Energy policy — geothermal: Results from Poncha Springs test hole looks promising


From The Mountain Mail (Cailey McDermott):

The first hole at Poncha Hot Springs [which demonstrated a thermal gradient of 178 degrees Celsius per kilometer] was drilled to a relatively shallow depth of 255 feet to determine if the thermal gradient is sufficient to warrant a deeper hole. Morgan said shallow holes cost about $10,000 each, while the cost of a borehole deep enough to facilitate geothermal electricity production is around $1 million. The project budget, $50,000, came from a state grant…

[Frederick Henderson of Hendco Services] said temperature readings gathered from the first hole were “really very good.” But he clarified that the number is preliminary and the hole will need to be retested when the temperature has stabilized. He said drilling machines sometimes makes a difference in air temperature in the hole and the next test may be higher or lower. Henderson said geothermal testing near Mount Princeton returned thermal gradient measurements eight times greater than normal, making it the most significant thermal gradient in the state.

More geothermal coverage here and here.

Energy policy — oil and gas: Property owners cannot deny oil companies ingress and egress to explore and produce minerals


Back in the day I worked as a permit agent for one of the biggest U.S. oil companies. Once in a while I had to tell some hay farmer that I was going to take several acres of his irrigated alfalfa out of production for several years or decades. There was no guarantee, of course, that any well we drilled would turn out to be a producer. But if the well did come in the farmer would lose control of his surface for the life of the well. Operations such as re-fracturing, casing repairs, hauling off oil or condensate and connecting to a natural gas pipeline would be ongoing I told them. If that farmer owned the mineral rights he would get a royalty. More often than not the surface damages that I paid up front were the only compensation. To add insult to injury “forced pooling” may have forced the farmer to lease or sell his rights in the first place.

Fast forward to the burgeoning Niobrara shale play in Colorado. Here’s a report about leasing tactics in Elbert and Douglas counties, from Mark Jaffe writing for The Denver Post. From the article:

Across Elbert and Douglas counties, where energy companies are competing for leases, landmen are using the “forced pooling” card as leverage, property owners say. “Everybody was told the alternative to a lease was forced pooling,” said Steve Budnack, president of the homeowners association for Centennial Ranch in Douglas County.

Under the state’s 1951 Oil and Gas Conservation Act, the mineral rights of a landowner who has not signed a lease, or refuses to sign one, can by state order be force pooled, meaning he or she can be included in an energy company’s drilling plan. In 2010, the state oil and gas commission issued 136 orders for items such as variances and rule changes, and 48 of the orders were for forced pooling, according to agency data. “It sounds like eminent domain, but it is really there to assure orderly oil and gas development,” said Lance Astrella, an attorney who represents landowners. “The problem is that it can be abused.”[…]

Whether forced pooling is employed as a prod, its use in the Denver area — parts of Boulder, Arapahoe and Adams counties also sit atop the Niobrara — is likely to grow.
The horizontal wells the industry is drilling to capture oil from the Niobrara’s shale can extend 5,000 feet or more, requiring larger drilling areas that will affect more landowners, Astrella said.
“It may start out as a threat,” said Debbie Trujillo, an Elbert County homeowner who began researching leasing after landmen knocked on her door. “But when an oil company decides to drill in an area, it becomes a very real possibility.”[…]

For parcels that don’t have leases, the driller returns to the oil and gas commission seeking a pooling order. There are cases where as much as 40 percent of the land in the spacing order has been force pooled, according to the oil and gas commission staff. “It really is there to protect landowners,” said Thom Kerr, the commission’s permit manager. “It is a way to make sure they benefit from the exploitation of the resource.”[…]

A forced-pooled landowner gets a royalty equal to 12.5 percent multiplied by the fraction of the drilling area owned. For example, a property owner with 10 percent of the land in the spacing order gets a 1.25 percent royalty as soon as the well begins producing. While some oil company leases deduct some well costs from the landowner’s royalty, there are no costs deducted from a pooling royalty. When the well has produced oil and gas valued at roughly twice the cost of the well — $4 million if it costs $2 million to drill — the royalty for the pooled landowner is replaced with a working interest in the well. If a landowner owns 10 percent of the land, that person gets a 10 percent share of the well’s production, less 10 percent of the cost of operating the well.

More oil and gas coverage here and here.

Climate change: Arctic sea ice at record low for July


Here’s the link to the National Snow and Ice Data Center webpage. Here’s an excerpt:

Average ice extent for July 2011 was 7.92 million square kilometers (3.06 million square miles). This is 210,000 square kilometers (81,000 square miles) below the previous record low for the month, set in July 2007, and 2.18 million square kilometers (842,000 square miles) below the average for 1979 to 2000.

On July 31, 2011 Arctic sea ice extent was 6.79 million square kilometers (2.62 million square miles). This was slightly higher than the previous record low for the same day of the year, set in 2007. Sea ice coverage remained below normal everywhere except the East Greenland Sea.

More coverage from the Summit County Citizens Voice (Bob Berwyn). From the article:

During the northern hemisphere summer, the ice shrinks through September, then starts to expand again through the winter. Accurate sea ice extent measurements date back to 1979, when satellites first started delivering reliable data and photographic images…

Signalling the trend of vanishing sea ice, new data shows that more of the Arctic’s store of old and thick ice is melting. The ice melted quickly in early July, but the melting slowed down the second half of the month as a high pressure system over the Beaufort Sea, north of Alaska, broke down, bringing stormier and cooler weather to the region. The Arctic ice researchers say the weather change probably pushed the ice apart, forming a thinner but more extensive ice cover.