Toxic vapors suspected in deaths of three Colorado oil and gas workers

CrudeOilTankBatteryBy Monte Whaley – The Denver Post – May 18, 2015

Joe Ray Sherman’s death on a Weld County oil patch last year was tragic but not entirely unexpected.

The 51-year-old was diabetic and suffered heart problems. The native Texan moved to Colorado 20 years ago in hopes that the clear, mountain air would get him healthier.

The Weld County coroner confirmed what many believed, ruling his death while servicing one of the county’s oil wells was caused by heart disease.

But his March 2014 death soon became part of a mysterious puzzle that the Centers for Disease Control and Prevention is piecing together along with eight other oil field deaths over the past five years.

All of the fatalities occurred at crude oil production tanks, and all the victims were either working alone or weren’t being observed by anyone. Most of the death certificates listed natural causes or heart failure as the cause.

Three of the deaths were in Colorado, three more in North Dakota and one each in Texas, Oklahoma and Montana.

By late April, federal health officials had enough evidence to sound a national alarm over a dangerous trend in America’s oil fields. The men died after inhaling toxic amounts of hydrocarbon chemicals after either tank gauging — measuring the level of oil or other byproducts in tanks coming out of wells — or from taking samples of oil for more testing.

Continue reading story at The Denver Post


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Get ready for another oil price dip: Goldman Sachs

oil-drop-dollarsign – CNBC – Tuesday, 12 May 2015

The rally in oil over the last couple of months has derailed a rebalancing of the commodity’s price and will cause it to weaken, Goldman Sachs warned Tuesday. (Tweet This)

“We believe that the recent price rally is premature” the investment bank’s commodities team, led by Damien Courvalin, said in a note published Tuesday morning.

“Prices need to sequentially weaken, to resume the oil market rebalancing as well as help correct the still intact imbalance of too much capital looking for opportunities in the energy space.”

The price of oil collapsed from near-$120 a barrel in June last year to lows of around $45 a barrel in January, although it has since bounced back to around the $60-a-barrel level. Analysts are now contemplating oil’s “new equilibrium,” with a slew of market watchers predicting that prices could climb to around $70 before the end of the year.

However, Goldman Sachs said the price may have gotten ahead of itself and warned that oil was now trading at a premium compared to to its own “still weak fundamentals.”

These weak fundamentals include rising stockpiles of oil, it explained, and production growth is expected next year from low-cost producers such as Saudi Arabia, Iraq and Russia.

Added to this, Courvalin and his team said that the decline in the number of operational rigs in the U.S. wouldn’t be large enough to put production on a “persistent downward trend.” Meanwhile, U.S. producers are expected to ramp up production again if the WTI price settles above $60 a barrel.

Nonetheless, Goldman Sachs accepted that this “sequential decline” might not begin until later in the year.

Continue reading story at CNBC

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Colorado’s oil and gas slump is fallout from global game of ‘chicken,’ says exec

CEExpoLogowithDate_500x254 – Reporter-Denver Business Journal – May 13, 2015

The budget cuts, layoffs and office closures that have spread across Colorado’s oil and gas fields in recent months are the “collateral damage” in an international game of chicken involving the biggest energy producers on the planet, John Harpole, founder and owner of Mercator Energy LLC, told attendees at the Colorado Energy Expo on Wednesday.

And while oil prices have risen a bit in the last few weeks, Harpole said he doesn’t expect oil prices to return to the $80 per barrel for three years or more.

“We’ll see how long that’s sustained,” Harpole, a long-time Denver oil and gas expert, said of recent oil prices, which have edged into the $60 per barrel range in the last few weeks, up from $50 per barrel for much of the first quarter.

U.S. oil prices peaked in June 2014 at $107 per barrel.

“If we’re right on the idea of Saudia Arabia’s goals, we’ll see low oil prices for at least three years,” Harpole said during a talk at the Expo, which took place at the Sports Authority Field at Mile High.

Continue reading story at The Denver Business Journal


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Mom power helps compel change around Colorado oil, gas operations

Colorado Oil and Gas Commission

Colorado Oil and Gas Commission

By Mark Jaffe – The Denver Post – May 10, 2015

When Trisha Golding gets dressed up in business clothes, her two daughters say, “Mommy’s going to do oil and gas.”

After a driller proposed putting 19 oil and gas wells within 900 feet of the Greeley school where her older daughter attends second grade, Golding, 38, turned from stay-at-home mom into a regular at oil and gas hearings and meetings.

“This is not something I want to do,” she said, “but you want your children to be safe.”

Front Range moms who, like Golding, are worried about the impact of oil and gas drilling on their families, have been stepping up to microphones in local and state meetings across Colorado.

“These women have become reluctant experts on oil and gas,” said Matt Sura, an attorney who represents communities and homeowners in dealings with oil and gas companies. “They have taken the time to learn the issues, and they are slowly convincing people in state government, and in the oil and gas industry itself, that things have to change.”

And they are doing it without histrionics or predictions of environmental doom.

“I study facts,” said Shawndra Barry, 43, a Windsor mother of two third-graders. “I study the regulations. I don’t talk about health or water because those are things I can’t prove.”

Barry became involved in September, when she learned an oil and gas company had plans to drill wells in her rural subdivision.

Continue reading story at The Denver Post

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Oil top may be in, and it could get ugly: Analyst

OilPump – 

Oil has been enjoying a recent rally, but it very well may have peaked and could be headed lower, analyst John Kilduff said Wednesday.

Crude hit new highs for 2015 on Wednesday before paring gains as investors and traders took profits.

The report that gasoline inventories rose “was the key component to why I think the top might be in,” the founding partner of Again Capital said in an interview with “Closing Bell.

“I think the downward pressure is going to build.”

He believes the oil market recently rallied, in part, because of seasonal jitters over supplies, strong demand and the response at the pump.

“It was such a steep rally, such a steep uptrend on the chart … that once we break down below it to about even $60 a barrel, we can go a long way very rapidly and get back down at least to the low-$50s,” he added.

Continue reading story at MSNBC

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Oil and gas office closures continue in Denver

Pioneer_Natural_Resources_logo – Reporter-Denver Business Journal – May 4, 2014

Yet another oil and gas company is making cuts to its Colorado operations, with Pioneer Natural Resources Co. (NYSE: PXD) on Monday announcing it will close the company’s Denver office and cut the number of people working out of its Trinidad field office by nearly half.

Pioneer in a statement said the cuts were “a result of continued weakness in natural gas prices and the recent collapse of crude oil and natural gas liquids prices.”

Oil prices have slid to about half the recent peak price of $107 per barrel set in June 2014 and natural gas prices have been similarly dismal — averaging less than $3 per thousand cubic feet during 2015 compared to a peak of about $4.20 per thousand cubic feet last summer.

Pioneer said the company’s headquarters staff in Irving, Texas, a suburb of Dallas, would oversee the company’s operations in the Raton Basin, in southern Colorado, as well as in the West Panhandle field in Texas.

“The decision to close the Denver office and to consolidate the Colorado workforce was made to preserve the value of these assets and to allow for their continued development within the constraints of the current commodity pricing environment,” the company said.

Pioneer said that of its 70 employees in the Denver office, about one-third will be offered relocation opportunities to Dallas. The rest will be offered severance packages and access to outplacement services.

Continue reading story at The Denver Business Journal

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U.S. Shale Fracklog Triples as Drillers Keep Oil From Market

Untapped Well Inventory Builds Across U.S.  - Source Bloomberg Intelligence

Untapped Well Inventory Builds Across U.S. – Source Bloomberg Intelligence

 and  – Bloomberg Business – April 23, 2015

Think the U.S. is awash in crude now? Thank the fracklog that it’s not worse.

Drillers in oil and gas fields from Texas to Pennsylvania have yet to turn on the spigots at 4,731 wells they’ve drilled, keeping 322,000 barrels a day underground, a Bloomberg Intelligence analysis shows. That’s almost as much as OPEC member Libya has been pumping this year.

The number of wells waiting to be hydraulically fractured, known as the fracklog, has tripled in the past year as companies delay work in order to avoid pumping more oil while prices are low. It’s kept crude off the market with storage tanks the fullest since 1930. The fracklog may slow a recovery as firms quickly finish wells at the first sign of higher prices.
“Once service costs come down and drillers begin to work through their higher-than-normal backlog, the market should start to price in that supply coming online,” Andrew Cosgrove, an energy analyst for Bloomberg Intelligence in Princeton, New Jersey, said by phone. “It may act as a cap on prices.”

Futures for U.S. benchmark West Texas Intermediate oil tumbled by more than $50 a barrel in second half of last year amid a worldwide glut of crude. They rose $1.58 to settle at $57.74 a barrel on the New York Mercantile Exchange.

Growing Fracklog

Oil production in the lower 48 states would rise 322,000 barrels a day to an average 7.485 million in the fourth quarter of 2016 if drillers start shrinking their fracklogs by 125 wells a month in October, Bloomberg Intelligence models show. The forecast assumes horizontal oil rigs fall another 10 percent through the third quarter and prices are unchanged.

Continue reading story at Bloomberg Business

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Scientists convinced of tie between earthquakes and drilling

Earthquake Fault Diagram - Courtesy USGS

Earthquake Fault Diagram – Courtesy USGS

ALICIA CHANG – Associated Press – April 23, 2015
LOS ANGELES (AP) — With the evidence coming in from one study after another, scientists are now more certain than ever that oil and gas drilling is causing hundreds upon hundreds of earthquakes across the U.S.

So far, the quakes have been mostly small and have done little damage beyond cracking plaster, toppling bricks and rattling nerves. But seismologists warn that the shaking can dramatically increase the chances of bigger, more dangerous quakes. Continue reading “Scientists convinced of tie between earthquakes and drilling” »

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