Monday, December 30, 2013

Top natural gas stocks for 2014

After a solid year for the energy sector in 2013 and with natural gas usage seen to surge in the coming years, many investors are now training their sights on the right fuel that can rake in profits in 2014.

Image Source: ect.coop

As a year ender, listed below are some natural gas stocks projected to drive the U.S. energy markets throughout 2014:

Oasis Petroleum. Through acquisitions and well completions in, Oasis has increased its proved reserves by more than 80 percent for the past two years. Exploring oil and natural gas in the Montana and North Dakota regions of the Williston Basin, the per-share profits of the company in 2014 are projected to grow 33 percent.


Image Source: istockanalyst.com

Chesapeake Energy Corp
. According to analysts in Morning Star, Chesapeake has long been one of the most aggressive operators in U.S. exploration and production. Surviving near collapses in the late 1990s and in 2008, the natural gas company has positioned itself dominantly in emerging plays through its vast network of land brokers and a general willingness to offer more favorable lease terms than its competitors.

Image Source: comcast.net

Devon Energy Corp
. The company is projected to receive a big payoff in 2014 with its recent acquisition in Eagle Ford Shale, which has been one of the most actively drilled targets for oil and gas in the United States since 2010. According to Devon, the company’s current 25 percent oil production could climb closer to 31 percent next year with the inclusion of the new Eagle Ford position, which sits on an estimated reserve of 691,000 barrels of oil a day.


With more than 30 years of industrial and academic experience, Dr. Ali Ghalambor has been contributing studies about the efficient production of natural gas. Learn more about his insights about the natural gas industry by following this Twitter page.

Sunday, December 29, 2013

The annual energy outlook 2014

Image Source: marist.edu
A few weeks before the end of year, the Energy Information Administration (EIA) unexpectedly released early projections for the energy sector through the annual energy outlook 2014 (AEO2014). The 20-page preview—to be fully published in spring 2014—includes projections of the U.S. energy supply, demand, and prices through 2040.


Based on this official report extracted from EIA’swebsite, here are some of the major highlights included in AEO2014:

Natural gas and crude oil will continue to reshape the U.S. energy economy. Domestic crude oil production will continue its surge, adding another 800,000 barrels per day in 2014 and about the same number of barrels in 2015. By 2016, consumers could be looking at 9.5 million barrels per day, approaching the historical high of 9.6 million bpd back in 1970. Moreover, ongoing improvements in advanced technologies for crude oil and natural gas production will continue to lift domestic supply and reshape the country’s overall energy economy.

Image Source: istockanalyst.com

Low natural gas prices will boost natural gas-intensive industries.
The report insists that low natural gases will continue to boost the American industry, with the bulk of chemicals expected to grow by 3.4 percent per year to 2025. This implies that U.S. chemical industry will be about 45 percent bigger in volume 10 or 11 years from now.

Natural gas will replace coal as the largest source of U.S. electricity. By 2040, EIA predicts that natural gas will account for 35 percent of total electricity generation, while coal will account for 32 percent. In addition, the production of natural gas is also poised to increase 56 percent between 2012 and 2040.

Image Source: usnews.com

Dr. Ali Ghalambor has received various technical awards from the Society of Petroleum Engineers and the American Petroleum Institute. To learn more about his insights and expertise in the natural gas industry, visit this blog.

Monday, December 23, 2013

REPOST: How Real Is Greece's Oil And Gas Future?

Greece could potentially be home to 4.7 trillion cubic meters of gas according to the American-Hellenic Chamber of Commerce. Read more in this Forbes.com article.

If you’ve been watching Greece’s recent energy push lately, it’s been difficult not to get too excited about the country’s potential. From political commentators to Prime Minister Antonis Samaras himself, the message has been enthusiastic and clear – Greece is home to billions of barrels of oil, trillions of cubic meters of gas and most importantly for a country saddled with the longest recession in modern history, billions in potential revenue.

Over a dinner organized by the American-Hellenic Chamber of Commerce in Athens last week, Samaras told a gathering of political and business leaders that Greece could be home to 4.7 trillion cubic meters of gas could one day provide up to 25 percent of European demand. If they could manage to combine this with already active efforts by Cyprus and Israel, this amount could climb to 50 percent and not just for the short term, but for the next 30 years.

The speech came almost a month after Samaras had presented new findings to a collection of international energy firms, including Chevron CVX -0.36%, Eni, ExxonMobil and OMV, that “revealed geological analogies between the underwater area of the North Ionian and Italian and Albanian regions of the sea where oil and natural gas have already been found”. It also reflected earlier comments Samaras had made to President Barack Obama during a visit in October. Speaking for the national government, the prime minister’s message was undeniable – Greece has real potential to be an energy force in the region.

However, as Athens current leadership presents a lucrative path towards energy independence and export options, some of the country’s energy sector leaders are rolling their eyes at the rhetoric, while taking a more cautious approach to what Greece is actually capable of doing. There is potential for domestic potential is there, they say, but even meeting domestic demand is a dream that is incredibly far away.

“I think its interesting when politicians run ahead and say things like we’re going to be major producers and solve all the energy problems of the country, create huge funds for future generations,” said Hellenic Petroleum CEO, John Costopoulos. “All of this needs to be tempered with logic and data.”

Energy leaders have also taken issue with the evidence most commonly cited as proof of Greek potential and those promoting it, especially in the broader media reports.

“If you turn on the TV, you’ll hear some pretty interesting reporters – not mainstream usually – people bring them onto their shows to discuss these things, which are ex-professors or frustrated scientists or fired managers from companies like ours who are looking for jobs for themselves,” Costopoulos said. “They usually begin to bring out these amazing stories like Crete, the island, sits on a planet sized reserve of hydrocarbons.”

Although he said he was in attendance during the Prime Minister’s speech, Costopoulos said he had not heard his comments about meeting Europe’s broader gas needs so he could not comment on this speech.

In Search Of Good News

Samaras’s comments in Athens last week are certainly understandable. After all, he was addressing business leaders and potential investors in dire need of some good news about an economy in its sixth consecutive year of recession. The promise of not just meeting domestic demand, but moving towards a thriving export market is the kind of thing that makes it easier to cope with a recent OECD report released promising another year of economic contraction.

Still, energy sector leaders have grown frustrated with the government’s enthusiasm, suggesting that it not only does not help attract needed investment, but may actually make it harder.

“They should stop misguiding the public with announcements and promises that they cannot deliver,” said Mathios Rigas, Chairman and CEO Energean Oil and Gas earlier that day. “The previous prime minister said that by December 2012, we would see first oil. Another minister said we would have drilling by 2012, but we haven’t even finished the licensing process. Then there are others that say that there will be billions of oil found in Greece – billions in value. It creates a public expectation about the huge impact oil and gas will have on Greece. They even created a fund that manage the income that will come from oil and gas revenue”.

Rigas went on to say that the focus should be on creating a long term energy plan for the country and focusing on the three licenses the country offered in early 2012, which have remained incomplete due to delays related to environmental approval and contract details.

“We should congratulate the government and the minister for starting the process, but we have to be realistic about the expectation and the timing,” Rigas said. We need a long term plan, a national strategy, not just a political party strategy – a national strategy that everyone can agree on.”

In the short term, Rigas and others said the government should focus on simplifying the approval process and in the case of new exploration and production efforts, address appeals to include a clause in new contracts that would ensure that “tax and fiscal regimes” stay in place, no matter what happens in the coming years. While an extra clause pledging that a contract remain intact and honored may seem redundant, the appeal is understandable considering recent events in Euro-crisis economies. In an attempt to chip away at a sizable energy sector deficit, Spain moved to reduce support schemes for solar energy, including retroactive cuts, earning the government legal challenges from a number of investment firms. Similar government moves in Italy and Greece has led to a reasonable suspicion of any new government contract.

“Greece has a habit of changing policies – changing tax rates – not just with oil and gas – everywhere,” Rigas said. “There is no way any company is going to sign contracts without knowing what the tax regime is going to be. These are investments that can last for 25 years – they won’t take the risk if next year they say, No more 25 percent tax – now it’s a 40 percent tax.”

Concerns over the clause also stem from the fact that Greece has had three governments in the last four years and with it, three different policies on oil and gas exploration. While the country’s current Minister of Environment, Energy and Climate Change Yannis Maniatis endorsed the country’s hydrocarbon potential on a panel earlier that day, there is no certainty that he or Samaras will be around next year.

The country’s current opposition leader Alexis Tsipras’s Syriza party has gained ground on Samaras’s center-right New Democracy in recent months, twice falling just shy of becoming the largest presence in the Greek parliament, according to a Financial Times report. In addition to promising to cancel the country’s current bailout agreement with international lenders, Tsipras’s Syriza has included the drawing back on memorandum of understanding reforms that relate to natural resource concessions. Representatives from Syriza did not respond to inquires about whether they would include the nationalization of oil and gas reserves in their plans, but have publicly said they would use energy revenues to “create a fund that would guarantee the viability of Greece’s social security system.”

Internationally renowned for his expertise and remarkable contributions, Dr. Ali Ghalambor has worked with the finest universities and organizations. To know more about him and his expertise, visit this Facebook page.

Thursday, December 19, 2013

REPOST: Mexican Oil And Gas: Christmas Arrives Early

A historic legislative initiative that reforms the country's energy sector have been approved by the Mexican Senate and Chamber of Deputies. This Forbes.com article has the details. 

pemex oil refinery
Image Source: forbes.com
On the morning of December 12th, Mexico woke up to the sound of fireworks as the country celebrated the festival of the Virgin of Guadalupe. A national holiday, the 12th marks the beginning of the Christmas festivities in Mexico, which will end on the 6th of January with the Dia de los Reyes (Three kings day or Epiphany). But for many in the energy industry, the fireworks and celebrations had a double meaning. The day before, the Mexican Senate and Chamber of Deputies approved a legislative initiative that reforms the country’s energy sector. As expected, the law includes measures to open the oil and gas industry to private and foreign investment, through cash, profit-sharing and production contracts. What is new, however, and is the result of the hard political bargaining that has taken place between the governing PRI and the PAN in recent weeks, is the legal entity of the “license”. Although the legislation still explicitly prohibits the use of concessions in the hydrocarbons sector, the license will act in a very similar way, with the idea that it will be applied to unconventional projects (primarily shale). This item made its way into the legislation thanks to the PAN insisting that the government adopt a more liberal approach to oil reform to secure PAN support in the aftermath of the deeply divisive fiscal reform process.

But this raises a rather serious problem. If a license is in fact almost identical to a concession, we should expect that there will be legal challenges to the contracts, arguing that they are equivalent to concessions and therefore explicitly prohibited. This creates a certain degree of legal uncertainty, something that the private sector will worry about, and which will act as a deterrent to investment.

As expected, the left-wing PRD party, abandoned the energy reform negotiations and the Pacto por Mexico (the highly effective bargaining mechanism between the three major parties), leaving the PRI and PAN to work out their differences. Protesters have formed a barrier around the Senate to keep legislators from getting to work, in fact Senators and their staff have been camped in the Senate building for the past week, leaving only briefly to get supplies. Though the wall that they built is quite impressive, the protest itself is rather sparsely populated, reflecting the mood of acceptance or resignation that prevails in the capital with regards to the energy reform.

At the last minute on Monday, it seemed as though the PRD might manage to delay the process by taking control of the Senate and preventing voting from taking place. Though PRD Senators held the chamber for four hours, it was a symbolic measure taken to placate the protesters outside rather than a serious attempt to derail the legislation. When they retreated, the Senate commissions voted and approved the bill, allowing it to be approved by the plenary session on Wednesday despite another vociferous protest by the left.

Before this happened, however, a further twist in the tail emerged. The PAN and the PRI agreed to a clause in the reform that removes the Pemex union, the STPRM, from the board of the company, drastically reducing organized labor’s control over the company. Ironically, this idea had been part of the PRD’s reform proposal, but made its way into the final bill via the PAN. The union has traditionally been seen as a strong ally of the PRI, and it is thought that its removal from the board reduces the PRI’s long-term influence over Pemex.

The legislation then passed to the Chamber of Deputies, in which a rapid vote took place, approving the law in the general form it was sent by the Senate. Minor negotiations still need to take place to approve the details of the law, but the final version will be completed by the end of this week. The speed of the legislative process was extraordinary, once a deal had been agreed between the PAN and the PRI.

Much still needs to be decided, in the way of secondary laws, implementation and institutional strengthening (in Pemex and the regulatory organisms), and the first half of next year will be dedicated to that. Nonetheless, it seems that 2014 will begin with the three kings bringing a gift for the energy industry in the form of a radically different oil and gas sector in Mexico, one that is ripe with opportunity.

Dr. Ali Ghalambor is an associate at Innovative Petrotech Solutions, Inc. For more updates, visit this Facebook page. 

Friday, December 13, 2013

REPOST: Experts Eye Oil and Gas Industry as Quakes Shake Oklahoma


According to this NewYorkTimes article, thousand of earthquakes in Oklahoma has been linked to the disposal of wastewater from oil and gas wells and hydraulic fracturing.



This fall her neighborhood in the northeastern part of this city has been shaken by dozens of minor earthquakes. “We would just have little trembles all the time,” she said.

Even before a magnitude 4.5 quake on Saturday knocked objects off her walls and a stone from above her neighbor’s bay window, Ms. Sexton was on edge.

“People are fed up with the earthquakes,” she said. “Our kids are scared. We’re scared.”

Image Source: nytimes.com
Oklahoma has never been known as earthquake country, with a yearly average of about 50 tremors, almost all of them minor. But in the past three years, the state has had thousands of quakes. This year has been the most active, with more than 2,600 so far, including 87 last week.

While most have been too slight to be felt, some, like the quake on Saturday and a smaller one in November that cracked a bathroom wall in Ms. Sexton’s house, have been sensed over a wide area and caused damage. In 2011, a magnitude 5.6 quake — the biggest ever recorded in the state — injured two people and severely damaged more than a dozen homes, some beyond repair.

State officials say they are concerned, and residents accustomed to tornadoes and hail are now talking about buying earthquake insurance.

“I’m scared there’s going to be a bigger one,” Ms. Sexton said.

Just as unsettling in a state where more than 340,000 jobs are tied to the oil and gas industry is what scientists say may be causing many of the quakes: the widespread industry practice of disposing of billions of gallons of wastewater that is produced along with oil and gas, by injecting it under pressure into wells that reach permeable rock formations.

“Disposal wells pose the biggest risk,” said Austin Holland, a seismologist with the Oklahoma Geological Survey, who is studying the various clusters of quakes around the state.

Oklahoma has more than 4,000 disposal wells for waste from tens of thousands of oil and gas wells. “Could we be looking at some cumulative tipping point? Yes, that’s absolutely possible,” Dr. Holland said. But there could be other explanations for the increase in earthquakes, he added.

Scientists have known for years that injection wells and other human activities can induce earthquakes by changing pressures underground. That can have the effect of “unclamping” old stressed faults so the rocks can slip past each other and cause the ground to shake.

The weight of water behind a new dam in China, for example, is thought to have induced a 2008 quake in Sichuan Province that killed 80,000 people. In Australia, a 1989 quake that killed 13 people was attributed in part to the opposite effect — the removal of millions of tons of coal during more than two centuries of mining.

In other places, including California and Switzerland, enhanced geothermal projects, in which water is pumped into hot rocks deep underground to produce energy, have caused quakes.

In Texas, some earthquakes have been connected to the industry practice of “water flooding,” increasing the yield of older oil wells by pumping water into nearby wells to force the oil out, said Cliff Frohlich, a University of Texas scientist. In other cases, Dr. Frohlich said, just the extraction of oil and gas from a long-producing field has been seen to induce quakes.

The practice of hydraulic fracturing, or fracking — injecting liquid at high pressures into shale rock — causes very small tremors as the rocks break, releasing trapped oil or gas. The technique has also been linked to a few minor earthquakes — in Oklahoma about a year ago, and in England and British Columbia. Yet unlike the continuing clusters of quakes elsewhere, the fracking-related earthquakes occurred only over short time periods, scientists say.

Of greater potential concern, scientists say, is wastewater disposal — from fracked or more conventional wells. Disposal wells linked to quakes have been shut down in a few states, including Arkansas and Ohio.

Along with oil and gas, water comes out of wells, often in enormous amounts, and must be disposed of continuously. Because transporting water, usually by truck, is costly, disposal wells are commonly located near producing wells.

The oil and gas industry points out that many of Oklahoma’s disposal wells are in areas with no earthquake activity, and that the practice of injecting wastewater has been going on for years.

“We’ve been doing this for a long time and it hasn’t been an issue before,” said Chad Warmington, president of the Oklahoma Oil and Gas Association.

But Dr. Frohlich said that what had changed was where the disposal was occurring. With the boom in production of oil and gas from shale formations, he said, “People are disposing of fluids in places they haven’t before.”

Still, it is difficult to show a definitive link between a group of quakes and nearby disposal wells, and Dr. Holland thinks there may be other explanations for some of the recent quakes, including the largest one, which occurred on a known fault line about 50 miles east of Oklahoma City.

Oklahoma does have natural seismic activity, he noted, and has had a few powerful quakes in the past, including one with a magnitude of 5.5 in 1952 and one estimated at about a magnitude of 7 that the geological record shows occurred 1,300 years ago. He also thinks changes in the water level of a large nearby lake may be responsible for some of the quakes around Oklahoma City, although he says this is not the most likely explanation.

The swarm of quakes has state regulators concerned, but cautious.

“We have to look at what data and scientific evidence supports some connection,” before deciding on steps to manage the risk, said Dana L. Murphy, a commissioner with the Oklahoma Corporation Commission. Theoretically, at least, the commission could order some wells to be shut.

Already the commission has reached an agreement with a disposal well operator in Love County, about 100 miles south of Oklahoma City, to reduce the amount of wastewater injected into his well. The facility had been operating for only two weeks, injecting up to 400,000 gallons of water a day from nearby fracking operations, when earthquakes started occurring in September, including one that toppled a chimney and caused other damage.

All the shaking in the state has people talking about what to do if a bigger one were to hit. “I’ve been through a lot of tornadoes — you can go hide from them,” said Bill Hediger, whose home in Edmond, just north of Oklahoma City, shows cracks in the walls from the magnitude 5.6 quake. “But you can’t hide from an earthquake.”

Dr. Holland said that given the geological record, he could not rule out the possibility that a larger quake may occur in the state.

Ms. Sexton said she was not against the oil and gas industry, but added that if the quakes in her area were definitively linked to disposal wells, they should be shut down.

“It would hurt oil and gas,” she said. “But it’s oil and gas hurting homeowners and making people fearful.”


Ali Ghalambor specializes in drilling trainings and consulting duties that aim to uplift the current status in the world of petroleum engineering. This blog site contains articles related to his expertise.

Tuesday, December 10, 2013

REPOST: Oil severance tax advocates are primed for battle

San Francisco launches an effort to get companies to pay for crude produced in California. Read more in this LosAngelesTimes article.

 Oil wells
Image Source: latimes.com



SACRAMENTO — California is the only major oil-producing state that does not tax the goo as it's pumped from the ground. And that seems bizarre.

After all, aren't we a high-tax state? That's what the antitax crowd keeps reminding us. And it's true for most taxes. California has the highest personal income and sales taxes. We're near the top on corporation and fuel taxes. Roughly in the middle on property and tobacco. Second lowest on wine.

Overall, we're ranked fourth in combined state and local tax burden, according to the nonpartisan Tax Foundation.

But on oil? Texas and Alaska — bastions of conservatism — both tax production. And we essentially don't.

Well, it's not quite that simple.

California doesn't have a specific tax on oil severance — or extraction or depletion, choose your word. But there are other levies oil companies do pay: corporation, sales and property (underground reserves). Also fees, to fund state regulation.

Their property taxes are limited by Proposition 13, although protecting oil reserves from the county assessor is probably not what voters had in mind when they approved the landmark measure back in 1978. Most property taxes on underground oil are collected by Kern County, the state's biggest oil patch.

All these taxes total around $6 billion annually, says Tupper Hull, spokesman for the Western States Petroleum Assn.

But those pushing for an oil severance tax cite legislative research showing that all levies combined add up to $4.22 per barrel in California. In Texas, they're nearly triple that at $14.33. A 10% severance tax would elevate oil company levies in California to Texas' level.

"We are an extreme outlier giving a huge tax break to some of the richest companies in the world," says Tom Steyer, a San Francisco hedge-fund billionaire who launched a crusade last week to collect more oil taxes. "It's a giant tax loophole for incredibly rich corporations."

In California, those companies are primarily Chevron, Occidental, ExxonMobil and Shell. Steyer says that foursome earned nearly $20 billion in profits last quarter alone.

As for their taxes amounting to only $4.22 per barrel, industry spokesman Hull says: "We have no idea how those numbers were developed." He contends the actual figure is many times that.

But there's no argument about this: California doesn't tax oil extraction, and every other significant petroleum state does.

California is the fourth-largest oil producer behind Texas, Alaska and North Dakota.

The fact that oil companies have always gotten off relatively easy here is a tribute to their muscle in Sacramento.

The Legislature passed a 9.9% extraction tax in 2009, but then-Gov. Arnold Schwarzenegger squashed it.

Last spring, state Sen. Noreen Evans (D-Santa Rosa) introduced an extraction tax bill that's still buried in a committee. It would impose a 9.5% per-barrel tax, raising an estimated $1.5 billion annually, 90% of it for higher education and the rest for parks and a disaster fund.

Evans says she plans to turn her bill into a statewide ballot measure for next November. That would require a difficult two-thirds legislative vote.

"Oil is a natural resource owned by all California," she asserts. "By not taxing it, we're giving the oil industry a huge subsidy at the expense of educating our children."

Copyright © 2013, Los Angeles Times

But it being an election year, legislators will be particularly skittish about voting to raise a tax of any kind, even if they're punting the final decision to voters. And Gov. Jerry Brown has informed lawmakers he wants to avoid all controversy while seeking reelection. Placing an oil tax on the ballot, however, could boost Democratic voter turnout in an otherwise yawner election. Steyer's strategy team hopes to organize college students to lobby the Legislature for an oil tax, with much of the new revenue committed to reducing tuition.

And that grass-roots effort could turn out young voters in November if there's a ballot measure. That could help Democratic candidates but wouldn't guarantee passage of the extraction tax. Even if Steyer — a clean-energy advocate and previously successful initiative warrior — donated tens of millions to the campaign, as he surely would, the oil industry would ante up even more. It spent $95 million in 2006 to defeat a ballot measure that would have imposed a 6% severance tax.

The industry spiel is easy to predict: It'd argue that the tax would be passed onto motorists at the pump — even if that is improbable, according to a Rand Corp. study.

"Companies sell for whatever the world price is, for whatever they can get," Steyer says. "That argument is extremely thin gruel. Good grief."

But, says Hull, "any economist will tell you that when higher taxes are imposed on a commodity like oil, production will be shifted to lower tax places. Companies have choices about where to make investments in the global arena. And California could lose jobs."

If the companies want to tap into California's large oil reserves, however, they can't do it in North Dakota. An oil field can't be moved out of state like some assembly plant.

Resisting pressure from environmentalists, the Legislature and governor last year refused to place a moratorium on fracking — an aggressive and controversial oil drilling method — and decided to regulate it instead. That's when Democrats missed the boat. They should have demanded that the industry pay a severance tax on the newly fracked oil. And it probably would have accepted that deal.

Dr. Ali Ghalambor is the author of the “Well Productivity Handbook,” explains in detail the
various components of the oil industry. Follow this Twitter page for more updates.

Sunday, December 8, 2013

The difficulty of widespread water recycling implementation in the fracking industry

Image Source: cenvironment.blogspot.com



For fracking operations to continue in the future without running against much opposition, more oil and gas producing companies must also consider the environmental effects of their operations. Among the pressing issues in the industry is the heavy use of clean water that could severely deplete the supply in an area. There have been efforts to make the recycling of water used in fracking more widespread but the costs involved have discouraged many companies from implementing such measures.

Oil and gas companies can easily obtain fresh water at a low price. In some estimates, the cost is a little over one cent per gallon. Additionally, in some states like Texas, the disposal of wastewater is much cheaper than the costs of recycling. In comparison, recycling adds costs for additional processes and transport and many companies are unwilling to take those on.


Image Source: business.financialpost.com


Necessity has forced many to reconsider, however. For instance, a drought in Texas has convinced more companies to consider produced wastewater as an asset rather than a liability. Meanwhile, the presence of water recyclers in oil fields is noticeably growing but there is still a long way to go before recycling becomes mainstream. With more improvements in this necessary step, what was once considered a revenue-draining requirement may be turned into an opportunity for additional profits.


Image Source: earthtimes.org


Dr. Ali Ghalambor is the author, co-author, and editor of several books and more than 160 technical articles and manuals on hydraulic fracturing and related topics. For more updates on the natural gas industry, visit this Facebook page.

A model for continued fracking operations

Image Source: wyomingoutdoorcouncil.org



If there is a model state for sustainable oil and gas drilling operations, the current bet is Wyoming. The state encourages oil and gas companies to continue with their fracking operations to extract natural gas, but requires them to do so carefully.

Without a doubt, fracking operations and harvesting natural gas lead to significant economic gains. However, as environmentalists fear, the economic boon could be offset by the dangers the method poses to the environment. Done improperly, fracking could adversely affect the clean water supply in a particular area.

For many states, the choice is between a clean environment and energy. For the energy-friendly state, however, there is a need and desire for both. Wyoming currently ranks at around fourth among states in natural gas production. How has it achieved balance?


Image Source: huffingtonpost.com


Recently, state legislators approved another energy production regulation issued by Wyoming. It involves one of the country’s strongest requirements for testing water wells around drilling sites to address fears of water contamination due to drilling operations. Previously, Wyoming also became the first state that required the disclosure of some of the chemicals used in the hydraulic fracturing process. It also recently implemented a measure that required drilling companies to monitor air pollutants at oil and gas production sites.

Implementing a regulation after another may give the impression that Wyoming is making operations hard for oil and gas companies. The aim, however, is to keep the oil and gas industry running smoothly.

Environmental groups are asking for more change but in comparison with other major oil and gas producing states, Wyoming is ahead with its regulations.


Image Source: wyofile.com


Dr. Ali Ghalambor is the author of the “Well Productivity Handbook,” a reference for petroleum engineers for modeling oil and gas production wells. For more updates on the natural gas industry, visit this Twitter page.

Thursday, December 5, 2013

REPOST: Shell opts out of US Gulf Coast GTL project

This news from Oil & Gas Journal shares the decision of Shell to not push through with the GTL project in the US Gulf Coast.

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Royal Dutch Shell PLC reported that it will not move ahead with a proposed 140,000 b/d Gulf Coast gas-to-liquidsproject in Louisiana and will suspend any further work.
Shell in September had set its sights on Louisiana for the proposed $12.5 billion, world-class facility (OGJ Online, Sept. 24, 2013).
Shell, an industry leader in GTL technology, said it “carefully evaluated a number of development options for GTL on the US Gulf Coast, using natural gas feedstocks.” It said, “Despite the ample supplies of natural gas in the area, the company has taken the decision that GTL is not a viable option for Shell in North America, at this time, due to the likely development cost of such a project, uncertainties on long-term oil and gas prices and differentials, and Shell’s strict capital discipline.”

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More news and updates about the world of oil and gas are accessible on this Dr. Ali Ghalambor Facebook page