The city of Southlake held a city-wide SPIN meeting Monday night to discuss natural gas drilling in Southlake. Chesapeake Energy also attended the meeting and gave a presentation concerning their company.
The natural gas deposits located inside the Barnet Shale have peaked the interest of companies like Chesapeake. The Barnet Shale is a very large natural gas reserve that stretches across 20 North Texas Counties. The gas is located about one-and-one-half miles below the surface. The reserve was originally thought to only stretch across 15 counties, but that number has been updated to 20 and could change again as drilling technologies improve.
To drill in the city of Southlake, a company must first buy or lease the mineral rights to a piece of property, then must apply for a specific use permit (SUP) and then a gas permit from the city.
Chesapeake Energy currently has leases in Southlake with Rucker and Gateway Church according to Jerri Robbins, the media relations officer for Chesapeake Energy Company, but the company is seeking no further leases at this time. The company indicated that it could revisit the decision to drill in the city at a later date.
According to Ken Baker, the director for planning and development services for the City of Southlake, city staff has not received applications from any drilling companies for the SUP that is needed to start drilling.
The permit fee for the SUP in Southlake is $15,000, which is double the cost of some of the surrounding areas. “The reason that the permit fees in Southlake are higher than surrounding areas is due to the submission requirements of the ordinance for an application to be submitted being more detailed and comprehensive than what other cities are requiring,” Baker said. “The administrative cost to evaluate and review a permit application is higher than other cities. The city believes that it is essential that the substantial information outlined in the ordinance be provided to properly evaluate drilling applications in a manner that is in the best interest of public health, safety and general welfare of the citizens.”
The permit fee is not the end of the fees paid for drilling rights.
“There is a requirement for a checking account requiring $15,000 to be deposited and maintained at a constant level for each pad site. There is a $15,000 padsite permit fee, as well as $8,500 per well fee, $1,500 pipeline fee, as well as double the price per foot for a pipeline easement, because the property values are increased in Southlake as compared to other cities in Southlake,” said Robbins.
The city intends for high permit fees to also cover road maintenance, all processing fees for the permits and the cost of any technical advisors the city would have to hirer to review the submitted information.
“It is the city’s intent that the financial costs associated with processing the gas drilling SUP application and enforcing the ordinance not be paid for by the taxpayers,” Baker said. “As such, the fees are set at a level in which the city feels that it adequately covers its administrative costs without passing this financial burden on to the taxpayer.”
In addition to high permit fees the city has also set strict guidelines on where drilling can occur in respect to how close it is to buildings and public property.
According to the city oil and gas ordinance, no well may be drilled closer than 1,000 feet from any residential structure or commercial building or within 1,000 feet from the boundary line of any abutting property with a public building, hospital, institution, or day care center.
Although Chesapeake has halted any further leasing for the time being other companies have not. The city does have rigorous requirements, but they say they are not trying to discourage drilling in their city; they are trying to look out for everyone’s best interest and according to Baker the city at some point might even lease their own land.
“There is no doubt that gas drilling will produce revenue for property owners and the city in terms of lease agreements and royalties and help stimulate the local economy,” Baker said. “However, it is the city’s job to ensure that the drilling and production of the gas be conducted in a manner that protects the public health and safety and the current economic investment of property owners by ensuring all necessary precautions for the safeguarding of people and property are implemented.”
Not all land owners in the city will be approached to lease their mineral, even if they want to be. Some places are reachable through drilling sites outside the city, but until any energy company actually applies for the permit and meets all the regulations no one will start getting royalty checks.
Tuesday, August 12, 2008
China Natural Gas
China Natural Gas, Inc. (OTC Bulletin Board: CHNG), one of the leading providers of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi’an, China, announced today that it plans to release second quarter 2008 financial results on Wednesday, August 13, 2008, after the market closes.
The Company will hold a conference call on Thursday, August 14, 2008, at 8:30 am ET to discuss its second quarter 2008 results. Listeners may access the call by dialing 1-888-256-1030 or 1-913-312-0685 for international callers. A webcast will also be available at http://viavid.net/dce.aspx?sid=000054D7. A replay of the call will be available through August 21, 2008. Listeners may access the replay by dialing 1-888-203-1112 or 1-719-457-0820 for international callers, access code: 7347448.
China Natural Gas, Inc., ("CHNG"), is the first China-based natural gas retailing company publicly traded in the U.S. It currently owns and operates a network of CNG retail filling stations as well as a 120 kilometer long compressed natural gas pipeline in Xi’an, China. Xi’an is a fast growing Chinese city supported by a population of approximately eight million and is the "gateway" to the broad Western regions of China. CHNG currently retails natural gas at company-owned filling stations, delivers natural gas services to residential, commercial and industrial customers, and converts gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles. Currently it is estimated that there are 5,000 buses and 20,000 taxis using CNG in Xi’an.
CONTACT
In the U.S.:
Ashley Ammon MacFarlane or Wei-Jung Yang
ICR, Inc.
203-682-8200
SOURCE China Natural Gas, Inc.
The Company will hold a conference call on Thursday, August 14, 2008, at 8:30 am ET to discuss its second quarter 2008 results. Listeners may access the call by dialing 1-888-256-1030 or 1-913-312-0685 for international callers. A webcast will also be available at http://viavid.net/dce.aspx?sid=000054D7. A replay of the call will be available through August 21, 2008. Listeners may access the replay by dialing 1-888-203-1112 or 1-719-457-0820 for international callers, access code: 7347448.
China Natural Gas, Inc., ("CHNG"), is the first China-based natural gas retailing company publicly traded in the U.S. It currently owns and operates a network of CNG retail filling stations as well as a 120 kilometer long compressed natural gas pipeline in Xi’an, China. Xi’an is a fast growing Chinese city supported by a population of approximately eight million and is the "gateway" to the broad Western regions of China. CHNG currently retails natural gas at company-owned filling stations, delivers natural gas services to residential, commercial and industrial customers, and converts gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles. Currently it is estimated that there are 5,000 buses and 20,000 taxis using CNG in Xi’an.
CONTACT
In the U.S.:
Ashley Ammon MacFarlane or Wei-Jung Yang
ICR, Inc.
203-682-8200
SOURCE China Natural Gas, Inc.
Natural Gas Autos Would Keep Wealth In US Economy
Somehow the major advantage of using compressed natural gas seems to have escaped Daniel Sperling. The U.S. has plenty of CNG. High gasoline prices might be painful to consumers but they're not a destroyer of wealth. They're just a transfer of wealth from one party to another. In the case of gasoline, much of that transfer of wealth is from U.S. consumers to the Middle East. In the case of CNG, wealth does not exit the U.S. economy.
SAN FRANCISCO (Dow Jones)--The notion of spending taxpayers' money to help fill U.S. roads with natural gas-fueled vehicles faces a major test when voters in California, the nation's largest auto market, go to the polls in November.
Natural gas providers are spending millions of dollars on advertising to convince Californians to pass a ballot initiative allowing the state government to invest in the now-tiny market for natural gas-fueled cars and trucks. The push comes as gas producers, emboldened by a windfall of domestic production, press federal lawmakers to help expand the market for gas as a means for reducing dependence on foreign oil and cutting greenhouse-gas emissions.
If the California ballot initiative passes, up to a million vehicles fueled by compressed natural gas, or CNG, could ultimately end up on the state's roads. If the proposal - called Proposition 10 - fails, backers will face a tougher task selling authorities on the wisdom of investing in infrastructure for natural gas-fueled vehicles, compared with spending on biofuels or electric cars and trucks.
"Natural gas is on the menu of possible fuels for the future," said Jim Boyd, a member of the California Energy Commission. "Its carbon footprint isn't as good as totally non-carbon fuels. But as we transition to alternative fuels, there could be a pathway to a future that includes natural gas for while."
CNG proponents also point to the benefits that switching to a natural gas- heavy vehicle fleet can bring in shoring up the nation's energy security. Big U.S. natural gas discoveries and forecasts for larger reserves have emerged just as oil and gasoline prices have skyrocketed, forcing energy issues onto the front pages and into the speeches of both presumptive presidential candidates.
SAN FRANCISCO (Dow Jones)--The notion of spending taxpayers' money to help fill U.S. roads with natural gas-fueled vehicles faces a major test when voters in California, the nation's largest auto market, go to the polls in November.
Natural gas providers are spending millions of dollars on advertising to convince Californians to pass a ballot initiative allowing the state government to invest in the now-tiny market for natural gas-fueled cars and trucks. The push comes as gas producers, emboldened by a windfall of domestic production, press federal lawmakers to help expand the market for gas as a means for reducing dependence on foreign oil and cutting greenhouse-gas emissions.
If the California ballot initiative passes, up to a million vehicles fueled by compressed natural gas, or CNG, could ultimately end up on the state's roads. If the proposal - called Proposition 10 - fails, backers will face a tougher task selling authorities on the wisdom of investing in infrastructure for natural gas-fueled vehicles, compared with spending on biofuels or electric cars and trucks.
"Natural gas is on the menu of possible fuels for the future," said Jim Boyd, a member of the California Energy Commission. "Its carbon footprint isn't as good as totally non-carbon fuels. But as we transition to alternative fuels, there could be a pathway to a future that includes natural gas for while."
CNG proponents also point to the benefits that switching to a natural gas- heavy vehicle fleet can bring in shoring up the nation's energy security. Big U.S. natural gas discoveries and forecasts for larger reserves have emerged just as oil and gasoline prices have skyrocketed, forcing energy issues onto the front pages and into the speeches of both presumptive presidential candidates.
Natural Gas Investor
Energy futures are now the hottest sector on Wall St. Some are calling energy stocks the new ?tech bubble?, with all sorts of speculative players leaping into the market. Oil, for example, is trading about 70% higher than it was a year ago. This despite the fact that global supply is still adequate to meet demand. Fund managers are worried, though, that any significant new disruption of supply -through terror attacks, war, or more hurricanes -could really throw a monkey wrench into the global economy. Another lingering worry among analysts is the world"s limited excess capacity, or supply buffer, which is hovering at only 1 percent above daily global consumption of 82 million barrels. Suddenly, everyone is trying to hedge their energy bets!
"In our judgement, oil doesn?t belong where it is," says energy analyst George Caspar. "That doesn?t mean that it can?t go up from here," he adds, "because the market seems to want it to go up."
Caspar works with Robert W. Baird & Co. out of Milwaukee, and on the natural gas side of the equation, he sees the majors moving on to hunt for bigger fish in the mid and far east, leaving independents to work on finding more domestic supply. Which they are doing but, he says, "the decline curves are getting more severe, so that may be one of the critical points influencing prices, But if gas stays above the $6 level it?s going to be very profitable to accelerate drilling activity," he notes. "What?s happening in gas is going to encourage increased drilling, particularly in CBM."
"In our judgement, oil doesn?t belong where it is," says energy analyst George Caspar. "That doesn?t mean that it can?t go up from here," he adds, "because the market seems to want it to go up."
Caspar works with Robert W. Baird & Co. out of Milwaukee, and on the natural gas side of the equation, he sees the majors moving on to hunt for bigger fish in the mid and far east, leaving independents to work on finding more domestic supply. Which they are doing but, he says, "the decline curves are getting more severe, so that may be one of the critical points influencing prices, But if gas stays above the $6 level it?s going to be very profitable to accelerate drilling activity," he notes. "What?s happening in gas is going to encourage increased drilling, particularly in CBM."
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