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
 

HBW Resources: Greenfield Offshore Energy Report

HBW Resources: Greenfield Offshore Energy Report

Web Link

Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the development of offshore oil and gas resources.  With numerous legislative bodies now in session, HBW Resources is monitoring these activities to ensure that responsible policies based on sound science are advanced.

Draft Revised Stock Assessment Reports Released For Comment

The U.S. Interior Department’s Fish and Wildlife Service (USFWS) last Thursday announced the availability for public comment of draft revised stock assessment reports for the following 4 stocks of marine mammals: (1) Pacific walrus; (2) Southwest Alaska northern sea otter; (3) Southcentral Alaska northern sea otter; and (4) Southeast Alaska northern sea otter.  Upon review in 2011, USFWS determined that a revision of the stock assessment reports for these four marine mammals was warranted.

To help maintain marine mammal stocks at optimal sustainable population levels, the Marine Mammal Protection Act requires that USFWS and the National Marine Fisheries Service prepare stock assessment reports (SARs) for each stock of marine mammals occurring in waters under the jurisdiction of the United States, and requires that they be revised if the status of the stock changes or can be more accurately determined.

Information in the SARs is used to identify and evaluate the status of marine mammal populations and the effects of human activities on them, authorize the taking of marine mammals incidental to human activities, develop and implement conservation measures, and evaluate fishery progress in reducing incidental mortality and serious injury to insignificant levels.

Comments on the draft revised marine mammal stock assessment report are due by Wednesday, July 17, 2013.

Rigs To Reefs/Idle Iron Update On Agenda For Sport Fishing & Boating Partnership Council

The U.S. Interior Department’s Fish and Wildlife Service announced last Friday that the Sport Fishing and Boating Partnership Council will hold an open meeting in Washington, D.C. on May 20-21, 2013.

The Sport Fishing and Boating Partnership Council was created in part to “foster partnerships to enhance public awareness of the importance of aquatic resources and the social and economic benefits of recreational fishing and boating” in the U.S., and advises the Interior Secretary on nationally significant recreational fishing, boating, and aquatic resource conservation issues.

Agenda items for the Council meeting include an update on the Rigs to Reefs Program and DOI implementation of its “Idle Iron” policy for oil and gas production infrastructure decommissioning.

In addition, the Council will consider a draft vision for USFWS fish and aquatic resource conservation, receive updates on America’s Great Outdoors Initiative implementation, implementation of Council recommendations to improve Recreational Boating and Fishing Foundation activities and operations, and USFWS implementation of the Wildlife and Sport Fish Restoration Program, and discuss issues related to the Boating Infrastructure Grant Program, Clean Vessel Act Grant Program, and the Sport Fish Restoration Boating Access Program.

To attend the meeting, submit written information or questions to the Council before the meeting, or give an oral presentation during the meeting, the following individual must be contacted no later than Monday, May 13, 2013: Douglas Hobbs, Council Coordinator, 4401 North Fairfax Drive, Mailstop 3103–AEA, Arlington, VA 22203; telephone (703) 358–2336; fax (703) 358–2548; or emaildoug_hobbs@fws.gov.

Additional instructions for registration, submitting written comments, and requesting time for a 2-minute oral presentation are available in the announcement.

Marine Technology and Standards Public Workshop To Be Held In May

The U.S. Coast Guard last Friday announced that the American Society of Mechanical Engineers, in coordination with the Coast Guard, will sponsor a 2-day public workshop on marine technology and standards in Arlington, VA on July 24-25, 2013.

Proposed topics for panel sessions include but are not limited to the following:

·                     Mooring system integrity
·                     Management perspective and safety of drilling and production
·                     ASME codes/standards applied to LNG tank pressure development
·                     Risk-based corrosion management for offshore structures
·                     Risk-based maintenance and inspection on vessel machinery and systems
·                     Development of autonomous underwater platforms for marine applications
·                     Ergonomic notations for ships and offshore structures

According to the announcement, the workshop “provides a unique opportunity for classification
societies, industry groups, standards development organizations, government agencies, and interested members of the public to come together for a professional exchange of information on topics ranging from technological impacts on the marine industry, corresponding coverage in related codes and standards, and government regulations.”

By taking part in the workshop, attendees will have an opportunity “to provide expertise on technical matters affecting the marine industry, to leverage new technologies, and to improve future policymaking, standards development, and rulemaking.”

Advance workshop registration closes on Monday, July 1, 2013.  Additional workshop information is available here and here.

NOAA’s Hydrographic Services Review Panel To Hold 2-Day Public Meeting

NOAA on Tuesday announced that the Hydrographic Services Review Panel (Panel) will hold a public meeting via webinar and teleconference on May 7-8, 2013 that will include two 15-minute public comment sessions.

According to the announcement and latest agenda, discussion items will include FY2013 appropriations, the FY 2014 budget, Sandy supplemental funding, legislative updates, the Committee on Marine Transportation System, integrated ocean and coastal mapping, the 3D Elevation Program, David Saghy, Atlantic Coast Port Access Route Studies and wind energy, the NOAA Fleet Recapitalization Plan, and activities related to hydrography, geodesy, coastal mapping, and tides, currents, and water levels.

This Panel is a Federal advisory committee that advises the NOAA Administrator on oceanographic and marine technologies relating to operations, research and development, and data dissemination pertaining to hydrographic surveying, shoreline surveying, nautical charting, water level, current, geodetic, geospatial, and geomagnetic measurements, and other oceanographic/marine-related sciences.

Individuals seeking to participate in the meeting must register by Friday, April 26 by contacting
Kathy Watson by email at Kathy.Watson@noaa.gov or by phone at (301) 713–2770 ext. 158.

Comments Sought On New Cook Inlet Beluga Whale Economic Survey

The U.S. Department of Commerce last Friday sought comment on National Marine Fisheries Service (NMFS) plans to submit a request to the Office of Management and Budget to conduct a new Cook Inlet beluga whale economic survey.

The announcement notes that “[n]o empirical estimates of…[non-consumptive use] values for Cook Inlet beluga whales are currently available, but this information is needed for decision makers to more fully understand the trade-offs involved in evaluating population recovery planning alternatives and to complement other information available about the costs, benefits, and impacts of alternative plans.”

NMFS plans to conduct 4,200 voluntary, one-time Alaska household surveys each requiring an estimated 25 minutes to complete.  This information would be used to estimate non-consumptive economic benefits “associated with changes in extinction risk resulting from protection actions for the Cook Inlet beluga whale.”

The announcement further states that the addition of empirical data about non-consumptive
benefits “remains the most significant gap to enabling a complete and balanced economic analysis,” adding that t survey “ should be useful to NMFS and the public in the future as NMFS
considers various actions under the recovery planning process for Cook Inlet beluga whales.”

The Commerce Department goes on to note that “[a]ny future regulatory  actions would include analyses of costs and benefits of the proposed measures as well as opportunities for public input.”

Comments and recommendations on the proposed survey are due by May 19, 2013.

Draft National Shoreline Data Content Standard Released For Comment

The Interior Department’s U.S. Geological Survey last Thursday released notice of a public
review of the Federal Geographic Data Committee’s draft National Shoreline Data Content 
Standard, whose geographic scope would encompass all shorelines of navigable waters within
the United States and its territories.

According to the announcement, the draft standard defines attributes or elements that are
common for shoreline data development and provides suggested domains for the elements,
with its functional scope including definition of data models, schemas, entities, relationships,
definitions, and crosswalks to related standards.

The draft standard is intended to enhance the shoreline framework by providing technical
guidance on shoreline semantics, data structures and their relationships to builders and users of
shoreline data.

USGS says that the primary intended users of the standard are the mapping, shoreline
engineering, coastal zone management, flood insurance, and natural resource management
communities, adding that the standard is intended to support the shoreline community in
developing shoreline data to support data transformation, data fusion, and data sharing.

The announcement notes that the location of the national shoreline is fundamental for legal
boundaries, developing nautical charts, and engaging in marine planning and other academic
research and commercial activities.

Comments on the draft standard are due by Wednesday, July 31, 2013.

EPA Proposes National Contingency Plan Information Collection Renewal

EPA on Monday announced its plans to ask the Office of Management and Budget to review and approve a request to renew a National Oil and Hazardous Substances Pollution Contingency Plan information collection pertaining to use of dispersants and other chemicals in response to oil spills in U.S. waters and adjoining shorelines.  Before submitting the extension request, EPA is seeking comment on specific aspects of the proposal.  The existing information collection is set to expire on October 31, 2013.

In for an oil spill mitigating agent to be applied as part of an emergency response to an oil spill, the product must be listed on the NCP Product Schedule.  The Product Schedule is available to federal On-scene Coordinators, Regional Response Teams, and Area Committees for  determining the most appropriate  products to use in various spill  scenarios.

To be listed on the schedule, certain mandatory product testing and information must be considered.  For example, the manufacturer must conduct  specific toxicity and effectiveness tests and submit the corresponding technical  product data along with other detailed information.  If all the required data are submitted and the  product satisfies all requirements and meets or exceeds testing thresholds, then the product is listed.

The Product Schedule currently includes 112 products, and EPA expects that it will annually receive 11 listing requests over the next 3 years for a total estimated annual burden of 315 hours and $72,450.

EPA seeks comments on whether the collection is necessary or useful, the accuracy of the burden of the proposed information collection, enhancing the quality, usefulness, and clarity of the information to be collected, and minimizing the burden on respondents.

Comments on the proposed information collection are due by Friday, June 14, 2013.

Permit Sought For Research On Sound/Oil Spill Impacts

NOAA’s National Marine Fisheries Service last Friday sought comment on a permit request by the Scripps Institution of Oceanography to conduct research over 5 years on 35 cetacean species/stocks.

The applicant would use vessel surveys to conduct studies off the U.S. west coast, in Alaska waters, in the Gulf of Mexico, and near Hawaii.  According to NMFS, study sites would be located where opportunistic anthropogenic acoustic sources and/or oil spill effects may be present to provide an opportunity to investigate possible impacts from sound and/or oil spill exposure.

Comments on the application are due by Monday, May 20, 2013.

Offshore Supply Vessel Information Collection Requirement Released For Comment

The Coast Guard on Monday announced that it is seeking comments on its request to renew an information collection regarding offshore supply vessel posting/marking requirements.  An extension of OMB Control Number 1625-0065, under which the estimated annual burden would remain 2,068 hours per year, would continue the requirement that owners and operators of offshore supply vessels provide instructions to those on board of actions to be taken in the event of an emergency.  The proposed extension of the reporting/recordkeeping requirements is intended to verify compliance with regulations without presence to witness routine matters, including offshore supply vessels based overseas.

Comments are sought on whether the collection is necessary or useful, the accuracy of the burden of the proposed information collection, enhancing the quality, usefulness, and clarity of the information to be collected, and minimizing the burden on respondents.

Comments on the proposed information collection are due by Wednesday, May 15, 2013.

Additional Information:

For additional information, contact Brent Greenfield with HBW Resources. His contact information is below.

Brent Greenfield
HBW Resources
2211 Norfolk Street, #410
Houston, TX 77098
Tel: 713-337-8810
E-mail: bgreenfield@hbwresources.com
Web: http://www.hbwresources.com

HBW Resources: Greenfield Offshore Report

Image

HBW Resources: Greenfield Offshore Report

Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the development of offshore oil and gas resources.  With numerous legislative bodies now in session, HBW Resources is monitoring these activities to ensure that responsible policies based on sound science are advanced. 

 

Murkowski and Landrieu Introduce Energy Revenue-Sharing Legislation

 

U.S. Senators Lisa Murkowski (R-AK) and Mary Landrieu (D-LA) announced their introduction of legislation that would provide 27.5% of revenue from offshore traditional and renewable energy development to coastal states, and an additional 10% if the state creates a clean energy or conservation fund.

 

In addition, the “Fixing America’s Inequities with Revenues Act,” also co-sponsored by U.S. Senators Mark Begich (D-AK) and Heidi Heitkamp (D-ND), would do the following

  • Accelerate from 2017 to 2013 the date by which Gulf Coast producing states will begin to receive their 37.5% share of revenues from Western and Central Gulf of Mexico Planning Area leases offered since 2007;
  • Gradually lift the statutory $500 million annual cap on revenues kept by Gulf Coast states, which is set to begin in 2015; and
  • Allows state to keep 50% of revenues generated from renewable energy production on federal lands within their borders.

 

In announcing the legislation, Sen. Murkowski called revenue sharing “critical for the coastal communities that will shoulder the increased demands on their roads, docks and other infrastructure from offshore development.

 

Sen. Landrieu added that the legislation is “about justice for the coast and jobs for America,” adding that federal policy has allowed onshore energy-producing states to receive 50% of revenues while offshore energy-producing states have received “virtually nothing.”

 

The proposed legislation has been referred to the Senate Energy & Natural Resources Committee.

 

Interior Department Holds Central Gulf of Mexico Lease Sale

 

The U.S. Interior Department announced the conclusion of Central Gulf of Mexico Lease Sale 227 in New Orleans, LA, which garnered over $1.2 billion in high bids from 52 companies for 320 tracts covering roughly 1.7 million acres of federal waters offshore Alabama, Louisiana, and Mississippi.

 

Following the lease sale, Interior Secretary Ken Salazar said in part that “[d]eveloping public energy resources in the Gulf of Mexico is good for the Gulf’s economy, and reflects President Obama’s commitment to expand oil and natural gas production safely and responsibly…”

 

BOEM Director and Acting Assistant Secretary for Land and Minerals Management Tommy Beaudreau called the Central Gulf of Mexico “one of the cornerstones of the United States’ domestic energy portfolio” and “central to meeting the Nation’s energy needs and fueling the economy.”

 

Jewell Nomination Clears Senate Committee, Heads To Full Senate For Consideration

 

The U.S. Senate Energy & Natural Resources Committee  voted 19-3 to favorably report Sally Jewell’s nomination to be U.S. Interior Secretary. 

 

During roughly 30 minutes of comments by Committee members before the vote took place, Sen. Mary Landrieu (D-LA) mentioned that she and Sen. Lisa Murkowski (R-AK) recently introduced revenue-sharing legislation.  Committee Chairman Ron Wyden (D-OR) committed that he would work closely with Sen.’s Landrieu and Murkowski on revenue-sharing.

 

Regarding Jewell’s nomination advancing to the full Senate for consideration, Chairman Wyden said that he has “full confidence in…Jewell’s ability to take on this important assignment,” and that she will “give each member of this committee her ear and her expertise that comes from having managed to pack of host of professional careers…into just one lifetime.”  

 

USFWS Proposes Critical Habitat Designation For 739 Miles Of GOM/Atlantic Coastline

 

The U.S. Fish and Wildlife Service (USFWS)  announced that it is seeking comments on its proposal to designate 739 miles of U.S. coastal beach shoreline in Alabama (26 miles), Florida (451 miles), Georgia (69 miles), Mississippi (18 miles), North Carolina (96 miles), and South Carolina (79 miles) as critical habitat for the Northwest Atlantic Ocean Distinct Population Segment (DPS) of the loggerhead sea turtle.  USFWS states that the proposed critical habitat area covers 84% of the documented number of nests within these 6 states.

 

In September 2011, USFWS and the National Marine Fisheries Service revised the loggerhead sea turtle’s listing from a single worldwide threatened species to nine DPS’s (7 endangered and 2 threatened), and listed the Northwest Atlantic Ocean DPS as endangered.

 

USFWS notes that oil and natural gas activities occur offshore Alabama, Mississippi, and Florida, stating that “potential direct and indirect [e]ffects to proposed critical habitat could result from associated oil and gas activities” such as pipeline installation and maintenance, coastal based facilities, boat vessel traffic, and spills.

 

USFWS says primary threats that may impact the proposed critical habitat and require special management or protection include, among other things, coastal development, human-caused disasters and response to human-caused and natural disasters (citing oil spills/spill response and post-natural disaster debris cleanup), in-water and shoreline alterations (including inlet/nearshore dredging and dredging/deepening channels), artificial lighting, climate change, and beach sand placement activities.  Elsewhere, USFWS says that bridge and highway construction on lands adjacent to the proposed critical habitat areas may be affected.

 

While USFWS notes that it does not expect the proposed designation to “significantly affect” energy supplies, distribution, or use, it also notes that the agency “will further evaluate this issue as we conduct our economic analysis, and review and revise this assessment as warranted.”

 

In response to the proposed designation, the Center for Biological Diversity (CBD)–which previously petitioned the government for an endangered listing and subsequently engaged in litigation on the matter–responded by stating that under the proposal, “[a]ny new beachside hotels, homes or commercial construction built on protected beaches that require federal permits would need to be reviewed.”

 

Referencing the National Marine Fisheries Service’s current review of specific areas in the marine environment as potential critical habitat for this DPS, CBD adds that “[a]ny wave-energy, offshore-drilling, or aquaculture projects in or likely to affect the designated ocean critical habitat would also require analysis and assessment to ensure that these activities would not compromise their [turtles’] ability to find food, breed, and migrate safely in their ocean home.”

 

USFWS seeks comments on, among other things, the prudence of the proposed designation, which areas should be included in the designation, special management considerations or protection that may be needed, land use designations and current or planned activities in the subject areas and their potential impacts, and the economic, national security, or other relevant impacts of the proposed designation.

 

USFWS notes that it may exclude additional areas from the final rule based on information received during the public comment period, and seeks comments from “independent specialists” to ensure that the proposed designation is grounded in scientifically sound data and analyses.   Additional public review and comment will be sought when USFWS makes available an economic analysis of the proposed designation (analysis is currently being prepared).

 

Comments on the proposed designation are due by Friday, May 24, 2013, and requests for public hearings on the proposal are due by Thursday, May 9, 2013.

 

NOAA Seeks Comments On Supplemental EIS For Arctic Oil and Gas Activities

 

NOAA’s National Marine Fisheries Service  announced that it is seeking comments on a supplemental draft environmental impact statement (SEIS) for oil and gas exploratory drilling and geological & geophysical activities in Alaska’s Chukchi and Beaufort Seas.

 

Whereas the initial EIS analyzed the effects of up to two drilling programs per year in the Chukchi Sea and up to two drilling programs per year in the Beaufort Sea, the draft SEIS analyzes the effects of up to four drilling programs per year in each area.  The draft SEIS also includes an expanded discussion of the mitigation measures intended to address impacts on marine mammals and marine subsistence users.

 

According to Deputy Assistant NOAA Administrator Sam Rauch, “NOAA scientists are working hard to learn as much as we can about how oil and gas activities impact marine mammals” and the agency “will continue to work with our partners to develop and put into place strong mitigation measures that will help lessen the impacts of these and other activities in our oceans.”

 

The announcement notes that the draft SEIS considers various mitigation measures including area closures during whale migration/feeding seasons and traditional whale and seal hunts, in order to “minimize potential harmful effects from sound, accidental discharge of pollutants including oil, and the presence of vessels that will be part of these oil and gas operations.” 

 

Responding to the draft SEIS announcement, U.S. Sen. Lisa Murkowski (R-AK) said that she “continue[s] to believe it’s unnecessary for the agency to conduct this review,” adding that NOAA “is clearly acting beyond its jurisdiction by analyzing impacts on polar bears and walruses, which are clearly the responsibility of the U.S. Fish and Wildlife Service.” 

 

Sen. Murkowski stated that she “remain[s] concerned about the scope of the EIS and the potential for area closures and additional mitigation and technological requirements to result in a de facto moratorium on the development of oil and gas in the Arctic.”

 

U.S. Sen. Mark Begich (D-AK) called the draft SEIS “real progress,” citing the expanded exploration activity that the review examines, and said that “[w]e need to make sure to balance responsible offshore oil and gas development with protection for the subsistence resources that have sustained North Slope residents for centuries.” 

 

However, he added that “it’s a big document, and we still have a lot of work ahead of us to ensure all agencies and stakeholders are working together.”  Sen. Begich also voiced his concerns about how NOAA is “working with Interior Department agencies to coordinate timing and spatial restrictions on development.”  He said that he will “be watching to make sure this isn’t a bait and switch,” noting that the amount of oil and subsistence resource values at stake “demand our best efforts.”

 

A final EIS is expected in 2014, and NOAA will begin to accept comments on Friday, March 29, 2013.  Comments are due by Tuesday, May 28, 2013.

 

National Offshore Safety Advisory Committee To Hold Public Meeting

 

The Coast Guard announced that the National Offshore Safety Advisory Committee (NOSAC) will hold public meetings in New Orleans, LA on April 17-18 to discuss various issues related to safety of operations and other matters affecting the oil and gas industry.

 

NOSAC’s Subcommittee on Recommended Standards for Accommodation Service Vessels will meet for two hours on April 17 to discuss its ongoing work.

 

NOSAC itself will meet on April 18 to review and discuss progress reports and recommendations received from the Subcommittee meeting, using that information and public comments to formulate recommendations to the U.S. Department of Homeland Security.

 

In addition, the agenda includes other items including the following:

 

  • Introduction of new Task Statements on, among other things, life-saving and fire-fighting voluntary standards on the Outer Continental Shelf and electrical equipment in hazardous areas on foreign flag mobile offshore drilling units;
  • Update on recent Coast Guard regulations affecting the offshore industry;
  • Coast Guard Outer Continental Shelf (OCS) National Center of Expertise update on Coast Guard OCS training initiatives;
  • Update on International Maritime Organization activities of interest to OCS community;
  • Towing of mobile offshore drilling units;
  • Overview and history of manning mobile offshore drilling units; and
  • Public comment period

 

Comments on the issues to be considered by NOSAC must be submitted in writing by Tuesday, April 2.

 

NOSAC provides advice and recommendations to the Homeland Security Department on matters and actions concerning activities directly involved with or on support of the exploration of offshore mineral and energy resources as they relate to matters within Coast Guard jurisdiction.

 

Nominations Sought For Upcoming National Offshore Safety Advisory Committee Vacancies

 

The U.S. Coast Guard  announced that it is seeking applications to fill the following six positions that will become vacant on the National Offshore Safety Advisory Committee (NOSAC) on January 31, 2014:

 

  • Representative of companies, organizations, enterprises, or similar entities engaged in petroleum production;
  • Representative of companies, organizations, enterprises, or similar entities engaged in offshore drilling;
  • Representative of companies, organizations, enterprises, or similar entities engaged in offshore operations support (by offshore supply or other vessels);
  • Representative of companies, organizations, enterprises, or similar entities providing safety and training services to the offshore industry;
  • Representative of companies, organizations, enterprises, or similar entities providing environmental protection, compliance or response services to the offshore industry; and
  • Representative of companies, organizations, enterprises, or similar entities engaged in offshore oil exploration and production on Alaska’s Outer Continental Shelf

 

NOSAC members serve a term of up to 3 years (maximum of 3 consecutive terms) and serve at their own expense.  

 

NOSAC provides advice and recommendations to the Homeland Security Department on matters and actions concerning activities directly involved with or on support of the exploration of offshore mineral and energy resources as they relate to matters within Coast Guard jurisdiction.

 

Applications are due by Tuesday, May 28, 2013.

 

NPDES Permit Reissuance Proposed For O&G Exploration Facilities In Cook Inlet OCS

 

Last Friday, EPA announced its proposal to reissue the National Pollutant Discharge Elimination System (NDPES) permit for oil and gas exploration facilities in federal waters located in Alaska’s Cook Inlet.  The proposed permit would authorize certain discharges of pollutants into Cook Inlet federal waters from oil and gas exploration facilities subject to limits and requirements designed to minimize pollution and protect water quality. 

 

EPA also announced that it will hold 3 public hearings on the proposal in Kenai, AK (April 29), Homer, AK (April 30), and Anchorage, AK (May 2).

 

The existing NPDES permit, which covers oil and gas exploration, development, and production facilities in both state and federal waters in the Cook Inlet, expired on July 2, 2012. 

 

Under the terms of a Memorandum of Agreement, the Alaska Department of Environmental Conservation is taking over the reissuance of permits addressing discharges to Cook Inlet state waters.  Under the new proposal, EPA would reissue exploration permits in federal waters in Cook Inlet.

 

Proposed changes from the 2007 NPDES permit include the following:

 

  • Authorizes discharges from exploration activities, including geotechnical activities, in federal waters;
  • Includes previously deferred areas under BOEM lease sales;
  • Requires submission of a Drilling Fluids Plan with the Notice of Intent;
  • Requires reporting of Chemical Additives Inventory;
  • Require Notice of Intent submission 45 days prior to discharge rather than 30 days;
  • Deletes requirement to submit Notice of Termination within 30 days of cessation of discharging, allowing time to submit End-of-Well Report, due 90 days after drilling ends;
  • Updates analytical method for diesel oil analysis;
  • Adds static sheen testing requirements for discharges of bilge water;
  • Adds requirements to comply with CWA § 316(b) Cooling Water Intake Structures;
  • Requires submission of the Best Management Practices Plan with Notice of Intent; and
  • Allows opportunity for permittees to submit Discharge Monitoring Reports in netDMR

 

Comments on the proposed permit reissuance are due by Tuesday, May 21, 2013.

 

Navigation Safety Advisory Council To Hold Public Meeting

 

The U.S. Coast Guard announced that the Navigation Safety Advisory Council (NAVSAC) will hold a public meeting on April 10-11, 2013 in Arlington, VA to discuss matters related to maritime collisions, rammings, and groundings, inland and international rules of the road, navigation regulations and equipment, routing measures, marine information, diving safety, and aids to navigation systems.

 

Specifically, among other things, NAVSAC will review, discuss, and formulate recommendations regarding unmanned underwater vehicles, rules/standards of operation for unmanned surface vessels, lights on law enforcement vessels engaged in law enforcement activities, and special distinctive lights for small passenger vessels. 

 

In addition, NAVSAC will receive an update on the Atlantic Coast Port Access Route Study that has been undertaken to accommodate offshore wind energy development, receive a briefing on Coast Guard formal risk assessments currently being conducted for several U.S. ports/waterways, and receive an update on how the use of the Automatic Information System and the Physical Oceanographic Real Time System support the E-Navigation Strategy that is being developed to establish a framework for data exchange between and among ships and shore facilities.

 

A public comment period will take place on Wednesday, April 10 from 3:00-4:00 p.m. and on Thursday, April 11 from 11:00 a.m. until the close of the meeting.  Speakers are asked to limit presentations and comments to 10 minutes, and must pre-register and submit written comments by Monday, April 1, 2013.  In addition, public comments or questions may be taken during the discussion and recommendations and new business portions of the meeting.

 

Comments on the issues to be considered by NAVSAC at its upcoming meeting are also due by Monday, April 1, 2013.

 

BSEE Issues Two Notices To Gulf of Mexico OCS Lessees and Operators

 

The U.S. Bureau of Safety and Environmental Enforcement (BSEE) issued two Notices to Lessees and Operators (NTLs) of federal oil and gas leases in the Gulf of Mexico Outer Continental Shelf. 

 

NTL 2013-G01, which supersedes NTL 2009-G16, pertains to Global Positioning Systems (GPS) for Jack-Up and Moored Semi-submersible rigs.  The NTL notes that BSEE has a “major concern” about mobile offshore drilling units moving off location during a storm, and says that GPS real-time data “provides a valuable tool to prevent future incidents.”

 

The NTL requires that each Jack-Up and Moored Semi-submersible rig be quipped with a GPS system, with multiple GPS transponders placed in different locations and each transponder capable of relaying data for at least 7 days following passage of a storm.   

 

BSEE must also be informed of how the agency is being provided with real-time access to the GPS data, and the agency must be notified in the event of any revision or update as to how BSEE is to receive such data.  In the event that a Jack-Up or Semi-submersible rig moves off location, BSEE must be contacted immediately and provided with certain information.

 

NTL 2013-G02, which supersedes NTL 2010-G03, pertains to wells (holes-in-the-ground) without assigned BSEE API numbers that were drilled prior to 2000.  According to BSEE, there are roughly 500 unidentified completed and/or abandoned wellbores.  The NTL states that collecting data that identifies the location of all boreholes in the Gulf of Mexico will “help BSEE promote safety, protect the environment, and conserve resources.”

 

Under this NTL, following an extensive BSEE review of internal records, operators of wells where BSEE records indicate additional wellbores may exist will be contacted for assistance in resolving the data gap.  When BSEE requests for information are made, operators are asked to review company databases and records to confirm the information that BSEE has and to provide the requested information (where available).

 

Transportation Worker ID Credential Requirements Proposed, Public Meeting Announced

 

The U.S. Coast Guard issued a Notice of Proposed Rulemaking (NPRM) proposing to require owners and operators of certain vessels and facilities to use electronic readers designed to work with the Transportation Worker Identification Credential (TWIC).  The NPRM also proposes other electronic TWIC reader requirements related to recordkeeping and security plan amendments. 

 

The Coast Guard on Wednesday announced that it will hold a public meeting in Arlington, VA on Thursday, April 18 to receive public comments on the proposal.

 

 According to the Coast Guard, the proposed rule would build upon existing regulations intended to ensure that unescorted access to secure areas on certain vessels and facilities is limited to only those individuals who have a TWIC card.

 

Under the proposed rule, electronic TWIC reader requirements would not apply to entities including mobile offshore drilling units, offshore supply vessels, tank vessels carrying high flash point petroleum (i.e. crude oil), or fixed or floating facilities operating on the Outer Continental Shelf that are engaged in the exploration, development, or production of oil, natural gas, or mineral resources. 

 

However, owners or operators of such vessels and facilities would have to continue to ensure that all individuals seeking unescorted access to secure areas first present their TWICs for inspection.

 

Such inspections include a visual match of the TWIC photograph to the presenter of the TWIC, a visual check of the TWIC card for signs of tampering/forgery, and visual confirmation that the TWIC card is not expired.

 

While the Coast Guard notes its decision to propose TWIC reader requirements only for the highest-risk entities, it adds that the decision “should not be read to foreclose revised TWIC reader requirements in the future.”  The Coast Guard states that it “will continue to gather and analyze data to determine how the use of TWIC readers might be appropriate for each risk group.”  

 

Comments on the proposed rule are due by Tuesday, May 21, 2013.

 

NOAA Issues Draft Damage Assessment/Restoration Plan For GOM Spill

 

NOAA announced the availability for public comment a Draft Damage Assessment and Restoration Plan and Environmental Assessment proposing alternatives for restoring natural resource injuries resulting from the November 11, 2005 collision between an integrated tug-barge unit and submerged remains of a collapsed pipeline service platform roughly 50 miles southeast of Sabine Pass, TX in the Gulf of Mexico.

 

According to NOAA, an estimated 45,846 barrels of oil were discharged in federal waters in the Gulf of Mexico, most of which sank to the ocean floor.  An estimated 43,491 barrels of oil are said to have remained unrecovered at the time that oil spill cleanup operations were discontinued in January 2006.  NOAA’s injury assessment determined that the primary injury resulting from the incident was to offshore benthic habitat.

 

NOAA’s preferred restoration alternative involves an estuarine shoreline protection and salt marsh restoration project at the Texas Chenier Plan National Wildlife Refuge Complex in Galveston, TX.  Based on the U.S. Coast Guard determination that the responsible party exceeded its liability under the Oil Pollution Act, the restoration plan will be submitted to the Oil Spill Liability Trust Fund for implementation funding.

 

Comments on the Draft Damage Assessment and Restoration Plan and Environmental Assessment are due by Monday, April 15, 2013.

 

U.S. Extractive Industries Transparency Initiative Advisory Committee To Hold Public Meetings

 

The U.S. Interior Department (DOI) on Wednesday announced that the U.S. Extractive Industries Transparency Initiative Multi-Stakeholder Group Advisory Committee will hold a public teleconference on Thursday, April 11, 2013 and a public meeting in Washington, DC on May 1-2, 2013.  Instructions for remotely accessing both meetings are available here.

 

According to the announcement, agenda items for the April teleconference include the following:

 

  • Final review and approval of Terms of Reference;
  • Nomination and approval of co-chairs;
  • Approval of the Feb. 2013 meeting minutes;
  • Progress report from the Subcommittee; and
  • Public comments

 

Individuals planning to deliver public comments at the April teleconference must submit written statements by Friday, April 5.

 

Agenda items for the May meeting include an overview and discussion of components needed for the draft USEITI candidacy application and other committee business as needed. 

 

Individuals planning to deliver public comments at the May meeting must submit written statements by Thursday, April 25.

 

DOI has described the Extractive Industries Transparency Initiative (EITI) as a “voluntary, global effort designed to increase transparency, strengthen the accountability of natural resource revenues, and build public trust for the governance of these vital activities.” 

                 

Participating EITI nations are required to disclose certain oil, gas, and mining development revenues to an independent reconciler, while companies are required to make disclosures of payments to the government that are then made public.

 

Each nation’s obligations are jointly developed by consensus through a Multi-Stakeholder Group made up of members of the public, government, and the private sector, and the U.S. EITI Advisory Committee will be the initial Multi-Stakeholder Group for U.S. implementation.

 

National Climate Assessment and Development Advisory Committee Renews Charter

 

NOAA’s Office of Oceanic and Atmospheric Research announced the 6-month renewal of the charter for the National Climate Assessment and Development Advisory Committee (NCADAC) through July 10, 2013.  The announcement refers to the renewal as “critical to the success of the national climate assessment.”

 

Formed in December 2010, NCADAC’s mission is to gather and summarize the science and information regarding existing and future impacts of climate change on the U.S., and its specific objective is to produce a National Climate Assessment scheduled to be completed in 2013.

 

The National Climate Assessment (NCA) will include chapters addressing Climate Change Science, Energy Supply and Use, Water/Energy/Land Use, Alaska and Arctic, and Oceans and Marine Resources.  The NCA is intended in part to serve as a status report on climate change science and impacts, and “aims to incorporate advances in the understanding of climate science into larger social, ecological, and policy systems, and with this provide integrated analyses of impacts and vulnerability.”  The most recent NCA was completed in 2009.

 

For additional information, contact Brent Greenfield with HBW Resources. His contact information is below.

 

Brent Greenfield
HBW Resources
2211 Norfolk Street, #410
Houston, TX 77098
Tel: 713-337-8810
E-mail: bgreenfield@hbwresources.com
Web: http://www.hbwresources.com

HBW Resources’ Brent Greenfield Summarizes Fed Activities Affecting O&G

On January 8, 2013, the General Services Administration’s Regulatory Information Service Center released a semiannual 2012 summary of the regulations that the Obama administration is considering or reviewing that may have a likely significant economic impact on a substantial number of small entities. In addition, individual federal entities including the Environmental Protection Agency and the Departments of Interior, Commerce, Homeland Security, and Agriculture released their own semiannual regulatory agendas.

A summary of federal actions of interest that may impact onshore and/or offshore oil and gas activity is provided below. Estimated timeframes for action are noted in bold in those instances where such dates were provided.

INTERIOR DEPARTMENT
Bureau of Land Management
• Revise “antiquated” hydraulic fracturing regulations that “do not reflect modern technology” by requiring public disclosure of chemicals used in hydraulic fracturing on public and Indian lands, strengthening well-bore integrity requirements, and addressing flowback water issues
• Revising existing Onshore Orders 3, 4, and 5 to (1) adopt new oil and gas industry standards to reflect current operating procedures used by industry; and (2) require proper verification and accounting practices to be implemented consistently
• Issue new Onshore Order 9 to cover the prevention of waste and beneficial use of the oil and gas resource to ensure that proper royalties are paid on oil and gas removed from federal and Indian lands

Bureau of Ocean Energy Management
• New proposed rule reorganizing BOEM regulations in “more logical” manner and “better clarify[ing]” the agency’s functional responsibilities with respect to lessees and operators
• Final rule updating and streamlining existing OCS leasing regulations to better reflect policy priorities, including incentivizing diligent development; to include provision implementing a two-term leasing process under which leases are issued subject to a requirement that drilling begins within a specific timeframe (or the lease reverts back to the government)
• Update BOEM air quality program in light of new authority over air emissions from OCS sources operating off the north coast of Alaska
• Upon completion of task force reviews of Financial Assurance and Risk Management (FARM) and bonding regulations applicable to OCS lessees and operators, prepare series of updates to existing FARM and bonding regulations
• Rulemaking to adjust liability limits for damages from offshore facilities under the Oil Pollution to reflect consumer price index increases since 1990 and to ensure environmental protection in the event of an incident

Bureau of Safety & Environmental Enforcement
• Finalize revisions of rule on production safety systems and expand use of lifecycle analysis of critical equipment, addressing subsurface safety devices, safety device testing, and requirements for operating OCS production systems
• Update regulations for offshore oil spill response planning and preparedness
• Proposed revisions to the current Safety and Environmental Management Systems rule, collaborating with Coast Guard in the development of the rule
• Proposal to modernize requirements for blowout prevention systems
• Proposed rule to assess leading and lagging performance indicators to indentify OCS risks and near-miss incidents

Office of Natural Resource Revenue
• Simplifying regulations for establishing the value for royalty purposes of oil and natural gas produced on from federal leases by using a “market-based approach…that could dramatically reduce accounting and paperwork requirements and costs on industry and better ensure proper royalty valuation by creating a more transparent royalty calculation method”
• Finalize regulations governing collection of delinquent royalties, rentals, bonuses, and other amounts due under federal and Indian oil, gas, and other mineral leases
• Address oil valuation for Indian lands through negotiated rulemaking process involving key stakeholders in order to increase royalty certainty

Fish & Wildlife Service
• Proposed rule to impose “reasonable controls on operations that affect federally owned or controlled lands and/or waters” by ensuring that all operators conducting oil or gas operations on National Wildlife Refuge System lands do so in a manner that prevents or minimizes damage to the lands, visitor values, and management objectives (ANPRM: January 2013)
• Regulations to carry out responsibilities for administering National Wildlife Refuge System, such as the development of Comprehensive Conservation Plans, acquisition planning, and implementation of “Conserving the Future” vision
• Rules to list, delist, and reclassify species and designate critical habitat for certain listed species set forth by the Multi-District Litigation
• Rules to “transform” the process for listing species and designating critical habitat
• Rules revising the timeframe for issuance of economic analyses related to critical habitat designations
• Rules clarifying definitions of “critical habitat” and “destruction or adverse modification”
• Rules to “improve” consultation process regarding the issuance of incidental take statements
• “Improvements” to critical habitat designation process
• Revision of list of migratory bird species based on new information

COMMERCE DEPARTMENT
National Marine Fisheries Service
• Rulemaking to address Gulf of Mexico Fishery Management Council proposal to designate offshore oil and gas structures as essential fish habitat (Advanced NPRM: January 2013)
• Designate critical habitat for North Atlantic and North Pacific right whales
• Rulemaking to address potential changes to regulations governing the issuance of Marine Mammal Protection Act permits for scientific research and enhancement activities and implementation of a “permit application cycle” for all MMPA permit application submissions and processing (NPRM: May 2013)
• Proposed rule to renew existing requirement that imposes speed restrictions of 10 knots for all vessels 65 feet or greater in length in certain locations and at certain times of the year along the U.S. east coast of the Atlantic seaboard; designed to reduce threat of ship collisions with North Atlantic right whales (NPRM: February 2013)

ENVIRONMENTAL PROTECTION AGENCY
• Advanced Notice of Proposed Rulemaking on the reporting of hydraulic fracturing chemicals under the Toxic Substances Control Act (May 2013); intention to initiate stakeholder process on the design and scope of such reporting
• Proposed decision on whether to retain or revise the national ambient air quality standards for ozone (NPRM: October 2013; Final rule: September 2014)
• Rulemaking to address (1) regulation of hazardous air pollutant emissions from petroleum refinery sources that are subject to maximum achievable control standards; and (2) new source performance standards for petroleum refineries whose construction, reconstruction, or modification commenced after 5/14/2007 (NPRM: March 2013; Final rule: December 2013)
• Proposed rule addressing State Implementation Plan requirements for implementation of the 2008 National Ambient Air Quality Standards for ozone (NPRM: April 2013)
• Rulemaking to address work practice standards related to flare performance and efficiency at petroleum refineries (NPRM: November 2013)
• Rulemaking on the potential revision of National Oil and Hazardous Substances Pollution Contingency Plan to address the efficacy, toxicity, environmental monitoring, authorization, and use of dispersants and other spill mitigating substances (NPRM: March 2013)
• In conjunction with the Army Corps of Engineers, development of proposed clean water protection rule addressing which water bodies are subject to the Clean Water Act
• Rulemaking on criteria and standards for cooling water intake structures, including proposed controls intended to reduce fish mortality (Final rule: May 2013)

HOMELAND SECURITY DEPARTMENT
Coast Guard
• Interim final rule on the design, manning, carriage of personnel, and related topics for offshore supply vessels of at least 6,000 gross tonnage to ensure the safe carriage of oil, hazardous substances, and individuals and crew (April 2013)
• Final rule that (1) requires owners or operators of non-tank, self-propelled vessels of 400 gross tons or greater that operate on navigable U.S. waters and carry oil of any kind as fuel for main propulsion to prepare and submit oil spill response plans; and (2) updates International Shipboard Oil Pollution Emergency Plan requirements that apply to certain nontank and tank vessels (April 2013)
• Regulations requiring an owner or operator of a marine transportation-related facility transferring bulk hazardous substances to develop and operate in accordance with an approved response plan
• Regulations 1) requiring an owner or operator of a tank vessel carrying hazardous substances to develop and submit to Coast Guard a response plan and operate in accordance with the plan; and (2) updating shipboard marine pollution emergency plans for noxious liquid substance requirements that apply to certain tank and nontank vessels
• Final rule amending regulations on vessels carrying oil, oil pollution prevention, oil transfer operations, and marine environmental protection regarding oil tank vessels in order to reflect changes to international oil pollution standards (MARPOL Annex 1); would also update shipping regulations to require Material Safety Data Sheets

DEPARTMENT OF AGRICULTURE
Forest Service
• To publish for comment internal guidance on how to implement the Land Management Planning rule issued in April 2012; directives will “enable” National Forests to begin revising their management plans under the new rule
• Development of Ecological Restoration Policy to recognize adaptive capacity of ecosystems, including the role of natural disturbances and uncertainty related to climate and other environmental change; would provide definition of “restoration”

https://www.dropbox.com/s/ojwbj86t3nqmmbo/2013%20Federal%20Regulatory%20Activities.doc