unconventional gas

Fri, 2015-03-27 11:48Steve Horn
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Industry-Stacked Energy Department Committee: Shale Running Dry, Let's Exploit the Arctic

A report assembled by an industry-centric US Department of Energy committee recommends the nation start exploiting the Arctic due to oil and gas shale basins running dry. 

In the just-submitted report, first obtained by the Associated Press, the DOE's National Petroleum Council — many members of which are oil and gas industry executives — concludes that oil and gas obtained via hydraulic fracturing (“fracking”) will not last beyond the next decade or so, thus the time is ripe to raid the fragile Arctic to feed our fossil fuel addiction. 

The NPC just launched a website and executive summary of the report: Arctic Potential: Realizing the Promise of U.S. Oil and Gas Resources.

Confirming the thesis presented by the Post Carbon Institute in its two reports, “Drill Baby, Drill” and “Drilling Deeper,” the National Petroleum Council believes the shale boom does not have much more than a decade remaining.

The NPC report appears to largely gloss over the role of further fossil fuel dependence on climate change, or the potentially catastrophic consequences of an oil spill in the Arctic.

The first mention of climate change appears to refer to “concern about the future of the culture of the Arctic peoples and the environment in the face of changing climate and increased human activity,” but doesn't mention the role of fossil fuels in driving those changes. Instead, the report immediately pivots to focus on “increasing interest in the Arctic for tourist potential, and reductions in summer ice provide an increasing opportunity for marine traffic.”

ExxonMobil CEO Rex Tillerson, a National Petroleum Council member, chimed in on the study in an interview with the Associated Press.  

“There will come a time when all the resources that are supplying the world's economies today are going to go in decline,” remarked Tillerson. “This is will [sic] be what's needed next. If we start today it'll take 20, 30, 40 years for those to come on.”

The National Petroleum Council also deployed the energy poverty argument, utilized most recently by coal giant Peabody Energy in its “Advanced Energy For Life” public relations campaign, to make its case for Arctic drilling as a replacement for fracking.

“But global demand for oil, which affects prices of gasoline, diesel and other fuels everywhere, is expected to rise steadily in the coming decades — even as alternative energy use blossoms — because hundreds of millions of people are rising from poverty in developing regions and buying more cars, shipping more goods, and flying in airplanes more often,” reads the report. “In order to meet that demand and keep prices from soaring, new sources of oil must be developed, the council argues.”

Tue, 2015-03-24 15:58Steve Horn
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Purposeful Distraction? Unpacking the Oil Refiners' "Bomb Trains" Lawsuit vs. Warren Buffett's BNSF

On March 13, American Fuel & Petrochemical Manufacturers (AFPM) — the oil refiners' trade association — sued oil-by-rail carrying giant Burlington Northern Santa Fe (BNSF) for allegedly violating its common carrier obligation under federal law. A DeSmogBlog investigation has revealed there may be more to the lawsuit than initially meets the eye.

Filed in the U.S. District Court for the Southern District of Texas, Houston Division, AFPM sued BNSF “for violating its common carrier obligation by imposing a financial penalty” for those carrying oil obtained via hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin and other hazardous petroleum products in explosion-prone DOT-111 rail cars.

AFPM's beef centers around the fact that BNSF began imposing a $1,000 surcharge for companies carrying explosive Bakken fracked oil in DOT-111 cars, as opposed to “safer” CPC-1232 cars, at the beginning of 2015.

The Warren Buffett-owned BNSF did so, argues AFPM, illegally and without the authority of the federal government.

“This $1,000 surcharge on certain PHMSA-authorized rail cars breaches BNSF’s common carrier duty to ship hazardous materials under the auspices of PHMSA’s comprehensive regime governing hazardous materials transportation,” wrote AFPM's legal team, featuring a crew of Hogan Lovells attorneys. “Allowing railroads to penalize companies that ship crude oil in federally-authorized rail cars would circumvent PHMSA’s statutory and regulatory process for setting rail car standards for hazardous materials shipments.”

Upon a quick glance, it seems like a fairly straight-forward case of federal law and an intriguing example of an intra-industry dispute. But as recent history has proven, the devil is in the details.

Sun, 2015-03-22 18:40Steve Horn
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Global Shale Fail: Oil Majors Leaving Fracking Fields Across Europe, Asia

With some analysts predicting the global price of oil to see another drop, many oil majors have deployed their parachutes and jumped from the hydraulic fracturing (“fracking”) projects rapidly nose-diving across the world.

As The Wall Street Journal recently reported, the unconvetional shale oil and gas boom is still predominantly U.S.-centric, likely to remain so for years to come.

“Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC have packed up nearly all of their hydraulic fracturing wildcatting in Europe, Russia and China,” wrote The Wall Street Journal.

“Chevron halted its last European fracking operations in February when it pulled out of Romania. Shell said it is cutting world-wide shale spending by 30% in places including Turkey, Ukraine and Argentina. Exxon has pulled out of Poland and Hungary, and its German fracking operations are on hold.” 

Though the fracking boom has taken off in the U.S. like no other place on Earth, the U.S. actually possesses less than 10 percent of the world’s estimated shale reserves, according to The Journal.

Despite this resource allotment discrepency, the U.S. Energy Information Administration (EIA) recently revealed that only four countries in the world have produced fracked oil or gas at a commercial-scale: the United States, Canada, China and Argentina.

Global Shale Fail
Image Credit: U.S. Energy Information Administration

Wed, 2015-03-04 19:03Steve Horn
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Iowa Republican Lawmaker: Rick Perry’s Involvement With Bakken Oil Pipeline “A Bad Idea”

By David Goodner and Steve Horn 

Everyday Iowa voters are less likely to caucus for former Texas governor and potential presidential candidate Rick Perry “because of his involvement” with a controversial oil pipeline proposal, according to an influential state lawmaker who has made eminent domain one of his signature issues in the Iowa House of Representatives.

Politically speaking, I am not sure there is as much upside for him to be involved as there is downside,” Iowa state representative Bobby Kaufmann (R-Wilton) told DeSmogBlog. “People would likely not vote for him for being involved with the pipeline.” 

Last month, DeSmogBlog broke news that Perry’s appointment to the Board of Directors of Energy Transfer Partners (ETP) could cost him support in the Iowa Caucuses. Energy Transfer Partners is a Texas-based company whose subsidiary, Dakota Access, LLC, has petitioned the state of Iowa to build a pipeline to transport up to 575,000 barrels per day of oil obtained from North Dakota's Bakken Shale via hydraulic fracturing (“fracking”)

Kaufmann’s statement to DeSmogBlog marks the first public criticism of Perry on this issue by a sitting Republican lawmaker. It also comes on the heels of Perry’s scheduled March 7 return to Iowa to speak at the Iowa Ag Summit alongside other likely Republican presidential candidates.

Kaufmann’s remarks to DeSmogBlog also come in the aftermath of Iowa’s paper of record, The Des Moines Register, releasing a poll finding that 74 percent of Iowans are opposed to the use of eminent domain to build the pipeline.

I think any presidential candidate’s association with eminent domain could be unhelpful” to them in the Iowa Caucuses, Kaufmann said. 

Fri, 2015-02-20 10:13Steve Horn
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Sued by Chesapeake Energy for Stealing Trade Secrets, Aubrey McClendon Hires PR Giant Edelman

Chesapeake Energy has sued its former CEO, Aubrey McClendon, for allegedly stealing its trade secrets in the months between his resignation and the formation of his new company, American Energy Partners. To defend itself outside of the courtroom, American Energy Partners has hired Edelmanthe 'world's largest' and often controversial public relations firm.

Filed on February 17 at the District Court of Oklahoma County, Chesapeake's legal complaint alleges McClendon covertly took map-based data owned by the company in the time between resigning from the company and then officially leaving the company in early 2013. Chesapeake also alleges that he then utilized that same confidential data for business and investment decisions at his new startup in deciding which land to purchase for hydraulic fracturing (“fracking”) for oil and gas.

AEP used confidential information and trade secrets stolen by McClendon from Chesapeake as a basis for their decision to acquire certain acreage in the Utica Shale Play,” alleges the lawsuit. “Further, in acquiring this acreage…AEP interfered with Chesapeake's business plans and its negotiations for its own acquisition of acreage in the Utica Shale play.”

Chesapeake Energy alleges that, before taking the data with him, McClendon asked a former company vice president of land, whose name is redacted in the complaint, to optimize and update the data.

Chesapeake Energy v. American Energy Partners Complaint
Image Credit: District Court of Oklahoma County

Tue, 2015-02-17 15:55Guest
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VIDEO: Young Iowan Questions Rick Perry on Fracked Oil Pipeline Ties at Town Hall Meeting

By David Goodner

When 24-year old Iowa native Kevin Rutledge first heard that former Texas governor and potential Republican Party presidential candidate Rick Perry had been appointed to the Board of Directors of Energy Transfer Partners, which is attempting to build a pipeline carrying oil obtained via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale through his home state, he was hopping mad.

So on February 16, Rutledge decided to drive three hours from Des Moines to Sioux City, Iowa and ask Rick Perry face-to-face about his ties to the company during a town hall meeting at Morningside College.

Rutledge is from Ottumwa, Iowa and the proposed route of a new Dakota Access crude oil pipeline would cut right through the heart of the southeast Iowa county where he grew up, potentially impacting his home community with oil spills, polluted waterways, and damaged farmland.

Iowans and Americans are tired of not being listened to because we don’t have millions of dollars to influence politicians,” Rutledge told DeSmogBlog. “I heard about ties between Rick Perry, Iowa Governor [Terry] Branstad, and the Bakken oil pipeline and immediately knew this was an opportunity for me to ask him a question about it and bring this issue into light.”

Sun, 2015-02-08 19:41Guest
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GOP Activists: Rick Perry's Bakken Oil Pipeline Ties Could Cost Him Iowa Caucus Support

By David Goodner

Former Texas governor Rick Perry's recent appointment to the board of Energy Transfer Partners, a company attempting to build a Bakken oil pipeline through Iowa, could hurt him in the first-in-the-nation Republican Party caucus if he decides to run for president, according to a conservative Iowa Republican activist and a DeSmog analysis of the political landscape.

Energy Transfer Partners (ETP) appointed Perry to its Board of Directors on February 3. ETP is a Texas-based company whose subsidiary corporation, Dakota Access, LLC, has petitioned the state of Iowa to build a pipeline carrying up to 575,000 barrels per day of oil obtained via North Dakota's Bakken Shale basin hydraulic fracturing (“fracking”) fields.  

The news about Perry's board appointment and its tie-in to the Iowa Caucus highlights the complicated terrain the issue will create for some Republicans in Iowa. It is a “political hot potato,” as DeSmog's Steve Horn wrote, and it is possible questions about the pipeline will arise in caucus politics leading up to 2016.  

Permitting plans in Iowa by Energy Transfer Partners and Dakota Access, LLC have sparked resistance from environmental activists and family farmers, the latter of whom often vote Republican, as well as from the libertarian wing of the GOP. Libertarian Republicans are often concerned about property rights and the potential abuse by government of eminent domain laws to confiscate private land for corporate profit.

“If Rick Perry is going to compete in Iowa this year, this could definitely be a big factor that could hurt him,” Jeff Shipley, a young Republican from Fairfield, Iowa, told DeSmogBlog. Shipley is a Republican activist, organizer, and former statehouse candidate for the Iowa GOP who has worked on presidential campaigns and with county and state party leaders for years. His home in Fairfield is located in Jefferson County, one of 18 Iowa counties sitting along the proposed pipeline route.

Jeff Shipley Iowa
Photo Credit: Shipley for Iowa

“This is a for-profit corporation that is going to try and use the force of government to steal farmers property,” Shipley told DeSmogBlog. “That runs contrary to typical conservative values.”

Fri, 2015-02-06 17:28Steve Horn
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Facing Felony Charges, Rick Perry Joins Board of Energy Transfer Partners, Owner of Proposed Oil Pipeline Across Iowa

Additional Reporting by David Goodner

Former Texas Republican Governor Rick Perry has joined the board of directors at Energy Transfer Partners, a natural gas and propane company headquartered in Dallas, Texas that has proposed to build a controversial Bakken crude oil pipeline across Iowa.

The announcement, which appeared in Energy Transfer Partners' February 3 Form 8-K filing to the U.S. Securities and Exchange Commission (SEC), comes as Perry faces two Texas state-level felony charges for abuse of power. Perry pleaded not guilty to both charges and District Judge Bert Richardson recently ruled against dismissing Perry's case.  

“It isn't immediately clear how much Perry will be paid for his board position,” explained the Texas Tribune. “According to regulatory filings published on the company's website, non-employee board directors were paid $50,000 a year in 2013.”

Despite the felony charges, Perry is still strongly considering a 2016 presidential run, according to a recent article published by the Associated Press, which reported he may make a final decision on whether or not to run by May. 

The Energy Transfer Partners filing to the SEC describes Perry's appointment: 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 3, 2015, James R. (Rick) Perry was appointed as a director of Energy Transfer Partners, L.L.C., the general partner of Energy Transfer Partners GP, L.P., which is the general partner of Energy Transfer Partners, L.P. (the “Partnership”). Mr. Perry served as the Governor of Texas from 2000 until 2015.
 
There are no arrangements or understandings with the Partnership, or any other persons, pursuant to which Mr. Perry was appointed as a director of Energy Transfer Partners, L.L.C. Mr. Perry is not currently expected to be named to any committees of the board of directors of Energy Transfer Partners, L.L.C. At this time, the Partnership is not aware of any transactions, since the beginning of the Partnership’s last fiscal year, or any currently proposed transactions, in which the Partnership was or is to be a participant involving amounts exceeding $120,000, and in which Mr. Perry had or will have a direct or indirect material interest. Consistent with other non-employee members of the Board of Directors, Mr. Perry will be eligible to receive cash compensation for his service on the Board of Directors and equity compensation under the Second Amended and Restated 2008 Long-Term Incentive Plan, as described in the Definitive Proxy Statement on Schedule 14A filed by the Partnership with the SEC on October 24, 2014.
 
Fri, 2015-01-23 04:58Steve Horn
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Federal Court Order: Explosive DOT-111 "Bomb Train" Oil Tank Cars Can Continue to Roll

A U.S. federal court has ordered a halt in proceedings until May in a case centering around oil-by-rail tankers pitting the Sierra Club and ForestEthics against the U.S. Department of Transportation (DOT). As a result, potentially explosive DOT-111 oil tank cars, dubbed “bomb trains” by activists, can continue to roll through towns and cities across the U.S. indefinitely.  

“The briefing schedule previously established by the court is vacated,” wrote Chris Goelz, a mediator for the U.S. Court of Appeals for the Ninth Circuit. “This appeal is stayed until May 12, 2015, or pending publication in the Federal Register of the final tank car standards and phase out of DOT-111 tank cars, whichever occurs first.”

Order to Delay DOT-111 Bomb Trains Case
Image Credit: U.S. Court of Appeals for the Ninth Circuit

Filing its initial petition for review on December 2, the Sierra Club/ForestEthics lawsuit had barely gotten off the ground before being delayed.

Wed, 2015-01-21 16:47Steve Horn
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Heather Zichal, Former Top Obama Energy Aide, Named Fellow at Industry-Funded Atlantic Council

Heather Zichal, former top climate and energy aide to President Barack Obama his top aide in crafting his 2008 presidential campaign energy platform, has joined the industry-funded Atlantic Council as a fellow at its Global Energy Center.

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