Free pizza! Chevron issues controversial apology to town plagued by fracking explosion

Free pizza! Chevron issues controversial apology to town plagued by fracking explosion Published time: February 19, 2014 00:53 Get short URL Joe Raedle / Getty Images / AFP Joe Raedle / Getty Images / AFP Share on tumblr Tags Austerity, Corruption, Ecology, Energy, Law, USA With one person missing and presumed dead in an explosion at a natural gas well in a small Pennsylvania town, the company responsible is now under fire after apparently apologizing to the local community by handing out vouchers for free pizza. It took five days for emergency crews to safely extinguish a fire that was set by an explosion that shook the small town of Bobtown, located in the far southwestern corner of the state. The blast gave off a loud hissing noise that could be heard from hundreds of yards away. One resident told the Pittsburgh Post-Gazette that the explosion in a shale formation where Chevron Corp. has spent time fracking “sounded like a jet engine going five feet above your house.” John Kuis, 57, of nearby Dilliner said his dog started growling unusually at 6:45 a.m. on February 11 “then the house just sort of shock and there was a big loud bang.” At least one employee who was working on the rig has not been found and is widely thought to have been killed – either in the initial explosion or during the five days the flames burned. Another worker was injured in the event. Chevron has denied any knowledge of what caused the explosion. Company spokesman Ken Robertson told the local ABC affiliate that workers were preparing to run tubing, which is done when wells are being readied for production, and that “there is not enough fuel being emitted to sustain combustion, and with the cooling of the crane, the ignition source has been removed.” The Philadelphia Daily News has since discovered that residents of Bobtown – a census-designated community of fewer than 1,000 people that revolves mostly around coal mining – have started receiving coupons for one free pizza and a two-liter of soda from the local Bobtown pizza. “Chevron recognizes the effect this has had on the community,” the company said on its website. “We value being a responsible member of this community and will continue to strive to achieve incident-free operations. We are committed to taking action to safeguard our neighbors, our employees, our contractors and the environment.” Daily News reporters were able to confirm with Bobtown pizza that it was, in fact, Chevron that bought about 100 of the $12 coupons, which expire on May 1, 2014. Chevron workers handed out the coupons by walking door-to-door, and the vouchers quickly became the subject of jokes on social media. “There has been considerable construction activity adjacent to the site, resulting in increased traffic and congestion in the area,” a Chevron spokesman told the Huffington Post. “Recognizing that our neighbors have been affected by these activities, we are out in the community every day to listen to and address concerns. We have also offered a token of appreciation for their patience during this time, and our commitment to the community goes far beyond this and our outreach is ongoing.” Will Bunch, a blogger with the Philadelphia Daily News, pulled no punches when describing what the company forgot when thinking up the public relations campaign. “Of course, a cynic would argue that a lifetime supply of pizza – even with those cheesy breadsticks thrown in – wouldn’t be worth the health risks of having a massive fracking rig next door,” he wrote. “On the other hand, I see a possible new marketing campaign for Chevron: We guarantee your fracking rig won’t explode, or your pizza is free!”

Quake kills 450 in Pakistan, creates new island in sea: Shale gas, oil reshape world energy landscape

Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft Grab the HTML/BBCodeCopy and paste the code below: [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64_t.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64_s.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64_q.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64_m.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64_n.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64_z.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64_c.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_22b30fca64_b.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr [url=http://www.flickr.com/photos/gsfc/9939357963/][img]http://farm4.staticflickr.com/3723/9939357963_dc4c346460_o.jpg[/img][/url] [url=http://www.flickr.com/photos/gsfc/9939357963/]Region Hit by Large Pakistan Quake as Shown by NASA Spacecraft[/url] by [url=http://www.flickr.com/people/gsfc/]NASA Goddard Photo and Video[/url], on Flickr Size: Square 75 (75 x 75)Size: Square 150 (150 x 150)Size: Thumbnail (100 x 96)Size: Small 240 (240 x 229)Size: Small 320 (320 x 306)Size: Medium 500 (500 x 478)Size: Medium 640 (640 x 612)Size: Medium 800 (800 x 765)Size: Large 1024 (1024 x 979)Size: Original (1540 x 1472) HTML BBCode .Photo license: Some rights reserved .◣NewerOlder On September 24 at 11:29 GMT, a magnitude 7.7 earthquake struck in south-central Pakistan at a relatively shallow depth of 20 kilometers. The earthquake occurred as the result of oblique strike-slip motion, consistent with rupture within the Eurasian tectonic plate. Tremors were felt as far away as New Delhi as well as Karachi in Pakistan. Even though the immediate area to the epicenter is sparsely populated, the majority of houses are of mud brick construction and damage is expected to be extensive. The perspective view, looking to the east, shows the location of the epicenter in Pakistan's Makran fold belt. The image is centered near 27 degrees north latitude, 65.5 degrees east longitude, and was acquired December 13, 2012. With its 14 spectral bands from the visible to the thermal infrared wavelength region and its high spatial resolution of 15 to 90 meters (about 50 to 300 feet), ASTER images Earth to map and monitor the changing surface of our planet. ASTER is one of five Earth-observing instruments launched Dec. 18, 1999, on Terra. The instrument was built by Japan's Ministry of Economy, Trade and Industry. A joint U.S./Japan science team is responsible for validation and calibration of the instrument and data products. The broad spectral coverage and high spectral resolution of ASTER provides scientists in numerous disciplines with critical information for surface mapping and monitoring of dynamic conditions and temporal change. Example applications are: monitoring glacial advances and retreats; monitoring potentially active volcanoes; identifying crop stress; determining cloud morphology and physical properties; wetlands evaluation; thermal pollution monitoring; coral reef degradation; surface temperature mapping of soils and geology; and measuring surface heat balance. The U.S. science team is located at NASA's Jet Propulsion Laboratory, Pasadena, Calif. The Terra mission is part of NASA's Science Mission Directorate, Washington, D.C. More information about ASTER is available at asterweb.jpl.nasa.gov/. Image Credit: NASA/GSFC/METI/ERSDAC/JAROS, and U.S./Japan ASTER Science Team Image Addition Date: 2013-09-24 NASA image use policy. NASA Goddard Space Flight Center enables NASA’s mission through four scientific endeavors: Earth Science, Heliophysics, Solar System Exploration, and Astrophysics. Goddard plays a leading role in NASA’s accomplishments by contributing compelling scientific knowledge to advance the Agency’s mission. ========== KARACHI: On Tuesday, a 7.7-magnitude earthquake struck Balochistan, killing more than 260 people and displacing hundreds of thousands. It also triggered formation of a new island off the coast, which has quickly become a global curiosity. But scientists say the island won't last long. "It's a transient feature," said Bill Barnhart, a research geophysicist with the U.S. Geological Survey. "It will probably be gone within a couple of months. It's just a big pile of mud that was on the seafloor that got pushed up." Indeed, such islands are formed by so-called mud volcanoes, which occur around the world, and Barnhart and other scientists suspect that's what we're seeing off the Pakistani coast. News organizations have reported that the Pakistani island suddenly appeared near the port of Gwadar after the quake. The island is about 60 to 70 feet (18 to 21 meters) high, up to 300 feet (91 meters) wide, and up to 120 feet (37 meters) long. Media reports have located the new island at just a few paces to up to two kilometers off the coast of Pakistan. It is about 250 miles (400 kilometers) from the epicenter of the earthquake. The island appears to be primarily made out of mud from the seafloor, although photos show rocks as well, Barnhart told National Geographic. He has been studying images and media accounts of the new island from his lab in Golden, Colorado. "It brought up a dead octopus, and people have been picking up fish on [the island]," he said. A similar mud island appeared off Pakistan after a 2011 earthquake there, Barnhart said: "It lasted a month or two and then washed away." How Mud Volcanoes Work Though mud volcanoes have been seen elsewhere, they don't always produce islands. Such volcanoes were seen in California after a 2010 earthquake, Barnhart noted, when the tremors caused carbon dioxide to bubble up through the ground, but the result was "vigorous boiling," not new islands. Barnhart said Pakistani scientists will soon be measuring the new landmass to better understand how it formed. "We don't know much about it so far," he added. "We haven't had a satellite pass over it yet to really identify it." Seismic waves from the quake likely caused some fluid material under the seafloor to expand, Barnhart said. The crust holding that pressurized fluid ruptured, and mud spewed up. The whole process is similar to liquefaction, Barnhart said, which is when seismic waves turn normally solid layers of soil into a flowing fluid, often with disastrous results for the buildings and people above. He was skeptical of media reports that the underlying fluid was methane hydrates. "We don't know exactly what this was, whether it was free methane, carbon dioxide, water, or some other kind of fluid," he said. But methane hydrates are offshore in much deeper water, he said. SAMAA/AGENCIES ===================== Tue, Sep 24 12:21 PM EDT By Gul Yusufzai QUETTA, Pakistan (Reuters) - A major earthquake hit a remote part of western Pakistan on Tuesday, killing at least 45 people and prompting a new island to rise from the sea just off the country's southern coast. Tremors were felt as far away as the Indian capital of New Delhi, hundreds of miles (kilometers) to the east, where buildings shook, as well as the sprawling port city of Karachi in Pakistan. The United States Geological Survey said the 7.8 magnitude quake struck 145 miles southeast of Dalbandin in Pakistan's quake-prone province of Baluchistan, which borders Iran. The earthquake was so powerful that it caused the seabed to rise and create a small, mountain-like island about 600 meters (yards) off Pakistan's Gwadar coastline in the Arabian Sea. Television channels showed images of a stretch of rocky terrain rising above the sea level, with a crowd of bewildered people gathering on the shore to witness the rare phenomenon. Officials said scores of mud houses were destroyed by aftershocks in the thinly populated mountainous area near the quake epicenter in Baluchistan, a huge barren province of deserts and rugged mountains. Abdul Qadoos, deputy speaker of the Baluchistan assembly, told Reuters that at least 30 percent of houses in the impoverished Awaran district had caved in. The local deputy commissioner in Awaran, Abdul Rasheed Gogazai, and the spokesman of Pakistan's Frontier Corps involved in the rescue effort said at least 45 people had been killed. In the regional capital of Quetta, officials said some areas appeared to be badly damaged but it was hard to assess the impact quickly because the locations were so remote. Chief secretary Babar Yaqoob said earlier that 25 people had been injured and that the death toll was expected to increase as many people appeared to be trapped inside their collapsed homes. Local television reported that helicopters carrying relief supplies had been dispatched to the affected area. The army said it had deployed 200 troops to help deal with the disaster. (Writing by Maria Golovnina; Additional reporting by Mehreen Zahra-Malik in Islamabad and David Chance in New Delhi; editing by Mark Heinrich) ======================= 45 killed as 7.8 earthquake strikes Pakistan, shaking felt in New Delhi Published time: September 24, 2013 11:49 Edited time: September 24, 2013 17:05 Get short URL Image from usgs.gov Image from usgs.gov Share on tumblrTags Earthquake, Pakistan At least 45 people have been killed in an earthquake measuring 7.8 which struck southwest Pakistan on Tuesday. Tremors were felt across the region and as far as New Delhi, with the disaster creating a 'new island' in its wake. The local deputy commissioner in Awaran, Abdul Rasheed Gogazai, and the spokesman of Pakistan's Frontier Corps involved in the rescue effort stold Reuters that at least 45 people have been killed. The US Geological Survey has measured the quake at 7.8 magnitude after it struck Balochistan, just 69 km north-northeast of Awaran, the nearest city. A “RED” alert was issued by the agency meaning estimated fatalities of over 1,000 and damages costing over $1 billion. At least 30 percent of houses in the impoverished Awaran district have been destroyed, Abdul Qadoos, deputy speaker of the Baluchistan assembly, told Reuters. Roofs of two schools have collapsed in Awaran, according to Pakistan’s English-language daily The Express Tribune. The paper said that houses have been damaged across the province while the injured are in the process of being escorted to nearby hospitals. This is yet to be officially confirmed. The earthquake also created a new island off Pakistan's Gwadar coastline, according to local paper Express News. The new island stands approximately half a mile into the sea. A bemused crowd reportedly gathered to observe the phenomenon of the new island, which apparently has a mountainous terrain. The quake's epicenter was in a remote area of the country at a depth of just 15km (9.3mi), but was felt as far away as neighboring India. Pakistan's Geo TV said that the earthquake, which struck at 4:29 pm local time, lasted for about two minutes. Pakistani Met office officials say that major damage and loss of life has been averted because of the earthquake’s location in such a remote area. However, they have also forecast impending aftershocks of up to 5 in magnitude on the Richter scale. In India's New Delhi, buildings shook sending people running into the streets, Reuters witnesses said. However, there are 337,980 people within 100km of the epicenter who could potentially be affected, according to the Global Disaster Alert and coordination System (GDACS). In April this year a 7.9 magnitude earthquake struck the Iran-Pakistan border killing 46 people and injuring some 180 others. Houses collapsed in the disaster, causing people to flee to the streets out of fear. ================ Summary Location and Magnitude contributed by: USGS National Earthquake Information Center 20 km 10 mi Powered by Leaflet Pakistan 27.000°N, 65.514°E Depth: 20.0km (12.4mi) Event Time 2013-09-24 11:29:48 UTC 2013-09-24 16:29:48 UTC+05:00 at epicenter 2013-09-24 20:59:48 UTC+09:30 system time Location 27.000°N 65.514°E depth=20.0km (12.4mi) Nearby Cities 66km (41mi) NNE of Awaran, Pakistan 116km (72mi) NW of Bela, Pakistan 172km (107mi) NW of Uthal, Pakistan 175km (109mi) S of Kharan, Pakistan 791km (492mi) ENE of Muscat, Oman Related Links •Additional earthquake information for Pakistan •Earthquake Summary Poster •View location in Google Maps Tectonic Summary The September 24, 2013 M7.7 earthquake in south-central Pakistan occurred as the result of oblique-strike-slip type motion at shallow crustal depths. The location and mechanism of the earthquake are consistent with rupture within the Eurasia plate above the Makran subduction zone. The event occurred within the transition zone between northward subduction of the Arabia plate beneath the Eurasia plate and northward collision of the India plate with the Eurasia plate. The epicenter of the event is 69km north of Awaran, Pakistan, and 270km north of Karachi, Pakistan (population 11.6 million). On a broad scale, the tectonics of southern and central Pakistan reflect a complex plate boundary where the India plate slides northward relative to the Eurasia plate in the east, and the Arabia plate subducts northward beneath the Eurasia plate in the Makran (western Pakistan). These motions typically result in north-south to northeast-southwest strike-slip motion at the latitude of the September 24 earthquake that is primarily accommodated on the Chaman Fault, with the earthquake potentially occurring on one of the southern-most strands of this fault system. Further, more in-depth studies will be required to identify the precise fault associated with this event. Although seismically active, this portion of the Eurasia plate boundary region has not experience large damaging earthquakes in the recent history. In the past 40 years, only one significant event (M6.1), which killed 6, has occurred within 200km of the September 2013 event, in July of 1990. Seismotectonics of the Middle East and Vicinity No fewer than four major tectonic plates (Arabia, Eurasia, India, and Africa) and one smaller tectonic block (Anatolia) are responsible for seismicity and tectonics in the Middle East and surrounding region. Geologic development of the region is a consequence of a number of first-order plate tectonic processes that include subduction, large-scale transform faulting, compressional mountain building and crustal extension. Mountain building in northern Pakistan and Afghanistan is the result of compressional tectonics associated with collision of the India plate moving northwards at a rate of 40 mm/yr with respect to the Eurasia plate. Continental thickening of the northern and western edge of the India subcontinent has produced the highest mountains in the world, including the Himalayan, Karakoram, Pamir and Hindu Kush ranges. Earthquake activity and faulting found in this region, as well as adjacent parts of Afghanistan and India, are due to collisional plate tectonics. Beneath the Pamir-Hindu Kush Mountains of northern Afghanistan, earthquakes occur to depths as great as 200 km as a result of remnant lithospheric subduction. Shallower crustal earthquakes in the Pamir-Hindu Mountains occur primarily along the Main Pamir Thrust and other active Quaternary faults, which accommodate much of the region's crustal shortening. The western and eastern margins of the Main Pamir Thrust display a combination of thrust and strike-slip mechanisms. Along the western margin of the Tibetan Plateau, in the vicinity of southeastern Afghanistan and western Pakistan, the India plate translates obliquely relative to the Eurasia plate, resulting in a complex fold-and-thrust belt known as the Sulaiman Range. Faulting in this region includes strike-slip, reverse-slip and oblique-slip motion and often results in shallow, destructive earthquakes. The relatively fast moving left-lateral, strike-slip Chaman Fault system in southeastern Afghanistan accommodates translational motion between the India and Eurasia plates. In 1505, a segment of the Chaman Fault system near Kabul, Afghanistan ruptured causing widespread destruction of Kabul and surrounding villages. In the same region, the more recent 30 May 1935, M7.6 Quetta, Pakistan earthquake, occurred within the Sulaiman Range, killing between 30,000 and 60,000 people. Off the south coast of Pakistan and southeast coast of Iran, the Makran trench is the present-day surface expression of active subduction of the Arabia plate beneath the continental Eurasia plate, which converge at a rate of approximately 20 mm/yr. Although the Makran subduction zone has a relatively slow convergence rate, it has produced large devastating earthquakes and tsunamis. For example, the November 27, 1945 M8.0 mega-thrust earthquake produced a tsunami within the Gulf of Oman and Arabia Sea, killing over 4,000 people. Northwest of this active subduction zone, collision of the Arabia and Eurasia plates forms the approximately 1,500-km-long fold and thrust belt of the Zagros Mountains, which crosses the whole of western Iran and extends into northeastern Iraq. Collision of the Arabia and Eurasia plates also causes crustal shortening in the Alborz Mountains and Kopet Dag in northern Iran. Eastern Iran experiences destructive earthquakes that originate on both strike-slip and reverse faults. For example, the 16 September 1978 M7.8 earthquake, along the southwest edge of the Dasht-e-Lut Basin killed at least 15,000 people. Along the eastern margin of the Mediterranean region there is complex interaction between the Africa, Arabia and Eurasia plates. The Red Sea Rift is a spreading center between the Africa and Arabia plates, with a spreading rate of approximately 10mm/yr near its northern end, and 16mm/yr near its southern end (Chu, D. and Gordon, R. G., 1998). Seismicity rate and size of earthquakes has been relatively small along the spreading center, but the rifting process has produced a series of volcanic systems across western Saudi Arabia. Further north, the Red Sea Rift terminates at the southern boundary of the Dead Sea Transform Fault. The Dead Sea Transform is a strike-slip fault that accommodates differential motion between the Africa and Arabia plates. Though both the Africa plate, to the west, and the Arabia plate, to the east, are moving in a NNE direction, the Arabia plate is moving slightly faster, resulting in the left-lateral, strike-slip motion along this segment of the plate boundary. Historically, earthquake activity along the Dead Sea Transform has been a significant hazard in the densely populated Levant region (eastern Mediterranean). For example, the November 1759 Near East earthquake is thought to have killed somewhere between 2,000-20,000 people. The northern termination of the Dead Sea Transform occurs within a complex tectonic region of southeast Turkey, where interaction of the Africa and Arabia plates and the Anatolia block occurs. This involves translational motion of the Anatolia Block westwards, with a speed of approximately 25mm/yr with respect to Eurasia, in order to accommodate closure of the Mediterranean basin. The right-lateral, strike-slip North Anatolia Fault, in northern Turkey, accommodates much of the westwards motion between the Anatolia Block and Eurasia Plate. Between 1939 and 1999, a series of devastating M7.0+ strike-slip earthquakes propagated westwards along the North Anatolia Fault system. The westernmost of these earthquakes was the 17th August 1999, M7.6 Izmit earthquake, near the Sea of Marmara, killed approximately 17,000 people. At the southern edge of the Anatolia Block lies the east-west trending Cyprian Arc with associated levels of moderate seismicity. The Cyprian Arc represents the convergent boundary between the Anatolia Block to the north and the Africa Plate to the south. The boundary is thought to join the East Anatolia Fault zone in eastern Turkey; however no certain geometry or sense of relative motion along the entire boundary is widely accepted. ================================== Shale gas, oil reshape world energy landscape Content preferences Done File photo shows US workers laying a shale gas pipeline outside Waynesburg, in Pennsylvania . View gallery . . . AFP Frédéric Pouchot 12 hours ago PARIS (AFP) - After unleashing an energy revolution in the United States, shale gas and oil are now becoming energy game-changers worldwide, a break with the past whose ramifications are still unclear. Thanks to the advent of hydraulic fracturing technology -- used to extract oil and gas locked in sedimentary shale rock -- the United States is on track to become the world-number-one oil producer by 2017 and a net exporter by 2030, according to the International Energy Agency (IEA). Besides radically changing the US energy landscape, this "fracking" revolution is also reshaping markets overseas. Thanks to the sudden abundance of cheap natural gas, American electricity suppliers are shunning domestic coal -- leading producers to export it at low prices to Europe and Asia. That trend has revived the appeal of coal-fired power plants in Europe and taken a toll on plans to transition toward gas-burning plants, despite the air-pollution concerns around coal. Energy experts say the United States will also likely begin exporting liquefied natural gas (LNG) to Europe and Asia in the next several years. US authorities have already greenlighted four LNG export terminals. View gallery. "Graphic showing the policy of selected countries on … Graphic showing the policy of selected countries on shale gas and oil extraction. (AFP Photo/dp mhc/ …"We anticipate that from around 2016, we are really going to see volumes of LNG coming out of the United States and they are going to change the way that markets connect over the coming decades," said IEA analyst Tim Gould at a recent conference. "The United States won't export a huge amount of gas, because they'll be looking to keep domestic price levels as low as possible, but eventually there will undoubtedly be more than 10 export terminals geared toward Europe and Asia," said Jerome Ferrier, head of the International Gas Union. With all its new non-conventional output, the United States is now producing more than seven million barrels of oil per day, returning to the level of 25 years ago, said Olivier Appert, head of the French institute for oil and new energies (IFPEN). "The fact that the United States is set to become the top oil producer by 2020, ahead of Saudi Arabia, changes everything," said Appert. While the size and longevity of the American boom are up for debate, it will redraw the world energy-trade map at least temporarily by making North America less dependant on Middle Eastern oil. China is on track to take the United States' place as the world's top oil importer in 2017, its oil bill soaring to $500 billion in 2020, the Wood Mackenzie consultancy calculated last month. The United States' bill for oil imports is meanwhile set to fall from a peak of $335 billion in 2008 to $160 billion in 2020. View gallery. "Workers change pipes at a rig exploring the Marcellus … Workers change pipes at a rig exploring the Marcellus Shale outside the town of Waynesburg in Pennsy …This unexpected turn of events is shaking up the global oil market. At first the world's top crude producers, Saudi Arabia and Russia, considered the fracking boom "a speculative bubble that was about to burst", said Appert. "But today it's becoming a major problem for them," to the point that the Organisation of Petroleum Exporting Countries launched a study on the issue in June, he added. Keen to emulate the American boom, more than a dozen other countries around the world are currently exploring for shale hydrocarbons or moving in that direction. But environmental fears around fracking -- in which a high-pressure mixture of water, sand and chemicals is blasted deep underground to release hydrocarbons trapped between layers of rock -- may stop other countries from embracing the shale revolution with the same fervour as the United States. "The United States is atypical because landowners hold the underground rights to their property, and despite all the local protests, they're encouraged to drill," said Ferrier of the International Gas Union. "It's clear that in Poland, Romania, Great Britain, that won't happen as easily." View gallery. "British police watch an anti-shale gas and fracking … British police watch an anti-shale gas and fracking protest outside parliament in London. (AFP Photo …Energy-hungry China has the world's largest shale-gas reserves, according to preliminary estimates, but recently began exploration returned disappointing initial results. However, "the energy challenges in China are such that the country needs every exploitable resource, and if there's shale gas there, it will probably be tapped," said Ferrier. "The problem will be finding the water for fracking." Europe also faces tricky questions on shale gas. The continent depends heavily on Russian gas, with North Sea deposits quickly running out. The European Union has so far failed to adopt a unified gas strategy, but policymakers consider the issue strategically vital. EU Energy Commissioner Guenther Oettinger said in May that shale gas could be a good bargaining chip in reaching new deals with Russian energy giant Gazprom. ================= Earthquakes Updated: Wed, 10 Apr 2013 In detailBack to top Every day an earthquake happens somewhere in the world. Many are so light that they cannot be detected. Only a small proportion of the more than a million quakes that occur every year actually cause damage. The vast majority are very small and have no impact on the suface, or they occur in sparsely populated areas of the world. Scientists cannot predict when an earthquake will strike, but they have been able to map where earthquakes are most likely to happen. Most of the largest earthquakes occur within the Pacific "Ring of Fire", a horseshoe-shaped band of volcanoes and fault lines circling the edges of the Pacific Ocean. The Earth’s crust is divided into tectonic plates which are constantly moving. Earthquakes, like volcanoes, take place along the plate boundaries. When two plates move past each other, the jagged parts of the plate boundaries get stuck while the rest of the plates keep moving. Eventually, when the plates have moved far enough, the edges suddenly become unstuck, causing an earthquake. Underwater earthquakes, or landslides caused by an earthquake, can trigger tsunamis – large water waves that can cause widespread damage when they hit land. Anecdotal evidence suggests that animals show unusual behaviour before an earthquake. There have been reports of creatures leaving their homes ahead of an earthquake, but more research needs to be done in this field. Deadly impactsBack to top Earthquakes usually have the greatest impact in poorer countries. The main reason is building quality and regulations - buildings can now be designed to withstand significant levels of shaking, at slightly higher cost. Poorer people's livelihoods are also likely to be more vulnerable. If people aren’t trained in what to do in an earthquake, they are more likely to be killed or injured. In January 2010, Haiti experienced the biggest urban disaster in modern history, when a 7.0 magnitude quake killed more than 200,000 people and left 1.5 million homeless. The main quake was followed by several strong aftershocks. The tremors occurred near the earth’s surface, near a crowded capital city with poorly constructed buildings, and among people who had had little or no training in what to do in an earthquake. In December 2003, an earthquake in the southern Iranian city of Bam wiped it out in just 12 seconds. More than a quarter of the 120,000 population died, and nearly all the survivors were left homeless. The quake measured magnitude 6.5, but it was very shallow, and the city’s traditional architecture meant walls and roofs crumbled as they collapsed, leaving no air pockets and suffocating people inside. Although no structure is 100 percent quake-proof, buildings can be made much safer relatively cheaply, adding less than 10 percent on average to building costs. The cost can be as little as 3 to 4 percent higher when building a safe school, and a 5 to 10 percent increase when building a hospital, the U.N. Secretary-General’s special representative for disaster risk reduction, Margareta Wahlstrom, said soon after the Haiti earthquake. Time is of the essence in saving lives. Usually locals digging with their bare hands save more lives than well-equipped international rescue teams who arrive days after the quake. Terrain is an important factor in the impact of earthquakes. Building on steep slopes and on soft soil foundations increases the chance of buildings sinking or tipping over during an earthquake. The India/Pakistan earthquake of 2005 was magnitude 7.6. It killed nearly 75,000 people – including 16,000 children who were crushed when their classrooms collapsed on top of them. Aftershocks in the mountainous region caused countless landslides, blocking roads and hampering relief efforts. Measuring a tremorBack to top Earthquake size is measured by magnitude, a measure of the amount of energy a tremor releases. The magnitude is usually based on the scale worked out in 1935 by Charles Richter. But the "Richter scale" is unreliable for measuring larger earthquakes and has been heavily modified. The USGS favours describing quakes merely by "magnitude" and gives readings consistent with the Richter scale. Magnitude is the same no matter where you are, or how strong or weak the shaking is on the surface. Every increase of one whole number of magnitude represents a 10-fold increase in intensity. Below is a very rough guide to how magnitudes relate to the amount of shaking on the surface. If an earthquake of high magnitude occurs deep below the earth's surface the amount of shaking will be less than if it occurs nearer the surface. ◦Magnitude 2.5 or less - the earthquake is usually not felt ◦Magnitude 7.0-7.9 - major earthquake, serious damage ◦Magnitude 8.0 or greater - can totally destroy communities near the epicentre. Source: UPSeis Interesting facts: ◦The largest recorded earthquake in the world was magnitude 9.5 in Chile, May 22, 1960. ◦Most earthquakes occur at depths of less than 80 km (50 miles) from the Earth's surface. ◦The world's deadliest recorded earthquake occurred in 1556 in central China, where most people lived in caves carved from soft rock. An estimated 830,000 people died. ◦The earliest recorded evidence of an earthquake dates back to 1831 BC in China's Shandong province. Source: The U.S. Geological Survey's Earthquake Facts page. What to do during an earthquakeBack to top Here's what the American Red Cross says people should do during an earthquake: If you are inside when the shaking starts:◦Drop, cover and hold on. Move as little as possible. ◦If you are in bed, stay there, curl up and hold on. Protect your head with a pillow. ◦Stay away from windows to avoid being injured by shattered glass. ◦Stay indoors until the shaking stops and you are sure it is safe to exit. When it is, use stairs rather than the elevator in case there are aftershocks, power outages or other damage. ◦Be aware that fire alarms and sprinkler systems frequently go off in buildings during an earthquake, even if there is no fire. If you are outside when the shaking starts: ◦Find a clear spot (away from buildings, power lines, trees, streetlights) and drop to the ground. Stay there until the shaking stops. ◦If you are in a vehicle, pull over to a clear location and stop. Avoid bridges, overpasses and power lines if possible. Stay inside with your seatbelt fastened until the shaking stops. Then, drive carefully, avoiding bridges and ramps that may have been damaged. ◦If a power line falls on your vehicle, do not get out. Wait for assistance. ◦If you are in a mountainous area or near unstable slopes or cliffs, be alert for falling rocks and other debris. Landslides are often triggered by earthquakes. Jargon bustingBack to top Fault, fault plane – The edges where two tectonic plates move past each other. Hypocentre – The point at which the earthquake starts below the earth's surface. Epicentre - The point on the earth’s surface directly above the hypocentre. Foreshock – One of a series of smaller earthquakes that sometimes precede a big earthquake in the same place. Aftershock – One of the smaller earthquakes that happen after the main quake. If the mainshock (see below) is large, aftershocks can continue for weeks, months or even years. Mainshock - The main earthquake. Earthquake magnitude - The measured value of the earthquake size. It is a measurement of the size of the largest seismic wave recorded during a quake. The magnitude is the same no matter where you are, or how strong or weak the shaking is in various locations. Earthquake intensity - A measure of the shaking on the earth’s surface created by the earthquake. LinksBack to top For resources, including photos and topographical maps, see the U.S. Geological Survey's Learning Links. The USGS has also produced High Quality Earthquake Animations. For a full set of links to information about earthquakes, see the USGS's Earthquake Topics. The USGS also has information on animals and earthquake prediction. For what to do in an earthquake, see the American Red Cross's Earthquake Safety Checklist To see the latest earthquake alerts, visit: ◦USGS Latest Earthquakes ◦USGS Natural hazards - Earthquakes (Scroll down for latest quakes, with links to further information and local monitoring centres.) ◦The Global Disaster Alert and Coordination System ========================== "I am sure (that) to have some shale gas option is a good instrument for our long-term negotiations (with) Gazprom and Russia," he said. =============================== Scale of damages: Nearly all of Mashkai town flattened, say survivors Injure­d victim­s are underg­oing treatm­ent at Karach­i hospit­als. By Sameer MandhroPublished: September 27, 2013 Share this article Print this page Email . A girl survivor of Balochistan’s deadly earthquake undergoes treatment at PNS Shifa hospital. PHOTO: APP KARACHI: Nearly all of Mashkai, a town of over 25,000 people, has been flattened in Tuesday’s earthquake that jolted the country’s largest, but sparsely populated, province of Balochistan. “It was a doomsday for us,” recalled Karim Dad, an earthquake survivor from Mashkai tehsil of Awaran district, who has come to Karachi for treatment. “There was a huge cloud of dust across the city and I heard cries from every direction.” The62-year-old feels as if the earthquake has ruined everything. Karim brought his wife and another relative to Civil Hospital, Karachi, on Thursday morning through an Edhi Ambulance. His 19-year-old daughter, Fatima, died when she couldn’t leave the room on time. “I had a six-room house but it was completely damaged,” he told The Express Tribune. “My daughter is buried under the debris.” Karim was taking a nap at his house when the house was shaken by strong jolts at around 4:15pm. “My room collapsed within seconds as I left it,” he remembered. According to his rough estimates, over 90 per cent of the houses, shops and other buildings in his home town have been flattened. “We had mud houses and almost all of them collapsed in the first jolts. The remaining ones will also fall down,” he feared. Scale of destruction For people living in far flung areas, it is really hard to imagine the scale of destruction. “The first thing we have to do is recover the bodies,” Karim said. “Then we should provide first aid to the injured persons as countless injured people are waiting for doctors.” By Wednesday afternoon – a day after the earthquake – only three Edhi ambulances managed to make their way to the remote town. “It took us 17 hours to reach Karachi,” said Karim, explaining that driving on the hilly terrain is difficult and most roads are damaged. He still finds it hard to shake away the memories of the countless injured people they met on their way to Karachi. “We couldn’t fit anymore people in the ambulance.” Another old survivor from Mashkai, Haji Abdul Aziz, was looking after his seven-year-old grand daughter, Mahnoor, and daughter Halima. The 67-year-old man lost five family members in the deadly earthquake after they waited for more than 24 hours for help. Hardly able to understand Urdu, Aziz said every house in Mashkai has been destroyed. “More people will die if rescue teams do not reach on time. People need food and medicine urgently.” The late arrival of the rescue teams did not go well with the residents. “We are considered insurgents,” explained an attendant, Yar Muhammad. “Do you think the entire population of our area is a rebel?” Relief efforts All the attendants stressed the need for medical camps in the affected areas, especially Awaran and Mashkai. “Thousands of people are living under the open sky. There is no shelter left for us.” A total of 12 injured survivors have been brought to Civil hospital so far and all of them have minor injuries, according to a medical officer. Meanwhile, Pakistan Relief Foundation chairperson Haleem Adil Sheikh said he was trying to take five truck loads of relief goods with him but he was stopped by the Frontier Constabulary. They told him that the law and order situation was not stable enough for a high-profile person to go there. Other vehicles that were part of large convoys were, however, allowed to go on. Published in The Express Tribune, September 27th, 2013. =============== Published time: September 30, 2013 01:44 Get short URL Photo by NASA Photo by NASA Share on tumblrTags Earthquake, History, Natural disasters Amidst the destruction caused by the devastating earthquake in Pakistan that killed more than 500 people, a new island emerged from the depth of the sea. NASA has released images of the newly formed islet. NASA has released before and after photos of a new terrestrial body that was born on September 24 during a quake that struck Pakistan. Called Zalzala Jazeera, or a an earthquake island, the terrestrial formation can now be found 380 kilometers from the earthquake’s epicenter in Paddi Zirr Bay near Swadar, Pakistan in the Arabian Sea. The first image of the island was taken by NASA’s Earth Observing-1 satellite on September 26, while the second snapshot shows the same bay on April 17 with water and no landmass around the coordinates that the new island now inhabits. Photo by NASAPhoto by NASA Photo by NASAPhoto by NASA According to scientists, the depth of the water level around Zalzala Jazeera stands at about 15 to 20 meters, stretching 75 to 90 meters across. It lies approximately one mile from the shore. Scientists say the island is nothing more than just a pile of mud, sand and solid rock that was caused by the forces of highly pressurized gas. “The island is really just a big pile of mud from the seafloor that got pushed up. This area of the world seems to see so many of these features because the geology is correct for their formation. You need a shallow, buried layer of pressurized gas—methane, carbon dioxide, or something else—and fluids. When that layer becomes disturbed by seismic waves (like an earthquake), the gases and fluids become buoyant and rush to the surface, bringing the rock and mud with them,” Bill Barnhart, a geologist at the US Geological Survey told NASA’s Earth Observatory. The Earth Observatory says this is not the first island to have surfaced along the 700-kilometer-long coast over the past century. Scientists predict that the new island will remain above surface for up to a year before sinking back into the Arabian sea. The island rose out of the water during a 7.7-magnitude earthquake that struck Balochistan, just 69 km north-northeast of Awaran - the nearest Pakistani city - on 24 September 2013. Over 300,000 people were affected by the quake, which caused over 500 deaths, and some 21,000 houses were destroyed. People use boats as they visit an island that rose from the sea following an earthquake, off Pakistan's Gwadar coastline in the Arabian Sea September 25, 2013.(Reuters / Stringer)People use boats as they visit an island that rose from the sea following an earthquake, off Pakistan's Gwadar coastline in the Arabian Sea September 25, 2013.(Reuters / Stringer)

North Carolinians could be forced to accept fracking on their property

By John Upton Donald Lee Pardue Forced fracking could be coming to Chatham County, N.C. Not willing to sell out to frackers? If you’re a property owner living above natural gas reserves in North Carolina, you might not have a choice. A panel charged by the state’s legislature with developing hydraulic fracturing guidelines recommended Wednesday that property owners be forced to allow drilling beneath their property if enough of their neighbors want it. From the Associated Press: A panel commissioned by state government said Wednesday that forced fracking should be allowed in North Carolina. Forced or compulsory pooling allows the state to let energy companies drill into natural gas reserves under non-consenting property owner’s land. Property owners in the state receive a percentage of the profits from gas extracted from under their property. The study group recommended at least 90 percent of acreage of a drilling area be voluntarily leased before remaining property owners are forcibly pooled. The News & Observer reports that the recommendation is expected to be adopted by the state legislature this fall. More from the article: The proposal by a state study group endorses a rarely used 1945 law that’s never been tried here on the kind of scale that would be required for shale gas exploration, or fracking. Thousands of property owners could potentially be affected in the state’s gas-rich midsection in Lee, Moore and Chatham counties. … “We are talking about a for-profit industry taking away personal freedoms with the blessing of the government,” Therese Vick, a community activist with the Blue Ridge Environmental Defense League, told the Compulsory Pooling Study Group. Taking away those personal freedoms is already the norm in some states. In Ohio, there’s an unofficial guideline stating that if 90 percent of property owners in an area consent to the sale of a gas deposit, everybody else has to sell out to frackers too, according to the Compulsory Pooling Study Group’s draft report [PDF]. In Kentucky, the figure is 51 percent. In Virginia, it’s just 25 percent. John Upton is a science fan and green news boffin who tweets, posts articles to Facebook, and blogs about ecology. He welcomes reader questions, tips, and incoherent rants: johnupton@gmail.com. ============= Fracking boom could lead to housing bust By Roger Drouin thinkpanama When it comes to the real estate market in Bradford County, Pa., where 62,600 residents live above the Marcellus Shale, nothing is black and white, says Bob Benjamin, a local broker and certified appraiser. There aren’t exactly “fifty shades of grey,” he says, but residential mortgage lending here is an especially murky situation. When Benjamin fills out an appraisal for a lender, he has to note if there is a fracked well or an impoundment lake on or near the property. “I’m having to explain a lot of things when I give the appraisal to the lender,” he says. “They are asking questions about the well quite often.” And national lenders are becoming more cautious about underwriting mortgages for properties near fracking, even ones they would have routinely financed in the past, Benjamin says. That’s a real problem in Bradford County, where 93 percent of the acreage is now under lease to a gas company. Local banks are still lending because they have to if they want the business in the county, according to Benjamin, who has been involved in the area’s real estate market since 1980. But, he says, “The big boys, Wells Fargo and the other banks are probably pretty similar, they are going to protect their butt.” Lawyers, realtors, public officials, and environmental advocates from Pennsylvania to Arkansas to Colorado are noticing that banks and federal agencies are revisiting their lending policies to account for the potential impact of drilling on property values, and in some cases are refusing to finance property with or even just near drilling activity. Real estate experts say another problematic trend is that many homeowners insurance policies do not cover residential properties with a gas lease or gas well, yet all mortgage companies require homeowners insurance from their borrowers. “Well, that is a conflict,” says Greg May, vice president of residential mortgage lending at Ithaca, N.Y.-based Tompkins Trust Company. Last month, a landowner in Madison, N.Y., was surprised when their insurance company refused to renew their homeowners policy because there is a conventional gas well on their property. While the media and environmental groups have focused on shale drilling’s potential to poison the soil, water, and air, they’ve largely overlooked its potential to poison the real estate market. “I think we are on the tip of this,” says Steve Hvozdovich, Marcellus Shale coordinator for Clean Water Action in Pennsylvania. “Whether you are the homeowner trying to get homeowners insurance or the neighbor [to a fracking site] who is trying to refinance, there are just so many tentacles to this. I don’t think people are grasping all the impacts of natural gas drilling.” Benjamin doesn’t often hear property owners talk about the issue. “I don’t think most are concerned about it,” he says. “But I think they may have to be in the future.” The first denial Brian and Amy Smith live across the street from a new gas well in Daisytown in Washington County, Pa., an hour south of Pittsburgh. Last year, when they applied for a new mortgage on their $230,000 home and hobby farm, they were denied. According to ABC affiliate WTAE, this appears to be the first example in western Pennsylvania of a homeowner being denied a mortgage because of gas drilling on a neighbor’s property: In an email, Quicken Loans told the Smiths, “Unfortunately, we are unable to move forward with this loan. It is located across the street from a gas drilling site.” Two other national lenders also turned down Brian Smith’s application. “I think a lot of folks nationally are watching this case,” says Rep. Jared Polis (D-Colo.), a congressman who represents areas north and west of Denver. He noted that in his home district fracking leads to a “haircut on a property’s values.” “I think it is something that the banks would frankly be smart to look at,” Polis says. Elisabeth N. Radow, a lawyer and chair of the League of Women Voters of New York State’s Committee on Energy, Agriculture and the Environment, says the Smiths’ story shows that property owners are clearly vulnerable to what happens on their neighbors’ land in fracking territory. “A [fracking] gas well brings commercial activity, can pollute drinking water and devalue the property.” Radow says it’s logical that high-volume horizontal fracturing — an operation in which millions of gallons of water mixed with hundreds of chemicals are pumped horizontally into layers of shale — has lenders worried. “They are trying to protect themselves,” she says. Radow advises people looking to purchase a home anywhere with drilling to do their homework before buying. She predicts that homeowners will start seeing mortgage provisions prohibiting gas drilling. She saw one earlier this month from New Jersey, where the gas industry is lobbying Gov. Chris Christie (R) to open the Delaware River basin to fracking. The Obama administration has so far taken a hands-off approach to regulating fracking, as have many states, so the banks are trying to figure out how to proceed in uncertain territory. “What is the federal government doing to protect the Smiths of the world?” asks John R. Nolon, a land-use and property professor at Pace Law School. “Banks are out there on the frontier of this regulatory chaos saying, ‘We can’t assure ourselves this is a safe technology because there is this fragmented regulatory process.’” A very clear stance The “Mineral, Oil and Gas Rights Rider” [PDF] on loan paperwork from Sovereign Bank says the mortgage will be automatically recalled if the property owner transfers any oil or gas rights or allows any surface drilling activity. It also specifies that owners must “take affirmative steps to prevent the renewal or expansion” of a current gas lease. A spokesperson for Sovereign Bank said the company would not comment for this story. May, the lending firm vice president from Ithaca, says he is neither pro- nor anti-fracking, but he thinks property owners and prospective buyers need to be aware of these kinds of mortgage issues. “That is one of the top lenders that has taken a very clear stance,” May says of the Sovereign Bank document. “We need to pay attention to this.” Another big unknown is how homeowners might be affected by horizontal drilling happening underneath their property, May said. “Horizontal drill bores radiate out from the vertical bore up to one mile in each direction, which could potentially impact other owners’ fee-simple real estate ownership,” May says. The problems are here Twelve hundred miles southwest of Bradford County, Connee Robertson and her husband run an animal rescue center on 1.6 acres overlooking Little Red River in Heber Springs, Ark. Robertson moved to the area in 1993 because she fell in love with this part of the Ozarks known for its pristine rivers and lakes. That was before gas companies such as Chesapeake Energy discovered the Fayetteville shale formation in the early 2000s. Once that happened, the majority of property owners in Heber Springs leased their gas rights. “Everyone saw dollar signs,” Robertson says. “Everyone ends up regretting it. The problems are here now.” Over the past few years, those problems have included earthquakes and drilling crews pulling water out of the Little Red River. One of Robertson’s horses died for unknown reasons, and her neighbors’ wells have been polluted. More recently, Robertson has heard about buyers unable to purchase homes in the area because they can’t secure financing. In the Laurel Highlands area of Pennsylvania’s Allegheny Mountains, traditionally known for tourism and recreation, drilling is scaring off prospective second-home buyers before they even start thinking about mortgages, says Melissa Troutman of the Mountain Watershed Association. She knows of one buyer who left the market after they learned that there was drilling three and a half miles from a home they were looking at. In technical default Many of the largest mortgage institutions have already enacted policies that bar lending to certain properties near gas drilling and gas lines. The Federal Housing Administration’s lending guidelines prohibit financing for homes within 300 feet of a property with “an active or planned drilling site.” In an email response to a question from Grist, FHA spokesman Lemar Wooley explained the reasoning behind the guidelines: FHA is primarily concerned with the health and safety of the occupants of the dwelling. If the property is subject to smoke, fumes, offensive noise and odors, etc. to the extent they would endanger the health of the occupants then the property is ineligible. FHA is also concerned with the risk to the insurance fund. So if the property is subject to those same items and the health of the occupants is not endangered, but the marketability of the property is compromised, the property may not be eligible for FHA insurance. Fannie Mae and Freddie Mac also prohibit property owners from signing a gas lease. May said many owners are now in “technical default” under the terms of their mortgage if they signed a gas lease without first getting consent from their lender. Another clause in Fannie Mae and Freddie Mac mortgages prohibits hazardous materials on a residential property. “It comes as a surprise to a lot of people. They weren’t aware that their mortgage came with those restrictions,” May said. Back in Bradford County, Benjamin, who plans to retire in 10 or so years, hasn’t decided whether he wants to keep his family in the area, where there are “good and bad points” to the drilling boom. But he knows one thing for sure: Fracking “changed everything” in the region’s real estate market. Roger Drouin is a freelance journalist who covers environmental issues. When he’s not reporting or writing, he is out getting almost lost in the woods. He blogs at rogersoutdoorblog.com. =======================

Analysis: At margins of shale oil boom, a tempered euphoria

Analysis: At margins of shale oil boom, a tempered euphoria Mon, May 20 00:09 AM EDT By Kristen Hays and Jonathan Leff HOUSTON/NEW YORK (Reuters) - For the past three years, the boom in the U.S. shale oil industry has outstripped all expectations. Production surged far faster than any forecasts; drillers raced to secure space in new pipelines to get their crude to market. Now, at the periphery, that may be changing - at least for a while. News from two of the country's less developed shale plays in Colorado and Ohio last week offer a reality check for the wave of euphoria that has washed across the industry. The stumbles mark a break from the past few years, when nearly every new project was an overnight success and output grew and grew. On Thursday, Ohio, home to the Utica shale, finally released annual data on 2012 production that showed the state pumped less than 700,000 barrels of oil from its shale wells -- barely enough to fill a small oil tanker. North Dakota's Bakken shale pumps more than that every day. Even state officials said it the result was "lower than initially estimated." The day before, NuStar Energy LP had said it would shelve a plan to reverse a pair of underused refined products pipelines to ship crude from Colorado's Niobrara shale oil play to Texas. It failed, twice, to garner enough commitments from potential customers to justify investing in the conversion. Neither development was a surprise to industry experts, and both were likely affected by extenuating circumstances. A growing preference for rail shipments likely dimmed interest in long-term commitments to use NuStar's pipeline. Ohio's shale may yet offer up large volumes of liquid gas and condensate, if drillers can find new ways to coax it out. Yet taken together they offered a sign that the flush of enthusiasm and rush of investment that piled into shale fields from one coast to the other has hit a curve. While the basic technologies of hydraulic fracturing and horizontal drilling was enough to coax an unexpected gusher of oil from shale rock in many regions, these more challenging seams may require incremental innovation to unlock. "This is all about technology," said Sandy Fielden, an analyst at RBN Energy in Austin, Texas. "The bottom line is that this stuff is down there, it's just figuring out the sweet spot of where to get it and the right conditions to get it out." For now, few are questioning the notion that the booming Bakken and Eagle Ford and Permian Basin in Texas will keep growing, driving domestic oil production beyond its highest in two decades and shrinking America's reliance on imports. But the breakneck pace of the past three years was unlikely to last forever. "The companies have established their acreage positions, they have established sweet spots, but there are still a number of really enormous challenges in understanding how to most efficient and effective ways to maximize production in the long run," Pete Stark, senior research director at IHS. "We're in the start of the second inning in a nine-inning ball game as far as know-how." LIVING UP TO HOPES Niobrara and Utica are not the first shale plays to disappoint investors. Michigan's Collingswood enjoyed a mini-boom for a few months in 2010; California's huge Monterey shale has thwarted drillers for years. Yet the scale of the let-down is remarkable. Just two years ago, Chesapeake Energy's former CEO Aubrey McClendon put the Utica on the map, proclaiming it could hold a $500-billion bounty and that it would be the "biggest thing to hit Ohio since the plow". Oil companies including Total spent billions of dollars buying drilling rights. State geologists estimated that it could hold between 1.3 billion and 5.5 billion barrels of oil reserves, a vast sum. "The Utica has failed so far to live up to its hype," said Ed Morse, managing director of commodity research at Citigroup. According to Reuters calculations, the average oil production per well per days the well was active, was 80 barrels per day - about one-tenth what it is in North Dakota. Jonathan Garrett at Wood Mackenzie in Houston says the Utica may yet prove to be a successful natural gas development, with close proximity to the East Coast demand center. But with natural gas trading at a low $4 per million British thermal units for the foreseeable future, that is not the outcome drillers had hoped for a few years ago. RAILS TRUMP PUMPS In Colorado, where oil production has risen by less than 100,000 bpd since serious development began on the Niobrara several years ago, NuStar's biggest problem was likely competition -- from other pipelines and railways. SemGroup Corp is building a 527-mile (848-km) crude pipeline to move oil from Colorado to the U.S. crude futures hub in Cushing, Oklahoma, by the first half of 2014, and already has twice expanded its capacity. Plains All American Pipeline LP is expanding and building new rail capacity in Colorado to haul oil out by train later this year. Those projects combined will be able to move 230,000 bpd, on top of 30,000 to 40,000 bpd of Niobrara crude that already goes to Suncor Energy's 93,000 bpd refinery in Commerce City, Colorado. "We're at a point now where we're going to see some of these lower-quality projects weeded out," said Bradley Olsen, director of midstream research at Tudor Pickering Holt & Co in Houston. That surpasses current output in the play's so-called sweet spots - the Denver-Julesburg (DJ) and Powder River Basin (PRB) - which reached 170,000 bpd as of January this year, according to energy consultancy Bentek. The consultancy projects output to rise to 235,000 bpd by the end of 2013. The option to ship crude by rail is attractive to oil producers who are uncertain how long their wells may keep pumping out crude. Rail terminals are less expensive to build, can start up faster and do not require long-term contracts sought to justify the cost of building or converting pipelines. Refiners also like being able to pick up the cheapest oil at the moment from one of dozens of rail terminals rather than be tied to a certain type of crude for five or 10 years. "It could come from Niobrara. It could come from Bakken. It could come from West Texas. And that's one of the nice things about rail systems -- there's flexibility to move those cars around to market to provide the greatest opportunities," Alon Energy USA Chief Executive Paul Eisman said this month. (Reporting by Kristen Hays; Editing by Marguerita Choy)

UPDATE 2-Hunting cautious on shrinking gas extraction market

UPDATE 2-Hunting cautious on shrinking gas extraction market Thu, Mar 07 07:04 AM EST * Pretax profit jumps 55 percent in 2012 * Hunting sees slow start to 2013, improving in H2 * Expects more competition stemming from weak gas price * Plans final 2012 dividend of 14.0 pence By Alice Baghdjian LONDON, March 7 (Reuters) - British oil services firm Hunting reported a jump in 2012 profits but gave a cautious outlook for 2013, saying low prices were discouraging drilling for gas in the United States, shrinking the market for extraction services. "There is a smaller market - instead of rigs chasing for (both) oil and gas, all they can chase for is the oil market...We'll continue to achieve our market share but will no doubt meet increased competition," Hunting's finance director Peter Rose told Reuters. Hunting posted a 55 percent jump in pretax profit for 2012 to 123.6 million pounds ($186 million), compared with the 79.8 million it made a year earlier. Profits were bolstered by activity in the Gulf of Mexico returning to levels seen before BP's 2010 oil spill, stable U.S. crude oil prices, as well as a full year's contribution from acquisitions completed in 2011, the company said. Shares in the firm were down 1.88 percent by 1130 GMT to 914 pence, having risen some 18 percent so far this year, outperforming the broader sector. The company, which manufactures products used by oil firms to construct and maintain wells, has benefited from huge growth in demand for its products from operators in the booming U.S. shale oil and gas market in recent years. Oil and gas firms are increasingly reliant on services companies to help extract the shale hydrocarbons, which can be more difficult and costly to remove than conventional oil and gas. Hunting said an increase in active offshore drilling units in the Gulf of Mexico and elsewhere helped to offset the shift from gas to liquids in North America, with a 13 percent decline in the number of active onshore rig units there in 2012. The company said that the first six months of 2013 would be flat, but added business should pick up later in the year, alongside a modest increase in onshore drilling throughout 2013. "While the Board is mindful of the current geopolitical and economic issues which prevail, it is confident of delivering a further satisfactory year," Hunting's chief executive Dennis Proctor said in a statement. A surprise profit warning in January from Saipem, Europe's biggest company in the industry, sent shockwaves through what was seen as a buoyant sector. A vague outlook forecast from peer Petrofac last week also weighed on the sector.

CNOOC to buy Nexen for $15.1 billion in China's largest foreign deal

Mon, Jul 23 17:44 PM EDT 1 of 3 By Lee Chyen Yee and Jeffrey Jones HONG KONG/CALGARY (Reuters) - State-controlled CNOOC Ltd launched China's richest foreign takeover bid yet on Monday by agreeing to buy Canadian oil producer Nexen Inc for $15.1 billion, forcing Ottawa to decide whether security concerns outweigh its desire for foreign investment in its energy resources. CNOOC, China's third-largest oil company, hopes to sell the deal to shareholders and the government with a hefty 61 percent premium to Nexen's Friday stock price. It promised to retain all employees and to make Canada home base for its Western Hemisphere operations. CNOOC is offering $27.50 cash a share for Nexen, which has oil sands operations in the Canadian province of Alberta, shale gas in the province of British Columbia and extensive exploration and production holdings in the North Sea, Gulf of Mexico and offshore West Africa. The initial shareholder reaction was enthusiastic. Shares of Nexen, whose board unanimously approved the deal, surged C$9.06, or 52 percent, to C$26.35 in Toronto on Monday. "You won't find a single shareholder on the entire planet, or in the solar system, who is unhappy with this deal," said David Taylor, president and chief investment officer of Taylor Asset Management. The move is the most ambitious foray by resource-hungry China into North American energy since a 2005 attempt to buy U.S.-based Unocal for $18.5 billion was thwarted by a political backlash there. Chinese companies have been among the most aggressive in targeting assets around the globe to help feed demand in the world's second-biggest economy. As for Canada, Prime Minister Stephen Harper has pushed to attract more energy investments from China. The CNOOC deal shows his efforts are bearing fruit, and Canada has more reasons to accept the deal than to veto it. "For Canada, this agreement provides a stable source of investment for the many projects that Nexen operates, which includes the exploitation of bitumen in Alberta," CNOOC Chief Executive Li Fanrong said in a conference call. "Because we intend to be a local company as much as a global one, we also intend to seek a listing for CNOOC Ltd on the Toronto Stock Exchange." The deal is subject to a review by the Industry Ministry, which by law must decide if the takeover would bring a "net benefit" to Canada. In its favor is both CNOOC's commitments to Canada, and the fact that Nexen's operations are mostly outside Canada. CNOOC has only nine years worth of reserves based on its current production -- one of the lowest ratios among major oil companies worldwide. It said the deal would increase its proven reserves by 30 percent. "CNOOC has been seeking overseas acquisitions, as the domestic reserves are limited. But there has been many limits, things like foreign companies (being) reluctant to sell, price too high. This deal would be quite a success," said Yan Shi, an oil analyst at brokerage UOB Kay Hian in Shanghai. The move was quickly followed by another Chinese play for Canadian-owned oil assets, as Sinopec Corp said it would buy 49 percent of Talisman Energy's British unit for $1.5 billion. CNOOC already has partnerships with Nexen, once a unit of Occidental Petroleum Corp. The Canadian company recently underwent a management shake-up and has been seen for years as a potential target. Analysts had talked of Nexen as a turnaround story since Kevin Reinhart took over as interim CEO early this year. He won kudos for improving the reliability of such projects as the huge Buzzard oil field in the North Sea after years of missed production targets. "I've watched this company try to turn itself around for so long," Taylor said. I'm not saying they couldn't have done it this time, I'm just saying that some of their assets are extremely tricky and complicated and there are a lot of unknowns." Taylor said a rival bid is unlikely to emerge, given the huge premium and the fact that CNOOC is offering all cash. Nexen is one of his top 10 holdings in the IA Clarington Focused Canadian Equity Class and Focused Balanced Fund. Yet Nexen's C$6.1 billion Long Lake oil-sands development, for example, is several years behind schedule in reaching capacity production. Such persistent problems have kept the stock well below the company's net asset value, said Norman MacDonald, vice president and portfolio manager at Invesco Trimark. REGULATORY QUESTIONS CNOOC made its first, tentative Canadian investment in 2005, paying C$122 million ($120.8 million) for a 16.7 percent share of the then-private oil sand developer MEG Energy Corp. It completed a C$2.1 billion acquisition of Opti Canada Ltd in November, winning a second stake in a Canadian oil sands company and a share in Long Lake. The Canadian deals have not yet stirred the political opposition that killed CNOOC's $18.5 billion Unocal bid. Still, Canada must review any foreign investments worth more than C$330 million and can block them if it thinks a deal is not in the country's best interests. It exercised that right in 2010 when it blocked Anglo-Australian miner BHP Billiton's $39 billion hostile takeover of Potash Corp, the world's top fertilizer producer. Canada's industry minister confirmed he will conduct a review, focusing on such aspects as the effect of the deal on economic activity, the degree of participation by Canadians in the business and the impact on competition. That said, only 28 percent of Nexen's production and 11 percent of its cash flow are derived from Canadian operations, CIBC World Markets analyst Andrew Potter said. That may help CNOOC pass muster with Investment Canada. In addition, it would be difficult for Harper to quash the deal after touting investment opportunities throughout Asia. Still, Ottawa must consider the precedent such a pricey deal will set, said Gordon Houlden, head of the University of Alberta's China Institute and a former diplomat in China. "I do not believe the government would contemplate, let's say, 10 purchases of this order, which would be well within China's means," Houlden said. "If you (spent) $30 to $50 billion you could take out almost all of the largest Canadian energy companies, and I don't think that it would be the government's plan to have a wholesale transfer of ownership from Canada to China of those assets." REASONABLE PRICE FOR CNOOC According to Thomson Reuters data, the takeover would be bigger than any foreign deal completed to date by a Chinese company. Buying Nexen also would make CNOOC the operator of Buzzard, the largest oil field in the UK and the biggest contributor to Forties Blend crude. Forties is the largest of the four North Sea crude oils that form the Brent oil benchmark, and the crude that usually sets the value of dated Brent, the benchmark for pricing more than half of the world's oil. BMO Capital Markets and Citigroup Global Markets Inc advised CNOOC, while Nexen was advised by Goldman Sachs and RBC Capital Markets. CNOOC said Nexen's debts of about $4.3 billion would remain outstanding and it hoped to complete the deal by the fourth quarter of 2012. ($1 = 1.01 Canadian) (Additional reporting by Fayen Wong, Aizhu Chen, Xu Wan and Charlie Zhu in China bureaus; Claire Sibonney and Euan Rocha in Toronto; David Ljunggren in Ottawa; Writing by Jeffrey Jones, Neil Fullick and Andrew Callus; Editing by David Holmes and Frank McGurty) === SEC alleges insider trading ahead of CNOOC-Nexen deal Sat, Jul 28 05:56 AM EDT WASHINGTON (Reuters) - The U.S. securities regulator filed a complaint in court on Friday against a firm controlled by a Chinese billionaire and other traders, accusing them of making over $13 million from insider trading ahead of a bid by China's CNOOC for Canadian oil company Nexen Inc. The Securities and Exchange Commission said the federal court in Manhattan had frozen assets worth over $38 million belonging to Hong Kong-based Well Advantage, controlled by businessman Zhang Zhirong, and other unnamed traders who used accounts in Hong Kong and Singapore to trade in Nexen stock. They made trading profits of $7 million and $6 million respectively by using inside knowledge of the merger to buy Nexen shares before the announcement, the SEC says. The trading was suspicious, the SEC claims in its complaint, because the accounts used to buy the shares had 'either no history or extremely limited history" of buying Nexen shares before July 2012. CNOOC said on July 23 it had agreed to acquire Nexen for $15.1 billion, China's biggest foreign takeover bid. Shares of Nexen jumped almost 52 percent that day. The unnamed Singapore traders used accounts in the names of Phillip Securities and Citibank, while Well Advantage made its trades through accounts held at UBS Securities and Citigroup Global Markets. Neither of the Well Advantage accounts had traded Nexen shares since January 2012, and the Citigroup account had been completely dormant for over six months. Zhang Zhirong also controls China Rongsheng Heavy Industries Group Holdings, which according to a company filing in October 2010, entered a strategic cooperation agreement with CNOOC. A spokeswoman for CNOOC declined to comment. Calls to Well Advantage's office in Hong Kong were not answered on Saturday. Hong Kong's Securities and Futures Commission also declined comment while officials at the Monetary Authority of Singapore were not immediately available. The SEC does not allege any wrongdoing by Zhang, but notes that he is the controlling shareholder of a company that engages in significant business activities with CNOOC. Zhang was ranked the 22th richest Chinese person by Forbes Magazine in September 2011. But his net worth fell by more than half in the past year to $2.6 billion in March 2012 as shares of Rongsheng tumbled. The stock ended at HK$1.4 on Friday against an IPO price of HK$8.0 fixed in November 2010.

Well-timed bullish bets in Nexen options ahead of the announcement also raised eyebrows among some market watchers on the day the deal was announced. "Well Advantage and these other traders engaged in an all-too-familiar pattern of misusing inside information to place extremely timely trades and profit handsomely from their illegal acts," said Sanjay Wadhwa, deputy chief of the market abuse unit in the SEC's enforcement division.

In addition to freezing the traders' assets and directing them not to destroy any evidence, the SEC is seeking a judgment "ordering the traders to disgorge their ill-gotten gains with interest, pay financial penalties, and permanently bar them from future violations," according to a statement. The SEC is cracking down on insider trading, it says, having brought 57 insider trading actions in the financial year 2011 against 124 individuals and entities, a nearly 8 percent increase in the number of filed actions from the prior fiscal year. Wadhwa acknowledged in his statement "the challenges of investigating misconduct in the U.S. by trading accounts located overseas," and the SEC will have to work with regulators in Hong Kong and Singapore where the alleged insider trading took place. (Reporting by Aruna Viswanatha, additional reporting by Lawrence White, Kelvin Soh and Alison Leung in HONG KONG; Rachel Armstrong in SINGAPORE; editing by Raju Gopalakrishnan) ============

Australian gas users fear shortage as LNG exports grow

Wed, May 16 03:44 AM EDT * Gladstone LNG hub may drain east coast gas supplies * Miner Rio Tinto says having problems securing gas supplies * Some domestic buyers press for government intervention * Gas producers say higher prices to boost supply By Rebekah Kebede and Sonali Paul ADELAIDE/MELBOURNE, May 16 (Reuters) - Australia is on its way to becoming the world's top exporter of liquefied natural gas, but industrial consumers on the country's east coast are worried gas producers will ship so much to Asia's booming economies that domestic supplies will be tight. East coast gas will flow to international buyers via three multi-billion dollar LNG projects under construction near Gladstone and due to open in 2014 and 2015. Exports will drive up the price of gas, which previously had no outlet other than the landlocked regional market. Big gas consumers such as power generators, miners and manufacturers will have to match Asian prices to keep gas at home, but are concerned even that may not be enough to beat buyers in China, Japan and South Korea to secure supplies. Gas producers may find selling large volumes in single long-term deals is potentially more attractive than splitting up the volumes for many shorter-term deals to local consumers. "We are looking at a gas supply shortage," New South Wales resources and energy minister Chris Hartcher told reporters. "We need assurances from producers around price structure and security of supply and we have no guarantee on either right now," Hartcher added an industry event in Adelaide, noting New South Wales state has a million customers using gas, Big consumers such as power generators, miners and manufacturers in the east, home to the bulk of the population, are pressing the government to ensure their access to supplies. "Gladstone is going to be like a giant vacuum cleaner for the East Coast gas market hoovering up all the gas it can get its hands on," Michael Fraser, chief executive of power firm AGL Energy, said in a speech last month. He said annual demand for east coast gas could more than triple from about 12 million tonnes now to 46 million tonnes if the projects underway at Gladstone and another on the drawing board are completed. Miner Rio Tinto and fertiliser maker Incitec Pivot , which needs gas to produce ammonia, have raised concerns about supply and prices, with manufacturers calling for producers to be made to keep some gas for domestic supply. "Rio Tinto is actively seeking gas in the Queensland market for the 2015 period (and beyond), but is finding it difficult to secure firm offers for future supply, largely due to uncertainty with many producers balancing reserve growth, existing contract commitments and market expectations," the company said in a submission to the government's energy policy review. Producers are already seeking export-type prices for long term gas contracts to manufacturers. Suppliers are asking Incitec Pivot for double current prices or more in negotiations for new contracts, Incitec spokesman Stewart Murrihy said. Electricity producers have also faced hurdles in locking in supplies, according to the National Generators Forum (NGF), an electricity industry association. Gas producers are reluctant to commit to new supply contracts from the time Gladstone projects are due to come on line, preferring to see if they can sell into export markets or achieve a higher price domestically once exports start. "If you're a local gas producer in Australia and you have the option of selling your gas into an LNG manufacturer or selling it domestically, then you'll want to get a price that's commensurate with what the LNG projects are willing to pay," Peter Strachan, an analyst with Stock Analysis in Perth said. Hartcher said that the state government has yet to decide on policy steps aimed at guaranteeing supplies. It is considering options such as requiring gas producers to reserve some volume for domestic supply or introducing a royalty scheme that would give producers incentives to supply the local market, he said. Australia's resources minister is due to complete an energy policy review later this year focusing on energy security. "I am paying close attention to the suggestions that there are difficulties in negotiating long term gas supply contracts," Martin Ferguson told Reuters on the sidelines of a trade event. Both Ferguson and Hartcher said they would like to see the issue resolved by encouraging producers to pump more gas. One of the obstacles to doing that is opposition to the development of unconventional gas in Australia on environmental grounds. Much of the gas reserves on the east coast are unconventional, such as coal seam and shale gas. Farmers and environmentalists have banded together to protest against drilling due to concerns about its impact on water supplies. PRICES DOUBLE On the other side of the country, Western Australia has already seen gas prices rise to near parity with export prices. Gas there sold for around A$9.50 per million British thermal units (mmBtu) last year, nearly double the price in Sydney and around four times the price in some other eastern state areas, according to the Bureau of Resources and Energy Economics. Prices have risen there despite the Western Australian government's requirement for producers to keep 15 percent of gas from new developments for the domestic market. Producers say high prices in the east would encourage them to develop more fields. "We passionately believe that (reserving supply) would be the wrong thing to do," Santos Chief Executive David Knox told reporters this week at an industry event in Adelaide. "Australia has plenty of gas in the ground ... to unlock the molecules we need good prices." Santos, operator of one of the Gladstone projects, would prefer to see a scheme that provided incentives for supplying the domestic market, Knox said.

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

AIM
Share

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)
1 of 3

More News
Video

Natural gas glut means drilling boom must slow

Apr. 8, 2012 8:03 AM ET
NRC chief pledges tough probe at Calif. nuke plant

Apr. 6, 2012 8:39 PM ET
Natural gas dips after US supplies grow

Apr. 5, 2012 2:29 PM ET
Natural gas dips after US supplies grow

Apr. 5, 2012 12:55 PM ET
GMX shares spike on oil discovery

Apr. 4, 2012 12:20 PM ET

Advertisement
undefined
Advertisement
Buy AP Photo Reprints

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) ========