Registration Still Open for the January Webcast

January's complimentary webcast will be held on Tuesday, January 22nd at 10 a.m. CST and will be hosted by Mike Mueller, VP Technology Development for MicroSeismic, Inc. 

The topic will be Microseismic Monitoring: Methods and Interpretation and a full prgram description is below. Don't wait, register today

Microseismic monitoring is attracting great interest due to the application of passive seismic to shale play completion activities and the successful expansion of the method from downhole to surface and near-surface acquisition geometries. Fundamental to this application is the science behind the interpretations: The inherent capabilities and limitations of downhole, surface and near-surface recording systems and the processing and imaging applications enabled by these recordings must be appreciated to understand the results. These considerations inform issues such as: microseismic event detectability and position uncertainty; the characterization of geological features; sensitivity to hydraulic fracturing methods; rock failure modes; and well to pad to field-wide implications of large scale ‘horizontally drill and hydraulically fracture’ development programs. Ultimately interpretation workflows determine event pointsets, modeling of discrete fracture networks and calculation of stimulated rock volumes. As microseismic monitoring matures understanding the relationship of recording geometry, imaging capability and interpretation workflows will fuel expanded utilization.

Marcellus is the Real Movie Star

In "Promised Land," the new movie set in rural Pennsylvania where a big company is looking to drill for natural gas, the main character played by Matt Damon acknowledges to a crowd gathered in a school gym that there are real environmental risks associated with Marcellus Shale drilling.

Those risks and whether taking them is worth the financial or, yes, even the environmental rewards that gas development could bring form the backdrop of the movie. A more ambiguous issue the movie leaves unaddressed is how Americans make choices every day by enjoying a lifestyle that relies heavily on fossil fuels, often imported from other countries, including the United Arab Emirates, whose media company was among those funding "Promised Land."

The reality is that energy development and use have impacts that are not always fully realized, yet each and every one of us benefits every day from these resources, whether they be natural gas, coal, oil or renewables. Those fuels make it possible to drive cars, heat our homes, run factories and turn on the lights without much thought.

Whether a corporation that descends upon a small town to buy up drilling rights is defensible is one question, but not one that addresses the choices that we as a country have to make about where we want to get our energy and what that means for our economy.

No one doubts that America must move toward a more sustainable energy portfolio. But achieving long-term sustainability without wrenching economic disruption may require new supplies of hydrocarbons in the near term to transition toward a low-carbon energy diet, such as wind and solar power, and the deployment of new technologies that ongoing research will likely offer.

Infrastructure for renewable energy will take decades to build out and we now have an opportunity to use domestic shale gas resources as a means to wean ourselves off our carbon-heavy habits.

Development of natural gas reserves not only offers a financial return for companies investing their capital, but gas is also a reliable source of energy that makes the American lifestyle possible. Its development is a source of local jobs and income for thousands of Pennsylvania landowners, as well as new revenue for communities, businesses and the government through the commonwealth's newly implemented impact fee.

Development of the Marcellus Shale, the 95,000-square-mile area that stretches from New York to Virginia, crossing Ohio, West Virginia and Pennsylvania, also increases the possibility of greater independence from foreign sources of energy for the United States. More than a third of the gas in the United States comes from shale, a number that is expected to increase to more than 50 percent by 2035. This has allowed Pennsylvania to now export large amounts of domestic gas to cities in the Northeast that only a few years ago had expected to import natural gas from foreign countries.

Natural gas is a cleaner-burning fuel than coal, and the process of drilling for it results in many fewer environmental impacts than coal mining. For those who say there are no environmental rewards, the U.S. Energy Information Administration recently reported that the amount of carbon dioxide being released into the atmosphere in the United States has fallen to its lowest level in 20 years.

This reflects not only the recent economic downturn but also the rapid displacement of coal by natural gas in the electrical generation industry. Natural gas releases about 45 percent less carbon dioxide than coal when combusted.

It is also worth noting that gas combustion releases no mercury and very little sulfur dioxide and nitrogen oxide into the atmosphere, all of which degrade the air we breathe. A shift to gas could positively affect U.S. energy policy as well as slow the rate at which carbon dioxide is released to the atmosphere, which is significant considering that 2012 was the hottest year on record in the United States.

Just the Facts? Or Not.

Energy in Depth nails it again, this time responding to Yoko Ono's NYT op-ed that included "facts" on frac'ing. Read part of this excellent, informed response below and be sure and visit the website for the full text. 

Writing in The New York Times on Christmas Day 2012, none other than Yoko Ono declared that 60 percent of wells producing natural gas from shale will fail – perhaps surprising those who weren’t previously familiar with Ms. Ono’s background and experience as a petroleum engineer. Expertise (or lack thereof) aside, could it really be the case that more than half of all wells will be “poisoning drinking water” sometime in the not too distant future?

First of all, this isn’t a new claim. Opponents of responsible shale development have been using that “60 percent fail” statistic ever since Cornell professor (and anti-natural gas activist) Anthony Ingraffea invented it and passed it along to Josh Fox, Yoko Ono, and numerous other anti-shale audiences, including some among our friends to the north. Ingraffea even claims to have “industry documents” as his source, but as with so much bandied about by folks dedicated to shutting down hydraulic fracturing, the claim is pure fabrication.

Let’s start by taking a look at these “industry documents” that opponents would have us believe are the Holy Grail of anti-shale activism. The main source is a decade-old article in Oilfield Review examining what’s known as sustained casing pressure, or SCP. There is indeed a graph on the second page detailing that, over a 30 year time span, 60 percent of wells will be affected by SCP.

But what’s listed in the caption – and what no activist ever mentions – is just as if not more important: the graph refers to offshore wells in the Gulf of Mexico. The data came directly from the now-defunct Minerals Management Service, which was the federal agency tasked with regulating offshore oil and gas development in federal waters.

The caption also states clearly: “These data do not include wells in state waters or land locations.”

So, right off the bat, we can see that opponents are trying to pull the wool over the public’s eyes by pretending that casing pressure in offshore wells is actually referring to wells developed onshore in deep shale formations. Even worse, the documentation explicitly states it does not refer to onshore production, which is where shale development is actually occurring!

Do they not understand the difference? Or do they refuse to disclose this information because they fear the public actually would? Either way, the statistic is misleading, if not completely meaningless.

Register Now for the January Webcast

Registration is now open for MicroSeismic's January webcast, Microseismic Monitoring: Methods and Interpretation. This webcast will be led by Mike Mueller, VP Technology Development. 

Microseismic monitoring is attracting great interest due to the application of passive seismic to shale play completion activities and the successful expansion of the method from downhole to surface and near-surface acquisition geometries.

Fundamental to this application is the science behind the interpretations: The inherent capabilities and limitations of downhole, surface and near-surface recording systems and the processing and imaging applications enabled by these recordings must be appreciated to understand the results.

These considerations inform issues such as: microseismic event detectability and position uncertainty; the characterization of geological features; sensitivity to hydraulic fracturing methods; rock failure modes; and well to pad to field-wide implications of large scale ‘horizontally drill and hydraulically fracture’ development programs.

Ultimately interpretation workflows determine event pointsets, modeling of discrete fracture networks and calculation of stimulated rock volumes. As microseismic monitoring matures understanding the relationship of recording geometry, imaging capability and interpretation workflows will fuel expanded utilization.

To register for the webcast, visit the website.

Eagleford Now Largest Play in the World

The Eagle Ford now ranks as the largest single oil and gas development in the world based on capital expenditures. That means more will be invested in the South Texas oil play than any other single oil and gas development in the world.

That’s the headline takeaway from a recent report released by Wood Mackenzie analyst Callan McMahon.

The report notes that BHP, ConocoPhillips and EOG Resources have a combined value of more than $30 billion in the Eagle Ford. That number likely doubles when you add other large players like Anadarko, Chesapeake, Lewis Energy, Marathon Oil, Murphy, Pioneer and Talisman. If natural gas prices recover to more than $5/mmbtu, it’s quite possible more than $100 billion in value has been created by operators across the Eagle Ford.

“Some of these numbers can be difficult to put into perspective, but $28 billion would put one at roughly the median country annual GDP,” McMahon notes.

In terms of costs, Wood Mackenzie notes the play will likely surpass the Kashagan project in Kazakhstan, which will have an estimated $116 billion invested in the coming years. At the current rate of spending in the Eagle Ford, the play will surpass the Kashagan project in as little as four years.

“With $28 billion in capex being spent in 2013 and development now in full swing, the excitement in the Eagle Ford Shale and value being extracted from the play continues to exceed expectations,” McMahon says.

Other highlights from the report include:

  • Growth from zero to more than 700,000 b/d of oil and natural gas liquids (NGLS) in three years
  • Eagle Ford is the top liquids producing shale in the world with Q3 volumes of 1 million boe/d (Bakken ranks #1 for oil production alone)
  • DeWitt, Gonzales and Karnes counties account for 50% of liquids production
  • 74% of estimated future activity will target liquids areas (this changes if natural gas prices go up)
  • Capacity constraints have eased
  • The Eagle Ford accounts for 38% and 20% of EOG’s and BHP’s upstream value, respectively
  • In 2013, the play will account for 27% of all upstream spend in the Lower 48

Natural Gas Up in W VA

Natural gas production rose 50 percent in West Virginia in 2011.

The state's production rose to 385,500 thousand cubic feet, or mcf, up from 256,600 mcf in 2010, according to the U.S. Energy Information Administration's Natural Gas Annual, released Jan. 7.

Shale gas represented 58 percent of the state's production.

Nationwide, production from shale gas reached 30 percent of total natural gas production in 2011, up from just 8 percent in 2007.

Natural gas numbers of all kinds rose in the U.S. in 2011.

  • Number of producing wells: 514,600, up from 487,600 in 2010.
  • Dry production: 22.9 million mcf, up from 21.3 million mcf in 2010. Gross withdrawals from shale gas wells: 8.5 million thousand cubic feet, or mcf, up from 5.8 million mcf in 2010 — while conventional gas withdrawals dropped to 13 million mcf from 13.2 million mcf.
  • Consumption: 24.4 million mcf, up from 24 million mcf in 2010.
  • Natural gas exports, 1.5 million mcf, up from 1.1 million mcf in 2010; imports down to 3.5 million mcf from 3.7 million mcf.

In West Virginia, the numbers of producing wells hit 56,800 in 2011, up from 52,500 in 2010.

And consumption was up a little too: 115,400 mcf, from 113,200 mcf in 2010.

West Virginia had the 13th largest capacity to process natural gas — to separate the methane from natural gas liquids — among states, at 845 mcf/day. Largest was Texas at 18,365 mcf/day.

Liquids extracted in West Virginia came to 6.41 million barrels in 2011, up just a little from 6.38 million barrels in 2010.

The average price of natural gas delivered to West Virginia customers was $10.91/mcf. It was about average among prices in the lower 48 that ranged from $8.10/mcf in North Dakota to $18.16/mcf in Florida, and lower than prices that ranged in the mid $14s in 2007, 2008 and 2009 and $11.39 in 2010.

The EIA did not update its figures for gas reserves in this publication. Its figures for Dec. 31, 2010, were 7,000 billion cubic feet for West Virginia, 2.3 percent of the nation's 304,625 bcf.

A Graphic View Of Shale's World Benefit

The real impact stems from its effect on the oil market. Shale gas offers the means to vastly increase the supply of fossil fuels for transportation, which will cut into the rising demand for oil — fuelled in part by China’s economic growth — that has dominated energy policymaking over the last decade.

The major geopolitical impact of shale extraction technology lies less in the fact that America will be more energy self-sufficient than in the consequent displacement of world oil markets by a sharp reduction in U.S. imports. This is likely to be reinforced by the development of shale oil resources in China, Argentina, Ukraine and other places, which will put additional pressure on global oil prices.

The second factor is the potential to use natural gas for transportation. Some analysts suggest that this will only be a realistic prospect for fleet and long-haul road transportation. But they are overlooking the immense advantage that natural gas has as a transportation fuel in America and Europe, which have both developed a natural gas infrastructure in urban areas that takes piped natural gas into homes, offices and supermarkets. Once gas is cheap and widely available, it is possible to consider dealing with the “last mile” problem of providing home refuelling kits so consumers can fill up natural-gas powered cars in their own garages.

The incentives to develop shale oil and natural gas are very great. But so far, the United States has only experienced the first stage of low natural-gas prices and the reimportation of energy intensive industries such as chemicals and steel because of low gas prices. The next stage of the shale revolution’s impact is going to be felt as major stimulus gets under way from lower oil prices. More broadly, the shale revolution will grant the United States a greater range of options in dealing with foreign states.

For the Europeans, the shale revolution is also largely positive. A greater variety of gas supplies from liquefied natural gas originally destined for the United States has been dumped in European markets; by 2020, shale gas in the form of liquefied natural gas is likely to begin arriving in Europe in significant quantities, and there is also the prospect of some domestic shale gas becoming available. Europe will also benefit from the second stage of the shale revolution as oil prices come under pressure.

To view the associated graphics with this article, visit the website. 

Chesapeake Pays LA Parishes Big

Chesapeake Energy Corporation announced Thursday the company will be making a total of nearly $14 million in property tax payments to parishes benefiting from natural gas and oil development.

Representatives from Chesapeake will begin making presentations at area police jury meetings to formally announce the individual parish totals that include payments from Chesapeake Operating, Inc. and drilling subsidiary Nomac Drilling, LLC for property, real estate and personal property taxes in 2012.

"The Haynesville Shale has been a massive economic engine for investment, job creation and state and local tax payments over the last several years,” said Paul Pratt, Chesapeake's Director – Corporate Development. "Chesapeake is proud to contribute to Louisiana's economy through tax payments that provide funds for schools, hospitals and road and other government services that yield value for so many citizens in our state while also producing a carbon-light fuel that cleans our air and builds our nation's energy security.”

The economics of shale gas and oil development have not only created a stimulus for Northwest Louisiana, but also have led to greater statewide investment and growth.

With natural gas at decade-low prices, Louisiana is experiencing a renaissance in new commercial and industrial construction activity, particularly in the synthetic fuel and chemical industries where the Louisiana Department of Economic Development is forecasting the location of seven to 15 projects over the next few years.

The projects are expected to attract investments of $500 million to $5 billion each and create thousands of construction and permanent jobs.

It is evident the Haynesville Shale has and will bode well for local economies and Louisiana as it continues to sustain jobs, stimulate sales for state businesses and contribute to household earnings and local and state taxes. 

NY Finally Declares Frac'ing Safe?

The state’s Health Department found in an analysis it prepared early last year that the much-debated drilling technology known as hydrofracking could be conducted safely in New York, according to a copy obtained by The New York Times from an expert who did not believe it should be kept secret.

The analysis and other health assessments have been closely guarded by Gov. Andrew M. Cuomoand his administration as the governor weighs whether to approve fracking. Mr. Cuomo, a Democrat, has long delayed making a decision, unnerved in part by strident opposition on his party’s left. A plan to allow a limited amount of fracking in the state’s Southern Tier along the Pennsylvania border is still seen as the most likely outcome, should the drilling process receive final approval.

Steel Plants Growing with Shale Revolution

The U.S. shale-gas revolution, which has revitalized chemicals companies and prompted talk of domestic energy self-sufficiency, is attracting a wave of investment that may revive profits in the steel industry.

Austrian steelmaker Voestalpine AG (VOE) said Dec. 19 it may construct a 500 million-euro ($661 million) factory in the U.S. to benefit from cheap gas. Nucor Corp. (NUE), the most valuable U.S. steelmaker, plans to start up a $750 million Louisiana project in mid-2013. They’re among at least five U.S. plants under consideration or being built that would use gas instead of coal to purify iron ore, the main ingredient in steel.

“That technology has been around 30 years, but for 29 years gas prices in the U.S. were so high that the technology was not economical,” said Michelle Applebaum, managing partner at consulting firm Steel Market Intelligence in Chicago. “This is how steel will be built moving forward.”

The new capacity may signal a turnaround for an industry that has suffered from overcapacity since the financial crisis and collapse in commodity prices four years ago. U.S. steelmakers have struggled to stay profitable amid sluggish domestic demand, depressed prices and competition from Chinese imports. While global steel output has grown by 14 percent since 2008, U.S. production has shrunk 3.4 percent.

The newest group of steel projects are so-called direct- reduced iron plants, which account for the first stage of steelmaking. DRI technology produces iron for about $324 a ton, Nucor said in a November presentation. That’s $82 a ton, or 20 percent, cheaper than using a conventional blast furnace, the Charlotte, North Carolina-based steelmaker said.

EPA's Jackson to Step Down

US Environmental Protection Agency Administrator Lisa P. Jackson announced that she will step down shortly after US President Barack Obama’s State of the Union address in January.

Jackson noted that when Obama nominated her to lead EPA in December 2008, “I spoke about the need to address climate change, but also said: ‘There is much more on the agenda: air pollution, toxic chemicals and children’s health issues, redevelopment and waste-site cleanup issues, and justice for the communities who bear disproportionate risk.’”

When Obama addressed EPA employees earlier this year, she continued, he told them, “You help make sure the air we breathe, the water we drink, the food we eat are safe. You help protect the environment not just for our children but their children. And you keep us moving toward energy independence…. We have made historic progress on all these fronts.”

Jackson’s Dec. 27 statement concluded, “So I will leave EPA confident the ship is sailing in the right direction, and ready in my own life for new challenges, time with my family, and new opportunities to make a difference.”

She leaves a mixed legacy at the federal environmental regulator. Oil and gas producers questioned methods in the agency’s attempts to limit carbon dioxide emissions. Refiners, automakers, and engine manufacturers criticized its effort to raise the amount of ethanol allowed in gasoline without fully addressing possible adverse equipment impacts.

Environmental organizations, meanwhile, applauded her actions. “In her 4 years as EPA administrator, [Jackson] has been a steadfast advocate for clean air, clean water, a stable climate, and public health—often in the face of very vocal and forceful detractors,” Sierra Club Executive Director Michael Brune said on Dec. 27.

“With her leadership, our country has made a big down payment on its goals to reduce carbon pollution,” Brune maintained.

Chevron CEO on Politics, Frac'ing and Working Abroad

Chevron CEO John Watson notices something important as he visits his company's operations around the globe: Governments everywhere find high energy prices much scarier than the threat of global warming.

And that means the world will need a lot more oil and gas in the years to come.

To meet that demand, Chevron is in the midst of an enormous cycle of investment aimed at extracting oil and gas from wherever it hides in the earth's crust.

Chevron Corp., based in San Ramon, Calif., is the second largest investor-owned oil and gas company in the world, and the third largest American company of any type as measured by revenue and profit. Over the last year, Chevron has earned $24 billion on revenue of $231 billion.

Every day, the company produces the equivalent of 2.7 million barrels of oil and gas, mostly outside the U.S.

Next year Chevron will invest $33 billion—more than it ever has—to drill wells, erect platforms, build refineries and scan for undiscovered deposits of oil and gas. Among its biggest projects: A natural gas operation in Australia that will ultimately cost Chevron and its partners $65 billion to build. Also planned are three deep-water drilling and production projects in the Gulf of Mexico that will cost $16 billion.

The Associated Press conducted a Q&A with Watson, discussing world energy dynamics, U.S. energy policy, hydraulic fracturing, and working abroad. Read the full interview online. 

Rushing to Secure LNG Export Permits

Natural gas suppliers from Sempra Energy (SRE) to Exxon Mobil Corp. (XOM) are fighting for the first U.S. export permits after a study said selling some of the fuel to Asia will benefit the economy more than consuming it domestically.

They could win approval for projects to ship about 6 billion cubic feet a day of liquefied natural gas by 2025, according to estimates by consultants including Tudor Pickering Holt & Co. That amount of LNG would supply about half the current U.S. residential market and is worth $93 million a day at Japan’s current import price, a global benchmark.

The government-sponsored study released Dec. 5 gave a green light to exports, saying they shouldn’t delay North America’s possible energy independence in coming decades based on shale discoveries. Companies from Exxon to Dominion Resources Inc. (D) are rushing to get export permits in time to take advantage of the lower production price in the U.S. compared with other markets.

“The reality is that LNG projects are quite difficult to deliver,” Elizabeth Spomer, a senior vice president of business development for Reading, England-based gas producer BG Group Plc (BG/), said in a statement. “This is due to a host of factors -- from regulatory obstacles to the challenges associated with financing and construction.”

The 6 billion cubic feet a day estimate represents about a fifth of the projects that companies are proposing, measured by LNG capacity, as regulatory hurdles and competition limit building.

MicroSeismic Names Ganesh Murdeshwar as Vice President of Calgary Office

MicroSeismic, Inc. announced today that Ganesh Murdeshwar has been appointed Vice President for Canada. In this role, he will be responsible for providing leadership to the sales, analysis, and operations teams located in the Calgary market, and growing MSI’s presence and market share in the Canadian microseismic market.

“I am thrilled Ganesh has joined MicroSeismic,” said Peter Duncan, PhD, Founder and CEO of MicroSeismic, Inc. “His combination of technical experience, business acumen, as well as a principled and people-focused approach to leadership and innovation will help MicroSeismic to further our performance growth.”

Ganesh-Murdeshwar1-240x300Ganesh has more than 20 years of experience.  The majority of his career was spent with IHS after they acquired his startup company, AccuMap. His career has spanned roles in operations, software technology, business development, product development and financial management.  Prior to joining MicroSeismic, he was President and Chief Operating Officer for Tagle Information Technology, Inc.

“I am pleased to join MicroSeismic,” said Ganesh. “Canada’s oil field industry is developing quickly and I believe MicroSeismic will play a huge role in that development. We plan to significantly expand our presence and customer base in Canada.  My diverse background in technology software and strategic business planning will allow us to do this while providing the highest level of service to our customers.”

Ganesh holds a Bachelor of Science (Honors) in Computing Science from the University of Alberta, a Master of Science in Computing Science from Dalhousie University and a Masters in Business Administration from Athabasca University.

MicroSeismic, Inc. is an oilfield services company providing real-time monitoring and mapping of hydraulic fracture operations in unconventional oil and gas plays. Founded in 2003, MicroSeismic is the pioneer in monitoring microseismic activity utilizing surface and near-surface arrays. The company helps oil and gas companies understand how the reservoir responds to stimulation and its impact on customer economics.

For more information visit: www.microseismic.com 

Unconventional Production Enabling “Profound Shifts”

The story of the U.S. energy revolution enabled through unconventional production is gaining worldwide attention as commodity experts across the globe are recognizing the profound shifts in the U.S. oil and gas sector, according to the American Petroleum Institute.

The International Energy Agency, or IEA, the U.S. Energy Information Administration, or EIA, and renowned energy analysts at Citigroup and IHS recently highlighted the potential for U.S. oil and gas production to change the world outlook on energy, Rayola Dougher of the American Petroleum Institute, or API.

Dougher, an API senior economist, said the upstream industry is producing more oil and gas than at any time in recent history and continuation of the trend is vital to economic recovery, future energy security and long-term prosperity.

“Recent energy projections and economic analysis suggest [the trend] can continue,” she said in a conference call with reporters. “However, the right government policies will be important to facilitating this.”

Highlighting a few of those analyses, Dougher said recent U.S. liquid fuels production, primarily oil, has grown faster in the U.S. than in any other country. In 2012, U.S. oil production rose more than in any other year since production began, she said, noting that in the past four years, U.S. crude production is up 28% and onshore natural gas production is up 27%.

The EIA and IEA project that production will be headed even higher, Dougher noted. “The U.S. EIA estimates that oil production could increase 19% by 2019, and that natural gas could increase by 39% by 2040,” she said. “The International Energy Agency says America could become the world’s largest oil producer in the second half of this decade and could be nearly self-sufficient in energy by 2035.”

The rise in production means a drop in imports. By reducing reliance on imported energy, Dougher said, the U.S. will weaken energy producers that are hostile to U.S. interests. While the U.S. will not secede from the world oil market, it can become a net exporter.

“If we can bring on a lot more energy from this hemisphere, we’re shifting the balance of energy power to very stable regions of the world, which can have an impact not only on us, but everyone that buys and sells oil,” she said.

Arab Nations Jump on Shale Boom

As the shale mania spreads around the world, Jordan is the latest to sign up. The nation has good reason, too; with an estimated 40-70 billion tons of oil locked beneath some 60 percent of the country’s fairly arid land surface, it could have the fourth largest shale oil deposit in the world.

British firm Jordan Mining and Energy commands a 40-year shale oil concession in that country – one of three companies with similar terms. The estimated size of the deposit, the company claims, could mean nearly 100 billion barrels of oil.

Presently, Jordan spends up to $4 billion annually to import energy; developing its indigenous shale reserves would radically remake the nation’s economic and energy future.

From UPI.com:

“North America’s shale gas boom has radically altered the global energy landscape … helping to plug energy shortfalls,” the Middle East Economic Digest observed. “Countries in the Middle East and North Africa have been slow to show interest because many have plentiful reserves of conventional gas.

“But surging energy demand, driven by swelling populations and industrial growth, has prompted some countries to review their options, particularly the fuel potential presented by tight gas and deeper shale.”

Although the U.S. has led the way in shale development, there could actually be some 5,760 trillion cubic feet of technically recoverable shale gas outside North America.

Libya, Tunisia, Algeria all possess impressive reserves waiting to be tapped. Even Saudi Arabia has enormous reserves – some 645 trillion cubic feet of shale gas.

Jordan presently has little to no indigenous oil and gas infrastructure; the nation depends on supplies from neighboring Persian states and the West. The influence of the Arab Spring has meant political uncertainty recently.

Because of these factors, it’s a great time for Jordan to get moving on its shale reserves.

The state expects to invest $20 billion in this sector over the next few years. This will primarily take the form of investments through international oil giants like Royal Dutch Shell (NYSE: RDS.A).

Fracking Leads to Drilling-Rules Rewrite

Hydraulic fracturing has made plenty of headlines in recent years. But the drilling process involves many other steps beyond breaking up rock, and several opportunities for things to go wrong.

Recognizing this, the Texas Railroad Commission, the state’s oil and gas regulatory agency, is updating its rules to address the broad process of drilling, from the drilling itself to cementing and completing an oil or gas well.

The latest version of the proposed rule changes is expected today.

So far, the commission’s work is winning qualified praise from environmentalists and some in the oil industry.

“This is the biggest overhaul of Texas well construction regulations since the 1970s,” said Scott Anderson, an Austin-based senior policy adviser for the Environmental Defense Fund.

Tuesday, the commissioners agreed to post the staff’s recommended changes on the TRC’s website today, but said it will continue accepting public comment until noon Jan. 2.

Debbra Hastings, the executive vice president of the Texas Oil and Gas Association, said she expected the new rules probably would be adopted by the TRC toward the beginning of the legislative session.

“We’re supportive of them moving forward right now, as long as they’re feasible and they can implement them,” Hastings said.

Careful construction of oil and gas wells is vital to preventing oil, gas or fracking-related fluids from leaking into aquifers.

A study last year for the Groundwater Protection Council found that from 1993 to 2008, faulty drilling or well completion was responsible for 10 documented instances of groundwater contamination in Texas.

The proposed rules span a range of topics related to what the industry calls “well integrity.”

They cover the quality of the protective cement placed between layers of pipe in an oil or gas well and a pressure test for the pipes themselves (which often are called casing) in wells being prepared for fracking.

They could create new requirements for the components of blowout preventer systems on certain wells, including those onshore in populated areas.

Among the most discussed provisions is a proposal that bans fracking operations at noncemented wells when the shale being fracked comes within 1,000 vertical feet of a usable aquifer.

Public comments initially had ended last month, and some drillers said the proposed rules were too restrictive. Keith Valentine, a lawyer with Clayton Williams Energy, wrote in a filing that the changes would have a “negative impact” with significant costs.

Environmentalists, while welcoming the proposals, wish they would do more.

In a public filing, the Lone Star Chapter of the Sierra Club and other green groups urged the commission to improve oversight of cement work and to ban “toxic additives during the well drilling process.”

TRC Chairman Barry Smitherman declined to comment on the proposal ahead of the version being released today. The commission also is in the early stages of looking at rule changes that would affect wells built to dispose of waste fluids from fracking operations.

State Rep. Jim Keffer, R-Eastland, the chairman of the House Energy Resources Committee, is “closely monitoring” the TRC’s work, according to Evan Autry, his legislative aide.

Keffer championed legislation last year requiring disclosure of some chemicals in hydraulic fracturing. For now, Keffer is not planning to introduce a bill on well integrity, leaving it to the TRC, Autry said in an email.

Anderson of the Environmental Defense Fund said the TRC long has been seen as a leader on drilling rules, but that it has not kept up on well integrity.

“Several of the other states have stolen a march on Texas,” he said, noting that Colorado, Wyoming, Pennsylvania and Ohio have updated well-integrity rules in recent years.

Oil Boom Produces 4,000 New Jobs in S.A.

The accolades keep coming for the Eagle Ford Shale oil and gas field — the biggest economic development boost for the San Antonio area in recent memory.

A report released Tuesday by the San Antonio Economic Development Foundation says the area already has scooped up more than 4,000 jobs from producers and service companies working in the shale play.

“We’ve never been handed anything like this before,” Bexar County Judge Nelson Wolff said.

The downside to the boom: transportation. Although potholed roads across South Texas counties have been highly visible problems with the shale play, Wolff said Bexar County has its own share of road woes.

Bexar County will ask the Legislature to approve a $10 vehicle registration fee.

If approved, the $12 million a year generated could help address roadways such as Fischer and Old Corpus Christi roads, which Wolff said need repairs thanks to heavier truck traffic in the southern part of Bexar County.

Two Rio Grande Valley counties — Hidalgo and Cameron — already have the authority to levy a $10 fee.

And Wolff said the area needs to do more to encourage rail growth and seek federal assistance for rail funding to help move some of the heavy trucks off roads across South Texas.

Although San Antonio sits outside of the shale play, the report said the city is well positioned for regional headquarters and supplying everything from workers, construction and goods to community college training for workers.

Eagle Ford production topped the equivalent of 1 million barrels of oil per day in the third quarter.

So far, Bexar County has picked up 4,060 jobs, many of them from oilfield service giants such as Halliburton, Sangel Corp. and Baker-Hughes.

Some of the largest operators in the Eagle Ford such as EOG Resources, the play’s largest landholder and producer, Chesapeake Energy and Marathon Oil, also have opened San Antonio offices.

The Bexar County payroll from the shale play is estimated at more than $186 million annually.

By 2021, the study expects Bexar County will have 11,627 shale-related jobs with a payroll of more than $507 million.

Mayor Julián Castro said Eagle Ford is producing jobs in spades, but the city must respond with a skilled, well-educated workforce able to fill those positions.

“We have an unprecedented opportunity if we can train our workforce,” Castro said.

While Alamo Colleges has responded quickly with training such as an Eagle Ford “boot camp” for prospective workers, Castro said more needs to be done at both the high school and college level to make sure local residents are qualified for oil industry jobs.

“The capacity now is not where it needs to be in the future,” Castro said.

The report was done in conjunction with Bexar County and the city of San Antonio, and the 58-member task force in charge of the report includes a who’s who of the oil and gas industry and local politics and business — everyone from Gregg Goff, CEO of independent refiner Tesoro Corp., to City Manager Sheryl Sculley and Don Frost of Frost Bank.

Former Mayor Henry Cisneros, who heads the Economic Development Foundation’s Eagle Ford Task Force, said Bexar County is part of a transformative period as the U.S. shifts to greater energy independence.

He noted that the jobs created just in Bexar County are the equivalent of four Toyota plants.

“We are witnessing something once in a lifetime, once in 100 years,” Cisneros said.

He said the task force wants to work with San Antonio’s chambers of commerce to connect small businesses with opportunities in the shale play.

“We want to identify the small businesses that can benefit and put them in a position to do so,” he said.

U.S. Expected to Become Huge Exporter of LNG

The U.S. Energy Department said crude oil production from the United States could reach 7.5 million barrels per day before the end of the decade. Natural gas production, meanwhile, should increase to the point that the country becomes a net exporter of LNG. The report found most of the growth was from shale and other tight formations. Last month, shale opponents characterized U.S. growth predictions from the International Energy Agency as “dangerously false.” Before the Energy Department’s report, however, oil companies operating in some of the largest shale plays announced they were reserving a sizable portion of their 2013 budgets to capitalize on the U.S. oil and natural gas boom.

Last month, the International Energy Agency said it expected the United States would eclipse Saudi Arabia in terms of oil output within the next decade. The Paris-based agency said that, by 2025, the United States would pump about 10.9 million barrels of oil per day, 100,000 bpd more than Saudi Arabia.

Analysts, including those from Oilprice, questioned the IEA’s reporting, however, describing the figures as “trick numbers.” Others described the clamoring over the IEA’s outlook as “political fodder,” while advocacy group Food & Water Watch said the predictions were, for all intents and purposes, false.

The U.S. Energy Department, in its annual energy outlook for 2013, finds U.S. crude oil production should increase, on average, by 234,000 bpd through 2019. By then, the report states, U.S. crude oil production should reach 7.5 million bpd.

Nebraska Nears Milestone Decision for Keystone

Nebraska’s state government will soon announce a decision on the Keystone XL pipeline from Canada, a milestone in a long approval process, but it is unclear when the Obama administration will decide, a U.S. oil industry lobby group said Tuesday.

The American Petroleum Institute believes Nebraska could be set to bless the route as early as January, and urged President Barack Obama to quickly rule on the project, which has been wending its way through the approval process for five years.

The TransCanada Corp pipeline is designed to carry oil from Canada, North Dakota and Montana, and needs a presidential permit because it would cross an international border.

Last year, Obama put the pipeline on hold, citing environmental concerns with a portion of the route in Nebraska. The API said it is unclear when the Obama administration will take its next steps on the project.

The State Department has said it does not anticipate concluding its review before the first quarter of 2013.

Stopping the pipeline is a top issue for environmental groups. They argue the project would accelerate climate change through the development of Canada’s oil sands, and plan to continue to fight it.

Nebraska’s Department of Environmental Quality is slated to hold a public meeting on Tuesday evening in the tiny town of Albion, population 1,650, about 125 miles west of Omaha.

The meeting at the county fairgrounds is the last stage in gathering comments on the route for the pipeline, which was changed last year to avoid a sensitive environmental region.

After the department finalizes its report on the pipeline – which the American Petroleum Institute thinks could come by the end of December – it will give it to Nebraska Governor John Heineman for his approval.

Heineman’s decision is likely to come in January, said John Kerekes, the API’s central region director.

“This will conclude the longest pipeline application deliberation in history, which, with Nebraska’s expected support, we believe will result in final approval for the project to commence,” Kerekes told reporters.

But the timetable for the final federal review is less clear. The State Department is working on a draft “supplemental environmental impact statement” study, which it will release for public comment when it is complete.

The report will help the State Department determine whether the project is in the national interest, a decision it makes in consultation with other administration officials, considering issues such as climate change concerns and jobs.

Energy and the Eagle Ford

The Eagle Ford Shale formation in South and East Texas, created from deposits made 92 million years ago, is fast becoming one of the most actively drilled targets for oil and gas energy resources in the U.S.

The Eagle Ford Shale is not only attracting new business, jobs and development to the San Antonio area — it’s also breathing new energy into established industries and new life into the nation’s economy. More than 4,000 people poured into the Henry B. Gonzalez Convention Center for the third annual DUG Eagle Ford conference last month to learn how they can tap into this oil-and-gas play.

A report by Boston Consulting Group says the surge in shale gas production in areas such as the Eagle Ford Shale could be the key to the nation’s economic growth over the next several years. That’s because falling natural gas prices, the group predicts, will boost factory productivity and lead to growth in U.S. exports that will add 5 million jobs to the economy by the end of the decade.

As for oilfield service jobs, a fair number are located in San Antonio and regions south.

“For 2011, I think it’s likely that Eagle Ford Shale had the single biggest impact on the local economy, with companies like Halliburton and others putting in facilities in the San Antonio area and the promise of over 2,000 direct permanent jobs once the facilities have been completed,” saysThomas Tunstall, director of the Center for Community & Business Research, UTSA Institute for Economic Development.

Houston-based Halliburton Co. broke ground a year ago on an operations center in South Bexar County that will employ as many as 1,500 workers. Lake Truck Lines Inc. moved its headquarters from Houston to San Antonio last year, and reports that business grew by more than 500 percent since that time.

Keystone XL Work Begins in OK

TransCanada has begun working in Oklahoma on the southern segment of its proposed Keystone XL pipeline.

“It’s kind of like a slow-moving train,” project spokesman Jim Prescott said. “Once it gets going, it takes a while to get up to speed with all the crews that have to fall in, one behind the other.”

Prescott said crews are working along the pipeline route from south of Cushing to the Texas border. They are relocating utilities and clearing right of way before the pipe is buried.

“We’re still a few weeks away from ditch work,” he said.

The 485-mile pipeline will transport up to 700,000 barrels of crude oil a day from the storage hub at Cushing to refineries in the Houston area.

TransCanada announced plans to proceed with the Gulf Coast Project earlier this year after the Obama administration denied the company a permit for the transcontinental Keystone XL pipeline.

The company has reapplied for the necessary permit to build a pipeline across the U.S.-Canada border on its way from Alberta to Cushing.

Construction of the southern segment is expected to be completed by mid-2013, Prescott said, so the pipeline can go into service by the end of next year.

Crews began working this summer after TransCanada secured the necessary permits from the U.S. Army Corps of Engineers, but the company needed to secure an additional permit from the U.S. Fish and Wildlife Service before proceeding in Oklahoma because of the presence of the endangered American burying beetle.

Prescott said TransCanada secured the permit about three weeks ago after showing it would comply with regulations meant to protect the beetle’s habitat.

He said a crew of about 375 people is working in Oklahoma now, but that figure is expected to double as construction activity ramps up in the coming weeks.

The project will include more than 20 different crews working on various aspects of the pipeline construction, from surveying to welding pipe sections to site reclamation and cleanup.

Prescott said pipe for the project is being housed in Holdenville and Cushing, but state crews are staging out of a construction yard in Prague.

“That’ll be our base of operations in Oklahoma for the coming months,” he said.

TransCanada also is working in Cushing to build a pump station for the new pipeline and seven storage tanks that will hold up to 1.9 million barrels of oil.

Small-Town America Booms with Shale

The nation’s oil and gas boom is driving up income so fast in a few hundred small towns and rural areas that it’s shifting prosperity to the nation’s heartland, a USA TODAY analysis of government data shows.

The 261 million people who live in cities and suburbs still haven’t recovered earning power lost in the economic downturn. Average income per person fell 3.5% in metropolitan areas between 2007 and 2011 after adjusting for inflation, according to data released Monday by the federal Bureau of Economic Analysis.

By contrast, small-town America is better off than before: Inflation-adjusted income is up 3.8% per person since 2007 for the 51 million in small cities, towns and rural areas.

The energy boom and strong farm prices have reversed, at least temporarily, a long-term trend of money flowing to cities. Last year, small places saw a 3% growth in income per person vs. 1.8% in urban areas.

Small-town prosperity is most noticeable in North Dakota, now the nation’s No. 2 oil-producing state. Six of the top 10 counties are above the state’s Bakken oil field.

“Give us a little shale, and we’ll show some pretty good income growth, too,” says Bill Connors, president of the Boise Metro Chamber of Commerce in neighboring Idaho.

The Boise area’s rank in income per person plummeted from 139th to 251st among metro areas from 2007 to 2011, the biggest drop of any place except Las Vegas, which suffered largely because of high-tech layoffs and a real estate price collapse.

Microseismic Event Location Uncertainty: Capabilities, Limitations, and Drivers, Online Training

Microseismic event location or position resolution and uncertainty remains one of the most critical aspects of passive seismic for the user community. In order to have confidence with “beyond the dots” microseismic applications, it is crucial to understand the inherent capabilities, limitations, and drivers for event locations from down-hole, surface, and near-surface microseismic acquisition geometries.

Join us on December 7th for a webinar that will review these capabilities, limitations and drivers for both the down-hole and the surface acquisition methods. This approach focuses on consideration of engineered stimulation approaches to hydrofracturing rather than the “factory mode” approach. This webinar will also consider what investments in microseismic technology can do and how this information can impact field development and performance.

Register online today.

Marcellus Set to Make PA an Energy “Superpower”

State Department of Environmental Protection Secretary Michael Krancer said Thursday that Pennsylvania’s Marcellus Shale gas reserves have positioned it to become an “American energy superpower,” and the state is up to the task of regulating its extraction.

Pennsylvania’s opportunity as a major natural gas producer is enhanced because it is “strategically located” near major Northeastern energy markets and it supports low-cost, domestic energy production done in an “environmentally sensitive way,” said Mr. Krancer, who spoke at the third annual Developing Unconventional Gas conference at the David L. Lawrence Convention Center, Downtown.

In a 15-minute speech that emphasized economic benefits from shale gas drilling, Mr. Krancer said the U.S. will need to add 20 million new jobs in coming years and only the energy sector has the capacity to do that. He also said the use of gas for electricity generation will grow quickly in the state.

Mr. Krancer said Pennsylvania needs to adjust its regulations to help the drilling industry remain competitive. “We need regulatory certainty, we need regulatory reform, and we need a fair and predictable time for permitting,” he said, adding that the state’s regulations should be based on scientific considerations and “cost benefit analysis.”

Mr. Krancer said he does not support proposals to federally regulate shale gas drilling or hydraulic fracturing, a water-intensive procedure that uses millions of gallons of water per well mixed with chemical additives to free the gas from dense shale layers a mile or more underground.