fracking – Page 6 – Olduvai.ca

It’s hard to keep up with the flood of news these days. Here’s your weekly round-up of news not to miss from DeSmog.

Justin Mikulka has been on the oil train beat for years. He’s documented how the oil boom and pipeline bottleneck in the Bakken Shale has led to more, longer, and heavier trains shuttling oil across North America and how various factors also have led to another type of boom: the literal “boom” of exploding oil trains. (In fact, train operators have given them the nickname “bomb trains.”)

This week, Mikulka writes about the latest oil train incident, this time involving a BNSF train carrying tar sands oil from Alberta, Canada, across northwestern Iowa.

While it fortunately resulted in no fire or explosion, the June 22 derailment did release an estimated 230,000 gallons of oil into a flooded Iowa river.

Of particular note is the fact that the Iowa oil train crash is the first one involving the new, safer DOT-117R rail tank cars, which were supposed to improve the safety of oil trains.

China and West Virginia: A Fracking-to-Plastics Dream in Appalachia

The shale oil and gas industry, fueled by fracking, is helping pump record volumes of production in the U.S. But with all those fossil fuels flooding the market, they have to go somewhere.

That’s why the state of West Virginia is spearheading an effort to build out a massive petrochemical storage and production hub in the Ohio River Valley. In fact, last November the state signed an $83 billion deal with Chinese investors to make this fracking-to-plastics dream a reality. (For context, West Virginia’s total gross domestic product was only $76.8 billion last year.)

…click on the above link to read the rest of the article…

Why It Matters If Fracking Companies Are Overestimating Their ‘Proved’ Oil and Gas Reserves

June 17, 2018

Why It Matters If Fracking Companies Are Overestimating Their ‘Proved’ Oil and Gas Reserves

Back in 2011, The New York Times first raised concerns about the reliability of America’s proved shale gas reserves. Proved reserves are the estimates of supplies of oil and gas that drillers tell investors they will be able to tap. The Times suggested that a recent Securities and Exchange Commission (SEC) rule change allowed drillers to potentially overbook their “proved” reserves of natural gas from shale formations, which horizontal drilling and hydraulic fracturing (“fracking”) were rapidly opening up.

“Welcome back to Alice in Wonderland,” energy analyst John E. Olson told The Times, commenting on the reliability of these reserves after the rule change. Olson, a former Merril Lynch analyst, is best known for seeing the coming Enron scandal 10 years before the infamous energy company imploded in 2000.

Today, those same rules have allowed shale drillers to boost their reserves of oil, as well as natural gas. As a result, these “proved” reserves, which investors and pipeline companies are banking on, could potentially be much less proven than they appear.

And the unprecented degree to which this is happening in the shale industry casts a shadow of doubt on the purportedly bright future of America’s booming oil and gas industry.

Rising ‘Proved Undeveloped’ Reserves

…click on the above link to read the rest of the article…

The Unbelievable Amount Of Frac Sand Consumed By U.S. Shale Oil Industry

June 3, 2018

The Unbelievable Amount Of Frac Sand Consumed By U.S. Shale Oil Industry

The U.S. Shale Oil Industry utilizes a stunning amount of equipment and consumes a massive amount of materials to produce more than half of the country’s oil production. One of the vital materials used in the production of shale oil is frac sand. The amount of frac sand used in the shale oil business has skyrocketed by more than 10 times since the industry took off in 2007.

According to the data by Rockproducts.com and IHS Markit, frac sand consumption by the U.S. shale oil and gas industry increased from 10 billion pounds a year in 2007 to over 120 billion pounds in 2017. This year, frac sand consumption is forecasted to climb to over 135 billion pounds, with the country’s largest shale field, the Permian, accounting for 37% of the total at 50 billion pounds.

Now, 50 billion pounds of frac sand in the Permian is an enormous amount when we compare it to the total 10 billion pounds consumed by the entire shale oil and gas industry in 2007.

To get an idea of the U.S. top shale oil fields, here is a chart from my recent video, The U.S. Shale Oil Ponzi Scheme Explained:

(charts courtesy of the EIA – U.S. Energy Information Agency)

As we can see in the graph above, the Permian Region is the largest shale oil field in the United States with over 3 million barrels per day (mbd) of production compared to 1.7 mbd in the Eagle Ford, 1.2 mbd at the Bakken and nearly 600,000 barrels per day in the Niobrara. However, only about 2 mbd of the Permian’s total production is from horizontal shale oil fracking. The remainder is from conventional oil production.

Now, to produce shale oil or gas, the shale drillers pump down the horizontal oil well a mixture of water, frac sand, and chemicals to release the oil and gas. You can see this process in the video below (example used for shale gas extraction):

…click on the above link to read the rest of the article…

Troubled Gas Firm Drops Request to Dodge Drilling Limits Near New Mexico’s Methane Hot Spot

June 3, 2018

Troubled Gas Firm Drops Request to Dodge Drilling Limits Near New Mexico’s Methane Hot Spot

New Mexico resident Don Schreiber on his ranch next to oil and gas equipment

Back in 2014, this corner of northern New Mexico made international headlines when NASA researchers discovered a persistent methane plume the size of Delaware. Two years later, they pinned one of the main sources of this methane “hot spot” to natural gas wells, pipelines, storage tanks, and processing plants in the San Juan Basin. A second peer-reviewed study last year confirmed those findings.

On Friday, state regulators were scheduled to hear Hilcorp’s request to amend the state’s well spacing regulations, which would have allowed the company to drill more wells or target different formations than the rules currently allow.

“The effect of that would be that rather than having a public hearing process where each of those items is heard, that entire process would be done away with and it would only require the local Oil Conservation Division official,” said Don Schreiber, a rancher who lives in the San Juan Basin and had opposed the rule change. “His name is Charlie Perrin and the oil company could just walk in and say ‘Charlie, we want to drill some wells or recomplete some wells and just sign right here.’”

…click on the above link to read the rest of the article…

Flip This Well: How Fracking Company CEOs Get Rich While Losing Billions

May 30, 2018

Flip This Well: How Fracking Company CEOs Get Rich While Losing Billions

Last year the fracking company Halcón Resources announced a new strategy that was sold as the path to profits for the previously troubled shale oil and gas firm. The company had sold its stake in the Bakken oil fields in order to double down on the Permian shale in Texas. At the time, Reuters touted the deal as a “stunning turnaround” for CEO Floyd Wilson, and the good news immediately drove up the Halcón stock price by 35 percent.

“The sale of our Williston Basin operated assets transforms Halcón into a single-basin company focused on the Delaware Basin where we have more than 41,000 net acres,” Wilson said in a statement. He was making his pitch and investors responded.

However, the move was part of a familiar formula for those in the shale industry, which uses horizontal drilling and hydraulic fracturing (fracking) to release oil and gas from shale formations: Borrow lots of money, drill lots of fossil fuels at a loss, flip the company for a profit.

As the Reuters article points out, Wilson’s ultimate goal is to create excitement about the potential of its Permian basin wells and then flip Halcón, just as he’s flipped other shale firms: “Focusing on the Permian could help Wilson achieve his long-held dream of selling Halcón to the highest bidder.”

…click on the above link to read the rest of the article…

This Federal Policy Enabled the Fracking Industry’s $280 Billion Loss

May 14, 2018

This Federal Policy Enabled the Fracking Industry’s $280 Billion Loss

Most people probably aren’t familiar with the acronym ZIRP. It stands for zero interest rate policy and is the policy that unintentionally created the American fracking bubble — just one of its many consequences.

And while most people may not know much (if anything) about ZIRP or the Federal Reserve (Fed), it is likely that they are aware of the impact this policy has on their own lives.

Do you have money in your checking account? Are you lucky enough to have savings? Have you noticed how you don’t make any interest on that money and haven’t for almost 10 years?

You can thank the Fed and ZIRP for that. One of the results of the Fed’s zero interest rate policy is that the average American saver ends up with close to zero interest on their money in the bank. This is one of the reasons that ZIRP is often described as a wealth transfer from American savers to debtors. Because the shale industry is deeply in debt, these companies directly benefit from this arrangement.

Below is a chart of rates for certificates of deposit (CD) since 1980 — historically a safe investment that gave people a decent return on their savings.

Since 2010, if you put your money in a CD, you would not even be keeping up with inflation due to the low interest rate. That isn’t supposed to be how it works.

And as this next chart shows, historically that hasn’t been how it works. The graph below is the federal funds rate since 1950 (this is the interest rate that banks charge each other to lend excess cash overnight). It’s very clear that starting in 2008, the chart flatlined (due to ZIRP) and stayed that way for years — something that had not happened before.

…click on the above link to read the rest of the article…

GOP Tax Law Bails Out Fracking Companies Buried in Debt

April 27, 2018

GOP Tax Law Bails Out Fracking Companies Buried in Debt

EOG Resources is one of the top companies in the fracking industry, and thanks to the new tax bill passed by Republicans and President Donald Trump at the end of last year, EOG had an exceptionally strong year compared to 2016.

In 2017, the company reported a net income of $2.6 billion. The previous year? A loss of $1.1 billion. That financial turnaround seems very impressive until you realize that $2.2 billion, or about 85 percent, of its 2017 income was the result of the new tax law. Without that gift from the GOP and Trump, EOG would have lost approximately $700 million between those two years. Instead they are $1.5 billion ahead of the game.

With numbers like these, it is easy to see how the Tax Cuts and Jobs Act of 2017 was a much-needed lifeline for the money-losing fracking industry. EOG is routinely touted as one of the best shale oil and gas companies. Yet the company still lost $700 million in the past two years. Or at least it would have if not for the tax bill.

This is the same company that an analyst at the investment advice website Seeking Alpha says is “generally considered one of the best unconventional upstream oil and gas players in the business, and its financials back it up.” If those are the best financials in your industry, your industry has a big problem.

An interesting side note is that EOG stands for Enron Oil and Gas, which was spun off as its own company from Enron — the company notorious for one of the great energy Ponzi schemes of the 20th century. Today, an Enron spinoff company is being held up as the most fiscally sound in the shale oil industry.

…click on the above link to read the rest of the article…

World May Hit 2 Degrees of Warming in 10-15 Years Thanks to Fracking, Says Cornell Scientist

April 26, 2018

World May Hit 2 Degrees of Warming in 10-15 Years Thanks to Fracking, Says Cornell Scientist

In 2011, a Cornell University research team first made the groundbreaking discovery that leaking methane from the shale gas fracking boom could make burning fracked gas worse for the climate than coal.

In a sobering lecture released this month, a member of that team, Dr. Anthony Ingraffea, Professor of Engineering Emeritus at Cornell University, outlined more precisely the role U.S. fracking is playing in changing the world’s climate.

The most recent climate data suggests that the world is on track to cross the two degrees of warming threshold set in the Paris accord in just 10 to 15 years, says Ingraffea in a 13-minute lecture titled “Shale Gas: The Technological Gamble That Should Not Have Been Taken,” which was posted online on April 4.

That’s if American energy policy follows the track predicted by the U.S. Energy Information Administration, which expects 1 million natural gas wells will be producing gas in the U.S. in 2050, up from roughly 100,000 today.

The Difference of a Half Degree

An average global temperature increase of 2° Celsius (3.6° Fahrenheit) will bring catastrophic changes — even as compared against a change of 1.5° C (2.7° F). “Heat waves would last around a third longer, rain storms would be about a third more intense, the increase in sea level would be approximately that much higher and the percentage of tropical coral reefs at risk of severe degradation would be roughly that much greater,” with just that half-degree difference, NASA‘s Jet Propulsion Laboratory explained in a 2016 post about climate change.

A draft report from the Intergovernmental Panel on Climate Change (IPCC), which was leaked this January, concludes that it’s “extremely unlikely” that the world will keep to a 1.5° change, estimating that the world will cross that threshold in roughly 20 years, somewhat slower than Ingraffea’s presentation concludes.

…click on the above link to read the rest of the article…

The Secret of the Great American Fracking Bubble

April 18, 2018

The Secret of the Great American Fracking Bubble

Natural gas drilling well pad in Wyoming

What was McClendon’s secret? Instead of running a company that aimed to sell oil and gas, he was essentially flipping real estate: acquiring leases to drill on land and then reselling them for five to 10 times more, something McClendon explained was a lot more profitable than “trying to produce gas.” But his story may serve as a cautionary tale for an industry that keeps making big promises on borrowed dimes — while its investors begin losing patience, a trend DeSmog will be investigating in an in-depth series over the coming weeks.

From 2008 to 2009, Chesapeake Energy’s stock swung from $64 a share under McClendon to around $17. Today, it’s worth just $3 a share — the same price it was in 2000. A visionary when it came to fracking, McClendon perfected the formula of borrowing money to drive the revolution that reshaped American energy markets.

An Industry Built on Debt

Roughly a decade after McClendon’s rise, the Wall Street Journal reported that “energy companies [since 2007] have spent $280 billion more than they generated from operations on shale investments, according to advisory firm Evercore ISI.”

As a whole, the American fracking experiment has been a financial disaster for many of its investors, who have been plagued by the industry’s heavy borrowing, low returns, and bankruptcies, and the path to becoming profitable is lined with significant potential hurdles. Up to this point, the industry has been drilling the “sweet spots” in the country’s major shale formations, reaching the easiest and most valuable oil first.

…click on the above link to read the rest of the article…

In Pittsburgh, a community bill of rights helped ban fracking

March 14, 2018

In Pittsburgh, a community bill of rights helped ban fracking

Here’s the problem: In 2010, the oil and gas industries operating in Pennsylvania were acquiring land leases that would allow them to extract natural gas using the process known as “fracking.” Many rural municipalities had been targeted already for this activity, and the state Legislature had enacted laws forbidding local governments from limiting or banning the industrial activities related to fracking. The people of Pittsburgh were alarmed to learn that a few larger open spaces — and even small parcels of land in the city — had been quietly leased for fracking. The nine members of the city council were hearing from their concerned district constituents and one of the council members put out a call for advice to environmental groups, land-use law firms, and other experts. A group discussion ensued in which nearly 30 organizations participated. The overarching question raised by the council member was, “How can Pittsburgh protect its people, environment, and water supply from the toxic effects of industrial gas extraction in the city?”

Here’s how one organization is working on the problem: After hearing advice from organizations suggesting appeals to state regulatory agencies and recommendations for new local zoning laws that might limit fracking to designated “heavy industrial zones,” the council member asked another important question, “Don’t these proposed ‘solutions’ actually allow fracking, rather than stop it?” The almost unanimous answer that came back was that “it’s illegal to stop the fracking, because of state preemption. The best you can do is try to limit the harm.”

…click on the above link to read the rest of the article…

Spooked by Quakes, Oklahoma Toughens Fracking Rules

March 9, 2018

Spooked by Quakes, Oklahoma Toughens Fracking Rules

Canadian regulators stick with less stringent regulations despite growing risks from mega-fracking.

Across North America, fracking-caused earthquakes have led to public concern and protests. Photo by ProgressOhio, Creative Commons licensed.

After swarms of earthquakes caused by hydraulic fracturing, Oklahoma has introduced tougher regulations than those used by any Canadian energy regulator.

Last month the Oklahoma Corporation Commission ordered all drillers to deploy seismic arrays to detect ground motion within five kilometres of hydraulic fracturing operations over a 39,000-square-kilometre area in the centre of the state.

The commission, which regulates the industry, also lowered the minimum level of earthquakes at which operators must change practices from the current 2.5 magnitude to 2.

In addition, frackers must suspend their operations immediately for up to six hours after causing a 2.5 magnitude earthquake which can be felt at the surface.

The commission created the new earthquake protocol after hydraulic fracturing operations set off more than 70 earthquakes of at least 2.5 magnitude since 2016.

Canada’s energy regulators only make companies stop operations if they cause a magnitude 4 earthquake.

The Alberta Energy Regulator (AER), for example, doesn’t shut down an operation until it causes a magnitude 4 event. Even then the halt is temporary.

British Columbia’s Oil and Gas Commission requires operators “to immediately report” seismic events greater than magnitude 4 or unusual ground motion experienced by people within three kilometres of their operations.

In an attempt to reduce seismic activity, once thought to be solely caused by waste water injection, Oklahoma shut down wells and ordered the reduction of fluid volumes in 700 waste water disposal wells by 800,000 barrels per day between 2014 and 2015.

They also stipulated that if a waste water injection site triggered a 3.5 magnitude quake, it had to shut down operations.

…click on the above link to read the rest of the article…

Getting Past Trump: This Is How Democracies Die (Part 1)

March 7, 2018

Ed note: This piece is part of a 3-part series. Part 1 is also cross-posted on Truthout.

Donald Trump’s 13-month tenure (so far) as president of the United States has been an exhausting sprint for onlookers concerned about the state of the global ecosystem and the fate of industrial civilization. Nearly every day begins with a new outrage — whether Trump’s gutting of the Environmental Protection Agency, his announcement of the US exit from the Paris climate accord, his selling off of national parks, his opening of coastal waters for offshore drilling, his easing of regulations on fracking, or his seeking subsidies for coal mining and coal power plants. Among my environmentalist friends and colleagues, “Trump fatigue” is a real and common ailment.

But much the same could be said for millions of citizens who are only peripherally interested in environmental issues. They awake each morning to read about the Stormy Daniels scandal, the Rob Porter scandal, the Anthony Scaramucci hiring/firing scandal, the Mike Flynn scandal, the James Comey firing scandal, the Tom Price scandal, the White House nepotism and security clearance scandal. The list could go on and on; who can possibly keep up?

The Tweeter-in-chief is monopolizing attention at a moment in history when there are plenty of other things we really should be attending to, including climate change, resource depletion, plastic pollution in the oceans, mass species extinction, the fate of US labor unions, racial and social injustice, and worsening economic inequality. These are the sorts of unaddressed problems that could cause even history’s “greatest” civilization to crack up. But the conversation never seems to get past Trump, who obdurately obstructs action on these issues while commanding everyone’s constant adoring or horrified attention through divisive words and actions.

…click on the above link to read the rest of the article…

Oklahoma Bolsters Earthquake Protocol For Frackers

March 2, 2018

Oklahoma Bolsters Earthquake Protocol For Frackers

Oklahoma has witnessed a surge in earthquakes over the past decade. Regulators and scientists largely agree that the higher seismic activity is associated with the injection of wastewater from oil and gas production into wastewater wells.

Now Oklahoma is tightening its seismic protocol for the oil and gas operations in the state in an effort to reduce the chances of induced earthquakes. The oil industry welcomed the move, describing it reasonable and data-driven.

Earlier this week, the Oil and Gas Conservation Division (OGCD) at the Oklahoma Corporation Commission announced changes in the seismic protocol to “further address seismicity” in the state’s largest oil and gas play.

Under the tougher seismic protocol, all operators conducting hydraulic fracturing operations are now required to monitor real-time seismicity readings during active operations by using a seismic array, a system of linked seismographs arranged in a regular geometric pattern to increase sensitivity to earthquake detection.

Oklahoma is also lowering the minimum level at which operators must take action, from a 2.5 magnitude (ML) to 2.0 ML. Generally, the minimum level at which people can feel earthquakes is about 2.5 ML.

The third key change in the seismic protocol is that some operators will have to pause operations for 6 hours at 2.5 ML, with the magnitude level now lowered from the 3.0 ML minimum level at which operators had to pause operations under the previous protocol.

“The overall induced earthquake rate has decreased over the past year, but the number of felt earthquakes that may be linked to well completion activity, including hydraulic fracturing, in the SCOOP and STACK has increased,” OGCD Director Tim Baker said.

“Ultimately, the goal is to have enough information to develop plans that will virtually eliminate the risk of a felt earthquake from a well completion operation in the SCOOP and STACK,” said the Director of the Oklahoma Geological Survey (OGS), Dr. Jerry Boak.

…click on the above link to read the rest of the article…

Stunning new research finds fracking a major source of carbon pollution in Pennsylvania

February 22, 2018

Stunning new research finds fracking a major source of carbon pollution in Pennsylvania

Methane leaks in the state’s oil and gas industry equal 11 coal-fired power plants.

Flaring takes place after a gas well has been drilled and before it is put into operation. CREDIT: Carolyn Cole/L.A. Times via Getty Images — FLARING TAKES PLACE AFTER A GAS WELL HAS BEEN DRILLED AND BEFORE IT IS PUT INTO OPERATION. CREDIT: CAROLYN COLE/L.A. TIMES VIA GETTY IMAGES

The evidence is now overwhelming that natural gas is not part of the climate solution, it is part of the problem.

A new study finds that the methane escaping from Pennsylvania’s oil and gas industry “causes the same near-term climate pollution as 11 coal-fired power plants.” And that is “five times higher than what oil and gas companies report” to the state, according to analysis from the Environmental Defense Fund (EDF) based on 16 peer-reviewed studies.

Natural gas is mostly methane, a super-potent greenhouse gas, which traps 86 times as much heat as CO2 over a 20-year period. So even a small leakage rate from the natural gas supply chain (production to delivery to combustion) can have a large climate impact — enough to gut the entire benefit of switching from coal-fired power to gas for a long, long time.

Yet even though many earlier studies have found that natural gas production spews out huge amounts of carbon pollution all across the country, just last week, the Trump administration moved to undo an Obama-era rule aimed at limiting the methane leakage from gas and oil production on public lands.

As EDF’s president Fred Krupp told the New York Times, “Gutting the rule would allow unchecked waste of natural gas, unnecessary pollution and the loss of revenue to communities and tribes to address critical needs such as schools and roads,”

…click on the above link to read the rest of the article…

Frac Sand Shortage Threatens Shale Boom

February 21, 2018

Frac Sand Shortage Threatens Shale Boom

Higher drilling costs could threaten the recent surge in United States shale production.

Halliburton said last week that its earnings could be negatively impacted because of bottlenecks related to the supply of frac sand used in shale drilling. The Wall Street Journal reported that Halliburton’s shares were briefly halted on February 15 after Halliburton’s CFO Chris Weber told an audience at the Credit Suisse Energy Summit that the company’s first quarter earnings could take a hit by a whopping 10 cents per share.

The reason, he said, was because of delays by Canadian rail companies that would slow the delivery of frac sand. Halliburton saw its shares drop by more than 2 percent on a day that saw broader gains to the S&P 500.

Frac sand is integral to growing shale production, increasingly so these days with more and more sand pumped down into a well. Shale drillers have credited the heavy doses of sand with squeezing out more oil and gas from the average well. Demand for frac sand surged from 34 million tons in 2012 to 61.5 million tons in 2014. Consumption fell in the ensuing years as drilling dried up when oil prices collapsed, but frac sand consumption surpassed previous highs in 2017 as drilling resoundingly came back.

In 2018, frac sand demand is expected to top 100 million tons, according to Rystad Energy. “Right now, the market is really stretched thin,” says Thomas Jacob, a senior analyst at IHS Markit, told the FT in December. “Everyone is running at full capacity.”

Much of the frac sand has come from places like Wisconsin, which produces “northern white sand” that is hard and round, helping to create porous fractures in shale wells. It is high quality, but expensive, particularly because it has to be shipped by rail to Texas shale fields.

…click on the above link to read the rest of the article…

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