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Entries for category:
United States
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May 23, 2013
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New wastewater study recommends increased data monitoring to prevent groundwater issues
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A review of the scientific literature on hydraulic fracturing wastewater was published in the latest issue of the journal Science suggesting that while "to date the scientific literature provides 'no evidence of severe environmental pollution,'" a dearth of data about the composition of wastewater itself and how it is being treated and disposed of leaves room for environmental concerns, NBC News reports. Researchers for the study concluded that "improved understanding of the fate and transport of contaminants of concern and increased long-term monitoring and data dissemination will help manage these water-quality risks today and in the future." For more, read the full story or purchase the article here.
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Posted by
M. Warnock in
United States
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Permalink
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May 20, 2013
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Feds issue new chemical disclosure rule for drilling on federal lands
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The U.S. Department of the Interior issued a new draft rule for drilling on federal lands last week that requires oil and gas drillers to publicly disclose chemicals used in the hydraulic fracturing process on the database FracFocus.org, The Associated Press reports. The rule was panned by environmentalists who claim it was weakened by the influence of the oil and gas industry, which itself still maintains that federal regulation of any sort is unnecessary when state rules are in place for drilling. There is a 30-day comment period on the proposed rule before being made final this summer, the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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May 09, 2013
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Feds might open Wayne National Forest to coal mining
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Wayne National Forest, which federal officials cleared for hydraulic fracturing last year and then never received any bids to do it, might soon be opened up to coal mining companies, as well, The Columbus Dispatch reports (See our Aug 30, 2012, blog – "Feds say hydraulic fracturing is allowed in Wayne National Forest"). The federal government "owns about 41 percent of the roughly 240,000 forest acres in southeastern Ohio," and is considering leasing 430 to an unnamed company that wants to do underground coal mining. The public has 30 days to comment on the matter. For more, read the full story.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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May 07, 2013
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Report: Ohio lags, but natural gas production is boosting employment
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A report released last week by the Small Business and Entrepreneurship Council (SBE Council) titled, "The Benefits of Natural Gas Production and Exports for U.S. Small Businesses," indicates that a ramping up of Utica shale drilling efforts will likely bring significant job growth to Ohio in the coming years, Tribune Chronicle reports. While overall employment in the U.S. declined by 3.7 percent from 2005 to 2010, significant growth was experienced within the oil and gas industry. The report found that Ohio's oil and gas industry's growth actually contracted 8.6 percent during this time period, but it predicted the state would experience growth similar to that seen in 10 others where natural gas development is a few years ahead. For more, read the full story, press release and report.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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May 02, 2013
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High oil prices drive drillers to explore lesser-known shale formations
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Drillers are using hydraulic fracturing to explore lesser-known shale formations in search of oil and gas that is economically and technologically possible to extract, The Texas Tribune reports. Because drilling a horizontal well can cost millions of dollars and shales can often "hold little oil or gas" or not be "brittle enough for the fracking process to work effectively," the amount of investment in these potential plays is closely tied to the price of oil and natural gas, the article said. For more, read the full story.
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Posted by
C. Montgomery in
United States
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Permalink
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May 01, 2013
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Texas appellate court allows Range Resources to countersue landowner for defamation and business disparagement
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A decision handed down last week by the Second Court of Appeals in Forth Worth, Texas, will allow Range Resources Corp.'s claims for "defamation and business disparagement" to proceed against a landowner who sued the producer for contaminating his water well, Star-Telegram.com reports. Seeking $3 million in damages, Range Resources countersued Steven Lipsky in July 2011 – a month after he sued the company following receipt of an EPA order stating that the company had polluted his water with "dangerous levels of methane and benzene." The EPA withdrew its order in 2012 following a challenge by Range Resources and new evidence from the Texas Railroad Commission regarding the source of Lipsky's well's contamination. Although the court ordered that a number of Range's claims against the Lipskys be dismissed by the trial court, the appellate court let stand the company's claims that Steven Lipsky made "false, misleading, and disparaging statements" that caused the company's reputation to suffer, according to the court's opinion. For more, read the full story and the court's opinion.
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Posted by
D. Gerken in
United States
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Permalink
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May 01, 2013
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Texas landowners seek class action status for royalty payments disputes
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Chesapeake Energy Corp. has faced multiple lawsuits alleging
underpayment of royalties during the past year, but a lawsuit filed by
two Texas royalty interest owners is different because "it seeks class
action status, a rarity for a Texas oil and gas dispute,"
Star-Telegram.com reports. Landowners whose leases specifically prohibit
post-production charges from their royalty payments allege that
Chesapeake is deducting the costs anyway. Since the price of natural gas
prices began a long decline in 2008, producers – "scrambling to hang on
to narrowing profit margins" – began deducting charges that they told
landowners they were allowed to deduct, the article said. This
effectively left royalty owners in charge of determining the accuracy of
their payment statements. Allegedly, for many landowners, extra
deductions from their payments that they contractually did not have to
pay went unnoticed because their royalty stubs do not itemize deductions
and instead list only the "sales price for the gas." For more, read the
full story.
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Posted by
D. Gerken in
United States
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Permalink
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Apr 29, 2013
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Natural gas could fuel the rise of combined heat and power (CHP) systems
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Experts at a gas industry forum hosted by the West Virginia University College of Law last week said that "outdated policies and anti-competitive regulations" are hindering the potential growth of combined heat and power (CHP) systems, Coshocton Tribune reports. CHP, or cogeneration, systems produce electricity by capturing and reusing the heat that is usually wasted by traditional coal-fired power plants. About 80 percent of these systems in the United States are powered by natural gas, but the process only accounts for nine percent of U.S. power generation, the article said. Because prisons, colleges and other institutions "that produce electricity using coal- or oil-fired boilers and heat using separate systems" will soon have to comply with new clean air regulations, Ohio and the U.S. Department of Energy are "conducting a pilot project with CHP," the article said. For more, read the full story.
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Posted by
M. Warnock in
Ohio
United States
West Virginia
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Permalink
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Apr 26, 2013
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Major shippers are adding more natural gas-powered vehicles to their fleets
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In the midst of a long standoff to see what will be invested in and constructed first: the natural gas-powered vehicles or their refueling stations, leading engine manufacturer Cummins this month began shipping liquefied natural gas (LNG) engines to major shippers like Procter & Gamble and the United Parcel Service, The New York Times reports. Although the number of LNG and compressed natural gas (CNG) fueling stations pales in comparison to the 157,000 fueling stations selling gasoline in the United States, companies taking note of these major shippers' switch to natural gas vehicles are working to construct a network of stations across the country. Various states and the federal government are offering tax incentives and grants for "installing natural gas fuel stations and using vehicles fueled by natural gas," but the upfront cost of the conversion is still repelling some fleet owners who fear the savings will be lost if the Obama administration begins exporting natural gas or allows the excise tax credit for the seller of CNG or LNG to expire. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 22, 2013
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ODNR official testifies before U.S. House committee in opposition to federal hydraulic fracturing regulations
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As one of the state officials from Ohio, Texas and Utah who testified last week before the U.S. House Natural Resources Committee, Richard Simmers – chief of the Ohio Department of Natural Resources Division of Oil and Gas Resources Management – said that federal regulation of hydraulic fracturing would amount to an unnecessary "one-size-fits-all approach to oil and gas drilling" and that states are able to effectively, efficiently and economically regulate and respond to their own drilling activities more quickly than the federal government, The Plain Dealer reports. Opponents of this position maintained that the quality of regulation differs greatly from state to state, and that establishing a "uniform oversight over hydraulic fracturing around the country" would provide a consistent standard that would prevent fifty state legislatures from having to "invent the wheel fifty times," the article said. For more, read the full story.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Apr 21, 2013
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IRS specialist provides tax tips on reporting natural resource income
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Jenny Jenkins, an IRS media relations specialist serving Ohio, West Virginia and Pennsylvania, recently posted IRS tips on reporting natural resource income for a online local news community known as the Twinsburg Patch. With links to tax forms, her post offers a straightforward overview of tax rules and requirements related to lease agreements; leases and lease bonuses; royalty payments; depletion deduction; and additional expenses. For more, read the full post.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 05, 2013
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General Electric Co. bets on the shale gas boom
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The General Electric Co. announced this week that it will soon hire up to 125 engineers and scientists to staff a new, $10-million research lab in Oklahoma City dedicated to improving the extraction process for oil and gas deposits, "including hydraulic fracturing and horizontal drilling," Bloomberg reports. GE, who saw oil and gas become its fastest-growing segment with 57 percent growth since 2009, will investigate how to reduce the environmental impact, manage the water usage and meet the electricity needs for drilling operations. In addition to "supplying equipment and services to energy firms," the company is also developing liquefied natural gas-powered locomotives and helping introduce compressed natural gas-powered vehicles to corporate fleets, the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 04, 2013
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Chesapeake says a lack of processing capacity reduces its Utica production significantly
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Interim Chesapeake Energy Corp. CEO Steven C. Dixon, who on April 1 replaced Aubrey McClendon, said that a lack of processing capacity is why Chesapeake's natural gas production in the Utica shale play is only 75 million cubic feet equivalent, The Columbus Dispatch reports. The company has a goal net production of more than 330 million cubic feet of gas equivalent by the end of 2013 – the success of which, he said, will be dependent upon the "timely startup of critical infrastructure at multiple facilities." For more, read the full story.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Apr 02, 2013
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Report links Oklahoma earthquake to wastewater injection wells
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A new report finding a "compelling" link between a magnitude 4.7 earthquake that occurred within a series in Oklahoma in November 2011 and nearby wastewater injection wells is the latest evidence linking seismic activity to underground oil and gas wastewater disposal, The New York Times reports (See the Mar 09, 2012, blog – "Confirmation of link between injection well and recent earthquakes leads to new disposal rules"). The Oklahoma Geological Survey, however, disputes the findings, saying that the data suggest that "the Prague earthquake sequence was the result of natural causes," the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 02, 2013
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Japan pushes for LNG imports from the United States
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After the meltdown of the Fukushima Daiichi nuclear power plant in 2011 led to the subsequent suspension of all nuclear reactors in Japan, the country is now the top liquefied natural gas importer in the world, The Wall Street Journal reports. Because of this, Japan is working to get LNG exports from the United States, but the U.S. has been hesitant to approve any shale gas exports due to concerns that it would raise costs for domestic consumers (See the Dec 22, 2011, blog – "Gas companies and major manufacturers spar over exports"). The proposed arrangement would be "the world's first futures contract for liquefied natural gas," meaning that the price of LNG would be determined "independently from oil," the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 26, 2013
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The motives behind joint ventures among energy companies
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An in-depth article featured on The Motley Fool explores the myriad reasons that energy companies form joint ventures. Devon Energy, for instance, utilizes partnerships specifically to improve capital efficiency and mitigate exploration risk, among other things; Chesapeake Energy recently entered into a foreign joint venture purely for monetary reasons; and Energy Transfer and Enbridge formed a pipeline partnership for the sake of "access and diversification," the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 26, 2013
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Shale drilling puts Williston, North Dakota, on the map
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Nighttime satellite photography from NASA of one of the most rural parts of the United States shows a blaze of activity resulting from shale drilling in North Dakota's Bakken Formation, NPR reports. The lights are not a town, but rigs and natural gas flares from the one hundred and fifty oil companies that altogether are "producing 660,000 barrels a day – double the output two years ago." Aside from illustrating the industry's tremendous influence on a formerly sleepy town, the light also exemplifies the fact that 29 percent of all natural gas extracted in the state is flared off so that drillers can reach the more profitable oil deposits, the article said (See the Oct 03, 2011, blog, "Oil companies flare significant amounts of natural gas produced in North Dakota"). For more, read the full NPR story.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 20, 2013
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Proposed Bluegrass Pipeline would connect Marcellus and Utica shale plays to the U.S. Gulf Coast
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Recently, Houston-based Boardwalk Pipeline Partners and Oklahoma-based Williams announced a joint venture to develop the Bluegrass Pipeline, which would provide "200,000 barrels per day of mixed natural-gas liquids transportation capacity in Ohio, West Virginia and Pennsylvania" to the U.S. Gulf Coast, The Vindicator and Tribune Chronicle report. The plan calls for the construction of pipelines that would transport liquids from West Virginia and Ohio to a transmission system in Hardinsburg, Kentucky, and ultimately to Eunice, Louisiana, the article said. For more, read the full Vindicator story, the full Tribune Chronicle story and this press release from Williams.
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Posted by
M. Warnock in
Ohio
Pennsylvania
United States
West Virginia
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Permalink
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Mar 12, 2013
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President Obama announces his nominations for energy secretary and EPA administrator
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Last week, President Obama announced his nominations for energy secretary and EPA administrator, The Washington Post reports. Ernest Moniz, a physicist at the Massachusetts Institute of Technology who served as an associate director of the Office of Science and Technology Policy and as an undersecretary of energy under former President Bill Clinton, is devoted to an "all-of-the-above" energy policy that includes nuclear power, carbon capture, renewable energy and hydraulic fracturing, the article said. Although the Energy Department "has no jurisdiction over fracking policy," some environmentalists are protesting Moniz's nomination due to a report he authored at MIT that supported hydraulic fracturing, and because "major oil and gas companies...provided as much as $25 million each to the MIT Energy Initiative," the article said.
President Obama also nominated Gina McCarthy, the current head of the Environmental Protection Agency's Office of Air and Radiation, for EPA administrator. A former top environmental official under Republican administrations in Connecticut and Massachusetts, McCarthy helped the EPA put several contentious rules into place, including "regulations curbing mercury and soot emissions from power plants." Much opposition to her nomination has already been dampened due to evidence of her ability to work under Republican administrations and cultivate strong relationships with members of the business community while pursuing environmental regulations. For more, read these two Washington Post articles here and here, as well as Moniz's full report from MIT, titled "The Future of Natural Gas: An Interdisciplinary Study."
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Posted by
M. Warnock in
United States
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Permalink
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Mar 12, 2013
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President Obama announces nominations for energy secretary and EPA administrator
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Last week, President Obama announced his nominations for energy secretary and EPA administrator, The Washington Post reports. Ernest Moniz, a physicist at the Massachusetts Institute of Technology who served as an associate director of the Office of Science and Technology Policy and as an undersecretary of energy under former President Bill Clinton, is devoted to an "all-of-the-above" energy policy that includes nuclear power, carbon capture, renewable energy and hydraulic fracturing, the article said. Although the Energy Department "has no jurisdiction over fracking policy," some environmentalists are protesting Moniz's nomination due to a report he authored at MIT that supported hydraulic fracturing, and because "major oil and gas companies...provided as much as $25 million each to the MIT Energy Initiative," the article said.
President Obama also nominated Gina McCarthy, the current head of the Environmental Protection Agency's Office of Air and Radiation, for EPA administrator. A former top environmental official under Republican administrations in Connecticut and Massachusetts, McCarthy helped the EPA put several contentious rules into place, including "regulations curbing mercury and soot emissions from power plants." Much opposition to her nomination has already been dampened due to evidence of her ability to work under Republican administrations and cultivate strong relationships with members of the business community while pursuing environmental regulations. For more, read these two Washington Post articles here and here, as well as Moniz's full report from MIT, titled "The Future of Natural Gas: An Interdisciplinary Study."
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Posted by
M. Warnock in
United States
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Permalink
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Mar 12, 2013
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Federal Reserve commentary on current economic conditions mentions shale activity in Ohio
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The Federal Reserve recently released a commentary on the current economic conditions in its various districts, reports the Wall Street Journal. For the Fourth District, which includes western Pennsylvania and Ohio, the commentary reported a robust expansion of shale activities. For more, please read the Wall Street Journal article here and the Federal Reserve commentary here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Mar 05, 2013
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Report analyzes shale litigation
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The international law firm of Fulbright & Jaworski recently released an updated white paper titled, “Analysis of Hydraulic Fracturing and Shale Drilling Litigation,” which features in-depth examinations of cases from around the country. This resource discusses water contamination claims as well “lawsuits alleging that hydraulic fracturing is implicated in quakes, environmental issues, regulatory enforcement, municipal bans, government regulations, and oil and gas lease disputes.” For more, read the summary as well as the comprehensive analysis.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 19, 2013
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AEP will spend $4-5 billion retrofitting coal plants to burn natural gas
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Ohio-based American Electric Power announced last week that in an effort to “make its remaining coal plants compliant with current and proposed federal regulations,” the company will spend between $4 billion and $5 billion over the next seven years to move its generating fleet “away from coal toward cleaner burning natural gas,” Reuters reports. AEP, described here as “the nation’s biggest coal generator,” said that it is now economical to retire “over 5,400 MW of coal generation by 2016” and to possibly convert as much as “1,800 MW of coal units to gas” since gas prices reached the $3.25 per mmBtu breakpoint. The company estimates that its generating capacity from coal-fired plants will drop from its current 65 percent to about 50 percent by 2020, the article said. For more, read the full story.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Feb 15, 2013
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Feds charge D&L Energy owner with violating the U.S. Clean Water Act
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U.S. Attorney Steven Dettelbach announced in Youngstown yesterday that Ben Lupo, the owner of D&L Energy who admitted to ordering employees at his other company, Hardrock Excavating, to illegally discharge as much as 240,000 gallons of oilfield wastewater into a tributary of the Mahoning River over a five-month period, has been charged with violating the U.S. Clean Water Act, The Business Journal reports (See the Feb 12, 2013, blog – “D&L Energy Group owner admits to illegally dumping potentially 240,000 gallons of drilling wastewater since September; may appeal ODNR’s revocation of his companies’ permits”). Officials indicated that in addition to Lupo, “the drilling companies that develop the wells and transport excess wastewater from their drilling sites could also be held culpable.” Punishment for this federal offense includes a $250,000 fine and a maximum of three years in jail. After pleading not guilty during his arraignment in U.S. District Court yesterday, Lupo was released on a $50,000 bond. Ohio Attorney General Mike DeWine also announced that the state is preparing a civil case against Lupo. For more, read the full story.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Feb 04, 2013
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The Bakken Formation is not North Dakota’s first oil and gas boom
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The latest issue of The New York Times Magazine features a cover story about how advances in horizontal drilling technology have transformed North Dakota’s seemingly dismal future into one of possibility and abundance. Since drillers began using hydraulic fracturing to extract oil and gas from the Williston Basin’s Bakken Formation seven years ago, the region now accounts for 91 percent of the state’s oil production – the total of which accounts for 11 percent of U.S. oil production, the article said. Whereas previously North Dakota was desperately trying to come up with ideas to spur economic development and retain its dwindling population, the state is now working with a $3.8 billion surplus to address the strains that have developed as a result of its oil and gas industry’s rampant growth: spikes in crime, car accidents, rental rates and pollution, as well as the need to perform necessary upgrades to infrastructure and to hire from out of state to fill positions. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 30, 2013
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Chesapeake Energy Corp. co-founder Aubrey McClendon to retire April 1st
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Co-founder and former CEO of Chesapeake Energy Corp. Aubrey K. McClendon will retire as chief executive of the company on April 1st, The New York Times reports. After having founded the company in 1989 and built it into a multi-billion dollar operation, McClendon faced scrutiny from the Securities and Exchange Commission over his finances that, combined with the company’s strategy of borrowing extensively to “finance its expansion spree,” had resulted in “his removal as chairman in June and a reshuffling of the board,” the article said (See the Jun 22, 2012, blog – “Chesapeake Energy appoints new chairman, four board members”). Although the board’s review of McClendon’s financial dealings has yet to reveal improper conduct, the board concluded that “the company’s stock was suffering from Mr. McClendon’s presence,” the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 18, 2013
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North Dakota's H.B. 1134 would provide tax incentives and exemptions to deter natural gas flaring
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In an effort to reduce natural gas flaring, North Dakota legislators are considering a bill that would grant a two-year exemption from the state gross production tax for wells that connect to a gathering system beginning on the first day of production, The Bismarck Tribune reports. House Bill 1134 would require that all wells be "capped, connected to a gas gathering line or equipped with a generator that consumes at least 75 percent of natural gas liquids" within one year, with incentives available to “give companies time to hook up gas gathering systems and pipelines,” the article said. With nearly 30 percent of western North Dakota's natural gas being flared – a percentage far above the national average and the daily amount of which could heat about 25,000 homes for a month – flaring is causing the state to lose about $35,000 daily in gross production tax revenue and mineral rights owners to lose royalty revenues, the article said. For more, read the full story and H.B. 1134.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 14, 2013
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Chesapeake Energy Corp. will significantly reduce its charitable, political and trade expenditures
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After facing intense scrutiny over its spending and corporate governance, Chesapeake Energy Corp. revealed in documents filed with the Securities Exchange Commission this week that it plans to gradually reduce its charitable, political and trade spending, The State Journal reports (See the Nov 20, 2012, blog – “Icahn Increases Ownership Stake in Chesapeake”). According to the filings, Chesapeake’s annual budget for charitable, trade association and political expenditures will be reduced by 30 percent for 2013, 40 percent for 2014 and 50 percent for 2015, when compared to its 2012 expenditures, the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
West Virginia
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Permalink
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Jan 14, 2013
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U.S. Coast Guard to decide if brine-filled barges can be transported as river cargo
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After purchasing and refurbishing liquid-storage tanks at an Ohio River terminal in Washington County, Texas-based GreenHunter Water’s plan to transfer hydraulic fracturing waste to its three newly purchased disposal wells located elsewhere in Washington County was put on hold in June by U.S. Coast Guard officials who must decide if brine can be transported as river cargo, The Columbus Dispatch reports. Brine is not yet listed as one of the Coast Guard’s materials, so it must be studied and approved before any brine-filled barges can be transported on the Ohio River; however, there is no timeline on when the Coast Guard will make its decision. The company insists that barge transport “is safer and more cost-efficient than hauling by truck,” with one barge capable of hauling “as much as 1,050 trucks,” the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 09, 2013
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Alaska’s draft hydraulic fracturing provisions do not protect trade secrets
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Draft hydraulic fracturing rules released in late December by the Alaska Oil and Gas Conservation Commission are garnering attention across the nation due to the deliberate absence of the trade secret exemption protecting the ingredients of hydraulic fracturing fluids that has been such a point of conflict between environmentalists and the oil and gas industry, Environment & Energy Publishing reports. Commissioners said the trade secret language was left out on purpose and that oil and gas companies will have to “advocate for themselves at a public hearing scheduled for Feb. 5” if they want to the commission to consider the provision. The rest of the chemical disclosure language used in the draft is similar to language used in other states in that drillers would be required to disclose hydraulic fracturing ingredients to FracFocus.org, including “the volume, description and Chemical Abstracts Service number,” the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 28, 2012
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TPG-Axon Capital Management LP CEO accuses SandRidge Energy Inc. CEO and son of impropriety with regard to mineral rights acquisition
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Dinakar Singh, chief executive officer of New York-based TPG-Axon Capital Management LP, wrote a letter to the company’s board recently to request that they investigate whether Tom Ward, the chief executive officer of SandRidge Energy Inc., and his son “acted improperly with regard to acquiring mineral rights,” Businessweek reports. TPG-Axon owns 6.7 percent of Oklahoma City-based SandRidge’s outstanding shares. Singh alleges that Ward and his son actively competed with the company by acquiring “mineral rights from third parties” and then leasing them soon after to SandRidge for a profit, including the purchase of a working interest in leases from WCT Resources LLC, which “is owned by trusts that are for the benefit of the CEO’s children,” the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 28, 2012
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Major U.S. transportation infrastructure projects are expected next year due to increased domestic oil and gas production
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It is estimated that in 2013, as much as $45 billion may be spent on “new or expanded transportation infrastructure, including pipelines, rail cars, rail terminals and other projects” intended to transform and upgrade the logistics of domestic oil and natural gas transportation now that the United States is becoming an energy surplus nation, The Wall Street Journal reports. River barges and tanker trains are currently the preferred methods, since the existing U.S. pipeline network “isn’t configured to fully service the new production areas in the center of the country” and because new pipeline projects regularly face “legal and permitting challenges from environmental groups,” the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 27, 2012
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New York Times op-ed explores the geopolitical impact of the shale revolution
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A recent op-ed in The New York Times argues that the real impact of the shale revolution has nothing to do with environmental dangers or the market price of natural gas, but rather its effect on the oil market. Alan Riley, a professor of energy law at The City Law School at City University London, summarizes the impact as follows: “Geopolitically, the shale revolution strengthens the United States, reduces China’s energy dependence, generates a global stimulus, which takes the Western economies off the fiscal rocks, while potentially destabilizing both the Russian Federation and Saudi Arabia.” For more, read the full op-ed.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 10, 2012
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Caterpillar Inc. and Ariel Corporation announce joint venture and acquisition of ProSource
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Last week, Caterpillar Inc. and Mount Vernon-based Ariel Corporation announced the formation of a 50-50 joint venture known as Black Horse LLC, which will “provide well service pressure pumping products for customers in the global oil and gas industry,” according to a press release from Caterpillar. The combined venture, based in Houston, also acquired Houston-based pump manufacturer ProSource. Black Horse intends to use Caterpillar and Ariel’s “engineering and manufacturing expertise to expand ProSource’s existing product line,” which will be “branded and sold under the Cat name and distributed through the Cat dealer network,” the release said. For more, read the full press release.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 04, 2012
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South African company to build gas-to-liquid fuels plant in Louisiana
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Johannesburg-based Sasol announced yesterday that it will construct an $11-14 billion plant in Louisiana designed to “produce 96,000 barrels of fuel a day using its ‘gas to liquids,’ or G.T.L., technology,” The New York Times reports. The location for the facility – which will include a gas processing plant, a chemical plant and a refinery, and which will be the second-largest plant of its kind in the world – was chosen based on tax incentives and its proximity to U.S. shale plays. Financial success of the plant will be dependent upon natural gas prices remaining low and oil, diesel and jet fuel prices remaining high “for a prolonged period,” the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Nov 30, 2012
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Drillers who use the EPA-ordered “green completion” process to purify natural gas could save millions
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Natural gas operators traditionally have vented or burned off a well’s initial production to clear out impurities before tying the well to a pipeline. Now a new process known as “green completion,” which filters out hydraulic fracturing fluids, drilling debris and sand, is being employed by more operators because the U.S. Environmental Protection Agency passed rules this year requiring drillers to use the process nationwide by 2015, The Philadelphia Inquirer reports. EPA regulations that became effective on October 15 prevent drillers from venting the gas into the atmosphere without burning, and with the new green completion requirement – which exempts "exploratory wells unconnected to pipelines" – the agency says these measures will save drillers “up to $19 million a year” through the capture and sale of natural gas that would otherwise be wasted, the article said. For more, read the full story.
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Posted by
M. Warnock in
Pennsylvania
United States
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Permalink
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Nov 20, 2012
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Icahn Increases Ownership Stake in Chesapeake
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An analysis of recent securities filings indicates the Carl Icahn recently increased his ownership stake in Chesapeake to 9%. Previously, Mr. Icahn and Southeastern led a shareholder rebellion at the company earlier this year, pushing for board representation and to replace Chesapeake Chief Executive and co-founder Aubrey McClendon with a new independent chairman," reports the Wall Street Journal. For more, read the story here, or see our May 29, 2012 blog post.
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Posted by
M. Warnock in
United States
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Permalink
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Nov 16, 2012
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International Energy Association Reports that U.S. Will be World's Biggest Oil Producer by 2017
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The International Energy Association recently reported that the United States could be the world's biggest producer of oil by 2017, much of it likely attributable to the shale boom. For more, read the fully story here.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 29, 2012
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PricewaterhouseCoopers LLP analyzes the U.S. oil and gas industry for third quarter 2012
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Business services firm PricewaterhouseCoopers LLP released an assessment of the U.S. oil and gas industry for the third quarter 2012 that found that due to the 10-year-low natural gas prices, U.S. oil and gas companies are actively adding “more profitable liquid rich shale plays to their portfolios,” which is driving companies to the liquids-rich Utica shale, according to a press release from the firm. Despite its liquids appeal, the Utica shale is still regarded as a relatively immature shale play that is in its early stages. It is predicted that more mergers and acquisitions activity could occur in both it and the Marcellus shale should natural gas prices rise in the short term, the release said. For more, read the full press release.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Oct 25, 2012
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Domestic oil and gas production helps struggling refineries
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American oil and gas refineries, which are expensive to run and “barely eke out a return,” were suffering five years ago from the purchase and costly transport of expensive oil from Africa and the Middle East, as well as the soaring cost of natural gas, which powers many refineries, The New York Times reports. The U.S. shale boom has driven the price of natural gas down 60 percent over the last four years and domestic crude oil is several dollars a barrel cheaper than international prices; combined, these circumstances amount to savings so substantial that these refineries are not only breaking even, but making a profit, the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 24, 2012
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Shale’s water problem discussed during the World Shale Oil & Gas Summit in Houston
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Oil and gas industry executives and experts addressed water supply and cost issues with regard to hydraulic fracturing during the World Shale Oil & Gas Summit in Houston this week, the Houston Chronicle reports. With the cost of moving water amounting to over a sixth of the cost of a Marcellus well, much discussion focused on ways to reduce the volume of water used as well as ways in which water can be reused and recycled, the article said. More than 1 million unconventional wells are projected to be drilled by 2035, which is why significant capital is being devoted to ameliorating the water scarcity issue – a move that one executive said will help the shale industry not just economically, but also with regard to the environment and landowner relations, the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 15, 2012
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The Eagle Ford Shale in Texas is estimated to produce oil and gas for at least 16 years
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An economist from Texas A&M’s Real Estate Center recently estimated that with approximately 1,250 wells capable of being drilled each year within the 400-mile-long Eagle Ford Shale in Texas, it will take 16 years to reach the 20,000 wells needed to produce all of the oil and gas available in that play, the Houston Chronicle reports. However, the research director for the University of Texas at San Antonio’s Institute for Economic Development says that other factors, such as the price of oil and gas, increase the estimated amount of time it will take to recover the 3-10 billion barrels of oil there to as much as 20 to 25 years, the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 12, 2012
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Chesapeake Energy Corp. is working on environmentally friendly hydraulic fracturing fluids
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Jody C. Jones, the manager of environmental and regulatory affairs for Chesapeake Energy Corp., announced during an industry event in Columbus last week that the company is working to develop hydraulic fracturing fluids composed “solely of environmentally-benign components,” Businessweek reports. This continues a trend of hydraulic fracturing service providers developing more environmentally friendly fluids in an effort to minimize threats related to “surface spills near lakes, creeks and rivers that abut drilling sites,” as well as “workers’ exposure to potentially harmful substances,” the article said. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 11, 2012
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Report: low natural gas prices could boost other industries
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A new report by business services firm PricewaterhouseCoopers LLP concludes that the shale gas boom has reduced the price of U.S. natural gas, leading to a decrease in the cost of both raw materials and energy that could amount to a savings of as much as $11.6 billion annually by 2025, The Columbus Dispatch reports (See the Feb 15, 2012, blog – “Low natural gas prices allow chemical companies to look stateside again”). The report, “Shale Gas: Reshaping the U.S. Chemicals Industry,” says that with the U.S. chemical industry experiencing such savings, the estimated 90 percent of all manufactured products that are produced using chemicals – apparel, electronics, machinery, etc. – will experience similar savings and may be encouraged to relocate or expand into the United States, particularly if petroleum-based raw materials are replaced with products based on ethylene, the article said. For more, read the full story and the full report.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 04, 2012
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Energy in Depth compares EPA and USGS results for groundwater contamination issue in Wyoming
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Last December, the U.S. Environmental Protection Agency issued a preliminary report theorizing that hydraulic fracturing may be linked to groundwater pollution in a gas field in Pavillion, Wyoming. After facing criticism over the monitoring and procedures used for this report, the EPA suspended its investigation in March and brought in the U.S. Geological Survey to conduct independent sampling, the data from which was released on September 26th. In an article published online yesterday, Energy in Depth – a pro-oil-and-gas drilling group – released a review of the USGS report and determined there are “glaring inconsistencies” between the EPA and the USGS results, which contradicts statements made by the EPA upon release of the USGS data. For more, read the full story.
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Posted by
M. Warnock in
United States
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Permalink
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Sep 19, 2012
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Sole Hilcorp Energy shareholder sells Gulf of Mexico oil and gas fields for $550 million
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Houston billionaire Jeffrey Hildebrand, the sole shareholder of Hilcorp Energy, recently sold oil and gas fields in the Gulf of Mexico to EPL Oil & Gas for $550 million, Forbes reports. This deal will “free up cash for Hilcorp to invest in its other operations,” including assets in the Cook Inlet of Alaska as well as the Utica shale play of Ohio, where it recently formed a joint venture with NiSource Inc., the article said (See the Jul 10, 2012, blog – “NiSource Inc. announces joint venture partner”). For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Sep 14, 2012
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Chesapeake Energy is working toward selling $7 billion in assets
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A recent article on CantonRep.com breaks down the various assets that Chesapeake Energy Corp. is selling for nearly $7 billion as it works to “wipe $14 billion in debt off its books this year.” Royal Dutch Shell PLC, Chevron Corp. and EnerVest will purchase Chesapeake’s assets in “the oil and gas-rich Permian basin,” the article said. The company is selling “most of its pipeline and storage assets to Global Infrastructure Partners for about $2.7 billion” and plans to net $600 million by “selling non-core leases in the Utica shale,” the article said. For more, including details on Chesapeake’s other planned asset sales, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Sep 06, 2012
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Experts dissect five prevalent concerns about the shale gas industry
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A reporter for Pittsburgh’s Tribune-Review sought input from several experts regarding five of the most prevalent concerns regarding the shale gas industry, including whether the actual act of hydraulic fracturing is more dangerous than “shoddy well construction, surface spills, and shortcomings or mistakes in gas drilling”; if spills are easy to contain and clean up; if water shortages are a valid concern; if hydraulic fracturing can actually bring energy independence to the United States; and if the natural gas industry is responsible for well-water contamination and flaming water taps. For answers, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Sep 06, 2012
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Oil and gas leases complicate home refinancing
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Although “properties with leases are routinely financed,” experts say banks are more carefully assessing homes with gas drilling leases to determine “both the positive and negative impacts of the Marcellus Shale boom,” The Associated Press reports. Whereas in the past mineral rights weren’t even considered in the mortgage or loan process, the fact that the value of gas leases can involve hundreds of thousands of dollars today increases the likelihood that they will be considered during the mortgage process, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Sep 04, 2012
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NEXUS Gas Transmission system will move Ohio shale gas to the U.S. Midwest and Canada
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Today, DTE Energy, Enbridge Inc. and Spectra Energy Corp announced that they will jointly develop the NEXUS Gas Transmission (NGT) system to move “growing supplies of Ohio Utica shale gas to markets in the U.S. Midwest, including Ohio and Michigan, and Ontario, Canada,” a press release from Spectra Energy said. The 250-mile pipeline, which will be “capable of transporting one billion cubic feet per day of natural gas” to local distribution companies, power generators and industrial users, has a targeted in-service date of November 2015, the release said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Aug 31, 2012
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Poll: mergers and acquisitions expected in oilfield services sector
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An Ernst & Young poll of 50 leading industry executives and private equity practitioners found that “84 percent of those polled said they thought mergers and acquisitions would increase” in the oilfield services sector and none expected a decrease, Upstream reports. The reason given for this expectation is that several pressures “requiring companies to remain nimble and proactive in anticipating and adapting to the changing environment” exist in order to minimize risk and maximize earning potential, the article said. Four out of five polled said that North American companies would lead all regions in activity. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Aug 24, 2012
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Mitt Romney wants states to control energy production on federal lands
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In his energy proposal, Mitt Romney – the presumptive Republican presidential nominee – wants states to have control “over energy production on federal lands within their borders,” Bloomberg reports. While Romney argues that this would help “skirt a federal permit process that is extraordinarily slow” and that certain lands (unspecified in the report) would be off-limits, Heather Taylor-Miesle – director of the Natural Resources Defense Council Action Fund – said that Washington “should retain control over energy production on federal lands” because federal lands are national treasures that “benefit every American,” the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Aug 20, 2012
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Tips to improve the shale industry’s image
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During an industry event in Denver last week, several ideas were proposed to help the shale industry “stage its own public relations uprising,” Platts reports. Strategies included a variety of campaign tools, including the use of social media efforts like Twitter and Facebook to inform the public, as well as broader concepts such as the utilization of a “Reganesque message of American self-sufficiency” to help opponents understand the industry’s side of the issue, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Aug 20, 2012
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Helping the renewable energy industry does not make natural gas a renewable energy
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With natural gas being touted as the backup fuel for various renewable energy systems – wind and solar alike – and regularly described as the cleaner-burning fuel in comparison to coal, one reporter tried to determine whether natural gas was a truly renewable energy resource, KCET reports. Because natural gas is a fossil fuel that adds carbon dioxide to the atmosphere, it cannot technically be considered a renewable energy resource. Although the article praises natural gas for being a much cleaner source of power than coal and therefore less damaging to the climate, it contends that the environmental risks of hydraulic fracturing must be considered when determining the relative cleanliness of a power source, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Aug 17, 2012
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U.S. Department of Justice investigates oil and gas exploration and production companies for antitrust violations
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With the huge upsurge in shale drilling activity across the United States and in particular on federal- and state-owned lands, the Antitrust Division of the Department of Justice has begun recently to look more closely “at joint bidding activity in the exploration and production segment of the energy industry,” according to an article from law firm Baker Botts L.L.P. The firm provides an overview of the situation, specific examples of recent enforcement activity and analysis with four inquiries regarding collaborative activity among exploration and production joint ventures. For more, read the full article here.
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Posted by
M. Warnock in
United States
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Permalink
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Aug 01, 2012
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Devon Energy Corp. to sell 30 percent of its interest in West Texas acreage to Sumitomo Corp. for $1.4 billion
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In its second joint venture deal with a major international investor, Devon Energy Corp. announced today that it would sell “30% of its interest in about 650,000 net acres in the oil-rich Cline and Midland-Wolfcamp shales” of West Texas to the Japanese company Sumitomo Corp. for approximately $1.4 billion, The Wall Street Journal reports (See the Jan. 04, 2012, blog -"Another major U.S. shale stake sold to foreign energy company"). Although it will reduce Devon’s “potential gains from the emerging area,” the deal struck with Sumitomo completely eliminated Devon's "capital-expenditures funding gap for the second half of 2012 and 2013,” the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jul 31, 2012
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Nonprofit offers a quick capsule review of hydraulic fracturing legislation in the United States
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The Council of State Governments, a nonpartisan non-profit organization that serves state governments, released a comprehensive yet accessible assessment of state legislation pertaining to hydraulic fracturing and the oil and gas industry. The article explores states that have been transformed by the shale boom as well as how other states are using those lessons as they attempt to draft legislation that avoids the pitfalls while still maintaining an environment receptive to the benefits of the oil and gas industry. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jul 30, 2012
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Record-low shale gas prices prompt writedowns
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With natural-gas prices reaching a 10-year low this year, energy companies are “at risk of writing off billions of dollars of assets following a bubble in U.S. shale-gas acreage,” Bloomberg Businessweek reports. BG Group Plc wrote down $1.3 billion “on its U.S. shale fields;” Encana wrote down $1.7 billion “on its North American assets;” Exco Resources Inc. and Quicksilver Resources Inc. wrote down $276 million and $63 million on their assets, respectively; and Noble Energy Inc. “recorded impairment charges of $73 million on its U.S. assets in the second quarter mainly because of lower prices,” the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jul 27, 2012
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Father of modern hydraulic fracturing supports stricter government regulation of the practice
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George Phydias Mitchell, who during the 1990s pioneered the use of hydraulic fracturing to free natural gas from shale, said that the U.S. Department of Energy should tighten up control of and more heavily regulate the hydraulic fracturing industry, Forbes reports. Although Mitchell says that most bigger drillers are safe and responsible with their drilling activities, he contends that smaller, independent operations “are wild,” tougher to control and should be punished if they do something wrong, the article said. Mitchell also dismissed claims that tighter regulations could hurt the industry, saying that any extra costs associated with adhering to best practices would “be passed on in the price of natural gas,” the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jul 13, 2012
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Nationwide becomes first major U.S. insurer to say it won’t cover hydraulic fracturing damages
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Columbus-based Nationwide Mutual Insurance Co. has become the first major insurance company in the United States to say it won’t cover damages related to hydraulic fracturing, The Associated Press reports. In a statement, the insurer said that the risks involved in hydraulic fracturing operations are “too great to ignore” and that their personal and commercial policies “were not designed to cover” the risks associated with it, the article said. The “prohibited risk” of hydraulic fracturing applies to “landowners who lease land for shale gas drilling” and contractors involved in hydraulic fracturing, “including those who haul water to and from drill sites; pipe and lumber haulers; and operators of bulldozers, dump trucks and other vehicles used in drill site preparation,” the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jul 13, 2012
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Nationwide issues statement regarding hydraulic fracturing insurance coverage
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Earlier today, the Associated Press reported that Nationwide was the first major U.S. insurer to not cover damages related to hydraulic fracturing. Nationwide issued this statement indicating that "has not changed our policies or guidelines, nor are we cancelling policies. Fracking-related losses have never been a covered loss under personal or commercial lines policies."
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Posted by
M. Warnock in
United States
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Permalink
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Jul 09, 2012
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New York Times op-ed argues in favor of federal guidelines for hydraulic fracturing
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Jody Freeman, the White House counselor for energy and climate change in 2009 and 2010, penned a New York Times op-ed last week arguing that federal oversight of hydraulic fracturing using minimum standards would “promote confidence in this technique and provide the industry with uniform standards without overregulating it.” Freeman said that a regulatory system of minimum federal standards similar to that of coal mining would give states flexibility in meeting these requirements and would prevent overregulation and outright bans on drilling from states lacking the “experience or resources to enforce their standards.” For more, read the full op-ed here.
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Posted by
M. Warnock in
United States
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Permalink
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Jul 09, 2012
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Drilling for oil and gas under cemeteries raises concerns
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Cemetery owners are leasing their mineral rights to oil and gas companies for money to maintain and refurbish their grounds – a practice that is alarming some people with loved ones buried on these properties, The New York Times reports. Although Pittsburgh’s decision to ban natural gas drilling was in part an outcry over this practice, the Texas Cemeteries Association officially announced its support of cemetery owners' right to “explore their natural gas options” and Chesapeake Energy Corp. commented that the only calls they received from family members were from those “asking if they could collect mineral-right royalties from their loved one’s burial plot,” the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jul 05, 2012
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Chesapeake Midstream Partners sold to Global Infrastructure Partners LP for $2 billion
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As part of its financial plan to overcome a budget shortfall “estimated to be as much as $22 billion,” Chesapeake Energy Corp. closed a deal that sold its interest in Chesapeake Midstream Partners to Global Infrastructure Partners for $2 billion, The Oklahoman reports (See the Feb. 15, 2012, blog – “Chesapeake announces its financial plan for 2012”). Global Infrastructure, which helped form the midstream partnership in 2009, is also “negotiating with the cash-strapped oil and gas producer to acquire subsidiary Chesapeake Midstream Development LLC,” the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 29, 2012
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Western Colorado suffers from the boom-and-bust cycle of the shale industry
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In just four years, northwestern Colorado saw the number of drilling rigs decrease from 115 to 16, The New York Times reports. Whereas new school additions and businesses were sprouting up left and right to accommodate the shale boom there a few years ago, sagging natural gas prices and a lack of crude oil are causing these once-booming areas to become modern-day ghost towns, which is causing many to wonder if that will be the fate for other shale-rich areas, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 28, 2012
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New cryogenic facility goes online in the Woodford Shale
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To support the long-term, fee-based agreement that Atlas Pipeline Partners, L.P. made with XTO Energy Inc. to provide natural gas gathering and processing services “for up to an incremental 60 million cubic feet per day (mmcfd) from the Woodford Shale,” Atlas announced last week that an expansion at its Velma system of a new 60 mmcfd cryogenic facility “increases the total processing capacity to 160 mmcfd,” The Sacramento Bee reports. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 26, 2012
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Cash-strapped state regulators struggle to inspect wells
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Despite losing a quarter of its budget between 2011 and 2012, the Ohio Department of Natural Resources plans to use increased revenue from drilling application fees to more than triple its oil-and-gas inspection force with 70 new field inspectors by the end of the year, Governing reports. With problems similar to many of the cash-strapped shale states that are struggling to inspect the growing number of wells, ODNR performed a total of 11,842 inspections last year with just 30 inspectors – “up from 1,300 in 2010,” the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jun 26, 2012
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Attorney launches mineral royalties website
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In response to a rise in complaints that oil and gas companies are not providing fair compensation for drilling on property owners’ land, Stuart Smith, an environmental attorney from Louisiana, launched www.Mineralroyaltiesfraud.com, according to Columbus Business First. The website provides information on mineral royalties complaints, answers frequently asked questions on the topic and reviews the latest related cases. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 25, 2012
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Reuters reports that Chesapeake Energy and Encana Corporation may have violated antitrust laws to keep land prices from escalating
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A Reuters investigation reveals that Chesapeake Energy and Encana Corporation may have violated state and federal antitrust laws when the two companies developed proposals for working together to avoid price hikes that resulted from the two competing for land in the Collingwood Shale formation in Northern Michigan. Although representatives from the two companies say that this was simply a discussion about forming a joint venture in Michigan, emails from June through October 2010 show top executives for both Chesapeake and Encana discussing in great detail proposals for the two companies to divide territory in Michigan and avoid competitive bidding, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 22, 2012
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Chesapeake Energy appoints new chairman, four board members
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Chesapeake Energy replaced Aubrey McClendon as chairman with former ConocoPhillips Chairman Archie Dunham to help restore the company’s credibility with shareholders after “the impact of falling gas prices and soaring debt compounded the controversy over McClendon’s use of personal stakes in company-owned wells to obtain loans,” Bloomberg Businessweek reports. At the insistence of Carl Icahn and Southeastern Asset Management Inc. – Chesapeake’s two largest shareholders – four new directors were named to the board: Bob Alexander, R. Brad Martin, Frederic Poses and Vincent Intrieri, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 18, 2012
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Readers respond to New York Times shale articles
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Readers of The New York Times have submitted several letters to the editor in response to different stories and editorials that the newspaper has published on shale recently. For more, read the letters here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 15, 2012
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Article lists nine oil-and-gas drilling companies with strong expected growth
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A contributor with Seeking Alpha listed nine oil and gas drillers with strong expected growth, each of which were chosen based upon analyst ratings and then screening each business for estimated high-growth with "5-year projected earnings per share growth above 25%," the article said. For more analysis on the nine companies, read the full article here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 13, 2012
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Chesapeake Energy retains a multitude of lawyers
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With Chesapeake Energy selling pipelines, leases and other assets in an attempt to cover its debt at the same time that it's facing increased scrutiny over the business practices and personal loans of its CEO, Aubrey McClendon, the natural gas giant is putting a stable of outside counsel to work, The American Lawyer Daily reports. For details as to which firm is handling each part of Chesapeake's many issues, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 07, 2012
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Oil and gas companies may consider buying Chesapeake Energy
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Companies that were late entrants to the hydraulic fracturing industry like Exxon Mobil and Chevron may consider buying Chesapeake Energy, which has "lost 30 percent of its market value since the beginning of 2012 as low gas prices and governance issues" take a toll on the company's stock price, Forbes reports. Although Chesapeake's "complex structure and unconventional financial practices could deter potential buyers," the company's command over "some of the most lucrative onshore reserves in shale plays across the country" makes it an appealing target for those looking to move into the shale industry, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 06, 2012
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Top shareholders will take over Chesapeake Energy's board of directors
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Recent crises within Chesapeake Energy have resulted in the company announcing on Monday that top shareholders will "take control of the board of directors," replacing four of the nine-member board, CNBC reports (See the May 29, 2012, blog – "Billionaire investor buys Chesapeake stake"). Although it has not yet been announced which members of the board will step down, Chesapeake did say that Mason Hawkin's Southeastern Asset Management will get three seats and billionaire Carl Icahn will get one, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 05, 2012
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Natural-gas industry disputes EPA's emissions estimates
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The American Petroleum Institute and America's Natural Gas Alliance released a study Monday finding that the U.S. Environmental Protection Agency's estimate that nearly 8.8 metric tons of methane escaped from producing unconventional natural gas in 2010 was twice as high as their estimate, The Wall Street Journal reports. The report also disputes the EPA's claim that natural-gas drilling was the number one source of methane emissions in the United States, finding that "gas produced in the guts of cows and other ruminant animals and expelled" was number one, the article said. For more, read the report here or read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jun 01, 2012
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Chesapeake Energy may struggle to make ends meet
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Although Chesapeake Energy intended to pare debt, plug a funding gap and move from gas fields to oil basins this year, a Jeffries analyst determined that the company needs to raise $7 billion this year through asset sales and another $2 billion next year to "comply with credit-line covenants" just to plug its funding gap alone, The Wall Street Journal reports (See the Jan 26, 2012, blog – "Chesapeake's multi-faceted debt-reduction plan concerns some analysts"). Chesapeake's plan to sell its spin-off oilfield services subsidiary faces many hurdles, which may force the company to sell some of its "prized assets" in undeveloped oil-shale fields in Ohio and south Texas, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 29, 2012
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Billionaire investor buys Chesapeake stake
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Carl Icahn, a billionaire investor, bought a 7.6 percent stake in Chesapeake Energy and called for the company to replace at least four directors due to failures in managerial oversight, Reuters reports (See the May 08, 2012, blog – "Top Chesapeake Energy investor wants the company to consider selling itself whole"). Two of the board seats will be for his own representatives, while the other two will be reserved for another large shareholder, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 21, 2012
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Enbridge Inc to expand pipelines in U.S. and Canada
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Enbridge Inc, the largest transporter of Canadian oil exports, is planning $3.2 billion worth of pipeline projects aimed at "moving western Canadian crude to Eastern refineries and preventing bottlenecks in the U.S. Midwest," Reuters reports. $2.6 billion of the plan will reverse the flow direction of a pipeline between Ontario and Montreal; $400 million will be used to expand a pipeline between North Dakota and Chicago; and $200 million will go toward expanding the Canadian portion of that system, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 16, 2012
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Unknowns in shale industry complicate risk pricing for insurers
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Lawsuits and U.S. Environmental Protection Agency findings regarding how the shale drilling industry affects environmental and human health are still in their infancy and proving inconsistent, 4-traders.com reports. Such uncertainty is making it difficult for insurance companies to "price the risk of the oil and gas production technique" known as hydraulic fracturing, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 10, 2012
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Forbes contributor argues for the environmental benefits of shale
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Tim Worstall, a contributor for Forbes, wrote a piece last week arguing that the shale gas revolution is beneficial to the environment because the low price of natural gas is forcing pollution-heavy coal plants to close. He wrote that gas creates more electricity per BTU than coal and is therefore more efficient; that compared to coal-fired generation, average emissions rates in the United States for natural gas-fired generation are half as much carbon dioxide, a third as much nitrogen oxides and one percent as much sulphur oxides; and that the process for cleaning natural gas is easier than the process for cleaning coal. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 10, 2012
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Marathon Oil to buy Paloma Partners for $750 million
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Paloma Partners II LLC announced yesterday that Marathon Oil will purchase the privately held exploration and production company for $750 million cash in a deal expected to close this fall, The Associated Press reports. Paloma owns about 17,000 net acres in the Eagle Ford shale in Texas, which produce approximately 7,000 barrels of oil per day, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 08, 2012
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MarkWest Energy acquires Keystone Midstream Services
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Yesterday, MarkWest Energy Partners, L.P. announced that it was purchasing Keystone Midstream Services, LLC for $512 million, Business Wire reports. Keystone's assets, located in Butler County, Pennsylvania, include "two cryogenic gas processing plants totaling 90 million cubic feet per day (MMcfd) of capacity, a gas gathering system and associated field compression," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 08, 2012
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Top Chesapeake Energy investor wants the company to consider selling itself whole
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O. Mason Hawkins, chairman and chief executive officer of Southeastern Asset Management Inc. and the largest Chesapeake Energy shareholder, wrote a letter to the energy giant's board urging them to consider selling the whole company, Bloomberg reports. Record low natural gas prices and the recent disclosure of a potential conflict between Chesapeake CEO Aubrey McClendon's personal financial transactions and professional duties have rocked the company in recent weeks (See the May 07, 2012, blog – "Oversupply of natural gas is forcing production to a halt" and the May 01, 2012, blog – "Aubrey McClendon to step down as chairman of Chesapeake Energy"). For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 07, 2012
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Oversupply of natural gas is forcing production to a halt
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With natural gas facilities in the United States expected to reach capacity this summer, the price per thousand cubic feet of natural gas has unexpectedly dropped from $4 last year to around $2 now, Crain's Cleveland Business reports. As energy companies cut production in an effort to drive up the price, landowners are having to wait longer for their royalties – as are states for their tax revenue – from the sale of the gas, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 04, 2012
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Chesapeake Energy's CEO ran $200 million hedge fund from within the company
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In addition to taking a more than $1 billion loan "against his stakes in Chesapeake oil and gas wells," Chesapeake Energy Corp. CEO Aubrey McClendon also operated from within the company a $200 million hedge fund that "traded in the same commodities Chesapeake produces," a Reuters investigation reveals. Although no evidence of misused inside knowledge has come to light, some experts are expressing concerns that this arrangement indicates a potential conflict of interest wherein McClendon would have to choose between a decision that would benefit Chesapeake's shareholders versus a decision that would benefit his hedge fund – known as Heritage Management Company LLC – the article said. Additionally, such an arrangement would have enabled McClendon to buy or sell a commodity based on privileged information of a move that Chesapeake was going to make that would affect the market, which could in turn "raise costs for the company," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 04, 2012
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Rules for hydraulic fracturing on federal land released
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Today, the U.S. Department of the Interior released new environmental-safety rules for hydraulic fracturing on federal land that are expected to set a standard for future state regulations, The Wall Street Journal reports. Tests to ensure that wells are properly cemented and guidelines regarding the treatment of wastewater were included. The focal point of the draft rule was a requirement that energy companies disclose the chemicals used in hydraulic fracturing; however, they are allowed to wait until after the chemicals have been injected in the ground so as to protect "proprietary information," a press release from the department said. For more, read The Wall Street Journal article here, a press release from the Interior Department here and the full text of the draft rule here.
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Posted by
M. Warnock in
United States
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Permalink
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May 03, 2012
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Energy producers scale back natural gas production amid abundant supply
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With a significant oversupply of natural gas causing prices to drop to their lowest level in more than a decade, energy producers are beginning to scale back production, The Wall Street Journal reports. The recent cutback in production coincided with a surge in demand from consumers looking to capitalize on the record-low prices, which resulted in natural gas prices jumping on Wednesday, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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May 02, 2012
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Marcellus Shale Coalition releases first of several recommended practices for responsible natural gas development
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The Marcellus Shale Coalition, a formidable drilling industry trade group that has forty energy companies as members, released the first in a series of recommended practices that are designed to provide general guidance for various elements of natural gas development, a press release from the coalition said. The first recommended practice addresses site planning, development and restoration. For more, read the full press release here and the first recommended practice here.
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Posted by
M. Warnock in
United States
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Permalink
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May 01, 2012
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Aubrey McClendon to step down as chairman of Chesapeake Energy
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Amid demands from investors that Aubrey McClendon be replaced after it became public knowledge that he did not disclose $1.4 billion in loans that he received from a private-equity firm that had dealings with Chesapeake Energy, the company announced today that although McClendon will remain CEO, he will step down as chairman, The Wall Street Journal reports. The controversial arrangement in which McClendon was given the right to "participate and invest as a working interest owner of up to 2.5% in new wells" was also terminated 18 months early with McClendon receiving no severance compensation, the article said (See the Apr 30, 2012, blog – "Chesapeake Energy to review and change McClendon's financial arrangements"). For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 30, 2012
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Chesapeake Energy to review and change McClendon's financial arrangements
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As Chesapeake Energy faces increasing scrutiny over the loans received by Aubrey McClendon, the company's chairman and chief executive, officials announced Thursday that the company will review McClendon's "financial relationships with outside parties" and phase out an unusual compensation plan that allowed him to "invest alongside Chesapeake in every well that it drilled, sharing in both the profits and the expenses," The New York Times reports. Meanwhile, the Securities and Exchange Commission has begun an informal inquiry into the matter while Standard & Poor's downgraded Chesapeake's debt "further into 'junk' territory," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 25, 2012
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Houston Chronicle editorial adds up the electoral votes of oil and gas regions
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In an editorial published on Sunday, the Houston Chronicle added traditional oil and gas areas to new shale-rich areas to determine that these swaths of land are equal to 287 electoral votes, which is 17 more than what's needed to elect a president. The newspaper's editorial board encourages these areas to push congressional leaders toward adopting policies that are favorable to domestic oil and gas production. For more, read the full editorial here.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 24, 2012
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Exporting natural gas would be costly for most in the U.S., but good for Ohio landowners
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As an increase in supply drives down the price of natural gas domestically, oil and gas industry officials are calling for natural gas to be exported so that the price can increase on the world market, Crain's Cleveland Business reports. While this move would almost certainly raise oil and gas prices for most businesses and citizens in the United States, it would also likely cause the industry to grow in Ohio and make the hydrocarbon-rich land in Ohio more valuable to lease, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Apr 17, 2012
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Chesapeake Energy plans to take its oilfield services unit public to raise $862.5 million
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As part of a continuing effort to raise cash and reduce debt by shedding assets, Chesapeake Energy hopes to raise "up to $862.5 million in an initial public offering of stock" from the sale of its oilfield services unit, The Wall Street Journal reports (See the Jan 26, 2012, blog – "Chesapeake's multi-faceted debt-reduction plan concerns some analysts"). The oilfield services company, of which Chesapeake will retain a controlling stake, owns "more than 100 drilling rigs, a hydraulic fracturing subsidiary, an oil field tool rental business and a fleet of trucks that ferry drilling rigs and other equipment," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 16, 2012
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President Obama creates group to oversee domestic natural gas production
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In an executive order signed last Friday, President Obama created a group consisting of representatives from several federal agencies charged with coordinating "federal oversight of natural gas production," The Associated Press reports. Headed by White House energy adviser Heather Zichal, the group's creation received praise from some industry leaders who say it will promote streamlined and consistent interaction with the government, while others dismissed the move as excessive regulation that could stymie the burgeoning industry, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 12, 2012
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Cheap natural gas is encouraging manufacturers, utilities and trucking fleets to convert
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As the shale boom continues to make the supply of natural gas skyrocket while forcing prices in the United States to plummet, three sectors are making significant changes to take advantage of cheap natural gas, The New York Times reports. Manufacturing outfits that had previously abandoned the United States for cheaper opportunities abroad are returning; companies are working to install natural gas fueling stations across the country in preparation for a wave of truck fleets that are being designed to run on natural gas; and utilities are converting to natural gas operations both due to its low price and to meet new emission standards, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 04, 2012
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Feds announce automation of permit process for oil and gas drilling on public lands
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The Obama administration announced yesterday that the processing of permits and leasing decisions for oil and gas drilling on federal onshore lands by the Bureau of Land Management will become automated by May 2013 so as to reduce the average waiting period for approval from 298 days to 60 days or less, The Associated Press reports. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 04, 2012
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For the steel industry, the shale boom is lowering costs while increasing demand
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The shale boom is having two positive effects on the steel industry in the United States – low natural-gas prices are keeping costs down and the need for tubular goods at well sites is keeping demand for steel products up, The Wall Street Journal reports. Natural-gas prices in the United States are so comparatively low that companies abroad are considering relocating to the United States as a cost-saving measure; meanwhile, companies currently in the States are upgrading their equipment and fleets to run on natural gas, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Apr 03, 2012
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EPA delays natural-gas well rules aimed at curbing air pollution
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The U.S. Environmental Protection Agency announced yesterday that it will postpone the release of its first-ever rules for reducing air pollution – particularly methane and smog-forming emissions – related to the hydraulic fracturing process for two weeks so that the agency can review the more than 150,000 comments that have been submitted regarding the rules, The Wall Street Journal reports. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 27, 2012
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Natural gas industry leaders and environmentalists debate hydraulic fracturing
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During The Wall Street Journal-sponsored 2012 ECO:nomics conference last week, Aubrey K. McClendon, chairman and CEO of Chesapeake Energy, and Edward E. Cohen, president and CEO of Atlas Energy, were interviewed by Russell Gold, an energy reporter for The Wall Street Journal, on the subject of whether the feat of developing hydraulic fracturing as a technology has been overshadowed by the industry's loss in the public relations war. While McClendon touted natural gas as the "only scalable, affordable alternative" for those concerned about global warming's connection with coal consumption, Paul Gallay, president of the nonprofit advocacy group Riverkeeper, derided McClendon's use of operations in Fort Worth as proof that hydraulic fracturing is environmentally safe. For more, read an excerpt from the discussion here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 26, 2012
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Growing consensus that faulty wells are to blame for water contamination around drilling sites
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"Some energy companies, state regulators, academics and environmentalists" are reaching the same conclusion that it is not the act of hydraulic fracturing that is responsible for cases of water contamination, but rather the culprits are improperly sealed wells that "create a path for contaminants to migrate upward and leach into shallow porous rocks that hold drinking water," The Wall Street Journal reports. So many contamination cases, including the Deepwater Horizon disaster in April 2010, have been linked back to "failure of the integrity of the well" – usually as part of the cement job – that states are beginning to adopt new well-construction standards. Ohio is expected to issue new such rules this week, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 23, 2012
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EPA will retest Wyoming water for contamination related to hydraulic fracturing
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Amid complaints that the U.S. Environmental Protection Agency rushed the results of initial tests that found hydraulic fracturing operations in Pavillion, Wyoming, responsible for contaminating the region's water supply, the agency announced recently that it plans to work with the U.S. Geological Survey and Wyoming officials to retest the water in an effort to "clarify questions about the initial monitoring results," The Wall Street Journal reports. For more, read the full story here.
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Posted by
L. McAlister in
United States
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Permalink
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Mar 21, 2012
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Williams Partners to buy Caiman Energy subsidiary for $2.5 billion
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Williams Partners LP, which "holds the midstream and interstate-gas-pipeline assets for energy company Williams Cos," is buying Caiman Energy subsidiary Caiman Eastern Midstream LLC in an attempt to gain a foothold in the shale regions of northern West Virginia, southwestern Pennsylvania and eastern Ohio, The Wall Street Journal reports. The $2.5 billion acquisition represents Williams Partners' attempt to drive profits by focusing on its core businesses, including "providing infrastructure to transport natural gas," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 20, 2012
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Environmental reviews may be required before lands leased for drilling are eligible for federal mortgages
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The Department of Agriculture is working to determine whether "issuing mortgages to people who have leased their land for oil and gas drilling" violates the National Environmental Policy Act, which "requires environmental reviews before federal money is spent," The New York Times reports. This comes at the same time that several banks and federal agencies have begun "revisiting their lending policies to account for the potential impact of drilling on property values," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 08, 2012
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Chesapeake and GE team up to make natural gas an appealing transportation fuel
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General Electric and Chesapeake Energy affiliate Peake Fuel Solutions announced a "product and services development partnership" yesterday, representing a "multi-year collaboration between the two companies" to develop solutions that will "lower the ownership and operational costs of natural gas vehicle fueling stations," according to a press release from GE. By incentivizing operators to "put more natural gas vehicles on the nation's highways," the project's aim will be to use the natural gas discovered in the United States domestically in an effort to achieve economic growth and energy security while reducing environmental impacts, the release said. For more, read the full press release here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 08, 2012
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Texas Supreme Court rejects rehearing involving eminent domain / pipeline case
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By refusing to rehear a pipeline case wherein it had previously ruled that Beaumont property owners had the right to challenge whether a pipeline is a "common carrier" with eminent domain rights, the Texas Supreme Court is forcing Denbury Green Pipeline-Texas LLC to take its case back to district court, the Houston Chronicle reports. Although an appeals court said that Denbury Green was a common carrier because it indicated such on the Texas Railroad Commission form, the Texas Supreme Court said that "having a company mark an 'X' in a box on a form wasn't enough to entitle a company to take private property," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 07, 2012
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Production in Texas shale play exceeds expectations
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Oil and gas production from drilling in the Eagle Ford Shale play in central and southern Texas have handily surpassed the admittedly conservative expectations of analysts at the Center for Community and Business Research at the University of Texas at San Antonio, the Corpus Christi Caller Times reports. "Producers drilled 21.8 million barrels of oil in 2011" – more than twice the predicted amount of about 8.6 million – as well as 221 billion cubic feet of natural gas, which far exceeds the prediction of 122 billion cubic feet, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 06, 2012
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EPA study to determine whether hydraulic fracturing contaminates water supplies
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Federal regulators from the U.S. Environmental Protection Agency are investigating whether hydraulic fracturing drilling activities are responsible for contaminating water supplies in the northeastern and southwestern corners of Pennsylvania with methane, heavy metals, manganese and arsenic, among others, The Associated Press reports. While the EPA contends that it is "charged by law with protecting and ensuring the safety of the nation's drinking water," officials from the energy industry, as well as the state, argue that the EPA's presence is intrusive and that its work is duplicative of state regulatory systems, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Pennsylvania
United States
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Permalink
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Mar 06, 2012
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Chesapeake Energy partners with KKR & Co.
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As part of Chesapeake Energy's plan to trim its debt, the Oklahoma-based company announced a $250 million partnership today with private-equity firm KKR & Co. to "invest in U.S. oil and gas fields" by buying mineral rights and royalties from producing fields using upfront sum payments "in exchange for the stream of payments," The Wall Street Journal reports. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Mar 05, 2012
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Article in Rolling Stone prompts response from Chesapeake Energy
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An article titled "The Big Fracking Bubble: The Scam Behind the Gas Boom" featured in the March 15, 2012 issue of Rolling Stone magazine quotes an energy consultant who refers to Chesapeake's business practices as a Ponzi scheme wherein the company leases land, overhypes "the promise of shale gas" in the area, then sells the lease rights at a profit. The article also explores several of the environmental concerns that surround the shale industry. In a press release titled "Chesapeake Responds to the Rolling Stone Story," Chesapeake regarded several portions of the article as "egregious in their misrepresentations or inaccuracies of our company and industry" and offered counter-arguments to several specific points made in the article. For more, read the full Rolling Stone story here and Chesapeake's response to the article here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 28, 2012
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Natural gas prices will hit ten-year low in 2012
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Despite announced production cuts, natural gas prices are "expected to hit a ten-year low in 2012," according to a press release from Energy Solutions, Inc. The natural gas information publisher and advisor said that growth in U.S. natural gas production and record-level storage inventories are responsible for the drop in prices. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 27, 2012
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Obama administration wants drilling royalties on federal lands to match offshore rates
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In light of a recent Government Accountability Office finding that the current royalty rates for oil and gas produced on federal lands is “far lower than what other governments receive,” officials in the Obama administration have voiced their intention to increase the current rate from 12.5 percent to 18.75 percent, according to an article on FuelFix.com. This 50 percent hike would make the royalty rate for oil and gas drilling on federal lands equal to that paid by offshore drillers, the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 24, 2012
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Op-ed piece calls for vehicles to run on methanol
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In a New York Times op-ed piece published yesterday, two former U.S. Cabinet secretaries argued that if the United States would produce cars that run on methanol – a high-octane fuel made from converted natural gas – then gas would be cheaper for consumers and the strategic importance of oil would be reduced. It would cost approximately $100 more to produce a car that runs on methanol (a capability that Chinese automakers have already introduced in their vehicles) than it currently does to produce a normal car in the United States, the piece said. For more read the full op-ed here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 22, 2012
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Profits dip for U.S. energy producers
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Technological developments such as hydraulic fracturing have caused natural gas production and therefore supply to surge at the same time that a mild winter is causing demand – which equates to price – to plummet, Bloomberg Businessweek reports. The result is several of the biggest energy producers in the United States experiencing the greatest decline in profits since the 2008-09 recession, which is driving many of them to curtail natural gas production in favor of the more lucrative oil drilling, the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 21, 2012
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U.S. oil production confounds analysts and complicates projections
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The number of rigs in U.S. oil fields has "more than quadrupled in the past three years to 1,272" and with the inclusion of rigs in natural gas fields, the United States now has "more rigs at work than the entire rest of the world," the Houston Chronicle reports. Despite forecasts stating that this about-face in oil and gas production will soon lead to energy independence for the United States, many analysts think that close ties between domestic crude oil prices and the world market will keep the price of gasoline high in the United States and abroad regardless of domestic production levels, the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 17, 2012
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University of Texas study shows no link between hydraulic fracturing and groundwater contamination
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The Energy Institute of the University of Texas at Austin recently released the results of a study concluding that hydraulic fracturing has no direct connection to groundwater contamination, the Star-Telegram reports. However, issues indirectly related to hydraulic fracturing – such as casing failures, poor cement jobs, above-ground spills and the "mishandling of wastewater from shale-gas drilling" – are responsible for many of the cases of contamination that were initially attributed to hydraulic fracturing itself, the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 17, 2012
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Montana communities struggle with repercussions of the oil and gas boom
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Local government officials in Montana met with county commissioners from across the state this week to discuss the downsides of the Bakken oil development boom, the Billings Gazette reports. Officials complained that the 18-month tax holiday granted to oil and gas operations makes it even more difficult for small communities to deal with the negative impacts that the industry has caused, including "inadequate water and wastewater treatment systems, beat-up gravel roads, scarce housing and strapped services," the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 16, 2012
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Range Resources is an appealing takeover target
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With Fort Worth-based Range Resources Corp. being second only to Chesapeake Energy in terms of Marcellus shale lease ownership, much speculation is being made over the company's ripeness for a merger or acquisition now that natural gas prices have fallen, Bloomberg Businessweek reports. Range shares are trading high and some analysts believe that the company will not sell until gas prices rebound, the article said. For more read the full story here.
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Posted by
M. Warnock in
Pennsylvania
United States
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Permalink
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Feb 15, 2012
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Low natural gas prices allow chemical companies to look stateside again
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As Ohio, Pennsylvania and West Virginia wait with bated breath for Shell's announcement as to the location of its new ethylene cracker plant, chemical industry officials say that low natural gas prices will allow similar petrochemical manufacturing operations to consider constructing facilities in the United States for the first time in several years, NPR reports. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 13, 2012
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Private-equity firms bet on shale
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Private-equity firms completed $24.8 billion of energy deals last year, "nearly triple the $8.5 billion in 2010," The Wall Street Journal reports. These firms often team up with management groups to fortify small, cash-hungry oil and gas explorers; they then profit either by selling these improved companies to a larger producer or taking them public, the article said. For more read the full story here (subscription required).
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Posted by
M. Warnock in
United States
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Permalink
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Feb 10, 2012
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Investors press oil and gas companies on environmental and social risks
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Several leading U.S. investors filed resolutions with Exxon-Mobil, Chevron, Chesapeake Energy, ConocoPhillips and 14 other oil and gas companies on Thursday, pressing them to "disclose their plans for managing environmental and workplace challenges including hydraulic fracturing, greenhouse gas emissions and worker safety," according to a press release from Ceres – a national coalition of investors dedicated to promoting sustainability that coordinated these filings. In the resolutions, investors expressed concerns over the financial risk associated with the growing community opposition to hydraulic fracturing that has resulted in regulatory changes and drilling moratoriums; they also encouraged the companies to be transparent and insisted upon an aggressive pursuit of environmental reforms, the release said. For more read the full press release here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 09, 2012
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Sierra Club received $26 million from Chesapeake affiliates
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It was revealed last week that the Sierra Club, one of the most influential environmental groups in the country, received $26 million in donations from "individuals or subsidiaries" of Chesapeake Energy between 2007 and 2010 – at a time when the group's "Beyond Coal" campaign was promoting natural gas as a cleaner alternative, Politico.com reports. Upon assuming leadership of the Sierra Club in 2010, Executive Director Michael Brune said that he "persuaded its national board to cease accepting the Chesapeake money" and steered the club's position toward reforming and regulating the natural gas industry, the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 02, 2012
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House Republicans push for expanded oil-and-gas drilling to fund infrastructure projects
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House Republicans are preparing legislation that would fund infrastructure projects with revenue gained from opening the Arctic National Wildlife Refuge to drilling, easing restrictions on off-shore drilling and expanding shale projects in Western states by leasing public land, The Hill reports. Although the House Committee on Natural Resources passed these three measures on Wednesday, the bills are expected to face tough opposition in the Democrat-controlled Senate, The Wall Street Journal reports. For more read The Hill story here and The Wall Street Journal story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 02, 2012
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House Republicans push for expanded oil-and-gas drilling to fund infrastructure projects
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House Republicans are preparing legislation that would fund infrastructure projects with revenue gained from opening the Arctic National Wildlife Refuge to drilling, easing restrictions on off-shore drilling and expanding shale projects in Western states by leasing public land, The Hill reports. Although the House Committee on Natural Resources passed these three measures on Wednesday, the bills are expected to face tough opposition in the Democrat-controlled Senate, The Wall Street Journal reports. For more read The Hill story here and The Wall Street Journal story here.
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Posted by
M. Warnock in
United States
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Permalink
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Feb 01, 2012
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Gov. Kasich to discuss shale at national energy conference
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Ohio Gov. John Kasich will participate in a panel discussion on "Public Policy and Shale Gas and Tight Oil Development" during the IHS Cambridge Energy Research Associates' 31st annual conference – known as "CERAWeek 2012, Energy and the Economy: Quest for Growth," which takes place March 5-9 in Houston, The Columbus Dispatch reports. For more read the full story here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jan 31, 2012
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Op-ed piece aims to dispel hydraulic fracturing myths
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Dr. Robert W. Chase, professor and chairman of the Department of Petroleum Engineering and Geology at Marietta College, recently wrote an op/ed piece for The Akron Beacon Journal insisting that the United States cannot afford to let misinformation dictate the shale gas drilling debate. Among the five myths with which Chase disagreed were beliefs that hydraulic fracturing can cause tap water to become flammable; that it can contaminate the aquifers that supply drinking water; and that it is the cause of recent earthquake activity. For more read the full op-ed piece here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jan 30, 2012
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Industry officials decry derogative connotations of the word "fracking"
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Natural gas industry officials are accusing opponents of hydraulic fracturing of deliberately capitalizing on the negative connotations that people make with the word "fracking," according to an article from The Associated Press. While the drilling industry uses the term without the "K," they contend that use of the "K" is a deliberate attempt to associate "fracking" in people's minds with other vulgar, offensive and even violent words, the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 26, 2012
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Chesapeake's multi-faceted debt-reduction plan concerns some analysts
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At the same time that Chesapeake Energy is making the expensive transition away from natural gas production to the more profitable oil production, the company is depending on a "mosaic of joint ventures, asset sales and initial public stock offerings of a subsidiary" to raise approximately $7 billion by year's end in an effort to trim long-term debt, according to an article in The Wall Street Journal. Chesapeake's debt-reduction plan is so complex that investors are having a difficult time deciphering the company's financial holdings, the article said. For more read the full story here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jan 26, 2012
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Energy Department reduces Marcellus shale gas reserves estimate by 66%
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In its Annual Energy Outlook report released yesterday, the U.S. Energy Department decreased its estimate of recoverable gas in the Marcellus shale from 410 trillion cubic feet to 141 trillion – a reduction of 66 percent, according to an article in Businessweek. Estimates of the amount of gas that can be produced from shale basins nationwide decreased 42 percent from 827 trillion cubic feet to 482 trillion, the article said. The Marcellus reserves are now projected to be capable of meeting U.S. gas demand for six years, down from the estimate of 17 years reported in last year's outlook. For more read the Businessweek article here and the early release version of the Annual Energy Outlook report here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jan 26, 2012
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Energy Department reduces Marcellus shale gas reserves estimate by 66%
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In its Annual Energy Outlook report released yesterday, the U.S. Energy Department decreased its estimate of recoverable gas in the Marcellus shale from 410 trillion cubic feet to 141 trillion – a reduction of 66 percent, according to an article in Businessweek. Estimates of the amount of gas that can be produced from shale basins nationwide decreased 42 percent from 827 trillion cubic feet to 482 trillion, the article said. The Marcellus reserves are now projected to be capable of meeting U.S. gas demand for six years, down from the estimate of 17 years reported in last year's outlook. For more read the Businessweek article here and the early release version of the Annual Energy Outlook report here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jan 26, 2012
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Energy Department reduces Marcellus shale gas reserves estimate by 66%
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In its Annual Energy Outlook report released yesterday, the U.S. Energy Department decreased its estimate of recoverable gas in the Marcellus shale from 410 trillion cubic feet to 141 trillion – a reduction of 66 percent, according to an article in Businessweek. Estimates of the amount of gas that can be produced from shale basins nationwide decreased 42 percent from 827 trillion cubic feet to 482 trillion, the article said. The Marcellus reserves are now projected to be capable of meeting U.S. gas demand for six years, down from the estimate of 17 years reported in last year's outlook. For more read the Businessweek article here and the early release version of the Annual Energy Outlook report here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jan 25, 2012
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President Obama pledges support for the shale industry, urges safety
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President Obama pledged his support to the shale industry during his State of the Union address last night, but insisted that the resource be developed in a way that does not compromise the health and safety of American citizens, according to an article in Reuters. The president also called for an end to tax breaks for the oil and gas industry, the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 24, 2012
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Ohio should dodge Chesapeake's cutbacks
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As Chesapeake Energy responds to the lowest natural-gas prices in decades by reducing its dry natural gas drilling activities, the company intends to shift its focus "toward areas rich in oil and natural-gas liquids, such as propane," which includes Ohio's Utica shale formation, according to an article in The Columbus Dispatch. For more read the full story here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jan 23, 2012
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Low natural-gas prices cause Chesapeake to curtail production
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Chesapeake Energy announced that it will reduce natural-gas drilling and production operations in response to mild winters and ample supply forcing down the price of natural gas, and also as part of the company's long-term debt reduction plan, an article in The Wall Street Journal reports. Chesapeake will reduce dry gas drilling activity from 47 dry gas drilling rigs to 24 by the second quarter of 2012, and will keep "dry gas drilling capital expenditures at $900 million in 2012, compared with $3.1 billion last year," the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 17, 2012
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Energy companies bet on coal regulations to drive up natural gas prices
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Despite a 30 to 40 percent drop in natural gas prices in the last year (See Jan. 12, 2012 blog – "Natural gas production is up despite plummeting prices"), energy companies are betting that a new wave of environmental regulations will cause many potential customers to switch from coal to natural gas, according to an article in EnergyBiz. Many companies are finding it "easier and cheaper to retire their older, smaller coal units" in favor of the cleaner-burning natural gas than it would be to retrofit these facilities into compliance, the article said. Read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 12, 2012
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Natural gas production is up despite plummeting prices
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"Despite a 32% drop in prices last year, onshore production [of natural gas] rose 10% and is expected to rise another 4%," according to a recent article in The Wall Street Journal. Three main factors are forcing domestic energy companies to continue this market irregularity: an obligation to drill so as to fulfill the terms of leases and not lose the money used to purchase them; an obligation to foreign energy companies that supplied money specifically for drilling operations; and the fact that natural gas is a byproduct of oil drilling, which is still currently profitable.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 06, 2012
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Shale boom keeps major law firms busy
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As foreign companies continue to buy stakes in shale plays in North America, law firms are scrambling to "snap up lateral hires who [can] cater to energy industry clients," according to an article in The American Lawyer. Fulbright & Jaworski not only advised Total in its agreement with Chesapeake to purchase a "25 percent stake in Chesapeake's 619,000-acre Utica Shale parcel in eastern Ohio," it also advised China's Sinopec International Petroleum Exploration and Production (SIPC) on the deal with Devon that resulted in SIPC paying Devon $900 million in exchange for a "one-third stake in five different Devon operations," the article said. In these recent transactions, "Chesapeake turned to longtime outside counsel C. Ray Lees, as well as lawyers from Wachtell, Lipton, Rosen & Katz and Wilmer Cutler Pickering Hale and Dorr," while Sinopec used Vinson & Elkins, the article said. For more read the full story here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Jan 06, 2012
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Enterprise pipeline to transfer natural gas from Appalachia to Texas
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The Herald-Star reports that Houston-based Enterprise Products Partners is constructing an Appalachia-to-Texas pipeline – known as the ATEX Express – that will transport 190,000 barrels of ethane daily across 1,230 miles from the Ohio Valley to Texas. Approximately 75,000 of the barrels hauled by this pipeline will come from Chesapeake Energy operations, the article said. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 04, 2012
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Another major U.S. shale stake sold to foreign energy company
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Bloomberg Businessweek reports that China-based Sinopec International Petroleum Exploration & Production Corp. has purchased a third of Devon Energy Corp.'s interest in five new shale gas ventures for $2.2 billion. Announced just days after French-based Total SA acquired a 25 percent stake in Chesapeake Energy's Utica shale holdings (see Jan. 03, 2012 blog – "Total SA is Chesapeake's new partner for financing shale development in Ohio"), the two sales signify a growing interest in U.S. natural gas from foreign companies. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Jan 03, 2012
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Energy company plans major pipeline that will transport natural gas from West Virginia to the East Coast
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The Williams Companies Inc., an Oklahoma-based corporation, is in the preliminary stages for the construction of a 36-inch pipeline that would carry gas 260 miles from Natrium, West Virginia, to York County, Pennsylvania, the Daily American reports. The project – dubbed the Atlantic Access Pipeline – is the largest undertaking for the company to date. If realized, the company plans to transport "more than a billion cubic feet of natural gas per day of Appalachian gas supplies to eastern markets by late 2014," the article said. Read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 27, 2011
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Natural gas from shale drilling is a game changer that comes with risks and reservations
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An article in The Columbus Dispatch reports that in less than a decade the United States could "edge past Saudi Arabia and Russia to become the world's top energy producer." Oil and natural gas from shale drilling are primarily responsible for the country's switch from importer to potential exporter of oil and gas, the article said. Although financial perks from the shale boom can be seen through the expansion of the hospitality industry in small towns and reduced energy costs for consumers, environmental concerns with regard to hydraulic fracturing continue to hamper widespread acceptance of drilling activities. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 22, 2011
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Gas companies and major manufacturers spar over exports
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The Wall Street Journal reports that major manufacturers like Dow Chemical Co. oppose efforts by energy producers to export natural gas because they say it will drive up the price of domestic gas. Companies in Asia and Europe pay three to four times the price for natural gas compared to the United States, where the recent shale boom has eliminated the need for imported gas, the article said. In the coming weeks, the Energy Department will address concerns regarding natural gas exportation – such as whether it crimps the supply available to U.S. users and drives up the domestic price – as well as potential benefits in the form of job creation and the offsetting of the large U.S. trade deficit. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 08, 2011
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Louisiana wells produce record amounts
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According to a press release on the Natural Gas of America’s website, Louisiana’s Haynesville shale formation has more than 1,060 wells that are producing record amounts of natural gas and that is only expected to increase with nearly 1,000 more wells ready to go online in the near future.
In addition to lessening the nation’s need to import natural gas, it has also boosted the local economy for some of Louisiana’s poorer areas; however, the release indicates the “boom’s effect on the state’s budget has been limited, however, by a generous exemption granted to energy producers that dramatically limits the taxes they must pay in the first two years of a well’s production — usually its prime period.” Read the full release here.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 07, 2011
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Despite large reserves of natural gas, Europe will probably not experience the same economic boom as U.S.
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An in-depth article featured in The Economist explains why – despite Europe's comparable shale gas reserves – the anticipated natural gas boom will likely not take off there like it has in U.S. Not only is Europe's gas tougher to extract geologically, its oil and gas industry and infrastructure pale in comparison to America's. A higher population density makes the visibility of oil and gas operations more noticeable for residents, who do not possess the same immediate financial incentive to lease land because most of the land rights in Europe belong to the state. For more read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 07, 2011
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Natural gas is proving a boast for the railroad industry
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An article in Progressive Railroading reports that Marcellus gas exploration is catching up to ethanol production as the fastest-growing traffic opportunity for the Norfolk Southern Railroad, whose territory encompasses "much of the current drilling in the shale area." For Marcellus Shale-related hauls, which are mainly frac sand but also include cement and equipment, NS Railroad has grown from 6,000 carloads in 2009 to 24,000 carloads in 2010. For more, including additional statistics, read the full story here.
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Posted by
M. Warnock in
United States
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Permalink
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Dec 05, 2011
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Ohio Republican candidate for Senate accuses local and federal politicians of giving into environmentalists at the expense of jobs
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In a opinion piece featured in The Wall Street Journal, current Ohio State Treasurer and Republican candidate for the U.S. Senate Josh Mandel accuses local and federal politicians of supporting environmental "fringe extremists" over the job-creating oil and gas industry when they chose to delay both the leasing of oil and gas rights for national forests as well as the approval of the Keystone XL pipeline. For more, read the full opinion piece here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Dec 02, 2011
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The New York TImes posts copies of more than 100,000 oil and gas leases on its website
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A recent review by The New York Times of more than 100,000 recent oil and gas leases and addenda in the Appalachian Basin has resulted in a treasure trove of information on the newspaper's website. As The New York Times explains, "[o]ver 100,000 of the documents in the archive are from Tarrant County, Tex., roughly 3,200 are from New York, and the remainder are from states including Maryland, Ohio, Pennsylvania and West Virginia." To access the database of oil and gas leases, click here. To read a corresponding article regarding the importance of reviewing the terms of an oil and gas lease, click here.
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Posted by
M. Warnock in
Ohio
Pennsylvania
United States
West Virginia
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Permalink
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Nov 28, 2011
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Oil and gas leases may violate mortgage and homeowner's insurance policies
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An article in The New York Times reports that several provisions in oil and gas leases are "expressly forbidden" in many mortgage and homeowner's insurance contracts. There is mounting concern among regulators and lawmakers that a landowner may inadvertently invalidate his or her mortgage and /or home owner's insurance policy by signing leases with oil and gas companies. "In Ohio, bank regulators sent a letter in September to state lawmakers warning that if borrowers did not get their lenders' consent before signing a drilling lease, they would be violating the terms of their mortgage," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Nov 18, 2011
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Chesapeake to spin off company in public stock offering
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The Wall Street Journal reports that Chesapeake Energy Corp., the most active drilling company in the United States, is pulling a collection of businesses it has created into one company – Chesapeake Oilfield Services LLC – and intends to have a public stock offering next year. Chesapeake will retain the majority of shares in this company as well as control of the board. According to the article, this move will boost the company’s share price and make it “one of the largest service firms in the country with "114 drilling rigs, a vast trucking fleet and a hydraulic-fracturing business.”
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Posted by
M. Warnock in
United States
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Permalink
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Nov 17, 2011
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Recent hearing provided education on fracturing and potential new regulations
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On November 15, 2011, U.S. Rep. Bob Gibbs R-Lakeville, chair of the House Subcommittee on Water Resources and Environment, held a hearing to look at potential new regulations of hydraulic fracturing by the U.S. Environmental Protection Agency. Gibbs stated his concern about unnecessary regulation of the industry by the EPA, noting that no one has been able to say that fracing — which has been used for decades — has caused any problems in the United States. Gibbs’ subcommittee will focus on how water is handled after the hydraulic fracturing process is completed. Read the New Philadelphia Times Reporter story here.
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Posted by
S. Bloomfield in
United States
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Permalink
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Nov 10, 2011
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Report indicates that shale lawsuits are on the rise
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A report from IGSwebnews.com indicates that shale lawsuits in the United States are on the rise. Dozens of lawsuits have been filed in the U.S. involving: (i) landowners shale suing over the terms in their oil and gas leases; (ii) landowners who do not own the oil or gas rights under their property suing based on nuisance claims; (iii) claims of physical injury; and (iv) claims of diminution in property value. The report also notse that insurance agents are being cautioned to become educated about the type of leases being signed and to advise their clients to “take a close look” at the leases with the help of a lawyer, and perform “careful” underwriting.
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Posted by
M. Warnock in
United States
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Permalink
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Nov 08, 2011
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Natural gas giant Chesapeake Energy faces perplexing issue
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According to an article in The Wall Street Journal, natural gas giant Chesapeake Energy signed a letter of intent to jointly develop approximately 10 percent of Chesapeake's land in the Utica shale with another energy company. If and when this joint venture is completed, it will be the seventh deal for Chesapeake. Additionally, Chesapeake plans to incorporate more land into a newly formed subsidiary and then offer up to $1.25 billion of callable preferred stock. Despite Chesapeake's rapid growth, some analysts believe Chesapeake will have a large funding gap in the coming year and that these financing deals reflect Chesapeake's need to reduce net debt.
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Posted by
T. Siwo in
United States
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Permalink
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Nov 07, 2011
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The revolution of Shale gas in America
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An article in The New York Times reports that Shale gas now represents 30 percent of American natural gas supplies, which is a great increase from just 1 percent back in 2000. With this growth, it is estimated that the U.S. possesses a 100-year supply of this cleaner and less expensive energy source compared to coal-fired plants. An additional benefit of the Shale revolution is the expansion of jobs that range from Texas to Pennsylvania and Ohio. However, even with the many advantages of the Shale revolution, forces remain divided between the industry and environmentalists who remain skeptical.
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Posted by
T. Siwo in
Ohio
Pennsylvania
United States
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Permalink
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Nov 07, 2011
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Texas-based energy partnership proposes Ohio pipeline to move Shale across to Gulf Coast
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Enterprise Products Partners L.P. is planning a pipeline that would transport ethane from the Marcellus and Utica shale across 13 Ohio counties to the Gulf Coast. This will make up nearly a quarter of the 1,230-mile proposed pipeline which is expected to be in operation by 2014 and have a production capacity of 125,000 barrels a day. Although a construction date has not been set, Enterprise Products Partners L.P. is seeking permission to conduct land surveys in Ohio. The original article in its entirety can be found here.
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Posted by
T. Siwo in
Ohio
United States
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Permalink
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Nov 03, 2011
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Chesapeake announces joint venture with unnamed international energy company
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As the biggest player in Ohio's Utica shale play, Chesapeake Energy Corporation just announced two transactions designed to "monetize a portion of its 1.5 million net acres of leasehold in the Utica Shale play primarily in eastern Ohio," explains a release on Chesapeake's website. The two transactions include: (1) a joint venture with an unnamed international energy company that will provide Chesapeake's joint venture partner with a 25% interest in approximately 650,000 acres in Ohio's wet gas shale play; and (2) the sale of $500 million of preferred shares of stock in CHK Utica (a wholly owned subsidiary of Chesapeake) to EIG Global Energy Partners. The release also indicated that Chesapeake intends to sell up to $750 million in additional shares of preferred stock o investors by the end of November, and made a drilling commitment of 50 wells per year through 2016.
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Posted by
M. Warnock in
Ohio
United States
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Permalink
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Oct 27, 2011
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County commissioners in Ohio pass resolution encouraging oil and gas producers to hire locally
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According to the New Philadelphia Times Reporter, a board of county commissioners in Ohio passed a resolution encouraging oil and gas producers to hire local union workers for jobs related to drilling in the Marcellus and Utica shale formations. The Harrison County commissioners passed the resolution in hopes of improving the high unemployment rate. A representative with a local trade association explained that neighboring Wetzel, West Virginia has the largest drilling activity in the region, however, Wetzel's unemployment rate jumped by more than one percent at the end of the summer. It is his position that "if these companies give our work force a chance, they'll see our people can produce and we'll get this job done at a high efficiency rate and it will benefit the economy and have a tremendous impact in this area."
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Posted by
T. Siwo in
Ohio
United States
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Permalink
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Oct 26, 2011
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Texas business deal reflects confidence that natural gas will power the U.S. for decades
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The Houston Chronicle reported in a recent article that Kinder Morgan purchased natural gas giant, El Paso Corp. for $21.1 billion, showing confidence in the future of shale gas although the political outlook remains unclear. Federal legislation which would likely drive new demand for the fossil fuel to power vehicles has stalled in Washington. During this time, federal regulators are considering going in the opposite direction by imposing new regulations on natural gas drilling. However, a senior consultant with research firm Frost & Sullivan quotes that, "[t]he resounding success of shale gas exploration will remain a key driver of growth for the pipeline industry for years to come." As a result of this deal, Kinder Morgan will become the largest North American owner and operator of natural gas pipelines and storage facilities.
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Posted by
T. Siwo in
United States
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Permalink
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Oct 24, 2011
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New drilling technology drives oil rush in North Dakota
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The Star Tribune reports that new advances in horizontal drilling and multi-stage hydraulic fracturing, often referred to as fracking, has expanded drilling into thin rock formations. The use of high-tech sensors and computer technology has largely contributed to North Dakota's rapid growth in daily oil production. For example, North Dakota went from producing 110,000 barrels of oil per day in 2006 to nearly 444,000 per day in 2011. According to these trends, North Dakota is expected to become the second-highest oil producing state, following Texas. This economic oil rush is a large reason why North Dakota currently posts the nation's lowest unemployment rate.
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Posted by
T. Siwo in
United States
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Permalink
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Oct 24, 2011
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Newspaper in the United Kingdom Highlights Shale Boom in the United States
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An analysis in the United Kingdom's Daily Telegraph by Ambrose Evans-Prichard notes that the United States was the single largest contributor to the growth in global oil supply last year, and that its output is set to reach as much as 5.5 million barrels per day by 2015. The article further notes that the United States meets about 72% of its own oil needs, a number which has increased from 50% just 10 years ago. An additional benefit to the United States is the return to of a number of manufacturing companies from overseas (e.g. ET Water Systems and Master Lock). Mr. Evans-Prichard concluded the article by noting that the "21st Century my be American after all, just like the last."
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Posted by
M. Warnock in
Miscellaneous
United States
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Permalink
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Oct 20, 2011
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New York Times article focuses on effect of oil and gas leases on existing mortgages
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A recent article in the New York Times examines the interplay between oil and gas leases and existing mortgages. Although lenders believe "technical defaults" on mortgages could result from new oil and gas leases, the article noted that "conflicts between leases and mortgage rules are not likely to cause foreclosures, nor have they resulted in broad litigation or legislation." One of the more pressing issues is how major secondary purchasers or mortgages (e.g. Fannie Mae or Freddie Mac) deal with the issue. The article stated that "If local banks do not require that leases comport with mortgage rules, Fannie Mae and Freddie Mac may stop buying mortgages from these banks." Although there remains a lot of uncertainty about this issue, it is an issue that landowners should consider when negotiating an oil and gas lease.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 19, 2011
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Perry pledges decreased regulation on oil and gas industry
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Texas Gov. Rick Perry has unveiled a plan that he claims would create 1.2 million new jobs and ease the nation’s dependence on foreign oil, according to an article appearing on the New York Times website. Perry announced the plan in a speech to workers at the U.S. Steel Plant in West Mifflin, PA on Oct. 14. Key parts of Perry’s plan are the use of executive decrees to allow new drilling on federal lands and in the Gulf of Mexico, and the dismantling of the Environmental Protection Agency and replacing it with a newer, smaller bureau.
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Posted by
M. Warnock in
Pennsylvania
United States
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Permalink
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Oct 19, 2011
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Increasing number of certification and training programs in fields related to natural gas
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The Associated Press reports that an increase in job prospects related to the growing natural gas industry has lead many community colleges and universities to expand their course offerings. From two-week programs to doctoral degrees, certification and training programs in fields related to natural gas are being created or expanded across the Northeast and out West. U.S. Department of Labor grants are helping to fund such programs. These programs are designed to help workers in economically depressed areas take advantage of jobs with median earnings anywhere from $70,000 to $106,000. However, the article noted that such workers may have to migrate over time, "following the drilling rigs as they move from place to place."
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Posted by
M. Warnock in
Miscellaneous
United States
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Permalink
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Oct 14, 2011
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Obama Administration to announce new rules on natural gas drilling
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Interior Department Secretary Ken Salazar announced on October 5 that the Obama administration will soon be announcing new rules governing natural gas drilling on federal lands, according to an article on Fuelfix.com. Administration officials have stated that one of the forthcoming rules may include a requirement forcing oil and gas drillers using the hydraulic fracturing process to disclose all chemicals that they are injecting into the ground. While petroleum industry experts claim that the chemicals used are safe, environmental groups and some Democrats on Capital Hill have raised concerns about the their safety, especially with regard to their possible effects on groundwater. The article also notes that any proposed rule from the administration governing the chemical disclosure of fracking fluids would go through a lengthy deliberative process.
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Posted by
M. Warnock in
Miscellaneous
United States
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Permalink
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Oct 07, 2011
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Gas and oil-rich Eagle Ford shale exploration is driving job growth in southern Texas
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A recent article in Corpus Christi’s Caller.com news website chronicles the ramp-up of gas and oil exploration in the Eagle Ford shale region of southern Texas. With over 188 wells drilled in the region since exploration began in 2008, energy producers churned out 101 billion cubic feet of natural gas during the first half of 2011. Analysts estimate that in the three counties in Eagle Ford where there is direct gas and oil production, the total amount of jobs created either in energy or as a ripple effect in other industries now tops 1,500.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 03, 2011
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Oil companies flare significant amounts of natural gas produced in North Dakota
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The New York Times reports that oil companies working in the Bakken shale in North Dakota are targeting the oil rich shale deposits in North Dakota to take advantage of the high crude oil prices. However, those same companies have resorted to flaring more than 100 million cubic feet of natural gas each day due to the unfavorable economics associated with natural gas production. The flaring operations result in approximately 2 million tons of carbon dioxide being emitted annually. Although flaring of natural gas at this scale might be unique to the United States, it is common in Russia, Nigeria and Iran. Because there are few government regulations that limit flaring, environmentalists and others worry that this type of flaring could also happen in Ohio.
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Posted by
M. Warnock in
United States
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Permalink
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Oct 03, 2011
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Specialty sand mining a booming business
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Mining specialty sands used in the hydraulic fracturing process is booming in Texas. This sand, which was formed from an ancient sea near Voca, Texas 500 million years ago, is uniform, round and comprised primarily of quartz or silica. Its "strength and purity" are resulting in tons being purchased by oil and gas companies. In fact, the Houston Chronicle reported that "[f]racturing sand costs an average $110 per ton and has risen by about 10 percent since January 2010."
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Posted by
M. Warnock in
United States
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Permalink
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Oct 03, 2011
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Constitutional dispute arises in New York over town's attempt to ban oil and gas drilling
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A constitutional dispute has arisen in the State of New York pitting the home rule powers of New York local towns to ban oil and gas drilling operations against state law, reports Thomson Reuters. The case itself involves the attempt by the town of Dryden, a suburb of Itha | |