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Oil and Gas Roundup — March 3

March 03, 2017
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

State rig count falls, still up one-third over last year

The number of rigs exploring for oil and natural gas in Oklahoma fell by three to 98 this week. Nationwide, the rig count was up two to 756, with 609 of those exploring for oil and 146 for natural gas.

A year ago, 70 rigs were active in Oklahoma and 489 nationwide, with 633 rigs drilling horizontally and 62 vertically.

Of the other major oil- and gas-producing states, Texas gained six to 392, Louisiana rose two to 51, New Mexico fell by one to 47, North Dakota gained three to 37, Pennsylvania lost two to 32, Colorado fell by one rig to 25, Ohio was unchanged at 19 and Wyoming lost two to 17.

House GOP to prioritize ethanol, pipeline legislation

Republicans on the House Energy and Commerce Committee are planning to push legislation this year to change the federal ethanol mandate and make pipeline approvals easier.

Committee leaders said that the ethanol and pipeline policies are among the legislative priorities in their push to “put the consumer first and build policy from there,” as Rep. Greg Walden (R-Ore.), the newly minted chairman of the full committee, put it.

Rep. John Shimkus (R-Ill.), chairman of the environment subcommittee, told reporters Wednesday that he’s optimistic that some overhaul of the federal ethanol mandate can be passed into law this year, “really with the ultimate goal of just freeing up the market, getting rid of the mandate and letting competition fill the void.”  

“That’s going to be a lot. That’s going to be a heavy lift,” Shimkus said. “So I hope we’ll be successful.”

The federal Renewable Fuel Standard, enforced by the Environmental Protection Agency (EPA), requires gasoline and diesel companies to blend biofuels such as ethanol and biodiesel into their diesel fuels. The EPA determines the mandated volumes every year.

President Trump has said he supports the mandate, and his EPA administrator, Scott Pruitt, has committed to enforcing it. But Pruitt has also expressed concern in the past about the impact of a high-volume mandate.

Carl Icahn, a billionaire investor who owns a refining company, is a top adviser to Trump and wants the EPA to make a change to the ethanol rules by requiring fuel wholesalers, not refiners, to comply.

Read more at The Hill.

U.S. Geological Survey predicts fewer big earthquakes

The U.S. is forecasting fewer damaging earthquakes this year in the central and eastern United States, areas where in recent years there have been numerous tremors linked to wastewater disposal wells used in the hydraulic fracturing drilling process.

About 3.5 million people live and work in areas with significant potential for damaging quakes from induced seismicity in 2017, with the majority of this population in Oklahoma and southern Kansas. Including the possibility of natural earthquakes, the number of people at high risk rises to about 4 million.

The forecast is lower than last year, when it was estimated that 7 million people were at risk. This report is the second time the agency has forecast the likelihood of earthquakes. In north Texas and north Arkansas, there were no earthquakes larger than 2.7 magnitude in 2016. USGS considers a magnitude 2.7 earthquake to be the level at which ground shaking can be felt, according to the agency. An earthquake of 4.0 or more can cause minor or more significant damage.

The agency said the decrease in earthquakes may be due to a drop in wastewater injection resulting from regulatory actions or a slowdown in oil and gas production due to lower prices. The one-year study was published Wednesday in Seismological Research Letters.

Read more at the Fort Worth Star-Telegram.

Stanford unveils new software developed to help reduce risk of induced seismicity

Just a day after the United States Geological Survey released a report that finds a 50 percent reduction in the number of U.S. citizens who live in areas with the potential for induced seismicity since 2016, a new tool has been introduced that can be used to further reduce the already declining risk.

Stanford University on Thursday unveiled its new Fault Slip Potential software, which it developed to help producers reduce the risk of triggering manmade earthquakes via wastewater injection from oil and gas production. Available for free download here, the software combines geo-mechanics and pore pressure modeling into an easy-to-use format to assess fault slip potential for saltwater disposal wells.

According to co-developer Mark Zoback, professor of geophysics at Stanford’s School of Earth, Energy & Environmental Sciences, the software is primarily aimed to enable energy companies to conduct seismicity risk assessments and help guide producers and regulators in deciding where to place saltwater wells.

“Our intention is for it to be used as a screening tool in advance (of drilling a wastewater disposal well),” Zoback said during a media call on Thursday. “We can calibrate it to evaluate what’s happened in the past (at current disposal sites), but hope will be use to prevent seismicity.”

Developed along with Stanford graduate student Rall Walsh — who alongside Zoback, has extensively studied induced seismicity in Oklahoma — the software calculates the probability that oil and gas injection activities will trigger fault slippage.

Read more at Energy In Depth.
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