HBW Resources State & Local Fracking Report
Below is a summary of publicly available activities currently underway at the local and state level that could impact natural resource extraction, particularly related to hydraulic fracturing and shale development. To better utilize this document, we’ve broken the information down by region. 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. Be sure to check each week for updates in various regions that pertain to your business operations.
- The federal government has approved three new fracking jobs off the shores of California
- Legislation banning hydraulic fracturing is moving forward in both the Hawaii House (HB 2359) and Senate (SB 2940)
- Illinois SB 3230 would remove a provision from the Illinois Hydraulic Fracturing Tax Act that allows the fuels to be taxed at just 3 percent after they are extracted from the ground
- The state of Michigan has pledged to contact township supervisors when companies apply to drill in their communities
- The Joint Landowners Coalition of New York, representing 70,000 upstate landowners, has sued Gov. Andrew Cuomo in an attempt to force a decision on hydraulic fracturing for natural gas
- The town of Chautauqua, NY has voted against a moratorium on horizontal hydraulic fracturing
- Gulfport Energy Corp. agreed to acquire another 22,000 net acres in the Utica Shale in Eastern Ohio from Windsor Ohio LLC for about $220 million
- Gates Mills, OH’s Mayor wants property owners to form a real estate trust to control the location of hydraulic fracturing sites
- Rice Energy has agreed to acquire gathering assets in eastern Washington and Green Counties (PA), from M3 Appalachia Gathering for $110 million
- York County (PA) commissioners approved allocating the York County Farm & Natural Lands Trust $80,000 per year for the next three years
- Marcellus Shale Coalition is sponsoring a major rally of Pennsylvania shale advocates, the “United Shale Advocates Rally” is slated for May 6, 2014
- Oil-and-gas industry jobs inside the Eagle Ford Shale are expected to expand by 53 percent from 2010 through the end of this year
- Fueled by the rapid expansion of the oil and gas industry, Texas exports reached their highest value in history in 2013, jumping 5.6 percent over the previous year
- NuStar Energy L.P. says it has completed a private marine loading dock at Corpus Christi’s North Beach Terminal
- Trinity East Energy is suing the city of Dallas, which denied the company drilling rights to mineral interests it leased from the city
- Occidental Petroleum Corp. announced its plans to move the company to Houston. The company will have exploration and production operations in the Permian Basin and elsewhere in Texas
- With patents issued and pending on its technology, Wisconsin-based AquaMost raised $1.31 million from outside investors in January, bringing the total amount raised since 2010 to $7.4 million
State Legislative Update: Please see the linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing.
The federal government has approved three new fracking jobs off the shores of California as state coastal regulators voiced concerns about potential environmental impacts. The work in the Santa Barbara Channel, site of a 1969 oil platform blowout, has not yet begun and it was not immediately clear when it would. The disclosure came as the California Coastal Commission attempts to exercise greater oversight of the contested practice known as hydraulic fracturing, which involves pumping huge amounts of water, sand and chemicals deep into rock formations to free oil. The government oversees fracking that occurs more than three miles off the coast, but it has not distinguished the practice from regular drilling in the permit process. The state coastal commission can have a say regarding fracking jobs in federal waters if it determines the work presents a threat to water quality closer to shore. Through the Freedom of Information Act, the AP found the Bureau of Safety and Environmental Enforcement, or BSEE, the federal agency in charge of offshore drilling, approved a new project last March. The bureau on Wednesday confirmed that it green lighted three other fracking plans by the company DCOR LLC last year on an oil platform about nine miles offshore. While new oil leases have been prohibited since the 1980s, companies can still drill from about two dozen grandfathered-in platforms.
The California Coastal Commission, namely deputy director Allison Dettmer, while attending a recent meeting in Pismo Beach, indicated that while CCA sees “little evidence” for immediate concern over hydraulic fracturing practices in state waters — where there hasn’t been much use of these techniques, existing rules are already quite strict, and an ongoing effort is underway via SB 4 to tighten up regulations by 2015 — there is more that should be done related to the 23 rigs located in federal waters, which begin three miles from shore. Those rig operators have done a bit more experimentation with fracking and another well stimulation technique known as “acidization,” and they are allowed by federal law and often do dump their treated wastewater into the ocean. Citing legal, jurisdictional, and procedural hurdles, Dettmer recommended against the ban or moratorium on fracking that many environmentalists have called for in recent months, including the couple dozen anti-fracking speakers who took to the podium. But she said that, via the commission’s ability to consider and control federally permitted rigs via the Coastal Zone Management Act, there is the possibility of weighing in on fracking applications if they are deemed to go beyond what the commission had initially approved years ago. To do so, she is requesting that the feds notify the Coastal Commission when operators seek approval to do well stimulation, so that the commission can review for itself whether the process qualifies as requiring a supplemental approval from the state. To date, the federal Bureau of Safety and Environmental Enforcement, which process the drilling permits, has not considered these techniques as anything beyond the existing permit language. “That is why we didn’t know about them,” explained Dettmer, who is also asking the Environmental Protection Agency to include the Coastal Commission’s input whenever they renew each rigs wastewater discharge permit, if they do intend to dump their produced water into the ocean. “That would allow a case-by-case analysis of additional impacts,” Dettmer said. She additionally suggested that any special workshop on the practice wait until after the scientific study mandated by SB4 is completed later this year. For more information, please contact HBW Resources.
Three of Colorado’s biggest oil and gas companies and a national environmental group are maintaining their support of new, tighter regulations the state is proposing. The rules are meant to cut pollution from wells, pipelines and processing plants and improve air quality across the state. Representatives of Noble Energy Inc., Anadarko Petroleum Corp. and the Environmental Defense Fund, an advocacy group, held a media briefing to reiterate their support of the proposed air quality rules put forward by the Colorado Department of Public Health and Environment’s Air Pollution Control Division. The proposed rules are expected to cut emissions of volatile organic compounds, which cause ozone destruction, by about 93,500 tons per year. They’re also expected to reduce leaks of methane and ethane by about 65,000 tons per year, according to the state. “We support the air division’s proposed rules because it’s the right thing to do for the environment, for public health and our company — these are tough rules,” said Curtis Reuter, Noble’s manager of liquefied and compressed natural gas development, at the briefing. The proposed rules take aim at cutting pollution from all stages of oil and gas development statewide, from the well site, through the pipelines and compressor stations, to the processing plants. The proposals call for companies to actively check for leaks in their equipment, and to fix those leaks when they are found. It’s also the first in the nation to specifically name methane, an element of natural gas and a potent greenhouse gas, for regulation. Finding and plugging methane leaks in equipment, allowing that methane to be sold, would allow companies to recoup some of the cost of compliance.
Several advocacy groups have filed a motion to intervene in the Colorado Oil and Gas Association’s lawsuit against the city of Fort Collins for its voter-imposed fracking moratorium. Citizens for a Healthy Fort Collins, the Sierra Club and Earthworks announced that they filed the motion to join the lawsuit and defend the city. “It is important to us as an organization that the moratorium is upheld,” Kelly Giddens of Citizens for a Healthy Fort Collins stated in a press release. “This lawsuit, designed to overturn the moratorium, is a blatant attempt by COGA to bypass the will of the voters and possibly jeopardize public health, safety and property values in our community.” Last November, Fort Collins joined other municipalities in Colorado that have limited or banned hydraulic fracturing, or fracking. A five-year fracking moratorium within Fort Collins city limits was approved by 56 percent of voters. Like other municipalities that have implemented fracking bans or moratoriums, Fort Collins was promptly slapped with a lawsuit by COGA. The industry advocacy group contends that the Colorado Supreme Court has ruled that fracking cannot be banned, and as such, limits on the process in individual municipalities are illegal. Citizens for a Healthy Fort Collins, the Sierra Club and Earthworks are represented as a group by the University of Denver Environmental Law Clinic, which also represents Protect Our Loveland, the group advocating that a two-year fracking moratorium be placed on the ballot in Loveland. For more information, please contact us.
A number of Connecticut Environmental groups and legislators have begun to craft fracking waste legislation that may come before the legislature in the next couple weeks. Although Connecticut may never be the site of hydraulic fracturing because of its geological makeup, the production of natural gas through fracking still poses a problem for the state. Legislators are concerned Connecticut will become home to the fracking waste treatment and storage from other states. “Anything you do related to the production of energy has an environmental impact, so the key is to make certain that you’re minimizing that impact and that there are sound regulations to do that,” said Denis Schain, director of communications at the Department of Energy and Environmental Protection. According to Schain, a loophole in Connecticut’s current law could allow waste associated with fracking to come into Connecticut for disposal. The state law is based off a federal law, which does not classify materials associated with oil and gas extraction as hazardous waste. The new legislation is attempting to regulate these materials by requiring, for example, more record keeping and documentation of how the materials are handled from “cradle to grave,” Schain said. “The reason it is such an issue is because the waste from fracking is filled with chemicals and radioactivity,” said Nancy Alderman, the president of Environment and Human Health Inc. According to Alderman, companies who drill in nearby states such as Pennsylvania have not yet found a sustainable method of waste disposal and are currently resorting to techniques such as sending the polluted water to other states for reinjection into the ground. While the DEEP has proposed legislation to regulate fracking waste, other Connecticut legislators, like state Rep. Jonathan Steinberg (D, District 136) and Rep. Matthew Lesser (D, District 100) have also been working on bills of their own to propose to the legislature.
The Dan A. Hughes Co. of Beeville, Texas, has leased about 115,000 acres of mineral rights from Collier Resources, which owns 800,000-plus acres of mineral rights in southwest Florida, according to Matthew Schwartz, head of the South Florida Wildlands Association. That richness and vitality are threatened by the specter of fracking, which various oil companies are proposing to do right at the edge of the Florida Panther National Wildlife Refuge. According to the Broward Palm Beach New Times, Schwartz has analyzed the Florida Department of Environmental Protection permits issued to the companies and mapped out just what they plan to do, and where. What he found was that not only is drilling imminent at the edge of the panther refuge but also that the overarching lease held by Hughes includes “large portions of the Florida Panther Wildlife Refuge, Picayune Strand State Forest, Fakahatchee Strand Preserve State Park, Big Cypress National Preserve, Corkscrew Regional Ecosystem Watershed (CREW Lands), and even the famous Audubon Corkscrew Swamp Sanctuary, with some of the last old-growth cypress in our state,” the Broward Palm Beach New Times reported. “The lease runs for five years and can be extended.” Two more leases are in the works, one of them not yet permitted. It’s a four-phase lease with Burnett Oil Co. out of Fort Worth, Texas, according to Schwartz, that would cover, eventually, 234,510 acres within Big Cypress National Reserve, the Florida panther’s main habitat. For more information, please contact HBW Resources.
Companion bills that would ban fracking in Hawaii are getting the approvals needed to eventually become law, but not without some debate. HB 2359, introduced by Rep. Faye Hanohano (D, District 4), and SB 2940, spearheaded by Sen. Russell Ruderman (D, District 2), both prohibit hydraulic fracturing and the “collection, storage, treatment, or discharge of wastewater from hydraulic fracturing.” The measures also provide for penalties and enforcement. So far, Ruderman’s senate bill has gotten a positive recommendation from the Committee on Energy and Environment, of which he is Vice Chair, as well the Committee on Water and Land, where it managed to get the vote of WTL Chair Malama Solomon, who last session opposed many of Ruderman’s geothermal related measures. The House bill was discussed at a joint hearing by the House Committees on Energy & Environmental Protection and Water and Land. Both bills have gotten a flood of support, mostly from residents living in Puna who oppose the expansion of the geothermal industry in their backyard. There was some opposition, mostly from business interests connected to a new, hopeful geothermal project with its eye on developing the resource in Puna.
An Illinois state senator proposed a bill that would close a loophole that allows oil and gas produced by fracking operations to be taxed at a discounted rate. Introduced in the Illinois General Assembly by state Sen. Ira I. Silverstein (D, District 8), the bill, SB 3230, would remove a provision from the Illinois Hydraulic Fracturing Tax Act that allows the fuels to be taxed at just 3 percent after they are extracted from the ground.
An underground transmission pipeline carrying natural gas exploded in southern Kentucky, sending two people to the hospital, destroying two homes and alarming residents who saw flames from miles away. The explosion happened about 2 a.m. in a hillside about 100 feet off the road and left a crater 60 feet wide, Adair County Emergency Management Director Greg Thomas said. The 30-inch pipeline, which was about 20 feet underground, is owned by Columbia Gulf Transmission. The company said in a news release that gas flow to the damaged pipeline was stopped and trained crews have been sent to work with emergency responders to secure the scene. “We don’t yet know the cause but will be working with the appropriate authorities to conduct a thorough and complete investigation,” the release said.
An assessment commissioned by the Chesapeake Climate Action Network and Citizen Shale, two Maryland environmental groups, warns hydraulic fracturing in the state would pose a “high risk” to Maryland air and water. The assessment, “Shale Gas Risk Assessment for Maryland,” was conducted by Ricardo-AEA, the same United Kingdom-based independent environmental consulting firm that led the European Commission’s hydraulic fracturing risk assessment and regulatory review. The assessment found a cumulative risk grade of “high” or “very high” in nine of ten qualities if fracking were to occur in Maryland. The qualities included a high risk of surface water contamination, ground water contamination, noise impacts, visual impacts, increased traffic and threats to biodiversity. Additionally, the study notes fracking is estimated to use 3.88 million gallons of water per well, threatening Maryland water supplies from two sides. Fracking would also produce dangerous air emissions such as particulate matter, nitrogen oxides, carbon monoxide, volatile organic compounds and sulfur dioxide. The study also predicts a “very high risk” of undeveloped land being taken over for development, with up to 10 percent more land needed for full development of a gas reservoir than is currently described as developed in Maryland’s Allegheny and Garrett counties. For more information, please contact us.
The state’s pledge to contact township supervisors when companies apply to drill in their communities is among the latest efforts to quell hydraulic fracturing concerns across Michigan, Department of Environmental Quality officials said in Livingston County. The latest development follows the DEQ’s work with the Michigan Townships Association to notify local supervisors when oil and gas drilling permits are submitted, something currently not required under state law. The concern was raised locally when Conway Township officials questioned why they weren’t informed of a permit application for a large-scale drilling project that allows hydraulic fracturing. The DEQ has since compiled from the townships what one official jokingly referred to as a “double-top-secret contact list” for supervisors that will be used to notify them of permit applications. State law only requires county clerks to be notified when companies seek drilling permits.
The Committee to Ban Fracking in Michigan has postponed its drive for a ballot initiative to ban horizontal fracking in the state until the 2016 elections. Though there are four months left until the deadline to gather 258,088 signatures for the 2014 elections, focus at this point is on educational outreach and fundraising, said Luanne Kozma, campaign director for the committee. “We’re making it stronger, collecting money and building our campaign,” Kozma said. “We have made a lot of people aware in the past two years.” The committee has three goals: to ban fracking in Michigan, to ban frack waste storage in the state and to change the wording of the Natural Resources and Environmental Protection Act that promotes the “maximum production” of oil and gas in Michigan.
Sen. Jeff Van Drew (D, District 1) and Assemblyman Robert Andrzejczak (D, District 1) said they will begin investigating why the Pinelands Commission in January rejected the pipeline that would have carried gas to the B.L. England Generating Station on the Great Egg Harbor Bay that currently burns coal and oil. Van Drew said the only way to find a solution is to understand what went wrong with the application process. “I’m going to look at every aspect of this process and analyze how we can make it right. Make no mistake about it, we need to build this pipeline and I’m going to give it my level best to make it happen,” Van Drew said. The senator said he has already reached out to Gov. Chris Christie and Senate President Stephen Sweeney for help. The region suffers one of the worst unemployment rates in the nation, Van Drew said, and closing the plant would eliminate 60 jobs while at least 75 jobs related to construction of the 22-mile-long pipeline would never be created. He also said gas would burn cleaner than coal and be better for the environment.
A coalition representing thousands of upstate landowners have sued Gov. Andrew Cuomo in an attempt to force a decision on hydraulic fracturing for natural gas, the group announced. The lawsuit from the Binghamton-based Joint Landowners Coalition of New York accuses Cuomo of intentionally obstructing the state’s 5 1/2-year review of hydrofracking. The lawsuit asks a judge to force the state Department of Environmental Conservation to complete a voluminous review that will guide whether New York will allow gas drilling in the Marcellus Shale, which stretches across the Southern Tier. The legal challenge will be filed in state Supreme Court, the group said. It’s the second lawsuit filed against the Cuomo administration over the state’s de facto moratorium on high-volume fracking, which was first put in place in July 2008. “It is apparent to the world that Governor Cuomo is dragging out the (environmental review) process for his political purposes instead of focusing on his upstate New York constituents, many of whom struggle to survive in the worst economic conditions in our nation,” Dan Fitzsimmons, the group’s president, said in a statement. “We want to see our communities thrive through the blessing of this American energy revolution.” Cuomo is named as the lead defendant in the suit, along with DEC Commissioner Joe Martens and Health Commissioner Nirav Shah, who began his own review the DEC’s fracking work 16 months ago. The suit is being backed financially by the Mountain States Legal Fund, a Colorado-based non-profit that has been involved in dozens of conservative lawsuits regarding property rights. For more information, please contact HBW Resources.
The town of Chautauqua Town Council has voted against a moratorium on horizontal hydraulic fracturing. Following two full hours of listening to speakers discuss the proposed one-year fracking moratorium, the town board voted down the measure, with only Tom Carlson voting in favor of it. Those against the moratorium generally felt that any limit on drilling in the area could result in the loss of good jobs and diminished economic opportunity for land-holders and business interests.
A Whiting Petroleum oil well in North Dakota was leaking 50-70 barrels per day of drilling fluid on Friday after a well blowout on Thursday afternoon, the company said. The leak, which contained fluids used in fracking, was contained and was not flowing into any nearby waterways, a spokesman said.
The state’s revised oil-and-gas severance tax bill “creates a lot of problems,” one of the industry’s top lobbyists says. Ohio’s top two oil and gas industry groups are miffed at the changes introduced to HB 375. Tom Stewart, executive vice president of the Ohio Oil and Gas Association, and Chris Zeigler, executive director of API Ohio, formerly the Ohio Petroleum Council, both pointed out what they see as big problems with the bill. Together, both groups represent most of the drillers operating in the state – Stewart the independent drillers and Zeigler the big corporations. HB 375’s proposed severance tax on natural resources taken from horizontal wells has increased to 2.25 percent, up from 2 percent as originally proposed in the bill. The revised bill also does not exclude the industry from paying the state’s 0.26 percent commercial-activities tax, unlike the original version. And the bill shortens the initial tax rate of 1 percent that drillers would pay from five years to two. Horizontal wells tend to have very high initial production in the beginning years before tapering off.
Gulfport Energy Corp. agreed to acquire another 22,000 net acres in the Utica Shale in Eastern Ohio from Windsor Ohio LLC for about $220 million as the oil-and-natural-gas producer continues to boost its presence in the shale basin. Gulfport said the latest deal, which should close by the end of the month, will increase its working interest in the acreage to 93.8%. The company also said it plans to fund the transaction with a public offering of 7.75 million common shares.
Gates Mills Mayor Shawn Riley wants property owners to form a real estate trust to control the location of hydraulic fracturing sites if they are built in the village. The mayor said experts tell him horizontal drilling wells that facilitate fracking, a process used to extract natural gas, will be built in the Cleveland area in about 10-12 years, and he wants to begin preparing now. Horizontal wells require at least 200 acres and a fleet of trucks to operate. Fluids and chemicals are injected through the wells 8,000-10,000 feet into the ground at high pressure. Once the fluid reaches shale, it travels horizontally through the rock, releasing natural gas from the cracks. Riley wants homeowners to combine their properties into one pool, decide together where hydraulic fracturing wells will be located if they’re drilled in Gates Mills, and split the royalties. He calls the effort, which he worked on with Councilwomen Sandra Turner and Karen Schneider, the Utica/ Point Pleasant Deep Well Drilling Utilization Project. Gates Mills is home to 47 shallow wells used for fracking that are much smaller in size than the horizontal drilling operations. The wells were built starting in 2004 when state laws began to allow drilling in more densely populated areas. There is a meeting at 6 p.m. on March 8 in Gates Mills City Hall, 1470 Chagrin River Road, to discuss the project. For more information, please contact us.
Athens County election officials have asked for written legal opinions on whether an alteration made to an initiative petition would prevent the anti-fracking measure from being on the November ballot. Indications are, it would not. The Messenger reported earlier that the Athens Bill of Rights Committee wanted to put an anti-fracking measure on the May primary election ballot, but was told Ohio law requires initiative petitions to be on the general election ballot. However, the petition itself says it is for the May ballot, which prompted election officials to seek legal opinions from the Ohio Secretary of State’s Office and Athens County Prosecutor Keller Blackburn on whether that would be a fatal flaw to the petition being on the November ballot. Elections Director Debbie Quivey said both have given verbal opinions that it would not be a fatal flaw, but she said written opinions have been requested. Quivey said she expects the initiative petition to be discussed at the election board’s next meeting, which is Tuesday at 10 a.m. at the elections board office. The Athens Bill of Rights Committee has asked the board to make an exception and put it on the November ballot. Blackburn has said the elections board does not have the authority to do that, because Ohio law is clear that initiative petitions must be on the general election ballot.
Texas Eastern Transmission LP wants to build a 76-mile-long, $468 million pipeline extension to move natural gas from the Utica and Marcellus shales to the Gulf Coast. The Ohio Pipeline Energy Network or OPEN Project would run from Kensington in southern Columbiana County to an existing pipeline in Monroe County in eastern Ohio. It would run through Columbiana, Carroll, Jefferson, Belmont and Monroe counties in eastern Ohio. Chesapeake Energy, CONSOL Energy, Total Gas & Power North America and Rice Energy have pledged to transport 550,000 dekatherms a day, Texas Eastern said in a 337-page filing with the Federal Energy Regulatory Commission. A dekatherm is equal to 970 cubic feet of natural gas. The gas would go to the Texas Eastern hub at Egan in Louisiana. The new pipeline with bi-directional flow under the plan would mark a change in natural gas distribution in the United States. Traditionally, gas has flowed from the Gulf Coast and western North America to the eastern part of the nation. But as the Utica play in Ohio and the Marcellus play in Pennsylvania, West Virginia and Ohio continue producing natural gas, projections show Ohio and surrounding states could become net natural gas exporters. In addition to the 30-inch diameter pipeline, Texas Eastern would build a compressor station in Jefferson County and make adjustments to existing compressor centers in other states to allow bi-directional flow.
Magnum Hunter Resources Corporation announced that the Company’s first dry gas Utica Shale well, the Stalder #3UH located on the Stalder Pad (18 potential wells) in Monroe County, Ohio, was placed on production and has recently tested at a peak rate of 32.5 MMCF of natural gas per day on an adjustable rate choke with 4,300 psi FCP. The Stalder #3UH well was drilled and cased to a true vertical depth of 10,653 feet with a 5,050 foot horizontal lateral, and successfully fraced with 20 stages. Triad Hunter, LLC, a wholly-owned subsidiary of the Company, is the operator with a 47% working interest. Other non-operated partners include Eclipse Resources, Statoil and Northwood Energy Corporation. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter, commented, “Our first well on the Stalder Pad is the most eastern well and one of the most southern wells drilled to-date in the entire Utica Play of Ohio. The well’s production is almost pure methane (97%) and therefore there is no need for processing, making it pipeline quality product. The benefit of owning the majority interest of our midstream division is that this well went directly through our gathering system to sales earlier this week. Therefore, we did not require any third-party to build a pipeline to this location.”
State environmental officials and expert firefighters brought in by Chevron have been monitoring a burning Marcellus Shale natural gas well. The well, about 50 miles south of Pittsburgh in Dunkard Township, erupted into flames on Tuesday morning, injuring one worker and leaving one still unaccounted for. State Department of Environmental Protection spokesman Jon Poister said Wednesday night that the fire had partly extinguished itself due to moisture from inside the well. It will take time for multiple investigations to determine the cause. The company said there was no drilling or hydraulic fracturing taking place at the well pad at the time of the fire. Crews had been preparing to run steel tubing, which is used to hook wells up to pipeline networks and start production. The missing worker was employed by Houston-based Cameron International, spokeswoman Sharon Sloan said. Sloan said the company doesn’t know anything more about the cause of the fire or have details about the missing employee. Chevron stated on Sunday that the two wells were no longer burning as of 3pm Saturday.
Findlay is set to consider the plan for Marcellus Shale natural gas drilling around Pittsburgh International Airport. A public hearing will be held 7 p.m. Feb. 20 in the Findlay Township Activity Center, 310 Main St., Imperial. Hundreds of nearby property owners in Findlay and Moon have been notified of the hearing, township planning director Chris Caruso said. Consol Energy Inc., under a $500 million deal with Allegheny County, proposes to drill 47 gas wells, construct 17 miles of gas collection lines and install 12 miles of water lines on more than 9,000 acres. For more information, please contact HBW Resources.
Rice Energy has agreed to acquire gathering assets in eastern Washington and Green Counties, from M3 Appalachia Gathering for $110 million. The assets to be acquired consist of a 28-mile, 6″-16″ gathering system in eastern Washington County (northern system), and permits and rights of way in Washington and Greene Counties, necessary to construct an 18-mile, 30″ gathering system connecting the northern system to the Texas Eastern pipeline. The northern system is supported by long-term contracts with acreage dedications covering approximately 20,000 acres from third parties. Once fully constructed, the acquired systems are expected to have an aggregate capacity of over 1 Bcf/d. “The M3 Appalachia transaction represents a unique opportunity for Rice that is consistent with our strategic focus of proactively investing in our midstream to facilitate our upstream growth,” said Daniel J. Rice IV, CEO.
Money from natural gas fracking in the state’s Marcellus Shale formation has been earmarked to buy conservation easements and protect streams, wetlands and other environmental features in York County’s Codorus Creek watershed. County commissioners approved allocating the York County Farm & Natural Lands Trust $80,000 per year for the next three years, and the money will be used to buy easements on properties identified as conservation priorities along the south and east branches of the Codorus, said Sean Kenny, executive director of the trust. While there is no natural gas drilling in York County, all Pennsylvania counties get a share of impact fees paid from areas where there is. Under state rules, the money must be used for environmental and outdoor recreation causes, such as preservation and open space projects. For more information, please contact us.
The Community Environmental Legal Defense Fund is defending a Highland Township ban on injection well activity, even after a federal agency approved the very project the ban was created to prevent. The environmental law firm wants to represent the township in its ongoing battle against natural gas corporation Seneca Resources over a planned injection well near a municipal water supply in James City. Prior to the start of the Township Supervisor’s meeting, Ben Price of the Community Environmental Legal Defense Fund said the injection well project will not move forward given his firm’s legal defense of a local law banning the practice — even with the project obtaining U.S. Environmental Protection Agency (EPA) permitting earlier this month. Price referred to a 2013 ordinance adopted by the Highland Township Supervisors which banned injection wells in the township. The ordinance labels the underground injection method used in disposing of natural gas drilling wastewater a threat to health and public safety as it has been linked to earthquakes and groundwater pollution. The ordinance still stands and trumps even state law and EPA approval, according to Price, who said an EPA permit cannot be used to violate local law. “It says so right in the issuance of the permit,” Price said, adding, “it really doesn’t make much difference whether (the project) is approved, the community has a right to protect its rights. Supervisors take an oath to protect the community and the EPA doesn’t have the authority to nullify that oath of office or those obligations.” Seneca Resources Corp. has previously dismissed the Highland Township ordinance as a violation of state oil and gas legislation, and threatened litigation to invalidate it.
The Marcellus Shale Coalition is sponsoring a major rally of Pennsylvania shale advocates, the “United Shale Advocates Rally” is slated for May 6, 2014. Beginning at Harrisburg’s City Island and continuing on the steps of the State Capitol, this day of action in Harrisburg will bring together working families, local government and civic leaders, landowners, farmers and sportsmen, and other supporters of economic prosperity and energy across the Commonwealth.
Oil-and-gas industry jobs inside the Eagle Ford Shale are expected to expand by 53 percent from 2010 through the end of this year, according to Workforce Solutions Alamo data. By the end of 2014, the 30 counties in Workforce Solutions’ Eagle Ford County region will boast 15,702 oil-and-gas jobs, up from 10,281 in 2010. The South Texas energy play is among the most active in the nation. “That’s gigantic job growth,” agency spokeswoman Eva Esquivel says. Nationally, oil-and-gas jobs are expected to increase by just 10.5 percent over that period, according to Workforce Solutions. Those professions will rise at the rate of 27 percent statewide.
Fueled by the rapid expansion of the oil and gas industry, Texas exports reached their highest value in history in 2013, jumping 5.6 percent over the previous year, according to new federal data. Texas is by far the nation’s largest exporter, moving $279.7 billion in merchandise from its borders last year. Nearly 39 percent of that value came from exports of petroleum and coal products and chemicals, according to the Commerce Department data. The Houston-Baytown region — which recently topped New York City to become the leading region for international exports – was the origin for nearly 40 percent of the all Texas exports. Over the decade, the value of the state’s petroleum and coal product exports has soared from $4.7 billion to $60.9 billion. The growth has had a significant effect on the nation’s trade deficit. Last year, the United States reduced its crude oil imports by more than 9 percent to 2.8 billion barrels, the lowest volume since 1995.
NuStar Energy L.P. says it has completed a private marine loading dock at Corpus Christi’s North Beach Terminal, adding that the first ship has arrived there to be loaded with crude oil. NuStar originally scheduled the dock’s completion for the second quarter but expedited construction to meet strong demand for customers interested in transporting Eagle Ford crude oil by ship. “The addition of the new dock and the related upgrades to our systems are critical to our Eagle Ford Shale strategy as it gives our customers even more options to move Eagle Ford crude by water,” NuStar President and CEO Brad Barron said in a written statement. With the addition of the new facility, NuStar now has three loading docks in the Port of Corpus Christi. It can load crude onto ships simultaneously on all three docks.
Drilling and hydraulic fracturing in the Barnett Shale used about 55 billion gallons of water between 1981 and 2012, including about 8.5 billion gallons in 2011 or about four percent of all water used in the 15-county region, according to a new study by the Bureau of Economic Geology at the University of Texas at Austin. As huge a volume as that appears, lead researcher Jean-Philippe Nicot said it’s “not much in the grand scheme of the water cycle” in the 10,000-square-mile Barnett Shale region. While Nicot noted that water use for hydraulic fracturing can be a much bigger problem in drier areas with intensive energy development, such as West Texas’ Permian Basin, hydraulic fracturing accounted for about 0.5 percent of total water use in the state in 2011. The study also looked at disposal of wastewater from hydraulic fracturing by underground injection, and found that the amount injected is even more than the amount of water used. Nicot said the Barnett Shale is “an anomaly” among shale fields in that a high percentage of injected water flows back, accompanied by naturally occurring groundwater produced along with the oil or natural gas. Only about 5 percent of this flowback fluid has been recycled for reuse, the study estimates. For more information, please contact HBW Resources.
Occidental Petroleum Corp. announced its plans to move the company to Houston and spin off another business that will be based in California. It’s not yet clear how many jobs may be relocated to Houston as part of the shift. The existing company will have exploration and production operations in the Permian Basin and elsewhere in Texas, as well as the Middle East and Colombia. It also will include the firm’s midstream and marketing business, as well as its chemical subsidiary OxyChem. Gov. Rick Perry praised the move. “Occidental Petroleum is the largest oil producer in Texas and one of the largest in the nation, so it seems only fitting the company would locate its headquarters in Houston, the energy capital of the world,” he said in a statement. The strategy allows the existing company to double down on its Permian focus in a move that’s likely to be attractive to investors.
An oil and gas producer is suing the city of Dallas, which denied the company drilling rights to mineral interests it leased from the city. In a lawsuit filed in Dallas County District Court, Trinity East Energy says the city took the company’s property “without just compensation” by leasing it tracts of land — and pocketing millions in bonus payments — before refusing to issue zoning permits in a move that Trinity East calls “arbitrary and capricious.” “This is about a deal, plain and simple. We had a deal with the city of Dallas and they went back on it,” Stephen Fort, president of Trinity East Energy, said in a statement. “The city made promises to us and took our money. They sold us minerals but then denied us the ability to extract them.” Dallas leased some 3,600 acres of mineral interests to Trinity East in August of 2008, netting more than $19 million in bonus payments. The same day, according to the complaint, Dallas City Manager Mary Suhm signed a letter to Trinity East officials saying she was “reasonably confident” that the company would obtain the rights to drill on one particular tract of city parkland, and that city staff would “use its reasonable efforts” to place the matter before the City Council, which has the ultimate power to issue the permits. In the lawsuit, Trinity East said it invested more than $30 million planning the project and that its inability to drill on the land likely cost it hundreds of millions of dollars over the wells’ lifetime. The company is asking the court to rule that it has suffered “inverse condemnation or regulatory taking,” and that the city breached its leasing agreements and “committed fraud and/or negligent representation.” The lawsuit asks for damages “in excess of the minimal jurisdictional limits” of the court. In an interview, Fort said that amounts to hundreds of millions of dollars.
OriginOil Inc., a California-based company that focuses on water cleanup technology, is turning one of the primary challenges faced by the oil and gas industry during hydraulic fracturing – disposing of the water – into an opportunity to expand. So, they are doing just that. The company is opening a five-person satellite office in the Energy Corridor in Houston in the coming weeks. There is a ready market for the water-handling industry in Texas. The oil and gas sector is one of the largest water users of any industry, Approximately 3 to 5 million gallons of fresh water are used to frack a well, according to OriginOil, and about 35,000 wells are fracked in the United States each year, according to the U.S. Environmental Protection Agency (EPA). OriginOil’s Petro division will concentrate on cleaning up the water used in fracking by using its high-speed, low-energy, chemical-free technology. Using their technology, 98 percent of the hydrocarbons in disposal water are removed in one clean-up pass, according to licensee PACE Engineering. That will allow the water to be reused, rather than disposed of in underground storage facilities. For more information, please contact us.
The Texas Department of Transportation has launched a new campaign aimed at reducing accidents on roads in the Eagle Ford Shale region. TxDOT’s $1.2 million Be Safe. Drive Smart campaign encourages drivers to adopt safe habits when sharing the road with increased traffic, work crews and heavy commercial trucks. The new campaign — jointly promoted with the energy industry, local communities and the Texas Department of Public safety — includes billboards, gas pump ads, newspaper ads and TV and radio spots featuring Eagle Ford residents. “We want to educate motorists to help them be more aware of the special challenges they might face when traveling through high-traffic energy production areas,” TxDOT spokeswoman Becky Ozuna said in an email interview. “Many may not be used to sharing the road with so many vehicles and large trucks. We are urging them to buckle up, stop for all stop signs and red lights, drive at a safe speed, give trucks space on our roadways, pass carefully and give driving their full attention.”
Companies developing multibillion-dollar Gulf Coast plants to export inexpensive domestic natural gas or make things with it are encountering a harsh reality: There aren’t enough skilled hands to do all that building. “It causes a big concern about what’s going to actually happen when it comes to fulfilling these jobs,” says Michael Bergen, executive vice president of Industrial Info Resources, a Sugar Land-based market research firm. It projects that companies ?will invest more than $64 billion to build at least seven liquefied natural gas facilities along the Gulf Coast in the coming years. And if demand for labor drives up wages and related labor costs, Bergen said, some projects might be canceled or delayed. Announced projects include liquefied natural gas export terminals under development by Sempra Energy, Cheniere Energy and Freeport LNG. Such facilities chill natural gas into a liquid so it can be transported by tanker to foreign markets where it commands higher prices than in the United States. A surge in U.S. natural gas production, spurred by advances in drilling and well completion, also is driving construction of petrochemical plants, which use gas as fuel and raw material. Chevron Phillips Chemical Co. soon will start work on $5 billion in upgrades at its Cedar Bayou plant in Baytown, including an ethane cracker to produce a plastics building block derived from natural gas. Exxon Mobil Corp. is expanding its Baytown complex, too — and last year announced a half-million-dollar commitment to coordinate training programs at nine area community colleges and other institutions. Dow Chemical Co. plans a $4 billion upgrade of its plant in Freeport. Industrial Info Resources forecasts that the number of skilled construction workers in the Gulf Coast region will grow from around 62,000 today to more than 103,000 by 2016, driven by the surge in those industrial projects. That figure only includes workers in 13 specific crafts — in particular, pipe fitters, welders, electricians and instrument technicians. It doesn’t include apprentices and general laborers; with them, the numbers are even higher.
West Virginia Governor Earl Ray Tomblin and his Department of Environmental Protection Secretary Randy Huffman, are actively pushing legislation that would allow fracking companies to dump their radioactive drilling wastes into solid waste landfills around the state. The legislation, HB 4411, introduced by Rep. Rupert Phillips (D, District 24), would allow the disposal of drill cuttings and associated drilling waste generated from well sites in commercial solid waste facilities, passed the House Energy Committee and was referred to the Judiciary Committee. For more information, please contact HBW Resources.
In drilling for gas and oil, one of the biggest problems is water. Companies using fracking methods to extract gas and oil from previously unreachable rock formations must have the right quality of water to inject at high pressures into their wells, and they need to figure out what to do with the contaminated water that results. Formed in 2006 around University of Wisconsin-Madison technology, AquaMost was named one of 13 “frac water” firms to watch in the March issue of Global Water Intelligence, an industry publication. The company was named an “Energy Innovation Pioneer” and will present in Houston next month at CERA Week, one of the biggest energy industry trade shows. With patents issued and pending on its technology, AquaMost raised $1.31 million from outside investors in January, bringing the total amount raised since 2010 to $7.4 million. AquaMost has been doing paid pilot projects and rentals since 2012, and in fall shipped the first production version of its flagship product, the SX Reactor, said Todd Asmuth, chief executive officer. The company has master service agreements with three Fortune 500 energy and production companies and a strong order backlog coming into 2014, Asmuth said. AquaMost expects to “accelerate customer orders and rollouts” since appointing Extra Energy Solutions, Fort Worth, Texas, as its exclusive, independent sales rep in the U.S., he added. The SX Reactor can be used to treat water that will be used for drilling, or as part of the process of treating the water that returns to the surface with oil or gas after drilling. It uses ultraviolet light and light-activated catalysts to eliminate bacteria in the water that can make a well go sour. AquaMost’s technology “seems to be a compelling” substitute for chemicals that are used to pretreat water that will be used for fracking, he said. It’s also cheaper than chemicals, does the job better and could have uses beyond fracking, Asmuth said.
For additional information, please contact Bo Ollison with HBW Resources. His contact information is below.