http://www.businessweek.com/ap/financialnews/D9S5NL4G0.htm

By PETER ORSI

HAVANA
A U.S. inspection of a Chinese-made oil rig due to begin drilling in waters off Cuba has determined that it meets international safety norms, the American government said Monday.

A statement issued by the U.S. Department of the Interior said members of its Bureau of Safety and Environmental Enforcement and the U.S. Coast Guard completed its review of the Scarabeo-9 rig on Monday in Trinidad.

The inspection covered everything from the platform’s drilling equipment and safety systems to generators and the blowout preventer.

“U.S. personnel found the vessel to generally comply with existing international and U.S. standards by which (Spanish oil company) Repsol has pledged to abide,” the safety bureau said in a statement.

Plans to drill for oil off Cuba have raised concerns from some environmentalists and U.S. politicians who fear a repeat of the 2010 Deepwater Horizon disaster, which killed 11 workers and spilled more than 200 million gallons of oil into the Gulf of Mexico.

Repsol YPF, which holds the rights to an exploration block off Cuba covering more than 1,700 square miles (nearly 4,500 square kilometers), has repeatedly said the Scarabeo-9 meets U.S. specifications and technical requirements. Havana officials say it boasts the safest, most modern technology available.

The safety bureau added that neither it nor the Coast Guard have any authority over the Cuba operation, and noted that the review “does not confer any form of certification or endorsement under U.S. or international law.”

It also said U.S. authorities are stepping up local spill-preparedness efforts and coordinating with other countries in the region.

“In anticipation of an increase in drilling activities in the Caribbean Basin and Gulf of Mexico, the United States is participating in multilateral discussions with the Bahamas, Cuba, Jamaica and Mexico on a broad range of issues including, drilling safety, ocean modeling, and oil spill preparedness and response,” the statement said.

Special thanks to Richard Charter

http://www.cbsnews.com/8301-18563_162-57352556/ohios-new-earthquakes-may-be-man-made/?tag=cbsnewsSectionContent.0

January 4, 2012
By Michelle Miller

(CBS News) Northeastern Ohio has been rattled by close to a dozen earthquakes since last spring. It’s not an area that is known for them.

Now, CBS News correspondent Michelle Miller reports that an expert on quakes says he believes they may have been man-made.

John Armbruster is a seismologist at Columbia University. Before March, there had never been a recorded earthquake in Youngstown, Ohio. Since then, there’s been 11.

Residents call the new phenomenon “an experience.”

The new earthquakes caused Ohio state officials to ask Armbruster to investigate.

“These earthquakes were sitting there waiting to happen. We have triggered these earthquakes,” Armbuster said.

Armbruster believes the trigger was a Youngstown well that disposes of contaminated water trucked in from elsewhere in Pennsylvania and beyond. The water is a byproduct of oil and natural gas extraction, called “fracking.”

The disposal well pumps thousands of gallons of the waste into rock a mile or more below. Armbruster says the fluid may have made its way into an earthquake fault line.

“Pumping the fluid into the fault encourages the fault to slip,” Armbruster said.

Armbruster added that seismic readings allowed him to pinpoint the epicenter of a quake near the Youngstown well.

“It was about a kilometer from the bottom of the disposal well,” Armbruster said.
Drilling companies and some scientists are skeptical. 177 similar wells in Ohio have operated without incident, and the technique has been used since the 1930s at more than 100,000 wells across the nation.

“It’s happened with regulatory certainty, regulatory excellence, and it’s the best way to take care of this waste stream,” said Tom Stewart with the Ohio Oil and Gas Association.

Clusters of small earthquakes near wells in Oklahoma, Texas and Arkansas have also drawn scrutiny.

“First of all, the location of the earthquakes is quite close to the wells. Secondly, the timing of the waste water injection also coincides with the earthquakes,” said Art McGarr with the U.S. Geological Survey. Arkansas has suspended new wells near a fault line after 1,000 minor quakes were recorded. As for Ohio, officials say they’ll keep the Youngstown, Ohio, well closed until they can be certain of the risks.
© 2012 CBS Interactive Inc.. All Rights Reserved.

Special thanks to Richard Charter

January 05, 2012, 11:28 PM EST
By Alex Wayne and Katarzyna Klimasinska
Jan. 5 (Bloomberg) —

The U.S. should study whether hydraulic fracturing used to free natural gas from wells is a hazard to people or food sources, a top official at the Centers for Disease Control and Prevention said. The Environmental Protection Agency, which is preparing regulations to govern fracking with the Interior Department, plans to study the effect of the drilling procedure, also known as fracking, on drinking water. Additional studies should examine whether wastewater from the wells can harm people or animals and vegetables they eat, said Christopher Portier, director of the CDC’s National Center for Environmental Health and Agency for Toxic Substances and Disease Registry.

“We do not have enough information to say with certainty whether shale gas drilling poses a threat to public health,” he said in an e-mail sent by Vivi Abrams, a spokeswoman. President Barack Obama has lauded increased natural gas drilling as a way to reduce U.S. dependence on foreign oil and on coal, which is more damaging to the environment when burned. Officials in his administration have been cautious when discussing possible health effects of hydraulic fracturing.

The EPA “will use its authorities to protect local residents if a driller endangers water supplies and the state and local authorities have not acted,” the agency’s administrator, Lisa Jackson, told Congress in May. Obama, she said, “has made clear that we need to extract natural gas without polluting our water supplies.”

Monitor Exposure
The fracking process injects water, sand and chemicals into deep shale formations to free natural gas. The compounds used should be monitored, Portier said, and drinking water wells should be tested before and after drilling. Studies also should address “all the ways people can be exposed” to fracking products, including through air, water, soil, plants and animals. Increased use of the process has raised gas production, reduced prices 32 percent last year and spurred questions about the environmental effects.
The U.S. has sought to dismiss a lawsuit brought by New York Attorney General Eric T. Schneiderman against federal agencies, seeking stronger regulation of fracking at as many as 18,000 wells in his state. The petroleum industry says the lawsuit could shut down drilling in the Delaware River Basin “for many years to come” if successful.

‘Effective’ Regulation
“Measures required by state regulatory agencies in the exploration and production of deep shale natural gas and oil formations have been very effective in protecting drinking water aquifers from contamination attributable to fracking,” Chesapeake Energy, the second-largest producer of natural gas, said in a document in September explaining the process.

Portier wouldn’t say whether fracking should be stopped or more tightly regulated until studies are completed. “Our role is to determine what the risks are, and it is up to the public to decide if they are OK with that risk,” he said. U.S. natural gas production rose to a record 2.5 trillion cubic feet in October, a 15 percent increase from October 2008, the month before Obama was elected, according to an Energy Information Administration report issued Dec. 28.

Some “data of concern” are showing up at fracking sites, Portier said. Fluids used in drilling contain “potentially hazardous chemical classes” including petroleum distillates, volatile organic compounds and glycol ethers. Wastewater may also contain salts and be radioactive, he said.

In December, the EPA said for the first time that it had found chemicals consistent with those used in drilling in groundwater near wells in Wyoming. The driller, Encana Corp., has disputed the agency’s findings.

Methane, Earthquakes
Pennsylvania regulators warned residents near Scranton not to drink well water in September 2010 after methane was detected in the Susquehanna River and in wells near drilling sites.

Youngstown, Ohio residents say they’ve experienced earthquakes since D&L Energy Inc. began injecting fracking wastewater into a 9,300-foot disposal well. Ben Lupo, president and chief executive officer of the company, said he doesn’t think his well is causing the temblors. While the federal government prepares fracking regulations, states also monitor the process, which has led the industry to complain of unnecessary supervision.

The Obama administration is pursuing “an incoherent approach to natural gas development” by promoting its benefits while “ratcheting up pressure for new layers of duplicative regulations,” said Jack Gerard, president of the American Petroleum Institute, in remarks prepared for a speech today. The institute represents more than 490 energy companies including Exxon Mobil Corp., the world’s largest company by market value.

–With assistance from Jim Snyder in Washington. Editors: Adriel Bettelheim, Andrew Pollack
To contact the reporters on this story: Alex Wayne in Washington at awayne3@bloomberg.net; Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net. To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

Special thanks to Richard Charter

The Florida Current

A bill that would seem to encourage more seismic exploration and new oil drilling in state parks and forests to generate state revenue has been filed in the Florida Legislature.

HB 695 would allow state land management agencies to enter into partnerships with businesses to produce oil and gas. The Cabinet, which oversees the use of state lands, must approve any such public-private partnership agreement.

The bill was filed in November by Rep. Clay Ford, R-Pensacola, chairman of the House Federal Affairs Subcommittee and former chairman of the House Energy & Utilities Subcommittee.

No distinction was made in the bill as to which state lands would be off limits to exploration and drilling. Ford and Sen. Greg Evers, R-Crestview and sponsor of the Senate companion bill (SB 1158), did not respond to calls on Thursday seeking comment.

The bills haven’t been heard by any committees. However, they are raising concerns among environmental group representatives.

Although the fight over drilling in Florida for decades has focused on the Gulf of Mexico, oil wells have existed for decades in the Florida Panhandle and southwest Florida. There are 119 wells in Santa Rosa and Escambia counties in the Panhandle and 36 wells in Lee, Collier and Hendry counties in Southwest Florida, according to the Florida Department of Environmental Protection.

There is seismic exploration now at Blackwater River State Forest in Santa Rosa and Okaloosa counties, said Sterling Ivey, a spokesman for the Florida Department of Agriculture and Consumer Services.

A DEP spokeswoman said three permitted wells in Blackwater River State Forest are being plugged and abandoned and the sites restored.

HB 695 by Ford states that exploration and drilling on state lands may produce “significant” monetary reward. And the bill says new seismic exploration along with directional and horizontal drilling is more thorough and productive than older methods of drilling and exploration.

The bill is raising concerns among environmentalists because it makes no reference to environmental safeguards nor any distinction about which state lands could be used for exploration and drilling.

David Cullen of Sierra Club Florida said the bill represents an “irresponsible gamble” for short-term monetary game as reflected by the Gulf oil spill in 2010. He said spills could damage state lands for decades and harm the economies of neighboring communities.

Audubon of Florida’s Julie Wraithmell said she doesn’t know whether the bill was written to address a particular parcel of state land, such as Blackwater River State Forest.

“I would hesitate to say unilaterally that no drilling on state-owned lands is appropriate,” Wraithmell said. “But I do think conservation lands should be held to a very high standard, and I think there is an argument to be made that it [drilling] is not appropriate.”
Florida Petroleum Council Executive DirectorDavid Mica mentioned during an interview Wednesday about the Vote4energy.orgcampaign that his group supports the bill along with HB 87 and SB 1188.

HB 87 and SB 1188 would create a tiered tax system to encourage production from “mature” oil fields. During a House Energy & Utilities Committee hearing in December on HB 87, bill sponsor Rep. Matt Hudson, R-Naples, said production from those old wells had not caused ecological harm.

Mica could not be reached on Thursday to discuss his group’s support for HB 695 by Ford. Neither DACS nor the Florida Department of Environmental Protection have taken positions on the bill.

Reporter Bruce Ritchie can be reached at britchie@thefloridacurrent.com.

Special thanks to Richard Charter.

>
> Proposed Western Planning Area Lease Sales 229, 233, 238, 246, and 248 and
> Proposed Central Planning Area Lease Sales 227, 231, 235, 241, and 247
>
> The U.S. Department of the Interior, Bureau of Ocean Energy Management (BOEM) announces the availability of the draft environmental impact statement (EIS) for 10 proposed Outer Continental Shelf (OCS) oil and gas lease sales in the Western Planning Area (WPA) and Central Planning Area (CPA) of the Gulf of Mexico. These proposed lease sales are scheduled for 2012-2017 in the proposed Outer Continental Shelf Oil and Gas Leasing Program: 2012-2017. The BOEM is proposing to offer for oil and gas leasing approximately 21.2 million acres in the WPA, excluding whole and partial blocks within the boundary of the Flower Garden Banks National Marine Sanctuary and whole and partial blocks that lie within the former Western Gap and are within 1.4 nautical miles north of the continental shelf boundary between the U.S. and Mexico. The BOEM is also proposing to offer for oil and gas leasing approximately 38.6 million acres in the CPA, excluding blocks that were previously included within the Eastern Planning Area and are within 100 miles (161 kilometers) of the Florida coast blocks east of the Military Mission line (86 degrees, 41 minutes West longitude) under an existing moratorium until 2022, as a result of the Gulf of Mexico Energy Security Act of 2006 (December 20, 2006) blocks that are beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap and whole and partial blocks that lie within the former Western Gap and are within 1.4 nautical miles north of the continental shelf boundary between the U.S. and Mexico.
>
The BOEM published in the February 9, 2011, Federal Register, a Notice of Intent (NOI) to prepare an EIS. The NOI sought input on the scope of the EIS, which covered oil and gas lease sales tentatively scheduled in 2012-2017 in the WPA and CPA offshore the States of Texas, Louisiana, Mississippi, and Alabama. The BOEM published in the December 30, 2011, Federal Register, a NOA of a Draft EIS for five proposed annual areawide lease sales scheduled for the WPA and five proposed annual areawide lease sales scheduled for the CPA. The proposed WPA lease sales are Lease Sale 229 in 2012, Lease Sale 233 in 2013, Lease Sale 238 in 2014, Lease Sale 246 in 2015, and Lease Sale 248 in 2016 the proposed CPA lease sales are Lease Sale 227 in 2013, Lease Sale 231 in 2014, Lease Sale 235 in 2015, Lease Sale 241 in 2016, and Lease Sale 247 in 2017. This Draft Multisale EIS also analyzes relevant new information regarding the Deepwater Horizon event.
>
The BOEM will hold public meetings to obtain comments regarding the Draft Multisale EIS. The meetings are scheduled as follows:

> • Houston, Texas: January 10, 2012, Houston Airport Marriott at George Bush Intercontinental, 18700 John F. Kennedy Boulevard, Houston, Texas 77032, beginning at 1:00 p.m. CDT

> • New Orleans, Louisiana: January 11, 2012, Bureau of Ocean Energy Management, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123, beginning at 1:00 p.m. CDT and

> • Mobile, Alabama: January 12, 2012, Five Rivers—Alabama’s Delta Resource Center, 30945 Five Rivers Boulevard, Spanish Fort, Alabama, beginning at 1:00 p.m. CST.
>
Federal, State, and local government agencies and other interested parties are requested to send their comments on the Draft Multisale EIS no later than February 15, 2012, in one of the following two ways:

> 1. In an envelope labeled “Comments on the Multisale Draft EIS” to Mr. Gary D. Goeke, Chief, Regional Assessment Section, Office of Environment (MS 5410), Bureau of Ocean Energy Management, Gulf of Mexico OCS Region, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394 and

> 2. BOEM email address: MultisaleEIS@BOEM.gov.

> Because this Draft Multisale EIS is over 2,000 pages, BOEM will be distributing a very limited number of paper copies. In keeping with the Department of the Interior’s mission of protection of natural resources, and to limit costs while ensuring availability of the document to the public, BOEM will primarily distribute digital copies of the EIS on compact discs. However, if you require a paper copy, BOEM will provide one upon request.

> 1. You may obtain a copy of this Draft Multisale EIS (either on CD-ROM or a printed version) from the Bureau of Ocean Energy Management, Gulf of Mexico OCS Region, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394, Attention: Public Information Office (MS 5034), 1201 Elmwood Park Boulevard, Room 250, New Orleans, Louisiana 70123-2394 (1 800-200-GULF).

> 2. You may download or view the Draft Multisale EIS on > BOEM’s website at > http://www.boem.gov/Environmental-Stewardship/Environmental-Assessment/NEPA/nepaprocess.aspx.

> If you have any questions, please call Mr. Gary D. Goeke at (504) 736-3233.
Special thanks to Richard Charter