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Sunday, October 5, 2014

rjs: fracking, oil, and gas news, October 4, 2014

from rjs, October 4, 2014

The major story this week was the federal go-ahead for Dominion Resources to export fracked gas from the Cove Point Facility on Chesapeake Bay, which will now become the first gas export terminal on the east coast…exports of more than 5 million metric tons of liquefied natural gas each year are already in the pipeline to both free trade agreement countries and others, including China, India, and Japan, in fulfillment of a contract between Cabot Oil and Gas and the Japanese trading company Sumitomo to purchase 350,000 MMBtu per day of natural gas from Cabot’s Marcellus wells and send it through pipelines to the plant on the Maryland shore, coincidentally at the same time that the panama canal has been widened to take the larger LNG tankers…exporting fracked gas has to be the most shortsighted energy policy ever allowed; as you all know by now, fracking releases copious quantities of gas when the shale layer is first fracked, but the output quickly falls off, with typical depletion rates of 80% within two years...furthermore, the thickest and most productive bands of Pennsylvania shale have already been worked, so hence just to maintain current production even more wells need to be drilled in the thinner shale plays in the now we'll be exporting our gas at a time when it's cheap & plentiful, and in five or ten years hence, we'll have import it for whatever our needs remain then, when it has tripled in price and our country has already been all fracked up….

Speaking of Sumitomo, they just took a big hit on their investment in US shale operations, with the writedowns they're taking on those unprofitable investments almost completely wiping out their earnings from other operations, & leaving their earnings statement in the worst shape since they took big losses on copper trading in 1998....all this time we've been wondering who the small time suckers were who were being conned by American frackers to put up the money to underwrite their unprofitable drilling operations, and here one big sucker turns out to be one of the supposedly most savvy Japanese trading companies, who you'd think would know better...if smart & savvy Japanese businessmen cant see through the fraud and get taken by the frackers, how many of our senior citizens do you think have invested & lost their retirement funds in these oil and gas scams?  well, it appears that New York Attorney General Eric Schneiderman has been asking the same question, because in his role as a securities regulator, he's been enforcing agreements with gas frackers requiring public disclosure of information on the financial risks that fracking poses to their investors, and as a result such companies must now publish the relevant information about the environmental, financial, and regulatory risks associated with the operations they're selling to public investors...

As seems to be the case every week, we've seen a number of new studies that get little publicity...for instance, research is underway at the University of Cincinnati to see how many Ohioans exposed to fracking chemicals get sick, so the body counts of those sick Ohioans can be used to determine how to write safer fracking regulations in New York and North Carolina.....and more enlightening research at the University of Colorado Denver has discovered that those who are in favor of fracking disagree with those who are opposed to it (really, that's what they 'discovered', & what they presented at the Earth Institute as their finding)...

Finally, there was an article in Environmental Science & Technology, a publication of the American Chemical Society, with the self explanatory headline Proposed Trade Agreements Would Make Policy Implications of Environmental Research Entirely Irrelevant, which happens to be just what Kathy Flora has been telling us all along...
again, we'll start with a few local stories...

Meeting Sunday in Gates Mills states case for 'no' vote on Issue 51; fracking also not supported -- A crowd of about 70 people attended a Neighbors for Responsible Government meetingSunday at the village's Community House in which evidence was presented as to why voters should vote no on Issue 51 on Nov. 4. Issue 51 centers on fracking for natural gas in Gates Mills. Those who urge against the charter amendment's passage, while not supporting fracking themselves, said the changes would go far beyond the subject of fracking. "It's interesting language, it's scary language," said Lawyer James F. Lang, one of three speakers at the afternoon event and an attorney for Calfee, Halter and Griswold. "After I read it I said, 'Wow,'" he said of the issue's proposed charter amendment. There are now 43 fracked, shallow wells in Gates Mills. . Concerns have developed among some after news in recent years that fracking has been the cause of pollution, explosions and excessive noise. The local movement against the wells began when Mayor Shawn Riley spoke of possibly assembling a land trust to prepare for the coming of gas wells to Gates Mills. The group that formed in protest is known as Citizens for the Preservation of Gates Mills.

Fearing pollution, some local governments are demanding back zoning control over oil and gas - Kathleen Chandler, a County Commissioner in Portage County, Ohio, worries when she sees truck after truck carrying waste into the county. An estimated 500 million gallons of fracking wastewater will be dumped in the county this year — and there’s nothing she can do to about it. “We have no control at the local level,” she explains. “The state took away our control.” Ten years ago, Ohio changed its zoning laws. It took zoning control of oil and gas operations away from local communities and gave the authority to the state department of natural resources. In 2012, Pennsylvania also tried to limit local zoning rights around oil and gas operations, as part of the controversial Act 13. But late last year, the state Supreme Court struck it down, maintaining local control. New York courts have also upheld the rights of local governments to regulate fracking. Randy Roberts, an attorney for Houston-based Stallion Oilfield, which owns three injection wells in Ohio’s Portage County, says it makes sense to decide energy development at the state level. “It’s akin to the federal government regulating drugs,” he says. “The FDA regulates drugs; each county doesn’t regulate what drugs you can take. It makes more sense for the state to do it than to have part-time zoning board[s] deciding whether someone can drill for oil and gas. They’re not educated in that area, and they don't have time to get educated in that area.”  Some Ohio communities are trying to reassert their rights. People in the city of Kent, in Portage County, will vote on something called a "community bill of rights" this November. It’s an attempt to regain local rights around energy production sites. Five miles east, the city of Munroe Falls has a case pending before the Ohio Supreme Court. They’ve argued that the Home Rule law in the Ohio constitution overrides the state’s zoning law.

Steady Oil Prices Prompt More Fracking Activity In Ohio - The Ohio Department of Natural Resources says it has permitted 17 more horizontally-fracked wells in five eastern counties.The state permits allow for more oil and gas development in an area known as the Utica shale. Youngstown State University geologist Jeffrey Dick says oil and gas reserves in the region are plentiful. He expects drilling activity in Ohio to last decades.“Given the amount of reserves that are down there and the acreage that’s left to be drilled, I think you’re easily looking at 20 to 40 years easily,” says Dick.  Dick estimates that only 4 percent of the acreage in the Ohio’s Utica Shale has been drilled. He says that means continued fracking activity as long as crude oil prices remain stable.“But as long as the economy across the planet is doing fairly well and India and China continue to expand I don’t think we’re going to see any drop in the price of a barrel of oil anytime soon,” Dick says. ODNR says more than 1,000 fracked wells have been drilled and nearly 600 are now producing oil and gas. With more production comes more toxic wastewater. ODNR says the volume of drilling site wastewater injected into underground wells rose 15 percent from 2012 to 2013. The agency is investigating seismic activity around two injection wells after reports of earthquakes near those sites.

Professor co-authors study on fracking concerns -  Community residents raised concerns about potential health impacts of unconventional natural gas-drilling methods in a study co-authored by a University of Cincinnati assistant professor at the College of Medicine. Erin Haynes, an assistant professor in the environmental health department, has spent over 10 years working with rural Ohio communities to better understand their health concerns, including those raised by fracking. In September, Haynes and other authors published “Health impacts of unconventional natural gas development,” a comparative assessment of communities considering and implementing fracking. Unconventional natural gas-drilling refers to the process of shale gas extraction that includes horizontal drilling and hydraulic fracturing, or fracking, to extract natural gas. Residents in Ohio, where fracking is rapidly expanding, asked Haynes to help address their concerns about unconventional natural gas drilling in their community. The study revealed a number of public health concerns from three states — Ohio, New York and North Carolina — that are each in different stages of natural gas extraction development. New York has suspended its fracking development to study health and environmental impacts, and North Carolina is still under debate on whether or not to start fracking. “Research is sorely needed, and Ohio is ripe for such environmental epidemiologic studies,” Haynes said. “Ohio is a beautiful state, and we could be one of the first states to pro-actively study exposures associated with the fracking process. This information would be helpful to inform other states considering fracking and how to protect our own state and its residents.”

A fight to control disposal of fracking waste - Wastewater from fracked wells that produce gas and oil in Pennsylvania and West Virginia is coming to Ohio. Julie Grant, a reporter who has been researching this issue, says Ohio has become a go-to place for the nation's fracking waste disposal. Grant reports on environmental issues in Ohio and Pennsylvania for the program The Allegheny Front. "Energy companies say the layers of underground rock that are better for wastewater storage are easier to access in Ohio, than in Pennsylvania’s hilly Appalachian basin," Grant says. Pennsylvania is one of the top natural gas producers in the nation, but it’s more difficult to permit a disposal well there. Grant says there are only a few waste disposal wells in the whole state. Ohio also has industry-friendly regulations. Oil and gas companies need permits to dispose of fracking waste underground. In other states around the region, including Michigan and Pennsylvania, the Environmental Protection Agency has authority over those permits -- and the process can take a year or more. But in Ohio, the same permits can be issued in a matter of months. That's because Ohio has primacy over injection wells, so the state, not the federal government, issues the permits and the process is often faster.

Ohio Singled Out for Worst Fracking Waste Disposal Practices --The Government Accountability Office (GAO) released a new report this week showing that Ohio was the only state among eight studied that allows waste fluids from oil and gas wells to be disposed of without disclosure of the chemicals it contains.The report, created as a request by seven Democratic U.S. Senators and Congresspersons, studied eight states where fracking has become widespread—California, Colorado, Kentucky, North Dakota, Ohio, Oklahoma, Pennsylvania and Texas. All but Ohio required waste disposal companies to provide information on the waste content before getting a permit to dispose of it, primarily in injection wells deep underground. Many of the states studied, including North Dakota, Pennsylvania and Kentucky, have stringent disclosure requirements before a permit for disposal is issued. Ohio, however, has no disclosure requirements before or after a permit is issued by the Ohio Department of Natural Resources (ODNR). “According to officials, class II injection well operators [in Ohio] are not required to analyze the chemical composition of injected fluids,” says the GAO report. “The division has supported research to analyze produced water samples from oil and gas producing formations. In addition, operators may monitor the specific gravity of fluids when applying to increase permitted injection pressure limits. The division may sample injection fluids at any time during injection operations.”

Ohio fracking waste issues go beyond chemical disclosure -  While a recent federal study singles out Ohio for limited information requirements in permitting for fracking wastewater disposal, advocates in the state say the issue is much broader. Ohio requires fewer details about the liquid fracking wastes going into its underground wells than other states do, says the General Accounting Office. Environmental groups say the situation is even worse because the state’s inspection and enforcement practices are lax. Meanwhile, “solid” waste from shale oil and gas operations raises concerns. Ohio law already exempts tons of deep shale drilling waste from landfill regulations meant to protect the public from elevated levels of heavy metals and radioactivity.  Now the Ohio Environmental Protection Agency is considering whether to allow “beneficial reuse” of those shale drill cuttings, including on roads and in wetland restoration.  Underground injection wells dispose of millions of gallons of wastewater from fracking. The fracking process uses millions of gallons of treated water to crack shale rock formations so oil and gas can flow out. The waste fluid that flows back afterward and during well production can be more than six times as salty as seawater, according to the Ohio Department of Natural Resources (ODNR). Deep shale layers in Ohio can also contain elevated levels of heavy metals. Radioactivity from radium is also a concern. Liquids can become contaminated by coming into contact with both types of materials.

West Virginia Plans To Frack Beneath Ohio River, Which Supplies Drinking Water To Millions --Nine citizen and environmental groups are urging West Virginia Gov. Earl Ray Tomblin to reconsider his plans to let companies drill for oil and natural gas underneath the Ohio River, citing concerns that drilling and fracking could contaminate the drinking water supply and increase the risk of earthquakes in the region.  In a letter sent to the governor this month, the coalition of Ohio- and West Virginia-based groups said Tomblin’s Department of Environmental Protection has not proved that it can adequately protect the Ohio River, which supplies drinking water to more than 3 million people. The groups cited drilling currently taking place in a state-designated wildlife area, which some have complained is unacceptably disrupting the nature preserve, and a chemical spill in January that tainted the drinking water supply for 300,000 people.  “The well-documented deficient enforcement capability of the West Virginia Department of Environmental Protection’s Office of Oil and Gas has been on public display for years,” the letter reads. “How are we ever to believe that the state has the political will, technical capability and community commitment to guarantee that adequate controls, timely supervision and, when needed, ruthless enforcement would occur on well pads that close to the Ohio River?”On Friday, Tomblin’s administration opened up the process for companies to bid on oil and gas leases located 14 miles underneath West Virginia’s section of river, which also acts as a natural border with Ohio. The bids would allow for companies to use the controversial process of hydraulic fracturing, or fracking, to stimulate the wells.

West Virginia Plans to Solve Money Woes by Allowing Fracking under Ohio River - Short on cash, the state of West Virginia has decided one solution to its monetary problems lies beneath the Ohio River. Officials there have opened the bidding process for companies to sink oil and natural gas wells along a 14-mile stretch of the river. One bidder has already offered $17.8 million over five years plus 18% royalties on extracted oil for the right to frack under the river. Three other bidders offered 20% royalties. Fracking, or hydraulic fracturing, involves injecting fluid which is often toxic into a well to break loose deposits of oil and gas. The fluid is later injected into spent wells and can contaminate ground water. State leaders said the move was necessary after lawmakers had to use $100 million from the Rainy Day Fund to avoid a budget deficit earlier this year. Revenue projections show West Virginia falling short again next year by about the same amount unless new sources of funding are identified. In addition to drilling in the Ohio River, the state may also open up a wildlife management area to drilling.

Editorial: Let them drill the Ohio and save the state - Charleston Daily Mail -- In 2000, Cotulla was a small town in southern Texas of 3,614 people. The median income was $10,856 a year, according to the Census Bureau. And 30 percent of the people lived in poverty.  In other words, it was like your typical town in West Virginia. But 14 years later, that’s changed. City officials estimate the population has doubled and income has tripled, as hydraulic fracturing has swung the Texas town’s economy into overdrive.  In our region, Marcellus shale natural gas production also is taking off, averaging 15 billion cubic feet per day, according to the U.S. Energy Information Administration. Last week, the Division of Natural Resources opened bids for leasing drilling sites in the Ohio River. Proceeds would go to support the state’s parks. The state would collect $17 million upfront and royalties of between 18 percent and 20 percent, state Commerce Secretary Keith Burdette told MetroNews. Earlier this year, legislators had to make an emergency appropriation of $3.7 million to the state parks.  The state has leased mineral rights to the Ohio for 100 years and oil rights for 25. Fracking thus far has proved to be safe. It’s time to turn our own communities from typical West Virginia towns into Cotulla.

Well Water Contamination Possible After Drilling Mishap -- Drilling for shale gas went wrong last week when operators accidentally drilled into one of their own wells that was engaged in production. The result is possibly contaminated drinking water from at least 12 homes. The West Virginia Department of Environmental Protection issued citations to Antero Resources for breaching of their own wells. The incident occurred at Anteors five-well Primm Pad in Doddridge County, WV near West Union last week. The DEPs citation indicates that the rupture happened at a drilling depth of 641 feet, and that several water wells, an existing gas well, and an abandoned well in the area appear to be affected. Antero was given until October 1st to get the situation under control. DEP reports the 12 private water wells in the area are having their water sampled. No results are available yet. Of those 12 water wells, the three closest to the Primm Pad have been disconnected from the homes as a precaution to ensure no gas gets into the homes. Antero and DEP are still trying to locate the owner of the 12th water well.

Federal Court Backs EPA’s Veto Of One Of The Largest Surface Mines Ever Proposed In Appalachia -- At 2,278 acres acres, down from an original 3,100 acres, the Spruce No. 1 Mine was one of the largest surface mining operations ever authorized in Appalachia. That was, until the EPA vetoed it. On Tuesday, a federal District Court judge upheld the EPA’s revocation of the West Virginia surface mine’s Clean Water Act (CWA) permit, calling it “reasonable, supported by the record, and based on considerations within EPA’s purview.”At issue was the agency’s veto of a permit that had previously been issued by the U.S. Army Corps of Engineers. The drawn-out case — the mine was first proposed in 1997 — received national attention for its potential implications. With this latest development, the Corps may be more hesitant to grant mountaintop removal permits in the future. The EPA vetoed portions of the Corps’ dredge-and-fill permit issued in January 2007. The permit would have allowed Mingo Logan Coal Company, Inc., a subsidiary of Arch Coal Inc., to bury 6.6 miles of natural headwater streams with mining waste.  “To its credit, the EPA finally recognized that this harm would really be unacceptable.”

EPA says greenhouse gas releases from wells, pipelines decline -- The U.S. oil and gas sector reduced greenhouse gas emissions from well sites, pipelines and processing facilities last year despite the industry's continued growth, the Environmental Protection Agency said Tuesday. Use of technology and improvements in hydraulic fracturing techniques in natural gas production led the way, accounting for a 73 percent decrease in methane released by that process since 2011, the EPA said. The industry as a whole reduced methane emissions by 12 percent in two years, even as the number of sources reported to the government grew by 13 percent. Carbon dioxide emissions from the industry increased by 2.5 percent last year, but the methane reduction brought the overall number down by 1 percent. The methane numbers continue a five-year trend in reductions that the EPA expects to continue with implementation of a 2012 rule requiring “green completions” of wells. Drillers must capture gas stored in flowback — the liquids that return to the surface during drilling and fracking — which prevents its release into the air.

Pennsylvania man faces sentencing for falsifying abandoned oil well plugging reports -- A man who falsely certified that he had properly plugged abandoned oil wells in Pennsylvania’s Allegheny National Forest faces sentencing in federal court in December. The Environmental Protection Agency relied on the falsified certificates in issuing permits for injection wells under the Safe Water Drinking Act, a law intended to safeguard underground sources of drinking water, according to the U.S. attorney’s office in Pittsburgh. And Karen Johnson, the regional chief of EPA’s groundwater enforcement branch, said, “Our main concern is protection of the underground supply of drinking water.” EPA inspectors conducting an inspection test in 2012 discovered that injected fluid had entered the bottom of an abandoned well in Elk County. That triggered an investigation by EPA, the U.S. Forest Service and the Pennsylvania attorney general’s office, which determined that Ronald Wright had falsified reports submitted to the state, requiring the re-inspection of 95 wells in the national forest.

Pa. Official Admits Errors In Investigation Of Whether Fracking Waste Spoiled Drinking Water - A Pennsylvania official has admitted that he may have used faulty information to determine that fracking waste was not poisoning the drinking water supply at a man’s property in Washington County, according to a Pittsburgh Post-Gazette report. During his sworn testimony at a trial before the Pennsylvania Environmental Hearing Board, Department of Environmental Protection water quality specialist Vincent Yantko said that his 2011 investigation of landowner Loren Kiskadden’s contaminated drinking water “did not follow its regulations to determine whether [chemical] leaks had occurred” at a nearby fracking site, the Post reported. Kiskadden is one of three landowners who say they have experienced health problems due to water pollution from the waste pit at the Yeager drilling site, owned by Range Resources Corporation.The case happening now is an appeal of a complaint filed by Kiskadden, whose drinking water allegedly turned grey and foamy at his property in Amwell Township. In his original 2011 complaint, Kiskadden claimed that he had used the water there for decades without incident. The only change was heightened operations at the Yeager wastewater site, he said.In response, the DEP conducted an investigation by collecting water samples from Kiskadden’s property. The DEP found that Kiskadden’s water had elevated levels of hydrogen sulfide odor, acetone, chloroform, and “explosive levels of methane.” However, the DEP also determined that the water contamination was not the result of fracking waste or any gas well-related activities.

Pennsylvania Releases Official File Detailing 250 Water Supplies Directly Polluted by 
Fracking (embedded document)

Study: More gas wells in area leads to more hospitalizations - The more natural gas wells in an area, the more of its residents end up in the hospital.So indicate the results of an unreleased study that was revealed at a state Senate Democratic Policy Committee hearing at King’s College on Wednesday on the subject of tracking, reporting and acting on public health concerns related to natural gas drilling. State lawmakers believe there needs to be better collection and sharing of health data in Marcellus Shale drilling areas, and state Sen. John Yudichak, D-Plymouth Township, has sponsored a bill that would dedicate $3 million in drilling impact fees to the state Department of Health to conduct the needed research. However, there needs to be “consistent, constant communication” between the Department of Health and the state Department of Environmental Protection, which state Auditor General Eugene DePasquale says does not have the resources and technology to effectively do its job. DePasquale said there should be a dedicated staff person in each of the two departments — Health and Environmental Protection — to keep in touch with each other. Wednesday’s hearing included testimony by Trevor M. Penning, professor of pharmacology and director of University of Pennsylvania’s Center of Excellence in Environmental Toxicology. Since 2011, the center has had a Marcellus Shale working group to address the public health impact, he said. The center did a study focusing on two counties where natural gas drilling has grown dramatically between 2007 and 2013: Bradford and Susquehanna. Wayne County, where no gas drilling is taking place, was used as a control.

Study Finds Treated Fracking Wastewater Still Too Toxic -- One of the biggest concerns about hydraulic fracturing, or fracking, is that the vast amount of wastewater produced by the process of extracting oil and gas from shale rock deep underground is incredibly toxic.  Most often, the wastewater is injected into disposal wells deep underground. But a process does exist to convert contaminated water into drinking water that involves running it through wastewater treatment plants and into rivers. Now a new report says that treated wastewater could be fouling drinking water supplies.  The wastewater left over from the process is not only highly radioactive, but also is contaminated with heavy metals salts known as halides, which are not suitable for consumption, according to the scientists.The researchers found that the chlorine and ozone – used to rid samples of fracking wastewater containing as little as 0.01 percent and up to 0.1 percent of halides per volume of water – also formed an array of other toxic compounds known as “disinfection byproducts,” or DBPs. As Climate Progress pointed out, “these chemicals — trihalomethaneshaloacetic acidsbromate, and chlorite — are formed when the disinfectants used in water treatment plants react with halides, according to the Environmental Protection Agency.” All are potentially dangerous to humans, not to mention wildlife.

Backlash as EPA considers fracking chemicals disclosure rules -- The US Environmental Protection Agency (EPA) is considering introducing new regulations that would require companies to disclose the composition of chemicals used in hydraulic fracturing (fracking), but the Society of Chemical Manufacturers and Affiliates (SOCMA) is warning that such a rule could jeopardise the trade secrets of its members, which include small businesses that manufacture chemicals used in oil and gas exploration.  Back in May, EPA sought public comment on what information could be reported and disclosed for fracking chemicals, and said the mechanism for obtaining this information could be regulatory, voluntary, or a combination of both. However, SOCMA is now arguing that this plan could lead to ‘mining from foreign competitors’ before chemicals enter commerce. The consequent offshoring could lead to lost jobs and product manufacture outside the reach of US law, the trade group suggests in comments submitted to EPA.

Senate Dems call for 'strongest possible' fracking regs - A group of Senate Democrats called for the Office of Management and Budget (OMB) on Friday to issue the "strongest possible" safety standards for fracking operations on public lands. The Interior Department recently sent its rule on fracking, a horizontal drilling method for oil and gas that pumps chemicals and water into the ground to break up deposits, to the OMB for final review. Sen. Ed Markey (Mass.) led the letter signed by 11 other Democrats to OMB Director Shaun Donovan on Tuesday. “As OMB finalizes this rule we urge you to issue the strongest possible safeguards to ensure that public health, safety and our environment are protected,” the letter states. “As stewards of these lands and resources for the American people it is therefore critical that the final rule for hydraulic fracturing on public lands offers stringent protections for the safety of workers, our water, air, lands and public health," it adds. Markey joined Sens. Sheldon Whitehouse (R.I.), Dick Durbin (Ill.), Elizabeth Warren (Mass.) and others telling the OMB it should ensure the final rule includes "public disclosure of all chemicals and other additives." The proposed rule does not include such disclosures.

Colorado Fracking Task Force Opens - Colorado has launched its newly formed hydraulic fracturing task force as fracking is hotly debated in the state. A highly anticipated first public meeting Thursday gave a glimpse into what critics have lambasted as an anti-industry bias from one of the task force’s leaders. Just hours earlier, Democratic Gov. John Hickenlooper said he couldn’t imagine not supporting whatever recommendations the Oil and Gas Task Force puts forward to the state legislature. “I can’t imagine something I wouldn’t support,” Hickenlooper told The Daily Caller News Foundation when asked if he would back the task force’s recommendations on drilling regulations. “If they can get it through here, then it’s probably good policy.” The Oil and Gas Task Force was created by Hickenlooper earlier this month as a compromise with Congressman Jared Polis, a Colorado Democrat, who has funneled lots of money into anti-fracking ballot measures. In return, Polis and his environmentalist allies agreed to drop ballot state measures aimed at allowing local governments to ban fracking. The task force has been attacked by critics who say it displays weakness on the part of Hickenlooper and that environmentalists will control the task force’s agenda.

“The roads were cracking, the crime rate was rising”: What happens when fracking takes over your town - North Dakota is sitting on gold. The oil-rich Bakken formation, thanks to the advent of hydraulic fracturing, or fracking, produces hundreds of thousands of barrels of oil each day; in one month this year, it produced as much oil as it had in all of 2004. Change this drastic doesn’t come without its conflicts and complications, as director Jesse Moss found in Williston, a city in the western part of the state. Since 2008, workers have been streaming into the city, overwhelming its capacity to house them and testing the locals’ ability to be welcoming. The stand-out exception to the prevailing “us versus them” attitude is Pastor Jay Reinke, who fills his church — its pews, its hallways, its parking lot — with migrants. Moss’s resulting documentary centers around Pastor Jay’s efforts to keep his makeshift community running, despite being nearly constantly at odds with the city council, the local newspaper and his neighbors. But it also spends time with the men who seek shelter under his roof, asking important and hard-to-answer questions about the promises that drew them to Williston in the first place, which more often than not seem to stand in stark contrast to how their lives there end up playing out. “The Overnighters,” which premiered this year at Sundance, will be making its theatrical debut on Oct. 10. Salon spoke with Moss about life in a city destabilized by the oil industry and the ambiguities of America’s energy explosion. This interview has been lightly edited for length and clarity.

Millions Of Tons Oil And Gas Waste: Hazardous Or Not? - The United States is on the verge of becoming the world’s top producer of oil – that’s according to the International Energy Agency.  But the oil boom is also leading to a boom in toxic oil field waste that can end up in open pit disposal sites.  There are increasing concerns over the dangers these disposal sites pose for air quality. All energy producing states have to deal with an ever escalating amount of waste.  In Wyoming, there are 35 commercial waste pits and permits pending on six more.  North Dakota shipped 1.75 million tons of oil and gas waste to landfills in 2013.  And, while Colorado - like North Dakota - has been tightening regulations on the waste water resulting from drilling operations, the state's solid waste pits are still left uncovered.  None of these states have conducted studies to determine if the air coming off those pits is safe. A recent investigation in Texas by InsideClimate News and the Center for Public Integrity uncovered a troublesome gap in oversight by state and federal regulators over these giant pools of oil field muck.

Open Pits Offer Cheap Disposal for Fracking Sludge, but Health Worries Mount - School Superintendent Kevin Wilson gestured toward a field less than a mile from Nordheim School, where 180 children attend kindergarten through 12th grade. A commercial waste facility that will receive millions of barrels of toxic sludge from oil and gas production for disposal in enormous open-air pits is taking shape there, and Wilson worries that the ever-present Texas wind will carry traces of dangerous chemicals, including benzene, to the school. "Many of these students live outside of where they could be exposed," said Wilson, a contemplative man with a soft Texas accent. "But we are busing them to the school, putting them in the direct path of something that could be harmful to them. It makes you think: Are we doing what's best for the students?" Along with Nordheim's mayor and other angry residents, Wilson is trying to stop the 204-acre facility, but he faces an uphill battle. In Texas, as in most states, air emissions from oil and gas waste are among the least regulated, least monitored and least understood components in the extraction and production cycle. Although the wastewater and sludge can contain the same chemicals used in hydraulic fracturing and other processes—chemicals known to affect human health—little has been done to measure waste emissions or determine their possible impact on nearby residents.

Fracking Emission Carcinogens Found in Denton Playgrounds - A new report published by ShaleTest, an independent environmental research agency in Denton, found levels of benzene in several Denton parks that exceed the Texas Commission on Environmental Quality's long-term exposure limitations. Benzene is a carcinogen found in cigarettes, gasoline and is a common byproduct of oil and gas drilling sites.  McKenna Park is one of the playgrounds where unsafe levels of the chemical were found. The playground is located next to Texas Health Presbyterian Hospital of Denton, within a neighborhood, next to several churches and across the street from one of Denton's many Rayzor Ranch gas wells.  "The effects of benzene are well-known. It causes cancer at low exposure rates, in adults. And we're talking about a playground where children are going to play. So that's very concerning," says Calvin Tillman, a spokesman for ShaleTest. As a part of the Project Playground national initiative, the group collected air samples from several DFW playgrounds to test for potentially harmful air quality.

Poisoned Fracking Playgrounds a Threat to Texas Kids --The air at Texas playgrounds could be hazardous to children’s health. That’s what nonprofit environmental testing groupShaleTest, which tracks the impact of shale oil and gas extraction for communities which can’t afford such tests, found as part of its Project Playground: Cleaner Air for Active Kids funded by Patagonia. The group ran air quality tests at five recreational parks and playgrounds in the north Texas, located near natural gas processing plants in the Barnett shale fracking area. It found harmful chemicals, including carcinogens, at all five. “The oil and gas industry claims that they’re drilling responsibly,” said ShaleTest president Tim Ruggiero. “These tests show they’re not.” The story was featured on the cover of the alternative newsweekly Fort Worth Weekly this week under the headline “Bad Air Day.” It described a deserted Delga Park in Fort Worth next to a huge natural gas compressor station run by Chesapeake Energy, which reporter Peter Gorman had to leave after two hours because his eyes were tearing and he had difficulty breathing.

Cracks seen in fracking-disclosure report process -  A recent California law that requires oil companies to disclose key details of fracking operations has so far failed to ensure that all the required information reaches the public. Under the law, an oil company that fracks a well in California must tell state regulators within 60 days the amount of water used and the chemicals involved. Fracking involves pumping pressurized water, sand and chemicals underground to crack rocks, and many environmentalists fear it could taint precious water supplies. Officials post the reports on a state website, accessible to anyone who wants to read them. Some oil companies, however, have submitted incomplete reports to the state. Others mistakenly assumed they could post the reports to a nationwide fracking information website until California regulators told them otherwise.

Baker Hughes Implements New Policy of Full Chemical Disclosure for Fracturing Operations: Baker Hughes announced today that it has implemented a new policy of disclosing 100% of the chemistry contained within its hydraulic fracturing fluid systems, without the use of any trade secret designations. The company announced in March of this year its plans to provide complete lists of all of its products and chemical constituents for all wells it fractures using its hydraulic fracturing fluid products, without detailing specific product formulations. In so doing, Baker Hughes hopes to increase public trust in the process of hydraulic fracturing, while still protecting the market-driven commercial innovation that has helped the company become a global industry leader.  "The policy we are implementing today is consistent with our belief that we are partners in solving industry challenges, and that we have a responsibility to provide the public with the information they want and deserve. It simultaneously enables us to protect proprietary information that is critical to our growth."  For each fracturing job the company performs on or after October 1, 2014, the policy mandates that Baker Hughes will disclose a single list of all of the chemical constituents of its products used, while also specifying their maximum concentrations.Baker Hughes' policy is fully compatible with the online national hydraulic fracturing chemical registry known as FracFocus. All of the company's disclosure forms can be found at

New York, drillers agree on increased risk-disclosure to investors - - Attorney General Eric T. Schneiderman today announced agreements with two natural gas development companies that will ensure the public disclosure of information on the financial risks that hydraulic fracturing – commonly referred to as fracking – poses to their investors. Under the agreements, Anadarko Petroleum Corp. (Anadarko) and EOG Resources, Inc. (EOG) commit to providing publicly accessible information on the financial effects of regulation, litigation, and environmental impacts of their fracking operations. “Investors and the public have a right to know all relevant information about the environmental, financial, and regulatory risks associated with the companies they are considering investing in,” said Attorney General Schneiderman. “By joining with my office to commit to greater public disclosure of the environmental and financial risks associated with their actions, these companies are setting a strong example for the rest of their industry.” In their agreements with Attorney General Schneiderman, Anadarko and EOG committed to disclose certain detailed information related to fracking operations in their federal securities law filings such as the Form 10-K, the annual summary report on a company’s performance required by the Securities and Exchange Commission (SEC). The agreements also committed the companies to make certain additional information related to their fracking operations available through other publicly accessible sources such as company websites, annual reports to shareholders, and environmental or safety reports.

Polarization in New York state over fracking: Fracking has been around for some time, but only in the past several years has the issue come into the public eye. It's a highly contentious political issue because of the high volume of water it uses, the types of chemicals used, and the unknown health and environmental impacts. In fact in New York, there was a pause on gas drilling permits that utilize fracking. This has become known as the "de facto moratorium," and has put the state in somewhat of an area of uncertainty. There have been a number of debates at the local level around fracking, the moratorium, and what should be done next. This Sloan Foundation study focused on providing an impartial lens on the politics of the issue through a series of surveys and interviews with "policy actors." Policy actors were defined as anyone who regularly seeks to influence the politics on hydraulic fracturing, whether from government, NGOs, industry, or academia. Overall, respondents offered a wide range of positions on what they thought New York State government should do – everything from banning the practice to permitting fracking statewide. To simplify the presentation of the results, policy actors were split into two groups based on their position – essentially pro-fracking and anti-fracking groups.While public opinion is fairly skewed against the fracking process, policy actors in New York State can best be described as polarized. Predictably, the pro-fracking group generally disagrees with environmental groups while the anti-fracking group generally disagrees with the oil industry. Policy actors in New York had stark differences in answers on a wide variety of questions.

Putting Lipstick on the Fracking Pig — The shale gas industry is making a new gambit to reclaim the word “fracking.” Fracking is short-hand for the extraction process technically known as horizontal hydraulic fracturing, or “frac”.  This week, the industry launched a new television and radio advertising campaign in Pennsylvania, where hydraulic fracturing is permitted by state government. The ads are aimed, in part, at taking back the word “fracking” from the opposition and trying to convince the public that the drilling technique is responsible for economic growth in the Keystone State. “Fracking is a good thing,” actors reciting a script say in the ads. One girl states in the ads, “Fracking rocks.” Further emphasis is added at the conclusion of the ad with the words: “Fracking: Rock solid for PA.” n The ads were unveiled this week at a Marcellus Shale Coalition conference in Pittsburgh, where industry officials refused to tell reporters how much will be spent on the new campaign.

No Shale Gas ? Ban Fracking Anyway -- It sends a message:  Your town does not want to be fracked, dumped on, poisoned or gassedThere may not be any natural gas worth drilling beneath the Town of Mamakating in eastern Sullivan County — if there’s any gas located there at all. And Gov. Andrew Cuomo may have put the natural-gas extraction method of hydraulic fracturing, or fracking, on indefinite hold while the state studies its impact on health — and waits for the November election to be over. But that didn’t stop Mamakating from banning fracking — and related fracking activities — at a Town Board meeting a few weeks ago. That makes it the sixth Sullivan County town — along with Tusten, Lumberland, Bethel, Highland and Forestburgh — to do so. Mamakating Supervisor Bill Herrmann said it was unlikely that any gas company would set sights on his town.  “We really don’t think it would happen here,” he says. But if it does occur anywhere in the region, he and other board members don’t want the chemically-laced fracking fluids to be transported on town roads.They also didn’t want fracking byproducts such as brine to be used as a de-icer on those roads or parking lots. “So we passed the ban,” he says.

Fracking Collateral Damage Conference -- Most New Yorkers won’t get fracked, they’ll just have frack slime slathered on their roads as de-icer, or have toxic radioactive frack sludge pumped into a local landfill or frack flowback dumped into a municipal water plant or have a shale oil bomb train blow up in their neighborhood or get gassed by a gas pipeline compressor station. Unless they do something about it. Because Cuomo won’t and Obama won’t and Hillary won’t. You do something about it. Or get slimed, bombed, poisoned or gassed. Conference on November 15th explains how you can avoid becoming a victim of fracking collateral damage. Conference on the collateral damage of fracking in New York, November 15th 9pm -5pm in Textor Hall, Ithaca College. Registration will be opening soon, and check our website for updates on speakers, registration, and event schedule. All groups and individuals are invited to register!Sponsored by the Coalition to Protect Communities from Fracking’s Collateral Damage An interactive map shows the pipelines, compressor stations and other infrastructure coming to a town near you.   Collateral damage includes:
  • Waste disposal – wastewater disposal, landfills, brine spreading on roads
  • Infrastructure for transporting and storing gas – pipelines, compressor stations, export facilities, underground storage
  • Air pollution – methane, ozone, vehicle emissions, radon, and other toxic substances
  • Transportation – road use, rail transport
US Oil & Gas Fracking Boom Could Drive Silica Sand Mining Operations In 12 More States, Environmental Groups Say --Silica sand is one of many ingredients used in the hydraulic fracturing process. As fracking accelerates in the United States, demand for "frac sand" could climb 30 percent from 2013 to 2015, an increase of about 95 billion pounds of sand, according to industry projections. Sand miner U.S. Silica Holdings Inc. said demand for its own volumes of sand could double or triple in the next five years, Reuters reported last week.In a report released Thursday, environmental groups and residents like Trinko said they are worried that expanding sand production will lead to increased health, air and water complications in communities near the mines. In Wisconsin and Minnesota, the states where most silica sand is produced, regulations are fairly lax for monitoring air pollution and water contamination at these sites, the groups said. Those states have more than 160 active fracking sand facilities combined, and another 20 projects are in the works.

Oil, gas emissions can create ‘extreme’ ozone pollution, study finds | Emissions wafting out of oil and gas operations can trigger “extreme” ozone pollution events that rival those seen in congested cities like Los Angeles, according to an international study. Extraordinary levels of ozone, which can exacerbate asthma and other respiratory problems, have been seen in rural areas of Utah and Wyoming where oil extraction and fracking have taken off. Scientists say the same phenomena may also be occurring near oil and fracking operations in Canada — especially in mountainous regions where winter weather can trap and concentrate the emissions emitted by wells and extraction processes. “I would expect any mountain basin that has oil and gas development in it and winter weather conditions to be subject to the same phenomenon,” Steven Brown, an atmospheric scientist at the U.S. National Oceanic and Atmospheric Administration, told Postmedia News.

Oil giant defends fracking - Radio New Zealand News - An energy industry conference in Auckland has heard a robust defence of fracking from the oil industry company Halliburton. Delegates have been told the process has strong economic benefits and can actually improve the environment. A pump jack and frack tanks in a field being developed for drilling in California.  The Australian manager of Halliburton, David Guglielmo, said today that many of the attacks on fracking were unsound. Fracking is a process of expanding cracks in the earth's crust to get to more oil and gas and this is sometimes charged with polluting underground water supplies. But Mr Guglielmo said more than one million wells fracked in the United States and 2.5 million fracked worldwide had not produced one confirmed case of water aquifer contamination.

Fracking trespass law changes move forward despite huge public opposition -- Fracking will take place below Britons’ homes without their permission after ministers rejected 40,000 objections to controversial changes to trespass laws. The UK government argued that the current ability for people to block shale gas development under their property would lead to significant delays and that the legal process by which companies can force fracking plans through was costly, time-consuming and disproportionate. There were a total of 40,647 responses to a consultation on the move to give oil and gas companies underground access without needing to seek landowners’ permission, with 99% opposing the legal changes. Setting aside the 28,821 responses submitted via two NGO campaigns, 92% of the remaining responses objected to the proposals. The government response to the consultation, published online on the eve of the parliamentary vote on military strikes against Islamic militants in Iraq, concluded: “Having carefully considered the consultation responses, we believe that the proposed policy remains the right approach to underground access and that no issues have been identified that would mean that our overall policy approach is not the best available solution.” New laws will now be passed giving automatic access for gas and oil development below 300m and a notification and compensation scheme will be run by the industry on a voluntary basis.

The Explosive Debate Over A New Natural Gas Pipeline Through The Northeast - Northeast Energy Direct has drawn critics from across the states it impacts, especially for its large size, which many say allows it to ship more gas into the Northeast than the region needs. The gas is slated for use in Northeastern states and the eastern provinces of Canada, but Kinder Morgan notes that “the ultimate destination of the gas is the purview of NED Project customers that subscribe to project capacity.”  The project is just one of several natural gas lines proposed in recent years as companies try to ramp up pipeline capacity to deal with the natural gas boom. But to residents whose property stands in the way of the proposed route — and for others in Massachusetts and New York who are concerned about the impact it may have on their states — the pipeline represents both the larger concerns that come along with America’s increasing focus on natural gas and the personal struggle to protect local land and quality of life.  “Before we sink more money in gas infrastructure, we have an obligation wherever possible to focus our investments on the clean technologies of the future — not the dirty fuels of the past — and to minimize the environmental impact of all our energy infrastructure projects,” Sen. Elizabeth Warren (D-MA) wrote in an op-ed in August. “We can do better — and we should.”

Dominion Cove Point LNG Terminal Wins Federal Approval - Dominion Resources Inc. (D:US) won final U.S. approval to export liquefied natural gas from an East Coast terminal it intends to place in a publicly traded partnership. The U.S. Federal Energy Regulatory Commission issued the permit for the Cove Point terminal in Maryland, according to a statement yesterday. Dominion has proposed a tax-advantaged master limited partnership, or MLP, to own the terminal and use proceeds from a planned initial public offering to help fund construction estimated to cost as much as $3.8 billion. Dominion, of Richmond, Virginia, is seeking to take advantage of a boom in U.S. natural gas production, driven by advances in drilling techniques including hydraulic fracturing, or fracking. Cove Point is scheduled to begin shipments from the 5.25 million tons a year capacity plant in 2017. The U.S. Energy Department has approved Cove Point’s exports to both free-trade and non-free trade agreement countries, according to FERC’s statement. Dominion expects to begin construction immediately upon FERC approval, Chief Financial Officer Mark McGettrick said at a Sept. 17 financial conference in New York. The partnership IPO also awaited FERC approval for the project, he said. Cove Point would be the nearest export terminal to the Marcellus Shale, the most productive U.S. natural gas deposit. Cheniere Energy Inc. (LNG:US)’s Sabine Pass and Sempra Energy (SRE:US)’s Cameron terminal in Louisiana are the only U.S. export projects so far to win approval from the FERC and Energy Department.

Final hurdle cleared for Marcellus gas exports - A federal regulatory agency has approved plans to ship Marcellus Shale gas from Pennsylvania overseas. The decision clears the way to begin converting a former import terminal in the Chesapeake Bay to export liquefied natural gas. Dominion Energy’s Cove Point plant can now move forward with plans to export more than 5 million metric tons of liquefied natural gas each year. Cove Point is the fourth export terminal approved by the Federal Energy Regulatory Commission, or FERC. It will be the first connected to the Marcellus Shale by pipeline. The switch from an idled import terminal to an export facility results from a domestic shale boom, and greater need for energy abroad. Dominion has agreements with energy companies in India and Japan to liquefy natural gas, and ship it overseas. The Japanese company, Sumitomo, made a deal with Cabot Oil and Gas last December to purchase 350,000 MMBtu per day of natural gas from Cabot’s Marcellus wells and send it through pipelines to plant on Maryland’s Eastern Shore. That agreement is to last 20 years, signaling how much gas Cabot has within its holdings in Northeast Pennsylvania. Figures released in August by Pennsylvania Department of Environmental Protection show Cabot’s wells to be some of the most productive in the state.

First East Coast Liquefied Natural Gas Export Terminal Approved On Chesapeake Bay -- On Monday, federal regulators approved construction of a liquefied natural gas (LNG) facility in Cove Point, Maryland. After two years of review and sustained pushback from concerned community members and environmental groups, the Federal Energy Regulatory Commission (FERC) gave Dominion Resources Inc. the go-ahead to begin construction as part of an existing LNG import facility in southern Maryland. The Richmond, Virginia-based company will now review the order, which includes 79 conditions the company must follow. In June, FERC had denied a request by several environmental groups and lawmakers to extend the comment period before making a decision.  The Cove Point LNG liquefaction and export project is the fourth LNG export terminal to receive approval in the U.S. to site, construct, and operate. It is the first such project on the east coast and the closest to the Appalachian-based Marcellus Shale, the largest natural gas producing region in the United States. The domestic shale gas boom, catalyzed by the proliferation of fracking, has increased natural gas supply and caused prices to drop. Until only a few years ago companies were looking to build LNG import, rather than export, terminals. The lay of the land has changed dramatically since then and Calvert County on the western shore of the Chesapeake Bay embodies this shift.

Feds Approve Cove Point Fracked Gas Export Facility  - Despite ongoing opposition from area residents, the Federal Energy Regulation Commission (FERC) has approved the conversion of the Dominion  Cove Point liquified natural gas (LNG) facility in southern Maryland from an import to an export facility. The decision also authorizes the installation of additional compression at Dominion’s Pleasant Valley Compressor Station and related facilities in Northern Virginia. This decision now allows the facility pipe fracked gas from across the region to the area, liquify it and to ship the LNG overseas to China and India. Opponents say this would encourage the spread of fracking and fueling climate change.  “FERC’s decision to allow LNG exports from Cove Point is fundamentally flawed because the agency failed to consider the simple fact that exporting LNG will mean more drilling and fracking, and that means more climate pollution, more risk of contaminated groundwater, and more threats to the health of people who live near gas wells,” said Deb Nardone, director of the Sierra Club’s Beyond Natural Gas campaign. “FERC should be standing up for the public good, not the interests of dirty polluters.”

Feds Promote Depletion of US Gas Reserves -- The US has never been a big exporter of oil and gas. Exportation implies that a county is a net producer of hydrocarbons – both oil and gas, which is not the case with the US, we’re a net consumer. Traditionally, the Texas Railroad Commission would limit supply (pumping) of oil to conserve the resource. The notion that it would be over-produced and to be exported overseas, except to our allies in time of war, was never a consideration – because that simply squanders the resource and increases the price domestically.  It has always been national policy to conserve domestic supplies – hence the naval oil stockpile in California, which was privatized. Now the Feds can’t wait to ship gas overseas. Not a good plan for the near term, since that simply drives up the cost of gas domestically, depletes the reserves and adds to pollution. And ruinous for the long term – both from a domestic energy policy perspective and from an environmental perspective. An all-round bad idea, brought to you by Obama & Hillary at the behest of the gas lobby on K Street. As noted by Rich Cowan below, this impact on domestic supply will be most acute on the east coast, where gas that would have been stored for winter use ends up on an LNG tanker bound for South America: The exports from Cove Point would take place in summer months. Traditionally those summer months are used to replenish natural gas reserves. If the gas does not go to replenish the storage caverns in the midwest, and instead goes to Brazil (Guanabara Bay LNG terminal), we will end up with a situation where gas in storage in the “East Region” is depleted.  It is irresponsible for the FERC to approve export when we are already running almost 300 million cubic feet (just for eastern US) below where we were at this time last year. The lack of gas in storage won’t affect the warm parts of the US much but it will be devastating to the midwest and the northeast, leading to gas prices that could be 50 to 100% higher for the 5 coldest months of the year than they would be otherwise.

In FERC's Approval of Gas Exports, Climate Effects Get Glossed Over -- Environmental and community groups on Tuesday assailed federal approval of the Cove Point liquefied natural gas export project, arguing that regulators glossed over the climate change consequences. They vowed to challenge the decision through a regulatory appeal or in the courts. "The groups that have been opposing this facility for more than a year have no intention of quitting and conceding this," said Mike Tidwell, director of the Chesapeake Climate Action Network, one of several nonprofit groups fighting the Lusby, Md. LNG project. "There are legal steps before us next."  The Federal Energy Regulatory Commission (FERC) approved the Cove Point LNG export project late Monday. It imposed 79 conditions on its construction that regulators said would mitigate potential adverse environmental impacts. Those conditions were based on an environmental assessment of the project, a less-rigorous review than what is called for in an environmental impact statement. FERC's action allows Dominion Cove Point to liquefy and export as much as 5.75 million metric tons of U.S. gas per year from the terminal. The commission said project owner Dominion Resources Inc. proposes to complete construction in time to begin exports in June 2017. In separate actions, the Department of Energy conditionally approved gas exports from the terminal to any country, providing there are no U.S. trade prohibitions.

A U-Turn for a Terminal Built in Texas to Import Natural Gas - The giant Golden Pass natural gas import terminal here, meant to bring Middle Eastern gas to energy-hungry Americans, sits eerily quiet these days, a sleepy museum to a bygone era.Its 5,000 valves, 50 million pounds of steel and ship berth as big as 77 football fields — representing a $2 billion investment by Qatar Petroleum, Exxon Mobil and Conoco Phillips — have been dormant for nearly three years. The unexpected American shale fracking frenzy produced such a glut of domestic gas that the United States does not need Qatari gas anymore.But the Golden Pass story is only beginning.Qatar Petroleum, the state oil company, is now requesting permission to export American gas, proposing with its partner Exxon Mobil an audacious conversion of the facility to export from import. The additional estimated cost: $10 billion, if not more. Conoco Phillips has bowed out of the export project, deciding not to double down. For Qatar Petroleum and Exxon Mobil, the retooled plan represents a grand improvisation and a plan to export a sizable share of the new American bonanza.

Oilprice Intelligence Report: Panama Canal Expansion to Grow LNG Trade: The U.S. is in a relatively strong position to take advantage of Asian demand for natural gas. There are now a total of three proposed export terminals for liquefied natural gas (LNG) in the U.S. that have achieved all the necessary permits. With full federal approval, political risk for LNG exports can be laid to rest. Now, the bigger challenge for LNG exporters is finding and securing a captive market for their product. In this regard, there is a lot to be excited about as well. But investing in U.S. LNG exporters is not without risks. For one, a rapid rise in demand for LNG in Asia is suddenly looking a bit less of a sure thing. That is largely due to China’s flagging growth rate. More importantly, American producers will face stiff competition from their Australian counterparts. A massive volume of liquefaction capacity is set to come online over the next several years. Australia is bringing online 62 million tonnes per year (mtpa) of LNG export capacity by 2018, which is a staggering figure considering the country only has 22.2 mtpa today. And they are much closer to the markets of China, Japan, and South Korea. That proximity lowers shipping costs, which may seem nominal considering the cost of production, liquefaction and regasification. But lower shipping costs could be just enough to make the difference in winning long-term contracts. Australia, therefore, is sitting in the best possible spot to serve the hungry consumers in East Asia.

Sumitomo’s US shale oil foray turns sour - Sumitomo Corp of Japan has drawn a line under its disastrous two-year foray into shale oil in the US, with writedowns connected to the project almost completely erasing its full-year earnings. On Monday, Sumitomo, the fourth biggest of Japan’s trading companies by market capitalization, said that an impairment loss of Y170bn ($1.6bn) on a “tight oil” project in west Texas would form the bulk of Y240bn of charges for the fiscal year to March 2015. It also flagged a Y30bn charge on coal-mining assets in Australia and a Y50bn impairment on an iron-ore mining project in Brazil. Combined, Sumitomo said the losses would cut its full-year profit forecast by 96 per cent, from a projected Y250bn to Y10bn. That would mark the 95-year-old company’s worst result since a Y23bn loss in the 1998 fiscal year, when it paid fines to atone for a copper-trading scandal that rocked world markets two years earlier. “Even by the standards of trading companies, this is not good,”

US Poised to Become World’s Leading Liquid Petroleum Producer -- The US is overtaking Saudi Arabia to become the world’s largest producer of liquid petroleum, in a sign of how its booming oil production has reshaped the energy sector. US production of oil and related liquids such as ethane and propane was neck-and-neck with Saudi Arabia in June and again in August at about 11.5m barrels a day, according to the International Energy Agency, the watchdog backed by rich countries.With US production continuing to boom, its output is set to exceed Saudi Arabia’s this month or next for the first time since 1991.Riyadh has stressed that the rise of the US should not detract from its own critical role in oil markets. It says it has the ability to increase its output by 2.5m b/d if needed to balance supply and demand.  Prince Abdulaziz Bin Salman Bin Abdulaziz, Saudi Arabia’s deputy oil minister, said earlier this month that the kingdom was the “only country with usable spare oil production capacity”.However, even Saudi officials do not deny that the rise of the US to become the world’s largest petroleum producer – with an even greater lead if its biofuel output of about 1m b/d is included – has played a vital role in stabilising markets. Brent crude hit its lowest level in more than two years last week at about $95.60 a barrel, down from a peak of over $125 a barrel early in 2012.

Questions mount about the safety of shipping North Dakota crude oil | Minnesota Public Radio News: Hundreds of rail cars filled with North Dakota crude oil pass through Minnesota each day. That reality has state and federal leaders worried about safety. Some — including Gov. Mark Dayton — argue oil companies should take steps to reduce the oil's volatility before loading it onto train cars. Proponents say that would minimize the chance for explosions if a train were to derail or crash. Dayton sent a letter to North Dakota's governor this week calling for stricter standards on the quality of oil shipped by rail. But industry reps say that simply isn't necessary — that their oil is safe to ship. MPR's Cathy Wurzer spoke with Chester Dawson, a senior correspondent at the Wall Street Journal, who has been covering this issue from North Dakota.

Fracked Oil Bomb Trains at Center of Federal Rules Debate -- The U.S. Department of Transportation (DOT) has just closed comments on its proposed new rules for tanker cars carrying explosive fracked oil. And while environmental and citizen groups say they don’t go far enough in protecting communities from potential disaster, the oil industry wants many more years to comply.  The need for new rules was driven home by the July 2013 disaster in Lac-Megantic, Quebec, when a failed braking system sent a train carrying fracked oil from North Dakota’s Bakken shale formation roaring into the heart of town where it derailed, exploded and killed 47 people. But it’s not the only recent accident involving railroad cars loaded with flammable oil or natural gas, and their numbers have increased as the amount shipped by rail has increased exponentially. In 2013, railroads carried more than 400,000 carloads of crude oil, up from 9,500 in 2008, when the fracking boom began. As shipments have increased, so have derailments and fires. Five occurred in 2013 and five have already occurred this year. In early May, a train derailment in Colorado spilled thousands of gallons of crude oil into groundwater, less than two weeks after a derailment in Lynchburg, Virginia spewed flames and thick black smoke into the air, poured oil into the James River and forced evacuations.

North Bay residents up in arms over TransCanada plan to switch crude oil for gas in local pipeline - “If something happens to Energy East here, if there is a spill, we’ll be ruined,” he says. “Who would want to come here then?” Somewhere near the escarpment and Trout Lake, there is a natural gas pipeline. It has been there for four decades, but has become a source of concern in this northeastern Ontario city. TransCanada Corp., the Alberta-based oil giant, wants to repurpose the pipeline, now carrying natural gas, to transport crude oil from Alberta’s oil sands to New Brunswick. Dubbed Energy East, the project is TransCanada’s $12-billion oil dream. If the company got the go-ahead, it would be the largest and longest oil pipeline in North America. And if North Bay had its way, that would never happen. Most of the city of 55,000 is united in its opposition to Energy East: the mayor, professors at local Nipissing University, farmers, landowners and, of course, environmentalists are worried about crude running so close to Trout Lake, the city’s only source of drinking water, and about the impact of a potential spill on the environment.

The Alberta Tar Sands -- (photos) Buried just beneath a layer of muskeg and forest in northern Alberta, Canada, lies a 50,000 square mile reservoir of heavy crude oil, possibly holding 2 trillion barrels of recoverable oil. These bitumen deposits require a lot of effort to extract, recover, and pre-process before the oil can be sent to conventional refineries. Most of the current extraction process takes place in open-pit mines, with massive machinery scraping up the tarry sandstone and moving it to facilities for processing. As the name "tar sands", or oil sands, implies, the heavy crude is found mixed in with sand, clay, and water, which must be removed, then the heavy crude must be "upgraded" to reduce viscosity and improve quality. Environmental activists have expressed concerns about the mining for years, citing destructive impacts on the land, the heavy carbon footprint of the laborious extraction and upgrade process, massive amounts of toxic byproducts, and studies that show oil sands crude emits more greenhouse gases than conventional crude oil. Oil companies continue to make efforts to reduce carbon emissions, manage toxic byproducts, and reclaim mined land, while ramping up production. The Alberta tar sands are currently producing around two million barrels of oil per day, with plans to increase that to nearly four million barrels per day by 2022. Reuters photographer Todd Korol recently traveled to Alberta to photograph some of the mines, facilities, and surrounding landscape. [26 photos]

‘Peak oil’ will return, just not how the energy worriers imagine -- As reporter Russell Gold points out in the WSJ today, US oil production began to rise in 2009 and continues to rise today thanks to the oil field innovation of hydraulic fracturing and horizontal drilling. Innovation met scarcity and innovation won. And there are more innovations on the way, according to Gold. But won’t we one day run out of oil? It’s not infinite, after all, right? Actually price and technological advances rather than petroleum supply is more likely to keep plenty of oil in the ground forever. Gold: Despite the abundance of oil that fracking has delivered, global oil prices remain high. This has kept the door wide open for alternative sources of energy and spending on energy efficiency. Natural gas has been grabbing market share from oil for years. A few decades ago, heating oil kept American homes snug; now it’s natural gas. And gas is making inroads in transportation—trucks and trains—as are electric cars.What’s more, climate change has altered the calculus. More advocates are pushing for alternative, low-carbon fuels to slow the rising level of carbon dioxide in the atmosphere. They argue that the possibility of running out of oil isn’t the only reason to reduce its use; in fact, they worry that the expansion of supply is dangerous, hindering efforts to take action on the long-term threat of climate change. "There will be peak oil, but it will be [because of] peak consumption,” says Michael Shellenberger, president of the Breakthrough Institute, an energy and climate think tank in Oakland, Calif. “What we all want is to move to better, cheaper and cleaner sources of energy.”

Drill Baby Drill! In the Philippines' Disputed Waters -  The mother of all "political risk"-laden investments is probably this one: Say a country embroiled in territorial disputes over potentially oil- and gas-rich waters auctions blocks for exploration. If you were an energy firm, would you dare bid and, more bravely, invest in disputed waters? Let's also add this complication: exploring these areas may anger the region's strongest power with its largest military. It's just asking for trouble, right? Better safe than sorry, eh? This situation is exactly what faces the Filipino-British concern Forum Energy PLC, whose chairman is one of the Philippines' savviest businesspersons, Manuel Pangilinan. After putting in a winning bid during auctions that most international energy majors stayed away from for reasons given above--offending China may not be a path to success in the 21st century world economy--Philex is being pressured by the Philippine government to commence with drilling. Earlier on, Pangilinan made a "conciliatory" gesture by offering joint exploration to China's CNOOC. Commercial prospects aside, the latter state-owned firm did not realistically consider this offer for the obvious reason that it would have lent legitimacy to the Philippines' ownership of these disputed areas in auctioning exploration rights:The 11-point proposal includes a Framework Agreement between Philex and CNOOC “relating to an area of mutual interest which will be defined as the area covered by SC 72.”“Other disputed areas (such as the Spratlys) could be included by agreement,” wrote Pangilinan. SC 72 refers to Service Contract 72, signed in 2010, in which the Philippine government awarded Forum Energy Plc. (FEP) exploration rights to a basin within Reed Bank. Philex owns 64.45 percent of FEP, a London-based listed oil and gas exploration firm focused on the Philippines. FEP in turn owns 70 percent of SC 72.

Russia Says Arctic Well Drilled With Exxon Strikes Oil -  Russia, viewed by the Obama administration as hostile to U.S. interests, has discovered what may prove to be a vast pool of oil in one of the world’s most remote places with the help of America’s largest energy company. Russia’s state-run OAO Rosneft said a well drilled in the Kara Sea region of the Arctic Ocean with Exxon Mobil Corp. struck oil, showing the region has the potential to become one of the world’s most important crude-producing areas. The announcement was made by Igor Sechin, Rosneft’s chief executive officer, who spent two days sailing on a Russian research ship to the drilling rig where the find was unveiled today. The well found about 1 billion barrels of oil and similar geology nearby means the surrounding area may hold more than the U.S. part of the Gulf or Mexico, he said. “It exceeded our expectations,” Sechin said in an interview. This discovery is of “exceptional significance in showing the presence of hydrocarbons in the Arctic.” The discovery sharpens the dispute between Russia and the U.S. over President Vladimir Putin’s actions in Ukraine. The well was drilled before the Oct. 10 deadline Exxon was granted by the U.S. government under sanctions barring American companies from working in Russia’s Arctic offshore. Rosneft and Exxon won’t be able to do more drilling, putting the exploration and development of the area on hold despite the find announced today.

Exxon Found Oil Trove In Russian Arctic Before Halting Work: Last week, the largest U.S. energy company, ExxonMobil, bowed to Western sanctions against Russia and withdrew from a joint venture with the Kremlin-owned oil giant Rosneft in the Russian Arctic, but not before it discovered what may be a vast amount of oil. Rosneft CEO Igor Sechin said Sept. 27 that the finding shows the Arctic Ocean’s Kara Sea north of Russia could become one of the world’s richest sources of crude oil. Before Exxon was forced to withdraw, he said a well containing around 1 billion barrels of oil was found. He added that neighboring geological formations may contain more oil than in the U.S.-controlled area of the Gulf of Mexico.  Sechin told Bloomberg News that the discovery “exceeded our expectations.” Exxon’s reaction was more measured. “We have encountered hydrocarbons, but it is premature to speculate on any potential outcome,” Alan Jeffers, an Exxon spokesman, told The Wall Street Journal. The European Union and United States have imposed economic sanctions on Russia for what they see as Moscow’s aggressive involvement in the affairs of neighboring Ukraine, unilaterally annexing the Crimean peninsula in March and reportedly providing support in personnel and equipment to Ukraine’s pro-Russian separatists. The sanctions forbid Western banks to provide long-term financing to Russian oil companies and bar the sale of Western technology to Russian firms. As a result, Rosneft and Exxon can conduct no further drilling, leaving development of the Kara Sea field in limbo.

Fossil Fuels Get Huge Master Limited Partnership Tax Breaks - “Green” Energy Shut Out - Since 2008, investors have poured several hundred billion dollars into fossil fuel-related master limited partnerships that shield income from virtually all corporate taxation. The MLP tax loophole — a sort of reverse carbon tax — has heavily subsidized the nation’s ongoing oil and natural gas fracking boom. Solar, wind and other renewable energy companies are not eligible for the MLP tax dodge. Although bipartisan support is building in Congress to extend the tax deductions to them, insiders say legislation to do so will most likely have to wait for and be a part of a comprehensive tax reform package, which has proven elusive. Until then, existing incentives will serve as a drag on the U.S. economy’s transition from fossil fuels to renewable energy sources. As long as Congress fails to act, fossil fuels will continue to exploit their government-approved competitive advantage even as mounting evidence shows their use accelerates global warming and prompts calls to tax carbon.  Even from a strictly financial perspective, tilting future U.S. taxpayer-funded energy subsidies toward fossil fuels might be a poor bet. Several major investment banks, including Morgan Stanley and Barclays, have warned that rapidly falling prices for renewable energy pose an existential threat to traditional electric utilities powered by coal, oil and natural gas.

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