hydraulic fracturing

Sun, 2014-01-05 21:01Steve Horn
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Exclusive: Permit Shows Bakken Shale Oil in Casselton Train Explosion Contained High Levels of Volatile Chemicals

On January 2, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a major safety alert, declaring oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale may be more chemically explosive than the agency or industry previously admitted publicly.

This alert came three days after the massive Casselton, ND explosion of a freight rail train owned by Warren Buffett's Burlington Northern Santa Fe (BNSF) and was the first time the U.S. Department of Transportation agency ever made such a statement about Bakken crude. In July 2013, another freight train carrying Bakken crude exploded in Lac-Mégantic, vaporizing and killing 47 people.

Yet, an exclusive DeSmogBlog investigation reveals the company receiving that oil downstream from BNSF — Marquis Missouri Terminal LLCincorporated in April 2012 by Marquis Energy — already admitted as much in a September 2012 permit application to the Missouri Department of Natural Resources (DNR).

The BNSF Direct ”bomb train” that exploded in Casselton was destined for Marquis' terminal in Hayti, Missouri, according to Reuters. Hayti is a city of 2,939 located along the Mississippi River. From there, Marquis barges the oil southward along the Mississippi, where Platts reported the oil may eventually be refined in a Memphis, Tennessee-based Valero refinery.

Thu, 2014-01-02 10:54Steve Horn
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Warren Buffett Bought Stake in Pipeline Company on Same Day as North Dakota Oil Train Explosion

On December 30, the same day a Burlington Northern Sante Fe (BNSF) oil train derailed and exploded in Casselton, North Dakota, Warren Buffett — owner of holding company giant Berkshire Hathaway, which owns BNSF — bought a major stake in pipeline logistics company Phillips Specialty Products Inc.

Owned by Phillips 66, a subsidiary of ConocoPhillips, Phillips Specialty Products' claim to fame is lubricating oil's movement through pipelines, increasingly crucial for the industry to move both tar sands crude and oil obtained via hydraulic fracturing (“fracking”) in an efficient manner.

“Phillips Specialty Products Inc…is the global leader in the science of drag reduction and specializes in maximizing the flow potential of pipelines,” explains its website.

Buffett — the second richest man in the world — sees the flow lubricant business as a lucrative niche one, increasingly so given the explosion of North American tar sands pipelines and fracked oil pipelines.

“I have long been impressed by the strength of the Phillips 66 business portfolio,” he said of the deal in a press release. “The flow improver business is a high-quality business with consistently strong financial performance, and it will fit well within Berkshire Hathaway.”

Wed, 2013-12-18 12:00Steve Horn
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Keystone XL Fork in the Road: TransCanada's Houston Lateral Pipeline

Only Barack Obama knows the fate of the northern half of TransCanada's Keystone XL tar sands pipeline.  But in the meantime, TransCanada is preparing the southern half of the line to open for commercial operations on January 22.

And there's a fork in that half of the pipeline that's largely flown under the radar: TransCanada's Houston Lateral Pipeline, which serves as a literal fork in the road of the southern half of Keystone XL's route to Gulf Coast refineries.

Rebranded the “Gulf Coast Pipeline” by TransCanada, the 485-mile southern half of Keystone XL brings a blend of Alberta's tar sands crude, along with oil obtained via hydraulic fracturing (“fracking”) from North Dakota's Bakken Shale basin, to refineries in Port Arthur, Texas. This area has been coined a “sacrifice zone” by investigative journalist Ted Genoways, describing the impacts on local communities as the tar sands crude is refined mainly for export markets.

But not all tar sands and fracked oil roads lead to Port Arthur. That's where the Houston Lateral comes into play. A pipeline oriented westward from Liberty County, TX rather than eastward to Port Arthur, Houston Lateral ushers crude oil to Houston's refinery row

“The 48-mile (77-kilometre) Houston Lateral Project is an additional project under development to transport oil to refineries in the Houston, TX marketplace,” TransCanada's website explains. “Upon completion, the Gulf Coast Project and the Houston Lateral Project will become an integrated component of the Keystone Pipeline System.”

Mon, 2013-12-16 10:07Steve Horn
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New "Frackademia" Report Co-Written by "Converted Climate Skeptic" Richard Muller

The conservative UK-based Centre for Policy Studies recently published a study on the climate change impacts of hydraulic fracturing (“fracking”) for shale gas. The skinny: it's yet another case study of “frackademia,” and the co-authors have a financial stake in the upstart Chinese fracking industry.

Titled “Why Every Serious Environmentalist Should Favour Fracking“ and co-authored by Richard Muller and his daughter Elizabeth “Liz” Muller, it concludes that fracking's climate change impacts are benign, dismissing many scientific studies coming to contrary conclusions.

In an interview with DeSmogBlog, Richard Muller — a self-proclaimed “converted skeptic” on climate change — said he and Liz had originally thought of putting together this study “about two years ago.”

“We quickly realized that natural gas could be a very big player,” he said. “The reasons had to do with China and the goal of the paper is to get the environmentalists to recognize that they need to support responsible fracking.

The ongoing debate over fracking in the UK served as the impetus behind the Centre for Policy Studies — a non-profit co-founded by former right-wing British Prime Minister Margaret Thatcher in 1974 — hosting this report on its website, according to Richard Muller.

“They asked for it because some environmentalists are currently opposing fracking in the UK, and they wanted us to share our perspective that fracking is not only essential for human health but its support can be justified for humanitarian purposes,” he said. 

This isn't the first time Liz Muller has unapologetically sung the praises of fracking and promoted bringing the practice to China. In April, she penned an op-ed in The New York Times titled, “China Must Exploit Its Shale Gas.” 

Fri, 2013-12-13 07:00Steve Horn
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Former Chesapeake Energy CEO Aubrey McClendon Buys Fracking Wells In Ohio's Utica Shale

Former Chesapeake Energy CEO and Founder Aubrey McClendon is back in the hydraulic fracturing (“fracking”) game in Ohio's Utica Shale in a big way, receiving a permit to frack five wells from the Ohio Department of Natural Resources on November 26. 

“The Ohio Department of Natural Resources awarded McClendon's new company, American Energy Utica LLC, five horizontal well permits Nov. 26 that allows oil and gas exploration on the Jones property in Nottingham Township, Harrison County,” a December 6 article appearing in The Business Journal explained. “In October, American Energy Utica announced it has raised $1.7 billion in capital to secure new leases in the Utica shale play.”

McClendon is the former CEO of fracking giant Chesapeake Energy and now the owner of American Energy Partners, whose office is located less than a mile away from Chesapeake's corporate headquarters.

The $1.7 billion McClendon has received in capital investments for the purchase of 110,000 acres worth of Utica Shale land came from the Energy & Minerals GroupFirst Reserve Corporation, BlackRock Inc. and Magnetar Capital.

McClendon — a central figure in Gregory Zuckerman's recent book “The Frackers” — is currently under investigation by the U.S. Securities and Exchange CommissionHe left Chesapeake in January 2013 following a shareholder revolt over his controversial business practices.

In departing, he was given a $35 million severance package, access to the company's private jets through 2016 and a 2.5% stake in every well Chesapeake fracks through June 2014 as part of the Founder's Well Participation Program.

Little discussed beyond the business press, McClendon has teamed up with a prominent business partner for his new start-up: former ExxonMobil CEO Lee Raymond.

Wed, 2013-12-04 13:32Steve Horn
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Documents Reveal ALEC's Looming Attacks on Clean Energy, Fracking Laws, Greenhouse Gas Regulations

The Guardian has released another must-read piece about the American Legislative Exchange Council (ALEC), this time laying bare its anti-environmental agenda for 2014. 

The paper obtained ALEC's 2013 Annual Meeting Policy Report, which revealed that ALECdubbed a “corporate bill mill” for the statehouses by the Center for Media and Democracy — plans more attacks on clean energy laws, an onslaught of regulations pertaining to hydraulic fracturing (“fracking”) and waging war against Environmental Protection Agency (EPA) greenhouse gas regulations.

“Over the coming year, [ALEC] will promote legislation with goals ranging from penalising individual homeowners and weakening state clean energy regulations, to blocking the Environmental Protection Agency, which is Barack Obama's main channel for climate action,” explained The Guardian. “Details of ALEC's strategy to block clean energy development at every stage, from the individual rooftop to the White House, are revealed as the group gathers for its policy summit in Washington this week.”

The documents also reveal ALEC's boasting of introducing myriad “model resolutions” nationwide in support of fast-tracking approval for the northern half of Transcanada's Keystone XL pipeline, along with another “model bill” — the “Transfer of Public Lands Act” already introduced in Utah — set to expropriate federally-owned public lands to oil, gas and coal companies. 

Tue, 2013-12-03 11:43Steve Horn
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Leaked Documents Reveal IRS Concerns, Funding Crisis At Corporate Lobbying Group ALEC

The Guardian has published a major investigative piece that once again exposes the scandalous ways of the right wing lobbying group, American Legislative Exchange Council (ALEC). 

Among the biggest revelations: ALEC may soon face a budget crisis, and is feeling the heat of public pressure from activists and its own membership in the aftermath of the Trayvon Martin shooting by George Zimmerman in Florida. Dozens of corporations have jumped ship from what critics have coined a “corporate bill mill” for statehouses nationwide.

Another explosive revelation: ALEC State Chairs were handed a draft pledge to put ALEC's interests over its constituent's interests, asked to “act with care and loyalty and put the interests of [ALEC] first.” ALEC confirmed to The Guardian that it was “not adopted by the membership committee or by any of the state chairs.”

The Guardian obtained ALEC's Board of Directors' meeting minutes which reveal that ALEC has created a 501(c)(4) non-profit organization called The Jeffersonian Project.

Creation of the Jeffersonian Project - paralleling ALEC's self-serving branding as standing for “Jeffersonian principles” - could be seen as a tacit admission that ALEC had been illegally operating as a shadow lobbying organization on behalf of its corporate members for the past four decades.

ALEC's budget hole from the exodus of corporate members has inspired a campaign to win corporate members back to the exclusive club, calling it the biblically-inspired “Prodigal Son Project.” Desperate for more member-based funding, ALEC is considering recruiting gambling companies into its member base.

Wed, 2013-11-27 10:58Steve Horn
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Firm with History of Spill Cover-Ups Hired to Clean Up North Dakota Oil Spill

Tesoro Logistics — the company whose pipeline spilled more than 800,000 gallons of fracked Bakken Shale oil in rural North Dakota in September — has hired infamous contractor Witt O'Brien's to oversee its clean-up of the biggest fracked oil spill in U.S. history.

The oil was obtained via hydraulic fracturing (“fracking”) in the Bakken Shale basin.

As revealed after ExxonMobil hired the same firm in the aftermath of a 210,000-gallon tar sands oil spill in April 2013, Witt O'Brien's — formerly known as OOPS, Inc. — is a firm with a history of oil spill cover-ups dating back to the Exxon Valdez oil spillIt also oversaw the spraying of toxic oil dispersants into the Gulf of Mexico during BP's summer 2010 mega-spill and a literal cover-up of Enbridge's massive “dilbit disaster” tar sands pipeline spill in Michigan. 

Witt O'Brien's also won a $300,000 contract to develop an emergency response plan for TransCanada’s Keystone XL tar sands export pipeline in August 2008.

The same firm is now maintaining Tesoro's website dedicated to offering updates — also known as crisis communications management — for the massive spill's recovery efforts at TesoroAlert.com

Buried at the bottom of the website is a mention that the site is “powered by the PIER System.” PIER — short for “Public Information Emergency Response” — is owned by Witt O'Brien's.

Screen Shot Taken Nov. 25, 2013

Tue, 2013-11-26 15:31Steve Horn
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Obama Approves Major Border-Crossing Fracked Gas Pipeline Used to Dilute Tar Sands

Although TransCanada's Keystone XL tar sands pipeline has received the lion's share of media attention, another key border-crossing pipeline benefitting tar sands producers was approved on November 19 by the U.S. State Department.

Enter Cochin, Kinder Morgan's 1,900-mile proposed pipeline to transport gas produced via the controversial hydraulic fracturing (“fracking”) of the Eagle Ford Shale basin in Texas north through Kankakee, Illinois, and eventually into Alberta, Canada, the home of the tar sands. 

Like Keystone XL, the pipeline proposal requires U.S. State Department approval because it crosses the U.S.-Canada border. Unlike Keystone XL - which would carry diluted tar sands diluted bitumen (“dilbit”) south to the Gulf Coast - Kinder Morgan's Cochin pipeline would carry the gas condensate (diluent) used to dilute the bitumen north to the tar sands.

“The decision allows Kinder Morgan Cochin LLC to proceed with a $260 million plan to reverse and expand an existing pipeline to carry an initial 95,000 barrels a day of condensate,” the Financial Post wrote

“The extra-thick oil is typically cut with 30% condensate so it can move in pipelines. By 2035, producers could require 893,000 barrels a day of the ultra-light oil, with imports making up 786,000 barrels of the total.”

Increased demand for diluent among Alberta's tar sands producers has created a growing market for U.S. producers of natural gas liquids, particularly for fracked gas producers.

“Total US natural gasoline exports reached a record volume of 179,000 barrels per day in February as Canada's thirst for oil sand diluent ramped up,” explained a May 2013 article appearing in Platts. ”US natural gasoline production is forecast to increase to roughly 450,000 b/d by 2020.”

Mon, 2013-11-25 05:00Sharon Kelly
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Banks Reluctant to Lend in Shale Plays as Evidence Mounts on Harm to Property Values Near Fracking

Over the past several years, the fossil-fuel industry has been highly adept at publicizing the economic upshots of fracking: royalty checks, decreased prices for oil and gas, profits for investors. 

But the industry is far less eager to discuss the hidden costs of the current drilling boom – the longterm price of air and water pollution, the consequences of undermining a nascent renewable energy industry, the harms from accidents when moving and storing all the hazardous waste fracking produces. 

Add to that list of hidden costs one that is starting to grab more attention from bankers and the real estate industry: property values and mortgage problems. New research, for example, demonstrates that the vast majority of prospective buyers say they would decline to buy a home near oil and gas drilling.

As millions of Americans sign oil and gas leases granting the right to companies to extract fossil fuels from their land, they are realizing that these documents often conflict with their mortgages, which is leading to all manner of legal and financial headaches, and make it harder to sell homes on land whose oil and gas rights are leased.

Concern about these impacts is spreading in southern states like Texas, Alabama and Florida, according to a survey due for release in the next several weeks from the University of Dever. In northeastern states like Pennsylvania, fracking worries have prompted lenders to begin rejecting mortgage applications due to gas drilling – on neighboring property. In Colorado, real estate brokers describe keeping a long list of sellers in heavily fracked areas, but a paucity of buyers. 

Under the terms mortgage buyers like Fannie Mae and Freddie Mac require, “you cannot cause or permit any hazardous materials to be on your property and it specifically references oil and gas,” Greg May, vice president of residential mortgage lending at Tompkins Bank, told American Banker in an interview published Nov. 12. “That alone would make it a problem.”

The repercussions for the American real estate market could be enormous. More than 15.3 million Americans – roughly one out of every 20 people living in the U.S.– now live within a mile of an oil or gas well that was drilled since 2000, the Wall St. Journal recently reported

And that may be just the tip of the iceberg since shale gas and oil wells require ongoing drilling for them to stay productive. In 2010, for example, Pennsylvania regulators predicted a more than 10-fold increase in shale wells in their state over the next couple decades.

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