HBW Resources: Ollison Hydraulic Fracturing Report
Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the use of hydraulic fracturing for oil and gas extraction. With numerous state legislatures now in session, HBW Resources is monitoring these activities to ensure that responsible and feasible policies based on sound science are advanced.
At a Senate Energy & Natural Resources Committee hearing last month, Secretary Jewell announced an extension of 60 days for the comment period for the proposed hydraulic fracturing rule on federal and Indian lands. The extension will give the public a total of 90 days to comment on the proposed rule. Comments are due on August 23rd.
To Submit Comments:
U.S. Department of the Interior, Director (630)
Bureau of Land Management, Mail Stop 2134 LM
1849 C St., NW
Washington, DC 20240
Federal eRulemaking Portal: http://www.regulations.gov Follow the instructions at this Web site. Comments on the information collection requirement
Office of Management and Budget (OMB), Office of Information and Regulatory Affairs, Desk Officer for the Department of the Interior, fax 202-395-5806.
firstname.lastname@example.org. Please indicate “Attention: OMB Control Number 1004-0203,” regardless of the method used to submit comments on the information collection burdens.
For more information please contact HBW Resources.
State Legislative Update: Please see linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing.
Activists in 15 California cities and counties have launched petition drives demanding that their local officials block hydraulic fracturing. The online petition to halt fracking in Los Angeles County, for example, had 5,546 signatures by this past Monday evening. Fracking opponents have been trying to pressure Gov. Jerry Brown into imposing a statewide ban. But so far, he has shown little interest in halting the practice, which has triggered a boom in oil and natural gas production in other states. The local petition drives, begun with the help of liberal organizing group Credo, are designed to add to that pressure. They also aim to block fracking in some of the places it is already occurring, such as Fresno, Kern and San Benito counties.
The City of Loveland’s clerk said an anti-fracking group had collected enough signatures to place a two-year ban of in-town hydraulic fracturing on the fall ballot. City clerk Terry Andrews verified 2,256 signatures gathered by Protect Our Loveland. Under state law, the city council must, by Sept. 6, adopt the proposed ordinance that would stop the oil and gas extraction technique known as hydraulic fracturing within city limits for two years, or refer the measure to the fall ballot. This action follows the planning commission recommending changes (starts on page 34) to zoning rules to allow building within buffer zones around oil and gas facilities. The city planning commission Monday night voted 7-1 to recommend City Council amend an ordinance to allow some development in “no-build” buffer zones around oil and gas facilities. For more information please contact HBW Resources.
Florida Power & Light Company (FPL) demolished its 1960s-era Port Everglades Power Plant in Hollywood, Fla., to make way for a new, clean energy center powered by American natural gas. Construction of FPL’s Port Everglades Next Generation Clean Energy Center will begin in the first quarter of 2014 at the same location of the now-demolished power plant. The new, cleaner and more efficient power plant will begin serving customers in June 2016. The high-efficiency facility will generate enough electricity to power about 260,000 homes and businesses using 35 percent less fuel than the original plant. This improved fuel efficiency will result in the savings of hundreds of millions of dollars in fuel costs – all of which will be passed along to FPL customers, dollar for dollar. For more information please contact us.
Kansas utility regulators are considering new rules to require oil and natural gas companies to disclose some information about the chemicals they use in hydraulic fracturing. The rules would require companies to disclose the chemicals they use in hydraulic fracturing. The information would have to be listed on a Kansas Corporation Commission (KCC) database or in an existing online industry database. Companies could avoid disclosing all of the details if the chemicals they used were a trade secret. Those substances still would have to be disclosed to the KCC and other state and local officials if there’s a problem, even if it’s not an emergency.
Goodrich Petroleum has entered into a definitive agreement to purchase a 66.7% working interest in producing assets and approximately 277,000 gross acres in the Tuscaloosa Marine Shale in the US for $26.7 million. The remaining 33.3% working interest owner in the producing assets and leasehold has elected to retain its interest and participate with the company in developing the assets. The acquisition is subject to customary due diligence and is expected to close on or before August 22, 2013. The gross oil production associated with the properties averaged approximately 750 barrels of oil per day for March 2013. The Company plans to fund the acquisition with its senior credit facility, which along with available cash had approximately $190 million of available liquidity pro forma at March 31, 2013. Upon closing of the transaction, the Company’s borrowing base will increase by $18 million to $243 million.
The Marcellus Shale Safe Drilling Initiative Advisory Commission, assembled by Gov. Martin O’Malley (D) in 2011, has been considering the Comprehensive Gas Development Plan (CGDP) since last year and will eventually make recommendations to state officials to require the CGDP submittal, make it voluntary or scrap the idea altogether. John Quigley, an environmental consultant who previously headed Pennsylvania’s Department of Conservation and Natural Resources, presented a report, “The Case for Maryland’s Proposed Comprehensive Gas Development Plan Program,” to a Maryland advisory panel. With a CGDP requirement, drillers would have to submit a design addressing all land “on or under” proposed exploration or production, as well as the proposed locations of well pads, roads, pipelines and other natural gas facilities. For more information please contact HBW Resources.
State Sen. Rick Jones (R, District 24) is pushing tax incentives to prompt construction of a new oil processing facility in the state. Sen. Jones is not talking about a plant the size of the sprawling Marathon refinery in southwest Detroit, the only one in Michigan. Jones wants one of those small, so-called “portable” refineries being pioneered in oil-rich North Dakota. “It would be a smaller, leaner, cleaner operation that would make gasoline for the Michigan market,” said Jones, who filed his legislation Wednesday. “I’d use the Michigan Strategic Fund to give them a 10-year property tax and business tax abatement. We’d also help them find a suitable place to build.” Motor fuel and natural gas production are major growth segments for the U.S. economy as a result of huge new deposits and new extraction techniques in North America. Another refinery might not lower pump prices but still could be a good strategic move creating new jobs for Michigan.
State Rep. Mike Callton (R, District 87) is hosting a town hall meeting on Monday, July 29 to discuss hydraulic fracturing of oil and gas wells. Rep. Callton will be joined by representatives from Michigan Oil and Gas Producers; Michigan Department of Environmental Quality and the Michigan Environmental Council. The panel will speak about the history of fracking and its current utilization for providing natural gas. Comments and questions from the audience will be encouraged. The meeting is free and open to the public, and will run from 7 p.m. to 9 p.m. at the Barry County Commission on Aging, 320 W. Woodlawn Ave. in Hastings.
The Department of Natural Resources and Minnesota Pollution Control Agency put out requests for comment as they determine a plan to conduct rulemaking related to sand mining rules. The Legislature ordered the agencies to develop regulatory standards. Both agencies say new rules are months away from completion. For more information please contact us.
Seven months after a tanker ran aground in December, tankers hauling Canada-bound crude oil have resumed navigating the Hudson River. The Bahamian-flagged vessel Afrodite took on crude at the Port of Albany on Wednesday in preparation for its third round trip to the Irving Oil Co. refinery in St. John, New Brunswick. The tanker can store up to 230,000 barrels of crude, primarily drawn from North Dakota’s Bakken Shale. The Afrodite is about 25 feet narrower than the Stena Primorsk, which damaged its hull after crashing into some rocks on its debut voyage to St. John late last year. Since that incident, midstream services company Buckeye Partners LP shipped crude along the Hudson by barges, which hold less oil than tankers but typically have shallower drafts that make them less likely to run aground. Much of the crude transferred to tankers at the Port of Albany arrives from the Bakken Shale via rail.
The Town of Marbletown joined the list of more than 170 localities around the state that have enacted bans or moratoriums on hydraulic fracturing, using its liquid drilling wastewater or any other aspect of shale gas development. For more information please contact HBW Resources.
The state Senate approved, HB 74 the Regulatory Reform Act of 2013, that would give select members of the Mining and Energy Commission the authority to review any “trade secret” claim made by energy companies before the chemicals used in fracking are brought out to a drill site and pumped into the ground. The legislative proposal came after James Womack, chairman of the Mining and Energy Commission, sent a strongly worded letter to lawmakers complaining about earlier efforts by a Senate committee to create a loophole for energy companies to avoid disclosure. The loophole would have allowed energy companies to use a trade secret claim if they didn’t want to disclose chemicals they deemed to be sensitive or competitive. The N.C. Mining and Energy Commission, which is writing 120-some rules to govern fracking, had vowed to write one of the nation’s strictest chemical disclosure standards: full disclosure of all chemicals used to frack in the state, providing maximum protection to the public and to the environment. Under the legislative proposal, review of trade secrets would be strictly controlled. The corporate secrets wouldn’t be accessible to the public, while Mining and Energy Commissioners would have access on a limited basis.
Ohio bonding and liability requirements are insufficient to cover the cost and damage from a drilling accident or problems in the developing Utica shale and need to be raised, two groups said. Environment Ohio and Policy Matters Ohio held a teleconference to release the report, “Who Pays the Cost of Fracking?” that looks at Ohio’s shortcomings. It was done by the Environment Ohio Research and Policy Center.
Rockies Express Pipeline LLC (REX) has announced that it has executed a binding precedent agreement with an unnamed Utica Shale producer who wants to transport up to 200,000 Dth/d of processed Utica production through REX to markets in the Midcontinent.Pending satisfaction of certain conditions in the agreement, the processed gas will enter into REX through a newly constructed 14-mile residue header being installed by REX at the tailgate of MarkWest’s Seneca Processing Complex in Noble County, Ohio. The new facilities, which are expected to be in service in late 2013, will add significant natural gas supply to the east end of REX for transport to points west or east.
After the “community bill of rights” failed in the May primary election, a group of anti-fracking activists are back at it, trying to put the initiative on the November ballot. The bill was defeated in May by a margin of 57 percent to 43 percent. The proposed charter amendment would ban compression stations and pipelines from being installed within city limits in addition to banning any type of fracking operations or disposal wells for wastewater from fracking. The bill does include one change in language compared to the previous version. It exempts manufactured products, including the sale of components and materials used in oil and gas exploration, from the proposed ban. The Mahoning Valley Coalition for Job Growth and Investment will be brought back together to oppose the bill a second time. The coalition includes business leaders, along with local Republican and Democratic party leaders who opposed the bill. For more information please contact us.
The Muskingum Watershed Conservancy District has approved a new water sale from Seneca Lake to a Utica shale driller. The agency’s governing board, meeting at Atwood Lake last week, approved a deal for August through October with Colorado-based Antero Resources. The board agreed to reduce the maximum per-day amount of water being sold from 2 million to 1.5 million gallons because of drier conditions in those months. Antero will pay $6 per 1,000 gallons. The deal sets a maximum amount of 138 million gallons of water, officials said.
The Ohio State University’s researchers want to install and study a gas well in eastern Ohio to study the process of hydraulic fracturing, or fracking. The shale drilling well would be built on university owned land in Noble County. The plan would open the school’s Eastern Agricultural Research Station to shale drilling and would provide an opportunity to closely examine how fracking alters the environment and assess possible pollution risks to the air and groundwater. Ohio State’s Shale Water Management Research Cluster is researching ways to estimate the impact of water withdrawals from lakes and streams as well as how to treat waste fluids that bubble out of fracked shale wells. The university owns 780 acres of mineral rights at the Noble County research station. For more information please contact HBW Resources.
The Athens County Board of Elections has certified signatures needed to place a hydraulic fracturing ban on the Nov. 5 general election ballot in the city of Athens. Approximately 780 signatures were submitted to Athens City Auditor Kathy Hecht earlier this month, then forwarded to the elections board for certification. The title of the proposed ballot issue is “The Athens Community Bill of Rights and Water Supply Protection Ordinance.” The legislation would also ban activities associated with fracking such as the procurement of millions of gallons of fresh water, use of undisclosed chemicals, and the disposal of fracking waste in Class II injection wells. The ordinance would advise communities upstream from Athens that “industrial accidents and unwanted chemical events which cause pollution of Athens’ drinking water will be prosecuted to the full extent of the law, citing ORC VII 743.25, which authorizes any municipality to prosecute water supply polluters upstream to a distance of 20 miles.
A landmark federal study on hydraulic fracturing, or fracking, shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press. Although the results are preliminary — the study is still ongoing — they are a boost to a natural gas industry that has fought complaints from environmental groups and property owners who call fracking dangerous. Eight new Marcellus Shale horizontal wells were monitored seismically and one was injected with four different man-made tracers at different stages of the fracking process, which involves setting off small explosions to break the rock apart. The scientists also monitored a separate series of older gas wells that are about 3,000 feet above the Marcellus to see if the fracking fluid reached up to them.
Natural gas companies fixed or are repairing at least 413 miles of state roads in Susquehanna, Wyoming and Wayne counties, a Times-Tribune review of state Department of Transportation records show. In one example, more than $1 million in natural gas impact fees will be used to pave and repair 25 of Williamsport’s streets this fall and next year, enabling the city to get twice as many projects done as in years before, city officials said. “We’re doubling the amount of investment because of Marcellus Shale impact fees,” said John Grado, city engineer and director of community and economic development. Gas impact fees, those derived from taxes on local gas wells, will enable more to be done and less dependence on the city’s general fund, community development block grants or liquid fuels allocations, he said. For more information please contact us.
For every one job created on a drilling rig in the Permian Basin by the hydraulic fracturing craze taking over in West Texas, two jobs will be generated in Houston’s downtown skyscrapers, Bob Perryman, a Texas economist, told the Business Journals recently.
Oil production in Texas’s Eagle Ford shale formation rose 58 percent in May from the prior year. The nine fields that make up the majority of Eagle Ford yielded 581,923 barrels of crude a day, according to preliminary data released by the Texas Railroad Commission, which oversees oil and gas drilling in the state. The fields produced 368,770 barrels daily in May 2012. February output was revised to 574,032 barrels a day from the preliminary report of 530,689, the commission said. Production totals typically increase in subsequent months as the state receives revised, corrected or late reports. Growing production out of Eagle Ford is helping fuel a renaissance in Texas crude.
Magnum Hunter Resources has sold its properties in the Eagle Ford Shale’s oil-rich Gonzales and Lavaca counties for $401 million. A wholly-owned subsidiary of Penn Virginia Corp. made the purchase for $361 million in cash and $40 million in Penn Virginia common stock. The properties involved in the sale included 19,000 leasehold acres and Magnum Hunter’s operating and non-operating interests in wells in Gonzales and Lavaca counties. For more information please contact HBW Resources.
Lubbock’s Board of Health wants the city to hire its own inspectors to oversee new oil and gas fracturing ventures expected to come to town years from now, according to a presentation made to the City Council. The council held a brief work session at the end of its meeting to receive a presentation of health board recommendations for dealing with public health concerns related to new horizontal drilling and fracking operations. Employing inspectors on the city payroll is one of several changes the board is asking the city to consider.
A coalition of conservation groups has filed a ‘request for agency action’ challenging the Utah Department of Air Quality’s June 21 approval of a new oil refinery in Green River, Utah that would affect local and regional air quality and facilitate oil shale and tar sands mining in the Colorado River Basin’s Green River Formation.
Twenty households east of Pavillion are getting cisterns, or water tanks, for clean drinking water, paid for by the Wyoming Legislature after residents complained that hydraulic fracturing in the area contaminated their water. The Casper Star-Tribune reports that the water tanks are coming because lawmakers last year set aside $750,000 to supply them. The residents live in a 23-square-mile area east of Pavillion, in the Pavillion gas field. Each household participating in the project will get a pair of polyethylene tanks buried side-by-side. Each tank will have capacity for 1,750 gallons of water.
A landmark federal study on hydraulic fracturing shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press. After a year of monitoring, the researchers found that the chemical-laced fluids used to free gas trapped deep below the surface stayed thousands of feet below the shallower areas that supply drinking water, geologist Richard Hammack said. Although the results are preliminary — the study is still ongoing — they are a boost to a natural gas industry that has fought complaints from environmental groups and property owners who call fracking dangerous. The study done by the National Energy Technology Laboratory (NETL) in Pittsburgh marked the first time that a drilling company let government scientists inject special tracers into the fracking fluid and then continue regular monitoring to see whether it spread toward drinking water sources. The research is being done at a drilling site in Greene County, which is southwest of Pittsburgh and adjacent to West Virginia. NETL estimates that its final report will be completed by the end of the year. For more information please contact us.
Rep. Bill Flores (R, TX 17) introduced H.R. 2728, the “Protecting States’ Rights to Promote American Energy Security Act.” The House Natural Resources Committee’s, Subcommittee on Energy and Minerals had a hearing on this proposal yesterday. The panelists included: Catherine Foerster, Chair and Engineering Commissioner, Alaska Oil and Gas Conservation Commission; Christi Craddick, Commissioner, Railroad Commission of Texas; John Rogers, Associate Director, Utah Division of Oil, Gas & Mining; and Lois Epstein, Arctic Program Director, the Wilderness Society. The bill would exempt states with existing hydraulic fracturing regulations from the proposed BLM rule. The Energy Producing States Coalition submitted a letter in support of the legislation. For more information please contact HBW Resources.
House Science Committee Chairman Lamar Smith (R, TX 21) is weighing legislation to alter the scope of the Environmental Protection Agency’s (EPA) study on the impact of oil-and-gas hydraulic fracturing on drinking water. Smith, who said the EPA has been “complicit” in efforts to undercut gas production enabled by hydraulic fracturing, said he fears the study’s design does not put risks in their proper context. The Subcommittee on Environment and Subcommittee on Energy held a joint hearing to discuss “Lessons Learned: EPA’s Investigations of Hydraulic Fracturing.”
The proposed Bureau of Land Management hydraulic fracturing rule could cost about $345 million annually to implement, according to a new economic analysis commissioned by the Independent Petroleum Association of America and Western Energy Alliance. This may be relatively good news for producers, though, since this cost estimate comes after the rule was revised from its original May 2012 proposal. Before the U.S. Department of the Interior incorporated public comments into its initial proposal, analysts at John Dunham & Associates said the rule could have cost industry nearly $1.3 billion annually. According to the Western Energy Alliance the cost of the second version of the rule is lower than the first because the new rule eliminated a requirement to regulate well maintenance; revised Bureau of Land Management estimates on the number of impacted wells; the reduction of permitting times; and “type well” provisions that will require operators to run full testing only on representative wells in a field. BLM has estimated the rules it proposed in May would cost drillers only $12 million to $20 million per year.
Senate Commerce Chairman Jay Rockefeller (D, WV) is looking into oil and gas transportation safety issues following the recent oil train disaster in Quebec and a 2012 pipeline blast in West Virginia. He’s asked GAO to ‘examine the impact of shale oil and gas development on transportation infrastructure and safety,’ in particular how infrastructure has changed as domestic oil and gas production in recent years has increased. Canadian officials have found 42 bodies and are still searching for five more at the site of the July 6 train disaster in Lac-Megantic, Quebec.
Natural gas prices were up nearly 60 percent in the first half of 2013, compared with the same period last year, but they were still too low to inspire new drilling in much of the country, according to the U.S. Energy Information Administration. Contracts for future delivery of natural gas currently are selling at about $3.70 per million British thermal units, just below the $3.75 average for natural gas in the first half of 2013, the agency said. In 2012, natural gas sold for an average of $2.39 through the first half of the year, the agency reported. The 57 percent jump in prices was enough to push many power generators to switch from burning natural gas to using coal, since it is more economic at current prices, the agency said. But $3.70 is by no means a high price, remaining too low to be of interest for most producers hoping to make a profit, said James Sullivan, senior analyst for Alembic Global Advisors, which has been tracking natural gas prices. Natural gas prices would likely have to be near $5 to encourage more drilling for the resource, with most companies believing that producing it would not be profitable below that range, Sullivan said.
Natural gas is helping cut emissions. But gas use will have to peak in 2030 to meet emissions reduction targets for combating climate change, Darryl Banks and Gwynne Taraska of the Center for American Progress write in a paper out today. “In the near term, we should use the expansion in natural gas to aggressively drive coal from the market, given that natural gas burns more cleanly than other fossil fuels and is currently available and affordable. The natural-gas expansion, however, needs to be managed safely and sustainably and without overbuilding long-term electricity-generation capacity that would then need to be retired.” For more information please contact HBW Resources.
Sen. Jim Inhofe (R, OK) has introduced S. 1355, which would remove a cap on CAFE-related credits for producing dual-fuel natural gas vehicles. “My bill would ensure NGVs are given equal treatment with electric vehicles,” said Inhofe.
The U.S. Department of Justice has started an antitrust investigation of the pressure-pumping business, a key component of the oil and gas industry practice of hydraulic fracturing, Baker Hughes Inc said in a filing with the Securities and Exchange Commission. Baker Hughes said it received a “civil investigation demand” from the DOJ under the Antitrust Civil Process Act. The request sought information relating to the U.S. pressure-pumping market beginning May 29, 2011.
The Algerian Minister of Energy and Mines, Youcef Yousfi, and Eni’s CEO, Paolo Scaroni, met in Algiers, Algeria where they discussed future developments of cooperation between Eni and Sonatrach, a government-owned energy company, for the exploration and development of shale gas. The two companies have finalized a Memorandum of Understanding and will bring together their experience in the exploration and production of unconventional hydrocarbons.
With the discovery of shale gas reserves in Brazil and plans to auction drilling rights there, a delegation is visiting Pennsylvania to see how its drilling boom has turned the state into one of the leading natural gas producers in the U.S. The group of Brazilian business and energy industry professionals hopes to learn from the state’s experience and to explore the possibility of exports to Brazil. The group is meeting with Pennsylvania regulators and drilling companies and touring a drilling site in western Pennsylvania.
Empresa Nacional del Petroleo (ENAP), Chile’s state oil company, reported that they have found gas through a “successful experiment” using hydraulic fracturing on the Tierra del Fuego island. The find was from wells drilled in 2012 and 2013, utilizing injection of water, sand and chemicals to facilitate the flow. The overall productivity has yet to be determined but ENAP is interested enough to be investing $100 million in the Magallanes region this year. For more information please contact us.
PetroChina and U.S. energy company Hess Corp have signed China’s first joint agreement to develop a shale block – an 800 square kilometer block in the Santanghu basin, located in the region of Xinjiang – as well as to conduct a joint study. For more information please contact HBW Resources.
Hungary may be sitting atop shale gas assets totaling 2 trillion cubic meters, but for now Minister of Rural Development Sándor Fazekas is still taking a cautious stand on fracking. For Fazekas, the key issue on the meeting’s agenda for Hungary was the question of shale gas extraction, and as the minister pointed out, the resources found in Makó are of “extraordinary value” to the country. However, Fazekas did emphasize that “it is very difficult to estimate the possible environmental danger posed” by fracking and “the extraction of shale gas also requires the establishment of many more wells, which brings up questions related to landscape protection and conservation,” among other issues.
Three companies currently hold options licenses to assess whether hydraulic fracturing would be viable in parts of Ireland. However, they won’t get the go-ahead from the Government unless the Environmental Protection Agency’s report, due next year, comes out in favor of fracking. Energy and Natural Resources Minister Pat Rabbitte refused to condemn the practice and hinted that it could be a viable option in Ireland. He explained, “The study will settle the science on this and that we can then make evidence-based decisions on our future.”
The debate over potential profits and possible environmental harms of hydraulic fracturing is being played out in a far more immediate confrontation in the east Polish village of Zurawlow. A group of farmers and residents are occupying a plot of land to prevent Chevron, which is backed by the state, from exploring for shale gas. The citizens of Zurawlow once supported the proposal to drill in the “Grabowiec concession,” a gas-rich region running beneath southeast Poland, in the hope that it would create much-needed jobs in the region. Opinion changed when two families’ well water turned black after Chevron’s seismic tests in 2010.
The negative impact of shale gas on the GCC won’t be significant for at least another 20 years, citing the high cost of shale gas and projected growth in Asia’s oil consumption, Kuwait-based Asiya Investments said in its new report titled “Shale gas impact on the GCC”. The report indicated that GCC oil exports weight shifted from US to Asia. OPEC projects that China’s imports of crude oil will outpace the U.S. crude oil imports by 2014, as its rising refining capacity is propping up demand. The rest of Asia will also play an important role in keeping oil demand high. Furthermore, even if the US is able to tap its reserves adequately, and would shift from being the world’s leading importer of oil to a net exporter by 2017 and become energy independent by 2030, the lost demand for oil from the U.S. will be offset by Asia.
Yoon Sang-jick, the South Korean minister of trade, industry and energy, recently met with heads of energy companies in Sejong City and encouraged to take part in the global development of shale gas, the country’s Yonhap News Agency reported. According to the minister: “We must quickly set up a strategic plan to join the global efforts develop shale gas when considering the impact the development of shale gas in the North American region will have on our petrochemical firms.”He added that South Korea’s petrochemical companies could suffer a significant setback if American competitors set up production facilities using shale gas. To curtail this, the minister recommended that the government and local energy firms consider establishing overseas facilities that will develop and produce natural gas, including shale gas. The government also agreed to jointly develop new technologies and production facilities for the petrochemical industry in order to have competitive prices. For more information please contact us.
The UK House of Lords Economic Affairs Committee has launched an inquiry into the “Economic Impact of Shale Gas and Oil on UK Energy Policy” and is inviting written evidence on the issue to be received by September 30th. Questions the committee is seeking evidence on include:
- How much scope is there for shale gas and oil to be used in the UK? Over what timeframe?
- How will the costs, including those on the environment, of accessing the UK’s shale gas and oil compare to those of other energy sources?
- What is the potential impact of shale gas and oil on the local economies in areas where development is possible?
- What forms of electricity generation is shale gas likely to displace and by how much?
- What impact will shale gas and oil have on household energy bills?
- What effect will the use of shale gas and oil have on carbon emissions compared to other combinations of energy sources?
- Will shale gas and oil increase UK energy security?
- What lessons can be learnt from the US experience of shale gas and oil?
The UK government has announced plans for a shale gas ‘pad’ allowance, which will see the tax on revenue that companies make from producing shale gas reduced from 62% to 30%. The plans are based on existing allowances for oil and gas production which aim to support almost £14 billion of investment next year and are being touted as the most generous shale incentives in the world. Under its plans, the tax break would apply to a proportion of the income generated from shale gas production. What that proportion is will be determined after a consultation. The government has also confirmed plans to give communities that host shale gas sites £100,000 per site, and up to 1% of all revenues from production. For more information please contact HBW Resources.
British water company United Utilities said it was in the early stages of discussing what natural gas company Cuadrilla may need for a fracking campaign. “We are having very early engagement with Cuadrilla to try to understand their requirements,” the spokeswoman was quoted as saying Saturday by The Daily Telegraph. “The fact that we are a large landowner in the northwest means we could possibly help with site selection.”
Protestors have blocked a lorry from entering a site where Cuadrilla is due to start test drilling for shale oil after receiving an Environment Agency Licence earlier this week. A small group of activists have remained at the site since early this morning and police are attending the scene. Cuadrilla have been transporting drill parts onto the site near Balcombe, West Sussex, since Tuesday and planned to begin operations on Monday. The local anti-fracking group, which has been joined for the demonstration by environmental protestors from further afield, has mounted a growing campaign over the past year, citing fears of pollution from gas flaring, disruption from lorries carrying fracturing liquids through the village and the possible pollution of local water courses. For more information please contact us.
Water UK, which represents major water suppliers, has published a series of concerns about fracking and warned that failure to address them could “stop the industry in its tracks.” Ministers hope the process, which involves pumping water, sand and chemicals into the ground to extract gas trapped in rocks, could unlock a major new source of gas for Britain and bring down household energy bills.
For additional information, please contact Bo Ollison with HBW Resources. His contact information is below.
If you have any general questions, please contact us anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report, the HBW Greenfield Offshore Energy Report, the Forsgren Environmental Report, and daily updates and new Member profiles can be viewed at the new Intelligence Tab on the HBW Resources website at: https://hbwresources.com/intelligence/. Hope you all have a great day!
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