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Oil and Gas Roundup — Feb. 10

February 10, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

U.S. rig count down 14 to 1,771

Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. declined by 14 this week to 1,771.

The Houston firm said in its weekly report Friday that 1,416 rigs were exploring for oil and 351 for gas. Four were listed as miscellaneous. A year ago there were 1,759 active rigs.

Of the major oil- and gas-producing states, Texas gained three rigs, Kansas was up two and Ohio rose by one.

West Virginia was down by four, Louisiana declined by three, while Alaska, North Dakota, Pennsylvania and Wyoming each dipped by one. Arkansas, California, Colorado, New Mexico, Oklahoma and Utah were all unchanged.

HF firms not to blame for water worries in Texas

The oil and gas industry has been the subject of a variety of fear-based attacks from left-wing activist groups in recent years, and the last week has seen a new one arise. An activist group out of Boston, Ceres, issued a report on Feb. 5 that is aimed at raising fears among large investors in oil and gas companies that the companies whose stock they hold may have a hard time sourcing water for their hydraulic fracturing operations in the coming years.

Unlike most of the fright scenarios raised by conflict groups around hydraulic fracturing in recent years, the Ceres report at least has some elements of truth around it. To wit:

Several of the large shale plays in Texas and around the country happen to be situated in areas that are in drought conditions and/or have historically been water-poor regions;

Hydraulic fracturing jobs use millions of gallons of water - between 4 and 5 million per well in the Eagle Ford region, for example;

Oil and gas operators often find themselves attempting to source water from the same underground reservoirs used for agriculture, power generation and municipal uses; and,

Operators in the Eagle Ford Shale region used about 19 billion gallons of water for hydraulic fracturing in 2013;

All of this is true. I've written about these and other realities extensively at and other places in the past three years.

But there are some things the Ceres report and most of the news stories covering it did not tell you.

Read more:

Photos confirm flaming water existed before hydraulic fracturing in 'Gasland' incident

Photos from 2005, recently uncovered from court documents, show that flaming water existed years before hydraulic fracturing began in Parker County, Texas, the website EnergyInDepth reports.

A hydraulically fractured well in Parker County was the source of the infamous “flaming hose” scene in Josh Fox's “Gasland Part II,” which has already been debunked. The photos below are from a water well just a half-mile away from the well that produced the "Gasland" hoax.

Range Resources, the company accused of well contamination (and then exonerated), did not start drilling in Parker County until 2009, nearly half a decade after the photos above were taken.

Despite anti-HF activists’ claims that the water only began flaming after Range began drilling, the evidence shows that naturally occurring methane in the region’s water supply was the real culprit. Another photo, of a well drilled in 2003, shows a water well in the same region with two “danger” signs warning of flammable gas.

Of course, a video of a man with a hose attached to a gas line is far more powerful than any scientific evidence — or the blessings of Obama administration officials.

On Wednesday, former Interior Secretary Ken Salazar again confirmed that there has not been “a single case where hydraulic fracking has created an environmental problem for anyone.”

Salazar, along with President Obama's former Energy Secretary Steven Chu, said in September that fracking was “safe.”

Both former Environmental Protection Agency Administrator Lisa Jackson and current Energy Secretary Ernest Moniz have said that there is no evidence of groundwater contamination due to fracking.

Add to that support the recent discrediting of anti-fracking activists' favorite study, and the entire anti-fracking movement appears to be going out with the wastewater.

Read the original article:

Oil, gas powering manufacturing growth

American Petroleum Institute chief economist John Felmy said increased U.S. oil and gas production is driving growth in the manufacturing sector.

Felmy said new drilling technologies like hydraulic fracturing and horizontal drilling have put the United States "in a position of strength" economically.

"Domestic oil and gas production also is powering a resurgence in U.S. manufacturing as businesses take advantage of affordable and abundant energy supplies here in the United States," he said in a statement Thursday.

A report from the Department of Commerce said the trade deficit for goods and services in December was 12 percent worse than in the previous month, suggesting the global economy is slow to expand.

The report said, however, that the United States imported 2.8 billion barrels of crude oil in 2013, a 9.2 percent decline from the previous year and the lowest total the mid 1990s.

Read more:

Republican lawmakers divided on oil exports

Oil companies eager to sell U.S. crude overseas are pushing Congress to relax a 39-year-old ban on those exports, but even reliable allies on Capitol Hill are wary.

House Republicans are far from unified on the issue, said Rep. John Shimkus, R-Ill., during a Politico forum on energy policy Thursday. Shimkus described a kind of “schizophrenia” on Capitol Hill and in the GOP caucus as lawmakers grapple with the potential consequences of lifting crude export restrictions.

“Crude oil is a basic commodity product. There’s an argument that if it’s like corn and beans, crude oil should be able to price (and be sold) on the world market,” he said. But there are potentially greater domestic returns if the U.S. “could expand our refinery capacity and sell and export refined product,” instead of just the raw crude.

The Republican Study Committee’s energy task force is examining the issue. Rep. Joe Barton, R-Ennis, who heads that panel, said he sees both sides.

Read more:

The Weekly Oil & Gas Follies

Each week, Forbes and Energy In Depth columnist David Blackmon will “briefly chronicle the week’s silliness, foibles, fake news and real news related to the oil and natural gas industry.”

Check out this week's here:
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