Springfield, MA, officials plan to ask Columbia Gas Co. of Massachusetts for $1 million to cover damages tied to the explosion on its natural gas system in late November. The explosion on the Columbia Gas system rocked Springfield in a three to four block radius, damaging 42 homes and businesses and sending 18 people, mostly first responders, to area hospitals (see NGI, Dec. 3, 2012). Human error by a utility employee was cited as the cause of the blast. According to the initial findings of the fire marshal and the state’s Department of Public Utilities, an unidentified employee of Columbia Gas “accidentally punctured” a pipe in the vicinity of a business on Worthington St., which was the epicenter of the explosion. The proposed settlement would be carved into three components, each carrying a $300,000 to $400,000 price tag. The first component would include fixed costs, such as damages to emergency vehicles, over-time costs and costs for clean-up activities, while the second component addresses personal injury costs and lost time for city workers. The third component would go toward a redevelopment effort of the area.

Even though it is suspended from obtaining new federal contracts by the Environmental Protection Agency (EPA), BP plc will be allowed to bid in the Gulf of Mexico (GOM) Central Lease Sale 227 on Wednesday (March 20), the Department of Interior said. Central Lease Sale 227, to be held in New Orleans, is offering 38.6 million acres offshore Louisiana, Mississippi and Alabama, which could lead to an estimated 1 billion bbl of oil and 4 Tcf of natural gas (see NGI, Feb. 11). If BP is the highest bidder and remains under suspension when the lease is awarded, it would be disqualified. The leases are awarded 90 days after a sale. “Concurrently, the previous second highest bidder will assume the position of the highest responsible qualified bidder,” the notice said. BP has not indicated whether it will participate in the sale. EPA temporarily suspended BP and its affiliates from new contracts, grants or other covered transactions with the federal government until it provided “sufficient evidence” that it met federal business standards after BP pleaded guilty to 11 felony counts and agreed to pay more than $4.5 billion in fines to settle criminal claims (see NGI, Dec. 3, 2012).

The Federal Energy Regulatory Commission approved Questar Pipeline Co.‘s application to build the ML 41 Project to provide high-pressure deliveries of natural gas for an expansion of a PacificCorp-owned and operated power generation plant in Utah [CP12-524]. Questar posted a notice in late 2011 of its intent to reserve 47,625 Dth/d of unsubscribed capacity for a future expansion, and an expectation that 42,375 Dth/d of capacity would become available from future expiring contracts. PacifiCorp signed a precedent agreement for the entire available firm transportation of 90,000 Dth/d for a 30-year term. The project calls for Questar to build a 4,700 hp compressor at its existing Thistle Creek Station in Utah County; replace 0.9 miles of existing 18-inch diameter pipeline; upgrade metering facilities; and modify the Oak Spring station. Costs are estimated at about $20 million. FERC has given the company a year to construct the facilities and place them in service.

The Ohio Department of Natural Resources (ODNR) has updated several maps and data charts for the Utica Shale and Point Pleasant formation. The ODNR’s Division of Geological Survey (DGS) released: an activity map of drilling in the Utica; a list of permits issued; a map showing the maximum value per well of the Upper Ordovician Shale interval; and a Total Organic Carbon (TOC) map. Earlier versions of the TOC map (see NGI, Aug. 27, 2012) demarcated the core areas of the play.

Carroll County, OH, and Chesapeake Energy Corp. affiliates continue to hold the lion’s share of permits issued and producing wells in the Utica Shale, according to Ohio Department of Natural Resources (ODNR) figures. As of March 9, ODNR has cumulatively approved 567 permits for oil and natural gas wells, and of those 268 wells have been drilled and 76 wells are in production. There are also 35 drilling rigs currently deployed in the state. Carroll County continued to lead in permits issued with 216, or 38.1% of the 567 total permits. Chesapeake Appalachia LLC and Chesapeake Exploration LLC held the most permits issued with 365, or 64.4%. Carroll County led in terms of production, too, with 39 of the 76 currently producing wells, or 51.3%. Chesapeake led operators in terms of producing wells with 50 of 76 (65.8% o). The ODNR issued 18 permits during the week of March 3-9. Of those, 10 were in Carroll County.

A Siena College Research Institute poll found 43% of New Yorkers oppose the Department of Environmental Conservation permitting high-volume hydraulic fracturing in parts of upstate New York, while 39% support the idea and 15% are undecided. The issue garnered support among suburban voters (42-36%), Republicans (57-30%) and men (46-41%), but it was opposed by New York City residents (42-36%), Upstate residents (49-39%), Democrats (46-32%) and women (45-32%). The Siena poll, released on March 11, surveyed 803 registered voters between March 3 and 7, and has a margin of error of plus/minus 3.5%.

The U.S. Fish and Wildlife Service (FWS) is extending the public comment period on proposed rules to list as endangered the gunnison sage grouse, which is found south of the Colorado River in Colorado and Utah, and to designate 1.7 million acres of critical habitat for the bird under the Endangered Species Act (ESA). FWS said it would accept comments until April 2. The House Natural Resources Committee has sent a letter to the Interior Department expressing concern about the scientific integrity of and the imposition of what it said were arbitrary deadlines on a decision to potentially list the sage grouse under the ESA. The letter called on Interior to release information related to the proposed listing, which “could restrict grazing, farming, mining and energy production on as much as 160 million acres throughout 11 western states,” wrote Committee Chairman Doc Hastings (R-WA). The FWS said it intends to issue a final determination on the two rules by Sept. 30.

A malfunctioning natural gas well owned by Carrizo Oil & Gas Inc. in Wyoming County, PA, was brought under control and capped on Thursday. Department of Environmental Protection (DEP) spokesman Kevin Sunday told NGI that the well began malfunctioning on Wednesday. About 5,400 barrels of wastewater from hydraulic fracturing were captured in tanks at the well site, which is in Washington Township. The incident is under investigation by the DEP. There were no injuries.

Water samples taken downstream of facilities authorized to treat wastewater from natural gas wells in the Marcellus Shale had elevated concentrations of chloride but not total suspended solids (TSS), although the obverse was true in samples collected downstream of watersheds with shale gas wells drilled on them, according to Resources for the Future. According to researchers, one facility that treats wastewater from shale gas wells causes downstream concentrations of chloride to increase by about 7%. They also found that TSS concentrations were elevated when downstream of a watershed with a shale gas well, and were about 5% higher when downstream of an additional 18 well pads. In 2011, the state Department of Environmental Protection, on order from Gov. Tom Corbett, told operators to stop delivering wastewater to treatment facilities in the state (see NGI, April 25, 2011). The report was published in the Proceedings of National Academies of Sciences.

A total of 29 parcels comprising 35,889 acres in a promising unconventional find in northeastern Nevada were sold to six companies for a total of $1.27 million by the Bureau of Land Management (BLM) during its quarterly oil and gas competitive lease sale held in Reno, NV. Billings, MT-based Lonewolf Exploration and Production Co. made the high bid of the sale: $163,840 ($128/acre) for a 1,280-care parcel in Elko County. Lonewolf also made the high bid per acre when it took a 157.3-acre parcel in Elko County for $152/acre, BLM said. Leases are for a period of 10 years with annual rentals of $1.50/acre for the first five years and $2/acre after that until production begins, when a royalty of 12.5% will go into effect. Half of the bid and rental receipts are to go to the state. BLM had offered 35 parcels totaling 45,562 acres in the lease sale. Nearly 41,300 acres that had been nominated for the sale were deferred by the BLM Elko District because those parcels were partially or entirely in Greater Sage-Grouse habitat. BLM’s next quarterly oil and gas sale, which will feature parcels in the Battle Mountain District, is scheduled to be held June 11.

Dutch-based chemical giant LyondellBasell Industries plans expand its cracker at Corpus Christi, TX, adding 800 million pounds/year (ppy) of ethylene capacity. Construction is scheduled to begin in 2014 and be completed by 2015. The company currently has six U.S. crackers with an annual capacity of 9.8 billion pounds. LyondellBasell said the expansion of its cracker in La Porte, TX, is scheduled to begin in late March with scheduled completion in 2014; it would add 800 million ppy of ethylene capacity. A third project to add 250 million ppy of ethylene capacity at the Channelview, TX cracker is scheduled to be completed by 2015. The company said it has begun the process of restarting a 260 million gallon/year methanol plant at Channelview, a project expected to be completed during 4Q2013.

Enterprise Products Partners LP has signed up enough customers to support a planned 270-mile pipeline header system to carry ethane from Mont Belvieu, TX, to petrochemical plants in the Gulf Coast region. The Aegis Pipeline would originate at Enterprise’s Mont Belvieu liquids storage complex and carry purity ethane to Texas and Louisiana facilities. Final design, capacity and delivery points are to be determined by binding commitments with shippers. Aegis is expected to begin commercial operations in 2014. An open commitment period for the project runs through April 9. Contact Russ Kovin at (713) 381-7925 or rkovin@eprod.com.

The Ohio Oil and Gas Commission has scheduled a hearing on April 12 for D&L Energy Inc.’s motion for stay of the Ohio Department of Natural Resources‘ (ODNR) decision to shut down the company. D&L says the ODNR’s decision to revoke six of the company’s permits, deny three permit applications and order a halt to all temporary storage operations near Youngstown was unfair because the person accused of dumping oilfield waste into a tributary of the Mahoning River on Jan. 31 is not a D&L employee (see NGI, March 11; Feb. 18). D&L CEO Ben Lupo, Hardrock Excavating LLC and a Hardrock employee, Michael Guesman, each face one charge of violating the federal Clean Water Act.

North Dakota Petroleum Council (NDPC) President Ron Ness told state lawmakers at a Senate Finance and Taxation Committee hearing that attempts to simplify state oil and gas taxes have become more complex and costly through the legislative process, which ends May 1. Dueling House and Senate bills (HB1234 and SB 2336) attempt to revise the 6.5% royalty tax paid on oil production. HB 1234 would simplify the tax code and encourage long-term oil development in the Bakken-Three Forks plays, but Ness said the industry would be better off with the current state tax policy. SB 2336, which has passed the Senate, would charge oil companies 9.5% on wells drilled after 2017, instead of the current 11.5%, in exchange for closing what the lawmaker says are loopholes used by oil companies. Current exemptions for stripper wells would be eliminated, providing an extra $50 million in previously lost revenue to the state.

The policy landscape of shale gas development has been “dominated” by contradictory opinions, but there are “pathways” to a consensus, according to an analysis by Resources for the Future‘s Center for Energy Economics and Policy, which published “Pathways to Dialogue: What the Experts Say About the Environmental Risks of Development.” The report is said to be the first survey-based, statistical analysis of the view of experts about the top environmental risks related to shale gas development from government agencies, industry, academia and nongovernmental organizations. Of the top “environmental burdens” that should be priorities, the “fluid burden” was identified most often: the naturally occurring radioactive materials found in hydraulic fracturing flowback and produced water, as well as in drilling fluids and cuttings.

The U.S. Coast Guard (USCG) last Tuesday responded to a collision between a tug pushing a barge and a Chevron Pipe Line Co. liquid propane gas (LPG) pipeline near Bayou Perot, 30 miles south of New Orleans. USCG received a report that the 47-foot tug Shanon E. Settoon was pushing a 154-foot oil barge when it collided with the pipeline at 6 p.m. CDT. All crew members were able to exit the tug; the captain suffered second to third-degree degree burns, according to USCG. “Chevron Pipe Line Co. has mobilized emergency crews to assist in the response…” the company said. Chevron “has shut in the impacted pipeline, which connects the Venice [LA] gas plant and the Paradis [LA] pump station.” The company said there was no impact to its operations as product was being rerouted around the shut-in pipeline segment. USCG was investigating the accident’s cause.

The South Texas Energy and Economic Roundtable (Steer), which claims to be “the most comprehensive Eagle Ford Shale resource in the region,” has opened its offices in San Antonio, TX, to serve as the facilitator and coordinator for communication, education and public advocacy surrounding the production of energy resources in South Texas. Steer said it aims to ensure that activities and advancements in the industry are responsibly addressed by guiding the energy sector and economic development progress in communities throughout South Texas. It was founded by 11 of the largest oil and gas operators in the Eagle Ford. Information is available at www.steer.com.

After more than 17 years of trading for Morgan Stanley, TeamLevine has formed independent brokerage Powerhouse. Based in Washington, DC, the company works with clients to protect profit margins and grow their business by designing and implementing hedging strategies, while focusing on price risk management using energy futures and related financial instruments. Powerhouse said its clients represent nearly all sectors of the energy supply chain, from producers to downstream distributors and retailers. Powerhouse also serves natural gas marketers and electric utilities with risk from energy price uncertainty. CEO Alan H. Levine, Elaine E. Levin, David A. Thompson and Brendan Burke began trading in January, and the brokerage added its 100th new account in February. “Reactions from the marketplace have been overwhelmingly positive. As an independent firm, we can be more nimble, and offer more highly tailored services and support to our customers,” said Alan Levin. Contact info@powerhouseTL.com or call (202) 333-5380.

Calgary-based Talisman Energy Inc. is considering a plan to exit shale development in Poland, a move that helps the company focus elsewhere but is also a blow to what was once considered Europe’s best source for shale natural gas and a hedge against pipeline gas supplies from Russia. According to Poland’s Ministry of the Environment, as of Jan. 1 the country has granted 245 concessions for oil and natural gas exploration, including 19 joint concessions. Talisman reportedly owns three concessions. Last summer, ExxonMobil Corp. ended its exploration efforts in Poland after disappointing results from two test wells drilled into the country’s shale plays.

A delegation from Russia’s Gazprom recently visited China and talked up the prospects for delivering Russian gas via a pipeline currently in development to the People’s Republic. Beijing hosted a meeting of Alexey Miller, chairman of the Gazprom management committee, and Jiang Jiemin, chairman of the board of China National Petroleum Corp. “The parties addressed a wide spectrum of issues surrounding the companies’ cooperation in the gas sector,” Gazprom said. “Special focus was laid on key commercial and technical parameters of pipeline gas supplies to the People’s Republic of China market, particularly, from the Power of Siberia gas pipeline. It was noted that joint efforts had been ramped up to sign a contract for Russian gas supply to China in 2013.” China’s gas market is viewed as a major prize by would-be exporters of liquefied natural gas in the United States, Western Canada and elsewhere.

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