wolfEffective this past August 3, the EPA has new regulations for methane and volatile organic compound emissions from oil and gas operations  As you know, reducing methane emissions is a key component of the President‘s climate change agenda.

Why should I care?

Because if you own or operate an oil and gas production, processing, transmission or storage facility, you will be required to comply with the new rule by no later than June 3, 2017. Other than that, don’t worry, be happy, and continue to go about your daily business in blissful ignorance of the impending regulatory burden.

What does it mean?

More expenses for operators of the aforesaid facilities, more demand for good inspectors, more operations for the EPA to meddle in oversee, and a risk of fines for a substantial failure to comply, whether willfully or by inadvertence.

Last weekend I heard Keith Kottrill of Innovative Ventures present a synopsis of the new standards.

The summary is an attempt in 22 pages to capture the spirit and effect of the new rule. It was not prepared by a lawyer and is not intended as a legal analysis. It is the product of Keith and his colleagues who will be implementing and conducting the on-site testing required by the rule. It should be viewed, relatively speaking if you aren’t an engineer, as a good place to begin to understand the rules.

Highlights

  • Get familiar with the term “Quad Oa”, an informal reference to the new rule.
  • There are two main parts of the rule: Control devices or practices must reduce methane and VOC emissions from certain equipment by 95%, and fugitive emission leak detection and repair (LDAR) applies only to well sites and compressor stations.
  • The rule applies to “affected facilities”, specific types of equipment or facilities that are new, modified, or reconstructed after September 18, 2015. Beware, those terms have certain, definite meanings under the rule.
  •  There will be a reporting and paperwork burden.
  • Look forward to quarterly inspections of some midstream facilities.
  • Generally, repairs must be made within 60 days.
  • See pages 13 and 14 for the EPA’s estimated industry-wide costs of compliance, including projected economic benefits. Honk if you believe the costs will be far higher.
  • The rule is based partially on a model called the the “Social Cost of Methane”, and the “methane-related monetized climate benefits” of the rule. Honk twice if you believe those models are based more on ideology than on science.

Time will tell how this rule will work. Among other things, supporters and detractors alike will learn the true extent of methane leakage in our oil and gas infrastructure.

A musical interlude

Today, girl singers you might not have heard of:

 

steam engineWhich of these statements makes sense to you:

A. “Never before have the rulers of a society intentionally driven it backwards to scarcer, more expensive, and less efficient energy.”

B. “Communism is the optimal system for avoiding dangerous global warming”.

C. “This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the Industrial Revolution.”

D. “Giving society cheap, abundant energy would be the equivalent of giving an idiot child a machine gun.”

E .“Global warming, like Marxism, is a political theory of actions, demanding compliance with its rules.”

What the quiz says about you

B, C and D? Comrade, you took a wrong turn at “fueling” and failed to yield to “freedom”.

A and E? Then you should read Fueling Freedom: Exposing the Mad War on Energy by Kathleen Hartnett White and Stephen Moore.

If you want a real book review, go to the National Review. This post is more of a polemic, a defense of an honorable industry that is vital to the security and prosperity of the world (excluding Venezuela, of course).

Ms. White, Distinguished Fellow-in-Residence at the Texas Public Policy Foundation, spoke last week at TIPRO’s summer conference. See this PowerPoint for the high points of her presentation. It’s no substitute for the presentation itself, but if you want to know more you should read the book.

Facts that will impress your friends 

Here are compelling facts from the book that reveal the importance of fossil fuels to our modern way of life:

  • Human misery remained at about the same level for 100,000 years until the Industrial Revolution in the early 1800’s. Since then, misery has declined and millions have been lifted out of poverty and into the middle class. This progress is a result of human ingenuity and fossil fuels.
  • America produced three times as much food as it did a century ago, with one-third fewer man-hours, on one third fewer acres, and on and at one-third the cost. (Think, natural-gas based fertilizers, tractors, and other fruits of petroleum.)
  • In 1875 the average American family spent 74% of its income on food, clothing and shelter. In 1995 the same family spent 13% of its income on these fundamental necessities.
  • In cost per megawatt hour, oil and natural gas receive 64 cents, wind $56.29 and solar $775.64 in federal subsidies.

Some points might be overstated:

  • Haynesville and non-core Bakken operators might not agree that, “In many places fracking is profitable at $40 per barrel and in most places it is profitable at $50 per barrel.”

Now, for our musical interlude.

Sources for the quiz

A. Fueling Freedom, p. xv (no link, you gotta read the book).

B. IPCC chief Christina Figueres, Daily Caller, January 15, 2014.

C. Figueres, U N Regional Information Centre for Western Europe, February 3, 2015.

D. Paul Ehrlich.

E. Paul Johnson, The Nonsense of Global Warming, Forbes, September 8, 2008.

mosesDid Moses worry about the mineral rights when he parted the Red Sea?  Maybe Charlton Heston knows. What we know is that 3,500 years later if you plan to partition surface rights, the time to pay attention to the minerals is now.

In Hosek v. Scott, the parties had a deed partitioning the surface estate of 338.54 acres in Atascosa County, Texas. The partition deed said:

“This partition does not include any of the oil, gas and other, minerals in, on or under the [land], and same are to remain undivided for a period of [25] years from date hereof and as long thereafter as oil, gas or other minerals are produced in paying quantities from the [land].”

The question

Did the minerals revert to the owners of the surface estates after the period lapsed during which partition of the minerals was prohibited?

After the partition Hosek owned 207.77 acres (except 38.5 owned by Scott) and Scott owned 130.77. Scott conveyed the 38.5 acres to Hosek subject to the reservation of all minerals reserved in the partition deed.

Scott argues: Since the minerals were never partitioned he continues to own an undivided half interest in minerals under the Hosek tract.

Hosek responds:  The meaning of the deed is ambiguous and thus a fact issue exists.  The language intended that the undivided mineral interests revert to the surface owners after the expiration of 25 years and cessation of production.

Are there two reasonable interpretations of the partition deed?  If so, we need a trial. If not, judgment for Scott.

(I’ll skip the rules of contract construction that you’ve seen in this space before).

The answer

The minerals did not “revert” to the surface owner at the end of the 25 years. The deed expressly excluded minerals from the partition and the deed does not have language stating that the minerals would be partitioned at the end of the 25 years. Accordingly, Hosek’s interpretation would require the court to add language to the partition deed.  That, the court is not permitted to do.

The court ruled that the partition deed can be given a definite and certain meaning as a matter of law and is therefore unambiguous. The parties’ intent is expressed in the four corners and restricted partition of the minerals for the 25 years. At the end of that period, the restriction was lifted and the parties had the unrestricted right to partition the minerals, or not. They did not partition the minerals after the end of the 25 year restricted period. Scott wins.

I’m breaking my promise …

… never to write on climate change because the subject is too politicized. But this, from the announcement following the Paris climate change conference is too good to ignore:

Also request the Subsidiary Body for Scientific and Technological Advice to undertake a work programme under the framework for non-market approaches to sustainable development referred to in Article 6, paragraph 8, of the Agreement, with the objective of considering how to enhance linkages and create synergy between inter alia, mitigation, adaptation, finance, technology transfer and capacity-building, and how to facilitate the implementation and coordination of non-market approaches.”

This 66-word morass of abstractions is what we’ve come to expect from bureaucrats, and it dismisses free markets for … what?  Here is Forbes‘ take on it. Michael Lynch says only a lawyer would love it. I object; that monstrosity is an insult to lawyers.

In honor of our special guest Moses we wish you Happy Holidays.

Our wardens at the EPA are “racing to turn out new regulations before the clock runs out on President Obama’s term”, says The Hill.

The EPA is revising its Mercury and Air Toxics Standards for coal fired power plants. According to the US Energy Information Administration, owners of U.S. operators are facing choices:

  • 20% must decide whether to upgrade their coal fired plants at the end of 2012 or retire them,
  • 9.5% intend to retire plants,
  • 5.8% plan to add environmental control equipment,
  • 64% already have appropriate control equipment.

The EPA is also looking to cut greenhouse gas emissions by reaching beyond the plants themselves. The reductions could be met by encouraging power plant owners to expand renewable energy, improve the efficiency of their grids, or encourage customers to use less power. This rule would also allow states to reach their goals by using existing emission-cutting schemes, such as state-controlled and regional cap-and-trade plans.

Questions

 Is this authority is allowable under the Clean Air Act? The complaint is that the EPA has gone “way beyond the original intent of the Clean Air Act … ”, said Sen. John Barrasso (R. Wyo.). The administration’s response is the EPA is just doing what Congress allowed under the CAA, and we Americans, and thus the EPA, must do more to prevent global warming.

Is this a passing thing or are we in an eternal regulatory vice grip?  Some say the EPA has been winning at the courthouse lately.   Not to worry.  Nothing in politics lasts forever … unless Edwin Edwards wins his congressional election.

Been-There-Done-That

Actor-activists like Mark Ruffalo remain committed to the untruths about contaminated drinking water in places you’ve heard of before: Pavilion, Wy; Dimock, PA; and Parker County, Tx. He has lent his name to a request by fringe group Food and Water Watch and the Natural Resources Defense Council to the EPA to re-open investigations of these alleged contamination sites. Those claims have repeatedly proven to be false.

The Takeaway

“Low Information Voters” are those who, it’s been said, don’t know what they think they know. Those who can be motivated by Hollywood personalities to actually vote can be a threat to progress and common sense. Witness the fracing bans in college towns in Colorado and even in our own Denton County, Texas.

Who’s Next?

The U.S. Chamber of Commerce is concerned that the. EPA’s plans will result in increased energy costs, which will diminish hU.S. competitiveness in the world economy and kill jobs. Coal is “dirty”, you say, and it competes with natural gas, so you might not care. But will the regulatory stampede stop short of sending us all hurtling over the economic cliff? Time will tell. And to be fair, not all regulations cost as much as originally feared.

This musical interlude is dedicated to the EPA and its Administrator Gina McCarthy.

My recent post about Alex Epstein and the moral case for fossil fuels told only part of his story. He also says that the global warming “alarmists” have it all wrong. He refers to “unambiguous” data that CO2 emissions have risen from an atmosphere concentration of .03% to .04%, while over the same period climate-related deaths have declined 98%, and drought-related deaths have declined by 99.8%.

Here are some of Alex’s other points:

  • Defenders of fossil fuels, when they publicly endorse “renewable” as the ideal, defeat themselves by essentially agreeing that there is a moral case against fossil fuels.
  • The implication is that “renewables” are the goal and oil and gas is just a temporary necessary evil.
  • Once greenhouse gas emissions are endorsed as a fundamental benchmark of environmental health, the industry is conceding that it is causing catastrophic global warming and that reducing greenhouse gas emissions is moral imperative.

What’s With Honey Boo Boo and Fossil Fuels?

Which leads me to a related topic. In preparing this blog I see more blog posts and news articles than you can imagine about “global warming”, “climate change” and the like.  I’ve concluded that the issue is so highly politicized, has attracted so many advocacy groups, and has generated so many puroprtedly scientific opinions on one side or the other that I (not being an engineer) don’t know what to believe.

Thus, for the time being I leave it to you to Google “global warming” or “climate change” and decide for yourself. In the meantime here are a few sources I’ve come across that you can rely on, at least for their consistency:

The “Alarmists”: The International Panel on Climate Change  (where it all started), Al Gore and the Huffington Post  (a twofer here), pretty much anything from the New York Times (insidious for what it elects not to print as much as for what it does), Grist (Can you get farther left?).

The “Deniers”: Non-Governmental International Panel on Climate Change ; Bjorn Lomberg (not so much a “denier” as an alternative thinker); The Foundry, from the Heritage Foundation (far right on just about everything); Powerline; Watts Up With That.

Somewhere out there are “moderates”. Rich and Elizabeth Muller might be two of them. I know they’re U C Berkeley professors. Just read what he has to say.

This GW hiatus doesn’t include the fracking controversy. (Or is it fracing, or frac’ing? I’ve been castigated by my friend, Dallas lawyer Pat Shaw, for using “fracking”. Pat says only the “anti’s” use that spelling).

Having tired of trying to figure out if the world is going to perish by 2020, or 2035, or 2100, or the next presidential election, or never, I’ve moved on to more weighty topics:

  • Noah: Blasphemy or clueless Hollywood entertainment?
  • Lord Grantham:  Anachronistic dilettante or an honorable man preserving noblesse oblige and other worthy institutions?
  • Who will win the AL West? … the SEC West?
  • Should the USA convert to the metric system?
  • Clapton or Hendrix?
  • First place in artistic achievement:  Hoarders, Cheaters, or Here Comes Honey Boo Boo?

As with GW, decide for yourself.

 

Schizophrenia : A mental disorder characterized by a breakdown of thought processes and by impaired emotional responses. Common symptoms include delusions, such as paranoid beliefs; hallucinations and disorganized thinking.

Somebody is crazy, or at least very, very wrong, about the hydraulic fracturing debate.

Earthquakes and Fracking

In the controversy over “frackquakes”, brave small-town citizens are standing up to the rapacious oil drillers and their regulatory co-conspirators. Or, a outsiders are stirring up the locals and meddling in matters not of their concern.

Ecowatch sees it this way: Texans’ opinions about fracking are changing. The damage from “frackquakes” is “considerable”, including a 5.7 magnitude frackquake near Prague, Oklahoma. This turns fracking into a property rights issue and communities, even in Texas, have had enough. About 1,000 “concerned citizens” packed a public meeting about frackquakes near Azle. There was an “uproar” when the Railroad Commissioner holding the meeting announced a study of the issue but refused to answer questions. The leaders of the opposition are pleased that the local protestors are mad.

Meagan Baker in Energy in Depth sees it differently: “Fear and misinformation” are used to link fracking and earthquakes. Leading the protestors in Azle are national organizations such as Earthworks and Downwinders at Risk, funded by out-of-state “big money foundations”.  An essay by Cliff Frolich of the University of Texas Institute for Geophysics noted a correlation between injection wells and small quakes that are not harmful. A study by the National Research Council concluded that only a small fraction of injection and extraction activities have induced seismicity at levels noticeable to the public. These findings are similar to studies by the US Geological Survey, US Department of the Interior, and state geologists from Oklahoma and Colorado.

Water Use and Fracking

USA Today reports that in a recent study Ceres says the overuse of freshwater in fracking operations is a terrible threat to water-starved regions of the United States. Fifty-five percent of wells requiring hydraulic fracturing are in drought-stricken areas and half are in regions under “high or extremely high water stress”. The focus of the article is that the use of fresh water in fracking diminishes the availability for other uses. 

Triple Pundit  adds to the alarm by quoting huge volumes for use in fracking but none for other, more intensive, uses. (Where is the context?)   

Here is the entire Ceres report

In Forbes, David Blackmon questions Ceres’ point of view and impugns their motives. The report focuses on the threat on water sources imposed by fracking, without casting similar aspersions on other sources of water use.

Energy in Depth piles on, attacking Ceres as failing to take into account the effect onthe environment of  water use by chemical, mining, electric power, agriculture, food and beverage, textiles, semi-conductors and construction materials industries. Example: The amount of water used by fracking amounts to 1.3 percent of the amount used in carwashes.

So Who’s Crazy?

If you believe science trumps emotion and alarmism in these matters, you gotta figure the anti’s are the crazies. or are they, if their audience isn’t paying attentionto the details?  

It was 50 years ago this month that the Beatles first arrived in America, in a revolution as big as fracking. Not convinced? Compare the 1963 Beatles to the number 1 hit of  1962.

Technology and innovation will resolve the issues, real and imagined, that confront hydraulic fracturing. I arrive at that opinion because of history:

Before 1914, France had three dozen airplanes, more than all other air forces in the world put together. Germany, Britain, Italy, Russia, Japan and Austria all had no more than four planes each and the United States had just two. During the four years of World War I Britain built 55,000 planes, Germany 48,000 and Italy 20,000. During the course of the war, bombs went from nothing more than “wine bottles filled with gasoline or kerosene with a simple detonator attached” to aerial bombs weighing up to 2,200 pounds. (From One Summer, America 1927, by Bill Bryson).

(In order to boost readership I searched for similar developments in beer manufacturing. I’m sure there’s at least one. I just couldn’t find it.) 

With that out of the way, what’s the connection to energy? When faced with problems it must solve, industry, including oil and gas, develops solutions.  

A few examples:

  • Considering the total water usage for various means of electricity generation, natural gas saves water, even counting use associated with hydraulic fracturing. So says a study by the University of Texas at Austin published in Environmental Research Letters.  For every gallon of water used to produce natural gas through hydraulic fracturing, Texas saved 33 gallons of water by generating electricity with that natural gas instead of coal (in 2011, the last year for which information was available).
  • According to StateImpact (a publication of NPR stations) GasFrac is pioneering waterless fracking technology.
  • Apache Corporation has devised a way to minimize the use of fresh water in fracking, relying instead on chemical treatment of produced and brackish water.
  • EVO CNG  intends to establish CNG fueling stations for long-haul trucks and other vehicles in Fort Worth (its first), Dallas, San Antonio, Austin and El Paso, Texas.
  • According to the New Hampshire Union Leader (of all places) fracking is greener than environmentalists want to admit.

Natural gas isn’t the cure-all for our environmental and energy ills –there is no doubt that wind and solar (and bio-fuels if you don’t count corn) will help as well – but it’s a big help.

The next challenge is leaking methane. I’m sure the industry will make progress there as well.

So, let’s celebrate a clean and bright energy future!

Before we talk about global warming, which of these statements most matches your view of  politics and policy:

“In all things the mean is praiseworthy, and the extremes neither praiseworthy nor right, but worthy of blame.” Aristotle.

“There’s Nothing in the Middle of the Road but Yellow Stripes and Dead Armadillos.” Title of a book  by Texas populist and former Land Commissioner Jim Hightower.

 Mr. Hightower would be right at home in the latest clusterfukushima that is the disagreement over global warming. The Intergovernmental Panel on Climate Change – the UN sponsored organization that has been reporting for years on the impending doom caused by anthropogenic global warming – is about to issue its fifth report on climate change. The report will reveal (it seems everybody but you and me has read it) that the IPCC has been underestimating global warming for all these years, and climate change could have double the impact previously thought. That’s what Nafeez Ahmed in EarthInsight says.

That’s not at all what the report will say. The IPCC will tone down its climate-change alarmism and substantially reduce its dire predictions about the future rising of global temperatures. So there’s not so much to worry about. That’s what they say in The Spectator.

That’s a lie like all the other lies. The climate change deniers are “industry puppets spewing obscene lies while people drown”. And the recent Colorado floods are all because of climate change.  That’s what David Sirota says, rather emotionallly, in Salon.

That’s slanderous. The “tell” of the “climateers” reflects their bad hand.  Their warnings of catastrophe now say it will happen “some decades from now” rather than “before the Texas Rangers fall totally out of contention for the MLB playoffs”, as was projected. That’s what Powerline says. That deadline was mine, of course. Theirs is “soon”.  

B*#$+ S#*<!  Global warming is every bit as bad as it ever was and anyone who is against it has been writing articles characterized by misinformation. (To wit, a purportedly “humiliating” piece in The Daily Mail). That’s what Bob Ward of the Grantham Institute, associated with the London School of Economics, says.

And to pile on:  Rush Limbaugh is a corpulent, bloviating idiot. So thinks Media Matters.

Talk about bad motives!  The IPCC bureaucrats are all in it for the huge government subsidies and other perks, says Powerline. The NIPCC , a cleverly-named private group, uses its own studies to portray a view of climate change that is “realistic”. 

But NIPCC is a front for former tobacco lobbyists and current fossil-fuel industry stooges, and their conclusions are “absurd”, says desmog.

Trust me; there’s more.  I give up trying to please Aristotle; I’m in the hunt for Diogenes, the guycarrying the lamp.