A messaging war is heating up as stakeholder comments roll into the Energy Department around proposals to expand natural gas exports, but one concern with the process is not making it into writing: How will a potential leadership change at DOE affect the results?

In a call with reporters yesterday, John Felmy, chief economist for the American Petroleum Institute, said the organization was concerned that if Energy Secretary Steven Chu announces plans to step down, the turmoil of selecting and confirming a successor could move natural gas export questions to a back burner.

"That's a concern," Felmy acknowledged. "The president is committed to energy as a priority. ... He's committed to oil and gas in the debates, so I would hope for some really fast action if the secretary steps down."

Chu has not -- yet -- announced any such plan. But as senior DOE personnel have moved on to new jobs and Chu's counterparts at the Interior Department and U.S. EPA have announced their departures, many Washington observers expect Chu's announcement will come soon (EnergyWire, Jan. 11).

Departmental leadership changes typically come with a period of bureaucratic reshuffling and realignment. The question of how DOE should handle pending applications to export liquefied natural gas is partially pegged to a timeline: The department will continue to take public comments on a recently released economic study through Thursday and then will run a second round of comments for response to those initial inputs, lasting through Feb. 25 (EnergyWire, Dec. 6, 2012).

After that, DOE has said just that it will begin considering applications on a "case-by-case basis." A DOE spokesman did not respond to questions about how leadership change might affect the LNG decisionmaking process.

Yesterday, Mayor Dewey Bartlett of Tulsa, Okla., publicized a comment letter that his office said had just been submitted to DOE. "The process does not seem to have a set timeline for decisions or a sense of urgency," Bartlett wrote, speaking as one of a group of Midwestern mayors urging rapid approval of export projects. "In our collective view, it is time to bring a renewed sense of urgency to the approval process."

Bartlett was joined in the campaign by the mayor of Oklahoma City and those of Houston and Fort Worth, Texas.

API's Felmy said congressional opposition to exports, combined with the ongoing comment process, was a driver for the group's new outspoken approach to LNG exports -- as illustrated in a new advertising campaign and a series of recent press events (EnergyWire, Jan. 16).

"When you have both a senator and a representative start talking vocally about something that we feel shouldn't be an issue, then you have to start moving," said Felmy, referring to criticism from Rep. Ed Markey (D-Mass.) and incoming Senate Natural Resources Chairman Ron Wyden (D-Ore.) of LNG exports and DOE's economic study.

"You have to get the facts out," he said, "because I have learned in my 43 years in Washington that if you don't pay attention, bad things can happen, and they can happen quickly."

Updated at 8:46 a.m. EST.

House Democrats have joined in a congressional chorus of criticism aimed at U.S. EPA's plan to delay an investigation into groundwater contamination near hydraulic fracturing sites in Wyoming.

Illinois Rep. Jan Schakowsky and 19 co-signers sent a letter today to EPA Administrator Lisa Jackson, urging her to speed up the agency's probe of water contamination from oil fields around Pavillion, Wyo.

After releasing hotly contested draft conclusions in late 2011, EPA has extended the public comment period a number of times, most recently announcing that a final report would not be released until September (E&ENews PM, Jan. 10).

"The people of Pavillion -- whose water is riddled with unsafe chemicals -- deserve faster action," the lawmakers wrote.

The Democrats' letter comes a day after a similar one from Republican Sens. David Vitter of Louisiana and James Inhofe of Oklahoma, who also railed on EPA's eight-month delay, accusing the agency of prioritizing politics over science in its investigation (EnergyWire, Jan. 17).

EPA's initial results in 2011 showed that fracking fluid was present in deep groundwater but not in shallower drinking water -- still giving environmentalists the high-profile case they needed to back up claims of fracking's harmful effects. But those results were questioned when the U.S. Geological Survey tried to do further testing from EPA's two monitoring wells and found that one of them was not up to USGS's testing standards.

Industry has charged EPA with conducting sloppy research to raise public concern over fracking, a well stimulation technique that pushes chemical-laced water and sand deep underground to loosen up oil and gas. The agency is in the middle of a nationwide study into fracking's safety.

"We are very disappointed in this delay, which we believe must be the last," the Democrats wrote in today's letter. "As we await your findings, we ask that your agency continue to work collaboratively with state, tribal, and local agencies, as well as impacted residents, to protect public health and the environment."

Co-signers to the letter are Reps. Earl Blumenauer (Ore.), Matt Cartwright (Pa.), Steve Cohen (Tenn.), John Conyers (Mich.), Pete DeFazio (Ore.), Sam Farr (Calif.), Raúl Grijalva (Ariz.), Mike Honda (Calif.), Rush Holt (N.J.), Jared Huffman (Calif.), Barbara Lee (Calif.), Jim McDermott (Wash.), Jerrold Nadler (N.Y.), Jared Polis (Colo.), Mike Quigley (Ill.), Charlie Rangel (N.Y.), Carol Shea-Porter (N.H.), Niki Tsongas (Mass.) and Maxine Waters (Calif.).

Environmentalists slammed New Jersey Gov. Chris Christie for not acting before a moratorium on hydraulic fracturing in the state lifted yesterday.

The Republican governor conditionally vetoed a fracking ban passed by the Legislature in 2011, opting instead to institute a one-year suspension. Though New Jersey is not a target for unconventional drilling, opponents of fracking see Christie's move as an implied approval of fracking, which has taken hold in neighboring Pennsylvania and is being debated in New York. But the governor has stressed a need for caution.

"The potential environmental concerns with fracking in our state must be studied and weighed carefully against the potential benefits of increasing access to natural gas in New Jersey," he said in a statement accompanying his veto in 2011. "The decision on whether to ban fracking outright or regulate it for environmental protection must be developed on the basis of sound policy and legitimate science."

Fracking is often used to access oil and gas trapped in shale by blasting chemicals, sand and water deep underground. New Jersey does not have any known shale formations. Still, environmentalists there have witnessed development in Pennsylvania and elsewhere and are concerned about fracking's impacts on air and water, and about its release of methane, a potent greenhouse gas.

"Hurricane Sandy provides us a grim reminder of why we need to move away from extreme energy sources like fracking that are perpetuating climate change while threatening drinking water, public health and the environment," Jim Walsh of the environmental group Food and Water Watch said in a statement.

Christie also vetoed a bill in September that would have banned New Jersey treatment plants from accepting fracking wastewater. News reports have said Garden State facilities are taking on waste from Pennsylvania fracking despite lacking the equipment to purify the chemicals used in the process, though at least one facility has denied accepting the waste (EnergyWire, June 6, 2012).

Environmentalists are now calling on the Legislature, which had passed the wastewater treatment measure with bipartisan support, to override the governor's veto on that bill.

"If legislators campaign less and govern more by emphasizing good public policy now like banning frack waste and fighting the lifting of the moratorium, they'll be pleasantly surprised in coming elections," said Dave Pringle, campaign director for the New Jersey Environmental Federation.

One lawmaker, Republican Assemblyman Declan O'Scanlon, introduced a bill this month that would prohibit fracking in New Jersey until U.S. EPA completes a nationwide study, due out in late 2014, and until the state Department of Environmental Protection does its own risk analysis.

NEW YORK -- Global mergers and acquisitions activity in upstream oil and natural gas posted $232 billion in total spending in 2012 and was paced by three massive transactions, Wood Mackenzie said in a market analysis.

The exploration and production sectors were led in terms of market impact by Russian energy giant Rosneft's purchase of a smaller Russian oil producer, TNK-BP, for $58 billion. That deal potentially makes Rosneft the largest crude supplier on the planet in terms of liquids output.

Russia's Federal Anti-monopoly Service still has to clear the merger, but news reports yesterday indicated authorities had approved the sale. Dow Jones Newswires said the merger stands to hand BP PLC a 19.8 percent stake in Rosneft as part of the British oil giant's plan for exiting TNK-BP.

The other big M&A deals were the CNOOC-Nexen deal and Freeport-Plains, Wood Mackenzie said. China National Offshore Oil Corp., China's largest offshore upstream producer, inked a $15.1 billion takeover of Canada's Nexen Inc., though approval is still pending from U.S. regulators because of Nexen's assets in the Gulf of Mexico.

Freeport-McMoRan Copper and Gold Inc., a copper miner, struck a deal to purchase Plains Exploration and Production Co. for upward of $9 billion. Plains is focused on plays in California, Texas and the Gulf.

Overall, the manager of Wood Mackenzie's M&A analysis service, Luke Parker, said 2012 was a strong year with 456 transactions, though it failed to eclipse 2010, when M&A upstream deals were counted at 466 worldwide.

"The majors have very strong balance sheets and cash flow, so we can expect an uptick in activity," Parker added of the coming year. "The Asian NOCs [national oil companies] will continue to play their part, with a second wave of players looking to make up ground on their Chinese counterparts. For both groups, small to mid-size asset acquisitions focused on long-life resource themes will remain the focus."

The report says key areas to watch for are U.S. tight oil, Canada unconventional gas, exploration-focused corporate M&A and big liquefied natural gas projects, in east Africa in particular. Wood Mackenzie forecasts deal valuations to continue a steady upward trend, given what the firm called "growing industry confidence in the long-term sustainability of high oil prices."

Wood Mackenzie noted the emergence of Chinese energy firms specifically, reporting $46.9 billion spent by Asian national oil companies.

CNOOC's acquisition of Nexen "was the headline deal, but in total, CNOOC, Sinopec and PetroChina spent over $31 billion in 2012," Parker said, adding that he expects the trend to continue.

Major Western oil companies, meanwhile, shifted from the seller class to the buyer. BP was the notable instigator, with its exit from TNK-BP, and Exxon Mobil Corp. and Royal Dutch Shell PLC were the only majors to be considered active buyers in 2012.

Parker also noted that LNG has seen more than $60 billion in M&A action over the last five years. The sector is one to watch, he said.

"LNG-focused M&A has boomed," he said. "We fully expect the market for LNG assets will remain buoyant, with activity again concentrated on pre-development projects during 2013."

Energy companies are looking far and wide for workers. One place they ought to be looking is among people with disabilities, according to a new report from Quebec.

Energy companies have tried to recruit U.S. union workers and war veterans to their ranks, but some of those jobs could be filled by Canadians with certain types of disabilities, said Ken Fredeen, a co-author of the report, titled "Rethinking Disability in the Private Sector."

"They need to think more out of the box in terms of the value these people add to the organization," he said.

Executives at energy companies Irving Oil Corp. and Husky Energy Inc. were interviewed for the report from Canada's ministers of finance and workforce development and the nation's Panel on Labour Market Opportunities for Persons With Disabilities. Neither company was available for comment on the report, but Fredeen said safety is a major concern for the oil and gas industry, and some employers in the field might hesitate to hire a worker who could be perceived as being at higher risk for a workplace injury.

"They are more cautious because of the safety issue, and that's a positive sign because it shows they are thinking about safety," he said.

But failing to reach a gold mine of potential employees could be a major loss for companies that are struggling to find workers to fill open jobs.

"Persons with disabilities are part of the under-represented category and another labor supply pool to consider to meet the growing labor shortages in the industry," Canada's Petroleum Human Resources Council said in a statement.

The organization often works with Viable Calgary, an agency in oil-rich Alberta that matches people with disabilities to jobs, including in oil and gas. In large exploration and production firms, for example, a person with a physical or intellectual disability might be capable of holding support or in-office roles.

In many cases, though, energy jobs are not a good match for disabled people.

"The majority of positions that are in demand are field work -- such as those found in drilling and geophysical/seismic work," the Petroleum HR Council said. "These roles often require work outdoors, long and irregular hours, understanding of safety rules and precautions, dealing with potentially hazardous material and equipment, considerable travel and living in isolation. ... That's not to say a person with a physical disability couldn't do the job, but some roles in oil and gas just aren't for everyone -- regardless of whether they have a disability or not."

Click here to read the report.

Siena College's survey of New York voters has found more opposition than support for allowing hydraulic fracturing in the Empire State.

With 44 percent of respondents against fracking and 40 percent in favor of the oil and gas extraction method, the poll still shows a narrow margin between the two groups.

"This continues to be an issue where neither supporters nor opponents has succeeded in getting a majority of voters to their position," Siena pollster Steve Greenberg said in a statement. "And it continues to be an issue that is a political land mine for the governor as he has to make a decision that will anger as many voters as it pleases."

New York Gov. Andrew Cuomo (D) has said the state will soon decide whether to allow companies to carry out fracturing -- the process of pumping water, sand and chemicals into buried shale rock to release trapped oil and gas. Environmental groups have decried the practice, saying it has the potential to pollute the air and contaminate groundwater. New York officials have held off on a decision for more than four years as they watched how fracturing played out in neighboring states, including gas-rich Pennsylvania.

Previous Siena polls have shown that New Yorkers are largely split on the matter. In October and December 2012, the last two installments of the survey, 36 percent of participants opposed fracturing, while 42 percent were in favor of allowing the technique (EnergyWire, Dec. 6, 2012).

This month's results also posted a drop in the number of people who are undecided about fracturing. Sixteen percent of respondents said they did not have an opinion or did not have enough information to form an opinion on the issue, down from 22 percent in December. In May 2012, the first month of the Siena poll, 27 percent said they were unsure.

An increase in knowledge about fracturing could be spurring a change in public opinion on the issue, Greenberg said, although he added that the split between opponents and supporters is still minuscule.

"To me, the issue really is this remains a nearly 50-50 issue. ... No matter what [Cuomo] decides, nearly half the voters in the state are going to be unhappy with his decision," Greenberg said.

The Siena poll is based on telephone calls made Jan. 10-15 to 676 New York voters. It has a 3.8-point margin of error.

Interior Secretary Ken Salazar suspended all deepwater drilling in the Gulf of Mexico after the BP oil spill there in 2010. A few months later, he lifted the ban, and drilling levels in the Gulf have since overtaken those before the accident.

His response to the Macondo well incident is indicative of his tenure in Obama's administration -- at turns he has upset and delighted both environmentalists and the oil industry.

"Early on, we had our differences in opinion," said Jack Gerard, president of the American Petroleum Institute, pointing out that he did not agree with Salazar's stance on opening federal land to drilling. "Over time, we found more common ground on those issues."

Salazar announced Wednesday he is leaving his post to return to Colorado, the state he represented in the Senate (Greenwire, Jan. 16). Insiders have floated several names as potential replacements for Salazar, including Interior Deputy Secretary David Hayes and former New Mexico Sen. Jeff Bingaman (D).

Salazar has proposed tougher regulations for hydraulic fracturing, the process of sending water, chemicals and sand down well bores at high pressures to free up previously unattainable reserves of shale oil and natural gas. He also greenlighted more than 10,000 megawatts of renewable projects on public lands, clearing the first offshore wind farm, the Cape Wind project in Massachusetts.

Despite these developments, some environmentalists have criticized Salazar for his "all of the above" energy strategy.

"It's sad and embarrassing that we went right back into offshore drilling after the disaster in the Gulf," said Jacqueline Savitz, deputy vice president of Oceana, a Washington-based environmental advocacy group (Bloomberg/Fuel Fix, Jan. 17). -- BS

Refining company Flint Hills Resources LLC told U.S. regulators that a North Dakota pipeline system has been losing traffic to railroads as more oil companies ship crude via train.

Flint Hills, a unit of Koch Industries Inc., claimed that Enbridge Inc.'s plans to expand its pipeline network in the Bakken Shale play will not slow business for the region's railroad companies, which have emerged as competitors. "Rail transportation is becoming more competitive and will continue to take barrels away from the Enbridge North Dakota system," Flint Hills said in a filing with the Federal Energy Regulatory Commission, adding that "this trend is not temporary."

Pipeline infrastructure has been slow to catch up to high demand for transport out of the Bakken Shale region in North Dakota, which produced 747,000 barrels of oil per day in October, according to the Energy Information Administration.

"We are seeing reduced volumes on our North Dakota system as some producers seek alternate transportation options to take advantage of favorable oil pricing in other markets," said Graham White, an Enbridge spokesman in Calgary, Alberta.

Rail is typically more expensive than pipeline transport, although its flexibility and existing infrastructure have both contributed to the surging freight business for oil (Edward Welsch, Bloomberg/Fuel Fix, Jan. 16). -- BS

An estimated 9 million barrels a day of extra gasoline and diesel could enter the world supply over the next five years, according to a report from Hart Energy.

The increase is attributed to refinery expansion projects that could bring competition for U.S. exports.

But analysts say rising demand over the same time period should protect U.S. markets in the short run.

"There are many grand announcements that are made, and then they don't come to pass," said Andrew Lipow, president of Lipow Oil Associates. He added that he expects demand for fuel to grow in Africa, China, India and the Middle East.

The first refinery expansion projects are expected to come online in Asia and the Middle East, far from the Latin American states that are the biggest foreign buyers of U.S. refined products.

"It really is a global market, but we have a competitive advantage in the United States in supplying Latin America and perhaps Europe," said Roger Ihne, a principal at Deloitte LLP, adding that cheaper natural gas also gives the United States a leg up compared with other markets.

Lipow expects several refineries to close as new projects come online or expand. San Antonio-based Tesoro Corp. recently announced it would scale back production at its Kapolei refinery in Hawaii, perhaps marking this trend.

The Hart analysis, "Global Crude, Refining & Clean Transportation Fuels Outlook to 2035," includes categories for gasoline and diesel demand and trade flow by sulfur (Jeannie Kever, Fuel Fix, Jan. 17). -- BS

Alberta is short on cash lately due to the huge price gap between Canadian and U.S. crude oil prices.

"On the U.S. Gulf Coast, Mexican Mayan heavy crude, which is very similar to our bitumen [blend], is getting $94 a barrel today while ours is $48 a barrel," said Alberta's Energy Minister Ken Hughes. "We are giving a $30 billion benefit to the American economy because of this. Is that in our national interest?"

Hughes is concerned about the Bakken Shale oil play in North Dakota, which may be driving prices down for both American and Canadian companies. He worries oil may follow the same path as natural gas in North America -- too-cheap prices and a supply glut.

"Two years ago, no one would have said Bakken would double production, but it did," he said.

Alberta could develop pipelines to access better markets on the Pacific or elsewhere, although such lines have seen political and environmental push-back in British Columbia and the United States.

Hughes said Alberta must "engage British Columbians in a thoughtful conversation about what is in everybody's collective interest" (Dave Cooper, Edmonton Journal, Jan. 16). -- BS