Barnett Shale

Drilling critics cite benzene emissions in Fort Worth, Dish

ShaleTest, a private effort that has been critical of natural gas operations, says two recent air tests showed "elevated" levels of benzene. The Texas Commission on Environmental Quality, which conducted one of the tests, said the short-term measurements aren't necessarily a concern unless they prove to be long-term. The Star-Telegram has a report here.

Benzene, a human carcinogen, is fairly widely used -- it's a component of gasoline, for example -- and has varying levels of risk tied to different concentrations. Hence, it's one of the components of oil and gas operations that TCEQ tracks as part of its air monitoring in the Barnett shale. The concentrations found at a compressor station near downtown Fort Worth and a compressor station west of the Denton County community of Dish exceeded TCEQ's threshold for long-term exposure, but that is based on continuous exposure throughout a lifetime. Additional sources of information on the health effects of benzene can be found at the Centers for Disease Control and Prevention (CDC), here, and at the federal Agency for Toxic Substances and Disease Registry, here.

-- Jim Fuquay

Swiss firm moves to ship Marcellus ethane overseas

Ineos Group AG, a Swiss chemicals manufacturer, has contracted with a Danish shipbuilder to transport ethane from a Philadelphia-area terminal to its petrochemicals plant in Norway. The deal impacts Fort Worth-based Range Resources, which last year agreed to supply ethane, a component of natural gas, to Ineos from a facility in Marcus Hook, Penn., starting in 2015. Range is one of the largest producers in the Marcellus Shale, a fast-growing field in the Appalachians. Range last year committed to be the anchor shipper of natural gas liquids on the Mariner East Project, running from southwestern Pennsylvania to Marcus Hook. on Wednesday, Ineos said it will buy an undisclosed number of liquefied natural gas (LNG) tankers from Evergas of Copenhagen, Denmark, to transport the ethane to an Ineos facility in Rafnes, Norway. Ethane can be processed into ethylene, a basic feedstock in the production of plastics.

-- Jim Fuquay

 

Devon Energy still No. 1 in the Barnett Shale

Last month we published an item noting that by the Texas Railroad Commission's count, Chesapeake Energy had edged past Devon Energy as the biggest  gas producer in the Barnett Shale as of June, the latest figures at the time. But both companies quickly questioned the numbers and we qualified our report, with good reason as it turns out. Gene Powell, the data dean of the Barnett Shale and publisher of Powell Shale Digest, just ran the numbers for production through October 2012, the latest available from the Railroad Commission, and Devon is still No. 1, just ahead of Chesapeake. Both are well ahead of No. 3 XTO Energy.

According to Powell's numbers, Devon in October averaged 1.495 billion cubic feet a day. Chesapeake averaged 1.375 Bcf/d and XTO averaged 826 million cubic feet a day. The difference maker is wells in the Railroad Commission's pending file, which contains wells that are backlogged or contain incomplete information. Production from those wells doesn't  show up on the Railroad Commission's Barnett Shale summary page. Based on our recent conversations with both producers, Devon last year drilled about 300 wells, vs. Chesapeake's fewer than 100, so perhaps that has something to do with it.

Powell notes that the Barnett Shale was still chugging along at 5.2 Bcf/d in October despite the sharp decline in drilling in the field. Some of that doubtless is because wells drilled in the past were finally connected to a sales line. For example, Chesapeake only last year laid an 8-inch line to its Westgate padsite on the southern edge of downtown Fort Worth, and that well was drilled in 2008 and completed in 2009. See our item here. But operators also say that despite their deserved reputation for sharp production declines in the early years, Barnett wells are proving to be pretty decent long-term producers. We've run some numbers ourselves using Powell's data and wells that are 10 years old still produce 11 percent of their peak initial production, while those 20-30 years old are still producing on average 10 percent of their peak. Of the 85 Barnett Shale wells 20 years old or older, all but four were still producing in June, the latest month we have. They averaged 99,000 cubic feet a day.

-- Jim Fuquay

Chesapeake squeezes in one last asset sale for 2012

Chesapeake Energy says it will sell by year's end "a substantial majority of its remaining midstream assets" for $2.16 billion, concluding a busy year of property sales aimed at trimming its heavy debt. Access Midstream Partners, a publicly traded company (ticker: ACMP), is the buyer of assets, "located primarily in the company's Marcellus, Utica, Eagle Ford, Haynesville and Niobrara shale plays," Chesapeake said. The Oklahoma City-based producer also said it completed earlier this quarter the sale of other midstream assets in Oklahoma and Texas for about $175 million. Additionally, Chesapeake expects to close the sale of its remaining midstream assets in the Mid-Continent region and elsewhere by the end of the first quarter of 2013 for about $425 million. The company in June had announced plans for the mid-stream assets sales and said it expected to receive "more than $4 billion" in the deals. With its latest announcement, it said "proceeds from the company's midstream exit are anticipated to total approximately $4.875 billion."

-- Jim Fuquay

W. Virginia gas utility line fire closes interstate highway

A 20-inch natural gas transmission line in West Virginia exploded Tuesday, destroying five homes and closing Interstate 77 for at least two days. The  line belongs to NiSource, the area's local natural gas utility. The accident happens outside of Sissonville, in the west-central part of the state. Much of West Virginia is in the busy Marcellus Shale, but the area around Sissonville is not the busiest part of the field. Here's an Associated Press report and photo, above.

-- Jim Fuquay

National anti-fracking group launched

A new group called Americans Against Fracking, which claims more than 100 members including environmental, civic and religious groups, said it seeks a national ban on hydraulic fracturing "and drilling associated with fracking." The group in a news release says that efforts to regulate the industry have been unsuccessful and only an outright ban will suffice, along with restrictions on related oil and gas production activities. "Americans Against Fracking supports federal, state and local efforts to ban fracking and to stop practices that facilitate fracking like natural gas exports, frac sand mining and pipeline construction." It calls for a move away from fossil fuels toward renewables. The group's website is here.

-- Jim Fuquay

Environmental groups seek fracturing chemicals disclosure

Seventeen environmental groups on Wednesday asked the EPA to require the disclosure of all chemicals and emissions produced by oil and gas operations, including drillling, hydraulic fracturing and pipelining. Bloomberg News has a story here.

-- Jim Fuquay

UT plans methane emissions field study

The University of Texas at Austin is leading a research team in what the school calls "a major field study to measure methane emissions from natural gas production," which it hopes to complete by January. The study, launched in May and including the Barnett Shale in North Texas, is directly measuring emissions at sites, including hydraulically fractured wells. "A greater understanding of the amount of methane emitted into the atmosphere can better inform sound policies and management of emissions from well sites," the school said in a news release Wednesday. Methane is the primary component of natural gas and is a powerful greenhouse gas. Investigators, initially Robert Howath at Cornell University, have asserted that natural gas can be a worse GHG source than coal, based largely on the impact of unburned methane emissions throughout the production and transmission process.

"This study is unparalleled in its scope and approach," said David Allen, principal investigator and director of the Cockrell School of Engineering's Center for Energy and Environmental Resources. Participating are nine gas producers, including Fort Worth-based XTO Energy, two environmental testing firms and the Environmental Defense Fund. The school said Allen has disclosed outside interests in accordance with UT's conflict of interest policies. The school was embarrassed this summer when it was learned that a study of hydraulic fracturing was led by professor Charles Groat, who did not disclose that he serves on the board of a large gas producer.

-- Jim Fuquay

Chesapeake installing pipeline under Lancaster Avenue

If you've noticed some activity along Lancaster Avenue just south of downtown Fort Worth, know that it's work on an 8-inch-diameter pipeline Chesapeake Energy is laying to serve its well drilled in 2008 just south and west of the T&P Warehouse building. The well, on what the company calls its Westgate padsite, was completed in May 2009, says Chesapeake's Kevin Strawser, and is only now being tied into an existing pipeline already serving the firm's Mercado Juarez and Arc Park sites. The new pipeline will be installed by boring beneath Lancaster, Strawser says, popping above ground just west of the wellsite in a grassy area between Lancaster and Interstate 30, and to the east  along the railroad tracks near Interstate 35W. The city's public light installations along Lancaster will be protected with barricades, he said. The work started about 10 days ago and is expected to take 10 to 12 weeks.

-- Jim Fuquay

XTO Energy partners to build Marcellus pipeline

Fort Worth-based XTO Energy, part of Exxon Mobil Corp., teamed with NiSource Gas Transmission and Storage to build a 70-mile, $150 million natural gas gathering system in southwestern Pennsylvania. Here's a report from area media.

-- Jim Fuquay