Hot Dogs, BBQs…and Fracking

Kudos to Fuel Fix.com for cooking up a link between hot dogs and fracking in time for the Fourth of July – making the point that chemicals used in hydraulic fracturing are all around our daily lives, in some of the things we eat and other products that make our lives better.

Take the hot dog. Fuel Fix points out that the staple at cookouts, ballparks and fireworks displays often contains something called sodium erythorbate for fast curing and retention of the hot dog’s distinctive pink color. In fracking, it helps prevent precipitation of metal oxides, improving the process.

Going to a barbecue? Many BBQ sauces contain guar gum, derived from (you guessed it) the guar bean. In hydraulic fracturing, guar gum thickens the water in the fracking fluid, better suspending the sand that keeps tiny cracks in rocks open so oil or natural gas can be recovered.

It’s true: Not all of the stuff that goes into fracking fluid can be ingested by humans, yet these substances are found in things people use all the time. Check out Fuel Fix’s neat slideshow for a different way of looking at a drilling process that’s revolutionizing this country’s energy production.

Final point: The typical fracturing fluid is made up of 99.5 percent water and sand. Just half of 1 percent is chemical ingredients. See FracFocus.org for more information on fluid composition and other aspects of the hydraulic fracturing process, as well as the Energy From Shale website – and Happy Independence Day!

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Energy: It’s About Jobs

The latest jobs report, showing the creation of just 80,000 new jobs in June, is refocusing the political debate on the economy. How meager is 80,000 jobs? Well, according to UPI that’s “not even enough to keep up with growth in the working-age population,” which last month grew by 191,000. Meanwhile, a Rasmussen survey reports that only 31 percent of likely voters say the president is doing a good or excellent job handling economic issues.

Short analysis: It’s about jobs. Good news: It doesn’t have to be hard.

Energy-related job booms in North Dakota, Pennsylvania, Texas and other states are showing what’s possible – in terms of jobs, tax-revenue generation and associated economic growth – when energy development leads the way. The Institute for Energy Research’s Robert Bradley Jr., in an article for Oilprice.com:

"In North Dakota, where drillers are producing crude oil from the Bakken Shale, workers are finding jobs offering wages that are significantly higher than the national average. Truck drivers are being paid $80,000 a year to start. Some workers on oil rigs are being paid six figures. And yet many jobs are going begging. According to the mayor of Williston, 'A lot of jobs get filled every day, but it’s like for every job you fill, another job and a half opens up.' In April, North Dakota had a jobless rate of 3.0 percent, the lowest in the country."

Additional detail:

In Pennsylvania, Bradley writes, state analysis projects jobs for drill operators will grow nearly 85 percent this year (compared to sub-3 percent growth otherwise in the state).Expansion is occurring in Texas’ Eagle Ford shale play, Louisiana’s Haynesville Shale, Arkansas’ Fayetteville Shale and other energy-rich rock formations, “increasing domestic energy supplies, making energy more affordable, and spawning subsidiary investments in the private sector creating additional jobs.”A steel plant in Ohio is adding 200 jobs to produce more drill pipe.A planned ethane plant in Texas is expected to create 400 jobs.

Bradley:

"These jobs are being created by companies, not the federal government. And they are based on 'made in the USA' technologies that have the potential to greatly increase nation’s energy security and alter the world’s balance of power. As U.S. oil and natural gas supplies increase, some experts believe American energy independence is on the horizon."

On his blog, John R. Hanger connects energy production and employment:

"Jobs are a major product of that commerce and energy production. The 5 biggest energy producing states all have unemployment rates below the national average, but the same cannot be said about the 5 states producing the least energy." 

Meanwhile, Canada, which a few years ago staked its economic revitalization on energy, is looking for U.S. workers to fill anticipated job slots in Alberta. The Edmonton Economic Development Corporation expects a shortage of 114,000 workers in the coming months and has set up the aptly named opportunityawaits.com website to promote job openings. One U.S. veterans group is reaching out to former military personnel and active-duty soldiers who soon will transition to civilian life, encouraging them to consider oil sands and Keystone XL pipeline jobs in Canada. Fox News has a story, here. Again, the point is to recognize the dynamic economic power of the energy stimulus.

No question, U.S. jobs figures for June suggest a still-struggling economy. The administration says it’s not to blame, that there are limits to what a president can do to change the national economic trajectory. Indeed, a president has limited options – so perhaps the first move is to not stand in the way of growth.

Energy is a proven job creator, a shining sector in the weak economy. But the administration is making energy expansion harder, not easier. It is delaying construction of the Keystone XL pipeline, and it is restricting offshore energy development. Its permitting policies in the Gulf of Mexico have suppressed production there, costing jobs and economic opportunity throughout the region. It is sending confusing messages on hydraulic fracturing, the shale technology that is unlocking America’s ample energy potential.

America’s oil and natural gas companies are creating good jobs and can create even more. With the right policies this industry can add 1 million new jobs before the end of the decade. Here’s a blueprint for an American-made energy policy.  It’s energy, it’s jobs and it’s within our reach.

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Make TAPS the Gift That Keeps On Giving

Worth reading is U.S. Sen. Lisa Murkowski’s op-ed piece in the Juneau Empire, marking the 35th birthday of the Trans-Alaska Oil Pipeline System, or TAPS.

The Alaska Republican knows something about oil. She represents a huge energy state and would likely head the Senate Energy and Natural Resources Committee if the GOP emerges from this fall’s elections with a majority. She depicts TAPS as more than a conduit for crude from Alaska’s North Slope. It’s an economic pipeline as well – for the state and the rest of the country. Key facts:

TAPS is 800 miles long, running from Prudhoe Bay in the north to Valdez on the Gulf of Alaska.Since oil first started flowing in 1977, the pipeline has delivered more than 16.6 billion barrels.As Murkowski notes, three out of every 10 jobs in Alaska can be traced to TAPS.The pipeline has generated more than $171 billion in revenues to the state treasury. North Slope oil production allowed the state to terminate its income tax in 1980.

Murkowski writes:

“Oil wealth has paid for improving our roads, water and sewer systems, building parks, renewing our cities, and improving life in our most remote villages. The riches that Alaskans have extracted from under the North Slope have also funded our schools, and helped bring our health care system into the 21st century.”

The pipeline’s birthday is an excellent time to think about its future. Murkowski writes that at its zenith, TAPS carried 2 million barrels of oil per day. Now the daily flow is only about a quarter of that. Alaska has slipped behind North Dakota to No. 3 on the list of top oil-producing states (behind Texas). Here’s a chart from Gov. Sean Parnell’s office showing North Slope production decline, which has decreased TAPS’ flow: 

There are risks with reduced pipeline flow. According to the governor’s office, at lower flow levels it takes longer for oil to go through the pipeline, and at lower temperatures ice forms inside that can cause damage. Murkowski:

“Without new oil production, throughput in the pipeline could fall enough to threaten its future viability. Shutting down the pipeline would mean closing up shop on the North Slope. Alaska’s oil — like its massive natural gas reserves today — would be stranded with no way to market, leaving the state scrambling to replace the 85 percent of its annual revenue that today comes from oil.”

There’s a relatively simple solution: Produce more domestic crude oil to send through TAPS. The oil is there – offshore in the Beaufort Sea and the Chukchi Sea (where Shell hopes to sink exploratory wells this summer) and in the Arctic National Wildlife Refuge (ANWR), which Murkowski writes is the “largest single prospective onshore source for conventional oil in North America.” Some estimate ANWR could produce 1 million barrels of oil per day, which by itself would solve the under-capacity situation with TAPS while significantly boosting our country’s oil output. 

The problem is policy. ANWR continues to be held off limits by Washington, and development of Alaska’s offshore areas has been slow in coming – again, chiefly because the federal government has been slow granting approvals. Murkowski:

“The federally owned lands and waters to the east, west and north of Prudhoe Bay hold tremendous resources, but access has been slowed by an administration more interested in designating new wilderness than shoring up Alaska’s economy.”

We need policies that create sustained and predictable access to oil and natural gas on federal lands – in ANWR and elsewhere (see map below). Access = energy development, which will mean job creation, economic growth and a more secure energy future. And a great birthday present for TAPS.

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The New York Times, Shale and Editorial Oblivion

News that New York Gov. Andrew Cuomo has settled on a plan to allow hydraulic fracturing in five counties along the state’s border with Pennsylvania is obviously great news for those counties, many of them starved for the kind of well-paying jobs that come with shale development.

As for New York’s other counties that sit on top of energy-rich shale deposits, Cuomo’s plan raises questions – like this one from Anschutz Exploration’s Tom West, in an interview with Bloomberg:

“As a first step, this may be a way to get past all the hysteria. But if this is a permanent line in the sand, how do you compensate the people on the wrong side of the line?”

Great question. Stay tuned.

Meanwhile, though hardly hysterical, a New York Times editorial on the Cuomo plan is oblivious to some key facts about hydraulic fracturing (following Sunday’s pattern). Which makes you wonder whether the two pieces constitute a kind of passive-aggressive contribution to the news columns’ “war on shale gas.” Thursday’s editorial:

“More than a dozen states have encouraged extensive hydraulic fracturing. But the natural gas industry is poorly regulated, and the environmental risks are real. Reports of air and water pollution elsewhere have raised fear and opposition among many residents who live in New York’s portion of the gas-rich Marcellus Shale formation.”

“Poorly regulated” industry? How about a poorly researched editorial that misses – or worse, leaves out – EPA Administrator Lisa Jackson’s endorsements of the work states are doing to regulate hydraulic fracturing. We’ve practically got Jackson’s words memorized, but for the Times’ benefit (again), here she is last fall:

“We have no data right now that lead us to believe one way or the other that there needs to be specific federal regulation of the fracking process. … So it's not to say that there isn't a federal role, but you can't start to talk about a federal role without acknowledging the very strong state role.”

Here’s Jackson a couple of days later on MSNBC:

“States are stepping up and doing a good job. It doesn’t have to be EPA that regulates the 10,000 wells that might go in.”

Frankly, if there’s fear bubbling up over hydraulic fracturing in New York, if local questions have morphed into opposition, the Times has had a big hand in it with coverage that’s rife with inaccurate reporting and misrepresentations, collected here. And now two editorials that read like some folks just haven’t been paying attention.

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Cooking With Gas–And Loathing It?

The intersection of a recent anti-natural gas fundraiser at the trendy Brooklyn Winery – featuring fabulous culinary delights prepared by a group of talented chefs – and the natural gas that made the evening possible was, well, simply mouth-watering.

New York Daily News columnist Bill Hammond writes that the “Taste of the Marcellus” event last week was hosted by a group called Chefs for the Marcellus, to showcase the kinds of foods they say could be jeopardized if New York Gov. Andrew Cuomo OKs hydraulic fracturing in that state’s portion of the Marcellus Shale. Hammond:

"Guests were treated to eggplant-stuffed okra, smoked lamb belly with fermented tofu and whipped ricotta jewel on toast — along with wines from the Finger Lakes and beers from Cooperstown’s Ommegang brewery. The only thing more delicious than the menu was the irony, because many if not most of those dishes were cooked over the bright blue flame of natural gas. That’s right, the Chefs for the Marcellus saw nothing wrong with using the very same fuel they portray as a dire threat to the upstate countryside."

He writes that even stuff that wasn’t simmered or seared over a gas flame was chilled in refrigerators running on electricity, much of which no doubt was generated at natural gas-fired power plants. Same thing for the restaurant AC that kept the guests comfortable. Every cubic foot of gas used, he notes, came from a hole in the ground – a quarter of it (based on national averages) from the same hydraulic fracturing process the group opposes.

Then there’s this quote Hammond got from Chefs for the Marcellus organizer Hilary Baum – as tantalizing as the sungold tomato gazpacho with smoked trout that was part of the featured fare:

“We all cook with gas. We all use gas. But we have to be looking at developing alternative energy sources and not be so stuck on fossil fuels.”

To ice the cake, Hammond quotes the Manhattan Institute’s Robert Bryce:

“It’s easy to demonize the oil and gas industry. But getting along without the fuels they provide takes us back to the Stone Age.”

Amen. Pass the trout.

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Bakken Shale: Supplying Energy, Supporting Communities

Check out a couple of new videos from North Dakota in which Hess employees and others talk about how energy development in the Bakken Shale formation is changing lives and growing the state’s economy.

Part 1:

Part 2:

The narrative isn’t complicated. As Hess’ Steven Fretland notes in the first video, the Bakken is believed to hold between 8 billion and 40 billion barrels of oil reserves. Companies developing the energy resources need workers, and workers need places to live and services to support their lives. Fretland, who was raised in North Dakota, says Bakken energy is reversing historic trends:

“Younger kids, after they left, you know, you hated to see them go but then they come back and they decide … it’s where they’re going to have their home and raise a family and hopefully retire with the industry.”

In the second video, Hess’ Steve McNally says hydraulic fracturing that has revolutionized energy development is responsible for North Dakota’s jobs boom:

“The impact on the North Dakota area and the U.S. in the short term is numerous jobs. There’s a tremendous amount of employment opportunities here. For anyone who wants to work, you can get a job.”

The point, underscored in this new industry spot, is that fracking has made an old frontier state like North Dakota a new energy frontier. Previously unreachable shale resources are now available in abundance through responsible development. Learn more at Energy From Shale.org.

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American Energy Works: Jill

Jill is a district manager for Total Safety, a company that provides service solutions for various aspects of the oil and natural gas industry, as well as power-generation and industrial markets. For her, the industry is about future job security: “It’s really an industry that’s not going away.”

Her video:

Visit American Energy Works.org for more videos and information about the people who’re at work for America’s energy future.

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The Offshore Oil and Natural Gas Lease Sale We Need

Tomorrow’s scheduled Central Gulf of Mexico oil and natural gas lease sale in New Orleans will be the first in that area since March 2010. Setting aside for a moment the two-year gap in exploration and development caused by two years without new sales, tomorrow’s auction is important to America’s economic and energy security.

Unfortunately, the two-year gap is real and has real impact. Because it takes seven to 10 years for an offshore lease to start producing oil or natural gas, there’s a gap in the development timeline. It’s like a vintner who skips two years growing grapes; at some point in the wine-producing process there’ll be a lean vintage year. Here’s a chart that shows the stages and time requirements of offshore development:

A couple of other points about tomorrow’s lease sale, underscored by API’s Upstream and Industry Operations Director Erik Milito during a conference call with reporters: While it’s good the Bureau of Ocean Energy Management is holding the sale – which will generate significant industry interest – the areas in the Gulf being offered aren’t new, emphasizing the administration’s restricted approach to developing America’s energy resources. Milito:

“Every lease sale is important, but more important for our energy future than any individual sale is our nation’s broader energy policy framework. That, unfortunately, has been inadequate. The administration’s proposed five-year offshore leasing plan for 2012 through 2017 … would limit offshore development to where it historically has always been – parts of the Gulf of Mexico and offshore Alaska. It would restrict opportunities when it should be expanding them. It would not help prepare us well for our energy future.”

If the energy goal is to reduce oil imports, then tomorrow’s sale reflects a short-sighted vision that will struggle to take us there. Good news: It doesn’t have to be that way. America is energy-rich, with the resources, financial wherewithal and technological know-how to substitute domestic production for much of what we get now from foreign suppliers. It simply takes the right plan, the right approach.

With the right access policies – capitalizing on tight oil and shale gas discoveries, our offshore potential and increased supplies from neighbor and ally Canada – we could see 100 percent of our liquid fuel needs met by 2024, a little more than a decade away. Milito:

“We can do it safely. Industry continues to demonstrate a commitment to continuous improvement in operations to make things safer for our personnel, the public and the environment. In the offshore the industry, working closely with government, has enhanced its ability to prevent, contain and respond to a spill.”

Energy development is a long-term process. Limited vision and action sows seeds for the future. Milito:

“The proposed Department of Interior five-year plan is insufficient, and each year we implement it we will fall further behind what we really should be doing. The administration ought to begin working on a new plan immediately.  … Maintaining the status quo won’t work. Existing wells are continually depleting and need to be replaced with new discoveries. It is also important to open new areas for leasing so that industry can use new exploration technologies that will increase production.”

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EPA’s Costly, Unnecessary Soot Proposal

EPA continues to act tone deaf to the real-world needs of U.S. businesses and regular Americans. Its particle standards proposal issued this week is a good example of the kind of investment-squelching overregulation that ultimately could hurt the country’s energy future.

With the country’s air continuing to improve under the existing fine-particle soot standard, EPA proposed tightening it. The rule is scheduled to be finalized in December. Howard Feldman, API’s directory of regulatory and scientific affairs, says the rule’s benefits aren’t worth its costs:

“Air quality will continue to improve dramatically under the current government standards, but EPA’s proposal could substantially increase costs to states, municipalities, businesses and ultimately consumers without justified benefits. We are concerned that it could come at a significant economic cost and lost investments and limit our ability to produce the energy our nation needs.”

Between 2000 and 2010 concentrations of fine-particle soot fell by 27 percent, according to EPA. Feldman says three-fourths of Americans today live in areas where air quality meets today’s standards, and that the trend will continue – which suggests the new standard is unnecessary.

Feldman also says EPA based its proposal on “faulty scientific analysis,” that important data have been ignored and some of its purported findings are actually misinterpretations. How tightly the standards are set is a policy judgment. Because there is no bright line to guide the standard setting, the impacts of the standards matter. Feldman:

“A more stringent rule will discourage economic investment in counties that fail to meet new federal standards.  It’s in our interest to have both clean air and a vibrant domestic economy. However, the new standards would put many regions out of attainment, and companies considering a place to build a plant or refinery could perceive non-attainment as non-investment.”

Again, in the context of an economy trying to regain its footing, EPA is tossing out banana peels – with potential costs on a number of fronts that ultimately will hit real people. This economic anti-stimulus also is an unnecessary energy impediment.

It illustrates why, if we’re serious about a secure energy future, a common-sense regulatory structure is needed. By that we mean a regulatory process that’s open to all and based on sound science and legitimate cost-benefit analysis. By that standard EPA’s proposal falls well short.

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