Tokyo Gas to buy 25% of Quicksilver shale-gas site – “TOKYO--Tokyo Gas Co. said Friday it has signed a contract to buy a 25% stake in a shale gas development project in the Barnett area in the U.S. state of Texas from Quicksilver Resources Inc. KWK -1.75% for $485 million. The acquisition is latest by Japan's largest gas utility by sales volume, which has been increasing its investment in upstream gas assets.” (Market Watch)

Effects of America's shale revolution reverberate around the world – “When the boss of one of America's largest corporations comments that the world is undergoing a "shale gas revolution", it is clearly something to take seriously. General Electric chief Jeff Immelt's recent tweet after attending a conference on this rapidly growing form of energy production highlighted its future importance. US broker Citi, meanwhile, goes further and cites the revolution in shale as driver behind a general decline in global oil demand - as the black stuff is substituted by gas. In a detailed research note the Wall Street broker argues demand for oil is now reaching a "tipping point" and oil demand may be "topping out" much sooner than the market expects. "The structural bull market [in oil] of the previous decade was a result of surging global oil demand and consistently disappointing non-OPEC supply growth, compounded by a collapse in Iraqi and Venezuelan production. The outlook for each of these factors has now reversed."… The shift from oil to gas is already underway and well documented in the US, notes Citi analyst Seth Kleinman. But politics, greater availability of natural gas and environmental concerns over oil mean this trend is rapidly gaining ground globally. The point was hammered home this week as it became ever clearer that the US was moving from energy importer to exporter - all thanks to shale - as Centrica announced a huge deal. The British utility giant has inked a 20 year agreement that will see liquefied natural gas (LNG) exported to UK shores from Louisiana. Indeed, Kleinman points out that the prevalence of gas is set to continue with LNG already challenging the use of diesel for heavy duty trucks globally, especially in China. And compressed natural gas (CNG) - a substitute for petrol – is set for exponential growth in Brazil, Egypt, Iran and India and in Russia and the US too…Another vital factor is that increasingly, oil-based power generation is being replaced by gas with as much as 2 million barrels a day of power demand in the Middle East being potentially switched to natural gas by the end of the decade. Change is also underway at home, with a trio of supertankers carrying LNG recently diverted to the UK amid fears the cold weather would lead to a shortage in supply.  Companies with uncoventional gas assets in the UK, such as IGas (LON:IGAS), have already seen a share price bounce, but scepticism still exists about how easy any UK gas will be to get at.”” (Proactive Investors UK)

Ed Rendell’s plea for fracking fails to disclose his close industry ties – “Former Pennsylvania Gov. Ed Rendell took to the New York Daily News op-ed page Wednesday with a message to local officials: stop worrying and learn to love fracking. As New York Gov. Andrew Cuomo agonizes over whether to allow the controversial natural gas drilling technique, Rendell invoked his own experience as a Democratic governor who presided over a fracking boom. New York state, Rendell argued, has a major part to play in the nation’s fracking “revolution” — and it can do so safely. He rejected what he called the “false choice” of “natural gas versus the environment.” What Rendell’s passionate plea failed to note was this: since stepping down as governor in 2011, he has worked as a paid consultant to a private equity firm with investments in the natural gas industry. The op-ed piece was widely noted in other media outlets, and Cuomo wound up being askedabout it during a radio appearance on Wednesday. The New York State Petroleum Council promptly issued a press release hailing Rendell’s “strong and confident argument.” Reached Wednesday, Rendell told ProPublica that he should have disclosed to the Daily News his work at the private equity firm, Element Partners, and that the newspaper “should have included it.” Rendell said the Pennsylvania-based firm pays him about $30,000 per year. Still, he insisted he is not conflicted on the issue of fracking, in which water and chemicals are injected deep into the ground to extract previously unreachable natural gas from rock. He said he does not own equity in Element Partners or any fracking companies. “The only conflict would be if I had a pecuniary interest in the natural gas industry doing well, and I certainly don’t,” he said. Element Partners’ website lists several investments by the firm in natural gas companies, including a company called 212 Resources that specializes in “fluid management systems” for fracking. Rendell is also a senior adviser at the investment bank Greenhill, which has worked on several large transactions involving natural gas companies. A Greenhill spokesman said Rendell has not been involved in the firm’s work in the energy sector. “I have no brief for industry,” Rendell told ProPublica. He said he supports fracking because of the potential for American energy independence and jobs…It’s worth noting that since leaving office, Rendell has been a vocal supporter of fracking around the country. He’s weighed in in support of a regulated fracking industry in venues including Huffington Post; the Nightly Business Report; a Manhattan Institute forum; the Austin, Texas, PBS affiliate; and a Wall Street Journal conference with businessman T. Boone Pickens.”” (Raw Story)

As Fracking Proliferates, So Do Wastewater Wells – “GONZALES, Tex. — In a dusty lot off the main highway in this South Texas town, Vern Sartin pointed to a collection of hose hookups and large storage tanks used for collecting wastewater from hydraulic fracturing jobs. “We run about 30 to 40 trucks a day, 24-7,” Mr. Sartin said. “Depending on how the oil fracking is going out there, if they’re hustling and bustling, then we’re hustling and bustling.” Mr. Sartin is a watchman at a disposal well operated by Gulf Coast Acquisitions, where each day oil and gas companies dispose of wastewater by pumping it deep underground. Wastewater disposal wells like this one are becoming a common landmark in the drilling regions of Texas as the water-intensive practice of hydraulic fracturing, or fracking, continues to spread. In the fracking process, several million gallons of water, combined with sand and chemicals, are sent down a well to break up rock and retrieve oil and gas. Some of the fluid comes back up, along with additional underground water. Most of this wastewater is trucked to disposal wells and injected thousands of feet underground for permanent storage. But those wells have caused concern about truck traffic, accidents and the possibility for spills and groundwater contamination. Texas oil and gas regulators may soon tighten the rules for the construction of the wells, and they are encouraging drilling companies to reduce waste by recycling more water. Here and at other sites with big disposal wells, dozens of trucks a day roll in to pump out wastewater. Typically a dark, relatively thick liquid smelling of sulfur, and containing chemicals and minerals, the wastewater generally has high salinity. Sometimes, it contains low levels of radiation. The wastewater goes into a pit, then into a separator tank that allows the remaining oil to surface. Workers then skim the oil and sell it. The amount of wastewater being disposed of in Texas wells has skyrocketed with the spread of fracking, to nearly 3.5 billion barrels in 2011 from 46 million barrels in 2005, according to data from the Railroad Commission of Texas, the state’s oil and gas regulator. On average, companies in Texas dispose of 290 million barrels of wastewater — equivalent to about 18,500 Olympic-size swimming pools — each month. The state has more than 8,000 active disposal wells, about 850 of which are large commercial operations, according to the Railroad Commission. That is far more than other drilling states like Pennsylvania or Ohio. Texas has another 25,000 wells that accept waste fluids and use them to retrieve additional oil and gas. It can take months for a company to obtain a permit for a disposal well, because they are controversial. This week, for example, the three railroad commissioners delayed a decision on whether to grant a permit for a disposal well in Palo Pinto County, about 70 miles west of Fort Worth…Another concern is that wastewater injected into the ground might shoot into a nearby abandoned oil well. Texas has thousands of abandoned wells left from the wildcatting days of the last century, and the Railroad Commission is trying to plug them. “We’ve been drilled up like crazy out here,” said Slate Williams, the general manager of the Crockett County Groundwater Conservation District in the Permian Basin. In a few instances, Mr. Williams added, “they’ll be in a field where they are pumping some of these old wells, and they have an injection in one part of it, and all of a sudden something happens and there’s this big leak and it shoots up though the well, and the neighbor’s water well starts getting salty.”

US shale gas boom rocks coal market – “The chairman of Anglo American Australia, Graham Bradley, said the switch to gas-fired energy in the US had more than doubled the export capacity of that country, pushing prices down and raising a question over new coalmining developments in Australia. "Suddenly they have come in and taken significant share and that will be at the expense of . . . if not current mines, it will be certainly at the expense of the next crop of new mines," Mr Bradley told The Weekend Australian. The new export threat highlights the far-reaching impact of the shale gas boom in the US, where export constraints have kept prices low, fostering a renaissance of energy-intensive manufacturing and a switch by power stations from coal to gas…Mr Bradley said commodity prices would fare "badly" this year as new capacity in major resources such as coal and iron ore came to market. "All of the indications are that Australia has encouraged countries like China and Korea to promote the development of mines in other countries," he said. "So there will be more supply, more competition, and we can expect the price of those commodities to come down much closer to the cost of production." Data from the US Energy Information Administration shows that US coal exports hit a record 126 million short tons last year, as production and domestic consumption fell. The export tally was 17 per cent up on the previous year and 12 per cent ahead of the previous high mark, set in 1981. Domestic consumption fell by 114 million tons, or 11 per cent, and production by 7 per cent.”” (The Australian)

Parts of Low Country Are Now Quake Country – “LOPPERSUM, the Netherlands -- Jannes Kadyk's modest brick home suffered more than $5,000 in damage. Bert de Jong's more stately home will need about $500,000 to get back into shape. Both houses, like thousands of others, were damaged during recent earthquakes that have shaken the flat farmland in this area dotted with villages and tucked up against the North Sea. The quakes were caused by the extraction of natural gas from the soil deep below. The gas was discovered in the 1950s, and extraction began in the 1960s, but only in recent years have the quakes become more frequent, about 18 in the first six weeks of this year, compared with as few as 20 each year before 2011. Chiel Seinen, a spokesman for the gas consortium known as NAM, said the extraction had created at least 1,800 faults in the region's subsoil. "These faults are seen as a mechanism to induce earthquakes," he said. The findings in the Netherlands parallel the anxiety about hydraulic fracturing technology in the United States, where several states have halted drilling temporarily, though more commonly out of fear that chemicals used in the process may pollute water sources…This is not Haiti. The worst tremor, last August, had a magnitude of 3.4, hardly enough to cause widespread devastation. Yet the number of claims for damaged property is already in the thousands, and the company extracting the gas, a consortium of Shell and Exxon Mobil, has set aside $130 million for measures to strengthen buildings against the shocks. Yet most troubling is that experts at government agencies are predicting that the quakes will worsen, to between a magnitude of 4 and 5. Is the big one yet to come? Mr. Kadyk, 62, a retired city employee, pointed to cracks around doors and windows in his two-story brick home. He said he was "not an expert, so I cannot say yes or no, but the real experts say if we don't stop extracting gas, the country risks further earthquakes." Yvonne Doesburg, who runs a small restaurant and hotel called De Oude Smidse near Mr. Kadyk's home, recalled the August quake, which had its epicenter in Loppersum. "The house shook enormously; it was scary," she said. Asked whether people expected worse, she replied, "The fear is there."” (New York Times)

Can Fracking and Farming Mix in America's Biggest Ag State? – “We all know oil and water don’t mix, but what about oil extraction and water-intensive farming? Can both take place safely in California’s Central Valley? That’s the growing question as the nation’s biggest farm state comes ever closer to embracing hydraulic fracturing or “fracking.” Some of the biggest oil and gas companies have been quickly buying up water and oil rights, with over 17,000 acres of oil leases on California public land auctioned off by federal land managers at the end of 2012. Eyes are on the Monterey Shale, a giant 1,750 square-mile area that runs along the western side of the state and is believed to hold as much as 15 billion barrels of crude oil. As energy companies explore the shale, they're hopeful. Tupper Hull of the Western States Petroleum Association, an industry group representing oil and gas companies, told California NPR affiliate KQED: “If hydraulic fracturing proves to be successful here as it’s been elsewhere, it’s an extraordinarily optimistic future we’re looking at from an energy point of view.” In terms of benefits to the state of California, a University of Southern California study funded by the Western States Petroleum Association estimates that developing the Monterey shale will add nearly 3 million jobs and close to $25 billion in tax revenues by 2020. In states such as Pennsylvania, small and struggling farmers have also made quite a bit from leasing their land to energy companies, sometimes making as much as $1,000 an acre in the beginning of the natural gas boom…In states like Pennsylvania, Colorado, and Ohio, grazing animals have gotten sick and died after drinking fracking runoff and water from farm wells near fracking operations—often the main source of on-farm water. They’ve been poisoned with everything from arsenic, propane, and cobalt to uranium and radium. And the frequency of fracking-related tainted meat, dairy, and other food in the marketplace is yet to be thoroughly studied. (In her recent cover story for the Nation, Fracking Our Food Supply, for instance, reporter Elizabeth Royte dug up far more questions than answers)… For California farmers, the loss of hundreds of thousands of acre feet of water from the districts means an increase in rates and fewer acre feet allotments intended for new groves of pistachios and almonds, vineyards of grapes and fields of water-intensive alfalfa, tomatoes and corn, that likely will be planted either without increases in acreage or an increase in fallowed fields this year. According to state ag business analysts, the energy companies’ water grab will likely translate to higher food prices for consumers and increased cost to the production of bio fuels like ethanol that rely on the availability of cheap and abundant corn harvests. There's also the matter of where the chemically saturated waste water, a bi-product of the fracking process, will end up. Adam Scow of Food and Water Watch (FWW), an advocacy organization says waste water will only add to a critical situation in the state. “Agricultural pollution from nitrates, pesticides, etcetera is already a big problem in the Central Valley with ground water and surface water,” says Scow. “A lot of that runoff flows back to the San Francisco Bay Delta. If we add fracking chemicals to that mix, it might make it impossible to reverse the problem.”” (Takepart.com/Yahoo News)

US likely to lift shale gas embargo to Japan – “According to diplomatic sources in Washington, the United States government is at the concluding stages of approving shale gas exports to Japan. It is expected that America’s Energy Department will give conditional approval for the time being, and then it will proceed to examine Japanese companies and their shale gas export projects. The approval is expected to come as early as this April. It would be a much welcomed development for Japan if the shale gas exports will be approved this summer. Currently, the liquefied natural gas (LNG) imports have been rising after the suspension of all nuclear reactors, except two, due to the devastation that the Fukushima Daiichi nuclear power plant brought about in 2011. Last year, Japan has been recorded as the number one LNG importer in the world, with a record 87.3 million tons imported.” (Japan Daily Press)

Fracking Boom Spurs A Rush to Harness Brackish Water – “In regions of Texas like the Permian Basin, where the water needs of fracking have run up against a historic drought, drillers are increasingly turning to brackish groundwater previously thought too expensive to use. Fracking a well requires roughly 4 to 6 million gallons of water, which gets mixed with chemicals and sand to break up the rock and retrieve the oil or gas. In the Midland-Odessa region, where reservoirs sit 95 percent empty and cities and towns have been under severe water rationing for years, drillers are scrambling to find new sources of water…A virtual ocean of brackish water lies under much of Texas, but using it carries challenges. It may require the removal of chemical elements that can impede the drilling process by causing problems like scaling (building up sediment in wells), and cities interested in desalinating the water may be competing for it. Perhaps most importantly, “brackish water is not necessarily available everywhere,” said Michael Dunkel, director of sustainable development for the drilling company Pioneer Natural Resources, in testimony last month before a joint hearing of the House Natural Resources and Energy Resources committees. Some brackish reservoirs also lie deeper than freshwater resources, increasing the costs of drilling a well. The water problem is especially pressing in dry West Texas, the state’s largest drilling region. Although fracking accounts for less than 1 percent of the state’s total water use, in parts of the Permian Basin that figure has reached double digits and drilling continues to intensify. “This [oil] play, the magnitude of it, has taken us by surprise, really. And so we’re all playing catch up,” said Taylor of Fasken Oil & Ranch, which is based in Midland. “We’re working at a feverish pace to try to come up with alternative ways [to drill] and still make good wells.”.. “Each area has its own different chemistry problem,” says Fasken’s Taylor. “The waters that come back are all different, so out here it’s different than it is in the Eagle Ford, and the Eagle Ford is different than it is in the Haynesville play and the Marcellus.”” (StateImpact Texas)

Wastewater disposal linked to earthquakes – “WASHINGTON -- A 2011 Oklahoma earthquake has been tied by researchers to the disposal of wastewater from oil production, the latest study suggesting the energy boom from advances such as fracking is increasing temblors. A series of quakes in November 2011 followed an 11-fold bump in seismic activity across the central U.S., as disposal wells are created to handle the increase in hydraulic fracturing, or fracking, for oil and gas, geologists at the University of Oklahoma, Columbia University and the U.S. Geological Survey said in the journal Geology Tuesday. The wastewater that triggered the earthquakes came from conventional wells in the Hunton formation, said Katie Keranen, assistant professor at Oklahoma and co-author of the report. The findings are a cautionary note for disposal of the millions of gallons of fluids from hydraulic fracturing, she said… A spate of earthquakes in the central U.S. in recent years is "almost certainly" man-made, and may be caused by oil-and-gas wastewater disposal, U.S. Geological Survey researchers said a year ago. For the three decades until 2000, seismic events in the nation's midsection averaged 21 a year. They jumped to 50 in 2009, 87 in 2010 and 134 in 2011. Concerns over earthquakes prompted the U.K. to temporarily halt fracking. The ban ended late last year when the government adopted standards, including a rule that would suspend operations when unusual seismic activity is detected. Concerns have also emerged in the Netherlands. Natural gas extraction in the country's Loppersum area has created at least 1,800 faults in the region's subsoil, gas consortium NAM reported. The 5.7-magnitude earthquake near Prague, Okla., on Nov. 6, 2011, was the state's biggest and may be the largest linked to the injection of water from drilling process, the report Tuesday found. The state's geological survey disagreed with the finding, and said it was likely "the result of natural causes." The trembler destroyed 14 homes, damaged other buildings, injured two people and buckled pavement, according to the report.”” (Bloomberg News)

Energy Journal: Chinese Shale Gas Edges Forward – “The great unknown in today’s energy market is future Chinese production of shale gas and oil. That murky subject edged a little closer to the light on Tuesday as Royal Dutch Shell PLC received Chinese government approval for its first shale gas production-sharing contract, The Wall Street Journal’s Brian Spegele reports. Shell is gearing up for some significant shale gas drilling in the country this year and next. The result of this could be a key factor in whether China can hit its ambitious domestic gas production targets—seen as vital both for reducing import dependence and mitigating air pollution related to heavy use of coal. One of the greatest obstacles to a shale gas boom in China could be the fact that the technique used to extract it—hydraulic fracturing—uses a lot of water. A burgeoning shale gas industry would have to compete for water resources with the giant coal industry, which Scientific American says is currently using 15% of the country’s water, and could gobble up a quarter by 2030.” (Wall Street Journal)

Shale Boom Sparks US Industrial Revival – “"In the USA, re-industrialization is being promoted very consistently, ambitiously and with great conviction," Eder told Reuters. "Low energy prices gave us the final—and not insignificant—push." With cheap shale gas making the United States a magnet for industrial companies like Voestalpine, many economists are positing a return to industrialization for the world's biggest economy after more than a decade of consumption-led growth. "America is currently seeing a renaissance of production," said Felix Schuler, a partner at Boston Consulting Group (BCG) based in Germany, who specializes in the industrial goods sector. U.S. natural gas prices are $4 per million British thermal units—having touched a decade low of $2 last year—well below its 10-year average of about $5.70 and prices of around $14 in Britain and almost $17 in Asia… Cheap natural gas not only cuts costs for companies that use it as a raw material or feedstock for other products such as chemicals, it also means lower power prices as utilities use more gas to generate electricity. Industrial companies pay about $40 per megawatt-hour of electricity on the U.S. East Coast, where prices have dropped sharply since mid-2008. That compares with about 45 euros ($58) in Germany, 60 euros in Austria and more than 65 pounds ($98) in Britain, creating incentives for energy-hungry firms in the steel and chemicals sectors to invest in new plants and expand existing facilities in the United States. "The idea that energy costs in North America would always be more expensive no longer holds true. The new reality is that natural gas has turned that equation on its head," Peter Loescher, the chief of executive of German engineering conglomerate Siemens, said in Detroit last month.”” (CNBC)

Waterless Fracking Makes Headway in Texas, Slowly – “Call it hydraulic fracturing — without the hydro. In most hydraulic fracturing operations, several million gallons of water, together with sand and chemicals, get pumped down a hole to blast apart rock that encases oil or gas. But with water increasingly scarce and expensive around Texas, a few companies have begun fracking with propane or other alternative liquids. “We don’t use any water,” said Eric Tudor, a Houston-based official with GasFrac, a Canadian company that fracks with propane geland butane. “Zip. None.” At a GasFrac operation in South Texas last month, a sticker on one worker’s hard hat showed a red slash through the word H2O. Water-free fracking still remains an early-stage technology, with potentially higher initial costs than conventional fracking methods. But as lawmakers and oil regulators focus on the large quantity of water used for fracking wells, the concept is getting a closer look. GasFrac has led the way, bringing its propane fracking operations to Texas, and there is talk of using other substances like carbon dioxide or nitrogen. Waterless fracking is “a viable technology for sure,” said David Yoxtheimer, an extension associate with the Marcellus Center for Outreach & Research at Penn State University. However, he noted, there is a reason that companies use water, namely that it is “virtually incompressible” and thus is very effective in bringing pressure against, and ultimately breaking up, rock. Currently there are no special rules on fracking with propane or other nonwater liquids in Texas, according to Christi Craddick, one of three members of the Railroad Commission of Texas, which regulates the oil and gas industry. The technology is “exciting” but still rare, she said, and no rule changes are on the horizon. “We’ll see as the technology evolves if our rules need to evolve,” Craddick said last week in an interview. “We’ve looked at [propane fracking], and I would say that absolutely our industry is open to all possibilities,” said Michael Dunkel, the director of sustainable development for Pioneer Natural Resources, in testimony last month before a joint hearing of the House Energy Resources and Natural Resources committees.”” (StateImpact Texas)

Unions and Regulations Threaten Fracking in Illinois – “The unemployment rate in the State of Illinois is 9.5 percent, significantly above the national average of 7.7 percent. So the creation of new jobs in the state would seem to be a top priority. However, last week, regulators and unions found a new way to kill job growth, by blocking the development of hydraulic fracturing in the state.  A bill authorizing fracking has been before the Illinois legislature for ten months, but at the last minute, an amendment was proposed that would require the fracking contractors to acquire a well-drilling license before beginning operations. There currently is no system to grant the contractors such a permit, and it will take, apparently, three years to do so. Until then, a contractor with an Illinois water license would be required at every fracking site — and surprise, surprise, those contractors are often members of Operating Engineers Local 150. But the oil-and-gas firms say that, no matter what, the amendment would mean drilling will be postponed for more than a year, and they may decide not to develop in Illiniois altogether.” (National Review)

Blair County processing plant expected for 2015 – “A new gas-to-liquid processing plant is expected to be up and running in Blair County by 2015, a $200 million investment in a region that doesn't have shale gas of its own but still wants a piece of the industry. Marcellus GTL LLC of Gilberton, Schuylkill County, announced last week it would begin construction on the plant in Duncansville later this year. The facility, called a Clean Energy Center and the first of its kind, will process natural gas to produce about 84,000 gallons of gasoline and propane per day. It will take up a 10-acre footprint on a 60-acre site, the latest Marcellus-related development to come to Blair County, which borders gas-producing regions but doesn't expect any wells of its own. The site, near Hollidaysburg, is about 90 miles east of Pittsburgh. Blair County is cut off from the Marcellus Shale formation that underlies much of Pennsylvania -- the gas-rich rock cuts across western parts of the state and then veers north, missing many central counties. That's why the region has begun marketing itself to companies that specialize in processing and treating the gas once it's been extracted, said Matthew Fox, marketing manager at the Altoona-Blair County Development Corp., a nonprofit business catalyst that's been in talks with Marcellus GTL for about 18 months. The plant is expected to create about 30 permanent jobs and 100 construction jobs, he said.”” (Post-Gazette)

U.S. shale no panacea for Japan's crippling energy bills – “(Reuters) - U.S. shale gas may not be the panacea being touted by Japan's politicians and companies to sharply reduce the country's crippling energy bills. Japan's government last month said it will provide loan guarantees of 1 trillion yen ($10.47 billion) for investments in shale gas, which the Nikke ibusiness daily has said could cut imported gas costs by as much as 40 percent. But the advantage is eroded to as little as 10 percent once shipping and other costs are accounted for, according to a Reuters survey of estimates. "The shale gas revolution is an illusion," said Toshinori Ito, president of Ito Research and Advisory, an independent energy research company based in Tokyo… But it's not clear U.S. shale can deliver the hoped for cost benefits. U.S. producers are likely to charge a premium of as high as 30 percent over market quotes for piped gas, according to one estimate. The only U.S. project that has so far secured a license to export plans to charge a 15 percent premium. U.S. domestic prices could also rise if costs of extraction are pushed up by environmental concerns, while falling oil prices make other sources of LNG that are priced against crude cheaper by comparison. "Cheaper yes for now," said Penn Bowers, an analyst at CLSA Asia=-Pacific Markets. "But let's say oil prices fall back to $70 given the fact that the US is also developing a lot of new liquids and Iraq is increasing production - then you are left wishing you had just stuck with the oil-linked price."” (Reuters)

UPDATE 1-Shell says China approves shale deal, plans more drilling – “(Reuters) - China has approved a production-sharing contract with Royal Dutch Shell for the Fushun shale gas block in the southwestern province of Sichuan, with the global oil firm preparing to step up drilling activities in the country. The government nod comes a year after Shell first inked the contract to develop the shale gas block with the China National Petroleum Corporation (CNPC). The contract is the first of its kind to be approved by China, Shell spokeswoman Li Lusha said on the sidelines of a conference in Beijing. Shell has committed to spend at least $1 billion a year exploring China's potentially vast shale gas resource, the company told Reuters last August… "We have plans for a significant drilling season in 2013 and 2014. We are ramping up investment here (in China)." China is widely believed to hold the world's largest shale gas reserve but development remains at an early stage.”” (Reuters UK)

Shale Boom Not Leading to Widespread Hiring in Ohio – “Ohio’s shale boom appears to be injecting a lot more retail spending in the corner of the state where that exploration and development work is concentrated, but it isn’t yet leading to much more hiring. Researchers atCleveland State University found that sales receipts in the 13 Ohio counties that have the state’s highest concentration of shale development grew 21.1% in 2012 to $14.9 billion, up from $12.3 billion the year before. By contrast, in the 44 Ohio counties without any shale development, receipts went up only 6.9%. The report divided the state into four categories — high shale development, zero shale development, as well as moderate and weak shale development. Sales receipts grew only 7.6% in moderate shale counties, 10.9% in weak shale counties. “Sales activity in strong shale counties has clearly been faster than elsewhere in the state during 2012,” the report says… “Employment growth associated with exploration and early state production may have been captured by out-of-state workers that already possessed the necessary skills and training,” the report says. But that could change. “Employment growth should accompany the increased scale and scope of shale activities in coming years.”” (Wall Street Journal)

Ernest Moniz And Fracking Drive Environmentalists Off Of The Rails – “Many environmentalists are unhappy about President Barack Obama’s nomination of Ernest Moniz, a professor of physics and engineering at MIT, to be Secretary of Energy. As Director of the MIT Energy Initiative, Moniz assembled an all-star cast of MIT physical and social scientists to produce a June 2011 report that pointed to natural gas as an abundant, low-cost energy source that could sustain much of the world’s energy needs over the next several decades while we transition to wind, solar, tidal, geothermal and other carbon-free energy sources.   It would also offer large environmental benefits because gas emits few conventional pollutants, and only about half as much carbon dioxide as the main transitional alternative: continued coal burning. Implicit in the MIT vision was an understanding that shale gas development, using the technology known as “fracking,” should and will occur on a global scale.  While a few groups such as the Environmental Defense Fund have been supportive, this is unacceptable to many others in the environmental movement. So they are striking out to discredit Professor Moniz, his views, and the additional large body of academic research and practical experience proving the efficacy and safety of fracking… One agency missing in action has been the Environmental Protection Agency.  In 2009 the U.S House of Representatives asked EPA to study the impact of fracking on drinking water.  EPA agreed, but took two years to begin the research. Then, in December 2012 EPA issued a progress report that managed not to answer any of the key questions, promising continued research. EPA seems paralyzed, recognizing the significant environmental benefits of natural gas, but fearful of challenging the fracking orthodoxies of its longtime environmental “movement” supporters.”” (Forbes)