Sunday, November 16, 2014

Keystone XL to be approved this week; oil prices fall and drillers cut back, et al…

the tar sands, the keystone XL pipeline, and its alternatives were prominently in the news all week this week, and by the end of the week it appeared that a bill to allow TransCanada to bypass the State Dept and start construction on the Keystone XL could be ready for the president's signature (or veto) as early as next week, with support from the Democrats in the Senate...what brought about this unlikely scenario is the runoff for the Senate seat in Louisiana between sitting Democrat Sen. Mary Landrieu and Republican Rep. Bill Cassidy, in which loyalty to the oil & refinery interests of that state are supposedly being judged by the prove her oil bone fides, Landrieu took to the Senate floor early this week to ask her Democratic friends to support her bill, the “Keystone XL Pipeline Approval Act.”...with Democratic support in the lame duck session, her bill apparently has the 60 votes necessary to overcome any filibuster attempt, and was expected to pass this coming week; meanwhile, while that was going on in the Senate, Cassidy signed on as co-sponsor or a similar bill in the House, which Boehner quickly pushed through this week to improve Cassidy's pro-oil position, which was subsequently passed Friday and sent to the Senate...meanwhile, the Senate is now expected to vote for approval of the Keystone XL at around 6:15 p.m. this coming Tuesday evening...

what is particularly interesting about the Keystone XL project at this juncture, however, is that even if should get approval, it's not certain that TransCanada would actually begin construction on it, with oil prices as low as they are now....the Canadian Energy Research Institute estimates that oil-sands projects need a price of $85 a barrel to be profitable in the current cheapest (in situ) method and that new standalone mines will require $105 a barrel oil to be profitable...concerns about such sunk costs have already led Norway’s Statoil and France’s Total to pull out of major tar sands projects earlier this year....meanwhile, tar sands oil is already set to flow south through the Alberta Clipper pipeline, an alternative route cobbled together by Enbridge connecting to their existing pipelines in Minnesota, Wisconsin, Michigan, and if the price of oil remains below $80 a barrel for any length of time, extraction from the tar sands may fall to a level where construction of the Keystone XL would become redundant..

with low prices for oil persisting, there have been more signs of a slowdown in fracking activity among the companies with an oil patch focus... companies from Continental Resources, a major driller in the Bakken, to Pioneer Natural Resources, with holdings in the Eagle Ford Shale, have reported to shareholders that they're cutting back on spending and will be drilling less in the coming year...the Financial Times reports that Halcon Resources, Rosetta Resources, Conoco Phillips, Devon Energy, EOG Resources, and Hess will similarly be cutting back on their capital spending plans, although others, such as Occidental, will wait till the end of the 4th quarter to lay out 2015 plans...meanwhile, the pullback in North Dakota has been so pronounced that state legislators are already considering that they'll have to factor the possibility of lower royalty payments when drawing up the coming year's budget; the WSJ notes that although the break-even price for oil in North Dakota is about $35 a barrel, 15% of the production in the state has a break-even price above $87...low oil prices are having similar impact on other drilling as well; Transocean, who you'll recall was the owner of the Deepwater Horizon, who plead guilty for their involvement in the BP Gulf oil spill, reports that they'll be taking a $2.8 billion write off for the 3rd quarter, primarily because their 29 deepwater drilling rigs had accumulated 296 combined days of being out of service in the third quarter, and that they further expect 435 days of idle deepwater drilling rigs in the 4th quarter..., 

such lower prices and curtailed plans apparently were the impetus for a spate of articles nationally indicating that fracking is now on hold in Ashtabula County, and by implication adjacent Northeast Ohio..the origin of this "news" appears to have a Star-Beacon article quoting State Rep. John Patterson and Ashtabula County Commissioner Joe Moroski, citing lower prices just as we have been doing over the past few weeks...Mardy was not impressed; responding that it must have been a slow news day, both for the Star-Beacon and the wire services that picked up the story, and that at any rate the 6 injection wells in Windsor was more than enough fracking related activity for her already...

at any rate, we'll again start with the Ohio coverage this week, which includes another oilfield death in Noble county and a selection of the 'Ashtabula fracking on hold' articles, before we get into this rather large package of linked excerpts, which you'll see includes a magnitude 4.8 quake in the Kansas fracking patch & quite a bit of coverage on the legal pushback against the Denton Texas fracking ban, as well as links to the articles on price related fracking pullbacks and the Keystone articles, which follow the fracking news...

Disagreement on legal authority complicates local fracking bans: Last week in eastern Ohio, where natural gas production in the Utica Shale has been booming, voters in three towns rejected ballot proposals to ban hydraulic fracturing. While Athens overwhelmingly passed a fracking ban, Gates Mills, Kent and Youngstown voted down their measures. The ballot issues highlight the disparity in responses among local officials who are befuddled by the complicated legal baggage of prohibiting a practice that some say is solely regulated at a state level. Bans could legally embroil areas where drilling companies operate, especially with the Ohio Supreme Court soon to rule on the ability of local authorities to regulate fracking. Local authority to regulate fracking is a central issue in the case that the Ohio Supreme Court is reviewing: Munroe Falls v. Beck Energy. In 2011, a state court backed the town’s right to zone and issue permits to the oil and gas drilling company. An appellate court in February sided with the company. Oral arguments were heard by the state Supreme Court earlier this year. The Ohio Oil and Gas Association is closely watching for a decision, said spokeswoman Penny Siepel. “Once that court case is decided, I think it will probably help ... reaffirm that the state ultimately has control over the oil and gas industry,” Ms. Seipel said. Shawn Bennett, senior vice president of the industry group, said his member companies answer solely to the Ohio Department of Natural Resources. “These bans are, and will remain, without any teeth,” Mr. Bennett said. “When (companies) submit their permit, that permit will go to the division and the division will choose whether to accept or deny the permit.”

Fracking on hold in Ashtabula County - The future of drilling in Ashtabula County shale deposits is on hold because of basic economics, according to area political leaders keeping an eye on the issue that could eventually bring dollars into the area. The controversial process known as fracking — horizontal drilling with high-powered water being pumped into shale deposits and oil and other petroleum residue then collected — has gotten a foothold in southern Ohio but been on hold here since spring. There were tentative plans to begin exploratory wells in the spring of 2014 but lack of demand scuttled the plans, area leaders said at the time. Geographic studies have indicated there are large deposits of shale throughout Ashtabula County. Some area residents have already benefited by selling drilling rights on their property but would receive ongoing payments if their land is successfully drilled, according to those familiar with drilling contracts.

Low oil prices delay fracking in NE Ohio county: – Officials in northeast Ohio say drilling in shale deposits is on hold due to decreasing oil prices. The Star-Beacon in Ashtabula reports that although geographic studies have shown there are large shale deposits throughout Ashtabula County, hydraulic fracturing, or fracking, is on hold due to economic reasons. State Rep. John Patterson of Jefferson tells the newspaper that a decrease in oil prices has reduced the demand for fracking over the short term. Officials are also looking into potential problems with fracking in the area, specifically earthquake risks and how to transport the oil once it's taken from the ground. Some residents have already sold drilling rights on their property, and county officials are working to ensure regulations are in place in case drilling in the area becomes a reality.

Falling oil prices slows shale expansion in Ohio | Shale Energy Insider: The future of drilling in north Ohio shale deposits is on hold because of basic economics, according to local political leaders. There were tentative plans to begin exploratory wells in the spring of 2014, but a lack of demand and increased production in the south of the state, elsewhere has stalled progress. Geographical surveys have indicated there are large deposits of shale throughout Ashtabula County, although the exact size and monetary value of the resource has not yet been disclosed. BP has pulled out of some of their wells because of a lack of production but residents have already negotiated drilling rights with shale extraction companies. “Most of the exploratory drilling just did not materialize,” said Ashtabula County Commissioner Joe Moroski. “We are still going to be on hold for a while,” said State Rep. John Patterson who said with the falling price of oil there was a slowdown in demand but hoped it would be “temporary”. “The bulk of the extraction wells are still being drilled in south-eastern Ohio,” Patterson said One of the issues in south-eastern Ohio was the lack of transportation and infrastructure once it had been extracted. County officials have been working for more than a year to ensure laws and regulations are in place to ensure roads are properly maintained, or replaced, in case drilling become a reality. In the meantime, Patterson said the state Agricultural Committee will be reviewing wells and drilling methods with an intention to “definitely looking into examining their safety”.

Worker killed in explosion at Noble County oil and gas facility - Columbus Dispatch: Fracking sites claimed lives in Ohio and Colorado this week, bringing home concerns about worker safety that have grown as the controversial method of collecting oil and gas has increased. A Virginia man working on an oil and gas pump at a fracking site in Noble County in eastern Ohio died in an explosion on Wednesday. Norman Butler, 48, was an electrical contractor working on a pump operated by Blue Racer Midstream. The pump moves condensate, a toxic liquid that is a byproduct of oil and gas production, from oil and gas wells into pipelines that lead to processing facilities. Butler would have been testing and calibrating electrical components on the pump, said Bill Strickland, vice president of Buffalo Gap Instrumentation and Electrical, the company that employed Butler. Buffalo Gap, based in Texas, does most of its business with the oil and gas industry, Strickland said. “We have never had anything like this (death) before,” he said. “It is very sobering.” In northern Colorado yesterday, a man was killed and two others were seriously injured when a frozen high-pressure waterline ruptured. One man was hit by a stream of water or fracking fluid and was killed by the impact. The Colorado men were working for Halliburton, which had been hired to perform fracking operations at the well. A Halliburton spokeswoman said the injured men were flown to nearby hospitals. The explosion that killed Butler occurred about 4:15 p.m. near a CONSOL Energy wellhead in Marion Township, near Summerfield, about 100 miles east of Columbus and about 25 miles north of Marietta.  The well had been fracked earlier this year to access oil and gas in the Utica shale deep underground.

Fracking School Children: Frackers Stopped Near School - Because the parents did not want their children’s health sacrificed so that some fracking Okie could export LNG to China. Imagine that. The local town council had gutted the town’s zoning law at the behest of the frackers. Including allowing fracking within a half mile of a school. Close enough to gas the kids when they came out to play. Or blow them to kingdom come when the well explodes. Rex Energy will not proceed with drilling operations on their Geyer well pad, a controversial cluster of six wells located about a half mile away from 3,200 students at the Mars Area School District campus. Rex Energy recently sent gas lease holders a letter explaining how the stay will prevent the company from further development of the Geyer well pad during the time that the legal challenges are heard. Last month, parents in Middlesex Township, along with environmental groups Clean Air Council and Delaware Riverkeeper Network, filed multiple challenges related to the Geyer well. The parents and groups filed a substantive validity challenge to an overhaul of Middlesex Township’s zoning, which opens up the Township to drilling and related facilities. The challengers appealed the land use permit issued by Middlesex Township, and the well permits issued by the Pennsylvania Department of Environmental Protection (PA DEP).  The challengers argued that the amendment and related permits violate the people’s right to pure water, clean air, a healthy environment, and fail to protect public health, safety, and welfare. The challenge to the ordinance and land use permit automatically imposed a stay on further site development. According to area residents, Rex Energy violated the stay shortly after October 10th.

How to Frack a Duck -- With open frack ponds. In New Mexico, we had to cover all our frack pits with nets in case some duck got the bright idea of landing in one. And not live to tell the tale. No such luck in Pennsylvania, where open pits are proliferating at frack sites at such a rate that the DEP (Department of Environmental Predation) does not bother to keep track of them.  In 2005, Pennsylvania had 11 frack water pits. Just eight years later, aerial maps show that number has jumped to 529. It’s unclear how many of these sites store fresh water used for fracking, and how many store the toxic wastewater that results from oil and gas drilling operations. The Department of Environmental Protection could not provide the data to public health researchers working with Geisenger on an NIH funded health impact study. So the researchers turned to the nonprofit data sleuths from SkyTruth, who have documented the impoundents with the help of NASA’s satellite imagery and citizen scientists from around the world. recently reported on how the project was initiated by public health researchers from Johns Hopkins:  Brian Schwartz his colleagues have teamed up with Geisinger Health System, a health services organization in Pennsylvania, to analyze the digital medical records of more than 400,000 patients in the state in order to assess the impacts of fracking on neonatal and respiratory health. While the scientists will track where these people live, says Schwartz,state regulators cannot tell them where the active well pads and waste pits are located. Officials at Pennsylvania’s Department of Environmental Protection (DEP) say that they have simply never compiled a comprehensive list. A spokesman for DEP told the Observer-Reporter that the department can’t produce a list of impoundments that include smaller wastewater storage sites because they have a different classification. The DEP sent the reporter to another nonprofit that tries to fill the state’s data and information gap – FracTracker.

Frackers Run But Can’t Hide From SkyTruth Project -- Ever since the natural gas boom took off in Pennsylvania in 2006, some people living near the drilling rigs have complained of headaches, gastrointestinal ailments, skin problems and asthma. They suspect that exposure to the chemicals used in the drilling practice called hydraulic fracturing, or fracking, triggers the symptoms. But there’s a hitch: the exact locations of many active fracking sites remain a closely guarded secret. So the Johns Hopkins researchers turned to a small nonprofit called SkyTruth, which scrutinizes satellite and other aerial imagery to figure out what is happening down here on Earth. The scientists traveled to the group’s headquarters in West Virginia in September 2013 to ask SkyTruth to help them locate Pennsylvania’s fracking wastewater ponds. To pinpoint the location of these ponds, SkyTruth launched a project called FrackFinder. They enlisted more than 200 volunteers in public meetings and on social media from as far away as Japan, who have collectively spent thousands of hours poring over satellite images of Pennsylvania’s bucolic landscape. SkyTruth trained its recruits online and with specially designed apps to distinguish regularly-shaped waste ponds from natural ponds and wetlands. Ten different volunteers examined each image to ensure the accuracy of the data.   SkyTruth just released its crowdsourced map, which shows over 500 fracking ponds in Pennsylvania, up from a mere 11 located in photographs taken in 2005. 

Kerosene in fracking fluid: Toxic but legal - - In the last three years, 230,171 gallons of kerosene, a petroleum distillate with chemical components that are toxic to humans and wildlife, were used in fracking fluid in 129 wells throughout Fayette County, and it was all within the letter of the law. “They are environmental terrorists,” according to Ken Dufalla, president of the Greene County chapter of the Izaak Walton League of America (IWLA), a grassroots natural resource conservation society. While the industry reports that the pressurized fluid used to create fractures in a layer of shale some 6,000 to 8,000 feet beneath the earth’s surface is safely contained in the steel- and cement-cased wells, Dufalla, who has a degree in chemistry, says over the last four years he’s collected data from waterways in Fayette and surrounding counties showing flowback has entered the waters. “It is a problem, and it’s going to get worse.” In February, the US Environmental Protection Agency (EPA) clarified its position on the use of diesel fuel, saying that no diesel fuel may be used in fracking fluid without a permit from the federal government. The EPA specifically outlined five additives according to chemical abstract service (CAS) number that require permits, and all are variants of diesel fuel. Diesel fuels are considered particularly dangerous by the EPA because all variants contain some amount of benzene, toluene, ethylbenzene and xylenes (BTEX), which are highly toxic even in small amounts. According to the chemical disclosure registry FracFocus, companies who are drilling in Fayette County are using another petroleum distillate or diesel fuel variant, a type of kerosene identified as CAS #64742-47-8, in nearly every well that’s been fracked and reported to FracFocus. That CAS number is not among the five which are regulated by the EPA.

America’s Biggest Fracker Fracks Landowners - Chesapeake Faces Subpoena on Royalty Scam.  The Justice Department’s inquiry comes after a ProPublica investigation and years of complaints from landowners who say they have been underpaid for leasing land to the energy giant for drilling. 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 after years 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.  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". 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.

New York’s oil and gas producers hail election’s outcome - Brad Gill, executive director of the Independent Oil and Gas Association of New York, says Tuesday's election results, which gave Republicans control of the New York State Senate, are a good thing for his industry."We came out of the election very slightly better than before because of the total control that the GOP has of the Senate now," Gill said.  He said that a Republican-controlled Senate will provide a stronger buffer against Assembly bills targeting oil and gas."This makes us marginally better off than we were a few days ago," he said. "Primarily, it's the Assembly that generates the bills that decimate the oil and gas industry. And the best defense against those damaging bills is the Senate. I hope we have a little better insulation toward ridiculous legislation." Gill is displeased that the state has been dragging its feet and has yet to issue regulations on hydrofracking, a drilling method to extract natural gas from the Marcellus Shale, which runs through New York State.

NYS moves ahead on Finger Lakes gas storage plan -  The state Department of Environmental Conservations has issued draft permit conditions for a long-planned and increasingly controversial underground natural gas and propane storage facility in the Finger Lakes region near Watkins Glen. The site has been the site of civil disobedience by protests during the last several weeks, leading to mass arrests. DEC was careful to say in its press release _ issued late Monday after regular business hours _ that draft conditions “in no way indicate that the project will ultimately be approved.” A planned meeting in February by DEC called an “issues conference” could “result in a determination that denial of the permit is warranted, or that additional conditions may be necessary,” according to the DEC press release. Texas-based Crestwood-Inergy wants to pump about 88.2 million gallons both liquefied natural gas and propane for storage into caverns near Seneca Lake that were left behind from salt mining decades ago. The project has been under DEC review for five years.

Why New York Is Getting Infracstructured Instead of Fracked - Despite What Cuomo Does, New York Not Likely to Get Fracked.   Because there’s not much worth fracking. Not at current prices, nor at any prices that are reasonably expected for years. Not the Marcellus, not the Utica, not nothing.  What will happen is that many New Yorker’s could get infracstructured to death – gassed by compressor stations on gas pipelines taking the gas elsewhere, dumped on with frack waste on roads and poisoned by processed frack sludge in landfills.  Oh, and the planet is getting cooked with clean burning methane. That should be the focus of the debate, not which New Yorkers might get fracked where. Time to shift gears on this. Want more home grown energy in New York ? Try solar, wind, and hydropower. ABS = Anything But Shale.  New Yorkers can make more money out of solar panels, wind farms, growing grapes, legalizing marijuana, licensing casinos, building hydropower, making nano particles, producing TV shows, suing each other, making yogurt or selling baseball cards than they can out of shale gas: because there’s not enough commercially viable shale gas in the state to fill a large balloon. Jerry Acton has updated his Marcellus shale gas production model based on the latest production numbers from Pennsylvania. As the shale wells have moved up to the border, the initial production rates have dropped precipitously as the shale thins and go shallows, leaving the northernmost tier of Pennsylvania townships uneconomic at current or projected prices. And what about the vaunted Utica ? Turns out it’s about where it was predicted to be south of the New York border. And probably nowhere else in New York.

Commentary: Impact of fracking eludes us - While the gas industry continues to mislead the public about the harmful health and environmental impacts of unconventional natural gas development (also called hydraulic fracturing or fracking), evidence of its dangers is mounting. The latest revelation comes with the publication last week of a report on the impact on air quality from gas and oil extraction, processing and distribution in six states, including our own. The report, convened by Coming Clean, a collaborative of more than 200 groups working on environmental health issues, presents data from air samples collected around natural gas compressor stations and other facilities in New York, Arkansas, Colorado, Pennsylvania, Ohio and Wyoming, using the same equipment and methods that federal and state agencies use. The results document an array of hazardous chemicals in the air around these sites, often at levels far higher than traditional federal health and safety standards, and in some cases in concentrations that pose an immediate health threat to anyone exposed. Data collected around a blowdown incident at a compressor station in Hancock, N.Y., showed elevated levels of benzene, a carcinogen, and various petroleum gases. Samples collected around compressor stations in Pennsylvania contained formaldehyde at more than 7,000 percent above the Environmental Protection Agency's acceptable cancer risk levels.

Fracking numbers add up to environmental nightmare -  New Yorkers continue to wait with bated breath for the Health Department's study on fracking, which Gov. Andrew Cuomo says will come by year's end. But does New York really need this study to decide its fate? Scarcely a month goes by without some new fracking incident adding to the toll of damage done. Just over a year ago, we published our findings in a report called "Fracking by the Numbers." In the report, we looked at key measures of risks to our water, air, land and climate. Contamination of drinking water is one of the key threats posed by fracking. In reviewing state records, we found more than 1,000 documented cases where dirty drilling has contaminated groundwater or other drinking water sources. While such contamination can happen at several points in the fracking process — spills of fracking fluid, well blowouts, leaks around the well bore — perhaps the greatest threat to our water comes from the toxic waste that fracking generates. Often laced with cancer-causing and even radioactive material, this fracking waste has leaked from waste pits into groundwater, has been dumped into rivers and streams, and spread onto roadways.Using state and industry-submitted data, we calculated that fracking generated 280 billion gallons of toxic wastewater in 2012 alone. That's enough to flood all of New York City in a four-foot toxic lagoon, or fill the Empire State Building more than 1,000 times over. And yet, this toxic fracking waste is exempt from our nation's hazardous waste laws.

No Frackin’ Way Wine! -- You like the blog, you’ve love the wine! Eagles Crest Vineyards is now offering an un-fracked wine for those oenophiles that disdain the odor of diesel fuel, kerosene and arsenic in their merlot. Eagle Crest Vineyards in Conesus, Livingston County, has released No Frackin’ Way, a series of wines aimed at helping environmental groups carry on their opposition to hydraulic fracturing and related activities in New York state.  “These are not new wines,” says Eagle Crest co-owner Will Ouweleen. Instead, the Hemlock Lake winery chose to feature its three best sellers in the series: Midnight Moon, a red blend made from Noiret, Marechal Foch and Chancellor grapes; On-no-lee, a Cayuga White wine; and Queen of the Vine, a blush made from Isabella and Iona. “I wasn’t sure if we would be granted federal label approval,” adds Ouweleen, referring to the anti-fracking label. “But we were – without issue, in a speedy fashion.”

“Fracturing” vs “Fracking” in CongressA website tracks work usage in Congress, and can compare word usage, by prevalence and by party affiliation. Here’s how “fracking” fairs against “fracturing.” (“fraccing” is evidently not used at all anymore, even by corrupted politicians.)  “Fracturing” in ascendant going into the mid-terms, and heavily used by Republicans, who are evidently paid more to use it:

FracTracker Alliance launches oil, gas tracking app - - FracTracker Alliance announces the release of their free iPhone app – designed to collect and share experiences related to oil and gas drilling across the United States. As unconventional drilling or “fracking” intensifies, so too do the innovative ways in which citizens can track, monitor, and report potential issues from their smart phones. The app allows users to submit oil and gas photos or reports. Users can also view a map of wells drilled near them and user-submitted reports. This map shows wells that have been drilled both unconventionally and conventionally. “FracTracker’s app contributes to the collective understanding of oil and gas impacts and provides a new opportunity for public engagement,” explains Brook Lenker, Executive Director of the FracTracker Alliance. “We hope that our mobile app will revolutionize how people share oil and gas information.” Several organizations and community groups helped to test and improve the app during its development. To address questions about the impacts of oil and gas development across landscapes, FracTracker joined with the National Parks Conservation Association (NPCA) to create a crowd-sourced digital map with photos detailing the scale of oil and gas development near North Dakota’s Theodore Roosevelt National Park using the app. The photo map is part of a NPCA’s campaign designed to educate citizens about the cross-landscape impacts of oil and gas development near America’s national parks. NPCA is hosting two events this week in support of this campaign work – in Pittsburgh and Philadelphia.

Commission ignores public request on fracking -- Since July, the N.C. Mining and Energy Commission has received more than 200,000 public comments about its proposed fracking regulations. But when members finalize their rules this week, they will likely approve fewer than a dozen major changes. With permitting for natural gas drilling expected to begin next spring, appointed members of the regulatory panel say they are nearly finished with their rule-making. Members held four public hearings on their regulations this year and allowed residents more than two months to submit comments online. Commission members will consider increasing buffers between drill pads and drinking-water sources from 650 feet to 1,500 feet. They may also allow regulators to set up unannounced inspections at drill sites and order stoppages for drillers who violate state rules. However, based on last week's meetings, members seem unlikely to heed one common request inspired by Duke Energy's coal ash spill in the Dan River in February. Many urged the regulators to ban outdoor pit storage of fracking fluids, which contains industrial chemicals that are key to the drilling process. Opponents pointed to reports of leaking pits in other states, but members indicated any such "substantive" changes to the rules, based on state law, might force the commission to schedule further public hearings and delay future drilling.

Kale or fracking? Farmers and corporations fight it out for water -  Which would you rather have: lettuce and carrots for your salads, or affordable gasoline for your car? Affordable food prices or affordable electricity?You’ll have to make the choice. In fact, if you like a ready supply of tasty, affordable produce – and low food prices generally – this may be the time to start worrying. And not just about the drought in California, where desperate, panicky farmers are responding to the years-long dry spell by hiring dowsers – water witches – to scour their land for hidden wells, or the the south-west, which is in the grip of a “megadrought”.   Even in areas where drought isn’t a problem, the stress on limited water resources is approaching perilous levels, according to a new report from MSCI Inc. Rainfall levels may be just fine in areas like Boston or Long Island, but these regions rely heavily on irrigation to keep crops growing, and competition for those water resources just keeps growing from big industries. There are simply too many water-intensive industries competing for increasingly scarce water resources. “And now there are conflicts looming,” says Linda-Eling Lee, global head of ESG research for MSCI Inc in New York, who has delved into what this means for all of us.  “Right now in the United States there is a lot of attention to the problems that water shortages are causing for farmers and for residential users,” says Lee. California farmers have stopped growing avocadoes; house-proud residents of drought-stricken areas are banned from watering their lawns. “But there’s less attention to the conflict looming between industry and agriculture.”

Waste Water from Oil Fracking Injected into Clean Aquifers | NBC Bay Area: State officials allowed oil and gas companies to pump nearly three billion gallons of waste water into underground aquifers that could have been used for drinking water or irrigation. Those aquifers are supposed to be off-limits to that kind of activity, protected by the EPA. “It’s inexcusable,” said Hollin Kretzmann, at the Center for Biological Diversity in San Francisco. “At (a) time when California is experiencing one of the worst droughts in history, we’re allowing oil companies to contaminate what could otherwise be very useful ground water resources for irrigation and for drinking. It’s possible these aquifers are now contaminated irreparably.” California’s Department of Conservation’s Chief Deputy Director, Jason Marshall, told NBC Bay Area, “In multiple different places of the permitting process an error could have been made.”  Marshall said that often times, oil and gas companies simply re-inject that waste water back deep underground where the oil extraction took place. But other times, Marshall said, the waste water is re-injected into aquifers closer to the surface.

Fracking sand in oilfields stirs up a serious health risk for workers - Health concerns about oil field fracking have been focused on the mixed brew of chemicals injected into wells. But it is another innocuous-sounding substance — sand — that poses a more serious danger to workers. Government overseers of workplace safety first highlighted the problem three years ago and issued a hazard alert a year later warning that high levels of fine quartz sand around fracking operations could lead to silicosis and other lung illnesses. Health, science, regulation But efforts to update the 44-year-old exposure limits on sand dust are dragging on. Engineering solutions to the problem are still being researched. And, while many energy companies are taking steps to lessen the amount of what is referred to as "respirable crystalline silica" by scientists or "frac sand" by oilfield workers, the industry, with support from the U.S. Chamber of Commerce, is also opposing much in proposed new regulations. "The proposed rule does not address significant risks, nor provide significant benefits, and is neither technologically nor economically feasible. Accordingly, the Chamber believes the proposed rule must be withdrawn," reads a 33-page comment letter from the chamber to the Department of Labor.

Are Fracking Workers Being Poisoned on the Job? -- Last week’s Republican election victories will set the stage for more stagnation in Washington, but might also grease the skids for some of the most controversial energy ventures at ground zero in the climate change debate: the long-stalled Keystone XL Pipeline project, and the booming hydraulic fracturing, or "fracking," industry. But one thing that might put the brakes on the dirty fuel rush is the mounting research evidence linking oil and gas extraction to massive health risks for workers and communities.  A new study published in Environmental Health reveals air pollution data on major, in some cases previously underestimated, health risks from toxic contamination at gas production sites related to fracking. Air samples gathered around “unconventional oil and gas” sites by community-based environmental research teams contained unsafe levels of several volatile compounds that “exceeded federal guidelines under several operational circumstances,” and that “Benzene, formaldehyde, and hydrogen sulfide were the most common compounds to exceed acute and other health-based risk levels.”This suggests fracking may bring risk of cancer, birth defects and long-term respiratory and cellular damage to local towns and farms. Building on other studies on drilling-related water contamination, the air pollution research may stoke growing opposition from communities near drilling sites, who must weigh the industry’s promises of new investment and jobs against the potential cost to the human health.The findings also raise questions about the safety of fracking-site workers, who may have far less legal recourse over potential health damage than do local homeowners. Many work contract jobs under harsh, isolated conditions, in a volatile industry where pressure to pump profits is high and laborprotections weak. In contrast to other forms of oil and gas extraction, fracking is a particularly murky field because the process uses massive volumes of chemicals, with little regulatory oversight or corporate transparency.

Frackquake: 4.8 Magnitude Earthquake Felt Throughout Kansas -- While it is unclear if moments ago the Mississippian Lime Play under south Kansas was the first major shale quake to hit Kansas, or this was simply the first yet to be named shale company going Chapter 11, but moments ago the USGS reported that a 4.8 quake located 30 miles SSW of Wichita as well as a various other smaller quakes in north Oklahoma,shook the two states.  From KWCH: KWCH has received numerous reports of an earthquake felt throughout the state.  The U.S. Geological Survey has confirmed the epicenter of the quake as 8 miles south of Conway Springs, Kansas.  The earthquake was felt near Haysville, Derby, Wichita, and Oklahoma City. So far, there have been no reports of damage or injuries due to this earthquake. That said, it will likely take a few more, substantially stronger frackquakes in shale regions, before the popular mood turns against America's shale revolution which has been blamed - in Ohio and elsewhere- on an increased incidence of tremors.

4.8-magnitude quake rattles Kansas and Oklahoma (+video) - — An earthquake with a preliminary magnitude of 4.8 shook parts of Kansas and Oklahoma on Wednesday, the largest since a series of temblors began rattling Kansas a little more than a year ago. The quake's epicenter was near the town of Conway Springs, about 25 miles southwest of Wichita, according to the U.S. Geological Survey said. It came at 3:40 p.m., less than a day after a magnitude 2.6 earthquake was recorded near the southern Kansas town of Anthony. Kansas began experiencing an upsurge in earthquakes starting in fall 2013. So far in 2014, the state has experienced more than 90 earthquakes, with the smallest registering only on monitors, said Interim Kansas Geological Survey director Rex Buchanan. Studies have shown earthquakes can be caused when fluid, which is byproduct of various methods of oil and gas production, is injected into disposal wells. But a panel commissioned by Kansas Gov. Sam Brownback found there wasn't enough evidence to link the Kansas quakes to oil and gas exploration.

4.8 quake shakes Kansas, Oklahoma, Arkansas -- A magnitude-4.8 earthquake Wednesday shook up parts of Kansas, Oklahoma and Arkansas, the strongest of eight temblors that rattled the seismically active region over 24 hours. The moderately strong quake, which was relatively shallow at 3.4 miles deep, struck at 3:40 p.m. CT near the Sumner County community of Conway Springs, about 30 miles southwest of Wichita along the Oklahoma border, the U.S. Geological Survey said. The jolt was felt across much of the state and as far away as Tulsa, Okla., about 170 miles away. Some Arkansas residents also reported the shaking.Some structural damage was reported, mostly in nearby Milan, Kan., but no injuries. One Sedgwick County resident told a 911 dispatcher that the quake "moved me and my recliner about eight inches across the floor." The region is at the heart of the state's mini oil-and-gas boom involving hydraulic fracturing, commonly known as fracking, and state and federal agencies are trying to determine whether the controversial technique is responsible for a significant increase in earthquakes over the past two years. Energy companies deny the connection, saying the state has always had earthquakes. Just hours before Wednesday's jolt, Kansas Gov. Sam Brownback announced that the state would deploy six portable monitors to track the upswing in ground movement in Sumner County and its fracking neighbors Harper and Barber counties. The $85,000 network, which was recommended in September by a task force Brownback appointed to study the escalating seismic activity, is expected to be operating early next year.

Scientists see fracking as cause of quakes -- — Evidence is growing that fracking for oil and gas is causing earthquakes that shake the heartland.States like Oklahoma, Texas, Kansas and Ohio are being hit by earthquakes that appear linked to oil and gas activity. While the quakes are far more often tied to disposal of drilling waste, scientists also increasingly have started pointing to the fracking process itself.“Certainly I think there may be more of this that has gone on than we previously recognized,” Oklahoma Geological Survey seismologist Austin Holland told colleagues last week.In addition to what Holland has seen in Oklahoma, a new study in the journal Seismological Research Letters concludes that fracking caused a series of earthquakes in Ohio a year ago. That follows reports of fracking leading to earthquakes in Canada and across the Atlantic in the United Kingdom.Before 2008 Oklahoma averaged just one earthquake greater than magnitude 3.0 a year. So far this year there have been 430 of them, Holland said.Scientists have linked earthquakes in Oklahoma to drilling waste injection. Shale drilling produces large amounts of wastewater, which then is often pumped deep underground as a way to dispose of it without contaminating fresh water. Injection raises the underground pressure and can effectively lubricate fault lines, weakening them and causing earthquakes, according to the U.S Geological Survey.

Fracking Boom Spurs Demand for Sand and Clouds of Dust - Add sand mining to the list of industries transformed by the U.S. oil boom. The tiny grains of silica are what keep frackers fracking, propping open cracks punched into rock so oil and natural gas can flow. As drilling surged, so has demand for sand. Sand production has more than doubled in the U.S. over the past seven years. By the end of 2016, oil companies in North America will be pumping 145 billion pounds (66 billion kilograms) of it down wells annually. That’s enough to fill railcars stretching from San Francisco to New York -- and back. That’s triggering complaints from local communities, according to a Grant Smith, senior energy policy adviser at the Civil Society Institute. Dust from sand can penetrate deep into lungs and the bloodstream; mines consume massive amounts of water; sand-laden trucks are damaging roads; and property values can be affected. The surge in mining is a “little-understood danger of the fracking boom,” Smith said in a September call with reporters.Fracking companies are struggling to get enough sand because there aren’t enough trucks and railcars to deliver it. Higher transportation costs are eating into profits at oil-services companies like Schlumberger Ltd., Halliburton Co. and Baker Hughes Inc. (BHI) Halliburton CEO Dave Lesar said the world’s biggest provider of fracking services has had to delay work waiting for sand.  “We did in fact miss some jobs, as did nearly every other service company,” Lesar said on a conference call last month.

Democracy at Its Best: Boulder County Extends Fracking Ban » In a unanimous vote, three Boulder Colorado County Commissioners voted to extend the moratorium on oil and gas drilling in the county for the next three-and-a-half years. The three Democratic party women not only voted against fracking until July 1, 2018, they did so with strong language and gusto as tens-of-thousands of wells loom just across the border in neighboring Weld County waiting to invade the Boulder County landscape.  Commissioner Cindy Domenico started off the discussion with references about the increasing concerns and impacts of fracking on the public’s health. Commissioner Deb Gardner followed up by pointing out how fracking is related to climate change, and how Boulder County wants to be at the forefront of protecting the planet for future generations. Commissioner Elise Jones batted cleanup and knocked it out of the park with a discussion about the “industrialization of well pads in suburban housing communities” that she witnessed during her fracking tours in Weld neighboring county. For their action, the commissioners will likely get sued by the oil and gas industry. Encana, one of the biggest oil and gas driller/frackers in the U.S., has several well permits hanging in limbo in Boulder County, as do other drillers eyeing the “Niobrara Shale” that underlies this suburban landscape.

A Tale of Two Oil Companies - On Election Day, voters in a number of cities and counties voted on whether to severely restrict or ban oil and gas development -- the oil industry poured millions of dollars in an effort to avoid these restrictions.  Oil industry reactions varied.  The CEO of Chesapeake Energy warned his colleagues, "At least some of the oil companies that drilled the 272 active wells in Denton seemingly turned a deaf ear to community concerns about traffic, well location, and other issues not specifically related to fracking. Cathy McMullen, a nurse who headed an anti-fracking group and got the issue on the ballot said, 'It [the ban] says that industry can't come in and do whatever they want to do to people. They can't drill a well 300 feet from a park anymore'. Oil companies would do well to take McMullen's words to heart: 'If you want to prevent more bans, do yourselves a favor and listen to concerned citizens. Because if you don't you may wind up reaping what you've sown.'" But this commonsense message didn't resonate with much of the industry. The Texas Railroad Commission blithely declared it would simply continuing giving permits in Denton, because it didn't recognize the right of local officials to regulate oil and gas.And Chris Faulkner, the CEO of Breitling Energy, emailed me this absolutely stunning message:"The citizens of Denton, Texas have voted themselves into what will most definitely end up as the legal equivalent of a field of quicksand. The ground-rumbling they will hear won't be earthquakes, but the stampede of lawyers running to the area to join in the plethora of lawsuits...."The real losers here are the citizens of Denton who.... now face a future of nothing on their land but tumbleweeds and crickets."

As US Fracking Bans Increase, So Do Lawsuits  -- Legal skirmishes are mounting as more U.S. municipalities, including four in Tuesday’s midterm elections, ban the controversial oil and natural gas drilling technique known as hydraulic fracturing or fracking. Two lawsuits were filed Wednesday, only hours after 59% of voters in Denton, Texas, adopted the Lone Star state’s first fracking ban. The city, a 45-mile drive northwest of Dallas, sits atop the Barnett Shale, one of the nation’s largest natural gas fields and a prime fracking site. Fracking blasts huge volumes of water, mixed with sand and chemicals, deep underground to blast apart shale rock and release oil and gas molecules trapped in the ore. The Texas Oil and Gas Association and the Texas General Land Office filed suit to prevent the city from enacting the ordinance, which could take effect as early as Dec. 2. Also, state lawmakers say they will propose legislation to make such bans illegal. The association’s legal challenge says the ban violates Texas law, arguing state agencies have the power to regulate drilling and fracking. From coast to coast, as thousands of new fracking wells have led to a boom in energy production, dozens of municipalities have approved fracking bans or temporary moratoriums. Aside from 80 bans and 100 moratoriums in New York, some of which have expired, about 29 other local, tribal or state bans have passed in the United States, says Karen Edelstein of FracTracker Alliance. (See: “Battles Escalate Over Community Efforts to Ban Fracking.”) A record number of anti-fracking measures appeared on Tuesday’s ballots, and four passed — in Denton, the southeastern Ohio city of Athens and the northern California counties of San Benito and Mendocino. Not surprisingly, energy-industry groups are challenging some of these measures in court, and they’ve seen success. The Colorado Oil and Gas Association filed a lawsuit against a fracking ban passed by the city of Longmont in November 2013. In July, Boulder County District Judge Dolores Mallard struck down the ban, saying Colorado law gives the state the primary regulatory authority over oil and gas operations.

Further fallout follows ban -- Fallout continued at the state level over the landslide vote Tuesday that banned hydraulic fracturing in Denton city limits. During a media event sponsored by the Texas Tribune on Thursday morning in Austin, Christi Craddick, chairwoman of the Texas Railroad Commission, called the vote a disappointment. “We’re going to continue permitting up there because that’s my job,” she said. The Houston Chronicle reported pressure on the Texas Legislature, including quoting James Keffer, R-Eastland, about a possible “compromise” to the two lawsuits already filed challenging the city’s ordinance. The Texas Oil and Gas Association has asked a Denton district court for an expedited schedule in order to block the ban before it is scheduled to take effect Dec. 2. But in an interview Thursday afternoon, state Rep. Myra Crownover, R-Denton, said she hears Denton voters and respects the outcome. “We need to take a breath,” Crownover said. Both the Texas General Land Office, a state agency, and the Texas Oil and Gas Association, a trade association, sued Denton in separate actions Wednesday. Both are claiming the ordinance, a citizen initiative under the city charter, is unconstitutional. Crownover also said she didn’t agree with calls for a legislative compromise. “I don’t think that’s appropriate,” Crownover said. “Once something gets into court, we need to respect that and let it play out.”

Texan mayor vows to defend fracking ban after vote: There will be no more hydraulic fracturing in the city of Denton, Texas, if voters and the city's mayor have their way. This week, citizens approved a ban on the controversial technique that extracts oil and natural gas from the Barnett Shale formation on which the city sits. It is the first town in the Lone Star State to outlaw the practice best known as fracking, which has led to a huge upswing in U.S. oil and gas production but has unsettled conservationists around the country. "The noise, the nuisance, the light, and some of the smells and fumes just really provided the impetus for this movement to swell and explode," Denton Mayor Chris Watts said in an interview with CNBC's "Street Signs." He added that wells were being drilled and fractured about 180 to 200 feet from residential communities.So citizens who support fracking presented the city with a petition, which the mayor and city council denied. That led to the issue winding up on Tuesday's ballot. All told, 59 percent of voters approved the ban.   However, the issue is far from over. Two lawsuits have already been filed against the city of Denton, and the Texas Oil and Gas Association and the General Land Office both allege the ballot initiative was unconstitutional. Watts said it remains to be seen if other lawsuits will follow and vowed to defend the city's ordinance.  "The citizens exercised their right of self-help through the Denton city charter," Watts said. "I've vowed then and even in my oath I'm vowed to uphold the ordinances and the charter of the city of Denton. So we will certainly be defending our ordinance," he added.

Texas Oil Regulator Says It Will Not Honor Town’s Vote To Ban Fracking - On Tuesday, the town of Denton, Texas, voted by a wide margin to ban fracking within the city limits. Two days later, the chairwoman of Texas’ oil and gas regulator said she would not honor the ban.  Texas Railroad Commission Chairwoman Christi Craddick told the Dallas Morning News that she would continue giving permits to oil and gas companies seeking to frack in Denton. Craddick asserted she could override the ban because Denton does not have authority over drilling activity in the state. “It’s my job to give permits, not Denton’s,” Craddick said. “We’re going to continue permitting up there because that’s my job.”   Fracking has a long history in Denton, one of the most heavily-fracked towns in Texas. At the same time, residents have complained of poor air quality, disruptive noise in residential areas, and an increase in low-magnitude earthquakes.  Those were some of the reasons voters decided by a 59 to 41 margin on Tuesday to ban the practice. Explaining her decision to continue giving oil and gas companies permits to drill in Denton, Railroad Commission Chairwoman Craddick also voiced opposition against the ban. She told the Dallas Morning News that the voters’ decision was likely based on “misinformation” about the potential dangers of fracking, and that the oil and gas industry should have done more to communicate with locals.“We missed as far as an education process in explaining what fracking is, explaining what was going on,”

Denton’s ban won’t stop fracking permits, Railroad Commission chairwoman says — Despite Denton’s vote to prohibit fracking, the state Railroad Commission plans to continue giving permits to companies wanting to drill there, the agency’s chairwoman said Thursday. Christi Craddick, a Republican, said she was disappointed that voters adopted the ban on hydraulic fracturing — a technique of drilling deep into the ground to release oil and gas. But she took a confrontational swing in response: “I believe it's my job to give permits, not Denton’s. ... We’re going to continue permitting up there because that’s my job.” Adam Briggle, vice president of the Denton Drilling Awareness Group, said that outcome should have prodded the commission to “adopt a more conciliatory tone” and to reflect on why citizens were opposed to fracking. But, from the state, “it’s still just a heavy-handed, push-our-agenda-through approach,” he said. “They should have got a wake-up call, but it’s like they’re still just sleeping.” Craddick’s remarks, at an event sponsored by the Texas Tribune, came a day after the Texas Oil and Gas Association and the Texas General Land Office sued to prevent Denton from enacting the ordinance in 30 days. Also, GOP legislators already are considering bills to make such bans illegal. Craddick said the commission, which regulates the oil and gas industry, and fracking advocates could have done a better job explaining the process. Drilling increasingly is taking place near homes and schools as energy production spikes and communities grow.

Texas Ignoring Voters' Fracking Ban Decision - Petition Enclosed! -  At the risk of depressing you all over again, we have an unfortunate update on Denton, Texas, the first place in the state to democratically opt to put an end to fracking within the city: Texas officials are choosing to flagrantly ignore Denton’s vote. Before you give up all hope, please sign this petition telling Texas to abide by Denton’s decision and stop fracking in the city. As Insurance Journal reports, Christi Craddick, the chief regulator for the oil and gas industries in Texas, has stated in no uncertain terms that she will override the vote and continue with business as usual. “It’s my job to give permits, not Denton’s. We’re going to continue permitting up there because that’s my job,” said Craddick. On the flipside, it’s also Craddick’s job to deny permits when warranted. The fact that she believes there’s only one rubber stamp she can use (not to mention her steadfast commitment to blindly using it) goes to show how backwards Texas is when it comes to environmental policies. State officials are standing by non-renewable energy companies no matter what, not “regulating” as their jobs dictate. Because of its heavy supply of natural gas, Denton has one of the most mined cities in all of Texas. Altogether, corporations have pumped more than $1 billion in gas from underneath Denton. However, as a result of all of the fracking, the residents experienced firsthand the consequences of the destructive process. In addition to the negative health effects, fracking has brought earthquakes, dirtier air and constant noise pollution to the community.

Courts Will Take Up Case of Fracking v Drilling -- Denton’s vote last week to ban hydraulic fracturing within city limits drew a national spotlight, but resolved little in the bitter Barnett Shale dispute. Just hours after health and environmental advocates proclaimed victory, two opponents – the Texas Oil and Gas Association and Texas Land Commissioner Jerry Pattersonchallenged the ban in court.But this much is clear: The legal wrangling will give Texans a free course on the widely misunderstood oilfield technique that put Texas at the forefront a national energy boom.  Approved with 59 percent support, the Denton measure does not prohibit drilling outright; it would only ban fracking, which involves blasting apart underground rock with millions of gallons of chemical-laced water injected at high pressures. A frack job can take as long as 10 days, and wells are often fracked more than once.  But without fracking, opponents of the ban say, there's no profit in drilling for gas beneath the city, so in effect a fracking ban is a drilling ban. The lawsuits argue that the ban violates the state’s right to regulate oil and gas production, and mineral owners’ rights to tap those underground resources.  Texas law says the state intends its mineral resources to be “fully and effectively exploited,” but courts have said the power is not absolute. The Railroad Commission has jurisdiction over all oil and gas wells in the state, with authority to adopt “all necessary rules for governing and regulating persons and their operations.” Local governments have the right to impose reasonable health and safety restrictions, and the Legislature has granted most Texas cities, including Denton, the power to “regulate exploration and development of mineral interests.”  A key question is where fracking falls on that spectrum.

The Jessica Wins Right To Sue Frack Shills -- My pal Jessica Ernst just won the right to take the regulators that have been in bed with the frackers to court. For being in bed with the frackers. Imagine that.A landmark lawsuit that challenges the lax regulation of hydraulic fracturing in Canada has just scored a major victory. In a lengthy decision, Alberta Chief Justice Neil Wittmann dismissed all key arguments made by the government of Alberta against the lawsuit of Jessica Ernst, including the fear that it may unleash a flood of lawsuits against a government that is heavily dependent on hydrocarbon revenue.The Alberta government argued that Ernst’s $33-million lawsuit had no merit; that the government owed no duty of care to landowners with contaminated water; and that the government had statutory immunity.But Wittmann’s ruling disagreed on all major counts and ordered the lawsuit against the government to proceed. “While this is a novel claim, I find there is a reasonable prospect Ernst will succeed in establishing that Alberta owed her a prima facie duty of care,” Wittmann wrote.The lawsuit alleges that Encana was negligent in the fracking of shallow coal seams near her property, and that the regulator breached Ernst’s freedoms by banishing all contact with the landowner on the grounds that Ernst was a terrorist.  .  In particular, the Ernst lawsuit alleges that Alberta Environment’s investigation into the contamination of her well was botched. A legal brief filed by her lawyers details a list of alleged incompetencies.The Alberta government made an application to strike the entire claim after Wittmann ruled last fall that the lawsuit against Encana and Alberta Environment could proceed, but that the energy regulator was exempt from civil action due to its immunity clause. But Wittmann’s most recent decision firmly denies that application.

Bluefield Research releases a new report on U.S. hydraulic fracturing - — A new report released by Bluefield Research, “Water for U.S. Hydraulic Fracturing: Competitive Strategies, Solutions, & Outlook, 2014-2010,” stated that water treatment and reuse are expected to significantly increase, accounting for 27 percent of total produced and flowback water by 2020, as a result of water supplies at risk, tighter regulations and increased costs of disposal, according to a press release.  Bluefield reported that wastewater treatment spending for fracking is expected to rise almost three-fold, from $138 million in 2014 to $357 million in 2020, stated the release.   The release continued that the U.S. fracking industry overall will spend $6.38 billion in 2014 on water management — water supply, storage, transport, treatment and disposal; and water transport and disposal costs will account for 66 percent of the total water management spent this year. State regulators are starting to tighten the control of produced water disposal and in Pennsylvania, statewide treatment and reuserates for the Marcelllus Basin have jumped to 90 percent in 2014, noted the release. Read the entire release here.

Shale Firms Brace For Oil Price War As Crude's Drop Halts Growth Plans - After unlocking once-unobtainable energy reserves with hydraulic fracturing, U.S. shale companies must pull off another difficult feat: enduring lower oil and stock prices while reassuring investors used to strong returns that the future is still bright. So far, companies are optimistic — and, in the case of Continental Resources (CLR), bullish — on oil prices even as they have stopped new projects in Colorado, North Dakota and Texas. The scaled-back expansion plans appear to be a victory for Saudi Arabia, whose price war with U.S. producers has helped sink crude futures more than 25% since June. U.S. benchmark prices settled at $78.65 a barrel on Friday. Continental CEO Harold Hamm remains defiant and called the Organization of the Petroleum Exporting Countries, whose dominant producer is Saudi Arabia, a "toothless tiger. "What we're dealing with here is a renaissance (that) is going to be very long-lasting here in the U.S.," . "And we see OPEC worried about that and want to slow down what we're doing over here. The company, a pioneer in the massive Bakken shale play, sees a cooling-off period as a good thing for everybody and won't add drilling rigs next year. Slower growth in its operations will be an opportunity to improve efficiencies, while a slowdown in oil production should give world demand a chance to catch up, preventing oversupply, Hamm said.   Sanchez Energy (SN) slashed its 2015 capital spending forecast to $850 million-$900 million from a prior outlook of $1.1 billion-$1.2 billion, citing lower oil prices. EOG Resources (EOG) said it could reduce its exploration in the Wolfcamp and Barnett formations of Texas, which aren't as lucrative as the Eagle Ford play.  Analysts disagree on the exact point at which low oil prices will make drilling in shale formations unprofitable. The International Energy Agency estimates the vast majority of shale oil production is robust at $80 a barrel.  A more bearish view comes from Sanford C. Bernstein & Co., which estimated last month that one-third of U.S. shale oil production is uneconomical at that price. But it stressed, "We continue to believe we are near the bottom of the oil price cycle.

Shale gas: boom or bubble? — Countries are apparently eager to inflate the size of their shale gas reserves to attract investment, but the actual figures are spectacularly off. Millions of dollars are being shelled out for shale exploration by countries across Europe, often to confirm what they knew all along- there is no shale gas. Romania has been forced to face the facts when it comes to the fracking, or lack thereof. It had hoped to seal a lucrative deal to extract 1.4 trillion cubic meters of gas, which has now turned to out to be zero. “It looks like we don’t have shale gas, we fought very hard for something that we do not have,” Victor Ponta, Romanian Prime Minister said. Chevron, one of the ‘Big 6’ oil companies, has spent over $500 billion in searching for shale gas in Romania, and has the rights to over 9,000 square kilometers of land to drill, according to unconfirmed reports. The American oil giant’s huge investment in the country caused anti-fracking protests to erupt in December 2013. Poland, heavily dependent on dirty coal, also placed high hopes on shale discoveries. The 5 trillion cubic meter estimate has been slashed to 768 billion cubic meters. An example outside the EU is India, which at first was estimated to contain 63 trillion cubic feet of shale gas, a forecast that was slashed by 90 percent to 6.1 trillion cubic feet.

Early Signs Of A Pullback In Drilling Activity -- With oil prices low and showing no sign of an immediate rebound, the industry is beginning to pull back on spending.  Oil prices have dropped around 30 percent since summer highs, raising fears among producers across the globe. Yet, many oil majors are relatively diversified, with large holdings downstream. For example, ExxonMobil and Chevron have been insulated in the third quarter because of their large holdings in refining. Steep declines in oil prices may hurt their production sectors, but with lower priced oil as an input, big oil’s refining assets become more profitable.  Other companies that are not as large or integrated across various subsectors of the oil industry are not as shielded from the current soft price environment. And there are signs that a slowdown is beginning to take shape.  Oil services firm Baker Hughes reported another drop in the active rig count in early November, with oil rigs declining by 14. With 1,568 rigs in operation, the oil rig count is now at its lowest level since August, and down 49 rigs since a peak in October. Rigs could decline to 1,325 in 2015, according to some projections. While some companies appear undaunted, vowing to maintain or even increase production, others are beginning to pare back spending plans. Continental Resources, a major oil producer in North Dakota’s Bakken play, has stated that it won’t deploy more drilling rigs next year. Pioneer Natural Resources, with large holdings in the Eagle Ford and Permian basin, has hinted at more modest plans for 2015 due to lower oil prices.

US shale pioneers circle the wagons - If there is “price war” in the oil market, as Adel Abdul Mahdi, Iraq’s oil minister, has suggested, the US shale industry is refusing to take flight at the first sound of gunfire. As the International Energy Agency, the watchdog backed by developed economies, said on Wednesday, the fall in oil prices by more than 25 per cent since June is set to cause a cut in investment by US shale companies. Some that have not yet decided their 2015 capital spending budgets have said that they are reassessing their drilling programmes. A few that had already set out spending plans have in the past couple of weeks announced cuts. So far, though, they look like tactical withdrawals to concentrate their efforts where they will be most effective, rather than admissions of defeat. Activity is already starting to slow. There were 1,568 rigs drilling for oil onshore in the US last week, 41 fewer than in mid-October, according to Baker Hughes, the oil services group. That figure is likely to fall further over the coming months. Halcon Resources, which operates in the Eagle Ford shale of south Texas and the Bakken of North Dakota, said on Monday it planned to run just six rigs next year, compared with the eight it is running now and the 11 it had previously planned for 2015. Other leading shale oil companies have announced reductions in their capital spending plans: Continental Resources cut its 2015 budget from $5.2bn to $4.6bn; Rosetta Resources said it would spend about $950m next year, down from $1.2bn in 2014; and ConocoPhillips said it planned to spend less next year than the $16bn it is spending this year. Other companies have suggested they are likely to follow suit. EOG Resources, one of the most successful shale oil producers, said at the time of its third-quarter results last week that it planned to ensure that its capital spending plus its dividend payments were in line with the cash flow it has coming in, and that would probably mean reduced activity in some areas.

North Dakota drilling rig count drops - WSJ: The number of rigs drilling for Bakken Shale oil in North Dakota has dropped sharply as a result of the decline in crude oil prices, a development that may affect the state’s budget, the head of the North Dakota Department of Natural Resources said Friday. North Dakota has been one of the biggest beneficiaries of a boom in North American crude oil output, becoming the country’s second-largest producer after Texas. But a slide in crude prices threatens to slow the pace of drilling in the Bakken, where production costs are higher than for many other oil plays. Crude oil output in the state hit a record 1.18 million barrels a day in September, the latest figure available, but the number of drilling rigs has dropped from 195 that month to 186 currently, according to state data. That was down from a high of 218 rigs in May 2012. “The number one reason for the rig count drop is the lower oil price,” said Lynn Helms, director of the North Dakota Department of Natural Resources, at a news conference. Mr. Helms also told reporters that fall in the number of rigs may be factored into decisions by state lawmakers on next year’s budget. North Dakota receives royalty payments from oil and gas development, which have bolstered state coffers in recent years as production has surged. The state’s rig count may drop further as contracts aren’t renewed over the next few months if oil prices remain at current levels or fall further, Mr. Helms said, adding that major rig operators already expect to deploy fewer rigs next year. “Many of them are scaling their plans back at this point,” he said.

The Detailed US Shale Oil Cost Curve: Where Is The Line In The Sand? - On an almost daily basis, investors are reassured that a falling oil price is "unequivocally good" for the US economy. The "It's like a tax cut for the consumer"-meme dominates financial media while the impact on the Shale (or tight) oil industry is shrugged off blindly with "well breakevens are low, right?" As Barclays shows in the chart below, the breakeven price for oil to shut-in tight-oil supply varies by region (and corporation) adding that at $80/b WTI, most producers will sweat it out. But, they warn, if prices remain at these levels through 2015, it could compromise the significant potential new volumes that are needed to offset declines from existing wells. This new, higher-breakeven volume is small in 2015, but becomes much larger in 2016 (with a 17-25% plunge in earnings which would drastically reduce capex... and thus The US Economy). As Barclays notes, As oil prices continue to fall, we review the likely supply response of tight oil supplies. Admittedly, cost of supply curves do not tell the whole story about where prices might bottom. At $80/b WTI, we think most producers will sweat it out and achieve their stated production objectives in 2015. But if prices remain at these levelsthrough 2015, it could compromise the significant potential new volumes that are needed to offset declines from existing wells. This new, higher-breakeven volume is small in 2015, but becomes much larger in 2016.

Global Debt Growth Kept Oil Prices High And Delayed The Bakken “Red Queen” - What makes extraction from source rock in Bakken attractive (as in profitable) is/was the high oil price and cheap debt (low interest rates). The Bakken formation has been known for decades and fracking is not a new technology, though it has seen and is likely to see lots of improvements.LTO extraction in Bakken (and in other plays like Eagle Ford) happened due to a higher oil price as it involves the deployment of expensive technologies which again is at the mercy of:

  • • Consumers affordability, that is their ability to continue to pay for more expensive oil
    • Changes in global total debt levels (credit expansion), like the recent years rapid credit expansion in emerging economies, primarily China.
    • Central banks’ policies, like the recent years’ expansions of their balance sheets and low interest rate policies
  • o Credit/debt is a vehicle for consumers to pay (create demand) for a product/service
    o Credit/debt is also used by companies to generate supplies to meet changes to demand
    o What companies in reality do is to use expectations of future cash flows (from consumers’ abilities to take on more debt) as collateral to themselves go deeper into debt.
    o Credit/debt, thus works both sides of the supply/demand equation
  • • How OPEC shapes their policies as responses to declines in the oil price
  • o Will OPEC establish and defend a price floor for the oil price?

Fracking Industry Damaged by Saudi Arabia Oil Pricing -- The U.S. oil industry has taken a beating from the recent drop in oil prices, which have plunged more than 25% since the summer. Oil and oil service stocks across the board have been bruised… but none more so than those related to the fracking industry. You see, fracking is an expensive process compared to conventional oil extraction techniques – a situation that became grave three weeks ago, when Saudi Arabia decided to try to run U.S. oil out of business by dropping the price of its crude oil. Now, it looks like fracking may be the first casualty in this worldwide oil war.  In conventional oil exploration and production, most of the cost is incurred before the first barrel of oil is even extracted. But in fracking, the cost is upfront for both the land and the operation of each well. Fracking also requires chemicals, vast amounts of water, and power to release oil from shale. The more complex the shale formation, the more expensive each barrel of oil is. And unlike conventional drilling, which looks for vast oil reservoirs that can be exploited for decades, fracked oil formations yield big returns for just a few months before they’re quickly used up. Thus, resources are frequently moved to new wells in order to keep production flowing.

KunstlerCast 260 — Petroleum Geologist Art Berman on Shale Oil and Gas - Kunstler - Original audio source - mp3 - Independent petroleum geologist Arthur Berman says of the shale oil and shale gas scene: “What we’re reading in the newspapers everyday is completely distorted. It couldn’t be more wrong and delusional.” JHK and Art delve into the finer points of the so-called shale oil miracle. Can anybody actually make any money in it? What are the long-term prospects? How are they raising capital to do it? We explore some deep, dark corners of this largely misunderstood phenomenon and its relation to the wishful thinking economy of our time. Direct download:

There Will Be Blood - How The Fed Has Flooded The Shale Patch With Junk Debt -  US light sweet crude last traded at $76.90 a barrel, down 26% from June, a price last seen in the summer of 2010. But this price isn’t what drillers get paid at the wellhead. Grades of oil vary. In the Bakken, the shale-oil paradise in North Dakota, wellhead prices are significantly lower not only because the Bakken blend isn’t as valuable to refiners as the benchmark West Texas Intermediate, but also because take-away capacity by pipeline is limited. Crude-by-rail has become the dominant – but more costly – way to get the oil from the Northern Rockies to refineries on the Gulf Coast or the East Coast. These additional transportation costs come out of the wellhead price. So for a particular well, a driller might get less than $60/bbl – and not the $76.90/bbl that WTI traded for at the New York Mercantile Exchange. Fracking is expensive, capital intensive, and characterized by steep decline rates. Much of the production occurs over the first two years – and much of the cash flow. If prices are low during those two years, the well might never be profitable. Meanwhile, North Sea Brent has dropped to $79.85 a barrel, last seen in September 2010.  So the US Energy Information Administration, in its monthly short-term energy outlook a week ago, chopped down its forecast of the average price in 2015: WTI from $94.58/bbl to $77.55/bbl and Brent from $101.67/bbl to $83.24/bbl. Independent exploration and production companies have gotten mauled. For example, Goodrich Petroleum plunged 71% and Comstock Resources 58% from their 52-week highs in June while Rex Energy plunged 65% and Stone Energy 54% from their highs in April.

If WTI Drops To $60, It Will "Trigger A Broader HY Market Default Cycle", Says Deutsche - Suddenly it is not just the shale companies that are starting to look impaired as a result of tumbling energy prices. According to a Deutsche Bank analysis looking at what the "tipping point" for highly levered companies is in "oil price terms", things start to get really ugly should crude drop another $15 or so per barrell. Its conclusion: "we would expect to see 1/3rd of US energy Bs/CCCs to restructure, which would imply a 15% default rate for overall US HY energy, and a 2.5% contribution to the broad US HY default rate.... A shock of that magnitude could be sufficient to trigger a  broader HY market default cycle, if materialized. "

EU Fracking Boom Becoming Less Likely -- Pro-fracking campaign in the global media is fading fast. A year or two ago the extraction method suitable for the Arizona desert was presented as a key component of the EU's energy security policy by high-ranking officials in the European Commission. Many large corporations that announced an influx of investment into Eastern European fracking projects between 2010 and 2013 are now gradually reducing the scope of their planned work. Their decision was prompted by environmental and political problems that receive insufficient coverage in the industry media. It’s becoming clear that fracking technology can’t be brought to the EU “as is” from the United States. Recently published data by Rice University, Texas indicates that simple recycling of the tainted waste water is not safe, writes. A year or two ago supporters of hydraulic fracturing used to preach about “green innovations in the shale revolution” with the passion of small-town televangelists, but now, after the publication of new data, they have switched tactics and simply remain silent about environmental problems.. "Making fracking safe is simply not possible, not with the current technology, or with the inadequate regulations being proposed," Louis Allstadt, former executive vice president of Mobil Oil, said. What did the U.S. State Department do with a not-so-green technology that is too dangerous to use at home? Export it to the closest allies in Europe, of course. Nor should one forget that in the United States itself, the “shale bubble” would have been impossible without the direct support of U.S. Dept. of Energy programs, as well as the backing of Hillary Clinton’s State Dept., which pushed the issue on an international, political level.

Polish fracking: Shale fail | The Economist: Poland would become "a second Norway”, as Radek Sikorski, the former foreign minister, put it in 2010. All that was needed was to open the country to foreign drilling firms, set up a regulatory and profit-sharing structure, open the taps, and watch the methane (and the dollars) flow. Four years later, those dreams are sputtering out. International companies are fleeing Poland, government efforts to create regulations for the sector are flailing, and while a few test wells have been drilled (including the one pictured above, in the eastern village of Grzebowilk), they show disappointing results. “It’s clearly developing below expectations,” says Pawel Poprawa, an oil and gas expert at Poland’s Energy Studies Institute, an advisory firm. Mr Poprawa puts much of the blame on a “slow and incompetent” bureaucracy, which has made life difficult for gas prospecting firms. Despite years of government promises, Poland’s administration is one of the most sluggish in Europe. It takes about seven months to get the permits needed to start drilling, six months to amend the drilling concession and nine months to obtain an environmental decision, according to Kamlesh Parmar, head of the Polish Exploration and Production Industry Association.

Let Shale Gas Firms Create Bigger Tremors, Say Academics: If the shale gas industry is to succeed in Britain, the government must relax regulations on the severity of tremors that fracking can cause, two academics have warned. They liken the current limit of 0.5 on the Richter scale to that of banning buses from driving past houses, or slamming wooden doors, the Telegraph has reported. Dr Rob Westaway and Professor Paul Younger, both of the University of Glasgow’s School of Engineering have warned that the stringent regulations are deterring would-be investors from undertaking shale gas extraction in Britain. “The present regulation is a deterrent to investment and will need to be changed before energy companies are willing to invest the large sums that will need to be spent to develop shale gas in the UK,” said Dr Westaway. "If regulations for other vibration-causing activities were similarly restrictive you'd have to prevent buses from driving in built-up areas or outlaw slamming wooden doors." The regulations were introduced following a moratorium on fracking, the process used to extract shale gas, after fracking firm Cuadrilla caused two small tremors – one measuring 1.5 on the Richter scale and the other 2.3 – whilst fracking near Blackpool in 2011.

Fracking won't cut bills and ministers 'oversold' shale gas benefits, experts say -  Fracking won’t cut energy bills and ministers have “oversold” the benefits of UK shale gas exploration, Government-funded experts have warned. In a report on Wednesday, academics at the UK Energy Research Centre (UKERC) said shale gas had been wrongly “heralded as the solution to our security of supply concerns”. Instead of “banking on shale” the Government should support investment in more gas storage facilities to prevent prices spiking in the event of supply crises, the experts, who are independent but taxpayer-funded said. Speaking ahead of the report’s launch, Professor Jim Watson, UKERC director, said: “Where the government has gone wrong is just talking this whole thing up… as if it was going to reduce consumer bills and tackle our energy security problems in a substantial way any time soon. I think that was very premature. The framing of it was oversold.” Prime Minister David Cameron declared last year that fracking had “real potential to drive energy bills down” and that Britain was going “all out for shale”, while the Chancellor George Osborne has been similarly enthusiastic and last weekend announced plans for a sovereign wealth fund.

Oil Price Slide – No Good Way Out -- The world is in a dangerous place now. A large share of oil sellers need the revenue from oil sales. They have to continue producing, regardless of how low oil prices go unless they are stopped by bankruptcy, revolution, or something else that gives them a very clear signal to stop. Producers of oil from US shale are in this category, as are most oil exporters, including many of the OPEC countries and Russia. Some large oil companies, such as Shell and ExxonMobil, decided even before the recent drop in prices that they couldn’t make money by developing available producible resources at then-available prices, likely around $100 barrel. See my post, Beginning of the End? Oil Companies Cut Back on Spending. These large companies are in the process of trying to sell off acreage, if they can find someone to buy it. Their actions will eventually lead to a drop in oil production, but not very quickly–maybe in a couple of years.  So there is a definite time lag in slowing production–even with very low prices. In fact, if US shale production keeps rising, and Libya and Iraq keep work at getting oil production on line, we may even see an increase in world oil production, at a time when world oil production needs to decline.  At the same time, demand doesn’t pick up quickly as prices drop. We are dealing with a world that has a huge amount of debt. China in particular has been on a debt binge that cannot continue at the same pace. Furthermore, the Federal Reserve’s discontinuation of quantitative easing has cut off a major flow of funds to emerging markets. Because of this change, emerging market demand for oil has dropped. This has happened partly because of the lower investment funds available, and partly because the value of emerging market currencies relative to the dollar has fallen. Again, a decrease in oil price is not likely to fix this problem to a significant extent.

IEA Warns That Pricier Oil is In Your Future -- In its latest annual World Energy Outlook, the International Energy Agency (IEA) warned that the current period of oil abundance may be fleeting, and in fact, without heroic levels of production increases, oil markets will grow dangerously tight in the coming years.  Global oil demand is expected to increase by 37 percent by 2040, with a dominant proportion of that coming from developing countries – i.e. China and India. In fact, the IEA says that for every barrel of oil the industrialized world expects to eliminate from demand through efficiency or other ways of reducing demand, developing countries will burn through two additional barrels. The IEA predicts that the world will need to extract an additional 14 million barrels of oil per day (bpd) by 2040, which comes on top of today’s production levels of about 90 million bpd. While there is a lot of triumphalism in the United States about shale oil production and how places like the Bakken and the Eagle Ford have ushered in an era of abundance, the IEA says that tight oil production in the U.S. – along with Canadian oil sands – will only last until the mid-2020’s.  After that point, when the shale revolution peters out, oil markets revert to their old ways – that is, looking to the Middle East once again to meet global demand. And that should raise some alarm. Saudi Arabia will remain one of the largest and most important oil producers in the world, but it probably won’t be able to ramp up production much beyond its current levels. There is some slack production in Iran, due to western sanctions, but even when it returns to the fold it likely will only make a small contribution to oil production growth in the long-term.

Plunging crude paving way to oil shortages, price spikes: IEA - Global energy consumers are enjoying lower prices today but the plunge in crude costs – coupled with rising geopolitical tensions – is setting the stage for future supply shortages and price spikes, the International Energy Agency says in its annual World Energy Outlook. “The global energy system is in danger of falling short of the hopes and expectations placed upon it,” said the Paris-based group that advises richer countries on energy policy. Its annual survey was released Wednesday, and provides a stark warning that the world is falling short of the investment required to meet energy demand and reduce greenhouse gas emissions from fossil fuels.The challenges lie across the energy spectrum but are particularly acute in the global oil market, where the recent plunge in prices will deter capital expenditures that are needed to offset declining production from aging fields, even as lower pump prices spur demand growth. That decline in supply and increase in demand would drive prices higher in the coming years than they would be under a stable price scenario. “The short-term picture of a well-supplied oil market should not disguise the challenges that lie ahead as reliance grows on a relatively small number of producers,” primarily in the Middle East, it said. In an interview from Paris, IEA chief economist Fatih Birol said Canada’s oil sands are an important source of secure supply as other major producing regions – from Russia and the Middle East – face political upheaval. “We expect Canadian production will be a very important cornerstone of the security of global oil markets,” Mr. Birol said. The IEA forecasts that Canadian production will grow from four million barrels a day currently to 7.4 million by 2030, with virtually all of that growth coming from the oil sands.

Republicans Vow to Fight E.P.A. and Approve Keystone Pipeline - — The new Republican Congress is headed for a clash with the White House over two ambitious Environmental Protection Agency regulations that are the heart of President Obama’s climate changeagenda. Senator Mitch McConnell, the next majority leader, has already vowed to fight the rules, which could curb planet-warming carbon pollution but ultimately shut down coal-fired power plants in his native Kentucky. Mr. McConnell and other Republicans are, in the meantime, stepping up their demands that the president approve construction of the Keystone XL pipeline to carry petroleum from Canadian oil sands to refineries on the Gulf Coast.At this point, Republicans do not have the votes to repeal the E.P.A. regulations, which will have far more impact on curbing carbon emissions than stopping the pipeline, but they say they will use their new powers to delay, defund and otherwise undermine them. Senator James M. Inhofe of Oklahoma, a prominent skeptic of climate change and the presumed new chairman of the Senate Environment and Public Works Committee, is expected to open investigations into the E.P.A., call for cuts in its funding and delay the regulations as long as possible.The Republicans’ new majority in the Senate also increases their leverage in pushing Mr. Obama to approve the pipeline, although it is still unclear if he will do so.The White House vowed to fight back. “We know that there will be attempts to impede or scale back our actions,” John D. Podesta, the senior White House counselor who is leading Mr. Obama’s climate agenda, said in a statement on Monday. But he added, “We’re confident we can prevail.”For Mr. McConnell, fierce opposition to the E.P.A. regulations is more than just a political priority. Kentucky is one of the country’s top coal producers, and coal generates over 90 percent of the state’s electricity. His re-election campaign was driven by a promise to protect Kentucky from what Republicans called Mr. Obama’s “war on coal.”

White House would 'consider' Keystone bill - The White House said Thursday it would "consider" a rider approving construction of the Keystone XL oil pipeline if it was offered in legislation that was able to pass both houses of Congress. But press secretary Josh Earnest also emphasized that the administration was "committed" to the "firmly established precedent" for such transnational projects, which includes the ongoing review at the State Department.  "We’ll consider any sort of proposals that are passed by Congress, including a rider like this, that, you’re right, does seem to pretty directly contradict the position that’s been adopted by this administration," Earnest said. Asked directly if the president would veto legislation requiring approval of the controversial construction project, Earnest sidestepped. "I guess my point is they haven’t put forth something like that that has gotten the majority of both houses of Congress," Earnest said. He added that "we'll see" if such legislation could pass in the upcoming Republican-led Senate. "At that point, we’ll be able to give you a more specific reaction to it."

Lame Duck Senate Will Vote To Approve Keystone Pipeline: Senate Democratic leaders have agreed to hold a vote on approval of the Keystone pipeline as early as next week, dropping their longstanding objections after losing their majority last week. A vote is tentatively scheduled for Tuesday, according to the offices of Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY), who are poised to trade titles in January. The deal was announced within an hour of Sen. Mary Landrieu (D-LA) demanding a vote. She faces a tough runoff election on Dec. 6. McConnell attributed the Democrats' change of heart to the election. "The American people have elected a new Republican Majority in the Senate and that has already made a difference," he said. "I was glad to see that Senate Democrats have finally backed off trying to obstruct construction of the Keystone XL Pipeline, the single largest shovel-ready project in America." Legislation to approve the pipeline has broad support in the Senate and was all but guaranteed to pass under the coming Republican majority if Democrats resisted a vote on it during the lame duck session. The House is planning to vote on Thursday for legislation to approve by pipeline, offered by Rep. Bill Cassidy (R-LA), Landrieu's opponent in the runoff.

U.S. House passes Keystone bill (Reuters) - The Republican-led U.S. House of Representatives approved the Keystone XL pipeline on Friday, but a similar measure struggled to get enough support in the Senate and President Barack Obama indicated he might use his veto if the bill does get through Congress. The legislation, approved by 252 votes to 161, circumvents the need for approval of TransCanada Corp's $8 billion project by the Obama administration, which has been considering it for more than six years. No Republicans voted against the measure, while 31 Democrats voted for the bill. It was the ninth time the House has passed a Keystone bill, and supporters were confident that this time the Senate would follow suit and pass its version. But passage was not assured in the Senate, which is expected to take up the measure next Tuesday. Supporters were still one vote shy of the 60 needed to overcome a filibuster, a blocking procedure, an aide to a Keystone supporter said on Friday. The aide spoke on condition of anonymity. Approval for the pipeline, which would help transport oil from Canada's oil sands to the U.S. Gulf coast energy hub, has rested with the Obama administration because it crosses an international border.The decision has been pending amid jousting between proponents of the pipeline who say it would create thousands of construction jobs and environmentalists who say it would increase carbon emissions linked to climate change.  If the measure did pass Congress Obama would have to decide whether to make rare use of his veto power.

Time for Democrats to stand up to big oil: It was the tale of two Democratic parties. Early Wednesday morning, President Obama stood with President Xi of China and announced a historic climate pledge to cut greenhouse gas emissions and promote clean energy. Just hours later, Mary Landrieu, the Democratic Senator from Louisiana, stood up on the floor of the Senate and introduced another bill to force approval of the climate-destroying Keystone XL pipeline. It’s time for the Democratic Party to make a choice. Either they can be the party that stands up to Big Oil, combats climate change, and protects America’s future. Or they can be a party of melts away every time the fossil fuel industry applies a little heat. This is one place where an “all of the above” strategy isn’t going to work. Sen. Mary Landrieu represents the worst of the Big Oil Democrats. Her home state of Louisiana is losing a football field worth of land into the Gulf of Mexico every hour. New Orleans was ground zero for Hurricane Katrina, one of the worst extreme weather events in U.S. history. Yet when it comes time to choose between protecting the environment or pleasing her Big Oil donors, the money comes out on top every single time. The Democrats didn’t get a thumping in the midterm elections because they confidently ran on a bold set of principle and voters rejected them. They lost because voters had no sense of their vision. People are sick and tired of Washington and they took it out on the party in power. If Democrats want to energize their base for 2016, they’re going to have to start showing a bit more spine — especially when it comes to the fossil fuel industry.

Oil prices, not Obama’s veto, may block Keystone - — As victorious Republicans gleefully anticipate quick congressional approval of the Keystone XL pipeline after their gains in midterm elections, plunging oil prices threaten to make the project to transport Canada’s oil sands production a white elephant before it can ever be built. Republicans are already counting on filibuster-proof support in the Senate with some Democrats joining the cause. . They may even be able to get to the 67 votes to override a presidential veto if President Barack Obama should choose to oppose it — though he has given little indication that he would do so and may well plan on using Keystone as a bargaining chip to get Republican assent to some of his proposals. In the meantime, however, oil prices are falling below the price at which the high-cost extraction of this heavy crude oil can be profitable.   A report out this week from the Organization of Petroleum Exporting Countries cut that group’s forecast for global demand and prices over the next five years, pushing U.S. oil prices down closer to $75 a barrel and international benchmark Brent Crude to near $80, a drop of more than $30 from its 52-week high. Earlier this week, Saudi Arabia, the biggest OPEC producer, cuts its oil prices to U.S. customers, signaling it was ready to let prices decline in order to preserve market share. But the Canadian Energy Research Institute estimates that oil-sands projects need a price of $85 a barrel to be profitable in the current cheapest (in situ) method and new standalone mines will require $105 a barrel to make a reasonable return.

'Keystone XL Clone' to Pump Tar Sands Oil Starting Next Year »  As Republicans get set to test their new majority in the U.S. Senate and their complete control of Congress to push through approval of the Keystone XL pipeline, a new investigative report by editor Lou Dubose at the Washington Spectator reveals that the construction of a “Keystone XL clone” pipeline with almost the same capacity is already taking place. While TransCanada continues to battle the public outcry against its Keystone XL project, another company, Enbridge, is quietly building the Alberta Clipper pipeline. Like Keystone XL, it will pumped 830,000 oil barrels (bbl) a day of tar sands bitumen crude oil from the Alberta oil fields to U.S. refineries. “In six to eight months the Canadian tar-sands spigot opens to full capacity,” wrote Dubose. “Barring litigation or action by the State Department, Enbridge will achieve what has eluded TransCanada. And it will have done so with scant attention from the media and without the public debate generated by campaigns against the Keystone XL.”

Groups Sue U.S. State Dept. to Stop Alberta Clipper Tar Sands Pipeline » Yesterday the Washington Spectator ran an investigative piece tearing the veil of secrecy from the Alberta Clipper pipeline project, a plan by Canadian mining company Enbridge to build a pipeline nearly equal in length and capacity to the Keystone XL to transport tar sands crude oil to the Gulf of Mexico for refining and exporting. With the U.S. State Department’s cooperation, Enbridge found a loophole to circumvent the legal approval process needed to cross the international Canadian/U.S. border. And, by keeping a low profile, it managed to avoid the public outcry that has stalled Keystone XL for six years.  That period of operating off the public radar may be coming to an end. Today a coalition of eight environmental, conservation and indigenous groups announced that they have filed a lawsuit against the U.S. State Department and Secretary of State John Kerry in a Minneapolis federal court. The suit charges that approval was granted despite lack of public notice or the legally required review of environmental and public health impacts. The groups filing the lawsuit include White Earth Nation, Sierra Club, Center for Biological Diversity, Honor the Earth, National Wildlife Federation, Minnesota Conservation Federation, Indigenous Environmental Network and MN350, being represented by the Vermont Law School Environmental and Natural Resources Law Clinic. Their intention is intended to force the State Department to reverse its approval and ensure that a full environmental review takes place. “This lawsuit challenges the State Department’s illegal approval of Enbridge’s tar sands expansion plans,” said Sierra Club staff attorney Doug Hayes. “Rather than stick to its ongoing review process that the National Environmental Policy Act requires, the State Department green-lighted the expansion before the process is complete.”

Former Treasury Secretary Timothy Geithner’s Warburg Pincus to Profit from Tar Sands Exports -- Steve Horn -- Several environmental groups have filed a lawsuit against the U.S. Department of State and Secretary John Kerry over the permitting of a controversial border-crossing northern leg of a pipeline system that DeSmogBlog has called Enbridge's “Keystone XL Clone.” The Keystone XL Clone is designed to accomplish the same goal as TransCanada's Keystone XL: bringing Alberta's tar sands to Gulf coast refineries and export market. It consists of three legs: the Alberta Clipper expansion as the northern leg, the Flanagan South middle leg and the Seaway Twin southern leg. Green groups have called the northern leg an “illegal scheme” because the Enbridge Alberta Clipper expansion proposal didn't go through the normal State Department approval process. Instead, State allowed Enbridge to add pressure pumps to two separate-but-connected pipelines on each side of the border and send Alberta's diluted bitumen (“dilbit”) to market. Enbridge dodged a comprehensive State Department environmental review, which involves public hearings and public commenting periods. The groups say this is illegal under the National Environmental Policy Act (NEPA) and have demanded a re-do for Enbridge's application process. The maneuver has a key beneficiary: former Obama Administration Secretary of the Treasury, Timothy Geithner, who now serves as President of the private equity giant Warburg Pincus.  Geithner's connection to the lawsuit not only adds intrigue, but also reveals the purpose of Enbridge's Keystone XL Clone: an export fast-track to the global market.

Falling oil prices and Keystone: that goop might stay in the ground after all… --Back when the idea for the Keystone XL pipeline first came out, I wrote numerous pieces suggesting that while I worried about the environmental impact of extracting and refining oil from tar sands–a particularly dirtier process–I figured that it was likely coming out of the ground, regardless of whether it ultimately went south through the US or west through Canada.  Now I’m not so sure. The sharp decline in oil prices change the calculus, as noted in this Marketwatch analysis: the Canadian Energy Research Institute estimates that oil-sands projects need a price of $85 a barrel to be profitable in the current cheapest…method and new standalone mines will require $105 a barrel to make a reasonable return. Crude is trading at $75/barrel as we speak, and the EIA just cut its year-ahead forecast by $18 to $85/barrel.  Of course, they could be wrong and oil could climb to a high-enough perch to make tar sand extraction profitable. Meanwhile, the timing of the politics could easily push Congress to offer bipartisan support for Keystone this week, as Louisiana Sen. Mary Landrieu wants this behind her in her upcoming runoff election.  But for now, the economics may be doing the environment a favor by pricing oil at a level that could keep the tar sands underground.

Anti-pipeline protesters post snarling selfies online after lawyer says facial expressions constitute assault - Bulging eyes, scrunched noses, bared teeth — anti-oil pipeline protesters are facing off against energy giant Kinder Morgan with the meanest mugs they can muster. Scores of people are posting snarling selfies online after legal arguments made in B.C. Supreme Court last week that facial expressions constitute assault. Kinder Morgan lawyer Bill Kaplan told the court that activists who have blocked a subsidiary pipeline builder in a Metro Vancouver conservation area obstructed workers in part by making faces. Millions in damages are being sought. A social media meme poking fun at the assertion has gone viral. Professed environmental advocates, random members of the public, at least one of the defendants and Vancouver Mayor Gregor Robertson have uploaded interpretative photos dubbed the “Kinder Morgan face.”

Ecuador tribe winning in court, but still losing at home -- An anecdotal article by freelance writer Alexander Zaitchik puts a sad reality to a very real truth — defeating Big Oil in court doesn’t get your land back, doesn’t clean your water and doesn’t revive lost lives.  The Indigenous Peoples of Guiyero, Ecuador, fought and beat Chevron in New York courts after the oil company left behind massive amounts of oil and toxic wastewater when it pulled out of the town in the mid-1990s. The Guiyero’s land and water became another casualty of corporate greed, a giant sludge of pollutants and slime. Meet the Amazon Tribespeople Who Beat Chevron in Court—but Are Still Fighting for Clean Water My destination was the village of Guiyero, a remote dot of an Indian community more than a hundred miles downriver from the oil city of Lago Agrio. The riverside hamlet is at the eastern edge of territory deeded to the Waorani, one of the largest tribes in the region. Situated where some of Ecuador’s last unspoiled wilderness meets its oil frontier, it is a good place to see what a resource extraction boom entering its sixth decade can do to a rainforest.  Get the rest of the story.

Shell Ignored Faulty Pipeline Warnings Before Massive Nigeria Oil Spills, Documents Show -- Long before a Shell Petroleum Development Company pipeline spilled up to 21 million gallons of oil in southern Nigeria, employees warned the company that the same pipeline was at risk of leaking, according to internal documents seen by the BBC and reported Wednesday.   The documents, also seen by The Guardian, show that the company received warnings at least two years before the spills that the Trans Niger Pipeline — then more than 30 years old — was of “immediate and utmost concern” and should be replaced. “There is a risk and likelihood of rupture on this pipeline at any time, which if it happens, could have serious consequences for the safety of life, the environment and the nation’s economy,” read a 2006 letter from Basil Omiyi, managing director of Shell’s Nigeria business.  A Shell spokesperson dismissed the accusation that it ignored warnings about the pipeline before the devastating spills, which severely disrupted the lives of approximately 69,000 people living in Bodo, Nigeria. “[Shell] dismisses the suggestion that it has knowingly continued to use a pipeline that is not safe to operate,” it told the BBC.   Shell has long been accused of trying to downplay and cover up its spills in Nigeria, most notably by maintaining that much of the damage was caused by locals sabotaging its pipeline. Shell has also blamed amateur and illegal oil refiners for some of the damage.  Still, where to place the blame does not take away from the suffering of the Niger Delta region, particularly Bodo, at the hands of the two 2008 oil spills. According to a 2011 Amnesty International report, the spill severely impacted the price and availability of food, and the quality of drinking water. Immediately following the spill, villagers were bathing children in water contaminated by crude oil.

Peak Cheap Oil -- Energy is the lifeblood of any economy. But when an economy is based on an exponential debt-based money system and that is based on exponentially increasing energy supplies, the supply of that energy therefore deserves our very highest attention. But we need to be careful here because it’s a mistake to lump all types of energy together because they have very different uses in our economy and they are not interchangeable. What we’re going to examine in this chapter on Peak Cheap Oil is transportation fuels. The liquids we put in our trucks and cars and airplanes. Why? Because 95% of everything that moves from point A to point B across the globe does so based on petroleum derived liquid fuels. This makes petroleum quite special and unique. And despite vastly increasing the global spend on oil operations, despite the shale oil "miracle" so loudly touted by the press -- global production remains nearly unchanged. In just a few short years, it’s now costing us double to extract roughly the same amount of oil out of the ground. What’s clearly at work here is that we’re finding more oil, but it’s expensive. Yet total global demand for oil will climb as developing countries expand their economies and world population continues to grow. Competition for hydrocarbons will become more fierce than it has ever been. I’m soft-pedaling this to an enormous degree. Let me be blunt. If we are already at peak, as the data suggest is possible, then we are all in trouble.

Zero Rates, Resource Misallocation, and Shale Oil - Ed Harrison - The nexus of zero rates, resource misallocation, and risk on has favoured shale oil. But the drop in oil prices will call many of these projects into question precipitating a high yield energy funding crisis and a panic dash for the exits. There will be carnage and the question will be whether this carnage causes contagion into other markets. The catalyst for many market gyrations, as I predicted them in late September, is the global growth slowdown, especially in China. And the most important immediate result is a weakening oil price, which is why I want to concentrate on shale oil in the US.  Here’s the macro story as it concerns shale:

  • The Fed lowered the fed funds rate to effectively zero percent in the wake of the subprime crisis. With the financial system still in disarray, the Fed began quantitative easing and forward guidance initiatives as a way to re-animate dislocated markets.
  • Lower interest rates and forward guidance signals of continued low rates shifts private portfolio preferences toward riskier projects and projects with longer payback periods because lower risk premia and lower discount rates make these projects more attractive in relative terms to other projects.
  • Shale oil exploration and production fits the bill perfectly for the type of investment that easy money should favour: oil exploration and production is risky in general and fracking is considered even riskier. Moreover, low discount rates help because many of the shale oil companies are cash flow negative because the payback period on their investment is long. And finally, shale oil production is very capital intensive, requiring lots of debt financing because the scale of the investment cannot be financed with equity alone.
  • But shale oil is not profitable at low oil prices, creating a tension for investors. If shale oil investment is successful, a lot of oil will flood onto the market, driving down prices. But if shale oil is unsuccessful, then the oil produced will not be enough to recoup high capital investments. Clearly then, the sweet spot for this market is one in which production costs drop over time, well depletion rates drop and oil production levels remain high enough for profits but low enough not to crater the market.

Putting this all together says that the huge investment in shale oil is in part an artifact of Fed policy because of the unique investing pre-conditions low interest rates, quantitative easing and forward guidance have created.

Dollar reserves as goodwill oil-product claims --- A while back we proposed that oil prices are more interest-rate sensitive than most people appreciate. The logic goes as follows. When interest rates are low it makes more sense for producers and commodity owners to hold their wealth in commodity-form rather than in money-form — especially if speculators are prepared (via the forward curve) to compensate them for the cost of storing these commodities in terminals, tanks or even in the ground. Low interest rates thus support commodity prices because they encourage commodity owners to sell only what they need for financial liquidity purposes and little more, a fact which naturally keeps the market tight. The more generous speculators get, however — by means of the contango payments they offer to commodity producers or holders — the greater the incentive to dig up commodities for store-of-value purposes rather than consumption purposes, and to withhold that supply from the market. The inverse is true if interest rates are on the rise. During such periods it makes much more sense for commodity producers and owners to transform as much commodity stock into monetary claims and park it in the bank. But this is also the case whenever speculators decide to stop compensating the industry for holding commodities in physical form, and the costs of storage become too great. And, what factor is likely to woo speculator money away from forward commodity claims and back over to claims over real economy product? Well, we’d propose, the compensatory rate they are likely to receive from the real economy for deferring consumption until tomorrow — also known as the interest rate.

Large global benefits from the 2014 oil shock - The most significant economic shock in the global economy so far in 2014 has been the drop of more than 25 per cent in spot oil prices since the end of June. Since this shock is attributed by most energy analysts to an increase in oil supply, and not to a decline in global oil demand, this should have led to a significant decline in near-term world inflation forecasts, and to upgrades in global economic growth forecasts. The disinflationary effects are uncontroversial. Lower oil prices have obvious direct and indirect effects on consumer prices. But the boost to growth is more debatable, since lower oil prices involve a redistribution of income from oil producers to oil consumers. Why should this reallocation of resources lead to a rise in real gross domestic product? It is because of time lags. Oil consumers, which are mainly households, have seen their real incomes rise, perhaps permanently, and they are assumed to allocate part of this gain quite quickly to increased real expenditure on other goods and services. Oil producers, on the other hand, are mainly rich governments and corporates, and they may take much longer to reduce their expenditure in line with their lower real incomes. That, anyway, is what economic models tend to assume when oil prices decline for supply-related reasons. However, as Bruce Kasman of JPMorgan Chase pointed out to me in a conversation yesterday, this is not what has actually happened since the 2014 oil shock occurred. Inflation forecasts have been revised down as expected, but GDP growth projections have also been revised downwards, not upwards. What is this telling us?

Oil prices likely to fall further, says IEA: The IEA, a consultancy to 29 countries, said weak demand and the US shale gas boom meant crude’s recent fall below $80 a barrel was not over. On Friday, Brent crude, one of the major price benchmarks, traded at $78.13 a barrel, near a four-year low. “It is increasingly clear that we have begun a new chapter in the history of the oil markets,” the IEA said. “Barring any new supply problems, downward price pressures could build further in the first half of 2015.” The organisation, set up after the "oil shock" of the early 1970s to advise major oil importing countries, said that pressure was building on the Opec oil producers' group to restrict supply to bolster prices. However, there have been reports that Saudi Arabia, Opec's key member, is not yet willing to turn off the taps. Opec members are due to meet on 27 November to discuss the supply and demand issues. Most Opec members rely on oil revenues to support economic growth and spending. Also, it is likely that oil and gas explorers will become increasingly worried that falling prices will make exploration uneconomical. Brent has fallen for eight weeks in a row, its longest losing streak since 1988, according to Reuters' data.

Falling Oil Prices Strengthen Obama’s Hand Globally --President Barack Obama is traversing the world stage this week carrying something unusual for an American president: An oil weapon that he can wield to his benefit.  Recent weeks haven’t been an easy stretch for Mr. Obama, at home or on the international front, so this weapon, in the form of plunging world oil prices, represents a welcome if underappreciated development. The effect is likely to be more subtle than obvious this week, but it’s a significant change that affects the presidents’ endeavors on several key fronts. The president is spending the week in Asia, first in China for a meeting of the Asia-Pacific Economic Cooperation forum and a bilateral meeting with China’s leaders. He then travels to Myanmar, and on to Australia for an economic summit of the Group of 20 industrialized nations.  Along the way, Mr. Obama will be having talks with fellow world leaders about the problems that doubtless do the most to keep him up at night: Iranian behavior, Russian misbehavior, the threat from Islamic State militants and the overall sluggishness of the economy. On each front, low oil prices—they have dropped to about $82 a barrel from about $110 in midsummer–strengthen the president’s hand. Better yet for Mr. Obama, the perception, and to some extent the reality, is that the oil-shale boom in the U.S. has helped create the global surge in oil supplies that is driving down prices, creating a sense that the U.S. is for once in control of the energy dynamic.  To see the consequences, start with Islamic State militants. As they have gobbled up land in Syria and Iraq, Islamic State leaders increasingly have been financing their operations by smuggling out and selling crude oil stolen from Syrian refineries. But the value of that asset is plunging, and that fact, combined with Turkey’s growing willingness to clamp down on the flow of black-market Islamic State oil across its border, appears to be pinching the Islamic State’s wartime budget.

Countries Are Spending $88 Billion A Year On Finding New Fossil Fuel Reserves -- Some of the world’s largest economies are spending billions each year to find new regions to drill, frack and mine for fossil fuels, according to a new report. The report, published Tuesday by Oil Change International and British think tank Overseas Development Institute (ODI), found that G20 nations — a group of major developed and developing economies that includes the U.S., China, India and the E.U. — are spending $88 billion annually on fossil fuel exploration. That’s more than double the $37 billion spent on fossil fuel exploration — a term that includes finding new reserves of fossil fuels as well as expanding existing drilling and mining sites — by the world’s largest 20 oil and gas companies in 2013. It’s also almost double the investment that the International Energy Agency says is needed to power the world by 2030.   And, the report notes, this type of investment is unwise if the world wants to keep warming to 2°C, a target that will require leaving at least two-thirds of untapped fossil fuel reserves in the ground.   By providing subsidies for fossil-fuel exploration, the G20 countries are creating a ‘triple-lose’ scenario,” the report’s authors write. “They are directing large volumes of finance into high-carbon assets that cannot be exploited without catastrophic climate effects. They are diverting investment from economic low-carbon alternatives such as solar, wind and hydro-power. And they are undermining the prospects for an ambitious climate deal in 2015.”

The $88 Billion Fossil Fuel Bailout for Oil, Gas and Coal Exploration -- Despite repeated pledges to end subsidizing fossil fuels, governments are still spending billions doing so. Five years ago, the G20 pledged to the phase out of ‘inefficient’ fossil fuel subsidies and re-iterated the call last year in Saint Petersburg in 2013. Yet a new report by the Overseas Development Institute and Oil Change International, published on the eve of this year’s G20 Leaders’ Summit, on Nov. 15 -16 in Australia, has found that governments are still spending a whopping $88 billion every year supporting fossil fuel exploration. Amazingly, this is over double what the oil and gas companies themselves are investing. In 2013, the top 20 private oil and gas companies invested just $37 billion in exploration across the globe, less than half of that being ploughed in annually by G20 governments.  The madness of the situation is that the governments know that the majority of the oil and gas that is discovered needs to be kept in the ground if we are to avoid dangerous runaway climate change.  The worst villain is, not surprisingly, the U.S. which splashed out $5.1 billion annually in subsidies for fossil fuel exploration in 2013—ironically almost double the level in 2009 when the G20 pledged to phase out fossil fuel subsidies. Although President Obama has proposed to cut subsidies, the oil-washed Congress has failed to pass any subsidy cuts.

Here We Go Again: The Polluters and Poisoners Gear Up for the Next Congress --  Twenty years ago, the radical wing of the Republican Party announced its “Contract With America,” a set of policies and actions Rep. Newt Gingrich and his caucus pledged to accomplish if they were elected to a majority in Congress. Gingrich’s early battles ultimately ended in victory for the public and for the environmental and consumer protections he wanted to undo. Gingrich’s bills were made worse as they moved through committee and were amended in the House and Senate, finally resulting in what one senior Republican Senate staffer called “a revolution”—a system that would allow any corporation to escape enforcement through legal or procedural loopholes. Every regulation would be effectively voluntary, and the polluters and producers of unsafe products would have nothing to fear from the EPA, the Consumer Product Safety Commission, OSHA, or any other regulatory agency. The vehicle for this revolution was one of the first bills considered and passed in the House in 1995, “The Job Creation and Wage Enhancement Act.” Its goal was to subject federal regulations—regardless of statutory mandates to the contrary—to new risk assessment and cost-benefit analysis requirements and to create multiple opportunities for businesses to block federal rules and interfere with their enforcement. Big chemical and pharmaceutical manufacturers didn’t want clean water laws interfering with their profits, the meat industry wanted to prevent new rules about bacteria and contamination, and construction companies didn’t want to have to comply with new workplace safety standards. The legislation would have stopped new rules in their tracks.

Trading Oil For Coal -  The environment could again be on the agenda. As with on tax reform and trade agreements, Republicans feel there’s a chance for agreement with President Obama on the Keystone XL pipeline: John Boehner and Mitch McConnell specifically called for its construction in a Wall Street Journal op-ed yesterday. The northern leg of the pipeline, which would carry more than 800,000 barrels a day of carbon-heavy crude from Alberta’s oil sands to Nebraska (before it heads for the Gulf Coast), has been held up for years by political and environmental concerns. Because it would cross the border from Canada, the pipeline requires a permit from the State Department. The energy company TransCanada first applied for a permit in 2008; in 2012, before the elections and after Congress set a tight deadline, Obama rejected the $8 billion project. But TransCanada reworked the application and the State Department completed its environmental review. Technically, Secretary of State John Kerry will make the call as to whether the pipeline is in the “national interest,” and Obama says it’s an “independent process” that he’s going to allow to play out, but it’s hard to imagine President Obama not having the final say on an issue of such political and policy significance. Some legislators want to wrest that decision away. The House has previously voted to approve the pipeline over the president’s head. In May, Harry Reid actually offered Republicans a vote on a stand-alone Keystone bill if they passed a bipartisan energy-efficiency bill. Republicans demanded amendments on increasing liquefied natural-gas exports, Reid shut them down, and Republicans blocked the bill in another example of the procedural battles that have plagued the Senate for most of Obama’s presidency.

Depression-Level Collapse In Demand: In Historic First, Glencore Shuts Coal Mines For 3 Weeks -- In a historic move showing just how profound the collapse in global commodity demand and trade is, earlier today the Sydney Morning Herald reported that Australia's biggest coal exporter Glencore, which last year concluded its merger with miner Xstrata creating the world's fourth largest mining company and world's biggest commodity trader, will suspend its Australian coal business for three weeks "in a move never before seen in the Australian market, to avoid pumping tonnes into a heavily oversupplied market at depressed prices." Putting this shocking move in context, it is something that was avoided even during the depths of the global depression in the aftermath of Lehman's collapse, and takes place at a time when the punditry will have you believe that the US will decouple from the rest of the world and grow at 3% in the current quarter and in 2015.

BREAKING: West Virginia Coal Boss Indicted --  Don Blankenship, the former chief executive of Massey Energy, was indicted on Thursday afternoon for charges relating to the April 2010 Upper Big Branch coal mine explosion that killed 29 miners. The worst mining disaster in decades, the methane-fueled blast killed miners over a mile away. Blankenship, who retired from the company less than a year after the disaster, has previously denied wrongdoing. The indictment charges that he violated federal mine safety laws and alleges that he caused routine, willful violations of mandatory federal mine safety and health standards at Upper Big Branch during a period from Jan. 1, 2008, to April 9, 2010, according to a notice sent to the families as reported by the Charleston Gazette. The indictment further alleges that during this same period of time, Blankenship was “part of a conspiracy to impede and hinder federal mine safety officials from carrying out their duties” by providing advance warning of federal mine safety inspection activities, so their underground operations could conceal and cover up safety violations that they routinely committed. Earlier this year U.S. Attorney R. Booth Goodwin II told ABC News that his office has been methodically going “up the line, and consistently so” in assessing whether conduct by mine operators may have led to the explosion. “What we have seen is a conspiracy to violate mine safety and health laws,” Goodwin said. “And that conspiracy was very pervasive.”

Longtime Massey Energy CEO Don Blankenship indicted: Don Blankenship, the longtime chief executive officer of Massey Energy, was indicted Thursday on charges that he orchestrated the routine violation of key federal mine safety rules at the company’s Upper Big Branch Mine prior to an April 2010 explosion that killed 29 miners. A federal grand jury in Charleston charged Blankenship with conspiring to cause willful violations of ventilation requirements and coal-dust control rules — meant to prevent deadly mine blasts —during a 15-month period prior to the worst coal-mining disaster in a generation. The four-count indictment, filed in U.S. District Court, also alleges that Blankenship led a conspiracy to cover up mine safety violations and hinder federal enforcement efforts by providing advance warning of government inspections. “Blankenship knew that UBB was committing hundreds of safety-law violations every year and that he had the ability to prevent most of the violations that UBB was committing,” the indictment states. “Yet he fostered and participated in an understanding that perpetuated UBB’s practice of routine safety violations, in order to produce more coal, avoid the costs of following safety laws, and make more money.” The indictment also alleges that, after the explosion, Blankenship made false statements to the U.S. Securities and Exchange Commission and the investing public about Massey’s safety practices before the explosion. The three felonies and one misdemeanor carry a maximum combined penalty of 31 years imprisonment, U.S. Attorney Booth Goodwin said in a prepared statement. He would not comment beyond the prepared statement.

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