Category Archives: DNA

The time frame for when bison the most successful mammal in colonizing North America after humans came to the continent from Asia has long been a matter of debate.

But a group of Canadian scientists, using genetic and geologic information, recently were able to pinpoint a time frame of when these beasts came across the Bering Land Bridge.

According to a new study published in the Proceedings of the National Academy of Sciences, Bison came to North America between 135,000 and 195,000 years ago a lot sooner than the 640,000 years ago stipulated in previous estimations.

Bison also apparently fared quite well in their new home, quickly multiplying their number, diversifying and becoming the dominant grazers on the plains of North America. They displaced mammoths, Pleistocene horses and other mammals that arrived on the continent earlier.

"They became very successful very quickly," Duane Froese of the University of Alberta, lead author of the study, told the Alaska Dispatch News. "Outside of humans, it's pretty much the most successful mammal invasion into North America."

The findings rely heavily on DNA extracted from the worlds oldest known bison fossil, which was discovered almost a decade ago near the Gwich'in indigenous village of Old Crow in Canada's Yukon Territory.

The fossil was discovered under a layer of ash from an enormous eruption that happened about 130,000 years ago in southwestern Alaska. The ash basically acted as a time marker in the earth that allowed scientists to figure out the age of the Yukon bison fossil and confirm it as the oldest known bison fossil in North America.

Because radiocarbon dating doesnt work past the ages of about 40,000 to 50,000 years, the DNA analysis was necessary. Using new technology, researchers compared the DNA from the Yukon fossil with that of a younger fossil found near Snowmass, Colorado. Both fossils then were compared with dozens of younger bison fossils.

From their research, scientists were able to determine that all bison shared a common ancestor 135,000 to 195,000 years ago during a period when the Bering Land Bridge was exposed. Scientists were also able to determine that bison migrated over the land bridge in a second wave 21,000 to 45,000 years ago.

"It's been kind of a long puzzle in the world of paleontology and paleobiology," Froese said.

Read more:
DNA technology, volcanic ash help pinpoint when bisons ...

INDIANAPOLIS A bill allowing law enforcement to collect DNA samples from people at the time they are arrested on felony charges advanced to the full House.

On Thursday, Senate Bill 322 passed the House Judicial Committee by a 9-1 vote.

The bills author, Sen. Erin Houchin, R-Salem, told the committee that collecting the DNA sample at the time of the felony arrest will help law enforcement identify perpetrators much earlier in the crime cycle.

Studies have shown that serial criminals will commit seven or eight crimes before they are identified. Houchin said.

Houchin cited the case of John Clements, 82, who was shot and killed last fall outside his Zionsville home. A suspect was identified through DNA that was in a database in Ohio, where samples are collected at the time of arrest.

If the bill becomes law, Indiana would be the 31st state to implement DNA testing at the point of arrest.

DNA samples are removed from the system under three circumstances: the person is acquitted of all felony charges or charges are converted to misdemeanors, all felony charges against the person are dismissed, or no felony charges are filed against the person within 365 days.

A similar bill was filed in the House. House Bill 1577 required that the DNA sample be removed from the database if no charges are filed within 30 days, but Houchin said that was too little time to do any good.

Both the state police and prosecutors thought that 30 days was too short of a time frame, Houchin said. We looked at the national averages and theyre anywhere from one to three years.

Rep. John Young, R-Franklin, argued that collecting DNA at the time of arrest is an invasion of privacy even though the samples might be eventually removed from the database.

To me this is a dragnet sweep to collect peoples DNA, Young said. I cant think of anything more personal then my own DNA.

Houchin said that arrestees will be informed of their right to remove the DNA sample if cleared and be provided a form with instructions on how to do so. Under the law the DNA will not automatically be removed the person who gave the sample will have to petition the court for its removal.

The only time it is sent to the database is if there is an arrest on probable cause or an arrest with a warrant, Houchin said.

Young said the bill is unconstitutional.

Guilty people do walk away free on technicalities, Young said. Thats a price that we pay to live in a free society.

If the bill becomes law, it would take effect on Jan. 1, 2018.

Kayla Walker is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.

See the original post:
House committee OKs bill to collect DNA samples in felony arrests ... - Greensburg Daily News

Inovio Pharmaceuticals in Plymouth Meeting is collaborating with the University of California San Francisco, which received a $6.95 million grant from the National Institutes of Health, to test the biotech company's DNA-based vaccine to reduce or prevent the HIV virus.

Inovio's immunotherapy, Pennvax GP, will be tested in HIV-positive patients to see if it generates killer T cells in the body's immune system to attack the HIV virus.

Current antiviral drugs work well against HIV, "but people have to take these drugs every day for decades," said Steven Deeks, the grant's principal investigator and professor of medicine at the University of California, San Francisco. For many people around the world the drugs "are just not feasible" due to side effects or costs, he said. "We're trying to find a way to enable the immune system to do what antiretroviral drugs do, which is to prevent the virus from replicating and spreading in the person."

Nearly 36 million people have died from HIV related causes and 35 million are living with HIV, a retrovirus that causes acquired immunodeficiency syndrome, or AIDS.

"Inovio has developed an approach which has worked quite well in other settings, for example HPV infection in women who might be developing cervical cancer," Deeks said. "We want to take their approach, which we think is very exciting, to see if we can generate these powerful CD cells that can recognize and kill HIV. In theory if we are lucky, it will allow us to one day stop antiretroviral drugs and let the immune system to take over."

CD8 is a receptor on the surface of T cells that allows the cell to recognize something foreign, Deeks said.

The vaccine is a strand of DNA that contains the genetic information of the virus. Once in the body - through an inoculation in the arm - the DNA gets into critical immune cells that attack HIV. Inovio's immunotherapy has been tested for HPV and for the Zika virus. "It's the same general approach, but the DNA is quite different," Deeks said.

Inovio's vaccine will be tested alone and in combination with other products in patient trials at the University of California in San Francisco and Los Angeles. "Similar to what we are doing in the cancer field," said Inovio CEO Joseph Kim, "we believe that the one-two punch of generating potent killer T cells with our immunotherapies" could be an important step in finding a cure for these diseases.

Published: March 30, 2017 3:28 PM EDT

Over the past year, the Inquirer, the Daily News and Philly.com have uncovered corruption in local and state public offices, shed light on hidden and dangerous environmental risks, and deeply examined the regions growing heroin epidemic. This is indispensable journalism, brought to you by the largest, most experienced newsroom in the region. Fact-based journalism of this caliber isnt cheap. We need your support to keep our talented reporters, editors and photographers holding government accountable, looking out for the public interest, and separating fact from fiction. If you already subscribe, thank you. If not, please consider doing so by clicking on the button below. Subscriptions can be home delivered in print, or digitally read on nearly any mobile device or computer, and start as low as 25 per day. We're thankful for your support in every way.

Read the original here:
Inovio Pharmaceutical's DNA vaccine will be tested in patients with ... - Philly.com

Murder accused's DNA found on victim's belt, court hears - BBC News BBC News A court hears forensic evidence at the trial of Philip Morrison who denies murdering Derek Sheerin in Glasgow in 1994. and more »

See the rest here:
Murder accused's DNA found on victim's belt, court hears - BBC News - BBC News

Robert Bernardi has seen too many bodies, including one that was wrapped in plastic and sealed behind a wall inside a Philadelphia rowhouse.

That was a scene right out of Edgar Allan Poe, the Burlington County prosecutor said recalling that hot August day in 2001 when he was at the shore and received a call about the discovery of the remains of Kimberly Szumski, a Cinnaminson, N.J., mother of two who had been missing for three months. Later, he watched as investigators removed cinderblocks and then the body.

When Bernardi retired Friday, he was the longest serving county prosecutor in New Jersey. In an interview a week earlier, he reflected on nearly two decades of service as a top law enforcement official.

Over the years he had tangled with the Innocence Project of New York over a murder conviction that was reversed due to DNA evidence and with Amnesty International over two deaths and alleged inhumane conditions at the county jail in Mount Holly. He also fought with courts that decided the law and order prosecutor had gone too far in some cases, and with county politicians who wouldnt give his staff a raise for years, making his assistants the lowest paid in the state.

Bernardi also supervised thousands of criminal cases, which led to an average of 1,200 indictments and about 50 trials a year. Many criminals, including murderers, were locked up on his watch and remain incarcerated, he said.

Its been a great run, 17 years and 10 months, he said, in his Mount Holly office where he had overseen a staff of 150. Im 67, I didnt want to get carried out on my shield, the grandfather of two said, mentioning he was looking forward to more golf. Less than 12 hours earlier, there was a homicide in which a Pemberton man was found shot in the head.

Gov. Christie, in a statement, called Bernardi an extraordinary leader A voice of justice and reason in the state shortly after the governor named his senior deputy chief counsel, Scott A. Coffina, of Marlton, to replace Bernardi.

A Republican from Mount Laurel, Bernardi was first appointed by former Gov. Christie Whitman and was a holdover after his latest five-year term expired in December.

The Kimberly Szumski case was among the most memorable, Bernardi said, recalling how her husband, Thomas, was found dead of an overdose before her body was discovered. Bernardi said Szumski had killed his wife, but luckily an informant had just told detectives about the basement where Szumski had done some construction work.

Also memorable was the single case that Bernardi had tried personally the matter of John Denofa, a Bucks County businessman who was found guilty of killing an exotic dancer and tossing her to her death from the Turnpike Bridge in 2002.

Bernardi remembered how he and the former Bucks County prosecutor had argued over who should handle the sensational case since the attack occurred in Pennsylvania and the body was found along the shoreline in New Jersey.

After he was convicted, Denofa filed several appeals and recently filed another motion to reduce his sentence of 30 years to life in prison. But Bernardi said the sentence has remained intact.

The case of Larry Peterson was thornier. Peterson was exonerated by DNA evidence and freed in 2006 after he served 18 years in prison after he was convicted of murder in the strangling of a Pemberton woman.

Bernardi bristled when asked if he had any regrets about that case. He had opposed the DNA testing and it took Peterson seven years to get a judge to order the tests that opened the door for him to prove his innocence. The tests determined that microscopic hairs and semen found on the body of the murder victim did not belong to Peterson.

We dealt with far too much resistance from Bernardi in terms of getting the DNA testing, said Vanessa Potkin, an attorney with the Innocence Project who handled the Peterson case. Since then Im sure weve had over 100 exonerations if not 200.

She said that more prosecutors are now recognizing they have a role in finding out the truth and in taking an active role in exonerating innocent persons instead of digging in their heels to maintain a conviction.

Potkin said that the jury heard false evidence, that the hairs found on the victim belonged to Peterson, and this was critical since he had not confessed and there was no other forensics placing him at the scene. She said she hoped there was a change in (Bernardis) heart about the Larry Peterson case and that he would do it differently now.

But Bernardi said that, in retrospect, he still believes he was right when he considered retrying the case and fought the DNA testing.

We did everything we were supposed to do in a professional manner to investigate and determine whether we would prosecute Larry Peterson again The DNA didnt 100 percent say he couldnt have done it. The gripe was we left him in jail, but we had an obligation to the victim and the victims family to make sure that Mr. Peterson was not involved, he said.

The other controversy Bernardi faced involved the deaths of two Burlington County Jail inmates, one in December 2013 and the other two months later. The human rights group Amnesty International had asked Bernardi to investigate to see if there was any criminal negligence by jail officials or staff.

Bernardi said he found there was no wrong-doing, but Amnesty International officials later said the details of the report he gave them about the death of a sick, frail homeless man led to more questions and concerns that he was left to die. In the interview, Bernardi said that was not the case.

While most of the convictions obtained by Bernardi's office were upheld on appeal, a few were reversed bythe state Supreme Court for prosecutorial overreach.

In the Marie Hess case, Bernardi said the judges erred when they ruled in 2011 that the prosecutor should not have restricted her right to raise the defense of Battered Woman Syndrome during her sentencing after she confessed to killing her husband, James Hess, a Burlington Township patrolman.

The supreme court got it wrong.. She confessed. We are here to serve victims, people dragged into the system without any choice They are the ones who are forgotten, he said.

Kevin Walker, a public defender who represented Hess, said that Bernardi overall was "tough but fair." But in the Hess case, he said that Hess was "clearly an abused woman...I'm not trying to justify what happened, but the law acknowledges the circumstances with which she had to deal with on a daily basis and these were mitigating factors that had to be considered at sentencing."

Ray Milavsky, who was Bernardis first assistant prosecutor since the beginning, said the office handled many cases that had very fascinating issues and dealt with them in a professional manner. The two met when they were assistant prosecutors in Camden County in the the 1980s and they became longtime friends.

The biggest challenge for Bernardi, Milavsky said, was dealing with inadequate staff. We have a dedicated group of individuals, but to make it work ideally, there has to be more resources, he said.

Bernardi, a past president of the County Prosecutors Association of New Jersey, had pushed to get the county Freeholder Board to hire more staff and also to approve raises for his assistant prosecutors, who at one time were the lowest paid in the state. They had not been granted raises between 2008-2012 and some had left to join the Camden County prosecutors office and other offices that were paying more competitive wages.

During that period, the assistant prosecutors were making nearly $10,000 to $20,000 less than the statewide average of $91,000.

Bernardi, who earned $165,000 a year in his role as prosecutor, said that the "bleeding" of his office and cutbacks reduced his staff, which went from 39 prosecutors to 34. He said 41 assistants are needed to do the job well.

When Bernardi walked through his office, the assistants greeted him with "Hello Sir."

Staffing is an issue, said Bernardi, said, adding that recent bail reforms have also increased the workload. Were treading water.

But that may be a task for the new prosecutor to address. That and a backlog that is growing, he said.

Still, Bernardi said that being prosecutor was wonderful, the best experience of my life, and an honor. When he was appointed to his first five-year term, he had expected it would be just a five-year hitch.

Bernardi said that he plans to offer his services to municipalities that may need to hire hearing officers in police disciplinary matters. "I would like to kick back a little," he said, "but I would like to do this part-time."

Published: March 31, 2017 6:13 AM EDT

Over the past year, the Inquirer, the Daily News and Philly.com have uncovered corruption in local and state public offices, shed light on hidden and dangerous environmental risks, and deeply examined the regions growing heroin epidemic. This is indispensable journalism, brought to you by the largest, most experienced newsroom in the region. Fact-based journalism of this caliber isnt cheap. We need your support to keep our talented reporters, editors and photographers holding government accountable, looking out for the public interest, and separating fact from fiction. If you already subscribe, thank you. If not, please consider doing so by clicking on the button below. Subscriptions can be home delivered in print, or digitally read on nearly any mobile device or computer, and start as low as 25 per day. We're thankful for your support in every way.

Follow this link:
A body inside a wall, DNA that freed a lifer all in a day's work for longtime NJ prosecutor - Philly.com

Print The draft policy says that before familial searching is done, local police have to certify that reasonable investigative efforts have been exhausted

By Anthony M. Destefano Newsday

NEW YORK A state panel of DNA experts approved on Monday a draft policy allowing familial searching, a new and controversial form of genetic testing, as a way of helping police solve homicide, certain sex crimes and terrorism cases.

By a unanimous vote, the DNA subcommittee of the state Commission on Forensic Science approved a short policy statement calling for familial searching, also known as FS, as well as a set of regulations to govern the procedure in New York.

The subcommittee also recommended that the commission approve the policy, which garnered interest as a result of the killing of Howard Beach jogger Karina Vetrano last August. Police got DNA from Vetranos body but couldnt get any matches with genetic profiles in the state DNA database.

The draft policy approved by the subcommittee said that before familial searching is done, the local police and prosecutors have to certify that reasonable investigative efforts had been exhausted or that emergency circumstances exist. It would also be used in investigations dealing with first-degree kidnapping and arson.

Interest increased in familial searching following a November 2016 story in Newsday which described familial searching and its potential use in the Vetrano investigation, which at that time seemed stalled. NYPD Commissioner James ONeill and Queens District Attorney Richard Brown issued strong statements calling for changes in state procedures to allow familial testing.

Todays action by the DNA Subcommittee of the NYS Commission on Forensic Science unanimously approving familial match DNA searches is an important step forward in identifying the guilty, excluding the innocent and bringing closure to the families of victims of unsolved homicides, Brown said in a statement. While the journey for justice for those families is not yet complete, this is an important milestone.

The Vetrano family also support the testing, even though police, using more traditional investigative methods, were finally able to make an arrest in early February of a suspect in Karinas homicide.

Some civil libertarians have voiced concerns about privacy and the fact that the existing state DNA database has a disproportionately high number of profiles of people of color. Proponents said familial searching is race-neutral.

2017 Newsday

McClatchy-Tribune News Service

Continued here:
NY mulls use of DNA familial matching - Police News

Nearly a decade ago, Dallas police proposed a new program designed to get sex workers off the streets. Rather than just send them to jail, police would set up shop at truck stops, accompanied by counselors, social workers and nurses, and give the sex workers a choice of either prison or talking to a counselor. But the program also had a grimmer, more ethically fraught componentcollecting sex workers DNA in hopes of identifying their bodies should they wind up dead.

As a recent study from Duke University points out, for vulnerable populations, such data can be a double-edged sword. The same data that could help them also risks violating their genetic privacy, or worse, incriminating them should it be abused. Police have created, in essence, a DNA database of sex workers. Its not hard to imagine ways that could go wrong.

DNA databases have the potential to improve investigations into crimes impacting sex workers, who are more likely to be victims of murder than other populations, and often, do not carry any legitimate form of ID. Just as a decade ago some parents turned to fingerprinting to help identify their children in case they were kidnapped, the Dallas police started collecting DNA samples from sex workers just in case, god forbid, they wound up dead on the side of the highway. But while this kind of data might help police bring about justice for some of the grisliest crimes, it could also impinge upon sex workers privacy, coercing them into handing over information that could be indicting.

The social ramifications of collecting DNA from vulnerable populations (e.g., children, vagrant youth, sex workers, and victims of criminal acts) are considerable, and questions remain unanswered as to how best to protect individuals from misuse of their voluntarily provided DNA, write authors of the new study published in the International Journal of Criminal Justice Sciences.

Working with law enforcement, the authors went to Dallas to interview sex workers about the ongoing DNA collection program. Although many of the women said they do not trust police, they also said they willingly gave DNA samples because they want to be identified in the case of their death. The database has already helped to identify at least one woman, a sex worker who died in a Fort Worth ER in 2013.

My guy, the few times that I did talk to him while I was on the street, he always used to joke about the fact that they were going to tattoo my social security number and my address on my foot so that if I died that somebody knew who I belonged to, one focus group member said. That was one of the reasons why I did it. And then Ive had twofriends that have actually been identified through the program.

Still, some women were concerned about where their DNA might wind up.

One of my concerns would be who would have access to this information, once they got the DNA sample or whatever, who else would have access to it? another focus group participant said. Like would it be just for this simple organization or would everyonepolice, doctors, you know like people who go and donate sperm, sperm banks, stuff like thatlike who would have access to DNA?

As a society, we are just beginning to understand how important the right to genetic privacy is. Information about our DNA, if not properly handled and protected by law, could wind up not only incriminating people in criminal scenarios, but affecting access to things like insurance and employment. Right now, legislation is winding its way through Congress that seeks to undo some of the protections of the Genetic Information and Nondiscrimination Act. Many groups have spoken out against it, viewing it as a massive violation of public privacy.

The authors note that the police program has taken care to enact privacy protections, including only processing samples in the event of a death linked to a participant, and storing them in a facility not associated with law enforcement. But one participant suggested that a universal database, rather than one just for sex workers, and a program run outside of law enforcement entirely might make the program more egalitarian.

The Dallas program is a good example of the increasingly complicated position that DNA occupies in modern life. On the one hand, it can provide miraculous information that helps solve crimes, identify disease and help tell us about who we are. On the other hand, that same information can be damning.

And while the DNA sampling program is billed as voluntary, the authors question how voluntary it can really be when the request is coming from the police. At the time of DNA collection, the participants are either already under courtsupervision from an arrest or in a treatment program, which places them in a position under law enforcement authority, and perhaps less able to provide true consent, the authors write.

The authors point out that the only way to walk that fine line between benefit and disaster is to do so with careful consideration of all the ways things might go wrong. In this case, that means taking into account the opinions of the population the police are DNA testing, to make sure they arent coercing vulnerable people into unwillingly giving up a right to privacy.

[The Atlantic]

See the original post:
DNA Is Being Collected to Protect Sex Workers, But It Could Also Be Used Against Them - Gizmodo

Then, for Giddins' birthday, a friend gave him an AncestryDNA test kit. He put the $99 gift on the shelf and forgot about it.

"One day, in spring 2016, I took it down and looked at it. I thought to myself, 'I should take this thing. I've been looking for my mom all this time,'" Giddins recalls. "So, I did it. I took the test."

Using the kit's prepaid packaging, Giddins mailed a sample of his saliva to AncestryDNA for analysis of maternal and paternal genetic information ("autosomal DNA," or all 23 pairs of chromosomes). A few weeks later it can take six to eight weeks he was notified that his results were available online.

"They give you links to everyone [in the testing database] you share DNA with," Giddins says. "I found my mom and much more. I found a brother, two sisters, cousins, aunts and uncles. I found my history; I found my truth."

Giddins' biological mother, now 70 and living in Columbia, S.C., called him, knowing only that her family tree indicated that they somehow were related. As they talked, she asked for his birthday.

"Dec. 17," he answered.

"She said, 'I am the woman on your birth certificate.' We both cried," Giddins says. "She told me that on every Dec. 17, she had prayed to God that I was well."

Giddins, his wife, Lita, and their five children have since visited his rediscovered relatives in South Carolina, and he talks with his biological mother two or three times a week on the telephone.

"We have a lot to catch up on," he laughs.

Spokeswoman Crista Cowan said that while Lehi-based AncestryDNA provides clients with ethnicity breakdowns, it does not keep specific records of customers' race or religion. That said, there seems ample anecdotal evidence (a search of YouTube using the term "African-American DNA testing" turns up more than 40,000 results) of black people using AncestryDNA and other testing companies to plumb their roots.

"A lot of people are creating videos of their DNA 'reveals,'" Cowan says, adding that many customers are surprised at the ethnic diversity discovered within their chromosomes.

Overall, AncestryDNA has seen orders for its kits skyrocket since the service launched in May 2012. More than 3 million people have tested, with that number having jumped from just 2 million in spring 2016.

As life-changing as DNA testing has proved for African-American clients in general, it allows blacks who have embraced Mormonism to do what other Latter-day Saints take for granted identify ancestor candidates for baptismal temple rites for the dead.

Robert Burch Jr., president of the Utah chapter of the Afro-American Historical and Genealogical Society, found DNA results in 2016 that took him beyond his slave forebears, all the way to ancestors in the Cameroon and Congo regions several centuries ago.

"I encourage African-Americans to do DNA testing," Burch says. "It allows us to leap across the obstruction of 600 years of racial lies and historic deletions."

Here is the original post:
For black Mormons, DNA testing a revelation of roots and faith - Salt Lake Tribune

source: Stock Photo

If competitors didn't have enough to worry about concerning U.S. shale, another technological breakthrough has the potential to slash another 10 percent off of production costs for shale companies, further enhancing their ability to boost supply and generate a profit under most oil price points.

Among the more than dozen companies using Biota Technology's DNA testing are Statoil ASA (NYSE:STO) and EP Energy Corp. (NYSE:EPE).

To get an idea of the potential range of costs, shale wells are developed from $4 million to $8 million, depending on a variety of elements involved. Biota's take from those using the technology is under 1 percent, said Ajay Kshatriya, CEO and co-founder of Biota Technology.

Peter Lascelles, a geologist for EP Energy Corp., which was one of Biota's first customers, said DNA testing is superior to seismic and chemical analysis in understanding well performance and their potential.

What DNA testing is and does

The outcome of using DNA testing is it allows drillers to avoid mistakes which could limit the maximum output potential of a given well. It helps to more accurately measure the amount of pressure needed to reach shale oil, as well as allows drillers to know beforehand the distance needed between wells to generate the best results, among other improvements.

"The technique involves testing DNA extracts from microbes found in rock samples and comparing them to DNA extracted from oil. Similarities or differences can pinpoint areas with the biggest potential," according to Reuters.

Not only does this help companies engage in less costly production methods because of less accurate knowledge, but it also helps improve productivity by cutting the time it takes for a company to start pumping oil.

Being skeptical of yet another assertion of technology that can improve costs, EP Energy made Biota participate in a blind test to see how effective the technique was. It asked the company to make a determination on the origination of a specific oil sample from numerous wells in a targeted zone.

Lascelles said the company in fact did pinpoint the wells the oil sample came from and was as a result able to recommend ways it could improve drilling in the area.

At under 1 percent of costs to bring wells into production, it's easy to see why this is a very desirable technology to include in the output process.

source: Reuters via Biota

Concerns over increased supply misguided

Earlier in March, Bloomberg published an article where concern was aired over the lower costs of shale oil bringing more supply to the market, which would drive down the price of oil. In my view this is misguided and the result of not understanding how business works.

It would be no different than Wal-Mart at the height of its power being considered a weak investment because its low prices and margins generated more sales, which in turn may provide it the room to further lower prices. The same could be said about Amazon and it removing a lot of the costs out of distribution and delivery, which increases the sales at the company.

Rising supply is a major problem only if the costs are rising while the price of oil is falling. Otherwise, companies can profitably boost revenue and earnings at a lower price point than in the past.

Just like with retailers that turn over inventory far more than competitors and make money by increased sales, oil producers generate more revenue and earnings by increasing barrels sold, even if the price of oil has dropped. They make less per barrel but more from increased sales. Volume makes up for it.

I'm referring here to the new wells being completed, as the older wells aren't as efficient as the new wells. Once the old wells are worked through, the shale industry will emerge as among the lowest cost producers outside of a few state-owned companies in the Middle East. But even with that in mind, the shale costs are being driven down so much they could come close to those costs within the next year or two.

If you think that's too optimistic of an outlook, at CERAWeek some executives said breakeven was a low as $12 per barrel. Shell (NYSE:RDS.A) has said its new wells start to be profitable at about $20 per barrel. It's not going to be long before even those low numbers are improved.

EP Energy

At the end of 2016 EP Energy had drilling inventory of about 5,200 locations, with 2,900 of them located in the Wolfcamp.

The company noted in its latest earnings report that almost all of its locations are profitable "at today's strip pricing," and over 80 percent of them are profitable under $40 per barrel.

Cash costs in 4Q 2016 dropped 7 percent year-over-year, with most of the expense categories lower. Adjusted EBITDA was $255 million in the fourth quarter.

Also important on the cost side, the company was able to get its lease agreements amended with its landowner, the University Land System, which cut back on the royalty rates it will have to pay.

It's easy to see with increased productivity, lower costs and lower royalties, how the company has positioned itself for stronger earnings. Add to that the improvements it'll get from incorporating DNA testing into its operations, and you can see things are going to get better going forward.

And even if the price of oil finds support and royalties climb once again, it doesn't take away from the benefit it gets on the cost side from DNA testing.

Add to that its hedging of 75 percent of its 2017 oil product at $61.66 and its 76 percent of its natural gas production at $3.28, the company looks like it could outperform through the remainder of 2017.

Further out, the company has hedged about 20 percent of its 2017 production level at $60 per barrel, and over 25 percent of its natural gas swap at $3.11.

Statoil

Statoil doesn't have the same performance outlook at EP or others working shale have, as its locations aren't as profitable as the Permian is. Its major deposits are in the Bakken, Eagle Ford, and Marcellus.

So far Statoil hasn't been able to match many of its competitors on the efficiency side, as its breakeven point at the end of 2016 was a very high $66 per barrel. Even so, that's still an 35 percent improvement over 2015 costs. The company says by 2018 it should be able to cut breakeven down to $50 per barrel.

That is based upon existing inventory. If it were to acquire acreage in the Permian, it would be able to more rapidly lower its outlook for breakeven.

Embracing technology that can improve its cost structure will help Statoil, especially has it plays catch-up with competitors that have rapidly improved their ability to compete at most oil price levels.

Conclusion

Continuing to remove costs out of the production process is a positive for the shale industry, as it can continue to increase production profitably with their new wells.

Not only is this not bad, it's very good, as it puts more pressure on OPEC and Russia, which don't have a lot of room to lower costs. In regard to OPEC, I'm talking about the low-cost leaders, which also happen to be the top suppliers within the cartel. Russia actually has significant shale reserves, but its exposure to high-cost Artic oil and the ongoing restrictions on acquiring Western tech and equipment, which would boost its performance, makes it difficult for Russia to make cost improvements at this time.

Those with exposure to U.S. shale know that it's the future of oil for at least the next couple of decades. Costs are going to continue to improve, and when they're very close to the best OPEC has to offer, they'll crush the cartel. Already the U.S. is the swing producer. What happens when costs are removed to the point of being almost even with the best OPEC has to offer?

We're not going to see shale producers cutting back on production. It'll be measured and disciplined, but not relevant to concerns on rising supply and lower oil prices offsetting lower costs. It's U.S. shale that has the rest of the world on the ropes, not the other way around.

That doesn't mean high-cost shale producers won't come under pressure, because they will. What it means is the very best companies are starting to rise to the surface, and as they take more market share from competitors, the industry will consolidate further, and they will be in almost complete charge of the direction of oil in the not too distant future.

In my view this is OPEC's last time of attempting to manipulate the price of oil by cutting costs. Shale producers have responded to the cuts by ramping up production. The problem is many investors and analysts continue to interpret this as the result of moderately higher oil prices, when the reality is it's because they can generate profits with oil at a much lower level. That's why an increase in supply is to the benefit of shale producers; they don't have to provide for a country like its OPEC competitors do.

As for DNA testing, it's one more arrow in the quiver of shale producers who have another tool to use to cut costs even further.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Read more here:
Shale Gets Another Efficiency Boost - DNA Testing Can Cut Costs By 10% - Seeking Alpha

Science Daily

Watching the passage of knotted DNA slip through nanopores ... Science Daily How can long DNA filaments, which have convoluted and highly knotted structure, manage to pass through the tiny pores of biological systems? Scientists used ... and more »

Read the rest here:
Watching the passage of knotted DNA slip through nanopores ... - Science Daily