SQUEEZING BLOOD FROM STONE

By Paul Bermanzohn, MD

The development, in 1993 after years of research and trial and error by Texas oilman George Mitchell, of a new technique called hydraulic hydrofracturing was combined in 2002 with horizontal drilling, another new technique, to make possible the extraction of so-called “natural gas” from long-coveted Marcellus Shale rock formations. The techniques have been used in several other large shale gas fields in the US, unleashing a veritable gold rush, as companies scramble to get a piece of the action, all hoping to extract large profits from the vast reserves of gas a mile or more below the ground.

The expected production of gas from shale may actually be exceeded by the vast amounts of gas blown off by a chorus of bloviating politicians and self-appointed experts whose noise level rivals that of a fracking station. These misleaders all hail the gas revolution as bringing a new utopia of  “energy independence” and economic uplift for the vast unemployed and underemployed masses. These “experts” ” ignorance is matched only by their dishonesty.

What follows is the first of a series of posts in which I hope to look at the shale gas explosion from the perspective of what best serves the majority of people and emphatically not from the perspective of what is best for a few billionaires. The billionaires are well represented; they already own most of America’s political and media machinery. They don’t need another representative.

A particular angle I hope to develop more fully is that the environment needs us to resist the development of the gas fields. Global warming and peak oil both mean that we need to go past fossil fuels and push to develop sustainable, renewable sources of energy. Big Oil hopes to maintain its economic supremacy in the world economy by keeping us addicted to fossil fuels. This is the real meaning of their campaign to promote gas as “the transition fuel to the future.” The future they hope to salvage is their own, to which our futures and that of the planet may be sacrificed to keep their economic supremacy in place.

The economic domination of big oil is a key reason that the political system in the US has been unable to make any real steps toward stopping the world’s dangerous, probably lethal addiction to fossil fuels. For this reason we need to stop them from continuing our reliance on fossil fuels as our main energy.  And like any community trying to get rid of drug dealers, we ourselves need to take decisive steps toward driving the dealers out of the community; we can’t wait for the authorities to get rid of the dealers. The official powers are too invested in the maintenance of the system of addiction to do what is needed to break us from this fatal addiction. The fight to stop fracking is the fight against global warming.

My intent is to focus on what is happening on NY State. The reason for this is twofold: This is where I live so I know most about what is happening here and NY State is the first place where it appears possible to stop the drillers.

GAS PRICES AND THEIR EFFECT

low prices are good for the monopolies

The techniques of hydraulic fracturing combined in 2002 with horizontal drilling to open vast reserves of gas that lie in shale rock formations thousands of feet below the earth. The largest of these gas fields in North America thus far opened up is the Marcellus Shale, which stretches under 7 states, from NY to Tennessee.  The Marcellus is one of several large formations in the US from which large quantities of gas have been extracted. This has caused a glut of natural gas in the US market, with major consequences. The first result of the glut in gas has been a significant drop in price, and the effects of these reduced prices have implications for how drilling in the Marcellus will proceed, how the industry will develop, and its effects on all of us.

The biggest oil companies in the US and the world have begun to move into the Marcellus. (See the attached chart.) These 3, the largest of the oil giants (ExxonMobil, Chevron and Shell) have each made billions of dollars in investments. Purchasing natural gas drilling companies and their leases, Big Oil hopes to begin drilling soon. They announced their initial buyouts during and after the summer of 2010. More recently, on May 5, 2011, Chevron announced plans to buy 228,000 acres of leases in southwestern Pennsylvania. While they are so far largely centered on the Marcellus states where drilling has begun, especially Pennsylvania and West Virginia, we can expect them to take a great interest in NY State goings-on, especially as public sentiment turns toward stopping hydraulic hydrofracturing for natural gas in NY. If NY were to stop this practice by outlawing it in the state – a ban – it would have a galvanizing effect on those states where it is already happening, as well as in other countries. (This is being written as France’s lower house of Parliament voted for a national ban on the practice of hydraulic hydrofracturing; the Canadian province of Quebec recently instituted a 2 ½ year ban on fracking.) The oil companies will undoubtedly not want to lose their enormous investments in this hazardous process, not to mention the billions in profits they hope to “free” from the Marcellus Shale.

Shell was the first to announce its purchase, when on April 30, 2010, they said they were buying East Resources, a gas drilling company based in Warrendale, Virginia, for $4.7 billion.  Not long after, ExxonMobil, the world’s biggest oil giant, closed the deal to buy the country’s biggest gas drilling company, Texas-based XTO Energy, for $41 billion (this figure includes debt they  assumed in the takeover). Congressional review of this giant merger was promised, but there is no evidence that any took place. Finally, Chevron, the US’s second largest oil giant closed the deal on the purchase of Pittsburgh-based Atlas Energy for $4.3 billion. This last deal was almost undone when India’s biggest private energy company, Reliance Industries, Inc., intervened and tried to buy Atlas out from under Chevron, provoking a short but intense bidding war which Chevron won.

These three deals had been in the works for years and the purchasers had made it clear that their reason for buying these gas drilling companies was to get into the Marcellus Shale. An important part of each deal is that the giants got many thousands of acres of Marcellus drilling leases as part of their purchase, making it easier to start drilling in the target area. Just last week, on May 7, 2011, Chevron announced a deal to purchase 228,00 acres of drilling leases in southwestern Pennsylvania. In 2008, Rex Tillerson, CEO and President of ExxonMobil, told Forbes Magazine that his company intended to get a position in the Marcellus “early and quietly.”

Widespread drilling throughout the country in various shale gas formations has led to an overproduction of gas, flooding the market and depressing prices. In the decade 2000 to 2010, gas prices peaked in 2006 at about $14.00/cubic meter, then they settled to about $8.00/m³. There was a second peak in mid-2008, again at about $14.00 per m³. This was followed by a steady decline in price, currently at about $4.00 /m³. (There is an informative graph of natural gas prices in the Wikipedia article on “natural gas prices,” from which these numbers are taken.) Some companies maintain that they can make a profit with prices of about $5.00 per cubic meter, while some industry experts insist they need to be at least $7.00 per cubic meter to sustain them.

What they need to survive probably varies for each company, but it is clear that the current low price of gas makes it very hard on the smaller companies, which cannot recoup their investments at the current price levels. Low gas prices are affecting the industry in 3 major ways:

1. consolidation by the monopolies

First, and perhaps most important, low prices for gas have ushered in a period of consolidation in the Marcellus Shale. This is what we’re seeing now with the large investments by Big Oil. The oil companies have begun buying up not only gas drilling companies but also hundreds of thousands of acres of leases where they might drill.  Smaller companies, even some of the larger ones, are being forced to adapt to these conditions. Unable to drill in the current market, they are consolidating their lease holdings and selling them off in order to get cash to survive. Even the giant Chesapeake Energy, the biggest driller in the Marcellus, has felt the impact of low gas prices.  They recently announced a change in strategy and will be selling off their vast holdings of leases and move more into searching for and drilling for oil. These dynamics are turning land trading in the Marcellus into a real estate bazaar.

This process of consolidation now underway is similar to the consolidation that went on in the early days of the oil industry, culminating in the emergence of the Standard Oil Trust led by John D. Rockefeller. Two of the 3 companies currently in the Marcellus are direct descendants of the old Standard Oil Trust (Exxon and Mobil were Standard Oil of New Jersey and of NY, and Chevron was Standard Oil of California.) and so cannot be unaware of John D. Rockefeller’s oft-repeated injunction to “Buy all we can get.” He especially followed this course of action when prices were low, the best time to buy out competitors. (I recommend reading Daniel Yergin’s classic book on the oil industry, “The Prize” for a historical perspective on the booms and busts and the “gold rushes” in the energy industry. It helps to understand what we face now. While it is decidedly pro-industry, it is a fountain of detailed information on the history of these giants, and well written to boot.)

2. potential conflicts with landowners

The smaller companies’ not drilling because of low prices affects the landowners who leased their property for drilling to the companies. These landowners are eager to make money from the transaction and many of them suspect the companies are not acting in good faith.  Many leases specify that the landowner will be paid a proportion of the profit earned from the gas that comes out of their land, called a royalty. Some believe that the companies are not drilling to cheat them out of the money they should be earning. This may allow some dialogue to open with some property owners about how their land is being taken over by giant multinationals which do not keep their interests at the forefront of their business planning. This may open some of the landowners’ eyes to what is going on, but probably not many. There is still the exhilaration of the gold rush, the hope of vast riches suddenly flowing out of their ground.

Some of those seeking to lease their land for drilling are farmers getting crushed by agribusiness who cannot make a living from farming. Some of these farmers are opting to try to save their land by leasing it for gas drilling. This is a sad and futile gesture. These farmers are desperate to survive, but they are taking steps to save their land which will likely destroy it.

While farmers who cannot survive the death of family farms are among those leasing their property for drilling, many of the landowners seem to be trying to make a fast buck in the spirit of American capitalism and the get rich quick scheme.

Even so, landowners are not the enemy of the anti-fracking movement, a perspective that remains too common in the movement. It has been very difficult for many years to make a decent living in upstate NY. Today, with global economic crisis added to the long-standing depression of NY’s upstate, people have even more difficulty in making ends meet. We need to approach the landowners who hope to lease with understanding, not moralism. Lessors and lawyers who specialize in leasing have noted that the amount paid for leases has gone down in the last year, since Big Oil has begun to consolidate its holdings in the Marcellus.

3. Pressure to export gas

The third big result of low prices for gas is an irresistible pressure to export the gas, to places where it can fetch a better price. Just like companies go abroad to get cheaper labor, multinationals seek out their best profit by surveying the world market. The expectation is that the gas extracted from the shale will be sold, at least while current price differentials prevail, to places like South Korea and Japan, the world’s biggest importers of the fuel, or to Europe. The companies can expect to get a higher profit than in the US because of low prices here.

This could well lead to proposals by the oil giants to set up liquid natural gas export facilities. Although it is a dangerous way to ship energy, gas can be shipped overseas only in the liquid form. As recently as last year, New Jersey Governor Christie vetoed an LNG export facility off the coast of his state, citing the “unacceptable risks to the State’s residents, natural resources, economy and security.” But let’s not be surprised if new proposals surface for LNG export facilities in the region in the period ahead.

There is nothing wrong, of course, with trade with other lands, but one of the main reasons given for the imperative necessity for gas drilling in the US is that it will bring a mythical “energy independence.”

Not if it’s exported by profit-seeking multinationals.

(In future posts I will deal with the myth of energy independence and other myths of the Marcellus.)

Purchases of drilling companies & leases in the Marcellus by major oil companies
copyright 2011 by Paul C. Bermanzohn,MD

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…b u t. . r e m e m b e r. . w h o. . w i n s. . i n. .t h e. . e n d .

Gas Drilling in Beautiful Susquehanna County, PA from VeccVideography on Vimeo.

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There isn’t really so much recoverable shale gas out there.   And there isn’t nearly enough market for what’s currently coming out of the ground.  What’s a dinosaur of an energy player to do?

Here’s what:  First, convince investors that natural gas is the next big thing.  (You can do this with lots of slick commercials on the financial channels.)  Drill lots of wells with their money.  Foreign countries make perfectly good investors – after all, what’re they gonna do when it all collapses – start a war? on US soil?  Second, but simultaneously, convince greedy and gullible lawmakers that there are almost limitless supplies of your commodity and lobby them to pass HR 1835 to give favorable tax treatment (at taxpayer expense, of course) to encourage conversion of the US transportation fleet to natural gas.  This will not only create a desperately-needed market for all that gas in storage that no one knows what do with, but it might finally improve the unit price  (and your stock price, too).    Quick, pull it off while it still looks like there’s more natural gas than anyone knows what to do with!

Once you’ve paid yourself handsomely from investor and taxpayer dollars, get the heck out before everyone else sees the bubble’s about to pop.   The profits from the construction of all those retooled factories and natural gas filling stations will be in your pockets.  Who cares if the factories are at a standstill and the filling stations are obsolete?

P.S. Be sure to invest some of that lucre you duped out of investors and taxpayers into bottled-water companies and municipal water suppliers.  After all that drilling, there’ll be lots of demand for replacement water supplies.

Must-see Powerpoint:

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Arthur Berman:

Shale Gas -

Abundance or Mirage?

Why the Marcellus

Will Disappoint Expectations

]]> http://un-naturalgas.org/weblog/2010/10/100-years-worth-of-natural-gas-from-us-shales-theres-no-there-there/feed/ 0 http://un-naturalgas.org/weblog/2010/09/promises-promises/ http://un-naturalgas.org/weblog/2010/09/promises-promises/#comments Mon, 13 Sep 2010 20:48:43 +0000 clearwater http://un-naturalgas.org/weblog/?p=2703

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No economic boom, inadequate tax revenues, low royalties, wrecked roads, bad water.

So what else is new?

From NewsInferno.com 9/13/2010:

Fracking in Arkansas Falling Short of Promise

It appears that hydraulic fracturing in Arkansas’ Fayetteville shale isn’t living up to past promises. According to a report in Arkansas Business, depressed natural gas prices have eaten away at royalties and at the state’s severance tax, which was designed to raise revenue to offset the damage the industry causes to roadways.

A gas industry-funded study released in 2008 promised that fracking in Arkansas would have an $18 billion economic impact over five years. The year the study was released, the price of natural gas peaked above $11 per thousand cubic feet (MCF). Since then, Arkansas Business says the national average wellhead price has rarely topped $5 per MCF. That’s significantly cut the amount of royalties gas drillers have paid to mineral rights owners.

When the severance tax was increased in 2008, it was projected to bring in $57 million in its first year. But between the law’s passage in April 2008 and its effective date on Jan. 1, 2009, the price of gas dropped by half. That means that dollars available for road repair have been in short supply, Arkansas Business said.

. . . . .

While the economic boom promised by fracking has yet to materialize, environmental concerns are mounting. According to Arkansas Business, complaints to the Arkansas Department of Environmental Quality (ADEQ) surged in fiscal year that ended on June 30, 2009. That year, ADEQ’s Water Division received 108 complaints related to oil and gas activities and performed 216 inspections. As the 2010 fiscal year drew to a close in June, the number of complaints was about 80.

. . . . .

Some… water contamination incidents that have come out of Arkansas since fracking took off there … include:

• In 2009, a Bee Branch family reported their drinking water turned gray and cloudy and had noxious odors after fracking of a nearby natural gas well owned by Southwestern Energy Company.

• A Center Ridge family reported that in 2007, after hydraulic fracturing of wells owned by Southwestern Energy Company, their water turned red or orange and looked like it had clay in it.

• Another Center Ridge homeowner reported that after hydraulic fracturing of a well owned by Southwestern Energy Company in 2008 his water turned brown, smelled bad, and had sediment in it.

• In 2007, a family in Pangburn reported contamination of drinking water during hydraulic fracturing of a nearby natural gas well owned by Southwestern Energy Company. The water turned muddy and contained particles that were “very light and kind of slick” and resembled pieces of leather.

• In 2008, Charlene Parish, another Bee Branch resident, reported contamination of drinking water during hydraulic fracturing of a nearby natural gas well owned by Southwestern Energy Company. Her water smelled bad, turned yellow, and filled with silt.

See entire piece at http://www.newsinferno.com/archives/23905

Side-by-side sampling reveals that the Texas Department of Environmental Quality air monitor in Dish, Texas is under-recording toxic VOC levels in the air.

Now why d’ya suppose it’d do that?

]]> http://un-naturalgas.org/weblog/2010/08/every-agency-has-its-price/feed/ 0 http://un-naturalgas.org/weblog/2010/06/ignore-pickens-shilling-for-shale/ http://un-naturalgas.org/weblog/2010/06/ignore-pickens-shilling-for-shale/#comments Wed, 30 Jun 2010 14:56:30 +0000 clearwater http://un-naturalgas.org/weblog/?p=2627

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Excerpted from

Dubious Path to a Green Future

Originally published on 6/28/10

Many energy experts contend natural gas is the ideal fuel as the world makes the transition to renewable energy. But since much of that gas will come from underground shale, potentially at high environmental cost, it would be far better to skip the natural gas phase and move straight to massive deployment of solar and wind power.

by Daniel B. Botkin

For several years, many voices, including Texas energy baron T. Boone Pickens, have been touting natural gas as the best energy source to form a bridge between the current fossil-fuel economy and a renewable energy future. Proponents contend that not only is natural gas a cleaner-burning fuel than coal, producing lower greenhouse gas emissions, but that reserves of natural gas are far greater than previously believed because of vast reserves trapped throughout the U.S — and around the world — in huge underground formations of shale.

. . . . .

But what is the reality behind the optimistic claims for shale gas? The U.S. Geological Survey lists natural gas “reserves” — the amount believed to be in the ground — in four categories: readily available with current technologies, which accounts for only 1 percent of the known natural gas in U.S. territorial limits; technically recoverable (5 percent); marginal targets for accelerated technology (6 percent); and unknown but probable (84 percent). Shale gas shares the fourth category with coal gas and methyl hydrates. The latter are a kind of water ice with methane embedded in it and occur only where it is very cold, in Arctic permafrost and below 3,000 feet in the oceans.

In researching how best to make the transition to the green energy future, one of the first calculations I made was to find out how long the natural gas in each of the four categories would last if we obtained it independently — that is, only from U.S. territory. I was shocked by the result: Just using our 2006 rates of use of natural gas consumption — not including any major transition to fueling our cars and trucks — the “readily available” gas within the United States would be exhausted in just one year. That, plus what is called “technically recoverable” gas, would be gone in less than a decade. What is termed “unknown but probable” would last about a century.

This means that any significant increase in our consumption of natural gas will have to come from the “unknown but probable” reserves, much of which will be from formations of shale, a sedimentary rock formed from muds in which bacteria released methane. Most of this gas is so deep underground or otherwise not very accessible that nobody is really sure that we can get at a lot of it, or of how high an environmental price we must pay to retrieve it.

Read entire piece at e360.yale.edu

See also

Analyst: Shale gas may be next bubble to burst

Eric Fox:  What could go wrong with shale plays

Must-read:  How neutral is the potential gas committee?

Remember this when you hear those slick commercials touting decades worth of natural gas from tight shales

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Is natural gas really a clean fuel?

“Natural gas is marketed as a clean fuel with less impact on global warming than oil or coal, a transitional fuel to replace other fossil fuels until some distant future with renewable energy. Some argue that we have an obligation to develop Marcellus Shale gas, despite environmental concerns. I strongly disagree.

“Natural gas as a clean fuel is a myth.”

- Cornell professor: “Gas and drilling not clean choices”

See also Cornell scientist tarnishes natural gas’s clean image

and http://un-naturalgas.org/weblog/2009/03/if-2-leaks-the-co2-impact-of-natural-gas-is-the-same-as-burning-coal/

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]]> http://un-naturalgas.org/weblog/2010/02/p-harmony-a-lobbyist-finds-his-senator/feed/ 0 http://un-naturalgas.org/weblog/2010/01/a-glass-of-pennsylvania-lemonade-mr-gill/ http://un-naturalgas.org/weblog/2010/01/a-glass-of-pennsylvania-lemonade-mr-gill/#comments Mon, 25 Jan 2010 03:23:55 +0000 clearwater http://un-naturalgas.org/weblog/?p=1680

Home water supply after gas drilling, Hickory, PA

Governor Rendell, Governor Paterson, will you join us?
Mr Grannis? Mr. Gruskin?  There’s plenty for all.

I live in Hickory, PA… just to update what is going on here, we had our water sent to an independent lab. The amount of toxic chemicals found were off the chart.  We had the DEP come to the house (they are a complete joke!).  They took a sample of the water months ago and we have had no report come back from them. My landlord called them and they said it was safe to drink. We still have had no report from them. The same day they took the water sample, I took a picture of our water, you won’t believe it.
From time to time our water quits running so I have to reset the pump, this is when this brown oily water flows through our pipes. Believe it or not, the DEP took three vials of this same water for testing.  The lab told us not to drink the water, not to use it for cooking and not to use it for bathing. When you can’t [get] help and you can’t get another water supply because too many people have their pockets padded, what are you to do? We take quick, lukewarm showers (pray for me) we do not drink it and don’t use it for cooking, we buy alot of bottled water.
Here is a picture of the brown water, it’s not always brown but it’s always full of toxins!
It’s strange how people are so scared of the swine flu, but when you talk about how the gas drillers poison our water supply they think you’re crazy or they get mad because they think they can become rich off of a deal with a gas company, money is more important to them than their health.  Finally, but too late for them, people’s eyes are starting to open to see the truth.
Thank you and keep up the fight, I know I will, the future of our nation’s health depends on it!

Hickory, PA resident, to Damascus Citizens for Sustainability, January 13, 2010

‘Petro-pirates’ robbing Alberta’s resources

Flushing justice down the pipeline with Wiebo Ludwig’s arrest
Published January 14, 2010  by Jack Locke in Viewpoint Corey Pierce

. . . . . Alberta is not a democratic province. It is a province controlled by international corporations that see profit and extraction of natural resources as their prime object.

In order to accomplish their objective, the industry will use its abundant resources to do things that are not very nice. Companies will send crews of desperate men to attack the land and lay waste on anyone who gets in their way. These crews may wear uniforms and call themselves Royal Canadian Mounted Police. Or the petro-pirates may hire private security forces to instigate dirty tricks to dissipate legitimate opposition to the destruction of Alberta’s air, water and land.

There is a great amount of opposition in Alberta to what the Progressive Conservative dynasty allows. There are voices in every Alberta city that oppose the wanton poisonings of citizens who happen to live downwind or adjacent to an oil or gas well.

But Oilberta is a one-industry town. It is run by the bosses of EnCana, Shell and other giant corporations. They have infiltrated every aspect of Alberta society: hospitals, schools and the government. They have put a clamp on dissension and discussion in a most disgraceful way.

. . . . .

I have lived 15 km downwind of a gas plant. I can tell you stories about the clouds of toxic chemicals that are emitted in the dark of night, while country children sleep in their beds. I can tell you how the Alberta government watchdog agency prohibited me from speaking at a public hearing over whether to allow Shell Canada to expand its Caroline gas plant. I can tell you how the government of Alberta intercepted my private communications for at least four months in 1999.

Nobody likes explosions of pipelines. Nobody likes to have a seismic crew destroy the ageless aquifers that provide drinking water for cattle and country folk. Nobody likes to have a gas well spewing harmful vapours into the air. But people do like automobiles, and they like to receive unnaturally healthy returns on investment. Ah, there’s the rub.

The situation in Alberta will continue for some time to come. So long as birds are found dead on tarsand tailings ponds, so long as drinking water ignites in the rural homes of Albertans, so long as the government permits these atrocities, not much will change.

All that Ludwig wanted was a decent place to live, free from the dangers of modern life. A simple rural existence, subsistence. You’d think it could be found in remote Hythe, Alta. But obviously not.

The idea of sustainable development, respect of citizens and nature and a just society are words not often heard in Alberta’s highest offices. And even if they are heard, they are meaningless in the current political environment.

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As a large, cold nation we should develop a national policy that protects the land for future generations, one that protects our natural resources. Depletion of our life’s blood will only ensure a miserable future for our children.

Even if our governments allow for the exhaustion of our non-renewable resources, they must not prohibit legitimate debate on the subject. The word tyranny should have no place in the Canadian lexicon. Yet, the repeated arrest of Ludwig is a sad example of justice being flushed down the pipeline.

Read full piece at Fast Forward Weekly

Photo of Mono Lake © Copyright 2009 David Chudnov FreeLargePhotos.com

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Mono Lake, in California, is about twice as saline as ocean water.  Very few species can survive there for long.   The exceptions are an algae, brine shrimp, and alkali flies.  Mark Twain found Mono Lake to be a “lifeless, treeless, hideous desert… the loneliest place on earth.” (Wikipedia)

Brine from gas wells is six to ten times as saline as ocean water.*

And nobody knows how to treat or dispose of it safely.

*”Clinton (OH) brines have 175,000-210,000 parts per million of sodium. For comparison, ocean brines have only 18,000-35,000 ppm of sodium.”  See Expert: “The industry has too little concern for …….. public health, for our groundwater resources, and for facts.”

See also http://sootypaws.livejournal.com/13664.html

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Below are 3 links to articles regarding this incident. The 1st reports on the firing; the 2nd is the editor’s explanation for his firing (posted on the columnist’s blog); and the 3rd is the column, which (due to pressure from industry to suppress the publication of a shale gas play production chart) was pulled from the November issue of World Oil.

Umbrage in the Gas Patch

http://www.aspousa.org/index.php/2009/11/umbrage-in-the-gas-patch/

From Perry Fischer, former World Oil Editor:
http://petroleumtruthreport.blogspot.com/2009/11/letter-from-perry-fischer-former-editor.html

Facts are stubborn things: Arthur E. Berman November 2009

http://www.aspousa.org/index.php/2009/11/facts-are-stubborn-things-arthur-e-berman-november-2009/

Now, why might large publicly traded drilling companies wish to suppress analysis indicating actual shall gas yields aren’t even close to what the prospective investors and leasors think they are?

Petrohawk has only $526 million in current assets, and $5.88 billion in non-current (not liquid) assets. Shareholder equity is $3.28 billion (6.2 times current assets and equal to 51% of total assets). Petrohawk desperately needs its shareholders to believe its tall tales.

- David J Cyr

Gas line explodes in Panhandle

Nov. 5, 2009, 9:29AM

BUSHLAND — A natural gas pipeline exploded in the Texas Panhandle on Thursday, shaking homes, melting window blinds and shooting flames hundreds of feet into the air, authorities said. Three people were injured in the blast, which occurred at 1 a.m. near Amarillo, and they were taken to an area hospital with burns, said Potter County Sheriff’s Chief Deputy Roger Short. “My home is about 20 miles something away and I could see the flames from my home,” Short said. “You could hear the roar of the flames 20 miles away.” Firefighters were able to contain most of the flames by 5:30 a.m. though small grass fires continued to burn, Short said. Nearby residents were evacuated, and the pipeline’s gas was shut off, Short said. One house was destroyed, and several others were damaged in Bushland, about 15 miles west of Amarillo, he said. “The heat onto the homes, it did a lot of damage. You could see blinds inside the homes that were melted … it was very hot,” Short said. Bushland Middle School principal, Mark Reasor, said about 60 people who were evacuated took shelter at the school for a few hours before returning home before dawn. Gas service had been cut off to nearby homes and Bushland’s schools, officials said. Messages left with the hospital for conditions of those injured were not immediately returned Thursday. A team of investigators was heading to the pipeline, said Robert Newberry, a spokesman for El Paso Natural Gas. El Paso Natural Gas is a subsidiary of Houston-based El Paso Corporation.

DEP says this will provide a “long-term solution.”  That seems optimistic.  How do you “replace” someone’s own clean, clear, safe spring or well water?  And, you have to wonder, eventually,  after northeastern PA and New York’s Southern Tier are pincushioned with  gas wells, where will the “replacement” water come from?  And what will we use to schlep it from hither to thither?  Oh, yeah, now I remember: diesel fuel made from foreign oil.  Yup, that stuff that natural gas was supposed to free us from depending on.

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Pennsylvania DEP Reaches Agreement with Cabot to Prevent Gas Migration,
Restore Water Supplies in Dimock Township

Agreement Requires DEP Approval for Well Casing, Cementing

MEADVILLE, Pa., Nov. 4 /PRNewswire-USNewswire/ — The Department of
Environmental Protection and Cabot Oil and Gas Corp. have executed a consent
order and agreement that will provide a long-term solution for migrating gas
that has affected 13 water supplies in Dimock Township, Susquehanna County.

The affected area covers nine square miles around Carter Road.

The consent order and agreement outlines a process that will give DEP more
oversight of Cabot’s new well construction work in the affected area. Prior to
drilling and hydraulic fracturing, or hydro fracking, the company will submit
well casing and cementing plans to DEP. Once DEP provides written approval,
Cabot may proceed.

“The goal of the consent order and agreement is to ensure a long-term
resolution to issues that have emerged in Dimock,” said DEP Northwest Regional
Director Kelly Burch. “The company will focus on the integrity of the wells in
the affected area in an attempt to determine the source of the migrating gas.”

This past week, Cabot has provided an interim solution for all of the homes
where water supplies have been affected. Cabot must develop a plan by March 31
to restore or replace the affected water supplies permanently.

Under the consent order and agreement, Cabot must additionally submit to DEP:

– Information on all parties who have contacted the company about water
quantity or quality issues; and

– A plan that specifically identifies how the company intends to prove the
integrity of the casing and cementing on existing wells and fix
defective casing and cementing by March 31.

If Cabot fails to fix the defective casing and cementing by the March
deadline, the company must plug defective wells or implement another
alternative as approved by DEP.

In addition, Cabot paid a $120,000 civil penalty for violations of the Oil and
Gas Act, the Solid Waste Management Act and the Clean Streams Law.

The consent order and agreement caps a DEP investigation that began early this
year when numerous Dimock area residents reported evidence of natural gas in
their water supplies. DEP inspectors discovered that the well casings on some
of Cabot’s natural gas wells were cemented improperly or insufficiently,
allowing natural gas to migrate to groundwater.

On Sept. 25, following a series of wastewater spills, DEP ordered Cabot to
cease hydro fracking natural gas wells throughout Susquehanna County. The
prohibition was removed after the company completed a number of important
engineering and safety tasks.

Cabot Oil and Gas Corp. is a Delaware-based company with a mailing address in
Pittsburgh.

For more information on oil and gas wells, visit www.depweb@state.pa.us,
keyword: Oil and gas.