Oil Spill Safety Bill Fails, Supporters Vow to Bring It Up Again

- Oil Spill Safety Bill Fails, Supporters Vow to Bring It Up Again

Wednesday, August 31, 2011
San Jose Mercury News, Calif.
by Paul Rogers

With the state agency that regulates oil tanker safety facing potential layoffs, a bill to raise the fee that oil companies pay to fund California's oil spill safety programs failed Tuesday in the state Senate.

The bill, a priority for environmental groups, has been staunchly opposed by BP PLC and the Western States Petroleum Association.

"We're not done," said Assemblyman Jared Huffman, D-San Rafael, the measure's author. "The fat lady hasn't sung. We still have a week and a half to bring it back."

The bill, AB 1112, already has passed the Assembly and needed 21 votes Tuesday to move to the governor's desk. But it failed, achieving 17 votes, with 14 senators voting no and nine not voting.

The bill would increase the fee that oil companies pay from 5 cents per barrel to 6.75 cents per barrel over the next three years. The money raises $25 million a year and provides the bulk of the budget for the state Office of Spill Prevention and Response, an arm of the state Department of Fish and Game.

State lawmakers passed the fee in 1990 after the Exxon Valdez spill to increase California's oil safety efforts. Since then, the amount of oil spilled into state waters has fallen by 95 percent. The money has funded emergency drills, tougher oversight of tankers and terminals, and scientific studies of oiled wildlife. Since the original fee passed, at 4 cents a barrel, it has been raised once, in 2002.

Capt. Scott Schaefer, administrator of the state oil spill agency, said that because of costs associated with new laws passed after the 2007 Cosco Busan oil spill in San Francisco Bay, the fund will be $5 million in deficit by 2013 without an increase.

Huffman said he will bring the bill up again before the end of the legislative session, Sept. 9. All 17 who voted for the bill were Democrats. Twelve of the 14 no votes were from Republicans, many of whom oppose increasing state fees and taxes. Environmental groups were surprised that several senators from coastal areas did not vote, including Sen. Leland Yee, of San Francisco; Juan Vargas, of San Diego; Curren Price and Alex Padilla, of Los Angeles; and Sam Blakeslee, whose district extends from San Luis Obispo along Monterey Bay to south San Jose.

"Sen. Yee supports the bill," said his spokesman Adam Keglin afterward. "He was off the floor at the time. It will come back up, and he'll vote for it as is."

Copyright (c) 2011 the San Jose Mercury News (San Jose, Calif.)

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Bill Barrett Board Member Resigns

- Bill Barrett Board Member Resigns

Monday, August 29, 2011
Bill Barrett Corp.

Bill Barrett announced that Randy A. Foutch resigned from the Company's Board of Directors in order to focus his time on his duties as Chief Executive Officer and a director of Laredo Petroleum, Inc., an exploration and production company founded by Mr. Foutch in 2006.

Chairman, CEO and President Fred Barrett commented, "Randy has a long and successful history in the oil and natural gas industry and has provided our Company with valuable leadership and insight through his position on our Board of Directors. We are grateful for his contributions to our success over the years and wish him continued success at Laredo Petroleum."

Mr. Foutch joined the Bill Barrett Corporation Board of Directors in July 2006. His resignation from the Company was effective August 25, 2011.

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Bill Barret Finalizes DJ Basin Acquisition

- Bill Barret Finalizes DJ Basin Acquisition

Wednesday, August 17, 2011
Bill Barrett Corp.

Bill Barrett has closed its previously announced acquisition of properties in the Denver-Julesburg (DJ) Basin from an affiliate of Texas American Resources Company.

The DJ Basin acquisition includes a preliminary estimate of 7 million barrels of oil equivalent (MMBoe) net proved reserves, approximately 650 Boe per day net production and approximately 28,000 net acres of mineral leasehold, primarily on fee lands. The acquired properties currently have producing wells in the Wattenberg Field with production from the Codell, Niobrara and J Sands formations. Acquired exploration acreage is located predominantly in the Chalk Bluffs area just north of the Wyoming-Colorado border, neighboring the Hereford area just south of the border, where the Company intends to target oil in the Niobrara formation.

The DJ Basin acquisition was completed for approximately $150 million, subject to post-closing adjustments. The Company plans to initiate exploration and development of the Chalk Bluffs and Wattenberg areas, respectively, with a one-rig program beginning in October 2011.

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Oil-Drilling Safety Bill Stalls Amid Fight over Oil Royalties

- Oil-Drilling Safety Bill Stalls Amid Fight over Oil Royalties

Friday, July 22, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

A group of mostly Republican lawmakers blocked a key vote on legislation to strengthen oil-drilling safety Thursday after efforts to use the bill to steer billions of dollars of oil royalties to coastal states like Alaska and Louisiana appeared likely to fail.

The move postpones an important committee-level vote on offshore safety legislation that has been in the works for more than a year, following the Deepwater Horizon oil spill in 2010.

The delay gives more time to behind-the-scenes deal makers to work out a compromise on so-called revenue-sharing proposals, which would direct nearly 40% of royalty revenue away from the federal government and to the coastal states.

But the delay also raises questions about the fate of the offshore drilling safety legislation and the ability of lawmakers to move that bill to the floor of the Senate.

Events unfolded Thursday at the Senate Energy and Natural Resources Committee, which was scheduled to hold a much-anticipated vote on legislation that steps up enforcement of drilling safety standards and strengthens drilling safety provisions.

Heading into the vote, two coastal senators--Sens. Mary Landrieu (D., La.) and Lisa Murkowski (R., Alaska)--were actively recruiting support for an amendment that would steer 37.5% of oil royalties, which are currently collected by the federal government, to coastal states.

With the federal government reporting more than $5 billion in offshore royalty revenue in 2010, such a move would be a big win for coastal state governments. Landrieu has supported such a proposal for years, arguing that coastal states are entitled to some of the royalty revenue that comes from all production off their shores.

An existing law allows Gulf Coast states to collect 37.5% of royalty revenue on some leases, starting in 2017.

Because Landrieu and Murkowski need the support of at least some Democrats to attach the revenue-sharing amendment to the drilling safety bill, they decided in 11th-hour deal-making to create a fund to promote clean energy. In doing so, they hoped to attract the support of some Democrats, a Republican aide said.

But when a measure to create such a fund failed in the committee Thursday, the chance of success for the revenue-sharing plan decreased substantially. Several Republicans then walked out of the committee room, leaving the committee without enough members to hold a vote and effectively blocking any further action.

The fate of the offshore-drilling safety legislation is now uncertain, said Sen. Jeff Bingaman, a Democrat from New Mexico who chairs the energy committee. When asked by a reporter whether the bill could be revived, Bingaman shook his head and said, "I don't know."

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

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Bill Would Clear Path for Oil Project Approvals

- Bill Would Clear Path for Oil Project Approvals

Monday, July 11, 2011
The Bakersfield Californian
by John Cox

A bill advancing through the state Legislature could help Kern County's oil industry by providing a clearer path of approval for certain drilling-related activities.

Senate Bill 682, sponsored by Sen. Michael Rubio, D-Bakersfield, proposes to assign the state Division of Oil, Gas and Geothermal Resources direct responsibility for overseeing underground injection of produced gases, a common if controversial method of disposing of oil field byproducts such as hydrogen sulfide, or sour gas.

DOGGR, as the division is known, has regulated such projects for more than a decade. But since new leadership was installed at the division two years ago, a backlog of underground injection applications has grown to about 200, frustrating oil companies and local politicians who say the delays are stalling investment and potential job growth.

"We want someone to process those applications -- either deny or approve them so we can put people to work across the San Joaquin Valley and, particularly, Kern County," Rubio said in a phone interview.

DOGGR has taken no official position on the bill and therefore declined to comment. But earlier this year the division acknowledged a slowdown in project approvals, a situation it blamed on inadequate staffing and the complexity of engineering and geological issues involved. It has also pointed to a lack of clear legal authority to regulate what it considers an environmentally risky practice that has the potential to contaminate sources of drinking water.

On Thursday, despite opposition by the Sierra Club, the bill cleared the Assembly Environmental Safety & Toxic Materials Committee by a vote of 8-0. It is scheduled for consideration soon by the Assembly Natural Resources Committee.

Representatives of the Sierra Club's California lobbying arm could not be reached for comment Friday.

The head of the California Independent Petroleum Association expressed hope that the bill, if signed into law, would help expedite oil companies' injection applications, some of them as much as two years old.

"This allows (DOGGR) to consider those old permits," CIPA CEO Rock Zierman said.

"We really appreciate Sen. Rubio's leadership on this," he added.

Rubio said the bill represents the "first step" in a longer process of addressing DOGGR's concerns about underground injection projects. Related issues still to be worked out, he said, regard how California oil producers handle toxic waste, water and other environmental issues.

Copyright (c) 2011, The Bakersfield Californian

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N.C. Gov. Vetoes Offshore Drilling Bill

- N.C. Gov. Vetoes Offshore Drilling Bill

Friday, July 01, 2011
The Charlotte Observer, N.C.
by Bruce Henderson

Gov. Bev Perdue vetoed legislation on offshore drilling and environmental rule-making, delighting advocacy groups that had fought both.

Sen. Bob Rucho, R-Mecklenburg, was a primary sponsor of the Energy Jobs Act. It directed the governor to form an offshore-energy compact with South Carolina and Virginia and prescribed how to use oil and gas revenues the state might get.

The Obama administration has banned offshore drilling on the Eastern seaboard until at least 2018, although the president has hinted he might soften that position.

Perdue, in vetoing the energy bill, called it an unconstitutional infringement on the governor's powers.

"We applaud the governor's decision to keep North Carolina's coast open to beach balls but not tar balls," said Derb Carter of the Southern Environmental Law Center. The bill, he added, tied state energy policy to fossil fuels and away from renewable fuels.

Along with her veto, Perdue issued two executive orders on energy.

One creates a task force on offshore wind, which Rucho's bill had largely ignored. The shallow waters of the mid-Atlantic coast, including North Carolina, hold some of the nation's highest wind-energy potential, federal agencies have reported.

The task force is charged with assessing the costs and risks of growing a wind industry and is to report by next March.

A second executive order reauthorizes a science panel to examine land-based energy sources, including natural gas locked in underground shale formations. That panel is to report at the end of 2012. Rucho's bill had also called for study of the gas issue.

Drilling techniques called hydraulic fracturing, which breaks open shale to release gas, and horizontal drilling have boosted estimates of U.S. gas reserves by 40 percent. Those techniques are now illegal in North Carolina, but exploration companies have bought up leases in Lee and Chatham counties.

Perdue also vetoed a regulatory-reform measure that prohibits, in most cases, new state environmental rules that are stronger than federal standards. The bill gives administrative law judges, not state agencies, the final say when violators appeal state fines.

The governor cited the state attorney general saying such a change would violate the state constitution.

Copyright (c) 2011, The Charlotte Observer, N.C.

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N.C. Govt Vetoes Offshore Drilling Bill

- N.C. Govt Vetoes Offshore Drilling Bill

Friday, July 01, 2011
The Charlotte Observer, N.C.
by Bruce Henderson

Gov. Bev Perdue vetoed legislation on offshore drilling and environmental rule-making, delighting advocacy groups that had fought both.

Sen. Bob Rucho, R-Mecklenburg, was a primary sponsor of the Energy Jobs Act. It directed the governor to form an offshore-energy compact with South Carolina and Virginia and prescribed how to use oil and gas revenues the state might get.

The Obama administration has banned offshore drilling on the Eastern seaboard until at least 2018, although the president has hinted he might soften that position.

Perdue, in vetoing the energy bill, called it an unconstitutional infringement on the governor's powers.

"We applaud the governor's decision to keep North Carolina's coast open to beach balls but not tar balls," said Derb Carter of the Southern Environmental Law Center. The bill, he added, tied state energy policy to fossil fuels and away from renewable fuels.

Along with her veto, Perdue issued two executive orders on energy.

One creates a task force on offshore wind, which Rucho's bill had largely ignored. The shallow waters of the mid-Atlantic coast, including North Carolina, hold some of the nation's highest wind-energy potential, federal agencies have reported.

The task force is charged with assessing the costs and risks of growing a wind industry and is to report by next March.

A second executive order reauthorizes a science panel to examine land-based energy sources, including natural gas locked in underground shale formations. That panel is to report at the end of 2012. Rucho's bill had also called for study of the gas issue.

Drilling techniques called hydraulic fracturing, which breaks open shale to release gas, and horizontal drilling have boosted estimates of U.S. gas reserves by 40 percent. Those techniques are now illegal in North Carolina, but exploration companies have bought up leases in Lee and Chatham counties.

Perdue also vetoed a regulatory-reform measure that prohibits, in most cases, new state environmental rules that are stronger than federal standards. The bill gives administrative law judges, not state agencies, the final say when violators appeal state fines.

The governor cited the state attorney general saying such a change would violate the state constitution.

Copyright (c) 2011, The Charlotte Observer, N.C.

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Rep. Gardner Bill to Help Oil Cos Drill Off The Coast of Alaska Slate

- Rep. Gardner Bill to Help Oil Cos Drill Off The Coast of Alaska Slate

Monday, June 20, 2011
Greely Tribune, Colorado
by Nate A. Miller, Greeley Tribune, Colo.

U.S. Rep. Cory Gardner is the driving force behind legislation slated for a vote in the House this week that would make it easier for oil companies to drill off the coast of Alaska.

"Energy security and job creation is very important to me," the Republican said. "This bill accomplishes both goals."

The bill, H.R. 2021, would streamline the process for air permits on deep-water drilling operations off the coast of the U.S., with the exception of the Gulf of Mexico, which is controlled by the Department of the Interior. It also would require the Environmental Protection Agency to make a ruling on permit requests within six months.

Fort Collins resident Gary Wockner, who is the Colorado program director of Clean Water Action, said the bill is misguided.

"This bill will increase polluters' profits at the expense of public health and the environment," he said.

While it may seem strange for a Colorado congressman to take up the cause of offshore oil drilling in Alaska, Gardner, who serves on the House Energy and Commerce Committee, said it's a good fit.

"We need an all-of-the-above energy policy in this country that lessens our dependence on Middle Eastern oil," he said. "Whether it's natural gas produced in Weld County or oil produced in our deep-water reserves. We need to be doing everything we can to help reduce the price of gasoline and to help ween ourselves off of Middle East oil."

Gardner said permits to drill off the coast of Alaska have become stuck between the EPA and the Environmental Appeals Board, which the EPA created to address administrative appeals involving the major environmental statutes the EPA administers.

"Congress said these permits had to be approved or denied within a limited time frame. The EPA created a bureaucracy without Congress that has delayed some of these permits by as much as six years," he said. "It's the EPA end-run around Congress that's hurting our energy independence."

Gardner's legislation would remove the duplication created by the EPA and appeals board permitting process.

In testimony last month before the subcommittee on Energy and Power of the House Committee on Energy and Commerce, EPA assistant administrator for air and radiation Regina McCarthy said the appeals board ensures all parties are heard and often actually makes the process more efficient.

"Rather than adding a step, the board usually serves as a cheaper, faster, more expert substitute for judicial review," she said. She used the example of a group of subsistence fisherman concerned that an EPA permit didn't address their concerns about air pollution. "They would not be required to hire a lawyer; they could attend oral arguments via video conference; and they would know that their concerns were being heard by experts."

She also said offshore drilling operations can have very real impact on air quality, and it's important to ensure effective, efficient oversight of the operations.

Gardner said the permitting process gives ample time for public comment without the added bureaucracy of the appeals board. He said the permits can be held up even when there aren't health concerns. He gave the example of a Royal Dutch Shell permit for Alaska drilling which he said the EPA held up for six years, even though EPA head Lisa P. Jackson said health concerns weren't an issue.

Gardner estimates the measure, if it becomes law, would create 50,000 jobs across the country -- including some in Colorado -- and help ease the pressure at the pump for drivers by allowing more than 1 million barrels of oil a day to be pumped from Alaska.

Wockner said Gardner should focus on energy solutions Colorado has to offer.

"Rep. Gardner should be worrying about clean energy jobs in northern Colorado, not polluters' profits in Alaska," he said.

Copyright (c) 2011, Greeley Tribune, Colo.

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Ohio Senate Passes Bill Allowing O&G Drilling in State-Owned Lands

- Ohio Senate Passes Bill Allowing O&G Drilling in State-Owned Lands

Thursday, June 16, 2011
The Blade, Toledo, Ohio
by Jim Provance

A bill allowing drilling for oil and natural gas in parks, forests, and other state-owned lands passed the Ohio Senate Wednesday after the chamber again rejected an attempt to place Lake Erie off limits.

In separate action, the Senate voted 25-7 to forward to Gov. John Kasich a bill that would allow the carrying of concealed handguns into bars, night clubs, and alcohol-serving restaurants.

The drilling bill, however, must return to the House for approval of changes made in the upper chamber.

"There's close to half a billion dollars -- half a billion dollars -- in unmet capital needs in our state parks...,'' said Sen. Keith Faber (R., Celina). "The reality is that around almost all of the state parks where oil and gas drilling is contemplated, there is already drilling, and some of that drilling is taking the gas that is under our state parks.

"Frankly, I'm not opposed to the profit motive, but I would rather have those revenues used to help pay for the unmet capital needs for state parks,'' he said.

The chamber voted 22-10 in favor of House Bill 133 with one Democrat joining Republicans in support. One Republican joined the remaining Democrats in opposition.

Three Republicans, however, joined all 10 Democrats in support of an amendment that would have exempted Lake Erie from the bill. That amendment failed 19-13. The majority argued that the amendment was unnecessary because Lake Erie is already protected by a federal ban.

"However, those federal regulations can be removed at any time.'' said Rep. Mike Skindell (D., Lakewood). "... It would be an incredible ecological disaster should there be a leakage similar to what we saw in the Gulf of Mexico in Lake Erie.''

Among northwest Ohio lawmakers, Sen. Mark Wagoner (R., Ottawa Hills) was among the three Republicans to support exempting Lake Erie. But he joined his fellow Republicans, including Sens. Cliff Hite (R., Findlay) and Karen Gillmor (R., Tiffin), in support of the drilling bill once the Lake Erie amendment failed.

Sen. Edna Brown (D., Toledo) opposed the bill.

Later, the Senate rubber-stamped Senate Bill 17, the bill easing some restrictions on the carrying of concealed firearms and storing of guns in cars, and sent it to the governor. A short time earlier, the House had voted 56-39 in favor of the bill. In both cases, support crossed party lines.

"We do indeed have the right to defend ourselves and our families anywhere we go. Anywhere we go,'' said Rep. Terry Johnson (R., McDermott), one of the sponsors of a House variation of the same bill.

"If that happens to be a restaurant, so be it,'' he said. "Going to guns in bars, well guess what? There's already guns in bars, and the criminals have them.''

The bill retains current law allowing restaurant, bar, and other private property owners to post signs declaring themselves to be off-limits to guns.

The chamber rejected a proposed amendment from Rep. Ted Celeste (D., Columbus), that would have imposed a mandatory one-year prison sentence on any concealed-carry permit-holder caught violating the bill's prohibition on carrying while drinking or under the influence of alcohol.

"You say you're not going to drink, but what do you go to a bar for?'' he asked. "It's OK now, but when something happens in your community, it's going to be something different.''

Voting for the bill from northwest Ohio were Reps. Randy Gardner (R., Bowling Green), Barbara Sears (R., Monclova Township), Robert Sprague (R., Findlay), Rex Damschroder (R., Fremont), Lynn Wachtmann (R., Napoleon), and Bruce Goodwin (R., Defiance).

Voting "no'' were Reps. Matt Szollosi (D., Oregon), Teresa Fedor (D., Toledo), and Dennis Murray (D., Sandusky). Rep. Michael Ashford (D., Toledo) was absent.

Copyright (c) 2011, The Blade, Toledo, Ohio

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Proposed Drilling Fee May Piggyback on Budget Bill

- Proposed Drilling Fee May Piggyback on Budget Bill

Thursday, June 16, 2011
Knight Ridder/Tribune Business News
by Brad Bumsted, The Pittsburgh Tribune-Review

A Bucks County legislator said she will try to attach her proposed impact fee on deep natural gas wells to a budget companion bill that allows the state to raise revenue.

Her bill normally would have difficulty maneuvering through legislative committees in the two weeks remaining before summer recess. By offering it as an amendment to the budget companion bill, state Rep. Marguerite Quinn, a Republican, hopes the governor could sign it into law with the budget.

Quinn said she initially planned to hold back her bill out of respect for Republican Gov. Tom Corbett, who wants to consider an impact fee after his Marcellus Shale Advisory Commission issues a report in late July.

But because the GOP-controlled Senate appears ready to move impact fee legislation before the June 30 budget deadline, Quinn said she wants to try to enact H.B. 1700.

She has bipartisan support for her plan to assess $50,000 per well in the first and second years, declining in subsequent years; 35 co-sponsors signed onto her bill, including House Appropriations Committee Chairman Bill Adolph, R-Delaware County.

The companion budget bill is the state fiscal code that sets tax rates, and without it, the state could not raise revenue or, ultimately, spend money.

Kevin Harley, Corbett's spokesman, said Tuesday that Corbett intends to wait for the advisory panel's report so that he knows the potential impact on communities. Corbett has said he wants any money from a fee to pay for community needs that arise from drilling.

Quinn's bill would allocate 50 percent for local governments, 5 percent to county conservation districts, 20 percent for the state Motor License Fund and 25 percent for state environmental spending.

She said her plan abides by Corbett's desire not to put impact fee money into the General Fund.

A recent statewide poll found that Pennsylvania voters said by a margin of 69-24 percent that gas extraction from deep wells should be taxed.

"I believe this is a common-sense, balanced approach to address the variety of issues our local governments and communities are experiencing," Quinn said. "It will address the infrastructure and the environment (and) yet not prevent the growth of this industry."

If lawmakers attach a shale tax amendment to the fiscal code, and Corbett holds to his timetable and criteria, it could set up a gubernatorial veto and jeopardize timely passage of the budget.

Copyright (c) 2011, The Pittsburgh Tribune-Review

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House OKs Bill to Boost Drilling for Natural Gas

- House OKs Bill to Boost Drilling for Natural Gas

Wednesday, June 15, 2011
The News & Observer, Raleigh, N.C.
by Michael Biesecker

In a largely party-line vote, the state House approved a Republican-backed bill that rewrites state energy policy to promote and approve of drilling for natural gas on land and off the coast.

Supporters of Senate Bill 709 said drilling would create revenue for the cash-strapped state government and jobs for North Carolinians by creating a regulatory atmosphere that is more "pro business."

Republican lawmakers brushed aside concerns raised by Democrats about the potential for an offshore spill to negatively affect coastal tourism and the possible contamination of drinking wells through the use of a controversial gas drilling technique that relies on the hydraulic fracturing underground rock, known as fracking.

"It's time to get crackin' on frackin'," said an enthusiastic Rep. John Blust, a Greens boro Republican. "If we're worrying about tourism, do you think $4 a gallon gas is going to affect tourism? We need more fossil fuels in this country."

Democrats objected to the often-repeated GOP talking point that drilling for natural gas will reduce gasoline prices and reduce the nation's dependence on foreign oil. There are not believed to be sizable deposits of oil off the North Carolina coast.

After a study was quoted as saying that increased domestic oil production would have a negligible effect on gasoline prices, Blust countered that such economic analyses were produced by "wackos in an ivory tower."

An attempt by Rep. Pricey Harrison, a Greensboro Democrat, to amend the bill to add renewable energy sources such as wind power and wave power to the list of options for creating new energy was defeated.

Harrison pointed out that tourism generates many more jobs and revenue in the state than even the rosiest forecast for drilling.

"We have a tourism economy that depends on a clean coast," Harrison said.

Republican supporters countered that the bill designates the first $500 million the state earns through offshore drilling royalties to a special fund to clean up the environmental damage from any accident or spill.

The bill, a version of which has already passed the Senate, was approved 67-44.

Copyright (c) 2011, The News & Observer, Raleigh, N.C.

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Oil Industry, Environmentalists Pleased With New Bill

- Oil Industry, Environmentalists Pleased With New Bill

Monday, June 06, 2011
Odessa American, Texas
by Gabriella Lopez

Drilling is a way of life in West Texas, but not everyone knows exactly what chemicals go into the ground during the process.

Frac fluid, a combination of sand, water and various chemicals, opens up the oil and natural gas molecules locked in the micro pores of rocks, Ben Shepperd, president of the Permian Basin Petroleum Association said.

The Texas Legislature passed the country's first hydraulic fracking fluid disclosure bill last week, requiring oil and gas companies to publicly list the specific chemicals used in drilling.

"We're in favor of it, actually," Shepperd said, explaining the importance of providing the public with that information.

The bill still needs to be signed by Gov. Rick Perry and will be published in the Texas register for public comment.

After that, the Railroad Commission will vote to adopt the rules for implementation, although the length of the rule making process isn't definite, Railroad Commission of Texas spokeswoman Ramona Nye said.

"The timeline can vary," Nye said.

While some companies have concerns about revealing trade secrets through disclosure, others have already been disclosing information about the chemicals they use.

"Haliburton discloses the ingredients used in its fracturing operations," Haliburton representative Teresa Wong said in an email. "In fact, Haliburton goes a step further than the law requires by disclosing the constituents and additives used in typical fracturing formulas in its website."

And trade secrets would not be disclosed under the new bill, Texas Oil and Gas Association representative Deb Hastings said.

The chemicals would be posted on Frac Focus, the same website hazardous or carcinogenic chemicals are now voluntarily disclosed, Hastings said.

However, since non-hazardous and non-carcinogenic chemicals will also be disclosed due to the new bill, the Railroad Commission will need to create a system for listing these additional chemicals online, Hastings said.

Already some companies decide to list them with the other chemicals on Frac Focus, but the Railroad Commission may create a new spreadsheet for this additional group of chemicals, Hastings said.

The goal is to have all of the chemicals listed in one place, but the exact method is still being discussed, Hastings said.

While some environmental groups wish the bill were stricter, they still see it as a positive step.

"It still represents a major shift," Matt Watson of the Environmental Defense Fund said.

Sometimes during drilling chemicals can accidentally leak into the ground, Watson said.

And the main concern is that those chemicals could contaminate groundwater, Watson said.

Understanding the ramifications of contamination is difficult when the exact chemicals are unknown, Watson said.

Also, without knowing the exact chemicals involved it would be difficult to tell whether any plant life could be affected by leaks into the ground, Watson said.

When asked whether leaking chemicals were common, Shepperd said it was rare and usually came from a bad cement job or a casing leak.

"It has happened in the past," Shepperd said, adding that to his knowledge no actual fracking fluid had gotten into the drinking water.

But he didn't see plant-life contamination through the ground as an issue.

"(The chemicals) are rarely spilled on the ground," Shepperd said.

Most frac fluid is removed after drilling is completed, Shepperd explained, and he said drilling companies keep layers of cement and tubing between the drill site and fresh water.

The Texas Railroad Commission is required by law to begin the rule-making process by Sept. 1, but Hastings said she expected it to begin before then.

And after the rules to enact the potential law are created, it will become mandatory for oil and gas companies to provide a public listing of the chemicals, Hastings said.

"Texas will be better off for the bill having passed," Watson said.

Copyright (c) 2011, Odessa American, Texas

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Commissioner Seeks to Complete Rule-Making on Fracturing Bill a Year Early

- Commissioner Seeks to Complete Rule-Making on Fracturing Bill a Year Early

Friday, June 03, 2011
Rigzone Staff

Texas Railroad Commissioner (TRC) David Porter said would push the Railroad Commission (RRC) to complete the entire rule-making process requiring disclosure of chemicals used in hydraulic fracturing a year ahead of the deadline set in recent legislation.

The Texas Legislature on May 31 sent a bill to Governor Rick Perry on requiring the RRC to write disclosure rules for hazardous chemicals by July 1, 2012. The bill requires the RRC to complete rule-making for all other chemicals used in the process by July 1, 2013.

"In order for Texans to maintain confidence in the oil and gas industry, it is important for us to get this done as quickly as possible," said Porter. "Hydraulic fracturing has been an economic driver for Texas, creating hundreds of thousands of jobs and adding billions of dollars to local economies. We are currently seeing record activity in the Eagle Ford Shale due to hydraulic fracturing which is why I am creating a task force to study these very issues. We need to assure the public that hydraulic fracturing is safe and responsible – and has been for the past sixty years – and we need to do it now."

The RRC will begin the rule-making process at its next open conference this month and will hold open meetings throughout the state in coming months to garner public comment.

Porter said the agency may increase the number of members on TRC's newly formed Eagle Ford shale task force from the original plan for between 15 to 18 members due to the quality of applications. TRC is reviewing applications now and hopes to have selected all members of the voluntary task force, which will include a mix of energy industry members, local environmental groups, elected officials and landowners in the Eagle Ford shale area of South Texas, by the end of June.

TRC decided to form the Eagle Ford shale task force to head off the perception and communication problems encountered with the Barnett shale gas drilling boom hit Texas. "We're trying to be proactive, not reactive," Porter said.

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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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House Passes Bill to Drill in Parks

- House Passes Bill to Drill in Parks

Friday, May 27, 2011
The Columbus Dispatch, Ohio
by Jim Siegel

With Ohio facing $500 million in backlogged capital projects at its state parks and gas prices still flirting with $4 a gallon, House Republicans say now is the time to allow oil and gas drilling in parks and other state-owned land.

After a three-hour debate, the House voted 54-41 yesterday for a bill that would create an Oil and Gas Leasing Commission to oversee the leasing of state-owned land for oil and gas drilling.

"It will not solve Ohio's problems or energy-price problems, but it is a component we cannot ignore," said Rep. John Adams, R-Sidney, the bill sponsor.

Republicans said House Bill 133 would create jobs and help lower energy prices. Oil and gas drillers are particularly interested in southeastern Ohio and Salt Fork State Park.

"If this gas boom takes off like we understand it is, there aren't going to be enough hotels. There aren't going to be enough houses. There aren't going to be enough restaurants to handle all of the people who are coming into this state," said Rep. Matt Huffman, R-Lima.

Two Republicans joined all Democrats in voting against the bill. Franklin County lawmakers broke along party lines.

Democrats argued that with 99.5 percent of Ohio already available for drilling, the bill is unnecessary. They also questioned the economic benefits, and argued it would cause significant damage to state parks, hurt tourism and harm the economy.

"We're not against drilling. We're against drilling in parks," said Rep. Robert F. Hagan, D-Youngstown, who went on to question whether Republicans were on drugs.

Democrats also suggested Republicans would face voter backlash over the bill in next year's elections. In response, Speaker William G. Batchelder, R-Medina, pointed to gas prices.

"I would say that causes people to have a different view than they might have at $2.50," he said.

Batchelder said the ongoing revenue stream for capital projects at Ohio parks is vital. "When you look at them, you can see it," he said of the lack of upkeep. "I think six members used the phrase 'pristine parks.' I don't know where they're going. I have not seen those."

State revenue estimates from oil and gas royalties range from a few hundred thousand dollars to about $9million, depending on factors such as the level of oil and gas production and market prices, according to the nonpartisan Legislative Service Commission.

The bill divides state land into four classes, which, Adams said, will deal with issues related to federal encumbrances or deed restrictions. Energy companies would have the greatest access to land in which the state clearly owns all the development rights.

Ohio owns the mineral rights to 34,590 acres in state parks, less than one-third of the land.

Republicans added an amendment yesterday that would ban drilling on state nature preserves, which Jack Shaner of the Ohio Environmental Council called a positive step. But he strongly opposes the bill.

"Ohio has always promised that its parks would remain a natural park, not an industrial park," he said, adding that the new leasing commission would be "too industry-cozy." He said the director of the Ohio Department of Natural Resources should have the final say on whether drilling is allowed in state parks.

Tracy Sabetta of the National Wildlife Federation of Ohio said she is concerned that the bill does not explicitly exempt Lake Erie from drilling. While a federal ban remains in place, there are efforts to repeal it, she said.

Rep. Dave Hall, R-Killbuck, said the bill essentially bans Lake Erie from drilling because of the way it is classified.

Gov. John Kasich's proposed state budget also would open state parks to drilling, but it left the Ohio Department of Natural Resources in control of the leasing process.

Both Hall and Batchelder said they prefer the House drilling language to what is in the budget. Laura Jones, spokeswoman for the Ohio Department of Natural Resources, said the office is "pleased with how our concerns (with the bill) have been addressed."

"It's very positive that the landholding agency is the entity entering into the lease as opposed to the commission," she said.

Copyright (c) 2011, The Columbus Dispatch, Ohio

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Seward Shows Support for Home-Rule Bill

- Seward Shows Support for Home-Rule Bill

Friday, May 27, 2011
Knight Ridder/Tribune Business News
by Tom Grace, The Daily Star, Oneonta, N.Y.

State Sen. James Seward supports a bill that would make it easier for towns to say no to gas drilling and hydrofracking.

Seward, R-Milford, said that he is cosponsoring Senate bill 3472 "to give local governments veto power over natural gas drilling."

The measure would strengthen the home-rule authority of municipalities to use their land-use laws and zoning to restrict activities like drilling and hydrofracking -- the injection of gas wells with millions of gallons of water, sand and chemicals to shatter rock deep underground and increase production.

In northern Otsego County, several towns have been working to strengthen their land-use laws and prevent gas drilling, he noted.

"When it comes to horizontal drilling and hydrofracking, these are very technical and emotional issues," Seward said. "The DEC is going through its review, and we could see another version of their regulations in mid-to-late summer.

"In the meantime, I have been meeting with advocates on all sides of the issue, but I think it's significant when a local government, a town board for example, takes action with their zoning and land-use authority. I think the state should respect these actions and the ethic of home rule.

"Here, we have Otsego, Middlefield, Cherry Valley, Springfield all taking steps to respond to their residents and I think the state should respect that."

If the state strengthens home-rule authority, municipalities will have less risk of being sued and seeing their local laws overturned in court, he said.

"I'm taking a two-pronged approach: co-sponsoring the bill and I have written to the commissioner of the DEC, and met with the governor's office, urging them to respect home rule."

In his letter to DEC Commissioner Joe Martens, Seward wrote, "I take this opportunity ... to recognize the prerogatives of local governments, the varied opinions on the merits and drawbacks of natural gas exploration and provide for local 'opt-out' provisions in the new regulations.

"This could be as simple as the department not considering applications where local law prohibits drilling."

Reaction to Seward's stance on home rule was divided Wednesday.

"I haven't read the bill, so I can't comment on that, but I support the concept," Middlefield Town Supervisor David Bliss said.

With enhanced home-rule authority, municipalities will be freer to respond to their residents' concerns, he said.

On the other hand, Worcester town board member and drilling proponent David Parker asked: "Is he up for re-election this year? (He isn't.) Because he's going to make a lot of people upset."

Parker said the industry likes to have an organized approach to drilling, connecting wells with pipelines that cross municipal boundaries, "not dealing with every individual town government."

Jim Smith, a spokesman for the Independent Oil & Gas Association of New York State, said state regulation has "worked well for 30 years, and I don't see any reason to change that."

If some towns opt out of drilling and hydrofracking, they may compromise other towns' ability to extract the resource, he said.

Rob Robinson, president and chief executive officer of the Otsego Chamber, said: "I think gas drilling should be regulated by the state, not towns."

Erik Miller, executive director of the Otsego County Conservation Association, hailed Seward's leadership on the issue.

"Home rule is exactly what more progressive communities have asked for, a chance to make their own determinations," Miller said. "I think it's a great middle ground."

Copyright (c) 2011, The Daily Star, Oneonta, N.Y.

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Gas Royalty Owners Lament 'Gutted' Bill

- Gas Royalty Owners Lament 'Gutted' Bill

Thursday, May 26, 2011
Knight Ridder/Tribune Business News
by Laura Legere, The Times-Tribune, Scranton, Pa.

An organization of natural gas royalty owners is frustrated with amendments to a state Senate bill they say has been stripped of provisions to protect landowners if gas companies improperly withhold royalty payments.

In its present form, Senate Bill 460 would standardize the information attached to each royalty check so landowners know how much gas was sold, from which well it was produced, how much was deducted for taxes or costs, and the royalty owner's share of the sale.

An earlier version of the bill went further to outline penalties that could be exercised against gas drillers that withhold royalty payments without proper cause. The penalties included the ultimate punishment: dissolving the gas lease that allows them to drill on a property.

In reporting the bill out of the Senate Environmental Resources and Energy Committee earlier this month, the bill's sponsor, Gene Yaw, R-23, Williamsport, said the bill was amended to remove anything connected to the "controversial" lease dissolution language, which he said was "a bit aggressive."

On Tuesday, he said the amended bill is "what we could get passed. It's as simple as that." "It's not everything I hoped, but it does serve one purpose that I did hope to get done, which is to standardize some of the information that is reported," he said.

Trevor Walczak, the vice president of the state chapter of the National Association of Royalty Owners (NARO) said the bill as originally proposed "gave some acceptable leverage" to mineral owners who he said are often kept "in the dark" by gas companies that should be their partners.

"Unfortunately, after it came out of committee, most of the checks and balances of the bill had been gutted," he said.

State NARO President Jacqueline Root said royalty owners are particularly concerned about a document issued by the gas companies called a division order that details each royalty owner's stake in a producing gas well before the first royalty checks are paid.

Some gas drillers keep the documents simple, she said, while others try to use them to subtract costs or taxes even if a signed gas lease barred those deductions.

Because the companies require the division orders be signed before they pay any royalties, they are "really holding the royalty owner hostage" by changing lease terms in the division order, she said.

"It's not as easy as saying, I won't sign that with that language in it," she said. "The royalty owners could be expecting a check ranging from $1,000 or less to a quarter of a million dollars."

She said the association hopes to work to get the protective language about the division orders reinserted in the bill, even if it means giving up the language about dissolving a lease.

Mr. Yaw said a similar change was discussed "but we couldn't get any agreement to do anything like that at this point. "We wish we could have gotten more," he said, "but this is what we could get to move."

Copyright (c) 2011, The Times-Tribune, Scranton, Pa.

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Drilling Bill Modernizes State O&G Statutes

Drilling Bill Modernizes State O&G Statutes

Friday, April 15, 2011
Knight Ridder/Tribune Business News
by Robert Barron, Enid News & Eagle, Okla.

Enid Legislation authored by state Rep. Mike Jackson and state Sen. Cliff Branan allowing expansion of horizontal drilling in Oklahoma was signed into law Wednesday by Gov. Mary Fallin.

House Bill 1909 modernizes oil and gas statutes to update them to accommodate technological advances in horizontal drilling in shale reservoirs. Jackson, R-Enid, said originally there was opposition from royalty and mineral owners, but a task force led by Corporation Commissioner Dana Murphy looked at the problem in an interim study.

The legislation allows for production to expand across drilling unit boundaries of 640 acres. To do so, producers would make application to royalty owners. Producers who do not own a royalty lease can go across the lease and make percentage payments for surface damages that have been done. Jackson said that will benefit shale production in northwest Oklahoma. It makes investment costs less, because drilling can be extended, rather than "poking another hole in the ground," he said.

"When you poke a hole in the ground, your upfront costs are more, so if you can extend it ...," Jackson said.

He said he thinks there will be an increase in horizontal drilling in northwest Oklahoma because of the shale play here and because investment costs are less. That will result in an increase in gross production tax receipts, give more people jobs and do a number of things that will benefit the state, Jackson said.

"The more production is pulled out of the ground benefits the mineral owner as well," he said.

Producers must submit a proposal for horizontal drilling to Oklahoma Corporation Commission for approval, and mineral owners will have a say in whether they want it to occur, Jackson said. There is a high threshold, but an overall benefit to everyone will make it work, he said.

Fallin said the act will help Oklahoma compete against other shale plays nationwide and ensure drilling dollars stay in Oklahoma. Murphy praised the signing of the bill Wednesday.

"I am pleased and proud to have been part of this nine-month-long collaborative effort to ensure that Oklahoma's natural resources continue to be developed while protecting all mineral owners' and other stakeholders' rights," Murphy said. "It was an honor to serve as the facilitator and coordinate this effort with industry, mineral owners and others to make this bill a reality."

A statement from Continental Resources said representatives of the company participated in the study sponsored by Murphy. Advances in horizontal drilling techniques for wells drilled and completed in shale reservoirs have advanced beyond the historical statutory spacing scheme, particularly with lateral wells exceeding 5,280 feet in length, the Continental statement said.

Oklahoma Corporation Commission is the agency charged with the protection of rights of those owning oil and gas interests in Oklahoma, prevention of waste and promotion of full development.

Bill to Boost State Engineer's CBM Water Permitting Authority

Tuesday, March 22, 2011

The Pueblo Chieftain, Colo.

by  Patrick Malone

 

A House committee unanimously passed a bill that seeks to grant the state engineer greater authority in the water permitting process for coal-bed methane gas extraction.

The House Agriculture, Livestock and Natural Resources Committee voted 13-0 to adopt HB1286, sponsored by Reps. Jerry Sonnenberg, R-Sterling, and John Becker, R-Fort Morgan.

The bill aims to streamline the decision-making process on water permits. A 2009 Colorado Supreme Court decision found that water used in coal-bed methane natural gas extraction is subject to the requirements of tributary water permitting. The ruling granted Water Courts authority over permitting conflicts and appeals.

The ruling added the state's 40,000 oil and gas wells to the rolls of water users subject to tributary water permitting process. Before that, about 8,000 water users were subject to it.

Nontributary water can be exempt from permitting, Following the court's ruling, the state engineer developed rules to govern permitting within the framework of the court's decision, and developed a map that reflects extraction operations subject to permitting under it. Among them were some wells in the Raton Basin near Trinidad.

Under HB1286, the state engineer's rules would be acknowledged in statute, appeals of permit decisions would be routed through the rule-making process instead of through Water Court and further appeals of those decisions to a Water Court would require a higher standard of proof to overturn earlier rulings in the chain of appeals.

The chief opponent of the bill to testify Monday was lawyer Philip Lopez of the firm White & Jankowski, which represents the plaintiffs who were victorious in the 2009 case.

He characterized the bill as an attempt to legislate around judicial decisions, argued the ruling has not led to the shutdown of any gas wells and said the state engineer's map confers by default a water right to the oil and gas industry that other water users must follow process to attain.

Supporters of the bill contend that the permitting process established by the court ruling leaves the door open to prolonged shutdowns of oil and gas operations if a water user challenges their water rights.

"This will make it a lot simpler," said state Rep. Wes McKinley, D-Walsh. "We don't know that it will, but it could get some gas wells back in operation."

Next, HB1286 faces debate in the House.

 

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