Elon Musk to Start Fracking? When did you ever think you would see “Elon Musk” and “fracking” in the same sentence? by bobscaping, Jan 24, 2021
… Let’s try to get this straight…
To be self-sufficient by providing his own super-chilled methane for SpaceX launches to Mars, Elon’s going to become a fracker. And since he recently moved to Texas, that would make him the wealthiest Texas
oil gas man… ever. Shazam! Where’s your 10-gallon hat Elon?
One might think he would just source that liquified natural gas (LNG) from the marketplace to save himself building a gas processing plant, but let’s not get ahead of himself. You never know if this is his full plan, after all.
Dreaming BIG is one thing, but as we’ve seen with oil and gas leases, or what some call mineral rights, there can be ‘flies in the ointment’ as to who owns what. This has landed the case in Texas court, with the hearing set for next month.
Apparently, the case revolves around some acreage that contains two wells that were described in one story as “dry holes” or “abandoned wells,” neither being a good sign for a veteran Texas oilman, let alone a rookie fracker. Too funny! Serves Elon right, for betraying humanity. Besides, he ought to spend some of his money cleaning up the mess on earth before polluting mars with humans, and not via the polluting technology of carbon capture.
We shouldn’t make any assumptions, for fear of that old saying coming true about “assume” – and ‘making an ass out of you and me.’ There could be far more involved than just using frozen dinosaur farts to power the first rocket to Mars. After all, he has offered $100 million to whoever invents the best carbon capture technology. Most of which has been proven to pollute as badly, if not more so than burning fossil fuels, and can kill in an instant.
Use your imagination, Elon is definitely using his!
Elon Musk Fights For Gas Wells In Texas To Drill Fuel For Mars Rockets by Ramish Zafar, Jan 23, 2021, wccftech
… Now, as SpaceX chief Elon Musk has officially moved to Texas, his company is head to head against a privately held oil and gas exploration and production company Dallas Petroleum Group, LLC (DPG). The dispute is centered around SpaceX’s access to wells in Cameron County, Texas for Methane, which will fuel Starship’s full-flow staged-combustion Raptor engines.
This dispute, which is currently being evaluated by the Texas Railroad Commission and the 445th District Court of Cameron Country involves the possession of two wells located in a 24-acre area in Cameron County, with SpaceX’s land acquisition affiliate Dogleg Park and Dallas Petroleum each claiming that they have the sole rights for using the wells.
SpaceX Waits As Hearing For Transfer Of Methane Wells For Starship Nears
The dispute started in May last year when Dogleg secured the right to operate the two wells (2R and 3) following which DPG locked the well site and stopped Dogleg from entering. It also sued both Dogleg and three other companies for both infringing its rights and for not recognizing that it is the sole owner of the 24 acres of land surrounding these wells.
Prior to the SpaceX affiliate securing the rights, DPG had in fact entered into a purchase and sale agreement (PSA) with Texas-based Sanchez Midstream Partner, LP. The PSA document had explicitly stated that “Sanchez Midstream Partners, LP, including its related entities and affiliates [EMPHASIS ADDED]” would sell their rights to the property that was the subject of the document to DPG.
However, the ‘hoodwinkery’ (if we must use such a term) took place in the Conveyance, Assignment and Bill of Sale document that the PSA required Sanchez Midstream to execute. This document was entered into by SEP Holdings IV, LLC, another company affiliated with Sanchez Midstream and also operating from Texas. But it did not include the ‘related entities and affiliates’ clause highlighted above. This, as you’ll see, turned out to work in SpaceX’s favor more than two years later when Dogleg Park entered the picture.
Did Lack Of Due Diligence From DPG’s End Tilt Tables In SpaceX’s Favor?
As it turned out, the record title of the 24 acres under dispute was in fact held by a third entity dubbed as Sanchez Oil & Gas Corporation (SOG) who shares its address in Texas with Sanchez Midstream. So while as a Sanchez Midstream affiliate SOG was bound by the PSA, the fact that the Conveyance document did not explicitly contain the aforementioned ‘affiliates’ clause, SOG was able to conduct additional deals for the land and the wells.
The first of these deals took place in May last year when Dogleg leased the land from SOG, and the second took place in September when it entered into an agreement to purchase the land. Following the May deal, DPG went ahead and denied Dogleg access to the land and proceeded to file a Lis Pendens (suit pending) notice for the property.
It was in this notice that it explicitly mentioned SOG as the land’s latest owner – a fact that Dogleg points out in its countersuit against DPG.
The Notice of Lis Pendens as cited by Dogleg Park in its countersuit against DPG.
While Dogleg allegedly secured the surface estate to the land from SOG, the mineral estates have been secured by another SpaceX affiliate Lone Star Mineral Development, LLC. Lone Star has shared a plethora of lease documents with the TRC including those that mention these mineral estates as well. This sharing came in response to the Commission pointing out that Lone Star did not share any evidence for its right to operate the properties that DPG claims to own.
The RRC asked Lone Star to provide these documents after the company complained to the regulator that the RRC Form P-4 which certifies the transfer of operator from one entity to another were not being signed by DPG. In this complaint, the SpaceX affiliate also states that it has acquired, “oil and gas leases covering in excess of 79% of the mineral interest” of wells 2R and 3.
The Mineral Deed for a tract of land transferred to Lone Star. Image: RRC records
SpaceX Affiliate Secures More Than 79% Of Crucial Mineral Rights For Drilling In Cameron County
So while Dogleg’s ownership of the surface interests of the land took place via the agreement with SOG, the mineral interests were acquired by Lone Star – who is now pressing the RRC to grant it operational right to the wells as well.
For the uninitiated, in Texas law mineral rights hold precedence over surface interests, so at the surface (forgive us) it appears that SpaceX is in quite a strong position.
While neither the court documents nor the lease documents or the RRC complaint state that the minerals from the wells will be used for Starship, Lone Star’s attorney Tim Geroge’s statements made before the RRC in yesterday’s hearing for his company’s complaint confirm that this will be the case. Mr. George confirmed that Lone Star will extract methane from the ground, and given that the Raptor engine uses this as its fuel, the rest is self-explanatory. Now that the hearing is complete, RRC Judge Jennifer Cook will deliver a decision at her discretion which will then have to be approved by the commission’s commissioners.
The Cameron Country court is set to hear the case next month and the future of SpaceX’s plans to drill on these lands unencumbered will be clear once both the court and the RRC reach their decisions. …
SpaceX wants to drill for Natural Gas in the RGV by Jeremiah Wilcox, Jan 23, 2021, Valley Central
BOCA CHICA, Texas (KVEO) — SpaceX held a meeting with the energy regulators on the idea of potentially drilling for natural gas here in the RGV.
SpaceX wants to drill wells close to the launch pad, they said in a meeting with the Texas Railroad Commission.
“We don’t know what’s going on,” said Jim Chapman, Friends of Wild Life Corridor President.
We’ve reached out to get the transcripts of the meeting and was told the request will take weeks.
This creates more questions than answers for Chapman.
“Is the natural gas they would get liquefied natural gas and use that for rocket,” he said.
It isn’t clear what the drilling would be specifically used for but there’s a lot of environmental implications impacting the area.
“We need to know what they’re planning the FAA and other agencies evaluate the environmental implications you know most of the land out there is public land,” he said.
As SpaceX continues to reach new heights…community members want to make sure they’re not left behind.
“We need to know what’s going on and that needs to be evaluated rigorously,” he said.
SpaceX Plans to Drill for Natural Gas Near Texas Launchpad by Sergio Chapa with assistance by Akshat Rathi and Rachel Adams-Heard, January 22, 2021, Bloomberg
Elon Musk recently moved to Texas, where he launches some of his rockets and is building a battery factory. Now, for good measure, he plans to drill for natural gas in the state.
The billionaire’s SpaceX intends to drill wells close to the company’s Boca Chica launchpad, it was revealed during a Friday hearing before the Railroad Commission of Texas, the state’s energy regulator.
Production has yet to start because of a legal dispute between the SpaceX subsidiary Lone Star Mineral Development and another energy company. Tim George, an attorney representing Lone Star, said at the hearing that SpaceX plans to use the methane it extracts from the ground “in connection with their rocket facility operations.”
While it’s unclear what exactly the gas would be used for, SpaceX plans to utilize super-chilled liquid methane and liquid oxygen as fuel for its Raptor engines. The company’s Starship and Super Heavy vehicles are tested at Boca Chica, and orbital launches are planned for the site.
George declined to answer further questions and hung up when called for comment. SpaceX didn’t immediately respond to a request for comment.
Musk said in December he relocated to Texas to focus on SpaceX’s Starship vehicle and Tesla Inc.’s new Gigafactory, which is being built near Austin. On Thursday, the billionaire tweeted that he plans to donate $100 million toward a prize for the best carbon-capture technology. His past comments have suggested that he wants to use the tech to produce synthetic carbon-neutral rocket fuel. Until then, fossil fuels will power SpaceX rockets.
Formed in June 2020, Lone Star bought the 806-acre (326-hectare) La Pita oil lease from Houston-based Sanchez Energy, which was later renamed Mesquite Energy Inc. after exiting bankruptcy. Financial terms for the deal weren’t disclosed, but the SpaceX subsidiary’s drilling plans have been called into question amid a dispute with Dallas Petroleum Group, which claims ownership of some inactive wells sitting on the same land.
Dallas Petroleum took the dispute to the Railroad Commission in August. Two months later, it sued three companies — Sanchez Midstream Partners LP, Sanchez Midstream Partners GP LLC and Sanchez Oil & Gas Corp. — in state court in Brownsville, Texas.
That lawsuit prompted SpaceX’s land-acquisition arm Dogleg Park LLC to intervene in November. In a filing to the court, Dogleg said Dallas Petroleum locked SpaceX out of the property and asserted ownership claims for the “sole purpose of extorting money from SpaceX.”
Dallas Petroleum Group denies the allegations and maintains it has ownership of both the wells and the 24 surrounding acres.
During Friday’s hearing, Dallas Petroleum CEO Matt Williams shared aerial photos that he said showed company equipment near the wells had been disconnected, while drilling and hydraulic-fracturing gear it doesn’t own had been moved onto the property. His company, he added, was also given a trespass warning.
“Our signs are all over these tanks and the well head,” he said. “Any operation that went on there, we were very much liable for any problems that could have happened.”
The Brownsville court is due to hear the lawsuit on Feb. 9 while Railroad Commission Administrative Law Judge Jennifer Cook is likely to take months to propose a decision that will later be voted on by the agency’s three commissioners in a public hearing. Cook is expected to scrutinize Dallas Petroleum’s claims against property and tax records, which list Sanchez as owner of the disputed land.
The area around the SpaceX facility has seen limited oil and gas development. There are almost a nearby dozen wells classified as either abandoned or dry holes, Railroad Commission Records show. Canadian company Enbridge Inc. owns and operates the nearby Valley Crossing Pipeline, which moves 2.6 billion cubic feet of natural gas per day from the Eagle Ford Shale of South Texas to customers in Mexico.
The Brownsville region may see more energy investment in the years ahead. There are separate plans for three liquefied natural gas export terminals about 5 miles (8 kilometers) west of the launch site. Environmental reports for those projects say they could safely coexist with SpaceX, although some activists dispute those claims. Will be one hell of a series of explosions if something goes wrong, which they always do in oil & gas.