Friday, August 19, 2011

Baker Hughes Rig Count For PA Drops 5 in One Week: Here's My Prediction

In Pennsylvania, the Baker Hughes' count for the week ending today, Friday, August 19, was 111 active rotary rigs. 

The previous week's count was 116.  So that's a relatively abrupt drop of 4 percent within just one week.

In fact, 116 is now likely to stand for awhile as the PA state record — reached during three separate weeks spread over the last two months.

It's 4 p.m. now.  I'm going on record as predicting that somebody within the northeastern media will make a story out of this, relatively soon.  This will be based either on the more conservative Baker Hughes count, or on one of the competing counts, which tend to include all rigs, whether they're actually drilling or not. 

The story will go something like this:  The rig count is falling!  The rig count is falling!  The New York Times was right!  Shale gas must be a Ponzi scheme!  The bubble's already popping!

(Spoken like somebody who has never lived through an oil and gas downturn — which come around as often as cops at the donut shop.)


There's a lot of possible explanations for what's really going on, starting with the theory that many are moving to oil work, which is paying better.  But I don't know if that'll get much coverage.

I have noticed on numerous occasions over the last year — most recently here — that nobody in the northeastern media has ever said boo directly about Pennsylvania's rig count hot streak — which has run even or higher, virtually without exception, for every month on average over the last 30 months, since January 2009. 

For some reason, that's not a story.

But now the rig count is headed lower. 

That's a story. 

(I know — I don't get it, either.)

Since this latest mini-crash, we've seen natgas slipping below $4 MMBTU.

I, for one, don't think it makes any sense to sell any more of the stuff at that price level. 

I burn the stuff at home. 

And this is my business. 

But I do believe — at this point — industry should ease off. 

Drill less.  Frack less.  Even choke down the valves on existing wells.

In fact, I believe that environmentalists, conservationists, and people who are truly interested in the long-term American public interest should demand that government find ways to make this happen.

We need, like, a government-sanctioned OPEC for shale gas.

Tuesday, August 9, 2011

NYS DEC Investigation Rejects
Big Flats Water Claims vs. Anschutz

Memo From Linda Collart of NYS DEC Minerals Division Region 8 January 31, 2011

The Fall 2010 well water troubles experienced by Big Flats, NY, homeowners were more of a natural, pre-existing, and seasonal phenomenon — rather than having anything to do with gas drilling, experts from the NYS DEC ultimately concluded in January 2011.

That's the final official word, as spelled out in a five-page memo, which is now seeing the light of day due to a lawsuit organized by plaintiffs' attorneys out of New York City.  The case pits nine Big Flats-area homeowners against the privately held Anschutz Energy Corporation of Denver, CO, and two sub-contractors.  The DEC had previously given a skeptical, but more reserved, assessment of the situation in a November 2010 "fact sheet" — which I just re-loaded here.  

Known formally as Baker et al vs. Anschutz et al, the case is now starting to collect some momentum in U.S. District Court, Western District of New York, Rochester.  It was originally filed in the State Supreme Court sitting in Chemung County, but lawyers for Anschutz must have soon thereafter got it bumped up into federal court on some kind of legal technicality.

Partly due to some outright factual errors and to some subtle textual misdirection in the original press release from law firm
Napoli Bern Ripka, February 2011, the conflict has been widely misreported as having to do with shale gas and fracking.  In fact, it actually involves neither.  Anschutz's drilling targeted Trenton-Black River, a 10,000-foot-deep layer of limestone which has been most profitably explored in New York using horizontal drilling, but which does not require high-volume hydraulic fracturing to coax free the natgas (if there's any found).  Full-scale operations for shale gas remain frozen under a now-three-year-old ban in NY, at least until early 2012, and the necessary high-volume technology has not yet ever been deployed by industry within the former Empire State.

The Big Flats homeowners' law firm is likely to be correct in asserting this is the "first claim" in New York State alleging domestic water contamination due to oil and gas exploration activity.  But it remains to be seen whether the case is actually intended to go someplace, or whether it's mainly intended to drum up better future business for Napoli Bern.

So far, the file looks like quite a bit of sharp skepticism from technicians, scientists, and officialdom, overlaid with much legal jockeying.  Lawyers for one defendant, Conrad Geoscience Corporation, are asking that their client be cut loose — since all it did was act as an environmental consultant in investigating the water complaints from certain homeowners.  Lawyers for the homeowners want to send the case back to Chemung County.  And lawyers for Anschutz were pressing for fast-track discovery, arguing that there's not enough there there to warrant much long, drawn-out litigation.  The judge remains due to decide a couple preliminary issues after a hearing July 7, which appears to have drawn no media notice.

Another interesting document lurking in the file was a lab report on a methane matching test [paid for by Chemung County because the DEC had no funds available!].  It was explained in a cover letter to at least one concerned homeowner by Chemung County Executive Thomas J. Santulli.  Though it's a little confusing, the lab couldn't make any isotopic fingerprint match between the methane found in two domestic water wells, and the methane coming from Anschutz's Dow #2, Santulli told them.  Here's what the whole thing looks like:

Big Flats High Precision Isotopic Analysis

Monday, August 8, 2011

Cabot Posts Lab Tests, Accusing Dimock Activists of Lying About Dirty Water Props

[Original post Aug. 5.  Update record at end.]  Lab test results of water drawn from two of the better known, now-virtually-full-time anti-drilling activists of Dimock, PA — Victoria Switzer, and Craig and Julie Saunter — were posted online Aug. 3 by the Cabot Oil and Gas Corporation.

Both reports feature nine pages of line-by-line results.  Both are from samples taken
from raw, untreated water in November 2010.  And both show the water passing all government standards.  Cabot's starting page for downloading all this technical data is here.

All this has to do with an event originating around New Year's Day, 2009, when a number of Dimock water wells became suddenly murky and infused with methane.  PA regulators later concluded that methane had migrated from shallower-than-Marcellus formations, up to the level of the domestic well water aquifer — along the bedrock-adjoining exterior of unsealed, sub-par, concrete casing work done on nearby natgas wells owned by Cabot.  Cabot has disagreed.


But what's triggered this latest?


Cabot went public with the lab results the same day as a very different sort of persuasive evidence was briefly splashed on a roadside billboard:  A ginormous picture of a pitcher of muddy water, reputedly from the Sautner's supply, surrounded by the ominous-sounding names of a bunch of chemicals — and the claim that the water remains unfixed after three years.

Though it's a PA dispute, the
dirty water billboard was paid for by NY-based anti-frack group, Catskill Citizens for Safe Energy, and unveiled in a made-for-media happening Aug. 3, along Route 29 — which runs between the Susquehanna County Seat of Montrose and the much more rustic Dimock Township.

One of the papers from Wilkes-Barre, PA was there, as was one of the Binghamton TV stations.  Didn't see anything out of Gannett, which is kind of surprising.

[The Binghamton TV report is interesting in that it mentions having received from Cabot copies of the same water test results the E&P company has now publicly posted on the web — but that it didn't have the time to interpret what they meant!  I love these guys!]

Cabot spokesman George Stark — who was actually physically on hand, during the activists' billboard opening — told the newspaper this: 
"This billboard represents a falsehood.  Test results and science show that the water is clean and meets Safe Drinking Water standards.  We continue to ask for others to prove the water is contaminated when we are able to prove otherwise."

Interestingly enough — as recounted by the same Binghamton TV station on Aug. 4 — the billboard was pasted over the very next day, following a phone call from the landlord of the land upon which the billboard company tenant had its sign — P.J.'s Restaurant and Bar.  The tavern keeper has apparently been making a decent income these days — tending to hungry, thirsty gas industry workers, or anybody else in the area that has some money to spend, downstream of the industry's significant economic impact.

One additional potential piece of cheap irony, which would have to be further researched:  I wonder if the billboard company involved, Park Outdoor, is a distant relative of Park Communications, the media empire of Roy H. Park, Sr., whose fortune now largely rests with the Ithaca-based non-profit Park Foundation — which has been repeatedly shown as one of the primary financiers of the Northeast's anti-drilling movement.

Another relevant and timely tie-in:  Two YouTube videos featuring yet another of the affected Dimock, PA homeowners, Loren Salsman, were posted July 25 by the Marcellus branch office of the industry funded group, Energy in Depth.  Salsman provides a number of key pieces of current information that, to my knowledge, have been completely overlooked during the continuing media stampede over this issue.

In the first video, Salsman explains how his Cabot-supplied water treatment system works; then draws a sample of his raw, untreated water (which does, in fact, have methane in it); and then invites two EID writers to drink up — which they do.  Salsman is of the belief that the methane in his untreated water has now returned to the area's previously existing background levels, an assertion which cannot ever be proven one way or the other — because Cabot unaccountably never tested area water wells for methane, prior to drilling.  (After treatment, of course, Salsman's water is now free of methane.)

In the second video, Salsman explains more about how the 18 families affected by methane migration issues are today broken into two camps — 11, such as Switzer and the Saunters, who remain upset, pursuing private litigation, and holding up jugs of dirty water; and 7, including him, who have accepted a settlement negotiated by the PA DEP, and are basically okay with the situation.  In a comment to this blog (see below), Salsman clarifies he got to this point without having ever signed onto the private litigation.


So what's true?  Test results from an independent lab?  Or a picture of a jug of dirty water collected by activists? 

[Update Aug. 8:  I've made a number of changes above in an effort to accommodate comments coming into my blog from people much closer to the situation than me, including a note from Loren Salsman.  I'm also starting to view the Showdown Under the Billboard, a week later, as showing signs of having been a not-fully-scripted confrontation, kind of like a minor version of the Boston Massacre.  In that category of told and re-told news events, it is ripe for the forces of propagandized folklore to take over the re-telling, the reinterpreting, and the all-important revision.  There are just too many layers of detail and spin where journalism is simply not up to the task.  That being the case, below are links to some later-noticed videos — which at least have the advantage of being primary records of what happened that day.]

Bill Kelley, owner of P.J.'s Restaurant and Bar, and the land upon which the billboard rented space, telling his perspective on the shale gas industry, and on why he was then in the process of trying to get the activists' billboard taken down.

Cabot spokesman Stark, talking to the media — and at the end answering an interruption from an activist, alleging that all the chemicals listed on the sign were found in the Sautner's water by Duke University.

Unnamed resident interviewed by Binghamton TV — quietly attempting to give a pro-drilling perspective, but pretty hard to hear with all the others talking loudly in the background.

Wednesday, August 3, 2011

Recent Shale Gas Non News

I've noticed these news items recently.  But media professionals in the northeastern U.S. have disagreed with me, making editorial decisions to keep this information from their respective audiences.

I have a pet theory about this: 
Modern media — always desperate for attention — have evolved themselves into an over-specialized dead end.  They've got so many rules.  The biggest rule is this:  Any prospective story — in order to be recognized as news, and to win the flash and sizzle of the front page, and pickup across the land — must supply three items:  an appealing victim, a blameworthy culprit, and some sort of easily understood dramatic conflict or injustice presumably running between the two of them.

Openly violating the tenets of journalism, it turns out these stories don't have to be true, or real, or proveable; they must only seem
believeable.  And, yes, believeableness is as much a function of what an audience wants to believe, as it is the skill of the teller, or the enormity of the facts.  So left-leaning outlets have their favorite sorts of perceived injustices:  Big American Oil Greedily Manipulates Prices, Screwing Innocent Family Vacationers.  And right-leaning outlets have their favorites:  Welfare Queens and Their Blood-Sucking Trial Lawyers Work the System, Screwing Innocent Hard-Working Taxpayers.

These rules are
a lot like the formulas which have commercially evolved so as to dictate the dramatic pattern of plays, or novels, or sit-coms, or psychological thrillers:  Must have beginning, a middle, and an end (Shakespeare).  Must feature a main character you either like or you don't, and that person must want something (Keillor).  Tell me a story (Hewitt).

It's not news otherwise.  Not relevant.  Not important.  Not interesting.  That's become the rule.


It's true that lots of relevant, important, interesting stuff goes on in the world which doesn't quite fit this familiar media narrative.  But — if you can't cobble together those three dramatically clashing elements — well, then, I'm sorry, it's just not a news story.

Among ordinary readers, this does, in fact, lead to a shockingly biased understanding of Actual Reality.  But what are you gonna do?

Here's all I can do:  Keep a close focus on the issue of shale gas in the northeastern U.S.'s Marcellus and Utica zones.  And, by way of protest, outline some relevant, important, interesting things which are just not news:


• Known as of August 2 from specialized case-monitoring by Bloomberg News in NYC and reported here:  NY Attorney General Eric Schneiderman has been given a fairly stiff reply from the U.S. government on his well-publicized frack lawsuit.  In fact, the U.S. is already seeking dismissal.  This is in connection with the freshman AG's round-about attempt to further slow the Delaware River Basin Commission's already painfully slow unfurling of shale gas drilling regulations in its NY-PA watershed area — where the federal-state compact organization has so far successfully claimed regulatory jurisdiction that overlaps the powers of the individual states.  You ask me, I think this story should run in any media outlet that ran the AG's original filing — which would put it in the hundreds, if not thousands.  But I'm betting the editors will slack on this.  This story will be rejected as merely routine legal jockeying.  And also because it contradicts the themes of the heroic story that has already been so widely told.  [
Google News the next morning:  Only the original Bloomberg postings!  Toldja!  ...Then, around 11 a.m., it looks like Gannett proposes to hide a brief on their blogs.  ...Then, by around 1 p.m., Jon Campbell has a full story up at the Binghamton P&SB.  Good deal!]

• Announced here August 1:  An obscure arm of the federal government, the Research Partnership to Secure Energy For America (RPSEA) — which is evidently funded by royalty income from oil and gas development on lands of the U.S.A. — has given away $12.4 million in grants for research projects having some kind of bearing on shale gas — or other modern-day challenges in the wide world of fossil fuels.  High on the list was this:  NORM (Naturally Occurring Radioactive Materials) Mitigation and Clean Water Recovery from Marcellus Frac Water, a project to be led by GE Global Research (Niskayuna, NY), and involving participation from Endicott Interconnect Technologies (which picked up where IBM left off in Endicott, NY); Inflection Energy LLC (Denver, CO, based, but with known leasehold interests in the upstate area of Broome and Tioga counties); and Stearns & Wheeler (environmental consultant based in Cazenovia, NY).  Jim Willis' Marcellus Drilling News here dug it out as a $2 million project, of which $1.6 million will be from public funds.  It's true, maybe I'm biased, but I think this should run at least with the business briefs in upstate.  The moral of this story is that — instead of reps from NY's substantial community of experts mobilizing in order to help the activists shoot down shale gas, a theme which has been widely covered — here we have parts of this same professional community organizing in order to increase knowledge, to decrease impact (if any) — and to get paid.  I have tweeted this generally, and I have direct-messaged @PSBStephen.  We shall see.
  [Result as of August 3:  Still bupkis!]

• Of record as of July 27, as outlined by me here:  The NY portion of Michigan-based DTE Energy's $250 million, 37-mile Bluestone Gathering pipeline is officially on file with the NYS Public Service Commission.  I knew this news would be problematic for the Binghamton Press, because that paper had just the week before, July 21, put out a story headlined, "Michigan firm's gas pipeline plan hits snag."  If there's such a snag, then why is there this flood of technical paper now on file with the state authorities?  No one's yet done anything with this.  If the affected landowners were up in arms, then it would be a story.  But, so far, the landowners seem to fall into only three different categories:  1) Those who have already signed easement deals with the developer; 2) Those who are organizing in order to collectively bargain for more lucrative, more protective easement deals; and 3) Those who live nearby, and who have chosen to live and let live.  Still not a story?  Why is this not a story? 

• Happened mid-July, but not reported until July 22 and July 27 — and then only in very limited outlets, and in somewhat confusing ways, as shown here and here:  The Coalition of Watershed Towns — a collection of all the upstate town governments, spread across five counties, which together represent all the land which drains water toward New York City's drinking water collection reservoirs — voted unanimously against the Cuomo Administration's proposed permanent shale gas ban in those areas.  This action appears to have been taken at the behest of Delaware County Board of Supervisors Chair James E. Eisel Sr., and under the guidance of Coalition Attorney Jeffrey Baker.  Here, we see an unusual twist in the possible casting and plot for a potential story — what with the culprit being played in this case by pushy wealthy New York City water consumers (and their political henchmen), and the victim represented by economically down-trodden upstate landowners, and the injustice being the emotionally obscure, uncompensated loss of property rights, and economic development, caused by all this regulatory over-zealousnous against natgas drilling.  Though it had potential — still, very little coverage, and certainly no bounce.  Maybe next time.

Happened July 23, 2011:  Cabot Oil and Gas held its second annual Community Picnic, this time on the Harford Fairgrounds, Susquehanna County, PA.  I beforehand made fun of the promotional poster here.  There was free admission, free food, and free gifts.  And more than 4,000 people reportedly took them up on it.  That's about twice the number who showed up last year, and a pretty good turnout — considering that the population of Susquehanna County, PA, was only 43,356 during the last census.  Cabot has faced widespread bad press — nearly comparable to such Seventies-Eighties eco dramas as Love Canal, or Times Beach — over much of the last two years.  This was in connection with shallow methane migration issues which, at least temporarily, affected nearby domestic well water supplies, and which stemmed from gas well casing failures in this very same county, namely Dimock.  To have read all this non-stop coverage, you would think they didn't have a single friend left anywhere in this area.  But I dunno; judging from this picnic, it doesn't look that way to me.  I did see some error-laden, second-string newspaper coverage from Scranton, PA, and some Binghamton TV coverage, but neither clearly knew what to do with the story.  Again, if the facts can't be leveraged so as to reinforce the established narrative, they get clumsy about it.