"We are about to be so screwed it defies the imagination." -- Tenney Naumer, "Climate Change: The Next Generation"
the entire package of trade bills, including the "fast-track" trade authority that will allow unamendable treaties to be signed for the next 6 years, passed Congress in pretty much the manner we speculated they would when we discussed them last week...on Tuesday, 13 Democrats teamed with 47 Republicans to cut off debate on the stand alone fast track bill that had passed the House on Thursday of last week, which precluded any filibuster and made way for final passage of the same bill on Wednesday by a 60 to 38 vote...at the same time they passed a renewal of the African Growth and Opportunity Act (AGOA) paired with Trade Adjustment Assistance (TAA).for displaced workers by a voice vote after it had earlier passed a cloture vote by a 76-22 count...then that same TAA bill, which had been defeated in the House by a 302 to 126 vote two weeks ago, passed the House by a 286-138 vote after Democratic leader Pelosi withdrew her opposition to it since the House Democrats no longer had anything to gain from holding it back...
with Trade Promotion Authority now in place, we'll probably see easy passage of the Trans-Pacific Partnership (TPP) between the US, Japan, and the other Pacific rim countries later this year, probably followed by the Transatlantic Trade and Investment Partnership (TTIP) with the European Union, and the Trade in Services Agreement (TiSA) with a total of 51 countries worldwide, maybe sometime in 2016...after that, what the corporations cook up and push through during the first term of the Jeb Bush administration should bring the entire planet under the corporate-written rules, which will trump the laws of the signatory nations...my most recent rant about these trade deals is here; there's no point in warning about them again, now that they've been given the green light....in terms of how these deals will affect the fracking that is the concern of this group, the first two of these agreements will effectively mandate exports of our oil and gas resources to the signatory nations and therefore the initial signings will unleash a new torrent of oil & gas fracking activity to meet that demand, as US producers ramp up production to take advantage of higher gas and oil prices overseas; subsequently, those exports will reduce our domestic supply and correspondingly drive US energy prices up to the levels of the rest of the world...for example, as of the end of this week, import prices of LNG in Japan were $12.13 mmBTU, while the contract US natural gas price was $2.77 mmBTU; with the trade deal between the two in place, US producers will export to Japan rather than sell to US customers until those prices, allowing for processing and shipping costs, nearly equalize...
in the current oil & gas patch news, the past week saw the first increase since December 5th in the total number of rigs operating in the US, even though the number of oil rigs in service fell for the 29th week in a row...the rig count as reported by Baker Hughes increased by 2 to 859 rigs after dropping by 2 last week, with oil rigs down by 3 to 628 while gas rigs were up by 5 to 228 and miscellaneous rigs were unchanged at 3; those counts were down from 1558 oil rigs and 334 gas rigs a year ago, while the miscellaneous rig count rose from 1 a year ago...even with the increase, the week still saw a shift away from costly horizontal drilling, as rigs working in the major shale plays fell by 10, with the horizontal rig total falling by 8 to 654, while 7 vertical and 3 directional rigs were added, bringing the count of those types of rigs up to 107 and 98 respectively..land based rigs fell by 1 to 824, while 2 rigs were added on inland waters and one drilling rig in the Gulf of Mexico was reactivated...
the increase in rigs was concentrated in Louisiana, where drillers added 6 rigs, including the 3 on water, to bring the state total to 75; while 2 rigs were added in Mississippi, which now has 3...single rigs were also added in West Virginia, which now has 20 working, Alaska, which now has 10, and New Mexico, where 44 rigs are operating...meanwhile, drillers in Ohio shut down 3 rigs, leaving 17 running, as did drillers in North Dakota, where 74 remain...two more rigs were also stacked in Texas, where they still have 361, but which is down from 889 a year ago, and a single rig was shut down in Illinois, which is back down to 2....these changes cut the rigs in the Utica shale by 3 to 19, down from 43 a year ago, reduced the Bakken shale rigs by 3 to 74, down from 178 last year, cut the Permian basin rigs by 2 to 231, down from 554, cut the Mississippian rigs by 2 to 20, down from 77 a year ago, reduced the Granite Wash rigs by 2 to 14, down from 72 a year ago, and cut one each from the Barnett and Eagle Ford shale plays, bringing the count in those basins down to 5 and 103 respectively, down from 25 and 214 respectively a year ago...meanwhile, single rigs were added in the Haynesville shale of Louisiana, where they now have 27, down from 41 a year ago, in the Marcellus, which now has 65, vs 82 a year ago, and in the Cana Woodford of Oklahoma, where they now have 33, up from 26 a year ago, as two of the three Woodford shale plays are the only basins that have seen a year over year increases in drilling rigs...
since we haven't looked at a picture of the historical track of the oil rig count in quite a while, we'll include a current version below, which comes from Friday's article on this week's rig count at the Business Insider...you'll note that the US oil rig count was below 200 for more than 3 years until horizontal drilling & fracking started taking off in 2005, and subsequently rose to over 400 in late 2008 before the recession hit, at which time oil crashed to $35 a barrel and more than half of the rigs running then were stacked...the oil rig count then began rising again in 2009 to top 1400 in 2012 and then moved up gradually until it peaked at 1609 on October 10th of last year...as you can see, it's been all downhill from there...now we're nearly at a 5 year low; we'd have to go back to August 6, 2010 to find a week when less rigs were running than the 628 that were working on June 26th of this year...(btw, natural gas rigs peaked at 1,606 on August 29, 2008, after natural gas prices spiked to over $13 mmBTU, but i haven't seen a chart for that rig count crash)
meanwhile, US field production of crude oil rose during the third week in June to an average of 9,604,000 barrels per day, up from 9,589,000 barrels a day last week but short of the record pace of 9,610,000 barrels per day we saw in the first week of June; however, that was still 13.7% higher than the 8,446 ,000 barrel per day of field crude production seen in the third week of June last year...meanwhile our imports of crude oil fell by 302,000 barrels per day to 6,623,000 barrels a day in this report, after rising 444,000 barrels per day last week; while that's down 7.8% from the same week last year, weekly crude imports are so volatile that we check the weekly Petroleum Status Report (62 pp pdf) for the 4 week average, which at an average of roughly 7,000,000 barrels a day, leaves our imports 3.5% below the same 4 week period last year...with US refineries operating at a summertime 94.0% of capacity last week, gasoline production rose by 283,000 barrels per day to 9,934,000 barrels per day and our inventories of crude oil (excluding the strategic reserve) dropped for the 8th week in a row, falling by 4,934,000 barrels and leaving ending stocks 1.1% lower at 462,993,000 barrels as of June 19th; however, that's still 19.3% more oil than we had stored in the same week a year ago, and still near levels not seen at this time of year in at least the past 80 years...and as those inventories of crude are being drawn down, inventories of refined products are rising...in this most recent week, total motor gasoline inventories increased by 0.7 million barrels and are near the top of their normal range, distillate fuel inventories increased by 1.8 million barrels and are near their seasonal average and propane/propylene inventories rose 1.3 million barrels last week and are well above the upper limit of their average range..
The EPA's report on fracking has been given a positive spin by much of the media - Crain's Cleveland Business - Recently, The Plain Dealer published an article regarding the release of EPA’s draft assessment report on the impact of hydraulic fracturing on the water supply. The article originally appeared under the headline, “EPA finds fracking no threat to water.” Unfortunately, that headline left faithful PD readers with the misimpression that the EPA found hydraulic fracturing safe for our water supply. (Note: The PD later updated its headline to say “EPA study finds fracking causes no extensive pollution to groundwater; environmental groups disagree.” This is better, but still not great.) The PD was not alone. News sources of all kinds used similarly misleading headlines. “Draft EPA Study Finds Fracking Has Not Led to Widespread Drinking Water Contamination,” proclaimed The National Review, “EPA Finds No Widespread Drinking Water Pollution From Fracking” said National Public Radio, while NBC news reported: “EPA says fracking has no widespread impact on drinking water.” The problem with these headlines is that the EPA’s draft report is far more nuanced. The EPA considered five major issues pertaining to the integrity of the water supply. First, it looked at water acquisition — where the oil and gas industry gets the enormous quantities of water it uses to fracture oil and gas wells. Second, it looked at the content of that water — that is, it looked at the chemical content of the water-based fluid producers inject into oil and gas wells to cause them to fracture and release the oil and gas within. That fluid is not just water. It’s water, mixed with chemicals and proppants — like sand. Third, the agency considered the impact of the injection of these fluids into the oil/gas wells to fracture the rock from which oil and/or gas will emerge. Fourth, it studied flowback and produced water. Flowback is the liquid that comes back up through the well after it has been fractured. Produced water is brackish, meaning salty, and it’s commonly contaminated with naturally occurring radioactive materials. Accordingly, its safe disposal is complicated and costly. Finally, the report assessed what industry does with this produced and flowback water after the hydraulic fracturing is completed and the well is producing.
House Bill 8 represents best interests of 'Big Oil' -- Emboldened by recent victories in the courts, supporters of Big Oil in the state legislature are now trying to pass House Bill 8. This bill will make it easier to neutralize local opposition to fracking. Ironically, it is easier to get an ODNR permit for a new gas well than it is to get a color change for window shutters through local zoning in many historic districts. This has been a setback for residents against both drilling and an ODNR permitting process that rejects local participation. Since 2004, a number of towns have leased their own parks and playgrounds to oil companies. Some municipalities, like Highland Heights, have had second thoughts. They terminated their gas well leases but not without paying a settlement reported to be in excess of $600,000. Current state laws on "mandatory pooling" and "unitization" work like this: you need approximately 540 acres for three horizontal wells. A group of farmers could lease their properties to create a drilling unit of 360 acres. Another group of farmers have 180 acres, but are not interested in leasing. The majority owners of the 360 acres could apply to ODNR to "unitize" the minority owners of the 180 acres, to complete the 540 acre "drilling unit" necessary to drill. ODNR usually grants these unitizing requests. HB 8 will add a new dynamic to thwart those local governments or local residents resisting unitization. It requires that "political subdivisions of the state," add their acreage to the acreage of any adjacent majority owner who is seeking approval from the ODNR Chief to unitize a minority of others. This includes the land owned by political subdivisions such as counties, cities, towns, and villages. HB 8 has only one exception, the State Parks, at the request of Governor Kasich. In State Forests, horizontal drilling below the surface would be allowed, however surface disturbance would not. The entire Cleveland Metroparks system, which is not a state park, is at risk.
They're really serious about severance tax hike, maybe - Stop me if you've heard this before: A hard issue surfaces in the legislature, with many differing opinions on what should be done.The administration and senators and representatives are on different pages on the right course of action.Instead of working out a compromise, the sides bicker and offer varying plans that won't have enough support for final passage.In the end, a study commission or task force or working group or some other like-named panel is formed to study the problem and offer recommendations.Those recommendations are issued in a report that ends up on a shelf gathering dust until the next go-round, and the cycle repeats.A cynic would say that's the latest status of a push to increase the tax rate on oil and gas produced via horizontal hydraulic fracturing, or fracking.Gov. John Kasich initially proposed a severance tax increase more than three years ago, saying out-of-state producers shouldn't be allowed to take Ohio's precious natural resources without paying a little more for the privilege.Lawmakers have been balking at the suggestion ever since, pulling it from Kasich's mid-biennium budget reviews and biennial budget bills, with little indication that the different sides were working toward a meaningful compromise.And, so, the debate has continued along the same lines.
GOP axes John Kasich's oil, gas tax from budget - – Republican lawmakers say they won’t add a tax on oil and gas obtained through fracking into the state budget as Gov. John Kasich asked. In February, Kasich asked for a 6.5 percent tax on oil and gas at the fracking well head and 4.5 percent tax on natural gas and liquids obtained downstream. That was higher than the 2.75 percent tax the governor suggested last year. Twenty percent of the tax revenue would have gone to counties with wells and the rest would have helped pay for an income tax cut. House Republicans stripped the fracking tax from their version of the state’s two-year budget. Kasich, who is fundraising for a potential presidential bid, complained through a spokesman about the alternate tax plans offered by fellow Republicans, saying they could dismantle Ohio’s recovery. On Tuesday, Ohio Senate President Keith Faber, R-Celina, and House Speaker Cliff Rosenberger, R-Clarksville, said they will not add a tax to the two-year state budget, which the Senate plans to vote on this week. Both said there wasn’t enough time to agree on a fracking tax before the June 30 deadline for passing the budget.Instead, they created a task force with lawmakers and members of the Kasich administration to discuss options, which likely would include a fracking tax hike. A report from the task force would be due Oct. 1. Ohio currently taxes the industry at 20 cents per barrel of oil — one of the lowest taxes in the country.
Athens County likely to become No. 1 chemical frackwaste acceptor in Ohio - A brine injection well recently permitted to Troy Township will likely make Athens County the largest acceptor of chemical-laden fracking waste in Ohio. The well, owned by K&H Partners, was permitted by the Ohio Department of Natural Resources on March 18 to accept as many as 12,000 barrels of brine per day from a steady flow of tractor-trailers travelling down U.S. Route 50. The Athens County Fracking Action Network took legal action against ODNR Tuesday, citing sizeable human health concerns for air and water quality and demanding a retraction of the permit. “There is something really wrong with a system that forces an economically disadvantaged area for the economic gain of a handful of people while threatening what is a growing local food tourism and renewables industry,” said Crissa Cummings, a local activist who chained herself to the K&H gate last June to protest the safety of the wells. “The fact that our local community has no say in the decision making is a serious problem.” Brine is a byproduct of the fracking process, where two to five million gallons of chemicals and sand are combined with water and shot underground to crack shale layers and access the oil and gas below. Much of that combined fluid rebounds after the oil is extracted and must be disposed of before it becomes the brine that is injected into underground wells. ODNR is not required by law to monitor the long-term structural safety of these wells or the surrounding air quality. K&H owns two other injection wells in Troy, which accepted about 2.5 of the 2.9 million barrels of brine relocated into Athens County’s seven injection wells last year. The third well would increase that yearly total to 4.4 million barrels.
EPA fracking report draws local criticism - Local critics of a recent Environmental Protection Agency study on fracking are far from convinced of the study’s findings denouncing fracking’s effects on water. The EPA announced June 4 in the much-anticipated study that hydraulic fracturing, or fracking, does not cause “widespread, systemic” drinking water pollution. Heather Cantino, a member of the steering committee of Athens County Fracking Action Network, pointed out that while the study has led many to believe that there are no impacts on water from fracking, the EPA did not gather enough data to form such conclusions.She also pointed out that the agency did find mechanisms in fracking, both above and below ground, for impacts and instances in which the mechanisms did cause contamination.
Utica gets upgrades while drillers prepare for increased activity - After its fourth plant came online last month, Blue Racer Midstream LLC has plans for one more cryogenic processing plant in the Utica shale while drillers prepare themselves for increased drilling activity. According to Jack Lafield, chairman of Blue Racer, the company’s fifth plant was put on hold for about six months due to commodity prices being so low. Lafield explained how a lot of Blue Racer’s customers were forced to slow down. Therefore, the company was forced to pause its plans for the cryogenic processing plant. Latfield did say that by spring the plant will be necessary due to increasing well production. As reported by the Dallas Business Journal, “The cryogenic plant freezes natural gas, separating the methane from the ethane and other products. Blue Racer will have capacity to handle 1 billion cubic feet per day of natural gas once the fifth plant comes online in the first half of 2016. No location has been chosen yet.” While natural gas prices remain low, Lafield said drillers have become resourceful and have discovered ways to drive down the costs of drilling in the Utica. He expressed how he continues to be amazed by the innovations companies have come up with to reduce costs per well by 30 to 40 percent. The main goal now for pipeline companies is to stay ahead of producers that rely on them to deliver their oil and natural gas to markets.
Markwest Energy takes control in the Utica Shale - While several oil and gas operators have cut back on drilling, MarkWest Energy Partners LP hasn’t slowed down and continues to grow in the Utica Shale formation. Currently, MarkWest Energy has 18 projects underway in the Appalachian region that is home to the Marcellus and Utica Shale formations. The company focuses on operating pipelines, fractionation plants and other equipment associated with delivering and processing gas. MarkWest Energy is able to continue its expansion in the region thanks to its pipelines and related facilities having long-term agreements with oil and gas producers that have produced more oil and natural gas than existing infrastructure can handle.So far, MarkWest Energy has spent billions on projects in Ohio and neighboring states and has plans to spend even more. As reported by the Columbus Business First, “It’s finalizing three major Ohio plant expansions: a 60,000 barrel-a-day expansion of its Hopedale fractionation plant; adding a third plant with 200 million cubic feet a day of capacity to its cryogenic facility in Cadiz; and a fourth plant with 200 million cubic feet of extra capacity will be added to its Seneca processing complex in Noble County.” MarkWest Energy’s VP of Utica and Appalachia Operations David Ledonne explained that with current market conditions, the expansions would allow the company plenty of capacity to fulfill current needs.
Utica and Marcellus well activity in Ohio -- Activity in the Utica and Marcellus Shale formations in Ohio have seen some changes compared to the last the well activity update, and maybe it’s because one CEO believes natural gas prices may be on the rise. During his speech at the Hart Energy DUG East Conference in Pittsburgh, Pennsylvania, Eclipse Resources Corp. CEO Benjamin Hulburt said he expects natural gas prices to start increasing to the $3.50 to $4 range, but he doesn’t think prices will get much higher than that. Hulburt explained since there is still a large amount of gas, prices will not stay around $2.80, and that price is not an economical price for anyone to continue production. Hulburt also went on to say that his company, Eclipse Resources, was searching for potential financial partners but has not moved forward with any due to the company’s drilling advantage. He believes the company has the ability to drill faster and at a lower cost “in the deepest and highest pressure parts” of the Utica Shale in Ohio than any other operator, except Chesapeake Energy Corp. The following information is provided by the Ohio Department of Natural Resources (ODNR) and is through the week of June 20th. Activity in the Utica Shale formation in Ohio has caused a few slight changes in comparison to last week’s update. The ODNR reported 424 wells were permitted, 405 drilled, 906 producing, 25 inactive, 24 in final restoration and 3 abandoned. This brings the total number of wells in the Utica to 1,936. The Marcellus Shale in Ohio remains unchanged from last week’s well report. The area is still sitting at 15 wells permitted, 11 drilled and 16 wells producing. There are a total of 44 wells in the Ohio Marcellus Shale.
WVU project aims to monitor fracking process from start to finish -— A new West Virginia University research project to study the hydraulic fracturing process kicked off in Morgantown Friday, officials announced. The project — dubbed the Marcellus Shale Energy Environmental Laboratory (MSEEL) — will involve on-site monitoring of an active, producing natural gas well-pad. The five-year, $11 million project is a collaboration among WVU, the National Energy Technology Laboratory, The Ohio State University and Charleston-based Northeast Natural Energy — the company that will be drilling and operating the gas wells to be monitored. Brian Anderson, a professor of chemical engineering and the director of WVU’s Energy Institute, said the collaboration, by allowing direct monitoring of the natural gas extraction process from start to finish, is “absolutely, fundamentally different” from past research projects on the impact of the industry. “It will be an actual production site. Northeast Energy will be producing the gas,” Anderson said. “You have to do that if you want to understand what’s done during the drilling process.” The project site will have three wells drilled into the Marcellus Shale, Anderson said. Two of the wells will be natural gas wells. A third “science well” will be drilled in between the two producing wells, Anderson said. The science well will be dedicated to monitoring the subsurface during the drilling and fracturing process, he said. “What we actually will be doing is called microseismic monitoring that allows us to actually paint a picture of the fractures that happen during stimulation and where they go,” Anderson said. “We’ll get a really good picture of what’s going on in the subsurface.”
Without forced-pooling law, WV gas industry sues landowners to gain access - Krafft’s refusal to sign prompted Antero to file a lawsuit in Harrison County Circuit Court seeking to end her ownership in the tract of minerals. Without Krafft’s signature on a lease, the entire Marcellus Shale well that would be drilled through nearly 14 properties could be put on hold, delaying profits for Antero and the other property owners, who already had signed over their mineral rights. Krafft’s case is just one example of how the oil and gas industry has turned to West Virginia’s court system in the absence of a pooling law to force mineral owners to either sign leases or sell their property. In county courthouses throughout the north-central part of the state, gas companies have filed what are known as partition lawsuits, seeking court-ordered buyouts of partial mineral owners who have yet to sign a lease. In Doddridge and Harrison counties alone, Antero, one of the region’s largest gas producers, has filed nearly two-dozen lawsuits over the past two years. Lawyers who have worked on similar cases in the state say the lawsuits also have been used by other companies, like EQT Corp., in the state’s other Marcellus gas-producing counties. For the companies, the lawsuits are a necessary part of their effort to clean up the state’s fragmented mineral acreage, which often is split between dozens of shared owners, the result of property being passed down through generations, sometimes unknowingly. For the people who are sued, though, the litigation often is seen as an unfair process in which they are either compelled to sign a lease or watch as their property is sold to a gas company for whatever price the court determines is fair — often less than what can be made from the minerals once they are drilled.
What’s in your frac fluid? U.S. doctors want to know - Fuel Fix: — U.S. doctors want more information about the ingredients of the chemical compounds pumped underground during hydraulic fracturing operations at oil and gas wells nationwide. The chemical disclosure request came in the form of a policy plank adopted by the American Medical Association’s House of Delegates during the group’s annual meeting Tuesday. The AMA said in a statement that the group is concerned about the inability to effectively monitor and track the possible long-term public health and environmental changes associated with hydraulic fracturing. “Most states do not require drilling companies to publicly disclose what chemicals are injected into the ground during hydraulic fracturing,” said David Barbe, an AMA board member, in a statement. “The new AMA policy supports disclosure requirements to monitor any environmental exposure to tracking chemicals and advise or treat patients based on reliable information.” Under the newly adopted policy, the AMA also supports better government tracking of the chemicals used in oil and gas extraction. Hydraulic fracturing involves pumping sand, water and chemicals underground to open the pores of oil- and gas-bearing rock so those hydrocarbons can flow out. When combined with horizontal drilling, the well stimulation process has driven a surge in domestic oil and gas production.
DEP tests for radiation and contamination of Ten Mile Creek - The Pennsylvania Department of Environmental Protection (DEP) announced it will be conducting an investigation to see if there are radioactive materials in part of the Monongahela River Tributary. The DEP will be testing the Ten Mile Creek which runs through Greene and Washington counties in Pennsylvania. The creek is located in the center of the state’s shale gas fields and is a major tributary of the Monongahela River, an important source of drinking water for that part of the state. According to John Poister, the DEP’s spokesperson, the public should not be worried: At this point, we don’t think there is an immediate threat to the health and safety of the people in that vicinity. Poister explained the DEP is planning to start testing the creek towards the end of June and how the testing stems from previous testing done a year ago which found levels of radioactivity higher than what is expected in Pennsylvania. As reported by the Herald Standard, “Those initial tests occurred in April 2014, after years of prodding by local environmental groups, whose members shared the results with PublicSource after obtaining the documents through open records requests and DEP file reviews.” However, the DEP has not disclosed the test results.
Fracking Linked to Increased Infant Mortality in Alarming New Study - A new study has linked fracking to a higher incidence in infant mortality, perinatal mortality, low-weight births, premature births and cancer in infants and children. Funded by the Pittsburgh Foundation and written by Joe Mangano, co-founder and president of the Radiation and Public Health Project, a nonprofit educational and scientific organization that studies the relationship between low-level, nuclear radiation and public health, the study used data from state agencies to examine eight heavily fracked counties in Pennsylvania — four in the northeast and four in the southwest region of the state, counties that account for the majority of the state's natural gas drill wells and gas production. In all categories but child cancer, increases were greater in the northeast counties than they were in the four southwest counties. "The information presented in this report supports the hypothesis of a link between exposure to toxic chemicals released in fracking and increased risk of disease and death," writes Mangano, who also manages the citizen-based radiation monitoring programs near the nuclear plants at Indian Point, New York, and Oyster Creek, New Jersey. "While it is virtually impossible to estimate a 'dose' to a community from chemicals generated by fracking, it is clear that residents of the eight most-fracked counties received far greater exposures than those in the rest of Pennsylvania." Analyzing publicly available data from the Pennsylvania Department of Health and the U.S. Centers for Disease Control and Prevention, Mangano found that, since the early 2000s and compared to the rest of the state, the heavily-fracked counties have seen a rise in infant mortality (13.9 percent), perinatal mortality (23.6 percent), low-weight births (3.4 percent), premature births/gestation less than 32 weeks (12.4 percent) and cancer incidence in age 0-4 (35.1 percent).
Documents Released Show Pa. Fracking Health Complaints, Negligence of State Agencies’ Response – The advocacy group Food & Water Watch released today an analysis of reams of documents it obtained from the state of Pennsylvania that clearly demonstrate an ongoing pattern of alarming inadequacy and negligence by the state Dept. of Health (DOH) in its response to fracking-related health complaints from state residents. After a 2014 StateImpact Pennsylvania report revealing that DOH health workers were instructed to identify key fracking “buzzwords,” and told not to respond to fracking-related health complaints, Food & Water Watch requested and eventually received the DOH natural gas drilling log of health complaints. The logs demonstrate that state residents are regularly reporting alarming health concerns, and that state agencies have failed to adequately respond and address these health problems from drilling and fracking.Common symptoms reported in the logs include breathing difficulty, asthma, throat and nose irritation, noxious odors, skin problems, and abdominal issues. Residents also reported headaches nosebleeds, eye irritation, hair loss and cancer. DOH responses to these complaints did not adequately address the seriousness of the reported symptoms. Many residents, after calling DOH, were simply referred to other state agencies and/or told to have their air or water tested.The DOH log records received by Food & Water Watch can be accessed here: http://documents.foodandwaterwatch.org/doc/Grass_OOR_Appeal_Documents_Redacted.final.pdf. The full analysis of the complaint logs can be accessed here: http://documents.foodandwaterwatch.org/doc/FWWRTKPADOH6.17.15-3.pdf “This detailed look inside the Department of Health brings into stark relief what we’ve known for years – that Pennsylvanians are getting sick from drilling and fracking, and the state has been grossly negligent in protecting residents.
Study Confirms Fracking is Polluting Water in Pennsylvania , So Why the Frack is it Still Happening? -- A new study has found that shale drilling and fracking contaminated drinking water wells in Pennsylvania . The study represents the first peer-reviewed paper confirming that fracking can and does contaminate drinking water supplies. The study discovered that the whitish foam seeping from the faucets and hoses in Bradford county homes was the drilling chemical 2-BE a “foaming agent” known to cause tumors in rodents. The fracking industry contaminant was present in drinking water wells closest to Chesapeake Energy shale operations. Residents of Bradford have been complaining about contaminated water since Chesapeake Energy began drilling in 2009. Bradford is now the “most fracked” county in Pennsylvania , and Chesapeake is the largest lease holder. While Chesapeake has never admitted responsibility for water contamination, the company has paid millions in settlements to Bradford residents since 2011.
The Causes, Costs and Consequences of Bad Government Data - Data is the lifeblood of state government. It's the crucial commodity that's necessary to manage projects, avoid fraud, assess program performance, keep the books in balance and deliver services efficiently. But even as the trend toward greater reliance on data has accelerated over the past decades, the information itself has fallen dangerously short of the mark. Sometimes it doesn't exist at all. But worse than that, all too often it's just wrong. In 2012, the secretary of environmental protection in Pennsylvania told Congress that there was no evidence the state's water quality had been affected by fracking. "Tens of thousands of wells have been hydraulically fractured in Pennsylvania," he said, "without any indication that groundwater quality has been impacted." But by August 2014, the same department published a list of 248 incidents of damage to well water due to gas development. Why didn't the department pick up on the water problems sooner? A key reason was that the data collected by its six regional offices had not been forwarded to the central office. At the same time, the regions differed greatly in how they collected, stored, transmitted and dealt with the information. An audit concluded that Pennsylvania's complaint tracking system for water quality was ineffective and failed to provide "reliable information to effectively manage the program."
Coal mine water could become fracking water --On Monday, the Senate Environmental Resources and Energy Committee approved a bill that will push the use of coal mine water to be used in fracking operations. As reported by State Impact Pennsylvania, “Senate Bill 875 limits potential liabilities for producers who would use the polluted mine water, instead of cleaner fresh water, in the drilling process.” The Corbett Administration and the Marcellus Shale Advisory Commission both support the usage of coal mine water being used in fracking. The bill would ultimately decrease the amount of fresh water natural gas operators use to drill wells in the Marcellus Shale. However, there are those, specifically lawyers, who have said that due to Pennsylvania’s Clean Streams Law, drillers could be held accountable for cleaning up mine water they may not have polluted. The state’s Clean Streams Law was put in place to prevent the coal industry from seriously impacting water quality. The law allows the Department of Environmental Protection (DEP) to monitor wastewater discharge and penalize any industry that violate the law by polluting. The main concern drillers have with the Senate Bill 875 is that the DEP “could penalize them for the dirty mine drainage water if they use it to frack a well.” Those who support the bill and usage of coal mine water being used for fracking consider it a “win-win” situation. They believe that it would not only help remove acidic mine water, it will also help reduce the amount of freshwater taken by operators for drilling operations. On average, a natural gas well uses an estimated 4.4 million gallons of water, which is a lot all by itself but one has to remember how many wells are fracked daily using that same amount. It adds up quickly.
Marcellus permit activity in Pennsylvania | marcellus.com: The Marcellus Shale formation in Pennsylvania saw quite a bit of action over the last week. Yet, despite the on going activity, the number of jobs the gas industry supplies the state with has dropped drastically. It was like magic how quickly the state of Pennsylvania lost 160,000 jobs in the natural gas industry, but the credit for the trick all goes to Governor Tom Wolf and the state Department of Labor and Industry. Last week, the Department of Labor and Industry changed the way it records employment in the Marcellus Shale natural gas industry. Before the department switched its accounting ways, the natural gas industry accounted for 250,000 jobs. However, with the new calculations completed, the industry actually supports 89,314 jobs. While having a factual number is beneficial, there are those that oppose the way Wolf and the department went about changing methods. .To read the full story regarding the disappearance of 160,000 jobs in Pennsylvania’s natural gas industry, click here. The following information is provided by the Pennsylvania Department of Environmental Protection and covers June 15th through June 21st. New: 26 - Renewed: 2
Marcellus region to see wave of large pipeline projects -- Over the next three years, the Marcellus Shale region can expect to see about 17 pipeline projects meant to ship about 17.3 billion cubic feet per day of natural gas out of Pennsylvania, West Virginia and Ohio to end-users, according to IHS Energy. Those destinations “are varied, and in addition to New England, some are targeting the Midwest, eastern Canada and the South,” said Matthew Piatek, associate director of North American natural gas for IHS, which tracks energy markets. “Given the amount of production in the tri-state area currently, it will be able to satisfy the lion’s share of Mid-Atlantic and New England demand and still export a net amount of natural gas,” Mr. Paitek said. The new infrastructure is in high demand. As natural gas production ramped up in the Marcellus and Utica regions, the existing pipeline network to take that fuel from well sites to market has been maxed out. That has led to a supply glut and to depressed natural gas prices in Pennsylvania, even as neighboring New England and New York weathered dramatic natural gas price spikes during high-demand winter months. “There will be significant relief with the buildout happening this year,” said Lindsay Schneider, principal analyst with Wood Mackenzie’s natural gas team.
U.S. industrial natural gas usage falls unexpectedly - (Reuters) – U.S. manufacturers have not soaked up as much excess shale gas in the first half of 2015 as expected, but the shortfall may be an anomaly as a Gulf Coast manufacturing boom is poised to insulate the sector from seasonal demand fluctuations. Average industrial demand for gas in 2015 was expected to increase nearly 4 percent over 2014, according to federal energy forecasts. But almost halfway through the year, it has eased about 1 percent to 21.7 billion cubic feet per day from 22 bcfd a year earlier, according to Thomson Reuters Analytics. The primary reason for the decline was a milder winter this year than last year’s brutal cold in the heavily industrialized U.S. Midwest and Gulf Coast. “The industrial sector has become more temperature-sensitive over the years, so it’s not surprising industrial demand was a little disappointing this winter,” . Experts, however, expect the industrial sector to become less weather-sensitive as more manufacturing facilities enter service along the Gulf Coast, where heating is in less demand than in the Midwest. Power generators and manufacturing companies will consume most of the gas in the United States over the next 25 years, according to the U.S. Energy Information Administration. So far this year, however, only the power sector had gobbled up its share of near-record output from shale fields. Power generators accounted for 33 percent of U.S. gas consumption, burning on average 23.9 bcfd so far in 2015. That compared with 20.1 bcfd a year earlier and a 10-year average of 19.0 bcfd.
Europe needs Pennsylvania’s natural gas -- Thanks to Russia forcing Europe to pay high natural gas prices, Central and Eastern European counties are in need of Pennsylvania’s natural gas. On Monday, speakers at Williamsport-Lycoming Chamber of Commerce member connection event advocated the idea of exporting Pennsylvania’s Marcellus shale gas. During the discussion, commerce members requested the self-imposed exporting limits on natural gas be put to an end. As reported by PennLive, “The 1938 Natural Gas Act permits exports if the Energy Department finds they are in the public interest. This is 2015, not 1938, said Fred H. Hutchinson, executive director of LNG Allies, an organization that support exports. LNG stands for liquefied natural gas.” According to Hutchinson, “it is time to close ranks and open international markets for U.S. natural gas.” During the commerce member connection event, representatives from 15 European embassies sat in the audience and listened to the discussion. Following the event, the representatives toured a Halliburton natural gas powered generating plant that is under construction, along with a Marcellus Shale gas well. Among the representatives was Ivo Konstantinov from the Bulgarian embassy who explained his country sees unreliable and expensive natural gas supplies controlled by Russian President Vladimir Putin. Konstantinov said his people love Russian people, but the cost of the “friendship” is too much, and the “monopolistic extortion” is holding Bulgaria back from developing.
LPG would be moved by rail daily through Watkins Glen -- A gas storage proposal along Seneca Lake calls for trains — each loaded with pressurized and explosive cargoes of butane and propane — to cross daily over a bridge spanning Watkins Glen State Park. After crossing the bridge, most of the liquefied propane gas (LPG) trains will head east, traveling along Norfolk Southern tracks through Corning, Elmira, Owego, Johnson City and Binghamton. While trains with hazardous cargoes are under scrutiny across North America, the chief concern among some public officials with the proposal is the 80-year-old open-decked bridge spanning the gorge 75 feet in the air. For investors in Crestwood Midstream Partners' LPG project, Watkins Glen State Park is a chasm that must be crossed. For an estimated 530,000 Finger Lakes tourists each year, the park is a major attraction that must be explored. Some see these distinct pursuits adding up to an epic hazard.As precarious as the bridge may appear from far above and far below, the chance of cars — each loaded with 33,000 gallons of gas — derailing and spilling into the gorge reportedly is slim. According to a risk assessment commissioned by Crestwood, the annual probability of a fatal accident involving an LPG rail car in the Finger Lakes is one in 5 million. The trestle and the tracks were rebuilt in 1935 after being washed out by a flood. They are inspected routinely, although requests to see the report must be granted through a records access officer with the Federal Railroad Administration. A request made during the reporting of this story is pending.
Fracking divides red, blue states -- Fracking is creating a new dividing line between the nation’s red and blue states. While liberal-leaning states such as New York and Maryland have opted to ban hydraulic fracturing, despite the potential revenue from natural gas, conservative strongholds such as Texas and Oklahoma have gone the opposite route, moving to ensure that local towns and cities cannot outlaw the practice in their communities. Observers say a state’s approach to fracking is increasingly falling along partisan lines, with the affiliation of a state’s legislature and governor often reflected in whether the practice is welcome or shunned. “Where we have legislative or executive preemption efforts, we have tended to see would be expected, which is that the more liberal states tend to be more concerned about the environmental and social effects of fracking, whereas the more conservative states tend to welcome the money,” said Hannah Wiseman, a Florida State University Professor who researches environmental regulation, The Democratic leaders of New York and Maryland have banned fracking, responding to the concerns of environmentalists, who say fracking can pollute groundwater and the air.
Foes of fracking losing legal and political momentum - — After scoring a statewide ban last year on hydraulic fracturing in New York, anti-fracking activists talked excitedly about following up in a major fossil fuel-producing state — Colorado, maybe, or California. Instead, the next state to prohibit the use of fracking in oil and gas extraction — on a temporary basis — was Maryland, which, like New York, is a deep-blue state with no hydraulic fracturing activity. Critics quickly dismissed the two-year moratorium as purely symbolic. In fact, in a development that has caught both sides by surprise, the legal and political momentum these days appears to be running against the anti-fracking cause. In states where the revolutionary oil- and gas-drilling technique actually is being employed in a significant way, the movement is losing ground. Activists in leading oil and gas producers like California, Colorado, Oklahoma and Texas have suffered defeats in the last year at the hands of state legislatures, courts and even voters. Foes of fracking were hit with another setback Tuesday as a federal judge delayed this week’s scheduled implementation of the Obama administration’s tight new fracking rules for federal lands, prompted by a lawsuit challenging the regulations filed by four states.
Eagle Ford could feed Japan's newfound hunger for natural gas - Eagle Ford producers could find new friends from the Far East as Japan searches for new sources of natural gas to fuel power plants. In Houston, a delegation from the Consulate General of Japan toured the Freeport LNG construction site south of the city. In addition, the enthusiastic tourists also made note to visit a Tidal Petroleum’s oil and natural gas drilling site near Moulton in Lavaca County on Thursday, according to a San Antonio Journal report. Overall, Texas has really dived into developing and implementing natural gas. If Texas were its own nation, it would be the third largest producer of natural gas in the world with 18.84 billion cubic feet per day. Former Japanese Ambassador Yasuo Saito told the San Antonio Business Journal that all of Japan’s nuclear reactors remain shut down years after the 2011 Fukushima earthquake. The U.S. Energy Information Administration (EIA) stated that roughly one-third of Japan’s electricity was nuclear powered. However, Saito told the journal that Japan is working diligently to diversify its energy sources. Currently, the nation receives natural gas from Qatar, Australia, Indonesia and Russia. Saito noted that branching out is vital, and that he feels the Eagle Ford Shale in Texas could be a potential source of energy. The U.S. and Japan don’t have a free trade agreement, so Texas producers would be required to obtain an extra permit from the U.S. Department of Energy before exporting natural gas. Saito stated that if the Trans-Pacific Partnership passes, it would make the process of shipping natural gas to Japan easier for companies in Texas.
A New Pro-Fracking Propaganda Web Site --FrackFeed.com is a new oil and gas industry-supported website whose mission is to challenge the negative public perception of fracking. That’s a tall order since public awareness and opposition to fracking is growing following the passage of a fracking ban in Denton, Texas, as well as a de-facto ban in New York and other high-profile efforts to protect public safety and water supplies by limiting or outright stopping the risky shale extraction technique in communities worldwide. The group behind the FrackFeed.com website, North Texans for Natural Gas (NTNG), claims it is “a grassroots organization” that “aims to give a voice to those who support natural gas.” But as readers of DeSmog know, the oil and gas industry has long used expensive astroturf tactics to gin up the appearance of grassroots support to mask what are actually corporate public relations campaigns. “When the fossil fuel industry tries to pretend it’s a grassroots movement, it always manages to fail the Turing test,” Bill McKibben, founder of the environmental activist group 350.org, told DeSmog. “I mean, there’s something just inextricably bogus about it.” North Texans for Natural Gas is a “loose coalition of people who support natural gas development,” wrote Fuel Fix. Fuel Fix and other media sites that mention Frackfeed do not identify any of the people who make up the grassroots component of the site. “As is disclosed on the front page of NTNG’s website, there are four energy companies who support the effort, though it is worth emphasizing that the group does not ‘speak for’ the industry,” the site’s spokesman, Steve Everley, wrote DeSmog in an email.
Nat. gas prices may reach $4 but nothing more -- According to one CEO, with natural gas exporting to Mexico and LNG shipments going overseas in the near future, natural gas prices may see an increase. While speaking at the Hart Energy DUG East Conference in Pittsburgh, Pennsylvania, Eclipse Resources Corp. CEO Benjamin Hulburt said he expects natural gas prices to start increasing to the $3.50 to $4 range. However, he also mentioned that he doesn’t believe prices will exceed $4 by much. Since there is still a large amount of gas, Hulburt explained prices will not stay around $2.80. He explained that at the current prices it is not economical for anyone to continue producing.
Texas has suffered billions from oil price slump - We’ve seen the decimation of oil prices, most notably the loss of jobs and the reduction of new wells or new exponential increases in production. In the pursuit of quantifying the damage, a recent report found that Texas petro-wealth is down $33 billion from 2014’s observations. Blackbeard Data just released its 2015 Petro-Wealth report. In its summary, Blackbeard states that in proved producing reserves, Texas contains $107 billion worth of petro-wealth, down $33 billion or 24 percent from $140 billion in our 2014 report. Out of the $107 billion in worth, corporations own $86 billion, individuals own $15.7 billion and trusts own $3.5 billion. The remaining $1.8 billion is spread between non-profits, educational institutions, religious organizations and the government. The report also includes the top 20 cities holding Texas petro-wealth. Houston, Texas came in as the number one city worth of $37 billion and Midland, Texas came in second with over $11 billion. Blackbeard Data compiles lease ownership data for all oil producing counties in Texas. From this information, the company pulls out the different classes of ownership, classifies the type of owner, breaks out city sums and then adjusts all sums of all ownership values using the price of oil at the current time of analysis.
HB40's final defeat on Denton fracking ban -The controversy surrounding Denton, Texas’ on-again-off-again fracking ban has been a unique ordeal, to say the least. The conflict over whether or not to allow the city to back hydraulic fracturing inspired a cabaret music troupe, prompted in the arrest of a blind 92-year-old woman and, unsurprisingly drew scorn from the rest of oil-rich state until House Bill 40 put the kibosh on any county or city-sanctioned frack bans. Though Denton’s voter-approved bar of fracking within city limits seemed to have a fighting chance in May, when Denton City Council imposed a moratorium on oil and gas activities until a solution was reached, the council moved to repeal the ban altogether last week. In a Denton Record Chronicle report, city leaders called their decision a “strategic repeal” in hopes of redressing lawsuits filed against the city by the Texas Land Office and TXOGA. Denton Mayor Chris Watts, who voted in favor of the repeal, told the Associated Press he did so with a heavy heard.“It was probably one of the most difficult decisions I’ve had to make, to see the hard work and heart and soul that was poured into the effort and to prevail at the ballot box, to then have a different level of government under it,” Watts said.
Blogger: Texas should recycle oilfield water— their water supply needs it - Extracting materials we use for fuel can take a mighty toll on Texan water supplies, but Gabriel Collins, blogger for North American Shale Blog, sees a solution in recycling oilfield water. Large projects in Eagle Ford, he writes, can use up to 11.5 million gallons of water—about 10 barrels of water per barrel of oil produced. “Treatment technologies have advanced dramatically in recent years, and treating produced water now costs a fraction of what trucking and disposal does,” Collins writes. “[Fracking] is only one potential end use for treated water. Some companies may even be able to purify the water to drinking-level quality at a cost still comparable to that at which major Texas cities such as San Antonio have recently acquired freshwater supplies.” Data from the Argonne National Laboratory suggests that in 2007, oil and gas fields churned out a volume of produced water that equates to nearly 22 percent of all water used by Texas municipalities that year. Despite technological advancements and economic incentives to recycle frack water, factors including cost and lack of public support had previously deterred companies from treating water. In 2014, Apache employees estimated that water disposal in the Barnhart area cost the company about $2 to $2.50 per barrel while recycling—but not desalinating—the water only cost about 29 cents per barrel. In related news, What does Texas do with 945 million gallons of wastewater a day? Desalination, though a slightly spendier process, has been made more accessible through technological breakthroughs, driving the traditional costs of $4 to $8 per barrel down to as little as $1.50 to $2.00 per barrel.
Cancer-Causing Chemicals Found in Drinking Water Near Texas Fracking Sites -- On June 4, the U.S. Environmental Protection Agency (EPA) released a report on how fracking for oil and gas can impact access to safe drinking water. Although the report claims not to have found any “widespread, systemic impacts on drinking water resources in the United States,” a new study in Texas provides more evidence that contamination of drinking water from fracking might be occurring. A research team at the University of Texas at Arlington has published a peer-reviewed study, A Comprehensive Analysis of Groundwater Quality in the Barnett Shale Region, in Environmental Science & Technology, a journal of the American Chemical Society. The heavily fracked Barnett shale region, with more than 20,000 wells, covers a swath of counties in north Texas surrounding the populous Dallas-Fort Worth area. It also sits beneath two major aquifers. . “Most accounts of groundwater contamination have focused primarily on the compositional analysis of dissolved gases to address whether UOG activities have had deleterious effects on overlying aquifers. Here, we present an analysis of 550 groundwater samples collected from private and public supply water wells drawing from aquifers overlying the Barnett shale formation of Texas.” The team, led by UT Arlington chemistry professor Kevin Schug, found elevated levels of 10 metals and 19 chemicals as well as high levels of ethanol and methanol. The chemical compounds found included benzene, toluene, ethyl benzene and xylenes, which have been associated with a range of negative health impacts including cancer. Schug said that his team’s work was “the most comprehensive groundwater study in connection to this whole process.”
Coast guard swiftly responds to 100 gallon oil leak --Over the weekend, Coast guard along with state and local officials responded to oil seepage reported on the Bolivar Peninsula approximately 4 miles west of Rollover Pass. While conducting a beach patrol Friday at approximately 11:30 a.m., the Coast Guard identified a 100-yard area along the beach with oil seepage, 1st class Petty Officer Andrew Kendrick stated in a report. Since the oil contamination was identified, the Coast Guard, Texas General Land Office, Texas Parks and Wildlife, and Galveston County Office of Emergency Management have been working to contain and clean up the affected area. In addition, the Texas Railroad Commission has lent assistance on the scene. About 50-100 gallons of oil have been collected since Saturday, officials said. According to the report, the Coast Guard has hired an oil spill response team, thanks to the Oil Spill Liability Trust Fund. The oil spill response organization is currently working to protect the shoreline from further contamination. Roughly 200 yards of beach have been closed around the affected area. “We will continue working with our state and local partners to protect the public and Texas Gulf coast’s sensitive environment from this pollution threat,”
Officials looking for source of Texas beach oil seepage - — Federal and state authorities are still looking for the source of an oil seepage that has forced officials to close about 200 yards of beach on the Bolivar Peninsula. A Coast Guard beach patrol discovered the seepage Friday morning, prompting federal, state and local officials to mobilize cleanup crews. Lt. Samuel Danus of the Coast Guard Marine Safety Unit Texas City said a trench dug to contain the oil had collected 50 to 100 gallons by Sunday. Danus said officials don’t know the source. They will test the oil and compare it to samples from nearby oil and gas facilities in the area. Danus says there are many such facilities in the area, some of which date to the 1970s.
Earthquakes Tied to Fracking Boom, Two New Studies Confirm -- Studies keep showing that the earthquakes start happening when wastewater from fracking is injected underground. Scientists say it’s because those large quantities of water, forced underground by heavy pressure, activate dormant fault lines. Now two more such studies have been added to the pile of evidence. One of the studies, published in the journal Science, comes from a team of scientists from the University of Colorado at Boulder and the U.S. Geological Survey (USGS). The largest study to date, they analyzed information on earthquakes and 180,000 injection wells from Colorado to the east coast. They tied 18,000 of the wells, primarily in Colorado and Oklahoma, to earthquakes. “This is the first study to look at correlations between injection wells and earthquakes on a broad, nearly national scale,” said University of Colorado doctoral student Matthew Weingarten, the study’s lead author. “We saw an enormous increase in earthquakes associated with these high-rate injection wells, especially since 2009, and we think the evidence is convincing that the earthquakes we are seeing near injection sites are induced by oil and gas activity.” They found that “high-rate” injection wells, which pumped more than 300,000 gallons of water a month underground, were more likely to cause tremors than low-rate wells and that wastewater injection wells were more likely to cause earthquakes than so-called “oil recovery” wells which inject fluid to push remaining oil out of depleted wells. They also found that injection wells were tied to earthquakes ranging from 4.7 to 5.6 magnitude in Arkansas, Colorado, Oklahoma and Texas in 2011 and 2012. The second study, published last week in the journal Science Advances, was done by a pair of geologists at Stanford University. They looked specifically at the increased seismicity in certain areas of Oklahoma that rarely saw earthquakes before 2009—”no state has experienced a more significant increase in seismicity in recent years than Oklahoma,” they said. They found that it followed big increases in wastewater water from drilling operations that was injected into underground wells nearby.
Oklahoma drilling regulator calls spike in quakes a "game changer" (Reuters) – A spike in earthquakes across Oklahoma is forcing the state’s energy regulator to urgently consider tougher restrictions on drilling activity, a spokesman said on Wednesday, calling it a “game changer.” From June 17 to 24, there have been 35 earthquakes of magnitude 3.0 or greater in the state, according to the Oklahoma Geological Survey. Particularly worrying for regulators, some of the recent quakes occurred in the Oklahoma City metropolitan area, where there are no high-volume wastewater injection wells. The spike in quakes comes roughly two months after new rules governing the disposal of briny wastewater from drilling took full effect. Drillers were directed by the Oklahoma Corporation Commission (OCC), which regulates the oil and gas industry, to stop disposing wastewater below the state’s deepest rock formation, believed to be one of the main causes of the quakes, and to reduce the depth of wells that already go that deep. “We have to approach it anew,” said Matt Skinner, a spokesman for the OCC. “There’s been a huge increase. That’s a game-changer,” he said, referring to the recent jump in tremors. Oklahoma has been grappling with a rise in seismic activity since 2009, amid an expansion of drilling activity that has doubled the state’s oil output in the last seven years. The energy boom has created jobs and contributed to state coffers, but many residents are deeply uneasy about the tremors. Oklahoma has become ground zero in the oil industry’s struggle to break the connection between production and earthquakes. It was not immediately clear why there was a spike in quakes in the last eight days. Prior to this period, quakes of magnitude 3.0 or greater typically hit Oklahoma once or twice a day, according to data from the U.S. Geological Survey (USGS). Prior to 2009, there were only one or two such quakes in the state in a year.
Very Recent Huge Increase In Quakes A "Game-Changer" For Oklahoma Oil & Gas --The recent spike in earthquakes in Oklahoma could present a “game changer” for regulators. That is how regulators themselves described the spate of earthquakes that struck the state between June 17 and June 24, according to Reuters. Oklahoma has become the most seismically active state in the country in recent years, with a lot of scientific data pointing to the practice of disposal wells as the culprit. Earthquakes with a magnitude of 3.0 or greater have jumped from 20 in 2009, to 585 in 2014. But 2015 could be even worse – if current trends continue, the state could log more than 800 for the year. The rapid increase in seismic activity prompted new regulations, after a long period of hesitation on behalf of the state, which took effect two months ago. The rules barred drillers from injecting wastewater past a certain depth underground, a threshold that seismologists believe contributes to earthquakes. But even with those rules in place, earthquakes have not stopped. Over the past week, an estimated 35 earthquakes of a magnitude of 3.0 or greater struck the state. That has the Oklahoma Corporation Commission, which regulates oil and gas drilling, looking again at regulations. “We have to approach it anew,” an OCC spokesman, Matt Skinner, said after the latest round of quakes, according to Reuters. “There's been a huge increase. That's a game-changer.” The surge in earthquakes over the past week comes as a June 23 report from E&E that showed that the University of Oklahoma sought a $25 million donation from famed oil executive Harold Hamm, head of Continental Resources. The university pursued his donation as it was also establishing its position on the connection between earthquakes and disposal wells. When completed, their position reflected Hamm’s pretty closely, although he ultimately declined to donate (he is still one of the university’s largest donors). E&E notes that there is nothing specifically linking the donation to the university’s position, but they took place at the same time.
Report ranks New Mexico No. 1 for methane emissions, lost gas revenues - A national environmental advocacy group says natural gas and the revenue associated with its production at oil and gas wells are wasted at high levels on federal and tribal lands throughout the Western United States, with New Mexico accounting for more waste than any other state. A report commissioned by the Environmental Defense Fund and compiled by the consulting firm ICF International drew on Environmental Protection Agency and industry data to measure the amount of methane leaked, vented or burned during 2011. In New Mexico, the report said, that number totaled about 33.7 billion cubic feet, at an estimated cost of about $101 million. Methane, the main component of natural gas, is a potent greenhouse gas. Said Jon Goldstein, senior energy policy manager at the Environmental Defense Fund: “Pound for pound, it’s more than 80 times more potent than carbon dioxide. For folks concerned about climate change, that’s a big deal.” He added that researchers at NASA and the National Oceanic and Atmospheric Administration are studying the largest bloom of methane ever detected in the United States, located over the Four Corners region between San Juan County and Colorado. Scientists who observed the hot spot in observations from space said “the source is likely from established gas, coal and coalbed methane mining and processing.” Methane emissions are also a problem for taxpayers and tribal members who don’t want to see royalty revenue from natural gas production lost, Goldstein said.
Here’s Which States Are Leaking The Most Natural Gas At The Expense Of Their Taxpayers -- Oil and gas operations located on federal and tribal lands leaked $360 million worth of fuel in 2013, money which would have gone in part to taxpayers and tribes in the form of royalties, according to a new report. Tuesday’s report was commissioned by the Environmental Defense Fund (EDF) to track fugitive methane emissions, a term referring to methane released when natural gas is leaked, vented, or flared. Methane is a powerful greenhouse gas that contributes to climate change, and is 86 times more effective at trapping heat than carbon dioxide over a 20-year time frame. The report looked specifically at fugitive methane emissions on federal and tribal lands. It found that, on those lands, more than 65 billion cubic feet (Bcf) of natural gas was wasted via leaks and venting in 2013, representing more than 1 million metric tons of methane. That means that in 2013, emissions from wasted natural gas on federal lands was about the same as the emissions from 5.2 million cars. That’s obviously bad news when it comes to climate change. ThinkProgress has reported extensively on the climate impacts of fugitive methane leaks, and Tuesday’s study was no different. It found that, even though natural gas emits less greenhouse gases than coal or crude oil, enough gas is leaking to negate the bulk of its climate benefits. But it’s also bad for taxpayers and tribes, which are supposed to get royalty payments via the gas derived from their land. “Every molecule of methane that’s being leaked or flared is a molecule that’s not having royalty assessed on it,” Jon Goldstein, a senior energy policy manager at EDF, told ThinkProgress. “Those royalties are what you use to return to states and tribes to invest in schools, to invest in roads — things that really help impacted communities.”
Fracking Babies (To Death) --What’s Killing the Babies of Vernal, Utah? A fracking boomtown, a spike in stillborn deaths and a gusher of unanswered questions…A midwife comes under attack after she starts asking questions about dead babies in a Utah fracking town. Every night, Donna Young goes to bed with her pistol, a .45 Taurus Judge with laser attachment. Last fall, she says, someone stole onto her ranch to poison her livestock, or tried to; happily, her son found the d-CON wrapper and dumped all the feed from the troughs. Strangers phoned the house to wish her dead or run out of town on a rail. “Before they started spreading their cheer about me, I usually had 18 to 25 clients a year, and a spotless reputation in the state,” says Young, the primary midwife to service Vernal, Utah, a boom-and-bust town of 10,000 people in the heart of the fracked-gas gold rush of the Uintah Basin. Two years ago, she stumbled onto the truth that an alarming number of babies were dying in Vernal — at least 10 in 2013 alone, what seemed to her a shockingly high infant mortality rate for such a small town. That summer, she raised her hand and put the obvious question to Joe Shaffer, director of the TriCounty Health Department: Why are so many of our babies dying? In most places, detecting a grave risk to children would inspire people to name a street for you. But in Vernal, a town literally built by oil, raising questions about the safety of fracking will brand you a traitor and a target. Which raises a question you might ask in a state whose legislature is so rabid for oil and gas money that it set aside millions to sue the federal government for the right to drill near Moab and Desolation Canyon, some of the state’s most sacrosanct places: How many dead infants does it take before you’ll accept that there’s a problem?
Oil, gas spill reports for June 22 - The following spills were reported to the Colorado Oil and Gas Conservation Commission in the past two weeks. Noble Energy Inc. reported on June 17 that the union where a flowline was repaired failed, releasing fluid below the ground surface, outside of Keenesburg. It is approximated that less than five barrels of condensate and less than five barrels of produced water were released. The facility and well head was shut in and an excavation will be initiated. Synergy Resources Corporation reported on June 15 that a production tank drain line was leaking, outside of Greeley. The leak spread underneath the production tank, less than five barrels of produced water and less than five barrels of oil were released. The contaminated soil was placed on a liner and hauled to waste management. The production tank was removed and the drain line on the back of the production tank has been replaced.
Judge to consider request to suspend federal oil, gas rules - — New rules for hydraulic fracturing and other petroleum industry practices on federal land are headed before a judge in Wyoming. Four states and two petroleum industry groups are suing the U.S. Interior Department, saying the rules announced in March are unnecessarily burdensome for oil and gas developers. The rules are set to take effect Wednesday. Colorado, North Dakota, Utah, Wyoming, the Western Energy Alliance and the Independent Petroleum Association of America seek to suspend the rules pending the outcome of their lawsuit. U.S. District Judge Scott Skavdahl has scheduled arguments for and against that request at a hearing Tuesday in Casper. States including Wyoming claim they already have effective regulations for oil and gas drilling. The federal government and environmental groups say the rules are necessary to protect federal land.
Southern Ute tribe challenges new federal fracking law - -— The Southern Ute Indian Tribe has filed a lawsuit against the U.S. Department of the Interior, challenging the Bureau of Land Management’s new hydraulic fracturing rule because tribe members say they have the right to decide their own land-use policies. The rule, which is set to go into effect Wednesday, also is the subject of lawsuits filed earlier this month, including a joint suit by the states of Colorado, Wyoming and North Dakota, as well as another filed by the Western Energy Alliance and Independent Petroleum Producers on behalf of 46 trade associations and royalty-owners groups. Hydraulic fracturing is a technique used by the energy industry to extract oil and gas from rock by injecting high-pressure mixtures of water, sand or gravel and chemicals. Fracking has been a contentious subject. Concerns include groundwater contamination, leakage from wells and an increase in earthquakes in areas where the technique is used extensively. The rule requires a federal permit on public and tribal lands, in addition to the state permits already required. It applies to about 750 million acres of public and tribal lands, as well as private lands where the minerals are federally managed. The Southern Ute lawsuit, filed in federal court in Denver, says the rule conflicts with the Indian Mineral Leasing Act, the Durango Herald reported.
Judge Rules To Temporarily Block Federal Fracking Regulations - Rules for fracking on federal land won’t go into effect Wednesday as planned, after a federal judge in Wyoming issued a temporary block of the rules late Tuesday. U.S. District Court Judge Scott Skavdahl’s decision to issue a temporary stay on the rule wasn’t the full injunction that oil companies had called for in court. But the decision does mean that, while the stay is in place — which will be at least a month, the Casper Star Tribune reports — oil and gas permitting on public lands will go on under existing regulations, instead of under the new regulations. Skavdahl’s decision was based partially on the fact that the government hasn’t yet filed records on how the rule was created, so the judge wanted to give the government more time to do so. Afterward, he’d be able to adequately examine the oil industry’s legal argument. The Western Energy Alliance, an oil and gas trade group, praised the judge’s decision, as did Wyoming Gov. Matt Mead (R), who’s opposed to the federal rules. Oil industry groups, including the American Petroleum Institute, have claimed that the regulations will increase costs and delays on fracking projects. Environmental groups weren’t as happy, however. The Sierra Club called the judge’s ruling a “setback for our public lands.” “While these regulations didn’t go far enough to protect public health, they were a first and necessary step in reining in the dirty and dangerous oil and gas industry, and would begin to hold them accountable for the pollution they cause,” the group said in a statement. “Fracking needs more regulation, not less.”
Bakken oil pipeline under Lake Sakakawea approved -- On Monday the North Dakota Public Service Commission voted in unanimous support of a crude oil pipeline which will run beneath Lake Sakakawea, reports the Forum News Service (FNS). The $105 million pipeline project, owned by Hess Corp., will convert an existing 8-inch pipeline to transfer crude oil produced in the Bakken. The section of pipeline runs for 2.4 miles and was buried six feet beneath the lake bottom in 1992. The segment will connect with a 10-mile portion of new pipeline on the south side of the lake and with a 12.8-mile portion on the north side, which will transfer oil to the Ramberg Truck Facility near Tioga, North Dakota. PSC Chairwoman Julie Fedorchak said the new 12-inch pipeline sections will be buried at least five feet underground. The span of the completed system will have the capacity to transfer up to 76,000 barrels of oil per day. As reported by the FNS, Hess will monitor the pipeline 24/7 from a control room in Tioga which will track the system’s pressure, flow and temperature. Operators of the control room will have the ability to activate emergency shutdown valves in various sections of the pipeline, as well as on both sides of the lake. According to a risk assessment performed by Hess, the pipeline under the lake has a likelihood of leaking once every 190 years. Additionally, in the event of a leak, the impact on water quality, plants and animals would be minimal.
Oil leaks in Divide County; brine spilled in Burke County -- North Dakota health officials say around 42 gallons of oil has spilled in Divide County after a pipeline leaked. Condor Petroleum, Inc., also reported that around 1,638 gallons of produced water, or brine, have been released. The North Dakota Department of Health said it’s evaluating a nearby wetland for impacts to water quality. Officials say a brine spill also occurred in Burke County, around 4 miles northwest of Bowbells. Petro Harvester Operating Company, LLC, said around 2,100 gallons of brine spilled offsite and affected a nearby wetland. State department officials are responding and will work with the company on a remediation plan.
Bakken rig count at five year low -- As of Monday the number of active drilling rigs in the Williston Basin hit its lowest level since December of 2009, reports KTVQ News. Monday’s number of active drilling rigs was tallied at a paltry 75. On this day one year ago, there were 190 drilling rigs active in the Bakken. The record number of rigs in North Dakota’s Bakken was reached on May 29, 2012, with a count of 218. According to industry experts, each active drilling rig can be associated with approximately 120 jobs. The drop in active drilling rigs can be partially attributed to more operators experimenting with using fewer rigs to explore enhanced oil recovery techniques and improved drill times. “This has resulted in a current active drilling rig count that is five to eight rigs below what operators indicated would be their 2015 average if oil prices remained below $65 per barrel.” Like the current rig count, North Dakota’s oil production is also down from the previous month. In March, North Dakota produced 1,190,502 barrels per day, compared to April’s production levels of 1,168,636 barrels per day despite there being more wells producing in April versus March. Helms said that in order to maintain production levels of 1.2 million barrels per day, about 110 to 120 well completions are necessary. At the end of April, there were approximately 925 wells waiting to be completed, an increase of 45 compared to March figures. Although production levels have decreased along with the rig count, North Dakota sweet crude is fetching a higher price on the market compared the recent months. In April the price was around $38 per barrel and about $44 per barrel in May. As of Monday, Bakken crude was priced at $52.25 per barrel.
Oil and natural gas production job declines tend to lag oil price declines - EIA - Employment in oil and natural gas extraction and support activities in the United States reached nearly 538,000 in October 2014, but then it declined by about 35,000 jobs, or 6.5%, over the following six months, through April 2015, according to data from the U.S. Bureau of Labor Statistics (BLS). Declines in oil and natural gas extraction and support employment tend to lag declines in crude oil prices. As prices of North Sea Brent crude oil fell from their June 2014 level of $112 per barrel, firms reduced the number of new wells drilled and the associated workforce. The count of drilling rigs in the United States, as measured by Baker Hughes, totaled 857 for the week ending June 19, 54% below the same point a year ago and the lowest level in nearly six years. Declines in production jobs lag oil price declines. In July 2008, Brent crude oil reached a record-high monthly spot price of $133 per barrel, before falling to $43 per barrel by February 2009. Oil and gas production jobs reached a high of 391,000 in September 2008, two months after the oil prices had started declining. Employment in drilling, extraction, and support activities then continued to decline for 13 months, when the number of production jobs dropped by more than 51,000. Most (82%) of the decline in these jobs occurred after oil prices reached the lowest monthly level and were on the rise. BLS data showing declines in national oil and natural gas production jobs between October 2014 and May 2015 represent a contraction of about 6.5% of the industry workforce. Although unemployment rates for states that are heavily dependent on resources production remain well below the national average, the effects of reductions in oil and natural gas jobs are different in key states.
Indebted Shale Oil Companies See Rough Ride Ahead - There has been a lot of speculation about how deeply and how quickly U.S. shale production would contract in the low price environment. The industry has proven resilient, with rig counts having fallen by more than half since October 2014 but actual production not exhibiting a corresponding precipitous decline. That could soon change. Shale companies drastically cut spending and drilling programs following the collapse in oil prices. For example, Continental Resources, a prominent producer in the Bakken, slashed capital expenditures for 2015 from $5.2 billion to $2.7 billion. Whiting Petroleum, another Bakken producer, gutted its capex by half. The list goes on. To be sure, exploration companies are achieving a lot of efficiency gains in their drilling operations. After years of pursuing a drill-anywhere strategy, many are now approaching the shale patch with more forethought and cost-saving technologies. Oil field service companies are also dropping their rates, allowing for drilling costs to decline. That will allow U.S. companies to squeeze more oil out of shale while spending less. However, the improved productivity could be temporary. Much of the cost reductions have come in the form of layoffs rather than fundamental gains in the cost of operations. If drilling activity picks up in earnest, costs could rise again as workers will need to be rehired. The tumbling “breakeven” costs for producing a barrel of oil could be a bit of a mirage. If oil prices remain relatively weak, or even drop further in the second half of the year, the problems could start to mount. Shale wells suffer from steep decline rates after an initial rush of output. That means that unless enough new wells are drilled to offset natural decline, overall output could drop precipitously. Add to that the fact that the companies are bringing in 40 percent less per barrel than they were last year because of lower oil prices, and falling revenues start to become a problem for weaker companies.
Fracking and the Franciscans --Pope Francis is one of the world’s most inspiring figures. There are passages in his new encyclical on the environment that beautifully place human beings within the seamless garment of life. And yet over all the encyclical is surprisingly disappointing. Legitimate warnings about the perils of global warming morph into 1970s-style doom-mongering about technological civilization. The pope has a section on work in the encyclical. The section’s heroes are St. Francis of Assisi and monks — emblems of selfless love who seek to return, the pope says, to a state of “original innocence.” He is relentlessly negative, on the other hand, when describing institutions in which people compete for political power or economic gain. At one point he links self-interest with violence. He comes out against technological advances that will improve productivity by replacing human work. He specifically condemns market-based mechanisms to solve environmental problems, even though these cap-and-trade programs are up and running in places like California. You would never suspect, from this encyclical, that over the last decade, one of the most castigated industries has, ironically, produced some of the most important economic and environmental gains. I’m talking of course about fracking. There was recently a vogue for polemical antifracking documentaries like “Gasland” that purport to show that fracking is causing flammable tap water and other horrors. But a recent Environmental Protection Agency study found that there was no evidence that fracking was causing widespread harm to the nation’s water supply. On the contrary, there’s some evidence that fracking is a net environmental plus.
Pipeline firm documents reveal chaos after Santa Barbara County spill - Chaos and delay marked the initial hours after a pipeline burst last month along the Santa Barbara County coast, sending thousands of gallons of oil into the Pacific Ocean. A timeline that Plains All American Pipeline provided to lawmakers was released Wednesday and details the company’s struggle to report the spill to federal regulators in the hours after the leak was identified. Lawmakers wanted to know why the company did not alert federal regulators to the leak until nearly 3 p.m. May 19 despite the fact that operators in Midland had shut down the line at 11:30 a.m. According to the company timeline, workers on the ground near Refugio State Beach didn’t know about the leak until they received reports of oil in the water from state parks staff around noon. Initially, company employees struggled to spot oil leaking from the underground pipeline. Around 1:30 p.m., they realized oil was reaching the ocean via a storm culvert near where a corroded pipe had broken. Meanwhile, company officials in Bakersfield who were responsible for alerting federal regulators were unable to contact employees on the ground near where Line 901 ruptured. In the letter to lawmakers, the company said workers in the field were “busy dealing with the immediate demands and distractions.” Finally, at 2:56 p.m., federal regulators were notified. Even after alerting federal regulators to the spill, though, company employees in Bakersfield provided an inaccurate estimate of the volume of oil that had spilled.
ExxonMobil temporarily halts oil production off Santa Barbara after oil spill - ExxonMobil has shut down oil production at its three platforms off the Santa Barbara County coast a month after a corroded pipeline owned by Texas company Plains All American Pipeline burst, effectively cutting off the flow of Exxon’s crude. The oil giant halted operations at the Heritage, Harmony and Hondo offshore platforms late last week after it exhausted storage space at an onshore facility near El Capitan State Beach, company spokesman Richard Keil said Tuesday. The company had hoped to avoid a shutdown by using a fleet of 6,720-gallon trucks to make as many as 192 daily trips on U.S. 101 to ship the oil to nearby refineries. A Santa Barbara County official rejected that “emergency” proposal for an expedited trucking permit this month. Prior to the shutdown, Exxon had slowed daily production by nearly two-thirds and began storing oil in large tanks after the May 19 rupture spilled up to 101,000 gallons of crude oil along the Gaviota coast.. The company is still considering its next steps during the temporary shutdown, Keil said.
Amid fracking boom, cities fear explosive safety risk it can carry -- While the global fracking boom has stabilized North America’s energy prices, Chicago — America ’s third largest city and the busiest crossroads of the nation’s railroad network — has become ground zero for the debate over heavy crude moved by oil trains. With the Windy City experiencing a 4,000 percent increase in oil-train traffic since 2008, Chicago and its many densely populated suburbs have become a focal point as Congress considers a number of safety reforms this year. Many oil trains are 100 or more cars long, carrying hydraulically fracked crude and its highly explosive, associated vapors from the Bakken region of Montana , North Dakota , Saskatchewan , and Manitoba . A majority of those trains also cross northwest Ohio on their way to refineries and barge terminals along the East Coast. Derailments can lead to massive explosions, such as the one on July 6, 2013, when a runaway train derailed in Lac-Megantic, Que., just across the U.S.-Canada border from Maine . The resulting explosions and fire killed 47 people and leveled the town’s business district. “For me to assure my community there’s no risk, I would be lying,” Aurora , Ill. , Mayor Tom Weisner told reporters on the Halsted Station’s elevated platform near downtown Chicago last week. The discussion was arranged by the Institutes for Journalism & Natural Resources, a group that promotes better environmental reporting.
Forums will focus on upcoming decisions affecting oil train traffic - Laura Ackerman works at the Saranac Building in Spokane, a short walk from BNSF Railway’s train tracks. Oil trains pass her office on a daily basis, and more will roll through downtown if a new crude oil terminal is built 350 miles away in Vancouver, Washington. Upcoming decisions on Western Washington energy facilities will affect local residents, said Ackerman, oil policy director for The Lands Council. The council is among several environmental groups hosting coal and oil train forums in Spokane and Sandpoint this week. “Ports in Vancouver and Longview will be making decisions that affect us, because we’ll get the train traffic,” Ackerman said. One of the forum’s speakers is Eric de Place of Seattle’s Sightline Institute, who has charted proposed oil refinery expansions, new oil shipping terminals and coal export terminals in Washington and Oregon. There are 10 existing or proposed facilities that accept or would accept crude oil from North Dakota’s Bakken region, and three proposed coal export terminals. “We’re really seeing something that’s unprecedented — the sheer scale of the fuel flowing through these projects,” said de Place, policy director for the think tank, which promotes sustainable development. The Northwest lies between the nation’s coal and oil reserves and the energy-hungry markets of Asia. That’s giving the region a role in shaping national energy policy through the decisions it will make on coal and oil facilities, de Place said.
Railroads use new oil shipment rule to fight transparency – Railroads may have found a new weapon in their fight to keep information about oil train shipments from the public: a federal rule that was supposed to increase transparency. The U.S. Department of Transportation insists that its May 1 final rule on oil trains, which mostly addresses an outdated tank car design, does not support the railroads’ position, nor was it intended to leave anyone in the dark. But in recent court filings in Maryland, two major oil haulers have cited the department’s new rule to justify their argument that no one except emergency responders should know what routes the trains use or how many travel through each state during a given week. Those details have been publicly available in most states for a year, though some sided with the railroads and refused to release them. The periodic reports have helped state and local officials with risk assessments, emergency planning and firefighter training. The department’s rule was expected to expand the existing disclosure requirements. In its 395-page rule, the department acknowledged an overwhelming volume of public comments supporting more transparency. But ultimately, it offered the opposite. The final rule ends the existing disclosure requirements next March. Railroads no longer would be required to provide information to the states, leaving emergency responders to request details about oil train shipments on their own, and the public would be shut out entirely.
Will Re-Fracking be the Shale Drilling Industry’s Next Big Move? -- With oil prices continuing to languish, companies like Halliburton and Schlumberger have started talking up a way to get more shale oil and gas for less money: re-fracking wells drilled over the past 10 years, kick-starting flagging production and pumping out more shale oil and gas while spending less than the cost of a new well. Excitement has spread among oil companies and investment analysts alike. “You want to talk about the next step to increasing production without increasing costs?” Carl Larry, director of oil and natural gas at Frost & Sullivan, a consulting firm, told Bloomberg. “Re-fracking looks great.” “In terms of the market potential, I think you’re talking billions in terms of revenue opportunities over an extended period of time,” Schlumberger CEO Paal Kibsgaard told investors during a quarterly conference call this year. “[I]n terms of how many wells, I would say there are thousands of wells in North America land that are candidates for refracturing, and this is both shale liquids and shale gas.” “If you look at the top operators across North America that we work with, there’s not a single one of them that’s not talking about re-fracks today,” David Adams, a Halliburton vice president, told Bloomberg. “E&Ps are no longer on a treadmill,” IHS Energy Senior Consultant James Coan, announced on May 20, according to E&P Magazine, (E&P refers to Exploration and Production oil and gas companies). Despite the headlines touting re-fracking as a ticket to solvency for drillers despite low oil prices, many are skeptical that the technology is nearly as ready as the oil industry would like it to be. Early efforts to re-fracture wells have repeatedly run into stumbling blocks, earning it the nickname “pump and pray” within the industry.
Chemicals from fracking could cause significant pollution and damage to wildlife - A new analysis for chemicals charity CHEM Trust finds that chemicals from fracking sites have the potential to cause significant pollution . This pollution with hazardous chemicals could cause damage to sensitive ecosystems, including killing wildlife, as has happened in the US. Important UK wildlife sites are threatened, which could harm a wide range of species such as butterflies, dragonflies and bats. CHEM Trust makes 18 recommendations for vital improvements that are needed in the regulation of fracking in order to reduce risks to the environment and human health. In addition, it warns that cuts in regulators such as the Environment Agency in the UK could jeopardize the effectiveness of any regulations . This publication comes days before Councillors in Lancashire, in North West England, vote on whether to permit Cuadrilla to frack two sites , which could potentially affect wildlife in and around Morecambe Bay, a wetland of international importance under the Ramsar convention . CHEM Trust is sending our report to the key Councillors in Lancashire prior to this vote. The European Commission is also currently considering the effectiveness of the current regulations on fracking , and CHEM Trust will be sending our report to the EU’s Environment Commissioner and key Members of the European Parliament, in order to push for stronger regulation. We have already met officials in the EU’s environment department to call for tighter controls on chemical use in fracking operations. High volume hydraulic fracturing – or fracking – requires large volumes of water and considerable quantities of a range of chemicals; in the USA this has included chemicals with hormone disrupting properties . The liquid that flows back from the well can also contain additional pollutants. Experience in the USA has found that fracking wells, pipes and other equipment can leak, causing pollution and damage to wildlife. Given that full scale fracking requires a very large number of wells, even a small rate of well failure will lead to pollution.
EPA’s new fracking study: A close look at the numbers buried in the fine print – At least 12.2 million Americans live or drink water from within a mile of a fracked well When EPA’s long-awaited draft assessment on fracking and drinking water supplies was released, the oil and gas industry triumphantly focused on a headline-making sentence: “We did not find evidence of widespread, systemic impacts on drinking water resources in the United States.” But for fracking’s backers, a sense of victory may prove to be fleeting. EPA’s draft assessment made one thing clear: fracking has repeatedly contaminated drinking water supplies (a fact that the industry has long aggressively denied). Indeed, the federal government’s recognition that fracking can contaminate drinking water supplies may prove to have opened the floodgates, especially since EPA called attention to major gaps in the official record, due in part to gag orders for landowners who settle contamination claims and in part because there simply hasn’t been enough testing to know how widespread problems have become. And although it’s been less than a month since EPA’s draft assessment was released, the evidence on fracking’s impacts has continued to roll in. A study in Texas’ Barnett shale found high levels of pollutants – volatile organic compounds, heavy metals, and known carcinogens – in many people’s drinking water, based on testing from over 500 water wells. The contaminants found were associated with the shale drilling industry, but the researchers cautioned it was too soon to say whether the industry actually caused the contamination. But the association was strong, the researchers said. “In the counties where there is more unconventional oil and gas development, the chemicals are worse,” lead researcher Zachariah Hildenbrand told Inside Climate News. “They're in water in higher concentrations and more prevalent among the wells. As you get away from the drilling, water quality gets better. There's no doubt about it.”
Is the EPA Fracking Report Science Fiction? -- “Hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.” Or so says the U.S. Environmental Protection Agency’s (EPA) press statement announcing the release of the agency’s draft report on the risks to drinking water from fracking, and a legion of stories in the popular press that followed. But is that what the scientific study itself found? (Spoiler alert: no) A thorough review of the study suggests that the EPA misrepresented the findingsof its own study in both the press release and the high-level summary. EPA’s statement that it did not find evidence of widespread, systematic impacts fails to accurately reflect the uncertainty in the underlying data. The fact is that EPA cannot say with any certainty how widespread or systematic impacts to drinking water from fracking are, due to a lack of available data. In an attempt to summarize this high-level finding from the study’s Executive Summary, “We did not find evidence that these mechanisms have led to widespread, systemic impacts on drinking water resources in the United States,” EPA’s press statement changed the meaning. As I explained in my blog on the report, not finding evidence of impacts is not the same thing as not finding impacts. EPA’s press statement fails to accurately communicate this finding.
America’s Dangerous Pipelines: A new analysis of oil and gas pipeline safety in the United States reveals a troubling history of spills, contamination, injuries and deaths.This time-lapse video shows pipeline incidents from 1986 to 2013, relying on publicly available data from the federal Pipeline and Hazardous Materials Safety Administration. Only incidents classified as “significant” by the agency are shown in the video. “Significant” incidents include those in which someone was hospitalized or killed, damages amounted to more than $50,000, more than 5 barrels of highly volatile substances or 50 barrels of other liquid were released, or where the liquid exploded or burned. Popular viral website Upworthy calls this video "One Time-lapse Big Oil Doesn't Want You to See." According to the data, since 1986 there have been nearly 8,000 incidents (nearly 300 per year on average), resulting in more than 500 deaths (red dots on the video), more than 2,300 injuries (yellow dots on the video), and nearly $7 billion in damage. Since 1986 pipeline accidents have spilled an average of 76,000 barrels per year or more than 3 million gallons. This is equivalent to 200 barrels every day. Oil is by far the most commonly spilled substance, followed by natural gas and gasoline. The data does not separate oil by whether it is light crude or heavy crude typical of tar sands oil, which has proven exceedingly difficult to clean up and is the variety that would flow in the Keystone XL pipeline.
Oil Leaks and Spills, Exploding Oil Bomb Trains & Pipelines – But Americans Are “Safe” America is “awash” in oil and gas – but not in the way the Petroleum Industry wants you to believe. Since the start of the era of Big Oil over a century ago, the amount of oil (and other hydrocarbons, including natural gas) spilled or dumped into America’s soil, waterways, and air have caused an increasingly larger area of land to become contaminated, and caused growing public health problems across the US. Today, as we hear Industry talk of making the US “the Saudi Arabia of the West”, more and more pipelines and processing facilities, and trains carrying volatile Bakken shale oil have begun to appear in communities across America’s, regardless if there is active drilling happening there. These developments are endangering increasing numbers Americans by exposing them to ever greater risk and health problems as the pace continues to quicken. Now, while the Petroleum Industry claims that transporting explosive shipments of oil and natural gas via rail or pipeline through hundreds of communities is “safe”, the data involving accidents tells another story. And while the claim that “pipelines are safer than trains” may have some statistical validity when sheer numbers are compared, the reality is that pipelines leak, corrode and they explode – especially when old or not properly maintained and monitored – and the frequency of these “accidents” is increasing along with the number of infrastructure projects designed to bring OUR oil and gas to ports for refining and processing in order to be shipped overseas where higher profits can be realized. The safety, health and well-being of Americans are being sacrificed for corporate greed under the bogus claim that we will become “energy independent” if we allow the Petroleum Industry to get their way. Unfortunately, given the growing problems associated with explosions, fires and deaths from transporting oil & natural gas, and given that we can only burn about of one third of CURRENTLY KNOWN reserves before cooking the planet and causing catastrophic climate change, allowing the Petroleum Industry to get their way is tantamount to committing suicide.
Cheap Energy Poised to Shake Up Pipeline Industry - WSJ: Low oil-and-gas prices are poised to shake up yet another part of the nation’s energy economy, spurring a merger battle among companies that own the key pipelines that move fuels around the country. Williams WMB -3.15 % Cos., a large natural-gas pipeline operator, said it hired bankers and lawyers to help it review strategic alternatives, including a sale, after rejecting a roughly $48 billion unsolicited takeover that would have been the largest energy deal in the U.S. this year. Cheap energy has stronger companies across the industry—including exploration and drilling companies—eyeing weaker rivals. But deals have been few as buyout candidates hold out for richer offers. Dallas-based pipeline company Energy Transfer Equity ETE -1.52 % LP. said it has been pursuing Williams for six months. And it isn’t giving up, saying the proposed all-stock deal would be “the right merger at the right time.” Other pipeline giants also may enter the Williams bidding, said analysts.Analysts also say other companies that run major pipelines may be merger candidates, including Oneok Inc., OKE -0.37 % another Tulsa company that owns a skein of natural-gas lines and is building a big new one to Mexico. Regional specialists may also be acquisition targets, according to Credit Suisse, which named Targa Resources Corp. TRGP 1.30 % , a large pipeline operator in West Texas. Oneok declined to comment. Targa didn’t respond to requests for comment.
Mexico announces underwater gas pipeline to Texas (AP) — The Mexican government has announced plans for nearly $10 billion worth of electricity and natural gas infrastructure projects, including a gas pipeline under the Gulf of Mexico from Texas to the port of Veracruz. The Federal Electricity Commission said Monday that the costliest project would be the 500-mile underwater pipeline for carrying natural gas from South Texas. The pipeline is intended to go into operation in June 2018. Officials hope that facilitating the importation of cheap natural gas will help lower Mexico’s electricity rates. Other projects include power plants, electricity distribution, transmission lines and electrical substations. Mexico passed a broad overhaul of its energy sector last year aimed in part at attracting more investment to electricity and petroleum.
Pipelines winning as crude slump hits oil by rail - The flow of North American crude oil by rail will stall this year at about 700,000 carloads – instead of rising by 40 per cent – amid low prices and new pipeline capacity, says Taylor Robinson, president of Chicago-based PLG Consulting. Shippers in Western Canada have been favouring pipelines over crude by rail as the price difference between Western Canadian oil and West Texas intermediate has narrowed amid crude’s plunge. Currently, the spread between the two grades is less than $8 (U.S.), far less than the $24 it costs to move one barrel from Alberta to the Gulf Coast. It costs about $12 to ship a barrel by pipeline.“It’s hard to make crude by rail out of Western Canada work in a low-price environment. Pipelines are going to win in the end,” Mr. Robinson said by phone. Also dampening oil volume is added capacity on Enbridge Inc.’s Western Canadian pipeline network and reduced oil supply as a result of maintenance-related shutdowns and fires in Alberta’s oil patch. This means there will be room in the pipelines for the expected rise in oil production later this year, Mr. Robinson said. The slump has called into question the viability of several crude-by-rail terminals in Western Canada, including the $360-million Canexus facility in Bruderheim, Alta., which was sold last week to Cenovus Energy Inc. for $75-million. “No one is close to capacity and I’m wondering if some of those facilities are even in service,” Mr. Robinson said.
Bombing of Colombian pipeline causes ‘environmental tragedy,’ Ecopetrol says - Several thousand barrels of crude oil have spilled into a river in southwest Colombia after insurgents bombed a pipeline, state-run oil company Ecopetrol said on Wednesday, describing the damage as an “environmental tragedy.” The bomb attack occurred Monday but was not previously disclosed. It was one of spate targeting oil installations this month and will affect several thousand families, Ecopetrol’s Chief Executive Officer Juan Carlos Echeverry told reporters. As many as 4,000 barrels of spilled oil have contaminated rivers used for fishing and fresh water supplies. “It’s a social and environmental tragedy,” Echeverry said, describing the spill as “senseless.” The financial cost to Ecopetrol will be minimal compared with the harm done to the environment and affected communities, he said. The slick is drifting down the Rosario River , from Pambil in Narino province, and is expected to reach the Pacific Coast by Wednesday evening. The company has deployed booms to recover some of the crude but that will be made harder by rebel presence at along the river’s path. Although Ecopetrol – 88 percent owned by the government – did not name the rebel group, the Revolutionary Armed Forces of Colombia, a Marxist group known as the FARC, operate in the area. The 300-km Transandino pipeline, attacked six times this year, was not operating at the time of Monday’s bombing but it leaked several thousand barrels of residual crude.
Hackers’ Favorite Target: Big Oil and All That Deadly Equipment -- Hackers have made the energy industry a favorite target. A study conducted in April by Symantec Corp., the world’s biggest cybersecurity firm, found that computer-system invaders attacked 43 percent of global mining, oil and gas companies at least once last year. Like all big enterprises, energy companies want to protect sensitive data. But they have another dimension to worry about – – the potential for hackers to cause physical damage to equipment such as drilling rigs or power stations. While the industry has long prioritized physical security, with electric fences and cameras typically standing guard at refineries and power plants, cyberdefenses are only recently getting similar attention.
Growing Mobilization Against Introduction of Fracking in Spain -- Thousands of people in Spain have organised to protest the introduction of “fracking” – a controversial technique that involves pumping water, chemicals and sand at high pressure into shale rock to release gas and oil. “We are all different kinds of people, local inhabitants, who love our land and want to protect its biodiversity,” activist Hipólito Delgado with the Asamblea Antifracking de Las Merindades, a county in the northern province of Burgos , told Tierramérica. The company BNK España, a subsidiary of Canada ’s BNK Petroleum, has applied for permits to drill 12 exploratory wells and is awaiting the environmental impact assessment required by law. On May 3 some 4,000 people demonstrated in the town of Medina de Pomar in the province of Burgos, demanding that the government refuse permits for exploratory wells because of the numerous threats they claimed that hydraulic fracturing or fracking posed to the environment and health. While no permit for fracking has been issued yet in Spain , 70 permits for exploration for shale gas have been granted and a further 62 are awaiting authorisation, according to the Ministry of Industry and Energy.
Crude Oil Inventory Drops Last Week, Lower than Expectations - In its Weekly Petroleum Status Report released on Wednesday, June 24, the EIA (U.S. Energy Information Administration) announced a decrease of 4.9 million barrels (or MMbbls) in crude oil inventories for the week ended June 19. Analysts were expecting a much smaller decrease of 2 MMbbls. Crude oil inventories peaked at 490.9 million barrels in the April 24 week. It was the highest in 80 years. Crude oil prices and energy companies have been battered by surging supplies. In the week ending May 1, inventories began turning downward for the first time in four months, as you can see in the above graph. This signaled an easing of the supply glut. Inventories continued to drop in May. Now they’re down ~28 MMbbls. Last week, inventories stood at ~463 million barrels.It remains to be seen if the downturn in inventories will go deep enough to sustain confidence in the energy industry. Production is a key thing to watch.
Crude Oil Price Slips as Inventory Declines Continue - The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories decreased by 4.9 million barrels last week, maintaining a total U.S. commercial crude inventory of 463 million barrels. The commercial crude inventory remains near levels not seen at this time of year in at least the past 80 years. Tuesday evening, the American Petroleum Institute (API) reported that crude inventories fell by 3.2 million barrels and gasoline inventories also declined by 2.9 million barrels in the week ending June 19. For the same period, analysts estimated a decrease of 2.1 million barrels in crude inventories. Total gasoline inventories increased by 700,000 barrels last week, according to the EIA, and remain in the upper half of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged about 9.4 million barrels a day for the past four weeks, up by 4.5% compared with the same period a year ago. The increase in gasoline inventories is working to lower the prices that consumers pay at the pump. Crude oil exports have doubled from 273,000 barrels a day a year ago to 571,000 barrels a day last week, and net exports of petroleum products totaled 3.74 million barrels a day, compared with 3.12 million a year ago. Total products supplied reached 20.68 million barrels a day, up nearly 2 million barrels a day year-over-year. U.S. producers are still working through high crude inventories and refineries continue to benefit.
Stocks Jump, Oil Dumps After DOE Reports Bigger Than Expected Inventory Draw, Production Rises (Again) - Against expectations of a 2.0 mm bbl inventory draw, DOE reports a substantial 4.93mm bbl draw (double last week's draw) extending the streak of inventory drawdowns to 8 weeks. Crude production overall raose 0.16% to near a new cycle record high. The reaction - oil algos ran stops at highs then dumped... stocks just ripped - which allmakes perfect sense. Inventories have fallen for 8 straight weeks... (graphs) But production near a new record high...
U.S. weekly oil rig count decline slows – Baker Hughes -- Energy firms pulled three rigs from U.S. oil fields this week, the smallest drop in five weeks, data showed on Friday, a sign the collapse in drilling is coming to an end as crude prices recovered after falling 60 percent from last June to March. It was the 29th straight weekly decline, bringing the total down to 628, the lowest since August 2010, oil services company Baker Hughes Inc said in its closely followed report. In the latest week, drillers removed two rigs in the Permian, the biggest U.S. shale oil play in West Texas and eastern New Mexico, and three in the Bakken centered in North Dakota. Experts expect the rig count to bottom out soon. “We expect the rig count decline to remain lumpy in the coming weeks and expect to see a few weeks with some rig additions, offset by larger declines in subsequent weeks, before we reach an absolute bottom,” analysts at Evercore ISI, a banking advisory firm, said in a report this week. The Evercore ISI analysts said that bottom will most likely come early in the third quarter.With U.S. crude futures averaging around $60 a barrel since the start of May – up 40 percent from a six-year low in March – several drillers, including most recently WPX Energy Inc in the Bakken, said they plan to return to the well pad due in part to lower drilling costs.U.S. drillers eliminated thousands of jobs and idled more than half of their oil rigs since the total peaked at a record 1,609 in October in response to a 60 percent fall in crude prices from last June to March.
US oil rig count falls for 29th straight week, total count climbs -- The total count of US oil and gas rigs climbed this week, although oil rigs declined for a 29th straight week. The oil rig count fell by three to 628, the lowest since August 6, 2010. The number of oil and gas rigs in operation rose by two to 859. Last week, the number of oil rigs in operation fell for a 28th consecutive week, by four, and the combined count of oil and gas rigs fell by two. Following the data, West Texas Intermediate crude oil was lower but little changed, at around $59.53 per barrel. In the last week's 'oil rig monitor,' Goldman Sachs researchers wrote: "Should WTI prices remain near $60/bbl, US producers will ramp up activity given improved returns with costs down nearly 30% and producers increasingly comfortable at the current costs/revenue/funding mix." Here's the latest chart of the oil rig count:
U.S. rig count rises as oil-directed rigs drop for 29th week: Baker Hughes: The U.S. rig count has ended a 28-week slide with Baker Hughes reporting the first addition of rigs since Dec. 5. And while the overall count may have increased, the number of oil-directed rigs continued to drop. According to Baker Hughes, 859 rigs were turning to the right on Friday, two more than the previous week. However, the number of oil-directed rigs slipped three to 628, with the Permian and Williston basins losing 2 and 3 rigs, respectively. The Eagle Ford stayed flat with 83 oil-directed rigs. Gas-directed rigs rose five to 228, while miscellaneous rigs held steady at three.
US Rig Count Increases For First Time In 29 Weeks -- After 28 consecutive weeks rig counts declines in America - despite crude production levels hitting new cycle record highs - Baker Hughes reports Total Rig Count increased 2 to 859 this week. The oil rig count dropped 3 to 628. Crude's price reaction is negligible. Total Rig Count rose for first time since Dec 5th...But production just keeps rising...Charts:Bloomberg
Oil prices around $60 as demand balances glut - Crude oil prices steadied on Thursday as strong demand for oil products helped to balance a global overhang of crude oil for immediate delivery. North Sea Brent crude oil traded within a fairly narrow range as investors eyed a weak physical crude market in the Atlantic basin amid reports of stronger demand for gasoline and diesel in the United States and Europe. Official prices for Nigerian crude have hit their lowest in at least a decade with as much as 10 million barrels of unsold light, sweet crude oil capping Atlantic basin prices. But demand for oil products is fairly strong. U.S. gasoline demand in the week to June 19 hit the highest seasonal level since 1991, according to the U.S. Energy Information Administration (EIA). Brent for August was flat at $63.49 a barrel by 1250 GMT, after ending the previous day down 96 cents, or 1.5 percent. U.S. crude for August was down 25 cents at $60.02 a barrel, after finishing Wednesday down 74 cents. “Reports of unsold physical cargoes in the North Sea combined with a Brent crude oil contango that shows no signs of tightening are a warning that the market is currently not tightening up into the high demand season as one should expect,” . An EIA report on Wednesday said U.S. gasoline stocks climbed 680,000 barrels to 218.49 million in the week to June 19. A Reuters poll had indicated a 304,000-barrel drop.
Falling Oil Prices and Global Saving - NY Fed - The rise in oil prices from near $30 per barrel in 2000 to around $110 per barrel in mid-2014 was a dramatic reallocation of global income to oil producers. So what did oil producers do with this bounty? Trade data show that they spent about half of the increase in total export revenues on imports and the other half to buy foreign assets. The drop in oil prices will unwind this process. Oil-importing countries will gain from lower oil bills, but they will also see a decline in their exports to oil-producing countries and in purchases of their assets by investors in these countries. Indeed, one can make the case that the drop in oil prices, by itself, is putting upward pressure on interest rates as income shifts away from countries that have had a relatively high propensity to save. One measure of petrodollars is the total export earnings of oil-exporting countries, as defined by the International Monetary Fund (IMF), found in the IMF’s Direction of Trade database. As of mid- 2014, when oil prices were near their peak, exports from these countries totaled $2.2 trillion. This was quite a change from 2000 when exports were only $0.4 trillion. The chart below shows a tight connection between these two factors, with the simple regression line finding that a $10 increase in oil prices has been correlated with a $200 billion increase in export revenue. Oil-exporting countries used much of the increase in export revenues to buy more imported goods, with these purchases rising from $0.2 trillion in 2000 to $1.4 trillion in mid-2014. The increase came in roughly equal measure from advanced and other emerging market economies, with a $200 billion jump in purchases from China and the euro area and a $100 billion increase in purchases from the United States. Japan is notable in that its export sales increased by only $30 billion, even though its imports from the oil-exporting countries increased $125 billion. A simple regression like the one above has a $10 increase in the price of oil correlated with $70 billion increase in imports of goods by oil-exporting countries.
BP Data Suggests We Are Reaching Peak Energy Demand -- Some people talk about peak energy (or oil) supply. They expect high prices and more demand than supply. Other people talk about energy demand hitting a peak many years from now, perhaps when most of us have electric cars. Neither of these views is correct. The real situation is that we right now seem to be reaching peak energy demand through low commodity prices. I see evidence of this in the historical energy data recently updated by BP (BP Statistical Review of World Energy 2015). Growth in world energy consumption is clearly slowing. In fact, growth in energy consumption was only 0.9% in 2014. This is far below the 2.3% growth we would expect, based on recent past patterns. In fact, energy consumption in 2012 and 2013 also grew at lower than the expected 2.3% growth rate (2012 – 1.4%; 2013 – 1.8%). Recently, I wrote that economic growth eventually runs into limits. The symptoms we should expect are similar to the patterns we have been seeing recently (Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)). It seems to me that the patterns in BP’s new data are also of the kind that we would expect to be seeing, if we are hitting limits that are causing low commodity prices. One of our underlying problems is that energy costs have risen faster than most workers’ wages since 2000. Another underlying problem has to do with globalization. Globalization provides a temporary benefit. In the last 20 years, we greatly ramped up globalization, but we are now losing the temporary benefit globalization brings. We find we again need to deal with the limits of a finite world and the constraints such a world places on growth.
The New Big Oil Is State-Owned - From 2005 to 2015, global oil usage has only increased from 83 million to 93 million bpd (1.13% CAGR). However, the overall rate at which the Top 10 has increased production has been at a 1.29% CAGR pace, and their production now makes up about 58% of all global production. The biggest oil and gas companies with the most impressive increases in production are all state-owned. Saudi Aramco, the world's largest producer, increased production from 10.8 million bpd (2004) to 12 million bpd (2014). NK Rosneft' OAO, National Iranian Oil, Petrochina, and Kuwait Petrol Corp all saw sizeable increases. The only company to see a big decrease, however, was also state-owned (Gazprom). Could this be the reason for Saudi Arabia's stance on oil supplies? 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. View the video here... Oil and gas continues to make up the majority of the global energy mix with 33% and natural gas at 24%. That said, based on the CAGRs above, it does seem that we are making progress in tapering the growth of production. Human population and the economy are growing at rates higher than 1.13%, so that means oil is giving up ground to other energy sources.
To Many Iraqis, U.S. Isn’t Really Seeking to Defeat Islamic State - WSJ: —In a tent city under a highway overpass in Baghdad, refugees from Iraq’s Sunni province of Anbar were unanimous about whom to blame for their misery. “I hold Americans responsible for destroying Anbar,” said former policeman Wassem Khaled, whose home was taken over by Islamic State, or ISIS, after the Iraqi army fled from Anbar’s provincial capital of Ramadi last month. “We all know that America is providing ISIS with weapons and food, and that it is because of American backing that they have become so strong,” added Abbas Hashem, a 50-year-old who also escaped from Ramadi and now lives in the makeshift Baghdad camp that is only occasionally supplied with water. “It is a pervasive view throughout Iraq and throughout the region that we are simply disengaged, that we are not prepared to exercise the kind of weight that might actually make a difference,” said Mr. Crocker, now dean of the Bush School of Government at Texas A&M University. “And in the case of Iraq and Anbar, we are dealing with individuals, groups and tribes that remember a very different U.S. engagement. They know it, they lived it, and now the level of bitterness and mistrust is profound,” he said. This spreading perception that the U.S. isn’t really interested in defeating Islamic State has undermined local resistance to the militant group in Anbar in recent months. It represents a major obstacle to recruiting local Sunni tribes—one of the U.S. strategies in the war—provincial leaders say.
Hello world. I’m the PetroEuro! -- Back in November we meandered through the possible implications of there being no more petrodollars in the system (on account of US shale oil energy liberation). Since then, we’ve also been thinking about the possible implications of there being no more sweatdollars in the system (on account of US re-shoring and digital manufacturing trends). So what happens if key dollar recycling pathways were to be significantly closed off or contracted? Privately, we’ve speculated the situation could over time lead to the rise of a new international funding currency front runner. (Though, certainly not because the US is losing influence. More because, shale oil and a labour surplus means it may not be in America’s interest to defend reserve-currency status at all.) Some say if a new reserve currency were to arise it would undoubtedly be the Chinese renminbi. But we’re more partial to the view that it might actually be the euro.. And there is a lot of theory out there to suggest that reserve currencies emerge from shifts in global trading trends and the core needs of value-adding powers. Loosely speaking, the world is prepared to hold the IOUs of countries it can’t afford to annoy, but which it is confident will use their advances of base resources, commodities and labour for value-added purposes they too can benefit from in the long run. While China fits that bill as much as the eurosystem, another core part of the equation, however, is trusting that the power you’re extending your materials or labour to won’t forget that it owes you something in return. It’s also pretty useful if the IOUs extended can buy you access to their territory, including sizeable property rights or the rights to investments.It’s on those last two points that China is disadvantaged versus Europe.
What Would A Saudi-Russian Partnership Mean For World Energy? -- As we recently noted, Russia and Saudi Arabia appear oddly allied in recent weeks. What happens when two nations, that together account for more than fourth quarter of global oil production, begin collaborating on future energy projects? OilPrice.com's Gaurav Agnihotri explains... Russian President Vladimir Putin met Saudi Prince Mohammad in St. Petersburg on June 18 at a meeting in which Saudi Arabia and Russia, the world’s leading two oil giants, decided to form a working group for joint energy projects. “At the end of the year, in October, we will summon a meeting of the intergovernmental commission, which hasn’t operated for five years,” Russia’s Energy Minister Aleksandr Novak said recently at the St Petersburg economic forum. He further clarified that his country was not looking to replace its existing oil and gas partners but wanted to create newer ones. “There are no specific projects in the energy field yet, we only have an agreement to create a working group between our ministry and the Saudi Arabian oil ministry, which, together our companies will work on specific projects,” the Energy Minister told reporters.What are these ‘specific’ projects that Russia is talking about? Why are the two biggest producers of oil in the world now cooperating? Is this a natural response to the U.S. and EU sanctions that have targeted Russia’s oil and gas industry, specifically its arctic exploration and unconventional drilling sector?
In Historic Shift, Russia Overtakes Saudi Arabia As China's Number One Oil Supplier - Over the course of the last seven months, we’ve painstakingly documented the quiet deathof petrodollar mercantilism, the USD recycling system and fixture of the post-war global economic order that has served to underwrite decades of dollar dominance. As a reminder, the petrodollar system works like this: oil export countries recycle the dollars they receive in exchange for their oil exports by purchasing more USD-denominated assets, boosting the financial strength of the reserve currency, leading to even higher asset prices and even more USD-denominated purchases, and so forth, in a virtuous (especially if one holds US-denominated assets and printed US currency) loop. The flow of petrodollar reserves into financial markets peaked in 2006 and turned negative for the first time last year when Saudi Arabia famously Plaxico’d itself (and the US) by glutting the world with crude, in an attempt to crush Putin, and subsequently, to take out the US crude cost-curve. And while the recent drawdown in oil exporters’ petrodollar reserves suggests Saudi Arabia’s actions were sufficient in and of themselves to catalyze the system’s demise, the US has accelerated the process by backing economic sanctions on Russia which, starting this year, began to settle oil and natural gas exports to China in yuan, marking what we have hailed as the the intersection of two critically important themes that have far-reaching geopolitical and economic consequences: 1) the death of petrodollar mercantilism, and 2) the idea of yuan hegemony.
The Growing China-Latin American Energy Relationship -- With Li Keqiang’s recent business and investment blitz through Latin America, many in the region are hopeful these increased commitments will result in expanding business and trade links between the two. The energy sector represents one of the largest opportunities for expanding trade between China and Latin America. China has made a concerted effort to expand energy links in the region and to assiduously build up dependencies, especially in form of oil-backed loans. This has resulted in oil exports from the region realizing near double-digit growth to China over the past decade, a relationship that will continue to expand for several reasons. First, the U.S. shale oil and gas revolution is forcing major changes on Latin American producers. Not only do these exporters have to adjust to lower sustained prices, but they must also adapt to continual reductions in energy exports to the United States due to the shale boom. With the U.S. rapidly slashing its dependence on imported oil, the market for Latin American oil producers has shrunk considerably. According to EIA data for the five years leading up to 2014, Argentina, Brazil, Venezuela, and Mexico have all seen their exports to the U.S. fall. The reduction in oil exports to the United States will force Latin American suppliers to look elsewhere with vigor, in a bid to diversify away from the U.S. market, and China seems the logical destination. Second, due to reduced exports to the U.S. market and the small Latin American share of Chinese oil imports, there’s room to grow on both sides of the ocean. This trend has been underway for several years already, but shale growth has accelerated the growing energy relationship between China and Latin America, as China picks up the extra barrels that the U.S. is no longer interested in.