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 

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
 

Top 50 Fracking Stories of the Week: HBW Ollison Hydraulic Fracturing Report

HBW Resources: Ollison Hydraulic Fracturing Report

Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the use of hydraulic fracturing for oil and gas extraction.  With numerous state legislatures now in session, HBW Resources is monitoring these activities to ensure that responsible and feasible policies based on sound science are advanced. 
 
Action Alert
 
At a Senate Energy & Natural Resources Committee hearing last month, Secretary Jewell announced an extension of 60 days for the comment period for the proposed hydraulic fracturing rule on federal and Indian lands. The extension will give the public a total of 90 days to comment on the proposed rule.  Comments are due on August 23rd.
 
To Submit Comments:
 
Mail:
U.S. Department of the Interior, Director (630)
Bureau of Land Management, Mail Stop 2134 LM
1849 C St., NW
Washington, DC 20240
 Attention: 1004-AE26.
 
Online:
Federal eRulemaking Portal: http://www.regulations.gov  Follow the instructions at this Web site. Comments on the information collection requirement
 
Fax: 
Office of Management and Budget (OMB), Office of Information and Regulatory Affairs, Desk Officer for the Department of the Interior, fax 202-395-5806.
 
E-mail:
 oira_submission@omb.eop.gov. Please indicate “Attention: OMB Control Number 1004-0203,” regardless of the method used to submit comments on the information collection burdens.
 
For more information please contact HBW Resources.
 
States 
 
State Legislative Update: Please see linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing.
 
California
Activists in 15 California cities and counties have launched petition drives demanding that their local officials block hydraulic fracturing. The online petition to halt fracking in Los Angeles County, for example, had 5,546 signatures by this past Monday evening. Fracking opponents have been trying to pressure Gov. Jerry Brown into imposing a statewide ban. But so far, he has shown little interest in halting the practice, which has triggered a boom in oil and natural gas production in other states. The local petition drives, begun with the help of liberal organizing group Credo, are designed to add to that pressure. They also aim to block fracking in some of the places it is already occurring, such as Fresno, Kern and San Benito counties.
 
Colorado
The City of Loveland’s clerk said an anti-fracking group had collected enough signatures to place a two-year ban of in-town hydraulic fracturing on the fall ballot. City clerk Terry Andrews verified 2,256 signatures gathered by Protect Our Loveland. Under state law, the city council must, by Sept. 6, adopt the proposed ordinance that would stop the oil and gas extraction technique known as hydraulic fracturing within city limits for two years, or refer the measure to the fall ballot. This action follows the planning commission recommending changes (starts on page 34) to zoning rules to allow building within buffer zones around oil and gas facilities. The city planning commission Monday night voted 7-1 to recommend City Council amend an ordinance to allow some development in “no-build” buffer zones around oil and gas facilities. For more information please contact HBW Resources.

Florida
Florida Power & Light Company (FPL) demolished its 1960s-era Port Everglades Power Plant in Hollywood, Fla., to make way for a new, clean energy center powered by American natural gas. Construction of FPL’s Port Everglades Next Generation Clean Energy Center will begin in the first quarter of 2014 at the same location of the now-demolished power plant. The new, cleaner and more efficient power plant will begin serving customers in June 2016. The high-efficiency facility will generate enough electricity to power about 260,000 homes and businesses using 35 percent less fuel than the original plant. This improved fuel efficiency will result in the savings of hundreds of millions of dollars in fuel costs – all of which will be passed along to FPL customers, dollar for dollar. For more information please contact us.
 
Kansas
Kansas utility regulators are considering new rules to require oil and natural gas companies to disclose some information about the chemicals they use in hydraulic fracturing. The rules would require companies to disclose the chemicals they use in hydraulic fracturing. The information would have to be listed on a Kansas Corporation Commission (KCC) database or in an existing online industry database. Companies could avoid disclosing all of the details if the chemicals they used were a trade secret. Those substances still would have to be disclosed to the KCC and other state and local officials if there’s a problem, even if it’s not an emergency.
 
Louisiana
Goodrich Petroleum has entered into a definitive agreement to purchase a 66.7% working interest in producing assets and approximately 277,000 gross acres in the Tuscaloosa Marine Shale in the US for $26.7 million. The remaining 33.3% working interest owner in the producing assets and leasehold has elected to retain its interest and participate with the company in developing the assets. The acquisition is subject to customary due diligence and is expected to close on or before August 22, 2013. The gross oil production associated with the properties averaged approximately 750 barrels of oil per day for March 2013. The Company plans to fund the acquisition with its senior credit facility, which along with available cash had approximately $190 million of available liquidity pro forma at March 31, 2013. Upon closing of the transaction, the Company’s borrowing base will increase by $18 million to $243 million.  
 
Maryland
The Marcellus Shale Safe Drilling Initiative Advisory Commission, assembled by Gov. Martin O’Malley (D) in 2011, has been considering the Comprehensive Gas Development Plan (CGDP) since last year and will eventually make recommendations to state officials to require the CGDP submittal, make it voluntary or scrap the idea altogether. John Quigley, an environmental consultant who previously headed Pennsylvania’s Department of Conservation and Natural Resources, presented a report, “The Case for Maryland’s Proposed Comprehensive Gas Development Plan Program,” to a Maryland advisory panel. With a CGDP requirement, drillers would have to submit a design addressing all land “on or under” proposed exploration or production, as well as the proposed locations of well pads, roads, pipelines and other natural gas facilities. For more information please contact HBW Resources.
 
Michigan
State Sen. Rick Jones (R, District 24) is pushing tax incentives to prompt construction of a new oil processing facility in the state. Sen. Jones is not talking about a plant the size of the sprawling Marathon refinery in southwest Detroit, the only one in Michigan. Jones wants one of those small, so-called “portable” refineries being pioneered in oil-rich North Dakota. “It would be a smaller, leaner, cleaner operation that would make gasoline for the Michigan market,” said Jones, who filed his legislation Wednesday. “I’d use the Michigan Strategic Fund to give them a 10-year property tax and business tax abatement. We’d also help them find a suitable place to build.” Motor fuel and natural gas production are major growth segments for the U.S. economy as a result of huge new deposits and new extraction techniques in North America. Another refinery might not lower pump prices but still could be a good strategic move creating new jobs for Michigan.
 
State Rep. Mike Callton (R, District 87) is hosting a town hall meeting on Monday, July 29 to discuss hydraulic fracturing of oil and gas wells. Rep. Callton will be joined by representatives from Michigan Oil and Gas Producers; Michigan Department of Environmental Quality and the Michigan Environmental Council. The panel will speak about the history of fracking and its current utilization for providing natural gas. Comments and questions from the audience will be encouraged. The meeting is free and open to the public, and will run from 7 p.m. to 9 p.m. at the Barry County Commission on Aging, 320 W. Woodlawn Ave. in Hastings.
 
Minnesota
The Department of Natural Resources and Minnesota Pollution Control Agency put out requests for comment as they determine a plan to conduct rulemaking related to sand mining rules. The Legislature ordered the agencies to develop regulatory standards. Both agencies say new rules are months away from completion. For more information please contact us.
 
New York
Seven months after a tanker ran aground in December, tankers hauling Canada-bound crude oil have resumed navigating the Hudson River. The Bahamian-flagged vessel Afrodite took on crude at the Port of Albany on Wednesday in preparation for its third round trip to the Irving Oil Co. refinery in St. John, New Brunswick. The tanker can store up to 230,000 barrels of crude, primarily drawn from North Dakota’s Bakken Shale. The Afrodite is about 25 feet narrower than the Stena Primorsk, which damaged its hull after crashing into some rocks on its debut voyage to St. John late last year. Since that incident, midstream services company Buckeye Partners LP shipped crude along the Hudson by barges, which hold less oil than tankers but typically have shallower drafts that make them less likely to run aground. Much of the crude transferred to tankers at the Port of Albany arrives from the Bakken Shale via rail.
 
The Town of Marbletown joined the list of more than 170 localities around the state that have enacted bans or moratoriums on hydraulic fracturing, using its liquid drilling wastewater or any other aspect of shale gas development. For more information please contact HBW Resources.
 
North Carolina
The state Senate approved, HB 74 the Regulatory Reform Act of 2013, that would give select members of the Mining and Energy Commission the authority to review any “trade secret” claim made by energy companies before the chemicals used in fracking are brought out to a drill site and pumped into the ground. The legislative proposal came after James Womack, chairman of the Mining and Energy Commission, sent a strongly worded letter to lawmakers complaining about earlier efforts by a Senate committee to create a loophole for energy companies to avoid disclosure. The loophole would have allowed energy companies to use a trade secret claim if they didn’t want to disclose chemicals they deemed to be sensitive or competitive. The N.C. Mining and Energy Commission, which is writing 120-some rules to govern fracking, had vowed to write one of the nation’s strictest chemical disclosure standards: full disclosure of all chemicals used to frack in the state, providing maximum protection to the public and to the environment. Under the legislative proposal, review of trade secrets would be strictly controlled. The corporate secrets wouldn’t be accessible to the public, while Mining and Energy Commissioners would have access on a limited basis.
 
Ohio
Ohio bonding and liability requirements are insufficient to cover the cost and damage from a drilling accident or problems in the developing Utica shale and need to be raised, two groups said. Environment Ohio and Policy Matters Ohio held a teleconference to release the report, “Who Pays the Cost of Fracking?” that looks at Ohio’s shortcomings. It was done by the Environment Ohio Research and Policy Center.
 
Rockies Express Pipeline LLC (REX) has announced that it has executed a binding precedent agreement with an unnamed Utica Shale producer who wants to transport up to 200,000 Dth/d of processed Utica production through REX to markets in the Midcontinent.Pending satisfaction of certain conditions in the agreement, the processed gas will enter into REX through a newly constructed 14-mile residue header being installed by REX at the tailgate of MarkWest’s Seneca Processing Complex in Noble County, Ohio. The new facilities, which are expected to be in service in late 2013, will add significant natural gas supply to the east end of REX for transport to points west or east.
 
After the “community bill of rights” failed in the May primary election, a group of anti-fracking activists are back at it, trying to put the initiative on the November ballot. The bill was defeated in May by a margin of 57 percent to 43 percent. The proposed charter amendment would ban compression stations and pipelines from being installed within city limits in addition to banning any type of fracking operations or disposal wells for wastewater from fracking. The bill does include one change in language compared to the previous version. It exempts manufactured products, including the sale of components and materials used in oil and gas exploration, from the proposed ban. The Mahoning Valley Coalition for Job Growth and Investment will be brought back together to oppose the bill a second time. The coalition includes business leaders, along with local Republican and Democratic party leaders who opposed the bill. For more information please contact us.
 
The Muskingum Watershed Conservancy District has approved a new water sale from Seneca Lake to a Utica shale driller. The agency’s governing board, meeting at Atwood Lake last week, approved a deal for August through October with Colorado-based Antero Resources. The board agreed to reduce the maximum per-day amount of water being sold from 2 million to 1.5 million gallons because of drier conditions in those months. Antero will pay $6 per 1,000 gallons. The deal sets a maximum amount of 138 million gallons of water, officials said.
 
The Ohio State University’s researchers want to install and study a gas well in eastern Ohio to study the process of hydraulic fracturing, or fracking. The shale drilling well would be built on university owned land in Noble County. The plan would open the school’s Eastern Agricultural Research Station to shale drilling and would provide an opportunity to closely examine how fracking alters the environment and assess possible pollution risks to the air and groundwater. Ohio State’s Shale Water Management Research Cluster is researching ways to estimate the impact of water withdrawals from lakes and streams as well as how to treat waste fluids that bubble out of fracked shale wells. The university owns 780 acres of mineral rights at the Noble County research station. For more information please contact HBW Resources.
 
The Athens County Board of Elections has certified signatures needed to place a hydraulic fracturing ban on the Nov. 5 general election ballot in the city of Athens. Approximately 780 signatures were submitted to Athens City Auditor Kathy Hecht earlier this month, then forwarded to the elections board for certification. The title of the proposed ballot issue is “The Athens Community Bill of Rights and Water Supply Protection Ordinance.” The legislation would also ban activities associated with fracking such as the procurement of millions of gallons of fresh water, use of undisclosed chemicals, and the disposal of fracking waste in Class II injection wells. The ordinance would advise communities upstream from Athens that “industrial accidents and unwanted chemical events which cause pollution of Athens’ drinking water will be prosecuted to the full extent of the law, citing ORC VII 743.25, which authorizes any municipality to prosecute water supply polluters upstream to a distance of 20 miles.
 
Pennsylvania
A landmark federal study on hydraulic fracturing, or fracking, shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press. Although the results are preliminary — the study is still ongoing — they are a boost to a natural gas industry that has fought complaints from environmental groups and property owners who call fracking dangerous. Eight new Marcellus Shale horizontal wells were monitored seismically and one was injected with four different man-made tracers at different stages of the fracking process, which involves setting off small explosions to break the rock apart. The scientists also monitored a separate series of older gas wells that are about 3,000 feet above the Marcellus to see if the fracking fluid reached up to them.
 
Natural gas companies fixed or are repairing at least 413 miles of state roads in Susquehanna, Wyoming and Wayne counties, a Times-Tribune review of state Department of Transportation records show. In one example, more than $1 million in natural gas impact fees will be used to pave and repair 25 of Williamsport’s streets this fall and next year, enabling the city to get twice as many projects done as in years before, city officials said. “We’re doubling the amount of investment because of Marcellus Shale impact fees,” said John Grado, city engineer and director of community and economic development. Gas impact fees, those derived from taxes on local gas wells, will enable more to be done and less dependence on the city’s general fund, community development block grants or liquid fuels allocations, he said. For more information please contact us.
 
Texas
For every one job created on a drilling rig in the Permian Basin by the hydraulic fracturing craze taking over in West Texas, two jobs will be generated in Houston’s downtown skyscrapers, Bob Perryman, a Texas economist, told the Business Journals recently.
 
Oil production in Texas’s Eagle Ford shale formation rose 58 percent in May from the prior year. The nine fields that make up the majority of Eagle Ford yielded 581,923 barrels of crude a day, according to preliminary data released by the Texas Railroad Commission, which oversees oil and gas drilling in the state. The fields produced 368,770 barrels daily in May 2012. February output was revised to 574,032 barrels a day from the preliminary report of 530,689, the commission said. Production totals typically increase in subsequent months as the state receives revised, corrected or late reports. Growing production out of Eagle Ford is helping fuel a renaissance in Texas crude.
 
Magnum Hunter Resources has sold its properties in the Eagle Ford Shale’s oil-rich Gonzales and Lavaca counties for $401 million. A wholly-owned subsidiary of Penn Virginia Corp. made the purchase for $361 million in cash and $40 million in Penn Virginia common stock. The properties involved in the sale included 19,000 leasehold acres and Magnum Hunter’s operating and non-operating interests in wells in Gonzales and Lavaca counties. For more information please contact HBW Resources.
 
Lubbock’s Board of Health wants the city to hire its own inspectors to oversee new oil and gas fracturing ventures expected to come to town years from now, according to a presentation made to the City Council. The council held a brief work session at the end of its meeting to receive a presentation of health board recommendations for dealing with public health concerns related to new horizontal drilling and fracking operations. Employing inspectors on the city payroll is one of several changes the board is asking the city to consider.
 
Utah
A coalition of conservation groups has filed a ‘request for agency action’ challenging the Utah Department of Air Quality’s June 21 approval of a new oil refinery in Green River, Utah that would affect local and regional air quality and facilitate oil shale and tar sands mining in the Colorado River Basin’s Green River Formation.
 
Wyoming
Twenty households east of Pavillion are getting cisterns, or water tanks, for clean drinking water, paid for by the Wyoming Legislature after residents complained that hydraulic fracturing in the area contaminated their water. The Casper Star-Tribune reports that the water tanks are coming because lawmakers last year set aside $750,000 to supply them. The residents live in a 23-square-mile area east of Pavillion, in the Pavillion gas field. Each household participating in the project will get a pair of polyethylene tanks buried side-by-side. Each tank will have capacity for 1,750 gallons of water.
 
National
 
A landmark federal study on hydraulic fracturing shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press. After a year of monitoring, the researchers found that the chemical-laced fluids used to free gas trapped deep below the surface stayed thousands of feet below the shallower areas that supply drinking water, geologist Richard Hammack said. Although the results are preliminary — the study is still ongoing — they are a boost to a natural gas industry that has fought complaints from environmental groups and property owners who call fracking dangerous. The study done by the National Energy Technology Laboratory (NETL) in Pittsburgh marked the first time that a drilling company let government scientists inject special tracers into the fracking fluid and then continue regular monitoring to see whether it spread toward drinking water sources. The research is being done at a drilling site in Greene County, which is southwest of Pittsburgh and adjacent to West Virginia. NETL estimates that its final report will be completed by the end of the year. For more information please contact us.
 
Rep. Bill Flores (R, TX 17) introduced H.R. 2728, the “Protecting States’ Rights to Promote American Energy Security Act.” The House Natural Resources Committee’s, Subcommittee on Energy and Minerals had a hearing on this proposal yesterday. The panelists included: Catherine Foerster, Chair and Engineering Commissioner, Alaska Oil and Gas Conservation Commission; Christi Craddick, Commissioner, Railroad Commission of Texas; John Rogers, Associate Director, Utah Division of Oil, Gas & Mining; and Lois Epstein, Arctic Program Director, the Wilderness Society. The bill would exempt states with existing hydraulic fracturing regulations from the proposed BLM rule. The Energy Producing States Coalition submitted a letter in support of the legislation. For more information please contact HBW Resources.
 
House Science Committee Chairman Lamar Smith (R, TX 21) is weighing legislation to alter the scopeof the Environmental Protection Agency’s (EPA) study on the impact of oil-and-gas hydraulic fracturing on drinking water. Smith, who said the EPA has been “complicit” in efforts to undercut gas production enabled by hydraulic fracturing, said he fears the study’s design does not put risks in their proper context. The Subcommittee on Environment and Subcommittee on Energy held a joint hearing to discuss “Lessons Learned: EPA’s Investigations of Hydraulic Fracturing.”

The proposed Bureau of Land Management hydraulic fracturing rule could cost about $345 million annually to implement, according to a new economic analysis commissioned by the Independent Petroleum Association of America and Western Energy Alliance. This may be relatively good news for producers, though, since this cost estimate comes after the rule was revised from its original May 2012 proposal. Before the U.S. Department of the Interior incorporated public comments into its initial proposal, analysts at John Dunham & Associates said the rule could have cost industry nearly $1.3 billion annually. According to the Western Energy Alliance the cost of the second version of the rule is lower than the first because the new rule eliminated a requirement to regulate well maintenance; revised Bureau of Land Management estimates on the number of impacted wells; the reduction of permitting times; and “type well” provisions that will require operators to run full testing only on representative wells in a field. BLM has estimated the rules it proposed in May would cost drillers only $12 million to $20 million per year.
 
Senate Commerce Chairman Jay Rockefeller (D, WV) is looking into oil and gas transportation safety issues following the recent oil train disaster in Quebec and a 2012 pipeline blast in West Virginia. He’s asked GAO to ‘examine the impact of shale oil and gas development on transportation infrastructure and safety,’ in particular how infrastructure has changed as domestic oil and gas production in recent years has increased. Canadian officials have found 42 bodies and are still searching for five more at the site of the July 6 train disaster in Lac-Megantic, Quebec.
 
Natural gas prices were up nearly 60 percent in the first half of 2013, compared with the same period last year, but they were still too low to inspire new drilling in much of the country, according to the U.S. Energy Information Administration. Contracts for future delivery of natural gas currently are selling at about $3.70 per million British thermal units, just below the $3.75 average for natural gas in the first half of 2013, the agency said. In 2012, natural gas sold for an average of $2.39 through the first half of the year, the agency reported. The 57 percent jump in prices was enough to push many power generators to switch from burning natural gas to using coal, since it is more economic at current prices, the agency said. But $3.70 is by no means a high price, remaining too low to be of interest for most producers hoping to make a profit, said James Sullivan, senior analyst for Alembic Global Advisors, which has been tracking natural gas prices. Natural gas prices would likely have to be near $5 to encourage more drilling for the resource, with most companies believing that producing it would not be profitable below that range, Sullivan said.
 
Natural gas is helping cut emissions. But gas use will have to peak in 2030 to meet emissions reduction targets for combating climate change, Darryl Banks and Gwynne Taraska of the Center for American Progress write in a paper out today. “In the near term, we should use the expansion in natural gas to aggressively drive coal from the market, given that natural gas burns more cleanly than other fossil fuels and is currently available and affordable. The natural-gas expansion, however, needs to be managed safely and sustainably and without overbuilding long-term electricity-generation capacity that would then need to be retired.” For more information please contact HBW Resources.
 
Sen. Jim Inhofe (R, OK) has introduced S. 1355, which would remove a cap on CAFE-related credits for producing dual-fuel natural gas vehicles. “My bill would ensure NGVs are given equal treatment with electric vehicles,” said Inhofe.
 
The U.S. Department of Justice has started an antitrust investigation of the pressure-pumping business, a key component of the oil and gas industry practice of hydraulic fracturing, Baker Hughes Inc said in a filing with the Securities and Exchange Commission. Baker Hughes said it received a “civil investigation demand” from the DOJ under the Antitrust Civil Process Act. The request sought information relating to the U.S. pressure-pumping market beginning May 29, 2011.
 
International
 
Algeria
The Algerian Minister of Energy and Mines, Youcef Yousfi, and Eni’s CEO, Paolo Scaroni, met in Algiers, Algeria where they discussed future developments of cooperation between Eni and Sonatrach, a government-owned energy company, for the exploration and development of shale gas. The two companies have finalized a Memorandum of Understanding and will bring together their experience in the exploration and production of unconventional hydrocarbons.
 
Brazil
With the discovery of shale gas reserves in Brazil and plans to auction drilling rights there, a delegation is visiting Pennsylvania to see how its drilling boom has turned the state into one of the leading natural gas producers in the U.S. The group of Brazilian business and energy industry professionals hopes to learn from the state’s experience and to explore the possibility of exports to Brazil. The group is meeting with Pennsylvania regulators and drilling companies and touring a drilling site in western Pennsylvania.
 
Chile
Empresa Nacional del Petroleo (ENAP), Chile’s state oil company, reported that they have found gas through a “successful experiment” using hydraulic fracturing on the Tierra del Fuego island. The find was from wells drilled in 2012 and 2013, utilizing injection of water, sand and chemicals to facilitate the flow. The overall productivity has yet to be determined but ENAP is interested enough to be investing $100 million in the Magallanes region this year. For more information please contact us.
 
China
PetroChina and U.S. energy company Hess Corp have signed China’s first joint agreement to develop a shale block – an 800 square kilometer block in the Santanghu basin, located in the region of Xinjiang – as well as to conduct a joint study. For more information please contact HBW Resources.
 
Hungary
Hungary may be sitting atop shale gas assets totaling 2 trillion cubic meters, but for now Minister of Rural Development Sándor Fazekas is still taking a cautious stand on fracking. For Fazekas, the key issue on the meeting’s agenda for Hungary was the question of shale gas extraction, and as the minister pointed out, the resources found in Makó are of “extraordinary value” to the country. However, Fazekas did emphasize that “it is very difficult to estimate the possible environmental danger posed” by fracking and “the extraction of shale gas also requires the establishment of many more wells, which brings up questions related to landscape protection and conservation,” among other issues.
 
Ireland
Three companies currently hold options licenses to assess whether hydraulic fracturing would be viable in parts of Ireland. However, they won’t get the go-ahead from the Government unless the Environmental Protection Agency’s report, due next year, comes out in favor of fracking. Energy and Natural Resources Minister Pat Rabbitte refused to condemn the practice and hinted that it could be a viable option in Ireland. He explained, “The study will settle the science on this and that we can then make evidence-based decisions on our future.”
 
Poland
The debate over potential profits and possible environmental harms of hydraulic fracturing is being played out in a far more immediate confrontation in the east Polish village of Zurawlow. A group of farmers and residents are occupying a plot of land to prevent Chevron, which is backed by the state, from exploring for shale gas. The citizens of Zurawlow once supported the proposal to drill in the “Grabowiec concession,” a gas-rich region running beneath southeast Poland, in the hope that it would create much-needed jobs in the region. Opinion changed when two families’ well water turned black after Chevron’s seismic tests in 2010.
 
Saudi Arabia
The negative impact of shale gas on the GCC won’t be significant for at least another 20 years, citing the high cost of shale gas and projected growth in Asia’s oil consumption, Kuwait-based Asiya Investments said in its new report titled “Shale gas impact on the GCC”. The report indicated that GCC oil exports weight shifted from US to Asia. OPEC projects that China’s imports of crude oil will outpace the U.S. crude oil imports by 2014, as its rising refining capacity is propping up demand. The rest of Asia will also play an important role in keeping oil demand high. Furthermore, even if the US is able to tap its reserves adequately, and would shift from being the world’s leading importer of oil to a net exporter by 2017 and become energy independent by 2030, the lost demand for oil from the U.S. will be offset by Asia.
 
South Korea
Yoon Sang-jick, the South Korean minister of trade, industry and energy, recently met with heads of energy companies in Sejong City and encouraged to take part in the global development of shale gas, the country’s Yonhap News Agency reported. According to the minister: “We must quickly set up a strategic plan to join the global efforts develop shale gas when considering the impact the development of shale gas in the North American region will have on our petrochemical firms.”He added that South Korea’s petrochemical companies could suffer a significant setback if American competitors set up production facilities using shale gas. To curtail this, the minister recommended that the government and local energy firms consider establishing overseas facilities that will develop and produce natural gas, including shale gas. The government also agreed to jointly develop new technologies and production facilities for the petrochemical industry in order to have competitive prices. For more information please contact us.
 
United Kingdom
The UK House of Lords Economic Affairs Committee has launched an inquiry into the “Economic Impact of Shale Gas and Oil on UK Energy Policy” and is inviting written evidence on the issue to be received by September 30th. Questions the committee is seeking evidence on include:
·         How much scope is there for shale gas and oil to be used in the UK? Over what timeframe?
·         How will the costs, including those on the environment, of accessing the UK’s shale gas and oil compare to those of other energy sources?
·         What is the potential impact of shale gas and oil on the local economies in areas where development is possible?
·         What forms of electricity generation is shale gas likely to displace and by how much?
·         What impact will shale gas and oil have on household energy bills?
·         What effect will the use of shale gas and oil have on carbon emissions compared to other combinations of energy sources?
·         Will shale gas and oil increase UK energy security?
·         What lessons can be learnt from the US experience of shale gas and oil?
 
The UK government has announced plans for a shale gas ‘pad’ allowance, which will see the tax on revenue that companies make from producing shale gas reduced from 62% to 30%. The plans arebased on existing allowances for oil and gas production which aim to support almost £14 billion of investment next year and are being touted as the most generous shale incentives in the world. Under its plans, the tax break would apply to a proportion of the income generated from shale gas production. What that proportion is will be determined after a consultation. The government has also confirmed plans to give communities that host shale gas sites £100,000 per site, and up to 1% of all revenues from production. For more information please contact HBW Resources.
 
British water company United Utilities said it was in the early stages of discussing what natural gas company Cuadrilla may need for a fracking campaign. “We are having very early engagement with Cuadrilla to try to understand their requirements,” the spokeswoman was quoted as saying Saturday by The Daily Telegraph. “The fact that we are a large landowner in the northwest means we could possibly help with site selection.”
Protestors have blocked a lorry from entering a site where Cuadrilla is due to start test drilling for shale oil after receiving an Environment Agency Licence earlier this week. A small group of activists have remained at the site since early this morning and police are attending the scene. Cuadrilla have been transporting drill parts onto the site near Balcombe, West Sussex, since Tuesday and planned to begin operations on Monday. The local anti-fracking group, which has been joined for the demonstration by environmental protestors from further afield, has mounted a growing campaign over the past year, citing fears of pollution from gas flaring, disruption from lorries carrying fracturing liquids through the village and the possible pollution of local water courses. For more information please contact us.
 
Water UK, which represents major water suppliers, has published a series of concerns about fracking and warned that failure to address them could “stop the industry in its tracks.” Ministers hope the process, which involves pumping water, sand and chemicals into the ground to extract gas trapped in rocks, could unlock a major new source of gas for Britain and bring down household energy bills.
 
Additional Information
 
For additional information, please contact Bo Ollison with HBW Resources.  His contact information is below.
 
Bo Ollison
HBW Resources
2211 Norfolk Street, #410
Houston, TX 77098
Tel: 713-337-8810
E-mail: bollison@hbwresources.com
Web: http://www.hbwresources.com
Twitter: @BoOllison

Contact Information
 
If you have any general questions, please contact us anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report, the HBW Greenfield Offshore Energy Report, the Forsgren Environmental Report, and daily updates and new Member profiles can be viewed at the new Intelligence Tab on the HBW Resources website at: http://hbwresources.com/intelligence/.  Hope you all have a great day.
 
Thanks,
 
Michael Zehr
HBW Resources
1666 K Street, NW, Suite 500
Washington, DC 20006
Direct: 202-429-6081
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E-mail: mzehr@hbwresources.com
Web: http://www.hbwresources.com

HBW Ollison Fracking Report

 

HBW Resources: Ollison Hydraulic Fracturing Report

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

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

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

Additional Information

For additional information, please contact Bo Ollison with HBW Resources.  His contact information is below.
 
Bo Ollison
HBW Resources
2211 Norfolk Street, #410
Houston, TX 77098
Tel: 713-337-8810
E-mail: bollison@hbwresources.com
Web: http://www.hbwresources.com
Twitter: @BoOllison
 
Contact Information
 
If you have any general questions, please contact us anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report, the HBW Greenfield Offshore Energy Report, the Forsgren Environmental Report, and daily updates and new Member profiles can be viewed at the new Intelligence Tab on the HBW Resources website at:http://hbwresources.com/intelligence/.  Hope you all have a great day.
 
Thanks,
 
Michael Zehr
HBW Resources
1666 K Street, NW, Suite 500
Washington, DC 20006
Direct: 202-429-6081
Cell: 202-277-3927
E-mail: mzehr@hbwresources.com
Web: http://www.hbwresources.com

HBW Resources: Ollison Hydraulic Fracturing Report

HBW Resources: Ollison Hydraulic Fracturing Report


 
Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the use of hydraulic fracturing for oil and gas extraction.  With numerous state legislatures now in session, HBW Resources is monitoring these activities to ensure that responsible and feasible policies based on sound science are advanced. If you have any questions or would like additional information, please contact us.
 
States 
 
State Legislative Update: Please see linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing.
 
California
SB 4, introduced by Sen. Fran Pavley (D, District 27) would require disclosure on chemicals used, require notification of residents before drilling starts and create a system for testing groundwater. The bill would cover not just hydraulic fracturing but other types of well stimulation, including acidization. Additionally, it would require an independent scientific study. The measure passed the Assembly’s Natural Resources Committee with a 6-3 vote. It already has cleared the Senate. One more hearing is planned in the Assembly’s Appropriations Committee. If that panel approves it, the bill will go to an Assembly floor vote. For more information please contact HBW Resources.
 
Colorado
The U.S. Forest Service announced in April that it is conducting an environmental impact study of oil and gas development in the Pawnee National Grasslands, an area between Fort Collins and Sterling. When the Forest Service last updated its management plan for the grasslands in 1997, it estimated that 25 oil and gas wells would be drilled through 2012, with only 10 of them actually producing oil and gas. Today, there are 1,884 state-approved oil and gas wells on public and private land existing within all of the township and range survey sections that include parcels of national grasslands, according to a Coloradoan analysis of Colorado Oil and Gas Conservation Commission data. Some of those wells are permitted but haven’t been drilled yet. Others were drilled, fracked and are producing oil and gas. Of the wells in the area, 214 are producing oil and gas and 71 are listed as being drilled, COGCC data show. About 63 of the wells within the national grasslands boundary are on public land, 18 of which have been drilled since the management plan was last updated in 1997, according to the Forest Service. The Forest Service’s environmental study, a draft of which is delayed and due to be published sometime this winter, will update the Pawnee’s 15-year-old grasslands management plan to account for all the new interest in drilling on the public grasslands. It will determine how much more oil and gas development will be allowed on the grasslands and add certain restrictions on drilling that will minimize its effect on the prairie. The original proposal, or “scoping,” for the environmental study generated between 2,300 and 2,800 public comments before the study even began.
 
Oil-related items are expected to come up during the Fort Collins City Council’s July 16 meeting. Discussions around them are likely to be replays of conversations about the safety of oil operations, such as hydraulic fracturing that have been going on for some time. One item is fairly straightforward: The council will give initial consideration to an ordinance calling for a special election Nov. 5. The move is in anticipation of a successful petition drive by Citizens for a Healthy Fort Collins, which wants to place a measure on the ballot calling for a five-year moratorium on fracking within city limits so that studies may be conducted on impacts the practice has on health, safety and property values. The group’s fracking moratorium would extend to Prospect Energy, which is the only oil development company working within city limits. If approved, the ordinance would be the first step in saving a spot on the ballot for the proposal. Final consideration of the ordinance is tentatively scheduled for Aug. 20. The group faces an Aug. 5 deadline for submitting the petition signatures of 3,907 registered city voters to get the proposal on the ballot.The second oil item is actually two fold: The council will consider whether to extend its moratorium on accepting applications for oil and gas operations to Dec. 31 while the process of modifying the land use code to establish city regulations on those operations is completed. The moratorium is scheduled to end July 31. For more information please contact HBW Resources.
 
Colorado oil and gas industry regulators have given medical community leaders a written assurance that doctors can obtain and share trade-secret information about fracking chemicals for the purpose of treating patients and protecting public health. Colorado Medical Society president Dr. Jan Kief said the letter from Colorado Oil and Gas Conservation Commission chairman Thomas Compton addresses concerns raised by doctors and the medical society who feared that signing a confidentiality pledge kept them from sharing information with other medical professionals. Doctors still are required to fill out a Form 35 confidentiality pledge before obtaining information on fracking chemicals. In return, they can share information with patients, other health care professionals and with public health agencies.
 
26 small brewers in Colorado are saying their industry could be affected by fracking, a drilling technique that pumps water, sand and chemicals down well bores to break apart rock and release trapped oil and gas. In a letter to Gov. John Hickenlooper (D, CO), twenty six representatives of Colorado beer makers called for preserving clean water for their businesses and respecting the state’s natural allure. In May, German brewers worried about possible fracking-related water contamination raised similar concerns. The Colorado Oil and Gas Association, a trade group for the state’s petroleum industry, has requested to meet with the letter’s signatories to discuss their concerns. Hickenlooper, an avowed fan of both craft beer and oil and gas drilling, has not directly responded to the letter, but a spokesman for the governor said he would review the matter.
 
Protect Our Loveland Inc. organizers say they are a grassroots initiative of residents who have come together over concerns about new technology for hydraulic fracturing and horizontal drilling in their community. A growing number of volunteers are circulating petitions and collecting signatures with the hope of getting the moratorium question on the Nov. 5 ballot. On the July 8 deadline, the group intends to submit the petitions to the City Clerk’s office. They need to have valid signatures from 5 percent of the city’s registered electors – at least 2,523 voters. Organizers won’t say how close they’ve come to that number since petitions started circulating early this month, but they’re confident going into the final week of signature-gathering. In May 2012, the Loveland City Council imposed a nine-month moratorium on oil and gas development in the city, during which time city staff members worked to research and craft rules for the industry that would not be superseded by state regulations. Those regulations, which city officials call some of the most strict in the state with their inclusion of incentives for oil companies to adhere to higher standards than state regulations require, were unveiled earlier this year. And after a series of contentious and often emotional public hearings, the regulations were approved by a split City Council and took effect in April. A letter of intent submitted last month and the subsequent petition language instead asks for an ordinance to impose a two-year moratorium. If approved by the voters, the moratorium period — which could also be lifted by a vote of the people — would block oil and gas drilling permits in the city. During that time, the initiative calls for full studies on the effects of the process on property values and human health.  For more information please contact HBW Resources.

Kansas
Sefton Resources, Inc., the independent oil and gas exploitation and production company with interests in California and Kansas, released an update on oil & gas exploration and production (E&P) operations for June 2013 and the results of a Mississippian Limestone Study in North East Kansas. In June 2013, oil production increased to approximately 500 barrels a month from 11 wells, up from approximately 450 barrels a month reported in May, all from the Company’s wells in Leavenworth County, Kansas. Additional production is expected from a number of leases in the future as the ongoing program of workovers and recompletions continues on oil and gas wells (with the emphasis on oil wells) in proximity to the Company’s 100 percent-owned and operated pipeline systems. As part of the ongoing leasing program, the Company has now acquired leases with over 50 wells on them that will be reviewed as part of this initial development program. Alongside the pipeline system for gathering natural gas, TEG MidContinent also has water disposal facilities in place along with a water tanker truck to provide ample water disposal capabilities. With infrastructure for oil, water and gas production in place, economics improve as more wells are brought back into production.
 
Michigan
The Lansing Board of Water & Light opened a natural gas-fired power plant, its first new plant in 40 years, saying the facility is environmentally friendly and will give the area an economic boost. The REO Town plant was fully operational Monday, the utility said. The plant is part of a $182 million project that includes a headquarters building and a restored Grand Trunk Western Railroad depot for the BWL Board of Commissioners meetings. The plant will generate up to 300,000 pounds of steam for 225 steam customers in downtown Lansing, replacing the Moores Park Steam Plant. It also will provide 100 megawatts of electricity, about 20 percent of the utility’s electric generation. The Board of Water & Light offers water, electric, steam and chilled water service to more than 100,000 residential and business customers. For more information please contact HBW Resources.
 
Experts on hydraulic fracturing will present both sides of the practice at a July 17 informational meeting hosted by the Ottawa County Planning Commission. The meeting will be held at 7 p.m. pm in the Main Conference Room of the Ottawa County Fillmore Street Complex, 12220 Fillmore St., West Olive, MI. The meeting is expected to conclude at 9 p.m. The seminar will include presentations from a local environmental consultant, the Michigan Department of Environmental Quality, the Michigan Oil and Gas Association, the Committee to Ban Fracking in Michigan, the law firm of ScholtenFant and the Michigan State University Extension. A question and answer session will follow the presentations. Individuals interested in attending are encouraged to RVSP by July 10 by contacting the Ottawa County Department of Planning and Performance Improvement by phone at 616-738-4852 or by email at plan@miottawa.org
 
Minnesota
A frac sand hauler is suing the city of Wabasha, claiming he should not be subject to city zoning rules. In his federal lawsuit, Jim Roemer claims that because he has a contract to ship sand on railroad lines, his facility must follow only federal regulations, not local ones. Roemer wants to increase his daily truck trips from 40 to about 150. His attorney says Roemer isn’t seeking damages, but wants to do business without limits of city regulations. Roemer’s company, which hauls frac sand as well as other materials, is within the boundaries of the city’s wellhead protection zone — the area located above the city’s water supply. The city is required to closely monitor and regulate all development in the area, Wabasha’s City attorney said. Any expansion or modification of businesses in that area need special approval from the Wabasha City Council.
 
New Mexico
The prolonged drought gripping New Mexico has hurt crops in Eddy County, driving some farmers in the area to sell their water supplies to oil and gas drillers. The petroleum industry has an endless thirst for water for hydraulic fracturing. Drillers are willing to pay a premium for local water supplies in New Mexico, prompting many in the agricultural sector to apply for commercial rights to sell water from extra wells. For more information please contact HBW Resources.
 
New York
Rockland County Executive C. Scott Vanderhoef signed into law legislation banning the use of fracking waste, its processing at all wastewater treatment plants and its application on all roads including for deicing and dust control in the county. Other area counties that have adopted similar local laws include Ulster, Orange, Putnam and Westchester. The law has been sent to the State.
 
Natural gas can be “effective” as a fuel but questions remain about whether it can be developed safely with hydraulic fracturing, Gov. Andrew Cuomo said. The state’s decision-making process on hydrofracking stretches back to 2008, with Cuomo’s administration inheriting it when he took office in 2011. The Marcellus Shale, which covers the economically struggling Southern Tier, has been targeted by gas companies looking to extract its gas. Cuomo said the positives of natural gas as a fuel are separate from the questions surrounding fracking.  Environmental, health and anti-fracking groups have raised numerous concerns about the fracking process, particularly as it’s related to water quality and the public health. The natural-gas industry says the risks can be properly mitigated and that drilling can lead to an economic turnaround in struggling areas of the state. State Health Commissioner Nirav Shah was first tasked last year with reviewing the state Department of Environmental Conservation’s proposals for fracking to ensure they protect the public health. That review apparently continues, and a decision on fracking waits until it’s finalized. Cuomo said there’s no update on when that work may be completed. “There’s nothing new as far as I know,” he said.
 
North Carolina
North Carolina’s Mining and Energy Commission (MEC) want state legislators to back off oil and gas regulation. In a letter to House and Senate leaders over the weekend, MEC Chairman Jim Womack said a chemical disclosure bill under consideration in Raleigh would pre-empt and undermine a measure the commission has spent months crafting.A provision inserted last week into HB 94, a broad environmental bill now in the Senate, would change how trade secrets are handled. Oil and gas companies would be able to withhold the information completely from the state and public. The measure would allow members of the public to challenge trade secret status.Womack slammed the legislature for stirring up anti-drilling fervor in the state and for disregarding the “meticulously” crafted work of the commission. The legislation passed the Senate on July 2 by a 35-11 vote.
 
North Dakota
HB 1134, introduced by Rep. Todd Porter (R, District 34), offers North Dakota oil drillers tax breaks beginning July 1 if they stop burning and wasting natural gas. The bill offers oil companies tax incentives for capturing and using the byproduct of the state’s crude production.Records show 275 million cubic feet of natural gas goes up in smoke each day in North Dakota, or enough to heat more than 1 million homes daily. Flaring also accounted for about 5 million tons of carbon dioxide emissions in North Dakota last year. That’s about the same amount that 945,000 automobiles would emit. For more information please contact HBW Resources.
 
Ohio
Republican Gov. John Kasich wants an increase in the severance tax. Democrats in both chambers of the Ohio General Assembly support it. Ohioans, including a plurality of registered Republican voters, think oil and gas companies should be subject to a new tax, according to a March poll by Quinnipiac University. Yet 16 months after it was first proposed, the Legislature will break for summer with no “frack tax” and no apparent momentum to push for one in the fall. Republicans have time and again dismissed the idea of raising taxes on an emerging sector, saying that too little was known about the reserves at this point to set a new tax policy and that any increase could stunt the growth of jobs and investment. The governor’s proposal would have applied only to owners of horizontal wells, which are multimillion dollar undertakings designed to harvest oil and gas in volumes that dwarf what traditional vertical wells can produce. The discovery of the Utica Shale has attracted some of the largest energy firms in the world, including Chesapeake Energy, Chevron and ExxonMobil, all looking to employ this relatively new technology.
 
Eclipse Resources has acquired the Oxford Oil Company with approximately 184,000 net acres in Ohio and 13.8 Bcfe of proved developed producing reserves. Prior to the acquisition, Eclipse Resources owned approximately 41,000 net acres in Belmont, Guernsey, Monroe and Noble Counties in Ohio where the largest wells in the Utica Shale play have been reported to date. With the acquisition of Oxford, Eclipse Resources now owns approximately 90,000 net acres in these core Utica Shale counties, as well as in Harrison County, Ohio. Eclipse Resources has recently completed drilling a Utica Shale well in Monroe County with encouraging results, and has participated in five wells in Noble County that have shown strong initial production rates and high liquids yields.  For more information please contact HBW Resources.
 
Storage and treatment of liquid drilling wastes, air emissions of methane, water withdrawals for drilling and site construction are among the biggest problems facing shale-gas drilling in Ohio and other states. Those four problems top a list put together by researchers Nathan Richardson and Hal Gordon of Resources for the Future, a nonprofit group based in Washington, D.C. Their group surveyed 215 experts from government agencies, industry, academia or nongovernment organizations who were asked to rank 264 separate drilling threats from most serious to least serious.
 
The engineering firm S&ME Inc. is adding three employees at its Dublin office to help the company serve clients with projects in the Utica and Marcellus shale plays.  S&ME, based in Raleigh, N.C., is providing civil and environmental engineering services to the natural gas pipeline companies in the shale plays under development in eastern Ohio, western Pennsylvania and West Virginia. The firm has 900 employees in 25 offices across eight states. The Dublin office has hired six people since the first of the year, now employing about 60.
 
Pennsylvania
Oil and gas royalty owners and an environmental group in Pennsylvania said that legislation awaiting Gov. Tom Corbett’s signature seriously weakens negotiating rights for some landowners. The National Association of Royalty Owners said last-minute changes made during the weekend to SB 259, introduced by Sen. Gene Yaw(R, District 23) regulating how oil and gas royalty information is to be provided to lessors. The bill could allow drilling companies to use decades-old mineral leases to force current landowners to accept Marcellus Shale drilling under their property. The new legislation would only apply to people with existing oil and gas leases. It would mean heirs to leases signed decades ago for traditional drilling could be forced to accept horizontal drilling, which can extend thousands of feet from a well, even under land owned by neighbors, who also would be forced to accept the drilling.
 
Gov. Tom Corbett urged the Delaware River Basin Commission (DRBC) to lift a three-year moratorium on gas drilling, saying it has depressed economic growth in northeastern Pennsylvania and deprived landowners of their property rights. Corbett said the DRBC has had more than enough time to develop and implement regulations that would allow natural gas to be siphoned from the Marcellus Shale rock formation while protecting water quality in the Delaware River and its tributaries. The DRBC, which has representatives from New Jersey, New York, Pennsylvania, Delaware and the federal government, published an initial set of draft drilling regulations in 2010, and made revisions after taking public comment. Commissioners were supposed to consider adoption of the rules in 2011 but abruptly canceled the vote. It has not been rescheduled. DRBC says it’s taking Gov. Tom Corbett’s complaint about a lack of natural gas development in northeastern Pennsylvania “very seriously,” but there’s still no timetable for lifting a 3-year moratorium on drilling. At the same time, a landowners’ group in northeastern Pennsylvania is threatening to sue the DRBC over its three-year moratorium on natural gas exploration and production, saying the ban has imposed a heavy financial toll on thousands of people who leased their land for drilling, only to see the energy boom pass them by. The Northern Wayne Property Owners Alliance, one of the largest landowners’ groups in Pennsylvania with more than 1,300 families and businesses, said in a letter to the commission’s executive director that it will file a lawsuit unless the agency either schedules a vote on regulations that would allow drilling to begin, or steps aside and drops any plan to regulate the practice. The five-member basin commission is scheduled to meet Tuesday and Wednesday in Wilmington, Del. Gas drilling is not on the agenda.
 
Rural landowners who say they’re getting short-changed in royalty payments from gas companies in the Marcellus Shale region have gotten the attention of lawmakers in Harrisburg. The amounts involved may be surprising. The Allegheny Institute for Public Policy estimated that Pennsylvania landowners received $731 million in royalty payments last year. The company pays to drill the well and in exchange, the company and landowner split proceeds from gas produced by the well. Basically, the landowner is supposed to get the money from every eighth gallon of gas produced by the well. A 2010 court decision established that gas companies are allowed to deduct for post-production expenses, including the cost of processing the gas or transporting it to market. Gas companies have interpreted the rules regarding royalty deductions differently, though. Those who testified before the Senate committee identified Chesapeake Energy as being the most aggressive about subtracting from property owners’ checks, according to advocates for landowners. Sen. Elder Vogel (R, District 47), said the complaints he’s heard have suggested problems are limited to the one company and asked why there was no industry standard regarding how deductions would be made. The county commissioners in Bradford, Susquehanna and Sullivan counties have all passed resolutions asking the state to make it illegal for gas companies to take deductions that leave landowners with royalties less than the one-eighth share. Lawmakers in the House of Representatives are working on new legislation that would clarify state law regarding the minimum royalty payment for landowners. The legislation, which would apply to existing as well as new leases, would prevent deductions from post-production costs from reducing royalty payments below 12.5 percent, said state Rep. Matt Baker (R, District 68), one of four state representatives who are working on the draft of the legislation. Baker and the three other drafters of the bill, Tina Pickett (R, District 110), Sandra Major (R, District 11), and Garth Everett (R, District 84), say the proposed legislation is intended to directly respond to concerns by landowners who have drilling leases and whose royalty payments have decreased due to post-production cost. For more information please contact HBW Resources.
 
As mentioned last week, the Pennsylvania Democratic State Committee voted 115-81 in favor of a moratorium on fracking which has drawn condemnation from its most famous progeny – former Gov. Ed Rendell as well as two current candidates for Governor, including John Hanger, though he supports a ban in state forests and strict regulation on private property and Kathleen McGinty.
 
Shell Oil Co. has postponed a decision about purchasing property in western Pennsylvania to build a giant petrochemical plant, extending the timeline for a project by six months that’s a political touchstone for the state’s Republican governor. Shell officials confirmed that a June 30 deadline tied to the land purchase would be extended through the end of the year. Shell is assessing the prospect of producing and acquiring enough ethane out of Pennsylvania and Ohio natural gas fields to feed a “cracker” plant it wants to build north of Pittsburgh. Shell is in talks with Horsehead Corp., a Pittsburgh-based producer of zinc oxide that is closing a plant along the Ohio River north of the city in Monaca, PA. Shell would spend some $2 billion to $3 billion to build an ethylene plant that would make use of gas liquids production in the region’s Marcellus and Utica shale formations. The energy-intensive cracker would turn ethane into ethylene, a main ingredient in plastics and chemicals.
 
Pittsburgh based, Shale Markets, LLC, will host, “Start Doing Business in the Natural Gas Industry in PA, WV & OH…” to help businesses get into the shale oil and natural gas industry. The event is taking place at the Sheraton Four Points Pittsburgh North in Cranberry Township, on Thursday, August 15th. The purpose of this seminar is to show businesses large and small across the U.S. how to break into the industry and to prosper once in. The seminar will cover: a brief history and terminology used in the industry; a review of the supply chain to examine where each company may fit; explanation of safety/ environmental certifications and audits; show how each company can start doing business right away; discuss how social media can improve a company’s web presence; network with professionals in the industry as well as other businesses, and more. For more information please contact HBW Resources.
 
Schneider National, Inc., a premier provider of truckload, logistics and intermodal services, announced it is adding 60 oilfield truck drivers to support its energy business on the Marcellus Shale Formation. The company is offering a $5,000 sign-on bonus to experienced drivers to join. No oilfield driving experience is required; Schneider will provide specific training. Positions are based within a 75-mile radius of Mansfield, PA, and Wilkes-Barre, PA. Relocation assistance will be provided to interested candidates living outside of the hiring areas. Schneider drivers working on the Marcellus Shale can expect to earn up to $60,000 per year with a paid orientation and comprehensive benefits package. Most drivers will also enjoy daily time at home while transporting materials into and out of the oilfields. The sign-on bonus and relocation assistance will be offered for a limited time only. Drivers interested in applying or learning more can visit www.schneiderjobs.com or call 800-44-PRIDE (800-447-7433).
 
Texas
Production data for April show how fracking has shattered not only the shale rock in formations like Texas’ Eagle Ford and Permian Basin but also the myths of “peak oil” and petroleum as an energy source of the past. As Mark Perry notes on his Carpe Diem blog (see post on July 1, 2013 at 5:44pm), Texas produced an average of 2.45 million barrels a day (bpd) of crude oil in April, according to the Energy Information Administration. That’s the highest average daily output for Texas in any month since April 1985 — 28 years ago. In only 2-1/2 years, the Lone Star State has doubled its crude output, making it what Perry dubs Saudi Texas and reversing a 23-year decline that fueled speculation that the maximum rate of petroleum extraction has been, or will soon be, reached. At the current pace of output gains, Texas’ production will likely surpass 3 million bpd by year-end, pulling it ahead of Venezuela, Kuwait, Mexico and Iraq to become the equivalent of the ninth largest oil-production “nation” in the world.

The Senate Finance Committee took less than 10 minutes to approve a measure that, if the House and Texas voters agree, would direct about $900 million more a year to the state’s highways. SJR 1, a proposed constitutional amendment, was approved 12-0 and could come to the Senate floor for approval as soon as July 9, when the Senate returns from a weeklong recess of this second special session. Identical resolutions filed in the House have not yet been scheduled for committee hearings. SJR 1 would redirect oil and gas severance taxes from the state rainy day fund to the Texas Department of Transportation (TxDOT). In its current form, it specifies that the money could not be used to pay for toll roads, a stipulation added in the House during the first special session. The measure includes a requirement that the amount of money going to TxDOT would be reduced or eliminated if the rainy day fund balance were to fall below what would be a moving threshold. For the first payment to TxDOT, which wouldn’t occur until November 2014, that threshold would be about $4.8 billion
 
As Pioneer Natural Resources steps up its operations in the Spraberry/Wolfcamp Shale, it has partnered with another local company to help recycle frack water and produced water from its wells. Roanoke-based Fountain Quail Water Management announced the partnership Thursday with Irving-based Pioneer to set up recycling operations near Midkiff by the third quarter of 2013. Fountain Quail will set up two Nomad recycling machines right at the wastewater disposal well so they can capture much of the produced water and frack water that comes from Pioneer’s nearby frack jobs and producing wells. The water will be converted back into freshwater so Pioneer can use it in another fracture stimulation.
 
Statoil announced that as of July 1st, it has assumed operatorship for all activities in the eastern part of its Eagle Ford asset in Texas which fall mainly within Live Oak, Karnes, DeWitt and Bee counties. Statoil holds approximately 73,000 net acres in the Eagle Ford. Production stands at 20,200 barrels of oil equivalents per day (boe/d) (Statoil share) from around 300 producing wells.
 
Spectra Energy’s Texas Eastern Transmission LP is offering capacity on its Gulf Market Expansion Project, which would give Marcellus and Utica Shale gas access to growing Gulf Coast markets in Louisiana and Texas, including for future export of liquefied natural gas (LNG). For more information please contact HBW Resources.
 
Chesapeake Energy Corp. announced a deal to sell off assets for $1 billion in the Eagle Ford and the Haynesville shales to Dallas-based Exco Resources. In the northern Eagle Ford Shale, will acquire about 55,000 net acres in Zavala, Dimmit, La Salle and Frio counties, Texas. The properties contain 120 producing wells that had average net daily production of 6,100 barrels of oil equivalent during May. In the Haynesville Shale, Exco will get Chesapeake’s operated and non-operated interests in 9,600 net acres in Desoto and Caddo parishes, Louisiana. Included in deal: 11 units operated by Chesapeake and 42 units operated by Exco. The average net daily production from the Haynesville properties was about 114 million cubic feet of natural gas equivalent during May.
 
Houston-based ZaZa Energy Corp. said it will sell 10,300 acres in South Texas’s Eagle Ford Shale formation for $28.8 million. Sanchez Energy’s SN Marquis subsidiary, also based in Houston, is the purchaser, according securities documents. The acreage is located in Fayette, Gonzales and Lavaca counties, all east of San Antonio.
 
West Virginia
A study by West Virginia University Public School of Health chairman Michael McCawley found only one site where there was concern, the Maury pad in Wetzel County where high levels of benzene were found. Benzene levels at the Maury pad were 85 parts per billion, compared to a normal range between one and 30 parts per billion. There was more diesel truck activity at the Maury and the trucks could have produced most of the benzene detected, said McCawley.He said benzene levels at the other drilling sites in Wetzel, Marion and Brooke counties were more like the exposure one would experience living in a city. For more information please contact HBW Resources.
 
Wyoming
The first Pavillion working group meeting since the Environmental Protection Agency announced it is handing its investigation of contaminated water to the state is Aug. 2 in Riverton. The meeting is public. It begins at 1 p.m. at the Riverton Holiday Inn at 900 E. Sunset Dr. The Wyoming Department of Environmental Quality and the Wyoming Oil and Gas Conservation Commission will give updates and describe the future investigation of pits, well bore integrity and domestic water wells.
 
National
Energy Secretary Ernest Moniz, in his first interview since taking office last month, expressed firm support for the domestic natural gas industry, both in stressing his desire to quickly approve liquefied natural gas exports and backing the role of states in regulating hydraulic fracturing. “I think in the end there has to be a very, very strong state role there” for states, Moniz said in an interview on “Platts Energy Week.” “The situations are different in different states, the geologies are different,” he said. Moniz also downplayed environmental concerns about fracking, contending that incidents such as methane leakages are “relatively small” when compared with the number of wells being drilled. “I think the issues in terms of the environmental footprint of hydraulic fracturing are manageable,” he said. “They’re challenging, but manageable.”
 
The House Subcommittee on Energy and Power has scheduled a hearing for Tuesday, July 9, 2013 to focus on H.R. 1900, the Natural Gas Pipeline Permitting Reform Act. The Natural Gas Pipeline Permitting Reform Act, sponsored by Rep. Mike Pompeo (R, KS 4) would modernize the federal review process for natural gas pipeline permit applications. The legislation seeks to facilitate the construction of new natural gas pipeline projects by modernizing the permitting process and expediting approvals. It would spur job growth and provide greater certainty for interstate natural gas pipeline projects while preserving the critical environmental review processes necessary for each natural gas pipeline project.
 
The EPA will host two public webinars providing on a summary of recent workshops within its Hydraulic Fracturing Study Group in Tuesday, July 16. “Water Acquisition Modeling: Assessing Impacts through Modeling and Other Means” will be held at 1:00pm EST while, “Well Construction/Operation and Subsurface Modeling” will be held at 3:00pm EST.
 
Western governors have unveiled a regional 10-year energy “vision” that stresses cooperation among states in interstate projects such as transmission lines, increased oil production and modernization of pipeline infrastructure.Among goals of the plan are to put the United States on a path to energy security by increasing North American oil production, ensuring energy is clean, affordable and reliable by providing a balanced portfolio that includes renewable, traditional and nontraditional resources and increase energy productivity associated with electricity and natural gas. For more information please contact HBW Resources.
 
State regulators continue to be the primary overseers of shale natural gas development, but because of the speed at which the boom shifted — and continues to shift — the energy marketplace, the dynamic environment has created challenges for the energy industry and all of the stakeholders involved, according to, “The State of State Shale Gas Regulation” a report by Resources for the Future (RFF).
 
Steptoe and Johnson has published a study, “Below the Surface -The Legal Challenges of Shale Gas Production” which “set out to map the legal issues, trends and expenses below the surface of shale production” and found that on average, shale developers spend $3.4 million annually for litigation in shale plays. It found that areas that decision-makers of shale activities find the most challenging include: “Title and real estate, transactions, litigation, regulatory and environmental–in that order. When asked which matters require the most help from outside counsel, litigation is first, followed by title and real estate, and then private financing and related securities.” The study also found that 67 percent of respondents use litigation or trial to defend against suits; 65 percent use pre-trial settlement; and 56 percent said environmental disputes are of the most concern.
 
United Parcel Service Inc. will purchase 285 more natural-gas powered trucks in 2014, covering every new heavy-duty vehicle purchased for its small-package delivery business, its chief operating officer said. The purchases will build on a previously announced buy of 700 natural-gas trucks, said David Abney, the Atlanta-based company’s chief operating officer. UPS sees liquefied and compressed natural gas as a “bridge fuel” over the next decade, he said. UPS is also building nine additional natural-gas filling stations, Abney said. Three will be in Tennessee, which has a favorable regulatory environment and a year-round supply of natural gas available for transportation, he said. The world’s largest package-delivery company is also vowing to reduce diesel soot emissions 75 percent by 2020 and smog-forming nitrogen oxides by 60 percent. The company’s alternative-fuel trucks have logged 300 million miles since 2001 with a goal of reaching 1 billion by 2017. Through better information, route planning and telematics, UPS trucks drove 364 million fewer miles between 2001 and 2012, Abney said. UPS fleets travel about 2.9 billion miles a year. UPS now operates 2,723 alternative-fuel and alternative-technology vehicles, he said. The 285 additional natural-gas powered tractors and nine fueling stations the company has planned represent an investment of $75 million.
 
Procter & Gamble Co. is converting as much as 20 percent of its for-hire truck shipping to natural gas vehicles. Starting next month, the Cincinnati-based consumer-goods company will work with eight transportation carriers to achieve the goal within two years. The effort, according to P&G, should reduce greenhouse gas emissions by nearly 5,000 metric tons — equal to the amount produced by 1,000 passenger vehicles in a year. The project’s initial phase calls for converting 7 percent of P&G’s North America for-hire transportation network to natural gas powered trucks. The move involves 16 states with an average length of haul of more than 280 miles, including two 1,000-mile truck lanes.The for-hire arrangement is in addition to P&G’s 22 natural gas vehicles.
 
The success of the shale revolution will be slow to replicate outside the United States because of limited access to drilling equipment and skilled personnel, according to influential oil analyst Leonardo Maugeri. Maugeri has produced an assessment of the U.S. oil industry, “The Shale Oil Boom: A  U.S. Phenomenon.” But he is too pessimistic about the potential for shale production in the rest of the world and its role in restraining medium-term and long-term oil prices. Citing Baker Hughes, Maugeri notes that more than half of the world’s drilling rigs are employed in the United States. Ninety percent of them are equipped to drill horizontal wells, and almost all oil and gas wells in the United States are now fractured to stimulate production. In the rest of the world, by contrast, fracturing is used on fewer than one well in 10. This leads him to conclude that shale is likely to remain a uniquely U.S. phenomenon for a while. For more information please contact HBW Resources.
 
A report, “Partnering Natural Gas and Renewables in ERCOT” from The Brattle Group argues widespread suggestions that abundant supplies and low prices for natural gas are pushing out wind and solar, focuses too much on installation costs and ignores the advantages that keep renewable capacity competitive, as well as the significant synergies between gas and renewables. In the short term, despite low gas prices, renewables are called upon first, especially in competitive markets, because they have the lowest variable costs. In real-world day-to-day operation, gas and renewable capacity complement each other to a degree sufficient to push out other options. Texas’s large wind capacity has resulted in substantial ramping episodes that need to be backed up by gas-fired generation. In 2009, the report notes, ramping events averaged five hours, and ranged from 4,613 MW up to –4,788 MW down. Added renewable capacity offers an important hedge against fuel gas price increases. While up-front costs of gas-fired capacity are lower, future fuel prices are uncertain, and gas has historically been quite volatile. The variable costs of renewable capacity are known, because the costs are almost entirely up-front.
 
International
The former forecasting head of the Organization of Economic Cooperation and Development (OECD) believes the shale gas revolution could spark a slide in oil prices over the next 10 years. In a report written with Puma Energy, Dr. John Llewellyn described the invention of ‘fracking’ to extract the gas as ‘game changing technology’. As a consequence Llewellyn would not be surprised to see the price of oil fall to around $50 a barrel between now and 2020.
 
A group of oil-pipe makers led by United States Steel Corp. filed a U.S. trade complaint against competitors in nine nations, alleging goods from those countries were sold in the U.S. market below cost and, in some cases, benefited from government subsidies. The U.S. coalition made the complaint with the International Trade Commission in Washington. Countries named in the complaint are India, Korea, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine and Vietnam. Producers including U.S. Steel won U.S. duties averaging 86 percent on Chinese pipes used in oil and gas wells, after complaining in a similar case brought in 2009 that they were being hurt by below-market prices for Chinese products. The latest case, if successful, would be a “landmark record win for the U.S. steel industry” because it would create a defense against imported oil-pipe products, said Michelle Applebaum, managing partner at consultant Steel Market Intelligence in Chicago. For more information please contact HBW Resources.
 
Argentina
Capex SA, the Argentine natural gas and power producer, will drill its first shale well this month, Chief Financial Officer Claudia Biasotti said.  The well will be in the company’s Agua del Cajon gas field, part of the VacaMuerta shale formation in Neuquen province. Capex has an agreement with Houston-based Halliburton Co. (HAL), for the hydraulic fracturing of 11 wells. Capex is also seeking to boost the price at which it sells newly discovered gas to the government by potentially recreating a power-rate compromise it reached on May 31. Under that agreement, Capex said it wouldn’t sue the government for a decade of frozen rates in exchange for a higher electricity tariff. The company is holding talks with the Argentine government about a similar deal that may triple the price it gets for the new gas.
 
Australia
Ireland-based Falcon Oil & Gas Ltd. reported that Hess Australia (Beetaloo) Pty Ltd. (Hess) has forfeited its rights to earn 62.5 percent in three of the permits in northern Australia’s Beetaloo Basin as it did not commit to drilling the five wells by the agreed deadline of 10 p.m. on June 28. Hess was granted the rights to farm-in to the three permits in accordance with the Participation Agreement of April 28, 2011. This was amended Aug. 2, 2012 to give Hess more time to make a decision on its drilling commitment in the Beetaloo permits. Falcon’s Board rejected a late request by Hess to defer the election date again. Falcon owns the four exploration permits covering approximately 7 million acres (approximately 28,000 square kilometers) in the Beetaloo Basin. RPS Energy, in its independent Competent Person’s Report dated Jan. 1 estimates gross un-risked recoverable prospective resource (play level) potential of 162 trillion cubic feet of gas and 21,345 million barrels of oil (P50) for Falcon’s Beetaloo Exploration Permits.
 
China
China is reconsidering its most recent Five-Year Plan’s target for natural gas because of the challenges in developing shale gas resources, according to a China energy sector source. The 12th Five-Year Plan for the world’s second-biggest economy set ambitious targets for domestic natural gas, according to The 2013 China Greentech Report: China at a Crossroads. From a baseline of contributing 4 percent of China’s energy mix in 2010, the plan called for natural gas to provide 8 percent of the mix in 2015 and 10 percent in 2020.
 
Global oilfield services company Schlumberger has announced the official opening of the Schlumberger Reservoir Laboratory in Chengdu, China. The 32,000 sq. ft. facility will offer rock analysis services to support expanding exploration activity in unconventional shale plays and is the newest addition to the Schlumberger global network of reservoir laboratories. The laboratory offers an integrated suite of petrophysical and geomechanical services to help customers improve hydrocarbon recovery and maximize production throughout the life of their reservoirs. For more information please contact HBW Resources.
 
Indonesia
New Zealand Oil & Gas indicated that the rig used to drill the Parit Minyak-2 (PM-2) exploration well, located in the Kisaran PSC in onshore Sumatra, is being moved to the Parit Minyak-3 (PM-3) drill site. Drilling at PM-3 is expected to begin before the end of July. Meanwhile, fracture stimulation of the Pemantang 4 formation in the PM-2 well is scheduled for late August/September 2013.
 
Lithuania
Dalia Grybauskaitė, president of Lithuania, spoke during the EU summit last week, and when asked about shale gas, said she believes that the US will soon start exporting cheap shale gas which will mean that “the gas sector will look different and we, Europeans, need to be prepared for it because today energy prices in Europe are absolutely uncompetitive. We are paying a lot and this jeopardizes our recovery and development. We need to invest into interconnecting ourselves and into the security and diversification of supply. This means also to be able to accept liquid gas from anywhere, from Norway or the United States,” she said, adding that “we don’t want to be dependent on Russian supply, for example.” She also said that she realizes that there are concerns over the safety of fracking, but it is essential to do so in order to find out what the true potential of shale gas in the country is: “To not know what kinds of resources we have ourselves is a huge and a very costly mistake.”In May it was reported that the Lithuanian parliament had amended its shale exploration laws which now require an environmental impact study, limited use of radioactive and toxic materials and rules for waste storage.
 
Mexico
The U.S. shale gas boom is shaping up to be an important competitive advantage for manufacturers – in Mexico. U.S. natural gas exports to Mexico hit a record last year, helping hold down the country’s energy costs as its industry grew rapidly. Planned new pipelines that will enable further rapid growth in imports from the U.S. will strengthen and lock in that advantage, and help to give Mexico a competitive edge over other emerging economies for as long as North American shale production remains strong. China’s manufacturing labor costs overtook Mexico’s last year because of its high rates of wage inflation, and its energy costs are also significantly higher. By 2015, China’s total manufacturing costs will be about 95 per cent of US levels, with gas contributing about 4 percentage points of that, while Mexico’s will be just 89 per cent, with gas at just 1 percentage point, according to new research from the Boston Consulting Group.
 
Poland
San Leon Energy has announced that it will start the process of fracking its first well in the Polish Baltic Basin for shale gas on 29th June and expects to share results with the market by the middle of August. According to chief executive Oisin Fanning, “I think this is a very key summer for Poland. I think by the time the summer’s finished I’d be surprised if you don’t see 10 to 15 fracks done at least.” He said that that a vertical frack has the added advantage of costing about a third of the price of a horizontal frack, and gives an idea of flow rates. For more information please contact HBW Resources.
 
Russia
Russian President Vladimir Putin called on gas exporting countries to come up with a single pricing mechanism and resist EU market rules. The Gas Exporting Countries Forum meetings are designed to group the natural gas producers into a tight-knit community of nations resembling the OPEC oil cartel. Putin said that it was imperative for the countries to defend the practice of tying gas prices to those of oil and fighting the more temperamental nature of the spot market. He also defended long-term contracts that bind clients to purchase gas within a specific price range for a number of decades and which Russia has recently been forced to abandon under pressure from some European states.EU nations in particular abhor the link between the price of oil and gas because of the expanding supplies of the latter that have come in recent years thanks to the booming liquified natural gas (LNG) market.
 
Scotland
The only fracking licenses for gas extraction in Scotland are going to be dropped. Australian-owned Dart Energy is in discussions with the Scottish Environment Protection Agency over ending its permits for two sites near Canonbie in Dumfries and Galloway. That would mean that, in contrast to England, no hydraulic fracturing to extract underground shale gas would be allowed in Scotland. Huge shale reserves were identified across northern England last week by the British Geological Survey, with strong backing from the Westminster government. Abandoning fracking in Scotland could help pave the way politically for Dart’s plans to exploit coal-bed methane using other techniques at Airth, near Falkirk, and at Canonbie, where the company is working with the Duke of Buccleuch’s estate.
 
Turkey
Turkey’s Energy Minister TanerYıldız, said it would be another 7 years before the country can exploit its shale gas reserves as it can take anywhere between 3-15 years to study the feasibility of a shale project as well as to garner enough international investments. He also said that the ministry is planning on sending a committee to North America to learn about the process of shale development while also preserving the environment.
 
Ukraine
JKX Oil & Gas reported Tuesday that it has started its multi-stage frac operation on well R-103 on its Rudenkovskoye license in Poltava, Ukraine. The well was drilled to a total depth of 15,225 feet into the Rudenkovskoye Devonian sandstone reservoir with a horizontal section of just over 3,280 feet at a true vertical depth of 11,975 feet, according to JKX. The operation, which consists of nine stages, is expected to take around 40 days to complete, with initial flow expected in mid-August. JKX said that Schlumberger, the frac contractor, plans to inject more than 1,200 tons of proppant, supported by up to 35,000 barrels of frac fluid.
 
United Kingdom
package of community incentives were unveiled by the government– designed to overcome sometimes strong local opposition to “fracking”, the technique that has unlocked vast reserves of shale gas in the US. Shale companies will pay communities £100,000 per well where fracking takes place and 1 per cent of revenues once production starts. Ministers said new guidelines would be issued on the planning and permitting regime to make the approval process for fracking clearer and more streamlined. It also launched a consultation on tax incentives to encourage shale exploration. For more information please contact HBW Resources.
 
London Mayor Boris Johnson said he’s open to fracking for gas under the U.K. capital to meet the city’s demand for energy.  The headroom between energy supply and demand will drop to just 2 percent in two years, which will force some industries not to operate at peak times, Johnson said. The U.K. government said June 27 that shale-gas fields in northern England are potentially big enough to meet demand for 47 years. The countryside south of Britain’s biggest city may hold 700 million barrels of recoverable shale oil, according to the U.S. Energy Information Administration. Johnson said, “It is time for maximum boldness in energy supply.” He added, “If reserves of shale can be exploited in London we should leave no stone unturned, or unfracked, in the cause of keeping the lights on.”
 
The ‘Unconventional Gas Conference – Minimising Environmental Impact, Moving Development Forward’ is a one-day shale gas conference and networking event which will take place on September 26th, 2013, in London at an undisclosed hotel in Russell Square, central London. For more information on the event, please check out the events brochure.
 
Additional Information
 
For additional information, please contact Bo Ollison with HBW Resources.  His contact information is below.
 
Bo Ollison
HBW Resources
2211 Norfolk Street, #410
Houston, TX 77098
Tel: 713-337-8810
E-mail:bollison@hbwresources.com
Web:http://www.hbwresources.com
Twitter: @BoOllison
 
Contact Information
 
If you have any general questions, please contact us anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report, the HBW Greenfield Offshore Energy Report, the Forsgren Environmental Report, and daily updates and new Member profiles can be viewed at the new Intelligence Tab on the HBW Resources website at: http://hbwresources.com/intelligence/.  Hope you all have a great day!
 
Thanks,
 
Michael Zehr
HBW Resources
1666 K Street, NW, Suite 500
Washington, DC 20006
Direct: 202-429-6081
Cell: 202-277-3927
E-mail: mzehr@hbwresources.com
Web: http://www.hbwresources.com
Twitter: @mzehrhbw