Showing posts from March, 2014

Links for 3/28/14: Fracking Debate Rages On, Noted Anti-Fracking Extremist Scores Partial Court Victory, and More

WRAL:  Fact Check: The Fracking Crew   -    "A coalition of environmental groups has labeled state Sens. Chad Barefoot, R-Wake, Wesley Meredith, R-Cumberland, and Ronald Rabin, R-Harnett, as "The Fracking Crew" in a commercial that..." Fox&Hounds:  This Fracking Horror Story Is Bad Fiction   -   "An evil corporation aims to flood the earth’s crust with water, causing massive earthquakes and threatening the survival of humanity! Sounds like a movie? Of course..." Reuters:   Injunction eased so PA fracking foe can go to hospital, grocery   -    "A judge on Friday loosened an injunction restricting the movements of a Pennsylvania anti-fracking activist to allow her access to her local hospital, grocery and other places declared..." Complete Colorado:   ‘Local Control’ Really Means De Facto Statewide Fracking Ban, Call Reveals   -    "Organized efforts to push fracking bans as “local control” constitutional amendments onto Colorad

America is Now Producing More Than 10 Percent of Global Oil Supply

From The American Interest: America’s suddenly bright energy future has been well-publicized, but did you know that the US is now producing more than 10 percent of the global supply of oil? That’s a remarkable milestone, made all the more so by the rapid pace at which it was reached. The key driver behind this renaissance: fracking, which has released so-called “tight oil” trapped in rock such as shale. In fact, as the EIA  reports , more than 40 percent of American crude production in the fourth quarter of 2013: U.S. tight oil production averaged 3.22 million barrels per day (MMbbl/d) in the fourth quarter of 2013, according to U.S. Energy Information Administration estimates. This level was enough to push overall crude oil production in the United States to an average of 7.84 MMbbl/d, more than 10% of total world production, up from 9% in the fourth quarter of 2012. The United States and Canada are the only major producers of tight oil in the world. In recent years, North Ame

Guernsey County Sees Active Permitting Week in Latest ODNR Report

The latest weekly permitting report released by the Ohio Department of Natural Resource for Utica shale wells reveals another fairly busy week. Guernsey County led the way, with 9 new permits last week.  Harrison County had 6 new wells permitted, Noble County saw 5 new permits, and Carroll County rounded out the report with 2 more well permits.  The total number issued for the week ending March 22 was 22. This brings the total number of permits for horizontal drilling in the Utica shale in Ohio to 1,165.  774 wells have been drilled, 385 are producing, and the Utica rig count is 38. View the report by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Gas Well Freeze-Offs Increase Considerably During Cold Winter

From Platts: Although the bitter blasts of the just-completed winter resulted in three times as much US gas being shut in due to well freeze-offs as analysts had forecast, federal regulators say freeze-off data can lag by several months and they have no way to compel producers to release data to them. Platts unit Bentek reports that US dry gas production fell to an average of 65.7 Bcf/d in first-quarter 2014 due to freeze-off curtailments. "At the height of freeze-offs, January production dipped to 65.0 Bcf/d. In comparison, fourth-quarter 2013 production averaged 65.8 Bcf/d, and November 2013 reached a record high of 66.6 Bcf/d," Bentek said. Bentek analyst Ryan Smith said the volume of gas shut in during the winter of 2013-14 was more than three times what the firm's analysts had predicted at the start of the winter. "We had forecasted for the cumulative freeze-offs for the winter to be 43 Bcf. It was 132 Bcf. Normally it's between 35 or 40 [Bcf],&

Company Owner Pleads Guilty in Illegal Dumping Case

From the Huffington Post: The former owner of a Youngstown-based wastewater company pleaded guilty Monday to federal Clean Water Act violations in the dumping of thousands of gallons of fracking wastewater into a northeast Ohio storm sewer. Ben Lupo, 63, changed his earlier not guilty plea during a hearing before Judge Donald Nugent in federal court in Cleveland. He faces up to three years in prison, a year of supervised release and fines of up to $50,000 per day, to a maximum of $250,000. Sentencing is scheduled for June 16. Authorities had charged that Lupo, of Poland, Ohio, ordered an employee at Hardrock Excavating LLC to repeatedly dump drilling mud and brine intended for deep injection into a sewer that empties into the Mahoning River watershed, or he dumped the material himself, between November 2012 and January 2013. Read the whole article here.  You can also search for "Lupo" in the search box on the top left-hand corner of this site for more history on t

Leaking Pipeline in Ohio Spills 20,000 Gallons of Oil in Nature Preserve

From Bloomberg: Federal environmental officials now estimate more than 20,000 gallons of crude oil — double the initial estimates — leaked from a pipeline into a nature preserve in southwest Ohio. Meanwhile, Sunoco Logistics said Monday that the pipeline has been repaired and re-opened. Sunoco shut off the stretch of Mid-Valley Pipeline from Hebron, Ky., to Lima, Ohio, early March 18 after a leak was confirmed. Sunoco spokesman Jeff Shields said under a federally approved plan, a specially engineered clamp was placed on the 20-inch diameter pipeline, which had a 5-inch crack that leaked oil. The clamp was tested before oil flow resumed Sunday evening. Shields declined to say how much of the oil supply was disrupted in the last week in a system that runs about 1,000 miles from Texas to Michigan. He said the information is considered internal company business. Read the rest of that article by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlo

Will Proposed Severance Tax Be Good or Bad for Ohio?

From the Salem News: Gov. John Kasich's plan to drill into Ohio's gas and oil industry for new revenue remains controversial. His budget analysts and those working for the General Assembly differ substantially on how much money could be raised. But whichever estimate is accepted, the amount is enormous. Legislative analysts say the 2.25 percent severance tax the state House of Representatives favors would bring in $231 million over three years. The state budget office, using the 2.75 percent rate favored by the governor, expects $874 million during the same amount of time. Gas and oil drilling interests object to any increase, of course. Clearly, East Ohio has become a mecca for drillers and gas processors. The region appears to be rich in the "wet" gas that is more lucrative because it contains valuable chemicals. Read the whole article here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

MWCD Negotiates Piedmont Oil, Gas Lease That Minimizes Impacts

The Muskingum Watershed Conservancy District (MWCD) is completing negotiations for an oil and gas lease for Utica Shale development for nearly 6,700 acres of its property at Piedmont Lake in Belmont and Harrison counties that will minimize negative impacts on normal recreational activities at the lake and on surrounding land through additional protections included in the agreement. The lease agreement between the MWCD and Antero Resources of Colorado was presented to the MWCD Board of Directors for review during a meeting today (March 21), with an expected recommendation for the Board to approve the lease no earlier than at its next regularly scheduled meeting on April 18. As part of its pledge to provide for public input and transparency into oil and gas leasing of MWCD properties, the lease document can be found on the MWCD website ( /flood-reduction-and-conservation-stewardship/conservation/piedmont-reservoir-lease ) and public comments about it will be accepted by the MWCD pr

Chesapeake Plans to Continue Fire Sale of Assets in 2014

From SNL: Chesapeake Energy Corp.  intends to continue its rapid growth in liquids production while cleaning up its balance sheet, the company said in a presentation released March 24.   The presentation, which will be introduced at the annual Howard Weil Energy Conference in New Orleans, noted that the company is looking to "achieve investment grade metrics" while striking a balance between capital expenditures and cash flow from operations.   As part of Chesapeake's efforts, the company said in the presentation, it will continue to divest noncore assets and noncore affiliates while reducing financial and operational risk and complexity.   Chesapeake said that with asset sales included, its 2013 adjusted production was approximately 231.4 million barrels of oil equivalent, or MMboe. That total, the company said, included 38.5 million barrels of oil, 20.4 MMbbl of natural gas liquids and 1,035 Bcf of natural gas. Chesapeake said it anticipates growing

Companies Offer Insights Into Their Utica Shale Plans

From Columbus Business First: Oil and gas drillers often are mum on medium- or long-term plans for their companies as new shale plays pop up and potential becomes reality. But representatives of  PDC Energy  Inc.(NASDAQ: PDCE),  Antero Resources  Corp.(NYSE:AR),  Eclipse Resources LP  and Crosstex Energy Inc.  (NYSE:ENLK), – which   merged with Devon Energy Corp. earlier this month to form Enlink Midstream Partners LP – laid out their goals for the Utica shale play earlier this month at the Ohio Oil and Gas Association’s  annual winter meeting in Columbus. They were asked about their activity in Ohio in three to five years. Enlink is the only midstream company; the rest are oil and gas producers and have been i  ssued a combined 108 well permits  in the state.  Read the whole article by clicking here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Shale Credited For US Manufacturing Revival

From CNBC: The U.S. shale boom is beginning to ripple outward to American cities. The shale mining industry's rising demand for materials and equipment along with the abundance of cheap fuel are fueling a modest renaissance in American manufacturing, according to a report prepared by IHS Global insight for the U.S. Conference of Mayors. The shale extraction industry is itself driving growth through its hunger for steel pipeline, extraction machinery and other materials needed at domestic shale deposits, including the Bakken in North Dakota and the Marcellus shale in Pennsylvania. The availability of cheap fuel has in turn allowed these energy intensive manufacturing industries to cut costs and compete better with foreign imports. Read the whole article here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Utica Driller Halcon Resources Looking for a Buyer

From Reuters: More work needs to be done to develop Halcón Resources Corp's oil and  natural gas  assets before the company can be sold, Chief Executive Floyd Wilson said on Monday. Executives have long stated that their endgame for the company, formed in 2011, would be a sale, although weak well results in Ohio's Utica shale formation have hampered that goal. The company's stock is down 45 percent in the past year. "Our model is still to look for a sale at some point in the future," Wilson said in an interview on Monday at the Howard Weil energy conference in New Orleans. "Wall Street may or may not like us at the moment, but I'm certain they'll recognize us at some point." Investors and analysts have been eager to see if Wilson can replicate the feat he pulled off in 2011 when he sold Petrohawk Energy to BHP Billiton Plc for $12.1 billion, a 65 percent premium over the share price before the sale was announced. Read the entire arti

Questions Continue About Fracking and Earthquakes in Ohio

From the Youngstown Vindicator: We’ve heard it since the dawn of the fracking boom in the Mahoning Valley: Fracking doesn’t cause earthquakes.   Beginning in 2011, a swarm of as many as 109 quakes hit the Valley. Eventually, the cause was linked to an injection well at D&L Energy Inc. on Salt Springs Road, which had penetrated the Precambrian crust with fracking waste.   That acknowledgement was slow to come. In October 2011, Heidi Hetzel-Evans, a spokeswoman with the Ohio Department of Natural Resources, told The Vindicator “[ODNR has] not seen any evidence that shows a correlation between localized seismic activity and deep-injection well disposal.”   By the following March, the ODNR was on board, telling the Valley what it had suspected for months: an injection well triggered quakes.   Two years later and 12.5 miles away, a 3.0-magnitude earthquake shook Poland Township just before 2:30 a.m. In total, geologists have recorded 12 low-magnitude quakes, all near

Confusion Follows Rumored RUMA Agreement

From The Morning Journal: NEGLEY - Chesapeake Energy has not sought a new road use maintenance agreement (RUMA) in Middleton Township but has applied for a permit for a new well, Township Fiscal Officer Bob Chapman said Monday. Residents Ray and Tracy Barrow turned out for the trustee meeting to say they were trying to verify whether a RUMA had been requested. The Barrows were wondering if what they heard was a rumor, and residents Tom and Susan Cunningham also said they had heard the same. Chapman said that is not the case, but that the township received a letter from the Ohio Department of Natural Resources (ODNR) about a month ago advising that Chesapeake applied for a permit to drill an oil and gas well on township property, specifically, in section 11, which is in the vicinity of Negley, and accessible from state Route 170. "There was no indication of a RUMA to be issued," he said. Read the whole article here.  Connect with us on Facebook and Twitter!

3 Years Probation for Employee Who Carried Out Illegal Dumping in Youngstown

From the Youngstown Vindicator: The man who pleaded guilty to dumping oilfield waste into a Mahoning River tributary late in 2012 and early in 2013 has been sentenced to three years probation and 300 hours of community service, with no fine or restitution.   U.S. District Judge Donald C. Nugent imposed the sentence Thursday on Michael P. Guesman, 34, of Cortland.   Guesman had pleaded guilty Aug. 29 to one count of violating the federal Clean Water Act by dumping brine and drilling mud down a storm drain.   Guesman’s boss, Ben Lupo, 62, of Poland, and Lupo’s company, Hardrock Excavating LLC, earlier pleaded not guilty to the same charge, but Lupo is scheduled for a change of plea hearing at 10:30 a.m. Monday. You can read the rest of that article by clicking here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Should People Be Worried About Earthquakes From Fracking? Science Says No, Activists Say Yes

From The Daily Caller: Monday’s earthquake came from the northern edge of the Santa Monica Mountains, an area that doesn’t see much seismic activity, lending fuel to the flames for environmentalists who argue fracking will cause more earthquakes. But the evidence shows that fracking has little to no influence on seismic activity in California. Fracking involves injecting sand, water and chemicals into underground shale formations to extract oil and gas. Fracking operations generally pressurize a small amount of rock for about two hours which causes extremely small microseismic events, but nothing close to earthquakes. “The energy released by one of these tiny microseismic events is equivalent to the energy of a gallon of milk hitting the floor after falling off a kitchen counter,”  said Stanford university Geophysicist Mark Zoback , who was an Obama administration Energy Department advisor. “Needless to say, these events pose no danger to the public,” Zoback added. Read th

Natural Gas Prices Coming Back Down After Spike

From The Columbus Dispatch: Natural-gas prices have begun to moderate after a late-January shock that pushed central Ohio bills to their highest level since 2009. The recent spike was the result of an unusually cold winter, not a sign of a sustained price increase, so gas customers should not panic, analysts say. “This is one of the worst winters we’ve ever had,” said Robert Bellinski, an energy analyst for Morningstar. “Nobody really saw it coming.” Columbia Gas of Ohio customers are paying a regulated price of 61.4 cents per 100 cubic feet of gas, a figure that does not include taxes or fees. This translates into a bill of $125.82 for the average Columbia household, including taxes and fees. Read the whole article here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Links for 3/18/14: Lawsuits, Great Expectations for Utica Shale, and More

Press release:   Shell Creates Motor Oil From Natural Gas   -    "Shell announced today the creation of the first-of-its kind base oil made from natural gas, the cleanest burning fossil fuel. It is called Shell PurePlus(TM) Technology, a patented process of converting..." Press release:   Rock Oil Holdings LLC Announces $250 Million Commitment   -    "Rock Oil Holdings LLC ("Rock Oil" or the "Company"), a newly-formed, Denver and Houston-based oil and gas company today announced an equity commitment of up to $250million from funds managed by energy private equity firm..." Press release:   Chesapeake Files Form 10 Registration Statement for Possible Spin-Off of Chesapeake Oilfield Services   -   "Chesapeake Energy Corporation (NYSE:CHK) announced today that Chesapeake Oilfield Operating, L.L.C. (COO), its wholly owned subsidiary, has filed a Registration Statement on Form 10 with the U.S. Securities and Exchange Commission. COO curren

25 New Utica Shale Permits Last Week

It was another active week for Utica shale permitting last week, according to the latest update from the Ohio Department of Natural Resources. 25 new permits were issued.  Harrison County led the way, with 11 of the permits.  7 were issued for Belmont County, 2 each for Carroll, Monroe, and Noble counties, and 1 for Jefferson County. There have now been 1,148 permits issued for horizontal drilling in Ohio's Utica shale.  770 wells have been drilled, and the number of wells producing remained steady at 385.  The Utica rig count is 39. View the report here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Forbes: Chesapeake's Plan to Bilk People Out of Royalties Also Means the Company is Stealing From Shareholders

From Forbes: Chesapeake Energy has long been accused by its oil and gas partners of monkeying around with royalty payments.  It looks as if this long-simmering issue is rising to a boil. If you haven’t already, be sure to check out Abrahm Lustgarten’s  investigation of Chesapeake’s royalty-related chicanery for Pro Publica last week. The WSJ also took a  look  at the issue. Both stories focus exclusively on Chesapeake’s operations in Pennsylvania, where last year the company paid $7.5 million to settle  a class-action alleging royalty skimming. Lustgarten’s piece in particular sheds new light on how in 2012 cash-crunched Chesapeake ingeniously structured the $5 billion sale of its pipeline business to screw royalty owners. In one instance discovered by Lustgarten, Chesapeake charged a farmer $2.94 per mcf to move his share of gas — more than 30 times the actual cost. But there’s far more to this than just shortchanged farmers in Pennsylvania and Texas. Indeed, one source well

Ohio Landowners Look to Be Next to Sue Chesapeake for Manipulating Royalty Payments

We ran an article from ProPublica yesterday that takes an in-depth look at how Chesapeake has plotted to play fast and loose with deductions from royalty payments, leading to a stream of lawsuits against the company.  While this has been going on in other states, particularly Pennsylvania, for a little while now, it appears that Ohio landowners will soon be entering the fray and taking Chesapeake to court for cheating them out of royalty money. From Columbus Business First: The dispute is garnering attention from those with stakes in Ohio’s oil and gas industry. Okey, whose father, Mark, tried to usher in protections for landowners during his recent stint as an Ohio legislator, told me he has reviewed dozens of royalty statements from Chesapeake to Ohioans and said they don’t show details about deductions by the company for operating costs. “In fact, they show the number zero in the deduction column,” he said. “We have good information that it is false and deductions are be

Insiders Feel That Kasich Will Get Tax Reform by Continuing to Push For It

From Republicans in the General Assembly praised Gov. John Kasich’s  mid-biennium review proposals  Tuesday as bold and ambitious, but the governor’s toughest job to get the tax reforms he wants may be convincing those same Republicans to support it.   The scene is reminiscent of 2013 when the governor floated an ambitious overhaul in the state's tax structure  to pay for income tax reductions. While the governor may not get all he's asked for this year, many expect that, like last year, there will be some compromise that leads to a lower income tax rate -- something Capitol Square insiders chalk up, in part, to the governor’s persistence.   Kasich proposed cutting income tax rates across all brackets by 8.5 percent and to increase amounts for the earned income tax credit and the amount middle- and lower- incomes can claim for individual exemptions.   The tax relief and rate reductions are expected to total more than $2.6 billion over three yea

Frack Waste Bill Makes Activists Unhappy

From The Intelligencer/Wheeling News-Register: Environmentalists raised concerns about a bill that won final passage Friday in the West Virginia legislature that would overturn caps on how much drilling waste several landfills can accept from hydraulic fracturing.  The bill, approved overwhelmingly in a special session and now sent to the governor, would allow so-called tonnage caps to be lifted for drilling waste at seven landfills that are continuing to pursue a permit to build separate areas for drilling waste. The bill also mandates that the state Department of Environmental Protection, or DEP, monitor the sites for radioactivity and conduct a study on leaching.  The seven landfills are located in the nothern part of the state.  Delegate Stephen Skinner, who voted against the bill passed Friday, called it "a Band-Aid on a very serious problem."  According to the Department of Environmental Protection, six landfills in the state are currently accepting the dril

Chesapeake Energy's $5 Billion Shuffle

by Abrahm Lustgarten ProPublica, March 13, 2014, 5:45 a.m. This story was co-published with The Daily Beast. At the end of 2011, Chesapeake Energy, one of the nation's biggest oil and gas companies, was teetering on the brink of failure. Its legendary chief executive officer, Aubrey McClendon, was being pilloried for questionable deals, its stock price was getting hammered and the company needed to raise billions of dollars quickly. The money could be borrowed, but only on onerous terms. Chesapeake, which had burned money on a lavish steel-and-glass office complex in Oklahoma City even while the selling price for its gas plummeted, already had too much debt. In the months that followed, Chesapeake executed an adroit escape, raising nearly $5 billion with a previously undisclosed twist: By gouging many rural landowners out of royalty payments they were supposed to receive in exchange for allowing the company to drill for natural gas on their property. In lawsuits in st

Links for 3/13/14: Kasich Still Pushing for Higher Severance Tax, Dinosaur Bones Slow Shale Operation, and More

National Geographic:   East Harlem Explosion Highlights Risk of Natural Gas Leaks   -    "The deadly explosion that ripped apart two buildings in New York's East Harlem on Wednesday morning brings new attention to a risk experts have been warning is especially great beneath..."   Ohio Gov. Kasich would collect $874 million from shale wells in next three years   -    "Gov. John Kasich's plans to collect an estimated $874 million from Ohio's largest oil and gas producers over the next three years has..." Fuel Fix:   Looking for shale gas, they found Godzilla’s nemesis   -    "An Exxon Mobil shale gas project in Argentina has been put on hold after a road construction crew struck dinosaur bones of titanic size.  Preparing to explore for natural gas in western Argentina late last year, Exxon uncovered fossils from a herd of Titanosaurus Sauropods, a..." The Breakthrough Institute:   Keeping the Poor Poor   -    "It ha