Posts Tagged ‘gas’
EOG Well in Pennsylvania Had ‘Blowout,’ State Says
June 4 (Bloomberg) — A Pennsylvania natural-gas well operated by EOG Resources Inc. had a “blowout” last night, sending natural gas and drilling fluids onto the ground and 75 feet (23 meters) into the air, the state’s Department of Environmental Protection said.
EOG said in a separate statement the well had a “control issue” at about 8 p.m. New York time yesterday and was secured by 12:15 p.m. today. No injuries were reported, the company said.
A “blowout,” the industry’s term for a surge of pressurized oil or gas that causes an eruption at a well, is what caused an explosion and fire at BP Plc’s Macondo well in the Gulf of Mexico April 20, resulting in the biggest oil spill in U.S. history.
Environmentalists were quick to compare the two blowouts and call for tighter regulation of the growing use of hydraulic fracturing to extract gas from shale formations. Drillers using the process inject a mixture of water, sand and chemicals at high pressure to crack open shale and unlock gas deposits.
“We see a lot of parallels,” said Amy Mall, senior policy analyst with the Natural Resources Defense Council, a New York- based advocacy group. “This is a very complex process with a lot of risks and involves a lot of complicated technology. The strongest standards need to be in place.”
There is a need for federal regulation of drilling in shale formations so there is a “minimum standard”, Mall said. Pennsylvania is in the processing of revising its rules on fracturing, “but not every state is,” Mall said.
Regulation to Rise?
ClearView Energy Partners LLC, a Washington-based policy analysis firm, said it expects members of Congress who are critical of hydraulic fracturing to use the EOG accident as grounds for greater regulation.
“Odds for explicit regulation have now increased,” Kevin Book, managing director at ClearView Energy wrote today in a research note.
The well is located in the Marcellus Shale gas formation in Clearfield County, about 11 miles from Penfield, Pennsylvania, EOG said. Buffalo, New York-based National Fuel Gas Co. said today one of its subsidiaries is an equal partner with EOG in the well.
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“Haynesville” is showcased at Stranger than Fiction at New York’s IFC Center, June 1, 8pm
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http://stfdocs.com/films/haynesville/
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A Natural Choice – Washington Post – Editorial
IN AMERICA’S climate debate, one of the most promising developments of recent months has been the growing recognition in Washington that natural gas may play a key role in curbing carbon emissions. The resurgence of gas comes through the discovery of massive deposits in Appalachian shale formations and elsewhere — a reserve that offers the prospect of stable domestic supplies and relatively low prices. Since burning natural gas produces half the emissions of burning coal, switching the two fuels could put a significant dent in America’s carbon footprint.
The rumor this month was that such arguments had swayed the White House and that President Obama would back policy aimed at discouraging coal and encouraging natural gas at a speech he delivered to the Business Roundtable on Wednesday. The rumors didn’t bear out. That’s too bad. With climate-change legislation still stalled in Congress, nudging gas forward is something that the government can do quickly and relatively cheaply to meet its medium-term emissions goals if current trends persist.
To be sure, America doesn’t want to depend too much on one commodity. Drastically ramping up the amount of natural gas burned to generate electricity would require infrastructure investments in certain regions as well as retrofits of certain plants or the construction of entirely new ones.
But existing gas-fired plants are running at only about 25 percent capacity, in part because many are switched on only when demand spikes. The Congressional Research Service reports that doubling the use of existing plants could replace about a third of coal-fired power, getting America a third of the way to its goal for 2020. For reasons of infrastructure, that might be too optimistic a scenario. But BP — which has a stake in natural gas — estimates that retiring the 80 dirtiest coal plants and replacing them with gas-fired power would get America 10 percent of the way to its 2020 emissions target and increase domestic gas consumption by only 5 percent.
Even if you don’t trust BP’s numbers, a range of attractive policy options is available, starting with tax incentives to decommission old coal plants. Natural gas is so competitive, it might not take much more than that. However, policymakers might also consider coupling that with some carrot to switch to gas. States that demand that utilities derive a certain portion of their electricity from clean sources could also allow natural gas to count in such requirements, discounting for the carbon emissions it does produce. Federal legislators contemplating a similar, national standard might also consider this.
In the long term, natural gas is only a bridge fuel as America weans itself off carbon, since it still produces plenty of emissions. With a rising carbon price, natural gas will become too expensive to burn. But it can provide the country some time to bring to market the cleaner technologies on which America eventually must run.
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Obama Pushes Energy Plan That GOP May Support – AP
WASHINGTON (AP) — Looking for a political and policy victory, President Barack Obama on Wednesday pushed energy proposals designed to attract allies and opponents alike, calling for increased ethanol production and new technology to limit pollution from the use of coal.
Facing a Senate with a newly energized Republican minority, Obama has begun tailoring his energy policy to GOP-supported ideas, starting in his State of the Union address last week with calls for offshore oil drilling opposed by environmentalists and a bigger role for nuclear power.
The first-term president — politically weakened by the loss of the late Sen. Edward M. Kennedy’s seat to Massachusetts Republican Scott Brown — also has begun promoting his energy policy as a job-creating boost to the economy.
”Now, there’s no reason that we shouldn’t be able to work together in a bipartisan way to get this done,” Obama said during a bipartisan meeting with governors in the White House’s State Dining Room. ”It’s good for our national security and reducing our dependence on foreign oil. It’s good for our economy, because it will produce jobs.”
He spoke as the White House released presidential task force recommendations calling on both Washington and the private sector to spend more money on biofuels like ethanol. The group said the nation likely will fall short of goals Congress has set for creating more environmentally friendly energy.
At the same time, the Environmental Protection Agency issued a new rule requiring U.S. companies to produce at least 13 billion gallons of renewable fuels this year, up from about 11.1 billion gallons in 2009. Thirteen billion gallons is about 9 percent of overall U.S. fuel consumption. Congress has set a goal of 36 billion gallons of renewable fuel by 2022.
EPA Administrator Lisa Jackson said the new rules would reduce oil dependence by million of barrels a year and ”help bring new economic opportunity to millions of Americans, particularly in rural America.”
In his meeting with the governors, Obama also announced a new task force to study ways to increase the use of coal in meeting the nation’s energy needs without increasing the pollution that contributes to global warming.
”It’s been said that the United States is the Saudi Arabia of coal, and that’s because … it’s one of our most abundant energy resources,” Obama said. ”If we can develop the technology to capture the carbon pollution released by coal, it can create jobs and provide energy well into the future.”
Washington Gov. Christine Gregoire said the president told coal-state governors he understood their resistance to change when coal suppliers in their states are making money. She said Obama urged them to be partners in developing clean coal alternatives, a proposal that was embraced by many Republicans in the room.
”There was consensus around, let’s see if we can develop a clean coal strategy of the future,” she said.
The White House meeting comes a day after Obama signaled a willingness to separate a controversial cap-and-trade proposal aimed at limiting carbon pollution from more attractive green energy jobs and energy efficiency proposals. The House approved the anti-pollution measure last year as part of a comprehensive energy bill, but it is unlikely to win Republican support on Capitol Hill.
Energy has been a major part of the president’s domestic agenda since he took office, but it has taken on new urgency in the wake of Brown’s victory in Massachusetts as both the president and his Democratic allies on Congress look ahead to the fall elections.
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Associated Press Writer Julie Pace contributed to this report.
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Obama Eyes Biofuels, Clean Coal In New Climate Push
WASHINGTON (Reuters) – President Barack Obama laid out new steps on Wednesday to nudge the United States toward energy independence, backing measures to boost production of biofuels and bury pollution from coal.
Using the new initiatives to garner support for a climate and energy bill stalled in the U.S. Senate, Obama met with a handful of state governors to press his policies to fight global warming and wean the nation from imported fossil fuels.
“America can win the race to build a clean energy economy, but we’re going to have to overcome the weight of our own politics,” he said at the meeting, noting China was pushing aggressively to lead in “clean” energy technology.
“We have to focus not so much on those narrow areas where we disagree, but on the broad areas where we agree,” he said.
Agreement on a climate bill is still far from certain, and the legislation faces further obstacles after the election last month in Massachusetts that gave Republicans a Senate seat long held by Democrats, depriving the president’s party of 60 votes that could overcome procedural hurdles.
Obama has acknowledged that a controversial “cap and trade” system could be separated from other parts of the bill, though he is adamant that a market-based mechanism be put in place to make high polluting fuels more expensive for industry than less-polluting, renewable energy sources.
Biofuels represent one renewable energy source the administration wants to promote, and a new interagency report spelled out ways the country would achieve that going forward.
“By 2022, we will more than double the amount of biofuels we produce to 36 billion gallons, which will decrease our dependence on foreign oil by hundreds of millions of barrels per year,” Obama said.
He also announced a new task force to forge a plan for rolling out affordable carbon capture and storage technology in 10 years, including having 10 commercial demonstration projects up and running by 2016.
Carbon capture and storage is meant to capture the emissions from carbon-polluting coal plants and bury them underground rather than spewing them into the atmosphere but the technology is still being researched.
EPA
The Environmental Protection Agency said on Wednesday ethanol and other renewable fuels must account for 8.25 percent of gasoline sales in 2010 to meet Congress’ mandate that nearly 13 billion gallons of renewable fuels be produced this year.
That is lower than last year’s 10.21 percent renewable fuel standard that the EPA announced in November 2008..
The United States is far away from its goal of producing 36 billion gallons (136 billion liters) of biofuels a year by 2022, currently producing 12 billion gallons annually, mostly from corn ethanol.
The report offers solutions that would ease the way for ethanol to get from producers in the U.S. Midwest to consumers near the coasts. Such snags include filling stations that have been slow to adopt pumps to distribute a fuel blend that is mostly ethanol, called E85, and a lack of dedicated pipelines for biofuels.
Loan guarantees for ethanol plants could be targeted more effectively to support new biofuels plants, the report said.
The struggling biofuels industry is concerned the Obama administration will move too quickly away from ethanol to biofuels that derive from more difficult techniques using wood chips and other biomass.
The president’s backing of ethanol, however, could shore up his support in farm states, where ethanol boosts demand for corn.
Environmentalists and some scientists say production of U.S. biofuels from corn and other grains can drive out production of other crops, prompting farmers in other countries to burn down forests and clear land to grow those crops — creating new sources of CO2, the main greenhouse gas blamed for global warming.
(Additional reporting by Tom Doggett; Editing by Cynthia Osterman)
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Louisiana’s shale gas bonanza – Financial Times
After their father died 15 years ago, Mike Smith’s six siblings wanted nothing to do with the tract of land the old man had gradually acquired from his income as a pipeline welder. The land, 365 acres of it, lay in a quiet and sparsely populated corner of Louisiana: nothing but pine trees for miles around. In a county so poor that about a fifth of the population lives below the poverty line, the bequest wasn’t good for much.
But for Smith, a tall, slim man of 61 with a kindly face, DeSoto parish was home. “That’s where my roots are. I wanted the land,” he says. Smith paid $300 an acre – $109,500 in total – to his siblings. And while he kept his home in Shreveport, 40 miles to the north, he travelled down to DeSoto regularly to walk his acres, or hunt squirrel and deer. His plan was to sell the trees for lumber one day, and use the income to fund his retirement. Until then, he would pass the years frugally, making a living as a property valuer and sharing his 50-year-old house with two dogs and a cat.
All the while, the county seat of Mansfield, home to 5,500 people, withered. With only coal and timber to support it, the parish could not even repair its roads. Across from the courthouse are telltale signs of the desperation that began to claw at the area – the dusty, vacant windows of the hardware shop and cinema, and beyond them the Community Bank of Louisiana. It opened its doors in 1901 but is now so run down that the visitor struggles to make out what colour the wallpaper would once have been. The phones are from another age and an old standard lamp in an upstairs office blinks fitfully into life and then goes dark again.
“When I came in, the town was dead. There was no sign of economic growth here,” remembers Curtis McCoy, mayor for the past seven years.
All that changed in 2008, when oil and gas companies began knocking on doors, offering locals a couple of hundred dollars an acre if they would lease their land for prospecting. Some, like Jim May, executive director of the DeSoto Chamber of Commerce, jumped at the offer and signed a three-year lease on his 100 acres for a total of $25,000. Nobody had shown any interest in the land in decades, he reasoned. Six months later, the goldrush was at its height and prices leapt to $25,000 or even $30,000 an acre. “I lost $2.5m,” says May with a wistful smile.
People went to bed one night and woke up the next morning to find themselves rich,” says McCoy. That included Mike Smith, whose land was so sought after that in May 2008, PetroHawk Energy, a small, independent oil and gas company, handed him a $1.4m signing bonus in return for permission to drill for natural gas on his late father’s property. “It changed my whole life,” he says. “I don’t have to cut my trees any more.”
Smith is sitting behind the wheel of a new gold Cadillac, parked outside this year’s Haynesville Shale Expo in Shreveport, an event that has attracted 5,000 people, most of them landowners who missed the leasing frenzy and are eager to see whether they still have time to cash in. It was Smith’s dream since he was a boy to own a new Cadillac, like the one his father always made sure his mother drove. He paid $52,000 cash for the car. “That was the first investment. It kind of hurt a little bit,” he smiles. A small wooden cross dangles from the rearview mirror.
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The prize that drew companies such as PetroHawk to Smith’s impoverished corner of Louisiana is known as shale gas. Smith’s acres sit on top of the Haynesville Shale, named after the town near which the prospect was discovered – a seam of black rock between 150 and 300ft thick that lies hundreds of feet underground and extends across 3,400 square miles of Louisiana and Texas. Trapped inside this rock are vast quantities of natural gas – estimated at between 112 and 245 trillion cu ft. At the upper end of this range, Haynesville gas could meet the US’s energy needs for about 12 years.
This isn’t the most extensive prospect of its kind in the US; that distinction belongs to the Marcellus Shale in Pennsylvania and neighbouring states, which is reckoned to cover 65,000 square miles, an area larger than Greece. But based on the wells drilled so far, the Haynesville may well turn out to be one of the most productive. “It was the Haynesville that turned the tide on how big shale could be for US supply,” says Jeff Fisher, senior vice-president of production at another US company, Chesapeake Energy.
Indeed, the impact is expected to extend well beyond America’s borders. Industry consultants at PFC Energy in Washington, DC, believe that developing supplies trapped in shale deposits could more than quadruple the world’s known gas reserves. “This is a transformational event,” says its chairman, Robin West. His consultancy puts global reserves of natural gas from “unconventional” sources such as shale beds at 3,250 trillion cu ft, a total based on 1997 geological estimates that he believes will rise as the techniques available to extract the gas improve. By comparison, global reserves of natural gas from “conventional” sources total 620 trillion cu ft. Not all of these shale reserves will ever be tapped, but the technology to do so is available and, for the first time, companies are putting it to use.
To extract gas from shale involves drilling down, sometimes thousands of feet, and then sideways as much as 4,500ft. Once a well has been drilled, water with fine grains of sand is pumped through at high pressure; this fractures the shale and leaves behind the grains of sand, which prop open the fissures in the rock and allow the gas to escape.
Using this technique, Devon Energy, an Oklahoma-based oil and gas independent, sank a well last autumn in the Texas portion of the Haynesville shale (until then thought to be a low point in the “play”) that produced a flow rate of more than 30 million cu ft of gas per day, the highest ever from that area. This result led others to redraw the borders of the gas field, suggesting it was even more extensive than originally believed. “No one, us included, knows how that play is going to evolve,” says Larry Nichols, Devon’s chief executive. “We did not anticipate it would grow this much. Now we realise there are more opportunities for onshore growth than we ever thought would be possible.”
This realisation marks a volte-face for America’s oil and gas companies. By the 1970s, the majors had decided that onshore reserves of oil and gas in the US had been tapped, so they sold much of their acreage in order to focus on offshore and international exploration. This left the independent explorers, which drill 90 per cent of onshore wells in the US, to pursue what was left. “For years we have known that the United States holds vast quantities of so-called tight gas or shale gas – natural gas locked in formations denser than concrete,” Rex Tillerson, ExxonMobil’s chief executive, said in October. “But we did not have the technology to extract this so-called tight gas in a cost-effective way. Until now.”
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