Keystone XL protester in tree. Credit: Tar Sands Blockade

Opponents of the Keystone XL tar sands pipeline have built a small fortress high up in trees and on land in northeast Texas to block construction of the controversial project’s southern leg.

As many as 20 protestors are stationed in 80-foot-high tree platforms, on the ground or along suspended timber bridges that cut through the old-growth forest in Winnsboro, a town about 100 miles east of Dallas.

The civil disobedience action—which has been marked by arrests and accusations of police abuse—entered its fourth day on Thursday.

The Tar Sands Blockade, the activist group behind the effort, has carried out smaller protests since early August, when Canadian energy company TransCanada began construction in southern Texas and Oklahoma on the 485-mile-long segment. But this week’s demonstration is its biggest yet to oppose the pipeline.

Local police arrested two people on Tuesday—Shannon Bebe of Dallas and Benjamin Franklin of Houston—after they chained themselves to a large excavator used to clear the forest surrounding the encampment. Ron Seifert, a spokesperson for the Tar Sands Blockade, alleged the local police put Bebe and Franklin into stress positions, including wrenching their arms behind their backs and handcuffing their hands to the equipment. He said they used pepper spray and taser guns until the activists agreed to remove themselves. Seifert contended that TransCanada supervisors were present during the debacle.

TransCanada did not return requests for comment by deadline.

The Tar Sands Blockade bailed out Bebe and Franklin on Tuesday evening for $2,000 each.

Via telephone from a tree platform, Seifert told InsideClimate News that the group plans to continue as long as they possibly can—so long as TransCanada doesn’t attempt to fell the trees they’re stationed in. (Though he added that he doesn’t expect that to happen.)

Editor’s note: In a press release issued Thursday afternoon, the Tar Sands Blockade said TansCanada was operating “heavy timber clearing machinery within 20 feet of the site” of the tree blockade.

Protesters are fully equipped with food supplies and safety equipment thanks to donations from nearby communities and financial contributions on its website, Seifert said. Protestors can move throughout the aerial blockade using zip lines and timber catwalks. Barring the “ominous sound of chainsaws and heavy equipment in the not-so-far distance,” the protestors’ tree village is quite comfortable, he said.

Seifert said he hopes the protest will inspire more civil disobedience along the pipeline route.

Keystone XL protester in tree. Credit: Tar Sands BlockadeKeystone XL protester in tree. Credit: Tar Sands Blockade

TransCanada has said the Oklahoma-to-Texas leg of the Keystone XL should be up and running by mid- to late-2013. Construction began in Texas on Aug. 9 after the pipeline received government approval in July.

The fate of the northern leg, however, is less certain.

That portion, which would stretch 1,215 miles from Alberta, Canada, to Cushing, Okla., requires approval from the U.S. State Department because it would cross an international border. Concerns about the pipeline’s impact on the ecologically fragile Nebraska Sandhills and on the Ogallala aquifer, a crucial water source for the state, prompted Pres. Obama to delay his decision on the segment until after the November election.

Seifert said the Keystone XL pipeline, designed to carry 830,000 barrels of oil sands crude to the Texas Gulf Coast, is “more than just a permanent scar on the land that’s directly affected by construction—this is about the future of our entire planet.”

Oil sands production consumes more energy than pumping conventional oil up from a well, because it must be strip-mined or boiled loose underground. Greenhouse gas emissions from Canadian tar sands production are about 82 percent higher than the average crude refined in the United States, according to estimates by the Environmental Protection Agency.

“Stopping this pipeline is one of the necessary things we have to do based on a future of runaway climate change,” Seifert said.

Maria Gallucci, InsideClimate News (9-27-2012). Retrieved 9-28-2012.

The University of North Dakota today announced $14 million in private and public partnership funding that will greatly enhance UND’s efforts in petroleum geology and related fields. The announcement also included the naming of the Harold Hamm School of Geology and Geological Engineering in the UND College of Engineering and Mines.

The total project of $14,000,000 includes $10,000,000 provided as a gift from Harold Hamm and Continental Resources, Inc., which will create the Harold Hamm School of Geology and Geological Engineering. Another $4,000,000 from the Industrial Commission/Oil and Gas Research Program will fund the proposal entitled “Public-Private Partnership to Support Geology and Geological Engineering Education and Research at UND’s College of Engineering and Mines.”

“With the discovery of the world’s largest oil field in more than 40 years, Continental Resources and North Dakota are changing the world,” said Harold Hamm. “The Bakken Play is one of the primary fields making North American energy independence a reality, releasing us from the grip of foreign oil and serving as a model for unconventional oil production worldwide. Establishing the School of Geology and Geological Engineering is a vital commitment to continuing North Dakota’s national and global leadership in energy.”

North Dakota Governor Jack Dalrymple said, “We’re proud to be partnering with Harold Hamm and Continental Resources to provide funding through a private-public partnership for this major expansion of UND’s geology program. This is a perfect example of what can be done at our research institutions to enhance educational and employment opportunities for our state.”

UND President Robert Kelley said, “This is an exceptional day for the University of North Dakota. We are delighted to announce the naming of our School of Geology and Geological Engineering for Mr. Harold Hamm in honor of this very generous gift from Mr. Hamm and Continental Resources, Inc. This is the largest-ever gift to UND from someone who is not an alumnus of the University, and adds a significant dimension to North Dakota Spirit — The Campaign for UND.

“I also want to thank the North Dakota Industrial Commission for their very important portion of the private-public partnership,” said Kelley. “This is a perfect model of private dollars and public resources working together for maximum benefit. The combined funding will enhance the education of future petroleum geologists and engineers, which is key to the ongoing development of the Williston Basin and the nation’s petroleum resources.”

Said Hesham El-Rewini, dean of the UND College of Engineering and Mines, “As an essential part of the UND College of Engineering and Mines, the Harold Hamm School of Geology and Geological Engineering will highlight the importance of geology and geological engineering in the state, not only in terms of North Dakota’s financial well-being, but also in terms of employment within the state. The School will help attract high quality faculty members and the best and brightest students to North Dakota.”

“Our goal is to produce future generations of petroleum geologists and engineers who can contribute to building a better world through professional service and research for safe, reliable, and affordable energy production,” El-Rewini added. “We also aim to increase the research efforts currently conducted by faculty members and students in petroleum related fields, which will create new opportunities for collaboration with industry in North Dakota and elsewhere.”

“This generous funding will give students at the University of North Dakota access to technology and resources that will better prepare them for engineering and energy-related jobs here in North Dakota and around the world,” said Attorney General Wayne Stenehjem, a member of the North Dakota Industrial Commission. “It is our hope that this is only the beginning of what we can do, partnering with industry, to educate our future workforce.”

“We already have one of the best core libraries in the United States housed at the Wilson M. Laird Core Library on the UND campus. These dollars will help us leverage the information in that facility and improve the opportunities for students and others to better understand the geology of North Dakota’s natural resources,” said Agriculture Commissioner Doug Goehring, a member of the North Dakota Industrial Commission.

Gift from Harold Hamm and Continental Resources Inc.

The $10 million private gift from Harold Hamm and Continental Resources, Inc. will be made available over the next four years, and the endowment portion will continue to return funding on an ongoing basis. Designed to enhance education and research at the Harold Hamm School of Geology and Geological Engineering, the gift will have an impact on the entire College of Engineering and Mines for many years.

The gift has been designated as follows:

$3,750,000 – Endowed Professor of Petroleum Geology
$3,750,000 – Endowed Professor of Petroleum Engineering
$675,000 – Salary and benefits for the two Endowed Professor positions
$1,325,000 – Endowed Leadership Scholarships
$500,000 – Continental Resources High Resolution Virtual Core Library

Industrial Commission Oil and Gas Program Funding

The $4 million funding from the Industrial Commission Oil and Gas Research Program will be used as follows:

$1,500,000 – Equipment to establish Advanced Laboratories
$1,500,000 – Continental Resources High Resolution Virtual Core Library
$720,000 – Student scholarships and graduate assistantships
$280,000 – Students experience fund

–30–

Office of University Relations
Twamley Hall, Room 409
264 Centennial Drive, Stop 7144
Grand Forks, ND 58202-7144
Phone  701.777.2731
Fax  701.777.4616
UND.edu

Exxon Mobil Corporation said on Thursday that it has signed an agreement to significantly increase its production acreage in the prolific Bakken oil shale region in the U.S. states of North Dakota and Montana.

ExxonMobil and its subsidiary, XTO Energy, signed an exchange agreement with Denbury Onshore LLC, a subsidiary of Denbury Resources Inc., to acquire 100% of Denbury’s Bakken shale assets, which consist of about 196,000 net acres in North Dakota and Montana, with expected production in the second half of 2012 of more than 15,000 oil equivalent barrels per day.

The agreement increases ExxonMobil’s holdings in the Bakken region by about 50% to nearly 600,000 acres, giving the company a significant presence in one of the major U.S. growth areas for onshore oil production.

In exchange for its Bakken shale assets, Denbury will receive $1.6 billion in cash and acquire ExxonMobil’s interests in the Hartzog Draw field in Wyoming and Webster field in Texas, which currently produce about 3,600 net oil equivalent barrels per day of natural gas and liquids.

The Bakken shale acreage will be operated by ExxonMobil subsidiary XTO Energy, which is a U.S. oil and natural gas producer and is involved in developing tight gas, shale gas, coal bed methane and unconventional oil resources. XTO has operations in all major U.S. producing regions.

The agreement is subject to regulatory approval and due diligence reviews.

–Edgar Ang, www.opisnet.com

Photo courtesy of Travis Cooksey

By: Edgar Ang, opisnet.com

The U.S. may be marching toward the politically charged “energy independence day” amid growing domestic oil production.

However, “the gap between U.S. oil production and consumption is large and may not close in the forecast period (2022),” Credit Suisse said in a report on U.S. oil production outlook.

“North American oil independence (U.S., Canada, Mexico) looks more achievable with appropriate policies to promote safe drilling, energy efficiency, regional coordination and gas substitution. However, we don’t hold out high hopes of the same low cost dividend to the U.S. economy provided by natural gas due to the relatively higher cost of oil shales and Canadian oil sands. Natural gas appears the best low cost energy policy bet,” the bank said.

U.S. oil production could reach just over 10 million b/d by 2020 and maintain this level for a number of years, according to Credit Suisse. The strong oil production growth estimate is based on high oil prices, a 27% higher oil well count by 2016 versus 2012, (58% higher than 2011) and a 25% improvement in 30-day initial production (IP) rates per well. Although the well count increases by 27%, the oil rig count only increases by 11% owing to improvements in drilling efficiency, which is defined as the number of days to drill a well.

Key shale plays to watch include the Eagle Ford, Bakken and Permian. After recent exploration success, the offshore Gulf of Mexico and potentially Alaska should also contribute some growth.

Single well economics suggest breakevens in the $60-75/bbl range for U.S. shales today. However, driving growth at forecast rates requires substantial capital — access to capital could be a greater constraint.

In a simple calculation, the U.S. oil industry needs around $95/bbl Brent near term to fund the capex required to deliver this growth, based on self-generated cash flow alone. This could be lowered by external funding, but we are already seeing some companies reduce capex when WTI recently fell through $90/bbl.

As U.S. oil production volumes rise, this breakeven could fall toward $80/bbl. It is important to note that the average recovery of a gas well is three to five times the recovery of a typical oil well on a Btu basis. The shale oil revolution should help meet rising global demand but looks less likely to lead to a collapse in domestic pricing similar to U.S. gas markets.

Price Impact

For downstream implications, the U.S. will require new trunkline pipes and gathering system to accommodate 600,000 b/d of annual oil production growth from the U.S. and 300,000 b/d of Canadian annual production growth through 2017, the bank said.

“Our short term model suggests WTI-LLS will remain wide through the second half of 2012 but narrow as Seaway, southern Keystone XL and Permian pipes are built through 2013,” Credit Suisse said. “Even as WTI-LLS spreads narrow, it is likely that a wider discount will remain for Bakken and Canadian Heavy crude through 2014,” it added.

Although oil supply from the U.S. and Canada is visibly growing, outside North America, non-OPEC supply growth is negative in 2012. Oil spare capacity increases towards 3% by 2015 (from 2% today) but markets may still reflect some risk premium over marginal costs, the bank said. “Risks to this view seem balanced. Spare capacity could rise faster if curtailments in Nigeria, Iran, Venezuela, Sudan were resolved. Spare capacity could fall, if a global economic recovery takes hold,” Credit Suisse said.

The rising oil and gas production is also expected to have an impact on the U.S. economy. The bank’s U.S. industry capex model suggests around $1.3 trillion dollars of spend between now and 2020. Low U.S. gas prices should encourage some $35 billion of petrochemical capex and a manufacturing renaissance. The logistics to bring shale hydrocarbons to market could total an additional $80 billion this decade.

Article republished, courtesy of Oil Price Information Service

(HELENA) The State of Montana will offer detailed training on a range of topics that includes air quality and discharge permitting, compliance requirements, and best business practices for contractors, opencut mining, materials processors, and the oil and gas industry.

The trainings will be in Sidney on October 1 – 3 at the Mondak Heritage Center, 120 3rd Ave SE,  and will be conducted by representatives of the Departments of Environmental Quality (DEQ) and Transportation (MDT). The trainings are free of charge and open to qualified registrants.

The three-day series is designed specifically to address practices surrounding opencut mining and associated development and growth seen in recent years throughout northeastern Montana.

“This training series provides valuable information that will save owner-operators and contractors time and money as they grow with the region,” said Darrick Turner, manager of DEQ’s Small Business Environmental Assistance Program. “Attendees will come away with a better understanding of the state’s environmental regulations and the permitting processes.”

Topics will include air quality and discharge permitting, and inspections. A full day is devoted to siting and compliance requirements and permitting for opencut operations. Enforcement and transportation issues will also be addressed.

Registration is available by calling 800-433-8773 or by emailing Darrick Turner at: dturner2@mt.gov.

By Lynn Helms – NDIC Department of Mineral Resources

• May Oil: 19,839,420 barrels = 639,277 barrels/day
• Jun Oil: 19,809,662 barrels = 660,332 barrels/day (preliminary) > NEW all-time high
• May Gas:  21,360,912 MCF = 689,062 MCF/day
• Jun Gas: 21,381,942 MCF = 712,7312 MCF/day (preliminary) > NEW all-time high
• May Producing Wells = 7,205
• Jun Producing Wells = 7,352 (preliminary) > NEW all-time high

May Permitting: 180 drilling and 2 seismic
Jun Permitting: 204 drilling and 0 seismic (all time high was 245 in Nov 2010)
May   Sweet Crude Price = $79.44/barrel
Jun   Sweet Crude Price = $72.58/barrel

Today Sweet Crude Price = $80.00/barrel ND (all-time high was $136.29 July 3, 2008)

• May rig count 211
• June rig count 213
• July rig count 211

Today’s rig count is 203 (all-time high was 218 on May 29, 2012)

Comments:

Great weather and additional crews resulted in increased hydraulic fracturing activity and increased production. Rig count has now decreased slightly to around 200-205 and rig efficiency continues to improve with the spud to TD time now averaging 20 days.  Daily production increased 3.3% from May to June. Over 95% of drilling still targets the Bakken and Three Forks formations. The idle well count stayed about the same indicating an estimated 347 wells waiting on fracturing services. This is expected to lead to significant production increases through the summer as additional fracturing crews are added.

Crude oil take away via pipeline is now less than 50% of daily production, but rail and truck transportation are adequate to keep up with near term production projections. The North Dakota Sweet posted price basis is now -14% to NYMEX-WTI and NYMEX-WTI basis is now -18% to Brent.  This is resulting in an increasing amount of North Dakota crude oil transported on rail so it can reach destinations that pay Brent price.

Mail: U.S. Department of the Interior, Director (630), Bureau of Land Management, Mail Stop 2134 LM, 1849 C St. NW., Washington, DC 20240, Attention: 1004-AE26.
Fax: Office of Management and Budget (OMB), Office of Information and Regulatory Affairs, Desk Officer for the Department of the Interior, fax 202-395- 5806.

There are a significant number of concerns with the rule as proposed, but the major points that should be commented on are as follows:

1)  This is a state’s rights issue.  States that have adopted hydraulic fracturing rules that include chemical disclosure, well construction, and well bore pressure testing should be exempted from the rule.

2)  The EPA study of potential hydraulic fracturing effects on ground water is not finished and there are currently no known environmental contamination incidents.

3)  As Chairman Hall has testified, the required consultation with the Three Affiliated Tribes has not occurred.

Draft EPA Guidance for permitting hydraulic fracturing using diesel fuel has been published.  The comment period has been extended to 5pm EDT on August 23, 2012.  I urge all of our readers to submit comments to the EPA as follows:

Submit your comments, identified by Docket ID No. EPA-HQ-OW-2011-1013 by one of the following methods: www.regulations.gov: Follow the on-line instructions for submitting comments. Email:OWDocket@epa.gov@epa.gov
Mail: Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels—Draft, Environmental Protection Agency, Mailcode: 4606M, 1200 Pennsylvania Ave. NW, Washington, DC 20460.

There are a significant number of concerns with the guidance as proposed, but the major points that should be commented on are as follows:

1)  This is a state’s rights issue.  States that have adopted hydraulic fracturing rules that include chemical disclosure, well construction, and well bore pressure testing should be explicitly exempted from the guidance.

2)  The definition of diesel fuel is too broad because it includes six CASRNs as well as any materials referred to by one of these primary names or any associated common synonyms.

3)  EPA made no attempt to identify dangerous concentrations of these materials.

Hydraulic fracturing treatments that utilize concentrations of less than 10% of any material defined as diesel fuel should be exempt from permitting requirements.

4)  The guidance is written for Enhanced Oil Recovery wells or disposal wells completed with tubing and packer.  It shows a serious lack of understanding of the horizontal drilling-hydraulic fracturing process.  Most of the requirements will not work mechanically on wells completed with swell packers and fractured down the production casing.

“Director’s Cut.” By Lynn Helms – NDIC Department of Mineral Resources (2012-8-15). Retrieved 9-5-2012.