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)

Petrobras Says Argentina Needs Clear Rules for Shale Development – “Petroleo Brasileiro SA (PETR4), the largest oil company in Latin America by market value, said Argentina needs clear rules to foster investments if it wants to develop its unconventional oil and gas resources. A clear investment environment is needed to lower “the risks” of investing in production of tight and shale gas and oil in Argentina, Paulo Aquino, the Rio de Janeiro-based oil producer’s executive manager for Latin America, said in a presentation at the Arpel conference in Punta del Este, Uruguay. Petrobras, as the company is known, is looking to increase production of so-called unconventional resources in Argentina, he said. Argentina last year nationalized YPF SA (YPFD), the country’s largest oil company, by seizing 51 percent of its shares from Repsol SA in an attempt to reverse years of declining output. YPF holds the bulk of Argentina’s shale resources. The Vaca Muerta formation in southern Argentina is estimated to hold at least 23 billion barrels of oil equivalent, according to a survey by Ryder Scott. Petrobras Argentina SA, as the Brazilian state-controlled oil producer’s local unit is called, finished drilling its first shale oil well in March at Vaca Muerta. While the company is analyzing results from the well, it’s already producing tight gas after having drilled 29 tight gas wells in three basins, Aquino said.”” (Bloomberg)

California Senate panel approves bill to regulate 'fracking' – “A bill to more tightly regulate the drilling process called hydraulic fracturing cleared a Senate committee Tuesday… Skeptics argue that fracking could endanger public health by contaminating public water supplies. Sen. Fran Pavley, D-Agoura Hills, the author of Senate Bill 4, called it a needed mechanism for holding the energy industry accountable. "We need to, at the minimum, ensure that someone, some public agency, is monitoring the public health and safety of Californians," Pavley said. The legislation, which passed the Senate Natural Resources and Water Committee on a 6-2 vote, would require the energy industry to disclose more information about the amount of water and types of chemicals it uses. It also would set up a permitting process, create a framework for tracking wastewater and dictate that communities are notified 30 days in advance of a new well being constructed. Energy industry advocates called the bill unnecessary, noting that the entity tasked with monitoring fracking – the Department of Conservation's Division of Oil, Gas, and Geothermal Resources, or DOGGR for short – has written draft regulations and started holding public hearings. But lawmakers supporting Pavley's bill accused DOGGR of delaying and then releasing vague, anemic regulations that would accomplish little. "When it comes to whether or not we should let DOGGR lead, I think they have relinquished their right," said Sen. Hannah-Beth Jackson, D-Santa Barbara, who voted for the bill. Several environmental groups, including the Sierra Club, the Natural Resources Defense Council and the Environmental Working Group, registered their support. But they also raised concerns about how robust the bill's disclosure requirements are when it comes to the chemical cocktails energy companies use to frack. The industry has argued that those recipes are protected trade secrets. As the bill is currently written, energy companies would need to disclose the chemicals they are using to DOGGR, but some information would remain publicly inaccessible trade secrets. The bill would allow health professionals to obtain information about the chemicals used, but they would be bound by confidentiality rules. Those provisions led the Physicians for Social Responsibility-Los Angeles, which backed the general principle of regulating fracking, to oppose the legislation. "While it does address some of the environmental issues, it completely shortcuts and sidetracks the issue of public health," Angela Mezaros, the organization's general counsel, testified at Tuesday's hearing. The bill would also direct the California Natural Resources Agency to choose someone to conduct an environmental impact report. If that study is not completed by Jan. 1, 2015, DOGGR would be prohibited from issuing permits, effectively imposing a statewide moratorium on fracking. Energy industry representatives said fracking opponents could use that deadline as a cudgel, dragging out the study in an effort to curb fracking. "I think unfortunately sometimes we're looking for studies to match what our predisposed" beliefs are," said Rock Zierman, chief executive officer of the California Independent Petroleum Association.”” (Sacramento Bee)

Shale Gas Boom Creates New Challenges for Regulators – “The effects of transporting tar sands oil via the infrastructure currently in place are not the only questions the Pipeline and Hazardous Materials Safety Administration will address in the coming months. The regulatory agency also must grapple with the new pipeline networks that will be needed to carry natural gas from booming shale plays to market. “From the discovery of vast energy shale deposits, which will require the creation of additional infrastructure, to the maintenance and rehabilitation of the infrastructure already in place, the nation’s infrastructure needs are growing and changing,” the agency’s administrator, Cynthia L. Quarterman, said at a field hearing in January on the implementation of the 2012 pipeline safety law (PL 112-90). The updated statute authorized the agency to hire more pipeline inspectors and to increase the maximum amount of penalties and fines assessed for safety violations. But the law did little to change how the pipeline administration manages the thousands of miles of transmission and gathering lines, much of which are unregulated, that move natural gas under the country’s surface. Of the more than 200,000 estimated miles of natural-gas-gathering pipelines, the pipeline administration regulates roughly 10 percent of them, according to a March 2012 Government Accountability Office report. Also, the agency generally doesn’t oversee the gathering lines — which collect gas or oil from wellheads for transport to larger transmission lines — located in rural areas with low population density. Quarterman said she believes that the most recent update to the pipeline safety statute provides “a solid foundation” for regulators working to make the U.S. system accident-free. But Senate Commerce, Science and Transportation Chairman Jay Rockefeller, D-W.Va., who has noted that he wanted more-stringent requirements for pipeline operators to be included in the final product, is taking a more cautious tone as he monitors the law’s implementation. “Whether they carry oil or, like the pipeline that ruptured in my state of West Virginia, they transport natural gas, pipeline accidents can have significant consequences,” he said in a statement, referring to a natural-gas transmission line that exploded in December.”” (Roll Call)

Shale Gas Isn't a Low-Emissions Fuel – Yet – “Too much valuable methane from natural gas is leaking into the atmosphere, hurting the bottom line as well as the climate. We know how to stop it. It’s cheap to do, and it can pay for itself. Natural gas production in the United States has been booming—and is expected to keep growing. Already, there are more than 500,000 wells and 300,000 miles of pipeline in place. In 2012, U.S. producers brought more than 25 trillion cubic feet of natural gas to market. And, by 2020, the United States is projected to be a net exporter of natural gas. Natural gas is here to stay. Its low price is spurring investment and jobs, and increasing energy security. But it’s important to get it right…Without methane leakage, natural gas would create only about half the greenhouse gases per unit of energy as coal. Yet, methane is 72 times more potent than CO2 measured over 20 years, which is particularly important given that climate change is happening even more quickly than many models have predicted. (Methane has around 25 times more warming potential than CO2 over a 100 year timeframe.) At around three percent leakage, natural gas becomes more harmful than coal in the near term. WRI recently conducted an analysis to find out what we know about U.S. methane emissions from natural gas and what can be done to rein them in…According to the most recent estimate from EPA, more than 6 million metric tons of fugitive methane leaked from U.S. natural gas systems in 2011. In terms of climate impacts, that’s equivalent to 432 million metric tons of CO2 per year over a 20 year time horizon—that’s more than CO2 emissions from all sources in Australia in 2011. It’s also more greenhouse gases than from all U.S. petroleum refining, iron and steel, cement, and aluminum manufacturing facilities combined. Methane leaks are estimated to be around two to three percent of total production – though there is troubling uncertainty around the total. The biggest source of emissions is from new wells. Starting up a new gas well is like popping a Champagne bottle: it releases gas under pressure quickly and with force. Emissions can also leak out through the production process, if proper safeguards are not in place. Shale gas is not only expanding in the United States, it’s on the rise around the globe. Large natural gas reserves have been found in China, South Africa, Turkey, Poland, the United Kingdom, and elsewhere. According to official Chinese estimates, the country may have 886 trillion cubic feet of shale gas—or nearly three times the United States. Reaching the shale potential in China will take additional technology and consume huge water resources— significant challenges to be overcome. Some countries are moving more cautiously. South Africa has just recently lifted a ban on hydraulic fracturing, which had been imposed due to water and air pollution concerns. France currently has a ban. And the European Union is developing a regulatory framework to responsibly address the risks. The good news is that we have the technologies and know the policies to rein in these emissions. In 2012, the U.S. Environmental Protection Agency passed emissions standards for the oil and gas industry. According to WRI, these will cut the greenhouse gas emissions from natural gas—mostly methane—by 13 percent by 2015 and up to 25 percent by 2035…Curtailing methane emissions makes good sense from both an economic and climate perspective. Many of the investments in emissions reduction technologies can be paid back in less than three years. Indeed, reducing leakage could save industry more than a billion dollars in lost methane. Some companies and environmental groups, including major players like Shell and the Environmental Defense Fund, are working together to create best practices. By demonstrating that cost-effective technologies are available and will get more methane to its destination, other companies will hopefully decide to follow…With more than 6,000 natural gas producers in the U.S. alone, it’s important to have smart policies -- both cost-effective and flexible -- to ensure that industry has incentives to limit methane emissions.”” (Bloomberg)

China's quest to harvest shale gas (VIDEO) – “The village of Xinchao, in China's eastern province of Zhejiang, seems an unlikely place to start an energy boom - but resident have learnt that beneath them lies a vast potential supply of gas. China's bold plan is to go from an absolute beginner to one of the world's biggest producers of shale gas within a decade, as John Sudworth reports.” (BBC)

Judge rules administration overlooked fracking risks in California mineral leases – “(Reuters) - A federal judge has ruled the Obama administration broke the law when it issued oil leases in central California without fully weighing the environmental impact of "fracking," a setback for companies seeking to exploit the region's enormous energy resources. The decision, made public on Monday, effectively bars for the time being any drilling on two tracts of land comprising 2,500 acres leased for oil and gas development in 2011 by the Interior Department's Bureau of Land Management in Monterey County. The tracts lie atop a massive bed of sedimentary rock known as the Monterey Shale Formation, estimated by the Energy Department to contain more than 15 billion barrels of oil, equal to 64 percent of the total U.S. shale oil reserves.…The issue came into sharp focus in California last month when Governor Jerry Brown, who has long touted his record as an environmentalist, said the state should consider fracking technology to develop its shale reserves as a way of reducing reliance on imported oil. U.S. District Judge Paul Grewal in San Jose ruled that the federal government erred, and violated U.S. environmental law, in declining to conduct a full-fledged environmental impact study of its oil leasing for the Monterey Formation. JUDGE FINDS RISKS 'COMPLETELY IGNORED' Grewal held that BLM's analysis was flawed because it "did not adequately consider the development impact of hydraulic fracturing techniques ... when used in combination with technologies such as horizontal drilling." "The potential risk for contamination from fracking, while unknown, is not so remote or speculative to be completely ignored," Grewal wrote. But the judge stopped short of ordering the leases canceled, as sought by environmental groups. Instead, he ordered the parties to confer and either submit a joint plan of action if they can agree or prepare to argue their respective cases for a remedy if they cannot. "In any event, it is clear from the order and the general requirements of the law that BLM cannot allow drilling on the leases until and unless it completes a more thorough environmental review," said Brendan Cummings, a lawyer for the Center for Biological Diversity, which brought the suit with the Sierra Club. He hailed the decision as a milestone in efforts to seek greater scrutiny and regulation of fracking. "It's the first federal court opinion we're aware of that explicitly holds that federal agencies have to analyze the environmental impacts of fracking when carrying out an oil and gas leasing program," Cummings told Reuters. But oil company representatives played down the ruling's significance, saying the judge took issue only with the BLM process, not fracking as a method of recovering oil. "There are many hurdles that producers have to go through, and oftentimes they add delay and cost to energy production," said Tupper Hull, a spokesman for the refinery group Western States Petroleum Association. "Hopefully the court will ultimately allow the lease to go forward and production to take place," he said.”” (Reuters)

Doctors can help make fracking safer, if states lift gag orders on them – “Let’s all agree on two things: First, energy independence is good for our country. And second, clean drinking water is also good for our country. The development of America’s huge stores of natural gas have given us a remarkable opportunity to accomplish the former. In particular, the process of “fracking” has made it possible to tap increasingly more of our huge natural gas reserves…The process of fracking has huge potential, and not only for drillers. Consumers who have paid close attention to their gas bill lately have surely noticed that the glut of natural gas has lead to a drop in gas prices. And this comes at a time when everyone could use a break on fuel prices. The fact that it’s homegrown means that there are no foreign entanglements—it creates domestic jobs and reduces trading deficits. Natural gas even burns cleaner, and emits less CO2 than does gasoline. The tremendous upside of this cheap, clean, home-grown energy source has lead to a boom in the industry. Thousands of wells are sprouting up across the country, and most are using the the process of fracking…But the rush to cure America’s energy woes has been, well, rushed. One has only to look at the results of our attempts to harvest corn ethanol as an energy source to see the law of unintended consequences in effect. In a climate where even a modicum of caution would be wise, both the government and the industry have proceeded with what can only be thought of as reckless abandon, summarily sweeping aside questions of safety and health concerns. This was typified in 2005, when the federal government passed what is known as the “Halliburton loophole,” wherein frackers are exempt from significant Environmental Protection Agency regulation. And that’s where we physicians come in. In the rush to create a business-friendly environment for drillers, state governments have laid out the red carpet by passing laws to protect proprietary information about the content of fluids being pumped into gas wells during the fracking process. In many states, if physicians suspect water contamination, they may request to know the materials, but must first sign a confidentiality agreement and thus effectively bar themselves from disclosing any of this potentially very important information to others. Imagine being the physician in Dallas whose patient was exposed to fracking fluid and developed renal failure, or the dermatologist in Pennsylvania whose patients live near a well and contracted non-healing skin lesions after their water was contaminated. In such a situation, it would be extremely wise to exchange information with other physicians, discuss cases with other consultants, and inform the public of potential threats. The medical community needs to disperse this kind of information through word of mouth and published literature. Forcing physicians to sign confidentiality agreements limits the transmission of such information. Even if such communication were technically legal, the confusion and fear created by such laws makes many uncertain about whether or not they are allowed to disclose such information. I do believe that state governments are trying to do the right thing by facilitating the procurement of what appears to be a cheap, abundant, and domestic energy source, and increasing their tax base at a time when it is sorely needed. However, it should be pointed out that government is first and foremost responsible for the people they serve. The process of fracking is being looked at by the public with increasing scrutiny, as cases of contamination by fracking fluid and natural gas continue to surface. The current approach fosters an environment of fear and suspicion, and heightens the perception that drillers do not take public welfare into account. If the scientific community was allowed greater access to information, the causative agents could be identified and potentially replaced. And such an approach could prove beneficial for drillers, too. There are indeed historical precedents for this type of relationship. The study of lead and freon led to their subsequent removal from gasoline and refrigeration, and yet both industries adjusted and continue to flourish today. Drilling companies with poor track records should be weeded out and replaced by companies with more responsible techniques. This process is the American way, or at least it should be. It is taking place in a number of different fields, including the medical community, and the drilling community should be treated no differently."" (Quartz)

Argentina gives up more shale gas – “CALGARY, Alberta, April 9 (UPI) -- Canadian energy company, Americas Petrogas, announced it made a shale natural gas discovery onshore in the Vaca Muerta play in Argentina. The company said it discovered natural gas by hydraulically fracturing the Los Toldos I block in the Vaca Muerta shale formation. It said it was able to produce as much as 3.2 million cubic feet of natural gas during initial production tests. Regional Managing Director Guimar Vaca Coca said the find is situated less than a mile away from a major natural gas pipeline… YPF said the deal is for shale reserves in more than 10,000 acres in Neuquen province. The U.S. Energy Department's Energy Information Administration estimates that Argentina has 774 trillion cubic feet of technically recoverable shale gas resources, the third most in the world.” (UPI)

The geographic proliferation of shale gas and tight oil is inevitable – “This question keeps getting repeated: “Will shale gas and tight oil technologies proliferate beyond North America?” Of course they will. There is no precedent for game-changing innovations in any business to respect territorial boundaries. So some remaining questions are, under what conditions will shale gas and tight oil be developed in other countries, how long will it take, and where first? With respect to necessary conditions, it seems Texas has the right stuff. At a major conference in Dallas last week, a few thousand exuberant U.S. oil and gas executives were gushing over recent production growth from unconventional resources. North Dakota’s Bakken seems like yesterday’s news as attention now shines on the productive oil potential of the legendary Texas Permian Basin. The stock, U.S. oil man’s answer to what drives such domestic exploration frenzy is the American principle of landowners’ mineral rights – if you own the land on the surface you also have title to the oil and gas beneath your feet. This alignment of financial interests between private landowners and oil companies lubricates the wheels of capitalism like nowhere else. Ergo, the converse argument goes, we are unlikely to see meaningful shale gas or tight oil development in other parts of the world, where no such subsurface benefits accrue to the landowner. But there are flaws in this line of thinking. For one thing, there have been plenty of game-changing innovations in oil and gas exploration and development over the past 150 years – rotary drilling, offshore platforms, 3D seismic to name a few – all of which have been put to work around the world. Further, Canada's minerals are largely the property of the Crown, yet the country has grown to be the fourth-largest producer of oil and gas in the world and has readily embraced, and in fact helped pioneer, innovations in unconventional resource development. Beyond North America, countries with state-owned oil enterprises and limited property rights are also places that have developed the most prolific oil and gas production; Russia and Saudi Arabia come to mind. Although property rights are a debatable catalyst, germinating a shale gas or tight oil revolution does require a special condition that Canada and the U.S. can claim a lead in (for the moment): An abundance of adaptable infrastructure… Although the conditions may not seem aligned in other countries that have shale gas and tight oil potential, it’s only a matter of time before large producers wake up. They’ve been asleep, because they haven’t felt the most important condition of all: Competitive pressure. To this point, the impact of aggressive unconventional resource development has remained bottled up in Canada and the U.S. Big oil and gas producers around the rest of the world have been immune to North American price pressures and the need to compete for market share. This is likely to change over the next five years as LNG tankers start to sail. Similarly, as more domestic oil displaces American imports, pressure will be felt by big global producers to respond. Like any business with stale and unchallenged processes, it takes an assault on market share to launch innovation. There is nothing that speeds up the adoption of new technologies and processes faster than the heat of global competition. When? The proliferation of shale gas and tight oil technologies will happen well before the end of the decade. And when the rest of world starts producing shale gas and tight oil in meaningful quantities, the next question that will be repeated will be, “What now?” (Globe and Mail)

State could provide Latins lucrative trade benefits – “What does Pennsylvania have to offer Brazil and Chile, nations whose economic rise has drawn numerous U.S. delegations to seek trade and investment at their sprawling urban centers? Through more than a week of meetings, starting today, Gov. Tom Corbett and business leaders hope to convince their South American counterparts that the answer is lengthy and compelling. There is -- Mr. Corbett plans to say -- a location within reach of much of the North American population, with relatively low energy costs and an educated workforce: a port, Philadelphia, that already is the top arrival point for fresh fruit from the two nations. He also will point to a source of natural gas and its byproducts in the Marcellus Shale… Public Utility Commission chairman Robert Powelson, a member of the delegation, said Pennsylvania energy production, such as that of the Marcellus Shale, could lead to exports both of natural gas and byproducts such as ethane. "The demand for those ethanes is huge, and it's huge in South America," he said. "The demand for natural gas exports to power new power plants is huge right now.” (Post-Gazette)

Shale-rich Spanish region to vote to ban fracking – “(Reuters) - Lawmakers in Spain's northern Cantabria region are expected to ban on Monday hydraulic fracturing on environmental concerns, shooting down the central government's hopes for a project to boost jobs in a region believed to be rich in shale gas. Spain, battling a deep recession and high unemployment, imports about 76 percent of its energy needs and the technology to extract shale gas, known as fracking, could help relieve its foreign dependence on oil, coal and gas. Early estimates indicate Spain has large shale gas reserves, but environmentalists have voiced concerns over the safety of the technique, which involves injecting water and chemicals at high pressure into underground rock formations. Cantabria's ruling People's Party (PP), which has an absolute majority in the regional parliament, has proposed a law to ban the practice. The bill is expected to pass with unanimous support from all political parties in the Cantabrian parliament, in a vote at around 1600 GMT on Monday, a PP source said on Monday. "In Cantabria, there is a very large social movement against fracking... the bill will be passed unanimously by the three parliamentary groups. The region is very small and highly populated," the source said. However, at a national level, the PP has voiced support for hydraulic fracturing as long as it complies with environmental rules. The ruling PP, which controls the Spanish parliament, could seek to appeal or overturn Cantabria's ban…"Spain's significant reserves, if technically recoverable, will transform its economy at a time when the country is struggling with a burgeoning debt and has been forced to adopt austerity measures," the group says. Although there is no reliable data available, some analysts say Spain's shale gas reserves could be as high as 1.4 trillion cubic metres, enough to cover European Union demand for around three years.”” (Reuters)

BP-Backed Skyonic Poised for Carbon Capture Funds on Shale Boom – “Skyonic Corp., a carbon-capture technology developer with investors including BP Plc (BP/) andConocoPhillips (COP), is about to obtain about $119 million to fund its first commercial project, at a Texas cement plant. The sum, $80 million in loans and $39 million in equity, will support construction of Skyonic’s $125 million venture to gather 75,000 metric tons of carbon dioxide emissions a year from Capitol Aggregates Inc.’s cement plant in San Antonio, Skyonic Chief Executive Officer Joe Jones said in an interview in London. The Austin-based company declined to give further details ahead of a signing for the funds. Skyonic plans to profit from global efforts to curb CO2 emissions using technology to trap and “mineralize” the gas into chemical byproducts to sell. Countries such as the U.K. and U.S. are promoting methods of capturing pollution from factories and power plants for underground storage or refining into products. Carbon capture and storage is yet to operate with power generation on a commercial scale. “Our process produces hydrochloric acid, which is very important because it feeds the shale rush,” Jones said…Skyonic’s process also produces sodium bicarbonate or baking soda that it will initially sell to the animal-feed market. Skyonic has 10-year offtake agreements in place for its products, Jones said. Skyonic’s SkyMine technology will curb CO2 emissions from the Capitol plant by about 15 percent by treating a portion of the facility’s flue gas, he said. The process can remove more than 90 percent of emissions from the gas it treats and Skyonic has tested it at three pilot facilities. The company already received $9 million from investors including Northwater Capital Management Inc., ConocoPhillips and BP for the plant, as well as $28 million in grants from the U.S. Department of Energy. The facility will be in full production by the end of 2014. The company is in discussions with groups in Canada, Russia and a Chinese steel company over potential partnerships for the technology, which also eliminates sulfur dioxide and nitrogen oxide, causes of acid rain, from burning fossil fuels. Skyonic is developing a further version of the process called SkyCycle that reduces the energy expended to carry out the process, known as the energy penalty.”” (Bloomberg)

India seeks to cut energy reliance as fracking debut nears – “NEW DELHI -- India will allow explorers including Oil & Natural Gas Reliance Industries to produce shale oil and gas for the first time, as Asia's second-biggest energy consumer seeks to cut reliance on imports. Under a new policy aimed at boosting domestic output of fossil fuels, companies will be allowed to extract oil and gas from shale rocks in more than 250 blocks that the government has already given out, said Vivek Rae, the top civil servant in the oil ministry. The new rules will allow ONGC, the nation's biggest, to start shale output almost immediately and in "substantial quantity" in about three years, chairman Sudhir Vasudeva said. India, which currently doesn't allow exploitation of shale rocks, is trying to emulate the United States., where a boom has reinvigorated industry and is leading the world's largest economy toward energy independence. The technology that requires drillers to smash rocks, forcing millions of gallons of water and chemicals through cracks, may help Prime Minister Manmohan Singh meet his goal of slashing the energy import bill by 50 percent in seven years and to zero by 2030, even as global regulators assess pollution risks from hydraulic fracturing, or fracking. "We want toget the process started, to enable companies to at least start producing from fields where they're already drilling for conventional oil and gas," Mr. Rae, the oil secretary, said in an interview. "This is the first phase, and we'll later open up more areas." The oil ministry plans to take the new shale gas policy to Mr. Singh's Cabinet for approval in about a week, he said. The government will later auction blocks specifically for shale oil and gas production, he said, without elaborating. Mr. Singh's administration is seeking to revive domestic energy production as import costs surged to a record $140 billion in the year ended March 31, 2012, or about 8 percent of gross domestic product. Securing fuel supplies is key to restoring the pace of economic growth to a targeted 10 percent, from an estimated 5 percent this year, the slowest in a decade. India may still be at least three years away from large-scale commercial production from shale rocks as explorers study data in their fields, while output from these formations is cutting imports in the United States and companies including Royal Dutch Shell and France's Total explore the fuel in China… India holds 6.1 trillion cubic feet of technically recoverable shale gas reserves in three basins, the U.S. Geological Survey estimated in a report in January 2012. That was less than 10 percent of the 63 trillion cubic feet estimate made the previous year, by the U.S. Energy Information Administration in a report. "The USGS study was limited to three basins in India and the real potential is probably higher than that," Mr. Vasudeva said. "We are in the process of examining and validating them." ONGC found shale gas at a well in India's West Bengal state, according to a Jan. 27, 2011, statement. The company signed an agreement with ConocoPhillips in March 2012 for developing shale resources in India and North America. Higher oil imports are a reason India's current-account deficit rose to an unprecedented $32.6 billion in the three months to Dec. 31, or 6.7 percent of gross domestic product. "We need to do all we can to reduce this import bill and help boost the economy," Oil Minister Veerappa Moily told reporters in New Delhi March 24. "Increasing exploration to find more oil and gas is the starting place."” (Bloomberg)

Question for the shale industry: do you want to frack or not? – “A US industry-environmental coalition says it has established a gold standard for safety and transparency in shale gas drilling, which has triggered public protests on both sides of the Atlantic. Bad actors will be shunned, the group suggests, when communities insist on its seal of approval before green lighting a drilling project. The coalition, comprised of top-tier players including Chevron, Shell, the Environmental Defense Fund and the Clean Air Task Force, has understood a basic calculus—the right to produce shale gas and oil is far more valuable than any perceived reward for sticking to your guns. Only, it hasn’t. While the initiative, announced Mar. 21, goes some distance toward easing worries about hydraulic fracturing (or “fracking,” as it’s commonly known), the method used to drill shale gas and oil, it misses what should be the key point: transparency. If this were oncology, we would be hearing the terrific news that part of the tumor was removed, and an admonition to ignore the rest. The initiative demonstrates again both the industry’s continued inability to fully confront the main challenges of fracking, and the environmental sector’s amateurism. The plan shows that neither group has truly come to grips with the stakes of failure: that the widely expected energy, economic and geopolitical revolution could be seriously stunted. The first thing to do is to disregard ideologically driven extremists on both sides. That would include, for the environmentalists, the Sierra Club, which after the coalition announcement railed yet again against “our continued reliance on dirty, dangerous fossil fuels.” For the industry, it would be the American Petroleum Institute, the industry’s leading lobbying group, which suggested that it can take care of standards-setting, and does not require outsiders’ help. Next, take a look around the world. On April 4, Romanians protested fracking plans by Chevron. The parliament in Spain’s Cantabria region expects to vote April 8 to suspend fracking. Opposition continues in the UK, not to mention around the US. In other words, the shale drilling industry is under serious fire. People worry about groundwater, earthquakes, air pollution and a general feeling of unease. If they wish to realize shale’s potential, as we heard in a March 25 speech by Maria Van der Hoeven, director of the International Energy Agency, drillers must address “legitimate public concerns [about] environmental and social impacts” of their activities…When you are secretive, you create distrust. In the case of the fracking, suspicion arises from the industry’s reluctance to fully disclose what it is putting down the well in the form of drilling and fracking fluids—specifically, whether these concoctions contain toxins that could poison groundwater. The industry’s reasoning in only partial disclosure is defense of its trade secrets. Since an oil service company’s bottom line depends in part on fractional formulaic differences in the products it uses and sells, keeping these secrets means protecting its seed corn, in some cases perhaps hiding that its ingredients aren’t all that special. So what you get is almost full disclosure at websites like fracfocus.org, which the industry routinely cites as its answer to calls for transparency. In the case of the new coalition announced last month, when there is an issue of trade secrecy, its Performance Standard No. 7 pledges to disclose the family name of a chemical. But Deborah Gordon of the Carnegie Endowment, a former chemical engineer at Chevron, says that is not sufficient—chemicals within the same family can have very different qualities. For instance, two aldehydes are used in fracking—acetaldehyde (a corrosion inhibitor that is listed as a probable carcinogen) and glutaraldehyde (a biocide that is regarded as not carcinogenic.) “Beyond carcinogenicity, aldehydes are just one example that there can be very different properties and acute health impacts from chemicals within the same chemical class,” Gordon told me. I spoke with Andrew Place, who is an officer at a drilling company called EQT and leads the coalition. Place said that when a trade-protected additive is considered toxic, its ingredients, and not just its family name, will be disclosed on the coalition’s website. But this requirement–that toxic ingredients be listed even if they are a trade secret–has so far not been published anywhere as far as I can tell. On March 31, Place said he would check back with the rest of the coalition to make sure he understands the trade-secret provision correctly. As of Friday, April 5—Place was unable to confirm his reading of the rules…Meanwhile, moderate environmentalists have too easily bought into the almost-transparent block. Matt Watson, who works on the issue for the Environmental Defense Fund, noted that companies already disclose fracking fluid ingredients that are “nasty.” He said that a high bar should be raised to prevent abuse of the trade secrets claim, but that ”we recognize the validity of protecting legitimate trade secrets.” But even with that caveat, Watson misses the point. It is this: Is it more valuable to be able to frack, or maintain a trade secret in drilling fluids? Unless there is full disclosure, a segment of the public is going to remain suspicious, even if there is nothing in the fluid to be suspicious about.”” ” (Quartz)

Fracking support becomes bipartisan as both parties see economic benefits – “As he weighs whether to allow fracking in New York, Gov. Andrew Cuomo is under intense pressure from the oil and gas industry, Republican lawmakers and long-struggling communities eager to see the drilling technique jump-start the state’s economy. But last week, the governor came under pressure from another source — a fellow Democrat. In a strong endorsement of hydraulic fracturing, former Pennsylvania Gov. Edward G. Rendell urged Mr. Cuomo to “do as I did: Step back and look at the facts. See the bigger picture.” In a piece for the New York Daily News, Mr. Rendell touted the benefits of fracking that he saw firsthand as drilling in the Marcellus Shale helped revive long-depressed towns in the western and northern reaches of Pennsylvania. It’s just one example of how fracking has earned unusually broad support from across the political spectrum, breaking down partisan barriers in surprising ways…Fracking’s loudest and most effective cheerleaders aren’t just from inside the industry or from the Republican Party. Colorado Gov. John Hickenlooper, a Democrat, also has become a champion of the process, as have Democratic members of Congress from oil- and gas-producing states. Leading Democrats who have offered kind words for fracking include California Gov. Jerry Brown and Sen. Heidi Heitkamp of North Dakota, whose state is one of the nation’s prime beneficiaries of the revolutionary drilling technique. President Obama’s pick to head the Energy Department, Massachusetts Institute of Technology physicist Ernest Moniz, has come under fire from environmental groups in large part for his strong backing of fracking and his argument that natural gas produced by fracking can serve as a “bridge fuel” to a greener future. “This is actually a very interesting situation for the Democratic Party. There are still Democrats who believe that the party is not just a party of environmentalism and feminism,” said Robert Nelson, a public policy professor at the University of Maryland who specializes in environmental issues. Some Democrats think the party “is actually a party of jobs and good management and sensible environmental improvement,” he said…Mr. Hickenlooper is one Democrat searching for a balance between environmental protection and energy production, and he has overseen dramatic increases in that production since he became governor. Mr. Hickenlooper also defended fracking in front of Congress and sued at least two Colorado towns that have tried to ban the process through local ordinances. Last week, Mr. Hickenlooper took to a debate stage at the University of Denver to defend fracking and the state’s right to overrule local governments that want to curb the process in their jurisdictions. Like Mr. Moniz, he also made the case that fracking for natural gas will help the U.S. transition from coal and its heavier carbon footprint. “Inexpensive natural gas is the best opportunity we have to transition to a greener economy,” Mr. Hickenlooper said. Mr. Rendell and Mr. Hickenlooper, like all other Democrats who back domestic oil and gas development, certainly aren’t arguing for lax environmental regulations. Colorado’s fracking regulations, for example, are among the toughest in the nation…Even the Obama administration, a champion of renewable energy, has become increasingly supportive — at least in word — of domestic oil and natural gas exploration. The president’s pick to lead the Interior Department, Sally Jewell, worked in the oil and natural gas industry. She told Congress that, decades ago, she personally helped frack a well. Some liberals have attacked Mr. Moniz for his support of fracking. “The U.S. cannot afford to have a puppet of the oil and gas industry helping to shape energy policy. It would be akin to appointing the CEO of a fast-food chain to draw up the next food pyramid — completely inappropriate,” said a statement last month from Wenonah Hauter, executive director of the environmental group Food & Water Watch. Said the University of Maryland’s Mr. Nelson, “In nominating [Mr. Moniz], the Obama administration clearly was making a statement that gas was going to be central to their energy strategy.” Fracking has started to divide the environmental movement, a core constituency of the Democratic Party.”” (Washington Times)

Southern Illinois counties seeing fracking rush – “ST. LOUIS -- Blessed with natural resources but never enough jobs, southern Illinois counties have begun sampling the fruits of a land rush linked to a debated drilling practice that speculators believe can tap elusive oil and natural gas thousands of feet underground. Hundreds of thousands of dollars in fees have flowed into county coffers from a stream of "land men," often out-of-staters who converged in recent years to scour title records for prime parcels for exploration. County clerks funneled much of that windfall into digitizing bulky, age-yellowed record books that took a toll from all the frenzied searches. A coffee shop owner credits the visitors with saving her business in Wayne County's tiny Fairfield. The county's finance board leader says he's seen more locals sporting new vehicles and spending more on items at auctions, thanks to land deals tied to the drilling push. Locals believe that the best is yet to come. But, as lawmakers in Springfield, the capital, argue about potentially ground-breaking regulations that would facilitate the practice of hyrdraulic fracturing, or "fracking," it's difficult to determine how much of the region stands to benefit. Industry officials say at least 17 counties -- perhaps a sixth of the state -- could see some activity, and that landowners already have leased perhaps half a million acres. "Once they hit a well, everybody and their dog will be in here drilling," said Steve Ehrhart, head of the finance committee in Wayne County, which has been one of the epicenters of the land speculation. For many in the region, where oil rigs dot the landscape and coal mines long have been king, there's broad hope of bigger financial gains from a drilling process they hope sweeps in soon, using high-pressure mixtures of water, sand or gravel and chemicals to crack rock formations and release trapped oil and natural gas. Illinois Gov. Pat Quinn and industry groups say the new drilling could create as many as 40,000 jobs, by some estimates. Many counties in this often-struggling, largely rural region say they could use the jobs they're convinced would come from the drilling itself, the building of fences and roads, and the related trucking…rad Richards, the Illinois Oil and Gas Association's executive vice president, said the estimate of a half-million acres leased for future drilling was conservative. Energy companies must file their leases with the counties, but many may be waiting for competitive reasons. Because they're not kept in one central location for the state -- along with the fact that leases are filed manually rather than electronically -- it's difficult to easily discern how much acreage is under lease.”” (Associated Press)