Articles Posted in OIl and Gas News

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Beginning in 2013, the town of Azle, in the heart of the Barnett Shale, experienced a “swarm” of earthquakes. Its citizens complained to the Texas Railroad Commission, blaming injection wells for the quakes. When the RRC held a meeting in Azle, refusing to link the quakes to the injection wells, the citizens decided to protest in Austin. They bussed themselves to a RRC open meeting, where they serenaded the commissioners with a song from Elvis, “All Shook Up.”

Southern Methodist University scientists have now published a paper concluding that the Azle quakes were “most likely” caused by the injection wells, together with withdrawals of produced water by the seventy-plus producing wells in the area. SMU installed monitors around Azle after the quakes began,and identified a fault running through the area. The scientists developed a model showing that the changes in pressure caused by the withdrawals on one side of the fault and the injections on the other were the likely cause of the quakes. Heather DeShon, one of the SMU researchers, said that “What we refer to as induced seismicity – earthquakes caused by something other than strictly natural forces – is often associated with subsurface pressure changes. We can rule out stress changes induced by local water table changes. While some uncertainties remain, it is unlikely that natural increases to tectonic stresses led to these events.”

SMU quake study picture

The Texas Railroad Commission website stills says that  “Texas has a long history of safe injection, and staff has not identified a significant correlation between faulting and injection practices.” After Azle’s visit to the RRC, it hired its own seismologist, David Pearson. In response to the SMU report,  Pearson said that “We will not be suspending activity at the two wells, especially given the fact that we have not seen any continuation of large-scale earthquakes in the Azle area that would give us any cause for alarm. The swarm has died out and has been quiet for some time.” Milton Rister, the Railroad Commission’s executive director, wrote a letter requesting a meeting with the SMU researchers.

The earliest quakes blamed on oil and gas activity occurred in 2008 around the Dallas-Fort Worth Airport. More recently there has been a swarm of quakes in the Dallas area.

The SMU study can be found here.

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Last month I wrote about the Texas legislature’s efforts to limit cities’ authority to regulate drilling within their jurisdictions, after the City of Denton passed a ban on hydraulic fracturing. The bill that has emerged is House Bill 40, sponsored by Drew Darby, chairman of the House Energy Resources Committee. It passed out of committee, but yesterday was returned to committee on a technicality. A companion bill in the Senate, Senate Bill 1165, has also passed out of its Natural Resources committee.

The bill would greatly limit cities’ ability to regulate drilling. It provides that cities may only regulate “aboveground activity related to an oil and gas operation that occurs at or above the surface of the ground, including a regulation governing fire and emergency response, traffic, lights, or noise, or imposing notice or reasonable setback requirements.” Any ordinance must be “commercially reasonable,” defined as “a condition that would allow a reasonably prudent operator to produce, process and transport oil and gas, as determined based on the objective standard of a reasonably prudent operator and not on an individualized assessment of an actual operator’s capacity to act.”

The bill leaves may questions unanswered. For example, Fort Worth has an ordinance that regulates saltwater pipelines.  Are pipelines an “aboveground activity” that cities can regulate?

Last weekend, about 50 residents living close to a well being completed by Vantage Energy were evacuated because of a mechanical failure in the well during the fracing operation.  Well blow-out experts were called in to regain control of the well. The incident is being cited by opponents of House Bill 40 to argue against restrictions on municipal regulation. A Dallas Morning News editorial yesterday said that “Homeowners and cities should have the right to see events like what happened over the weekend in Arlington and determine for themselves whether drilling is in the best interests of their community.” Protesters planned an all-night vigil on the Capitol steps in opposition to the bill. And last week, the Environmental Defense Fund filed applications for rulemakings with the Texas Railroad Commission, requesting that it adopt rules replacing municipal regulations for pipeline, truck traffic and special safety measures needed in case of a natural disaster. The EDF applications were undoubtedly intended to impress the legislature on the lack of RRC regulation of drilling in urban areas.

 

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A recent “swarm” of small quakes in Irving has caused a stir and ignited a series of articles about the relation between oil and gas activity and seismic events. The quakes in Irving were strong enough to knock some books off of shelves.

After residents of the town of Azle experienced a series of quakes in 2013, residents protested in Austin before the Texas Railroad Commission, and as a result the RRC hired its own seismologist to study the problem. Most scientists have linked quakes in Texas and Oklahoma to injection of large volumes of produced water. Recently one study in Ohio linked quakes there to recent fracking of wells in the area.

Most if not all of the actual studies of recent quake activity are being done by Southern Methodist University. It has studied the quakes around Azle, and a report of its study is expected soon. After the quakes in Irving, SMU is installing seismic monitors in that area.

Stories about the quakes:

Dallas Morning News

Dallas Morning News

Dallas Morning News

CBS News

Columbus Ohio Dispatch

Fort Worth Star Telegram

New York Times

Washington Post

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Ever heard of the Groningen gas field? Neither had I, until I read a recent article in the New York Times. It is in the Netherlands, and was discovered in 1959. 

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The field is operated by a joint venture of Royal Dutch Shell and Exxon Mobil. Today, the field produces about one-third of all natural gas produced in the European Union.  It produces more gas each year than Russia recently committed to sell to China, and contributes some $16.4 billion a year to the Netherlands’ national government. According to Wikipedia, as of 2009 the field had produced 39.3 trillion cubic feet, 60% of total reserves, and production is expected to last for another 50 years. It is listed as the ninth largest gas field in the world, based on estimated recoverable reserves. For comparison, the EIA estimates total U.S. proved shale gas reserves at about 129 tcf.  Some gas field.

The NYT article reports that earthquakes linked to the depletion of the field have recently been increasing in number and intensity, and the Dutch government has required the operator to reduce production by 20% to see if that will quell the tremors. That will put more pressure on the EU to find alternate gas supplies.

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The Ohio Department of Natural Resources has imposed rules on exploration companies requiring seismic monitoring around new well sites near fault lines and quake epicenters in the Utica Shale.  According to the Columbus Dispatch, the rules require monitors at new drill sites located within 3 miles of known fault lines or areas that have experienced an earthquake greater than magnitude 2.0. Monitors cost about $20,000 each, and as many as five are needed at each well. “ODNR officials said if monitors at drilling sites detect even a magnitude 1.0 quake, fracking will immediately stop and an investigation will start. If fracking is blamed, a moratorium would be instituted 3 miles around the epicenter,” according to the article. Earlier earthquake activity near Youngstown, Ohio was attributed to an injection well, which was shut down by Ohio DNR.

Earthquakes in Oklahoma and North Texas in the Barnett Shale, and more recently in the Eagle Ford in South Texas, have been linked to injection wells, but not to hydraulic fracturing. The Texas Railroad Commission has hired a seismologist to study the matter but has not imposed any new regulations on injection wells.

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As drilling activity in the onshore US continues to grow, more and more attention is being paid to the environmental effects of exploration and production.  Media stories abound about groundwater contamination, the demand for fresh water from hydraulic fracturing, increased air emissions from exploration and production, controversy over pipeline condemnation and construction, earthquakes linked to wastewater injection, increased traffic and accidents, and effects on endangered species. Recent examples:

Air Emissions

This week The Center for Public Integrity, InsideClimate News and The Weather Channel released a report, Big Oil, Bad Air, on the effects of drilling in the Eagle Ford Shale on air quality in South Texas.  The report is highly critical of the lack of regulation by the Texas Commission of Environmental Quality (TCEQ) of emissions from oil and gas exploration and production operations in that region. Criticism of the report has already hit the media. Here is an industry response to the report from Energy in Depth, a website sponsored by industry. The TCEQ says it plans to conduct video surveillance of air quality over the region this summer

Last month, the TCEQ and the US Environmental Protection Agency settled their dispute over EPA’s requirements for reducing emissions from industry in Texas. EPA had revoked TCEQ’s air permitting authority for failing to follow EPA requirements. As a result, permitting was greatly delayed for new projects, causing industry to pressure TCEQ and the State to settle the dispute so that permitting authority could be restored to TCEQ. Texas has been in a continuing series of battles with the EPA, and has sued the agency 18 times in the last 10 years. Gubernatorial candidate Greg Abbott has touted his battles with the EPA in his campaign. (“As Texas has proven in other lawsuits against the EPA, this is a runaway federal agency that must be reined in.”)

Debate continues over whether increased production and use of natural gas reduces greenhouse gas emissions. A large part of that debate is centered around how much methane is leaked in the process of producing and transporting it to end users.

Water Use

With the ongoing drought, the exploration industry’s water use in fracing has come under increased scrutiny. The EPA is engaged in a long-term study of the effect of industry activity on groundwater resources.

In Pennsylvania, drillers must submit a water-use plan disclosing how much water will be used, where it comes from, and what effect it will have on local sources; and the plan must include water recycling. In Texas, the exploration industry’s use of groundwater is largely exempt from regulation by local groundwater districts and is placing a strain on groundwater resources in South and West Texas. There is no effort yet in Texas to require companies to recycle. The first sustained use of water recycling on a big scale has been implemented by Apache in the Permian Basin, where Apache has installed a central water recycling system. To date, water recycling is still more expensive than using groundwater in most plays. But in the Permian, where groundwater is scarce, landowners have been selling their water for as much as a dollar a barrell, making recycling more competitive.

Seismic Activity

Earthquakes linked to oil and gas activity continue to make the news. In Texas, the town of Azle has made news protesting before the Texas Railroad Commission about quakes in the Barnett Shale they say are caused by injection wells. RRC candidates have expressed skepticism about any link between the quakes and oil and gas activity.  The RRC has hired a seismologist and is studying the matter, but so far has not shut down any injection wells in the area. Increased seismic activity in Oklahoma has been linked to industry injection wells there. In Arkansas, companies have shut down two injection wells believed to be linked to more than 1,000 unexplained earthquakes in the region.

 

 

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Recent news relating to oil and gas exploration and development in Texas:

Dune Sagebrush LizardGood article on efforts of industry and State regulators to avoid problems raised by possible listing of the Dune Sagebrush Lizard under the Endangered Species Act. Here is a map of the lizard’s habitat – right in the middle of the Permian Basin.

Earthquakes in the Oil Patch — Earthquakes in and around Azle, in the Barnett Shale, have caused quite a stir.  Here’s a good article from the San Antonio News. Everyone seems to agree that the quakes are caused by injection wells, except the Texas Railroad Commission, which until recently called the connection “hypothetical”. After one of the Commissioners, David Porter, faced angry homeowners at a town hall meeting in Azle, he called for the RRC to hire its own seismologist. Azle residents are planning a bus trip to Austin to attend the next RRC conference in protest.

Open Position on Railroad Commission Draws Seven Candidates — They are Ray Keller, Stefani Carter, Becky Berger, Malachi Boyuls, Wayne Christian, Ryan Sitton, and Joe Pool Jr. Few landowners realize how important the Commissioners are to their interests, and landowners should pay attention to the race. The Commission is often a springboard to running for higher office. Barry Smitherman, currently a commissioner, is running for Texas Attorney General. The race is mostly funded by the oil and gas industry and its lobbyists.

What Do Texans Think About Global Warming?  A recent report by the Yale Project on Climate Change Communication reveals the results of a poll taken of Texans in 2013:

  • Most Texans (70%) believe global warming is happening. Relatively few (14%) believe it is not.
  • Fewer than half of Texans (44%) believe that if global warming is happening, it is caused mostly by human activities. By contrast, 31% believe it is caused mostly by natural changes in the environment, while 11% believe it is a combination of the two causes.
  • Texans think global warming is important and are worried about it. About three in four (73%) say the issue of global warming is at least somewhat important to them personally. About half (54%) are at least somewhat worried about it.
  • Though virtually all climate scientists agree human-caused global warming is happening, many Texans, like most Americans, are unaware of this fact. Nearly half (47%) believe that “there is a lot of disagreement among scientists” about whether or not global warming is happening. Fewer(43%) believe most scientists think that global warming is happening.
  • Among those who believe global warming is happening, solid majorities believe it is currently having a large or moderate influence on the severity of heat waves (84%), drought (80%), and wildfires (72%) in Texas.
  • Among Texans who believe global warming is happening, large majorities expect to see a myriad of negative effects over the next 50 years. Nearly all anticipate more heat waves (95%) and increased drought and water shortages (92%) in Texas due to global warming. More than eight in ten believe Texas will experience worse storms, hurricanes, or tornadoes (87%), declining numbers of fish and native wildlife (86%), and increased allergies, asthma, infectious diseases, or other health problems (85%) due to global warming.
  • More than half of Texans say that more should be done about global warming at all levels of government–from Congress (62%) and President Obama (57%), to Governor Perry (59%) and Texas’s state legislature (56%), to local government officials (60%). However, even larger numbers of Texans believe that citizens themselves (69%) and corporations and industry (68%) should be doing more to address climate change.
  • Over half of Texans (55%) say the United States should reduce greenhouse gas emissions regardless of whether or not other countries do the same.
  • Many Texans believe that individual action, and especially collective action, can be effective in addressing global warming. Among those who believe global warming is happening, most (89%) say their own actions would reduce their personal contribution to global warming at least a little.
  • Virtually all Texans who believe global warming is happening say that if the same actions were taken by most people in the U.S. (96%) or around the world (96%), it would reduce global warming a little, some, or a lot. A majority of Texans (58%) say that President Obama is very or somewhat believable when speaking about energy- and climate-related issues. Half (50%) say Governor Rick Perry is very or somewhat believable regarding the same issues and four in ten (43%) say he is not very or not at all believable. Fewer than half of Texans say that either Senator Ted Cruz (46%) or Senator JohnCornyn (44%) is believable regarding energy and climate issues. 

UT Concludes that Fracing Reduces Water Use.  Researchers at the University of Texas have concluded that hydraulic fracturing actually reduces the amount of water used, by making it easier for generators to switch from coal plants to gas-fired plants, which use less water. “The bottom line is that hydraulic fracturing, by boosting natural gas production and moving the state from water-intensive coal technologies, makes our electric power system more drought resilient,” said Bridget Scanlon, senior research scientist at the University of Texas’s Bureau of Economic Geology and the lead author on the study. Meanwhile, a report from the San Antonio Express News says that water use for fracing in the Eagle Ford Shale has greatly exceeded expectations;  between 2011 and 2013, operators at 3,500 Eagle Ford wells reported using nearly 44,000 acre-feet of water — more than 153,000 San Antonio residents would use on one year.

Micro-Windmills May One Day Power Your Smart Phone.  This from Forbes. Here’s a photo:

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StateImpact Texas has published a series of good articles about the growing evidence that the huge quantities of wastewater being injected in the Barnett Shale field are causing earthquakes — some of sufficient intensity to cause significant damages. Lawsuits have been filed in Johnson County to recover for the damage.  StateImpact’s most recent article can be found here. Links to all of StateImpact’s articles on earthquakes caused by oil and gas activity are here.

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WoodMackenzie has recently come out with its 2013 ranking of the world’s twenty largest oil companies, and their change in production over the last ten years:

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(BOE is barrels of oil equivalent.)  As you can see, most are state-owned companies. Russia re-acquired its privately-owned companies. Saudi Arabia has increased its production 28% in the last 10 years.  Iran, despite the embargo, has increased its production by 24%, in part because of increased export of natural gas. Venezuela’s production has suffered from politicization of its national oil company. Shell’s efforts to increase production by acquiring a position in U.S. shale plays has not been successful. BP has sold off a substantial part of its production. China has invested big-time to fuel its economy. And the world economy has managed to survive $100 oil.  For comparison, the total world production in 2010 was about 137 BOE/day. These top twenty companies together produced about 60% of that total.

For a good article on these numbers, see Forbes’ article, The World’s Biggest Oil Companies – 2013, here.

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