March 29, 2024

Leak at Oil Sands Project in Alberta Heightens Conservationists’ Concerns

Either way, the leak at the oil sands project in Northern Alberta — which has spilled 280,022 gallons of oil across 51 acres since June — is stoking the controversy over the energy source.

“This mess is a symptom of the problems with the reckless expansion of the tar sands,” said Anthony Smith, a lawyer in the international programs division of the Natural Resources Defense Council in Washington. “Environmental regulations have just not caught up.”

The oil sands industry is booming in Canada, pumping billions of dollars into the economy and providing thousands of jobs. But critics contend that the processes for recovering the low-grade petroleum called bitumen are particularly harmful to the environment. President Obama is weighing climate concerns in his decision to approve — or not approve — the Keystone XL pipeline, which would link Canada’s oil sands with the American Gulf Coast.

The cause of the oil spill at the Royal Canadian Air Force base in Cold Lake, Alberta, remains unclear. The company that owns the project, Canadian Natural Resources, blames abandoned wells in the area. Environmentalists point to fundamental flaws with the company’s process.

Until they find the source of the problem, oil continues to leak at four locations. The spill, modest by historical standards, is manageable for the company, which says it expects to spend $60 million on cleanup and investigation. But already the leak is spoiling the landscape and hurting wildlife. It has killed 71 frogs, 27 birds and 23 mammals, including two beavers, according to the company.

At the site, Canadian Natural Resources uses an approach that is increasingly common for oil sands ventures.

In a process similar to hydraulic fracturing, or fracking, Canadian Natural injects hot steam at high pressures into underground oil sands deposits. The heat liquefies the bitumen and the pressure separates it from the surrounding sand. The process allows the bitumen to flow to the surface through wells.

Canadian Natural has been reluctant to acknowledge the spill, going public only after The Toronto Star published an article based on photographs and documents from a government scientist who was not identified by name. But in a conference call with analysts last week, Steve W. Laut, the company’s president, repeatedly defended its process, saying it had not caused the spill.

Mr. Laut said that the amount of pressure needed to force bitumen through the protective rock layer “is significantly higher” than that used by the company. Instead, he argued that the oil was seeping up through inadequately sealed, abandoned oil wells in the area.

“You cannot have these failures without a well bore failure,” he told the analysts.

Canadian Natural did not respond to requests for comment on Thursday. But the Alberta Energy Regulator has swiftly disputed Mr. Laut’s statement.

“We do not currently have the evidence or data to support any conclusions as to the cause of the incident and look forward to reviewing C.N.R.L.’s information supporting their conclusions on the root cause of the releases,” Jim Ellis, the chief executive of the newly formed regulatory body, said in a statement.

The regulator has ordered some of Canadian National’s operations near Cold Lake suspended and others reduced until the cleanup is complete and a cause for the spill is determined.

A study released in January by Alberta’s previous regulator about a 2009 spill at the same site also appears to undermine the company’s contention that old wells are the source of the problem.

While that study did not determine a cause for the 2009 spill, its authors said that they believed that the protective layer of rock “was likely breached by high-pressure steam injection not related to a well bore issue.”

The study added that the high pressure of the steam that Canadian Natural used probably contributed to the 2009 spill and that the steam and pressure may have created weaknesses in the protective rock layer and provided an escape route for bitumen.

“There’s a pretty strong incentive for the company to portray this as a technical issue because technical issues can be fixed, unlike fundamental issues,” said Chris Severson-Baker, the managing director of the Pembina Institute, an environmental group based in Calgary, Alberta.

But, Mr. Severson-Baker said, this leak, “calls into question how much knowledge the industry and the government have about the integrity of the cap rock before they allow these projects to proceed.”

Article source: http://www.nytimes.com/2013/08/09/business/global/leak-at-oil-sands-project-in-alberta-heightens-conservationists-concerns.html?partner=rss&emc=rss

British Village Protests Plan for Shale Gas Drilling

What brought them together on Thursday evening, though, was not a spring fair but deep worry. Cuadrilla Resources, a British energy company, is on the verge of drilling an exploratory oil well just down the road. Villagers see it as a possible precursor to the environmentally controversial drilling technique known as hydraulic fracturing, or fracking.

“Don’t frack my future,” read the children’s T-shirts as the youths munched on chocolate cupcakes.

The villagers “are going through the grief process; they have just been told they have cancer,” said Alison Stevenson, chairwoman of the Balcombe Parish Council, a local government body. A recent survey conducted by the parish council found that more than 80 percent of the 284 respondents wanted the council to oppose fracking.

The protest was in keeping with the steady resistance that oil and gas companies, and the governments that approve their exploration, are facing as they try to tap underground rock deposits in populated areas to extract fossil fuels. The Balcombe site is limestone, but Cuadrilla and energy companies elsewhere are using similar drilling techniques in efforts to produce oil and natural gas from shale rock.

Although shale gas extraction has created an energy boom in the United States, many Europeans have been reluctant to accept the technology on concerns that it could contaminate groundwater and encourage continued reliance on carbon-emitting fossil fuels.

Balcombe, with about 1,800 residents, is no hotbed of radicalism. It is in the Conservative Party’s heartland, about a half-hour’s train ride south of London. It is represented in Parliament by Francis Maude, a cabinet minister.

But residents say their opposition to fracking, the process of pumping large quantities of liquid, sand and other substances to release gas trapped inside rocks, is not being heard in official circles.

“This is naturally a very conservative, wealthy village,” said Lawrence Dunne, a physics professor who lives here. “But we feel the government is completely ignoring us.”

On this evening, Cuadrilla, the company that is spearheading shale gas development in Britain, was trying to listen. In a former church known as Bramble Hall, the company held a “drop-in session” for local residents.

Several Cuadrilla executives accompanied by an entourage of public relations aides talked to small groups of residents, who were joined by environmental activists from London and the surrounding area.

Francis Egan, Cuadrilla’s chief executive, called the gathering, which attracted more than 200 people and lasted more than four hours, “really, really valuable.” The encounter gave people “an opportunity to hear from us what we are doing” rather than what they “read on the Internet,” he said.

He and other European business leaders who advocate shale gas development are envious of the head start achieved by their American counterparts. But they know that on this side of the Atlantic, fears of pollution run so deep in the grass roots that local and national politicians are hesitant to endorse drilling.

France has a ban on fracking, and Germany is unlikely to give it a green light until after the coming elections. The British government views shale gas as a possible replacement for the declining energy reserves in the North Sea, but those intentions have been slow to translate into action. It is unlikely that there will be any shale gas fracking in Britain this year.

On Thursday, Balcombe was a microcosm of European concerns. Many minds seemed already set against the energy company — a result, some local people said, of heavy campaigning by opponents of fracking.

This article has been revised to reflect the following correction:

Correction: May 25, 2013

Because of an editing error, an earlier version of this article referred erroneously to the type of exploratory well Cuadrilla Resources, a proponent of shale gas development, intends to drill in Balcombe, England. It is an oil well, not a shale gas well — although the drilling techniques that may be employed are the same ones energy companies typically use to extract shale gas.

Article source: http://www.nytimes.com/2013/05/25/business/global/british-village-protests-plan-for-shale-gas-drilling.html?partner=rss&emc=rss

Economix Blog: Another Look at Natural Gas

After my column on Wednesday about how the nation’s natural gas boom is helping reduce emissions of heat-trapping carbon, I received a bunch of e-mail arguing that gas obtained by hydraulic fracturing could, on the contrary, worsen climate change.

The main reason is that fracking wells — where water, chemicals and sand are pumped at high pressure into horizontal shafts to fracture shale rock deep underground — leak.

Cheap natural gas is helping to cut carbon emissions because power companies are using it to replace coal, a much dirtier fuel. But the benefits would be wiped out if a lot of the gas escaped into the atmosphere, because natural gas is mostly methane, which traps much more heat in the atmosphere than carbon dioxide.

One study last year suggested that replacing coal with gas would reduce greenhouse gas emissions only as long as the leakage of methane into the air from gas production did not exceed 3.6 percent.

The question is, how much do these wells leak? “There is a lot of debate over that,” noted Susan Brantley, a geoscientist who heads the Earth and Environmental Systems Institute at Pennsylvania State University. “It is very vitriolic.”

According to a draft of the Environmental Protection Agency’s annual inventory of greenhouse gases, methane emissions from natural gas production declined by 45 percent from 2006 to 2011, to about 48 million metric tons of CO2 equivalent.

Andrew Revkin’s Dot Earth blog has covered this controversy exhaustively. And in January, the magazine Nature published a good account of the state of knowledge on the subject.

But the best answer is that we don’t have a definite answer. Different groups of researchers have come up with vastly different estimates of leakage, from around 2 percent to a whopping rate of 9 percent, found in a recent analysis of a gas field in Utah.

Ms. Brantley suggests that the National Science Foundation underwrite an exhaustive study that could bring some clarity to the issue. But will it have the money? Sequestration just cut some $350 million from its budget for 2013.

Article source: http://economix.blogs.nytimes.com/2013/03/22/another-look-at-natural-gas/?partner=rss&emc=rss

It’s the Economy: Welcome to Saudi Albany?

Fortunately, Surma went on, this misery is about to change. The American steel industry recently received the economic equivalent of a gift from the heavens: natural gas extracted by means of hydraulic fracturing, or fracking. Fracking involves a whole lot of long steel pipes being sunk into rock formations thousands of feet beneath the ground in search of hydrocarbons. U.S. Steel, which is based in Pittsburgh, also happens to be right on top of the Marcellus Shale, the oil-rich formation that stretches from New York to Ohio. No one knows exactly how much gas is down there, but modest estimates suggest it’s at least 100 trillion cubic feet. Given this bounty, U.S. Steel recently spent $100 million on a facility whose entire purpose is to make “tubular product” for gas companies.

For Surma, an even bigger gift should come over the next few decades. The switch from coal to cheaper natural gas will save U.S. Steel hundreds of millions of dollars a year. These savings will be amplified by the fact that the company’s competitors in Europe and Asia will need to pay much more. In fact, many economists say that fracking will soon fundamentally shift global economic logic to uniquely benefit the United States. Ed Morse, an influential energy analyst at Citigroup, argues that the natural-gas industry will bring around three million new jobs to the United States by the end of this decade. He also expects that fracking will add up to 3 percent to our G.D.P. and trillions in additional tax revenue. Along the way, it will turn around perennial stragglers, like steel and manufacturing. For millions of workers, there could not be any better news.

Fracking, of course, is not universally embraced. The State of Pennsylvania lists more than 80 chemicals that are injected into the earth as part of the hydraulic-fracturing process. Many are pretty nasty, including formaldehyde, naphthalene and crystalline silica, which are known to cause all sorts of illnesses, including cancer. Fracking’s early years, more than a decade ago, were similar to the old wildcatter days in California and Texas. Small companies dug quickly and with little constraint from unprepared regulators.

More recently, this has changed considerably. Earlier this year, Ohio passed new rules requiring higher standards for fracking-well construction. Pennsylvania is expected to update its regulations very soon. West Virginia, a state historically friendly to the hydrocarbon industry, passed rules allowing for more public comment before any new wells are dug. New York, the only significant Marcellus Shale state that is still deciding whether to allow fracking, commissioned a panel of independent experts to determine whether the industry, overseen by strict regulation, can operate without hurting citizens. The review is expected early next year.

Most observers would agree, though, that changes in regulation do not come from objective scientific studies. (Both sides, after all, can flood any government hearing with experts and impressive-looking scientific reports.) Regulations are determined, in large part, by politics. And the politics of fracking are changing and are very likely to change drastically in coming years. As examples from the last century suggest, the sudden discovery of oil and gas can transform an entire economy and regulatory system to serve the industry’s interests. Economists call this the resource curse — the perverse process in which a valuable discovery like oil, gas, diamonds or gold ends up enriching a few at the cost of impoverishing most of the population. At its worst, the resource curse leads to deeply corrupt regimes like those in Iraq, Iran, Myanmar and Libya. At its mildest, this can create one-industry economies in which there is little innovation and even less resistance to the whims of a handful of powerful interests. Many believe this already describes the oil economies of Louisiana, Texas and Oklahoma and, increasingly, North Dakota, where the fracking industry is entrenched. Politically and economically, it’s hard to argue with an industry that has helped keep the state’s unemployment rate at about 3 percent.

If there is an uneasy equilibrium, right now, between environmentally concerned citizens and pro-fracking industrial groups, what will the political balance be like in a decade? What pressures will be on state legislatures and regulators if the projections are true and the millions of workers in Pennsylvania, Ohio, West Virginia and maybe New York will owe their jobs to fracking. There will be trillions of dollars of new wealth. Will environmental and health concerns have any chance against that juggernaut?

It doesn’t necessarily have to end badly. In the late 1960s, Norway’s economy was immediately transformed when it discovered massive crude deposits off its North Sea shores. Back then, Farouk al-Kasim, an Iraqi-born Norwegian petroleum engineer, warned that all that sudden easy money could create “so much pressure that it will completely overwhelm environmental concerns; the force can undermine moral, ethical barriers.” The money available to the industry and government was so ample, he told me recently, that people soon began to say, “I don’t care, I’m getting rich, to hell with everybody else.”

Norway avoided the curse, and America will, too, Kasim said, because it has a huge, diverse economy. Still, as oil-rich states have shown, it’s possible for even a relatively small extractive industry to cause severe damage. In fact, the best thing that any U.S. environmentalist can do is to start thinking like an economist — particularly a Norwegian one. In 1990, Norway began channeling money from oil and gas into a pension fund designed to keep the country stable when the crude ran out. It’s now the largest sovereign wealth fund in the world, as Norway showed that the best defense against an extraction industry was diverse economic growth. For environmentalists, and even steel behemoths, it’s a point worth remembering.

Article source: http://www.nytimes.com/2012/12/16/magazine/welcome-to-saudi-albany.html?partner=rss&emc=rss

Argentina Hopes for a Big Payoff in Its Shale Oil Field Discovery

In May, the Argentine oil company YPF announced that it had found 150 million barrels of oil in the Patagonian field, and President Cristina Fernández de Kirchner rushed onto national television to praise the discovery as something that could give new impetus to the country’s long-stagnant economy.

“The importance of this discovery goes well beyond the volume,” said Sebastián Eskenazi, YPF’s chief executive, as he announced the find. “The important thing is it is something new: new energy, a new future, new expectations.”

Although there are significant hurdles, geologists say that the Vaca Muerta is a harbinger of a possible major expansion of global petroleum supplies over the next two decades as the industry uses advanced techniques to extract oil from shale and other tightly packed rocks.

Exploration of similar shale fields has already begun in Australia, Canada, Poland and France. Indian and Chinese oil companies are investing in pilot projects that, if successful, could make their countries significant oil producers, possibly reshaping energy geopolitics and stemming future price rises. Ukraine and Russia are also thought to have sizable shale fields of oil and gas, as do many North African and Middle Eastern countries.

“The potential is huge, on the order of hundreds of billions of barrels of recoverable reserves,” said Michael C. Lynch, president of Strategic Energy and Economic Research, a consulting firm, who is preparing a report on global shale oil.

Similar fields in North Dakota and Texas are already beginning to gush oil. The techniques used to extract it include hydraulic fracturing, in which high-pressure fluids are used to break up shale rock to release the oil, and horizontal drilling, which allows drillers to tap thin layers of oil-filled shale that are sandwiched between layers of other rock.

Oil experts caution that geologists have only just begun to study shale fields in much of the world, and thus can only guess at their potential. Little seismic work has been completed, and core samples need to be retrieved from thousands of feet below the surface to judge how much oil or gas can be retrieved.

Skeptics also say that even if oil is found in many of these fields, some may not be recoverable using current technology.

Hydraulic fracturing, known as fracking, has drawn significant opposition in the United States and France because of concerns that the fluids used can pollute groundwater. Also, the process requires vast amounts of water, a problem since many of the fields are in dry regions.

Another barrier to widespread exploitation of oil shale is that few companies have the expertise and experience to do the work. Chinese and Indian oil companies are investing in joint shale ventures in the United States and other countries in part so they can learn the new exploration and drilling techniques.

The search for oil in tight rocks began in the United States about three years ago, and the potential for oil has been found from Texas to Michigan, California to Ohio. Domestic oil production from shale has grown to more than half a million barrels a day since 2009 and could reach three million barrels a day by 2020.

Oil companies are speculating that the early successes in the United States can be duplicated around the world. Exploration for gas from shale began a couple of years ago in China and around Europe, particularly Poland, and experts say some of those fields have oil potential as well.

“It could potentially be a game changer,” said Fadel Gheit, a managing director and senior oil analyst at Oppenheimer Company. “We are going to see much wider distribution of oil reserves, to the benefit of the whole world. It could rerank countries, in which the very needy might become self-sufficient. Countries like Canada and Australia could potentially become the new Saudi Arabia for energy.”

Article source: http://feeds.nytimes.com/click.phdo?i=9bf038d303f1494d8295066e6e1dfd0e

U.K. Company Suspends Controversial Drilling Procedure

PARIS — A British company said Wednesday that it would temporarily halt the use of a controversial gas exploration technology after indications that it might have triggered two small earthquakes near a test well in Lancashire, England.

“We take our responsibilities very seriously,” Mark Miller, the chief executive of Cuadrilla, said in a statement, “and that is why we have stopped fracking operations, to share information and consult with the relevant authorities and other experts.”

Cuadrilla Resources, which is exploring for gas in shale formations deep underground, said it would postpone hydraulic fracturing, or “fracking,” operations at the Priest Hall site, near Weeton, Lancashire.

Fracking is a procedure in which water, chemicals and sand are injected deep underground to free oil or gas trapped in dense shale formations.

The technology is widely used in the United States, where it has contributed to a boom in natural gas production. It has been criticized because of the potential for the fracking chemicals to contaminate groundwater.

“We have discussed with Cuadrilla and agreed that a pause in operations is appropriate so that a better understanding can be gained of the cause of the seismic events,” the British Department of Energy and Climate Change said in a statement.

Experts from the British Geological Survey, the government and Keele University are examining the data, “and we will need to consider the findings into the cause of the event,” the department said.

The halt was called after the British Geological Survey recorded an earthquake in the early hours of May 27, at a depth of about 2 kilometers, or 1.25 miles, with a magnitude of 1.5.

“Any process that injects pressurized water into rocks at depth will cause the rock to fracture and possibly produce earthquakes,” the Survey said on its Web site.

Brian Baptie, the top seismology official for the organization, said in a statement that measuring instruments had been installed close to the drill site after a magnitude 2.3 earthquake occurred on April 1.

“The recorded waveforms are very similar to those from the magnitude 2.3 event,” Mr. Baptie said, “which suggests that the two events share a similar location and mechanism.”

The two quakes were barely perceptible to humans.

Industry officials say Europe is a decade or more behind the United States in its effort to recover “unconventional” hydrocarbon fuels like the oil and gas found in shale. Governments and energy companies have seen in the technology a means to reduce the European Union’s dependence on imported oil and gas, but there can be no certainty that exploitable deposits exist without further testing.

Cuadrilla’s announcement came as the French Senate on Wednesday began a debate on a proposed fracking ban. The lower house of Parliament on May 11 passed its own bill, one that would prohibit fracking in the exploration and recovery of oil and gas, and would revoke existing exploration contracts that relied on the procedure. The Senate, though, is considering a measure that would leave open the door to fracking for research purposes.

Article source: http://feeds.nytimes.com/click.phdo?i=4720c879175621c8adb88fce8dd62cc8

The Texas Tribune: Resistance to Gas Drilling Rises on Unlikely Soil

On Wednesday, several dozen protesters marched through downtown Fort Worth, waving signs and chanting anti-drilling slogans that reflected concern over air and water pollution.

The anxiety centers on a recently expanded drilling method called hydraulic fracturing, or fracking, which is now used in more than half of new gas wells drilled in Texas. This practice — which involves blasting water, sand and chemicals far underground to break up rock and extract gas — is common in the Barnett Shale, a major shale-gas field around Fort Worth.

“It’s our health that’s at stake,” said Dana Schultes, who lives in south Fort Worth and worries about the impact of the drilling on her young daughter.

The protest, organized by the group Rising Tide North Texas, is the latest sign of a backlash against drilling in Texas. Yard signs saying “Get the Frack Out of Here” and “Protect Our Kids/No Drilling” have appeared in some yards in Southlake, a Dallas suburb. A few communities have declared a temporary moratorium on drilling permits, and Dallas set up a task force last week to examine drilling regulations within its city limits.

Analysts say the discontent appears to be partly inspired by highly publicized concerns in Pennsylvania, a state unaccustomed to drilling and where fracking has recently increased. The federal government is also raising concerns: the Environmental Protection Agency is beginning a study about the method’s effect on groundwater, and a report for Congressional Democrats released last week detailed the quantity of chemicals that gas companies are putting into the ground.

Lease payments by gas companies have also dropped significantly in Texas since natural gas prices hit highs in 2008, said Mike Slattery, the director of the Institute for Environmental Studies at Texas Christian University — even as gas production rises in the state.

Gas companies say fracking is safe, but some acknowledge that changes are needed.

“For the most part, I would view these as self-inflicted wounds,” said Matt Pitzarella, a spokesman for Range Resources, a drilling company, speaking about the industry generally.

Gas companies, Mr. Pitzarella said, have existed under the radar for a long time but now need to be more responsive to public concerns.

The Fort Worth protesters ended up at Range Resources’ offices. The company was singled out, an organizer said, partly because it is one of the drillers with headquarters in the city.

Range Resources is also the subject of a battle between the E.P.A. and the Texas Railroad Commission, which regulates oil and gas operations in the state. In December the E.P.A. accused the company of contaminating two water wells in Parker County, west of Fort Worth. The driller denied the accusations, and the Railroad Commission investigated and cleared it. But the E.P.A. case is continuing.

City governments are getting more involved, too. Fort Worth, which has just under 2,000 gas wells within its city limits, expects to complete a study this summer of drilling’s impact on air quality. Dallas, on the edge of the Barnett Shale, has no wells so far, but gas companies are keen to drill — hence the establishment of the task force, which may deliver recommendations to the City Council this fall.

Gas drillers are also facing extra scrutiny in Austin, where lawmakers are considering whether to reduce a tax break for “high cost” natural gas drilling, like hydraulic fracturing. The break cuts the amount of severance tax paid by many gas companies.

kgalbraith@texastribune.org

Article source: http://feeds.nytimes.com/click.phdo?i=cc5537acfc4c0091832826539b32ef16