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Energy In Depth Morning News 10-19-12


EID weighs in on EPA Phase V results. Pinedale Roundup. Other advocacy groups, like Energy In Depth, conducted their own analysis of the data and disagreed with the EPA’s findings of “consistency.” “But for those willing to look closely enough at the USGS report, it’s hard to see how the EPA can claim the two reports are ‘generally consistent.’ Actually, that statement is highly misleading, because there are glaring inconsistencies between what the EPA and USGS found. So far, Energy In Depth has identified more than 50 individual measurements from the EPA’s draft Pavillion report that have been discredited by the USGS.”

API: EPA Pavilion Analysis Not Scientific, Sound. Rigzone. Simon Lomax, research director of Energy in Depth, a research, education and public outreach campaign launched by the Independent Petroleum Association of America, noted that the use of carbon steel goes against EPA's own handbook of suggested practices for the design and installation of groundwater wells. NOTE: Houston Chronicle, Oil and Gas Journal, Bloomberg, Platts, Law 360 and others report.

Momentum builds to carve oil’s tax incentives. Politico. (sub req’d). The Independent Petroleum Association of America reckons that canceling the drilling deduction would cut the industry’s spending on new drilling by about 25 percent, assuming that the corporate tax rate is at the current 35 percent.  That cut would come to more than $30 billion in spending on oil and gas wells, based on the nearly $126 billion that analysts at Barclays estimated in May the industry would spend in the U.S. this year. Eliminating that deduction “shifts the policy, which means the investment is not as good, so the capital goes somewhere else,” said IPAA tax policy expert Lee Fuller.

Ohio's Utica Shale Gets Star Treatment from CNBC, NBC News. NGI's Shale Daily (sub req’d). CNBC and NBC News on Thursday used cross-network programming to train their cameras on the resurgence in Ohio, once the heart of the U.S. steel industry, which has been reborn in part from the growth in the auto industry, as well as drilling operations in the Utica Shale. NOTE: Check out CNBC’s coverage HERE.

Gazprom Eclipsed as Rosneft Tightens Grip in Russia. Wall Street Journal. The once-mighty Gazprom has been brought down a peg or two by the North American shale gas boom and the decline in European energy demand due to the economic crisis.

Shale boom derails US investments in clean coal technology. Reuters. Undercut by competition from cheap and cleaner-burning natural gas, analysts believe the expensive technology needed to make "clean coal" plants is unlikely to become commercialized in the United States without heavy government subsidies.

While Utica Shale's early birds celebrate, others wait. E&E News (sub req’d). "This is just the beginning." But moving the Utica's production -- in particular, the valuable natural gas liquids -- into markets has hit a bottleneck with gas prices stubbornly low. In June, 24 horizontal wells were drilled. In September, the number had dropped to three.

Marcellus Gas Wells Likely Harming Public Health: Survey. Bloomberg. The study results are questionable because of the participants chosen for the survey may have come in with a bias against drilling, according to Steve Forde, a spokesman for the Pittsburgh-based Marcellus Shale Coalition, an industry group. "By the ‘researchers’ own admission, their so-called methodology clearly demonstrates that this is not a work of objective scientific research, given that they relied completely upon ‘existing contacts’ and others who attended their anti-natural gas ‘public events’ for their survey," Forde said in an e-mail. NOTE: E&E News (sub req’d) also reports.


U.K. shale gas will not jeopardize carbon reduction goals. E&E News (sub req’d). "You can develop shale and you can still achieve your carbon targets. The one caveat to that is that if the government chose to change its renewables support mechanisms, that would mean the targets are not achievable," said Richard Sarsfield-Hall, a consultant at Poyry, which released a report on the impact of shale gas on Britain's climate targets.                                                    

Polish Shale Chatter: Oil Majors Dig In. Wall Street Journal. Two oil majors with shale gas concessions in Poland—ConocoPhillips and Chevron--are taking actions which industry watchers are interpreting as a commitment to the sector in the central European country, in sharp contrast to ExxonMobil, which has pulled the plug on its Poland shale plans earlier this year

European Shale Gas Threatens Russian Energy Position. Atlantic Sentinel. If the shale gas revolution reaches Europe, it would pose an immediate threat to Russian energy politics. The country currently supplies some 25 percent of the continent’s gas needs and its share in the imports of former Soviet satellite states in Eastern Europe is much higher.

Global shale market gets a new Latin American entrant. E&E News (sub req’d). Colombia named a unit of Texas-based Exxon Mobil Corp. and state-controlled Ecopetrol SA the winners of the country's first auction to draw investment in oil and gas derived from shale rock formations. Colombia has yet to produce any unconventionally sourced fuels, but it plans to increase such reserves to 1 billion barrels over the next 20 years.

China Unlikely to Replicate US Shale Gas Boom. Rigzone. China is unlikely to replicate the shale gas boom of the United States in speed or scale, but low drilling costs and high local gas prices make it attractive to drill for unconventional gas reserves, says the top executive at one of the few foreign companies drilling for gas in China.

Santos starts commercial shale gas production. ABC News. The company said the well was flowing gas from the Roseneath, Epsilon and Murteree shale targets. Santos executive James Baulderstone said the Moomba production was another important step in the company's Cooper Basin unconventional gas program, which started eight years ago.  NOTE: Platts also reports.

Natural gas industry 'still hurting' despite price bounce. Financial Post. Canadian natural gas prices have more than doubled to $3 per million British thermal units since they hit a decade low of $1.43 in April, but nobody is in a mad rush to open the taps just yet. Impressive as these gains seem, a recovery that would truly lift the industry’s fortunes remains distant.


Hydrualic fracturing in California. Desert Sun. Even as California pushes to meet its goal of producing 33 percent of its power from renewable sources, the state also  has about 459 drilling sites where fracking is being used.


Colo. delays some adoption of new federal oil and gas rules, rankling enviros. E&E News (sub req’d). At issue is the Colorado Air Quality Control Commission's decision yesterday to delay fully implementing the New Source Performance Standards (NSPS), finalized by EPA in April, that would require operators to limit toxic and smog-forming emissions during hydraulic fracturing.


Frac sand mine takes Houston County to courts. Winona Daily News. A Houston County mining company and two mine owners are asking a Wabasha County judge to allow them to continue mining and processing sand in Houston County, after the county ordered them to stop because of the county’s ongoing moratorium.


Cawley touts opportunities of natural gas drilling. Courier Times. We all need to know about it. It is critical to the success of Pennsylvania and to the success of the nation,” he said. “The opportunities are there and they are abounding.”

Pennsylvania DEP to help fleet operators convert to natural gas. Philadelphia Inquirer. The Pennsylvania Department of Environmental Protection will hold a seminar Wednesday in Valley Forge to provide information to municipal and commercial fleet operators about converting their vehicles to compressed natural gas and liquefied natural gas.

Pa. Senate approves use of AMD for hydrualic fracturing. Gas Business Briefing (sub req’d). The Pennsylvania Senate unanimously approved legislation this week that would encourage the use of wastewater from mining operations for Marcellus Shale.

EC Chamber to host seminar series on Marcellus shale. Ellwood City Ledger. When Ellwood City Area Chamber of Commerce’s legislative committee brainstormed on topics for a series of Marcellus shale-related seminars, they deliberately left off one of the most high-profile issues, and with some justifications.

Pa. could withold South Fayette's impact fee revenue. Pittsburgh Post Gazette. In its first official ruling since gaining new powers under the state's 6-month-old Marcellus Shale law, the Public Utility Commission on Thursday told South Fayette to revise its drilling ordinance or it will miss out on this year's impact fee dollars.

EPA adds $84500 fine for Washington County well fire. Pittsburgh Post Gazette. In a move that may be a first for the state during the Marcellus Shale era, the U.S. EPA on Thursday announced it had fined Atlas Resources LLC $84,500 for a 2010 well fire in Washington County -- the same well fire the state had already fined Atlas $80,000 for last year.


Chesapeake's CEO Reveals Next Big Bet. CNBC. Chesapeake is the largest stakeholder in the Utica shale, with the company and its CEO Aubrey McClendon betting the proverbial farm that nat gas is about to become the nation’s preferred source of energy.

CNBC's Jim Cramer in Canton visits Timken Co. Massillon Independent. “I’m convinced the renaissance is real and it’s going on at Timken Co.,” he told The Repository during an interview at the plant where the company is making at $260 million investment to boost steel making capacity.

Ohio's Utica Shale formation, rich in oil and natural gas. WKYC-TV. Ohio sits atop the Utica Shale formation, which is rich in oil and natural gas. Once out of reach, new technology allows drills to reach shale 10,000 feet underground.

Shale energy education workshop set for Nov. 10. Newark Advocate. “Shale and You: A Workshop for Landowners and Communities” will be from 1-6 p.m. Nov. 10 at at the Pritchard Laughlin Civic Center, 7033 Glenn Highway, Cambridge.

Columbiana County Plant Brings Jobs to Area. WKBN News. “Until the bidding process is complete we won’t know these numbers,” Taylor said. “Welders, fitters, all the skilled trades, that’s going to take some time and we’ll have those numbers, but the numbers do look real good for us.”

Hydrualic fracturing addressed at meeting in Leroy Township. News-Herald. Residents had to chance to ask experts questions about the shale oil industry and the controversial practice of hydraulic fracturing, or fracking, at an informational meeting Thursday evening at the Leroy Township Community Center.

City mulls hydraulic fracturing to raise money. MSNBC. Critics say that “fracking” – pumping water and chemicals into the ground to release oil and gas –  is a risky business that can cause water contamination. But cash-strapped cities like Youngstown, Ohio, are contemplating selling mineral rights to allow energy companies to drill and frack. NBC’s Phil LeBeau reports. NOTE: Columbus Dispatch also reports.


Professor offers salt solution to fracturing problem. Houston Chronicle/Fuel Fix. “We start with fresh water and then we make it saltwater,” said Stephen A. Holditch, director of the energy institute at Texas A&M University, referring to current practices. “Why the hell not start with saltwater?”

Houston energy companies may benefit from Poland tax reform. Houston Business Journal. At this point, several Houston-based oil and gas companies have already invested in Polish shale acreage. But now, the Polish government is looking to sweeten the pot.

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