California Natural Gas Explosion Gets Everyone's Attention

The natural gas industry is coming under intense scrutiny today, after a massive fireball ripped through a ruptured pipeline in a suburban town near San Francisco, killing at least four people, injuring dozens more, and burning more than 50 homes to the ground.

The cause of the fire, traced to a pipeline operated by the Pacific Gas & Electric company in the town of San Bruno, was under investigation today. But it ramps up public pressure for the Obama administration to take a hard look at one of the fastest growing sources of Americanenergy.

The fires in San Bruno burned for more than 12 hours after residents reported a deafening explosion. Residents who fled their homes said it felt like they were fleeing a blowtorch.

"It looked like hell on earth. I have never seen a ball of fire that huge," Bob Pellegrini, who lived near the scene of the explosion told reporters.

Shale gas production in the US rose 71% over the last decade, according to the Natural Resources Defence Council.

Although energy from natural gas has lower carbon emissions than coal, environmental organisations are sounding the alarm about a controversial method used to get the natural gas out of the rock.

Hydraulic fracturing, or fracking, a method developed by the Halliburton oil services company, uses a mix of water sand and chemicals such as diesel fuel to break up rock formations deep underground and free trapped deposits of oil and gas.

But industrial and federal studies have shown the process also leaves between 20% to 40% of the components of the diesel fuel in the ground. About 90% of the 450,000 natural gas wells in the US rely on hydraulic fracturing.

Towns around America have documented contaminated drinking water from fracking as well as cattle deaths and fish kills in nearby streams – an issue explored in the new film Gasland.

The technology – so far – is exempt from federal regulation. But that is changing. The Environmental Protection Agency, under pressure from Congress, has been taking a look at fracturing.

The agency asked nine drilling companies on Thursday to show where they were engaged in hydraulic fracturing, disclose the chemicals that were in use and their potential environmental effects. Congress had earlier allowed the companies to keep the chemicals a "trade secret".

The EPA has also been holding public hearings on hydraulic fracturing in West Virginia and Pennsylvania, where the new technique will allow drilling companies to reach potentially huge reserves of natural gas.

"This scientifically rigorous study will help us understand the potential impacts of hydraulic fracturing on drinking water – a concern that has been raised by Congress and the American people," the EPA chief Lisa Jackson said in a statement.

"Natural gas is an important part of our nation's energy future, and it's critical that the extraction of this valuable natural resource does not come at the expense of safe water and healthy communities," the statement said.

EPA to Study Fracking Chemicals

The Environmental Protection Agency asked companies including Halliburton Co. andSchlumberger Ltd. to disclose chemicals used to dislodge underground natural gas for a study on potential threats to drinking water.

Nine service companies were asked for information about the chemicals used in hydraulic fracturing, the U.S. agency said today in a statement. In fracturing, millions of gallons of chemically treated water are forced into underground wells to break up rock and allow gas to flow.

Gas locked in shale formations may account for 50 percent of the U.S. supply by 2035, up from 20 percent today, according to a March study by IHS Cambridge Energy Research Associates. Environmental groups say the process has tainted drinking water supplies and should be regulated by the federal government.

“The companies have different views on whether or not they should be providing this information,” Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based policy analysis firm, said in an interview. “The EPA is nudging in everywhere they see what looks like state accommodation.”

Houston-based Halliburton said it would comply with the request, which the agency said was voluntary.

“We will, of course, fully cooperate with their request,” Teresa Wong, a Halliburton spokeswoman, said today in an e- mailed statement. “In the meantime, Halliburton supports and continues to comply with state, local and federal requirements promoting the forthright disclosure of the chemical additives that typically comprise less than one-half of one-percent of our hydraulic fracturing solutions.”

EPA’s request went to BJ Service Co., Complete Production Services Inc., Key Energy Services Inc., Patterson-UTI Energy Inc., PRC Inc., Superior Well Services Inc. and Weatherford International Ltd., according to the agency’s statement.

To contact the reporter on this story: Jim Efstathiou Jr. in New York atjefstathiou@bloomberg.net.

North Dakota Says Yes to Natural Gas

Hess Corp. was granted permission Wednesday to begin a $500 million expansion of its natural gas processing plant in northwestern North Dakota.
The plant, which was first built in the 1950s, can process 120 million cubic feet of natural gas daily. Hess is upgrading the factory to handle 250 million cubic feet each day, which will help meet demand for processing the increased natural gas production coming from western North Dakota's oil fields.
North Dakota's Public Service Commission on Wednesday approved the site plans for the expansion, which will be located about a mile east of Tioga in Williams County. Kevin Cramer, chairman of the state Public Service Commission, said the project represents a $500 million investment.
The improved factory will be equipped to recover ethane from the natural gas, PSC filings say. Ethane is used as a refrigerant and in chemical manufacturing.
Commissioner Tony Clark said Hess intends to begin construction in July 2011 and finish by mid-2013. It will take 300 to 500 workers to build the project, and the company intends to bring in portable housing to avoid making a local housing shortage even worse, Clark said.
"They do have a plan to bring in a temporary camp ... to take care of the housing and infrastructure needs for those individuals, so it doesn't become an even greater strain on that area," Clark said.

Offshore Assets Still Strong

Devon Energy (DVN: 62.79, -0.72) has nearly completed its strategic restructuring. (An offshore Brazil sale to BP is under review by the Brazilians, but most other sales are completed.)

The company is generating over $8 billion (after tax) from sales of its high-capital and riskier assets mostly offshore and in the Gulf. The cash will be used to pay down debt further—with a net debt to cap ratio of 14%, Devon has one of the strongest balance sheets in the sector—and buy back shares.

A program to buy up to $3.5 billion in shares, representing about 12% of the company's outstanding, has been initiated, with some 3% bought back in the last quarter.

Onshore oil and gas going forward Devon is now essentially on North American onshore company, in both exploration and production.

It is also looking to shift towards more oil, with a target of 50/50 (reserves are currently about 60% gas following the sale of offshore, mostly oil, assets), so more capital is being spent on developing some of its oil and liquid gas projects.

It also has significant midstream operations, being one of the largest processors of gas in North America and with thousands of miles of pipelines.

Separately, long-time executive John Richels has been appointed CEO while co-founder Larry Nichols becomes executive chairman.

The stock is inexpensive (part of the reason for the massive share buy-back), particularly on an asset basis, selling at a significant discount by some estimates).

This helps explain why legendary oil man T. Boone Pickens bought shares in the last quarter and makes Devon a potential target for a major wanting to increase North American exposure. It's a long-term buy at the current level.

Natural Gas Report Available

Dublin, Sep 06, 2010 (M2 PRESSWIRE via COMTEX) --

Research and Markets (http://www.researchandmarkets.com/research/30b9de/natural_gas_indust) has announced the addition of the "Natural Gas Industry to 2016 - Abundance of Unconventional Gas Changing the Industry Landscape" report to their offering.

Natural Gas Industry to 2016 - Abundance of Unconventional Gas Changing the Industry Landscape. The study, which is an offering from the companys Energy Research Group, provides an in-depth analysis of the natural gas market across the world and highlights the various concerns, shifting trends and major players in the region. The report provides forecasts for the exploration and production industry, natural gas pipeline industry, natural gas storage industry, unconventional resources and production and consumption analysis till 2016. The report also provides consumption forecasts in different geographic regions. The report provides in-depth analysis of the key trends and challenges in the natural gas market across the world. An analysis of the competitive scenario of the different segments is provided. The report is built using the data and information sourced from proprietary databases, primary and secondary research and in-house analysis by a team of industry experts.

Unconventional Natural Gas Will Account for Majority of Natural Gas Supply and will be the key driver of Natural gas production growth in North America

The North American natural gas industry is expected to witness a steady growth in production from 72.4 Bcf/d in 2008 to 82.1 Bcf/d in 2020, at an AAGR of 1.2%. The unconventional natural gas is expected to account for 52% of the total production in 2020. In US, the unconventional natural gas already accounts for approximately 50% of the production. By 2020, the share is expected to increase to 58%. In Canada, the unconventional natural gas production is expected to account for 30% of the production in 2002, up from approximately 5% share in 2008.

North America Natural Gas Industry, Growth In Natural Gas Production, Bcf/d, 2008-20

Shale gas plays are expected to be the prime drivers of growth in North Americas natural gas production. The six major shale gas plays in North America namely Antrim, Barnett, Woodford, Haynesville, Fayetteville, Marcellus and Horn River are together expected to produce approximately 19.6 Bcf/d in 2020 with over 50% of this production coming from Haynesville and Barnett shale plays.

Key Topics Covered:

- 1 Contents

- 2 The Future of the Natural Gas Industry to 2016

- 3 Overview of the Natural Gas Industry

- 4 Global Natural Gas Industry - Key Issues And Challenges

- 5 Global Natural Gas Exploration and Production Industry to 2016

- 6 Global Natural Gas Pipelines Industry to 2016

- 7 Global LNG Industry to 2016

- 8 Economics of Transporting Gas through LNG and Pipeline

- 9 Global Natural Gas Storage Industry To 2016

- 10 Global Natural Gas Consumption To 2016

- 11 Unconventional Natural Gas Industry

- 12 Appendix

For more information visit http://www.researchandmarkets.com/research/30b9de/natural_gas_indust

CONTACT: Laura Wood, Senior Manager, Research and Markets Fax: +1 646 607 1907 (from USA) Fax: +353 1 481 1716 (rest of the world) e-mail: press@researchandmarkets.com

((M2 Communications disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wideweb. Inquiries to info@m2.com.

For full details on Evergreen Managed Inc Fd (ERC) ERC. Evergreen Managed Inc Fd (ERC) has Short Term PowerRatings at TradingMarkets. Details on Evergreen Managed Inc Fd (ERC) Short Term PowerRatings is available at This Link.

Natural Gas Has Important Role for the U.S. Economy

Online PR News – 04-September-2010 – HOUSTON, Texas – The beleaguered US economy has some help on the way with cheaper natural gas to help support and power a hoped-for recovery. Dispersed across the US (and Canada), “unconventional” gas basins are being developed quickly in Texas, Oklahoma, Wyoming, Colorado, Louisiana, Arkansas, Pennsylvania and elsewhere.

For example, the fast-expanding Marcellus Gas Shale drilling play in Pennsylvania has added thousands of new jobs and millions in investment to a region that needs both. Just two years ago the state’s Department of Environmental Protection reported that 195 gas wells were drilled in Pennsylvania’s Marcellus Shale. That number is forecast to be as high as 1,090 wells this year up 459 % since 2008.

Significant gas production from unconventional natural gas basins automatically follows increased drilling such that by 2012 it’s estimated that upwards of 17% of the US gas supply will come from the top unconventional gas basins. This supply-side growth means cheaper natural gas: From a peak wellhead price of $11.32 per thousand cubic feet of natural gas in July 2008, prices have fallen to around $4 by late August, 2010 according to the US Department of Energy.

The result: Low price and high availability of natural gas that is going to be very supportive to a struggling economy which needs natural gas for electric power generation, residential heating, industrial and commercial uses and of late, natural-gas powered bus and delivery fleets.

These important unconventional gas basins are changing with today’s huge gas supply and low gas prices according to Warlick International, a Houston-based oil & gas intelligence firm. The company just published seven new reports that address big changes taking place in leading North American unconventional gas basins, reporting on growth, new economics, future potential and the impact on the North American recovery. To find out more go to http://warlickreports.com.

Warlick International is a Houston-based oil & gas intelligence firm that is a leader in evaluating unconventional oil & gas resource markets. The company has provided business information, marketing counsel, litigation services and strategic solutions to oil & gas, oilfield services and financial sector clients for more than 35 years, with emphasis on upstream energy.

Natural Gas Rigs Down 4

The U.S. energy rig count fell by three to 1,653, the first decline in 13 weeks, according to data published by Baker Hughes Inc. Oil rigs fell by seven to 665, and natural-gas rigs increased by four to 977.

The total U.S. count has gained 64 percent in the past year, Baker Hughes reported on itswebsite.

The number of oil rigs fell for the first time in seven weeks. The total has more than doubled in the past year.

Gas rigs gained for the first time in three weeks. The count has gained 39 percent in a year.

Miscellaneous rigs, which primarily drill for geothermal energy, were unchanged from last week at 11.

Canadian rigs rose to 388 from 386. The total has more than doubled in the past year.

Crude oil for October delivery fell $1.29, or 1.7 percent, to $73.73 a barrel at 1:27 p.m. on the New York Mercantile Exchange.

Gas for October delivery increased 9.9 cents, or 2.7 percent, to $3.85 per million British thermal units on the Nymex.