OERB launches new ad campaign on energy independence
The Oklahoma Energy Resources Board on Monday launched its latest advertising campaign to highlight how the state can help the United States achieve energy independence, a goal espoused by every president since Richard Nixon.
“Energy independence is finally possible in North America, and it is due in large part to the contributions of Oklahoma’s oil and natural gas industry,” said Pete Brown, chairman of OERB’s public education committee. “New technologies and discoveries made by Oklahoma companies have made it easier for the United States to access domestic oil and natural gas, and it is our job to share that with the public.”
The United States is now the fastest growing source of oil and natural gas supplies in the world, according to the U.S. Energy Information Agency.
Oklahoma’s oil and natural gas industry directly employs more than 83,000 jobs in the state, an increase of 17 percent from 2009, according to OERB. Another 280,000 Oklahoma jobs are indirectly supported by the industry.
Together, that’s one out of every six Oklahoma jobs, with an estimated 10 percent increase by 2015.
OERB’s new ad campaign will include television, print, radio and Internet spots with messages that focus on the many facets of North American energy independence, including the far-reaching positive impact achieving independence would have on the economy, jobs and national security.
More energy independence could mean 3.6 million new jobs, enough to cut unemployment by two percentage points, according to a Citigroup report.
“The positive impacts of energy independence can not be ignored,” Brown said. “It makes sense for Oklahoma to take the lead in helping the United States achieve energy security, and this campaign will help in those efforts and get the public involved in the conversation.”
Additional information about the new OERB campaign can be found at OERB.com/independence.
Pipeline conversion project to help reduce price spread
I wrote in Friday’s paper about how new and expanded pipeline projects over the next two years are expected to move more oil to the Gulf Coast and alleviate the backlog at Cushing.
An article in the Calgary Herald on Friday explains how another pipeline conversion project could further help move oil more freely throughout the country.
Calgary-based Enbridge Inc. and Houston-based Energy Transfer Partners plan to spend up to $3.4 billion over the next two years to convert an existing natural gas pipeline to transport crude oil from Patoka, Ill., to the St. James hub in Louisiana.
When completed, the line is expected to transport 420,000 to 660,000 barrels of oil per day.
Oklahoma City-based Continental Resources Inc. and other producers in the Bakken Shale in North Dakota and Montana could be among the biggest beneficiaries from the proposed line.
Continental transports most of its Bakken crude by train to refineries on the east and west coasts.
[VIDEO] Watch California city implode old power plant
If you’re a fan of watching things blow up, then have I got a video for you. The Los Angeles Times has a great video of a power plant in Chula Vista, Calif., being demolished over the weekend in a controlled implosion. A Tulsa-based company, Dykon Explosive Demolition Corp., was one of two companies in charge of the demolition.
The newspaper said the plant was built by San Diego Gas & Electric Co. and came online in 1960. The 700-megawatt generating station burned fuel oil and was shut down in 2010. Developers are hoping to turn the site into a park and resort hotel. Read more from the Los Angeles Times here.
Study: Ethanol blend could damage newer vehicles
Newly completed research by the Coordinating Research Council indicates increased ethanol in gasoline could damage the fuel systems in millions of vehicles manufacturing since 2001, the American Petroleum Association said Tuesday. The council is an organization supported by the oil and automotive industries.
Bob Greco, API’s director of downstream and industry operations, said earlier testing showed E15 could harm valve and valve seat engine parts.
“The additional E15 testing, completed this month, has identified an elevated incidence of fuel pump failures, fuel system component swelling, and impairment of fuel measurement systems in some of the vehicles tested. E15 could cause erratic and misleading fuel gauge readings or cause faulty check engine light illuminations. It also could cause critical components to break and stop fuel flow to the engine,” Greco told reporters in a conference call. “Failure of these components could result in breakdowns that leave consumers stranded on busy roads and highways. Fuel system component problems did not develop in the CRC tests when either E10 or E0 was used. It is difficult to precisely calculate how many vehicles E15 could harm. That depends on how widely it is used and other factors. But, given the kinds of vehicles tested, it is safe to say that millions could be impacted.”
The American Coalition for Ethanol dismissed the CRC results, maintaining motorists have nothing to fear from ethanol in their fuel.
“This is just another ghost story, told by people who stand to lose market share when consumers finally have access to E15,” said Ron Lamberty, the group’s senior vice president. “We shouldn’t be surprised at Big Oil’s latest attempt to scare consumers — they’ve shown no shame in twisting test results to protect their market share. There is a reason that the oil companies don’t want E15 and it has everything to do with protecting the bottom line and nothing to do with protecting consumers.”
The U.S. Environmental Protection Agency last year allowed retailers to use a higher blend of ethanol in their gasoline, but E85 is not widely available in Oklahoma.
TransCanada wins injunction against Keystone XL protesters
Pipeline developer TransCanada has obtained a permanent injunction against three environmental groups and dozens of activists involved in recent protests against its Gulf Coast project, a 485-mile pipeline between Cushing and the Gulf Coast.
Tar Sands Blockade, Rising Tide North America, Rising Tide Texas and 20 others agreed Friday not to trespass on TransCanada property in Oklahoma and Texas in order to avoid facing a lawsuit seeking $5 million in damages for disrupting the pipeline project.
“The permanent injunction that these protesters have now agreed to relates to TransCanada, Keystone, our affiliates and contractors. It covers existing operations, offices, construction sites, storage yards, right-of-way/easements and equipment in Texas and Oklahoma,” the company told The Oklahoman. “They cannot interfere with the use and enjoyment of our property, equipment, construction materials and facilities or prevent access to and from our properties and equipment.”
The activists who oppose the $2.3 billion pipeline contend the lawsuit was a strategic move by TransCanada to disrupt their protests, noting the Canadian company had claimed the protests had not impeded construction in any way.
Tar Sands Blockade spokesman Ramsey Sprague said the protests will continue, despite the settlement.
“TransCanada is dead wrong if they think a civil lawsuit against a handful of Texans is going to stop a grassroots civil disobedience movement. This is nothing more than another example of TransCanada repressing dissent and bullying Texans who are defending their homes and futures from toxic tar sands.”
Texas grandmother Tammie Carson, one of the defendants in the case, said she got involved on principle, but financial concerns led her to accept the settlement.
“I took action for my grandkids’ future. I couldn’t sit idly by and watch as a multinational corporate bully abused eminent domain to build a dirty and dangerous tar sands pipeline right through Texans’ backyards,” Carson said. “I had no choice but to settle or lose my home and everything I’ve worked for my entire life.”
TransCanada said Monday the Gulf Coast project is about 40 percent complete, with plans to get it into commercial operation by late this year.
Board defends SandRidge CEO Tom Ward
The board at SandRidge Energy Inc. on Friday issued a statement in support of CEO Tom Ward, who has been accused of “front-running” by one of the company’s largest shareholders.
Hedge fund TPG-Axon Capital, which has asked shareholders to replace Ward and the board, contends entities affiliated with Ward have been “flipping” leases to SandRidge. TPG-Axon detailed its concerns Wednesday in a presentation posted on its website, shareholdersforSandRidge.com.
“The board has reviewed issues related to these allegations several times over the Company’s history and has found no wrongdoing to have taken place,” the board said Friday.
WCT Resources LLC, the company at the center of TPG-Axon’s allegations, is independent of SandRidge, with no non-public access to information about its land and mineral acquisition programs, even though one of its managers is Ward’s son, according to the board. Ward is not involved in the company, which was created by trusts established to benefit his adult children.
“Thus, contrary to TPG-Axon’s assertions, neither the company nor Mr. Ward has the power to “allow” WCT Resources to engage in any business regardless of whether it competes with the company,” the board said. ”As an ongoing business not controlled by the company or Mr. Ward, WCT Resources is free to engage in whatever commerce it deems suitable wherever it chooses.”
The SandRidge board also dismissed TPG-Axon’s concerns about WCT leasing acreage adjacent to the company’s holdings in the Mississippian oil play.
“Given the company’s vast acreage holdings in the Mississippian play, which include interests in over 7,500 sections covering nearly five million acres in 30 counties throughout an area that encompasses approximately 17 million acres, this is an entirely unremarkable fact,” according to the board. ”Virtually all companies active in the play are likely to have some interests that could be characterized as adjacent to the company’s holdings.”
The board said leases secured by TLW Land and Cattle LP were acquired with the purchase of ranch land or other surface acreage, mostly before SandRidge became active in the Mississippian in northern Oklahoma and southern Kansas.
“Mr. Ward disclosed these longtime business interests to the board early in the company’s history and has discussed them with the board several times over the past several years, and the board has found no evidence of impropriety or ‘front running,’” the board said.
TPG-Axon and another large institutional shareholder, Mount Kellett Capital Management, had asked the board to investigate the allegations against Ward. Mount Kellett suggested hiring an independent law firm and forensic accounting firm. It also wants Ward to be suspended until the inquiry is completed.
“While the board’s perspective on these and other issues may diverge from TPG-Axon’s, the company’s directors continue to value the input of its stockholders,” according to the board’s statement. ”As part of its continuing oversight duties, the independent members of the board will consider the requests of TPG-Axon and Mount Kellett for the appointment of independent counsel and other investigative measures concerning the activities surrounding their allegations. “
Report: Chesapeake to help EPA with hydraulic fracturing study
Chesapeake Energy Corp. will let the U.S. Environmental Protection Agency conduct extensive tests at one of its well sites to determine if hydraulic fracturing is safe, the Wall Street Journal reported Wednesday.
The process, commonly known as fracking, is used to extract oil and natural gas from dense rock like shale, but it has been dogged by concerns that it contaminates drinking water.
Chesapeake, one of the nation’s leading oil and gas producers, will allow the EPA to sample water at one of its well sites before and after the well is drilled, an Obama administration official told the Journal.
A Chesapeake spokesman declined to comment on the report Wednesday night.
Texas-based Range Resources Corp. may cooperate with the EPA as well, according to the Journal, if liability concerns can be addressed.
Devon oil well burning in Utah
Residents near a Devon Energy Corp. oil rig in southern Utah were evacuated early Tuesday after a fire filled the air with thick black smoke.
Devon spokesman Chip Minty said no one was injured after a well control issue led to the release of oil and natural gas on the rig, sparking the fire.
Utah’s KSL-TV captured video of the fire.
Minty said crews are working to extinguish the fire safely Wednesday. Once the fire is under control, officials will investigate what caused it.
Devon has been active in Utah’s Uinta Basin for some time, but Minty said the company recently began drilling operations there in hopes of increasing its oil production.
SandRidge shareholder: ‘We’re not typical activists’
TPG-Axon Capital did not buy into SandRidge Energy Inc. with an eye on involving itself in the Oklahoma City oil company’s affairs, according to its chief executive.
“We’re not typical activists,” CEO Dinakar Singh said Tuesday on CNBC.
But Singh said the hedge fund identified the stock as one with potential growth value, so it launched an effort to replace CEO Tom Ward and the rest of SandRidge’s board.
Singh, who served as a guest host Tuesday on CNBC’s Squawk Box, said SandRidge has valuable assets, but its overhead spending — including compensation for Ward — are too high.
“This company is the single worst-performing energy stock in the Russell 1000 since its IPO five-and-a-half years ago,” he said. “The stock is down over 70 percent.”
Singh said a leadership change at SandRidge seems to be the only way to rein in the company’s spending.
TPG-Axon, which owns about 6.7 percent of SandRidge’s outstanding stock, has launched a consent solicitation, asking its fellow SandRidge shareholders to approve its plan to replace the board. It has proposed a new board, headed by Singh.
SandRidge has urged shareholders to reject the TPG-Axon plan.
Tar Sands Blockade back in Oklahoma
The Tar Sands Blockade has made its way back to Oklahoma.
The group intent on blocking construction of the southern leg of the Keystone XL pipeline launched its civil disobedience campaign in August, but its efforts largely have been focused in Texas.
Protesters chained themselves to equipment, took refuge in the trees and even tried taking over developer TransCanada’s offices in Houston and other cities, but the company says they have not done anything to disrupt the project.
“Once again, those who protest against the project fail to understand they are attempting to stand in the way of thousands of jobs for the best pipeline workers in the world, their actions are an unsuccessful publicity stunt designed to weaken America’s relationship with its strongest energy partner, and they seek to deny American energy producers a way to meet U.S. demand for more domestic energy,” spokesman James Prescott told The Oklahoman.
“Fortunately, their efforts have not delayed construction of Keystone Pipeline Gulf Coast Project. Everyday, 4,000 pipeliners are making progress to meet the goal of completion in mid-2013 and the start of operations by the end of the year.”
Construction of the so-called Gulf Coast project began in Oklahoma in November after TransCanada secured the necessary permits for the 485-mile pipeline, which will transport up to 700,000 barrels of crude oil a day from the storage hub at Cushing to refineries in the Houston area.
Opponents of the project insist it is an environmental disaster waiting to happen because of the toxic Canadian oil it will carry. Recently some have argued that the diluted bitumen from Canada does not fit the legal definition of crude oil.
“They lied to us about what’s going to be pumped through this pipe. They have strong-armed Oklahomans and Texans into signing contracts. Our rivers, especially the North and South Canadian that feed into Lake Eufaula, our drinking water aquifers, and our native lands are at risk, and they simply do not care,” said Earl Hatley, riverkeeper of the Grand River watershed.
On Thursday, protesters walked onto an easement in Stroud where pipe was being laid on Sac and Fox Nation land.
