Oil and Gas Lawyer Blog

A new website, Mineral Rights Forum, provides information and discussions about topics of interest to mineral owners. It is owned by Kenneth DuBose and is run by Peter Moorman.  Looks like it will be a good resource for mineral owners. It reports on a recent documentary, Split Estate, that investigates conflicts between surface owners who do not own the underlying minerals and oil and gas companies. It has been shown on Planet Green, an independent cable channel, and will be shown again in January. Here is the movie trailer. According to the Huffington Post, a representative of the Colorado Oil and Gas Commission, Kathy Hall, resigned recently after being shown in the movie saying that fracing fluid was harmless and she had had it in her mouth with no ill effects.

This video was done by the American Petroleum Institute to illustrate the modern techniques used in the drilling, fracing and completion of a horizontal well.

In a recent Wall Stree Journal article, "America's Natural Gas Revolution," Daniel Yergin and Robert Ineson opine that gas produced from shale "is already changing the national energy dialogue and overall energy outlook in the U.S.--and could change the global natural gas balance." Mr. Yergin is the author of "The Prize: the Epic Quest for Oil, Money, & Power" which won him a Pulitzer Prize.  He is now chairman of IHS CERA.  Mr. Ineson is senior director of global gas for IHS CERA.

Yergin and Ineson cite the following evidence for their thesis:

-- Production of gas in the lower 48 states increased 15% from the beginning of 2007 to mid-2008 - an increase fueld mostly by shale gas discoveries, and an increase that is more than most other countries' total gas production.

-- Proven gas reserves have risen from 177 trillion cubic feet in 2000 to 245 trillion cubic feet in 2008, even though the U.S. produced nearly 165 Tcf during that time.

-- "At current levels of demand, the U.S. has about 90 years of proven and potential supply -- a number that is bound to go up as more and more shale gas is found."

Most of this new gas comes from shale plays, beginning with the Barnett Shale in North Texas, and including the Haynesville (Louisiana and Texas), Fayetteville (Arkansas), Marcellus (Pennsylvania and New York), and most recently the Eagle Ford in South Texas. Shale gas is made possible by use of horizontal drilling technology and newly developed hydraulic fracturing completion techniques.

 

Continue reading "Shale Gas - an American Revolution?" »

President Obama has appointed Dr. Alfredo Amandariz as new Administrator of Regions 6 of the Environmental Protection Agency, encompassing Louisiana, Arkansas, New Mexico, Texas and Oklahoma. (See Dallas Morning News article) Dr. Amendariz, a professor of engineering at Southern Methodist University, raised controversy among natural gas producers in the Barnett Shale earlier this year by publishing a study of the effects of Barnett Shale drilling and production on pollution in the Dallas-Fot Worth metropolitan area.  See my earlier blog on Dr. Armendariz's report.

In a related development, State Senator Wendy Davis, D-Fort Worth, has (for a second time) asked Lt. Governor Dewhurst to authorize a senate investigation of the environmental impacts of natural gas production in the Barnett Shale.  Preliminary results of testing conducted by the Texas Commission on Environmental Quality and a private study conducted by the Denton County town of DISH found elevated levels of benzene in the air near natural gas production facilities.  The TCEQ is conducting a third phase of air emissions tests in the area of the Barnett Shale, and expects to have a report by the end of the year. A fourth phase of the testing is scheduled for spring 2010. "We've had oil and gas development in Texas for a long time, but it was primarily in rurual areas," said Tony Walker, director of TCEQ's Dallas-Fort Worth Office. "Not it is in urban and in more populated areas. We're studying every aspect of gas production. We will look at the drilling and frcing process, condensate tanks, compressor stations, gas lines, valves and allother possible sources of emissions."

The Energy Information Administration has issued rankings of states in production of oil, gas, coal, electricity generation, and energy consumption. Texas ranks prominently in most categories.

-- Texas is first in total energy production, producing 10,997 trillion Btus of energy in 2006 (the most recent information available). Wyoming is second (mainly from coal production) with 10,062 trillion Btus. Texas produced 15.5% of all the energy produced in the nation.

-- Texas is first in crude oil production, producing 32.77 million barrels in May 2009 (20% of the nation's production), ahead of Alaska with 21 million barrels; and (by far) first in natural gas production, producing 6 trillion mcf in May 2009 (30% of the nation's production), ahead of second-place Wyoming with 1.9 trillion mcf.

-- Texas produced 41.6 million megawatt hours of electricity in July 2009, ranking first ahead of California, which produced 21.5 million megawatt hours.

-- Texas also ranked first in carbon dioxide emissions (2007 data), emitting 255,092,183 metric tons of CO2. The nearest competitor was Ohio, which emitted 130,407,085 metric tons.

-- Texas ranked fifth in total energy consumption per capita (2007 data), behind Alaska, Wyoming, Lousiana, and North Dakota. Texans consumed 496 million Btu per capita; Alaskans consumed 1,062 million Btu per capita. It's cold in Alaska, Wyoming and North Dakota. Louisianans consumed 861 million Btu per capita -- maybe they had a cold winter in 2007?