The deadline is fast approaching for filing comments on the NY rulemaking proposal regarding hydraulic fracturing (December 31, 2009). There have been a number of articles on the comments that have been filed to date, including this one from the Albany Times Union. For more on the issue generally, see here (NYDEC website).
The LAT has an interesting article on the increasing reliance on "green managers" in industry at the executive level. "Sustainability officers and green supervisors, some say, are successors to the diversity managers and innovation specialists of the 1990s -- with their focus equal parts corporate responsibility, public relations and profit."
The Fort Worth Business Press is reporting on the optimism felt by the oil and gas industry for an economic rebound next year. A sample: "The Deloitte Center for Energy Solutions, a Houston-based division of the global financial services firm, recently conducted a survey of oil and gas professionals in which the majority of respondents, 84 percent, said 'the best days for the natural gas industry are still ahead,' according to the Dec. 9 survey, which polled 200 college-educated employees earning at least $100,000 per year who have worked in the industry for at least five years. The energy center also has an office in Washington, D.C."
It may be that green technologies are not so green after, all due to their reliance on "rare earths" mined in China, according to this article in the NYT. "These elements come almost entirely from China, from some of the most environmentally damaging mines in the country, in an industry dominated by criminal gangs." Wow.
The NYT has an article looking at the economics of oil refining in the United States. A sample: "Refineries, especially smaller ones, have been closing for many years. The number of refineries in the United States fell to about 150 in recent years from more than 300 in 1982. At the same time, the nation’s refining capacity grew by about 13 percent, as companies expanded their most efficient refineries."
[Update: The Houston Chronicle has a related article on the possibility that some refineries will be sold to foreign companies.]
ABC News is reporting that the West Virginia Public Service Commission has rejected a proposed sale of natural gas utility Dominion Hope to SteelRiver Infrastructure Partners, a San Francisco investment company, because it was contrary to the public interest.
A copy of the Commission's order can be found here (Case No. 08-1761-G-PC).
National Fuel Gas Company announced this week that a third Seneca Resources Corp. (a wholly-owned subsidiary of National Fuel) well in the Marcellus Shale flowed gas at an initial 24-hour rate of over 10 MMcf per day, and averaged 9.5 MMcf per day over a seven-day period. For more, see here.
Ultra Petroleum Corp. has announced that it is acquiring approximately 80,000 (net) acres in the Pennsylvania Marcellus Shale for approximately $400 million. For more, including a PowerPoint presentation on the acquisition, see here.
The WSJ is reporting on the conflicting views of the Sierra Club regarding natural gas development. At the national level, the group promotes natural gas usage, while local chapters are often opposing it. "The rift in the Sierra Club, one of the country's oldest and most prominent conservation groups, highlights deep divisions in the broader environmental community over natural gas. And pressure from local activists is forcing some major environmental groups to revisit their positions on drilling."
(Note: Subscription required.)
U.S. EPA has published notice of a proposed consent decree with WildEarth Guardians and San Juan Citizens Alliance filed in the United States District Court for the District of Columbia under citizen suit provisions of the Clean Air Act (WildEarth Guardians, et al. v. Jackson, No. 1:09– CV–00089–CKK). Among other things, if approved it would require EPA to address the need for new source performance standards (NSPS) and national emission standards for hazardous air pollutants (NESHAP) for the Oil and Natural Gas production source category.
You can get a copy of the proposed decree here (EPA–HQ–OGC–2009–0918).
Exxon Mobil has agreed (subject to shareholder approval) to acquire XTO Energy for $31 billion and an assumption of $10 billion in debt. For more on the terms of the deal and commentary, see this article in the Houston Chronicle; this from the WSJ (subscription required); and this article from the NYT. According to an Exxon Mobil spokesperson: "'We think gas is going to grow more than any other major energy source. We think it's going to really become the fuel of choice for power generation and increase and replace coal,' Jeffers said. 'Depending on whatever carbon management scheme comes into play, that's going to change the economic scheme and push more people toward natural gas.'"
Very interesting.
[Update: For another good WSJ article, see here (subscription required).]
[Update: The Dallas Morning News is reporting that Exxon Mobil can void the deal if Congress passes a law that would make hydraulic fracturing illegal or commercially impracticable. Now that's an interesting provision ...]
[Update: For commentary from the Houston Chronicle, see here (moved up).]
This is interesting: A state-run escrow fund in Virginia holding millions of dollars in natural gas royalties owed to mineral owners who either cannot be located or who are involved in dispute over the funds will soon be audited, according to this article in the Richmond Times-Dispatch.
Dominion has announced a $253 million expansion of its gathering and processing assets in West Virginia. "Dominion will complete three compression units currently under construction and, over the next three years, add nine new units. Approximately 25 miles of replacement or new pipeline will be constructed at various places in its gathering system to address bottlenecks and increase delivery. Two new gas processing plants will be added, increasing Dominion's processing capacity from approximately 230 million cubic feet per day to 280 million cubic feet per day."
We are moving towards greater regulation of emissions from oil and gas exploration and production operations, according to this article in The Grand Junction Daily Sentinel. That looks quite possible.
The Richmond Times-Dispatch has a series of reports on forced pooling in Virginia (see here, for example). You may be interested.
We've reported previously on a geothermal project in California and the concerns raised over potential earthquake risks (see here). The NYT is now reporting that Altarock Energy, the Obama administration's first test of geothermal energy as a major alternative energy source - and despite millions in Department of Energy grants and private investment from Google and Kleiner Perkins (among others), is abandoning the project.
The Houston Chronicle is reporting that a group of New Mexico producers have filed a complaint with the New Mexico Public Regulation Commission claiming that the gathering rates charged by Enterprise Field Services LLP are excessive and asking the Commission to set the rates itself. Interesting.
The United States Court of Appeals for the Seventh Circuit in Rao v. BP Products North America, Inc. (Case No. 07-2065) recently found that a franchisee had been given appropriate notice of termination under the Petroleum Marketing Practices Act (PMPA) after he engaged in bribery and fraud.
The reasons for the termination were straightforward: Among other things, Rao, the franchisee, had paid a BP regional sales manager approximately $100,000 in cash and gifts in an effort to influence BP franchising decisions. When it came to light - for reasons unexplained in the decision, Rao actually raised the issue with BP - Rao claimed that he had been extorted by the manager. BP opened up an investigation and, initially, Rao cooperated. But when Rao ceased cooperating, BP management made the decision to end the franchise relationship.
Continue Reading...The Houston Chronicle is reporting on the results of a survey indicating that natural gas industry executives are optimistic about the future. Still, "Forty-four percent expect industry job cuts will increase over the next year, 75 percent say their companies are reducing operating expenses, and 56 percent say they're cutting capital expenditures." Interesting.
The WSJ has a short article on the volatile relationship between US and UK liquefied natural gas prices and what we might see in 2010. "The difference between the price of gas at the benchmark Henry Hub in Louisiana and the price of the fuel at the U.K.'s National Balancing Point, or NBP, hub is closely eyed by the gas industry as a key determinant of LNG flows in the Atlantic. When U.K. gas prices are higher than U.S. prices, more LNG will arrive in the British Isles; when the reverse is true, more gas comes to North America."
(Note: Subscription required.)
The Susquehanna River Basin Commission has announced that it will be installing electronic monitors to assess water quality on streams located in production areas, according to this article in the Philadelphia Inquirer. "The commission said the 30 monitors would provide real-time data on water quality to alert officials to any sudden changes that might indicate a spill or a leak, said Susan Obleski, spokeswoman for the basin commission." East Resources, Inc., is paying for the monitors.
Back on December 19, 2008, USEPA issued a final rule revising the requirements of the major NSR program regarding the treatment of fugitive emissions (‘‘Fugitive Emissions Rule’’). 73 FR 77882. The final rule required fugitive emissions to be included in determining whether a physical or operational change results in a major modification only for sources in industries that have been designated through rulemaking under section 302(j)of the Clean Air Act (CAA). The final rule amended all portions of the major NSR program regulations: Permit requirements, the PSD program, and the emission offset interpretive ruling. On February 17, 2009, the Natural Resources Defense Council submitted a petition for reconsideration of the December 2008 final rule. On April 24, 2009, USEPA responded to the February 17, 2009 petition indicating they were convening a reconsideration proceeding for the inclusion of fugitive emissions and granting a 3-month administrative stay of the rule contained in the PSD program. The letter also indicated that USEPA would publish a notice of proposed rulemaking‘ ‘in the near future’’ to address the specific issues for which they were granting reconsideration. The administrative stay of the Fugitive Emissions Rule became effective on September 30, 2009. See 74 FR 50115.
USEPA’s authority under section 307(d)(7)(B) to stay a rule or portion thereof solely under the Administrator’s discretion is limited to 3 months.
USEPA announced today (December 11, 2009, 74 FR 65692) they were making an interim final determination to provide an additional stay for 3 months. The 3-month stay that began on September 30, 2009 is to expire on December 30, 2009. At that time, facilities would be required to comply with the final rule as published [73 FR 77882] unless an additional stay is set in place. USEPA has now indicated its intent to publish a notice in the near future that will propose an additional stay of the Fugitive Emissions during the time period while USEPA reconsiders the rule. Since that proposed rule has not yet been published, any resulting final action that EPA takes will likely occur after December 30, 2009.
Both the Energy Information Administration (EIA) and ExxonMobil have recently released their views on energy issues for the future. The EIA's Short-Term Energy Outlook for December 2009 can be found here, and finds, among other things:
EIA expects the annual average natural gas Henry Hub spot price for 2010 to be $4.62 per thousand cubic feet (Mcf). This represents a $0.67-per-Mcf increase from the estimated 2009 price of $3.95 per Mcf. Natural gas working inventories reached a new record-high level of 3.837 trillion cubic feet (Tcf) on November 27 as mild weather throughout much of the country contributed to uncommon storage builds for most of that month.
Similarly, ExxonMobil released its Outlook for Energy: A View to 2030, concluding in part:
ExxonMobil expects that global energy demand in 2030 will be almost 35 percent higher than in 2005, even accounting for the recession that dampened energy demand in 2009.
A copy of the full report can be found here, and is well worth your read (e.g., it concludes that even with growth of 10% per year, wind, solar, and biofuels will only make up about 2.5% of the energy mix in 2030).
Baker Hughes is developing drills and measurement technology that can be used in an emerging geothermal market, according to this article in the WSJ. "Finding a drill that can function reliably in such hot conditions deep under the earth's crust has been a problem throughout the industry. And failing drill bits eat up time and waste money." Very interesting.
(Note: Subscription required.)
The NYT has an article on the growing debate surrounding the use of hydraulic fracturing to produce shale plays. The hook - After noting the benefits of lower prices and "global warming" emissions, it asks, "What the drilling push will do to local environments is another matter." And yet, the article acknowledges: "So far, the evidence of groundwater pollution is thin." Read and enjoy.
U.S. EPA has issued its endangerment finding, announcing that greenhouse gases threaten the public health and welfare of the American people:
The Administrator finds that six greenhouse gases taken in combination endanger both the public health and the public welfare of current and future generations. The Administrator also finds that the combined emissions of these greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas air pollution that endangers public health and welfare under CAA section 202(a).
You can find copies of both the finding itself and EPA's technical support documents here.
[Update: We neglected to mention - These findings do not themselves impose any requirements on industry or other entities. However, this action is a prerequisite to finalizing the EPA’s proposed greenhouse gas emission standards for light-duty vehicles, which were jointly proposed by EPA and the Department of Transportation’s National Highway Safety Administration on September 15, 2009.]
West Virginia landowners are urging the state legislature to allow forced pooling for horizontal wells in the Marcellus Shale, according to this article in the Charleston Gazette. Interesting, coming from the landowners.
The Financial Times is reporting on a study done by the Edhec-Risk Institute that finds that speculation in oil futures (NYMEX) does not appear excessive in comparison to commercial hedging needs over the last three and one-half years. For a copy of the study itself, see here.
(Note: Registration required for FT article.)
The Pittsburgh Post-Gazette has a good article on the interest shown by industry in Pennsylvania Marcellus production. A small part: "Talk to anyone in the industry about the Marcellus Shale and the conversation is likely to turn to its potential economic impact -- not just the money that a company hopes to make, but the jobs that could be created and the tax revenues that could be generated."
The Washington Post has a couple of interesting articles on shale gas production: An energy answer in the shale below? (potential for natural gas development and environmental divide) and Drilling right into a heated environmental debate (hydraulic fracturing).
The WSJ has an interesting (brief) article on falling natural gas futures. Following updated storage information: "The front-month contract fell as low as $4.432 in earlier trading, following the release of Energy Information Administration data showing a late-season build of two billion cubic feet of natural gas."
(Note: Subscription required.)
The NYT has an interesting article on green jobs, and the fact that they are not growing as expected in the U.S. Telling paragraph: "'The clean energy market is gigantic and growing,' said Phyllis Cuttino, a director of the Pew Charitable Trusts’ Environmental Group. 'The U.S. has a rich manufacturing base, a well educated work force and we are an innovation center. But if we don’t have the policies in place to make investment here a sure thing, then we could potentially lose to other countries.'"
The Senate Committee on Environment & Public Works heard testimony yesterday on improving the framework for assessing and managing chemical risks under the Toxic Substances Control Act (TSCA). Written statements of the witnesses, including from the Administrator of U.S. EPA, can be found here.
The Federal Energy Regulatory Commission (FERC) recently published a Notice of Proposed Rulemaking (NOPR) seeking comments on a proposal "to incorporate by reference the latest version (Version 1.9) of business practice standards adopted by the Wholesale Gas Quadrant of the North American Energy Standards Board (NAESB) applicable to natural gas pipelines." See 74 Fed. Reg. 62261.
Comments are due January 11, 2010.
The Philadelphia Inquirer is reporting on a study recently issued by PennEnvironment urging greater restrictions on natural gas production in Pennsylvania, including a moratorium on forest land leasing until the impacts of current drilling operations can be assessed. For a copy of the report, see here.
The Energy Information Administration (EIA) has published its Natural Gas Monthly report for November 2009. The following chart is interesting:
A copy of the full report can be found here.
Progress Energy plans on closing 11 coal-fired power plants by 2017 while increasing reliance on natural gas and nuclear energy in the future for its generation, according to this article in the NYT.
The North American Electric Reliability Corporation (NERC) - an international regulatory authority on the reliability of the bulk electric power system in North America - has issued its Winter Reliability Assessment for 2009-2010. Among other things, it finds that "[n]atural gas-fired generation represents over half of the capacity added since last year, growing by approximately 11,000 MW." Interesting, and offers some reason for optimism for natural gas producers.
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