Another Fracking Strawman, Up In Smoke

Interior Secretary Ken Salazar, telling Reuters on Monday that state regulation of hydraulic fracturing isn’t enough:

"There are some who are saying that it's not something we ought to do, it should be left up to the states. That's not good enough for me because states are at very different level, some have zero, some have decent rules."

Bold, to be sure. So we wonder about the “some who are saying” in Salazar’s comment. Who’s he talking about? Perhaps EPA Administrator Lisa Jackson, who said this in an interview last fall:

"The vast majority of oil and gas production is regulated at the state level. There are issues of whether or not the federal government can add to protection and also peace of mind for citizens by looking at large issues like air pollution impacts, which can be regional. ... So it's not to say that there isn't a federal role, but you can't start to talk about a federal role without acknowledging the very strong state role. We have no data right now that lead us to believe one way or the other that there needs to be specific federal regulation of the fracking process."

Worth repeating: The chief of the federal agency charged with protecting the environment says they’ve got nothing indicating that there needs to be “specific federal regulation of the fracking process.” More Jackson, a few days later on MSNBC:

“States are stepping up and doing a good job. I always say it doesn't have to be EPA that regulates the 10,000 wells that might go in."

Now, about the last part of Salazar’s comment, that some states have “zero” hydraulic fracturing regulation. We’ve checked around, and it looks like the secretary succumbed to a bit of Washington hyperbole there. A 2009 report by the Groundwater Protection Council, funded by the Energy Department for its National Energy Technology Laboratory, didn’t detect any oil and natural gas-producing states with ZERO rules.

Meanwhile, state officials sure sound deserving of Jackson’s confidence.

Oklahoma Corporation Commission Chairman Dana Murphy, before Congress last fall:

"My fundamental point would be to encourage that the states are the appropriate bodies to regulate the oil and gas drilling industry. Protection of water and the environment and the beneficial development of the nation's resources of oil and gas are not mutually exclusive goals. Oklahoma is proof of that."

And Pennsylvania Department of Environmental Protection Secretary Michael Krancer:

“Simply put, because of our long history of oil and gas development and comprehensive regulatory structure, Pennsylvania does not need federal intervention to ensure an appropriate balance between resource development and environmental protection is struck.”

And Colorado Gov. John Hickenlooper:

“I was personally involved with 50 or 60 (fracked) wells. There have been tens and thousands of wells in Colorado … and we can’t find anywhere in Colorado a single example of the process of fracking that has polluted groundwater. … There is a lot of anxiety out there certainly with hydraulic fracturing. But often times that anxiety is not directly connected to facts.”

If Secretary Salazar is dissatisfied with state-centered regulation of fracking – which is closest to and most responsive to individual industry operations – he should check with Administrator Jackson. And also with officials in the states, who clearly take the responsibility to oversee fracking within their borders seriously.

View the original article here

Video: Refiner Plays Its Role in ND Energy Bonanza

The sights and sounds of energy-driven growth are all over this video, in which Ron Day of Tesoro Corporation talks about how the company’s Bismarck-Mandan oil refinery has grown along with development of North Dakota’s Bakken shale play:

For the benefit of the energy-jobs deniers out there, let’s underscore Day’s description of the multiplier effect associated with a growing energy sector, which is being seen across North Dakota, Pennsylvania, Texas and other energy states:

“We’re hustle and bustle. We’re growing. It’s a great opportunity for North Dakota: from restaurants to car parts stories, to repair shops – they’re definitely being impacted in a positive way (by energy development).”

Even better? America is energy rich, which means the North Dakota “miracle” can be repeated elsewhere – with the right policies and leadership.

View the original article here

Graphically Speaking: Fracking and Injection Wells

Last week’s National Research Council report on hydraulic fracturing and earthquakes pretty much ends up where a number of scientists are on the correlation between fracking and quakes: that energy development from shale formations poses a low risk for tremors of significance. The report said more attention should be given to injection wells, which are used for waste disposal by a number of industrial enterprises, not just the oil and natural gas industry. AP science writer Seth Borenstein’s take on the report is here.

API, America’s Natural Gas Alliance and the American Exploration & Production Council have produced a couple of informational tools on hydraulic fracturing and seismic activity and underground injection control (UIC) wells that are especially timely with release of the council’s report. 

Highlights from the fracking document:

Hydraulic fracturing is done with a mixture of more than 99.5 percent water and sand. The other one-half of 1 percent is chemical – including anti-bacterials and lubricants. See the FracFocus.org site for more on fracking fluids.Fracturing that occurs thousands of feet below the surface (and below groundwater aquifers) is carefully mapped with sophisticated equipment to optimize recovery of the oil and/or natural gas and to monitor the well itself. In other words, microseismic activity associated with fracking is thoroughly understood.

One study of several thousand shale fracture treatments across North America showed the largest micro-quake measured about 0.8 or about 2,000 times less energy than a magnitude 3.0 earthquake. The chart below shows that most of the micro-quakes in this study were 10,000 to 1 million times smaller than a 3.0 earthquake, which is roughly equivalent to the passing of a nearby truck:

Highlights from the UIC document:

The U.S. has about 151,000 Class II UIC wells used by the oil and natural gas industry, of which only a handful are being studied for possible links to earthquakes. These wells are a subset of more than 800,000 injection wells nationwide used to dispose of a variety of industrial wastes and for development of various minerals and geothermal energy sources. Here’s a map that shows the state-by-state well distribution:

Injection wells are regulated by EPA under the Safe Drinking Water Act. In many cases EPA has delegated authority for the UIC program to the states, with 39 states having primary authority over 95 percent of all UIC Class II wells.Literature published in the past five years shows that less than 40 incidents of seismic activity felt on the surface were associated with Class II injection wells.

Injection wells pump fluids into deep rock formations (see graphic). It’s unusual, but in some cases a quake can occur when a number of geological and operational factors come together – especially the presence of hard, dense and brittle crystalline “basement rock.”  These quakes are almost always small, below the level that would be felt on the surface.

For more information, check out the Energy From Shale website.

View the original article here

Friends of Fracking and Natural Gas

Perhaps as important as the president of the United States acknowledging the importance of natural gas and hydraulic fracturing to America’s energy present (and future) is a sense that such support is pretty far and wide. Here’s a quick roundup of some notable friends of natural gas – affordable, abundant and creating jobs all across the country – with a nod to Energy In Depth’s Steve Everley for help in corralling the links.

U.S. Sen. Sherrod Brown, D-Ohio:

“Shale development means economic development, and that’s exciting news for Ohio. It means tens of thousands of good-paying jobs across our state, all while helping to lower power costs for Ohio consumers. … We know that Ohio is home to countless innovative companies and a world-class workforce—now we need to ensure that energy companies arriving in the state are utilizing all that Ohio has to offer.”

Deputy Energy Secretary Daniel Poneman:

“The natural gas boom in the United States offers a tremendous opportunity to strengthen American energy security by drastically reducing our dependence on imported oil, while at the same time creating new U.S. jobs and industries. This is precisely why President Barack Obama is committed to safely and responsibly harnessing American oil and gas resources, and to developing the technologies that will unlock new domestic energy sources.”

U.S. Rep. Mike Ross, D-Ark.:

“I’m a firm believer in natural gas. It already supplies almost one-fourth of all energy in the U.S. and we’re discovering more natural gas reserves every day thanks to newer, safer drilling techniques and technologies. Better yet, more than 98 percent of natural gas comes from right here in North America. … With the Fayetteville Shale in the northern part of (Arkansas) and the Haynesville Shale in the southern part, we have an abundant supply of clean, affordable energy to offer the world.”

Natural gas and fracking have support from strong environmentalists including …

U.S. Sen. Ron Wyden, D-Ore.:

“This is what I tell environmental folks: Natural gas is really important to a lot of renewables, solar and wind, ensuring that option is out there. … Natural gas is the cleanest of the fossil fuels, so you start with that as your basic proposition.”

U.S. Rep. Edward Markey, D-Mass.:

“I think environmentalists should want natural gas on the table as an option. When coal is also going to be considered for new electrical generation or an extension of the life of an existing coal-fired power plant, I think it would be wise for us to not take natural gas off the table.”

Gov. John Hickenlooper, D-Colo.:

“Like any industrial process, fracking has some risks but, really, if done properly, certainly out in the West, there is literally no risk — certainly much less than many industrial processes. … I love open space and wilderness, but we all drive cars, right? And we all need energy. We recognize that, along with education, energy is the other necessary component to lifting people out of poverty.”

That last point is so important. Energy development is the difference between modern and primitive civilization – facilitating greater freedom, mobility and opportunity for better, healthier lives.

Candidly, the choice offered by some opponents of natural gas and hydraulic fracturing isn’t between more responsible development and less; it’s between responsible development and NO development. It’s an extreme choice. As energy blogger Steve Maley posted a few weeks ago, “If you’re not a fan of natural gas you’re a fan of mud huts.”

The right choice is to safely and responsibly develop a resource that can play a major role in securing America’s energy future.

View the original article here

Friends of Fracking and Natural Gas

Perhaps as important as the president of the United States acknowledging the importance of natural gas and hydraulic fracturing to America’s energy present (and future) is a sense that such support is pretty far and wide. Here’s a quick roundup of some notable friends of natural gas – affordable, abundant and creating jobs all across the country – with a nod to Energy In Depth’s Steve Everley for help in corralling the links.

U.S. Sen. Sherrod Brown, D-Ohio:

“Shale development means economic development, and that’s exciting news for Ohio. It means tens of thousands of good-paying jobs across our state, all while helping to lower power costs for Ohio consumers. … We know that Ohio is home to countless innovative companies and a world-class workforce—now we need to ensure that energy companies arriving in the state are utilizing all that Ohio has to offer.”

Deputy Energy Secretary Daniel Poneman:

“The natural gas boom in the United States offers a tremendous opportunity to strengthen American energy security by drastically reducing our dependence on imported oil, while at the same time creating new U.S. jobs and industries. This is precisely why President Barack Obama is committed to safely and responsibly harnessing American oil and gas resources, and to developing the technologies that will unlock new domestic energy sources.”

U.S. Rep. Mike Ross, D-Ark.:

“I’m a firm believer in natural gas. It already supplies almost one-fourth of all energy in the U.S. and we’re discovering more natural gas reserves every day thanks to newer, safer drilling techniques and technologies. Better yet, more than 98 percent of natural gas comes from right here in North America. … With the Fayetteville Shale in the northern part of (Arkansas) and the Haynesville Shale in the southern part, we have an abundant supply of clean, affordable energy to offer the world.”

Natural gas and fracking have support from strong environmentalists including …

U.S. Sen. Ron Wyden, D-Ore.:

“This is what I tell environmental folks: Natural gas is really important to a lot of renewables, solar and wind, ensuring that option is out there. … Natural gas is the cleanest of the fossil fuels, so you start with that as your basic proposition.”

U.S. Rep. Edward Markey, D-Mass.:

“I think environmentalists should want natural gas on the table as an option. When coal is also going to be considered for new electrical generation or an extension of the life of an existing coal-fired power plant, I think it would be wise for us to not take natural gas off the table.”

Gov. John Hickenlooper, D-Colo.:

“Like any industrial process, fracking has some risks but, really, if done properly, certainly out in the West, there is literally no risk — certainly much less than many industrial processes. … I love open space and wilderness, but we all drive cars, right? And we all need energy. We recognize that, along with education, energy is the other necessary component to lifting people out of poverty.”

That last point is so important. Energy development is the difference between modern and primitive civilization – facilitating greater freedom, mobility and opportunity for better, healthier lives.

Candidly, the choice offered by some opponents of natural gas and hydraulic fracturing isn’t between more responsible development and less; it’s between responsible development and NO development. It’s an extreme choice. As energy blogger Steve Maley posted a few weeks ago, “If you’re not a fan of natural gas you’re a fan of mud huts.”

The right choice is to safely and responsibly develop a resource that can play a major role in securing America’s energy future.

View the original article here

Energy: It’s About Jobs

Converse Work 6" Rapid Response-ST Boots (Desert Tan) - Men's Boots - 10.5 M (Google Affiliate Ad)The latest jobs report, showing the creation of just 80,000 new jobs in June, is refocusing the political debate on the economy. How meager is 80,000 jobs? Well, according to UPI that’s “not even enough to keep up with growth in the working-age population,” which last month grew by 191,000. Meanwhile, a Rasmussen survey reports that only 31 percent of likely voters say the president is doing a good or excellent job handling economic issues.
Short analysis: It’s about jobs. Good news: It doesn’t have to be hard.
Energy-related job booms in North Dakota, Pennsylvania, Texas and other states are showing what’s possible – in terms of jobs, tax-revenue generation and associated economic growth – when energy development leads the way. The Institute for Energy Research’s Robert Bradley Jr., in an article for Oilprice.com:

"In North Dakota, where drillers are producing crude oil from the Bakken Shale, workers are finding jobs offering wages that are significantly higher than the national average. Truck drivers are being paid $80,000 a year to start. Some workers on oil rigs are being paid six figures. And yet many jobs are going begging. According to the mayor of Williston, 'A lot of jobs get filled every day, but it’s like for every job you fill, another job and a half opens up.' In April, North Dakota had a jobless rate of 3.0 percent, the lowest in the country."

Additional detail:
In Pennsylvania, Bradley writes, state analysis projects jobs for drill operators will grow nearly 85 percent this year (compared to sub-3 percent growth otherwise in the state).Expansion is occurring in Texas’ Eagle Ford shale play, Louisiana’s Haynesville Shale, Arkansas’ Fayetteville Shale and other energy-rich rock formations, “increasing domestic energy supplies, making energy more affordable, and spawning subsidiary investments in the private sector creating additional jobs.”A steel plant in Ohio is adding 200 jobs to produce more drill pipe.A planned ethane plant in Texas is expected to create 400 jobs.
Bradley:

"These jobs are being created by companies, not the federal government. And they are based on 'made in the USA' technologies that have the potential to greatly increase nation’s energy security and alter the world’s balance of power. As U.S. oil and natural gas supplies increase, some experts believe American energy independence is on the horizon."

On his blog, John R. Hanger connects energy production and employment:

"Jobs are a major product of that commerce and energy production. The 5 biggest energy producing states all have unemployment rates below the national average, but the same cannot be said about the 5 states producing the least energy." 

Meanwhile, Canada, which a few years ago staked its economic revitalization on energy, is looking for U.S. workers to fill anticipated job slots in Alberta. The Edmonton Economic Development Corporation expects a shortage of 114,000 workers in the coming months and has set up the aptly named opportunityawaits.com website to promote job openings. One U.S. veterans group is reaching out to former military personnel and active-duty soldiers who soon will transition to civilian life, encouraging them to consider oil sands and Keystone XL pipeline jobs in Canada. Fox News has a story, here. Again, the point is to recognize the dynamic economic power of the energy stimulus.
No question, U.S. jobs figures for June suggest a still-struggling economy. The administration says it’s not to blame, that there are limits to what a president can do to change the national economic trajectory. Indeed, a president has limited options – so perhaps the first move is to not stand in the way of growth.
Energy is a proven job creator, a shining sector in the weak economy. But the administration is making energy expansion harder, not easier. It is delaying construction of the Keystone XL pipeline, and it is restricting offshore energy development. Its permitting policies in the Gulf of Mexico have suppressed production there, costing jobs and economic opportunity throughout the region. It is sending confusing messages on hydraulic fracturing, the shale technology that is unlocking America’s ample energy potential.
America’s oil and natural gas companies are creating good jobs and can create even more. With the right policies this industry can add 1 million new jobs before the end of the decade. Here’s a blueprint for an American-made energy policy.  It’s energy, it’s jobs and it’s within our reach.

View the original article here

Caution Warranted as E15 Launches in Kansas

From Kansas we hear that a gas station owner in Lawrence has become the first in the country to offer E15 fuel – gasoline with 15 percent ethanol instead of the 10 percent blend that’s standard around the U.S. According to the New York Times, Scott Zaremba may expand E15 to more of his eight stations.

Before motorists in the Lawrence area rush down to fill up, they might take the time to check their vehicle warranties. Even though the EPA has approved E15 for cars and light trucks from model year 2001 forward, a Coordinating Research Council study showed that the fuel can cause engine damage. Automobile manufacturers have said vehicle warranties will not cover damage from E15. Bob Greco, API downstream group director:

“We need to press the pause button on EPA’s rush to allow higher amounts of ethanol in our gasoline. The new fuel could lead to engine damage in more than 5 million vehicles on the road today and could void the manufacturer’s warranty.”

Greco said E15 also could damage engines in boats, recreational vehicles and lawn equipment. Consumers should follow the fueling recommendations in their owner’s manuals and carefully read all gasoline pump labels before refueling, he said.

Potential problems with E15 – which is being advanced as a way to help meet volume requirements set out by the Renewable Fuels Standard – were discussed at a hearing on Capitol Hill this week. API President and CEO Jack Gerard criticized EPA’s rush to push E15 into the marketplace:

“EPA should not have proceeded with E15, especially before a thorough evaluation was conducted to assess the full range of short- and long-term impacts of increasing the amount of ethanol in gasoline on the environment, on engine and vehicle performance, and on consumer safety.”

Greco said consumer protection is paramount:

“Our first priority should be protecting consumers and the investments they’ve made in their automobiles. EPA has an obligation to base this decision on science and not on a political agenda.”

View the original article here

Video: The North Dakota Miracle

Great video from the folks at the Heritage Foundation and the Institute for Energy Research that features real people talking about North Dakota’s energy-driven miracle. Take a look:

Some general points about North Dakota:

State unemployment in May was 2.7 percent.The state’s treasury is flush with revenue, a lot of it generated by energy activity. The most recent finance report predicts $2 billion in surplus and reserves by June 30, 2013.In March the state passed Alaska in monthly oil production, 17.8 million barrels to 17.5 million, becoming the No. 2 producer in the country. Just six years ago it was No. 9. Thanks, Bakken Shale, and hydraulic fracturing.

Truck driver Terry Swift from the video is right: “This is the American way. If you can still put your boots on in the morning and go to work, you do it. You provide, and there’s a lot of people doing just that.”

Energy is the catalyst. With the right vision and policies, American-made energy that is generating North Dakota’s miracle – jobs, economic opportunity, tax revenues – can produce more miracles elsewhere.

View the original article here

The Offshore Oil and Natural Gas Lease Sale We Need

Tomorrow’s scheduled Central Gulf of Mexico oil and natural gas lease sale in New Orleans will be the first in that area since March 2010. Setting aside for a moment the two-year gap in exploration and development caused by two years without new sales, tomorrow’s auction is important to America’s economic and energy security.

Unfortunately, the two-year gap is real and has real impact. Because it takes seven to 10 years for an offshore lease to start producing oil or natural gas, there’s a gap in the development timeline. It’s like a vintner who skips two years growing grapes; at some point in the wine-producing process there’ll be a lean vintage year. Here’s a chart that shows the stages and time requirements of offshore development:

A couple of other points about tomorrow’s lease sale, underscored by API’s Upstream and Industry Operations Director Erik Milito during a conference call with reporters: While it’s good the Bureau of Ocean Energy Management is holding the sale – which will generate significant industry interest – the areas in the Gulf being offered aren’t new, emphasizing the administration’s restricted approach to developing America’s energy resources. Milito:

“Every lease sale is important, but more important for our energy future than any individual sale is our nation’s broader energy policy framework. That, unfortunately, has been inadequate. The administration’s proposed five-year offshore leasing plan for 2012 through 2017 … would limit offshore development to where it historically has always been – parts of the Gulf of Mexico and offshore Alaska. It would restrict opportunities when it should be expanding them. It would not help prepare us well for our energy future.”

If the energy goal is to reduce oil imports, then tomorrow’s sale reflects a short-sighted vision that will struggle to take us there. Good news: It doesn’t have to be that way. America is energy-rich, with the resources, financial wherewithal and technological know-how to substitute domestic production for much of what we get now from foreign suppliers. It simply takes the right plan, the right approach.

With the right access policies – capitalizing on tight oil and shale gas discoveries, our offshore potential and increased supplies from neighbor and ally Canada – we could see 100 percent of our liquid fuel needs met by 2024, a little more than a decade away. Milito:

“We can do it safely. Industry continues to demonstrate a commitment to continuous improvement in operations to make things safer for our personnel, the public and the environment. In the offshore the industry, working closely with government, has enhanced its ability to prevent, contain and respond to a spill.”

Energy development is a long-term process. Limited vision and action sows seeds for the future. Milito:

“The proposed Department of Interior five-year plan is insufficient, and each year we implement it we will fall further behind what we really should be doing. The administration ought to begin working on a new plan immediately.  … Maintaining the status quo won’t work. Existing wells are continually depleting and need to be replaced with new discoveries. It is also important to open new areas for leasing so that industry can use new exploration technologies that will increase production.”

View the original article here

Innovation: Chevron’s ‘i-field’ Links Performance, Savings

USNews.com has a good read on Chevron’s digital investments, which the company says will save up to a billion dollars a year in operating costs in 2016. The linchpin is Chevron’s digital oil field, the “i-field,” which is short for “intelligent field.” USNews explains:

“Chevron's i-field harnesses advanced technology and communications to improve performance at 40 strategic assets throughout the world, including some of its biggest and most productive oil and gas fields. The company is rolling out six to eight mission-control centers focused on separate business areas, ranging from machinery to drilling to wells and reservoirs, that monitor those assets in real-time and rely on sophisticated computer algorithms for early detection of problems. From Chevron's perspective, the i-field is now essential to its global operations, which span six continents.”

Chevron isn’t the only company doing these things (USNews notes that Shell and ConocoPhillips have their own versions), but it is recognized as one of the oil and natural gas industry’s leaders. Basically, to overcome the global and labor-intensive characteristics of oil and gas development, Chevron has digitized a number of its operations. USNews:

“Chevron has deployed thousands of tiny sensors, only millimeters or centimeters in size, that monitor field operations and transmit data, both wired and wirelessly, back to central locations. The sensors instantaneously track pressure, temperature, and other readouts and aid with the mapping of underground fuel deposits, allowing the company to maximize production. Chevron also employs analytics to evaluate data streams in real-time from oil wells, drill rigs, ships, and elsewhere.”

The company has two mission-control facilities in Houston that oversee drilling and machinery support and two others in Lagos, Nigeria, and Covington, La., that monitor deepwater drilling. USNews:

“High above Houston in an office tower, a tech-savvy team at Chevron's machinery support hub monitors thousands of pieces of equipment, in real-time, across every continent except Antarctica. Using software to analyze data transmitted by sensors, it conducts ‘predictive intelligence’ to pinpoint when equipment, such as rotating devices called compressors, needs maintenance ‘so we can change out parts before they break down,’ [Chevron Energy Technology President Paul] Siegele says.”

USNews includes some examples where the technology came into play. The machinery support center sensed that a compressor in one of Chevron’s Asian business units was experiencing valve failure. On-site inspection confirmed the problem and the valve got fixed. Another time, equipment at Chevron’s Sanha oil and natural gas field off the coast of Angola was showing an irregularity, which the team in Houston detected. A repair was made, and the company saved millions of dollars in potential damage and lost production.

Again, Chevron figures it already is saving in the millions of dollars and says that will become billions when the “i-field” and a general operational overhaul are fully implemented in four years. Efficiencies and savings, of course, mean innovating companies, like Chevron, can invest more in energy exploration and development, which is a good thing.

View the original article here

Collaboration, Not Confrontation with EPA

EPA’s big study of the impact of hydraulic fracturing on drinking water is due in 2014, but an interim report might surface as early as the end of the year. Needed is focused, scientifically solid research that that will advance public discussion of shale energy development that has so much potential for our economy and future energy security.

Unfortunately, EPA’s study plan has deficiencies that ultimately could sap the integrity of the study’s findings. That’s one of the conclusions in a new analysis by the Battelle Memorial Institute. Stephanie Meadows, API upstream senior policy advisor, shared some of the study findings in a conference call with reporters:

“Battelle’s analysis of the plan, which we are releasing today, reinforces many of our previously stated concerns and raises some new ones. It finds deficiencies in the rigor, funding, focus and stakeholder inclusiveness of EPA’s plan. … We’re not calling on EPA to stop its study. We’re calling on them to do it right.”

API and America’s Natural Gas Alliance (ANGA) commissioned the Battelle study after EPA declined to engage with industry in a collaborative review of hydraulic fracturing. Battelle’s Bernard Metzger said his broad-based multidisciplinary team of engineers, oil and natural gas experts, toxicologists and others examined EPA’s study plan to determine its soundness. The findings include:

EPA is reaching beyond the relationship between hydraulic fracturing and drinking water resources, which was its charge from Congress, to broader oil and natural gas industry production activities.The expanded scope suggests there will be added complexity, risk, and uncertainty in EPA’s study, raising the level of difficulty in ensuring a scientifically rigorous result.Site data collected from companies comes from the years 2006-2010, making it likely some data in the final 2014 report could be nearly 10 years old. Changes at company sites in the intervening years likely will “render the data obsolete for the purposes of the study.”Case studies were selected from a limited and statistically biased pool and lack necessary baseline information which may result in incorrect and flawed conclusions. The plan suffers from a lack of “significant” industry collaboration, given industry’s extensive experience and expertise in hydraulic fracturing and associated technologies.

Metzger said gaps in EPA’s study planning can impact data quality:

“Quality cannot be built into the back end of a project through rigorous review; it must be built into each step of a scientifically rigorous process to ensure that the end product is high quality data that is defensible and achieves the study goals.”

ANGA’s Amy Farrell:

“We continue to believe a well-designed, scientifically rigorous study of hydraulic fracturing will confirm our industry’s ongoing commitment to safe and responsible development and that communities don’t have to trade the protection of the environment for the many economic, energy security and clean air benefits natural gas offers. We hope (EPA) will not only consider additional efforts to collaborate with the industry and other key stakeholders moving forward, but that they will carefully review the (Battelle) report and consider the critiques and recommendations for improvement and make adjustments as appropriate.”

View the original article here

Innovation: Chevron’s ‘i-field’ Links Performance, Savings

USNews.com has a good read on Chevron’s digital investments, which the company says will save up to a billion dollars a year in operating costs in 2016. The linchpin is Chevron’s digital oil field, the “i-field,” which is short for “intelligent field.” USNews explains:

“Chevron's i-field harnesses advanced technology and communications to improve performance at 40 strategic assets throughout the world, including some of its biggest and most productive oil and gas fields. The company is rolling out six to eight mission-control centers focused on separate business areas, ranging from machinery to drilling to wells and reservoirs, that monitor those assets in real-time and rely on sophisticated computer algorithms for early detection of problems. From Chevron's perspective, the i-field is now essential to its global operations, which span six continents.”

Chevron isn’t the only company doing these things (USNews notes that Shell and ConocoPhillips have their own versions), but it is recognized as one of the oil and natural gas industry’s leaders. Basically, to overcome the global and labor-intensive characteristics of oil and gas development, Chevron has digitized a number of its operations. USNews:

“Chevron has deployed thousands of tiny sensors, only millimeters or centimeters in size, that monitor field operations and transmit data, both wired and wirelessly, back to central locations. The sensors instantaneously track pressure, temperature, and other readouts and aid with the mapping of underground fuel deposits, allowing the company to maximize production. Chevron also employs analytics to evaluate data streams in real-time from oil wells, drill rigs, ships, and elsewhere.”

The company has two mission-control facilities in Houston that oversee drilling and machinery support and two others in Lagos, Nigeria, and Covington, La., that monitor deepwater drilling. USNews:

“High above Houston in an office tower, a tech-savvy team at Chevron's machinery support hub monitors thousands of pieces of equipment, in real-time, across every continent except Antarctica. Using software to analyze data transmitted by sensors, it conducts ‘predictive intelligence’ to pinpoint when equipment, such as rotating devices called compressors, needs maintenance ‘so we can change out parts before they break down,’ [Chevron Energy Technology President Paul] Siegele says.”

USNews includes some examples where the technology came into play. The machinery support center sensed that a compressor in one of Chevron’s Asian business units was experiencing valve failure. On-site inspection confirmed the problem and the valve got fixed. Another time, equipment at Chevron’s Sanha oil and natural gas field off the coast of Angola was showing an irregularity, which the team in Houston detected. A repair was made, and the company saved millions of dollars in potential damage and lost production.

Again, Chevron figures it already is saving in the millions of dollars and says that will become billions when the “i-field” and a general operational overhaul are fully implemented in four years. Efficiencies and savings, of course, mean innovating companies, like Chevron, can invest more in energy exploration and development, which is a good thing.

View the original article here

The New York Times, Shale and Editorial Oblivion

News that New York Gov. Andrew Cuomo has settled on a plan to allow hydraulic fracturing in five counties along the state’s border with Pennsylvania is obviously great news for those counties, many of them starved for the kind of well-paying jobs that come with shale development.

As for New York’s other counties that sit on top of energy-rich shale deposits, Cuomo’s plan raises questions – like this one from Anschutz Exploration’s Tom West, in an interview with Bloomberg:

“As a first step, this may be a way to get past all the hysteria. But if this is a permanent line in the sand, how do you compensate the people on the wrong side of the line?”

Great question. Stay tuned.

Meanwhile, though hardly hysterical, a New York Times editorial on the Cuomo plan is oblivious to some key facts about hydraulic fracturing (following Sunday’s pattern). Which makes you wonder whether the two pieces constitute a kind of passive-aggressive contribution to the news columns’ “war on shale gas.” Thursday’s editorial:

“More than a dozen states have encouraged extensive hydraulic fracturing. But the natural gas industry is poorly regulated, and the environmental risks are real. Reports of air and water pollution elsewhere have raised fear and opposition among many residents who live in New York’s portion of the gas-rich Marcellus Shale formation.”

“Poorly regulated” industry? How about a poorly researched editorial that misses – or worse, leaves out – EPA Administrator Lisa Jackson’s endorsements of the work states are doing to regulate hydraulic fracturing. We’ve practically got Jackson’s words memorized, but for the Times’ benefit (again), here she is last fall:

“We have no data right now that lead us to believe one way or the other that there needs to be specific federal regulation of the fracking process. … So it's not to say that there isn't a federal role, but you can't start to talk about a federal role without acknowledging the very strong state role.”

Here’s Jackson a couple of days later on MSNBC:

“States are stepping up and doing a good job. It doesn’t have to be EPA that regulates the 10,000 wells that might go in.”

Frankly, if there’s fear bubbling up over hydraulic fracturing in New York, if local questions have morphed into opposition, the Times has had a big hand in it with coverage that’s rife with inaccurate reporting and misrepresentations, collected here. And now two editorials that read like some folks just haven’t been paying attention.

View the original article here

American Energy Works: Chris

Chris’ story is one of opportunity – extended and accepted. The oil and natural gas company he works for as a liquid mud coordinator saw work ethic and rewarded it:

“My training is not in energy, engineering or science, but because I was willing to learn, was willing to work, they took me from having no skills to being someone who they’re not afraid to have train the new employees – people who are the future of this company.”

Chris is one of 9.2 million Americans working a job supported by the oil and natural gas industry. Check out his video:

Visit American Energy Works.org for more videos and information about the people who’re at work for America’s energy future.

View the original article here

Made in America: For a Sustainable Energy Future

Access, common-sense regulation and a governmental approach that encourages energy investments: Each one is integral to an American-made, more secure energy future. Getting there will require continued improvements in efficiency and investments in renewable energy – two areas where the oil and natural gas industry has been a leader. This is the fourth recommendation in API’s recent report to the two political parties’ platform committees.

Today, the U.S. uses about half as much energy for every dollar of GDP as it did in 1980, according to the Energy Information Administration:

Efficiency helps energy companies manage costs, which in turn makes them more competitive and allows them to bring more affordable energy products to consumers.  Efficiency also helps reduce greenhouse gas emissions.

Industry is committed to technologies that help the environment, investing $71 billion in developments that reduce greenhouse gas emissions between 2000 and 2010 – far more than the federal government ($43 billion) and nearly as much as the rest of domestic private industry combined ($74 billion).

This is what energy companies do. They produce the oil and natural gas that run our economy now and which will continue to fuel it in the future. They work on efficiencies that will make our energy go further. They look to the future for additional resource options that will be necessary to complete the energy picture.

The question is whether governmental policies will or hinder these efforts. Some think the path to our energy future should be selected by Washington, using the tax code to preordain winners and losers. They think an industry sector that contributed nearly a half-trillion dollars to the economy in 2010, which already sends $86 million a day to the U.S. Treasury, should be taxed more.

The wrongheadedness of this path was detailed in a Wood Mackenzie study last fall, which compared the likely results of pro-energy development policies with policies leading to higher energy taxes:

With a pro-development approach, America’s oil and natural gas companies can add jobs, increase energy supply and generate more tax revenue for government. Higher taxes on our industry will likely lose jobs, decrease tax revenue and result in less energy production.

The United States has tremendous energy resources to support and grow our economy and meet the challenges of the future. With the right vision and leadership we can stride into the future confidently – as befits an energy-rich nation.

View the original article here

Philadelphia Story: Energy From Shale and Jobs

Energy produced from shale deposits by hydraulic fracturing continues to create jobs far from the drill site.  The latest example: Improved economics have allowed for a deal to keep a Philadelphia refinery open, which means 850 workers will keep their jobs – and the facility’s new majority partner says hundreds more could be added if plans to expand production come to pass. Philly.com had the story last week.

Those refinery employees – and the local/regional economy that is supported by the installation, as many as 10,000 indirect jobs by one estimate – can thank the Carlyle Group, and they can also thank the Marcellus Shale. Philly.com:

"Carlyle officials say they are 'reimagining' the business to exploit new, cheaper domestic sources of crude oil to replace expensive imported petroleum, a major reason the refinery was uncompetitive. …  Carlyle, which will have a majority interest in the venture and operate the refinery, also plans to increase dramatically the use of low-priced natural gas from Pennsylvania's booming Marcellus Shale region to reduce refining costs and emissions. 'We believe the changing nature of the energy paradigm in the U.S., coupled with a redefined operating model, can truly benefit this refinery,' Carlyle managing director Rodney S. Cohen said."

The Philadelphia story illustrates what some have been talking about when they laud the game-changing nature of energy from shale. It’s creating jobs (and saving them), reducing costs to manufacturers and helping them create jobs, reinvigorating the chemicals industry and more. It’s abundant and affordable energy that’s also helping out consumers.

We’ve seen the shale energy stimulus rippling through states like North Dakota, Texas and Pennsylvania. Ohio is gearing up for its own economic wave from shale. As for the Philadelphia refinery, studies, analyses and projections about shale energy are to become reality – real jobs, held by real people, saved.

Because of energy from shale.

View the original article here

Philadelphia Story: Energy From Shale and Jobs

Energy produced from shale deposits by hydraulic fracturing continues to create jobs far from the drill site.  The latest example: Improved economics have allowed for a deal to keep a Philadelphia refinery open, which means 850 workers will keep their jobs – and the facility’s new majority partner says hundreds more could be added if plans to expand production come to pass. Philly.com had the story last week.

Those refinery employees – and the local/regional economy that is supported by the installation, as many as 10,000 indirect jobs by one estimate – can thank the Carlyle Group, and they can also thank the Marcellus Shale. Philly.com:

"Carlyle officials say they are 'reimagining' the business to exploit new, cheaper domestic sources of crude oil to replace expensive imported petroleum, a major reason the refinery was uncompetitive. …  Carlyle, which will have a majority interest in the venture and operate the refinery, also plans to increase dramatically the use of low-priced natural gas from Pennsylvania's booming Marcellus Shale region to reduce refining costs and emissions. 'We believe the changing nature of the energy paradigm in the U.S., coupled with a redefined operating model, can truly benefit this refinery,' Carlyle managing director Rodney S. Cohen said."

The Philadelphia story illustrates what some have been talking about when they laud the game-changing nature of energy from shale. It’s creating jobs (and saving them), reducing costs to manufacturers and helping them create jobs, reinvigorating the chemicals industry and more. It’s abundant and affordable energy that’s also helping out consumers.

We’ve seen the shale energy stimulus rippling through states like North Dakota, Texas and Pennsylvania. Ohio is gearing up for its own economic wave from shale. As for the Philadelphia refinery, studies, analyses and projections about shale energy are to become reality – real jobs, held by real people, saved.

Because of energy from shale.

View the original article here

Fix the Renewable Fuels Standard

There was good discussion of the Renewable Fuels Standard (RFS) during a Hill hearing this week. API supports the appropriate use of ethanol, biodiesel and other biofuels in transportation fuels, but, unfortunately, in some ways the standard is bearing out the law of unintended consequences.

API President and CEO Jack Gerard addressed the House energy and power subcommittee, noting that U.S. refiners have primary responsibility for meeting the RFS requirements, blending nearly 15 billion gallons of ethanol in gasoline. But the RFS’ requirements are producing some bad policy, Gerard said:

“EPA has allowed the RFS law’s volume requirements to drive decisions that are inappropriate and unwise.  The law has become increasingly unrealistic, unworkable, and a threat to consumers.  It needs an overhaul, especially with respect to the volume requirements.” 

Gerard detailed ill effects stemming from the RFS’s volume mandates:

E10 “Blend Wall” – 10 percent ethanol content in fuel is safe for U.S. vehicle engines, service station pumps and storage tanks. But under the law, the ethanol volume in the overall fuel supply is required to increase and could exceed 10 percent as early as 2013. That’s the so-called “blend wall.” At that point refiners will have only two options: produce E15 (15 percent ethanol) and flexfuel or E85 – a blend of between 51 percent and 83 percent ethanol by volume that can be used only in flexfuel vehicles, which make up about 5 percent of the U.S. vehicle fleet today. More on E15 below. The problem with E85 is that it has a lower fuel economy than gasoline, and less than 2 percent of retail stations offer it.

E15 – EPA has approved the use of E15 for part of the vehicle fleet to help accommodate increases in the RFS volume requirement. But a recent study showed that E15 could damage engines that weren’t designed to use it, as well as gasoline station pump equipment. The risk can be measured in the billions of dollars. The Auto Alliance weighed in on E15, here. U.S. Rep. James Sensenbrenner shared the concerns of auto makers in a letter to EPA Administrator Lisa Jackson last summer. Gerard:

“EPA should not have proceeded with E15, especially before a thorough evaluation was conducted to assess the full range of short- and long-term impacts of increasing the amount of ethanol in gasoline on the environment, on engine and vehicle performance, and on consumer safety.”

Cellulosic ethanol – A 2007 law requires increasing use of this advanced form of ethanol that theoretically can be made from a broader range of feedstocks. But it isn’t available, because no one is making it commercially. The Competitive Enterprise Institute’s Brian McGraw has more details, here. Even so, EPA continues to assert that aggressive mandates, not based on actual production, will somehow stimulate production. EPA could waive the provision but instead is insisting that refiners buy credits for a non-existent fuel, which will drive up costs and might harm consumers.

RINS – This stands for renewable identification numbers, which are used with renewable fuel credits that some refiners have purchased under a program created by EPA. Some refiners became fraud victims after buying invalid credits in good faith. EPA’s initial response was that the bad credits were the refiners’ problem, and that they’d have to buy more. This adds more costs to making gasoline. Industry currently is trying to work out the problem with EPA.

Again, industry supports renewable fuels. But the RFS as written threatens to become counterproductive. Gerard:

“The RFS law needs to be altered to fix what isn’t working and take into account the ability of the vehicle fleet and fueling infrastructure to safely use renewable blends. Mandates must have periodic technology/feasibility reviews to allow for appropriate adjustments. Biofuels are an important part of the nation’s energy mix.  But current law and how it is implemented have become increasingly problematic.  This could eventually hurt consumers and erode support for the RFS program.”  

The answer is commonsense problem-solving, including positive collaboration between government and industry. While the goals of the RFS are well-intentioned, the marketplace realities are concerning, with potentially negative effects on companies and consumers that should be fixed.

View the original article here

Fix the Renewable Fuels Standard

There was good discussion of the Renewable Fuels Standard (RFS) during a Hill hearing this week. API supports the appropriate use of ethanol, biodiesel and other biofuels in transportation fuels, but, unfortunately, in some ways the standard is bearing out the law of unintended consequences.

API President and CEO Jack Gerard addressed the House energy and power subcommittee, noting that U.S. refiners have primary responsibility for meeting the RFS requirements, blending nearly 15 billion gallons of ethanol in gasoline. But the RFS’ requirements are producing some bad policy, Gerard said:

“EPA has allowed the RFS law’s volume requirements to drive decisions that are inappropriate and unwise.  The law has become increasingly unrealistic, unworkable, and a threat to consumers.  It needs an overhaul, especially with respect to the volume requirements.” 

Gerard detailed ill effects stemming from the RFS’s volume mandates:

E10 “Blend Wall” – 10 percent ethanol content in fuel is safe for U.S. vehicle engines, service station pumps and storage tanks. But under the law, the ethanol volume in the overall fuel supply is required to increase and could exceed 10 percent as early as 2013. That’s the so-called “blend wall.” At that point refiners will have only two options: produce E15 (15 percent ethanol) and flexfuel or E85 – a blend of between 51 percent and 83 percent ethanol by volume that can be used only in flexfuel vehicles, which make up about 5 percent of the U.S. vehicle fleet today. More on E15 below. The problem with E85 is that it has a lower fuel economy than gasoline, and less than 2 percent of retail stations offer it.

E15 – EPA has approved the use of E15 for part of the vehicle fleet to help accommodate increases in the RFS volume requirement. But a recent study showed that E15 could damage engines that weren’t designed to use it, as well as gasoline station pump equipment. The risk can be measured in the billions of dollars. The Auto Alliance weighed in on E15, here. U.S. Rep. James Sensenbrenner shared the concerns of auto makers in a letter to EPA Administrator Lisa Jackson last summer. Gerard:

“EPA should not have proceeded with E15, especially before a thorough evaluation was conducted to assess the full range of short- and long-term impacts of increasing the amount of ethanol in gasoline on the environment, on engine and vehicle performance, and on consumer safety.”

Cellulosic ethanol – A 2007 law requires increasing use of this advanced form of ethanol that theoretically can be made from a broader range of feedstocks. But it isn’t available, because no one is making it commercially. The Competitive Enterprise Institute’s Brian McGraw has more details, here. Even so, EPA continues to assert that aggressive mandates, not based on actual production, will somehow stimulate production. EPA could waive the provision but instead is insisting that refiners buy credits for a non-existent fuel, which will drive up costs and might harm consumers.

RINS – This stands for renewable identification numbers, which are used with renewable fuel credits that some refiners have purchased under a program created by EPA. Some refiners became fraud victims after buying invalid credits in good faith. EPA’s initial response was that the bad credits were the refiners’ problem, and that they’d have to buy more. This adds more costs to making gasoline. Industry currently is trying to work out the problem with EPA.

Again, industry supports renewable fuels. But the RFS as written threatens to become counterproductive. Gerard:

“The RFS law needs to be altered to fix what isn’t working and take into account the ability of the vehicle fleet and fueling infrastructure to safely use renewable blends. Mandates must have periodic technology/feasibility reviews to allow for appropriate adjustments. Biofuels are an important part of the nation’s energy mix.  But current law and how it is implemented have become increasingly problematic.  This could eventually hurt consumers and erode support for the RFS program.”  

The answer is commonsense problem-solving, including positive collaboration between government and industry. While the goals of the RFS are well-intentioned, the marketplace realities are concerning, with potentially negative effects on companies and consumers that should be fixed.

View the original article here

Hailing the Chief’s Support for Natural Gas Development, Fracking

President Obama deserves credit for standing fast in his support for natural gas development through hydraulic fracturing – especially given the no-to-natural gas approach taken by some of his supporters in the environmental community, including the Sierra Club. Here’s the president on Monday in Cincinnati:

“… We’re moving in the right direction in terms of energy independence. Now, part of that is this boom in natural gas.  And this is something we should welcome, because not only are we blessed with incredible natural gas resources that are now accessible because of new technologies, but natural gas actually burns cleaner than some other fossil fuels, and is an ideal fuel -- energy source that we potentially can use for the next 100 years.  So I want to encourage natural gas production.  The key is to make sure that we do it safely and in a way that is environmentally sound.”

The president is spot on – and as a response to a negative question about natural gas, his remarks were all the more remarkable. Because of abundant, affordable gas, made accessible through fracking, the global energy balance could be shifting. The president continued:

“Now, you always hear these arguments that somehow there’s this huge contradiction between the environment and economic development, or the environment and energy production.  And the fact of the matter is that there are a lot of folks right now that are engaging in hydraulic fracking who are doing it safely.”

This also is true. The oil and natural gas industry has focused on making hydraulic fracturing safer and more efficient through a set of standards that guide operators, and it has worked with states to develop regulatory regimes tailored for their specific conditions. The president went on:

“The problem is, is that we haven’t established clear guidelines for how to do it safely, and informed the public so that neighbors know what’s going on, and your family, you can make sure that any industry that’s operating in your area, that they’re being responsible.”

Well, OK. The president is mistaken or misinformed on that point. Industry has been clear and detailed in developing the standards mentioned above. It also has supported FracFocus.org to create transparency about fracking itself – a website community members can use to learn where wells are being drilled in their area, as well as the chemicals being used in the fracking fluids themselves. The industry takes community engagement and support seriously and is committed to getting shale development right.

Back to the president:

“What we’ve said is, look, we are going to work with industry to establish best practices.  We are going to invest in the basic research and science required to make sure this is done safely and in a way that protects the public health.  And for responsible companies, they should be able to operate, make a profit, and we can all benefit and put people back to work."

Best practices, we’re on it, Mr. President. Industry also is supportive of new technologies to improve operations, including those to reduce or even eliminate water use during the fracking process. Shale energy is creating jobs, thousands of them, and boosting the economy.

View the original article here

Innovation: Making Energy Production Cleaner, More Efficient

When we wrote last week about technologies to mitigate water demands during hydraulic fracturing, we knew we’d find more examples of energy innovation for the simple fact that there’s a lot of innovating going on. Here’s a little bit about two other advances in the area of fracking waste water, as well as another company’s initiative to make the development of Canada’s oil sands cleaner and greener.

Halliburton says it has a suite of solutions to reduce the demand for fresh water in hydraulic fracturing operations, called H2-Forward. You can read more about it, here. Basically, it’s a process that allows drillers to reuse fracturing fluid. Halliburton:

"The service includes new technologies such as CleanWave service that is used to process fracturing flowback and produced water, resulting in a clean brine fully suitable for well site operations including drilling, fracturing and completion fluids. … The system, which can treat 20 bbl/minute, uses an electrical process that destabilizes and coagulates suspended colloidal matter in water. Easy scalability enables quickly treating large volumes of water in reserve and flowback pits and, depending on the operation, treating flowback and produced water in real-time during a fracturing operation. The CleanWave system removes up to 99% of total suspended solids, heavy metals, hydrocarbon and bacteria."

Meanwhile, Pennsylvania-based Epiphany Solar Water Systems’ main product is a system that uses solar power to clean fracking waste water. Consol Energy, which is active in the Marcellus Shale area, recently announced it is investing $500,000 in Epiphany and will run a test site for the purification system beginning next month.

Here’s Ephiphany’s description of its technology:

"Dirty water passes into the distillation unit and instantly vaporizes due to the intense heat focused on the distillation unit. During the vaporization process, any dissolved solids … separate, and living organisms (bacteria) are killed due the intense heat. The water vapor (now void or any impurities) continues to pass through the distillation unit. As the steam reaches colder stages it begins to condense back down into distilled water. From the output of the distillation unit then comes freshly distillated water, safe for consumption."

Calgary-based N-Solv Corporation is promoting a technology it says will reduce the amount of energy needed to produce bitumen from oil sands, while reducing greenhouse gas emissions 85 percent without using any water. A $60 million field test in Alberta is scheduled for next April. It uses warm solvents such as propane or butane to melt the bitumen deposits, which the company says is more efficient than using in-situ steam technology. You can read more about it on the company’s website, here.

View the original article here

Video: Refiner Plays Its Role in ND Energy Bonanza

The sights and sounds of energy-driven growth are all over this video, in which Ron Day of Tesoro Corporation talks about how the company’s Bismarck-Mandan oil refinery has grown along with development of North Dakota’s Bakken shale play:

For the benefit of the energy-jobs deniers out there, let’s underscore Day’s description of the multiplier effect associated with a growing energy sector, which is being seen across North Dakota, Pennsylvania, Texas and other energy states:

“We’re hustle and bustle. We’re growing. It’s a great opportunity for North Dakota: from restaurants to car parts stories, to repair shops – they’re definitely being impacted in a positive way (by energy development).”

Even better? America is energy rich, which means the North Dakota “miracle” can be repeated elsewhere – with the right policies and leadership.

View the original article here

Crude Production Rise: Credit Where Credit’s Due

Last week the Energy Information Administration (EIA) told us that U.S. crude oil production in the first quarter of the year topped 6 million barrels per day (bbl/d) for the first time in 14 years. EIA’s chart:

EIA’s analysis:

“Strong growth in U.S. crude oil production since the fourth quarter of 2011 is due mainly to higher output from North Dakota, Texas, and federal leases in the Gulf of Mexico. … After remaining steady between 5.5 million and 5.6 million bbl/d during each of the first three quarters of 2011, EIA estimates that U.S. average quarterly oil production grew to over 5.9 million bbl/d during the fourth quarter and then surpassed 6 million bbl/d during the first quarter of 2012.”

Certainly, great news like that will restart discussion of who deserves credit for such a production milestone – beyond, of course, the energy companies that are actually pulling the oil from the ground or the seafloor. Politico Pro [subscription required] reports White House spokesman Clark Stevens emailed in the administration’s claim for credit:

“Despite misleading rhetoric by some in Washington, President Obama has made expanding responsible oil and gas production here at home a clear priority and the facts speak for themselves. Since the president took office, domestic oil and gas production has increased each year, with oil production in the first quarter of 2012 higher than any time in 14 years and natural gas production at its highest level ever, and that is certainly thanks in part to steps taken by this administration.”

That’s one view. Others disagree. Politico quotes Tom Kloza, chief oil analyst at the Oil Price Information Service:

“In the end, the president and Congress can’t take credit for what price and technology have delivered. It would be akin to taking credit for the iPad. … Unless there is a price collapse, or a true scientific indictment of fracking, one can expect to see plentiful growth in light sweet crude coming from the Rockies, North Dakota, and even Ohio or West Virginia.”

And Richard Newell, the EIA’s head from 2009-2011:

“In a political year, different parties would like to take credit for positive news in the energy sector and I think here the credit largely goes to technology."

And also Amy Myers Jaffe, an energy fellow at Rice University, who notes that North Dakota and Texas shale production has occurred mainly on private land, while increases from the Gulf result from the actions of previous administrations:

“Production rises from Gulf of Mexico would have been in the hopper way before President Obama took office.”

Settling the argument isn’t as important as recognizing that with the right policies the oil and natural gas industry can further develop America’s energy wealth. With the right strategies and leadership, the United States could see 100 percent of its liquid fuel needs met from North American sources. And along with it: jobs and tax revenues for government.

Strategies, policies and action: It’s what separates election-year rhetoric from substantive progress toward a more secure energy future.

View the original article here

Bakken Shale: Supplying Energy, Supporting Communities

Check out a couple of new videos from North Dakota in which Hess employees and others talk about how energy development in the Bakken Shale formation is changing lives and growing the state’s economy.

Part 1:

Part 2:

The narrative isn’t complicated. As Hess’ Steven Fretland notes in the first video, the Bakken is believed to hold between 8 billion and 40 billion barrels of oil reserves. Companies developing the energy resources need workers, and workers need places to live and services to support their lives. Fretland, who was raised in North Dakota, says Bakken energy is reversing historic trends:

“Younger kids, after they left, you know, you hated to see them go but then they come back and they decide … it’s where they’re going to have their home and raise a family and hopefully retire with the industry.”

In the second video, Hess’ Steve McNally says hydraulic fracturing that has revolutionized energy development is responsible for North Dakota’s jobs boom:

“The impact on the North Dakota area and the U.S. in the short term is numerous jobs. There’s a tremendous amount of employment opportunities here. For anyone who wants to work, you can get a job.”

The point, underscored in this new industry spot, is that fracking has made an old frontier state like North Dakota a new energy frontier. Previously unreachable shale resources are now available in abundance through responsible development. Learn more at Energy From Shale.org.

View the original article here

The Offshore Oil and Natural Gas Lease Sale We Need

Tomorrow’s scheduled Central Gulf of Mexico oil and natural gas lease sale in New Orleans will be the first in that area since March 2010. Setting aside for a moment the two-year gap in exploration and development caused by two years without new sales, tomorrow’s auction is important to America’s economic and energy security.

Unfortunately, the two-year gap is real and has real impact. Because it takes seven to 10 years for an offshore lease to start producing oil or natural gas, there’s a gap in the development timeline. It’s like a vintner who skips two years growing grapes; at some point in the wine-producing process there’ll be a lean vintage year. Here’s a chart that shows the stages and time requirements of offshore development:

A couple of other points about tomorrow’s lease sale, underscored by API’s Upstream and Industry Operations Director Erik Milito during a conference call with reporters: While it’s good the Bureau of Ocean Energy Management is holding the sale – which will generate significant industry interest – the areas in the Gulf being offered aren’t new, emphasizing the administration’s restricted approach to developing America’s energy resources. Milito:

“Every lease sale is important, but more important for our energy future than any individual sale is our nation’s broader energy policy framework. That, unfortunately, has been inadequate. The administration’s proposed five-year offshore leasing plan for 2012 through 2017 … would limit offshore development to where it historically has always been – parts of the Gulf of Mexico and offshore Alaska. It would restrict opportunities when it should be expanding them. It would not help prepare us well for our energy future.”

If the energy goal is to reduce oil imports, then tomorrow’s sale reflects a short-sighted vision that will struggle to take us there. Good news: It doesn’t have to be that way. America is energy-rich, with the resources, financial wherewithal and technological know-how to substitute domestic production for much of what we get now from foreign suppliers. It simply takes the right plan, the right approach.

With the right access policies – capitalizing on tight oil and shale gas discoveries, our offshore potential and increased supplies from neighbor and ally Canada – we could see 100 percent of our liquid fuel needs met by 2024, a little more than a decade away. Milito:

“We can do it safely. Industry continues to demonstrate a commitment to continuous improvement in operations to make things safer for our personnel, the public and the environment. In the offshore the industry, working closely with government, has enhanced its ability to prevent, contain and respond to a spill.”

Energy development is a long-term process. Limited vision and action sows seeds for the future. Milito:

“The proposed Department of Interior five-year plan is insufficient, and each year we implement it we will fall further behind what we really should be doing. The administration ought to begin working on a new plan immediately.  … Maintaining the status quo won’t work. Existing wells are continually depleting and need to be replaced with new discoveries. It is also important to open new areas for leasing so that industry can use new exploration technologies that will increase production.”

View the original article here

Lights, Cameras…Fracking!

Great time Thursday night at the grand, lovely Warner Theater in Washington, D.C., for API’s “Big Screen Energy” event, featuring film trailers from pro-energy documentaries on hydraulic fracturing including “Truthland,” “Empire State Divide” and “Frack Nation.” After the trailers, representatives of the films talked about their projects and answered questions from the audience. Some important points that emerged:

#1: Shale Energy = Economic opportunity

For lots of people in the Marcellus Shale portions of Pennsylvania, energy from fracking is helping them alter the courses of their lives. And it could help even more if New York state approves hydraulic fracturing on some scale. “Empire State Divide’s” Karen Moreau said New York agriculture needs working capital to survive. Energy development from that state’s portion of the Marcellus could supply that, keep farms operating and allow them to be handed off to the next generation, said Moreau, who since making her film was named executive director of the New York State Petroleum Council.

#2: Countering Frack Fiction

“Truthland,” featuring Pennsylvania science teacher and mom Shelly Depue, spends much of its 34 minutes dispelling misinformation about hydraulic fracturing and natural gas development. The film is a step toward centering the national fracking debate on science and fact instead of fear and misrepresentation. “Frack Nation’s” Phelim McAleer said some opponents aren’t interested in responsible development; they want to block natural gas altogether.

#3: The Right to Prosper

Moreau said the divide in New York over fracking is actually a property rights test – whether individuals may develop resources on their land. She said some opponents of natural gas development in New York’s southern tier, the counties in the Marcellus along the Pennsylvania border, aren’t residents of those areas. Still, they are trying to control or block development. The contest is still playing out, as state officials weigh how much development, if any, to allow.

Again, the evening provided an interesting perspective on an important public policy issue. At the center of it is a truth, noted by McAleer: the ability of energy to lift lives, to lift standards of living. McAleer said the lack of affordable, reliable energy usually characterizes areas that are impoverished and unhealthy – places where people have little chance to lift themselves. Energy changes that, he said.

In energy from shale, the United States has an historic opportunity to be more prosperous – with abundant fuel for the lifestyles of its citizens and the power to revitalize critical industries like manufacturing and chemicals. The U.S. also can make its future more secure, less dependent on imports. Industry’s role is to develop these resources safely and responsibly. It is doing this while striving to continually improve technologies and performance.

View the original article here

Made in America: For a Sustainable Energy Future

Access, common-sense regulation and a governmental approach that encourages energy investments: Each one is integral to an American-made, more secure energy future. Getting there will require continued improvements in efficiency and investments in renewable energy – two areas where the oil and natural gas industry has been a leader. This is the fourth recommendation in API’s recent report to the two political parties’ platform committees.

Today, the U.S. uses about half as much energy for every dollar of GDP as it did in 1980, according to the Energy Information Administration:

Efficiency helps energy companies manage costs, which in turn makes them more competitive and allows them to bring more affordable energy products to consumers.  Efficiency also helps reduce greenhouse gas emissions.

Industry is committed to technologies that help the environment, investing $71 billion in developments that reduce greenhouse gas emissions between 2000 and 2010 – far more than the federal government ($43 billion) and nearly as much as the rest of domestic private industry combined ($74 billion).

This is what energy companies do. They produce the oil and natural gas that run our economy now and which will continue to fuel it in the future. They work on efficiencies that will make our energy go further. They look to the future for additional resource options that will be necessary to complete the energy picture.

The question is whether governmental policies will or hinder these efforts. Some think the path to our energy future should be selected by Washington, using the tax code to preordain winners and losers. They think an industry sector that contributed nearly a half-trillion dollars to the economy in 2010, which already sends $86 million a day to the U.S. Treasury, should be taxed more.

The wrongheadedness of this path was detailed in a Wood Mackenzie study last fall, which compared the likely results of pro-energy development policies with policies leading to higher energy taxes:

With a pro-development approach, America’s oil and natural gas companies can add jobs, increase energy supply and generate more tax revenue for government. Higher taxes on our industry will likely lose jobs, decrease tax revenue and result in less energy production.

The United States has tremendous energy resources to support and grow our economy and meet the challenges of the future. With the right vision and leadership we can stride into the future confidently – as befits an energy-rich nation.

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Another Study ‘Showing’ No Contamination from Fracking

Where to begin in a review of Pro Publica’s article on new research into the migration of subterranean brine to shallow water above? The inflammatory, overreaching headline? The leap from Duke University’s study to conclusions suggesting to the public that hydraulic fracturing is polluting drinking water?

Let’s start there. On that point the article is self-rebutting. See the fourth paragraph:

"No drilling chemicals were detected in the (shallow) water, and there was no correlation between where the natural brine was detected and where drilling takes place."

Then, near the end of the article:

"Nevertheless, (Robert) Jackson, one of the study's authors, said he still considers it unlikely that frack fluids and injected man-made waste are migrating into drinking water supplies. If that were happening, those contaminants would be more likely to appear in his groundwater samples, he said. His group is continuing its research into how the natural brine might have travelled, and how long it took to rise to the surface. 'There is a real time uncertainty,' he said. 'We don't know if this happens over a couple of years, or over millennia.'"

As for the study itself, Jackson and his team say they found that naturally occurring brine migrates upward to shallower depths. They say the risk of the migration could be greater in areas that have undergone hydraulic fracturing. Yet, there’s this from the study’s introductory summary:

“The occurrences of saline water do not correlate with the location of shale-gas wells and are consistent with reported data before rapid shale-gas development in the region …”

Energy In Depth has solid analysis on the study, here. Highlights:

The study fails (as Jackson notes above) to establish whether the migration occurs over 10 years or 10 million years. Without that, it’s impossible to determine whether the phenomenon is cause for concern.If brine is traveling up from thousands of feet below the surface, why haven’t the pathways Duke’s researchers identify allowed natural gas in the Marcellus region to leak out and disappear over time?There’s no discussion of whether the Marcellus Shale – which is largely a dry region with “virtually no free water,” according to Penn State’s Terry Engelder – even contains enough brinewater to leak.

Engelder, a Marcellus expert who was asked by the researchers to review their work, notes a number of questions the study leaves unanswered, reducing its usefulness. He writes:

"My review is predicated on the objective of your paper which is stated as a search for '...specific areas of shale-gas development in northeastern Pennsylvania that are at increased risk for contamination of shallow drinking water resources with deeper formation brines...' (the last sentence of your abstract). The term, risk, suggests that your paper veers from a conventional geology paper and enters into the realm of science-based advocacy or if you like, science policy."

Engelder is on target there. Unfortunately, the academics, wittingly or unwittingly, produced a study that is easily morphed into a siren call by opponents of natural gas production. Pro Publica’s article is Exhibit A. Exhibit B is a Bloomberg News story under this headline: “Pennsylvania Fracking Can Put Water at Risk, Study Finds” – despite the fact the study found no evidence of such a risk.

Words like “can,” “may” and “might” camouflage the point that the study didn’t find a correlation between the location of shale-gas wells and occurrences of saline water. To suggest otherwise in a news article is disingenuous and counterproductive in the national discussion of energy from shale.

As Engelder notes, the study is a platform from which advocates can mislead. On this story, The Associated Press got it right, focusing its report on what the study showed: “Gas drilling in northeastern Pennsylvania did not contaminate nearby drinking water wells with salty water, which is a byproduct of the drilling.”

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Welcome to Williston, Welcome to Prosperity

Perhaps only The New York Times could reduce the energy/economic miracle of North Dakota’s oil and natural gas bonanza to something akin to a toothache. Columnist Gail Collins ventures forth from the concrete canyons of Manhattan to discover the hubbub on the high plains and doesn’t avoid raising a skeptical eyebrow.

To her credit, Collins was able to confirm what lots of people already know: Oil and natural gas extracted from the Bakken Shale formation through hydraulic fracturing is practically evaporating unemployment in North Dakota , which has a jobless rate considerably lower than New York:

Collins writes:

"If you did come, however, you would feel really, really wanted. Radio ads urged me to embark on a new career as a bank teller, laborer, railroad conductor or cake decorator. The local Walmart has a big sign up, begging passers-by to consider starting their lives anew in retail sales. The Bakken Region Recruiter lists openings in truck driving, winch operating and canal maintenance work, along with ads for a floral designer, bartender, public defender, loan officer, addiction counselor and sports reporter. All in an area where the big city has a population of around 16,000."

In other words, if you want to work it’s almost guaranteed you can land a job. But there’s a “but.” Collins describes the Bakken boom as filled with traffic, dust, man camps, bursting schools, long lines (as though waiting 30 minutes for a Big Mac is too much to pay for May’s 2.7 percent state unemployment rate) – while suggesting the most ambitious eatery in town probably wouldn’t impress many folks on the Upper West Side.

It’s true that strong economic growth creates many demands, and, as North Dakotan Rob Port regularly notes on his Say Anything Blog, state and local officials and support businesses need to do a better job seizing the opportunities. But Collins loses us – and perhaps credibility – describing the fracking used to extract oil and natural gas as “environmentally suspect.”

Suspect? Not to EPA Administrator Lisa Jackson, talking April 27 to Fox News:

“In no case have we made a definitive determination that the fracking process has caused chemical contamination of groundwater.”

…basically repeating what she told Congress in May 2011:

“I’m not aware of any proven case where the fracking process itself has affected water.”

Collins may have turned in her piece before this came in, but on Wednesday the EPA removed suspicions surrounding hydraulic fracturing and well water in Dimock, Pa. – ground zero for those who claim fracking fouls drinking water. Regional Administrator Shawn M. Garvin:

“The sampling and an evaluation of the particular circumstances at each home did not indicate levels of contaminants that would give EPA reason to take further action. Throughout EPA's work in Dimock, the Agency has used the best available scientific data to provide clarity to Dimock residents and address their concerns about the safety of their drinking water.”

(Also see Kenneth P. Green’s blog post on the Dimock announcement over at AEI, here.)

Earthquakes and fracking? David J. Hayes, Interior Department deputy secretary, in April:

“We also find that there is no evidence to suggest that hydraulic fracturing itself is the cause of the increased rate of earthquakes.”

Bottom line: Collins may have environmental suspicions about shale energy and fracking, but a number of people paid to pay attention to such things don’t share them.

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Lights, Cameras…Fracking!

Great time Thursday night at the grand, lovely Warner Theater in Washington, D.C., for API’s “Big Screen Energy” event, featuring film trailers from pro-energy documentaries on hydraulic fracturing including “Truthland,” “Empire State Divide” and “Frack Nation.” After the trailers, representatives of the films talked about their projects and answered questions from the audience. Some important points that emerged:

#1: Shale Energy = Economic opportunity

For lots of people in the Marcellus Shale portions of Pennsylvania, energy from fracking is helping them alter the courses of their lives. And it could help even more if New York state approves hydraulic fracturing on some scale. “Empire State Divide’s” Karen Moreau said New York agriculture needs working capital to survive. Energy development from that state’s portion of the Marcellus could supply that, keep farms operating and allow them to be handed off to the next generation, said Moreau, who since making her film was named executive director of the New York State Petroleum Council.

#2: Countering Frack Fiction

“Truthland,” featuring Pennsylvania science teacher and mom Shelly Depue, spends much of its 34 minutes dispelling misinformation about hydraulic fracturing and natural gas development. The film is a step toward centering the national fracking debate on science and fact instead of fear and misrepresentation. “Frack Nation’s” Phelim McAleer said some opponents aren’t interested in responsible development; they want to block natural gas altogether.

#3: The Right to Prosper

Moreau said the divide in New York over fracking is actually a property rights test – whether individuals may develop resources on their land. She said some opponents of natural gas development in New York’s southern tier, the counties in the Marcellus along the Pennsylvania border, aren’t residents of those areas. Still, they are trying to control or block development. The contest is still playing out, as state officials weigh how much development, if any, to allow.

Again, the evening provided an interesting perspective on an important public policy issue. At the center of it is a truth, noted by McAleer: the ability of energy to lift lives, to lift standards of living. McAleer said the lack of affordable, reliable energy usually characterizes areas that are impoverished and unhealthy – places where people have little chance to lift themselves. Energy changes that, he said.

In energy from shale, the United States has an historic opportunity to be more prosperous – with abundant fuel for the lifestyles of its citizens and the power to revitalize critical industries like manufacturing and chemicals. The U.S. also can make its future more secure, less dependent on imports. Industry’s role is to develop these resources safely and responsibly. It is doing this while striving to continually improve technologies and performance.

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Shale Gas and a Refining Revival

NPR/State Impact Texas reports on the economic growth that’s being generated by Gulf Coast refineries revitalized with the help of affordable natural gas produced through hydraulic fracturing. It’s a good-news story:

"Along the Texas Gulf coast in cities where the skylines are formed by the stacks of refineries, they’re talking about a perfect storm headed their way. But this storm has nothing to do with the tropics and everything to do with natural gas. 'It’s almost a perfect storm of low energy costs, low financing costs, low construction costs,' said Bob Leiper, the city manager of Baytown."

Here’s what that “perfect storm” looks like:

Exxon Mobil’s announced plan to expand its refinery/petrochemicals complex with construction of an ethane cracker.Shell and Saudi Aramco’s newly expanded Motiva refinery in Port Arthur, which opened last month after a $10 billion upgrade.Chevron Phillips Chemical’s plan to spend $5 billion on its Baytown petrochemical plant.Seven thousand to 15,000 high-paying construction jobs, which Leiper says will produce a positive ripple across Baytown’s housing and retail sectors.

At the heart of it, NPR says, is surging natural gas production via fracking:

"Hydraulic fracturing has dramatically increased the amount of gas extracted from shale plays around Texas and nearby states with much of it sent in pipelines that come right through Baytown. The cheap gas can be used in a variety of processes to make petrochemicals and plastics and make them more cheaply than competitors overseas. 'This has led to a rebirth of the U.S. petrochemical industry,' said A.J. Teague, COO of Enterprise Products which last month announced its plans to build what it said would be one of the world’s biggest facilities to process 'natural gas liquids' into propylene which is used in plastics."

According to NPR, Texas has spent more than $11 million in state economic development funds on companies to encourage expansion of plants or offices over the past few years. In terms of jobs, the oil and natural gas industry has proven to be a sound investment:

"When a watchdog group, Texans for Public Justice, analyzed whether the public money actually promoted new jobs, it found the companies delivered largely as promised, especially compared to other industries. 'I don’t recall much criticism of oil and gas,' said Craig McDonald, the group’s executive director."

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Cooking With Gas–And Loathing It?

The intersection of a recent anti-natural gas fundraiser at the trendy Brooklyn Winery – featuring fabulous culinary delights prepared by a group of talented chefs – and the natural gas that made the evening possible was, well, simply mouth-watering.

New York Daily News columnist Bill Hammond writes that the “Taste of the Marcellus” event last week was hosted by a group called Chefs for the Marcellus, to showcase the kinds of foods they say could be jeopardized if New York Gov. Andrew Cuomo OKs hydraulic fracturing in that state’s portion of the Marcellus Shale. Hammond:

"Guests were treated to eggplant-stuffed okra, smoked lamb belly with fermented tofu and whipped ricotta jewel on toast — along with wines from the Finger Lakes and beers from Cooperstown’s Ommegang brewery. The only thing more delicious than the menu was the irony, because many if not most of those dishes were cooked over the bright blue flame of natural gas. That’s right, the Chefs for the Marcellus saw nothing wrong with using the very same fuel they portray as a dire threat to the upstate countryside."

He writes that even stuff that wasn’t simmered or seared over a gas flame was chilled in refrigerators running on electricity, much of which no doubt was generated at natural gas-fired power plants. Same thing for the restaurant AC that kept the guests comfortable. Every cubic foot of gas used, he notes, came from a hole in the ground – a quarter of it (based on national averages) from the same hydraulic fracturing process the group opposes.

Then there’s this quote Hammond got from Chefs for the Marcellus organizer Hilary Baum – as tantalizing as the sungold tomato gazpacho with smoked trout that was part of the featured fare:

“We all cook with gas. We all use gas. But we have to be looking at developing alternative energy sources and not be so stuck on fossil fuels.”

To ice the cake, Hammond quotes the Manhattan Institute’s Robert Bryce:

“It’s easy to demonize the oil and gas industry. But getting along without the fuels they provide takes us back to the Stone Age.”

Amen. Pass the trout.

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