For those of who were not among the 950 attendees at the inaugural conference, we are offering an opportunity to get the information from top executives that your competitors got at the conference through a new video series:

Developing Unconventional Oil Series - Session One
Developing Unconventional Oil Series - Session Two
Developing Unconventional Oil Series - Session Three

2010 Speakers Included:
- Harold G. Hamm, CEO, Continental Resources
- Philip H. “Pete” Stark, Ph.D., Vice President, IHS Inc.
- Jim Volker, CEO/President, Whiting Petroleum
- Peter Dea, President and CEO, Cirque Resources
- Peter Loeffler, VP of E&P, American Oil & Gas, Inc.
- Tim Marquez, Chairman and CEO, Venoco Inc.
- Bob Boswell, CEO, Laramie Energy II
- Daniel M. Jarvie, President, Worldwide Geochemistry

The American mentality generally is that we can do everything on our own, and moving toward energy independence is no exception. Lewis Reynolds, author of “America the Prisoner: The Implications of Foreign Oil Addiction and a Realistic Plan to End It,” provides five viable solutions to that end.

1. Invest in new infrastructure to process alternative fuels. Manufacturing liquid fuels from non-petroleum sources is feasible. Brazil, Germany, and South Africa have the technology to produce ethanol from sugarcane, coal, and natural gas. That same technology is capable of producing fuels in the US. According to Reynolds, the only difference is that research and the emergence of nanotechnology in the US make fuel produced this way more affordable and economically competitive with oil-based fuels.

2. Use existing biomass to ease our transition away from petroleum use. Biomass use makes the entire fuel cycle carbon-neutral, so no matter how much fuel is consumed, there will not be a net increase in CO2 in the atmosphere. The combination of relatively modest supplies (residues generated by traditional logging operations, processing wastes, urban wood residues, etc.), Reynolds said, is a formidable supply of biomass that can be refined to supplant a portion of petroleum currently imported to the US.

3. Grow ‘energy’ crops. To go beyond the fuel production capabilities from the existing biomass supply in the US, Reynolds believes we need to make the production of fuel from biomass consistent and sustainable. This will require cultivating “energy crops,” he said. Although the US already produces ethanol from corn, it has its disadvantages.

The solution is finding alternative crops with higher yields than corn, such as switchgrass and arundo (a perennial grass). “In theory,” Reynolds said, “the addition of arundo and switchgrass to the agricultural scheme should have very little effect if energy crops are grown on land that is currently not used for other agricultural production.”

4. Implement government intervention wisely. According to Reynolds, any attempt for the US government to directly invest the US $900 billion needed for energy independence is not likely to yield ideal results. However, some legislative action will be needed to convince private investors to get on board.

For long-term survival of an alternative fuel industry, the government can shield it from oil exporters and multinational oil companies by protecting it from a reactionary drop in prices. Reynolds suggests establishing a price floor for crude oil through an import tariff to support alternative fuels as well as the domestic oil and gas industry.

5. Develop more fuel-efficient cars. “It’s time for a new focus,” Reynolds said. Several revolutionary innovations in vehicle design have been proposed to significantly impact fuel demand, with hybrid and plug-in electric hybrid vehicles as the most promising options. According to Reynolds, “This is a step in the right direction.”

Although incremental steps are important, Reynolds warns, “Americans should beware of any false sense of security.” US consumption of foreign oil is so substantial that improved fuel efficiency will not bring energy independence without significant production of alternative fuels.

According to the bill, it will suspend, “the issuance of new permits for the drilling of a well which utilizes the practice of hydraulic fracturing for the purpose of stimulating natural gas or oil in low permeability reservoirs such as the Marcellus and Utica formations.”

In an interview with the Associated Press, New York Governor David Paterson asserted that shale drilling would not be allowed to proceed within his state without “overwhelming evidence” that the practice will not harm local water supplies.

“[This controversy] is obviously a clash between a very lucrative profit-making opportunity and a very serious public safety hazard,” Paterson said.

To read the rest of the article, visit:

http://www.ugcenter.com/Shales/US/Marcellus/Features/item65537.php

In other news, you can now follow epmag.com on Twitter! Follow us at @Hart_EPmag to get updates with links to breaking news stories, popular reports and well activity data. Click below for the link:

http://twitter.com/Hart_EPmag

Since the Deepwater Horizon incident and the subsequent offshore drilling moratorium in the Gulf of Mexico (GoM), folks in the oil and gas industry have been talking about the ramifications to operations.

Though no one knows yet what will change for GoM operations, an obvious focus will be (and should be) safety, and industry organizations already are working on ways for improvement. In July 2010, the Houston Advanced Research Center hosted a technology workshop to identify research and technology needs. The Research Partnership to Secure Energy for America held a panel discussion at the forum to address deepwater development needs moving forward.

Tom Williams, managing director at Nautilus International LLC, said risk actually will increase when drilling eventually resumes. Williams gave several reasons for his prediction. First, stopping in the middle of operations likely will make it difficult to jump back in once activity resumes. Second, he expects an increase in tanker traffic.

Finally, exporting the best rigs and the loss of experienced drilling staff to active locations internationally will make it difficult to bring the highest quality equipment and personnel back to the GoM. “The best rigs and responsible drillers will get work and go elsewhere,” Williams said. “We’ll end up with ‘junkier’ rigs (they’ll still meet regulations, but they’ll be less capable).” Further, recruitment of new people will stop since the best and brightest likely will not apply for uncertain jobs, he added.

Williams also noted that employees (returning and new) will require additional training and certification. “As with the baseball offseason, players need a spring training to get back in shape,” he said. “From a safety standpoint, we can’t afford to have spring training.”

Taking into account lessons learned from occurrences similar to the event in the GoM, Greg Anderson, international board director and consulting and training president for Moody International, said the 1988 Piper Alpha tragedy in the North Sea focused attention on the impact of people’s behavior as a contributing factor in accidents.

“Whether Piper Alpha or any other incident, large or small, over 97% of the time human behavior plays a significant role,” Anderson said. “A key focus area needs to be how does a company or industry create a culture of safety where people ‘believe in’ versus ‘comply with’ safety.”

According to Anderson, “A culture of compliance only works under 1) constant supervision; and 2) absolute adherence to policies and procedures.” To create a culture of safety and compliance, he recommended addressing the “human element” by teaching people to:
•    Take personal responsibility for their safety and the safety of those around them;
•    Assess risk and reduce hazards associated with a task; and
•    Communicate better.

Although safety procedures can have a direct impact on employees working on the rigs (both onshore and offshore), it is evident from the Deepwater Horizon incident that those effects can ripple throughout the company and all the way to the top.

In the wake of the event in the GoM, companies, operators, and more importantly, individuals should lead by example and hold one another accountable for keeping up with the highest safety standards and practices. Safety legislation and regulations can only go so far. Ultimately, employees choosing to work safely without taking shortcuts and rewarding and tolerating the same behavior in others will drive a culture of safety.

http://cnn.com/video/?/video/us/2010/08/03/ricks.mattingly.bp.static.kill.cnn

It’s been 107 days since the Macondo well blowout in the Gulf of Mexico. Like most people who have been following the incident, I’m ready for this to be over so we can finally move forward, hopefully with some positive resolutions. It has been exhausting to listen to the government vs. the oil industry over and over for months. The problem with this debate is that the government is supposed to represent the people, and that doesn’t seem to be the case. It certainly isn’t representing the people of Louisiana, who have loudly opposed the moratorium.

The fact is that Americans need the oil being produced in the Gulf of Mexico. We need gasoline, plastics, and other materials that demand the use of oil. Until the public quits using those items,  the government cannot completely stop offshore drilling. Regardless of the desire of the Obama administration to meddle,  in the end, the citizens of the US need oil.

If domestic production can’t fulfill demand, the supply will have to come from abroad . This will cost jobs in the US, putting our economy in even worse shape. There’s no way around that. There are too many people in this nation who are using oil constantly. And until all need for oil is replaced by something else, no one is going to stop needing it.

So I say to the Obama administration and environmentalists everywhere to find a compromise so the US can benefit from all forms of energy safely. It isn’t a pipe dream. No one wants to kill people, animals, trees or anything in between so why can’t it be done?

The Texas Alliance of Energy Producers (TAEP) held a briefing for news media at the Houston Petroleum Club on July 22, 2010. Karr Ingham, a petroleum economist with Ingham Economic Reporting, provided the results of the most recent Texas Petro Index (TPI).

The TPI, created by Ingham in 1995, is a barometer of industry activity that measures Texas energy operations based on indicators such as rig counts, energy prices, production volume, and well completions. According to Ingham, the index tends to fluctuate in accordance with the overall US economy, rising during expansions and dropping during recessions.

Pat French, TAEP vice president, said, “High-profile challenges have given the oil and gas industry a bad rap, which allows anti-oil and gas folks to move their environmental and political agendas.” TAEP uses the TPI as a value-added concept and public relations tool for the industry’s contribution to Texas.

Further, French spoke out against cap-and-trade legislation saying the environmental movement in the US has capitalized on the opinions of residents opposed to drilling rigs in their backyards.

Ingham added, “Essentially, every energy proposal by the Obama administration – from carbon tax and cap-and-trade to tax policies in the proposed budget – would have the ultimate outcome of reducing the supply of petroleum products to the marketplace.” He said the energy industry should refrain from using tax-friendly euphemisms such as “subsidies” and “incentives” when referring to cap-and-trade because it suggests the industry agrees with the legislation.

According to the TPI, the Texas rig count still is increasing from early 2009 when it hovered around 350, a loss of two-thirds from the 2008 high. This year, the index is down compared to last year due to higher oil prices and fewer year-to-date oil and gas completions, Ingham said. In June 2010, the Texas rig count was 663, down from the peak of 946 in September 2008.

Through June 2010, there have been 2,819 oil-well completions, down 19.4% from the same time last year. Gas completions have decreased significantly with 2,250 through June 2010, a 60.7% drop from 5,719 in the first half of 2009.

Gas prices increased to US $4.67 in June 2010 from $3.58 in June 2009, but still fall below the $5 to $6 minimum required by most operators to make unconventional drilling economical, Ingham said. Still, a high gas price is not as necessary to justify shale operations as it once was.

The index is down when compared to last year, however has grown for its sixth consecutive month after it bottomed out in December 2009. Crude oil production currently is driving Texas activity, Ingham said, but probably is a temporary fix since crude oil will stop being as easy to produce as natural gas. Some natural gas legislation, however, may prevent overall growth and activity for both oil and gas in Texas; natural gas production has not been cut as much nationwide as it has in Texas.

Future activity of the state requires a return to a steadily growing US economy. Ingham predicts natural gas prices might improve, assuming the US exits the current plodding economy. Oil and gas-related employment accounts for only 2% to 3% of the total work force in the state. Still, the oil and gas industry accounts for 12% of Texas’s direct economy and 25% of total state tax benefits.

For more information on the TAEP, visit www.texasalliance.org.

By Rebecca Torrellas, Online Editor

Marcellus, Bakken, Haynesville, and Eagle Ford are making room for another big unconventional player – Niobrara.

Emerging quietly, Niobrara is showing its shine and its paying off. According to an interview with Steven Degenfelder, senior vice president of exploration at Double Eagle Petroleum, in the Casper Star Tribune, Niobrara acres were previously going for prices in between $40 to $70 per acre. Benjamin W. Hulburt, Rex Energy president and CEO, said the average cost in the D-J Basin is now at $600 an acre. Big Bear Oil & Gas recently bought a 314-acre parcel with a bid of $3,200 per acre.

Operators are starting to release completion details. One horizontal wildcat flowed at an unstimulated rate of 1,000 b/d of oil, the second at 730 b/d of oil, and the third flowing between 1,200 b/d to 1,500 b/d of oil (if you want more details, subscribe immediately to our International Highlights, included in what will be a growing area of additional data and premium content. Click here to subscribe).

Is Niobrara the next Marcellus or Eagle Ford? Unconventional gas continues to drive the hearts of operators, and they all want to beat each other to the next big thing. While early results have made all the difference, a lot of Niobrara still remains a mystery. It is that mystery that’s bringing operators by the dozens with money in hand. And with offshore drilling still at a standstill in the Gulf of Mexico, the oil and gas industry needs good news… and Niobrara may it!

For more information on this popular oil shale, register to listen to the FREE webinar, “The Emerging Niobrara: Development Strategies and Future Potential” Thursday, July 29^th, at 10 a.m. CDT. Click here to register.

A week or so ago, I purchased gas for my car. Without really thinking about it, I wrote the amount and location in my checkbook and moved on. Then, a few days later, I opened my checkbook again and discovered that instead of writing Gas-ExxonMobil, I had written Gas-XOM. Of course, I came to this conclusion while I was out shopping and laughed at myself. The lady behind the cash register asked what was so funny and I informed her, “You know you have been in the energy industry for too long when you use the stock symbols for a company instead of writing it out.” She laughed and told me she understood. Her dad worked for Exxon and, as she put it, she is “now a Shell wife.” I told her that my dad also had worked for Exxon, and then Conoco.

It is a small world in the energy business, and though it may be expanding daily, it seems to be shrinking at the same time. Everyone knows everybody else, and in this industry, that is a powerful thing. I have been interning at E&P for just over a month this summer, and I also interned here last summer. I have been immersed in the energy industry since I was born thanks to my father’s profession. And in all that time, I have come to realize that there are indeed signs that you have been in the industry for too long. So, I compiled a list with some help from my co-workers.

You know you’ve been in this industry for too long when:

You use the stock exchange symbols in your checkbook.

You look for offshore rigs when you are at the beach or in an airplane flying over a large body of water.

The Houston Petroleum Club’s pecan balls are the highlight of your week.

You are picky about which gas station you use based on your preference for a specific operator.

You listen to the anti-oil people and laugh when you see that they are using a laptop, wearing tennis shoes, and drinking a bottle of water.

You hear the word “spar” and don’t think of a fight, but of a floating deepwater unit.

When you hear “OTC,” you think Offshore Technology Conference, not “over-the-counter.”

You hear a fraction and think of casing sizes.

It is no longer a big deal to fly to London, Stavanger, Dubai, Nigeria, or Auckland.

You know what GoM, FPSO, IOC, SEG, SPE, 4-C, NOC, ROV, ROP, MODU, SPE, BOP, AAPG, LNG, EAGE, and E&P mean.

You hear “red” and don’t think of the color, but the person.

You know it is pronounced Schlum-ber-JZHAY (using the IPA phonetic alphabet: ʃlʌm bɜr ʒeɪ), not Schlum-ber-GER (like “hamburger”).

You can name the supermajors in five seconds.

You hear the name Total and think of the operator, not the cereal…and you add an accent.

A billion dollars seems relative.

You stalk the weather channel and the National Oceanic and Atmospheric Administration during hurricane season, regardless of which coast the hurricane will strike.

You hear “hawk,” but it’s not the bird – it’s the company, Petrohawk.

Your “celebrities” are Marcellus, Bakken, Eagle Ford, Permian, Horn River, Haynesville, Arkoma, and Niobrara.

The word “migration” does not bring to mind birds flying south for the winter.

Chesapeake is not the bay on the east coast, but an energy company.

A Christmas tree is not something you hang ornaments on in December.

Artificial lift has nothing to do with plastic surgery.

The word “exploitation” does not have a negative connotation to you.

You meet someone from an oil company and say, “I know your CEO.”

“Fishing” does not involve a rod and reel or bait.

The word “pig” doesn’t mean a cute barnyard creature, and “pigging” does not mean eating too much.

“Logging” doesn’t mean cutting down trees.

So, the next time you are at the pharmacy and you hear OTC, they are not actually referring to the largest technology conference in Houston.

Additional suggestions are welcome!

Reader Suggestions:

You hear the word “POOH” and it doesn’t make you think of a cuddly cartoon bear.

You hear the word “Wildcat” and it doesn’t remind you of a school mascot.

You know that “Spud Mud” is not what happens when you drop your baked potato in the dirt

You know that a “Kill Pill” is not something created by Dr. Kevorkian.

You know that “Archie’s Equation” is not something from “All in the Family”

You know that “Gardner’s Equation” has nothing to do with planting things in your garden.

You know that “swabbing” can’t be done with a Q-tip.

Kelly and Derrick are not going out on Friday night.

A “shut-in” is not a Meals On Wheels client.

YEARS OF SEARCHABLE DATA!

I’ve been part of the E&P team for more than 7 years now and one of our most popular sections has always been the International Highlights. The highlights are now an online database containing thousands of entries emphasizing drilling activity in emerging plays and in mature fields giving you access to years of searchable records, from historical data to the most recent information in E&P. They are updated in real time so there is new information available 24-7.

This database is years of global information on well data, including but not limited to location, operators, completion results, total depth, psi, size of choke, location of fractures (and if they were stimulated). This includes on and offshore as well as all the unconventional plays that are currently in great demand, including Eagle Ford, Marcellus, Bakken, Niobrara and the emerging international shales.

To access the database, sign up TODAY at http://www.epmag.com/ExplorationHighlights/.

But before you subscribe, I’d like to introduce a new writer for you to follow on the Internet Oil Drum. Assistant Editor Ashley Organ will be joining me in providing you oil and gas information on the Internet and beyond. We hope you will continue to visit us every Thursday for the latest updates. If you have any topic requests, feel free to submit using the comments fields above this post. If you’d like to read Ashley’s first post, read on.

Josh Fox’s “GasLand” – a documentary which aired on HBO on June 21, 2010 – is bringing natural gas into the homes of viewers nationwide, and not in a good way.

Had I not been a part of the industry, I probably would have been convinced of Fox’s “findings” – Dick Cheney exempting oil and natural gas companies from the Clean Water Act, the Clean Air Act, the Safe Drinking Water Act, and the Superfund law; the hydraulic fracturing process using chemicals that subsequently poison drinking water; and high natural gas levels igniting water taps. Not to mention, the cinematography is reminiscent of a 1970s horror film much like that of the original “Texas Chainsaw Massacre.” In one eerie scene, Fox is shown standing in a field wearing a gas mask while plucking a banjo. Hank Stuever of The Washington Post wrote, “‘GasLand’ never loses its sense of jaded artistry; it is first and foremost a movie.”

And what would a good movie be without a villain?

EnergyInDepth, an organization of small, independent producers dedicated to separating fact from fiction about the US oil and natural gas industry, has provided a series of truths to the film’s claims in an article titled, “Debunking GasLand.” An excerpt from the article said:

Misstating the Law

(6:05) “What I didn’t know was that the 2005 energy bill pushed through Congress by Dick Cheney exempts the oil and natural gas industries from the Clean Water Act, the Clean Air Act, the Safe Drinking Water Act, the Superfund law, and about a dozen other environmental and Democratic regulations.”

•    This assertion, every part of it, is false. The oil and natural gas industry is regulated under every single one of these laws – under provisions of each that are relevant to its operations.

•    The process of hydraulic fracturing, to which Fox appears to be making reference here, has never in its 60-year history been regulated under the Safe Drinking Water Act. It has, however, been regulated ably and aggressively by the states, which has compiled [sic] an impressive record of enforcement and oversight in the many decades in which they have been engaged in the practice.

•    Far from being “pushed through Congress by Dick Cheney,” the Energy Policy Act of 2005 earned the support of nearly three-quarters of the US Senate (74 “yea” votes), including the top Democrat on the Energy Committee; current Interior secretary Ken Salazar, then a senator from Colorado; and a former junior senator from Illinois named Barack Obama. In the US House, 75 Democrats joined 200 Republicans in supporting the final bill, including the top Democratic members on both the Energy & Commerce and Resources committees.

Regarding hydraulic fracturing, the composition of fluids commonly used in the fracturing process comprises of 99.5% water and sand, according to EnergyInDepth. “The remaining materials, used to help deliver the water down the well bore and position the sand in the tiny fractures created in the formation, are typically components found and used around the house. The most prominent of these, a substance known as guar gum, is an emulsifier more commonly found in ice cream,” the report said.

Addressing the flammable tap water scene, EnergyInDepth wrote:

Movie claim: In the film’s signature moment, Mike Markham, a landowner, ignites his tap water. The filmmaker leaves the viewer with the impression the flaming tap water is a result of natural gas drilling, even though he acknowledges that tests of Markham’s well revealed only naturally occurring methane.

Truth: The Colorado Oil and Gas Conservation Commission tested Markham’s water in 2008, finding his water well had been drilled into a natural gas pocket. The film leaves a clear – and false – perception that hydraulic fracturing was to blame. This is simply not true.

“GasLand” fails to mention that the landowners shown in the testimonials chose to lease their property to the natural gas companies and were informed of the risks involved with exploratory drilling. Fox portrays the opinions as credible, however the witnesses do not possess the scientific knowledge to support their “conclusions.”

“GasLand” does not inform viewers that the wells shown are necessary in our efforts to capitalize on domestic resources, nor does Fox provide an alternative solution. According to the Energy Information Administration, 25% of total energy consumed in the US in 2009 came from natural gas. Natural gas heats buildings and water, and is used in cooking, lighting, heating, etc. In 2008, three to four million American jobs were created by the natural gas sector of the energy industry, according to the Natural Gas Supply Association.

Houston oilman George P. Mitchell, founder of Mitchell Energy & Development Corp., recently received the Gas Technology Institute’s Lifetime Achievement Award for pioneering hydraulic fracturing and drilling technologies that started the shale gas industry. “I’m truly honored to be receiving the Lifetime Achievement Award from the Gas Technology Institute. I believe that the United States should examine all forms of natural gas in order to ease our dependence on coal and foreign oil. It is my hope that my efforts will aid the search for new and unconventional energy sources that can be used by my grandchildren and great-grandchildren,” Mitchell said.

Unfortunately, the mainstream media hype of “GasLand” has cast a shadow over the achievements and progress in our industry.

For more information, visit www.energyindepth.org.