David Porter: EPA Rulings Will Kill Jobs

August 20, 2015 Elizabeth Alford

Japan Eyes Eagle Ford Natural Gas — EPA to Limit Emissions

New federal regulations designed to cut methane emissions in the oil and gas industry have the Texas Railroad Commission up in arms.

President Obama revealed the latest regulations as part of his broader plan to fight climate change. The plan requires oil and gas companies to cut methane pollution from drilling sites, distribution systems and in other areas of operation by 32 percent from 2005 levels by 2030.

Oil and gas producers are already fatigued from months of low crude prices and new regulations may be more than most can handle. The EPA estimates that the ruling might cost the industry as much as $420 million.

“Like the Clean Power Plan, these burdensome rules will be used by the EPA as a weapon in President Obama’s war on fossil fuels. These excessive regulations are another blatant attack on the oil and gas industry that will further impede America’s energy security, kill jobs and put even more stress on our national and state economies.”

— Texas Railroad Commission Chairman, David Porter

Methane is the key component of natural gas and has a high impact on global warming — up to 25 times that of carbon dioxide. In April, a nationwide study showed that methane emissions across the United States had dropped significantly in the past two decades and are much lower than current Environmental Protection Agency estimates. Read more here

Is it "Doomsday" in the Eagle Ford?

August 19, 2015 Elizabeth Alford

Texas Job Growth Slows — Oil Prices Fall to Six Year Low

The oil bust is taking its toll on the Eagle Ford.

Since June 2014, crude oil prices that have plunged from over $100 down to new lows of under $43. The U.S hasn’t seen these types of prices in almost seven years and the effects of the prolonged pricing is being seen, especially in the small towns of the Eagle Ford.

Related: Summary of the Oil Bust

Hydraulic fracturing literally changed the landscape of many rural areas in the Eagle Ford. As the surge in oil production it unleashed a whirlwind of growth, construction and population explosions. But as the low oil prices hang around, the bankruptcies, mergers and layoffs are affecting these towns the most.

“Everybody is waiting for doomsday. Everything was good, and everybody was getting these big checks, and everybody waited for their land to be leased, and then it all came to a screeching halt around the beginning of the year.”

— Vi Malone, Karnes County Treasurer

Producers have been forced to tighten their budgets and change their strategies in order to stay competitive. And while these tactics have worked for some, the prolonged low prices are forcing many to resort to extreme measures to save their bottom line.

In a recent study of 66 companies, the IHS found that in the first quarter of the year alone they had to write down nearly $29 billion in the value of their assets, which exceeded the total for the full year of 2014. These measures by big producers are squeezing out many local service companies who are being forced to drastically reduce their prices and fees, causing a ripple effect that negatively impacts all parts of small local economies.

The future is unclear and uncertainty and predictions of doom are now commonplace. Some analysts forecasted possible economic ruin for oil-dependent states and others warned of the crippling of the industry. But many seasoned oilmen saw the downturn as a wake up call of sorts and an opportunity for producers to take a hard look at their systems, processes, personnel, technology and strategies outside of the frenetic pace the boom required.

Rancher Sues Fracking Operators

August 18, 2015 Elizabeth Alford

Karnes County Well Explosion — Explosion

A rancher in Perrin, Texas sues several fracking operators after a serious explosion on his property left him permanently disfigured and disabled.

Cody Murray, a 38-year-old husband and father, sustained extensive burns when a giant fireball erupted from the pump house on his property in early August. Murray’s father, wife and four year old daughter also sustained injuries.

Court records claim that the explosion was caused by methane gas that leaked into the well from nearby fracking operations run by EOG Resources, Fairway Resources LLC and three Fairway subsidiaries.

“Rigorous scientific testing, including isotope testing, has conclusively demonstrated that the high-level methane contamination of the Murrays’ water well resulted from natural gas drilling and extraction activities. The high levels of methane in the Murrays’ well were not ‘naturally occurring.”

Shale gas is composed of 90 percent methane. The colorless, odorless and tasteless gas is very explosive and has been in the center of the debate over natural gas drilling. A peer-reviewed study out of Duke University found that methane levels in private water wells averaged 17 times higher in wells that are within 1,000 feet of a natural gas drilling site.

Cody also suffered significant neurological damage in the fire, as well as paresthesias and extreme weakness in his hands and arms. In the lawsuit filed last week, the Murrays are seeking damages for negligence, trespass, nuisance, lost wages, physical impairment, pain and suffering, continuing medical care, disfigurement and loss of consortium.

Swapping Oil with Mexico

August 17, 2015 Elizabeth Alford

alt="Eagle Ford at One Billion Barrels" — Oil Export Ban

Producers in the Eagle Ford are one step closer to being able to ship light crude to Mexico, thanks to a new policy by the U.S. Commerce Department last Friday.

The Commerce Department has given permission for a limited amount of oil to be exported to Mexico. The agency approved an application from Pemex, Mexico’s national oil company, that would allow for the U.S. to exchange our light crude for Mexico’s heavy crude. The amount of crude that would be involved is minimal, but the new policy is significant because it signifies a shift in opinion about the oil export ban that has been in effect since the 1970’s.

“Texas will gain tremendously from this oil swap agreement. The petroleum industry in Texas, in large part due to shale production, such as the Eagle Ford Shale in my district, has revitalized our nation’s economy. These swaps will further positively impact energy exploration in Texas and the United States.”

— Representative, Henry Cuellar

Many senators hope that lifting the export ban will level the playing field by doing away with restrictions that hinder America’s economic growth and that threaten our long-term goal of becoming energy independent. In June, Heidi Heitkamp took to the Senate floor to try and persuade fellow lawmakers that the oil export ban is not good for the country. Read more

Eagle Ford Rigs at 116

August 15, 2015 Elizabeth Alford

The Eagle Ford Shale rig count increased by four to 116 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, Sanchez Energy reported second quarter losses of half a billion dollars and is looking to its Eagle Ford operations to turn things around.

The U.S. rig count remained flat, ending with 884 rigs running by midday Friday. A total of 211 rigs were targeting natural gas (two less than the previous week) and 672 were targeting oil in the U.S. (two more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)389 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford fell to 18 this week and natural gas prices traded at $2.81/mmbtu, a $.10 increase from the previous week.

The oil rig count increased to 98 as WTI oil prices dropped again to $42.13, a decrease of $4.78. A total of 103 rigs are drilling horizontal wells, zero are drilling directional wells, and 13 are vertical rigs. Karnes continues to lead development this week running 21 rigs, with DeWitt (18), McMullen (11) and Webb (11) following behind. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by Count

Eagle Ford Shale News

ConoccoPhillips Reduces Eagle Ford Rig Count

Crude Hits Six Year Low

Matador Announces Record Eagle Ford Production

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.