Bakken Shale

Sun, 2014-10-26 22:45Steve Horn
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Drilling Deeper: New Report Casts Doubt on Fracking Production Numbers

Post Carbon Institute has published a report and multiple related resources calling into question the production statistics touted by promoters of hydraulic fracturing (“fracking”)

By calculating the production numbers on a well-by-well basis for shale gas and tight oil fields throughout the U.S., Post Carbon concludes that the future of fracking is not nearly as bright as industry cheerleaders suggest. The report, “Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom,” authored by Post Carbon fellow J. David Hughes, updates an earlier report he authored for Post Carbon in 2012.

Hughes analyzed the production stats for seven tight oil basins and seven gas basins, which account for 88-percent and 89-percent of current shale gas production.

Among the key findings: 

-By 2040, production rates from the Bakken Shale and Eagle Ford Shale will be less than a tenth of that projected by the Energy Department. For the top three shale gas fields — the Marcellus Shale, Eagle Ford and Bakken — production rates from these plays will be about a third of the EIA forecast.

-The three year average well decline rates for the seven shale oil basins measured for the report range from an astounding 60-percent to 91-percent. That means over those three years, the amount of oil coming out of the wells decreases by that percentage. This translates to 43-percent to 64-percent of their estimated ultimate recovery dug out during the first three years of the well's existence.

-Four of the seven shale gas basins are already in terminal decline in terms of their well productivity: the Haynesville Shale, Fayetteville Shale, Woodford Shale and Barnett Shale.

-The three year average well decline rates for the seven shale gas basins measured for the report ranges between 74-percent to 82-percent. 

-The average annual decline rates in the seven shale gas basins examined equals between 23-percent and 49-percent. Translation: between one-quarter and one-half of all production in each basin must be replaced annually just to keep running at the same pace on the drilling treadmill and keep getting the same amount of gas out of the earth.

Wed, 2014-08-20 07:00Justin Mikulka and Steve Horn
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Big Rail Cites Bin Laden, Al Qaeda to Fend Off Oil-by-Rail Route Transparency

While many states around the U.S. have released information to the public about the frequency and routes of trains carrying oil obtained from hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin, holdouts still remain. 

Why the delay? Homeland security concerns, claim some companies. 

In an ongoing Maryland court case over the issue of transparency for in-state oil-by-rail routes, a July 23 affidavit from Carl E. Carbaugh — director of infrastructure security for Norfolk Southern — goes into extensive detail about the supposed risk presented by terrorism attacks on “Bomb Trains.” 

In so doing, Carbaugh mentions Al-Qaeda. 

The most recent edition of Inspire magazine, March 2014, the online, English-language propaganda publication of [Al-Qaeda in the Arabian Peninsula], presents a full-page collage depicting varied images…in order to construct an explosive device,” reads Carbaugh’s affidavit

Among these images are a derailed passenger train and a partly covered note paper listing cities in the [U.S.] as well as the terms ‘Dakota’ and ‘Train crude oil.’” 

Carbaugh also cited Osama bin Laden, the late Al-Qaeda international ring-leader, in his affidavit.

Among the materials seized in the May 1, 2011, raid on Osama bin Laden’s compound in Abbottabad, Pakistan, were notes indicating interest in ‘tipping’ or ‘toppling’ trains — that is causing their derailment,” Carbaugh wrote.

Osama Bin Laden Compound Diagram; Image Credit: Wikimedia Commons

Thu, 2014-08-14 06:00Justin Mikulka
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Oil Industry Study Claiming Bakken Crude Safe Contains Whopper of a Disclaimer

casselton bomb train explosion

On December 30, 2013, a train carrying Bakken crude oil crashed in Casselton, North Dakota resulting in a massive explosion. 

In January of 2014, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released their preliminary testing results stating that Bakken crude from North Dakota was more explosive than other crude oils. PHMSA is a part of the Department of Transportation (DOT), the regulatory agency that has ultimate responsibility for any new oil-by-rail regulations.

Then the Wall Street Journal published a study showing the same thing. And now PHMSA has released further data proving this fact — Bakken crude is more volatile and prone to explode. However, the North Dakota Petroleum Council has done a study of their own claiming Bakken crude oil is no different from any other crude oils. And yet, they also include the following disclaimer in their study.

“making the claim that vapor pressure and light ends content correlates to increased ignitability and flammability is a broad statement that without extensive and complicated testing cannot be factually stated or supported”

So, while the industry group spent $400,000 on a study it claims proves Bakken is no different from other oil regarding its ignitability and flammability, they admit they didn’t do the work necessary to confirm their hypothesis is “factually stated or supported.”

Fri, 2014-08-08 11:09Justin Mikulka
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Regulators Ignore One Proven Way to Eliminate Bakken Bomb Trains: Oil Stabilization

On the same day that the Obama administration released long-awaited new safety regulations for the oil-by-rail industry, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released another report with their testing results for Bakken crude oil. The conclusion reached by PHMSA is that Bakken crude oil “is more volatile than most other types of crude.” 

These results don’t come as a surprise since the five oil trains that have crashed and exploded in the last year all were carrying Bakken crude.  

Of course, the new regulations released imultaneously do not require the oil industry to do the one thing that would eliminate this problem: oil stabilization. A well known and proven method for removing the natural gas liquids from crude oil that makes the oil “stable” and non-explosive.

While the new regulations do not offer any proposals to require the oil industry to remove the volatile components of Bakken crude, on page 144 of the proposal they do acknowledge that this is possible. They request comments on the following question:

Is the current exception for combustible liquids sufficient to incentivize producers to reduce the volatility of crude oil for continued use of existing tank cars?

Essentially they are acknowledging that if the industry stabilized the oil it wouldn’t be explosive and thus they would be able to continue to use the existing DOT-111 rail cars to transport it. Just like those tank cars will be able to transport Alberta tar sands oil because it is not explosive.

The week before the release of the new regulations, the American Petroleum Institute and the American Association of Railroads released a joint statement stating that they were in agreement on two things that shouldn’t be part of the finalized new regulations — lower train speeds and mandatory stabilization. And while the proposed regulations do offer some requirements for lower trains speeds, they include nothing about mandatory stabilization.

Tue, 2014-07-08 12:27Steve Horn
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America's Dairyland Turning to Petrostate: Wisconsin Oil-By-Rail Routes Published for First Time

DeSmogBlog is publishing the first documents ever obtained from the Wisconsin government revealing routes for oil-by-rail trains in the state carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale basin.

The information was initially submitted to the U.S. Department of Transportation (DOT) under the auspices of a May 7 Emergency Order, which both the federal government and the rail industry initially argued should only be released to those with a “need to know” and not the public at-large. 

The Wisconsin documents show the three companies that send Bakken crude trains through the state — Burlington Northern Santa Fe (BNSF), Union Pacific and Canadian Pacific — all initially argued routes are “sensitive security information” only to be seen by those with a “need to know.”

As covered in a previous DeSmogBlog article revealing the routes of oil trains traveling through North Dakota for the first time, the rail industry used this same line of legal argument there and beyond.

Wisconsin Emergency Management did not buy the argument, though, and released the documents to DeSmogBlog through the state's Public Records Act.

Mon, 2014-07-07 13:39Steve Horn
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Industry Data Show Oil-By-Rail in North America at Record Levels

On July 3, the Association of American Railroads (AAR) released June 2014 data showing oil-by-rail and petroleum products at-large are moving at record levels throughout North America

The release of the data comes on the heels of the ongoing oil-by-rail nationwide week of action launched by environmental groups.

For the 26th week of 2014 (the half year point) in the U.S., 18.5% more tank cars were on the tracks carrying petroleum and/or petroleum products than last year, a total of 15,894 cars.

Examined on a year-to-date basis, 7.0% more of those same tank cars were on the tracks in the U.S. this year than last, totaling 380,961 cars to date.

Table Credit: Association of American Railroads 

Across the border in Canada, the same trend lines exist: for the 26th week of 2014, 6.9% more cars moved petroleum and/or petroleum products by rail than in the 26th week of 2013.

Looked at in terms of year-to-date compared to 2013, that totals a 7.7% increase in tank cars moving the commodity by rail. 

Table Credit: Association of American Railroads

Bomb trains,” as some critics call them, move oil obtained from hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin to terminals, holding facilities and markets both in the U.S. and Canada.

Hence the upsurge in unit cars carrying petroleum and/or petroleum products both north and south of the border.

Looked at through the lens of North America, 14.6% more tank cars carried petroleum and/or petroleum products during the 26th week of 2014 compared to the same time in 2013.

And 7.0% more of those tank cars have moved petroleum and/or petroleum products to market so far this year as compared to last year. 

Table Credit: Association of American Railroads

Wed, 2014-07-02 10:38Justin Mikulka and Steve Horn
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For Oil-By-Rail, a Battle Between “Right to Know” and “Need to Know”

Lac Megantic train explosion

Since the first major oil-by-rail explosion occurred on July 6, 2013, in Lac-Mégantic, Quebec, citizens in communities across the U.S. have risen up when they've learned their communities are destinations for volatile oil obtained from hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin. 

As the old adage goes, ignorance is bliss. It's also one of the keys to how massive oil-by-rail infrastructure was built in just a few short years — the public simply didn't know about it. 

Often, oil companies are only required to get state-level air quality permits to open a new oil-by-rail facility.

Terry Wechsler, an environmental attorney in Washington, recently explained to Reuters why there was no opposition to the first three oil-by-rail facilities in the area.

“There was no opposition to the other three proposals only because we weren't aware they were in formal permitting,” he said

The same thing unfolded in Albany, N.Y., where there is an ongoing battle over expansion of the major oil-by-rail facility set to process tar sands crude sent by rail from Alberta. The initial permits for the oil rail transfer facility, which would allow two companies to bring in billions of gallons of oil a year, were approved with no public comment

Fri, 2014-06-27 07:00Steve Horn
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Exclusive: North Dakota Oil-By-Rail Routes Published for First Time

For the first time, DeSmogBlog has published dozens of documents obtained from the North Dakota government revealing routes and chemical composition data for oil-by-rail trains in the state carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale.

The information was initially submitted to the U.S. Department of Transportation (DOT) under the legal dictates of a May 7 Emergency Order, which both the federal government and the rail industry initially argued should only be released to those with a “need-to-know” and not the public at-large.

North Dakota's Department of Emergency Services, working in consultation with the North Dakota Office of the Attorney General, made the documents public a couple weeks after DeSmogBlog filed a June 13 North Dakota Public Records Statute request.

“There is no legal basis to protect what they have provided us at this point,” North Dakota assistant attorney general Mary Kae Kelsch said during the June 25 Department of Emergency Service's quarterly meeting, which DeSmogBlog attended via phone. “It doesn't meet any criteria for our state law to protect this.” 

Initially, oil-by-rail giant Burlington Northern Santa Fe (BNSF) and other rail companies sent boilerplate letters — one copy of which has been obtained by DeSmogBlog from the Idaho Bureau of Homeland Security through the state's Public Records Act — to several State Emergency Response Commissions (SERCs), arguing train routes should be kept confidential.

BNSF also sent several SERCs a boilerplate contract proposal, requesting that they exempt the information rail companies were compelled to submit to the SERCs under the DOT Emergency Order from release under Freedom of Information Act. A snippet of the proposed contract can be seen below: 

Dan Wilz, homeland security division director and state security advisor of the Department of Emergency Services, said the claims did not hold legal water. 

“Joe can stand on a street corner and figure that out within a week's period,” Wilz said at the quarterly meeting. “They watch the trains go through their community each and every day.”

BNSF, Canadian Pacific Railway (CP Rail) and Northern Plains Railroad all submitted information to the Department of Emergency Services.

Fri, 2014-06-20 10:25Steve Horn
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Heather Zichal, Former Obama Energy Aide, Named to Board of Fracked Gas Exports Giant Cheniere

Heather Zichal, former Obama White House Deputy Assistant to the President for Energy and Climate Change, may soon walk out of the government-industry revolving door to become a member of the board of directors for fracked gas exports giant Cheniere, who nominated her to serve on the board. 

The announcement, made through Cheniere's U.S. Securities and Exchange Commission Form 8-K and its Schedule 14A, comes just as a major class-action lawsuit was filed against the board of the company by stockholders.

In reaction to the lawsuit, Cheniere has delayed its annual meeting. At that meeting, the company's stockholders will vote on the Zichal nomination.

The class-action lawsuit was filed by plaintiff and stockholder James B. Jones, who alleges the board gave stock awards to CEO Charif Souki in defiance of both a stockholders' vote and the company's by-laws. 

Souki — a central character in Gregory Zuckerman's book “The Frackers“ — became the highest paid CEO in the U.S. as a result of the maneuver, raking in $142 million in 2013, $133 million of which came from stock awards.

Cheniere CEO Charif Souki; Photo Credit: Getty Images

Zichal was nominated to join Cheniere's audit committee of the board, and will be paid $180,000 per year for the gig if elected.

Among the audit committee duties: “Prepare and review the audit committee report for inclusion in the proxy statement for the company's annual meeting of stockholders,” which is now set for September 11 after the push-back following the filing of the stockholder class-action lawsuit.

“The audit committee’s responsibility is oversight, and it recognizes that the company’s management is responsible for preparing the company’s financial statements and complying with applicable laws and regulations,” Cheniere's audit committee charter further explains.

Wed, 2014-06-18 07:06Justin Mikulka and Steve Horn
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White House Meeting Logs: Big Rail Lobbying Against "Bomb Train" Regulations It Publicly Touts

Lynchburg, Virginia Oil Train Explosion

The Obama White House Office of Information and Regulatory Affairs (OIRA) has held the majority of its meetings on the proposed federal oil-by-rail safety regulations with oil and gas industry lobbyists and representatives.

But OIRA meeting logs reviewed by DeSmogBlog reveal that on June 10, the American Association of Railroads (AAR) and many of its dues-paying members also had a chance to convene with OIRA

Big Rail has talked a big game to the public about its desire for increased safety measures for its trains carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale. What happens behind closed doors, the meeting logs show, tells another story. 

At the June 12-13 Railway Age Oil-by-Rail Conference, just two days after rail industry representatives met with OIRA, American Association of Railroads President Edward Hamberg, former assistant secretary for governmental affairs at the U.S. Department of Transportation (DOT), made the case for safety. 

“Railroads believe that federal tank car standards should be raised to ensure crude oil and other flammable liquids are moving in the safest car possible based on the product they are moving,” said Hamberg.

The industry also wants the existing crude oil fleet upgraded through retrofits or older cars to be phased out as quickly as possible.”

Yet despite public declarations along these lines, proactive safety measures were off the table for all four of Big Rail's presentations to OIRA.  

Though private discussions, the documents made public from the meeting show one consistent message from the rail industry: safety costs big bucks. And these are bucks industry is going to fight against having to spend.

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