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Oil and Gas Roundup — April 2

April 02, 2013
TOPICS: In the news

A roundup of oil and natural gas news from around the state, nation and world:

FDR’s grandson to use carbon dioxide to drill in abandoned West Texas limestone

The Republican grandson of President Franklin Delano Roosevelt is planning to pump carbon dioxide into the ground in an effort to free oil hidden deep beneath the surface.

Elliott Roosevelt Jr. said he will shoot carbon dioxide into limestone in an area of west Texas long abandoned by fossil fuel energy developers. The method — called carbon dioxide-enhanced oil recovery, or CO2 EOR — could dislodge oil worth about $58 billion within a 38-square-mile area, he said.

In 2012, the United States' crude output increased by 14 percent from the year before to an average of 6.5 million barrels a day, according to data from the Energy Information Administration. Of that, 300,000 barrels a day came from CO2 EOR.

CO2-enhanced drilling causes a chemical reaction that helps oil dislodge and flow from the rock's microscopic pores. The technique was first used in the 1970s to refresh flagging wells. But Roosevelt's project would be the first to drill for residual oil in a virgin field where there's no network of existing wells.

John Thompson, director of the Fossil Transition Project for the Clean Air Task Force, said the technique could cause a demand for carbon dioxide, which could create a potential environmental benefit. "I hope Elliott Roosevelt makes a lot of money," Thompson said. "I hope other people replicate his model and take much more CO2 out of the atmosphere than would otherwise happen."

While Roosevelt said he's happy that the method would create a need for carbon dioxide, that's not his primary motivation. "We're not doing this to solve climate change," Roosevelt said of his project. "We're in business to liberate and sell oil."

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Va.-based Dominion Resources plans LNG export plant

McLEAN, Va. (AP) — Hoping to capitalize on a boom in natural gas production, a Virginia-based energy company is submitting a 12,000-page application to federal regulators to build a $3.4 billion plant in southern Maryland to export liquefied natural gas.

Richmond, Va.-based Dominion Resources Inc. also announced Monday it has deals in place with energy companies in Japan and India to buy the gas that would be processed there.

Dominion wants to expand its existing Cove Point plant in Lusby, Md., to produce liquefied natural gas for export.

The facility — already served by 88 miles of pipeline — would take advantage of the natural gas boom in the mid-Atlantic associated with the Marcellus and Utica shale formations.

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Colo.’s Hickenlooper debates anti-fracking county commissioner

DENVER — Colorado Gov. John Hickenlooper defended his legal crackdown on cities that ban hydraulic fracturing Monday during a debate with a county commissioner.

Boulder County Commissioner Elise Jones — his opponent in the debate — lectured Hickenlooper for suing the city of Longmont after voters there opted to ban fracking inside city limits.

More than 96 percent of Colorado’s natural-gas and oil wells depend on hydraulic fracturing — the injection of high-pressure water, sand and chemicals to break rock formations — Hickenlooper said, so banning fracking is tantamount to banning all drilling.

“To ban fracking essentially denies someone access to what they paid money for,” Hickenlooper said. “Someone owns those mineral rights.”

Hickenlooper also fended off questions from the debate’s moderator, Denver University professor K.K. DuVivier, who suggested the gas and oil industry has enjoyed a privileged position under the law compared with renewable-energy firms. 

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Natural-gas production to grow in Utica shale

Lack of infrastructure has limited Chesapeake Energy’s natural gas production in the Utica shale play of eastern Ohio, but that situation is expected to change dramatically as pipeline and processing plants come online later this year.

By the end of 2013, the company hopes to be producing 330 million cubic feet equivalent of natural gas per day, or 55,000 barrels of oil equivalent.

“Achieving this level will be dependent on the timely startup of critical processing infrastructure at multiple facilities in the months ahead,” Steve Dixon, acting CEO of the company, said in a national conference call Monday.

Chesapeake remains the dominant player in the natural-gas industry in eastern Ohio, having drilled 240 wells — about 75 percent of the wells drilled in the Utica play so far. It has leased about 1 million acres.

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Shale-derived natural gas liquids are essential but overlooked

The nonprofit Brookings Institution has a new report out that focuses on the importance to U.S. industry and the nation of the often overlooked natural gas liquids that are found in shale formations.

The report says in part: “[Natural Gas Liquids] comprise a number of hydrocarbon products that are produced in conjunction with methane (also known as ‘dry’ natural gas), or as a byproduct of crude oil refining, and which are liquid at room temperature. NGLs include ethane, propane, butane, isobutane, and natural gasoline.

“While such commodities do not attract the attention that is shown to crude oil, gasoline, or natural gas, they are a critical component of the industrial sector’s ability to take advantage of the U.S. hydrocarbon resurgence, and will play a large role in the country’s ambitions for energy ‘self-sufficiency.’”

Click here to read the report.

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