Continental Resources Inc. CEO Harold Hamm continues to talk about his vision for North American energy independence.
Hamm appeared Tuesday on CNBC to tout a recent Harris Poll indicating nine out of 10 Americans believe the United States should strive for energy independence.
He said domestic oil production is booming thanks to developments in precision horizontal drilling technology that allows producers to target large reserves of immobile oil.
“We’re talking about North American energy independence in the next 10 years.”
Hamm said continued drilling has allowed producers to boost oil production.
“You have to go out there and poke holes in the ground. We do that every day.”
Hamm said the lack of major U.S. oil plays will prevent producers from creating a glut like the one that has caused natural gas prices to plummet, but he maintained the industry needs continued “tax provisions” favorable to exploration.
“It allows us to go out and fail. And fail again. It was necessary that we did that with the Bakken. Some 18 wells were drilled before it was commercial up there. It’s necessary that we have a tax consequence that will allow us to do that.”
Hamm said the U.S. should work with its neighbors to continue increasing oil production.
He welcomed news that Mexico’s new president may allow private investment in that country’s oil industry for the first time since 1936, while contending the fight over the transcontinental Keystone XL pipeline has not permanently soured the U.S.’s relationship with Canada. which already is a major oil producer.
The former U.S. Environmental Protection Agency administrator who made headlines for promising to “crucify” a few oil and natural gas companies has joined the Sierra Club’s fight against coal, the environmental group announced Friday.
Al Armendariz resigned in April as administrator for the EPA region that includes Oklahoma and Texas after his comments at a 2010 public hearing were brought to light by U.S. Sen. Jim Inhofe, R-Tulsa.
Armendariz told a questioner that the EPA would “crucify” a couple of oil and gas companies as an example of how the agency’s environmental regulations would be enforced. He apologized for those remarks before he resigned.
Sierra Club officials welcomed Armendariz to their fight against coal.
“This is an exciting day for clean energy and public health supporters in Texas,” said Bruce Niles, a top Sierra Club official. “Al has worked closely with the Sierra Club for many years, as an environmental scientist and professor. He understands the critical importance of developing clean energy to create jobs, protect people and protect air and water.”
Armendariz spent eight years as a professor in civil and environmental engineering at Southern Methodist University in Dallas before joining the EPA.
“As a third generation Texan, I’m proud to be taking on this new role to help protect Texas,” Armendariz said. “As a father and a scientist, I know how important it is to transition to cleaner sources of energy that don’t pollute the air that our children breathe, and I’m proud to be working on a campaign with a proven track record for success.”
Starting next month, Armendariz will be senior campaign representative for the Sierra Club’s Beyond Coal campaign. He will be based in Austin.
Ohio Attorney General Mike DeWine is looking into allegations of fraud involving Chesapeake Energy Corp. that might have caused state pension funds to lose money, the Columbus Dispatch reports.
DeWine is responding to concerns raised by an environmental advocacy group that has compared Chesapeake to Enron.
“My office is reviewing the retirement system trading data in order to calculate possible losses attributable to the alleged fraud,” DeWine wrote in a letter to the group. “Please be assured that we will monitor the situation and take appropriate action if it appears that Ohio resources have been lost due to fraudulent activity.”
Ohio Citizen Action is devoted to preventing pollution.
The group, which boasts 80,000 members, earlier this month urged the attorney general to protect Ohio residents from Chesapeake’s possible collapse due to unaccountable management and the absence of effective state or federal regulation.
The allegations echo more than a dozen lawsuits filed by Chesapeake shareholders over the past two months amid reports of corporate governance issues at the Oklahoma City-based oil and natural gas producer.
A group that promises to bring transparency to the discussion of unconventional natural gas development is dismissing a recent study commissioned by the American Petroleum Institute and America’s Natural Gas Alliance.
The study, released June 4, concluded the industry is responsible for half of the methane emissions attributed to it by the U.S. Environmental Protection Agency. The agency in April issued new rules to limit emissions from hydraulic fracturing, a technique used in most oil and natural gas operations.
The nonprofit Physicians Scientists and Engineers for Healthy Energy on Tuesday called the industry’s study “fatally flawed.” The group issued a statement from Cornell University professors Anthony Ingraffea and Robert Howarth and research technician Renee Santoro.
“The study relies on a critically flawed survey design, completely ignores many other recent studies, and would not have passed peer-review in a scientific journal.”
The scientists contend the industry groups’ study is based on a biased survey, highly selective information and an uncertain approach.
The group praised a recent study by researchers at the National Oceanic and Atmospheric Administration and the University of Colorado, which they said measured the actual flux of methane from an unconventional gas field. It showed emissions were higher than the EPA’s estimates.
“More such studies are needed, evaluating emissions from both conventional and unconventional gas fields, and the downstream emissions from pipelines and urban distribution systems.”
The group concludes “the best available science” indicates that natural gas has a larger greenhouse gas footprint than any other fossil fuel, so it should not be regarded as a bridge fuel to cleaner alternatives.
Industry advocates have dismissed the group for its ties to the Park Foundation, which helped fund the anti-gas documentary “Gasland” and other attacks on gas development. Ingraffea and Howarth also have been criticized for inaccurate work.
Chesapeake Energy Corp. is done with the Sierra Club.
CEO Aubrey McClendon was questioned by the president of the National Center for Public Policy Research about the company’s past donations totaling $26 million to the environmental group at Friday’s annual meeting.
Center President David Ridenour said he was concerned the Sierra Club would use those funds in its new “Beyond Natural Gas” campaign.
McClendon said he has no regrets about working with the Sierra Club to go after the coal industry.
“We’re in a market share struggle with coal,” McClendon said. “As a result of that campaign, 150 new coal plants were not built. That demand will go to natural gas.”
The Sierra Club distanced itself from Chesapeake earlier this year after new executive director Michael Brune rewrote the group’s gift acceptance policy and began to campaign for tougher regulation of the natural gas industry.
On Friday, McClendon said Chesapeake is no longer associated with the Sierra Club.
“Our relationship with them is a little different today than it was a few years ago,” he said.
Ridenour said he was not satisfied to McClendon’s response to his question at Friday’s meeting.
“Mr. McClendon largely ignored my question, ‘By funding Beyond Coal, did you not unnecessarily pick a fight with another fossil fuel industry that now will have every incentive to fund Beyond Natural Gas? It would be darkly amusing if the coal industry did turn out to be funding Beyond Natural Gas, and did have a stipulation in its grant contract limiting the use of the gift to fighting Mr. McClendon’s industry.”
“Since the Sierra Club has been used as a corporate tool in the past, there is no reason to believe that it isn’t being used as one now, so we call upon it to fully disclose who is underwriting Beyond Natural Gas. If the Sierra Club won’t say who is funding its anti-natural gas campaign, we probably can assume there is a conflict of interest in there somewhere.”
“As a representative of a Chesapeake shareholder and an employee of another shareholder, I’m not thrilled that Mr. McClendon gave money to an activist group dedicated to the company’s destruction, but I’m even less happy as an American. Energy independence is important to national security, and low-cost energy is important to American jobs and prosperity. We shouldn’t be fighting things that are good for us.”
Ridenour said he still hopes to find out where Chesapeake’s donations to the Sierra Club went, while letting such groups know that people are watching those types of charitable contributions.
The Canada-based retailer is urging its customers to oppose the Keystone XL pipeline project, which it contends is a threat to countless animals, ecosystems and communities.”
Developer TransCanada recently submitted a new application for the $7 billion project, which would bring oil from Canada and North Dakota through the storage hub at Cushing on its way to refineries in the Houston area. The company has committed to building the southern portion of the line from Cushing, but it needs a presidential permit to cross the U.S.-Canada border.
Starting today, LUSH is converting 80 of its shops — including one at Penn Square Mall in Oklahoma City — into polling stations for the next two weeks. The company also is campaigning against the project with environmental organization 350.org.
“By using our shops to give Americans a voice on this issue we hope to stop the Keystone XL pipeline from becoming a reality,” says LUSH Campaigns Director Brandi Halls. “Canada’s tar sands are not the answer to our future energy needs and collectively we must demand that our government put its citizens interests ahead of the oil industry’s.”
LUSH also will donate all proceeds from sales of its limited edition Charity Pot hand and body lotion to 350.org.
While awaiting a ruling on its request for a rate increase, Oklahoma Gas and Electric Co. is rolling out an interim increase and seeking to adjust its fuel costs.
The moves are expected to leave most OG&E customers paying less for their electricity.
“We believe that this is an equitable, short-term solution,” said OG&E spokesman Brian Alford. “We are able to cover our costs by implementing new rates, which are subject to refund should the (Oklahoma Corporation) Commission’s order ultimately provide for a lower increase. And, we can provide assurance to our customers that their summer bills will not go up as a result of our rate request. We understand our customers’ concern over high bills during the summer months.”
The utility company, which serves nearly 800,000 customers in Oklahoma and western Arkansas, asked the Oklahoma Corporation Commission to approve a $73 million rate increase last year to cover the cost of nearly $500 million in new investments over the previous two years.
Consumer advocates, including the Oklahoma attorney general’s office, countered by calling for a rate decrease ahead of a hearing before an administrative law judge at the corporation commission in December and January.
The judge has not issued a recommendation to the elected commissioners who will decide the rate case, so OG&E is moving forward with an interim increase.
The $24 million increase will be offset by a $50 million reduction in fuel costs due to lower-than-expected natural gas costs.
“During the past several years, we have invested well over $500 million in electric system improvements,” Alford said. “With significant additional investment on the horizon, we must keep our credit card balance in check, so to speak, so that we’re able to meet future investment needs.”
The interim rate increase will be refunded to customers if it is eventually rejected by regulators.
OG&E is allowed to enact the increase since it has been more than six months since the company filed its rate case.
The long-awaiting reversal of the Seaway pipeline is complete.
Owners Enterprise Products Partners LP and Enbridge Inc. announced the line began accepting oil at Cushing on Saturday.
The pipeline, which one helped producers ship record amounts of crude to the Cushing storage hub, now carries oil south to refineries in the Houston area.
Oklahoma Independent Petroleum Association President Mike Terry said earlier this month that the pipeline will be a boon to state producers.
“Additional pipeline capacity taking crude oil from Cushing to refineries along the Gulf Coast is necessary to alleviate what has become a bottleneck for crude oil produced in the middle of the country. Increasing amounts of inbound crude from Canada and the northern United States has outpaced outgoing pipeline capacity, forcing more oil into storage at Cushing and glutting the local market. The result is Oklahoma Sweet and West Texas Intermediate, historically the benchmark for global crude oil prices, has become less valuable.”
The Seaway pipeline will be able to move 850,000 barrels of oil a day once a parallel line is built.
Canada’s oil sands are a growing source of oil. And controversy.
The oil sands hold an estimated 169 billion barrels of recoverable oil, but critics contend extraction is too costly because of greenhouse gas emissions, water pollution and other health threats.
Business Insider looked at operations in Alberta’s oil sands this week, although reporter Robert Johnson had to rent a plane to get a look at mining operations there.
The aerial tour resulted in some striking pictures of how oil close to the surface is extracted. Mining accounts for about 20 percent of operations in the oil sands.
Most operators, like Oklahoma City-based Devon Energy Corp., drill for oil deeper underground, using steam-assisted gravity drainage to bring it to the surface.
Ninety-seven percent of Canada’s oil reserves, which are the third largest in the world, are in the oil sands, according to the Canadian Association of Petroleum Producers. The oil sands are a mixture of sand, water, clay and bitumen, or oil that is too heavy or thick to be pumped to the surface.
Business Insider toured Cenovus Energy’s Christina Lake operation earlier this month.
Natural gas companies and fuel retailers aren’t the only ones pushing compressed natural gas as an alternative vehicle fuel.
Waste Management, a Houston-based refuse disposal and recycling company, on Friday opened a CNG fueling station in Conroe to serve its growing fleet of natural gas-powered trucks.
Waste Management currently operates five CNG-powered collection vehicles in the communities north of Houston, but the company expects to roll out an additional 35 in the area by the end of 2012, it announced Friday.
The public fueling station will refuel Waste Management’s local fleet and sell CNG to commercial fleets. It will be open to retail consumers soon.
“Since natural gas-powered collection trucks run cleaner and quieter, we’ve made the commitment to use more in our local operations and support them and our community by opening a public CNG station,” said Don Smith, area vice president for Waste Management’s Texas and Oklahoma region. “We are dedicated to providing our customers with outstanding service while doing business in the most sustainable manner possible.”
Waste Management currently has 28 CNG fueling stations, with plans to have 50 operating by the end of the year.
The company also is adding more CNG trucks to its fleet. It already includes more than 1,400 CNG trucks.
“In 2012, natural gas vehicles will represent 80 percent of our annual new truck purchases and continue for the next five years,” said Eric Woods, Waste Management’s vice president of fleet and logistics.
Company spokeswoman Lisa Doughty told The Oklahoman that Waste Management does not have any CNG trucks in Oklahoma at this point.
“While we know this is the direction we are heading, I do not have a time frame for when this might happen,” she said.
Chesapeake Energy Corp. is converting its truck fleet to CNG. The company has opened fueling stations at several of its field offices to the public, while teaming with OnCue Express and Love’s Travel Stops & Country Stores to open more CNG stations in Oklahoma.
Houston-based oil and gas producer Apache Corp. also has opened several CNG stations, including one in Tulsa.