Penn Residents Worried About Shale

Residents worried about Marcellus Shale natural gas drilling want to make sure Allegheny County Council holds a second public hearing on the subject.

Council's agenda for Tuesday night includes a motion to schedule a hearing next month.

Gloria Forouzan, of Lawrenceville, said she and other anti-drilling advocates want council members to know the topic is important to many of their constituents.

If authorized by a majority of full council, the session would take place 5 p.m. March 10 in the Gold Room of the courthouse.

Council had held a similar hearing on July 21.

Since that time, County Executive Dan Onorato has come out in support of natural gas drilling on county-owned land, a position that has drawn support from both Republican and Democratic candidates looking to succeed him.

County officials have said that any drilling would have to be done in ways that benefit the local community, protect the environment and respect the rights of neighboring property owners.

With a primary election coming in May, Ms. Forouzan said the topic deserved another airing. "A lot more people have become concerned about this issue in the past few months," she said. "They need a chance to speak out."

Council's government reform committee last week discussed but took no action on three measures that would regulate drilling in the county.

Councilman Michael Finnerty, D-Scott, proposed an ordinance to prohibit natural gas wells within 2,000 feet of a residence. Councilmen Rich Fitzgerald, D-Squirrel Hill, and John DeFazio, D-Shaler, proposed a 500-foot buffer zone. Lycoming County had passed a similar regulation, Mr. Fitzgerald said.

State law requires only a 200-foot buffer around drilling platforms.

Committee members discussed both measures with representatives of the state Department of Environmental Protection and of Range Resources, a drilling company active in Southwestern Pennsylvania.

The proposed county restrictions, which would be stricter than state rules, might not be legal, Range Resources spokesman Jim Cannon said. It was not clear if state law would pre-empt local regulations on setbacks, he said.

Elizabeth Schneider, a member of Lincoln Place Action group, urged council to pass tougher drilling rules. Even a 500-foot buffer zone was not sufficient to protect neighbors in urban or suburban areas, she said.

Councilwoman Jan Rea, R-McCandless, had proposed an ordinance to set up a county disposal registry to keep track of the liquids used to fracture underground rocks and release natural gas.

She withdrew her measure after George Jugovic, the EPA's southwest regional director, said the state collected such reports two times a year.

Worker Still Missing from Mont Belvieu Explosion

Mont Belvieu, TX—One worker is still missing following an explosion and fire at a natural gas liquids plant in Mont Belvieu, Tuesday afternoon, February 8, 2011. The blast occurred around 12:30 p.m. at Enterprise Products petrochemical plant, which is about 30 miles southeast of Houston, as reported by Forbes and Fox News.

A plume of smoke from the explosion and subsequent fire could be seen for 30 miles, as firefighters battled to contain the flames. The fire was so intense that it caused trucks parked in a nearby lot to explode.

Officials believe the blast was caused by a “failure of some kind” on one of the plant’s pipelines that feeds liquids into the dome. Another source stated the explosions also occurred in an iso-octane unit.

One worker is still missing following the blast. Details regarding the missing worker have not been released.

Enterprise Products Partners is one of the largest NGL fractionation complexes in the world.

Investigations are underway.

LNG Plant Ensenada Still a Go

Ensenada officials who attempted to shut down a big natural gas import terminal that supplies Mexican and U.S. customers were rebuffed Friday by Baja California and federal intervention.

"The municipal police came onto the site," said Kathleen Teora, a spokeswoman for San Diego-based Sempra Energy, which owns the Energia Costa Azul plant. "There was an issue between the state, the federal and the municipal authorities."

The plant continued operating, she said.

Ensenada Mayor Enrique Pelayo Torres ordered the plant shut down Friday saying there were "irregularities and flagrant violations to the law."

Later in the day, however, the president of the Mexican Energy Regulatory Commission sent Pelayo a letter asserting that the plant is operating within the law and that it's up to federal officials, not local politicians, to decide whether it stays open or not.

Chevron Finds More Natural Gas in Australia

SAN RAMON, Calif., Feb 09, 2011 (M2 PRESSWIRE via COMTEX) --

Chevron Corporation (NYSE: CVX | PowerRating) today announced a further drilling success in the Carnarvon Basin offshore Western Australia, Australia's premier hydrocarbon basin.

The Orthrus-2 well is located in the WA-24-R permit area approximately 60 miles (100 kilometers) northwest of Barrow Island. The well was drilled to a total depth of 14,098 feet (4,297 meters).

Combining both appraisal and exploration objectives, the well encountered 243 feet (74 meters) of net gas pay, of which 102 feet (31 meters) of net gas pay was encountered in a deeper, previously unexplored target interval in the Orthrus field.

George Kirkland, vice chairman, Chevron, said, "The find at Orthrus-2 represents our tenth offshore discovery in Australia within the past 18 months. Our successful drilling program offshore Western Australia demonstrates Chevron's global exploration capability and our commitment to technical excellence and safe operations."

Jim Blackwell, president, Chevron Asia Pacific Exploration and Production, said, "Our leading Carnarvon Basin leasehold and our accompanying exploration success help underpin further expansion opportunities on the Gorgon Project."

Chevron's Australian subsidiary is the operator of WA-24-R and holds a 50 percent interest, while Mobil Australia Resources Company Pty Limited holds 25 percent. Shell Development (Australia) Pty Ltd and BP Exploration Alpha Ltd each hold a 12.5 percent interest.

Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products;manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Insignia Energy Upbeat

CALGARY, Feb. 8 /CNW/ - Insignia Energy Ltd. ("ISN" - TSX) ("Insignia" or the "Company") is pleased to announce the results of its independent reserve evaluation, effective December 31, 2010, of the Company's reserves by GLJ Petroleum Consultants Ltd. ("GLJ").

2010 YEAR-END RESERVE HIGHLIGHTS

• Proved producing reserves increase by 34% to 3.9 MMboe, proved reserves increased by 14% to 6.2 MMboe and proved plus probable ("P+P") reserves increased by 10% to 14.7 MMboe, compared to 2009 year end levels, on a per share basis and on an absolute basis.
• Insignia's reserve additions totaled 2.4 MMboe on P+P reserves and 1.8 MMboe on proved reserves.
• The Company increased its oil and natural gas liquid reserves by 98% and 77% on total proved and total P+P reserves, respectively, compared to its 2009 year end reserves.
• Based on fourth quarter 2010 average production of 3,289 boe per day, Insignia's reserve life index ("RLI") is 12.2 years on P+P basis and 5.1 years on a proved basis

Gas Trader Pleads Guilty

HOUSTON—Former Houston gas trader Stephanie Roqumore has pleaded guilty to two counts of wire fraud arising from her scheme to defraud numerous natural gas trading companies of nearly $8 million, United States José Angel Moreno announced today.

Today, at a hearing before United States District Judge Lynn N. Hughes, Roqumore, 48, admitted that from March 2002 through April 2010, she used false and fraudulent financial statements to defraud 12 known companies—Virginia Power Energy Marketing, Inc.; Coral Energy Resources, L.P.; Occidental Energy Marketing, Inc.; Energy-Koch Trading, L.P.; Cargill, Inc.; Hess Corporation; Natural Fuel Resources, Inc.; Proliance Energy, LLC; Southwest Energy, L.P.; Adams Resource Marketing, LTD; Allegheny Energy; and CMS Resource Energy Management Company. Judge Hughes scheduled Roqumore’s sentencing for May 9, 2011. Each of the wire care fraud counts carries a maximum penalty of 20 years in a federal prison and a $250,000 fine. In addition to pleading to the criminal charges, Roqumore has agreed to a forfeiture order of over $4.8 million in illegal proceeds from her scheme.

Roqumore admitted that as the sole employee, owner, and operator of three natural gas trading companies: SRR Energy Management Resources, Inc, d/b/a Gas Energy Management, Inc. (GEM); Gas American Resources, Inc. (GAR); and, Resource American Energy (RAE), she contacted natural gas trading companies all over the country requesting to trade natural gas with them. If the company was interested in trading with Roqumore, the two parties entered into a Base Contract for Sale and Purchase of Natural Gas. Shortly after entering into the contract, Roqumore would request a line of credit from the trading company in order to purchase natural gas from them. The companies required financial statements from Roqumore for whichever of her three companies she was using at the time. The line of credit was granted based on the net worth of the company provided in its financials. The financial statements that Roqumore provided to obtain the lines of credit were intentionally falsified by her to make her companies (GEM, GAR and RAE) appear to be more profitable and worth far more than they actually were.

She further admitted the false financial statements for GEM or GAR were faxed by Roqumore under a cover letter purportedly from an actual Certified Public Accountant (C.P.A.). The attached sheets were stamped "audited" and always showed Roqumore's companies, whether GEM or GAR, with a net year-end income in the millions of dollars. Roqumore admitted that she falsified the cover letters also and that the C.P.A. played no role in her fraudulent behavior. The fraudulent financials showed year-end net incomes for GEM and GAR for 2003 to 2006 in the multi-millions, when in fact neither company’s yearly net income ever exceeded $100K and their ending net income was usually negative. Roqumore also created fraudulent financials for RAE for the same purposes. The RAE financials, however, were sent under a cover letter from a fictitious C.P.A. firm, R&R Accounting and Consulting Group, in Houston.

Roqumore admitted purchasing natural gas from one of the victim companies using the fraudulently obtained line of credit and then selling that natural gas to other gas companies. When the trades settled, Roqumore was paid for the gas she sold but she did not pay the victim company for the gas she bought. For example, from November to December 2005, Energy-Koch Trading, L.P. (EKT) sold GEM $1.1 million of natural gas on credit. Roqumore, in turn, sold that natural gas to four other companies for just under $1.1 million. On the settlement dates, GEM was paid a total of $1,092,187.80 by the four companies, but GEM paid EKT only $50,000. Roqumore never paid EKT the remaining $1,046,331.20 for the natural gas she purchased from them. On August 30, 2006, Roqumore faxed fraudulent financial statements showing a net income of more than $10 million for GAR to National Fuel Resources, Inc. (NFR). Another time, Natural Fuel Resources, Inc. (NFR) sold GAR $1.6 million of natural gas on credit. Roqumore, in turn, sold that natural gas to Conoco Phillips for just over $1.6 million. On the settlement dates, GAR was paid $1,649,730.00 by Conoco Phillips but GAR paid NFR only $100,000. Roqumore never paid NFR the remaining $1,494,617.00 for the natural gas she purchased from them. In total, Roqumore fraudulently obtained approximately $7.9 million in natural gas on credit from the 12 energy companies from March 2002 through April 2010. Roqumore never paid for that natural gas.

Roqumore remains free on bond pending sentencing.

The investigation leading to the criminal charges and today’s conviction was conducted by the FBI. Assistant United States Attorney Al Balboni is prosecuting the case.

Tucson Area Had Natural Gas Shortage This Week

Some Tucson-area customers may be without natural gas service as late as Monday or Tuesday, Southwest Gas spokeswoman Libby Howell said.

The utility is bringing in about 70 workers from elsewhere to help re-start gas service at homes on Tucson's east side.

About 14,000 Tucson homes east of North Swan Road in the Catalina Foothills and in the Rita Ranch area have been without natural gas service since this morning, Howell said.

Southwest Gas workers will have to go door-to-door in those areas twice, Howell said. First they will turn off the meters at each house, then they will go inside each house to light pilot lights and ensure service has resumed, Howell said.

In response to the outages and record cold, city officials are opening two shelters at 5 p.m. today. They are at Udall Center, 7200 E. Tanque Verde Road and Pantano Christian Church, 10355 E. 29th St.

The Udall location will permit pets but only if they are in crates, and the Pantano location will not accept pets.

A shortage of natural gas in the pipeline that serves Tucson left areas on Tucson's northeast and southeast sides without gas service beginning this morning.

The southern part of Sierra Vista, down to Hereford, also is without gas service. Cochise County has set up temporary warming centers, not equipped as shelters, in Benson, Bisbee, Douglas, Sierra Vista and Willcox.

The places most affected around Tucson are from North Swan Road eastward in the Catalina Foothills to North Wentworth Road and the Rita Ranch area on the southeast side.

Southwest Gas is asking customers who still have natural-gas service to limit their use by turning down the heat and reducing hot-water usage.

The reason for the shortage is not only the high demand by residential customers but also high demand by power companies to fuel their plants, El Paso Natural Gas said in a news release. In addition, power outages and freeze-offs in the areas that supply gas have reduced the supply.

“More gas is being taken off our system than we have supplies coming into the system,” El Paso said.

El Paso supplies the gas used by Southwest’s customers, while Southwest runs the local distribution system. El Paso said it is shifting all the gas possible into its pipeline.

East-side resident Donna Ester said her thermostat was set at 60 degrees all night but the gas went out before it automatically goes up during the day. The result: the indoor temperature was in the low 50s all day and promised to go further down.

“I worry most about my cat because he is always cold,” Ester said via e-mail. “I’ve been heating up a neckwarmer in the microwave and putting it in his bed.”

A drop in the pipeline's pressure began knocking out customers' service around 6:30 a.m., Howell said. As the extent of the problem became clear, the utility turned off service to affected areas.

It’s a scary scenario for elderly people living in Hereford, resident Beverly Manigault said. The temperature dropped below zero in their area, which lies in a dip near the Huachuca Mountains, she said.

Electric space heaters are sold out at local retail stores, but Manigault’s husband was able to buy three at the store on Fort Huachuca, she said.

They’re using two in their home and gave the other to an elderly neighbor, she said.

At Loew's Ventana Canyon resort, on the northeast side, 400 guests found themselves without heat today, General Manager Brian Johnson said. The resort adjusted by serving mostly cold items in the restaurants and providing extra blankets to guests.

About 10 guests checked out as a result, he said. Guests may also request to be moved to another inn, he said.

The resort's engineers also examined the gas fireplace in the resort's lobby and determined it could be used to burn wood, so logs are flaming there now, Johnson said.

"A lot of guests we’ve talked to have been very understanding," he said. "It’s totally out of our control."