‘Deepwater Horizon’ rig explosion injures 17 workers, burns out of control

PORT FOURCHON, La. – Transocean’s Deepwater Horizon drilling rig in the Gulf of Mexico off the Louisiana coast was involved in an explosion and fire at around 10 p.m. on April 20, sending spectacular bursts of flame into the sky.
The fires were still raging on the afternoon of April 21. Nearly 24 hours after the explosion, the rig continued to burn, and authorities could not say when the flames might die out. A column of boiling black smoke rose hundreds of feet over the Gulf of Mexico as fireboats shot streams of water at the blaze.
Seventeen workers were injured, three critically, the U.S. Coast Guard said.
Eleven others were reported missing after the explosion.
Of those on the rig when the accident occurred, 79 were Transocean workers, six were BP employees and 41 were contract workers.
Vice President Adrian Rose of Transocean, the rig owner, said crews before the explosion were performing routine work and that there was no sign of trouble. The rig was under contract to BP PLC.
Rose said the explosion appeared to be a blowout, in which natural gas or oil forces its way up a well pipe and smashes equipment.
The rig late on April 21 was listing by 10 degrees and said to be sinking.
According to the Transocean website, the Deepwater Horizon is 396 feet long and 256 feet wide and was located in 5,000 feet of water.
Offshore drilling is a dangerous occupation. Since 2001, there have been 69 offshore deaths, 1,349 injured and 858 fires and explosions in the Gulf of Mexico, according to the federal Minerals Management Service.

For new TransCanada boss, Alaska pipeline at bottom of priorities

CALGARY, Alta. - The Alaska gas pipeline project will be vital for TransCanada Corp. in a decade, but the company’s incoming chief executive said he is more focused now on moving forward with $22-billion of projects that garner far fewer headlines.
Russ Girling, who takes over as CEO in July, said on April 15 that the multibillion-dollar Alaska proposal would help TransCanada keep its Alberta and Canadian main line gas systems running at capacity as conventional western Canadian production dwindles in the coming years.
But Girling, 47, said in an interview he is still more focused on major investments that will come to fruition over the next eight years, such as its Keystone oil pipeline system to the United States in June and its subsequent expansions.
“If you made the decision today, you’d be looking at eight to 10 years in terms of first flow of gas (from Alaska). So it’s still a long lead-time project,” he said.

New pipeline trade group formed in Pennsylvania to counter PUC

HARRISBURG, Pa. - State utility regulators are concerned about the safety of pipelines used by Pennsylvania's booming Marcellus Shale natural-gas industry and are exploring whether they should have new powers to oversee that area and others.
Not all industry participants, however, are in favor of more oversight from the Public Utility Commission.
"Personally, I think the PUC is just trying to expand its power," said Lou D'Amico, president of the newly formed Pennsylvania Independent Oil & Gas Association - a melding of the Pennsylvania Oil & Gas Association, and the Independent Oil & Gas Association of Pennsylvania.
"We don't want them expanding regulation beyond what's already in place," D'Amico said.
Major interstate and pipelines within Pennsylvania are under the jurisdiction of federal or state regulatory agencies. But the pipelines that connect wells to larger transport pipelines - gathering pipelines - lie in a gray area, PUC spokeswoman Jennifer Kocher said.
"Given the significant development that will be associated with the Marcellus Shale region, the commission is concerned about oversight of pipelines and that trucks carrying items used in drilling carry PUC certification and proof of insurance," Kocher said.
The number of gathering lines running from individual wells is unknown - but is thought to be huge.
More than 350,000 oil- and natural-gas wells have been drilled throughout Pennsylvania, dating back to Edwin Drake's first well in 1859.
From Jan. 1, 2000, through April 9, 2010, nearly 30,000 oil- and natural-gas wells were drilled, according to state Department of Environmental Protection data.
Gathering lines range in length between a few hundred feet to as long as 20 miles, D'Amico said. Marcellus Shale wells could use gathering lines even longer, depending on their proximity to larger pipelines, he said.
For the PUC to have jurisdiction over all gathering pipelines would require special legislation, Kocher said.

Petrohawk, Kinder Morgan in Haynesville Shale joint venture

HOUSTON - Kinder Morgan Energy Partners on April 13 said it has agreed to pay $875 million in cash to Petrohawk Energy to form a natural gas gathering and processing joint venture centered on the Haynesville Shale play in northwest Louisiana.
With the creation of KinderHawk Field Services, the small Houston-based exploration and production company will have raised $1.4 billion in cash from asset sales in 2010 alone.
That's on top of another $1.2 billion in asset sales, $2.7 billion in equity fund raising and $1.1 billion in debt issued since December 2007.
“Yes, we've raised a lot of capital, but we've had a great use for those funds,” Petrohawk Chairman and CEO Floyd Wilson said.
In that time the company took its acreage in the Haynesville and expanded it to become a top producer of natural gas from the tight, cement-like shales that until recent years were considered too expensive to drill. Almost single-handedly, Petrohawk created awareness of the Eagle Ford Shale in South Texas, becoming the dominant player there.
All told, Petrohawk has gone from being a company with four trillion cubic feet equivalent of gas reserves and a $3 billion market capitalization in December 2007 to 34 trillion cubic feet in reserves and a $7 billion market cap. With the scale also has come greater efficiency: Petrohawk went from 25,000 wells to 5,000 in that same time.

Atlas Energy in $1.7 billion Marcellus venture with India’s Reliance

PITTSBURGH - Atlas Energy, Inc. (NASDAQ: ATLS) on April 9 announced its entry into a joint venture with a wholly owned affiliate of Reliance Industries, the largest private sector company in India and a global energy leader,
In the deal, Atlas will transfer an interest in its Marcellus Shale position equal to 120,000 net acres in a transaction valued at $1.7 billion.
Reliance will pay approximately $340 million in cash upon closing and an additional $1.36 billion in the form of a drilling carry.
Atlas will serve as the development operator for the joint venture. Reliance will have the option to operate in certain project areas in the coming years outside of Atlas’ core operating areas of Fayette, Greene, Washington, and Westmoreland Counties in southwestern Pennsylvania.
Reliance will acquire a 40 percent undivided interest in some 300,000 net acres (120,000 net to Reliance) of undeveloped leasehold held by Atlas, and Atlas will retain a 60 percent undivided interest in the acreage.
In addition to funding its own 40 percent of drilling obligations, Reliance has agreed to fund 75 percent of Atlas’ portion of drilling and completion costs until the $1.36 billion drilling carry is fully utilized. Atlas has 5 1/2 years to utilize the drilling carry, subject to a two-year extension under certain conditions.

Canadian union appeals NEB approval of Keystone XL pipeline

TORONTO - The Communications, Energy and Paperworkers Union of Canada is charging that approval by Canada’s National Energy Board of the Keystone XL pipeline will result in tens of thousands of Canadian jobs being exported to Texas. The energy union filed leave to appeal the decision on April 9.
"The oil and gas industry has decided that the enormous economic development associated with upgrading and refining oil sands resources will take place in Texas, not Canada," said Dave Coles, president of the union.
The Keystone XL pipeline construction project will export 900,000 barrels of oil per day to the U.S. Gulf Coast - most of it unprocessed bitumen from the Alberta oil sands.
"This means the loss of tens of thousands of jobs in the Canadian oil upgrading and refining sector that either exist now, or that would have been created by projects that are likely to be canceled as a result of the dramatic expansion of oil export pipeline capacity to upgraders and refineries in the U.S.," Coles charged.
Keystone XL was opposed by CEP, the Alberta Federation of Labor, the Sierra Club as well as by Enbridge, Imperial Oil, BP and Nexen.
The companies argued that Keystone XL will create enormous excess export capacity, raise service costs on other pipelines and increase input costs to Canadian refineries by US$600 million in 2013.
"Not only will this project abandon the enormous opportunity of creating a diversified Canadian oil and gas industry," said Coles, "but it will seriously undermine the viability of existing refineries. Astonishingly, the NEB has signed off on the industry's plan as being the Canadian public interest. The Board has abandoned its mandate to the entirely ill-founded notion that a deregulated export market is in the Canadian public interest."
The legal argument filed by CEP alleges that the NEB made several fundamental errors of law, and failed to properly exercise its mandate to protect the Canadian public interest.
The National Energy Board approved the Keystone XL pipeline project on March 11, subject to the federal government giving it the final green light. CEP filed its appeal on April 9.

NRDC questions State Dept.’s early release of DEIS for Keystone XL

WASHINGTON - Senior Attorney Susan Casey-Lefkowitz of the Natural Resources Defense Council wrote on her Blog on April 9 “the State Department (on April 9) made available on its webpage its draft environmental impact statement (DEIS) for the proposed Keystone XL tar sands pipeline. The DEIS is oddly dated one week from now and it seems as though no Federal Register notice has been published. We can only hope that its premature release is a trial balloon and that initial reaction will be considered before the real publication occurs.”
NRDC contends that State should have waited for completion of a new White House guidance on incorporating greenhouse gas emissions impacts into environmental impact statements. And, State should have been taking a hard look at whether Keystone XL is in the national interest before investing in a draft EIS.
Keystone XL is a target of environmental groups because it will double the amount of tar sands oil currently being piped into the United States – of what will be bitumen, not syncrude. Much of the tar sands oil received in the U.S. is already refined to a synthetic crude, more like common oil. Bringing in the raw bitumen in the new pipeline means that the upgrading and refining has to take place in the United States, resulting in increased emissions of greenhouse gases, heavy metals, and other pollutants, say the environmentalists.