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Wednesday, September 26, 2012

Today's Links: "Promised Land" Generating Controversy, Oil Prices Could Deal Another Blow to Drillers, Shale Focus of Energy Conference, and Much More

New York Post:  "FrackNation" producer reveals plot twist of Matt Damon's anti-fracking film, "Promised Land"

Knapp Acquisitions & Production PA Shale Gas Blog:  Residents of location where "Promised Land" was filmed angry about misrepresentation of the project (This one doesn't ring true - did these people really think that this movie wasn't going to cast gas development in a negative light?)



Knapp Acquisitions & Production PA Shale Gas Blog:  The Sautner family flees Dimock with settlement money from Cabot and buys property with gas lease in New York  (If all of this is true, it undeniably adds validation to the feelings many had that this family was simply taking advantage of what they saw as an opportunity to parlay hysteria into 15 minutes of fame and a big check from the gas company)



Energy in Depth:  Muskingum Watershed Conservancy District has plenty of water to spare for drilling  (What else is Energy in Depth going to say?)


EENews.net:  Two thirds of fracking fluid disclosures keep some information protected as trade secrets  (From a PR perspective, this sure seems like a stupid thing for these companies to do - unless there really is something for them to hide from the public - and their arguments in support of keeping these things a trade secret are far too flimsy to shield them from further criticism)


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New Permit Numbers Released by Ohio Department of Natural Resources

The Ohio Department of Natural Resources has released the latest update on horizontal drilling permits in the Utica shale.  7 new permits were issued last week.  3 were in Portage County, 2 in Harrison, and Mahoning and Monroe each had 1 new permit.

The entire report on all horizontal Utica permits is below.


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Anti-Drilling Organization Reviews Regulation of Fracking

If an anti-drilling organization like Earthworks decides to publish a review - funded by the anti-drilling philanthropy The Heinz Endowments - of how well states have regulated fracking, the conclusions of the study are entirely predictable.  In fact, many would probably guess that the conclusions were written before the study began, and that they worked backwards from there.

Anyhow, Earthworks recently conducted just such a review.  And, of course, they concluded that state regulation of fracking is a failure.

And then Peggy Heinkel-Wolfe, a reporter whom the Denton Record-Chronicle in Texas allows to continue covering the oil and gas industry despite the fact that she is suing them, wrote an article drawing attention to the study.

From The Denton Record-Chronicle:
States with the heaviest oil and gas development in the shale drilling boom are doing a poor job enforcing rules meant to protect public health and safety, according to a new analysis by Earthworks.
The 124-page analysis — “Breaking all the rules: the crises in oil and gas regulatory enforcement” — was partially paid for with a $25,000 grant from The Heinz Endowments. The foundation has given grants to a number of projects related to the shale boom recently, said Jennifer Krill, executive director of Earthworks.
In preparing the report, Earthworks interviewed enforcement experts and analyzed a year’s worth of data from agencies in Colorado, New Mexico, New York, Ohio, Pennsylvania and Texas. The organization also created state-specific reports for some of them, including Texas.
About 350,000 active oil and gas wells go uninspected each year in those states, according to Bruce Baizel, attorney for Earthworks.
The Texas Railroad Commission enforces most of the environmental rules for the oil and gas industry in Texas. The railroad commission is charged with making the most of the state’s oil and gas resources and, at the same time, with protecting public safety and the environment. Compared to other states, Texas inspectors recorded more violations per inspection. Texas inspectors documented between 70,000 and 90,000 violations per year between 2006 and 2010, or about 0.6 violations per inspection, Earthworks found. The group also found that Texas’ enforcement process doesn’t deter repeat violators and may be to blame for the large number of violations.
Read the rest of the article here.

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Welders Needed in Marietta; Job Opportunities From Shale Development

From the Marietta Times:
Pioneer Group owner and Chairman Dave Archer has been saying for years the area needs more welders and pipefitters.
Now that his prediction is coming true with the rising oil and natural gas industry, his company is taking matters into its own hands to develop that expanded workforce.
Pioneer Group this month began a pre-apprenticeship program in partnership with the Washington County Career Center, in which half a dozen students are spending part of their day in the welding lab at Pioneer's Westview Avenue facility. The 16-week Senior Welding Apprenticeship Program benefits all parties involved by teaching the students needed skills in a workplace setting and helping Pioneer add quality employees for the long haul, said Pioneer chief operating officer Matt Hilverding.
"There's probably enough of this work for enough years they could make their whole career right here at home," he said. "That's our whole goal here is to develop employees that will become lifelong employees of our company."

Fact Box
  • By the numbers
  • 80 to 100 - Number of welders Pioneer Group owner and Chairman Dave Archer says he could put to work today to meet the demands of the oil and gas industry.
  • $20 million - Amount of business Archer said the company has turned away in the last two months due to not having enough people to meet the demand.
  • v 6 - Number of Washington County Career Center students in the first class of a pre-apprentice program at Pioneer.
  • $30 - Hourly rate, including benefits, the students could make as apprentices once they're certified.
  • Source: Pioneer Group. 

Read the rest of the article here.

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Monday, September 24, 2012

Today's Links: Kent Looks to Ban Fracking, Buckeye Brine Facility Near Completion, Auto Dealers in Columbiana Enjoying Shale Boom, AP Reports on Government's Fracking Contributions, Business Seminar Coming Up

I am on vacation this week, but will still try to at least post daily links to stories, even if I don't have time to do several individual articles.  Here is the news today:

Recordpub.com:  Kent group seeks measures to keep fracking out of city

Coshocton Tribune:  Buckeye Brine injection facility near completion

Coshocton Tribune:  Safety a priority for Buckeye Brine, but brine injection concerns remain

EID Ohio:  Auto Dealerships Share the Community Benefits of Shale Development

Worcester Telegram & Gazette:  Decades of federal dollars have helped fuel gas boom

Marcellus Drilling News:  AP Erroneously Says Government Discovered Fracking (subscription required)

Herald Star:  Business seminar to focus on shale boom

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Friday, September 21, 2012

Trailer Released For Hollywood Frack Attack "Promised Land"

The trailer for "Promised Land", an anti-fracking feature film starring Matt Damon and a host of other big names, is now available.  View it below.

Spoiler alert:  The gas industry is evil.


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National Resources Defense Council Plans to Help Ohio Towns Fight Fracking

From Columbus Business First:
A New York-based environmental group is setting up an initiative aimed at helping Ohio communities in disputes over the use of hydraulic fracturing to pull oil and natural gas from underground.
The Natural Resources Defense Council’snew Community Fracking Defense Project expands on the group’s environmental protection work in New York state, Pennsylvania and Ohio. The focus of the project includes controlling the extent of fracking and defending zoning provisions.
Read the rest of this article here.

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Over $3 Million Awarded to Stark State College For Oil & Gas Training

From the Canton Repository:
Stark State College is part of a consortium of colleges that will receive federal grants to develop and expand innovative training programs.
U.S. Secretary of Labor Hilda L. Solis announced Wednesday $500 million in grants to community colleges and universities around the country.
Stark State College has been awarded more than $3.26 million from the Department of Labor  and the Timken Foundation to fund oil and gas related labs and equipment at the Energy Innovation Center of its Downtown Canton Satellite Center scheduled for completion in 2015.
Read the rest of the story here. 

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Thursday, September 20, 2012

9/20 Links: 26 Dead From Pipeline Fire, Utica Shale Prospects Good (or Bad, Depending on Who You Ask), Frack Fact Check, New Anti-Fracking Group in Ohio, Shale Gas Exporting Update, Youngstown Delays Lease Decision, Drillers Looking to Use Less Water, Sean Lennon Insults Non-Fracktivist on Twitter, Frack Attack from New York

Yahoo News:  26 killed in Mexico pipeline fire near US border

Businessweek:  Utica Shale Prospects Dim Amid Disappointing Lease Offers

Columbus Business First:  Expert panel bullish on Utica shale potential

WVIZ:  Fact Checking Fracking: Can Fracking Trigger Earthquakes?

WOUB:  New Anti-Fracking Group Takes Different Approach

Fuel Fix:  Gas-export study delay puts U.S. projects in limbo for this year

Tribune Chronicle:  Youngstown delays gas lease vote

San Antonio Express-News:  Drillers looking at cutting need for lots of water

Mail Online:  Sean Ono Lennon tells woman she is "an argument for abortion" after she challenges his environmentalist views

Village Voice:  New York Fracking: Boom or Doom

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Abrahm Lustgarten Sounds Alarm on Injection Wells

Abrahm Lustgarten of ProPublica is no stranger to writing articles which the oil and gas industry do not like.  And he's at it again.

Where Lustgarten has previously dropped the hammer on fracking, he now has research and numbers that shed unfavorable light on injection wells.

From ProPublica:
There are now more than 150,000 Class 2 wells in 33 states, into which oil and gas drillers have injected at least 10 trillion gallons of fluid.  The numbers have increased rapidly in recent years, driven by expanding use of hydraulic fracturing to reach previously inaccessible resources.
ProPublica analyzed records summarizing more than 220,000 well inspections conducted between late 2007 and late 2010, including more than 194,000 for Class 2 wells. We also reviewed federal audits of state oversight programs, interviewed dozens of experts and explored court documents, case files, and the evolution of underground disposal law over the past 30 years.
Our examination shows that, amid growing use of Class 2 wells, fundamental safeguards are sometimes being ignored or circumvented. State and federal regulators often do little to confirm what pollutants go into wells for drilling waste. They rely heavily on an honor system in which companies are supposed to report what they are pumping into the earth, whether their wells are structurally sound, and whether they have violated any rules. 
More than 1,000 times in the three-year period examined, operators pumped waste into Class 2 wells at pressure levels they knew could fracture rock and lead to leaks. In at least 140 cases, companies injected waste illegally or without a permit.
In several instances, records show, operators did not meet requirements to identify old or abandoned wells near injection sites until waste flooded back up to the surface, or found ways to cheat on tests meant to make sure wells aren’t leaking.
“The program is basically a paper tiger,” said Mario Salazar, a former senior technical advisor to the Environmental Protection Agency who worked with its injection regulation program for 25 years. While wells that handle hazardous waste from other industries have been held to increasingly tough standards, Salazar said, Class 2 wells remain a gaping hole in the system. “There are not enough people to look at how these wells are drilled … to witness whether what they tell you they will do is in fact what they are doing.”
Read the rest of the article by clicking here.

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Energy in Depth Touts Ohio's Well Construction Regulations, But Others Questions How Strong They Really Are

From Energy in Depth:
Throughout it’s history, Ohio’s oil and natural gas industry – and the regulators who oversee these operations – have placed the highest priority on safety standards.
Nowhere is this more evident than during the well construction stage, and the high standards set forth by Ohio’s industry and it’s regulators to ensure this vital phase is completed meeting  stringent standards that are second-to-none, and serve as a model for developing states across the country.
With the passage of Senate Bill 315 earlier this year – an update on the two year old SB 165 – Ohio now has the most robust, transparent regulatory system in the country, and, in looking at the graphic below, we can see how our state is setting the bar when it comes to well construction rules.

Read the rest of the article, which lauds Ohio for the stringent well construction regulations included in the recently passed bill.

However, the National Resources Defense Council raised many questions about the standards in Senate Bill 315.  For example, is the fact that there are 54 identified standards regulated in Ohio the best way to determine how stringent the regulations are, or is the actual stringency of the regulations themselves more important?  Here is a portion of the NRDC's response to the ODNR on the standards in Ohio when they were proposed:
Following up on our conversation last week, this memo provides a more detailed response to the attached ODNR “Drilling Regulation” diagram upon which you requested our comments.  NRDC appreciates your involving us in discussions regarding ODNR’s proposed well construction rules, and we remain willing to work with your office to help you meet the Governor’s desires for a strong and transparent permitting program for shale gas wells.  
As described below, however, the diagram fails to address the substance of the concerns we have raised in our written comments and prior communications on ODNR’s proposed well construction rules.  Although we appreciate ODNR’s willingness to improve its proposed rules in response to our comments, to date only minor improvements have been offered.  ODNR’s proposed rules need to be substantially strengthened before they are finalized if they are to live up to the Governor’s goal that Ohio become a leader in developing standards that protect public health and the environment.
Read the entire document here.

So, what do you think?  Are Ohio's standards strong enough?  Or is EID insulting our intelligence by attempting to whitewash shoddy, industry-friendly regulations and sell them as some of the strongest standards in the U.S.?

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Utica Shale Exploration Gets Viewed From the Air

From Business Journal Daily:
From two thousand feet above, flying over Mahoning, Columbiana and Carroll counties, it’s a challenge to keep count.
Looking out the window on the left side of a small seaplane, we see a well pad waiting for a rig. From the window on the right side, we see bulldozers moving dirt, piling gravel for the well pad being built. Outside the front window, looking to our pilot’s left, we see a drilling rig at work on another site. Then, to the right, two wellheads standing alone on a well pad – a site either in production or waiting to be fracked.
“You can see a lot more from up in the sky than you can from the ground driving around,” says our pilot, Bill Bieber, who flies over this changing landscape nearly every week, both for business and pleasure.
Read the rest of this article by clicking here.

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Utica Shale Results Starting to be Measured Against Predictions

From Crain's Cleveland Business:
As the temperature drops and fall approaches, we start to think about the fall harvest. Falls is usually associated with picking apples, but this year we're picking data from new Utica shale wells to see if it supports our projected economic outcomes for Ohio. 

There are three pillars of data that were the basis of projections in a recent study, “The Economic Impact of the Ohio Shale,” conducted by Cleveland State University: drilling activity, production per well, and the decline curve of production over time. 

As of Sept. 10, the number of wells drilled in Ohio reached 133, which shows that out of a projected 160 wells for 2012, as predicted by the study, 100 were already drilled the first eight months of this year. At least for the first projected year, expansion of drilling activity is going up to speed. 
Read the rest of the article here. 

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PDC Energy Updates Operation Activities in the Utica Shale


September 19, 2012

PDC Energy Updates Operational Activities in the Utica Shale

DENVERSept. 19, 2012 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (Nasdaq:PDCE) today announced the Company is pursuing development of its Utica Shale ("Utica") position in southeast Ohio independently and is no longer actively seeking a joint venture ("JV") partner to develop the play. The Company received various joint ownership and development proposals from interested potential JV partners in August and early September, 2012 and has determined that the proposals do not meet PDC's value expectations.
PDC believes that developing its approximate 45,000 net acre Utica position on a standalone basis will produce greater long-term value, particularly given the very high initial production rates and high liquids content from recent well results announced by other E&P companies in close proximity to the Company's acreage positions. While the 2013 budget is not finalized, the Company anticipates it will invest approximately $50 million in the Uticanext year which is expected to be funded from cash flow and borrowings under its revolving credit facility.
The emerging Utica play is exceeding the Company's expectations in several key areas including initial production rates, liquids mix, the pace of de-risking, and the delineation of the gas condensate window of the play which encompasses a substantial portion of PDC's leasehold position. One of the Company's initial criteria for establishing a Utica JV was to accelerate the de-risking of PDC's leasehold position, which has been substantially achieved by PDC and other operators' activity in the area. Furthermore, PDC has development flexibility for its estimated 200 horizontal locations given that approximately 50% of its acreage is held by production and the remaining 50% are multi-year primary term leases.
2012 Drilling Activity
PDC has drilled its first two horizontal wells in Guernsey County, Ohio and is very encouraged by drilling, mud log and geological data results. The Company's first horizontal well, the Onega Commissioners #14-25H, is currently being completed. The well will be shut in for an approximate 60-day rest period and is anticipated to be flow tested in November 2012. The Company's second horizontal well, the Detweiler #42-3H, is expected to be completed around year-end 2012 and flow tested in the first quarter of 2013 subsequent to its rest period. A third horizontal well is expected to be spud in the fourth quarter of 2012 in northern Washington County. The well will be the first horizontal well drilled in the Company's southern acreage. First sales from the three horizontal wells are anticipated in the second quarter of 2013.
Utica Development Plan
PDC plans to continue to de-risk and develop its existing 45,000 net acre position, and does not expect to materially increase its leasehold. The Company plans to finalize its mid-stream strategy for gas gathering and processing and complete its marketing arrangements to sell condensate, natural gas and NGLs by year-end 2012. PDC anticipates establishing a district field office in southeast Ohio in the first quarter of 2013. The Company's 2012 Utica capital program is expected to total approximately $95 million for drilling, completion and leasing activity. PDC anticipates aUtica capital budget of approximately $50 million in 2013 to drill, complete and connect four to five horizontal wells in Guernsey, northern Noble and northwest Washington Counties. The 2012 and 2013 drilling programs will test a substantial portion of the Company's leasehold.
James Trimble, President and Chief Executive Officer, stated, "We are extremely pleased with our Utica position and believe it is in the best long-term interest of our shareholders to develop our current position without a joint venture partner. Results from PDC and the industry continue to reinforce our position that the Utica could be one of the top tier economic shale plays in the US onshore. The high liquids mix from initial Utica well results further enhances our corporate strategy to transition towards more liquid-rich assets in our portfolio. We have formulated a Utica development plan and believe we have the financial capacity to execute this plan in 2012 and beyond."
Upcoming Industry Conference Participation
PDC is scheduled to present at the Johnson Rice Energy Conference in New Orleans, Louisiana on Tuesday, October 2, 2012. Please see the Company's website at www.pdce.com for full details and webcast information.
About PDC Energy, Inc.
PDC is an independent energy company engaged in the development, production and marketing of natural gas and oil. Its operations are focused primarily in the Wattenberg Field of Colorado, including the horizontal Niobrara and Codell, the Utica Shale in Ohio and the Marcellus Shaledevelopment in West Virginia. PDC is included in the S&P SmallCap 600 Index and the Russell 3000 Index of Companies.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 ("Securities Act") and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act") regarding PDC's business, financial condition, results of operations and prospects. All statements other than statements of historical facts included in and incorporated by reference into this report are forward-looking statements. Words such as expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements herein, which include statements regarding the Company's development plans, future capital projects and expenditures, the availability of capital resources to fund those projects and expenditures, the timing of the drilling, completion and testing of wells, the availability of gathering, processing and marketing arrangements for production from those wells, the timing of sales from those wells, future acquisition activity, and management's strategies, plans and objectives. However, these are not the exclusive means of identifying forward-looking statements herein. Although forward-looking statements contained in this report reflect the Company's good faith judgment, such statements can only be based on facts and factors currently known to PDC. Consequently, forward-looking statements are inherently subject to risks and uncertainties, including risks and uncertainties incidental to the exploration for, and the acquisition, development, production and marketing of natural gas and oil, and actual outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to:
  • changes in production volumes, worldwide demand and commodity prices for natural gas and oil;
  • the availability of sufficient pipeline and other transportation facilities and related gathering, processing and marketing arrangements and the impact of these facilities and arrangements on price;
  • changes in estimates of proved reserves;
  • declines in the values of PDC's natural gas and oil properties resulting in impairments;
  • the timing and extent of the Company's success in discovering, acquiring, developing and producing natural gas and oil reserves;
  • PDC's ability to acquire leases, drilling rigs, supplies and services at reasonable prices;
  • reductions in the borrowing base under the Company's credit facility or other limitations on the anticipated availability of capital;
  • risks incident to the drilling and operation of natural gas and oil wells;
  • the discovery of unanticipated title problems;
  • future production and development costs;
  • the effect of existing and future laws, governmental regulations and the political and economic climate of the United States of America;
  • changes in environmental laws and the regulations and enforcement related to those laws;
  • the identification of and severity of environmental events and governmental responses to the events;
  • the effect of natural gas and oil derivative activities;
  • conditions in the capital markets; and
  • losses possible from pending or future litigation.
Further, PDC urges you to carefully review and consider the cautionary statements made in this press release, the Item 1-A Risk Factors in the 2011 Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission ("SEC") on March 1, 2012, and other subsequent filings with the SEC for further information on risks and uncertainties that could affect the Company's business, financial condition and results of operations, which are incorporated by this reference as though fully set forth herein. The Company cautions you not to place undue reliance on forward-looking statements, which speak only as of the date made. PDC undertakes no obligation to update any forward-looking statements in order to reflect any event or circumstance occurring after the date of this release or currently unknown facts or conditions or the occurrence of unanticipated events. All forward looking statements are qualified in their entirety by this cautionary statement.
CONTACT: Ron Wirth

         Director Investor Relations

         303-860-5830

         ron.wirth@pdce.com



         Marti Dowling

         Investor Relations Manager

         303-831-3926

         marti.dowling@pdce.com
PDC Energy Logo
Source: PDC Energy
News Provided by Acquire Media


View this release at PDC's website by clicking here.

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Wednesday, September 19, 2012

A Look at Shale Gas From the "Rational Middle"

From Visual Capitalist comes a series on shale gas, which acknowledges that there are risks inherent in the process but argues that the benefits of shale gas extraction make it too attractive to abandon.  Visit their site by clicking here.  Below is a graphic released in association with the series.



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S&P Report Looks at Impact of Fracking Boom

From Reuters:
The use of hydraulic fracturing and horizontal wells over the past few years have dramatically altered the U.S. energy landscape, and many believe the boom is still in its relative infancy, according to a recent report published by Standard & Poor's Ratings Services.
"By combining fracking and horizontal drilling, exploration and production companies have greatly increased their access to previously untapped oil and natural gas reserves, which has led to a significant boost in output," said credit analyst Marc Bromberg. "The result of this pairing has been a significant rise in energy production--a trend that we believe will continue to grow."
Read the rest of the article here. 

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A Balanced Approach on Fracking From South Africa

From BDlive:
I SUPPOSE it is human nature in times of conflict to gravitate towards the extremes rather than the centre, for fear of making concessions that may strengthen the opposition’s argument. It is a great pity though, because there are precious few situations that are so starkly black or white.
Some or other shade of gray is invariably the correct course of action with the benefit of hindsight, and a willingness by both sides to compromise, or at least attempt to understand the other side’s position better, would get us there quicker. So it is when it comes to the question of whether the vast shale gas reserves that are believed to lie under the Karoo should be extracted, and especially whether we dare experiment with the hydraulic fracturing (fracking) technique that is in the process of turning the global energy sector on its head.
There are a few who would frack and be damned in the interests of turning a profit and there are others who fervently believe the economic stimulation, job creation and poverty alleviation potential of shale gas exploitation should override environmental concerns, just because human benefit must automatically take precedence over Karoo bossies.
Lined up on the other side of the great fracking divide are organisations such as Treasure the Karoo, which are so opposed to the thought of defiling the iconic Karoo landscape with drill rigs that they won’t even countenance exploration to establish how much gas is out there.
The reasonable, rational compromise is surely to proceed with caution, monitor all exploration activities closely, operate in a transparent manner to avoid allegations of corrupt deal-making, and avoid excessive risk-taking. Fortunately, that is the route the government has opted to follow, for which it should be praised, not threatened with lawsuits.
Read the rest of this article by clicking here.

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Worthington Industries Positions Itself to Profit From Utica Shale

From The Columbus Dispatch:
Worthington Industries yesterday announced an acquisition that will allow it to benefit from the oil and gas coming from Ohio’s Utica shale.
Columbus-based Worthington paid $70 million for Westerman Cos., which makes and sells storage tanks to the oil and gas industry.
Westerman, which has about 225 employees, is based in Bremen in Fairfield County and also has a plant in Wooster. There are no plans to change the staffing, said Worthington spokeswoman Cathy Lyttle.
The newly acquired company will become part of Worthington’s pressure-cylinders business, continuing several years of expansion for a part of the company that makes fuel tanks for gas grills and helium tanks used to inflate balloons, among other products.
Read the rest of the article here. 

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Canton Calls Itself Utica Capital, But Drillers Are in Carroll County

Both the Times Reporter and the Canton Repository ran different versions of the same article today about the shale boom in Carroll County.  Not surprisingly, the Repository avoided the headline that the Times Reporter chose:  "Carroll County is Utica shale capital of Ohio."

Here is a snippet from the Times Reporter article:
Although Canton claims to be the Utica shale capital, Carroll County is where the action is taking place.
Locals first began noticing the oil boom that has swept through Carroll County two years ago.
That’s when landmen from oil companies began offering to buy mineral rights. The companies were seeking rights to drill horizontal wells into the Utica and Marcellus shale formations, where they expect to find oil and natural gas.
The influx of drilling companies has generated jobs, spawned new businesses and boosted the county’s tax base.
“I have yet to see any negatives,” Glenn Enslen, Carroll County’s economic development director, said of drilling in the Utica shale. “I believe it has the power to transform all of Appalachia Ohio.”
Read the rest of that article here.

Meanwhile, the Repository chose a different arrangement to introduce their article, which is entitled "Economy is booming in Carroll":
So far the oil boom that has swept through Carroll County during the last two years has been pretty positive.
“I have yet to see any negatives” Glenn Enslen, Carroll County’s economic development director, said of drilling in the Utica shale. “I believe it has the power to transform all of Appalachia Ohio.”
County residents first began noticing changes during the summer of 2010. That’s when landmen from oil companies began offering to buy mineral rights. The companies were seeking rights to drill horizontal wells into the Utica and Marcellus shale formations, where they expect to find oil and natural gas.
The influx of drilling companies has generated jobs, spawned new businesses and boosted the county’s tax base.
While Canton claims to be the Utica shale capital, Carroll County is where the action is taking place.
Read the rest of that article here.

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Tuesday, September 18, 2012

Natural Gas Prices Quickly Heading For $4?

From Forbes:
The boom in natural gas production that has pushed prices below $2 per thousand cubic feet back in April has planted the seed for a huge correction the other way.  As gas-directed exploration & production has fallen materially and the large storage surplus flips on gas-fired power demand, prices are set to rebound strongly, hitting $4 by the end of the year and possibly breaking higher, according to Canaccord Genuity.
Commodity markets are by nature violent, and natural gas futures are no exception.  After bottoming out at $1.90 per million metric British thermal units (mmBtu) in mid-April, prices surged 72% to $3.29 toward the end of July, and then fell 13.9% to Monday’s $2.88; from the April bottom to Monday, prices are up 51.6%.
Read the entire article here. 

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State Permit Count For Ohio Rises to 375

From the Coshocton Tribune:
Statewide, a total of 375 permits have been issued so far, with 134 wells already drilled and 32 already producing.

Most of that activity is centered around Carroll County, which has 139 permits.
Read the entire article on the latest issued permits here. 

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Monday, September 17, 2012

Is Shale Gas an Ideal Bridge to Renewable Energy Sources?

From Forbes:
With the battle lines drawn and the sides already chosen, Republican presidential nominee Mitt Romney is set to get the fossil fuel vote. But would there be a marked shift in how he would use the regulatory levers and if so, what would that be?
A major question is over how shale gas is extracted. Estimates are that there a century’s worth of those reserves here. Indeed, bothPresident Obama and Governor Romney understand the potential but they are diverging over how the drilling process would be monitored. The current White House says that such unconventional natural gas is such a game-changer and that it requires more federal oversight while a Romney presidency would continue to let the states supervise the development of gas drilling.
“While fracking requires regulation just like any other energy-extraction practice, the EPA in a Romney administration will not pursue overly aggressive interventions designed to discourage fracking altogether,” saysRomney’s position paper. “States have carefully and effectively regulated the process for decades, and the recent industry agreement to disclose the composition of chemicals used in the fracking process is another welcome step in the right direction.”
That position is supported strongly by the natural gas industry, which says that such regulations should remain at the state level. It adds that the country’s geography varies from region-to-region and that a one-size-fits-all approach is not just impractical but also duplicative and expensive.
Read the rest of the article here. 

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EnerVest Looking to Unload 539,000 Ohio Acres For Over $11,000 Per Acre

From the Wall Street Journal:
Privately held EnerVest, with its publicly traded arm EV Energy Partners LP, plans to shed 539,000 acres above the Utica, a dense layer of rock that many believe holds great petroleum wealth. The firm is pursuing a sale by the end of the year that would be the largest in the company’s 20-year history and mean a big payday for its institutional investors.
EnerVest wound up with this would-be bounty almost by happenstance. The Houston-based company had been acquiring drilling rights to the Utica in Ohio since 2003 but had no intention of tapping it or any notion of its potential. Instead, it was targeting deposits at different depths than the Utica that were known to contain oil and gas, pursuing its usual strategy of buying drilling rights to traditional energy fields and coaxing greater output from them.
But EnerVest and other companies in the last year have begun to unlock vast fossil-fuel deposits from the Utica through horizontal drilling and hydraulic fracturing, or “fracking,” transforming old properties in Ohio’s Rust Belt into hot prospects.
“We’re not very smart,” said John Walker, EnerVest’s founder and chief executive, acknowledging that he hadn’t foreseen the Utica’s promise. “But good things happen when you have a lot of acreage.”
EnerVest has spent about $1.2 billion in northeastern Ohio over the last decade to become the state’s biggest energy producer.
EnerVest is selling drilling rights to 70% of its Utica acreage, where it has completed four wells in addition to 58 drilled by partner Chesapeake Energy Corp. A buyer would become Chesapeake’s partner on the wells the Oklahoma City company has drilled. The acreage EnerVest is selling is a net figure consisting of tracts it owns outright and properties co-owned with other companies, some of which operate the wells there. EnerVest is holding onto 231,000 net Utica acres whose potential isn’t as well established.
Read the rest of the article here (subscription required).  Read a free blog post about it from the Akron Beacon Journal here.

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Chesapeake CEO McClendon Addresses Public For First Time in Months

From Power Play:
Chesapeake Energy Corp. CEO Aubrey McClendon spoke publicly for the first time in months at the Barclays CEO Energy and Power Conference on Thursday morning in New York.
McClendon reiterated that the Oklahoma City oil and natural gas company plans to sell $17 billion to $19 billion in assets — about one and a half times Chesapeake’s equity market capitalization — by the end of 2013 while continuing to increase its total production.
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Database is Designed to Reduce Out-of-State License Plates at Ohio Drilling Sites

From Vindy.com:
While national oil and gas companies are flooding eastern Ohio to get involved in the Utica Shale, a service is being developed to help local companies provide information about what they can offer. 
The Ohio Shale Energy is a database that provides information for oil and gas producers and field-services companies to find local contractors who can provide services. 
The program initially had been limited to a 12-county area in southeastern Ohio, but Ohio University, which developed the database, is working with the Ohio Chamber of Commerce to expand it statewide, said Scott Miller, director of energy and environmental programs for the Voinovich School of Leadership and Public Affairs at OU. 
“We thought there might be a benefit to a tool to get businesses together,” Miller said. “It will allow small and mid-sized businesses to get involved.” 
The goal is to help Ohio companies succeed, he said. The database should help reduce the number of out-of-state license plates at drill sites.
Read the rest of the article here. 

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Columbia Gas & Hilcorp Working With Angry Columbiana County Landowners

From the Morning Journal:
Two days this past week those who own land in the Brinker Storage Field were invited to meet with Columbia Gas Transmission and Hilcorp Energy officials to discuss what will become of the already existing mineral gas leases there, among other things.
The meetings are only two of other meetings held in private between the landowners and Columbia Gas, but officials had declined to make any information public in the past.
Although the meetings remained closed to non-landowners, spokesmen for the companies offered a brief insight into what was taking place.
Justin Furnace, corporate manager of external affairs for Hilcorp Energy, verified the bulk of the meetings have focused on the landowners' concerns regarding already existing land leases owned by Columbia. Hilcorp will be doing the actual drilling for Columbia.
The mineral rights leases on the 35,000-acre storage field date back to the 1940s, and due to the terms are keeping interested landowners from signing new, more lucrative leases with other oil and gas exploration companies like Chesapeake Energy.
Earlier this year the Cleveland Plain Dealer reported many of the landowners, and even Chesapeake, were unaware of the existing leases until they were in the negotiating stages of a new land lease. Some of the leases paid as low as $4 per acre and offered no royalty percentages, or a lump sum royalty of $200-a stark contrast to the sometimes more than $5,000 an acre and as high as 17 percent royalty offered by Chesapeake. According to a standard Chesapeake lease, royalties are paid continually as long as oil or gas is recovered from the leased property.
The Cleveland newspaper also reported that once Chesapeake learned of the long-standing leases any deals with landowners were off, since the company wanted clear title to the mineral rights.
As a result many of the landowners filed a lawsuit against Columbia, arguing the old leases have expired due to lack of activity on the properties and lack of payment of lease fees.
Under the existing leases, Columbia is permitted to store natural gas under the Brinker property in the Berea Sandstone formation.
Furnace did not offer any information on the status of the leases, but said the company intends to work with the landowners until they are "satisfied."
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Will New Federal Rules Create Unnecessary Hindrance For Drillers?

From Free Enterprise:
The Bureau of Land Management (BLM) proposed new rules on hydraulic fracturing to extract oil and natural gas on federal and Indian lands. I guess after watching EPA and the Department of Transportation go after shale energy, they wanted to get in on the action too.
In her response to BLM, Institute for 21st Century Energy president and CEO, Karen Harbert pointed out that the proposed rule is unnecessary, duplicative of state regulatory efforts, and will harm the job-creating energy industry.
First, BLM doesn’t offer a reason to issue a new rule. They don't explain how current federal and state rules are inadequate. “This underlying work is the minimum one would expect from the agency before proposing regulations, and without such a minimal foundation, it is premature to propose this rule,” comments Harbert.
Second, unlike many state regulations, the proposed BLM rule lacks clear standards. “The rule focuses on information which needs to be submitted by the applicant or permit holder, rather than the underlying performance requirement or standard which needs to be met,” Harbert says. This could delay well construction and operations by having companies “complete additional tests or to wait for BLM to review information.”
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Studying Fracking as an Academic Exercise

The New York Times offers a suggestion for how a teacher may help students to learn about fracking:
Overview | What is hydraulic fracturing? Why is it so controversial? In this lesson, students will define hydrofracking, identify how the demand for natural gas is changing, then research and map how natural gas development may impact a community.
Materials | Projection equipment, computers with Internet access, and a large map. (If gas drilling is a reality or possibility in your region, use a map of your county; if not, you might want to create a fictional map.)
Warm-Up | Before students arrive, write the words “natural gas” and “hydrofracking” in the center of the classroom board, circling both terms. When students enter, have them work in small groups to brainstorm everything they know, think they know, or may have heard about both, taking notes. They may supply one-word reactions, facts, personal experience,or anything else that is relevant. Next, invite groups to report what they discussed, and write their contributions on the board.
Explain — if students have not — that natural gas is a fossil fuel burned for energy. Ask students if they know what fuel is used to heat their homes, their bathwater and the food on their stoves. If needed, you might briefly discusshow natural gas was formedwhere it is found, or how it gets from under the ground and into homes.
If students have not defined hydrofracking, you might offer the Times Topics page definition: “A drilling method called hydraulic fracturing, better known as hydrofracking or fracking, in which large amounts of sand, water and chemicals are injected deep underground at high pressures.” Ask: Why do you think this method is controversial?
Read the rest of the lesson plan here.

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