Pipeline construction in shale boom alters countryside – “SCIO, Ohio — For more than 80 years, the view from Jody Snyder’s front porch was sweet and simple: farm fields, woods and rolling hills. It’s a view she has shared with her husband, Dick, for decades. But the landscape is changing in rural Harrison County. Now, a battalion of construction workers operates cranes, backhoes and bulldozers that the Snyders watch warily. The workers are carving a miles-long trench for natural-gas-liquid pipelines that will connect to a massive gas-processing plant under construction just across Rt. 151.“I told the fellas I’m going to wear a parachute the rest of my life, and when that (pipeline) goes, I’m going to pull the rip cord,” said Mrs. Snyder, 87. “It’s too close.”By June, the plant is expected to start taking the gases that shale wells produce and split them into propane, butane and ethane. Explosions seem unlikely, but a series of pipeline spills has critics crying foul. Officials of the oil and gas industry said the pipelines and the plant are safe and vital to their plans to develop Ohio’s Utica shale. A lack of natural-gas processing, industry officials say, keeps shale wells from delivering to buyers and has slowed the pace of drilling and fracking. “You must have that in place,” said Tom Stewart, the vice president of the Ohio Oil and Gas Association. Oil and gas companies plan to spend more than $1 billion in Carroll, Columbiana and Harrison counties to build processing plants and the pipelines that connect them. The work to connect shale wells to natural-gas processing plants is transforming the countryside. Miles of pipeline trenches run from drilling sites, shadowing highways and snaking through cattle pastures. Records kept by the Public Utilities Commission of Ohio show that 95 pipeline projects in Carroll and Harrison counties are in various stages of completion. More are expected as energy companies keep drilling for oil and gas. Environmental advocates don’t share the industry’s confidence about pipeline safety. “Pipelines are certainly better than they used to be, but in the long run, there is a chance of leakage,” said Paul Feezel, a member of the grass-roots group Carroll Concerned Citizens. “Right now, during construction, there are impacts.” Ohio Environmental Protection Agency officials are investigating a series of spills that have fouled streams and wetlands. The spills involve a mix of clay and water used in drilling pipeline tunnels beneath roads and waterways. The clay isn’t toxic, but it sinks into wetlands and streambeds, where it can smother aquatic plants and wildlife. EPA records show that about 800 gallons of clay slurry spilled from a MarkWest Energy pipeline project into an unnamed stream near Barnesville in Belmont County on May 4.”” (Columbus Dispatch)

Shale Gas May Account for 45% of European Output of Fuel by 2035 – “Shale gas may account for 45 percent of production of the fuel in Europe excluding Norway by 2035, management consultant A.T. Kearney said, citing a study. Europe sits atop about 7 percent of world recoverable shale gas reserves and may produce as much as 58 billion cubic meters in 2035, A.T. Kearney said in a statement. Production won’t be economical in most countries until 2017 or 2018 because costs will exceed market prices, the group said. “The business with shale gas is a long-term, capital-intensive and risky project,” Kurt Oswald, the main author of the study, said in the statement. Poland and Ukraine will lead Europe, partly because of political backing, the group said.”” (Bloomberg BusinessWeek)

Chevron finalizes Cooper Basin shale gas farm-in with Australia's Beach – “US major Chevron has finalized a deal to farm into shale gas acreage in central Australia's Cooper Basin owned by local upstream player Beach Energy. Chevron has paid Beach $36 million for a 30% stake in the PEL 218 permit in South Australia and $59 million for 18% of ATP 855 in Queensland, the Australian company said Monday. The permits are known as the Nappamerri Trough gas ventures. The asset transfers have occurred, although they remain subject to formal approvals by the South Australian and Queensland state governments, Beach said. Indicative approval has been granted in Queensland, and the agreement has been approved and registered in South Australia to date, the company added. The acreage "has the potential to be a material source of gas for both the eastern Australian domestic and international markets in the coming years," Beach Managing Director Reg Nelson said in a statement. Chevron's first-stage spending under the farm-in includes a commitment to invest $95 million in exploration in the PEL 218 permit. In the second stage, Chevron could pay up to $123 million for another 30% of PEL 218 and $36 million for an additional 18% of ATP 855.  When the farm-in was announced in February, Chevron Australia Managing Director Roy Krzywosinski said the company has an "industry-leading queue" of LNG projects under development in Australia. Chevron is currently developing the A$52 billion ($52.1 billion) Gorgon and A$29 billion Wheatstone LNG projects in Western Australia. "This agreement provides an opportunity to explore a new, prospective basin and potentially add to our natural gas portfolio," Krzywosinski said at the time. "The Cooper Basin is an established petroleum producing basin and provides the opportunity to leverage our expertise in tight gas."” (Platts)

New Fracking Rules Have Environmental Groups Worried – “The Obama administration is set to unveil major new regulations on hydraulic fracturing, the controversial method of extracting oil and gas, possibly as soon as Tuesday. The proposed regulation is expected to be more lenient to the oil and gas industry than a draft rule issued last year by the Interior Department, reflecting heavy lobbying by fossil fuel companies, as well as President Obama’s desire to support the nation’s recent boom in natural gas development—and the jobs that come with it. “We have observed that over the past few years, the administration has shifted toward a more favorable opinion of the value of natural gas to the economy and the nation’s energy security,” said Richard Ranger, a senior policy adviser at the American Petroleum Institute. “We think we’re being heard, but the proof will be in the pudding.” Environmentalists say they expect to be disappointed by the proposal and fear it won’t do enough to protect sensitive water supplies in communities around oil and gas wells. “Industry has been very effective throughout this process in getting the rule tailored to the way they would like to see it.… Clearly this is an administration that is very pro-natural gas,” said Frances Hunt, a senior Washington representative of the Sierra Club…The oil and gas industry pushed back hard against the rule, which received more than 177,000 public comments and signatures—“a stunning amount of input,” said one Interior Department official. In response, the administration agreed to revisit the language. Since then, oil and gas companies have lobbied aggressively to loosen the requirements. This year, Interior’s Bureau of Land Management has held 11 meetings with industry as well as opponents of fracking. The forthcoming rules are expected to reflect the companies’ desire for less regulation.   For example, last year’s draft rule required that companies disclose the blend of chemicals used to open up a well before they commence fracking. But a draft of the new rule says that companies don’t have to disclose the chemicals they use until after the wells have been drilled. The industry argues the chemical mixes are proprietary and that revealing them would put them at a competitive disadvantage. The new rule is expected to allow exemptions from disclosure of proprietary information. “We’ve gone from more complete information, pre-fracking, to more limited information, post-fracking,” said Hunt of the Sierra Club. “From a public health and confidence perspective, the trend line is going in the wrong direction.”  Last year’s draft also required companies to perform analyses of the integrity of the cement lining in all the wells they drill. But industry lobbyists complained that that process would be too expensive and time-consuming. A draft of the new rule indicates that companies will now only have to complete analyses from one sample well at each site, rather than every well. “Those cement jobs are individual jobs. They can be done well or poorly,” Hunt said. Oil and gas companies, which oppose any new federal regulation at all, say the rules are more than sufficient to ensure safe drilling and may still slow the fracking boom. “We believe the states are doing an effective job regulating in this space,” said Ranger of the API. “Federal permitting will further complicate and delay issuance of permits.… Our concerns are about the time required for a permit review and the uncertainty factor for companies.” Another industry official who has met with the Obama administration said, “I don’t think they want to shut down fracking for this reason: the unbelievable number of jobs associated with it. [White House energy adviser] Heather Zichal understands that without hydraulic fracturing, that doesn’t happen.”” (National Journal)

Plans to increase exports of liquefied natural gas could accelerate fracking boom, critics say – “WASHINGTON — A domestic natural gas boom already has lowered U.S. energy prices while stoking fears of environmental disaster. Now U.S. producers are poised to ship vast quantities of gas overseas as energy companies seek permits for proposed export projects that could set off a renewed frenzy of fracking. Expanded drilling is unlocking enormous reserves of crude oil and natural gas, offering the potential of moving the country closer to its decades-long quest for energy independence. Yet as the industry looks to profit from foreign markets, there is the specter of higher prices at home and increased manufacturing costs for products from plastics to fertilizers. Companies such as Exxon Mobil and Sempra Energy are seeking federal permits for more than 20 export projects that could handle as much as 29 billion cubic feet of natural gas a day. If approved, the resulting export boom could lead to further increases in hydraulic fracturing, a drilling technique also known as fracking. It has allowed companies to gain access to huge stores of natural gas underneath states from Colorado to New York, but raised widespread concerns about alleged groundwater contamination and even earthquakes…In recent months, however, production has begun to level off as the glut of natural gas keeps U.S. prices down. In response, producers have begun pushing to export the fuel to Europe and Asia, where prices are far higher. Approval of all the projects currently under review by the Energy Department could result in the export of more than 40 percent of current U.S. production of liquefied natural gas, or LNG, which is gas that’s been converted to liquid form to make it easier to store or transport. The prospect of a major expansion of U.S. gas exports has tantalized business groups and lawmakers from both parties, and they’re urging the Obama administration to move faster to approve the projects as a way to create thousands of jobs and spur economic growth. Increased exports also would help offset the nation’s enormous trade deficit. But consumer groups and some manufacturers that use natural gas oppose expanded exports, saying they could drive up domestic prices and make manufacturing more expensive. Many environmental groups also oppose LNG exports because of fears that increased drilling could lead to environmental damage “Exporting natural gas will have serious implications for public health, the environment and climate change,” said Michael Brune, executive director of the Sierra Club. “Building these terminals means lots of new fracking, and more fracking means more risks for Americans.”.. The administration has not said whether it will approve the projects. The issue is among the main challenges for Ernest Moniz, President Barack Obama’s nominee to be energy secretary. Federal law requires the Energy Department to determine that projects are in the public interest before granting export permits to countries that do not have free-trade agreements with the U.S…Whether to approve natural gas exports is “a huge question that’s facing the federal government right now,” said Sarah Ladislaw, an energy analyst at the Center for Strategic and International Studies. Expanded exports not only could raise natural gas prices, but also could hinder development of renewable forms of energy such as wind and solar power that do more to combat climate change, Ladislaw said. “How do you put yourself on a pathway to reduced (carbon) emissions over the longer term while not killing this golden goose which is providing low-cost energy to the United States right now?” Ladislaw asked…U.S. officials also must consider competition from countries such as Canada and Australia, where new LNG export terminals also are being proposed. The facilities cost billions of dollars and take years to complete. Only one U.S. license has been granted so far, to Houston-based Cheniere Energy Inc. for an export terminal in Louisiana’s Cameron Parish. Proposals to build plants from Maryland to Texas and Oregon are pending from energy giants such as Exxon Mobil and Conoco Phillips, as well as Virginia-based Dominion Resources Inc. and Canadian-based Veresen Inc. The Energy Department has promised to decide on a case-by-case basis, but must finish wading through nearly 200,000 comments filed on a study last year that concluded more exports would translate to net economic benefits for the U.S.”” (Washington Post)

--ICYMI over the weekend: the EQT Corp. is buying nearly 100,000 Marcellus acres from Chesapeake Energy. The move helps EQT bolster its Marcellus holdings as the company narrows its focus to drilling operations, and gives Chesapeake some much-needed cash as the Oklahoma City firm continues to plug holes on its balance sheet. (Post-Gazette)

--The Inquirer's Andrew Maykuth has a piece today on the two sides debating the economic impact of gas drilling in Pennsylvania: 

"Mark Price, a labor economist with the liberal-leaning Keystone Research Center, says he can find only 20,000 direct jobs created from Marcellus Shale. Even if all coal-mining and legacy natural gas drilling is added together, "this is a sector that still only makes up half of 1 percent of Pennsylvania's economy," he said.

Industry supporters say Price's narrow focus does not account for indirect employment caused by drilling - jobs created by suppliers, or from spending by those employed in the business. Nor does it account for new wealth flowing to owners of mineral rights, who collect royalties on natural gas extracted from their property." (Philadelphia Inquirer)

--And despite the cheering heard in gas fields across the county, horse Frac Daddy finished 16th in the Kentucky Derby on Saturday. Sarah Palin bet on him, though. 

Brazilian leaders express interest in Pa. shale drilling, regulation - “RIO DE JANEIRO -- From the shale underlying Western Pennsylvania to the deep-sea oil off the coast of Brazil, emerging energy sources have policymakers and entrepreneurs from both hemispheres talking business. The bulk of Brazil's energy comes from hydropower, though wind, biomass and other sources supplement. But oil fields off the coast here -- and shale formations in the country's south -- have Brazilian companies keen on drilling, and Pennsylvania's experiences exploring and extracting natural gas from the Marcellus Shale have been a central point of discussion since a trade delegation began meetings in Sao Paulo this week. "They have a very similar balance of energy portfolio," Gov. Tom Corbett said in an interview. "They're looking at us as to how can they invest in us. We're looking at our people that are coming down, smaller companies coming down, how can they invest here?" "It really is kind of a get-to-know-you, but I think you will see over the course of -- not maybe a year or two, but maybe three or four -- a real development of a relationship that businesses, financial investment, will grow." On a one-day visit here Wednesday, Mr. Corbett met with Sergio Cabral, governor of Rio de Janeiro state, in his office at the Palacio Guanabara, the seat of state government. In addition to discussing conditions for business and systems of education in their states, Mr. Corbett said, the governors signed an agreement to collaborate, particularly on issues related to oil and natural gas. "We can pick up the phone, call over there and get cooperation down here. They can do the same thing," he said. "He's very interested in the shale gas because they do have shale gas." Mr. Corbett said he discussed a similar agreement during an earlier meeting with the vice governor of Sao Paulo. "Both regions, Brazil and Pennsylvania, are going through a significant revolution in the energy arena, Pennsylvania because of the shale gas, Brazil because of the 'pre-salt' and eventually some shale gas as well," said Fernando Musa, CEO of Braskem America, in an interview at the company's headquarters in Sao Paulo. "Pre-salt" is the term for an oil reserve located far beneath the ocean's surface, beneath a layer of salt. Like the natural gas trapped in shale deep under the earth's surface, it presents challenges for drillers seeking to extract it...Brazil has yet to pursue serious production of natural gas, but oil and gas company executives meeting with the Pennsylvania delegation here expressed interest in learning about how the U.S. state developed regulations for the industry. "We are all aware of the shale gas revolution in the United States since the start of this century," said Carlos Mariani, vice president of the Federation of Industries of the State of Rio de Janeiro. He added that the experiences of developing shale gas in the United States will be the subject of an industry event later this year.”” (Post-Gazette)

5 Things U.S. Must Do To Win At Fracking - “The United States can use fracking as a bridge to a cleaner  future, or it can damage land, pollute water, and spew even more greenhouse gases, an energy advisor to two presidents said at the University of Chicago Thursday night. “I think as a rule it’s far more expensive to do something stupid and then to clean it up, than to do something right in the first place,” Hal Harvey, CEO of the energy and environmental policy firm Energy Innovation, said at  the Harris School of Public Policy.“Getting this right from the start is really important and we’re definitely behind the curve on that.” Harvey outlined five steps the U.S. should take to ensure that it exploits the benefits of its natural gas boom and avoids the costs. “These are the things you must do if you want natural gas to be a bridge to the future. And it could be. Natural gas has a lot of advantages. These things don’t cost that much money, but they involve a different approach than just, ‘let’s go get the hydrocarbons out of the ground.’”

1. Control Methane Leaks

2. Use Gas To Push Out Coal, Not Renewables

3. 3. Adopt Strong Well Standards

4. 4. Prevent Surface Pollution

5. 5. Zone Gas Fields To Avoid Ecological Damage

(Forbes)

Shale oil find fuels boom in U.S. Business - “As executive director of the Port of Corpus Christi, Texas, his business is booming and he has aggressive plans to expand and take advantage of the trend. He expects the local economy to double maybe triple in size within a few years as U.S. industries flock to the area, joined by foreign companies as far afield as Italy, Austria and China, all racing to take advantage of the cheap and plentiful oil and natural gas.To Mr. LaRue, it all started with a major oil find a few years ago in the Eagle Ford shale deposits 60 miles up the road. That oil had been locked up for millions of years in deep underground bedrock and suddenly came available because of technologies developed by U.S. oil companies to extract oil from shale.While the Eagle Ford gusher was the initial big draw in a world where oil-thirsty consumers have driven prices to $100 a barrel, the field also proved to have plenty of natural gas that became a powerful attraction for industries that use gas as a feedstock and to power factories. U.S. and foreign manufacturers have announced plans to open plants in Corpus Christi for making steel and plastic products as well as building pipes needed to transport the oil and gas. Cheniere Energy Inc., a Houston gas transport firm, has asked the Energy Department for approval to invest $10 billion into building a massive facility for liquefying and exporting some of the Eagle Ford gas.All of that comes on top of the port’s vital role in shipping the Eagle Ford crude oil to Gulf Coast and East Coast refineries that desperately need new sources of light, sweet crude to satisfy demand for highly refined gasoline in the most populous region of the country. Getting the oil out of the area was not easy at first because not enough U.S.-made vessels were available to ship all the crude to meet East Coast demand. But shippers are making do with barges while a shipyard in Philadelphia is building more tanker vessels to accommodate the stream of oil coming to market, he said. Mr. LaRue estimates the port’s oil- and gas-fed manufacturing boom to create 350,000 factory jobs paying $60,000 to $80,000 a year, with thousands more jobs in construction and other industries that feed into and service the manufacturing plants. Unemployment is down to 6 percent. It had been as high as 8.5 percent, 9 percent” during the recession, he said. “I attribute most of the reduction to Eagle Ford.”...“The availability of shale in the United States and around the world has to be one of the biggest game-changers I’ve seen in my career,” he said, but technologies still are needed to ensure that the gas and oil can continue to be extracted at low cost and without serious harm to the environment. “Can we develop the technologies to extract it sustainably? If we do, we’ll have cheaper energy. We will power a manufacturing renewal” and even possibly achieve energy independence in North America once again, he said.””  (Washington Times)

Shale gas could boost UK economy, says BP chief Bob Dudley - “Shale gas could provide “great economic benefits” to the UK, BP chief executive Bob Dudley has said, suggesting it could help to bring down Britain’s high gas prices.While BP is not involved in shale gas exploration in the UK, Mr Dudley said that “doesn’t mean we won’t be in the future”. The area around Blackpool where Cuadrilla has been exploring had “great potential”, he said. Mr Dudley was speaking at the oil major’s annual general meeting, where it faced mini-revolts over its pay and over Carl-Henric Svanberg’s position as chairman. Nearly 7pc of investors declined to support the remuneration policy while 9pc failed to back Mr Svanberg. BP’s board also fielded criticism over the Gulf of Mexico disaster and the efficacy of its $8bn (£5.2bn) share buyback, which it is funding using proceeds from the $27bn sale of its stake in Russian joint venture TNK-BP. Quizzed by shareholders on shale gas, Mr Dudley said: “When used responsibly and carefully, we think this could potentially provide great economic benefits for the UK, where natural gas prices are quite high - probably three or four times higher than they are in the United States.” BP has previously said that shale gas is unlikely to be a “game-changer” for the UK over the next two decades. Iain Conn, a BP executive director, repeated a note of caution on Thursday, telling the Daily Telegraph the US enjoyed a series of advantages over the UK, having a large fleet of drilling rigs, established pipeline infrastructure and a mineral rights regime conducive to exploration. These meant shale development in Britain would “take a longer time-frame”...Mr Dudley, meanwhile, was also enthusiastic about the “massive” prospects for shale oil in Russia, where BP has taken a 20pc stake in oil giant Rosneft as part of the deal to sell its 50pc stake in TNK-BP. “It may very well be there is even more in Russia than we think,” he said. BP has begun an $8bn share buyback using some of the cash proceeds of the deal but faced questions from shareholders over whether the process would do anything to boost its “floundering” share price, which has barely moved since the buyback began and remains well below the levels it enjoyed before the Gulf disaster. Mr Svanberg said he thought “anybody will agree” that if a company were, for example, to buy back 10pc of shares the share price would move 10pc higher. Mr Dudley was also defensive of the programme, telling reporters: “I think a lot of people don’t understand what a buyback is. We have only just started that programme.” While BP’s share price had not “necessarily moved that much versus the FTSE and other oil companies” since the start of the buyback, it was “starting to differentiate itself a bit”, he said. “The impact of the buyback programme will only happen over time.”” (Telegraph UK)

Kingdom: US ‘shale boom’ not a competitive threat - “Production of oil from shale deposits outside North America will be too costly to significantly harm the interests of established oil exporters, says a top Saudi official.
Ibrahim Al-Muhanna, an adviser of Petroleum and Mineral Resources Minister Ali Al-Naimi, was speaking at a forum organized in Kuwait City by Secretariat General of the Organization of Arab Petroleum Exporting Countries (OAPEC).  Most of OPEC members have so far played down the significance of the so-called shale boom in the US. The International Energy Agency recently predicted that the US will overtake Saudi Arabia as the world’s No. 1 oil producer by 2020. In his speech, cited by Reuters and other news agencies, Ibrahim Al-Muhanna addressed the increase of shale oil production which analysts have said is a growing concern for Gulf Arab producers. “This fear is misplaced. The positive effects of shale oil on oil producing countries, including OPEC and Arab countries, in the medium term 5 to 10 years, outweigh the negative effects,” he said adding that the positive impact included giving more depth and stability to the market. “Increases in the production of shale oil during the remaining part of this decade will be restricted to the US and Canada within the limits of 1.5 million barrels per day, which is a small quantity in a market where demand exceeds 90 million barrels per day,” he was quoted as saying.  “Production of shale oil in the remaining parts of the world is not expected before the start of the next decade at best.” The extra supply is not a competitive threat because it costs much more to produce than oil in most of OPEC’s member countries, he said.  “There are many difficulties that face the production activities of shale oil...most importantly, the high production cost which amounts to about $70 to $ 80 per barrel,” he said. He said global oil supplies are likely to remain balanced and prices stable at around $ 100 per barrel, with OPEC expected to maintain production at current levels this year. “Assuming that OPEC will maintain the current production level of 30.5 million bpd, as expected, it will mean the market will stay balanced this year with anticipated withdrawals from the commercial stock in the fourth quarter,” he said.”” (Arab News)

Oil Outlook ‘Bearish’ on Demand Drop, U.S. Shale Boom - “Crude prices will probably drop, at least in the first half, amid rising U.S. shale-oil production and slowing economic growth, according to analysts. “I’d stay moderately bearish from here,” Seth Kleinman, head of energy strategy at Citigroup Inc., said at the Bloomberg Oil Forum in London today. “Everything looks pretty weak,” he said, citing downward revisions to global demand growth forecasts by the International Energy Agency and the Organization of Petroleum Exporting Countries. Global crude production will be “robust” this year as output rises in the U.S., Iraq and Kazakhstan, while demand growth may slow in consuming nations including China, he said. Brent crude has fallen 6 percent this year on concern that Europe’s debt crisis will crimp global growth and damp oil consumption. The North Sea grade traded above $104 a barrel today on the ICE Futures Europe exchange in London. “The macro risks are skewed to the downside,” David Fyfe, head of market research and analysis at Gunvor Group Ltd., said at the forum. The outlook for the second half is “more bullish,” said Fyfe, former head of the IEA’s oil industry and markets division. U.S. output of oil and natural gas from shale deposits may rise at a slower rate through 2014 because the developments will require almost 3,000 rigs to drill as many as 65,000 wells, in order to keep up the current pace of expansion, according to an estimate from Sadad al-Husseini, founder of Husseini Energy, an independent consultant based in Dhahran, Saudi Arabia. That’s up from 1,874 rigs last year. “Oil shales are great, but scaling it up, that’s a big order,” Husseini, who retired from Saudi Arabian Oil Co. in 2004, said at the forum.”” (Bloomberg)

California should tighten fracking regulations, report says - “ California needs to strengthen regulation of hydraulic fracturing, according to a UC Berkeley report that identified a number of shortcomings in state oversight of the controversial practice...The report, released Thursday by the UC Berkeley Center for Law, Energy and the Environment, says that new technology could dramatically increase fracking activity in California and warns that state regulators are not equipped to handle that. “Hydraulic fracturing presents risks to our environment and human health, and must be properly regulated and controlled. This report identifies several areas where the state’s knowledge base and existing regulatory scheme are deficient,” the authors wrote. The document, released as state regulators are developing new fracking regulations and a number of fracking bills are under consideration in the Legislature, contains a number of recommendations for beefing up state oversight. Among them: Oil and gas companies should be required to provide state regulators with at least 30 days' advance notice of hydraulic fracturing activity. Energy companies should be required to disclose to the state the formula of fracking chemicals now protected as trade secrets. The state should adopt more stringent requirements for testing well integrity before fracking activity and for monitoring during the process. Fracking fluid injections should be prohibited in the vicinity of risky earthquake faults.”” (Los Angeles Times)

North America Prospect Expo in Pittsburgh infuses energy into oil, gas deals - “...The North America Prospect Expo, an annual gathering of oil and gas companies interested in swapping, selling or buying industry assets -- on the spot. The NAPE East, held for the first time in the Marcellus region this week at the David L. Lawrence Convention Center, is a giant bazaar for gas companies peddling their wares, be they a thousand acres in Ohio or pipeline right-of-way access in West Virginia. There are investment houses to finance the deals and law firms on hand to officiate the new pairings. NAPE conferences maintain a special mystique in the oil and gas industry -- the concentration of so many dealmakers ready to trade millions gives the convention floor a stock exchange energy, or at least seems to foster more conversations held out of earshot. On Thursday, the exhibition floor had become an arbiter for the larger regional market. Potential deals in Ohio outnumbered those offered in Pennsylvania, in part because the Buckeye State is home to liquids-rich parts of the Utica Shale that offer products fetching higher prices on the market. Smaller operators with maps showing heavily developed parts of Pennsylvania tried to elicit more than shoulder shrugs, while major industry players that have been shedding assets were out in full selling force...Though some deals have been known to go down on the NAPE showroom floor, it's more likely the conference offers handshakes that might lead to mergers and partnerships down the road, organizers said. "It's a mashing of a farmer's market and Wall Street," said Marty Schardt, executive vice president of the American Association of Professional Landmen, one of the four industry groups that organize the conference. The flagship NAPE is held every year in Houston, and in February attracted more than 17,000 attendees from across the world. Pittsburgh's version had 2,000 attendees, with a majority coming from Pennsylvania, Ohio and West Virginia. The organization already has committed to holding a NAPE East in the city next year. But even for a conference that one attendee was heard dismissing as "NAPE Lite," some companies pulled out all the stops. Chesapeake Energy is divesting thousands of acres in the Marcellus and Utica region, and showed off those assets with a 1,000 square-foot, two-story display that included leather couches and several tables.”” (Post-Gazette)

EU's chief science advisor gives shale gas go-ahead – “The EU’s chief scientific advisor has said that evidence allows the go-ahead for extracting shale gas, the energy source at the centre of a European policy tug-of-war. The EU executive launched a green paper on 27 March, setting out Europe's energy and climate aims for 2030, with Energy Commissioner Günther Oettinger taking a favourable position on shale gas. "I am in favour of producing shale gas, particularly for safety reasons, and to reduce gas prices," he said. "In the United States, which is a big producer of shale gas, the price of gas is four times less than in Europe." Shale gas has triggered an industrial revival in the United States, which the International Energy Agency expects to become almost self-sufficient in oil and gas by 2035. But crippling production costs, exploration closures, and government-level environmental concerns have seen the industry’s expansion in Europe waver. Climate Commissioner Connie Hedegaard has adopted a less favourable tone on shale gas, believing its extraction in Europe bears little comparison with the United States. “We do not expect that it will be so easy in Europe: geological conditions are different, and so are environmental rules and the activity of soils,” she told reporters at the launch of the Commission green paper last month. But Anne Glover, the chief scientific adviser to Commission President José Manuel Barroso, contradicted this view and gave a scientific green light to shale. Speaking at a debate on science and policy-making in Brussels on 9 April, she said: “As with all energy production, there will be risks involved whether that is wind or coal power,” Glover told the audience at the debate, organised by the European Policy Centre, a think tank. “We should not go into a denial phase. From my point of view the evidence will allow us to go ahead [with shale production]. But in terms of extraction and production there are non-scientific issues to be debated,” Glover said.”” (EurActiv)

Shale for Sale: Looking Beyond the Buzz in the Cline – “Right now, there’s a lot excitement over different shale formations across Texas and across the country. But along with excitement, there sometimes comes hype. First there was the Barnett near Fort Worth and Pennsylvania’s Marcellus. In South Texas you’ve got the Eagle Ford. North Dakota taps the Bakken. It seems like everywhere you look, drillers are finding shale formations that might be the “next big thing” for the American energy industry. (Shale formations are layers of rock that companies can sometimes drill for oil and gas using hydraulic fracturing, or fracking.) Recently the “next big thing” being touted is the Cline Shale in the Permian Basin of West Texas. The Cline Shale lies more than 9,000 feet underground and many in the energy business expect it to bring the next oil and gas boom to West Texas. But how big of a boom? The entire formation of the Cline Shale spans nearly 10,000 square miles and could have up to 3.6 million barrels of obtainable oil per square mile. But not everybody is convinced. Art Berman is an oil and gas geological consultant and prominent critic of some drilling companies. “The analogy that I like to use is the traveling circus,” Berman said. “Why does a circus have to travel? Well, because after it’s been in the town for a couple days, or a week or so, all the townspeople begin to understand that the bearded lady doesn’t really have a beard!” Berman said each new shale discovery serves as a way for some companies to inflate their stock values. So all that hype might have to do more with Wall Street than what’s in the ground. But it’s not just industry critics that are tamping down enthusiasm over the Cline. Ben Shepperd, President of the Permian Basin Petroleum Association, says there’s great potential in the Cline Shale. But, “number one, it’s not going to happen over night,” he said. “The operating community hasn’t identified [or] cracked the code on how to access it routinely,” he added… Chesapeake Energy, another big oil and gas player, actually sold most of its holdings in the Cline Shale last year. It has no plans to develop the land it still owns, according to a spokesperson. Yet West Texas communities are still abuzz over the Cline’s potential, and local companies are turning that enthusiasm into profit.”” (StateImpact Texas)

The Mississippi Lime Shale Play Is Heating Up! – “Some people can hardly spell it. Others can’t point it out on a map. And many just simply haven’t heard of it… But the Chinese and other foreign interests are snatching up as much oil-rich acreage as they can get, in this hotbed for shale production. Welcome to the next round of America’s profitable shale plays! Strap on your boots, we’re headed to the Mississippi Lime formation…in Oklahoma. Since the mid-80’s, old man nature and his wicked decline curve looked to be caning the production out of OK’s oil patch. As of January 2010 the state was producing a mere 160,000 barrels of oil per day (bpd) – down from 1984 high of nearly 500,000. Today, as of the latest production numbers from the U.S. EIA, the state has more than doubled production from its 2010 low – current output sits at 272,000bpd. Following the same path as the Bakken or the Eagle Ford, OK’s production numbers could signal a budding boom – and the wildcat profits to follow. “Oklahoma” as Reuters points out “could be on course to see the next big increase in oil and condensates production, following North Dakota and Texas.” At this point there’s one thing you have to remember: even though all shale plays are drastically different – the Monterey in Cali isn’t the Marcellus in PA, etc – the common thread amongst them all is their life cycle. As Hart Energy’s Richard Mason first brought to our attention last year, the life cycle for all major shale plays follows the same path: discovery….optimization….harvest. In Oklahoma, the energy patch has a wide breadth – what with harvested stripper well oil production, optimized natural gas production and budding action from the Woodford shale. But the most exciting play for today’s action is found in the Mississippi Lime. This formation is still in the “discovery” stage and striving for keys to optimization. And you can rest assure as those efficiencies and optimization techniques take hold a few key players will be set to cash in. But as we can tell from the oil production stats coming out of the state – some OK players are indeed moving the needle…“The Mississippi Lime play has grown from its roots in north-central Oklahoma into south-central Kansas and beyond” Hart Energy reports. “Activity is surging, with some 70 rigs at work drilling horizontal wells and hundreds of drilling permits on file. Sterling well results—some completions are in excess of 1,000 barrels of oil equivalent per day—are increasing the buzz.” At 1,000bpd, even compared to higher rates from Bakken or Eagle Ford wells (those can be well over 2,000bpd), the numbers are fantastic. And when you add in low-cost estimates on some of these wells – you’ll see that the payout could be just as good, if not better. In fact according to a report from Credit Suisse the horizontal Mississippi Lime play has a higher rate of return than the Eagle Ford and ALL other oil shale plays…As I hinted at the beginning of this article Chinese and other foreign interests are starting to pad the way for more “subsidized” drilling. China’s Sinopec recently inked a billion dollar deal with Chesapeake Energy – that’s in addition to Sinopec’s $2.2B deal with Devon in 2012. Sandridge Energy also recently signed a couple deals with Repsol and South Korea, which will also add to the subsidized drilling budget.”” (Daily Reckoning)

5 Fracking Plays With Strong Performance And Growth – “Just like two sides of one coin, although this process is bringing jobs and money to depressed areas, it has been under the scanner for related environmental and health problems. Within the US, Hancock in New York is waiting to hear if a moratorium on drilling will be lifted and outside the US, Britain has placed a ban on the process. Now here are my 5 picks in this interesting sector: Market Vectors ETF Trust (FRAK) - This is an exchange-traded fund, which targets unconventional oil and gas industry including shale oil, shale gas, etc. Investors looking for diversification can consider this ETF, which includes around 40 companies from US, Canada and Australia. Go for this if you want the diversification. C&J Energy Services (CJES) - This company is an independent provider of hydraulic fracturing, coiled tubing, and pressure pumping services. 73% of its revenue comes from hydraulic fracturing services as it manufactures equipment needed for the process and also provides services like stimulation and work over operations for existing wells and overlooking well completions.”” (Seeking Alpha)

Fracking Resumes Less Than a Month After 200,000+ Gallon Spill – “Last month, seven homes in Wyoming County, PA had to be evacuated when a natural gas drilling rig had a blowout, and gallon after gallon of fracking waste-water began spilling out uncontrollably. Now, not even a full month later, fracking has resumed on the site with the full endorsement of the Pennsylvania Department of Environmental Protection. Even if promises of improved practices are kept, this is a prime example of why there needs to be a moratorium on fracking until it can be researched enough to discover how to do it with guaranteed safety – if it can be done with guaranteed safety at all. On March 13, a fracking well operated by Carrizo Oil and Gas out of Texas in Washington Township, Wyoming County, PA malfunctioned and began spewing out dangerously chemical-laden fracking fluid at a rate that peaked at 800 gallons per minute. The spill lasted for hours and when all was said and done, about 227,000 gallons of fracking fluid had spilled. Fearing that natural gas building up in the well could lead to an explosion, workers from Carrizo went to homes within 1,500 feet of the well to warn them about the situation, and seven homes were evacuated. To their credit, Carrizo seems to at least understand how public relations works, and is treating the effected families pretty well. They’ve been providing them bottled water and are testing their water on an ongoing basis, which one of them especially appreciates in light of having relatives who had much worse experiences with fracking companies. Of course, that means we’re relying on the very gas company that caused the spill to tell us whether or not the water is contaminated, so it’s far from an ideal situation. According to StateImpactPA, Carrizo has 107 active wells in PA, and has paid a total of $20,000 for nearly 50 violations in the state. Now, after citing the company for yet another violation for letting spilled fracking fluid “[flow] into a ditch that receives shallow groundwater in a wetland” during this spill, the Pennsylvania Department of Environmental Protection has given them permission to start fracking at the same site again. They resumed on Friday, April 5, less than a month after the spill. The company says they will be using safer practices in the future per the request of PA DEP, but their announcement doesn’t include a single detail as to what exactly they’ll be doing differently. As with the water testing, we’re expected to take their word on it….And the situation in Washington Township is a great illustration of the fact that this is a process that isn’t sufficiently regulated, so there should be a moratorium while further research is done. It seems to have worked out okay for these families this time, but what if their water had become contaminated? They were provided with good drinking water, but they would be bathing in water laced with chemicals from fracking fluid that could have terrible, life-long consequences for their health. And what if the well had exploded, as workers feared it would? Not only could people have been killed, but the spill could have been much, much worse, with untold damage done to the environment and the people living in it. Things only turned out as comparatively well as they did through sheer luck, and most people aren’t going to want to count on sheer luck when the water they and their family drink and bathe in is at risk.”” (Keystone Politics)