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Oil and Gas Roundup — Jan. 6

January 05, 2015
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Local fracking bans 'wrong way to go' — Jewell

Banning the practice of hydraulic fracturing is the "wrong way to go" for municipalities worried about the practice, Interior Secretary Sally Jewell said in an interview with KQED.

"There is a lot of misinformation about fracking," Jewell said. "I think that localized efforts or statewide efforts in many cases don't understand the science behind it, and I think there needs to be more science."

Jewell said local bans and New York's recent statewide ban on the oil and gas production technique are an example of residents and politicians legislating their fears.

"It's going to be very difficult for industry to figure out what the rules are if different counties have different rules," she said.
But, Jewell said, the responsibility to educate the public about hydraulic fracturing lies with the industry.

"I've made it very clear to industry that it's not my job to defend their practices; it's their job to both ensure their practices are safe and then communicate with communities that their practices are safe," she said.


U.S. rig count down by 29 to 1,811

Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. plummeted by 29 last week to 1,811.

The Houston firm said Monday in its weekly report that 1,482 rigs were exploring for oil and 328 for gas. One was listed as miscellaneous. A year ago 1,751 rigs were active.

Of the major oil- and gas-producing states, none showed any gains.

Texas plunged by 12, California dropped by six, Colorado fell by three, Louisiana declined two and Alaska, Arkansas, New Mexico, Ohio, Pennsylvania and Wyoming were down one apiece.

Oklahoma, Kansas, North Dakota, Utah and West Virginia were unchanged.

The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.


Expect nonstop energy drama in 2015

President Barack Obama’s administration will spend 2015 taking on energy controversies from fracking to smog, from interstate air pollution to coal-burning power plants — and in December, his negotiators will head to Paris to try to reach a global agreement on climate change. In between all that, he just might make a decision on the Keystone XL pipeline.

It should all add up to one of the most ambitious years in energy and climate policy in decades, from a president who is free to act with no more elections to face, no further concern over protecting the Senate’s moderate Democrats, and not much chance of compromise on these issues with the GOP-held Congress.

But Republicans, with the Senate under their control, vow to wield their spending and investigative powers to ensure none of this goes down easily.

The collision between a strengthened GOP and a president with just two years to cement his legacy will be one of 2015’s biggest policy dramas, while setting markers that will have repercussions for the 2016 presidential campaign.

“As I’ve watched the president’s actions since November, it has become clear to me that he is intent on making the environment the bedrock of his legacy,” Sen. Jim Inhofe (R-Okla.), the incoming chairman of the Senate Environment and Public Works Committee, said in statement at a recent hearing on a proposed EPA ozone rule. He vowed to bring “more rigorous oversight.”

Read more: http://www.politico.com/story/2015/01/expect-nonstop-energy-drama-in-2015-113783.html#ixzz3NzVwlf7y


Hydraulic fracturing not a major aquifer user

A report on water use for fracking in Texas finds that it is not the only or even the most significant contributor to the longstanding problem of water use in Texas.

The policy brief by The Mosbacher Institute for Trade, Economics and Public Policy at Texas A&M University is based on a study that looks closely at water use in the Eagle Ford Shale formation in south Texas where fresh groundwater aquifers are overdrawn by nearly 2.5 times their recharge rate.  Hydraulic fracturing operations there make up the third largest use of groundwater, well behind irrigation, the primary use.  However, hydraulic fracturing does requires large amounts of water, roughly five million gallons, for each well.

The report also notes that while fracking consumes a smaller share of water, it permanently removes water from the hydrological cycle, unlike other uses.  It suggests that oil and gas companies could be offered severance tax reductions to substitute brackish groundwater for fresh groundwater and be given a “Green Star” designation for limiting fresh groundwater use.

More broadly, the report urges much more accurate and transparent data reporting of all use of water and policy changes to address inefficient water use in all sectors.

The state of Texas could face a 2.7 trillion gallon shortfall of water by 2060.

— hppr.org


New York HF ban bad for state, residents

The recent decision by New York Governor Andrew Cuomo to ban hydraulic fracturing in the state will likely hurt economically depressed areas of the state, according to industry experts.

“While cities and states want to govern within their borders, the decision to eliminate fracking can not only hurt the local rural economy, but it will also affect families and businesses,” Mark Plummer, founder and chairman of Dallas-based Chestnut Exploration & Production, told Rigzone in a statement.

“We have seen how it has helped the communities right across the border in Pennsylvania," he said. "Hydraulic fracturing provides jobs, economic boosts in capital and an influx in visitors to small towns.”

Michael Joy, a partner with law firm BakerHostetler who focuses on conventional and unconventional oil and natural gas development in New York, was equally unequivocal.

“The industry’s reaction will doubtless be to recognize this as another sad political commentary on New York’s handling of its natural resources development,” Joy told Rigzone in a statement.

“New York is a substantial consumer of oil and natural gas, and its residents and rate payers have enjoyed a decline in their home heating cost as a result of the prolific production of the Marcellus shale just across its borders. Yet, New York continues to take not only a ‘not in my backyard’ attitude, but also a ‘not in your backyard’ attitude,” he said.

The result is higher prices for people living in New York, according to the Texas Alliance of Energy Producers President and Chief of Staff Alex Mills.

— RigZone
 
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