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Oil and Gas Roundup — March 6

March 06, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

The war on energy is underway

Consumer Energy Alliance’s mission is to promote U.S. energy production.  With our membership, CEA supports public policies that ensure consumers can access affordable energy and that the energy is developed safely and responsibly.

We advocate for opening areas off U.S. shores in the Atlantic, the Arctic and in the Gulf of Mexico to energy development. We work with both federal and state governments to promote the pursuit of shale energy.  We support diversifying our energy portfolio by developing and utilizing renewable sources of energy. CEA is a strong voice for fortifying America’s energy infrastructure, such as the electric grid or gas and oil pipelines.

Far too often energy consumers are confronted by organizations which promote one narrow view.  The answer is always the same: No.

No to ANWR; No to Keystone XL; No to the Gulf. No to wind. No to transmission lines. Anti-development activists see only a binary world. Do nothing or face disaster.

These narrow views are contrary to the attitudes that have driven America to succeed. As a country, Americans have long prided themselves on being good stewards of the environment. Natural resources, whether they are oil, coal, shale gas, timber, hydro-power or windmills, can all be utilized in an environmentally sound way that benefits the economy.  As a country, America can have both.  We can protect our environment AND develop our resources.

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New study of gas drilling and ground water shows gas is often in water before drilling begins

Much of the debate over hydraulic fracturing for natural gas has centered around the potential to pollute drinking water. What's not explicit in much of the discussion is that — in Pennsylvania — the only thing that has polluted people's well water as a result of drilling is natural gas itself.

Known as "methane migration" or "stray gas," the appearance of natural gas in people's well water is behind the image of the flaming tap made famous in the film "Gasland."

The residents of Dimock, in Susquehanna County, featured in that film received settlements from Cabot Oil & Gas, which the Pennsylvania Department of Environmental Protection determined improperly cemented the casings to its wells, thus allowing gas to migrate into the local aquifer and people's wells.

A new peer-reviewed study demonstrates the appearance of gas in a water well - especially in the northeastern part of Pennsylvania around Dimock - is not necessarily the result of drilling.

Natural gas, the study shows, is often already in the water before any drilling begins.

The study, published in the February Bulletin of the American Association of Petroleum Geologists, is based on more than 2,300 gas and water samples collected from 234 gas wells and 67 private groundwater-supply wells, the largest data set of any such study thus far.

It looked specifically at what kind of gas was present and where.

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Female-led Athena Oilfield Services set to shake up the shale

The rough-and-tumble Eagle Ford Shale has a reputation as a man’s world, but startup Athena Oilfield Services LLC is ready to shake that up.

The company — named for the Greek goddess of wisdom — boasts a five-member executive team comprised entirely of women. And after just over two months in business, it already boasts key shale players, including BHP Billiton and Marathon Oil, as customers.

“We might be the only (oilfield services company) with women making up the full executive staff,” CEO Ashton Verrengia says. “Times are definitely changing, and the oilfield isn’t just a man’s business.”

Athena is headquartered in Houston, but the bulk of its day-to-day operations take place in the Eagle Ford. The company, which specializes in services such as chemical mixing, operates a 10,000-square-foot field facility in the town of Beeville.

Verrengia, 26, began working in the industry while in college, first holding down a job with Drill Chem LLC in Corpus Christi. After a few years in the business, she was ready to put her contacts and expertise to work and struck out on her own.

So far, so good.

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U.S. urged to export more LNG in response to Russia-Ukraine crisis

An American Petroleum Institute official and two Republican US senators separately called for accelerated US LNG exports in response to the Russian-Ukrainian confrontation over control of the Crimean Peninsula.

“Our allies in Europe are eager for a reliable partner to enter the marketplace as a stable, secure source of natural gas, and American industry is ready to make that happen,” API Industry and Upstream Operations Director Erik Milito said on Mar. 5.

“Thanks to the US energy revolution, America is now the world’s leading gas producer, which means that our LNG exports could significantly strengthen the global energy market against crisis and manipulation,” he said, adding, “That’s a win-win for our economy and for our friends.”

The US Department of Energy is required under federal law to determine whether LNG exports from a proposed terminal would be in the national interest. Such facilities also must get approvals from the Federal Energy Regulatory Commission and state regulators.

Milito said the slow pace of federal approval for domestic LNG export facilities has unfortunately stalled infrastructure construction, weakening the US competitive position.

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Mexico oil and gas shales need American money and know-how now

Mexico’s vast oil and gas shales are slowly opening up to private investors and companies after decades of being run by the state.

Texas’ expertise in producing unconventional wells will be especially valuable just south of the border, several speakers at the Texas Energy Council’s 26th annual Global Texas symposium at the George W. Bush Institute said Thursday.

Jordy Herrera Flores, Mexico’s former energy minister, said the country’s state-run oil company, PEMEX, doesn’t have the experience with hydraulic fracturing horizontal shale wells.

Steve Molina, International & Domestic Energy Practice for Dentons US LLC, grew up in Mexico City and said PEMEX has always had a monopoly there.

“I never thought the Mexican oil and gas industry would ever open up,” Molina said. “I think they did it out of necessity.”

Flores pointed out that like anything else, opening the country up to foreign investors has become a political issue and there’s additional legislation that needs to be passed by Mexico’s Congress to make this a reality.

There’s real potential for the United States, Mexico and Canada to team up for an energy interdependence that could turn the tables on the Middle East, the speakers said.


No surge seen for U.S. gas prices when exports start

Domestic natural gas prices are unlikely to surge—even when the U.S. is exporting to a world now paying three to four times more for gas— because of the vastness of U.S. reserves, industry experts say.

Those experts were speaking at the annual IHS CERAWeek Energy conference, where exporting American natural gas, and even oil, were major topics against a backdrop of geopolitical events in Ukraine that put the focus on energy security, particularly for Europe. Calls to export oil, now largely prohibited, have picked up as U.S. production now totals about 8 million barrels per day.

The U.S. is on track to begin exporting liquefied natural gas from one approved LNG facility next year, and potentially from five others with conditional approval in the next several years.

Siemens CEO Joe Kaeser said the U.S. gas boom has made the country far more competitive globally, and a desirable place to locate operations. He said he is considering moving more operations to the U.S., where Siemens already employs 60,000.

"Today, it's all about going West. The U.S. is the place to be. More and more global companies are seeking to enlarge their foot print here," he said.

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