Oklahoma State University has been awarded a one-year, $96,000 grant to study methane hydrates, ice lattices with trapped pockets of natural gas. The OSU research will focus on structural and geologic controls on formation of hydrates in the Walker Ridge and Green Canyon areas in the Gulf of Mexico near Houston.
Methane hydrates were a problem in the aftermath of the Deepwater Horizon oil platform explosion in the Gulf of Mexico in 2010. The buildup of methane hydrates from the ocean floor hampered the plugging of the well in the weeks after the deadly explosion.
But recent research into methane hydrates shows great promise that the formations can be a future source of natural gas. However, much of it is hard to recover, according the Department of Energy:
The first challenge is to more accurately determine the extent of methane hydrate in sand reservoirs in arctic and marine environments. The second challenge is to determine whether such deposits can yield methane gas at the rates necessary to make high-cost arctic or deep-water production commercially viable.
The OSU research is part of a larger research project into methane hydrates involving universities in 11 states.
“The Energy Department’s long-term investments in shale gas research during the ’70s and ’80s helped pave the way for today’s boom in domestic natural gas production that is strengthening U.S. energy security while creating thousands of American jobs,” Secretary of Energy Stephen Chu said in a statement. “While research on methane hydrates is still in the early stages, these research efforts as part of President Obama’s all-of-the-above energy strategy could potentially yield significant new supplies of natural gas and further expand U.S. energy supplies.”
Crews from Oklahoma Gas and Electric Co. are traveling to Louisiana today to help with power restoration in the wake of Hurricane Isaac.
Latest estimates from the storm put more than 500,000 people without power.
OG&E Electric Services said 71 employees will help Cleco Power. They will stage at Cleco’s headquarters in Pineville, La., and be dispatched to surrounding areas in need of help.
OG&E is a member of the Southeast Electric Exchange, which organizes mutual assistance teams from utilities across the south after storms.
“Our crews are always ready and willing to help others in a time of need during outages like this,” said Mike Mathews, OG&E’s vice president of power delivery operations, in a statement. “They’re working safely to get power back to the citizens of Louisiana, or wherever they’re needed, and they’ll continue until the job is done.”
In March, OG&E won the “Emergency Assistance Award” from the Edison Electric Institute for its efforts to restore service following several regional weather emergencies in 2011. The award recognizes utilities that help neighboring or regional utilities that have been disrupted by severe weather outages. Among the service restoration events OG&E helped with were severe thunderstorms, flooding and tornado damage in Texas, Arkansas, Missouri and Alabama.
When GOP delegates or others at this week’s Republican National Convention stop for a cup of coffee this week in Tampa, Fla., there’s a pretty good chance they’ll also end up with a lesson on compressed natural gas.
CNGnow.com, an advocacy organization supported by the natural gas industry, has a booth near the media area in the Tampa Convention Center. It is next door to the Tampa Bay Times Forum, where former Massachussetts Gov. Mitt Romney is expected to be nominated as the Republican candidate for president later this week.
Norman Herrera, director of market development at Chesapeake Energy Corp., said the convention is a good forum for CNG advocates, who are reaching out to delegates who aren’t familiar with the alternative fuel.
He said advocates are spotlighting Oklahoma Gov. Mary Fallin’s work with other governors to increase demand for natural gas vehicles, as well as the fueling stations being built by state companies like OnCue Express and Love’s Country Stores and Travel Stops.
Oklahoma is home to more than 70 existing or planned fueling stations, but Herrera said Florida — which is the nation’s second largest user of natural gas — has only five.
He said Florida derives 62 percent of its electricity from natural gas so it is a “vibrant market” for CNG.
Herrera said CNG advocates are talking about fleet conversions, vehicle choices and fueling stations with delegates seeking a caffeine fix at the conference. Water is available at the CNGnow booth also.
Delegates also are being ferried to and from the airport on CNG-fueled shuttles, courtesy of America’s Natural Gas Alliance.
The CNGnow booth, which opened Monday, will be in Tampa until Thursday.
CNGnow is a combined effort of Chesapeake, the Pickens Plan, American Clean Skies Foundation, NGVAmerica, America’s Natural Gas Alliance and American Gas Association.
There isn’t a for-sale sign at NW 63 and Western, despite Chesapeake Energy Corp.’s ongoing quest to raise cash, but the company’s largest shareholder has urged officials not to rule out the possibility of a sale.
The Wall Street Journal on Monday identified a potential buyer: oil major Chevron Corp.
Chevron has amassed $21 billion in cash, according to the report, spurring observers to wonder when the company may be mulling a potential acquisition.
Chesapeake’s market capitalization is about $12.39 billion, based on Tuesday afternoon’s stock price of $19.34 a share, although officials have maintained its oil and natural gas assets are more valuable than that.
Chevron, which is reportedly carrying more cash on its balance sheet than any other publicly traded energy company, maintains it is hoarding money to finance several multi-billion projects, but that hasn’t stopped analysts from speculating about a possible acquisition.
“That’s the only thing I can think of,” Oppenheimer analyst Fadel Gheit told WSJ.
Chesapeake declined to comment for the WSJ report.
Analysts have dismissed the possibility of a Chesapeake sale in the past because of the company’s complex financing structure, which includes venture partners and volumetric production payment plans.
Seven Tar Sands Blockade activists were arrested Tuesday after chaining themselves to a pipeline truck in south Texas to protest the Keystone XL pipeline, the group said.
“Because authorities were forced to dismantle the truck to make arrests, we shut down construction on this leg of the Keystone XL pipeline for the whole day!”
The protest, described as an “act of peaceful civil disobedience,” comes after a Texas judge sided with the Canada-based pipeline developer in an eminent domain dispute with landowner Julia Trigg Crawford.
“It was heartbreaking to hear a generational family farm like the Crawford’s can be taken away by a multinational corporation,” said protest Audrey Steiner, a linguistic anthropologist from Austin. “I’m here to change the direction our country is taking.”
Tar Sands Blockade announced its presence earlier this month when organizers hosted events in Cushing, Dallas and Houston, but the group has removed a statement from its website indicating it planned to block construction of the 485-mile pipeline between Cushing and the Gulf Coast, a spokesman said Tuesday. That statement is no longer on the group’s website.
“We’re risking arrest in a sustained nonviolent direct action and force them to recognize the demands of the people. We don’t make the decision lightly. The fact is, other tactics – lobbying, petitioning, and packing public hearings – have failed to halt the pipeline. State authorities have bent to every TransCanada desire, and they show no signs of stopping now,” according to the site.
The group promises to post further updates on Tuesday’s protest on its website.
Devon Energy Corp. CEO John Richels spoke Tuesday with CNBC’s Mad Money host Jim Cramer about how the company’s stock price is trading down on lower-than-expected earnings in the second quarter.
Richels blamed much of the drop on lower prices for natural gas, natural gas liquids and Canadian oil. The temporary price drop should not significantly affect the company’s long-term growth, he said.
This business is cyclical. Prices are cyclical. We’re sticking with our focus on investing in high-return projects. We’re maintaining our capital discipline, and we’re continuing to build this big asset base on the oil side, which we’re really excited about,” Richels said.
Like most oil and natural gas companies, Devon is working hard to refocus its attention on oil instead of natural gas.
We grew our oil production 26 percent year-over-year. That’s not off of a small base. By the end of this year, we’ll be over 40 percent oil and liquids production. We’re spending every cent in our company today on oil and natural gas liquids growth, and about three-quarters of it on oil,” Richels said.
Chesapeake Energy Corp. may be getting closer to finding a buyer for its holdings in west Texas’ Permian Basin.
The cash-strapped oil and natural gas company has agreed to sell part of its Permian acreage to Houston-based EnerVest Ltd., but two larger pieces remain available.
Forbes writer Christopher Helman believes Chinese giant Sinopec could be the company to buy those properties.
The proposed deal, detailed Tuesday by the Wall Street Journal, would involve capturing carbon dioxide emissions for coal-fired power plants then using them to bolster oil production in older fields.
Helman notes the Permian Basin, where Chesapeake holds about 1.5 million net acres, is home to more enhanced oil recovery operations than anywhere else in the world.
“A thought: wouldn’t it make just too much sense for Sinopec to be looking for ways to secure a long-term carbon dioxide supply before it announced a deal for Chesapeake’s Permian assets? Just speculation, but it fits.”
Chesapeake has said its Permian assets have drawn plenty of interest from prospective buyers, but officials have been coy about providing any details.
The company has been looking to raise cash to offset anticipated shortfalls in its operations budget.
Chesapeake has completed deals worth about $4.7 billion this year, including the sale of its stake in its former midstream subsidiary, which has been renamed Access Midstream Partners. The company hopes to raise an additional $7 billion this quarter, CEO Aubrey McClendon said in Chesapeake’s Aug. 7 earnings call.
Host Jim Cramer pointed out that while the company’s earnings missed expectations last week, production was up sharply, topping 100,000 barrels per day.
It’s beyond our imagination for sure,” Hamm said. “Those numbers have come pretty quickly. We should see more expansion coming from here.”
One of the biggest factors holding back growth in the Bakken formation of North Dakota is the limited pipeline infrastructure in the area, Hamm said.
The Bakken is the largest oilfield in the world that doesn’t have a primary pipeline serving it. That puts us at a severe disadvantage,” he said.
Hamm has been a strong supporter of North American energy independence, saying the country should invest its money on oil and natural gas production in North Dakota, Oklahoma and other parts of the country instead of in the Middle East.
Cramer asked if North America could produce all its own energy within five years.
We’re getting close to that,” Hamm said. “I have said that within 10 years, North America could be energy independent. In five years, I don’t think we’ll be using a whole lot of Mideast oil if we don’t want to, and we will be more secure.”
Pipeline company TransCanada Inc. had planned to trap and relocate hundreds of the endangered American burying beetles along Keystone’s proposed path, but new rules by the U.S. Fish and Wildlife Service prevent the pipeline developer from moving the hiding bugs until the project receives federal approval.
An official with the Center for Biological Diversity, which sued the federal government last year and prompted the rule change, said the decision could set back Keystone’s construction by up to a year because the insects can only be moved in the spring and summer.
A TransCanada spokesman told the World-Herald that it is too soon to know how the new rules would affect construction, but that the company will work with the new regulations.
There’s a lot of ways to deal with this,” TransCanada spokesman Shawn Howard said.
Construction of the Keystone XL is expected to take two years, and work could be adjusted to allow for removal of any beetles without affecting that timetable, Howard said.
The American burying beetle has been causing heartburn for oil and gas companies in Oklahoma for more than a decade.
The insect has been listed as an endangered species since 1989, but regulations were expanded in 2002 when it was discovered that drilling and pipeline operations can harm the species by disturbing larvae even though the adult beetle is only active from May to September.
To ensure the insect’s safety, environmental regulations require companies to hire biologists and survey areas for the beetles before they dig in areas where they may be found. If any of the species are found in an area, biologists must trap or bait them away.
Unlike most endangered species, the burying beetle is not limited to a specific habitat. The bug once thrived in 35 states and three Canadian provinces, but decades of development have driven the species to near extinction, conservationists say.
Over the past 15 years, the American burying beetle has been found only in seven states along the periphery of its former range.
Devon Energy Corp. has signed a joint venture agreement worth $1.4 billion with Japan’s Sumitomo Corp. to help develop its holdings in west Texas’ Permian Basin, the company announced Tuesday morning.
Sumitomo’s investment will yield a 30 percent stake in Devon’s acreage in the Cline Shale and the Midland-Wolfcamp Shale. Devon has about 650,000 acres in the oil-rich plays.
“This transaction once again demonstrates the value embedded in our high-quality portfolio,” Devon CEO John Richels said. “This arrangement will materially enhance Devon’s future returns and improve our capital efficiency. It will also further enhance our financial strength. For quite some time we have had a strong working relationship with Sumitomo and look forward to a mutually beneficial joint venture.”
Sumitomo will pay Devon about $340 million in cash when the deal closes. The remaining $1.025 billion in the deal with be a drilling carry that will fund about 70 percent of Devon’s capital requirements.
The partners expect to drill 40 wells in the targeted plays this year.
The Sumitomo deal is Devon’s second joint venture with an Asian firm this year.
The Oklahoma City-based company sealed a $2.5 billion deal with China’s Sinopec International Petroleum Exploration & Production Corp. in January. Sinopec acquired a stake in Devon’s 1.2 million net acres in five developing plays: the Tuscaloosa Marine Shale, Niobrara, Mississippian, Ohio Utica Shale and the Michigan Basin.