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Oil and Gas Roundup — Feb. 17

February 17, 2015
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Shale strengthening U.S. hand in international affairs

It’s clear that shale development has revitalized the U.S. economy and greatly enhanced our energy security, but many people do not realize the extent to which it has made an impact on international affairs.

That was a topic of discussion at a Georgetown University School of Foreign Service event titled, “An Energy Revolution? The Political Ecologies of Shale Oil in the Middle East, US and China.”  As one of the panelists, Dr. Thomas McNaugher, a current Georgetown professor and Council on Foreign Relations member, said, “Fracking has actually helped in imposing sanctions on Iran.  We’ve taken their oil off the market [and] we’ve brought more than that on the market through our fracking, so fracking has actually helped there.”

McNaugher added that natural gas exports could also be a geopolitical game-changer and potentially displace Russian energy supplies to Europe and Asia. “[I]f you begin to export east and west, it might actually affect Putin’s leverage,” he said.

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Faulkner: Earthquakes shouldn’t dislodge the facts about hydraulic fracturing

The American Southwest is undergoing a spike in seismic activity. A new U.S. Geological Survey shows that a small basin on the New Mexico-Colorado border experienced 20 times more serious earthquakes between 2001 and 2011 than it had over the previous 30 years. There have been similar tremor spikes throughout the country.

Some media accounts have been quick to blame this on hydraulic fracturing. Also known as "fracking," this technique involves injecting a high-pressure mixture of water, sand, and other fluids to break up underground rock structures and free up embedded oil and gas.

One prominent columnist claimed "fracking may be inducing earthquakes." The online journal Salon simply declared that the "earthquake epidemic is linked to fracking." And NBC News published a story with the bold title of "Confirmed: Fracking practices to blame for Ohio earthquakes."

This thinking is completely off-base. There's ample evidence indicating that fracking doesn't cause earthquakes. And spreading the lie that it does could lead to policies that undermine job creation and economic growth in the energy industry.

Some fracking operations do create very small seismic events. But, as Stanford geophysicist and former Obama administration energy advisor Mark Zoback has noted, these events "pose no danger to the public." In fact, research has shown that these very slight tremors release about the same amount of energy as a gallon of milk falling off a kitchen counter.

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Environmental poll? Buyers beware

Last week, a group trying to convince Massachusetts Sen. Elizabeth Warren to run for President released a much-hyped poll. The results from Iowa and New Hampshire show 31 percent of respondents supporting Warren in a Democratic primary or caucus, versus just 26 percent supporting Hillary Clinton. Compare that result with those of a Bloomberg Politics poll released earlier this month, in which 56 percent of Democratic primary voters said Clinton would be their first pick, over Warren’s 15 percent.

Seems crazy…yes, but it is all about how the poll is taken.  And in this case, the poll includes a string of ten leading questions that paint Warren in an exceedingly favorable light to lead to the result.

While this only happens occasionally in politics, in polling on the environment, this approach is more like the regular order.  I have written several times about polls on the environment and how irrelevant they are because America doesn’t understand the complex issues surrounding the politics and policies of our environment.

We were reminded of it again recently when a poll conducted by the New York Times, Stanford University and Resources for the Future, found 61 percent of Republicans said that if nothing is done to reduce emissions, climate change will be a very or somewhat serious problem in the future. Of the Republicans polled, 51 percent said the government should be fighting climate change.

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Drilling rigs in Oklahoma down by five to 171

The number of drilling rigs actively exploring for oil or natural gas this week in Oklahoma decreased by five to 171, Baker Hughes Inc. reported on Friday. The tally is down 11 from a year ago when it was 182.

Nationwide, the net number of active drilling units decreased by 98 this week to 1,358, said Houston-based Baker Hughes. The total is down 406 rigs from a year ago, when it was 1,764.

Of the rigs operating this week across the U.S., 1,056 rigs were exploring for oil, 300 for gas and two for miscellaneous.

Of the other major oil- and gas-producing states, Texas' count plummeted by 56, New Mexico fell 12, North Dakota fell nine, Colorado lost six, Wyoming fell three, Ohio and West Virginia each lost two and Arkansas fell one.

Louisiana gained one. Alaska, California, Kansas, Pennsylvania and Utah were unchanged.

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

Germany moves to legalize hydraulic fracturing

Germany has proposed a draft law that would allow commercial shale gas fracking at depths of over 3,000 metres, overturning a de facto moratorium that has been in place since the start of the decade.

A new six-person expert panel would also be empowered to allow fracks at shallower levels

Shale gas industry groups welcomed the proposal for its potential to crack open the German shale gas market, but it has sparked outrage among environmentalists who view it as the thin edge of a fossil fuel wedge.

Senior German officials say that the proposal, first mooted in July, is an environmental protection measure, wholly unrelated to energy security concerns which have been intensified by the conflict in Ukraine.

“It is important to have a legal framework for hydraulic fracturing as until now there has been no legislation on the subject,” Maria Krautzberger, president of Germany’s federal environment agency (UBA), told the Guardian.

“We have had a voluntary agreement with the big companies that there would be no fracking but if a company like Exxon wanted, they might do it anyway as there is no way to forbid it,” she said. “This is a progressive step forward.”

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