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