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Oil and Gas Roundup — May 1

May 01, 2013
TOPICS: In the news

Methane study, EPA debunk claims of water pollution, climate change from fracking

After a 16-month investigation, state regulators Monday said that natural gas fracking, contrary to highly publicized claims, isn’t to blame for high methane levels in three families’ drinking water in a northern Pennsylvania town.

For fracking proponents, it was another piece of good news. The oil and gas industry still was unwrapping the federal government’s acknowledgment that fracking isn’t nearly as harmful to the environment as it previously claimed. By dramatically lowering its methane emissions estimates from natural gas drilling sites, the Environmental Protection Agency has made it much more difficult to argue that the fracking boom is accelerating climate change.

The developments Monday in Franklin Forks, Pa., also will make it much more difficult to argue that the wildly successful drilling method is harmful to drinking water.

The state’s Department of Environmental Protection now says there is no evidence to connect natural gas drilling with high levels of methane in private water wells in the small town, which sits within the Marcellus Shale region, one of the largest known natural gas deposits in the world and exhibit A of how fracking is transforming the American energy landscape.

The agency specifically says the gas is coming from elsewhere.

“The testing determined that the water samples taken from the private water wells contained gas of similar isotopic makeup to the gas in water samples taken from Salt Springs State Park,” which contains high levels of naturally occurring methane, the DEP said in a statement.

Read more:

North Dakota, Montana's oil potential revised even higher

The U.S. Geological Survey on Tuesday nearly tripled its estimate of recoverable oil and natural gas in the Bakken Formation of North Dakota and Montana.

While the gain makes the Bakken the fastest-growing oil field in the world, the new numbers are still lower than Oklahoma City-based Continental Resources' estimates.

The government now says the Bakken likely holds about 7.4 billion barrels of undiscovered oil that can be recovered with today's technology. The number does not include the amount of oil companies have proved is in the ground.

The revised report also estimates 6.7 trillion cubic feet of undiscovered, technically recoverable natural gas and about 530 million barrels of natural gas liquids.

“These world-class formations contain even more energy resource potential than previously understood, which is important information as we continue to reduce our nation's dependence on foreign sources of oil,” Interior Secretary Sally Jewell said in a statement Tuesday. “We must develop our domestic energy resources armed with the best available science, and this unbiased, objective information will help private, nonprofit and government decision-makers at all levels make informed decisions about the responsible development of these resources.”

The new oil number is 49 times more than the geological survey's 1995 forecast of 151 million barrels of recoverable oil. By 2008, the geological survey revised its estimate to 3.7 billion barrels.

Read The Oklahoman article:

Drillers: Ohio easy place to do business in

Ohio oil and gas drilling regulations are some of the most industry-friendly around, with short waits for permits and almost no ability for local governments to put up roadblocks, say company officials.

The comments, made yesterday at an industry conference in Lewis Center, show some of the contrast between Ohio’s rules and those in other states or on federal land.

“Ohio is probably the most regulatory-friendly state I’ve operated in,” said Randy Albert, chief operating officer for gas operations at Consol Energy of Canonsburg, Pa. He said it takes 14 days to obtain an Ohio drilling permit, as opposed to more than 300 days on federal land.

Matt Hammond, senior director of Ohio government affairs for Chesapeake Energy, had a similar sentiment.

“Ohio is actually a pretty friendly state to operate in as far as permitting,” he said.

The state makes it easy for energy companies to operate because nearly all of the regulation is at the state level, he said, noting that the Ohio Department of Natural Resources has had exclusive authority over drilling since 2004.

“Not every state is like that,” he said.

In other states, such as Pennsylvania, local governments can have their own approval process, which can dramatically increase the time and money needed to make a project happen.

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Chesapeake sells Marcellus Shale properties for $93 million to Southwestern Energy

Chesapeake Energy Corp. extended its long-running sell-off of assets by shedding $93 million worth of natural gas properties in the Marcellus Shale. 
Houston-based Southwestern Energy Co. announced Monday that it has acquired approximately 162,000 net acres in northeastern Pennsylvania. The wells are producing about 2 million cubic feet in natural gas per day. 
"2013 is already proving to be an exciting year for Southwestern Energy," CEO Steve Mueller said in a statement. The acquisition is near Southwestern's existing holdings and provides the company "with even greater exposure to a world-class resource where we can further showcase our operational strengths."

Oklahoma City-based Chesapeake, meanwhile, continues selling assets to shore up its bottom line. The company may move between $4 billion and $7 billion in properties this year and sold more than that in 2012. 
The most recent Chesapeake sale was Gastar's $75.2 million deal to buy proven reserves and undeveloped leasehold interest in Oklahoma announced earlier this month. Several months ago, Chesapeake sold half of its interest in its Mississippi Lime assets as part of a $1.02 billion joint venture with China's Sinopec.

Read the Tulsa World article: 

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