Thursday, March 31, 2016

03/31/16 Links of the Day: Halliburton-Baker Hughes Merger in Jeopardy, Former EPA Employee Seeks to Vindicate Botched Investigation, and More

Seeking Alpha:  Halliburton and Baker Hughes: Is it Time to Cut Losses?   -   "Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) announced the agreement to merge in November 2014. At the time of the announcement, the two companies expected that the transaction would close within approximately a year. Several months past the initial deadline in the merger agreement, the two companies are nowhere close to having received the most important regulatory..."

Victoria Advocate:  Schools Hit Hard by Oil Devaluation   -   "As oil inventories continued to rise this week with new U.S. Energy Information Administration data, the effects of the ongoing downturn continue to be felt far and wide, but especially in oil play towns. Local school districts such as Cuero ISD are facing budget shortfalls as the downturn in oil revenue and valuations hits a revenue stream that had seen years of record..."  Climate Campaigner Bill McKibben's Misleading Anti-Fracking Crusade   -   "Climate campaigner Bill McKibben is against fracking shale to produce natural gas. In a new article, "Global Warming's Terrifying New Chemistry," over at The Nation, McKibben claims that recent research suggests that leaking methane is offsetting the reductions in carbon dioxide emissions..."

MarketWatch:  5 Reasons Oil is on Track for Biggest Monthly Gain in Nearly a Year   -   "Oil futures are set to score their largest monthly gain in almost a year, even though U.S. crude supplies climbed in each of the last six weeks and major oil producers have yet for formalize a plan to stabilize output. West Texas Intermediate crude futures CLK6, +0.05% settled at $39.46 on Thursday, up nearly 17%..."

Casper Star Tribune:  Former EPA Lead Investigator in Pavillion Releases Study Linking Fracking to Water Contamination   -   "More than four years after he penned the explosive report linking fracking to contaminated drinking water outside of Pavillion, Dominic DiGiulio is releasing the study he always hoped the U.S. Environmental Protection Agency would: A rebuttal to the years of criticism levied against..."

Energy in Depth:  Stanford Researchers Repackage EPA's Discredited Fracking Study in Pavillion   -   "In a new study examining water quality in Pavillion, Wyo., Stanford researchers claim to have “for the first time, demonstrated impact to Underground Sources of Drinking Water (USDWs) as a result of hydraulic fracturing,” a theory that many critics of drilling have promoted for the same region. But the research team did not take any new samples, choosing instead..."

Forbes:  Why Green Energy Means no Energy   -   "Here are some basic facts about energy and human well-being. • There are 7 billion people in the world who need cheap, plentiful, reliable energy to flourish. • Some three billion have virtually no energy by our standards. Over a billion have no electricity..."

Harvard Business Review:  What Low Oil Prices Really Mean   -   "Since the start of 2016, oil prices have swung between $27 and $42 per barrel, about a quarter of the 2008 peak crude oil price of $145. On February 16, oil ministers from Saudi Arabia, Russia, Qatar, and Venezuela agreed to a tentative deal to freeze their production in an attempt to boost..."

Akron Beacon Journal:  CORN Offers Advice to Landowners on NEXUS Pipeline Route   -   "From the Coalition to Reroute Nexus, a group opposed to the Nexus Pipeline that would cross northern Ohio including parts of Stark, Summit, Wayne and Median counties: SPRING IN OHIO - NEXUS LANDMEN in BLOOM Landowners in northeastern Ohio have been voicing concerns about NEXUS’s pressure tactics. Examples include the agent who "comes every day" and will not leave them alone, the agent who leaves papers..."

Argus Media:  Natural Gas Leads Pack for US Power Generation   -   "Natural gas-fired generation will remain the dominant source of power generation capacity for years to come amid low gas prices, tougher emissions standards and an aging fleet of coal-fired plants. Wind, solar and other renewables are capturing a greater share of the power generation capacity mix. But the immediate outlook for capacity shows continued reliance on gas and other traditional forms..."

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Report Says Bernie Sanders' Plan on Fracking Could Cost States Nearly $850 Billion

From Rigzone:
Clinton has been clutching the coattails of the Obama Administration mightily since announcing her candidacy. Although the industry and many in Republican circles are quick to discount their policies, it’s hard to argue they haven’t given some thought to their position and its ramifications. 
But the senator from Vermont? Not so much. 
It’s easy to give a pithy, crowd-pleasing response when you refuse to delve into the details. But similar to Sen. Sanders’ other grandiose plans – each lacking a crucial component of ‘Where’s the money?’ –telling those governors in oil-producing states not to depend on fracking comes with a cost. 
According to the National Conference of State Legislatures, the cost could be around $846 billion – the total state tax collections during the heyday of the energy renaissance in 2013. Oil-and-gas producing states depend on that cash for things like public schools, criminal justice and health care.
Click here to read more. 

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Economists Say the Worst of the Oil Collapse is Over

From KBTX:
Researchers at the Texas A&M University Real Estate Center say a month ago, oil bottomed out around $29 a barrel. This week, it's around $39. 
In the last three months, Chief Economist Dr. Jim Gaines says Texas' unemployment is slowing after a major decline in the energy industry last year. 
"The biggest monthly job loss was probably in about November,” said Gaines. “In January and February, we were still losing jobs, but not nearly as fast, and it appears now that it's going back the other way." 
If the trend is true, Gaines says the state may have hit its maximum job loss. He says the rate of active rigs has also begun to level off.

Read the whole article by clicking here.

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Wednesday, March 30, 2016

Canton Chamber to Discuss Oil & Gas Development at April 6 Seminar

From The Repository:
No company has wanted to drill a Utica Shale well in Stark County for almost four years, and the situation is unlikely to change anytime soon. 
Even in neighboring Carroll County, which once boomed with drilling, only one rig remained last week, according to the Baker Hughes weekly count. 
Against that backdrop, the Canton Regional Chamber of Commerce will host a seminar April 6 at the Pro Football Hall of Fame to talk about the upstream — drilling and production — sector of the oil and gas industry. 
“I think there’s some basic faith in the long term, or people still willing to ride it out and see what happens, and not wanting to be flat-footed if suddenly (drilling) should start taking off again,” said David Kaminski, the chamber’s vice president for public policy and energy.
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3 New Permits Issued for Utica Shale Drilling Last Week

The latest weekly permitting report for the Utica shale has been made available by the Ohio Department of Natural Resources.  View it below or click here.

Permitting remained slow, with just 3 new permits listed.  The rig count did increase by one, to 12.

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Demolition Proceeding on Proposed Site of Belmont County Cracker Plant

From The Intelligencer/Wheeling News-Register:
As PTT Global Chemical decides whether it will build a $5.7 billion ethane cracker in Belmont County, contractors working for FirstEnergy Corp. continue demolition work at the former R.E. Burger power plant site where the massive petrochemical facility would be located. 
Even if the company meets that self-imposed deadline to make a final investment decision, however, the cracker plant likely would not be ready to process natural gas liquids until at least 2020. 
Bulldozers, track hoes and other equipment are ripping apart the facility that began generating coal-fired electricity in 1944. The planned ethane cracker would occupy a nearly 500-acre area, bordered by Ohio 7, the Ohio River, the Arch A. Moore Jr. Bridge crossing to Moundsville and the Roger Lewis residence in Dilles Bottom.
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Tuesday, March 29, 2016

U.S.G.S. Predicts a Reduction in Human-Induced Earthquakes in Ohio

From The Columbus Dispatch:
Even though the report found that the risk of damage from earthquakes is likely to be lower in Ohio this year, geologists found that four Ohio counties — Belmont, Guernsey, Harrison and Washington — could see earthquakes increase because of human causes. All four are counties where oil and gas activity has grown. 
Since 2014, after earthquakes connected with the oil and gas industry affected parts of eastern and northeastern Ohio, the state has required operators of any fracked well within 3 miles of a known fault or in areas prone to seismic activity to install seismic monitors. Injection wells — wells that take fracking wastewater — that operate in areas where earthquakes have happened in the past also are required to monitor for quakes. 
Jackie Stewart, a spokeswoman for Energy in Depth, an organization that promotes the oil and gas industry, said the report is "good news for Ohioans." 
"It's clear that due to Ohio's aggressive induced seismicity standards regarding permitting and operating (injection wells), the risk of induced seismicity has dropped significantly," Stewart said. "This is also an issue that scientists say with near uniformity can be effectively managed, and we are doing that very thing in Ohio."
Read the entire article by clicking here.

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Monday, March 28, 2016

Department of Energy Report: Over 5.5 Million People Working in Energy Industry

From the U.S. Department of Energy:
The U.S. Department of Energy today released the agency’s first annual analysis of how changes in America’s energy profile are affecting national employment in multiple energy sectors. By using a combination of existing energy employment data and a new survey of energy sector employers, the inaugural U.S. Energy and Employment Report (USEER) provides a broad view of the national current energy employment landscape. 
USEER examines four sectors of the economy -- electric power generation and fuels; transmission, wholesale distribution, and storage; energy efficiency; and motor vehicles -- which cumulatively account for almost all of the United States’ energy production and distribution system and roughly 70 percent of U.S. energy consumption. By looking at such a wide portion of the energy economy, USEER can provide the public and policy makers with a clearer picture of how changes in energy technology, systems, and usage are affecting the economy and creating or displacing jobs. 
Some key findings of the report include: 
3.64 million Americans work in traditional energy industries, including production, transmission, distribution, and storage. 
Of these, 600,000 employees contribute to the production of low-carbon electricity, including renewable energy, nuclear energy and low emission natural gas. 
An additional 1.9 million Americans are employed, in whole or in part, in energy efficiency. 
Roughly 30 percent of the 6.8 million employees in the U.S. construction industry work on energy or building energy efficiency projects.
Read the rest of that press release by clicking here.  View the actual report below.

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Once an Advocate of Natural Gas, Activist Bill McKibben Now Criticizing Others for Having Done the Same

From The Daily Caller:
The founder of anti-fossil fuel group also tossed side-eye at the former director of Sierra Club, Carl Pope, for allegedly cavorting with then-fracking giant Chesapeake Energy for the expressed purposes of championing liquefied natural gas production.

Pope received $25 million from now-deceased former Chesapeake Energy CEO Aubrey McClendon to fund his environmental causes. 
The final blow may be McKibben’s decision to give credit to Josh Fox — the film director who produced the 2010 anti-fracking film “Gasland” — for helping to kick-start the anti-fracking movement. 
McKibben was singing a different tune in 2009 when he felt so strongly about power plants switching to natural gas, he was willing to do a stint in the hoosegow in support of the cause. 
He was one of several celebrities who protested on the front steps of the Capitol Power Plant in Washington, D.C. 
“There are moments in a nation’s—and a planet’s—history when it may be necessary for some to break the law … We will cross the legal boundary of the power plant, and we expect to be arrested,” McKibben told reporters prior to the protest. 
McKibben added: “[I]t would be easy enough to fix. In fact, the facility can already burn some natural gas instead, and a modest retrofit would let it convert away from coal entirely. … It would even stimulate the local economy.”
Click here to read more. 

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EnerVest Using Horizontal Drilling to Chase Oil in Clinton Sandstone

From NGI:
There was a time before the advent of Ohio's Utica Shale boom when the Clinton Sandstone was king, reigning as the state's most actively produced formation. But EnerVest Operating LLC is trying to breathe new life into the old play by reviving the stubborn rock with horizontal drilling. 
Located in the East Canton Oil Field, which stretches across roughly seven counties from Northeast Ohio southward, 1.5 billion bbl of oil is still thought to be in place in the Silurian-aged Clinton, according to a 2010 study by the Ohio Department of Natural Resources (ODNR) Division of Geological Survey. Barry Lay, general manager of EnerVest's Appalachia north asset team, said 90% of the oil-in-place is thought to be there and recoverable. 
There are 3,100 current or formerly producing wells in the East Canton field, which was discovered in 1947. As of 2010, the Clinton had produced 95 million bbl of oil, making it the overshadowed, but most significantly produced, oil field in the state. EnerVest has 115,000 gross acres in the field. 
"The original oil-in-place is still there. By its nature, secondary recovery is not effective at large-scale," Lay told a crowd of hundreds during a presentation on Thursday at the Ohio Oil and Gas Association’s (OOGA) annual winter meeting in Columbus. "So how do we increase recovery and tap into those massive amounts of oil? We believe the answer to that is horizontal drilling."
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Friday, March 25, 2016

Aubrey McClendon's Biggest Backer in Danger of Losing Billions of Dollars

From Bloomberg:
McClendon, who died March 2 in a car crash, had recently been ousted from Chesapeake Energy Corp. when he invited a handful of private equity firms to bankroll what he called “the second half of my career.”

The terms outlined in the April 2013 pitch, obtained by Bloomberg, were so favorable to McClendon, however, that most investors turned him down, according to people familiar with the response. After some haggling, one of the few that accepted was Energy & Minerals Group, the firm led by [John] Raymond, son of the former Exxon Mobil Corp. Chief Executive Officer Lee Raymond. 
Though there’s still time to salvage the bets, much if not all of the estimated $2.6 billion that an EMG fund put into a half-dozen enterprises set up by McClendon’s American Energy Partners LP could be lost, according to Carin Dehne-Kiley, a Standard & Poor’s credit analyst, who tracks three of the four biggest ventures. Side bets by EMG investors added hundreds of millions of dollars to that figure, said two people familiar with the matter who asked not to be identified because the information is confidential. That, too, is at risk. 
“There’s a good chance these guys will default in the next 12 months,” barring an oil-price rebound, Dehne-Kiley said of the EMG-backed American Energy Partners ventures that she tracks. 
Dehne-Kiley, who has scrutinized the finances, said the ventures produce too little cash flow to support their current level of debt over the long run. EMG could take steps such as injecting more money to brace them until commodity prices recover, she said.
Continue reading this article by clicking here.

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Drilling Opponents Not Letting Ohio Law Stop Them From Pushing for Bans

From the Akron Beacon Journal:
Grass-roots groups in Medina and Portage counties are trying to get community bill of rights charters approved by voters on Nov. 8. 
Sustainable Medina County is circulating petitions to put the issue before voters in a grass-roots campaign to block the Nexus natural gas pipeline and a pipeline compressor station west of Wadsworth in Guilford Township. 
The current structure of Medina County government would remain intact under the proposed charter, but the charter would give the county’s elected officials the authority to protect residents from “corporate harm.” In addition, the people’s right to initiative and referendum would be codified under the plan to give them more control. 
It is the second time that such an effort has been undertaken in Medina County. 
“This charter will empower the people of our county to say no to Nexus and its threats to the health and safety of our families and the environment,” said spokeswoman Kathie Jones of Wadsworth Township.
Read more by clicking here.

These community bill of rights bans have, of course, now been repeatedly overturned by Ohio courts because they go against state law.

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Super Tuesday Strikes a Blow to Anti-Fracking Groups

by Jackie Stewart, Energy in Depth

All eyes were on Ohio for the Super Tuesday last week, as voters made their way to the polls to cast ballots for the presidential primaries. However, one issue that did not make headlines, but should have, was the overwhelming support for oil and natural gas development in Ohio. From the local level all the way up the ticket you can see obvious examples of key races where voters rejected anti-fracking rhetoric, instead voting in favor of pro-energy policies.
The most glaring examples of this reality played out in two key Democrat primaries, one in northeast Ohio, and another in southeast Ohio, where candidates attempted to run “ban-fracking” campaigns. Each ban-fracking candidate lost by double digits.
Northeast Ohio Continues to Support Oil and Natural Gas
After voters rejected the Community Environmental Legal Defense Fund’s (CELDF) fifth attempt at a ban-fracking measure last fall, it was surprising that the vocal minority would attempt to stand up another referendum on drilling. But that didn’t deter them from doing just that in the 32nd Ohio Senate District, which represents Trumbull and Ashtabula counties and part of Geauga County.
The 32nd senate district is an open seat this year due to term limits and State Representative and Ranking Member on the Ohio House Energy & Natural Resources Committee, Sean O’Brien (D-Bazetta) ran for this seat this year. O’Brien ended up defeating Kristen Rockwho ran an anti-fracking campaign by a whopping 24 points.

Ms. Rock called Ohio’s regulations on the oil and natural gas industry “weak” and repeatedly attacked Rep. O’Brien for his support of natural gas. Most noteworthy, Rock targeted O’Brien’s support for natural gas, including O’Brien’s support of converting vehicles to natural gas. As he recently said,
“With the discovery of major shale plays in North America combined with advancements in drilling to harvest these vast stores of natural gas and oil, Ohio and our nation are experiencing a major energy revolution. Considering these shale plays have enough reserves to provide our nation’s needs for 100 years with cheap and reliable supplies, governments and the private sector must rethink their policies to capitalize on this energy boom.” (emphasis added)
Capitalizing on “this energy boom” includes the critical infrastructure projects coming to Ohio, some of which are squarely located in State Representative O’Brien’s district, such as an $800 million dollar natural gas plant, that is slated to create up to 700 local jobs. Don Crane, president of the Western Reserve Building and Construction Trades Council, said,
“This is touted as the best labor agreement that anyone has ever seen on either side of the table in the oil and gas industry. It will be a model going forward that gets used often.”
Southeast Ohio Continues to Support Oil and Natural Gas
Another Super Tuesday noteworthy race is Ohio’s 94th State Representative District, also an open seat that had Sarah H. Grace facing off against anti-fracking Eddie Smith in the Democratic primary. The 94th district includes all of Athens and Meigs Counties, and parts of Vinton and Washington Counties. This race was particularly interesting given the extreme anti-fracking campaigning efforts of Eddie Smith, who said,
“I would sponsor co-sponsor, parade about, do everything possible to ban fracking in the 94th district and Ohio. Fracking offers very very little benefit to our communities…the job growth was largely a myth…I don’t see fracking playing any part in a progressive future here.”
No benefit to southeast Ohio? That’s probably news to the neighboring Appalachian County of Monroe, where sales tax revenues jumped 340 percent, thanks to shale. Mr. Smith failed to achieve his party’s nomination for the 94th Ohio house district, losing by 19 percent.

The bottom line is this, when it comes to domestically produced oil and natural gas, political and geographic differences are being set aside. In Ohio, that’s especially important given the fact that the state is commonly known as the “Nation’s Industrial Capital,” dating to its roots in the Rust Belt. Today, the “Rust Belt” is represented by Democratic Congressman Tim Ryan (OH-13), who explained how the oil and natural gas industry is starting to bring the region back:
“Growing up and watching the factories close and watching people lose their jobs, and watching it ripple throughout the community… the whole thing that we have seen in Northeast Ohio for the last 20-30 years, we are still trying to recover from some of that…so when we all started to learn about the shale play, which was not necessarily in our lexicon a few years back, and started to really understand what was happening with Utica and Marcellus Shale…I was so excited about what the possibilities were, because we haven’t seen this in so long… We got a break, we got an opportunity.  We have a competitive advantage. We should be aggressively pursuing global manufacturing to come here. We’ve got the location, we’ve got the workforce, and we got our friends in the building trades who are ready-set-go. We have the culture of manufacturing, we got the location, two-thirds of North America is within 500 miles of this area, and we have the Tier 1, Tier 2, and Tier 3 suppliers all the way down the lines. We have the research and development. We have got the job training… what direction do you want to go?  Things are happening around here. “ (emphasis added)
Bipartisan elected officials at all levels of government have agreed that growing the shale industry is vital and necessary for economic development, national security, and becoming energy independent. Ohio’s Super Tuesday election makes it abundantly clear, yet again, that the voters in the Buckeye State overwhelmingly support natural gas development and continue to reject anti-fracking campaigns.

Copyright Energy in Depth. Reprinted with permission. Original article here:

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Thursday, March 24, 2016

03/24/16 Links of the Day: Venezuela Thirsty for U.S. Oil, Industry Calls on IBM's Watson to Combat Anti-Drillers, and More

Bloomberg:  Oil Investors See $7.4 Billion Vanish as Dividends Targeted   -   "Bludgeoned by falling energy prices, at least a dozen oil and natural gas companies have opted to cut dividends this year to preserve cash, cannibalizing payouts considered sacrosanct by many investors. The cost to shareholders: more than $7.4 billion in lost income, compared to..."

Pittsburgh Business Times:  United States Steel Corp. Lays Off 800 Employees Nationwide   -   "The Lone Star Tubular Operations in Lone Star, Texas, and the Fairfield Tubular Operations in Fairfield, Ala., will be idled temporarily, according to a statement from U.S. Steel (NYSE: X). Included in the announcement were 450 employees at Lone Star, 200 employees in Fairfield, Ala., and 120 salaried nonunion employees in Alabama, Texas and Lorain, Ohio..."

Yahoo Finance:  Struggling U.S. Oil and Gas Companies Eye Rare Financing Deals   -   "Some cash-strapped U.S. oil and gas companies are considering creating an unusual layer of debt as a way of surviving the rout in oil and gas prices, according to restructuring..."

Grist:  The Oil Industry Doesn't Trust Donald Trump   -   "Just over a week ago, I argued that Donald Trump might not actually be the worst possible Republican candidate on climate change. Relative to Ted Cruz — who is a committed anti-environment, pro–fossil fuel right-winger — Trump’s ideological opacity leaves a little more room..."

Reuters:  Dreaded "Stealth" Supply Becomes Reality as U.S. Drillers Turn on "Ducks"   -   "A dreaded scenario for U.S. oil bulls might just be becoming a reality. Some U.S. shale oil producers, including Oasis Petroleum (OAS.N) and Pioneer Natural Resources Co (PXD.N), are activating drilled but uncompleted wells (DUCs) in a reversal in strategy that threatens to bring more crude to a saturated market and dampen any..."  What Happens When Oil Hits $50?   -   "The major beneficiary of the 54 percent jump in oil prices from the lows of $26 per barrel is the U.S. shale oil industry, which will utilize this rise to ramp up production and repair balance sheets. But any move above $45 per barrel will likely reverse..."

Bloomberg:  Global Oil Power Venezuela Suddenly Has a Thirst for U.S. Crude   -   "Venezuela, owner of the world’s largest crude oil reserves, suddenly has a deep thirst for American oil. Petroleos de Venezuela SA, the state-owned oil company, has ordered millions of barrels of crude from the U.S. this year, according to published reports and data..."

Foreign Policy:  Obama Says Climate Change Is a Security Risk. Why Are Republicans Laughing?   -   "In the middle of January, Deputy Secretary of Defense Robert Work signed off on one of the potentially most significant, if little-noticed, orders in recent Pentagon history. The directive told every corner of the Pentagon, including the office of the..."

The News Tribune:  U.S. Rig Count Drops 4 This Week to All-Time Low of 476   -   "The number of rigs exploring for oil and natural gas in the U.S. dropped 4 this week to 476, a record low and another sign of continuing price woes in the oil and gas industry. A year ago, 1,069 rigs were active. Houston-based oilfield services company Baker Hughes Inc. said Friday that 387 rigs..."

Read more here:

Press release:  American Petroleum Partners and Funds Affiliated with Apollo Global Management Announce Formation of New Partnership   -   "American Petroleum Partners LLC ("APP") and certain funds managed by affiliates of Apollo Global Management, LLC (NYSE:APO) (together with its consolidated subsidiaries, "Apollo") formed a strategic partnership in September 2015 to invest in oil and gas properties in the Appalachian..."

Energy in Depth:  EPA Chief’s “Lack of Data” Comment Not in Line with the Facts   -   "It’s pretty well known at this stage that the Environmental Protection Agency’s (EPA) landmark draft fracking study found, after consulting thousands of research papers and mountains of data over the course of five years, that “hydraulic fracturing activities have not led to widespread, systemic impacts..."

Forbes:  Big Oil Taps IBM's Watson To Fend Off Anti-Frack Attack On Twitter   -   "Last year a big American oil company felt bad because it was getting picked on by anti-fracking activists who were hurling insults on Twitter TWTR -1.00%. The oil company wanted to do something, anything, to stop those misguided fracktivists who were only propagating long disproven..."

Law360:  Magnum Hunter Sues To Nix Midstream Deal, Citing Sabine   -   "Magnum Hunter Resources filed a lawsuit Friday in Delaware bankruptcy court seeking to nullify a gas purchase agreement with Oneok Rockies Midstream LLC, as a recent ruling in the Sabine Oil & Gas Corp. Chapter 11 allowing for the rejection of midstream agreements continues to reverberate..."

Seeking Alpha:  Stone Energy is a Possible Default Story   -   "Oil stock prices have gained appreciation over the last month due to a sharp rally in the crude oil price from $26 per barrel to $40 per barrel. Although I believe that the bottom in oil is here, as described in my previous article, many companies will not survive the current crude..."  Why We Could See and Oil Price Shock in 2016   -   "The depletion of old oil wells is expected to surpass new sources of supply in 2016, as the ongoing oil price slump puts a long list of oil projects on the shelf. Bloomberg flagged new data from the Norwegian consultancy firm Rystad Energy, which predicts that legacy production will tip the supply balance into the negative in 2016 for..."

Energy in Depth:  Top Five Science Denying Claims in Bill McKibben’s Latest Call to Ban Fracking   -   "Anti-fossil fuel activist and co-founder Bill McKibben was out with a new op-ed in The Nation today, hyperbolically headlined “Global Warming’s Terrifying New Chemistry.” In the piece, McKibben unsurprisingly rehashes the completely debunked claim that methane emissions from fracking are..."

Press release:  Once Again EPA Senior Officials Using Private E-Mail to Conduct Official Agency Business   -   "A recent Freedom of Information Act (FOIA) request to the U.S. Environmental Protection Agency (EPA) submitted by the Energy & Environment Legal Institute (E&E Legal) has produced documents that once again show this Agency practices circumventing Federal law, conducting official business on private e-mail servers with ‘green’ interest groups and..."

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Tuesday, March 22, 2016

Mark Ruffalo to Rehash Long Discredited Fracking Claims in “Dear President Obama”

by Katie Brown, Energy in Depth
Anti-fracking activist and Hollywood actor Mark Ruffalo has been busy this week promoting a new film he is narrating called “Dear President Obama,” which calls on the president to “take action in the remaining months of his presidency to end hydraulic fracturing for natural gas.”
The premiere of the film, which takes place in Washington, D.C. tonight, hasn’t gotten much traction in the press, but that’s not surprising considering that – like the Gasland films before it – “Dear President Obama” simply rehashes claims that the nation’s top scientists (and indeed the world’s top scientists) have thoroughly debunked.
President Obama’s climate legacy: dramatic reductions in greenhouse gas emissions, thanks to natural gas
In an Op-Ed in the Huffington Post, Ruffalo and film director Jon Bowermaster claim,
“At issue: President Obama’s environmental tenure and legacy, which has included both substantial steps forward and backward. He enacted the automobile fuel efficiency standard, has invested in renewable energy like solar and wind, has taken a strong stance against climate deniers and saw through the Paris climate agreement. At the same time, he oversaw a massive expansion of oil and natural gas drilling, much of it by more and more dangerous and extreme methods, chiefly fracking.”
But what have the actual scientists had to say about President Obama’s “massive expansion of oil and gas drilling?”
According to the world’s most prominent climate scientists, the Intergovernmental Panel on Climate Change (IPCC),
“A key development since AR4 is the rapid deployment of hydraulic fracturing and horizontal-drilling technologies, which has increased and diversified the gas supply and allowed for a more extensive switching of power and heat production from coal to gas (IEA, 2012b); this is an important reason for a reduction of GHG emissions in the United States.” (emphasis added)
According to the Energy Information Administration (EIA), since 2005, natural gas has prevented more than one billion metric tons of carbon dioxide from being emitted from power plants in the United States.  Meanwhile, by comparison, the use of renewable energy has prevented only 600 million metric tons of carbon dioxide.  EIA also noted as natural gas fired electricity generation ramped up, power plant greenhouse gas emissions reached a 27-year low in April 2015.
The Paris-based International Energy Agency’s (IEA) has just released data finding,
“In the United States, emissions declined by 2% (in 2015), as a large switch from coal to natural gas use in electricity generation took place.”
IEA previously hailed the “decline in energy-related CO2 emissions in the United States” as “one of the bright spots in the global picture” and went on to note, “One of the key reasons has been the increased availability of natural gas, linked to the shale gas revolution.”
The Breakthrough Institute (BTI) – an environmental group founded by individuals whom Time Magazine recognized as “heroes of the environment” – released a report in 2013 that demonstrated that natural gas has prevented 17 times more carbon dioxide emissions than wind, solar, and geothermal combined.
Environmental Protection Agency (EPA) Administrator McCarthy has long recognized the environmental benefits of our increased use of natural gas, explaining, “Natural gas has been a game changer with our ability to really move forward with pollution reductions that have been very hard to get our arms around for many decades.”
If anything, President Obama’s climate legacy is actually one of dramatic reductions in greenhouse gas emissions and air pollution, thanks to the increased use of natural gas in electricity generation – and Ruffalo and his cohorts, who claim that climate change “is really mankind’s greatest threat,” want to end the production of the one fuel that has delivered significant climate benefits for the United States.
Western Democratic governors tout fracking for environmental and economic benefits
It’s clear from the press release that the film will attack two prominent Democratic western governors: Colorado Governor John Hickenlooper and California Governor Jerry Brown. These are two governors who both have strong climate records, and have long touted the environmental and economic benefits of fracking in their states.
Governor Hickenlooper recently said, “I can’t find an example in the West […] where the actual process of fracking has put frack fluid in the groundwater.”  By the way, a recent poll found that Coloradoans overwhelmingly support shale development.
Governor Brown recently explained on Meet the Press, “If we reduce our oil drilling on California, which a ban on fracking would do, we’ll import more oil by train or by boat, that doesn’t make a lot of sense.” Elsewhere, Brown has put it more bluntly, saying anti-fracking activists “don’t know what the hell they’re talking about.”
Rehashing debunked claims
“Dear President Obama” will likely rehash the flaming faucets of Gasland, even though those were proven to be a fraud. Meanwhile, the EPA has completed its comprehensive, five year studyof fracking and groundwater, which found “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.”
It will likely claim that fracking causes earthquakes, even though scientists who have studied induced earthquakes for years have said on multiple occasions that fracking is not the culprit. As Stanford geophysicists Mark Zoback, stated recently,
“What’s happening in Oklahoma is unrelated to hydraulic fracturing. It’s unrelated to hydraulic fracturing flowback water. It’s caused by massive injection of produced water.”
Injection wells, which are a completely separate process from fracking, also pose a very small risk of seismic activity.  A report by Energy In Depth – which uses data from the U.S. Geological Survey (USGS) and peer reviewed studies – finds that fewer than one percent of wastewater injection wells across the United States have been potentially linked to induced seismicity.
The film will likely claim that methane emissions during shale development cancel out the benefits of natural gas, even though study after study has found that emissions are low – far below what is required for natural gas to have clear environmental benefits. That’s why the IPCChas said, even “[t]aking into account revised estimates for fugitive emissions, recent lifecycle assessment indicate that specific GHG emission are reduced by one half” as more power plants are powered by natural gas.
It will likely claim that air emissions during fracking harm public health even though state regulatory agencies in ColoradoTexasPennsylvania, and West Virginia have looked at emissions from well pads and concluded that they are below public health thresholds, and that available technologies are being used to minimize emissions. Further, data from the EPA and several other studies show that since the shale revolution began, a number of key criteria pollutants have dramatically declined, having a profoundly positive effect on public health for families across the country. From 2005 to 2013 emissions of fine particulate matter (PM 2.5) have decreased by 60 percent; emissions of sulfur dioxide (SO2) decreased by 68 percent; and emissions of nitrogen dioxide (NO2) decreased by 52 percent. As regulators and scientific experts have noted, this progress is largely due to the skyrocketing production and use of natural gas.
Climate leaders frack
When Democrats and clear climate leaders – from President Obama to EPA Administrator Gina McCarthy to Governor Jerry Brown – debunk anti-fracking activists, showing that they are denying the science, it only demonstrates how marginalized they truly are.

Copyright Energy in Depth. Reprinted with permission. View article in original location:

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Chesapeake Energy Considers 1.5 Lien Debt Exchange

From Reuters:
Chesapeake Energy Corp(CHK.N), an oil and gas company struggling in the commodities rout, is considering swapping out some of its existing debt for new 1.5 lien debt, according to CapitalStructure, a provider of news and analysis on the sub-investment grade space, citing sources close to the situation. 
Depending on credit agreements, companies can generally wedge 1.5 lien debt in between their first and second liens.

Chesapeake has not made any decisions on the swap yet, and the timing is uncertain, according to CapitalStructure, citing one of the sources. The swap is attractive, however, based on Chesapeake bonds' current pricing, CapitalStructure said, citing one of its sources. 
The company's bond maturing in 2017 were trading at around 70 cents on the dollar on Thursday, and its bonds maturing in 2018 at around 50 cents, according to Thomson Reuters data. Those levels are considered depressed.
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One New Utica Shale Permit Last Week; Rig Count Dips Even Lower

The latest weekly permitting update from the Ohio Department of Natural Resources has been released.  View it below or click here to download it.

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Crowd Turns Out to Voice NEXUS Pipeline Opposition

From The Toledo Blade:
A boisterous crowd of nearly 600 packed the Waterville Primary Community Room on Wednesday night for a state environmental hearing on the compressor station NEXUS Gas Transmission wants to build in Waterville Township along Moosman Drive, south of Neapolis Waterville Road. 
All 450 seats were taken and well over 100 people stood in the back and along the sides of the room, which has a 680-person capacity. Nearly all available street parking within a half-mile was taken. 
“We are kind of pushing the comfort of the fire marshal with the large crowd we have tonight,” the hearing moderator, Mike Settles, Ohio Environmental Protection Agency public involvement coordinator, said as he asked people to find seats when they became available. 
The agency didn’t initially plan a hearing in this area, then agreed to have one after learning of the high demand for one.
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Stalled EPA Clean Power Plan Called a "Trojan Horse" for Natural Gas

From Forbes:
It was widely acknowledged that the Clean Power Plan (CPP), the Obama administration’s program to cut greenhouse emissions, was hard on coal. Now, upon closer examination, more experts say the plan could seriously undermine the country’s natural gas industry. 
For now, the CPP is on ice. The U.S. Supreme Court stayed the plan on Feb. 9, sending it to a lower court for a ruling and undermining Obama’s signature environmental policy after critics had argued it was federal overreach. It was the first time the Supreme Court halted a regulation even before the lower court ruled. If courts eventually judge that the White House overstepped its authority, that may be good news for the natural gas industry. 
Like many observers, my initial view of the CPP was that the coal industry was the big loser. That much is indisputable; but when the final plan was first unveiled, many observers, including myself, overlooked the punch in the nose that the CPP is on natural gas, too. But it has become clear to many experts, and to me, that the final CPP was quite a Trojan Horse to natural gas power generation. 
Over the past decade, mostly because of declining commodity prices and competition, the natural gas power generation sector in the United States has made incredible strides. Natural gas became the go-to, base-load of electricity powering the grid, getting power to American homes and businesses when it was needed. As for the beneficial impact of the use of natural gas on the environment, long before there was a proposed Waxman-Markey Bill or talk of a Paris Accord, the use of natural gas for power generation significantly reduced U.S. greenhouse gas emissions.
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Friday, March 18, 2016

OOGA's Annual Debrosse Memorial Report on Ohio Oil and Gas Activity Now Available

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Thursday, March 17, 2016

Rex Energy Reports $373 Million Net Loss for 2015

From a Rex Energy press release:
Operating revenues from continuing operations for the full year 2015 were $172.0 million, which represents a decrease of 42% from 2014 operating revenues. Commodity revenues, including settlements from derivatives, were $226.8 million, a decrease of 25% from full year 2014. Commodity revenues from oil and natural gas liquids (NGLs), including settlements from derivatives, represented 49% of total commodity revenues for the full year 2015. 
LOE from continuing operations was $119.0 million, or $1.66 per Mcfe for 2015. This represents a 7% decrease on a per unit basis as compared to the full year 2014. 
Cash general and administrative (G&A) expenses from continuing operations, a non-GAAP measure, were $23.0 million, or $0.32 per Mcfe for the full year 2015, which represents a 41% decrease on a per unit basis as compared to full year 2014. 
Net loss from continuing operations attributable to common shareholders for full year 2015 was $372.9 million, or $6.85 per basic share. Adjusted net loss, a non-GAAP measure, for full year 2015 was $42.5 million, or $0.78 per share.
Rex also provided this operational update:
Appalachian Basin - Warrior North Prospect - Carroll County, Ohio 
In the Warrior North Prospect, the company drilled six gross (6.0 net) wells in 2015, with three gross (2.1 net) wells fracture stimulated. The company has three gross (1.1 net) wells drilled and awaiting completion and three gross (1.1 net) wells awaiting pipeline connection as of December 31, 2015. In addition, the company completed one gross (one net) well during the first quarter of 2016. The company placed the four completed wells into sales during the first quarter of 2016 and expects to provide an update with its first quarter 2016 earnings release.
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Many Drillers Chose Not to Hedge Last Year Only to Regret it Early This Year

From Rigzone:
Last October, as U.S. oil prices seemed to be stabilizing around $45 a barrel, some bullish traders chuckled at the notion of U.S. shale firms racing to hedge production at what they thought was the bottom of a 19-month rout.

Now, a handful of producers, such as Anadarko Petroleum, which sporadically hedges in large chunks every few quarters, and, surprisingly, natural gas giant Chesapeake Energy, may have the last laugh. 
They were among the few to increase hedging in the fourth quarter, according to a Reuters analysis of filings from the largest shale firms. That group locked in prices for nearly 38 million barrels of future production just before crude tumbled a further $15 a barrel in the early weeks of 2016. 
However, the figures show that, taken together, the 28 analyzed companies ended the quarter with some 28 million fewer hedged barrels, totaling 291 million, than when they started. Analysts estimate that between 15 and 20 percent of 2016 U.S. oil production is hedged, and as little as 2 percent for 2017.
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Wednesday, March 16, 2016

Ohio Courts Continue to Rule Against Local Fracking Bans

From the Athens News:
Another Ohio court case has gone against community activists seeking local restrictions on oil and gas drilling. The appeals court’s decision in this Cuyahoga County civil case is especially noteworthy in that it directly addresses – and dismisses – the legal underpinnings of “community bill of rights” laws that voters have passed in the city of Athens and other communities around the state.

A similar anti-fracking “bill of rights” is part of a charter amendment that local fracking opponents hope to place on the Athens County ballot next November.

So far, no Ohio court, including the state Supreme Court, has upheld the local fracking restrictions in question, each time ruling that Ohio Revised Code Chapter 1509 reserves oil and gas regulation to the Ohio Department of Natural Resources.

However, until now, none of those court decisions had directly addressed the core “bill of rights” argument that “the people have an inalienable and fundamental right to local community self-government” that includes the right to pass laws restricting or banning fracking and related activities such as waste injection wells, as well as other industrial processes.
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Utica Shale Rig Count Drops to 12 on Latest ODNR Report

View the latest weekly permitting update from the Ohio Department of Natural Resources below, or click here to download it.

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Energy in Depth Releases Video Tribute to Aubrey McClendon

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