State forms Eagle Ford task force

- State forms Eagle Ford task force

Tuesday, May 17, 2011
Houston Chronicle
by Tom Fowler

The Texas Railroad Commission is creating a task force in the Eagle Ford shale region of South Texas to ensure that regulators can keep up with the oil and gas boom there, said one of the three commissioners.

In an interview with the Houston Chronicle, Commissioner David Porter said the state's main drilling regulator wants to avoid repeating problems that arose when gas drilling took off in the Barnett Shale in North Texas in the middle of the last decade.

Breakthroughs in two technologies -- hydraulic fracturing and horizontal drilling -- have allowed drillers to tap economically into prolific shale formations in the Dallas-Fort Worth area and many other parts of the country.

The speed of development in North Texas led to backlashes against drilling in some communities, Porter said.

"There's a perception problem that no one was regulating the oil and gas industry," Porter said. "And it's still out there, that the oil companies are doing whatever they want."

Porter said he believes the Eagle Ford has the potential to be the biggest single economic driver in South Texas' history.

The task force will comprise about a dozen members, including large and small producers, oil field services companies, local elected officials, landowners and environmental groups.

"We want to make sure the lines of communication are clear," Porter said.

But the commission still may face staff shortages because of deep cuts the Legislature is making this session.

During the last session in 2009 the Commission was funded for 704 full-time equivalent positions, which was considered less than full staffing.

Now the staffing is around 625, down because of budget reductions state leaders asked all agencies to make in the past year.

The commission wants funding for 40 to 50 positions above the 704 funded in 2009, but Porter isn't optimistic.

A staffing shortage could lead to delays in issuing permits for Eagle Ford work, he said. Worker shortages already have slowed some permitting and enforcement work.

Historically, the commission has moved workers from other divisions when necessary to keep permits for new wells flowing.

"That's been the highest priority within the commission, to keep everything moving economically," Porter said -- acknowledging the potential for conflict between that function and enforcing safety rules, including ensuring that underground aquifers aren't contaminated by drilling activities.

"It's a fine line we walk at the Railroad Commission, between protecting public health and safety and promoting the industry," Porter said.

The water issues in the Eagle Ford will be even more sensitive than in the Barnett Shale, Porter said, because the area is more arid and the aquifers are deeper than in North Texas, meaning well casing has to run deeper to protect the drinking water.


Copyright (c) 2011, Houston Chronicle

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DOE Forms Fracking Safety Panel

DOE Forms Fracking Safety Panel

Friday, May 06, 2011
U.S. Department of Energy

U.S. Energy Secretary Steven Chu on Thursday announced a group of environmental, industry and state regulatory experts who will make recommendations to improve the safety and environmental performance of natural gas hydraulic fracturing from shale formations. President Obama directed Secretary Chu to convene this group as part of the President's "Blueprint for a Secure Energy Future" plan to reduce America's oil dependence, save consumers money, and make the U.S. the leader in clean energy industries.

"America's vast natural gas resources can generate many new jobs and provide significant environmental benefits, but we need to ensure we harness these resources safely," said Chu. "I am looking forward to hearing from this diverse, respected group of experts on best practices for safe and responsible natural gas production."

A group of highly respected experts with experience in industry, environmental groups and state regulatory agencies will form a subcommittee of the Secretary of Energy's Advisory Board to conduct the review, and will work to identify, within 90 days of beginning their work, any immediate steps that can be taken to improve the safety and environmental performance of hydraulic fracturing. They will also develop, within six months of beginning their work, consensus recommended advice to the agencies on practices for shale extraction to ensure the protection of public health and the environment.

Membership of the group includes:

• John Deutch, Institute Professor at MIT (Chair)
  John Deutch served as Director of Energy Research, Acting Assistant Secretary for Energy Technology and Under Secretary of Energy for the U.S. Department of Energy in the Carter Administration and Undersecretary of Acquisition & Technology, Deputy Secretary of Defense and Director of Central Intelligence during the first Clinton Administration. Deutch also currently serves on the Board of Directors of Raytheon and Cheniere Energy and is a past director of Citigroup, Cummins Engine Company and Schlumberger. A chemist who has published more than 140 technical papers in physical chemistry, he has been a member of the MIT faculty since 1970, and has served as Chairman of the Department of Chemistry, Dean of Science and Provost.
• Stephen Holditch, Head of the Department of Petroleum Engineering, Texas A&M University
  Stephen Holditch serves as Head of Texas A&M's Harold Vance Department of Petroleum Engineering and serves on the Boards of Directors of Triangle Petroleum Corporation and Matador Resources Corporation Texas. In 1977, Dr. Holditch founded S.A. Holditch & Associates, a petroleum technology consulting firm which provided analysis of low permeability gas reservoirs and designed hydraulic fracture treatments. He served as president of the company until it was bought by Schlumberger in 1997. Holditch has worked for Schlumberger, Shell Oil Company and Pan American Petroleum Corporation.
• Fred Krupp, President, Environmental Defense Fund
  Fred Krupp has overseen the growth of EDF into a recognized worldwide leader in the environmental movement. Krupp is widely acknowledged as the foremost champion of harnessing market forces for environmental ends. He also helped launch a corporate coalition, the U.S. Climate Action Partnership, whose Fortune 500 members - Alcoa, GE, DuPont and dozens more - have called for strict limits on global warming pollution. Krupp is coauthor, with Miriam Horn, of New York Times Best Seller, Earth: The Sequel. Educated at Yale and the University of Michigan Law School, Krupp was among 16 people named as America's Best Leaders by U.S. News and World Report in 2007.
• Kathleen McGinty, Former Secretary of the Pennsylvania Department of Environmental Protection
  Kathleen McGinty is a respected environmental leader, having served as President Clinton's Chair of the White House Council on Environmental Quality and Legislative Assistant and Environment Advisor to then-Senator Al Gore. More recently, she served as Secretary of the Pennsylvania Department of Environmental Protection and as Chair of the Pennsylvania Energy Development Authority. McGinty is Senior Vice President of Weston Solutions, Inc. and a Director at NRG Energy.
• Susan Tierney, Managing Principal, Analysis Group
  Susan Tierney is chairman of the Board of the Energy Foundation, and serves on the Boards of Directors of the World Resources Institute and the Clean Air Task Force. Until recently, she was a co-chair of the National Commission on Energy Policy. Currently, she chairs the National Petroleum Council Policy Subgroup's study of North American natural gas and oil resources. Dr. Tierney served as Assistant Secretary for Policy at the U.S. Department Energy during the Clinton Administration. In Massachusetts, she served as Secretary of Environmental Affairs, Chair of the Board of the Massachusetts Water Resources Agency, Commissioner of the Massachusetts Department of Public Utilities and executive director of the Massachusetts Energy Facilities Siting Council.
• Daniel Yergin, Chairman, IHS Cambridge Energy Research Associates
  Daniel Yergin is the co-founder and chairman of IHS Cambridge Energy Research Associates. He is a member of the Board of the United States Energy Association and a member of the U.S. National Petroleum Council. He has chaired the U.S. Department of Energy's Task Force on Strategic Energy Research and Development. Yergin is also CNBC's Global Energy Expert and the author of the Pulitzer Prize-winning book, The Prize: The Epic Quest for Oil, Money and Power.
• Mark Zoback, Professor of Geophysics, Stanford University
  Mark Zoback is the Benjamin M. Page Professor of Geophysics at Stanford University. He was co-principal investigator of the San Andreas Fault Observatory at Depth project (SAFOD) and has been serving on a National Academy of Engineering committee investigating the Deepwater Horizon accident. He was the chairman and co-founder of GeoMechanics International and serves as a senior adviser to Baker Hughes, Inc. Prior to joining Stanford University, he served as chief of the Tectonophysics Branch of the U.S. Geological Survey Earthquake Hazards Reduction Program.

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Dart Forms CBM Venture in Belgium

Dart Forms CBM Venture in Belgium

Monday, May 02, 2011
Dart Energy Limited

Dart Energy Limited has entered into a coal bed methane (CBM) joint venture with NV Mijnen (NVM) in Belgium.

NVM is a wholly owned subsidiary of Limburgse Reconversie Maatschappij (LRM), a Flanders Authority owned enterprise, with a charter focused on promoting economic development and overall employment in the province of Limburg, Belgium. NVM owns approximately 80% of all coalfield concessions in the Flanders region of Belgium.

The joint venture will seek to explore, appraise and develop CBM resources on NVM's existing coal mining concession area in the Campine Basin, Flanders, Belgium. The joint venture will also seek to secure further CBM and unconventional gas concessions in the same region.

The joint venture will operate under the name NV Limburg Gas, and will be owned 80% by Dart Energy and 20% by NVM. Dart Energy will be operator and manager of the joint venture.

Initially, the joint venture will focus on, and have the exclusive rights to explore for CBM in a 350km2 area of the Campine Basin over which NVM currently holds a coal mining concession. Dart and NVM will fund the cost of exploration and share the economic benefits in proportion to their respective equity interests in the joint venture.

Dart and NVM have agreed an initial appraisal program of a minimum of 1 core well to be drilled during 2012. Depending on successful outcomes, the program might be expanded to include additional core wells in 2012, and pilot wells in 2013.

In addition, Dart and NVM have agreed to exclusively work together under an Area of Mutual Interest Agreement (AMI). The AMI is for 3 years and covers the joint pursuit of further licensing opportunities in the Campine Basin. The Campine Basin is currently generally unlicensed for CBM / gas exploitation, although a Belgian government decree opening the region for licensing is expected in mid-2011. In order to secure licenses in this region once available, a license applicant will be required to have both technical capabilities and some level of local Flemish ownership. Dart and NVM therefore believe the combined attributes of both parties via the joint venture being created will maximize the prospect of securing further licenses. Under the AMI, the joint venture will initially be targeting open acreage areas of approximately 700km2.

Announcing the Joint Venture, Dart Chief Executive Officer and Managing Director, Simon Potter said:

"Dart acquired Composite Energy Limited to provide a low cost CBM platform in Europe with a maturing funnel of business opportunities, including the opportunity in Belgium which Composite has been working on securing for over 12 months. The initial entry cost into the joint venture is modest, but over time the potential exists to work through this joint venture and develop a material CBM resource in the Campine Basin which although prospective is currently unexplored. This transaction is therefore consistent with Dart's stated strategy of gaining low-cost access to high-graded opportunities proximate to high demand gas markets and high prices, and furthers our desire to selectively expand our acreage across Europe."

"The transaction also marks the beginning of a relationship with NVM and its parent company, LRM, as our Belgian partner. We are delighted that Composite / Dart has been selected as NVM's partner of choice, and we look forward to working closely with our new Belgian partner as we seek to better understand and then unlock the CBM resource potential in the Flanders region."

LRM is a Flemish Authority-owned profit-oriented investment company which acts as an investor to promote economic development and general employment in the province of Limburg, Belgium. Whilst LRM is a generalist investor, core areas of focus for LRM include ICT, Life Sciences and Cleantech & Energy. LRM focuses on all sectors and enterprises, and owns approximately 80% of all existing coalfield concessions in Flanders, Belgium via its 100% subsidiary NV Mijnen.

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