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BP joins the Ohio shale rush, leasing 84,000 acres

The oil producer snaps up a potentially huge US energy source.

BP, Europe's second-largest oil-producer, has signed an agreement with the Associated Landowners of the Ohio Valley (ALOV) to lease 84,000 acres of land in Trumbull County, Ohio, for future oil and gas production. 

The deal follows Chesapeake Energy Corp's announcement a fortnight ago of its own natural gas and liquids project in Ohio, valued at $900m.

The terms of BP's agreement with ALOV, which represents mineral owners in the area, were not disclosed but the Ohio Department of Natural Resources estimates a recoverable Utica shale potential between 1.3 and 5.5 billion barrels of oil and between 3.8 and 15.7 trillion cubic feet of natural gas.

Lamar McKay, chairman and president of BP America, said: “BP is excited to expand our presence in Ohio in a way that will create jobs, bolster the local economy and provide additional sources of energy from an important emerging American resource.

“Over the last five years, BP has been America’s largest energy investor with vast experience in developing natural gas resources. We intend to bring our expertise and the highest industry safety and environmental management practices to this project.”

Tim Harrington, regional president for BP’s North America Gas, said: “We are very encouraged by what we have seen of the Utica/Point Pleasant formation. Our focus in 2012 will be to better understand the geology and devise a plan to safely develop the resource. BP is committed to hiring and purchasing locally whenever possible and we anticipate having a positive impact on the region while providing a new source of energy for America.”

BP operates the BP-Husky refinery near Toledo in a joint venture with Husky. BP’s North America Gas business has a presence in seven US on-shore basins.

The Ohio deal adds an important US energy source to BP’s on-shore gas portfolio.

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Lord Geoffrey Howe dies, age 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.