August 2009 Archives

August 19, 2009

Energy News

Items from this week:

Prices:  Natural gas prices continue to decline. Below is a comparison of gas NYMEX futures prices with S&P 500 for the last year:

Gas Price Chart.JPG

 

On August 14, futures for September delivery settled at $3.24/MMBtu, a 52-week low.  Futures prices have declined about 65% from this time a year ago. The Energy Information Administration reports that gas in storage increased by 63 Bcf to 3.152 Tcf for the week ended August 7, compared to 2.65 Tcf a year ago, and well above the five-year average of 2.635 Bcf. Absent severe supply disruptions or a very cold winter, gas prices are likely to remain low for some time.

 

The price decline has resulted in a corresponding decline in lease and drilling activity. The chart below shows the number of oil and gas leases filed of record in Tarrant County, the center of Barnett Shale activity:

Barnett Shale Leases.JPG

This shows a decline in leasing from 18,000 leases in May, 2008, the height of the leasing frenzy, to 2,000 in July 2009.

 

Earthquakes:  Scientists from Southern Methodist University have tentatively concluded that recent earthquakes in the vicinity of Dallas-Fort Worth Airport may have been caused by a salt water disposal well located at the southern end of the airport, operated by Chesapeake.

 

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August 11, 2009

Texas GLO Commissioner Jerry Patterson Weighs in on Exxon v. Emerald

Jerry Patterson, Commissioner of the Texas General Land Office, has weighed in on the side of the O'Connors in their fight against ExxonMobil. The General Land Office has filed an amicus brief urging the Texas Supreme Court to reconsider its decision in Exxon v. Emerald; Commissioner Patterson issued a press release ( press release.pdf) saying that he has requested the Texas Railroad Commission to hold hearings into ExxonMobil's "intentional sabotage of oil wells in Refugio County as well as the company's fraudulent reports covering up the damage;" and, in response to ExxonMobil's letter to the Railroad Commission ( Exxon-RRC letter.pdf) denying Commissioner Patterson's allegations and arguing that no such hearing is necessary, Commissioner Patterson has written a lengthy reply ( GLO Letter to RRC.pdf), citing evidence from the case showing ExxonMobil's false reporting of its plugging operations, and concluding that, "If these intentional false filings and improper pluggings do not result in substantial penalties by the Railforad Commission, then the oil & gas industry in Texas will be on notice that Railroad Commission's rules and forms are optional, not mandatory."

 

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