January 13 Colorado Energy Cheat Sheet: Oil and gas drive Colorado’s economy, but outlook uncertain; Western Slope feels effects of regulation; WOTUS repeal?
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, preferred energy, renewable energy, solar energy
Oil and gas development contributes a rather large percentage to Colorado’s economic condition, and new numbers confirm its continued importance to the state:
A new economic report shows that oil and gas development contributed billions to Colorado’s economy in 2014 generating benefits that researchers conclude “impact every citizen in the state.”
Prepared by the Business Research Division of the Leeds School of Business, University of Colorado Boulder, for the Colorado Oil and Gas Association (COGA), the report details how oil and gas development contributed $31.7 billion in total economic impact to Colorado’s economy in 2014, along with “supporting 102,700 jobs and $7.6 billion in compensation.” From the report:
“The oil and gas industry, along with nearly all extraction industries, inherently provides substantial economic benefits due to its integrated supply chain, high wage jobs, and propensity to sell nationally and globally. Much of Colorado’s oil and gas is sold outside of the state, contributing wealth to owners, employees, governments, and schools, all of which are beneficiaries of oil and gas revenues.” emphasis added
The state’s oil and gas development would be crippled if newly proposed ballot measures calling for a ban on hydraulic fracturing and other regulatory limits are passed in 2016.
Lower oil commodity prices–a drop from $90 per barrel in 2014 to roughly $30 per barrel in January 2016 means great prices at the pump, but not good news for Colorado’s oil and gas workers:
KUSA – Oil is in an all-out freefall, dropping from roughly $90 dollars a barrel at the end of 2014 to just more than $30 per barrel Tuesday.
It’s enough to make you wonder if the industry is starting to panic.
Colorado Oil and Gas Association president and CEO Dan Haley said when commodities drop, challenges emerge.
“You’ll see some restructuring, you’ll see some tightening of jobs,” Haley said, adding that in 2015, about 2,000 people lost their jobs due to falling oil prices.
The full fallout is not likely to be known when or if the price has hit bottom, or begins to rebound, in the short or long term. Rig numbers are down and students at Colorado School of Mines are worried about the future of the industry, according to the article.
A report on job creation tied to a “100% renewables” future is looking a little damaged, according to the folks at Energy in Depth:
A Stanford professor who claims a transition to 100 percent renewables would be a major job creator has scrubbed his website of data showing significant long-term job losses from such a plan, according to a new review by Energy In Depth. Online records show that the professor, Dr. Mark Jacobson, edited his documents just hours after an Energy In Depth report revealed how the transition to 100 percent renewables would cause a net loss of more than 1.2 million long-term jobs, based on data pulled directly from Dr. Jacobson’s website.
The decision to alter his own data could raise additional questions about Dr. Jacobson’s plan for a 100 percent renewables energy system, a plan that has already faced significant criticism from the scientific and environmental communities.
Even if the jobs were there, as Dr. Jacobson contended, not everyone on the left is on board the “100% renewables” bandwagon:
Earlier this week, Dr. Jacobson granted a separate interview to the left-wing blog Daily Kos, which gave him a forum to respond to Energy In Depth’s report. But Dr. Jacobson likely did not anticipate another Daily Kos blogger criticizing his 100 percent renewables plan as impractical. In a comment posted to the article including Dr. Jacobson’s interview, an environmental blogger said that “no electric utility is ever going to adopt Jacobson’s plan” because, among other things, the “wind power component of Jacobson’s plan cannot be relied upon for reliable electric power generation and supply.”
Two Colorado Republicans reacted to President Barack Obama’s final State of the Union address and in particular the plight of Colorado’s Western Slope communities hit hard by the administration’s regulations:
U.S. Rep. Scott Tipton, R-Colo., whose 3rd Congressional District trails the rest of the state in the economic recovery, said the president would do well to visit his district.
“I would invite him to visit Craig or Delta,” Tipton said in an interview. “They have lost good-paying jobs and are struggling right now.”
Both communities in Colorado’s 3rd Congressional District have been hard-hit by coal-mine closures. Arch Coal, a major coal supplier and employer on the Western Slope, declared bankruptcy on Tuesday, before the speech.
“The president talked about significant government interference in the marketplace that will most likely imperil jobs on the West Slope of Colorado,” said U.S. Sen. Cory Gardner, R-Colo.
Speaking of Arch Coal’s bankruptcy:
Arch Coal Inc.’s bankruptcy filing Monday signals that the coal industry’s shakeout is entering a crucial phase, which will result in more small, unlisted mining companies, record numbers of mines for sale and lower wages for workers.
Over a quarter of U.S. coal production is now in bankruptcy, trying to reorganize to cope with prices that have fallen 50% since 2011, battered by competition from natural gas and new environmental rules. Arch, the biggest domino to fall so far, is trying to trim $4.5 billion in debt from its balance sheet.
Competitors Walter Energy Inc., Alpha Natural Resources Inc., and Patriot Coal Corp. all filed for court protection last year.
But bankruptcies only spell death for current corporate structures, not necessarily the mines they operate. And the U.S. still gets 34% of its electricity from coal, according to the Energy Information Administration, and that number is still expected to be around 30% by 2030. “The question is, what is that 30% going to look like?” says Steve Nelson, chief operating officer at Longview Power LLC, a 700-megawatt coal-fired plant in northern West Virginia.
Market-driven changes are good–the transition from coal-heavy electricity to natural gas is not a problem, and beneficial to the environment–when done without government mandates. Onerous regulations designed to put coal out of commission, from fuel switching initiatives in Colorado to the Environmental Protection Agency’s Clean Power Plan, are not beneficial to the country’s economy and to the individuals and communities impacted by layoffs and dislocation, as well as skyrocketing residential electricity rates.
Should be an interesting event and will definitely address some of the impact to Colorado of recent commodity downturns in oil:
By: Vital for Colorado
Join us in discussing lifting the U.S. Oil Export Ban and what it means to Colorado. Our esteemed panel includes U.S. Representative Ed Perlmutter (D) CO and U.S. Representative Ken Buck (R) CO, Christopher Guith, U.S. Chamber of Commerce’s Institute for 21st Century Energy, Geoff Houlton, Dir. of Commodity Fundamentals Anadarko Petroleum Corp., John R. Grizz Deal, CEO IX Power Clean Water, and Craig W. Van Kirk, Professor Emeritus Petroleum Engineering Colorado School of Mines. This is a free event but registration is encouraged.
Thursday, January 21, 2016 from 5:30 PM to 7:30 PM (MST) – Add to Calendar
Colorado School of Mines Green Center – Bunker Auditorium – 924 16th Street Golden, CO 80401 – View Map
The Independence Institute is not affiliated with the event.
The EPA’s Waters of the United States rule is facing legislative repeal, subject to President Obama’s veto:
House lawmakers are poised to pass legislation repealing what is probably the Environmental Protection Agency’s (EPA) most hotly contested regulation: an attempt to expand its authority over bodies of water across the country.
The House will vote Wednesday on a bill that would repeal the EPA’s so-called Clean Water Rule under the Congressional Review Act — a law that allows Congress to vote down executive branch regulations. EPA’s water rule has been heavily criticized by lawmakers who see it as a huge expansion of government power and could mean more regulations for private landowners.
“We want them to go back and do a new rule,” Ohio Republican Rep. Bob Gibbs told The Daily Caller New Foundation in an interview. Gibbs sent a letter to House leadership last year asking them to defund EPA’s water rule in the 2016 budget bill.
The Senate passed a bill repealing EPA’s water rule in November, sparking huge outcry from environmentalists who support more federal control over bodies of water. The House is likely to pass the repeal with bipartisan support, sending it to President Barack Obama.
October 29 Colorado Energy Cheat Sheet: Hickenlooper vs. Coffman over EPA lawsuit; EPA spill report short on info says New Mexico; Frack or Treat
Filed under: CDPHE, Environmental Protection Agency, Legal, Legislation, PUC, regulations, solar energy, wind energy
Attorney General Cynthia Coffman’s decision to challenge the Environmental Protection Agency’s authority to implement the Clean Power Plan has initiated a constitutional battle in the eyes of Governor John Hickenlooper:
Gov. John Hickenlooper said Monday he will seek the state Supreme Court’s opinion on the legality of Attorney General Cynthia Coffman’s lawsuit to stop implementation of the Clean Power Plan.
“This notion of everyone suing all the time every time you disagree with a specific remedy, a specific statute, is part of what makes people so frustrated with government,” Hickenlooper, who supports the plan, said in a meeting with The Denver Post’s editorial board.
“Except in very rare circumstances, generally the governor is supposed to make that decision in concert with the attorney general,” Hickenlooper said of the lawsuit. “But the governor should have that final say.”
Hickenlooper’s office pushed the issue further, saying the AG’s actions “just gets in the way” of state plans to cooperate with the CPP:
“The statute that we’re looking at speaks of prosecuting and defending on the request of the governor,” said Jacki Cooper Melmed, Hickenlooper’s chief legal counsel, citing Colorado’s revised statutes, title 24, article 31, part 1.
Cooper Melmed said she is worried about conflicts as some Coffman deputies work with Hickenlooper’s administration to implement the plan while others in the attorney general’s office try to quash it.
“This just gets in the way,” Cooper Melmed said of the lawsuit. “There’s no wall really high enough to allow these two things to happen out of the same office.”
Coffman, for her part, said she was “disappointed” in the Governor’s decision.
Former Colorado Attorney General Gale Norton called Hickenlooper’s stance “unusual” when it comes to the relationship between AG and Governor, even when representing opposing parties:
“For the governor to try to challenge in this way is unusual,” Norton said.
In almost all cases where a governor challenges an attorney general, Norton said, rulings are in the attorney general’s favor.
“The attorney general represents the state and not the governor,” Norton said. “The attorney general is elected to provide independent representation of the state’s interest.”
Steamboat Today has a great roundup of other reactions for and against the lawsuit.
It’s not just states suing the EPA over the Clean Power Plan–at least 26 states filed almost immediately after the ruling was published last Friday–but other lawsuits are on their way from the U.S. Chamber of Commerce, National Rural Electric Cooperative Association and National Association of Manufacturers.
The EPA, meanwhile, is touting its flexibility–a “wide range of choices”–in allowing states to file extensions:
Taking another crack at busting the CPP progress, this time using pre-existing Congressional review legislation:
Lawmakers opposed to the Obama administration’s climate rule for power plants are moving to block the regulations from taking effect.
Several senators will offer Congressional Review Act (CRA) resolutions Monday that seek to stop the Clean Power Plan. Senate Majority Leader Mitch McConnell (R-Ky.), a longtime opponent of carbon regulations for the power sector, will schedule a vote on the resolutions soon after they come out.
“I have vowed to do all I can to fight back against this administration on behalf of the thousands of Kentucky coal miners and their families, and this CRA is another tool in that battle,” McConnell said in a statement.
The Congressional Review Act gives lawmakers the ability to end an executive branch regulation through an act of Congress.
Communities around Colorado continue to struggle with mine runoff, the August EPA spill in southwest Colorado not withstanding:
Toxic mines hang over this haven for wildflowers, contaminating water and driving residents — like counterparts statewide — to press for better protection.
A local group went to federal court this month seeking long-term assurances that a water-treatment plant will always remain open as the collapsed tunnels and heaps of tailings leak an acid mix of heavy metals: arsenic, cadmium, zinc and others.
State data show these contaminants reaching Coal Creek — the primary water source for Crested Butte and the Gunnison Valley’s green pastures — at levels exceeding health standards.
“A lot of people are nervous,” said Alli Melton of High Country Conservation Advocates. “We’d like to get it as clean as possible.”
But the EPA isn’t being all the helpful, as the Interior Department inspector general report on the Gold King Mine/Animas River spill concluded, as the U.S. Chamber points out:
These two quotes from the report illustrate just how careless EPA was:
EPA has “little appreciation for the engineering complexity.”
“[T]here appears to be a general absence of knowledge of the risks associated with these [abandoned mining] facilities.”
Even EPA’s internal investigators didn’t hold back on the agencies irresponsibility. Its initial review concluded the spill was “likely inevitable,” but the agency wasn’t prepared to contain a spill before digging into the mine.
That isn’t much consolation for the folks in Colorado, New Mexico, Utah, and the Navajo Nation affected by the spill, as New Mexico’s top environmental watchdog Ryan Flynn said, quoted again by the Chamber:
While the report reveals that an EPA decision was made to refrain from validating the flawed water level estimates with a previously used successful procedure (using a drill rig to bore into the mine from above to directly determine the water level of the mine pool prior to excavating the backfill at the portal); the report says absolutely nothing about who made the decision to fly by the seat of their pants, by digging out the closed Gold King Mine tunnel based on un-validated estimates of what volume and pressure of contaminated water would be violently released.
Here in New Mexico, we are already quite clear on the fact that EPA made a mistake, as the DOI’s report underwhelmingly reveals. What we were wondering, and hoped the report could tell us, is why EPA made the mistake, and who at EPA made the decisions that authorized dangerous work to proceed based on un-validated estimates. It is shocking to read the DOI’s “independent investigation” only to find that it overlooks the who, the how, and the why. [emphasis added]
How big are subsidies for electric cars? Without the $5,000 tax credit in Georgia, the state saw sales of electric vehicles plummet nearly 90% in just two months:
According to Georgia car registrations, sales shot up as electric car buyers rushed to take advantage of the tax credit before it expired. But the numbers declined sharply in July and took a swan dive in August — the most recent month tabulated:
The decline from 1,338 in June to 148 in August represents a drop of 88.9 percent.
Read the rest of this excellent Watchdog article here.
It’s almost Halloween, so we’ll end on a spooky anti-energy note from Energy in Depth:
The Community Environmental Legal Defense Fund (CELDF) has been waging an extreme campaign to ban fracking through so called “Community Bill of Rights” ballot initiatives, especially targeting communities in Colorado, Ohio, and Pennsylvania. The group has already forced taxpayers to pay tens of thousands of dollars to defend their illegal ordinances and it is now planning to hit communities in California, Oregon, New Hampshire and Washington State. In fact, as Energy In Depth’s new video shows, this Halloween, CELDF’s extreme (and expensive) campaign could be coming to a ballot box near you.
By Simon Lomax
Be afraid. Be very afraid…
That was the Denver Post’s front page article on March 16, which profiled a couple – Mieko and Charles Crumbley – who claim seismic surveying near Brighton, Colo. damaged a groundwater well on their property and put cracks in some of the walls in their home. But the oil and gas company that commissioned the survey says its contractors did not cause the damage, according to the story by the Post’s environmental writer Bruce Finley. Sounds like one of those classic “he said, she said” situations, right?
Well, no, actually. In reality, the claims by the Crumbleys are very unlikely, based on readily available facts on the way seismic surveying works. But the reporter failed to include those facts, and painted a misleading and frightening picture for his readers.
The type of seismic surveying in question is carried out by vibroseis trucks, which are informally known as “thumper trucks.” The use of these trucks has greatly reduced the use of small dynamite charges in seismic surveying. Here’s how the reporter describes the way these vehicles work:
“[T]he trucks, weighing up to 30 tons, drop heavy, metal vibrator plates from their undercarriages to thump and shake the ground. Analysis of pressure waves, similar to ultrasound, generates data that companies use to determine where to drill for oil and gas.”
Sounds pretty ominous. But take a look at this video of some vibroseis trucks in action:
In fact, while these vehicles are unquestionably big, the vibrations they create are very small. For that reason, scientists with state and federal agencies, experts in academia, the geologists and engineers of the oil and gas industry, and even other media outlets have reaffirmed the safety of vibroseis trucks many times. Here are a few examples:
In an urban environment, vibroseis-generated waves are less than background noise generated by buses, trucks, and trains … At its source you can feel a vibroseis shake the ground but as you move away your ears will hear the airborne sound waves much longer than your feet can feel those in the ground.
Residents standing near a vibroseis truck … may be able to detect it, but this process will not cause any interruptions of daily life or damage to structures.
Despite their relatively benign operations, these big machines sometimes appear more daunting to the populace than the commonplace dynamite. To assuage any concerns in that regard, companies sometimes resort to public demonstrations prior to operations. … Two light bulbs and two raw eggs were buried eight inches under the vibrating pads. Following the demo, the eggs were retrieved unbroken and the light bulbs still worked – to the amazement of the crowd of onlookers…
“If you stand near the truck you’ll be able to feel slight shaking in the bottom of your feet, but the level of shaking is far below the levels required to cause damage to pavement or structures” said [USGS scientist Rob] Williams.
The seismic imaging process does not damage the street or negatively impact the earth below ground.
[T]here is no reliable evidence of these trucks causing well problems or damage to buildings.
Unfortunately, the Post story didn’t just leave out these expert opinions. The article went a step further and suggested the Crumbley claim was one of several structural damage complaints. From the news story:
“State records show that since 2000, residents have filed 16 formal complaints about seismic surveys.”
Given the statements by the USGS, NETL and others about the very low risk of structural damage from vibroseis truck, we asked the Colorado Oil and Gas Conservation Commission to identify those 16 complaints, which include the Crumbley case. Then we reviewed the case files on the COGCC’s online database.
It turns out just three of the complaints allege any structural damage from vibroseis truck operations. The rest of the complaints mostly deal with disputes over property access, noise and the potential impact of these heavy vehicles on soil and crops. Besides the Crumbley case, there are no other complaints of damage to a house, and only two allegations of damage to water wells.
In the first water well complaint, from 2000, the COGCC concluded there was “no indication that oil and gas activities in this area impacted the well.” It turned out the well was located next to the burned-out shell of an old house, hadn’t been used in two years, and there was trash both around and floating inside the well. In the second water well complaint, from 2002, the COGCC found“no direct evidence of impact due to oil and gas operation” and concluded “[t]he most probable cause is corrosion in the casing from a shallow aquifer.”
So, instead of state records showing 15 other cases that support the Crumbley complaint, there appear to be none. Which makes sense, of course, because state and federal officials, industry experts and academics have repeatedly said that vibroseis trucks are very unlikely to cause structural damage.
However, let’s play the reporter’s game for a moment and assume the worst possible interpretation of those state records. Even when you group together all the 16 complaints to the COGCC that mention seismic surveying over the last 13 years – and include some more from residents in Aurora, Colo., as the Post’s story did – it’s hardly evidence of a commercial activity run amok. In fact, the Post’s own reporting suggests an average of between one and two complaints a year. That’s not bad when you consider Colorado’s oil and gas production has more than doubled since 2000. And it’s not scary either.
Of course, only time and further investigation will tell whether the Crumbley’s claims – however unlikely – are correct or mistaken. We’ll also have to wait and see if the alarmist tone of this particular news report scares some other residents into blaming seismic surveying for cracks in their drywall. But we can say two things now without equivocation: The oil and gas industry will cooperate fully with the state regulators investigating this matter, and the business of seismic surveying is nowhere near as scary as reporter Bruce Finley would have you believe.
This column appeared originally on Energy In Depth, a project of the Independent Petroleum Association of America as a research, education and public outreach program “focused on getting the facts out about the promise and potential of responsibly developing America’s onshore energy resource base.”
For a well-researched, easy-to-read, factual primer on hydraulic fracturing, check out our paper Frack Attack: Cracking the Case Against Hydraulic Fracturing.
While the Denver Post played the role of Rocky Mountain eco-Chicken Little of record, another news outlet — the Casper Star-Tribune — reported former Colorado Senator and current Interior Secretary Ken Salazar’s opinion of the EPA’s premature press release about a “draft finding” regarding a link that may or may not exist between hydraulic fracturing and groundwater pollution in Pavillion, Wyoming.
- The EPA drilled two deep monitoring wells (depth range: 783 – 981 feet) into a natural gas reservoir and found components of natural gas, which is an entirely expected result. The results in the EPA deep wells are radically different than those in the domestic water wells (typically less than 300 feet deep), thereby showing no connection. Natural gas developers didn’t put the natural gas at the bottom of the EPA’s deep monitoring wells, nature did.
- Several of the man-made chemicals detected in the EPA deep wells have never been detected in any of the other wells sampled. They were, however, detected in many of the quality control (blank) samples – which are ultra purified water samples commonly used in testing to ensure no contamination from field sampling procedures. These two observations suggest a more likely connection to what it found is due to the problems associated with EPA methodology in the drilling and sampling of these two wells.
- The EPA’s reported results of all four phases of its domestic water well tests do not exceed federal or state drinking water quality standards for any constituent related to oil and gas development.
- The EPA report ignores well-known historical realities with respect to the Pavillion field’s unique geology and hydrology.
Let’s get this straight, the EPA drills monitoring wells up to three times deeper than normal drinking water wells in a geologically complex area, finds different components in the water, and then claims pollution from fracking. The man-made chemicals found in monitoring wells were also found in the “ultra-purified” control samples. Encana is being kind to call the EPA’s conclusions “irresponsible.”
The Denver Post did report on Encana’s response but didn’t provide much in the way of details. Instead the headline reads “Encana disputes fracking finding.” Of course Encana “disputes” the “draft finding.” The news story is in the details, such as those listed above.
Finally, the EPA announced a public comment period from December 14, 2011 to January 27, 2012. (The document says January 27, 2011, but we’re pretty sure the EPA means 2012):
EPA is announcing a 45-day public comment period for the external review of the draft research report titled, “Investigation of Ground Water Contamination near Pavillion, Wyoming.” The draft research report was prepared by the National Risk Management Research Laboratory (NRMRL), within the EPA Office of Research and Development (ORD), and EPA Region 8. EPA is releasing this draft research report solely for the purpose of pre-dissemination peer review. This draft research report has not been formally disseminated by EPA. It does not represent and should not be construed to represent any Agency policy or determination. Eastern Research Group, Inc. (ERG), an EPA contractor for external peer review, will convene an independent panel of experts for peer review of this draft research report. Public comments submitted during the public comment period will be made available to the peer review panel for consideration in their review. In preparing a final report, EPA will consider the recommendations of the peer review panel.
Maybe the EPA should have announced the public comment period before it issued a press release and “disseminated” information to news outlets.
Secretary Salazar is smart to wait for the “real facts” swirling around the groundwater in Pavillion, Wyoming. We’ll wait for them too, even if anti-fossil fuel zealots and their accomplices in the media won’t.
Thank you to Energy In Depth for its coverage of the EPA’s Frack-gate, and to Chris Tucker of EID for appearing on the Amy Oliver Show and sharing this information with listeners. All of this information can be found on the EID Web site.