unconventional oil

Tue, 2014-06-03 18:00Steve Horn
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Days Before Obama Announced CO2 Rule, Exxon Awarded Gulf of Mexico Oil Leases

On Friday May 30, just a few days before the U.S. Environmental Protection Agency announced details of its carbon rule proposal, the Obama Administration awarded offshore oil leases to ExxonMobil in an area of the Gulf of Mexico potentially containing over 172 million barrels of oil.

The U.S. Department of Interior's (DOI) Bureau of Ocean Energy Management (BOEM) proclaimed in a May 30 press release that the ExxonMobil offshore oil lease is part of “President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production.” 

Secretary of Interior Sally Jewell formerly worked as a petroleum engineer for Mobil, purchased as a wholly-owned subsidiary by Exxon in 1998.

Dubbed a “Private Empire” by investigative reporter Steve Coll, ExxonMobil will now have access to oil and gas in the Alaminos Canyon Area, located 170 miles east of Port Isabel, Texas. Port Isabel borders spring break and tourist hot spot South Padre Island.


Map Credit: U.S. Bureau of Ocean Energy Management

ExxonMobil originally won the three leases at the Western Planning Area Sale 233, held on March 19. BOEM records show ExxonMobil was the only company to participate in the bid and paid over $21.3 million.

Thu, 2014-05-29 17:00Steve Horn
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ND Treasurer: Red Carpet Rollout for Gen. Petraeus Fracking Field Trip "Not Unusual"

North Dakota Treasurer Kelly Schmidt has responded to DeSmogBlog's investigation of the Bakken Shale basin fracking field trip her office facilitated for former CIA Director Gen. David Petraeus, who now works at the Manhattan-based private equity firm Kohlberg Kravis Roberts (KKR)

Schmidt expanded on the initial comments she provided to DeSmogBlog in response to our findings obtained via North Dakota Open Records Statute. Among other things, she described the blurred lines existing between the North Dakota government, the oil industry and private equity firms like KKR as “not unusual.” 

Schmidt's comments came on May 23 on WDAY's Jay Thomas Show, guest hosted that day by Rob Port, just over three weeks after her office hosted Petraeus.

DeSmogBlog's May 22 investigative piece revealed that KKR — which has ties to North Dakota's hydraulic fracturing (“fracking”) boom via Samson Resources and The Ridge housing complex and considers itself a “mini oil and gas company” — wrote the press release for the Office of North Dakota State Treasurer announcing Petraeus' visit, closely counseled Schmidt's office on media strategy and hosted Schmidt on a company chartered private jet.

Fri, 2014-05-23 05:00Steve Horn
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Revealed: Former Energy in Depth Spokesman John Krohn Now at U.S. EIA Promoting Fracking

For those familiar with U.S. Energy Information Administration's (EIA) work, objectivity and commitment to fact based on statistics come to mind. Yet as Mark Twain once put it, “There are three kinds of lies: lies, damned lies, and statistics.”

That's where John Krohn comes into play. A former spokesman for the gas industry front group Energy in Depth (EID), Krohn now works on the Core Team for EIA's “Today in Energy!“ 

Krohn has been at EIA since at least January 2014, when his name first appeared on the EIA website. On his Twitter account, he describes himself as an EIA communications manager.

As DeSmog revealed in February 2011, Energy In Depth was launched with a heavy injection of funding from oil and gas industry goliaths such as BP, Halliburton, Chevron, Shell and XTO Energy (now owned by ExxonMobil).

With its public relations efforts conducted by FTI Consulting, EID now serves as a key pro-industry front group promoting unfettered hydraulic fracturing (“fracking”) to the U.S. public.

Krohn follows in the footsteps through the government-industry revolving door of the man President Barack Obama named to head the U.S. Department of Energy (DOE) for his second term, former Massachusetts Institute of Technology “frackademic,” Ernest Moniz. DOE is the parent agency for EIA

Further, EIA Administrator Adam Sieminski, another second-term appointee of President Obama, also passed through the same revolving door as Krohn and Moniz in his pathway to heading EIA. He formerly worked in the world of oil and gas finance. 

Thu, 2014-05-22 14:13Steve Horn
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Documents: Petraeus Fracking Field Trip Reveals ND Government, Oil, Private Equity Nexus

DeSmogBlog has obtained hundreds of documents portraying the blurred lines between North Dakota's government, the oil and gas industry and the private equity world. They also offer one of the first looks inside the professional life of former CIA Director Gen. David Petraeus after he resigned from the agency in 2012.

The documents reveal Kohlberg Kravis Roberts (KKR) — a private equity firm where Petraeus now works at the KKR Global Institute — wrote a press release for North Dakota's State Treasurer announcing the Petraeus visit, meticulously counseled the state treasurer's office on media strategy and hosted the state treasurer on its company plane.

A large part of Petraeus' visit centered around a tour of the state's Bakken Shale basin, where upwards of 1 million barrels of oil are extracted each day via hydraulic fracturing (“fracking”). The Bakken pumped out its billionth barrel of oil during his stay.

KKR, with $87 billion in assets, owns two major Bakken entities: The Ridge in Williston, ND, and Samson Resources.

The Ridge is a KKR-owned housing complex for Bakken oil and gas workers, while Samson Resources is a major company fracking for oil and gas throughout the U.S., including in the Bakken.  

With over $4 billion sitting in an energy investment fund as of June 2012, KKR also owns over $950 million in oil and gas industry assets. Marc Lipschultz, head of energy and infrastructure for KKR, called the firm a “mini oil and gas company“ in an April 2013 interview with Privcap.

“We have our own technical abilities attached to the firm we have our own back office [and] we can manage the daily flows of oil and gas in drilling wells and managing our own hedges,” said Lipschultz. 

Mon, 2014-05-19 18:00Steve Horn
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Southwestern Energy Executive Mark Boling Admits Fracking Link to Climate Change

An Executive* of a major shale gas development company has conceded what scientists have been saying for years: global shale gas development has the potential to wreak serious climate change havoc.

Best known for his company's hydraulic fracturing (“fracking”) activity, Southwestern Energy Executive Vice President* Mark Boling admitted his industry has a methane problem on the May 19 episode of Showtime's “Years of Living Dangerously” in a segment titled, “Chasing Methane.”

“I think some of those numbers, they certainly concern me,” Boling says on the show. “How could you say that that methane emission rate was one and a half percent - very, very difficult to there from here for that.” 

Boling goes toe to toe in the segment with Cornell University Professor Anthony Ingraffea, who co-authored the 2011 paper now best known as the “Cornell Study.”

That study was the first to say that over its entire lifecycle, shale gas production is dirtier than coal due to the greenhouse gas trapping capacity of leaking methane. Numerous studies since then have depicted high leakage rates throughout the production lifecycle. 


Cornell University Professor Anthony Ingraffea; Photo Credit: Cornell University

Brendan DeMelle, DeSmogBlog Executive Director and Managing Editor, is also a featured guest on tonight's episode. He discusses the well-funded climate change denial machine and attacks on renewable energy development in a segment titled, “Against the Wind.”

Wed, 2014-04-30 21:55Steve Horn
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Explosive Virginia Train Carried Fracked Bakken Oil, Headed to Potential Export Facility

Platts confirmed CSX Corporation's train that exploded in Lynchburg, Virginia was carrying sweet crude obtained via hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin. CSX CEO Michael Ward has also confirmed this to Bloomberg.

“Trade sources said the train was carrying Bakken crude from North Dakota and was headed to Plains All American's terminal in Yorktown,” Platts explained. “The Yorktown facility can unload 130,000 b/d of crude and is located on the site of Plains oil product terminal.”

In January, the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration issued a Safety Alert concluding Bakken crude is more flammable than heavier oils. Hence the term “bomb trains.”

At least 50,000 gallons of the oil headed to Yorktown is now missing, according to ABC 13 in Lynchburg. Some of it has spilled into the James River, as previously reported on DeSmogBlog.

A map available on CSX's website displaying the routes for its crude-by-rail trains offers a clear indication of where the train was headed.


Map Credit: CSX Corporation

Formerly a refinery owned by Standard Oil and then BP/Amoco, Plains All American has turned the Yorktown refinery into a mega holding facility. 

Yorktown may become a key future site for crude oil exports if the ban on exports of oil produced domestically in the U.S. is lifted. 

Tue, 2014-04-01 23:16Steve Horn
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"Our Energy Moment": The Blue Engine Behind Fracked Gas Exports PR Blitz

Behind nearly every major corporate policy push there's an accompanying well-coordinated public relations and propaganda campaign. As it turns out, the oil and gas industry's push to export liquefied natural gas (LNG) obtained via hydraulic fracturing (“fracking”) plays the same game.

And so on February 5, “Our Energy Moment” was born. The PR blitz is described in a press release announcing the launch as a “new coalition dedicated to raising awareness and celebrating the many benefits of expanded markets for liquefied natural gas.”

Its member list includes industry heavy hitters such as Cheniere Energy, Sempra Energy, Louisiana Oil and Gas Association and Freeport LNG.

Since its launch, “Our Energy Moment” has disseminated press releases about the U.S. Department of Energy's (DOE) conditional approval of Jordan Cove LNG export facility in Coos Bay, Oregon and its conditional approval of Cameron LNG export facility in Hackberry, Louisiana.  

So the industry is funding a PR campaign clearly in its self interest. But so what? You have to read all the way to the bottom of the press releases to find what's perhaps the most interesting tidbit. 

At the very bottom of “Our Energy Moment's” releases, a contact person named Tiffany Edwards is listed with an email address ending in @blueenginemedia.com. If you visit blueenginemedia.com you'll find the website for PR and advertising firm Blue Engine Message & Media

Further, a domain name search for ourenergymoment.org reveals the website was registered by another PR and web development firm called Liberty Concepts by its founder and president Jonathan Karush. Karush registered the site on May 8, 2013, a full ten months before the campaign's official launch date. 

Who are these firms and why do they matter? That's where the fun begins.

Wed, 2014-03-26 11:54Steve Horn
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Admiral Dennis Blair: "We Sent Troops to Middle East...Because of Oil-Based Importance of Region"

At the just-completed U.S. House Committee on Foreign Affairs hearing titled, “The Geopolitical Potential of the U.S. Energy Boom,” Admiral Dennis Blair — former Director of National Intelligence, President and CEO of Institute for Defense Analyses and Commander in Chief of U.S. Pacific Command — admitted what's still considered conspiratorial to some.

Put tersely: the U.S. and allied forces launched the ongoing occupation in Iraq and occupy large swaths of the Middle East to secure the flow of oil to the U.S. and its global allies, explained Blair. 

Blair began his analysis lasting just over a minute after a line of questioning (beginning at 1:02:56 in the video below) coming from U.S. Rep. Jeff Duncan (R-SC) about TransCanada's Keystone XL tar sands pipeline, “energy as an instrument of geopolitical power” and geopolitical tensions in Venezuela. 

Mon, 2014-03-17 13:39Steve Horn
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Why ExxonMobil's Partnerships With Russia's Rosneft Challenge the Narrative of U.S. Exports As Energy Weapon

In a long-awaited moment in a hotly contested zone currently occupied by the Russian military, Ukraine's citizens living in the peninsula of Crimea voted overwhelmingly to become part of Russia.

Responding to the referendum, President Barack Obama and numerous U.S. officials rejected the results out of hand and the Obama Administration has confirmed he will authorize economic sanctions against high-ranking Russian officials.

“As I told President Putin yesterday, the referendum in Crimea was a clear violation of Ukrainian constitutions and international law and it will not be recognized by the international community,” Obama said in a press briefing. “Today I am announcing a series of measures that will continue to increase the cost on Russia and those responsible for what is happening in Ukraine.” 

But even before the vote and issuing of sanctions, numerous key U.S. officials hyped the need to expedite U.S. oil and gas exports to fend off Europe's reliance on importing Russia's gas bounty. In short, gas obtained via hydraulic fracturing (“fracking”) is increasingly seen as a “geopolitical tool” for U.S. power-brokers, as The New York Times explained. 

Perhaps responding to the repeated calls to use gas as a “diplomatic tool,” the U.S. Department of Energy (DOE) recently announced it will sell 5 million barrels of oil from the seldom-tapped Strategic Petroleum Reserve. Both the White House and DOE deny the decision had anything to do with the situation in Ukraine.

Yet even as some say we are witnessing the beginning of a “new cold war,” few have discussed the ties binding major U.S. oil and gas companies with Russian state oil and gas companies.

The ties that bind, as well as other real logistical and economic issues complicate the narrative of exports as an “energy weapon.”

Mon, 2014-03-10 06:00Steve Horn
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Testimony Reveals Record 36% of North Dakota Fracked Gas Was Flared in December

The recent March 6 House Energy & Commerce Subcommittee on Energy and Power hearing titled “Benefits of and Challenges to Energy Access in the 21st Century: Fuel Supply and Infrastructure” never had over 100 online viewers watching the livestream at any point in time. And it unfolded in an essentially empty room. 

But the poor attendance record had no relation to the gravity of the facts presented by testifiers. Among other things, one presenter revealed 36 percent of the gas by-product from oil obtained via hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin was flared off as waste during a brutally cold midwest winter with no end in sight.

These damning facts were brought forward by Coalition for Environmentally Responsible Economies (Ceres) Oil & Gas and Insurance Programs Director Andrew Logan, one of eight people called to testify around topics ranging from domestic propane markets to fossil fuels-by-rail markets, to pipeline markets and flaring. 

A topic covered previously by DeSmogBlog, Logan submitted to the Subcommittee that flaring “is getting worse, not better.”

“Flaring in North Dakota hit 36% in December, a new record,” Logan told the subcommittee“This means that more than 1/3 of all natural gas produced in the state is going up in smoke, at the same time as consumers around the country are seeing price spikes from natural gas in this cold winter, along with actual shortages of propane in many places.”

Logan also said that wasteful flaring is also a growing quagmire in Texas, which has seen a 10-fold increase in flaring permits since 2010.

At least one influential Subcommittee member has taken notice.

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