Crude oil and natural gas production from U.S. shale formations has skyrocketed in recent years, but the fields' rapid decline means a reversal is just around the corner, according to a Tuesday report by the Post Carbon Institute. Author David Hughes, in an online presentation of his findings, cited U.S. Energy Information Administration data that predicts U.S. crude oil output will peak in 2019 at 7.5 million barrels a day. He also says "the basic economic viability of many shale gas plays is questionable in the current price environment." A link to his report is here.
Also making a presentation online with Hughes was Fort Worth resident Deborah Rogers, who said investment bankers have taken advantage of the rush into shale to gin up fees on acquisitions and divestitures as natural gas prices ran up and then down. A link to her report is here.
The latest air monitor in the Barnett Shale to start reporting its results on the website of the Texas Commission on Environmental Quality is in Rhome, in southern Wise County. It's the 11th active automated gas chromatograph (auto GC) monitor in North Texas. To see its exact locations and data, look for "Rhome Seven Hills Road" on the TCEQ's auto GC page.
The Star-Telegram on Sunday carried an extensive report on efforts by the TCEQ and Environmental Protection Agency to keep track of emissions in the Barnett Shale via a network of dozens of monitors. A link to the report is here.
Fort Worth resident Deborah Rogers, who has been critical of natural gas drilling and the economics of shale gas production, has been named to a 21-member advisory committee to the Department of Interior. The group will "guide and oversee implementation of the United States Extractive Industries Transparency Initiative," which DOI describes on its website as "a voluntary, global effort designed to increase transparency, strengthen the accountability of natural resource revenue reporting and build public trust for the governance of these activities." DOI said President Barack Obama committed the U.S. to the international effort in 2011. Advisory committee members include representatives from environmental organizations, academia and industry.
Rogers, in a prepared release, called the committee's work "a tremendous opportunity to address financial issues with respect to natural resource extraction in this country." She was a 2008-2011 member of an advisory council to the Dallas Federal Reserve Bank, serves on the committee that advised the Texas Commission on Environmental Quality as it located air monitors in the Barnett Shale, and is a board member of Earthworks' Oil and Gas Accountability Project, according to the release. The release said she will appear in the upcoming documentary "Gasland 2"
In 2011 she founded Energy Policy Forum, "a consultancy and educational forum dedicated to policy and financial issues regarding shale gas and renewable energy." In an October blog post on her site, Rogers argued that shale gas is a money-loser driven by Wall Street. "There is no doubt that the investment banking community has been the driving force behind shale production since the economic downturn. Shale should have unravelled long before now. But Wall Street saw an opportunity to generate massive fees and so shale was taken to new heights... ." In 2009 she paid for air quality tests at her Westworth Village farm that showed elevated levels of several chemical compounds associated with natural gas production and flaring. The same year, which saw a sharp decline in the price of natural gas as supply surged, she concluded that shale gas wells "are depleting so quickly that the operators are in an expensive game of 'catch-up,' " according to an e-mail quoted in a New York Times report.
A couple of stories published in the past couple of days offer intriguing glimpses into the worldwide debate over the profitability and health impacts of shale gas production. The Associated Press on Sunday moved a lengthy report examining the accuracy of Gasland filmmaker Josh Fox's assertion, in a letter to New York Gov. Andrew Cuomo, that breast cancer rates jumped in the Barnett Shale, but nowhere else in Texas. Researchers from Duke University, the University of Texas Southwestern Health Science Center, Texas Cancer Registry and Susan G. Komen For The Cure all told AP that's not borne out by any evidence they have seen.
Government officials in Pennsylvania likewise reported that their testing has failed to support fears that radioactivity from wastewater posed a threat to rivers and public water supplies, while others said concerns about emissions from natural gas production operations needs to be weighed against the decline in harmful emissions from coal-fired power plants, which are being idled in favor of gas-fired facilities. The Star-Telegram published the story Monday, and a copy is here.
The second item comes from Platts, an information service focused on energy markets. Russian gas giant Gazprom maintains the shale gas boom is unsustainable economically and threatened by regulatory issues, citing research by U.S. firm Pace Global Energy Services. But in a comment that could have come straight out of the Cold War, "Aviezer Tucker, assistant director of the Energy Institute at the University of Texas, says the Russian government is paying public-relations firms to spread 'myths and misconceptions' about fracking so that Romania, Bulgaria, China and other countries will remain viable export markets for conventional Russian gas. 'Where does the money come from to organize such [anti-fracking] demonstrations and brochure writing?' he said in an interview. 'All that seems to point to a common source, which would be Moscow.' " Platts also reported that "Gazprom announced last week that it sent a team of 'technical specialists' to a shale-gas field in China that is being developed by China National Petroleum Corp., the country's largest state-owned oil and gas company. Gazprom, which has been negotiating with Beijing to export Russian gas to China, did not say in its press release why it was sending technical experts to inspect China's shale-gas field" The Platts story is here.
Natural gas production from shale, coal bed methane and tight sands supported more than a million U.S. jobs in 2010 and that would grow to 1.5 million by 2015, according to a new study by IHS Global Insight. Not surprisingly, Texas leads the growth, with 288,222 jobs in 2010 and an estimated 385,318 by 2015, the study says. It also looks at economic contributions in producing and non-producing states. It's the second in a series, the first being a December look at the economic impact of shale gas
Check out the current newsstand edition of Fortune, which you might say is a gas, gas, gas. The mag gives its cover to its main feature, headlined "The United States of Natural Gas," and its online site lists three stories on the same topic (but, alas, not links to the stories themselves). We'll have to go by the headlines and blurbs listed online, which give a good idea of what's inside: "Exxon's big bet on shale gas," "Will gas crowd out wind and solar?", and "America's new job machine is heating up." A link to the magazine's online page on the issue is here.
Devon Energy, the largest producer in North Texas’ Barnett Shale, said today it is seeking a joint venture partner to develop shale oil and natural gas formations in several states. In a conference call with financial analysts following its third-quarter earnings release, CEO John Richels said the Oklahoma City-based firm would prefer one partner to participate in the development of 1.2 million acres in leases it holds in Oklahoma, Michigan, Louisiana, the Utica Shale in Ohio and the Niobrara deposit in Wyoming and Colorado. He said Devon has a well in each area and plans 40 new wells soon.
It’s possible Devon could raise $1.8 billion selling just a one-third stake in those properties, based on comparable deals, Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets, told Bloomberg News today.The company is hardly cash-poor. It reported $6.8 billion in cash and equivalents as of Sept. 30, the product of big overseas asset sales last year.
Analyst Phil Adams at Gimme Credit, an independent debt researcher, said Devon’s rich cash position could help it negotiate better terms if it strikes a deal. He judged the move a positive, allowing the company to reduce risk and get a faster return of cash spent acquiring the acreage.
The Interior Department is on track to impose new rules on hydraulic fracturing of natural gas and oil wells on public lands early next year, including disclosure of chemicals used at the sites and detailed plans for water disposal, an Obama administration official said Monday. A Houston Chronicle report says the government’s forthcoming proposal also likely would extend existing rules governing the integrity of wells on roughly 700 million acres of public lands in a bid to better protect nearby groundwater supplies, said Deputy Interior Secretary David Hayes.
Many western states, but not Texas, have extensive federal landholdings with petroleum production. Although Interior Department officials are still drafting the plan, the government is looking to learn more about the chemicals used during hydraulically fracturing, the technique of pumping water, sand and other chemicals to breat up rock formations and unlock trapped oil and natural gas.
It was a nearly packed house at the Modern Art Museum of Fort Worth Wednesday night.
The crowd was there for a screening of "Gasland," a documentary that takes a critical eye at the impact of drilling for shale gas. The event was also a fundraiser for the Texas Oil & Gas Accountability Project, an advocate for stronger environmental protections on drilling.
Filmmaker Josh Fox traveled around the country to document the environmental downside of drilling, focusing largely on the impact of hydraulic fracturing on drinking water.
It's not the first documentary to critique natural gas drilling but it's the one getting the most attention. The film won a Special Jury Price at this year's Sundance Film Festival. It will air on HBO on June 21.
"We were always after something that would have national exposure," Fox said at a pre-party for the screening.
Fox devotes most of the film to his investigations of people with contaminated water in his home of northeastern Pennsylvania and in Colorado and Wyoming. He made two trips to Fort Worth but the Barnett Shale takes up less than 10 minutes of the movie.
Nonetheless, local drilling critics expressed excitement about the film and its potential for getting their concerns about natural gas drilling more attention.
"The film tonight, I think, is really going to drive home that we've got some serious problems," state Rep. Lon Burnam told the crowd at the start of the screening in introducing Fox. The Fort Worth Democrat has long called for a moratorium on drilling until questions about safety are properly investigated.
Next month's HBO screening will be a big night for the film, Fox said. He also plans to hold more screenings around the country this summer and promised a theatrical release in the fall.
The image of a man lighting his facuet on fire is one of the most striking moments in the film but it's also been met with somequestions about whether the cause is actually drilling-related.
You can see that unforgettable scene here in the film's trailers. :
There's a lot of outrage in Pennsylvania after Fort Worth-based Range Resources hired away a high-level aide to the governor to help the company with its drilling program in the Marcellus Shale.
Read below the jump for an editorial from the Philadelphia Inquirer. The Inkie also flogs Gov. Edward Rendell for flip-flopping on the state severence tax on natural gas, and sounds a warning that natural gas companies are making big campaign contributions to Pennsylvanie legislators.
This sort of thing, of course, makes Pennsylvania sound a lot like Texas. All they need in Harrisburg (the capital of Pennsylvania) is a good Tex-Mex joint. And maybe a little more sunshine.
