Fuel Fix: Black Elk Energy: Fatal fire hit finances, production

http://fuelfix.com/blog/2013/08/16/black-elk-energy-fatal-fire-hit-finances-production/

Posted on August 16, 2013 at 7:30 am by Jennifer A. Dlouhy in Gulf of Mexico, Offshore

Houston-based Black Elk Energy says it is still dealing with financial fallout from last year’s fatal explosion at one of its Gulf of Mexico production platforms, even as federal investigators continue to probe the company’s overall safety.

The company said the accident hurt its financial results, that oil production slowed when the accident led to delays in obtaining permits for ordinary maintenance work and that it spent more than expected for “non-recurring regulatory, legal and platform restoration costs” tied to the incident. Black Elk provided the updates in investor guidance for the second half of 2013.

The company forecast that for July through December of this year, its daily production will average 13,500 to 14,500 barrels of oil equivalent, capital expenditures will be $45 million to $55 million and earnings before interest, taxes, depreciation and amortization will be $75 million to $85 million.

Legal fallout: Oil platform owner sued over blast in Gulf

Three people died and several others were injured in the explosion and fire last Nov. 16 at Black Elk’s West Delta 32 production platform 18 miles off the Louisiana coast. The federal Bureau of Safety and Environmental Enforcement still is probing the incident, but the company has said a cutting torch may have ignited flammable vapors on the platform standing in 56 feet of water. Black Elk Energy has promised to release the report from a third-party investigation the company commissioned.

At the safety bureau’s request, Black Elk Energy gave the federal regulators a “performance improvement plan” last December and submitted an analysis of its previous violations in January. Facilities that were not producing at the time of the explosion were forced to stay offline temporarily .

The firm had racked up more than 300 documented mistakes and violations offshore before the fatal fire, and a safety bureau official said Thursday that the rates of those incidents – called incidents of non-compliance – have not declined since.

“We still have a lot of concerns,” the official said, who spoke on condition of anonymity because the investigation is ongoing.

“Black Elk has met most of the requirements that were stipulated,” the official said, but the company “has not done enough to demonstrate to us that their overall performance is improving to the point we think it should be.”

Related story: Black Elk CEO vows vindication

Regulators have not given Black Elk Energy approval to resume production at its damaged platform, but they allowed repairs to begin in May. Those repairs are complete, the company said in a statement, adding:
“Over the past eight months, Black Elk officials, staff and advisers have worked cooperatively with government officials at the local, state and federal level to provide support for the victims and their families, analyze the underlying causes of the incident and implement policy and procedural improvements to minimize the risk of similar incidents in the future.”

The company otherwise had no response to the comments from the regulatory official.
The Black Elk explosion was the first in a recent spate of accidents in shallow Gulf of Mexico waters that have revived concerns about the risks of oil and gas production close to shore.

Last month, a gas well in the Gulf of Mexico blew out, forcing the evacuation of 44 workers and igniting a fire that raged for nearly two days.

Just weeks before, a briny mix of gas, light condensate and salt water began leaking out of a 40-year-old Energy Resource Technology well while workers were trying to permanently plug it.

Founded in 2007 by a former BP and Amoco executive, Black Elk now holds interests in more than 1,000 wells connected to 176 platforms in the Gulf of Mexico. It has been operating facilities in the Gulf of Mexico since 2010.

Its aggressive acquisition strategy has focused on buying old facilities and reworking offshore wells to eke out more hydrocarbons.

Special thanks to Richard Charter

CBS News: Fishermen concerned about industry if fracking approved

http://www.cbc.ca/news/canada/newfoundland-labrador/story/2013/08/15/nl-fracking-port-au-port-815.html
Posted: Aug 15, 2013 2:40 PM NT Last Updated: Aug 15, 2013 6:02 PM NT

West coast fishermen wary of possible problems

Port au Port Peninsula fishermen voiced concerns at a meeting Wednesday night about the future of their industry if fracking were to be approved near the waters where they fish. About 100 people showed up to the meeting in Lourdes to discuss the possible implications of the process.

Fracking involves injecting chemicals and water into rock at a high pressure in order to extract oil. Terry Tucker, a fisherman in the area, said he doesn’t think fracking is a fool-proof process.

Fishermen on the Port au Port Peninsula are concerned about fracking plans in the area. Fracking is a technique which injects oil, water and chemicals into wells to draw out oil.Fishermen on the Port au Port Peninsula are concerned about fracking plans in the area. “They’re pumping a bunch of chemicals down into the ground, they’re pumping it down into a mile down – no one really knows what goes on down there,” Tucker said.

“This is all just a guess and this is a big chance to take. If things go wrong and there’s no fix, and NASA engineers can’t fix it, and it’s just unfixable. So then this place here just goes – everything goes.”

Tucker said he actually used to work in the fracking industry, but he didn’t like what he saw.

“It’s actually scary when you think of what they were doing because after the job was done, I went over cause I was just there watching, and I grabbed a handful of the Š sand that we put down into the ground, and just dumped on the ground,” he said.

“And when I had Š the sand in my hand, one of the chief engineers ran over to me and said, ‘Get that out of your hand, wash your hands, do you know what’s in that?’ They just dumped it in a field, just in a cattle field, so it seems to me that they weren’t really too concerned about just dumping that stuff into a cattle field and I don’t think they’d be really concerned about dumping that stuff into Bay St. George or Port au Port Bay where I fish.”

Tucker said he would be happy to have more development in the area, but doesn’t think it would be worth the risk to the natural environment.

“I’d love to see development here. I’d love to see companies coming in and bring jobs and bring money and bring everything to the place, but I don’t think it’s worth the chance of destroying something, even if there’s a small, small chance that it could just go to crap,” he said.

“I hope that the government really, really looks into this. I hope they’re not blinded by what some of the oil companies are probably going to offer.”

Black Spruce Exploration is planning to establish fracking wells on the Port au Port Peninsula, pending approvals from government and the Canada-Newfoundland and Labrador Offshore Petroleum Board.

Fishermen concerned about industry if fracking approved, West coast fishermen wary of possible problems

Special thanks to Richard Charter

Scientific American: High Levels of Arsenic Found in Groundwater Near Fracking Sites

article: http://www.scientificamerican.com/article.cfm?id=high-levels-of-arsenic-found-in-ground-water-near-fracking-sites

study: http://pubs.acs.org/doi/abs/10.1021/es4011724

Natural gas has become a leading source of alternative energy with the advent of techniques to economically extract gas reserves from deep shale formations. Here, we present an assessment of private well water quality in aquifers overlying the Barnett Shale formation of North Texas. We evaluated samples from 100 private drinking water wells using analytical chemistry techniques. Analyses revealed that arsenic, selenium, strontium and total dissolved solids (TDS) exceeded the Environmental Protection Agency’s Drinking Water Maximum Contaminant Limit (MCL) in some samples from private water wells located within 3 km of active natural gas wells. Lower levels of arsenic, selenium, strontium, and barium were detected at reference sites outside the Barnett Shale region as well as sites within the Barnett Shale region located more than 3 km from active natural gas wells. Methanol and ethanol were also detected in 29% of samples. Samples exceeding MCL levels were randomly distributed within areas of active natural gas extraction, and the spatial patterns in our data suggest that elevated constituent levels could be due to a variety of factors including mobilization of natural constituents, hydrogeochemical changes from lowering of the water table, or industrial accidents such as faulty gas well casings.

Special thanks to Richard Charter

TexasSharon.com: Kids in fracking sacrifice zones depict trauma in crayon drawings.

Kids in fracking sacrifice zones depict trauma in crayon drawings.

by TXSHARON on AUGUST 6, 2013
in NDA, RANGE RESOURCES

“Drawing is a natural mode of communication that children rarely resist and that offers a way to express feelings and thoughts in a manner that is less threatening than strictly verbal means. For the child who has experienced trauma or loss, it helps to externalize emotions and events too painful to speak out loud and is one of the only means of conveying the complexities of painful experiences, repressed memories, or unspoken fears, anxieties, or guilt.” Using Drawing as Intervention with Traumatized Children.

Aly Hallowich expressed her trauma in a drawing done before she was gagged by Range Resources.

children's image

I’m guessing this drawing was made when Aly was 5 or 6 because according to the court transcript, she was 7 when she was gagged.

MRS. HALLOWICH: We have agreed to this because we needed to get the children out of there for their health and safety. My concern is they’re minors. I’m not quite sure I fully understand. We know we’re signing for silence forever, buthow is this taking away our children’s rights being minors now? I mean, my daughter is turning 7 today, my son is 10. How – I guess that concerns me that we need to keep them safe, but –

The tallest object looks like a flare. You can see the green tanks that depict gas wells, the drilling rig and the impoundment pond with black in it. The sun and sky are sad. Aly’s drawing was previously posted HERE.

Reilly's google

Reilly Ruggiero created this fantastic Google Doodle. Check out the “L.” Half of Reilly’s world looks pretty wonderful but the other half is filled with diesel, drilling waste and scorched earth. I think Reilly was about 9 when she drew this. I posted it on my blog HERE before her parents started replying, “That matter has been resolved,” when asked about their issues with Aruba Petroleum.

children's drawing

During her first “free time” of the second grade, Emma Parr drew a picture of what was happening around her home. She says, “This is the oil rig next to our house. It is messing up our air.” And she tells the workers to clean up their mess.
Fracking is tearing apart families, dividing communities and traumatizing our children.

Villari’s firm “never encouraged the family to agree to it,” he told Yahoo! Shine. “I pushed them quite hard on the issue, said it was unusual, and that we did not believe it was constitutional.” But he said he understood the family’s decision, as the settlement was a “take it or leave it” offer, with the gag order attached. “They had to make a difficult decision at that point in time,” he explained, adding that the Hallowiches were under financial strain and needed the settlement money in order to move. “They made what they felt was the best decision for their family.”

Special thanks to Richard Charter.

The Guardian: A Texan tragedy: Plenty of oil, but no water

A Texan tragedy: Plenty of oil, but no water, Texan drought sets residents against fracking

By Suzanne Goldenberg, The Guardian

Sunday, August 11, 2013 13:35 EDT

Beverly McGuire saw the warning signs before the town well went dry: sand in the toilet bowl, the sputter of air in the tap, a pump working overtime to no effect. But it still did not prepare her for the night last month when she turned on the tap and discovered the tiny town where she had made her home for 35 years was out of water.

“The day that we ran out of water I turned on my faucet and nothing was there and at that moment I knew the whole of Barnhart was down the tubes,” she said, blinking back tears. “I went: ‘dear God help us. That was the first thought that came to mind.”

Across the south-west, residents of small communities like Barnhart are confronting the reality that something as basic as running water, as unthinking as turning on a tap, can no longer be taken for granted.

Three years of drought, decades of overuse and now the oil industry’s outsize demands on water for fracking are running down reservoirs and underground aquifers. And climate change is making things worse.

In Texas alone, about 30 communities could run out of water by the end of the year, according to the Texas Commission on Environmental Quality.

Nearly 15 million people are living under some form of water rationing, barred from freely sprinkling their lawns or refilling their swimming pools. In Barnhart’s case, the well appears to have run dry because the water was being extracted for shale gas fracking.

The town – a gas station, a community hall and a taco truck – sits in the midst of the great Texan oil rush, on the eastern edge of the Permian basin.

A few years ago, it seemed like a place on the way out. Now McGuire said she can see nine oil wells from her back porch, and there are dozens of RVs parked outside town, full of oil workers.

But soon after the first frack trucks pulled up two years ago, the well on McGuire’s property ran dry.

No-one in Barnhart paid much attention at the time, and McGuire hooked up to the town’s central water supply. “Everyone just said: ‘too bad’. Well now it’s all going dry,” McGuire said.

Ranchers dumped most of their herds. Cotton farmers lost up to half their crops. The extra draw down, coupled with drought, made it impossible for local ranchers to feed and water their herds, said Buck Owens. In a good year, Owens used to run 500 cattle and up to 8,000 goats on his 7,689 leased hectares (19,000 acres). Now he’s down to a few hundred goats.

The drought undoubtedly took its toll but Owens reserved his anger for the contractors who drilled 104 water wells on his leased land, to supply the oil companies.

Water levels were dropping in his wells because of the vast amounts of water being pumped out of the Edwards-Trinity-Plateau Aquifer, a 34,000 sq mile water bearing formation.

“They are sucking all of the water out of the ground, and there are just hundreds and hundreds of water trucks here every day bringing fresh water out of the wells,” Owens said.

Meanwhile, residents in town complained, they were forced to live under water rationing. “I’ve got dead trees in my yard because I haven’t been able to water them,” said Glenda Kuykendall. “The state is mandating our water system to conserve water but why?Š Getting one oil well fracked takes more water than the entire town can drink or use in a day.”

Even as the drought bore down, even as the water levels declined, the oil industry continued to demand water and those with water on their land were willing to sell it. The road west of town was lined with signs advertising “fresh water”, where tankers can take on a box-car-sized load of water laced with industrial chemicals.

“If you’re going to develop the oil, you’ve got to have the water,” said Larry Baxter, a contractor from the nearby town of Mertzon, who installed two frack tanks on his land earlier this year, hoping to make a business out of his well selling water to oil industry.

By his own estimate, his well could produce enough to fill up 20 or 30 water trucks for the oil industry each day. At $60 (£39.58) a truck, that was $36,000 a month, easily. “I could sell 100 truckloads a day if I was open to it,” Baxter said.

He rejected the idea there should be any curbs on selling water during the drought. “People use their water for food and fibre. I choose to use my water to sell to the oil field,” he said. “Who’s taking advantage? I don’t see any difference.”

Barnhart remained dry for five days last month before local work crew revived an abandoned railway well and started pumping again. But residents fear it is just a temporary fix and that next time it happens they won’t have their own wells to fall back on. “My well is very very close to going dry,” said Kuykendall.

So what is a town like Barnhart to do? Fracking is a powerful drain on water supplies. In adjacent Crockett county, fracking accounts for up to 25% of water use, according to the groundwater conservation district. But Katharine Hayhoe, a climate scientist at Texas Tech University in Lubbock, argues fracking is not the only reason Texas is going dry – and nor is the drought. The latest shocks to the water system come after decades of overuse by ranchers, cotton farmers, and fast-growing thirsty cities.

“We have large urban centres sucking water out of west Texas to put on their lands. We have a huge agricultural community, and now we have fracking which is also using water,” she said. And then there is climate change.

West Texas has a long history of recurring drought, but under climate change, the south-west has been experiencing record-breaking heatwaves, further drying out the soil and speeding the evaporation of water in lakes and reservoirs. Underground aquifers failed to regenerate. “What happens is that climate change comes on top and in many cases it can be the final straw that breaks the camel’s back, but the camel is already overloaded,” said Hayhoe.

Other communities across a bone-dry south-west are resorting to extraordinary measures to keep the water flowing. Robert Lee, also in the oil patch, has been hauling in water by tanker. So has Spicewood Beach, a resort town 40 miles from Austin, which has been trucking in water since early 2012.

San Angelo, a city of 100,000, dug a pipeline to an underground water source more than 60 miles away, and sunk half a dozen new wells.

Las Cruces, just across the border from the Texas panhandle in New Mexico, is drilling down 1,000ft in search of water.

But those fixes are way out of reach for small, rural communities. Outside the RV parks for the oil field workers who are just passing through, Barnhart has a population of about 200.

“We barely make enough money to pay our light bill and we’re supposed to find $300,000 to drill a water well?” said John Nanny, an official with the town’s water supply company.

Last week brought some relief, with rain across the entire state of Texas. Rain gauges in some parts of west Texas registered two inches or more. Some ranchers dared to hope it was the beginning of the end of the drought.

But not Owens, not yet anyway. The underground aquifers needed far more rain to recharge, he said, and it just wasn’t raining as hard as it did when he was growing up.

“We’ve got to get floods. We’ve got to get a hurricane to move up in our country and just saturate everything to replenish the aquifer,” he said. “Because when the water is gone. That’s it. We’re gone.”

guardian.co.uk © Guardian News and Media 2013
http://www.rawstory.com/rs/2013/08/11/a-texan-tragedy-plenty-of-oil-but-no-water/?utm_source=Raw+Story+Daily+Update&utm_campaign=2cd20bb36a-8_11_138_11_2013&utm_medium=email&utm_term=0_1b6404e40c-2cd20bb36a-180476769

"Be the change you want to see in the world." Mahatma Gandhi