2290. Australian MP Sets River on Fire, Blames Nearby Fracking

By Australian Broadcasting Corporation, April 23, 2016

An Australian MP is blaming seeping methane from a nearby fracking site for making it possible for him to set Queensland's Condamine River on fire.

Jeremy Buckingham — a Greens party MP for New South Wales — posted a video of the incident to his Facebook page on Friday. As of Saturday afternoon, it had been shared more than 50,000 times.

"Unbelievable! A river on fire. Don't let it burn the boat," he says in the video. "The most incredible thing I've seen. A tragedy in the Murray-Darling Basin."

The Murray-Darling Basin is the largest river system in southeastern Australia and a significant source of fresh water for drinking and agriculture.

Buckingham said the river burned for more than an hour. He believes the nearby coal seam gas (CSG) operations were to blame.

"This area has been drilled with thousands of CSG wells and fracked. This river for kilometres is bubbling with gas and now it's on fire," he said.

"This is the future of Australia and the Murray-Darling Basin if we do not stop the frackers who wants to spread across all states and territories ... this is utterly unacceptable."

The Greens are campaigning to ban fracking in Australia.

Reports of gas seeps in river

There have been reports of methane seeps in the Condamine River— located near Chinchilla in southwest Queensland — since 2012, triggering a series of investigations.

A report by Norwest Corporation, a scientific analysis firm, outlined several scenarios that could be contributing to the bubbling in the river. These included natural events such as drought and the recharging of aquifers after floods.

Human activity such as CSG operations and water bore drilling were the other possible contributing factors.

Australian Greens MP Jeremy Buckingham posted a video of himself lighting Queensland's Condamine River on fire. He blames a nearby fracking site. (Photo courtesy of Max Phillips)

Professor Damian Barrett, the lead researcher into unconventional gas with Australia's Commonwealth Scientific and Industrial Research Organization, has been monitoring the river's gas seeps.

"The isotopic signature is telling us it's coming from coal at that point in the landscape but coal is quite close to the surface and there's a naturally existing small fault line, which cuts the river at that point," he said.

Barrett said research over the past 12 months showed the rate of the gas bubbling in the river was increasing.

Fracking company says 'no risk'

Origin Energy, which operates CSG wells in the district, has also been monitoring the bubbling.

"We're aware of concerns regarding bubbling of the Condamine River, in particular, recent videos demonstrating that this naturally occurring gas is flammable when ignited," a statement from the company said.

"We understand that this can be worrying, however the seeps pose no risk to the environment, or to public safety, providing people show common sense and act responsibly around them.

Origin Energy converts coal seam gas to LNG for export to Asia from Australia. 

"Ongoing research has identified several scenarios that could be contributing to the seeps including the natural geology and faults (formed tens-of-millions of years ago), natural events such as drought and flood cycles as well as some human activity, which includes water bores and coal seam gas operations."

2255. Drilling Is Making Oklahoma as Quake Prone as California

By Michael Wines, The New York Times, March 28, 2016

Californians have lived with the risk of a damaging earthquake for centuries. Now Oklahomans, and some Kansans, face the same threat, federal seismologists said on Monday.

In an assessment released by the United States Geological Survey, experts said the chance of a destructive temblor in the next year is as great in parts of north-central Oklahoma and southern Kansas — where oil-and-gas operations have set off man-made quakes for about five years — as it is in the shakiest parts of quake-prone California.

The warning came in the agency’s map of earthquake risks, a document that for the first time included the prospects for human-caused quakes.

“By including human-induced events, our assessment of earthquake hazards has significantly increased in parts of the U.S.,” Mark Petersen, the chief of the agency’s Natural Seismic Hazard Mapping Project, said in a news release.

Four other states where waste disposal has led to human-induced quakes — Texas, Colorado, New Mexico and Arkansas — face considerably smaller risks of damaging tremors, the agency said. About seven million people live in the areas at risk of a human-induced earthquake, most of them in Oklahoma and Texas.

Over the last 15 years, those states have experienced an explosion in oil and gas production, which releases huge amounts of toxic wastewater. That wastewater is disposed of by re-injecting it into the ground, into rock formations thousands of feet below the surface, increasing the pressure on existing subterranean faults, and causing them to slip and produce tremors.

Along with the economic boom from oil and gas exploration, Oklahoma has experienced a rising number of earthquakes. In an average year, Oklahoma has historically had fewer than two quakes of magnitude 3 or greater — roughly the level at which a tremor can be felt. Kansas has had even fewer such shocks. But last year, Oklahoma recorded 907 quakes at magnitude 3 and above, and Kansas registered 54.

Oklahoma now ranks behind only Alaska in earthquake frequency, followed by California.

Three of the quakes this year, measured at magnitudes of 4.7, 4.8 and 5.1, were among the largest in Oklahoma’s history.

Including Oklahoma and southern Kansas on the map reinforces what the Geological Survey’s scientists have said for some time: The huge number of small, human-caused quakes in the two states may have set the stage for a larger, more destructive one.

Photo

A United States Geological Survey map showing its forecast of damage from earthquakes in 2016.

Credit

U.S. Geological Survey, via Associated Press 

The area of greatest risk, the agency stated, is a swath of rural land along the Oklahoma-Kansas border that has been repeatedly rocked by tremors. Because the area is thinly populated, damage has so far has been limited.

The assessment said that in that area, there is a 5 to 12 percent chance of a level six earthquake on the Mercalli index of intensity, which rates the potential for damage. Level six indicates a strong earthquake that is widely felt, but that does not cause much damage. Level seven can cause moderate damage in ordinary buildings and considerable damage in lesser ones.

But the area of risk also extends through the central part of the state toward Oklahoma City, where the rate of quakes has recently dropped. Experts estimated the one-year risk there at between 5 and 10 percent.

Twenty other sites in the eastern and central United States have also experienced human-induced quakes, the agency said, but the threat of larger quakes in these areas is small, the agency said.

The Geological Survey emphasized that earthquake prediction was an uncertain science, and that some studies suggested that the maximum magnitude of human-induced quakes was less than that of natural ones.

Much of the region’s boom in oil and gas production comes from wells that employ hydraulic fracturing of shale deep in the earth, a process commonly called fracking. But the scientists said those wells likely are responsible for only a tiny share of quakes; fracking-related earthquakes typically are too small to be felt.

In both Oklahoma and Kansas, some of the tremors over the last five years have rivaled the largest in their histories.

This year, Oklahoma has recorded more than 160 quakes with a magnitude of 3 or more. But the pace appears to have slowed after the state’s oil and gas regulator, the Oklahoma Corporation Commission, effectively imposed steep reductions in underground waste disposal in February and March.

Earthquake scientists have nevertheless warned that the risk of a larger quake does not necessarily drop in lock step with a decline in smaller ones. The forces that have been loosed underground, they say, can take years to sort themselves out.

The Geological Survey report also said the chances of a damaging natural earthquake had risen in some parts of the United States. Scientists noted an increase in the number of small tremors along the New Madrid fault, near Memphis, which in the early 1800s was the site of one of the nation’s largest earthquakes. The increase in tremors there has slightly raised the prospects of a larger quake, the scientists said.

2113. Fracking Expands in Latin America, Threatening to Contaminate World's Third-Largest Aquifer

By Santiago Navarroand Renata Bessi, Truthout, December 6, 2015

Schlumberger employees work during an oil fracking process in Vaca Muerta in the Patagonian province of Neuquen, Argentina, September 20, 2013. Photo: Anibal Adrian Greco / The New York Times.

Hydraulic fracturing, or fracking - a method whereby hydrocarbons trapped within rocks are extracted - is expanding rapidly in Latin America. Fracking emits benzene, toluene, ethylbenzene and xylene, which are considered by the World Health Organization to be carcinogenic and responsible for blood disorders and other immunological effects. Despite these adverse health effects, however, reserves have already been mapped out in Bolivia, Colombia, Venezuela, Paraguay, Uruguay, Chile, Argentina, Brazil and Mexico.

In Mexico, recently passed energy reform legislation promotes fracking as a means of extracting shale gas - and with the reform, the government has opened the oil industry up to the private sector. More than 1,000 wells using the technique are currently in operation in at least 11 of Mexico's 32 states. These fracking efforts are largely being carried out by North American companies such as Halliburton, Schlumberger and Baker Hughes, among others.

"I didn't know anything about oil, but after our water started to get contaminated, we found out that more than 240 wells in our region were using that thing they call fracking," Mariana Rodríguez, from the community of Papantla, Veracruz, told Truthout. "Now all our water sources have become contaminated.”

According to Francisco Cravioto, a researcher from the Alianza Mexicana Contra el Fracking (Mexican Alliance Against Fracking) and a member of the Research and Analysis Centre of the Mexican civil organization FUNDAR, most of the communities facing contamination have very little knowledge about fracking. "The scale of the effects only becomes clear when they begin to experience them directly, as in the case of the northern region of Veracruz in Mexico, where at least 240 fracking wells are already in operation," Cravioto said.

Argentina, meanwhile, is considered the Latin American fracking capital because of the wells in the Neuquén Basin, a vast oil-producing region that covers the Neuquén Province and is home to the Vaca Muerta rock formation. This year in Argentina, fracking was used to drill into more than 1,000 shale gas reserves of compact sand and tight oil in slate or shale. According to International Energy Agency figures published in 2015, only the United States, Canada, and more recently Argentina and China produce large volumes of shale gas; the latter two countries are spearheading the development of shale extraction.

Polluted Waterways

Fracking takes a heavy toll on the environment wherever it is used. It produces large volumes of toxic and radioactive waste and dangerous air pollutants, and destabilizes the climate and local communities.

One of the greatest current fracking threats in South America is located in the Entre Ríos region of Argentina and the neighboring area of Uruguay in the Paraná Chaco, where the extraction of shale oil and shale gas is planned. According to Roberto Orchandio, an engineer and former oil industry employee in the United States and Argentina, contaminated water poses a serious danger. "In this region, the Guaraní Aquifer can be found, which is the third-largest in the world and holds 20 percent of South America's water, spanning an area that includes southern Brazil and part of Paraguay, Argentina and Uruguay," Orchandio told Truthout. "So, we are concerned that if they have to drill into the aquifer, it will be contaminated and therefore destroyed. We have to weigh up if this is worthwhile.”

"Contaminated water is a huge problem. In some places it will be a disaster, like in the north of Mexico where there isn't any water and wasting it is illogical, because they are places where people won't be able to live," Orchandio said. "Every new well has a water leak rate of at least 6 percent, caused by a combination of poorly constructed foundations, pipeline accidents and corrosion.”

According to Argentina's Observatorio Petrolero Sur, an organization that advocates for sustainable energy consumption and production, less than half of the water used is recovered. This contaminated residual water is placed in water tanks, where exposure to the open air causes the chemical compounds to evaporate. The contaminated water is sometimes reinjected into other wells.

Observatorio Petrolero Sur has documented that within the first days or weeks of fracking in a region, a significant quantity of the water used in fracking returns to the surface, after being injected into rocks under great pressure and causing fracturing. 

Orchandio points out that large volumes of methane are also released. "Between 0.6 and 3.2 percent of an unconventional well's total production - be that one barrel or millions of barrels - is emitted as methane gas during the extraction process, along with the flowback fluid (the water mixed with the chemicals)," he told Truthout. "Methane has a greenhouse gas effect that is 25 times more potent than that of carbon dioxide.”

Cravioto describes the exploitation of the land for fracking as "territorial dispossession," noting its disproportionate impact on Latin America's Indigenous population. "In Mexico, Indigenous peoples and campesinos [peasant farmers] have been hardest hit," he said. "Their ancestral lands are being destroyed, those lands where their history, traditions and knowledge are stored. Entire ecosystems, and superficial and subterranean aquifers are being destroyed.”

Orchandio expressed fear that Latin America may follow in the footsteps of the United States, where fracking has rapidly spread, impacting human and environmental health. In the US, lawmakers have often worked to accommodate the plans of corporations - even in the face of considerable resistance by their constituents.

"I'm terrified by the thought that they might be able to do the same thing in Argentina that they did in Texas, where they banned fracking and then some time later banned the banning of fracking," Orchandio said. "No one will be able to live in places where they decide to extract these hydrocarbons because everything they leave behind is dead, and the same is true for Mexico or Brazil.”

Energy Independence

According to Orchandio, fracking was previously eschewed in Argentina due to its high costs and the environmental impacts. "Since the US made incursions into unconventional wells, in the year 2010 alone, there were a total of 2.5 million fracking wells across the world. Its irruption began in the US and centered on three states: Pennsylvania, Texas and in particular North Dakota, which is its greatest exponent and has become the American Saudi Arabia," he said.

Extracting unconventional oil is much more costly than extracting conventional crude oil, said economist Javier Martinez, and the recent fall in oil prices caused by increased supply is making it less profitable. "The allocation of titles - future oil purchase papers - is creating a speculative bubble that is going to burst," he told Truthout.

Orchandio, who is part of an Argentinian group that produced the book 20 Myths and Truths About Fracking, said that unconventional hydrocarbons only offer a temporary "fix" for waning fossil fuel supplies. He believes that wells have a life span of approximately six years, and that in the first year of operation up to 70 percent of their capacity can be extracted. "The productivity of these wells is too low. To maintain a production quota, you have to drill wells like crazy," he said. "To name one example, in North Dakota, they have to drill 1,500 wells per year. It's an abomination. In the US, all of the richest areas, the large pockets of hydrocarbons known as sweet spots, have already been found and fracked, and there aren't any more left.”

Orchandio added that hydrocarbon reserves are rapidly dwindling on a global scale as well. "The reserves shrink by between 4 percent and 5 percent per year, so that means they fall by approximately 12 percent in three years; this 12 percent or 13 percent of global production is the equivalent to what Saudi Arabia produces," he said. "This tells us that every three years we have to put a new Saudi Arabia into production, but there isn't another one. They are advancing rapidly to exploit more unconventional wells in other countries. A collapse of the technology matrix is approaching, and it is a national security issue for the US.”

Espionage and the Opening of New Hydrocarbon Wells

Numerous exposés in recent years have suggested that US-orchestrated espionage and actions taken in the name of "national security" have supported the spread of fracking across the globe. The documents leaked by the former National Security Agency (NSA) contractor Edward Snowden in 2013, for example, confirmed that the NSA spied on the internal communications of Pemex in Mexico and Petrobras in Brazil, as well as other state-owned energy giants, seemingly with the aim of gaining leverage over their decision-making.

"With regards to the NSA espionage, it does not seem to be a simple operation to steal industrial secrets," said Dr. John Saxe-Fernández, author of the book Energy in Mexico: The Situation and the Alternatives. "It is espionage in order to identify the weak links in the chain of command, in order to know where to penetrate, who to negotiate with, who to promote, who to remove from the economic and political process.”

Meanwhile, this year the investigative news site DeSmogBlog revealed that former Secretary of State Hillary Clinton helped the Mexican government to weave a web of pretense in order to open up the energy sector - primarily involving conventional oil and gas, which are currently being extracted through fracking - to large multinational companies with the energy reform that was consolidated in 2014. According to the report, the Mexican government acquiesced to the demands of ExxonMobil, Chevron, BP, the American Petroleum Institute and independent oil producers in the United States, among others, agreeing to let these energy firms capture the first nonconventional hydrocarbon wells that are currently being put up for tender in Mexico. Before the aforementioned energy reform, the sector was in state hands, with no possibility of opening it up to the private sector.

"The energy reform opened the door for national and multinational private companies," Cravioto said.

In Argentina, meanwhile, the country's leading oil-and-gas-producing company, YPF, has signed a secret agreement with Chevron to explore and exploit unconventional resources in the Vaca Muerta formation, with Chevron setting the rules. Some time later the executive branch gave its approval to this agreement through "Decree 929/13," which stirred debate and opposition among citizens due to the fact that YPF was recently nationalized and therefore its status as a public body means that it cannot hold secret negotiations.

After the agreement was signed in 2013, Argentinian Sen. Rubén Giustiniani asked to be given access to the complete text in order to divulge it to the public, Giustiniani claims. However, the Argentinian authorities turned down his request. Giustiniani was challenging the supposed existence of "secret clauses in the contract," including a hypothetical "commitment that forces the country to hand over an area that is the third-richest in unconventional oil and gas, for more than 35 years," and a "clause that ensures the payment of bonuses in perpetuity, even if Chevron pulls out of the deal.”

"The multinational companies that want to invest in Argentina seek guarantees for the price of extraction, and changes to legislation that are required to guarantee their investments," Orchandio said. "We don't know what direction the unconventional oil industry is heading in Argentina. Investors claim that they will come to Argentina only if the economic conditions improve; basically, they want us to pay them to take away the oil." On November 10, 2015, three years after Giustiniani's denunciation, Argentina's Supreme Court ordered that the clauses of the YPF-Chevron deal be made public.

Growing Resistance to Fracking in Latin America

In Mexico, Brazil and Argentina, opposition to fracking is growing.

In Brazil, in response to the tendering of blocks for the exploration and exploitation of shale over an area of 168,348 square kilometers, organizations, researchers and activists who belong to the No Fracking Brazil Coalition (Coesus) are keeping up constant protests and actions. In October 2015, in Paraná, Bahia, Minas Gerais, Mato Grosso, Acre and the Federal District, there were protests outside the offices of the fossil fuel companies that will participate in the Brazilian government's tendering of new blocks for fracking. The Brazilian protesters were joined by demonstrators in 28 countries, including Portugal, England and Spain, who demonstrated outside Brazilian embassies and consulates.

In Mexico, the Mexican Alliance Against Fracking has carried out a range of activities under the campaign banner of "Say no to fracking in Mexico!" One such activity was the production of a recent educational video, which included the participation of internationally renowned artists and provided information about what fracking entails. The alliance has been joined by Indigenous communities and campesinos who have protested and blocked roads in order to demand respect from the government for their ancestral lands.

In Argentina, several organizations have joined forces with the Movimiento Artístico-Cultural Contra el Fracking (Cultural and Artistic Movement Against Fracking) to publish a statement in which they appeal to "the precautionary principle" when it comes to fracking, stating, "Given the impacts it has on human health and the environment, our country must halt all ventures of this type, through a moratorium, i.e. through a suspension.”

The protests have continued to grow as more residents come to agree with Cravioto's assessment that the spread of fracking is a "war against humanity."

"We have to stop thinking that the market must solve our problems," Cravioto said. "We have to turn around and see those campesinos and Indigenous people who have shown us that another way of life exists, a way of life that is not about competition and destroying the environment in order to produce goods.”

1843. Technological Change and Oil Prices: The Case of Shale Oil

By Clifford Cross, The New York Times, May 11, 2015

Oil wells being tested at a Statoil site near Runge, Tex. Statoil, a Norwegian company, is experimenting in the Eagle Ford shale field with a number of new drilling tools and techniques.Photo: Michael Stravato for The New York Times

KENEDY, Tex. — These are lean days in the South Texas oil patch, with once-bustling roads and hotels now empty as the price of oil has plunged and rig after rig sits idle.

Still, production has barely declined, a testament to the rapid gains that oil producers are making in coaxing ever more oil from older wells and the few new wells they are still drilling — and doing both while investing far less money.

The Norwegian oil giant Statoil, for instance, is experimenting here in the Eagle Ford shale field with a host of new drilling tools and techniques.

It is trying out different grades of sand to blast along with water and chemicals to better loosen the hard rock deep underground and increase a well’s production, and varying the depths of wells to squeeze out even more oil. It is using new well chokes that technicians can operate remotely from a computer or even a smartphone to quickly adjust flows to maximize production without overtaxing pipelines.

“There’s a proverb in Norway that says necessity teaches the naked woman how to knit,” said Bjorn Otto Sverdrup, a Statoil vice president, as he and another executive of the Norwegian oil company toured the Eagle Ford shale field the other day.

The knitting is progressing. Even as the company cut the number of rigs it runs here from three to two since last year, it has managed to lift production by one-third, a feat that would have been unimaginable a few years ago.

It has cut the average cost of drilling from $4.5 million to $3.5 million a well, in part by reducing the time it takes to drill from an average of 21 days to 17 through better planning and laying off slower crews.

Statoil’s example is just one of many for an industry reeling from the collapse of oil prices since last summer. Companies have laid off thousands of workers, and some are having trouble paying their debts. They have decommissioned more than half of the country’s oil rig fleet. Companies like Anadarko Petroleum and EOG Resources have drilled hundreds of wells without completing them, saving their expenditures on hydraulic fracturing until the price of oil recovers.

But a majority of the major companies are managing to survive by increasingly using techniques traditionally more common to manufacturing plants than to oil fields to achieve economies of scale.

In some shale fields where companies typically drill up to eight wells on each production pad, companies are no longer drilling one well at a time. Using rigs that can move on tracks or legs, they are drilling and completing several wells at a time, slashing the time it takes to drill each well.

The result has already been a slower decline in domestic shale oil production than many experts had expected, and the promise of a spike in output if the global market price continues to rise as it has in recent weeks.

“We can’t control the commodity prices, but we can control the efficiency of our wells,” said Ben Mathis, Statoil’s Eagle Ford operations manager. “The industry has taken this as a wake-up call to get more efficient or get out.”

Using new fiber-optic sensors thousands of feet below the ground, operators are receiving streams of data allowing them to analyze rocks in real time to make quick decisions.

The sensors can determine how far a fracturing job is penetrating hard rocks to plan the spacing of wells more accurately. That way, producers are assured that one well is not draining oil from another and that no significant section of the shale is left untapped.

And by keeping track of temperatures, pressure and vibration on equipment that is out of sight, sensors and advanced software can predict when equipment needs servicing before it breaks down.

“You are more efficient because you are forced to be more innovative,” said Patrick Pouyanné, chief executive of Total, the French oil and gas giant. Mr. Pouyanné estimated that the break-even price for operating in 75 percent of the shale oil fields a year ago was $75 a barrel, but that is now down to roughly $60 because of innovation and lower service company costs. He predicted that the break-even cost could go as low as $50 before long.

Companies like BP, Chevron and Devon Energy have turned to GE Oil & Gas to help improve exploration and production controls to save power and keep equipment running longer and more efficiently.

The company is deploying meters that can determine how much water is mixed with gas and oil before production even begins. A harder pump rate brings up more water and oil, but water is expensive to treat at the surface and reinject in disposal wells. When oil prices are low, the operator can decide not to produce wells with high water content but save them for completion when prices recover.

Developing new variable-speed controls and algorithms that determine the flow of wells, GE Oil & Gas has figured out ways to turn on and off pumps that formerly operated 24 hours a day, cutting fuel consumption by up to 20 percent. With lower pump use, repair and maintenance costs have fallen enough to bring down the cost of production by two or three dollars a barrel.

In the case of Whiting Petroleum’s Bakken shale holdings in North Dakota, new speed controls on its well pumps reduced equipment repair downtime by 48 percent and helped increase the productivity of its wells by 28 percent in recent months.

“Our industry is very slow to adapt to change, so these shake-ups can be good for challenging operators to find better ways to do things,” said Ron Holsey, general manager for automatization and optimization for GE Oil & Gas.

One of GE Oil & Gas’s most active partners in cutting costs is Statoil. Using a concept the company calls “the perfect well,” Statoil collects data from its own wells and those of partners and competitors and then holds seminars for its employees to determine which drilling and fracking techniques work best.

Statoil is testing new ways to drill and complete wells more efficiently, including replacing diesel for power with natural gas coming from the same field. It is also testing ways to reduce shipments of sand and water in hydraulic fracturing that break and keep open fissures in shale rocks so oil can ooze out. One way is to use bubbly liquefied carbon dioxide to replace some of the water in hydraulic fracturing, a technique Statoil will test this summer in North Dakota.

“These things we are working on are everlasting,” said Bill Maloney, the Statoil executive vice president in charge of development and production in North America, “because the perfect well doesn’t go away when the price of oil goes back up.”