“Men have an indistinct notion that if they keep up this activity of joint stocks and spades long enough, all will at length ride somewhere in next to no time, and for nothing; but though a crowd rushes to the depot, and the conductor shouts ‘All aboard!’ when the smoke is blown away and the vapor condensed, it will be perceived that a few are riding, but the rest are run over—and it will be called, and will be, ‘A melancholy accident.’” – Thoreau
Tags: Thoreau
The editor of the O&G industry magazine World Oil was fired for defending a petroleum geologist’s columns indicating shale gas yields are overstated (that wells aren’t actually producing as industry advertised… not even close).
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.
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
Unnatural Gas: The Inflated Promise of a Not-So-Clean Fuel
Meanwhile, in competing with Big Coal for the affections of Congress, the newly formed America’s Natural Gas Alliance (ANGA) launched an $80 million advertising and lobbying campaign earlier this year to promote its “clean, abundant, American, reliable, and versatile” product. As climate bills work their way through Congress, ANGA’s efforts appear to be paying off.
Risking our water so we can burn more natural gas will not be the planet’s miracle climate cure. For the United States to achieve necessary reductions in greenhouse emissions – estimated at more than 80 percent – will require not more energy production, even if somewhat cleaner, but deep cuts in energy consumption.
Coal must be phased out as quickly as possible, but more gas won’t accomplish that. While electric utilities’ gas consumption doubled from 1996 to 2007, coal use continued its steady climb.
What if, with shale drilling, we could achieve another doubling of gas-fired electricity generation, but this time eliminate an equivalent amount of coal-fired generation? Even that steep escalation of gas drilling would cut the utility industry’s carbon emissions by only 12 percent and the nation’s total carbon emissions by just 5 percent, based on Energy Department figures.
Financier T. Boone Pickens recommends running our vehicles on natural gas. But substituting natural gas for gasoline in all vehicles would reduce the nation’s total carbon emissions by less than 9 percent. Converting all gasoline-powered vehicles would consume more natural gas than electric utilities, homes and businesses combined. Consequences for the nation’s water would be disastrous.
Natural gas is being hailed by some, including Pickens, as a high-energy “bridge” to a renewable future, and by others as sufficiently climate-friendly to be a “destination” fuel. But as gas’ environmental drawbacks become more evident, it’s looking more like a bridge to nowhere.
Read the entire piece at http://www.commondreams.org/view/2009/11/04-5
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Dear Pickens Plan “Army” -
In an article titled, “High Times for T Boone Pickens,” Time Magazine quoted Senator Howard Metzenbaum:
“Pickens makes a crusade out of what he’s doing because he can make a lot of money.”
And that was in 1985.
I don’t know about you, but I see a pattern emerging.
http://www.time.com/time/magazine/article/0,9171,961946-1,00.html
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CDOG Responds to NPR’s Un-Natural Gas Propaganda Campaign
In September, NPR’s Morning Edition broadcast a 3 day series on the issue of extracting natural gas from stone, the content of which suggested NPR is now just another Naturalgas Propaganda Resource. Below are links to the 3 days of NPR’s un-natural gas promotion, with a CDOG response below each link.
Link to Day 1, of NPR’s petro dollared propaganda campaign:
09/22/2009 Rediscovering Natural Gas by Hitting Rock Bottom
www.npr.org/templates/story/story.php?storyId=113043935
CDOG Response to Day 1:
In your 09/22/09 Morning Edition story, Rediscovering Natural Gas by Hitting Rock Bottom, NPR framed the issue as gas drillers being nice small independent entrepreneurs struggling against an energy market dominated by big oil and big coal. That’s false. Those little gas drilling wildcatters are controlled by big oil and gas corporations, which use them to limit liabilities (evade deep pocketed corporation responsibility for purposeful pollution). The not so small “independent” Nornew, positioning itself over the Marcellus shale here in New York, is actually a subsidiary of the international O&G corporation Norse Energy, based in Norway.Your report focused upon increased estimates of possible gas quantities, without providing evidence of the quality deficits, like the water wells now being destroyed in Pennsylvania by this form of drilling.
The only downside to ripping remnants of gas from stone that the NPR reporter reported was that gas prices are too low, making it difficult for the optimistic “energy independence” drillers to make a profit from their [money] expensive operations. The National Propaganda Radio reporter didn’t report on any of the costs to the public that the drillers externalize. To be truly FOXworthy fair and balanced there was a brief reference to “many environmentalists” after which only an institutionalized, industrialized “environmentalist” position was offered.
Unconventional horizontal hydrofracturing drilling, to extract natural gas from low-permeable stone formations, is environmentally unsound. The Halliburton developed process focused upon solving the industry’s extraction problem… with absolutely no concern for the environmental costs to others, from the industry’s use of it.
The scale of the drilling (number of wells and hydrofractures required), that’s necessary to extract those myriad remnants of gas so tightly bound up within the stone, will over time have a catastrophic cumulative negative environmental and human health impact… polluting air, ground, and water in this desperate process of extraction intended to maintain our fossil fuel dependancy.
All of the enormous quantity of clean fresh water used in the hydrofracture process is permanently removed from the natural water cycle, because the chemicals added to it cannot be fully removed to change the toxic waste, which the process creates, back into the safe drinking water it was before the drillers abused it.
The massive amount of toxic waste created by the drillers, which they either do not leave in the hole, or (Love Canal) bury at the site, is taken to municipal sewage waste treatment plants, through which the chemicals then pass on to be dumped into our rivers… and eventually come out of our faucets.
Link to Day 2, of NPR’s petro dollared propaganda campaign:
09/23/2009 Who’s Looking At Natural Gas Now? Big Oil
www.npr.org/templates/story/story.php?storyId=113080237
CDOG Response to Day 2:
The nice “small independent company” that developed the new production techniques to rip the last remnants of natural gas from stone, having the small guy innovation which NPR falsely claims beat BIG oil, was… Halliburton!If NPR considers Halliburton to be a “mom-and-pop” operation, then what does it consider to be a beastly overlarge corporation?
Those little guy operators that NPR romantically astroturfed are the private contractor gas driller domestic equivalents, here at home, of what Blackwater is where fossil fuels can be found elsewhere.
National Propaganda Radio’s reporting implies that the remnants of natural gas, which the myriad tentacled energy industry has in recent years been so hazardously ripping from the earth, are ENORMOUS; but then NPR claims they’ve been deposits too small scale to have yet attracted large corporations. If the remnant areas were large corporation considered so profit inconsequential, then why has the Millennium Pipeline been built to and now through those areas? Would the vast matrix of gas drilling rigs and pads, packed close together covering the whole landscape from the Catskills for 350 miles or more all the way across the broad breadth of New York State to Lake Erie, which will be necessary for the industry to successfully unconventionally extract all that natural gas trapped down there too tightly within non-porous stone… be small scale?
NPR cloaks the socially irresponsible decisions of individual landowners in American Dream apparel, romanticizing those who place their communities in long-term nightmare jeopardy to personally short-term profit themselves. Is inviting a dangerous marauding invading occupier into your neighborhood a good neighborly thing to do? Is the energy industry’s economic draft persuading farmers to site chemical toxic waste production facilities on their farms the way a sane society would provide farmers an adequate income? Is embracing toxic waste production the way any sane society would provide farmers their only ability to have the healthcare they’ll need when the extraction chemicals used produce the effects they cause?
Link to Day 3, of NPR’s petro dollared propaganda campaign:
09/24/2009 With Little Clout, Natural Gas Lobby Strikes Out
www.npr.org/templates/story/story.php?storyId=113138252
CDOG Response to Day 3:
By Day 3, NPR’s petro dollared propaganda campaign has become more subtle, providing some seemingly innocuous banter at the end, to reluctantly acknowledge the existence of some environmental “concern” regarding the type of drilling required to get the last remnants of gas from rocks that couldn’t be gotten before.That ripping of gas from stone with the Halliburton hydrofracking process is not something that “might cause some contamination.” It has in the past; it does now; and it will whenever and wherever it is used, regardless of how tight, or tighter the un-enforced regulations are typed upon paper. The hydrofracturing process is the underground equivalent of mountaintop removal. Both of those extraction procedures have devastating environmental impacts, with mountaintop removal’s just being more readily apparent, while hydrofracture of low to non-permeable tight-gas bearing rock is insidious… like the cancers that it produces.
Being corporate media, when NPR turned its attention to the “political reality” it too subtly sporting announcer focused upon the gas lobby not having as much game as the coal lobby. The Waxman-Markey Bill is the product of industry bribery, with the biggest bidding bribers being rewarded. Yes, like a losing coach would, former [in the pocket of the gas industry] Colorado Senator Tim Worth “chewed out” the gas industry players… for being too cleaner than coal, when bribing Congress.
The gas industry is not the energy constituency with “the most to gain and the most to offer.” No! Those with the most to gain are we, The People, and those with the most to offer are the other environmentalists, who urge us to focus on serious conservation first, and rapid deployment of pervasive alternative renewable energy solutions, with the relocalization of energy production being necessary to bring our carbon footprints down to a size we can survive in.
National Propaganda Radio is still maintaining the false dichotomy of needing to choose gas or coal, repeating gas industry favorable claims of “some environmentalists” with those “some” being the institutionalized industrialized “environmentalists” who claim these last remnants of gas, which are so environmentally damaging to extract, are needed as a bridge-fuel to transition away from coal.
However, those “environmentalists” have taken the wrong exit, onto a bridge to nowhere. Gas from low to non-permeable stone is not a bridge to “transition” away from fossil fuels, but rather a desperate means to maintain the energy industry’s profits from our fossil fuel addiction dependence.
This nation has often displayed how quick and vigorously it can exert huge human energy devoted to the murder and mayhem of wars purposefully designed to government spend enormous amounts of money earned by working people to provide obscene profits to the most ruthless few. We would not need to choose only between dirty coal that won’t become clean, and the remnants of gas that’s so dirty when extracted, if we as a nation treated climate change as a problem of truly existential graveness, which it is.
What would some other environmentalists have to say?
We should stop spending trillions of dollars to fight wars over oil resources that are being used up by those wars fought over them. We should claw back the trillion dollars stolen by banksters. We should exert the same highly concerted human energy and ample money distribution, normally provided by this society only when engaged in global war, and direct that enormous effort and money into providing solutions for global survival… and make that transition from fossil fuel dependence to renewable energy independence be completed as fast as possible.
This nation, with the capacity to exterminate all life upon the planet with just a 20 minute war, surely has the capacity — if it can find the will — to make our planet sustainable in the years that is needed to be done, rather than waiting decades until it’s too late… and then can’t be done.
David J. Cyr
Tags: Natural Gas Alliance, NPR
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While T Boone Pickens campaigns for the creation of the Natural Gas Nation, otherwise known as the T Boone-Doggle Corporate State, and politicians with a Green Wish sign on without critical examination, careful investors take a view that’s a little more cautious:
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What Could Go Wrong With Shale Plays
Posted: Oct 09, 2009 12:11 PM by Eric Fox
The industry and investment community is all worked up over the various oil and natural gas shale plays in North America, but little attention is given to what could go wrong with these plays.
The first issue is that not very much drilling has been done in some of the most promising shale plays. Since there is very little development and production history, it is difficult to determine the average estimated ultimate recovery (EUR), initial production (IP) rates and decline curves of wells here. Thus any estimates of the total resource potential are unreliable.
Chesapeake Energy (NYSE:CHK), which has 510,000 acres in the Haynesville Shale, uses an average EUR of 6.50 Bcfe, an IP rate of 14.1 million cubic feet equivalent per day, and a first year decline of 85%. However, the oldest Chesapeake Energy well in the Haynesville Shale is only nine months old, and it is difficult to attribute this data to the entire play.
Experience Matters
On the other hand the Barnett Shale, which has a much longer development and production history than the Haynesville Shale, has a more reliable production and decline curve with which to evaluate the assets of exploration and production companies.
The Marcellus Shale also lacks a long history of development, and thus has the same problem as the Haynesville Shale in regards to the reliability of available data. One unique problem for the Marcellus Shale is its immense size. The shale underlies a huge area in terms of square miles, reaching into New York, Pennsylvania, Ohio, West Virginia, Virginia, Maryland and even New Jersey. Most of the drilling to date has occurred in Pennsylvania, but little is known about most of the other areas.
There is no way to tell currently whether all this acreage will be as productive as the Pennsylvania acreage that has excited the industry. Eventually, the Marcellus Shale will evolve into a core and non-core, or Tier 1, 2 and 3.
Range Resources (NYSE:RRC) is one of the largest players in the Marcellus Shale and has 900,000 acres that are prospective for the Marcellus Shale. Another company that has not moved as far into developing its acreage is Gastar Exploration (NYSE:GST), which has 37,200 net acres under lease. The company plans to drill as many as five wells here by 2010.
Green Protests
Another issue that might cause a problem in the shale plays is the environmental issues associated with hydraulic fracturing, including the use of immense amounts of water and possible pollution when that water is disposed of.
Cabot Oil and Gas (NYSE:COG) recently had two spills of fracturing fluid in the Marcellus Shale that leaked into wetlands and a creek in Pennsylvania. The company was issued a violation notice by the Pennsylvania Department of Environmental Protection for violation of several state laws.
Any permanent restrictive regulation on water use in the high growth shale plays might slow down development by making the permitting process cumbersome, or by making it more expensive to drill.
The Bottom Line
The industry and investors are rightly excited about the large amounts of natural gas in the recently discovered shale plays in North America, but this enthusiasm should be tempered by recognition of potential problems that could erupt. (To learn more, see our Oil And Gas Industry Primer.)
By Eric Fox
Eric J. Fox, is the founder of Brittain Capital Management, LLC., which manages the Alesia Fund, LP., a Value oriented long/short investment partnership. You can read more of his views on investments at his blog – Stock Market Prognosticator. Mr. Fox also publishes a paid investment newsletter. Please visit The Unknown Stock Report for more details.
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From Environment & Energy Daily, 9/30:
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Boxer, Kerry brace for delicate talks as bill emerges today
The decision by Sens. John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) to seek steeper greenhouse gas emissions cuts than their House counterparts drew mixed reviews from senators yesterday, underscoring the challenges the pair will face after unveiling their climate bill today.
. . . . .
“The draft includes new incentives for natural gas producers that were not in H.R. 2454, the sweeping House-passed energy and climate bill, as well as a modest nuclear energy title that Senate nuclear power backers — such as Sen. Lindsey Graham (R-S.C.) — hope to greatly expand.
. . . . .
Plans to include new natural gas incentives drew attention as lawmakers last night began digesting the long-awaited bill.A new “clean energy” provision rewards companies that switch from power sources with higher emissions than the 2007 power sector average — such as coal-fired or oil-fired power plants — to cleaner fuels including gas.
The plan received high marks from Sen. Mary Landrieu (D-La.) who said it is a “positive step.”
“Anything we do to promote natural gas would be a very, very smart thing to do,” Landrieu said. “The leaders are hearing from many different parts of the country how much natural gas is out there.”
Landrieu was among nine senators who sent a letter last week to Boxer lobbying for greater incentives for natural gas. Natural gas producers have been aggressively lobbying senators to win greater incentives for the fuel and have garnered support from some swing votes, including Sens. Michael Bennet (D-Colo.) and Arlen Specter (D-Pa.).
Maybe Kerry, Boxer, Landrieu, et al, haven’t seen this article:
Eric Fox: “What could go wrong with shale plays”
Remember this, when you hear those slick commercials touting decades worth of natural gas from tight shales
or this one:
If 2% leaks, the CO2 impact of natural gas is the same as burning coal
or this one:
Must read: “How Neutral is the Potential Gas Committee?”
or this one:
Analyst: Gas shale may be next bubble to burst
But they should get up to speed. Imagine how mortifying it will be if we’ve switched over to natural gas for much of our energy generation and transportation, but somehow, greenhouse gas levels just don’t drop the way those industry-funded studies and think tanks said they would. Imagine how embarrassing it will be when it turns out so much taxpayer money was spent on infrastructure for natural gas delivery and consumption and then the infrastructure investment cost isn’t even paid off before the gas runs out. Can y’all say T Boone-doggle?
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