HBW Resources Ollison Hydraulic Fracturing Report: Domestic and International News Impacting Fracking

HBW Resources: Ollison Hydraulic Fracturing Report

Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the use of hydraulic fracturing for oil and gas extraction.  With numerous state legislatures now in session, HBW Resources is monitoring these activities to ensure that responsible and feasible policies based on sound science are advanced.

States 

State Legislative Update: Please see linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing. Please contact us if you would like more information.

California
Anthony Earley, chairman and CEO of PG&E Corp., said in an interview with the San Jose Mercury News editorial board that companies using fracking should be required to publicly disclose the chemicals they pump into the ground and should be required to test groundwater before and after they drill for oil and gas. Earley said that “California has benefitted tremendously from low natural gas prices,” and that he supports expanding fracking to create jobs and provide plentiful gas to run power plants and heat homes. But he said some drillers’ resistance to disclosing the chemicals they use, claiming trade secrets, is counterproductive. PG&E does not engage in fracking itself. But the San Francisco-based company — which has 15 million customers from Bakersfield to the Oregon border — is one of the nation’s largest consumers of natural gas and is a significant voice in the energy industry.

Colorado
U.S. Rep. Jared Polis (D, CO 2), a Boulder Democrat, through the holding company that has title to the Congressman’s 50-acre rural getaway he owns in Weld County near Berthoud filed a complaint in Denver District Court seeking a temporary restraining order. His goal is to shut the drilling down. The complaint filed in Denver District Court by Mountain Property Improvement LLC names Denver-based Sundance Energy Inc. and Polis’s neighboring property owner as defendants. A hearing is scheduled in Denver on Polis’s request for the temporary restraining order. Polis also has lodged an official complaint over the drilling with the Colorado Oil and Gas Conservation Commission, alleging that the activity “created an uninhabitable atmosphere, substantially and unreasonably interfering with the occupancy of my property.” the follow-up report to Polis’s complaint on file with the Colorado Oil and Gas Conservation Commission. It confirms that a site inspection was performed Wednesday, and states, “No odors were identified except engine exhaust,” and that wind conditions precluded a noise survey. It also showed that a state inspector worked with a Sundance representative on noise mitigation, forklift operation and installation of a noise wall on the northwest side of location. Polis dismissed the findings of Wednesday’s on-site inspection. On Friday,Rep. Polis withdrew his complaint, but retained the right to refile it.

Adams County commissioners voted to deny a proposed route for a 435-mile natural gas liquids pipeline on the grounds that it would hamper plans for development in the area. The Front Range Pipeline project, a joint venture uniting Anadarko Petroleum Corp., Enterprise Products Partners LP and Denver-based DCP Midstream Partners LP, may now have to find an alternative plan or go around the county, which stretches north and east of Denver, entirely. The pipeline, which would ferry natural gas liquids from northern Colorado to Texas, has already secured approvals from several other localities, but Adams County leaders remain unconvinced and raised concerns that the pipeline would affect areas around Denver International Airport.

Georgia
United Parcel Service Inc. (UPS), the world’s largest package-delivery company, said it can save 40 percent in fuel costs by running its long-haul semi-tractor trailer fleet on natural gas instead of gasoline or diesel. UPS is reducing gasoline and diesel use to cut emissions and operate more efficiently, Scott Wicker, the Atlanta-based company’s chief sustainability officer, said in an interview today. The company wants to reach 1 billion miles driven by alternative or advanced-technology vehicles by 2017, up from a previous target of around 400 million, it said today in its sustainability report.

Louisiana
Sasol, an international integrated energy and chemical company, has chosen Emerson Process Management for a comprehensive program to automate its planned integrated gas-to-liquids (GTL) and world-scale ethane cracker complex in Lake Charles, Louisiana. When completed, the GTL plant will transform the region’s abundant low-cost shale gas into high-performance, low-emissions diesel and other transportation fuels.

Massachusetts
A congressional study, by the House Natural Resources Committee’s Minority staff, estimates thatleaky natural gas pipelines have cost Massachusetts consumers up to $1.5 billion over the last decade. The study estimated that repairing the leaky pipes could save Massachusetts consumers $150 million over the next decade, though they would likely pay more initially to cover the cost of the repairs.

Michigan 
proposal to drill as many as 500 wells in Michigan’s northern Lower Peninsula by using hydraulic fracturing is attracting attention. Encana Corp., which has drilled about a dozen wells since 2009, has proposed the new wells, The Detroit News reported, and spokesman Doug Hock says the company is “in the early stages” of new drilling in Michigan. Calgary, Alberta-based Encana is focusing on Michigan’s Antrim and Collingwood shale formations, which run from the tip of the Lower Peninsula to the middle of the state. The company’s mineral rights are mostly in Cheboygan, Emmet, Kalkaska and Missaukee counties. The state Department of Environmental Quality has said fracking has been used in about 12,000 Michigan wells over the past 50 years without harming the environment.

A Barry County Circuit Court judge will decide within three weeks whether to allow an anti-fracking case to go forward against the Michigan Department of Natural Resources. The judge stated that she would issue a written opinion within 21 days on whether to grant the state’s motion for summary disposition in a lawsuit challenging oil and gas leases sold by the state at auction in 2012 in the Allegan State Game Area, the Barry State Game Reserve and Yankee Springs Parks and Recreation Area. In the lawsuit, which alleges that the state violated the Michigan Environmental Protection Act by not assessing the potential impacts on the reserves before auctioning the oil and gas rights, the group is asking that the leases be set aside until environmental impact studies can be done on the area, particularly with regard to the impact of the controversial process known as horizontal hydrofracking.

Ford is expanding its lineup of vehicles for buyers who want to run on clean natural gas to include its bestseller, the F-150 pickup. The automaker says adding the 2014 F-150 will make it the only company with a full-size pickup that can come prepped from the factory for natural gas, then sent to an outfitter. Until now, Ford’s natural-gas lineup has included the small Transit Connect and E Series vans, and the big Super Duty pickups and chassis cabs. Ford officials note that the F-150 with the modified 3.7-liter V-6 engine will be available in natural gas to anyone who wants to buy one. The natural-gas prep work to the engine at the factory adds $315 to the cost of the truck, which then goes to an outfitter who is likely to charge up to $9,500 more for the tanks and connections.

DCP Midstream LP, formerly known as Duke Energy Field Services, LP, has submitted a proposal to the State of Michigan’s Department of Environmental Quality for permission to build a gas processing plant in Hamilton Township.  Currently, the proposal is to request a permit from the State of Michigan’s Department of Environmental Quality for air quality compliance.

North Carolina
A newly crafted measure, which would lift the state’s moratorium on hydraulic fracturing on July 1, 2015, is included in a proposed conference report on Senate Bill 127, a measure to reorganize the state’s commerce department and privatize part of the state’s job recruitment efforts. The new measure would authorize the state to start issuing permits for shale gas exploration. But it cannot do so until rules are made, bill supporters said. Another major provision in the bill sets a low tax on companies to entice business to the state.

North Dakota
Oil drillers in North Dakota’s Bakken shale fields are allowing nearly a third of the natural gas they drill to burn off into the air, with a value of more than $100 million per month, according to a new study. Flaring has tripled in the past three years, according to the report from Ceres. “Flaring Up: North Dakota Natural Gas Flaring More than Doubles in Two Years,” analyzes oil and gas production data published by the North Dakota Industrial Commission and calculates that volumes of flared gas more than doubled between May 2011 and May 2013. In 2012 alone, flaring resulted in the loss of approximately $1 billion in fuel and the greenhouse gas emissions equivalent of adding nearly one million cars to the road.

Denver-based Whiting Petroleum Corp. officials said they expected to greatly ramp up production in both the Bakken and Niobrara shale plays later this year as they reported production for the second quarter that was up substantially from the same period in 2012.

The North Dakota Industrial Commission has issued the largest civil penalty ever for an oil-and-gas-related infraction, fining Halek Operating ND LLC $1.5 million for jeopardizing drinking water with wastewater injections. In another first for the commission, officials are pursuing criminal charges against Executive Drilling, which bought the well on January 23, 2012, President Nathan Garber over accusations that he directed workers to mislead state inspectors.

Ohio
Two huge industrial facilities — a “fractionator” and a “cryogenic processer” — have risen in the woods of eastern Ohio.  They are basically specialized chemical plants that support the Utica Shale play. And as of Sunday, the pair — tethered by a 39-mile pipeline from the fractionator in Harrison County to the cryogenic facility in Columbia County, began operating together. They’re converting gasses and liquids from Utica Shale wells into saleable and transportable commodities. The billion-dollar-plus operation is called Utica East Ohio. It’s a joint venture of three major mid-stream energy companies. Midstream M3 LLC announced the first phase of Columbiana County’s first natural gas processing plant is finished. Over the weekend the $400 million plant began receiving the Utica Shale gas from neighboring wells, processing that gas and delivering the residue to interstate markets. The facilities are part of a $900 million total project undertaken by M3 and its partners, Access Midstream and EV Energy Partners. The company said the cryogenic facility is capable of processing 200-million-cubic-feet of natural gas a day and the $500 million hub in Scio is on its way to completion.

The growing popularity of natural gas has helped make the summer air easier on Ohio resident’s lungs. Many factors contribute to smog, and experts are reluctant to place too much emphasis on any one, but big changes in the state’s power plants have played an important role. Coal was the fuel for 67 percent of the power produced in the state last year, down from 85 percent in 2008, according to the Energy Information Administration. Most of coal’s losses have been gains for cleaner-burning natural gas. The shift to gas is driven by a combination of market forces and regulation. Gas prices have plummeted because of a dramatic increase in domestic production from shale formations, including in Ohio. At the same time, the cost to operate a coal-fired plant has soared because of mandated pollution controls, which in turn means that coal power is cleaner than it used to be.

A proposal, according to the U.S. Bureau of Land Management website, would open 4,525 acres of mineral rights beneath the 4,578-acre state forest and two townships for bids from oil and gas companies during a Dec. 12 public sale. Ohio Department of Natural Resources officials said the decision to auction the mineral rights under Blue Rock was made without their input. BLM has halted plans to auction off mineral rights for shale drilling in a state forest in eastern Ohio after state officials complained they weren’t consulted.

The Ohio Department of Natural Resources has issued 819 Utica shale permits, as of July 27. Of that total, 460 wells have been drilled. A total of 119 wells are in production. A total of seven new permits were issued: three in Belmont County, three in Carroll County and one in Columbiana County.

Leading researchers will gather for the Youngstown State Hydraulic Fracturing Symposium on Wednesday, August 14. The event will take place at Youngstown State University in Youngstown, Ohio, and is sponsored by LECO, Gerstel, and Youngstown State University. This seminar will include a full day of presentations and discussions on the sampling, sample preparation, and analysis of complex environmental materials associated with fracking, including:
·         Using GCxGC-TOFMS for Forensic Investigations of Potential Contamination from Drilling and Fracturing
Operations, presented by Dr. Frank Dorman of Pennsylvania State University
·         Chemical Characterization of Major and Minor Components in Fuel and Hydrocarbon Liquids, presented
by Dr. Josef Simeonsson of Youngstown State University
·         Fractionation, Characterization with GC High Resolution Mass Spectrometry and GCxGC-TOFMS and
Toxicity of a Spirulina Hydrothermal Liquefaction Wastewater, presented by John Scott of the Illinois
Sustainable Technology Center at the University of Illinois
·         Understanding the Chemical Composition of Hydraulic Fracturing (Waste)water, presented by Dr. Lisa
Strong of the Biotechnology Institute at the University of Minnesota

Pennsylvania
Two counties in northeastern Pennsylvania are backing a plan to seek $250,000 of state funding to examine drinking water quality in private wells and the possible effects of Marcellus Shale natural gas drilling. County commissioners in Bradford and Lycoming Counties say they will write a letter of support for a $250,000 grant from the Pennsylvania Department of Community and Economic Development. There’s been a recent boom in gas drilling in both counties. Officials say Guthrie Health, Geisinger Health System and Susquehanna Health are applying for the funding to conduct the study, which they would do in collaboration with the United States Geological Survey. Curtis L. Schreffler of the USGS says his group would provide technical leadership for the study and also contribute an additional $100,000.

The head of Pennsylvania’s leading natural gas industry group said that she’ll be stepping down this fall. Marcellus Shale Coalition CEO Kathryn Klaber said she’s proud of what the group has accomplished during the past four years. The coalition of drillers, pipeline companies and other industry-related businesses includes Chevron Corp., Peoples Natural Gas, Range Resources, and Talisman Energy, among others.

Eighteen Pennsylvania House Democrats have written a letter to Pennsylvania Democratic State Committee Chairman Jim Burn expressing their concern with the party’s recent vote 115-81 in support of a statewide moratorium on hydraulic fracturing.

EQT Corp. has sued landowners in Allegheny County for access to their properties under this law that gives gas drilling companies the power to combine some neighboring parcels into drilling units without compensating owners. The 69 individuals and one golf course in Forward named in the lawsuit are accused of blocking the company from conducting surveys on their land to determine where to drill for shale gas. It appears to be the gas industry’s first attempt at using the controversial law.

Texas
As the oil and gas industry along the Eagle Ford Shale continues to boom, communities in the area are working to cash in as well. The Eagle Ford Shale is a 20 county region stretching from the border of Mexico all the way into East Texas. Newly tapped oil and gas reserves pumped $61 billion into the Texas economy last year and opened 116,000 jobs in the area. The advancement of hydraulic fracturing technology is the reason towns like Nixon are moving forward in a new economy.

Eagle Ford Shale production will jump 50 percent this year, hitting an average 844,000 barrels per day, according to an analysis by research and consulting firm Wood Mackenzie. And despite slumping natural gas prices, the north east United States will double gas production by 2020, the researchers forecast.

The growth in the energy sector is expected to continue to grow like gangbusters – led by Texas, according to Karr Ingham, a petroleum economist for the Texas Alliance of Energy Producers and creator of the Texas Petro Index. “We would be the 14th largest oil producing country on the planet, if Texas were a country,” Ingham said. “You have the Permian producing 925,000 barrels a day and the Eagle Ford escalating to 540,000 barrels a day – that is just extraordinary.” The Permian Basin and the Eagle Ford have helped make Texas the producer of almost half of all crude oil and a quarter of natural gas produced in the United States, Ingham said.

Oil exploration and production company Sanchez Energy Corp. will acquire 10,800 net acres in South Texas’ Fayette, Gonzales and Lavaca counties from an unidentified seller for $29 million. The acreage, located across the Eagle Ford Shale region, has an estimated net production of 250 barrels of oil equivalents per day.

Houston-based Cabot Oil & Gas Corp. will bring on a second drilling rig in South Texas’ Eagle Ford Shale to focus on so-called “pad” drilling, officials said. Drilling pads house wellheads for multiple horizontally drilled wells, allowing operators to put them in operation more quickly than if they had located a single well at each site. Cabot will add the new rig at the end of July, officials said in an update to shareholders. The company expects to save more than $500,000 drilling each well once the new rig is operational.

A new study of 100 private water wells in and near the Barnett Shale showed elevated levels of potential contaminants such as arsenic and selenium closest to natural gas extraction sites, according to a team of researchers that was led by UT Arlington associate professor of chemistry and biochemistry Kevin Schug. The peer-reviewed paper focuses on the presence of metals such as arsenic, barium, selenium and strontium in water samples. Many of these heavy metals occur naturally at low levels in groundwater, but disturbances from natural gas extraction activities could cause them to occur at elevated levels.

This fall, a magnet school in Laredo, Texas, a city that sits in the southern swoop of the Eagle Ford Shale, is kicking off a new program to train students for jobs in oil and gas. The program at Cigarroa High School’s Sabas Perez Engineering Magnet School has accepted about 150 incoming freshmen, who will learn the skills they need to pursue degrees in petroleum engineering or certifications as oil and gas specialists.

The Permian Basin has received $58 million from an allocation made by the Texas Transportation Commission. The funds were part of the $225 million fund legislators approved for roads in oil industry-intensive areas. The funding will be used for projects that the commission approved. In the Texas Department of Transportation Odessa District, which includes Midland, the three projects that will be funded are for State Highway 158, Farm-to-Market 307 and State Highway 349.

West Virginia
Consol Energy became the third company to successfully extract natural gas from the Devonian Shale, following Rex Energy Corp. and Range Resources Corp. The company’s drilling attempt took place in Greene County, which lies on the eastern border of Marshall County and the northeastern border of Wetzel County. “The Devonian Shale was the target of a lot of drilling activity back in the late 1970s and the 1980s,” added Robert W. Chase, professor of petroleum engineering and geology at Marietta College. “It produced both oil and gas, but was not as prolific as the Marcellus or Utica because it was not very deep and didn’t have as much pressure as the deeper formations.” Consol’s first endeavor into the formation hit the Upper Devonian at 12,490 feet deep in Greene County, according to the company’s quarterly filing report. It drew about 3 million cubic feet per day, roughly a third of the output of two nearby Marcellus wells.

Senate Commerce Chairman Jay Rockefeller IV (D, WV) requested the Government Accountability Office (GAO) to examine the impact of current shale oil and gas development on the nation’s existing transportation infrastructure. The boom in domestic shale oil and gas production has raised questions about the ability of existing infrastructure to safely transport these hazardous products, and the capacity of safety standards as production increases.

Wisconsin
Aviat Aircraft has introduced the first airplane able to run on both standard aviation fuel and compressed natural gas. The airplane is the first to fly on CNG, opening the door to use a cheaper and cleaner alternative to gasoline. Aside from the environmental benefits, the reduced cost of CNG can also help make flying small aircraft less expensive, and the test airplane that debuted in Oshkosh is the first step in realizing its potential.

Wyoming
Natural gas company Questar is buying an additional stake in some existing natural gas wells in Wyoming for $106.4 million. The wells, run by subsidiary Wexpro Co., are located in Wyoming’s Vermillion Basin. Wexpro already owns 46 percent working interest in the properties being acquired, with the latest transaction increasing its stake to 88 percent. The new assets will add an estimated 118 billion cubic feet equivalent of net proved reserves, about 45 percent of which, or 53 Bcfe, are currently proved-developed. The deal is expected to close by August’s end.

National
Energy Secretary Ernest Moniz told reporters that the process of natural gas extraction calledfracking was safe and should be used, provided it was properly regulated. “I still have not seen any evidence of fracking per se contaminating groundwater,” he said at a breakfast hosted by the Christian Science Monitor.

The House Natural Resources Committee approved H.R. 2728 that effectively would block the federal government from regulating the hydraulic fracturing process that is unlocking previously unrecoverable supplies of gas and oil. On a mostly party-line vote of 23-15, the panel sent the measure to the full House of Representatives, which is expected to debate the legislation later this year. Rep. Jim Costa (D, CA 16) bucked Democratic colleagues in supporting the bill; Rep. Jon Runyan (R, NJ 3) broke with Republicans to vote against it. The measure would handcuff the Interior Department and other federal agencies just as the Bureau of Land Management finalizes new mandates for the design of oil and gas wells on public lands. The proposed rule — which would apply only on the sliver of territory managed by the Interior Department — also would force companies to disclose the chemicals they pump underground and would make drillers adopt plans for managing waters at wells.

The House Science Committee will mark up legislation on H.R. 2850, the “EPA’s Hydraulic Fracturing Study Improvement Act,” introduced by Committee Chairman Lamar Smith (R, TX 21) that forces the Environmental Protection Agency to alter its ongoing study of the effects of oil-and-gas “fracking” on drinking water resources. The bill would require the major, years-long study to include “objective estimates of the probability, uncertainty and consequence of each identified impact, taking into account the risk management practices of states and industry.”

Senate Energy and Natural Resources Committee Chairman Ron Wyden (D, OR) floated a proposal to let states regulate hydraulic fracturing underground while permitting the federal government to set reporting and disclosure requirements. The framework Wyden laid out would affect hydraulic fracturing across the country, setting it apart from an ongoing process led by the Interior Department that covers only federal land. Much of the U.S. shale energy boom has occurred on private and state land left untouched by the draft Interior rule, making Wyden’s proposal a hefty one.
George Mitchell, known as the “father” of hydraulic fracturing passed away. “He was a true giant of the oil business. The shale revolution we are witnessing today is really a result of his efforts and foresight,” National Oilwell Varco’s CEO Pete Miller said. “He was a leader, an innovator and a wonderful gentleman.”

According to a new market research report, “Hydraulic Fracturing Market by Resource & Well Type – Global Trends & Forecasts up till 2017”, global hydraulic fracturing market will grow from estimated $31 billion in 2011. This value is expected to increase from $40 billion in 2012 to $64 billion by 2017, with 10% CAGR during the same period. North America is expected to lead the global hydraulic fracturing production market in terms of hydraulic horse power supplied by the year 2011.

Halliburton Co. said it is part of a federal antitrust investigation into the hydraulic-fracturing industry. The news Thursday followed by one day a similar statement by Baker Hughes Inc. Neither company provided additional details or the specific information being requested by the government. A Justice Department spokeswoman said Thursday that the antitrust division “is investigating the possibility of anticompetitive practices involving pressure-pumping services performed on oil and gas wells.” The department didn’t name the companies that are part of its probe. Halliburton said other companies also have been contacted by the Justice Department and that Halliburton didn’t believe that it was being singled out for particular scrutiny. The Houston-based company said it was cooperating with the government’s inquiry.

A hazard alert, issued by the Occupational Safety and Health Administration and the National Institute for Occupational Safety and Health, warns of prolonged exposure to dust with high levels of breathable crystalline silica. Crystalline silica can cause lung disease or lung cancer and has been linked to other conditions such as tuberculosis, chronic obstructive pulmonary disease and kidney and autoimmune disease, according to the alert on OSHA’s website. The alert first was issued in June 2012, but the research behind it was just published in the July issue of the Journal of Occupational and Environmental Hygiene. The alert was issued as part of an OSHA/NIOSH study on fracking. With cooperation from oil and gas partners, researchers collected 116 air samples from 11 fracking sites in five states — Arkansas, Colorado, North Dakota, Pennsylvania and Texas.

House Democrats are taking a fresh swipe at a decades-old exemption for the oil and gas industry from federal hazardous waste statutes. Reps. Matt Cartwright (D, PA 17) and Jared Huffman (D, CA 2) yesterday introduced the “Closing Loopholes and Ending Arbitrary and Needless Evasion of Regulations Act,” or CLEANER Act, with 42 co-sponsors and a throng of supporting environmental groups. The legislation would eliminate a 1980 provision to the Resource Conservation and Recovery Act that exempted oil and gas companies from rules governing hazardous waste management and would require companies to test their waste before disposal.

A new study, “An Evaluation of Water Quality in Private Drinking Water Wells Near Natural Gas Extraction Sites in the Barnett Shale Formation,” from researchers at the University of Texas – Arlington seems to suggest at least a correlative link between well water contaminants and natural gas development. The researchers took samples from water wells in north Texas that sit atop the Barnett Shale and compared them against historical water quality data from the same counties. Those comparisons suggested an increase in certain compounds after natural gas development in the area began in earnest. However, the study found no evidence of benzene, toluene, ethylbenzen and xylenes, typically what is tested for when determining if hydraulic fracturing has contaminated groundwater.

The boom in U.S. natural-gas supplies is boosting chemical exports to Asia, driving up demand for specialized ships that carry the products and sending freight rates to a five-year high. Earnings for tankers carrying 20,000 metric-ton cargoes in stainless-steel tanks will rise 12 percent to an average of $14,500 a day next year, the most since 2009, according to RS Platou Markets AS. The 24 percent increase in U.S. natural-gas output over the past decade is cutting costs for the nation’s chemicals producers, who will boost exports of materials used in everything from paints to plastics to a record in 2013. China, the largest importer, is on course to buy more than ever, pushing fleet use to 87.2 percent of available transportation capacity this year and 89.8 percent in 2014, the highest since 2008, Platou estimates.

The concentration of silica in the air workers breathe exceeded occupational health criteria at all 11 hydraulic fracturing sites tested by the National Institute for Occupational Safety and Health, the American Industrial Hygiene Association announced. Researchers measured the silica levels of more than 100 personal breathing zone samples at fracking sites in five states, finding levels above the Occupational Safety and Health Administration’s permissible exposure limit (PEL), NIOSH’s recommended exposure limit (REL), and the American Conference of Governmental Industrial Hygienists threshold limit value (TLV).

International
Canada
Anti-shale gas protesters in Kent County say SWN Resources Canada is winding down its exploration activities after spending the past two months in the area. Earlier this month, a group of mayors from the area asked for a moratorium on shale gas exploration and a meeting with the province’s energy minster. The Kent Regional Service Commission voted 16-1 in favor on July 18. Chairman Marc Henri said they want more consultation and better communications between the communities, the provincial government and SWN Resources Canada.

China
State-owned oil and gas company China National Petroleum Corp. announced that a major natural gas pipeline connecting southwest China with the Bay of Bengal has come online. The 493-mile pipeline can ferry 12 billion cubic meters of gas to China per year, according to the CNPC.

Most of the companies that won blocks in China’s second shale gas auction have barely started seismic work seven months later because of lack of expertise or funding, state media said. The government in late 2012 awarded 19 exploration blocks to 16 local companies, mostly non-oil companies, in an attempt to introduce broader competition in an industry long dominated by several state giants. So far, companies have completed a total of 627 kilometers of two-dimensional seismic survey in five out of the 19 blocks, and preparation is under way for the drilling of several exploratory wells, but no well has been sunk.

Japan
Japan Petroleum Exploration has said that, following a successful shale testing and research project at its Ayukawa oil and gas field in the Akita Prefecture that began in March 2012, it plans to conduct a similar project in the Fukumezawa oil field.

Saudi Arabia
In an open letter to the Saudi oil minister Ali al Naimi, Prince Alwaleed bin Talal said advances in fracking technology were likely to reduce global demand for Saudi oil. Demand for oil from Opec countries was “in clear and continuous decline”, Prince Alwaleed wrote in a letter published on his Facebook page. “The world’s reliance on OPEC oil, especially the production of Saudi Arabia, is in a clear and continuous decline,” wrote Prince Alwaleed, adding that the threat from shale gas was “definitely coming”. He added that the world’s biggest crude oil exporter should implement “swift measures” to diversify its economy. Oil minister al Naimi said publicly in May that he was unconcerned about rising US shale oil supplies. But Prince Alwaleed, who owns the international investment firm Kingdom Holding, disagreed.

Ukraine
Eastern Europe-focused JKX Oil & Gas reported that it has made headway with its hydraulic fracturing program at its R-103 well in Ukraine. The firm said it successfully completed three out of nine stages of the frac. An interim flock back has been performed for a preliminary clean-up and work has now begun on stages four to six of the program. Each stage covers approximately 325 feet of the sub-horizontal 0.62-mile reservoir section. The final frac is scheduled to be completed by the end of August, with initial results expected by the end of the third quarter.

United Kingdom
Government incentives for affected communities must be followed up by education and job creation to convince a skeptical British public that fracking for shale oil and gas is right, according to a survey of industry professionals. Some 70 per cent of almost 200 respondents to the survey by data provider Rigzone believe the British government was right to offer incentives to communities where hydraulic fracturing, known as fracking, and horizontal drilling will be used. But 51 per cent believed this will not be enough to win the public debate.

UK shale gas driller Cuadrilla Resources announced that it has begun discussions with local communities about the next steps for its exploration of the Bowland shale in Lancashire, northwest England. The company said it held two “drop-in” sessions last week. The first session on the proposals for a new vertical exploration well at Clifton, Lancashire, was held Tuesday July 23. Residents were also invited to join at drop-in session on Wednesday July 24 at Elswick Village Hall to highlight any issues that they feel should be included in the Environment Risk Assessment (ERA) that planning consultants Arup is preparing for each site where Cuadrilla plans to carry out hydraulic fracturing in Lancashire. Cuadrilla said that people can continue to provide feedback on the ERA until August 12.

Additional Information

For additional information, please contact Bo Ollison with HBW Resources.  His contact information is below.

Bo Ollison
HBW Resources
2211 Norfolk Street, #410
Houston, TX 77098
Tel: 713-337-8810
E-mail: bollison@hbwresources.com
Web: http://www.hbwresources.com
Twitter: @BoOllison

Contact Information

If you have any general questions, please contact me anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report, the HBW Greenfield Offshore Energy Report, the Forsgren Environmental Report,  daily updates and new Member profiles can be viewed at: www.hbwresources.com/intelligence.  Hope you have a great day.

Thanks,

Michael Zehr
HBW Resources
1666 K Street, NW, Suite 500
Washington, DC 20006
Direct: 202-429-6081
Cell: 202-277-3927
E-mail: mzehr@hbwresources.com
Twitter: @mzehrhbw

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