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Oil and Gas Roundup — August 26

August 26, 2013
TOPICS: In the news
A roundup of oil and natural gas news from around the state, nation and world:

Is the U.S. shale revolution replicable?

Despite the fact that only 9.1 percent of shale gas resources and only 16.8 percent of shale oil resources are located inside the United States, the shale revolution largely remains a phenomenon unique to the United States. This has led many people to ask, is the U.S. shale revolution replicable elsewhere in the world?

Four obstacles currently hinder the pace and expansion of shale development outside the United States — the players involved, unfavorable market forces, no private ownership of minerals and legal and regulatory uncertainty.

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Report: Oil and gas can boost economies and outdoor recreation

Oil and gas development can coexist with hiking and hunting — and sometimes even fosters that outdoor recreation — according to a new study on how counties are balancing the activities.

The research, conducted by professors from two Utah universities and funded by the American Petroleum Institute, relies on case studies from 16 counties in California, Pennsylvania and six other states as evidence that areas fare better economically when they take an equitable approach to energy development and natural amenities.

“Energy and amenity development are not mutually exclusive,” said Southern Utah University political science professor Ryan Yonk and Utah State University economics professor Randy Simmons. “Because both energy and amenity resources provide value to a county, when counties have both resources they tend to develop both, and in a way that allows both sectors to grow.”

The oil industry-funded report is the latest to make the case for a measured approach to conservation and energy development. Earlier this month, the Center for American Progress issued its own “Blueprint for Balance” arguing that the United States can expand oil and gas production in ways that are economically sustainable and environmentally sound — with full buy-in from the public.

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TransCanada says Gulf Coast pipeline more than 90% complete

REUTERS — TransCanada Corp said on Tuesday its 700,000 barrel per day Gulf Coast pipeline project is now over 90 percent complete and the company expects the line to be in service by the end of 2013.

TransCanada spokesman Shawn Howard said testing and commissioning activities were underway on the line, which runs from Cushing, Oklahoma, to Nederland, Texas, and is the southern leg of the controversial Keystone XL project.

"Our testing and commissioning work will take place over the next few months and we continue to focus on bringing the line into service in late-2013," Howard said in an email.

N.D. wants 'a better plan' on flaring natural gas

BISMARCK, N.D. — North Dakota’s top oil regulator said Wednesday about 1,500 oil wells around the Oil Patch are flaring natural gas and not connected to a pipeline.

Of those, he said upwards of 450 are in such remote locations, it’s unlikely they will ever get connected.

“We want to do something to encourage them to implement new well processes,” said Lynn Helms, director of the Department of Mineral Resources. “We may not be able to get at the number of wells flaring, but we can affect the volume of gas flared.”

Helms brought the issue before the North Dakota Industrial Commission to get direction about clamping down on oil and gas companies that are flaring the natural gas produced from oil wells.

Last week, Helms reported that oil and gas developers flared off 28 percent of the natural gas produced in June. The percentage has come down slightly from it peak, but the overall number of producing wells in the state has been increasing.

The state’s goal is to get that percentage to below 10 percent.

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Colo. oil industry responds to HF ban ballot initiative

FORT COLLINS, Colo. — A decision by the Fort Collins City Council to authorize a special election on whether to pass a hydraulic fracturing moratorium has drawn ire from oil industry representatives.

Residents will vote Nov. 5 whether to pass a five-year fracking ban in the city following Tuesday night's unanimous vote by City Council. Fracking involves pumping water containing sand and chemicals into a drilled hole deep underground to free oil and natural gas trapped in shale formations.

The vote comes after Citizens for a Healthy Fort Collins submitted a petition with more than 8,000 signatures to the city earlier this month calling for an ordinance enacting a moratorium. The activist group contends that fracking threatens people's health and property values.

"It's hypocritical to say, 'Well, our community doesn't want to be participating in the development of the resources we use everyday and that somebody else's community ought to be producing that energy,'" said Stan Dempsey, president of the Colorado Petroleum Association.

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Why sand is the latest front in the war on hydraulic fracturing (yes, sand)

The anti-fracking crowd hasn’t been successful enough manufacturing unfounded fears about groundwater pollution to cause any meaningful slowdown in shale drilling and hydraulic fracturing. So they’ve found a new target for their antagonism — sand dust.

The process, of course, requires hundreds of tons of sand, enough to fill dozens of rail cars, for each well. That sand has to come from somewhere, and in recent years even oil companies like EOG Resources have bought and built their own sand mines, many of them up in Wisconsin and Minnesota.

Those states are blessed with an abundance of fine-grained sand perfect for injecting down into shale formations. In the past three years more than 100 mines have reportedly sprung up. The USGS figures that sand mining is up 60 percent in two years to nearly 50 million tons a year.

Towns like Winona, Minn., are now facing calls for the monitoring of silica dust and diesel fumes emitted by the sand mines. There’s a real concern that when tiny particles of airborne silica are inhaled and get lodged in the lungs they could lead to silicosis.

It’s hard to make a legitimate argument about truck traffic — that’s what roads are for. But could air quality concerns around sand mines be a real problem? The oil companies don’t think so. EOG Resources has reportedly begun monitoring conditions at their mines and has found that dust does not exceed state standards.

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