Category Archives: Oil producers

Drilling boom means more harmful waste spills

Repost from the Associated Press

AP Exclusive: Drilling boom means more harmful waste spills

By John Flesher, Sep. 8, 2015 8:45 PM EDT

CROSSROADS, N.M. (AP) — Carl Johnson and son Justin are third- and fourth-generation ranchers who for decades have battled oilfield companies that left a patchwork of barren earth where the men graze cattle in the high plains of New Mexico. Blunt and profane, they stroll across a 1 1/2-acre patch of sandy soil — lifeless, save for a scattering of stunted weeds.

Five years ago, a broken pipe soaked the land with as much as 420,000 gallons of oilfield wastewater — a salty and potentially toxic drilling byproduct that can quickly turn fertile land into a dead zone. The leaked brine killed every sprig of grama and bluestem grasses and shinnery shrubs it touched.

For the Johnsons, the spill is among dozens that have taken a heavy toll: a landscape pockmarked with spots where livestock can no longer graze, legal fees running into the tens of thousands and worries about the safety of the area’s underground aquifer.

“If we lose our water, that ruins our ranch,” Justin Johnson said. “That’s the end of the story.”

Their plight illustrates a largely overlooked side effect of oil and gas production that has worsened with the past decade’s drilling boom: spills of wastewater that foul the land, kill wildlife and threaten freshwater supplies.

An Associated Press analysis of data from leading oil- and gas-producing states found more than 175 million gallons of wastewater spilled from 2009 to 2014 in incidents involving ruptured pipes, overflowing storage tanks and other mishaps or even deliberate dumping. There were some 21,651 individual spills. And these numbers are incomplete because many releases go unreported.

Though oil spills tend to get more attention, wastewater spills can be more damaging. And in seven of the 11 states the AP examined, the amount of wastewater released was at least twice that of oil discharged.

Spilled oil, however unsightly, over time is absorbed by minerals in the soil or degraded by microbes. Not so with the wastewater, also known as brine, produced water or saltwater. Unless thoroughly cleansed, a costly and time-consuming process, salt-saturated land dries up. Trees die. Crops cannot take root.

“Oil spills may look bad, but we know how to clean them up and … return the land to a productive state,” said Kerry Sublette, a University of Tulsa environmental engineer and specialist in treating the despoiled landscapes. “Brine spills are much more difficult.”

In addition to the extreme salinity, the fluids often contain heavy metals such as arsenic and mercury, plus radioactivity. Even smaller discharges affecting an acre or two gradually add up for landowners — “death by a thousand bee stings,” said Don Shriber of Farmington, New Mexico, a cattleman who wrangled with an oil company over damage.

For animals, the results can be fatal. Ranchers, including Melvin Reed of Shidler, Oklahoma, said they have lost cattle that lapped up the liquids or ate tainted grass.

“They get real thin. It messes them up,” Reed said. “Sometimes you just have to shoot them.”

The AP obtained data from regulatory agencies in Texas, North Dakota, California, Alaska, Colorado, New Mexico, Oklahoma, Wyoming, Kansas, Utah and Montana — states that account for more than 90 percent of the nation’s onshore oil production. Officials in ninth-ranking oil producer Louisiana and second-ranking gas producer Pennsylvania said they could not provide comprehensive spill data.

The spill total increased each year, along with oil and gas production. In 2009, there were 2,470 reported spills in the 11 states; by 2014, the total was 4,643. The amount of wastewater spilled doubled from 21.1 million gallons in 2009 to 43 million in 2013 before dipping to 33.5 million last year.

The extent of land or water contamination is unknown; state and federal regulators make no such assessments. Texas, the nation’s biggest oil and gas producer, had the most incidents, 4,783, and the highest volume spilled, 62 million gallons.

Industry groups and regulators said much of the waste is recovered during cleanup operations or contained by berms near wells. Still, they acknowledged a certain amount soaks into the ground and can flow into waterways.

“You’re going to have spills in an industrial society,” said Katie Brown, spokeswoman for Energy In Depth, a research and education arm of the Independent Petroleum Association of America. “But there are programs in place to reduce them.”

Wastewater spills have dogged the oil industry from its earliest days more than a century ago, borne witness by barren sites from the Great Plains to the Pacific. A notorious symbol is the “Texon scar,” where brine from a well drilled in 1923 near that tiny West Texas town created a desolate 2,000-acre swath dotted with dead mesquite trees. Efforts to restore the land continue to this day, said range conservationist Joe Petersen.

Concentrated brine, much saltier than seawater, exists naturally in rock formations thousands of feet underground, a remnant of prehistoric oceans. When oil and gas are pumped to the surface, the water comes too, along with fluids and chemicals injected to crack open rock — the process known as hydraulic fracturing. Production of methane gas from coal deposits also generates wastewater, but it is less salty and harmful.

The spills usually occur as oil and gas are channeled to metal tanks for separation from the wastewater, and the water is delivered to a disposal site — usually an injection well that pumps it back underground. Pipelines, tank trucks and pits are potential weak points.

Accidents range from the mundane to the freakish; in 2010, a storage tank near Ardmore, Oklahoma, overflowed after a snake slithered into a panel box and blew a fuse. Most spills are caused by equipment malfunction or human error, according to state reports reviewed by the AP.

Though no full accounting of damage exists, the scope is sketched out in a sampling of incidents:

— In North Dakota, a spill of nearly 1 million gallons in 2006 caused a massive die-off of fish, turtles and plants in the Yellowstone River and a tributary. Cleanup costs approached $2 million. Two larger spills since then scoured vegetation along an almost 2-mile stretch and fouled a creek and a river.

— Wastewater from unlined pits seeped beneath a 6,000-acre cotton and nut farm near Bakersfield, California, and contaminated groundwater. Oil giant Aera Energy was ordered in 2009 to pay $9 million to grower Fred Starrh, who had to remove 2,000 acres from production.

— Brine leaks exceeding 40 million gallons over decades on the Fort Peck Indian Reservation in Montana polluted a river, private wells and the municipal water system in Poplar. “It was undrinkable,” said resident Donna Whitmer. “If you shook it up, it’d look all orange.” Under a 2012 settlement with the U.S. Environmental Protection Agency, oil companies paid $320,000 for new water wells and other improvements. Drinking water tainted with oilfield brine can cause high blood pressure, dehydration and other health risks, EPA spokeswoman Sarah Teschner said.

— In Fort Stockton, Texas, officials in February accused oil company Bugington Energy of illegally dumping 3 million gallons of wastewater in pastures. Paul Weatherby, general manager of the Middle Pecos Groundwater Conservation District, said he fears contamination of the area’s groundwater table. The district levied a $130,000 fine but the company hasn’t paid, contending the district overstepped its authority.

— A pipeline joint failure caused flooding on Don Stoker’s ranch near Snyder, Texas, in November 2012 and turned his hackberry shade trees into skeletons. Vacuum trucks sucked up some saltwater and the oil company paid damages, but Stoker said his operation was in turmoil. “I had to stay out there three days and watch them while they were getting the saltwater out, to make sure they didn’t totally destroy the whole area.”

Government agencies acknowledge having a limited view of the accidents, which often happen in remote places and, unlike oil spills, don’t produce dramatic images of birds flailing in black goo and tourist beaches fouled. Regulators rely on private operators to notify them, and it’s not always required. For example, Oklahoma exempts reporting of most spills of less than 10 barrels, or 420 gallons.

The loudest whistleblowers are often property owners, who must allow drilling access to their land if they don’t own the mineral rights.

“Most ranchers are very attached to the land,” said Jeff Henry, president of the Osage County Cattlemen’s Association in Oklahoma. “It’s where we derive our income, raise our families. It’s who we are.”

A big reason why there are so many spills is the sheer volume of wastewater extracted: about 10 barrels for every barrel of oil, according to an organization of state ground water agencies, or more than 840 billion gallons a year.

Sometimes, the exact cause is never determined. The Johnsons have yet to learn why an underground line ruptured in at least two places on the state-owned land they lease for ranching. A salty, oily odor wafted heavily on the breeze when Justin Johnson reached the site in October 2010.

“I was just totally and thoroughly disgusted,” he said.

New Mexico Salt Water Disposal Co. acknowledged responsibility. No fines were levied because the leak was accidental. Vice President Rory McGinn blamed practices and materials the company no longer uses, saying in an interview that “an enormous amount of money” has gone into upgrades.

The company said much the same in 2005 after earlier spills, telling the state in a letter obtained through a records request it had spent nearly $250,000 on higher-grade pipe, tanks and valves and “our objective and goal is to be 100 percent maintenance and environmentally safe in our operation.”

The company has had a dozen spills since 2003, said Larry Behrens of the New Mexico Department of Energy, Minerals and Natural Resources.

Despite such incidents, relatively few farmers and ranchers complain publicly. Some get royalty checks for wells on their property. Others don’t want to be seen as opposing an industry that is the economic backbone of their communities.

“If they treat us right, we’re all friends of oil,” said Mike Artz, a grower in North Dakota’s Bottineau County who lost a five-acre barley crop in 2013 after a saltwater pipeline rupture. “But right now, it’s just a horse running without the bridle.”

Oil and gas developers said they have everything to gain from stopping spills, which cost them money for cleanup and soil restoration.

Sara Hughes, spokeswoman for pipeline operator Kinder Morgan, said her company has lowered water injection pressure and installed additional leak-detection devices on its lines since its spill on Stoker’s land.

“We are committed to public safety, protection of the environment and operation of our facilities in compliance with all applicable rules and regulations,” Hughes said.

In North Dakota, where the spills increased at a higher rate than the well count during the boom years of 2009-’14, pipelines near waterways must have leak prevention devices but not those elsewhere; critics said that shows the oil industry’s political clout. Lynn Helms, director of the North Dakota Department of Mineral Resources, said more devices would be costly and wouldn’t necessarily catch small leaks.

Tessa Sandstrom, of the North Dakota Petroleum Council, said the industry is cooperating with scientists studying prevention and land restoration. When spills do happen, she said, most are cleaned up within a year.

But Bottineau County grain farmer Daryl Peterson said it took years of prodding before regulators ordered an oil company to dig up 300 truckloads of tainted soil on his property and replace it. The soil is still salty, he said.

Sublette, the University of Tulsa engineer, said soil excavation and replacement is unreliable because some operators “bring in the nastiest stuff they can find.” He recommends extensive flushing with fresh water to remove salts from the zone where plants take root, then rebuilding the soil with nurturing additives. Even done correctly, it can take years to get plants growing again.

Similar methods were used on the Johnsons’ pastures, but father and son said the land has not come back to life.

“It will never, ever be like it was,” Justin Johnson said, giving a bleached-white stone a desultory kick. “It will never fully recover.”

___

This story has been corrected to reflect a change in the overall spill number to more than 175 million gallons instead of more than 180 million gallons, and to correct the total spill volume for 2014 to 33.5 million.

___

Associated Press Data Journalist Dan Kempton in Phoenix contributed to this report.

Oil bust claims first casualties – Hercules Offshore

Repost from MySanAntonio.com

Hercules Offshore files bankruptcy with plan to convert debt

By Bloomberg, August 13, 2015
Several Texas oil and gas producers have either filed for Chapter 11 bankruptcy protection or have missed interest payments and are heading toward restructuring.
Several Texas oil and gas producers have either filed for Chapter 11 bankruptcy protection or have missed interest payments and are heading toward restructuring. Photo: James Durbin

Hercules Offshore Inc., owner of the largest fleet of shallow-water drilling rigs in the Gulf of Mexico, filed for bankruptcy with a plan to be taken over by senior creditors.

The company said it planned to use the bankruptcy process to implement a proposal, announced in July, to cut $1.2 billion in debt. The plan calls for investors to trade their senior notes for almost 97 percent of Hercules’s equity.

Some noteholders would also lend the company $450 million to help finish building a new oil-drilling rig, the company said in a statement.

Under the plan, current shareholders would have a chance to split the 3 percent of the company not going to noteholders, Hercules said. The plan must be approved by a bankruptcy judge in Wilmington, Delaware, where the case was filed Thursday.

Hercules, which leases rigs to oil and gas producers, said the plan has the “overwhelming” support of the noteholders.

The Houston-based company, formed in 2004 as a small gulf driller, has a fleet of 27 jack-up rigs and 21 lift boats.

Flagging Demand

Demand for both U.S. and international business has flagged as the price of oil has plunged. Drillers around the world have also been suffering from a glut of new sophisticated vessels displacing older rigs in the market. Cal Dive International Inc., a contractor that does manned diving and platform installation, sought creditor protection in March.

Debt issues by Hercules and fellow Houston-based drilling rig provider Paragon Offshore were among the worst-performing oil and gas service bonds in the high-yield energy index in the first quarter of 2015, according to Bloomberg Intelligence analysts Spencer Cutter and Yuanliang Huang.

The number of rigs operating in the U.S. Gulf of Mexico has fallen by more than half from last year’s high of 63 in August, according to Baker Hughes Inc.

Hercules listed liabilities of $1.3 billion and $546 million in assets as of Aug. 11.

The case is In re Hercules Offshore Inc., 15-11685, U.S. Bankruptcy Court, District of Delaware (Wilmington).

As California pumps out oil, Gov. Brown says world must cut back

Repost from The San Francisco Chronicle (SFGate)
[Editor:  The San Francisco Chronicle ran three (!) stories on the Vatican Conference on climate change, including two rather stiff challenges to California Governor Jerry Brown.  See below for one.  See also: Editorial-A climate pilgrimage, …and Mayor touts city’s green vehicles at pope’s event.  – RS]

As California pumps out oil, Gov. Brown says world must cut back

By David R. Baker, July 21, 2015 4:02 pm
Gov. Jerry Brown delivers his speech during the conference at the Vatican. Photo: Gregorio Borgia, Associated Press
Gov. Jerry Brown delivers his speech during the conference at the Vatican. Photo: Gregorio Borgia, Associated Press (1st of 10 images – click for more).

One-third of the world’s oil must stay in the ground if humanity hopes to avoid the worst effects of global warming, Gov. Jerry Brown told a climate conference at the Vatican Tuesday.

“We are going to have to set a clear goal,” Brown told a crowd of mayors and public officials from around the world. “And that goal is almost unimaginable. One-third of the oil that we know exists as reserves can never be taken out of the ground. Fifty percent of the gas can never be used and over 90 percent of the coal. Now, that is a revolution.”

For an American politician of Brown’s stature, it was a rare statement. Even those who acknowledge the threat of climate change prefer not to address the idea that tapping all of the world’s known fossil fuel reserves would trigger catastrophic levels of warming, a notion widely embraced in the environmental movement.

But Brown’s comment was particularly noteworthy for another reason.

California, for all its efforts to fight climate change, remains America’s third-largest oil producing state, out-pumped only by Texas and North Dakota. And while Brown wants to cut California’s use of oil by 50 percent in the next 15 years, he has generally supported oil production within the state’s borders.

Brown has for years refused to ban hydraulic fracturing, preferring to regulate it instead. He has argued that finding a way to tap the oil trapped within California’s Monterey Shale formation could produce an economic boom for the state. His stance has infuriated many environmentalists, even as they laud his efforts to boost renewable power and reduce greenhouse gas emissions.

So Brown’s comments, at the Vatican global symposium on climate change and modern slavery, raised a few eyebrows back home.

“We agree, fossil fuels need to stay in the ground,” said Kassie Siegel of the Center for Biological Diversity, one of the environmental groups pushing for a fracking ban. “That’s why Gov. Brown can’t be a climate leader and expand fossil fuel production in his own state. Climate leaders do not frack.”

Brown urged the gathered mayors to push for climate action within their own countries, saying they needed to “light a fire” under their national leaders. And he took aim at opponents of such action, saying they were “bamboozling” the public with a well-financed disinformation campaign.

“We have very powerful opposition that, in at least my country, spends billions on trying to keep from office people such as yourselves and elect troglodytes and other deniers of the obvious science,” Brown said.

TAKEAWAY: The Human Cost of America’s Energy Boom

Repost from The Takeaway
[Editor: This Takeaway report is a good summary of the lengthy investigative report by Reveal / Center For Investigative Reporting, which is also highly recommended.  – RS]

The Human Cost of America’s Energy Boom

By Arwa Gunja and Jillian Weinberger, June 15, 2015
A gas flare is seen at an oil well site on July 26, 2013 outside Williston, North Dakota. (Andrew Burton/Getty)

Over the last decade, the United States has undergone an economic transformation in energy production. As President Obama told Congress in his 2014 State of the Union address, “Today America is closer to energy independence than we have been in decades.”

The United States has surpassed even Saudi Arabia in oil and gas production, in part because of fracking technology, which allows energy companies to reach oil and gas deposits they could never access previously.

One of those deposits lies in the Bakken oil fields, which stretches 170 square miles from North Dakota to Montana and into Canada. An estimated 7.4 billion barrels of undiscovered oil are sitting under the U.S. portion of the Bakken, and thanks to fracking, the industry now has the technology extract that oil.

Workers have flocked to the Bakken for jobs with six-figure salaries that don’t require advanced degrees. But a new investigation from Reveal, a public radio program from the Center for Investigative Reporting, finds that those high-paying jobs come with a high price.

In the first comprehensive analysis of its kind, Reveal found that, on average, a worker dies about every six weeks from an accident in the Bakken, with at least 74 deaths in the oil fields since 2006.

Jennifer Gollan, a reporter with Reveal, led the investigation. She says that the top energy firms may be championing speed over safety—something that was seen in September 2011 after a well owned by Oasis Petroleum exploded in North Dakota.

“The supervisor on this well was congratulated for working quickly and setting a new drilling record” months before the explosion, says Gollan. “She went on to call this record-holding well a ‘pace-setter.'”

Oasis offered workers daily bonuses of $150 for drilling quickly—those who drill slower and safer are only offered $40 a day.

“Safety is tantamount at Oasis,” spokesman Brian Kennedy told Gollan. “Bonuses should not have been paid, and we regret that they were.”

The day before the explosion in 2011, Gollan says that a crew of four men were brought on site to get the well to produce more oil.

According to documents from the Occupational Safety and Health Administration (OSHA), a supervisor had pumped heavy salt water into the well to prevent volatile gases from escaping before the crew set to work the next day. But the well wound up erupting into a fireball.

View of three oil wells and flaring of natural gas on The Fort Berthold Indian Reservation near New Town, ND on August 13, 2014. (Linda Davidson/The Washington Post/Getty)

Jebadiah “Jesse” Stanfill bared witness to the events of the day.

“He was working on an oil rig less than a mile away,” says Gollan. “He was near the top of the rig when he heard this boom. He spun around, grabbed a fire extinguisher and first aid kit, and jumped in this truck with two co-workers.”

But Stanfill and his friends were too late—two men had died and two others were injured.

“As Jesse was helping to pick up some of these men to load them into the bed of this pick up truck to bring them to the ambulance, some of the men’s skin came off in his hands,” says Gollan. “That is a feeling that, to this day, he just can’t shake.”

Gollan says that Stanfill has gear to protect himself from that horrific memory—he is usually wearing gloves, even when he’s playing with his children or cooking in the kitchen.

“How can a simple thing like looking at your hands or washing your hands send you completely enveloped back to that day,” Stanfill told Gollan. “The scenery changes. It’s as if I’m there. It rules my life.”

Brendan Wegner was one of the men who died in the well explosion.

“He was just 21. It was his first day on a rig,” says Gollan. “He was scrambling down the derrick ladder when the well exploded. It consumed him in this fiery tornado of oil and petroleum vapors. Rescuers later found his body pinned under this heap of twisted metal. His charred hands were recovered later still gripping the derrick ladder.”

Another man named Ray Hardy died the next day from his injuries. Michael Twinn had his lower legs amputated after the explosion. He committed suicide two years later.

“There was just one lone survivor who was burned over half of his body,” Gollan says of a man named Doug Hysjulien.

It appears that the victims of this explosion are the casualties of a flawed system.

“OSHA regulators will tell you that they often have to rely on a part of the law called the general duty clause,” says Gollan. “Basically, it makes it very difficult for them to hold top energy producers accountable because they typically don’t have direct employees on these well sites. As a result, in many of these cases, the top energy producers are not fined. It’s the subcontractor—typically the company that employs these workers—that get fined.”

Four of America’s largest energy-producing states—Texas, Louisiana, New Mexico and Wyoming—have adopted statutes that prevent or limit oil companies from shifting liability to smaller contractors.

Wyoming set up a task force to address worker safety back in 2008, a move that started the Wyoming Oil and Gas Industry Safety Alliance. Between 2008 and 2012, the state saw a 45 percent decrease in the number of worker deaths in the oil and gas industry.

Click on the audio player above to hear Jack Bedessem, the past president and advisor to the board of the Alliance, explain how Wyoming is working to improve worker safety, especially in the oil and gas industry.