natural gas

Wed, 2012-05-30 08:35Brendan DeMelle
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What Chesapeake Energy's Financial Scandals Mean For The Rest of Us

Given radioactive wastewater, earthquakes, and flammable tap water, one might think that drilling and fracking could not possibly have any more dirty secrets. But here’s the biggest secret of all: it’s expensive.

With natural gas at historic low prices – the Wall Street Journal ran a column recently suggesting that the price of gas might even sink to negative numbers, so that producers would need to pay buyers to take it off their hands – it may seem odd to think that fracking is costly. But it’s true. Not just in terms of its environmental footprint, but also in terms of its financial costs.

And everyone should care about how expensive gas is, especially those concerned about energy security and the environment, because the answer will determine the fate of renewables, the way we use land and water, and whether our nation’s energy policies are fundamentally sound.

To understand what’s going on, you need to look at Chesapeake Energy, the second largest producer of natural gas in the US, the company described by its founder and CEO Aubrey McClendon as the “biggest frackers in the world.”

For 19 of the past 21 years, the company has operated at what investors call “cash flow negative” – last year by $8.547 billion dollars – meaning that Chesapeake has consistently spent a whole lot more than it earned. For decades.

To fund all that fracking, the company has been flipping land, engaging in so many financial transactions that it’s been said to resemble a hedge fund more than a gas driller.

McClendon's company has become the environmental Enron, with Chesapeake's accountants creating some of the most labyrinthine and impenetrable books since Enron, according to some investors.

Thu, 2012-05-17 14:19Steve Horn
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New Shill Gas Study Published by SUNY Buffalo Institute With Heavy Industry Ties

When does a study on the unconventional shale gas industry become a “shill gas study”? The quick answer: when nearly everyone writing and peer reviewing it has close ties to the industry they're purportedly doing an “objective” study on.

The newest kid on the block: a recent study published by SUNY Buffalo's Shale Resources and Society Institute, titled, ”Environmental Impacts During Shale Gas Drilling: Causes, Impacts and Remedies.”

The four co-authors of the “study” all have backgrounds, directly or indirectly, in the oil and gas industry:

Wed, 2012-05-02 10:04Steve Horn
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ALEC Wasn't First Industry Trojan Horse Behind Fracking Disclosure Bill - Enter Council of State Governments

19th Century German statesman Otto von Bismarck once said, “If you like laws and sausages, you should never watch either one being made.”

The American Legislative Exchange Council (ALEC), put on the map by the Center for Media and Democracy in its “ALEC Exposed” project, is the archetype of von Bismarck's truism. So too are the fracking chemical disclosure bills that have passed and are currently being pushed for in statehouses nationwide.

State-level fracking chemical disclosure bills have been called a key piece of reform in the push to hold the unconventional gas industry accountable for its actions. The reality, though, is murkier.

On April 21, The New York Times penned an investigation making that clear. The Times wrote:

Last December, ALEC adopted model legislation, based on a Texas law, addressing the public disclosure of chemicals in drilling fluids used to extract natural gas through hydraulic fracturing, or fracking. The ALEC legislation, which has since provided the basis for similar bills submitted in five states, has been promoted as a victory for consumers’ right to know about potential drinking water contaminants.

A close reading of the bill, however, reveals loopholes that would allow energy companies to withhold the names of certain fluid contents, for reasons including that they have been deemed trade secrets. Most telling, perhaps, the bill was sponsored within ALEC by ExxonMobil, one of the largest practitioners of fracking — something not explained when ALEC lawmakers introduced their bills back home.

The Texas law The Times refers to is HB 3328, passed in June 2011 in a 137-8 roll call vote, while its Senate companion bill passed on a 31-0 unanimous roll call vote. Since then, variations of the model bill have passed in two other key states in which fracking is occuring.

Like dominos falling in quick succession over the following months, ColoradoPennsylvania and, most recently, the Illinois Senate passed bills based on the ALEC model. Louisiana also has introduced a similar bill. 

Tue, 2012-05-01 14:25Carol Linnitt
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EPA Shale Gas Emissions Standards: "Too Little, Too Late"

The gas industry received a blow yesterday when the nonprofit group Physicians, Scientists & Engineers for Healthy Energy (PSE) released a joint statement by Professors Anthony Ingraffea and Robert Howarth of Cornell University. According to the release the EPA’s new emissions standards for methane and volatile organics from shale gas development “must be considered to little, too late” given the urgent need to reduce global levels of greenhouse gas (GHG) emissions. 

The gas industry is set to remain the single largest methane polluter in the United States, according to the release, with an overall GHG footprint surpassing emissions from coal. 
 
The EPA’s new national emissions standards, finalized in mid-April, rely on new air quality measures, the New Source Performance Standards (NSPS) and National Emission Standards for Hazardous Pollutants (NESHAPS), that target pollutants discharged during gas extraction activities. New procedures, such as a methane capture technique known as “green completion,” are expected to play a significant role in achieving the new standards.
 
Howarth and Ingraffea agree these standards are significant and if strongly-enforced could amount to a reduction in methane emissions of about one-third. But despite this achievement, they write, methane emissions remain a serious problem.
“Despite the new regulations, shale gas methane emissions will remain significant, with the estimates of EPA (2011) and Howarth et al. (2011) indicating a likely leakage of 2.5 – 3.9 percent of the amount of methane produced over the lifetime of a shale-gas well, and possibly as high as 6 percent,” the statement reads.
Despite the EPA’s efforts, which have caught positive attention from prominent environmental groups, Howarth and Ingraffea remain very matter-of-fact about the real issue, which hinges on a nation-wide spread of poor practice. Gas production is plagued with ‘ongoing emission’ problems and the EPA’s emissions standards – while a step in the right direction – just aren’t enough to make the concerns associated with poor practice go away.
Fri, 2012-04-27 13:45Brendan DeMelle
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Chesapeake Energy Well Blowout in Wyoming Causes Evacuation, Methane "Roared" For Days

A potentially dangerous oil well blowout at a Chesapeake Energy site in Wymoing caused at least 60 and perhaps 70 residents to evacuate within 5 miles of the disaster for several days until it was contained earlier today. Chesapeake Energy (NYSE: CHK) was drilling the well in the Niobrara Shale region underlying parts of Wyoming, Colorada and Nebraska. 

“Potentially explosive methane gas roared from the ground at the site five miles northeast of the town of Douglas,” the AP reported.

Residents reported hearing the roar of escaping gas six miles away

The blowout occurred Tuesday afternoon at Chesapeake's Combs Ranch Unit well site. However, workers were unable to plug the well with drilling mud until today due to shifting winds that made the site too dangerous to attempt the now infamous “Top Kill” technique.  Halliburton subsidiary Boots & Coots workers were able to shove enough mud and other materials into the well to finally stop the methane gas leaking out of the well today.

Chesapeake had to resort to the “Top Kill” technique last year at a Pennsylvania gas fracking well blowout. In that case, Chesapeake used a junk shot of “a mix of plastic, ground up tires and heavy mud to plug the well.”

Mon, 2012-04-23 14:20Steve Horn
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Rendell and Ridge: From "Militant" Labelers to Terrorist Enablers

A new chapter has been added to the shale gas industry's eco-terrorism, counterinsurgency and psychological operations saga.

In March, NBC News investigative reporter Michael Isikoff revealed that many prominent U.S. public officials are on the payroll of the People's Mujahedin of Iran (MEK), a group labeled by the U.S. State Department as a terrorist organization. These U.S. officials are lobbying hard to remove the MEK from the list.

Under U.S. Supreme Court precedent, after the recent Holder v. Humanitarian Law Project decision – a controversial decision itself – it is a federal crime to provide “material support” for a designated terrorist organization. But legal niceties are apparently of nil concern to those on the dole of the MEK, a list that includes several big name political figures, according to a report written by former Bush Administration attorney and RAND Corporation analyst Jeremiah Goulka. A sample is below:

  • Former Gov. Ed Rendell (D-PA)
  • Former Gov. Tom Ridge (R-PA), who was also the former head of the U.S. Department of Homeland Security under President George W. Bush
  • Former NY Mayor Rudy Giuliani, who was also a Republican primary candidate for President in 2008
  • Former Gov. Howard Dean (D-VT), formerly the head of the Democratic National Committee and a Democratic primary candidate for President in 2004  

Many other powerful people are on the bipartisan list, as well. 

Mon, 2012-04-09 12:15Farron Cousins
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Survey Says...Fracking IS Causing Earthquakes

A new report by the U.S. Geological Survey (USGS) says that the increased seismic activity taking place in certain areas of the United States is almost certainly the result of oil and gas drilling activities. The group has been studying dozens of earthquakes across America for the last 8 months and determined that the man-made quakes were taking place in areas where fracking or deep waste water injection had recently occurred.

Here is a brief snippet from the report's abstract:
  

A remarkable increase in the rate of M 3 and greater earthquakes is currently in progress in the US midcontinent. The average number of M >= 3 earthquakes/year increased starting in 2001, culminating in a six-fold increase over 20th century levels in 2011. Is this increase natural or manmade? To address this question, we take a regional approach to explore changes in the rate of earthquake occurrence in the midcontinent (defined here as 85° to 108° West, 25° to 50° North) using the USGS Preliminary Determination of Epicenters and National Seismic Hazard Map catalogs…

The modest increase that began in 2001 is due to increased seismicity in the coal bed methane field of the Raton Basin along the Colorado-New Mexico border west of Trinidad, CO. The acceleration in activity that began in 2009 appears to involve a combination of source regions of oil and gas production, including the Guy, Arkansas region, and in central and southern Oklahoma. Horton, et al. (2012) provided strong evidence linking the Guy, AR activity to deep waste water injection wells. In Oklahoma, the rate of M >= 3 events abruptly increased in 2009 from 1.2/year in the previous half-century to over 25/year. This rate increase is exclusive of the November 2011 M 5.6 earthquake and its aftershocks. A naturally-occurring rate change of this magnitude is unprecedented outside of volcanic settings or in the absence of a main shock, of which there were neither in this region. While the seismicity rate changes described here are almost certainly manmade, it remains to be determined how they are related to either changes in extraction methodologies or the rate of oil and gas production.


What’s interesting is that the USGS points out the obvious fact that has been ignored by the industry – these earthquakes are occurring in areas where earthquakes shouldn’t be happening. Still, that hasn’t stopped the dirty energy industry from denying that there is a correlation between fracking and earthquakes.

Tue, 2012-04-03 05:59Laurel Whitney
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The Farce Of The "Golden Age Of Gas"

Oil and gas industry insiders revealed earlier this year the high probability that we're headed into a shale gas bubble. But that's not what the industry's CEOs and PR departments want you to hear.

“The reality of at least 100 years’ worth of shale gas abundance has been supported by virtually every credible third-party expert…The collective market cap of these energy leaders approaches $2 trillion – ask yourself: do I believe Rolling Stone and Arthur Berman or the world’s biggest and most successful energy companies?”

So spouts off Chesapeake Energy in a press release earlier this month responding to a Rolling Stone article which likened fracking to a huge industry Ponzi scheme. Arthur Berman is an energy consultant based in Houston, and not swayed by the industry's vibrant plumage they are putting on display to the nation.

The energy companies want the public to believe in the “Golden Age of Gas”- as it has been dubbed- where the supplies are bountiful and the profits are high. While it's true that there have been economic booms in some areas that have gas reserves, the numbers are showing that these booms will not be long lived. Meanwhile, the falling price of gas along with the inherent public health risks and environmental devastation that comes along with it makes the gas rush less profitable in the long run. But the gas industry wouldn't have you believe that.

Sun, 2012-04-01 16:22Steve Horn
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Investors: No More Flaring of Fracked Oil and Gas in Bakken Shale

The debate over flaring unconventional oil and gas in shale basins across the United States has suddenly heated up immensely (excuse the bad pun). 

On March 27, the Coalition for Environmentally Responsible Economy (CERES) penned a letter calling for an end to the practice, writing,

We are a group of 37 investors, representing $500 billion in total assets, who areconcerned about the financial risks associated with the flaring of natural gas that has accompanied fast-proliferating oil production from shale formations in North Dakota, Texas and elsewhere in the U.S.

We are concerned that excessive flaring, because of its impact on air quality and climate change, poses significant risks for the companies involved, and for the industry at large,ultimately threatening the industry’s license to operate.

As you know, shale oil production, made possible by hydraulic fracturing technology,…is poised to become the world’s largest oil producer in the next five years, with nearly all of this projected growth coming from shale oil. …

On a lifecycle basis, emissions from oil produced with high flaring rates may be comparable to those from Canada’s vast oil sands region.

The letter ended by calling for the building up of proper infrastructure, such as pipelines and refineries, in order to push for an eliminiation of the dirty practice. CERES concluded the letter with a firm request, stating, “We therefore are writing to request information about the amount your company is currently flaring, as well as details about your plans to reduce flaring at existing wells and prevent it at future wells.”

Letter signarories included As You SowPresbyterian Church (USA)Turner Investments, and Praxis Mutual Funds, to name several.

Fri, 2012-03-30 10:50Laurel Whitney
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Oil Industry Lobbyist / Mushroom Farmer Claims Family Farms Need Fracking

Because apparently the only way for small American farmers to sustain themselves is not with crops they produce, but by letting the good 'ole gas man tap the reserves under their land.

“Agriculture and industry go together, if you want prosperity in these little towns, you need balance, that's the story of my family.”

So said Karen Moreau on Fox & Friends, refering to the New York moratorium on fracking. Moreau claims to be from the “last family mushroom farm” in Feura Bush, NY and was on the show to talk about how fracking would be an economic rainbow to many small farms in the state, if only those pesky regulators would stop getting in their way.

The story Moreau neglected to tell on Fox & Friends was that she's the executive director for the New York State Petroleum Council, a division of the American Petroleum Institute. Translation: less so “family farmer” and more so “industry lobbyist”.

Moreau is the President and co-founder of The Foundation for Land and Liberty (FLL), a litigation organization formed to “protect private sector legal rights, so that land ownership remains a fundamental right derived from natural law”.

The foundation is mainly a property rights group that formed to provide legal assistance surrounding development issues to land owners in the Adirondacks. Moreau has a background in law, specifically in agriculture and rural economic development. She has been previously caught spinning facts and forgetting pertinent information in her New York Post opinion articles.

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