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Exxon to Face Regulators’ Questions Over Quakes

Texas regulators are scrutinizing some of the biggest U.S. energy producers in the wake of several earthquakes that have rocked the Dallas-Fort Worth area. An Exxon Mobil Corp. XOM 0.07 % subsidiary and EOG Resources Inc., EOG 2.63 % one of the biggest shale-oil and gas pumpers, are facing questions about their use of injection wells to dispose of wastewater from hydraulic fracturing operations. The state’s oil-and-gas regulator on Wednesday begins a series of hearings in Austin to assess some oil companies’ role in causing the temblors. A growing body of scientific research from federal, state and academic researchers suggests that disposal wells, often used to get rid of the dirty water leftover from fracking and brine from oil-and-gas production, may be linked to increased seismic activity. Some in the energy industry are trying to discount those studies. The commission’s seismologist, Craig Pearson, has also expressed doubts that fracking […]

Posted On : Published By : Tom Whipple
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EPA Study: Fracking Puts Drinking Water Supplies at Risk of Contamination

Water splash image via shutterstock. Reproduced at Resilience.org with permission. The Environmental Protection Agency has released its long awaited draft assessment of the impacts that fracking has on the nation’s drinking water supplies — confirming that the process does indeed contaminate water. “From our assessment, we conclude there are above and below ground mechanisms by which hydraulic fracturing activities have the potential to impact drinking water resources,” the EPA wrote. The impacts take a variety of forms, the EPA wrote, listing the effects of water consumption especially in arid regions or during droughts, chemical and wastewater spills, “fracturing directly into underground drinking water resources,” the movement of liquids and gasses below ground “and inadequate treatment and discharge of wastewater.” The agency wrote that it had documented “specific instances” where each of those problems had in fact happened and some cases where multiple problems combined to pollute water supplies. Environmental […]

Posted On : Published By : Tom Whipple
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Floods Threaten Bakken Producers

North Dakota experienced its wettest May on record and all the rain is causing trouble for some oil and gas producers. The region had almost 8 inches of rain last month and now flood waters threaten operators near the confluence of the Missouri and Yellowstone rivers. More rain is expected and could cause raise flood levels to 22 feet by this weekend. North Dakota regulators have stepped up inspections and are urging producers to take precautions. Inclement weather can easily wreak havoc on the energy infrastructure including well flooding, road closures and truck bans. Related: Wet Weather Forcing Delays in Bakken Oilfield Alison Ritter, a spokeswoman for the state Department of Mineral Resources, said 13 companies were notified to secure their equipment. “The well sites might not flood but the access roads might,” Ritter said. “So we want to make sure they have everything secure now in case they […]

Posted On : Published By : Tom Whipple
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Bakken gets federal crime strike force

Federal task force created to tackle organized crime in the Bakken oil fields of Montana and North Dakota. Photo by photostock77/Shutterstock WASHINGTON, June 4 (UPI) — State and federal authorities announced the creation of a "strike force" aimed at addressing organized crime in and around the Bakken oil field. "The strike force will have the capability of not only dismantling local criminal organizations in the Bakken, but also to take out the national and international components of these organizations wherever they may be located," acting U.S. Attorney for the District of North Dakota Chris Myers said in a statement. North Dakota last year received a $3 million federal grant to help address crime in the western part of the state, where much of the Bakken and Three Forks oil reserves are situated. State lawmakers complained, however, that FBI and Drug Enforcement Agency officials aren’t stationed permanently in Williston, the […]

Posted On : Published By : Tom Whipple
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Denton Hits Pause On Fracking Ban Repeal

Denton’s ban on hydraulic fracturing within its city limits will stay on the books – at least, for now. The Denton City Council had considered repealing the ban, which passed in November with 59 percent of the vote, in anticipation of legal action . However, after hearing several hours’ worth of testimony in which residents made impassioned pleas for more time to weigh their options, the council demurred and let the agenda item fail without a vote. All of which means that once the council is satisfied it has fully researched the option – or even take another strategy – it can reconsider action. Denton resident Christopher Furman told the council that if they chose to “undermine our fracking ban,” the outcome would make both the city and the council look weak. After seven months, the ban was in play again because the Texas Legislature and governor in recent […]

Posted On : Published By : Tom Whipple
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Shale Oil: The Sky’s the Limit

Shale Oil As crude prices plunged throughout the fall of 2014, producers tightened their budgets and changed their strategies to wait out the crisis. Not only are these tactics working for individual companies, but the efficiencies and innovations that are occurring may be setting the stage for another season of prosperity. Cutting Costs Producers have slashed costs associated with drilling through greater efficiencies and supplier reductions, including these first quarter results: Sanchez reported Q1 costs at 30 to 40% below fourth quarter 2014 Matador reduced operating costs 30% to 40% for Q1 Continental ’s drilling and completion costs fell by 15% EOG announced it has benefitted greatly from the pull-back in activity and progress is being made to lowering cost in each phase of their operations Innovation Looking for greater efficiency also means innovation. Cutting edge producers are pushing the science and technology to new levels as they work […]

Posted On : Published By : Tom Whipple
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North Dakota orders oil wells shut in on flooding concerns

WILLISTON, N.D. North Dakota oil regulators ordered small, privately held Zavanna LLC to shut in oil wells near the confluence of the Missouri and Yellowstone rivers on Wednesday after more than 1.5 inches (3.8 cm) of rainfall sparked flooding concerns. The state’s Department of Mineral Resources said it is concerned the confluence, located near the state oil capital of Williston, could exceed flood stage levels of 22 feet (6.7 meters) by this weekend after Tuesday’s rainfall, which easily surpassed the record of 0.9 inch (2.3 cm) set in 2002. Denver-based Zavanna, which produces roughly 10,000 barrels of oil per day in North Dakota, typically keeps 15 wells near the confluence shut in during May due to flooding concerns. The state’s order on Wednesday effectively forces the company to keep those wells closed for the foreseeable future. "We’re going to wait until we’re more comfortable starting them up," said Kelsi […]

Posted On : Published By : Tom Whipple
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Oklahoma governor signs legislation to prevent local fracturing bans

Oklahoma cities and counties would be unable to ban hydraulic fracturing or other oil and gas operations under Senate Bill 809 that Oklahoma Gov. Mary Fallin has signed into law. The Oklahoma law, effective in 90 days from May 29, allows municipalities or counties to enact regulations concerning road use, traffic, noise, and odors associated with oil and gas operations. It also authorizes fencing requirements around drilling sites and setback requirements for a well from homes and businesses. Fallin noted the law reaffirmed that the Oklahoma Corporation Commission remains Oklahoma’s primary oil and gas regulator. The three commission members are elected by voters. “They are best equipped to make decisions about drilling and its effect on seismic activity, the environment and other sensitive issues,” Fallin said in a statement. “The alternative is to pursue a patchwork of regulations that, in some cases, could arbitrarily ban energy exploration and damage […]

Posted On : Published By : Tom Whipple
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Rising Crude Derails Bakken Tax Trigger

North Dakota Tax Trigger Fails The recent increase in crude prices is good news for North Dakota’s coffers, but bad news for Bakken oil and gas producers. Related: State Set to Lose Millions if Tax Incentives Take Effect North Dakota’s oil tax trigger was introduced by lawmakers to provide tax incentives to strained producers to ease the sting of prolonged lower crude prices. The trigger went into effect in February as WTI crude dipped below the $52.58 price point. The formula requires that crude stay below that price for five consecutive months, for the state to waive its 6.5% oil extraction tax. The oil trigger was expected to take place June 1st, but rising crude prices mean it wont be implemented and producers will miss out on an estimated $480 million over the next six months. Since the nosedive last fall, crude prices inched up after the first of […]

Posted On : Published By : Tom Whipple
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Easy Access to Money Keeps U.S. Oil Pumping

Wall Street’s generous supply of funds to U.S. oil drillers helped create the American energy boom. Now that same access to easy money is keeping them going, despite oil prices that are languishing around $60 a barrel. The flow of money into oil has allowed U.S. companies to avoid liquidity problems and kept American crude production from falling sharply. Even though more than half of the rigs that were drilling new wells in September have been banished to storage yards, in mid-May nearly 9.6 million barrels of oil a day were pumped across the country, the highest level since 1970, according to the most recent federal data. Helped by a ready supply of money, the flow of oil from the U.S. could keep crude prices low for the remainder of 2015 and beyond. It wasn’t supposed to happen this way. As crude prices began to plunge last year, many […]

Posted On : Published By : Tom Whipple