National and International Fracking News & Events

HBW Resources Hydraulic Fracturing Report (National &International)

Below is a summary of publicly available activities currently underway at the national and international level that could impact natural resource extraction, particularly related to hydraulic fracturing and shale development.  To better utilize this document, we have broken the information down by region. 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. Be sure to check each week for updates in various regions that pertain to your business operations.
 
Highlights

  • Sen. Mary Landrieu (D, LA) took over the Chairmanship of the Senate Energy & Natural Resource Committee, while Rep. Doc Hastings (R, WA 4), Chairman of the House Natural Resources Committee, announced his intention to not seek re-election
  • U.S. shale-gas production is expected to deliver an $50 billion cash infusion in the form of tax and royalty payments to strapped federal, state and local governments
  • Growth of U.S. shale oil production has and should continue to have a moderating effect on global oil prices
  • The U.S. market for fracking fluids was valued at $18.4 billion in 2012 and $26 billion for 2013. BCC Research projects the market to grow to nearly $37.3 billion by 2018, and register a five-year compound annual growth rate of 7.4% from 2013 to 2018
  • Apache Corporation announced an agreement to sell all of its operations in Argentina to YPF Sociedad Anonima for a cash payment of $800 million plus the assumption of $52 million of bank debt
  • An independent review of hydraulic fracturing in Nova Scotia will keep busy until May looking at more than 500 pieces of evidence
  • Three social action groups in Canada’s Northwest Territories have launched a petition against fracking operations in the territory
  • China has discovered a major shale gas block with a maximum daily output of 105,000 cubic meters
  • Taiwan will import 800,000 tons of U.S. shale gas every year, starting in 2017
  • Backers of shale gas scored a victory when a European Parliament committee exempted the industry from beefed-up environmental impact assessments
 
National
Sen. Mary Landrieu (D, LA) is taking over the top spot on the Energy and Natural Resources Committee, giving the oil and gas industry ally a powerful role as she campaigns for re-election. Landrieu is set to wield the committee gavel alongside another senator from the oil patch — Lisa Murkowski (R, AK) — as a result of a leadership shuffle. Landrieu has not formally outlined her priorities for the panel, but she likely would seek to advance her proposal to give states a greater share of royalties for offshore oil and gas production near their coastlines. The former energy committee chairman, Sen. Ron Wyden (D, OR) convened a hearing on the Landrieu-Murkowski revenue-sharing bill last year, but the industry-backed measure is controversial and has a relatively high price tag, two big obstacles in an election year. Landrieu stressed she would move an “inclusive, bipartisan” agenda, with a focus on creating jobs. “Everything we do will be part of helping to build the middle class and expanding opportunities for entrepreneurs in the domestic energy sector,” Landrieu said in a statement. “Increasing domestic energy production and fortifying and expanding the infrastructure that connects producers, refiners and consumers will help us achieve this goal.”
 
Rep. Doc Hastings (R, WA 4) will not seek reelection in 2014, he announced. Hastings, the chairman of the House Natural Resources Committee, was first elected to the House in 1994. “Last Friday, I celebrated my 73rdbirthday and while I have the ability and seniority to continue serving Central Washington, it is time for the voters to choose a new person with new energy to represent them in the people’s House,” Hastings said in a statement. For more information, please contact HBW Resources.
 
Sen. Ted Cruz (R, TX) detailed a plan to expand domestic energy production by beating back a slate of Obama administration regulations that he says are standing in the way of a national oil and gas boom. Decrying U.S. energy policy as stuck in the 1970s, the Texas Republican laid out the major points of sweeping legislation he is preparing to introduce in the coming weeks. “Part of the reason we see this out-of-control regulatory state is that Congress has outsourced its responsibilities — has handed it to unaccountable regulators who don’t actually have to see the American people,” Cruz said during remarks to the Heritage Action for America’s 2014 Conservative Policy Summit. The senator’s plan, which he’s dubbed the “American Energy Renaissance Act,” would prevent the federal government from undermining the American Energy Renaissance and the jobs it creates through the following measures:          
  • Prevent federal regulation of hydraulic fracturing
    • Leave regulation of hydraulic fracturing in state hands
  • Improve domestic refining capacity
    • Streamline permitting process for upgrading and building new refineries
    • Repeal the Renewable Fuel Standard
  • Improve Process to Develop Energy Infrastructure
    • Approve and allow private sector to build the Keystone pipeline
    • Remove barriers to developing and approving additional national pipelines and cross-border energy infrastructure
  • Stop EPA Overreach and the War on Coal
    • Exclude greenhouse gases from regulation by EPA and other federal agencies
    • Stop certain EPA regulations that will adversely impact coal and electric power plants
  • Force Congress and the President to Vote on EPA Regulations that Kill Jobs
    • Require both Congress and the President to approve any EPA regulation that has a negative job impact
    • Support passage of the REINS Act, separate piece of legislation not included in this bill, which would require congressional approval of all major rules and regulations.
  • Broaden Energy Development on Federal Land
    • Increase energy development on federal land
    • Provide states the option of leasing, permitting and regulating energy resources on federal lands within their borders; or
    • If states do not wish to manage energy development on federal lands within their borders, the federal leasing, permitting and regulating will be reformed to increase energy development by:
      • Streamlining permitting for development on federal lands
      • Improving certainty in the leasing and development process
      • Expanding development of energy on federal lands
    • Expand energy development in National Petroleum Reserve in Alaska
    • Expand energy development on Indian lands
    • Open up the Coastal Plain of Alaska (ANWR) for development
  • Open Offshore Exploration
    • Expand the offshore areas of the Outer Continental Shelf available for development
    • Streamline the permitting process for additional offshore exploration
  • Expand U.S. Energy Exports.
    • Expand LNG exports by facilitating permits
    • End the crude oil export ban
    • Prevent excessively broad environmental review of coal export terminals
  • Dedicate Additional Revenues to a Trust Fund for Debt Reduction
    • Direct all additional revenues generated by exploration and drilling on federal lands (excluding the share allocated to the states) exclusively to national debt reduction—“Debt Freedom Fund.”
 
The growth of U.S. shale oil production has and should continue to have a moderating effect on global oil prices, according to a Fitch Ratings report titled “Global Impact of U.S. Shale Oil.” U.S. oil production has increased by 3 million barrels per day (mmbd) since its low point of approximately 5 mmbd in 2008. Projections have future production continuing to increase through 2019, perhaps to as much as 9.6 mmbd according to EIA estimates. The increase to date is equal to about 3% of total world consumption, which is enough to have a significant impact on world oil prices by preserving the Organization of the Petroleum Exporting Countries’ (OPEC) spare capacity. Fitch notes that rising U.S. production has offset ongoing supply disruptions in the Middle East, and raised expectations of higher future supply. Combined with other factors, this has contributed to a trend of increasing backwardation in the forward price curve for oil. While many of the benefits of the U.S. oil and gas fracking revolution accrue only to the U.S., Fitch believes all oil-consuming countries benefit from the stabilizing effect of increased U.S. output on world oil prices. This includes improvements to current account balances and lower inflation.
 
According to a new technical market research report, “The U.S. market for Fracking Fluids,” from BCC Research, the U.S. market for fracking fluids was valued at $18.4 billion in 2012 and $26 billion for 2013. BCC Research projects the market to grow to nearly $37.3 billion by 2018, and register a five-year compound annual growth rate of 7.4% from 2013 to 2018. The market for fracking fluid varies considerably based on geographic region. The fastest growth rate over the next five years will occur in the Northeast region. The region predominantly produces natural gas from the Marcellus Shale, located underneath Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia and also from the Antrim Shale, underneath the state of Michigan. The target fuel type for harvest strongly influences the fracking fluid market. Harvesting shale oil through hydrofracking uses approximately 10 times more fracking fluid than harvesting shale gas. Specifically, the shale oil process consumes 10.1 gallons of water per 1 million British Thermal Units (MMBtu) versus 1.2 gal of water per MMBtu for the shale gas process. Thus, though there is a much greater amount of technically recoverable resources (TRR) for gas shales, the market for fracking fluid in the oil shale regions is just as attractive. The greatest external market drivers for fracking fluids include the activities of the well operators and oil services companies, and both not only drive the discovery of new shales, but also influence the type of hydrofracking technology implemented to maximize extraction. Other factors that strongly influence demand include the technological progress of water treatment and recycling of fracking fluids, and the establishment of new water supply channels and substitutes for water during the fracking process. For more information, please contact us.
 
Freezing temperatures are hampering U.S. natural gas deliveries this winter despite ample production of the heating fuel, exposing weaknesses in a supply network strained by unprecedented demand. The United States is home to some of the world’s largest natural gas deposits and supplies have flooded the market over the last five years, erasing concerns about dwindling output. But the coldest winter in decades has drained stockpiles quicker than ever, forced rationing, and pushed prices to all-time highs, revealing the difficulties of storing and transporting fuel across the continent. Unlike for crude oil, there is no government run strategic reserve that can be tapped in times of emergency. In many ways it is no surprise that supply for natural gas is strained. January saw two blasts of arctic cold, boosting heating demand for homes and businesses in most of the country to record highs. Other heating fuels like propane and fuel oil have suffered supply shortages. The severe cold has also revealed potential structural shortfalls that could push prices higher not just this summer as depleted inventories are restocked, but in coming years if investments are not made to increase storage and pipeline capacity. With nearly two months of winter left, more gas has been pulled from the 400 U.S. storage sites this winter than the whole of last winter, towards a level that many analysts consider dangerously low. Gas stockpiles at the beginning of the withdrawal season in early November topped out at 3.8 trillion cubic feet (tcf) but have since fallen to just 1.9 tcf, nearly 20 percent lower than the same time last year, and are expected to finish winter around 1.2 tcf, according to a Reuters poll. Many analysts see 1 tcf as the base level before a loss of pressure makes it harder to draw more gas from storage. Some power providers have asked customers to use alternative fuels like heating oil. Prices have risen higher as utilities scramble to buy gas in the spot market to preserve falling stockpiles, a rare move so early in the season.
 
Inexpensive natural gas will have a greater impact on U.S. manufacturing over the next several years than is commonly assumed, giving the U.S. a powerful — and unique — cost advantage that will benefit a wide range of industries across the full value chain, from feedstock to finished goods. This cost advantage has already started to boost investment and employment and will persist for at least five years, according to new research released by The Boston Consulting Group (BCG). While other studies have assessed the positive economic impact of rising U.S. production of natural gas on the domestic energy sector and on industries such as petrochemicals that use natural gas as a raw material, the new BCG analysis finds that virtually every manufacturer in the U.S. is poised to benefit — directly or indirectly. Low U.S. electricity prices in natural-gas-fired plants, for example, are already encouraging investment in energy-intensive industries such as steel and glass. Not yet visible are the advantages that makers of intermediate products, such as plastic-resin pellets, and makers of finished goods, such as plastic toys and plastic auto parts, will reap from cheaper inputs. Even in less energy-intensive industries, cheap natural gas will shave 1 to 2 percent off of U.S. manufacturing costs as the benefits eventually flow downstream through the value chain. The energy cost advantage is amplified by the fact that overall U.S. manufacturing competitiveness is already improving owing to relatively low labor costs compared with those of other developed economies, rapidly rising wages in China, and high productivity, as explained in previous BCG publications. The research is part of the firm’s ongoing Made in America, Again series produced by its Operations and Global Advantage practices. By 2015, natural gas will account for only 2 percent of average U.S. manufacturing costs and electricity will account for just 1 percent, according to BCG estimates. By contrast, natural gas will account for between 5 and 8 percent of manufacturing costs in Japan and in Europe’s major exporting economies, where it is more expensive, while electricity will account for between 2 to 5 percent in Japan and Europe. Cheap energy will also help further narrow the cost gap between the U.S. and China, where natural gas and electricity combined will account for 6 percent of manufacturing costs. For more information, please contact HBW Resources.
 
The Energy Information Administration said technological advances will increase the output of U.S. shale formations such as the Eagle Ford, even as it predicted the country’s overall crude oil production will decline. By implementing cutting-edge technology and experimenting with new processes, operators in domestic shale plays likely will surpass earlier production estimates, the information arm of the U.S. Department of Energy said in a monthly report. “Exploration and production companies are drilling many wells and constantly experimenting with new techniques to hydraulically fracture the tight formations,” EIA writes. “Technological innovation may cause a faster rise in drilling productivity than currently forecast.” As a result, EIA says it expects producers will overshoot the agency’s onshore estimate of 5.7 million barrels per day (bpd) for 2013 and forecast of 7.1 million bpd in 2015.
 
While the January jobs report was a disappointing for the national economy, it brought good news about growth in oil and gas. About 206,000 employees worked in the oil and gas extraction sector in January, about 1.8 percent more than in December, according to the Bureau of Labor Statistics. Nationwide, total employment was relatively stagnant at a seasonally adjusted 137.5 million. The employment story was positive across sectors of the energy industry. Manufacturing of petroleum and coal products had 112,700 employees on payrolls, a 1.6 percent increase from December. The chemicals sector grew by 1.2 percent to 796,100 people. Growth in coal mining was modest comparatively, with employment increasing just 0.2 percent to about 80,400 in January. The industry has been expanding rapidly in recent years, as the United States has experienced a boom in oil and natural gas production. Since January 2013, jobs in oil and gas extraction have increased by 6.6 percent.
 
Industrial and domestic waste materials are viable alternative sources of raw materials for engineering proppants — particles used to open rock fractures — for use in shale gas and oil recovery, according to Penn State material scientists John Hellmann and Barry Scheetz. Writing in the current issue of American Ceramic Society Bulletin, the researchers describe innovative approaches for engineering high-performance ceramic proppants from waste streams including mixed glass cullet, mine tailings and even drill-cuttings from shale gas wells themselves. According to Industrial Minerals, a market leading resource for minerals intelligence, each year more than 30 million tons of proppants are used in hydrofracturing, and demand is projected to increase to 45 million tons by 2017. Engineering proppants from waste materials offers not only a savings in costs but the additional environmental benefit of diverting millions of tons of waste from landfills. For more information, please contact us.
 
Recent advances in horizontal drilling and hydraulic fracturing techniques are being used to unlock vast stores of natural gas from underground shale-rock formations across the U.S. For government budgets, which were hammered by the drop in tax revenue resulting from the recession, this has created an unexpected and badly-needed windfall: In 2010, U.S. shale-gas production delivered an $18.6 billion cash infusion in the form of tax and royalty payments to strapped federal, state and local governments, according to a report by IHS. By 2013, those annual revenues are expected to hit $50 billion. Cumulatively over the next 25 years, unconventional gas development across the lower 48 states will generate nearly $1.5 trillion in tax and royalty payments—enough to put a significant dent in government deficits at every level. “By fully embracing America’s energy opportunity, we can accelerate growth, create millions of new jobs, free ourselves from some less-than-stable global suppliers, and create huge new revenues for government, which will help reduce budget deficits,” said Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, in his 2013 State of American Business address in January. Skeptics have questioned projections of the shale-gas industry’s production levels and economic impacts. Through 2011 and 2012, critics accused the industry of exaggerating production figures and the potential of the Marcellus Shale, in particular, where the natural gas rush began around 2008.
 
Occidental Petroleum Corp. announced that it has reached a definitive agreement to sell its Hugoton Field assets to an undisclosed buyer for pre-tax proceeds of $1.4 billion. This sale was approved by the Board of Directors as part of Occidental’s strategic review to streamline and focus operations where it has depth and scale in order to better execute the Company’s long-term strategy and enhance value for shareholders. The Hugoton Field properties comprise interests in more than 1.4 million net acres in one of the largest natural gas fields in the United States, spanning southwest Kansas, the Oklahoma panhandle and eastern Colorado. Occidental’s average net production from the Hugoton Field properties in 2013 was approximately 110 million cubic feet equivalent per day, of which approximately 30 percent was oil. Occidental anticipates the transaction will be completed by April 30, 2014, subject to regulatory approval and transaction adjustments. Proceeds from this transaction will be used to partially fund the announced increase to the Company’s share repurchase program.
 
Oil and gas pipelines and the government agencies that regulate them are making progress in improving safety and responses by emphasizing greater involvement at all levels, the National Association of Regulatory Utility Commissioner’s Natural Gas Committee learned on Feb. 10. “All sectors of the industry have embraced the goal of zero accidents through continuous improvement,” Jeffrey Wiese, associate administrator for pipeline safety at the US Pipeline and Hazardous Materials Administration, said at the session during NARUC’s 2014 Winter Committee Meetings. “Regulators don’t operate pipelines,” Wiese said, adding, “Our job is to influence those who do. Some of this involves enforcing regulations, but a lot of it involves working together.” Within the companies, he said PHMSA has found that “management has to walk the walk, and not just talk the talk,” adding, “But there also has to be commitment at lower levels.” For more information, please contact HBW Resources.
 
The EPA is vastly underestimating the amount of climate-warming methane that leaks into the atmosphere in North America from sources including natural gas operations, according to a study, “Methane Leaks from North American Natural Gas Systems” published in the journal Science. But the leaks are not enough to erase the climate benefits of switching from coal to natural gas for power generation, the researchers say, although they say the benefits in some cases will be “small” or nonexistent. The standard approach to estimating total methane emissions is to multiply the amount of methane thought to be emitted by a particular source, such as leaks at natural gas processing plants, by the number of that source type in a region or country. The products are then totaled to estimate all emissions. The EPA does not include natural methane sources, like wetlands and geologic seeps. The natural gas infrastructure has a combination of intentional leaks, often for safety purposes, and unintentional emissions, like faulty valves and cracks in pipelines. In the United States, the EPA established the emission rates of particular gas industry components, from wells to burner tips, in the 1990s. One possible reason leaks in the gas industry have been underestimated is that emission rates for wells and processing plants were based on operators participating voluntarily. One EPA study asked 30 gas companies to cooperate, but only six allowed the EPA on site. It is impossible to take direct measurements of emissions from sources without site access.
 
ICF International has released its first-quarter 2014 Detailed Production Report. The report, a new information product offered by ICF, provides a complete outlook for US and Canada natural gas, natural gas liquids (NGL), and oil production through 2035. The report’s production projections are linked to ICF’s Natural Gas-Strategic Outlook, which provides additional insight into the future of the North American natural gas market. The report contains many findings that will be of interest to oil and gas producers, field services companies, and the investment community. Some projected trends from the current report are:
  • In the short run, reduced gas-directed drilling activity will continue to slow gas production growth from “dry” gas plays such as the Haynesville Shale, the Greater Green River Basin, the Barnett Shale, and the Fayetteville Shale. However, these plays are likely to rebound as market growth firm gas prices.
  • Conversely, liquids-rich plays have fared much better in the relatively low gas price environment that persisted throughout much of 2013. Consequently, US NGL production, which has increased by more than 600,000 barrels per day during the past five years, is expected to continue to grow and will likely double by the end of the projection.
  • In today’s relatively high oil price environment, output from the unconventional oil plays, such as the Bakken, the Cline, the Niobrara, and the Eagle Ford, are likely to continue to grow.
  • While high oil prices could promote growth of bitumen production in Western Canada’s oil sands, continued delays in construction of new crude transport capability present risks.
 
ICF International has released its outlook for U.S. and Canada natural gas, natural gas liquids (NGL), and oil production through 2035 for oil and gas producers, field services companies, and the investment community. In the short run, reduced gas-directed drilling activity will continue to slow gas production growth from “dry” gas plays such as the Haynesville Shale, the Greater Green River Basin, the Barnett Shale, and the Fayetteville Shale; however, these plays are likely to rebound as market growth firms gas prices, according to ICF. Conversely, liquids-rich plays have fared much better in the relatively low gas price environment that persisted throughout much of 2013. Consequently, ICF predicts that U.S. NGL production — which has increased by more than 600,000 barrels per day during the past five years — will continue to grow, likely doubling by the end of 2035.

Backers of shale gas scored a victory when a European Parliament committee exempted the industry from beefed-up environmental impact assessments. The Parliament’s Environment Committee overwhelmingly approved an update of EU law overhauling how and when environmental impact assessments, or EIAs, are performed, calling for more public input on projects ranging from bridges and ports to intensive livestock farming. The updated law includes strengthened rules to prevent conflicts of interest in the EIAs while restricting exemptions and taking new environmental factors such as biodiversity and climate change into account when carrying them out. But a bid by members of European Parliament to include the early stages of shale gas exploration within the new EIA regime was left out at the urging of Britain, Poland, Lithuania and a handful of other EU member nations that are making big bets on shale gas.” Despite Parliament’s requests, mandatory environmental impact assessments for the extraction and exploration of shale gas, regardless of the expected yield, were not included in the agreement,” the committee said in a statement. The law initially included mandatory completion of the full EIA procedure at each stage of shale gas projects, including during the exploration of phase. Polish MEPs, however, objected, contending it would hamper research on potential deposits, and was removed over the objections of Green Party members. The measure now goes to the full House during the March 10-13 plenary session in Strasbourg. For more information, please contact us.

A new report, “Hydraulic Fracturing Markets by Resource and Well Type – Global Trends & Forecasts” has been released by RnRMarketResearch. The report estimates the hydraulic fracturing market in terms of volume and value. The volume of this market is estimated in terms of million hydraulic horse power (million hhp) and value in terms of $million. This has been broken down into component regions and further split into countries. The hydraulic fracturing market is mainly concentrated in North America, where many leading oil field service companies – Schlumberger (U.S.), Halliburton (U.S.), Baker Hughes (U.S.), and other medium and small players – operate. While the North American hydraulic fracturing market is reaching maturity, the Rest of the World’s (ROW) market is still in its infancy. Australia, China, and Poland are expected to lead the ROW hydraulic fracturing market. Apart from the regions mentioned above, other areas are not expected to show a very significant moment in the forecast period of the report i.e. 2012 to 2017. Hydraulic fracturing will prove beneficial for the developing countries such as India, China, and Brazil. As the energy demand in these countries is increasing, fulfilling this demand domestically will enhance their economic growth.
 
The Arctic region holds significant untapped oil and gas resources, but Arctic development faces major competition from unconventional oil and gas resources and other alternative hydrocarbon sources, according to a panelist speaking at the Arctic Technology Conference in Houston. Oil and gas exploration is not a new phenomenon in the Arctic. Approximately 500 wells were drilled above the Arctic Circle in the 1970s and 1980s. The oil and gas industry and academia have conducted extensive research and development into Arctic exploration and production, including full-scale modeling and testing. According to the U.S. Geological Survey’s 2008 Circum-Arctic Resource Appraisal, the Arctic contains 412 billion barrels of oil equivalent, 25 percent of the world’s oil and gas resources. The decline in oil prices in the mid-1980s prompted the oil and gas industry to abandon Arctic drilling. The Exxon Valdez incident of 1989 didn’t help the industry’s image in terms of Arctic oil and gas activity. Today, global oil and gas companies are refocusing their exploration and production efforts on the Arctic due to high oil prices in real and normal terms; the fact that oil and gas resources are becoming harder to replace due to resource nationalism; and incentives within Russia to encourage development, Edward Richardson, analyst with London-based Infield Systems, told conference attendees. “Oil and gas companies are turning to the Arctic to fill their hopper with discoveries for the next generation of projects,” said Richardson. As a result, capital expenditures for Arctic exploration and production are expected to grow between 2014 and 2018. However, some spending plans earmarked for 2017-2018 could be delayed until the early 2020s. Much of the planned capital expenditures for Arctic oil and gas activity will focus on Norway, northeastern Canada, the Russian sub-Arctic and the Russian Arctic Shelf. From 2014 to 2018, $3.4 billion is expected to be spent in Norway, $3.2 billion in northeast Canada, $3.2 billion in the Russian sub-Arctic, and $2.7 billion on the Russian Arctic shelf.
 
Argentina
Apache Corporation and its subsidiaries announced an agreement to sell all of its operations in Argentina to YPF Sociedad Anonima for cash payment of $800 million plus the assumption of $52 million of bank debt as of June 30, 2013. YPF paid a $50 million deposit on the transaction, which is expected to be completed in the next 30 days. The transaction is subject to customary post-closing adjustments. “Over the past year, Apache has taken decisive steps to focus its portfolio on repeatable and profitable long-term growth in areas where the company has industry-leading positions, such as its deep inventory of liquids-rich drilling opportunities onshore North America and international assets generating large free cash flows. This transaction is consistent with that strategy,” said G. Steven Farris, chairman and chief executive officer. According to Miguel Galuccio, YPF CEO, “This is an excellent opportunity to add to YPF assets an active operation with significant reserves of conventional gas and non-conventional resources.” For more information, please contact HBW Resources.
 
Argentine state-run oil company YPF said that it had signed a memorandum of understanding for Malaysian energy company Petronas to invest in its massive Vaca Muerte shale formation. Under the preliminary agreement, the companies would jointly develop a 187-square-kilometer (72-square-mile) swath of Vaca Muerta in the southern Patagonia region, YPF said in a statement. YPF, which was nationalized in 2012 through a seizure of Repsol’s majority stake in the company, has been seeking international partners to help it develop Vaca Muerta. Vaca Muerta is considered one of the world’s biggest known deposits of unconventional energy, with 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas resources, according to YPF.
 
Australia
Western Australia’s Department of Health has outlined its concerns about the emerging unconventional gas industry, saying it could be a risk to water supplies and the atmosphere if handled poorly. Giving evidence to a Parliamentary inquiry today, two of the department’s senior officials said hydraulic fracturing, or “fracking”, potentially posed several dangers to public health. However, the agency said it was “happy” with how the Department of Mines and Petroleum was managing the development of new regulations that would govern fracking in Western Australia. The Health Department said it was most worried about the risk of contamination to groundwater or surface water supplies in the event the chemicals used in the fracking process escaped into the environment.
 
Canada
Three social action groups in Canada’s Northwest Territories have launched a petition against fracking operations in the territory after oil giant ConocoPhillips began exploration without an environmental review. A horizontal hydraulic fracturing (fracking) exploration near Tulita, Northwest Territories, was allowed by the National Energy Board and the Sahtu Land and Water Bard. The petition was created in an attempt to have the Legislative Assembly use its authority under the Mackenzie Valley Resource Management Act to subject any fracking applications in the territory to an environmental assessment — which includes public hearings. Currently the petition is up on the assembly’s website, in a section called e-petitions, where people, community groups, and organizations can raise issues, bring them to the Assembly and allow it to consider the need for change within the territory. It has garnered 136 signatures since it launched on Friday. Other companies have applied for fracking exploration in the Sahtu region. Legislative Assembly Member Norman Yakeleya, a Sahtu Dene, said that there is still more to learn about the impacts of fracking, but insists the energy board did their due diligence, and that communities will reap the benefits of development. “We have oil and gas exploration, we have a number of companies that want to come into our communities and look for oil. They have committed dollars,” said Yakeleya. The social action groups are hoping the petition will gain traction and get the government to look deeper into the environment effects of fracking. The petition will remain open to signatures until March 7.
 
Nine people starting an independent review of hydraulic fracturing in Nova Scotia will keep busy until May looking at more than 500 pieces of evidence. The panelists laid out ground rules at their first meeting Wednesday at Dalhousie University in Halifax. The goal is to “make sure that we take every possible impact of hydraulic fracturing into account from all perspectives,” said Cape Breton University president David Wheeler, directing the review. That is a big task for an industry that operates all over the world and has been the subject of intense debate for years. The panel also wants to be transparent about its conclusions, but it will not make the meetings public. So it has chosen an approach of debating furiously in private and then releasing the results through a series of exhaustive papers. The panel members will write or commission papers on different aspects of fracking: waste water, for example, or health or economic effects. Each paper will draw on dozens of other documents and sources. The panel will read drafts, edit them at their remaining five meetings and then release them publicly as they go along. “That cycle should play out for probably seven or eight papers,” said Wheeler. “And then those papers will become the basis of much of the final report.” The estimated cost of the review is $100,000, with an added $35,000 for the aboriginal consultation. The panel members are paid a small honorarium of around $1,500 each. For more information, please contact us.
 
Enbridge Inc.’s plan to expand the capacity of its Canada-to-U.S. Alberta Clipper pipeline by 120,000 barrels per day has hit a snag, the company said, as getting a U.S. presidential permit for the project is taking longer than expected. Enbridge, Canada’s largest pipeline company, which also reported a lower-than-expected quarterly profit on Friday, said it no longer expects to get the permit amendment for the Alberta Clipper expansion in time to start pumping more oil at midyear, as it had planned. Enbridge is no longer saying when it expects to get the go-ahead for the project, which involves adding pumping capacity to the existing Alberta Clipper line, which now carries 450,000 barrels per day from Hardisty, Alberta, to Superior, Wisconsin. Once a routine administrative matter, getting presidential permits for pipelines that cross the U.S.-Canada border have become politicized as environmental groups battle TransCanada Corp.’s Keystone XL pipeline project and the expansion of production at Canada’s oil sands.
 
The International Institute of Concern for Public Health (IICPH) called for a moratorium on hydraulic fracturing. IICPH, “strongly believes that the Precautionary Principle should be invoked and applied to the practice of fracking for fossil fuel. Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation. In the case of hydraulic fracturing, there is potential for serious or irreversible harm, from toxicity of fracking chemicals and waste effluent that contaminates food supply, air, soil, surface and ground water; from radioactive chemicals released by uranium-bearing rock; and from seismic events triggered by the explosive force used in the fracking process. Therefore, we strongly call on governments where this practice is occurring or contemplated, to pronounce a moratorium on both seismic testing and mining for gas/oil in shale beds, to protect public health and environment from further harm and to ensure that further study is undertaken.”
 
China
China has discovered a major shale gas block with a maximum daily output of 105,000 cubic meters in its southwest province of Guizhou, as the country looks to make use of modern technology to meet its rising energy needs. The official Xinhua news agency, citing the Chinese Ministry of Land and Resources, said refiner Sinopec discovered the shale gas well located at a depth of 4,417 meters, the deepest so far in the country. The ministry added that the discovery marks a major breakthrough in China’s deep shale gas drilling. The project is named Dingye-2HF and is situated in Xishui county of Guizhou province. It is expected to have an average daily output of 43,000 cubic meters, according to the ministry. Another shale gas block that was located in Fuling District of southwest China’s Chongqing Municipality, yielded an output of 150,000 cubic meters per day in 2010. In 2013, China produced more than 2 million cubic meters of shale gas per day. By 2030, unconventional oil and gas production is expected to account for one-third of the country’s total production. According to a shale gas plan for 2011-2015, China aims to produce 6.5 billion cubic meters of shale gas annually by 2015. For more information, please contact HBW Resources.
 
Cyprus
China is looking at playing a role in Cyprus’ multi-billion-dollar plans to develop the island’s natural gas reserves, including possible investment in a liquefied natural gas (LNG) export terminal. Cyprus hopes to attract large investors to take a stake in its gas fields, an option which a Chinese delegation is in Cyprus to discuss. “There is very strong interest from China… in energy, in the whole value chain, upstream, downstream and midstream,” Cypriot Energy Minister George Lakkotrypis told Reuters. He said the Chinese delegation includes China Shipbuilding Industry Corporation. He said delegates were interested in the development of an LNG export terminal, including potentially a floating LNG facility (FLNG). “The Chinese delegation will also discuss taking a stake in Cypriot gas fields,” a source with the delegation told Reuters. China is seeking to access new gas sources around the world as its energy demand rises and the government encourages industry to move to cleaner gas from coal. Italian energy major ENI is also interested in Cyprus’ gas fields, and is set to sign a memorandum of understanding (MOU) with the government over the construction of an LNG export terminal. ENI has already signed an exploration and production-sharing contract with the government to search in three offshore areas, with exploration expected to begin in the second half of this year. In hopes gas can buoy the economy, which was rescued by an international bailout in March 2013, Cyprus has been planning the Vasilikos LNG export plant since U.S.-based Noble Energy discovered the Aphrodite field. The estimated $10 billion needed to build the LNG export terminal and infrastructure would be the largest investment in the island’s history. However, the project was thrown into doubt when drilling results revealed smaller reserves than initially hoped. Mean reserve estimates were reduced to 5 trillion cubic feet (140 billion cubic meters) from 7 tcf, which is not enough to justify building the LNG project unless more gas is found. The plans also face opposition from Turkey, which has said it would oppose any attempt to pre-sell Cypriot gas before a settlement over the divided island is found.
 
Ireland
The founder of shale gas firm Cuadrilla is planning a venture to frack in the Irish Sea, the BBC has learned. Dr. Chris Cornelius believes there are large volumes of offshore shale gas that could be extracted. Dr. Cornelius’ new firm Nebula Resources was awarded three licenses in the Irish Sea last month by the Department for Energy and Climate Change and hopes to begin exploration soon. “Certainly offshore shale gas is a new concept, and there’s no reason with the UK’s history of offshore development that we can’t develop these resources offshore,” he told the BBC. No longer involved with Cuadrilla, he now hopes to drill the world’s first offshore shale gas wells. The area covered by the Nebula licenses stretches west from Blackpool into Morecambe Bay, and is not far from the site where Cuadrilla has announced plans to drill and fracture two new onshore gas wells. Based on existing geological data, Dr. Cornelius believes that a considerable quantity of gas is in place – up to 250 trillion cubic feet, which would be more than Cuadrilla’s estimates for its onshore resources. There is also the possibility of finding oil. The British Geological Survey has estimated that the UK’s total offshore shale gas resources could be between five and 10 times the size of the resources available onshore.
 
Jordan
Jordan Energy and Mining Ltd /Karak International Oil have completed an interim fund raising through a rights issue underwritten by Sentient Group funds. This takes the Sentient interest in JEML to 58 percent. According to Chris Nurse, CEO, “We are very pleased that Sentient has demonstrated its continued confidence in Karak as a leading player in the oil shale sector in the Hashemite Kingdom of Jordan. The production of liquid hydrocarbons from indigenous resources will create employment and greatly benefit the balance of payments and economy of Jordan. Sentient is engaged with management and is a strategic partner for the development of the resource.” Karak International holds a concession over 35 km2 of the Lajjun deposit that contains approximately 300 million barrels of oil with a stripping ratio averaging 1:1; production is planned to increase progressively to 38,000 barrels per day. Karak also has a Memorandum of Understanding under which it is exploring a further 32 km2 area of oil shale at Al Nadiyya. For more information, please contact us.
 
Lithuania
President of Lithuania Dalia Grybauskaite expects that shale gas of the United States will reach Europe in several years. Lithuania could acquire it through the Liquefied Natural Gas (LNG) terminal in Klaipeda, which is planned to be completed in 2014.“I really hope that, maybe not at once, but especially when after two or three year shale gas from the U.S. reaches Europe, we will be very happy that Lithuania was the first to build an LNG terminal in the Baltic countries and region. Since in two and three years, the revolution of cheaper gas from shale fields will reach Europe as well,” said Grybauskaite in an interview with radio LRT. The leader of the country regards the LNG terminal as being of the same importance as Butinge Oil Terminal and is convinced that this project will have much influence in negotiation with all potential gas suppliers to Lithuania. “The project itself helps reducing prices for heating; it makes impact on negotiations with Gazprom as well. There is no wonder that as the project is about to be completed, Gazprom began speaking to us in a different way,” said Grybauskaite.
 
Poland
San Leon Energy has signed a Letter of Intent with Baker Hughes Poland to jointly begin to develop the Siekierki Gas Field1, a shale gas field in Poland. The companies plan to start gas production from four existing wells. Under the proposed agreement, it is envisaged that Baker will provide all funding necessary to recomplete and bring the wells into production. The Companies have now entered an exclusivity period during which the final work scope and commercial terms will be negotiated and agreed.
 
In order to spur foreign investment in Polish shale gas reserves, Prime Minister Donald Tusk announced that thegovernment would scrap plans to create a government owned and operated fund that would hold stakes in all shale gas licenses. Several companies were concerned that the proposed fund would muddy the understanding of the government’s rights in exploration projects. Poland is currently Europe’s most active country in exploring its shale gas potential and its legislature is expected to consider a new law to promote development in the next few weeks. For more information, please contact HBW Resources.
 
Qatar
Qatar’s liquefied natural gas industry crossed another key milestone recently when it replaced Yemen as Thailand’s biggest supplier of LNG in 2013 as the Southeast Asian country’s imports of the fuel rose 45%. Currently, Qatar is the largest exporter of liquefied natural gas (LNG) in the world with a capacity exceeding 77mn tonnes a year. It is also home to the world’s third biggest natural gas reserves. The importance of the LNG segment in particular and the energy industry in general to Qatar is quite evident from the hydrocarbon sector’s contribution to national economy. A recent report by QNB showed the hydrocarbon sector, which consists of crude oil and raw gas production, perked up and expanded to a better-than-expected 1.8% year-on-year in the third-quarter of  2013 owing to higher production of natural gas due to LNG facilities coming back to full operational capacity after some downtime for maintenance over the last year. But over the next few years, Qatar may see increasing competition in the global LNG market with new production facilities coming online in Australia and North America.
 
Taiwan
Lin Sheng-chung, president of Taiwan’s state-run oil and gas company CPC Petroleum, said that the country will import 800,000 tons of shale gas every year, starting in 2017. According to Lin, “Prices for natural gas go up and down every now and then. US gas is a lot cheaper than from the Middle East so this could be a good deal.” Initially shale gas will come from Louisiana and later from ports that are close to the Pacific coast as this could save transport time by around two weeks. CPC is also in talks with companies like Exxon Mobil, Shell, Chevron and Petronas regarding developing shale gas in the US. It is possible that $1 billion are invested in a project in which CPC will own about 5 percent stake.
 
United Kingdom
Plans to explore for shale gas on a site in a national park located southwest of London have been temporarily put on hold by the local authority after the application received an unprecedented number of responses. The British government is strongly supporting the development of shale gas by offering favorable tax terms as it seeks to reduce dependence on gas imports. Opposition to the unconventional drilling method has been growing in Britain, however, on grounds that it is harmful to the environment and that one project had triggered earth tremors. The South Downs National Park Authority has requested oil and gas explorer Celtique Energie Weald to submit more details on noise and geological aspects of its application to drill for oil and gas and, if found to be present, later extract shale gas on a site at Fernhurst. “National Park will be submitting a request for further information,” the authority’s chief executive, Trevor Beattie, said at a planning meeting, according to his speech sent to Reuters. “This will put the Fernhurst application on hold whilst the applicant provides the additional information we require.” A spokesman for Celtique Energie said the company was planning on submitting the additional information requested and that it was normal practice for an authority to seek further details. The application received an unprecedented number of comments, a spokeswoman for the national park authority said.
 
Britain must streamline shale gas planning rules to cut delays or it will fail to achieve significant output and will miss out on potential tax revenues, energy consultancy Poyry said. The country is in the early stages of exploring for unconventional gas to counter growing dependence on imports and a government-commissioned geological study has estimated it could have shale resources equivalent to several hundred years of demand. The government, eager for tax revenues and new jobs, is supporting shale gas by offering favorable tax rates and promising returns for communities that host exploration. But Poyry warned that red tape was unnecessarily delaying shale gas development. “If the regulatory and permitting process is not made more efficient, then it may not be possible to achieve shale gas production at any scale,” Poyry analysts said in the report, which was also given to members of the economics committee in the House of Lords, parliament’s second chamber, last week. Poyry estimated it takes around 6-8 years for a shale gas developer to start commercial production in Britain after receiving a license – if there are no legal challenges. The recommended time is around four years, Poyry said. The consultancy suggested creating a one-stop-shop for shale gas permitting to cut down on timing and allow for a potentially high demand in well applications over the coming years. Poyry analysts estimate that by 2024 around 100 new wells will need to be approved each year to pave the way for significant shale gas production. For more information, please contact us.
 
INEOS Europe AG has announced a new ethane purchase agreement with CONSOL Energy in the USA. Ethane will be transported through the Mariner East infrastructure and imported by sea for use in INEOS’ European cracker complexes. Supplies will start from 2015. “This contract adds to our supply portfolio providing for long-term sourcing of advantageously priced US ethane for our European crackers. It will allow us to continue to consolidate the competitiveness of INEOS’ ethylene production in Europe.  We are excited about our new business relationship with CONSOL Energy and look forward to future opportunities between our companies” commented David Thompson, INEOS Procurement & Supply Chain Director. INEOS is the first company to establish seaborne intercontinental ethane transportation, having earlier announced the completion of agreements with Sunoco Logistics for capacity in the Mariner East pipeline and terminal system, with Range Resources for the purchase of ethane, with Evergas for the construction of new customized vessels and with TGE Engineering for the construction of a new tank in its Rafnes cracker. INEOS is presently conducting engineering studies for the construction of an ethane terminal in Grangemouth.
 
 
 
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

HBW Resources Contact Information
 
If you have any general questions, please contact us anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report and other reports can be viewed on the Intelligence Tab on the HBW Resources website at:http://hbwresources.com/intelligence/.  Hope you all 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
Web: http://www.hbwresources.com 

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Highlights and Reports of Domestic and International Shale Development and Oil and Gas Extraction Using Hydraulic Fracturing

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.
 
Alaska
ExxonMobil, BP, ConocoPhillips and TransCanada have selected the Alaskan town of Nikiski for a proposed LNG plant and terminal for a huge project to export natural gas from the North Slope. The companies are looking to acquire more than 600 acres to develop a large-diameter gasline and gas liquefaction plant that together could help restore Alaska as an energy powerhouse. The projects anticipated cost is between $45 billion to $65 billion or more. As the current proposal stands, natural gas will be piped from the North Slope to Nikiski, where it would be converted into liquid form and shipped via massive, refrigerated tankers for export to Asia.
 
California
If anyone had lingering doubts about where California Gov. Jerry Brown stands on fracking, the state’s top oil and gas regulator removed them. Speaking at a panel discussion on fracking, the head of California’s Department of Conservation, Mark Nechodom, said the governor backs the controversial oil-production technique. His comment came after the moderator asked each of the panel’s participants to spend five minutes discussing his or her organization’s position on fracking. “I can probably save us five minutes,” Nechodom replied. “Gov. Brown supports hydraulic fracturing.” He then stopped talking, letting his statement sink in with the audience.
 
Hydraulic fracturing operations in the waters off California’s coast break multiple environmental laws, a green group warned in a letter to two federal agencies. The Center for Biological Diversity asked the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement to halt offshore operations that use unconventional drilling, including the process known as fracking. Oil and natural gas company operations in the Pacific Ocean need to go through a supplemental National Environmental Policy Act (NEPA) analysis, the letter said. That would look at potential threats to environment and wildlife in the area, “which hosts the world’s densest summer concentrations of blue whales,” Center for Biological Diversity said. The Associated Press in August reported that companies including Venoco Inc. and Chevron Corp. have fracked offshore wells. Federal regulators have permitted at least a dozen instances of hydraulic fracturing in the Pacific Ocean since the late 1990s, AP reported, citing federal documents obtained through Freedom of Information Act requests. The letter sent to the agencies said that under NEPA, agencies not only must perform analyses prior to taking federal action but must conduct supplemental review whenever “[t]here are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts.”
 
A new series of U-T San Diego reports that illustrate in detail how fracking could change the future of California’s economy is the latest installment in a U-T San Diego-led, bipartisan effort aimed at addressing the most pressing issues facing the Golden State. “The Golden State is home to enormous oil reserves in sedimentary rock formations thousands of feet below ground known as shale. The Monterey Shale formation, beneath the Central Valley and a coastal and offshore chunk of the Los Angeles Basin, contains more than 15 billion barrels of oil that can be accessed using fracking, according to a 2011 U.S. Energy Information Administration analysis. That’s nearly two-thirds of the total oil shale reserves in the entire nation.” The main goal of the bipartisan project is to offer insights into the issues that continue to plague the state and to ignite a dialogue on how to repair these problems – from city and state financial crises to school reform, neglected infrastructure, a challenging business climate, and environmental policies.
 
Colorado
The Fort Collins City Council is formally opposed to a ballot issue that would impose a five-year moratorium on fracking within the city. Council members approved a resolution stating the proposal is not in the city’s best interests on a 4-3 vote. Members Lisa Poppaw, Bob Overbeck and Ross Cunniff were in opposition. All three said their opposition to the resolution wasn’t based so much on the controversial issue of hydraulic fracturing, or fracking, but on whether the council should take any position on a citizen-initiated ballot issue.
 
Protect Our Loveland filed a motion for preliminary injunction in 8th Judicial District Court seeking an order that would require the City Council to put an initiative related to hydraulic fracturing to the voters as soon as possible through a special election. The Protect Our Loveland initiative sought a Nov. 5 ballot measure to ask voters whether or not to impose a two-year moratorium on hydraulic fracturing, or fracking, within city limits. In court documents, Protect Our Loveland argued that the City Council’s inaction on Sept. 3 went against state statues that call for the initiative to either be adopted by the council or placed on the ballot once a final determination of petition sufficiency had been established. With a vote of 5-4, the City Council moved to defer the decision on ballot placement until a case related to the City Clerk’s approval  of the petition for the initiative was resolved, an option that had been presented among four others in a council memo from City Attorney John Duval. Deadlines to place the measure on the Nov. 5 coordinated election with Larimer County have passed, but in court documents requesting preliminary injunction from the court, Protect Our Loveland seeks a special election no later than Jan. 24, 2014.
 
The Lafayette City Council unanimously approved three resolutions outlining the city’s stances on the local items set to appear on the November ballot. Council members reserved their disdain for Ballot Question 300, which deals with oil and gas extraction within city limits. Council members, who said they don’t support the practice of hydraulic fracturing that Question 300 aims to ban, overwhelmingly opposed the ballot question based on what they described as fundamental flaws in its language. The resolution passed in opposition to Question 300 states that the question’s language illegally “attempts to effectively amend both the Colorado and United States Constitutions regarding the status of ‘persons.'” The resolution questions both the timing and need for Question 300’s objectives. The resolution acknowledges the three-year moratorium implemented by Lafayette City Council this summer on new oil and gas wells in the city, as well as the fact that no new oil and gas wells have been established in the city since it adopted comprehensive regulations in 1994. The resolution also points out that the ballot question takes away property rights, which might force the city to compensate oil and gas companies for millions of dollars in profits they could – rightfully, through state law — make from wells in the city.
 
As residents prepare to vote in November on a five-year fracking ban in Broomfield, another pro-fracking action group has joined the mix. Broomfield Balanced Energy Coalition, or BBEC, is a bi-partisan group that stated it wants to bring balance to the discussion by supporting fracking while also supporting Broomfield’s new oil and gas safety regulations. Led by former state Rep. Don Beezley, a Republican, and former RTD board member Lee Kemp, who last year ran for state Senate as a Democrat, the group plans to speak out against a fracking ban while supporting other energy methods, such as wind and solar. The group also supports Broomfield’s new agreement with oil and gas drilling company Sovereign, which imposes strict environmental and regulatory standards in order for the company to continue drilling within city limits. Similar to Broomfield’s other pro-fracking group, It’s Our Broomfield, Too, the BBEC said it opposes a fracking ban. Yet the group also wants to show that fracking is not a partisan issue.
 
Hawaii
A bill aimed at prohibiting enhanced geothermal power systems has received initial support from the Hawaii County Council. The Council voted 7-0 in support after amending the legislation to increase penalties. The Council must vote on the bill one more time, the Hawaii Tribune-Herald reported. The bill was drafted to prohibit enhanced geothermal systems, but it would apply to all forms of hydraulic fracturing.
 
Illinois
The Illinois Department of Natural Resources is moving along with implementation of the Hydraulic Fracturing Regulatory Act.  DNR has activated a new website that allows companies to register with the Department.  As you may recall, Section 1-35(a) of the HFRA requires a permit applicant to first register with the Department at least 30 days prior to submitting a permit application.  The website and registration information can be found at www.dnr.illinois.gov/mines/Pages/HydraulicFracturing.aspx.  Once the registration is accepted, companies will then be able to apply for individual fracturing permits which should occur early next year.  In terms of rule making, DNR is about two months ahead of their original time frame and draft rules are being reviewed internally.  They are planning to allow interested parties to review these rules before they are officially filed.  If DNR remains ahead of schedule, it is possible that the first permits could be issued in April, ahead of the previous June 2014 deadline.
 
New York
The Catskill, NY Town Board has been asked to prohibit use of fluids containing hydraulic fracturing materials as highway deicing agents. The request was made during a meeting, when members of the grassroots group Green Renewable Energy and Environmental Network said the ban would help protect the environment from radioactive material.
 
Unshackle Upstate has released a five-point plan for job growth and lower taxes in the parts of the state that aren’t New York City. The plan focuses primarily on eliminating or changing certain taxes and surcharges. But Unshackle officials are also highlighting the potential benefits fracking the Marcellus Shale. According to the report, developing the Marcellus Shale in New York would generate approximately $78 million in state revenue in 2014-2015 and revenues would grow in future years as natural gas development activity increases.
 
Former Secretary of State Hillary Clinton’s 80-minute lecture and discussion at upstate Hamilton College on Friday touched on dozens of issues. Late into her lecture, Sec. Clinton referred to a report that the U.S. was on track to surpass Russia in domestic oil and gas production. That’s good news, Clinton said. “What that means for viable manufacturing and industrialization in this country is enormous,” she said to the crowd of 5,800 in Hamilton’s athletic field house.
 
North Dakota
The government shutdown has thrown a wrench into management activities at the Fort Berthold Indian Reservation in North Dakota and stalled oil development on federal lands across the region. The state Department of Mineral Resources reports that Fort Berthold, located atop the resource-rich Bakken Shale in western North Dakota, had 1,004 active oil and gas wells in July. But the Bureau of Indian Affairs can no longer manage leasing and compliance without funding from the federal government, according to Interior Department spokeswoman Jessica Kershaw. Additionally, Kershaw said the federal Bureau of Land Management “will not process applications for permits to drill and will only maintain minimal staff for inspections and enforcement on currently producing wells.”
 
Leaders from the Northwest Territories are touring the booming Bakken region of Saskatchewan and North Dakota to get a taste of what might be in store if the territory’s own shale oil play takes off. David Ramsay, the minister in charge of resource development in the territory, said that the economic impact has been apparent, from the brand new trucks driving around Estevan, Sask., to the homes, roads, hotels and offices under construction south of the border. The potential jobs created by developing the Canol shale formation in the Central Mackenzie Valley would be welcome in a region plagued by high unemployment. But there are challenges well, such as a higher cost of living and increased pressure on government services.
 
Ohio
The Salem City Council voted down a zoning amendment that would have restricted shale drilling within city limits. Council agreed that the issue should be returned to the Rules and Ordinance Committee after Councilwoman Cyndi Baronzzi Dickey explained that council has no legal authority to restrict the drilling which is under the jurisdiction of the Department of Natural Resources through state level legislation. She said she believed passing the amendment would leave the city vulnerable to lawsuits that could cost the city significant money. She added that if council was passing the amendment only as a statement that may never be acted upon, then the amendment is a “waste of time and effort, and a little misleading to the citizens of Salem.”
 
Steve and Lea Harper, property owners near Seneca Lake in Guernsey County, filed suit in Franklin County Common Pleas Court to stop the Muskingum Watershed Conservancy District (MWCD) from leasing public land and selling public water for horizontal, hydraulic, high-volume slick water fracturing.  The “final straw” came last February, when the conservancy district approved the lease of Seneca Lake, the third largest inland lake in Ohio, to Antero Resources for fracking. The MWCD subsequently approved a pipeline to siphon two million gallons a day of reservoir water to sell for fracking, thus destroying the water forever to reap conservancy district profits. So far, the MWCD has made $78 million in bonus payments for leasing and projects to make hundreds of millions more in royalties plus hundreds of thousands of dollars in windfall profits by selling reservoir water. In a final attempt to avoid the lawsuit, environmental organizations and concerned citizens organized to testify to the MWCD Conservancy Court, which has a governing role over the MWCD staff and board. The court declined to hear the pleas of those organized to protest the conservancy district’s decisions. After exhausting all attempts to avoid litigation, the Harper family has petitioned for a declaratory judgment from the court asking for a determination of the legitimacy of the MWCD to engage in the risky and poorly-regulated industrial practice of fracking. The lawsuit also seeks a ruling on whether the conservancy district has violated the terms of the deed which gave federal land to the MWCD for public stewardship, and whether the Ohio Department of Natural Resources has a legal responsibility to consider environmental effects likely to be caused from fracking. The lawsuit also names the Ohio Department of Natural Resources and Antero Resources Appalachian as defendants.
 
A spending oversight panel approved a $257,287 contract yesterday for the purchase of additional seismic equipment designed to monitor activity near fracking-waste disposal wells. The state Controlling Board asked Tom Johnston, chief financial officer of the state Department of Natural Resources, a few questions before approving the deal. Once the devices are installed, he said, monitoring is a continuous process mainly done through text messaging, which alerts the department if an event occurs.
 
Ashtabula is about to benefit from the Utica shale boom, as a Texas energy company and a technology firm from Columbus plan to build a gas-to-liquids processing plant in the city. Houston-based Pinto Energy said it will spend about $300 million to build the plant, which is expected to be completed and online in early 2016. The plant would take processed natural gas from the Utica and Marcellus shale plays and convert it into diesel fuel, high-end lubricants and industrial waxes used in cosmetics, pharmaceuticals and other products. Once finished, the plant will employ about 30 people, but Pinto said it expects to employ about 400 construction workers to build it. Pinto figures the plant also will support more than 100 jobs among suppliers, contractors and others not directly involved with on-site construction.
 
Oklahoma
Onshore US-focused junior explorer Northcote Energy reported that it plans its first horizontal well targeting the Mississippi Lime formation on its wholly-owned Mathis lease in Oklahoma before the end of the year. Northcote said the first well location has been estimated as containing proved, undeveloped (P1) reserves of 200,000 barrels of oil along with 1.7 billion cubic feet of natural gas.
 
Pennsylvania
Approximately 78 percent of the producing horizontal-drilled Marcellus Shale natural gas wells already have paid for themselves, a Penn State professor says. Terry Engelder, a professor of geosciences, said his calculations include royalty payments and are based on an average well cost of $5 million and the price of natural gas being at $3.50 per thousand cubic feet. It shows the Marcellus is not a financial disaster that some have made it out to be, he said. “Once the well is paid off, gas production greatly adds to the future cash flow of a company,” he said. As of June 30, the Department of Environmental Protection website listed 3,693 producing natural gas wells in Pennsylvania. Over the past five years, at least 4.8 trillion cubic feet of gas has come out of the Marcellus Shale in Pennsylvania, Engelder said. According to DEP statistics of the top wells, six in Susquehanna County are producing more than 20 million cubic feet of gas a day. There is an impression activity in the Marcellus has slowed down but many wells are non-producing because they are not connected to infrastructure, Engelder said. He stands by his estimate that 489 trillion cubic feet of gas is recoverable in the Marcellus Shale but he said at the present low price of natural gas it will not be economically feasible to extract all of that.
 
Pennsylvania Gov. Corbett’s latest campaign ad, Planet, focuses on the benefits of the Marcellus Shale to the state. The ad states that the Marcellus Shale industry has given back to the state in the form of more than 200,000 jobs, $1.7 billion in corporate taxes and $400 million returned to local communities.
 
Pennsylvania’s Department of Conservation and Natural Resources has awarded a contract to Penn State University to review and provide a summary of the publicly available existing geophysical data for the South Newark Basin, the shale that lies beneath most of Bucks and Montgomery counties. The contract began July 1 and will be completed by June 30, 2015. Natural gas development in this region hinges on this governmental study. The South Newark Basin was ranked the third-highest region of untapped natural gas resources on the East Coast in a United States Geological Survey report. Shortly after that report was issued in June 2012, Bucks County lawmakers, led by Sen. Chuck McIlhinney, tucked a measure into the state budget that places a moratorium on natural gas drilling within the South Newark Basin. The moratorium says the state Department of Environmental Protection cannot issue permits to drill in the South Newark Basin until the Department of Conservation and Natural Resources can study the area or until Jan. 1, 2018. During the past year, local officials and environmental leaders have been critical of DCNR, arguing that state agency has not responded to requests for an update on when a study would begin and how input from township officials and environmental groups might be included.
 
delegation of 163 Colorado business and nonprofit leaders and government types are exploring Pittsburgh for three days to learn about how the city has revitalized itself and is taking advantage of its new economy, particularly energy, medical, technology and arts and entertainment. The energy discussion was topical for the Colorado leaders — most of whom were from the Denver metro area — because, like Pennsylvania, the state is developing its own shale resources.
 
Hilcorp Energy Co. has taken legal steps to access natural gas beneath the 14.6 acres Bob Svetlak owns near the Ohio border without his consent, arguing a law more than five decades old gives it the right to combine his land with others into a drilling unit. If Hilcorp succeeds, it would be the first time in Pennsylvania’s shale boom that a driller used the tactic, and it could lead to more widespread use. Hilcorp is using a legal maneuver known as forced pooling, in which neighboring plots of land are combined into a single unit for drilling. In geologic formations deeper than the Marcellus shale, the 1961 law allows drillers to combine gas rights into pools, even if property owners oppose. Any use of forced pooling likely will ignite a public outcry. Attempts to extend broad pooling powers to Pennsylvania’s Marcellus shale drillers have been met with swift opposition — even Gov. Tom Corbett, a supporter of gas drilling, opposed the idea in 2011, calling it “private eminent domain.” Svetlak’s property is part of 3,267 acres in Pulaski and neighboring Shenango in Mercer County where Hilcorp wants to drill. The area has not attracted much drilling, but Hilcorp wants to tap the Utica shale, a geologic layer thousands of feet below the Marcellus. The company acquired the right to drill on all but 35 acres, which includes at least four properties whose owners don’t want to lease or who leased with another company, according to the Aug. 26 filing Hilcorp made to the state Environmental Hearing Board.
 
Shale-gas drilling has potential to affect aspects of life in America from immigration and trade policy to education, experts gathered in Pittsburgh said. But the government, industry and labor experts cautioned that public policy debates involving a spectrum of stakeholders need to occur in order for the United States to reap the full potential of its shale gas. “With the return of affordable natural gas and natural gas liquids in the United States, the whole world picture has changed. This is probably the single greatest opportunity we have to restore the middle class in America,” Peter Molinaro said at the Consumer Energy Alliance’s Pennsylvania Energy and Manufacturing Summit. Molinaro, vice president and senior advisor for government affairs for Dow Chemical Co., said Dow reversed a decision to close an ethylene cracker plant on the Gulf Coast and began planning for a second plant when company officials realized the wealth of shale gas discoveries. The shale boom has put Pennsylvania in competition with Alaska and Louisiana to be the country’s second-biggest gas producer. Pennsylvania drillers produced 1.4 trillion cubic feet of natural gas from the shale in the first half of 2013, according to the Department of Environmental Protection. State records show companies drill about 100 horizontal wells a month into the Marcellus, and they are now targeting the Utica shale, a deeper geologic layer. The industry has 36,100 employees in Pennsylvania. In addition to the chemical sector, industries such as aluminum, fabricated metals, fertilizer, foundries, glass, iron and steel “have been advantaged by this,” Molinaro said. A manufacturing rebound and the need to build infrastructure could require the United States to reconsider immigration policies to fill workforce needs, industry and labor experts said.

Texas
Stabilis Energy and Flint Hills Resources have announced plans to build up to five natural gas liquefiers to serve oil field operations, with the first facility planned to launch in the Eagle Ford Shale in January 2015. The first liquefied natural gas production facility will be located in George West, Texas and produce up to 100,000 gallons of liquefied natural gas per day, the companies said. They also plan to launch facilities in North Dakota and West Texas in 2016 and 2017, pending land procurement agreements. Additional facilities would come online by 2017.
 
More than a third of all new natural gas wells since 2005 were drilled in Texas, and the state uses almost four times as much water for hydraulic fracturing as any other state, according to a study by a Texas environmental group.Operators in Texas drilled 13,540 wells in 2012, and have drilled more than 33,000  since 2005, according to an Environment Texas report, which focuses on potential hazards and pollution associated with the drilling technology.
 
West Virginia
West Virginia severance tax collections are running about 15 percent ahead of last fiscal year while most other general fund revenue streams are lagging behind.  Through Sept. 20, the state had collected $95.4 million in severance taxes compared with $82.9 million at the same time last year, Mark Muchow, deputy secretary of the state Department of Revenue, told more than 200 people assembled for the annual West Virginia Economic Outlook Conference. This year’s growth comes even as taxes in fiscal year 2013 were down $63.55 million from 2012, Muchow said. Severance taxes from coal were down in 2013 while taxes from natural gas were up, he said. The same pattern was evident in the first two months of this fiscal year. Severance taxes accounted for 10 percent of the state’s general fund revenues in 2013, up from 6 percent in 2003, he said.
 
National
General Electric has announced that it has technology which can help reduce the chances of toxic waste spills during the fracking process. This technology, it claims, has the potential to cut the costs of water treatment in half. The technology is based on membrane distillation, a type of desalination. It is believed it could make it unnecessary to dilute millions of gallons of wastewater, or to transport the water for treatment or disposal. Companies reuse this water after it has been pumped underground and picked up chemicals. GE researchers estimate from pilot-scale tests that they will be able to cut fracking wastewater treatment costs by as much as 50%, but only in places where the wastewater is too salty for current methods or in very dry regions.
 
The U.S. boom in natural-gas production is luring investment from foreign manufacturers eager to tap a cheap, abundant supply of fuel and feedstocks. Companies from the U.S. and abroad have invested or are planning to invest billions of dollars through the rest of the decade in plants that would churn out chemicals, fertilizers, plastics, metals and fuel from gas. Many foreign companies, alone or in joint ventures with U.S. partners, are taking advantage of gas that costs a fraction of what it does in Europe or Asia to expand production in the U.S. Boston Consulting Group estimates that international companies will invest at least $50 billion through the end of the decade on projects that take advantage of low-price natural gas.
 
The U.S. is overtaking Russia as the world’s largest producer of oil and natural gas, a startling shift that is reshaping markets and eroding the clout of traditional energy-rich nations. U.S. energy output has been surging in recent years, a comeback fueled by shale-rock formations of oil and natural gas that was unimaginable a decade ago. A Wall Street Journal analysis of global data shows that the U.S. is on track to pass Russia as the world’s largest producer of oil and gas combined this year—if it hasn’t already. The U.S. produced the equivalent of about 22 million barrels a day of oil, natural gas and related fuels in July, according to figures from the EIA and the International Energy Agency. Neither agency has data for Russia’s gas output this year, but Moscow’s forecast for 2013 oil-and-gas production works out to about 21.8 million barrels a day.
 
The energy director with The Grattan Institute says opposition to the natural gas industry doesn’t make environmental sense. Tony Wood says the boom in coal seam and shale gas has affected the renewable energy sector, but he says that’s likely to be relatively short term. “What’s happened is there is a lot more gas than anyone thought and in the short term, at least in the USA, they’re using an enormous amount of gas as a way of reducing their emissions. Tony Wood says despite being a fossil fuel, gas has a vital role to play environmentally. “The objective isn’t to get rid of gas, or get rid of coal, or introduce renewable energy.  “The objective is to reduce greenhouse gas emissions, and to do that at the lowest possible cost over time.  “And if we can meet our environmental objective, if gas has a role to play, that should be fine.”
 
Environment America released a report, “Fracking by the Numbers, Key impacts of dirty drilling at the state and national level” that claims to quantify the impacts associated with oil and gas development in the United States, including production of toxic wastewater, water use, chemicals use, air pollution, land damage and global warming emissions.
 
More than half of Americans don’t know the recent oil boom has increased domestic energy production, according to a new poll, which also showed increased opposition to fracking. Fewer than half of respondents to the national Pew Research Center poll — 48 percent — correctly said U.S. energy production has increased in recent years. The poll also found that from March to September, opposition to the increased use of hydraulic fracturing grew from 38 percent to 49 percent.
 
International
North Africa may be “the next big opportunity” after North America for oil and gas production from shale, if drilling costs can be reduced, said Repsol (REP) SA Geological Studies Director Eduardo Negri. “The current drilling and completion costs are still high in North Africa,” Negri said. “This is something that can be worked on if service companies take special effort in preliminary evaluation steps in order to show how they can reduce costs, thinking about massive operations in the future.”
 
Argentina
Argentina is investing heavily in shale oil, hoping to ride it to energy self-sufficiency and end dependence on imports that cost billions of dollars each year. Argentina is a pioneer in shale oil exploration and now the third biggest producer of it after China and the United States, according to US figures. Its state oil concern YPF two years ago started production at Loma la Lata, a windswept Patagonian plain under which lies clay-rich soil that contains shale oil. It is part of a larger shale-rich expanse called Vaca Muerta, or dead cow. To produce it for market, unconventional oil requires the same hydraulic fracturing and horizontal drilling techniques as shale gas. And now, YPF is using its shale oil know-how to speed into operation about 200 unconventional wells in the Loma la Lata, Vaca Muerta area every year. It plans to spend $15 billion in a decade, reaching 1,500-2,000 of these wells.
 
Australia
The Australian Petroleum Production and Exploration Association (APPEA) to put forward policy initiatives to help the country maintain its international competitiveness. The Canberra-headquartered organization, which represented the country’s oil and gas production industry, stated in its “2013 Policy Priorities” that the major challenge to continued growth in Australia’s oil and gas industry is a “high-cost local environment and the emergence of new liquefied natural gas (LNG) competitors in East Africa, North America and elsewhere [which] will make it much harder to win market share and attract investment.” APPEA called for a market-based energy policy. For the industry to deliver substantial, economy-wide benefits in terms of investment, jobs, and regional development, the government “must resist calls for policy interventions that force non-commercial outcomes.” Australia’s LNG industry is a “source of comparative advantage that should be harnessed, not hindered.” Another policy priority concerns the industry access to resources. Continued development of the energy sector depends on uninterrupted access to oil and gas resources onshore and offshore and any restriction must be consistent with an “evidence-based, scientifically driven policy approach,” APPEA said. APPEA called for a reduction in red tape and green tape as Australia’s oil and gas industry suffers from duplicative and inefficient regulatory approval processes, often due to an overlap between federal and state government regimes. These cause unnecessary project delays and increased costs without bringing additional environmental benefit. APPEA noted the overlap and duplication of responsibilities between offshore regulator for environmental and safety issues National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) and the Department of Sustainability, Environment, Water, Population and Communities. The association suggested accrediting NOPSEMA as the approving authority to improve regulatory inefficiency.
 
The Australian Government’s intentions to become a ‘one-stop shop’ to aid the continued development of the country’s energy and resources industry has been welcomed by key oil and gas producer BHP Billiton. Minister for industry Ian Macfarlane, who took over the role following last month’s federal election, outlined these plans during a speech at the Australian National Conference of Resources and Energy (ANCRE) in Canberra. Macfarlane described the newly created department of industry as a “one-stop shop” for several sectors in Australia, including oil and gas. He urged government and industry to now “work together collectively” and turn Australia into an energy and resources superpower.
 
Belarus
The Belarusian industrial group Belorusneft and the British company Toros will set up a joint venture to prospect and possibly extract shale oil and shale gas in the Pripyat oil-and-gas bearing basin, Belorusneft’s press service told BelTA. The source underlined the importance of the project. If successful at extracting the Belarusian company’s first shale oil and gas, the project will help determine prospects of shale oil and shale gas extraction in the country as a whole more precisely. BelTA has been told that the Belarusian-British joint venture will be set up by March 2014: time is needed to register the enterprise and get a license for the land.
 
Canada
Quebec isn’t entirely sure about this whole fracking thing. Amid reports from across the continent of groundwater pollution, air pollution, deforestation, and other environmental side effects of hydraulic fracturing, the Canadian province has placed a moratorium on the practice beneath the St. Lawrence River. That doesn’t sit well with Lone Pine Resources, a Delaware-based company that has long eyed the gas and oil that’s locked up in the Utica shale beneath the grand waterway. The company claims it spent millions to get the appropriate permits to drill, and now that the fossil fuels seem out of reach, it says Canadians need to pony up more than $250 million in compensation. The company last month submitted a claim to an international arbitration system seeking damages because of “Quebec’s arbitrary, capricious, and illegal revocation” of its “valuable right to mine for oil and gas under the St. Lawrence River.” The claim is based on Chapter 11 of the North American Free Trade Agreement, which allows private companies to sue governments when laws hurt their expected profits.
 
Malaysia’s state oil firm Petronas plans to spend $35 billion to develop shale gas assets in Canada and build a liquefied natural gas export terminal linking the country to energy hungry Asian markets, company officials said. The estimate is $15 billion higher than the figure previously announced, since it includes costs associated with drilling wells in British Columbia and taking over Canadian explorer Progress Energy Resources for $5 billion, they said.
 
Negotiations aimed at ending a week-long blockade of Route 134 in Rexton by shale gas protesters are scheduled to resume in Moncton. Premier David Alward, three members of his cabinet, and Elsipogtog First Nation Chief Aaron Sock met with about 15 representatives of the protesters for three hours Sunday in a Moncton hotel. “People had an opportunity to voice their concerns we had an opportunity to discuss what we’re focused on doing as a government,” said Alward after the meeting.
 
Ecuador
Lawmakers in Ecuador authorized the extraction of oil from Yasuni National Park, a pristine Amazon reserve. After a 10-hour debate, a loyalist congress approved President Rafael Correa’s plan by a 108 to 25 margin, with four legislators absent. Correa in August announced that he was abandoning a unique plan to persuade rich countries to pay Ecuador not to drill in the Yasuni, saying wealthy nations had failed to pledge enough money.
 
France
U.S.-based energy firm Schuepbach Energy is asking the French government for 1 billion euros ($1.36 billion) in compensation for blocking its shale gas exploration permits in France, an industry newsletter said, citing unnamed sources. French President Francois Hollande has repeatedly ruled out shale gas exploration during his presidency, confirming a ban on hydraulic fracking introduced by his Conservative predecessor. France’s top court said this summer it would examine the challenge to the ban by Schuepbach Energy, which held two exploration permits that were cancelled when the law was passed in 2011. The ruling is expected on Oct. 11.
 
India
State-run explorer Oil and Natural Gas Corp (ONGC) aims to commence commercial drilling for shale gas next year, its chairman said. “We hope to take up at least 10 wells for parameters this year and to start commercial drilling next year,” Sudhir Vasudeva told reporters. Govt approved a policy to allow state-owned companies to start exploration for shale oil and gas last month, as the world’s fourth-biggest energy consumer moves slowly to seek alternatives to expensive oil imports. Of about 356 blocks held by ONGC and Oil India Ltd, India’s upstream regulator has said 176 could hold shale resources. India could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of its gas demand, according to the U.S. Energy Information Administration.
 
Mexico
U.S. natural gas exports to Mexico will more than double in 3 years — from an average of 2 Bcf/d in 2013 to 4.5 Bcf/d in 2016, according to a report from Barclays Capital. The expected increase comes as natural gas demand in Mexico has been strong and is poised to accelerate further, driven by new power generation and industrial use, and enabled by “a massive expansion of the country’s pipeline network,” said the report. Eight major pipelines with a total capacity of 5.6 Bcf/d are scheduled to start operations within Mexico from 2013 to 2017, the report said. Several will deliver gas to areas currently lacking sufficient distribution infrastructure, and will spur new demand. Three of these pipelines will connect directly to the U.S. pipeline grid, and are mirrored by US expansions. Mexican demand for gas is expected to increase by 2.7 Bcf/d by 2018, of which 1.4 Bcf/d will be for gas-fired generation, according to Platts unit Bentek Energy. Mexican demand last year stood at 8.1 Bcf/d, up from 5.9 Bcf/d in 2005. To meet this demand, U.S. pipeline export capacity to Mexico is expected to increase by 4.3 Bcf/d over the next five years. Meanwhile, a report by Goldman Sachs earlier this year put the jump in export capacity at 4.8 Bcf/d by 2015.
 
Pakistan
Pakistan Prime Minister Nawaz Sharif said that his government was formulating a new policy to harness abundant shale gas reserves to address the country’s acute energy shortage. Pakistan was keen to have investment from foreign companies in energy ventures, Sharif said.
 
Poland
Some 72 percent of Poles living near shale gas exploration areas support the fuel’s extraction, according to a poll carried out by TNS Polska for the Ministry of the Environment. The poll also found that 60 percent of the respondents approve of shale gas extraction close to where they live. Shale gas extraction is opposed by 7 percent of the respondents. There were 105 valid exploration licenses as of September 1, 2013, held by 35 Polish and foreign entities. So far 48 exploration boreholes have been made. Altogether the licensees plan to make 335 boreholes by 2021.
 
Russia
Gazprom has increased its investment program for the current year by 46 percent to $32 billion, Interfax news agency reported, citing sources, heightening concerns about the state-run company’s ability to rein in rising costs. The news agency said that Gazprom has increased its planned investments to 1.03 trillion roubles ($32.01 billion) from 705 billion roubles envisaged previously, mainly due to burgeoning long-term financial costs. The new budget is to be reviewed by the board of directors on October 29. It was not immediately clear where the rise in investments came from but earlier this year Gazprom acquired 90 percent of Moscow power generation company MOEK, with a bid of around $3 billion.
 
Ukraine
A second regional council in Ukraine approved a government draft for a $10 billion shale gas production-sharing agreement with U.S. energy major Chevron, clearing the way for it to be signed. Deputies in Lviv region voted by 66-to-3 in favor of the draft, which calls for shale exploration in the Olesska field in the west of the country. A council in the neighboring Ivano-Frankivsk region, whose approval was also necessary, backed the deal last month. The Olesska deal with Chevron will be the second shale agreement in Ukraine, following one signed earlier this year with Royal Dutch Shell for exploration in Yuzivska in the east. Speaking to the council, Energy and Fuel Minister Eduard Stavytsky said that Chevron would spend several years and $350 million to assess reserves at Olesska which covers 5,260 square kilometers. Total investments including extraction after exploratory drilling could reach $10 billion, he said.
 
United Kingdom
France’s Total SA is looking at shale gas opportunities in Britain, Chief Executive Christophe de Margerie said Tuesday in the first strong sign of interest from an oil major in the U.K.’s nascent industry. Mr. de Margerie said the company is in talks to take a stake in a project in the U.K. and is also considering bidding in next year’s onshore licensing round. Inspired by the U.S. shale boom, the U.K. government is keen to boost the nation’s energy security in the face of declining domestic natural gas output.
 
UK Energy Minister Michael Fallon has said that the country could see up to 40 wells being set up in the coming years to explore shale gas potential, adding that it would be irresponsible not to let companies find out the commercial viability of the reserves, despite the worries of many environmentalists about the impact of fracking. The minister also said that he wants the UK to focus on local energy supplies as the UK has not been self-sufficient for gas since 2004.
 
The energy industry must emphasize lower bills as well as job creation if it wants UK public support for fracking, according to a consumer survey published by market research firm Viewbank. The research, conducted in the wake of high-profile protests against possible fracking for shale oil in West Sussex, England, by Cuadrilla Resources, shows that 67 percent of adults would support fracking if it delivered lower bills and 64 percent would support it if it created jobs. Around 65 percent of those surveyed would back fracking if it was proved to be important for delivering future energy needs. However, the research also showed that only 39 percent of consumers believe fracking will cut household energy bills and 42 percent believe the activity will cause environmental damage. A telling statistic from the survey was that only 16 percent of respondents would definitely support fracking near to where they live, although another 41 percent said they would need to find out more before accepting fracking in their area.
 
British shale gas driller Cuadrilla said it had quit a potential exploration site in northern England over concerns that its operations would disrupt bird life and will select an alternative site nearby. The decision to leave the site at Westby, Lancashire, means the company will consult with local residents on another suitable site to drill for shale gas deposits that could be hydraulically fractured.
 
The UK’s reserves of shale gas are not enough to make it self-sufficient in gas and will also “not be a panacea for bringing down energy bills.” That’s the conclusion of a new report that is being sent to the UK Parliament’s House of Lords Economic Affairs Committee. Conducted by Bloomberg New Energy Finance, the analysis states that the UK cannot hope the mimic the success of the shale gas boom in the US. It shows that the costs of shale gas extraction in UK fields such as Bowland in Lancashire are likely to be between $7.10 and $12.20 per MMBtu, compared to $5-6 per MMBtu for large US fields such as Marcellus and Barnett. The report states: “Our conclusion is that even under the most favorable case for shale gas production, with production reaching 4.5bn cubic feet per day in the mid-2020s, and low demand driven by a power sector emissions target of 50gCO2/kWh, the UK will not be self-sufficient in gas. “The reliance on continued imports will ensure that UK gas prices remain tied to European and world markets and so the direct impact of shale on the cost of electricity in the UK will be limited.”
 
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
 
HBW Resources Contact Information
 
If you have any general questions, please contact us anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report, the HBW Greenfield Offshore Energy Report, the Forsgren Environmental Report, and daily updates and new Member profiles can be viewed at the new Intelligence Tab on the HBW Resources website at: http://hbwresources.com/intelligence/.  Hope you all 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
Web: http://www.hbwresources.com

 
 

 

HBW Resources: Ollison Hydraulic Fracturing Report. Highlights of Shale Development from Colorado to Algeria

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.
 
Alaska
New regulations to oversee hydraulic fracturing of oil and gas wells in Alaska could be issued later this year by state regulators, officials said at a public hearing. The regulations, proposed by the Alaska Oil and Gas Conservation Commission, would require the approval of regulators before fracturing is conducted, notification of landowners and testing of water wells within a half-mile radius, and the full disclosure of chemicals in the hydraulic-fracturing liquids. The proposed regulations, which will incorporate well-bore-integrity rules, are intended to let state officials keep up with technology and to ensure that public concerns are addressed, said Cathy Foerster, chairman of the commission. Industry representatives complained at the hearing and in written testimony that the proposed Alaska fracking regulations are stricter than those in place or proposed in other states. They objected to the specific chemical disclosures because they would reveal proprietary formulas and trade secrets. For more information, please contact HBW Resources.
 
California
The Obama administration has tentatively settled an environmental lawsuit over oil and gas drilling in Monterey and Fresno counties with an agreement to conduct a statewide study of hydraulic fracturing and its possible effects on water and wildlife. The tentative settlement was announced Monday in a federal court filing in San Jose. The filing did not provide details, but attorney Brendan Cummings of the Center for Biological Diversity noted that the U.S. Bureau of Land Management had promised in earlier court papers to conduct a new review of fracking after a magistrate blocked two oil leases in April. California is about to start regulating the practice in legislation that Gov. Jerry Brown plans to sign. SB 4 introduced by Sen. Fran Pavley (D, District 27) will require the state to conduct its own study of fracking’s impacts, and will also mandate oil companies to obtain a specific permit to frack a well, notify neighbors in advance and disclose the chemicals used in the process.
 
California Governor Jerry Brown, preparing the state for development of the largest shale-oil reserves in the U.S., signed into law, SB 4, which regulates hydraulic fracturing, a process that has been criticized by environmental groups. The third-largest oil-producing state will for the first time require permits to use the drilling technique, which injects millions of gallons of chemically treated water underground to break up rock and free trapped oil and natural gas. Energy companies will have to disclose the ingredients in fracking fluid and notify nearby landowners of their plans. The governor said he will direct the state’s Conservation Department to develop a permitting program that groups permits together based on factors such as known geological conditions and environmental impacts. Brown noted alongside his signature, “I am also directing the Department of Conservation when implementing the bill to develop an efficient permitting program for well stimulation activities that groups permits together based on factors such as known geologic conditions and environmental impacts, while providing for more particularized review in other situations where necessary.” For more information, please contact us.
 
Colorado
Colorado’s oil and gas regulatory agency agreed to expand the acreage in formally designated sensitive wildlife habitat areas that require the industry to consult with state wildlife officials and avoid impacts before drilling wells. The COGCC’s governor-appointed commission unanimously voted to approve the rule revisions that will add a total of 2.2 million acres to already established sensitive wildlife habitat areas statewide, including 680,000 acres in protected elk winter concentration areas and nearly 530,000 acres in protected bighorn sheep winter range. The revised maps also add more than 400,000 acres to Gunnison sage grouse sensitive wildlife habitat. Oil and gas drilling projects proposed within the boundaries of sensitive wildlife habitat areas require the companies to consult with Colorado Parks and Wildlife before drilling to minimize impacts.
 
The Lafayette City Council instructed City Attorney David Williamson to draft resolutions stating its opposition to a proposed ban on hydraulic fracturing in the city and a utility occupation tax, which would replace the annual franchise fee paid by Xcel Energy. Anti-fracking activists, led by Lafayette-based East Boulder County United, submitted a successful petition this summer to place a question on the city’s November ballot asking voters whether the practice should be banned within city limits. Fracking opponents claim that drilling, particularly the water-sand-chemical mix used during the process to loosen up deeply buried pockets of oil and gas, risks contaminating water and air and harming human health. The council this year passed a three-year moratorium on new oil and gas drilling activity in the city. The utility occupation tax would replace the annual $740,000 Xcel Energy franchise fee with an occupation tax as part of an effort to decouple the city from the utility and fund renewable energy programs. For more information, please contact HBW Resources.
 
Kansas
Shell Oil has confirmed what it had hinted earlier: that it is pulling out of Kansas completely, selling off 45 producing wells and 600,000 acres of leases in Barber, Harper, Kingman, Pratt, McPherson, Sedgwick, Sumner, Rice and Reno counties. It’s the most dramatic in a series of high-profile departures of major exploration companies that have given up on the Mississippian formation, or at least the Kansas side of it. Chesapeake Energy, Encana and Apache have been gone for more than a year. Tug Hill Operating and Reeder Energy filed their last intent to drill in March, and Midstates Petroleum in April. Wichita-based Woolsey Petroleum, a local player in the horizontal Mississippian play, remains an active driller, but hasn’t filed new plans for a horizontal well in more than three months. Others, however, have remained active, including Sandridge Energy of Oklahoma City, Source Energy Mid-Con of Highlands Ranch, Colo., and Unit Petroleum of Tulsa.

Maryland
Two meetings have been scheduled on the impacts of developing the Marcellus Shale in Western Maryland. The gatherings, sponsored by the Department of Health and Mental Hygiene, are scheduled for Tuesday, September 24th at Frostburg State University’s Compton Science Building from 7:00 PM until 10:00 PM. The second one is set for Saturday, October 5th from 1:00 PM until 4:00 PM in the Auditorium at Garrett College in McHenry. At both meetings, DHMH says citizens are invited to present their views and suggestions for developing the Marcellus Shale. DHMH has been asked by the Maryland Department of the Environment to look into the public health impacts of developing the Marcellus Shale. DHMH will oversee the study, but the actual research will be done by the University of Maryland Institute for Applied Environmental Health. For more information, please contact us.

Michigan
The Graham Sustainability Institute at the University of Michigan released 7 technical reports about Hydraulic Fracturing in Michigan. The studies examine seven critical topics related to the use of hydraulic fracturing in Michigan, with an emphasis on high-volume methods: technology, geology and hydrogeology, environment and ecology, public health, policy and law, economics, and public perceptions. Hydraulic fracturing in Michigan has been going on for years. However, these projects have been on a much smaller scale than the types of projects looked at in the assessment. For example much of the fracking being done in Michigan right now consists of wells that are about 2,000 feet deep and that use about 50,000 gallons of fluid. The assessment focuses on wells that are about 10,000 feet deep and that can then shoot out in different directions. These wells use anywhere from 100,000 gallons to 20 million gallons of fluid. Only 19 projects of this scale have been completed so far in Michigan.
 
New Jersey
The Highland Park Borough Council passed an ordinance to explicitly ban hydraulic fracturing, apparently becoming the first in the New Jersey to do so. Ordinance No. 13-1851, an ordinance banning hydraulic fracturing in the Borough of Highland Park, County of Middlesex, State of New Jersey, states, “Drilling for natural gas, using the drilling technique of hydraulic fracturing and exploring for natural gas beyond the reconnaissance phase is prohibited within the Borough of Highland Park, Middlesex County, New Jersey.”  Without any gas companies idling on Route 27, the day-to-day local implications aren’t obvious, but environmentalists and borough officials hope it sends a message to the governor and to parts of the state where fracking, and peripheral issues surrounding the practice, is a bigger issue. Environmentalists also want the New Jersey to ban the byproducts of fracking from coming into the Garden State. For more information, please contact us.
 
North Carolina
Local governments in North Carolina wouldn’t be able to control natural gas drilling with zoning codes, according to a panel writing the state’s drilling rules. Under the “Mining and Energy Commission’s Local Government Regulation Study Group’s” Summary of Recommendations, cities and counties would be able to enforce local ordinances to regulate light, noise, odors and other side effects of drilling. However, communities would have to control drilling locations through setbacks — the distance required between a well and nearby buildings — and other tools, said James Womack, the chairman of the North Carolina Mining and Energy Commission. Communities wouldn’t be able to use zoning to separate drilling sites from residential areas, for instance, if it would prohibit drilling, Womack said. The proposal on local governments also says municipalities should take steps to moderate the impact of gas drilling, including allowing pipelines in road rights of way and using maintenance agreements with drilling companies to pay for road upkeep. Cities could also use weight limits for local roads, truck routes and restrictions on the timing of truck traffic to offset the impact of drilling-related traffic. The proposal will be sent back to the state Legislature for action next year.
 
North Carolina has turned down a pair of federal grants, one of which would have helped monitor water quality in areas where drilling for natural gas is likely to take place, provoking criticism from advocates who say the cash-strapped agency needs the money. In an email dated Sept. 3, the state informed the U.S. Environmental Protection Agency that it does not need a $222,595 grant for water quality monitoring in areas seen as candidates for hydraulic fracturing, or “fracking,” a method of natural gas drilling that has spurred environmental concerns in other states. The same email also declines a $359,710 grant to establish a long-term wetlands monitoring network in the coastal plains and Piedmont areas of the state. That money would have helped track how wetlands changed over time. For more information, please contact HBW Resources.
 
North Dakota
Calgary-based Aux Sable Midstream LLC and Summit Midstream Partners LP of Dallas said up to 25 million cubic feet of natural gas daily will be sent from Burke and Mountrail counties along a 2,300-mile pipeline system. Alliance Pipeline Ltd.’s pipeline runs from western Canada to the Chicago hub, where the gas is sold to Midwest and East Coast markets. In North Dakota, the pipeline is fed by the Prairie Rose Pipeline owned by Aux Sable. Summit spokesman Marc Stratton said about 17 million cubic feet of North Dakota natural gas is being shipped at present under an existing pact that has been in place since late 2011. Stratton said work is being done by Summit to bump the gathering capacity of natural gas in western North Dakota to about 30 million cubic feet daily by mid-2014.
 
North Dakota is projected to ultimately produce just under 1.6 million barrels of oil per day, but risk factors could threaten that production, the state’s top oil and gas regulator said. Department of Mineral Resources Director Lynn Helms told more than 800 people attending the North Dakota Petroleum Council’s annual meeting in Grand Forks that the industry is entering a final phase of development but should expect some bumps along the way. The main risk factors come from the federal government, Helms said, such as possible federal regulations on hydraulic fracturing. Another threat comes from a lack of capacity in the refining market that could soften prices of Bakken crude, Helms said. With the Bakken and the Eagle Ford shale in Texas producing more light, sweet crude, refineries can handle an additional 650,000 barrels of oil per day, Helms said. North Dakota produced 874,460 barrels per day in July. Planned refineries in North Dakota won’t make much of a dent in that supply. A refinery under construction near Dickinson will have the ability to process 20,000 barrels per day. That lack of refinery capacity means Bakken crude will need to compete with heavy, sour crude for refining and companies will need to incorporate potentially lower prices into their budgets for 2014, Helms said.
 
Ohio
Representatives of the Sierra Club and the organization for Frack-Free Ohio asked Richland County Commissioners to support legislation in the Ohio House, HB 148, and Senate, SB 178, that would ban the use of deep injection wells to dispose of brine from horizontal hydraulic fracturing for gas and oil. They also asked commissioners to change local regulations and eliminate the use of oilfield brine for road de-icing. Richland County currently allows brine from vertical drilling to be applied to road grit and road surfaces according to state regulations. The county requires the person or company applying the brine to provide a statement of where the brine comes from and test results showing that the levels of any toxic chemicals in the brine are within EPA limits. Commissioners generally supported Baker’s and Thorp’s requests but said they wanted to take some time to review their material before passing a resolution or changing brine regulations. For more information, please contact us.
 
Reps. Sean J. O’Brien (D, District 63) and David Hall (R, District 70) are preparing legislation to give state tax credits to people and companies who buy or convert trucks and cars to burn both natural gas and gasoline. The proposal, conceived with the assistance of an industry group, would also create a multimillion-dollar loan program to help companies converting fleets of vehicles buy and install the refueling equipment. The tax credit would pay for up to 50 percent of the cost of the conversion, which is $5,000 to $10,000 for cars and light duty trucks and up to $40,000 for large trucks. Under the proposal, the bill’s tax credits would disappear after five years. Also, over those five years, the state’s gasoline road tax would gradually be applied to CNG purchases, up to 28 cents for the amount of CNG equal to a gallon of gasoline. At least 11 states, including Indiana, Pennsylvania, West Virginia and Kentucky, have such incentive programs. For more information, please contact HBW Resources.
  
Less than a month after its passage, the Nile City Council voted unanimously to rescind the “community bill of rights,” a controversial measure opposing hydraulic fracturing within city limits. The ban was passed in its first reading by a 7-0 vote at the Aug. 21 council meeting, largely due to fears by several city officials that oil and gas companies were buying land in residential neighborhoods which it planned to use for deep wells. However, experts in the oil and gas industry have assured city officials they will not drill in residential neighborhoods, as there is not enough room to accommodate the five acres necessary for a safe drill. Councilman Steve Papalas pushed for the bill of rights’ passage in August. After voting to rescind the ordinance, he apologized to fellow councilmembers for pushing them into a decision before proper research was done. While the bill of rights was repealed, council also unanimously voted to adopt a resolution stating the position of the city concerning shale gas and oil extraction. In that resolution, council re-affirmed its stance against drilling in residential areas.
 
The state’s highest court will soon hear a case that for the first time challenges a law Ohio legislators passed in 2004 giving the Ohio Department of Natural Resources sole authority to permit and regulate oil and gas drilling. The pre-emptive state law — passed with House Bill 278 — almost entirely limits both local government’s authority and ability to restrict oil and gas drilling. Only within the last three years have opponents stepped up their attack on the law as drilling has increased dramatically in the state with the arrival of horizontal hydraulic fracturing. The case originated at the trial-court level in 2011 in Summit County after the city of Munroe Falls filed a complaint against Ravenna-based Beck Energy. In its initial complaint, Munroe Falls alleged that after the company had started to drill on private property there, it failed to file for local drilling permits and did not comply with zoning and right-of-way ordinances. For more information, please contact HBW Resources.
 
Belmont County taxpayers will see a $3 million windfall as county commissioners agreed to enter into an oil and gas lease with Rice Drilling. The agreement calls for Rice to pay the county $7,500 per acre for the mineral rights to 406 acres, with 20 percent royalties.
 
Members of the Athens County Board of Elections have declined to elaborate on their reasons for rejecting a local anti-fracking ballot initiative from going to voters this November. Meanwhile, the group that originally filed the initiative petition says that it’s now too late for the measure to go on the Nov. 5 city ballot.
 
Pennsylvania
State Rep. Daryl D. Metcalfe (R, District 12), the chairman of the House Committee on State Government, said he has asked the State Ethics Commission to investigate conflict of interest allegations against the wildlife agency official, William A. Capouillez, who is responsible for natural gas development on state game lands. The Inquirer reported last month that Capouillez, who oversees oil and gas leasing on 1.4 million acres of public game lands, operates a prosperous business in his off-hours negotiating gas leases for private landowners. Rival gas-leasing agents have complained for years that Capouillez’s state job as director of the Bureau of Wildlife Habitat Management gives him an unfair advantage. For more information, please contact us.
 
Pennsylvania’s economic development team wants drivers to start filling up their cars with natural gas – and they’re willing to hand out taxpayer money to kickstart the trend. The Commonwealth Financing Authority awarded more than $2 million in grant money plus a $169,000 loan for five natural gas fueling stations. The goal is that incentivizing fueling stations will, in the long term, continue to grow the state’s Marcellus Shale-related job markets, said Steve Kratz, spokesman for the Department of Community and Economic Development. All the recent Commonwealth Financing Authority fuel station awards went towards publicly accessible CNG stations. Sunoco will receive more than $500,000 for installing a CNG refueling station at the Pennsylvania Turnpike King of Prussia Service Plaza, and another in nearby Upper Merion Township. Clean Energy Inc., will add another station to an existing CNG fuel stop in Upper Merion Township with around $196,000 in state grant money. Clean Energy is receiving another grant for around $436,000 to add a CNG fueling station to a gas station in Hamilton Township in Adams County. The other two projects are in Franklin County and Philadelphia.
 
Allegheny County Councilwoman Barbara Daly Danko proposed legislation that would create a three-year hold (ending on January 1, 2017) on the development of natural gas beneath county parks in order to investigate concerns and prepare “a comprehensive study” about who holds the rights to the subsurface minerals. At present, according to the motion submitted to the Council, “it is unclear whether or not the County owns the mineral rights to all County park land and if restrictive covenants exist which bear on the ability to lease those rights leaving the County at risk of a lengthy and costly legal entanglement that could render any royalty revenue moot.” This request comes after county officials discussed the possibility of allowing drilling in the 1,200-acre Deer Lakes Park. Matt Drozd, another councilmember, has proposed an ordinance that would allow the voters to decide whether or not to have drilling for natural gas under the county’s parks.

The United States Geological Survey (USGS) published a pair of reports, which are part of larger series aimed at documenting and quantifying the landscape disturbance from Pennsylvania’s natural gas drilling industry. The USGS-funded project has been underway for a little over two years and has documented a reduction of Pennsylvania’s interior forests – habitats for sensitive plant and animal species. So far, the federal government has examined 14 Pennsylvania counties where drilling is occurring and plans to publish several more reports before the end of the year. Forest fragmentation can occur with the development of drilling infrastructure like roads and pipelines.
 
State Sen. Jim Ferlo (D, District 38) is calling for a moratorium on state-issued fracking permits. Ferlo, who represents portions of the Alle-Kiski Valley as well as his Highland Park neighborhood in Pittsburgh, wants a study commission appointed to “conduct an unbiased study” of fracking issues. They include water source protection, air quality regulations, disclosure of chemicals used in fracking, and the state’s permitting process. The moratorium would only be partial and temporary, giving the state enough time to pass stricter regulations before it opens the door for new drilling permits, Ferlo said. The bill would mandate several improvements to the new regulations that the Legislature set in last year’s oil and gas reforms, Act 13. Ferlo called that law weak. For more information, please contact HBW Resources.
 
US Federal Energy Regulatory Commission gave unanimous backing to the Tennessee Gas Pipeline Company’s Rose Lake expansion project, which is expected to add about 230,000 Dt/d of firm pipeline capacity along the company’s 300 Line in northeastern Pennsylvania. TGP previously said that it would aim to bring the project into service by November 1, 2014. The expansion is expected to cost around $91.8 million. For more information, please contact us.
 
The Municipal Authority of Westmoreland County could earn up to $6.5 million this year in royalties from Marcellus shale gas drilling on its 8,000 acres. And officials want to make sure they receive every penny they are owed. So the authority board hired a consultant to audit the books for the 32 deep wells, along with other gas-producing facilities, on its properties. Royalties from gas production have been a boon for the utility, which sells water to more than 125,000 customers in five counties. Through the first quarter of the 2013-14 fiscal year, the money received from gas royalties has outpaced expectations and has bailed the authority out of a projected revenue shortfall. Revenues from water sales fell $750,000 short of projections for the first four months of the current fiscal year. Meanwhile, gas royalties have been $500,000 over budget — keeping the authority’s finances near the break-even point.
 
To position its students for in-demand energy jobs, the Pittsburgh Technical Institute (PTI) next month will open the doors of its new Energy Technology Center. The $3.5 million, 15,392-square-foot steel structure will house three new programs designed to put students on track for jobs in Pennsylvania’s energy sector, including its lucrative Marcellus Shale industry. The building was paid for in part by a $750,000 grant from Pennsylvania’s Redevelopment Assistance Capital Program, which funds, among other things, projects that aim to boost regional economic development.
 
Texas
Texas oil production from just two fields, the Eagle Ford shale and the Permian Basin, is likely to total well over 2 million barrels of oil per day (MMbopd) this year, if recent output trends continue, and could approach 2.5 MMbopd sometime in 2014, according to analysts. Production in the Eagle Ford play was about 599,000 barrels of oil per day (bopd) during the first six months of 2013, according to figures from the Texas Railroad Commission. Projections by the Wall Street Journal are that output will reach 930,000 bopd sometime this year. The Eagle Ford is expected to move well past the 1-million barrels-of-oil-per-day threshold by mid-2014. Meanwhile, output in the Permian Basin, which contains both shale plays and conventional plays, was about 890,000 bopd during the first half of 2013. Output is projected reach as high as 1.4 million bopd sometime in 2013, according to Stephen Shepherd for investment banking firm Simmons & Co. International. For more information, please contact HBW Resources.
 
Plains All American Pipeline and Enterprise Products Partners said they will expand their Eagle Ford joint-venture crude oil pipeline. The expansion will boost the pipeline’s capacity to 470,000 barrels per day of light and medium crude oil grades to accommodate additional volumes expected from Plains’ Cactus pipeline currently under construction. The Eagle Ford pipeline expansion is expected to cost about $120 million and should be in service in the second quarter of 2015.
 
New technology will play a key role in boosting output from the Eagle Ford Shale and other unconventional oil fields. Schlumberger Ltd. found it could increase the number of perforations that produce oil and gas in a group of test wells by redesigning the way they were hydraulically fractured. Using similar techniques, and better integrating the rapid advances in drilling technology, will play an increasing role in oil production. Schlumberger, working with a group of producers, tested a new frack design on a group of 12 wells this year and was able to get oil and gas to flow from 82 percent of the perforation clusters that reached into the surrounding rock, compared to 64 percent in a group of comparison wells. Varying the lengths allowed each frack stage to concentrate on rock with similar stress levels. That allowed the water-sand mix to break the rock more evenly. In a traditional frack, the water has a tendency to break down the lowest-stress rock, leaving other rock unbroken. For more information, please contact us.
 
A new report from environmental group Earthworks maintains government regulators are ignoring evidence that oil and gas fracking in the Eagle Ford shale harms the public. The Washington-based group says its report “Reckless Endangerment in the Eagle Ford Shale: Government Fails, Public Health Suffers and Industry Profits from the Shale Oil Boom,” is based on state reports and independent environmental testing focused on the Eagle Ford’s Karnes County. Earthworks’ report alleges that regulators documented dangerous pollution in the Karnes County but took insufficient action to warn residents and penalize polluters.
 
Economists credit the Eagle Ford Shale – and all that has trickled down from it – as the catalyst for development in Victoria. The county was named one of the top 10 metro areas in the nation to see growth in gross domestic product, according to data released last week from the U.S. Bureau of Economic Analysis. Gross domestic product rose 8.7 percent last year in Victoria. The national average increased 2.5 percent. Development of oil and natural gas in the Eagle Ford Shale added more than $61 billion in revenue in South Texas in 2012 and supported 116,000 jobs, according to a study released by the Center for Community and Business Research, which is hosted by the University of Texas at San Antonio. The study focused on 14 producing counties most active in the Eagle Ford Shale development area and six adjacent counties, which includes Victoria. For more information, please contact HBW Resources.
 
Empyrean Energy PLC, a British exploration and production firm focused on U.S. assets, is participating in a pair of new Eagle Ford Shale wells, officials say. The participation comes through its interest in the Sugarloaf Block A assets operated by ConocoPhillips Co.’s ConocoBurlington Resources Oil & Gas Company LP subsidiary. The Baker Trust-4 well, in which Empyrean has a 2.45 percent working interest, was drilled in August and is awaiting completion. Its net drilling cost to Empyrean is $225,000. The Marlene Olson-3 well, in which Empyrean has a 0.85 percent working interest, will be drilled later this month at a cost of $100,000.
 
National

A run of more stable U.S. natural gas prices is slowing the pace of gas storage projects along the Gulf Coast and other parts of the country. U.S. gas storage projects under development – most of them bloom along the Gulf Coast – have slipped in planned capacity to about 708 billion cubic feet of gas from 980 billion in late October last year, according to SNL Financial. Texas has about 69 billion cubic feet of planned working gas storage capacity, the fourth-largest amount in the U.S. Meanwhile, about half of the new storage capacity in the U.S. is slated to come online in two years, but 32 percent of that has not moved beyond the announcement stage into construction. What’s more, much of the remaining projects do not have an estimated completion date yet and projects that planned to develop 198 billion cubic feet of natural gas storage capacity have been postponed. For more information, please contact us.
 
The Great American Energy Boom is having a major ripple effect on the shipbuilding industry, which thanks to a 1920s maritime law, is busier than it has been in decades. Some ten supertankers are currently under construction at U.S. shipyards, with orders for another 15 in the pipeline. That may not seem like a huge number, but considering there are only about 75 such tankers plying American ports now, it represents a genuine boat-building boom. It’s because of a specific sector of the U.S. economy that is also booming: natural gas production. The fuel must be transported, even within the country, either by rail, pipeline or ship. And if it is by ship, the ship must be American-made and American-manned, according to the 1920s Merchant Marine Act, also known as the Jones Act. Matthew Paxton, president of the Shipbuilders Council of America, said up to 3.3 million barrels are shipped out daily from the Gulf Coast, destined for ports along the east and west coasts, causing huge demand for tanker ships. The Aker Philadelphia Shipyard recently announced that it invested a total of $115 million to construct four tanks and plans to build eight in total. Constructing one tanker, which could be more than 600 feet long and nearly 200 feet wide, can cost upwards of $100 million. Once they are up and running, the ships more than earn their keep. Transport companies pay up to $100,000 per day over a five-year contract to lease them. Currently, the shipping industry contributes $36 billion to the economy.
 
A new report, “Reckless Endangerment while Fracking the Eagle Ford Shale,” released by Earthworks looks at the oversight of fracking-enabled oil and gas development. It claims that regulators, charged with protecting the public, are actively avoiding evidence that fracking is harming the public. The report focuses on Karnes County, TX in an attempt to illuminate a growing national pattern of absentee regulators. For more information, please contact HBW Resources.

Federal
EPA withdrew a proposed rule under the Toxic Substances Control Act which would have disclosed the identity of all chemicals in health and safety studies, even if they were protected as confidential trade secrets. Currently, all new chemicals must be registered with EPA, along with related health and safety studies, but when a company designates a chemical as a trade secret, its identity is redacted from studies released to the public. This protection is important to the oil and gas service industry, which frequently creates new chemicals for use in their processes to improve hydraulic fracturing fluid. Environmental groups criticized EPA’s decision, arguing that redactions make the health and safety studies less valuable to the public.
 
Environmental inspections of oil and gas facilities on public lands have soared since 2007, but federal investigators said that the government is doing a poor job of targeting the riskiest sites. In a new report, the Government Accountability Office faulted the Bureau of Land Management for not including information about the environmental inspection history of many wells in its central database for tracking oil and gas facilities on public lands. As a result, the inspection prioritization process “does not have sufficient information to ensure that wells receiving inspections are those that pose the greatest environmental risk,” said the GAO, Congress’ investigative arm. Other problems include “inconsistent documentation of inspections and enforcement actions and challenges with retaining and hiring environmental staff in some offices.” For more information, please contact us.
 
International

Algeria
An assessment study by the National Agency for Hydrocarbon Resource Promotion (Alnaft) has claimed that Algeria should be looking to invest around $300 billion to develop its shale gas deposits. Alnaft has called on Algeria to drill 12,000 wells in the next 50 years in a bid to produce around 60 billion cubic metres of gas annually. Current estimates indicate that this could be achieved with an investment of $300 billion, which includes $200 billion necessary to cover drilling costs. For more information, please contact HBW Resources.
 
Argentina
Germany’s Wintershall, the oil and gas arm of chemicals group BASF, has signed an agreement to search for oil in Argentina’s “Vaca Muerta” field, considered one of the largest shale reserves in the western hemisphere. Wintershall and the oil and gas company of the province of Neuquen, Gas y Petroleo de Neuquen, plan to explore an area of 97 square kilometres in the “Vaca Muerta,” formation, the company said. Both partners hold 50 percent in the joint venture and Wintershall will operate the search while Gas y Petroleo de Neuquen remains the owner of the exploration and exploitation permit. The state-owned Argentinean company already has a licence to search for oil and gas in areas of Vaca Muerta. That enables Wintershall to obtain exploration rights before the province auctions rights to international investors in other areas of the field next year.
 
Australia
In a first for the state of Tasmania, South Australian company, Petragas, has applied for an exploration license for shale oil and gas in the state’s southern midlands. There has been 22 objections submitted to Mineral Resources Tasmania against the proposal and those objections are now being worked through by the government organization and Petragas. A new group, Our Tasmania, has been formed to monitor the plan to explore an area of 4000 square kilometers in southern Tasmania for shale oil and gas.
 
BHP Billiton Ltd. and Houston-based Apache Corp.’s $1.5 billion natural gas project in western Australia has started producing. Reuters is reporting the Macedon development began operating last month. Melbourne, Australia-based BHP Billiton is the country’s largest oil producer. Apache expects net daily production to reach 35 million cubic feet per day from the project, according to information on the company’s website. Apache has said it plans to invest about $1.9 billion in Australia this year. For more information, please contact us.
 
Azerbaijan
Azerbaijan signed contracts to supply European buyers with gas, offering an alternative supply source to Russia towards the end of the decade. Earlier this year, Azeri state oil company SOCAR and partners including BP and Statoil selected the Trans Adriatic Pipeline (TAP) for potential gas deliveries to Europe, following more than a decade of planning, dealing a blow for Russia’s aspiration for tighter control over gas routes. SOCAR said that buyers of Azeri gas from its Shah Deniz II project are Shell, Bulgargas, Gas Natural Fenosa, Greek DEPA, Germany’s E.ON, French GDF Suez , Italian regional utility Hera Trading, Swiss AXPO and Italian Enel. The developers signed 25-year accords to sell more than 10 billion cubic meters of gas a year from the field’s second phase starting in 2019.
 
Canada
Apache Corp. said it would sell various oil and gas producing properties in Canada in two separate deals worth $112 million. The Houston energy company is selling its Hatton, St. Lina, Marten Hills, Snipe Lake, Valhalla, and a portion of its Hawkeye producing properties. They are primarily dry gas developments in Saskatchewan and Alberta and comprise about 4,000 operated and 1,300 non-operated wells. The wells averaged daily production of 38 million cubic feet of natural gas and 750 barrels of oil, condensate and natural gas liquids, net to Apache, during the second-quarter 2013. For more information, please contact HBW Resources.
 
Nova Scotia’s three largest political parties appear to be moving closer to saying no to fracking, says a coalition of environmental activists. The Nova Scotia Fracking Resource and Action Coalition released the results of a hydraulic fracturing-related questionnaire it had asked the Liberal, Tory, NDP and Green parties to answer. “All the parties seem to have shifted their position,” said Angela Giles, with the Council of Canadians. “(Their answers reflect) a greater understanding of the potential harm that can come from fracking.” Only the Green party said it supports completely banning the controversial method of extracting natural gas from shale rock. None of the three other parties said they are prepared to support a 10-year moratorium. The NDP and Liberals say they would only allow fracking if it was proven not to be environmentally harmful.
 
China
China’s fledgling shale gas industry — a potential threat to long-term demand for Australian LNG — is not going as well as hoped, according to some of Australia’s biggest LNG developers who are also exploring there. Chevron oil and gas production and exploration boss George Kirkland says a recent visit to China indicated shale ground there was not backing up previous US government estimates of vast shale gas reserves. He said a recent assessment by the US Energy Information Agency that China could have more shale gas than anywhere else in the world appeared unlikely. Chinese shale growth is a major factor that could influence demand for Australian LNG and influence the building of a host of new plants. But if China cannot produce large amounts of shale to meet demand, it may also encourage the building of pipelines to Europe. Chevron’s Kirkland said his company would know more about its ground in the next year or two.
 
India
India has approved a policy to allow state-owned companies to start exploration for shale oil and gas as the world’s fourth-biggest energy consumer moves slowly to seek alternatives to expensive oil imports. The government agreed on a policy that will allow national oil companies to search for shale reserves on acreage already awarded to them. India could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of its gas demand, according to the U.S. Energy Information Administration. The policy marks a first step and covers only acreage in the hands of state-run explorers Oil and Natural Gas Corp (ONGC) and Oil India Ltd, which were handed out when India first started a push to produce oil and gas. Of about 356 blocks held by ONGC and Oil India, India’s upstream regulator has said 176 could hold shale resources. Contracts for these areas were awarded with a broad remit to look for petroleum, which was interpreted to include unconventional resources. The new policy effectively confirms that.
 
Japan
An agreement is expected to be made between Japanese Prime Minister, Shinzo Abe, and the Prime Minister of Canada, Stephen Harper. The agreement could see Canada exporting as much as 40 million tons of liquefied shale gas to Japan annually, as of around 2020, officials have claimed. Canada would be the second country to supply shale gas to Japan, as the United States are already expected to be exporting around 6.7 million tons a year to the country from 2017. For more information, please contact us.
 
Jordan
Jordan and China have agreed a Memorandum of Understanding to construct a $2.5 billion oil shale-fired power plant in the southern city of Karak, Jordan, which will produce around 900 megawatts of electricity. The agreement was signed in Beijing, and will see China’s Shandong Electric Power Construction Corporation (SEPCOIII) and HTJ Group teaming up to form a consortium with Jordan’s Al-Laijun Oil Shale Company to build the power station. For more information, please contact HBW Resources.
 
Mexico
Prices for natural gas over the border in Texas are at historic lows, so what happened earlier this month at the Gulf of Mexico port of Altamira, Mexico, might seem to defy market logic. Huge tankers arrived from distant Yemen and Nigeria to offload liquefied natural gas at a price four times the market rate for natural gas in the United States. At Mexico’s two other liquefied natural gas terminals, on the Pacific coast, the same phenomenon occurs, with expensive liquefied gas arriving from Peru, Indonesia and even Africa. It’s a sign of Mexico’s enormous energy crisis, even as oil remains the mainstay of the country’s economy. Mexico has huge natural-gas reserves, yet those reserves are largely untapped, and the nation is a net importer of the fuel. Abundant supplies of natural gas at low prices lie just across the border, but U.S.-Mexico pipelines are already handling all they can. So Mexico is forced into the global market, importing natural gas from the far corners of the Earth. In short, Mexico is over the barrel on natural gas, made worse by a state-owned oil company that’s desperate to hunt for “elephants” – massive oil discoveries – rather than develop more humdrum, far-less-profitable natural gas fields. President Enrique Pena Nieto on Aug. 12 announced broad revisions to Mexico’s oil and natural gas industries to boost exploration and production and allow foreign companies to invest in risk-sharing contracts. But even if Mexico’s Congress approves the changes, it will take years for them to result in greater gas production. The U.S. Energy Information Administration estimates that Mexico has the world’s sixth-largest shale-gas reserves, thought to be 555 trillion cubic feet.

Netherlands
Dutch government move to delay a decision on allowing shale gas drilling was hailed by local communities but “regretted” by energy boosters. Netherlands Economic Affairs Minister Henk Kamp announced the Cabinet would take 1 1/2 more years to study the potential effects of hydraulic fracturing on the environment before allowing Britain’s Cuadrilla Resources to drill test wells in the central province of Flevoland. In a Wednesday letter to the House of Representatives in The Hague, Kamp said more time is needed to study the entire range of possible shale gas sites in the country before approving the licenses, the Dutch daily Volksrant reported. Kamp indicated he wants to be able to include more input from local governments, such as those in Flevoland — including the cities of Noordoostpolder, Boxtel and Luttelgeest, which have vociferously opposed “fracking” after being identified as promising shale gas areas. The government delay came after the coalition partner Labor Party this month put up a political roadblock to approving the licenses. Parliamentary leader Jan Vos said Labor MPs would oppose drilling for shale gas in the Netherlands, thus dashing promoters’ hopes of a gaining a majority in favor.

Poland
Poland’s natural gas giant PGNiG plans to carry out research to find out why no company has so far managed to find commercial levels of shale gas in Polish deposits. The work will be carried out by the company’s experts in cooperation with the AGH University of Science and Technology and the Oil and Gas Institute. PGNiG hopes that the expert group will gather enough information to state whether there is enough gas in the deposits that the company has rights to. For more information, please contact us.
 
Romania
Romanian Prime Minister Victor Ponta has announced that foreign interests are attempting to hold Romania back from re-starting its mining sector, and that the political class is deadlocked in a debate over whether the gold mining project at Rosia Montana should go ahead. “There is an economic war which folded on some goodwill and normal manifestations (the street protests) and which comes, based on the information I received, from two directions: there are certainly economic interests outside Romania that Romania will not re-open its overall mining sector – and I am not talking about only gold mining, but mining in general – and that Romania will not become economically independent as concerns the gas production,” said Ponta. There have been reports that American billionaire George Soros is responsible for the protests at the gold mine as he is interested in taking over the site. It has been speculated that he is financing protests to sabotage Gabriel Resources. Furthermore, there are reports that Russia is backing anti-shale gas protests in Eastern Europe in a bid to retain its influence over the region.
 
Romania’s top oil and gas company, Petrom plans to earmark about 1 billion euros ($1.35 billion) for investment next year and could move into shale gas exploration if feasible, Chief Executive Mariana Gheorghe said. Petrom is regarded as an indicator of the Balkan country’s financial health and a robust investment program suggests the European Union’s second poorest member is on track to achieve economic growth of more than 2 percent this year and next. For more information, please contact HBW Resources.
 
Russia
Rosneft is acquiring Enel’s indirect stake in Russian gas producer SeverEnergia, valued at $1.8 billion, in its latest move to boost its presence in the gas market. State-owned Rosneft, the world’s top listed crude oil producer, has been aggressively expanding its gas business with a slew of purchases, including Russian gas company Itera which it bought for $2.9 billion. The company, headed by Igor Sechin, a long-standing ally of Russian President Vladimir Putin, aims to increase its share of the domestic gas market to 19-22 percent by 2020 from around 9 percent currently. It expects to produce over 60 billion cubic metres (bcm) of gas by 2016, compared with 42 bcm forecast for 2013, and 100 bcm in 2020, of which more than half will be produced at newly acquired projects.
 
South Africa
And as South Africa finalizes regulation on hydraulic fracturing, Eskom says it is considering converting the natural gas to electricity. Should commercially viable shale gas reserves be found in the Karoo, Eskom will build a plant to exploit the natural feedstock. This could help SA join the league of countries such as the US which shale gas has helped catapult into energy self-sufficiency in the past decade, says CEO Brian Dames. “Fracking can be done, and as Eskom we firmly believe it must be done,” he says. Eskom “will certainly” build a gas-fired power station if there is enough feedstock. SA urgently needs a national gas strategy that prioritizes different gas supply options and maps the location and sequence of gas infrastructure investments, says Anton Eberhard, a professor at the University of Cape Town Graduate School of Business. He is also a member of the national planning commission, which drew up the National Development Plan (NDP). Royal Dutch Shell has applied for permission to explore for gas through fracking in the Karoo. Citing a study by consultancy Econometrix, Shell says fracking may create up to 700,000 jobs in 20 years. Sasol has said that it would build a gas-to- liquid facility in the Karoo should sufficient reserves be confirmed.
 
Turkey
Turkey has begun to carry out hydraulic fracturing operations to extract shale gas from the wells in the Thracian and southeastern regions, where 4.6 trillion cubic meters of reserves have been detected. Meanwhile, a delegation from the Ministry of Energy went to the United States and Canada to examine the existing wells there and to meet the representatives of the companies in the sector. The delegation members specifically examined the hydraulic fracturing operations for shale gas there. Furthermore, they visited a number of R-D facilities which specialized in shale gas drilling and production. The delegation members also made short presentations about the new Petroleum Law of Turkey. Shell and TPAO began exploring for shale gas in the eastern province of Diyarbakır’s Sarıbuğday-1 natural gas field in September 2012. For more information, please contact us.
 
Ukraine
The United States will actively cooperate with Ukrainian authorities to strengthen their nation’s energy independence, the U.S. ambassador in Kiev said. “I’m very determined to cooperate with the Ukrainian government in strengthening Ukraine’s energy independence. There are several areas on the road to this goal,” Ambassador Geoffrey Pyatt said in an interview with Interfax-Ukraine. Pyatt said there are several ways to help Ukraine become more independent by working on energy efficiency projects, developing nuclear power and reimporting natural gas from Europe. The U.S. administration has promoted so-called Southern Corridor pipelines, a transit route for gas coming from the Caspian Sea basin to Europe, as a means to diversify Europe’s energy without having to rely on Russian gas that passes through Ukraine. One of the ways the U.S. is working with Ukraine is by helping the country develop its shale gas by bringing in companies like Chevron Corporation and Exxon Mobil Corporation, which have the technologies to extract the shale gas. For more information, please contact HBW Resources.
 
United Kingdom
Perth-based Eden Energy has signed a deal to sell all of its UK shale gas – as well as coal seam methane – portfolio to London-based unlisted company Shale Energy for A$19.3 million. The new agreement, which includes a non-refundable A$94,291 deposit, a further cash payment at settlement of A$1.88 million and a separate A$410,843 placement by Shale for 12-month escrowed shares in the Australian company, will see Eden by November add more than A$2.39 million to its cash in bank. In addition, the sale terms will see the Eden emerge with a 29.9% direct stake in Shale Energy – giving it exposure to any future discoveries and gas developments by shale in the England and Wales-based assets acquired from Eden.
 
Profits from shale gas extraction should be put in a state investment fund to ensure they are not squandered, the UK Independence Party has said. Mr. Helmer, a former Conservative politician who joined UKIP last year, was speaking on the first day of the party’s annual gathering in London. He pointed to the example of Norway, which has invested North Sea oil revenues in a sovereign wealth fund for decades, as to how the UK should maximize the benefits of shale gas. “UKIP is calling for our tax revenues from shale gas to go into a British sovereign wealth fund,” he said.
 
British utility Centrica said it was calling off two gas storage projects after the government refused this month to help build stockpiling sites, dealing another blow to a sector needed to feed the country’s high winter demand. Centrica, which owns household supplier British Gas, said it would incur 240 million pounds ($384 million) in costs for scrapping its offshore project at Baird in the North Sea and putting its Caythorpe plan in east Yorkshire on hold indefinitely. For more information, please contact us.
 
Cuadrilla Resources announced that it has completed its controversial drilling operation at Balcombe, West Susses, England. The firm said that the well confirmed the presence of hydrocarbons but will now be closed off for several months while Cuadrilla obtains planning permission to come back and test flow rates. The vertical well was drilled to an approximate depth of 2,700 feet, collecting some 294 feet of rock samples along the way, while the horizontal well was drilled a distance of 1,700 feet. Cuadrilla also carried out a set of advanced petrophysical logs that it said provides valuable data about the characteristics of the underground rock and the fluids contained within those rocks.
 
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, daily updates and new Member profiles can be viewed at: http://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
 

Daily Energy and Politics Update

Washington Update


 
Welcome back to session!  Both the House and the Senate will be back in action this week.  Almost all of the focus will be on the conflict in Syria and consideration of joint resolution authorizing the President to use force.  The debate over Syria has created a number of strange bedfellows, but the relatively unpopular options threaten to exhaust the already limited amounts of political capital House and Senate leaders have coming into an already crowded and charged fall.  Following the resolution of the Syria question, Congress must pass a bill to keep the government from shutting down at the end of September and shortly thereafter they will need to muster the votes to pass another very unpopular debt ceiling increase.  That leaves little time for resolution of the farm bill, WRDA, immigration reform, and tax reform…much less any other less pressing matters.
 
In Committee, the new head of the NRC will be testifying about the future of Yucca Mountain and storage options for nuclear waste.  The Shaheen-Portman energy efficiency bill, which was expected on the floor of the Senate when they reconvened, is expected to be taken up after the Senate resolves what to do with the Syria. 
 
Legislation to be considered in the House from Leader Cantor:
 
Monday
H.R. 2052 – Global Investment in American Jobs Act of 2013, as amended
H.R. 2844 – Federal Communications Commission Consolidation Reporting Act of 2013
Tuesday
H.R. 1155 – National Association of Registered Agents and Brokers Reform Act of 2013
H.R. 2747 – Streamlining Claims Processing for Federal Contractor Employees Act
H.R. 1891 – Science Laureates of the United States Act of 2013
S. 130 – Powell Shooting Range Land Conveyance Act
S. 157 – Denali National Park Improvement Act
S. 304 – Natchez Trace Parkway Land Conveyance Act of 2013
S. 256 – A bill to amend Public Law 93-435 with respect to the Northern Mariana Islands, providing parity with Guam, the Virgin Islands, and American Samoa
S. 459 – Minuteman Missile National Historic Site Boundary Modification Act
Wednesday-Friday (No Votes Friday)
H.R. 2775 – To condition the provision of premium and cost-sharing subsidies under the Patient Protection and Affordable Care Act upon a certification that a program to verify household income and other qualifications for such subsidies is operational
H.J.Res. __ – Continuing Appropriations Resolution, 2014
Possible consideration of an authorization for the limited and specific use of military force against the government of Syria to respond to the use of chemical weapons
 
Other Items of Interest:
 
House Natural Resources Committee Considers Reforms to ESA:  At a pair of field hearings last week, the House Natural Resources Committee heard testimony from land owners and state officials in WY and MT regarding aspects of the Endangered Species Act that are working and other aspects that are not.  Witnesses stressed the importance of species conservation efforts being a collaborative, grassroots up effort, rather than a prescriptive, top down approach.  Some of the coverage of the hearings can be viewed here.
 
House Science Committee Members Press EPA Use of Personal E-mail Accounts: House Science, Space, and Technology Committee Chairman Lamar Smith (R-Texas) and Oversight Subcommittee Chairman Paul Broun (R-Georgia), sent a letter to EPA Administrator Gina McCarthy requesting information about the use of alias and private email accounts for official business by agency staff.  Since November 2012, Members of the Science, Space, and Technology Committee have written former EPA Administrator Lisa Jackson threetimes regarding the use of dual, secondary or non-public email accounts. The Committee has not received answers to their inquiries to date.
 
Chairman Wyden Tours Energy Development Sites in North Dakota: Senator Wyden, Chairman of the Senate Energy and Natural Resources Committee toured key energy development sites in North Dakota.  Senator Wyden was invited to tour these sites by Sen. John Hoeven, who serves as a member of the Senate Energy and Natural Resources Committee.  They toured an ethanol production facility, a Bakken Shale drilling site, a housing and workforce location, and met with members of the local communities and tribes.
 
DOE Announces $45 Million in Funding for Advanced Transportation: The Department of Energyannounced more than $45 million in funding for thirty-eight new projects that accelerate the research and development of vehicle technologies to improve fuel efficiency, lower transportation costs and protect the environment in communities nationwide.
 
EPA Announced Settlements with Shell Over Arctic Emissions:  U.S. Environmental Protection Agency announced settlements with Shell Gulf of Mexico, Inc. and Shell Offshore, Inc. for violations of their Clean Air Act permits for arctic oil and gas exploration drilling in the Chukchi and Beaufort Seas, off the North Slope of Alaska. Based on EPA’s inspections and Shell’s excess emission reports, EPA documented numerous air permit violations for Shell’s Discoverer and Kulluk drill ship fleets, during the approximately  two months the vessels operated during the 2012 drilling season. In the settlements, Shell agreed to pay a $710,000 penalty for violations of the Discoverer air permit and a $390,000 penalty for violations of the Kulluk air permit.
 
EPA reaches settlement with Safeway to reduce emissions of ozone-depleting refrigerants:Safeway, the nation’s second largest grocery store chain agreed to pay a $600,000 civil penalty and implement a corporate-wide plan to significantly reduce its emissions of ozone-depleting substances from refrigeration equipment at 659 of its stores nationwide, estimated to cost approximately $4.1 million, in a settlement agreement with the U.S. Environmental Protection Agency and Department of Justice. The settlement involves the largest number of facilities ever under the Clean Air Act’s regulations governing refrigeration equipment. The settlement resolves allegations that Safeway violated the Clean Air Act by failing to promptly repair leaks of HCFC-22, a hydro-chlorofluorocarbon that is a greenhouse gas and ozone-depleting substance used as a coolant in refrigerators, and failed to keep adequate records of the servicing of its refrigeration equipment. Safeway will now implement a corporate refrigerant compliance management system to comply with federal stratospheric ozone regulations. Safeway will also reduce its corporate-wide average leak rate from 25 percent in 2012 to 18 percent or below in 2015. The company will also reduce the aggregate refrigerant emissions at its highest-emission stores by 10 percent each year for three years.
 
DOI Completes Renewable Energy Lease Sale Offshore Virginia:  The Interior Department completedthe nation’s second competitive lease sale for renewable energy in federal waters, garnering $1,600,000 in high bids for 112,799 acres on the Outer Continental Shelf offshore Virginia. Virginia Electric and Power Company is the provisional winner of the sale, which auctioned a Wind Energy Area approximately 23.5 nautical miles off Virginia Beach that has the potential to support 2,000 megawatts of wind generation – enough energy to power more than 700,000 homes.  The sale follows a July 31 auction of 164,750 acres offshore Rhode Island and Massachusetts for wind energy development that was provisionally won by Deepwater Wind New England, LLC, generating $3.8 million in high bids.  
 
Important Events and Hearings:
 
House Hearing on Yucca Mountain: On September 10th, the House Energy and Commerce Subcommittee on Environment and the Economy will hold a hearing on “Implementing the Nuclear Waste Policy Act – Next Steps.” The hearing follows an August 13th ruling by the U.S. Court of Appeals for the D.C. Circuit that the Nuclear Regulatory Commission must resume its consideration of the Department of Energy’s license application for Yucca Mountain. NRC Chairman Allison Macfarlane will testify along with Department of Energy Assistant Secretary for Nuclear Energy Peter Lyons. Officials from both NRC and DOE previously committed to complying with the court’s decision during testimony before the subcommittee. Committee leaders have expressed that the first order of compliance should be for NRC to complete the Safety Evaluation Report (SER) on Yucca Mountain and release it publicly.
 
House to Review Maritime Regulations:  On September 10th at 10:30 AM in 2167 Rayburn, the House Transportation and Infrastructure Committee Subcommittee on Coast Guard and Maritime Transportation will conduct a two part hearing to review the status of regulations by the United States Coast Guard, the Environmental Protection Agency (EPA), the Federal Maritime Commission (FMC), and the Maritime Administration (MARAD), as well as examine how such regulations impact the maritime industry.  Part I will focus on safety and commercial regulations. For Part I, the Subcommittee will hear from the Coast Guard, FMC, MARAD, and representatives from private industry. Part II of the hearing will be held in October.
 
Renewable Energy Technology Conference:  On September 9th-11th, starting at 8:30 AM at the Marioot Wardman Park, Access Intelligence will hold the fifth annual Renewable Energy Technology Conference and Exhibition, September 9-11. Additional information can be found here: http://www.retech2013.com/schedule/ .
 
CSIS Hosts International Energy Discussion: On September 9th at 12:30 PM at 1800 K Street, the Center for Strategic and International Studies (CSIS) will hold a discussion on “Operational Energy in the Next Decade: Policy, Strategy and Innovation.” Assistant Defense Secretary for Operational Energy Plans and Programs Sharon Burke; and Maren Leed, senior adviser and CSIS chair in defense policy studies, will lead the discussion.  Additional information can be found here: http://www.csis.org
 
WWC Host Discussion on the Southern Gas Cooridor:  On September 9th at 12:30 PM, the Woodrow Wilson Center (WWC) will host a roundtable discussion on the “Southern Gas Corridor.” Deputy Assistant Secretary of State for Energy Diplomacy Amos Hochstein; Alexandros Petersen, adviser to the European Energy Security Initiative; Michael Ratner, specialist in energy policy at the Congressional Research Service; and Greg Saunders, senior director of international affairs at British Petroleum, will participate in the discussion.  Additional information can be found here: http://www.wilsoncenter.org.
 
Advanced Fossil Energy Technologies:  On September 9th at 2:00 PM, the Atlantic Council will hold a discussion on “Advanced Fossil Energy Technologies,” using the “Kemper County energy facility as a focal point for exploring broader energy, economic, and environmental policy issues relating to advanced fossil energy technologies and their role in ensuring access to energy, protecting energy security, and enhancing environmental performance.”
 
Farmers Union Host Event Supporting Passage of the Farm Bill and Preservation of the RFS:  On September 9th at 4:00 PM, the National Farmers Union (NFU) holds a news conference “to highlight the importance of passing a five-year, comprehensive farm bill this year; and how the Renewable Fuel Standard creates jobs, reduces greenhouse gasses, and reduces our dependence on foreign oil.” Senate Majority Leader Harry Reid, D-Nev.; Senate Agriculture Chairwoman Debbie Stabenow, D-Mich.; musician Neil Young, owner of LincVolt – a 1959 Lincoln Continental converted into a fuel-efficient, hybrid demonstrator vehicle; Tom Buis, CEO of Growth Energy; and Roger Johnson, NFU president, will participate in the press conference.
 
America’s Dirtiest Power Plants:  On September 10th at 9:30 AM in the Senate swamp, Sen. Sheldon Whitehouse, D-R.I.; and Julian Boggs, Federal Global Warming Program director at the Environment America Research and Policy Center, hold a news conference on a report titled “America’s Dirtiest Power Plants,” which “lists America’s largest carbon polluters, and demonstrates the oversized contribution to the nation’s carbon emissions.”
 
DOI hosts meeting to discuss USEITI:  On September 10th at 2:00 PM,  the DOI; Office of the Secretary of the Interior; Policy, Management and Budget will hold a meeting by teleconference of the United States Extractive Industries Transparency Initiative (USEITI) Multi-Stakeholder Group (MSG) Advisory Committee to review the U.S. draft candidacy application for EITI and any pending matters prior to posting for public comment, and the plan for public and tribal outreach during the public comment period. Dial-in at 888-843-9213; passcode, EITI.
 
Natural Gas and the U.S.-Japan Relationship: On September 11th at 10:00 AM, the American Enterprise Institute for Public Policy Research (AEI) will hold a discussion on “Natural Gas, Natural Allies: Energizing the U.S.-Japan Relationship.” Rep. Mike Turner, R-Ohio; Dan Blumenthal, resident scholar at AEI; Mike Mazza, research fellow at AEI; Gary Schmitt, co-director of the Center for Security Studies at AEI; and Ely Ratner, deputy director of the Asia-Pacific Security Program at the Center for a New American Security, will participate in the discussion.  More information can be found here: http://www.aei.org.  The event will be streamed live at: http://www.american.com/watch/aei-livestream
 
Energy Infrastructure and Power Pathways:  On September 12th at 9:00 AM in 562 Dirksen, the Environmental and Energy Study Institute will hold a briefing on “Energy Infrastructure and Power Pathways: Shared Experiences in the United States and Europe.” John Wellinghoff, chairman of the Federal Energy Regulatory Commission; Daniel Dobbeni, president of Eurogrid International; Neil Brown, nonresident fellow at the German Marshall Fund of the United States; and Carol Werner, executive director of EESI, will participate in the discussion.  The event will be webcast at: http://www.eesi.org/091213grid#stream.
 
Energy Storage Technologies:  On September 13th at 11:00 AM, the United States Energy Association (USEA) holds a discussion on “The Current and Future Status of Energy Storage Technologies.” Haresh Kamath, strategic program manager in the Technology Innovation Program at the Electric Power Research Institute; and Imre Gyuk, energy storage program manager at the Energy Department
Register at http://www.usea.org/node/709/register.
 
U.S. Representative Gene Green (D-TX)
 

 
Committee Assignments:
House Energy and Commerce Committee
·         Energy and Power Subcommittee
·         Health Subcommittee
·         Environment and the Economy Subcommittee
·         Oversight and Investigations Subcommittee
 
Contact Information:
Chief of Staff: Rhonda Jackson
Legislative Director: Lindsay Westfield
Twitter: @RepGeneGreen
 
Caucus Affiliations:
Democratic Israel Working Group–Rep. Green is Co-Chair
Congressional Natural Gas Caucus–Rep. Green is Co-Chair
Congressional Vision Caucus–Rep. Green is Co-Chair
 
Biographical Information:
Rep. Gene Green was born October 17, 1947. He received a degree in Business Administration from the University of Houston in 1971. He attended Bates College of Law at the University of Houston and was admitted as a member of the State Bar of Texas in 1977. In 1970 he married Helen Albers Green. They have two children; Dr. Angela Green Hewlett, a doctor at the University of Nebraska Health Center at Omaha, and Christopher Green, a graduate of Texas A&M‑Galveston. They have four grandchildren, Lauren Elissa Hewlett, Braden Alexander Hewlett, Dylan Eugene Green, and Tristan Michael Green. The Green family attends Spring Woods United Methodist Church in Houston.
 
Congressional Career:
Congressman Gene Green was first elected to Congress from the 29th Congressional District of Texas in 1992 after twenty years in the Texas House of Representatives and the Texas Senate. In 1996, Green was appointed to the House Energy and Commerce Committee, and currently serves on three of its subcommittees.  Since being elected to the House of Representatives, Rep. Green has been a champion of education, labor, energy and health issues. He has worked hard to increase the minimum wage, job training services, access to technology, and to improve access to quality health care. He was instrumental in the revitalization of the Houston Head Start program and has worked to secure federal funds for the expansion of the Port of Houston and Intercontinental Airport.  He serves on numerous Chambers of Commerce, Aldine Optimist Club, Communication Workers of America, the Texas Bar Association, and the American Bar Association.
 
Energy Focus:
To bring more jobs to his district, Rep. Green, who serves on the House Committee on Energy and Commerce, has been a consistent supporter of measures and provisions of importance to the oil and gas industry.   He also led the effort to repeal a moratorium on offshore drilling following the Macondo spill in April 2010. He believes measures supporting the oil and gas industry are important for reducing U.S. dependence on foreign oil and will providing jobs throughout the US economy.  He has been a consistent opponent of raising taxes on oil and gas production.
 
Statements
 
Regarding Taxes on Oil and Gas:
“The U.S. oil and natural gas industry does not receive tax subsidies. In fact, there is not a single targeted tax credit in the Internal Revenue Code available to the oil and natural gas industry. Instead, the industry is allowed to take deductions to recover the costs of doing business, which has been afforded to all businesses since the beginning of our country’s income tax system.”
 
“The natural gas and oil industry is a staple of the American economy and essential in securing our energy independence. Repealing these tax provisions would put an entire industry at risk; stepping backward at best and fatally wounding it at worst.”
 
Regarding the Renewable Fuel Standard:
Rep. Green said:   “I’m frustrated as anybody else with the RFS. And I voted for it in ’07. A number of us from my part of the country did. But what we’ve seen in the last number of years is, whether the RINs fraud, the gaming of the system…I would probably vote for repeal of the RFS, but I just don’t see where we’re going to get there. But we need to see what we can do to make sure it’s quality.
 
Regarding Opening Up the Gulf after the Moratorium: 
“As new offshore drilling permits still slowly trickle from BOEMRE, it’s important that we extend oil and gas leases that haven’t been in production first because of the moratorium and now as they try to receive guidance from the Department of Interior on applying new environmental and safety regulations.  This production is vital to reducing our dependence on foreign oil and is integral to countless livelihoods dependent on the Gulf energy economy.”
 
Regarding Opening Up New Areas in the last Five Year Plan: 
“Opening up these areas to study is critical in working toward establishing a stable and safe domestic energy supply.  By not exploring the possibility of opening new areas to energy production through 2017, we are stifling the resources we have to grow our economy. “
Regarding Support for H.R. 2231, the Offshore Energy and Jobs Act:
 “While I do not agree with some of the environmental provisions in this bill, I support it because it is a message bill about the importance of accessing our offshore resources.  With the president reneging on certain areas originally contained in his 2012-2017 five-year offshore leasing plan, our future access over the next decade is extremely limited. We need to open new offshore areas up for production instead of producing on the same lands we have for decades.”
 
Regarding the EPA Study of Hydraulic Fracturing:
“We have a responsibility to develop our domestic energy resources in an environmentally sound manner, which requires this study to be conducted properly and with scientific integrity.  It must take into account quality and risk assessment standards, expert knowledge, and previous studies such as the hydraulic fracturing study EPA previously completed in 2004.  We encourage EPA Administrator Jackson to work with Congress to properly evaluate the environmental performance of hydraulic fracturing.”
Contact Information
 
If you have any questions, please contact me anytime. Previous updates and new Member profiles can be viewed at HBW Resource’s new Intelligence Tab at: http://hbwresources.com/intelligence/. Hope you all 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
 

HBW Ollison Fracking Report

 

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. 
 
States 
 
State Legislative Update: Please see linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing.
 
Arizona
The Arizona Geological Survey now has a new report assessing the potential resources of other formations in Arizona for shale oil and shale gas. The report identifies 10 rock formations in Arizona that consist dominantly of shale or phyllite (very low grade metamorphic shale) that represent potential areas of interest for shale-oil and shale-gas exploration. Many of these units are weakly metamorphosed, and are perhaps too thermally mature to contain recoverable oil or gas in known exposures. However, lateral equivalents of these units may be less metamorphosed and so contain recoverable hydrocarbons. In 2012, Arizona oil production totaled 51,949 barrels from 21 producing wells in 2012, up from 36,925 barrels from 9 wells in 2011. The Dineh-bi-Keyah produced 49,972 barrels of oil. Gas production totaled 116.6 million cubic feet from 4 producing gas wells, down from 168 million cubic feet from 5 wells in 2011.
 
Arkansas
Purestream Services has deployed its AVARA brand vapor recompression commercial water-treatment system for an Arkansas Fayetteville Shale gas producer in White County, Arkansas. The company has been contracted to treat the wastewater at a centralized water treatment facility near Searcy, Arkansas. The facility was built to accommodate produced water from shale gas wells operating in the vicinity. Treating wastewater nearer to the source of the production reduces the costs of processing the produced and frac flowback water and minimizes the environmental impacts of hauling the wastewater long distances. For more information please contact HBW Resources.
 
California
A new study draws a straight line between pulling water out of the ground and increased seismic activity. The University of California Santa Cruz study, “Anthropogenic Seismicity Rates and Operational Parameters at the Salton Sea Geothermal Field,” concluded that a CalEnergy geothermal field near the Salton Sea in Southern California triggers small earthquakes very close to the San Andreas Fault. The study examined more than 30 years of data from CalEnergy production facilities, but could have broader implications. Tinkering with subterranean pressure dynamics is a staple of modern oil and gas production, and if they cause earthquakes it could prove a sensitive topic in California, where lawmakers are grappling with new regulations for the emerging technologies.
 
The U.S. Air Force will consider leasing land on Vandenberg Air Force Base for private companies to extract offshore oil and gas from the central California coast, officials said Wednesday. The proposal would allow oil companies to use onshore equipment with new extended reach “slant drilling” technology to access deposits several miles offshore. Over the next several months, the military will study whether the new type of drilling is compatible with the base’s space and satellite-launching missions and determine if it is “economically, environmentally and politically feasible,” the Air Force said in a statement. For more information please contact us.
 
State officials have been flooded with more than 20,000 comments and suggestions regarding proposed regulations of a controversial oil and gas drilling technique known as fracking, officials said. Members of the California Water Commission voiced concerns of their own about whether the state should treat the recipes for some fracking liquids as trade secrets, not to be disclosed to the public. Tim Kustic, the state oil and gas supervisor, told the commission that proposed regulations would require companies to notify the state at least 30 days before they begin fracking, with the information publicly posted no more than seven days later. Fracking is currently permitted in California. Companies would also have to disclose to state regulators the materials used in fracking, but Kustic told the commission that his office was wrestling with rules to apply when companies claim the formulas for their fracking solutions are trade secrets. A new draft of regulations will be released this summer with final approval, after additional hearings, likely in mid-2014, well after the state Legislature is expected to act on its own proposed regulations.
 
Colorado
A Boulder County District Court judge, D.D. Marshall is allowing state regulators to join a lawsuit the Colorado Oil and Gas Association has filed challenging Longmont’s ban on hydraulic fracturing. The Longmont Times-Call reports the decision lets the trade association add the Colorado Oil and Gas Conservation Commission as another plaintiff. Industry officials are challenging the ban because they want to be able to extract oil and gas through hydraulic fracturing, which they have done for years. Meanwhile the commission says it has regulatory authority over technical aspects of drilling. The commission also is suing Longmont over drilling regulations passed by City Council. For more information please contact HBW Resources.
 
A five-year moratorium on fracking in Boulder took a step toward the November ballot. The Boulder City Council unanimously gave initial approval to a ballot measure that would ban fracking through 2018 unless, after June 2016, a two-thirds majority of the City Council decides it should be lifted. Some City Council members said the moratorium should extend five years from the end of the one-year moratorium adopted by the council last month, rather than converting the one-year moratorium into a five-year one. That would extend the moratorium through 2019 unless the council signed off in 2017. The City Council will consider the date changes at a second reading of the ballot measure on a special meeting Aug. 5. If the state Supreme Court ultimately rules against Longmont’s voter-approved fracking ban, the City Council could simply not enforce Boulder’s moratorium, City Attorney Tom Carr said.
 
The Fort Collins’ moratorium on permitting new oil and gas operations likely will expire on schedule at the end of July. The City Council rejected two options for extending the moratorium, which applies to accepting land-use and other applications for drilling new oil and gas wells. The City Council on Tuesday rejected two options for extending the moratorium, which applies to accepting land-use and other applications for drilling new oil and gas wells. One option would have extended the moratorium through the end of the year; the other would have been for seven years. Both proposals went down on 4-3 votes, with Councilman Gerry Horak making the swing vote.
 
The Colorado Department of Public Health and Environment announced that it will consider new requirements for oil and gas storage tanks and leak detections systems on wellheads. The state is facing increases in air pollution in the nine-county Denver metropolitan area and is in danger of exceeding federal ambient air quality standards. The increases are largely attributed to the state’s 50,000 oil and gas wells. New air regulations would be determined by a nine-member panel of commissioners appointed by the Governor. For more information please contact us.
 
Matt Lepore, director of the Colorado Oil and Gas Conservation Commission (COGCC), criticized hydraulic fracturing opponents as “misinformed” about the impacts of banning the practice of injecting chemical-laced water and sand underground to crack tight rock formations and release trapped oil and gas. Lepore said Tuesday during a panel discussion at the Northern Colorado Energy Summit in Loveland that banning the use of fracking essentially bans gas development, forcing the state to look to other sources such as coal for energy and driving up electricity costs that would be borne in some way by all the state’s residents.
 
Kentucky
Clariant AG, (CLN) the Swiss chemical maker, expects to continue expanding in the U.S. to take advantage of the “tremendous opportunity” created by rising production of oil and natural gas from shale formations. Clariant is doubling its capacity in Louisville, Kentucky, to make catalysts that help convert gas liquids into propylene and butadiene. Clariant joins Dow Chemical Co. and South Africa’s Sasol Ltd. (SOL), among others, in expanding U.S. production amid increased output of oil and gas from shale formations. The Muttenz, Switzerland-based company will benefit from sales to U.S. oil producers as well as to chemical makers benefiting from lower costs for raw materials and energy.
 
Louisiana
Citing the availability of low price natural gas from the Eagle Ford shale play, Valero Energy Corporation announced that it would build a new $700 million methanol plant at its existing St. Charles, Louisiana refinery. Methanol is a chemical feed stock used in paints, plastics, and other products. Once completed in 2016, the plant would produce 1.6 billion tons of methanol per year. The company also stated that it may construct additional methanol plants in the future.
 
Maine 
The Maine House of Representatives sustained a gubernatorial veto of a study of the transportation of tar sands oil, over the objections of lawmakers who cited last week’s train explosion in Quebec Province as proof of the dangers posed by the industry. LD 1362, sponsored by independent Rep. Benjamin Chipman (I, District 119), started months ago as a proposal for a two-year moratorium on the transportation of tar sands crude oil in Maine. After changes at the committee level, the bill went to the full Legislature as a directive to state officials to expand an already-underway study. It passed unanimously but Republican Gov. Paul LePage, in his veto letter, called the bill redundant. Rep. Bernard Ayotte (R, District 3), was one of the 52 lawmakers who voted against the study. “I’m not opposed to this study, but I would be concerned about the study leading to a moratorium, which then leads to being forced to use other forms of energy that would be extremely expensive,” he said. For more information please contact us.
 
Maryland
The O’Malley administration has put hydraulic fracturing on hold in Maryland until state officials complete a three-year study of whether it can be done safely. Environmental regulators took questions and comments at the Department of the Environment on a recently issued draft report outlining “best practices” used in other states or recommended by experts, which Maryland might require of gas companies here. Dozens of people, many of them members of environmental groups, urged state officials Tuesday to adopt even stricter regulations on hydraulic fracturing in the gas-rich Marcellus shale formation in Western Maryland. Some called for the state to ban the controversial practice outright, given concerns raised in other states over groundwater contamination and air pollution. Industry officials and regulators in states that permit shale gas drilling say those concerns are misplaced or overblown. For more information please contact HBW Resources.

Michigan
A group of Democrats in Michigan’s Republican-controlled House introduced a package of eight bills that would tighten state regulation of hydraulic fracturing, which releases natural gas trapped in deep underground rock formations. Sponsors said the measures would bring more safety, accountability and transparency to the process widely known as “fracking,” although the state Department of Environmental Quality said it already has solid rules in place. The DEQ says about 12,000 wells have been fractured during the past half-century and “has never jeopardized the environment or public health.” Meanwhile, a group that wants to ban fracking said the bills don’t go far enough. The bills include: HB 4900HB 4903HB 4901HB 4899HB 4902HB 4904HB 4905, and HB 4906.
 
Mississippi
Atmos Energy Corp. will buy two southwest Mississippi natural gas systems. The Mississippi Public Service Commission voted Thursday to approve Atmos’ purchase of gas systems from the towns of Meadville and Bude. The Bude system has 280 customers, while the Meadville system has 190. The company will pay $96,000 to Meadville and $145,000 to Bude, and expects to complete the purchases by August.
 
New Mexico
The New Mexico Environment Department has reached a settlement with Occidental Permian Limited Partnership, the operator of a natural gas processing plant in southeastern New Mexico over alleged pollution violations. The settlement is worth more than $920,000. Most of the money will go toward installing pollution controls at the company’s plant near Hobbs. The department alleges the plant in 2010 failed to fully report emissions from flaring events that exceeded permit limits for carbon monoxide, hydrogen sulfide, sulfur dioxide and other pollutants. Under the settlement, Occidental denies violating any regulations but agreed to pay a $95,000 penalty and will spend at least $825,482 to install the new equipment. Occidental says the total cost of the equipment could be more than $2 million. For more information please contact us.
 
New York
New York’s proposed rules for hydraulic fracturing drew an unprecedented response in January, when more than 200,000 comments were submitted by the public to the state Department of Environmental Conservation. Seven months later, the fate of those comments is unknown, with the DEC declining to say whether it would respond to the concerns raised in the submissions or allow them to sit unanswered. The DEC ignored a series of inquiries over the past week from Gannett’s Albany Bureau about the comments, which were submitted by the boxful in mid-January by a coalition of fracking opponents. But after a series of delays — including the addition of a yet-to-be-completed review by the state Department of Health — the state first extended and then missed a deadline to finalize the rules, causing them to expire in March.
 
Hurley town officials next week will hear a proposal to ban hydraulic fracturing and other activities related to the production of natural gas. The proposal, from the grassroots group Sustainable Hurley, is to be presented during the board’s meeting next week. Sustainable Hurley said in a press release that it will make a presentation on the “dangers of fracking” and will propose that town officials amend local zoning regulations to prohibit the “heavy industrialization that fracking and its supporting activities bring with it.” The group also plans to submit an anti-fracking petition that has about 110 signatures on it. For more information please contact us.
 
North Dakota
More temporary oil workers are expected in Williston, Dickinson and Minot this summer to catch up on a backlog of wells that need hydraulic fracturing, North Dakota’s top oil and gas regulator said. At the end of May, an estimated 500 oil wells were waiting on fracking crews. North Dakota oil production rose 2.1 percent in May to set an all-time high of 810,129 barrels per day, according to preliminary numbers from the department. Companies are taking an average of 22 days to drill a new oil well, but the length of time to complete the well and bring it on production has increased to 92 days.
 
The fallout from the derailment in Lac-Mégantic, Que., will likely have a detrimental impact on the near-term growth of moving petroleum by freight, and also likely raise costs and tighten restrictions for North American oil producers that rely on railways to ship oil across the continent, according to Moody’s Investors Service. In particular, any slowdown would be felt by oil producers focused on the Bakken shale oil formation, which depend far more on rail than on pipelines for transport, Moody’s said. Moody’s notes roughly two-thirds of the Bakken’s North Dakota oil production, or roughly 727,000 barrels a day in April, reaches its customers by rail. For more information please contact HBW Resources.
 
North Dakota Congressman Kevin Cramer said that leaders of the House Energy and Commerce Committee needed to see what is going on in North Dakota’s oilfields. Cramer led six Republican members of the U.S. House of Representatives on a one-day fact-finding mission from Minot to Tioga, checking out an oil rig, fracking site, the Hess Energy company facility in Tioga and Enbridge Pipeline company station in Berthold.
 
On a national scale, cheap natural gas retrieved through fracking is being credited with helping to resurrect the manufacturing industry. On the state level, affordable energy means lower overhead costs for North Dakota manufacturers. Meanwhile, the state is looking for other benefits it could provide. The 2013 Legislature approved a study by the state’s energy policy advisory commission, EmPower North Dakota, “to determine what is the best fit for value-added natural gas liquid projects” in the state, commission member and North Dakota Petroleum Council President Ron Ness said. “We have seen several major projects announced. But many believe this could be the new energy economy in our state,” Ness said. The projects include fertilizer plants that use natural gas to make their products, a natural gas-fired unit at the Heskett Plant, plans for a new MDU Resources natural gas pipeline and two diesel fuel refineries.
 
North Dakota’s per person gross domestic product increased nearly 11 percent from 2011 to 2012 — tops in the nation for the second straight year, and three times larger than runners-up Texas and West Virginia. The U.S. Energy Information Administration spotlighted the growth by GDP in a brief released. In 2001, North Dakota ranked 38th in real GDP. But crude oil production in North Dakota has more than quintupled since 2007 and natural gas withdrawals more than tripled, thanks to advances in technology such as horizontal hydraulic fracturing. For more information please contact us.
 
North Dakota oil and natural gas production reached new all-time highs in May, breaking the previous records set in April despite record rain in May thanks primarily to Bakken and Three Forks exploration and production activity. Preliminary estimates by the North Dakota Industrial Commission’s (NDIC) Department of Natural Resources indicates that the state’s oil production reached 810,129 barrels of oil per day (bopd), up from the 793,852 bopd in April, while natural gas production grew to 899.9 million cubic feet per day (MMcf/d) from 861.1 MMcf/d in April. The number of producing wells in the state also reached a record 8,915 in May, compared with 8,772 wells in April, according to NDIC’s Department of Natural Resources. Drilling permits grew to 211 in May from 202 in April, but declined to 165 in June; all three figures are down from the record of 370 set in October 2012.
 
The U.S. State Department has approved a Presidential permit to build an 80-mile-long leg of the Vantage Pipeline in North Dakota. The completed pipeline, with an estimated investment of $300 million, will be 430 miles and will carry up to 60,000 barrels per day (bpd) of ethane natural gas from Tioga, North Dakota, through Saskatchewan, to facilities in Empress, Alberta, Canada. The Vantage project will require approximately 400,000 man hours to construct, inject $300 million into the U.S. and Canadian economies, expand the market for North Dakota natural gas, create financial opportunities for service providers and increase revenues to local cities and counties along the route. The new pipeline will carry ethane gas, a component of natural gas that is used as a feedstock by the petrochemical industry to produce plastics, rubber, detergents and other consumer products.
 
Ohio
New research shows Ohio’s shale oil and gas development so far has had little effect on demand for housing. Ohio State researcher Amanda Weinstein says despite earlier fears of an influx of oil workers in some eastern Ohio counties there’s still no housing shortage. Weinstein says in shale development areas in other states, an increase in housing permits during boom years quickly declined the following year. Weinstein says the oil and gas industry appears to be moving “much more cautiously” in adding drilling sites and hiring new workers in Ohio. At the end of 2012, oil, gas and other shale energy employers had posted help wanted ads for more than 6,000 positions, mostly in eastern Ohio counties. Weinstein adds that Ohio is better positioned to absorb any newly hired oil and gas workers. Unlike other shale regions in Pennsylvania and North Dakota, Ohio has more cities and towns within commuting distance of the oilfields.
 
Five oil and gas companies are participating in a joint industry project (JIP) to gain better insight into the Utica/Point Pleasant shale play. The joint industry project launched in early April is designed to improve fundamental understanding of the Utica/Point Pleasant shale play. The project is expected to last one year or more. The purpose of the Utica JIP is to identify the most productive formations or zones, improving fundamental understanding of what rock properties are most important for good wells, and exploring the variability within the Utica/Point Pleasant play. The partners hope to better understand the relationships between facies, depositional sequences and reservoir quality compared with other U.S. shale plays. For more information please contact HBW Resources.
 
Oklahoma
Devon Energy Corp. plans to lease five more natural-gas fueled generators for its operations in northern Oklahoma after a successful pilot project with General Electric. The generators allow the company to power a site with natural gas from the wellbore, rather than buying about $100,000 worth of diesel each month. Using natural gas instead of diesel is cheaper and better for the environment. Devon is not the only company using the gas it produces to power its operations in the Mississippian, which covers a large swatch of northern Oklahoma and southern Kansas.
 
Blue Energy Fuels has plans to expand its network of compressed natural gas stations. The company plans to begin construction of a public fill station in 30 days. It will be a great option for fleet vehicles and regular drivers now using natural gas. Construction of the CNG station in Grove will be finished and it will open to the public in January or February. Then, future plans include CNG stations in Big Cabin, Vinita and Pryor in 2014. For more information please contact us.
 
Pennsylvania
Marcellus Shale and other natural gas plays are considered valuable for what can be extracted from them, but what if they could also be valuable and environmentally helpful after they are been depleted? That is a question Penn State faculty are looking at as part of a research project the National Energy Technology Lab’s Regional University Alliance is conducting. The study, the first of its kind, is also looking at what is known as enhanced gas production – injecting carbon dioxide into the wells and stimulating more gas production. That scenario would mean separating the two gases, then pushing the carbon dioxide back into the formation, potentially reaping the economic benefit of the additional gas production — depending on its market price.
 
The ethane being produced in the Marcellus and Utica shale region should be enough to support construction of several ethane crackers, officials with MarkWest Energy believe. MarkWest has invested $2.2 billion into pipelines, processing and fractionation plants in the region. The fractionation plant at Hopedale served as the destination of the six “superloads” that recently made their way through Steubenville. MarkWest has contracts to process Ohio gas for Gulfport Energy, Antero Resources, Petroleum Development Corp. and Rex Energy. The company also processes gas at the Mobley site in Wetzel County and the Majorsville complex in Marshall County, working for producers such as Magnum Hunter, Consol Energy, Noble Energy and Range Resources. The Cadiz processing complex will soon include two de-ethanizers, which will remove ethane from the gas stream. Currently, the company has three options for its ethane: send it to Canada for cracking via the Mariner West Sunoco pipeline; send it to the Gulf Coast for cracking via the ATEX Express pipeline; or send it to the Gulf Coast for cracking over the Bluegrass Pipeline. There are now about 2,500 construction employees working to build the Harrison County plants and the pipeline network to which they connect, a number he believes will increase in the near future.
 
State Sen. Jim Ferlo, (D, District 38), has sent out a memorandum asking for co-sponsors for a bill titled “Statewide Natural Gas Drilling Moratorium.” The moratorium would prohibit the Pennsylvania Department of Environmental Protection from issuing “new unconventional well permits while a seven-member commission studies the varied environmental impacts that the natural gas industry has on the Commonwealth,” the memo states.
 
Butler County continues to benefit from Marcellus shale money, according to Controller Jack McMillin’s Comprehensive Annual Financial Report. For 2012, the county received $1.2 million in drilling impact fees, up from $900,000 in 2011. The county used a portion of that money to balance its 2013 budget that included a 1-mill tax increase, with commissioners saying that deficits at the emergency services center and the Sunnyview nursing home made the increase necessary. At the end of 2012, according to McMillin’s report, the county had 152 producing gas wells, up 81 percent from 84 wells at the end of 2011. For more information please contact us.
 
Proportionally, more bridges have been substantially repaired in areas where the natural gas industry is booming than in the region’s more urban areas since March 2011, state Department of Transportation data show. In Lackawanna, Luzerne and Pike counties in PennDOT’s District 4, 38 bridges deteriorated to the point at which they were classified structurally deficient during that period. Meanwhile, 32 bridges in these counties were replaced or repaired sufficiently to remove the structurally deficient designation. Rettew Associates provides bridge and highway services for several Marcellus Shale companies. “Three of the businesses we work with have spent more than $250 million on roadway reconstruction in the northern tier of Pennsylvania alone,” said Jeffrey Case, director of transportation at Rettew, in an emailed response sent by company spokeswoman Holly White. “There have also been two bridge replacements in Northeast PA where the cost to the natural gas company exceeded $300,000.” One of those companies is Southwestern Energy, which Mr. Case said offered to “make a temporary repair” to a Susquehanna County bridge that could not support the weight needed for its trucks. Mr. Case said the company offered to fully fund and manage a full replacement of the bridge in the fall.
 
The new Chairman of the Delaware River Basin Commission (DRBC) responded to the multiple of requests related to the lack of movement on implementing new gas drilling regulations and moratorium on hydraulic fracturing. Michele Siekerka, representing the state of New Jersey, issued a statement on what the DRBC has been doing since a scheduled vote on the new regulations was cancelled last November. Among the points highlighted were: reviewing new scientific studies on the effects of natural gas development on water resources; benchmarking new regulations, best management practices and performance standards adopted by other states, federal agencies and organizations; using what has been learned to identify a level of minimum standards that will protect the DRBC’s shared water resources; performing water quality and quantity monitoring to establish baseline conditions prior to the onset of natural gas development; and with the assistance of a grant from the William Penn Foundation, developing a tool for evaluating the impacts of land-based development on water resources. At the same time, two energy companies are pulling out of northeastern Pennsylvania, where the existing DRBC three-year moratorium on gas drilling has infuriated landowners who say it’s now cost them a windfall of more than $187 million. The $3,000-per-acre lease was structured so that some of the money was to be paid up front and the rest once drilling began. The landowners’ group said its members received about $150 million several years ago. Another $187.5 million would have been due had the companies been able to develop gas wells. The notifications, sent on Newfield letterhead on behalf of Newfield and Hess, made official what had in practice already occurred, as the companies pulled staff from the region long ago.
 
Consol Energy provided an operations update for the quarter ended June 30, 2013 according to which the company successfully drilled an exploration well in the Devonian Shale. Consol Energy drilled its Upper Devonian Shale well in the Burkett formation, which is the deepest of numerous Upper Devonian shales. The company believes that while all of its acreage in Southwestern Pa. and Northern W.Va. has the potential for the existence of the Upper Devonian Shale formation, initial geologic estimates show that it controls 300,000 acres with commercial Upper Devonian Shale potential. During the second quarter, Consol Energy drilled 13 horizontal shale wells: nine Marcellus Shale and four Utica Shale wells. The average drilled lateral length for the Marcellus Shale wells and the Utica Shale wells was 8,860 feet and 5,459 feet, respectively. Consol completed 15 Marcellus Shale wells in the second quarter and expects to initiate completion operations on the Utica Shale wells in the third quarter of 2013. For more information please contact HBW Resources.
 
A Cabot Oil and Gas Corp. well in northeastern Pennsylvania is being shut down in the midst of a state Department of Environmental Protection investigation. The Scranton Times-Tribune reported the Costello 1 vertical well in Dimock Township will be plugged after the DEP decided it can’t be used anymore. The issue is whether methane found in two nearby water wells has been coming from the well; the DEP said it isn’t clear. The well will be plugged even as the investigation continues.
 
In the event of fracking or drilling damages, Pennsylvanians and their communities may not be adequately covered financially when – or if – the bill comes, a new report says. The report, “Who Pays the Cost of Fracking?” by PennEnvironment Research & Policy Center, outlines what it says are shortcomings when it comes to the state’s financial assurance requirements for oil and gas companies. These assurance requirements are the state’s way of protecting leaseholders or communities from being left with the bill for damages when oil and gas companies move on.
 
North Strabane Township supervisors are poised to make a decision regarding a possible non-surface Marcellus Shale gas lease deal when the board meeting next week. Two offers are on the table—one from Rice Energy and one from Range Resources—both located in Southpointe. Both companies want to conduct non-surface drilling on 81.8 acres located off state Route 519, that township Manager Frank Siffrinn said consists of the land the municipal building and park are situated. He stressed that it is non-surface drilling, which would mean no disruption of daily activities there. For more information please contact us.
 
Texas
Texas oil producers pulled more oil out of the ground than many countries in recent months, putting it in the ranks of such powerhouses as Kuwait and Venezuela. The latest numbers show Texas produced 74 million barrels of oil in March and 73 million barrels of oil in April, more than double the output per month from 2009, according to the Energy Information Administration. If Texas were a country, it would rank 15th in the world in terms of oil production, according to Fuelfix.com. That’s thanks in large part to the Eagle Ford Shale and Permian Basin where drillers use horizontal drilling hydraulic fracturing to pass through the shale formations and free the oil.
 
Sales tax revenues continue to show the Eagle Ford Impact. Texas Comptroller Susan Combs said state sales tax revenue in June was $2.17 billion, up 9.1 percent compared to June 2012. Combs sent cities, counties, transit systems and special purpose taxing districts their July local sales tax allocations totaling $578.3 million, up 8.1 percent compared to July 2012. Local sales tax allocations remitted in July represent sales made in May. “The Eagle Ford Shale keeps getting larger,” Kyle Kramm, assistant director of economic development for the city of Seguin said, noting that the economic development office has been receiving lots of inquiries from oilfield service companies, many of them asking about housing for their employees. Counties in the Eagle Ford Shale have seen sharper increases than elsewhere in the state. Karnes County’s July allocation was up 58.5 percent and its year-to-date allocations total $5.6 million, up 55.2 percent. For more information please contact us.
 
The Houston metropolitan area has become the nation’s top exporter for the first time in history, pushed by growing shipments of petroleum products, according to a U.S. Department of Commerce report released this week. About $110.3 billion in merchandise shipped from the Houston-Sugar Land-Baytown area in 2012, a nearly 6 percent jump from the year before. The metropolitan area surpassed New York City’s export value of $102 billion to grab the title of top U.S. exporter. Petroleum and coal products were the largest group of exports from the Houston area, totaling $36.6 billion in value. Another $31.2 billion worth of chemicals left the region.
 
Forest Oil Corp. intends to sell oil and natural gas fields in the Texas Panhandle that may fetch as much as $1 billion, more than the company’s market value. The Denver-based energy company hired JPMorgan Chase & Co. to sell about 100,000 acres, including producing wells, after receiving unsolicited offers, according to a filing. The divestiture would leave Forest with assets in East Texas and the Eagle Ford shale in West Texas.
 
Utah
Enefit American Oil, a subsidiary of Eesti Energia, is seeking approval from the U.S. Bureau of Land Management (BLM) to install utility lines for its project to produce shale oil, a liquid fuel, in the Uintah Basin. In 2011, Enefit bought the mineral rights across a large tract of land in eastern Utah, believed to contain 2.6 billion barrels of recoverable shale oil. Though Enefit has yet to obtain the numerous federal, state and local permits to begin shale mining, the company is optimistic it will begin mine construction in Utah in 2017, with the first oil being extracted in 2020. Its ultimate target is to produce 50,000 barrels of shale oil per day. The BLM will conduct an environmental impact study and is seeking suggestions on specific issues that should be part of the analysis. For more information please contact HBW Resources.
 
West Virginia
Consol Energy dedicated its Northern West Virginia Advanced Water Treatment Facility, where water from underground mines is being treated to reduce harmful discharges. Located in Mannington, W.Va., the $200 million project was finished “ahead of schedule, under budget and without any accidents,” Consol President Nicholas J. DeIuliis said. The facility is designed to treat a maximum flow of 3,500 gallons per minute of mine water and is based on a Zero Liquid Waste process. Solid waste from the treatment process, including sludge and mixed salts, will be disposed of in an on-site landfill. As a result, no liquid or solid waste from the water treatment operations will leave Consol’s property. John Owsiany, director of waste systems and operations for Consol, said the water treatment plant cost $130 million. Consol spent another $70 million to build 35 miles of pipeline and six pump stations to bring water from underground areas of Consol Energy’s Blacksville 2, Loveridge and Robinson Ridge mines to the central treatment plant. The water is pretreated at the mine locations for metals removal before entering the pipelines.
 
West Virginia lawmakers soon will travel to North Dakota to learn about that state’s Legacy Fund, in hopes of establishing a similar savings program. The 2-year-old trust fund, built with oil and natural gas tax revenues, already contains more than $1 billion in assets. State officials aren’t allowed to touch that money until 2017, when interest generated from the account will flow into North Dakota’s general revenue fund. The current Legacy Fund takes 30 percent of all oil and natural gas tax revenues. The earlier, defeated version would have taken 50 percent. The ND Legacy Fund is part of the state constitution and requires voter approval to change. West Virginia collected $74.7 million in natural gas severance taxes last fiscal year, a slight increase from the $68.8 million collected in fiscal year 2012. Coal severance taxes, meanwhile, fell $73.4 million between the 2012 and 2013 fiscal years, from $460 million to $386.6 million.
 
National
U.S. Interior Secretary Sally Jewell drew on her experience as a former oil-industry engineer to defend proposed federal regulation of hydraulic fracturing for oil and gas on publicly owned land. Testifying to the House Natural Resources committee today, Jewell faced criticisms from Republican lawmakers, who said the department’s proposed rule on fracturing, or fracking, will lead to unnecessary production delays. Lawmakers told Jewell that state regulators best know the local geology and the federal government should leave the regulation to them. Jewell also drew on her engineering experience at Mobil Oil Co., now part of Exxon Mobil Corp., to answer Representative Alan Lowenthal (D, CA 47) who complained that the Interior proposal relies on the industry’s FracFocus website for disclosure of fracking chemicals. FracFocus “is imperfect, but it’s being updated,” she said. If it’s not providing adequate disclosure, “we will look for other ways to do it.”
 
The Environmental Protection Administration (EPA) said it plans to develop a proposed rule requiring companies who make chemical substances and mixtures used in hydraulic fracturing to report data on the chemicals. For more information please contact us.
 
Shale oil production in the U.S. and Canada added one million barrels to domestic production over the last year. Current activity may bring North American shale oil supply from 3.5 million to 8 million barrels per day before 2020. Such rapid growth from new oil wells has not been seen since Saudi Arabia increased its oil production capacity in the early 1970s. The timing for the world economy is ideal: the global oil supply balance was stretched to its limits in 2007-2008; Saudi expansion since then has mostly been to balance decline from northern Ghawar, and BRIC demand and Iraq supply now appear increasingly fragile. Rystad Energy believes that the world would be headed into an oil-driven recession without the North American shale oil revolution.
 
Domestic shale oil production could shoot up to 5 million barrels per day by 2017, making the United States the top oil producing country in the world, according to a policy brief, “The U.S. Shale Oil Boom: Potential Impacts and Vulnerabilities of an Unconventional Energy Source,” from the Belfer Center for Science and International Affairs at Harvard’s Kennedy School. The brief also projected that the U.S. could become the world’s largest oil producer. The report estimates there could be more than 100,000 working wells in North Dakota and Texas by 2030. There are about 10,000 now. Nationwide, production of all oil could shoot up from 11.3 million to 16 million barrels per day by 2017.
 
The U.S. economy is struggling to find a new formula for vigorous growth. But all growth opportunities are not created equal. New McKinsey Global Institute research, “Game changers: Five opportunities for U.S. growth and renewal”  pinpoints five catalysts – in energy, trade, technology, infrastructure, and talent development—that can quickly create jobs and deliver a substantial boost to GDP by 2020. According to the report, a main catalyst is “Shale-gas and -oil production. Powered by advances in horizontal drilling and hydraulic fracturing, the production of domestic shale gas and oil has grown more than 50 percent annually since 2007. The shale boom could add as much as $690 billion a year to GDP and create up to 1.7 million jobs across the economy by 2020. The impact will extend to energy-intensive manufacturing industries and beyond. The United States now has the potential to reduce net energy imports to zero—but only if it can successfully address the associated environmental risks.” For more information please contact HBW Resources.
 
In a new market research report, “The Shale Gas Market 2013-2023” by Visiongain has determined that the value of the global shale gas market in 2013 will reach $33.2 billion. The shale gas market is currently dominated by the US as this is where the technology to develop shale was pioneered. The U.S. also has a number of favorable characteristics that have helped promote the speed of shale gas production. However, this has created a distinctly two tier market between the nations with an established shale gas market, and less mature and more rapidly developing markets. Investment in shale gas exploration outside of North America will grow strongly over the next decade while the U.S. and Canadian markets will maintain their position as the epicenter of shale gas investment.
 
A new study, “Liquefied Natural Gas: Why Rapid Approval of the Backlog of Export Applications is Important for US Prosperity,” from the American Council for Capital Formation calls for the Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) to speed up the permitting process to authorize natural gas exports. An even better solution is for Congress to remove the DOE’s authority for authorizing natural gas export permits and allow the states to control the environmental review and permitting process for natural gas export facilities. Allowing for increased natural gas exports would be a huge boon for the American economy as it would expand U.S. market opportunities. According to the analysis, expanded natural gas exports would, in the time frame 2016–2035:
·         Increase employment by between 73,100 and 452,300 jobs;
·         Increase manufacturing job growth by between 7,800 and 76,800; and
·         Grow U.S. gross domestic product by $15.6 billion to $73.6 billion per year on average.
The study also includes increased employment for the refining, petrochemicals, and chemicals job sector and projects natural gas price increases of only about $0.32 to $1.02 per million British Thermal Units on average. For more information please contact us.
 
Demand for crude tankers has hit its highest level for this time of year since at least 2007. Traders and crude producers in July commissioned 126 oil tankers, each capable of carrying at least 2 million barrels, according to data released from Marex Spectron Group, a London-based commodities and freight-derivatives broker. Demand for very large crude carriers (VLCCs) is on the rise thanks to a recent International Energy Agency report predicting an “exceptionally high” 3 percent increase in global refinery processing between July and September.
 
Senate Energy and Natural Resources Committee Chairman Ron Wyden (D, OR) said lawmakers on the panel will soon unveil proposals on natural gas policy, a topic that has been a top committee focus this year. The committee, in hearings and informal committee “forums” this year, has heard hours of testimony on hydraulic fracturing, natural gas exports, infrastructure and many other topics related to the nation’s gas production boom.

EP Energy (formerly El Paso Energy) have committed to sharing key drilling, completions and hydraulic fracturing data on their Eagle Ford, Rockies / Altamont and Wolfcamp wells drilled between 2012 and 2014. It has joined the ‘Shale Performance Review’ (SPR) to trade its North American offset shale well data with BHP (Petrohawk), Chevron (Atlas), Hess, Husky, Hunt, Marathon, Murphy, Newfield, Nexen, Pioneer, Shell, Statoil (Brigham) Suncor and Talisman. Established early 2012 in Houston by a group of operators, the SPR enables the exchange of high quality and reliable data between Operators to aid them with their well planning, budgeting, performance management and benchmarking processes. For more information please contact us.
 
Memorial Production Partners LP announced it is acquiring oil and gas properties in the Permian Basin, East Texas and the Rockies for $606 million. The acquired properties in Texas, New Mexico, Wyoming and Colorado consist of 973 gross wells on 363,000 acres, which the company will operate 94 percent of the total proved reserves and 74 percent of the producing wells. Additionally, the company will acquire nearly 275 billion cubic feet of equivalent proved reserves, of which about 48 percent are located in the Permian Basin, 31 percent in East Texas and 21 percent in the Rockies. This sale will increase Memorial’s proved reserves by 36 percent to more than 1 trillion cubic feet of equivalent.
 
The EPA hosted two updates on its Hydraulic Fracturing Study. The first focused on “Water Acquisition Modeling” and was led by Dr. Andrew Gillespie, EPA’s ORD/National Exposure Research Laboratory. The second update focused on “Well Construction/Operation and Subsurface Modeling” and was jointly led by Jeanne Briskin, Hydraulic Fracturing Research Coordinator and Stephen Kraemer, Ecosystems Research Division of the National Exposure Research Laboratory. Both of the updates were based upon previously held technical workshops.
 
A new study, “Water-Smart Power, Strengthening the U.S. Electricity System in a Warming World,” released by the Union of Concerned Scientists recommends focusing on renewable energy rather than natural gas and nuclear power as a means for addressing both water and carbon concerns, as the country begins to replace many of its aging coal plants. The major sources of electric generation – coal, natural gas and nuclear power – all require large amounts of water to create power.
 
The Federal Energy Regulatory Commission (FERC) issued a “Notice of Data Requests to Certain Natural Gas Marketers for Information Related to Natural Gas Sales” in Docket No. RM13-1-000. Last November, FERC solicited comments on its proposal to require quarterly reporting of every jurisdictional natural gas transaction that entails physical delivery for the next day or for the next month. Quarterly reporting of all jurisdictional electric market contracts and transactions effectuated thereunder long has been the norm. The vast majority objected to the proposal, with many explaining that the requirement would not advance FERC’s goal of improving natural gas market transparency because jurisdictional transactions make up only a small portion of relevant sales. Instead of abandoning the proposal as expected, FERC now seeks more information to help it assess whether the proposed reporting requirement would improve transparency. The Notice explains that FERC’s Office of Enforcement will send data requests to “certain natural gas marketers” in order to gather “additional information about what portion of the total natural gas sales are jurisdictional natural gas sales.” Marketers that receive the five-question data request must respond directly to FERC staff within 15 days. Although marketers can seek confidential treatment of the data they provide in response, if FERC takes further action in the docket it may disclose information “in some summary or aggregated form.” For more information please contact HBW Resources.
 
International
When the Organization of the Petroleum Exporting Countries (OPEC) meets in December, it is rumored that they may slash its oil production for the first time in five years. OPEC could reduce production by half a million barrels a day due to the surge in the North American shale boom. OPEC’s latest report, released last week, projected that demand for its crude will slide 300,000 barrels a day next year to 29.6 million barrels of oil per day (MMbopd), or about 2.6 percent less than the organization is currently producing.
 
The European Union has no plans to impose a blanket ban on hydraulic fracturing, but it will lay out rules to address environmental concerns, a top EU official said. EU Environment chief Janez Potocnik said the European Commission, the bloc’s executive arm, will draft its proposal for the rules by the end of the year to settle “some serious legislative gaps.” “We don’t talk about banning fracking at the EU level,” Potocnik said after discussing the issue with the bloc’s environment ministers in the Lithuanian capital Vilnius. But he said they plan to ensure hydraulic fracturing or fracking is “done in a safe and secure way.” The EU’s 28 members are divided in their approach to fracking. Poland, for example, has enthusiastically granted exploration rights to U.S. fuel giants while France has banned the method. Leo Brincat, Environment Minister for Malta, has said that the EU continues to have doubts regarding the use of shale and its geological impact, production costs and socio-environmental impacts. Brincat, speaking at the same meeting for EU environment ministers in Lithuania, said that the largest challenge will be assessing the impact the gas will have on energy prices, competition and security of supply. For more information please contact us.
 
Argentina
Chevron and Argentinian oil firm YPF have inked a deal to spend $1.2 billion to further develop shale oil and gas resources in the Vaca Muerta formation. The deal calls for an initial phase in which 100 wells will be drilled in a 5,000-acre tract in the Loma La Lata Norte and Loma Campana areas. Chevron said the deal gives it the chance to grow productionbeyond its 2017 target of 3.3 million barrels per day. The Vaca Muerta formation is a giant shale oil and gas field that was discovered in 2010 by Spanish oil and gas firm Repsol and YPF. Repsol once owned a majority stake in YPF, but now holds a much smaller stake. Chevron Argentina currently produces an average of 21,000 barrels of crude oil and 4 million cubic feet of natural gas in the Neuquen Basin. The Loma La Lata area is currently producing more than 10,000 barrels of oil-equivalent per day. YPF said that Chevron will spend the first $300 million of the total planned outlay once a concession is granted by local officials. After that, both companies may continue with the total development of the areas, YPF said. YPF said that money it has already spent on the project together with the new contribution outlined in the deal with Chevron mark a total investment of $1.5 billion. Members of the Argentine Mapuche community are protesting against the deal claiming they were not consulted on plans to extract the resources from the site in southern Neuquen province – land which they claim as their own – nor were they informed of the potential environmental impact.
 
The Argentinean government is hoping to attract investment in the country’s Vaca Muerta shale oil field by announcing that it will allow energy companies to export up to 20% of the gas they produce free of tax. Buenosairesherald.com has reported that “export revenue of companies that invest at least $1 billion over five years will also be exempt from the foreign exchange controls that have been imposed by the government, according to an announcement in the government’s official daily gazette.” Moreover, these companies can keep their foreign exchange earnings outside Argentina and will be allowed to renew their concessions for a 25-year period, with a possible 10-year renovation after that. For more information please contact HBW Resources.
 
Australia 
Queensland could have its own shale gas industry within two years, the State Government says. Government briefing notes for Environment Minister Andrew Powell show there are 16 shale gas exploration programs in the state. But it warns any development would need numerous wells and an extensive expansion of the gas pipeline network to be viable. It would also use the controversial process known as fracking, which will put the fledgling industry on course for a battle with environmentalists. The main areas for exploration are the Cooper, Galilee, Eromanga and Maryborough basins. The Cooper Basin is already well developed and is considered the most likely to have the infrastructure to handle the development.
 
PetraGas, has applied for a Petroleum Exploration License covering approximately 3,900 square kilometers north of Hobart in central Tasmania to explore for shale oil and gas. The tenement application spans part of the petroleum-bearing Tasmania Basin, which is prospective for both conventional and unconventional oil and gas. The company’s initial geological assessment indicates shale oil and gas are the most prospective targets with the primary areas of interest located 50 km north of Hobart. The license straddles the Tasmanian Gas Pipeline which runs between Hobart and eastern mainland Victoria, allowing potential access to major gas markets.
 
Australia’s Prime Minister has announced a plan to replace a carbon tax with an emissions-trading scheme in 2014, a year earlier than the initial 2015 timetable. “The move to bring forward the market-based system a full year earlier is expected to quickly produce a sharp drop in the cost of carbon, from a predicted $23.30 per metric ton in July 2014 to around $5.50 per ton in American dollars.”
 
Canada 
Mako Hydrocarbons has received reiteration of support from joint venture partners Transerv Energy and Tamaska Oil & Gas for the farm out of its Duvernay and Rock Creek assets in Western Alberta to Canadian Pan Ocean. The Duvernay Shale is an emerging world class liquids rich resource play that is the source rock for most of the conventional oil fields in Alberta and has attracted the attention of companies such as ExxonMobil, Sinopec Daylight, Encana Corporation, Talisman Energy and ConocoPhillips. Mako’s farm out its Duvernay acreage to Canadian Pan Ocean requires CPO to also acquire all of Transerv and Tamaska’s interests in the resource play. Transerv will receive about $14.2 million while Tamaska will get $3.6 million from the sale. Transerv has a 34% interest in the Duvernay Shale acreage and 34% in the Rock Creek while Tamaska has 8% and 16% respectively. For more information please contact us.
 
Chile
Chilean energy executives interested in Pennsylvania’s Marcellus Shale natural gas are in the middle of a three-day trade visit to the state. The tour comes on the heels of Pennsylvania Governor Tom Corbett’s own trade trip to Chile last April. Bernardo Larrain is the chairman of Colbun, a Chilean energy company. Larrain says demand for energy in Chile is growing five to six percent a year, and will continue at that rate for the next 20 years. “And that’s why we’re here,” Larrain said. “Pennsylvania produces a lot of natural gas, shale gas. And Chile has a big installed capacity with plants that operate with natural gas. So I think there’s a good potential for association with the state of Pennsylvania.” Larrain says opposition to new coal fired plants in his country limits their options. He says his company has spoken to executives from large energy companies like Shell and BP about importing natural gas from the United States. For more information please contact HBW Resources.
 
France
Prime Minister Jean-Marc Ayrault has rejected a call for a rethink in the shale gas debate and said the government will not allow its exploitation in France. He was speaking after Industrial Renewal Minister Arnaud Montebourg told a committee planning reforms to the Code Minier – which sets the laws on development of underground resources – that he would like to see a state-owned company involved in “ecological” exploitation of shale gas gaz de schiste. New Ecology Minister Philippe Martin said there was no such thing as “ecological” exploitation of shale gas and received support from Housing Minister Cécile Duflot, of the Ecology Party. French President Francois Hollande ruled out exploration for shale gas during his presidency, dousing hopes that a ban on hydraulic fracturing could be reviewed following a legal challenge by a U.S. firm.
 
France’s top court said it would examine a challenge to a law that bans hydraulic fracturing, the drilling technique used to produce shale gas and oil. U.S. firm Schuepbach Energy, which held two exploration permits that were canceled in 2011, has contested the law. The Constitutional Council, made up of judges and former French presidents, has the power to annul laws if they are deemed to be unconstitutional. Schuepbach Energy challenged the law in the local court of Cergy-Pontoise near Paris, which forwarded the case to France’s highest administrative court, which then passed it on the Constitutional Council. Fracking was banned in France in 2011 under President Nicolas Sarkozy on concerns it could pollute groundwater and trigger earthquakes. After France put the ban in place, Schuepbach Energy said it had no alternative way to carry out the exploration, which led to the suspension of its two permits in the south of France.
 
Germany
The government has appointed the German firm DMT GmbH & Co. KG to study the country’s shale gas potential and help meet the mounting demand for energy as its conventional energy sources, in terms of the presently estimated proven reserve, are depleting fast, a top government official said. The Hydrocarbon Unit (HCU), a state-owned entity under the Energy Division of the ministry of power, energy and mineral resources (MPEMR), appointed the German firm through a competitive bidding process, in line with an instruction from the energy ministry. The DMT GmbH has been asked to submit its report by next October. For more information please contact us.
 
Romania
Romania-focused Zeta Petroleum reported Wednesday that it is raising $1.2 million on the Australian Securities Exchange to fund work programs on its assets. Zeta plans to bring theDornesti Sud-1 well into production. This is a discovery well on the company’s 50 percent-owned Suceava gas concession. It has tested at a rate of 918,000 cubic feet of gas per day and is currently suspended, ready for production. Successful production test at the Dornesti Sud-1 well is part of an on-going feasibility study to bring two gas discovery wells on the Suceava concession into production.
 
South Africa
The proved amount of South Africa’s technically recoverable, largely untapped, largely onshore natural gas reserves trapped in shale rock formations totals an estimated 11.04 trillion cubic metres (Tcm) of volume, the equivalent of about 390 000 trillion British thermal units (TBtu).  South Africa’s reserves have been ranked as the eighth-largest in the world. Southern Africa has the gas resources to defy expectations by stealing some of that spotlight, especially when the controversial hydraulic fracturing (fracking) process gets the green light in South Africa’s onshore bounteous shale plays situated in the coveted Karoo Basin landscape. The cost to produce the gas is one issue. The price it may fetch in domestic, regional, or international markets in the future is another. South Africa’s shale plays are being tending by a super-major, Dutch Royal Shell, amid four other players. For more information please contact us.
 
United Kingdom
An unscientific poll run by the media organization, The Sun, found almost three-quarters of were in favor of mining the massive reserves – using technology known as fracking — which lie under many parts of the country. Sun readers signaled, “We’re backing fracking” by 71 per cent to 29 per cent after experts estimated there are 1.3trillion cubic feet of gas lying buried between Blackpool and Scarborough. Energy Minister Michael Fallon said, “Shale gas is a great opportunity for Britain. It could provide secure energy, generate investment and create jobs.”
 
At the 2nd Annual UK Shale Summit: Making It Happen event, Tim Yeo, chair of the energy and climate change committee in the UK Parliament, described the event as ‘timely’ and ‘topical’ (just last month the British Geological Survey (BGS) said that the country’s shale gas resources are estimated to be 1329 trillion cubic feet). His reasons to develop shale gas are to reduce dependency on imports and to keep gas prices down. However, he said that unlocking shale potential would be a slow and difficult process because of the UK’s strong tradition of protecting its environment. There is a near certainty, he believed, of strong opposition based on environmental concerns even though this may “sometimes border on being completely irrational.” The way to win over local communities would be to make them direct beneficiaries. While he personally felt that 25% of revenues going to land owners would be a great method and a model used in the US, he said its implementation would not be likely, there are other ways of going about it, such as offering to freeze energy bills. Something dramatic is needed, said Yeo, not just for local councils but individuals too. He also spoke about the importance of having a low carbon element as part of the UK’s energy mix.
 
Gas prices could fall by a quarter and help bring down household energy bills if Britain exploits its shale gas reserves, a report commissioned by Ed Davey, the Energy Secretary, suggests. The study by Navigant Consulting backs up David Cameron’s claim that shale gas drilling could help cut the cost of living for families struggling with average bills of more than £1,300 per year. For more information please contact HBW Resources.

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 us anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report, the HBW Greenfield Offshore Energy Report, the Forsgren Environmental Report, and daily updates and new Member profiles can be viewed at the new Intelligence Tab on the HBW Resources website at:http://hbwresources.com/intelligence/.  Hope you all 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
Web: http://www.hbwresources.com

Senate Nuclear Option Exposes Lack of Experience While ENR Considers Increased US Oil Production

Tuesday in Washington:


 
Lack of Experience Starting to Show:

Following three hours of deliberation in the Old Senate Chamber last night, the Senate continues to struggle with an effort brought forward by Majority Leader Harry Reid to change the Senate rules with respect to filibusters of political nominees.  Proponents of the change say it is needed to help alleviate historic and unrelenting gridlock.  Opponents claim it will undermine minority rights in the Senate and fundamentally alter the tenor of the chamber by giving additional power to the party in the Majority.  The Senate last changed parties in 2006.  Of the Senate’s 100 members, 46 have been serving less than six years, including 32 of the 54 members Democratic Caucus. So, the majority of the Majority seeking to expand the power of the Majority have never been in the minority.  The Senate could attempt to execute this option as early as this morning.
 
In other Senate news, Rep. Ed Markey will be sworn in to the Senate this morning at the Chamber’s newest member.  Additionally, Senator Reid filed cloture on the nomination of Gina McCarthy to serve as the next administrator of the EPA, setting up a potential vote on Thursday.  The Senate Energy and Natural Resources Committee will hold a hearing on the impact of expanded oil and gas production on fuel prices this morning. 
 
The House will be taking up three bills under suspension of the rules today.  The bills include:  H.R. 2576, to modify requirements relating to the availability of pipeline safety regulatory documents; H.R. 1848, the Small Airplane Revitalization Act of 2013; and H.R. 2611, to designate the headquarters building of the Coast Guard on the campus located at 2701 Martin Luther King, Jr. Avenue Southeast in the District of Columbia as the “Douglas A. Munro Coast Guard Headquarters Building.”  Also of note, the House Energy and Commerce will begin a two day mark up of legislation today including measures to restrain the EPA and expedite approval of new pipelines.
 
Other Items of Interest:
 
House to Hold Two Days of Hearings on RFS: The Energy and Commerce Committee Energy and Power Subcommittee announced it will hold two days of hearings to get stakeholder input on the Renewable Fuels standard on July 23rd and July 24th.
 
Important Events and Hearings:  
 
DOE Hosts Meeting of the National Petroleum Council:  Today at 9 AM at the St. Regis Hotel at 923 16th Street, the Energy Department (DOE); Office of Fossil Energy will hold a meeting of the National Petroleum Council. The event will be available via webcast at: http://www.npc.org.
 
Senate Committee Reviews Impact of Expanded Oil and Gas Production on Fuel Prices:  Today at 10 AM in 366 Dirksen, the Senate Energy and Natural Resources Committee will hold a full committee hearing on how United States gasoline and fuel prices are being affected by the current boom in domestic oil production and the restructuring of the United States refining industry and distribution system. Adam Sieminski, administrator of the Energy Information Administration; Jeff Hume, vice chairman for strategic growth initiatives at the Continental Resources, Inc., Oklahoma City, Okla.; Bill Klesse, chairman and CEO of the Valero Energy Corporation, San Antonio, Texas; Dan Gilligan, president of the The Petroleum Marketers Association of America, Arlington, Va.; Chris Plaushin, director of federal relations for the American Automobile Association, Healthrow, Fla.; and Faisel Khan, managing director for integrated oil and gas research at Citigroup Inc., New York, N.Y., will testify. Additional information can be found at: http://energy.senate.gov.
 
Senate Appropriations Committee Marks Up CJS Bill: Today at 10 AM in 192 Dirksen, the Senate Appropriations Committee will mark up the FY2014 Commerce, Justice, and Science Appropriations bill. 
 
DOE Methane Hydrate Advisory Committee Meeting:  Today at 12:45 PM at 1000 Independence Ave., the Energy Department (DOE); Office of Fossil Energy will hold a meeting of the Methane Hydrate Advisory Committee to discuss committee comments on draft methane hydrate roadmap, committee recommendations and receive public comments.
 
House Markup of Energy Bills:  Today and tomorrow in 2123 Rayburn, the House Energy and Commerce Committee will hold a full committee markup of H.R.1582, the “Energy Consumers Relief Act of 2013”; H.R.1900, the “Natural Gas Pipeline Permitting Reform Act”; H.R.83, to require the Secretary of the Interior to develop an action plan to address the energy needs of the insular areas of the United States and the Freely Associated States; H.R.2094, the “School Access to Emergency Epinephrine Act”; H.R.698, the “HIV Organ Policy Equity Act”; and H.R.2052, the “Global Investment in American Jobs Act of 2013.” Additional information about the markup can be found here:  http://energycommerce.house.gov.
 
New Member of the Day: US Representative Susan Brooks (R-IN)

 
 
Committee Assignments:  Education and Workforce, Homeland Security, and Ethics
 
Contacts:
Chief of Staff: Mel Raines
Legislative Director: Megan Savage
Twitter: @SusanWBrooks
 
Experience: After receiving her undergraduate degree from Miami University of Ohio, Rep. Brooks pursued a Juris Doctor (J.D.) from the Indiana University Indianapolis School of Law. Before joining the House of Representatives, Susan served as Senior Vice President and General Counsel for Ivy Tech Community College.  While there, she implemented workforce development strategies aiming to enhance job training and placement for thousands of Indiana residents. In 2001, President George W. Bush appointed Susan as U.S. Attorney for the Southern District of Indiana.  She earned recognition as Deputy Mayor of Indianapolis during the Steve Goldsmith administration, where she provided oversight on public safety operations and drove community dialogue on vital civic issues. S he also practiced law at the Indianapolis firm of Ice Miller and also served as a criminal defense attorney for Indianapolis based McClure, McClure and Kammen.

Importance: Congresswoman Susan Brooks represents the 5th District of Indiana, which spans eight counties throughout the central part of Indiana. It was concern about the country’s debt and deficit and its effect on the labor market that prompted her to run for Congress in the first place. During her race, she made headlines by dismissing Grover Norquist’s anti-tax pledge, saying she wouldn’t sign pledges of any kind.  Her background in education and her focus on jobs makes her a strong advocate for STEM education and preparing students for actual careers in an increasingly competitive job market.  She believes that there is a federal role in education to ensure our students are able to compete globally. 
 
If you have any questions, please contact me anytime. Previous updates and new Member profiles can be viewed at HBW Resource’s new Intelligence Tab at: http://hbwresources.com/intelligence/. Hope you all 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
 
 

New HBW Ollison Hydraulic Fracturing Report

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.

California
The U.S. District Court for the Northern District of California deadlines for the federal government and environmental activists to propose a remedy to its March finding that the BLM had failed to consider the risks of hydraulic fracturing when it leased 2,700 acres for oil and gas development in the state. The court issued the briefing order on May 15th, giving the parties until June 3rd to file their opening brief, the defendant until June 25th to file a response, and the plaintiffs until July 9th to file a reply brief. A hearing on the remedy was also set for July 16th. In the March 31st decision, the court rebuked BLM for not taking a “hard look” at the impacts of hydraulic fracturing, as required under NEPA, when it sold oil and gas leases totaling 2,700 acres of federal land.

Hydraulic fracturing will be the subject of the Greater Bakersfield Chamber of Commerce’s “Good Morning Bakersfield” business breakfast from 7 to 8:30 a.m. July 29 at the DoubleTree by Hilton, 3100 Camino Del Rio Court. The event is to feature presentations by representatives of the state Department of Conservation, the Western States Petroleum Association and Energy-in-Depth, among others. Attendance costs $45 for chamber members and $75 for non-members. A table of 10 costs $550. For information, call the chamber at 327-4421.

Colorado
Colorado is pledging stricter enforcement of its hydraulic fracturing chemical disclosure rules, after letting many companies miss deadlines for the first year of mandatory reporting. The move came less than two weeks after EnergyWire reported that more than one-fifth of the reports filed to FracFocus for Colorado and Pennsylvania wells last year were late, and that neither state has penalized companies for missing deadlines. The state requires reports to be filed to FracFocus within 60 days of a frack job. The Colorado Oil and Gas Conservation Commission warned companies it will begin “active enforcement” July 1. The commission’s notice, dated June 20, said there could be fines of up to $250 a day, though “first-time violations will be considered less serious.” For more information please contact HBW Resources.

The Colorado Court of Appeals (Case No. 2013 COA 106) overturned a Lone Pine order and a dismissal order issued by the lower court in the case of Strudley v. Antero Resources Corporation, Antero Resources Piceance Corporation, Calfrac Well Services, and Frontier Drilling LLC (Case No. 2011-cv-2218, Denver County District Court), remanding the case back to the trial court for further proceedings. The plaintiffs complained that the defendants’ natural gas well activities, including hydraulic fracturing, had contaminated their water supply. The Lone Pine order issued by the court required the plaintiffs to make a prima facie showing of exposure, injury, and specific causation by providing expert affidavits from doctors, contamination reports and other information relating to the identification and quantification of hazardous substances to which each family member was exposed from defendants’ operations, as well as how long and at what concentration levels. The plaintiffs submitted the affidavit of a doctor who, although never examining the family members, concluded that “sufficient environmental exposure and health information exists to merit further substantive discovery.” The lower court found this affidavit to be insufficient and ordered the case dismissed, leading to the appellate review of the two orders. The Colorado Court of Appeals reversed. The court cited two primary reason for doing so. The first was anchored in two Colorado Supreme Court cases that the court interpreted as standing for the proposition “that a trial court may not require a showing of a prima [facie] case before allowing discovery on matters central to a plaintiff’s claims”. Second, the court cited differences between Colorado Rule of Procedure 16 and Federal Rule of Civil Procedure 16. (Federal courts often cite to Fed. R. Civ. P. 16 as the basis of their authority to issue Lone Pine orders.) The court further held that, even assuming it was writing on a blank slate, unlike the majority of cases allowing Lone Pine orders, this was not a mass tort case nor was it “any more complex or cost intensive than an average toxic tort case.” The court saw this lawsuit as simply a case involving four family members suing four defendants over alleged pollution of one parcel of land, making the Lone Pine order unnecessary. The court did note that at least one other court issued a Lone Pine order in a case involving only a few parties. See Pinares v. United Techs. Corp., No. 10-80883, 2011 WL 240512, at *1-2 (S.D. Fla. Jan. 19, 2011).

Opponents of hydraulic fracturing have turned in petitions seeking to ban the practice in Lafayette. The petitioners, led by citizen group East Boulder County United, turned in 2,042 signatures in support of a citywide vote on the Lafayette Community Rights Act, which includes a ban on hydraulic fracturing within city limits and would prohibit the disposal of associated waste products inside Lafayette. The city clerk’s office is verifying whether at least 948 of the signatures are valid before the measure can go to voters in November. For more information please contact HBW Resources.

Protect Our Loveland, submitted petitions to allow voters the opportunity to choose whether to stop oil and gas development for two years in city limits while staff members do further research into the health and environmental effects the process creates. Loveland City Council members will have two choices: place the measure on the ballot or enact the moratorium without a vote. The second option is unlikely, however, because City Council members voted earlier this year to create a regulatory system in which oil and gas producers can receive necessary permits to conduct their operations.

A recent Frack-Free Colorado meeting in Boulder discussed the next steps toward a statewide fracking moratorium or ban on the practice. Organizers said that before November 2014, petitioners would need to collect about 86,000 signatures to get a measure on the state ballot. They would need to have ballot language approved by the state and overcome any legal challenges the language may raise.

Illinois
With the recent passage and signing into law of SB 1715, the Illinois Department of Natural Resources (DNR) Director Marc Miller hosted a meeting regarding their schedule for hydraulic fracturing regulations with NGO’s, including the Grow-IL Coalition, the following timeline for regulations was provided:
·         Mid-October 2013: Draft rules will be provided to industry and the NGO’s
·         Industry and NGO’s will have 30-45 days to provide comments back to DNR
·         January 2014: The rules will be officially filed with the Secretary of State’s Index Division.  This will start the official 45 day comment period.
·         April 2014:  The Second Notice rules will be provided to JCAR in April (It could fall back to May or June if complex comments are offered)
DNR hopes to have the final rules completed within a year so that industry can begin making applications for permits. They indicated a need for 53 new employees that includes 11 attorneys, 20 well inspectors, and additional administrators, accountants, environmental experts, and others.  DNR noted that resources are available from a “sister agency” and that they do not plan to seek a supplemental appropriation from the General Assembly for regular staffing. DNR expects to have the “registration forms” available later this fall that can be completed but it is clear that applications for companies will not be available until the middle of 2014 at the earliest. For more information please contact HBW Resources.

Maine
Protesters are trying to stop the transportation through Maine of fossil fuels extracted through fracking in other parts of the country. Six protesters belonging to 350 Maine, an environmental group, were arrested after they tried to block a rail line to stop the delivery of hundreds of thousands of gallons of crude oil from fracking operations in North Dakota. Train deliveries of crude through New England, to an Irving Oil refinery in St. John’s, N.B., have become routine over the past year, according to rail and energy industry officials. Environmentalists also recently launched a campaign to get universities and nonprofits to divest their endowment investments in energy companies that engage in fracking.

Maryland
The Maryland Department of the Environment will present an overview of the draft report, Marcellus Shale Safe Drilling Initiative Study Part II Best Practices, at a public informational meeting on July 16, starting at 2:00 p.m. at the Maryland Department of the Environment, 1800 Washington Boulevard, Baltimore 21230.

Michigan
Experts on hydraulic fracturing will present both sides of the practice at a July 17 informational meeting hosted by the Ottawa County Planning Commission. The meeting will be held at 7 p.m. pm in the Main Conference Room of the Ottawa County Fillmore Street Complex, 12220 Fillmore St., West Olive, MI. The meeting is expected to conclude at 9 p.m. The seminar will include presentations from a local environmental consultant, the Michigan Department of Environmental Quality, the Michigan Oil and Gas Association, the Committee to Ban Fracking in Michigan, the law firm of Scholten Fant and the Michigan State University Extension. A question and answer session will follow the presentations. Individuals interested in attending are encouraged to RVSP by July 10 by contacting the Ottawa County Department of Planning and Performance Improvement by phone at 616-738-4852 or by email atplan@miottawa.org

Penske Truck Leasing announced it has ordered 100 compressed natural gas (CNG) Freightliner Cascadia tractors equipped with Cummins Westport 12-liter engines. The natural gas tractors will be used by Penske’s full-service truck leasing and commercial truck rental customers at various locations across the United States. Penske Truck Leasing estimates that before the year’s end it will have more than 200 natural gas tractors within its fleet for use by its full-service truck leasing customers and commercial truck rental customers. For more information please contact HBW Resources.

New Jersey
New Jersey Gov. Christie’s September 2012 veto of a bill prohibiting the disposal of out-of-state wastewater from hydraulic fracturing will not be considered by the state Assembly. Environmental NGOs pushed for an override vote, but the bill was held because proponents did not have the votes. Proponents argued that wastewater injected underground could contaminate drinking water supplies, but Governor Christie vetoed the bill, believing a ban was an unconstitutional restriction on commerce as all wastewater would come from out-of-state.

New Mexico
The federal government has given the green light to a proposal to build 234 miles of pipeline to transport natural gas liquids from one corner of New Mexico to the other and ultimately to markets in South Texas. The Bureau of Land Management’s approval of the Western Expansion Pipeline III project comes just a week after President Barack Obama unveiled his plan for combating climate change, part of which included boosting the role of natural gas in energy production. The $320 million project will transport natural gas liquid products from northwestern New Mexico to a hub in Hobbs in the southeastern corner of the state and ultimately to Texas to help meet existing and future demand. News of the pipeline’s approval encouraged oil and gas developers in New Mexico, which is home to portions of both the Permian and San Juan basins.

New York
The Green Party of New York state is reiterating its call for the complete criminalization of fracking. According to the Green Party, a law to criminalize fracking is not only wanted by the public but necessary due to fracking’s potentially destructive effects, not just on the environment, but on public health, economic stability and individual communities as well. The Green Party has been calling for the criminalization of fracking since 2010 and has since been fighting to help local leaders stop fracking in their own communities by way of home rule measures. For more information please contact HBW Resources.

North Carolina
Environmental activists blocked a chemical plant in what they said was a protest against the company’s sale of products used in the natural gas drilling process called hydraulic fracturing. Between six and 10 police officers and sheriff’s deputies were watching but taking no action against the protesters at the Momentive resin plant in Morganton, about 60 miles northwest of Charlotte. The blockade started after the plant’s employees had arrived for work, and production was able to continue during the protest. However, a tanker truck was stopped from leaving to deliver a shipment. Protesters erected the pair of three-legged, 20-foot-tall wooden structures at the plant gates. Each has a protester stationed on top, and their safety could be imperiled if they were forcibly removed or the tripod toppled.

North Dakota
North Dakota’s booming economy and low level of unemployment makes it a prime target for finding returns, with Hermes Fund Managers calling it an emerging market in a developed state. North Dakota’s low unemployment rate (just 3.2% compared to the US average of 7.6%) and its booming local economy makes it an emerging market in a developed country. The low jobless rate isn’t the only factor: North Dakota finds itself sat on a huge pile of Bakken Shale reserve, and produces 800,000 barrels of oil a day, making it the second biggest producer of oil in the US, behind Texas.

The North Dakota Industrial Commission’s July 15 crude oil production report will likely show a production increase of 12 thousand barrels of oil per day (bopd) from April to May, according to energy information provider Genscape. This production figure would represent a 65,000 bopd increase since the start of 2015 and a 170,000 bopd rise from this time last year. Genscape has seen significant production gains as weather has improved in June and July and completion activity has increased. Over the past two months, 65,000 bopd of production has been added in North Dakota, equivalent to production increases seen over the first five months of 2013. The company forecasts Bakken crude to keep rising with 127,000 bopd added between May and year-end 2013. Genscape estimates production will reach 1.1 million bopd by the end of 2014.

Ohio
Carroll County Energy LLC intends to build a 700-megawatt plant that would be powered by natural gas from Ohio’s Utica shale. The $800 million investment is enough generation to provide electricity to 700,000 houses. The plant will provide up to 500 construction jobs and will employ 25 to 30 workers when completed. Construction would take two to three years. It will produce 50 percent of the carbon dioxide and less than 10 percent of the sulfur dioxide and nitrogen oxide that would have been produced by a coal-fired plant, the company said.

Hilcorp Energy Co. is planning to drill two more horizontal oil and gas wells at its Carbon Limestone Landfill site in Poland Township. The Ohio Department of Natural Resources (ODNR) issued two new permits for Hilcorp to drill at the site, located on land owned by Republic Services, which operates the landfill. Hilcorp has drilled one well at the site and has permits for six additional wells including the two issued July 2 by ODNR. Hilcorp and NiSource Transmission have partnered to form Pennant Midstream LLC, which is building a $300 million pipeline and processing system — the Hickory Bend project — that extends from western Pennsylvania, through southern Mahoning County, and into Columbiana County. For more information please contact HBW Resources.

The Ohio Department of Natural Resources recently released new rules for operators applying for unitization. A part of the Ohio Revised Code, section 1509.28, “unitization” allows oil and gas companies to pool landowners across vast stretches of land that either can’t be contacted or who have no interest in selling the mineral rights below their property. Horizontal shale wells require lateral runs that extend thousands of feet deep underground. Typically, when a company applies for unitization, it indicates that it has plans to drill multiple wells from one pad, which requires more acreage. Multiple wells at one pad not only reduce surface disruption, but they also maximize the return of oil and gas.

EPA Region 5 is investigating whether an Ohio law requiring oil and gas companies to file reports with the Ohio Department of Natural Resources (“DNR”) also satisfies federal Emergency Planning and Community Right-to-Know Act (“EPCRA”) reporting requirements. The Ohio law does not require companies to report certain information about the chemicals used by oil and gas companies, and these reports do not go to first responders. An Ohio EPA representative said the agency is reviewing U.S. EPA’s letter, although all reports submitted to Ohio DNR are available to first responders through the agency’s website. The Ohio Oil and Gas Association stated that the inquiry is a non-issue, as companies using hydraulic fracturing techniques do not use enough chemicals to fall under EPCRA.

An Ohio State University policy brief, “Too Many Heads and Not Enough Beds: Will Shale Development Cause a Housing Shortage?” examines the impact of shale development on housing in Pennsylvania from 2007 to 2011, the first four years of Pennsylvania’s boom period, and uses that information to predict what Ohio can expect in the coming years. The policy brief was prompted by reports that surging numbers of shale-related workers in some areas of Pennsylvania resulted in doubling or tripling of market rents. For more information please contact HBW Resources.

pipeline project to move natural gas liquids from the Utica and Marcellus shale plays to the Gulf Coast has taken a step forward with the board of directors at Williams Companies Inc. signing off on the plan. The project calls for construction of a natural gas liquids pipeline from the Utica and Marcellus shale plays in Ohio, West Virginia and Pennsylvania to processing and storage facilities in Louisiana. Williams and Boardwalk disclosed the Bluegrass project in March, saying its first phase will provide oil and gas producers with 200,000 barrels per day of mixed natural gas liquid capacity. The pipeline could boost development of the Utica shale play, which oil and gas experts have said appears to be rich in gas liquids such as ethane, propane and butane.

A Boston-based company announced plans Tuesday to build a natural gas-fired power plant that will generate enough electricity to power 700,000 homes. The 700-megawatt Carroll County Energy project is planned for a 77-acre site some 2.5 miles north of the village on state Route 9, said Jonathan W. Winslow, director of development for Advanced Power North America. The $800 million plant would employ up to 500 workers during construction, and about 30 full-time workers once completed, he said. The power plant still needs approval by the Ohio Power Siting Board, which can take up to a year, and would take up to three years to build, Winslow said.

There are a number of notable provisions not included in the $62 billion biennial budget signed into law recently by Gov. John Kasich. The governor’s long-sought increase in the tax rate on oil and gas produced via horizontal hydraulic fracturing isn’t there, though he says he’ll push that issue until an increase is approved by lawmakers.

Pennsylvania
Gov. Tom Corbett signed SB 259, introduced by Sen. Gene Yaw(R, District 23), regulating how oil and gas royalty information is to be provided to lessors. The legislation was originally promoted as an effort to bring more transparency to the deductions companies take out of royalty payments.  The new legislation only applies to people with existing oil and gas leases. It allows companies to combine land parcels for horizontal drilling, unless it’s explicitly prohibited in the lease. For more information please contact HBW Resources.

Holbein Inc. plans to excavate and sell shale rock from its new location in Buffalo Township. The township supervisors on Wednesday approved a permit allowing the extraction. Holbein also must be granted a permit from the state Department of Environmental Protection in order to sell the rock.

As the Delaware River Basin Commission (DRBC) met in Wilmington, one thing not on their agenda is any decision on natural gas drilling. But a group of natural gas leaseholders from Wayne County have threatened to sue the DRBC if the agency doesn’t act in some way on its own proposed drilling regulations at Wednesday’s meeting. The Northern Wayne Property Owners Alliance is an organization of landowners from Wayne County who together negotiated lease terms with two energy companies to drill for natural gas. The Alliance wants the Commission to either schedule a vote on proposed regulations, or step aside and allow state regulations to be enforced. More than two years ago, in December 2010, the DRBC released it’s proposed gas drilling regulations for the Basin. Public hearings and comments broke all records and illustrated the intense division over the issue. The DRBC published its revised draft regulations in November 2011 with a meeting scheduled that month to vote on the proposal. But the meeting was quickly cancelled after it became clear that the members of the Commission did not agree. Since then, the Commission has been silent on the issue.

UGI Penn Natural Gas customers’ bills should still be one-third lower than they were five years ago – even with a rate increase on June 1. Since the Marcellus Shale drilling boom started in 2008, the resulting bounty of natural gas has translated into savings for Pennsylvania customers. And Pat Creighton, a spokesman for the industry group Marcellus Shale Coalition, says it’s a trend nationwide. “We are flush with gas in the United States, and that is a direct benefit to the consumer,” he said. Based on the use of 89 mcf – 8,900 cubic feet – per month, the average monthly bill for a residential UGI Penn Natural Gas customer was $157.95 as of June 1, 2008, according to data provided by the company. After UGI’s 4.2 percent increase took effect on June 1, the average monthly residential bill is $96.67.

FirstEnergy Corp. was looking at its remaining coal-fired power plants along the Ohio River and West Virginia and considering whether to add boilers that would use natural gas. The move, which would be costly and take place over several years, would allow the power plants to generate electricity from natural gas as well as the coal that has come under intense environmental scrutiny in recent years. The plants included three in southwestern Pennsylvania. But instead the company has decided that it would close two plants, Mitchell Power Station and Hatfield’s Ferry  by October 9 and lay off as many as 380 employees and one of its coal plants, Bruce Mansfield Plant, would instead be retrofitted with equipment that will reduce their emissions to levels that are required under existing and potential federal regulations.

Puerto Rico
FERC issued a ruling that EcoEléctrica LP’s planned LNG supply pipeline project is not subject to the agency’s mandatory pre-filing environmental review process, and that the company’s environmental assessment of the project is sufficient to comply with NEPA requirements. The company had asked FERC in April for this ruling for its proposal to install additional facilities at its existing export terminal. LNG export issues play an important part of the domestic natural gas picture as sufficient markets are seen as necessary to sustain continued development.

Texas
Frontier Logistics and Kyle Kinsel Co., developers of Mission Rail Park, will begin constructing a 550-acre rail-equipped industrial facility, situated between Big Spring, Texas and Midland, Texas. The Permian Rail Park, slated to open in second quarter 2014, will be situated in the Wolfcamp and Cline Shale plays in the Permian Basin. It’s also 100 miles of the Delaware Basin’s Bone Springs Shale, Avalon Shale and Wolfbone play. The Rail Park will serve industrial tenants ranging from large distribution and manufacturing facilities to small rail users, the developers added. It will also house oilfield service and pipeline operations that need rail to move products to and from nearby shale plays. For more information please contact HBW Resources.

The Eagle Ford Shale is pumping big money into the local economy and creating a boom in jobs. One industry in particular, is in high demand for truck drivers and the Del Mar College Transportation Service has a fairly long waiting list for that program. President of Del Mar College, Mark Escamilla says the wait list has gone from 90 days to 30. The big rig driving program will get trainees a license to drive an 18-wheeler in about a month.

West Virginia
The West Virginia Department of Environmental Protection (DEP) has told key state legislators that no additional requirements are needed to protect the air quality from horizontal oil and gas drilling.

An explosion over the weekend at a natural gas well site in West Virginia operated by Antero Resources injured at least five people, prompting state and federal investigations, local officials and Antero said. A spark triggered a flash explosion and a fire after a problem during the “flow back” process when drilling fluids are pumped into storage tanks, according to Pat Heaster, director of emergency services in Doddridge County, about 100 miles north of Charleston. Two storage tanks containing brine and fracking fluid from the well exploded at 4 a.m. EDT (0800 GMT) on Sunday Antero spokesman Alvyn Schopp said. Five workers were taken to hospital with burns, he said. For more information please contact HBW Resources.

National

U.S. oil production jumped last week to the highest level since January 1992, cutting consumption of foreign fuel and putting the U.S. closer to energy independence. Drilling techniques including hydraulic fracturing, or fracking, pushed crude output up by 134,000 barrels, or 1.8 percent, to 7.401 million barrels a day in the seven days ended July 5, the Energy Information Administration said. Rising crude supplies from oilfields including North Dakota’s Bakken shale and the Eagle Ford in Texas have helped the U.S. become the world’s largest exporter of refined fuels including gasoline and diesel. The shale boom has also helped cut world reliance on OPEC oil even as global demand gains.

The Energy and Power Subcommittee of the House Energy and Commerce Committee passed with a 17-9 vote, HR 1900 the Natural Gas Pipeline Permitting Reform Act, aimed at speeding up federal approval of permits for natural gas pipelines, an effort to help the burgeoning industry increase distribution and to reduce utility costs for consumers. Sponsored by Rep. Mike Pompeo (R, KS 4), the bill would require automatic approval of permits if agencies don’t complete application reviews within 90 days of completion of environmental studies.

A new bill would strip the U.S. Department of Energy of authority over LNG exports. HR 2471, introduced by Rep. Ted Poe (R, TX 2) would transfer the authority to review LNG export applications to the Federal Energy Regulatory Commission. The bill’s sponsors cited conflicting and unsatisfactory responses by DOE on how long the review process would take, what criteria the department would use in approving export applications, and its recent decision to give priority to projects that have pre-filed with FERC. The bill was referred to the House Foreign Affairs Committee’s Subcommittee on Terrorism, Nonproliferation and Trade. Additionally, a bipartisan group of 32 Senators sent a letter to DOE urging it to expedite LNG Permit applications.

Karen Bass (D, CA 37), introduced an amendment prohibiting the use of federal funds for hydraulic fracturing in the Inglewood Oil Field in Los Angeles, California. The amendment was rejected in a voice vote.

The American Petroleum Institute (API) said there were 8,739 oil wells drilled in the United States during the second quarter of 2013, a 9 percent increase year-over-year. The total number of natural gas wells completed during the second quarter increased 2 percent, to 12,645, compared to the same period in 2012. API statistics chief Hazem Arafa said the oil and natural gas industry was in the midst of an expansion because of access to private and state lands. For more information please contact HBW Resources.

Enterprise Products Partners L.P. is building a 1,230 mile Appalachia-to-Texas (ATEX) Express Pipeline to transport fluids from the Utica shale well fields. The pipeline will carry ethane from Ohio, Pennsylvania and West Virginia to near Houston as of the first quarter of 2014. The pipeline will stretch for 264.61 miles across 13 counties in Ohio, including: Jefferson County, Harrison, Tuscarawas, Coshocton, Muskingum, Licking, Fairfield, Pickaway, Fayette, Greene, Clinton, Warren and Butler County. The pipeline will extend from southwest Pennsylvania to Seymour, Indiana, at which point it will connect to a pre-existing Enterprise pipeline which extends through Illinois, Missouri, Arkansas, Louisiana and Texas.

Algonquin Gas Transmissions is proposing to install new pipelines, replace others and build transmission stations in the heavily populated, 200-mile New York-to-Boston corridor. The preliminary plan would build and replace about 44 miles of pipeline in Connecticut, Massachusetts, New York and Rhode Island, install a new pipeline to span the Hudson River in New York and build compressor stations to boost gas flow. The project, which would expand the current Algonquin system, would add 450,000 cubic feet of gas per day to the 2 billion cubic feet piped in daily.

This week marks the five year anniversary of the introduction of the “Pickens Plan,” a campaign to bring the issue of energy out of the back corners of American society and into the living room and front porch of every home in the United States. “Domestic oil production is at a 22-year high while domestic natural gas production is at an all-time high. All of this despite the administration’s often open antagonism toward the industry. In spite of the economic collapse, the oil and gas industry continues to provide thousands of direct jobs while producing ample fuel for the millions of Americans who depend on a boiler, a furnace, a truck or anything else that runs on oil or natural gas for them to be able to keep their jobs. If you want to blame the oil and gas industry for anything, blame it for creating too many jobs.”

A new study, Injection-Induced Earthquakes, led by researchers at Columbia University and published Friday in the journal Science suggests a strong quake that strikes halfway around the globe can set off small to mid-size quakes near injection wells in the U.S. heartland. The new research that suggests oil and gas drilling operations may make fault zones sensitive to shock waves from distant big quakes. For more information please contact HBW Resources.

Josh Fox takes another look at the “dangers” of hydraulic fracturing in his new documentary Gasland Part 2. The film argues that the gas industry’s portrayal of natural gas as a clean and safe alternative to oil is a myth, and that fracked wells inevitably leak over time, contaminating water and air, hurting families, and endangering the earth’s climate with the potent greenhouse gas, methane. … Ever since theater director-turned-filmmaker Josh Fox was approached five years ago with an unexpected offer of $100,000 for the natural gas drilling rights to his property in the Delaware River Basin, on the border of New York and Pennsylvania, he has been on a mission to investigate hydraulic fracturing. His first film, Gasland, debuted at the 2010 Sundance Film Festival and made its HBO debut later that year. Gasland Part II begins with the 2012 State of the Union Address, in which President Obama declares his support for the safe development of natural gas production. Towards the film’s conclusion, Fox is arrested trying to film a congressional hearing regarding the EPA results in Pavilion. The documentary debuted on HBO, Monday, July 8.

International

The European Parliament after months of bitter debate backed a plan to boost carbon prices, throwing a lifeline to the EU Emissions Trading System (ETS) and the bloc’s push for greener energy. EU politicians in Strasbourg voted 344-311 in favor of temporarily removing up to 900 million permits from trade, tackling oversupply that has sent carbon prices to record lows. The ETS is a cornerstone of European Union climate policy, but a much higher carbon price is needed to achieve its goal of spurring industry to invest in low-carbon energy. EU politicians voted against a plan put forward last month but agreed to allow a one-off intervention in the market to temporarily withdraw up to 900 million permits.

The Organization of Petroleum Exporting Countries (OPEC) forecast the world will need less of its crude next year, even as global oil demand growth rebounds to its strongest pace since 2010, amid competing supply sources. Demand for OPEC’s crude will slip by 300,000 barrels a day next year to 29.6 million a day next year, or about 2.6 percent less than the 12-member group is pumping now, the organization said in its first set of forecasts for 2014. The need for OPEC’s crude will diminish even as global oil demand growth recovers to 1 million barrels a day in 2014, from 800,000 a day this year, amid rising output in the U.S. and Canada. For more information please contact HBW Resources.

The death toll from last weekend’s disaster in Lac-Megantic, Quebec has reached 20 confirmed bodies, and police say the roughly 30 people still missing are almost certainly dead. CNN reports on the ongoing investigation: “The head of the railway whose runaway train devastated a small Quebec town cast doubt on his engineer’s story Wednesday as he arrived to face insults from survivors and harsh questions from reporters. Edward Burkhardt said the engineer has been suspended without pay and faces a criminal investigation by Canadian authorities. He said the engineer reported to railroad managers that he set 11 hand brakes on the train cars before they broke away from their engines, but ‘I think it’s questionable whether he did.'” The crash has raised questions about the rapidly growing use of rail to transport oil in North America, especially in the booming North Dakota oil fields and Alberta oil sands. Rail shipments of oil and petroleum products jumped 48 percent in the first half of 2013, but the pace of crude-by-rail growth is slowing, according to an analysis from the U.S. Energy Information Administration (EIA). The EIA used data from the Association of American Railroads to calculate that 1.37 million barrels per day of oil and petroleum products were shipped on railways in the first half of 2013. That’s up from about 927,000 barrels per day in the same period of 2012.

Argentina
The Governor of Neuquén Province, Jorge Sapag has said in a radio interview that Chevron and Argentine state oil company YPF (Yacimientos Petrolíferos Fiscales) will sign the final investment agreement of a deal that will see Chevron invest $1.6 billion into the Vaca Muerta shale play in Neuquén on July 16 in the capital city of Buenos Aires. According to a BNamericas report, “Chevron’s initial investment in the joint venture will provide funds to start development on a 1,000-well cluster which by December 2014 would be producing the equivalent of 30% of the province’s current petroleum output.

Australia
PetroChina has received Chinese and Australian federal government approval to acquire from ConocoPhillips a 29% stake, valued at around $29 million, in a shale gas joint venture in Western Australia’s Southern Canning Basin. PetroChina’s interest in the relatively unexplored Canning Basin follows recent investments in other Australian LNG projects. When ConocoPhillips and the Chinese state-owned oil and gas giant announced the Canning Basin deal in February, PetroChina also farmed into a 20% stake in the Poseidon gas discovery in the offshore Browse Basin.

Brazil
Brazil’s energy regulator has claimed that oil and gas companies will soon be required to test the shale gas potential at onshore exploration blocks which are being offered as part of the country’s 12th licensing round. This bidding round will take place at the end of October and will offer onshore sedimentary basins of Parana, Parecis, Parnaiba, Reconcavo, Acre and Sao Francisco. Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP) expects that these basins will contain large supplies of conventional and unconventional gas. Brazil, which produces more than 80% of its power from hydroelectric dams, is looking to generate more from gas-fired plants to avoid outages during droughts and to produce more gas domestically to cut its dependency on imports of LNG. For more information please contact HBW Resources.

Canada
More than 70 runaway tank cars filled with thousands of barrels of crude derailed and exploded in Lac-Megantic, Quebec, killing at least 13 people and incinerating 30 buildings in the town. About 35 people remain missing. The disaster intensified the debate over the safety of transporting oil by train compared to pipelines, which have their own record of spills. Shipments of oil by rail increased 17 times faster than crude production in the U.S. last year as producers use existing track to ship rising volumes from new shale fields and oil sands to market, according to figures compiled by Bloomberg. The accident has increased the debate related to the benefits of transportation via rail versus transportation via pipelines.

Malaysia’s Petroliam Nasional Bhd has approached India’s state-run Indian Oil Corp. to sell a 10% stake in its Canadian shale-gas assets. The Press Trust of India news agency reported that Indian Oil was in talks to buy the stake from the Malaysian state-run company for at least $1.5 billion. Petroliam Nasional, also known as Petronas, last year bought Canada’s Progress Energy Resources Corp. in a $5.2 billion deal that gave it access to Altares, Lily and Kahta shale-gas assets in northeastern British Columbia. In April, Petronas said it has closed a deal to sell a 10% stake in the shale-gas assets and a proposed LNG export facility to Japan Petroleum Exploration Co. For more information please contact HBW Resources.

China
Market researchers ResearchMoz published “China Natural Gas & Shale Gas Industry Report, 2012-2015.” “China is accelerating the exploration and development of shale gas and other unconventional natural gas.” In China’s energy consumption, coal accounts for over 60%, while natural gas only about 5%, far below the world average, so coal has huge development potentials in China. In recent years, China’s demand for natural gas has witnessed rapid growth, but the output growth has been slow, so that China depends on the import of natural gas heavily. In 2012, China’s potential volume of mineable shale gas hit 25 trillion cubic meters (excluding the shale gas in the Qinghai and Tibet), same with that of China’s land conventional natural gas.

For years Chinese have been told that the blinding, sooty haze choking Beijing and other cities is the price of progress. All rapidly industrializing economies have endured appalling levels of pollution, officials say. They insist that the only alternative is to slam the brakes on China’s economy and consign tens of millions to poverty. Yet China’s appetite for energy is literally killing its people. A study published in the Proceedings of the National Academy of Sciences illustrates how deadly China’s growth path has become. Analyzing data compiled between 1980 and 2000, the authors estimated that pollution caused by burning coal stripped five years from the life expectancy of Chinese in the northern half of the country — a collective loss of 2.5 billion years. A separate study published in December in the Lancet attributed about a million deaths a year in China to air pollution.

Chinese and U.S. officials met to discuss energy issues as part of the two-day U.S.-China Strategic and Economic Dialogue in Washington this week. As the world’s largest energy consumer, China is also scouting for oil and gas supplies abroad to feed its energy appetite. China already has about $5.5 billion invested in U.S. natural gas, and said it also welcomes greater American investment in China’s own energy industry, the U.S. administration official said.

India
India’s rising gas import bill, which apparently induced the government to incentivize production of domestic gas by doubling its price, could be contained to a large extent once the country commences import of shale gas from the US. Public sector gas marketer GAIL (India), readying to commence shale gas imports from 2016-17 estimates that under the initial contracts, the fuel could be priced at $10-11 per mmBtu, considerably cheaper than the likely LNG import price of $14-17 per mmBtu from other sources like Qatar and Australia in the period. GAIL has executed an LNG offtake agreement with Cheniere Energy Partners for importing 3.5 million tons per annum (mtpa) from the US starting 2017-18. GAIL has also booked a 20-year terminal service agreement with Dominion Resources for supplying 2.3 mtpa of shale gas from 2017. Apart from this, the company has acquired a 20% interest in Carrizo’s Eagle Ford Shale acreage which is currently under development. For more information please contact HBW Resources.

An Indian energy think tank has raised a red flag over a government proposal to advance shale gas exploration, saying the country’s severe water shortage would rule out fracking to extract any gas found.
India will also need a long time to identify shale gas-rich basins and to acquire the technology and experience required to extract the gas, said The Energy and Resources Institute in its “Shale Gas in India: Look Before you Leap” policy paper. A group of ministers is currently considering a draft government policy released last year for the exploration and exploitation of shale gas in India, after the success of such projects in the US made it self-sufficient in natural gas and a net exporter. No final decision has yet been reached. The Ministry of Petroleum and Natural Gas has identified six basins as potentially shale gas-bearing: Cambay, Assam-Arakan, Gondwana, Krishna-Godavari, Kaveri and Indo-Gangetic. A US Geological Survey study showed recoverable resources of 6.1 trillion cubic feet have been estimated in three out of 26 sedimentary basins in the country.

Aggressive exports of LNG from the U.S. could help set the stage for stronger trade relationships with Indian and other developing South Asia nations, experts agreed during a discussion at the Center for Strategic and International Studies (CSIS). According to CSIS’ recent report, “U.S. Energy Exports to India: A Game Changer,” India currently imports 75% of its energy and that is expected to rise to 90% by 2023. India is also the world’s 6th largest LNG importer in the world. Currently, there have been three deals signed between Indian and U.S. energy companies. India has 63 trillion cubic feet of estimated shale gas reserves.

Iran 
Iran’s ambition to exploit the world’s biggest natural gas reserves, stymied for years by U.S. sanctions, faces an even sterner test as rising global output and the North American shale boom threaten to erode prices. The Persian Gulf state would need a decade to build planned export capacity of at least 40 million metric tons a year of liquefied natural gas even if unfettered by economic curbs over its nuclear program. The U.S. and European Union already restrict Iran’s largest revenue source, crude exports, and the financial industry that enables payments for them. The constraints have cut Iranian crude sales by half since 2011, the International Energy Agency said, and are stifling projects to export some of Iran’s 1,187 trillion cubic feet of gas reserves, about 18 percent of the global total.

Lithuania
Despite establishing its independence from the Soviet Union over two decades ago, Lithuania is still dependent on Russia’s OAO Gazprom for its gas supply. Gazprom holds a near monopoly in Lithuania, which has no energy resources of its own and shut down its nuclear plants as a condition to admission to the European Union. As a result, the costs of gas import are 15% above the European average. Lithuania’s Prime Minister Algirdas Butkevicius announced that Chevron was ready to cooperate with the residents of the districts where the shale-gas exploration was planned. Lithuanian oil and gas exploration company LL Investicijos, whose 50% stake belongs to Chevron, announced that it was planning to begin soon exploratory drilling by Stempliai village in the district of Silute. For more information please contact HBW Resources.

Mexico
Mexico is heading towards much-needed energy sector reform, and with two of the country’s three major political parties in broad alignment on energy goals, major changes to the sector look more likely than ever, according to attorneys in the energy practice of law firm Mayer Brown. Mexico is major oil producer, and one of the top sources of US imports, according to the Energy Information Administration. The EIA’s most recent study shows Mexico’s estimated shale gas resources at 545 trillion cubic feet, ranking it 6th of 41 non-US countries. The country is a major importer of natural gas, despite its large resources, and consumption has continued to rise steadily. Imported volumes from the US more than doubled from 2007 to 2012, according to EIA data. Mexico cannot rely solely on piped gas from the US to meet its needs. “Mexico has relatively poor gas transportation infrastructure, so not all the gas that can be imported from the US by pipeline can effectively reach all the demand centers in Mexico,” Jose Valera, a partner with Mayer Brown, said. The country also imports LNG. “Mexico is having to buy LNG on the spot market to bring in more gas, but at very high prices – $14, $15, even $17 per million Btu,” Valera said. But political conditions may finally be conducive to moving forward with reforms that have failed in the past, with two of the country’s three major political parties – the National Action Party (PAN) and the Institutional Revolutionary Party (PRI) – backing energy reform.

Poland
The Polish Exploration and Production Industry Organization (OPPPW) issued a statement that criticizes part of the government’s draft hydrocarbon extraction law. The organization claims some of the regulations will increase investment risk. The OPPPW is questioning proposed rules regarding the granting of extraction licenses, which they see as arbitrary, and the National Energy Resources Operator (NOKE). It also expressed its concern about the fact that the exploration period may be extended only once, and only for two years.

Chevron plans to continue its shale gas exploration activities in Poland, but would like the government to be more open to dialogue with investors. The company referred to a draft regulation on hydrocarbon extraction recently prepared by the Polish Ministry of Environment and submitted to the government for approval. Chevron has four concessions in southeastern Poland, although the company has already stopped any exploration work on one of them (Frampol) for now. Another one near the village of Żurawłów is facing protests from the local community. For more information please contact HBW Resources.

FX Energy said test results from tight gas wells in Poland have been disappointing. The company said it has finished testing on three wells at the top of the Rotliegend tight sandstone area, in western Poland’s Permian Basin. The wells, which have been hydraulically fracked, produced only non-commercial levels of gas as well as formation water. Poland’s state-run oil and gas company, PGNiG, has a 51% stake in the Fences concession, where the test wells were drilled. PGNiG also operates the licence, which covers 1,647 square kms. FX Energy holds the remaining 49%. Last month the EIA downgraded its estimates of Poland’s shale gas reserves from 5.3 trillion cm in a 2011 study, to 4.2 trillion cm in this year’s report.

Saudi Arabia
Saudi Arabia has intensified drilling for gas as it seeks to reduce pressure on oil demand from domestic power stations, according to rig count data and industry officials. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. The number of rigs active in the kingdom, the world’s largest oil exporter, climbed to 150 at the start of June, from 134 at the start of the year, according to Barclays. Gulf industry officials said they expected the Saudi rig count to top 200 this year or early in 2014. The jump is partly due to the ramping up of production at the new Manifa oilfield and also reflects increased drilling for gas, which is important to the government’s plans to maintain domestic flexibility so it can meet increased demand for oil from its export customers.

Spain
Repsol SA (REP), Spain’s largest oil producer, delayed starting to explore for shale gas in the north, where a local government has outlawed drilling projects that use water-intensive hydraulic fracturing. The company had targeted July to begin seismic studies at its Luena project that extends over 290 square miles across the Cantabria region, where energy trade groups say Spain’s richest shale gas deposits lie. In April, the Cantabrian government enacted Spain’s first ban on the use of hydraulic fracturing, blaming risks of polluting drinking water. The rule blocks companies seeking to blast water into shale deposits within the region’s boundaries, though it’s less clear how projects extending to other regions are affected. Luena stretches from Cantabria to Castille & Leon, a situation that normally would be regulated by the nation’s Industry Ministry, exploration companies say. Spain has enough prospective natural-gas resources to satisfy more than 70 years of domestic demand, according to the Spanish fossil fuels trade group Aciep. For more information please contact HBW Resources.

Turkey
The Turkish government has ruled out domestic shale-gas exploration before 2020 because of a lack of data and investment. Turkey’s energy minister, Taner Yildiz said. The minister has previously said the Ankara, Konya, Thrace and Nevsehir regions could all be explored for shale gas. Yıldız noted that data from the International Energy Agency (IEA) also suggest that shale gas in the country cannot be used before 2020 as it would take between three to 15 years to study the feasibility of such a project while attracting international investments. Turkey’s state-run oil and gas company, TPAO, struck a deal with Shell in 2011 to explore for shale gas in the southeastern region of Diyarbakir.

Ukraine 
Royal Dutch Shell is interested in developing both traditional and shale gas deposits in Ukraine, the company’s executive said at a meeting with the country’s prime minister. Shell and Ukraine could cooperate in developing both traditional and shale gas reserves, Shell’s upstream international director, Andrew Brown, is cited as saying by the government’s website Thursday. Ukrainian Prime Minister Mykola Azarov invited Shell to develop “not only shale gas, but also gas from traditional reserves”. Ukraine, which holds Europe’s third-largest shale gas reserves, sees the development of its energy resources as vital for reducing its dependence on Russian gas imports.

United Kingdom
Cuadrilla has announced that it intends to apply for planning consent to hydraulically fracture and test the shale at its existing exploration well at Grange Hill. It has also announced that it intends over time to apply for consent to drill, hydraulically fracture and test the gas flow at up to six new temporary exploration well sites in the Fylde. A decision on drilling and testing at the existing Anna’s Road site will be deferred until later in the exploration program. For more information please contact HBW Resources.

Managing Director of Egdon Resources, an oil and gas exploration and production company focused on onshore UK and Europe, Mark Abbott, commented on the recent publication of a number of government initiatives and reports in relation to shale gas and the wider onshore UK oil and gas industry. Abbott stated in a press release, that Egdon “was encouraged by the government’s commitment to publish in July 2013 a package of measures designed to ‘kick-start’ the shale gas industry in the UK.  The publication by the Department for Communities and Local Government of planning guidance for onshore oil and gas (including shale gas) should provide a clear framework for how such developments should proceed through the planning system.  We also look forward to the outcome of the consultation on a “pad allowance” in relation to taxation for shale gas which should provide clarity on the fiscal regime and we welcome the commitment of the Environment Agency to streamline and simplify environmental regulation of onshore oil and gas activities.”

Britain’s energy secretary Ed Davey has advocated a public awareness campaign to promote shale gas and dispel the “myths” surrounding fracking, the controversial method for unlocking the natural gas. The British Geological Survey estimated that Britain holds larger amounts of shale gas than previously estimated.

Uruguay
Petrel Energy’s two hole 2000 meter core drilling program, to test the oil/gas potential of its extensive 3.5 million acre basin play in Uruguay is expected to commence in August. It will target organic rich shales in the Norte Basin to test parameters critical for source and reservoir rock evaluation, of similar age shale plays to extensive basins such as the Bakken of North America. Requisite government and landholder approvals have been submitted by Schuepbach Energy International (SEI). SEI is a private US company, which holds a 100% working interest in Piedra Sola and Salto concessions in the Norte Basin Uruguay. The two concessions cover 14,000 sq km (3.5 million acres). Petrel Energy currently holds a 25% interest in SEI and has an option to increase its shareholding to 51% later in 2013 for US$5.5 million. The first two core holes will allow SEI to determine the distribution of organic-rich shales and other potential reservoirs and will be followed by seismic acquisition to guide follow-up exploration drilling and resource distribution.

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

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Michael Zehr
HBW Resources
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