Oil and Gas Lawyer Blog
Recent news items of interest:
Barnett Shale Well Reaches 5 Bcf
The XTO Energy – TRWD #H2H Well in Tarrant County has produced more than 5 Bcf of gas, the first Barnett Shale well to reach that milestone. The well was completed in June 2005 with a 3,500-foot lateral. The well was drilled under a reservoir operated by the Tarrant Regional Water District, Eagle Mountain Lake, in northwest Tarrant County. It still produces more than 1 mmcf per day. The well highlights the difference between community acceptance of horizontal drilling and fracing technology in Texas compared to fears that the technology will cause water contamination in New York State, which so far has banned such wells. The newly elected Attorney General for New York, Eric Schneiderman, has recently said he opposes use of hydraulic fracturing until he is convinced that it is safe: “Neither the state nor the federal government has determined that hydrofracking is a safe practice, and I will sue to make sure that no drilling takes place until those determinations have been made.”
TCEQ Air Monitor Installed in Decatur
The Texas Commission on Environmental Quality has installed a continuous air monitoring device in Decatur, Texas to continuously sample and report air quality and measure 46 volatile organic compounds. It is one of five such devices sited in the Barnett Shale area. Each monitor costs up to $250,000, plus $100,000 per year to operate. The data can be viewed on the TCEQ website, here:
http://www.tceq.state.tx.us/compliance/monitoring/air/monops/agc/agc_barnett.html
A map showing the locations of TCEQ air quality sampling locations may be found here:
http://www.tceq.state.tx.us/implementation/barnettshale/bshale-viewer
Chevron Buys into Marcellus Shale
Chevron Corporation announced that it has agreed to acquire Atlas Energy, which controlls 486,000 net acres in the Marcellus and 623,000 net acres in the Utica Shale. Atlas had previously made a joint venture with Reliance Industries Limited of India to develop its Marcellus leases. Chevron thereby joins Exxon Mobil (XTO acquisition) in buying into the domestic shale plays.
Halliburton Subpoenaed for Contents of Frac Fluid
The Environmental Protection Agency has issued a subpoena to Halliburton to obtain information on the chemical additives it uses in hydraulic fracturing fluids after Halliburton refused to voluntarily disclose the data. EPA has asked nine oilfield service firms to disclose data on frac fluid, and only Halliburton refused to respond.
http://www.star-telegram.com/2010/11/09/2617267/epa-issues-subpoena-to-halliburton.html
Natural Gas In Storage Reaches Record
The U.S. Energy Information Administration has reported that natural gas in underground storage has reached 3.84 trillion cubic feet, a new record. The EIA forecasts that gas production in the U.S. will reach 61.49 Bcf per day in 2010, the highest level since 1973.
Texas Crude Oil Production on the Rise
Texas oil production in September rose to 32.7 million barrels, an increase of 1.1 percent over September 2009. Oil production in Texas peaked at 3.4 million barrels per day in 1973, and declined to 979,000 barrels per day in 2003, where it has leveled off in recent years. Because of higher oil prices in relation to natural gas, companies have been switching from drilling gas wells to oil wells. Rigs drilling oil wells now account for 43% of the 1683 active rigs in the U.S., up from 33% a year ago.
Fort Worth City Council Increases Budget for Air Quality Study
Fort Worth will spend an additional $250,000, for a total of $900,000, on an air quality study to be conducted by Eastern Research Group, testing 75 percent of the wells in the city. ERG told the city council that 68 percent of the approximately 200 sites it has tested so far have shown detectable emissions that require further study.
http://www.star-telegram.com/2010/11/09/2619036/fort-worth-backs-extra-spending.html
Chesapeake Threatens Colleyville Council with Suit over Attempt to Regulate Pipelines
The Colleyville City Council has revised its drilling ordinance to give it authority over pipeline routes in the city limits. An attorney representing Texas Midstream Gas Services, a Chesapeake subsidiary, told the council that the ordinance conflicts with state and federal law governing pipeline safety issues. The issue of municipal regulation of oil and gas activity will be a topic for the upcoming Texas legislative session.
Dimock to Get Water Line
The village of Dimock in Pennsylvania has been much in the news since residents found their water wells charged with natural gas. Cabot Oil & Gas, which has been drilling wells in the area, has denied responsibility, but the Pennsylvania Department of Environmental Protection has concluded that Cabot’s wells have charged the community’s aquifer. Now Pennsylvania authorities have approved a project to construct a $12 million, six-mile municipal water line to supply drinking water to Dimock residents. The Pennsylvanid DEP has said it will sue Cabot if it refuses to pay for the water line.