Fracking Regulations: Texas Railroad Commission Looking at Fast Tracking Reporting Requirements

Link here.

Texas Railroad Commissioner (TRC) David Porter said would push the Railroad Commission (RRC) to complete the entire rule-making process requiring disclosure of chemicals used in hydraulic fracturing a year ahead of the deadline set in recent legislation.

The Texas Legislature on May 31 sent a bill to Governor Rick Perry on requiring the RRC to write disclosure rules for hazardous chemicals by July 1, 2012. The bill requires the RRC to complete rule-making for all other chemicals used in the process by July 1, 2013.

The Texas Railroad Commission (TRRC) regulates the state's oil and gas industry. The TRRC is similar to North Dakota's Industrial Commission (NDIC).

Based on past events, my hunch is that the rest of the states will follow the TRRC lead, and in fact will probably greatly influence the EPA on this subject.

Seeking Alpha: Three Bakken Stocks Highly Recommended -- For Investors Only

Link here.

Companies recommended: BEXP, OAS, and KOG. I agree 100 percent.

Update on Today's Unemployment Report -- May, 2011, Unemployment Report

I just updated my original post regarding today's unemployment report. The report is worse than originally reported. Link here.

This is what the LA Times had to say about the jobs report. Remember, the LA Times has traditionally supported the president. 

Five (5) New Permits -- More Evidence of Fracking Backlog -- Bakken, North Dakota, USA

Daily activity report, June 3, 2011 --

Drillers: Enerplus (2), CLR, Zenergy, and BEXP

Fields: Mandaree, Todd, Rosebud, and a wildcat.

The CLR permit is for a wildcat in Williams County.

It appears the two ERF wells will be on the same pad; need to confirm.

Four wells were released from confidential status. Of the four, three reported total depth only, suggesting a delay in fracking. The fourth well was shut in:

• 19540, SI, Murex, Vanessa Abigail 33-28H, Williams

It was interesting to note that Oasis requested and was approved to place eight wells on confidential list today. All are in Williams County, except for two as designated:

• 19418, Baffin 5601 12-18H, Williams
• 19427, Montague 5501 13-3H, Williams
• 19611, Hendricks 5602 42-36H, Williams
• 19628, Paradisae 5892 11-30H, Mountrail
• 19832, Traill 5502 31-4H, Williams
• 19844, Hysted 5200 44-19H, McKenzie
• 19952, Hensen 5501 4207H, Williams
• 20018, Wales 5602 42-33H, Williams

North Dakota #2 in Number of Rigs

This story says North Dakota has 162 active rigs, putting it fourth among the states in number of rigs, behind Texas, Oklahoma, and Louisiana.

Outpacing Louisiana for the number two spot, Oklahoma has the second-largest number of drilling rigs in the state with 173 active rigs. Most rigs are drilling in the Anadarko Basin, but some are active in the Arkoma Basin as well. Oklahoma has historically been a leader in natural gas production, but more rigs are drilling for oil in its liquids-rich Woodford Shale.

With 165 active drilling rigs in the state, Louisiana is supported by both onshore and offshore drilling. Currently, there are 131 rigs drilling onshore and 34 offshore rigs in Louisiana. Onshore, drilling continues in the gas-rich Haynesville Shale, but rigs are now starting to spin their bits to develop the Eagle Ford Shale in Louisiana. Nonetheless, if only onshore rigs were counted, there are more drilling rigs in North Dakota than in Louisiana.

Spurred by increased activity in the liquids-rich Bakken Shale, North Dakota has added 57 rigs this year to boast 162 active drilling rigs in the state. With 96 percent of the wells being drilled horizontally and 99 percent of the wells being drilled for oil, North Dakota is supporting a burgeoning oil production in the Bakken formation, and activity around the state is flourishing to develop infrastructure to support this increased production.

In fact, North Dakota has had as many as 179 active rigs. Of course, these data points are all snapshots and change on a daily basis. So, we may have to wait several months to see how this plays out. Based on what little I know, no one will catch up with Texas. However, my hunch is that North Dakota will overtake Oklahoma on a consistent basis by 2014.

UPDATE: Worse Than Initially Reported! McDonald's Accounted For Half of New Hires! Nation's Jobs Report -- Horrendous: One-Third Of That Expected

Update

Today's jobs report is even worse that initially reported. One-half of all of May's new hires were accounted for by McDonald's. That is truly very, very scary.

McDonald’s ran a big hiring day on April 19 — after the Labor Department’s April survey for the payrolls report was conducted — in which 62,000 jobs were added. That’s not a net number, of course, and seasonal adjustment will reduce the Hamburglar impact on payrolls. (In simpler terms — restaurants always staff up for the summer; the Labor Department makes allowance for this effect.) Morgan Stanley estimates McDonald’s hiring will boost the overall number by 25,000 to 30,000. The Labor Department won’t detail an exact McDonald’s figure — they won’t identify any company they survey — but there will be data in the report to give a rough estimate.

Original Posting

Is there a better word that could be used? I don't know.

As you scan the data points below remember a few things:

• federal government permitorium in the oil industry continues; the federal response to the Gulf spill did more harm than good
• had it not been for Congress, Interior Secretary Salazar would have succeeded in even more job stagnation in the west
• small businesses subject to federal health care regulations once their company exceeds 50 employees
• productivity/worker continues to increase
• no evidence that federal regulatory environment moderating
• right-to-work issue involving Boeing and the National Labor Relations Board (NLRB)
• federal government stimulus programs were mostly used to pay salaries of city, county, and state government workers; those stimulus programs have now run their course
• federal government stimulus programs failed to identify and/or channel money for shovel-ready projects

Link here and link here.

Some data points:

• Unemployment rate edged up to 9.1 percent, up from 9.0
• Employers hired only 54,000 new workers in May
• Analysts expected155,00 new jobs
• Fewest new hires in EIGHT months
• Associated Press, not known for hyperbole, used the word "startling"
• Associated Press, not known for hyperbole, used the phrase "weakened dramatically"
• Associated Press, not known for hyperbole, used the phrase "anemic pace of job creation"
• CNBC: hiring report "so bad"
• Obama's administration first comment: "we're on the right track" -- on CNBC at 8:34
• Obama's administration first comment: "private industry needs to create more jobs
• Obama's administration first comment: "we have to have cooperation from congress, private sector"
• Private sector hired ONLY 83,000 new workers in May: least in nearly a year (since last June)
• Analysts forecast private sector would hire 175,000 new workers
• Past three months: average of 220,000 new jobs
• May, 2011: only 83,000 new jobs
• Average for past four months if May included: 185,750

Local Government Sector

• Local government cut 28,000 jobs in May, the most since November (2010)
• 18,000 of the 28,000 local government jobs cut were in education
• Cities and counties have cut 466,000 positions since 2008

Manufacturing Sector

• Grew at its slowest page in 20 months
• Cut 5,000 jobs; first job loss number in that sector in seven months
• Auto industry lost 3,400 jobs in May

Other Sectors

• Retailers: cut 8,500 positions (after adding 64,000 in April)
• Leisure and hospitality: cut 6,000 jobs

Revised Numbers

• Government revised previous months' job totals to show 39,000 fewer jobs created in March and April than previously reported

Interesting New Number Being Reported by AP

• "The economy needs to generate at least 100,000 jobs each month just to keep up with population growth and prevent unemployment rate from rising."

This is the first time I have seen the "100,000" number. Up until now, we have been told that we need to see at least 400,000 new jobs each month to chip away at the 8 - 10 million unemployed. It appears the Associated Press with this story has subtly moved the goal posts:

• First, the AP has lowered the bar from 400,000/month to 100,000/month as a measure of success
• Second, the new measure of success: keep unemployment rate from rising (rather than chip away at the unprecedented number of unemployed in modern history)

Solutions? First things government could do --

• Work with oil and gas industry and ask what they need to hire more workers (help solve two problems: high unemployment and high gasoline prices)
• Raise the number from 50 to 1000 the number of employees a small business employs before it hits federal government regulatory environment
• Step away from cozy relationship with NLRB
• Enforce inter-state commerce laws already on the book
• ObamaCare waivers are given to anyone who requests a waiver (already a fact); those waivers are good for a year; they need to be open-ended
• Review global warming scientific data
• Fast track environmental impact statements

Reminder: DRL Status and What It Means -- Bakken, North Dakota, USA

Elsewhere, someone suggested that it is bad news when a well comes off the confidential list and the status is reported as DRL.

In fact, "DRL" status has nothing to do with how good the well is or isn't. DRL status simply means the well has come off the confidential list (six month date has been reached) but the well has not been completed.

If a well is not completed (generally, in the Bakken, this means it has not been fracked), companies are allowed to put the well on DRL status until the well has been fracked. The company then has 30 days  until after the well is fracked for the well to be "tested" and an IP  reported to the NDIC.

In the "old" days, six months was more than enough time to drill a  well and complete (frack and test) a well, but with the backlog in  fracking, it is now taking four to six months after the well has  reached total depth until it is "completed" (fracked and tested).

And, yes, of course, there is some oil being produced before the well is fracked (in some cases, LOTS of oil -- some wells have great  production even without manmade fracking), but until the well is  completed (fracked and tested) the company can keep the well on DRL status.

Various initial production numbers will be reported during this period. The state apparently defines the parameters companies are to use when reporting an IP under test conditions. In addition, companies will report 24-hour flowback production numbers.

Bottom line: DRL status tells one nothing about the IP which will be reported later.  And the IP is only one data point with regard to how "good" the well is.