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California’s most productive fisheries? Offshore oil rigs

by John Timmer

One of the more unusual recent developments in ocean conservation has been the use of artificial reefs. Old ships and even old subway cars have been used to create environments for fish to congregate in areas of the seafloor that are otherwise featureless. But it’s not clear whether these habitats provide a place for fish to gather or actually boost the fish populations in the area.

A new study looked at the productivity of a different sort of artificial reef: the oil and natural gas rigs that dot the state’s coastline. The report finds that the oil rigs are the most productive fisheries ever measured—not only in California but in the entire world. The report notes that many of these platforms will be obsolete over the coming decades, and we might want to think about what we do when we’re done using them for their original purpose.

There are different ways of measuring an ecosystem’s productivity. One is primary productivity, or how much carbon dioxide is converted into useful organic molecules by plants and other photosynthetic organisms. Then there’s secondary productivity, defined as how much of that finds its way to herbivores and predators. In this case, the authors were interested in fish, so they focused on secondary productivity.

To measure the productivity, they relied on an annual survey performed with a remotely operated vehicle. Different sites were visited for at least five years, some as many as 15, with fish abundance and species assessed visually. Total biomass was also estimated from this data, and the change in biomass between years was then normalized to the area of seafloor covered by the survey.

The numbers were staggering. The most productive places in the scientific literature (a reef in Tahiti and an estuary in Louisiana) saw annual productivity of about 75 grams for each square meter. The lowest of the oil rigs came in at 105 grams per square meter per year, and the highest as nearly 900. The authors were even being conservative by not including any fish more than a couple of meters from the structure, which ignores the entire water column enclosed by the rig’s legs.

The most obvious reason for this productivity is the fact that, unlike most reefs, an oil rig extends from the surface to the significant depths., allowing it to attract fish that prefer habitats at a wide variety of depths. The authors tried to compensate by only counting things near the ocean floor, but even then, the oil rigs were more productive than natural habitats, though not by such an extreme margin.

The vertical structure may actually contribute directly to the appeal of the oil rigs for many species of rockfish. As these fish age, they tend to move to greater depths. In the case of many of these oil rigs, they can do so without ever leaving the habitat. Combined with lower levels of predators than what was observed at natural reefs in the same area, this makes the environment around the rig a very appealing one for many species of fish.

Does this represent a case of higher productivity at the rigs themselves or a greater recruitment of fish at different stages of their lives to the sites? The authors can’t truly know, but they do point to other studies showing that in some species of fish, individuals simply don’t survive if they can’t find their way to an appropriate habitat.

So oil rigs appear to be good for the fish, which poses both a problem and an opportunity. There are now over 7,500 oil and natural gas platforms in the oceans around the world, and all of them will eventually cease production. Normally, you’d expect that removing the equipment and recycling its materials might be the most environmentally friendly option. But if these results are found in other habitats, then it’s possible that leaving everything in place would be the best thing for the local ecosystem.

At the same time, the authors note, there are lots of new offshore wind facilities being constructed. If we can figure out the features that make these oil rigs so appealing to fish, it’s possible we could engineer these deployments so that they boost local marine life. It won’t stop people from complaining about the wind turbines spoiling their view, but those complaints might be drowned out by the appreciations of fishermen.

Article Source: Timmer, J. (2014). California’s most productive fisheries? Offshore oil rigs. ars technica. Retrieved from http://arstechnica.com/science/2014/10/californias-most-productive-fisheries-the-offshore-oil-rigs/

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Oil field deaths rose sharply from 2008 to 2012

By Lise Olsen

Oil field deaths reached 545 during America’s drilling and fracking frenzy from 2008 to 2012, with Texas’ 216 reported fatalities leading the nation. Pennsylvania and North Dakota also are recording dramatic increases in worker deaths, according to updated workplace fatality figures released last week by the Bureau of Labor Statistics.

The data, released in response to a Houston Chronicle request, comes as government officials and industry leaders are deadlocked in an ongoing debate about how to plug holes in nationwide safety rules for the industry. Last year, the Occupational Safety and Health Administration formally asked for public comments on how to expand regulations of potentially hazardous workplaces, including drill and well sites, following the disastrous explosion at a fertilizer plant in West.

The U.S. Chemical Safety Board and other safety advocates recommended applying tougher process safety rules to save lives at drilling sites. The federal government already enforces those rules at refineries and chemical plants. Offshore, drilling and well-supply companies already follow similarly strict rules, too. But industry advocates have for decades opposed them at on-land drilling sites.

Son’s death

Dennis Bolt, a longtime oil field worker, lost his son Jason in 2011 when decades-old drilling equipment bought used at a Permian Basin-area auction flew apart and killed the younger Bolt and a co-worker at a drill site near Lamesa.

“My son’s death has opened my eyes to the fact that this ‘recklessness’ is no longer acceptable by me as well as many others,” Bolt said. “Lives are being lost at an alarming rate.”

The 545 oil field deaths nationally from 2008-2012 represented a 3.2 percent increase over fatalities recorded in the five years prior to 2008, with Texas’ total deaths up 7.4 percent.

Among the other states recording increased fatalities during the boom, North Dakota reported a more than 340 percent increase to 31 fatalities and Pennsylvania saw a 300 percent increase to 20 deaths. Oklahoma saw 68 deaths, up 24 percent.

Three states recorded decreases, with Wyoming down 45 percent to 22, New Mexico down 36 percent to 21 and Louisiana down 2 percent to 60.

Wyoming’s plunge is noteworthy because the state is the only of the eight energy producers to have engaged in a sustained state-sponsored effort to reduce workplace deaths.

After a 2008 report identified it as having nation’s worst occupational fatality rate, Wyoming leaders hired five new state-funded OSHA inspectors, employed a full-time occupational epidemiologist to collect and study workplace deaths, passed related reforms and established statewide safety groups that makes recommendations, according to documents and an interview with current state occupational epidemiologist Mack Sewell.

Wyoming’s 22 deaths from 2008-2012 were about half the 40 deaths the state recorded in drilling, well service and petroleum extraction from 2003-2007.

The Wyoming Oil and Gas Industry Safety Alliance, one of the state’s new safety advisory groups, now has “over 1,000 members and numerous collaborating organizations,” according to Jack Bedessem, its president.

“For the last three years our efforts have been focused on enhancing the safety culture in all facets of the industry,” said Bed-essem, who is also CEO of Wyoming-based Trihydro Corp. “We still have a lot of work to do to ensure every one of our employees gets home healthy and safe every night.”

Better solutions sought

With government safety regulators and industry officials deadlocked over new safety procedures for oil drilling and fracking sites, Dr. M. Sam Mannan, director of the Mary Kay O’Connor Process Safety Center at Texas A&M University, has argued that a preliminary analysis of 2012 industry accident data suggests that only a fraction of U.S. oil field fatalities might be prevented by expanding process safety rules.

Specific workplace programs and training, however, possibly could have saved the lives of about two dozen workers killed in fires, poisoned by gasses or electrocuted in 2012 alone, the center’s preliminary data shows.

Bolt, the Texas oil field worker who lost his son, believes that improving OSHA’s federal inspections simply isn’t enough, especially since many drilling and well sites are isolated, the agency is understaffed and its safety rules are out-of-date.

Going to Legislature

Jason Bolt and his co-worker, Sandy Daves, friends and fathers in their 20s, perished at a Robinson Drilling work site in the Permian Basin, at a location that government safety inspectors took hours to reach, public records show. Those were two of five fatalities reported by Robinson in the last five years.

Dennis Bolt insists that Texans should be able to tap their own know-how to address persistent dangers in the oil patch and says he plans to ask the Legislature to address issues in the 2015 session. Bolt would like to see leaders tackle many tough problems like drug and alcohol use on worksites and the reuse of old and obsolete oil field equipment. He also wants to see them consider requiring law enforcement officers to routinely secure fatal accident sites to help preserve evidence and prevent cover-ups.

Wrongful death lawsuits filed in Harris County on behalf of Bolt and Daves have been settled. While the terms of the settlement prohibit Dennis Bolt from discussing the accident, he’s not done talking about the need for reforms.

“I want these Robinson deaths to not be in vain,” Bolt said. “The oil field must change.”

Article Source: Olsen, L. (2014). Oil field deaths rose sharply from 2008 to 2012. Houston Chronicle. Retrieved from http://www.houstonchronicle.com/news/houston-texas/houston/article/Oil-field-deaths-rose-sharply-from-2008-to-2012-5433943.php

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Shale boom weans U.S. from foreign oil, creates new opportunities

by Rhiannon Meyers

The U.S. may be producing more of its own oil than it has in decades, but it’s unlikely the nation will fully wean its dependence on foreign crude anytime soon.

“We will deeply remain an importer of crude oil for the absolute foreseeable future,” Greg Haas, director of integrated oil and gas research at Stratas Advisors told a group gathered at the Dallas Federal Reserve Bank on Thursday.

Although the U.S. is far from achieving anything close to full energy independence, the rapid resurgence in domestic oil and gas production has slashed the nation’s reliance on foreign oil in a short period of time, Haas said.

In 2006, about 70 percent of U.S. consumption came from other countries, notably Mexico, Venezuela and Canada, Haas said. But the uptick in domestic drilling has caused that pendulum to swing to less than 30 percent last week, according to the U.S. Energy Information Administration, which predicts that number to fall even further in the next year, Haas said.

With the U.S. relying less heavily on energy imports, other countries are taking notice, watching to see how the nation will take advantage of the vast new supplies of oil and gas, Haas said.

A long-standing government ban on crude oil exports created a bottleneck within U.S. borders, but that glut of oil and gas has generated new opportunities for midstream and downstream companies. For example, Haas said the proposed new infrastructure to bring natural gas liquids to market is the “highest growth market I know of, even exceeding that for crude oil.”

Haas said his company has identified more than 600 proposals to build new processing plants, fractionators, pipeline expansions and export facilities.

“Every day, you see a new announcement,” he said.

But he was particularly interested in condensate splitters, which are new innovation to the U.S. and can process a very light oil for a fraction of the cost  to build a new refinery. These projects pose an interesting opportunity for U.S. companies because the federal government recently ruled that condensate can be shipped overseas with minimal processing, Haas said. Two companies, Pioneer Natural Resources and Enterprise Products Partners, have received permission to export condensate.

The refining sector is another key area to watch, Haas said, noting that there’s been a surge of announcements of refineries for sale. Venezuela has said it may be considering selling its Citgo refineries along the Gulf Coast and a Korean-based company has expressed interest in offloading a high-cost refinery in Nova Scotia that has been running a deficit for years, forced to process Brent oil, the more expensive international benchmark crude because it lacks the pipeline infrastructure to bring in cheaper U.S. tight oil, Haas said.

The biggest game-changer, however, may be a refinery in St. Croix in the U.S. Virgin Islands, which has been mothballed since 2012, Haas said. The 500,000-barrel per day refinery, which has the capacity to process both light and heavy crude, isn’t subject to the Jones Act, meaning it costs less to ship products to and from the plant than it would inside the United States, Haas said.

The plant recently announced that it’s found a buyer, although declined to provide further details, and if it gets restarted soon, it could become a big new outlet for U.S. oil, Haas said.

Article Source: Meyers, R. (2014). Shale boom weans U.S. from foreign oil, creates new opportunities. Fuelfix.com. Retrieved from http://fuelfix.com/blog/2014/10/16/shale-boom-weans-u-s-from-foreign-oil-creates-new-opportunities/

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Oil refinery

OPEC Finding U.S. Shale Harder to Crack as Rout Deepens

By Grant Smith and Dan Murtaugh

OPEC is resisting pressure to cut oil production while demand slumps as it tests how low prices must go to make U.S. shale oil unprofitable. As producers become more efficient, that floor is sinking.

The Organization of Petroleum Exporting Countries boosted output by the most in 13 months in September, even as crude plunged into a bear market and demand growth weakens to a five-year low, according to the International Energy Agency. Saudi Arabia and Kuwait, the largest and third-largest members of OPEC, indicated the price slump doesn’t warrant immediate production cuts, the IEA said.

While OPEC acted as a “swing producer” over the past decade, responding to surpluses by cutting output, it’s now letting oil slide to see if North American production can withstand lower prices, said Antoine Halff, head of the IEA’s oil industry and markets division. So far drillers are showing no signs of cracking, with the U.S. government forecasting record shale output in November, helping boost the nation’s crude supply to the highest level since 1986.

“This is a new situation and will likely elicit a new response from OPEC,” Halff said by phone from Paris yesterday. “We’re more likely to see OPEC let market forces play out and let the higher-cost production be the first one to cut.”

Brent crude, a benchmark for more than half the world’s oil, slumped as much as 2 percent today to a four-year low of $83.37 a barrel on the ICE Futures Europe exchange in London. Brent has dropped more than 20 percent from its June peak, meeting a common definition of a bear market. West Texas Intermediate crude on the New York Mercantile Exchange sank as much as 2.2 percent to $80.01, a two-year low.

Saudi Determination

Saudi Arabia has “appeared determined to defend its market share” in Asia, even at the expense of lower prices, the IEA said in a report yesterday. Kuwait’s oil minister said there may be “no room” to restore prices by trimming supply. Saudi Arabia, Iraq and Iran are offering the biggest discounts to crude buyers in Asia since at least 2009, amid speculation they are seeking to maintain market share.

“It makes perfect sense for Saudi Arabia to let the price drift down,” said Jamie Webster, an analyst in Washington at IHS Inc. “There’s a lot of discussion on what is the break-even price for shale, and whatever you believe, the reality is there’s no clear consensus. It gives the Saudis the opportunity to test” that level, he said.

Iran, OPEC’s fifth-biggest supplier, isn’t concerned about the drop in prices, which will pass, Roknoddin Javadi, deputy oil minister and managing director of National Iranian Oil Co., was quoted as saying by Mehr, the state-run news agency.

Break-Even Costs

About 2.6 million barrels of daily production, or 2.8 percent of global output, requires an oil price of $80 a barrel or more to be profitable, the IEA said. Only about 4 percent of U.S. shale output needs prices above that level, it said. Canadian synthetic oil projects are the most dependent on high prices, with about a quarter needing oil to remain above $80, the agency said.

Horizontal drilling and hydraulic fracturing in hydrocarbon-rich underground shale layers have helped U.S. oil production grow 65 percent in the past five years to the highest level since 1986. That’s reduced crude imports by more than 3.1 million barrels a day since peaking in 2005.

Production per well was projected to increase in fields in North Dakota, Texas and Colorado, the Energy Information Administration said yesterday. Companies are getting more oil per dollar spent drilling, driving costs down by as much as $30 a barrel since 2012, Morgan Stanley (MS) analyst Adam Longson said in a report Oct. 13.

Lower Prices

“Prices aren’t low enough to put these projects at risk,” Matthew Jurecky, head of oil and gas research for the London-based research company GlobalData Ltd., said by e-mail yesterday from New York. “The profit margin on most commercial unconventional oil plays will support prices as low as $50, many below that even.”

U.S. shale producers could keep pumping oil economically even if Brent dropped to $60 a barrel, Bjornar Tonhaugen, an analyst with Oslo-based Rystad Energy, said in an e-mailed report yesterday. Brent would need to remain at $50 a barrel for 12 months for North American shale output to drop by 500,000 barrels a day, he said. Morgan Stanley said break-even costs at the Eagle Ford shale formation in Texas range from $30 to $60 a barrel.

“We continue to be impressed by how much operators are improving their operations,” R.T. Dukes, an upstream analyst for Wood Mackenzie Ltd. in Houston, said yesterday by phone. “There’s enough out there that significant development would continue even at $75 or $80.”

Expensive Projects

Oil may have already fallen sufficiently to curb the most expensive shale projects, according to estimates from Goldman Sachs Group Inc. Drilling may slow down in North Dakota with WTI below $90 a barrel, Jeff Currie, the bank’s head of commodities research, said in an interview in London on Oct. 1. Producers in the area decreased activity when WTI plunged below this level in 2012, Currie said.

Jefferies LLC, which advises on mergers and acquisitions, estimates that a drop to $80 a barrel or lower in WTI would trigger a reduction in drilling operations, Ralph Eads, the bank’s vice chairman and global head of energy investment banking, said in an Oct. 1 interview.

Weaker Demand

Global oil consumption will expand by about 650,000 barrels a day this year to 92.7 million, the lowest growth since 2009 and about half the increase projected in June, the IEA said. OPEC boosted production in September, pumping 30.47 million barrels a day, the most since August 2013, the group said Oct. 10 in its latest monthly oil market report. Its next meeting is scheduled for Nov. 27 in Vienna.

Saudi Arabia, which pumped almost one-third of the group’s output last month, won’t alter its supplies much between now and the end of the year, a person familiar with its policy said on Oct. 3.

“They’ve not come out and said ‘we will do what it takes to balance the market’,” said Mike Wittner, head of oil market research at Societe Generale SA in New York. “Right now the economy is weak, and demand is weak in Europe and China. The market wants to see something fairly dramatic.”

Article Source: Smith, G. & Murtaugh, D. (2014).  OPEC finding U.S. shale harder to crack as rout deepens. Bloomberg. Retrieved from http://www.bloomberg.com/news/2014-10-15/opec-finding-u-s-shale-harder-to-crack-as-rout-deepens.html

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Oil tanker proposal draws fire from industry

By Zack Colman

Refineries, oil producers and railroad companies say they need more time to swap out the old tank cars that carry crude oil and ethanol than the Transportation Department has proposed in a rule to prevent those trains from exploding.

Industry groups said in comments filed late Tuesday that they cannot feasibly retrofit or replace enough of the thousands of “legacy” tankers by the Oct. 1, 2017, proposed deadline without causing oil supply disruptions.

“This rule, if not properly re-worked, could have a significant impact on jobs and the economy,” American Fuel and Petrochemical Manufacturers President Charles Drevna said Tuesday, adding that the agency’s Pipeline and Hazardous Materials Safety Administration’s proposed timeframe was “infeasible.”

The Department of Transportation wants to get the old tankers off the rails following a series of accidents and explosions that have stoked fear about potential disasters, while adding safety features such as advanced brakes and thicker shells to models that adopted 2011 industry-approved safety measures.

The concern reached a head in July 2013, when an unmonitored train carrying crude from the Bakken shale formation in Montana and North Dakota derailed and exploded in Lac-Megantic, Quebec, killing 47.

But industry groups representing oil producers, railroads and refineries rejected the strongest safety measures in the agency proposal, such as the thickest shells for containing flammable liquids and certain types of advanced braking systems, for which environmental and liberal groups had advocated.

It’s a debate that has stretched across communities, flaring up in places where there isn’t any oil production but which tankers pass through. The volume of oil being carried around the country has risen sharply due to shale production. In 2009, there were 10,800 carloads carrying Bakken crude. Last year, shipments surpassed 400,000, according to the Department of Transportation.

Environmental groups, in comments to the agency, pushed the agency to accelerate its timeline for eliminating the older tank cars, with some pressing for an immediate ban.

“DOT falls short of its obligation to ensure that transport of volatile crude oil by rail is done in a safe and responsible manner. The proposed rule would keep thousands of communities in the U.S. and Canada under the continued threat of catastrophic train crashes,” said Devorah Ancel, a lawyer with the Sierra Club.

But implementing the rule quickly, the oil and refining industries said, could cause shortages in oil supply that drive gasoline prices upward. Drevna said AFPM would ask for a 10-year window. The American Petroleum Institute and the American Association of Railroads said in joint comments that older tankers should be eliminated in four years and newer models should have seven years to complete upgrades.

Drevna cited statistics from railcar industry group the Railway Supply Institute that 28 percent of the 98,000 tank cars that currently transport hazardous materials such as crude oil would retire under the proposed rule. But the industry needs a year to ramp up for new builds, has a backlog in the tens of thousands of cars and estimates it could at best churn out 6,400 cars annually.

The Railway Supply Institute could not be reached for comment.

The railroad, refining and oil industries agreed that, with some improvements, the newer tank cars built with the 2011 industry-approved standards should remain on the rails. But there were some variations as to what those retrofits would entail.

AFPM elected to go with the current 7/16 inch shell thickness, while API and AAR said 1/2 inch would be desirable. The Department of Transportation suggested a shell thickness of 7/16 inch and 9/16 inch.

Gerard and Drevna said the thickest shell would yield few safety benefits — they said cars would be heavier and couldn’t carry as much crude, so it would increase the amount of cars on the rails — at a significant cost.

But the Greenbrier Cos., a top railcar manufacturer based in Lake Oswego, Ore., said it preferred the thickest shell, though it said the agency’s suggestions to include “top-fittings” designed to prevent rollovers and advanced braking systems would be unnecessary and ineffective.

Greenbrier is already making tank cars with that thick a shell, and plans to double production this year. It took a swipe at oil and refinery industry concerns by saying those cars carry the same volume of crude oil as the legacy tankers that the proposed rule would phase out.

On speed limits, the railroad, oil and refining industries all said sticking to a 40 miles per hour limit when carrying flammable materials through populated urban centers, while maintaining a 50 mph speed limit elsewhere was desirable.

The railroad industry has been gearing up for that since February, when it struck a deal with the Department of Transportation to voluntarily take steps to address safety concerns.

“Railroads have been at the forefront of advocating for safer tank car standards and we believe the public supports regulation that weighs both safety and the ability to move people and goods in a timely and efficient manner,” AAR President Edward Hamberger said.

Article Source: Colman, Z. (2014). Oil tanker proposal draws fire from industry. Washington Examiner. Retrieved from http://washingtonexaminer.com/oil-tanker-proposal-draws-fire-from-industry/article/2554212

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N.D. oil output jumps even as flaring rule changes loom

Oil pipeline

By Ernest Scheyder

(Reuters) – North Dakota’s daily oil production jumped 5 percent in July to an all-time high, though the number was lower than expected as producers worked to meet aggressive flaring-reduction targets, state regulators said on Friday.

The production numbers, which have been steadily rising for years, highlight the massive investments Hess Corp, Whiting Petroleum Corp and other companies are making to develop the state’s oil-rich Bakken and Three Forks shale formations and others.

Despite the positive production data, shares of top North Dakota oil producers fell with the broader market.

The investments have brought thousands of new workers to North Dakota, as well as billions in infrastructure and real estate investment, making the state the fastest-growing economy in the United States.

North Dakota’s oil wells produced 34.4 million barrels in July, up from 32.8 million barrels in June, the North Dakota Department of Mineral Resources said. That averaged 1.1 million barrels a day.

Natural gas production in the state hit 1.3 billion cubic feet per day, also an all-time high. The percentage of natural gas flared in the state fell to 26 percent in July from 30 percent in June.

In an effort to curb flaring, the wasteful burning of natural gas, state regulators issued strict goals earlier this year with key benchmarks for flaring percentages each month. For Oct. 1, for instance, the state’s oil producers cannot flare more than 74 percent of natural gas produced. If they do, they face fines.

The industry has effectively reached that goal, but it did so by posting a jump in July oil production that was only about half what had been expected, Lynn Helms, the director of the state Department of Mineral Resources, said in a presentation to reporters.

“The industry is taking this dead serious,” Helms said of the flaring goal.

The number of rigs operating in the state as of Friday stood at 198, up from 193 in August but 9 percent below the all-time high, according to state data.

“The industry understands that there is no better place to make money than the core of the Bakken and Three Forks formations” in North Dakota, Helms said.

Helms vowed to keep drilling permit approvals going in order to continue development, though he acknowledged that oilfield service companies are having a hard time completing wells due to the speed at which drilling is occurring.

Shares of top Bakken oil producers fell across the board on Friday along with the broader stock market.

Shares of Continental Resources Inc fell the most after the company, the largest North Dakota oil company, said its president had quit. The stock was down $1.93, or 2.5 percent, at $73.86 a share on the New York Stock Exchange.

(Reporting by Ernest Scheyder; Editing by Chizu Nomiyama and Jonathan Oatis)

Source: http://www.reuters.com/article/2014/09/12/oil-north-dakota-idUSL1N0RD1BL20140912

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After Eric Cantor’s Exit, House Turns Sympathetic Ear From Big Business to Oil and Gas

Congress returns next week for a mere 12 scheduled legislative days before the November midterm elections, but in that brief reappearance, the House’s new leadership team will be tested. If nothing is done, the federal government will run out of money on Oct. 1, and the federal Export-Import Bank — which underwrites American private-sector exports — will exhaust its charter.

With both issues, the departure of Mr. Cantor, the former House majority leader defeated in a June Republican primary, and the rise of Representative Steve Scalise of Louisiana, the newest member of the Republican leadership, will be felt. Mr. Scalise, the new House majority whip, brings with him a capacity to deal with the House’s most ardent conservatives, which could help to keep the government open ahead of the elections.

But Mr. Cantor was the man who could translate the wishes of Big Business to the conservatives. Without him, the Export-Import Bank and its business supporters have lost their most persuasive advocate. Asked who in the new leadership can talk to business interests and Wall Street, Mr. Scalise said, “I have no idea.”

Mr. Cantor, once the bridge to those interests, crossed to the other side. He joined Moelis & Company, a small investment bank, as vice chairman and managing director with a pay package worth $3.4 million over the next two years.

Without him, House Republicans are left with a comparatively inexperienced leadership team. In his 24th year in Congress, Speaker John A. Boehner of Ohio has broad legislative experience and the skills of a political survivor. Below him, the new House majority leader, Representative Kevin McCarthy, is in his fourth term and Mr. Scalise his third.

In official rankings, Representative Patrick T. McHenry of North Carolina, Mr. Scalise’s chief deputy, is the second-most senior member of leadership, just nudging out a fellow fifth-termer, the Republican Conference chairwoman, Representative Cathy McMorris Rodgers of Washington.

Besides the speaker, no member of the House Republican leadership was in Congress for the attacks of Sept. 11, 2001, or the invasion of Iraq. The top six Republican leaders have served a collective 64 years in the House. The top three Democratic leaders have served 80.

“This is unique,” said Norman J. Ornstein, a congressional scholar at the American Enterprise Institute. “You now have a sizable number in leadership who were not there when the parties routinely worked together or who have a significant understanding of operating in divided governance. The only thing they’ve seen is tribalism.”

What is more, with so little time in Washington, the new leadership team has yet to develop deep connections to the K Street lobbying world or the elders in either political party.

Mr. Scalise said his degree is in computer science, an interest he maintains, but what animates him most is the oil and gas industry that has long been central to the Louisiana economy.

“Build the Keystone pipeline, open up the outer continental shelf, bring in billions of dollars to the Treasury to help us balance the budget, look at the E.P.A. and what it’s trying to do to shut down energy production in America,” he said. “This is real stuff that’s happening in the country, and it’s not just Louisiana.”

Louisianians foresee a new moment for their state and its congressional history, from Russell and Huey Long to John Breaux and Hale Boggs. Robert L. Livingston resigned in scandal in 1998 just days before he was set to take over the House speakership. Now, as a prominent Washington lobbyist, he said he was advising Mr. Scalise on policy and leadership issues.

“He doesn’t ask for it,” Mr. Livingston said of his advice. “I volunteer it.”

Another former House member from Louisiana, Jim McCrery, was once the top Republican on the Ways and Means Committee. Now, as a senior tax lobbyist in Washington, he said he had spoken with the new majority leader on a broad overhaul of the tax code.

“Louisiana over the years has managed to have a delegation that is stronger than its numbers,” Mr. McCrery said. “We’re still a long way away from being where we used to be, but it’s a good start.”

Louisiana’s gain has been New York’s loss. Representative Peter T. King, one of the last in New York’s shrinking Republican delegation, said Mr. McCarthy had been developing contacts with Wall Street and the Big Business community. But it is a measure of business’s relative lack of influence that Mr. McCarthy turned against reauthorizing the Export-Import Bank shortly after Mr. Cantor’s defeat.

The U.S. Chamber of Commerce, the National Association of Manufacturers and other business groups have mounted an all-out campaign to save the bank, arguing that its loans and loan guarantees to foreign customers of American exporters are vital to the country’s competitiveness in a global economy. But conservative activists have denounced the bank as corporate welfare, an argument Mr. Cantor was willing to rebut but his successor has avoided.

With Mr. Cantor gone, the coalition supporting the bank has opted for a bottom-up campaign, sending home-district manufacturers to lobby rank-and-file members and largely bypassing Republican leaders.

“We need a durable solution to this issue,” said Tony Fratto, a former Bush administration official organizing the campaign.

The new leadership team at one point turned to Mr. McHenry, the chief deputy whip, as the possible point person with Wall Street. He does serve on the House Financial Services Committee, but as the sixth man in leadership, he can wield only so much influence.

“Obviously Eric was the conduit on a number of these issues,” Mr. King said. “It’s going to be a challenge.”

Source: http://www.nytimes.com/2014/09/03/us/politics/eric-cantor-takes-job-with-wall-street-investment-firm.html?_r=0

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100 pairs of work socks headed to oil field

Jeff Bahr | Aberdeen News

Hannah LaJoie wasn’t interested in winning a 5K Fun Run/Walk on Saturday morning. She cared a lot more about being honored for her flamboyant socks.

Hannah, 10, sported a colorful look in the “Run Your Socks Off” 5K event, organized by North Highland United Methodist Church.

You can be sure her legs weren’t cold. Hannah was wearing eight pairs of socks, which created a wild rainbow effect. She also had four pair of socks elsewhere on her body.

Why was Hannah wearing the wacky attire?

“Well, because I love wearing crazy socks,” said the Warner student.

Over the summer, the Boys and Girls Club had a crazy socks day and Hannah took that event. She describes herself as “really competitive.”

So Hannah was happy after Saturday’s run when she and her 4-year-old sister, Kenna Wolberg, were honored for their socks. They were the two young people who won sock awards.

More importantly, though, a lot of people in the North Dakota oil fields will be wearing better socks because of the event.

The entry fee for the fun run was a pair of work socks, each of which will be shipped to folks in the Bakken oil basin. “We collected close to 100 pair,” said the Rev. Lou Whitmer, pastor of North Highland.

About 50 people covered the 5K course. The event was a project of the Bakken Oil Rush Ministry, which is organized by United Methodist churches in the Dakotas.

Whitmer knew that several members of the church like to run, so the run seemed like “a fun way to do a mission program,” she said.

Many of the participants dressed for the occasion. Fashion choices ran from argyle to stripes galore. Participants ranged from Michael Hartung, who’s run four marathons, to babies in strollers.

Ten-year-old twins Zachary and Nathan Palmer joined their mother, Lesleann, at the fun run/walk. Lesleann was there because of her best friend, Amber Huff, who invited her. “I knew she wouldn’t turn down a chance to do a run,” Huff said.

Also taking part was Huff’s sister, Miranda Telin, and her parents, Al and Kristie Scherbenske, who go to church at North Highland. They told Telin about the event “and I thought it was a good fundraising effort for people in North Dakota,” she said.

Two of the participants, De Basham and Dar Retzer, recently saw a missionary from the Bakken area speak at First United Methodist. The speaker lives in Williston, where her rent is $2,500 a month.

Hannah and Kenna participated with their grandmother, LeAnn Conn.

The run/walk was just the start of a busy day for the Sarah and Nathan Miller family. Later in the day, their three sons had soccer games. Sarah ran the 5K course Saturday because she likes to run. She was on the cross country team at Edmunds Central, when her name was Sarah Miles. “Run Your Socks Off” was her third 5K, the second one this year.

The 5K was successful enough that North Highland will have another fundraiser next September.

“It was really fun to have the community support along with the people of the church,” Whitmer said. “And it was a beautiful day and lots of energy.”

Source: http://bakken.com/news/id/221172/100-pairs-work-socks-headed-oil-field/

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Leader of Bakken drug ring gets 20 years prison

A federal judge sentenced the leader of an interstate drug ring to 20 years in prison Friday for his role in a major trafficking operation that stretched from western Washington to the Bakken oil fields of the Northern Plains.

U.S. District Judge Susan Watters said Robert Farrell Armstrong, of Moses Lake, Wash., preyed upon addicts in the Montana-North Dakota oil patch to build up a network of drug couriers, dealers and armed enforcers.

Armstrong, also known as “Dr. Bob,” was arrested in October as part of a law enforcement crackdown aimed at the Bakken oil region’s proliferating market for illicit drugs. Authorities have struggled to curb rising crime rates in once-quiet rural communities as people flocked there to take part in the region’s new prosperity.

Armstrong, 50, pleaded guilty in January to a single count of possession of methamphetamine with intent to distribute. He’s the 13th defendant sentenced in the case. Five more defendants have pleaded guilty and are awaiting sentencing, and another is scheduled to go to trial in November.

Authorities say the Sidney-based drug ring moved as much as a pound of meth a week before it was busted up last year.

“You’re an old criminal, Mr. Armstrong, and you’ve been doing this a long time,” Watters said. “The community needs to be protected from you.”

Before hearing his sentence, Armstrong asked Watters for mercy and apologized to the court for the damage he had caused to his family and people in Montana.

He said his judgment had been clouded by living for many years as a drug addict and he has been sober now for almost a year. “I believe prison is going to be good for me,” Armstrong said at one point.

Similar drug rings have been broken up in neighboring North Dakota. Along with meth and heroin, the criminals moving into the oil patch have brought weapons and a willingness to engage in violence, authorities say.

Armstrong came to the region in 2012 from Washington, where he had a string of drug and assault convictions stretching over three decades, according to Assistant U.S. Attorney Joe Thaggard.

In Montana’s oil patch, Armstrong set up shop in in a trailer along the Yellowstone River and oversaw a “massive, well organized scheme” that brought in large volumes of almost-pure meth from Washington state for distribution, Thaggard said.

Other Montana cities and towns where the ring distributed meth were Fairview, Billings, Big Timber, Columbus, Livingston and Bozeman, authorities said.

Armstrong’s network included couriers to get the drugs from Washington, dealers to sell it in Montana, and enforcers — some with firearms — to collect on overdue drug debts, said Jeff Nedens, an agent with the Montana Division of Criminal Investigation.

Nedens said Armstrong also traded meth for guns with at least one customer.

Under Armstrong’s plea agreement, prosecutors agreed to dismiss additional drug conspiracy, distribution, and firearms charges.

Armstrong’s public defender, Anthony Gallagher, asked Waters for a 10-year sentence. Gallagher argued that prosecutors overstated Armstrong’s leadership role in the trafficking ring and his criminal history.

He pointed out that Armstrong and at least one other co-defendant had been supplied with meth from the same source – a supplier in western Washington identified in court only as “George.”

“This was the classic case of a group involved collectively in a criminal enterprise,” the defense attorney wrote in a pre-sentencing memorandum. “All or almost all were independent contractors working in concert to obtain methamphetamine.”

Watters said she was not convinced.

Armstrong “was in fact the person who recruited these people in eastern Montana to distribute these drugs, to go on these drug runs,” the judge said. “The defendant was the connection between George and all of these people.”

Nedens said George and other unspecified individuals remain under investigation.

Prosecutors have racked up 105 indictments since the Bakken drug crackdown began about two years ago, U.S. Attorney Michael Cotter said this week. Another 100 indictments, all on federal narcotics charges, are expected in the next 12 months, Cotter said.

source- http://billingsgazette.com/news/state-and-regional/montana/leader-of-bakken-drug-ring-gets-years-prison/article_08da4bd6-d951-519b-83fb-11280fe530f3.html#ixzz3CMabXq70

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Hotel

Hotel that would house 300-plus Bakken workers deemed too big for tiny town

BISMARCK, N.D. — The Billings County Commission decided at its meeting Tuesday that an extended-stay hotel for more than 300 oil patch workers is too big for the tiny town of Fryburg, near Medora.

The commission agreed with its planning and zoning board, which recommended denial at a meeting two weeks ago, partly because the county volunteer fire and sheriff’s department isn’t geared up for that size facility.

The developers of the proposed Morgan Lodge planned to add a four-story hotel onto the former Fryburg school, using the school for a restaurant and dining facility and meeting space.

Fryburg residents have been opposed to all those workers in town and told county officials they think the project is too big for them to handle. They also said there isn’t enough oil activity in Billings County to warrant the scale of the hotel, and the planned sewage waste system was too close to local residences.

Margie Lindbo, of Fryburg, said she and other residents are pleased with the county’s decision to go along with the zoning board.

“We’re very happy,” she said.

She said the developers have said they are looking at other land around Fryburg, so whether the county’s refusal is final remains to be seen.

“Time will tell,” Lindbo said.

source- http://billingsgazette.com/business/features/hotel-that-would-house–plus-bakken-workers-deemed-too/article_35f21126-2858-5602-9bf2-f1d33b00a684.html#ixzz3CMYZs6yX

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Midstream firms build to meet Eagle Ford condensate production

HOUSTON — With an $860 million deal announced this week, Buckeye Partners is betting on condensate.

Condensate, a type of light crude oil, has been flowing in increasing quantities from the Eagle Ford Shale in South Texas as technological advances boost production there.

And with more condensate flowing from the region — as well as the possibility that lightly refined condensate may be exempt from a U.S. ban on most crude oil exports — many midstream companies are looking at potential profit in getting the light oil from the South Texas wells to market.

From 2009 to 2012, annual U.S. production of condensate from wells grew by 54 percent, from 178 million barrels to 274 million barrels, according to U.S. Energy Information Administration. By many estimates, the Eagle Ford  region accounts for the majority of that production.

On Tuesday, Houston-based Buckeye Partners L.P. announced it would enter the heated market by paying $860 million for an 80 percent interest in Texas facilities owned by Trafigura AG. The deal includes gathering facilities in the Eagle Ford, as well as processing plants and a marine terminal in Corpus Christi.

Buckeye has been active in markets including Chicago, New York and the Caribbean.

Buckeye and Trafigura will  run the assets  as a joint venture and will contribute at least another $240 million to build new storage and seaborne shipping capacity in the near future, the companies announced.

Trafigura AG is a subsidiary of Netherlands-based commodities trader Trafigura Beheer BV.

Under the new agreement, Trafigura will buy oil and condensate produced in the Eagle Ford before sending it  to other markets using the joint venture’s infrastructure, said spokeswoman Marisol Espinosa.

The deal includes two condensate splitting units Trafigura already is building. Splitters  break condensate into component parts including naphtha, kerosene and diesel. The units will be able to handle a combined 50,000 barrels per day of the light oil when completed in 2015.

In a Wednesday morning conference call with investors, Buckeye Partners executives said the partnership is considering building another splitter.

Other midstream interests also are building splitters to accommodate the increasing amount of condensate flowing from the Eagle Ford.

“The outlook is pretty favorable,” said Lysle Brinker, a research director at analyst firm IHS . “A lot of companies are looking at doing this.”

Kinder Morgan Energy Partners’ $360 million splitter project at its Galena Park terminal on the Houston Ship Channel, also slated for completion in 2015,  will have a daily capacity of 100,000 barrels .

“Midstream is moving into processing,” said John Auers, executive vice president with Turner Mason and Co. “These large midstream companies are investing and the Gulf Coast is the place to be.”

Besides deriving condensate components, running it through a splitter can clear the way for its export.

A law that arose from oil shortages in the 1970s bans most crude oil exports from the United States, but recent regulatory activity has allowed some export of lightly processed condensate with a license.

Trafigura has applied for such  a license, Espinosa said.

If regulators approve, the new Trafigura-Buckeye venture could export condensate through its five ship berths at the Corpus Christi facility terminal.

In a presentation to investors, Buckeye said that the market probably will favor splitting condensate it into its parts before sending it abroad. But Buckeye also stressed that it would remain flexible.

source-http://fuelfix.com/blog/2014/09/03/midstream-firms-build-to-meet-eagle-ford-condensate-production/

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Texas Proposes Tougher Rules On Fracking Wastewater After Earthquakes Surge

The agency that regulates oil and gas activity in Texas is considering new, tougher regulations governing the practice of injecting leftover water used to frack natural gas wells deep into the ground — a process which is believed to be responsible for an increase in human-caused earthquakes across the state.

The Texas Railroad Commission’s new proposed regulations on wastewater injection wells were heard by members of the Texas House of Representatives’ Subcommittee on Seismic Activity on Monday, following complaints that earthquakes have become more frequent over the last several years. Dr. Craig Pearson, the Railroad Commission’s new seismologist, told the subcommittee that the regulations would help make sure injected wastewater doesn’t migrate onto inactive fault lines and cause man-made quakes.

“Because we’re now dealing with induced seismicity, the worry is not only about water moving up [to our groundwater] but out to dormant faults,” Pearson said, noting that current regulations are only designed to protect from groundwater contamination.

The controversial technique of hydraulic fracturing, otherwise known as “fracking,” uses a great deal more water than conventional drilling. To stimulate natural gas wells, companies inject high-pressure water and chemicals miles-deep into subsurface rock which effectively cracks or “fractures” it, making the gas easier to extract.

The leftover wastewater used to frack the well is disposed of by injecting it deep underground, and scientists increasingly believe that this is causing man-made earthquakes — not only in Texas, but across the country. The large amount of water injected into the ground can change the state of stress on existing fault lines to the point of failure, scientists believe, causing earthquakes.

As it is now, Pearson said most of the earthquakes occurring in Texas are too small to be felt. But some scientists have warned that seismic activity stands to get stronger and more dangerous as fracking increases, and more wastewater propagates along fault lines underground.

If Texas’proposed rules on wastewater disposal wells are approved, companies seeking to operate them would have to include United States Geological Survey records of seismic events that have occurred around proposed well sites in their permit applications. The commission estimated that this would cost companies an additional $300, which the rules describe as “negligible.”

Additionally, the commission would be allowed to suspend or terminate any wastewater disposal operator’s permit if it finds that fluids have been leeching past where they’re supposed to be. It would also be allowed to terminate an operator’s permit if the operator is found to be responsible for earthquakes. The rules would not require that permits be suspended for fluid-leeching violations or earthquakes; instead, they would just give the commission the authority to do so if it wanted to.

The commission would also be allowed to require more frequent monitoring of fluids and pressure from certain companies, and to request additional information from the application to prove that fluids won’t spread across fault lines.

So far, environmentalists have applauded the rules as a good start, but have expressed concerns that they don’t go far enough.

“It’s kinda like when you’re in a 12-step program,” Cyrus Reed with the Sierra Club told Terrence Henry at StateImpact NPR. “You know, the first thing you need to do admit that you have a problem. And I think the Railroad Commission has done that by proposing these rules.”

Indeed, the Railroad Commission has come a long way from January, when commission Chairman Barry Smitherman refused to acknowledge that the quakes were linked to any part of the fracking process. “It’s not linked to fracking,” he told local reporters after a meeting of concerned citizens. “If we find a link then we need to take a hard look at all these injection wells in this area. Reexamine them … Perhaps there something that we’re not aware of underground.”

The Texas commission is taking public comment on the proposed rules until next month.

source-http://thinkprogress.org/climate/2014/08/27/3476207/texas-earthquake-rules-fracking/
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