Greater

Unconventional shale gas in the United States has proved to be a boon to the domestic economy, but if it’s only a “bridge” to a low carbon future, efforts have to be stepped up to “prepare a landing at the other end” — and that won’t be easy, energy economists said in a new report.

The Interior Department and Energy Department (DOE) budget for fiscal year (FY) 2013 have little in them for oil and natural gas producers to cheer about. President Obama calls for the repeal of oil and gas tax breaks, a new onshore inspection fee, a hike in the existing offshore inspection fee and the repeal of royalty incentives for “deep gas” production on the Outer Continental Shelf (OCS).

More than 1,765 miles of natural gas pipeline with a total capacity of 12,549 MMcf/d were placed in service last year, up from 1,162 miles and 11,865 MMcf/d in 2010, but pipeline capacity certified by FERC was down significantly in 2011 compared with 2010.

More than 1,765 miles of natural gas pipeline with a total capacity of 12,549 MMcf/d were placed in service last year, up from 1,162 miles and 11,865 MMcf/d in 2010, but pipeline capacity certified by FERC was down significantly in 2011 compared with 2010.

February natural gas posted its fifth consecutive decline for the week and posted a new 28-month low Friday as traders noted greater confidence in longer-term weather models showing a strong warming trend toward the end of the month. At the close February had dropped 2.7 cents to $2.670 and March had fallen 2.4 cents to $2.713. February crude oil retreated 40 cents to $98.70/bbl.

Recent production test results from the first two horizontal wells completed in the Tuscaloosa Marine Shale (TMS) in Louisiana have been encouraging and there is likely more good news to come, according to the state’s Department of Natural Resources (DNR) secretary.

Western Gas Partners LP. agreed to acquire the Red Desert Complex and related assets, primarily located in the greater Green River Basin of southwestern Wyoming from parent Anadarko Petroleum Corp. for $483 million. Included in the purchase is Anadarko’s 100% ownership interest in Mountain Gas Resources LLC (MGR), which owns the Red Desert Complex, a 22% interest in Rendezvous Gas Services LLC and related facilities. Red Desert represents most of MGR’s cash flow (90%) and includes the Patrick Draw processing plant with a capacity of 125 MMcf/d, the Red Desert processing plant with a capacity of 48 MMcf/d, 1,295 miles of gathering lines and related facilities. Rendezvous owns a 338-mile mainline gathering system serving the Jonah and Pinedale Anticline fields in southwestern Wyoming, which delivers gas to WES’s Granger Complex and other locations. Red Desert and Rendezvous together are expected to generate more than 98% of MGR’s operating cash flows. The acquisition is scheduled to close in January.

Cheaper heat, lower prices for electricity and cleaner air all could be possible for residents of Fairbanks, AK, and rural areas with greater reliance on natural gas, according to a newly released report.

Producers operating in the Barnett Shale town Arlington, TX, will have to comply with new rules enacted Tuesday that call for greater drilling site security and improved aesthetics of drilling locations for future wells. Surveillance cameras will be required at drilling locations, and the use of diesel-powered rigs is banned within 450 feet of residences and other designated places. The vote was 7-0 in favor of the ordinance revision with one council member absent and one seat unfilled. Previously, some members had expressed reservations about the changes, saying they might be too onerous for the industry. One change that favors drillers is the allowance of concurrent applications for specific-use permits and gas well permits. Council initially approved the rules last month (see Shale Daily, Nov. 21).