Here are some selected news articles from the week ended 06 June 2021. Part 2 is available here.
This is a feature at Global Economic Intersection every Monday evening or Tuesday morning.
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Oil prices rose for the fifth week in the past six and finished at a 31 month high on ongoing OPEC+ production restraint and on falling US crude supplies…after rising 4.3% to $66.32 a barrel last week as strong US economic data fed optimism on the outlook for fuel demand, the contract price of US light sweet crude for July delivery rose 0.9% in off market trading on Memorial Day on growing optimism that fuel demand would grow in the next quarter, and hence opened higher on Tuesday, boosted by Chinese data showing that their factory activity grew at its fastest pace this year in May, and then jumped 4% to $68.87 a barrel, the highest since October 2018, when the OPEC+ alliance forecast a tightening global crude market, before giving up over a dollar of the early gains to settle $1.40 higher at $67.72 a barrel…but oil prices opened higher again on Wednesday, and rose steadily throughout the day to finish $1.11 higher at $68.83 a barrel after OPEC and allied producers decided to only gradually restore global supplies, with with reports that there would be a delay in supply from Iran due to the slow pace of talks with the US also contributing…prices rallied in off hours late Wedesday after the API reported a big draw from crude supplies and then jumped 1% early Thursday after the EIA confirmed the sizable crude inventory draw, but fell back quickly to close 2 cents lower at $68.81 a barrel as traders became concerned that the data also showed showed domestic gasoline supplies rising by the most since early April…however, the oil price rally resumed Friday as expectations for a demand pick-up from summer activity began to come to fruition and on news that nonfarm payrolls in the U.S. increased by 559,000 jobs last month, as July oil rose 81 cents to settle at $69.62 a barrel, thus finishing the week nearly 5% higher, and at the highest level since October 2018…
Since we now have clearly reached a new interim high for oil prices, we’ll include a longer term graph of prices so you can see how that has developed…
the above is a screenshot of the interactive oil price chart from barchart.com, which i have set to show front month oil prices weekly over the past 5 years, which means you’re seeing prices as they were quoted in the media; that same chart can be reset to show prices of individual monthly oil contracts over time periods ranging from 1 day to 30 years, as the menu bar on the top indicates, and also to show oil prices by the minute, hour, day, week or month…the bars across the bottom show trading volume for the weeks in question, with down weeks indicated by red bars and up weeks indicated in green…note that since this graph shows closing prices, it does not show how prices briefly drop to negative $40 in April, when the OPEC agreement broke down during a squabble between Russia and the Saudis…
Natural gas prices rose for the eighth time in nine weeks on forecasts for hot weather and high AC demand during the first half of June…after rising 0.3% to $2.986 per mmBTU last week on higher prices overseas and on a bullish shift the weather forecasts, the contract price of natural gas for July delivery opened 5 cents higher on Tuesday on a notably warmer outlook for June temperatures, and rose 11.8 cents, or 4.0%, to settle at $3.104 per mmBTU, their highest close since May 17th….however, natural gas prices retreated a bit on Wednesday, as a majority of the previously reported production decline had recovered by midweek, with the July contract settling 2.9 cents lower at $3.075 per mmBTU…another large injection of gas into storage and reduced intensity in projected June heat put another hit on prices Thursday, as natural gas settled down 3.4 cents to $3.041 per mmBTU…but prices recovered late Friday after midday forecasts called for hotter weather over the next two weeks than was previously expected, with gas prices rising 5.6 cents to $3.097 per mmBTU, thus finishing 3.7% higher for the week…
The natural gas storage report from the EIA for the week ending May 28th indicated that the amount of natural gas held in underground storage in the US rose by 98 billion cubic feet to 2,313 billion cubic feet by the end of the week, which still left our gas supplies 386 billion cubic feet, or 14.3% below the 2,699 billion cubic feet that were in storage on May 28th of last year, and 61 billion cubic feet, or 2.6% below the five-year average of 2,374 billion cubic feet of natural gas that have been in storage as of the 28th of May in recent years….the 98 billion cubic feet that were added to US natural gas storage this week was above the average forecast of a 87 billion cubic foot addition from an S&P Global Platts survey of analysts, and was also a bit above the average addition of 96 billion cubic feet of natural gas that have typically been injected into natural gas storage during the fourth week of May over the past 5 years, as well as just above the 95 billion cubic feet that were added to natural gas storage during the corresponding week of 2020…
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending May 28th showed that after a decrease in our oil imports and a decrease in our crude production, we needed to withdraw oil from our stored commercial crude supplies for the seventh time in the past fifteen weeks and for the 29th time in the past forty-five weeks….our imports of crude oil fell by an average of 641,000 barrels per day to an average of 5,631,000 barrels per day, after falling by an average of 138,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 889,000 barrels per day to an average of 2,544,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,087,000 barrels of per day during the week ending May 28th, 248,000 more barrels per day than the net of our imports minus our exports during the prior week…over the same period, the production of crude oil from US wells reportedly fell by 200,000 barrels per day to 10,800,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 13,887,000 barrels per day during this reporting week…
US oil refineries reported they were processing 15,597,000 barrels of crude per day during the week ending May 28th, 358,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA’s surveys indicated that a net of 818,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US….so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 892,000 barrels per day less than what our oil refineries reported they used during the week…to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+892,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been a error or errors of that magnitude in this week’s oil supply & demand figures that we have just transcribed…..however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we’ll continue to report them as they’re published, just as they’re watched & believed to be accurate by most everyone in the industry….(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 5,951,000 barrels per day last week, which was 0.7% less than the 5,992,000 barrel per day average that we were importing over the same four-week period last year… the 818,000 barrel per day net withdrawal from our crude inventories included a 93,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes, and a 726,000 barrel per day withdrawal from our designated commercially available stocks of crude oil….this week’s crude oil production was reported to be 200,000 barrels per day lower at 10,800,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 200,000 barrels per day lower at 10,400,000 barrels per day, while an 8,000 barrel per day decrease in Alaska’s oil production to 440,000 barrels per day had no impact on the rounded national total…our prepandemic record high US crude oil production was at a rounded 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 17.6% below that of our production peak, yet still 28.1% above the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016…
US oil refineries were operating at 88.7% of their capacity while using those 15,597,000 barrels of crude per day during the week ending May 28th, up from 87.0% the prior week, and the highest refinery utilization since Feb 14th of last year…while the 15,597,000 barrels per day of oil that were refined this week were 17.2% higher than the 13,307,000 barrels of crude that were being processed daily during the pandemic impacted week ending May 29th of last year, they were still 7.9% below the 16,938,000 barrels of crude that were being processed daily during the week ending May 31st, 2019, when US refineries were operating at a still fairly low 91.8% of capacity…
Even with this week’s increase in the amount of oil being refined, the gasoline output from our refineries decreased by 182,000 barrels per day to 9,566,000 barrels per day during the week ending May 28th, after our gasoline output had decreased by 5,000 barrels per day over the prior week…while this week’s gasoline production was 23.0% higher than the 7,779,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 4.1% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 4.8% below the gasoline production of 10,049,000 barrels per day during the week ending May 31st, 2019….meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 142,000 barrels per day to 4,807,000 barrels per day, after our distillates output had increased by 112,000 barrels per day over the prior week…while the pandemic pullback of last year didn’t appear to impact distillates’ production, this week’s distillates output was still 2.0% more than the 4,714,000 barrels of distillates that were being produced daily during the week ending May 29th, 2020…
Despite the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the seventh time in nine weeks, and for the 21st time in twenty-nine weeks, rising by 1,499,000 barrels to 233,980,000 barrels during the week ending May 28th, after our gasoline inventories had decreased by 1,745,000 barrels over the prior week...our gasoline supplies increased this week because the amount of gasoline supplied to US users decreased by 333,000 barrels per day to 9,146,000 barrels per day, and because our exports of gasoline fell by 173,000 barrels per day to 560,000 barrels per day, while our imports of gasoline fell by 101,000 barrels per day to 933,000 barrels per day…even after this week’s inventory increase, our gasoline supplies were 9.2% lower than last May 29th’s gasoline inventories of 257,795,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year…
Meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the first time in eight weeks and for the 11th time in 24 weeks, rising by 3,720,000 barrels to 132,802,000 barrels during the week ending May 28th, after our distillates supplies had decreased by 3,013,000 barrels during the prior week….our distillates supplies finally rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 648,000 barrels per day to 3,813,000 barrels per day, and because our imports of distillates rose by 243,000 barrels per day to 516,000 barrels per day while our exports of distillates rose by 70,000 barrels per day to 978,000 barrels per day….but after seven consecutive inventory decreases prior to this week, our distillate supplies at the end of the week were still 23.8% below the 174,261,000 barrels of distillates that we had in storage on May 29th, 2020, and about 8% below the five year average of distillates stocks for this time of the year…
Finally, with the increase in our refining and decrease in our oil imports, our commercial supplies of crude oil in storage fell for the 18th time in the past twenty-nine weeks and for the 26th time in the past year, decreasing by 5,079,000 barrels, from 484,349,000 barrels on May 21st to 479,270,000 barrels on May 28th, after our crude supplies had decreased by 1,662,000 barrels the prior week….after this week’s decrease, our commercial crude oil inventories were about 3% below the most recent five-year average of crude oil supplies for this time of year, but were still about 35% above the average of our crude oil stocks as of the the fourth week of May over the 5 years at the beginning of this decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels….since our crude oil inventories had jumped to record highs during the Covid lockdowns of last spring, our commercial crude oil supplies as of May 28th were 10.0% less than the 532,345,000 barrels of oil we had in commercial storage on May 29th of 2020, and 0.8% less than the 483,264,000 barrels of oil that we had in storage on May 31st of 2019, but still 10.3% more than the 434,512,000 barrels of oil we had in commercial storage on May 25th of 2018…
This Week’s Rig Count
The US rig count fell for just the 4th time over the past 38 weeks during the week ending June 4th, but it’s still down by 42.5% from the pre-pandemic rig count….Baker Hughes reported that the total count of rotary rigs running in the US was down by 1 to 456 rigs this past week, which was still up by 172 rigs from the pandemic hit 284 rigs that were in use as of the June 5th report of 2020, but was still 1,473 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in an attempt to put US shale out of business….
The number of rigs drilling for oil was unchanged at 359 oil rigs this week, after rising by 3 oil rigs the prior week, which is now 153 more oil rigs than were running a year ago, but still just 22.3% of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014….at the same time, the number of drilling rigs targeting natural gas bearing formations was down by 1 to 97 natural gas rigs, which was still up by 21 natural gas rigs from the 76 natural gas rigs that were drilling a year ago, but still just 6.0% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….
The Gulf of Mexico rig count was down by 1 to 13 rigs this week, with all 13 of those rigs drilling for oil in Louisiana’s offshore waters….that was the same number of Gulf of Mexico rigs that were drilling in the Gulf a year ago, when again all 13 Gulf rigs were drilling for oil offshore from Louisiana….since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week’s national offshore rig totals are equal to the Gulf rig counts…however, in addition to those rigs offshore, a rig continued to drill through an inland lake in St Mary parish Louisiana this week, whereas there were no such “inland waters” rigs running a year ago…
The count of active horizontal drilling rigs was unchanged at 415 horizontal rigs this week, which was still up by 162 rigs from the 253 horizontal rigs that were in use in the US on June 5th of last year, but less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014….meanwhile, the directional rig count was down by 2 to 25 directional rigs this week, which was still up by 1 from the 24 directional rigs that were operating during the same week a year ago….on the other hand, the vertical rig count was up by one to 16 vertical rigs this week, and those were also up by 9 from the 7 vertical rigs that were in use on June 5th of 2020….
The details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of June 4th, the second column shows the change in the number of working rigs between last week’s count (May 28th) and this week’s (June 4th) count, the third column shows last week’s May 28th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 5th of June, 2020..
As you can see, there were just a few changes this week…checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that two oil rigs were pulled out of Texas Oil District 8, which is the core Permian Delaware, while another rig was pulled out from Texas Oil District 8A, which encompasses the northern counties of the Permian Midland, which thus gives us a net decrease of three rigs in the Texas Permian….since the Permian basin only saw a one rig decrease nationally, that means that the two rigs that were added in New Mexico had to have been set up to drill in the far west reaches of the Permian Delaware, to account for the national Permian basin change…elsewhere in Texas, we find that a rig was added in Texas Oil District 6, which accounts for the Haynesville shale increase, but that there was no change in Texas Oil District 10, which means that the two Granite Wash rigs that were pulled out this week had to have been drilling across the panhandle border in Oklahoma…elsewhere in Oklahoma, we have the addition of an oil rig in the Ardmore Woodford, and another rig addition in a basin that Baker Hughes doesn’t name, leaving Oklahoma with no net change…at the same time, the oil rig that was pulled out of Louisiana’s Gulf waters was the only change in that state…meanwhile, natural gas rigs were down by one despite the Haynesville shale increase because the last natural gas rig that had been deployed in the Permain was pulled out this week, while one of the two remaining Eagle Ford natural gas rigs was also shut down, while an Eagle Ford oil rig was started up in its place, thus leaving the Eagle Ford showing no net rig change from a week ago..
Network of companies looking to move fracking wastewater in barges up and down Pittsburgh’s rivers – Millions of gallons of briny, toxic, wastewater from shale gas drilling and fracking operations could soon be loaded onto barges and pushed down the Allegheny, Monongahela and Ohio rivers. A loose network of river tank terminal and barge companies has floated plans to begin shipping wastewater containing petroleum condensates, cancer-causing chemicals and radioactive material, between as many as seven river terminal sites spread out over hundreds of miles of the region’s major waterways. The barging of wastewater on rivers has been discussed for at least a dozen years, but like a tow on a sandbar, the industry initiative has been repeatedly sidelined due to permitting issues, environmental concerns and the risk of contamination of public water supplies that draw from the rivers. Although shale gas well drilling and fracking have been in a trough due to low natural gas prices, interest in barging wastewater has rekindled in recent years as transport and disposal of the mixed liquid wastes have become costlier for the drilling industry. In meetings, letters and emails with regulators, barge companies and terminal owners have pressed regulatory agencies to issue authorizations, approvals and permits. And drilling industry publications are touting the public safety and economic benefits of moving wastewater by tanker barge. Last month, in the first publicized acknowledgement that the idea of wastewater barging is starting to move again, Belle Vernon-based Guttman Realty Co. received a grant of almost $500,000 from the Pennsylvania Department of Community and Economic Development’s Commonwealth Financing Authority to retrofit the existing tank and barge loading terminal along the Monongahela River in Speers, Washington County, 43.5 river miles above Pittsburgh’s Point. The changes would allow the Speers terminal to accept tanker truckloads of wastewater, also known by the shale gas industry term “produced water,” according to an April news release touting the grant from State Rep. Bud Cook, R-Belle Vernon. “The facility will be modified,” the release stated, “to accept waste water from the natural gas industry by truck to be stored in existing tanks and ultimately transported by barge to the treatment facility in Ohio.” Using barges to transport wastewater also will reduce truck traffic, diesel exhaust, truck-auto collisions and road damage, the release stated.But multiple environmental organizations from the tri-state area have strong concerns and many questions about those plans, saying river wastewater transport is poorly regulated and increases risks of chemical and radioactive spills, and those spills can contaminate waterways that are drinking water sources for millions of people, and, increasingly, recreational venues. They say drilling and fracking wastewater contains salty brines, drilling and fracking chemicals and naturally occurring radioactive material flushed from shale formations thousands of feet underground. Radium-226 and radium-228, both found in brine waste, are known carcinogens and can cause bone, liver and breast cancer in high concentrations, according to the U.S. Centers for Disease Control and Prevention. The wastewater can also contain other radioactive components, including Potassium 40, Thorium 232, and Uranium 238.
America Is Building Mountains of Radioactive Fracking Waste & the One in Joe Biden’s Hometown Is Under Criminal Investigation – A Public Herald Exclusive Podcast (with transcript)A community group’s letter about a landfill accepting fracking’s radioactive waste caught the attention of the Pennsylvania Attorney General’s Environmental Crimes Unit. In the heart of President Joe Biden’s hometown of Scranton, Pennsylvania, theFriends of Lackawanna are fighting the massive expansion of Keystone Sanitary Landfill, a waste dump that accepts radioactive material created by fracking for oil and natural gas.“This is the future of our community at stake,” said Michele Dempsey from Friends of Lackawanna. “Our community lives or dies on this [expansion] decision, and so we gave it our hearts and souls.” Dempsey’s community is just one of many across America where, since fracking began, state and federal regulators have sent radioactive material to residual waste sites. As this waste piles up in public and private landfills, the size and risk of these “TENORM Mountains” looms large.In Dunmore, according to resident Sharon Cuff, three new anti-landfill candidates were newly elected in the May 2021 primary: Mark Conway (Mayor), William O’Malley (City Councilor) and Katherine Oven (City Councilor).Dempsey, Cuff, and Maloney are part of Friends of Lackawanna, a non-profit group dedicated to protecting the health and safety of Lackawanna County from a proposed165-foot vertical expansion of Keystone across 435 acres, which includes a 145-million cubic yard capacity increase. Any day now, the expansion could be approved by the Pennsylvania Department of Environmental Protection (DEP), dramatically increasing the amount of radioactive material from fracking waste accepted at Keystone until it becomes higher than the Statue of Liberty. Keystone has a dirty history of contaminating groundwater, alleged illegal dumping, and other faulty operations that have led to federal investigation and litigation. The latest is its trouble with landfill leachate, the contaminated liquid that leaches out of landfill debris after rainfall.In December 2020, Keystone was punished by the DEP for contaminating groundwater with leachate and for storing it above regulatory limits, in violation of the Solid Waste Management Act. But records reviewed by Public Herald show that during the leachate investigation DEP did not require radiological testing of the leachate, despite outcry from Friends of Lackawanna. Radioactive material within the fracking waste buried at Keystone and other landfills is water soluble, which means that when it rains, radionuclides like cancer-causing radium-226 end up in landfill leachate. After receiving little help from Pennsylvania DEP about radioactivity and other concerns, the Friends of Lackawanna stopped hearing from DEP all together. So the group reached out to their District Attorney, who referred them to the Pennsylvania Attorney General’s Environmental Crimes office.
Behind Pennsylvania’s “Green” Activists: Pennsylvanians Against Fracking – Capital Research Center – Pennsylvanians Against Fracking is a front for the far-left Food and Water Watch (FWW), one of the country’s leading anti-fracking groups. FWW zealously opposes all forms of carbon-based fuels. Its website states that “we must end fossil fuels” and “a national ban on fracking is key.” FWW practices a kind of environmental fundamentalism, warring on “fake climate solutions” put forward by Democratic politicians and corporations who pay lip service to global warming. Most recently, the group attackedCalifornia Gov. Gavin Newsom (D), a leftist luminary, for supposedly shilling for Big Oil because his executive order banning future sales of gasoline-burning cars by 2035 didn’t go far enough.This sometimes has the amusing effect of putting FWW at odds with the larger environmental activist movement, with the group calling cap-and-trade a “drastic and ineffective” “scheme” for putting a price on carbon that’s “ultimately paid by consumers.” FWW has pressured Biden to “keep his public lands fracking ban promise,” issuing a March 2021 press release noting that “On the campaign trail, Joe Biden was crystal clear aboutending fracking on public lands.” This clashes with repeated reassurances from many on the professional Left and the media that the Biden administration isn’t interested in banning fracking on federally owned lands and Biden’s own campaign promises that he wouldn’t push for such a policy.Naturally, Pennsylvanians Against Fracking (PAF) has goals that are just asradical as the national organization: a ban on all new oil and gas wells and a statewide moratorium on fracking.Because PAF isn’t a standalone nonprofit but a website owned and operated by FWW, it doesn’t file its own IRS Form 990 report. Donations to the group are directed toward its parent and individual donors are impossible to identify, although a number of major grantors to FWW have been identified. Among them is Heinz Endowments, which isn’t a major donor to FWW but granted it $160,000 in 2019 “to strengthen community protections from shale development.” FWW’s top donors over the last two decades include:
- $33 million from the Greater Kansas Community Foundation;
- $30 million from the Columbus Foundation, an Ohio-based funder of environmental groups;
- $15 million from the Silicon Valley Community Foundation;
- $6 million from the Jewish Communal Fund;
- $4.3 million from Schwab Charitable Fund, a donor-advised fund provider (a kind of charitable savings account for anonymous donors);
- $2.4 million from Fidelity Investments Charitable Gift Fund, a donor-advised fund provider; and
- $1.6 million from the Park Foundation, an anti – natural gas funder.
Why Biden Isn’t Cracking Down on Fossil Fuels – Picture this predicament, described by our climate reporter Lisa Friedman in her latest article as “a paradox worthy of Kafka”: In order to break through the earth and tap the oil in the National Petroleum Reserve in Alaska, ConocoPhillips must install “chillers” into the thawing permafrost.And why is it thawing in the first place? Because of global warming, brought on by burning the very sort of fossil fuels that ConocoPhillips is extracting.With Joe Biden’s election in November, environmental advocates had hoped that such drilling on U.S. soil might become a thing of the past. But as Lisa documents in her article, ConocoPhillips’s work in Alaska is just one of several drilling and pipeline projects that Biden’s administration has recently gotten behind. Rather than turn back the Trump administration’s support for fossil fuels, Biden is in some cases defending it.The reasons are complicated – and have a lot to do with the tricky politics of governance while Democrats have only the narrowest control of Congress. To help us understand what’s been going on, and what the consequences might be for the environment, I caught up with Lisa today. Here’s what she told me.Hi, Lisa. On the campaign trail last year, Joe Biden criticized the Trump administration for continuing the country’s dependence on fossil fuels. But this month, Biden’s administration has taken a number of steps to endorse actions taken by Trump that would increase drilling on U.S. land and allow a major pipeline project to go forward. Catch us up on what’s happening.When Joe Biden was campaigning for president, he said he wanted to see the United States “transition” away from oil and other fossil fuels in favor of renewable energy, and yes, he also criticized many of his predecessor’s moves that locked in oil, gas and coal development in the United States.Since he’s taken office, Biden has put climate change front and center. He’s set an ambitious goal to cut greenhouse gas emissions by 50 percent from 2005 levels by the end of this decade, and he’s made a huge push on things like electric vehicle charging stations, offshore wind development and other clean energy production.Over the past month, though, his administration has also taken some steps that really worry environmental groups. In at least three cases, the Biden administration has offered support in court or declined to block oil and gas projects that could lock in decades more of the fossil fuel pollution that is heating the planet. The most recent is the administration’s support for ConocoPhillips’s multibillion-dollar oil drilling project in Alaska’s National Petroleum Reserve, known as the Willow project, which was approved by the Trump administration and is slated to produce more than 100,000 barrels of oil a day for about 30 years.
More MU Cos. Join ONE Future Low Methane Emissions Group – A coalition of upstream (drilling), midstream (pipeline), and downstream (utility) companies formed an industry group called ONE Future back in 2014. The aim of the group is to lower methane emissions across all aspects of the natural gas infrastructure system nationwide and to emit (lose into the atmosphere) no more than 1% by 2025. A number of Marcellus/Utica companies have joined (see our previous ONE Future stories here). Since March, nine more companies have joined, including Blue Racer Midstream, Tug Hill Operating, and Banpu. It’s a stampede! Blue Racer joined on April 1: Our Nation’s Energy Future (ONE Future) today announced the addition of three new members to its Coalition – Blue Racer Midstream, DTE Energy (Gas), and Jonah Energy LLC. These new members bring the Coalition to 41 companies strong. Blue Racer Midstream operates a natural gas gathering system, as well as processing plants and fractionation facilities in the Utica Shale and Marcellus Shale. Their facilities process and separate wellhead production into natural gas residue, ethane, propane, isobutane, normal butane, mixed butane, and natural gasoline. Blue Racer’s lean gas gathering pipelines connect producers to downstream pipelines and markets. They will report within the Gathering & Boosting and Processing Sectors. Detroit-based DTE Energy’s natural gas utility is one of the nation’s largest gas utilities, safely delivering natural gas to 1.3 million Michigan families and businesses in over 500 communities within Michigan. DTE Gas will report its methane intensity associated with their distribution sector of its utility. Jonah Energy is one of the nation’s leading sustainable natural gas producers. Jonah’s leadership challenges the status quo by providing extremely low emission natural gas and industry-leading wildlife conservation measures, while evaluating new technology and future opportunities to lead in a cleaner and low carbon economy. Jonah Energy will report its methane intensity within the Production sector.
W. Cornwall supervisors hear public comment on pipeline pump station application – The latest local skirmish in the nearly decade-long, litigation-filled saga of the Mariner East Pipeline took place Wednesday, June 2, at the Quentin Fire Hall, where local residents addressed the West Cornwall Township Board of Supervisors. The board is considering a permit application that would allow the pipeline’s owner to operate two pump station buildings on Route 322.The supervisors heard from eight township residents who expressed concerns that the pump station could release dangerous gasses – colorless, odorless, and combustible – either through a leak or an explosion, and that Sunoco wasn’t adequately planning for such an event. They also cited the multiple violations committed by Sunoco while constructing the pipeline through the county and what they described as Sunoco’s failure to adequately communicate with residents throughout the project. None of the speakers asked the supervisors to outright deny Sunoco’s application, but all asked that a series of conditions be placed on the use of the buildings.
Brookline Tries Again For A Fossil-Free Future -On June 2 Brookline voted, again, to become the first municipality in Massachusetts with an ordinance designed to keep fossil-fuel hookups out of new buildings. This was the town’s second attempt to get builders to go all-electric in future construction.Brookline’s first attempt, which was overwhelmingly approved in Town Meeting in 2019, was declared unlawful by Attorney General Maura Healey because it superseded state authority. Healey said she supported Brookline’s clean-energy goals, however.This time, instead of banning fossil-fuel installations in future construction, Town Meeting members proposed two carefully-worded warrant articles. Instead of a ban, the proposals require that people applying for special construction permits agree to go fossil-free in exchange for permit approval. Both proposals passed by margins of more than 200 to 3.Brookline Town Meeting member Lisa Cunningham, one of the leaders of the effort, says municipalities must take action because the state, which is legally obligated to reduce climate emissions to net zero by 2050, has no mechanism for limiting fossil fuel use. Buildings account for 27% of the state’s greenhouse gas emissions.Brookline’s new ordinances “won’t get us where we have to go,” Cunningham said, “but it is a first step and we really need to stop making this problem worse; we need to make it better.”
What Cimarex-Cabot deal may say about the Marcellus Shale – The pending merger of Cabot Oil & Gas with Cimarex, a Denver-based shale producer, helps to rewrite the story of Marcellus and Utica Shale development, although analysts say it won’t change much in the near-term. Cabot is one of the largest natural gas producers in Pennsylvania, a pure-play dry gas operator that sits close to the potentially strong markets of New York and New England but, like all the others, are constrained by a lack of pipeline development. Its regional headquarters is in Pittsburgh but most of its drilling is in Susquehanna County. The northeastern part of Pennsylvania has received a lot of attention lately, not only with the $17 billion all-stock merger of Cabot and Cimarex but also the $3 billion pending acquisition of Alta Resource Development’s northeastern Pennsylvania acreage by EQT Corp. While a major center of the Marcellus and Utica shale is located in southwestern Pennsylvania, both north and south of Pittsburgh, data shows the top county in the state for natural gas production remains Susquehanna. So what happens there helps determine the course of the state’s natural gas industry. Cimarex is involved in shale production in two basins far west of Pennsylvania, including the Permian Basin that is oil-rich but whose natural gas production has limited pricing and markets for the Marcellus and Utica energy companies. Executives were upbeat on the prospects of the Marcellus, and called it “underappreciated.” “They see additional M&A opportunities on the horizon, some of which would presumably be in the Appalachian Basin given their core focus on the area and enthusiasm around the play as a source of gas and the importance of maintaining both gas and oil production in their portfolio,” said Enverus senior M&A analyst Andrew Dittmar. Rystad Energy’s Head of Shale Research, Artem Abramov, doesn’t see any immediate challenges for the Marcellus but sees the potential for the combined company’s interest being moved elsewhere if pipelines continue to be a problem to build. “It is possible that with the persistent infrastructure challenges in the northeast, the new entity will have opportunities to prioritize Delaware (basin) instead of fighting hard for transportation agreements in the Marcellus region,” Abramov said. “So if anything, the new outlook is a slight upside for the Delaware part of the portfolio and a slight downside for the Marcellus.”
How Southwestern’s Haynesville acquisition diversifies its portfolio –Three years ago, Southwestern Energy went all-in on the Appalachian basin by selling off its Fayettesville shale assets for $1.8 billion. Wednesday, Southwestern announced a $2.7 billion deal that will move it from being a pure-play Marcellus and Utica Shale producer to a second shale basin in northern Louisiana. Southwestern is one of the 10 biggest natural gas producers in Pennsylvania. It has a large presence in Washington County, acquired in 2014 along with wells elsewhere in Pennsylvania from Chesapeake Energy. It’s grown even further, in West Virginia and Ohio, buying Montage Resources in November 2020 for $193 million. Southwestern has about 3 billion cubic feet of natural gas production in the Marcellus and Utica shales. Indigo Natural Resources will bring 1 billion cubic feet of natural gas production per day in the Haynesville and Bossier shales, one on top of the other in what is called stacked pay. Unlike the Cabot Oil & Gas Corp/Cimarex merger announced last month that will diversify by not just basin but by type – oil, natural gas and natural gas liquids – Southwestern and Indigo combined will be centered on natural gas and natural gas liquids. “It’s a very logical move for us, being a leading natural gas company to focus on the two leading natural gas basins in the United States,” Bill Way, president and CEO of Southwestern Energy, told analysts Wednesday. Way ticked off what Southwestern considered to be the benefits of the merger: Indigo’s strong balance sheet, the production accretive to free cash flow by about 30% in 2022, giving Southwestern better access to the Gulf Coast LNG and industrial markets, and about 1,000 new locations to drill for dry natural gas. Southwestern and Indigo together will have about 85% of its 4 billion cubic feet of combined daily production as natural gas.
Water quality impact to be key consideration as Mountain Valley Pipeline hangs in limbo -The Mountain Valley Pipeline faces a consequential summer. So do the streams and wetlands that the pipeline’s developers are seeking permission to cross. The U.S. Army Corps of Engineers will decide by July 2 whether to grant or deny additional time to West Virginia and Virginia environmental regulators to consider water permit requests from the joint venture that owns the pipeline, according to Corps Huntington District spokesman Brian Maka. Mountain Valley Pipeline LLC, the joint venture that owns the pipeline, still has applications pending with West Virginia and Virginia state environmental regulators for about 300 water crossings while it seeks approval from the Federal Energy Regulatory Commission to tunnel under 120 additional waterbodies. The West Virginia Department of Environmental Protection asked last month for an additional 90 days beyond the 120 days the Corps of Engineers gave the agency to review Mountain Valley Pipeline’s water permit request. In March, the Virginia Department of Environmental Quality requested an additional year to review the pipeline permit application. Both departments previously said that they hadn’t heard back from the Corps. The Mountain Valley Pipeline is designed to be a 303-mile natural gas system traveling from Northwestern West Virginia to Southern Virginia crossing Wetzel, Harrison, Doddridge, Lewis, Braxton, Webster, Nicholas, Greenbrier, Fayette, Summers and Monroe counties in the Mountain State. Pipeline developers have proposed a 125-foot-wide temporary right-of-way to construct the pipeline and a 50-foot-wide permanent right-of-way to maintain and operate the pipeline once in service. Mountain Valley anticipates that the project will have temporary effects on more than 21,000 linear feet of streams and 10 acres of wetlands in West Virginia during the construction phase. The pipeline already has had adverse impacts on West Virginia’s waters. State environmental regulators proposed a consent order earlier this year requiring Mountain Valley to pay a $303,000 fine for violating permits by failing to control erosion and sediment-laden water. That penalty followed a $266,000 fine from the same regulators in 2019 for similar erosion and water contamination issues. The Virginia Department of Environmental Quality fined Mountain Valley $2.15 million that same year for water quality violations. “Based on what I’ve seen thus far, I don’t know how they can permit this activity knowing that there are going to be additional impacts to water resources because of MVP’s track record,” West Virginia Rivers Coalition staff scientist Autumn Crowe said. The North Carolina Department of Environmental Quality reissued a denial of a water quality permit for the planned Southgate extension of the project in April. The Rivers Coalition has staunchly opposed the Mountain Valley Pipeline, joining legal challenges against it. The nonprofit has argued that the planned disturbance of wetlands would permanently alter the soil and hydrology of affected wetlands and that the buried pipeline within streambeds would create an increased risk during flooding.
Gas leak causes massive fire in the middle of Massachusetts street – A dozen homes were evacuated after a gas leak caused a massive fire in the middle of a Massachusetts street Saturday morning.The Marshfield Police Department reported the gas leak near Plain Street around 9:24 a.m. ET and closed off the street where large flames shot up 30 to 40 feet into the sky.The police reported no injuries but residents had to be evacuated while firefighters fought to control the blaze. Marshfield fire Chief Jeffrey Simpson told ABC affiliate WCVB that no utility crews were working in the area at the time the fire started, but firefighters found a downed power line which they think may have ignited the leaking gas from a 6-inch underground main. Firefighters kept the flame going to prevent the gas from pooling in the area and causing a bigger explosion, Simpson said. “First time in my career I want to see a fire burn, burn, burn,” he said. By 7:02 p.m., the authorities said crews were able to isolate the gas line and shut it down, and the fire was put out. Three dozen homes were left without gas, according to the Marshfield police.
‘We Won’t Pay:’ North Brooklyn Pipeline Opponents Launch Gas Bill Strike — If you don’t want to pay for National Grid’s controversial North Brooklyn Pipeline, don’t pay. That’s the message of the No North Brooklyn Pipeline Coalition, which announced a gas bill strike at midday today, in protest of the pipeline. The pipeline, which is already built, will carry fracked gas under Brownsville, Bed-Stuy, Bushwick, Williamsburg and Greenpoint, ending at a National Grid Depot on Newtown Creek. The coalition is encouraging Brooklynites and others opposed to the pipeline to withhold $66 of their National Grid gas bills, until the state rejects a recent rate hike proposal. They say that’s how much the utility wants to raise Brooklynites’ bills to pay for its controversial pipeline. If 15,151 ratepayers take up the bill strike pledge, National Grid would be short $1 million. National Grid told BK Reader protestors were setting “a dangerous precedent” by telling people not to pay their bills. But strike organizer Lee Ziesche said the people had done everything possible to oppose the pipeline “in the right way,” but it seemed the utility and state didn’t hear them. “We submitted thousands and thousands of comments, we had people who never get involved in these things getting involved, and they just ignored us. “We know they listen to money, so we’re withholding money, because that’s the only thing they care about.”
Battle Brews Over Banning Natural Gas to Homes – WSJ – A growing fight is unfolding across the U.S. as cities consider phasing out natural gas for home cooking and heating, citing concerns about climate change, and states push back against these bans. Major cities including San Francisco, Seattle, Denver and New York have either enacted or proposed measures to ban or discourage the use of the fossil fuel in new homes and buildings, two years after Berkeley, Calif., passed the first such prohibition in the U.S. in 2019. The bans in turn have led Arizona, Texas, Oklahoma, Tennessee, Kansas and Louisiana to enact laws outlawing such municipal prohibitions in their states before they can spread, arguing that they are overly restrictive and costly. Ohio is considering a similar measure. The outcome of the battle, largely among Democratic-led cities and Republican-run states, has the potential to reshape the future of the utility industry, and demand for natural gas, which the U.S. produces more of than any other country. Proponents of phasing out natural gas say their aim is to reduce planet-warming emissions over time by fully electrifying new homes and buildings as wind and solar farms proliferate throughout the country, making the power grid cleaner. Homes and businesses account for about 13% of the nation’s annual greenhouse gas emissions, according to the Environmental Protection Agency, mostly because natural gas is used in cooking, heating, and washers and dryers. Climate activists say reducing that percentage is critical for states with goals to slash carbon emissions in the coming decades. Opponents in the gas industry counter by citing the higher costs of making many homes fully electric, and pointing to the added security of having a second home energy source to heat and cook with during extreme weather events. They also highlight the preference many home and professional chefs have for using gas-fired stoves. New all-electric homes are cost-competitive with those that use gas in many parts of the country, but retrofits can be considerably more expensive, depending on the existing heating and cooking systems and the cost of effectively converting them. A recent study by San Francisco found that retrofitting all housing units that now use natural gas would cost between $3.4 billion and $5.9 billion, costs that would fall on residents, the city or both. Induction ranges, which use magnets to heat pots and pans directly, can be more expensive to buy than gas ranges, especially in professional kitchens. Restaurant associations across the nation have raised concerns about going electric. Utilities that supply both electricity and natural gas could face more muted impacts if the shift accelerates. But those that supply only natural gas face the prospect of slower growth or even a reversal of demand, especially if momentum builds to electrify both new and existing homes.
Emails: Utilities drafted talking points against gas bans — Tuesday, June 1, 2021 — Lawmakers in roughly a dozen states are using strikingly similar talking points as they unleash a wave of legislation aimed at forbidding municipalities from banning natural gas in buildings. A Pennsylvania legislator wants to forbid municipalities from restricting gas hookups because he says it’s fossil fuel discrimination. In Georgia, the sponsor of similar legislation said it would protect “freedom of choice.” The leader of a Texas bill says, “If a citizen wants to have gas in their home they can.” That’s no coincidence. Documents obtained by E&E News show how the natural gas industry has honed a unified message as it rushes to block efforts in a small but growing number of cities that seek to limit gas consumption in buildings. Talking points, crafted by a consortium of gas utilities, encourage energy companies and their allies to extol the dangers of limiting gas hookups. They argue such measures threaten to lock homeowners and businesses into costly energy options and stress the importance of fuel diversity. They also tout the environmental benefits of gas, which has elbowed out coal in the power sector and helped reduce carbon emissions. The industry has even coined a term for the pro-gas fight: “energy choice.” The gas industry’s message has been echoed in statehouses across America since the start of 2020. Eighteen states have passed laws prohibiting municipalities from restricting gas hookups on new construction. A handful of others, including North Carolina, Ohio and Pennsylvania, are weighing similar plans. Industry representatives have often partnered with builders’ associations, restaurant groups and real estate agents to make their case. The race to enact legislation is a response to local mandates restricting gas hookups in new buildings. These energy entry points at new residential structures can dictate which fuels will be used to heat rooms and water and for cooking over the lifetime of a home. More than 40 California cities have adopted measures restricting gas hookups, and cities in other parts of the country have started to mimic those policies as a way to address climate change. Seattle enacted similar restrictions earlier this year, and the New York City Council introduced a proposal to limit new gas hookups last week.
NCSU study finds vulnerable bear brunt of gas pipelines – NC Health News –For years, individual case studies have found that natural gas pipelines traverse primarily through socially vulnerable communities, resulting in cries of environmental injustice and lawsuits against big gas companies.Now, researchers at N.C. State University have taken those studies a step further with a deep data dive to show that the nation’s counties with the most socially vulnerable populations have significantly higher pipeline densities. The findings suggest that people living in those counties are at greater risk of facing water and air pollution, public health and safety issues, and other negative impacts associated with the natural gas pipelines, said Laura Oleniacz, a spokeswoman for N.C. State.“This is what the communities themselves have been saying for a long time,” said Ryan Emanuel, the study’s lead researcher and a professor in N.C. State’s Center for Geospatial Analytics. “For the first time, we gathered all of this together and zoomed out and took a national look and said, ‘You know what, these pipelines don’t exist in a vacuum.’”The study has been peer reviewed and is being published in GeoHealth, a journal that focuses on the intersection of environmental and Earth sciences, and health. The authors drew their conclusions using data on socially vulnerable communities from the Centers for Disease Control and Prevention and natural gas pipeline data from the U.S. Energy Information Administration, Emanuel said. The researchers used the CDC’s data to examine socially vulnerable communities on a county-by-county basis. The CDC defines social vulnerability as “the potential negative effects on communities caused by external stresses on human health. Such stresses include natural or human-caused disasters, or disease outbreaks.”
FERC Approves Scaled Back Pipe Connecting MU Gas to Gulf Coast –Enjoy the Republican majority on the Federal Energy Regulatory Commission (FERC) while you have it. That majority will end soon. Three FERC Republican commissioners have approved Enable Midstream Partners’ Gulf Run natural gas pipeline which will, in part, connect Marcellus/Utica gas supplies to the Gulf Coast for exporting (see New Pipeline Designed to Connect M-U Gas to Gulf Coast LNG Exports). Both of FERC’s leftwing Democrats, Chairman Richard “Dick” Glick and his sidekick NRDC lawyer Allison Clements, voted against the project. Why are we not surprised? The Gulf Run pipeline will run from northern Louisiana to Gulf Coast markets. The pipeline will connect to other pipelines, and that’s how Marcellus/Utica gas will reach it and go on to the Gulf Coast. In fact, the plan is to connect to multiple pipelines that in turn connect to not only the Marcellus/Utica, but also to the Haynesville, Barnett, and the Mid-Continent shale region too. Gulf Run was originally supposed to flow 2.75 billion cubic feet of gas per day (Bcf/d) running through 165 miles of 42-inch pipeline. The scaled-back version Enable filed with the FERC calls for 134 miles of pipeline that will flow 1.65 Bcf/d. The project is designed to transport natural gas from some of the most prolific natural gas producing regions in the U.S., including the Haynesville, Marcellus, Utica and Barnett shales and the Mid-Continent region, to the U.S. Gulf Coast and is backed by a 20-year commitment for 1.1 billion cubic feet per day (Bcf/d) from cornerstone shipper Golden Pass LNG. The planned 42-inch pipeline provides for approximately 1.7 Bcf/d of capacity, allowing for upside potential beyond Golden Pass LNG’s commitment. The cost for the project is currently estimated at approximately $540 million, and pipe for the project was recently acquired at favorable pricing relative to market. The contractor bidding process is underway, and the project is anticipated to be placed into service in late 2022.*
FERC must fix its broken approach to pipelines –Experts worldwide agree that avoiding the most devastating impacts of climate change will require a speedy transition away from fossil fuels. Yet in recent years, the U.S. federal government has rubber-stamped nearly every proposal advanced to construct natural-gas pipelines. This practice locks in fossil fuel infrastructure for decades and forces consumers to pay for pipelines that are not needed now or in the future.It’s time to change course and take an approach that avoids bad investments and climate pollution. The Federal Energy Regulatory Commission, the government agency that oversees interstate pipelines, has broad authority to act in the public interest in assessing pipeline applications. The commission should use its authority to meaningfully consider climate impacts and reject proposals that are inconsistent with national energy needs. While an ongoing proceeding offers FERC the opportunity to revise its policies, it will likely require a change in the commission’s membership later this year to allow these crucially important reforms to occur.The debate over FERC’s pipeline approval policy erupted into public view late last month at a tense meeting during which two pipeline extension projects were approved in a 3-2 vote along party lines. Despite the well-recognized link between pipelines and climate change, FERC’s three Republican commissioners dismissed the proposals’ climate-change impacts as insignificant and approved both applications over calls for further study from the two dissenting Democratic commissioners.The emissions impacts from the two proposals are hardly trivial. One of the projects, located in eastern Minnesota, will be the source of up to 925,000 metric tons of greenhouse gas emissions per year, which translates to roughly $50 million in annual climate-change costs, according to calculations based on widely used, conservative climate-damage valuations from the federal government. The total direct construction costs of the project are approximately $57 million – an amount vastly exceeded by the approximately $500 million in climate-change costs expected to accrue over the life of the initial contracts. Yet immediately after calculating the project’s emissions, the majority abruptly concluded that the project’s climate impacts are insignificant and do not merit further attention. The commission’s dismissive approach to the climate impacts of these projects is its latest evasion of its responsibility to fully consider whether a pipeline would serve the public interest. In 2017, the U.S. Court of Appeals for the D.C. Circuit found that FERC’s practice of ignoring the greenhouse gas emissions resulting from the combustion of natural gas is unlawful.
U.S. natgas futures jump to 2-week high on warmer outlook (Reuters) – U.S. natural gas futures rose 4% to a two-week high on Tuesday on forecasts for warmer than previously expected weather over the next two weeks that should boost the amount of gas power generators burn to keep air conditioners humming. Traders also noted that output was on track to decline at the same time soaring global gas prices were pushing U.S. exports close to record highs. Front-month gas futures NGc1 rose 11.8 cents, or 4.0%, to settle at $3.104 per million British thermal units, their highest close since May 17. Despite the big gain on Tuesday, speculators last week boosted their futures and options shorts on the New York Mercantile Exchange (NYMEX) to the highest since July 2020 because forecasts then were calling for mild weather through mid June. That helped cause the first drop in speculative net long positions on the NYMEX and Intercontinental Exchanges in four weeks. Data provider Refinitiv said gas output in the Lower 48 U.S. states slipped to a preliminary 89.7 billion cubic feet per day (bcfd) on the first day of June, down from an average of 91.0 bcfd in May. That compares with a monthly record high of 95.4 bcfd in November 2019. With warmer weather coming, Refinitiv projected average gas demand, including exports, would rise from 85.4 bcfd this week to 90.2 bcfd next week. The forecast for this week was higher than Refinitiv predicted on Friday before the long U.S. Memorial Day weekend.
Natural Gas Futures Slip Ahead of Fresh EIA Data; Tetco Issue Still Unresolved — After a double-digit gain to start the week, natural gas futures retreated a bit Wednesday as a majority of the previously reported production decline recovered midweek. With traders eyeing another potential bearish storage injection, the July Nymex gas futures contract settled 2.9 cents lower at $3.075. August fell 3.2 cents to $3.094. Spot gas prices continued to strengthen across most of the country, though Southern California recorded steep losses despite the continuation of record heat. NGI’s Spot Gas National Avg. ultimately went unchanged at $2.850. As for futures, the July Nymex contract fell early. Though some pullback was expected after the sharp spike on Tuesday, the losses were cemented once revisions in the production came to light. However, the news of Texas Eastern Transmission’s (Tetco) force majeure that reinstated a 20% pressure reduction and reduced southwest flows out of Pennsylvania remained front and center. Wood Mackenzie analyst Dan Spangler said flows would be cut by up to 1 Bcf/d, similar to the restrictions implemented last summer following the Danville explosion in the summer of 2019. The pipeline is also capping flows north through Pennsylvania at the Uniontown compressor station to 2.7 MMcf/d. “While this capacity is higher than recent flows, it constrains an outlet for gas that would otherwise be able to travel southwest,” Spangler said. Tetco’s pressure reduction is because of an amended corrective action order from the Pipeline and Hazardous Material Safety Administration (PHMSA). Tetco indicated that PHMSA had “temporarily approved” the pipeline company’s ability to recommence operations at its “full maximum operating pressure” as of late December 2020 following the completion of its remedial work plan.
US gas storage fields post second consecutive above-average weekly injection — US natural gas storage fields injected just above the five-year average for the week ended May 28, but below-normal builds are expected in the weeks ahead as gas-fired power generation accelerates and LNG exports outpace June expectations. Storage inventories increased 98 Bcf to 2.313 Tcf, the US Energy Information Administration reported June 3. The build proved greater than the 87 Bcf addition expected by an S&P Global Platts’ survey of analysts, but just above the five-year average build of 96 Bcf, according to EIA data. It was the second consecutive week the injection was more than most market expectations. Storage volumes now stand at 386 Bcf, or 41%, less than the year-ago level of 2.699 Tcf, and 61 Bcf, or 2.6%, less than the five-year average of 2.374 Tcf. The NYMEX Henry Hub July contract dipped 2 cents to $3.05/MMBtu in trading on June 3. Summer prices have given back nearly half of the 12 cents of gains picked up on June 1, following reports of a systemwide capacity reduction on Texas Eastern Transmission that is expected to reduce supplies in the US Gulf Coast area for a still undetermined length of time. Even so, the summer strip is sitting well above the $3 level after dipping below it for a week in late May. Capacity reductions notwithstanding, doubts about the tightness in supply-demand balances continue to swirl, particularly as storage inventory builds repeatedly have come in higher than market surveys anticipate, according to Platts Analytics. Platts Analytics’ supply and demand model currently forecasts 75 Bcf injection for the week ending June 4, which would measure about 20 Bcf less than the five-year average. Demand fundamentals for the week in progress have unwound the previous week’s gains in power generation demand while also seeing a recovery in residential and commercial and industrial loads following losses the week before. Total supplies are down roughly 900 MMcf/d on the week, for an average 94.4 Bcf/d, as offshore production has extended last week’s decline by another 200 MMcf/d while net Canadian imports have also pulled back an additional 600 MMcf/d. Downstream, power demand has fallen 2.1 Bcf/d while res-comm and industrial are up by a combined 1.7 Bcf/d. Taken together with a roughly 800 MMcf/d increase in export demand – both LNG feedgas and exports to Mexico – total demand is up by a net 400 MMcf/d week over week. Altogether, balances have trended 1.3 Bcf/d tighter from the reference week, though this is being driven mostly by weaker supply rather than stronger demand.
U.S. natgas futures rise on hotter midday forecasts – (Reuters) – U.S. natural gas futures rose almost 2% on Friday after midday forecasts called for hotter weather over the next two weeks than previously expected. Traders said they expect that extra heat will prompt power generators to burn more gas to keep air conditioners humming. Front-month gas futures NGc1 rose 5.6 cents, or 1.8%, to settle at $3.097 per million British thermal units. That put the front-month up about 4% for the week after it gained almost 3% last week. Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 91.3 billion cubic feet per day (bcfd) so far in June, up from 91.0 bcfd in May but still well below the monthly record high of 95.4 bcfd in November 2019. One reason production has slid in recent months is that drillers have not added enough rigs to keep up with natural declines in well output. The number of rigs drilling for gas in the United States this week fell by one to 97. That put the gas rig count down for a fourth week in a row for the first time since May 2020 as drillers focus more on improving cash flow, paying down debt and returning money to shareholders rather than increasing output. RIG/U With warmer weather coming, Refinitiv projected average gas demand, including exports, would rise from 84.6 bcfd this week to 88.0 bcfd next week and 89.7 bcfd in two weeks. The forecast for next week was a little lower than Refinitiv predicted on Thursday due to milder weather.
Colonial hack exposed TSA’s light-touch oversight of pipeline cybersecurity – Three times over the past year, Colonial Pipeline and the Transportation Security Administration discussed scheduling a voluntary, in-depth cybersecurity review – an assessment the federal agency began doing in late 2018 to strengthen the digital defenses of oil and natural gas pipeline companies, according to a company official and an industry official familiar with the matter.But no such review of Colonial’s systems has occurred, according to a Colonial spokesman. And the pipeline company has previously told federal officials it wants to first complete a headquarters move to a new building – probably in November – though the spokesman, Kevin Feeney, said on Friday that it may allow a review sooner.It’s unknown whether the government-run cybersecurity assessment would have helped Colonial avert the ransomware attack that locked up some of its computer systems this month – and led the company to shut down its entire pipeline, leaving large swaths of the East Coast with fuel shortages.But a range of current and former officials and cybersecurity experts say the company’s ability to avoid a government review underscores how a voluntary, arms-length approach by federal officials over nearly two decades has left key elements of the nation’s critical infrastructure at risk.“I’m very concerned whenever I see a lack of urgency given the potential threats we face,” said Rep. Jim Langevin (D-R.I.), co-founder of the Congressional Cybersecurity Caucus. “You’re leaving so many areas exposed by not having a review – and addressing at least the vulnerabilities that you can identify.” Now, in the attack’s wake, the Department of Homeland Security, which houses the TSA, is reversing course, scrapping two decades of a voluntary regime for pipeline cybersecurity and moving for the first time to mandatory rules. But a review of the TSA’s history since it was handed oversight of pipeline security in 2001 shows a government culture of closely partnering with energy giants and industry trade groups in setting guidelines that were voluntary. No penalty resulted for a failure to obey them.
Big Oil Fought Cybersecurity Regulations, Making Pipeline Attacks Easier – The American Petroleum Institute, the top trade group for the oil and gas industry, spent years opposing federal cybersecurity regulations before the Colonial Pipeline ransomware attack. After the attack, watchdog groups say API is still opposing strong federal regulation and pushing for taxpayer “subsidies” instead. Colonial Pipeline, one of the largest pipelines in the country, which carries 45% of the fuel from Texas to New York, was forced to shut down after a ransomware attack by the foreign cybercriminal group known asDarkSide. Cybersecurity experts believe that Colonial lacked advanced cybersecurity defenses that can monitor networks for irregularities and detect threats like DarkSide’s infiltration tools. But Colonial is not the first pipeline affected by cyberattacks and many other pipelines in the U.S. may have similar vulnerabilities. A ransomware attack hit an unidentified natural gas facility in 2020, forcing it to shut down for two days, according to the Department of Homeland Security. The Cybersecurity and Infrastructure Security Agency said after the attack that the owner of the facility “did not specifically consider the risk posed by cyberattacks” or prepare employees to deal with one. Federal officials have been sounding the alarm on the lax cybersecurity measures for years. Federal Energy Regulatory Commissioners Neil Chatterjee and Richard Glick warned in a 2018 op-ed that a lack of federal cybersecurity standards left energy firms vulnerable to cyberattacks. The Government Accountability Office in 2019 found that federal cybersecurity guidelines were badly out of date and lacked preparation to respond to an attack on critical infrastructure. After the Colonial attack, the cybersecurity firm Byos estimated that “less than 25% of the U.S. oil and gas industry has adequate cybersecurity in place,” according to Bloomberg News. One of the reasons that the federal government failed to enact regulations to protect critical infrastructure before the Colonial Pipeline attack appears to be a relentless campaign against federal regulations by the energy industry and API, which has spent more than $20 million on lobbying expenditures since 2018. Last year, API argued that “voluntary frameworks and public-private solutions, rather than prescriptive federal regulations, offer businesses the know-how and flexibility to respond to the ever-changing security landscape.” The group says its member companies believe the private sector “should retain autonomy and the primary responsibility for protecting companies’ assets” against cyberattacks. In the aftermath of the Colonial attack, API has changed its tune only slightly, arguing that it is “premature” to discuss regulations “until we have a full understanding of the details surrounding the Colonial attack.” API CEO Mike Sommers even suggested that it was just as important to protect the industry from regulators as from cyberattacks. A progressive watchdog group accused the group of trying to cash in on the cyberattack. “In the wake of dangerous cyber threats, the American Petroleum Institute is apparently angrier with the government for stepping up to stop future attacks than they are with the hackers doing the attacking,” Kyle Herrig, president of the left-leaning watchdog group Accountable.US, said in a statement to Salon. “The government has an obligation to protect American interests from cyberattacks including pipelines and other infrastructure – API treating these serious threats as a cash cow to line oil industry pockets while lobbying against the government stepping up protections shows they have the wrong priorities.”
Memphis Council delays vote to preserve aquifer – = The Memphis City Council is expected to make a final decision within the next few weeks on an ordinance regarding the Memphis Sand Aquifer and its preservation. On Tuesday, the council delayed a vote until July 6 to recognize the importance of the aquifer as the sole source of drinking water for many Shelby County residents while recognizing the impact contamination would have on the local environment. The ordinance was sponsored by Councilmembers Jeff Warren and Edmund Ford in regards to the controversial Byhalia Connection Pipeline, a joint venture between Texas-based Plains All American Pipeline and Valero Energy Corporation.The 45-mile crude oil pipeline would pass through mostly Black neighborhoods from Memphis into Marshall County, Mississippi. Residents and opponents of the pipeline fear any leak from the pipeline could contaminate the Memphis Aquifer. Because of this, several groups launched legal battles against the pipeline, including Memphis Against the Pipeline and Southern Environmental Law Center (SELC). A new study conducted by the Center for Applied Earth Science and Engineering Research at the University of Memphis showed that there are two points along the path of the pipeline where shallow aquifers connected to the Memphis Aquifer, increasing the risks of contamination. If the ordinance passes, pipeline officials would have to seek approval from the Memphis Underground Review Board and prove that public water supply wells are 1,000 feet from the project boundary. An investigation would also be launched into the potential impact a company carrying hazardous materials would have on minority populations and neighborhoods historically burdened by environmental pollution. Opponents of the pipeline, including former Vice President Al Gore, called the pipeline an example of environmental racism, recognizing that Black neighborhoods tended to shoulder the risks of being exposed to toxics from nearby industrial facilities. A study identified Southwest Memphis as a hotspot for air pollution, noting that residents faced cancer risks “four times higher than the national average.”
Kinder Morgan to pay $1.2B for Crestwood-Consolidated Edison natural gas JV -Houston-based Kinder Morgan Inc. (NYSE: KMI) will acquire Stagecoach Gas Services LLC for $1.225 billion. Stagecoach is a natural gas pipeline and storage joint venture between New York-based Consolidated Edison Inc. (NYSE: ED) and Houston-based Crestwood Equity Partners LP (NYSE: CEQP). It includes four natural gas storage facilities with 41 billion cubic feet of FERC-certificated working gas capacity plus 185 miles of natural gas pipelines. Stagecoach Gas Services operates in the core of the Northeast Marcellus and Utica Shale plays, with the pipeline connecting to multiple points in Pennsylvania and New York, including interstate pipelines like the Tennessee Pipeline, a Kinder Morgan subsidiary. Fitch Ratings Inc. said in a June 1 note that it believes the cash-funded acquisition will not have a material impact on the company’s business risk. “Kinder had a $1.4 billion cash balance as of March 31, 2021, boosted by a first-quarter 2021 $759 million gross margin from the February 2021 winter storm and cold snap,” Fitch’s note said. “The storm demonstrates the value of gas storage and pipeline assets, and Fitch views the Stagecoach assets favorably given the regulatory issues facing construction of new assets, particularly in the northeast.”
Winter storm windfall put Kinder Morgan in position for Stagecoach purchase – A $1 billion boon to Kinder Morgan Inc.’s balance sheet from February’s severe weather enabled the natural gas pipeline giant to offer to buy Stagecoach Gas Services LLC from Crestwood Equity Partners LP and Consolidated Edison Inc., analysts said. Mizuho Securities USA LLC Managing Director Gabriel Moreen agreed with analysts at Scotiabank and Raymond James & Associates Inc. that Kinder Morgan was “effectively taking the [winter storm] proceeds and redeploying them.” “I think the acquisition should be well received, but I think investors still want to know Kinder Morgan’s capital return plans,” Moreen said in an interview. Stagecoach Gas, which Kinder Morgan agreed to acquire for roughly $1.23 billion, comprises four gas storage facilities in New York and Pennsylvania with a total working capacity of 41 Bcf and 185 miles of pipelines. The pipelines have interconnects to major interstate gas pipelines, including Kinder Morgan’s Tennessee Gas Pipeline Co., connecting gas supplies to Northeast U.S. demand markets. Scotiabank told clients June 1 that while they “expect the sticker price to cause some upfront heartburn” for shareholders, Kinder Morgan “is expected to be one of the few operators that could have potentially captured operating synergies” from buying Stagecoach, given the connection to Tennessee Gas. For Crestwood, the deal announcement “eliminates some uncertainty as investors had been somewhat concerned” that it would buy out ConEd’s 50% stake, Raymond James said. Crestwood took a $120 million impairment during the first quarter on Stagecoach to make the company more attractive to potential buyers. “We had an indication that the market value of Stagecoach’s assets was below its carrying value,” “We also had a very comparable transaction announced in a similar time frame with the Natural Gas Pipeline Co. of America LLC trade, coming in at the 11x to 12x range, which was kind of also in the ZIP code of how we assessed fair value.” After Kinder Morgan and Brookfield Infrastructure Partners LP agreed in February to farm out a 25% stake in the Natural Gas Pipeline system to a fund managed by ArcLight Capital Partners LLC, Crestwood valued its 50% share in Stagecoach at $666 million.
Kinder Morgan urges new tax credits as midstream firms embrace carbon capture – Kinder Morgan Inc. CEO Steven Kean called for additional federal policy incentives to build out CO2 pipeline infrastructure as more North American midstream companies announced carbon capture, utilization and sequestration initiatives. Extended Tax Code Section 45Q credits are offered to industrial manufacturers that capture carbon emissions and either store them permanently or put them to use in applications that reduce life cycle emissions. U.S. President Joe Biden’s administration plans to make the credits more accessible to developers, but Kean warned that converting existing pipelines to transport CO2 will not be viable without new subsidies. “You really do need to move this stuff in liquid form, which means … very high-pressure pipe,” the CEO said June 2 during a conference hosted by Sanford C. Bernstein & Co. LLC. “If you think about [natural] gas and liquids pipelines running at 800 to 1,000 psi, call it – there’s various newer pipelines at 1,440 or something like that – but you need to move the CO2 in liquid format, call it 2,000 psi. You can’t just simply retrofit.” Kean did acknowledge that “there may be some solutions around that by doing the compression and liquefaction at the other end of the pipe.” The Kinder Morgan CEO said in April that the gas pipeline giant would consider bringing in joint venture partners as it seeks to expand beyond sequestration and pipeline transportation to carbon capture.
In Blow to Big Oil, Corporate Subsidy Quietly Dies in Texas – WHEN ORGANIZERS SET out to overturn Texas’s giveaway program for the oil and gas industry, they had a long game in mind. Over 20 years, the tax exemption program known as Chapter 313 had delivered $10 billion in tax cuts to corporations operating in Texas – with petrochemical firms being the biggest winners. This year, for the first time in a decade, the program was up for reauthorization. Organizers decided to challenge it for the first time. At the beginning of last week, as Texas’s biennial legislative session approached its end, the aims of organizers remained modest. “We thought it would be a victory if the two-year reauthorization passed so we could organize in interim,” said Doug Greco, the lead organizer for Central Texas Interfaith, one of the organizations fighting to end the subsidy program. At 4 a.m. last Thursday, it became clear that something unexpected was happening: The deadline for reauthorization passed. “The bill never came up,” Greco told The Intercept. Organizers stayed vigilant until the legislative session officially closed on Monday at midnight, but the reauthorization did not materialize. The lapse in authorization coincided with three other groundbreaking blows to oil and gas corporations. A Dutch court ruled that Shell Oil is liable for its climate impacts and must reduce its greenhouse gas emissions. Exxon Mobil shareholders booted out two members of the corporation’s board of directors for its failures on the climate crisis. And Chevron shareholders voted to force the company to cut its emissions. With all four developments coming on the same day, the failure to reauthorize the subsidies in Texas fell under the radar. Taken together, the moves demonstrate changing opinions about climate change and fossil fuel companies; one analyst referred to the news about Shell, Exxon, and Chevron as “the start of a new era for Big Oil.” Between the court decisions, shareholder activism, and the unwillingness of Texas legislators to continue unpopular handouts to oil companies, the public may no longer be willing to go along with business as usual for fossil fuel firms.
Permian Study Finds Overproduction Leading to More Methane Leaks – The energy-rich region of the southwestern U.S. known to geologists and fossil fuel enthusiasts as the Permian Basin has expanded its production more quickly than any other oil and gas region in recent years, reaching 38% of U.S. oil and 17% of gas production in 2020. With this scale has come a gush of greenhouse gas emissions, although just how much has until recently been impossible to say. Between September and November 2019, a team of scientists from the NASA Jet Propulsion Laboratory, the University of Arizona, and Arizona State University flew multiple times over the 21,000 square miles of the Permian Basin with airplanes bearing sensors that allowed them to pinpoint “super-emitters” of methane. About 29% of the total lost gas quantified in flyovers between September and November 2019 came from “routinely persistent” sources, indicating that these leaks could be largely eliminated with repairs and diligent monitoring. The releases represented just 11% of emissions sites from a total of 1,100 unique sources studied. While carbon dioxide is a bigger driver of global warming and lasts longer in the atmosphere, methane – the main component of natural gas – traps more than 80 times as much heat over a 20-year period. Halting methane emissions from the oil and gas industry has jumped to the top of climate to-do lists in part because policy analysts have identified it as one of the cheapest and easiest ways to hold down global temperatures.
With the World Focused on Reducing Methane Emissions, Even Texas Signals a Crackdown on ‘Flaring’ – The practice of burning off unwanted natural gas from oil wells releases hazardous pollutants, which disproportionately affect communities of color. This practice of burning off unwanted natural gas from oil wells has been commonplace and largely condoned by Texas regulators across the state’s shale fields for years. But now winds of change have begun blowing here in Texas, as climate activists at the state and national level focus on flaring and on methane, the largest component of natural gas and a climate super-pollutant 86 times more potent at warming the atmosphere than carbon dioxide over a 20-year period. In advance of April’s climate summit in Washington, leading environmental groups called on President Biden to cut the nation’s methane emissions by 40 percent by 2030, as the best way to slow global warming over the next two decades. The U.S. Senate followed up on April 28 by reimposing Obama-era controls on methane leaks from oil and gas wells that had been rolled back by the Trump administration. Even the Texas Railroad Commission, the state’s pliant regulator of the fossil fuel industry, deferred consideration of a series of flaring applications from oil companies in February – applications it had routinely approved for years – after one commissioner said flaring should be “a necessary last resort” during emergencies and not a wasteful and polluting practice to dispose of unwanted natural gas. Flaring the gas is preferable to simply “venting” it into the atmosphere, another common practice. Burning the gas turns methane, the super-polluting greenhouse gas, into carbon dioxide, the primary cause of climate change, which is less warming. But both flaring and venting, beyond their impact on climate change, pose serious health threats to nearby residents like Rhyne. Flaring releases a variety of hazardous air pollutants, including volatile organic compounds like benzene, a carcinogen, and contributes to ground-level ozone, a pollutant that causes respiratory illness and heart disease. Ever since Apache first started drilling in 2016, Rhyne said, flaring and venting have become prevalent. Phil West, a spokesman for Apache, said flaring, while “sometimes-necessary,” is a practice Apache uses “sparingly.”
Emissions from Texas’s Permian Basin will be a climate test for Joe Biden – Vox –Around 265 million years ago, much of modern-day Texas was underwater, and the vast region known as the Permian Basin was a flourishing coral reef. Today, the organisms that once thrived there have been transformed into enormous deposits of fossil fuels – and they have made the area one of the most treacherous front lines in President Joe Biden’s domestic fight against climate change. The Permian Basin, which stretches hundreds of miles across West Texas and southeast New Mexico, accounts for 40 percent of US oil production and 15 percent of its natural gas, according to February data. Less than a year after oil prices dipped into negative territory because of the Covid-19 pandemic, production in the region has bounced back almost to pre-pandemic levels. Already, the region is the nation’s No. 1 source of methane, a greenhouse gas that warms the planet far more efficiently than carbon dioxide in the short term. The US oil and gas industry has pinned much of its future hopes on the region, especially in the next decade: If it gets its way, the Permian Basin will still grow through 2029, outranking every country except for Saudi Arabia in liquid fuel production, according to one analysisfrom Oil Change International. At this rate, by 2050, it would account for 39 percent of the world’s new oil and gas emissions. The world can’t afford this if it is to meet international climate goals. That’s what the International Energy Agency recently made clear in a report that argued for halting new investment in fossil fuel production, starting in 2021. Yet under Biden, the Permian could undergo expansion if the industry sees through its plans to export its gas and oil. That means any credible US response to the climate crisis will need to include a plan for the West Texas Permian Basin. But wrangling Texas oil and gas emissions could test President Biden’s powers like nothing else. When Biden signaled early in his presidency that fighting climate change must involve reining in the fossil fuel industry, Texas Gov. Greg Abbott immediately signaled that he would protect the state’s oil and gas industry at all costs. On January 28, Abbott signed anexecutive order to direct every state agency to use all lawful powers and tools to challenge any federal action that threatened the Texas energy sector. Biden has committed to slash US climate pollution in half by 2030 to contain the worst of global warming, but the administration has few levers to limit pollution in a red state infamous for deregulating the industry. The Texas side of the Permian is the biggest challenge. The land is entirely state- and privately-held, compared to the federal lands in New Mexico, which makes it hard to discourage future oil production by blocking new leases. And unlike New Mexico, the state regulators and politicians have shown no interest in coming to terms with the Permian’s pollution. That leaves the Biden administration with a thorny choice: It could take a gentler approach and regulate the Permian’s climate emissions but risk not doing enough. Or it could swing a political sledgehammer by declaring a climate emergency and cutting off the Permian from its global customers – which could provoke intense backlash from Abbott, industry, and voters in upcoming elections.
Opportunities for CO2 sequestration through enhanced oil recovery, part 2. No doubt about it. The global effort to reduce emissions of carbon dioxide – the most prevalent of the greenhouse gases – is really heating up. Yes folks, CO2 is in the spotlight, and everyone from environmental activists and legislators to investors and lenders want to slash how much of it is released into the atmosphere. There are two ways to do that. First, produce less of it. That’s what the development of no- or low-carbon sources of power and the electrification of the transportation sector are intended to accomplish. The second way is to capture more of the CO2 that’s being emitted and make it go away, and the most cost-effective means to that end is sequestration – permanently storing CO2 deep underground, either in rock formations or in oil and gas reservoirs through a process called enhanced oil recovery, or EOR. Sure, there’s an irony in using and sequestering CO2 to produce more hydrocarbons, but the volumes of CO2 that could be squirreled away for eternity through EOR are enormous, and the crude produced might credibly be labeled “carbon-negative oil.” In today’s blog, we continue our look at the rapidly evolving CO2 market and the huge opportunities that may await those who pursue them.As we said in Part 1 of this blog series, CO2 EOR technologies have been around for almost 50 years. During most of that time, however, EOR has been a footnote in the financial statements of all but a handful of companies. But now, ESG and the momentum to address the climate-change challenge sooner rather than later has thrust CO2 EOR to center stage. Whether they are involved in CO2 capture or not, oil and gas companies are fond of EOR. Unlike solutions that rely on technologies like solar photovoltaics and lithium-battery storage (outside the sweet spot of most oil companies), CO2 EOR uses processes and techniques that are quite familiar to hydrocarbon producers, as well as being proven and used in several major basins. So we know they work, and can be scaled up to handle far greater volumes of CO2 than they do today. We’ll get back to just how much CO2 is sequestered using EOR a little later, but first let’s consider the big picture. For starters, how big is this CO2 problem in the first place?The answer? Really big. In fact, it’s hard to wrap your head around the sheer magnitude of the GHGs being emitted into the atmosphere. As shown in Figure 1, more than 50 gigatons (billion metric tons) of GHGs are released each year across the globe, here calibrated to CO2-equivalent volumes. CO2 alone (lavender bar segments) accounts for about four-fifths of the total, followed by methane (light green bar segments) and nitrous oxide (yellow bar segments). The blue line represents the U.S. portion of the worldwide CO2 annual total: about 5 gigatons. If you squint looking at Figure 1, you’ll see that U.S. CO2 emissions have been gradually declining since 2005, when they reached almost 6 gigatons. Much of that decline is tied to shifts in the U.S. power generation sector from coal to natural gas and renewables. In contrast, GHG emissions by the rest of the world increased by almost 10 gigatons of CO2 equivalent over the same period, mostly due to economic growth in China, India, and other emerging markets, with some reduction in 2020 due to the COVID pandemic.
New program partners education organizations with oil and gas companies to fill job gaps – Permian Strategic Partnership is teaming oil and gas companies with education organizations to fill gaps in the workforce. The Catalyst Workforce Development program is in the early stages of the project, but it’s been in the works for over a year. Phase one of the project includes collecting data from oil and gas companies about the highest demand jobs – and then figuring out how to teach skills for those jobs. PetroSkills – an oil and gas skill training company – and the University of Texas Petroleum Extension are working together to align the needs of the industry with what’s taught in school. “Our main goal is to make sure people who grow up here, live here, part of the community have the training and skills that they need to successful and stay here,” said PSP director of education and workforce initiatives, Molly Young. After a challenging year for oil and gas, the launch of the Catalyst project is bringing renewed energy to the industry. “I think there’s so much energy right now around the industry coming back up and recovering from COVID and all the economic impacts that happened in the last year. This is a great thing to rally around where we can both our industry and education partners together to work on something meaningful,” said Young. The Catalyst project will involve K-12 school districts and community colleges, and four-year universities in the Permian Basin. Young says she hopes the young people of this community will see this as an investment in their futures and encourage them to stay here and work.
We Energies’ Ixonia proposal survives appeal – – It’s not a “done deal” yet, but it’s getting there. A We Energies liquid natural gas storage tank proposed for Ixonia on Thursday survived a conditional use permit appeals process conducted by the Jefferson County Zoning Board of Adjustment. According to Jefferson County Corporation Counsel Blair Ward and county Administrator Ben Wehmeier, the conditional use permit for the controversial facility that We Energies is hoping to install in Ixonia could face another citizens group appeal at the Jefferson County Circuit Court level and the structure also must pass muster with the state’s Public Service Commission. Dating to April, the Jefferson County Zoning Board of Adjustment has struggled with 1,104 pages of written record from a Jefferson County Planning and Zoning Committee decision to permit We Energies a conditional use to build a proposed liquified natural gas processing and storage facility in Ixonia. The appeal alleged that members of the planning and zoning committee made a number of errors Nov. 11, 2020 when they granted We Energies the conditional use permit. Among those errors, according to the appeal, was a misinterpretation of the definition of a “utility” in the county zoning ordinance, which allowed the proposed facility to qualify as a conditional use in an agricultural preservation zone; failure to consider more appropriately zoned areas, such as industrial districts, as a site for the plant; and incorrectly concluding that all criteria in state statutes required to allow a “utility” use in a farmland preservation district had been satisfied. On Thursday, the board of adjustment spent approximately seven hours deliberating before returning its decision that the conditional use permit appeal should be denied. The vote was 2-1, with Weiss and Sayre-Hoeft voting to allow the permit. Roberts cast the dissenting vote. The proposed We Energies facility would include a 15-story, 150-foot-diameter tank to store 12 million gallons of liquified natural gas. The plant also would have equipment to process vaporized natural gas into a liquid and back again, a section of pipeline connecting to a main natural gas pipeline plus an electric substation. . The Ixonia residents who filed the appeal alleged, among other impacts, that the proposed large industrial-type facility would reduce their property values, as well as the use and enjoyment of their properties; change the rural character of the area and cause noise, odors, light pollution and increased truck traffic. They also claimed the facility would endanger their safety, due to the possibility of a leak, fire, explosion or other event at the plant.
Michigan rejects Canada’s claim that Line 5 pipeline dispute is cross-border treaty issue – The dispute over the cross-border Line 5 pipeline is entirely for Michigan to deal with, the state’s attorney general argues in a legal brief released Wednesday that flatly rejects Canada’s depiction of a foreign-policy matter that Ottawa and the White House must resolve. In a sternly worded 21-page legal filing, Attorney General Dana Nessel excoriates the arguments of the pipeline’s owner, Calgary-based Enbridge Inc., as “meritless” and “baseless,” and waves away the submissions of the federal Liberal government, neighbouring states and various industry stakeholders as little more than policy-based window-dressing. Enbridge is trying to convince Michigan court Judge Janet Neff that the case needs to be heard by a federal judge because it raises “substantial federal questions” about Gov. Gretchen Whitmer’s effort to shut down the line for fear of an environmental disaster in the Great Lakes. Nessel disagrees. “This case is a state-law action through and through,” her brief begins. Michigan is “invoking powers that are unique to a state sovereign,” it says, and asserting claims under Michigan laws “over a strip of land that is owned by the state, located within the state, and held in trust by the state for the public benefit of its people.” The dispute first erupted in November when Whitmer – citing the risk of a catastrophe in the Straits of Mackinac, the waterway where Line 5 traverses the Great Lakes – abruptly revoked the easement that had allowed the line to operate since 1953. Enbridge insists the pipeline is safe and has already received the state’s approval for a $500-million effort to dig a tunnel beneath the straits that would house the line’s twin pipes and protect them from anchor strikes. The company has made it clear it has no intention of shutting down the pipeline voluntarily.
Telecommunications firm interested in using new Line 5 tunnel – A Marquette-based telecommunications company is one of the first third party companies to express interest in using a tunnel scheduled to be built beneath the Straits of Mackinac. Peninsula Fiber Network, which provides services for telecommunication providers and operates a 911 network in most Michigan counties, filed a letter of intent with the state to use the tunnel, company General Manager Scott Randall said. “We would place a significant fiber-optic facility … within the utility corridor within the tunnel,” Randall said Wednesday to the Mackinac Straits Corridor Authority. “We would make that available to any other provider who wants to utilize that route. Doing so, we feel would help ensure stable and secure communications for the state of Michigan.” There currently is one other fiber optic cable connecting the Upper and Lower peninsulas that runs along the Mackinac Bridge, Peninsula Fiber Network said. Enbridge Energy still is pursuing a final federal permit from the U.S. Army Corps of Engineers as well as authorization from the Michigan Public Service Commission for construction of the roughly 4-mile tunnel under the straits and the location of a new segment of Line 5. Enbridge is preparing a request for proposals for construction of the tunnel as well as a tenant manual for third party utilities interested in using the tunnel.
Does the U.S. Really Need Another Oil Pipeline? – A decades-old pipeline called Line 3, run by the Canadian company Enbridge, is in the midst of a controversial upgrade sparking fierce resistance from Indigenous communities living along the route. Line 3 is being replaced in order to enable the transport of nearly 800,000 barrels of dirty tar sands crude oil per day from Calgary, Canada, to Wisconsin. The majority of the pipeline cuts across northern Minnesota through the heart of lands where the Anishinaabe people have treaty rights to hunt, fish and harvest wild rice and maple syrup.Line 3 joins a growing list of controversial oil pipeline projects targeted by the burgeoning Indigenous-led climate justice movement. In his last year in office, President Barack Obama responded to the powerful and internationally hailed convergence at Standing Rock in South Dakota by halting work on the Dakota Access Pipeline project. Almost a year earlier, he had canceled the Keystone XL pipeline – which was another major target of climate protesters. Entering office in January 2017, President Donald Trump promptly revived both projects and eventually greenlit the Line 3 pipeline. Once Joe Biden entered the White House in early 2021, he canceled the doomed Keystone Pipeline but has yet to take action on reversing Trump’s approval of DAPL or canceling the Line 3 project.Indigenous leaders, embodying the spirit of Standing Rock five years ago, have been resisting the Line 3 replacement project and are now calling on all Americans, including those who are not Indigenous, to join them for what is being called a “Treaty People Gathering” from June 5 through 8 to demand an end to the project. One of them is Nancy Beaulieu, co-founder of the Resilient Indigenous Sisters Engaging(RISE) Coalition, and the northern Minnesota organizer for 350.org. Beaulieu explained to me in an interview that, “as Indigenous people, we have the inherent responsibility to protect the waters and all that is sacred. And as settlers – people who signed those treaties with our ancestors – they have an obligation to uphold those treaties.” In other words,“everyone has a responsibility to the treaties” signed with tribal nations.Non-Indigenous Americans have largely forgotten not only that we have treaty obligations, but also that we live in a nation with a bloody history of settler colonialism. Former Republican Senator Rick Santorum demonstrated that ignorance in his tone-deaf comments on CNN – which later got him fired – when he said, “We birthed a nation from nothing. Yes, there were Native Americans, but there isn’t much Native American culture in American culture.”Leaders like Beaulieu are determined to fight such erasure by reviving the conversations around treaty obligations and how the fight against pipelines and climate change is central to Indigenous stewardship of the natural world. She sees the June gathering as building on the Standing Rock mobilization and the Keystone pipeline activism, saying it is “the same exact thing but with different tribes.”
1,000 Civil Disobedience Arrests Expected if Minnesota Gov. Walz Doesn’t Stop Line 3 Tar Sands Pipeline –The coming month will be critical for the controversial Enbridge Line 3 tar sands oil pipeline, currently under construction in Northern Minnesota, AP reports.”Due to the urgency of the climate crisis crisis and the fact that Indigenous leaders have not consented to the Line 3 project,” organizers from 300 groups warned President Biden in a letter last week, “large-scale non-violent civil disobedience is now being organized for early June along the Line 3 pipeline route.” Organizers are calling on Biden to halt the pipeline, and will convene a “Treaty People Gathering” June 5th through 8th. Construction on the project to dramatically increase the amount of oil the pipeline can carry is scheduled to resume soon and Gov. Tim Walz (D) is waiting for a Minnesota Court of Appeals ruling expected by June 21 – the state Department of Commerce, two tribes, and other opponents argue that the company’s demand projections failed to meet the legal requirements. Organizers did not share details of their plans because police are also preparing for their protests but Winona LaDuke, founder of the Indigenous-based environmental group Honor the Earth, told the AP she expects “over 1,000 people are going to get arrested” if Walz fails to halt the project.
They’re Shoving A Pipe Down Our Throat’: Inside Winona LaDuke’s Fight Against Line 3 – – You’ve likely heard about Line 3 by now. It’s a pipeline that would bring tar sands oil through northern Minnesota to Superior, Wisconsin. Part of it would run alongside an existing pipeline corridor but some of the route requires carving out a new path. Construction on the Minnesota portion started in December and is expected to pick back up June 1. But the resistance to the project hasn’t let up.Line 3 construction legal challenges and protests have been ongoing for months and years. We recently traveled to the Bemidji area to meet the women leading the resistance and to see what they say they are fighting to protect. “Well we are quite ferocious competition,” said Winona LaDuke of Honor the Earth. You could call her a Harvard-educated economist, an author, farmer, and nonprofit organizer. Or you could call her a former vice presidential candidate and an Anishinaabe.LaDuke is all that. And she’s a water protector who’s been fighting a pipeline route near the White Earth reservation she lives on for eight years.She took us to see the Shell River and Shell Lake, one of her biggest concerns.“This is the Shell River coming out of Shell Lake, and this river is crossed four times by Enbridge,” LaDuke said.The pipeline will cross not only this river but the Mississippi River twice along with more than 200 other bodies of water, according to LaDuke. “It’s a really beautiful lake, it is a lake that is full of wild rice,” LaDuke said. “There’s a lot of life in this river, and they don’t deserve it.”Enbridge, a Canadian based energy company, is behind the project. It moves roughly a quarter of the crude oil produced in North America. It says the rest of the pipeline is already built and the Minnesota portion is half-finished. But LaDuke says a spill would be devastating.
Enbridge’s Line 3 oil pipeline enters critical month in June (AP) – June will be a critical month for Enbridge Energy’s Line 3 crude oil pipeline as the company resumes construction and opponents mobilize for large-scale protests and civil disobedience. One prominent opponent, Winona LaDuke, founder of the Indigenous-based environmental group Honor the Earth, said she expects thousands of people from across the state and country to join the protests along the route in northern Minnesota. Both sides are also waiting for a major ruling from the Minnesota Court of Appeals in June on a legal challenge by environmental and tribal groups that are seeking to overturn state regulators’ approval of the project. The opponents also hold out hope that Democratic Gov. Tim Walz and President Joe Biden will intervene. “I expect that unless Walz stops the project over 1,000 people are going to get arrested,” LaDuke said. Line 3 carries Canadian crude from Alberta. It clips a corner of North Dakota on its way across northern Minnesota to Enbridge’s terminal in Superior, Wisconsin. Enbridge says the 1960s-era pipeline is deteriorating and can run at only about half its original capacity. It says the new line, made from stronger steel, will better protect the environment while restoring its capacity and ensuring reliable deliveries to U.S. refineries. The Canadian and Wisconsin replacement segments are already carrying oil. The Minnesota segment is about 60% complete as a planned construction pause for the spring thaw ends June 1. Enbridge plans to finish the work and put the line into service in the fourth quarter, said Mike Fernandez, the Calgary-based company’s chief communications officer. That adds to the urgency for opponents, who are organizing a “Treaty People Gathering” for June 5-8 and preparing for mass arrests. More than 250 “water protectors” already have been arrested since major construction began in December. The opposition says the replacement pipeline, which would carry Canadian tar sands oil and regular crude, would aggravate climate change and risk spills in sensitive areas where Native Americans harvest wild rice, hunt, fish, gather medicinal plants and claim treaty rights.