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Oil and Gas Roundup — August 22

August 22, 2013
TOPICS: In the news
A roundup of oil and natural gas news from around the state, nation and world:

Pennsylvania vies for being No. 2 U.S. gas producer

The Marcellus shale drilling boom is living up to its supporters' optimistic assessments and is rearranging the national landscape, putting Pennsylvania in competition with Alaska and Louisiana to be the country's second-biggest gas producer in 2013.

Pennsylvania has shot from seventh in 2011, according to state and federal data, and clearly trails only Texas.

The shale boom has buoyed Pittsburgh's energy sector, steadily rising to 46,644 employees in 2012, up a more than a third since 2005, according an assessment of federal data released Friday.

Pennsylvania drillers produced 1.4 trillion cubic feet of natural gas from the shale in the first half of 2013.

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How anti-fracking activists deny science

A common talking point among critics of hydraulic fracturing is that they somehow own “the science” on shale development. The industry is merely raising doubt about scientific studies, they claim — just enough to confuse the public and make them think there’s a legitimate debate. As the Washington Post recently characterized Gasland Part II director Josh Fox’s opinion:

“Fox frets in the movie that all the industry needs to do is instill doubt about his charges, comparing the gas drillers’ campaign to the one by cigarette makers in the 1950s and 1960s to counter claims of the health dangers of smoking.”

But reality tells a much different story. In fact, it is often opponents of hydraulic fracturing who categorically ignore scientific studies that contradict their own beliefs. Whether it’s groundwater contamination or air pollution, earthquakes or well casing failure rates – the available data, when taken in their entirety, tell a fundamentally different story from what critics have alleged. More often than not, activists leverage anecdotes and examples devoid of their full context in order to cast the widest net and implicate “fracking” as an inherent threat — a “tornado on the horizon” that kills people, as activist Sandra Steingraber puts it.

If anyone is “instilling doubt” about what most people would recognize as a consensus, it is more likely those committed to halting the use of hydraulic fracturing.

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Jobs in Colorado's oil and gas fields swell to nearly 30,000

Oil-industry employment is up in Colorado even as total economic output has fallen, underscoring the industry's volatile nature, according to a University of Colorado analysis.

The number of people working in the state's oil and gas fields has swelled to 29,254 — a 34 percent increase in four years, according to the report.

The assessment of the industry's contribution to the Colorado economy in 2012 was done by CU's Leeds School of Business.

"The sector is very labor-intensive, and it is all happening here in Colorado because it is tied to the resource in Colorado ground," said Brian Lewandowski, the report's co-author.

"It isn't as if part of this can't be done in a factory someplace else," he said.

While total economic output was down, public revenues from the industry — such as taxes, public leases and royalties — rose 45 percent to $1.6 billion compared with 2010, according to the study.

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The Democrats’ coming civil war over hydraulic fracturing

You knew that at some point, the Democrats with constituents who would benefit from the jobs that can be created through fracking — i.e., blue-collar voters and their representatives — and the Democrats who see fracking as a chainsaw massacre of Gaia’s baby seals would conflict.

Democrats have largely papered over these differences, but you can only kick the can down the road so many times.

Now that simmering dispute is boiling over . . . in Pennsylvania.

Battle lines were drawn in June when the state committee passed a resolution calling for a moratorium on fracking until health and environmental concerns in the state are more clearly addressed. Though the resolution was little more than a position statement, debate over it was intense and emotional.

But the 115-81 vote didn’t put an end to the debate, and emotions continued to run high among commonwealth Democrats.

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A view from the front lines of the shale boom

HOUSTON — At the North American Prospect Exposition held last week in Houston, Texas, attendees had mixed emotions about the state of the oil and gas industry.

Despite their achievements, like reshaping the global geopolitical landscape and revitalizing vast swaths of the U.S. economy, oil and gas professionals worry about what’s next. They face unwelcome news from many fronts: the shale land rush appears to be over, oil and gas stocks are out of favor among institutional portfolio managers and M&A deal flow is on track to sink this year versus last year.

Globally, there are about $80 billion in oil and gas assets on the market, according to Dan Pratt, a director with IHS. A meaningful chunk of those assets were showcased at NAPE, where oil and gas exploration companies from all over the US come together to buy, sell and trade billions of dollars in oil and gas prospects.

Booths were abuzz with discussions of well economics in the SCOOP (South Central Oklahoma Oil Play), or the prospectivity of West Texas acreage for the Cline Shale.

Don’t think Exxon, Chevron or ConocoPhillips. These were small, independent operators who take high risks for high rewards.

As one independent operator observed, “A supermajor couldn’t find shale with a shale detector.” While this may be hyperbole, a common affliction among oil and gas entrepreneurs, it is true that the shale boom was sparked and led by independent operators like the “father of fracking,” the late George Mitchell.

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