Maine Oil Dealers Issue Warning to Governor
Maine governor Paul LePage wants to slash the state's heating use in half by 2014. The proposal has sparked concerns among heating oil dealers whose livelihoods could be threatened by the move. (image: blogspot.com)
Heating oil dealers have hit back at proposals by Maine Governor Paul LePage to slash the state’s reliance on fuel oil by 2014.
Maine is the nation’s leading heating oil state, with around 80 percent of its homes reliant on fuel oil as a primary heating source. But LePage wants to cut Maine’s heating oil consumption in half to around 40 percent and expand the use of natural gas.
The proposal reflects volatility in world oil prices and the drain high heating oil costs are creating on state finances and home budgets.
The Maine Energy Marketers Association (MEMA) recently met with LePage to discuss his proposal. sunjournal.com reports.
Lawmakers and energy analysts have questioned whether LePage’s goal is realistic, saying the initiative faces long odds. It would require costly new infrastructure development, gas piping to feed those not currently served by natural gas networks and home conversions.
MEMA president and chief executive Jamie Py said his group was concerned that LePage was favoring an in-vogue energy source at the expense of established oil dealers that had served the state’s residents diligently for decades.
A MEMA statement said it had taken “offense that our free-market governor would be encouraging the state to pick winners and losers in the energy market.” The group asked LePage to tread carefully when making statements about converting homes and businesses from oil to natural gas. Such rhetoric was “detrimental to our businesses and our customers.”
A spokeswoman for LePage, said oil dealers’ concerns were understandable. The governor was encouraged that MEMA wanted to help promote energy efficiency. However, LePage was committed to giving consumers more energy choices. He believed the market would move away from oil and seek cheaper alternatives because it was too costly.
Py acknowledged oil prices were currently at high levels but said the governor should be wary of betting too heavily on natural-gas expansion.
“We understand that natural gas is less expensive at the moment. But those commodities bets are wrought with risk.”
The state is also understood to be considering the purchase of hydro electricity generated in Canada to meet its future energy needs. Drafting a new energy policy has been a priority for the governor, who believes lowering costs is critical to luring businesses to Maine. LePage hopes to unveil an energy bill next session.
Heating Oil Dealers Out-Gunned By Natural Gas Lobbyists
Natural gas lobbyists spent more than $10 million in the last two years lobbying law makers on Capitol Hill. (image: topnews.in)
Heating oil dealers are being “out-spent” and “out-manned” by powerful natural gas lobby groups trying to influence lawmakers, a heating oil industry group warns.
Figures reported to the US Congress under the Lobbying Disclosure Act show natural gas lobby groups spent more than $10 million on lobbying activities in 2009 and 2010, the New England Fuel Institute (NEFI) reported. Heating oil dealers meanwhile spent less than $2 million in the past two years lobbying Capitol Hill, with the propane industry spending another $2 million.
The figures come amid national controversy over gas industry hydraulic fracturing – or “fracking” – a process by which chemically-laced fracking solutions are blasted into the ground to extract natural gas. Recent studies have discovered high radiation levels, chemical carcinogens and toxins in drinking water sources near drilling sites across the US. And a Duke University study into fracking contamination has just revealed potentially hazardous concentrations of methane in water wells within half a mile of some gas drilling sites.
There are now growing calls for new regulations to safeguard people’s health and the environment. Natural gas is the most widely used home heating fuel in the US.
NEFI president Michael Trunzo said heating oil dealers were struggling to match the political clout of powerful natural gas lobbying interests. “The home heating oil industry isn’t just being outspent - it is also being outmanned.”
In addition to lobbying expenditure, natural gas interest groups employed more than 50 lobbyists, Trunzo said. The heating oil sector employed just 12.
Only last month it emerged that Wall Street financial interests have spent nearly $30 million this year alone lobbing Washington on new regulations that could reign in speculative trading, which many commentators blame for artificially driving up the price of oil.
“NEFI members may be reading these figures with astonishment and perhaps a bit of discouragement,” Trunzo said. “Considering that the industry is comprised of mostly small business, family-owned and operated companies rather than large foreign-owned utilities, it shouldn’t be as much of a surprise. Perhaps these numbers will motivate more members to get involved in our efforts in Washington,” Trunzo added.
Scores of heating oil dealers are expected in Washington this week for the industry’s annual “Day on the Hill” rally, hosted by the Petroleum Marketers Association of America.
Like US motorists and homeowners, heating oil dealers are struggling with soaring global oil costs, sparking calls for the President Barack Obama to tap the strategic petroleum reserve and crack down on Wall Street commodity speculators.
Trunzo encouraged NEFI members and supporters to get involved in the grassroots effort.
Given our large numbers and the powerful message we have for Washington on our pursuit of a cleaner, renewable and ultra-efficient heating fuel, the more
folks that speak up the more Washington will listen.
Oscar-Nominated Gasland Makes Aggressive Case Against Hydraulic Fracturing
Gasland was released to the public in early 2010. (image: awardsdaily.com)
A natural gas industry representative testifies in a congressional subcommittee hearing in the opening scene of Gasland that North America sits on a “virtual ocean of natural gas.” The particulars, or more specifically the risks, of how industry will extract that gas are the subject of the film by Josh Fox that on Tuesday received a 2010 Academy Award nomination in the Documentary category.
Fox is the director and producer of the film, but also its first subject. As he explains, the idea for the project was born of an offer he received from a natural gas drilling company to lease his family’s property in rural Pennsylvania’s Delaware River Basin for drilling, offering $4,750 an acre for a total of over $100,000. The offer prompts Fox to launch his own investigation into the recent rush to tap huge natural gas reserves in the Northeast and around the country, and document his findings.
To be sure, his findings on natural gas drilling (at least those presented in the film) are entirely negative. Fox takes along his camera as he visits families in rural Pennsylvania, Colorado, Wyoming, Texas, and Louisiana who allowed gas drilling on their properties and later found their water wells to be contaminated by natural gas and other harmful chemicals. In some cases, the contamination is so bad that affected residents can light the water from their kitchen tap on fire–certainly the film’s most unforgettable image. The central issue in these contaminations and the focus of the film is the drilling method known as hydraulic fracturing or hydrofracking, which involves blasting millions of gallons of water and chemicals deep underground to free natural gas trapped in rock. The opinion of all of the leasing landowners that appear in the film, and of Fox himself, is that hydrofracking is directly responsible for the contamination of their water and, in some cases, serious health problems. This opinion is the main point of contention over hydrofracking that is covered in the film and being fiercely debated today across the country. Landowners who have experienced contamination and environmentalists vehemently argue that unchecked fracking can lead and has led to tainted water, which the gas industry strongly denies, citing a lack of hard evidence linking fracking to contamination. It should be noted that if Fox encountered any landowners who signed drilling leases and did not experience any problems with their water or air quality, he did not include them in the film’s final cut.
Gasland primarily consists of an in-depth exploration of the anti-fracking side of the debate, supplementing conversations with sick and frustrated landowners with results of water tests and comments from scientists that point to a strong connection between hydrofracking and groundwater contamination. The one-sided narrative is a product of both Fox’s own opinion and the absence of any interviews with drilling industry representatives, who consistently stonewall Fox’s requests for comment, as the director illustrates by including a seemingly endless loop of rejections, referrals, and automated messages from gas companies. Perhaps taking some lessons from the films of liberal firebrand and documentarian Michael Moore, the gas companies now apparently know better than to appear on camera for an independent documentary.
Though Fox’s direction in Gasland is clearly subjective, it never goes as far as Moore’s now-familiar scolding, hyperbole, and name-calling. Early on in the film, Fox takes up the position of everyman, maintaining in his narration and conversations with his subjects that he is simply a regular guy with a camera whose interest in hydrofracking and its effects were sparked by potential drilling in his back yard. Fox’s voice, heard for most of the film in voiceover, is a low, even sound that borders on monotone and conveys little emotion. Much of the video footage in the film is shot in an amateurish style with grainy picture quality and shaky framing, leaving the distinct impression that Fox shot much of the movie on his own with no outside help. Through the film, Fox also presents himself as a lover of nature, and strategically places beautiful shots of American landscapes (with an emphasis on streams and rivers) to remind viewers what is at stake in the hydrofracking debate. Fox rounds out his “normal guy” image with a banjo, that deeply American instrument that conveys bone fide folksiness in a way few other objects can. He introduces the banjo with black-and-white footage of folk hero Pete Seeger strumming away as he sings “This Land is Your Land” as he describes Seeger as a leader of a 1972 effort to remind New York City residents to care for the Upper Hudson Valley (now a potential gas drilling site), as it is the source of all the city’s drinking water. Fox’s banjo also figures prominently in the image that defines the film, a photo of Fox picking at the instrument while wearing a baseball cap and bulky respirator on a Wyoming gas field with two drilling rigs in the background.
While Gasland doesn’t exactly produce the smoking gun that would swing the balance of power away from gas companies in the hydrofracking debate, it certainly makes a strong case for closer scrutiny and increased government oversight of the practice. Perhaps the most unsettling fact relayed in the film is the exemption of oil and gas companies from regulation by the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and other environmental laws under the Energy Policy Act of 2005. This so-called “Halliburton loophole” (Halliburton was the corporation that pioneered new fracking techniques now being used by several American companies) makes it difficult for government agencies or anyone else to uncover exactly which chemicals are used in fracking operations and therefore even harder to make conclusive connections between hydrofracking and well water tainted by chemicals. Perhaps most disturbing, the exemption carves a large hole in the gas industry’s argument that hydrofracking has never contaminated water supplies—if that were true, why would the exemption from environmental laws protecting drinking water be necessary? At a Congressional subcommittee hearing that closes the film, Congresswoman Diane Degette (D-CO) puts this question to an industry representative, who takes pains not to give a direct answer. That denial, coupled with accounts from landowners with tainted water of gas company employees and hired researchers who had said their water was safe refusing to drink the water in question, constitute the sharpest indictment of the gas drilling industry presented by the film.
Because of its strong anti-fracking point of view, Gasland has come under fire from the gas industry and hydrofracking proponents for being misleading and unfair. Whether or not those criticisms are warranted is of course a matter of opinion, but there is no doubt that the film, through its long television run on HBO, its availability for DVD rental, and its recent Oscar nomination, has already succeeded in alerting millions of previous oblivious Americans to the controversy over hydrofracking. It’s also safe to assume that Gasland played a major role in a surge of hydrofracking opposition that brought about the ratification of a one-year ban on the most invasive form of fracking in New York State in December.
Despite the loads of heart-wrenching bad news presented in Gasland, the film ends on a somewhat optimistic note, hinting that, although damage has already been done by hydrofracking, informed citizens (specifically those who have just watched the film) have the power to stop irresponsible drilling practices and end the threat they pose to pristine natural environments and sources of drinking water across America.
For more information on the film, visit the Gasland website.
For more information on hydraulic fracturing, check out the HeatingOil.com archives.
Gov. Paterson Takes Middle Road in NY Hydrofracking Debate with Executive Order
New York Governor David Paterson issued an exeuctive order over the weekend to replace a bill that he belived regulated natural gas drilling operations too broadly. (image: nypost.com)
On November 30, the New York State Assembly approved a measure to place a moratorium on all new natural gas drilling operations in the state until next spring. The bill was similar to one passed by the New York Senate in August, and therefore only needed the signature of Governor David Paterson to become law. Paterson put off taking action on the bill until just before his December 13 deadline, deciding over the weekend to veto the bill and enact a narrower ban on hydrofracking through an executive order, the AP reported on Sunday.
Patterson’s action carved a middle path between the positions of environmental groups, who supported the broad moratorium ratified by the senate, and oil industry and other pro-drilling groups who claimed the ban would result in the loss of thousands of jobs. Pro-drilling groups and a handful of New York politicians called the legislation passed by the Assembly excessive because it would have not only banned deep horizontal drilling that’s been linked to water contamination, but would have also banned shallower vertical drilling operations that have been status quo in the industry for years and are not known to threaten water sources. Paterson’s veto of the bill eased the economic concerns of drilling proponents by ensuring vertical drilling operations could continue in the state. To address the environmental and health concerns posed by deeper horizontal hydrofracking operations, Paterson separately enacted an executive order that places a moratorium on “high-volume, horizontal hydraulic fracturing” until July 1, 2011, the Albany Times-Union reported on Saturday.
Both sides of the hydrofracking debate expressed satisfaction with Paterson’s decision. However, a coalition of environmental groups warned that the executive order contains a “loophole,” and urged incoming governor Andrew Cuomo to address it. The coalition pointed out that it was a cluster of poorly drilled vertical wells used for hydraulic fracturing that caused serious water contamination in Dimock, Pennsylvania, and claimed vertical wells permitted under Paterson’s order could threaten New York’s drinking water.
To be sure, the fiery debate between environmental groups and the oil and gas industry over the safety of hydrofracking in all its forms will rage on. But as that debate plays out and both the New York State and US environmental authorities continue to analyze the practice, the riskiest form of fracking will not be seen within New York’s borders for at least seven months.
NY State Assembly Approves Temporary Ban on Hydrofracking
A sign protesting hydraulic fracturing created by anti-fracking group NY Residents Against Drilling. (image: nyrad.org)
Environmentalists and others opponents of hydraulic fracturing (hydrofracking) in New York State notched a victory Monday night when the Assembly passed a bill that would implement a six-month ban on the practice, the New York Times’ Green blog reported on Tuesday.
The Assembly approved the bill by a vote of 93 to 43 as part of a marathon legislative session that ended at 4:00 Tuesday morning. The bill approved by the Assembly is similar to the moratorium bill approved by the New York State Senate in August, and will become law if signed by Governor David Paterson. The bill would place a ban on the use of hydraulic fracturing in the extraction of natural gas until May of 2011.
Hydrofracking is a method used in natural gas drilling operations that involves blasting chemical-laden water deep underground to break up rock formations and free the gas they contain. Following the discovery of massive natural gas deposits trapped beneath the Marcellus Shale formation (an underground bed of shale that stretches across much of the Northeast), hydrofracking as been increasingly employed by drilling companies. In certain areas, such as the town of Dimock in Northeastern Pennsylvania, residents living near hydrofracking sites have reported contamination of drinking water that has caused illness in people and animals. The threat of drinking water contamination is the leading concern expressed by fracking opponents.
The moratorium on hydrofracking in New York state is aimed at giving the state’s Department of Environmental Conservation (DEC) enough time to complete its ongoing study of the effects of the practice and set new guidelines, if necessary. But it is unclear whether or not the DEC’s study will be complete by the end of the proposed ban in May. According to the Times’ Green blog, “The department is not likely to come up with regulations governing drilling on the Marcellus Shale before May, some state officials said.”
Another issue with the proposed moratorium, as detailed by cityhallnews.com, is that its broad language would also halt shallow vertical hydrofracking operations, which pose less of a threat to water supplies than does deeper, horizontal fracking. Critics say that the bill’s overreach could stop safe drilling operations and cost Upstate New York, where most of the drilling is currently underway, thousands of jobs.
Despite the bill’s alleged flaws, anti-fracking groups and individuals are celebrating. From the Times:
“This is the first time any state has ever taken this kind of action to protect the health and safety of its residents from the consequences of gas drilling,” said Kate Sinding, deputy director of the New York Urban Program at the Natural Resources Defense Council. “It sends a powerful message that New Yorkers don’t want new fracking here unless the industry proves it can be done safely.”
Governor Patterson has not indicated whether or not he plans to sign the bill, but said last week that fracking opponents had made a strong enough argument against unchecked drilling “to thwart us from going forward at this time,” the Wall Street Journal reported.
Halliburton Will Disclose Hydrofracking Chemicals
Energy services company Halliburton has decided to publicly list the chemicals it uses in hydraulic fracturing. (image: halliburton.com)
Halliburton, a leading employer of hydrofracking, will publish all of the chemicals it uses in the drilling process next month, a company executive announced on Friday. The oil and gas industry news source upstreamonline.com reported the announcement on Friday, which was made at a technology summit in Houston. Halliburton’s announcement is the latest development in the controversy over hydraulic fracturing, the natural gas drilling method that involves injecting chemical-laced water and sand deep underground to free natural gas reserves trapped beneath beds of rock. Following the discovery of massive natural gas reserves beneath the Eastern US’ Marcellus Shale formation invited a surge in the use of hydrofracking, the energy industry and environmental advocates have had been engaged in a heated back and forth over the practice, with environmentalists citing threats to drinking water supplies and drillers insisting that the method is completely safe.
Halliburton’s plan to disclose all of the chemicals used in hydrofracking is a somewhat surprising about-face on the issue—the company (and other gas drilling companies) had long resisted such disclosures, claiming that chemicals constituted valuable trade secrets. But after other fracking companies Chesapeake Energy and Range Resources recently disclosed the chemicals they utilize—which include toxic substances like benzene—Halliburton will attempt to boost its public image by becoming more transparent. The move could be especially valuable to the company’s reputation, considering that the disclosure of hydrofracking chemicals is a central demand of many fracking opponents. Following its announcement, Halliburton’s US Technology Manager, Richard Logan, confirmed that the disclosure decision was largely a strategic move to win the public relations war over hydrofracking as the issue gains wider visibility. He told upstreamonline, “The whole effort is all about educating the public.”
The effort by Halliburton and other fracking companies could also be about anticipating imminent regulations from the federal and state governments, which would likely include chemical disclosure requirements. Last week, Pennsylvania’s Environmental Quality Board took the first step toward enacting stronger regulations of hydraulic fracturing, and the proposed regulations include a mandate for full disclosure of chemicals used.
According to Logan, Halliburton’s disclosure will be published on a new company website on November 15. While the action will likely be well-received by environmentalists and other parties wary of hydrofracking, it will do little to reduce the heat on the simmering conflict over the process, which will no doubt continue until the results of a comprehensive EPA investigation into the technique give a clear picture of its dangers and new laws resulting from the EPA’s findings are on the books.
Pennsylvania Considering New Hydrofracking Regulations
This natural gas drilling rig working the Marcellus Shale formaton in Pennsylvania could be under new rules if state agencies approved proposed updates to current regulations. (image: theenergycollective.com)
State authorities in Pennsylvania, the site of scores of drilling operations extracting natural gas from the Marcellus Shale formation, are considering new regulations on gas drilling. The Associated Press reported on Tuesday that the state’s Environmental Quality Board passed a proposal to update existing regulations governing gas drilling. The regulations referred to in the proposal cover well construction and water use—two of the most controversial aspects of hydraulic fracturing or hydrofracking, a drilling technique that involves blasting chemical-laced water into underground rock formations to free trapped gas. Some landowners in Pennsylvania, particularly in the northeastern town of Dimock, have claimed that nearby hydrofracking operations have contaminated their well water. The drilling industry has continuously denied that hydrofracking poses any danger to local water supplies, and repeatedly points to the lack of scientific evidence linking the process to drinking water contamination. Although hydrofracking has been used in oil and gas drilling for years, recent advancements in the technique have allowed drillers to reach much deeper in search of fossil fuels, which opponents say places underground water tables in danger of contamination. John Hager, head of the Pennsylvania Department of Environmental protection, told the AP, “In many ways, these rules are long overdue because they are addressing problems we experienced even before the first Marcellus well got here.”
Although the proposed updates to drilling regulations would apply to all drilling operations in the state, they are clearly aimed at addressing the problems that have arisen around hydrofracking, as the AP summarizes:
The regulations would lower the maximum allowable well pressures, raise standards for well cement and pipes, and require drilling companies to restore water supplies they pollute. They also would require drilling companies to report waste volumes electronically and to report the chemicals used in each well.
The reporting of chemicals used in the hydrofracking process has been another major bone of contention in the hydrofracking debate. Those suspicious of hydrofracking’s environmental safety have repeatedly called for drilling companies to disclose which chemicals are used in the process, a request that’s been largely denied by the industry, which claims such disclosures would amount to the publication of valuable trade secrets.
If approved by other state agencies, the proposed regulations would change how gas drilling is done in Pennsylvania. But the news that observers on both sides of the hydrofracking debate are waiting for are the final results of a comprehensive Environmental Protection Agency investigation of the practice, which cold lead to the enactment of nationwide regulations or even an outright ban on hydrofracking. The EPA is expected to complete its study and release its findings in late 2011.
In August, the New York State legislature approved a statewide moratorium on hydrofracking pending the results of the state Department of Environmental Conservation’s review of the technique.
With many state and federal investigations and policy proposals in the works, it’s safe to say that hydrofracking regulations will continue to be a hot-button issue throughout the Marcellus Shale region for months and probably years to come.
Mark Ruffalo Appears on Rachel Maddow to Discuss Hydrofracking
Mark Ruffalo discusses his concerns over hydraulic fracturing MSNBC's Rachel Maddow Show. (image: msnbc.msn.com)
Film actor and director Mark Ruffalo is fast becoming the face of the growing concern over the controversial drilling method known as hydraulic fracturing (hydrofracking). A resident of upstate New York (in the Delaware River watershed), Ruffalo first spoke out against the dangers hydrofracking poses to surrounding water supplies as part of a highly publicized demonstration at the State Capitol in Albany two months ago. The cause he was supporting at the time, a statewide moratorium on hydrofracking, became state law a few weeks later. But the practice, which involves injecting water laced with chemicals deep underground at extremely high pressure, continues throughout the Northeast as gas and oil companies race to tap into the huge natural gas reserves trapped beneath the Marcellus Shale formation.
Apparently, winning a temporary end of hydrofracking in his home state did not bring an end to his activism on the issue, as he appeared Monday night on MSNBC as an interview subject on the Rachel Maddow Show. During the interview, Ruffalo touches on what the drilling method is and expresses his concern over how hydrofracking threatens supplies of safe drinking water wherever it is undertaken. He tells Maddow that his activism began because his home community could be affected by fracking, but that it was further motivated by what he saw and heard when visiting other communities that had already been affected by the practice. While visiting the hydrofracking site of Dimock, Pennsylvania, Ruffalo said, he found “people who had had their wells poisoned” and was struck by how “there was no one backing these people up.”
Undoubtedly, Ruffalo’s goal is to bring the issues surrounding hydrofracking to the national stage, and found an appropriate platform in the progressive Maddow’s show. The interview seems aimed at educating Americans who had not previously heard of hydrofracking or its risks and introduce Ruffalo as the leading (or at least most visible) pro-environment voice on the issue. Although he did speak briefly about the economic hardship facing farmers in the rural areas where hydrofracking is set to take place, he did not get into the finer details of the controversy, such as the stubborn insistence by drilling companies that fracking is and always has been completely safe. However, Maddow did draw an interesting connection between the hydrofracking debate and concerns over the use of chemical dispersants to combat the BP oil spill in the Gulf of Mexico. In both cases, because the specific chemicals used in dispersants and fracking additives are regarded as “trade secrets” owned by corporations, they do not have to be disclosed to any individuals or government agencies.
Mark Ruffalo has clearly succeeded in spreading the word about his cause to an audience outside New York State and outside the Northeast. It’s a good bet that with high-profile allies like Rachel Maddow, he will continue to talk about hydrofracking where and whenever he can, continuing to inform Americans who think that hydrofracking is nothing more than a mispronounced curse word.
In the meantime, the US Environmental Protection Agency (EPA) will continue to gather data and input from citizens and corporations in its comprehensive study of hydrofracking. As noted at a New York City council meeting on the subject in August, the EPA report is expected to be completed some time in 2012. The EPA’s findings and the fate of a hydrofracking regulation bill (“the FRAC act”) currently under consideration in Congress will likely be the two deciding factors in a final national policy on hydrofracking.
Watch the Rachel Maddow’s complete interview with Mark Ruffalo on the MSNBC website.
Cause of Fatal Northern California Natural Gas Explosion and Fire Still Unknown
Emergency responders and local residents struggled to contain the inferno sparked by a natural gas explosion in San Bruno, CA on Thursday. (image: AP via gulfnews.com)
On Thursday evening, a natural gas pipeline explosion in the San Francisco suburb of San Bruno ignited a massive fire that killed at least four people, injured dozens of others, and leveled 37 homes. Six days later, the exact cause of the explosion is still unclear.
According to the Los Angeles Times, the explosion sent a 28-foot length of 30-inch diameter pipe flying 100 feet through the air and left a crater 167 feet long. Heat from the resulting fire was intense enough to crack the windshield of a fire truck and rupture the local water main, forcing firefighters to stretch hoses from working hydrants hundreds of yards away. First responders on the scene originally believed that the explosion and fire had been caused by a plane crash, as San Bruno is adjacent to San Francisco International Airport. The huge fire, with flames reaching 100 feet in the air, according to one firefighter’s account to local TV News station KGO, took more than 12 hours to extinguish.
The earliest warning signs of the disaster, according to some local residents, came days or even weeks prior, when they noticed a natural gas odor. Several of those residents told the news media that they had reported the odor to the natural gas utility that owns the pipeline, Pacific Gas and Electric (PG&E). The fourth confirmed death in the explosion and fire was an 81-year old widow who was reportedly at home waiting for PG&E officials to respond to her report of a gas odor. But an investigation by the National Transportation Safety Board (NTSB) has found that PG&E has record of only one gas odor complaint in the area, which was reported and addressed by the utility three weeks ago. The NTSB is asking residents with information on conditions before the explosion to email sanbruno@ntsb.gov, and the California Public Utilities Commission is requesting residents who smelled gas to contact the commission at SBFire@cpuc.ca.gov. As of Wednesday morning, the NTSB had received approximately 90 emails, some of which included reports of a natural gas smell in the area and wilting vegetation near the pipe, which could indicate a leak.
A leak appears to be the most plausible cause of the explosion, and NTSB and other officials in Washington, D.C. will soon examine the length of pipe that was blown out of the ground for evidence of how gradually or quickly the rupture appeared. Even a tiny “pinhole” leak in the pipe could have been ignited by a small electrical spark, leading the flames to quickly travel to the pipe and cause the huge explosion and fireball. The San Jose Mercury News reported that the NTSB is also looking into a 2008 sewer repair project that may have damaged the gas pipe. The contracting firm that performed the sewer repairs used a method called “pipe bursting” that involves causing the ground around the sewer pipe to shake. The City of San Bruno has stated that the sewer repair was not a factor in the gas pipeline explosion.
Following the explosion, PG&E workers were unable to quickly shut the valves that fed natural gas to the neighborhood, which allowed a continuous flow of gas to feed the flames for a full 1 hour and 45 minutes. Traffic and the intense heat of the inferno were cited as reasons why workers were unable to access and manually shut the valves sooner. In 1981, a major gas leak in San Francisco that led to evacuations but no fire caused the NTSB to recommend that the utility install automatic or remote-controlled valves. The presence of such valves may have reduced the duration of and damaged caused by the fire.
The devastation left behind by last week's gas explosion and fire in San Bruno (image: mercurynews.com)
The Mercury News also reported that, in response to the disaster, the California Public Utilities Commission on Monday sent a letter to PG&E demanding the utility take swift action to ensure the safety of other gas lines throughout Northern California, including inspection of its entire 6,400-mile pipeline network.
The San Francisco Chronicle reported on Monday that two California legislators are currently working on bills that would require installation of automatic and remote valves in gas pipelines. Also on Monday, US Transportation Secretary Ray LaHood submitted legislation to Congress that would expand oversight of fuel pipelines and increase penalties for pipeline safety violations, according to the Associated Press.
The gas explosion and fire have dealt a devastating blow to San Bruno and surrounding communities in this section of the South Bay Area known as the Peninsula. With four people dead and over a hundred others suffering from severe burns, the human cost of the catastrophe is incredibly high. Add to that hundreds of millions of dollars in property damage in the form of burned and incinerated homes and damaged sewer and water lines, and the result is a major disaster that will take years to fully recover from.
There appears to be limited levels of anger and outrage toward PG&E in the community at this time, at least as it is being represented in the local and national news media. For its part, PG&E has pledged $100 million to help residents affected by the disaster rebuild their lives.
While those funds are undoubtedly appreciated, frustration and outrage could appear soon as the shock of loss wears off, especially if subsequent investigations find that the gas company did not fulfill its safety obligations.
EPA Requests Disclosure of Hydrofracking Chemicals
Gas drilling in the Marcellus shale formation in the Northeast US is under the scrutiny of the EPA. (image: lhup.edu)
As people and organizations on both sides of the hydrofracking issue continue to debate the risks and benefits of the controversial drilling technique, all parties are closely following the Environmental Protection Agency’s investigation. The EPA is in the middle of a two-year review process that includes scientific research, communication with the drilling industry, and public hearings (EPA representatives were on hand for the New York City Council’s hearing on hyrofracking last month).
The Associated Press reported on Friday that the latest step undertaken by the EPA was a request that companies that employ hydrofracking voluntarily disclose what chemicals they are using in the process. For opponents of hydrofracking, the disclosure of chemicals used in drilling operations is often cited as a principle demand, as the chemical contamination of underground drinking water is a primary concern. So far, most companies have resisted disclosing all or most of the chemicals they use in hydrofracking, claiming the information amounts to trade secrets.
EPA Administer Lisa Jackson explained why her agency views the disclosure of chemicals as important to its investigation, “By sharing information about the chemicals and methods they are using, these companies will help us make a thorough and efficient review of hydraulic fracturing and determine the best path forward,” she told the AP.
Some of the chemicals used in hydrofracking are known to be toxic or carcinogenic, and the leeching of those chemicals into underground water reservoirs has been blamed for acute illnesses in humans and livestock. But as drilling companies are quick to point out, no scientific studies have directly and conclusively linked hydrofracking to water contamination.
The conclusions reached by the EPA after its study is completed in early 2012 will likely constitute the final word on the issue, leaving the practice largely unregulated by the federal government or enacting new regulations and oversights. In the meantime, the economic benefits and health and environmental risks of hydrofracking will continued to be hotly debated.
The EPA requested companies submit the chemical information within 30 days. It also left open the possibility of using legal authority to force companies who do not comply voluntarily.
Opponents Outnumber Supporters at NYC Hydrofracking Meeting
The BMCC lecture hall was full to capacity for the City Council's town meeting on hydrofracking on Tuesday night. (image: Nicholas Whitaker for HeatingOil.com)
On Tuesday night, the New York City Council held a public “town meeting” to solicit citizens’ views on the subject of hydraulic fracturing, the controversial oil and gas drilling method known as hydrofracking. The meeting, held at the Borough of Manhattan Community College, allowed city residents two minutes each to express their views on hydrofracking and proposed regulations. City Council Speaker Christine Quinn and Councilman Jim Gennaro presided over the meeting, and a handful of other representatives from city government were in attendance as well. Also at the meeting were two representatives of the federal Environmental Protection Agency (EPA), which is currently undertaking a comprehensive nationwide study of the practice to gain a better understand of its effects on the environment surrounding drilling sites.
From the opening moments of the meeting, it was clear that the majority of city politicians and bureaucrats, as well as the approximately 200 citizens in attendance, were there to oppose the use of hydrofracking in New York City’s watershed. Speaker Quinn kicked off the meeting with kudos for her fellow council members and state lawmakers for their willingness to enact moratoriums on hydrofracking. Quinn stated that the purpose of the meeting was to collect testimony from New York City residents (who would be “directly affected” by hydrofracking) that would be submitted to the EPA, as the agency had not planned a hearing in the city as part of their nationwide hydrofracking study. Quinn included a mention of industry opposition to hydrofracking regulation, saying that the natural gas industry, “As [State Senator Liz Krueger] can tell you, has pumped a lot of money into Albany.” Councilman Jim Gennaro, who took over the meeting after Quinn’s introduction, also made clear his opposition to hydrofracking at the outset, declaring his intention to “bring some sanity” to the drilling method.
A one-page leaflet distributed by the City Council offered a basic explanation of hydrofracking.
Numerous speakers referred to hydrofracking as “the most important environmental issue in New York State,” and most focused on its threat to drinking water—rightly so, as no gas drilling would ever take place in New York City, but in the Catskill Watershed that supplies the city with its unfiltered drinking water. In addition to the health risks posed by chemical contamination of drinking water, many speakers touched on the financial burden of building and operating a filtration plant to ensure clean water in the event of contamination. Councilman Oliver Koppell, who worked on water issues as a state assemblyman, estimated the cost of building such a plant at $20 billion. Filmmaker Josh Fox, the director of the recently released hydrofracking documentary Gasland, expanded his opposition to hydrofracking beyond water concerns, demanding that regulators also look into effects of the process on air and soil quality. To raucous applause, Fox urged citizens to demand the closing of loopholes in key environmental regulations the Clean Water Act, the Clean Air Act, and the Superfund Law that specifically exempt hydrofracking from their provisions. Fox also called for federal regulators to be present full-time at sites with more than 100 gas wells to ensure drilling is carried out safely.
Filmmaker Josh Fox speaks to the Council as attendees look on. Fox called for tighter federal regulation of hydrofracking. (image: Nicholas Whitaker for HeaitngOil.com)
Despite a palpable anti-hydrofracking air in at the meeting, two proponents of expanded gas drilling and hydrofracking did speak. The first was Ray Olson, a representative of landowners from Windham, NY, a town located in the Catskill watershed that holds potential for gas extraction. Clearly sensing that he was in unfriendly territory, Olson took a combative tone, beginning with a correction of “misstatements” made by council members. “There are a million acres in the watershed,” he stated defiantly, “900,000 of those are privately owned. It is not your watershed, and it is certainly not your water. It is ours.” Olson went on to describe the financial compensation offered by gas companies to landowners such as himself, and said that he stood to win initial payments (through land leasing and gas royalties) that total $5 million. “We will get our money one way or another,” he said, arguing that the city would have to pay watershed landowners for the rights to the water beneath their land—though that premise is highly questionable, as upstate residents are not currently compensated for the water used by New York City. Olson also took on the financial argument, saying that the $20 billion cost of a water filtration system would be “a bargain,” as it would create jobs and commerce in the city and state. This proclamation brought boos and jeers from the meeting attendees that were cut off by Councilman Gennaro’s gavel. In conclusion, Olson offered a third argument in favor of expanded drilling, declaring, “The opportunity for New York to become the first energy-independent state in the world is irresistible.” Another fracking defender, Brianne Murphy, took a more muted approach. Representing landowners in Broome County, Murphy argued that the interests of landowners are often overlooked, as the debate over fracking is frequently framed as one between environmentalists and the natural gas industry. She acknowledged the risks that hydrofracking poses to local residents, but also asserted, “we cannot allow fear-mongering and other unfounded, grossly exaggerated concerns to dictate policy.” She emphasized that correctly executed hydraulic fracturing has not been proven to threaten the safety of drinking water.
The least partisan statements of the evening came from Jennifer Grossman of the Open Spaces Institute, who brought a message of unity to her testimony. She sympathized with upstate landowners in economic distress what have to “make [the choice] of giving up their land or signing [gas drilling] leases. Her message was one of unity that ended with a call for citizens, environmental groups, and industry to work together at finding solutions to the problems posed by hydrofracking.
Because meeting attendees were largely opponents of hydrofracking, much of the statements made amounted to, as one speaker noted, “preaching to the choir.” What was clear at the meeting was that there is a segment of New York City residents that are informed and passionate about the hydrofracking debate. What was also clear is that New York City politicians (however personally interested in the issue they may or may not be) are eager to tap into the passion of those citizens and use it to boost their own professional profile and win votes.
The EPA is only in the sixth month of a two-year review, and the state moratorium on hydrofracking will expire in May of 2011, before which time it will almost certainly be reconsidered by the legislature. This of course means that the debate over hydrofracking is far from over, and there are many more community meetings and other events to be had, both inside and outside New York State.
NY Senate Passes Hydrofracking Ban
The Capitol building in Albany--the site of a rally urging legislators to pass a moratorium on hydrofracking three weeks ago--saw the Senate pass just such a moratorium on Wednesday. (image: Nicholas Whitcker for HeatingOil.com)
In a whirlwind session on Wednesday night the New York State Senate approved a moratorium on the controversial gas drilling technique known as hydraulic fracturing or hydrofracking. Local public radio station WNYC reported on Thursday that the measure passed by a vote of 48 to 9, with 15 yes votes coming from Republicans. Speaking to WNYC, ProPublica reporter Abrahm Lustgarten noted that the bill acknowledges the state Department of Environmental Conservation’s (DEC) pending review of hydraulic fracturing and “takes pressure off” of the agency by giving it more time to perform a thorough review of the technique.
The bill, S8129B, would suspend all permits for hydraulic fracturing in New York State until May 15, 2011. By that time, the DEC’s review will most likely be completed, and the state government will have collected and considered more information on the practice. The moratorium on hydrofracking would expire on May 15 of next year, and would have to be replaced by new legislation if the DEC, the State Legislature, and/or the Governor finds sufficient evidence that calls for closer oversight or an outright ban. According to the bill’s author, upstate Senator Antoine Thomson (D), its bipartisan passage stemmed from “noticeable effects” of hydrofracking on drinking water in Pennsylvania and concerns over the safety of oil and natural gas drilling intensified by the oil spill in the Gulf of Mexico. Hydrofracking, which involves injecting chemical-laden water deep underground at high pressures, is the suspected cause of water contamination and health problems at drilling sites around the country. However, drilling companies have repeatedly asserted that hydrofracking is safe and that no definitive scientific links have been established between the practice and water contamination.
The Senate’s passage of the bill marks a victory for New York’s anti-fracking activists, who staged a rally at the then-empty capitol building on July 20. The bill still requires approval by the Assembly and Governor David Paterson before it becomes law.
Senate Bill that Responds to BP Spill Includes New Regulation of Hydrofracking
Senate party leaders Harry Reid (D-NV, left) and Mitch McConnell (R-KY, right) are at odds over hydrofracking oversight in the proposed energy bill that’s a response to the BP oil spill in the Gulf of Mexico. (image: politico.com)
The energy and oil spill protection bill currently being shepherded through the Senate by Majority Leader Harry Reid includes many tacked-on provisions, one of which is new disclosure requirements for hydraulic fracturing (hydrofracking), the Houston Chronicle reported on Wednesday. A similar bill is making its way through the House as well, and also includes many extra provisions on top of a focus on remedying problems brought to light by the Deepwater Horizon spill and its fallout.
Both bills have become sources of partisan bickering—Republicans accuse Democrats of exploiting the disaster to pass unrelated energy measures in the bills, while Democrats counter that seemingly unrelated provisions are tied to America’s oil addiction. “I think they view this as an opportunity to push an agenda absolutely unrelated to the oil spill,” said Republican Congressman Kevin Brady of Washington State. In defense of the Senate bill, Reid called high demand for oil in the US a direct cause of the Gulf of Mexico catastrophe: “The BP disaster is one of the most visible consequences of our dangerous addiction to oil.” he said.
The hydrofracking measure in the Senate bill brings the debate over the drilling method, currently being used to extract natural gas from massive deposits beneath the Marcellus Shale formation in the eastern US, to the national stage. Recently, the debate over hydrofracking and its effects on local water supplies and ecosystems has heated up in New York State, where a moratorium on the process is pending in the state legislature.
The provision in the Senate bill would require companies that employ hydrofracking to disclose the chemicals added to water that is shot underground at extremely high pressure to break up (“fracture”) rock formations that contain natural gas deposits. The disclosure requirement is an attempt to federally regulate hydrofracking, which was specifically exempted from the Clean Air Act, Clean Water Act, and other national environmental regulations by the Energy Policy Act of 2005, a bill authored by a group of energy industry representatives organized by then-Vice President Dick Cheney. The first attempt to regulate hydrofracking at the federal level came in June of 2009 with the introduction of the Fracturing Responsibility and Awareness of Chemicals Act to the House, but the bill has so far failed to advance out of committee.
The disclosure requirement has a better chance at eventual adoption because of its inclusion in the “spill bill” (the Clean Energy Jobs and Oil Company Accountability Act of 2010), but has quickly become one of the most controversial parts of the 409-page bill. Recent reporting on the debate over the Senate bill from the Huffington Post and Salon.com cite its removal of liability caps on oil companies as the provision that will eventually prove to be the bill’s deal breaker, as it will lead two Democrats to withdraw their support, thereby leaving their party two votes short of the 60 needed to pass the bill over Republicans’ inevitable filibuster.
If the disclosure requirement does somehow become law, it would mark a victory for environmentalists and other hydrofracking opponents (including outspoken actor and New York State resident Mark Ruffalo) who list disclosure of the chemicals used in the fracking process as one of their demands for natural gas drilling companies.
NYS Celebrities Stoke Fiery Debate Over Gas Drilling at Albany Rally in Support of Ban
Actor Mark Ruffalo proclaims his opposition to hydrofracking in New York State and urges legislators to enact a moratorium on the controversial practice at a rally in Albany on Tuesday. (image: timesunion.com)
Concerned citizens of New York State, including two celebrities, held a boisterous meeting at the State Capitol on Tuesday in support of a temporary ban on the natural gas drilling technique known as hydraulic fracturing or hydrofracking. The meeting brought new attention to the debate over the controversial drilling technique, which has opened up a huge area of the Northeast that sits atop an underground rock formation called the Marcellus Shale, which stretches from Tennessee to northern New York, to potentially lucrative natural gas extraction. The controversy over hydrofracking stems from the injection of water laced with hundreds of chemicals at high pressure deep into the ground to break up rock formations and access massive natural gas reserves. Opponents of the technique cite risks of groundwater contamination, the consumption of huge quantities of water, and creation of toxic waste.
A group of those opponents met in the hall outside the State Senate chamber (which was empty, as legislators are currently in summer recess) in Albany to advocate for their cause, the Albany Times-Union reported. The group featured 91-year-old folk legend Pete Seeger and actor Mark Ruffalo, who called for New York lawmakers to approve a proposed moratorium on hydrofracking until further testing is conducted and appropriate regulations are put in place. Seeger, banjo in hand, drew parallels between the dangers of hydrofracking and the environmental disaster in the Gulf of Mexico by singing, “when drill, baby, drill turns to spill, baby, spill/God’s counting on me.” Ruffalo, a resident of Sullivan County, made an impassioned speech (watch the video below) that focused on the need for safe drinking water, but also gave a sympathetic nod to struggling farmers and other landowners who support hydrofracking because of the income it could bring to them in the form of drilling royalties paid by energy companies.
Companies who perform hydrofracking insist that the method is safe, and point to a lack of conclusive evidence connecting it to contaminated drinking water and other maladies. The Times-Union quoted one industry representative’s strongly worded response to the event at the Capitol:
Brad Gill, executive director of the Independent Oil & Gas Association of New York, called the rally “another example of the reckless disregard for the facts that ill-informed and dishonest opponents continue to put forth as they attempt to block the safe exploration of natural gas and economic recovery in New York.”
While no indisputable scientific link has been made between hydrofracking and contaminated water or other pollution, scores of residents who live near fracking operations have reported problems with their drinking water, as well as other environmental issues whose appearance coincided with the onset of gas drilling nearby. Holding a jar of cloudy water he said he pulled from a family well in Dimock, Pennsylvania, 200 yards away from a hydrofracking site, Ruffalo asked, “Who in New York would take a sip of that?”
Pennsylvania resident and filmmaker Josh Fox was inspired to create a documentary about the effects of hydrofracking when a representative of a gas company offered to pay him for permission to drill for natural gas on his property. The film, titled Gasland, chronicles a litany of health, water, and environmental problems experienced by Americans living near hydrofracking sites—the most memorable of which may be a Colorado man lighting the well water from his kitchen tap on fire.
In addition to the rally in Albany this week, the debate over hydrofracking has seen several recent developments. In June, the interstate Delaware River Basin Commission (DRBC) blocked all gas drilling that employs hydrofracking, as well as exploratory drilling in the Basin, New York City’s WNYC reported on Monday. “This is something new that’s being introduced to the Delaware River Basin and we want to make sure that we get this right,” said DRBC spokesman Clarke Rupert.
Last week, the environmental news service Greenwire reported on efforts by one natural gas drilling company, Range Resources Corp., to appease hydrofracking opponents by disclosing the chemicals used in the process on a well-by-well basis. Chesapeake Energy Corp., a major driller in the Marcellus Shale area, is considering following Range’s example. The lack of disclosure of which chemicals are used in hydrofracking is another objection to the process raised by opponents, including Ruffalo. The Greenwire report noted that gas companies hoped that disclosure of fracking chemicals, in addition to allaying environmental concerns, would keep regulation at the state level, which the gas industry as a whole firmly supports. At the federal level, the Environmental Protection Agency is currently undertaking a two-year review of the hydrofracking process that could eventually lead to the agency regulating the practice.
Whatever the long-term fate of hydrofracking, the current battle over the practice is in New York State. If Ruffalo, Seeger, and other hydrofracking opponents succeed in their efforts, the New York Legislature will approve the proposed moratorium on hydrofracking in the state that would suspend fracking for at least a year and lead to new regulations of the process.
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Heating Oil Weekly Roundup: Oil Spill Terminology, Hydrofracking Critics, and the World Cup’s Carbon Footprint
(image: John Cole, the Scranton Times via cagle.com)
Is the oil spill a spill? Or is it a gusher, or a leak, or a catastrophe, or a blowout? Anita Lee of the Biloxi Sun Herald (via McClatchyDC.com) investigates the possibilities of what to call the…thing in the Gulf of Mexico.
It’s been a tough PR week for the natural gas industry, whose controversial practice of hydraulic fracturing (hydrofracking) has received sustained attention after Josh Fox’s muckraking documentary Gasland debuted on HBO on Monday, has been reviewed by nearly every national publication, and Fox himself has been everywhere (including The Daily Show). If that wasn’t enough, Christopher Bateman at Vanity Fair piled on with his own highly critical account of hydrofracking in Pennsylvania.
Fans and players from around the globe have converged on South Africa for the World Cup, and all of that travel used up a lot of fuel and emitted a lot of carbon, says the Center for American Progress. Even when international travel is left out of the equation, the carbon footprint of the 2010 World Cup is eight times bigger than that of the 2006 World Cup in Germany.
Solar power is a long way from being able to provide us with enough electricity to replace power plants, but there’s one thing we know it can do: power a car disguised as a shrub. Leslie Katz at CNET has the story on the “Terrestrial Shrub Rover,” which is pretty much what it sounds like and is powered entirely by the sun. Watch the video below to see a guy drive a shrub.
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CFTC Extends Regulation of Electronic Energy Markets
The CFTC ruled to regulate seven electronic natural gas contracts traded on the IntercontinentalExchange (ICE). (image: money.cnn.com)
The Commodity Futures Trading Commission (CFTC) ruled on Tuesday to extend its regulation to seven natural gas contracts that are traded electronically on the IntercontinentalExchange (ICE), reported Reuters. The CFTC concluded that the contracts played a significant role in setting the price of a commodity, which means they merit the CFTC’s oversight and could be subject to position limits.
The CFTC’s decision to increase regulation of these electronic contracts is separate from its proposal to establish position limits on energy commodities, including heating oil futures. However, the public comment period on that proposal concluded on Monday, and the CFTC’s move to extend its oversight into electronic markets like ICE could be a clue that the CFTC remains bent on tightening regulation of all trading of energy commodities.
Electronic markets are typically subject to lighter regulation than traditional futures exchanges (like the New York Mercantile Exchange, or NYMEX), says Dow Jones Newswires, but a 2008 law granted the CFTC the ability to regulate contracts traded on electronic energy markets if it determines that the contract plays a role in setting price.
On Tuesday the CFTC deliberated over 24 energy contracts, and decided that only seven met the criteria for increased oversight. The contracts that did not warrant oversight were other natural gas contracts on ICE and on the Natural Gas Exchange, and one carbon contract on the Chicago Climate Exchange.
This ruling by the CFTC to bring additional energy contracts under its purview adds momentum to the push for financial reform taking place now in the Senate and to the newfound regulatory zeal in the SEC and the CFTC itself. Most end users of commodities like heating oil desire curbs on speculation in commodity markets, which should lead to stable, and quite possibly lower, heating oil prices.
Energy Dept: Natural Gas Supply Data Overstated
Despite major errors in EIA’s reporting of natural gas supply and demand, inventories that have remained at or above the five-year average for the last nine months will likely keep short-term prices low. (image: thomsonreuters.com)
The US Department of Energy announced on Monday that it would implement sweeping changes to its data collection on natural gas supplies to address “overestimates” in production, according to the Wall Street Journal. The DOE’s Energy Information Administration (EIA) currently collects data from large natural gas producers and extrapolates that data across the industry, omitting data from hundreds of smaller producers. The EIA will begin using new data collection methods this month to correct the problem, which will likely lead to a substantial reduction in US supply estimates.
In addition to excluding data from smaller producers, or perhaps as a result of it, recent natural gas estimates have shown huge margins of error, leading many analysts to question the overall validity of the data. The Journal explained:
Analysts also point to the discrepancy between supply (how much gas is produced or imported) and demand (the amount that is stored or used). Those two figures should cancel each other. While there always is a margin of error, that margin has widened sharply in recent months. In December, the agency reported total new gas supply at 87.8 billion cubic feet a day and total demand of 80 billion, leaving 7.8 billion cubic feet unaccounted for—a margin of error of 10%.
The EIA’s announcement drove up the price of natural gas by 11 percent earlier this week, as traders anticipated a tightening of supplies as a result of the data collection changes. According to a Reuters report published on Tuesday, however, “analysts said that will not change the fuel’s weak near-term fundamentals.” Although recent data may be inaccurate, US supplies of natural gas still surpass demand, and that trend will likely continue over the next few months.
Last month, a report by Dow Jones Newswires found similar inaccuracies in the EIA’s reporting of oil inventory data that had major effects on crude (and, by extension, heating oil, diesel, and gasoline) prices in the last six months. The reception of that finding was more muted, as deficiencies in the oil supply reporting process—like reliance on storage firms’ self-reporting and human error—were fairly widely known.
EIA officials have pledged to address reporting issues, but have not offered any specifics on how they will do so. It appears that weekly oil inventory reports will likely remain unchanged and continue to influence oil prices, flawed though they may be. Changes to natural gas supply and demand data collection are forthcoming, and will certainly affect the long-term view of natural gas supplies and drive up prices in the long term.
EPA to Undertake Comprehensive Study of Hydrofracking
The EPA is taking on the controversy surrounding hydrofracking, and plans to deliver an answer in 2012. (image: asmalldoseof.org and sierraactivist.org)
Following years of controversy over a technique used for extracting hard-to-reach oil and natural gas called hydraulic fracturing (a.k.a. hydrofracking), the EPA announced on Thursday that it would invest two years and almost $2 million to study hydrofracking’s possible threats to human health and the environment. The Wall Street Journal reported on the agency’s announcement, as made by Paul Anastas, assistant administrator for EPA’s Office of Research and Development:
Our research will be designed to answer questions about the potential impact of hydraulic fracturing on human health and the environment. The study will be conducted through a transparent, peer-reviewed process, with significant stakeholder input.
At CERAWeek Conference, Oil and Gas Are the Future
Secretary of Energy Steven Chu speaking about the future of oil and gas at CERAWeek 2010. (image: chron.com)
Tuesday was “oil day” at the CERAWeek 2010 energy conference, sponsored by the energy research firm IHS CERA, and leading figures from the energy industry and from the Obama administration gathered to speak about the future of oil and gas. The dominant tone was one of confidence, as most speakers insisted that fossil fuels would remain the key energy sources far into the future, reported the Houston Chronicle.
While a positive assessment of the future of oil and gas might be expected from energy insiders, some of the oil and gas industry’s central claims about the continuing potential and relevance of fossil fuels were confirmed by Secretary of Energy Steven Chu. He talked about the promise of natural gas, which can be used for power generation and burns cleaner than coal, as a “bridge” fuel that can play a role in the “transition to other fuels” in the future. Oil, too, will retain its place in the energy mix, according to Chu: “Oil is an ideal transportation fuel, so it will be with us for decades.”
Report of $2.4 Trillion Worth of US Oil & Gas Reserves Deserves Closer Scrutiny
Reports of an unprecedented bounty of domestic oil and gas reserves are open to misinterpretation. (image: trcc.commnet.edu and i.ehow.com)
On Monday, a report released by a national contractor for state utilities claimed that the United States contains more than 2,000 trillion cubic feet (tcf) of natural gas and 229 billion barrels (bbl) of oil—as observed by The Energy Source blog at Forbes.com, that’s more than the average OPEC nation holds. Noting that a chunk of these reserves lie in areas barred from drilling, the report also found that leaving these reserves untouched would cost the US $2.36 trillion in lost GDP over the next twenty years.
It’s no secret that the US contains its own oil and gas reserves. According to Reuters, Previous estimates have placed those figures at 1750 tcf and 186 bbl for gas and oil, respectively.
The study, two years in the making, was sponsored by the National Association for Regulatory Commissioners in conjunction with the industry-funded Gas Technology Institute. The government-protected reserves amount to 43 billion barrels of oil and 286 tcf of gas and are located in the Arctic National Wildlife Refuge and in areas just off the coastline of the continental US. The US currently consumes an average of 20 million barrels of oil per day, and produces 6 million barrels per day.
The research was done according to standard methodology by SAIC Corp ie data collection and processing, and the report attributes the reserve increases to advances in drilling technology and gas extraction methods. The real thrust of the study comes from its economic figures. This appears to be the first time a hard dollar amount—and a whopping one at that—has been attached to the value of those reserves.
