The WSJ is reporting that the U.S. is close to becoming a net exporter of petroleum products: "As recently as 2005, the U.S. imported nearly 900 million barrels more of petroleum products than it exported. Since then the deficit has been steadily shrinking until finally disappearing last fall, and analysts say the country will not lose its 'net exporter' tag anytime soon."
Very interesting. Read the whole thing.
The Ohio Department of Natural Resources announced today that Rick Simmers has been appointed the new Chief of the Division of Oil and Gas Resources Management. From the news release: "'Rick’s extensive experience in field enforcement issues and previous management roles are going to be invaluable to him as chief of the newly created Division of Oil and Gas Resources Management,' said Zehringer [Director of ODNR]. 'I am confident that he will be a great leader for his staff and provide strong oversight of Ohio’s oil and gas industry.'"
Congratulations!
[Update: For a copy of that release, see here.]
The WSJ has a good article on job growth in Ohio due to the anticipated growth in Ohio's E&P industry. It begins: "A rare sight in hard-luck Youngstown, a new industrial plant, has generated hope that a surge in oil and natural gas drilling across a multistate region might jump-start a revival in Rust Belt manufacturing."
The Director of North Dakota's Department of Mineral Resources appears concerned over U.S. EPA's efforts to regulate hydraulic fracturing, according to this article in the Bismarck Tribune. The consequence of federal instead of state regulation: "Thousands of workers unemployed overnight, housing starts abandoned, businesses shuttered and bustling oil towns from Williston to Belfield emptying out instead of filling up are all part of a future few would prefer — even if they despair of the changes to land and lifestyle wrought by the upswing of oil."
Read it all.
The Ohio Division of Oil and Gas Resources Management (Division) has posted for comment proposed rule amendments: "The Division *** is requesting comments on proposed amendments to 22 of its existing rules, which have been drafted pursuant to Senate Bill 165, effective June 30, 2010 and to complete the required five-year review of these rules. In addition, the division proposes to rescind seven of its exising [sic] rules and to continue 14 of its existing rules with no changes. These changes are in addition to the well construction rules that have recently been put out for comment." Comments are due December 23, 2011.
For more, including a copy of the proposed changes, see here.
The WSJ has an interesting article on the growing support in Canada for infrastructure to move oil for export to Asia: "While Canadian government officials and TransCanada executives expect the U.S. to eventually approve Keystone, the delay underscored the importance in Ottawa of not having 'all our eggs in one basket,' Canadian Energy Minister Joe Oliver said last week in a speech to energy executives in Toronto. *** 'We favor the construction of infrastructure that will move resources to markets that want them,' in particular China and Asia, he said in a subsequent interview."
The Energy Information Administration (EIA) has some items you may find of interest:
Lots of good information there.
As you know, we like to keep you posted on the economic impact studies done about the E&P industry (see here, for example, regarding an Ohio study). The Durango Herald has a nice discussion on the potential impacts of increased oil estimates in Colorado: "A dramatic increase in estimated oil in Colorado's northern Front Range is likely to produce at least $50 million a year in new severance taxes for budget-strapped state and local governments. *** While direct employment from new drilling won't be staggering, spinoff job creation will produce millions more in economic impact."
While "staggering" would be nice, it's not necessary ... really ...
The WSJ has a good update on what's going on with the price differential between WTI and Brent. For example: "Though Brent and WTI represent two similar types of oil, they are subject to different regional forces. Before the start of the year, Cushing already was facing price pressures caused by a glut of oil. At the same time, Brent crude, the European benchmark, was buffeted by supply disruptions due to unrest in the Middle East. When the uprising against Moammar Gadhafi caused oil production to grind to a halt, Brent crude prices rose."
The Washington Examiner is reporting that the lease auction for the Wayne National Forest in Ohio has been canceled: "President Obama's United States Department of Agriculture has delayed shale gas drilling in Ohio for up to six months by cancelling a mineral lease auction for Wayne National Forest (WNF). The move was taken in deference to environmentalists, on the pretext of studying the effects of hydraulic fracturing."
For a copy of the announcement, see here.
The Delaware River Basin Commission (DRBC) has issued revised draft regulations regarding the construction and operation of natural gas development projects (for previous entries, see here and here, e.g.). According to the WSJ: "Energy companies collectively would be permitted to drill a maximum of 300 natural gas wells after receiving initial approval to explore the Delaware River basin under draft rules released Tuesday by the agency that monitors the drinking-water supply of 15 million people." (Emphasis is ours.) (Subscription may be required.)
A hearing to consider the rules has been scheduled for November 21, 2011. For more, including a copy of the revised regulations, see here.
[Update: The hearing has been postponed because a couple of the commissioners opposed the proposal. See here. (Moved up.)]
We've mentioned before U.S. EPA's efforts to incorporate concepts of "environmental justice" into its administration of the country's environmental laws (see here, e.g.). Recently, EPA released Plan EJ 2014, described by the Administrator as offering "a road map that will enable us to better integrate environmental justice and civil rights into our programs, policies and daily work." For more, see here (U.S. EPA site).
For the first of a three-part commentary series that you might enjoy on this topic, see here (Power Line). Very nice.
Frequent readers of this blog know that we follow closely E&P developments in Ohio and around the country. Linked here are a couple of articles we wrote for the November / December 2011 Ohio Lawyer:
The current focus in Ohio is on a formation known as the Utica Shale. Geologists believe that the Utica, which ranges from 6,000-9,000 feet in depth, may have served as the source of much of Ohio’s historical production. Operators are looking at the Utica because of the possibility that it may contain not only natural gas but also crude oil and natural gas liquids (NGLs). The added value of crude oil and NGLs improves the overall economic value of the operations. These additional revenue streams are significant in today’s environment of relatively low natural gas prices and the substantial costs involved in drilling a horizontal well—ranging from $2-$10 million a well.
We hope you find them both interesting and useful.
A Tennessee Gas Pipeline Co. transmission pipeline ruptured yesterday in Morgan County, Ohio: "Spokesman Richard Wheatley said the Houston-based pipeline company immediately sent workers to the area of the explosion to shut off the gas. Natural gas that would have flowed through the damaged portion was routed to the company’s other pipelines in the area to preserve the flow to customers, he said, adding that it is too early to speculate on the cause of the blast." (Columbus Dispatch).
The Houston Chronicle is reporting on the hiring challenges faced by the oil and gas industry, fueled by increased shale development in the U.S.: "While the job picture remains stagnant nationwide, the boom in domestic shale drilling has pushed hiring to a feverish pace in North American oil fields. *** A staffing crunch has caused the industry's salaries to surge and recruiters to embrace new tactics in search of the narrow pool of candidates who have the skills to work and manage the technical and gritty world of oil field services."
Read it all.
Governor Kasich has appointed Agriculture Director Jim Zehringer to lead the Ohio Department of Natural Resources. Assistant Director Scott Zody had served as interim director when former director David Mustine stepped down. For more information on new Director Zehringer, please see here.
The Buffalo News has an article pointing out the opposing views of environmentalists and New York landowners over the development of the landowners' mineral interests: "'The extreme environmentalists have misinformed and panicked people,' said Dan Fitzsimmons, president of the Joint Landowners Coalition of New York, which represents people who have leased their lands to gas companies for potential drilling. *** Still, the environmentalists have one other argument on their side: fear of the unknown."
The Pittsburgh Post-Gazette is reporting that a Pennsylvania Senate committee has re-inserted into pending legislation a substantial annual fee on natural gas producers: "The new impact fee proposal would assess an initial base cost of $50,000 per well, which would decrease annually until years 11 through 20 that a well is producing, with a cost then of $10,000 per well. That price tag would increase if natural gas prices rise."
Come to Ohio!
This article in The Intelligencer looks at the prospects for Ohio refineries: "Marathon now refines 78,000 barrels of oil per day at the Canton plant. Khiery [sic] said the company gets 61 percent of its oil for refining from domestic sources such as Light Louisiana Sweet crude, 10 percent from Canada and 29 percent from 'other foreign sources.' *** Marathon spokesman Jamal Kheiry said the company sees promise in the Utica Shale's oil reserves once they become commercially viable."
Interesting.
The Energy Information Administration (EIA) has issued its Short-Term Energy Outlook for November (see here). Among other things, it finds: "Natural gas working inventories ended October 2011 at an estimated 3.8 trillion cubic feet (Tcf), about 1 percent below the same time last year. The projected Henry Hub natural gas spot price averages $4.09 per million British thermal units (MMBtu) in 2011, $0.30 per MMBtu lower than the 2010 average, and $4.13 per MMBtu in 2012."
The Ground Water Protection Council (GWPC) has issued a report on agency groundwater investigation findings in two states, Ohio and Texas. It has interesting things to say regarding alleged groundwater contamination from well stimulation activities. From the Executive Summary, for example:
Neither state has documented a single occurrence of groundwater pollution during the site preparation or well stimulation phase of operations. Despite this, Ohio has implemented more detailed notification, inspection, record keeping, and reporting requirements in response to the national debate on the process of hydraulic fracturing. Texas is currently placing summary data online for new completions, has implemented new disposal well requirements in the Barnett Shale play, and recently enacted statutes requiring public disclosure of hydraulic fracturing chemicals. (Emphasis is ours.)
For a copy of the report, see here (generally) and here (a copy of the report).
We've noted before that Ohio will not allow POTWs to be used for the disposal of wastewater (see here, e.g.). You might be interested to know that Ohio EPA has asked the Environmental Appeals Review Commission to vacate as unlawful the permits issued to the city of Warren, Ohio, and Patriot Water Treatment, LLC, to allow such disposal:
Revised Code 1509.22(C) specifically states that brine may only be disposed of by one of the following three methods: (1) underground injection; (2) surface application on roads for dust control and ice; or (3) any other method approved by the Chief of the Division of Oil and Gas Resources Management ***. Disposal of brine wastewater through a wastewater treatment plant and discharge to waters of the state is not an authorized method of disposal under R.C. 1509.22(C), unless and until the Chief *** approves this technology. At this time, no such approval has been given. (Emphasis in original.)
For the filing, see here.
The scrutiny continues: The USEPA Office of Inspector General recently announced its FY 2012 Annual Plan. As stated on USEPA's webpage, the Office of Inspector General (OIG) is an "independent office within the EPA that helps the Agency protect the environment in a more efficient and cost effective manner." Basically, the OIG conducts audits, evaluations, inspections and investigations related to EPA programs. The 2012 Annual Plan lists a "special review" carry over assignment from 2011 related to "Oversight of Hydraulic Fracturing Impact on Water Resources". A new assignment for 2012 relates to "EPA's Protection of Human Health and the Environment From the Effects of Hydraulic Fracturing".
The Akron Beacon Journal has an interesting article on the potential for Ohio's E&P industry: "A state official estimated Tuesday that as much as 5 billion barrels of oil and 15 trillion cubic feet of natural gas could be underground in eastern Ohio. *** The oil and natural gas is in the Utica shale that is 100 to 300 feet thick under the eastern half of the state, said Lawrence Wickstrom, state geologist and head of the Ohio Department of Natural Resource’s Division of Geological Survey. *** And this, he said, is 'a very conservative estimate' of the Utica potential. No dollar figure was attached to the numbers, but others have said the Utica shale will produce tens of billions of dollars in Ohio."
Read the whole thing.
The WSJ has a good article on the increased use of railroads to move production from the Bakken (which we've reported on previously): "North Dakota's output has grown in the last three years from a trickle to nearly 450,000 barrels a day—trailing only Texas, Alaska and California—and could double by the middle of the decade, according to analyst and industry projections. But pipelines in the region already are operating at capacity, and major new lines aren't expected to start going into service until 2013. *** In response, companies are building rail terminals. Rail terminals can be developed quickly, giving them an advantage for now over pipelines. The North Dakota Pipeline Authority estimates a doubling in rail-terminal capacity next year alone to more than 700,000 barrels a day."
EPA announced on November 3 its final research plan on hydraulic fracturing. The Congressionally directed study will evaluate potential impacts on drinking water resources. In March 2010, EPA announced its intention to conduct the study in response to a request from Congress. Since then, the agency has held a series of public meetings across the nation to receive input from states, industry, environmental and public health groups, and individual citizens.
The initial research results and study findings are to be released to the public in 2012. The final report is to be delivered in 2014. The final study plan looks at the full cycle of water in hydraulic fracturing, from the acquisition of the water, through the mixing of chemicals and actual fracturing, to the post-fracturing stage, including the management of flowback and produced or used water as well as its ultimate treatment and disposal. Earlier this year, EPA announced its selection of locations for five retrospective and two prospective case studies - our previous post on these locations can be found here.
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