Speakers for the Parker County community are expected to address Railroad Commissioners early in this morning's meeting. Chairman Barry Smitherman said before the start that everyone will get a chance to speak after a quick run through the agency's agenda.
-- Jim Fuquay
A Subcommittee on Seismic Activity has been created by the House Energy Resources Committee to look at links between a recent swarm of small earthquakes around Azle and natural gas production in the area. Several researchers have established a relationship between seismic events and underground injection wells, which are used to dispose of millions of gallons of waste water. Rep. Myra Crownover, R-Denton, will head the panel of four. In a prepared release, Crownover said: "It is our job as legislators to make sure that we address the concerns surrounding recent earthquake activity so that all Texans can sleep easy, confident that the oil and gas industry continues to operate in a safe and responsible manner."
Texas Railroad Commissioner David Porter held a community meeting on the subject in Azle on Jan. 2 that left many of the more than 800 attendees dissatisfied with the lack of new information on about 30 quakes that have hit the area, the most recent this week. Following that meeting the agency, which regulates the oil and gas industry in the state, announced that it would hire a seismologist. A number of Azle area residents have vowed to attend a Railroad Commission hearing scheduled for Jan. 21 in Austin to press the agency on the matter.
Shale production will keep natural gas prices in North America in the range of $4-$5 per 1,000 cubic feet in 2012 dollars through 2035, says a new report by energy researcher IHS. It predicts that even at $4 or less, about 900 trillion cubic feet of unconventional gas resources can be produced economically. That's more than 30 years of U.S. consumption at current levels and only about a third of total recoverable resources. "This means that the North American natural gas resource base can accommodate significant increases in demand without requiring a significantly higher price to elicit new supply," Tim Gardner, IHS vice president, said in a news release accompanying the study. There has been considerable debate over whether plans to export natural gas from North America would run up domestic prices from their low levels in recent years, which are a boon to petrochemical companies and other manufacturers, as well as consumers. The study said that over 15 years, an average residence that uses natural gas for heat will save $5,731 compared to an all-electric home. A copy of the study, titled Fueling the Future with Natural Gas: Bringing it Home, is available here.
Researchers at the Bureau of Economic Geology at the University of Texas at Austin, who earlier released a comprehensive study of the Barnett Shale, on Thursday said they estimate the Fayetteville Shale in Arkansas has about 38 trillion cubic feet of natural gas that can be recovered with current technology. At a price of $4 per 1,000 cubic feet, about 18 trillion cubic feet of that would be economically recoverable, although the production outlook is "only moderately sensitive to natural gas price," the study says. At the $4 price, which is just under current futures prices, the field has likely peaked or is about to peak and will slowly decline as fewer new wells are drilled. The study, funded by the Alfred P. Sloan Foundation, looked at production histories for all wells in the field drilled between 2005 and 2011.
BEG researchers divided the Fayetteville into six tiers by production quality. (They did the same in the Barnett, using 10 tiers.) "The higher productivity tiers are, not surprisingly, more developed," said co-principal investigator Svetlana Ikonnikova, an energy economist at the BEG. "The lower tiers remain uneconomic at almost any foreseeable gas price." The BEG said it plans to complete assessments this year of the Haynesville Shale, which extends into parts of Arkansas, Louisiana and Texas, and the Marcellus Shale in the Appalachians. That will be followed by "a study of U.S. shale oil reserves, all funded by the Sloan Foundation,"
Texas Tribune has a lengthy report of Tuesday's arguments before the Texas Supreme Court on a southeast Texas case in which a landowner claims that wastewater from an injection well has trespassed into his property. It's not an oil-and-gas wastewater injection well, but the issue has the attention of the energy industry, which operates tens of thousands of similar wells around the state. Briefly, a rice farmer who opposed a 1997 permit for a Class 1 injection well for non-hazardous waste now charges that some of the 100 million-plus gallons injected 8,000 feet underground since then has migrated into a saltwater aquifer beneath his farm, amounting to trespassing. At trial, a jury found for the well owner, but a Beaumont appellate court reversed the decision and ruled in favor of the farmer. The case made its way in 2011 to the Texas Supreme Court, which returned it to the lower court, and now it's back again.
The state's high court has already, in 2008, rejected a claim that hydraulic fracturing from a nearby well could have trespassed and taken oil and gas from the mineral owners. For the full Tribune report, click here.
More than 800 people attended an Azle public meeting last week to voice concerns about the recent swarm of small earthquakes in the area, but they didn't get any answers about the cause of or solution to the problem from state officials. Now critics of hydraulic fracturing are offering their own session to provide information. Earthworks, the North Central Texas Communities Alliance and former Dish Mayor Calvin Tillman said today they will hold a meeting Monday at 6:30 p.m. at Azle Community Center, 404 W. Main St., in Azle. Organizers said the format of the Jan. 2 meeting and previous actions show Texas Railroad Commission officials "are not interested in overseeing the oil and gas industry so much as providing political cover for it." They said their Monday meeting will "find out how to force our 'regulators' to do their jobs and protect our property and communities."
The Texas Railroad Commission, which regulates oil and gas operations in the state, said Tuesday it will hire a seismologist. Railroad Commissioner David Porter, who oversaw an Azle community meeting to hear concerns and complaints about a string of earthquakes in that area, proposed that the Commission's executive director, Milton Rister, add a seismologist to the agency's staff. “It is imperative that the Commission remain engaged and involved in gathering more evidence and data into any possible causation between oil and gas activities and seismic events. Commission rules and regulations must be based on sound science and proven facts. In order to do so, I propose the Commission hire an in-house seismologist,” Porter told a Tuesday meeting of the agency in Austin, according to a news release by the agency.
According to that release, "the seismologist’s duties will include coordinating with other academic experts studying seismic events in Texas; obtain, study and interpret various forms of data to evaluate seismic activity associated with known faults and historic and/or ongoing oil and gas exploration and production activities; lead efforts to conduct research as well as internally integrate oil and gas science with seismic science; coordinate communications and information gathering with stakeholders; review, analyze, interpret and comment on technical data from seismic data sources, computer models and digital maps; and develop recommendations and action plans." Whew. The agency will conduct a national search for candidates.
Active drilling rigs in the Barnett Shale slipped by one, to 27, after taking a big drop of seven rigs the previous week, according to RigData. Montague and Denton counties, which tend to produce more crude oil and liquids than elsewhere in the field, were the busiest with six rigs each, followed by Jack and Wise counties with four each.
Nationally the rig count fell by 14 this week to 1,768, said Baker Hughes. There were 1,395 rigs, down 16, exploring for oil, while 372 rigs, up three, were looking for gas. One was listed as miscellaneous, down one. A year ago there were 1,774 active rigs.