Colorado BLM sells all the oil, gas leases up for bid after dramatically slashing the offerings

All the federal oil and gas leases offered at the Colorado Bureau of Land Management’s quarterly sale were bought Thursday. But the 7,847 acres of public land leased were a far cry from the roughly 224,000 acres of minerals originally on the block. The sale of the leases, mostly in western Colorado, netted a total of $981,143 in rent and fees, which will be split between the federal government and the state of Colorado. In September, the BLM said it would offer leases on parcels totaling 224,341 acres. The agency then pared the offering a few times in response to requests from Gov. John Hickenlooper, U.S. Sen. Michael Bennet and local elected officials and residents in the North Fork Valley of southwest Colorado. They raised concerns about the potential impacts of drilling on wildlife habitat, tourism and agriculture and approval of leases before the BLM finished updating its resource management plan for the area including the North Fork Valley. Another development was a preliminary injunction issued by a federal judge in Idaho in a lawsuit challenging changes the national BLM office made to shorten the time periods for public comment and revise requirements for environmental review to streamline and speed up leasing. The ruling in September by Chief U.S. Magistrate Ronald Bush in Pocatello, Idaho, temporarily replaced part of the Trump administration’s policy on the leasing of public lands in greater sage grouse habitat.
Colorado BLM officials have said the oil and gas leases pulled from Thursday’s auction could be offered at a later sale...MORE

Zinke plans to appeal court ruling allowing drilling In Badger-Two Medicine

U.S. Interior Secretary Ryan Zinke told the Associated Press today that the federal government plans to appeal a federal court ruling allowing oil and gas drilling in the Badger-Two Medicine area outside Glacier National Park. In September a federal judge reinstated drilling rights on a nearly 10 square mile lease in the area. The Obama administration voided those leases, originally granted by the Reagan administration. Zinke asked government attorneys to appeal the September ruling, saying it would be inappropriate to allow drilling in the Badger-Two Medicine...MORE

Montana senator wants to eliminate wilderness study areas

Montana Republican U.S. Sen. Steve Daines has introduced a bill to eliminate wilderness study area designations on nearly 450,000 acres of federal lands in the state, a move he said will improve public access but was met with jeers from some conservation advocates. Called the Protect Public Use of Public Lands Act, the bill moves to release five wilderness study areas managed by the U.S. Forest Service. If released, the lands would stay in federal control but restrictions on uses like logging and grazing and motorized use could be changed. The bill targets study areas that the Forest Service didn’t recommend to become wilderness and all but two that were included in a resolution supporting release that was passed by the Montana Legislature last spring. The 151,000 acre Hyalite-Porcupine-Buffalo Horn Wilderness Study Area is not included in Daines’ bill. During a conference call with reporters on Thursday, Daines said the designations have been an impediment to Montanans’ ability to use the lands over the last few decades. “I’m fixing that today,” he said...more

Ah, but there is something else afoot here:

The bill does have support from motorized use advocates, some county commissioners near the study areas and mining industry groups. Daines also said that releasing the study areas might help advance a bill seeking to ban new mining claims on 30,000 acres of public land east of the Paradise Valley, called the Yellowstone Gateway Protection Act. In the past, Daines has expressed uncertainty about whether that bill — sponsored by Montana’s Democratic U.S. Sen. Jon Tester — has a serious chance of passage. He said Thursday that the release of the study areas may help forge bipartisan support for that measure. “Pairing these would be one path forward,” he said.

Looks like we may have a little tit for tat going on here...and its about time. Any new legislative withdrawals, wilderness areas, parks, monuments, nca's, etc. should contain provisions to return other areas to multiple-use.

Drilling Down on OPEC and the Oil Market

Fifty is only half as good as one hundred, but it's twice as good as twenty-five. That's how anyone who is anyone in the international oil business saw it earlier this week when they gathered in Houston for the annual CERAWeek conference sponsored by HIS Markit, the data and information firm. They were referring to the per-barrel price of crude oil, of course. When they gathered last year, prices hovered around $25 per barrel as the Saudis sought to drown the U.S. shale oil industry in cheap Saudi crude. New year, new oil minister. Khalid Al-Falih, now in charge of Saudi policy, has whipped other producers into line to cut back production, and the mood as the conference opened was "ebullient, buoyant, hopeful," James Carr, Canada's natural resources minister, declared. Bob Dudley, CEO of BP, announced he is planning that prices will hold at $55 to $60 for the next five years, high enough to allow him to maintain capital spending at current levels, rather than continue cuts that have caused him to sweat 30 percent out of his capital budget since the oil price collapse of 2014. "What a difference a year makes", enthused one oilman. Alas, what a difference a day makes. On Wednesday, the unopened champagne bottles were returned to the coolers. The U.S. Energy Information Agency (EIA) announced that crude oil stockpiles are at record levels after jumping in the past month by 8.2 million barrels, rather than the 1.7 million barrels experts had forecast. Prices fell by about 7 percent, more than $5 per barrel, to below $50, as fears grew that the agreement by OPEC members and 11 non-members, including Russia, to rein in production is failing to prevent a continued over-supply of crude. That's one reason ConocoPhillips CEO Ryan Lance is betting prices will be "lower for longer … [it's a] "well-supplied world out there."...more

Years after water well explosion, Texas family still waiting for answers from agency

More than two and a half years have passed since Cody and Ashley Murray’s water well exploded, transforming their Palo Pinto County ranch into an emergency scene. With their burns healed and gone to scars, the couple and their two young children have since returned to their 160 acres outside of Perrin, about 60 miles northwest of Fort Worth. The Murrays still lack a trusted source of local drinking water. And they're still waiting for answers about whether nearby gas production was to blame for the fireball that shot toward Cody’s face that August day — and why the Texas Railroad Commission, the state’s oil and gas regulator, seemed to miss signs warning that something like that could happen in their cattle-and-pumpjack-sprinkled slice of the Barnett Shale. Outside experts have linked the explosion to nearby gas drilling. The Railroad Commission won’t comment on details of its investigation, other to confirm that it remains open. The blast was caused by a buildup of methane gas in the water well that caused enough pressure to send water spraying in the family's pump house. Ashley Murray turned off the well pump and asked her husband to investigate, and when he turned it back on, the gas exploded, severely burning Cody, his father Jim; and Alyssa, Cody’s 4-year-old daughter. Cody Murray took the brunt of the flames; with burns on his arms, upper back, neck, forehead and nose, the former oilfield worker spent a week in a burn unit...more

The Rush To Regulate Oil And Gas Accelerates As Jan. 20 Approaches

Since election day delivered the realization that President Obama’s two terms in office would be succeeded by a Republican rather than a fellow Democrat, the Administration’s regulatory agencies have accelerated their efforts to cram through as many last-minute regulations as possible. Nowhere has this effort been more focused than on the oil and natural gas industry. Since November 8, we have already seen the following events take place:

• On November 15, the Bureau of Land Management (BLM) issued its final rule on venting and flaring natural gas from wells drilled on federal lands.  Later that same day, both the Western Energy Alliance (WEA) and the Independent Petroleum Association of America (IPAA) filed suit in federal court challenging the regulation.  The industry lawsuit contends that the new regulation goes outside of the TBLM’s authority by creating an air quality regulatory program, and area of regulation reserved to the Environmental Protection Agency (BLM) and state environmental quality agencies.
• On November 17, Interior Secretary Sally Jewell announced unilateral cancellation of 65 oil and gas leases in the White River National Forest.  Sec. Jewell said she was taking the action due to the fact that the leases, which sit atop the Mancos Shale, were “non-performing”.  She failed to note that the main reason the leases were in that “non-performing” state is that they have been tied up in the feederal bureaucracy for the entire duration of the Obama Administration.  The cancellation of these leases is especially impactful since these leases represent the best opportunity to develop the Mancos Shale, which the United States Geological Survey (USGS) estimated in June of this year to be the second largest deposit of natural gas in the United States, behind only the gargantuan Marcellus Shale in the Northeastern part of the country.
• On November 18, the Department of the Interior (DOI) issued its final five-year plan for leasing on federal lands and waters.  The plan removes areas of the Arctic waters in the Chukchi and Beaufort Seas – which had been included in its previous draft – from leasing consideration.  The plan represents a victory for anti-development groups who have long sought to block development of oil and gas resources in the U.S. Arctic region. As I wrote in August, the plan will also leave the U.S. without any program to compete for resource plays in the Arctic at a time when Russia has created the world’s largest fleet of ice-breaker ships and is aggressively moving into the region.  DOI Secretary Sally Jewel cited “industry’s declining interest” in the region as a major reason for the decision, but again failed to note that the Administration’s efforts to make development in the region as difficult and expensive as possible have helped to reduce such interest.

Alaska Senator Lisa Murkowski, Chairman of the Senate Energy Committee, was outraged by DOI’s refusal to include the Arctic lease sales in its final plan. “Why the president is willing to send all of those benefits overseas is beyond explanation,” Murkowski said. “And it is even more stunning that just one day after urging the new administration to stand up to Russia, he continues to cede leadership on Arctic energy production to them.”...more

How the West Was Lost: Ranchers Devastated by Fossil Fuel Boom

By Emily J. Gerts      
      Standing under the vast blue dome of the Wyoming sky on an August morning, rancher L.J. Turner gazes at a puddle of brown water at the bottom of a grass-ringed pit covered in thick mud. Judging from the scattering of antelope or deer bones near the water’s edge, it’s a potential death trap for any long-legged animal tempted to clamber down to take a drink.
      In a state as arid as Wyoming, an all-but-empty water hole in midsummer would not seem remarkable. But it’s an unwelcome new normal to L.J., whose grandparents homesteaded this ranch in 1918, and his wife, Karen.
      As L.J. describes it, this was just one of several spring-fed pools on the ranch, which is in the heart of Campbell County, about 18 miles south of the town of Wright. A creek connected the water holes, he says, which were full of fish and frogs even in the hottest summer. The pools quenched the thirst of his livestock, attracted wild pronghorn and mule deer, and were destinations for family picnics.
      “I’ve seen this creek here be running water a quarter of a mile wide,” he says. “It would be as high as that rim. It would stay up all the time. On down below here, the banks of the creeks were lined with rosebushes and willows.”
      “When I was small, we had fish here in the creek,” L.J. says. “Nothing fancy, no trout stream or anything like that. There was bullhead, there was perch, there was sunfish, fish that a kid can mess around with. In the wintertime, whenever I’d get to thinking I was an ice skater, I’d go down on one of these water holes and cut a hole in the ice. The water would just boil up out of the thing. It’d flood the ice completely. That night it’d freeze, and I’d have a marvelous fresh bunch of ice to go play on.”
      A slight stoop in L.J’s shoulders, and the lines on Karen’s fair-skinned face, hint at the decades the Turners have spent ranching, most of them on this land in Wyoming’s Powder River Basin. L.J., 75 and gray haired, speaks in a slow Western drawl, while Karen, 69, delivers her thoughts at a faster pace—possibly a remnant of her New York City girlhood. Both have ready smiles for visitors to their spacious, airy ranch house, where hand-sewn quilts cover the beds and a collection of wildlife prints and wood carvings, acquired in travels around the West and the world, bear witness to their love of nature.

      But the wild roses, fish, and frogs on Turnercrest Ranch have vanished, along with many of the cottonwoods, since the federal government in the 1980s began to lease land for coal mining just east of the ranch, on grassland managed by the United States Fish and Wildlife Service.
      The Turners paid high inheritance taxes on several thousand acres of federal grazing permits dating from the 1930s for the area, called Thunder Basin, after L.J.’s mother bequeathed the ranch to their children. Today an open-pit coal mine covers most of that land. Called North Antelope Rochelle, the mine is owned and operated by Peabody Energy. By annual output in tons per acre, it is the world’s biggest coal mine. The second largest is Arch Coal’s Black Thunder mine, 10 miles to the north.
      “The well here at the house, when we first got married, it was almost artesian,” says Karen. “The water came within four feet of the surface.” The water level has dropped dramatically as mining companies suck up groundwater—a process called dewatering—to gain access to coal.
      “We have wells now that are over 500 feet deep,” she adds.
      “The one up at the house is a thousand,” L.J. says.
      “And it costs a lot of money to drill a water well,” says Karen, “thousands and thousands of dollars.”
      Recently they learned that the PVC lining had collapsed in a replacement well they had drilled about 10 years ago, at a cost of more than $10,000. It should have lasted for decades. “It was plastic casing, it’s pretty indestructible, and it doesn’t rust. So what happened?” L.J. says. The technician who inspected it told the Turners the likely cause was underground vibration from fracking at nearby oil wells, although “to be fair, the guy said it could be an earthquake that did that,” L.J. adds with a laugh.

      Wyoming is nicknamed the Cowboy State. But coal, oil, and natural gas—not cows or sheep—dominate the state’s economy. Wyoming is one of the top 10 natural gas producers in the country and supplies 2 to 3 percent of U.S. crude oil production as well as two-fifths of the nation’s coal, according to the federal Energy Information Agency. Wyoming supplied 33 states with coal in 2013.
      “Fossil fuel industries, collectively, they’ve floated Wyoming’s boat for the last several decades,” says Connie Wilbert, a Wyoming native and the director of the state’s chapter of the Sierra Club. For decades the epicenter of the state’s energy development has been the Powder River Basin. Across a wide swath of the West, from the oil-and-gas-laden Bakken Formation in eastern Montana and western North Dakota to Colorado’s Denver-Julesburg Basin, advances in extraction techniques and equipment have made it possible to get at once-inaccessible oil and gas deposits. The Exxon Valdez and Deepwater Horizon oil spills were dramatic disasters that have inspired feature films and attracted years of national news coverage. The headlong exploitation of fossil fuel reserves in the West has been a slower-moving story of environmental devastation, with people like the Turners pitted against powerful oil and gas companies, coal giants, and the government as fossil energy development industrializes an iconic American landscape.
      In the late 1990s, a pair of laid-off oil drillers named Bruce Martens and Chuck Peck found a way to pump groundwater off shallow coal seams in the Powder River Basin, which freed natural gas from the coal, turning it from a nuisance into a valuable commodity. They eventually sold their gas fields for $40 million, setting off an energy boom that has generated thousands of jobs and billions of dollars in state revenues.
      In the process, nearly 350 billion gallons of water were pumped out of the ground, at rates far faster than Wyoming’s average of 16 inches of rainfall a year could replenish.
      The coal bed methane boom went bust with the Great Recession, and low oil and natural gas prices have combined with bankruptcies in the coal industry to throttle Wyoming’s economy. A full fifth of the state’s mining jobs, around 5,500 positions, vanished during the first quarter of 2016 alone—a big hit in a state with a population of 586,000. Wyoming is now contending with a budget gap as large as $150 million.
      Jobs and tax revenues are not all that the Cowboy State has lost in the past decade and a half. Between 2001 and 2011, Wyoming led Western states in land consumed by development, according to The Disappearing West, a recent report from the nonprofit Conservation Science Partners and the Center for American Progress. The state’s four northeastern counties, which cover Wyoming’s portion of the Powder River Basin, lost more than 205,000 acres largely because of energy development. More than half those acres were in Campbell County, where development ate up open space nearly seven times faster than in any other part of the state.
      The Turners are convinced that dust from North Antelope Rochelle sickened their livestock, saying that most of the calves they’ve pastured elsewhere have typically survived weaning, while many pastured here have not. “If we have a health problem with them again,” he says, “we’ll know definitely.”
      The Turners also miss the rural peace that once surrounded them, before methane flares at the oil wells lit up the night and a procession of tanker trucks began traveling the property daily. They miss the pronghorn and sage grouse that have disappeared from the ranch as dirt-and-gravel access roads, concrete drill pads, and power lines have broken up the open spaces and the coal mines have consumed the grassland.
      The Turners admit they’ve welcomed the income from fees paid to them by oil and gas companies that gained access to their land. “The kids have been able to get a better education than we could have given them otherwise,” says L.J.
      Jill Morrison, an organizer with the Powder River Basin Resource Council, a landowners advocacy group that counts the Turners among its members, scrolls through dozens of slides on her computer attesting to the environmental damage from the coal bed methane boom years.
      In one photo, a dead gallery forest of cottonwood trees marches along a stream bank. They were killed when a driller pumped high-sodium groundwater down the creek. A pair of images show a large ranch pasture flooded with discharged groundwater, and then the same pasture covered with whorls of dry white dust: the salt that was left behind when the water evaporated.

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Proving Them Wrong: How The U.S. Oil And Gas Industry Survived

The Saudis counted them out. So did the Russians, even many domestic analysts said North American shale and tight oil and gas production would decline in the face of low prices and that investment would dry up and output would fall. Well, guess what? They have all been proven wrong. Sure, rig counts have dropped and there have been painful layoffs of workers, but the industry is surviving and against all the “experts” advice, production of natural gas from the Marcellus and Utica shales of the U.S. Northeast is averaging 22.63 billion cubic feet per day in August, according to a Financial Times article. That is up 2 percent from July and the most since February’s all-time high of 22.78 billion cu-ft/d. Despite earlier U.S. government forecasts that combined gas output from the two shale areas lying beneath Ohio, Pennsylvania and West Virginia would decline, producers have managed to maintain volumes by tapping inventories of drilled but uncompleted wells and burrowing deeper, longer wells that yield more gas. Even though the number of drilling rigs has declined, technological developments have helped producers increase output. New production per rig now averages about 11.4 million cubic feet of gas in the Marcellus, an 18 percent improvement from a year ago, according to the article...more

OPEC Split as Oil Prices Fall Sharply

Oil prices sank again on Monday, giving consumers more of a break and causing a split among OPEC leaders about what action should be taken, if any, to halt the slide. The price drop has led to a near free fall in gasoline prices in the United States. On Monday, the national average price for regular gasoline was $3.20, 9 cents lower than it was a week ago and 14 cents below the price a year ago, according to the AAA motor club. The price at the pump generally follows oil after a few days, leading energy experts to predict lower prices for the rest of the month at least. “This is not your garden variety autumn price decline,” said Tom Kloza, chief oil analyst at GasBuddy.com, which reports fuel prices from filling stations across the country. “Clearly there is a rift in OPEC, and that means we are more likely to see a price war over the next six months. Crude oil is teetering on the brink of collapse.” Mr. Kloza predicted that the national average for regular gasoline was headed to between $2.95 and $3.10 a gallon. The average household consumes 1,200 gallons of gasoline a year, translating into an annual savings of $120 for every 10-cent drop in the price of gasoline. With the number of rigs working in the United States at or near record levels, some oil executives are beginning to express concern about investment decisions next year. In recent days several members of the Organization of the Petroleum Exporting Countries — Saudi Arabia, Kuwait, Iraq, Iran and the United Arab Emirates — have cut prices to European and Asian buyers as competition for global market share has grown fierce. With the price of the global benchmark, Brent crude oil, falling 1.5 percent on Monday to $88.89 a barrel, many analysts said Saudi Arabia, OPEC’s dominant member, might be rethinking its strategy. “Saudi comments indicate that it may have shifted from a strategy of holding prices at around $100 a barrel to a focus on market share,” said Jeff A. Dietert, head of research at Simmons & Company, an independent investment bank. “That means there is not an immediate floor on oil prices.” He said he thought that Saudi Arabia was trying to slow production growth in the United States...more

Vitter tells Interior to ‘back off’ on oil rig

Sen. David Vitter (R-La.) called on the Obama administration to leave a sunken oil rig in the Gulf of Mexico. “The development of marine reefs with significant biodiversity is an unintended benefit of many of the idle rigs remaining in the Gulf of Mexico,” Vitter said. “The Administration should back off and allow it to prosper.” In a letter to Interior Secretary Sally Jewell sent Monday, Vitter said the rig is acting as an artificial reef that has benefited the ecosystem. “Artificial reefs are becoming an indispensable resource for our Gulf fisheries,” Vitter wrote. “While this particular site has yet to obtain official status as an artificial reef site, the ecosystem that it has created and supported around it is already playing an important role in growing and sustaining our Gulf fisheries. Currently, the administration is expected to remove the Ewing Banks 947A structure, despite Louisiana requesting an exemption...more

BLM drilling permit bill attracts broad support at Senate hearing

Witnesses and committee members argued over the extent of oil and gas drilling permit delays at US Bureau of Land Management field offices. But they strongly supported a bill that would make permanent a pilot program enacted in 2005 to begin relieving the problem at a July 29 US Senate Energy and Natural Resources Committee hearing. "For years, federal policies have put federal lands at a competitive disadvantage with the state lands and private lands. This is especially true when it comes to oil and natural gas production," said Sen. John A. Barrasso (R-Wyo.), who cosponsored the June 5 measure with US Sen. Tom Udall (D-NM). "We should stop making it harder to produce energy on federal lands. S. 2440 is one way to do that," he said. Barrasso continued, "This bill will give local BLM offices the financial resources necessary to process oil and gas permits in a timely manner. It will also give BLM the ability to anticipate where permitting backlogs may develop in the future and take steps to prevent them from occurring." Asked if allowing the pilot program to expire in 2015 would affect the US Department of the Interior agency's hiring, BLM Director Neil Kornze said, "The short answer is yes. With that authorization expiring, we aren't able to offer certainty." Kornze noted in his written testimony that the pilot program was established under Section 365 of the 2005 Energy Policy Act (EPACT) in seven BLM field offices in Miles City, Mont.; Buffalo and Rawlins, Wyo.; Grand Junction/Glenwood Springs, Colo.; Vernal, Utah; and Farmington and Carlsbad, NM. US President Barrack Obama expanded the boundaries of two of the project offices—Miles City, to include the growing Bakken shale development, and Buffalo—in response to changing demand for federal oil and gas resource development on Dec. 26, 2013, Kornze said...more

Welcome to Williston, North Dakota: America's new gold rush city

Anyone who happened to pass along the northern slope of the Missouri river valley on US Route 2 in 2008, at the start of the global economic recession, would have seen a small city, suffering from the same malaise that was afflicting every other ranching-and-farming community scattered about the immense expanse of the US great plains. Young people were leaving Williston, North Dakota. The remaining residents were aging and dying off. No new industries wanted to move to an obscure corner of what was already one of the most obscure US states, plagued by a midcontinental climate where the average January night dips down to -18C and the normal July highs are 29C. If you'd stopped to ask her then, lifelong resident Rena Greaves would have said she dreamed of leaving. “It was so quiet, so boring,” she said. The constant rumble of Ford F-350 pickups and 18-wheelers means there is very rarely any quiet any more. “I’m not used to the noise. I have a lot of mixed feelings,” said Greaves. “There are new restaurants and places to shop. There are new people from all over and a lot of them are nice. “But I don’t go out any more. I don’t do anything. You can’t walk into a bar. It’s so overcrowded and you don’t know anyone.” Today's Williston is unrecognisable to its former self. Thanks to the shale-oil boom, what was once an isolated city in the emptiest corner of the continent is now the fastest-growing small centre in North America. It has the highest average wages in the US and the worst housing shortage. It is the most expensive place in the US in which to rent new housing. And it is wracked with cultural conflict between about 12,000 long-time Williston residents and at least 21,000 newcomers who’ve arrived over the past five-odd years...more

API survey finds gap between voters, federal officials on development

A substantial gap exists between registered voters’ support for more US oil and gas development on federal lands, and what they think federal officials actually are doing about it, according to a recent survey commissioned by the American Petroleum Institute. Nielsen’s random telephone survey of 1,012 largely suburban registered voters July 11-13 found 77% support more production of US oil and gas, including 92% of Republicans, 80% of Independents, and 66% of Democrats, API said on July 23. “But only 28% said the federal government does enough to encourage domestic oil and gas development,” API Upstream Group Director Erik Milito noted. “And 68%—including majorities of Democrats, Republicans, and Independents—say they would be more likely to vote for candidates who support offshore drilling,” he told reporters. “Clearly, voters do not think energy should be a partisan issue.” The survey’s results came days after the US Bureau of Offshore Energy Management (BOEM) moved a step closer to authorizing geological and geophysical surveys of the South and Mid-Atlantic US Outer Continental Shelf (OGJ Online, July 18, 2014). “These surveys will give our industry and the government a clearer picture of the oil and gas resources hidden beneath the Atlantic seafloor, although there is a lack of scientific support for some of the constraints the government might place on survey operations,” Milito said...more

A Technological Shift Could Unlock A New Oil Boom In The Permian Basin

Much larger than Eagle Ford and once thought to have reached peak production, new technology has brought us full circle back to the Permian Basin in Texas and New Mexico, where the recent shift to horizontal well drilling has rendered this play the unexpected ground zero. Determining where the next real oil boom will be depends largely on following the technology, and while the Permian Basin has been slower than others to switch from vertical to horizontal well drilling, horizontal has now outpaced vertical, and investors are lining up to get in on the game. Until about 12 years ago, virtually all wells in the Permian were vertical. As of last fall, however, horizontal and directional rig counts — meaning, non-vertical drilling rigs — have now begun to exceed vertical, according to RBN Energy. But what they’re also looking for are developers who are seeing strong economics in both vertical and horizontal wells. It’s all about balance, and this co-mingling of multiple zones — with the ability to complete both horizontal and vertical wells economically — is the best bet for investors. The Permian Basin now boasts the largest rig count in the U.S. Just this week, the number of rigs exploring for oil and natural gas in the Permian Basin increased to 560, according to the weekly rig count report released July 10 by Houston-based oilfield services company Baker Hughes. What’s more, according to Bernstein Research, the Permian Basin will top the charts for North American spending growth in 2014, with an amazing 21 percent increase. And 2013 was already a stellar year for the Permian. Permian production last year increased by 280,000 boe/d to 2.3 million boe/d, comprised of 1.4 million b/d of oil and 5.3 bcfd of gas, according to the U.S. Energy Information Administration. This technology has changed the way we think about the Permian Basin, once the darling of American oil production that became lost in the shadow of Eagle Ford and Bakken. While Eagle Ford and Bakken were viewed as the “bigger plays” at the start of the unconventional boom in the U.S., due to the fact that new technology debuted here harder and faster, the Permian is back and bigger than ever...more
“The Permian Basin is much larger than the Eagle Ford play, and it also contains over 20 potentially productive zones, while Eagle Ford has only one zone,” Parker Hallam, CEO of Crude Energy — a small-cap company, not publicly traded, operating in the Permian, told Oilprice.com.

Read more: http://oilprice.com/Energy/Crude-Oil/Back-to-Permian-U.S.-Oil-Comes-Full-Circle.html#ixzz37c1T1rL6

'Win-win' deal reportedly struck on leases in hotly contested Colo. plateau

A decadelong battle over whether to drill for gas atop a wildlife-rich plateau in western Colorado could be nearing a resolution, with environmentalists, industry, Colorado's governor and the congressional delegation reportedly backing a proposed settlement. While far from final, the proposal is aimed at resolving one of the longest-running public-lands feuds in the Centennial State. At issue is the Roan Plateau, an area blessed by an abundance of natural gas as well as major herds of mule deer and elk and genetically pure Colorado River cutthroat trout. Controversy over the Roan has simmered since 2007, when the Bureau of Land Management opened most of the lands to drilling and a year later sold roughly 55,000 acres of leases, netting a record $114 million in bonus bids. Denver-based Bill Barrett Corp., a major leaseholder, has proposed drilling as many as 3,200 natural gas wells atop the plateau. Now, attorneys representing environmental groups and industry have reportedly reached a proposed settlement that would have the Interior Department buy back some of the Roan leases and alter its preparation of a revised RMP. It would also accelerate the production of gas elsewhere, create jobs, maintain most of the "best leases" and provide regulatory certainty for all involved. That's all according to an April 1 letter from Rep. Scott Tipton (R-Colo.) obtained by Greenwire through a Freedom of Information Act request...more

Dirty Drilling Will Hurt Uintas, Greens Say

An "insidious" federally approved 400-well oil and gas development project in a "biologically critical area" of Ashley National Forest will further pollute an airshed that already "periodically experiences some of the highest concentrations of ozone in the nation," environmentalists claim in court. WildEarth Guardians sued the U.S. Forest Service, Bureau of Land Management and three agency officers, in Federal Court. WildEarth, a clean energy advocate working "to safeguard the climate," claims the project, approved in 2012, violates the National Environmental Policy Act, the Clean Air Act, the Clean Water Act and Utah water quality standards. Ashley National Forest, established by President Theodore Roosevelt in 1908, spans 1.3 million acres and six counties in northeastern Utah and southwestern Wyoming. "The 400-well project is being developed on 25,900 acres, or 40.5 square miles of the Ashley National Forest, 11 miles south of Duchesne, Utah," the complaint states. "The Forest Service has approved a development scenario that will continue for 55 years and entails the construction and operation of 400 oil and gas wells from approximately 162 well pads." The project will put at risk an "ailing" Anthro Mountain population of greater sage grouse, "which will be additionally imperiled by the project's roads, traffic, noise and industrial development and intrusion of oil and gas wells into sage habitats considered to be of crucial importance to the survival of the species," according to the complaint. The project and its infrastructure also threaten 20,000 acres of inventoried roadless areas, "the last remaining segments of the forest still characterized by pristine wildlife habitats, natural vistas, sources of clean water, quiet recreational opportunities and solitude," the complaint states...more

New Mexico oil country struggles as cities boom

Carlsbad is centered in one of the most productive regions of the oil-rich Permian Basin, which is concentrated in Texas and stretches into New Mexico. The basin has long been a robust oil corridor, but the discovery of rich fields in southeastern New Mexico and advances in drilling technology have transformed once-quiet cities like Carlsbad into boom towns. As a result, the city of 26,000 people is struggling to keep up with its fast-growing population and the accompanying challenges, from housing shortages, higher crime rates and a spike in deadly accidents between big rigs and cars on narrow country roads. It’s one of the few areas of New Mexico experiencing an economic boom. “We just can’t keep up,” Carlsbad Mayor Dale Janway said. The upswing mirrors those in North Dakota and Montana where the discovery of oil turned towns into thriving cities virtually overnight, creating similar issues of crime, road safety and lack of housing. Despite the growing pains of New Mexico’s boom, the oil industry points to the economic benefits it can bring in the form of jobs, business development and taxes. An industry trade group says it’s worked with governments to solve problems like housing. New apartment complexes have waiting lists as soon as construction starts. RV parks are overflowing with oil workers and families, who have given up on finding anything else affordable. And roadside hotel brands like the Hampton Inn and Holiday Inn Express are charging as much as $300 a night. “We have a new society out there that’s called an RV society,” Hobbs real estate broker Bobby Shaw said. The problem is that the oil industry has the unique ability to expand almost overnight, Hobbs Mayor Sam Cobb said. “You can stand up a drilling rig in two days. Twenty-five jobs are created that quickly,” said Cobb, whose town has been struggling for years to build enough houses and hotels to catch up. Carlsbad, meanwhile, is struggling to adapt to the influx of transient oil workers, a new breed for a city that previously existed more along the fringe of oil country. Past booms here have brought miners, scientists to the federal government’s underground nuclear waste dump and tourists visiting Carlsbad Caverns National Park. Eddy County, where the city is located, last year became the top oil-producing county in New Mexico, pumping out 51.5 million barrels of crude...more

Fracking Insiders See No End To Boom

Despite official predictions that the U.S. energy boom will pop like a bubble in the next 20 years, people engaged in drilling for oil and gas—from the financiers to the frackers—see no end to boom times or low gas prices, industry insiders said in Chicago Friday. Late last year the International Energy Agency predicted the U.S. would surpass Russia and Saudi Arabia to become the world’s largest energy producer by 2015 but would run out of gas, so to speak, in the 2020s. The U.S. Energy Information Administration made a similar assessment  last year, predicting production would decline after 2020 and then increased demand would drive up gas prices. But such glum assessments underestimate not only the amount of domestic shale oil and gas, but also the ingenuity of those  tapping it, the insiders suggested Friday at the Energy Forward conference hosted by the Chicago Booth Energy Group. Most shale oil wells today start strong but taper off quickly compared to conventional wells, and some cease production in 7.5 to 8 years. But drilling technologies are evolving quickly to change that, said James King, vice president for unconventional multi-stage completions with Baker Hughes, an oilfield services company...more

Judge suspends Arctic drilling, orders new environmental report

In the ongoing battle over offshore drilling, a federal judge in Alaska told regulators Thursday to redo an environmental impact study that underestimated the amount of recoverable oil and, potentially, the risks to delicate Arctic habitat. The decision by U.S. District Judge Ralph Beistline stopped short of scrapping the $2.6 billion in leases, however. His ruling followed an appeals court decision in January that federal officials had arbitrarily decided drilling companies could extract 1 billion barrels of oil from the shallow waters off the northwest coast of Alaska. That figure led to a misguided environmental study, the U.S. 9th Circuit Court of Appeals said. Now, the U.S. Department of the Interior must redo the supplemental analysis using what’s expected to be a much higher estimate for the amount of oil extractable. In the meantime, no drilling for oil or natural gas can take place...more

Editorial - State makes a point in suing over federal failure to consider oil plan

Gov. Sean Parnell has taken the next step in the long-running, slow-moving effort to tap the energy resources of the Arctic National Wildlife Refuge’s coastal plain, an area that Congress decades ago recognized as having high oil and gas potential.

The governor on Friday announced that the state has filed suit against the Department of the Interior and the U.S. Fish and Wildlife Service over those agencies’ refusal to consider the state’s plan for exploratory oil and gas activity in the 1.5-million-acre coastal plain of ANWR as required by the Alaska National Interest Lands Conservation Act of 1980.

It’s a good move and shows that the ANWR battle, although quieted nationally by an unfavorable White House and Senate, is far from over.

The source of the disagreement between the state and the federal agencies stems from a 2010-2011 Fish and Wildlife Service revising the 1988 ANWR comprehensive conservation plan, which deferred handling of the coastal plain to a 1987 ANWR resource assessment report that recommended Congress approve an oil and gas leasing program for the coastal plain.

The revision put forward by Fish and Wildlife officials didn’t include an oil and gas option but did include two options for Congress to declare the coastal plain as wilderness.
That, rightly, set off some alarms in Alaska.

The state submitted an oil and gas exploration plan in 2013 but was rejected by Fish and Wildlife. Interior Secretary Sally Jewell said authority for approving a plan expired with completion of the 1987 resource assessment report required by ANILCA.

The big flaw in the secretary’s argument, however, is that ANILCA contains no expiration date for the authority to approve a plan. The process outlined for approval of a plan of exploration activity remains on the books.

So the secretary must follow through with the process, which requires that any exploration plan submitted for approval and meeting the guidelines get at least one public comment hearing in the state and then be approved.

That hasn’t happened.

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