March 2012 Archives

March 12, 2012

EIA Creates New Toy for Energy Geeks

I love graphs. The Energy Information Administration, the guys that crunch numbers on all things energy-related, have come up with a new way to let us graph-lovers play with their data. The new interface is in its beta testing version, and you can play with it here. The site allows you to create your own graphs by selecting the data you want to depict. This allows you to compare two or more sets of data in graphic form. Here are some examples:

Well Head vs Res Price.jpg

 

Consumption by sector.jpg

production vs consumption.jpg 

 

Imports vs exports.jpg 

 

 

Gasoline price vs stocks - Texas.jpg 

Try it for yourself. It's fun, and you may learn something in the process.

March 11, 2012

Rolling Stone Picks Fight with Aubrey McClendon

Rolling Stone magazine's Jeff Goodell has weighed in on the debate over natural gas reserves, the safety of hydraulic fracturing, global warming, methane groundwater contamination, and Chesapeake Energy's controversial finances, in an article titled "The Big Fracking Bubble: The Scam Behind the Gas Boom." Goodell pulled no punches. He calls Aubrey McClendon, Chesapeake's CEO, "an influential right-wing power broker." He says that "Fracking, it turns out, is about producing cheap energy the same way the mortgage crisis was about helping realize the dreams of middle-class homeowners." He claims that "for Chesapeake, the primary profit in fracking comes not from selling the gas itself, but from buying and flipping the land that contains the gas," and that Chesapeake "has more in common with Enron than ExxonMobil."

Goodell's article covers ground that is not new in the debate over the safety, ecology and economics of hydraulic fracturing. He touches on the study by Anthony Engraffea at Cornell University on whether natural gas has less global-warming effect than coal. He discusses the Duke University study of methane in water wells in Pennsylvania. He quotes Arthur Berman (Berman says miss-quoted), a long-time critic of the industry's estimates of shale gas reserves.

McClendon says he agreed to talk to Goodell after he was told that the magazine would publish an article on Chesapeake whether it cooperated or not. Chesapeake has issued a rebuttal to the article ("Although our expectations for honesty and fairness were quite low, the writer failed to reach even that low bar."), and Goodell has responded to Chesapeake's rebuttal ("The company entirely dodges the article's central point: that Chesapeake is a highly-leveraged firm operated by a corporate gambler who engaged in complex scheme to profit off the illusion that America has a virtually unlimited supply of cheap natural gas."). (Isn't the internet amazing?) 

Last Thursday I went to a showing of spOILed, a documentary about the oil and gas industry by journalist turned media analyst Mark Mathis. I recommend the movie as a good effort by a non-expert journalist to understand and analyze the place, importance and future of hydrocarbons in the world today. Unlike Goodell, Mathis comes down on the side of industry. He concludes that, like it or not, the world is dependent on hydrocarbons, which have made our 21st century economy and lifestyle possible; and that the world will not soon develop alternate sources of energy that could wean us from dependence on hydrocarbons, and so must continue to develop available reserves to prevent a catastrophic rise in energy prices if demand exceeds supply.

Whether you agree with Mathis or Goodell, the debate over energy and its future is one that should continue, and good journalists making real efforts to understand and explain the issues in ways that the general public can understand should be encouraged. Remarkably, there is very little debate over these issues in the political sphere, despite the recent environmental disasters -- the Gulf oil spill and the near-meltdown of nuclear reactors following the tsunami in Japan. I would encourage Mathis to read Goodell, and I would recommend Mathis' movie to Goodell. Each could learn something to learn from the other.

 

March 3, 2012

Texas Supreme Court Affirms its Decision in Denbury Pipeline Case

This week, the Texas Supreme Court denied Denbury Green Pipeline's motion for rehearing in Texas Rice Land Partners v. Denbury, leaving essentially untouched its conclusion that pipelines must prove that they serve the public in order to exercise eminent domain power.

I wrote about this case a couple of weeks ago. See my prior discussion here. Pipeline companies had deluged the Court with briefs after its initial opinion, claiming that the Court's decision will halt pipeline construction across the state.

While denying Denbury's motion for rehearing, the Court did issue a revised opinion that made some changes to its language. The Court's opinion adds language responding to some of the arguments of the friend-of-the-court briefs filed by other pipeline companies; and the revised opinion changes the holding as follows:

We accordingly hold that for a person intending to build a CO2 pipeline to qualify as a common carrier under Section 111.002(6), a reasonable probability must exist that the pipeline will at some point after construction serve the public by transporting gas for one or more customers who will either retain ownership of their gas or sell it to parties other than the carrier.

The Court also added a footnote to its holding: "Our decision today is limited to persons seeking common-carrier pipeline status under Section 111.002(6) [of the Natural Resources Code]. We express no opinion on pipelines where common-carrier status is at issue under other provisions of the Natural Resources Code or elsewhere." (Section 111.002(6) relates only to pipelines that transport carbon dioxide. Other provisions of the Code cover pipelines that carry natural gas and hydrocarbons.)

James Mann, an Austin attorney and lobbyist for the pipeline industry, was quoted in the Houston Chronicle as commenting that "It's unclear to us just how bad this opinion is. If it only affects CO2 pipelines, it can be survived. If the same holdings are applied to all other types of pipelines, it is disaster for the oil and gas industry." Kent Sullivan, a lawyer with Sutherland Asbill & Brennan in Houston, said that the opinion represents "a substantial shift in power or potential leverage" for landowners. Sullivan predicted that the issue is likely to be a topic in the 2013 legislative session.