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Oil and Gas Roundup — July 19

July 19, 2013
TOPICS: In the news
A roundup of oil and natural gas news from around the state, nation and world:

Chesapeake, SandRidge, Devon help bring down Peak Oil theory


Peak Oil is dead — or at least the website dedicated to educating the world on the theory is, as the popular Oil Drum website will cease publishing new content at end of the month. The theory just doesn't seem to have much relevance these days, when North America is in the midst of a massive energy production boom.

While we are a long way from celebrating Energy Independence Day, we've at least pushed back the date when Peak Oil will again become a major topic of conversation. With that as context, let's look at five of the companies that have made Peak Oil no longer relevant.

Chesapeake Energy Corporation — The nation's No. 2 natural gas producer is really the main company to point the finger at when it comes to bringing down Peak Oil. In discovering many of the top unconventional natural gas plays, the company's prolific use of fracking technology helped spark the move into oil and liquids production from shale. Today, Chesapeake is focused on balancing its production by increasing the amount of unconventional oil it produces. That focus led to 22% year-over-year increase in oil production for the company, as it has developed its acreage in the Eagle Ford, Granite Wash, and Mississippi Lime. Chesapeake has a massive inventory of future wells, which should keep it very busy over the next decade.

SandRidge Energy Inc. — Speaking of the Mississippian, SandRidge Energy Inc. is one of the biggest advocates of that emerging oil play. The company expects the play to deliver 64% year-over-year oil production growth, which will enable its total oil production to grow by 19% this year. SandRidge has leased about 1.85 million net acres in the Mississippian, which gives it more than a decade of oil production growth opportunities.

Devon Energy Corp — In addition to all the great U.S. oil plays, we simply can't forget about the massive oil finds by our neighbors to the North. Among the many examples, the Canadian oil sands helped Devon Energy Corp deliver 14% oil production growth last quarter. Looking ahead, the company sees its oil production from the oil sands growing by up to 19% annually through 2020. When combined with its strong position in the Permian, as well as an emerging position in the Mississippian, Devon Energy Corp has strong, highly visible future oil production growth potential.

Read more: http://www.insidermonkey.com/blog/chesapeake-energy-corporation-chk-sandridge-energy-inc-sd-five-companies-that-brought-down-peak-oil-197408/?singlepage=1.


Apache Corp. pays for CNG conversion of nonprofits’ vehicles

Tulsa Habitat for Humanity sends a box truck through area neighborhoods daily, picking up supplies for new homes and paying gasoline prices of more than $3 a gallon.

When that truck is converted to compressed natural gas, the fuel price will be cut by more than half to an equivalent of $1.43 per gallon, based on Tuesday's prices.

Apache Corp., an oil and gas exploration company, is paying for six local nonprofits and two municipalities to have their vehicles converted to run on CNG.

"Natural gas is more efficient and better for the environment," said Rob Johnston, central region vice president for Apache. "It's a win for everyone."

The Houston-based company announced the donations Tuesday during an event at its CNG fueling station at 5011 S. Vandalia Ave. Apache is spending about $20,000 each on the conversions, as well as supplying a $5,000 gift card to each group to pay for CNG.

The nonprofits include the Gatesway Foundation, Family & Children's Services, Community Action Project of Tulsa County, the Center for Individuals with Physical Challenges, Tulsa Habitat for Humanity and Tulsa Boys' Home.

After the conversions, which will be performed in the coming weeks, five of the vehicles will be able to run on both CNG and gasoline. The three others will be CNG only.

Read the Tulsa World article: http://www.tulsaworld.com/article.aspx/CNG_vehicle_conversions_for_nonprofits_paid_for_by/20130717_49_E1_CUTLIN788020.


Fracking research: What's behind EPA's abandoned studies?

When the Environmental Protection Agency abruptly retreated on its multimillion-dollar investigation into water contamination in a central Wyoming natural gas field last month, it shocked environmentalists and energy industry supporters alike.

In 2011, the agency had issued a blockbuster draft report saying that the controversial practice of fracking was to blame for the pollution of an aquifer deep below the town of Pavillion, Wy. 2013 the first time such a claim had been based on a scientific analysis.

The study drew heated criticism over its methodology and awaited a peer review that promised to settle the dispute. Now the EPA will instead hand the study over to the state of Wyoming, whose research will be funded by EnCana, the very drilling company whose wells may have caused the contamination.

Industry advocates say the EPA's turnabout reflects an overdue recognition that it had over-reached on fracking and that its science was critically flawed.

Read more: http://www.csmonitor.com/Environment/Latest-News-Wires/2013/0715/Fracking-research-What-s-behind-EPA-s-abandoned-studies.


Planning labyrinth threatens Yorkshire's resources boom

In North Dakota, the home of U.S. shale gas, a would-be driller can fill out a two-page form and get the go-ahead in two days. In North Yorkshire, England, a completed application can run to 50 pages, and the process takes months.

The British Geological Survey recently estimated shale rock beneath northern England holds 1,300 trillion cubic feet (tcf) of gas — enough to meet UK needs for 50-70 years, assuming a 10-15 percent recovery rate. But early indications are that planning institutions and processes are not ready for a flood of applications.

The county of North Yorkshire has a coal mining history and is already home to conventional gas projects led by privately owned Moorland Energy and Third Energy in the Cleveland Basin. Part of that basin lies under the North York Moors National Park. It contains shale rock, the exploitation of which, through hydraulic fracturing or "fracking" and horizontal drilling, has transformed the U.S. energy industry.

Sirius Minerals, meanwhile, is planning one of the world's largest potash mines in response to booming global demand for the crop fertilizer, also within the national park's boundaries. It has found the going pretty tough, too.

"There's a huge amount of paper work to deal with. Everyone's watching; there's pressure on both sides," operations director Graham Clarke told Reuters at the drill site near the coastal town of Whitby, where a large red rig pierces a clear summer sky.

Read more: http://www.reuters.com/article/2013/07/16/britain-resources-yorkshire-idUSL6N0FL1GZ20130716.


Recycled water use on the rise in fracking operations

The oil and gas industry is finding that less is more in the push to recycle water used in hydraulic fracturing. Slightly dirty water, it seems, does just as good a job as crystal clear when it comes to making an oil or gas well work.

Exploration and production companies are under pressure to reduce the amount of freshwater used in dry areas like Texas and to cut the high costs of hauling millions of barrels of water to oil and gas wells and later to underground disposal wells.

To attack those problems, oilfield service companies like Halliburton, Baker Hughes and FTS International, are treating water from "fracked" wells just enough so that it can be used again. Smaller companies like Ecosphere Technologies Inc have also deployed similar methods.

"It is a paradigm shift," Halliburton's strategic business manager of water solutions, Walter Dale, said.

Until recently, many companies considered recycling too expensive or worried that using anything other than freshwater would reduce well output.

But oil and gas companies are increasingly treating and reusing flowback water from wells, which unlike freshwater is very high in salt, with good results.

Read more: http://www.chicagotribune.com/business/sns-rt-us-fracking-water-analysis-20130715,0,6573299.story.


Interior chief uses industry know-how to defend fracking rules

U.S. Interior Secretary Sally Jewell drew on her experience as a former oil-industry engineer to defend proposed federal regulation of hydraulic fracturing for oil and gas on publicly owned land.

Testifying to the House Natural Resources committee today, Jewell faced criticisms from Republican lawmakers, who said the department’s proposed rule on fracturing, or fracking, will lead to unnecessary production delays.

Fracking, in which water, sand and chemicals are shot underground to break apart rocks and free trapped gas, has soared as new technologies have opened up more and deeper resources of oil and gas. Interior’s rules would set minimum standards for well construction, disclosure of chemicals and water management when fracking is used on federal lands.

Lawmakers told Jewell that state regulators best know the local geology and the federal government should leave the regulation to them.

“The states vary in their understanding of hydraulic fracturing,” Jewell said. Some states, such as Wyoming, have strong rules, while “in many cases, the state rules don’t exist or are out of date.”

Further, no matter where a well is drilled, “having well-bore integrity is essential,” she said, using the technical term for cementing and casing wells to prevent leaks.

Read more: http://www.businessweek.com/news/2013-07-17/interior-chief-uses-industry-know-how-to-defend-fracking-rules.
 
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