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British shale pioneer to push back against local council

Shale pioneer Cuadrilla Resources says it will appeal county decision to deny permits for a drilling campaign that would include hydraulic fracturing. Photo courtesy of Cuadrilla Resources LONDON, July 24 (UPI) — British shale pioneer Cuadrilla Resources said it planned to appeal June’s decisions by a county council to deny permits for a hydraulic fracturing campaign. "We have given careful consideration to appeal the planning decisions taken by Lancashire County Council," Cuadrilla Chief Executive Officer Francis Egan said in a statement. "This is a natural step in the democratic process for deciding any planning application." The council in Lancashire last month voted to refuse a permit to start a hydraulic fracturing campaign in the Preston New Road and Roseacre Wood sites. The council said it refused the applications because of noise and visual impact concerns, and "potentially severe" impacts on road infrastructure and traffic, respectively. In the past, the […]

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Chesapeake to Eliminate Dividend to Pay for Capital Spending

Chesapeake Energy Corp. CHK -9.54 % said Tuesday that it will eliminate its shareholder dividend starting in the third quarter and redirect the money to capital spending, the latest round of cutbacks for the U.S. shale driller. Shares of Chesapeake, down 48% this year, fell 1.2% to $10.15 a share in premarket trading. Chesapeake estimated that getting rid of the annual dividend of 35 cents a share will save the company $240 million a year. The company plans to use the money for its 2016 capital program. Chesapeake said it has also agreed to sell some properties to FourPoint Energy LLC. Chesapeake has struggled to recover from years of aggressive spending as the land-grab approach the company pioneered for oil and gas drilling meant it spent more than its wells generated in profit. But under Doug Lawler, who joined as chief executive in June 2013, the company has been […]

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Study shows more hospital stays in three fracking counties

A fracking operation is set up on this farm near Dimock in Susquehanna County. A new study shows that in Susquehanna, Bradford and Wayne counties, people who live near fracking wells were more likely to have hospital visits. (CAROLYN COLE / LOS ANGELES TIMES) Researchers comparing hospital visits in three rural Northeast Pennsylvania counties found a higher rate of hospital visits in counties with a heavy gas industry presence. Residents of heavily drilled Bradford and Susquehanna counties were admitted to hospitals at higher rates than in neighboring Wayne County where drilling is banned, University of Pennsylvania and Columbia University researchers stated in a paper published in the peer-reviewed PLOS One scientific journal last week. The researchers used hospital-reported inpatient data from 2007, when drilling began, to 2011, the latest year available, said Penn Medicine researcher Dr. Reynold Panettieri Jr., one of the study’s authors. Relying on 95,000 inpatient records, […]

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Oh frack, now there’s radiation in Pennsylvania’s water

Drilling a horizontal shale gas well in Appalachia In Fredericktown, Pennsylvania, water that feeds into a Pittsburgh treatment plant has been found to contain more than 60 times what is considered the safe level of radiation. The water Dufalla tested? It’s from Ten Mile Creek, which eventually feeds into a nearby water treatment plant. Not surprisingly, it’s not good to have 60 times the maximum allowed radium in drinking water, and it’s not something that’s easy to filter out. Drinking water is just one concern. There’s also the fish swimming in radium-tainted water to worry about. Oh, well, if the gas industry officials said it, it has to be true, right? This is nothing new, though. Tests proved even higher levels of radiation were present in Pennsylvania’s streams two years ago . Just last week, fracking in Pennsylvania was linked to higher rates of cancer, skin conditions, heart disease […]

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Study: Utica Shale Larger Than Previous Estimates

The technically recoverable resources of the Utica shale play are larger than previously thought, according to a study from West Virginia University. The size of the Utica shale play’s technically recoverable resources is larger than previously thought, a recent study by West Virginia University (WVU) has found. WVU found that the Utica play contains technically recoverable resources of 782 trillion cubic feet (Tcf) of natural gas and around 1.9 billion barrels of oil. That’s higher than the U.S. Geological Survey’s (USGS) 2012 estimate of technically recoverable resources at 38 Tcf of gas and 940 million barrels of oil. The study results indicate that the Utica – which spans West Virginia, Kentucky, Pennsylvania, Ohio and New York – is comparable to the Marcellus shale play in terms of size and potential recoverable resources. The Marcellus is the large U.S. shale play and second largest shale oil and gas play in […]

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London proposes new fracking restrictions

British government proposes pulling some parts of the country off the table for hydraulic fracturing. Photo courtesy of Cuadrilla Resources. LONDON, July 16 (UPI) — The British government boasted of its environmental track record Thursday, saying it was taking steps toward excluding some areas from hydraulic fracturing. "The United Kingdom has one of the best track records in the world when it comes to protecting our environment while also developing our industries – and we’ve brought that experience to bear on the shale gas protections," Energy Minister Andrea Leadsom said in a statement. The British government published draft regulations that would place groundwater aquifers, as well as parks and heritage sites, off limits to potential hydraulic fracturing activities. Shale energy is in its infancy in the country, though Leadsom said the government was committed to developing the sector safely and economically. Her comments follow the publication of a set […]

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Shale Gas Supply Held Hostage by Oil to Drop by Most in a Year

(Bloomberg) — After four years of record supply, America’s natural gas output is showing signs of weakness as producers retreat amid tumbling oil prices. Gas production from the seven largest U.S. shale basins will fall 0.6 percent to 45.1 billion cubic feet a day in August from a month earlier, the biggest drop since March 2014, the U.S. Energy Information Administration said Monday in its monthly Drilling Productivity report. EIA estimates have shown supply declines since June. The government’s forecasts signal the collapse in crude oil prices, which have plunged by about half over the past year, is reverberating in the natural gas market. As drillers shut wells in liquids-rich deposits from North Dakota to Texas, they’re also curtailing gas output from those reservoirs. That may prevent further price declines for gas, which has slid almost a third over the same period. “Gas is being held captive by oil,” […]

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Shale Gas Bulldozer Runs Over Pessimists

“…why do operators keep drilling while their own over-production has depressed the price of natural gas by half of its value?” Art Berman, 2010 Thirty years ago, at an energy conference at M.I.T., I made a presentation about our research on natural gas supply, and opened with a joke. (That is, intentional humor.) The gas industry, I noted, kept saying that prices were too low to cover their costs, while continuing to drill. What could explain this? Management psychology? Animal spirits? Finance theory (option valuations)? No, the explanation was found in “The Journal of Abnormal Psychology.” The joke was much appreciated, except by the natural gas producers in the audience. Now, the same question could be raised. After all, for most of a decade, predictions of a production collapse have floated around the punditsphere, while estimates of the breakeven price have tended to be well above those which have […]

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Accelerating Shale Gas Declines Show Supply Held Hostage by Oil

Natural gas output from U.S. shale formations is set to fall for a third straight month after the collapse in crude prices forced drillers out of fields that yield both oil and gas. After four years of record supply, natural gas output is showing signs of weakness as producers pull back amid tumbling oil prices. Gas production from the seven largest shale basins will fall 0.6 percent to 45.1 billion cubic feet a day in August from a month earlier, the biggest drop since March 2014, the U.S. Energy Information Administration said Monday in its monthly Drilling Productivity report. EIA estimates have shown supply declines since June. The government’s forecasts signal that the 51 percent collapse in crude oil prices since June 20, 2014, is reverberating in the natural gas market. As drillers shut wells in liquids-rich deposits from North Dakota to Texas, they’re also curtailing gas output from […]

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Gas overtakes coal at US power stations

The US generated more of its electricity from gas than from coal for the first time ever in April — in a sign of how the shale boom is putting mounting pressure on the country’s mining industry. Plunging prices for natural gas, which have fallen alongside oil since last summer, led to it being used to generate 31 per cent of America’s electricity in April, while coal contributed 30 per cent. This was the first month in US history that gas-fired electricity generation surpassed coal-fired generation, according to SNL Energy, a research firm — although it came close in 2012 when gas prices were also very weak. In 2010, coal provided 45 per cent of US power. Since then, competition from cheap shale gas — unlocked by the rise of horizontal drilling and hydraulic fracturing — plus a growing regulatory burden on coal-fired power plants, has squeezed out coal […]

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Gas overtakes coal at US power stations

The US generated more of its electricity from gas than from coal for the first time ever in April — in a sign of how the shale boom is putting mounting pressure on the country’s mining industry. Plunging prices for natural gas, which have fallen alongside oil since last summer, led to it being used to generate 31 per cent of America’s electricity in April, while coal contributed 30 per cent. This was the first month in US history that gas-fired electricity generation surpassed coal-fired generation, according to SNL Energy, a research firm — although it came close in 2012 when gas prices were also very weak. In 2010, coal provided 45 per cent of US power. Since then, competition from cheap shale gas — unlocked by the rise of horizontal drilling and hydraulic fracturing — plus a growing regulatory burden on coal-fired power plants, has squeezed out coal […]

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US EIA predicts natural gas output growth to resume in July despite declines

Work on a pipeline capacity expansion project slowed natural gas production in the Marcellus shale play in recent months, but output is expected to kick back into high gear in July and keep pace with a projected 5.7% increase in production from last year, the US Energy Information Administration said Tuesday in its monthly outlook. EIA, in its July Short-Term Energy Outlook, forecast gas marketed production at 78.65 Bcf/d for the second quarter and 79.28 Bcf/d for Q3, down 130 MMcf/d and 100 MMcf/d, respectively, from the agency’s June estimate. EIA said in the report that Northeast production dipped in May and June because of maintenance and construction in the Marcellus producing area, contributing to a 1.2 Bcf/d drop in average output between April and June. It noted that Transcontinental Gas Pipe Line has restricted capacity on parts of the Leidy Line that delivers gas from the Marcellus to […]

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Energy Companies Can Be Sued Over Earthquakes, Oklahoma Supreme Court Says

The Oklahoma Supreme Court ruled Tuesday that a woman injured in a 2011 earthquake can file suit in district court against the two energy companies she accuses of causing the quake. The ruling raises the prospect of more lawsuits seeking to hold companies responsible for an increase in seismic activity in the state, as more scientific studies link the tremors to the energy industry. In particular, the studies have found evidence tying quakes to operations that inject wastewater left over from drilling into wells deep underground. Sandra Ladra of Prague, Okla., about 60 miles east of Oklahoma City, sued New Dominion LLC and Spess Oil Co. last summer for injuries she sustained during a 5.6-magnitude quake that toppled her stone chimney. The lawsuit in Lincoln County District Court contends that the companies caused the quake by injecting wastewater into nearby wells. The companies argued that they lawfully operated their […]

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Green group’s unconventional fight against fracking

The residents of Grant Township, Pennsylvania, were worried about Little Mahoning Creek, a picturesque trout stream best fished in the spring when the water runs fast. The Pennsylvania General Energy Company had acquired a federal permit to drill an injection well down 7,000 feet about seven miles from the creek to dispose of wastewater from its natural gas hydraulic fracturing operations. Fearing the operation would harm the Little Mahoning watershed, the town’s supervisors last year passed a "community bill of rights" that blocked the well, stripped the company of its right to inject wastewater underground, and declared that the state had no jurisdiction in the matter. The ordinance, they openly acknowledged, was likely to be challenged, and defending its legality would be difficult. Driven largely by opposition to hydraulic fracturing, commonly known as fracking, communities across the United States have passed or are considering measures to assert their right […]

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New York formalizes ban on fracking, ending 7-year review

ALBANY, N.Y. (AP) — New York formalized its ban on high-volume hydraulic fracturing for natural gas on Monday, concluding a seven-year environmental and health review that drew a record number of public comments. "After years of exhaustive research and examination of the science and facts, prohibiting high-volume hydraulic fracturing is the only reasonable alternative," Department of Environmental Conservation Commissioner Joe Martens said in announcing the decision. "High-volume hydraulic fracturing poses significant adverse impacts to land, air, water, natural resources and potential significant public health impacts that cannot be adequately mitigated." In its decision, the DEC noted that more than 260,000 public comments were submitted on its environmental impact study and proposed regulations, an unprecedented number. The agency said most of the comments urged it to severely restrict or prohibit fracking. New York is the only state with significant natural gas resources to ban fracking, which has allowed other states […]

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Pennsylvania Governor and Fracking Sector Face Off on Budget, Regulations

A fracking rig drills for natural gas on a site in Washington Township, Pa. Since taking over from a Republican administration this year, Democratic Pennsylvania Gov. Tom Wolf repeatedly has said he supports the state’s booming shale gas industry. But lately, the industry hasn’t been sure he really does. State regulators, who have begun reviewing dozens of environmental cases the previous administration didn’t take action on, recently imposed an $8.9 million fine for a gas well they said is contaminating drinking water—the largest ever against a gas operator in state history. The state is also proposing a raft of stricter drilling rules to prevent wastewater from contaminating drinking water sources. And industry officials are upset that the Wolf administration earlier this month slashed its estimate of Pennsylvania jobs supported by the shale-gas industry to 89,000 from the previous administration’s estimate of more than 200,000. Gov. Tom Wolf, right, listens […]

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Burket-Geneseo Shale: The Next Super Giant?

Located above the Marcellus Shale in the Appalachian Basin, the Burket-Geneseo Shale “could be the next super giant field,” but the play is still well in its infancy and the current Marcellus development could jeopardize the ability of operators going back in down the road to pull those additional reserves, according to Gregory Wrightstone of Wrightstone Energy Consulting. Speaking before a crowd at DUG East in Pittsburgh, PA, on Thursday, Wrightstone said the Burket-Geneseo, which could be classified as a super giant field — 30 Tcf or greater — is often overlooked and overshadowed by the Marcellus. The Burket refers to most of Pennsylvania and the West Virginia portions, while the Geneseo is considered to cover northeast Pennsylvania and southern New York. It lies just above the Marcellus, from less than 100 feet of separation in West Virginia to more than 800 feet in northeastern Pennsylvania. It is the […]

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Argentina and China lead shale development outside North America in first-half 2015

map of Neuquen Basin and Sichuan Basin, as explained in the article text As recently as last year, only four countries in the world were producing commercial volumes of either natural gas from shale formations (shale gas) or crude oil from tight formations (tight oil): the United States and Canada, and more recently, Argentina and China. Beyond these four countries, other countries have started exploring hydrocarbons from shale and other tight resources, but they are still short of reaching commercial production. The 2013 World Shale Gas and Shale Oil Resource Assessment , produced by EIA and Advanced Resources International (ARI), noted large shale deposits in China and Argentina. Exploration and drilling is already underway in these countries. For the last two years, China has drilled more than 200 wells, and Argentina has drilled more than 275 wells. Each country has the potential to significantly increase production of shale gas […]

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Northern England County Rejects Fracking Site

An English county government rejected one of two applications for hydraulic fracturing for natural gas on Thursday, setting the stage for a decisive vote on the drilling technique next week. The Lancashire County Council voted against allowing privately held Caudrilla Resources Ltd. to use horizontal drilling and fracking at the company’s Roseacre Wood site in northwest England over worries about the increase in traffic. County planning officials had recommended the application be rejected. The council’s planning committee now is set to decide whether to give the go-ahead for a second site, also in Lancashire, on Monday. That site had been recommended for approval by planning officials and was supposed to have been voted on Wednesday, but councilors decided to wait until Monday to consider legal advice. If approved, it would be the first site to be fracked in western Europe since 2011. Cuadrilla said it was disappointed but not […]

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Oklahoma drilling regulator calls spike in quakes a ‘game changer’

A spike in earthquakes across Oklahoma is forcing the state’s energy regulator to urgently consider tougher restrictions on drilling activity, a spokesman said on Wednesday, calling it a "game changer." From June 17 to 24, there have been 35 earthquakes of magnitude 3.0 or greater in the state, according to the Oklahoma Geological Survey. Particularly worrying for regulators, some of the recent quakes occurred in the Oklahoma City metropolitan area, where there are no high-volume wastewater injection wells. The spike in quakes comes roughly two months after new rules governing the disposal of briny wastewater from drilling took full effect. Drillers were directed by the Oklahoma Corporation Commission (OCC), which regulates the oil and gas industry, to stop disposing wastewater below the state’s deepest rock formation, believed to be one of the main causes of the quakes, and to reduce the depth of wells that already go that deep. […]

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U.K. Panel to Decide on Fracking

PRESTON, England—A bare patch of land amid the wheat and barley fields and cow pastures of northwest England’s countryside has become the focus of a question vexing Europe: to frack or not to frack? This week, the hub of the debate is the Lancashire County Council, which heard from both sides Tuesday, and is expected to decide Wednesday whether to allow the first onshore hydraulic fracturing for shale gas in Western Europe since 2011. The controversial drilling technique has unleashed an oil and gas boom in the U.S. in the past decade, but it has proved politically toxic in Europe , where lawmakers have blocked it. Fracking, which uses a mixture of sand, chemicals and water at high pressure to crack open energy reserves buried deep in shale formations, has been on hold in the U.K. after a series of minor earth tremors followed the first well fracked here […]

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Pressure mounts against British fracking

Din growing louder as debate over fledgling British shale natural gas industry moving closer to crucial phase. Photo by David Gaylor/Shutterstock PRESTON, England, June 23 (UPI) — British advocacy group Friends of the Earth said that, with the nation’s fracking debate in full swing, the interests of local communities should prevail. A local council in Lancashire is reviewing two separate proposals by energy company Cuadrilla Resources to explore for natural gas in regional shale deposits. The council in mid June recommended approval for a campaign with as many as four drilling sites and hydraulic fracturing. The recommendation was subject to restrictions ranging from hours of work to noise pollution. A second application was recommended for refusal because of the potential for an increase in traffic on the rural highway network. "Fracking could have a hugely damaging impact on Lancashire residents and their environment and cause more climate-changing pollution to […]

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Energy Industry Is Gassing Down

Natural gas is flared off at a plant outside of the town of Cuero, Texas. U.S. energy companies are taking their foot off the natural-gas pedal, slowing down their production growth after years of furious pumping. In the past eight years, a combination of improvements in drilling techniques and high energy prices stoked natural-gas production to all-time highs. The boom quickly sent natural-gas prices to historic lows, but output kept rising because high oil prices made it profitable for producers to keep tapping fields that yielded both oil and gas. Now, the global collapse in oil prices has producers and analysts rethinking the gas boom, too. Both gas and oil prices are down about 40% in the past year, cutting the incentive to keep drilling. A flurry of recent forecasts from government and private-sector experts suggest monthly gas production will flatten and possibly even begin to decline in 2015. […]

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Big US Shale Field Marcellus Faces Output Drop Due To Low Gas Prices

May 28 (Reuters) – Natural gas production in the Marcellus shale, which has grown over the past decade from next to nothing to the source of about a fifth of U.S. output, may decline for the first time if prices in the basin remain low for much longer, according to federal government data. Such a reduction may be worrisome since the United States is counting on the Marcellus to continue producing vast amounts of cheap gas needed to meet growing demand from industrial customers and power generators, and to enable the country to transition into a net gas exporter by 2017. The U.S. Energy Information Administration says production in the fast-growing field in Pennsylvania and West Virginia is set to remain flat for the next few years before beginning a very slow decline primarily because of depressed gas prices. Recent data supports signs of a slowdown. The number of […]

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New York fracking ban closer to law

State report from New York finds uncertainty surrounding hydraulic fracturing and may pave the way to making the governor’s ban formal law. File Photo by UPI/Kevin Dietsch. ALBANY, N.Y., May 14 (UPI) — Parts of the Marcellus shale natural gas play in New York may be off limits to hydraulic fracturing because of potential adverse risks, a state review found. New York Gov. Andrew Cuomo banned the use of hydraulic fracturing , or fracking, as a means of extracting natural gas after a years-long study by environmental and health officials. His December move triggered a review from the state Department of Environmental Conservation, which found "significant uncertainty remains" regarding the risks to public health and the environment that would result from fracking in the state. Interstate movements on fracking have been fluid since a moratorium was first introduced in 2008. A federal report finds that, while the amount of […]

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New York environmental report calls for more fracking restrictions

New York has released its long-awaited report on high-volume hydraulic fracturing, which appears to cast doubt on whether the state will ever give a green light to the drilling completion practice, which essentially has been prohibited since 2008. The Department of Environmental Conservation released Wednesday the final supplemental generic environmental impact statement on fracking "that identifies and examines continued major uncertainties about potential significant adverse health and environmental impacts associated with the activity," according to a statement. The DEC will issue its formal findings statement after a required 10-day period in accordance with the state’s Environmental Quality Review Act. In a statement, DEC Commissioner Joe Martens said he would rely on the conclusions of the FSGEIS when he issues his findings statement. New York has had a de facto moratorium on fracking since 2008 while it first began to develop rules and regulations to govern the practice, which has […]

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Study shows proposed Pennsylvania gas severance tax would be costly

HOUSTON, May 7 A proposed natural gas severance tax in Pennsylvania would have negative economic consecutives for the state, according to a Natural Resource Economics Inc. study released May 7 by the Associated Petroleum Industries of Pennsylvania (API-PA). “Higher energy taxes could put a damper on energy activity, and the commonwealth could be worse off with a new severance tax,” said Stephanie Wissman, API-PA executive director. “Natural gas development supports hundreds of thousands of jobs in Pennsylvania, contributes $34.7 billion annually to the state economy.” The report, “The Economic Impacts of the Proposed Natural Gas Severance Tax in Pennsylvania,” analyzed the impact of Gov. Tom Wolf’s proposal to implement an additional gas severance tax. Proposals include adding 5% on the gross market value of production plus a fixed fee of 4.7¢/Mcf produced and establishing an artificial floor of $2.97/Mcf regardless of the actual gas price ( OGJ Online, Mar. […]

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Marcellus Production Outlook

Has Well Productivity Peaked in the Nation’s Largest Shale Gas Play? The Marcellus shale gas play of Pennsylvania and West Virginia came onto the scene in 2007 in a big way and has grown to become the nation’s largest. It has accounted for much of the growth of U.S. shale gas production, and made up for declines in former shale gas giants like the Haynesville and Barnett plays of Louisiana and eastern Texas. Companies have scrambled to build pipeline infrastructure to connect the Marcellus to consumers in the U.S. northeast. Canadians, once supplied by gas from western Canada, are also looking to the Marcellus (and the much smaller Utica play in Ohio) for future supply; the pipelines that delivered gas to the east might be converted to instead deliver bitumen from the western tar sands. Companies in both the northeastern U.S. and eastern Canada are looking to build LNG […]

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Projections show U.S. becoming a net exporter of natural gas

Source: U.S. Energy Information Administration, Annual Energy Outlook 2015 (interactive table viewer) In its recently released Annual Energy Outlook 2015 (AEO2015), EIA expects the United States to be a net natural gas exporter by 2017. After 2017, natural gas trade is driven largely by the availability of natural gas resources and by world energy prices. Increased availability of domestic gas or higher world energy prices each increase the gap between the cost of U.S. natural gas and world prices that encourages exports of liquefied natural gas (LNG), and, to a lesser extent, greater exports by pipeline to Mexico. The AEO2015 examines alternate cases with higher and lower world oil price assumptions, which serve as a proxy for broader world energy prices given oil-indexed contracts, as well as with higher assumed U.S. oil and natural gas resources. These assumptions significantly affect projected growth in annual net LNG exports after 2017. […]

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US to launch blitz of gas exports

US to launch blitz of gas exports thumbnail The United States is poised to flood world markets with once-unthinkable quantities of liquefied natural gas as soon as this year, profoundly changing the geo-politics of global energy and posing a major threat to Russian gas dominance in Europe. “We anticipate becoming big players, and I think we’ll have a big impact,” said the Ernest Moniz, the US Energy Secretary. “We’re going to influence the whole global LNG market.” Mr Moniz said four LNG export terminals are under construction and the first wave of shipments may begin before the end of this year or in early 2016 at the latest. “Certainly in this decade, there’s a good chance that we will be LNG exporters on the scale of Qatar, which is today’s largest LNG exporter,” he said, speaking on the margins of the IHS CERAWeek energy summit in Texas. Qatar exports […]

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Chesapeake to Pay $25 Million to Settle Michigan Charges

Chesapeake Energy Corp. has agreed to pay $25 million to settle antitrust allegations made by Michigan’s attorney general, as well as complaints that it misled hundreds of landowners to obtain leases in the state. Michigan Attorney General Bill Schuette filed criminal charges against the company last year . He accused Chesapeake of colluding with Encana Corp., another oil and gas producer, to keep the price of natural gas leases in the state artificially low. In a separate case, Mr. Schuette’s office also filed racketeering and false pretenses charges against Chesapeake, saying the company had defrauded lease owners. Chesapeake has previously called the cases meritless. On Friday a spokesman said the Oklahoma City-based company was happy to have settled the matter. “We are pleased to have reached a mutually acceptable agreement with the Michigan Attorney General and to move past these legacy issues inherited from past management,” said Gordon Pennoyer, […]

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CERA 2015: Resilient Marcellus gas drillers are the ‘problem’: E&P executive

Major improvements by natural gas exploration-and-production companies have allowed them to continue to drill profitably in a period of depressed prices, adding to the glut of gas and putting further pressure on prices, an E&P executive said Wednesday at the IHS CERAWeek conference in Houston. "What’s happening is that we continue to get better and get more production per rig," Kyle Mork, president of Energy Corporation of America, said in reference to the seeming paradox of growing US natural gas production despite a record low level of rigs. "We’re the problem," he said. It is common knowledge in the industry that the main reason why natural gas prices — both Henry Hub and prompt-month futures — are trading at levels not seen since 2012 is because of the phenomenal growth in US natural gas production led by the Marcellus Shale. Article continues below… Gas Daily offers the most detailed […]

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Study: North Texas quakes likely linked to gas drilling

HOUSTON, Apr. 22 A seismology team in a study led by Southern Methodist University found high volumes of wastewater injection combined with brine extraction from natural gas wells was “the most likely” cause of earthquakes near Azle, Tex., during 2013-14. In an area where the seismology team identified two intersecting faults, they developed a 3D model to assess the changing fluid pressure within a rock formation in the affected area. They used the model to estimate stress changes induced in the area by two wastewater injection wells and more than 70 gas wells. “The model shows that a pressure differential develops along one of the faults as a combined result of high fluid injection rates to the west and high water removal rates to the east,” said Matthew Hornbach, SMU associate professor of geophysics. “When we ran the model over a 10-year period through a wide range of parameters, […]

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The case for an extraction tax

First, some background on U.S. natural gas sources and markets. Most of our country’s gas is consumed in the major population centers of the northeast, the so-called Washington-to-Boston corridor. It’s cold here in the winter and a number of homes use gas as a primary heat source. Gas is also used year-round to heat water, cook and dry clothes. Business and industry use gas to heat and cool buildings and it’s increasingly used for power generation. Starting around World War II and prior to the shale gas boom of the past eight years, most of the natural gas used in Pennsylvania came out of the ground in Oklahoma, Texas and under the Gulf of Mexico — yes, there are pipelines on the sea floor. (Fuel coming from outside Pennsylvania is referred to below as imported gas.) There is already major infrastructure in place to bring imported gas here. Large, […]

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Permian shale gas pipeline to Mexico announced

ONOEK Partners announces plans to build pipeline to carry gas from the Permian shale basin in Texas to the Mexican market. UPI/Hamid Forotan/ISNA TULSA, Okla., April 2 (UPI) — A new 200-mile long pipeline will carry natural gas from a shale basin in Texas to an international connection at the Mexican border, ONEOK Partners announced. The company, which has headquarters in Oklahoma, said it formed a joint venture with Mexican gas transmission company Fermaca Infrastructure to build the Roadrunner pipeline that would transport gas from the Permian shale basin in Texas to the Mexican market. "We see Roadrunner as a gateway asset that will connect Mexico’s rapidly growing natural gas markets with U.S. producers in the developing Permian basin," ONEOK President and Chief Executive Officer Terry Spencer said in a statement. Roadrunner will extend 200 miles from ONEOK’s existing WesTex gas transmission system in Texas to an international connection […]

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Shale Crews Being Watched From Above as Emissions Levels Tested

There is an eye in the sky above U.S. shale oil and natural gas basins. Well, more like a nose. Through April, the National Oceanic & Atmospheric Administration will be flying above the basins from North Dakota to Texas collecting air samples to document if drilling is adding to ground-level ozone, said Joost de Gouw , a research scientist at NOAA’s Earth Systems Research Lab in Boulder, Colorado. “We do that with a focus on air quality,” said de Gouw, also a senior scientist and fellow at the Cooperative Institute for Research in Environmental Sciences at the University of Colorado at Boulder. “What are the reactive trace gases that are being released? How much methane is released from these activities?” Breathing ozone triggers a variety of health problems for children, the elderly and anyone with lung diseases such as asthma. It’s produced when sunlight mixes with nitrogen oxides and […]

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Chesapeake Energy Cuts Capital Budget, Production Outlook

Chesapeake Energy Corp. on Monday slashed its 2015 capital budget by more than 10% and sharply lowered its production outlook, becoming the latest energy company to do so in response to lower oil prices. Separately, billionaire investor Carl Icahn said he has boosted his stake in Chesapeake Energy to nearly 11% from nearly 10%. Mr. Icahn now owns 73.1 million Chesapeake shares, financial filings show, but he isn’t the company’s largest investor. The No. 1 spot still belongs to Southeastern Asset Management Inc., which has 76 million share, or an 11.4% stake. Oil producers have announced plans to curb billions of dollars in capital spending this year, aimed in part at stabilizing the recent declines in energy prices. The Oklahoma City-based oil and natural gas driller reduced its spending plans to between $3.5 billion and $4 billion, down from a previous range of $4 billion to $4.5 billion. The […]

Posted On : Published By : Tom Whipple
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Are The Good Times Over For Growth In US Shale Gas?

US natural gas production could decline in 2016 for the first time in 10 years, driven by low oil prices after a decade of gangbusters growth from shale plays. March 17 (Reuters) – U.S. natural gas production could decline in 2016 for the first time in 10 years, driven by low oil prices after a decade of gangbusters growth from shale plays. While most analysts forecast gas production will continue growing year-over-year, albeit at a slower pace, a couple of outlier analysts believe low oil and gas prices will prompt drillers to cut spending enough to reduce gas production next year. Any talk of cutbacks is an early sign that low oil prices have slowed the U.S. shale gas boom that has revolutionized global markets and is expected to transform the nation into a net exporter of gas by the end of the decade. U.S. gas production has increased […]

Posted On : Published By : Tom Whipple
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Chesapeake’s $4-4.5 billion capex down 37% vs. last year

HOUSTON, Feb. 25 02/25/2015 Chesapeake Energy Corp. , Oklahoma City, is budgeting total capital expenditures, including capitalized interest, of $4-4.5 billion for 2015. Using the midpoint of the range, it represents a 26% reduction compared with the company’s 2014 capital expenditures before acquisitions of $5.8 billion, and a 37% reduction from the company’s 2014 total capital expenditures of $6.7 billion. Chesapeake for 2014 reported net income available to common stockholders of $1.273 billion. The primary component of this increase was unrealized gains on the company’s oil and natural gas commodity derivatives, partially offset by the redemption of all the outstanding preferred shares of a subsidiary. Adjusting for these items, full-year adjusted net income available to common stockholders was $957 million, compared with adjusted net income available to common stockholders of $965 million in 2013. Notably during the fourth quarter, the company received $5.1 billion of net proceeds from asset […]

Posted On : Published By : Tom Whipple
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The hearty, hardy gas production of the US

It seems like only yesterday that big winter storms or other extreme weather events could curtail or shut natural gas production in the US. A winter storm and freezing temperatures in the Northeast or in the Southeast would prompt freeze-offs or shut-ins along pipelines. But perhaps no longer. When I joined Platts as a gas markets reporter in February 2011 — another abnormally cold winter (at least in Houston) — I would see cash markets bounce around as freeze-offs and other shut-ins shook up prices. In a testament to fast-growing natural gas production and infrastructure, though, particularly in the Northeast, Hurricane Sandy had a minimal impact to Marcellus gas production in 2012. Gas pipelines also fared well in the aftermath of the hurricane. A year ago, in a winter that is widely regarded as being insanely cold, things appeared to fall more in line with historical expectations.  Freeze-offs in the Northeast […]

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Chesapeake Energy Sues Ousted Founder

ENLARGE Aubrey McClendon, former chief executive of Chesapeake Energy, called the company’s lawsuit “baseless” and accused Chesapeake of trying to breach his severance agreement. Photo: Reuters Chesapeake Energy Corp. sued its ousted founder, Aubrey McClendon , claiming Tuesday that he stole sensitive data in the days before he left in 2013. The company alleges that Mr. McClendon, while still running the company, had his assistant print out maps and data about oil and gas prospects in Ohio and sent the same information to his personal email address. “Due to the concealed nature of McClendon’s conduct, Chesapeake did not discover McClendon’s misappropriation until long after he had separated from Chesapeake,” the company stated in a lawsuit filed in Oklahoma County District Court. Mr. McClendon, who founded rival American Energy Partners LP after leaving Chesapeake, called the lawsuit “baseless” and accused Chesapeake of trying to breach his severance agreement. American Energy […]

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Ohio City Loses Fight for Control Over Oil and Gas Drilling

In this Wednesday, Jan. 4, 2011 file photo, a brine injection well in Youngstown, Ohio. (Bloomberg) — An Ohio city lost a battle for control over oil and gas drilling permits within its borders with the Ohio Supreme Court saying the authority belongs to the state. The ruling on Tuesday runs counter to decisions issued by New York’s top court last year and the highest Pennsylvania court in 2013 as local municipalities concerned over the effects of hydraulic fracturing seek to limit the practice. More than 400 measures to prevent or control fracking have been passed by U.S. cities and counties according to Food & Water Watch, a Washington-based environmental advocacy group. The process, which involves the injection of water, chemicals and sand below ground to extract oil and gas from shale formations, has been criticized as environmentally dangerous, even as its use has driven U.S. natural gas production […]

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Shale industry irked by Pennsylvania tax proposal

Pennsylvania Gov. Tom Wolf is making few friends in the shale natural gas industry with early-term policies. Photo courtesy Commonwealth of Pennsylvania HARRISBURG, Pa., Feb. 12 (UPI) — The state’s governor said gas taxes will help schools, but an energy coalition working in Pennsylvania said it will discourage capital spending plans in shale. Arguing schools have suffered from $1 billion in funding cuts, Pennsylvania Gov. Tom Wolf proposed a severance tax on gas extraction in the state to help right the state’s economic ship. The state hosts the Marcellus shale natural gas formation, which accounts for almost 40 percent of all shale gas produced in the United States. The governor’s proposal, dubbed the Pennsylvania Education Reinvestment Act, calls for a 5 percent tax plus 4.7 cents per thousand feet of gas extracted. The governor said the proposal is modeled after severance tax plans in other states in the region, […]

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London pressed to ban fracking

British government out of step with regional trends to place a moratorium on hydraulic fracturing. UPI/Kevin Dietsch LONDON, Feb. 5 (UPI) — An environmental advocacy group said it’s time for the British government to follow its peers and enact a moratorium on hydraulic fracturing. The Welsh parliament voted in favor of a measure proposed by Liberal Democrat assemblyman Aled Roberts to ban the shale drilling practice known commonly as fracking. The measure calls on the Welsh government to prevent fracking operations "unless it is proven to be safe for the environment and public health." Donna Hume, a campaigner with the regional Friends of the Earth, said the British government needs to follow suit . "It’s time the government stopped trying to get this damaging and unpopular industry off the ground and started prioritizing energy efficiency and renewable energy," she said in a statement Wednesday. The Scottish government in late […]

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Pennsylvania reinstates drilling moratorium

Pennsylvania Gov. Tom Wolf reinstates moratorium on oil and gas leases in state land. (Photo: Commonwealth of Pennsylvania) Louis D’Amico, president and executive director of the Pennsylvania Independent Oil & Gas Association, said the moratorium struck a blow against an industry that’s already returned more than $700 million in revenue to the state in the last seven years. "This is a lose-lose for Pennsylvania’s taxpayers and energy consumers," he said in a statement Thursday. His comments follow a decision from state Gov. Tom Wolf to reinstate a moratorium on oil and gas leases in state parks and forests. A ban was enacted in 2010 by Gov. Ed Rendell , but modified last year by Gov. Tom Corbett to allow drillers to explore for oil or gas so long as it didn’t interfere with land integrity. Wolf said the decision was about striking a balance to economic vitality and preservation. […]

Posted On : Published By : Tom Whipple
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Pennsylvania Governor Bars New Oil and Gas Drilling in State Parks, Forests

By Kris Maher The natural gas industry sharply criticized Pennsylvania Gov. Tom Wolf’s decision Thursday to reinstate a moratorium on future drilling in state parks and forests, which includes cases where private landowners own the mineral rights beneath parks. Mr. Wolf, a Democrat who took office two weeks ago, signed an executive order barring new leases for oil and gas development on those public lands. Unlike with state forests, Pennsylvania doesn’t own the mineral rights for the vast majority of land beneath state parks. At a public signing, Mr. Wolf noted that the parks in the state are visited by 38 million people annually, support more than 13,000 jobs and bring in $1.2 billion to the state’s economy. "Natural gas development is vital to Pennsylvania’s economy, but so is the economic and environmental viability of our parks and forests," Mr. Wolf said. Dave Spigelmyer, head of the Marcellus Shale […]

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Texas RRC oil and Gas Production Data

The Texas Railroad Comission  has released their oil and gas production data for November. As most of you know, the Texas RRC data is always incomplete. Some data is updated immediately but the rest trickles in slowly, sometimes taking many months to years to complete. Nevertheless we can glean some indication of what is happening from what data is reported. That is, if production is increasing, then the incomplete month to month data should be increasing. And it is, but very slowly. The last data point in all charts below is November 2014 and the oil is in barrels per day. Texas crude only is still increasing but the increase rate seems to be slowing down. Texas RRC Condensate It is rather hard to tell what condensate is doing but the rate if increase, if any, seems to be slowing. Texas RRC C+C Combining the two we see a […]

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Shale Gas Lobby Backfires in Pennsylvania

Sign image via weaverphoto/flickr. Creative Commons license. 2.0. This past November, Gov. Tom Corbett became the first standing governor in the last 40 years in Pennsylvania to lose a second term reelection. As the GOP scored overwhelming victories nationally that November night, incumbent Gov. Corbett lost by more than 325,000 votes to Democrat Tom Wolf. Corbett was a powerful first term governor who oversaw the huge shale gas industry drilling boom in the Pennsylvania Marcellus Shale formation which vaulted the state into the middle of a unexpected U.S. energy boom. By the time Corbett took office for his first term, Pennsylvania’s shale gas industry was creating jobs in several of the depressed regions of the state and had created an opportunity for a tax revenue base which would have been the envy of virtually all mid-Atlantic and northeast region states. Yet these facts did not translate into success for […]

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Power generation to be biggest demand driver for natural gas: API

Houston (Platts)–8Jan2015/245 pm EST/1945 GMT A continued increase in demand for natural gas for use in power generation is expected to be the biggest driver for US gas demand in the coming year, the chief economist of the American Petroleum Institute said. "The biggest trend is probably what we’ve seen in previous years and that’s more natural gas in power generation, as we see more coal plants shut down, primarily for environmental regulations," John Felmy said in an interview Wednesday. "You may see some increases in industry use as the economy improves and perhaps some commercial [demand], but I think electric power is going to be the biggest growth." According to the "The State of American Energy Report 2015," API’s annual outlook on US energy trends for the new year released earlier this week, "The United States has vaulted past Russia to become the world’s largest natural gas producer […]

Posted On : Published By : Tom Whipple