There wasn't much fracking related news that got widespread coverage this week; there was some coverage of another study, this time from Stanford and Duke scientists, that showed that fracking wastewater cannot be treated by conventional wastewater treatment plants, and when it is, like they sometimes do in Pennsylvania, those disinfecting treatments that remove bacteria and similar organisms from water in those plants actually end up making the fracking wastewater more toxic, and unsafe for use downstream even when fracking wastewater is at concentrations of 0.01% of the total volume (1 part per ten thousand) of the water treated..
Ohio injection wells were in the news again this week; the Government Accountability Office released a report that cited Ohio as the only state that allows any and all unknown poisons to be disposed in its injection wells without so much even inquiring what might be going down there...obviously, this sets us up to get the worst of the worst poisons from everywhere; if anyone anywhere has a toxic liquid which they suspect wont pass muster for disposal in their own state, the logical choice would be to send it to Ohio...Ohio will take anything, no questions asked...
Also of interest locally, the West Virginia Division of Natural Resources opened bidding for fracking rights under the northernmost 22 miles of the Ohio River that border that state... this is the finger of West Virginia that is sandwiched between Ohio and Pennsylvania, and the part of the river that they'll be fracking is about 30 miles south of Poland Ohio, where the ODNR had to shut down fracking operations because they generated earthquakes...you'd think that with the experience West Virginia has with having toxic operations next to rivers they'd have learned their lesson, but no, here they go again....maybe the politicians in West Virginia have absorbed so many noxious chemicals over their lifetimes it's impacted their ability to think clearly...
Otherwise, there are several good articles near the end of this batch relating to the financing of marginal oil exploration....as i've pointed out previously, many of the fracking operations in this area are unprofitable, and now they're faced with lower oil prices and the prospect of higher interest rates as the Fed unwinds its monetary stimulus...whether the whole fracking expansion itself is a financial Ponzi scheme or not is debatable - they do produce a product - but it seems certain that if oil prices should fall to $80 a barrel and stay there for any length of time, a significant part of the fracking that's being done in the US will have to fold up its tent and go home...
Since a number of you were involved in the Peoples Climate March, I'm going to follow this mailing with my batch of climate related links from this past week, which includes some coverage of the climate march and the UN climate summit... I would otherwise just add it here, but the number of links is a criteria for some spam filters to flag a mailing, and these packages are already getting pretty unwieldy already.
Once again, we'll start with Ohio news & opinion...
We support the right to protect local water; yes on 7 - Athens NEWS - We support a "yes" vote on Issue 7 on the Athens city general election ballot Nov. 4. This ordinance, if passed, will seek to ban shale oil and gas drilling in the city, as well as related activities such as deep injection wells for fracking/drilling wastes. A local community should have the right to protect its air, water and quality of life against high-impact industrial activities. The fact that state law expressly says that Ohio cities and towns don't have this basic right is a scandal and disgrace.
Ohio Community Protests Fracking Wastewater Zoning: As natural gas production continues to spread across the country, some citizens are trying to fend off drilling rigs and waste sites in their backyards. While gas companies say they already face tough state regulations, that oversight doesn’t always ease residents’ fears. As Ohio quickly becomes a go-to destination for the nation's frackwaste, some people worry about earthquakes and water contamination, and argue the state has taken away their authority to decide whether oil and gas waste should be allowed in their backyards. Julie Grant reports for the public radio program the Allegheny Front, and has this story from a rural county that’s the biggest dumping ground in Ohio. [INDUSTRIAL NOISE] This is the sound of dirty water flowing from a big, industrial truck into storage tanks. We’re in the countryside in Portage County, Ohio, in the midst of cornfields and a horse farm. When you drive in further, you see the large green storage tanks, the pump house, and the wellhead. He’s just about unloaded there. See the hose shaking? That means that hundred barrel of water is in the system now. [INDUSTRIAL NOISE] Randy Ile operates this well for a Texas company, Stallion Oilfield Holdings. He says the water was trucked here from Pennsylvania. It’s wastewater from an oil and gas well.
Thirsty wells: Fracking consumes billions of gallons of water - Drillers in Ohio have used more than 4 billion gallons of water to frack horizontal shale wells since 2011. That’s a lot of water. Enough to fill one two-liter soda bottle for every person on the planet; or in terms that motorists in shale country can relate to, 800,000 tanker-loads of water. The state surpassed the thousand-well mark in August. A Repository review of water usage reported by drillers to FracFocus, a national fracking-chemical registry, as of Sept. 12, shows:
'Crippling penalties' urged for drillers hiding fracking chemical lists - Some big, diverse names are speaking out on proposed EPA rules that could require oil and gas drillers to disclose the chemicals they use in fracking. Comments from the New York Attorney General and commissioners in Portage County, Ohio, plea for federal regulation, while oilfield services giant Halliburton Co. and the governor of Wyoming want the EPA to butt out. The commenting deadline was Sept. 18. Drillers generally oppose such regulations. They say their mix of chemicals used to get gas and oil out of shale is a trade secret. Other groups are in favor, because when accidents happen it’s imperative to know what emergency responders are dealing with. Plus, nearby residents should know what’s being pumped beneath them. Rules differ by state, as I reported. At least 20 states have some sort of rule about chemical disclosure. Ohio requires companies to post chemicals concoctions to FracFocus, a website operated by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. Eighty-three percent of registered Ohio wells invoked an exemption based on trade-secret claims. Commissioners in Portage County, which is just west of some of the big Utica shale counties in eastern Ohio, say they’re concerned about nondisclosure. The county has 18 active underground injection wells and eight more permitted. Ohio hosts 205 injection wells, where drillers in the Utica and Marcellus shale plays dispose fracking-related waste. “In short, chemicals should be disclosed, completely, from cradle to grave. Regulations should be strict, and penalties should be crippling so that companies are brought into line as soon as possible,” the board recommended.
Learning from the Marcellus to drill the Utica: “They’re a village of about 2,000 people, and they get all of their drinking water from two public water supply wells.” Because of that concern, the Garrettsville board hired Mr. Dick, director of the Natural Gas and Water Resources Institute at Youngstown State University, to conduct a groundwater baseline study on about 20 wells in the surrounding area that supply water. The study was funded by tax dollars, Mr. Dick said. It began in 2012 and is ongoing. Mr. Dick monitors the well water twice a year, in spring and fall. So far his research has found traces of chemicals associated with conventional oil and gas activity in the groundwater such as chloride, barium and methane, but they are not above the maximum concentration limits imposed by the Ohio Environmental Protection Agency. “What we found was evidence that oil and gas wells, not Utica wells, may have leaked materials,” Mr. Dick said. Parts of eastern Ohio, including Portage County where Garrettsville is located, used to be hot spots for traditional drilling activity, which could explain the chemicals found in the water, Mr. Dick said. “In order to determine the exact cause of it, it would take considerably more effort, but we did determine there has been leakage,” he added.
Pa. system for tracking compliance at Marcellus Shale well sites in disrepair: Six years into the Marcellus Shale natural gas boom, the state Department of Environmental Protection’s online data on Pennsylvania well sites is a study in incomplete data and inaccurate information. The DEP acknowledges that the online Compliance Report, which was supposed to provide clear and accessible information on everything from spills to driller performance, is so error-ridden that it is virtually impossible to get an accurate picture of how drilling is being regulated. The Post-Gazette analyzed every paper record for every Marcellus well incident that resulted in fines through June 1, 2014, and compared those to the information on the online Compliance Report. It found vast discrepancies between the field reports of the incidents and the electronic accounting of them. Among the findings:
Scientists: Fracking Wastewater Poses Threat To Drinking Water - Every year, hundreds of billions of gallons of wastewater are produced by fracking operations across America. Some of that water gets stored in manmade ponds, some of it is injected underground, and some of it is treated and put back into rivers. For the people whose drinking water systems are downstream of those rivers, scientists have some bad news. New peer-reviewed research from Stanford and Duke University scientists shows that even when fracking wastewater goes through water treatment plants, and is disposed of in rivers that are not drinking water systems, the treated water still risks contaminating human drinking water. That’s because there are generally drinking water systems downstream of those rivers, and treatment plants aren’t doing a good job of removing contaminants called halides, which have the potential to harm human health. The scientists say halides — which are salts like bromide, chloride, and iodide — are often found in fracking wastewater, and the concern about them is that their presence in the water can promote the formation of something called “disinfection byproducts,” or DBPs. These chemicals — trihalomethanes,haloacetic acids, bromate, and chlorite — are formed when the disinfectants used in water treatment plants react with halides, according to the Environmental Protection Agency. Published in the journal Environmental Science and Technology and released by the American Chemical Society on Wednesday, the research showed that toxic compounds formed in water even when fracking wastewater made up only 0.01 to 0.1 percent of the waters’ volume. To prevent this from happening, the researchers recommended that fracking wastewater should not be discharged into surface waters, even when it is treated.
Frackers Rebranding Fracking - When a product or corporation takes a hit in public opinion, one of the steps that will be taken is to change their name or roll out a rebranding campaign. Led by their front group, the Marcellus Shale Coalition (MSC), frackers are rebranding fracking. Or to put it another way, they are putting a pretty red bow on a pile of poop. How much are they spending on this fracking rebranding campaign? They won’t say. It’s proprietary, hush hush, in the same fashion as the super-double secret ingredients in the chemicals used in fracking.With the blessings of the Heritage Foundation, a right wing think tank, the fracking ad campaign feature actors , including a little girl, saying “ Fracking’s a good word,” “Fracking Rocks” and “Fracking: Rock Solid for PA.” The astroturf industry group, United Shale Advocates has the ad up on their youtube channel titled Rock Solid Facts. Not surprising, the ad is a rerun of the same pile of talking point poop the industry has been promoting all along.A few years ago, the industry shied away from the word “Fracking.” They thought it was obscene. People agreed, fracking is obscene.Today they are embracing the obscene word as much as they have embraced the obscene practice of drilling, fracking and extraction of fossil fuels, while neglecting to mention the consequences this has on real people.
Facing tough budget picture, West Virginia to let companies frack under Ohio River — Facing another tough budget scenario, West Virginia is ready to let companies drill for oil and natural gas deep beneath 14 miles of the Ohio River. On Friday, state commerce officials opened bids to drill under the northern West Virginia section of the river, which serves as a natural border with Ohio. Officials said other river tracts could be next, and a wildlife management area is under consideration. Leasing state land for a drilling technique called hydraulic fracturing, commonly called fracking, is a new venture for West Virginia, and could produce plenty of money during uncertain budget times. A bid by Triad Hunter, for instance, would yield the state $17.8 million up front for a five-year lease, plus 18 percent in royalties from what's extracted. "It creates what could be a substantial revenue stream at a time when budgets are very tight," said state Commerce Secretary Keith Burdette. The state used $100 million from its Rainy Day Fund to balance this year's budget, and Gov. Earl Ray Tomblin's administration expects to need another $100 million to help shore up next year's budget.
West Virginia DNR opens bids for oil and gas drilling rights under Ohio River - The West Virginia Department of Commerce opened four bids Sept. 26 for period for drilling rights on state-owned land under 22 miles of the Ohio River in Pleasants, Marshall and Wetzel counties. The Division of Natural Resources, which is under the Department of Commerce, opened the bidding period on Aug. 13, and required a minimum bid of at least 20 percent worth of production royalties and a per-acre least payment. The Department received a bid for drilling rights from river mile markers 106 to 116 in Marshall County for a 20 percent royalty payment and $211.11 per acre cash bonus from Houston-based Noble Energy; a bid for rights from mile 124 to 125 in Wetzel County for a 20 percent royalty payment and $8,125 per acre cash bonus from Houston-based Statoil USA Onshore Properties; a bid for rights from mile markers 108 to 116 in Marshall County, 121 to 125 in Wetzel County, and 145-147 in Pleasants and Tyler counties for a royalty payment of about 18 percent and a $7,100 per acre cash bonus from Marietta, Ohio-based Triad Hunter LLC; and a bid for rights under mile markers 121 to 123 in Marshall and Wetzel counties for a 20 percent royalty payment and $3,500 per acre cash bonus from Gastar Exploration, which is also based in Houston. Although DNR required a minimum 20 percent royalty payment, Josh. Jarrell, the Department's deputy secretary and general counsel, said he wouldn't yet “disqualify” Triad Hunter for choosing a royalty payment of less than 20 percent. “We're going evaluate everything,” Jarrell said, adding that the team choosing the winner will be “examining to determine the highest competitive, responsible bid.”
Four Bids Submitted to Drill for Oil and Natural Gas Under Ohio River - Four bids are in and the Department of Natural Resources is reviewing them to see who will be fracking in the Ohio River. People appear to be split on Governor Earl Ray Tomblin's plan. While some believe that it could be damaging to the environment, others think it'll be great for the economy. Governor Tomblin believes West Virginia should continue to capitalize on the benefits of its natural resources, even if that means drilling in the river. According to the West Virginia Department of Commerce, frackers will give the state at least 20 percent worth of production royalties. "This is step one of a much larger process, obviously; we own the mineral rights, we manage those mineral rights. This isn't even the first drill, mineral, along the Ohio River, under the Ohio River," West Virginia Commerce Secretary Keith Burdette said. The plan would affect 22 miles under the Ohio River, going through Marshall, Wetzel and Pleasants Counties. Burdette said they're not at the permitting process just yet. "We do not issue permits, so this is not the permitting process. This will be regulated by the Department of Environmental Protection as they do all other drilling; they'll have to make sure that the permit meets all the safety requirements of the law."
For Oil and Gas Companies, Rigging Seems to Involve Wages, Too - A ProPublica review of U.S. Department of Labor investigations shows that oil and gas workers – men and women often performing high-risk jobs – are routinely being underpaid, and the companies hiring them often are using accounting techniques to deny workers benefits such as medical leave or unemployment insurance. The DOL investigations have centered on what is known as worker "misclassification," an accounting gambit whereby companies treat full time employees as independent contractors paid hourly wages, and then fail to make good on their obligations. The technique, investigators and experts say, has become ever more common as small companies seek to gain contracts in an intensely competitive market by holding labor costs down. In the complex, rapidly expanding oil and gas industry, much of the day to day work done on oil rigs and gas wells is sub-contracted out to smaller companies. For instance, on one gas rig alone, the operator might hire one company to construct the well pad, another to drill the well, a third company to provide hydraulic fracking services and yet another to truck water and chemicals for disposal. As of August this year, the DOL has conducted 435 investigations resulting in over $13 million in back wages found due for more than 9,100 workers. ProPublica obtained data for 350 of those cases from the agency. In over a fifth of the investigations, companies in violation paid more than $10,000 in back wages.
ProPublica: Oil, gas workers underpaid for high-risk jobs - A ProPublica review of U.S. Department of Labor investigations has found that oil and gas workers are routinely being underpaid for their high-risk jobs and often denied benefits such as medical leave or unemployment insurance, Naveena Sadasivam writes.. The DOL investigations have centered on worker "misclassification," an accounting gambit whereby companies treat full-time employees as independent contractors paid hourly wages, and then fail to make good on their obligations. The technique has become ever more common as small companies seek to gain contracts in an intensely competitive market by holding labor costs down. Sadasivam goes on to note: Over the last decade, the oil and gas industry has seen tremendous growth, even as average employment in all U.S. industries has fallen. At the same time, the industry has seen an increase in fatalities and injuries on the job -- risks often associated with inadequate training or overworked laborers. As of August this year, the DOL has conducted 435 investigations resulting in over $13 million in back wages found due for more than 9,100 workers in the fracking industry and its related industries. Labor lawyers specializing in wage disputes say the governing law -- the Fair Labor Standards Act -- is not easy to understand, interpret and comply with. As a result, they say employers can be unintentionally violating wage laws. But several investigations by the DOL show there are companies willfully dodging their responsibilities as well.
Living Death: The Real Costs of Fracking - The first animal to die wasn't a horse, but a young, beloved boxer named Mr. Higgins. A veterinarian diagnosed kidney failure. One of Mr. Higgins' lymph nodes was enlarged; a New York State veterinarian named Michelle Bamberger, who was interviewing Pennsylvania residents for a book she was writing with Cornell University molecular medicine professor Robert Oswald, advised a needle biopsy to rule out lymphoma (common in this breed). The needle biopsy was never done - even though Josie brought Mr. Higgins to a specialty clinic, she "declined further diagnostics and opted for euthanasia," not being able to bear watching him suffer any longer. Next in the death march was a horse named Amy, pronounced healthy by a veterinarian several months after Mr. Higgins died, but who, a few weeks after that, stopped eating, lost weight and appeared to lose her balance and coordination. A vet came to treat Amy for what he assumed was a neurological disease (equine protozoal myeloencephalitis) and took blood for testing. Two days later Amy's back legs became so weak she couldn't stand. She sank in her stall and began convulsing. Again distraught, Josie had Amy euthanized. The blood results indicated liver failure due to toxicity - the vet suspected poisoning from heavy metals (these are present in fracking wastewater) - but the illness was never diagnosed. Josie couldn't afford the necropsy and further testing that might have concluded the diagnosis. Moreover, representatives of the drilling company came soon after the euthanasia and offered a "neighborly thing": carting Amy's body off to be incinerated.
Shale gas extraction issues go beyond fracking: Ask oil and gas industry advocates, environmentalists and regulators about the biggest issues facing shale gas development, and none are likely to cite the possibility of fracking fluids traveling up thousands of feet of rock into groundwater aquifers as their top concern. There’s surface spills, transportation accidents, leaks in holding tanks and impoundments — all of these have much more potential to pollute groundwater. Yet blaming — or exonerating — fracking for this method of groundwater pollution seems to lead reports of new shale studies, even if those studies say little about actual fracking. “Faulty well integrity, not hydraulic fracturing deep underground, is the primary cause of drinking water contamination from shale gas extraction in parts of Pennsylvania and Texas, according to a new study by researchers from five universities,” began a press release last week from Duke University, former home of Rob Jackson, one of the scientists involved in the study. The study, one of several for Mr. Jackson dealing with groundwater contamination from shale development, used noble gases and more traditional gas fingerprinting techniques to trace the origin and pathways of methane traveling into groundwater. It suggested that leaks in either the steel pipes that carry gas to the surface or in the cement that envelopes those pipes allowed methane to escape into shallower depths, causing changes to well water supplies in Pennsylvania and Texas. The study did not examine whether the pressure exerted on the well’s layers during hydraulic fracturing contributed to or caused the casing to become compromised.
Frack Spill du Jour - The good news:
(1) The two spill sites impacted a small creek (Little Mingo Creek) which does not flow into the scenic Mingo Creek passing through Mingo Park.
(2) Bentonite clay (at least by itself) is basically considered ‘non-toxic.’
The bad news:
Fracking's environmental impacts scrutinized —Greenhouse gas emissions from the production and use of shale gas would be comparable to conventional natural gas, but the controversial energy source actually faired better than renewables on some environmental impacts, according to new research. The UK holds enough shale gas to supply its entire gas demand for 470 years, promising to solve the country's energy crisis and end its reliance on fossil-fuel imports from unstable markets. But for many, including climate scientists and environmental groups, shale gas exploitation is viewed as environmentally dangerous and would result in the UK reneging on its greenhouse gas reduction obligations under the Climate Change Act. University of Manchester scientists have now conducted one of the most thorough examinations of the likely environmental impacts of shale gas exploitation in the UK in a bid to inform the debate. Their research has just been published in the leading academic journal Applied Energy and study lead author, Professor Adisa Azapagic, will outline the findings at the Labour Party Conference in Manchester on Monday (22 September). "While exploration is currently ongoing in the UK, commercial extraction of shale gas has not yet begun, yet its potential has stirred controversy over its environmental impacts, its safety and the difficulty of justifying its use to a nation conscious of climate change."
With 38% of Global Shale Gas Located in Regions of Water Stress, More Oversight of Fracking is Urgently Needed -- As more data emerge, shale gas increasingly appears to be in the cross-hairs of the water-energy nexus, and far too little is being done to defuse impending conflicts. While hydraulic fracturing (or “fracking”), the process used to unleash natural gas from shale deposits, has raised serious concerns about groundwater contamination, less attention has been given to the added competition for limited water supplies the process can bring. Each fracking well can require up to 25 million liters (6.6 million gallons) of water. A new study by the World Resources Institute (WRI), a research group based in Washington, DC, attempts to fill this knowledge gap by overlaying known recoverable resources, or “plays,” of shale gas onto maps of water stress. The results raise concerns. The WRI team found that 38% of shale gas resources worldwide reside in areas that are either naturally arid, and so have limited water overall, or in areas with high to extremely high levels of water stress, which means that competition for water is already keen if not intense. With some 386 million people living atop these shale-gas regions and agriculture the dominant water user in 40 percent of them, the stage is set for rising tensions as shale gas production competes with farmers and city dwellers for limited water. Of the 20 countries with the largest shale gas resources believed to be technically recoverable, 8 are either in arid zones or already face high water-stress in the regions where those resources are located: Algeria, China, Egypt, India, Libya, Mexico, Pakistan and South Africa.
Is the Shale Revolution a ‘Ponzi Scheme’ or the End of Peak Oil? -- A lot of folks are fervently forecasting that shale gas and oil production is a bubble about to pop, possibly producing an economic collapse similar to the one in 2008. Earlier this week, the left-leaning Center for Research on Globalization in Montreal dismissed the shale revolution as a “Ponzi scheme” and “this decade’s version of the Dotcom bubble.” In a column last year for The Guardian, Nafeez Ahmed of the Institute for Policy Research and Development cited studies predicting that U.S. shale gas production will likely peak in 2015 and oil production in 2017. A month later, Richard Heinberg of the Post Carbon Institute said, “It turns out there are only a few ‘plays’ or geological formations in the US from which shale gas is being produced; in virtually all of them, except the Marcellus (in Pennsylvania and West Virginia), production rates are already either in plateau or decline.” So was President Barack Obama wrong in 2012, when he claimed, “We have a supply of natural gas that can last America nearly 100 years”? Perhaps not. The renaissance of oil and gas production in the United States has largely been the result of applying the technique of hydraulic fracturing (fracking), which releases vast quantities of hydrocarbons trapped in tight shale formations. The bubble theorists make much of the fact that production tends to drop more rapidly in fracked wells than in conventional ones, forcing the frackers to drill more holes just to keep up. They overlook the fact that drillers are working ever faster and cheaper and that newer wells tend to be more productive than earlier wells. So what about Heinberg’s claim that “production rates are already either in plateau or decline”? He’s just wrong. The September drilling productivity report from the federal Energy Information Administration (EIA) notes that since 2013, that gas production is up in every one of the “plays” cited by Heinberg. Production in the Bakken region of North Dakota grew 8 percent; the Eagle Ford, Permian, and Haynesville regions in Texas increased 15, 7, and 97 percent, respectively; the Niobrara region in Wyoming and Colorado rose by 29 percent; and the Utica and Marcellus regions in Ohio, Pennsylvania, and West Virginia surged 142 and 47 percent.
Shale Revolution Deniers Face An Inconvenient Truth - Despite turning the U.S. into the world’s largest producer of natural gas and driving a 3 million barrel per day surge in U.S. oil production in just the last three years, the shale revolution still has its doubters. They couldn’t be more wrong. Time and again over decades, the naysayers and “peak oil” advocates have grossly underestimated the energy industry’s ability to innovate and beat production forecasts. Today’s shale pessimists continue to do so. There are two important reasons why the shale pessimists are wrong: innovation and expertise. The shale revolution was launched because of breakthroughs in a range of technologies, most notably advances in horizontal drilling paired with advanced hydraulic fracturing. Competition and innovation drive the oil and gas industry, particularly in the U.S. The innovation that unlocked the nation’s oceans of shale resources hasn’t stopped but instead has actually intensified. New ideas, technologies and ways of cracking the shale code emerge daily. And America’s amazing “petropreneurs” have obviously gotten very good at what they do.Crews are working more efficiently, bringing wells online in shorter periods and producing more oil and gas from each new well. Consider Arkansas’ Fayetteville Shale, where the average drilling time for a new well has fallen from 17.5 days in 2007 to just 6.2 days in 2013. In the Marcellus Shale, America’s largest single shale gas field, each well is producing eight million cubic feet of gas per day on average — more than eight times what each well produced as recently as 2009.
Fracked Up: Don't Believe In Miracles -- There is no doubt that fracking stopped the long-term decline in U.S. oil output. Since the all-time low output in 2006, daily oil production has increased by 30%. Natural gas production has soared even higher, but seems to have leveled off. Ignoring the environmental impacts of fracking, just the economics alone show that shale oil and gas are not the miracle that will save us from the perils of peak cheap oil. Fracking extraction of oil is extremely expensive. If oil prices were to fall to $80 per barrel, there would be no profits for frackers. They would stop drilling wells. So don’t plan on ever paying less than $3 per gallon for gasoline ever again. Don’t believe in miracles.
How Rising Interest Rates Could Spell the End of the U.S. Energy Boom: The winding down of extraordinary measures taken by the U.S. Federal Reserve to ameliorate the effects of the financial crisis could reverberate through energy markets. The Fed has kept short-term interest rates near zero for several years, a target that the institution hoped would spur lending and kick start the moribund economy in 2009. With job growth anemic for half a decade after the crash, the Fed has maintained its monetary stimulus right up until today. But with the economy on more solid footing, the Fed is preparing to wind down its stimulus, known as “quantitative easing.” And although details are murky, the Fed will likely decide to raise interest rates sometime in 2015. So what does this have to do with energy? The oil and gas industry is extremely capital intensive, with billions of dollars required in some cases to pull hydrocarbons from the ground. That means that companies need to sell a lot of debt to financial markets, and use the cash to bring projects online. But if interest rates rise, it will significantly raise borrowing costs for oil and gas operators. And the repercussions will amount to a double whammy. First, increasing interest rates should strengthen the U.S. dollar relative to other currencies. Higher interest rates makes holding dollars more attractive, which increases demand for the currency. Why does that matter? Oil is priced in dollars, so a stronger dollar pushes down oil prices, along with other commodities priced in dollars. Lower oil prices mean lower revenues for oil companies. Second, higher interest rates will make debt more expensive. Yields on corporate debt will rise as the Fed targets higher interest rates, making it more expensive to take out a loan to drill an oil well.
UK Government Says Never Mind What People Want, Let’s Frack -- Following a nearly three-month public comment period in which more than 90 percent of the comments were opposed, the UK government announced it will go ahead with a plan to allow fracking beneath homes without the owners’ permission. Current rules allow homeowners to block shale gas projects. The government says the legal process to force them to allow them so is too time-consuming and expensive. The Guardian of London reported that of the 40,647 responses received, 99 percent opposed the plan. Removing 28,821 responses submitted by two environmental group campaigns, 92 percent opposed it.“The majority of respondents included campaign text opposing hydraulic fracturing and/or the proposed change to underground access legislation and did not specifically address the questions to the consultation,” the government websitesaid. “We acknowledge the large number of responses against the proposal and the fact that the proposal has provided an opportunity for the public to voice their concerns and raise issues. However the role of the consultation was to seek arguments and evidence to consider in developing the proposed policy. Whilst a wide range of arguments were raised and points covered, we did not identify any issues that persuaded us to change the basic form of the proposals.” So they didn’t.
Look out below: Danger lurks underground from aging gas pipes: About every other day over the past decade, a gas leak in the United States has destroyed property, hurt someone or killed someone, a USA TODAY Network investigation finds. The most destructive blasts have killed at least 135 people, injured 600 and caused $2 billion in damages since 2004. The death toll includes:
Top Pittsburgh emergency response official talks about risks of crude oil trains -- Emergency response officials are currently assessing the risks that trains carrying millions of gallons of highly combustible crude oil pose to residents in Southwestern Pennsylvania. Raymond DeMichiei (Dee-Mi-Shay), deputy director of Pittsburgh’s Office of Emergency Management and Homeland Security, is overseeing that appraisal. “We don’t want people to have a false sense of security,” he said. “Yes, there is a risk. [But] we’re managing the risk.” Trains carrying crude snake through Pittsburgh and the region on their way from North Dakota’s Bakken Shale fields to refineries in Philadelphia and other East Coast cities. Pittsburgh landmarks that could be in the line of fire if a train exploded, he said, are all of downtown, Heinz Field, PNC Park and the CONSOL Energy Center. All are within a half mile of rail lines that carry crude oil, said DeMichiei. A half mile on each side of railroad tracks is the federally recommended evacuation zone if a crude-oil train fire occurs.
Oil Producers Say Oil Train Safety Rules Wouldn’t Make Oil Trains Safer -- North Dakota oil producers aren’t happy about new regulations that could force them to make their crude oil less volatile before they load it onto trains, claiming that the regulations won’t actually make shipping oil any safer. As the AP reports, North Dakota is considering implementing new regulations aimed at reducing the volatility of crude oil by removing specific gases and liquids from the oil. The regulations would require oil recovered from North Dakota’s Bakken region to be refined further before being shipped, in an attempt to reduce the chance of the oil catching fire or causing an explosion if the train it’s being carried in derails. But some oil producers in the state don’t think these new precautions are necessary.“To date, no evidence has been presented to suggest that measurable safety improvements would result from processes beyond current oil conditioning,” Hess Corp. spokesman Brent Lohnes told the AP.Kari Cutting, vice president of the North Dakota Petroleum Council, which represents more than 500 companies involved with North Dakota’s oil industry, also tried to downplay crude’s volatility. Several major train accidents have occurred in the last few years, including the disastrous derailment in Lac-Mégantic, Quebec, that killed 47 people. Cutting said the crude oil in the railcars “was not the cause” of these accidents. “Requiring stabilization beyond current conditioning practices would be a costly, redundant process that would not yield any additional safety benefits,” Cutting said.
Why so much oil from the fracking boom is moving by high-risk rail -- Rail shipments of U.S. crude oil produced in the fracking zones rose by 2,400 percent from 2008 to 2012, according to a report issued Monday by the Government Accountability Office — a period when oil production from the shale and sandstone formations, though booming, increased by less than sixfold. Main reason: Pipeline construction lagged far, far behind the surging production of both oil and natural gas, because investment in U.S. infrastructure for transporting, processing and storing both oil and natural gas went up just 60 percent in the same five-year period, with new pipelines accounting for only a piece of that. Main result: More deaths and injuries past and future, because rail shipping is inherently more prone to these than pipeline transport. Also, a much higher risk of catastrophe as oil-laden "unit trains" of 80 to 120 tank cars move through the nation's largest, densest metropolitan areas, including the Twin Cities. (More oil is moving by truck and barge as well.) It is difficult, for some reason, to clearly attribute injuries and fatalities to rail shipments of oil and gas versus other cargo. However, GAO's auditors found that from 2007 to 2011,Fatalities averaged about 14 per year for all pipeline incidents reported to the [Pipeline and Hazardous Materials Safety Administration, part of the U.S. Department of Transportation], including an average of about 2 fatalities per year resulting from incidents on hazardous liquid and natural gas transmission pipelines.
Why It Matters That Statoil Just Shelved Its Multi-Billion-Dollar Tar Sands Project -- In what’s being hailed as a huge win for environmentalists, Norwegian oil company Statoil announced on Thursday that it would postpone a planned multi-billion dollar tar sands oil development project in Fort McMurray, Alberta, for at least three years. The major project, when completed, was supposed to produce 40,000 barrels of Canadian tar sands, or oil sands, crude oil every day. Statoil is putting the project on hold for a few reasons, but the most notable is the company’s assertion that there is “limited pipeline access” for the oil. In other words, Statoil is not sure there is enough pipeline capacity for it to actually get the oil out of northern Canada. According to Reuters, Statoil is the first company to explicitly cite pipeline access as a reason for delaying or cancelling a project. For environmentalists and advocates opposed to the controversial Keystone XL pipeline, this decision is huge. A group of six environmental organizations including the Sierra Club and 350.org are calling it “tangible proof” that strong, coordinated opposition to big pipeline projects like Keystone XL “lead to real reductions in tar sands investment and associated carbon pollution.”
Could Low Oil Prices Point To A Debt Bubble Collapse?: Oil and other commodity prices have recently been dropping. Is this good news, or bad?I would argue that falling commodity prices are bad news. It likely means that the debt bubble which has been holding up the world economy for a very long–since World War II, at least–is failing to expand sufficiently. If the debt bubble collapses, we will be in huge difficulty. Many people have the impression that falling oil prices mean that the cost of production is falling, and thus that the feared “peak oil” is far in the distance. This is not the correct interpretation, especially when many types of commodities are decreasing in price at the same time. When prices are set in a world market, the big issue is affordability. Even if food, oil and coal are close to necessities, consumers can’t pay more than they can afford. A person can tell from Figure 1 that since the first part of 2011, the prices of Brent oil, Australian coal, and food have been trending downward. This drop in prices continues into September. For example, as I write this, Brent oil price is $97.70, while the average price for the latest month shown (August) is $105.27. It is this steeper, recent drop, which many are concerned about.We are dealing with several confusing issues. Let me try to explain some of them. Issue #1: Over the short term, commodity prices don’t reflect the cost of extraction; they reflect what buyers can afford. Oil prices are set on a worldwide basis. The cost of extraction varies around the world. So it is clear that oil prices will not match the cost of extraction, or the cost of extraction plus a reasonable profit, for any particular producer.
Peak Oil: Are We In The Eye Of The Storm? - Ten years ago peak oil was assumed to be a rather straightforward, transparent process. What was then thought of as “oil” production was going to stop growing around the middle of the last decade. Shortages were going to occur; prices were going to rise; demand was going to drop; economies would falter; and eventually a major economic depression was going to occur. Fortunately or not, depending on your point of view, the last ten years have turned out to a lot more complicated than expected. Production of what is now known as “conventional” oil did indeed peak back around 2005, and many of the phenomena that were expected to result did occur and continue to this day. Oil prices have climbed several-fold from where they were in the early years of the last decade – surging upwards from $20 a barrel to circa $100. This rapid jump in energy costs did slow many nations’ economies, cut oil consumption, and with some other factors set off a “great” recession. The high selling price per barrel, coupled with cheap money, led to a boom in U.S. oil production where fortuitous geological conditions in North Dakota and South Texas allowed the production of shale oil at money-making prices, provided oil prices stay high. What is so interesting about all this is that a temporary surge in what was heretofore a little-known source of oil in the U.S. is masking the larger story of what is taking place in the global oil situation. The simple answer is that except for the U.S. shale oil surge, almost no increase in oil production is taking place around the world. No other country as yet has gotten significant amounts of shale oil or gas into production. Russia’s conventional oil production seems to be peaking at present, and its Arctic oil production is still many years, or perhaps even decades, away. Brazilian production is going nowhere at the minute, deepwater production in the Gulf of Mexico is stagnating, and the Middle East is busy killing itself. On top of all this, global demand for oil continues to increase by some million b/d each year – most of which is going to Asia.
Thirsty wells: Fracking consumes billions of gallons of water - Drillers in Ohio have used more than 4 billion gallons of water to frack horizontal shale wells since 2011. That’s a lot of water. Enough to fill one two-liter soda bottle for every person on the planet; or in terms that motorists in shale country can relate to, 800,000 tanker-loads of water. The state surpassed the thousand-well mark in August. A Repository review of water usage reported by drillers to FracFocus, a national fracking-chemical registry, as of Sept. 12, shows:
- • Of the first 1,031 Utica and Marcellus shale wells drilled, FracFocus listed the amount of water used to frack 662.
- • Water use for all 1,031 wells could approach 6.7 billion gallons, based on average water-use rates per county.
- • Chesapeake Energy used 2 billion gallons on 411 reported wells.
- • Three wells in Ohio topped 17 million gallons.
- • Average water usage was 6.1 million gallons.
- • Fracking could consume more than 10 billion gallons of water if all current well permits are drilled.
- • Some wells used more water than what drillers estimated on permit applications.
'Crippling penalties' urged for drillers hiding fracking chemical lists - Some big, diverse names are speaking out on proposed EPA rules that could require oil and gas drillers to disclose the chemicals they use in fracking. Comments from the New York Attorney General and commissioners in Portage County, Ohio, plea for federal regulation, while oilfield services giant Halliburton Co. and the governor of Wyoming want the EPA to butt out. The commenting deadline was Sept. 18. Drillers generally oppose such regulations. They say their mix of chemicals used to get gas and oil out of shale is a trade secret. Other groups are in favor, because when accidents happen it’s imperative to know what emergency responders are dealing with. Plus, nearby residents should know what’s being pumped beneath them. Rules differ by state, as I reported. At least 20 states have some sort of rule about chemical disclosure. Ohio requires companies to post chemicals concoctions to FracFocus, a website operated by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. Eighty-three percent of registered Ohio wells invoked an exemption based on trade-secret claims. Commissioners in Portage County, which is just west of some of the big Utica shale counties in eastern Ohio, say they’re concerned about nondisclosure. The county has 18 active underground injection wells and eight more permitted. Ohio hosts 205 injection wells, where drillers in the Utica and Marcellus shale plays dispose fracking-related waste. “In short, chemicals should be disclosed, completely, from cradle to grave. Regulations should be strict, and penalties should be crippling so that companies are brought into line as soon as possible,” the board recommended.
Learning from the Marcellus to drill the Utica: “They’re a village of about 2,000 people, and they get all of their drinking water from two public water supply wells.” Because of that concern, the Garrettsville board hired Mr. Dick, director of the Natural Gas and Water Resources Institute at Youngstown State University, to conduct a groundwater baseline study on about 20 wells in the surrounding area that supply water. The study was funded by tax dollars, Mr. Dick said. It began in 2012 and is ongoing. Mr. Dick monitors the well water twice a year, in spring and fall. So far his research has found traces of chemicals associated with conventional oil and gas activity in the groundwater such as chloride, barium and methane, but they are not above the maximum concentration limits imposed by the Ohio Environmental Protection Agency. “What we found was evidence that oil and gas wells, not Utica wells, may have leaked materials,” Mr. Dick said. Parts of eastern Ohio, including Portage County where Garrettsville is located, used to be hot spots for traditional drilling activity, which could explain the chemicals found in the water, Mr. Dick said. “In order to determine the exact cause of it, it would take considerably more effort, but we did determine there has been leakage,” he added.
Pa. system for tracking compliance at Marcellus Shale well sites in disrepair: Six years into the Marcellus Shale natural gas boom, the state Department of Environmental Protection’s online data on Pennsylvania well sites is a study in incomplete data and inaccurate information. The DEP acknowledges that the online Compliance Report, which was supposed to provide clear and accessible information on everything from spills to driller performance, is so error-ridden that it is virtually impossible to get an accurate picture of how drilling is being regulated. The Post-Gazette analyzed every paper record for every Marcellus well incident that resulted in fines through June 1, 2014, and compared those to the information on the online Compliance Report. It found vast discrepancies between the field reports of the incidents and the electronic accounting of them. Among the findings:
- • Of the 568 incidents at a Marcellus well that resulted in a fine, only 380 are listed online.
- • Of those 380 listed incidents, a comparison with paper records showed that in 48 cases at least one violation was obscured because a generic code was used, in 44 cases an incorrect code was used, and in 102 cases at least one violation was completely dropped.
- • In all, 256 violations were dropped. For example, in a Washington County case, Rice Energy was fined $85,000 for 10 violations, but the online record showed only one violation.
- • Of the 188 fines not found online, 172 were for less serious administrative violations of filing late well records (149) and failing to obtain a state permit (23). Sixteen were for spills, sediment-laden water running off a site, or other potentially serious incidents that could directly impact the environment.
Scientists: Fracking Wastewater Poses Threat To Drinking Water - Every year, hundreds of billions of gallons of wastewater are produced by fracking operations across America. Some of that water gets stored in manmade ponds, some of it is injected underground, and some of it is treated and put back into rivers. For the people whose drinking water systems are downstream of those rivers, scientists have some bad news. New peer-reviewed research from Stanford and Duke University scientists shows that even when fracking wastewater goes through water treatment plants, and is disposed of in rivers that are not drinking water systems, the treated water still risks contaminating human drinking water. That’s because there are generally drinking water systems downstream of those rivers, and treatment plants aren’t doing a good job of removing contaminants called halides, which have the potential to harm human health. The scientists say halides — which are salts like bromide, chloride, and iodide — are often found in fracking wastewater, and the concern about them is that their presence in the water can promote the formation of something called “disinfection byproducts,” or DBPs. These chemicals — trihalomethanes,haloacetic acids, bromate, and chlorite — are formed when the disinfectants used in water treatment plants react with halides, according to the Environmental Protection Agency. Published in the journal Environmental Science and Technology and released by the American Chemical Society on Wednesday, the research showed that toxic compounds formed in water even when fracking wastewater made up only 0.01 to 0.1 percent of the waters’ volume. To prevent this from happening, the researchers recommended that fracking wastewater should not be discharged into surface waters, even when it is treated.
Frackers Rebranding Fracking - When a product or corporation takes a hit in public opinion, one of the steps that will be taken is to change their name or roll out a rebranding campaign. Led by their front group, the Marcellus Shale Coalition (MSC), frackers are rebranding fracking. Or to put it another way, they are putting a pretty red bow on a pile of poop. How much are they spending on this fracking rebranding campaign? They won’t say. It’s proprietary, hush hush, in the same fashion as the super-double secret ingredients in the chemicals used in fracking.With the blessings of the Heritage Foundation, a right wing think tank, the fracking ad campaign feature actors , including a little girl, saying “ Fracking’s a good word,” “Fracking Rocks” and “Fracking: Rock Solid for PA.” The astroturf industry group, United Shale Advocates has the ad up on their youtube channel titled Rock Solid Facts. Not surprising, the ad is a rerun of the same pile of talking point poop the industry has been promoting all along.A few years ago, the industry shied away from the word “Fracking.” They thought it was obscene. People agreed, fracking is obscene.Today they are embracing the obscene word as much as they have embraced the obscene practice of drilling, fracking and extraction of fossil fuels, while neglecting to mention the consequences this has on real people.
Facing tough budget picture, West Virginia to let companies frack under Ohio River — Facing another tough budget scenario, West Virginia is ready to let companies drill for oil and natural gas deep beneath 14 miles of the Ohio River. On Friday, state commerce officials opened bids to drill under the northern West Virginia section of the river, which serves as a natural border with Ohio. Officials said other river tracts could be next, and a wildlife management area is under consideration. Leasing state land for a drilling technique called hydraulic fracturing, commonly called fracking, is a new venture for West Virginia, and could produce plenty of money during uncertain budget times. A bid by Triad Hunter, for instance, would yield the state $17.8 million up front for a five-year lease, plus 18 percent in royalties from what's extracted. "It creates what could be a substantial revenue stream at a time when budgets are very tight," said state Commerce Secretary Keith Burdette. The state used $100 million from its Rainy Day Fund to balance this year's budget, and Gov. Earl Ray Tomblin's administration expects to need another $100 million to help shore up next year's budget.
West Virginia DNR opens bids for oil and gas drilling rights under Ohio River - The West Virginia Department of Commerce opened four bids Sept. 26 for period for drilling rights on state-owned land under 22 miles of the Ohio River in Pleasants, Marshall and Wetzel counties. The Division of Natural Resources, which is under the Department of Commerce, opened the bidding period on Aug. 13, and required a minimum bid of at least 20 percent worth of production royalties and a per-acre least payment. The Department received a bid for drilling rights from river mile markers 106 to 116 in Marshall County for a 20 percent royalty payment and $211.11 per acre cash bonus from Houston-based Noble Energy; a bid for rights from mile 124 to 125 in Wetzel County for a 20 percent royalty payment and $8,125 per acre cash bonus from Houston-based Statoil USA Onshore Properties; a bid for rights from mile markers 108 to 116 in Marshall County, 121 to 125 in Wetzel County, and 145-147 in Pleasants and Tyler counties for a royalty payment of about 18 percent and a $7,100 per acre cash bonus from Marietta, Ohio-based Triad Hunter LLC; and a bid for rights under mile markers 121 to 123 in Marshall and Wetzel counties for a 20 percent royalty payment and $3,500 per acre cash bonus from Gastar Exploration, which is also based in Houston. Although DNR required a minimum 20 percent royalty payment, Josh. Jarrell, the Department's deputy secretary and general counsel, said he wouldn't yet “disqualify” Triad Hunter for choosing a royalty payment of less than 20 percent. “We're going evaluate everything,” Jarrell said, adding that the team choosing the winner will be “examining to determine the highest competitive, responsible bid.”
Four Bids Submitted to Drill for Oil and Natural Gas Under Ohio River - Four bids are in and the Department of Natural Resources is reviewing them to see who will be fracking in the Ohio River. People appear to be split on Governor Earl Ray Tomblin's plan. While some believe that it could be damaging to the environment, others think it'll be great for the economy. Governor Tomblin believes West Virginia should continue to capitalize on the benefits of its natural resources, even if that means drilling in the river. According to the West Virginia Department of Commerce, frackers will give the state at least 20 percent worth of production royalties. "This is step one of a much larger process, obviously; we own the mineral rights, we manage those mineral rights. This isn't even the first drill, mineral, along the Ohio River, under the Ohio River," West Virginia Commerce Secretary Keith Burdette said. The plan would affect 22 miles under the Ohio River, going through Marshall, Wetzel and Pleasants Counties. Burdette said they're not at the permitting process just yet. "We do not issue permits, so this is not the permitting process. This will be regulated by the Department of Environmental Protection as they do all other drilling; they'll have to make sure that the permit meets all the safety requirements of the law."
For Oil and Gas Companies, Rigging Seems to Involve Wages, Too - A ProPublica review of U.S. Department of Labor investigations shows that oil and gas workers – men and women often performing high-risk jobs – are routinely being underpaid, and the companies hiring them often are using accounting techniques to deny workers benefits such as medical leave or unemployment insurance. The DOL investigations have centered on what is known as worker "misclassification," an accounting gambit whereby companies treat full time employees as independent contractors paid hourly wages, and then fail to make good on their obligations. The technique, investigators and experts say, has become ever more common as small companies seek to gain contracts in an intensely competitive market by holding labor costs down. In the complex, rapidly expanding oil and gas industry, much of the day to day work done on oil rigs and gas wells is sub-contracted out to smaller companies. For instance, on one gas rig alone, the operator might hire one company to construct the well pad, another to drill the well, a third company to provide hydraulic fracking services and yet another to truck water and chemicals for disposal. As of August this year, the DOL has conducted 435 investigations resulting in over $13 million in back wages found due for more than 9,100 workers. ProPublica obtained data for 350 of those cases from the agency. In over a fifth of the investigations, companies in violation paid more than $10,000 in back wages.
ProPublica: Oil, gas workers underpaid for high-risk jobs - A ProPublica review of U.S. Department of Labor investigations has found that oil and gas workers are routinely being underpaid for their high-risk jobs and often denied benefits such as medical leave or unemployment insurance, Naveena Sadasivam writes.. The DOL investigations have centered on worker "misclassification," an accounting gambit whereby companies treat full-time employees as independent contractors paid hourly wages, and then fail to make good on their obligations. The technique has become ever more common as small companies seek to gain contracts in an intensely competitive market by holding labor costs down. Sadasivam goes on to note: Over the last decade, the oil and gas industry has seen tremendous growth, even as average employment in all U.S. industries has fallen. At the same time, the industry has seen an increase in fatalities and injuries on the job -- risks often associated with inadequate training or overworked laborers. As of August this year, the DOL has conducted 435 investigations resulting in over $13 million in back wages found due for more than 9,100 workers in the fracking industry and its related industries. Labor lawyers specializing in wage disputes say the governing law -- the Fair Labor Standards Act -- is not easy to understand, interpret and comply with. As a result, they say employers can be unintentionally violating wage laws. But several investigations by the DOL show there are companies willfully dodging their responsibilities as well.
Living Death: The Real Costs of Fracking - The first animal to die wasn't a horse, but a young, beloved boxer named Mr. Higgins. A veterinarian diagnosed kidney failure. One of Mr. Higgins' lymph nodes was enlarged; a New York State veterinarian named Michelle Bamberger, who was interviewing Pennsylvania residents for a book she was writing with Cornell University molecular medicine professor Robert Oswald, advised a needle biopsy to rule out lymphoma (common in this breed). The needle biopsy was never done - even though Josie brought Mr. Higgins to a specialty clinic, she "declined further diagnostics and opted for euthanasia," not being able to bear watching him suffer any longer. Next in the death march was a horse named Amy, pronounced healthy by a veterinarian several months after Mr. Higgins died, but who, a few weeks after that, stopped eating, lost weight and appeared to lose her balance and coordination. A vet came to treat Amy for what he assumed was a neurological disease (equine protozoal myeloencephalitis) and took blood for testing. Two days later Amy's back legs became so weak she couldn't stand. She sank in her stall and began convulsing. Again distraught, Josie had Amy euthanized. The blood results indicated liver failure due to toxicity - the vet suspected poisoning from heavy metals (these are present in fracking wastewater) - but the illness was never diagnosed. Josie couldn't afford the necropsy and further testing that might have concluded the diagnosis. Moreover, representatives of the drilling company came soon after the euthanasia and offered a "neighborly thing": carting Amy's body off to be incinerated.
Shale gas extraction issues go beyond fracking: Ask oil and gas industry advocates, environmentalists and regulators about the biggest issues facing shale gas development, and none are likely to cite the possibility of fracking fluids traveling up thousands of feet of rock into groundwater aquifers as their top concern. There’s surface spills, transportation accidents, leaks in holding tanks and impoundments — all of these have much more potential to pollute groundwater. Yet blaming — or exonerating — fracking for this method of groundwater pollution seems to lead reports of new shale studies, even if those studies say little about actual fracking. “Faulty well integrity, not hydraulic fracturing deep underground, is the primary cause of drinking water contamination from shale gas extraction in parts of Pennsylvania and Texas, according to a new study by researchers from five universities,” began a press release last week from Duke University, former home of Rob Jackson, one of the scientists involved in the study. The study, one of several for Mr. Jackson dealing with groundwater contamination from shale development, used noble gases and more traditional gas fingerprinting techniques to trace the origin and pathways of methane traveling into groundwater. It suggested that leaks in either the steel pipes that carry gas to the surface or in the cement that envelopes those pipes allowed methane to escape into shallower depths, causing changes to well water supplies in Pennsylvania and Texas. The study did not examine whether the pressure exerted on the well’s layers during hydraulic fracturing contributed to or caused the casing to become compromised.
Frack Spill du Jour - The good news:
(1) The two spill sites impacted a small creek (Little Mingo Creek) which does not flow into the scenic Mingo Creek passing through Mingo Park.
(2) Bentonite clay (at least by itself) is basically considered ‘non-toxic.’
The bad news:
- Bentonite is a very fine gray clay which has serious impacts on aquatic life. “When released in large amounts it can coat the bottom of a stream, smothering spawning gravels and killing the insects on which fish feed. Even diluted amounts of bentonite in a stream are a considerable risk to the function of an ecosystem. The ecological ramifications of a bentonite spill are NOT minor and may affect aquatic ecology far downstream from the spill site.”
- Several miles of small streams and creeks were impacted, so Sunoco Logistics’ subcontractor Precision Pipeline was hosing out 2 miles of the most impacted creek beds.
- This sort of spill has occurred multiple times in our county over the past few years, and with pipeline construction still ramping up, more impacts to creeks are a near certainty.
- Video of Scene: http://youtu.be/BnTnyVgCHIE
Fracking's environmental impacts scrutinized —Greenhouse gas emissions from the production and use of shale gas would be comparable to conventional natural gas, but the controversial energy source actually faired better than renewables on some environmental impacts, according to new research. The UK holds enough shale gas to supply its entire gas demand for 470 years, promising to solve the country's energy crisis and end its reliance on fossil-fuel imports from unstable markets. But for many, including climate scientists and environmental groups, shale gas exploitation is viewed as environmentally dangerous and would result in the UK reneging on its greenhouse gas reduction obligations under the Climate Change Act. University of Manchester scientists have now conducted one of the most thorough examinations of the likely environmental impacts of shale gas exploitation in the UK in a bid to inform the debate. Their research has just been published in the leading academic journal Applied Energy and study lead author, Professor Adisa Azapagic, will outline the findings at the Labour Party Conference in Manchester on Monday (22 September). "While exploration is currently ongoing in the UK, commercial extraction of shale gas has not yet begun, yet its potential has stirred controversy over its environmental impacts, its safety and the difficulty of justifying its use to a nation conscious of climate change."
With 38% of Global Shale Gas Located in Regions of Water Stress, More Oversight of Fracking is Urgently Needed -- As more data emerge, shale gas increasingly appears to be in the cross-hairs of the water-energy nexus, and far too little is being done to defuse impending conflicts. While hydraulic fracturing (or “fracking”), the process used to unleash natural gas from shale deposits, has raised serious concerns about groundwater contamination, less attention has been given to the added competition for limited water supplies the process can bring. Each fracking well can require up to 25 million liters (6.6 million gallons) of water. A new study by the World Resources Institute (WRI), a research group based in Washington, DC, attempts to fill this knowledge gap by overlaying known recoverable resources, or “plays,” of shale gas onto maps of water stress. The results raise concerns. The WRI team found that 38% of shale gas resources worldwide reside in areas that are either naturally arid, and so have limited water overall, or in areas with high to extremely high levels of water stress, which means that competition for water is already keen if not intense. With some 386 million people living atop these shale-gas regions and agriculture the dominant water user in 40 percent of them, the stage is set for rising tensions as shale gas production competes with farmers and city dwellers for limited water. Of the 20 countries with the largest shale gas resources believed to be technically recoverable, 8 are either in arid zones or already face high water-stress in the regions where those resources are located: Algeria, China, Egypt, India, Libya, Mexico, Pakistan and South Africa.
Is the Shale Revolution a ‘Ponzi Scheme’ or the End of Peak Oil? -- A lot of folks are fervently forecasting that shale gas and oil production is a bubble about to pop, possibly producing an economic collapse similar to the one in 2008. Earlier this week, the left-leaning Center for Research on Globalization in Montreal dismissed the shale revolution as a “Ponzi scheme” and “this decade’s version of the Dotcom bubble.” In a column last year for The Guardian, Nafeez Ahmed of the Institute for Policy Research and Development cited studies predicting that U.S. shale gas production will likely peak in 2015 and oil production in 2017. A month later, Richard Heinberg of the Post Carbon Institute said, “It turns out there are only a few ‘plays’ or geological formations in the US from which shale gas is being produced; in virtually all of them, except the Marcellus (in Pennsylvania and West Virginia), production rates are already either in plateau or decline.” So was President Barack Obama wrong in 2012, when he claimed, “We have a supply of natural gas that can last America nearly 100 years”? Perhaps not. The renaissance of oil and gas production in the United States has largely been the result of applying the technique of hydraulic fracturing (fracking), which releases vast quantities of hydrocarbons trapped in tight shale formations. The bubble theorists make much of the fact that production tends to drop more rapidly in fracked wells than in conventional ones, forcing the frackers to drill more holes just to keep up. They overlook the fact that drillers are working ever faster and cheaper and that newer wells tend to be more productive than earlier wells. So what about Heinberg’s claim that “production rates are already either in plateau or decline”? He’s just wrong. The September drilling productivity report from the federal Energy Information Administration (EIA) notes that since 2013, that gas production is up in every one of the “plays” cited by Heinberg. Production in the Bakken region of North Dakota grew 8 percent; the Eagle Ford, Permian, and Haynesville regions in Texas increased 15, 7, and 97 percent, respectively; the Niobrara region in Wyoming and Colorado rose by 29 percent; and the Utica and Marcellus regions in Ohio, Pennsylvania, and West Virginia surged 142 and 47 percent.
Shale Revolution Deniers Face An Inconvenient Truth - Despite turning the U.S. into the world’s largest producer of natural gas and driving a 3 million barrel per day surge in U.S. oil production in just the last three years, the shale revolution still has its doubters. They couldn’t be more wrong. Time and again over decades, the naysayers and “peak oil” advocates have grossly underestimated the energy industry’s ability to innovate and beat production forecasts. Today’s shale pessimists continue to do so. There are two important reasons why the shale pessimists are wrong: innovation and expertise. The shale revolution was launched because of breakthroughs in a range of technologies, most notably advances in horizontal drilling paired with advanced hydraulic fracturing. Competition and innovation drive the oil and gas industry, particularly in the U.S. The innovation that unlocked the nation’s oceans of shale resources hasn’t stopped but instead has actually intensified. New ideas, technologies and ways of cracking the shale code emerge daily. And America’s amazing “petropreneurs” have obviously gotten very good at what they do.Crews are working more efficiently, bringing wells online in shorter periods and producing more oil and gas from each new well. Consider Arkansas’ Fayetteville Shale, where the average drilling time for a new well has fallen from 17.5 days in 2007 to just 6.2 days in 2013. In the Marcellus Shale, America’s largest single shale gas field, each well is producing eight million cubic feet of gas per day on average — more than eight times what each well produced as recently as 2009.
Fracked Up: Don't Believe In Miracles -- There is no doubt that fracking stopped the long-term decline in U.S. oil output. Since the all-time low output in 2006, daily oil production has increased by 30%. Natural gas production has soared even higher, but seems to have leveled off. Ignoring the environmental impacts of fracking, just the economics alone show that shale oil and gas are not the miracle that will save us from the perils of peak cheap oil. Fracking extraction of oil is extremely expensive. If oil prices were to fall to $80 per barrel, there would be no profits for frackers. They would stop drilling wells. So don’t plan on ever paying less than $3 per gallon for gasoline ever again. Don’t believe in miracles.
How Rising Interest Rates Could Spell the End of the U.S. Energy Boom: The winding down of extraordinary measures taken by the U.S. Federal Reserve to ameliorate the effects of the financial crisis could reverberate through energy markets. The Fed has kept short-term interest rates near zero for several years, a target that the institution hoped would spur lending and kick start the moribund economy in 2009. With job growth anemic for half a decade after the crash, the Fed has maintained its monetary stimulus right up until today. But with the economy on more solid footing, the Fed is preparing to wind down its stimulus, known as “quantitative easing.” And although details are murky, the Fed will likely decide to raise interest rates sometime in 2015. So what does this have to do with energy? The oil and gas industry is extremely capital intensive, with billions of dollars required in some cases to pull hydrocarbons from the ground. That means that companies need to sell a lot of debt to financial markets, and use the cash to bring projects online. But if interest rates rise, it will significantly raise borrowing costs for oil and gas operators. And the repercussions will amount to a double whammy. First, increasing interest rates should strengthen the U.S. dollar relative to other currencies. Higher interest rates makes holding dollars more attractive, which increases demand for the currency. Why does that matter? Oil is priced in dollars, so a stronger dollar pushes down oil prices, along with other commodities priced in dollars. Lower oil prices mean lower revenues for oil companies. Second, higher interest rates will make debt more expensive. Yields on corporate debt will rise as the Fed targets higher interest rates, making it more expensive to take out a loan to drill an oil well.
UK Government Says Never Mind What People Want, Let’s Frack -- Following a nearly three-month public comment period in which more than 90 percent of the comments were opposed, the UK government announced it will go ahead with a plan to allow fracking beneath homes without the owners’ permission. Current rules allow homeowners to block shale gas projects. The government says the legal process to force them to allow them so is too time-consuming and expensive. The Guardian of London reported that of the 40,647 responses received, 99 percent opposed the plan. Removing 28,821 responses submitted by two environmental group campaigns, 92 percent opposed it.“The majority of respondents included campaign text opposing hydraulic fracturing and/or the proposed change to underground access legislation and did not specifically address the questions to the consultation,” the government websitesaid. “We acknowledge the large number of responses against the proposal and the fact that the proposal has provided an opportunity for the public to voice their concerns and raise issues. However the role of the consultation was to seek arguments and evidence to consider in developing the proposed policy. Whilst a wide range of arguments were raised and points covered, we did not identify any issues that persuaded us to change the basic form of the proposals.” So they didn’t.
Look out below: Danger lurks underground from aging gas pipes: About every other day over the past decade, a gas leak in the United States has destroyed property, hurt someone or killed someone, a USA TODAY Network investigation finds. The most destructive blasts have killed at least 135 people, injured 600 and caused $2 billion in damages since 2004. The death toll includes:
- • The explosion that leveled part of a New York City block in East Harlem in March, killing eight and injuring 48 more.
- • A blast that flattened the concrete floors of an apartment building in Birmingham, Ala., killing one woman in December.
- • A flash fireball in 2012 that left an Austin man dead, a scarred foundation where his house once stood and debris strewn across yards of his neighbors.
Top Pittsburgh emergency response official talks about risks of crude oil trains -- Emergency response officials are currently assessing the risks that trains carrying millions of gallons of highly combustible crude oil pose to residents in Southwestern Pennsylvania. Raymond DeMichiei (Dee-Mi-Shay), deputy director of Pittsburgh’s Office of Emergency Management and Homeland Security, is overseeing that appraisal. “We don’t want people to have a false sense of security,” he said. “Yes, there is a risk. [But] we’re managing the risk.” Trains carrying crude snake through Pittsburgh and the region on their way from North Dakota’s Bakken Shale fields to refineries in Philadelphia and other East Coast cities. Pittsburgh landmarks that could be in the line of fire if a train exploded, he said, are all of downtown, Heinz Field, PNC Park and the CONSOL Energy Center. All are within a half mile of rail lines that carry crude oil, said DeMichiei. A half mile on each side of railroad tracks is the federally recommended evacuation zone if a crude-oil train fire occurs.
Oil Producers Say Oil Train Safety Rules Wouldn’t Make Oil Trains Safer -- North Dakota oil producers aren’t happy about new regulations that could force them to make their crude oil less volatile before they load it onto trains, claiming that the regulations won’t actually make shipping oil any safer. As the AP reports, North Dakota is considering implementing new regulations aimed at reducing the volatility of crude oil by removing specific gases and liquids from the oil. The regulations would require oil recovered from North Dakota’s Bakken region to be refined further before being shipped, in an attempt to reduce the chance of the oil catching fire or causing an explosion if the train it’s being carried in derails. But some oil producers in the state don’t think these new precautions are necessary.“To date, no evidence has been presented to suggest that measurable safety improvements would result from processes beyond current oil conditioning,” Hess Corp. spokesman Brent Lohnes told the AP.Kari Cutting, vice president of the North Dakota Petroleum Council, which represents more than 500 companies involved with North Dakota’s oil industry, also tried to downplay crude’s volatility. Several major train accidents have occurred in the last few years, including the disastrous derailment in Lac-Mégantic, Quebec, that killed 47 people. Cutting said the crude oil in the railcars “was not the cause” of these accidents. “Requiring stabilization beyond current conditioning practices would be a costly, redundant process that would not yield any additional safety benefits,” Cutting said.
Why so much oil from the fracking boom is moving by high-risk rail -- Rail shipments of U.S. crude oil produced in the fracking zones rose by 2,400 percent from 2008 to 2012, according to a report issued Monday by the Government Accountability Office — a period when oil production from the shale and sandstone formations, though booming, increased by less than sixfold. Main reason: Pipeline construction lagged far, far behind the surging production of both oil and natural gas, because investment in U.S. infrastructure for transporting, processing and storing both oil and natural gas went up just 60 percent in the same five-year period, with new pipelines accounting for only a piece of that. Main result: More deaths and injuries past and future, because rail shipping is inherently more prone to these than pipeline transport. Also, a much higher risk of catastrophe as oil-laden "unit trains" of 80 to 120 tank cars move through the nation's largest, densest metropolitan areas, including the Twin Cities. (More oil is moving by truck and barge as well.) It is difficult, for some reason, to clearly attribute injuries and fatalities to rail shipments of oil and gas versus other cargo. However, GAO's auditors found that from 2007 to 2011,Fatalities averaged about 14 per year for all pipeline incidents reported to the [Pipeline and Hazardous Materials Safety Administration, part of the U.S. Department of Transportation], including an average of about 2 fatalities per year resulting from incidents on hazardous liquid and natural gas transmission pipelines.
Why It Matters That Statoil Just Shelved Its Multi-Billion-Dollar Tar Sands Project -- In what’s being hailed as a huge win for environmentalists, Norwegian oil company Statoil announced on Thursday that it would postpone a planned multi-billion dollar tar sands oil development project in Fort McMurray, Alberta, for at least three years. The major project, when completed, was supposed to produce 40,000 barrels of Canadian tar sands, or oil sands, crude oil every day. Statoil is putting the project on hold for a few reasons, but the most notable is the company’s assertion that there is “limited pipeline access” for the oil. In other words, Statoil is not sure there is enough pipeline capacity for it to actually get the oil out of northern Canada. According to Reuters, Statoil is the first company to explicitly cite pipeline access as a reason for delaying or cancelling a project. For environmentalists and advocates opposed to the controversial Keystone XL pipeline, this decision is huge. A group of six environmental organizations including the Sierra Club and 350.org are calling it “tangible proof” that strong, coordinated opposition to big pipeline projects like Keystone XL “lead to real reductions in tar sands investment and associated carbon pollution.”
Could Low Oil Prices Point To A Debt Bubble Collapse?: Oil and other commodity prices have recently been dropping. Is this good news, or bad?I would argue that falling commodity prices are bad news. It likely means that the debt bubble which has been holding up the world economy for a very long–since World War II, at least–is failing to expand sufficiently. If the debt bubble collapses, we will be in huge difficulty. Many people have the impression that falling oil prices mean that the cost of production is falling, and thus that the feared “peak oil” is far in the distance. This is not the correct interpretation, especially when many types of commodities are decreasing in price at the same time. When prices are set in a world market, the big issue is affordability. Even if food, oil and coal are close to necessities, consumers can’t pay more than they can afford. A person can tell from Figure 1 that since the first part of 2011, the prices of Brent oil, Australian coal, and food have been trending downward. This drop in prices continues into September. For example, as I write this, Brent oil price is $97.70, while the average price for the latest month shown (August) is $105.27. It is this steeper, recent drop, which many are concerned about.We are dealing with several confusing issues. Let me try to explain some of them. Issue #1: Over the short term, commodity prices don’t reflect the cost of extraction; they reflect what buyers can afford. Oil prices are set on a worldwide basis. The cost of extraction varies around the world. So it is clear that oil prices will not match the cost of extraction, or the cost of extraction plus a reasonable profit, for any particular producer.
Peak Oil: Are We In The Eye Of The Storm? - Ten years ago peak oil was assumed to be a rather straightforward, transparent process. What was then thought of as “oil” production was going to stop growing around the middle of the last decade. Shortages were going to occur; prices were going to rise; demand was going to drop; economies would falter; and eventually a major economic depression was going to occur. Fortunately or not, depending on your point of view, the last ten years have turned out to a lot more complicated than expected. Production of what is now known as “conventional” oil did indeed peak back around 2005, and many of the phenomena that were expected to result did occur and continue to this day. Oil prices have climbed several-fold from where they were in the early years of the last decade – surging upwards from $20 a barrel to circa $100. This rapid jump in energy costs did slow many nations’ economies, cut oil consumption, and with some other factors set off a “great” recession. The high selling price per barrel, coupled with cheap money, led to a boom in U.S. oil production where fortuitous geological conditions in North Dakota and South Texas allowed the production of shale oil at money-making prices, provided oil prices stay high. What is so interesting about all this is that a temporary surge in what was heretofore a little-known source of oil in the U.S. is masking the larger story of what is taking place in the global oil situation. The simple answer is that except for the U.S. shale oil surge, almost no increase in oil production is taking place around the world. No other country as yet has gotten significant amounts of shale oil or gas into production. Russia’s conventional oil production seems to be peaking at present, and its Arctic oil production is still many years, or perhaps even decades, away. Brazilian production is going nowhere at the minute, deepwater production in the Gulf of Mexico is stagnating, and the Middle East is busy killing itself. On top of all this, global demand for oil continues to increase by some million b/d each year – most of which is going to Asia.
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