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Myth vs. Fact on the BLM Methane Venting and Flaring Rule



Started March 9, 2017 at 08:53 pm by @Barry D in GoMarcellusShale

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Barry D
03/09/17 08:53:54PM
@barry-d

This may not seem important to you here in OH, WV, PA. But it's important to understand all of the tactics used by the mentally deranged fractivist to interfere with shale development.

Last week, the House of Representatives passed a resolution to overturn the Bureau of Land Management’s (BLM) duplicative and burdensome methane and flaring rule by a vote of 221-191. With the Senate set to take up the measure in the coming weeks, opposition groups have been on a mission to perpetrate a number of myths about what would happen if the rule were to be repealed.

As usual, the facts paint a very different picture. Let’s take a closer look:

https://energyindepth.org/mtn-states/myth-vs-fact-on-the-blm-methane-venting-and-flaring-rule/

Joseph-Ohio
03/10/17 10:37:18AM @joseph-ohio:

Not being obstructionist about 'flaring' but - still - would very much like the industry to figure out a way to capture the gas being flared and develop a market for it instead.


Nancy Mosley
03/10/17 10:48:15AM @nancy-mosley:

Agree with Joseph-Ohio.


Joseph-Ohio
03/10/17 04:23:55PM @joseph-ohio:

To: @nancy-mosley,

Nice to know; and thank you Ms. Nancy !


Nancy Mosley
03/10/17 08:40:40PM @nancy-mosley:

 You're very welcome Joseph-Ohio. I enjoy reading your comments


Dan Warner2
03/10/17 11:55:38PM @dan-warner2:

"Energy in Depth (EID) is a pro-oil-and-gas drilling industry front group formed by the American Petroleum Institute, the Independent Petroleum Association of America (IPAA) and dozens of additional industry organizations for the purpose of criticizing the documentary "Gasland", their latest attempt being a documentary produced by a political attack ad agency for EID, the ironically titled "Truthland" which was exposed as a gas industry infomercial as soon as it was released. The domain for the website promoting the film —Truthlandmovie.com — is owned by gas driller Chesapeake Energy."

The article cited was authored by Courtney Loper.  Courtney works for FTI Consulting and Strategic Communications.  She has a Bachelor's degree in Political Science and Government.

Her Linked In profile lists her featured skills as Public Affairs, Public Relation, and Strategic Communications.  Some other skills listed are media relations and pitching, message development, you get the picture.  She also is skilled in government; specifically political campaigns, having been deputy press secretary to, among others, former Speaker-of-the House, John Boehner.

Missing are any mention of KSA's relating to the energy industry:  "Courtney Loper admits that it wasn’t until she moved to Colorado from Washington, D.C., that she gained a more personal respect for the energy industry."

FTI is a consulting agency, credited with, among other things, the comeback of the Twinkie.

https://m.youtube.com/watch?feature=youtu.be&v=sBhC_PVd2Lc

 

http://www.huffingtonpost.com/steve-horn/southwestern-energy-execu_b_5358381  


Joseph-Ohio
03/11/17 03:36:38AM @joseph-ohio:

To : @dan-warner2,

So.......what's YOUR point / position on all of that Mr. Dan ?

I'm curious enough to ask.


Skip Peel - Independent Landman
03/11/17 09:06:54AM @skip-peel-independent-landman:

Flaring is a problem whether on BLM or USFS lands in addition to private lands everywhere.  The energy industry has been allowed to waste natural gas on far too large a scale.  Some mineral owners would accept flaring if the gas was metered and the companies paid royalty on it.  The industry is slowly coming around to the fact that the costs to capture instead of vent natural gas is a net profit.  Pipelines are the answer and facilitating them should be a priority at all levels of government.  Companies that develop unconventional basins with 30 to 40 years of productive life should be required to build out gathering systems and adhere to industry best practices regarding the venting of methane.  You don't have to be focused on the environment to be against methane releases, you can be a stock holder or a royalty owner.


Dan Warner2
03/11/17 09:43:26AM @dan-warner2:

My position is that the O&G industry, overall, does not want any sort of stewardship getting in the way of profits.

My purpose is to balance the rhetoric and bluster of the drill-baby-drill crowd with truth.  

If not for the activists, none of the checks and balances that the industry and it's cheerleaders claim to be voluntary and sufficient would be in place now.  

As with most things, there is a need for moderation in the dialogue here.  There are people reading this that are looking for fact, not looking to be bullied by insults and misled by corporate sponsored misinformation.  Barry is not the first, and I don't expect or care to change his mind.  My focus is on pointing the audience toward thoughtful, intelligent dialogue.  Not everyone has the time to debunk every claim..

I am here, primarily, to maximize my knowledge on the subject, in order to protect myself and family members from an inherently evil structure. This includes not being cheated on leases/payments, but also to defend my quality of life, which has declined in many ways with the advent of horizontal drilling.  All one needs to do is read some of the other threads regarding lying landmen/women andtheir cheating companies to understand that these folks look on us outsiders as a lower life form.  It is naive to believe that they view their responsibilities to our environment any differently.

So, my question to you is, did you follow my links?  


Skip Peel - Independent Landman
03/11/17 10:07:57AM @skip-peel-independent-landman:

Nope.  And I don't plan to.  Before you go too far down the road to demonizing the industry, let me provide a little background.  I am an independent landman whose clients are mineral owners.  I don't work for the industry, I work for individuals, families and trusts that own mineral interests.  My focus is the Haynesville Shale and other unconventional plays in that same general area.  I can assure you that none of my clients would put up with any pollution of their lands and air.  Receiving royalty income does not incentivize them to overlook problems.  Most of those clients are not adverse to litigation and some have sued their operators.  I do not hesitate to criticize the industry when I think such is warranted but I don't hold any misconceptions about the responsible manner in which most of them operate.  I have a job and my clients have income because companies drill wells.

The Haynesville Play is about 8 years into development with over 2500 horizontal wells drilled in Louisiana.  I follow the play daily and have a knowledge of the development that is rare.  To date there have been three incidences regarding environmental issues.  One was a blow out when a rig drilled into an unknown shallow gas pocket while drilling under balanced.  Although rare they do still occur however in NW LA blow outs have occurred periodically for 100 years with no lasting effect.  Aside from venting methane there was no lasting damage.  A family discovered methane in the drinking water from their well.  Since there was active drilling nearby the first thought was contamination from a gas well.  Many people do not realize that natural gas contains many components and impurities besides the methane.  A test of the gas in the water revealed that it came from a shallow gas layer, not from the natural gas being produced from the well(s).  The chemical finger print was different. 

The industry is not perfect and makes mistakes.  A completion crew allowed frack water to run off a surface location and drain into a pasture.  Some cattle drank it and died.  Spills happen but run off protection on properly built pads are of little concern.  That's it, 8 plus years and those three incidents that could be classified as environmental.  I generally don't agree with those that think the industry is over-regulated.  All the regulations with which I am familiar make perfect sense.


Dan Warner2
03/11/17 10:53:20AM @dan-warner2:

Not for nothing, but my post was in reply to Joseph, as was yours.  The unconventional format of this forum makes it difficult to follow threads and post accordingly.

Still, I must insert that we can't see or smell (except at very high concentrations) environmental methane.  In the video that you won't watch, there was no mention of the air in your area having been tested by the researchers.  Therefore, your lessees have no indicator for methane loss through leakage and venting.

It is widely understood that methane is present in water tables.  A county adjacent to me here in WV has a big problem with it.  Methane in the air, and it's causes, are the topic, and we seem to be in agreement.

My point is that the industry's position is one of full speed ahead.  The cheerleaders yell to build the pipelines with no obstacles, and vent the gas until they do.  My position is, drill at a pace that the pipelines can be safely built and operated.

Nothing is black and white.  You maybe as honest as the day is long.  If so, you are the exception that proves the rule.  The deception and 'handling' that I have personally witnessed  is all the proof that I need.  

I would like to point out a small attempt to mislead:  As an independent, you do NOT work for the mineral owners.  You work for yourself.  Your efforts to maximize your profit does not lend itself to maximizing the owner's compensation.  Surely you aren't asking us to believe that it does?  

The land and title industry's existence is predicated on the difference between the lease price and the value of the mineral rights.  There is no value added; you are just brokers.  Mineral owners are your raw material; O&G is your customer.


Skip Peel - Independent Landman
03/11/17 11:07:46AM @skip-peel-independent-landman:

Yes, the format is not perfect.  Methane is odorless, you can't smell it in any concentration.  The odor is an added chemical. Many energy companies have instituted programs to find and stop methane leaks.  The industry is generally on board with lowering methane emissions.

I perform the work that my clients require and along with their O&G lawyers we maximize the benefits and attempt to mitigate the risks of developing their minerals.  In my part of the world generations of families have lived in close proximity to oil and gas wells.  We have 100+ years experience with which to judge the current development and there are few substantive complaints from an environmental prospective.  We do have problems with non-traditional deductions to royalty income which we regularly litigate. 

As to the concept of dishonest landman, I know a few however the majority of complaints regarding interactions with landmen come from land owners unfamiliar with the process of leasing who don't see the need to get help from professionals. Caveat emptor.


Dan Warner2
03/11/17 12:59:53PM @dan-warner2:

For the last five years of her life, my mother, now deceased, coped with landmen showing up at her door, notary in tow, phone calls, and mailings from landmen.  She was often 'handled' by two landmen from the same company.  A company first leased, then told her it was a mistake.  A company had one landman calling with offers to lease, while another, a real jerk, called to say that they were not interested in leasing, only buying.  She was stressed to the point where she referred them to me, which they often ignored.  We were presented lease offers with four day windows.

I don't think it is fair to ask an 80 year old widow to sort something this complex out, at her own peril.


Skip Peel - Independent Landman
03/11/17 01:09:29PM @skip-peel-independent-landman:

Landmen make offers to lease.  Landmen make offers to purchase mineral rights or royalty.  It is their job.  The vast majority conduct themselves professionally but as you witnessed there are some less than professional actors.  I'm sorry that your mother and you had to deal with some of the latter type.  For those who find themselves in a similar situation with an elderly family member one way to address the issue is for the mineral owner to grant a limited Power of Attorney for the purpose of negotiating and executing a lease.  Then when landmen contact them they can offer a copy of the POA and say, if you want a lease don't contact me, contact my agent.


Joseph-Ohio
03/12/17 08:08:04AM @joseph-ohio:

Interpreting that both Mr. Skip & Mr. Dan agree that Flaring is a process that needs attention.

I've said earlier and still say the same.

Regarding Landmen and Leasing : I'll say again as I've said many times before - Landowner / Lessor Be Aware.


Skip Peel - Independent Landman
03/12/17 09:13:48AM @skip-peel-independent-landman:

I wouldn't say, beware.  I would say be informed.  And get help.  Land companies have schedules and landmen are pushed to meet those schedules.  If they seem in a hurry it's because that is their job.  They don't determine the lease terms, their client does. 

I suggest that anyone approached with a lease offer totally ignore any attempt to rush them into a decision to sign a lease.  For those who like the idea of monetizing their mineral interest, I further suggest telling a landman that they are interested in leasing but will not be rushed.  Get their card or contact information.  Tell them you will get with them in some reasonable amount of time, say two weeks.  That way the landman is likely to go on to the next mineral owner on their list and the mineral owner has time to perform some due diligence. 

Talk with an attorney that practices energy law in your state.  Chances are you are not the first mineral owner they've spoken with and if they have negotiated other leases with the same company they should know what others are getting in the way of lease terms.  If the attorney is an experienced O&G attorney then chances are the company offering the leases knows them and will often put their best offer on the table just so they can acquire the lease and move on.  Experienced, ethical energy attorneys charge by the hour.  They don't ask for a share in the bonus or the royalty.  In my part of the world a very good O&G attorney, and we have many, may charge $300 to $400 per hour.  If a mineral owner is looking for an acceptable lease agreement and not trying to push the envelop on the going rate, a couple of hours will often suffice.  For most folks a $600 or $800 investment is more than covered by the lease bonus paid and it's worth the peace of mine to know that they didn't blindly entered into an agreement that could last for decades.


Dan Warner2
03/12/17 09:32:17AM @dan-warner2:

Too late; you said it first.


Joseph-Ohio
03/12/17 09:27:30AM @joseph-ohio:
Mr. Skip, I wrote '....Be Aware' (did not use the word 'beware' myself as I thought that word might imply a more harsher / threatening meaning (not sure that it technically does however) - lol !
Skip Peel - Independent Landman
03/12/17 09:30:48AM @skip-peel-independent-landman:

Yes, be aware is better than beware.  I offer my apology for misrepresenting your reply.


M.A.B.
03/12/17 09:38:18AM @mab:

Hey skip, why don't you talk your company into negotiating some leases in NW PA. A lot are being let go. I think you would be someone land owners could deal with. Just saying 😉


Skip Peel - Independent Landman
03/12/17 10:07:10AM @skip-peel-independent-landman:

I stick to my backyard which is keeping me pretty busy with the recent uptick in drilling activity.  Although I read some of the discussion threads in GMS I generally stay away from answering questions that require a knowledge of state mineral law.  I know Louisiana quite well and a fair amount of Texas regulatory statutes.  A little of Arkansas.  NW LA has been producing oil and natural gas for 100 years so a lot of land owners had generations of experience dealing with O&G companies and having surface locations on their land. 

The Haynesville Shale land rush however caught a lot of land owners by surprise who had never had a producing well.  The shale was productive in areas where no conventional reservoirs had proved so in the past.  Those land owners were similar in many ways to land owners in the Marcellus/Utica region. 

In 2008 Keith started GHS, I was an early sponsor, and we went through a period of conflict with inexperienced land/mineral owners and over zealous landmen.  The experienced landmen had to live with the fall out from the negative consequences caused by the inexperienced people brought in to fill the ranks required to lease 2.5 million acres.  Energy company policies exacerbated the problem by creating a land rush where much of what was considered required due diligence was abandoned.  Some of the short cuts taken continue to pose problems today.

Since I represent land owners I have some insight into what folks on GMS are experiencing.  I hope that the majority of lessors will have a net positive experience but realize many may not.  I appreciate the invitation, mab and joseph, but I would have to take on a long learning curve to be competent to advise mineral owners in PA.  As a young man I worked for a time as a materials inspector for Texas Eastern Company and built a pipeline in PA.  I lived in Washington and for a time in Harrisburg.


M.A.B.
03/12/17 11:30:26AM @mab:

As a landman, if I may ask, what is your opinion on deductions being taken on leases that clearly state that no deductions of any kind are to be taken? I realize you are being put on the spot and you don't have to answer if it makes you uncomfortable, but I believe you probably have had some experience (if this happens in you neck of the woods) with this. 


Skip Peel - Independent Landman
03/12/17 12:28:08PM @skip-peel-independent-landman:

Standard boiler plate language commonly found in lease forms seldom includes any mention of deductions.  That issue is often addressed in an exhibit to the lease.  The language provided by the industry leaves them much wiggle room.  Ultimately state case law has a lot to do with how courts view language regarding royalty deductions.  I've got to run to a lunch appointment and will add a little later.


Skip Peel - Independent Landman
03/12/17 03:18:30PM @skip-peel-independent-landman:

Royalty deductions are a source of dissatisfaction and debate in all the major unconventional plays.  The law firm I work with has litigated a number of suits on the subject and have more that have not yet made it to court.  In the early days of the unconventional basin boom bonus prices far surpassed anything previously seen in LA and TX.  Bonuses for Barnett Shale escalated in short order to the $20,000 per acre range.  It was even crazier here in the Haynesville Shale where the record bonus per acre exceeded $30,000......and a 30% royalty!  Although that truly excessive competition  was somewhat limited to two companies and a specific area, it drove up the lease cost for all Haynesville focused companies.  In the last 8 months of 2008 the economic impact in seven parishes (counties) of NW LA was $1.3 billion.  However $900,000,000 represented the up front bonus paid to mineral owners for an executed lease.

Once reality set in and the price of natural gas cratered many companies found themselves over leveraged and in a race to drill and hold all the leases they had taken.  Chesapeake was the first to begin taking larger deductions and deducting for some services or costs that were non-traditional.  The vast majority of their leases had nothing to stop them from doing it.  The longer they got away with those deductions, the more tempted other operators were to follow suit.  Haynesville gas comes out of the ground at pressures that range from 5500 psi to 9500 psi so it doesn't need compression in a gathering system.  The gas is also dry, so it doesn't need dehydration.  Still operators deduct for transportation and dehydration.  Some areas do have small amounts of H2S and CO2 that needs to be treated. 

The law firm I occasionally work with has a custom lease form that includes no cost language that is one and one half pages in length.  It not only addresses oil and natural gas, it addresses natural gas liquids (NGLs).  Obviously a mineral owner has to have a large acreage ownership in a highly prospective area to get the industry to agree to that lease provision.  The industry has decades of case law on their side and friendly elected officials in LA and TX.  It is extremely hard to win a deductions suit but it does happen.  I hope that Marcellus states have politicians more attuned to the rights of the land owner and legislatures that will consider reasonable legislation to limit deductions.  Lease agreements can last for decades and generations.  It makes perfect sense to take a reasonable amount of time and to invest in some professional legal assistance before entering into a lease.  The vast majority of land owners should be able to rationalize the cost of good legal help.


M.A.B.
03/12/17 04:53:54PM @mab:

Skip,

Thank you for your response. I realize that got away from the original post but thought I'd pick your brain while I had the chance. Have a good evening 


Skip Peel - Independent Landman
03/12/17 05:01:53PM @skip-peel-independent-landman:

You're welcome.  I agree if you would like to continue, start a new thread.  Apology to Barry D for going off topic.


Joseph-Ohio
03/12/17 09:41:01AM @joseph-ohio:

Mr. Skip :

Any plans on you providing service to the Northern Tier of the Utica Point Pleasant Zone (more specifically Ashtabula County, Ohio) ?


Skip Peel - Independent Landman
03/12/17 05:02:31PM @skip-peel-independent-landman:

Sorry, joseph. No can do.


Paul Heckbert
03/22/17 01:14:57AM @paul-heckbert:

The video dan-warner2 gave a link to

https://youtu.be/sBhC_PVd2Lc

'Chasing Methane' with Mark Bittman

says that methane leak rates were measured at

4% in Denver basin

11% in Uinta basin

17% in Los Angeles basin

while the gas industry claims the leak rate was

1% on average.

This is particularly sad considering that methane is some 80 times more potent a greenhouse gas than carbon dioxide.


Barry D
03/22/17 01:37:34PM @barry-d:

@Paul

You are spreading more misinformation

The information you cite has already been debunked.

The first clue that the info is unreliable is that it includes the work of Anthony Ingraffea. This guy is funded by well known anti fossil fuel entities. Second, his work is continually disregarded due to it's poor quality and lack of scientific method.

The main issues is that the sample size was to small to be statistically useful. Then, the sources were only taken near older installations and completely ignored sites using new and improved techniques and equipment.

FAKE NEWS from Paul as usual.


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