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Oil and Gas Roundup — Nov. 26

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

Obama, GOP battle over credit for surging oil and gas production

Republicans and the White House are battling over whether President Obama deserves credit for oil and natural gas production that has surged in the last few years.
Many Republicans claim that Obama, who faces political headwinds over the botched ObamaCare rollout, is touting a U.S. success story he did nothing to enable.

“They looked at the numbers and they are trying to make good news out of anything nowadays, so they are going to try and take credit for this development, when we all know that this is not because of development on any federal lands,” Sen. Lisa Murkowski (R-Alaska) told The Hill recently.

U.S. oil production is at its highest point in the last two decades, import reliance is dropping, and natural gas production is at record levels.

Republicans frequently point to data showing the surge has occurred largely on the strength of production from shale formations outside the regions that the Interior Department regulates.

“This is because of development on state and private lands, and it has been fabulous, so let’s take advantage of that on the federal side as well,” said Murkowski, the top Republican on the Senate Energy and Natural Resources Committee.

House Republicans used debate over energy bills on their side of the Capitol this week to hammer the point that the production surge has been centered on state and private lands.

The bills, including a measure to mandate faster drilling permits on federal lands and make more areas available for drilling, are going nowhere in the Senate.

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Three key facts about new methane paper

A new study published by the Proceedings of the National Academy of Sciences suggests that EPA’s greenhouse gas inventory may be underestimating total methane emissions in the United States, possibly by as much as 50 percent. According to the authors, emissions from oil and gas production could be twice as high as EPA data suggest, if not higher.

But it’s worth noting a few key facts about the study, including some additional context that should prevent all of us from leaping to any particular conclusion based on this limited research.

KEY FACT 1: Looks at old operating environment.

As Andy Revkin of the New York Times pointed out: “It’s important to note that the new study is a snapshot of conditions in 2007 and 2008, before concerns increased about the need for tighter standards for gas and oil drilling operations.” In the oil and gas industry, ignoring a half decade of research and innovation is almost comical, even more so because the researchers suggest that snapshot is somehow indicative of the current operating environment!

KEY FACT 2: What’s the actual source?

The researchers used aircraft and observation towers to collect emissions data, analyzed it, and then plugged those findings into a model to estimate what the source(s) could have been. Contrast this, for example, to the data collected in the UT/EDF study earlier this year, which were the result of direct measurements. In other words, Miller, et. al., does not tell us definitively where the methane is coming from, only a guess (albeit an educated one) based upon mathematical modeling.

KEY FACT 3: More data mean better understanding.

The lead author of the study, Scot Miller, told NBC News that getting a handle on methane emissions “really requires a collaborative effort,” and that his study is one of many “different pieces of a much bigger puzzle.” That’s absolutely right, and as more research is done on this subject, we’ll all be better informed.

Additional research allows us to make better policy decisions, and — this is worth stressing — the constant innovation occurring within the industry is a result of credible scientific research, including the $81 billion invested in emissions reductions technologies over the past 12 years by the oil and gas industry.

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Feds reveal data behind ‘social cost of carbon’

The White House is publishing the data behind its decision to increase the “social cost of carbon,” which is used to calculate the benefits of regulations cutting greenhouse gas emissions.

The metric, which was revised upward earlier this year, has been a point of contention for the Obama administration and critics who say that it was developed in a “black box” without proper oversight.

The technical support document the White House is releasing will be open for public comment. Officials are especially interested in hearing how the three underlying assessment models are used to calculate the cost estimates, the way the carbon cost is used in analyses of regulations’ impacts and “the strengths and limitations of the overall approach,” the White House said.

The social cost of carbon is a monetary estimate of how carbon pollution affects health, the environment, rising sea levels and a range of other factors.

“Rigorous evaluation of costs and benefits is a core tenet of the rulemaking process,” the White House’s Office of Management and Budget said in a notice. “It is particularly important in the area of climate change."

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Despite pressure to ban hydraulic fracturing, majority of Coloradans support it

A majority of Coloradans supports hydraulic fracturing, despite pressure to put the screws to the controversial practice.

A recent poll released by Quinnipiac University finds that 51 percent support fracking for natural gas and oil, with 34 percent opposed. Republicans overwhelmingly support the practice by 80-9 percent, and Democrats are mostly opposed, by 54-26 percent.

The results came out at the same time that Colorado announced tough new air control standards — including for releases of methane — that place new regulations on oil and gas development. The regulations were written in consultation with some of the biggest energy companies operating in Colorado and represent a rare détente between the Colorado’s Democratic-controlled government and industry.

But Colorado Democratic Rep. Jared Polis — a foe of fracking who once filed a complaint with the state over a fracking rig near his weekend getaway — said earlier last week that the state lacks “common sense” regulations and puts homeowners at risk.

And Hollywood has recently gotten into the act as well, with celebrities like Darryl Hannah, Marisa Tomei and others recording a video to Hickenlooper urging him to ban fracking.

Despite the high profile pressure, industry groups are taking some comfort in the Quinnipiac poll.

“Despite the strong support for fracking, our work is far from over,” said Jon Haubert, spokesman for Coloradans for Responsible Energy Development, in a press release.
“In certain parts of Colorado, it’s evident that years of misinformation about fracking have had a negative impact on Coloradans,” he continued.

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Federal leaders urged to embrace opportunities for shale, manufacturing

The U.S. should take a holistic approach to shale gas development and regulations given its importance to manufacturing and consumers, as well as the energy sector, according to energy and manufacturing industry leaders.

Speaking during a panel discussion in Washington, D.C., at the Nov. 19 launch of the American Shale and Manufacturing Partnership, a new multi-stakeholder initiative focused on shale gas development and its impact on the supply chain for American manufacturing, the leaders stressed the need for policymakers to make the most of the shale revolution.

"It is critical that the opportunities created by natural gas are compounded to deliver a reconstruction of our manufacturing base that will produce good community-building jobs, reduce trade deficits, and enhance the competitiveness and security of our nation," said Walter Wise, general president at the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers.

Included among the opportunities are revenue and job growth, noted Karen Harbert, president and CEO of the U.S. Chamber of Commerce's Institute for 21st Century Energy. "If anyone hasn't realized it we are broke here in D.C. and natural gas brings in revenue. Energy is the best way for a home grown economy," Harbert said.

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