Thursday, December 24, 2009

Where real work is getting done

It obviously didn’t generate the coverage leading up to, during, and after the United Nations Climate Conference in Copenhagen. But the Powder River Basin Interagency Working Group’s coalbed methane development research and monitoring workshop Dec. 2-3 in Sheridan, Wyo., mattered just the same.

“The conference was intended to present the information to oil and gas producers and landowners in a way that it could be understood,” explained Dale Tribby, who works in the US Bureau of Land Management’s Miles City, Mont., field office and co-chaired the meeting.

“Its purpose was to take people who had done research related to hydrology and aquatics and wildlife, and then present those findings to the audience,” he told me in a telephone interview. “About a third of the presentations were related to water quality issues, another third to aquatics, and the final third on wildlife, with emphasis on sage grouse.”

The working group is made up of federal, state, tribal, and county agencies, according to BLM. Its activities exemplify efforts to bring stakeholders together to constructively discuss issues, efforts which all too frequently are overlooked.

“We had a wide variety in the audience. There were people from regulatory agencies, the general public and other groups. There was a lot of discussion,” said Windy Davis, an energy specialist with Montana’s Fish Wildlife and Parks Department who was the meeting’s other co-chair. “Quite a few oil and gas producers were there. Montana and Wyoming’s petroleum associations both sponsored it. About a quarter of those in attendance were operators.”

(Yes, I checked to make certain of the spelling of her first name. With my last name, I try to do when I come across one that’s unique. I also made certain not to make jokes about hers because I’ve heard so many about mine, especially at this time of year. But she volunteered that she finds hers appropriate for where she lives and works.)

“A lot of this work was not new; it’s been ongoing for several years,” said Davis, who also works as a biologist under BLM’s pilot office program. “It was a check-in with some folks on what’s been going on with the monitoring networks. There were no big surprises. It was pretty civil, with good discussions and lots of questions. The meeting was intended to share data and let people know what progress has been made on these projects.”

The meeting also provided an opportunity for outside consultants who have been hired by oil and gas producers to learn what has been going on in water quality, aquatics, and wildlife research, she continued. Companies such as Fidelity Exploration have hired these consultants to study issues such as effluent discharges and sage grouse habitat, Davis said.

I periodically encounter such meetings as I cover government and the oil and gas industry. They provide a refreshing contrast to the conflicts and rhetoric which make great copy but ultimately accomplish little. The folks who are doing this real work to identify, address, and solve problems deserve all of our best wishes during this year-end holiday season and through the coming year.

Tuesday, December 15, 2009

Alaska gas line coordinator nominee’s daunting task

Larry Persily obviously isn’t afraid of a big challenge. There aren’t many bigger than keeping the proposed natural gas pipeline from Alaska moving forward when shale gas formations in the Lower 48 states promise abundant domestic supplies and prices are depressed.

Alaska’s congressional delegation applauded US President Barack H. Obama’s nomination of Persily on Dec. 9 to be the project’s new federal coordinator. Assuming that he’s confirmed by the US Senate early next year, Persily will need to go to work immediately to convince policymakers beyond Alaska that the project is not just necessary, but a vital component in the long-term US gas picture. That’s an exceptionally hard case to make now that so much attention is being paid to shale gas resources which are much closer to major markets. But it could be crucial.

Markets change. The very shale gas resources which look so promising today were considered inaccessible 20 years ago. Technology changed that and they are slowly being developed in many instances. Questions have arisen about impacts in regions where there hasn’t been oil and gas activity previously, but producers, property owners, and state officials are addressing the issues.

Potentially robust demand is a significant variable, particularly if gas emerges as the primary fuel for power generation and an eventual backup to wind, solar, and other alternatives which could contribute significantly, but intermittently. A significant push to reduce US emissions of carbon dioxide would potentially accelerate gas demand growth.

Backers of a gas pipeline from Alaska essentially say that the project could be strategically important and economically sound by the time it would be built and ready to operate. The Obama administration has indicated that it considers the project an important part of its overall energy strategy, but other politicians outside Alaska aren’t talking it about it much these days. The key could be the companies which have put forth the two proposals to build it. So far, all of them are still on board.

Tuesday, December 8, 2009

Why I wrote that USCAP economic impact story

I like it when OGJ readers let me know what they think about my articles and columns. It shows that they care. I also appreciate being told that they think I’m wrong, and why. But my short article last week about the US Climate Action Partnership’s analysis of economic impacts of its own climate change legislation proposals produced some unusually angry e-mails. I think it’s necessary to respond.

I try to tell every side of a story, whether it involves proposals to federally regulate hydraulic fracturing or to penalize federal oil and gas leaseholders if they don’t demonstrate they are diligently developing the tracts they hold. Global climate change is probably the single biggest story I’m covering, and there are some huge differences of opinion about it, particularly the question of whether the United States should institute its own carbon cap-and-trade program in the very near future.

Opponents say that doing so would place what amounts to a heavy tax on US industries, which their foreign competitors wouldn’t bear, in a seriously weakened domestic economy. Proponents say that it would make the US a leader in addressing global climate change by establishing a price on carbon emissions and beginning a real transition from fossil fuels to renewable and alternative energy sources. I was trained to simply report what happens when I write a story and suppress my personal opinions. That doesn’t mean I don’t have any, and that I don’t have to make judgment calls.

That’s what I did with the USCAP cap-and-trade economic analysis story. Although I was not surprised that the examination of its own proposals supported them, I thought that it deserved to be passed on to OGJ readers because the organization is not some narrow special interest group but a coalition of businesses and other organizations which includes three multi-national oil companies: Shell, BP, and ConocoPhillips. The group’s members have said that they believe they need to offer specific proposals to constructively participate in global climate change policy discussions. These include a US cap-and-trade program.

When I spent some time with John Barry, Shell Exploration & Production’s vice president of unconventionals and EOR, a few weeks ago, he acknowledged that other oil companies disagree with Shell’s support of cap-and-trade (notably Exxon Mobil, which has indicated that a carbon tax would be more effective). He also said that Shell believes governments will develop and implement possibly aggressive policies to address climate change, and that the company plans to be a commercial leader in technologies such as carbon capture and storage where it feels it has the most to contribute (and, implicitly, the greatest chance to create a new profit center).

That might surprise Nancy Pelosi, Barbara Boxer, and other congressional leaders who seem to cling to an idea of “Big Oil” as a monolithic entity with companies marching in lock-step. The industry has never been that way, and it certainly isn’t now. Ideas are presented, considered, tried, and adopted or discarded when they succeed or fail. It can be messy, but it has made the oil and gas business grow and prosper. It’s also the best approach for politicians and government regulators (which, regrettably, they don’t always embrace) as they formulate and enforce policies. And it’s what I’ll continue to try and emphasize in my reporting from Washington.

I do periodically fall short, however, so keep your e-mail messages coming. Even when I disagree with what you say, I still appreciate hearing from you.