Wednesday, July 27, 2016

Oil Prices Slip to Three-Month Low

From Bloomberg:
Oil fell to a three-month low in New York as supplies were considered plentiful even as stockpiles were seen deepening a record pullback in the U.S., the biggest fuel consumer. 
West Texas Intermediate futures declined 1.3 percent after falling 2.4 percent Monday. While U.S. crude inventories probably slid by 2.25 million barrels last week, gasoline supplies may have added 600,000 barrels, swelling stockpiles already at their highest in decades, according to a Bloomberg survey before a government report Wednesday. 
Crude has slipped more than 15 percent since early June after almost doubling from a 12-year low in February as supply disruptions from Nigeria to Canada trimmed a worldwide surplus. BP Plc, the first oil major to report second-quarter results, missed analyst estimates as lower prices continued to erode income and refining margins shrank.
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Halliburton Posts $3.2 Billion Loss, Lays Off More Workers

From Fuel Fix:
Halliburton reported a $3.2 billion loss in the second quarter Wednesday, largely because of a $3.5 billion breakup fee it paid rival and former acquisition target, Baker Hughes. 
Halliburton’s acquisition of Houston-based Baker Hughes fell apart in early May after the Justice Department intervened because of anti-competitiveness concerns. 
Halliburton said it cut about another 5,000 jobs globally during the second quarter, bringing the total workforce to just more than 50,000 people. Halliburton has eliminated more than 35,000 jobs in two years, roughly 40 percent of its total jobs during that timeframe. 
Halliburton’s second-quarter revenue of $3.8 billion was off almost 35 percent from the same period a year earlier, when the company recorded earnings of $54 million. In the first quarter of this year, Halliburton posted revenue of $4.2 billion and a $2.4 billion net loss. 
Halliburton’s North American revenue fell 15 percent in the second quarter, Chairman and CEO Dave Lesar said, while the continent’s rig count fell by a steeper 23 percent.
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Eclipse Resources Drills Two Utica Shale Wells in 2nd Quarter

From an Eclipse Resources press release:
Since resuming operations in the 2nd quarter, the Company has drilled 2 gross (2.0 net) operated Utica Shale wells and is currently drilling its third well in the dry gas portion of its Utica Shale acreage. In addition, the Company has completed 4 gross (3.9 net) wells averaging 10 stages per day in the liquids rich portion of its Utica Shale Acreage utilizing all slick water, 150’ stages and higher sand concentrations of 1,800 to 2,000 pounds/foot. The Company expects to put the pad into sales in the next 30 days. Further, the Company is approximately 50% done fracking its five well Wheeler pad and have been completing 8-11 stages a day while using higher sand concentrations of 2,000 pounds/foot. 
Commenting on the second quarter, Benjamin W. Hulburt, Eclipses Resources’ Chairman, President and CEO said, “I continue to be impressed with our team’s strong execution, especially as we continue to extend the lateral length on our wells in the higher pressure, deeper and more technically challenging portion of our acreage position in the Utica dry gas area. Additionally, The Purple Hayes well continues to produce at its managed choke target rates with flat production, shallower pressure declines, and no change in the condensate yield to date. The Company believes this to be indicative of better than anticipated performance and remains optimistic with the results to date, although no assurances can be given as to the long-term performance of the well at this juncture.”
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Energy Industry Job Cuts Not Stopping Yet

From NGI:
The energy industry has lost tens of thousands of jobs since oil prices collapsed in 2014, and while the workforce reductions may have slowed, several companies have reported more layoffs in cost-cutting efforts during recent days. 
"As a result of the weakness in activity that will persist through 2016 as expected, we have made another significant adjustment to our cost and resource base, including the release of more than 16,000 employees during the first half of 2016 and a further streamlining of our overhead, infrastructure, and asset base," Schlumberger Ltd. CEO Paal Kibsgaard said. "This has led to $646 million in restructuring charges in the second quarter for the reduction in our workforce..." 
About half of those cuts reportedly came in the second quarter. 
The restructuring "should bring the company into the shape where we are well-positioned to navigate the bottom of the market and also well-positioned to start growing again going forward," Kibsgaard said during a conference call with analysts Friday.
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EIA Projection: Utica Shale Gas Production to Increase in August

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Tuesday, July 26, 2016

Despite Provocative Headlines, New Pa. Study Fails to Link Fracking to Asthma

by Seth Whitehead, Energy in Depth

Researchers at Johns Hopkins University and Geisinger Health Systems have teamed up again to release another study of the potential impacts of oil and gas development in the Marcellus, this time focusing on exacerbations of asthma attacks. This new study claims those who live near shale gas wells are “1.5 to four times likelier to have asthma attacks than those who live far away.”
Just to provide some quick context, this is the same team of researchers who published a study claiming premature birthrates were higher in counties closest to shale wells, even though theywere right in line with the national premature birth rate. One of the researchers that stands out is Brian Schwartz, a fellow at the Post Carbon Institute which has called fracking a “virus.” Considering that background, it’s not surprising that, despite the fact that study after study, including data from the Environmental Protection Agency, has shown that fracking does not harm air quality, the researchers apparently started the study with the following preconceived (and debunked) assumption.
“UNGD has been associated with air quality and community social impacts. Psychosocial stress, exposure to air pollution, including from truck traffic, sleep disruption, and reduced socioeconomic status are all biologically plausible pathways for UNGD to affect asthma exacerbations.”
As the researchers likely intended, the study produced provocative headlines like “Health study shows connection between asthma attacks and gas drilling” even though it actually doesn’t show that and the authors openly admit that. Here are some important things to keep in mind when reading this study:
Fact #1: Authors admit they have no data to link asthma exacerbations to fracking
By comparing the electronic health records of 35,508 asthma patients “with and without exacerbations” treated at Geisinger Clinic between 2005 and 2012, the authors claim to have identified 20,749 mild asthma exacerbation instances (new oral corticosteroid medication order), 1,870 moderate (emergency department visit) and 4,782 severe (hospitalization) asthma exacerbations that they claim show an “association” to residential proximity to natural gas development.
“Association” is the key word in the latter sentence — the authors concede right off the bat they have no data to show causation attributable to shale development:
“Residential UNGD activity metrics were statistically associated with increased risk of mild, moderate, and severe asthma exacerbations. Whether these associations are causal awaits further investigation, including more detailed exposure assessment.” (pg. 1)
Reuters rightly reported that “The study doesn’t prove fracking causes asthma or makes symptoms worse.”
Fact #2: Data show counties with highest number of asthma sufferers have little to no shale development; Includes no data for Washington County, which has the most shale wells
One would think that if you were going to study whether fracking contributed to asthma exacerbations you could want to compare patients with exacerbations in counties with shale development to patients with exacerbations in counties without shale development. But the researchers didn’t do that. Instead, they only looked at whether patients with exacerbations lived near a shale well.
What’s more than a little interesting is the fact the areas researchers studied (outlined in the graphic below in gray) which had the highest concentrations of asthma sufferers have little no shale gas production. Energy In Depth has added the names of three high production counties — Bradford and Tioga, which were included in the study, and Washington County:

Curiously, the county with the most shale gas wells in the state, Washington County, wasn’t even included in the study. A vast majority of Geisinger’s patients reside in the counties highlighted in dark blue, each of which have little to no natural gas development.
So based on the graphic above, it is clear that a vast majority of the 35,000-plus asthma patients included in the evaluation live in areas with little-to-no development. Which begs the question: How relevant could the relatively small number of patients included in the study who reside close to natural gas wells be considering a vast majority of Pennsylvania residents who live in areas with shale development were not included in the study?
All of this brings us back to the question of why the researchers didn’t compare data county-by-county. For instance, although between just 21 and 63 Geisinger asthma patients live in Bradford County — which has the second-most shale wells as any county in the state — data comparing Bradford County asthma exacerbation rates with counties with no shale development might have given a better picture of whether there was an association. But maybe the data didn’t support the researchers’ narrative, and therefore wasn’t included in the study?
What’s more, not only were a vast majority of Pennsylvanians who actually live close to natural gas wells not included in the study, the researchers included 72 patients who reside in New York state, which has, of course, banned fracking.
Fact #3: Researchers admit severe exacerbations occurred in patients who smoked or were overweight – yet they still suggest it’s because of fracking
Not surprisingly, the researchers’ data revealed that smokers and people who were older or obese suffered the most severe asthma exacerbations:
“Compared with patients with mild and moderate exacerbations, patients with severe exacerbations were more likely to be female, older, current smokers, and obese.”
The fact that the researchers failed to prove causation isn’t surprising considering asthma has numerous triggers including airborne allergens, animal dander, mold, smoke, cockroaches and dust mites. According to the Mayo Clinic,
Exposure to various irritants and substances that trigger allergies (allergens) can trigger signs and symptoms of asthma. Asthma triggers are different from person to person and can include:

Chesapeake Energy Faces Lawsuit Over Alleged Bid-Rigging

From Bloomberg:
Chesapeake Energy Corp., the company Aubrey McClendon built into a natural-gas giant, was sued along with his former partner by lease holders who say the pair conspired to rig bids for drilling rights during the shale boom. 
The lawsuit against Chesapeake and Tom Ward comes four months after a federal grand jury indicted McClendon on March 1 for allegedly fixing shale lease auctions. McClendon died a day later, at age 56, when the SUV he was driving slammed into a bridge in Oklahoma City, where he lived and worked. 
The suit, brought by Chisholm Partners LLC and its investors, accuses Chesapeake and Ward of working together to artificially lower prices while McClendon led his company and Ward was chief executive officer at SandRidge Energy Inc. The plaintiffs are seeking at least $30 million in damages in the lawsuit filed July 13 in a federal court in Kansas City, Kansas.

“Chesapeake along with the defendants and SandRidge, between them, illegally ‘divided up’ the geographic area covering the Anadarko Basin Region in Kansas, and other states, and agreed not to compete and drive up prices," according to the suit.
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Officials Hopeful That Cracker Plant Will Prompt Action on $2.3 Billion Ohio River Project

From Powersource:
River industry officials hope Shell Chemical’s decision to build an ethane cracker plant on the Ohio River will provide enough of an incentive to get a long-delayed, $2.3 billion lock and dam project off the ground. 
The U.S. Army Corps of Engineers has been considering modernizing Depression-era locks and dams on the Ohio River at Emsworth, Dashields and Montgomery since 2003. The Corps is expected to sign off on a study justifying the work this fall, which would be enough time to get Congress to authorize the project before the current session ends. 
Shell has already built two docks for barges at the site, located in Potter and Center townships, Beaver County, and has moved in materials by barge as part of its preliminary work. Industry officials expect the company, a division of Netherlands-based Royal Dutch Shell, will rely on the river to move material and they say the businesses expected to be created by the cracker plant also will need dependable river infrastructure. 
“I think the Corps will be more motivated than they have been to get this study authorized,” said Michael Toohey, president and CEO of the Waterways Council. “It’s a tremendous economic investment by Shell, located right by the Montgomery lock, and it’s going to rely on inland waterways transportation.”
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Guernsey County Commissioners Continue to Oppose Drill Cuttings Treatment Facility

From Gas & Oil:
The Guernsey County commissioners have reiterated opposition to a planned drill cuttings treatment facility to be located in the Desmond Hall Industrial Park. 
“Our position hasn’t changed,” said Commissioner Dave Wilson, speaking on behalf of the board. “The primary reason we had this meeting was to give the public an opportunity to hear from these people, for our state elected representatives ... with Senator (Troy) Balderson and Representative (Brian) Hill being here ... to be able to hear the concerns here, since they would be our conduit to the OEPA and the ODNR, and those who are in control of the permitting process.” 
Wilson said concerns heard from residents and municipal and business representatives were varied. 
“The concerns have been varied in terms of potential contamination to ground water,” he said, “in terms of wells, in terms of the secondary or backup water source for the Village of Byesville, a concern expressed by a representative here of Colgate-Palmolive for both potential water or airborne contamination issues. They have been pretty much as varied as the people in attendance.”
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Utica Shale Rig Count Jumps on Latest ODNR Permitting Report

Activity finally may be picking back up in the Utica shale, according to the latest weekly permitting update from the Ohio Department of Natural Resources.

The Utica shale rig count has been on steady decline for many months now, but is showing signs of recovery lately.  This week saw it jump to 16, the highest total since early in March of this year.

In addition to the rig count increase, the total number of wells permitted has now gone over 2,200 for the first time with the addition of 7 new permits listed last week.  It stands at 2,201, with 1,763 wells drilled and 1,347 producing.

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Monday, July 25, 2016

University of Cincinnati Conducting Yet Another Taxpayer Funded Air, Groundwater Study

by Nicole Jacobs, Energy in Depth

The University of Cincinnati (UC) has been in the news recently due to two studies on the impacts of oil and gas on air and water quality in Ohio. One is a yet to be published study of groundwater that found no impacts from fracking. The other was recently retracted due to bad data that initially claimed fracking could increase cancer rates through air pollution. The corrected data showed its previous conclusions to be widely inaccurate, as levels were in fact well below the Environmental Protection Agency’s standards for health concerns.  Both of these studies received significant funding from taxpayers.
Now, on the heels of those two studies, one of the researchers of the retracted reportDr. Erin Haynes, is embarking on another taxpayer-funded study, this time focusing on an injection well in Guernsey County. The new study will look at “volatile organic compounds, formaldehyde, particle matter and radioactivity levels” and “surface and drinking water samples will also be collected to be analyzed by the University of Cincinnati.”
Here are a few things about the forthcoming study that raise some red flags:
The players – who is conducting UC’s newest oil & gas study?
The lead researcher is Dr. Erin Haynes, an associate professor at the University of Cincinnati, who was also a researcher on UC’s recently retracted air quality study that exaggerated cancer risks by 725,000 percent. Unfortunately, one has to question Dr. Haynes’ motives behind this latest research. Haynes told The Daily Jeffersonian,
“What toxins go into the air? What toxins go into the water? We are looking to collect data for a period of time and then share that data.”
She added, “…once toxins, if any, are located, the follow-up study would be to determine the effects of those toxins.”
It’s worth noting that the air study that Haynes worked on, as well as the UC groundwater study, were first announced at anti-fracking events held by Carroll County Concerned Citizens (CCCC)—a group that was hand-selected to participate in the studies as well. Haynes has alsoparticipated in and presented at anti-fracking events, which leaves one to wonder whether or not she is truly an impartial scientist simply studying data.
Conducting the research alongside Haynes is retired teacher, Rusty Roberts, who previously taught physical education and “life tools such as how to vote, file taxes, and give CPR.”
Taxpayers continue to fund these studies
Roberts told County Commissioners during his recent presentation with Haynes on the study that, “This would not cost the county anything,” since it is being funded $25,000 federal grant. But it is still paid for by taxpayers—as were the other two UC studies. The UC groundwater studyreceived a $400,000 three-year grant from the National Science Foundation and the retracted air quality study was 100 percent taxpayer funded. 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.
That means collectively UC has received nearly $473,000 to study the impacts of oil and gas development in the state – yet the two completed studies finding no impacts from nearby development have not been widely publicized by researchers. The groundwater study finding no contamination from fracking has yet to appear in a scientific journal a year after it was completed and the air study was only quietly retracted and corrected to show that emissions are actually very low.
One has to wonder, will the same occur in Guernsey County?

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Goldman Sachs: 100,000 Oil Industry Jobs Could be Coming Back in Next 2 Years

From CNN Money:
Good news laid-off oil workers: U.S. energy companies could soon face a serious worker shortage. 
Goldman Sachs believes the American oil industry is about to stage a big comeback from the painful downturn and big job losses caused by oversupply.

As more oil fields come on line and America's oil boom gets back on track, there simply won't be enough people to do the required drilling, well completion and other logistical work. Cheap oil wiped out nearly 170,000 oil and gas jobs since late 2014 as desperate companies scrambled to cut costs and avoid bankruptcy. 
That means just to keep up with the expected ramp-up in drilling activity, the oil and gas industry would need to add 80,000 to 100,000 jobs between now and the end of 2018, Goldman predicted in a recent report.
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Cracker Plant Projects Provide Opportunity for Plastics Companies

From Gas & Oil:
As a professional in the business development world, Paul Boulier, vice president of business attraction at Team Northeast Ohio, said Ohio businesses should treat the growing ethane and oil industry in the state as a marathon rather than a sprint. 
On June 7th, Royal Dutch Shell announced that it will be moving forward with a multi-billion dollar cracker plant in Beaver County along the Ohio river. 
In the middle of the Utica Midstream conference in Canton on June 8, Boulier was asked by the Chamber's vice president for public policy and energy David Kaminski to give his feedback on the announcement by Shell the day before. 
Boulier explained he has 42 years of experience in the industry and the Shell cracker plant announcment, he said, will help the industry people and public at large to “connect the dots” in the growth of the energy market in Ohio and the businesses who want to benefit from it.
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Wednesday, July 20, 2016

Depleted Workforce and Other Factors Slow Oil Industry Revival

From Reuters:
Two years ago, Reg MacDonald's 20-day drilling classes were packed to capacity, with nearly 40 students eager to land lucrative jobs in the booming oil and gas industry. Now he is lucky if he gets half a dozen to enroll. 
The latest rout in oil prices has been the last straw for many workers just getting back on their feet after the last downturn in 2008, said MacDonald, president of Maritime Drilling Schools Ltd in Nova Scotia, Canada, which trains both entry-level and experienced workers for oilfield jobs all over the world. 
"It's not stable. It's too cyclical. You get ahead and you lose," said MacDonald, who has been in the industry since the mid-1970s. 
Supply outages brought oil prices close to $50 a barrel that many U.S. shale producers say they need to lift output, and drilling has picked up in some of the best oil patches. 
Conversations with larger producers, contractors and suppliers suggest, however, that any recovery will look very different from the 2009-2014 shale boom that nearly doubled U.S. crude output and turned it into one of leading global producers 
The loss of thousands of workers during the two-year downturn and dearth of candidates to replace them is just one challenge.

Oil professionals also talk about equipment idled for so long that it has become unusable, rising service costs, and the threat of extra supply from the backlog of drilled-but-uncompleted wells.
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Ohio Seeing Power Plant Building Boom

From The Columbus Dispatch:
A power-plant building boom has hit Ohio, the first since shale natural gas changed just about everything in the state's energy landscape. 
Six plants are under construction or in the planning stages across the state, including one near Circleville. The projects show how shale gas is transforming the electricity market in a state long associated with coal and coal-fired electricity. 
"Don't be surprised if the future of power generation is natural gas, along with wind and solar," said Don Mason, a Zanesville lawyer who specializes in energy issues and a former member of the Public Utilities Commission of Ohio. "There is an abundance of natural gas that will provide the price to beat." 
It is no accident that he left coal off his list. Coal-fired power plants are closing because of a combination of old age and the high costs of complying with clean-air rules. Gas plants also emit pollutants, but at much lower levels than coal plants.
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Ohio Inches Closer to 2,200 Utica Shale Permits

The latest weekly update on permitting from the Ohio Department of Natural Resources shows that the slow crawl in the number of permits issued continued last week.  Six new permits show up on the latest report.  Three of those are for sites in Jefferson County, while one permit each went to Belmont, Monroe, and Noble counties.

There are now 2,197 permits issued for Utica shale horizontal drilling in the state, with 1,759 wells drilled and 1,347 wells producing.  The Utica rig count is 12.

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Tuesday, July 19, 2016

Corrected UC Fracking Study Shows Retracted Original Exaggerated Cancer Risk by 725,000 Percent

by Seth Whitehead, Energy in Depth

Prior to being retracted last month due to what researchers called “honest calculation errors,” a 2015 University of Cincinnati study on the effects of shale development in Carroll County, Ohio, suggested “natural gas extraction may be contributing significantly to PAH (polycyclic aromatic hydrocarbon emissions) in the air, at levels that are relevant to human health.”
That assessment led to alarmist headlines, such as Newsweek’s “Fracking Could Increase Risk of Cancer, New Study Finds,” But it turns out that the corrected version, posted this week, has reached the exact opposite conclusion:
“This work suggests that natural gas extraction is contributing PAHs to the air, at levels that would not be expected to increase cancer risk.”
In fact, the researchers’ “honest calculation errors” in the original study led to an exaggeration in the cancer risk from PAH emissions in Carroll County by an astounding 7,250 times what the corrected study shows they actually are. The following graphics from the original and corrected study pretty much tell the tale.

The first graphic illustrates the original study. The blue, green and yellow bars on the left of the graph indicate emissions at the well sites (close, middle distance and far away from natural gas wells) while the purple bars on the right are supposed to indicate emission levels detected in similar studies conducted in urban areas such as Chicago, as well as a refinery in Belgium and a pair of oil spill sites. The original study showed PAH levels in Carroll County at 330, 240, and 210 ng/m3, respectively, for each the three study groups, which were much higher than levels in urban areas and refineries.
But the second graphic, which is the corrected graphic, shows that PAH levels were actually 1.2, 0.94, and 0.97 ng/m3 in each of the study groups. These readings are far below all the comparable studies it cited and more than 20,000 percent lower than what the original study reported.
Most notably, the corrected study shows that PAH emission levels are well below the level the U.S. Environmental Protection Agency (EPA) says would increase risk of cancer — the complete opposite of what the original study claimed. Amazingly, the original study exaggerated the cancer risk 725,000 percent what it actually is, based on the researchers’ revised data.
Let’s take a look at the most notable data corrections from the retracted study to the corrected study, with the first three examples concerning cancer risk.
Original Study Claim: “Closest to active wells, the (cancer) risk estimated for maximum residential exposure was 2.9 in 10,000, which is above EPA’s acceptable risk level.”
Corrected Study: “At sites closest to active wells, the risk estimated for maximum residential exposure was 0.04 in a million, which is below the U.S. Environmental Protection Agency’ s acceptable risk level.”

Original Study Claim: “This suggests that the maximum exposure scenario would produce risk levels above the U.S. EPA’s acceptable range. Thus, PAH mixtures in areas heavily impacted by NGE may have higher than acceptable cancer risk increases as exposure moves closer to an active NGE well.”
Corrected Study: “None of the estimated ELCRs (excess lifetime cancer risk) were above one in a million, which is the conservative end of the range that the U.S. EPA considers acceptable. Thus, NGE in this study did not appear to emit PAH levels into air that would elevate carcinogenic risk associated with inhalation.”

Original Study Claim: “For the maximum residential exposure scenario of 24 h/day, estimated excess lifetime cancer risk (ELCR) decreases from 290 to 200 in a million when moving from the close to far group. For the minimal residential exposure scenario of 1 h/day, estimated ELCR decreases from 12 to 8.1 in a million when moving from the close to far group. The outdoor worker scenario was also calculated to approximate exposures working outside amidst NGE activity, such as farming or working on NGE wells. For this scenario, estimated ELCR decreases from 59 to 50 in a million when moving from the close to far group.”
Corrected Study: “For the maximum residential exposure scenario of 24 h/day, the estimated excess lifetime cancer risk (ELCR) decreases from 0.040 to 0.027 in a million when moving from the close to far group. For the minimal residential exposure scenario of 1 h/ day, the estimated ELCR decreases from 0.0017 to 0.0011 in a million when moving from the close to far group. The outdoor worker scenario was also calculated to approximate exposures working outside amidst NGE activity, such as farming or working on NGE wells. For this scenario, the estimated ELCR decreases from 0.0082 to 0.0055 in a million when moving from the close to far group…”
Essentially, the revised study completely contradicts a claim by study co-author Kim Anderson of Oregon State University, who was quoted in a press release accompanying the original study saying: “Air pollution from fracking operations may pose an under-recognized health hazard to people living near them.”
The original study also trumpets that two PAHs in particularly — benzopyrene and phenanthrene — are primary concerns for cancer. Interestingly, in the original study phenanthrene was identified as the most prominent PAH detected. However, the corrected study identifies naphthalene as the most prominent PAH detected, while benzopyrene wasn’t even mentioned as being prominently detected.
Here’s a look at the differences between the two studies in regard to phenanthrene and benzopyrene and all PAH detection in general:
Original Study Claim: “Average phenanthrene levels were 130, 96 and 88 ng/m3 for the close, middle and far groups.”
Corrected Study: “Average phenanthrene levels were 0.25, 0.18, and 0.17 ng/m3  for the close, middle, and far groups.

Original Study Claim: “Average benzo [a] pyrene levels were 2.8, 2.7 and 1.9 ng/m3 for the close, middle and far groups…. Average BaPeq (Benzo[a]pyrene equivalent) concentrations in all distance groups would be potentially concerning in chronic doses.”
Corrected Study: “Average benzo [a]- pyrene levels were 14 Å~  10−6 , 7.1 Å~  10−6 , and 2.9 Å~  10−6  ng/m3for the close, middle, and far groups. Average BaPeq concentrations in this study would likely not be concerning as chronic doses.”

Original Study Claim:
 “… PAH levels closest to natural gas activity were an order of magnitude higher than levels previously reported in rural areas.”
Corrected Study: “PAH levels closest to natural gas activity were comparable to levels previously reported in rural areas in winter.”
Though the authors’ acknowledgement of their errors and relatively prompt publication of the corrected study is commendable — especially when compared to how UC’s still yet-to-be-published study showing no groundwater contamination from fracking has been handled — it is still becoming more and more difficult to give UC the benefit of the doubt.
Combined with the many flaws of the study EID has already pointed out – the fact that the authors admit their sample size (25 samples) was too small, that fact that they conceded that the chief assumption used for their research model was “totally impractical,” the fact that study participants were recruited by an anti-fracking activist group, and the fact that worst case scenarios were assumed in their cancer hazard assessments, just to name a few — the sheer degree to which the research team botched the original data borders on shocking, especially considering scientists would seemingly be capable of catching such egregious mathematical errors.
But maybe it shouldn’t come as a big a surprise, considering lead author Erin Haynes not only presented the study’s original findings at a meeting of an anti-fracking group, and the researchers specifically thank that group’s leader in the corrected study.
“This work was funded by grants from the National Institute of Environmental Health Sciences to Oregon State University (P30-ES000210) and the University of Cincinnati (P30-ES06096). We thank Glenn Wilson, Ricky Scott, Jorge Padilla, Gary Points, and Melissa McCartney of the OSU FSES Program for help with analysis. Thank you to Dr. Diana Rohlman of the OSU Environmental Health Sciences Center Community Outreach and Engagement Core (COEC), Sarah Elam of the University of Cincinnati (UC) Environmental Health Sciences Center COEC, Jody Alden of UC, and Paul Feezel of Carroll Concerned Citizens, all for assistance with volunteer recruitment and communication. Thank you to Pierce Kuhnell of UC for mapping sample sites. Finally, thank you to the volunteer participants in Ohio for making this study possible.”
Considering the study was taxpayer funded, it seems more explanation may be in order as to why the original version was so off the mark.

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Monday, July 18, 2016

Injection Well Shut Down After Illegal Dumping May Soon Be Back in Action

From Business Journal Daily:
The new owner of a shuttered Class II injection well along McCartney Road in Coitsville Township could resume operations in the near future, confirms a spokesman for the Ohio Department of Natural Resources. 
Eric Heis, responding by email to a request from The Business Journal related to the status of the Collins #6 well, said that the well permit was transferred after the initial owner’s permit – in this case, D&L Energy – was revoked. 
“The well in question was transferred to a new owner after D&L Energy’s permits were revoked, and the new owner expressed interest in operating the well in the future,” Heis said in his email. 
The prospect of restarting the well drew protestors near the site Tuesday. They held signs denouncing the use of injection wells as dangerous to the environment and the public. 
The bulk of D&L’s assets that included the Collins injection well were purchased by Denver-based Resource Land Holdings LLC through U.S. Bankruptcy Court in November 2013. The Coitsville well is listed as operated by North Star Disposal Services VI LLC, ODNR records show.
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Seventy Seven Energy Emerges From Bankruptcy with New $100 Million Loan

From the Wall Street Journal:
Oil-field-services provider Seventy Seven Energy Inc. is preparing to get out of bankruptcy after a judge agreed to approve a reorganization plan that would give the Oklahoma company access to up to $100 million in a new borrowing deal. 
Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., said in court Wednesday that she would give Seventy Seven Energy permission to put its reorganization plan into action. The plan would allow bondholders owed $1.1 billion to take over most of the ownership in the company, which provides drilling, hydraulic fracturing and oil-field-rental services to exploration and production companies. 
“By converting all of the funded bond debt to equity under the plan and structuring the exit facility on the [current terms and conditions], [Seventy Seven Energy and its affiliates] have the means to withstand the volatility endemic in the current commodity market,” Chief Financial Officer Cary Baetz said in earlier court documents. 
Under the company’s reorganization plan, its unsecured debt would be fully paid. Shareholders would receive warrants for 20% of new common stock.
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Thursday, July 14, 2016

Belmont County Cracker Plant Likely to Force Some Residents to Move

From The Intelligencer:
The skyline alongside the Ohio River will soon change, as contractors plan to demolish the stack of the R.E. Burger Plant by the end of the month to make room for a multi-billion-dollar ethane cracker.

Since officials with Royal Dutch Shell confirmed plans to build their giant petrochemical plant near Monaca, Pa., anticipation for the PTT Global America project in Belmont County has continued building. Although PTT executives had hoped to make a final investment determination this year, company spokesman Dan Williamson this week said the final decision will likely occur next year. 
“We are continuing the front-end engineering design process. The site remediation is also in progress. We will have enough information to announce a final investment decision in the first quarter of 2017,” Williamson said. 
As contractors working for FirstEnergy Corp. work to clear the former R.E. Burger Plant for about one-third of the land needed to construct the massive ethane cracker, many of those living to the west of Burger are learning they would need to move if Thailand-based PTT elects to proceed with the project. Company officials maintain it is too early to tell what properties they will need to build the plant, but some residents say officials have been in touch with them about acquiring their land.
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Speculation Mounting That Oil Prices Will Drop Again

Predicting what will happen to oil prices seems to be the ultimate example of an inexact science.  A lot of very intelligent people who get paid to speculate on what will happen next have been proven wrong over and over, especially in the past two years or so.

With that in mind, take the following for what it's worth.

After seeing prices rebound quickly and go north of $50 in recent weeks, the oil price has declined again of late, landing in the $45 range over the past couple of weeks.  A variety of factors have been implicated in that drop, including Brexit and the latest rhetoric from OPEC.  And now the talk among analysts seems to be concerned with if and how much further oil may drop before the price starts to rise again.

First, from Forbes contributor Michael Lynch:
The Brexit-induced turmoil in financial markets undoubtedly affected oil prices, despite the likelihood that fundamental effects will be minimal. British economic growth and oil demand might be somewhat smaller than expected pre-Brexit, but on a global level, insignificant. The sun has long set on the British oil empire.

On the other hand, the flight from the pound to the dollar no doubt has pushed the price of oil slightly lower, although there might also have been some ‘flight to safety’ in oil, but probably nothing compared to what has been seen at times over the last decade. Political risk in the oil market remains extremely high, partly because spare capacity in OPEC is minimal, making it difficult for the producers to respond to any further outages, but also due to the potential for surprise increases in supply. 
In particular, Libya appears to be close to achieving enough stability to reopen its primary oil ports and perhaps add close to 1 mb/d in high quality crude oil to the market, although that level is unlikely to be reached quickly. The situation on the ground appears much improved, but it is unlikely that restarting exports requires little more than flipping switches. In at least some places, the security situation (or insecurity situation) means that little or no maintenance has been done, and so at the least some weeks of work will be necessary to resume operations.
Next, from
Altogether, the IEA estimates that about 95 million barrels of oil are sitting in floating storage, the highest level since a wide contango opened up in the aftermath of the financial crisis in 2008-2009, which led to oil traders stashing oil at sea. 
But the IEA said that the current floating storage predicament is different from the situation in 2009 when oil traders were hoping to store a glut of oil for a profit at a later point in time. The IEA says that the market contango does not support floating storage today – the price differential between near-term contracts, while trading at a discount to futures one year out, is not wide enough to justify storing oil at sea. Instead, oil and refined products such as gasoline and diesel are being stored on tankers because of logistical problems. In addition to the North Sea, the IEA cited a recent backup of gasoline tankers at New York harbor because onshore storage facilities were mostly already in use. 
The rising use of floating storage proves that the market is far from balanced, even if it is moving in the right direction. The IEA warned in its report that a gasoline glut could forceanother oil price rout, and the presence of floating storage also demonstrates that there is still too much oil on the global market.

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Calls Increasing for Oil and Gas Companies to Disclose Details of How Shifting to Renewable Energy Will Affect Them

From Forbes:
The fossil fuel industry risks losing $33 trillion in revenue over the next 25 years as global warming may drive companies to leave oil, natural gas and coal in the ground, according to a Barclays Plc energy analyst. 
Government regulations and other efforts to cut carbon emissions will inevitably slash demand for fossil fuels, jeopardizing traditional energy producers, Mark Lewis, Barclays’s head of European utilities equity research, said Monday during a panel discussion in New York on financial risks from climate change. 
His comments are part of a growing chorus calling for more transparency from oil and gas companies about how their balance sheets may be affected by the global shift away from fossil fuels. As governments adopt stricter environmental policies, there’s increasing risk that companies’ untapped deposits of oil, gas and coal may go unused, turning valuable reserves into stranded assets of questionable value.

“There will be lower demand for fossil fuels in the future, and by definition that means lower prices” Lewis said.
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Number of North American Drillers Filing for Bankruptcy Has Hit 85 Since Start of 2015

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Wednesday, July 13, 2016

National Science Foundation Study Clears Fracking of Contaminating Water

From The Daily Caller:
Natural sources of methane are far more likely to contaminate groundwater than hydraulic fracturing, or fracking, according to a National Science Foundation (NSF) funded study published Monday. 
The study examined methane levels in groundwater supplies going back 25 years and determined that biologically generated methane and naturally occurring coal were the primary sources of methane in groundwater. 
The research also disproves environmental claims that methane from fracking causes tap-water to flame. 
“This latest study is another blow to the credibility of anti-fossil fuel activists have made water contamination a central claim in their case against fracking despite being consistently debunked by science,” Randy Hildreth, the Colorado Director of the pro-industry group Energy In Depth, told The Daily Caller News Foundation. “None of the cases of contamination researchers looked at in Colorado’s DJ Basin were attributed to wells using hydraulic fracturing and modern horizontal drilling techniques under today’s regulations.”

The study was entirely funded by the National Science Foundation’s AirWaterGas Sustainability Research Network at the University of Colorado and published in the Proceedings of the National Academy of Sciences. The study received no money from the energy industry.
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American Energy Alliance Gives Donald Trump its Endorsement

From The Daily Caller:
The American Energy Alliance (AEA) gave Republican presidential candidate Donald Trump its endorsement, adding that the billionaire’s policy will lead to a renewed era of economic prosperity. 
The AEA said Tuesday that the presumptive Republican presidential candidate would peel back many of President Barack Obama’s energy policies, including those that regulate fossil fuels. 
“Donald Trump has put forth a plan that would move our country forward by opening up more federal lands and waters for energy exploration of all kinds, utilizing cutting-edge technologies to tap into our vast resources, unwinding the Obama administration’s harmful regulations, and subjecting the Paris Agreement to the scrutiny it deserves,” Tom Pyle, the group’s president, said in a statement Tuesday. 
Pyle added: “These policies will usher in an era of prosperity that will strengthen our economy, put more money in the pockets of American families, and lift many struggling Americans out of poverty.”
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U.S. Natural Gas Supply Glut is Starting to Disappear

From Reuters:
U.S. natural gas prices have risen by a third since hitting a two-decade low in the first quarter, amid signs supply and demand are rebalancing and excess stocks left over from an unusually warm winter are being worked down. 
The volume of gas in working storage hit a record 4.01 trillion cubic feet in November 2015 and is still at 3.18 trillion cubic feet, according to the U.S. Energy Information Administration ( 
Gas stocks are 513 billion cubic feet (19 percent) higher than in the same week in 2015. But the build has shrunk steadily from a record 1.014 trillion cubic feet (69 percent) in March ( 
In response to the earlier slide in prices, the number of rigs drilling for oil and gas across the United States has fallen to the lowest level since World War Two.

By the start of June 2016, there were just 82 rigs drilling for gas, down from over 300 in June 2014, according to services company Baker Hughes.
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Corrected Data from Retracted UC Study Show Emission Levels Well Below EPA Standards

by Seth Whitehead, Energy in Depth

One of the authors of a recently retracted University of Cincinnati air quality study that yielded headlines such as Newsweek’s “Fracking Could Increase Risk of Cancer, New Study Finds” has admitted that the corrected study shows absolutely no evidence to support such alarmist headlines. confirmed Friday what EID suspected when it broke news of the retraction earlier this week — corrected data from the study shows that the levels of Polycyclic Aromatic Hydrocarbon (PAH) found near fracking sites is below the levels the U.S. Environmental Protection Agency (EPA) says would increase risk of cancer:
“… the conclusions have been reversed — the original paper stated pollution levels exceeded limits set by the U.S. Environmental Protection Agency (EPA) for lifetime cancer risk, but the corrected data set the risks below EPA levels.”
Study co-author Kim Anderson of Oregon State University was quoted in a press releaseaccompanying the original study as saying the results showed, “Air pollution from fracking operations may pose an under-recognized health hazard to people living near them.” But Anderson was forced to concede to that the corrected study does not support the researchers’ claims, which were widely reported as fact last May. She provided the following excerpt from the corrected study to
“Closest to active wells, the [excess lifetime cancer] risk estimated for maximum residential exposure was 0.04 in a million, which is below the U.S. EPA’s acceptable risk level,” Anderson told “Overall, risk estimates decreased 30% when comparing results from samplers closest to active wells to those farthest. This work suggests that natural gas extraction is contributing PAHs to the air, below levels that would increase cancer risk.”
Anderson told the miscalculation of PAH levels was due to an “honest spreadsheet error” and that the corrected version of the study will be published inEnvironmental Science and Technology “in the next few days.”
We appreciate the authors being forthcoming about their mistake and hope they will display the same urgency to publish the corrected version of the study as they did the original version, which was published just three months after it was completed.
UC has shown no such urgency, after all, in publishing a nearly year-old study that found no water contamination from hydraulic fracturing in a scientific journal, despite scrutinymedia attention, and numerous calls from groups and elected officials to do so.
Copyright Energy in Depth. Reprinted with permission. View original article:

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