this week we have some definitive information on where and how many Bakken bomb trains are moving through Ohio daily, and by extension through Minnesota, Wisconsin, Illinois, Indiana, and Pennsylvania or West Virginia on their way to East Coast refineries...first, in an analysis of Ohio Emergency Response Commission data previously kept from the public, the Columbus Dispatch has determined that 1.4 million Ohioans live within the half mile blast zone of rail tracks that carry explosive Bakken crude from North Dakota, mostly to refineries on the east coast, where much of it is refined for export...the total Ohio population in the 1/2 mile blast zone includes 15% of the residents of Columbus's Franklin County, and even a greater percentage of those in Cleveland and the other major cites connected by rail along the lake Erie shore...as you'll recall, it was a trainload of this same volatile and explosive Bakken crude that was responsible for the deaths of 47 people in a 2013 explosion in Lac-Megantic, Quebec, and a train of the same crude that that created the monstrous "seen on TV" explosion and fireball in West Virginia 6 weeks ago...the Dispatch notes that the CSX train that exploded in West Virginia at that time had passed through Columbus only hours earlier...damn, we might have lost Kasich...
the graphic below, taken from the Dispatch article, shows the body count of Ohioans living in the blast zone of Bakken bomb trains, and a graphic of the counties and major cities affected by rails carrying them..obviously, the trains pass through the middle of most of the cities in the populous northern tier, for the simple reason that the rail road tracks were built to run to and through the major cities..
although the Dispatch article did not say how many trainloads of oil travel through Ohio each day, we did know from an Akron Beacon Journal investigation earlier this year that up to 49 trainloads "filled with highly volatile Bakken crude oil" were passing through Northern Ohio each week; typically, these would be unit trains of around 100 tank cars each, destined for refineries in Philadelphia and New Jersey...that Beacon Journal report coincided with an earlier Dispatch article that reported that between 45 million to 137 million gallons of Bakken crude were being moved through Ohio each week from North Dakota oil fields, of which 2 million to 25 million a week were passing through the Columbus area...
two days after the Dispatch article appeared, the U.S. Energy Information Administration provided, for the first time ever, a complete data base on movements of crude oil by rail, which will now continue as a monthly report from this information branch of the Energy Department, to add to their similar reports on shipments of oil by pipeline, tanker, and barge....like all data from the EIA, the information on oil train movements is broken down by regional PADDs, which is the acronym for the 5 US Petroleum Administration for Defense Districts, but the usage is so common that few who refer to the different PADDs likely dont even know that...also, in tracking movement between these regions, they exclude short-distance movements between nearby destinations within a region from their data...that said, they show crude by rail shipments as low as 55,000 barrels a day in 2010, rising to 124,000 barrels a day in 2011, 440,000 barrels a day in 2012, 816,000 barrels a day in 2013, and finally 1,000,000 barrels a day in 2014...the graphic below is one of 5 such graphics, one for each year, included under tabs on this EIA page, and shows the relative volume of crude that moved by rail during 2014...
in the graphic above, each of the 5 PADDs is numbered and color coded, and the rail shipments from a given PADD are colored similarly, with the quantity of oil shipped by rail from each PADD in barrels per day represented by the size of the round dot and the thickness of the arrows, with the scale for both shown in the lower right corner..here we can see that virtually all of the shipments by rail originate in one of the areas that did not previously have pipeline infrastructure, as despite that the several fields in Texas far outproduce other US fields, little rail transport originates there....furthermore, what is quite obvious here is that the largest amount of oil being shipped by rail originates in the Bakken in North Dakota and nearby Montana and is shipped by rail through several Midwest states to the east coast...
on the current data page for January crude oil by train, we find that 1,045,000 barrels of oil per day were shipped by rail in the US in January, with 130,000 bbls/day of that originating in Canada, and 914 bbls / day originating in domestic fields...we'll include a picture of the table of those inter-PADD shipments for January below...in this table, the horizontal lines represent the regions that oil by train is being shipped from, while the columns indicate the PADD that oil by train is being shipped to:
here we can see that just as in 2014, most of the oil shipped by rail in January originated in PADD 2, the Bakken region, as 704,000 barrels a day were shipped from there...the lion's share of that, 437,000 barrels per day, was being railroaded to the east coast, meaning it passed through most of the cities on the south shores of the Great Lakes...other major sources of the rest of the oil by rail traffic originated from the Niobrara crude of Colorado and the Rockies front range from PADD 4, or from Canada, and some from both of those sources also was destined for the east coast...considering that crude shipments from the Rocky Mountain states and Alberta to the east coast were probably also shipped through Ohio, it appears that up to 523,000 barrels per day, or more than half of the crude shipped by rail in the US in January, likely passed through Ohio on its way to its final destination...
while this information from the energy department tells us that we saw trains carrying 437,000 barrels per day of Bakken crude through our region, that's not a number that's easy to envision...however, since we know that a DOT-111 rail tank car has a capacity of 30,110 gallons of crude, we should be able to figure out how many carloads are likely to pass through our area each day...since there are 42 gallons in each barrel, that means a single rail car can carry a little less than 715 barrels...that means that to transport 437,000 barrels a day, a minimum of 612 tanks cars would be necessary daily...on a weekly basis, that would be 4284 oil filled tank cars, or 43 unit trains of 100 cars each weekly, and if some trains carry less than 100 tank cars, that's not too far off of the Beacon Journal's earlier estimate of 49 trainloads of Bakken crude Ohio sees each week...
.......
US oil and gas drillers shut down 20 rigs in the week just ended, the least number of drilling rigs idled in any week this year...we managed to rid ourselves of 11 gas rigs, leaving 222, and 11 oil rigs, leaving 802, while 2 rigs classified as miscellaneous were added, of which there are now 4...6 of the rigs shut down had been operating in the Bakken, so as of Thursday 91 rigs remained there; another 5 were idled in the Permian Basin, leaving 285...both Texas and North Dakota lost 6 rigs, while 2 rigs began drilling in California, where there are now 15 rigs active...we got rid of 13 horizontal frackers and 8 vertical rigs, while an additional directional rig was set up, leaving us with 799 horizontal rigs, 136 vertical rigs, and 93 directional rigs at the end of the week...that compares to the 1224 horizontal rigs, 393 vertical rigs and 201 directional rigs that were in operation the same week a year ago, for a total decrease of 790 rigs in the year since then....Canada also made more progress, shutting down another 20 rigs, leaving them with 100, down from 300 just four weeks ago...Canadians are now running 20 oil rigs, up from 18 last week, and 80 gas rigs, down from last week's 102...
it appears that the number of drilling rigs shut down over the past four months may be finally affecting the output of oil...in the most recent EIA release, we've learned that in the week ending March 27, our oil production slipped to 9,386,000 barrels a day, which was down from the 9,422,000 barrels per day average produced in the 3rd week of March...that's still 14.6% higher than the 8,192,000 barrels per day we produced during the same week of March a year ago, and since we also had a small drop in output during the 3rd week in January, can't be seen as a definite turn unless the decline continues in the coming weeks...even with our production down, though, our inventories of crude oil in storage reached yet another record of 466.7 million barrels in the week of the 27th, increasing by 4.8 million barrels from the prior week, and 22.7% more than the 380.1 million barrels of oil stored commercially in the US in the 4th week of March a year ago, and more than 25% over our 5 year average...the weekly Petroleum Status Report (62 pp pdf) also showed that US crude oil imports averaged 7.3 million barrels per day last week, down by 44,000 barrels a day from our imports in the 3rd week of March, and that in the four weeks ending March 27th, US crude oil imports averaged over 7.3 million barrels per day, just 0.1% lower than the same 4 week period last year...
_______________________________________________________________________
Ohio House bill would ease fracking in state parks - Gov. John Kasich has used the back door to keep fracking out of Ohio state parks and forests. Now, the legislature is trying a side door to fast-track fracking on public lands. A measure prioritized by House Republicans, who dominate the chamber, got a third hearing yesterday on its way to a likely committee vote next week. The legislature approved fracking in Ohio’s parks in 2011, and Kasich signed the bill. Top officials in his administration prepared a secret marketing plan in the final months of 2012 to sell fracking as a way to keep Ohioans from paying park entrance fees. Under the 2011 law, potential drillers must get permission from a newly created Oil and Gas Commission, complete an environmental study, determine the potential impact on visitors, seek public input and meet other requirements. But Kasich had a change of heart on allowing drilling on public lands and in effect imposed a unilateral moratorium by not appointing members to the commission — meaning that nobody could get an OK to drill in parks. However, under House Bill 8, GOP legislators would bypass the commission, wiping out the fracking prerequisites in the 4-year-old law — and ending the governor’s unofficial moratorium.
No fracking on public land - Toledo Blade editorial: During his first term, Gov. John Kasich wisely halted a plan that would have authorized hydraulic fracturing in state parks and forests. A reckless bill approved by the Ohio House last week would circumvent Mr. Kasich’s moratorium and open up state forests to the controversial method of oil and natural-gas drilling, with almost no oversight. The Senate should reject the bill; if it reaches the governor’s desk, it merits a veto. House lawmakers removed language from their measure that would have permitted fracking in state parks. But the bill would make it easier to frack on other public lands, including state forests and wildlife areas. It would circumvent the mandatory public input, visitor-impact statement, environmental assessments, and other safeguards that state fracking law and regulation otherwise require. Advocates take advantage of the lack of scientific consensus on fracking to suggest that claims about its dangers are exaggerated. In fact, there is broad agreement about the risks of fracking, even though scientists may not agree on appropriate solutions. Mounting evidence links fracking to a sharp increase in earthquakes in Ohio and across the country. A study by the Seismological Society of America concluded that fracking was responsible for dozens of small earthquakes near Youngstown in recent years.
Oil and gas industry groups voice opposition to Ohio's proposed tax increase - Industry representatives voiced opposition March 3 to Gov. John Kasich's proposed tax increase on oil and gas produced via horizontal hydraulic fracturing. The Ohio Oil and Gas Association, the American Petroleum Institute and others reiterated what they've been saying for several years, since the governor initially proposed the severance tax change -- that is, a tax increase would drive away exploration and investment and any resulting economic boost in eastern Ohio's emerging shale oilfields. Shawn Bennett, executive vice president of the Ohio Oil and Gas Association, told the Ohio House's Ways and Means Committee that dropping oil prices have prompted a retreat in investment in the state. He offered a list of companies who have pulled out of Ohio, waiting for commodity prices to rebound. "In December of 2014, Ohio had a record 59 rigs operating in the Utica," Bennett said in testimony submitted to lawmakers. "Today, a third of those rigs have simply left the state...." He added, "The legislature should not add additional tax burdens on an already-struggling industry. The proposed severance tax before this legislature will dramatically decrease the chance of success in this effort and only serves as a deterrent to future recovery, growth and stability in Ohio's oil and gas industry."
Ohio and other Appalachian states slammed by environmentalists for lack of fracking oversight - In terms of managing its waste, much of the oil and gas industry is exempt from federal oversight, in part because of perceived adequate regulation at the state level. But a new report from environmentalists opposed to fracking for shale gas and oil contends that Ohio and other Appalachian states are dropping the ball by failing to manage oil and gas waste or to regulate it as they would other hazardous waste. The group claims that states aren’t tracking the drilling waste generated within their borders, or properly monitoring its disposal the way regulators once hoped. In Ohio, the report cited the state’s Department of Natural Resources for failing to put forward regulations for waste storage and disposal, as directed by the state Legislature in 2013. According to the report, “critical regulations have still not been put forward for public review and adoption. As a result, operators and disposal facilities have wide discretion to decide whether waste is contaminated and how to dispose of it.” Neither ODNR nor the Ohio Environmental Protection Agency track volumes, origins or destinations of solid waste, such as drill cuttings, Earthworks reported. The regulations that have been proposed are inadequate, according to Earthworks, which is generally anti-fracking. “Draft regulations do not include standards or limits related to waste storage and treatment methods, volumes, or chemical parameters, nor specify any practices (e.g., reserve pit burial or brine evaporation) that would be prohibited,” the report’s section on Ohio stated. It also stated that there is no public information on the number and location of pits and impoundments used to hold drilling waste, and also no specific requirements for the construction of pits beyond the vague assertion that operators use “sound engineering design and construction, and commonly accepted industry practices.”
Increase in fracking trucks has drawbacks - Columbus Dispatch — The warning signs and convoys of semi trucks have become part of the landscape in eastern Ohio’s shale country, where a drilling surge has brought more big rigs to rural roads. Oil and gas truck traffic ahead. The orange placards and the trucks they portend might be the clearest sign yet of the dual role locals say the region’s oil and gas industry has assumed as both economic engine and potential danger for drivers sharing winding two-lane roads with 18-wheelers. Those trucks haul stone, heavy equipment used to build well pads, drilling rigs and other materials. And tanker trucks are transporting water needed in the hydraulic fracturing process and the fracking wastewater that flows back up from the wells. “It’s been an economic boon for our county,” said Dale Norris, a Harrison County commissioner. “It’s got its good and its bad.” Among the bad: a recent uptick in the number of crashes involving semi trucks in eastern Ohio counties and faster wear-and-tear onset because of the heavier traffic on roads. State and local officials say the drilling companies have done their part to help. They host safety meetings for trucking companies and meet state requirements for building and maintaining roads that can handle trucks. But the Ohio Department of Transportation is spending more on road repairs in eastern Ohio, and the State Highway Patrol is trying to figure out how to contend with the increase in semi-truck crashes.McCutcheon said that as pipelines are built to transport oil and natural gas from Ohio, even more trucks probably will be transporting heavy machinery and materials on the rural roads. Natural gas is transported from the wells via pipeline, but any oil or condensate is transported by truck. Some routes near processing facilities already have seen as many as 500 additional trucks a day, according to ODOT. For example, an additional 100 to 500 trucks a day were seen on Rt. 43 in Carroll County in 2013, the latest data available, compared with three years earlier.
Bakken oil trains roll across Columbus - Almost 1.4 million Ohioans live within a half-mile of railroad lines where some of the most-volatile crude oil in North America rolls by each week, a Dispatch analysis has found. Those people, about 12 percent of the state’s population, are at risk of being forced from their homes should a train hauling crude oil from the Bakken shale fields of North Dakota run off the tracks. About 15 percent of Franklin County’s residents live within that zone, recommended by the U.S. Department of Transportation as the likely evacuation area during a crude-oil train derailment.. Most trains that transport crude oil stay on their tracks, but derailments can be catastrophic. A Bakken train that derailed in 2013 burst into flames, killing 47 people and destroying most of downtown Lac-Megantic, Quebec. Trains have wrecked in Ontario, as well as in Alabama, Illinois, Minnesota, North Dakota, Pennsylvania and Virginia, sending trains up in flames, prompting mass evacuations and in some cases, obliterating homes. A Bakken train derailed in West Virginia last month, forcing hundreds of people to evacuate their homes and spilling oil into the Kanawha River. That train, run by CSX, almost certainly passed through Columbus. Three CSX tracks that carry crude oil from North Dakota to the East Coast converge in Columbus after passing through Worthington and running between Dublin and Hilliard. Those tracks then head south through Ohio and into West Virginia. Ohio, with its more than 5,300 miles of tracks, is a key junction between the Bakken region and East Coast oil refineries. Rail lines that carry Bakken crude travel through or near Akron, Cleveland and Toledo as well as through Columbus.
Nearly 437,000 barrels of volatile Bakken Shale crude oil per day may pass through Ohio on trains - Ohioans have known for some time that numerous trains carrying highly volatile Bakken Shale crude oil pass through their neighborhoods each day en route to East Coast refineries. What they didn’t know, until Tuesday, was a number: as many as 437,000 barrels per day. That volume figure surfaced Tuesday when the federal government for the first time released monthly data on crude oil shipments by rail. Such shipments have raised safety concerns following fatal accidents and derailments. In January, the region that includes the Midwest and North Dakota’s Bakken Shale was by far the largest shipper of crude by rail, averaging 732,000 42-gallon barrels per day. The East Coast region was the largest recipient, taking in 437,000 barrels a day by rail from the Midwest in January. That’s enough Bakken crude to fill 612 rail tank cars every day. Much of that volume passed through Ohio on rail lines en route to the East Coast. Activist Teresa Mills of Columbus called the figure “disturbing.” “Ohioans need to know that that much volatile Bakken crude is passing through our state on ‘bomb’ trains that run through some of our major cities,” she said. Citing a recent report in the Columbus Dispatch, she noted that about 1.4 million people live within a half-mile of tracks that carry crude oil trains across the state in northern and central Ohio.
Recent derailments have raised questions of safety, method of transporting oil - President Obama’s veto of the proposed Keystone XL pipeline has major ramifications for North America’s energy future. But it also has intensified the debate about whether it is safer to transport crude oil via pipelines or railroad tank cars. Though statistics show pipelines are safer, more efficient at moving product, and, thus, release fewer climate-altering greenhouse gases than an equivalent amount of crude shipped along a more energy-intensive rail system, pros and cons of each mode of transportation are being amplified by lobbyists — especially in the wake of several recent, catastrophic oil-train derailments. In 2013, America moved 8.3 billion barrels (348.6 billion gallons) of crude oil via pipeline — nearly 29 times the 291 million barrels (12.2 billion gallons) moved by rail, according to figures from the Association of Oil Pipelines and the Association of American Railroads. A Washington Post analysis showed pipelines average about 22 accidents per billion barrels of oil transported in recent years, while the rate over rail is 10 to 20 times higher. “A pipeline, whether you’re moving a liquid or natural gas, is always going to be more efficient than rail or for that matter, anything else. It’s the safest way,” said Jimmy Stewart, president of the Ohio Gas Association. He said he thinks of America’s 2.6 million miles of pipelines — a buried web people drive and walk across daily — as arteries supporting the nation’s economic heartbeat. “It amazes me the rhetoric that comes out of some peoples’ mouths about pipelines when they walk and drive over them every day,” Mr. Stewart said.
Utica well activity in Ohio -- Activity in Ohio’s Utica Shale region hasn’t changed much besides a slight increase in the number of wells drilled and in production. However, changes for a major company in the Marcellus and Utica Shale formations has once again cut costs.Chesapeake Energy Corp. has cut its budget once again, this time by $500 million, shrinking it from $4.5 billion to $4 billion. Months after the previously announced budget cuts, the company is also set to decrease its rig count, except for in the Utica. Chesapeake plans on keeping its rig count in Ohio’s shale formation the same, regardless of its cutbacks. The other formations that company is operating in, like the Eagle Ford Shale in Texas, will notice a decrease in rigs. The reasoning for the company keeping its rigs the same in the Utica is due to its improved well stimulation. After running tests, Chesapeake has been able to adjust cluster spacing within the wellbore. Even though it is complicated, by shrinking the space between the different stages of fracking, the company has increased the flow of gas and natural gas liquids, along with increased well performance. Chesapeake’s Executive Officer Doug Lawler further explained the company’s decision to cut its The following information is provided by the Ohio Department of Natural Resources and is through the week ending on March 28th. DRILLED 334 -- DRILLING 246 -- PERMITTED 454 -- PRODUCING 834 -- TOTAL 1,868
Marcellus horizontal well activity in Ohio - Activity in the Marcellus Shale located in Ohio hasn’t changed compared to last week, with a total of 44 wells are still hanging out. However, a specific pipeline project in Pennsylvania that is causing some issues among people that live along its potential route has finally been submitted to federal regulators. Williams’ subsidiary Transco has officially submitted its formal application for its Atlantic Sunrise Pipeline to the Federal Energy Regulatory Commission (FERC). The interstate pipeline will transport Marcellus Shale gas from northeastern Pennsylvania to the markets on the Atlantic, including the Cove Point Terminal in Chesapeake Bay. If approved, the current route of the pipeline will include the following ten counties: Columbia, Lancaster, Lebanon, Luzerne, Northumberland, Schuylkill, Susquehanna, Wyoming, Clinton and Lycoming. Like the PennEast pipeline, several people—mainly landowners—that live on the potential route of the Atlantic Sunrise are opposing the project. They have voiced concerns about safety, environmental degradation and property values. In response to the public’s concerns, Williams made the following comment in its filing: The construction and operation of the proposed facilities will not have a significant impact on human health or the environment … The public benefits of the project are far more substantial than the potential adverse effects.To meet its in-service date of July 2017, Williams has asked the FERC to deliver its response to the filing by August 2016. The following information is provided by the Ohio Department of Natural Resources and is through the week ending on March 28th. PERMITTED: 15 -- DRILLED: 15 -- PRODUCING: 13 -- INACTIVE: 1 -- TOTAL: 44
Pennsylvania shale drillers to release monthly reports on gas production - Pennsylvania’s unconventional natural gas producers pulled 390 billion cubic feet of gas from the Marcellus Shale and other resource-rich rock layers in January, according to the first monthly production reports the companies filed with the Department of Environmental Protection. The numbers released by the state on Wednesday are the first of what will be regular reports of monthly unconventional gas production after Pennsylvania passed a law last year to increase the frequency of reporting from twice-yearly to monthly to better correspond with the details reported on leaseholders’ royalty checks. Shale gas production during the month of January averaged 12.6 billion cubic feet per day, or Bcf/d, an increase over the daily average during the second half of 2014, the last reporting period, when the state’s unconventional producers averaged 11.5 Bcf/d. The state does not guarantee the accuracy of the production data, which are self-reported by operators, but the January numbers appear to be in line with figures released by the U.S. Energy Information Administration, which reported that 14.4 Bcf/d was produced in January from the entire Marcellus Shale region, including West Virginia. A DEP spokeswoman said 80 percent of operators reported their January production by the March 31 deadline and the companies that submitted their reports on time represent 99.5 percent of unconventional natural gas wells in Pennsylvania. Pennsylvania’s top producing counties during the month — Susquehanna, Bradford and Lycoming — were in the northeast, followed by Washington and Greene counties in the southwest. Nearly one-third of the state’s gas production in January came from the nine counties in southwestern Pennsylvania, which also produced 95 percent of the state’s natural gas liquids, which includes ethane, oil and condensate that also are recovered from some shale formations.
Judge denies motion to dismiss racketeering suit against Chesapeake Energy -- A federal judge has denied Chesapeake Energy Corp.’s motion to dismiss a class action lawsuit that alleges the company conspired with subsidiaries it formed to overcharge leaseholders by artificially inflating the cost to gather natural gas extracted from Marcellus Shale drilling. U.S. District Judge Malachy Mannion on Tuesday ruled the Suessenbach Family Limited Partnership had presented sufficient evidence at this state of the litigation to proceed with its lawsuit against Chesapeake and its subsidiary, Access Midstream Partners. The lawsuit, filed in June 2014 by attorney Robert Schaub of Wilkes-Barre, alleges Chesapeake formed Access Midstream in August 2010 to gather and transport natural gas from its drilling operations. The companies then conspired to have Access Midstream charge Chesapeake fees far above industry standards, which were passed on to leaseholders. Access Midstream then rebated a portion of the inflated fees to Chesapeake. The suit sought damages on several counts, including unjust enrichment, conversion and civil violations of the of the Racketeer Influence and Corrupt Organizations Act. The racketeering count was based on allegations the companies’ actions constituted an ongoing fraud perpetrated against leaseholders. Chesapeake and Access Midstream sought to dismiss the racketeering case and other counts, but Judge Mannion denied the motion. The judge did dismiss one count of honest services fraud, finding that count could not stand because officials with the companies had no fiduciary duty to shareholders. The Suessenbach case is among at least three class action lawsuits filed in Pennsylvania that allege racketeering violations. Other similar suits were filed by the A&B Campbell Family LLC Trust in and James L. Brown, both of Wyalusing. Those cases are pending.
Before Fracking Begins, Air and Water Tests Still a Rare Precaution -- Frank Varano's land near Williamsport, Pa., abuts property that has been leased for gas exploration––and he's certain it will be fracked. What is less certain is how that fracking could affect the air he breathes and the water he drinks. That's why he welcomed the opportunity to have two Columbia University scientists test the air inside his house and the water in his well before fracking gets started late this year. "I feel better having someone independent more than just having the industry tell me what's happening," Varano said. "I want to double-check whatever the industry tells me." Last year an air monitor was set up inside his Lycoming County house, and water samples were taken from his well in advance of the drilling and fracking planned for the 10-acre site that sits 500 feet from his place. Varano is one of 15 residents in Lycoming and Sullivan counties to allow geochemists Beizhan Yan and Steven Chillrud of Columbia's Earth Institute to test the air and water on their land before fracking proceeds. The two scientists want to establish a baseline of the quality of air and water and then continue monitoring as the operation progresses from drilling and fracking to functioning wells. It's the best way to understand the risks people face when fracking––hydraulic fracturing––starts to encroach on their homes, the two scientists said. "The data will provide an objective viewpoint to drive a more rational discussion,"
Growing up in a community ravaged by fracking: why I decided to sit in — Growing up in rural Pennsylvania, I spent my childhood wandering through the countryside. The woods and mountains were my playground, the rivers and creeks my pools. My childhood memories were built in a land that seemed to possess a certain enduring purity, a ceaseless beauty. Then I grew up. And I learned that the mountains where I spent my youth had the potential to serve a purpose beyond fueling the imagination of a little girl—they were able to fuel something much more destructive. My home lies on one of the largest deposits of Marcellus Shale in the United States. And as I grew up, the fracking industry moved in. As profit seeking, highly unregulated private companies flooded my home to indiscriminately extract natural gas from the foundation of my childhood, the trails and mountain paths that once welcomed me with open arms were replaced by caution tape and locked gates. Natural gas is a misnomer. Hydraulic fracturing is a process of drilling during which vast quantities of water, sand and over 40,000 gallons of 600 different chemicals are pumped thousands of feet into the earth to fracture ancient beds of shale, releasing gas from the rock. There’s nothing natural about it.
Pipelines: The new battleground over fracking -- Forget the battles over the Keystone XL. Pipeline wars are now raging in Pennsylvania, where production is high and pipeline capacity is low. Marcellus Shale gas has the potential to alter the landscape of the global energy market. But right now a shortage of pipelines to get gas from the gas fields to consumers has energy companies eager to dig new trenches. And activists opposed to more drilling see pipeline proposals as the new battleground over fracking. Pennsylvania’s pipeline building boom could expand the nations’ and perhaps the world’s, supply of natural gas. And this boom includes an estimated 4,600 miles of new interstate pipes, tunneling under Pennsylvania’s farms, wetlands, waterways, and backyards. That’s on top of 6800 miles of existing interstate natural gas pipes, according to the Energy Information Administration. Drillers eager to reach new markets are frustrated right now, because there’s just not enough room in the current pipeline system to transport their gas beyond regional markets. “That gas languishes and it builds up and now that price will drop,” said Rob Boulware, a spokesman for Seneca Resources. Today, Marcellus Shale gas sold at less than $2/MMBtu, which is about a dollar lower than gas sold in other parts of the country.
Pipeline Company Sues 100 West Virginians To Get Access To Their Land -- A pipeline company is suing more than 100 landowners in West Virginia in an attempt to get access to their land, claiming that its proposed pipeline has the right of eminent domain. Mountain Valley Pipeline LLC filed a lawsuit in U.S. District Court last week to force more than 100 property owners and three corporations in 10 West Virginia counties to open their land to surveying for the Mountain Valley Pipeline. The proposed pipeline, if approved, would carry natural gas about 300 miles from northwestern West Virginia to southern Virginia. Since it’s an interstate pipeline, the approval lies with the Federal Energy Regulatory Commission (FERC). In the suit, Mountain Valley Pipeline LLC — which is a joint venture of multiple energy companies including NextEra U.S. Gas Assets and EQT Midstream Partners — states that “it is necessary to enter the respondents’ properties to survey (in order to obtain) necessary rights-of-way, obtain a FERC certificate and construct the pipeline.” The pipeline company says that it contacted the residents being sued to try to get permission to survey their land, but all of them “failed or refused to permit” the company from entering their properties. Mountain Valley Pipeline hasn’t yet submitted a formal application to FERC to build the pipeline — it’s planning to do so in October. But, according to West Virginia Public Broadcasting, the company can’t ask the courts to use eminent domain until it gets a certificate to proceed with the project from FERC.
Fracking breaches ‘hidden from public’ - FT.com: Oil and gas companies in 33 US states can avoid heightened public scrutiny because data about violations of safety and pollution rules are effectively hidden from residents, according to an environmental group’s investigation. The Natural Resources Defense Council, which probed a patchwork of state oil and gas regulations, warned that the lack of disclosure left citizens vulnerable as the shale boom brings production closer to residential areas. Over the past six years the shale revolution unleashed by fracking and horizontal drilling has developed so quickly that many state and federal regulators have been left standing. Only now are they beginning to catch up by introducing new safeguards, but not all public officials deem them necessary. Of 36 states with active oil and gas development, the NRDC and a watchdog called the FracTracker Alliance found that only three make data on violations easily accessible to the public — Colorado, Pennsylvania and West Virginia. From 2009 to 2013 in Pennsylvania alone, the NRDC found that 68 large companies were responsible for 3,978 violations of safety and pollution rules. In 33 states there is little or no public information on well site issues monitored by regulators such as oil spills, drinking water contamination, air pollution and the strength of well casings, they found. Amy Mall, senior policy analyst at NRDC, said: “It’s extremely difficult for members of the public to get information on the extent to which any particular company is violating the law.
It's Almost Impossible To Find Data On Oil And Gas Spills In Most States: -- A new report from the environmental group Natural Resources Defense Council has analyzed the data on spills and other violations at oil and gas wells across the country. But perhaps the most interesting aspect of the report is how little data the group was able to turn up. Based on NRDC's evaluation of dozens of state databases, only three states -- West Virginia, Pennsylvania and Colorado -- have easily accessible, publicly available data on spills and other violations. That's three states out of 36 that have active oil and gas development. "We looked at 36 states, and there are only three states where it would be easy for a member of the public to sit down at their computer and get some information about a company's compliance record," said report co-author Amy Mall, a senior policy analyst at NRDC. There are other states where citizens can file requests for data, but these three are the only ones where the information proved relatively easy to access, the group said. Even among these three states, it turned out there was some inconsistency in the types of data available. Colorado's database isn't searchable, nor does it include descriptions of any violations. Pennsylvania and West Virginia both organized their violation data in ways that NRDC called "overly vague." West Virginia's database for spills, for example, lists the names of affected streams, but doesn't describe the extent of any potential damage. Colorado, meanwhile, lists how far each incident occurred from drinking-water sources and notes whether groundwater or surface water was affected, but it doesn't name any of the bodies of water in question. The laws about what constitutes a violation also differ for each state.
Report identifies Top 10 oil, gas companies for spills, violations - Drilling - Ohio: – Only three out the 36 states with active oil and gas operations make information about companies’ spills and legal violations easily available to the public, according to a report by the Natural Resources Defense Council and FracTracker Alliance. “People deserve to know what’s happening in their own backyards, but too often homeowners aren’t even informed if there’s a threat to their health,” said Amy Mall, report co-author and senior policy analyst at NRDC. “Our representatives have a responsibility to protect the people who elect them, not help keep a dangerous industry shrouded in secrecy. States are falling down on their responsibility to be a watchdog for the people who live there.” Fracking’s Most Wanted: Lifting the Veil on Oil and Gas Company Spills and Violations is an investigation into whether information about oil and gas company violations is publicly available nationwide, as well as the accessibility and reliability of the information that does exist. The groups discovered that only Colorado, Pennsylvania and West Virginia post accessible public data about companies’ violations. Even that information is often incomplete, misleading, and/or difficult to interpret. The data that is available in each of these three states reveals significant violations—in number and severity. Incidents include a wide range of dangerous infractions like spills, drinking water contamination, illegal air pollution, improper construction or maintenance of waste pits, failure to conduct safety tests, improper well casing, and nonworking blowout preventers. The report shows that too often state regulators don’t inform landowners or their neighbors when violations occur, and allow companies to continue operating even after repeat violations.
Frackers Average 2.5 Frackastrophes a Day in 3 States -- Assuming they get caught 10% of the time, that means about 25 goofs – spills, blow outs, leaks, etc. a day. Oil and gas drillers ran afoul of regulators on average 2.5 times a day in three energy-intensive states for mistakes such as wastewater spills, well leaks and pipeline ruptures during the boom in hydraulic fracturing. Online records in West Virginia, Pennsylvania and Colorado showed regulators issued 4,600 citations from 2008 to 2013, the Natural Resources Defense Council said Thursday in a report. The report excluded violations in 33 other states with drilling because such records aren’t available on the Internet. “It’s extremely difficult for the public to get this kind of information,” said Amy Mall, an author of the report for the New York-based environmental advocate. “The companies are violating the law too often, and we need policy solutions to increase transparency and to change the consequences for not complying” with the rules, she said. Hydraulic fracturing has sparked a producing boom in long-bypassed energy states such as Pennsylvania, site of the first U.S. oil well. The technique lets producers break apart the underground shale formations and free trapped oil or gas. Each job can entail millions of gallons of water with sand and chemicals. The industry says the practice is safe, and fracking itself hasn’t caused chemical contamination of water supplies.
Frackers near you could be breaking the rules — and you’d probably never know -- One 2013 analysis estimated than at least 15.3 million Americans have a gas well within a mile of their home. So you might think that data on the performance records of oil and gas companies — how often they have spills, or exceed air pollution standards, etc. — would be readily available to locals who have an immediate stake in knowing about what’s going on in their backyard. Not so, according to a new study from the Natural Resources Defense Council and the FracTracker Alliance, a nonprofit that collects data on the gas industry. Thirty-six U.S. states have active oil and gas operations. But according to the report, just three of these states have readily accessible databases that the public can use to see which drilling companies have been cited for violating environmental rules or other standards. What’s more, the records that do exist paint a disturbing picture. “There are two main issues,” said NRDC senior analyst Amy Mall. “One is that this information is extremely hard for the public to get. The second is that they’re violating the law a lot.” The report points out that in Ohio and Arkansas, for example, violations are not published in an online database. Texas and North Dakota, meanwhile, charge citizens for access to violation data.
Why States Fail to Regulate Frack Waste -- It might seem illogical, but in 1988 the U.S. Environmental Protection Agency (EPA) put a loophole in the Resource Conservation and Recovery Act (RCRA) which regulates hazardous and solid waste, exempting the waste from oil and gas exploration, development and production (E &P) from oversight. While it conceded that such wastes might indeed be hazardous, it said that state regulations were adequate. That was then, and this is now. The fracking boom has brought oil and gas operations into states and communities that never dealt with them before. Elected officials in those states are often beholden to those oil and gas interests, especially as the amount of money flowing into elections has multiplied exponentially. Basically, the fox is guarding the henhouse. A new study, Wasting Away: Four states’ failure to manage oil and gas waste in the Marcellus and Utica Shale, conducted by Earthworks, explore just how inadequate state oversight of drilling operations is today. It specifically looks at four states that sit on top of the lucrative Marcellus and Utica shale deposits—New York, Ohio, Pennsylvania and West Virginia—to discover exactly how well they are doing in overseeing the identification and handling of the potentially hazardous waste materials left behind after the shale has been fracked. Not very well, it found. “Many of the questions asked about oil and gas field waste decades ago persist, including what it contains and how it is, and should be, treated and disposed of,” the report says. “Also debated is whether states have the ability and resources to adequately protect water, soil, and air quality in the process. Many policymakers and advocates have started to ask: as drilling continues, where is all the waste going and what happens as a result? However, these efforts by states, both current and proposed, are lacking.”
How To Frack a Fish - Frack a well near a stream. Fish don’t like methane in the water. They prefer oxygen. Just funny that way. A new stream-based monitoring system recently discovered high levels of methane in a Pennsylvania stream near the site of a reported Marcellus shale gas well leak, according to researchers at Penn State and the U.S. Geological Survey. The system could be a valuable screening tool to assess the environmental impact of extracting natural gas using fracking. Multiple samples from the stream, Sugar Run in Lycoming County, showed a groundwater inflow of thermogenic methane, consistent with what would be found in shale gas, the researchers report in a recent issue of Environmental Science and Technology. Victor Heilweil, research hydrologist, Utah Water Science Center, USGS, was lead author on the paper. “I found it startling that our USGS and Penn State team did a reconnaissance of 15 streams and discovered one instance of natural gas degassing into a stream that may very well be explained by a nearby leaking shale gas well,” said Susan Brantley, distinguished professor of geosciences and director of the Earth and Environmental Systems Institute at Penn State. After testing Sugar Run and finding high methane levels, researchers learned that several nearby domestic water supplies were reportedly contaminated by a Marcellus gas well that had a defective casing or cement, according to the researchers.
DEP schedules public hearing for an ethane cracker plant -- The state Department of Environmental Protection (DEP) has scheduled a public hearing for Royal Dutch Shell’s potential ethane cracker plant.The DEP has scheduled the hearing to address the issue of whether or not to issue an air quality permit for the proposed Beaver County cracker plant.. The plant will convert ethane into ethylene, and then process the ethylene into polyethylene. According to Shell’s permit application, the plant would have the capability of producing 1.6 million metric tons of polyethylene per year. The pollution from the plant would be caused by seven ethane cracking furnaces, flares and three natural gas fired turbines. Being granted the permit is a large piece of the puzzle for Shell as it continues to evaluate the proposed plant. The public hearing will be on May 5th, from 6 p.m. to 8 p.m. at Central Valley High School in Monaca, Pennsylvania. Shell Chemical originally announced plans to build an ethane cracker back in July of 2011. On March 15, 2012, the company shared that the plant would be built in Pennsylvania and that Beaver County could possibly be the location of the plant.
Court Rules: New York Frack Leases Expired Despite Moratorium - The New York moratorium on hydraulic fracturing doesn’t allow energy companies to extend leases with landowners beyond the expiration dates in their contracts, the state’s highest court ruled Tuesday. The Court of Appeals answered that question for a federal appeals court reviewing the case. It follows a federal judge’s 2012 ruling for the landowners, also concluding the leases expired. The contract clause triggering extensions due to an event beyond the parties’ control would apply if drilling for oil and natural gas had begun, the Court of Appeals said. However, the normal contract expiration periods — five years plus ordinary agreed-upon extensions — apply during the leases’ initial term granting drilling and exploration rights, the seven judges unanimously agreed. “I don’t know how much it matters at the exact present time in New York,” said attorney Peter Bouman, representing 35 landowners who had leases. “It matters across the country because this kind of lease is in an awful lot of jurisdictions.”Case law from New York’s highest court is often influential with other courts, Bouman said. Most of the leases were signed in 2001. Last December, after further reviews, the Cuomo administration decided to prohibit fracking for natural gas because of what regulators called unexplored health risks and dubious economic benefits. Losing Tuesday at the Court of Appeals would have had a major impact on the landowners, leaving them at the mercy of the gas companies for a long time, Bouman said. “There’s a lien on the land. You can’t sell it. You can’t borrow against it a lot of times. And somebody else owns, and in fact has a right to, all of the mineral interests under the land. When the technology improves those mineral rights could be worth far more than the land itself.
NY Ban on Fracking Didn't Extend Gas Leases - (CN) - A 2008 state moratorium on fracking did not constitute an unexpected event that triggered clauses extending oil and gas drillers' land leases, New York's high court found. The decision came in response to two certified questions sent by a federal appeals court to clarify state law on the "relatively undeveloped" legal field around high-volume hydraulic fracturing and horizontal well drilling, commonly known as fracking. Starting in the mid-2000s, energy companies interested in exploring for natural gas in New York began securing land leases with property owners. The leases typically lasted five years. At the same time, though, safety and environmental concerns about fracking arose, leading then-Gov. David Paterson to direct the state Department of Environmental Conservation, which oversees conventional oil and gas drilling, to conduct a formal review of the technique. The order prompted Inflection Energy, a driller with leases in Tioga County near Binghamton and the Pennsylvania border, to notify landowners that a "force majeure" event had occurred which extended the term of its contracts. Oil and gas land leases typically let energy companies conduct geophysical, seismic and other exploratory tests, with landowners receiving a nominal annual fee in return. If a well goes into production, the landowner receives a royalty on the energy company's gross proceeds. Inflection Energy's leases, like most oil and gas contracts, contained term clauses known as habendum clauses that established the set period for granted development rights - in this case a primary term of five years. Inflection's leases also had a force majeure clause, signifying "an event beyond the control of the parties that prevents performance under a contract and may excuse nonperformance." That clause kicked in when Paterson ordered the fracking review, Inflection contended.
New York court: Drilling leases expired despite state ban — The New York moratorium on hydraulic fracturing doesn’t allow energy companies to extend leases with landowners beyond the expiration dates in their contracts, the state’s highest court ruled Tuesday. The Court of Appeals answered that question for a federal appeals court reviewing the case. It follows a federal judge’s 2012 ruling for the landowners, also concluding the leases expired. “Basically it’s going to be the end of the case,” said attorney Thomas West, representing Inflection Energy and other companies. “We expect the Second Circuit issues its decision applying the certified answer.” The contract clause triggering extensions due to an event beyond the parties’ control would apply if drilling for oil and natural gas had begun, the Court of Appeals said. However, the normal contract expiration periods — five years plus ordinary agreed-upon extensions — apply during the leases’ initial term granting drilling and exploration rights, the seven judges unanimously agreed.
Texas Lawmakers Want To Stop Towns From Banning Fracking -- Last November, residents of the North Texas town of Denton overwhelmingly voted to ban fracking within their city limits. This did not sit well with Texas lawmakers, and they have made it a top priority of this spring’s legislative session to make sure it doesn’t happen again. On Monday, the Texas House Natural Resources Committee voted 10-1 to approve House Bill 40, which drastically curtails local governments’ abilities to say no to fracking within their communities. The Senate Natural Resources and Economic Development Committee passed a companion bill last week, SB 1165. Both bills will now head to the full House and Senate for votes. This effort is the latest take on a style of preemption legislation that has been used across the country to bar cities from regulating everything from landlords to the minimum wage. As the New York Times recently reported, these preemption laws invoke “a paradox for conservatives who have long extolled the virtues of local control in some areas, like education, but now say uniform standards are necessary in others.” In Texas, this hypocrisy is on full display when it comes to banning local control over fracking. “These bills absolutely conflict with longstanding conservative principles of local control and self-determination,” Luke Metzger, the founder and director of Environment Texas, told ThinkProgress. “Many of these legislators are speaking out of both sides of their mouths, decrying federal preemption of state sovereignty on the one hand, while pushing one-size fits all mandates from Austin overriding local ordinances.” Metzer said that the bills were primarily driven by Denton’s vote to ban drilling, and that while the House Bill was changed to be less severe, it could “still could undermine many city ordinances.”
Bill to prohibit local fracking bans clears Senate panel - A Senate panel has approved a bill that would limit cities and towns from passing local ordinances restricting oil and gas drilling and exploration. The Senate Energy Committee voted 10-1 on Wednesday to advance the bill by Senate President Pro Tem Brian Bingman. The measure now heads to the full Senate. The bill is among several filed this year to limit local regulations in the wake of a ban on hydraulic fracturing that voters in the north Texas city of Denton overwhelmingly approved in November. Bingman says the bill is designed to protect one of the state’s most economically important industries. The bill would allow cities and towns to enact “reasonable” ordinances on things like road use and setbacks for oil and gas well sites. House Bill 2178: http://bit.ly/1IojLW8
Shale prosperity spreads to Wyoming, Colorado, Oklahoma, Utah, N. Mexico: Combined oil production up 116% in 5 years -- We hear a lot about the well-publicized increases in oil production in America’s top two oil-producing states. No. 1 Texas now produces nearly 3.5 million barrels of oil every day, almost as much as Canada’s total daily production of 3.7 million barrels. As a separate country the Lone Star State would now be the world’s 7th largest oil-producer. The No. 2 state is North Dakota, home of the prolific Bakken oil fields where daily oil production topped 1 million barrels last June, placing it in an elite group of only ten oil fields worldwide that produced more than 1 million barrels of crude oil per day at peak production. But the recent breakthroughs in advanced drilling and extraction technologies that have boosted oil output in Texas and North Dakota have also brought dramatic increases in shale oil output over the last five years to the five oil-producing states of: Oklahoma (+127% since January 2010), Utah (+90%), Colorado (+198%), Wyoming (+67%) and New Mexico (+114%). The chart above shows the combined daily oil output in those five states (data here), which has increased by 116% over the last five years, from 615,000 barrels per day (bpd) in January 2010 to 1.33 million bpd in December 2014. Recent increases in the combined oil production in those five states since 2010, thanks to advanced drilling technologies, have brought the combined five-state oil production to the highest level in the history of the EIA state data going back to 1981, and has completely reversed a multi-decade decline in oil production that started in those states in the mid-1980s. Combined oil production in Oklahoma, Utah, Colorado, Wyoming and New Mexico topped one million bpd in April 2013 for the first time since early 1989, and then topped the previous 1984 peak of 1.258 million bpd in August 2014 on the way to reaching a new record peak high in December last year of 1.33 million bpd.
Distress in the Oil Field - Bankruptcy Beat - WSJ Since June 2014, the price of oil has plummeted to less than $50 per barrel from more than $100. Although forecasters seem to think the price will rebound, there is not much consensus on when that will happen. A recent MoneyBeat report showed that analysts predict the price of oil could end 2015 anywhere between $52 and $84 a barrel. In the world of distress, the effects of low prices are already beginning to be felt by some in the industry. Endeavour International Corp., Dune Energy Inc., BPZ Resources Inc. and Quicksilver Resources Inc.—all companies that explore and produce oil and gas—have filed for chapter 11 bankruptcy, as has Cal Dive International, a contractor that services oil and gas exploration companies. American Eagle Energy Corp. and Samson Resources Corp., have said they’re facing trouble, warning of possible bankruptcy filings. And they’re not alone. With so much turmoil in the industry and likely more on the way, the Examiners are set to share their thoughts in two prongs, addressing both the stress in the industry as well as the legal issues these companies present for the bankruptcy court.
Big Oil Pressured Scientists Over Fracking Wastewater's Link to Quakes - In November 2013, Austin Holland, Oklahoma’s state seismologist, got a request that made him nervous. It was from David Boren, president of the University of Oklahoma, which houses the Oklahoma Geological Survey where Holland works. Boren, a former U.S. senator, asked Holland to his office for coffee with Harold Hamm, the billionaire founder of Continental Resources, one of Oklahoma’s largest oil and gas operators. Boren sits on the board of Continental, and Hamm is a big donor to the university, giving $20 million in 2011 for a new diabetes center. Says Holland: “It was just a little bit intimidating.” Holland had been studying possible links between a rise in seismic activity in Oklahoma and the rapid increase in oil and gas production, the state’s largest industry. During the meeting, Hamm requested that Holland be careful when publicly discussing the possible connection between oil and gas operations and a big jump in the number of earthquakes, which geological researchers were increasingly tying to the underground disposal of oil and gas wastewater, a byproduct of the fracking boom that Continental has helped pioneer. “It was an expression of concern,” Holland recalls. Details surrounding that meeting and others have emerged in recent weeks as e-mails from the Oklahoma Geological Survey have been released through public records requests filed by Bloomberg and other media outlets, including EnergyWire, which first reported the Hamm meeting.
Fracking's New Legal Threat: Earthquake Suits -- After an earthquake toppled her chimney, sending rocks crashing through the roof and onto her legs, Sandra Ladra didn't blame an act of God. She sued two energy companies, alleging they triggered the 2011 quake by injecting wastewater from drilling deep into the ground. Ms. Ladra's lawsuit, now before the Oklahoma Supreme Court, highlights an emerging liability question for energy companies: Can they be forced to pay for damages from earthquakes if the tremors can be linked to oil-and-gas activity? Oklahoma, with a history of mild-to-moderate seismic activity, has experienced 585 earthquakes of 3.0 or greater magnitude last year--big enough to be felt indoors--according to the Oklahoma Geological Survey. That's more than the state had in the previous 30 years combined and the most of any state in the contiguous U.S. So far, most of the tremors under investigation in Oklahoma and other oil-producing states, including Arkansas, Kansas, Ohio and Texas, have been too small to cause major damage. But the prospect of facing juries over quake-related claims is reverberating throughout the energy industry, which fears lawsuits and tighter regulations could increase costs and stall drilling. "It's definitely something that has risen to a level of fairly high concern," Steve Everley, a spokesman for industry advocate Energy In Depth, said of earthquake-related risks. "Companies recognize that there's a problem here," he said, adding that they are contributing data to help regulators determine what's causing the quakes. Most of the focus isn't on hydraulic fracturing, which involves shooting a slurry of water, sand and chemicals into wells to let oil and gas flow out--and which helped touch off the recent U.S. energy boom. Instead, researchers say the most serious seismic risk comes from a separate process: disposal of toxic fluids left over from fracking and drilling by putting it in wells deep underground. Geologists concluded decades ago that injecting fluid into a geologic fault can lubricate giant slabs of rock, causing them to slip.
Fracking’s New Nemesis: Earthquake Lawsuits - Yves Smith - Despite widespread environmental concerns and community opposition, in large swathes of the US, the fracking industrial complex has seemed unstoppable. That may finally be changing. One major risk, which we’ve discussed at length, is how many shale gas companies are deeply indebted and depend on continued access to cheap credit. With energy prices low, many are having to continue to produce to service debt, keeping the supply glut going longer than it would if more could afford to cut supply and wait for prices to recover. But even if the more financially fragile and/or higher cost fracking plays go bust, for the most part, that means they’ll be restructured, with the lenders taking losses and the new buyers having a go with a cleaned-up balance sheet. Thus quite a few of the current shale gas operators will go away, but not their operations. However, a more fundamental threat to the industry looms: that of costly earthquake litigation. Oklahoma is ground zero. In the last year, the state has had more earthquakes of magnitude 3.0 or greater than in the previous 30, including a 5.6 magnitude tremblor, the strongest in recorded state history. Two different geology journals attributed the quake to fracking activity in the immediate vicinity. The earthquake risk apparently does not result from the fracking (the fracturing of geological structures) per se but fluid disposal. From the Wall Street Journal: [R]esearchers say the most serious seismic risk comes from a separate process: disposal of toxic fluids left over from fracking and drilling by putting it in wells deep underground. Geologists concluded decades ago that injecting fluid into a geologic fault can lubricate giant slabs of rock, causing them to slip. Scientists say disposal wells are sometimes bored into unmapped faults. The practice isn’t new, but has proliferated with the U.S. drilling boom. Some states are trying to mitigate earthquake risk by limiting the depth and greatly lowering the injection rate of waste water. The Wall Street Journal story does not discuss what economic impact restrictions like that would have.
Staggering Rise in Fracking Earthquakes Triggers Kansas to Take Action » It seems unlikely that Kansas, known as one of the most conservative states in the U.S. and home to fossil fuel barons the Koch Brothers, would take action against the oil and gas industries. But in the face of a new wave of earthquakes attributed to the underground injection of fracking wastewater, its industry regulating body, the Kansas Corporation Commission (KCC), ordered a reduction of wastewater injection in two counties abutting Oklahoma, finding that increased earthquake activity correlated with increasing volumes of injected fracking water.“Because individual earthquakes cannot be linked to individual injection wells, this order reduces injection volumes in areas experiencing increased seismic activity,” said its official report. It added, “The commission finds increased seismic activity constitutes an immediate danger to the public health, safety and welfare. The commission finds damage may result if immediate action is not taken.” The commission’s report pointed to findings by the U.S. Geological Survey (USGS) that the number of earthquakes in Kansas has risen over the past several years. “USGS data shows from 1981 through 2010, Kansas experienced 30 recorded earthquakes,” it said. “In 2013, there were four recorded earthquakes in Kansas. The number of recorded earthquakes reported in Kansas during 2014 increased to 127. From January 1, 2015, to March 16, 2015, Kansas has experienced 51 recorded earthquakes. The majority of the earthquakes have occurred in Harper and Sumner Counties. The increased number of recorded earthquakes in Kansas coincides with an increase in the number of injection wells and the amounts of injected saltwater in Harper and Sumner Counties.”
Labor officials: New Mexico, West Texas oil field workers underpaid -- Federal labor officials say oil and natural gas workers in New Mexico and West Texas have been underpaid by more than $1.3 million. The U.S. Labor Department’s Wage and Hour Division made the announcement Monday. The findings stem from an enforcement initiative launched by the division last year. Officials say overtime violations led to the underpayment to some 1,300 workers. Among the problems found, employers were failing to include bonus payments when calculating overtime rates, weren’t paying for time spent working off-the-clock and paying flat rates despite the hours worked by employees. There were also instances of workers being misclassified as independent contractors. A regional labor official, Cynthia Watson, says there’s a misconception that because oil and gas workers typically earn more than minimum wage that they’re being paid legally.
Drought-stricken California not to halt water consuming fracking: California oil producers used nearly 280 million litres (70 million gallons) in the process of fracking for oil and gas in the state last year.This amounts to more than half a million litres of water per day in a nation which is already water-stressed under a four-year-long drought.Just a few days ago California Governor Jerry Brown ordered mandatory water use reductions in supplies to households amounting to 25% for the first time in the state's history, following water scarcity and worsening drought conditions.The drought has worsened with rain deficit and rising temperatures from global warming that led to a winter of record-low snowfalls.The current drought, which began in 2011, is the worst in 120 years of climate record-keeping in the state while some suggest it is the worst in more than a thousand years.It is in such a scenario that Brown has claimed fracking was not a major drain on water supplies and decided not to halt fracking in the state.
Californians Outraged As Oil Producers & Frackers Excluded From Emergency Water Restrictions -- California's oil and gas industry is estimated (with official data due to be released in coming days) to use more than 2 million gallons of fresh water per day; so it is hardly surprising that, as Reuters reports, Californians are outraged after discovering that these firms are excluded from Governor Jerry Brown's mandatory water restrictions, "forcing ordinary Californians to shoulder the burden of the drought." From Reuters, California should require oil producers to cut their water usage as part of the administration’s efforts to conserve water in the drought-ravaged state, environmentalists said on Wednesday. Governor Jerry Brown ordered the first statewide mandatory water restrictions on Wednesday, directing cities and communities to cut their consumption by 25 percent. But the order does not require oil producers to cut their usage nor does it place a temporary halt on the water intensive practice of hydraulic fracturing. California’s oil and gas industry uses more than 2 million gallons of fresh water a day to produce oil through well stimulation practices including fracking, acidizing and steam injection, according to estimates by environmentalists. The state is expected to release official numbers on the industry’s water consumption in the coming days. “Governor Brown is forcing ordinary Californians to shoulder the burden of the drought by cutting their personal water use while giving the oil industry a continuing license to break the law and poison our water,” said Zack Malitz of environmental group Credo. “Fracking and toxic injection wells may not be the largest uses of water in California, but they are undoubtedly some of the stupidest,” he said.
EPA Report Finds Nearly 700 Chemicals Used in Fracking » The U.S. Environmental Protection Agency (EPA) released a report on Friday that found there are nearly 700 chemicals used in the fracking process. The EPA completed the analysis by looking at more than 39,000 FracFocus disclosures in the last two years. The FracFocus Chemical Disclosure Registry was developed by the Groundwater Protection Council and the Interstate Oil and Gas Compact Commission in response to public concern about the contents of fracking fluid, says the EPA report. “FracFocus is a publicly accessible website where oil and gas production well operators can disclose information about the ingredients used in hydraulic fracturing fluids at individual wells,” says the EPA report. However, only 20 states require fracking companies to use FracFocus “to publicly disclose the chemicals they inject into wells,” says The Hill. Additionally, the report found that 10 percent of all chemicals used during the fracking process were not disclosed. Despite all these limitations, the findings were still alarming. The report found that the median number of chemical additives per fracking job was 14. Hydrochloric acid, methanol, and hydrotreated light petroleum distillates were the most common additives, being reported in 65 percent of all disclosures, says The Hill.Even in low doses, these are known to cause skin irritation, chemical burns, headaches and blurred vision, according to the Center for Disease Control and California’s Office of Environmental Health Hazard Assessment. At higher concentrations, exposure to these chemicals can cause shortness of breath, blindness and possibly death.
Oil, gas spill report for March 30 - The following spills were reported to the Colorado Oil and Gas Conservation Commission in the past two weeks. Kerr McGee Oil & Gas Onshore LP, reported on March 24 that a truck driver left a valve open, while transporting a reject tank, outside of Platteville. Approximately five barrels of crude oil spilled onto lined containment. A hydro-vac truck was used to recover the crude oil and it is unknown how much crude oil was recovered. The valve was shut off, isolating the release. The soil that was impacted was collected for disposal at a proper facility. Soil samples will be collected and tested for compliance with COGCC standards. Whiting Oil & Gas Corporation, reported on March 20 that a loose union resulted in a flowline leaking condensate fluid, outside of Raymer. It is approximated that less than five barrels of condensate spilled. The leak stopped with the tightening of the union. Impacted soil is scheduled for excavation and will be remediated via soil shredding. Noble Energy Inc., reported on March 13 that soil impacts were discovered after a water vault removal, outside of Raymer. It is approximated that less than five barrels of produced water spilled. All production equipment was shut in and an excavation has been scheduled. It is determined that the cause of the leak was equipment failure. The previous oil and gas spill report is available here.
Feds: Niobrara needs railroads to send oil to market - Rail transportation is a crucial factor in the Niobrara oil industry. According to the Denver Business Journal, a new Energy Information Administration (EIA) analysis reports that rail cars transport about 64 percent of oil produced in the formation. Earlier this week, the EIA announced plans to release a monthly report tracking how much oil is transported through rail and information about transportation via pipeline, tanker and barge. “The new crude-by-rail provides a clearer picture on a mode of oil transportation that has experienced rapid growth in recent years and is of great interest to policy makers, the public, and industry,” EIA administrator Adam Sieminski said in the article. Using information from the U.S. Surface Transportation Board, outside sources and its own data, the EIA hopes to curate information from January 2010 up to January 2015. During that five-year period, Niobrara’s production saw a 300,000 barrel-per-day leap. Transportation via rail and pipeline played an integral role in the production boost. According to Denver-based ARB Midstream LLC CEO Adam Bedard, rail transportation enables companies to ship to a larger range of locations. But rail transportation may see a slow-down. In the wake of numerous train derailments, BNSF railroad announced new risk-management measures yesterday, including slower speeds in larger metros, improved track inspections and more repairs on faulty wheels.
Nebraska Guy To Regulators: Here, Have A Cold Glass Of Delicious Fracking Juice! --Public hearings don’t generally make for exciting video, short of the occasional outburst by fans of black helicopters or people worried about buttsex enzymes, but they can also be enlivened by an activist with a good visual aid. For example, here’s a Nebraska man inviting members of the state’s Oil and Gas Conservation Commission to drink glasses full of a mystery chemical mix, to make the point that he’s not so crazy about a proposal to pump other states’ fracking wastewater into wells in Nebraska. The state is considering a plan by Terex Energy Corporation to “inject up to 10,000 gallons per day of wastewater from fracking in Colorado and Wyoming into an old oil well on a ranch in Sioux County, in the northwest corner of Nebraska.” One member of the commission tried to assure citizens that concentrations of harmful chemicals in fracking wastewater were so low, the human body could “handle” occasionally ingesting some of the stuff. So Concerned Citizen James Osborn came to the hearing, poured bottled water into three plastic cups, and then added a mixture of mystery goo to the water, explaining that it was perfectly safe but he couldn’t tell the commissioners what was in it, since that was “a trade secret.”
WATCH: Nebraska farmer silences oil and gas committee with invitation to drink water tainted by fracking: Appearing before a Nebraska Oil & Gas Conservation committee hearing, a local farmer received nothing but silence from the pro-fracking members of the board after he invited them to drink glasses of water tainted by fracking. In the video, uploaded to YouTube by BoldNebraska, Nebraskan James Osborne used his 3 minutes before the committee to visually explain what fracking waste can do to the water table, dramatically pouring out water containing his own “private mixture” of fracking additives. The committee is holding public hearings on a proposal by an oil company to ship out-of-state fracking wastewater into Nebraska where it will be dumped into a “disposal well” in Sioux County. According to a report, the Terex Energy Corp wants to truck as much as 10,000 barrels a day of the chemical-laden fracking wastewater to a ranch north of Mitchell, Nebraska for disposal. Explaining that he has ties to the oil industry and that he is still on the fence about fracking, Osbourne explained fluid dynamics to the board while pouring out three cups of the sludgy water that could result from spills or from seeping into the water table. Referring to earlier testimony, Osbourne said, “So you told me this morning that you would drink this water,” as he indicated the cups. “So would you drink it? Yes or no?” he asked, only to be met by silence by the stone-faced group before a member explained they wouldn’t be answering any questions. “Oh, you can’t answer any questions? Well my answer would be ‘no.’ I don’t want this in the water that will travel entirely across this state in three days,” Osborne said. “There is no doubt there will be contamination. There will be spills.”
Enbridge Energy doesn't see oil slowdown affecting Minnesota pipeline projects - Even as the U.S. oil industry slashes investment, pipeline operator Enbridge Energy isn’t paring back its record five-year, $44 billion building program that includes major projects in Minnesota, the company’s CEO Al Monaco said Friday. Monaco said in an interview that the 50 percent drop in crude oil prices since June “is very dire” for the industry, but hasn’t changed the economics of pipelines like Enbridge’s proposed Sandpiper project to deliver North Dakota oil across northern Minnesota to a terminal and other pipelines in Superior, Wis. “The amount of production that is coming on to our system and the amount of production we forecast from the oil sands or the Bakken is actually well in excess of the capacity we have on our system,” said Monaco, whose company operates the world’s longest crude oil pipeline system and has major operations in Minnesota and Wisconsin. Monaco told the Star Tribune that he sees no significant change in the company’s investment plan, which is focused on liquid pipelines. Most projects, he said, are secured with contracts or are already underway. The share in Minnesota is $5 billion, he added.
Fracking Town’s Desperate Laid-off Workers: ‘They Don’t Tell You It’s All a Lie’ —From the looks of it, the nation’s boomtown is still booming. Big rigs, cement mixers and oil tankers still clog streets built for lighter loads. The air still smells like diesel fuel and looks like a dust bowl— all that traffic — and natural gas flares, wasted byproducts of the oil wells, still glare out at the night sky like bonfires. Not to mention that Walmart, still the main game in town, can’t seem to get a handle on its very long lines and half empty shelves. But life at the center of the country’s largest hydraulic fracturing, or fracking, boom has definitely changed. The jobs that brought thousands of recession-weary employment-seekers to this once peaceful corner of western North Dakota over the last five years have been drying up, even as the unemployed keep coming. .Some migrants have already left, or are planning to, according to the local UHaul companies. They report fewer people renting vans and trucks to move into town and more laid-off workers renting vehicles to move out. The rest are becoming Williston’s version of day laborers. They compete for low-paying jobs such as picking up trash, doing laundry and mopping floors, that make enough for them to eat, but not enough to afford a place to live. (The average one-bedroom apartment in Williston costs $2,395 a month.) Some live in one room with several other men, pooling resources and splitting costs. Others don’t know where they’ll sleep from one night to the next. The Salvation Army has offered stranded workers a one-way ticket back home. But many job seekers seem unwilling to leave—at least not until they can make a success out of their sacrificial move to a place with six months of winter, the worst traffic they’ve ever seen, and a disgruntled, if not miserable, populace.
Oil company requesting flaring exceptions for 140 oil wells — An oil company is asking the state regulators to grant an exception to North Dakota’s flaring rate requirements for 140 of its oil wells in Dunn and McKenzie counties. The Bismarck Tribune reports that XTO Energy is arguing it has nowhere to take its gas because gas-processing company OneOK couldn’t secure an easement agreement and build a 20-mile pipeline expansion. OneOK says the pipeline would have moved 40 million cubic feet per day to the company’s Garden Creek gas plant in McKenzie County. XTO’s request was heard this week by the state’s Oil and Gas Division and will be forwarded to the State Industrial Commission for action. Earlier this week, the commission more clearly defined gas-capture rules, imposing penalties for noncompliance and also establishing flexibility to cover extenuating circumstances.
More than 21,000 gallons of saltwater leak in northwest ND — The state Department of Health says a pipeline that leaked about 21,000 gallons of saltwater in northwest North Dakota has impacted a nearby wetland. The pipeline owned by Oasis Petroleum LLC leaked approximately 500 barrels of saltwater, or brine, about 11 miles northwest of Powers Lake. The health department says 475 barrels of the spill have been recovered. It’s unclear how much of the nearby wetland has been impacted. The health department is on site and says it is providing oversight of the cleanup. The North Dakota Oil and Gas Division has also been at the cleanup. Brine is an unwanted byproduct of oil production and is considered an environmental hazard by the state. It is many times saltier than sea water and can easily kill vegetation exposed to it.
North Dakota's new oil train safety checks seen missing risks -- New regulations to cap vapor pressure of North Dakota crude fail to account for how it behaves in transit, according to industry experts, raising doubts about whether the state’s much-anticipated rules will make oil train shipments safer. High vapor pressure has been identified as a possible factor in the fireball explosions witnessed after oil train derailments in Illinois and West Virginia in recent weeks. For over a year, federal officials have warned that crude from North Dakota’s Bakken shale oilfields contains a cocktail of explosive gas – known in the industry as ‘light ends.’ The new rules, which take effect on April 1, aim to contain dangers by spot-checking the vapor pressure of crude before loading and capping it at 13.7 pounds per square inch (psi) – about normal atmospheric conditions. The plan relies on a widely-used test for measuring pressure at the wellhead, but safety experts say gas levels can climb inside the nearly-full tankers, so the checks are a poor indicator of explosion risks for rail shipments.
BNSF Engineer Who Manned Exploding North Dakota "Bomb Train" Sues Former Employer - A Burlington Northern Santa Fe (BNSF) employee who worked as a locomotive engineer on the company's oil-by-rail train that exploded in rural Casselton, North Dakota in December 2013 has sued his former employer. Filed in Cass County, the plaintiff Bryan Thompson alleges he “was caused to suffer and continues to suffer severe and permanent injuries and damages,” including but not limited to ongoing Post-Traumatic Stress Disorder (PTSD) issues. Thompson's attorney, Thomas Flaskamp, told DeSmogBlog he “delayed filing [the lawsuit until now] primarily to get an indication as to the direction of where Mr. Thompson's care and treatment for his PTSD arising out of the incident was heading,” which he says is still being treated by a psychiatrist. The lawsuit is the first of its kind in the oil-by-rail world, the only time to date that someone working on an exploding oil train has taken legal action against his employer using the Federal Employers' Liability Act. Flaskamp told The Forum newspaper in Fargo, North Dakota that Thompson had to “run for his life” to escape the train he was manning once it derailed after colliding with an oncoming grain train. “Behind him, tank cars were starting to derail, catch fire and explode,” Flaskamp told The Forum of Thompson, who is in his 30s and is currently in school to obtain a teaching degree. The plaintiffs allege BNSF, owned by multi-billionaire Warren Buffett, violated the Federal Employers' Liability Act in multiple ways. They include “failing and neglecting to provide [Thompson] with a reasonably safe place to work” and “failing to warn [him] of the dangers of hauling explosive oil tank railcars and the tendencies of these railcars to rupture and explode upon suffering damage.”
Million barrels of oil per day riding U.S. rails - – More than 1 million barrels of crude oil move by train across the United States every day, according to data published for the first time by the government on Tuesday. The volume of crude shipped by rail has increased more than 50-fold in five years, from just 630,000 barrels in January 2010 to 33.7 million barrels in January 2015, the Energy Information Administration (EIA) revealed in its first monthly report on movements of oil by rail. Until now, information on oil shipments has been incomplete, partly confidential and scattered across a number of sources. The Association of American Railroads, individual railroad companies, and the federal government’s Surface Transportation Board, which regulates freight rates, have all published limited data on shipments. The EIA has now brought together the confidential data from the U.S. Surface Transportation Board and Canada’s National Energy Board as well as its own information on production and stocks in each part of the United States, to produce the first comprehensive picture of crude-by-rail movements. The data underscore how rapidly the modern oil-by-rail business has grown. Shipments rose from almost zero in 2008 to hit 1 million barrels per day (bpd) for the first time in the current boom in April 2014.
Where all the oil trains are going - The aging pipeline system in the US wasn’t built for the fracking boom. Shale oil production has soared in some areas that are not well integrated into the pipeline network. Primary among them: North Dakota, now the second largest producing state in the US, after Texas. Hence the use of trains to transport crude oil. To the greatest satisfaction of the railroads, Warren Buffet, tank-car makers, tank-car leasing companies, and the like. At first, say in 2010, it wasn’t a big deal. Only 55,000 barrels per day were shipped from the Bakken in North Dakota to other areas in the US. But as production in the Bakken soared, so did shipments by train, punctuated by derailments in Canada and the US that led to some horrific explosions and loss of life. Now it is a big deal – including for the communities through which these trains rumble: oil train shipments in 2014 exceeded 1 million barrels per day, or about 11% of US oil production. Oil trains had another quirk: the monthly petroleum supply statistics the Energy Department’s EIA collects and publishes included crude oil movements by pipeline, tanker, and barge. But not by oil train. So now, for the first time, the EIA is gathering oil-train data, which as it says, “dramatically reduces the absolute level of unaccounted for volumes” – emphasis by the EIA – in its monthly balances for each region. So it just released its first “CBR” (crude by rail) data set for January, and time-series maps going back to 2010, when it all started in earnest. Turns out in January, 1,045,000 barrels per day were shipped by oil train to destinations in the US, of which 130,000 barrels per day originated in Canada and 704,000 barrels per day in PADD 2 (Petroleum Administration for Defense District), which includes the Bakken in North Dakota. Of that, 437,000 barrels per day were shipped to PADD 1 (East Coast). Below are the EIA’s time-series maps that show the movements annually from 2010 through 2014. Excluded are movements of less than 1,000 barrels per day and short-distance movements between rail yards within a region.
BNSF railroad adds new safety rules for crude oil trains - — BNSF has started taking additional safety measures for crude oil shipments because of four recent high-profile derailments in the U.S. and Canada, the railroad said Monday. Under the changes, BNSF is slowing down crude oil trains to 35 mph in cities with more than 100,000 people and increasing track inspections near waterways. The Fort Worth, Texas, based railroad also is stepping up efforts to find and repair defective wheels before they can cause derailments. BNSF spokesman Michael Trevino said these additional safety efforts were imposed last week in response to the recent derailments, including one involving a BNSF train earlier this month near Galena, Illinois, and the Mississippi River. “The recent incidents involving crude trains, including our own event in Galena, has led us to believe that we must take further action,” Trevino said. In February, a 100-car Canadian National Railway train hauling crude oil and petroleum distillates derailed in a remote part of Ontario, Canada. And less than two days later, a 109-car CSX oil train derailed and caught fire near Mount Carbon, West Virginia, leaking oil into a Kanawha River tributary and burning a house to its foundation. The worst of these crude oil derailments happened July 6, 2013, and involved a runaway train that killed 47 people in the town of Lac-Megantic, Quebec, just across the U.S.-Canada border from Maine.
North Dakota launches oil rules hoping to curb U.S. rail disasters - North Dakota will from Wednesday require the more-than 1.2 million barrels of crude extracted each day from the state’s Bakken shale formation be run through machines that remove volatile gases linked to recent crude-by-rail disasters. The controversial step is designed to abrogate the damage North Dakota crude oil – 70 percent of which is transported via rail – can cause during derailments. In the absence of concrete regulations from the U.S. Department of Transportation, North Dakota’s new rules become the de facto national standard on the treatment of crude before tankcar loading. “North Dakota’s crude oil conditioning order is based on sound science and represents an important step in the ongoing work to ensure that oil-by-rail transportation is as safe as possible,” said Governor Jack Dalrymple, who has also been pushing federal regulators for stricter rail car designs. The new regulations require every single barrel of North Dakota crude to be filtered for ethane, propane and other natural gas liquids (NGLs), which are found naturally co-mingled with oil. North Dakota crude contains a far-higher percentage of those gases than, for instance, crude extracted in Texas or Alaska, and that added volatility fueled a deadly derailment in Quebec in late 2013, as well as a string of successive disasters.
EIA: The U.S. hit records unseen for a century --The United States hit a milestone last year that hasn’t been accomplished in over a hundred years. According to the U.S. Energy Information Administration (EIA), 2014 was the largest volume increase in oil production (including lease condensate) since record-keeping began in 1900. U.S. crude oil production increased during 2014 by 1.2 million barrels per day (bbl/d) to 8.7 million bbl/d. On a percentage basis, the EIA stated that output in 2014 increased by 16.2 percent, the highest growth rate since 1940. Major thanks for the increase should go to the hydraulic fracturing and horizontal drilling operations in the tight oil plays in North Dakota, Texas and New Mexico. The EIA states that even though oil production is expected to rise in 2015 and again in 2016, the growth is not expected to be as strong as in 2014. Severe budget cuts and slumping oil prices are a likely reason. Since mid-2014, the price of crude oil has fallen roughly 50 percent, which has slowed production in marginal drilling areas and focused investment in the more developed areas of tight oil plays. According to the EIA’s latest Short-Term Energy Outlook, annual crude oil production is expected to grow 8.1 percent, half of 2014’s rate. Next year, growth will slow down even more severely with an expected rate of 1.5 percent.
U.S. may skirt oil storage crisis as drivers hit the road -- A month ago, it seemed inevitable: a massive global oversupply of crude oil production would overwhelm storage tanks in Oklahoma and fill supertankers off Singapore. Now, there are growing signs that the U.S. oil market can avoid the doomsday scenario in which it runs out of room to stockpile surplus crude, a development that oil traders worried would send crude prices into another tailspin. One reason is that refiners, spurred by high profit margins, are rushing to buy crude and churn out more fuel in response to an unexpectedly swift rise in U.S. road travel and soaring Chinese demand for fuel-hungry sport utility vehicles. Furthermore, shale oil drillers have hit the brakes on new wells faster than many anticipated. This could throw years of unyielding growth into reverse as early as May. Oil prices are starting to reflect these changes. U.S. crude has rebounded from a six-year low of $42 a barrel, although those gains were built partly on growing anxiety over tumult in Yemen last week and a drop in the U.S. dollar. “On a global basis I think sentiment has definitely shifted,” says Amrita Sen from Energy Aspects. “The main reason it’s shifted is that people are realizing demand isn’t actually that bad; in fact, it’s phenomenally strong.”
The "Revolver Raid" Arrives: A Wave Of Shale Bankruptcies Has Just Been Unleashed -- Back in early 2007, just as the first cracks of the bursting housing and credit bubble were becoming visible, one of the primary harbingers of impending doom was banks slowly but surely yanking availability (aka dry powder) under secured revolving credit facilities to companies across America. This, in effect, was the first snowflake in what would ultimately become the lack of liquidity avalanche that swept away AIG and unleashed the biggest bailout of capitalism in history. Back then, analysts had a pet name for banks calling CFOs and telling them "so sorry, but your secured credit availability has been cut by 50%, 75% or worse" - revolver raids. Well, the infamous revolver raids are back.And unlike 7 years ago when they initially focused on retail companies as a result of the collapse in consumption burdened by trillions in debt, it should come as no surprise this time the sector hit first and foremost is energy, whose "borrowing availability" just went poof as a result of the very much collapse in oil prices. As Bloomberg reports, "lenders are preparing to cut the credit lines to a group of junk-rated shale oil companies by as much as 30 percent in the coming days, dealing another blow as they struggle with a slump in crude prices, according to people familiar with the matter.
US oil and natural gas rig count drops by 20 to 1,028 - Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. declined by 20 this week to 1,028 amid slumping oil prices. Houston-based Baker Hughes said Thursday 802 rigs were seeking oil and 222 exploring for natural gas. Four were listed as miscellaneous. A year ago, 1,818 rigs were active. Among major oil- and gas-producing states, Texas and North Dakota each dropped six rigs, Louisiana was off five and Oklahoma four. Arkansas, Kansas, Ohio and Pennsylvania declined one apiece. California was up by two and Alaska and West Virginia added one rig each. Colorado, New Mexico, Utah and Wyoming were unchanged. The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.
Drop in US Rig Count Slows after 3-Month Collapse - According to oilfield service company Baker Hughes (BHI), there were 1,048 active oil and gas rigs in the US during the week ended March 27, 2015. That count represents 21 fewer rigs than in the week ended March 20. This was also the smallest rig count decrease in the past 14 weeks. The US rig count generally experienced an uptrend in 2014, but that trend has reversed in the past three months. Fifteen consecutive weeks of falling rig counts show that US drilling activity is on a downturn. Last week also saw the twentieth rig count decrease in the past six months.After last week’s drop, the US rig count dropped to its lowest level since October 2009. The week’s figures were led primarily by a fall in the onshore rig count. Please read Part 6 of this series to learn more about the onshore rig count. According to Baker Hughes, February’s average rig count of 1,348 declined by 335 from January’s average of 1,683. September’s average rig count of 1,931 was the highest since July 2012. Last week’s lower rig count was mainly due to there being 12 fewer active crude oil rigs. There were nine fewer active natural gas rigs. In the last year, the total US rig count has dropped by 761 or 42%. The number of active oil rigs decreased by 674 or 45%. The number of natural gas rigs fell by 85 or ~27%. The total rig count increased by 61 for the corresponding period ended March 28, 2014.
Rig Count Drops For 17th Week With Smallest Decline Of 2015 -- Crude prices are undecided how to react to this week's 20 rig decline in total rig count to 1028. This is the 17th weekly decline in a row (down over 46% from the highs) but the pace of declines is dropping rapidly as it appears the 'efficiency' has been wrung out for now.
U.S. oil rig count cull eases, approaches low point (Reuters) - Two weeks of thin declines in the U.S. rig count have raised expectations that drilling activity is nearing a pivotal level that could dent production, bolster prices and coax idle rigs back to the field after a precipitous cull since October. Energy producers responded quickly to a steep drop in oil prices over the last six months, idling nearly 800 rigs, or 50 percent, since a peak of 1,609 rigs in October. In the last week of January, rigs fell by 94, the biggest drop on record, according to a weekly survey by oil service firm Baker Hughes. [RIG/U] U.S. companies remain nervous about oil prices. Spending has been cut as prices fail to rebound significantly, and further price drops could quickly lead to more shrinkage in the rig count. But the decline has slowed, dropping by just 23 rigs in the last two weeks, the smallest weekly cuts since December, according to the latest survey released on Thursday, a sign that the rig count could be approaching its low point. Some reckon that a 50-60 percent drop is as far as it will fall, once energy firms remove their least efficient rigs. According to Baker Hughes, oil rigs in the Permian Basin of Texas, one of the country's largest oil deposits, fell this week to 280, the lowest level since basin-by-basin records began in early 2011 and down from over 560 in November. In the Williston Basin of North Dakota, oil rigs are at 91, also the lowest since 2011, down from nearly 200 in November
Shell to resume drilling off Alaska coast – Royal Dutch Shell will resume drilling off Alaska after suspending operations for two years in the wake of an accident, the special U.S. envoy to the Arctic said on Monday, but gave no details as to when. Shell has been moving oil rigs to Alaska as it awaits the green light from U.S. authorities. It froze operations in 2013 after the grounding of a rig in Alaska prompted protests from environmental groups. “Clearly Shell and others will resume drilling and exploration up off the North Slope of Alaska,” Admiral Robert Papp said in an interview during a visit to Canada. Papp, noting the accident had happened in December 2012 after that year’s drilling season had ended, said the Anglo-Dutch oil major understood the importance of taking all the necessary precautions. “I think Shell is putting significant resources into this to make sure they have enough people, equipment, resources, redundancy. They should be OK,” he said. Any company operating in the Arctic had to follow U.S. Department of the Interior rules on safety, preparation, extra equipment and additional drill rigs, Papp said, adding they had to be capable of drilling a relief well if necessary. The Arctic is estimated to contain 20 percent of the world’s undiscovered hydrocarbon resources, although the reserves are extremely remote and costly to develop.
Oil Council foresees the end of fracking, proposes the worst possible alternative - Oil Council foresees the end of fracking, proposes the worst possible alternative - Salon.com: Breaking news, via the National Petroleum Council: the United States’ vast reserves of oil and natural gas are going to run out. Nothing good can last, says the largely industry-based advisory group to the Department of Energy, not even something as good as fracking — which is why the council recommends we start drilling in the Arctic as soon as possible. The NPC’s report, released Friday, would almost be funny if it weren’t so frustrating. Natural gas from fracking, remember, is supposed to be a “bridge fuel”: a less harmful fossil fuel that can tide us over while we transition to a truly clean energy economy. The oil and gas industry, this report makes clear, never intended for that to be the case. Citing the prediction that the U.S. shale boom likely won’t last beyond the next decade, it argues that the next best course of action is to pursue more oil, which also happens to be located in one of the riskiest possible places. “There will come a time when all the resources that are supplying the world’s economies today are going to go in decline,” Rex Tillerson, CEO of Exxon Mobil and chairman of the study’s committee, told the Associated Press. “This is will be what’s needed next. If we start today it’ll take 20, 30, 40 years for those to come on.” To reiterate, he’s envisioning a future, decades down the line, when we’re still dependent on fossil fuels. Never mind that to prevent global warming beyond the already dangerous 2 degrees Celsius, scientists warn that most of the world’s remaining fossil fuels must remain in the ground, including 100 percent of those currently buried in the Arctic, or that the U.N.’s Intergovernmental Panel on Climate Change found we need to be moving toward zero greenhouse gas emissions by the end of this century.
Fracking Bridge to Future Collapses! - The National Petroleum Council has just admitted why shale fracking is just a “bridge” to more fracking – in the Artic. What about all those Shale Blonde TV Ads about a “bridge the future” ? It was all fracking bullshit. Surprise. The National Petroleum Council recommends we start drilling in the Arctic as soon as possible. Just like shale gas, Arctic oil isn’t going to last forever. U.S. territory holds an estimated 35 billion barrels of oil — ‘about 5 years worth of U.S. consumption and 15 years of U.S. imports. All told, it’s a lot of money, risk and effort for very little, when we could be investing instead in clean forms of energy that, once they’re in place, will never, ever run out. — From “Oil Council foresees the end of fracking, proposes the worst possible alternative: Shale gas was supposed to be a bridge fuel. Yet next, a DOE advisory group wants us to start drilling in the Arctic,” http://www.salon.com/2015/03/27/oil_council_foresees_the_end_of_fracking_proposes_the_worst_possible_alternative/
Oil sands outlook - On Friday I visited the University of Alberta in Edmonton, where falling oil prices have brought a record provincial budget deficit despite aggressive tax increases and spending cuts. Here I pass along some of what I learned about how the plunge in oil prices is affecting Alberta’s oil sands operations. A couple of factors have cushioned Canadian oil producers slightly from the collapse in oil prices in the U.S. First, while the dollar price of West Texas Intermediate has fallen 45% since June, the Canadian dollar depreciated against the U.S. dollar by 18% over the same period, and now stands at CAD $1.26 per U.S. dollar. Since the costs of the oil sands producers are denominated in Canadian dollars, the currency depreciation is an important offset. There has also been some narrowing of the spread between synthetic and other crudes. As a result of these factors, the University of Alberta’s Andrew Leach calculated that when WTI was selling for US $50 a barrel, Canadian producers were receiving CAD $60 per barrel of synthetic crude. Oil sands and U.S. tight oil production have been the world’s primary marginal oil producers in recent years, by which I mean the key source to which the world could turn in order to get an additional barrel of oil produced. Ultimately in this regime it is the long-run marginal cost of the most costly producing operation that puts a floor under the price of oil. A company with sunk fixed costs will continue to produce even if price is below long-run marginal cost as long as cash flow is greater than current operating expenses. But for anybody considering a new project, the up-front capital costs and required rate of return have to be factored into new decisions. A project won’t be started if price is below the long-run marginal cost.
The Keystone XL Pipeline Company Just Delayed Its Other Huge Tar Sands Pipeline -- Pipeline company TransCanada is canceling its plans to build an oil export terminal in Quebec, a move that the company says will postpone the start of its proposed Energy East pipeline for more than a year. TransCanada announced Thursday that, due to concerns about the safety of beluga whale populations in the St. Lawrence River, it won’t building marine and tank terminals in Cacouna, Quebec. Cacouna borders the St. Lawrence. The company said in a statement that it is looking at other options for export sites in Quebec for the Energy East, a pipeline that would carry tar sands oil more than 2,850 miles from Hardisty, Alberta east to Saint John, New Brunswick. TransCanada had planned two export terminals for the project: one in Cacouna and one in Saint John. Because of the change in plans, TransCanada says the pipeline now has a projected start date of early 2020, rather than late 2018. TransCanada previously halted work on the Cacouna terminal in December, after the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) recommended that the population of beluga whales in the St. Lawrence River be labelled endangered. At the time, TransCanada said it was looking into what impacts Energy East would have on the belugas, and was reviewing “all viable options.” Now, the company says it’s been swayed to scrap plans for the terminal completely. “This decision is the result of the recommended change in status of the Beluga whales to endangered and ongoing discussions we have had with communities and key stakeholders,”
With First Nationwide Fracking Law, Germany Approaches A Ban -- On Wednesday, the German cabinet approved the country’s first nationwide fracking law, which would set the “strictest conditions for fracking” according to Environment Minister Barbara Hendricks. The law, which now heads to parliament for debate, would ban fracking in specified regions “to protect drinking water, health and the environment,” according to the environment and energy ministries. The draft law would ban the use of hydraulic fracturing for drilling processes that are shallower than 3,000 meters, or almost 10,000 feet, and any fracking in nature reserves or national parks. “This law will enable us to circumscribe fracking so that it no longer represents a danger to people or the environment. As long as the risks cannot be fully evaluated, fracking will be banned,” Hendricks said. The law, which would be in place for around four years, would allow fracking in certain cases for scientific research as well as exceptional commercial operations that pass a drilling test and get special approval from a committee. Natural gas in Germany is used mainly for heating, making it harder to replace with renewable sources of energy. Right now Germany gets more than a third of its gas supply from Russia. Last year only 12 percent of the country’s demand was covered by its own supply.
Scotland Pulling Out All The Stops To Save North Sea Oil & Gas - Scotland’s oil sector has been severely damaged by the 9-month-old plunge in oil prices. Included in that damage are extensive layoffs. For example, Royal Dutch Shell, one of the largest oil companies operating in Britain, announced March 26 that it will eliminate 250 staff and contract positions, and Abu Dhabi’s Taqa will drop about one-fifth of its 500 member North Sea work force. George Osborne, Britain’s Chancellor of the Exchequer, had hoped to stimulate the North Sea energy economy and avert layoffs with “bold and immediate measures” in its 2015 budget that included a reduction in tax revenue from the region’s oil from 50 percent to 30 percent. That, however, evidently wasn’t enough. Paul Goodfellow, Shell’s vice president for exploration and drilling for Britain and Ireland, praised Osborne’s effort as “a step in the right direction,” but said it’s up to energy companies themselves to improve profitability through cost-cutting and other measures if they want to attract investors. There's an incredible energy development we've been keeping track of for you over the past year... It's the reason Saudi Arabia is acting in desperation... depressing oil prices... and even risking internal unrest. Their (and OPEC’s) very survival is being threatened. And we believe we’ve put together an incredible video revealing how it works. Despite the recent slump in the North Sea oil sector, sales by Scottish oil companies were nearly $33 billion in 2013, up 11 percent over 2012. And the leading customer for foreign oil remained North America, whose imports totaled $6 billion in 2013, up by more than one-third over the previous year.
Mexican oil rig burns off coast, 4 dead, 16 injured — A fire at a shallow-water oil platform in the Gulf of Mexico has killed four workers, injured 16 and forced the evacuation of 300, Mexico’s state-owned oil company said Wednesday. Petroleos Mexicanos, or Pemex, said on its Twitter account that the death toll had risen from one to four. In an earlier statement, the company said that two of the injured workers were in serious condition. The fire broke out Wednesday at the Abkatun Permanente platform. Pemex said eight firefighting boats were trying to extinguish the flames. It was unclear whether any significant amount of oil had spilled into the Gulf. In related news, Mexico extinguishes pipeline fire caused by illegal tap. Mexico’s Energy Security Agency said the injured were being treated at a hospital in Campeche, adding that the blaze “is being extinguished.” The Abkatun platform is located in the Campeche Sound, near the coast of the states of Campeche and Tabasco. It is further out to sea than the platform involved in the last severe fire in the area, the 2007 fire at the Kab 121 offshore rig. That accident killed at least 21 workers and the rig spilled crude and natural gas for almost two months. Mexico’s worst major spill in the Gulf was in June 1979, when an offshore drilling rig in Mexican waters — the Ixtoc I — blew up, releasing 140 million gallons of oil. It took Pemex and a series of U.S. contractors nearly nine months to cap the well, and a great deal of the oil contaminated Mexican and U.S. waters.
Explosion and fire on an oil platform in Gulf of Mexico — 4 dead and dozens hurt - Mexican state-run oil company Pemex said at least four people died after a fire broke out on a production platform in the Gulf of Mexico early on Wednesday, sparking the evacuation of around 300 workers. Local emergency services said as many as 45 people were injured in the blaze, which erupted overnight on the Abkatun Permanente platform in the oil-rich Bay of Campeche. Pemex said it was battling the flames with eight firefighting boats and that a contractor for Mexican oil services company Cotemar was one of the dead. The fire broke out in the dehydration and pumping area of the platform, Pemex said, though it was not clear what caused it. A Pemex spokesman could not immediately say whether local oil production had been affected. A spokesman for emergency services in the nearby city of Ciudad del Carmen said earlier that authorities had registered 45 people with injuries from the fire. Other officials put the total at around 16 injured. The platform forms part of the Abkatun-Pol-Chuc offshore complex. According to data from the U.S. Energy Information Administration, production at the complex has fallen steadily since the 1990s to below 300,000 barrels per day (bpd) in 2013.
Mexico says oil spill avoided after deadly offshore blaze - — A huge blaze twisted and blackened an oil platform in the Gulf of Mexico, but the state-run Pemex oil company said it managed to avert any significant oil spill. At least four workers died and two suffered life-threatening injuries in an explosion that engulfed the platform in flames Wednesday, forcing 300 people to abandon the facility. Officials said environmental damage was avoided because the fire happened on a processing platform where the feeder lines could be turned off, rather than at an active oil well with a virtually unlimited amount of fuel flowing up from the seabed. In a statement Wednesday night, Pemex said the accident “did not cause an oil spill into the sea, given that there was only a seepage, which is being taken care of by specialized vessels.” It suggested the oil remaining in the pipelines was burning off. The company’s official Twitter account announced late Wednesday that fire had been extinguished after hours of being showered with water sprayed from 10 firefighting and emergency boats. Pemex Director General Emilio Lozoya said the accident “would have a minimal impact on production, because this was a processing platform,” not a producing well. Production from nearby wells it normally serves could be rerouted to other processing platforms.
Massive Fire Engulfs Fuel Tanks At Latin America's Largest Port -- Earlier today, there was some good news for Brazil's largest energy major Petrobras when as we reported earlier, none other than China through its CDB, agreed to lend $3.5 billion to the foundering energy giant. That was quickly offset by bad news later in the day when a massive fire broke out at a fuel tank storage facility in Brazil’s port of Santos, Latin America’s largest, forcing some eighty firefighters to battle a raging inferno which consumed facilities located next to Norway’s Stolt-Nielsen Ltd and Transpetro, a subsidiary of state-run oil company Petrobras.
Production Cut Sparks Crude Rally As Inventory Rise Reaches Longest Streak On Record -- Following last night's pump'n'dump after API inventories exceeded expectations (5.2mm vs 4.2mm exp.), WTI crude prices have dropped to almost a $46 handle and recovered as chatter of "no deal" from Switzerland picks up. DOE reports a 4.766mm barrel build, greater than expected, for the 12th week in a row - the longest streak since records began in 1982. Crude prices are however surging as production dropped wekk-over-week for only the 2nd time this year...
What If An Oil Rebound Never Comes? - Oil prices will remain subdued for the next 20 years. That comes from a new policy brief from Stanford economist Frank Wolak, who says that a series of phenomena – surging U.S. shale production, a weakening OPEC, the shale revolution spreading globally, efficiencies in drilling, and more natural gas substitution for oil – will combine to prevent oil prices from rising above $100 per barrel anytime soon. Wolak correctly identifies several trends that are already underway, several of which contributed to the 2014-2015 oil bust. But there are very good reasons as to why the notion that oil prices will not rebound and instead stay in a moderate band of $50 to $60 per barrel over the next 20 years, as Wolak suggests, is a bit optimistic (or pessimistic, depending on your point of view). Wolak does offer some caveats for why his scenario for tepid oil prices may not play out, but they are treated more as outside risks rather than real possibilities. Let’s examine some of his points. First is the argument that shale production has truly upended global supplies. Citing a 5 million barrel-per-day increase from North America – 4 million from U.S. shale and 1 million from Canada’s tar sands – Wolak wisely notes the role that shale has played in causing oil prices to crash over the past year. But the shale boom will likely be temporary. Most estimates project that U.S. shale will begin to fizzle after the next five years or so. The IEA in its 2014 World Energy Outlook said that U.S. shale will peak and then decline in the early 2020’s. Some think it could happen even sooner.
OPEC oil output hits highest since October on Iraq, Saudi – OPEC oil supply has jumped in March to its highest since October as Iraq’s exports rebounded after bad weather and Saudi Arabia pumped at close to record rates, a Reuters survey found, a sign key members are sticking to their effort to regain market share. The increase from the Organization of the Petroleum Exporting Countries adds to excess supply in the market, despite some signs that the halving of crude prices since June 2014 is encouraging higher oil demand. OPEC supply has risen in March to 30.63 million barrels per day (bpd) from a revised 30.07 million bpd in February, according to the survey based on shipping data and information from sources at oil companies, OPEC and consultants. “Demand might be a bit stronger than expected at the beginning of the year, but I don’t think it is strong enough to absorb the entire oversupply,” said Carsten Fritsch, an analyst at Commerzbank in Frankfurt. “There’s still oversupply in the market, which is reflected in the inventory builds.” Besides Saudi Arabia, the main reasons for the rise are the resolution of involuntary outages – Iraq lifted exports due to improved weather and Libya managed to nudge production higher despite unrest. If the total remains unrevised at 30.63 million bpd, March’s supply would be OPEC’s highest since 30.64 million bpd in October 2014, based on Reuters surveys. Saudi Arabia was the driving force behind OPEC’s refusal last year to prop up prices by cutting its output target of 30 million bpd, in a bid to discourage more costly rival supplies. The group holds its next meeting in June, and comments from OPEC officials suggest it will not alter the policy.
Ahoy! Oil Tankers Form Four-Mile Line In Persian Gulf As Iran Talks Stoke Supply Glut Fears - Interesting times lay ahead for crude which, in a likely preview of what’s to come, traded in “deal or no deal” mode throughout Thursday’s session. With Tehran sitting on 9% of the world’s proven reserves, the lifting of sanctions and opening of the country’s oil fields to foreign investment could trigger a dramatic decline in crude prices as an extra million bpd gets set to be unleashed on an already saturated market. Meanwhile, crude exports from from Iraq are hitting three-and-a-half decade highs while production, at 3.7 million bpd, is humming along at a 50-year high despite the ISIS presence in the country. As Bloomberg reports, 5% of the world’s VLCC fleet is currently parked in the Persian Gulf outside the Basra Oil Terminal, where tankers are now waiting an average of 16 days driving shipping rates to multi-year highs in the process. Here’s more:Iraq’s biggest oil exports in more than three decades and winter winds are helping to keep shipping rates at a six-year high as a four-mile line of supertankers waits to load the nation’s crude.There are 22 of the industry’s biggest tankers, or almost 5 percent of the fleet, waiting to collect cargoes from the Basra Oil Terminal in the Persian Gulf, from where most of Iraq’s crude is shipped. The daily rate for supertankers transporting crude from the Middle East to Japan rose to $51,042 on Thursday, bringing the average for this year to $61,306, data from the Baltic Exchange in London show. Iraq’s oil output is rising faster than any other nation in OPEC as supplies from its southern oil province expand even as Islamic State fighters seize parts of the north.
First Saudi Sovereign Debt Since ’07 Seen This Year as Oil Bites - - Saudi Arabia may issue sovereign debt for the first time since 2007 this year after oil’s decline sent its cash reserves plunging, according to Ashmore Group Plc. Assets of the biggest Arab economy’s central bank tumbled by 76 billion riyals ($20 billion) in February, the largest monthly drop since at least 2000. The country has a debt-to-GDP ratio of about 2.6 percent, according to International Monetary Fund estimates, among the lowest in the world, and may now take advantage of record low interest rates and ample bank liquidity, said John Sfakianakis, a Riyadh-based director at Ashmore and former chief economic adviser to Saudi’s Ministry of Finance. “If oil prices remain at $55 to $60 a barrel, I would expect them to issue some debt in the second half,” Sfakianakis said by phone March 31. “They will tap the local debt market through medium-term paper, which would be a balanced fiscal approach, to partly use reserves and partly the debt markets.” The world’s biggest oil exporter hasn’t issued debt with a maturity of more than 12 months for eight years, choosing instead to run down reserves when necessary to fund expenditure. Saudi Arabia has vowed to maintain spending on its major projects, including railroads, power stations, desalination plants and universities, even after oil prices dropped by half in the past nine months.
Arab Airstrikes Against Yemen Reportedly Could Continue For Months - Yemeni President Abed Rabbo Mansour Hadi described Shiite Houthi rebels who have occupied parts of the country, including the capital, Sanaa, as "puppets of Iran."The remarks by Hadi, who was forced to flee Yemen amid the rebel onslaught, come as a Gulf diplomatic official quoted by news agencies says that Arab nations allied against the Houthis could continue their airstrikes against the Shiite militia for months.At an Arab League summit held in Egypt, Hadi left no doubt that he believed the Houthis were being controlled by Tehran: "I say to the puppets of Iran and its toys: ... You've destroyed Yemen."The Associated Press says that other leaders at the summit, "including the leaders of Egypt, Saudi Arabia and Kuwait, obliquely referenced Iran earlier at the summit held in Egypt's Red Sea resort of Sharm el-Sheikh. They blamed the Persian country for meddling in the affairs of Arab nations, with Egyptian President Abdel-Fattah el-Sissi saying, without mentioning Iran by name, that it was 'spreading its ailment in the body.'""This (Arab) nation, in its darkest hour, had never been faced a challenge to its existence and a threat to its identity like the one it's facing now," Egyptian President Abdel Fattah el-Sissi said. "This threatens our national security and (we) cannot ignore its consequences for the Arab identity."
Saudi oil infrastructure at risk as Mid-East conflagration spreads -- Saudi Arabia’s escalating intervention in Yemen is a high-stakes gamble that risks back-firing in a series of complex ways, ultimately endangering Saudi oil infrastructure and the security of global energy supply. Military analysts say there is little chance that air strikes by a Saudi-led coalition of Sunni countries will subjugate the Iranian-backed Houthi forces in Yemen. It may require a full-blown invasion by land forces to secure control. Large concentrations of Saudi armour and artillery are already massing near the border, though this may simply be a negotiating ploy. The longer the conflict goes on, the greater the risks that it will stir up internal hatred in a country that has traditionally been relatively free of sectarian violence. Adam Baron, from the European Council on Foreign Relations, said the inflammatory comments about the Sunni-Shia struggle by politicians across the region are becoming “self-fulfilling prophecies”. Al-Qaeda in the Arabian Peninsular (AQAP) – thought to be the most lethal of the jihadi franchises, and a redoubt for Saudi jihadis – already controls a swathe of central Yemen and is the chief beneficiary of the power vacuum. AQAP can plan terrorist strikes against Saudi targets from a deepening strategic hinterland with increasing impunity. All US military advisers have been withdrawn from Yemen, and much of the country’s counter-terror apparatus is disintegrating. It is becoming harder to harry al-Qaeda cells or carry out drone strikes with precision. The great unknown is whether a protracted Saudi war against Shia forces in Yemen – and possibly a “Vietnam-style” quagmire – might tug at the delicate political fabric within Saudi Arabia itself. The kingdom’s giant Ghawar oil field lies in the Eastern Province, home to an aggrieved Shia minority. “If the Saudis continue this war – and if they keep killing civilians – this is going to create internal instability in Saudi Arabia itself,” said Ali al-Ahmed, from the Institute for Gulf Affairs in Washington.
U.N. Warns of ‘Total Collapse’ in Yemen as Houthis Continue Offensive - The United Nations’ human rights chief warned on Tuesday that Yemen was on the brink of collapse, as health officials in the southern port city of Aden described a medical system failing after weeks of urban warfare that had left scores dead and hospitals overflowing with bodies.The warning from the human rights chief, Zeid Ra’ad al-Hussein, came as a Saudi-led military offensive against the Houthis, a militia group from northern Yemen that Saudi officials have accused of serving as a proxy force for Iran, threatened to burst into a broader conflict.The Houthis, acknowledging their alliance with Iran but denying acting on its orders, have been able to extend their offensive despite intensifying airstrikes by Saudi warplanes across Yemen. There have been few signs that the battle, which began last Wednesday, is shifting decisively in favor of any of the combatants, raising fears of a lengthy war that is expanding the destabilizing regional conflict between the Persian Gulf monarchies and Iran. With Yemen under blockade from air and sea by the Saudi-led coalition, aid agencies intensified their warnings on Tuesday about the toll on civilians and hospitals, which are running critically low on medical supplies.
No comments:
Post a Comment