hydraulic fracturing

Federal Reserve Policy Keeps Fracking Bubble Afloat and That May Change Soon

In August 2005, the U.S. Congress and then-President George W. Bush blessed the oil and gas industry with a game-changer: the Energy Policy Act of 2005. The Act exempted the industry from federal regulatory enforcement of the Safe Drinking Water Act, the Clean Water Act and the National Environmental Policy Act.

While the piece of omnibus legislation is well-known to close observers of the hydraulic fracturing (“fracking”) issue — especially the “Halliburton Loophole” — lesser known is another blessing bestowed upon shale gas and tight oil drillers: near zero-percent interest rates for debt accrued during the capital-intensive oil and gas production process.

Or put more bluntly, near-free money from the U.S. Federal Reserve Bank. That trend may soon come to a close, as the Federal Reserve recently announced an end to its controversial $3 trillion bond-buying program.

In response to the economic crisis and near collapse of the global economy, the Federal Reserve dropped interest rates to between 0 percent and .25 percent on December 16, 2008, a record low percentage. It also began its bond-buying program, described in a recent Washington Post article as implemented to provide a “booster shot” to the economy.

“The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability,” the Fed stated in a press release announcing the maneuver. “In particular, the [Federal Reserve] anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.”

That free money, known by economics wonks as quantitative easing, helps drilling companies finance fracking an increasingly massive number of wells to keep production levels flat in shale fields nationwide.

But even with the generous cash flow facilitated by the Fed, annual productivity of many shale gas and tight oil fields have either peaked or are in terminal decline. This was revealed in Post Carbon Institute's recently-published report titled, “Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom.” 

U.S. Energy Policies Based on Inflated Fracking Predictions: Post Carbon Institute Report

Economic predictions about the fracking industry's potential growth have for the most part gone unquestioned — until now.

A new report from the Post Carbon Institute exposes highly inflated forecasts and concludes that the amount of oil that can be tapped by hydraulic fracturing cannot be maintained at the levels assumed beyond 2020.

The report, “Drilling Deeper: A Reality Check on US Government Forecasts for a Lasting Tight Oil & Shale Gas Boom,” says inflated forecasts from the Energy Information Administration have fostered a lack of urgency to transition to renewable energy. The report also looks at the oil industry's increased pressure to relax restrictions on fracking and change oil and gas export rules.  

The Department of Energy’s forecasts — the ones everyone is relying on to guide our energy policy and planning — are overly optimistic based on what the actual well data are telling us,” says David Hughes, a geoscientist and author of the Post Carbon Institute report.

The report shatters the government’s estimate of the potential productivity of America’s shale regions. Four out of seven of the top shale regions have peaked and are now in a decline, the report says. Another three will peak in production before the government’s forecast predicts. In decline already are the Barnett, Haynesville, Fayetteville and Woodford Shales.
  

Source: Post Carbon Institute 

B.C. LNG Strategy Won’t Help Solve Global Climate Change: New Pembina Institute Report

Christy Clark at LNG Canada announcement

The B.C. government’s claim that LNG exports offer the “greatest single step British Columbia can take to fight climate change” is inaccurate in the absence of stronger global climate policies according to a new report released today by the Pembina Institute and the Pacific Institute for Climate Solutions.

Natural gas does have a role to play in a world that avoids two degrees Celsius in global warming, but only if strong emissions reduction policies are put in place in the jurisdictions that produce and consume the gas, says the report, LNG and Climate Change: The Global Context authored by Matt Horne and Josha MacNab.

Natural gas is often described as a bridge fuel. The question is, how long should that bridge be?” says MacNab, B.C. regional director for the Pembina Institute, a national non-profit focused on transitioning Canada to a clean energy future.

Our research suggests it must be very short if we’re going to be able to get off the bridge in time to avoid the worst impacts of climate change.”

Supporters of Fracking Ban Face New Wave of McCarthyism in Denton, Texas

Banning fracking in Denton, Texas

In Denton, Texas, a college town north of Dallas that sits atop the Barnett Shale formation, the fight over a referendum banning fracking within city limits is in the final stretch.

The local ballot initiative has global implications, with the energy sector watching closely.

The turmoil in Denton reflects a growing national debate between those concerned with health and quality of life issues, and others who claim the fracking industry is America’s answer to economic growth and energy independence.

Natural Gas as 'Bridge Fuel' Is Excellent Political Solution But Fails As Climate Solution

Fracking for natural gas

“We cannot solely rely on abundant gas to solve the climate change problem. The climate change problem requires a climate change solution. Abundant gas could be great for any number of things, but it is not going to solve the climate change problem.”

This statement was made by Haewon McJeon, the lead author on a new study published last week by Nature magazine, which concluded that cheap abundant natural gas will actually delay any efforts to reduce carbon emissions.

This isn’t the first study to reach this conclusion. In the 2013 study “Climate Consequences of Natural Gas as a Bridge Fuel,” author Michael Levi reached a similar conclusion. He noted that for natural gas to be beneficial as a bridge fuel it had to be a short bridge with gas consumption peaking by 2020 or 2030.

The new study, Limited Impact on Decadal-Scale Climate Change from Increased Use of Natural Gas, looks at natural gas consumption increasing through 2050.

Court Files: Coal CEO Robert Murray Unearths Lease from Aubrey McClendon's New Fracking Company

Robert E. Murray, CEO Murray Energy Corporation

DeSmogBlog has obtained a copy of a sample hydraulic fracturing (“fracking”) lease distributed to Ohio landowners by embattled former CEO and founder of Chesapeake Energy, Aubrey McClendon, now CEO of American Energy Partners

Elisabeth Radow, a New York-based attorney who examined a copy of the lease, told DeSmogBlog she believes the lease “has the effect of granting American Energy Partners the right to use the surface and subsurface to such a great extent that it takes away substantially all of the rights attributable to homeownership.”

The American Energy Partners fracking lease was shaken loose as part of the discovery dispute process in an ongoing court case pitting coal industry executive Robert E. Murraycontroversial CEO of Murray Energy Corporation and American Energy Corporation — against McClendon in the U.S. District Court for the Southern District of Ohio Eastern Division

Murray brought the suit against McClendon back in August 2013, alleging McClendon committed trademark and copyright infringement by using the “American Energy” moniker. Murray’s attorneys used the lease as an exhibit in a Motion to Compel Discovery, filed on September 8, over a year after Murray brought his initial lawsuit. 

The case has ground to a slow halt as the two sides duke it out over discovery issues and related protective order issues, making a large swath of the court records available only to both sides’ attorneys and causing many other records to be heavily redacted.

Out of that dispute has come the American Energy Partners lease, published here for the first time.

Workers at Fracked Wells Exposed to Benzene, CDC Warns Amid Mounting Evidence of Shale Jobs' Dangers

For years, the oil and gas industry has worked to convince Americans that the rush to drill shale wells across the country will not only provide large corporations with lavish profits, but will also create enormous numbers of attractive and high-paid jobs, transforming the economies of small towns and cities that greenlight drilling.

The industry's numbers are often picked up by policy-makers and politicians who back drilling, in part because talk of job growth is an especially alluring idea in the wake of the 2008 financial collapse.

But numerous independent studies have conclude that the industry vastly overstated the number of jobs that fracking has created, and that the economic benefits have been overblown.

A growing body of research suggests that not only does the industry create fewer jobs than promised, the jobs that are created come with serious dangers for the workers who take them.

Research made public late last month suggests that some of those jobs may be even more hazardous to workers than previously believed, calling into question the true benefits of the boom.

The Centers for Disease Control and Prevention (CDC) has released preliminary results from its workplace hazard evaluations at unconventional oil and gas wells – and they show that workers can be exposed to high levels of benzene during fracking flowback.

A striking 15 of 17 samples were over workplace limits set by the National Institute for Occupational Safety and Health (NIOSH). NIOSH standards are often used by the Occupational Safety and Health Administration (OSHA) to gauge whether a chemical exposure is illegally high.

Pennsylvania Plant Agrees to Stop Dumping Partially-Treated Fracking Wastewater in River After Lengthy Lawsuit

A Pennsylvania wastewater treatment plant alleged to have dumped toxic and radioactive materials into the Allegheny River has agreed to construct a new treatment facility, under a settlement announced Thursday with an environmental organization that had filed suit against the plant.

Back in 2011, Pennsylvania made national headlines because the state's treatment plants – including municipal sewage plants and industrial wastewater treatment plants like Waste Treatment Corporation – were accepting drilling and fracking wastewater laden with pollutants that they could not remove.

In July 2013, Clean Water Action alleged in a lawsuit that Waste Treatment Corp. of Warren, PA violated the federal Clean Water Act and the Endangered Species Act, along with Pennsylvania's Clean Streams Law by continuing to discharge partially treated wastewater, carrying corrosive salts, heavy metals and radioactive materials into the river, which serves as the drinking water supply for hundreds of thousands of people, including much of the city of Pittsburgh. 

Under the terms of the settlement, within 8 months, Waste Treatment Corporation must install advanced treatment technology that will remove 99% of the contaminants in gas drilling wastewater.

Until those treatment methods are in place, Waste Treatment Corporation agreed to stop accepting wastewater from Marcellus shale wells, notorious for its high levels of radioactivity, and to cut the amount of wastewater it can accept from conventional gas wells by over a third.

“The settlement represents the first time an existing industrial treatment plant discharging gas drilling wastewater in Pennsylvania agreed to install effective treatment technology to protect local rivers,” Clean Water Action wrote in a press release.

Louisiana's St. Tammany Parish Comes One Step Closer to Fracking

St Tammany Parish Fracking

The Department of Louisiana Natural Resources (DNRhas approved a unit permit for Helis Oil & Gas Company for a site in St. Tammany Parish that the company plans to frack. 

The department’s decision came on Friday, August 29, the ninth anniversary of Hurricane Katrina and the beginning of the Labor Day weekend.

Releasing the news on Friday is typical of Louisiana's government. It is another demonstration of how DNR is an advocate for the oil industry, not the people,” retired Lt. Gen. Russel Honoré, founder of the Green Army, told DeSmogBlog. “They know the majority of the parish do not want fracking and that they are doing something the people don't want. Releasing the news like that is disrespectful.”

Obama Opened Floodgates for Offshore Fracking in Recent Gulf of Mexico Lease

In little-noticed news arising out of a recent Gulf of Mexico offshore oil and gas lease held by the U.S. Department of Interior's Bureau of Ocean Energy Management, the floodgates have opened for Gulf offshore hydraulic fracturing (“fracking”).

With 21.6 million acres auctioned off by the Obama Administration and 433,822 acres receiving bids, some press accounts have declared BP America — of 2010 Gulf of Mexico offshore oil spill infamy — a big winner of the auction. If true, fracking and the oil and gas services companies who perform it like Halliburton, Baker Hughes and Schlumberger came in a close second.

Gulf of Mexico Oil Lease Map August 2014
Map Credit: U.S. Bureau of Ocean Energy Management

On the day of the sale held at the Superdome in New Orleans, Louisiana, an Associated Press article explained that many of the purchased blocks sit in the Lower Tertiary basin, coined the “final frontier of oil exploration in the Gulf of Mexico” by industry analysts.

“The Lower Tertiary is an ancient layer of the earth's crust made of dense rock,” explained APTo access the mineral resources trapped within it, hydraulic fracturing activity is projected to grow in the western Gulf of Mexico by more than 10 percent this year, according to Houston-based oilfield services company Baker Hughes Inc., which operates about a third of the world's offshore fracking rigs.”

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