The Texas Railroad Commission recently adopted what it calls one of the nation’s most comprehensive chemical disclosure rules for hydraulic fracturing fluids. The rule will require Texas oil and gas operators to disclose on a website chemical ingredients and water volumes used to hydraulically fracture wells in Texas. The rule applies to wells that receive an initial drilling permit from the RRC on or after Feb. 1, 2012.
Before the rule passed, Texas operators conducting hydraulic fracturing were voluntarily entering chemical data into the website (www.fracfocus.org) for about half of all wells in Texas undergoing hydraulic fracturing.
“Once again the Railroad Commission is taking a lead in helping the public understand the safety of hydraulic fracturing with this rule’s adoption,” RRC Chairman Elizabeth Ames Jones said.
Commissioner David Porter added, “Hydraulic fracturing has been occurring safely in Texas for 60 years, and this new rule provides a balance between protecting legitimate business information and the public’s right to know.”
A supplier, service company, or operator is not required to disclose trade secret information unless the attorney general or court determines the information is not entitled to trade secret protection.
Global energy companies plan to spend a record $598 billion to find and produce oil and natural gas in 2012, according to analysts from Barclays Capital after a survey of about 350 companies. That’s an increase of 12 percent over 2011. Exxon Mobil Corp. remains the biggest spender at more than $30 billion, an increase of 5 percent.
Spending for exploration and production in North America will increase 8 percent in 2012 after 31 percent growth in 2011, Barclays said. The analysts told the Houston Chronicle that lack of availability of rigs and field equipment is slowing expansion.
Enterprise Products Partners LP, the largest U.S. pipeline partnership by market value, says it will build a 1,230-mile line to ship ethane from Pennsylvania to petrochemical plants on the Gulf Coast, including Texas. The ATEX Express pipeline will have the capacity to transport as much as 190,000 barrels a day, the Houston-based company said.
Chemical companies, including Dow Chemical Co., are using more ethane and other natural-gas liquids from shale formations as a way to replace crude oil-based feedstocks such as naphtha. Enterprise estimates Gulf Coast petrochemical demand for ethane is about 955,000 barrels a day. Ethane is a feedstock for producing ethylene, the main ingredient in plastics.
Enterprise’s Mont Belvieu complex in Texas is the biggest storage and processing facility for ethane and other gas liquids on the Gulf Coast, according to Darren Horowitz, an analyst for Raymond James and Associates in Houston.
If the pipeline reaches its full capacity, Bloomberg estimates it may generate more than $400 million a year in revenue. The pipeline is expected to begin service in the first quarter of 2014.
Operators in oil and natural gas industries are finding that environmentally friendly technology can boost their profits, and Rich Haut, senior research scientist at the Houston Advanced Research Center, attributes the focus on “green completions” to economics, government regulations, and the desire “to be good neighbors.”
“Methane is a product,” he told the Midland Reporter-Telegram, “and that means dollars in an operator’s pocket. The more you can capture, the more profitable you’ll be.”
Chip Minty of Devon Energy added, “It’s always advantageous to the company to prevent the loss of product. If you flare, you lose the product, and you’re not generating revenues.”
Haut said shortages in the workforce also encourage more efficient operations. “The employee population is shrinking,” he said. “With all the plays going on around the country, it’s hard to find quality people, so efficiency is required.”
The HARC is a non-profit, non-partisan organization based in The Woodlands that conducts collaborative research projects of social science, natural science, and engineering. It was founded by Texas businessman, philanthropist, and real estate developer George P. Mitchell.
The Bureau of Land Management in the U.S. Department of Interior recently announced the appointment of a new state director for New Mexico.
Jesse Juen, New Mexico’s associate state director since 2003, has been promoted to state director of more than 13.4 million acres of public lands and 26 million acres of federal oil, natural gas, and minerals where about 855 employees work in New Mexico, Texas, Oklahoma, and Kansas. He replaces Linda Rundell, who recently retired.
A native of El Paso, Juen began his career as a wildlife biological aid with the U.S. Forest Service before joining the Roswell office of the BLM as a wildlife biologist. He also served as deputy assistant director for the BLM National Landscape Conservation System office in Washington, D.C. Juen received a B.S. degree from Texas A&M University and a master’s degree from Texas Tech University.
FROM THE RAILROAD COMMISSION OF TEXAS
The Texas average rig count as of Dec. 16, 2011, was 916, representing about 47 percent of all active land rigs in the U.S. In the last 12 months, total Texas reported production was 381 million barrels of oil and 7.1 trillion cubic feet of natural gas. The commission’s estimated final production for October 2011 is 33,773,405 barrels of crude oil and 509,884,053 Mcf (thousand cubic feet) of gas well gas.
The commission derives final production numbers by multiplying the preliminary October 2011 production totals of 30,894,077 barrels of crude oil and 457,911,139 Mcf of gas well gas by a production adjustment factor of 1.0932 for crude oil and 1.1135 for gas well gas. (These production totals do not include casinghead gas or condensate.)
Texas natural gas storage reported to the RRC for November 2011 was 443,491,626 Mcf compared to 474,188,896 Mcf in November 2010. The December 2011 gas storage estimate is 422,268,502 Mcf.
The RRC Oil and Gas Division set initial January 2012 natural gas production allowables for prorated fields in the state to meet market demand of 10,543,082 Mcf (thousand cubic feet). In setting the initial January 2012 allowables, the commission used historical production figures from previous months and producers’ demand forecasts for the coming month, then adjusted the figures based on well capability. These initial allowables will be adjusted after actual production for January 2012 is reported.
FROM THE U.S. ENERGY INFORMATION ADMINISTRATION
The EIA expects the price of West Texas Intermediate (WTI) crude oil to average about $100 per barrel in 2012, which is $5 per barrel higher than the average price last year. For 2013, EIA expects WTI prices to continue to rise, reaching $106 per barrel in the fourth quarter of next year. EIA’s forecast assumes that U.S. real gross domestic product (GDP) grows by 1.8 percent in 2012 and 2.5 percent in 2013, while world real GDP (weighted by oil consumption) grows by 2.9 percent in 2012 and 3.8 percent in 2013.
The forecast of average household heating expenditures for all heating fuels has been lowered from the first forecast for the current winter published in October 2011 primarily as a result of the warm first half of this heating season. Average household heating oil expenditures are now expected to increase by 4 percent this winter heating season (Oct. 1 to March 31) compared with last winter. In contrast, natural gas (by 7 percent) and propane (by 1 percent) expenditures are projected to decline, and electricity expenditures are 2 percent lower than last winter.
The EIA expects regular-grade motor gasoline retail prices to average $3.48 per gallon in 2012, which is 4 cents per gallon lower than last year, and $3.55 per gallon in 2013. During the April through September peak driving season each year, prices are forecast to average about 5 cents per gallon higher than the annual average. There is regional variation in the forecast, with average expected prices on the West Coast about 25 cents per gallon above the national average during the April through September period.
Natural gas working inventories continue to set record highs and ended December 2011 at an estimated 3.5 trillion cubic feet (Tcf), about 12 percent above the same time last year. EIA’s average 2012 Henry Hub natural gas spot price forecast is $3.53 per million British thermal units (MMBtu), a decline of almost $0.50 per MMBtu from the 2011 average spot price. EIA expects that Henry Hub spot prices will average $4.14 per MMBtu in 2013.
—contributed by Garner Roberts