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Oil and Gas Roundup — August 21

August 21, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

As oil boom continues, there’s no end in sight for job growth

Over three months between April and July, more than 10,000 new oil and gas jobs were created around the country.

Texas has surpassed 300,000 jobs in the oil and natural gas sector as the oil boom drives job growth for a fourth straight year.

According to the data released this week by the U.S. Bureau of Labor Statistics, the state gained more than 20,000 oil and gas jobs since July 2013, its largest increase since April 2013.
With hydraulic fracturing and horizontal drilling opening up vast reserves, the state has been drawing oil field workers from around the country eager to jump on rig crews where salaries start at around $70,000 a year.

“We have a lot of production increasing in the shale areas of Texas and North Dakota. And we’re seeing an upswing in the number of rigs in the gulf,” said Paul Caplan, president of Rigzone, which runs an online job board for the industry. “The competition for people is getting tough.”

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Conservationists: Collaboration can protect grouse and drilling

WASHINGTON — The best way to protect the greater sage grouse while keeping drill bits turning in Western states is for environmentalists and oil companies to work together on safeguarding the bird’s habitat, conservationists said Monday.

Ten conservation groups made the plea for “collaboration and compromise” in a letter to the Western Energy Alliance, an industry group that recently launched an advertising campaign blaming environmental activists and lawyers for exploiting “bad science and the courts to stop responsible energy development.”

That is an “over-generalization” of conservation-minded groups working to keep the bird off the endangered species list, said the letter-signers, including the Western Values Project, National Audubon Society, Natural Resources Defense Council and The Wilderness Society.

“Groups like ours are working diligently throughout the West, imploring all stakeholders to come to the table to achieve a workable, range-wide plan that protects existing rights, allows for needed new development, promotes other compatible uses and commits to conservation protections sufficient to avoid the necessity of the greater sage grouse being federally listed,” they wrote. “We feel strongly that the best path forward to achieving this goal is to genuinely collaborate with interested stakeholders, even those we might not always agree with.”

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Apache Australia oil find boosts potential sale value

Apache Corp. (APA), the U.S. oil producer weighing plans to sell international assets after investor pressure, announced the largest discovery in 20 years off the coast of Western Australia.

The Canning Basin may hold as many as 300 million barrels of oil, according to six samples from a well about 110 miles (180 kilometers) north of Port Hedland, the Houston, Texas-based company said today in a statement. Apache holds a 40 percent stake in the area that includes the Phoenix South-1 well. One of its partners, Carnarvon Petroleum Ltd. (CVN), rose the most in 24 years on the news.

“This discovery should help increase the attractiveness of the international portfolio to potential buyers,” Richard Tullis, an analyst at Capital One Southcoast Inc. in New Orleans, wrote in a note to investors today. The discovery should boost Apache’s value by $2 a share, he said.

Apache last month announced it will sell its stake in two natural gas export projects, including one in Australia, and consider a sale or separation of international assets. The announcement came after Jana Partners LLC, a New York-based hedge fund, disclosed a $1 billion stake in the company and said it was pushing for a split to free up cash for share buybacks and reduce spending risks.

Shareholders are pressuring global energy producers to cut spending and focus on drilling opportunities in the U.S., where oil output has reached the highest level in more than 25 years.

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Mother Jones gets it exactly backwards on hydraulic fracturing

Without the science on their side, anti-fracking activists have had to invent alternative realities to justify their claims.

A case in point is a recent Mother Jones piece by Chris Mooney, which argues that the “scientific case against fracking keeps getting stronger.”  Of course, exactly the opposite is true: the safety of hydraulic fracturing and the environmental benefits of natural gas are widely understood and anti-fracking activists are becoming increasingly more marginalized, even (as the National Journal recently pointed out) within the Democratic Party.

Against that backdrop, Mooney makes his case relying on the research of well-known anti-fracking activist Anthony Ingraffea, whose work over the years has been debunked by numerous scientists.

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New book documents hydraulic fracturing's promise for America

The new book Groundswell is a highly recommended read. It is more an economics and politics book than a science treatise, and there are plenty of issues in fracking economics and politics to discuss. In an easy conversational writing style, Ezra Levant powerfully debunks a litany of myths regularly asserted by anti-fracking activists.

Levant quickly dismisses the idea that hydraulic fracturing is anything new, noting the technique was first used on a vertical well in 1947 by Standard Oil and Gas Corporation, which patented the process in 1949. He also provides an illuminating discussion of horizontal drilling, which has gone hand-in-hand with hydraulic fracturing to launch our nation’s recent oil and natural gas renaissance.

Levant provides a bent-straw analogy to explain how a drill string turns over and ends up drilling horizontally, following a shale seam for thousands of feet instead of vertically for hundreds of feet. The modern process was first tried 10 years ago in a well in the Barnett Shale in Texas.

Levant correctly states fracking has revived America’s oil and natural gas industries, turning the United States into the Saudi Arabia of natural gas. The word “revolution” is tossed around liberally, but it truly fits our natural gas renaissance. He quotes a 2013 Goldman Sachs report stating fracking will give the United States an economic advantage in the world energy market for years to come.

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