By Adam Kealoha Causey

Original Article

The Caddo Commission on Thursday approved laws that should protect parish roads from an increase in the number of big rigs hauling equipment to help drain the lucrative Haynesville Shale natural gas field.

Commissioners also will oversee hiring of staff to enforce the beefed-up ordinances.

Parish Sheriff Steve Prator will certify workers with gun toting and arrest powers. “But they’ll work for the parish,” he re-enforces.

An early version of the commission’s proposal made Commercial Vehicle Enforcement Unit the sheriff’s employees. The panel will split collected fines with the sheriff. Bossier’s vehicle enforcement unit made $60,000 in fines during its first two months, Caddo commissioners say.

Workers likely will be part-time and may be former Caddo deputies, Commissioner Jim Smith said.

“That way they’ll be familiar with the sheriff’s office and the area,” Smith said. Residents in Smith’s southwest Shreveport and south Caddo district have seen much of the bulk of heavy trucks.

Among size requirements:

# Drivers of many vehicles wider than 8.5 feet and whose loads are more than a foot wider must obtain permits.

# The parish may charge permit fees, which vary by weight and distance traveled. Those range from $30 for vehicles whose gross weight is 80,000 pounds to $575 for those that weigh up to 254,000 pounds.

# Escort vehicles for large loads must have two, 18-inch-square flags that are red or fluorescent orange and mounted at 45-degree angles.

By MATTHEW BROWN (AP) – 12 hours ago

Original Article

BILLINGS, Mont. — Federal land managers are suspending an April 13 sale of 91,000 acres of oil and gas leases in Montana and the Dakotas until they can study how oil field activities contribute to climate change.

Thursday’s suspension comes three weeks after the Bureau of Land Management agreed to suspend another 38,000 acres of leases. That agreement was part of a settlement between the agency and environmentalists who sued over a 2008 lease sale in U.S. District Court.

At issue are greenhouse gases emitted by drilling and industry practices. Oil and gas operations contribute about 23 percent of annual U.S. methane emissions and 2 percent of total greenhouse gas emissions.

BLM spokesman Greg Albright says a new environmental review of the suspended parcels could be done by late September.

Original Article

As the price of oil continues its upward trend, there are concerns about future energy supplies and the impact high costs will have on a struggling economy.  But many experts in the energy field believe an answer is at hand in the form of natural gas, supplies of which are growing thanks mostly to new drilling techniques in shale rock.  Many people in the energy sector see natural gas as the fuel of the future.

In the past few years, there has been a dramatic increase in estimates of natural gas reserves in the United States, thanks in large part to the use of hydraulic fracturing in shale deposits.  Fracturing involves the use of high-pressure water, chemicals and sand to make fissures in rock where gas is trapped deep below the earth’s surface.

University of Houston chemical engineer and energy expert Michael Economides says the sudden increase in gas reserves could change the world’s energy picture.

“I think we are poised right now for natural gas to make a major move, because it has all the right elements to become the premier fuel of the world economy in the not-too-distant future,” noted Economides.

U.S. development of its natural gas resources could reduce dependence on foreign sources of energy and some political analysts believe liquefied natural gas could be exported across the Atlantic to undermine Russia’s periodic threats to cutoff European customers.  Michael Economides agrees.

“Twenty-five European countries depend for more than 75 percent of their oil and gas on Russia,” Economides added.  “Now, if for instance, the United States, with all this gas, can actually export gas to Western Europe, it turns the whole energy independence conundrum on its head, because we clearly have enough gas to change the equation in Europe.”

Most natural gas is used for heating homes, cooking food and running power plant generators, while oil is the primary fuel used for transportation.  But there are proposals to convert truck fleets to natural-gas burning engines and abandon pollution-prone coal plants for gas-powered generators that would support an increased use of electric automobiles.

Natural gas produces close to 50 percent less carbon dioxide than coal and less air pollution in general than oil, something Michael Economides says should draw support from environmentalists.

“Natural gas, which has a lot of advantages, should be the darling of environmentalists as well as business people,” he noted.

But, while many environmental groups do give natural gas its place in the energy mix, some have expressed concerns over possible contamination of water resources through fracturing.  The Environmental protection agency is making a major study of the issue.

Former Shell Oil president John Hofmeister, who heads the group Citizens for Affordable Energy, says the oil and gas industry should take the matter seriously.

“I think if we are enforcing standards, regulated standards, that all companies have to apply and we have monitoring of these standards, then I think we can come to a sustainable formula for drilling an adequate supply of future gas reserves, which will keep us well supplied with energy for decades and decades to come,” said Hofmeister.

One expert who has looked at the issue closely for many years is David Burnett, a scientist at the Global Petroleum Research Institute at Texas A&M University.  He says proper disposal of water used in the process is the main concern.

“The drilling and fracturing of gas shales is completely benign, the surface footprint of drilling operations is pretty noticeable and the disposal of the water as it comes back is of concern,” noted Burnett.  “Most of us now, I think, do not allow people to discharge that water that comes back into any sort of surface waterway or any public water supplies or anything like that.”

If the environmental concerns can be fully addressed, some experts say, natural gas could become a much cheaper and a much more reliable alternative to the various renewable energies like wind and solar, which represent less than two percent of the current energy mix and are dependent on large government subsidies.

Based on International Energy Administration estimates, the University of Houston’s Michael Economides says the world has nearly 300 years worth of natural gas at current levels of usage.

But he says there may be even more in the form of frozen gas on the ocean floor, called natural gas hydrates.  If the gas hydrates can be extracted in a commercially viable way, Economides believes the world could have as much as a thousand years worth of the fuel.

By Nick Godt & Claudia Assis, MarketWatch

Original Article

NEW YORK (MarketWatch) — Crude-oil futures ended lower Thursday, extending losses for a second consecutive day as continued macro-economic worries dulled investors’ enthusiasm for oil.

Oil May Not Have Enough Fuel For $90 A Barrel

Oil prices may not have enough fuel to reach $90 a barrel, given ample stock levels and tepid demand. Prices are correcting lower after surging to 18-month highs this week on hopes of economic recovery, and analysts warn of a potential price bubble.

Crude oil for May delivery, the most active contract, lost 49 cents, or 0.6%, to $85.39 a barrel on the Comex division of the New York Mercantile Exchange.

On Wednesday, crude oil fell for the first time in seven sessions as the latest weekly estimate of U.S. crude oil supplies showed a bigger-than-expected build-up.

Reverberation from the increase in stockpiles joined renewed concerns about Greece and a rise in jobless claims to take oil even lower on Thursday, although it pared some of its losses towards the end of pit trading.

“What got us here, to $86, $87 the last few days, was anticipation of a better economy, better demand for energy, and certainly speculative appetite,” said James Cordier, a portfolio manager at OptionSellers.com in Tampa, Fla.

But the latest round of economic indicators was “anything but rosier,” Cordier said.

U.S. jobless claims rose by 18,000 to 460,000 last week, while markets expected a slight decline to 438,000. Stocks headed lower on the jobless claim report, although they got a shot in the arm from a strong retail sales report and posted gains.

Natural gas was among the worst-hit energy products Thursday. Prices held on to losses even as a weekly report on underground storage levels came in line with expectations.

The Energy Information Administration reported Thursday that storage levels increased by 31 billion cubic feet in the week ended April 2, compared to a five-year average increase of around 11 billion cubic feet.

The increase was as expected. Analysts polled by Platts expected increases by 29 to 33 billion cubic feet. Seasonally, natural gas storage increases from April to October.

“With the weather outlook implying further above average (increases) over the next couple of weeks, the context for the report is bearish … This is not a big shock for a market that has been declining for six weeks in anticipation of weak heating demand, but it does reinforce the bearish sentiment,” Citi Futures Perspective analyst Tim Evans wrote in a report.

Natural gas for May delivery, the most active contract, lost 11 cents, or 2.7%, to $3.9090 per million British thermal units.

Gasoline for May delivery lost 2 cents, or 0.7%, to settle at $2.2983 a gallon.

Commodities across the board were also feeling the pinch of a stronger dollar. The euro remained under pressure on renewed worries about Greece, and the dollar advanced, putting additional pressure on dollar-denominated commodities as they get more expensive for holders of other currencies.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 81.21, -0.33, -0.40%) , which measures the U.S. unit against a basket of six major currencies, rose 0.1% to 81.55.

Debt markets continued to demand more details about a rescue plan for Greece. European Central Bank President Jean-Claude Trichet, meanwhile, defended a joint backstop plan hammered out with the International Monetary Fund.

The continued sell off in Greek debt “shows that markets have little confidence that Greece will stick to fiscal austerity measures or that the Euro-IMF ‘aid’ agreement will provide any real support,” BMO Capital Markets said in a note.

Nick Snow

OGJ Washington Editor

Original Article

WASHINGTON, DC, Apr. 8 — Potential natural gas production from shale formations has dramatically improved North America’s supply outlook, three panelists agreed during a Washington energy conference. The technology behind it also could change gas supply patterns overseas and influence domestic demand for other fuels, they added.

US supply assumptions have been turned upside down in the last 3 years, they observed at the Apr. 7 natural gas breakout session at the Annual Energy Outlook Conference cosponsored by the US Energy Information Administration and Johns Hopkins University’s School for Advanced International Studies. “I sometimes wonder if we would have built 14 bcf of LNG import capacity if we’d known about this,” said Benjamin Schlesinger, president of Benjamin Schlesinger & Associates LLC, Bethesda, Md.

Michelle M. Foss, chief economist and head of the University of Texas at Austin’s Center for Energy Economics, suggested that US shale gas development will respond to market demand. “I also think the potential could be greater if the technology improves further,” she said. “There have been some major strides combining lateral drilling with fracturing. But try to imagine being able to drill microscopically. All of the pore bases in these domestic formations are different. So are geological environments and water availability. There are still challenges.”

It could take longer overseas, according to Andrew Slaughter, business environment manager for Royal Dutch Shell PLC’s Upstream Americas division in Houston. “In North America, we have a very efficient development process, with relatively quick consumption. Other areas face major distances between production sites and markets, and have to deal with stranded supplies,” he said, adding that governments could take 20 years to change policies and energy firms operate in a 45-to-50-year investment timeframe.

“Europe is struggling with similar issues,” said Foss. “It’s looking at what we do with shale gas because countries there have some too.” Slaughter agreed that shale gas offers potential in Europe, but said it will take longer to develop than in the US. “Its significance is that a lot of it is in countries like Poland and Ukraine, which have relied heavily on Russia for their gas,” he said. “If it isn’t developed, their heavy reliance on coal also could continue.”

Pipeline impacts

Discussions of developing supply alternatives to Russian exports grew more serious after the first big cutoff 2 years ago, Foss said. Slaughter said that delays on the Yemal and other long-distance pipeline projects have slowed the process down. Schlesinger said Europe’s biggest difference from the US could be that its pipelines are not independent but are affiliates of major national producers, which has an impact on their operations and strategies.

China’s demand for gas also will be important, the panelists agreed. “Despite its coal resources, China is about to become a coal importer. That could direct it more to gas,” said Slaughter. The country has shale gas formations, Foss noted, “but the one caveat is that its geology is very complicated, with a lot of tectonics and fracturing,” adding, “It’s going to be very aggressive in its import growth, at least 37%.” Schlesinger added that China will need to do more than develop its shale gas: “It needs pipeline and distribution infrastructure.”

Glen Sweetnam, director of EIA’s international, economic, and greenhouse gases division and the session’s moderator, noted that the National Petroleum Council, in its 2007 “Hard Truths” report, forecast significant LNG demand growth in Europe and the US by 2030. When he asked if shale gas’s potential has made this prediction obsolete, the panelists said that LNG still matters. “It’s more than just gas. It’s liquids, particularly along the Gulf Coast,” said Foss.

Slaughter said it is hard to generalize about LNG in Europe. “Spain has its own situation because it’s about 75% LNG dependent. That’s different from eastern Europe with its shale gas supplies and increasingly flexible import contracts,” he said. Customers and suppliers worldwide are pressing for more flexible LNG contract terms, according to Foss. “The big experiment for customers in Japan is indexing LNG’s price to gas instead of oil,” she said. “Suppliers also want the flexibility to change destinations in response to prices.”

Evolving national climate-change strategies could have their biggest impact on gas by changing how coal is used, Schlesinger suggested. “I think coal’s long-term future is in gasification. The sooner the industry realizes it, the better,” he said. “We have one large-scale gasification plant in this country which lost money for years, but is capturing carbon efficiently and sending it to Saskatchewan for enhanced oil recovery.”

Carbon programs

Many people assume that more countries will adopt systems which put a price on carbon emissions, but no one is certain what those programs will involve, Slaughter said. “If you get a level playing field across all fields, gas could do quite well,” he said.

Schlesinger said, “I think the capture aspect of carbon capture and storage could be a bigger challenge than expected, particularly capture stack gases. This might make pretreatment more appealing, particularly for coal and possibly for gas.” Pipeline capacity is another CCS aspect which needs to be addressed, he added. “There’s only about 3,000 miles of carbon dioxide pipeline in this country now,” he said. “The industry will need to grow because distances between carbon generation and storage sites are usually so great.”

Domestic shale gas development investment, meanwhile, may require other changes, the panelists said. Foss said, “There may be more long-term contracts. I think conversations are taking place already.” Schlesinger said, “Moving regulators to accept long-term contracts will be a hard sell, particularly since short-term markets are so transparent.”

Foss said, “There’s been a critical wave of risk-taking independent producers who have got things going in this country, but the majors will need to provide sustainability. It’s the usual story.” Domestic shale gas formations also are largely on private instead of public land, she added. “This makes it possible to reach decisions in a few months instead of several years. It’s been a big factor in the rate of shale gas development,” she said.

State policymakers also should consider more than one approach to increase revenue as shale gas projects are developed, Slaughter said. “They can tax new economic activity that results from it instead of just the molecules that are produced,” he said.

Caddo approves road laws in light of Haynesville Shale traffic

By Adam Kealoha Causey

April 9, 2010

The Caddo Commission on Thursday approved laws that should protect parish roads from an increase in the number of big rigs hauling equipment to help drain the lucrative Haynesville Shale natural gas field.

Commissioners also will oversee hiring of staff to enforce the beefed-up ordinances.

Parish Sheriff Steve Prator will certify workers with gun toting and arrest powers. “But they’ll work for the parish,” he re-enforces.

An early version of the commission’s proposal made Commercial Vehicle Enforcement Unit the sheriff’s employees. The panel will split collected fines with the sheriff. Bossier’s vehicle enforcement unit made $60,000 in fines during its first two months, Caddo commissioners say.

Workers likely will be part-time and may be former Caddo deputies, Commissioner Jim Smith said.

“That way they’ll be familiar with the sheriff’s office and the area,” Smith said. Residents in Smith’s southwest Shreveport and south Caddo district have seen much of the bulk of heavy trucks.

Among size requirements:

# Drivers of many vehicles wider than 8.5 feet and whose loads are more than a foot wider must obtain permits.

# The parish may charge permit fees, which vary by weight and distance traveled. Those range from $30 for vehicles whose gross weight is 80,000 pounds to $575 for those that weigh up to 254,000 pounds.

# Escort vehicles for large loads must have two, 18-inch-square flags that are red or fluorescent orange and mounted at 45-degree angles.

Oil and gas leases put on hold in Mont., Dakotas

By MATTHEW BROWN (AP) – 12 hours ago

http://www.google.com/hostednews/ap/article/ALeqM5jsi5EkDyiWJEegKNRd30ZxVKNmFAD9EV868G0

BILLINGS, Mont. — Federal land managers are suspending an April 13 sale of 91,000 acres of oil and gas leases in Montana and the Dakotas until they can study how oil field activities contribute to climate change.

Thursday’s suspension comes three weeks after the Bureau of Land Management agreed to suspend another 38,000 acres of leases. That agreement was part of a settlement between the agency and environmentalists who sued over a 2008 lease sale in U.S. District Court.

At issue are greenhouse gases emitted by drilling and industry practices. Oil and gas operations contribute about 23 percent of annual U.S. methane emissions and 2 percent of total greenhouse gas emissions.

BLM spokesman Greg Albright says a new environmental review of the suspended parcels could be done by late September.