Friday, August 3, 2012

Hailing the Chief’s Support for Natural Gas Development, Fracking

President Obama deserves credit for standing fast in his support for natural gas development through hydraulic fracturing – especially given the no-to-natural gas approach taken by some of his supporters in the environmental community, including the Sierra Club. Here’s the president on Monday in Cincinnati:

“… We’re moving in the right direction in terms of energy independence. Now, part of that is this boom in natural gas.  And this is something we should welcome, because not only are we blessed with incredible natural gas resources that are now accessible because of new technologies, but natural gas actually burns cleaner than some other fossil fuels, and is an ideal fuel -- energy source that we potentially can use for the next 100 years.  So I want to encourage natural gas production.  The key is to make sure that we do it safely and in a way that is environmentally sound.”

The president is spot on – and as a response to a negative question about natural gas, his remarks were all the more remarkable. Because of abundant, affordable gas, made accessible through fracking, the global energy balance could be shifting. The president continued:

“Now, you always hear these arguments that somehow there’s this huge contradiction between the environment and economic development, or the environment and energy production.  And the fact of the matter is that there are a lot of folks right now that are engaging in hydraulic fracking who are doing it safely.”

This also is true. The oil and natural gas industry has focused on making hydraulic fracturing safer and more efficient through a set of standards that guide operators, and it has worked with states to develop regulatory regimes tailored for their specific conditions. The president went on:

“The problem is, is that we haven’t established clear guidelines for how to do it safely, and informed the public so that neighbors know what’s going on, and your family, you can make sure that any industry that’s operating in your area, that they’re being responsible.”

Well, OK. The president is mistaken or misinformed on that point. Industry has been clear and detailed in developing the standards mentioned above. It also has supported FracFocus.org to create transparency about fracking itself – a website community members can use to learn where wells are being drilled in their area, as well as the chemicals being used in the fracking fluids themselves. The industry takes community engagement and support seriously and is committed to getting shale development right.

Back to the president:

“What we’ve said is, look, we are going to work with industry to establish best practices.  We are going to invest in the basic research and science required to make sure this is done safely and in a way that protects the public health.  And for responsible companies, they should be able to operate, make a profit, and we can all benefit and put people back to work."

Best practices, we’re on it, Mr. President. Industry also is supportive of new technologies to improve operations, including those to reduce or even eliminate water use during the fracking process. Shale energy is creating jobs, thousands of them, and boosting the economy.


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Video: Refiner Plays Its Role in ND Energy Bonanza

The sights and sounds of energy-driven growth are all over this video, in which Ron Day of Tesoro Corporation talks about how the company’s Bismarck-Mandan oil refinery has grown along with development of North Dakota’s Bakken shale play:

For the benefit of the energy-jobs deniers out there, let’s underscore Day’s description of the multiplier effect associated with a growing energy sector, which is being seen across North Dakota, Pennsylvania, Texas and other energy states:

“We’re hustle and bustle. We’re growing. It’s a great opportunity for North Dakota: from restaurants to car parts stories, to repair shops – they’re definitely being impacted in a positive way (by energy development).”

Even better? America is energy rich, which means the North Dakota “miracle” can be repeated elsewhere – with the right policies and leadership.


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Innovation: Making Energy Production Cleaner, More Efficient

When we wrote last week about technologies to mitigate water demands during hydraulic fracturing, we knew we’d find more examples of energy innovation for the simple fact that there’s a lot of innovating going on. Here’s a little bit about two other advances in the area of fracking waste water, as well as another company’s initiative to make the development of Canada’s oil sands cleaner and greener.

Halliburton says it has a suite of solutions to reduce the demand for fresh water in hydraulic fracturing operations, called H2-Forward. You can read more about it, here. Basically, it’s a process that allows drillers to reuse fracturing fluid. Halliburton:

"The service includes new technologies such as CleanWave service that is used to process fracturing flowback and produced water, resulting in a clean brine fully suitable for well site operations including drilling, fracturing and completion fluids. … The system, which can treat 20 bbl/minute, uses an electrical process that destabilizes and coagulates suspended colloidal matter in water. Easy scalability enables quickly treating large volumes of water in reserve and flowback pits and, depending on the operation, treating flowback and produced water in real-time during a fracturing operation. The CleanWave system removes up to 99% of total suspended solids, heavy metals, hydrocarbon and bacteria."

Meanwhile, Pennsylvania-based Epiphany Solar Water Systems’ main product is a system that uses solar power to clean fracking waste water. Consol Energy, which is active in the Marcellus Shale area, recently announced it is investing $500,000 in Epiphany and will run a test site for the purification system beginning next month.

Here’s Ephiphany’s description of its technology:

"Dirty water passes into the distillation unit and instantly vaporizes due to the intense heat focused on the distillation unit. During the vaporization process, any dissolved solids … separate, and living organisms (bacteria) are killed due the intense heat. The water vapor (now void or any impurities) continues to pass through the distillation unit. As the steam reaches colder stages it begins to condense back down into distilled water. From the output of the distillation unit then comes freshly distillated water, safe for consumption."

Calgary-based N-Solv Corporation is promoting a technology it says will reduce the amount of energy needed to produce bitumen from oil sands, while reducing greenhouse gas emissions 85 percent without using any water. A $60 million field test in Alberta is scheduled for next April. It uses warm solvents such as propane or butane to melt the bitumen deposits, which the company says is more efficient than using in-situ steam technology. You can read more about it on the company’s website, here.


View the original article here

Video: Refiner Plays Its Role in ND Energy Bonanza

The sights and sounds of energy-driven growth are all over this video, in which Ron Day of Tesoro Corporation talks about how the company’s Bismarck-Mandan oil refinery has grown along with development of North Dakota’s Bakken shale play:

For the benefit of the energy-jobs deniers out there, let’s underscore Day’s description of the multiplier effect associated with a growing energy sector, which is being seen across North Dakota, Pennsylvania, Texas and other energy states:

“We’re hustle and bustle. We’re growing. It’s a great opportunity for North Dakota: from restaurants to car parts stories, to repair shops – they’re definitely being impacted in a positive way (by energy development).”

Even better? America is energy rich, which means the North Dakota “miracle” can be repeated elsewhere – with the right policies and leadership.


View the original article here

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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Innovation: Chevron’s ‘i-field’ Links Performance, Savings

USNews.com has a good read on Chevron’s digital investments, which the company says will save up to a billion dollars a year in operating costs in 2016. The linchpin is Chevron’s digital oil field, the “i-field,” which is short for “intelligent field.” USNews explains:

“Chevron's i-field harnesses advanced technology and communications to improve performance at 40 strategic assets throughout the world, including some of its biggest and most productive oil and gas fields. The company is rolling out six to eight mission-control centers focused on separate business areas, ranging from machinery to drilling to wells and reservoirs, that monitor those assets in real-time and rely on sophisticated computer algorithms for early detection of problems. From Chevron's perspective, the i-field is now essential to its global operations, which span six continents.”

Chevron isn’t the only company doing these things (USNews notes that Shell and ConocoPhillips have their own versions), but it is recognized as one of the oil and natural gas industry’s leaders. Basically, to overcome the global and labor-intensive characteristics of oil and gas development, Chevron has digitized a number of its operations. USNews:

“Chevron has deployed thousands of tiny sensors, only millimeters or centimeters in size, that monitor field operations and transmit data, both wired and wirelessly, back to central locations. The sensors instantaneously track pressure, temperature, and other readouts and aid with the mapping of underground fuel deposits, allowing the company to maximize production. Chevron also employs analytics to evaluate data streams in real-time from oil wells, drill rigs, ships, and elsewhere.”

The company has two mission-control facilities in Houston that oversee drilling and machinery support and two others in Lagos, Nigeria, and Covington, La., that monitor deepwater drilling. USNews:

“High above Houston in an office tower, a tech-savvy team at Chevron's machinery support hub monitors thousands of pieces of equipment, in real-time, across every continent except Antarctica. Using software to analyze data transmitted by sensors, it conducts ‘predictive intelligence’ to pinpoint when equipment, such as rotating devices called compressors, needs maintenance ‘so we can change out parts before they break down,’ [Chevron Energy Technology President Paul] Siegele says.”

USNews includes some examples where the technology came into play. The machinery support center sensed that a compressor in one of Chevron’s Asian business units was experiencing valve failure. On-site inspection confirmed the problem and the valve got fixed. Another time, equipment at Chevron’s Sanha oil and natural gas field off the coast of Angola was showing an irregularity, which the team in Houston detected. A repair was made, and the company saved millions of dollars in potential damage and lost production.

Again, Chevron figures it already is saving in the millions of dollars and says that will become billions when the “i-field” and a general operational overhaul are fully implemented in four years. Efficiencies and savings, of course, mean innovating companies, like Chevron, can invest more in energy exploration and development, which is a good thing.


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Philadelphia Story: Energy From Shale and Jobs

Energy produced from shale deposits by hydraulic fracturing continues to create jobs far from the drill site.  The latest example: Improved economics have allowed for a deal to keep a Philadelphia refinery open, which means 850 workers will keep their jobs – and the facility’s new majority partner says hundreds more could be added if plans to expand production come to pass. Philly.com had the story last week.

Those refinery employees – and the local/regional economy that is supported by the installation, as many as 10,000 indirect jobs by one estimate – can thank the Carlyle Group, and they can also thank the Marcellus Shale. Philly.com:

"Carlyle officials say they are 'reimagining' the business to exploit new, cheaper domestic sources of crude oil to replace expensive imported petroleum, a major reason the refinery was uncompetitive. …  Carlyle, which will have a majority interest in the venture and operate the refinery, also plans to increase dramatically the use of low-priced natural gas from Pennsylvania's booming Marcellus Shale region to reduce refining costs and emissions. 'We believe the changing nature of the energy paradigm in the U.S., coupled with a redefined operating model, can truly benefit this refinery,' Carlyle managing director Rodney S. Cohen said."

The Philadelphia story illustrates what some have been talking about when they laud the game-changing nature of energy from shale. It’s creating jobs (and saving them), reducing costs to manufacturers and helping them create jobs, reinvigorating the chemicals industry and more. It’s abundant and affordable energy that’s also helping out consumers.

We’ve seen the shale energy stimulus rippling through states like North Dakota, Texas and Pennsylvania. Ohio is gearing up for its own economic wave from shale. As for the Philadelphia refinery, studies, analyses and projections about shale energy are to become reality – real jobs, held by real people, saved.

Because of energy from shale.


View the original article here

Philadelphia Story: Energy From Shale and Jobs

Energy produced from shale deposits by hydraulic fracturing continues to create jobs far from the drill site.  The latest example: Improved economics have allowed for a deal to keep a Philadelphia refinery open, which means 850 workers will keep their jobs – and the facility’s new majority partner says hundreds more could be added if plans to expand production come to pass. Philly.com had the story last week.

Those refinery employees – and the local/regional economy that is supported by the installation, as many as 10,000 indirect jobs by one estimate – can thank the Carlyle Group, and they can also thank the Marcellus Shale. Philly.com:

"Carlyle officials say they are 'reimagining' the business to exploit new, cheaper domestic sources of crude oil to replace expensive imported petroleum, a major reason the refinery was uncompetitive. …  Carlyle, which will have a majority interest in the venture and operate the refinery, also plans to increase dramatically the use of low-priced natural gas from Pennsylvania's booming Marcellus Shale region to reduce refining costs and emissions. 'We believe the changing nature of the energy paradigm in the U.S., coupled with a redefined operating model, can truly benefit this refinery,' Carlyle managing director Rodney S. Cohen said."

The Philadelphia story illustrates what some have been talking about when they laud the game-changing nature of energy from shale. It’s creating jobs (and saving them), reducing costs to manufacturers and helping them create jobs, reinvigorating the chemicals industry and more. It’s abundant and affordable energy that’s also helping out consumers.

We’ve seen the shale energy stimulus rippling through states like North Dakota, Texas and Pennsylvania. Ohio is gearing up for its own economic wave from shale. As for the Philadelphia refinery, studies, analyses and projections about shale energy are to become reality – real jobs, held by real people, saved.

Because of energy from shale.


View the original article here

The Administration’s Flawed Five-Year Offshore Plan

Words matter. But actions matter more, and the Interior Department’s final five-year offshore oil and natural gas leasing plan shows that while the administration trumpets an all-of-the-above energy approach, it falls short of providing the bold leadership needed to fully deploy our country’s ample resources.

You can read Interior’s statement on the plan here. Basically, Secretary Ken Salazar says the strategy includes areas with the “highest-known resource potential.” Sounds good, but it took industry exploration for those areas to gain that designation. Only through exploration can we learn the resource potential of other areas. Loudly, misguidedly, the administration is saying “no” to that.

Its plan omits areas off both coasts and in the Eastern Gulf of Mexico that are believed to be rich in energy – but which will remain unexplored. There’s little incentive to spend millions of dollars to research and gather data in these areas because they are off-limits to exploratory drilling. API’s Erik Milito, director of upstream and industry operations:

“We must move past policies that undermine the mission of supplying Americans with the energy they need. While vitally important, the Western and Central Gulf of Mexico areas included in this proposed offshore program are not ‘new’ areas. … Today’s proposal will not allow us to realize the full benefits from safe and responsible development of America’s oil and natural gas resources, continuing a pattern of delay and unnecessary restraint.”

Milito said Interior’s plan, announced with the Bureau of Ocean Energy Management, actually pushes back a scheduled 2015 lease sale for the Beaufort Sea off Alaska – where leasing already has occurred. It makes more areas off limits than it makes available. Milito:

“A sensible long-term strategy would embrace and promote expanded oil and natural gas exploration and development to create new jobs and secure critical energy supplies for future generations. … Exploring and developing new areas that offer oil and natural gas gives the United States the golden opportunity to create an additional one million new jobs and billions in new revenue to our government in just seven years. We cannot reach these goals by constricting exploration and obstructing the safe and responsible development of American energy resources.”

While oil production has increased in private and state lands, this administration has consistently deterred activity on federal lands, where oil production has actually decreased. Instead of forward-looking energy leadership that would create jobs, generate tax revenue for governments and make America’s future more secure, the administration offers posturing and talk. Instead of acting to promote greater domestic oil and natural gas production it is restricting opportunity and building in delay – neither of which will prepare the United States for its energy future.


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Graphically Speaking: Fracking and Injection Wells

Last week’s National Research Council report on hydraulic fracturing and earthquakes pretty much ends up where a number of scientists are on the correlation between fracking and quakes: that energy development from shale formations poses a low risk for tremors of significance. The report said more attention should be given to injection wells, which are used for waste disposal by a number of industrial enterprises, not just the oil and natural gas industry. AP science writer Seth Borenstein’s take on the report is here.

API, America’s Natural Gas Alliance and the American Exploration & Production Council have produced a couple of informational tools on hydraulic fracturing and seismic activity and underground injection control (UIC) wells that are especially timely with release of the council’s report. 

Highlights from the fracking document:

Hydraulic fracturing is done with a mixture of more than 99.5 percent water and sand. The other one-half of 1 percent is chemical – including anti-bacterials and lubricants. See the FracFocus.org site for more on fracking fluids.Fracturing that occurs thousands of feet below the surface (and below groundwater aquifers) is carefully mapped with sophisticated equipment to optimize recovery of the oil and/or natural gas and to monitor the well itself. In other words, microseismic activity associated with fracking is thoroughly understood.

One study of several thousand shale fracture treatments across North America showed the largest micro-quake measured about 0.8 or about 2,000 times less energy than a magnitude 3.0 earthquake. The chart below shows that most of the micro-quakes in this study were 10,000 to 1 million times smaller than a 3.0 earthquake, which is roughly equivalent to the passing of a nearby truck:

Highlights from the UIC document:

The U.S. has about 151,000 Class II UIC wells used by the oil and natural gas industry, of which only a handful are being studied for possible links to earthquakes. These wells are a subset of more than 800,000 injection wells nationwide used to dispose of a variety of industrial wastes and for development of various minerals and geothermal energy sources. Here’s a map that shows the state-by-state well distribution:

Injection wells are regulated by EPA under the Safe Drinking Water Act. In many cases EPA has delegated authority for the UIC program to the states, with 39 states having primary authority over 95 percent of all UIC Class II wells.Literature published in the past five years shows that less than 40 incidents of seismic activity felt on the surface were associated with Class II injection wells.

Injection wells pump fluids into deep rock formations (see graphic). It’s unusual, but in some cases a quake can occur when a number of geological and operational factors come together – especially the presence of hard, dense and brittle crystalline “basement rock.”  These quakes are almost always small, below the level that would be felt on the surface.

For more information, check out the Energy From Shale website.


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