Ah, if the exploration for and production of oil and gas was only as simple as the science and engineering. Of course now we have politics. I suppose there has always been politics, but have politics and environmental regulations ever been so restrictive? It is not my intent to discuss politics here, but the following article provides some insight into some of the issues that must be dealt with before exploration and production can even begin.
Peter
March 10, 2009
New York understaffed to handle gas rush
By Tom Wilber
twilber@gannett.com (source : The Ithaca Journal)
The debate over natural gas production in the Central New York region is often couched in terms of economy versus ecology. But many advocates and officials believe one doesn't have to be sacrificed for the other.
There is a catch, of course, and it has everything to do with money.
In order to capitalize on the gas-rich Marcellus Shale formation, while minimizing environmental risks, there must be sufficient manpower to draft and enforce regulations.
On that, there is little disagreement.
In Pennsylvania, the Department of Environmental Protection is creating 37 new positions - despite a statewide hiring freeze - to oversee Marcellus production. The positions will be added to Pennsylvania's Office of Mineral Resources Management, which oversees nearly 600 employees who handle many issues in addition to natural gas production.
Officials in New York, however, have few answers as to how 19 employees in the Bureau of Oil & Gas Regulation - part of the state's Department of Environmental Conservation - will be able to handle a rush of permits and intensive drilling activity on this side of the border.
"Clearly, we are not staffed to do the job," said Assemblywoman Donna A. Lupardo, D-Endwell.
As a member of the Assembly's Environmental Conservation Committee, Lupardo has been closely following the heated debate over gas drilling's ecological consequences and its economic opportunity.
While she champions environmental causes, she is quick to acknowledge the importance of the economic boost the gas rush promises for the Southern Tier.
"You can't have a conversation about this topic without talking about both of these things," she said.
As of now, there are no provisions in the proposed New York budget to add to the state's Bureau of Oil & Gas Regulation. But adjusting for the gas rush has to be addressed, Lupardo said, and she and other lawmakers are "waiting to hear from the governor's office on what direction to take."
Lindsay Wickham, a spokesman of the New York State Farm Bureau, is scheduled to travel to Albany early this week to lobby lawmakers to address issues related to the gas rush.
"We know they (New York oil and gas regulators) need more staff," he said. "That's been an ongoing issue for years."
Jeffrey Gordon, a spokesman for New York State's Division of Budget, said Friday the state is determining the need for more staff and how to pay for it as it assesses the environmental impact from drilling.
For now, permit applications in New York are effectively on hold while companies wait for the state to update its drilling regulations, expected to be completed later this year.
"Both of those processes are ongoing and will be resolved as we get more information," he said.
Not everybody feels the urgency to staff up.
Dan Fitzsimmons, who heads a group of about 400 residents owning about 15,000 acres in the towns of Binghamton and Conklin, is afraid the regulatory overhaul delaying Marcellus production in New York will stifle interest over the long run.
"Pennsylvania is doing it right," he said. "They have the industry, and now they are hiring the people. Let's get the industry here first."
Pennsylvania's natural gas industry is, in fact, booming, with a record 7,924 permits issued and nearly 4,200 new wells drilled in the past year, according to information from the DEP. Agency officials expect to process and oversee 40,000 new drilling permits during the next three years.
By comparison, about 2,000 permits were issued in the year 2000.
Like New York, Pennsylvania faces a budget crisis and hiring freeze. But the DEP is creating 37 new positions and opening up a new office in Williamsport to oversee the gas rush in the northeast and north central regions.
The positions will include geologists, environmental engineers, oil and gas inspectors, and water quality experts, said Teresa Candori, press secretary for the DEP.
"This has the potential to be an enormous economic development," she said. "The comparison is to the gold rush. We want to make sure we can take advantage of the economic opportunity while protecting our water resources."
To pay for the staff increases, Pennsylvania has increased permit fees for drilling.
The New York State Farm Bureau - whose members have a large stake in the issues economically and environmentally - supports a similar approach for New York, Wickham said.
Lupardo said lawmakers and administrators are considering a fee increase as a way to pay for oversight, although no formal proposal has been publicly brought to the table.
Without more regulators, permit applications and review could become quickly backlogged, which would in turn discourage development, according to some industry watchers.
Could a logjam and pressure from industry make it too convenient for officials to rubber-stamp applications to keep up with an overwhelming workload?
Lupardo doubts it.
"I would be surprised if this is fast-tracked without environmental oversight," she said. "There are way too many people looking at this."
Wickham wasn't sure.
"There is no question the gas industry is a very powerful lobby," he said.
Addendum: An interesting comment from a reader....
urn4580 wrote:
This is but one of thousands of examples why government can offer nothing but excuses.Get ready for when 'the messiah' socializes healthcare in the US.Your heart attack will have to wait six months because "clearly we are understaffed to do the job..."3/10/2009 8:09:19 AM
Friday, March 13, 2009
The Squeaky Wheel Gets The Grease
In America that means those with lobbyists in Washington, D.C. get the "grease" (investments). It seems that as much as things change, they stay much the same. Like it or not; new administration, or not. The following article from the "Wall Street Journal" describes efforts by gas producers to promote their product. It is a clean fuel, it is increasingly abundant, and the infrastructure, or ability to produce and distribute it already exists.
While we wait for "alternative" sources of energy to become reality, America and the world is going to need all the natural gas it can find and deliver.
Peter
FEBRUARY 25, 2009
Natural-Gas Producers Launch Lobbying Group
By BEN CASSELMAN
U.S. natural-gas companies, hurt by a combination of booming supplies and falling demand, are banding together to promote their product with lawmakers and the public.
Such industry heavyweights as Newfield Exploration Co., Devon Energy Corp. and Chesapeake Energy Corp. will announce Wednesday the formation of the American Natural Gas Alliance to push broadly for more use of gas in power generation, transportation and other fields. The group says its more than 20 members account for roughly 40% of all U.S. gas output.
Production has surged in the past year, as new technologies have unlocked vast quantities of gas trapped in tight rock known as shale. Newly discovered fields in Texas, Louisiana, Arkansas and elsewhere have flooded the market with new gas, helping fuel a collapse in natural-gas prices, which last week touched a six-year low. Prices have plummeted to just over $4 per million British thermal units from more than $13 per million BTUs in July.
New supplies aren't the only cause of the price drop -- weak industrial demand has also contributed. But producers and their investors are increasingly concerned that the market will remain oversupplied even when the economy recovers.
Leaders of the new group argue the boom in gas production presents an opportunity to rethink the nation's energy policy. They note that gas burns more cleanly than coal, is produced domestically and relies on existing technology and infrastructure. But policy makers have not embraced wide use of natural gas, in part because U.S. production was declining until the recent discoveries.
"In order to promote greater use of natural gas, you've got to convince people it's abundant," said Newfield Chairman and Chief Executive David Trice, who will serve as chairman of the new coalition.
Mr. Trice said he and other industry executives began talking last year about the need for a louder voice in Washington. In the past, gas producers spread their message to politicians and the public through groups such as the American Petroleum Institute and the Independent Petroleum Association of America. Most energy companies produce both oil and gas, and the interests of both fuels were considered to be similar.
In recent years, the two fuels have headed in opposite directions. U.S. oil production has continued to decline, and oil companies are concerned about finding new areas to drill, whereas gas producers are more worried about finding customers for their surging supplies.
"The natural-gas industry lacks a unified voice," energy analysts from Wachovia wrote in a recent report. The analysts noted that that the recently approved federal stimulus package included no significant support for the gas industry, and concluded that "the gas industry has utterly failed to address the demand side."
The new alliance is not the first effort to promote the wider use of natural gas. In 2007, Chesapeake Energy, the largest U.S. gas producer, helped create the American Clean Skies Foundation. The foundation has teamed up with the Sierra Club, among others, to promote gas as a cleaner alternative to coal. Mr. Trice said his group will not attack coal or other energy sources, and merely aims to promote gas.
The new group has hired trade-group veteran Rodney Lowman as its president. Mr. Lowman, 60 years old, previously ran the Abundant Forests Alliance, an advocacy group for the wood and paper-products industries, and the American Plastics Council.
Write to Ben Casselman at ben.casselman@wsj.com
While we wait for "alternative" sources of energy to become reality, America and the world is going to need all the natural gas it can find and deliver.
Peter
FEBRUARY 25, 2009
Natural-Gas Producers Launch Lobbying Group
By BEN CASSELMAN
U.S. natural-gas companies, hurt by a combination of booming supplies and falling demand, are banding together to promote their product with lawmakers and the public.
Such industry heavyweights as Newfield Exploration Co., Devon Energy Corp. and Chesapeake Energy Corp. will announce Wednesday the formation of the American Natural Gas Alliance to push broadly for more use of gas in power generation, transportation and other fields. The group says its more than 20 members account for roughly 40% of all U.S. gas output.
Production has surged in the past year, as new technologies have unlocked vast quantities of gas trapped in tight rock known as shale. Newly discovered fields in Texas, Louisiana, Arkansas and elsewhere have flooded the market with new gas, helping fuel a collapse in natural-gas prices, which last week touched a six-year low. Prices have plummeted to just over $4 per million British thermal units from more than $13 per million BTUs in July.
New supplies aren't the only cause of the price drop -- weak industrial demand has also contributed. But producers and their investors are increasingly concerned that the market will remain oversupplied even when the economy recovers.
Leaders of the new group argue the boom in gas production presents an opportunity to rethink the nation's energy policy. They note that gas burns more cleanly than coal, is produced domestically and relies on existing technology and infrastructure. But policy makers have not embraced wide use of natural gas, in part because U.S. production was declining until the recent discoveries.
"In order to promote greater use of natural gas, you've got to convince people it's abundant," said Newfield Chairman and Chief Executive David Trice, who will serve as chairman of the new coalition.
Mr. Trice said he and other industry executives began talking last year about the need for a louder voice in Washington. In the past, gas producers spread their message to politicians and the public through groups such as the American Petroleum Institute and the Independent Petroleum Association of America. Most energy companies produce both oil and gas, and the interests of both fuels were considered to be similar.
In recent years, the two fuels have headed in opposite directions. U.S. oil production has continued to decline, and oil companies are concerned about finding new areas to drill, whereas gas producers are more worried about finding customers for their surging supplies.
"The natural-gas industry lacks a unified voice," energy analysts from Wachovia wrote in a recent report. The analysts noted that that the recently approved federal stimulus package included no significant support for the gas industry, and concluded that "the gas industry has utterly failed to address the demand side."
The new alliance is not the first effort to promote the wider use of natural gas. In 2007, Chesapeake Energy, the largest U.S. gas producer, helped create the American Clean Skies Foundation. The foundation has teamed up with the Sierra Club, among others, to promote gas as a cleaner alternative to coal. Mr. Trice said his group will not attack coal or other energy sources, and merely aims to promote gas.
The new group has hired trade-group veteran Rodney Lowman as its president. Mr. Lowman, 60 years old, previously ran the Abundant Forests Alliance, an advocacy group for the wood and paper-products industries, and the American Plastics Council.
Write to Ben Casselman at ben.casselman@wsj.com
There Is Light At The End Of The Tunnel
Gas prices and drilling and production of natural gas will continue to increase. Now is the time to prepare. So says a VP for Devon Energy Corp. and reported in the following article from the Oil & Gas Journal. This is good news for the shale gas plays and horizontal drilling and interpretation.
Peter
GPA09: Gas recovery coming sooner, not later
Warren R. True
Chief Technology Editor-LNG/Gas Processing
SAN ANTONIO, Mar. 10 -- Rapidly declining US natural gas rig counts and prices are setting the stage for a recovery in both sooner rather than later. That was the message today of Gregory A. Dodd, vice-president for natural gas marketing and supply at Devon Energy Corp. in remarks to the 88th Annual Convention of the Gas Processors Association in San Antonio.
Dodd sees signs of this eventuality in the rapid pace that gas rigs are being laid down or otherwise pulled away from US gas plays, especially shale areas. He also said many wells are being completed but not yet tied into gathering and transmission infrastructure.
Today's fuel
The coming recovery is evident in the accelerating rate of production decline, the increased use of natural gas in electric power generation as falling prices make it more of the fuel of choice, and the inevitable US economic recovery. Devon, said Dodd, is "getting ready for a turnaround" by, in part, increasing its 2009 capital budget over 2008.
Natural gas, Dodd said, is "not the fuel of the future but the fuel of today." Companies need to be prepared for recovery by reducing debt and reorganizing management structures to speed decision making.
They also need to shorten response times for rig mobilization once recovery begins and be actively influencing policy making, especially at the federal level. Currently, said Dodd, the story of natural gas is not getting told in Washington, DC.
LNG will play a critical role, he said, in meeting demand in the recovery, as it will take US production companies 6 months from the time rigs are called back to work and increased production from that new work.
Contact Warren R. True at warrent@ogjonline.com.
Peter
GPA09: Gas recovery coming sooner, not later
Warren R. True
Chief Technology Editor-LNG/Gas Processing
SAN ANTONIO, Mar. 10 -- Rapidly declining US natural gas rig counts and prices are setting the stage for a recovery in both sooner rather than later. That was the message today of Gregory A. Dodd, vice-president for natural gas marketing and supply at Devon Energy Corp. in remarks to the 88th Annual Convention of the Gas Processors Association in San Antonio.
Dodd sees signs of this eventuality in the rapid pace that gas rigs are being laid down or otherwise pulled away from US gas plays, especially shale areas. He also said many wells are being completed but not yet tied into gathering and transmission infrastructure.
Today's fuel
The coming recovery is evident in the accelerating rate of production decline, the increased use of natural gas in electric power generation as falling prices make it more of the fuel of choice, and the inevitable US economic recovery. Devon, said Dodd, is "getting ready for a turnaround" by, in part, increasing its 2009 capital budget over 2008.
Natural gas, Dodd said, is "not the fuel of the future but the fuel of today." Companies need to be prepared for recovery by reducing debt and reorganizing management structures to speed decision making.
They also need to shorten response times for rig mobilization once recovery begins and be actively influencing policy making, especially at the federal level. Currently, said Dodd, the story of natural gas is not getting told in Washington, DC.
LNG will play a critical role, he said, in meeting demand in the recovery, as it will take US production companies 6 months from the time rigs are called back to work and increased production from that new work.
Contact Warren R. True at warrent@ogjonline.com.
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