Tuesday, May 31, 2016

Ohio Rep. Jack Cera Introduces Severance Tax Bill

From The Intelligencer/Wheeling News-Register:
Air pollution from compressor stations, tractor-trailers hauling pipe on roads and bridges, and frackers sucking water from local creeks are examples of how East Ohio carries the burden for the entire state to prosper from the Marcellus and Utica shale boom. 
"Eastern Ohio is disproportionately impacted by the increase in oil and gas drilling activity, so it is only fair to direct a portion of the severance tax back to the communities whose roads and bridges are deteriorating under the weight of increased truck traffic," Ohio Rep. Jack Cera, D-Bellaire, said. "I can't stand by while the state continues to neglect our Appalachian communities." 
Cera said the state should generate more than $30 million this year from its relatively modest oil and natural gas severance tax. Ohio taxes producers at 3 cents per 1,000 cubic-foot unit of natural gas and 20 cents for a barrel of oil. By comparison, West Virginia applies a 5 percent tax on the total value for natural gas, in addition to 47 cents per 1,000 cubic feet. 
A 1,000-cubic-foot unit selling at $3 in Ohio would yield the government just 3 cents, while the same unit of natural gas would generate 62 cents for West Virginia.
The rest of the article can be read by clicking here.

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Volume of Injection Waste in Ohio in 2015 Higher Than Previously Reported

From the Akron Beacon Journal:
Ohio is continuing to set an all-time record for liquid drilling wastes being injected into underground rock formations: The 2015 injection total keeps growing. 
That’s because additional fees are being paid in 2016 by waste haulers to the Ohio Department of Natural Resources’ Division of Oil and Gas Resource Management. 
That 2015 volume was reported as 28.8 million 42-gallon barrels in March. Now it is up to 31.4 million barrels, as of May 20. 
That’s enough to fill nearly 2,000 Olympic-sized swimming pools with the salty wastes from shale drilling. 
That means that Ohio’s injection volume in 2015 grew by nearly 42.8 percent from 2014. The earlier reported percent was 27.2 percent. 
In 2014, 22.0 million barrels were disposed of in Ohio’s injection wells. That total was 16.3 million barrels in 2013.
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Friday, May 27, 2016

Oil Climbs over $50: Can Investors Bank on a Recovery?

Source: Tracy Salcedo of The Energy Report  (5/26/16)

The price of a barrel of oil has almost doubled from its low of $28 at the start of the year, prompting speculation that a recovery is underway, which may result in the revival of companies in the exploration, production and services sectors that have foundered since prices collapsed in 2015.

According to news reports published today (Thursday, May 26), the pop above $50/bbl can be attributed to a drop in supply. The U.S. Energy Information Administration's "Summary of Weekly Petroleum Data for the Week Ending May 20, 2016" notes that "U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.2 million barrels from the previous week."

Since breaking the mark the price has sunk below the $50 level, but hovers in the vicinity, as it has for the past few weeks.

Reuters reports neither Brent nor WTI has topped $50 per barrel since fall 2015.

Among the reasons for the drop in supply, the BBC cited wildfires in Canada, which affect oil sands production. Other factors include political unrest in Nigeria and increases in demand from China, India and Russia, disruptions that are "offsetting higher production from Iran and Saudi Arabia." The Wall Street Journal, in an article also published today, noted "a weaker US dollar" supported the boost in oil prices.

What does the news mean for investors in the energy sector? There is no clear answer, as reports caution that despite the rally, prices could remain volatile. Adam Laird of Hargreaves Lansdown is quoted by the BBC as saying, "It's too early to say this is the beginning of the big rebound."

The Wall Street Journal notes, for example, that while the jump "came with concerns that higher prices could just unlock more supply," some analysts see the move as a "psychological boost to a market that has been trading below that level for seven months now."

Goldman Sachs has said it expects "oil prices to consistently hit $50 a barrel in the second half of 2016 and $60 by the end of 2017," according to the BBC.

And from Reuters: "[S]ome market watchers say oil's climb to above $50 for the first time in seven months could spur producers, particularly U.S. shale drillers, to revive scrapped operations that could again bloat supplies and trigger a selloff." The BBC reported that producer Pioneer Resources is looking at increased rig counts at the $50 level.

Another factor will be the reaction of the Organization of Petroleum Exporting Countries (OPEC) to the oil price surge. Investors, Reuters notes, will be looking "for signs of a output hike now that oil had reached $50."

In an article published last week, Dr. Kent Moors of the Oil and Energy Investor observed that, while breaking through the $50/barrel ceiling garners the attention of "talking heads," he believes the more important takeaway is that oil prices may have established a new floor at $42/barrel.

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Thursday, May 26, 2016

Keep-It-In-The-Ground Asks for Public Hearing after Forcing Previous Hearing to End Early

by Jackie Stewart, Energy in Depth

Ohio groups with ties to the Keep-It-In-The-Ground movement recently called on the Bureau of Land Management (BLM) to hold more public hearings and extend the time period for public comment in response to BLM’s decision to move forward with leasing in the Wayne National Forest (WNF).
This could not be more ironic considering that these same groups were previously so disruptive at the last public hearing that BLM was forced to shut the meeting down early, negating the entire purpose for public input, and hijacking others from having the opportunity to engage.
Activists throw paper airplanes at BLM representatives during a public meeting earlier this year resulting in the meeting being shut down early.

Why follow the rules when protesting gets the media’s attention?
After hosting not one, not two, but three public hearings, and extending the formal public comment period, the BLM recently released its draft Environmental Assessment (EA), which determined the merits of leasing federal minerals under the WNF.  This 113-page comprehensive document included a National Environmental Protection Act (NEPA) analysis, and assessed the immediate impacts to the forest, as well as potential for long-term impacts, such as potential climate change from oil and natural gas development. The comprehensive assessment by the BLM found that there would be no “significant impact” to the environment to lease federal mineral for the purpose of oil and natural gas development, allowing the process to move forward. As usual, activists immediately cried foul stating the EA is “gobbledegook”, while at the same time arguing that going through the 113-page comprehensive EA is just too time consuming.
According to a recent press release, Fracking Action Network, leader Heather Cantino said,
“We also can’t expect everyone to read the confusing documents and make any sense of them by themselves. We need a public hearing so that the public can share its extensive knowledge of the issues and our various attempts at understanding these confusing and consequential documents with one another, our community, and with our elected officials. We must then have time to write meaningful comments.”
Interestingly, after claiming she “spent eight hours” reading the EA and still can’t “decipher it”, these groups somehow had plenty of time to pull together a media stunt outside of the WNF which included “holding a bag of barnyard manure which they likened to a draft Environmental Assessment in support of the leasing plan.”  They called the media to take pictures of the spectacle, and then sent out this press release complaining about how they were not given enough time to get their act together and provide meaningful public comment.
Photo and Caption by Dennis Powell of Athens News shows protestors outside of a federal building at the Wayne National Forest, “holding a bag of barnyard manure which they likened to a draft Environmental Assessment in support of the leasing plan.”
Activists recycle talking points (yet again)
Crying foul and calling for more public hearings and comment are certainly not new tactics used by anti-fracking groups, and particularly the Keep-It-In-The-Ground groups in Athens, Ohio. In fact, if this most recent stunt seems like de ja vu, it is.
Back in November, EID pointed out that over five years ago this entire matter was debated through a public forum. The BLM hosted several meetings and opportunities for public comment and involvement on drilling in the forest in 2011 and 2012. The meetings were part of the widespread environmental review of the forest plan, which included an extensive comment period. In fact, Heather Cantino, spokesperson for Athens County Fracking Action Network, offered up a letter of protest to the BLM on October 7, 2011 and attended one of these meetings back in September 2012. That meeting was hosted by the Ohio Environmental Protection Agency, the Ohio Department of Natural Resources, the Bureau of Land Management and the National Forest Service and it focused on the environmental review process to allow drilling in the Wayne National Forest. At that meeting (four years ago) Ms. Cantino said, “They haven’t been listening to us for the last six months. The (open house) is just a ploy to once again not listen to the community.”  Fast forward to 2015, and Ms. Cantino again questioned the public notice given to the community, which was advertised in the local paper, and has since been circulated through papers throughout Ohio, including the Columbus Dispatch. Regardless of Ms. Cantino’s claims, the NEPA Handbook, which is the guide the BLM uses for this process, clearly states:
“While some public involvement is required in the preparation of an EA, you have the discretion to determine how much, and what kind of involvement works best for each individual EA. For preparation of an EA, public involvement may include any of the following: external scoping, public notification before or during preparation of an EA, public meetings, or public review and comment of the completed EA and unsigned FONSI. The type of public involvement is at the discretion of the decision-maker. When you need to prepare many EAs for similar projects in a short timeframe, it may be helpful to prepare a programmatic EA to cover those projects and to facilitate focused public involvement.”
In response, the BLM posted notice that they would in fact hold three public meetings and extend the formal public comment period. In response, and just six months ago, activists recycled five years of running talking points by stating, “You have greatly confused our community and thus not provided adequate notice for a meeting to be held in two weeks, for which you have NOT YET provided adequate public notice.”
Fast forward to 2016, verbatim, the same activists are rehashing their same tired arguments. According to a recent press release, the draft EA is too complicated and “confusing” for the public to read. This is statement absolutely incorrect. While the document is in fact comprehensive, it does not require an attorney to decode it. Perhaps Ms. Cantino and her friends should have used the time they spent putting together their most recent horse manure media stunt to actually read the document and submit public comment. This however, is far too much work for the activists – it’s much more fun to protest and put out press releases criticizing a federal agency.
One would think these groups would start at least having some originality to their strategy, as this same story continues to play out all across the country. Just like we are once again seeing in Ohio, KIITG groups “demand” more opportunities for public hearings and engagement and when they receive that opportunity they instead make a mockery out of the process, turning a hearing into a circus and a lengthy public comment period into nothing more than additional time to pull media stunts and churn out press releases.
These exploits prove that when sound science is not on your side, the activist have no choice but to revert to theatrics and emotional debates over the merits of oil and natural gas development. Hopefully the BLM will continue to make decisions regarding the Wayne National Forest based on science and listen to the interested parties who have actually taken the time to submit meaningful comments, discuss the process, and ask real questions about the pending draft Environmental Assessment over reckless activists who disregard civility and facts to achieve their agendas.
Copyright Energy in Depth.  Reprinted with permission.  View original article here:  http://energyindepth.org/ohio/keep-it-in-the-ground-asks-for-public-hearing-after-forcing-previous-hearing-to-end-early/

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Valourec Posts $326 Million First Quarter Loss

From Business Journal Daily:
Hit hard by the collapse of the global oil and gas market, pipe and tube manufacturer Vallourec posted a net loss of $326 million during the first quarter of 2016, the company said Tuesday. 
Vallourec, which operates Vallourec Star in Youngstown, said its revenues fell 36.2% to $771.9 million, brought on by what the company said were record low volumes. 
The company manufactures oil country tubular goods, or OCTG, pipe for mostly the oil and gas industry. Drilling activity and rig counts are substantially down since October 2014, when commodity prices began to tumble. 
Oil companies have since cut spending and capital investment on their drilling programs, which has put additional pressure on suppliers such as Vallourec.
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Tuesday, May 24, 2016

05/24/16 Links of the Day: More Bankruptcies, Ohio Court Battles Continue, and More

Youngstown Vindicator:  Natural Gas-Fueled Power Plant in Lordstown Will Be Showpiece   -   "The state-of-the-art natural gas-fueled power plant that’s moving forward in Lordstown isn’t just a significant chapter in the Mahoning Valley’s emerging comeback story. It’s also a powerful symbol of the future of..."

Press release:  Stone Energy Corporation Announces NYSE Notice of Non-Compliance   -   "Stone Energy Corporation (NYSE: SGY) today announced the receipt of formal notice of non-compliance with the New York Stock Exchange ("NYSE") market capitalization listing standard. On May 17, 2016, we were notified by the NYSEthat our average global market capitalization has been less than $50 million over a consecutive..."

Press release:  Halcón Reaches Agreement in Principal with Stakeholders Regarding a Comprehensive Balance Sheet Restructuring   -   "Halcón Resources Corporation (NYSE:HK) ("Halcón" or the "Company") today announced the Company has reached an agreement in principal on terms of a plan to restructure its balance sheet (the "Restructuring Plan") with select holders of its 13.0% 3rd Lien Notes due 2022 ("3L Notes"), its three tranches of senior unsecured notes comprised of..."

Cleveland.com:  Appellate Court Backs North Royalton's Fight Against Mandatory Pooling in Driller's Plan to Frack for New Well   -   "A state appellate court on Tuesday sided with North Royalton in a three-year fight to thwart an oil and gas driller who wants to frack for a new gas well in the city. The 10th District Ohio Court of Appeals agreed with a lower court and the Ohio Oil and Gas commission that..."

Press release:  Nine Energy Completes 124-Stage Well in Utica Shale   -   "Nine Energy Service, Inc. (Nine) successfully completed 124 perforated stages in an 18,544 ft. lateral (27,034 ft. TMD) in Guernsey County, Ohio for Eclipse Resources, a premier independent E&P company in the Appalachian Basin. In one of the most complex wells ever completed by either company, Nine's Wireline Division worked directly with Eclipse to..."

The Daily Caller:  ‘Keep It In The Ground’ Won’t Save The Environment – Or Your Budget   -   "Most of us paid a lot less in utility costs to keep warm this past winter than we had in previous years. We also drove more miles than ever – also for a lot less – courtesy of bottom-of-the-barrel fuel prices. Both are shining examples of how America’s once-in-a-generation energy revolution – the byproduct of..."

Seeking Alpha:  Chesapeake Management Appears Like It Is Rolling The Boulder Uphill   -   "When industry conditions are tough, that is when shareholders find out how good the company management really is and whether or not the experience on all those resumes of senior management is really worth anything. Chesapeake Energy Corp. (NYSE:CHK) finished the first quarter touting several accomplishments..."

Press release:  Constitution Pipeline Challenges Decision by New York State to Block Federally Approved Pipeline   -   "Constitution Pipeline Company, LLC today announced that it has appealed the New York State Department of Environmental Conservation’s (NYSDEC) refusal to grant the company’s request for a Section 401 Water Quality Certification under the Clean Water Act. The appeal was filed with the United States Circuit Court of Appeals for the Second Circuit and contends..."

Kallanish Energy:  EPA Violating Supreme Court Hold, GOP Charges   -   "Top Republican lawmakers have accused the Environmental Protection Agency (EPA) of violating a Supreme Court order to stop enforcing its climate change rule for power plants, Kallanish Energy understands. In a letter to the agency, majority members of the House Energy and Commerce Committee said the EPA’s actions since the February stay of the Clean Power Plan are contrary to the 5-4 court..."

ACFAN:  Activists to Feds: Extend Comment Period and Hold Public Hearing on Fracking the Wayne   -   "Organized by Athens County Fracking Action Network (ACFAN), representatives of eight grassroots environmental groups held press conferences on Wednesday, first at Wayne National Forest Headquarters and later in downtown..."

Herald Star:  Officials Gather Ideas to Enhance Utica Shale Academy   -   "As the Utica Shale Academy enters its third year, officials have begun looking at ways to expound programs and offerings to enhance education for a future work..."

Dallas Morning News:  Chesapeake, Total to Pay $52.5 Million to Settle Barnett Shale Royalty Disputes   -   "Oklahoma-based Chesapeake Energy and Total E&P USA agreed Monday to pay $52.5 million to 13,000 people who claimed their royalties have been underpaid for leases in the Barnett Shale. As part of the agreement, Chesapeake will provide $29.4 million upon court approval of the settlement and another $10 million in..."

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Monday, May 23, 2016

American Energy Partners Lays Off Workers, Announces Plans to Shut Down

From News OK:
American Energy Partners executives on Wednesday began taking steps to close the business, the company's leadership team confirmed. 
Nearly half the Oklahoma City company's 100 employees were laid off Wednesday, and the remaining employees have begun closing the company through a process expected to take two to four months, according to a source knowledgeable of the situation. 
American Energy Partners' actions Wednesday follow a series of bankruptcies and layoffs in the oil and natural gas industry as nearly two years of low prices have reduced revenues and led to budget cuts throughout the oil patch. 
American Energy Partners and Aubrey McClendon in November 2015 were involved in an attempt to raise up to $2 billion, but scrapped the effort after just $11.2 million was raised.
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No New Permits for Utica Shale Last Week

Permitting in Ohio's Utica shale once again came to a standstill last week, with no new permits listed on the Ohio Department of Natural Resources weekly report for the second time in the last four weeks.  The Utica rig count fell from 12 to 11.  The cumulative total of permits issued now stands at 2,175, with 1,743 wells drilled and 1,320 now producing.

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New Report: Shale Development Boosting Local Government Revenues

by Randy Hildreth, Energy in Depth

Researchers at Duke University are out with a new study finding that shale development has been boosting public revenue for local governments across the country. As a news release announcing the report puts it:
“The recent surge in oil and natural gas development has been beneficial for most local governments in the United States, according to new findings by two Duke University researchers.”
The researchers spoke with “more than 200 local government officials in 61 counties and 78 municipalities” where shale development has been taking place. An example of their findings can be seen in a case study on Colorado’s Piceance Basin released alongside the report that shows dramatic increases in economic activity and public revenue in shale regions. In particular, researchers show how the City of Rifle on Colorado’s Western Slope saw an amazing spike in public revenue and economic activity as shale development in the area increased. From the case study:
“Tax revenues grew very quickly from 2002 to 2008, the peak of regional natural gas development, rising from $2.6 million to $12.4 million, led by sales taxes. A variety of capital grants, including DOLA grants from severance tax and federal mineral lease revenues, added an additional $11.6 million in 2008 (Rifle Department of Finance 2002-2013). Overall revenues grew from roughly $10 million in 2002 to a peak of $34 million in 2008.” (Emphasis added)
And along with the increased tax base, it is clear from the case study that town officials see oil and natural gas development as having a lasting impact. Also from the case study:
“Overall, the city manager describes the surge in natural gas development in the mid-2000s as a net benefit for Rifle’s fiscal health, as new businesses and buildings have boosted the city’s tax base far above the levels of the early 2000s.”
This latest research is part of a multi-year “Shale Public Finance project” from the researchers in an effort to understand how recent increases in oil and natural gas development are impacting local governments. Other “key findings” include:
  • In most states where local governments levy property taxes on oil and gas property, increased industry activity has led to rapid increases in property tax receipts, especially for counties. In states where local governments are not allowed to levy taxes on oil and gas property (MT, ND, and PA), allocations of state-collected taxes/fees on production or drilling activity have been the most significant new source of revenue.
  • Population growth and economic activity associated with the industry has supported or boosted sales tax revenue for many local governments, especially municipalities. Some local governments have leased county-or city-owned land for oil and gas production, generating large lease revenues.
The report does explain that not all local governments received net benefits.  That’s because some were not able to keep up with the pace of infrastructure improvements needed to sustain growing populations and demand for services. But it is clear from the Colorado case study that some of the local officials they spoke with believe that the overall benefits of shale development offset the challenges.  From the Colorado case study section discussing Grand Junction:
“There have been substantial oil- and gas-related costs for the city, but local officials estimate that these costs have been more than offset by oil- and gas-related revenues. For example, heavy trucks associated with oilfield service firms have caused damage to some city streets, but DOLA energy impact grants coupled with industry-related tax revenues have been sufficient to manage these costs. Grand Junction also increased its spending on municipal buildings, making upgrades to city fire and police buildings that were in need of repair. Officials state that these upgrades would not have been possible without the new revenues generated by the oil and gas industry.” (Emphasis added)
The same is true in the Bakken region where another case study released with the report showed that local officials continue to see benefits of increased oil and natural gas development in that region as well. From that case study:
“When we returned to Dunn County in late 2015, demands related to Bakken development continued to be substantial. However, the overall fiscal situation had improved markedly, and a variety of local officials unanimously agreed that the county was in stronger fiscal condition than before Bakken development began, and far stronger than during our 2013 interviews.”
As EID has reported many times before, oil and natural gas development in deep shale formations has been an economic driver for local governments, providing an important revenue stream for rural communities to fund community improvements.
So while activists fly in to states like Colorado and elsewhere in their attempts to block federal mineral lease auctions and  stage protests and publicity stunts, local governments and the citizens who call these communities home are reaping the benefits of shale development.
Copyright Energy in Depth. Reprinted with permission. View original article here:  http://energyindepth.org/mtn-states/new-report-shale-development-boosting-local-government-revenues/

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Thursday, May 19, 2016

Appalachian Basin Has Shifted from Big-Time Natural Gas User to Big-Time Producer

From the Akron Beacon Journal:
In 2010, the Marcellus Shale in Pennsylvania and West Virginia was dubbed the Beast in the East by analysts because of its impressive natural gas treasure. 
In 2013, Ohio’s neighboring Utica Shale was described as Son of the Beast in the East by analysts because of its growing natural gas potential. 
The growth of drilling in the Marcellus-Utica shales and the resulting natural gas boom are changing the American energy picture, even though shale drilling is slowing down across the United States due to low commodity prices. 
Since 2012, Ohio, Pennsylvania and West Virginia have accounted for 85 percent of U.S. shale gas growth, according to the U.S. Energy Information Administration. Shale gas today represents two thirds of U.S. natural gas production, the agency reported recently.
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Wednesday, May 18, 2016

Drillers Pondering the Proper Timing and Pace for the Return of Rigs

From Powersource:
After several quarters of talking about budget cuts and laying down drilling rigs, antsy oil and gas analysts are looking forward to some excitement. How quickly can companies ramp up in response to better commodity prices, they wonder. 
The question, asked at numerous company earnings calls over the past several weeks, belies several assumptions: that prices are headed for a meaningful recovery and that the natural response to that recovery is to ramp up quickly. 
It’s one of the most popular questions thrown at David Khani, CFO at Consol Energy Inc., and one he approaches with caution. 
“That commodity curve could go crazy again if everybody starts drilling again,” Mr. Khani said. “You have to be careful about how fast you would ramp up.” 
Cecil-based Consol, which laid down all of its rigs last year, looks at commodity prices over a three-year horizon, he said. 
“You have to feel good about the sustainability of that curve,” Mr. Khani said, “or you have to be willing to hedge it.”
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Cramer: Goldman Sachs "Should Be Taken to Task" For Bad Calls on Oil

From TheStreet:
Longtime oil price bear Goldman Sachs (GS) adjusted its tune Monday calling for a near-term $50 target for the commodity due to a sooner-than-expected deficit to the global supply market.

"The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," Goldman said, adding that it now anticipates oil will reach $60 per barrel by the end of 2017.

But even though Goldman's newly "measured" outlook is in line with his longstanding estimate, TheStreet's founder Jim Cramer said Monday that the bank has been dead wrong about oil all year.

"I would point out that Goldman went too wild high, and then they went too wild low, and they should be taken to task for that because they're highly paid professionals who made way-too-extreme calls on both sides," he said. "They were very responsible for a big panic in the market when they said oil was going to go to $20. A lot of individual investors lost fortunes off that call. Now they're trying to be a little more measured."
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EIA: Utica Shale Should See Increased Production in May 2016 Compared to May 2015

From the Youngstown Vindicator:
Both natural-gas and oil production in the Utica Shale Play is expected to increase in May 2016 over May 2015, according to the U.S. Energy Information Administration’s drilling productivity report. 
The report uses recent drilling data through March, estimates of drilling productivity and estimated changes in production from current oil and natural-gas wells to provide estimates in oil and natural-gas production in seven plays. 
This month, the Utica, which covers Ohio, West Virginia, Pennsylvania and New York, is expected to produce more than 3 billion cubic feet of natural gas a day. In May 2015, however, production was right at 3 billion cubic feet of natural gas a day. 
Oil production was below 400,000 barrels a day in May 2015 and is expected to be below 400,000 in May 2016.
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Tuesday, May 17, 2016

Forbes Looks at Four Fallacies in the Fracktivist Tool Box

From Forbes contributor Alex Epstein:
To make intelligent decisions about the future of energy, we need to think big-picture—to look carefully at the benefits and costs to human life of every course of action. Unfortunately, in today’s energy debate we are taught, with politically incorrect forms of energy such as fossil fuels, to only look at the negative picture—often highly exaggerated or taken out of context. 
There are at least four common fallacies used to discourage big-picture thinking and breed opposition to fossil fuels. These are things to be on the lookout for when you follow the cultural debate; they are everywhere, and all four are used to attack what might be the most important technology of our generation: shale energy aka “fracking.” 
1. The Abuse-Use Fallacy 
The largest fossil fuel controversy today, besides the broader climate change issue, is fracking—shorthand for hydraulic fracturing—one of several key technologies for getting oil and gas out of dense shale rock, resources that exist in enormous quantities but had previously been inaccessible at low cost. 
Fracking has gotten attention, not primarily because of the productivity revolution it has created, but because of concerns about groundwater contamination. The leading source of this view is celebrity filmmaker Josh Fox’s Gasland (so-called) documentaries on HBO. Looking at how these movies have affected public opinion is an instructive exercise. Both Gasland movies follow a similar three-part formula. First, Fox tells a sad story about a family undergoing a problem, usually with their drinking water. “When we turn on the tap, the water reeks of hydrocarbons and chemicals,” says John Fenton of Pavillion, Wyoming. Then Fox blames it on the oil and gas industry’s use of fracking—without exploring any alternative explanations, such as the fact that methane and other substances often naturally seep into groundwater. This is the false-attribution fallacy, which I’ll discuss in a minute.
Epstein goes on to consider The False-Attribution Fallacy, The No-Threshold Fallacy, and The "Artificial" Fallacy.  Read the rest of the article by clicking here.

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PA Town Legalizes Civil Disobedience to Fight Injection Well

From YES! Magazine:
A tiny community sitting on a 27-square-mile piece of Western Pennsylvania wanted to send a big message to the energy company planning to deposit toxic fracking wastewater under its neighborhoods. And its 700 residents wanted it to be perfectly legal for them to loudly object. 
Grant Township had seen what happens when people nationwide take to the streets to protest bullying corporations: Arrests. Lots of them. 
So Grant Township planned ahead. Two weeks ago, it passed a law that protects its residents from arrest if they protest Pennsylvania General Energy Company’s (PGE) creation of an injection well. 
Residents believe this law is the first in the United States to legalize nonviolent civil disobedience against toxic wastewater injection wells. Township Supervisor Stacy Long said. “We’re doing it to safeguard the residents and protect as many people as possible,” she said.
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Utica Shale Goes Over 1,300 Wells Producing in Ohio

8 new permits were issued for horizontal drilling in the Utica shale by the Ohio Department of Natural Resources last week.  All of the permits were for wells in Belmont County.  There are now 2,176 wells permitted, 1,736 drilled, and 1,312 producing.  The rig count is 12.

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Friday, May 13, 2016

05/13/16 Links of the Day: NEXUS Pipeline Facing More Hurdles, Belmont County Cracker Plant on Track, and More

Forbes:  The 15 Biggest Oil Bankruptcies (So Far)   -   "The pace of oil patch bankruptcies is picking up. According to a new count from Houston law firm Haynes & Boone, April saw 11 bankruptcy filings, the most of any month in the past two years. The headline failures that month were Ultra Petroleum UPL +%, which buckled under $3.9 billion..."

Press release:  Rex Energy Reports First Quarter Operational and Financial Results   -   "Operating revenues from continuing operations for the three months ended March 31, 2016 were $30.5 million, which represents a decrease of 44% as compared to the same period in 2015. Commodity revenues, including settlements from derivatives, were $43.5 million, a decrease of 33% as compared to the same period in 2015. Commodity revenues from oil and..."

Press release:  EV Energy Partners Announces First Quarter 2016 Results   -   "Adjusted EBITDAX for the first quarter of 2016 was $20.2 million, a 62 percent decrease from the first and fourth quarters of 2015. EVEP reported Distributable Cash Flow of $(1.2) million for the first quarter of 2016. The decreases in Adjusted EBITDAX and Distributable Cash Flow were primarily attributable to lower realized commodity..."

Duke University:  Radium Isotopes in Soil Reveal Age of Oil and Gas Wastewater Spills   -   "Spills from oil and gas operations can contaminate local water and soil with high levels of toxic chemicals, salts and radioactivity, but in many cases there is insufficient information to determine how long ago the spill occurred and identify..."

Plastics News:  Shell Continues Preliminary Work on Possible Pittsburgh Petrochemicals Complex   -   "Shell Chemical LP continues with preliminary work that could lead to a massive petrochemicals complex in the Pittsburgh area — but the firm still has not fully committed to the project. A Shell spokeswoman recently confirmed that the company has built..."

Press release:  Community Rights Ramp Up in Ohio   -   "Today residents in Meigs County and the City of Waterville launched their petition campaigns to place rights-based initiatives before voters this November. Meigs County residents are collecting signatures to create a Community Rights County Charter. Waterville residents are collecting signatures for a Bill of Rights..."

Akron Beacon Journal:  Ohio Landowners Urge BLM to Proceed with Wayne NF Drilling   -   "Over the past few months, Landowners for Energy Access and Safe Exploration (LEASE) relayed the views of landowners throughout southeastern Ohio asking the BLM for the opportunity to develop their minerals. In addition, a wave of federal, state, and local bipartisan leaders, community organizations, businesses and labor unions joined..."

Seeking Alpha:  UMH Properties' (UMH) CEO Samuel Landy on Q1 2016 Results - Earnings Call Transcript   -   "UMH has continued to execute our long term strategic business plan of acquiring and integrating communities in strong geographic areas below replacement cost, upgrading them, getting a rental home program, sales staff and marketing thereby building long term value for our..."

Energy Information Administration:  Developing Economies in Asia Lead Projected Growth in World Energy Use   -   "Rising incomes in China, India, and other emerging Asia economies are a key driver of the global energy outlook. "Developing Asia accounts for more than half of the projected increase in global energy use through 2040." said EIA Administrator Adam Sieminski. "This increase will have a profound effect on..."

Natural Gas Now:  Bill McKibben and Trial Lawyer Friends Flirt with Violence   -   "Bill McKibben loves white sheet cowards who flirt with violence, while extolling non-violent “direct action” and “rebellion,” a fact we noted in an earlier post. Rockefeller front groups such as 350.org and the Sustainable Markets Foundation, where trial lawyer and Fractivist Rasputin Jay Halfon fund..."

Wall Street Journal:  EPA Ready to Issue Methane Limits for New Oil and Gas Wells   -   "The Environmental Protection Agency is set to issue on Thursday the first federal standards aimed at curbing methane emissions from the oil and natural gas industry, according to multiple people familiar with the..."

Rigzone:  OPEC Pumps More Oil After Freeze Talks Fail, Says Oversupply Persists   -   "OPEC said the global oil market remains oversupplied and pointed to a larger supply surplus on the market this year, as its own surging output makes up for losses in outside producers hurt by the collapse in prices. Supply from the Organization of the Petroleum Exporting Countries is climbing after sanctions on Iran..."

Akron Beacon Journal:  NARO Chapter Supporting Drilling in Ohio's Wayne NF   -   "The Appalachia chapter of the National Association of Royalty Owners (NARO), which represents royalty owners in Ohio, West Virginia, Kentucky, and North Carolina, are calling on landowners in Appalachia to engage in the public comment period underway in support of leasing in the Wayne National Forest with..."

Akron Beacon Journal:  Belmont County Cracker Plant Not Delayed is on Track   -   "Plans for a $5.7 billion cracker plant on the Ohio River in Belmont County have not been delayed and are still on track, said Columbus-based spokesman Dan Williamson. Nothing has been delayed and nothing has been stopped, despite a recent newspaper report from Bankok about the project..."

Reuters:  Ex-Magnum Hunter CEO Evans Starts New Texas Oil Fields Venture   -   "Gary Evans, a wildcatter who left his job as chief executive of Magnum Hunter Resources MHRCQ.PK just as it emerged from bankruptcy on Monday, is wasting no time getting back into the oil business despite the worst price rout in years. He has already formed a new venture called Energy Hunter Resources Inc and is close to buying two tracts of land..."

Gas & Oil:  Doylestown Urges NEXUS to Rethink Route   -   "Council turned its focus to the NEXUS Gas Transmission pipeline in April, discussing where the pipeline is projected to go and efforts to get the developer to rethink its placement. Councilwoman Kay Kerr said the village is advocating the projected NEXUS pipeline pathway to be altered to..."

Akron Beacon Journal:  203 Deals in Five Years in Utica-Marcellus Worth $48.8 Billion   -   "There have been 203 mergers and acquisitions in the Utica and Marcellus shales from 2010 through 2014, according to a recent report from Timothy Knobloch of Marietta-based James Knobloch Petroleum Consultants Inc. and Martin Shumway of Shumway Resources in..."

Reuters:  Trump Taps Climate Change Skeptic, Fracking Advocate as Key Energy Advisor   -   "Republican presidential contender Donald Trump has asked one of America's most ardent drilling advocates and climate change skeptics to help him draft his energy policy. U.S. Republican Congressman Kevin Cramer of North Dakota - a major oil drilling state - is writing a white paper on energy policy for the New York billionaire, Cramer and sources familiar with the matter told..."

World Oil:  Oil at $45 Proving No Savior as Bankruptcies Pile Up   -   "Three bankruptcies this week shows that $45/bbl oil isn’t enough to rescue energy companies on the verge of collapse. Since the start of 2015, 130 North American oil and gas producers and service companies have filed for bankruptcy owing almost $44 billion, according to law firm Haynes & Boone. The tally doesn’t include Chaparral Energy Inc., Penn Virginia Corp. and Linn Energy LLC, which filed..."

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More Ties to Activists, New Questions Over Publication Status in UC Groundwater Fracking Study

by Jackie Stewart, Energy in Depth

The  National Association of Royalty Owners recently called upon the University of Cincinnati (UC) to publish its recent study on fracking and groundwater properly, in a peer-reviewed public journal, something the authors have confirmed is underway.
While this news may appear promising, the reality is the study’s data, which showed “no evidence for natural gas contamination” and was paid for by activists and taxpayers, was in fact concluded almost a year ago. EID recently discovered that another UC taxpayer funded fracking study only took three months to publish! So why then is this latest study still unpublished?
One possibility is that some of the funders—those with ties to the anti-fracking movement who initially stalled the release of the results—have asked for more time to prepare to dispute the data. While this is speculation, it is a fact that anti-fracking groups are trying to discredit the data to achieve their “Keep It in the Ground” aims, as EID recently caught on film. Interestingly enough, we have also discovered that the University of Cincinnati has been lending its name to a host of anti-fracking events, and will participate in an upcoming event hosted by the Southeast Ohio Alliance to Save Our Water from Fracking.
Let’s take a look at some of the latest revelations.
UC Taxpayer Funded Fracking Air Study Published in Less than Year
In January 2014, UC announced a new study to determine air quality impacts of oil and natural gas. UC’s Center for Environmental Genetics (CEG) received federal tax dollars for this study in the form of a grant from the NIH’s National Institute of Environmental Health Sciences (NIEHS)for $47,910. The results of that study were made available a year later (January 2015) at a meeting hosted by the anti-fracking activist Carroll Concerned CitizensThree months later (March 2015), UC announced that the fracking study on air quality was published and peer-reviewed in Environmental Science and Technology.
The authors of the  study found elevated polycyclic aromatic hydrocarbon (PAH) levels near shale natural gas wells in Carroll County, Ohio, but admitted that the sample size used for their study was too small and the that chief assumption used for their research model was “totally impractical,” according to multiple media reports. Yet that didn’t impede the study from being published in a peer-reviewed journal in less than 90 days, nor did it prevent headlines such as, “Fracking may cause air pollution, respiratory issues,” and “Fracking could increase risk of cancer, new study finds”.
Groundwater Study Still Not Published in Peer-Reviewed Journal
By comparison, the UC groundwater study findings were announced in February 2016 once again at a Carroll Concerned Citizens meeting. According to an email from the lead author, Dr. Amy Townsend Small, to the National Association of Royalty Owner’s (NARO), UC is “currently working to prepare these data for publication in a peer-reviewed journal”. In other words, they are just beginning the process to publish after four months.
Why is there such a difference in the effort for publication this time around? Perhaps it could be that the headlines for the data from this taxpayer and activist funded study, included examples like  “University of Cincinnati study finds fracking’s bad rap is not supported”. As American Thinker reported,
“This is a scandal that goes to the heart of the relationship between science and public policy and the reliability of global warming doomsayers.  The scandal was broken in a small town newspaper, the Free Press-Standard of Carroll County, Ohio and only gradually made its way to the national media via Jeff Stier of the National Center for Public Policy ResearchNewsweek, and Jazz Shaw of Hot Air.”
Ban-Fracking Activists Funded the UC Study, Not “Industry”
While the authors of the study drag their feet to publish, the anti-fracking community is already out in full force twisting the facts and providing misinformation to the public.
Recently EID caught protestors in the spin zone trying to say that the groundwater study was not credible because it was “funded by industry”, when it was actually funded by ban-fracking activists and taxpayers. Take a look at what EID caught on film at a ban-fracking rally:
Ban Fracking Activist to EID: “An industry paid study is not valid. So quit citing it”
EID: “The University of Cincinnati study was an industry study?”
Ban Fracking Activist: “I do not care.  It’s an industry paid for study.”
EID: “Are you saying the University of Cincinnati Study was industry paid? “
Ban Fracking Activist: “Yes I am, I’m saying yes, absolutely”
In fact, 18 percent of the funding for the water sampling came from the Deer Creek Foundation, which also gave $25,000 to the Media Alliance in Oakland, Calif. for a documentary on the “rise of ‘extreme’ oil and gas extraction – fracking, tar sands development, and oil drilling in the Arctic” as well as $20,000 to the Northern Plains Resource Council, a Montana activist group that states on its website, “Fracking damages water, land and wildlife.” The Deer Creek Foundation also donated at least $20,000 to WildEarth Guardians, which is a key player in the “Keep it in the Ground” anti-fossil fuel movement that has been especially active in Ohio lately.
Meanwhile, 100 percent of the funding for the tools and equipment used to analyze the water samples came from state and federal tax payers.
UC Professors Continue to Participate in Ban Fracking Events
Unfortunately the likelihood that anti-fracking bias has been dictating the actions of the researchers has to be considered in this situation. After all, why do UC professors continue to pop up at anti-fracking activist events?  Both Dr. Erin Hayes and Dr. Amy Townsend-Small decided to announce their research at events held by activists groups that vocally oppose  the oil and gas industry.  Next week, UC professors are slated to participate in the Southeast Ohio Alliance to Save Our Water from Fracking event in Columbus. According to group’s website, the conference is,
“A one-day conference for legislators, regulators, healthcare providers and community members on unconventional shale gas development in Ohio and its environmental and public health impacts. With special presenters: Dr. Julie Weatherington-Rice, Raina Rippel, SWPA Environmental Health Project, Associate Professor Erin Haynes, University of Cincinnati, & Professor James O’Reilly, University of Cincinnati, author of “The Law of Fracking” and Dr. Peter Nara.”
UC professor James O’Reilly is no stranger to anti-fracking events. In fact, last year he participated in a “Beyond Fossil Fuel” summit in Kentucky.  His book, “The Law of Fracking” is essentially a guide on “how to sue an oil and gas company.” Take a look at the video below. Professor O’Reilly ‘s biography includes significant misinformation about fracking, incorrectly claiming a lack of economic stimulus, the destruction of county roads, and gross impacts to agriculture jobs, and more.

Professor James O’Reilly:  “I’m not a geologist so I can’t say precisely how rapidly the gas is going to dissipate, but it is a significant 3 to 5 years, a 3 to 7 year cycle.”
This is not the first time an agenda-driven professor and supposed “expert” has said they haveno scientific credentials in matters relating to shale development.  The irony here is that Professor O’Reilly works for the same public university that conducted the strangely delayed groundwater study, the study in which isotope analysis to determine how “rapidly the gas is going to dissipate” over a period of three years and found:
“Based on the carbon and hydrogen stable isotope data along with the relatively consistent measurements within individual’s wells over the study period, we have found no evidence for natural gas contamination from shale oil and gas mining in any of the sampled groundwater wells of our study.”
EID has been following this story since the UC groundwater study was first announced at an anti-fracking meeting in February. We have documented our ongoing research for the past few months, calling attention to various concerns regarding the study. We have tried to give this public university the benefit of the doubt, hoping UC  was making a good faith effort to publish its findings. That case, however, is becoming harder and harder to make. Once again, we encourage UC to expedite its efforts to publish this study in a scientific journal, despite the fact that the findings will continue to “disappoint” agenda-driven anti-fracking groups more interested in ideology than science.
Copyright Energy in Depth. Reprinted with permission. View original article:  http://energyindepth.org/ohio/more-ties-to-activists-new-questions-over-publication-status-in-uc-groundwater-fracking-study/

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