Due to the rapid rise in the development of unconventionals, natural gas surpassed coal as the most-produced domestic fuel in 2011, the Energy Information Administration (EIA) said. Gas production was 23.5 quadrillion Btu (quads) in 2011 compared to coal's 22.2 quads. Gas accounted for nearly 39% of the 60.6 quads of domestic fossil fuel produced in 2011, which exceeded the previous record of 59.3 quads in 1998. One quad is equal to about 1 Tcf of natural gas. Crude oil production, which experienced a long decline from 20.4 quads in 1970 to 10.5 quads in 2008, rose to almost 12 quads in 2011, the EIA said. Natural gas liquids (NGL) climbed to their highest level, 2.9 quads in 2011. Overall in 2011, the United States produced about 78 quads of energy, more than at any point in the nation's history. More than three-quarters of the energy production came from nonrenewable fossil fuels: coal, natural gas, crude oil and NGLs. But despite rising production, the agency said the United States remained a net energy importer, consuming more than 97 quads of energy in 2011.
Federal Energy Regulatory Commission (FERC) staff plan to hold a technical conference on Feb. 13 at the Washington, DC, headquarters on information-sharing and communications issues between natural gas and electric power industry companies (see NGI, Nov. 19). In advance of the 9 a.m.-4 p.m. EST conference, parties are asked to file related questions on information-sharing and communications (www.ferc.gov/EventCalendar/Files/20121207134434-AD12-12-000TC1.pdf).
Transcontinental Gas Pipe Line (Transco) has asked the Federal Energy Regulatory Commission for the go-ahead to place some of its Mid-Atlantic Connector expansion facilities into service by the end of the month. The Williams pipeline seeks to start up service by Thursday (Dec. 20) on the project's Bull Run Loop; Bull Run Replacement; and new 3,550 hp internal combustion-driven compressor unit at its Compressor Station 165 [CP11-31]. The project, which was approved in July, would provide an additional 142,000 Dth/d of firm service to meet growing gas demand in the southern market area. Transco proposes to abandon 30-inch diameter pipe in Fairfax County, VA, and replace it with a 42-inch diameter pipe, as well as install a 3,550 hp internal combustion-driven compression unit at its Compressor Station 165 in Pittsylvania County, VA. Transco said it expects to file another request in the first quarter for authorization to place the remaining project facilities in service, including installing a 33,000 hp electric motor-driven compressor unit and replacing an existing compressor at Compressor Station 175 in Fluvanna County, VA, resulting in a net addition of 15,400 hp of compression at Station 175.
Chesapeake Energy Corp. has offered a "voluntary separation program" for 275 employees as part of efforts to improve efficiencies and reduce costs. The layoffs, the third round since June, would remove about 2% of Chesapeake's workforce of nearly 12,500. Key employees' departures could be temporarily delayed to ensure that there are appropriate staffing levels to meet business needs, the company said. Eligible employees would have 45 days to consider the offer. Those who choose to accept the offers would "separate from the company" in February. In June 70 workers were laid off in Fort Worth, TX, and in November about 115 employees were laid off from a West Virginia subsidiary that relocated to Ohio. About 43 of the West Virginia employees have been rehired.
Sempra Energy has filed with the Federal Energy Regulatory Commission to approve the construction of liquefaction and export facilities at its Cameron liquefied natural gas (LNG) terminal in Hackberry, LA. President Mark Snell said the project represents a "significant investment in new energy infrastructure in Louisiana, and will create nearly 3,000 direct jobs in the peak construction year and approximately 130 full-time jobs when fully operational." Sempra expects that its application to export LNG to be among the first to be considered by the Department of Energy in 2013. The terminal is targeted to be in service by 2017.
Crosstex Energy LP is proceeding with Phase II of its Cajun-Sibon natural gas liquids (NGL) pipeline extension and fractionator expansion in Louisiana, expected to be completed in the second half of 2014, which would expand pipeline capacity by 50,000 b/d of raw-make NGL for total capacity of 120,000 b/d; install a 100,000 b/d fractionator adjacent to its Plaquemine, LA, gas processing plant; modify the Riverside fractionator; and construct a 32-mile extension of the Bayou Jack Lateral for service to the Mississippi River corridor. Phase II also is to include installing four pump stations (13,400 hp total) and constructing 57 miles of NGL pipelines at the Eunice, LA, fractionator and connecting to the new Plaquemine fractionator.
The Regulatory Commission of Alaska (RCA) has granted a certificate of public convenience and a construction permit to PTE Pipeline LLC (PTEP) to construct and operate a condensate pipeline connecting Point Thomson production facilities with BP plc's Badami Pipeline on the North Slope. The 22-mile, 12-inch diameter Point Thomson Export Pipeline would transport 70,000 b/d of condensate through the Badami Pipeline, Endicott Pipeline and Trans Alaska Pipeline System (TAPS), according to the order. Initial Point Thomson Unit production is 10,000 b/d. PTEP, a subsidiary of ExxonMobil Corp., which owns and operates the Endicott Pipeline, estimated the cost of construction at $253 million.
ConocoPhillips, the largest independent in North America, plans to spend more than half of next year's capital expenditures (capex) on North America, with a focus on deepwater Gulf of Mexico and unconventional onshore. The producer set a 2013 capex budget of $15.8 billion, with 60% directed to North America. The 2012 capex budget was $15.5 billion, with $14 billion set aside for exploration and production activities. Almost 40% of next year's budget will be spent on exploitation programs in legacy assets, which include 21 million net acres in North America's onshore. Close to two-thirds of the exploitation spending is to be directed to the Lower 48, primarily on liquids-rich unconventional drilling programs and infrastructure development in the Eagle Ford, Bakken and Barnett shales, the Niobrara formation, and conventional and unconventional plays in the Permian Basin.
The administration of Pennsylvania Gov. Tom Corbett said new natural gas pipelines should be allowed to share rights-of-way (ROW) with roadways, one of 16 policy recommendations made to fulfill a requirement of the Marcellus Shale law, Act 13. The recommendations were contained in a 20-page report to the General Assembly on placing gas gathering lines. On the recommendation to share ROW, the Corbett administration pointed to this year's repeal of a portion of the state's Limited Access Highway Law, which dates to 1945. "Section 3 [of the highway law] was repealed in part...to encourage the creation of public-private partnerships and should be further repealed so as to permit the sharing of ROW where appropriate," the report said.
The Railroad Commission of Texas (RRC) has released revised draft amendments relating to the well integrity rules for well casing, cementing, drilling and completions, cathodic protection wells, and seismic holes and core holes. The draft revisions are being circulated for an informal comment period until Dec. 31. Revisions are proposed to rules relating to cement sheath thickness; drilling fluid programs; isolation of productive zones; surface casing testing; cement specifications, quality and requirements; new requirements for wells that are to be hydraulically fractured (fracked); minimum separation of wells to be fracked; and well control/blowout preventer and pipeline shut-off valve requirements.
The Pennsylvania Superior Court has ordered the Washington County Court of Common Pleas to reconsider a request by two newspapers to have court records in a water contamination case unsealed. The parent companies of the Pittsburgh Post-Gazette and the Observer-Reporter had petitioned the lower court to unseal the settlement agreement reached in Hallowich v. Range Resources Corp., No. C-63-CV-201003954. According to court records, Range Resources Corp., MarkWest Energy Partners LP, MarkWest Energy Group LLC and Laurel Mountain Midstream were sued in May 2010 for alleged contamination of groundwater. A settlement agreement was reached one year later, but the proceedings were sealed.
Dow Chemical Co. has applied for a federal air emissions permit to build a $1.7 billion ethylene facility in Freeport, TX, which would be the chemical manufacturer's biggest in the world. The Midland, MI-based company said in its application to the U.S. Environmental Protection Agency that construction is scheduled to begin in January 2014 with start up in 2017. The facility would have capacity to make 1.5 million tons of ethylene a year, according to Dow, which is North America's largest consumer of propylene and the largest producer of ethylene.
Central New York Landowner's Coalition, which supports natural gas development, has established a legal fund to fight local bans and moratoriums on hydraulic fracturing. The group has more than 15,000 landowners that combined own about 220,000 acres not under lease, primarily in Chenango County but also in Otsego and Delaware counties. The group has raised more than $3,000 through pledges or donations. The CNY is also a member of the Joint Landowners Coalition of New York Inc., which also has conducted similar efforts (see NGI, Oct. 8).
Calgary's Tervita Corp. has been selected to build and operate a facility in Carroll County, OH, to treat Chesapeake Energy Corp.'s produced and tophole drilling water from Utica Shale operations. Tervita would also provide an option to deploy a proprietary mobile processing system to treat flowback and produced water for reuse. "Tervita's treatment process will provide clean water and decrease our process costs, which will increase our efficiency with reusing water," said Chesapeake District Manager Tim Dugan. Tervita in November sold its drilling fluids business to Canadian Energy Services & Technology Corp.
Pacific Gas and Electric Co. (PG&E) has asked California regulators to reject a proposed list of penalties by the the California Public Utilities Commission's (CPUC) Consumer Protection and Safety Division (CPSD for the utility's shortcomings prior to the San Bruno, CA, pipeline explosion in 2010. PG&E said it "does not dispute the majority of the facts" in the case and reiterated that it agrees that its "procedures were not consistently followed." As a result PG&E records have shown that about 140 miles of the 5,767-mile system (about 2.4%) were erroneously designated as lower class locations than they should have been. In addition, at least nine miles (0.2%) had the wrong maximum allowable operating pressures.
Xcel Energy's Colorado utility has asked the Colorado Public Utilities Commission to approve annual gas utility retail rate increases averaging 3.6% and $113.8 million through 2015. Colorado's Clean Air Clean Jobs law called for some power plants running on coal to convert to gas or be closed, and more stringent federal pipeline safety rules also prompted the plan, which calls for a $40.4 million annual gas rate hike or 2.1%, for residential customers next year. Public hearings are planned next spring and the case could be decided by late summer. Xcel plans to accelerate replacing its gas pipelines, many of which are more than 50 years old, as well as a steam plant in Denver. The plan also calls for converting the Cherokee coal-fired generation plant to gas. Costs would be spread over three years.
Three New York state lawmakers urged the state's Department of Environmental Conservation (DEC) to double a 30-day public comment period for proposed rules governing high-volume hydraulic fracturing, but the request appears to have been denied. New York State Assemblymen Richard Gottfried (D-Manhattan), Robert Sweeney (D-Lindenhurst) and Charles Lavine (D-Glen Cove) asked DEC Commissioner Joseph Martens for the extension. But DEC spokeswoman Emily DeSantis reiterated that the comment period would conclude on Jan. 11. A series of delays in the environmental review has kept the moratorium in place since 2008 (see NGI, Dec. 20, 2010).
The cost of integrating expanded wind power sources into the overall generation mix in the Pacific Northwest was reduced fivefold in the past two years through greatly reduced natural gas prices, according to a draft updated 2012 integrated resource plan (IRP) by Portland, OR-based PacifiCorp. In a draft report, the MidAmerican Energy Holding Co. utility characterized a combination of changing power and natural gas prices on the cost of wind integration as "significant." PacifiCorp concluded that the overall cost of wind integration this year is $1.89/MWh, compared to nearly $10/MWh two years ago. The average gas price used in the 2010 IRP at Opal, WY, was $5.36/Mcf, compared to $3.43/Mcf this year.
Alaska Gov. Sean Parnell recently met met with Korea Gas Corp. (Kogas) CEO Kangsoo Choo to discuss exporting liquefied natural gas (LNG) to Asian markets. The meeting was a follow-up from one September between officials. "These efforts are critical because an Alaska project must compete with other large-scale LNG projects under development around the world," Parnell said. Kogas is the world's largest LNG buyer, operating three LNG terminals and pipelines to supply gas to power plants, gas utilities and other buyers. The company has partnerships in LNG projects and producing fields around the world.
Don't expect the Department of Interior to issue a final rule addressing hydraulic fracturing on public lands before the end of the year, said the Western Energy Alliance's (WEA) Kathleen Sgamma, vice president of government and public affairs. The deadline "was more of a self-imposed deadline." After receiving 170,000 comments, "I think they just decided they couldn't get it done by the end of the year...Is it going to be two months, three months? I have no idea." The WEA said "it makes sense that BLM [Bureau of Land Management] is taking more time to adjust the rule, but we believe a wholesale rethinking is necessary. With an estimated cost to society of $1.5 billion [a year], BLM needs to slow down, conduct the economic analysis that was missing from the proposed rule, and consult with states and tribes. We believe if BLM performed that proper analysis, it would determine that a new, redundant rule is not necessary."
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