EPA Seeks Comments on Drilling Air Quality

- EPA Seeks Comments on Drilling Air Quality

Tuesday, August 30, 2011
The News Herald, Panama City, Fla.
by Ali Helgoth

The Environmental Protection Agency (EPA) is accepting public comment on an air quality permit sought by a company that plans to conduct exploratory oil drilling 200 miles off the coast of Panama Cit Beach.

http://www.epa.gov/region4/air/permits/OCSPermits/ShellOCS.html

Shell Offshore applied for an Outer Continental Shelf air permit for mobilization and operation of deepwater drilling vessels and support vessels in two area lease blocks in the Gulf of Mexico, DeSoto Canyon and Lloyd Ridge.

Drilling would last about 150 days per year for five to 10 years, according to a preliminary determination issued by the EPA, which has proposed approval of the permit. Shell does not have plans to establish permanent production platforms, and if the exploration project leads to resource discoveries, additional permits would be required, according to information from the EPA.

The project is southwest of Bay County, about 160 miles southeast of the mouth of the Mississippi River.

A representative from Shell, which initially filed the permit in April 2010, could not be reached Monday for comment.

Public comment is being accepted through Sept. 19 and is limited to air quality issues. Other concerns, like those with drilling safety, the leasing process or discharge, should be directed to the Bureau of Ocean Energy Management, Regulation and Enforcement, which is the lead permitting agency for the project.

Air pollution emissions generated from the project "are primarily released from the combustion of diesel fuel in the drillships' main engines, as well as in engines that supply power for operating drilling equipment and support vessels," according to the EPA's preliminary determination.

The document states "since the project is located well away from land, the project's emissions impacts will be dispersed over a wide area with no elevated concentration levels affecting any onshore populated area."

The project isn't expected to result in job growth. According to the EPA, "the potential growth of industrial, commercial and residential sources as a result of the proposed DeSoto Canyon and Lloyd Ridge drilling exploration activities in the area just west of the proposed drilling activities is well developed. It is expected that the current infrastructure is more than adequate to support the proposed drilling activities, and no additional growth is expected."

(c)2011 The News Herald (Panama City, Fla.). Distributed by MCT Information Services.

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EPA Proposes First Federal Air Standards for 'Fracked' Wells

- EPA Proposes First Federal Air Standards for 'Fracked' Wells

Thursday, July 28, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

The Obama administration has proposed the first national air standards for wells that are drilled using a controversial practice known as hydraulic fracturing.

The Environmental Protection Agency announced Thursday it was proposing new rules to reduce the amount of air toxins and smog-forming gases that are released into the air when oil and natural gas is produced.

The rules are expected to reduce cancer risks and help reduce ozone levels in areas where oil and natural-gas production occurs, the EPA said. The standards should also lead to lower emissions of methane, a greenhouse gas that is more than 20 times as potent as carbon dioxide.

A lot of the emissions the EPA has targeted escape into the air when natural-gas wells, drilled using hydraulic fracturing, or fracking, are being prepared for production.

The EPA is proposing to reduce the emissions by requiring the use of special equipment to separate oil and gas from a mix of fracking fluids and water that flows to the surface during one stage of well completion.

Certain states, such as Wyoming and Colorado, already require the use of this equipment.

The EPA says these proposed standards will eventually save the oil and gas industry about $30 million a year. That's because the standards will force companies to collect the hydrocarbons, which they can then sell.

Hydraulic fracturing already receives a lot of scrutiny from lawmakers, regulators and environmental groups because of its possible impacts on drinking water.

The proposed rules announced Thursday would apply to more than 25,000 wells a year, as well as to storage tanks and other pieces of equipment used by the oil and gas industry.

The EPA estimates the proposed rules will reduce smog-forming volatile organic compounds emitted by the oil and gas industry by 25%. They should also reduce methane emissions by 26% and air toxins by nearly 30%.

The EPA undertook this new rule-making after a pair of environmental groups successfully sued the agency to update clean-air standards for the oil and natural-gas industry. The agency is under a court-ordered deadline to finalize the rule by February.

"We are seeing oil and gas development take a tremendous toll on clean air," said Jeremy Nichols, director of the climate and energy program for Wild Earth Guardians. "Our health and environmental safeguards are woefully outdated."

The American Petroleum Institute, a group representing the oil and gas industry, asked the EPA to postpone the finalization of the rules by six months.

"API will review these proposed rules to ensure that they don't inadvertently create unsafe operating conditions, are cost effective and truly provide additional public health benefits," said Howard Feldman, API's director of scientific and regulatory policy.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Delta Air Lines Reports Generally Higher May Traffic, Surpassing American Airlines

- Delta Air Lines Reports Generally Higher May Traffic, Surpassing American Airlines



Jun 7, 2011

Delta Air Lines (DAL) today posted its May traffic results, with system traffic up 2.2% from the year-ago month on a 2.2% increase in capacity making it the world's largest carrier by traffic, surpassing American Airlines. Load factor is still at 83.9%, which is flat with last year.

Domestic traffic also increased by 1.9% versus last year on a 0.4% increase in capacity. Load factor for domestic increased to 85.1%. International traffic is up 2.6% versus last year on a 5% capacity increase, with load factor down 2 points to 82.2%.

The higher traffic is due to the consolidation of Delta's subsidiary Northwest Airlines, which was completely integrated into Delta network in January of 2010.

DAL shares are down slightly 0.21% to $9.60.

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House Panel Passes Bill to Streamline Issuance of Air Permits for Oil Drill

- House Panel Passes Bill to Streamline Issuance of Air Permits for Oil Drill

Thursday, June 02, 2011
Dow Jones Newswires
by Tennille Tracy

A bill to streamline the issuance of clean-air permits for offshore oil drilling cleared an important hurdle Thursday, with the Republican-controlled U.S. House energy committee voting to approve the measure.

The legislation aims to address challenges that Shell faced in securing air permits for exploratory drilling projects off the coast of Alaska. It also marks the latest effort by Republicans to expand or expedite offshore oil production.

The bill was approved by the House Energy and Commerce Committee by a vote of 34 to 14, with the majority of Democrats voting against the measure. Democrats said the bill would strip the Environmental Protection Agency of the ability to ensure clean-air standards would be met.

Thursday's committee vote clears the way for a vote on the floor of the House. While the bill would have a decent chance of passing the House, its fate in the Democrat-controlled Senate would be much more uncertain.

The legislation, introduced by Rep. Cory Gardner (R., Colo.), imposes a six-month deadline on the EPA to either approve or deny clean-air permits being sought. It also forces opponents to object to proposed drilling projects in federal court.

Unlike drilling projects in parts of the Gulf of Mexico, where the Interior Department is responsible for granting air permits, Arctic projects require approval from the EPA.

The EPA's process for approving Clean Air Act permits for offshore drilling came into focus after Shell struggled to secure clean-air permits for drilling projects in the Beaufort and Chukchi seas off Alaska. Shell has spent about $3.5 billion to explore and prepare for those projects, but legal challenges and regulatory hurdles have prevented the company from obtaining necessary approvals.

"It's time to either give the permits now or stop altogether," said Rep. Fred Upton (R., Mich.), chairman of the energy committee.

In May, the EPA's assistant administrator for air and radiation, Gina McCarthy, said the agency was "very close" to issuing three permits to Shell.

No exploratory drilling is currently being done off the coast of Alaska, although there are existing wells producing oil.

Copyright (c) 2011 Dow Jones & Company, Inc.

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European Shale Gas Is Still Hot Air

- European Shale Gas Is Still Hot Air

Tuesday, May 31, 2011
Dow Jones Newswires
by Andrew Peaple

Shale gas has been a game-changer for U.S. energy markets. Following an estimated $250 billion of investment, 23% of US gas production now comes from rocks several thousand meters underground, up from 1% 10 years ago. Could Europe see a similar shale gas revolution?

That seems unlikely for the moment. True, Europe could have 639 trillion cubic feet of shale gas, only 25% less than the U.S., according to the U.S. Energy Information Administration. That could reduce its reliance on gas imports and more polluting alternative fuels. Around 50 companies are exploring for gas now, from majors like ExxonMobil to small independents.

But European shale gas is likely to be much more costly to develop. European shale depths are on average 1.5 times lower than in the U.S., according to the Oxford Institute for Energy Studies. Europe's dense population doesn't help, as the number of wells needed for commercial shale gas production requires lots of space. Drilling costs are also likely to be higher in Europe, given the lack of a high-tech services sector to support the industry.

Meanwhile shale gas faces opposition from environmentalists who fear the extraction process could damage water supply. France is close to banning activity, despite having substantial potential reserves. Production costs could be as high as $16.2 per thousand cubic feet (mcf), according to OIES. That compares with the $8.7 per mcf Gazprom, Europe's main gas supplier, charged for contracted gas in 2010. Existing gas imports from Russia and Africa cost between $3 and $6 per mcf, while US shale gas production costs are around $3 per mcf.

Clearly, the outlook for shale gas would improve if gas prices rise. But few expect them to rise high enough to make European shale gas profitable; Bernstein Research expects prices to reach $13.8 mcf by 2015 while Wood Mackenzie expects oil-linked gas prices to rise to only around $11 per mcf by 2025. And in the U.S., the shale gas supply shock has seen prices fall rapidly, meaning producers' returns on investment are in single-digits now, according to TPH.

Europe's shale gas revolution may be a long time coming.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Delta Reports Better Than Expected Q1, Loses $0.38 Per Share

Delta Reports Better Than Expected Q1, Loses $0.38 Per Share



Apr 26, 2011

Delta Air Lines (NYSE:DAL) reported a Q1 loss of $0.38, a narrower loss than the $0.50 per share consensus estimate. Revenue was up 13% year-over-year to $7.7 billion, beating the consensus estimate for $7.6 billion.

Richard Anderson, Delta's chief executive officer said, "Fuel is the biggest challenge facing this industry and Delta is actively reducing capacity, implementing fare actions, hedging our fuel needs and attacking our cost structure in order to offset fuel's impact on our earnings. These actions would not be possible without the dedication and determination of Delta people worldwide, who are working every day to build the best airline in the world for our shareholders, our employees and our customers."