_

New samples from beneath a Wyoming gas field where the U.S. Environmental Protection Agency linked hydraulic fracturing to groundwater pollution seem unlikely to sway hearts and minds on a nationwide debate over the contentious issue: The additional data just isn’t a whole lot different, or more substantial, compared to what the EPA detected previously.

Calgary-based Encana, which owns the gas field in the Pavillion area in west-central Wyoming, still says the EPA research was flawed and, so too, last year’s finding that implicated the petroleum industry technique.

An environmental group still says Pavillion shows more regulation is needed for fracking, the practice of blasting of millions of gallons of water and smaller amounts of sand and chemicals down well holes to force open new fissures.

“This newest information reinforces our concerns that fracking may be putting our drinking water and health at risk,” Kate Sinding, with the Natural Resources Defense Council, said Thursday. “It’s why it’s so critical we get safeguards on the books to protect Americans from dangerous drilling practices.”

The Pavillion field has shallow gas and geology much different from other gas fields. Fracking occurred unusually close to home water wells, and the EPA has said that any findings in the area shouldn’t be applied to fracking in general.

Even so, Pavillion now is widely associated — maybe permanently — with fracking. People with significant concerns about or a stake in fracking scoured the new U.S. Geological Survey data, released Wednesday, that was collected in partnership with the state of Wyoming, EPA and two American Indian tribes.

The EPA drew its findings last year from two wells it drilled to test for pollution and this year’s study sought to resample both wells. The USGS released the new data without any analysis.

One hydrogeologist said he didn’t see much from which to draw conclusions.

“These groundwater investigations are kind of a tricky business. You don’t always get these super-conclusive results with, you know, just a couple rounds of sampling from two wells,” said David Yoxtheimer, an extension associate for Penn State’s Marcellus Initiative for Outreach and Research.

“When you’ve got two wells, you really are just kind of scratching the surface. You really aren’t able to determine too much. You might be able to detect the contaminants, but from there you need to expand your investigation.”

That hasn’t happened yet. In fact, just one of the wells was flowing with enough water to yield reliable tests when the latest samples were taken in April.

Encana has been critical of how the EPA drilled its two wells. Now, it is critical that one of the wells wasn’t reliable.

“They couldn’t get a good sample because it was so poorly constructed,” company spokesman Doug Hock said. “That well really needs to be abandoned and should not be used for further study because it’s not a good well.”

The data don’t contain any surprises, said Encana chemist John Gardner, but do show lower potassium levels and pH and potassium levels. Previously, the EPA had pointed to unusually high pH and the detection of potassium hydroxide, a basic chemical used in fracking, in suggesting that fracking had affected the groundwater tested.

The pH of water tested hadn’t declined by much, said Tom Myers, a Reno, Nev., hydrologic consultant for the NRDC, and much of the other data was similar to before.

“There’s nothing in this resampling that suggests what they found in December is wrong. It more or less supports that,” Myers said. “I would say that the status quo is maintained.”

Wyoming officials criticized last year’s EPA data and findings almost from the time they saw them. This year, they’re being a lot more quiet — in public, anyway.

However, they have noticed “some differences” between this year’s data and last year, said Renny MacKay, spokesman for Gov. Matt Mead, who pushed the EPA for the new testing and got it.

“Gov. Mead believes it would be premature to draw conclusions about what those differences mean at this point,” MacKay said by email. “He says that before Wyoming makes conclusions he wants some careful analysis done and a technical team will do that and brief the Governor before Wyoming issues any conclusions.”

A full peer review of the sampling and findings to date is planned but has not yet been scheduled.

original article

_

These are interesting times for the fracking business as the industry is working at full capacity despite the low natural gas prices and input cost pressures. Schlumberger Limited, one of the industry’s largest players, is counting on an innovative fracking technology to help reduce costs and garner a larger slice of the market. Hydraulic fracturing, or fracking as it is commonly know, is used in the production of natural gas and shale gas to improve the yield of a well.

Growing Fracking Capacity Despite Low Gas Prices

Fracking capacity in North America has been increasing rapidly. Capacity grew by about 42% last year and is expected rise by about 28% this year to around 18 Million horsepower.

The exploration and production for shale gas had been increasing over the last few years; however, demand has been soft leading to a sharp decline in prices. Despite the lower natural gas prices, the gas industry engages in about 83% of fracking capacity, largely to earn their leases. The number of horizontal wells that use fracking has also been growing, and there has also been an increase in the length of these wells, which is increasing the requirement for fracking capacity.

Schlumberger’s Solution Cuts Costs

The process of fracking involves pumping a mixture of water, sand and other additives into the well at a high pressure to stimulate the flow of gas.

Schlumberger’s technology, known as HiWay, improves the productivity of the fracking process by reducing the quantity of water and proppant required by up to 60% and 40% respectively, besides reducing the horsepower required for pressure-pumping. A proppant is a mixture of sand and other binders like guar gum. Propants account for a significant part of fracking costs. Earlier this year, a severe shortage in supply of guar gum, a legume based binder produced in India, impacted the profitability of many major fracking players.

The reduced consumption of proppant and water should bring down operating expenses considerably. Additionally, the smaller operational footprint and the reduction in the number of fracking trucks and trailers used for transporting raw material will bring down the logistics costs. Over the long term, we expect the benefits of the new technology to have a positive impact on Schlumberger’s EBITDA margins. Schlumberger already uses this technology in about a third of all its current fracking jobs and expects it to be deployed in 50 to 70 percent of all fracking jobs in the near future.

original article

_

The U.S. Geological Survey plans to release results Wednesday from a new round of groundwater tests in a Wyoming gas field where another federal agency linked hydraulic fracturing to contaminants found in two water wells and local residents have complained of chemicals polluting their well water.

The new USGS data comes from samples taken in April from one of the test wells near Pavillion in central Wyoming. The other test well didn’t produce enough water to yield samples deemed large enough to test.

Hydraulic fracturing, or “fracking,” is the petroleum industry practice of pumping water, sand and chemicals down well bores to crack open fissures and boost the flow of oil and gas.

Environmental groups have sounded the alarm about fracking for years — but with few, if any, examples of verified pollution. Petroleum industry officials say the lack of verified pollution, out of many thousands of wells fracked in the U.S. over the past few decades, proves the process is safe.

The U.S. Environmental Protection Agency, Wyoming, the USGS and two American Indian tribes collaborated on the latest sampling, which followed previous testing done solely by the EPA.

The EPA theorized a fracking-pollution link in a draft report released in December. The report drew heavy skepticism from petroleum industry and state officials, including Gov. Matt Mead, who characterized the finding as a flimsy one.

Wyoming officials — whom the EPA briefed on its findings more than a month ahead of the report’s release — also grumbled that the EPA hadn’t kept them in the loop about what the federal agency was up to during the previous testing.

“Gov. Mead felt that this process was an improvement on how the first draft report from the EPA was done. It was more transparent. The team had input throughout the process,” Mead spokesman Renny MacKay said Tuesday.

Even so, the EPA plans to post its own data separately on Wednesday or possibly later, EPA Region 8 spokesman Rich Mylott said.

“All EPA data have gone through the agency’s quality assurance process,” Mylott said by email.

Testing by the EPA this past spring included new samples from five domestic water wells in the Pavillion area. That sampling happened outside the collaborative process.

One person each from the EPA, the Wyoming Department of Environmental Quality, and the Northern Arapaho and Eastern Shoshone tribes on the Wind River Indian Reservation near Pavillion peer-reviewed the collaborative data, according to MacKay.

A full peer review of the sampling and findings to date will occur later.

MacKay said Mead wants “science and a good process” to guide any new findings.

“The governor’s position has always been he wants this investigation to play out and whatever it finds, you move on from there,” he said.

original article

_

Asian demand for natural gas has risen so sharply in recent years that Alaska wants to build a $50 billion pipeline and export terminal to move its stranded supply offshore. Exxon Mobil Corp., BP Plc and ConocoPhillips will deliver plans for such a project to Alaska Governor Sean Parnell by the end of this month.

Alaska has the only operating liquid natural gas (LNG) export plant in the United States. It’s an aging facility, capable of processing less than 10 percent of the volume of a new 3 billion cubic-feet-a-day terminal. The state’s hunger for revenues from its conventional gas is part of a larger unsolved question that the U.S. will have to tackle in the next few years: What will the nation do with its newfound abundance of natural gas, mostly from unconventional sources?

The question lurks just under the surface of the national energy conversation, which vacillates between exuberance that shale gas exists at all and fear that the method of extracting it — fracking — is polluting people’s water. The high-pitched debates around fracking largely obscure another player: the rest of the world. It wants less expensive natural gas.

Gas is pricey in much of the world, particularly in energy-poor Japan and South Korea. This map shows why U.S. producers are so eager to construct U.S. export facilities. October prices, in dollars per million BTUs, could reach $13.50 in Argentina and $13.80 in Japan and South Korea — but just $2.48 at the Lake Charles LNG import facility, in Louisiana. It’s so inexpensive stateside because the U.S. supply is so great and because it’s trapped in markets served by North America’s pipeline network.

There’s a simple reason for that disparity, one that will require considerable investment to overcome — if the U.S. decides it wants to. Unlike oil, which flows on and off tankers, and coal, which fills up capesize transport vessels, natural gas just wants to be free. It’s lighter than air and wants nothing so much as to disperse into the atmosphere. Natural gas must be contained before it can be shipped.

It’s a considerable undertaking.

First, a country has to develop gas fields, which the U.S. has done, and build hundreds of miles of pipelines to bring the gas to a port.

Second, it must build the massive port infrastructure to liquefy the gas, by lowering is temperature to about -260 degrees Fahrenheit. The Department of Energy has approved one new LNG export terminal, at Cheniere Energy Inc.’s existing import terminal in Cameron Parish, Louisiana. Nearly a dozen others are under DOE review. Just to give you a sense of how quickly this is all moving, less than 10 years ago the U.S. was expecting to build more import terminals.

Third, a fleet of specialized tankers must be called into service to transport the gas by sea.

Finally, the receiving side must re-gasify the fuel — carefully! — provided that it already has built the pipeline infrastructure to deliver it to customers.

How much should the U.S. spend on gas export infrastructure? If it sells its gas overseas, how much, for example, might future U.S. prices — for U.S. gas — rise as future South Korean prices fall? “That’s what the big discussion is right now,” said Andres Rojas, market analyst at Waterborne Energy Inc., the company that provides the Federal Energy Regulatory Commission with the map data. We spoke by phone late last month.

U.S. producers would like to sell gas in foreign ports, where they can ask a higher price. U.S. utilities, manufacturers, which use gas in an industrial feedstock, and residential and business consumers would like prices to stay low.

Policymakers and business leaders are trying to better understand the relationship between potential U.S. exports and prices at home before they make commitments to build new outbound gas liquefaction terminals. The U.S. Energy Information Administration reported in January that, according to its simulations, more exports would mean higher prices (pdf) for gas and electricity, and some fuel-switching back to coal-fired electricity generation.

A study (pdf) by Rice University’s Baker Institute concluded in August that there’s nothing to guarantee that the world market will always look as enticing for U.S. exports as it does now. Fluctuation in exchange rates, potential foreign gas discoveries and the global price effects from the U.S. increasing world supply could all change the picture in unpredictable ways, the report states, creating risk for exports.

For several years now, the U.S. has both celebrated and fretted over this newly accessible energy source. As the controversy over fracking is gradually resolved, the next question about gas will be, should it stay or should it go?

“As the story plays out,” the Baker Institute study concludes, “the international gas market will evolve into something dramatically different from what it is today.”

original article

_

The use of hydraulic fracturing and horizontal wells over the past few years have dramatically altered the U.S. energy landscape, and many believe the boom is still in its relative infancy, according to a recent report published by Standard & Poor’s Ratings Services.

“By combining fracking and horizontal drilling, exploration and production companies have greatly increased their access to previously untapped oil and natural gas reserves, which has led to a significant boost in output,” said credit analyst Marc Bromberg. “The result of this pairing has been a significant rise in energy production–a trend that we believe will continue to grow.”

The fracking and horizontal drilling boom in the U.S. has come strong over the past few years and has been a boon in terms of energy production, creating an oversupply of natural gas reserves and reducing the country’s reliance on oil imports. However, these technologies do pose certain environmental risks.

“We believe the energy industry is poised to continue adding drilling capacity over the next six-12 months, and service companies will likely benefit as rig demand should remain strong in liquids-rich basins,” said credit analyst Stephen Scovotti. “However, due to the overcapacity of pressure pumping equipment, oilfield service companies that provide pressure pumping services are likely to see lower pricing for their services.”

For E&P operators, the horizontal drilling and fracking boom is among several drivers of profitability, and therefore, credit performance. Completion costs for wells have declined recently, but to varying degrees based on region. While the supply and demand picture is different for the gas and oil industries, a decline in completion costs typically bodes well for companies’ profitability.

“Though still in its early stage, the horizontal drilling and fracking boom is transforming some regional economies,” said Mr. Scovotti. “On a larger scale, we think these technologies also have the potential to alter the national economy.”

“We believe the usage of these technologies will continue, particularly in the U.S., but it will be accompanied by further regulatory oversight regarding environmental and health concerns,” said Mr. Bromberg. “We also believe horizontal drilling and fracking present an opportunity for growth in certain international locations.”

The complete report, “How Horizontal Drilling And Fracking Have Reshaped The U.S. Energy Landscape,” was published Sept. 17, 2012.

original article

_

A University of Minnesota team has won a $600,000 federal grant to develop biotechnology for purifying wastewater from hydraulic fracturing.

The practice, commonly known as fracking, uses hydraulic pressure to release natural gas and oil, but it carries possible environmental and public health risks.

The three scientists are using naturally-occurring bacteria to break down contaminants in the wastewater, a technology they originally developed to remove agricultural pesticides from soil and water. Their goal is to make the water suitable for re-use in hydraulic fracturing and significantly reduce the industry’s water consumption.

The team will work with two companies on technologies for encapsulating the microbes.

If the project is successful, the team will be eligible for additional National Science Foundation funding.

original article

_

The Environmental Defense Fund’s chief counsel has written a blog post detailing the non-profit’s support for hydraulic fracturing of natural gas.

The EDF is well known for pouring money into global warming, clean air and oil spill cleanup fights.

In the case of fracking, Brownstein says, it mainly comes down to eliminating coal.

“We fear that those who oppose all natural gas production everywhere are, in effect, making it harder for the U.S. economy to wean itself from dirty coal,” he said.

The fund’s Mark Brownstein lays out three reasons to back natgas:

Fracking is already a common, widespread practice

On balance, they’d rather see natural gas-powered electricity plans than coal-powered ones. “We are glad to see these coal plants go,” he says. Plus, natural gas is the feedstock for chemicals, pharmaceuticals and fertilizer, and for direct heating and cooling

Any potential hazards can be regulated. “Effective oversight and enforcement with the necessary financial and human resources [can] make [regulations] real.

He closes thusly:

Natural gas production can never be made entirely safe; like any intensive industrial activity, it involves risks. But having studied the issue closely, we are convinced that if tough rules, oversight and penalties for noncompliance are put in place, these risks become manageable.

original article

_

Wyoming Gov. Matt Mead is telling the Interior Department to back off on proposed rules for hydraulic fracturing, the controversial technique that boosts the productivity of oil and gas wells.

The proposed U.S. Bureau of Land Management rule would require petroleum companies to disclose the chemicals they pump underground during hydraulic fracturing on public lands.

Some states, including Wyoming, already have similar regulations. Mead says in a letter Monday that such rules on the federal level would be duplicative and unnecessary.

He says Interior should allow states to take the lead.

Environmentalists say fracking can contaminate groundwater. Last year, the U.S. Environmental Protection Agency theorized that hydraulic fracturing may have contaminated groundwater in a central Wyoming gas field.

Wyoming and EPA now are coordinating on additional testing in the area.

original article