Iraq Energy Panel Approves Gas Deal - Oil Minister

- Iraq Energy Panel Approves Gas Deal - Oil Minister

Monday, September 12, 2011
Dow Jones Newswires
AMMAN
by Hassan Hafidh

A top Iraqi government energy committee has approved a deal with Royal Dutch Shell PLC (RDSA) to capture and exploit gas from its giant southern oil fields, the country's oil minister said Sunday.

The Iraqi oil ministry struck a deal in July with Shell and Japan's Mitsubishi Corp. (8058.TO, MSBHY) to develop gas production in southern Iraq. To become valid the deal needs approval from the Baghdad government.

"It was agreed upon by the energy committee and was sent to the cabinet for approval," Abdul Kareem Luaiby told Dow Jones Newswires on the sidelines of an Iraqi energy meeting in Amman, Jordan.

The committee is chaired by the deputy prime minister for energy affairs, Hussein al-Shahristani, and its members include the ministers of oil, electricity and finance.

Luaiby declined to say when exactly the cabinet would approve the deal. The agreement must first be examined by the cabinet's legal and specialized offices, he said.

The 25-year venture calls for an investment of $17.2 billion to create the Basra Gas Company. Baghdad would have a 51% stake, Shell 44% and Mitsubishi 5%.

Some $12.8 billion would be spent on infrastructure and $4.4 billion on construction of a liquefied-natural-gas facility.

Under the agreement, the company must first meet local demand but can export any gas not used by Iraq's fuel-starved power plants. The planned LNG terminal would handle the export of 600 million cubic feet a day.

Baghdad would contribute $5.236 billion to the venture, including some $1.524 billion in existing infrastructure. Shell and Mitsubishi need to contribute nearly $7 billion, and the remaining money will be financed through the venture's returns, according to the summary submitted by Iraq's oil ministry to the country's parliament.

The venture would process associated gas produced from three supergiant Iraqi fields--Rumaila, West Qurna phase 1 and Zubair--all in Basra governorate.

"We are committed to supply the venture with 1.6 billion cubic feet a day from these fields," Luaiby said.

The joint venture would sell produced gas to Iraq's state-owned South Gas Company, at international standard pricing.

Iraq estimates it should make around $31.1 billion over the 25 years of the project from taxes, fees and raw gas sales to the joint venture, the document said.

An Iraqi oil expert, who asked not to be named, however, said Iraq would make nearly $100 billion from the venture because the gas would substitute for the oil currently used to fuel Iraq's power stations.

Iraq would tax Shell and Mitsubishi profits at 35%, he said. The expert said Shell and Mitsubishi will make a 7% profit on the whole venture.

Iraq has natural-gas reserves totaling 112.6 trillion cubic feet, the 10th largest in the world. But it produces only around 1.5 billion cubic feet a day, because of a lack of infrastructure.

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

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Audit Slams Ca. Lands Panel for Failing to Collect Millions from Leases

- Audit Slams Ca. Lands Panel for Failing to Collect Millions from Leases

Wednesday, August 24, 2011
The Sacramento Bee, Calif.
by David Siders

The state is mismanaging oil and other leases on public land, failing for years to collect rent from some companies and costing California millions of dollars in lost revenue, the state auditor said Tuesday.

State Auditor Elaine Howle said in a blistering report that the State Lands Commission could have generated as much as $8.2 million in revenue from just a sample of the leases her office reviewed.

The commission "is not effectively managing its leases, and as a result it has failed to collect or generate millions of dollars in potential revenue for the state's General Fund," the report said.

Of the commission's nearly 1,000 revenue-generating leases, the report found 130 were past due on rent. In one case, Howle's office said, a marine services company remained on public land for more than 20 years without paying its $10,170 annual rent. The company itself, the report said, subleased the land and collected rent from its tenant.

Howle accused the commission of failing to adequately track the status of its leases, sometimes losing track of them. Her report said the commission failed to appraise its land as often as lease agreements allow and failed to quickly renew expired leases, missing opportunities to increase rent.

The State Lands Commission manages about 9 million acres of land granted to California by the federal government when it became a state, including tidelands and submerged lands on California's coast and rivers. Of its revenue-generating leases, the commission manages about 85 oil and gas, geothermal and mineral leases, and about 900 agricultural, commercial and other leases, according to the audit report.

The three-member commission consists of Lt. Gov. Gavin Newsom, Controller John Chiang and Finance Director Ana Matosantos.

Commission Executive Director Curtis Fossum blamed staffing reductions. He agreed with many of the auditor's recommendations but said in a written response that the commission has endured severe staffing cuts, from 242 general fund positions in 1991 to about 63.

He called the commission staff "a relatively small, hardworking and professional group dedicated to acting in the state's best interest."

Fossum also criticized the auditor for selecting to review in depth a 35-lease sample he said is not representative.

"What is clear is that this was not a representative sample of State Lands Commission leases, but rather a subjectively selected list of leases chosen to highlight specific problem areas," Fossum wrote, adding that the report relies on examples that "distort the bigger picture of commission successes."

AT A GLANCE

State Auditor Elaine Howle said that of the State Lands Commission's nearly 1,000 revenue-generating leases, an audit found 130 were past due on rent. In one case a company remained on public land for more than 20 years without paying its $10,170 annual rent, the report said.


Copyright (c) 2011 The Sacramento Bee (Sacramento, Calif.)

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Ford To Sell Solar Panel System Alongside With Electric Cars

- Ford To Sell Solar Panel System Alongside With Electric Cars



Aug 17, 2011

Ford Motor Company (NYSE:F) is joining forces with SunPower to offer a rooftop solar system option, which will be sold alongside the upcoming Ford Focus EV. The "Drive Green For Life" program, as its being called, includes mounting solar panels on a customer's home.

Pricing and an exact launch date for the new 2012 Ford Focus isn't available yet, but the car will go on sale first in California and New York in Q4 2011.

Ford also plans to launch 5 other electric or hybrid-electric models in 2012 in North America, and in Europe by 2013.

Ford Motor (NYSE:F) has a potential upside of 81.1% based on a current price of $11.07 and an average consensus analyst price target of $20.05.

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US House Panel to Draft Plan to Split Federal Oil Money with States

- US House Panel to Draft Plan to Split Federal Oil Money with States

Wednesday, July 27, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

The House Natural Resources Committee plans to draft legislation that redirects a portion of federal oil royalties to coastal states, ramping up debate on an issue that has also intensified in the Senate.

Rep. Doc Hastings (R., Wash.), chairman of the Natural Resources Committee, said at a hearing Wednesday that he was "actively" reviewing proposals to share federal oil revenue with the states. He said his committee would take up legislation to address the issue after a summer recess.

"When it is all boiled down, a revenue-sharing proposal is, and must be, about fairness," Hastings said.

Hastings didn't say how much royalty revenue he wanted to steer toward the states. A proposal in the Senate directs 37.5% of federal oil royalties to the 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.

Debate over revenue-sharing proposals has intensified in recent weeks as lawmakers look for ways to reduce spending and raise revenues as part of plans to increase the debt ceiling.

Opponents of revenue-sharing plans, often Democrats and lawmakers from non-coastal states, say it would be unwise for the federal government to give up billions of dollars of oil royalties at a time when it's struggling to claw its way out of debt.

Rep. Ed Markey (D., Mass.), the highest-ranking Democrat on the Natural Resources Committee, said Wednesday that a revenue-sharing plan would be a "big mistake" and that it's "just something [the federal government] can't afford."

"How can we even begin to discuss this subject right now?" Markey said.

Under current arrangements, states collect royalties from oil produced within the first three miles of a coastline. The federal government then collects most of the royalties on oil produced in the next three miles and lays claim to all of the royalties beyond that.

Supports of revenue sharing, often Republicans and coastal state representatives, say state officials will be incentivized to support more offshore oil production if they can collect a greater share of the royalties.

A battle over revenue sharing in the Senate has suspended action on a long-awaited bill that would strengthen safety standards for offshore oil drilling. At a committee-level markup last week, lawmakers blocked a vote on the bill after Sens. Mary Landrieu (D., La.) and Lisa Murkowski (R., Alaska) looked set to fail in their attempts to attach a revenue-sharing proposal to it.

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

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Shale Panel Offers Blueprint for Future

- Shale Panel Offers Blueprint for Future

Monday, July 25, 2011
Pittsburgh Post-Gazette
by Laura Olson

From impact fees to pooling gas rights, boosting fines to rewarding natural gas use, the governor's Marcellus Shale Advisory Commission stuffed dozens of wide-ranging suggestions into its report Friday.

Those 96 recommendations are aimed at encouraging gas companies to invest in Pennsylvania, protecting environmental resources and helping local governments manage the industry that is remaking their communities.

They ranged from specific updates -- setting the number of feet between wellpads and streams, and doubling the fines for companies that break the rules -- to general directions for legislators to review the business climate, analyze spill-containment methods and create a permanent advisory panel.

The report's directions were equally broad on the closely watched issue of an impact fee, urging simply that any fee be directed toward helping local governments with "uncompensated" costs from drilling activity.

And on another controversial issue, the panel gave limited instructions for "modernizing" state law to allow drillers to access gas within Marcellus Shale even against a landowner's wishes. That process, known as pooling, currently is allowed under certain conditions to extract gas more efficiently, but draws fiery opposition from those who see it as impinging on property rights.

One commission member said the goal of the 120-day fact-finding process was to create an outline of potential changes to how the state oversees gas drilling.

"The governor appointed this commission to give him best practices, to use as a base line in negotiating with the Legislature," said David Sanko, who represented the state's township supervisor association on the panel. "I think this plan has laid a nice blueprint for that. Many of those things do have to be worked out."

The governor won't be responding until next week at the earliest: his spokesman said he'll "digest" it and review it with his staff.

It didn't take long for reaction to pour in from outside groups: the drilling industry commended the report, local government officials declared victory, and even some environmental groups touted proposed oversight changes.

"Overall it's a positive thing that the commission took place and existed," said Matt Pitzarella, spokesman for Range Resources. "But it shouldn't be seen as the end all be all, because the technologies are always going to outrun any new provisions."

Others in the industry were more effusive in their praise for the commission's recommendations.

"We're excited about the report," said Kevin West, managing director for external affairs at the Downtown-based EQT Corp. energy company.

The Pennsylvania Independent Oil and Gas Association, which maintains a small lobbying staff in Harrisburg, is working on a response to the recommendation that outlines what it views as a fair impact fee plan, said Al Catanzarite, the association's vice president of public outreach. He said the association's response would be one that "addresses specific and defined impacts," and also funnels money back only to communities where actual drilling is taking place.

Environmentalists who represented the Chesapeake Bay Foundation, Pennsylvania Environmental Council, the Nature Conservancy and Western Pennsylvania Conservancy on the commission gave a mixed assessment of the final report.

"We consider the report to be a meaningful first step toward improving Pennsylvania's oversight of shale gas extraction, but additional improvements must be accomplished as the debate shifts to the General Assembly," the organizations said in a joint release.

Other environmental activists who were not included in the process, however, criticized the 137-page document, saying it was exactly what they feared from a panel that they viewed as stacked with industry executives.

"From day one, we knew that the advisory commission is nothing more than a stalling tactic," said Erika Staaf of the advocacy group PennEnvironment.

But now that report is out of the commission's hands and on the governor's desk. It's up to Gov. Tom Corbett and lawmakers to deem which provisions will move forward, and which will see further tweaks as they're transformed from suggestions to legislation.

Not all were controversial. Much of the report was approved unanimously, particularly recommendations regarding police and fire response to well emergencies and environmental protection. The panel said emergency information should be posted at all drilling sites, response plans should be standardized, and more training should be offered through the fire commissioner.

In addition to requirements for setbacks and bonding, more wastewater tracking and more frequent updates to neighbors and local officials during the drilling process were applauded by observers.

With some recommendations, there's much room for lawmakers to make their mark. The impact fee item does not include any direction on how much should be charged per well or how it should be assessed over time.

They suggested that the fee "include a correlation between the amount of the fee and costs incurred," but Mr. Sanko and others on the commission have acknowledged that calculating those exact costs has been difficult.

That fee also "should recognize the ongoing nature of certain impacts," and must not encourage companies to abandon their current partnerships with local governments, the report said.

Meanwhile, legislative leaders say they want to see a fee that includes funds for statewide environmental programs and other projects. "There are real needs in the commonwealth, and it may not all be where drilling is taking place," Senate President Pro Tem Joe Scarnati, R-Jefferson, said earlier this week.

There also will be legislative pushback on a provision to standardize local zoning laws, a change drillers have sought to help smooth out differences among thousands of municipal codes. The panel said local regulations should not "unreasonably impede" gas development, similar to phrasing that Mr. Scarnati drew criticism for in his impact fee plan.

"That [provision] must come out," said Senate Minority Leader Jay Costa, D-Forest Hills.

But the vague descriptions giving that legislative leeway make some of the items hard to decode, said John Hanger, who headed the state Department of Environmental Protection under Gov. Ed Rendell. "Two to three sentence recommendations is not enough to capture the details of many of these recommendations," Mr. Hanger said.

He was critical of language regarding incentives for switching public vehicle fleets to use natural gas, saying those should have been more aggressive.

The report suggests the creation of "Green Corridors," where natural gas fueling stations would be clustered. It also recommends including natural gas as a Tier 2 alternative fuel source under the state Alternative Energy Portfolio Standards Act. That would allow utilities to purchase natural gas to count toward the 18 percent of their power that must come from alternative sources by 2020.

That was one of a handful of recommendations that the environmental advocates who served on the panel cited as items they did not support. They raised concerns that there was no prohibition against additional surface impacts in future state forest land leasing, and that a suggestion to use money from those leases for infrastructure projects could deplete state conservation funds.

The biggest outcry came on the suggestion of pooling of gas rights, which the report portrayed as a method to ensure that the drilling process maximizes gas output and minimizes surface disturbances.

Pennsylvania already has a conservation law, which allows for mineral resources at a certain depth below the Marcellus Shale to be "pooled" against the owners' wishes into a larger drilling unit. The company wouldn't pay a leasing bonus, but would be required to pay a royalty on the gas extracted.

The report suggests that current law be amended to include the Marcellus and other shale deposits as eligible to be pooled. It also emphasized that property rights would need to be addressed as part of that policy debate, referencing concerns from opponents, including the governor, who say pooling infringes on the rights of landowners to make decisions.

Corbett spokesman Kevin Harley said the governor continues to oppose forcing someone to allow drilling under their property.

But he added that Mr. Corbett is willing to look at a version that would allow for "company-to-company" pooling in situations where landowners in one area have leased to several drillers, impeding development.

Still, that provision, which Mr. Scarnati called a "fatal flaw," will face a steep challenge from both parties in the Legislature.

"It's eminent domain, and you really have to have incredibly strong reasons to impose eminent domain," Mr. Costa said.


Copyright (c) 2011, Pittsburgh Post-Gazette

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Corbett's Shale Panel Recommends Drilling Impact Fee

- Corbett's Shale Panel Recommends Drilling Impact Fee

Friday, July 15, 2011
The Philadelphia Inquirer
by Angela Couloumbis

Gov. Corbett's Marcellus Shale advisory commission has recommend that Pennsylvania impose an impact fee, rather than a tax, on the extraction of natural gas.

The 30-member commission this morning also approved a long list of other recommendations for how to deal with the burgeoning drilling industry, including providing financial incentives for encouraging the use of natural gas.

But its decision on whether to have any sort of extraction levy was one the most eagerly anticipated.

Corbett has said he does not support a tax but would consider a local impact fee on drillers, as long as the money raised goes directly to those communities most heavily impacted by drilling.

The commission, in its recommendation, appeared to stick closely to those parameters, although it did not get into details, including how much that fee should be. It will leave that question to the legislature, which has signaled it will tackle the issue in the fall.

Senate President Pro Tempore Joe Scarnati (R., Jefferson) has an impact fee bill he is pushing.

Corbett assembled the commission four months ago to study the industry, find ways to facilitate its growth and determine how it affects drilling communities. Its recommendations are not binding.

Copyright (c) 2011, The Philadelphia Inquirer

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N.J. Pressures River Panel to Adopt Gas Rules

- N.J. Pressures River Panel to Adopt Gas Rules

Friday, July 15, 2011
The Philadelphia Inquirer
by Sandy Bauers

New Jersey is playing hardball with an interstate commission considering rules on natural gas drilling affecting the Delaware River.

At two recent meetings of the Delaware River Basin Commission (DRBC) -- one of them Wednesday -- the New Jersey representative, John Plonski, said the state might withhold payments to the financially strapped commission if it failed to vote on the rules at its next meeting, in September.

Critics said the state was improperly engaging in strong-arm tactics.

"It's shocking that a state would pull this kind of bullying tactic that amounts to extortion," said Tracy Carluccio of the Delaware Riverkeeper Network, an environmental-advocacy group.

A spokesman for the New Jersey Department of Environmental Protection, where Plonski is the assistant commissioner for water resources management, said Plonski merely wanted the commission to act.

"All we're doing is putting a little pressure on the DRBC, saying let's make sure that you don't sit on this issue, that you assess it properly and come to a decision," said Larry Ragonese.

"The No. 1 complaint about government is that it does not act," he said. "We're trying to have government be responsive in a timely fashion."

The industry has consistently urged the commission to act so that drilling can proceed.

The DEP comments struck Jeff Tittel of the New Jersey Sierra Club as disingenuous. "Then how come they don't act" on other environmental measures, Tittel said. "Want me to go down the list of things they're holding up?"

When it comes to environmental protection, the DEP waits, he said, "and when it comes to what polluters want, they think, we've got to hurry up and do it."

The commission, an interstate agency formed by a federal compact, regulates water quality and quantity in the area drained by the Delaware River and its tributaries, which collectively provide drinking water to Philadelphia and New York City.

Its five members are states with land in the basin -- Pennsylvania, New Jersey, New York, and Delaware -- plus a representative from the Army Corps of Engineers.

Most of the upper basin is atop the Marcellus Shale formation, rich in natural gas. Thousands of drilling leases have been filed in northeastern Pennsylvania within the watershed.

The commission has enacted what amounts to a moratorium on gas drilling in the basin until regulations are in place, and that has led to a tug-of-war not only about the regulations but also how fast the commission should adopt them.

In December, the commission proposed a set of regulations that environmental groups said were weak and the industry said were onerous and unnecessary.

A public comment period that would have ended March 15 was extended to April 15.

By then, the commission had received nearly 70,000 submissions. Now, the staff is categorizing them and preparing a document to respond to them, DRBC spokesman Clarke Rupert said.

Next, revisions might have to be made to the proposed rules.

Rupert said that he could not speculate how long this would take, but that for months the commission staffers have been saying that the earliest they could have something ready for the commission to vote on would be its September meeting.

Whenever the staff work is completed, the commission has a number of options. It could vote on what is presented. Or, if significant revisions are proposed, it could vote to seek more comment.

"Shouldn't the timing of the release of the natural gas rules be based on a careful review and scientific analysis of the comments that were received by the commission?" Carluccio said. "Not when one state arbitrarily sets a deadline."

Ragonese said that New Jersey also wants the regulations to be based on science and fact, and that DEP Commissioner Bob Martin has always said he wants to protect the river.

"We think a lot has been brought to them," Ragonese said. "They have had good time to consider it. We would really like to get something moving."

Pennsylvania and New York officials declined to comment. A spokesman for the Army Corps said its representative would be prepared to vote at the September meeting; he did not say what the vote would be.

The Delaware representative on the commission, Kathy Stiller, water director for the Department of Natural Resources and Environmental Control, said: "We are still looking at the deadline issue and haven't taken a position on it yet. Delaware's goal is to make sure we get the regulations technically correct. We do recognize that some guidance needs to be in place sooner rather than later."

If New Jersey were to withhold funds, the commission could be in a tight spot.

Under the compact, each of the five members pays a "fair share" of the annual budget. For the fiscal year that began July 1, the amounts were $893,000 each for Pennsylvania and New Jersey (25 percent of the total each), $626,000 for New York (17.5 percent), $447,000 for Delaware (12.5 percent), and $715,000 for the federal government (20 percent).

But although the commissioners commit to these amounts, they may never be funded.

With the exception of one year since 1996, the federal government's amount has never been appropriated. The U.S. government is more than $9 million in arrears.

New York's fiscal year began April 1, and it appropriated $355,000, slightly more than half its share.

Pennsylvania, Delaware, and New Jersey have budgeted their full amounts.

Even with that, the commission had to make up a shortfall of more than $400,000 this year, Rupert said, from "undesignated reserves."

Meanwhile, even as the Christie administration is pushing for the DRBC to act, state legislators want to put the brakes on the industry.

On June 29, the Assembly and Senate overwhelmingly passed legislation to prohibit a gas-extraction method known as hydraulic fracturing -- or "fracking" -- in the state. In effect, it would ban most drilling in the state.

Gov. Christie has a 45-day window to act on the legislation.

Copyright (c) 2011, The Philadelphia Inquirer

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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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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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Industry Panel: Consider 'Checklist' Approach to Offshore Safety

Industry Panel: Consider 'Checklist' Approach to Offshore Safety

Wednesday, May 04, 2011
Houston Chronicle
by Brett Clanton & Jennifer A. Dlouhy

As the global offshore oil and gas industry meets in Houston this week, leaders say they are aware the reputation of their business is still bruised after the BP Gulf of Mexico oil spill and that motorists and politicians are fuming over $4 gasoline prices.

But they cautioned Washington against overreaching with new regulation and taxes, stressing the enormity of the challenge ahead in meeting the world's surging energy needs.

"We cannot afford to have emotions control business and policy decisions," Zuhair Hussain, vice president of Saudi Aramco's drilling and workover unit, said during a panel discussion Tuesday at the 2011 Offshore Technology Conference.

With global energy demand expected to rise 40 percent by 2035, industry must be unencumbered to invest in finding more resources and developing new technology, said other panelists.

"You can't be emotional about our business based on gas prices," said Ali Moshiri, president of Chevron Corp.'s Africa and Latin America exploration and production company.

But Obama administration officials and oil company executives agreed that last year's Macondo well blowout, which killed 11 workers and launched the nation's worst oil spill, gave the industry a major image problem that could take years to quash.

Christopher Smith, U.S. deputy assistant energy secretary, noted that "blowout preventer" and "fracking" have become familiar words since the Deepwater Horizon disaster and amid controversy surrounding the fracturing process used to unlock natural gas. And that's not a good thing, he said.

"These terms have entered into the public consciousness in a way that is going to be a net negative for industry and for government as we try to advance our goals," Smith said.

But government, industry and environmentalists can work together on shared goals, such as advancing safe development of natural gas, he said.

Farouk Hussain Al Zanki, CEO of Kuwait Petroleum Corp., described a key lesson industry should take away from events of recent months, including the Gulf oil spill and Japan's tsunami-triggered nuclear power plant disaster.

"Energy safety has moved to the forefront of industry challenges," he said.

Dave Payne, Chevron's vice president of drilling and completions, said the damage from the spill will be particularly long-lasting.

"A large percentage of the American public doesn't understand our business," he said. "We have not regained trust. It will take us years as an industry to get to where we need to be."

He cautioned against an adversarial relationship between federal regulators and the offshore drilling industry. We "need a partnership with government," he said. "We cannot work at loggerheads with the government and be successful."

In an afternoon panel on the Gulf spill, speakers explored specific ways that the industry could learn from the blowout last year.

One big lesson: The data streaming from the seafloor to the drilling rig may not be displayed in the best way to help workers make quick decisions.

There's a concern that amid a barrage of data, "someone working in real time has to tease out" what's relevant "and make real consequential decisions on the fly," Smith said.

The oil and gas industry can take cues from how information is presented to pilots in airplane cockpits and engineers in nuclear reactors, he said.

"Instead of relying on a person who is smart and quick and who has that intestinal fortitude to stop work on a $350 million rig," Smith said, the airlines and nuclear industry use more checklists and automation.

Chevron's Payne said industry stalwarts likely would resist safety checklists, but acknowledged they could go a long way to improving safety offshore.

"We need to start bringing procedures and checklists into our business," he said. "We have an opportunity to work together as an industry and hold each other accountable."

OTC attendance so far is up about 10 percent from last year, when 72,900 came to the four-day annual event, said Stephen Graham, OTC's associate managing director.

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House Panel Votes to Force More Oil Leases in U.S. Waters

House Panel Votes to Force More Oil Leases in U.S. Waters

Thursday, April 14, 2011
Dow Jones Newswires
by Ryan Tracy

A bill requiring the U.S. to open areas off the Virginia coast and in the Gulf of Mexico to oil and gas exploration cleared a key hurdle in the U.S. House Wednesday. The House Natural Resources Committee voted to approve the leasing measure, paving the way for a vote by the full House next month. Earlier Wednesday, the committee also voted to establish a 60-day maximum for the Interior Department to approve or deny offshore drilling permits. If Interior took longer, the permit would be deemed approved.

The bills are part of an effort by House Republicans to support domestic oil and gas production, which they have stepped up in recent months in the face of rising gasoline prices. Democrats have pushed back, saying that Congress should focus on providing incentives for non-traditional energy sources and reducing energy consumption.

All but two Democrats voted against the bills on offshore leasing. The bills' prospects are less certain in the Senate, where Democrats hold a majority.

One proposal approved Wednesday would override a decision last year from the Obama administration not to open the U.S. Atlantic Coast to offshore drilling. It directs the Interior Department to lease areas off the Virginia coast within one year after the bill becomes law.

The bills would also direct Interior to move forward with three new leases in the Gulf, declaring previous environmental reviews of those areas to be sufficient. The administration has delayed its Gulf leasing plans and is conducting new environmental reviews following the Deepwater Horizon disaster nearly one year ago.

"What we're attempting to do is provide some certainty to those who would give us American-made energy," said Rep. Doc Hastings (R., Wash.), chairman of the Natural Resources Committee, and a main sponsor of the bills.

During debate on the proposals, Rep. Rush Holt (D., N.J.) argued that Interior shouldn't move forward with new leases without a new environmental analysis based on lessons learned from the Deepwater Horizon. He said previous reviews had been "very clearly and woefully flawed." Rep. Doug Lamborn (R., Colo.) countered that further environmental reviews would take place as companies apply for permission to explore and drill new wells. Hastings noted that the legislation approved Wednesday requires Interior to conduct a safety review for each drilling permit. Still, Democrats criticized their counterparts for not taking up a bill that would implement recommendations of a presidential commission that studied last year's oil spill. Congress hasn't yet sent the president a bill in response to the disaster, which began with the explosion on a rig leased by BP on April 20.

A proposal to add safety regulations to the House bills, offered Wednesday by Rep. Ed Markey (D., Mass.), was voted down by the Republican majority. "This amendment would micromanage and dictate thorough safety standards" that should be established by the Interior Department, Lamborn said. The majority also rejected a host of proposals from lawmakers in coastal states designed to restrict exploration in the Pacific and Atlantic Oceans.

The legislation would also extend by one year leases impacted by the Obama administration's moratorium on drilling after the Deepwater Horizon disaster. The provision would apply to wells that weren't producing before April 30. It was added to the bill Wednesday in an amendment offered by Rep. Bill Flores (R., Texas).

Lawmakers briefly considered inserting a provision to require oil and natural gas facilities to use only equipment and materials produced in the U.S, but Rep. John Garamendi (D., Calif.) withdrew the amendment after other lawmakers said it was too inflexible. Some Republicans seemed open to the concept, however, and Garamendi said he might offer a different version at a later date.

Also Wednesday, the committee voted to require Interior to open up more resource-rich areas to exploration as part of its next five-year leasing plan. The full Republican-controlled House is expected vote on the bills next month.

Marcellus Panel Looks for Common Ground at First Meeting

Marcellus Panel Looks for Common Ground at First Meeting

Monday, March 28, 2011
Pittsburgh Post-Gazette
by  Laura Olson

The public comments at the end of Friday's inaugural meeting of the state Marcellus Shale Advisory Commission showed part of the challenge facing that panel during the next four months.

One county commissioner stood up to laud the number of jobs that gas drilling has brought to his community. He was followed by a northeastern resident who said her property value has plummeted because of the surrounding well pads, and another woman citing concerns about water quality.

"I moved up here to be at peace with nature," Wyoming County resident Joanne Fiorito told the panel. "You have now ripped my American dream apart, and I am appalled and outraged."

The 30-member panel has 120 days to assess how the state is managing natural gas drilling, as well as find some policy agreement between those skeptical of the booming business and those benefiting from it.

The group will report back to Gov. Tom Corbett in mid-July on what changes they recommend to balance job growth and environmental protection.

Their first task during the meeting, which lasted for more than four hours, was dividing the topics to be tackled among four work groups -- health, safety and environmental protection; economic and workforce development; infrastructure; and local impacts and emergency response.

Those groups will begin their work shortly, and give an update of their progress at the commission's next meeting on April 27.

A locally assessed impact fee on gas drillers will be part of those talks, said Lt. Gov. Jim Cawley, the commission's chairman. But a statewide severance tax, which the Corbett administration opposes, is "off the table," he added.

Several of the commission members -- who represent state government, local communities, environmental advocates, industry leaders and academia -- noted a need for some form of levy or fee to help local governments with rising costs.

Mr. Cawley said he'd like to see figures on what the drilling industry is costing municipalities and counties in additional road construction, staffing, emergency response calls and other growing demands.

Several on the panel talked about using a "fact-based" process to figure out how to responsibly grow the drilling industry, and to present Pennsylvania as the best place for drilling companies to invest.

"We have to win," said Nicholas Haden, vice president of Reserved Environmental Services, a wastewater treatment facility in New Stanton, Westmoreland County. "The Marcellus Shale is not the only shale play in the world."

Presenters giving a snapshot of the industry's activities relayed data on how much interest the Marcellus, and the state's other shale formations, already have garnered.

Southwestern Pennsylvania is near the forefront of activity, with Washington and Greene among the top five counties for number of wells. Department of Environmental Protection statistics show Washington with 305 wells drilled since 2007 and 179 in Greene, which puts them third and fourth behind Bradford and Tioga.

Those wells, and others in the works, are expected to bring more than 10,000 industry jobs to the state's southwest by 2014, said Tom Murphy, of Penn State's Marcellus Center for Outreach and Research.

But amid the presentations came questions to be discussed in the coming months: How should the state help non-drilling businesses, which are losing workers to higher-paying gas companies and having trouble filling the resulting openings?

And how many hotel rooms and apartment buildings should towns add to accommodate an industry that tends to move money and manpower quickly if markets shift?

Some lessons may be found in looking at the southern shale gas-producing states, said Teri Ooms, of the Institute for Public Policy and Economic Development.

A major complaint in Arkansas, and in some parts of Pennsylvania already, is road damage and congestion, said Ms. Ooms. She said one strategy that helped ease tensions was posting truck routes and advertising when those roads would have heavy traffic.

Other problems and solutions will be the source of much-welcomed debate by the commission and members of the public, said Mr. Cawley.

"We want to hear it from all sectors, because we want to provide a blueprint to Gov. Corbett in the middle of July that truly outlines all of the benefits as well as any potential impacts so that he can make an informed decision," he said.