Obama to Oil Companies: Don't Bother!

In yet another move pandering to environmentalists, the Obama administration has delayed shale drilling in the Utica & Marcellus shale formation in the Ohio area.  This follows right behind his announcement to delay decision on the Keystone pipeline last week.  His new slogan, "We Can't Wait!" means only "We CAN Wait Until After Elections!" 

Shale drilling is booming around the Shreveport-Bossier area with the discovery of the Haynesville Shale a few years ago.  Take a drive down south from Shreveport on Highway 1 or Highway 71, among others, and you'll see gas production every where you turn.

Chesapeake Energy, one of the major Haynesville Shale developers, describes hydraulic fracturing:

Hydraulic fracturing, commonly referred to as fracking, is a proven technological advancement which allows producers to safely recover natural gas and oil from deep shale formations. This technology has the potential to not only dramatically reduce our reliance on foreign fuel imports, but also to significantly reduce our national carbon dioxide (CO₂) emissions and accelerate our transition to a carbon-light environment. Simply put, deep shale gas and oil formation development is critical to America's energy needs and economic renewal.

Chesapeake is also involved in working wells in the Marcellus shale area.

Here's a YouTube video on how fracking works.

The concern of environmentalists to fracking is the chemicals used in the process:

Shale gas production involves drilling deep wells and one or more horizontal shafts from each vertical well. By pumping a mixture of water, sand and chemicals under pressure into the horizontal borings, producers fracture the shale, releasing the gas and oil, which is then produced through the vertical well. 

Environmentalists criticize the technology, arguing that the risk of methane infiltrating underground water reservoirs must be figured out before the big energy corporations run rough-shod through the state.  Ken Salazar's statement of concern is here.

One concern of environmentalists is that methane would leak into water wells.  Chesapeake disputes this claim in a Marcellus Hydraulic Fracturing Fact Sheet on their website:

The measures required by state regulatory agencies in the
exploration and production of deep shale natural gas and oil
formations have been very effective in protecting drinking
water aquifers from contamination attributable to fracking.
Based on reviews of state oil and gas agencies, there has not
been a documented case of drinking water aquifer
contamination related to the fracking of a deep shale natural
gas or oil well.

Chesapeake is not the only oil and gas company working the Marcellus shale, but they have gone to great lengths to reassure and inform on their process to the extent of even forming a GreenFrac program:

Despite being successfully used by the oil and natural gas industry since the 1940s, fracking continues to draw attention due to concerns over the contents of frack fluids and potential contamination of groundwater, despite the fact that there is virtually no risk that the mixture can escape from the targeted zone. Most of the chemicals used in fracking can be found in common, everyday household products such as laundry detergents, cleaners and beauty products. Some are even present in food and beverage items. While some additives have historically been classified as toxic, many, such as pH-adjusting agents and chlorine-based sanitization aides, are found in approximately the same concentration as in your backyard swimming pool.

The research abounds.

The bottom line is that fracking is a procedure that has been around for decades.  And it would not matter HOW the oil was collected, the environmentalists would not be pleased.  Most of them won't be pleased until we're back to horse and buggy transportation and using windmills to power our electric cars.

This latest move by Obama is simple pandering and should be seen for what it is.

Note:  It was reported that this delay would cost over 200,000 jobs but the actual number is actually up to 200 jobs, according to an "adjustment" by the USDA.  Even still, the point remains that it's a pandering move meant to appease a portion of his base and 200 jobs is still 200 jobs.

The bigger picture is that the message has been heard by future developers.  This administration will thwart you at every turn.  Don't bother trying to get your permits, your pipelines, your leases.

Haynesville Shale Billboard Campaign

Andrew Walker has begun a letter campaign to Gov. Bobby Jindal and wants your help. If you live in the Haynesville Shale leasing area, this concerns you! The problem centers around the fact that the La. Supreme Court has ruled that drilling units must support only one well. The Haynesville units will require multiple wells which leads to discriminatory practices and poor management practices.

I wrote about this previously here.

Mr. Walker says:

"The Haynesville Shale discovery could be the greatest economic boost in the history of Louisiana; however, we believe these wells are being drilled in violation of state law. Every single landowner in northwest Louisiana should beware of the fact that, whether they like it or not, their property is about to be “force-pooled” by the Louisiana Commissioner of Conservation into an illegal compulsory drilling unit. As unitization will override provisions of an oil and gas lease, the violations of our law will expose every property owner to a twisted, unconstitutional system that promotes discriminations. Our state will be buried in relentless lawsuits. We must correct the situation before it is too late."

Here is his website where you can read more and can find a sample letter. You will also find his earlier, heavily researched article on the topic.

The Haynesville Shale Problem

I received an e-mail a while back from Andrew Walker of Walker Petroleum in Shreveport. With the recent discovery of the Haynesville Shale which is a rock formation containing oil and gas lying approximately 10,500 to 13,000 feet sub-surface in northwest Louisiana and East Texas, Mr. Walker has become concerned about the lease units.

Last summer, before the economy tanked, folks around here were signing leases and getting fat checks. Then the economy tanked, gas prices dropped, and no more lease deals (nope - I didn't get one.)

According to Mr. Walker's extensive research, he says the issue is that Louisiana law requires our "commissioner of conservation to prescribe units that can be drained by one well." The problem is that the lease units are being drawn up with more than one well which does not conform to state law. This opens a huge can of worms, one of the biggest being that landowners would be subject to unfair apportionment of drilling and production. It also leaves oil companies and the state open to lawsuits later on.

He is calling for a new type of compulsory unit to be drawn up that will allow multi-well, 640-acre shale units and that provides equal protection for property owners.

In a heavily researched paper that was much too long for The Times to print, Mr. Walker outlines the case of three landowners of a 600+ acre "unit." Basically, all the wells are on the land of one landowner and he is taking all the surface damage, but the other two landowners are also reaping profit with no surface damage, traffic, wells, or mess on their land. The profit is divided between the three owners of the "unit" even though one takes the hit. Not fair.

Once the drilling becomes more urban the problem will only increase.

Go here to read Mr. Walker's Times article. You can go here to learn more about the Haynesville Shale.

Mr. Walker would love to hear from anyone who might be interested in getting involved or have experience with this issue. You can contact him at fairdrilling (at) aol.com.