TransCanada Pipeline Will Have Limited Environmental Impact

- TransCanada Pipeline Will Have Limited Environmental Impact



Aug 26, 2011

The U.S. State Department concluded that TransCanada (NYSE:TRP) proposed $7 billion KeyStone XL pipeline will have limited impact on the environment, potentially bringing the department closer to a final decision on the controversial project.

TransCanada (NYSE:TRP) has a potential upside of 8.2% based on a current price of $42.48 and an average consensus analyst price target of $45.97.

TransCanada is currently above its 50-day moving average (MA) of $41.96 and above its 200-day of $40.16.

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Gas Drillers Have Work To Do To Address Environmental Concerns

- Gas Drillers Have Work To Do To Address Environmental Concerns

Thursday, August 11, 2011
Dow Jones Newswires
WASHINGTON
by Ryan Tracy

Regulators should require the oil and gas industry to disclose the contents of the fluid used in a drilling technique that has helped unlock vast reserves of U.S. energy resources, a panel convened by the U.S. Energy Department recommended Thursday.

The Natural Gas Subcommittee, in a report issued Thursday morning, also said the industry has to expend effort to fully address environmental concerns related to the drilling technique, known as hydraulic fracturing, and other aspects of the drilling process, including wastewater management and well design.

Energy Secretary Steven Chu convened the subcommittee to identify ways to improve the safety of gas drilling. Neither the panel nor the Energy Department have regulatory authority over the industry, but the recommendations come as operators face increasing scrutiny from the media and environmental groups along with the prospect of tighter regulation from states and other federal agencies, including the Environmental Protection Agency.

The panel noted that a recent boom in gas drilling that has quickly transformed the U.S. into a production giant has brought economic benefits and "enhanced national security," but added that "the growth has also brought questions about whether both current and future production can be done in an environmentally sound fashion that meets the needs of public trust."

The EPA is conducting its own study on the impact of hydraulic fracturing on drinking water, while planning to regulate air emissions from gas operations and the use of diesel fuel in the fracturing process. New York is moving toward allowing more drilling to tap what are thought to be considerable reserves within its borders, but regulators are still evaluating the environmental consequences.

The Energy Department panel recommended more research into possible methane leakage from gas wells--a problem that, according to Pennsylvania regulators, has tainted water supplies in dozens of homes. It said operators should develop best practices for well design and regulators should inspect wells at crucial points during the drilling process.

In addition, the panel said regulators should "immediately develop rules to require disclosure of all chemicals used in hydraulic fracturing fluids," addressing a longstanding complaint from environmentalists who say that without that information, they cannot hold companies accountable for potential contamination. The panel said there should be an exception for information that was "genuinely proprietary."

Federal agencies should make a joint effort to evaluate the emissions of heat-trapping greenhouse gases from natural gas drilling as part of a look at the "life-cycle use of natural gas as compared to other fuels," the panel said.

Proponents of natural gas have long argued that gas is cleaner-burning than oil or coal, but recent research has suggested that extracting the gas may release more greenhouse gases than previously thought, raising questions about whether it is an effective way to mitigate climate change.

Environmental groups have questioned the panel's objectivity, saying that some of its seven members have been paid to do research for the oil and gas industry. The industry, meanwhile, has griped that it has no direct representatives in the panel. The members include academics, consultants, and the president of an environmental advocacy group.

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

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N. Dakota Official: Floods Have Idled 5 Rigs, Shut Down 45 Wells

- N. Dakota Official: Floods Have Idled 5 Rigs, Shut Down 45 Wells

Tuesday, June 28, 2011
Dow Jones Newswires
HOUSTON
by Angel Gonzalez

Bad weather, flooding and road restrictions are disrupting oil production in North Dakota, shutting down the transportation by rail of 50,000 barrels a day of crude, a state official said.

"No one was prepared to deal with floods that are breaking records set 130 years ago," said Lynn D. Helms, director of the North Dakota Industrial Commission's Department of Mineral Resources said in an e-mail sent late Monday. Helms said the temporary shutdown of the rail transportation will last until it can be re-routed west, but didn't give an estimate as to when that might occur.

The weather has forced the shut in of 45 wells and idled five drilling rigs and is delaying the arrival of service crews to 500 wells waiting to be fractured, Helms said.

North Dakota sits atop the Bakken Shale, one of the richest deposits of oil in the U.S.--but one that requires intensive fracturing activity to yield crude. Last year, it produced an average of about 307,000 barrels of oil per day.

Michael Marino, an analyst with the investment bank Stephens, said moving drilling supplies in and crude out of the oil patch is the main problem in the Bakken.

"Overall the biggest impact has been on the (exploration and production companies)trying to get oil out of the region because service companies have been able to work around issues to some extent," he said.

Bad weather and flooding have affected not only energy production, but also the agricultural sector and have severely damaged several cities, including Minot, in the western part of the state, where many residents had to evacuate.

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

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Oil Companies Have Plan for Lake Spill Equipment

Oil Companies Have Plan for Lake Spill Equipment

Tuesday, April 12, 2011
The Bismarck Tribune, Bismarck, North Dakota
by Lauren Donovan, The Bismarck Tribune, N.D.

North Dakota's first oil and saltwater spill into Lake Sakakawea caught the industry unprepared for a lake cleanup, but that could soon change.

A group of oil well and pipeline owners was already making plans to spend $1 million on boats, booms, skimmers and ice-borne pumps for fast response to a lake accident when the first spill into the lake was reported April 2.

Petro-Hunt LLC says five barrels of oil and 100 barrels of saltwater escaped a pipeline rupture at well north of Keene, near the lake on the south side.

A committee of 12 well owners and three pipeline companies with wells and pipelines near the lake started talking after last summer's BP Deepwater well blowout in the Gulf.

Committee chairman Jack Braun, of Whiting Petroleum, one of the largest oil producers in the oil patch, said the recent spill into Lake Sakakawea could put plans on the fast track.

"My reaction (to the lake spill) was, 'Oh, no.' I was really disappointed. This is a black eye for the entire industry. It might encourage the committee to work faster," Braun said.

Most of the oil was recovered, but all the saltwater reached the lake, though diluted by running snow-melt.

Rep. Kenton Onstad, D-Parshall, said he's asked state oil regulators about the lack of a statewide plan in the event of a lake spill.

"What's the plan when a tanker driver from Texas slides around the curve (at New Town) and goes off the bridge? What's the plan for that?" he said.

He said oil wells could be sited a safe distance from the water and reach oil with long horizontal legs.

"Why play with disaster?" Onstad said. "So many wells are near water. There should be better precautions so that any major spill doesn't hit the lake."

The Dakota Resource Council, an environmental group, said the first lake spill is among eight reported spills in a year, and troubling because lake water is used for community drinking water and agriculture.

Braun said the companies recognize the weakness in the overall spill response plan and are voluntarily moving to make it stronger.

"Our goal is create a cooperative to maintain spill response equipment that's big enough to operate on the lake, or get oil under the ice," he said. "We recognize the potential danger and we want to voluntarily do what's right," Braun said.

Braun said the committee members identified more than 100 of their own wells and a "handful" of pipelines close to the lake, or on tributaries. "These have the potential to either spill directly into the lake, or into drainage to the lake," he said.

One oil pipeline is attached to the underside of the 4 Bears bridge at New Town, which spans the lake.

He said a lake accident is more likely to involve hundreds, not thousands of barrels. A possible scenario is loss of well control causing oil or mist to shoot out from the well, or a pipeline break, which could potentially be worse, he said.

Braun said the committee is looking into how to jointly own the equipment, where to store it and training. The committee will meet Thursday to review draft agreements, he said. Part of the discussion will be about sharing equipment with companies that aren't in on the purchase.

If it goes well, Braun said it's possible the equipment could be purchased within months.

He said spill prevention is engineered into well equipment, into the strength of pipes and valves, and maintained through inspections for corrosion and other problems.

By law, oil companies are required to have spill response plans. There are about 20 response trailers in the oil patch with personal protection, booms, absorbent pads, fencing, and the like for a land spill. None of that gets to oil out on the lake, and that presented a troublesome gap in the overall response plan, Braun said.

When an SM Energy oil well near Arnegard caught fire last month, specialized well control equipment was trucked from Texas and arrived four days later.

Braun said having lake response equipment in the oil patch means it could be on the water within hours. He said committee plans to purchase a couple of larger boats, capable of pulling up to 5,000 feet of oil-trapping boom, a couple of smaller work boats, two oil skimmers and possibly an air boat for working close to shore. An ice response would involve equipment to drill holes or trenches on the ice to accommodate pumps.

Onstad said he thinks state regulators need to give more thought to wells sited near the lake before there is a major spill.

"A double dike (around wells) is not good enough," he said.