Column: Don’t Blame Fracking for Spike in Earthquakes (StarHerald.com)

The American Southwest is undergoing a spike in seismic activity. A new U.S. Geological Survey shows that a small basin on the New Mexico-Colorado border experienced 20 times more serious earthquakes between 2001 and 2011 than it had over the previous thirty years. There have been similar tremor spikes throughout the country.

Some media accounts have been quick to blame this on hydraulic fracturing. Also known as “fracking,? this technique involves injecting a high-pressure mixture of water, sand, and other fluids to break up underground rock structures and free up embedded oil and gas.

One prominent columnist claimed “fracking may be inducing earthquakes.? The online journal Salon simply declared that the “earthquake epidemic is linked to fracking.? And NBC News published a story with the bold title of “Confirmed: Fracking practices to blame for Ohio earthquakes.?

This thinking is completely off-base. There’s ample evidence indicating that fracking doesn’t cause earthquakes. And spreading the lie that it does could lead to policies that undermine job creation and economic growth in the energy industry.

Some fracking operations do create very small seismic events. But, as Stanford geophysicist and former Obama administration energy advisor Mark Zoback has noted, these events “pose no danger to the public.? In fact, research has shown that these very slight tremors release about the same amount of energy as a gallon of milk falling off a kitchen counter.

What’s more, scientists have specifically looked into the idea of these micro-seismic events somehow leading to the earthquakes. They found zero connection. As a 2012 U.S. Geographical Survey explicitly stated, “studies do not suggest that hydraulic fracturing … causes the increased rate of earthquakes.?

The more likely culprit? A process called high-volume wastewater injection. For about 20 years, companies have been using this technique to dispose of water polluted during the production of coal-based methane, drilling of energy extraction wells, and other water-intense activities. A separate Geographical Survey has determined that injected wastewater has been lubricating fault lines and triggering serious tremors.

But even this finding is no reason for panic. Only a very small slice of wastewater injection programs are causing any serious tremors. In Oklahoma, Cornell researchers linked just four out of the state’s 4,500 injection wells —נless than 0.1 percent —נto seismic activity. And these were exceptionally high-volume operations where at least 4 million barrels of water were being disposed of each month.

Nonetheless, energy companies should work with regulators to reduce the risks of seismic activity related to wastewater injection.

Firms should be prohibited from disposing wastewater in wells near fault lines. They should be required to take a substantial amount of their wastewater to treatment plants instead of injecting it. And regulators should be given the authority to regularly monitor injection sites to check for unusual tremor activity.

These are the commonsense steps activists should be urging government to take.

What won’t do any good, however, is mindlessly demonizing fracking. Indeed, if activist hysteria fuels the creation of anti-fracking public policies, the economic effects would be devastating. This technique already supports over 2 million American jobs. And the continued expansion of the oil and gas industry could create millions of new employment opportunities and billions in new growth over the next decade. Bad laws would kill off this bounty.

Fracking is an economic godsend. Let’s not let baseless hysteria crush it.

Opinion by: Chris Faulkner, CEO of Breitling Energy Corporation and author of the recent book, “The Fracking Truth.” He is also the producer of the documentary, “Breaking Free: The Shale Rock Revolution.”

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‘North American Cartel’ Floated at SA Oil Summit (Woai.com)

Talk at the Mexico Shale Summit underway in San Antonio is about creation of a joint U.S. Mexico and Canada oil production effort to make North America completely energy independent and further paralyze OPEC and other Middle eastern oil producers, News Radio 1200 WOAI reports.

Chris Faulkner, COP of Breitling Energy Corporation and a major player in the Eagle Ford and other shale and tight oil plays, says it makes sense for the U.S. to help form our own cartel.

  “The United States can no longer afford to be at the mercy of these countries, which have now essentially put a target on our backs,” Faulkner said.

Faulkner praised Mexico’s President Enrique Pena Nieto for taking the lead in breaking the PEMEX monopoly and opening Mexico’s rich shale and traditional oil fields to private exploration.  He says Canada also has very large traditional and tar sands oil deposits which could also become part of the North American Cartel.

Faulkner says this wouldn’t mean that the North American Cartel could control the world price of oil because OPEC would still be a major producer, especially Saudi Arabia.  But he says it would significantly decrease the power of OPEC to manipulate prices, like the Saudis are currently doing in hopes of crippling U.S. shale production.

  “Our landlocked partners have to be in our own Cartel, to send signals to our competitors, who have made it clear that they don’t think too highly about what we are doing over here,” he said.

Faulkner says what he calls the North American Energy Confederation would allow North America to chart its own energy course, and not to have to repeatedly dispatch troops and spend trillions of dollars protecting other people’s oil production and oil shipping routes in the Middle East and Persian Gulf.

“We can put some of these OPEC countries out of the oil business,” he said.  “I think that scares them greatly.”

By: News Radio 1200 WOAI Reports

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Mexico Tries to Become a Major Player in Natural Gas, Shale Energy (Voxxi.com)

Shale gas can be acquired by methods such as fracking. Mexico is looking to market its rich reserves to the U.S. but it could face some stiff competition. (Shutterstock)

Mexico’s energy markets, which have been monopolized by the state-owned Pemex for decades, are now open to foreign investment for the first time in over 70 years.

Mexico’s abundant energy resources are on the table, and investors are lining up to learn more, which is why nearly 300 oil and natural gas producers gathered in San Antonio for a conference this week.

The Mexico Shale Summit is being held at the Hilton Palacio del Rio in San Antonio, and despite the current low cost of crude oil, investors remain optimistic about the potential of Mexico’s shale reserves.

Crude oil prices are at a six-year low, staying close to $50 a barrel, but Edgar Rangel-German, Commissioner with Mexico’s National Hyrdrocarbons Commission (CNH), believes that these low prices have just given Mexico more room to breathe while the country tackles energy reforms.

Rangel-German also said that shale oil will be open for bidding this year, and that the announcement is expected sometime in March or April.

Texas was an appropriate location to host this summit, as its shale operations have already proven to be efficient and successful. However, competing with Texas’s shale operations could be problematic for Mexican energy companies, despite their abundant natural resources.

Mexico’s resources include an estimated 13 billion barrels of oil and around 600 trillion cubic feet of gas from shale reserves, the 8th and 6th largest supplies in the world, respectively.

“The possibility of a North American energy confederation is still something I would like to see on the table, for Canada, Mexico and the United States,? said Chris Faulkner, CEO and Chairman of Breitling Energy Corporation (OTCBB: BECC), according to Business Wire.

“It doesn’t seem to be on anyone’s radar in Washington, but if we could strive for North American energy independence first, we would be the second largest oil producing coalition in the world next to OPEC, and would be incredibly formidable in determining world oil policy.?

An estimated $100 billion is needed to effectively develop Mexico’s natural shale reserves, and President Pena Nieto is taking the necessary legislative steps to achieve this goal.

“Mexico is in an excellent position, they know it, and President Pena Nieto is making the right moves to open his country to new partnership and development,? Falkner said.

Written by: Gabrielle Meyer

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CNBC and the Citigroup Report (Oilpro.com)

I was in a meeting in New York Monday when the emails and calls started blowing up around lunchtime.  Citigroup released a report lowering its forecast for oil to as low as $20 per barrel, stating the known facts that while rigs continue to go down, supply continues to go up.  Storage tanks are indeed brimming and tanker day rates are shooting up as producers look to floating storage for the immediate future.

And granted, Brazil and Russia are pumping at record levels.  It seems the whole world is unaware that if there would be roughly a 2-percent worldwide cut in production (roughly 2 million barrels) that prices could likely rocket up ten, fifteen or even twenty percent, or more?  Are these people ignorant, or just badly lacking in math?

One of those emails Monday was from CNBC, asking if I could run down to the NYSE to appear on Closing Bell with Kelly Evans and their 2nd hour panel.  With the ink barely dry on the Citi report, they were ready to pounce on any idea that oil prices could sustain higher levels.

What I told them is what I’ve reiterated here.  I don’t see the fundamentals in place for prices to remain this low for an extended period.  Last spring, when crude was frolicking above $100 and optimism reigned supreme, we at Breitling Energy started looking at models that showed unsustainability, mostly due to swelling supplies and initial demand softening.  Our models proved right.  We remained conservative, focusing on the Permian Basin, and established an Asset Management Division to diversify risk.  Hindsight says the plan worked well for a relatively small E&P, but we sure didn’t know it when prices seemed to be scaling the wall unabated. 

What I told Kelly and the CNBC audience is that I just don’t see the fundamentals in place for oil to drop more precipitously and stay there for an extended period.  Could they bounce around here for a while?  Certainly.  In fact, likely.  And could we break $40?  I learned a long time ago not to try to forecast precise oil prices.  I focus more on trends and fundamentals.

What I do see, however, are probable shorts talking about lower prices for an extended time.  Markets can indeed respond to jawboning.

Supply is increasing.  Granted, we had a heck of a boom going.  It’s going to end up taking about a year – from last fall to perhaps sometime this summer or early fall – to wind it down.  It was indeed one HELL of a boom.  To that end, there may be still more EIA reports of increasing supply.

Go back to fundamentals.  Rigs are down 177 the first 2 weeks of February alone; that’s a lot of supply not being added to the market.  Decline curves on shale wells are steep.  With less investment in new projects, existing supply eventually starts to fall.

When?  I have no idea.  It was a HELL of a boom.

Demand in the U.S. is going up.  In December, 2014, the F-150 was the most popular selling vehicle in America.  Ford-tough.  With gas prices below $2.50, consumers started rushing to snatch up new vehicles last fall.  And notice that wasn’t new ‘cars’.  They were buying SUV’s.  Gas-guzzling SUVs.  Eventually, this will be reflected in government demand numbers.

Meanwhile, looming uncertainties remain ever-present in places like Venezuela and Libya.  ISIS recently moved on Kirkuk, rattling the markets.  The Iranian sanctions could be lifted or revised this year, and we don’t know what that will look like supply-wise.  But if they are relaxed, allies like Saudi Arabia and Israel will be plenty “ticked?.

Finally, a friend of mine spoke to Harold Hamm at a recent conference in North Dakota.  Hamm said privately what he’s been saying publicly – that we just have to get through summer.  Hamm is bullish on prices the second half of 2015.

All things considered, prices appear to be basing, even amidst speculation this is nothing more than a dead cat bounce.  I would disagree.  If you measure the fundamentals on Libra’s scale, it appears to me the balance would tip to higher prices at some point later this year.

Written by: Chris Faulkner, CEO of Breitling Energy Corporation and author of the recent book, “The Fracking Truth.” He is also the producer of the documentary, “Breaking Free: The Shale Rock Revolution.”

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Plummeting Gasoline Prices Will Eliminate Thousands of Jobs in Many States (Mainstreet.com)

NEW YORK (MainStreet) — Plunging oil prices has pushed major oil and gas producers to curtail their projects and slash their budgets, which means thousands of jobs are at risk.

The rapid decline in oil prices have served as a boon to consumers who are saving money each month, but extremely low prices will affect the 9 million Americans who owe their livelihoods to the energy industry among the 32 states which produce commercial quantities of oil and natural gas.

The dramatic drop in oil prices isn’t all good news for the American economy, said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University in Dallas. A conservative estimate is that about 33% of the oil and gas extraction jobs, or 65,000 positions, will vanish during 2015. Other industries such as oilfield service companies, manufacturers of drilling equipment and transportation services related to oil and gas extraction will also be hit, although estimates for those jobs are harder to determine, he said. Companies such as Halliburton, Schlumberger and Baker Hughes have already announced huge layoffs, although most of them are likely to be outside the U.S.

Although Texas, Alaska and North Dakota are the largest producers of hydrocarbons, 29 other states also produce commercial amounts of oil and natural gas.

“The geographic impacts of the downturn in the industry will be felt nationally,? Weinstein said. “For example, the Marcellus Shale in Pennsylvania and West Virginia is now the nation’s number one producer of natural gas—both dry gas and natural gas liquids such as ethane and propane.?

Alaska, North Dakota and Texas will face a dramatic drop in revenue in 2015 due to the plunging oil prices, which results in less drilling and more laid-off workers, said Chris Faulkner, CEO of Breitling Energy, a Dallas oil and gas exploration and production company. In Texas, 125,000 direct and indirect jobs could be at risk while North Dakota could see 50,000 to even 75,000 jobs “evaporating? if low oil prices remain “for any length of time,? he said.

“Keep in mind that the oil and gas industry pays some of the highest wages in this country and these jobs are not easily replaceable in another industry,? Faulkner said. “This is not a matter of one of our employees getting laid off from Hilton and getting hired over at Hyatt. These jobs at this pay level are very hard to find outside of the oil and gas industry.?

The long-term effect of extremely low oil prices could produce a “huge price swing in the other direction? when “too many unprofitable producers throw in the towel in the next year or so,? Faulkner predicts.

“Losing too much investment or stimulating demand could create a price shock in future years as the necessary supply growth cannot return quickly once curtailed,? he said. “If anything, removing the OPEC wildcard should raise the hurdle rate required on oil projects, which may require even high prices for higher cost and risky projects.?

The downside to cheap oil is that a fair number of higher paying jobs in the oil field and oil field services industry will be lost, affecting housing and property values, said Patrick Morris, CEO of HAGIN Investment Management in New York City.

“With modest to slow growth in most other sectors, the loss of tens of thousands of higher paying energy sector jobs is going to have a pretty big negative impact,? he said. “The alarming fact is that many of the areas, certainly in North Dakota, that were the biggest beneficiaries, will now be the big losers. Property values will decrease.?

McKinsey, the management consulting firm, estimated in 2013 that the shale oil boom would create 1.7 million new jobs and add up to $690 billion a year to GDP by 2020.

“This is a pretty big number to lose, but over five years it works out to about 28,000 jobs per month that will not be created at this level,? Morris said.

The states which rely heavily on oil and gas tax revenue to contribute to their budgets will now see that money is at “risk and so are programs like education, transportation and intrastate expansion projects,? Faulkner said.

Another downfall of low oil prices limiting production is that the risks of outages increase, he said.

“As prices fall, outage risks rise particularly from financially stressed nations like Venezuela and Nigeria, which cannot maintain their current subsidies,? Faulkner said. “As subsidies are lifted, the risk of civil unrest tends to rise, putting production at risk. With little spare capacity today, the market has few options to deal with a large outage.?

The glut in the current supply of oil will decrease as demand will rise each year, said Morris. As production for some companies starts to rise again and oil prices stabilize, some jobs will reemerge.

“Whether oil stabilizes at $70 or $85 a barrel is nothing that I can forecast precisely, but in that range the employment opportunities in the space will improve fairly dramatically and the outlook for drillers and operators is also pretty good,? Morris said.

Article Author: Ellen Chang, Mainstreet

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Chris Faulkner: Case For a Crude Oil Boomerang

The story didn’t get much attention when Bloomberg broke it Monday afternoon last week, but now it seems to have hit all the big majors, including CNN Money as late as today.  OPEC’s Secretary General Abdulla al-Badri said oil could return to $200 per barrel.  Harold Hamm, Continental Resources CEO was also quoted last week saying oil could at least top $100 soon, for the same reason:  Shale depletion curves will eventually catch up with falling investment in new production.  When that happens, there will be a supply shortage.

What’s been missing from the media’s coverage is the connection of why this is happening, and precisely why Mr. al-Badri was allowed to make such a claim.  After all, why would OPEC let its top administrator jawbone public commentary like that, especially now?

First, the headline:  Shale wells decline quickly.  In the industry, we typically project no more than a 3-year payback, then we’re happy to get the tail production for the next two, three or more decades.   Last week, Baker Hughes reported the single largest drop in working oil and gas rigs in over three decades, as 90 rigs fell silent.  Counting the 49 offshore rigs and 12 inland platforms in the tally, the total number of rigs working as of January 30, 2015 in the U.S. is 1,543.  The number peaked the week of September 12, 2014 at 1,931; so 388 rigs have thus far stopped working.

Contrast that with the weekly supply numbers reported by the Energy Information Administration.  The last data from January 23, 2015 reflects 9.213 million barrels per day, the most oil produced from American soil since the agency started tracking this in 1983.  Obviously, production has not caught up with the slowdown in rigs, but eventually it will.  Supply numbers are still reflecting how prolific the oil boom is, or was.  Even a reduction of 20-percent of the working rigs has resulted in a production increase.  That’s the definition of prolific.

The steep decline of shale well output will eventually show up in the reports, and the weekly output number will precipitously decline.  When that will happen is anyone’s guess.  Rigs didn’t start slowing in earnest until mid-December, so we could still be months away from softer production numbers.

Here’s the scenario most are not talking about:  Rigs will continue to lie down.  That’s what Mr. al-Badri meant when he spoke of less investment.  Simultaneously, production will eventually slow down.  When it does, the United States will be in a supply deficit.  At that point, Mr. al-Badri, Mr. Hamm and even Mr. Pickens should be right.  Prices could shoot back up quickly.

What is more alarming is what OPEC is likely to do, or not do, about that shortage.  Throughout this decline, Saudi Arabia has held firm, and dragged the rest of OPEC with them, that there’s no budging on the 2011 quota agreement of 30-million barrels per day.  As U.S. production increased, they had to find other sources for that oil.  China and the Pacific Rim, Europe, other destinations in the Middle East, have absorbed all but approximately 2 million barrels of oil that was formerly America-bound.

When production finally slows domestically, the looming question is whether OPEC will re-direct shipments, or whether the U.S. could face a self-induced supply shortage?  There certainly won’t be enough new rigs drilling to fill the void quickly, and we’ve already seen it could take years to ramp this back up to where we were two weeks ago.

Thus, the United States could again find itself subject to OPEC’s mood swings.  If the impending void doesn’t get filled from somewhere, supply shortages could be substantial enough to jeopardize daily requirements, which would certainly create upward pressure on prices.  In 1973, Saudi imposed a 400-percent price hike to a whopping $12 dollars per barrel.  If that happened again, there’s the $200 number, based on today’s levels.

At this point, nobody is estimating how much current production might drop, and there’s no way to predict how many rigs will eventually find themselves on temporary hiatus.

Could that be why OPEC allowed its version of an office manager to float out a scenario of oil paralysis coming soon?  If it wasn’t for the level of disdain between Riyadh and Washington these days, such a scenario might not even seem plausible.

Written by: Chris Faulkner, CEO of Breitling Energy Corporation and author of the recent book, “The Fracking Truth.” He is also the producer of the documentary, “Breaking Free: The Shale Rock Revolution.”

Perfect Supply Storm Shaping Up for Crude? (OilPro.com)

When oil prices began falling last summer, analysts were slicing and dicing the wherefores and whys that, minus a major catalyst similar to that of 2007, why did prices start a free-fall? “Perfect Storm? many theorized, alluding to the strong dollar, declining demand due to economic stagnation in Europe combined with ‘only’ 7.5% growth in China, Vladimir Putin and his antics in Crimea and the Ukraine, and rapidly growing production from the United States due to the new-found national F-bomb: Fracking.

In mid-October, Saudi Arabia clearly set its sights on America’s shale revolution, by specifically targeting a price increase of Middle Eastern oil bound for the U.S., while raising the price of the same crude destined for Europe and Asia. That sent shock waves through the markets, and oil valued over $100 a barrel quickly found itself only worth $90, then $80, then $70. Without any further catastrophic catalyst, that same oil is now trading near $45 per barrel. World demand last summer isn’t down drastically enough by any means to warrant a 60-percent drop in price. And production isn’t up substantially more than it was when oil was at $107 to warrant the price falling off a cliff.

There was one clear and obvious external factor that led to the precipitous drop: A Saudi-led vendetta against the United States. Whether the catalyst was market share, flexing their weakening muscles, or a disdain of recent U.S.-Saudi relations is anyone’s interpretation, but clearly Saudi is out to slow things down in the American oil patch. Furthermore, they were so willing to do this that they jeopardized the very fabric of OPEC, virtually alienating those countries less capitalized, like Venezuela.

However, there’s another perfect storm that may be in the making. OPEC’s Secretary General, Abdalla El-Badri was quoted this week saying he thinks oil could snap back to $200 a barrel due to a lack of investment in new production. Analyst estimates of lower production and less spending on new development grace the headlines virtually every day. Yet, output from U.S. shale has continued to climb, peaking thus far at 9.192 million barrels per day the week of January 9, 2015.

Another component of this perfect storm is the decline curve of shale wells. Known to produce high volumes of oil initially, shale wells decline within the first three years to a level of production they generally maintain for up to several decades. But the fireworks happen in the first three years. That means every shale well across the U.S. is somewhere on that declining curve right now. With less production coming on line, eventually the steepness of the decline will surpass the much slower new-growth, and we will see declining domestic production.

Trend reversals in the oil field take time. By summer 2015, when production declines are fully in effect, it will have been nearly a year since prices first cracked. Most likely, investment in new rigs will be slower to return, so you could rather easily project this as a 2-3 year trend of lower supply in the United States.

Now for the rest of the perfect storm. Despite the current international recession combined with the positive effects of improved conservation measures, world oil demand estimates project 119 million barrels consumed per day by 2040 according to the Energy Information Administration. Bottom line: Macro demand is still trending up.

According to the 2011 production quota agreement, OPEC is producing 30 million barrels of oil per day, and that has been reallocated to other parts of the world as U.S. production increased. As investment in new oil development slows down, so will U.S. output. If OPEC, primarily led by Saudi Arabia, refuses to either re-allocate shipments of current production, or refuses to increase production to meet declining U.S. inventories, America could find herself in another crisis like we were in 1973.

One other component of the storm could be the icy relations between Washington and Riyadh. Because of several rebuffs by the Administration to Saudi requests for allied assistance (dating back to the Arab Spring), Saudi Arabia seems much more inclined to ignore American energy interests over their own.

In 1973 and 1974, Americans lined up to buy gas. Rationing prevailed as the nearly seven-month embargo cut supplies by 25-percent to all Israeli allies during the brief Yom Kippur war. Oil prices more than quadrupled to a whopping $12 per barrel. The Nixon Administration imposed price restrictions that would last into the Reagan Administration. In 1975, President Ford signed the Energy Policy and Conservation Act, creating the Strategic Petroleum Reserve, further regulating oil prices and imposing the ban on all crude exports from U.S. mainland ports except to Canada.

Could we be shaping up for another oil shortage, when just a few months ago the problem was just the opposite? Time will tell. When the Secretary General of OPEC, the man charged with carrying out the Minister’s orders says it is possible, then prudence would say it is certainly worth considering. Continued investment in America’s energy future is the clear and obvious answer.

Written by: Chris Faulkner, CEO of Breitling Energy Corporation and author of the recent book, “The Fracking Truth.? He is also producer of the documentary, “Breaking Free: The Shale Shock Revolution.?

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Saudis target U.S. oil boom: Opposing view (USAToday.com)

OPEC seeks to regain its clout.

This crash in oil prices isn’t about supply and demand. It’s about OPEC, and by OPEC, I mean specifically the Saudis, doing their level best to bring a halt to America’s shale oil boom, and with it, much of the American economy.

Their thought process was that if they could squeeze out some U.S. producers, OPEC would regain its dominance and force the United States back into foreign oil dependence.

And so far, it may be working, temporarily. Some smaller producers have fallen by the wayside, and many of the major oil companies and oil field service companies have announced major layoffs, which will hurt the U.S. economy very quickly.

But in my opinion, it’s going to backfire in the long run. It may be a bump in the road for the shale revolution, but it’s nowhere close to the end.

Saudi Arabia, whom we gratuitously refer to as our ally, just didn’t like someone else taking center stage, so the best way the Saudis could regain the spotlight in their eyes was to maintain their high production levels and flood the market with low-priced crude.

In that respect, there is an oversupply, but that’s just temporary. Other situations around the world, as well as the very harsh winter we’re having right here in North America, will continue to deplete the glut.

All the OPEC members are bleeding money right now, but I believe that Saudi Arabia wouldn’t move to cut production until someone over there (perhaps Ali al-Naimi, the Saudi petroleum minister) has a level head and sees that their huge stacks of riyals are getting smaller and smaller.

What started out to them as a “let’s show Americans how we actually can control their market” turned into a big, fat “oops,” which is not only harming their own country in the long run, but all of the OPEC countries in the immediate run. And it’s hitting the other OPEC countries much harder than Saudi Arabia.

I think very soon the Saudis will hit the panic button. It’s a rich country, but they can’t lose money forever.

Opinion by: Chris Faulkner, CEO of Breitling Energy Corporation and author of the recent book, “The Fracking Truth.? He is also producer of the documentary, “Breaking Free: The Shale Shock Revolution.?

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Oil layoffs hit Concho Valley (ConchoValleyHomepage.com)

Oil prices are closing less than $50 per barrel and the slowdown is costing some oil field workers their jobs. Experts said already several thousand energy employees have lost their jobs within the last 60 days.

In Sterling County, pumpjacks are pumping oil into nearby tanks. On the surface, it seems like it is business as usual.

Yet, with oil prices falling sharply below $50 a barrel, Dallas-based Breitling Energy CEO Chris Faulkner warns it is a whole different ball game.

“We are in a new era of oil prices. That may be a decade’s worth of $55 to $80 oil,” Faulkner said.

Breitling Energy’s diversified much of its assets out of the Oklahoma, Kansas, and Mississippi line plain to the Permian and Midland Basins.

Fracking on a new well in Sterling County is scheduled to begin within the next month. He said he does not expect these lower oil prices to impact business in Sterling County.

“For us, we’re going to divest our Bakken stuff and we are going to focus on Sterling County. So, I think it changes. It’s company by company. It’s situation by situation,” Faulkner explained.

If it turns out a layoff is necessary, Faulkner assures it will not be a massive one.

“We’re going to only obviously be drilling only the best of the best stuff that we have in inventory. So, that means maybe less drilling in certain areas meaning maybe those folks will either get repurposed or they will have to be let go,” continued Faulkner. “I don’t think it will be a massive layoff or impact.”

Yet other companies, like San Angelo-based Sendero Drilling have already laid off 44 employees. They would not speak on camera; but, they did confirm it is possible more people will be laid off.

In this letter warning letter to the Texas Workforce Commission, Sendero Drilling Company President, Kirk Cleere, warns the layoffs could come in stages.

On the phone, Cleere said the amount of people laid off all depend on how long it takes for the oil industry to rebound.

Article Author: Stephanie Garland

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Chris Faulkner: New Methane Regulations Bad for America

The White House plans tough new regulations aimed at reducing methane emissions, specifically targeting the oil and gas industry - the golden goose of the Obama economic recovery.  This is another blow to the industry that fuels our modern lifestyle.

The swoon goes as far back as the Arab Spring.  The President’s response was laissez-faire, as he watched the overthrow from a New England golf course.  Then, when Saudi Arabia twice asked the United States for assistance with Syria and ISIS, the request was denied.  Subsequently, Secretary of State John Kerry has been courting the Kingdom’s arch-enemy, Iran, exploring a Tehran Embassy, with continued negotiations on easing, or lifting, Iran’s strict nuclear sanctions.

No wonder Saudi Arabia is attacking U.S. oil production.

In stark contrast, in two recent State of the Union addresses, the President heralded the American oil boom:

2013 State of the Union

“Today, no area holds more promise than our investments in American energy.  After years of talking about it, we’re finally poised to control our own energy future.  We produce more oil at home than we have in 15 years…we produce more natural gas than ever before, and nearly everyone’s energy bill is lower because of it.  And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.

Now, in the meantime, the natural gas boom has led to cleaner power and greater energy independence.  We need to encourage that.  And that’s why my administration will keep cutting red tape and speeding up new oil and gas permits.?

2012 State of the Union

“And nowhere is the promise of innovation greater than in American-made energy…Right now, American oil production is the highest that it’s been in eight years.  Not only that, last year, we relied less on foreign oil than in any of the past 16 years…we have a supply of natural gas that can last America nearly 100 years.  And my administration will take every possible action to safely develop this energy.  Experts believe this will support more than 600,000 jobs by the end of the decade.?

New Methane Regulations

Now, more red tape for the industry the President said he would support; this time aimed at reducing already-minimal methane emissions by 45-percent over the next 10 years.

The timing could not be worse.

When environmentalists pressured Canadian President Stephen Harper to impose needless restrictions on its oil and gas industry, he abruptly told the House of Commons in December:   “Under the current circumstances of the oil and gas sector, it would be crazy—it would be crazy economic policy—to do unilateral penalties on that sector.?

Expanded oil and gas drilling virtually single-handedly pulled America out of the deep recession that President Obama inherited.  There are an estimated 10 million Americans directly and indirectly employed through energy production.  Significant layoffs could send jobless claims soaring.

Increased domestic oil production, resulting in lower gasoline prices, will eventually be replaced by foreign oil from rogue nations who co-sponsor terrorism.   We could even find ourselves, given the tense nature of current foreign policy, where disruption to that oil could put us back to the days of gas lines, aka 1973, should OPEC do to supply what they’ve done to prices.  Hence, national security is certainly a consideration, not to be overlooked.

We are not in good strategic position as a result, and tightening the screws on a bruised industry is not the right answer.  Mr. Harper was spot-on.  For a myriad of patriotic reasons, now is not the time.

Opinion by: Chris Faulkner is CEO of Breitling Energy Corp., author of “The Fracking Truth,” and producer of the documentary, “Breaking Free: The Shale Rock Revolution.”

 

Gasoline Prices Won’t Stay This Low Forever: Bottom Could End First or Second Quarter (Mainstreet.com)

NEW YORK (MainStreet) — Crude oil prices may not see a retreat until later in the quarter as fuel prices continued their downward slide on Monday from a glut in supply and weakness in the global economy.

The continued weakness in crude oil prices has been a boon to consumers who are facing stagnant wages and higher food prices and health care costs. Of course, this trend negatively affects states where oil production is a major contributor of jobs and tax revenue.

While low gasoline prices won’t last forever, there is “still more downside to the market in the first quarter,? said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University’s Cox School of Business in Dallas.

“Demand for oil globally usually reaches a low in the first quarter, so I don’t anticipate a low price being reached until late first quarter or early second quarter of 2015,? he said.

Crude oil prices are reaching the “bottom currently,? after reaching record lows during the past six months, said Chris Faulkner, CEO of Breitling Energy, a Dallas oil and gas exploration and production company.

“We may have some room to slide toward $45 and test that number, but I don’t think we will break through $40,? he said.

Article Author: Ellen Chang

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Hydraulic Fracturing in the Gulf of Mexico, Under Magnifying Glass of Ecologists (Latino.Foxnews.com)

For this reason, one of the most important men of business within the industry, Chris Faulkner, states in his book “The truth on the Fracking” that the hydraulic fracture is one of the greatest opportunities that have been submitted to United States in recent years and believes that, even, could be the solution that the world seeks to climate change.

Washington, Jan 11 (EFE) .- The hydraulic fracture in the Gulf of Mexico is under the magnifying glass of environmental organizations in the United States, which this week denounced the government for not inform you about the activities that the oil companies carried out in this ocean basin to extract oil and gas.

The Government “keeps to the local communities in the dark about where, how and when” is used the hydraulic fracture in the Gulf of Mexico, said the Center for Biological Diversity in its complaint, the Efe that had access to the organization and appealed to a federal court in Washington, D.C.

The Center for Biological Diversity accused the Executive not to answer to their requests for information and, therefore, to violate the freedom of information act (FOIA) by which citizens have the right of access to federal information.

According to data from the association, the Office of Administration of Ocean Energy (BOEM) and the Office of Safety and Environmental Control (BSEE), that depend on the Department of the Interior, “have authorized the construction of at least 115 wells in the Gulf of Mexico in 2013, which constituted 15 percent of the planned for this year”.

According to their data, the extractions would occur on the coast so the more affected could be coastal communities of the Gulf, to whose shores arrived in 2010 a huge oil slick after the explosion of the Deepwater Horizon platform, operated by BP.

In addition, in its writing, the Center for Biological Diversity warning of the risks of this technique that consists in fracturing through pressurized water mixed with sand and chemical rocky areas of the basement in which they are held the gas and the “black gold”.

“In the Gulf of Mexico there is no transparency and we do not know what is happening, that chemicals are mixed with the water to break the rocks or if the hydraulic fracture is causing earthquakes”, explained to Efe Dr. in Climate Science Shaye Wolf, who works for the organization.

“The hydraulic fracture is related with low magnitude earthquakes,” said the scientist, that in a study on this phenomenon in California warns that in some occasions, the “’micro earthquakes? low magnitude that creates “intentionally” the “fracking” when drilling with water the basement may have greater consequences.

Precisely, a team from the University of Miami (Ohio) this week published a study in the journal Seismological Society of America (SSA) in which accounted for 77 earthquakes “closely related spatially and temporally with active operations of fracking” that were being carried out at a kilometer away from the town of Poland Township (Ohio).

The magnitude of these 77 earthquakes ranges from small quantities of a degree on the Richter scale up to 3, in what would be “one of the largest earthquakes induced by the hydraulic fracture in the United States,” according to the study consulted by EFE.

Scientists agree that there is still much to investigate, although it is true that the dispute of the environmental impacts of hydraulic fracture grow in parallel with its economic “boom” that turned to the United States in 2014 in net exporter of oil, this had not happened since 1995.

For this reason, one of the most important men of business within the industry, Chris Faulkner, states in his book “The truth on the Fracking” that the hydraulic fracture is one of the greatest opportunities that have been submitted to United States in recent years and believes that, even, could be the solution that the world seeks to climate change.

Speaking of the “Age of Oil” in comparison with the Stone Age and defends the “revolution of the fracking” with which the world has “a second chance at security, prosperity and international leadership”.

Leadership and risk, in any case, the complaint filed by environmentalists reflects the division of opinion in a country, that is a debate between the benefits of their natural resources and the risks, known or unknown, which could entail their exploitation.

Article Author: Beatriz Pascual Macías

Above is a translations of the Spanish article here.