Obama backs shale gas drilling, but offers little new

25 Jan 2012 05:05Source: Reuters // Reuters* Obama calls for roadmap on shale gas* Industry says too many regulations could hurt output* Administration to set up wind and solar zones (Adds comment from analyst)By Ayesha Rascoe and Edward McAllisterWASHINGTON/NEW YORK, Jan 24 (Reuters) - President Barack Obama on Tuesday pledged support for the U.S. shale gas boom, but said government must focus on safe development of the energy resource.In his State of the Union address, Obama called for government to develop a roadmap for responsible shale gas production and said his administration would move forward with "common-sense" new rules to make sure drillers protect the public."America will develop this resource without putting the health and safety of our citizens at risk," Obama said.Obama's proposals on natural gas were similar to previous administration comments, and would do little to satisfy oil and gas industry backers who argue that the federal government needs to stay out of the way of burgeoning shale development.Some industry groups had hoped Obama might streamline government oversight or offer specific plans to increase access for oil and gas drilling.Instead, Obama pressed again for ending tax breaks for the oil and gas industry in his speech, something he has pushed for repeatedly without success.The American Petroleum Institute, the top oil and gas lobbying group, said the policies Obama promoted in his speech are at odds with expanding energy output."It's a contradiction because he calls for further regulation that will slow down the production of energy and then increasing costs by raising taxes," said the institute's president, Jack Gerard.Chris Jarvis, president of Caprock Risk Management in Rye, New Hampshire, said Obama avoided tackling key issues regarding natural gas, such as switching to using more gas in transportation."He was basically using his discussion on energy to deflect away from his critics versus really doing major changes with the U.S. energy sector and natural gas," Jarvis said.SHALE GAS REVOLUTIONImprovements in drilling techniques have transformed the U.S. energy landscape in recent years by unlocking the country's immense shale oil and gas reserves.But the drilling boom has raised concerns about the safety of natural gas extraction techniques like hydraulic fracturing, or fracking, which environmentalists say could pollute water supplies.Still, with fracking mostly exempt from federal oversight and most shale gas production occurring on private lands, the Obama administration is limited in its authority over the practice.Obama said the administration would move forward with rules that would require companies to disclose chemicals used during the fracking process on public lands.In wide-ranging comments about the energy industry, Obama also said he would direct his administration to open 75 percent of the country's potential offshore oil and gas resources to drilling.This proposal would be carried out in the latest offshore drilling plan released by the Interior Department in November.PROMOTING CLEAN ENERGYObama strongly defended his record in investing in renewable energy.The high profile collapse of solar-panel maker Solyndra last year - after the company received $535 million in loan aid from the administration - led critics to argue that government should not be in the business of backing energy companies."Some technologies don't pan out; some companies fail," Obama said. "But I will not walk away from the promise of clean energy ... I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here."Though Congress failed to move on a proposal he put forward last year to set a target for power plants to produce mostly clean electricity by 2035, Obama said the administration would establish zones to develop 10 gigawatts of solar and wind power projects on public lands.In addition, the Defense Department will purchase one gigawatt of renewable energy, with the Navy purchasing enough capacity to power a quarter of a million homes a year. (Additional reporting by Eileen Houlihan; Editing by David Storey and Eric Beech)===========UPDATE 1-Weir buys U.S. shale gas valve maker for $176 mlnWed, Jan 25 02:39 AM EST* Buys Texas-based Novatech to boost exposure to aftermarket* Sees acquisition as immediately earnings accretiveLONDON, Jan 25 (Reuters) - British engineering firm Weir said it agreed to buy U.S. specialist valve maker Novatech for $176 million in cash to increase its exposure to North America's booming shale oil and gas market.FTSE 100 company Weir, which supplies pumps and valves to the energy and mining industries, said on Wednesday that the acquisition of family-owned, Texas-based Novatech would be immediately earnings accretive.The huge growth in the extraction of oil and gas from shale rocks in the U.S. has benefited companies like Weir, whose heavy-duty pumps and valves are used to force sand and chemicals into the ground to push out hydrocarbons.Weir said that adding Novatech's products would enhance its ability to go back and service products they've already sold and supply customers with replacement parts - the so-called aftermarket."This deal enables Weir to broaden our aftermarket expendable product portfolio in this fast-growing sector, where increasing operating intensities require equipment and components to be more regularly replaced and serviced," Chief Executive Keith Cochrane said in a statement.Weir's acquisition of Novatech follows that of Seaboard Holdings Inc, another U.S. shale gas focused firm, which it bought for $675 million last year.Completion of the deal, which is subject to U.S. regulatory clearance, is expected in February, said Weir, adding that it would fund the deal from its existing bank facilities.Shares in the company closed at 1,927 pence on Tuesday, valuing the firm at 4.07 billion pounds ($6.34 billion).============Exxon’s Shale Gas Well Failures in Poland May Lengthen Gazprom’s ShadowQBy Joe Carroll - Feb 1, 2012 6:44 PM GMT+0300inShare1 More Print EmailEnlarge image Tube segments for Shale Gas. Photographer: Julia Schmalz/BloombergExxon Mobil Corp. (XOM)’s failed shale-gas wells in Poland may hobble the nation’s effort to become one of the world’s major energy sources and dismantle Russian dominance of Eastern European natural-gas markets.Exxon, the world’s largest energy company by market value, said two exploratory wells drilled in a Polish shale formation last year weren’t commercially viable. The gas discovered in the wells, Exxon’s first in Poland, failed to flow in sufficient quantities to justify bringing them into production, David Rosenthal, vice president for investor relations, said during a conference call yesterday.International energy prospectors, including Marathon Oil Corp. (MRO), Chevron Corp. (CVX) and Talisman Energy Inc. (TLM), are probing Poland’s shale deposits to see if drilling techniques that revolutionized U.S. gas production can unleash reserves big enough to supply Polish demand for more than three centuries. Exxon’s setbacks suggest Poland’s shale poses unique challenges that may increase costs and delay output, said Gianna Bern, founder of Brookshire Advisory & Research in Chicago.“Shale exploration is a very high-cost and high-risk business and the Polish shale market is still in its infancy,” Bern, who advises major oil companies on risk management and strategy, said in a telephone interview yesterday. “It’s early in the game for Poland, and they have significant potential reserves over there.”Reduce ImportsPoland’s shale formations hold 187 trillion cubic feet of recoverable gas, according to an April 2011 assessment by the U.S. Energy Department. Those resources are 32 times larger than the country’s conventional gas reserves and enough to supply domestic consumption for 322 years.For Poland, successfully unlocking gas from shale would be a boon to domestic manufacturers and power producers by diminishing the need for Russian imports that now supply two- thirds of demand, said Benjamin Schlesinger, president of Benjamin Schlesinger and Associates Inc., a Bethesda, Maryland- based adviser to gas producers, utilities, regulators and financial-services firms.Poland’s dominant gas company, Polskie Gornictwo Naftowe i Gazownictwo, pays Russia’s state gas company Gazprom OAO (GAZP) $500 for 1,000 cubic meters ($14.16 per million British thermal units) of gas. That’s six times the benchmark U.S. price for the fuel.“Poland’s shale resources are enormous,” said Schlesinger, a Stanford University-trained engineer who helped the New York Mercantile Exchange design its gas futures contract. “Poland should be able to capture a good deal of those resources and reduce reliance on the Russian Federation.”Poor WellsExxon’s failures followed disappointing results at Polish wells drilled last year by 3Legs Resources Plc and BNK Petroleum Inc. (BKX) London-based 3Legs’s Lebien well and BNK’s Lebork well flowed at lower rates than similar prospects in the Barnett and Fayetteville shale regions in the U.S., Sanford C. Bernstein & Co. said in a Nov. 10 note to clients.“Poland is cited among Europe’s best shale prospects, but Exxon’s result supports our caution on achieving material near- term volumes,” Oswald Clint, a London-based analyst at Bernstein, said in a note today.Even so, it may be too early to draw any firm conclusions from Exxon’s drilling failure, said Pawel Poprawa, who specializes in shale at the Polish Geological Institute in Warsaw.‘Technological Problem’“If we look at the experience from the U.S. or Canada, no single well can provide the answer if the basin has potential or not,” he said. “Low flows seem to be a technological problem.”Marathon Oil said today that it’s evaluating data after finishing its first well in a Polish shale formation. The Houston-based company said in a statement that it intends to drill three more wells during the next few months and withdraw rock samples for testing. Marathon plans a total of six to seven Polish shale wells this year, according to the release.The Polish shale results come after Exxon encountered a dry hole in Hungary in late 2009 drilled in a tight-sand deposit similar to shale. Exxon walked away from the $75 million project after striking more water than gas.Exxon and other major North American energy producers have been lured to explore shale prospects from Germany to Argentina after largely missing out on the boom in shale extraction in the U.S. that began in the middle of the last decade.Smaller ExplorersSmaller explorers such as EOG Resources Inc. (EOG), Chesapeake Energy Corp. (CHK) and Range Resources Corp. (RRC) came to dominate the U.S. shale industry by default as the biggest international companies focused on locating billion-barrel offshore crude fields in places like the Gulf of Mexico and West Africa.Shale formations were ignored by much of the energy industry for most of the past century because the rocks were considered too hard to crack using traditional drilling techniques. That began to change in the late 1990s with the development of new horizontal drilling practices and more- intensive hydraulic fracturing that succeeded in unlocking gas and crude from shale and similarly dense geologic deposits.Exxon sought to jump-start its shale program in June 2010 with the $34.9 billion acquisition of XTO Energy, a Fort Worth, Texas-based pioneer of shale development. In addition to shale wells and undrilled prospects that stretch from the Mexican border to Canada, Exxon wanted to transfer XTO’s in-house expertise to foreign shale fields.Exxon hasn’t disclosed its plans for further drilling in Poland. The shares rose 0.6 percent to $84.23 at 10:44 a.m. in New York.‘Attractive Fiscal Terms’Poland has led European shale exploration by virtue of its tempting geology and by offering “attractive fiscal terms” to prospectors, the Energy Department in Washington said in a September report.Still, a “likely aggressive tax burden” to be imposed on shale-gas producers may damp investor enthusiasm, analysts at Bank Zachodni WBK SA, based in Wroclaw, Poland, said yesterday in a note to clients.Polish drilling also has been hindered by a scarcity of rigs, water and specialized equipment needed for shale wells, Bern said.“Getting the things you need to drill these wells is much more difficult in Poland than in the United States, where the shale industry is very well-developed,” Bern said.To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.netTo contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net===================

Apr. 8, 2012 4:18 PM ET
Natural gas glut means drilling boom must slow
By JONATHAN FAHEY, AP Energy Writer THE ASSOCIATED PRESS STATEMENT OF NEWS VALUES AND PRINCIPLES

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FILE - In this July 27, 2011, file photo, a pair of workers are behind the top of a pump where the hydraulic fracturing process in the Marcellus Shale layer to release natural gas is underway at a Range Resources site in Claysville, Pa. The U.S. natural gas market is bursting at the seams. So much natural gas is being produced that soon there may be nowhere left to put the country’s swelling surplus. After years of explosive growth, natural gas producers are quickly retrenching. (AP Photo/Keith Srakocic, File)
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NEW YORK (AP) — The U.S. natural gas market is bursting at the seams.

So much natural gas is being produced that soon there may be nowhere left to put the country's swelling surplus. After years of explosive growth, natural gas producers are retrenching.

The underground salt caverns, depleted oil fields and aquifers that store natural gas are rapidly filling up after a balmy winter depressed demand for home heating.

The glut has benefited businesses and homeowners that use natural gas. But with natural gas prices at a 10-year low — and falling — companies that produce the fuel are becoming victims of their drilling successes. Their stock prices are falling in anticipation of declining profits and scaled-back growth plans.

Some of the nation's biggest natural gas producers, including Chesapeake Energy, ConocoPhillips and Encana Corp., have announced plans to slow down.

"They've gotten way ahead of themselves, and winter got way ahead of them too," says Jen Snyder, head of North American gas for the research firm Wood Mackenzie. "There hasn't been enough demand to use up all the supply being pushed into the market."

So far, efforts to limit production have barely made a dent. Unless the pace of production declines sharply or demand picks up significantly this summer, analysts say the nation's storage facilities could reach their limits by fall.

That would cause the price of natural gas, which has been halved over the past year, to nosedive. Citigroup commodities analyst Anthony Yuen says the price of natural gas — now $2.08 per 1,000 cubic feet — could briefly fall below $1.

"There would be no floor," he says.

Since October, the number of drilling rigs exploring for natural gas has fallen by 30 percent to 658, according to the energy services company Baker Hughes. Some of the sharpest drop-offs have been in the Haynesville Shale in Northwestern Louisiana and East Texas and the Fayetteville Shale in Central Arkansas. But natural gas production is still growing, the result of a five-year drilling boom that has peppered the country with wells.

The workers and rigs aren't just being sent home. They are instead being put to work drilling for oil, whose price has averaged more than $100 a barrel for months. The oil rig count in the U.S is at a 25-year high. This activity is adding to the natural gas glut because natural gas is almost always a byproduct of oil drilling.

Analysts say that before long companies could have to start slowing the gas flow from existing wells or even take the rare and expensive step of capping off some wells completely.

"Something is going to have to give," says Maria Sanchez, manager of energy analysis at Bentek Energy, a research firm.

U.S. natural gas production has boomed in recent years as a result of new drilling techniques that allow companies to unlock fuel trapped in shale formations. Last year, the U.S. produced an average of 63 billion cubic feet of natural gas per day, a 24 percent increase from 2006. But over that period consumption has grown half as fast.

The nation's storage facilities could easily handle this extra supply until recently because cold winters pushed up demand for heating and hot summers led to higher demand for air conditioning. Just over half the nation's homes are heated with natural gas, and one-quarter of its electricity is produced by gas-fired power plants.

But this past winter was the fourth warmest in the last 117 years, according to the National Oceanic and Atmospheric Administration. It was the warmest March since 1950.

Between November and March, daily natural gas demand fell 5 percent, on average, from a year earlier, according to Bentek Energy. Yet production grew 8 percent over the same period.

"We haven't ever seen a situation like this before," says Chris McGill, Vice President for Policy Analysis at the American Gas Association, an industry group.

At the end of winter, there is usually about 1.5 trillion cubic feet of gas in storage. Today there is 2.5 trillion cubic feet because utilities withdrew far less than usual this past winter.

There is 4.4 trillion cubic feet of natural gas storage capacity in the U.S. If full, that would be enough fuel to supply the country for about 2 months.

If current production and consumption trends were to continue, Bentek estimates that storage facilities would be full on October 10.

Storage capacity, which has grown by 15 percent over the past decade, cannot be built fast enough to address the rapidly expanding glut. And analysts note there is little financial incentive to build more anyway.

The low price brought on by the glut has increased demand for natural gas among industrial users and utilities.

Makers of chemicals, plastics and fertilizers that use natural gas as a feedstock are expanding. Garbage trucks, buses and delivery vehicles are using more natural gas. Electric power producers are switching from coal to natural gas whenever possible.

This won't add up to enough new demand quickly enough to relieve the pressure on storage facilities this summer.

Scorching temperatures this summer would do the trick, but Mother Nature is not expected to cooperate.

Temperatures this summer are forecast to be about normal, and much cooler than the last two summers, says David Streit, a meteorologist at Commodity Weather Group expects.

Sultry winters, he said, do not usually develop into sultry summers.

Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .

====

Frank Frackers
Exxon’s fracking gag makes Chesapeake look good

30 May 2012 | By Christopher Swann


Exxon Mobil’s reticence to come clean about fracking makes Chesapeake Energy look good. That’s a rare feat((A notable act or deed, especially an act of courage; an exploit.)) - and hardly one to brag about. The troubled gas firm is infamously opaque. But its openness on the risks of fracking puts larger rivals like Exxon Mobil and Chevron to shame. After another large minority vote from investors for more information on this controversial practice, Big Oil should follow its troubled cousin’s lead.

The fallout from fracking is no longer merely a worry for environmentalists. As much as a fifth of Exxon’s giant fossil fuel trove(A collection of valuable items discovered or found; a treasure-trove.)can only be accessed by using the drilling method, which creates mini-quakes to crack open fuel-laden rocks. So the threat of fracking-related mishaps or tighter regulation ought to concern its shareholders. Chevron too became one of America’s largest frackers after its 2011 takeover of Atlas Energy.

While gas and oil output from shale has been surging, threats to the industry have also been mounting. New York State and Canada’s Quebec province have both announced a moratorium on fracking and France has banned it outright.(( An authorization to a debtor, such as a bank or nation, permitting temporary suspension of payments.
An authorized period of delay in the performance of an obligation.

A suspension of an ongoing or planned activity:))Chevron even had its shale exploration license canceled in Bulgaria after the nation turned against fracking.

Yet both Exxon and Chevron continue to give investors only bare-bones disclosure on such perils. Close to 30 percent of investors at Exxon Mobil are demanding more, up from around 28 percent last year. A chunky minority at Chevron - 27 percent - agreed.

Somewhat embarrassingly for such giants, social and environmental investor pressure group “As You Sow” holds up Chesapeake as one exemplar of honesty. The firm, which has rightly been under attack for poor corporate governance, at least reveals fines from fracking. Some other small frackers, like $11 billion Talisman Energy, disclose all safety violations.

To get similar information about their company, Exxon shareholders have to resort to trawling through Pennsylvania state statistics. “As You Sow” dug up 200 alleged violations for Exxon in the state in the past two years - among the highest rate per well of its peers. That’s unusual for Exxon, which is normally obsessed with operational excellence.

Secrecy at Chevron and Exxon risks backfiring. If the firms can’t command the trust of their own shareholders on fracking, they stand less
chance of winning over the skeptical citizens of gas-rich states like New York. Losing that revenue really could have shareholders up in arms.

=== === Insight: Oil pipeline crunch shifts U.S. shale race from drillbits to valves Mon, Jul 30 04:44 AM EDT By Kristen Hays HOUSTON (Reuters) - The U.S. shale oil revolution can't be stopped, but it could be delayed by a potential shortfall of 10-ton valves and giant pipeline pumps essential for rebalancing markets upended by the surge in production. Amid an unanticipated boom in inland oil output that turned the domestic market upside down last year, firms from Enterprise Products Partners to Shell Pipeline and Plains All American have launched a $20 billion bonanza to build, expand or reverse two dozen pipelines in the past year. But as they help effectively to switch the flow of oil from the north to southern refineries and relieve the glut of cut-price, landlocked crude, concerns are growing that the firms that make key pipeline components may be straining to keep pace. "The supply chain hasn't quite caught up," said Terry McGill, president of Enbridge Energy Co Inc, the U.S. division of Canadian pipeline giant Enbridge Inc, which has some $4 billion worth of U.S. projects on the books. Thus far, there are no signs of project delays or cost overruns in what is the biggest build-out of oil and liquid pipelines since World War II. Executives say they are building in plenty of lead time to produce dozens of multi-ton valves and massive pumps essential for maintaining pipeline flow. Underutilized steel mills, meanwhile, can rev up furnaces to forge the pipes -- which have a diameter of up to 42 inches. But the task is enormous. After decades of moving U.S. offshore or Middle East crude from the Gulf Coast to inland refineries, pipelines must flow in the opposite direction to accommodate surging output from Canada and shale oilfields such as North Dakota's Bakken. It all makes for a historic boom, said Larry Schwartz, senior analyst for natural gas liquids at consultancy Wood Mackenzie: "Midstream, which was the redheaded stepchild, is now in vogue." RAMPING UP FAST Spending has already accelerated far faster than many expected. A year ago, the Interstate Natural Gas Association of America (INGAA) estimated North America would add 19,000 miles of oil pipelines at a cost of $31.4 billion by 2035 as production surged 50 percent to 12.7 million barrels per day. But industry monitor IIR Energy now estimates that $10 billion a year will be spent on crude oil pipeline projects in 2012 and 2013, four times the average of the previous seven years. "You're not just connecting in to existing grids," Enbridge's McGill said. "The grid is being built." The biggest projects, those pumping 1 million barrels daily or more, face the greatest risk of delay, experts say. Each of the dozens of valves required on something like TransCanada Corp's proposed $7.6 billion Keystone XL pipeline -- which has a 36-inch diameter -- usually must be custom-made. "We definitely consider ours an ‘engineered to spec' product," said John Starck, vice president of sales for M&J Valve, a division of multi-industry manufacturer SPX Corp that operators say is a leading valvemaker for liquids pipelines. "We do not actually build the product and keep it on the shelf because each customer has their own unique set of specs." Meanwhile, the market is consolidating as bigger companies snap up industry-favored manufacturers. That shrinks the already small field of venders in the brand- and manufacturer-loyal industry, threatening higher prices as demand swells. Operators saw prices for parts shoot up sharply in 2007 and 2008, the apex of the last huge pipeline build-out that brought on thousands of miles of new natural gas pipelines. "The price just goes up the more projects are out there," said Leon Zupan, president of gas pipelines for Enbridge's U.S. division. "Whenever you need big castings for pumps or valves, there's only so many people who can do it." At SPX, valves and pumps make up part of its fast-growing global flow technology business that the company has said it expects overall to contribute $1 billion to sales this year. SPX has given no specific sales data on parts involved in the U.S. liquids pipeline boom. CANADA TO BAKKEN TO OHIO... The first huge build-out in the United States came during World War II when the federal government ordered a two-pipeline system, the Big Inch and Little Big Inch, to carry oil and refined products to the Northeast from the Gulf Coast. The network, created largely to thwart German submarines that had repeatedly torpedoed tankers along the Atlantic Coast, later had its lines converted to carry natural gas. Postwar prosperity generated industrial demand for natural gas, and pipeline construction flourished for another 20 years. Big one-off oil projects included the Colonial refined product pipelines linking Gulf Coast refiners to the Northeast market and the 48-inch, 800-mile Trans-Alaska Pipeline System (TAPS) to bring newfound Alaskan crude to that state's coast. After that, pipeline construction slowed dramatically as refinery construction stopped and steady oil production necessitated only incremental improvements in the network. Then came the natural-gas shale frenzy that spurred a huge wave of pipeline construction from 2006 until 2008, when the financial crisis and a collapse in prices halted investment, leaving some parts distributors nursing heavy losses. MRC Global Inc, the largest global distributor of pipe, valve and fittings to the energy industry, recorded a $46.5 million writedown in 2009 on an overhang of unused inventory as customers dried up. The company declined to comment on its business. Now the focus is on crude as drillers apply the same hydraulic fracturing technology that upended the natural gas market five years ago to neglected onshore oilfields, unleashing a burst in production unimagined a few years ago. Output in the Bakken alone has surged from nothing to more than 600,000 barrels per day in five years, and may double by 2015. Texas is on pace to issue the most drilling permits since 1985 as output from Eagle Ford, the Permian Basin and the Granite Wash surges. More liquids may emerge from the gas-heavy Marcellus shale in the Northeast or Ohio's nascent Utica shale. Much of that increased production is in remote areas far from refining hubs or in the Midwest and Northern Tier, turning the traditional south-to-north flow pattern on its head. Producers were forced to turn to costly rail, barge and even truck tankers to move oil from the wellhead to refineries. "New infrastructure is going to be critical to push these commodities around the country where they need to be," said David Seaton, chairman and CEO of engineering company Fluor Corp. "It's going to be the lifeblood of economic growth for my lifetime." The aim is to eliminate the bottlenecks and reduce transportation costs, shrinking the discount of benchmark inland U.S. crude in Cushing, Oklahoma to global prices. At $15 a barrel last week, the gap remains historically wide. The first such project, Phase I of the reversal of the Seaway Pipeline to move crude from Cushing to the Texas coast, began pumping on time in mid-May. It will require a host of additional pumps and valves -- but no major pipeline sections -- to reach 450,000 bpd by the first quarter of 2013. It's not just oil pipes. Some $6.5 billion is being spent on natural gas liquids pipelines needed to accommodate output growth in propane, butane, hexane and other NGLs that emerge from shale plays and feed hungry petrochemical complexes, according to IIR. Operators are optimistic, but on guard. "By carefully managing those rare instances when we've had an issue with a valve or a pump, we have been able to complete the vast majority of our projects on time or even ahead of schedule," said Leonard Mallett, senior vice president of engineering for Enterprise Products Partners. His company is one of the largest U.S. operators with planned projects totaling some $7 billion across pipelines, terminals and storage. 10-TON VALVES As manufacturers see orders for critical inputs increase, some are hiring more workers, from welders to salespeople. Others are soaking up current capacity to produce more by adding shifts and some seem to be expanding, cautiously. A valve for a 20-inch pipeline can weigh 3,000 pounds (1,360 kg) to 4,100 pounds, while one for a 36-inch line can weigh 15,500 to 19,000 pounds, depending on whether flanges are included. The biggest valves for the largest pipes are heftier, plus they cost about $120,000 each. It can take 20 to 22 weeks of lead time to build a 42-inch valve, said M&J Valve's Starck. Enbridge's McGill said for big pressure pumps, "it would be a year." John Lenander, vice president of oil and gas valves for another major valve and pump supplier, Dallas-based Flowserve, said timing depends on the level of specialization, the amount of valves needed, and pipe size. For example, 10 valves for 200 miles of 42-inch pipe could be supplied in six to eight months. But 60 valves for 1,200 miles of 42-inch pipe would more likely be quoted with partial deliveries starting in six months, with everything completed in about a year, he said. "We've been putting a lot of additional resources into supply-chain management, project management and engineering," he said. Flowserve, which reports second-quarter results on Tuesday, is also expanding plant capacity, he said, but declined to provide details. Flowserve has said U.S. and Canadian unconventional resources -- such as shale and tight oil and gas production -- have led to "significant project activity" in its North American oil and gas, chemical and power markets. The company does not break out valves and pumps for U.S. liquids pipelines. Starck said M&J, whose parent SPX reports earnings on August 1, has bulked up its manufacturing workforce slightly, but so far has mostly worked to optimize existing plant capacity. ClydeUnion Pumps, a leading pumpmaker that SPX bought last year for $1.25 billion, has no plans to expand manufacturing capacity, confident its five factories in North America and Europe can meet demand. "We can see ahead just how our capacity is, and do what we need to do whether it be one shift or two shifts," said Dick McAdam, vice president of sales in the Americas for ClydeUnion. SOME COMPLAINTS Some competitors to the top firms say builders have begun to complain about long lead times, even at manufacturers with which they regularly work. "You need to diversify your supplier base. That's being done right now, and it should have been done a long time ago," said Elis Zhonga, a senior U.S. sales representatives for Valvitalia, which distributes Italian- and Chinese-made valves. He said the company is hiring more sales and distribution staff at its U.S. operations in response to increased demand. But Zhonga said that despite the complaints, pipeline companies are loyal to tried-and-true suppliers, and he doesn't expect that to change even if manufacturing times lengthen. The most basic raw material for pipelines and a majority of mainline valves -- steel -- remains plentiful, operators say. U.S. steel production is at about 75 percent capacity, according to the American Iron and Steel Institute. About 7.2 percent of steel production went to the energy industry in 2011, and that share is expected to grow this year. Capacity is rising as well. Industrial Info is tracking more than $1.7 billion in projects to build mills designed to produce pipe in North America, much of it by foreign companies including China's Tianjin Pipe and India's Welspun Gujarat Stahl Rohren. (Additional reporting by Steve James and Matt Daily in New York; Editing by Dale Hudson) ========