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The Energy Information Administration’s annual long-term forecast “shows the growing importance of natural gas from domestic shale gas resources in meeting U.S. energy demand,” Richard Newell, the agency’s administrator, said today. Photographer: Andrew Harrer/Bloomberg

Production forecasts for natural gas locked in shale have doubled, which will help the U.S. become less reliant on imported energy, according to a federal agency.

The Energy Information Administration’s annual long-term forecast shows gas from shale will play a bigger role in meeting U.S. demand, Richard Newell, agency administrator, said today in Washington. Production in 2035 is “twice the level that we had in last year’s outlook,” he said.

The Annual Energy Outlook predicts imports will meet 18 percent of U.S. demand by 2035, down from 24 percent last year. Higher prices will spur fuel production, including natural gas, oil and coal, the agency said. Tougher energy-saving rules, such as fuel-economy mandates for new cars, and a boost in biofuel production from crops such as corn also will make the U.S. less reliant on imports by 2035, according to the forecast.

Overall U.S. energy consumption will jump 21 percent by 2035. Coal will remain the “dominant energy source for electricity generation,” although more natural-gas fired plants will be built because of higher supplies of the cleaner-burning fuel, according to the outlook.

The agency forecasts construction of five nuclear plants by 2035, contributing to a 10 percent increase in electricity generated from atomic power. The share of electricity from renewable sources such as hydroelectric dams and solar panels will rise to 14 percent in 2035 from 11 percent last year, according to the outlook.

Gas Reserves

This year’s outlook more than doubles the estimate of U.S. technically recoverable reserves of natural gas from shale, a type of sedimentary rock, to 827 trillion cubic feet from 347 trillion cubic feet. New technologies that let natural-gas producers drill horizontally and fracture the rock formations with injections of water, sand and chemicals account for the increase, Newell said.

Last year’s long-term outlook predicted annual shale-gas production would rise to 6 trillion cubic feet by 2035, Newell said. The updated forecast is 12 trillion cubic feet, he said.

The agency raised its 2035 projection for overall natural- gas production 25 percent from last year’s outlook “as a result of greater supply availability from shale gas plays,” the EIA said.

Average annual Henry Hub natural-gas prices, in 2009 dollars, are predicted to be $4.81 per million British thermal units in 2015, $5.18 in 2020 and $7.19 by 2035. Last year’s forecast for prices in 2035 was $8.88 per million Btu.

Cheaper Prices

The cheaper price will drive up the use of natural gas as a fuel for generating electricity, at the expense of coal and renewable sources such as wind turbines, the EIA said. Natural- gas electricity generation by 2020 is 29 percent higher in this year’s outlook. Gas-fired generation by 2035 is 17 percent higher than last year’s forecast, the EIA said.

The agency’s prediction “should offer assurance that long- term investments in natural gas for power and transportation can proceed in a predictable and favorable market environment,” Daniel Whitten, a vice president at the Washington-based America’s Natural Gas Alliance, said in an e-mail.

The group’s members, which include natural-gas producers Devon Energy Corp. and Range Resources Corp., can exceed the EIA’s “robust projections,” Whitten said.

While the outlook concludes shale-gas production will expand, the report’s “fine print” casts doubt over whether it can be extracted profitably, Luke Popovich, a vice president at the National Mining Association, which represents coal producers such as Peabody Energy Corp. and Alpha Natural Resources Inc., said in an e-mail.

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The Justice Department has sued BP Exploration and Production Inc. and eight other companies in the Gulf oil spill disaster in an effort to recover billions of dollars from the largest offshore oil spill in U.S. history.

The Obama administration’s lawsuit asks that eight companies be held liable without limitation for all removal costs and damages caused by the oil spill, including damages to natural resources. The lawsuit also seeks civil penalties under the Clean Water Act.

An explosion that killed 11 workers at BP’s Macondo well last April led to oil spewing from the company’s undersea well – more than 200 million gallons in all, by the government’s estimate. BP disputes the figure.

Don Briggs Responds to US BP Suit

The government is taking BP and eight others defendants to court over the massive Gulf of Mexico Oil Spill.

The civil lawsuit will be heard in New Orleans, where 80 other related lawsuits have been consolidated.

The Justice Department alleges safety and operational violations led to the massive oil rig explosion on April 20 that eventually leaked an estimated 205 million gallons of oil into the Gulf.

The lawsuit also seeks unlimited penalties against all but one of the nine defendants, to pay for all removal costs and damages caused by the spill.

Don Briggs with the Louisiana Oil and Gas Association released a statement to Eyewitness News on the announcement.

Saying quote “The recent news that the U.S. Justice department sued BP and eight other companies in the Gulf oil spill disaster is unwarranted and egregious. This recent lawsuit is just another example of the ‘throw me something mister’ mentality in Washington.”

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Shreveport, La – Residents happy here two years ago when gas stuck in a giant gas deposit within 2 miles of their homes, sparking a modern gold rush.

The companies offered residents of tens of thousands of dollars per acre to drill on their land, to enrich some people at night in this rural corner of northwest Louisiana.

Than cows started dying. Methane seeped into the drinking water. Homes were evacuated when uncontrolled gas escapes from a borehole.

Today, many residents and local officials still praise the bounty reaped from the Haynesville Shale, one of the world’s largest gas reserves, distributed Louisiana, Arkansas and East Texas. An estimated 250 trillion cubic feet of natural gas is trapped – enough to power the United States for more than a decade, said Kevin McCotter, senior director at Oklahoma City-based Chesapeake Energy Corp., the largest gas producer in the area. The shale is a clean source of energy is supplied, while enriching the residents, he says.

“At a time when our nation needs more jobs and inward investment than ever, the Haynesville Shale is a flu shot for North Louisiana and East Texas,” he says.

Others question whether the money given to landowners to lease their property is worth the risk, they say drilling poses.

“There are many concerns,” said Kassi Ebarb, organized her neighbors in Shreveport for city gas companies demand more environmental safeguards. “We would run (of money) than taking all that was not enough to our neighborhood and to protect our children.”

Shreveport and the surrounding area has entered a national debate on the safety standards of a specialized form of natural gas drilling that pumps chemicals and water in the soil gas trapped thousands of feet below message.

The debate on the controversial technique known as “hydraulic break,” or “fracking,” in which companies drill-down, then horizontally to a natural gas trapped in shale away. A mixture of water, chemicals and sand is then pumped into the shale with great force, breaking up the rock and release the gas.

The technology enables drillers to reach previously inaccessible natural gas and has opened vast swaths of the U.S. to drilling. Nearly 500,000 natural gas wells producing in 32 states, up from 393,000 in 2003, according to the U.S. Energy Information Administration.

The percentage of natural gas from shale formations drilled using hydraulic breaking is expected to climb from 14% last year to 23% in 2020, according to the Department of Energy.

Environmentalists warn that chemicals blasted into the ground during fracking could affect water supplies and toxic air and water, threatening rivers, air quality and human health.

“We’ve gone from getting the oil and gas easiest to hardest,” said Gwen Lachelt, director of Earthworks Oil and Gas Accountability Project, a group of advocates stricter regulation drill. “It’s dirtier and dirtier.”

Gas companies and the fracking advocates say the technique is safe and presents little danger to drinking water or the environment. “We have a very good reputation when it comes to hydraulic break, regulatory and safety of the environment,” says Jodee Bruyninckx of the Louisiana Oil and Gas Association.

Recent developments in fracking:

• The New York Assembly last week passed a temporary ban on hydraulic break until next year, while regulators review regulations allow.

• The Environmental Protection Agency in March launched a two-year study into the effects of hydraulic breaking.

• The Pittsburgh City Council last month unanimously approved a ban on gas drilling measure of its city limits, indicating the health and the environment.

• The EPA last year a high level of benzene, oil and other harmful chemicals in wells near gas rigs in Pavilion, WYO. After residents complained about a bad odor and taste found in the water, the agency said.

• Pennsylvania environmental regulators recently blamed for the contamination of methane an aquifer – a natural underground formation that stores water – near Dimock, Pa., on Houston-based Cabot Oil & Gas, which is drilling in Marcellus region Shale. Cabot denies.

“Difficult road” A to Regulation

Fracking is exempt from the federal Safe Drinking Water Act, passed an exemption under the 2005 Energy Policy Act, according to legal records. Under the exemption, no gascompanies are not the chemicals used in the process known.

A bill known as the FRAC Act, introduced in Congress last year by Senator Robert Casey, D-Pa., Would gas forcing these chemicals, most of which are guarded as trade secrets, Casey says. The bill is not expected to bring the Senate floor in the near future, given the current political climate in Washington, he says.

“There is a difficult road for us,” says Casey.

Further testing and monitoring should be done on the technique, which is also exempted from parts of the Clean Water Act and other federal environmental laws, said Josh Fox, a filmmaker whose documentary film, gas country, profiles of families affected by the U.S. natural gas drilling .

The film, released this year, showing people the determination of the water from their taps on fire because of flammable methane gas in the water.

“This process has never been investigated,” says Fox. “We have not put out drugs on the market without testing them first.”

Fears of cranes flaring because fracking overstated, said Gary Hanson, a hydrologist at Louisiana State University in Shreveport, who has studied the technique. Hydraulic fracturing wells over 2 miles underground, and the past aquifers that are less than 1,000 meters, making it difficult for the process to contaminate drinking water, he says.

Even if it does not fall under federal security rules, fracking is still controlled by the state and local agencies, Hanson says.

“You have a number of incidents. There will be a number of spills,” says Hanson. “But I do not see large spill occurs.”

Some see the drilling as a ‘blessing’

The financial benefits are undeniable. Last year, Haynesville Shale Drilling spent 10.6 billion U.S. dollars in new business sales to the State, $ 5.7 billion income households and 57,000 new jobs in the state, according to a study commissioned by the Louisiana Oil and Gas Association.

“Not only is the production of natural gas – and in particular Haynesville Shale – Louisiana stimulate the economy and creating jobs, this type of research is to help America fuel and decrease our dependence on foreign energy sources,” Louisiana Governor Bobby Jindal, a Republican, said in a statement.

Reegis Richard, pastor of the Temple of Knowledge Church International in nearby Mansfield, the heart of drilling activity, received $ 30,000 in gas money by leasing church 7 acres, and the supply of enriched community more than doubled he says.

The influx of cash has allowed him to finish building a new church, a private Christian school opened two times to travel to Israel with his wife and local pastors, he says.

“People’s lives have changed,” says Richard. “It’s a blessing.”

The increased activity has also increased pressure on national regulators. In Louisiana, 38 oil and gas inspectors are responsible for monitoring the condition 19,000 producing natural gas wells, including 781 in the Haynesville Shale area, according to the State Department of Natural Resources.

Government agencies’ lack of political will nor the budget or staff to address adequately the level of drilling going on in this area, “said Murray Lloyd, a local lawyer.

Last spring, the Caddo Parish Sheriff’s Office talks on cows in a pasture near a drilling rig that foaming and bleeding in the mouth and tilt received, Sheriff Steve Prator says. Deputies found 17 dead cows there.

Sections later determined they had died from drinking the fracking fluids had leaked to the pasture, he says. Chesapeake and one of its subcontractors were later fined $ 22,000 for each of the incidents, according to the State Department of Environmental Quality.

Then in April, about 200 homes in rural Caddo Parish were evacuated when a gas well blew, sending gas into the air and the local water supply, Prator said. Regulators detected high levels of methane in the water of residents’ toilets, he says.

The incident prompted Prator to Jindal’s Office of Homeland Security Contacts and Haynesville Shale Task Force to create a better plan for emergencies. Lack of coordination between government institutions and the overall handling of events frustrated him Prator says. Another worrying development: gas rigs closer to schools and crowded areas, he says.

“It made me question ‘Are we doing the right things?” “Prator says.

One of those evacuated during the blowout was Contario Frances, 50, who left her trailer around Wallace Lake and lived in a room at the Clarion Hotel in Shreveport with her 23-year-old son, Braden, for 17 days. ExCo Resources, the Dallas-based gas company responsible for the eruption, paid the residents’ hotel tabs and expenses, Prator said.

Contario says she can only drink bottled water since the return and fears that the lake, streams and forests near her home in so many will be polluted by drilling.

“We did not ask for this,” said Contario, who grew up in the area. “Our biggest concern is that one day everyone will be infected.”

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Gov. Bobby Jindal met with business leaders Monday to assure them he won’t approve tax increases and to get input on his proposals to increase revenue without raising taxes.

“In this tough economy, it just doesn’t make sense to raise taxes,” Jindal said.

“It would make it harder for families to pay their grocery bills and force businesses to decide who they would lay off.”

Jindal described the meeting with representatives of various businesses and industries as “a great, open, free-ranging conversation.”

The discussion also included the need for a stable tax, regulatory and litigation climate and a strong work force to meet business and industry needs, said Dan Borne, president of the Louisiana Chemical Association.

“We know the state is going through difficult times,” Borne said. “Companies had to manage through a difficult recession. We had to cut the cloth to fit the pattern,” so a tax increase would be devastating.

Dan Juneau, head of the Louisiana Association of Business and Industry, said, “I think the message the governor sent about no taxes is important to business, large and small. That’s money we can invest.”

“We didn’t have the luxury of raising prices” because their customers were going through the same difficulties, Borne said, so the Legislature shouldn’t be looking at taxes to prop up the state budget.

Borne said the elimination of a 3.3 percent tax on electricity and natural gas was an “enormous” help getting through the recession.

Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, discussed the problems his industry is having with the Obama administration’s moratorium on oil and gas drilling in the Gulf of Mexico.

The uncertainty could complicate the state’s financial problems.

Borne said he also discussed his industry’s concern about pending Environmental Protection Agency rules on greenhouse gases and ozone attainment.

The tougher standards would be difficult to meet.

During the meeting, Jindal floated his five-point plan for increasing revenues, including selling off unused property, selling two prisons, privatizing state employees’ health insurance, securitizing future lottery sales increases and selling state buildings and leasing back office space.

“We talked about them in theory,” Borne said.

Jindal said he wasn’t “asking for consensus or unanimity” of support for the plans and just wanted to discuss them.

Also in the meeting were Sharon Cole, site director for Dow Chemical; Bobby Yarborough, CEO of Manda Fine Meats; Clay Allen, managing partner Allen & Gooch law firm of Lafayette; state tourism head James Hutchinson; Don Briggs, president of Louisiana Oil and Gas Association; Steve Jordan, CEO of Louisiana Geothermal LLC; and Renee Baker, Louisiana state director for the National Federation of Independent Business.

The governor will meet with two groups of legislators today in his ongoing discussion of budget issues preparing a plan for addressing an anticipated $1.6 billion drop in revenues in the next fiscal year that begins July 1, 2011.

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(New York Times): Nothing about drilling two miles down into the earth and pumping water and chemicals into the ground at high pressure in order to release natural gas sounds safe or environmentally innocuous. There have just got to be major environmental and health risks to the process of removing natural gas from the earth known as hydraulic fracturing or fracking for short. And as this USA Today story suggests, the health risks to people who live anywhere near natural gas drilling are potentially severe including cows foaming at the mouth and keeling over dead, and well-water poisoned with methane and other nasty chemicals the rotten gas companies won’t disclose. On the other hand, as the story does report, that natural gas drilling in states like Louisiana do indeed help the local economy. “Last year, [Louisiana's] Haynesville Shale drilling brought $10.6 billion in new business sales to the state, $5.7 billion in household earnings and 57,000 new jobs across the state, according to a study commissioned by the Louisiana Oil And Gas Association….Reegis Richard, pastor of the Temple of Knowledge Church International in nearby Mansfield, the heart of drilling activity, received $30,000 in gas money by leasing his church’s 7 acres, and offerings from his enriched congregation have more than doubled, he says….”People’s lives have been transformed,” Richard says. “It’s been a blessing.”

If you are anywhere near the Marcellas Shale then keep your eyes out for stories like this one about tiny Towanda, PA where the fracking angels have descended. “Chesapeake has spent more than $94 million this year to pave or repair 300 miles of roads in Bradford and three other counties. That has benefited Leo Drabinski, who co-owns Calvin C. Cole Inc., a hard-rock quarry and construction company in Bradford County. He said demand for rock used for roads and well sites used by gas companies grew 10 times in the past year. He increased his quarry staff to 15 from six, and even started a van service to shuttle rig workers to their jobs. “We were so lucky,” Mr. Drabinski said. “We’re right in the heart of this natural-gas boom.”

But of course there are those who worry that the negatives will outweigh the positives. In the meantime, however, the gas cmpanies are helping build infrastructure, paving roads, etc, which helps their business and unemployment in the area is 6.6%, which is lower than almost anywhere else in the state.

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In March, the Obama administration announced plans to expand offshore drilling and allow oil and natural-gas exploration off the coasts of New Jersey, Virginia and the eastern portion of the Gulf of Mexico at least 125 miles off the coast of Florida.

Unfortunately, the administration recently announced that it would rescind these future plans for offshore drilling expansion and move in a different direction. In a public announcement, Secretary of the Interior Ken Salazar noted that the eastern Gulf of Mexico that remains under a congressional moratorium and the mid-and south-Atlantic areas are no longer under consideration for potential development through the year 2017.

It’s no surprise that the administration is looking toward the tragic BP oil spill as a justification to ban any new offshore drilling for the eastern Gulf and the Atlantic and Pacific coasts for the next seven years. Secretary Salazar clearly noted, “As a result of the Deepwater Horizon oil spill, we learned a number of lessons, most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime.” Salazar continued by adding, “Our revised strategy lays out a careful, responsible path for meeting our nation’s energy needs while protecting our oceans and coastal communities.”

A great question for Secretary Salazar and the administration is this, “Are we truly on a responsible path to meeting our nation’s energy needs when we limit access to more than 99 percent of our nation’s offshore oil-and-gas reserves?” Better yet, “If we shut off access to these vital resources, where are we going to get it?” Supply and demand economics are fairly simple to understand. If you limit access to create supply and the demand for oil continues to rise not only here at home but significantly in developing countries around the world, the obvious repercussion of this policy will result in higher energy prices for all Americans.

In reality, the Obama plan to expand offshore drilling was just that, a plan. Technically, the administration has nothing to rescind given that Congress gave no approval to open these areas for oil-and-gas exploration. The announcement to shut off offshore access is nothing more than smoke and mirrors and political posturing. Although the expansion of new areas in offshore production are extremely important, at the moment, the most pressing issue the administration should be working toward is alleviating the permitting gridlock caused by the recent deepwater drilling ban.

In his comments on the administration’s decision, Secretary Salazar claimed, “We believe the most appropriate course of action is to focus development on areas with existing leases and not expand to new areas at this time.”

If it is the intention of the administration to focus on areas already open for exploration, it is imperative that they ensure an adequate and streamlined permitting process and remove the de facto moratorium that is stifling growth in the Gulf of Mexico.

In the end, the continuation of a failed energy policy that shuts off access to our vast offshore reserves will pave the future road with higher energy prices, drastic unemployment and will perpetuate our insatiable dependency on foreign sources of energy.

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BATON ROUGE — Public agency heads, private businessmen, politicians and representatives from special interest groups all sat down at the same table Thursday to discuss “aggressive strategies” for overcoming what they described as a hostile environment for the oil-and-gas industry created by federal regulators.

The “Back to Work Coalition,” established this week at the order of Gov. Bobby Jindal, is being spearheaded by state Department of Natural Resources Secretary Scott Angelle.

The effort may sound similar to the Gulf Economic Survival Team, which was created by Jindal and Angelle this past summer to oppose the federal moratorium on deepwater drilling, a policy that has since been lifted.

GEST is still active and currently housed in the South Louisiana Economic Council offices on the campus of Nicholls State University in Thibodaux.

It also serves as the “facilitating organization” for the Back to Work Coalition, Angelle says.

“The deepwater-drilling moratorium may have been lifted, but the federal regulatory challenges continue to delay the return of new drilling in the Gulf,” Angelle said. “By bringing together these trade associations and industry stakeholders, the Back to Work Coalition is a major step toward presenting a unified voice and finding solutions to those challenges.” The administration of President Barack Obama has shuttered the eastern Gulf to drilling activity and added a new requirement of environmental studies for the permitting of deepwater drilling.

This comes on top of other new safety regulations issued by Michael Bromwich, director of the federal Bureau of Ocean Energy Management.

Bromwich said inspectors will personally be visiting all deepwater rigs to check for compliance before any permits are issued.

Angelle said the new group will also take into account recent shallow-water drilling hurdles as well.

“I agree with Secretary Angelle and believe that a unified front is our best opportunity to move the permitting process forward and address challenges that the industry has encountered with regard to the permitting process,” said Don Briggs, a member of the new Back to Work Coalition and president of the Louisiana Oil and Gas Association.

“The Back to Work Coalition is an innovative partnership that is absolutely necessary for making headway in the federal permitting process,” said Jim Noe, another coalition member and senior vice president for Hercules Offshore. Noe called the group the “best opportunity for us to band together and see real results.” Thursday’s inaugural coalition meeting in New Orleans was preceded by a meeting Wednesday between Angelle and Bromwich. “I characterize yesterday’s meeting with Director Bromwich as productive, but I made it clear that we will continue to press for a resolution of obstacles,” Angelle said Thursday. “Director Bromwich did make the commitment to me that no new rules or regulations would be issued unless through an investigation it is determined that the failure to issue a new rule would be irresponsible.” The Back to Work Coalition’s leadership advisory committee also includes the Louisianan Mid-Continental Oil and Gas Association, American Petroleum Institute, National Ocean Industries Association, International Association of Drilling Contractors, Offshore Marine Service Association, Offshore Operators Committee, Independent Petroleum Association of America, Greater New Orleans, Inc, U.S. Oil and Gas Association and the U.S. Chamber of Commerce.

Participating members of the Louisiana Congressional Delegation include Sens.

Mary Landrieu and David Vitter; Congressmen Charles Boustany, Steve Scalise, and Bill Cassidy; and Congressman-elect Jeff Landry, who will represent Terrebonne and Lafourche parishes in the 3rd Congressional District beginning next year.

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