Interior's Bureau of Land Management (BLM) office in Alaska has issued a call for nominations and comments on tracts for oil and leases to be offered in the National Petroleum Reserve in Alaska (NPR-A) in November. The notice, which was published in the Federal Register, is subject to a 45-day comment period. This is the second consecutive annual sale that President Obama has directed BLM to hold in the NPR-A. The first NPR-A sale in 2011 generated bids totaling more than $3.6 million (see NGI, Dec. 12, 2011). BLM Alaska said it plans to offer 630 tracts on 7.1 million acres in the upcoming lease lease, which would be more than double what was offered in 2011. The tracts to be auctioned would be within the Northeast and Northwest Planning Areas of the NPR-A, according to the notice. The U.S. Geological Survey in 2010 estimated that the NPR-A, which covers 22.8 million acres on Alaska's North Slope, holds approximately 896 million bbl of oil and 53 Tcf of natural gas. Both figures were below what the agency estimated in 2002. BLM Alaska said it must receive all nominations and comments on the tracts for consideration by June 29. The nominations and/or comments should be sent to the State Director, Bureau of Land Management, Alaska State Office, 222 West 7th Ave., Mailstop 13, Anchorage, AK 99513-7504. For further information, contact Deputy State Director Ted Murphy at (907) 271-4413.
Natural gas demand in the Northwest is expected to grow steadily at just under 1% annually during the next 10 years, with gas used for power generation expected to lead the growth, according to a 2012 Gas Outlook by the Northwest Gas Association (NWGA). Citing "unprecedented change" in the gas industry during the past few years," NWGA's latest report sees demand growth averaging 0.9%, cumulatively hitting 8.1% during the upcoming decade through 2021. NWGA emphasized the sharp change during the past 15 years in the natural gas load profile. In 1996 more than half of the gas consumed went to large industrial customers (51%) with electricity generation representing only 3%. At the end of 2010 it had reversed, with power generation accounting for more than a quarter (27%) of the gas use, while industrial use slipped to 31%. The report pointed out that in addition to unknowns concerning "the magnitude and nature" of the growing use of gas for power generation, continued low natural gas prices could spur more new industrial loads using gas, along with more use of gas in transportation.
Fifty-five investment organizations and institutional investors with nearly $1 trillion in assets under management are pushing for implementation of "best practices" for hydraulic fracturing, according to a trio of shareholder groups -- Boston Common Asset Management, the Investor Environmental Health Network and the Interfaith Center on Corporate Responsibility. "In the 2010 and 2011 proxy seasons, 21 shareholder resolutions at 16 companies received strong support, averaging 30% votes on six resolutions going to votes in 2010 and an average 40% votes on five resolutions voted on in 2011." Other resolutions were withdrawn after companies either took "positive action" or pledged to do so in the near future, they said. "Assuming that hydraulic fracturing is going to continue to be used in some form, investors need to have greater certainty in the marketplace as to industry practices and government regulation," said Steven Heim of Boston Common.
The State of Wyoming and the Colorado Mining Association (CMA) are petitioning the U.S. Supreme Court to hear a challenge of the Clinton-era "roadless rule," which places restrictions on road-building to carry out energy exploration and production, logging and other commercial activities on more than 58 million acres of forest lands. Wyoming asked the high court to review the October 2011 decision of the U.S. Court of Appeals for the Tenth Circuit overturning an opinion of U.S. District Judge Clarence Brimmer of Wyoming, who had issued a permanent injunction against the enforcement of the roadless rule (see NGI, Oct. 31, 2011). The CMA said if the rule were allowed to stand, it would "effectively prevent future mining operations on roadless lands, leading to a decrease in mineral and coal production, job losses and sharp decreases in taxes and revenues..." Because the U.S. Forest Service promulgated the road-building rule in violation of the National Environmental Policy Act (NEPA) and Wildness Act, it "must be set aside," Brimmer wrote in his 2008 decision (see NGI, Aug. 18, 2008).
The Ohio Senate passed by a 27-6 vote a lengthy energy bill that contains new rules governing hydraulic fracturing. Substitute SB 315 requires operators to identify every water source they could potentially use; provide an estimate of the rate and volume of water withdrawals; sample water wells within 1,500 feet of new horizontal wells; carry at least $5 million in liability insurance, and disclose each additive used in fracking but not their precise formulation. The bill is now in the Ohio House of Representatives.
U.S. energy independence won't be achievable until at least 2030, even with a renewed focus on domestic energy resources, energy infrastructure and unconventionals, according to more than two-thirds of the energy executives responding to a survey conducted by KPMG Global Energy Institute. The 10th annual survey of global energy companies polled 225 financial executives in late April. About one-quarter of those responding also think Brent crude oil prices for 2012 haven't peaked at $112/bbl; 43% expect prices to exceed $141/bbl. When asked when they think the United States may attain energy independence, 27% said never, 21% said 2040 or beyond, and 18% said by 2030. About 12% deem it possible by 2020 while the remaining 22% think by 2025. Most of the executives surveyed agreed that developing shale gas and oil reserves would have a significant effect on global energy needs over the next three years. In addition, almost half (49%) thought that shale, which accounted for only 20% of total natural gas production in 2010, would become the dominant source for natural gas in the United States by 2020. Another 22% believe shale would be the primary source for natural gas by 2025.
Eureka Resources LLC plans to construct a centralized wastewater treatment facility in the Marcellus Shale in Standing Stone Township in Bradford County, PA, that would operate around the clock seven days a week and employ 16 people full-time. Bradford County, which accounts for nearly one-quarter of all the drilling in the state, has seen production skyrocket over the last few years. After producing 65.8 Bcfe during the second half of 2010, the county nearly tripled production to 170.3 Bcfe during the second half of 2011, according to the Pennsylvania Department of Environmental Protection (DEP). The company's Williamsport, PA, wastewater treatment plant has been operating since 2008 and has undergone multiple upgrades to add more capabilities. According to Eureka, it is the only facility treating Marcellus wastewater that meets the DEP's stringent standards for discharge into the state's rivers or streams.
Subsidiaries of Chevron Corp. and Apache Corp. and several partners agreed to sell liquefied natural gas (LNG) from the under construction Chevron-operated Wheatstone Project in Western Australia to Japan's Tohoku Electric Power Co. Inc. Under the agreement up to 1 million metric tons a year of LNG would be delivered to Tohoku for up to 20 years. The onshore foundation project is a joint venture between the subsidiaries of Chevron (72.14%), Apache (13%), Kuwait Foreign Petroleum Exploration Co. (7%), Royal Dutch Shell plc (6.4%) and Kyushu Electric (1.46%). The Apache and KUFPEC subsidiaries would supply gas produced from the Julimar and Brunello fields. Apache has a 65% interest in the upstream Julimar Development Project, which it operates.
Norse Energy Corp. ASA has completed a $37 million sale of operated production and other assets to EmKey Resources LLC, giving it cash to focus on core properties in central New York. The sale included producing wells, approximately 23,000 held by production, or owned acres, the associated natural gas gathering system, and pipeline rights of way. However, Norse said it will retain a 37.5% working interest in all deep formations, including the Utica Shale on the conveyed acres. As part of the deal EmKey receives a three-year warrant to purchase 81 million Norse (NOK) shares at a strike price of NOK 0.40. EmKey is a private company that is led and partially owned by Oivind Risberg, a current Norse board member and former Norse CEO. As part of this transaction, EmKey has committed to construct a new pipeline system in central New York capable of transporting at least 90 MMcf/d for 15 years once Norse so nominates. Coming out of the sale, Norse now owns or leases approximately 130,000 net acres in New York, of which 33,000 lies in the liquids-rich shale fairways of western New York, with the remaining 97,000 net acres in the Marcellus and Utica natural gas fairways in central New York.
Vermont has become the first state to officially ban hydraulic fracturing (fracking) when Gov. Peter Shumlin signed bill H464 into law. Although the measure is mostly symbolic -- no oil or natural gas drilling is taking place there -- H464 does require regulators with the state Agency of Natural Resources to submit the first of two reports on the best ways to regulate fracking by 2015.
A series of proposals that would allow hydraulic fracturing and enact several other changes to North Carolina's energy policies have cleared the state Legislative Research Commission and could come to a vote this summer. The proposals include creating a nine-member Oil and Gas Board, but also call for a moratorium on hydraulic fracturing until July 1, 2014. Media reports said a competing proposal would have environmental protections, but would not create an Oil and Gas Board and would require additional legislation from the General Assembly.
The Pennsylvania Game Commission (PGC) is putting about one-sixth of State Game Lands No. 36, a game reserve in Bradford County, up for oil and natural gas leasing. The commission said it would accept sealed royalty bids on Tract 36B-12, approximately 3,177.7 acres, until 1:30 p.m. on May 30. The game reserve totals approximately 18,987 acres and straddles Monroe and Overton townships. Successful bidders agree to spud a well within five years and make a bonus payment of $2,000 per net acre within 120 days of being awarded a bid. Operators must also pay oil and natural gas royalties of at least 20%, and must hold a surety or performance bond of $50,000. Drilling would also face restrictions during hunting season.
The Natural Gas Group, a triumvirate of New Brunswick's Environment, Energy and Natural Resources departments, unveiled 116 recommendations to change the province's Oil and Natural Gas Act. The recommendations include tougher casing and cementing standards, increased water protections and substantially higher royalties. The province will hold nine public hearings on the proposals by June, with implementation possibly to follow in the fall.
Twenty inspectors with the West Virginia Department of Environmental Protection have filed a grievance with the state Public Employees Grievance Board, alleging the agency's plans to hire additional Marcellus Shale inspectors are unfair because the new hires will be paid more and have fewer prerequisites. UE Local 170 West Virginia Public Workers Union is representing the inspectors. Although the inspectors are union members, they have no collective bargaining agreement or contract with the state.
Waste Management has begun construction of a new fueling facility to convert its fleet of trucks that serve the Columbus, OH, area from oil to compressed natural gas (CNG). The Houston-based company said it currently has natural gas fueling stations under development at 27 U.S. facilities. Waste Management has a fleet of about 1,500 CNG and liquefied natural gas vehicles, which is considered the largest in the North American waste industry. As part of its annual fleet conversion program, the company said it expects 80% of its new collection vehicle purchases to be natural gas-powered trucks.
Antero Resources said net production averaged 317 MMcfe/d in 1Q2012, an increase of more than 83% from the prior-year quarter. The Denver-based company also announced plans to expand its operations in the Marcellus Shale, adding an eighth drilling rig and a third hydraulic fracturing crew to the play by year's end. Adjusted net revenues totaled $172.6 million during the quarter, while adjusted net income climbed to $46.3 million.
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