May 20, 2010
posted on: May 20, 2010
IPAMS Meetings and Announcements
IPAMS Wildcatter of the Year: Peter Dea
Peter A. Dea, founder and CEO of Cirque Resources LP, has been named “Wildcatter of the Year” by the Independent Petroleum Association of Mountain States. IPAMS presented its highest award to Dea Saturday night at the industry group’s annual Wildcatter Gala, held at the Denver Center for the Performing Arts.
Click here to read the story in Denver Business Journal.
Western Senators Introduce Legislation to Block Interior’s Onshore Reforms
Yesterday, Senators Robert Bennett (R-UT) and John Barrasso (R-WY) introduced the American Energy and Western Jobs Act to block the Department of the Interior (DOI) from implementing the onshore policies that Salazar finally released on May 17th after their original announcement in early January. The bill requires DOI to conduct an economic impact assessment for any proposed changes to onshore oil and natural gas leasing and development policies before they are implemented. The assessment must include certification that the policy changes will not result in the loss of jobs, increase dependence on foreign oil and gas, or decrease revenues for federal and state governments.
The DOI policy changes announced on Monday will:
• Implement additional layers of NEPA environmental analysis that will likely add between three to six years onto the leasing process
• Create a new Master Leasing Plan that will have the effect of rewriting significant portions of recently completed Resource Management Plans (RMP)
• Create new “Interdisciplinary Consistency Review Teams” consisting of already overstretched BLM personnel as well as other agencies that will scrutinize each parcel nominated for lease
• Require speculative site-specific environmental analysis at the leasing stage, before it is even known whether there is recoverable natural gas or oil, and how many wells and other infrastructure would be necessary to develop any resource
• Open up more opportunities for legal challenge at each step of the process
• Rewrite the criteria for categorical exclusions congressionally mandated under Section 390 of the Energy Policy Act of 2005, and implement extraordinary circumstances review
• Take BLM staff away from on-the-ground protection, monitoring, and enforcement to potentially never-ending, redundant analysis
IPAMS estimates that the leasing policy changes will add three to six years onto the leasing process. A much better way to achieve the safe, environmentally responsible energy development that the public demands is for on-the-ground protection, not three more years of paperwork and analysis behind a desk. This policy implemented by Salazar is not about environmental protection – it’s about deciding where else not to develop. These reforms do nothing to get at the safety and environmental problems seen in the Gulf.
The new policy on categorical exclusions (CX) is a rewrite of Section 390 of the Energy Policy Act of 2005 by the Executive Branch, and therefore, simply unlawful. In a conference call to stakeholders yesterday, BLM’s Assistant Director, Minerals and Realty Management Mike Nedd stated that the policy is in response to “some members of Congress” who have expressed concern with categorical exclusions. Last time we checked, if certain members of Congress are concerned about an issue and want to change a law, they need to gather other like-minded members, introduce a bill, and get it passed by a majority of Congress, not just a few.
In addition, Nedd said that the CX policy was also in response to a GAO report. However, as IPAMS has documented in our position paper on the GAO report, the recommendations from GAO were that BLM implement consistency and policy oversight to correct the deficiencies documented. As the report states, “…our findings reflect what appear to be honest mistakes stemming from confusion in implementing a new law with evolving guidance.” The GAO report is being interpreted incorrectly by DOI, not to mention that it is not proper justification for an agency rewrite of a law.
Please take just a moment to thank Senators Bennett and Barrasso for their bill, and their continued commonsense support for our region, jobs, and economy by clicking here. Documents from BLM describing the changes are available here.
Fundraiser for Steve Pearce (R-NM)
June 8, 2010 at 7:30 a.m. in Denver
IPAMS PAC is hosting a breakfast for former New Mexico Congressman Steve Pearce on Tuesday, June 8 at 7:30 a.m. at IPAMS (click here to see the invitation.)
Steve Pearce is a long time friend of the industry who was first elected to the House in 2002 and made an unsuccessful bid for the U.S. Senate against Tom Udall (D-NM). Now Pearce is fighting to regain his seat in Congress, and he needs our support. Steve was a leader on the House Natural Resources Committee, where he was the Ranking Member on the Subcommittee on Energy and Mineral Resources. Before being elected to Congress, Pearce served in the New Mexico House of Representatives, and owned and operated his own oilfield services firm. If elected, Pearce will retain his seniority and return as a fourth term Congressman from New Mexico.
Please join IPAMS PAC in helping Steve Pearce return to Congress where he will continue to fight for domestic energy production. You can be on the Host Committee for a $1,000 donation or just attend the breakfast for $500. Checks should be payable to “People for Pearce.” Please remember that corporate donations are not permitted.
Thank you for supporting this important event, and please Jon Bargas if you have any questions.
IPAMS Annual Meeting and Summer Conference
June 23-25 in Beaver Creek, CO
Registration is open for the IPAMS Annual Meeting and Summer Conference, June 23-25 in Beaver Creek, CO. Join us in this relaxed setting for just the right mix of business and pleasure– discuss topics such as production and transportation, demand growth and western regional competitiveness while networking with fellow IPAMS members. Sponsorship opportunities are available!
Thank you to our current sponsors:
Berry Petroleum Company | Black Hills Exploration & Production | Edmonds Energy Corp. | El Paso E&P | Ensign United States Drilling | G3 Operating, LLC | M.J. England & Associates | New Prospect Company | Nielson & Associates | Noble Energy Inc. | Schlumberger | Tracker Resources | Trinity Petroleum Management LLC | Ultra Petroleum, Inc. | Whiting
Click here to see the complete details.
For more information and for sponsorship, contact Becca Ness or 303.623.0987.
IPAMS Comments to CEQ on Greenhouse Gas Analysis under NEPA
IPAMS is preparing comments to the White House Council on Environmental Quality’s guidance on climate change analysis in National Environmental Policy Act (NEPA) documents. Comments are due on May 24th. IPAMS would appreciate input on our draft comments, which will be available tomorrow, Friday May 21st on IPAMS Regulatory page. We apologize for the late availability of the draft.
IPAMS in the News
Energy leasing reforms unlikely to impact region
published in: The Coloradoan on: 05/18/2010 by: Bobby Magill
“These policy changes were formalized with no input from the hundreds of thousands of hard-working men and women whose livelihoods are tied to energy development on Western federal lands,” she said, adding the reforms will “further unemployment.” -Kathleen Sgamma
BLM finalizes onshore leasing reforms amid industry, GOP criticism
published in: Oil & Gas Journal on: 05/18/2010 by: Nick Snow
“These working families and their small towns and communities are already suffering from [the US Department of the Interior’s] slowdown of energy development. The uncertainty that will result from these policy changes will further unemployment and decrease revenue that small towns and rural counties throughout the West depend on to fund education and public safety.” -Kathleen Sgamma
IPAMS also quoted in Associated Press, E&E News , KUNC Radio, Salt Lake Tribune, Casper Star-Tribune and Denver Business Journal.
Salazar’s onshore drilling reform hailed by some Colorado officials
published in: Grand Junction Daily Sentinel on: 05/14/2010 by: Dennis Webb
Kathleen Sgamma of the Independent Petroleum Association of Mountain States said the reforms instead would add more layers of analysis to an already lengthy process.
Conservationists sue BLM over Wyo. drilling plan (subscription required)
published in: E&E News on: 05/14/2010 by: Staff
“The groups suing are never satisfied with the balanced approach that BLM tries to take,” said Kathleen Sgamma, director of government affairs at the Independent Petroleum Association of Mountain States. “It’s another way to try to shut down oil and gas.”
IPAMS Letter to the Editor: “No effort to ‘quash’ “
published in: Casper Star Tribune on: 05/14/2010 by: Kathleen Sgamma
Dear Editor, As a trade association representing companies that develop natural gas and oil in Wyoming and across the West, IPAMS takes issue with Dustin Bleizeffer’s unfounded claim that “industry still pushed hard to quash the state’s effort” to reform state rules concerning the use of hydraulic fracturing…
IPAMS Membership Update
IPAMS thanks our broad membership for supporting our organization through your 2010 dues. Your financial support ensures that we have the resources to continue to defend and promote your investment in the Intermountain West. For more information or to refer a company to IPAMS regarding membership please contact Susan Fakharzadeh.
Other Upcoming Meetings
Wyoming Basin Advisors Network (WYBAN) Meeting – May 27th, 10:00 a.m.
Air Quality Committee Meeting – Teleconference with EPA on Subpart W, Greenhouse Gas Reporting Rule, May 27th, 1:00 p.m.
Colorado Basin Advisors Network (CBAN) Meeting – June 9th, 10:00 a.m. This CBAN meeting will feature a presentation regarding a list of recommended Best Management Practices (BMPs) to reduce the impacts of oil and gas development to ‘plants of concern’ in Colorado by representatives of the Colorado Rare Plant Conservation Initiative. The Colorado Rare Plant Conservation Initiative, a partnership of 22 public agencies, private organizations, and academic institutions recently completed these voluntary oil and gas BMPs with funding from the National Fish and Wildlife Foundation (NFWF). The Nature Conservancy and the Colorado Natural Heritage Program are co-leading this effort and have asked IPAMS’ members to provide feedback on the list of BMPs. If you would like to attend this meeting, please RSVP to Spencer Kimball at 303-623-0987, and please be prepared to discuss the list of BMPs (Available here).
Agendas are available for upcoming meetings at http://www.westernenergyalliance.org/advocacy/. All meetings unless otherwise indicated are Mountain time, and at IPAMS and via teleconference.
Visit westernenergyalliance.org for the latest news affecting the Intermountain West’s oil and natural gas industry. Headlines are updated daily from local, national and international news sources. You may also sign up for daily newsbrief emails under the Manage Account section of the “Members Only” page.
Colorado
Local lawmakers tackled natural gas issue, closing of Cameo plant
published in: Grand Junction Daily Sentinel on: 05/17/2010 by: Charles Ashby
Though they’re in the minority party, local lawmakers managed to get a measure or two through the Colorado Legislature during the 2010 session, which ended Wednesday.
Energy leases in Colo. wilderness net few takers
published in: Associated Press on: 05/14/2010 by: Judith Kohler
There were few takers Thursday for proposed oil and gas leases in a northern Colorado mountain valley prized by hunters and anglers. Only two of 11 offered parcels netted bids in the Bureau of Land Management’s quarterly auction. About 1,470 acres out of a total of 11,073 up for lease in the area were bid on.
Montana
Construction on natural gas power plant continues
published in: Great Falls Tribune/Associated Press on: 05/14/2010 by: Staff
Construction of NorthWestern Energy’s natural-gas fired Mill Creek Generating Station west of Anaconda is on schedule to be complete by the end of the year.
New Mexico
Official: NM has untapped oil and gas reserves
published in: Associated Press on: 05/19/2010 by: Staff
The interim president of the New Mexico Oil and Gas Association says projections show the state’s untapped natural gas reserves could result in trillions of additional cubic feet of gas, while the potential for crude oil could top a billion barrels.
Oil and gas revenues buoy state’s bottom line
published in: New Mexico Independent on: 05/18/2010 by: Trip Jennings
New Mexico is hurting financially, no doubt. Unemployment is at a 22-year high. Tax revenues that pay for services are way down. But apparently things could be worse.
Oil and gas industry gathers in Farmington
published in: Farmington Daily Times on: 05/14/2010 by: Steve Lynn
Informative lectures on oil and gas development and a trade show where companies explained services and products highlighted opening day of the 2010 Four Corners Oil and Gas Conference.
NM Land Office earns $114 million in third quarter
published in: Bloomberg on: 05/14/2010 by: Staff
The New Mexico Land Office has collected $114 million during the third quarter, with more than 90 percent of that coming from oil and natural gas operations on state trust lands.
North Dakota
ND Oil Outlook Improved by Gulf Spill
published in: KXMBTV Bismarck on: 05/18/2010 by: Staff
The crude oil spewing into the Gulf of Mexico from a damaged rig may cause environmental damage in that region… But it could be an economic boom to North Dakota.
North Dakota comes to California’s rescue
published in: Grand Forks Herald on: 05/19/2010 by: Ryan Bakken
North Dakota is swimming in money because of oil extraction taxes. If oil production continues to increase at its recent rate, perhaps we’ll even have something like the Alaska Permanent Fund.
Gov. Hoeven tells EPA that N.D. can handle fracturing
published in: Bismarck Tribune on: 05/16/2010 by: Rebecca Beitsch
Gov. John Hoeven has had a series of meetings with Environmental Protection Agency leaders as the agency moves forward with a process that could end in its regulation of an oil drilling process known as fracturing.
ND oil patch continues path of record production
published in: Associated Press on: 05/14/2010 by: James MacPherson
Production in North Dakota’s prolific oil patch continues to grow exponentially, with a record number of wells drawing crude at nearly twice the daily rate of two years ago
Utah
Litigation over oil and gas reforms?
published in: Deseret News on: 05/19/2010 by: Amy Joi O’Donoghue
In yet another percolating battle between state and federal agencies over control of public lands, a top official in Gov. Gary Herbert’s administration said Wednesday that litigation may be the only option to challenge recent reforms to the nation’s oil and gas leasing program.
New Utah BLM director picked
published in: Salt Lake Tribune on: 05/17/2010 by: Judy Fahys and Robert Gehrke
Juan Palma has been picked as the new director of the Bureau of Land Management’s Utah office. Palma, currently the director of the Eastern States Office in Virginia, which covers all of the BLM land in the eastern United States, will replace Selma Sierra, who has led the Utah office for four years.
Wyoming
Amid talk of oil play, Wyoming nets record lease sale
published in: Associated Press on:05/13/2010 by: Mead Gruver
The U.S. Bureau of Land Management auctioned off a record $32.3 million in federal oil and gas rights in Wyoming amid speculation that a major oil play could be in the offing in the eastern part of the state.
Washington Watch
IPAA Action Alert: Carried Interest
Congress is now considering tax legislation that would extend expiring tax provisions. Under its rules it must offset the revenue that is lost by those extensions. It is considering modifications to the tax treatment of “carried interest”. Much of the rationale for changing carried interest relates to its use by investment funds. These high profile funds have generated adverse public reactions because of the large amounts of income. However, carried interest has uses as a method to raise funds for capital investment projects, too. In the oil and natural gas industry, companies use a carried interest approach, for example, to create drill funds to develop new resource areas. Many of these drill funds are comprised of small businesses. The proposed legislative changes would alter the tax treatment for these projects as well. Click here to contact your Representatives in the House and Senate.
Reading the Tea Leaves on the Sen. Murkowski-Epa Climate Resolution
published in: E&E ClimateWire/New York Times on: 05/20/2010 by: Robin Bravender
The Senate will likely vote on a climate change measure in the next few weeks. But it won’t be on comprehensive cap-and-trade legislation. Sen. Lisa Murkowski (R-Alaska) has until the week of June 7 to call for a floor vote on her resolution to handcuff U.S. EPA’s forthcoming climate regulations.
Drilling agency MMS split into 3
published in: Denver Post on: 05/20/2010 by: Mark Jaffe
Interior Secretary Ken Salazar is breaking up the troubled Minerals Management Service into three entities in an attempt to resolve the agency’s conflicting missions.
Salazar concedes federal rules too weak to prevent oil-spill disaster
published in: Denver Post on: 05/19/2010 by: Michael Riley
Interior Secretary Ken Salazar conceded during congressional testimony Tuesday that federal regulation of offshore drilling was too weak to prevent the massive Gulf of Mexico oil spill and that agencies under his watch were partly at fault for the unfolding environmental disaster.
Senate emissions bill in search of a few good leaders
published in: E&E News/New York Times on: 05/19/2010 by: Darren Samuelsohn
The Senate climate and energy bill unveiled last week now resides in a no man’s land without any clear consensus on who is responsible for collecting 60 votes. “It’s a good question: Who’s in charge?” said Sen. Sherrod Brown (D-Ohio).
Kerry, Pickens: Odd couple of climate legislation
published in: Associated Press on: 05/19/2010 by: Matthew Daly
Call them the odd couple of climate change. Six years ago, oilman T. Boone Pickens paid millions to support TV ads run by Swift Boat Veterans for Truth, a group that attacked Democrat John Kerry’s Vietnam War record in the 2004 presidential campaign.
Kerry-Lieberman climate bill would require disclosure of hydraulic fracturing chemicals
published in: Dallas Morning News on: 05/18/2010 by: Dave Michaels
Critics of natural gas drilling assert that drilling fluids used in hydraulic fracturing — or the methane itself — could seep into underground water reservoirs.
Reid plans Dem caucus meeting on how to move energy plans
published in: The Hill on: 05/18/2010 by: Ben Geman
Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that the Senate Democratic caucus will huddle in mid-June to discuss how to proceed on energy and climate change legislation.
Negotiations on tax extenders bill focus on offsets from oil industry (subscription required)
published in: E&E News on: 05/18/2010 by: Katherine Ling
Lawmakers aiming to finish negotiations on offsets for a bill to extend several expired tax incentives and other expiring provisions by the Memorial Day recess have their sights set on the oil industry.
Rehberg, Herseth Sandlin aim to block feds from regulating GHGs (subscription required)
published in: E&E News on: 05/14/2010 by: Robin Bravender
Reps. Denny Rehberg (R-Mont.) and Stephanie Herseth Sandlin (D-S.D.) unveiled a bill yesterday that would block all federal agencies from regulating greenhouse gas emissions without express authority from Congress.
Media Watch
Editorial: Right balance on drilling
published in: Denver Post on: 05/20/2010 by: Editorial Staff
Tighter rules for oil and gas drilling on federal lands will go a long way toward protecting the environment, yet they won’t unreasonably restrict necessary energy exploration.
Editorial: Rule change
published in: Salt Lake Tribune on: 05/19/2010 by: Editorial Staff
New drilling regulations just announced by Interior Secretary Ken Salazar will restore balance to oil and gas exploration policy that was sorely lacking during the George W. Bush administration.
Editorial: The Senate needs to act now on the climate bill
published in: Washington Post on: 05/19/2010 by: Editorial Staff
Sens. John F. Kerry (D-Mass.) and Joseph I. Lieberman (I-Conn.) have provided Congress with an opportunity. Their climate bill, released last week, is imperfect. But it offers a start, very much in the right direction.
Editorial: Don’t let oil spill divert attention from energy bill
published in: Dallas Morning News on: 05/18/2010 by: Editorial Staff
America’s fearful reaction to the Three Mile Island accident in 1979 put building new nuclear plants on a hiatus that has reached three decades. The result is a nation more dependent on fossil fuels, including foreign oil, and less energy-secure.
Editorial: Wilderness plan
published in: Salt Lake Tribune on: 05/14/2010 by: Editorial Staff
The public lands protected under U.S. Sen. Bob Bennett’s Washington County lands bill could end up as the senator’s greatest legacy. But the successful negotiation and compromise that led to a sensible plan for fragile lands in Southern Utah should not end with Bennett’s ouster from the Republican ticket this year.
Editorial: Just Don’t Call It a Climate Bill (subscription required)
published in: Wall Street Journal on: 05/17/2010 by: Editorial Staff
Despite the most creative rhetoric this side of ObamaCare, voters have figured out that “cap and trade” involves artificial carbon rationing and vast new energy taxes.
Editorial: A closer eye on U.S. oil industry
published in: Denver Post on: 05/16/2010 by: Editorial Staff
The cause of the oil drilling rig explosion in the Gulf of Mexico and the ensuing catastrophic spill has yet to be pinpointed. But it is clear that oil industry self-regulation is a dangerous policy that needs to change.
Environment and Wildlife
Federal judge to rule on protecting wildflower
published in: Associated Press on: 05/19/2010 by: Staff
A federal judge Wednesday will announce whether the government should protect a wildflower that grows only in oil shale outcroppings in northeast Utah and northwest Colorado.
Prairie dogs damage private development as habitat disappears
published in: Deseret News on: 05/19/2010 by: Amy Joi O’Donoghue
They hold developers and government hostage, carry the plague and blithely set up towns without respect to boundaries. Originally classified as “endangered” in 1973, the Utah prairie dog was down-listed as “threatened” under the Endangered Species Act in the mid-1980s.
Mont.: Reduce wolf numbers
published in: Associated Press on: 05/14/2010 by: Matt Volz
Montana wildlife commissioners approved a plan Thursday that aims to reduce the wolf population for the first time since the once endangered animal was reintroduced to the region 15 years ago.
Technology, Alternative & Renewables
Water Adds New Constraints to Power
published in: New York Times on: 05/18/2010 by: Erica Geis
In the Mojave Desert, solar developers are scrambling to secure permits to build vast expanses of new generating capacity. But they are discovering that cost and carbon emissions are not the only limiting factors in new energy decisions in California. They are bumping up against water scarcity.
Wind projections miss mark
published in: Associated Press on: 05/14/2010 by: Matt Joyce
Some of Rocky Mountain Power’s wind farms didn’t produce wind energy last year at the same rate the company projected before construction, according to numbers provided during the utility’s Wyoming rate case.
Markets
WBI to expand Bakken natural gas pipeline capacity
published in: Oil & Gas Journal on: 05/19/2010 by: Christopher E. Smith
Williston Basin Interstate Pipeline Co., the wholly owned natural gas transmission pipeline subsidiary of MDU Resources Group Inc., announced plans May 19 to expand its existing gas pipeline capacity by about 33% in the Bakken production area in northwestern North Dakota.
Industry News and Events
Hopes pinned on Sunday attempt to stop Gulf oil leak
published in: CNN on: 05/20/2010 by: Staff
An effort to plug the ruptured oil well that is spewing oil into the Gulf of Mexico may halt the leak when oil giant BP tries it Sunday, Interior Secretary Ken Salazar said Thursday.
BP works to increase percentage of oil contained from gulf spill
published in: Oil & Gas Journal on: 05/19/2010 by: Paula Dittrick
BP PLC crews worked May 19 to gradually increase the volume of oil being collected through the raiser insertion tool at the site of a deepwater blowout, and government scientists reported tar balls found in the Florida Keys were unrelated to the Gulf of Mexico oil spill.
Questar to spin off Denver-based subsidiary
published in: Denver Post on: 05/19/2010 by: Andy Vuong
Salt Lake City-based Questar is spinning off its natural-gas and oil exploration-and-production operation as a separate, publicly traded company that will be based in Denver.
Institute for Energy Research’s 2nd Annual Houston Luncheon
June 4, 2010 in Houston, TX
The Institute for Energy Research (IER) will have John Stossel, Fox Business Anchor, as their keynote speaker at their 2nd Annual Luncheon.
For additional event and sponsorship questions, contact Nancy Bradley at events@iertx.org or call (713) 591-1732. Click here for more information and registration.
BENPOSIUM
June 7-10, 2010 in Houston, TX
The most comprehensive natural gas symposium that applies the “fundamentals” perspective to how production, capacity, flow, inventories and demand interact to drive prices, trading opportunities and marketing and investing strategies. The goal of BENPOSIUM is to provide executives, analysts, traders and investors for an in-depth look at the shifting energy market dynamics and how these developments are the reshaping natural gas and power industry landscape. Click here to view the agenda and to register.
Western Governors’ Association 2010 Annual Meeting
June 27-29, 2010 in Whitefish, MT
The Western Governors’ Association will recognize “100 Years of Common Ground” at this year’s Annual Meeting. Topics will include:
-Sharing a Finite Resource: Challenges and Opportunities in Water Management
-Building New Energy Generation and Transmission
-Working Across Borders to Conserve Landscapes
For more information on the meeting visit the WGA Web site at www.westgov.org.
2nd Annual Front Range Energy Career Expo
September 24, 2010 at Red Rocks Community College
The Front Range Energy Career Expo and Forum (Expo) is designed as an educational event for high school students in the Denver Metro area. The goal of the event is to bring college representatives, energy companies, and students together in one location, to present information about college options and job opportunities to the future generation of leaders that will graduate from high school in the next two years. This year’s event will be co-hosted by High Plains Communications, LLC and Red Rocks Community College.
To sponsor, speak, or host a booth contact Jaime Gardner or (970) 597-0696.
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