Colorado Tried Methane Caps on Drillers, And They Worked

1280px-Flag_of_Colorado.svgby  and  – Aug 18, 2015

For an idea of how the U.S. government’s proposed methane rules will affect drillers, look no further than Colorado.

The state became a test case for similar controls last year when a coalition of energy companies and environmental groups agreed on measures to cut the pollution. In a bid to address smog, regulators there adopted the nation’s first requirements for oil and natural gas companies to find and fix methane leaks.

Drillers who were already voluntarily curbing emissions accepted Colorado’s rules with little opposition. Gas production in May was up 1.5 percent from the same period two years earlier, Energy Information Administration data show. A state analysis estimated that the rules cost drillers about 0.4 percent of their annual revenues.

“Methane is a product we sell, so it’s in our business interest as well as in our general interest as environmental stewards to make sure every molecule goes into the sales line,” John Christiansen, a spokesman for Anadarko Petroleum Corp., said by phone Tuesday.

Industry groups such as the American Petroleum Institute criticized rules proposed by the Environmental Protection Agency on Tuesday to curb methane emissions in the country, saying they would exacerbate an already painful price crash. Crude oil has slumped by about half in a year, while gas prices have dropped 30 percent.

“The administration is proposing a costly and complicated regulatory program for few environmental benefits,” Barry Russell, president of the Independent Petroleum Association of America, said in a statement.

Continue reading at Bloomberg Business

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EPA to propose rules to curb methane emissions from oil and gas sector

USEPAReuters, Aug 17, 2015

WASHINGTON (Reuters) – The U.S. Environmental Protection Agency will propose regulations on Tuesday aimed at cutting methane emissions from the oil and gas sector by 40 to 45 percent over the next decade from 2012 levels, a source familiar with the issue said on Monday.

The regulations on methane are one part of the Obama administration’s strategy to curb greenhouse gases and combat climate change.

The targets in Tuesday’s proposal are in line with a January announcement by the Obama administration that it wanted to reduce oil and gas industry methane emissions by up to 45 percent from 2012 levels by 2025, the source said.

Earlier this month, President Barack Obama unveiled the final version of his plan to tackle greenhouse gases from coal-fired power plants, requiring carbon emissions from the sector be cut 32 percent from 2005 levels by 2030.

(Reporting By Valerie Volcovici; Writing by Mohammad Zargham; Editing by Peter Cooney)

See also: Don’t Be Fooled – NASA’s Front Range Ozone Test Is Really All About Oil

Continue reading at Reuters


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BLM to auction Niobrara drilling rights on Pawnee National Grassland

US Forest Service Map showing location of Pawnee National Grasslands

US Forest Service Map showing location of Pawnee National Grasslands

BLM to auction more drilling rights on Pawnee National Grassland

For sale to the highest bidder: Thousands of acres of federally owned mineral rights in two southern Colorado counties and in the Pawnee National Grassland near the Colorado-Wyoming border.

Grassland-area drilling would only be allowed from private parcels adjacent to federal property, however.

The federal Bureau of Land Management (BLM) said Friday it will offer at its November lease auction 19 parcels totaling 10,050 acres in three counties: Weld, Huerfano and Las Animas. The Weld County parcel is near Fort Morgan.

Also on the BLM’s auction block in November are 102 parcels owned by the U.S. Forest Service covering 79,487 acres of underground mineral rights within the Pawnee National Grassland in Weld County — a rolling area of Colorado’s eastern plains that is known internationally among bird watchers for the variety of wildlife that live in the area.

In May, the BLM sold leases to 25,215 acres o f mineral rights in the Pawnee National Grassland for $30.8 million.

The grassland area is part of Colorado’s big oil boom stemming from the Niobrara rock formation and other rock layers thousands of feet underground. The state has set records for oil production in the last few years, with much of the oil coming from new Weld County wells.

Continue reading article at The Denver Business Journal

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US Shale Declining And OPEC Still Climbing – Niobrara Production Peaking March 2015

Niobrara Production - EIA

Niobrara Production – EIA

By Ron Patterson – Tue, 11 August 2015

There is new data out today. The EIA published their International Petroleum Statistics yesterday. The EIA also published their Drilling Productivity Reportwhich gave their expected shale oil and gas production through September. Then this morning OPEC published their Monthly Oil Marketing Report with OPEC crude only production numbers through July.

First the Drilling Productivity Report. Of course most of the Drilling Productivity Report is projection, not history. And that projection goes through September 2015.

The EIA has the Bakken peaking in December and declining 107 thousand barrels per day since that point. A secondary peak was reached in April and declining steadily since then.

The EIA has Eagle Ford peaking in March and declining 226 thousand barrels per day since that point.

The EIA has Niobrara peaking in March, almost flat for one month then declining sharply after that for a total decline of 75 thousand barrels per day after that.

Continue reading article at

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OPEC is now effectively dissolved – BofA

OPEC LogoBy , The Telegraph – Aug 5, 2015

Saudi Arabia may go broke before the US oil industry buckles

It is too late for OPEC to stop the shale revolution. The cartel faces the prospect of surging US output whenever oil prices rise.

If the oil futures market is correct, Saudi Arabia will start running into trouble within two years. It will be in existential crisis by the end of the decade.

The contract price of US crude oil for delivery in December 2020 is currently $62.05, implying a drastic change in the economic landscape for the Middle East and the petro-rentier states.

The Saudis took a huge gamble last November when they stopped supporting prices and opted instead to flood the market and drive out rivals, boosting their own output to 10.6m barrels a day (b/d) into the teeth of the downturn.

Bank of America says OPEC is now “effectively dissolved”. The cartel might as well shut down its offices in Vienna to save money.

If the aim was to choke the US shale industry, the Saudis have misjudged badly, just as they misjudged the growing shale threat at every stage for eight years. “It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought, at least in the short-run,” said the Saudi central bank in its latest stability report.

“The main impact has been to cut back on developmental drilling of new oil wells, rather than slowing the flow of oil from existing wells. This requires more patience,” it said.

Continue reading story at The Telegraph

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Encana, Erie reach agreement on oil and gas operations

Erie Town Hall - Image Credit - Wikepedia

Erie Town Hall – Image Credit – Wikepedia

Six months after the Erie Board of Trustees narrowly rejected a proposal to ban new oil and gas drilling in the northern Front Range town, the town has reached a new “Memorandum of Understanding” with Encana Corp. that will govern future plans, says Mayor Pro-Tem Mark Gruber.

“We just finished the agreement with Encana,” Gruber said Wednesday at a meeting in Broomfield.

The Broomfield meeting included several dozen people, including state officials from the Colorado Oil and Gas Conservation Commission (COGCC), local officials from Boulder and Larimer counties and 10 towns on Denver’s northern flank, as well as representatives from the energy industry and other stakeholder groups.

The meeting was called to gather input from local officials on how to increase the communication they have with energy companies before a decision is made on where to locate a new oil and gas well or support facility in a local jurisdiction.

More communication in advance of a siting decision was a key recommendation from Gov. John Hickenlooper’s oil and gas task force in February.

Erie’s Board of Trustees is expected to vote on the agreement next week at its July 28 meeting, Gruber said.

After the meeting, Gruber said the agreement will be released to the public as part of the agenda package for the meeting. Erie officials said the packet should be posted to the town’s website on Friday. Gruber and town officials declined to release it in advance.

Continue reading story at The Denver Post

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Niobrara M&A Activity on the Horizon?

OilPumpGoldman Sachs sees Cabot, Range as majors’ top shale M&A targets

By  SNL Financial, July 17, 2015

“We see an active opportunity for intra-shale consolidation among E&Ps,” Goldman said. “Multiple shale plays have very fragmented ownership, particularly the Permian Basin, Marcellus Shale, Utica Shale and DJ Basin.”

Appalachia’s Cabot Oil & Gas Corp. and Range Resources Corp. are among the top upstream candidates to be picked off by a supermajor as those giants go hunting for M&A later in the year, Goldman Sachs Global Investment Research analysts said.

Buying oil and gas reserves on Wall Street will be cheaper than finding them in the field at current prices, Goldman said, and the majors have $150 billion ready to spend. Snapping up a healthy independent with quality acreage would go a long way to balance out the shale-light portfolios of the majors, as well as provide cost-effective reserve replacement, Goldman told its clients July 15. Continue reading “Niobrara M&A Activity on the Horizon?” »

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More crude oil is being shipped out of Rockies by train, despite more pipes

A DOT-111 tank car, specification 111A100W1, constructed by fusion welding carbon steel. This car has a capacity of 30,110 US gallons (113,979 L; 25,071.8 imp gal), a test pressure of 100 psi (690 kPa), a tare weight of 65,000 pounds (29,500 kg) and a load limit of 198,000 pounds (89,800 kg). - Image Source: Wikepedia

A DOT-111 tank car, specification 111A100W1, constructed by fusion welding carbon steel. This car has a capacity of 30,110 US gallons (113,979 L; 25,071.8 imp gal), a test pressure of 100 psi (690 kPa), a tare weight of 65,000 pounds (29,500 kg) and a load limit of 198,000 pounds (89,800 kg). – Image Source: Wikepedia

As the amount of oil production from Colorado’s Niobrara field north of Denver has skyrocketed in the last few years, pipeline and railroad companies that specialize in shipping oil out of the region have scrambled to keep up.

Pipeline capacity out of the Rocky Mountain region has grown, but oil and gas companies — pressed by time and money — have increasingly turned to shipping the newly pumped crude oil to market by rail.

It’s faster and cheaper to build new crude-by-rail terminals to unload crude oil from trucks and onto rail cars for shipment than to plan and build new pipelines. Continue reading “More crude oil is being shipped out of Rockies by train, despite more pipes” »

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