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February 13 News: Companies Cut Drilling as Natural Gas Prices Continue Dropping

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"February 13 News: Companies Cut Drilling as Natural Gas Prices Continue Dropping"

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Other stories below: GOP transportation bill takes a few wrong turns; EU aviation industry warns of trade war over carbon price

Elaine Cullen, NIOSH

Drillers cut natural gas production as prices drop

As natural gas prices continue to drop, the recent nationwide boom in drilling is slowing. Drillers don’t make money if prices go too low — and drilling wells isn’t cheap.

“It is safe to say that there will be fewer natural gas wells drilled in 2012,” said Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group based in Pennsylvania.

In recent weeks, several companies have announced plans to cut gas production around the nation, but experts say the low prices are also opening up new markets.

When the shale drilling boom was starting in 2008 the average price for a unit of gas was about $8. Two years ago it was down to $5.50, and now it’s dropped to about $2.50. Part of the reason is that the shale gas formations became productive more rapidly than expected, as thousands of new wells have been drilled nationwide.

Industry reports note that the national count of active new gas drilling rigs fell to 775 in early February, down from about 1,500 in 2008.

GOP transportation bill takes a few wrong turns

House Republicans may have set a record for how many counterproductive ideas can be stuffed into one package with their version of a $260 billion transportation bill.

What should have been a bipartisan effort to meet the challenges of the 21st century – relieving highway congestion, enhancing mass transit, protecting the environment – was hijacked by Republicans locked in a pave-and-drill mentality of the 1950s.

The bill they produced (HR7) was so over-the-top combative that it’s hard to believe they were serious. It was as if they were more interested in scoring points with special interests than taking care of the people’s business.

How many ways can one bill trash the environment? Well, this one starts by opening up the North Slope of the Arctic National Wildlife Refuge to oil and gas leasing, clearing the way for oil shale development on public lands, and allowing offshore drilling on heretofore off-limits areas of the Atlanta and Pacific coasts – including, of course, California.

HR7 counts on those drilling projects to provide the revenue to pay for the highway projects it contemplates.

Aviation industry warns of trade war over EU carbon tax

World aviation bosses warned on Monday of a potential trade war over a carbon tax imposed by the European Union, which expressed readiness to compromise while insisting on its environmental agenda.

In a conference on the eve of the Singapore Airshow, one of Asia’s largest aviation trade fairs, representatives of the airline and plane manufacturing sectors expressed concern over a potential political and economic standoff.

“I have to say I’m really worried, also as a manufacturer, about the consequences,” said Airbus Chief Executive Thomas Enders.

“I have seen the position in China, in Russia, in the US, in India, and what started as a scheme to present a solution for the environment has become a source of potential trade conflict,” he added.

Obama administration slows environmental rules as it weighs political cost

After pushing through some of the most sweeping and contentious environmental measures in years, the Obama administration has slowed action on several policies as it calculates what it should undertake before the end of the term.

Rules aimed at curbing emissions from cars and light trucks are on hold because the White House has yet to give the Office of Management and Budget the go-ahead to review them. And a proposal to regulate soot, ready last fall, will not be issued before June.

Several of the regulations hanging in the balance have broad support among not just environmentalists but key industries as well as hunters and anglers. But they could impose new costs on consumers and certain sectors of the economy, which has sparked opposition and complicated the administration’s political calculus.

Experts say beef prices will likely rise for 2 years due to smallest cattle herd in 60 years

The smallest cattle herd since the 1950s likely will mean higher beef prices at the supermarket for the next two years.Experts said beef prices could climb as much as 10 percent a year in 2012 and 2013, and the increase could be even greater if demand from other countries increases.

Those higher prices would follow steady increases that have seen the average retail cost of a pound of hamburger rise 23 percent, from $2.38 in December 2010 to $2.92 last December, according to the U.S. Department of Agriculture.

Last month the USDA reported the U.S. herd had declined to 90.8 million cattle, 2 percent less than the previous year and the lowest inventory since 1952, when there were 88.1 million.

“We’re producing less beef so prices are going to go up,” Texas AgriLife Extension Service livestock economist David Anderson said.

Dangerous drought, Effect of 2011 dry spell produces struggle for deer season

The West Texas deer season wrapped up in January and, as expected, it was the worst season in recent memory. The drought of 2011 had a devastating impact on the deer herd and forced hunters, guides and taxidermists to scramble to make the best of a bad situation.Deer numbers were way down and fawns didn’t survive. Antler growth was stunted in bucks. The business of deer hunting was bad as the cost of deer feed went up while the quality of the herd went down.

“This drought took us to a place none of us have ever been before, that’s for sure,” said Jim Roche of Magnum Guide Service in Eldorado. He estimates about a 30 percent fawn crop survival on low-fence ranches without supplemental feed.

“Two factors doomed the fawns,” Roche said. “Fawns died because the does were in such poor shape due to a lack of nutrition, and also because of the heat — 100-plus days of 100-plus temperatures killed a lot of the fawns. They just couldn’t take the heat.

Latest Accident at San Onofre Nuclear Plant Worries Activists, Residents

The anti-nuclear power movement in the United States peaked in 1979, with widespread protests, the “No Nukes” concert in New York City, and the release of The China Syndrome, the gripping film about a near-meltdown at a fictional California facility that foreshadowed a real-life accident at the Three Mile Island nuclear plant in Pennsylvania just weeks after the movie’s premiere.

Since then, no new nuclear plants have been built in the U.S., no major accidents have occurred, and anti-nuke sentiment had become largely dormant.

But that all changed when last year’s devastating earthquake and resulting tsunami crippled the Fukushima Daiichi nuclear plant in northeastern Japan.

“Fukushima woke people up, it made Americans and the entire world realize all over again the real dangers of nuclear power,” said Dan Hirsch, president of the Committee to Bridge the Gap, a nonprofit nuclear policy organization founded in 1970. “And now we have an incident in our own backyard.”

The incident to which Hirsch refers happened Jan. 31, when a warning sensor detected a small leak in a recently installed steam-generator tube at the San Onofre Nuclear Generating Station, which is on the beach 45 miles north of San Diego, near one of Southern California’s most popular surfing spots.

The leak resulted in the release of a small amount of radioactive gas into the atmosphere, according to the Nuclear Regulatory Commission, and the plant has been shut down ever since as investigators try to determine what happened.

While no one is comparing this small leak to the devastation at Fukushima, Hirsch, the former director of the Adlai Stevenson Program on Nuclear Policy, University of California, Santa Cruz, says it has only “increased the skepticism” about the safety of nuclear power among Californians.

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11 Responses to February 13 News: Companies Cut Drilling as Natural Gas Prices Continue Dropping

  1. Mike Roddy says:

    Mission accomplished for the gas companies, since this was obviously planned long in advance. Rock bottom pricing makes it tough for wind or solar to please the beancounters at the utility merchant banks.

    Koch and Exxon are now heavily into gas. They are not satisfied with selling us polluting and climate altering products in a fair market. These people insist on market manipulation, political mischief, and poisoning of the public dialogue.

    This will be obvious to everyone within a decade, and could lead to nationalization of the fossil fuel companies, and seizure of their assets. It will be good riddance.

    • prokaryotes says:

      Test trial convicts fossil fuel bosses of ‘ecocide’

      Top lawyers put fossil fuel bosses on trial in the UK’s supreme court in a mock case to explore if ecocide – environmental destruction – could join genocide as a global crime
      http://www.guardian.co.uk/environment/damian-carrington-blog/2011/sep/29/ecocide-oil-criminal-court

    • Sasparilla says:

      Mike, one other thing involved in all this is that most of the leases for oil shale drilling required drilling within xx number of days etc. for the lease to be valid – this set up the situation where the developers are not only trying to get all the good land signed up, but then had to drill it asap no matter what the price (or they’d loose it).

      My personal opinion is that natural gas market will figure out how export this stuff in the next couple of years, while a bunch of the drillers stop or drop out of the market because of the losses (Liquified Natural Gas import stations were created in the Gulf just prior to the shale gas boom since it was assumed we’d be needing to import natural gas, that’s not the case now and someone will get them to work the other way).

      Natural gas in the US is not at a world price because we can’t export it easily at this point. While its selling in the US at $2.42 per MBTU, on the export market it is above $10 mBTU (often 2 to 4 dollars above that). Those greedy guys will figure out how to export it while supply will decrease and the price will bounce back up. Sounds like a big push is on to get tractor trailers to use this stuff as well (however short sighted that is). This super low price of natural gas is temporary (a couple of years we’ll be out of it), IMHO.

  2. prokaryotes says:

    Get Popcorn! Potholer Lures His Weirdship “Lord” Monckton into Open Internet Debate. http://climatecrocks.com/2012/02/13/get-popcorn-potholer-lures-his-weirdship-lord-monckton-into-open-internet-debate/

    Weirdship, lol lol lol :)

  3. John Tucker says:

    “Hirsch, the former director of the Adlai Stevenson Program on Nuclear Policy, University of California, Santa Cruz, says it has only “increased the skepticism” about the safety of nuclear power among Californians.”

    Yea, A leak that no environmental sensors detected and posed no public health threat. Meanwhile :

    Estimating the National Public Health Burden Associated with Exposure to Ambient PM2.5 and Ozone

    . Among populations aged 65–99, we estimate nearly 1.1 million life years lost from PM2.5 exposure and approximately 36,000 life years lost from ozone exposure. Among the 10 most populous counties, the percentage of deaths attributable to PM2.5 and ozone ranges from 3.5% in San Jose to 10% in Los Angeles. ( http://onlinelibrary.wiley.com/doi/10.1111/j.1539-6924.2011.01630.x/full )

    But lets fixate on the one technology that works in removing significant amounts of GHGs and is scientifically proven safe.

    Again why no numbers in this “concern” piece?

    • John Tucker says:

      When a organism is exposed to radiation it doesn’t cause cancer most (practically all) of the time – it leaves much more evidence of exposure throughout the organism. So we can actually trace radiation exposure and severity in living organisms by several methods.

      Why do you suppose the anti nuclear folks never discus this? Their favorite “studies” depend on a degree of vagueness that isn’t part of the science on the subject. (if its a legitimate study at all). Start looking. Seriously.

  4. John Tucker says:

    We have so much gas they are cutting production – soon they’ll just export it like coal:

    U.S. coal production rises slightly in 2011 amid lower domestic demand and higher exports ( http://www.eia.gov/todayinenergy/detail.cfm?id=4970# )

  5. Bill Goedecke says:

    you may want to check out James Kunstler’s site – he had an interesting interview with a petroleum geologist about natural gas production and the market. very informative.

  6. Mossy says:

    So beef production will be down, and prices elevated, for just the next two years? Why the optimism? What’s going to allow the cattle industry to revive? Grain shortages and drought will likely continue to escalate. Yes, there may be a few bumps along the way, but the overall trend is down, way down, reverse hockey stick down.

  7. Colorado Bob says:

    Drought Reduces Mexico’s Agricultural Production by 40%

    MEXICO CITY – The severe drought affecting 22 of Mexico’s 32 states has caused a 40 percent drop in agricultural production, opening the way for food shortages over the next few months, the National Peasants Confederation, or CNC, said.
    http://www.laht.com/article.asp?ArticleId=470584&CategoryId=14091