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The proposed Atlantic Coast Pipeline

Atlantic Coast Pipeline Would Require Extensive Mountaintop Removal

A new briefing paper details how Dominion Energy's proposed Atlantic Coast Pipeline would involve the blasting, excavation and removal of mountaintops along 38 miles of Appalachian ridgelines as part of the construction.

The planned 600-mile interstate pipeline will carry 1.44 billion cubic feet per day of fracked gas from West Virginia to North Carolina, cutting through forests, critical animal habitats and pristine mountains that Dominion would be required to "reduce" between 10 to 60 feet, according to the paper released Thursday by the non-profit Chesapeake Climate Action Network.

The paper cites data from the draft environmental impact statement prepared by the Federal Energy Regulatory Council (FERC) as well as information supplied to FERC by Dominion. It also compiles information from Geographic Information System (GIS) mapping software and independent reports prepared by engineers and soil scientists.

"In light of the discovery that the Atlantic Coast Pipeline will cause 10 to 60 feet of mountaintops to be removed from 38 miles of Appalachian ridges, there is nothing left to debate," said Mike Tidwell, executive director of the Chesapeake Climate Action Network.

"Dominion's pipeline will cause irrevocable harm to the region's environmental resources. With Clean Water Act certifications pending in both Virginia and West Virginia, we call on Virginia Governor Terry McAuliffe and West Virginia Governor Jim Justice to reject this destructive pipeline."

The paper was released in coordination with the Allegheny-Blue Ridge Alliance, Friends of Nelson County, Appalachian Mountain Advocates and the Dominion Pipeline Monitoring Coalition.

Dominion, headquartered in Richmond, Virginia, is one of the nation's largest producers and transporters of energy. The developer promises that the Atlantic Coast Pipeline will have "minimal environmental impact" and that "best-in-class restoration and mitigation techniques will be used to protect native species, preserve wetland and water resources, control erosion and minimize emissions." Duke Energy, Piedmont Natural Gas and Southern Company Gas also have a stake in the project.

As DeSmog reported, President Trump's team has listed the Atlantic Coast Pipeline among the White House's top priorities for infrastructure projects.

Environmentalists and other opponents argue that the pipeline will have adverse effects on sensitive habitats, reduce property values and introduce dangerous precedents for the seizure of private property through eminent domain.

Joyce Burton, a board member of Friends of Nelson County, expressed fears that Dominion's plan to build the pipeline on steep and landslide-prone Appalachian slopes could be catastrophic.

"Many of the slopes along the right of way are significantly steeper than a black diamond ski slope," Burton said.

"Both FERC and Dominion concede that constructing pipelines on these steep slopes can increase the potential for landslides, yet they still have not demonstrated how they propose to protect us from this risk. With all of this, it is clear that this pipeline is a recipe for disaster."

Opponents of the pipeline are demanding more transparency from the company.

Ben Luckett, a staff attorney at Appalachian Mountain Advocates, said it was "astounding" that FERC has not required Dominion to produce a plan for dealing with the millions of cubic yards of excess rock and soil that will result from cutting down the 38 miles of ridgetop for the pipeline.

"We know from experience with mountaintop removal coal mining that the disposal of this material has devastating impacts on the headwater streams that are the lifeblood our rivers and lakes," Luckett added.

"FERC and Dominion's complete failure to address this issue creates a significant risk that the excess material will ultimately end up in our waterways, smothering aquatic life and otherwise degrading water quality. Without an in-depth analysis of exactly how much spoil will be created and how it can be safely disposed of, the states cannot possibly certify that this pipeline project will comply with the Clean Water Act."

Dan Shaffer, a spatial analyst with the Dominion Pipeline Monitoring Coalition, said there are too many risks involved with the project.

"Even with Dominion's refusal to provide the public with adequate information, the situation is clear: The proposed construction plan will have massive impacts to scenic vistas, terrestrial and aquatic habitats, and potentially to worker and resident safety," Shaffer said.

"There is no way around it. It's a bad route, a bad plan and should never have been seriously considered."

Here are some of the new paper's key findings:

• Approximately 38 miles of mountains in West Virginia and Virginia will see 10 feet or more of their ridgetops removed in order to build the Atlantic Coast Pipeline.

• This figure includes 19 miles in West Virginia and 19 miles in Virginia.

• The majority of these mountains would be flattened by 10 to 20 feet, with some places along the route requiring the removal of 60 feet or more of ridgetop.

• Building the ACP on top of these mountains will result in a tremendous quantity of excess material, known to those familiar with mountaintop removal as "overburden."

• Dominion would likely need to dispose of 2.47 million cubic yards of overburden, from just these 38 miles alone.

• Standard-size, fully loaded dump trucks would need to take at least 247,000 trips to haul this material away from the construction site.

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3,000 Wells Shut Down in Colorado After Fatal House Explosion

Anadarko Petroleum Corporation is temporarily closing all its vertical wells across northeast Colorado following a massive house explosion and fire in the town of Firestone last week that killed two people.

The Woodlands, Texas-based oil and gas giant said in press release it was shutting more than 3,000 producing vertical wells, which produce about 13,000 barrels of oil per day, "in an abundance of caution."

Mark Martinez and his brother-in-law Joseph William Irwin III, both 42, were killed in the April 17 explosion. Mark's wife, Erin Martinez, was injured as well her 11-year-old son. A GoFundMe page is currently raising funds for the family.

In its statement, Anadarko acknowledged that the blast occurred approximately 200 feet from the family's recently built two-story home on Twilight Ave., where the company operates an older vertical well drilled by a previous operator.

The tragedy has sparked concerns from local anti-fracking activists over the risks of oil and gas production in Colorado and are calling for a statewide emergency moratorium as officials and regulators investigate the cause of the explosion.

The Frederick-Firestone Fire Protection District and the Colorado Oil and Gas Conservation Commission (COGCC) are involved with the investigation.

"While the well in the vicinity is one aspect of the investigation, this is a complex investigation and the origin and cause of the fire have not been determined," Frederick-Firestone Fire Protection District Chief Theodore Poszywak said.

The Colorado Independent reported on the possible link between the Anadarko-operated gas well and the Firestone house explosion:

A source has told The Independent that personnel and trucks bearing Anadarko's logo responded soon after the explosion, and that company personnel at and near the scene over the following days came in unmarked vehicles and clothes. They were apparently paying special attention to a feeder line that may have been severed near the home.

Furthermore ...

News stories after the explosion reported that Irwin, a master plumber, was helping Mark Martinez install a hot water heater, apparently at or near the time of the explosion. The insinuation was that their work may have led to their deaths.

But that narrative sounded immediately curious to those who knew Irwin and his work, and became less plausible when Colorado's Public Utilities Commission passed the investigation on to the COGCC, which regulates the oil and gas industry.

Anadarko spokesman John Christiansen would not respond to the Independent's report or questions about the company's possible involvement.

Anadarko is one of the world's largest private oil and natural gas exploration and production companies and the largest oil and gas producer in Colorado. The state is the seventh-largest oil and gas producing state in the country.

"Our teams will remain actively engaged with residents in the Firestone community," said Brad Holly, Anadarko senior vice president of U.S. Onshore Exploration and Production.

"Colorado residents must feel safe in their own homes, and I want to be clear that we are committed to understanding all that we can about this tragedy as we work with each investigating agency until causes can be determined."

In response to the incident, Boulder, Colorado-based climate change activist Xiuhtezcatl Martinez is calling for immediate halt on drilling activity.

"Our thoughts and best wishes go to Martinez and Irwin families, no one should have to lose a family member before their time," Martinez, who is the youth director of Earth Guardians, told EcoWatch. "We must fight to make sure that Anadarko is held accountable, if its shown their reckless behavior played a part in their deaths, so we can ensure this is the last time a tragedy like this occurs."

"Unfortunately this is likely the result of a state that has completely failed to protect it's citizens from the impacts of fracking," Martinez added. "Based on the explosive danger coming from this industry and the proximity to homes, schools and hospitals we are calling for a statewide emergency moratorium, until it can be demonstrated that fracking can be done safely."

In March, the Colorado Court of Appeals sided with Martinez and other youth plaintiffs that the Oil and Gas Conservation Act required it to strike a balance between the regulation of oil and gas operations and protecting public health, the environment and wildlife resources.

Martinez said that the appellate court's decision "clearly states that health and safety must be prioritized with regards to oil and gas industry in the state."

"Based on that decision and [the Firestone house explosion] it's clear that all drilling activity should be halted immediately and the danger of fracking should be investigated in full," Martinez said.

A source pointed out to EcoWatch that "Fractivist" Shane Davis, a biologist who started the fracking resistance in Colorado several years ago, happened to live in Firestone and "literally moved out of the town for this very reason."

Incidentally, Davis detailed in a January blog post about the dangers of living nearby drilling operations.

One landowner's decision to lease their minerals to the fracking industry "can place hundreds, if not thousands, of innocent people at risk from the dangers of the fracking industry's toxic air, groundwater contamination, fugitive emissions, failed equipment, human error, and even a blowout which is the most dangerous to communities that are close by," Davis wrote on Fractivist.org.

Anadarko said the wells will remain shut in until the company's field personnel can conduct additional inspections and testing of the associated equipment, such as facilities and underground lines associated with each wellhead. The wells will not be restarted until each has undergone and passed these additional inspections. Anadarko currently anticipates the process will take two to four weeks.

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What if Fracking the Marcellus Shale Doesn't Pan Out?

By Nancy LaPlaca

For the gas industry and some utilities that are racing to build as much gas infrastructure as possible, there's a lot riding on a shale gas "play" known as the Marcellus. For those who aren't buried in natural gas minutiae, a "play" is an area where there's lots of fracking for natural gas.

U.S. shale gas production (i.e. from hydraulically fractured wells) has grown steeply over the past 17 years and is now 67 percent of total U.S. natural gas.

Gas prices have historically been extremely volatile, but gas companies and utilities are saying that it will stay low for a long time—almost indefinitely—and they base much of that argument on the Marcellus, the largest source of fracked gas in the U.S.

The Cost of Natural Gas is Extremely Volatile

The cost of natural gas has always been volatile and its price has been a roller-coaster ride for the past decade. Duke Energy's former CEO, Jim Rogers, famously called it the "crack cocaine" of the power industry. And because the cost of fuel is what's known as a "pass-through," electricity customers reimburse the utility for its fuel costs. This means that utilities and their shareholders, don't really have skin in the game when it comes to fuel costs. And in 2014 alone, electric utilities around the U.S. spent $42.4 billion purchasing natural gas for electric power plants (and another $39 billion for coal).

The chart below shows the volatility of natural gas since 1997. The two biggest spikes are Hurricane Katrina (August 2005) and the run-up in oil and gas costs which peaked in July 2008 with oil at $147/barrel and natural gas at $13/MMBtu.

EIA

Key to Understanding Natural Gas Price Volatility: It's Priced at the Margin and Utilities Only Hedge a Year or So in Advance

One of the keys to understanding natural gas pricing is that it's priced "at the margin." In plain language, this means that today's price reflects the immediate past and the immediate future. Due to the volatility of gas prices, prices for natural gas are usually only "hedged" (i.e. 'locked in') a year or less in advance. In Florida, utilities paid $6 billion too much for natural gas over a 15 year period after the price of gas crashed. So while hedging gas can save money over certain time periods, it can also be a big money-loser.

This means that beyond the one year when gas prices are hedged, consumers must pay whatever the gas costs, no matter what. And because fuel costs are "pass-throughs," if the utility's cost estimates are off, it's the customers who pay, not the utility or shareholders.

Despite the Volatility of Natural Gas Prices, EIA Assumes Natural Gas at $5/MMBtu from 2030 to 2040

Despite the extreme ups and downs of natural gas pricing, the U.S. Energy Information Administration's (EIA) 2017 Annual Energy Outlook projects that the cost of natural gas will remain at bargain-basement levels from 2030 to 2040 at $5.00 per MMBtu. This is 20 percent below what EIA forecast in its 2015 Annual Energy Outlook price forecast over the 2015-2040 period.

Average Decline Rate for Shale Gas Well is 75-85 Percent Over First Three Years

While the increase in U.S. shale gas production is stunning, so are the decline rates for individual wells, which average 75-85 percent decline over the first three years. As geoscientist David Hughes points out, a steep decline rate for each well means that 30-45 percent of a play's production must be replaced each year by more drilling. In some areas of the U.S., spacing of gas wells has dropped from 1 well pad per 240 acres to 1 well pad per 10 acres.

A good example is the Haynesville shale play, which started at nearly zero in 2006 and shot up quickly until peaking in early 2012. As of 2017, the Haynesville is down by 52 percent. Despite the obvious decline in production, the EIA recently predicted an ever-higher output from the Haynesville, so that it will nearly double its 2012 peak and continue producing gas past 2040.

What About the Marcellus?

The Marcellus shale play currently provides over a third of total U.S. shale gas produced and is mainly in Pennsylvania but also includes eastern Ohio, northern West Virginia and southern New York state. The top five shale-producing counties in Pennsylvania have accounted for 65 percent of cumulative production from the Marcellus play, demonstrating the fact that most gas is produced from a few "sweet spots."

The EIA's overblown estimate of future gas supplies is higher for the Marcellus shale than any other play.

The chart below, Figure 1 from Hughes' 2016 study, shows the estimated recovery for several plays from the EIA's Annual Energy Outlook for 2014, 2015 and 2016. The 2016 estimate for the Marcellus play, in red, shoots up higher than any other play in the U.S. and is in fact 76 percent higher than the Annual Energy Outlook 2014 estimate. Note that the short black bar on the right is actual gas recovery. The Annual Energy Outlook 2016 estimate is also triple the estimate by the U.S. Geological Survey.

One constraint that's seldom mentioned is geological: many sweet spots already have so many wells that it's impossible to drill more wells without draining gas from adjacent wells, known as "well saturation."

During 2014 "Polar Vortex" Wind Power Saved Customers $1 Billion Over Two Days

Can clean energy really save money compared to natural gas fuel costs?

In early January 2014, an event called the "Polar Vortex" plunged the Northeast and Great Lakes region into a bitter cold. During those two days, as the cost of natural gas on the spot market skyrocketed to meet the huge demand, wind energy saved customers a stunning $1 billion over two days.

A more recent study by Synapse Energy Economics reports that if the use of wind energy doubled in the PJM Interconnection beyond current requirements, 12 states would save customers $7 billion per year, in part because wind energy would displace the need to purchase fuel.

Where is the U.S. Today on Natural Gas Production?

The latest numbers from the EIA report that year over year, U.S. natural gas production—and oil production—decreased from 2015 to 2016. Whether this trend continues or is merely a temporary decline, is yet to be seen.

EIA

But it's certainly worth watching. Any decreases in production might signal higher prices down the road, calling into question all of the math utilities are using to justify their massive investments in gas pipelines and power plants.

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Oil pad near Little Missouri River. NPCA/Flickr

Oil Pipeline Spills 1,050 Gallons Into North Dakota Tributary

A pipeline in western North Dakota spilled an estimated 756 gallons of oil and 294 gallons of saltwater, a drilling byproduct, into a tributary of the Little Missouri River, the Associated Press reports.

The spill was discovered April 22, approximately 5 miles southwest of the city of Marmarth and was reported that same day, the North Dakota Department of Health announced. The spill originated from a buried three-inch pipeline operated by Oklahoma City-based Continental Resources.

The spill polluted a 14-mile stretch of Little Beaver Creek but did not reach the larger waterway.

"At the time of the release there was a high-enough flow in the Little Missouri that it was actually pushing water back up into Little Beaver Creek, so that prevented any from getting into the Little Missouri," Health Department environmental scientist Bill Suess explained to the AP.

Suess said that the cause of the leak is unknown, with excavation work still underway. More than three-fourths of the discharge has been cleaned up as of Sunday.

He added that the thick consistency of the oil causes it to clump together in the water and form balls that float down the river, making it "pretty easy to collect."

There were no immediate indications of damage to wildlife or livestock, the AP said.

In 2014, the New York Times reported on the industry's increasing number of spills in North Dakota as a result of the area's fracking boom:

"Over all, more than 18.4 million gallons of oils and chemicals spilled, leaked or misted into the air, soil and waters of North Dakota from 2006 through early October 2014. (In addition, the oil industry reported spilling 5.2 million gallons of nontoxic substances, mostly fresh water, which can alter the environment and carry contaminants.)"

Continental Resources, the largest operator in the Bakken shale formation, leads North Dakota in active wells, spills of all kinds, and wastewater or brine spills, InsideEnergy noted from the Times report.

Harold Hamm, founder and CEO of Continental Resources, is an outspoken Donald Trump supporter and discussed with Bloomberg in January his hopes for energy industry regulations rollbacks under the Trump administration and the prospect of U.S. oil independence and increased shale oil drilling.

EcoWatch has covered a number of pipeline spills already this month. The Buffalo Pipeline, owned by Houston-based Plains All American Pipeline, L.P., leaked approximately 450 barrels, or roughly 18,900 gallons, of crude oil onto farmland in Kingfisher County, Oklahoma last week. A busted pipeline spilled crude oil into a Strathcona County creek in Alberta, Canada on Saturday. And in mid-April, Energy Transfer Partners' new Rover Pipeline, which is still under construction, spilled 2 millions of gallon of drilling fluids into two of Ohio's wetlands.

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Widely-Opposed Pipeline 'Confirms Worst Fears' After Two Spills Into Ohio Wetlands

Energy Transfer Partners' new Rover Pipeline has spilled millions of gallons of drilling fluids into Ohio's wetlands. Construction of the $4.2 billion project only began last month.

According to regulatory filings obtained by Sierra Club Ohio, on April 13, 2 million gallons of drilling fluids spilled into a wetland adjacent to the Tuscarawas River in Stark County. The next day, another 50,000 gallons of drilling fluids released into a wetland in Richland County in the Mifflin Township. The spills occurred as part of an operation associated with the pipeline's installation.

Dallas-based Energy Transfer Partners is the same operator behind the controversial Dakota Access Pipeline.

The U.S. Federal Energy Regulatory Commission approved the Rover Pipeline's construction in February. The 713-mile pipeline will carry fracked gas across Pennsylvania, West Virginia, Ohio and Michigan and Canada, and crosses three major rivers, the Maumee, Sandusky and Portage, all of which feed into Lake Erie. The pipeline is designed to transport 3.25 billion cubic feet of domestically produced natural gas per day.

Completion of the Rover Pipeline is planned for November 2017. Energy Transfer spokeswoman Alexis Daniel told Bloomberg that the spills will not change the project's in-service date.

"Once the incidents were noted, we immediately began containment and mitigation and will continue until the issues are completely resolved," she said.

Environmental groups are fighting to stop the pipeline's construction.

"Construction just began just a few weeks ago, yet Energy Transfer has already spilled more than 2 million gallons of drilling fluids in two separate disasters, confirming our worst fears about this dangerous pipeline before it has even gone into operation," said Jen Miller, director of the Ohio chapter of the Sierra Club.

"We've always said that it's never a question of whether a pipeline accident will occur, but rather a question of when. These disasters prove that the fossil fuel industry is unable to even put a pipeline into use before it spills dangerous chemicals into our precious waterways and recreation areas.

"Construction on the Rover Pipeline must be stopped immediately, as an investigation into Energy Transfer's total failure to adequately protect our wetlands and communities is conducted."

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BP Global

BP Arctic Oil Well Still Leaking, Too Unstable to Shut Down

BP and U.S. Environmental Protection Agency officials spent the holiday weekend trying to repair a leaking oil well on Alaska's North Slope. Officials said the well is too unstable to shut down because of frigid temps in the high Arctic, but have released the pressure on one of the main leaks.

It appears that 1.5 acres of the remote area near Deadhorse, Alaska have been affected by the spill. Native communities were notified and non-essential workers were forced to evacuate. However, no injuries to crew or wildlife have been reported.

"Crews are on the scene and are developing plans to bring the well under control," said BP spokesperson Brett Clanton, in a release on Saturday. "Safety will remain our top priority as we move through this process."

There were initially two main leaks, one near the top of the rig that was releasing methane and the other down the assembly line spraying crude oil in a mist over the ice. Officials were able to detect both leaks using infrared cameras.

"Based on an overflight with infrared cameras, the release appears to be contained to the gravel pad surrounding the wellhead and has not reached the tundra," Clanton said.

Crews are still getting the situation under control and no updates have been reported in the last 12 hours.

As natural gas operations have begun taking shape in Alaska, reports of leaks have become more frequent. There had been an ongoing, very large leak occurring at Cook Inlet, which was spewing 210,000 cubic feet of gas per day for nearly four months, but finally Hilcorp Alaska announced Friday that a temporary repair has stopped the leak. However, the effects on marine life, including critically endangered beluga whales, is still unknown.

"Oil companies continue to treat Alaska with reckless abandonment, threatening its pristine waters, wildlife and communities," said Dan Ritzman, director of Sierra Club's Alaska Program.

"Big Oil has repeatedly proven it can't drill for fossil fuels safely, it has repeatedly proven they can't transport it safely, and it has repeatedly proven they can't be trusted with the safety and well-being of the state and its habitat. It's past time that Donald Trump and his friends in the fossil fuel industry put Alaska ahead of corporate polluter's profits which only threaten the state's beauty and environment."

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Trans-Alaska Pipeline, northern Brooks Range, Alaska. Photo credit: U.S.Geological Survey / Flickr

Fracking Comes to the Alaskan Arctic

By Scott L. Montgomery

Arctic lands and waters hold irresistible allure for global oil companies. Despite opposition from environmental groups and President Obama's 2016 ban on drilling in federal Arctic waters, exploration in Alaska has revealed massive new volumes of oil.

This comes at a time of low oil prices, when many observers felt the Arctic would remain off limits. Alaska has proved precisely the opposite. Although it has gone largely unnoticed outside the industry, foreign firms are partnering with American companies to pursue these new possibilities. I expect this new wave of Arctic development will help increase U.S. oil production and influence in world oil markets for at least the next several decades.

This is a global story, spurred by continued growth in world oil demand, especially in Asia; the dynamism of the oil industry; and the fact that the U.S. has become a major new petroleum exporter, something that would have seemed impossible only a few years ago. Such realities imply that decisions made in Washington, DC are far from the only forces shaping U.S. energy and climate change policy.

Fracking Comes to the Arctic

Over the past year, oil companies have discovered volumes on Alaska's North Slope totaling as much as five billion barrels or more of recoverable oil. This is a 14 percent increase in U.S. proven reserves, based on recent estimates, which is no small thing.

One discovery, "Horseshoe," made this year by the Spanish company Repsol in partnership with Denver-based Armstrong Oil and Gas, is the largest new U.S. find in more than 30 years. It is estimated at 1.2 billion barrels and comes just after a find by ConocoPhillips in January, called "Willow," evaluated at 300 million barrels.

Both of these are dwarfed by "Tulimaniq," a spectacular discovery drilled by Dallas-based Caelus Energy in the shallow state waters of Smith Bay, about 120 miles northwest of Prudhoe Bay, in October 2016. Caelus has confirmed a total accumulation of as much as 10 billion barrels of light, mobile oil, with 3-4 billion barrels possibly recoverable at current prices of about US$50 per barrel.

Alaska's North Slope region, including the National Petroleum Reserve (NPRA), Arctic National Wildlife Refuge (ANWR) and Trans-Alaska Pipeline (TAPS). U.S. Geological Survey / Wikipedia

These new finds may only be the beginning. Tulimaniq will produce from reservoirs of the same age as Horseshoe and Willow, 75 miles to the southeast. This strongly suggests that a large new stretch of the North Slope, mostly on federal land and in state waters (within three miles of shore), has been defined for further exploration. Burgundy Xploration of Houston and Australia-based 88 Energy also have another new drilling program underway to test shale intervals known to have sourced some of the oil at Prudhoe Bay, a supergiant field that has produced some 13 billion barrels to date.

A number of these new wells will be fracked—the first use of this technique in the Arctic. One or more of the oil-bearing rock units at sites being explored on the North Slope have low permeability, meaning that oil can't flow within them very well or at all. Company engineers expect that hydraulic fracturing will be able to free such oil so it can be produced. Such has been the result for other shales and low-permeability reservoirs in places like North Dakota and Texas.

The logistics of finding large quantities of water and sand needed for fracking in the Arctic will be challenging and probably more expensive than similar operations in the lower 48 states. It remains to be seen whether operators will clean, reuse and carefully contain frack water.

Green Lights from the Trump Administration

In another significant find, Italian company Eni has developed an oil field that lies in state waters and so is not affected by Obama's drilling ban. But the oil reservoir extends into federal waters of the Beaufort Sea. Called the Nikaitchuq Unit, it lies just west of Prudhoe Bay and is producing around 25,000 barrels per day.

Eni developed this field between 2005 and 2015 using an artificial island to drill horizontal wells in various directions from a single site. The company stopped activity in 2015 when prices collapsed, but intends to drill up to six wells this year. Its leases, which continue north into federal waters, were not automatically canceled by the federal ban, but Eni needs a federal drilling permit and has submitted an application to the Interior Department. The company plans to run a long horizontal well to access the additional oil, thereby avoiding any need for a rig in federal waters.

The Interior Department is now reviewing Eni's application, which I expect it will approve. Geologic studies indicate that the oil continues across the state/federal boundary and Eni's proposal to use a horizontal lateral from an existing drill site appears to be aimed at minimizing environmental impacts.

Moreover, the Trump administration has pledged to promote fossil fuel development. Interior Secretary Ryan Zinke is a former congressman from Montana, which produces oil, gas and coal and Alaska senators Lisa Murkowski and Dan Sullivan are strong proponents of oil and gas development.

The Oil Industry's New Dynamics

Why is all of this new Arctic drilling happening at a time when oil prices are low and in a place where production costs are high? The oil price collapse that has occurred since mid-2014 is the deepest slump since 1986.

Oil companies have ways of being nimble in hard times, such as selling assets, adjusting production levels and seeking mergers. Now rapid innovations in drilling, seismic imaging and data processing enable well-run companies to cut costs in multiple areas. Some firms can make money today at prices as low as $35 to $40 per barrel or even lower. This includes drilling offshore and fracking onshore.

Innovation and cost-cutting have made U.S. firms a potent global force and eroded the OPEC's [Organization of the Petroleum Exporting Countries] dominance by keeping oil supplies high, despite a significant production cut by the cartel and many non-OPEC producers, including Russia. In this new era, smaller companies are making inroads in areas once reserved for giants like BP and Exxon. This shift is significant because smaller, independent companies, for whom new discoveries are especially important, tend to be aggressive explorers.

Oil remains our one unreplaceable energy source. Global mobility and a modern military are, as yet, inconceivable without it. Growth in global demand, centered in developing Asia, will continue for some time, as it did even from 2010 through 2014 when prices were above $90 per barrel.

The U.S. now exports around 5.7 million barrels per day of crude oil and refined petroleum products, double the level of five years ago and by far the largest volume in our nation's history, thanks to major increases in sales to Japan, South Korea, India, Taiwan, Singapore and China. In short, we would be expanding fossil fuel production even without a Trump administration.

If these new discoveries become producing fields, the Alaskan Arctic will write a new chapter in the U.S. oil industry's dramatic ascent. It will increase our leverage over OPEC and may help to counter Russia's geopolitical influence. This prospect raises a new question: How will we will use our clout as the world's most important new oil power?

Reposted with permission from our media associate The Conversation.

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Photo credit: Shutterstock

100,000 Acres of Public Land in Colorado at Risk From Fracking, Groups File Administrative Protest

Conservation groups have filed Tuesday an administrative protest challenging a federal decision to offer for leasing in June more than 100,000 acres of federal public land in northern Colorado for oil and gas industry fracking. The leasing decision, being pushed by the Trump administration's Bureau of Land Management (BLM) over local community opposition, threatens some of Colorado's most treasured and scenic landscapes and wildlife species.

"Fracking these pristine public lands would come at the cost of imperiled wildlife, clean air and clean water, meanwhile worsening climate change," said Michael Saul, senior attorney with the Center for Biological Diversity. "This is classic Trump corporate cronyism that sacrifices public values for oil industry profits."

The decision paves the way for thousands of new fracked oil and gas wells in the Piceance Basin, increasing the strain on the already overdrawn Upper Colorado River with water withdrawals and the threat of new oil spills. It would pave the way for fracking in largely untouched Grand County, the headwaters of the Colorado River and a world-famous destination for fishing, hiking and tourism.

"The water quality of the Colorado River headwaters is at an all-time low and water demand is at an all-time high. Awarding leases that allow fossil fuel extraction in the headwaters will not improve the looming water crisis," said John Weisheit, Colorado Riverkeeper with Living Rivers. "Restraint on all forms of consumptive use is the best and wisest solution for improving a damaged watershed. Public land management decisions must be based on this reality and BLM must take the lead in restraining those uses, not open the door to more."

This massive plan, casually dismissed by the BLM as having "no significant environmental impact," will harm a host of sensitive and listed species including Colorado River and greenback cutthroat trout, greater sage grouse, Canada lynx, black-footed ferrets, white-tailed prairie dogs, rare wildflowers, deer, elk and moose. Resulting greenhouse gas pollution would worsen climate change, whose impacts the region is already feeling with reduced Colorado River flows.

"Protecting the quantity and quality of Colorado River flows, which face overwhelming challenges from increased demand and reduced supply, is inextricably linked to management decisions on public lands that cut back on water use and protect water quality," said Kate Hudson, western U.S. advocacy coordinator with Waterkeeper Alliance.

"BLM's pending decision to open over 100,000 acres of public lands in the headwaters of the Colorado River to oil and gas leasing and the inevitable impacts that fossil fuel extraction will have on the river, its tributaries and our climate, heads us in exactly the wrong direction. It will only hasten the collapse of this critical and fragile resource."

The giant sale threatens to industrialize lands and pollute air and water at the doorsteps of Rocky Mountain National Park and Dinosaur National Monument. Groups filing the protest include the Center for Biological Diversity, Living Rivers, Waterkeeper Alliance and Sierra Club.

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