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 

Advertisements

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
 

Today in Washington: HBW Resources Daily Energy & Politics Update

Tuesday in Washington:


 
Congress Goes on Recess:

After a virtual torrent of scandals and investigations, the House and the Senate will not be in session this week.   Before leaving town, the House passed H.R. 3, legislation expediting the approval and construction of the Keystone XL pipeline.  The House also passed llegislation allowing power plants the flexibility to continue operating to maintain grid reliability even if that requires violating certain environmental regulations.  The Senate continued its work on the Farm Bill.  The work on the Farm Bill will continue when the Senate returns, and the House is expected to take up a number of other energy related measures to push for greater domestic production in upcoming weeks.
 
Other Items of Interest:
 
DOI Signs Agreement with Pacific Northwest States on Energy Infrastructure:  Secretary of the Interior Sally Jewell signed a Declaration of Cooperation with the States of Oregon and Washington to expedite the review and permitting of energy generation, power transmission and other vital infrastructure development in the Pacific Northwest. The agreement establishes a pilot Pacific Northwest Regional Infrastructure Team to more efficiently coordinate the permitting processes for infrastructure. The infrastructure team will focus on a variety of projects, including renewable energy generation, electricity transmission, broadband, pipelines, ports and waterways, and water resource development that are proposed in the states.
 
Senate Forum Considers Best Practices for Natural Gas Development:  The Senate Energy and Natural Resources Committee held a forum on best practices for natural gas development.  The members of the committee were joined by leaders in the oil and gas industry, state regulators, federal official and representatives of the environmental community.  The participants discussed efforts to improve operations to safeguard water resources and minimized GHG emissions from development.  The dispute over whether hydraulic fracturing had polluted ground water prompted Sen. Landrieu to request documentation from all the people around the table to substantiate their claims.  Another interesting issue discussed was the use of FracFocus to disclose chemicals used for hydraulic fracturing with participants seeming to agree that some sort of federally supported third party audit of data submitted would help build trust.
 
Senator Vitter Introduces Rigs to Reefs Bill: Senator David Vitter (R-LA) introduced S. 1079, the Artificial Reef Promotion Act, which would increase the utilization of decommissioned Gulf platforms as artificial reefs, as part of the Rigs to Reefs program. The Artificial Reef Promotion Actrequires that twenty new reef planning areas be established after a year of enactment, including six off each of the coasts of Texas and Louisiana, three off the coasts of Mississippi and Alabama, and five off of the coast of Florida. Currently, of the approximately 2,946 production platforms in the Gulf of Mexico, 813 of them have been identified by the Bureau of Safety and Environmental Enforcement as fitting the criteria for use as artificial reefs. Over the last forty years, 13 percent of decommissioned platforms have been placed in the Rigs to Reefs program, leaving the rest to be decommissioned in a lengthy and expensive process that disturbs the existing ecosystems. 
 
Senators Urge President Not to Tie Keystone XL Approval to Climate Change Efforts: Following the House’s approval of legislation expediting the approval and construction of the Keystone XL pipeline, Senator Barrasso (R-WY) authored a letter with two dozen Senate Republicans expressing concern about some efforts to tie the decision on the pipeline to other climate/carbon related policy initiatives.  The other Senators signing the letter included Murkowski, Vitter, McConnell , Cornyn, Thune, Blunt, Moran, Inhofe, Sessions, Hatch, Johnson (WI), Cruz, Isakson, Boozman, Chambliss, Burr, Coats, Enzi, Scott, Wicker, Risch, and Johanns.
 
Ollison Hydraulic Fracturing Report: The report provides a summary of all major activities at the state, federal, and international levels that could impact the use of hydraulic fracturing for oil and gas development.
 
Greenfield Offshore Energy Report:  The report provides a summary of all major regulatory activities that could impact further development of offshore oil and gas resources.
 
Important Events and Hearings: 
 
US Energy Association Annual Membership Meeting and Policy Forum: On May 30th at 11 AM at the National Press Club, the United States Energy Association (USEA) holds its annual membership meeting and public policy forum. Acting Assistant Energy Secretary for Fossil Energy Christopher Smith; Federal Energy Regulatory Commission (FERC) Commissioner Philip Moeller; U.S. Agency for International Development Assistant Administrator for Africa Earl Gast; Karl Rose, director of policy and scenarios at the World Energy Council; Jim Rogers, CEO of Duke Energy; Tom Kuhn, president of Edison Electric Institute; Walter Howard, CEO of Westinghouse Plasma Corporation; Sheila Hollis, partner at Duane Morris LLP; Jack Futcher, president of Bechtel Oil, Gas & Chemicals Inc.; Javier Humberto Estrada of the Mexico Department of Energy; Anita Decker, chief operating officer at Bonneville Power Administration; Vicky Bailey, principal at BHMM Energy Services LLC; Greg Aliff, vice chairman and senior partner at Deloitte & Touche LLP; and Jun Wyeon Byun, vice president and director of Korea Electric Power Company, will be participating.  Additional information about the event can be found here
 
Small Scale LNG Webinar:  On May 30th at 2 PM, Pace Global will hold a webinar, on “Small Scale LNG (Liquid Natural Gas): Why It Works,” on efforts by infrastructure developers to permit and construct LNG export capacity. Todd Thurlow, vice president of Pace Global, will lead the discussion.  Webinar information is available at https://www1.gotomeeting.com/register/481715209.
 
New Member of the Day: US Rep. Marc Veasey (D-TX)

Committee Assignments: Armed Services and Science
 
Contacts:
Chief of Staff: Jane Hamilton
Legislative Director: Chris Kelley
Twitter: @RepVeasey
 
Experience: Rep. Veasey grew up in Fort Worth, living at his grandmother’s house with his mother after his parents divorced. He graduated from Texas Wesleyan University in Fort Worth with a degree in mass communications. He represents a newly drawn district stretching from Fort Worth to Dallas. He told voters that in Congress he wants to focus on education because “that is the key to everything.” If Texas students graduated at the national average, 1 million new jobs would be created in the state by 2030, he said. He worked for an advertising agency and was a substitute teacher. After volunteering in the office of Democratic Representative Martin Frost for a summer, he got a job with Frost as a field representative in the lawmaker’s Dallas-Fort Worth region. He was elected to the TX House in 2004 and re-elected three times. While serving in the TX legislature, he took the lead on certain technology-related issues in the TX House and served on the National Conference of State Legislatures’ committee on technology.
 
Importance: Rep. Veasey is a hard working, progressive individual with an eye towards seeking compromise middle ground positions to move legislation forward. He serves on both the Armed Services Committee and the Science Committee, which puts him in a position to pursue policies aimed at guiding both defense and research policies in the Congress to benefit both service members and academic institutions. Although not yet 40 years old, Representative Veasey has over a decade of governmental experience as a staffer for a former senior member of the United States Congress. This gives Representative Veasey a unique understanding of how Texas can partner with the Federal government to serve the needs of his constituents.
 
If you have any questions, please give me a call anytime. Previous updates and Member profiles can be reviewed at: http://www.mzehrhbw.wordpress.com. Hope you have a great day!
 
Thanks,
 
Michael Zehr
HBW Resources
1666 K Street, NW, Suite 500
Washington, DC 20006
Direct: 202-429-6081
Cell: 202-277-3927
E-mail: mzehr@hbwresources.com
Twitter: @mzehrhbw
 

HBW Resources Ollison Fracking Report

HBW Resources: Ollison Fracking Report

rig-wind-river-537x358

http://us6.campaign-archive1.com/?u=1714be82d08a458dd7c357505&id=ccdf9711ff&e=f89ea1c843

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.

National
During his recent confirmation hearing, Dr. Ernest Moniz when asked about hydraulic fracturing, said that the shale plays in different areas of the country all have different characteristics and that local/state guidance on these will continue to be very important.  He said industry best practices are needed and are being implemented in many areas.  He said DOE’s role is limited in this area given primary oversight and regulation setting will be conducted by the EPA, but DOE could play an important role in R&D involving integrated waste water treatment, reuse, and storage.

The Obama administration is quietly advancing a proposal that would permit wastewater from hydraulic fracturing to be transported on barges, in what could be a bellwether for future White House policy toward fracking. The proposed plan was drafted by the U.S. Coast Guard and will be considered by the White House Office of Management and Budget as to whether or not to push it forward as a proposed rule.

The EPA’s Science Advisory Panel will be hosting a public meeting on May 7-8, 2013 in Arlington, VA to provide a progress report on potential impacts on drinking water resources. EPA will also be hosting a teleconference on May 16, 2013 to discuss the progress.

The Potential Gas Committee, a research panel based at the Colorado School of Mines, stated that the amount of natural gas that is technically recoverable in the U.S. hit a record estimate of 2,384 trillion cubic feet at the end of 2012. This is the highest resource evaluation in the Committee’s 48-year history, exceeding the previous high assessment (from 2010) by 486 Tcf. Most of the increase arose from new evaluations of shale gas resources in the Atlantic, Rocky Mountain and Gulf Coast areas.

The Environmental Protection Agency (EPA) hosted a webinar on Monday, March 25 for a technical workshop on analytical chemical methods related to its ongoing hydraulic fracturing study and to provide a technical summary of the February 25, 2013 roundtable hosted in Research Triangle, NC. The slide presentation is now available.

States 

Alaska
Alaska’s Oil and Gas Conservation Commission began two days of hearings on proposed new regulations on hydraulic fracturing. The petroleum industry said they would be among the toughest in the nation, if adopted. Among the recommendations would be requirements to submit detailed information about hydraulic fracturing before it was done, and on the composition of the fracturing fluids with no trade secret protection.

California
The South Coast Air Quality Management District, which regulates air quality in Southern California, approved rule, 1148.2, requiring oil and gas companies to notify authorities before drilling and report air pollutants emitted during extraction. Drillers must also disclose the chemicals used in fracking fluid, which is injected into wells at high pressure to break up rock formations that contain oil and natural gas.

The California Department of Conservation and its Division of Oil, Gas and Geothermal Resources will host will host events to explain California’s draft regulations on hydraulic fracturing in Santa Barbara, CA on April 19 and Monterrey, CA on April 30.

According to U.S. Magistrate Judge Paul Grewal in California, the U.S. Bureau of Land Management (BLM) violated the National Environmental Policy Act by failing to take the necessary “hard look” at the impact of hydraulic fracturing when it sold oil and gas leases in California.  The case brought by the Center for Biological Diversity involves 2,700 acres of federal land in Monterey and Fresno counties leased by the BLM in 2011. The group had asked Grewal to invalidate the leases, which he declined to do. Instead, he ordered both sides to meet and submit a remedy to him by April 15. Grewal granted the government’s request to throw out claims that the leases violated the Mineral Leasing Act.

The California Senate Natural Resources and Water Committee approved SB 4, sponsored by Sen. Fran Pavley (D, District 27), with a 6-2 vote. The bill would mandate water quality testing and another independent study to address health and safety issues; direct the state’s Division of Oil and Gas and Geothermal Resources to adopt regulations by Jan. 1, 2015 requiring oil companies to disclose what fluids they use in fracking, while providing trade secret protection for the chemical formulas.

Florida
The Fracturing Chemical Usage Disclosure Act, House Bill 743, sponsored by Rep. Ray Rodrigues (R, District ), has cleared all committees – Agriculture and Natural Resources Sub-Committee 11-0; Agriculture & Natural Resources Appropriations Sub-Committee 9-3; State Affairs Committee 10-4; and has been added to the Second Reading Calendar and is heading the House floor.

Illinois
The Perry County Farm Bureau will hold an informational meeting on hydraulic fracturing at 1:30 pm on Tuesday, April 23 at St. Paul’s UCC in Pinckneyville.

HB 2615, Hydraulic Fracturing Regulatory Act, introduced by Rep. John E. Bradley (D, District 117), which would prohibit high volume horizontal hydraulic fracturing operations performed without a permit and would regulate where high volume horizontal hydraulic fracturing operations are proposed, planned, or occurring may be located. The bill has run into to trouble within the legislature. The proposed addition of worker certification provisions, which as currently outlined are not acceptable to the industry. The business community sees the move as labor unions trying to get guaranteed jobs by saying every drilling site needs to have an accredited worker, and worries it could take a couple of years to get new workers certified. As a result, the bill is mired in committee.

New Mexico
Merrion Oil & Gas announced Monday that a joint venture with a Denver-based company, Bill Barrett Corp., to develop the San Juan Basin Mancos Shale formation has been terminated.

New York
set of guidelines for monitoring well water was approved by the Wyoming County Board of Supervisors. The guidelines have been established in the event high-volume natural gas “fracking” projects show interest in the county, said Steve Perkins, director of environmental health for the county’s Public Health Department. They’re meant to give a clear set of recommendations and eliminate confusion.

Oneida County Board of Legislators passed legislation, F.N. 2013-099, placing a county-wide moratorium on any shale gas extraction on county lands. The moratorium would be in effect until any potential long-term impacts of shale gas extraction are identified and addressed. The moratorium passed 21 to five.

Ohio
The number of drilling permits issued in Ohio’s Utica Shale play is close to the 600 mark, with nearly half of the drilling sites in some state of development by oil and natural gas exploration companies. Energy in Depth released an update on drilling permits issued by the Ohio Department of Natural Resources. Of the 581 permitted wells, 281 of them have been developed, including 77 that are in production. Permits have been provided in 22 counties to 26 companies.

Mahoning Valley Coalition for Job Growth and Investment, a coalition of business, labor and political officials was established to defeat a charter amendment that would ban hydraulic fracturing in the City of Youngstown. The group that is driving the charter amendment, Frack Free Youngstown is hoping that voters vote in favor of the ban on May 7, 2013. Frack Free Youngstown is asking voters to vote “Yes” to amend the Youngstown Home Rule Charter, “Shall the Youngstown Home Rule Charter be amended to add a Community Bill of Rights which protects those rights by prohibiting natural gas extraction using hydraulic fracturing, bans the establishment of infrastructures supporting gas production, and bans the storage, transportation or depositing of gas drilling waste products within the City?” The new business coalition wants businesses to know that Youngstown is open for business and is concerned with the language of the proposed charter amendment.

Halcon Operating Co., a division of Halcon Resources, has secured a permit to drill a new horizontal well in Jackson Township in Mahoning County.

Oklahoma
SB 78, introduced by Rep. John Trebilcock (R, District 98) and Sen. Brian Bingman (R, District 12) creates the Horizontal Well Development Act. The measure modifies the 2011 Shale Reservoir Development Act by authorizing the Oklahoma Corporation Commission to allow multi-unit horizontal drilling in targeted reservoirs, in addition to shale. The measure defines “targeted reservoir” and clarifies allocations for multi-unit horizontal wells. It also allows owners to participate in drilling and development of subsequent wells that are covered under a pooling order under certain circumstances. Passed Senate 44-0 on March 13, 2013 and passed Energy & Aerospace Committee on April 3, 2013.

Pennsylvania
A number of bills, Marcellus Works Package, are pending in the House. Within the House Finance Committee, House Bill 301, sponsored by Rep. Stan Saylor (R, District 94) would provide for a natural gas fleet vehicle tax credit; House Bill 305, sponsored by Rep. Gordon Denlinger (R, District 99) would amend the Tax Reform Code of 1971 by providing $5 million for a natural gas corridor tax credit andHouse Bill 309, sponsored by Rep. Seth M. Grove (R, District 196) would also amend the Tax Reform Code of 1971, by providing a natural gas vehicle tax credit.  The House Environmental Resources and Energy Committee will be considering five bills this week. House Bill 302, sponsored by Rep. Dan Moul (R, District 91) would establish the Keystone Transit Program and provide a transfer of $5 million in funds from the Oil and Gas Lease Fund to the Department of Environmental Protection for a competitive grant program for the transition of small mass transit bus fleets to compressed natural gas. House Bill 303, sponsored by Rep. Katherine M. Watson (R, District 144) would establish the Clean Transit Program and provide a transfer of funds from the Oil and Gas Lease Fund to the Department of Environmental Protection for a $7.5 million loan program for the transition of large mass transit bus fleets to compressed natural gas. House Bill 306, sponsored by Rep. Tina Pickett (R, District 110) would amend the Alternative Fuels Incentive Act of 2004 by establishing the Keystone Fuel Incentive Fund, authorize grants to promote the use of compressed natural gas and impose new responsibilities on the Department of Environmental Protection. House Bill 307, sponsored by Rep. Eli Evankovish (R, District 54) would amend the Air Pollution Control Act of 1960 to provide for the Clean Vehicles Program. House Bill 308, sponsored by Rep. Stan Saylor (R, District 94) which would amend the Air Pollution Control Act of 1960 to further provide definitions and disposition of fees, fines and civil penalties and would establish the Keystone Vehicle Program.

South Dakota
The South Dakota legislature’s Rules Review Committee approved, HB 1005, sponsored by Rep. Spencer Hawley (D, District 7) to require companies using hydraulic fracturing to report the chemicals they use to the FracFocus.org website. The rules exempt chemicals that are considered to be proprietary trade secrets. Hydraulic fracturing is rarely used in South Dakota, however, a spokesman from the Department of Environment and Natural Resources said that the state wanted rules to be in place in case development increases. The state only produces 1.6 million barrels of oil per year from fields in the Northwest corner of the state; however, state officials believe that there is the potential for increased natural gas development.

Texas
A new study from the Texas Independent Producers & Royalty Owners Association (TIPRO) shows that Texas leads the nation in oil-and-gas employment and production. TIPRO released its first State of Energy Report, which provides a comprehensive overview of national and state trends in employment, wages and other economic factors by the oil and gas industry. The reports states that Texas accounts for 39% of U.S. oil and gas jobs. Texas’ oil and gas industry employed 379,800 people, including 34,600 new jobs were added in the first half of 2012.

The Texas House Energy Resources Committee debated two bills dealing with recycling water used in hydraulic fracturing. The bills, HB 3537, sponsored by Rep. Roland Gutierrez (D, District 119) and HB 2992, sponsored by Rep. Tracy King (D, District 80) would require the Texas Railroad Commission to develop rules to require the recycling and reuse of hydraulic fracturing water.

West Virginia
West Virginia federal judge asked the state’s Supreme Court to issue an opinion on the unsettled question of whether a horizontal well can legally draw gas from underneath neighboring properties. No clear West Virginia case law exists on the issue. Plaintiff Richard Cain does not own the mineral rights to his land, but argues that the drafter of his 1907 property deed could never have imagined the use of horizontal drilling to extract the minerals. His suit also claims that the developer must pay to use 36 acres of his property for a well pad in order to drill.

Wyoming
State officials are estimating that more than 20,000 new gas wells could be permitted in Wyoming, mostly in the western and central regions. The single largest project is the Continental Divide-Creston proposal, which would see 9,000 new wells in a 1.1 million acre area. Nearly twenty companies would develop the area under a Bureau of Land Management joint project. A final environmental review by BLM should be completed by summer of 2014. Additionally, Encana Oil & Gas will add approximately 8,000 new wells on its acreage in the Moneta Divide and Normally-Pressured Lance fields. Other companies are planning for additional wells in Wyoming’s Sweetwater County, near the Colorado border.

International
A new report by Durham University states that hydraulic fracturing is not a significant mechanism for inducing felt earthquakes. Richard Davies, director of the U.K. University’s energy institute, said in a statement, “the size and number of felt earthquakes caused by fracking is low compared to other manmade triggers such as mining, geothermal activity or reservoir water storage.”

Argentina
Americas Petrogas Inc., Calgary, has said it discovered natural gas by hydraulically fracturing the Los Toldos I block in the Vaca Muerta shale formation. It said it was able to produce as much as 3.2 million cubic feet of natural gas during initial production tests. Interests in the Los Toldos blocks are Americas Petrogas 45%, ExxonMobil Corp. 45%, and Gas y Petroleo del Neuquen 10%.

France
France is pushing ahead with plans to harness geothermal energy from smoldering rock deep in the earth’s crust using drilling methods the oil industry says are like hydraulic fracturing, or fracking, which France outlawed in 2011. Environment Minister Delphine Batho awarded two geothermal exploration licenses in February and said 18 more are in review. Some will permeate rock using a process called “stimulation” that blasts acid and water into fissures to release volcanic heat.

India
India’s Ambassador to the United States, Nirupama Rao wrote an op-ed in the Wall Street Journalfocused on how energy, particularly liquefied natural gas (LNG) can strengthen the relationship between the two countries and expand their economies. “A boost in LNG exports would have many positive effects on both the U.S. and Indian economies. For the U.S. it would help create thousands of jobs and an expanded revenue stream for the federal government. For India, it would provide a steady, reliable supply of clean energy that will help reduce our crude oil imports from the Middle East and provide reliable energy to a greater share of our population. For both countries, which are committed to environmental sustainability, increasing the use and transport of LNG globally will help put into greater use one of the cleanest energy sources in the world.”

Russia
Russia’s oil exports could plunge in the coming decades as the U.S. ramps up output of shale oil, a group of government-linked experts said, in an unusually frank admission that the North American energy boom poses a threat to Russia’s hydrocarbon-fueled economy. The report by the Russian Academy of Sciences’ Energy Research Institute said the growing output of shale oil, particularly in the U.S., could also threaten Russia’s crude oil exports.

Spain 
Lawmakers in Spain’s northern Cantabria region unanimously voted to ban hydraulic fracturing on environmental concerns, shooting down the central government’s hopes for a project to boost jobs in a region believed to be rich in shale gas.

Ukraine
U.S. Ambassador to Ukraine John Tefft was quoted by National Radio Co. of Ukraine as saying hydraulic fracturing concerns are justified, but only if shale campaigns are reckless. The practice is safe if done correctly. Ukraine is among the Eastern European countries eyeing shale gas reserves. In January, Shell Chief Executive Officer Peter Voser signed a $10 billion contract to explore Ukrainian shale.

State Legislative Update
Please see linked spreadsheet for a listing of state legislation dealing with hydraulic fracturing.

Additional Information
For additional information, 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

If you have any questions, please contact me anytime. Previous versions of the HBW Ollison Fracking Report, daily updates and new Member profiles can be viewed at: http://www.mzehrhbw.wordpress.com. Hope you all have a great day!

Thanks,

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

Wednesday in Washington

Wednesday in Washington:

Image

Both the House and Senate are in session today.  Senator Reid filed cloture on gun control legislation now before the Senate last night, setting up a potential vote and test of Republicans’ willingness to filibuster the measure by Thursday.  A compromise is rumored to be close between Senator Manchin and Senator Toomey to avert the filibuster, but the details of the compromise are not yet available.  Regardless of Senate action, the House remains unlikely to take up the measure.

The President will release his budget blueprint today, setting up another round of fiscal talks on Capitol Hill.  The annual budget release, which is about two months later than usual and follows action by both the House and Senate for the first time in over 90 years, kicks off annual budget hearings when Secretaries and other administration officials will be called before congress to discuss the plans. 

Today, the House will meet at 10:00 AM for the morning hour and 12:00 PM for legislative business with first votes expected between 1:30 and 2:00 PM and last votes expected between 5:00 and 6:00 PM.  The House will be considering H.R. 678, the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act sponsored by Rep. Scott Tipton (R-CO).

Highlights from Moniz Testimony: The testimony had many moments of interest and it appears that Dr. Ernest Moniz has done a very good job meeting with and securing the support of the majority of Members on the Committee. 

 LNG

His answers on LNG exports seem to indicate that additional delays in export licenses could be encountered, even though he believes in data-based analysis.  He was questioned about LNG exports by a number of Members.  When Chairman Wyden asked him about the validity of current studies, Moniz said he would want to evaluate current data with regional impact information.  When asked by Barrasso about LNG exports to NATO allies, he stated that he believes US production of low-cost natural gas is already having an impact on the Russians and others by freeing up supplies that would have been headed to the US.  Said he favored evaluating LNG exports as part of a Quadrennial Energy Review process that has been endorsed by many Members of the Committee and had been authored by Sen. Pryor of Arkansas.  Given previous uses of additional studies to delay decisions by the administration, this proposal of including LNG determinations in a proposed QER would indicate that delays are likely.

 Low Carbon Economy

Moniz was also repeatedly asked about his thoughts on current DOE expenditures for renewable energy projects and efforts to lower carbon emissions.  He stated that he supports continued funding for energy technologies that are less carbon intensive, but added that he believes more focus on R&D to lower the cost of renewable energy sources should be pursued as well as funding for nuclear energy and carbon capture and sequestration to lower carbon emissions from existing generating sources.  He said that enhanced oil recovery using CO2 is an area that has the most immediate promise of producing more domestic energy sources while also providing a near-term carbon sequestration option.

Hydraulic Fracturing

Moniz said that the shale plays in different areas of the country all have different characteristics and that local/state guidance on these will continue to be very important.  He said industry best practices are needed and are being implemented in many areas.  He said DOE’s role is limited in this area given primary oversight and regulation setting will be conducted by the EPA, but DOE could play an important role in R&D involving integrated waste water treatment, reuse, and storage. 

Nuclear Power

Moniz said he supports the findings and recommendations of the Blue Ribbon Commission.  He believes that consent-based siting of new storage facilities should be pursued along with linking interim storage determinations with progress on long-term disposal plans.  He said that technology innovations and cost advantages of small modular reactors are one of the most exciting areas of nuclear power generation potential since they could have both cost and safety advantages moving forward.

Other Hearings To Watch:

Automotive Hearing: Today, the Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade will hold a hearing on “Our Nation of Builders: Powering U.S. Automobile Manufacturing Forward.” Link: http://energycommerce.house.gov/hearing/our-nation-builders-powering-us-automobile-manufacturing-forward-0.

Keystone XL Hearing: Today, the Energy and Commerce Subcommittee on Energy and Power will hold a hearing on “H.R. 3, the Northern Route Approval Act.”Link: http://energycommerce.house.gov/hearing/hr-3-northern-route-approval-act.

Gina McCarthy Nomination Hearing: On April 11th, the Senate Environment and Public Works Committee will hold a full committee hearing on the nomination of Gina McCarthy to be Administrator of the Environmental Protection Agency.  Link: http://www.epw.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=d71fd4b6-ce77-3a98-46a0-fb02b0cae0ed.

Energy Opportunities in Latin America Hearing:  On April 11th, the House Foreign Affairs Committee Western Hemisphere Subcommittee will hold a hearing on “Energy Opportunities in Latin America and the Caribbean.”  Link: http://foreignaffairs.house.gov/hearing/subcommittee-hearing-energy-opportunities-latin-america-and-caribbean.

Coal Ash Hearing:  On April 11th, the Energy and Commerce Subcommittee on Environment and the Economy will hold a hearing on the Coal Ash Recycling and Oversight Act.  Link: http://energycommerce.house.gov/hearing/coal-ash-recycling-and-oversight-act-2013.

Nuclear Waste Hearing: On April 11th, the House Appropriations Committee, Energy and Water Development, and Related Agencies Subcommittee will hold a hearing on “Oversight Hearing: Nuclear Waste Programs and Strategies.”  Link: http://appropriations.house.gov/calendar/eventsingle.aspx?EventID=325997.

Energy Consumers Relief Act Hearing: On April 12, the Subcommittee on Energy and Power will hold a hearing on the Energy Consumers Relief Act.  Link: http://energycommerce.house.gov/hearing/legislative-hearing-energy-consumers-relief-act-2013.

Ethanol Hearing: On April 11th, the House Science Committee will meet to consider H.R. 875, to provide for a comprehensive assessment of the scientific and technical research on the implications of the use of mid-level ethanol blends, and new legislation to amend the Environmental Research, Development, and Demonstration Authorization Act of 1978 to provide for Scientific Advisory Board member qualifications, and public participation.  Link: http://science.house.gov/markup/full-committee-markup-hr-875-hr.

Other Items of Interest:

 New Natural Gas Reserves Number Increases: The new recoverable reserves number is the highest in the 48 years the Potential Gas Committee, a nonprofit organization of sector experts hosted by the Colorado School of Mines, has been issuing its evaluations. The last record number was issued in 2010 as the full scale of the impact of hydraulic fracturing technology was just making itself felt across the entire economy, and the Committee’s perceived uncertainty about how accessible reserves would actually be following the issuance of that record number caused consternation that industry had been overselling the potential of the fuel. Additional information can be found here:  http://energy.aol.com/2013/04/09/natural-gas-reserves-estimates-soar-potential-gas-committee.

Natural Resources Committee Announces Hearing on Energy Production on Federal vs. State Land: The House Natural Resources Committee will hold a Full Committee oversight hearing on Wednesday, April 17th to examine the difference in energy production and permitting on federal lands versus state and private lands. Total federal oil production is down 7 percent since the President took office and the total onshore acreage leased for the last four years is the lowest in over two decades.  Additional information can be found here: http://naturalresources.house.gov/news/documentsingle.aspx?DocumentID=327116.

Arctic Report to the President:  Last week, the DOI released a report entitled Managing for the Future in a Rapidly Changing Arctic.  The report is based on input from a wide range of Alaska stakeholders. Accompanying the report is a short video from Deputy Secretary David Hayes providing the history and a few highlights from the report.  The video can be viewed here: http://www.doi.gov/news/video/arcticreport.cfm.  The report itself can be viewed here: http://www.doi.gov/news/upload/ArcticReport-03April2013PMsm.pdf

Legislative Hearing Planned for House Natural Resources Public Lands and Environmental Regulation Subcommittee:  The subcommittee will hold a legislative hearing on April 16th to evaluate a number of pieces of legislation including:  H.R. 250 (Chaffetz), to amend the Antiquities Act of 1906 to place additional requirements on the establishment of national monuments under that Act; H.R. 382 (Foxx), To provide for State approval of national monuments; H.R. 432 (Amodei), to prohibit the further extension or establishment of national monuments in Nevada except by express authorization of Congress;  H.R 758 (Stewart), to prohibit the further extension or establishment of national monuments in Utah except by express authorization of Congress;  H.R. ___ (Pearce), to prohibit the further extension or establishment of national monuments in New Mexico except by express authorization of Congress; H.R. ___ (Daines), to prohibit the further extension or establishment of national monuments in Montana, except by express authorization of Congress;  H.R. ___ (Labrador), to prohibit the further extension or establishment of national monuments in Idaho, except by express authorization of Congress;  H.R. ___ (Bishop), to ensure that the National Environmental Policy Act of 1969 applies to the declaration of national monuments; and  H.R. 885 (Doggett), to expand the boundary of San Antonio Missions National Historical park, to conduct a study of potential land acquisitions.  Additional information can be found here: http://democrats.naturalresources.house.gov/hearing/subcommittee-public-lands-and-environmental-regulation-legislative-hearing-3.

Senator Boxer and Rep. Markey Call on NRC to Complete Investigation before Restart Decisions are Made for San Onofre Nuclear Plant:  In a letter to the NRC, Senator Barbara Boxer (D-CA) and Rep. Ed Markey (D-MA) called on the Nuclear Regulatory Commission’s (NRC) Chairman, Dr. Allison Macfarlane, to immediately confirm that NRC will “take no action that could lead to any restart of the San Onofre nuclear power plant before the Commission completes its comprehensive investigation and provides a full opportunity for public participation.” A copy of the letter can be viewed here: http://www.epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=63086e5d-85d1-4dad-8bcb-68589825aac2

Vitter Releases: Eye on the EPA: Renewable Fuels Standard & The Problems That Come with It: Senator Vitter released a document yesterday criticizing aspects of the RFS for leading to higher energy prices for consumers in advance of Gina McCarthy’s nomination hearing to lead the US EPA.  Discussions, both pro and con of the RFS have been mounting in recent months, and some of these issues are likely to come up during the nomination hearing for McCarthy. A copy of the document which explores costs, the Tier 3 rule, RINS fraud, and blendwall issues can be viewed here: http://www.epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=97856df2-12d7-428b-8fc8-fda8319ca0e5.

New Member of the Day: US Senator Martin Heinrich (D-NM)

 Image

Committee Assignments: Energy and Natural Resources, Joint Economic Committee, Intelligence

 Contacts:

Chief of Staff: Steve Haro
Legislative Director: Jude McCartin
Legislative Assistant (Energy): Maya A. Hermann
Twitter: @Heinrich4NM

Experience:

While in the House, Heinrich served on the Armed Services and Natural Resources committees representing Kirtland Air Force Base and Sandia National Laboratory. Heinrich was president of Albuquerque’s city council and natural resources trustee for New Mexico. With a background in science and engineering, he has worked and advocated for renewable energy source throughout his entire career.

Importance:

Senator Heinrich is a strong proponent of renewable energy and voted with his party over ninety percent of the time while in the House. He is a supporter of Climate Change legislation and an advocate for science-based regulation. His election was celebrated by environmentalists who believe that he could be one of their strongest advocates in the Senate given his background and experience with wildlife restoration. His position on the Natural Resources Committee provides him with the opportunity to help shape energy and environmental policies coming out of the Senate. The Committee led by Senator Ron Wyden is expected to allow greater flexibility and inclusion of other Member’s priorities than under the last two chairman which could give Sen. Heinrich ample opportunity to pursue his objectives.

If you have any questions, please give me a call anytime. Previous updates and Member profiles can be reviewed at: http://www.mzehrhbw.wordpress.com. Hope you have a great Wednesday!

Thanks,

Michael Zehr

HBW Resources
1666 K Street, NW, Suite 500
Washington, DC 20006
Direct: 202-429-6081
Cell: 202-277-3927
Twitter: @mzehrhbw