While Exxon CEO Rex Tillerson filed missiles yesterday at the Obama Administration for supposedly inhibiting the production of natural gas (see page 3 of today's Section C of the Wall Street Journal), the Henry Hub price closed yesterday at $2.18. Some of the smartest people in the energy business with whom I was this week at an International Energy Agency workshop in Warsaw, Poland are predicting a $1.50 price this spring.
Here are obsrvations I would make about claims that the Obama Administration is inhibiting gas production.
First, the Obama Administration is doing a lousy job of slowing down gas production if that were its goal, given 2011 was an all-time record production year.
Second, the Obama Administration is responding, as it must, to massive public concern about fracking. Yes, a lot of that concern is based on misinformation or outright propaganda but there are also real issues. And the level of public concern is real and large. Just ask Governor Christie, Mitt Romney's national co-chair, who implemented a one-year ban on fracking in New Jersey, what the public mood about "fracking" is in the Northeast.
Third, what is the biggest problem facing the gas industry today? Too little demand? Or too little production? $1.50 gas as a real possibility this spring answers those questions.
Fourth, the Obama Administration has done more to promote natural gas demand than any Administration in US history. Take a look at the EPA Air Toxic Rule as just one example. There are many more. And the Obama Administration has taken immense heat for these rules and other initiatives that promote natural gas demand.
Ironically it may help Obama to have Tillerson against him. As some may have noticed, Americans don't seem to like oil company executives very much.
ReplyDeleteI'm curious to see the results of the EPA tests in Dimock. Hopefully by the time they get around to releasing the results they will have done their homework on the natural groundwater issues in the area. I imagine they will.
And you are right, Obama has no choice but to take this issue seriously, even if he knows much if it is based on misinformation. Many people believe it might be a problem so the government has to take some steps. And if they find some ways to do it in an even cleaner way then I am all for it.
Propoganda and misinformation? I believe I sent you a video of the latest community impacted by gas drilling...I also suggest you stop in to Scott ELy's and check out his water as well as the surrounding homes...at some point you will have to accept the water issue is not propoganda or misinformation..I pray sooner than later sir.
ReplyDeleteSee below. There are real impacts as I have said repeatedly like methane migration, spills and leaks.
DeleteAnd there is also misinformation and propaganda like saying PA waters are contaminated with radionuclides or saying that Dunkard Creek fish kill was caused by gas drilling or that gas is dirtier than coal or that gas drilling does more damage to water than sewage discharges, agricultural run-off, acid mine drainage, corn ethanol, large hydro, and many other more damaging things.
you might want to read Tom Wilber's blog-he speaks to the latest methane migration issue in Franklin Township-neighbor to Dimock
ReplyDeleteMis-information???...this is from a man who works for the gas industry....who would know facts better then him....
ReplyDelete"I work on natural gas drilling rigs in the Texas panhandle and western Oklahoma. I'm a mud engineer. I manage the drilling mud used to drill the wells. Last night I watched Gasland thinking I would see a bunch of B.S. but I was sur...prised at the accuracy of the film. I have a slightly different viewpoint of the problem. Wells are designed to protect the water tables by running steel casing that seals off formations. The real issue isn't about "fracking" but rather the integrity of the well itself. When everything works right there is no gas contamination. Think about it. The Oil company wants to get as much gas as possible they don't to be losing any gas. The problem is that not every well goes as planned. Sometimes we lose our drilling mud to certain formations while drilling and only God knows where the drilling fluid goes. Sometimes we only "lose" a few hundred barrels and sometimes we lose thousands of barrels of drilling fluid. Another problem is that sometimes the casing cement job used to set the casing doesn't always go right and the real problem is that no one really knows how good it will work. Another problem is that gas is extremely corrosive and casing sometimes fails. Two years ago we were drilling a well about 100 yards from another well that had failed and had been "plugged". While drilling through the "surface zone" where the water tables are located, between 600 to 1500 feet we encountered a strong "gas kick" and natural gas was roaring out of our drill bore at 1,200'. We weren't suppose to hit gas until about 10,000'. So where did this gas come from? The gas had "migrated" through the formations from the "plugged" well. It was obvious that the casing had failed. The problem is that no one knows how much gas had reached the formations at 1,200'. The real problem I saw was that this whole entire "surface" interval had been contaminated. After spending millions of dollars they were able to get the well under control and seal off the gas and continue drilling. I have more stories I can tell you"
from the same man:
"I'm no stranger to Gasland. It is where I work. Perhaps what bothered me the most and that I did not know was that while all of the state and federal laws apply to the industry as a whole, each individual well is not subject to monitoring and testing. I have seen some pretty nasty looking (and smelling) well locations. That's like having auto emission control laws to prevent pollution and smog but then there is nobody to inspect each car. I spoke with a Texas inspector a few months ago and they only had two inspectors for our part of the state. I'm guessing it would take those two inspectors about 1,000 years for them to check out each well. The difference out where I work is that there are only a few ranchers and they don't give a damn because the Oil industry has made them stinking rich. Don't get me wrong. I'm a dyed in the wool Capitalist. But the reality is that unless Capitalists are socially and morally responsible then we need the laws, regulations, and enforcement to protect us. As I see it our whole illegal immigration problem is the same kind of a problem. There are laws but no one has been enforcing them for the past 30 years. Why? Because Capitalists want cheap labor so they can make more profits. The real criminals are the employers who hire illegal immigrants."
FACTS ARE FACTS....NOT HYSTERIA! FACTS!!!!!!!!!
There are real impacts of gas drilling, as I repeatedly state, and there is outright misinformation/propaganda as well. Both are real. A real impact would be gas migration due to poor drilling. This happened to 18 water wells in Dimock. Other real impacts would be examples of spills and leaks, road damage, methane leakage from equipment.
DeleteBut there is also major misinformation/propaganda too. Saying Pa's waters are contaminated with radionuclides; Saying the dunkard creek fish kill was caused by gas drilling; saying that coal is dirtier than gas; saying that gas drilling has more impact on waters than acid mine drainage, corn ethanol, raw sewage discharges, agricultural run-off, and so on.
DON'T WANT JOBS OR LOW GAS PRICES EITHER....RIGHT?? I AM SURE YOU, OUR GOVERNMENT VOTED IN PLACE TO PROTECT US, HAVE MEDICAL DEGREES AS WELL. WOW!!!...YOU POLITICIANS AMAZE ME WITH ALL OF YOUR MEDICAL AND SCIENTIFIC KNOWLEDGE!!!..NOT!!!!! Although, these doctors are the ones who are treating these people who have cancer due to the gas industry...YOU have muzzled them to keep them quiet....HOPEFULLY...YOU WILL NOT BE ABLE TO MUZZLE THEM FOREVER!!!! GREED OVER LIVES MUST STOP NOW!!!!
ReplyDeletehttp://preventcancernow.ca/fracking-shale-gas-and-cancer-AND I GUESS DOCTORS health-risks-at-every-step
The gas industry is seeking permits to export LNG, which is one way to deal with oversupply and low prices. This will be very good for their business, since China will pay 10X $1.50 = $15.00. But this will not be good for American consumers when natural gas is put on the global price market.
ReplyDeleteDo you think exporting LNG is a good idea?
I am opposed to building LNG plants and exporting gas. That would increase the environmental footprint and we will run out that much sooner. I say totally displace coal and if there is enough then displace oil here in the US.
DeleteWe export gas now via pipelines. In terms of the national interest, exporting has ups and downs. The ups is that it creates jobs in the USA; it helps move our balance of trade from huge deficits that are substantially caused by oil imports toward lower deficits or balance. The downs are that it could increase prices in the USA, depending on amounts exported. Right now prices are so low that current export volumes are obviously not enough to damage domestic consumers.
ReplyDeleteI must disagree...It is NOT mis-information...nor is it propaganda that the drilling contaminated the water in Dimock!!! As well as Bradford County!!! How come, JOHN, when the water was offered to you to drink it...YOU REFUSED!!@!! Do you know something that you would like to share!!!!!!!!!!!!!??????????? Why won't you drink the water form Dimock JOhn???? How come????
ReplyDeletePlease read what I said once again. I said explicitly that gas drilling polluted 18 wells with methane in Dimock. I just said it again. I also won an agreement paying those 18 families an average of $201,000 plus a million plus fine plus many other sanctions costing the company many millions more.
ReplyDeletehow does that agreement really solve the issue of faulty drilling? First and you know this Cabot bragged your actions would not have ANY impact on their profit projections-THEY WERE UNPHASED-they also continue to state they DID NOT DO ANYTHING WRONG! It was a lost opportunity to help this gas extraction frenzy move forward slower and more carefully..LOST OPPORTUNITY to maybe help keep the citizens and the environment of Penn's Woods a bit safer...the deal was a cop out..it was a dirty deal struck behind closed doors and that is my fact of the day..
ReplyDeleteYoko:
ReplyDelete7 families who received on average $201,000 as partial compensation for methane polluting their water well don't agree with you. Cabot was also fined cumulatively $1.5 million; permits were withheld; gas wells plugged; other gas wells repaired.
3 questions How many of the 7 families are currently drinking the water from their well? Has Cabot(or other companies) refined and improved their drilling techniques to eliminate gas migration and impact to local water wells? You once said that one was too many- in reference to drinking water impacts- Last question- How many now John?.. I look forward to more discussion concerning the FINAL CONSENT ORDER...but not on this blog.
ReplyDelete