Showing posts with label Chesapeke Energy. Show all posts
Showing posts with label Chesapeke Energy. Show all posts

Thursday, March 22, 2012

Face-off over fracking

MARKET WATCH
March 22, 2012, 1:44 PM
Russ Britt




Natural gas may be plentiful, cheap and inviting at the moment. But the fracking process to get it still fans the flames of environmental policy clashes.
At the Wall Street Journal’s ECO:nomics conference outside Santa Barbara, Calif., drillers and environmentalists debated over whether fracking posed a danger to the communities they serve. Drillers said that the amount of natural gas available –4,000 trillion cubic feet — can’t be ignored.
“There is so much there, which is shown by what prices are,” said Edward Cohen, chief executive of Atlas Energy ATLS -0.19% .
But Paul Gallay, president of the environmental group Riverkeeper, challenged Cohen and Aubrey McClendon, chairman of Chesapeake Energy CHK -3.61%. Gallay says countless environmental hazards are  involved. He said there were high amounts of benzine in the air around the Fort Worth, Texas, area, where fracking has been taking place. There also have been problems in the air in parts of Colorado, where there are five times the number of pollutants compared with the national average.
“This is snake oil. This is not natural gas, folks,” Gallay said. He added once demand rises for natural gas, prices won’t be so cheap.
McClendon, however, said natural gas needs to rise by 800% in order to equal the cost of oil. And it’s needed in order to wean the U.S. off oil from the Middle East.


Tuesday, February 14, 2012

Chesapeake Energy is in a bind - Another oil & gas welfare recipient?

Christopher Helman
Forbes Staff
2/12/2012

Billionaire Wildcatter, Risk Addict Aubrey McClendon Has Bet It All On Shale

The company says it aims to raise $2 billion by spinning off assets from its service company and pipeline division. It expects another $2 billion from upfront sales of future flows from gas fields. And it earmarks another $6 billion or so from the sale of its largely undeveloped acreage in the oil-rich Permian basin. And for good measure, it will raise another $1 billion by issuing more senior debt. The $10-12 billion it hopes to raise is “substantially in excess of the difference between the company’s expected cash flow from operations and its planned capital expenditures.” Gosh I should hope so. Analyst Arun Jayaram at Credit Suisse pegs Chesapeake’s 2012 cash hole at $6 billion.

But with natural gas prices already at decade-long lows and set to go even lower in the months ahead, there’s no telling whether even Aubrey McClendon‘s legendary financial finagling will be able to save the day.

Desperate times call for desperate measures.

Chesapeake Energy is in a bind. It’s the second-biggest natural gas producer in the country after ExxonMobil. But with natgas prices having fallen to their lowest levels in a decade ($2.40 per thousands cubic feet), Chesapeake isn’t generating enough cash.

Chesapeake has curtailed its drilling in some plays, and in January said it would shut in production of marginal gas fields. But the company has $10 billion in debt to service and is obligated to keep drilling wells on newer oil and gas leases in order to hold the land. Over the course of 2012, if gas prices were to stay where they are now, Chesapeake would face a cash shortfall of several billion dollars.

A gift for financial engineering is part of the genius of Chesapeake Energy Chief Aubrey McClendon. For years he has driven Chesapeake hard and fast to gobble up oil and gas acreage across the country. To keep his land machine running, McClendon has continuously raised more cash from joint ventures, spin offs and by issuing debt. This wouldn’t have been a problem if gas prices just cooperated by staying around $5 or $6 per thousand cubic feet. Yet Chesapeake and other drillers have found so much new gas that what used to look like a bonanza has now turned into a glut.

A couple years ago McClendon redirected Chesapeake to focus on oily, liquids-rich plays. First the Eagle Ford shale, then newer areas like the Mississippi Lime and Permian Basin. The idea was that while gas prices were low, the cash flow from the higher-value liquids would be enough to keep Chesapeake solvent.

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Say NO to oil and gas welfare and YES to small business loans.

Wednesday, February 8, 2012

Exclusive: How the Sierra Club Took Millions From the Natural Gas Industry—and Why They Stopped [UPDATE]




Ecocentric
By Bryan Walsh @bryanwalsh
Feb 2, 2012

Mainstream environmental groups have struggled to find the right line on shale natural gas and the hydraulic fracturing or fracking process. Gas has a much smaller carbon footprint than coal—according to most scientists—and produces far fewer air pollutants. That was enough for many major green groups to give support to gas as a “bridge fuel” to a cleaner energy future—the next best domestic alternative to coal as an electricity source while alternatives like wind and solar scaled up. But for grassroots members of those groups—especially in parts of the country where fracking was already underway—the risk of local pollution wasn’t worth the national and global climate benefits of greater gas consumption, especially as media and scientific attention on the potential threats to water supplies grew. It was a major challenge for environmental leaders: how to balance local concerns about traditional pollution with planet-sized worries over climate change, and how to work with corporate America without being seen as selling out.

Now the biggest and oldest environmental group in the U.S. finds itself caught on the horns of that dilemma. TIME has learned that between 2007 and 2010 the Sierra Club accepted over $25 million in donations from the gas industry, mostly from Aubrey McClendon, CEO of Chesapeake Energy—one of the biggest gas drilling companies in the U.S. and a firm heavily involved in fracking—to help fund the Club’s Beyond Coal campaign. Though the group ended its relationship with Chesapeake in 2010—and the Club says it turned its back on an additional $30 million in promised donations—the news raises concerns about influence industry may have had on the Sierra Club’s independence and its support of natural gas in the past. It’s also sure to anger ordinary members who’ve been uneasy about the Club’s relationship with corporations. “The chapter groups and volunteers depend on the Club to have their back as they fight pollution from any industry, and we need to be unrestrained in our advocacy,” Michael Brune, the Sierra Club’s executive director since 2010, told me. “The first rule of advocacy is that you shouldn’t take money from industries and companies you’re trying to change.”



MORE: Could Shale Gas Power the World?


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Monday, February 6, 2012

Gas company, lung association team up

Politico.com
By ANNA PALMER and ROBIN BRAVENDER
12/14/11 7:40 PM EST

Chesapeake Energy is a major donor to the lung-health trade group. | AP Photo
A major natural gas company has found itself an ally in the war over clean air regulations — the American Lung Association.

Oklahoma-based Chesapeake Energy, which bills itself as the No. 2 producer of natural gas in the United States, is a major donor to the lung-health trade group.

Over the years, its contributions have paid for TV ads supporting cleaner air and an environmental education campaign.

The American Lung Association is currently running ads across the country featuring a coughing baby in a carriage next to a dirty power plant and calling for stricter environmental rules for the coal industry.

While nonprofits often take corporate money to help pay the bills, the lung association is catching heat from coal supporters over its cozy relationship with Chesapeake.

“It comes as no surprise that Chesapeake is trying to buy credibility for its lobbying objectives,” said National Mining Association spokesman Luke Popovich. “But that the ALA would sell its credibility to a gas company should disturb those who still view the ALA as an impartial voice.”

The ads come as the coal industry is at war with the Obama administration over new rules to curb pollution from coal-fired power plants. The EPA is expected to issue new rules on Friday to curb air toxics from power plants, which are estimated to cost industry about $10.9 billion each year.
Stricter rules for power plants are expected to offer a competitive advantage to the cleaner-burning natural gas industry.

To be sure, Chesapeake is using other avenues in Washington to make sure its position is known. The company spent $1.4 million on lobbying during the first nine months of 2011. The energy giant also has hired guns like Bracewell & Giuliani, Chad Bradley & Associates, Delta Strategy Group and the Duberstein Group on retainer and is a member of the trade group America's Natural Gas Alliance.

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Gas masks for all residents; not included...

Saturday, February 4, 2012

Sierra Club - Coming clean, returns $26 million to oil and gas

February 2, 2012

The Sierra Club and Natural Gas
Sierra Club Executive Director Michael Brune
Follow me on Twitter andFacebook.
Have you ever had to turn away millions of dollars? It sounds crazy, but here's why the Sierra Club chose to do exactly that.

In 2010, soon after I became the organization's executive director, I learned that beginning in 2007 the Sierra Club had received more than $26 million from individuals or subsidiaries of Chesapeake Energy, one of the country's largest natural gas companies. At the same time I learned about the donation, we at the Club were also hearing from scientists and from local Club chapters about the risks that natural gas drilling posed to our air, water, climate, and people in their communities. We cannot accept money from an industry we need to change. Very quickly, the board of directors, with my strong encouragement, cut off these donations and rewrote our gift acceptance policy. Let me tell you how it came about.

In the fall of 2005, Sierra Club staff and volunteer leaders agreed to make the enormous challenge of climate disruption the Club's highest priority. By that time, we had already begun to have great success with our Beyond Coal campaign, which had started in 2002, and which had already stopped the construction of several dozen new coal-fired power plants.

This Beyond Coal initiative has continued to have unparalleled success working with literally hundreds of other organizations, small and large, and using grassroots power to stop more than 160 new coal plants and prevent 500 million tons of carbon from entering the atmosphere. Sierra Club activists are now fighting Big Coal pollution in all 50 states and on college campuses nationwide. Today, the Sierra Club is not just focusing on stopping new plants from being built but is also accelerating efforts to retire old and dirty coal plants nationwide.

As this campaign was gearing up, the Sierra Club board of directors, working with the best science at the time and with extensive input from staff and volunteers, determined that natural gas, while far from ideal as a fuel source, might play a necessary role in helping us reach the clean energy future our children deserve. It was also during this time, in 2007, that the first contributions to the Sierra Club were made from entities or individuals associated with Chesapeake Energy. The idea was that we shared at least one common purpose -- to move our country away from dirty coal.

The big challenge, however, is what follows coal. How do we keep the lights on as we move quickly to an economy powered by clean, renewable energy? During the period that the Sierra Club first started receiving donations, several of our local chapters were becoming increasingly alarmed by dangerous and disruptive natural gas industry practices in their communities -- particularly horizontal drilling and hydraulic fracturing, or "fracking," a technique where millions of gallons of water, laced with other ingredients (including, often, toxic chemicals) are pumped into rock to release gas deposits. Gradually, more and more legitimate questions were raised about the risks that fracking poses to our air, water, communities, and indeed our climate.

By the time I assumed leadership of the Club in March 2010, our view of natural gas had changed -- so I made sure our policy did, too. We created a strong natural gas campaign comprised of staff and volunteer leaders. Some chapters sought to establish tough safeguards at the state and federal level to protect their air and water; others sought to suspend fracking completely until those standards were in place. By mid-August 2010, with gas industry practices and our policies increasingly in conflict, I recommended to the Board, and it agreed, to end the funding relationship between the Club and the gas industry, and all fossil fuel companies or executives.

Our position today could not be more clear: We still need to move America beyond coal, as quickly as we can while taking care of the workers in the mines and at coal-burning utilities. And as we retire these coal plants, we'll need to replace them with as much clean energy as we possibly can. In the process, we'll use as little gas as possible and work to ensure that the gas that is used is produced as responsibly as possible.

It's time to stop thinking of natural gas as a "kinder, gentler" energy source. What's more, we do not have an effective regulatory system in this country to address the risks that gas drilling poses on our health and communities. The scope of the problems from under-regulated drilling, as well as a clearer understanding of the total carbon pollution that results from both drilling and burning gas, have made it plain that, as we phase out coal, we need to leapfrog over gas whenever possible in favor of truly clean energy. Instead of rushing to see how quickly we can extract natural gas, we should be focusing on how to be sure we are using less -- and safeguarding our health and environment in the meantime.

The Sierra Club opposes any natural gas development that poses unacceptable toxic risks to our land, water, and air. We insist that the volume and content of all fracking fluids and flowback should be disclosed, and that all toxics should be eliminated. There should be proper treatment, management, and disposal of both fracking fluids and toxic flowback. Fracking should not be permitted unless it can be demonstrated that drinking water is protected and that all cumulative impacts can be mitigated. And, of course, many beautiful areas and important watersheds across this country should be off-limits to drilling.

Exempting the natural gas industry from environmental protections was a terrible idea. It looks even dumber today, when the real risks that natural gas drilling poses to water supplies and critical watersheds are that much more apparent.

Ultimately, the only safe, smart, and responsible way to address our nation's energy needs is to look beyond coal, oil, and gas, and focus on clean, efficient energy sources such as wind, solar, and geothermal. It's clear to countries around the world that the most successful 21st-century economies will be based on using energy that is safe, secure, and sustainable. Let's get to work building that economy right here at home.


Michael Brune is the Sierra Club's executive director.
Sierra Club85 2nd St.
San Francisco, CA 94105
michael.brune@sierraclub.org

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It's about time Sierra Club wash their hands from fossil fuels and special interest money.  Grassroots is where it's at, and the people have left Sierra Club membership en masse at times because they felt you left them.  Sierra Club needs to get back to its grassroots efforts and not only look at 'Beyond Coal', but rather 'Beyond Fossil Fules' completely!  We challenge the Sierra Club to get up to speed as this fracking thing has been under your nose and ignored for far too long. If you want the people to believe you, then do something.

Monday, October 24, 2011

Fracking Concerns Worry Residents Targeted By Oil & Gas Production

CBS4
Paul Day
Oct 21 2011
AGATE, Colo. (CBS4) – Rick Blotter harvests late-season corn from his backyard organic garden. Nearby, a couple goats are tended by his wife Bev.

Where the couple lives — in the community of Agate in rural Elbert County — is surrounded by pristine ranchland. The Blotters are desperate to protect their retirement home from oil and gas production. National companies are already negotiating leases in the area.

“We’re just looking for good land that may be productive in the future,” says Kelsey Campbell, a spokeswoman for Chesapeake Energy.

Chesapeake — America’s No. 1 driller of natural gas — already has operations in Weld County. But it is among a growing number of oil and gas producers eyeing areas along the Front Range that have not traditionally been drilled, including Elbert County, Arapahoe County and Douglas County.

“I could imagine them leveling this out and putting a pad here,” he says.

VIDEO SERIES
Watch Environmental Specialist Paul Day’s video reports for this story below:

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    Monday, September 26, 2011

    'Fracking' future - I want my life back!


    (Source: The Columbus Dispatch, Ohio)trackingBy Spencer Hunt, The Columbus Dispatch, Ohio
    Sept. 25--CARROLLTON, Ohio --Natural-gas drilling and coal mining are nothing new in Carroll County


    The eastern Ohio area is dotted with old wells and abandoned mines.

    But the humongous drilling rig in a farm field east of Carrollton represents something new, something that promises to change Ohio forever.

    A crew working for Chesapeake Energy drilled down more than a mile in late May before the drill bit turned 90 degrees. It then chewed a 4,000-foot-long horizontal shaft through a dense layer of flaky black rock that geologists call Utica shale.

    If all goes as planned, a set of high-pressure pumps will replace the rig and eventually shoot millions of gallons of water, sand and chemicals down the well.

    The premise is that the mixture will shatter the shale and send trapped natural gas, oil, propane and butane streaming to the surface.

    This process is called hydraulic fracturing, or "fracking," and that makes this 175-foot-tall rig more than just an expensive drill.

    It's also a lightning rod.

    Supporters of shale drilling, including Gov. John Kasich, see the beginning of an expanding oil-and-gas industry that could create thousands of Ohio jobs, all focused on producing a cheap, " clean" energy supply that could last for generations.

    "If the discovery of Utica shale and this natural gas can lift people and lift families and provide jobs, that in and of itself is worth it," Kasich said. "We have to manage it right. "

    But critics say this type of drilling is an environmental nightmare that can poison the soil, water and air.

    They say the chemicals used in fracturing, and the heavy metals in wastewater, are a threat to groundwater and streams.

    And they point to spills, contaminated drinking-water wells and tales of sickened landowners in Pennsylvania, where shale drilling began in 2005, as evidence of what could happen in Ohio.

    "Time will tell if this will be a boom or a bust, but we need to make sure our air, land and water don't crater out getting there," said Jack Shaner, a lobbyist for the Ohio Environmental Council.


    Trade secrets

    State geologists say that if energy companies can extract just 5 percent of the resources in the Utica shale, they would recover 15.7 trillion cubic feet of natural gas and 5.5 billion barrels of butane, propane and crude oil.

    That's enough natural gas to fuel Ohio's needs for 21 years.

    "It's such a game-changer," said Larry Wickstrom, director of the Ohio Geological Survey.

    Since late 2009, 18 wells have been drilled or are being drilled into the Utica shale in Ohio. Eight wells have been drilled into the Marcellus shale, another gas-bearing rock layer that stretches from Ohio to New York.

    How much gas and oil the wells produce won't be publicly available until March 31, when companies must file reports with the Ohio Department of Natural Resources.

    "We've applied for 10 permits for Utica wells," said Ron Whitmire, spokesman for Houston-based EnerVest. "What happens next will depend on what those 10 wells show."

    The state has issued permits to eight companies for a total of 52 vertical test wells and horizontal wells in the Utica shale that have yet to be drilled.


    Safety questions

    In Pennsylvania, more than 3,800 gas wells have been drilled into the Marcellus shale since 2005. The wells produced 79 billion cubic feet of gas in 2009, enough to supply the state of Montana for a year.

    A July report by economists at Penn State University estimates that shale-gas drilling and production were worth $11.2 billion to the state economy last year.

    The report also says the industry helped support 140,000 jobs, with the biggest effects in construction, mining and retail. Pennsylvania officials say the drilling boom has been great for the economy.

    "There's an awful lot of opportunities for growth that we're seeing and that we're trying to seize upon," said Patrick Henderson, Gov. Tom Corbett's energy adviser.

    An industry report released last week predicted that growth in Ohio's oil and natural-gas production could lead to 200,000 new jobs and $14 billion in investments in the next four years.

    Such estimates have been the subject of intense debate, with critics saying they are grossly exaggerated.

    But drilling in Pennsylvania has produced a number of environmental problems, violations, fines and complaints as well.

    One problem is "brine," the water that comes back up with the natural gas. It is tainted with salt, hazardous metals and chemicals used to fracture the shale.

    Fracking has been used for decades to help crack sandstone and other oil- and gas-bearing rock. But horizontal wells use considerably more fluid. In a week, an energy company injects an average of 5 million gallons of water, sand and chemicals into a single well. About 15 percent of the water initially comes back up, and the wells continue to discharge smaller amounts for years.

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    The family's champion barrel horse and prized boxer both died in 2010. She said the horse died after losing more than 100 pounds, and tests showed that the boxer had been poisoned by ethylene glycol.

    Sunday, September 18, 2011

    DEP inspections show more shale well cement problems



    Published: September 18, 2011


    At the recent Shale Gas Insight conference in Philadelphia, the CEO of one of the largest Marcellus Shale drilling companies in Pennsylvania was unequivocal in his message that methane contamination of drinking water supplies from faulty gas wells is at an end.

    "Problem identified; problem solved," Chesapeake Energy's Chairman Aubrey McClendon declared.

    But violations data released last week by the state Department of Environmental Protection show problems persist with the cemented strings of steel casing meant to protect groundwater from gas and fluids in Marcellus wells.

    In August, DEP inspectors found defective or inadequate casing or cement at eight Marcellus wells, including Hess Corp.'s Davidson well in Scott Twp., Wayne County - the first casing violation found in the county where only a handful of Marcellus wells have been drilled.

    During the first eight months of 2011, 65 Marcellus wells were cited for faulty casing and cementing practices - one more than was recorded in all of 2010.

    Casing and cementing violations do not necessarily indicate that gas has migrated or will migrate into drinking water supplies, and methane is present in many water wells in Pennsylvania from natural pathways unrelated to gas drilling. But in the three dozen instances when methane has migrated into water supplies from gas wells in Northeast Pennsylvania, cement flaws have been identified by state regulators as a primary pathway for the gas.

    In his comments at the conference, Mr. McClendon credited an "updated and customized casing system" included in stronger state oil and gas casing and cementing regulations for "preventing new cases of gas migration."

    The increase in casing and cementing violations reflects the state's increased attention to the issue, especially since the regulations were updated in February. The steady pace of new violations - an average of eight new wells a month have been cited for casing, cement or leaking gas violations this year - also indicates the complexity of the problem in a state where the geology is neither uniform nor predictable.
    DEP Secretary Michael Krancer, who was not present for Mr. McClendon's statement, said he could not respond to it directly when asked about it at the shale conference.

    "One case of methane migration or well contamination is one case too many," he said.

    Click to enlarge image

    
    Most of the casing and cement violations recorded this summer became evident to inspectors when bubbles rose from between the cemented casing strings in water pooled at the well sites or when combustible gas was detected with meters at the surface, according to notes in the violation reports posted by the department online.

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    Monday, September 5, 2011

    Fracking all the way to the Bank

    Chesapeake Energy paid $0 in corporate taxes on its $2.8 billion in profits

    By Hugh MacMillan
    FoodandWaterWatch.org



    In 2010, Chesapeake Energy made a pre-tax profit of $2.8 billion, but it paid $0 in corporate income tax to the U.S. Treasury.

    A recent report from the Institute for Policy Studies makes clear that Chesapeake Energy, which proclaims itself “America’s champion of natural gas,” is likewise one of America’s champions of corporate tax dodging.

    The company made a whopping pre-tax profit of $2.8 billion in 2010, but it paid $0 in corporate income tax to the U.S. Treasury. At the same time, the company’s CEO, Aubrey McClendon, was given $21 million in compensation.

    I emphasize given because how does one actually earn over $57,000 a day?

    Aubrey McClendon has built Chesapeake Energy into the second largest natural gas producer in the United States by betting big on fracking, regardless of the environmental pollution the practice creates.

    To avoid paying any corporate taxes at all, Chesapeake Energy takes advantage of the numerous corporate tax loopholes enjoyed by the oil and gas industry. In particular, Chesapeake is able to deduct “intangible” fracking expenses from its tax obligations!


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