Drilling Companies Cheating Landowners and Government Out of Royalty Payments

See on Scoop.itGreen & Sustainable News

Don Feusner ran dairy cattle on his 370-acre slice of northern Pennsylvania until he could no longer turn a profit by farming.

Duane Tilden‘s insight:

>Like every landowner who signs a lease agreement to allow a drilling company to take resources off his land, Feusner is owed a cut of what is produced, called a royalty.

In 1982, in a landmark effort to keep people from being fleeced by the oil industry, the federal government passed a law establishing that royalty payments to landowners would be no less than 12.5 percent of the oil and gas sales from their leases.

From Pennsylvania to North Dakota, a powerful argument for allowing extensive new drilling has been that royalty payments would enrich local landowners, lifting the economies of heartland and rural America. The boom was also supposed to fill the government’s coffers, since roughly 30 percent of the nation’s drilling takes place on federal land.

Over the last decade, an untold number of leases were signed, and hundreds of thousands of wells have been sunk into new energy deposits across the country.

But manipulation of costs and other data by oil companies is keeping billions of dollars in royalties out of the hands of private and government landholders, an investigation by ProPublica has found.

An analysis of lease agreements, government documents and thousands of pages of court records shows that such underpayments are widespread. Thousands of landowners like Feusner are receiving far less than they expected based on the sales value of gas or oil produced on their property. In some cases, they are being paid virtually nothing at all.

In many cases, lawyers and auditors who specialize in production accounting tell ProPublica energy companies are using complex accounting and business arrangements to skim profits off the sale of resources and increase the expenses charged to landowners.<

See on insideclimatenews.org

UK offers Big Tax Breaks for Shale Gas Fracking

See on Scoop.itGreen & Sustainable News

Chancellor George Osborne has said that the Treasury will go ahead with the most generous tax regime for shale gas in the world.

Duane Tilden‘s insight:

>In the North Sea oil and gas exploration has received tax breaks along the same lines. This has brought about a renewed interest in this field, which is both technically very difficult and rather expensive. The tax allowance will see a huge relief for fracking, with a portion of each production sites income taxation going to a level of 30% in place of the 62% currently levied.

The British Geological Society has said that shale gas in northern England alone could be as high as 1,300 trillion cubic feet and just 10% of that would meet Britain’s needs for more than 40 years.

Water UK, a representative of Britain’s biggest water suppliers has voiced fears that large quantities of water needed for fracking would stretch water supplies very thinly in the areas earmarked for fracking sites, and there is a concern of contamination of water supplies with chemical waste and methane gas. Water UK said that damage could be done to the existing water pipe infrastructure with resultant shortages for home and business use.

Fracking companies say that lengthy waiting periods for environmental permission to begin fracking are a major concern, and Ministers have said they will endeavour to minimise the waiting period from over three months to under two weeks. Public support for shale gas exploration is low.<

See on www.pcmswitch.co.uk

UK Energy Minister defends fracking comments

See on Scoop.itGreen & Sustainable News

Energy minister Michael Fallon defends comments about fracking, in which he appeared to suggest the process would affect those living near drilling sites.

Duane Tilden‘s insight:

>Mr Fallon said fracking would only be allowed if “absolutely safe”.

In an exchange with the BBC Mr Fallon confirmed he had made the remarks but said the newspaper report had “completely misconstrued a light hearted remark”.

He said “no fracking will be allowed in the Weald unless it is absolutely safe and the environment is fully protected”.


But demonstrators from across the UK have gathered in the area saying they fear test drilling could lead to the search for shale gas and fracking at the site.

In a separate development, Cuadrilla chief executive Francis Egan revealed he had received an anonymous email saying the company would receive “pipe bombs delivered by express mail to its premises” unless the company ceased its activities in the UK.

“Fracking kills and so do we,” the message said.<

See on www.bbc.co.uk

Glut of Natural gas squeezes biofuel market

See on Scoop.itGreen Energy Technologies & Development

Farm Power Northwest has built five anaerobic digesters in Oregon and Washington in recent years, but the brothers who founded the company say the outlook for new projects has lost its luster.

Duane Tilden‘s insight:

>The Mount Vernon, Wash.-based company, founded by brothers Daryl and Kevin Maas, uses manure from dairy farms to create methane gas, then burns it in generators and sells the resulting electricity to power utilities.


While power utilities paid up to 9 cents per kilowatt-hour several years ago for digester-produced electricity, the rate has now fallen to 5 cents per kilowatt-hour, said Kevin Maas.

The reason is the price of natural gas — a common fuel for electrical generation — has plummeted as domestic production has skyrocketed. Natural gas is now trading at below $4 per thousand cubic feet, compared with nearly $13 per thousand cubic feet in 2008.

That’s because new technology known as hydraulic fracturing, or fracking, has greatly increased the amount of natural gas that can be economically extracted from the ground.

With the cost of natural gas so much lower, other energy feedstocks like biogas from digesters become less competitive, experts say.<

See on www.capitalpress.com

COGA brings state into lawsuit against Longmont ‘fracking’ ban

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The lawsuit against Longmont&#27;s ban on fracking has now roped in the Colorado Oil and Gas Conservation Commission, the state&#27;s regulatory agency.

Duane Tilden‘s insight:

>Boulder County District Court Judge D.D. Mallard said she would allow the Colorado Oil and Gas Association to bring in the COGCC as an additional plaintiff, a move called “joinder.” In her ruling, Mallard said that while both parties had an interest in seeing the ban overturned, the state agency had aims that would not be adequately represented by COGA, the state’s largest oil and gas industry group.

“COGA’s interest in this case is to overturn the charter amendment so that its members can proceed with oil and gas production using fracking […]

Longmont voters passed the ban on hydraulic fracturing, or “fracking,” last November with about 60 percent in favor. Supporters of the ban say the practice can lead to environmental damage; opponents say the practice is so well-established that a ban on fracking is practically a ban on drilling, and that only the state has the authority to regulate the methods used.<

See on www.timescall.com

Duke U Study Links Hydraulic Fracturing to Ground Water Contamination

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The debate about whether or not fracking can contaminate ground water supplies has been raging for a while now, and a new study by Duke University has found proof

Duane Tilden‘s insight:

>But let us allow Jacksona et. al. to speak for themselves, from the report: “We analyzed 141 drinking waterwells across the Appalachian Plateaus physiographic province of northeastern Pennsylvania, examining natural gas concentrations and isotopic signatures with proximity to shale gas wells. Methane was detected in 82% of drinking water samples, with average concentrations six times higher for homes” less than one kilometer from the fracked natural gas wells. […]

“They found that, on average, methane concentrations were six times higher and ethane concentrations were 23 times higher at homes within a kilometer of a shale gas well.  Propane was detected in 10 samples, all of them from homes within a kilometer of drilling. […]

The ethane and propane data are “particularly interesting,” he noted, “since there is no biological source of ethane and propane in the region […]<

See on oilprice.com

Fracking ban halts first shale gas project in Spain

See on Scoop.itGreen & Sustainable News

A ban on fracking in a northern region of Spain has crimped Repsol SA’s plans to begin drilling for shale gas in the north of Spain.

Duane Tilden‘s insight:

>Spain’s richest shale gas reserves have been determined to exist in the northern region of Cantabria, but back in April the local Cantabrian government  implemented the country’s first fracking ban, worried that such activities may pollute the local sources of drinking water. (Related article: Duke University Study Links Fracking to Ground Water Contamination) […]

Repsol had planned to begin seismic studies, with a view to drilling, in July, but the Cantabrian fracking ban, which prevents all hydraulic fracturing activities within the region’s borders, has put a hold on plans. In truth, it is not fully understood how the ban will affect Repsol, whose Luena project covers 290 square miles, and stretches from Cantabria down to Castille & Leon. Normally when a project extends across two regions or more it is regulated by the national Industry Ministry, not local governments. <

See on www.csmonitor.com

Gas Drilling, North Dakota : Image of the Day

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Cities and people are scarce in northwestern North Dakota, but nighttime satellite imagery shows the Bakken Formation aglow with brightly-lit drilling equipment.

Duane Tilden‘s insight:

Northwestern North Dakota is one of the least-densely populated parts of the United States. Cities and people are scarce, but satellite imagery shows the area has been aglow at night in recent years. The reason: the area is home to the Bakken shale formation, a site where gas and oil production are booming.

On November 12, 2012, the Visible Infrared Imaging Radiometer Suite (VIIRS) on the Suomi NPP satellite captured this nighttime view of widespread drilling throughout the area. Most of the bright specks are lights associated with drilling equipment and temporary housing near drilling sites, though a few are evidence of gas flaring. Some of the brighter areas correspond to towns and cities including Williston, Minot, and Dickinson. …

See on earthobservatory.nasa.gov