From the right side news
Our Northern Neighbor Moves to Cut Energy Taxes/Regulation to Boost Its Economy, But Not the U. S.
The United States should start taking lessons from Canada regarding oil development and its relationship to a pro-growth regulatory and tax structure. Continue reading
Joe Carroll, ©2012 Bloomberg News
Asian and European energy producers are spending billions of dollars to amass stakes in oil and natural-gas discoveries from Ohio to British Columbia even as earthquakes and tainted water threaten to stall the biggest drilling boom in at least two decades.
Total SA, Europe’s third-largest oil company, and China Petrochemical Corp., that nation’s second-biggest crude producer, committed $7 billion to U.S. and Canadian shale rock formations during the past two weeks. The investments are aimed at tapping the expertise of smaller explorers including Devon Energy Corp. and Chesapeake Energy Corp. that pioneered techniques employed to crack previously impervious shale.
The potential rewards from shale regions such as the Utica and Marcellus formations in the eastern U.S. are too big for overseas explorers to ignore, said Mark Hanson, an analyst at Morningstar LLC in Chicago. A New Year’s Eve earthquake in Youngstown, Ohio, linked to a well used to store drilling wastewater prompted the state to halt operations at five such wells. Separately, the U.S. Environmental Protection Agency is studying whether intensive shale-drilling practices pose a danger to drinking water.
“These shale prospects are exploration frontiers and the big international players see them as a runway to growth,” Hanson said yesterday in a telephone interview. “They are acquiring stakes not only to learn how to drill these kind of formations in other parts of the world, but to understand how to get their arms around prospects of this size.
Shale acquisitions helped push overseas offers for U.S. oil and gas fields to $51 billion last year, the most in at least 12 years, according to data compiled by Bloomberg. Melbourne-based BHP Billiton Ltd. led purchases in 2011 with the $12.1 billion takeover of Petrohawk Energy Corp.
India’s Reliance Industries Ltd. and Apollo Global Management LLC were today named by people with knowledge of the matter as being among companies in talks to buy El Paso Corp.’s oil and gas exploration and production unit. The unit, whose assets include more than half a million acres of shale fields, may be worth about $8.1 billion, analysts at BNP Paribas SA estimated in November.
El Paso owned drilling rights to 46,000 acres in Louisiana’s Haynesville Shale at the end of 2010, according to a regulatory filing, and 500,000 acres in the Eagle Ford Shale, Permian Basin and other fields in Texas. It also has 605,000 acres in the Raton Basin coal-bed methane field in New Mexico and Colorado.
China Petrochemical, known as Sinopec Group, yesterday agreed to buy a one-third stake in five Devon exploratory oil projects in the U.S. for $900 million. The Beijing-based company also will provide as much as $1.6 billion to cover Devon’s future drilling costs, Oklahoma City-based Devon said in a statement.
The deal followed Sinopec Group’s C$2.2 billion ($2.16 billion) acquisition of Daylight Energy Ltd. on Dec. 23 to get access to the Calgary-based company’s gas and oil projects in western Canada.
Sinopec Group and domestic rivals China National Petroleum Corp. and Cnooc Ltd. are seeking to learn how to tap shale formations at home that the U.S. Energy Information Agency estimates may hold 1,275 trillion cubic feet of gas, or 12 times China’s so-called conventional deposits.
Total agreed to pay $2.32 billion yesterday for a 25 percent stake in 619,000 acres in a section of the Utica shale rich in butane and propane that sell at a premium to gas. Chesapeake will receive $2.03 billion and EnerVest Ltd. will get $290 million.
Total has been a partner with Chesapeake in another shale formation, the Barnett, near Fort Worth, Texas, since 2010. The company plans to transfer what it learns about cracking dense shale from Chesapeake’s experts to shale prospects in Africa, Latin America, Australia and Europe.
Drilling into shale rock to extract gas and crude has come under fire from federal regulators, state lawmakers and environmental groups concerned that the practice may contaminate drinking water. Shale rock was considered too hard to drill until the 1990s, when new methods for boring horizontal wells were combined with hydraulic fracturing, which involves pumping millions of gallons of high-pressure water laced with chemicals and sand underground.
The number of rigs drilling horizontal wells in the U.S. surged 23 percent in 2011, reaching 1,184 on Dec. 16, the highest since at least January 1991, according to Baker Hughes Inc., an oilfield-services provider that tracks rig activity.
Last month, the EPA said for the first time that it found chemicals used in hydraulic fracturing in drinking water in Wyoming. Encana Corp., which operates 150 wells in the region of Wyoming where the EPA made its findings, said on Dec. 20 that the EPA failed to take into account naturally occurring chemicals and the possibility that the agency contaminated its own tests.
Total pursued shale opportunities outside France because of a ban on hydraulic fracturing in the company’s home country. Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets, said the Dec. 31 quake in Ohio — the tenth in that region in a year — is unlikely to spur restrictions that may disrupt U.S. shale exploration.
“No one has made a concrete connection between earthquakes and drilling,” Hanold said in a telephone interview. “There’s not a lot of fear of regulation right now.”
–With assistance from Jim Polson, Benjamin Haas and Jim Efstathiou Jr. in New York, Mike Lee in Dallas, Mark Niquette in Columbus and Andrew Hobbs in Sydney. Editors: Charles Siler, Ryan Woo
To contact the reporter on this story: Joe Carroll in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Susan Warren at email@example.com
In 1969, three unrelated events occurred that have since been combined with political bungling to slowly strangle the U.S. economy. Moammar Gadhafi overthrew King Idris of Libya. He nationalized Western oil company reserves with no retribution from the U.S. Sensing our weakness, all of the other OPEC nations abrogated their concession agreements with U.S. companies. The Arab producers cut back production and embargoed the U.S. because of our support for Israel. Middle East despots have been in the driver’s seat ever since, and as the Arab Spring seems increasingly likely to empower Islamists, things are unlikely to get better. Continue reading
Redford in war of words with NDP over anti-Keystone trip to U.S.
OTTAWA — Premier Alison Redford found herself Thursday embroiled in war of words with the federal NDP as she joined her federal Conservative counterparts slamming official Opposition MPs for travelling to Washington to speak to U.S. lawmakers against the Keystone XL pipeline.
In Ottawa, Redford made the comments the same day she sat down with Prime Minister Stephen Harper in their first official meeting to discuss federal-provincial relations.
The two Calgary politicians, who’ve known each other for almost three decades, spoke about issues such as health-care funding, immigration and a new Canadian energy strategy. Continue reading
The Obama Administration’s decision to put off construction of parts of the Keystone XL crude oil pipeline was lauded by environmentalists. The plan is to pipe oil from the Tar Sands of Alberta, Canada, to the Gulf Coast of Texas. But despite that delay, many investors and industry observers in Texas think they already know how the cards will fall.
Go to StateImpact, Texas to see the full story from Mose Buchele.
Shipping our oilsands bitumen to Texas and Oklahoma through the $7 billion Keystone XL pipeline may be in doubt after the U.S. State Department announced an environmental review of alternative routes for the project. This puts the pipeline on temporary hold, jeopardizing thousands of potential U.S. jobs, until well into 2013.
Critics are savaging President Obama over the move, which amounts to shoring up the liberal swing vote in the lead-up to the 2012 presidential election. Continue reading
Perry has made energy exploration and drilling for oil a central tenant of his policy for fixing the economy as a Republican presidential candidate.
By MIKE DE SOUZA, Postmedia News
They are urging Prime Minister Stephen Harper‘s government to focus on pipelines and electric grids that secure Canadian energy from east to west instead of shipping tens of thousands of jobs to refineries down south. Continue reading