Chesapeake Energy Corporation announced yesterday that it plans to reorganize its Charleston, West Virginia office from a regional corporate headquarters to a regional field office. It plans on moving to Oklahoma City or eliminating approximately 215 of the 255 Charleston-based positions, leaving only 40 positions in Charleston. A copy of the press release can be found here.
NiSource Gas Transmission & Storage (NGT&S) announced today that it would be cutting approximately 370 to 380 positions in 2009. A copy of the press release can be found here.
NGT&S companies include Columbia Gas Transmission, LLC, Columbia Gulf Transmission Co., and Crossroads Pipeline.
According to this article in the Register-Guard, a Florida contractor has been ordered to pay $1.5 million in penalties due to violations of the Clean Water Act while constructing a 60-mile natural gas pipeline in 2003. It goes on to note that penalties were imposed for dirt and sediment discharges to streams and wetlands and despite little evidence of serious environmental harm. A cautionary tale.
The Washington Post is reporting that Interior Secretary, Ken Salazar, has decided to scrap oil-shale development leases on federal land in Colorado, Utah and Wyoming. Good thing oil prices are down.
Something to watch for - The Governor of West Virginia has proposed tax changes of fairly limited benefit for the oil and natural gas industry according to this report from MSN.
This report from the Houston Chronicle discusses how major oil and gas company executives are lobbying Congress and the Obama administration to expand offshore drilling even as renewable and alternative energy sources are being encouraged.
From the NYT: "Despite appearances to the contrary, the economic stimulus bill does not require states to 'decouple' utility revenues from energy consumption, a key House Democrat said today." The article goes on to explain that decoupling is a utility rate-making mechanism that separates revenues from consumption to give utilities an incentive to support energy efficiency programs. It also describes legislation recently introduced into Congress that would create an energy efficiency standard for electricity and natural gas savings to be achieved through utility efficiency programs, building codes, and other measures.
According to MSNBC, a report released today by PricewaterhouseCoopers, LLP, finds that global oil and gas deal values declined dramatically in 2008 as the financial crisis intensified and economic conditions deteriorated.
Yesterday the United States Supreme Court heard oral arguments in Burlington Northern and Santa Fe Railway Company v. U.S. At issue is whether manufacturers of hazardous substances can be held liable for contamination that occurs after the manufacturer's product is sold. Also at issue is apportionment of liability. The Supreme Court's decision will be much anticipated.
Good news for the PA DEP. The potential economic benefits from natural gas drilling in the Marcellus Shale apparently outweigh the hiring freeze imposed by the Governor on state agencies that he oversees, according to this article from The Patriot-News. Looks like the Department of Environmental Protection may hire 31 workers and open an oil and gas management office in Williamsport to address increased drilling activity in the shale.
Interior Secretary, Ken Salazar, recently said that the new Administration will push an energy plan that includes a wide range of energy resources, including solar, wind, geothermal, oil and gas, and potentially oil shale, according to this report from the Salt Lake Tribune. Good to keep all options on the table.
According to this press release, Senator Carl Levin (D-MI) introduced legislation today to address speculation and price manipulation in U.S. energy and agricultural markets. Similar to legislation introduced last year, under the new Administration and Congress it may stand a better chance of becoming law.
At a meeting between President Obama and Prime Minister Harper of Canada, cooperation on research and development of carbon capture and storage technology was discussed as a means of addressing, in part, greenhouse gas problems long-associated with Canada's oil sands industry according to this NYT report.
A series of bills are being introduced into the Texas legislature to tighten regulations on natural gas drilling in the Barnett Shale, according to this article from the Star-Telegram. The issues appear wide-ranging (e.g., including pipeline condemnations), and - as you might expect - controversial.
This is interesting. CNNMoney.com reports that El Paso closed on the sale of two non-core natural gas producing properties for a total of approximately $74 million. Located in the San Juan Basin, together the properties were producing about 15 million cubic feet of gas equivalent per day at year's end.
EPA has decided that greenhouse gas output cannot be considered by officials reviewing federal applications to build new coal-fired power plants, according to this article from the NYT. This is in response to a decision by EPA's Environmental Appeals Board last month, Deseret Power Electric Cooperative. A complete copy of the interpretive memorandum can be found here.
[Update: U.S. EPA published a notice of the interpretive memorandum in the Federal Register indicating that challenges to the interpretation must be brought in the U.S. Court of Appeals for the D.C. Circuit by March 2, 2009. (Moved up.)]
[Update: U.S. EPA reconsidering its interpretation: "EPA today granted a petition for reconsideration of a Bush Administration memo regarding the scope of the Clean Air Act. The interpretive memo, put forward by then-EPA Administrator Stephen Johnson in December 2008, addresses when the Prevention of Significant Deterioration program applies to carbon dioxide, a chief greenhouse gas." (Moved up).]
The yo-yo effect. CNNMoney.com reports that the International Energy Agency is warning that there could be an oil supply crunch in 2010 once global demand recovers due to the impact of delayed investment in future supplies.
This report from the Houston Chronicle discusses the disconnect between crude oil and gasoline prices, and how it has more to do with today's upside-down energy market than a conspiracy to defraud. Provides a good background explanation on how there can be this disconnect because of the sources of supply.
From CNNMoney.com: Leaders in the domestic natural gas industry are concluding their bleakest winter in years, and the future is clouded by oversupply, icy credit markets and a global recession. Not a bad summary of the difficulties faced by the energy industry.
The Houston Chronicle reports that Chesapeake Energy Chief Executive Aubrey McClendon has told reporters that Chesapeake only needs gas prices to be "good" for three to six months every two-year period.
While the Interior Department may be putting the brakes on the prior administration's plans to open up the Atlantic and Pacific coasts for offshore drilling, the Atlanta Journal-Constitution reports that is not the case for alternative energy development - particularly offshore wind projects.
[Update. In related news, the Houston Chronicle reports that a leading Democrat has suggested that Congress is unlikely to restore an offshore oil and gas drilling ban despite pressure from environmental advocates and fishermen. (Moved up).]
This article from the NYT reports that international oil executives are eager to work with the new Administration to fashion policies to address global warming.
This article from the Houston Business Journal reports that the energy industry will face significant challenges even as credit markets unthaw and the recession begins to fade, including not only price and cash flow issues, but a potential failure to invest in capital projects that will be needed in the future.
From the NYT: The goals set by Congress for the ethanol industry are in jeopardy barely a year after it enacted legislation meant to encourage a national industry capable of converting plants and agricultural wastes into automotive fuel.
On February 6, 2009, the Sixth Circuit Court of Appeals issued an opinion in US v. Cundiff, et al. wherein the Court made significant effort to unravel the three non-majority opinions of the US Supreme Court's Rapanos decision concerning federal wetland jurisdiction. The case is interesting for the Court's struggle to find guidance from Rapanos. "Parsing any one of Rapanos's lengthy and technical statutory exegeses is taxing, but the real difficultly comes in determining which - if any - of the three main opinions lower courts should look to for guidance." Id. at p. 8. After many pages of anguished effort, the Court eventually found that two of Rapanos's three main opinions were met (meeting a majority), and thus a decision could be made without further head-banging.
EIA has issued its Short-Term Energy Outlook for February 2009: "The expectation of limited weather-driven consumption growth in the residential and commercial sectors in 2009 is outweighed by the implications of continued economic weakness in the industrial and electric power sectors. Consumption in the industrial and electric power sectors is expected to decline by 5.1 and 1.0 percent, respectively, in 2009."
The Vermont Supreme Court has upheld a decision by the state Public Service Board issuing a certificate of public good for a 16-turbine wind project, according to this article in the Times Argus.
Natural gas retail suppliers and one customer sued Ohio's Tax Commissioner alleging that Ohio's tax scheme is discriminatory because local distribution companies benefit from certain tax exemptions and exclusions that the suppliers do not. The U.S. Court of Appeals for the Sixth Circuit recently held that general principles of comity and federalism did not bar the suit, reversing an earlier lower court decision dismissing the suit for lack of subject matter jurisdiction.
A copy of the decision can be found here.
There's been a lot of interest recently in the development of natural gas from Marcellus Shale. If you have such an interest, you might find the following websites helpful: This one, from the Marcellus Shale Committee; this one, from the NY Department of Environmental Conservation; and this one, from the PA Department of Environmental Protection.
[Updated: Here's another website, from the Cornell Cooperative Extension of Tioga County. (Moved up.)]
Nearly 67,000 acres of National Forest land in southwestern Colorado have been withdrawn from auction by the U.S. Forest Service, according to this article from MSNBC.
According to this article in the WSJ, Alan Greenspan appeared before Congress in 2003 to testify that the U.S. needed to become a major importer of LNG to address recent price spikes in the natural gas market. He - and others sharing this view - could not have been more wrong. While the list of proposed LNG facilities grew to over 50, today only six have been built, and most of those are idle, indicative of more-than-sufficient natural gas supplies.
[Very interesting article. Subscription required.]
This is interesting: In 2008, the U.S. became the world leader for total wind production, overtaking Germany (the leader for 2007), according to this Daily Tech article. It goes on to note that some time this year the U.S. is expected to become the world leader in installed solar power as well.
Not surprising. The Interior Department has canceled oil and natural gas leases on 130,000 acres of federal lands in Utah, according to this article in the Washington Post. The lease sale had previously been blocked through a lawsuit filed by the NRDC and others.
Many producers have announced significant cuts in capital expenditures for the next year given the economy and limited access to capital. Devon Energy now has made the same announcement: "Nichols also told analysts that Devon is slashing its capital spending by more than half this year in accordance with the most severe recession in decades. He said Devon is budgeting $3.5 billion to $4.1 billion, compared to $9 billion spent last year."
From the Houston Chronicle: Anadarko announced a discovery today at its Heidelberg prospect in the Gulf of Mexico. The article goes on to report that the discovery equates to a discovery of 100 million barrels of oil equivalent.
From an Ultra Petroleum press release: "Ultra Petroleum Corp. today announces additional 2009 and 2010 natural gas hedges. The total net volume hedged for 2009 currently is 93.0 Bcf at an average realized price of $5.81 per Mcf, and in 2010 the total net volume hedged currently is 6.8 Bcf at an average realized price of $5.50 per Mcf."
Brigham Exploration Company has completed its Olson 10-15 #1H well in the Bakken field at a rate of approximately 1,200 barrels of oil and 1.4 MMcf of natural gas per day, according to this article from CNNMoney. Very nice.
According to this article from the Austin American-Statesman, some refineries may shut down in the event of a strike by refinery workers, while others may look to non-union workers. Fortunately, a strike was averted on Saturday when both sides agreed to continue contract negotiations.
[Update. From the Houston Chronicle: It appears that the parties reached an agreement giving refinery and chemical plant workers a 3 percent raise each year for the next three years along with a $2,500 contract ratification bonus.]
Gov. Ed Rendell is expected to propose this week the state's first severance tax on natural gas production to address, in part, Pennsylvania's worst fiscal crisis in 20 years, according to this article from the Republican Herald. No one seems to remember the story of the golden goose these days.
Worldwide LNG capacity is expected to expand by 20 percent this year due to as many as seven LNG export terminals starting overseas operations, according to this article from the Houston Chronicle.
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