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Fracking Bust Deepens, Sets Records
Fracking Bust Deepens, Sets Records
The fracking bust that is following the phenomenal fracking boom is deepening relentlessly, week after week, and there is still no respite in sight.
Drilling activity peaked in October last year, when 1,606 rigs were drilling for oil, with a four-month lag behind oil prices. But by October it was clear that the oil-price plunge wasn’t a blip, and in November oil fell off the chart. It was then that the industry reacted with vertigo-inducing rapidity. And the number of rigs drilling for oil, which Baker Hughes publishes every Friday, began to plummet.
In the latest reporting week reported Friday, drillers idled an additional 34 oil rigs. Now only 1,019 rigs are still drilling for oil, down 590 rigs from the October peak, a 37% plunge in 19 weeks. The steepest rig-count plunge in the data series.
But drillers have to service their mountain of debt with which the fracking boom was funded. They can’t afford to cut production. To stay alive, they cut operating cost and capital expenditures, and they’re laying people off. But they focus their remaining resources on the most productive plays, using the most efficient technologies, with a single-minded focus on raising production while spending less.
The hope is that this strategy will get them through the oil bust if it doesn’t last too long. But because everyone is thinking in those terms, US production overall continues to rise – it averaged an estimated 9.2 million barrels per day in January.
…click on the above link to read the rest of the article…
USGS Confirms Oklahoma Quakes Are Due To Fracking
USGS Confirms Oklahoma Quakes Are Due To Fracking
The debate about the cause of the exponential rise in the frequency of earthquakes in Oklahoma has really heated up in the last year, but as KFOR4 reports, The United States Geological Survey (USGS) appears to have put any doubt firmly to rest. In a strongly-worded press release, the USGS states, “…Large areas of the United States that used to experience few or no earthquakes have, in recent years, experienced a remarkable increase in earthquake activity.. This rise in seismic activity, especially in the central United States, is not the result of natural processes... Instead, the increased seismicity is due to fluid injection associated with new technologies that enable the extraction of oil and gas from previously unproductive reservoirs.” For some, that could end the debate; but Kim Hatfield, with the Oklahoma Independent Petroleum Association, is not so sure, “I don’t think it’s particularly helpful because basically, it says we’ve come to a conclusion, but we don’t have the science to back it up.”
Full USGS Statement: Coping with Earthquakes Induced by Fluid Injection
A paper published today in Science provides a case for increasing transparency and data collection to enable strategies for mitigating the effects of human-induced earthquakes caused by wastewater injection associated with oil and gas production in the United States. The paper is the result of a series of workshops led by scientists at the U.S. Geological Survey in collaboration with the University of Colorado, Oklahoma Geological Survey and Lawrence Berkeley National Laboratory, suggests that it is possible to reduce the hazard of induced seismicity through management of injection activities.
…click on the above link to read the rest of the article…
How Can Cameron Stop Fracking Causing Earthquakes? Easy. Change the Definition of Fracking.
How Can Cameron Stop Fracking Causing Earthquakes? Easy. Change the Definition of Fracking.
David Cameron’s government has snuck a new definition of fracking onto the statute books – allowing hydraulic fracturing for shale gas to take place outside the new regulatory regime.
Cuadrilla’s exploratory fracking, which caused two earthquakes in 2011 at Preese Hall in Lancashire, would not be classified as hydraulic fracturing under the new official definition set out in the controversialInfrastructure Act.
Doug Parr, chief scientist at Greenpeace UK said: “The shift in fracking definition illustrates again how desperate Government is to get fracking moving despite the problems and opposition.”
DeSmog UK is the first to report on how the government appears to have rendered its own regulation of fracking useless, as the late changes made to the Infastructure Bill have gone unnoticed.
Under the new Infrastructure Act, shale gas exploration and extraction must involve more than a total 10,000 cubic metres of fluid in order to be defined as hydraulic fracturing.
Last-Minute Addition
Parr added: “Having failed to win the argument at public level and with major oil companies saying it will be no big deal, Government is left conjuring up new definitions to help steamroller unwanted, risky and irresponsible fossil fuel exploitation onto the British countryside.”
…click on the above link to read the rest of the article…
Junk Science? Report Finds Shale Industry Cited ‘Retracted and Discredited’ Studies
Junk Science? Report Finds Shale Industry Cited ‘Retracted and Discredited’ Studies
Since the beginning of the shale gas rush, the drilling industry has insisted that the process is relatively benign, arguing that its critics are simply fear-mongering and that a sober scientific review of the data fails to prove, for instance, that fracking has ever contaminated water supplies.
In the wake of New York Governor Andrew Cuomo’s decision to disallow fracking in that state, for example, one of the most active boosters of the shale drilling rush, the industry-funded Energy in Depth, issued a statement labeling the ban “’Junk Science’ and ‘Political Theater.”
In the wake of news reports, academic publications, or policy decisions that it opposes, Energy in Depth often circulates lists of sources that it describes as debunking “junk science.” But how reliable is the science that EID cites?
A report issued today by the Public Accountability Initiative (PAI) reviews a list of over 130 studies cited by Energy in Depth (EID), testing its sources for markers of credibility.
How often was the research cited peer-reviewed? Was it accurately labeled? Was the research funded by the oil and gas industry, and if so, was that funding properly disclosed or was it concealed? Were any of the papers cited revoked or rescinded?
…click on the above link to read the rest of the article…
The PunchLine: “The Oil Crash Is No Small Matter…Repurcussions Will Be Extensive”
The PunchLine: “The Oil Crash Is No Small Matter…Repurcussions Will Be Extensive”
Awkward Beginnings… With all due respect…
What a way to start the year. The crash in oil prices is no small matter. The previous down sweep in energy prices occurred in the midst of the financial crash 0f 2008 and Great Recession. Oil prices soon reversed afterwards and climbed back to dizzying heights, even as world economic and financial recovery remained fragile. This time it would be foolish to bet solely on such a similarly quick snapback. The current bear market for oil may actually be the beginning of a longer and extended period of low commodity prices…
First, the price of oil at $100/bl or above had been an absurdity.Second, many nations simply cannot afford to curtail pumping oil, even at a loss in the short run.
Third, global growth is proving to be woefully inadequate and uncertain. Even as growth in the U.S. economy is becoming more firmly entrenched, the rest of the major economic engines remain mired, as we have argued for some time, in subpar growth trajectories. The Euro area may be facing another soft patch and remains entangled in both economic and geopolitical crises. The recovery in Japan has been slower than expected. And China continues to grow well below its previous super- track; and it obviously faces headwinds from a volatile real estate sector, awkward debt buildups and massive stockpiles of high-priced commodities.
Fourth, the shale gas revolution has transformed America’s energy markets, with profound effects for economic growth, competitiveness, security, and environmental quality. And the extensiveness of the oil rush in America is also playing a big role in pushing the adjustment on prices.
…click on the above link to read the rest of the article…
Fracking in the UK: What to Expect in 2015 | DeSmogBlog
Fracking in the UK: What to Expect in 2015 | DeSmogBlog.
The current UK coalition government has overseen the greatest fossil fuel boomsince the discovery of North Sea oil, but the controversy that surrounds shale has made it an interesting factor in the run-up to this year’s general election. Here’s what to expect.
More Fracking
The government has shown absolutely no evidence that it is willing to slow down its committed march towards the commercial development of shale gas.
For example, the government recently approved amendments to the infrastructure bill which, amidst heavy public resistance, will allow fracking companies to extract shale from right underneath people’s homes.
This is irrespective of a wide range of academic reports listing both health and environmental implications, as well as direct human rights inflictions.
Chancellor George Osborne also pledged a further £35 million in the Autumn Statement towards the development of shale gas, with £5 million in particular dedicated to twisting the public’s arm on the matter.
Fracking Fracas: The Trouble with Optimistic Shale Gas Projections by the U.S. Department of Energy Post Carbon Institute
On December 3, 2014, Nature published “Natural Gas: The Fracking Fallacy”, which suggested that the forecasts of the Energy Information Administration (EIA) for four major U.S. shale gas plays were wildly optimistic, based on a comparison to forecasts for the same plays by the University of Texas Bureau of Economic Geology (UT/BEG). This was followed by a formal denunciation of the article both by the EIA and UT/BEG, despite the fact that the substance of the article was correct. Arthur Berman provided an excellent overview of the merits—or in this case the lack thereof—of the attack by both of these agencies on what is essentially the reality behind the shale revolution.
The Nature piece steered clear of any discussion of my recent Drilling Deeper report (published by Post Carbon Institute), which looked at twelve major shale gas and tight oil plays accounting for most of U.S. shale production, and which also came to the conclusion that the EIA’s projections were extremely optimistic. Naturefocused instead on the four plays described in two published and two unpublished studies by UT/BEG. TheNature article sparked a lot of media attention, which prompted the EIA and UT/BEG to issue rebuttals.
The argument of the EIA and UT/BEG that their projections of shale gas production from the plays mentioned in the Nature article are fundamentally similar is untrue, given the publicly available data. The implications of the EIA being wrong on its projections of cheap and abundant gas for decades are considerable, given that investment decisions are now being made based on these projections— including construction of infrastructure for LNG exports, gas-fired generation and even crude oil exports. Hence it is worthwhile to examine the EIA’s optimistic projections in more detail in light of the projections available from UT/BEG and the Drilling Deeperreport (DD).
Jobs, Shale, Debt and Minsky – The Automatic Earth
Jobs, Shale, Debt and Minsky – The Automatic Earth.
OK, I don’t see a whole lot of comprehension out there, so let’s try and link the obvious: employment to shale to plummeting oil prices to the debt the shale industry was built on (and which is vanishing). I know, people look at the US jobs report today, and at the stock exchanges (Europe up some 2% across the board), and think salvation has landed on their doorstep, but the true story really is very different.
The EU markets are up because of US job numbers + the expectation that Draghi will launch a broad QE in January. But US jobs are far less sunny than meets the eye at first glance, and the Bundesbank will not all of a sudden do a 180º on ECB stimulus options. Ergo: a lot of European investors are set to lose a lot of money.
Anyone notice how quiet Angela Merkel has become about the QE debate? That’s because she doesn’t want to be caught stuck in a losing corner. Even if the Bundesbank would give in to Draghi, and chances are close to zero, there would be multiple court cases in Deutschland against that decision, and chances are slim the spend spend side would win them all. That’s the sort of quicksand an incumbent leader like Merkel wants to avoid at all cost.
But let’s leave Europe to cook itself, and its own goose too. What’s happening stateside is more important today. First, Marc Chandler has a good way of putting what I have said for as long as oil prices started testing ever deeper seas: the danger to the industry is not even so much falling prices, it’s financing both existing and future endeavors. Shale is a leveraged Ponzi, that’s its most urgent problem. Even if shale could break even at low prices, financiers and investors would still leave the building.
Both shale oil and gas have two big problems: 1) projects are based on highly optimistic returns, and 2) they are financed with very large and leveraged debt loads. With WTI prices now at $66 a barrel, and the first Bakken prices below $50 a barrel having been signaled, the entire industry starts resembling a house of cards, a game of dominoes and/or a pyramid shell (pick your favorite) more by the day. Chandler:
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Follow The Sand To The Real Fracking Boom
Follow The Sand To The Real Fracking Boom.
When it takes up to four million pounds of sand to frack a single well, it’s no wonder that demand is outpacing supply and frack sand producers are becoming the biggest behind-the-scenes beneficiaries of the American oil and gas boom.
Demand is exploding for “frac sand”–a durable, high-purity quartz sand used to help produce petroleum fluids and prop up man-made fractures in shale rock formations through which oil and gas flows—turning this segment into the top driver of value in the shale revolution.
“One of the major players in Eagle Ford is saying they’re short 6 million tons of 100 mesh alone in 2014 and they don’t know where to get it. And that’s just one player,” Rasool Mohammad, President and CEO of Select Sands Corporation told Oilprice.com.
Frack sand exponentially increases the return on investment for a well, and oil and gas companies are expected to use some 95 billion pounds of frack sand this year, up nearly 30% from 2013 and up 50% from forecasts made just last year.
…click on the above link to read the rest of the article…
The Real Cost of Fracking: How America’s Shale Gas Boom Is Threatening Our Families, Pets, and Food
The Real Cost of Fracking: How America’s Shale Gas Boom Is Threatening Our Families, Pets, and Food.
The first researchers to systematically document ill health in livestock, pets, and people living near fracking drill sites were Michelle Bamberger and Robert Oswald. Bamberger, a veterinarian, and Oswald, a professor of molecular medicine at Cornell University, used a case study approach–looking at individual households–to search for possible effects (Bamberger and Oswald 2012).
Many fracking chemicals are known carcinogens, endocrine disruptors or other classes of toxins (Colborn et al. 2011). Bamberger and Oswald’s studies, carried out during the ongoing fracking boom, uncovered serious adverse effects including respiratory, reproductive, and growth-related problems in animals and a spectrum of symptoms in humans that they termed “shale gas syndrome”. Ultimately, their research led them to consider fracking’s broader implications for farming and the food system (Bamberger and Oswald 2012 and 2014).
Their new book, The Real Cost of Fracking: How America’s Shale Gas Boom Is Threatening Our Families, Pets, and Food describes the results of this research. However, it is by showing the pervasiveness of fracking’s harmful effects on the lives of the householders that Bamberger and Oswald best convey its true costs.
…click on the above link to read the rest of the article…
Taxpayers to fund hundreds of fracking boreholes across the country | Environment | The Guardian
Taxpayers to fund hundreds of fracking boreholes across the country | Environment | The Guardian.
Hundreds of government-funded boreholes are set to be drilled across Britain to try to persuade the public that a looming shale gas boom can be developed safely, the Observer has learned. Sensors in the boreholes would detect possible water pollution or earthquakes caused by fracking and the information would be made public.
“We will be taking the pulse of the sub-surface environment and will reveal if things are going wrong, but also if they are going right,” said Professor Mike Stephenson, director of science and technology at the British Geological Survey, which would drill the boreholes. “The aim is to reassure people that we can manage the sub-surface safely.”
The plan, called the energy security and innovation observing system, will cost taxpayers £60m-£80m. It is awaiting final approval from the Department for Business, Innovation and Skills, where energy minister Matthew Hancock, afracking enthusiast, holds another ministerial post.
…click on the above link to read the rest of the article…
You Have to See It to Believe It: What It’s Like to Have Fracking in Your Backyard | Alternet
You Have to See It to Believe It: What It’s Like to Have Fracking in Your Backyard | Alternet.
Ed Wade’s property straddles the Wetzel and Marsh county lines in rural West Virginia and it has a conventional gas well on it. “You could cover the whole [well] pad with three pickups,” said Wade. And West Virginia has lots of conventional wells — more than 50,000 at last count. West Virginians are so well acquainted with gas drilling that when companies began using high-volume horizontal hydraulic fracturing in 2006 to access areas of the Marcellus Shale that underlie the state, most residents and regulators were unprepared for the massive footprint of the operations and the impact on their communities.
When it comes to a conventional well and a Marcellus well, “There is no comparison, none whatsoever,” said Wade, who works with the Wetzel County Action Group. “You live in the country for a reason and it just takes that and turns it upside down. You know how they preach all the time that natural gas burns cleaner than coal; well, it may burn cleaner than coal, but it’s a hell of a lot dirtier to extract.”
To understand what’s at stake, you have to understand the vocabulary. Take the word “fracking” for example. When people say it’s been around since the 1950s, they are referring to vertical fracturing, but what’s causing all the contention lately is a much more destructive process known as high-volume horizontal hydraulic fracturing. Or they’re using “fracking” in a very limited way. “The industry uses [fracking] to refer just to the moment when the shale is fractured using water as the sledgehammer to shatter the shale,” scientist Sandra Steingrabertold AlterNet. “With that as the definition they can say truthfully that there are no cases of water contamination associated with fracking. But you don’t get fracking without bringing with it all these other things — mining for the frack sand, depleting water, you have to add the chemicals, you have to drill, you have to dispose of the waste, you have drill cuttings. I refer to them all as fracking, as do most activists.”
The Revolution That Wasn’t: Why the Fracking Phenomenon Will Leave Us High and Dry Post Carbon Institute
A new, landmark report shows that hopes of a long-term golden era in American oil & gas production are unfounded.
America’s energy landscape has undergone a dramatic shift over the last decade—literally and figuratively—as a result of the widespread use of horizontal drilling and hydraulic fracturing (“fracking”). Whole areas of the country have been transformed in a matter of months, while the fossil fuel industry has reversed the decades-long decline in crude oil production and increased natural gas production to record highs. Thanks to shale gas and tight oil (“shale oil”), by 2013 annual crude oil production was 24% higher and natural gas was20% higher compared to just ten years earlier.
While this achievement is impressive, it pales in comparison to the sea change that has been triggered in “conventional wisdom” about our energy future. In a few short years we have gone from President Bush warning that the U.S. was addicted to oil and dangerously reliant on Middle East imports to fears of a production glut, as a recent New York Times article stated:
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