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I recently ran across an article on the Energy In Depth website titled “Turning Natural Gas Into Water: Hydraulic Fracturing Doesn’t Deplete Water Supplies.”  Energy In Depth is a website of the Independent Petroleum Association of America dedicated to “a research, education and public outreach campaign focused on getting the facts out about the promise and potential of responsibly developing America’s onshore energy resource base ” The article responds to an argument made by many organizations concerned about the large quantities of water used in fracing. The concern is that, while many uses of water return that water to the water cycle, water used in fracing is usually disposed of by injecting it underground, where it will never return to the water cycle.

Energy In Depth’s response to this argument is that, while injecting the used frac water — called “flowback” — does remove that water from the water cycle, the burning of the gas (or oil) produced by the wells creates more water than was used in the fracing of the wells.  So, the argument goes, fracing of wells actually “creates” new water that is added to the water cycle.  EID’s article goes on to calculate that, while a typical Marcellus gas well will remove 4 million gallons of water from the water cycle, that well will produce two billion cubic feet of gas which, when burned, will yield about 22 million gallons of “new” water.  Within the well’s first six months of production, the gas it produces will create more than 4 million gallons of water when burned as fuel.  Problem solved!

I asked a hydrologist friend of mine to look at EID’s calculations. He agreed that their math is correct, but he cautioned that the problem is not so simple.  EID’s argument assumes that the energy created by burning the natural gas from EID’s typical well would not have been created by the burning of other fossil fuels.  If, in other words, the gas is burned to create electricity, and if that electricity would have been created by burning coal if the well had not been drilled, then the net result is that water has been lost to the water cycle by injecting the flowback from the well.

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A memorial service, open to the public, will be held today for wildcatter and philanthropist George P. Mitchell – actually, three memorial services, as befits one of the great Texans of the 20th century.  The Houston Chronicle in fact named him Houstonian of the Century. By all accounts, he was not only an entreprenurial genius, but a kind and generous man, a family man, and a man who gave back to his communities in many ways.

In one of his last public interviews, Mr. Mitchell addressed the issue of the safety and environmental risks of hydraulic fracturing and horizontal drilling.  I wrote about that interview.  He said that he supports tough regulation of independent operators. “I’ve had too much experience running independents,” Mitchell said. “They’re wild people. You just can’t control them. And if it doesn’t do it right, penalize the oil and gas people. Get tough with them.”

Last year, Mr. Mitchell and Mayor Michael Bloomberg published an op ed piece in the New York Times supporting tighter regulation of the industry. What they said bears repeating. They pledged that their foundations

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 Those who visit my blog regularly know that I love charts and graphs. Below is a Sankey diagram produced by Lawrence Livermore Labs for the Department of Energy.  Sankey diagrams are named after Irish Captain Matthew Henry Phineas Riall Sankey, who used this type of diagram in 1898 in a publication on the energy efficiency of a steam engine.  The diagram below may also be viewed here.   

In the diagram, sources of energy are on the left, uses of energy are on the right. The first remarkable thing that struck me is how much energy is “rejected.” Most of the petroleum used in transportation, and most of the fuel used to generate electricity, is rejected. A huge loss by inefficiency. Avoiding even a small amount of this inefficiency would in effect create a new source of energy.

Note also the small contributions of renewable energy sources — biomass, solar, hydro and wind — to the total. And the as-yet very small contribution of natural gas to the consumption of energy for transportation.

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For those following the Klotzman protest of EOG’s allocation well permit (our firm represents the protestants), here are the exceptions to the examiners’ proposal for decision filed by EOG and by Intervenors Devon, Pioneer, Laredo Petroleum and BP America:

EOG Exceptions to PFD.pdf

Devon et al Exceptions to PFD.pdf

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The Sunset Commission’s final report on the results of its recommendations for reform of the Texas Railroad Commission can be found here. The report’s summary:

Summary of Final Results

S.B. 212 Nichols (D. Bonnen) — Not Enacted

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Mose Buchele has written a series of articles, also aired on KUT, about the pipeline industry’s failed efforts to make it easier for pipelines to exercise the power of eminent domain after the Texas Supreme Court’s decision in Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline-Tex., LLC, 363 S.W.3d 192, 198 (Tex. 2012), about which I have written previously. Good reading. Links are below.

http://stateimpact.npr.org/texas/2013/07/17/eminent-domain-how-the-courts-are-transforming-texas-land-rights/#more-29814

 

http://stateimpact.npr.org/texas/2013/07/15/eminent-domain-in-texas-landowners-face-continued-uncertainty/

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Last week I presented a paper at the Texas State Bar Advanced Real Estate CLE Conference for attorneys in San Antonio. I was asked to write a paper giving real estate attorneys a basic introduction to negotiating oil and gas leases. It might seem odd that real estate attorneys would want a primer on oil and gas leases; most people would assume that an attorney practicing real estate law in Texas would know about oil and gas leasing. And that used to be true, when the majority of attorneys had a rural general practice. General practitioners in Texas knew the basics of real estate and oil and gas law and often helped their landowner clients negotiate leases. Today, most real estate attorneys have little to do with oil and gas matters, and as practices have become more specialized the oil and gas specialty has diverged from the real estate specialty.

I was given thirty minutes to make my presentation – hardly enough time to do justice to the subject of oil and gas leases. The exercise of preparing my remarks caused me to focus on some basic concepts that I’ve not recently thought about, and I decided they would make a good topic for discussion here.

The oil and gas lease is in many ways a unique form of contract. It is the foundation of the oil and gas industry in the U.S. Because most minerals in the U.S. — unlike most of the world — are privately owned, some way had to be found for those willing to risk capital to exploit oil and gas to obtain rights to those resources. The oil and gas lease was the result. In its basic form, the oil and gas lease has remained unchanged since the early days of the industry.

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There has been a lot of discussion lately about the demand on groundwater from its use to hydraulically fracture wells, and possible contamination of wells by hydraulic fracturing and improper completion of wells.

Air Products and Chemicals is promoting the use of nitrogen foam instead of water in fracking in shallower formations. 

http://www.cryogas.com/pdf/Link_Nitrogen%20Fracs_Water_Air%20Products.pdf

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