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Monday, November 4, 2013

rj sigmund on fracking, November 2013

from rjsigmund, November 3, 2013

i had previously written about fracking injection well earthquakes in oklahoma, but was unaware that they were ongoing until i serendipitously stumbled on a headline about 4 quakes occurring yesterday; here's a story on that:

Oklahoma Earthquake Today 2013 Strikes Oklahoma City, Edmond: – An Oklahoma earthquake today 2013 has struck Oklahoma City, Edmond and Choctaw. Multiple Oklahoma earthquakes today November 2, 2013 have struck in the predawn morning hours. Damage assessment is pending. Officials tell news that a 3.7 magnitude Oklahoma earthquake today began just after 4:36 AM local time. The quake posted a nominal depth. USGS indicates to news that the quake was only three miles below the earth’s surface. As a result the quake could be felt across the immediate region. Officials also indicate to news that a 2.7 magnitude Oklahoma earthquake started thereafter just after 7:04 AM local time. The quake had virtually the same epicenter. It started roughly three miles below the earth’s surface.  USGS indicates to news that the Oklahoma earthquakes have struck roughly five miles northwest of Jones. They were about seven miles east of Edmond and nine miles west of Choctaw. They bean eleven miles northwest of Midwest City and thirteen miles northeast of Oklahoma City.The same region has been producing a series of quakes in recent months. In June another quake began at the same epicenter. That Oklahoma earthquake began one mile south of Jones, two miles northwest of Choctaw, and nine miles northeast of Midwest City. Officials also told news at the time that the quake was fourteen miles east of Oklahoma City and eleven miles northeast of Del City.
in looking for more news about that, i ran into a post that has very complete documentation of a similar quake in the same area last month, with satellite photos of well sites with earthquake epicenters imposed on those google maps...you can even clearly see equipment on a well pad in one closeup...& he even forecasts additional quakes...this has to be the best photo-documentation of the fracking/quake connection i've seen yet...
next, here's excerpts from a long article on McClendon's activity in Ohio:

Business: Former Chesapeake CEO McClendon returns to the game in Ohio's Utica Shale -- Monday, October 28, 2013 -- www.eenews.net: Aubrey McClendon is buying oil and gas acreage in Ohio and may have found a position in the most productive portion of the Utica Shale field, six months after being forced out as CEO of Chesapeake Energy Corp. McClendon's new company, American Energy Partners LP, has bought acreage in three counties in southeast Ohio, according to analysts and public documents. That puts him in the same part of the field as GulfPort Energy Corp. and Anadarko Petroleum Corp., which have reported promising results from wells in the Utica this year. 
[...] 
The company will drill its first wells later this year and plans to run 12 drilling rigs, according to a news release. There are challenges, though. Until now, the anticipated Ohio shale gas boom has been stuck in neutral, awaiting the completion of a entire network of new infrastructure to gather and isolate ethane and other natural gas liquids (NGL) components, and completion of long-distance pipeline links to move products to petrochemical plants and export terminals. Led by MarkWest Energy Partners, companies have committed more than $6 billion in NGL gathering and processing plants in Ohio and West Virginia to complete the infrastructure buildout. But even with this surge of activity, analysts have predicted that Utica NGL production would outpace existing and announced pipeline and processing capacity through 2017 or 2018. A Wells Fargo Securities report last May projected total potential supply of 903,000 barrels per day in 2017, but takeaway capacity of 652,000 barrels daily, requiring even more investment. Since that report, MarkWest Energy Partners and EMG have announced plans for a joint venture with Kinder Morgan Energy Partners to build new a gas liquids fractionization plant and a new pipeline from the Utica Shale to the Gulf Coast.
 [...] 
The next chapter of McClendon's Utica story is also clouded by the price he and his partners have had to pay for prime "wet" acreage in southeast Ohio. "Acquiring [Utica] acreage is a challenge right now, particularly if you're in the fairway," said Thomas Stewart, executive director of the Ohio Oil and Gas Association. "The only way to acquire acreage there is to go buy it. They got their acreage through the checkbook," Stewart said of lease acquisitions by McClendon's American Energy Partners. Most of the land in eastern Ohio was broken up into small farms, and the ownership has become even more fragmented during Ohio's 150 years of oil production, said Jerry James, a former president of the Ohio Oil and Gas Association who runs Artex Oil. That makes it hard to assemble the large blocks of land needed for a modern horizontal well.  

then, the rest of the news:

Energy Boom Puts Wells in America's Backyards - Across the U.S., new oil and gas wells have turned millions of people into the petroleum industry's neighbors. For many, the oil and gas companies are welcome newcomers bearing checks. Others consider the new arrivals loud, smelly and disruptive. The drilling boom is firing up resentment in some communities when one person's financial windfall means their neighbors abut a working well. The Wall Street Journal analyzed well location and census data for more than 700 counties in 11 major energy-producing states. At least 15.3 million Americans lived within a mile of a well that has been drilled since 2000. That is more people than live in Michigan or New York City. The arrival of the Oil Patch in the nation's backyards is a result of an extraordinary U.S. energy boom driven largely by hydraulic fracturing, or fracking, a practice that makes it possible to tap into dense, previously impenetrable shale formations to extract fossil fuels. Fracking enabled the drilling of the Niobrara Shale in Colorado, as well as the Marcellus Shale in Pennsylvania, the Barnett Shale in Texas and others. Nationwide some 23 counties, with more than four million residents, each had more than three new wells per square mile, according to the 2010 Census and well-location information from DrillingInfo, a data provider to the oil industry. Comparisons to well density in earlier eras is difficult, due to incomplete records from a century's worth of drilling.

New York Shale Play Gets Major Downgrade -- The real reason New York State has not allowed high-volume hydrofracking for natural gas in its Marcellus shale is that there is almost no gas that can be economically extracted, according to four retired professionals turned fracking analysts. Their argument contradicts the gas industry’s narrative – widely accepted as fact by many landowners, investors, politicians and state regulators – that shale gas is a potential economic “game-changer” for poor, rural upstate New York. For the past four years, two governors have repeatedly extended the state’s de facto moratorium on fracking while they tinkered with the rules. Since last fall, Gov. Andrew Cuomo has said he is waiting for the results of a vaguely defined health study, frustrating pro-gas groups with his apparent lack of urgency. But the four analysts now argue that it’s geology – not health – that best explains Cuomo’s foot-dragging. In the governor’s cost-benefit analysis, they say, meager potential economic gains from drilling are not worth the environmental and political risk. “The vast majority of the New York Marcellus shale is too thin (less than 150 feet thick) and too shallow (less than 4,500 feet) to yield economically recoverable natural gas,”

Will Utica, Marcellus remain non-starters in Empire State? New theory holds geology, not politics, thwarts NY fracking -- A collection of factors stalled the Pennsylvania shale gas rush at the New York state border, including grass roots opposition, a market glut, the threat of local bans and --  above all -- the state’s reluctance to complete permitting guidelines without more information about health impacts. That, at least, is the familiar version of the story recounted through the popular press. But a group of activists – some uniquely qualified – are building an argument that something more profound and fundamental is at work: A lack of gas.  “Simply put, we now know that the Marcellus is likely only marginally productive in a few townships by the border - and may not be economic there until after 2020,” said Chip Northrup. “The Utica may not be here at all - or in a few pockets.”   The argument isn’t really about whether there is gas under New York – geologists agree that multiple gas-bearing formations, conventional and otherwise, lie beneath upstate’s countryside from the Catskills to the Allegany region. It’s a question of whether the broad mantels of Devonian shale, which hold prospects of drilling, fracking, and infrastructure development on an unprecedented scale, are economically viable under current or future market conditions.

U.S., Canada Lead World in Shale Gas Production - According to the "Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States" analysis prepared by Advanced Resources International for the EIA, in comparison with 2011 figures, 41 countries were now assessed to have recoverable shale gas reserves, up from 32 two years ago. The number of basins with recoverable shale reserves increased from 41 in 2011 to 48 in 2013, and the number of formations containing shale gas nearly doubled in the same time period, from 69 in 2011 to 137 in 2013. Worldwide, estimates of “technically recoverable resources” of shale gas also increased, from 6,622 trillion cubic feet in 2011 to 7,299 tcf two years later. Shale/”tight oil” estimates also rose, more than 1,000 percent, from 32 billion barrels in 2011 to an impressive 345 bb. The report’s most arresting statistic is that in only two years, estimates of U.S. potential shale gas reserves soared by nearly 50 percent. “The shale gas resources assessed in this report, combined with EIA's prior estimate of U.S. shale gas resources, add approximately 47 percent to the 15,583 trillion cubic feet of proved and unproven non-shale technically recoverable natural gas resources. Globally, 32 percent of the total estimated natural gas resources are in shale formations, while 10 percent of estimated oil resources are in shale or tight formations.”

When will the Shale Bubble Burst?: Most of us are aware by now that the introduction of widespread hydraulic fracturing into the oil and gas business has resulted in a rapid growth in U.S. production. U.S. crude output is up by nearly 2.5 million barrels a day (b/d) since mid-2007 and natural gas production is up by 25 percent. The key question of course is how long production will continue to grow before it inevitably declines. Optimists maintain that we have just scratched the surface of our shale oil reserves and that production will continue increasing for years, if not decades. Realists are not so sure, noting that not only is fracked oil very expensive, requiring circa $80 a barrel to cover the costs of extraction, but that production from fracked oil wells drops off quickly so that new wells have to be drilled constantly to maintain production. Until recently information about just how fast our fracked oil wells were depleting was rather hard to come by, so that the hype about the US becoming energy independent and a major oil exporter became conventional wisdom for most...There are two key questions which will determine how much longer these shale oil plays will continue growing. One is: How many economically viable sites are left to drill? The other is: How long it will it be before production from the 10,000 or so wells already pumping in the Bakken will fall to the place where the 150 or so new wells coming into production each month will not be enough to keep total production growing? While not making a forecast as to when production will peak in the shale fields, the EIA, however, does make a projection as to what will happen in November 2013--not a particularly bold prediction but at least it is something. According to the EIA report, what it terms the decline in “legacy oil production” (i.e. those wells that have been producing for more than a month) for the Bakken field is now at 60,000. The Texas’s Eagle Ford field’s production is now declining at 80,000 b/d and the no longer growing Permian Field is declining at 34,000 b/d.

Koch Pipeline Spills 400 Barrels Of Crude Oil In Texas - 17,000 gallons of crude oil spilled from an eight-inch pipeline owned by Koch Pipeline Company on Tuesday, the Railroad Commission of Texas reported Wednesday. The spill impacted a rural area and two livestock ponds near Smithville and was discovered on a routine aerial inspection, according to the Austin American-Statesman. Details are scarce regarding the cause of the spill and cleanup measures underway but, as UPI reported, “Koch Pipeline Co. said it notified the appropriate federal and state regulators but had no estimated time for repairs. Neither Koch nor the Texas Railroad Commission had a public statement about the incident.” Koch Industries has also come under fire recently for dumping petroleum coke, a byproduct of tar sands refining, along riverfronts in both Detroit and Chicago. The crude oil spill is the latest in a string of pipeline incidents that have occurred in multiple U.S. states as oil companies ramp up production and find themselves scrambling to ship their product to refineries. Earlier this month, a pipeline that spewed over 20,000 barrels of crude oil into a North Dakota wheat field and went unreported for 11 days until it was discovered by a farmer harvesting his wheat. A subsequent Associated Press investigation found nearly 300 oil spills and 750 “oil field incidents” have gone unreported in the state since January 2012 alone.

Nearly 300 Oil Spills Went Unreported In North Dakota In Less Than Two Years - Nearly 300 oil spills and 750 “oil field incidents” have occurred in North Dakota since January 2012 and none were reported to the public, according to a report released Friday by the Associated Press.  The investigation was spurred by a pipeline that spewed over 20,000 barrels of crude oil into a North Dakota wheat field earlier this month and went unreported for 11 days until it was discovered by a farmer harvesting his wheat.  In the wake of the report, the state’s Health Department announced it is testing a website to disseminate information about oil spills to the public but the AP notes that in the nation’s second-largest oil producing state, that only addresses part of the problem.  North Dakota regulators, like in many other oil-producing states, are not obliged to tell the public about oil spills under state law. But in a state that’s producing a million barrels a day and saw nearly 2,500 miles of new pipelines last year, many believe the risk of spills will increase, posing a bigger threat to farmland and water. Rapidly increasing production from oil and gas fields in Canada and several U.S. states is putting increasing pressure on the industry to expand its network of pipelines that transport the product to refineries. In the wake of this unprecedented expansion, spill detection and reporting are just two of many concerns.

Is Nobody Watching Oil Pipeline Safety in the United States? - North Dakota's governor said he was frustrated with the way in which federal regulators were monitoring pipeline safety. An oil spill in the west of the state went unnoticed until a farmer discovered it in his field last month. Regulators, the governor said, don't monitor rural areas the same way they do elsewhere. On Capitol Hill, meanwhile, supporters of a controversial pipeline bill say more infrastructure is needed and fast in order to keep up with the oil boom under way in the central United States. That measure, however, does little to allay the safety concerns about the spider web of oil and natural gas pipelines already in place across the country. "[The federal] Pipeline and Hazardous Materials Safety Administration requires the use of enhanced pipeline monitoring and control technology in locations considered 'high consequence areas' such as cities and near drinking water supplies," North Dakota Gov. Jack Dalrymple said. "Rural areas don’t necessarily get the same level of oversight from PHMSA and that is concerning."

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