Unconventional oil and gas (UOG) operations in the US that involve fracturing may be harming human health. By inference, research being carried out at the University of Missouri may sound alarm bells in the UK and wider EU where shale gas extraction (and oil) industry has yet to start. Up to now in the US, discussions have largely concentrated on potential air and water pollution from chemicals used in these processes and how it affects the more than 15million Americans living within one mile of UOG operations.
A private club in North Dakota’s Bakken shale that once charged membership fees as high as $25,000 and served jumbo shrimp cocktail was evicted this month in a sign that oil’s plunge is undercutting the region’s go-go years. The Bakken Club was ordered on December 17 to vacate its premises on Williston’s Main Street after failing to pay rent, state court records show. The club owed $21,598 for rent plus $1,329.90 in late fees, the landlord, On The Spot Development LLC, said in a November 25 complaint. One check bounced.
The US shale boom is connecting markets and changing the way oil and gas is bought and sold, according to BP’s trading unit. Understanding one commodity in a region is no longer enough, Carol Howle, head of global oil Europe and finance at BP Integrated Supply & Trading, said. Change in trade flows will come as the US turns from an importer of liquefied natural gas to an exporter and liquefied petroleum gas export capacity increases, she said.
Billionaire Harold Hamm, whose early adoption of shale drilling in North Dakota helped usher in a US energy renaissance, plans to cut spending by 41% at his company after the plunge in oil prices. Continental Resources Inc. and other US producers can adjust quickly to the crude collapse and will be able to withstand the downturn better than many producing countries, which face economic “ruin,” Hamm said in an interview. “The oil and gas industry has lowered the cost of gasoline to consumers in this country,” Hamm, chairman and chief executive officer of Continental, said yesterday.
Crude prices surged from the lowest closing levels since May 2009 as comments from Saudi Arabia’s oil minister yesterday added to the most volatile market in three years. West Texas Intermediate climbed 4.5% in New York, the biggest gain since August 2012. Both WTI and Brent rose more than 5 percent during the session. A measure of expected WTI futures movements and a gauge of options value was at the highest level since October 2011, data shows.
Magnum Hunter Resources said it experienced a blowout of a well in Ohio. The company had previously drilled the Stadler 3UH wel, in the Utica shale, before temporarily plugging and abandoning it in preparation for the drilling of three additional Utica horizontal wells. However a spokesman said the it began to flow uncontrollably while recommencing operations.
The onshore hydrocarbon producer, IGas, has encountered signs of shale gas at its Ellesmere Port exploration well in the North West of England. The company spudded the well last month and reached total depth ahead of schedule two days ago. IGas said the vertical exploration well encountered a thick section of the coal measure interval as well as a shale sequence, before penetrating the key Dinantian limestone geophysical marker.
Oil extended losses below $60 a barrel amid speculation that OPEC’s biggest members will defend market share against US shale producers. Brent also slid after closing at the lowest price since July 2009. West Texas Intermediate futures fell as much as 1.9% in New York and are down 10% this week.
Local councils lack the expertise and resources to properly regulate the UK’s fledgling shale gas industry, according to a new study. Under 60% of those questioned for the report believe that local authorities cannot manage the environmental risks when considering planning applications for shale gas wells. Even among local government themselves, only 49% of respondents think that they have the skills to weigh up the environmental risks.
Labour is attempting to tighten the rules on fracking to prevent shale gas exploration in protected areas such as national parks and improve environmental safeguards. Shadow energy minister Tom Greatrex has tabled 11 amendments to the Infrastructure Bill to close what Labour describes as “key loopholes” in the environmental regulations governing extraction of the unconventional gas resource. The amendments include introducing a presumption against development in protected areas such as national parks and areas of outstanding natural beauty (AONBs) and putting an obligation on operators to monitor and report “fugitive” emissions from sites.
West Texas Intermediate and Brent extended declines from the lowest close in more than five years amid speculation that US oil producers will fight OPEC for market share. Futures dropped as much as 1.8% in New York and 1.9% in London. Explorers in the U.S. increased the number of operating rigs last week, defying predictions of a drilling slowdown, according to data from Baker Hughes Inc. Brent’s 14-day relative strength index has been below 30 since November 27, a reading that signals crude is oversold. Oil is trading in a bear market amid signs that US output is expanding even after the Organization of Petroleum Exporting Countries opted not to reduce its production target.
Collapsing crude prices have given oil producers a new argument for ending a 39-year-old US ban on exports. With US output at a 31-year high and imports at the lowest level since 1995, producers seeking the best possible price for crude are straining at having to keep sales at home. Removing the ban could erase an imbalance between US and foreign crude prices by expanding the market for shale oil.
Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on November 28, according to the marketing arm of Plains All American (PAA) Pipeline LP. That’s down 47% from this year’s peak in June, and 29% less than the $70.15 paid for Brent, the global benchmark.
West Texas Intermediate crude fell, trimming the biggest rally since August 2012 as investors weighed OPEC’s decision to let the market curb a global supply glut. Brent slid in London. Futures dropped 0.7% in New York, decreasing for the fifth time in six days. The Organization of Petroleum Exporting Countries may hold an emergency meeting in the first quarter of next year, Venezuela’s Foreign Minister Rafael Ramirez said in an interview. The group’s failure to cut output at a gathering last week bodes well for US producers, according to billionaire wildcatter Harold Hamm, a founding father of the nation’s shale boom.
Last month at PETEX in London, the hunt for shale gas resources in the UK was a hot topic and among the companies offering their expertise and wares at the show was CGG, currently being stalked by fellow French group Technip, and US energy services giant Baker Hughes, which arch rival Halliburton ha made a $35billion bid for. While companies such as these cannot easily answer the social and political questions, or indeed even wish to engage that way, they can contribute to the debate on technical feasibility and potential. And both Baker and CGG are well equipped to do this. Firstly, and according to CGG, we in Europe and not just the UK have the opportunity to benefit from the latest developments in North America. Integrated workflows, which bring together a broad range of geoscience data, have shown great potential for the comprehensive reservoir characterisation required to optimise drilling and completion activities in heterogeneous unconventional resource plays.
The NFUS (National Farmers Union Scotland) has been informing its members about what fracking could mean for its industry. A meeting was held for 80 members from parts central Scotland where drilling for unconventional gas could occur in the next few years. Speakers from potential fracking developers including Ineos and environmental regulator SEPA spoke at the event.
Shale gas provided the largest share of American natural gas production last year, new figures have shown. The US Energy Information Administration said withdrawals reached a new high of 82billion cubic feet per day (Bcf/d) last year. Shale gas well withdrawals jumped from five bcf/d in 2007, to 33 bcf/d in 2013, representing a 40% increase in total gas production and surpassing production from non-shale gas wells.
The Scottish Government said a "cautious approach" should be taken to the announcement by Ineos that it plans to invest £640million in shale and gas exploration in the UK. The move by chemicals giant Ineos could make it the biggest player in the industry in the country. The company already has two licences near its plant at Grangemouth in Scotland but is applying for more in Scotland and the north of England. It plans to use the gas as a raw material for its chemicals plants, including Grangemouth in Stirlingshire.
Chemicals giant Ineos has announced plans to invest £640 million in shale gas exploration and appraisal in a move which could make it the biggest player in the industry in the UK. The company already has two licences near its plant at Grangemouth in Scotland but is applying for more in Scotland and the north of England. Chairman Jim Ratcliffe said he wanted Ineos to become the biggest company in the British shale gas industry.
Almost in line with falling global oil prices share value of oilfield service companies have slumped by around 25% over the past four months. These are the same companies that have benefited greatly from the US fracking boom that transformed the standing of the US as an oil and gas producer; its position as number one oil consumer has never been at risk. But the halcyon days of unfettered profits for US frackers and service companies look to be over.
One worker has been killed and two seriously injured in a fracking accident at an oil or gas well site in northern Colorado. Three men were trying to heat a frozen high-pressure water line when something went wrong and the line ruptured.
The proposal from the Department of Energy and Climate Change (DECC) to establish a sovereign wealth fund based on future revenues from the extraction of shale gas, is, in principle a good idea. Many countries now have such a fund, turning current oil and gas revenues into a national asset for the long term. Norway's fund is most often quoted as an example; another lesser known example is the state of Texas in the US which has such a fund for its universities. The details of the proposal from DECC are yet to be released so its final shape and impact is unknown. Given the size of the UK economy, and our budget deficit, the idea that we can build a large financial fund of the type enjoyed by Norway is unrealistic. However, I would argue that there is still a great deal that could be done with a shale gas fund. Most sovereign wealth funds build financial capital taking revenues from the oil and gas industry and investing them in the stock exchange. I would propose DECC consider a fund for human capital, not financial capital.
Most countries in Europe look on Norway with envy. As the UK and other European countries struggle with reducing public spending, Norway benefits from a sovereign wealth fund worth around £500 billion. It has wisely invested the income from its oil and gas reserves, with its fund considered by many to be the world’s largest.
The regulations imposed on shale gas fracking are “unnecessarily restrictive”, according to research by two University of Glasgow academics. In a new paper, Dr Rob Westaway and Professor Paul Younger from the School of Engineering, claim widely applying restrictions similar to those in force on fracking would require a ban on heavy vehicles from passing houses or walking on wooden floors. The report also states that the threat of serious earthquakes caused by fracking activity is considerably lower than commonly feared.
Technology services company Applus RTD has opened a new office in Pennsylvania driven by its operations surrounding the Marcellus Shale formation. The new offices, based in Pennsylvania, are part of the company’s strategic growth plan following demand for its non-destructive (NDT) services in the area.