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Thursday, May 26, 2016

Keep-It-In-The-Ground Asks for Public Hearing after Forcing Previous Hearing to End Early

by Jackie Stewart, Energy in Depth

Ohio groups with ties to the Keep-It-In-The-Ground movement recently called on the Bureau of Land Management (BLM) to hold more public hearings and extend the time period for public comment in response to BLM’s decision to move forward with leasing in the Wayne National Forest (WNF).
This could not be more ironic considering that these same groups were previously so disruptive at the last public hearing that BLM was forced to shut the meeting down early, negating the entire purpose for public input, and hijacking others from having the opportunity to engage.
Activists throw paper airplanes at BLM representatives during a public meeting earlier this year resulting in the meeting being shut down early.

Why follow the rules when protesting gets the media’s attention?
After hosting not one, not two, but three public hearings, and extending the formal public comment period, the BLM recently released its draft Environmental Assessment (EA), which determined the merits of leasing federal minerals under the WNF.  This 113-page comprehensive document included a National Environmental Protection Act (NEPA) analysis, and assessed the immediate impacts to the forest, as well as potential for long-term impacts, such as potential climate change from oil and natural gas development. The comprehensive assessment by the BLM found that there would be no “significant impact” to the environment to lease federal mineral for the purpose of oil and natural gas development, allowing the process to move forward. As usual, activists immediately cried foul stating the EA is “gobbledegook”, while at the same time arguing that going through the 113-page comprehensive EA is just too time consuming.
According to a recent press release, Fracking Action Network, leader Heather Cantino said,
“We also can’t expect everyone to read the confusing documents and make any sense of them by themselves. We need a public hearing so that the public can share its extensive knowledge of the issues and our various attempts at understanding these confusing and consequential documents with one another, our community, and with our elected officials. We must then have time to write meaningful comments.”
Interestingly, after claiming she “spent eight hours” reading the EA and still can’t “decipher it”, these groups somehow had plenty of time to pull together a media stunt outside of the WNF which included “holding a bag of barnyard manure which they likened to a draft Environmental Assessment in support of the leasing plan.”  They called the media to take pictures of the spectacle, and then sent out this press release complaining about how they were not given enough time to get their act together and provide meaningful public comment.
Photo and Caption by Dennis Powell of Athens News shows protestors outside of a federal building at the Wayne National Forest, “holding a bag of barnyard manure which they likened to a draft Environmental Assessment in support of the leasing plan.”
Activists recycle talking points (yet again)
Crying foul and calling for more public hearings and comment are certainly not new tactics used by anti-fracking groups, and particularly the Keep-It-In-The-Ground groups in Athens, Ohio. In fact, if this most recent stunt seems like de ja vu, it is.
Back in November, EID pointed out that over five years ago this entire matter was debated through a public forum. The BLM hosted several meetings and opportunities for public comment and involvement on drilling in the forest in 2011 and 2012. The meetings were part of the widespread environmental review of the forest plan, which included an extensive comment period. In fact, Heather Cantino, spokesperson for Athens County Fracking Action Network, offered up a letter of protest to the BLM on October 7, 2011 and attended one of these meetings back in September 2012. That meeting was hosted by the Ohio Environmental Protection Agency, the Ohio Department of Natural Resources, the Bureau of Land Management and the National Forest Service and it focused on the environmental review process to allow drilling in the Wayne National Forest. At that meeting (four years ago) Ms. Cantino said, “They haven’t been listening to us for the last six months. The (open house) is just a ploy to once again not listen to the community.”  Fast forward to 2015, and Ms. Cantino again questioned the public notice given to the community, which was advertised in the local paper, and has since been circulated through papers throughout Ohio, including the Columbus Dispatch. Regardless of Ms. Cantino’s claims, the NEPA Handbook, which is the guide the BLM uses for this process, clearly states:
“While some public involvement is required in the preparation of an EA, you have the discretion to determine how much, and what kind of involvement works best for each individual EA. For preparation of an EA, public involvement may include any of the following: external scoping, public notification before or during preparation of an EA, public meetings, or public review and comment of the completed EA and unsigned FONSI. The type of public involvement is at the discretion of the decision-maker. When you need to prepare many EAs for similar projects in a short timeframe, it may be helpful to prepare a programmatic EA to cover those projects and to facilitate focused public involvement.”
In response, the BLM posted notice that they would in fact hold three public meetings and extend the formal public comment period. In response, and just six months ago, activists recycled five years of running talking points by stating, “You have greatly confused our community and thus not provided adequate notice for a meeting to be held in two weeks, for which you have NOT YET provided adequate public notice.”
Fast forward to 2016, verbatim, the same activists are rehashing their same tired arguments. According to a recent press release, the draft EA is too complicated and “confusing” for the public to read. This is statement absolutely incorrect. While the document is in fact comprehensive, it does not require an attorney to decode it. Perhaps Ms. Cantino and her friends should have used the time they spent putting together their most recent horse manure media stunt to actually read the document and submit public comment. This however, is far too much work for the activists – it’s much more fun to protest and put out press releases criticizing a federal agency.
One would think these groups would start at least having some originality to their strategy, as this same story continues to play out all across the country. Just like we are once again seeing in Ohio, KIITG groups “demand” more opportunities for public hearings and engagement and when they receive that opportunity they instead make a mockery out of the process, turning a hearing into a circus and a lengthy public comment period into nothing more than additional time to pull media stunts and churn out press releases.
These exploits prove that when sound science is not on your side, the activist have no choice but to revert to theatrics and emotional debates over the merits of oil and natural gas development. Hopefully the BLM will continue to make decisions regarding the Wayne National Forest based on science and listen to the interested parties who have actually taken the time to submit meaningful comments, discuss the process, and ask real questions about the pending draft Environmental Assessment over reckless activists who disregard civility and facts to achieve their agendas.
Copyright Energy in Depth.  Reprinted with permission.  View original article here:

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Valourec Posts $326 Million First Quarter Loss

From Business Journal Daily:
Hit hard by the collapse of the global oil and gas market, pipe and tube manufacturer Vallourec posted a net loss of $326 million during the first quarter of 2016, the company said Tuesday. 
Vallourec, which operates Vallourec Star in Youngstown, said its revenues fell 36.2% to $771.9 million, brought on by what the company said were record low volumes. 
The company manufactures oil country tubular goods, or OCTG, pipe for mostly the oil and gas industry. Drilling activity and rig counts are substantially down since October 2014, when commodity prices began to tumble. 
Oil companies have since cut spending and capital investment on their drilling programs, which has put additional pressure on suppliers such as Vallourec.
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Tuesday, May 24, 2016

05/24/16 Links of the Day: More Bankruptcies, Ohio Court Battles Continue, and More

Youngstown Vindicator:  Natural Gas-Fueled Power Plant in Lordstown Will Be Showpiece   -   "The state-of-the-art natural gas-fueled power plant that’s moving forward in Lordstown isn’t just a significant chapter in the Mahoning Valley’s emerging comeback story. It’s also a powerful symbol of the future of..."

Press release:  Stone Energy Corporation Announces NYSE Notice of Non-Compliance   -   "Stone Energy Corporation (NYSE: SGY) today announced the receipt of formal notice of non-compliance with the New York Stock Exchange ("NYSE") market capitalization listing standard. On May 17, 2016, we were notified by the NYSEthat our average global market capitalization has been less than $50 million over a consecutive..."

Press release:  Halcón Reaches Agreement in Principal with Stakeholders Regarding a Comprehensive Balance Sheet Restructuring   -   "Halcón Resources Corporation (NYSE:HK) ("Halcón" or the "Company") today announced the Company has reached an agreement in principal on terms of a plan to restructure its balance sheet (the "Restructuring Plan") with select holders of its 13.0% 3rd Lien Notes due 2022 ("3L Notes"), its three tranches of senior unsecured notes comprised of..."  Appellate Court Backs North Royalton's Fight Against Mandatory Pooling in Driller's Plan to Frack for New Well   -   "A state appellate court on Tuesday sided with North Royalton in a three-year fight to thwart an oil and gas driller who wants to frack for a new gas well in the city. The 10th District Ohio Court of Appeals agreed with a lower court and the Ohio Oil and Gas commission that..."

Press release:  Nine Energy Completes 124-Stage Well in Utica Shale   -   "Nine Energy Service, Inc. (Nine) successfully completed 124 perforated stages in an 18,544 ft. lateral (27,034 ft. TMD) in Guernsey County, Ohio for Eclipse Resources, a premier independent E&P company in the Appalachian Basin. In one of the most complex wells ever completed by either company, Nine's Wireline Division worked directly with Eclipse to..."

The Daily Caller:  ‘Keep It In The Ground’ Won’t Save The Environment – Or Your Budget   -   "Most of us paid a lot less in utility costs to keep warm this past winter than we had in previous years. We also drove more miles than ever – also for a lot less – courtesy of bottom-of-the-barrel fuel prices. Both are shining examples of how America’s once-in-a-generation energy revolution – the byproduct of..."

Seeking Alpha:  Chesapeake Management Appears Like It Is Rolling The Boulder Uphill   -   "When industry conditions are tough, that is when shareholders find out how good the company management really is and whether or not the experience on all those resumes of senior management is really worth anything. Chesapeake Energy Corp. (NYSE:CHK) finished the first quarter touting several accomplishments..."

Press release:  Constitution Pipeline Challenges Decision by New York State to Block Federally Approved Pipeline   -   "Constitution Pipeline Company, LLC today announced that it has appealed the New York State Department of Environmental Conservation’s (NYSDEC) refusal to grant the company’s request for a Section 401 Water Quality Certification under the Clean Water Act. The appeal was filed with the United States Circuit Court of Appeals for the Second Circuit and contends..."

Kallanish Energy:  EPA Violating Supreme Court Hold, GOP Charges   -   "Top Republican lawmakers have accused the Environmental Protection Agency (EPA) of violating a Supreme Court order to stop enforcing its climate change rule for power plants, Kallanish Energy understands. In a letter to the agency, majority members of the House Energy and Commerce Committee said the EPA’s actions since the February stay of the Clean Power Plan are contrary to the 5-4 court..."

ACFAN:  Activists to Feds: Extend Comment Period and Hold Public Hearing on Fracking the Wayne   -   "Organized by Athens County Fracking Action Network (ACFAN), representatives of eight grassroots environmental groups held press conferences on Wednesday, first at Wayne National Forest Headquarters and later in downtown..."

Herald Star:  Officials Gather Ideas to Enhance Utica Shale Academy   -   "As the Utica Shale Academy enters its third year, officials have begun looking at ways to expound programs and offerings to enhance education for a future work..."

Dallas Morning News:  Chesapeake, Total to Pay $52.5 Million to Settle Barnett Shale Royalty Disputes   -   "Oklahoma-based Chesapeake Energy and Total E&P USA agreed Monday to pay $52.5 million to 13,000 people who claimed their royalties have been underpaid for leases in the Barnett Shale. As part of the agreement, Chesapeake will provide $29.4 million upon court approval of the settlement and another $10 million in..."

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Monday, May 23, 2016

American Energy Partners Lays Off Workers, Announces Plans to Shut Down

From News OK:
American Energy Partners executives on Wednesday began taking steps to close the business, the company's leadership team confirmed. 
Nearly half the Oklahoma City company's 100 employees were laid off Wednesday, and the remaining employees have begun closing the company through a process expected to take two to four months, according to a source knowledgeable of the situation. 
American Energy Partners' actions Wednesday follow a series of bankruptcies and layoffs in the oil and natural gas industry as nearly two years of low prices have reduced revenues and led to budget cuts throughout the oil patch. 
American Energy Partners and Aubrey McClendon in November 2015 were involved in an attempt to raise up to $2 billion, but scrapped the effort after just $11.2 million was raised.
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No New Permits for Utica Shale Last Week

Permitting in Ohio's Utica shale once again came to a standstill last week, with no new permits listed on the Ohio Department of Natural Resources weekly report for the second time in the last four weeks.  The Utica rig count fell from 12 to 11.  The cumulative total of permits issued now stands at 2,175, with 1,743 wells drilled and 1,320 now producing.

View the report below or download it by clicking here.

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New Report: Shale Development Boosting Local Government Revenues

by Randy Hildreth, Energy in Depth

Researchers at Duke University are out with a new study finding that shale development has been boosting public revenue for local governments across the country. As a news release announcing the report puts it:
“The recent surge in oil and natural gas development has been beneficial for most local governments in the United States, according to new findings by two Duke University researchers.”
The researchers spoke with “more than 200 local government officials in 61 counties and 78 municipalities” where shale development has been taking place. An example of their findings can be seen in a case study on Colorado’s Piceance Basin released alongside the report that shows dramatic increases in economic activity and public revenue in shale regions. In particular, researchers show how the City of Rifle on Colorado’s Western Slope saw an amazing spike in public revenue and economic activity as shale development in the area increased. From the case study:
“Tax revenues grew very quickly from 2002 to 2008, the peak of regional natural gas development, rising from $2.6 million to $12.4 million, led by sales taxes. A variety of capital grants, including DOLA grants from severance tax and federal mineral lease revenues, added an additional $11.6 million in 2008 (Rifle Department of Finance 2002-2013). Overall revenues grew from roughly $10 million in 2002 to a peak of $34 million in 2008.” (Emphasis added)
And along with the increased tax base, it is clear from the case study that town officials see oil and natural gas development as having a lasting impact. Also from the case study:
“Overall, the city manager describes the surge in natural gas development in the mid-2000s as a net benefit for Rifle’s fiscal health, as new businesses and buildings have boosted the city’s tax base far above the levels of the early 2000s.”
This latest research is part of a multi-year “Shale Public Finance project” from the researchers in an effort to understand how recent increases in oil and natural gas development are impacting local governments. Other “key findings” include:
  • In most states where local governments levy property taxes on oil and gas property, increased industry activity has led to rapid increases in property tax receipts, especially for counties. In states where local governments are not allowed to levy taxes on oil and gas property (MT, ND, and PA), allocations of state-collected taxes/fees on production or drilling activity have been the most significant new source of revenue.
  • Population growth and economic activity associated with the industry has supported or boosted sales tax revenue for many local governments, especially municipalities. Some local governments have leased county-or city-owned land for oil and gas production, generating large lease revenues.
The report does explain that not all local governments received net benefits.  That’s because some were not able to keep up with the pace of infrastructure improvements needed to sustain growing populations and demand for services. But it is clear from the Colorado case study that some of the local officials they spoke with believe that the overall benefits of shale development offset the challenges.  From the Colorado case study section discussing Grand Junction:
“There have been substantial oil- and gas-related costs for the city, but local officials estimate that these costs have been more than offset by oil- and gas-related revenues. For example, heavy trucks associated with oilfield service firms have caused damage to some city streets, but DOLA energy impact grants coupled with industry-related tax revenues have been sufficient to manage these costs. Grand Junction also increased its spending on municipal buildings, making upgrades to city fire and police buildings that were in need of repair. Officials state that these upgrades would not have been possible without the new revenues generated by the oil and gas industry.” (Emphasis added)
The same is true in the Bakken region where another case study released with the report showed that local officials continue to see benefits of increased oil and natural gas development in that region as well. From that case study:
“When we returned to Dunn County in late 2015, demands related to Bakken development continued to be substantial. However, the overall fiscal situation had improved markedly, and a variety of local officials unanimously agreed that the county was in stronger fiscal condition than before Bakken development began, and far stronger than during our 2013 interviews.”
As EID has reported many times before, oil and natural gas development in deep shale formations has been an economic driver for local governments, providing an important revenue stream for rural communities to fund community improvements.
So while activists fly in to states like Colorado and elsewhere in their attempts to block federal mineral lease auctions and  stage protests and publicity stunts, local governments and the citizens who call these communities home are reaping the benefits of shale development.
Copyright Energy in Depth. Reprinted with permission. View original article here:

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Thursday, May 19, 2016

Appalachian Basin Has Shifted from Big-Time Natural Gas User to Big-Time Producer

From the Akron Beacon Journal:
In 2010, the Marcellus Shale in Pennsylvania and West Virginia was dubbed the Beast in the East by analysts because of its impressive natural gas treasure. 
In 2013, Ohio’s neighboring Utica Shale was described as Son of the Beast in the East by analysts because of its growing natural gas potential. 
The growth of drilling in the Marcellus-Utica shales and the resulting natural gas boom are changing the American energy picture, even though shale drilling is slowing down across the United States due to low commodity prices. 
Since 2012, Ohio, Pennsylvania and West Virginia have accounted for 85 percent of U.S. shale gas growth, according to the U.S. Energy Information Administration. Shale gas today represents two thirds of U.S. natural gas production, the agency reported recently.
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Wednesday, May 18, 2016

Drillers Pondering the Proper Timing and Pace for the Return of Rigs

From Powersource:
After several quarters of talking about budget cuts and laying down drilling rigs, antsy oil and gas analysts are looking forward to some excitement. How quickly can companies ramp up in response to better commodity prices, they wonder. 
The question, asked at numerous company earnings calls over the past several weeks, belies several assumptions: that prices are headed for a meaningful recovery and that the natural response to that recovery is to ramp up quickly. 
It’s one of the most popular questions thrown at David Khani, CFO at Consol Energy Inc., and one he approaches with caution. 
“That commodity curve could go crazy again if everybody starts drilling again,” Mr. Khani said. “You have to be careful about how fast you would ramp up.” 
Cecil-based Consol, which laid down all of its rigs last year, looks at commodity prices over a three-year horizon, he said. 
“You have to feel good about the sustainability of that curve,” Mr. Khani said, “or you have to be willing to hedge it.”
The whole article can be read by clicking right here.

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