Blog Archive

Sunday, August 31, 2014

rjs: Worldwide oil and fracking news, August 30, 2014: 243 cases of fracking contaminating wells in Pennsylvania

It's been a pretty slow week in the gas & oil patch, which I guess means there was no really bad news...there wasn't a major spill or a fracking related story that generated national news coverage, nor was there an Ohio story of note...if any story could be considered breaking news, it was that under Freedom of Information Act lawsuits, Pennsylvania finally made public their records of 243 cases of drinking water wells contaminated by fracking operations, including contamination from both methane and frack water flowback...we all knew this was happening, now there's a state agency on record verifying it... here's that:

There was a ruling by the International Trade Commission this week that Korea, Taiwan, India and other steelmakers have been dumping cheap tubular steel on the US markets at below costs, and hence will have anti-dumping fines of up to 15.75% imposed on their products entering the country....the implications of this for the fracking patch is that the drillers may switch to domestically produced well casings and pipe, which in any case will be more expensive...with oil prices continuing to hit multi-month lows, the margins on even oil drilling are getting a result, expansion in the oil patch has become less robust, and this past week the national rig count was down 17 to it appears that anything that adds to their costs at these price levels will slow drilling in the highest marginal cost areas, which would include our part of Ohio..

I normally don't cover politics, but I couldn't help but notice some of the widespread coverage on the New York governor's race, where anti-fracking & Occupy activist Zephyr Teachout is challenging Andrew Cuomo in the Democratic primary...normally you'd think such a candidacy to be on the fringe and not get much traction, but Cuomo's efforts to have her taken off the ballot have attracted the attention of the New York Times, who penned an editorial, “a Teachout moment,” encouraging him to debate her...while they've not endorsed her or Cuomo for governor, they have endorsed her running mate, Timothy Wu, for Lieutenant Governor...thus with the powerful NY Times leaning against the establishment candidates for state office, the NY primary could be interesting and bears watching, for those of you who are into that kind of participation...

So, with nothing else to note, here's the fracking & related articles from this past week...

What the Anti-Fracking Movement Brings to the Climate Movement -- These are my prepared remarks for a speech I gave at the Boston stop of the People’s Climate March - Hi, everyone. My name is Sandra Steingraber, and I inhabit the anti-fracking wing of the climate movement. Only a few years ago, that sentence would have sounded strange, even to me, because the fight against fracking has its roots in another place. Those who oppose natural gas extraction via fracking first came together because we didn’t want to be poisoned. In  New York state, we sought to halt fracking before it started because of what we saw across the border in the gaslands of Pennsylvania: families with nose bleeds and rashes. Sick pets. Horses and livestock with mysterious ailments. Devastated landscapes. We had concerns about exploding pipelines, leaking waste pits and about our children’s school buses sharing icy roads with tanker trucks hauling toxic fracking fluid.  Most of all, we came together to protect our drinking water, and, now that the science is beginning catch up to the speed at which fracking is rolling across the nation, an ever-expanding collection of empirical data shows that our concerns were well founded.  But a funny thing happened on the way to the shale gas boom. It turns out that the same unfixable engineering problem that sets the table for contaminating our water also contaminates the atmosphere with climate-killing methane.

Winds of Change: The Zephyr Turns Primary into Plebiscite on Fracking  -- Zephyr Teachout has turned the New York gubernatorial primary into a plebiscite on fracking, on reform in Albany, on campaign finance, and clean jobs in New York. Pretty much all the things that matter. Unless you’re a lobbyist.  Why is Zephyr the safe bet in the September 9th primary ?  She’s the positive candidate that represents real change and the most opportunity for New York. And because she’s the candidate least likely to be indicted by the feds.  It’s official: The New York Times says we’re having “a Teachout moment,” by which the paper’s editorial board means it’s time for Gov. Andrew Cuomo to stop trying to knock progressive challenger Zephyr Teachout off the ballot and to debate her instead. It’s a play on “teachable moment,” and it makes you wonder what’s intended to be taught.  Does the paper believe Cuomo should be taught a political lesson in the wake of the Moreland Commission scandal, after a scorching Times report revealed he’s being investigated for meddling in and protecting allies from the anti-corruption probe? Or does the Times think that Cuomo should learn that he can afford to play nice, for a moment, and give state voters an opportunity to examine his four years in office, alongside a barely known rival with an odd name who declares that he’s been “a failure as a Democrat”?

Yves Talks With Zephyr Teachout, Challenger to Cuomo in New York Democratic Primary - Yves Smith - (transcript) Zephyr Teachout, with her running mate Tim Wu, is running against Democratic party fixture, the State governor Andrew Cuomo, and his lieutenant governor nominee Kathy Hochul. A corruption scandal has dented Cuomo’s ratings, transforming the Teachout/Wu challenge from quixotic to distantly plausible. You can read Lambert’s interview of Wu, who is famed as a net neutrality advocate, here.  Teachout is a Fordham assistant law professor and was digital director of the 2004 Dean campaign. I met her in 2011 near Zuccotti Park when Occupy Wall Street was out in force and she co-founded A New Way Forward, an initiative to break up major banks. Teachout is an old-fashioned liberal who favors restrictions on monopoly/oligopoly power, progressive taxation, supporting unions as a way to improve labor bargaining power, and strong social safety nets.

Leave the Fracking Gas in the Ground --  So says a new study being prepared on global warming.  Greenhouse Gas Emissions Growing More Dangerous, Draft of U.N. Report Says The report was drafted by the Intergovernmental Panel on Climate Change, a body of scientists and other experts appointed by the United Nations that periodically reviews and summarizes climate research. It is not final and could change substantially before release. The report, intended to summarize and restate a string of earlier reports about climate change released over the past year, is to be unveiled in early November, after an intensive editing session in Copenhagen.  A late draft was sent to the world’s governments for review this week, and a copy of that version was obtained by The New York Times.  Using blunter, more forceful language than the reports that underpin it, the new draft highlights the urgency of the risks likely to be intensified by continued emissions of heat-trapping gases, primarily carbon dioxide released by the burning of fossil fuels like coal, oil and natural gas. The report found that companies and governments had identified reserves of these fuels at least four times larger than could safely be burned if global warming is to be kept to a tolerable level. That means if society wants to limit the risks to future generations, it must find the discipline to leave the vast majority of these valuable fuels in the ground, the report said.

Shale is not a ponzi  - FT Alphaville - The FT’s Ed Crooks reported this week that fears over the long-term health of America’s shale industry could be put to rest thanks to news that independent oil and gas companies have now substantially improved their financial positions. From the story: Cash earned from operations by 25 leading North American exploration and production companies is expected in aggregate to exceed their capital spending next year for the first time since 2008, according to an analysis by Factset for the Financial Times. As Crooks recounts, the longstanding fear was that the industry was shaping up to be a Ponzi scheme, relying on nothing more than excitement over shale to continuously attract new investment, with every likelihood that things would cave in on themselves once the financing for more drilling ran out. Thanks to a shift to more profitable oil extraction over less profitable gas, however, it now looks like shale companies’ finances have improved enough to make the business sustainable. Cash shortfalls of about $32.2bn in 2012, and $8.8bn last year, notes Crooks, have now been transformed into a cash excess of about $2.4bn for the leading shale companies in the US.

Shale is not a ponzi, Part 2 --FT Alphaville -- In our last post, we referred to John Kemp’s argument that cash-flows in the shale drilling sector are not a good indicator of shale’s long-term commercial sustainability.  This, he argued, was due to the regular conflation of gas and oil in the metrics, justified by the fact that most companies produce some variety of both. In the last few years, however, producers have shifted their efforts increasingly towards oil production — due to the better margins — improving cash-flows as a result. Nevertheless, peak oilers still contend shale isn’t long-term sustainable because of the rapid decline rates for wells. These, they claim, are being depleted much more quickly than conventional wells, speaking of the problem in hand. Not so, according to Kemp, who is back on Friday with another column outlining the weird economics of shale. As Kemp explains (our emphasis): First, oil and gas producers have learned to drill and fracture wells much faster, using mass production techniques borrowed from manufacturing, so the same number of rigs and crews can drill many more wells than before. Second, the sceptics focus too much on the decline rate rather than the total amount of oil and gas recovered from a well over its lifetime, which is more relevant to the sustainability of the shale revolution. The relationship between initial production (IP), the decline rate (DR), and the estimated ultimate recovery (EUR) is subject to a tremendous amount of uncertainty. It varies significantly from play to play, county to county and even well to well. But in general, producers want oil and gas wells with a large EUR, a high IP and a rapid decline rate, because that means they receive more revenue overall, and more of it in the first few months after the well is completed rather than having to wait years and years.

Research shows potential health risk to babies born near drilling - The first research into the effects of oil and gas development on babies born near wells has found potential health risks. Government officials, industry advocates and the researchers themselves say more studies are needed before drawing conclusions. While the findings are still preliminary, any documented hazards threaten to cast a shadow over hydraulic fracturing, or fracking -- the process of blasting chemicals, sand and water deep underground to extract fuel from rock that’s helped push the U.S. closer to energy self-sufficiency than at any time since 1985. “It’s not really well understood how the environment interacts with genetics to produce these birth defects,” said Lisa McKenzie of the Colorado School of Public Health, who conducted research published in January in the journal Environmental Health Perspectives. “We really need to do more study to see what the association is, if any, with natural gas development.” McKenzie and her colleagues discovered more congenital heart defects in babies born to mothers living near gas wells in Colorado. Two studies, which have not been peer reviewed, showed infants born near fracking sites in Pennsylvania were more likely to have low birth weight, a sign of developmental problems. In Utah, local authorities are investigating a spate of stillbirths after tests found dangerous levels of air pollution from the oil and gas industry.

Brine firm sues over billboardsYoungstown Vindicator -  An Ohio man who uses a biblical reference and a statement against “poisoned waters” on billboards opposing wells for disposal of gas-drilling wastewater is fighting a legal threat from the Texas well owner on free-speech grounds. Austin, Texas-based Buckeye Brine alleges in a July lawsuit that the billboards paid for by Michael Boals, of Coshocton in eastern Ohio, contain false and defamatory attacks against its two wells, which dispose of contaminated wastewater from oil and gas drilling. The complaint by the company and Rodney Adams, who owns the land and operates the well site, contends the wells are safe, legal and meet all state safety standards. The parties object to statements on two billboards along U.S. Route 36, including one that “DEATH may come.” “The accusation that the wells will cause ‘DEATH’ is a baseless and malicious attempt to damage the reputations of the plaintiffs,” according to the complaint. “The billboards are also defamatory because they state or imply that Mr. Adams and Buckeye Brine are causing ‘poisoned waters’ to enter the drinking-water supply.”

243 cases in PA where fracking contaminated wells -- Six years into a natural gas boom, Pennsylvania has for the first time released details of 243 cases in which companies prospecting for oil or gas were found by state regulators to have contaminated private drinking water wells. The Department of Environmental Protection on Thursday posted online links to the documents after the agency conducted a “thorough review” of paper files stored among its regional offices. The Associated Press and other news outlets have filed lawsuits and numerous open-records requests over the last several years seeking records of the DEP’s investigations into gas-drilling complaints. Pennsylvania’s auditor general said in a report last month that DEP’s system for handling complaints “was woefully inadequate” and that investigators could not even determine whether all complaints were actually entered into a reporting system. DEP didn’t immediately issue a statement with the online release, but posted the links on the same day that seven environmental groups sent a letter urging the agency to heed the auditor general’s 29 recommendations for improvement. The 243 cases, from 2008 to 2014, include some where a single drilling operation impacted multiple water wells. The problems listed in the documents include methane gas contamination, spills of wastewater and other pollutants, and wells that went dry or were otherwise undrinkable. Some of the problems were temporary, but the names of landowners were redacted, so it wasn’t clear if the problems were resolved to their satisfaction. Other complaints are still being investigated.

Fracking Has Contaminated Drinking Water In Pennsylvania 243 Times, State Agency Reports -- For the first time, Pennsylvania has made public 243 cases of contamination of private drinking wells from oil and gas drilling operations. As the AP reports, Pennsylvania’s Department of Environmental Protection posted details about the contamination cases online on Thursday. The cases occurred in 22 counties, with Susquehanna, Tioga, Lycoming, and Bradford counties having the most incidences of contamination.  In some cases, one drilling operation contaminated the water of multiple wells, with water issues resulting from methane gas contamination, wastewater spills, and wells that simply went dry or undrinkable. The move to release the contamination information comes after years of the AP and other news outlets filing lawsuits and Freedom of Information Act requests from the DEP on water issues related to oil and gas drilling and fracking.The Pennsylvania DEP has been criticized for its poor record of providing information on fracking-related contamination to state residents. In April, a Pennsylvania Superior Court case claimed that due to the way DEP operates and its lack of public record, it’s impossible for citizens to know about cases where private wells, groundwater and springs are contaminated by drilling and fracking.  “The DEP must provide citizens with information about the potential harm coming their way,” John Smith, one of the attorneys representing municipalities in the lawsuit, told the Pittsburgh Post-Gazette. “If it doesn’t record and make available the violations records then it is denying the public accurate information, which is unconscionable.”

The Big Fracking Lie Exposed. Again -- The Big Fracking Lie is that shale gas industrialization has never ever once polluted water.  Ever. Anywhere. Honest. When we all know that every fracking shale well will pollute the atmosphere and compromise the water supply sooner or later. Just a matter of how much, how soon. The Pennsylvania Department of Environmental Protection has, under duress, finally released their list of water sources contaminated by shale gas industrialization: Just the ones that they will admit to. Just the ones that someone actually reported. Link to the DEP list of contaminated water wells:  Read more: DEP Releases Details of Water Contamination from Fracking: Six years into a natural gas boom, Pennsylvania has for the first time released details of 243 cases in which companies prospecting for oil or gas were found by state regulators to have contaminated private drinking water wells. The Department of Environmental Protection on Thursday posted online links to the documents since the agency conducted a “thorough review” of paper files stored among its regional offices. The Associated Press and other news outlets have filed lawsuits and numerous open-records requests during the past several years seeking records of investigations into gas-drilling complaints. DEP didn’t immediately issue a statement with the online release, but posted the links on the same day that seven environmental groups sent a letter urging the agency to heed the auditor general’s 29 recommendations for improvement.

Danger Beneath: 'Fracking' Gas, Oil Pipes Threaten Rural Residents - A construction boom of pipelines carrying explosive oil and natural gas from “fracking” fields to market -- pipes that are bigger and more dangerous than their predecessors -– poses a safety threat in rural areas, where they sometimes run within feet or yards of homes with little or no safety oversight, an NBC News investigation has found. The rapidly expanding network of pipes, known as “gathering lines,” carry oil and gas from fracking fields in many parts of the country to storage facilities and major “transmission lines.” They are subject to the same risks – corrosion, earthquakes, sabotage and construction accidents -- as transmission lines. But unlike those pipelines, about 90 percent of gathering lines do not fall under federal safety or construction regulations because they run through rural areas, the Government Accountability Office reported in 2012. Safety advocates and regulators have called for new regulations on the pipelines, but energy industry interests have pushed back. Any changes could be years away, if they happen at all, according to an analysis from the Congressional Research Service released early this month. The lack of oversight on rural gathering lines – historically low-pressure steel lines up to 12 inches around – was long justified by the perception that the risk of accidents was minimal. But the fracking boom has led to construction of new gathering lines that are both bigger and under higher pressure, making them virtually identical to transmission lines.

Energy group touts refining opportunities - With news of hydraulic fracturing regulations to be released soon, petrochemical manufacturers are making sure residents know of the energy opportunities throughout the state. “Illinois is in a unique position because of its energy portfolio,” said Sarah Magruder Lyle, vice president of strategic initiatives for American Fuel & Petrochemical Manufacturers. “With the exception of hydropower, this is a state that produces and uses just about every kind of energy there is and with four refineries and plants and most of the production happening in this part of the state, it’s very important to us.” Following a stop in Effingham to speak with the East Central Illinois Development Corporation, Magruder Lyle said the key to taking advantage of the opportunities offered by hydraulic fracturing, or fracking, as well as other uses of energy is in job creation. However, she said many people are focused on the front end of the process while many of the job opportunities come from refinery and manufacturing of petrochemical products, such as plastics. “Our goal is to really draw that connection,” she said. “The opportunity is there. Illinois has started to put the pieces together to make sure hydraulic fracturing is done responsibly so that Illinois doesn’t miss an opportunity.” Creating the connection between employees at all levels of the industry isn’t the only piece the group wants people to see. Effingham’s location, as well as easy access to interstate highways, railroads and proximity to businesses that use petrochemical materials, most notably Sherwin-Williams in Flora and Effingham, were also important.

State Agency Issues Long-Awaited Fracking Rules — The Illinois Department of Natural Resources released a long-awaited plan Friday to regulate high-volume oil and gas drilling that supporters hope could bring an economic boost to southern Illinois but environmentalists fear may be too lenient.The lengthy report follows months of delays and complaints over the process to draft rules governing hydraulic fracturing, or fracking, in Illinois. Industry officials say southern Illinois has rich deposits of natural gas, but a final draft of the rules — initially touted as a national model of both sides working together — has taken months for the agency to produce as industry groups warned the state was losing business.A 150-page report was given to the 12-member Joint Committee on Administrative Rules, which has 45 days to act, or the rules can take effect. Environmental groups, industry experts and lawmakers also got their first look at the report Friday, and some said they expect to spend hours, possibly days, combing through the details.“These are highly technical rules that will require a really close look at the details,” Josh Mogerman, spokesman for the Natural Resources Defense Council, said earlier Friday. “Our experts are going to be spending their holiday weekend going through these rules with a fine tooth comb.”The new rules would require companies awarded drilling permits to submit lists, some of them redacted, of the chemicals used in fracking. The redacted list would be made available to the public by department and be submitted to the public health department. The industry says releasing the full list would expose trade secrets.

Texas Proposes Tougher Rules On Fracking Wastewater After Earthquakes Surge --The agency that regulates oil and gas activity in Texas is considering new, tougher regulations governing the practice of injecting leftover water used to frack natural gas wells deep into the ground — a process which is believed to be responsible for an increase in human-caused earthquakes across the state. The Texas Railroad Commission’s new proposed regulations on wastewater injection wells were heard by members of the Texas House of Representatives’ Subcommittee on Seismic Activity on Monday, following complaints that earthquakes have become more frequent over the last several years. Dr. Craig Pearson, the Railroad Commission’s new seismologist, told the subcommittee that the regulations would help make sure injected wastewater doesn’t migrate onto inactive fault lines and cause man-made quakes.“Because we’re now dealing with induced seismicity, the worry is not only about water moving up [to our groundwater] but out to dormant faults,” Pearson said, noting that current regulations are only designed to protect from groundwater contamination.The controversial technique of hydraulic fracturing, otherwise known as “fracking,” uses a great deal more water than conventional drilling. .  The leftover wastewater used to frack the well is disposed of by injecting it deep underground, and scientists increasingly believe that this is causing man-made earthquakes — not only in Texas, but across the country. The large amount of water injected into the ground can change the state of stress on existing fault lines to the point of failure, scientists believe, causing earthquakes.

Fracking the Frackers Anti Fracking - Forbes has published the first of a two part series on “what’s behind the fractavist” movement – as if there has to be something “behind” what is clearly a grass-roots amorphous effort. The frackers and their spokesman have taken this tack from the outset- that someone or some organization – Gazprom, the Saudi royals, the Park Foundation – has to be “behind” anti fracking. That anti frackers are paid, that they are part of a conspiracy controlled from somewhere.  This delusory approach has always amused me. Because if there is some group behind the anti-fracking movement, my paycheck is way way late. They start this series by interviewing Dan Fitzsimmons ? Fitzsimmons is the head of a leasing group in New York, the Joint Landowners of New York, that sued that the State of New York over its supposed delay in issuing fracking regulations with legal expenses bankrolled by the Koch brothers. Fitzsimmons not only is not interested in learning the truths about fracking, he notoriously advised his members to stay away from the presentations we made on New York’s shale gas potential – which I lampooned as a Fracking Chickenhawk

Gov. Snyder to convene panel on Michigan's acceptance of low-level radioactive waste -- Gov. Rick Snyder today announced plans to form a panel of experts to look at the state’s standards for disposing of low-level radioactive materials. The announcement follows a Free Press article Tuesday on a Pennsylvania oil and gas development company’s plans to ship to a Belleville area hazardous waste landfill up to 36 tons of low-level radioactive sludge that’s a byproduct of the fracking process. The sludge was rejected by landfills in western Pennsylvania, and its later shipment to a landfill in West Virginia was halted by the state and voluntarily discontinued by the company, Range Resources, as West Virginia reforms its laws for handling such waste. The radioactivity, usually from the metal radium, accumulates from drill cuttings, the soil, rock fragments and pulverized material removed from a borehole that may include fluid from a drilling process. It also can be present in flowback water, which is the brine or other fluid injected into shale formations during Ohio and West Virginia, two states with more intensive fracking activity than Michigan, have strengthened regulations on how to store, treat, process and dispose of radioactive oil and gas drilling wastes. Pennsylvania also doesn’t allow the materials in its landfills. Each of the states leaves it to oil and gas developers to find a disposal site. As Ohio tightened its regulations, state officials listed the Wayne Disposal site in Van Buren Township as an option for Ohio drillers.

Michigan to review standards for radioactive waste allowed in Wayne County landfill — Michigan Gov. Rick Snyder on Monday ordered a review of disposal standards for low-radioactivity drilling waste, and a Wayne County landfill that accepts the material announced it will voluntarily suspend disposal until the review is complete. The Detroit Free Press reported last week that up to 36 tons of “sludge” already rejected by other states was heading to the Wayne Disposal landfill near Belleville, which has had approval to accept the waste since 2006. Regulations are tightening in other states, according to the newspaper, making Michigan a more popular destination for “technologically-enhanced, naturally occurring radioactive materials” collected during hydraulic fracturing or other drilling operations. Michigan’s disposal regulations were established by an advisory committee in 1996, but with critics raising concerns over the potential impact on ground water, Snyder has directed the Department of Environmental Quality to assemble a panel of experts for review. “We remain deeply committed to protecting public health and Michigan’s precious water resources,” the governor said in a release.

Food Crops Pushed To The Side As Oil Trains Sail Through - In oil-rich North Dakota, farmers trying to get their crops to market are getting squeezed out of the rail transportation picture. Rail line congestion caused by the oil boom in the Bakken shale oil field of North Dakota and Montana is creating huge backlogs for farmers anxious to get wheat, soybeans, sugar beets, and other crops to markets, and it’s driving large production losses for big food companies like General Mills and Cargill. “This rail backlog is a national problem,” Sen. Heidi Heitkamp (D-ND) told the New York Times. “The inability of farmers to get these grains to market is not only a problem for agriculture, but for companies that produce cereals, breads and other goods.” A study conducted by North Dakota State University at the request of Sen. Heitkamp found that farmers could lose more than $160 million in revenue because of crowded rail lines.The booming production of oil from the Bakken field has meant a huge increase in shipments by rail because the region is not well served by pipelines. About 75% of the Bakken production is shipped by rail, including about 400,000 barrels a day to the East Coast.

Steve Horn: State Dept. Overseers of Contentious Enbridge Tar Sands Pipeline Workaround Have Industry, Torture Ties - The Sierra Club, National Wildlife Federation (NWF) and other green groups recently revealed that pipeline giant Enbridge got U.S. State Department permission in response to its request to construct a U.S.-Canada border-crossing tar sands pipeline without earning an obligatory Presidential Permit. Enbridge originally applied to the Obama State Department to expand capacity of its Alberta Clipper (now Line 67) pipeline in November 2012, but decided to avoid a “Keystone XL, take two” — or a years-long permitting battle — by creating a complex alternative to move nearly the same amount of diluted bitumen (“dilbit”) across the border. The move coincides with the upcoming opening for business of Enbridge's “Keystone XL” clone: the combination of the Alberta Clipper expansion (and now its alternative) on-ramp originating in Alberta and heading eventually to Flanagan, Ill., the Flanagan South pipeline running from Flanagan, Ill., to Cushing, Okla., and the Cushing, Okla., to the Port Arthur, Texas, Seaway Twin pipeline. Together, the three pieces will do what TransCanada's Keystone XL hopes to do: move dilbit from Alberta's tar sands to Port Arthur's refinery row and, in part, the global export market. Environmental groups have reacted with indignation to the State Department announcement published in the Federal Register on August 18, 2014. The public commenting period remains open until September 17, 2014.  Jim Murphy, senior counsel for NWF, referred to it as an “illegal scheme,” while a representative from says Enbridge has learned from the lessons of its corporate compatriot, TransCanada.

Oil spill that fouled Mexican river will take months to clean up - (Reuters) - An oil pipeline spill that contaminated a river in the northern Mexican state of Nuevo Leon will take months to clean up, the country's top water authority said on Thursday. The 24-inch Madero-Cadereyta pipeline, owned by national oil company Pemex, was ruptured when thieves attempted to tap into it, the company said on Sunday. The pipeline feeds crude to Pemex's nearby Cadereyta refinery. David Korenfeld, head of Mexico's national water commission, told reporters in Mexico City that the spill extended across a 6 kilometer (4 mile) stretch of the Rio San Juan, but had been contained by floating barriers. "The clean-up of this stretch will take approximately two to three months," he said. Korenfeld added that residents near the contaminated parts of the river, located about 40 kilometers (25 miles) from the state capital of Monterrey, were advised not to consume the water. true Pemex said in its statement on Sunday morning that an illegal tap on the pipeline caused the spill but that it had been controlled.

Did Demand Concerns Spark The Biggest Drop In US Oil Rig Count Since 2012? - Crude Oil and gasoline prices have been sliding notably recently, but, as Carl Larry, president of Oil Outlooks & Opinions LLC in Houston notes, "the focus is definitely on the U.S. and on concern about demand as we head into the maintenance season." While Brent remains more concerned about Russia and Ukraine, WTI is "focused on supply, demand fundamentals," which with production surging, leaves "everybody wondering if demand will stay steady. People are reducing risk exposure now." What we wonder is - does that explain why the US Oil Rig Count dropped this week by its most since 2012...?

Dearth of oil finds threatens long-term supplies, price (Reuters) - The rate of oil discoveries continues to disappoint after a record low last year and firms could even cut their exploration budgets to save on costs, a risk to long-term supplies and prices, industry executives said. Explorers are finding so little oil, many are retreating from high-risk frontier areas to safer bets like North American shale, executives at a major Norway oil conference said. This will likely force them to buy expensive discoveries once investor sentiment shifts focus to reserves from cash flow. "If you look back on 2013, it was a record low year in terms of discovering new resources," Helge Lund, the CEO of Norway's Statoil, said. "And year to date it's been around 4.4 billion barrels of oil equivalents, the lowest I have seen for decades." Last year only half as much crude was discovered as consumed, according to consultancy Wood Mackenzie. Big exploration campaigns in frontier places like West Africa and the Arctic Barents Sea have yielded little. Just last week Maersk oil, part of Danish shipping conglomerate A.P. Moller-Maersk said it would virtually cease exploration in Brazil and the U.S. Gulf of Mexico after an impairment and dry wells, even though its reserves equal just 4.6 years of production, below an average of 5-10 years for its peers.

Oilprice Intelligence Report: BP Corruption Update, Latest Deals & Alerts: Anti-corruption group Global Witness is claiming a lack of transparency in Angola’s use of payments by BP and its partners for a development project. BP and partners including Cobalt International Energy agreed to contribute $350 million, in installments, to be used for a research and technology center, Global Witness said in a statement. BP and Cobalt agreed in December 2011 to provide $350 million to construct a research institute in Angola, as a condition of gaining drilling rights for an offshore block of the African country's coast. So far, the companies have paid half that amount, and the anti-corruption group maintains that there is no indication that the project exists. A new report from the US-based Natural Resource Governance Institute alleges that sub-Saharan governments are selling crude in dubious deals worth hundreds of billions of dollars without accounting for them. The report says that sub-Saharan Africa’s top 10 oil-producing countries have sold more than $254 billion in crude through their state-owned oil companies over the past three years, and that the biggest purchasers were large Swiss trading firms, including Glencore, Arcadia and Trafigura. These three accounted for one-quarter of the aforementioned purchases between 2011 and 2013. The institute is calling for new regulations for nationally owned oil companies and big trading firms to disclose their oil deals. “The sales to Swiss traders were worth an estimated $55 billion - more than twice as much money as these 10 countries - Angola, Cameroon, Chad, Côte d‘Ivoire, Republic of Congo, Equatorial Guinea, Gabon, Ghana, Nigeria and South Sudan - received in net foreign aid,” the report said.

LatAm Allies struggle as Venezuela’s free oil runs dry - — Venezuela’s shipments of crude oil and fuel to its allies have fallen to a five-year low as a weak economy hits its ability to uphold accords that former president Hugo Chávez struck to lower energy costs for friends and expand his diplomatic clout. Total shipments under cooperation deals with Latin American and Caribbean countries dropped 11 percent in 2013 to 243,000 barrels per day (bpd), the lowest level since 2007, according to recent data from Venezuela’s state-owned oil company PDVSA. Several factors are behind the decline: lower oil output and weak economic growth at home, a domestic refinery network that has not fully recovered from a severe accident in 2012, and financing agreements with China that divert much of the OPEC nation’s oil production to Asia. Some of the beneficiaries of the cheap oil are now being forced to turn to other sources. In the eights months through August, countries from Jamaica to Argentina that have supply pacts with Venezuela have bought 140 cargoes of crude, components and fuel for transport and power generation on the open market, according to tender information compiled by Reuters. More than two thirds of those were for Ecuador, one of Venezuela’s closest allies. The purchases, which have left tankers in short supply, are far costlier than oil obtained through long-term pacts.

Energy reform could increase Mexico’s long-term oil production by 75% - On August 11, Mexico's president signed into law legislation that will open its oil and natural gas markets to foreign direct investment, effectively ending the 75-year-old monopoly of state-owned Petróleos Mexicanos (Pemex). These laws, which follow previously adopted changes in Mexico's constitution to eliminate provisions that prohibited direct foreign investment in that nation's oil and natural gas sector, are likely to have major implications for the future of Mexico's oil production profile. As a result of the developments in Mexico over the past year, EIA has revised its expectations for long-term growth in Mexico's oil production. The changes in EIA's assessment of Mexico's liquids production profile are profound. Last year's International Energy Outlook projected that Mexico's production would continue to decline from 3.0 million barrels per day (MMbbl/d) in 2010 to 1.8 MMbbl/d in 2025 and then struggle to remain in the range of 2.0 to 2.1 MMbbl/d through 2040. The forthcoming Outlook, which assumes some success in implementing the new reforms, projects that Mexico's production could stabilize at 2.9 MMbbl/d through 2020 and then rise to 3.7 MMbbl/d by 2040—about 75% higher than in last year's outlook. Actual performance could still differ significantly from these projections because of the future success of reforms, resource and technology.

Domestic companies cheer ruling on steel imports: Domestic steelmakers are cheering the recent finding by the International Trade Commission that they’ve been harmed by cheap imports of steel used in oil and gas exploration. The ruling allows the Department of Commerce to impose tariffs on imports of steel goods from India, South Korea, Taiwan, Turkey, Ukraine and Vietnam – potentially leveling the playing field for domestic steelmakers. The steel pipe is used mainly in drilling oil and gas wells and has figured heavily in the recent U.S. energy exploration boom. The shale oil fields in eastern Ohio, for example, are providing growing opportunity for hydraulic fracturing – “fracking” – and other means of domestic energy production. Imports accounted for nearly 40% of the 7 million tons of oil country tubular goods consumed in 2013. Last year, the U.S. market was worth about $10.1 billion and 8,910 workers’ employment was tied to the U.S. production of oil country tubular goods. “They have sent a clear message that we are open to trade from all, as long as it is fair.”  “It is unfortunate that we had to scale back operations due to the unfairly traded imports. On a level playing field, we can compete with anyone.” He expects to see relief in price competition by year’s end.

Fractavist Decks Frackman in Bar -- Matt Ryan was Binghamton’s mayor when they passed a fracking ban. Vic Furman, aka Frackman notorious for mooning people and drinking frack flowback at demonstration, is a pr0-fracking blogger. They ran into each other in a bar, and this is what transpired  . . .

New York’s Largest Fracking Chickenhawk Admits to Indecent Exposure - After the Showdown in the Bar with fractavist mayor Matt Ryan, Vic Furman, aka “Frackman” admits to indecent exposure. On camera. At a peaceful anti fracking demonstration – that included children. Here’s the news coverage on New York’s largest fracking chickenhawk, who is seeking a restraining order against a man that he outweighs by 150 pounds:

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