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Oil and Gas Roundup — July 25

July 25, 2013
TOPICS: In the news
A roundup of oil and natural gas news from around the state, nation and world:

ONEOK announces plan to spin off natural gas distribution business

ONEOK Inc., announced Thursday morning that it plans to spin off its natural gas distribution business into a new publicly traded company.

Additionally, the company announced that ONEOK Inc., and ONEOK Partners LP chairman and CEO John Gibson will retire after the new company has been established. The proposed company would be called ONE Gas Inc., comprised of the Oklahoma Natural Gas Company, Kansas Gas Service and Texas Gas Services. The headquarters will remain in Tulsa.

 “We are confident that through this new structure ONE Gas will be well positioned for long-term success as a standalone company,” Gibson said in a press release. “It will have the ability to raise its own capital to grow its rate base, while paying a competitive dividend consistent with its natural gas utility peers. ONE Gas will continue to deliver safe, reliable and efficient service to its customers.”

The plan, unanimously approved by the ONEOK Inc. Board of Directors, would offer a pro-rata dividend of shares of stock in the new company and retain their current shares of ONEOK. The number of shares is to be determined at closing, expected early next year.

ONE Gas will be one of the largest natural gas utilities in the United States with 2 million customers and will be the only publicly traded, 100 percent regulated, pure-play natural gas distribution utility in the United States.

Read the full Tulsa World story here.

New report puts numbers on natural gas job growth

Times are tough all over. Except, that is, in the natural gas industry.

Nestled among the headlines of job losses and a weak economy are increases in businesses and jobs in one sector.

A new report from Raymond Keating, chief economist of the Small Business and Entrepreneurship Council, shows the stark contrast.

“It's fun talking about this issue in a bad economy, because I’m an optimist at heart,” Keating said. “The increase in natural gas production nationally is a 27 percent increase from 2005 to 2011. 

“In West Virginia, the increase over that same time period is almost 80 percent.”

He said the council looks at “a whole host of issues” from a small business perspective, and an important distinction to make is that industries the public typically thinks of as “big,” such as “big oil,” or “big pharmaceuticals,” are actually most often made up of many small firms.

“When you look at each sector (of the natural gas industry), roughly 75 to 80 percent of the establishments have less than 20 employees,” Keating said. “So when you’re talking about energy, you’re talking about small business.”

Click here to read more at The (West Virginia) State Journal.


Mineral rich Australia may contain world’s next major oil find

Australia’s massive mineral exports allowed it to weather the global recession, which began in 2008, quite nicely.

The U.S. government’s Energy Information Administration noted in its country’s analysis for Australia, “Australia, rich in hydrocarbons and uranium, was the world’s second largest coal exporter in 2011 and the third largest liquefied natural gas (LNG) exporter in 2012. Australia is rich in commodities, including fossil fuel and uranium reserves, and is one of the few countries belonging to the Organization for Economic Cooperation and Development (OECD) that is a significant net hydrocarbon exporter, exporting over 70 percent of its total energy production according to government sources. Australia was the world’s second largest coal exporter based on weight in 2011 and the third largest exporter of liquefied natural gas (LNG) in 2012.” 

Six months ago Brisbane company Linc Energy Ltd.Energy released two reports, based on drilling and seismic exploration, estimating the amount of shale oil in the as yet untapped 30,000 square mile Arckaringa Basin surrounding Coober Pedy ranging from 3.5 billion to a mind boggling 233 billion barrels of oil.

If the upper end estimates are correct then it means that the Arckaringa Basin is six times larger than the Bakken, seventeen times the size of the Marcellus formation, and 80 times larger than the Eagle Ford U.S. shale deposits.

Read more at The Economic Voice.


Columnist: Shale oil and gas development is heavily regulated

In “Gasland,” director Josh Fox ’s first fake documentary about hydraulic fracturing, the false claim was made that the oil and gas industry is somehow exempt from the Clean Air Act and other major federal environmental laws.

Mr. Fox continues to make this false claim — often referring to it as the Halliburton Loophole — despite it having been completely and thoroughly debunked, even at liberal blog sites like The Daily Kos, which recently had this to say on the subject:

“First, here is the actual truth of the matter … Dick Cheney didn’t do any harm to the Federal Clean Air Act because there is no ‘Halliburton Loophole’ statutory law amendment of the Clean Air Act contained in the Energy Policy Act of 2005; you can read it here for yourself. 

“Because I’ve been tracking Congressional action on the Federal Clean Air Act for the last 37 years I can tell you with 100% certainty that the Federal Clean Air Act has never been amended to incorporate a categorical oil and gas industry exemption from the fundamental jurisdictional requirements of the Act.

“Josh Fox’s claim that the oil and gas industry has some sort of categorical exemption from regulation and that hydraulic fracturing and other oil and gas industry process equipment and facilities are exempted from regulation under the Federal Clean Air Act is fabrication and erroneous conflation.”

But Mr. Fox is far from the only anti-fractivist who makes this demonstrably false claim.

Read more at Forbes.


Column: How the energy industry should respond to HBO’s thoroughly refuted ‘Gasland II’

On July 8, “Gasland, Part II” came out to much fanfare. The movie’s thesis is that the oil and gas industry is, through hydraulic fracturing and political manipulation, destroying our planet-especially our drinking water.

Numerous specific companies are cast as villains, such as Cabot Energy, Devon Energy and Range Resources. And, not surprisingly, the media has given the film, and filmmaker Josh Fox, loads of positive coverage — even though the movie has been thoroughly refuted. What can the industry do to respond effectively?

In my experience, a lot. As an energy philosopher who routinely argues on college campuses for the big-picture benefits of fossil fuels, I know firsthand that it’s possible to inoculate Americans against anti-energy propaganda. But it requires a radically different approach than most in the oil and gas industry are used to.

Here are six tactics that my organization, Center for Industrial Progress, and our clients use.

1. Be proactive — Have you heard the classic story about Napoleon who, when asked what he, as the greatest general of all time, would do in response to a seemingly impossible situation? Napoleon’s response was: As the greatest general of all time, I wouldn’t have gotten there in the first place.

Read more at Forbes.


Chevron draws Europe toward natural gas independence

Chevron Corp. is betting it can win over eastern Europeans with the idea of energy independence even after dry wells and government delays led Exxon Mobil Corp. and Talisman Energy Inc. to scrap efforts to tap natural gas deposits in Polish shale.

Bringing shale drilling to Europe from North America promises to help the region ease years of dependence on Russian fuel and hurts the Kremlin’s ambition to secure the country’s future as an energy superpower. Use of hydraulic fracturing upended the U.S. gas industry, which overtook Russia as the biggest producer, driving prices to a decade-low.

“This resource could certainly enhance energy security within Europe and also bring enormous economic benefits,” said Ian MacDonald, Chevron vice president for Europe, Eurasia and the Middle East. “Chevron believes that upon learning how these hydrocarbon resources can be explored for and developed safely, the governments and citizens of central Europe will be supportive.”

President Vladimir Putin is pushing investment in Russia’s gas industry, with new fields and a pipeline to Asia planned.

Chevron has leased or licensed for exploration 5.6 million acres in Poland, Ukraine, Romania and Bulgaria, an area the size of New Jersey. Its joint venture in Lithuania has a license for about 600,000 acres, and Chevron is applying for another 450,000. In Ukraine alone it agreed to spend $400 million on exploration. Royal Dutch Shell Plc  won rights to explore for shale gas in the Yuzivska field in Ukraine’s Kharkiv region in May 2012, and signed a production sharing agreement in January.

Read more at Business Week.

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