Sign of the times....

 

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The Oklahoma City energy company plans to divert capital from natural gas development to develop a dozen oil and liquids-rich fields.

 

Chesapeake and other large natural gas producers such as Newfield Exploration Co. (NFX) and EOG Resources Inc. (EOG) are pursuing more oil to boost profit and take advantage of higher prices for oil and natural gas liquids. For example, Chesapeake has amassed 400,000 acres in the Eagle Ford Shale over the last nine months at an oil- and gas-bearing rock formation in South Texas.

 

"That's where the money is," McClendon said in a conference call to discuss the company's first-quarter earnings.

 

Natural gas prices have lost about a third of their value since hitting highs in January of about $6 a million British thermal units as heating demand fades and producers increase drilling activity in prolific onshore natural gas fields known as shales. Oil prices have more than doubled since early 2009 and recently traded near $80 a barrel.

 

"The stage is set for a rejuvenation of the onshore oil business," McClendon said.

 

By Jason Womack, Dow Jones Newswires; 713-547-9201; jason.womack@dowjones.com

 

http://online.wsj.com/article/BT-CO-20100505-712180.html?mod=WSJ_la...

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With special thanks to Angel, we all ought to be getting behind some of the recommendations that this senator is making.

Senator Casey asks federal agency to investigate drilling contamination
Tuesday, April 27, 2010
by Laura Legere
Scranton Times-Tribune
Senator Bob Casey is asking the U.S. Environmental Protection Agency to investigate cases of water contamination related to natural gas drilling in Pennsylvania after a gas company operating in Susquehanna County failed to stop methane from leaking into residents' drinking water.
In a letter Monday to EPA Administrator Lisa Jackson, Mr. Casey said he wants greater EPA involvement in the state because contamination incidents, including methane migration in Dimock Twp., "raise the question of whether the necessary steps have been taken to protect Pennsylvania families and communities against the detrimental side effects of drilling."
The oil and gas industry is largely exempt from federal environmental oversight and is instead regulated by state agencies. In Pennsylvania, the Department of Environmental Protection regulates the industry.
But in a press conference Monday, Mr. Casey said several layers of government oversight may be necessary to ensure drilling is done safely. And he believes the federal environmental agency already has some power to regulate the industry in general - and to investigate the Dimock incident specifically - through the Superfund program and emergency powers outlined in the federal Safe Drinking Water Act.
He wants the EPA to determine its authority under those laws. If the agency finds that it does not have sufficient authority to protect against the hazards of drilling, it should ask Congress for more, he said.
"I have a concern that there isn't enough of a federal responsibility here," he said, "or even if there is the statutory authority, that the federal government hasn't done enough in terms of investigation or action in this area."
Last year, Mr. Casey introduced legislation, called the FRAC Act, that would require the hydraulic fracturing of natural gas wells to be regulated under the Safe Drinking Water Act. It would also require that drilling companies disclose the chemical composition of the fluids they mix with sand and water to break apart - or hydraulically fracture - the gas-bearing rock.
The gas industry maintains that hydraulic fracturing has never been the confirmed cause of drinking water contamination and argues that federal oversight would be an unnecessary burden.
Mr. Casey said Monday that it is possible for gas drilling to be done safely. "We don't have to choose between jobs and the environment, or choose between economic opportunity and protecting families' drinking water," he said.
Victoria Switzer, a Dimock resident whose drinking water has been contaminated with methane, said she and 13 neighbors have had to live with that choice because oversight of the industry was not stringent enough to protect them.
"We've lost our drinking water; there's lots of gas there. That's not a choice people should have to make," she said.
What about converting natgas to liquids as an alternative to drilling for onshore oil, Keith? You can make a diesel-like product or else methanol from it. Both can be used as transportation fuels. --Tom

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