Benefit

Producers that ply shale gas plays could someday benefit from increased insight into shale reservoirs courtesy of researchers at the University of Oklahoma (OU).

Houston-based Cabot Oil & Gas Corp., whose onshore operations are focused on three shale plays — the Marcellus, Eagle Ford and Haynesville/Bossier — said Tuesday it smashed quarterly production records in 3Q2010, with output hitting 36 Bcfe, which was a 41% jump year/year. Sequential production also rose 18%, exceeding guidance targets.

Changes that revised Alberta’s royalty regime earlier this year to the benefit of the province’s natural gas and oil producers were the impetus for record lease sales at the end of September, provincial leaders said.

Changes that revised Alberta’s royalty regime earlier this year to the benefit of the province’s natural gas and oil producers were the impetus for record lease sales last week, provincial leaders said.

The U.S. Supreme Court upheld a lower court’s decision that a distributor could owe county taxes on natural gas that it stores temporarily along the interstate gas pipeline system. Kansas City, MO-based Missouri Gas Energy (MGE), a subsidiary of Southern Union, challenged the Oklahoma Supreme Court decision, which held that MGE owed Woods County, OK, taxes for gas stored in the North Hopeton storage facility in the Oklahoma Panhandle. Before the high court, MGE argued that it was immune to the taxation under the the Commerce Clause. Millions of dollars were at stake in the case. Harriet Miers, former White House counsel and former President George W. Bush’s one-time nominee for the Supreme Court, filed the petition for certiorari in 2009 on behalf of MGE (see NGI, Oct. 19, 2009). At issue in the case was whether states and local governments have the power to tax a distributor’s natural gas that is stored temporarily in an interstate pipeline system.

Horizontal drilling into shale rock using multiple fractures (fracs) has “clearly” changed the game for the U.S. natural gas industry, but the drilling process also has the potential to give conventional gas formations, like tight gas sands, an economic boost, Raymond James & Associates Inc. said last week.

Renewable energy stands to benefit the most from Obama administration policies, but natural gas will be lifted as well, according to energy executives who responded to a recent poll. However, energy independence is wishful thinking for at least the next two decades, and mass production of power from renewable sources won’t come any time soon either, they said.

The economic downturn could be half over, and when it ends the oil and gas industry is poised to benefit from the upturn — if it prepares now for better days, according to Ernst & Young.

The oil and natural gas industry is positioned to lead and benefit from the commercialization of various carbon sequestration strategies, according to a report issued Feb. 12 by Cambridge, MA-based Emerging Energy Research (EER). The report concludes that there is a potential $30-70 billion annual industry waiting to emerge by 2030 in the carbon capture and storage (CCS) business.