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Are We Underestimating America’s Fracking Boom?

Start with exotic Nazi technology, take a detour with South African apartheidists, and add a bit role for Iranian imams. What you have is—what else? —one of the most improbable and important American business stories of the past decade. It’s the tale of a company called , the former South African state oil company, which is embarking on what could be the single-largest foreign investment project in U.S. history. Sasol is building a 3,034-acre energy complex near a bayou in Lake Charles, La. Tapping into cheap, fracked natural gas as well as the pipeline and shipping infrastructure along the Gulf Coast, Sasol plans to spend as much as $21 billion there. It is expensive, elaborate and dirty work. Sasol plans to reduce, or "crack," the gas into ethylene, a raw chemical used in plastics, paints and food packaging. It also plans to convert the gas into high-quality diesel and […]

Posted On : Published By : Tom Whipple
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In Fracking Hotbed, a Muted Approach to Regulation

Ohio annually processes thousands of tons of radioactive waste from hydraulic-fracturing, sending it through treatment facilities, injecting it into its old and unused gas wells and dumping it in landfills. Historically, the handling and disposal of that waste was barely regulated, with few requirements for how its potential contamination would be gauged, or how and where it could be transported and stored. With the business of fracking waste only growing, legislators in 2013 had the chance to decide how best to monitor the state’s vast amounts of toxic material, much of it being trucked into Ohio from neighboring states. But despite calls to require that the waste be rigorously tested for contamination, Gov. John Kasich and the state legislature signed off on measures that require just a fraction of the waste to be subjected to such oversight. The great majority of the byproducts creating during the drilling process – […]

Posted On : Published By : Tom Whipple
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Michigan gas stocks at end of October to be 18% lower year on year: PSC

The amount of natural gas in Michigan storage facilities at the end of October, the traditional end of the injection season, is expected to be about 18.47% less than was expected to be storage at the same point a year ago, figures from the state Public Service Commission show. The PSC said Friday it estimates there will be 499.4 Bcf in Michigan storage facilities at the end of October and estimates there will be 392 Bcf in storage at the end of December. PSC records show the regulator projected there would be 612.5 Bcf in storage in October 2013 and expected 409.1 Bcf would be in storage at the end of December 2013. Actual figures for the 2013 months were not immediately available from the PSC. Michigan, with its mixed economy, is considered by some to be a bellwether state for northern tier state economies. In its latest forecast […]

Posted On : Published By : Tom Whipple
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No Weaning Europe Off Russian Gas Says Gazprom

Gazprom’s boss said on Friday that Europe will become only more dependent on Russia for its supplies of natural gas in the near future as Asia is absorbing alternative supplies from Middle East countries. Alexei Miller also warned that global competition for Russian output is heating up as this week’s $400-billion gas deal between the Russian energy giant and China’s CNPC showed. "Gazprom was, is and will remain number one supplier to Europe", Mr. Millar said at the St. Petersburg Investment Forum. Mr. Millar’s comments come as Europe reassesses its economic ties with Russia, notably its dependence on the country for nearly a third of gas supplies, as relations have deteriorated with the deepening crisis in Ukraine after Russia’s annexation of Crimea in March. Gazprom has benefited from growing global competition for liquefied natural gas, Gazprom’s chief executive said, with the company intent […]

Posted On : Published By : Tom Whipple
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Weekly Natural Gas Storage Report

Historical Comparisons Stocks billion cubic feet (Bcf) Year ago (05/16/13) 5-Year average (2009-2013) Region 05/16/14 05/09/14 net change implied flow (Bcf) % change (Bcf) % change East -38.6 -46.2 West -36.9 -33.2 Producing -37.7 892 -42.5     Salt 140 126 237 -40.9 188 -25.5     Nonsalt 373 358 586 -36.3 704 -47.0 Working gas in storage was 1,266 Bcf as of Friday, May 16, 2014, according to EIA estimates. This represents a net increase of 106 Bcf from the previous week. Stocks were 774 Bcf less than last year at this time and 943 Bcf below the 5-year average of 2,209 Bcf. In the East Region, stocks were 449 Bcf below the 5-year average following net injections of 65 Bcf. Stocks in the Producing Region were 379 Bcf below the 5-year average of 892 Bcf after a net injection of 29 Bcf. Stocks in the West Region were 115 […]

Posted On : Published By : Tom Whipple
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Natural Gas Weekly Update

Industrial natural gas consumption growth continues rising Providing another sign of continued growth in industrial demand for natural gas, two European companies announced earlier this month that they would form a joint venture to build an ammonia plant on the Gulf Coast. BASF, a German chemicals company, and Yara, a Norwegian agricultural company, plan to build the plant on an existing BASF site in Freeport, Texas. The plant would have a capacity to produce 750,000 metric tons of ammonia per year and could use up to 77 million cubic feet per day (MMcf/d) of natural gas as a feedstock. BASF and Yara announced in October that they were planning an ammonia plant, and cited relatively low natural gas prices over the past several years as a reason for locating the plant in the United States. After industrial natural gas consumption bottomed out in 2009 at 16.9 Bcf/d, it has […]

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North Carolina Senate Outlaws Disclosure Of Fracking Fluid Secrets

The North Carolina Senate on Thursday voted to make it a crime to disclose the chemicals used in hydraulic fracturing, or fracking, even as big U.S. oil companies elsewhere consider releasing more information about the fluids to address public concerns about the environment. The legislation, proposed by three Republican state senators and passed by a vote of 35-12, aims to protect trade secrets about fluids used to extract oil or gas from wells using fracking, which blasts sand, water and chemicals deep beneath the earth’s surface. Environmentalists concerned about groundwater contamination and health risks want more information made public. Under the "Energy Modernization Act," a state geologist would be the custodian of confidential information about fracking fluids. The information can be given to healthcare providers, the public safety department or the fire chief in case of an emergency. The bill, which now goes to the […]

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Sanchez to buy Eagle Ford acreage from Shell for $639 million

Sanchez Energy Corp. , Houston, has agreed to acquire 100% working interest in 106,000 net acres in Dimmit, LaSalle, and Webb Counties, Tex., from Royal Dutch Shell PLC for $639 million, effective Jan. 1. The agreement is expected to close at the end of the second quarter. The sale includes 176 operated producing wells and associated field facilities and infrastructure. The assets consist of 60 million boe of proved reserves and 24,000 boe/d of average first-quarter production, with 60% liquids. Sanchez’s total position in the Eagle Ford will amount to 226,000 acres with as many as 3,000 potential drilling locations. The company’s average production rate for this year’s first quarter will rise to 42,800 boe/d, which includes an estimated Catarina production rate of 20,000 boe/d. Total proved reserves will increase 100% to 119 million boe. The acquired assets are expected to generate a substantial amount of near-term cash flow […]

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House stumps for natural gas infrastructure

WASHINGTON, May 20 (UPI) –The U.S. House Energy and Commerce Committee says it’s time to build domestic natural gas infrastructure before winter energy demands increase. The committee said legislation passed in the House in late 2013 — the Natural Gas Pipeline Permitting Act — would facilitate the construction of gas pipeline infrastructure needed to keep supplies moving when demand is at its highest. "Even as we enter the hot summer months, we know winter will come again soon," a committee statement read Monday. "And the only way to bring down heating prices in the future is to build new infrastructure now." The bill would require the Federal Energy Regulatory Commission to make a decision on new pipelines within 12 months. Detractors of the measure said FERC already acts quickly and, if passed in the Senate, the bill would do little to address high heating costs across the board. Nevertheless, […]

Posted On : Published By : Tom Whipple
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Chiyoda Wins $10 Billion Canada LNG Plant Order

TOKYO—Japan’s Chiyoda Corp. , in partnership with three other companies, has won a contract to design and build a $10 billion natural gas liquefaction terminal in western Canada, which is expected to supply gas to Japan and other parts of Asia. The project, in Kitimat, British Columbia, is one of a number of Canadian developments under way seeking to tap into growing demand in Asia for liquid natural gas. Japan, in particular, is expected to need large amounts of LNG as it fills a gap in its energy supplies from reduced use of nuclear power after the 2011 accident at the Fukushima Daiichi plant. But projects in British Columbia have been slowed by concerns over the potential environmental impact and questions about the costs of development. Chiyoda and another Japanese engineering concern, Corp. , have been active bidders for contracts to build LNG plants, a complex task that involves […]

Posted On : Published By : Tom Whipple