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Oil and Gas Roundup — Feb. 5

February 05, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Chesapeake hires former state secretary of environment

OKLAHOMA CITY — Chesapeake Energy Corporation announced that Miles Tolbert, former secretary of the environment for the state of Oklahoma, will join the company as Associate General Counsel – Environment, Health and Safety (EH&S) on Feb. 17. Tolbert will lead Chesapeake’s EH&S legal group and report to Jim Webb, Chesapeake’s Executive Vice President – General Counsel & Corporate Secretary.

“Miles recognizes the importance of exploring and producing energy while protecting people, communities and the environment. His impressive background in environmental law and policy pairs well with our commitment to operational excellence and integrity,” said Chesapeake CEO Doug Lawler. “I look forward to working with Miles to ensure our company operates in an environmentally responsible manner, focused on stewardship, safety and risk mitigation.”

Tolbert served as Secretary of the Environment for Oklahoma from 2003 to 2008. In this role, he was responsible for protecting and enhancing the state’s natural resources. In 2008, he joined the law firm Crowe & Dunlevy and chaired its Environmental Practice Group. Tolbert previously served as a trial attorney in the Environment and Natural Resources Division of the United States Department of Justice. Tolbert also served as Chief of the Environmental Protection Unit in the office of the Oklahoma Attorney General.

“Miles’ leadership as Oklahoma’s Secretary of the Environment and his extensive experience managing environmental and regulatory matters uniquely qualify him to lead our EH&S legal efforts," Webb said. "Miles will help maintain our absolute commitment to the highest EH&S standards, and we are thrilled to have him join our team.”

Tolbert received his undergraduate degree from Stanford University and his law degree from Harvard University. He resides in Oklahoma City with his wife, Molly, and two sons.

American Energy Partners raises additional $500M for Utica Shale development

After raising $1.7 billion last year for purchases in Ohio's Utica Shale, American Energy Partners LP has raised another $500 million in equity payments so that the company can continue pursuing purchases in the oil and gas industry.

A company affiliate, American Energy-NonOp LLC, plans on buying into onshore oil and gas operations, although it doesn't plan on running the operations itself.

The money came from Energy & Minerals Group, a private-equity investor that was also the primary source of last year's $1.7 billion. — The Oklahoman.

U.S. shale gas revolution rippling to broader economy, report says

The U.S. shale gas revolution is starting to have an effect on all aspects of the economy, the Independent Petroleum Association of America said in a new report.

In the report, the IPAA said natural gas now makes up 27.4% of total energy consumed in the U.S., making it the second-most-used energy source, behind oil. The overwhelming majority of that gas — 94% — is produced domestically, the highest percentage in a quarter century.

"The shale technology revolution has made all-time record amounts of natural gas available to the domestic market," the IPAA said. "This abundance has provided benefits in electric power, the fastest growing demand sector, as well as industrial and transportation markets."

The affordability of gas has been reflected in the power generation sector, as gas-powered generation increased from 15% in 2005 to 24% of the nation's total by 2012, surpassing nuclear power at 21%.

"So far in 2013, natural gas usage for power generation, though it has moderated from 2012 levels, remains more than seven percent above the same January-September period for recent years," the IPAA said.

The oil and gas advocate also noted the recovery of U.S. industry, which is relying largely on natural gas as a feedstock. The IPAA also said interest in natural gas as a transportation fuel is increasing, with long-haul trucks and buses leading the way.

"Many municipal bus systems have adopted natural gas fleets, with one-fifth of all transit buses running on natural gas, according to the American Public Transit Association," the group said. "Some long-distance trucking companies have added natural-gas powered trucks, and even some exploration companies have included natural-gas powered vehicles in their operations. Railroads are interested in natural gas as a potentially economical fuel, while heavy equipment manufacturers are also exploring similar options."

The IPAA also discussed the possibility of LNG exports, noting that natural gas liquids exports have jumped from 60,000 barrels per day in 2005 to more than 450,000 bbl/d from January 2013 to October 2013. That increase, the group said, shows the potential broad market for American LNG exports.

"Even with current and any future government approvals, there is no guarantee that all projects will be built or be economic, but the export potential is worth monitoring given the incredible supply unlocked by producers," the IPAA said.

Economist: Shale gas can do more than green energy to combat climate change

BRUSSELS, Belgium — Shale gas offers a cheaper way to replace coal and cut greenhouse gas emissions than renewable power, BP's chief economist said on Tuesday, but dismissed claims that failure to develop it would drive industry out of Europe.

The comments from one of energy's most senior economists feed into heated debate ahead of a summit meeting of EU leaders in March about whether Europe faces a disadvantage to the United States because of high energy costs.

BP's Energy Outlook to 2035 has predicted unconventional gas, including shale, will account for 21 percent of all gas produced by 2035, up from 8 percent in 2012.

Almost none of that will be in Europe as "above ground factors", chiefly local politics, stand in the way, Christof Ruehl said in an interview.

The shale gas revolution in the United States has led to intensive lobbying in Brussels from industry and states, such as Britain and Poland, which argue their competitiveness is damaged because European gas prices are between three and four times higher than in the United States.

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Houston companies predicted to be the big winners under Mexico's energy reform

Mexican oil industry reforms are expected to result in an estimated $1.2 trillion of investment in the  Eagle Ford Shale play, which runs along the Texas-Mexico border. Much of the work is expected to go to Houston-based energy companies, Birmingham, Ala.-based BBVA Compass said Tuesday.  

In a conference call, BBVA economist Marcial Nava said that the border region, which is home to some 38 million people, will see about one-third of the money that's expected to flow into the Mexican oil industry since the government voted last month to open up the industry to private investment.

"Mexico's energy reform will bring more economic activity, which will help all the Texas border cities to reduce the disparities between rural border towns and big cities like Dallas and Houston," Nava said.

The first beneficiaries of Mexico's energy reform will likely be big multinationals such as Exxon Mobil, Chevron and BP, all of which have a large presence in Houston and expertise in deepwater exploration, Nava said.

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