Preview Newsletter
AM ACC 5/3/2016
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President Obama: The TPP Would Let America, Not China, Lead the Way on Global Trade
May 3, 2016 | Washington Post
By President Barack Obama
Over the past six years, America’s businesses have created more than 14 million new jobs. To keep this progress going, we need to pursue every avenue of economic growth. Today, some of our greatest economic opportunities abroad are in the Asia-Pacific region... -
(ACC Mentioned) Will Congress Protect Americans From Untested Chemicals?
May 2, 2016 | Environmental Working Group
By Melanie Benesh
Most people think that manufacturers must prove chemicals safe before they put them on the market. They’re wrong. Instead, federal law presumes that most chemicals are safe until proven toxic. -
EPA Expands Regions' Chemical Management Role
May 3, 2016 | BNA Daily Environment Report
By Pat Rizzuto
The Environmental Protection Agency is directing its regional offices to actively manage chemicals more than they traditionally have done. -
Doubling Down On CCS, EPA Denies Five NSPS Reconsideration Petitions
May 2, 2016 | InsideEPA
By Dawn Reeves
EPA is doubling down on its determination that new coal plants can install partial carbon capture and sequestration (CCS) technology in its rule to limit greenhouse gas emissions at new and modified power plants, denying five state and industry petitions -
G-7 to Support Energy Investments Amid Oil Crash
May 3, 2016 | BNA Daily Environment Report
By Stephen Stapczynski and Emi Urabe
The Group of Seven countries will promote investing in energy projects through the oil price crash to ensure a steady stream of supply, ministers from the member countries said May 2. -
Utility Grab for Gas in Ground Hits Resistance by Regulators
May 3, 2016 | BNA Daily Environment Report
By Jim Polson
Utility owners seeking to buy natural gas fields while prices are cheap are having a tough time winning over state officials who worry that customers will pay the price if the bets go wrong. -
Colorado Court Strikes Down Local Bans on Fracking
May 3, 2016 | New York Times
By Michael Wines
Colorado’s Supreme Court on Monday struck down local government prohibitions on hydraulic fracturing, or fracking, handing oil and gas companies a victory in a lengthy battle over energy production in the environmentally conscious state. -
Why Methane Is Having a Moment
Apr 29, 2016 | New Republic (In Real Clear Energy)
By Emma Foehringer Merchant
Methane, carbon dioxide’s lesser-known cousin, is a big and growing problem for the planet. The chief component of natural gas, methane is also emitted during oil drilling. While it only accounts for 11 percent of greenhouse gas emissions in the U.S., this chemical packs a potent dose... -
An $840 Billion Decline In Oil And Gas Reserves
Apr 29, 2016 | Forbes (In Real Clear Energy)
By Robert Rapier
During the last week of 2015, I wrote Prepare For A Dramatic Decline In Oil Reserves. In that article I explained that as 2015 annual reports were issued for oil and gas companies, there would be a big decline in reported oil reserves. The reason for this isn’t that the oil is no longer there... -
POLITICO Pro Q&A: Alberta Premier Rachel Notley
May 3, 2016 | PoliticoPro
By Elana Schor
One year ago this week, Rachel Notley's New Democratic Party unseated Canada's Conservative Party to take over leadership of Alberta, the fuel-rich province that's home to the world's third-largest proven oil reserves. -
Marcellus/Utica-to-Power Plant Pipe Project in PA Gets FERC Nod
May 2, 2016 | Natural Gas Intelligence
By Jeremiah Shelor
The Sunbury Pipeline Project, designed to deliver 200,000 Dth/d to a new natural gas-fired power plant and to local distribution markets in Central Pennsylvania, received the green light from FERC Friday to move forward with construction. -
Researchers Aim to Put Carbon Dioxide Back to Work
May 2, 2016 | New York Times
By Henry Fountain
Think, for a moment, of carbon dioxide as garbage, a waste product from burning fossil fuels. Like other garbage, almost all of that CO2 is thrown away — into the atmosphere, where it contributes toclimate change. A small amount is captured and stored underground to keep it out of the air. -
The Environmental Toll of Storing Fossil Fuels
May 3, 2016 | The Hill - Contributors Blog
By Daniel Cohan
As energy prices have swooned, inventories of all fossil fuels have grown to unusually high levels.Coal stockpiles have mounted, crude oil storage has filled and natural gas stocks remain unusually large for the spring season. -
In Aftermath of Derailment, D.C. Officials Turn Focus to CSX and Its Cargo
May 3, 2016 | Washington Post
By Luz Lazo and Faiz Siddiqui
A day after a CSX train derailed in Northeast Washington, leaking hazardous substances along a busy rail corridor, local officials and activists turned their attention to the transportation company responsible, while emergency personnel continued to work clearing the wreckage. -
CSX Will Clear Track of Derailed Train by Tuesday Night, Norton Says
May 2, 2016 | Washington Times
By Ryan M. McDermott
MARC train commuters on the Brunswick line will experience major service delays Tuesday, as railroad crews clear the aftermath of Sunday’sCSX freight train derailment in Northeast Washington. -
Texas Eastern Explosion Knocks Out 1 Bcf/d of NatGas Shipments
May 2, 2016 | Natural Gas Intelligence
By Jamison Cocklin
The explosion that rocked the Texas Eastern (Tetco) pipeline in Southwest Pennsylvania on Friday has cut about 1 Bcf/d of natural gas flows on the system, according to Genscape. -
2008 Ozone Levels Met for Six Areas After Extension
May 3, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
Six areas will be able to demonstrate attainment with the 2008 ozone standards after receiving a one-year compliance extension from the Environmental Protection Agency, state and local air quality officials told Bloomberg BNA. -
Leaked Documents Fan Enviros' Fears over E.U. Talks
May 2, 2016 | E&E News PM
By Geof Koss
Environmental groups on both sides of the Atlantic are raising concerns over leaked documents detailing trade negotiations between the United States and European Union that they say would undercut efforts to curb climate change. -
Resettling the First American ‘Climate Refugees’
May 3, 2016 | New York Times
By Coral Davenport and Campbell Robertson
Each morning at 3:30, when Joann Bourg leaves the mildewed and rusted house that her parents built on her grandfather’s property, she worries that the bridge connecting this spit of waterlogged land to Louisiana’s terra firma will again be flooded...
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President Obama: The TPP Would Let America, Not China, Lead the Way on Global Trade
May 3, 2016 | Washington Post
By President Barack Obama
Over the past six years, America’s businesses have created more than 14 million new jobs. To keep this progress going, we need to pursue every avenue of economic growth. Today, some of our greatest economic opportunities abroad are in the Asia-Pacific region, which is on its way to becoming the most populous and lucrative market on the planet. Increasing trade in this area of the world would be a boon to American businesses and American workers, and it would give us a leg up on our economic competitors, including one we hear a lot about on the campaign trail these days: China.
Of course, China’s greatest economic opportunities also lie in its own neighborhood, which is why China is not wasting any time. As we speak, China is negotiating a trade deal that would carve up some of the fastest-growing markets in the world at our expense, putting American jobs, businesses and goods at risk.
This past week, China and 15 other nations met in Australia with a goal of getting their deal, the Regional Comprehensive Economic Partnership, done before the end of this year. That trade deal won’t prevent unfair competition among government-subsidized, state-owned enterprises. It won’t protect a free and open Internet. Nor will it respect intellectual property rights in a way that ensures America’s creators, artists, filmmakers and entrepreneurs get their due. And it certainly won’t enforce high standards for our workers and our environment.
Fortunately, America has a plan of our own that meets each of these goals. As a Pacific power, the United States has pushed to develop a high-standard Trans- Pacific Partnership, a trade deal that puts American workers first and makes sure we write the rules of the road for trade in the 21st century.
This agreement strengthens America’s economy. The TPP brings together 12 countries representing nearly 40 percent of the global economy to make sure that private firms have a fair shot at competing against state-owned enterprises. It keeps the Internet open and free. It strengthens the intellectual property protections our innovators need to take risks and create. And it levels the playing field by setting the highest enforceable standards and by removing barriers to selling our goods overseas — including the elimination of more than 18,000 taxes that other countries put on products made in America. Simply put, once the TPP is in place, American businesses will export more of what they make. And that means supporting more higher-paying jobs.
This agreement also strengthens America’s national security. When fewer people suffer in poverty, when our trading partners flourish and when we bind our economy closer to others in a strategically important region, America is both stronger and safer.
But none of this will happen if the TPP doesn’t become a reality. That’s because the Asia-Pacific region will continue its economic integration, with or without the United States. We can lead that process, or we can sit on the sidelines and watch prosperity pass us by.
If we don’t get the TPP done, American goods will continue to face high tariffs and other trade barriers in the region. American businesses will lose competitive access to Asian markets, which would mean fewer of the cars our autoworkers manufacture would make it to growing markets, more of our farmers’ and ranchers’ products would run into barriers abroad, and small-business owners hoping to sell their goods abroad would still find themselves ensnared in red tape. If we don’t get the TPP done, employers across America will lose the chance to compete with other countries’ companies on a level playing field. And when American workers and businesses compete on a level playing field, no one can beat us.
I understand the skepticism people have about trade agreements, particularly in communities where the effects of automation and globalization have hit workers and families the hardest. But building walls to isolate ourselves from the global economy would only isolate us from the incredible opportunities it provides. Instead, America should write the rules. America should call the shots. Other countries should play by the rules that America and our partners set, and not the other way around.
That’s what the TPP gives us the power to do. That’s why my administration is working closely with leaders in Congress to secure bipartisan approval for our trade agreement, mindful that the longer we wait, the harder it will be to pass the TPP. The world has changed. The rules are changing with it. The United States, not countries like China, should write them. Let’s seize this opportunity, pass the Trans-Pacific Partnership and make sure America isn’t holding the bag, but holding the pen.
https://www.washingtonpost.com/opinions/president-obama-the-tpp-would-let-america-not-china-lead-the-way-on-global-trade/2016/05/02/680540e4-0fd0-11e6-93ae-50921721165d_story.html
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(ACC Mentioned) Will Congress Protect Americans From Untested Chemicals?
May 2, 2016 | Environmental Working Group
By Melanie Benesh
Most people think that manufacturers must prove chemicals safe before they put them on the market.
They’re wrong.
Instead, federal law presumes that most chemicals are safe until proven toxic.
The Toxic Substances Control Act of 1976, which governs chemical safety, says that when a chemical maker creates a new substance, it needs only to notify the Environmental Protection Agency. The law gives the EPA just 90 days to figure out if the new chemical poses any risks and if the agency should try to restrict it. If the EPA doesn’t take action during that 90-day window, it gives the chemical a green light by default.
Most of the time, the EPA has to make its decision based on little, if any, information.
The EPA cannot require chemical manufacturers to conduct even basic health and safety testing before the company tells EPA a new chemical is heading for market. If the company tested its new chemical for safety, it must provide those test results to the EPA. But if the company didn’t do any testing, it isn’t obliged to submit any data to the government. A 2010 study conducted by EPA Office of the Inspector General determined that in half the new chemical submissions, the makers gave the EPA no test data whatsoever and 85 percent contained no data on the chemical’s potential toxicity.
The EPA can ask for more information, but it’s nearly impossible to get.
EPA officials must show that the new substance poses an “unreasonable risk” before they can ask for more data on its potential health hazards. Without enough information to begin with, EPA officials are rarely able to mount a credible argument for more data. The law puts them in a Catch-22 situation.
Once a chemical is on the market, EPA regulators can remove or restrict it only after scientists prove the substance to be toxic to people or the environment. The process set up by the Toxic Substances Control Act is so complicated that EPA officials have attempted to ban only a handful of truly menacing chemicals over the 40 years the law has been on the books.
Even chemical industry leaders agree that the regulatory system that has flowed from the Toxic Substances Control Act is broken and that manufacturers should prove their chemicals are safe before putting them on the market. Cal Dooley, president and chief executive officer of the American Chemistry Council, the industry’s leading trade association, testified before the House Energy and Commerce Committee in 2013:
We recognize that it is important, even with the new chemicals, that you do have provisions that do allow for EPA to make an affirmative determination that the new chemical will likely meet the safety standard, and that we accept that it is an obligation upon the industry and the manufacturer to provide that information to allow them to make that determination.
A bill aiming to revise the Toxic Substances Control Act passed the Senate last year that could change the current system for the better. The system that would be created by this bill would require the EPA to determine explicitly that a new chemical was likely to meet a safety threshold before it could go on the market. If the chemical likely did not meet that threshold, or if the EPA needed more information, its manufacturer could not sell it until shown to likely meet the safety threshold. The legislation would get rid of the Catch-22 problem so that EPA officials could get the data they need to make an informed decision. The critical factor to watch will be the EPA’s definition of the safety threshold. If sufficiently rigorous, the EPA could be able to do much more to protect the public from potentially hazardous substances.
The House of Representatives also passed a chemical bill to update the Toxic Substances Control Act last year, but its version would largely not change the way the federal government treats new chemicals.
Congressional leaders are attempting reconcile the Senate and House versions of the chemical legislation. They have said they hope to come up with a final bill later this year. Many issues need to be addressed through this reconciliation process, but a crucial one is preventing potentially hazardous new chemicals from going on the market.
Otherwise, we may be stuck with the weak safe until proven toxic standard under current law for another 40 years.
http://www.ewg.org/enviroblog/2016/05/will-congress-protect-americans-untested-chemicals
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EPA Expands Regions' Chemical Management Role
May 3, 2016 | BNA Daily Environment Report
By Pat Rizzuto
The Environmental Protection Agency is directing its regional offices to actively manage chemicals more than they traditionally have done.
“The new regional role is a significant change as the regions did not previously have much of a role in the Toxic Substances Control Act other than things like new chemicals enforcement and management of lead and PCBs,” said Charles Auer, a consultant with Charles Auer & Associates LLC who directed the EPA's chemicals office for much of his 32-year career at the agency.
The EPA posted on April 29 an addendum revising National Program Manager guidance issued in 2015. The addendum guides managers as to what chemical and related issues they should focus on for the rest of this fiscal year, which ends Sept. 30., and in FY 2017.
Regions are to let public health, local officials and other interested parties know the results of risk assessments the agency's Office of Pollution Prevention and Toxics completes.
Regions also are to work with states, tribes and regulated entities to manage high-priority chemicals such as those regulated through significant new use rules, or SNURs, or final rules the agency anticipates issuing using the authorities TSCA provides in Section 6, the EPA said.
Section 6 provides the EPA authority to ban, restrict, require labeling for and otherwise manage chemicals in commerce.
Increased Staffing; Possible Revisions to TSCA
The president's FY 2017 budget requested funding to allow each region to hire one full-time equivalent (FTE) employee for chemical risk review and reduction work, the amended guidance said.
If Congress approves the requested budget, the additional staff would expand the three FTE employees headquarters already provided regions this year by reprogramming funds, the agency said.
The larger staff would “start to close a critical gap in the agency's program implementation framework,” the EPA's amended guidance said.
“The TSCA new and existing chemical programs are the only major regulatory programs administered by EPA that are not currently supported by the regional offices (except with regards to regulatory enforcement).”
“As Congress continues to consider legislative proposals for TSCA reform, the EPA will continue to work vigorously under current authorities to ensure chemical safety,” the addendum said.
Tracking Regions Work
Regional offices must let headquarters know about their chemical risk-reduction activities this year, the amended guidance said. The guidance the EPA published in 2015 allowed such work to be optional.
“As the role of the regional offices expands and develops, additional metrics may be developed to specifically measure the impact of regional office involvement in the risk management process,” the addendum said.
“The increased FTE allocation for each region for traditional chemicals activities (as opposed to e.g. PCBs related work) signals an important shift in the future priority and attention to chemicals activities,” Auer told Bloomberg BNA by e-mail.
“It is interesting that the guidance specifically mentions implementation of ‘major TSCA rulemakings' which seemingly goes beyond mere enforcement and may recognize a regional role in actual implementation,” he said.
Lynn Bergeson, managing partner of Bergeson & Campbell PC, told Bloomberg BNA by e-mail that the EPA's reference to a revised TSCA underscores the agency's desire for enhanced resources for work it would have to undertake should the law be amended.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=88850593&vname=dennotallissues&fn=88850593&jd=88850593
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Doubling Down On CCS, EPA Denies Five NSPS Reconsideration Petitions
May 2, 2016 | InsideEPA
By Dawn Reeves
EPA is doubling down on its determination that new coal plants can install partial carbon capture and sequestration (CCS) technology in its rule to limit greenhouse gas emissions at new and modified power plants, denying five state and industry petitions for reconsideration of the issue and including strong language on the viability of CCS.
“Carbon capture and sequestration is a proven technology, with a history of reliable use at coal-fired power plants and other industrial sources,” EPA says in a document slated to be referenced in the Federal Registeralongside its April 29 denial of several petitions to reconsider its new source performance standards (NSPS) rule.
“At the level of capture on which the standard of performance is predicated, partial capture and sequestration is available at reasonable cost,” the document says.
The agency adds that the NSPS “will not be an impediment to construction of new coal-burning capacity” and that CCS “could prove a lifeline to the industry” by allowing construction of new coal units. The rule “sends a strong signal that low-emitting coal-burning capacity is feasible, and that coal can thereby have an important place in a lower-carbon energy future,”
EPA Administrator Gina McCarthy April 29 signed a notice slated to be published in the Register that notes the agency has denied five of six petitions it received to reconsider aspects of the final NSPS. EPA is however deferring action on a sixth petition that raises issues over biogenic carbon dioxide.
EPA is “denying five of these petitions, and deferring action on the issue of treatment of biomass raised in the petitions of both the Biogenic CO2 Coalition and the state of Wisconsin,” the notice says.
The agency's denial of the administrative petitions to reconsider aspects of its NSPS means the parties may now bring those claims in federal appellate court.
If the petitioners opt to bring these claims to court, they will likely be added to an already-docketed case, North Dakota, et al. v. EPA, in the U.S. Court of Appeals for the District of Columbia Circuit. Briefing is slated to begin in mid-July.
EPA's rule, developed under section 111(b) of the Clean Air Act, has long been controversial given the agency's determination that new coal units must meet a standard that requires partial capture of CO2. Critics have long charged the the rule is unlawful because the technology is not “adequately demonstrated” as the air act requires.
But the agency's forthcoming document explaining the basis of the agency's denials offers a strong endorsement of its conclusion that “partial” CCS, a control technology that would capture about 30 percent of a plant's emissions, is the best system of emission reduction (BSER) for a coal plant, meaning it is adequately demonstrated and commercially available.
Boundary Dam
For example, EPA says that one of the petitions, from the Utility Air Regulatory Group (UARG),”maintains that the post-promulgation performance of carbon capture technology in actual operation at the Canadian SaskPower Boundary Dam Unit 3 facility shows that carbon capture is not yet adequately demonstrated at commercial scale” after the plant was retrofitted with CCS.
But “EPA is denying reconsideration on this issue because, contrary to the petitioner's contention, the facility's performance, through March 2016, corroborates the EPA's conclusion in the rulemaking that partial CCS is an adequately demonstrated technology within the meaning of [Clean Air Act] section 111(b).”
EPA says in response to UARG's petition that Boundary Dam, despite some initial expected issues in the first year of operation, “has demonstrated high rates of CO2 capture since its initial coming on-line” including in January capturing 85,000 tons, which is “slightly better than 100 percent of design capacity; and an amount that exceeds the monthly quantity” contracted to provide for enhanced oil recovery operations.
The petition suggests that the plant's failure to operate at a 90 percent capture rate day-to-day shows the technology is not operating reliably. But “EPA disagrees. The plant has, in fact, achieved 90 percent capture when doing nameplate testing (i.e., pushing the technology to its design limit) and has operated at capture rates exceeding even its 90 percent design level, but the more important point is that the plant has operated and is operating reliably. . . .
“It is meeting the Canadian CO2 emission standards (which are more stringent than the NSPS at issue here),” EPA says. “The EPA thus believes that Boundary Dam's performance corroborates rather than undermines a finding that partial CCS is an adequately demonstrated technology.”
UARG and other petitioners that address the partial CCS standard -- which include American Electric Power (AEP), Ameren, Wisconsin and the Energy & Environment Legal Institute (EELI) -- “simply reiterate issues already raised in their rulemaking comments. The EPA has already addressed these comments in the preamble to the final rule and in the Response to Comment document. These petitions are untimely and the EPA is therefore denying them.”
EPA also rejects AEP's petition, which it says objected to the agency's “characterization of its experience in retrofitting one of its plants, the Mountaineer Plant (New Haven, WV), with partial CCS in a demonstration project.” The company said that EPA viewed the project as providing support for partial CCS but AEP says the project “did not demonstrate that partial CCS is BSER.”
In its document, EPA says that it “reasonably characterized the performance of the Mountaineer project,” which it says “does provide strong support for the technical feasibility of partial CCS, including at commercial scale. . . . Consequently, in addition to being untimely, AEP's objection is not of central relevance to the outcome of the rulemaking and the EPA is therefore denying the petition to reconsider.”
The agency similarly disposes of Ameren's and Wisconsin's non-biomass related petitions.
And the agency also denied the EELI petition, which alleged procedural wrongdoing because a former EPA employee had consulted privately with environmentalists on the rule.
But EPA calls it “premised entirely on undocketed email communications between a single former EPA official and various members of non-governmental organizations. . . . This petition is significantly incorrect as a matter of both law and fact” because the concept of ex parte communication does not apply to informal rulemakings at the pre-proposal stage.
The agency adds: “The further suggestion that the EPA's decision is the product of impermissible bias is untenable. . . . At most, the Petition shows that one EPA official, who was not in the lead office developing the rulemaking, sought out pre-proposal comment on regulatory alternatives that the agency never pursued.”
The remaining petition, by EELI, alleges that “the rulemaking process was tainted by impermissible communications involving an EPA official and various members of non-governmental organizations. This petition's legal theory is flawed, and the petition rests on a plethora of inaccurate factual assertions.”
Biomass Emissions
While the agency denied five of the petitions, EPA deferred a decision on the biomass-related petitions “pending further ongoing consideration of the underlying issue of whether and how to account for biomass, for purposes of compliance with applicable standards, when co-firing with fossil fuels.”
EPA has long been conflicted on how to address biomass GHGs at the smokestack, and has been under heavy industry and congressional pressure to declare the fuel carbon neutral. But it is also facing stiff pressure from environmentalists and scientists to ensure that biomass regrows within a policy's timescale.
The agency has put forward two draft biomass accounting frameworks for review by its Science Advisory Board (SAB), which decided last month to require a panel to redo some of its work, including on the timescale issue.
The panel's designated official tells Inside EPA May 2 that there is not yet any information about when the panel -- which has been working on the issue for five years -- will reconvene.
http://insideepa.com/daily-news/doubling-down-ccs-epa-denies-five-nsps-reconsideration-petitions
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G-7 to Support Energy Investments Amid Oil Crash
May 3, 2016 | BNA Daily Environment Report
By Stephen Stapczynski and Emi Urabe
The Group of Seven countries will promote investing in energy projects through the oil price crash to ensure a steady stream of supply, ministers from the member countries said May 2.
The nations will also encourage financial institutions to invest in energy projects and infrastructure, according to a statement provided by the Japanese government. Investments in oil and gas production are forecast to fall 18 percent this year after dropping 24 percent in 2015, Fatih Birol, executive director of the International Energy Agency, said in a presentation during the ministers’ meeting that started May 1 in Kitakyushu, Japan.
“We have an obligation to look at the longer term,” James Carr, Canada's natural resources minister, said. “We all are feeling pressures at the moment because of low commodity prices. But so are we preparing for 15, 20 and 50 years from now. And there is a consensus among my colleagues that that is a very important focus.’’
The ministers also agreed to support changes to the liquefied natural gas industry—including long-term contracts with looser destination restrictions and prices linked to spot deals rather than oil—to foster a more robust and transparent market. The countries will also promote the development of natural gas infrastructure, such as pipelines and storage tanks. The IEA will begin publishing a regular report on the natural gas market, according to the statement, without providing further details.
The group, which includes Japan, the U.S. and Germany, said it would support Ukraine with energy supplies and develop policies to enhance cyber-security for electrical distribution networks. The nations will also promote investment in energy efficiency and deployment of green-energy technology.
“There is concern among member nations about how to secure a stable power supply and have a minimal impact on the environment,” said Shinichi Kihara, director of the international affairs division at Japan's Ministry of Economy, Trade and Industry. However, there was a greater focus on security of supply than whether certain fuels are good or bad for the environment, he said.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=88850583&vname=dennotallissues&fn=88850583&jd=88850583
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Utility Grab for Gas in Ground Hits Resistance by Regulators
May 3, 2016 | BNA Daily Environment Report
By Jim Polson
Utility owners seeking to buy natural gas fields while prices are cheap are having a tough time winning over state officials who worry that customers will pay the price if the bets go wrong.
Black Hills Corp. lost a bid in Colorado to buy gas reserves and faces opposition in Nebraska from the state's utility watchdog at hearings that began May 2. Virginia rejected a similar proposal by WGL Holdings Inc. in November. Iowa's consumer advocate said its unclear if buying gas in the ground will benefit customers. Hearings there are scheduled for June.
Black Hills is the most aggressive utility owner to argue that buying reserves at depressed prices would be a boon for customers once energy demand lifts and prices for the heating and power plant rebound. Even with gas hovering near 17-year lows, consumer watchdogs say the strategy shifts the risk of higher production costs in the future to ratepayers.
“In the grand scheme of things, it's a great idea,” Christopher Ellinghaus, a New York-based analyst for Williams Capital Group, said by phone April 28. “It's kind of a tough sell at the moment.”
WGL Holdings plans to file a new request in Virginia that would allow it to spend about $100 million on gas reserves, President Adrian Chapman told investors on a March 15 call. Florida regulators in June allowed NextEra Energy Inc.’s utility to invest as much as $500 million a year in gas production after authorizing an investment of $47.7 million in Oklahoma drilling in 2014.
Colorado rejected Rapid City, S.D.’s plan without a hearing. The company hopes for better in Nebraska, said Kyle White, Black Hills vice president for regulatory affairs. It also has requests pending in Iowa, Kansas, Wyoming and South Dakota.
Distressed Markets
“Now is a very good time to acquire natural gas reserves and provide long-term price stability at affordable prices for our customers,” said White. “We have a distressed oil and gas market right now.”
Allowing a utility to buy gas assets “unduly shifts risk to ratepayers that traditionally and naturally should be borne by the company,” Michael McGarry, an outside consultant for the Nebraska Public Advocate, said in testimony filed Feb. 16.
Beth Ackland, director of retail gas services for the Public Alliance for Community Energy, which buys the fuel for 72 municipalities and a public power district, said a long-term agreement by Black Hills utility SourceGas to buy gas has cost Nebraska customers more than $90 million over the market price, according to written testimony.
Hedging Losses
Their skepticism is shared by Ken Costello, principal researcher at the National Regulatory Research Institute in Silver Spring, Md. Assuming that a given gas field can produce for years at a known cost is “highly speculative,” he wrote in a February paper.
“We have seen large losses in recent years from short-term hedging by both electric and gas utilities,” Costello wrote. “Multi-decade hedging would seem to pose yet higher risk to utility customers.”
Natural gas futures have averaged less than $2 British thermal units this year on the New York Mercantile Exchange and touched $1.611 in March, the lowest since 1998, according to data compiled by Bloomberg. The market is pricing 2018 natural gas at about $3 per million British thermal units, according to a proprietary Bloomberg model. That is below the average for the past five years.
“If the commission thought that gas was going to $7 in the next two years,” regulators would be more open to asset purchases, Ellinghaus said. “I don't think there's anybody counting on $7 gas in the next two years.”
Utilities may prevail by proposing trial programs, Ellinghaus said. Oregon regulators in September agreed to let Northwestern Natural Gas Co. bill customers about 4.7 cents per million British thermal units for production from seven wells.
“There will be others that take up this concept,” Ellinghaus said. “I would be surprised if 10 years from now 30 percent of utilities don't have a cost-of-service gas program.”
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=88850615&vname=dennotallissues&fn=88850615&jd=88850615
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Colorado Court Strikes Down Local Bans on Fracking
May 3, 2016 | New York Times
By Michael Wines
Colorado’s Supreme Court on Monday struck down local government prohibitions on hydraulic fracturing, or fracking, handing oil and gas companies a victory in a lengthy battle over energy production in the environmentally conscious state.
In separate rulings, the court said a moratorium in Fort Collins and a ban inLongmont were invalid because state law pre-empted them. A lower court had reached the same conclusion earlier.
Two other cities and Boulder County have prohibitions on fracking that presumably are affected by the decisions. With oil and gas exploration in a slump nationwide, the short-term effect of the rulings in Colorado will be small, industry officials said.
But when the slump ends, activity in urban areas across the Front Range — the eastern foothills of the Rocky Mountains and Colorado’s most populous region, where oil and gas production is concentrated — could be significant.
The land opened to exploration by Monday’s rulings is comparatively small. More significant, said experts on both sides of the conflict, is that the rulings shut down future efforts to stop fracking in local jurisdictions.
Officials of the Colorado Oil and Gas Association said the decisions go beyond prohibitions on oil and gas operations, preventing localities from imposing any rules on those operations that conflict with state laws and regulations.
Colorado’s regulation of oil and gas production is the most stringent in the nation, said Dan Haley, the association’s president. “This continues to protect citizens and continues to protect the water and air in Colorado, but allows our operators to develop natural resources that have been off-limits for a number of years.”
Officials in Fort Collins and Longmont said they were disappointed by the rulings. Environmental groups said the rulings would give new momentum to efforts to force a statewide referendum.
The Supreme Court has approved signature-collecting efforts for three fracking-related ballot initiatives; the two most significant would effectively reinstate local control over fracking and other activities, and outlaw fracking within 2,500 feet of occupied buildings, waterways and public open spaces.
Supporters must gather nearly 100,000 signatures by August for each of the initiatives to place them on the November ballot. “I think this is definitely going to add fuel to the fire for folks to get out there and help get these initiatives passed,” said Lauren Petrie, a senior organizer at Food and Water Watch in Colorado, an opponent of fracking.
Spurred by the rise of hydraulic fracturing, Colorado has become one of the nation’s largest producers of oil and gas. The state has more than 50,000 active oil and gas wells.
Environmental advocates say that the Front Range oil and gas boom has contributed significantly to an ozone haze that sometimes blankets the area, and that a coming report will show that well leaks of methane, a greenhouse gas, are common. They also argue that the chemicals used in fracking can leach into water and pose significant health hazards.
Mr. Haley, of the oil and gas association, said Colorado’s strict rules have led to a reduction in pollution from wells even as oil and gas production rose in recent years.
Colorado is one of several states where the oil and gas industry has faced citizen-led efforts to ban fracking. New York has banned fracking statewide, and Pennsylvania has granted local government authority over hydraulic fracturing. The Texas Legislature responded last year to one city’s ban on fracking with a law that pre-empts local control over a broad range of drilling activities.
Gov. Jerry Brown of California came out against a fracking ban last year, but advocacy groups are waging a statewide campaign to place a ban on the ballot.
“It’s 2 to 2, and California’s still in play,” said Bruce Baizel, the energy program director for Earthworks, an environmental advocacy group that focuses on mining and energy exploration.
http://www.nytimes.com/2016/05/03/us/colorado-court-strikes-down-local-bans-on-fracking.html?_r=0
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Why Methane Is Having a Moment
Apr 29, 2016 | New Republic (In Real Clear Energy)
By Emma Foehringer Merchant
Methane, carbon dioxide’s lesser-known cousin, is a big and growing problem for the planet. The chief component of natural gas, methane is also emitted during oil drilling. While it only accounts for 11 percent of greenhouse gas emissions in the U.S., this chemical packs a potent dose of warming, 84 times more effective than CO2 at absorbing heat. Methane breaks down more quickly and poses fewer direct risks to human health. But it’s already contributed to more than 30 percent of the climate change the planet has experienced.
You wouldn’t have known any of this from the relative lack of attention paid to methane in efforts to combat climate change—until just recently. In March, President Obama and Canadian Prime Minister Justin Trudeau announced that the two countries would team up to slash methane emissions by 40 to 45 percent by 2025 and to regulate emissions from existing oil and gas operations, which account for a large majority of methane leaks. In April, Gina McCarthy, the EPA’s chief administrator, named tackling methane emissions as a top priority for the agency in 2016. And in coming weeks—if not days—the EPA will present its finalized regulations to control emissions from new oil and gas wells.
The agency has only just begun to grapple with regulating the oil and gas infrastructure that already exists (and is projected to account for 90 percent of projected methane emissions in 2018). But the rules for new operations will represent a crucial step forward. Though oil and gas drilling and exploration release the majority of methane pollution in this country, until recently federal methane regulation had mostly been either voluntary or tied to other air standards.
Because of the chemical’s capacity for warming, the EPA’s restrictions on new and existing methane sources in the oil and gas industry could be the most consequential move to slow climate change that we’ll see over the next several years. And the rules come at a propitious time politically, several months after a ruptured natural gas well at Aliso Canyon, in the Porter Ranch section of Los Angeles, caused the largest methane leak in U.S. history. The incident has set off public alarms about the dangers of methane. But even before the leak, nearly 70 percent of registered voters said they favored the EPA’s proposed methane rules. If there is one thing Americans can agree on in a fractious election year, combatting methane, it seems, is it.
The majority of methane emissions comes from the industry that produces what is now America’s largest power source: natural gas. In 2014, natural gas systems released 176 million metric tons of methane, nearly a quarter of total emissions. The second largest source was cattle digestion, which accounted for 22.5 percent of emissions. (Petroleum systems contributed 9.3 percent.)
Energy experts, energy companies, and even some environmentalists tout natural gas as an essential fuel to combat climate change—as a way to bridge the energy gap during a transition from reliance on coal to renewable sources. But many environmentalists say methane’s extreme warming potential undermines any of natural gas’s benefits. “The promise of natural gas as a lower carbon alternative to coal depends fundamentally on addressing methane emissions,” says Matt Watson of the Environmental Defense Fund’s Climate and Energy Program. “Methane emissions undermine the climate advantage that natural gas can have over coal—that’s just a basic fact.”
Each year the oil and gas industry loses nearly 10 million metric tons of methane during production, processing, and transport. That leakage makes natural gas an environmental “wild card” with hard-to-control emissions, even as the U.S. Energy Information Administration forecasts energy generation from natural gas to swell to31 percent by 2040. “What we’ve learned from the science over the past several years is: Reducing methane is the most impactful, immediate thing we can do to slow the rate of warming,” said the EDF’s Mark Brownstein at an April 27 “conversation” on methane hosted in Washington by Bloomberg Government. “The opportunity is enormous.”
But, in a narrative that so often repeats itself when it comes to climate, effectively seizing that opportunity will depend on alliances among often-unfriendly groups: government, industry, and environmental activists.
The oil and gas industry worries, not surprisingly, about new methane regulations hurting profits and productivity. And it’s already feeling prickly about the environmental outcry against fracking for natural gas—the exposés, the documentaries, the protests. “When any industry … has the kind of attacks this industry had, starting out with the flaming faucets, induced seismicity—a lot of things they feel are attacking their right to exist,” Mark Boling of Southwest Energy, an oil and gas company based in Houston, said at the methane forum in Washington, “that defensive posture modifies itself into a hesitancy to acknowledge legitimate risk.”
Meanwhile, so-called “fractivists” continue lobbying state and federal actors to tighten regulations or issue moratoriums; they’ve won impressive victories in states like New York, which has banned fracking altogether. Those who see fracking as an ominous practice, one with environmental consequences and dangers that go beyond methane emissions, won’t stop organizing or slow their criticisms because of new regulations on methane emissions.
But industry and government collaboration is budding. On March 30, the EPA announced a voluntary initiative that sets up a five-year time frame for companies to “make and track ambitious commitments to reduce methane emissions.” Among the founding members of this Methane Challenge Program were the country’s largest electric company, Duke Energy, and SoCal gas, the company in charge of the well that ruptured in Porter Ranch, California.
Why would energy companies—some of them, anyway—volunteer to cap methane emissions? It’s partly because capturing methane leaks could be shrewd business; the gas that is captured can be returned to the production process. Even so, just 41 companies have joined the effort thus far, likely because of fears about the costs of new monitoring and detection equipment.
For environmentalists like Watson, that level of industry participation is no surprise. He’s wary of the word “voluntary” altogether, Watson says, because it’s an inadequate substitute for stronger regulations—and because industry groups so often do not elect to participate when they don’t have to.
Because captured methane can go back into the production cycle, environmentalists and the EPA tout its conservation as cost-effective. But in what Brownstein calls a “reflexively anti-regulation” industry that’s already dealing with spiraling prices, the idea of cost savings isn’t universally accepted. The consulting firm ICF International finds that oil and gas companies could cut methane emissions by 40 percent by spending less than one cent per 1,000 cubic feet of natural gas. But according to Boling and others in the energy industry, the math is murkier, especially for small firms with lower outputs. “Right now, the equipment, the leak detection and monitoring equipment, is not cheap,” Boling said. “We have to work on cost, we have to work on reliability.”
But much of the technology needed to cut emissions already exists, and researchers continue to make strides in developing new and more reliable methods. A June 2015 working paper from the World Resources Institute, a research organization focused on natural resource management, recommended common-sense measures like annual maintenance along transmission lines to ensure equipment seals are solid. (Leakage from seals accounted for 19 percent of natural gas methane emissions in 2013.) Devices that regulate the temperature, pressure, and flow of natural gas account for nearly another one-third of methane emissions. To eliminate leakage there, WRI suggests companies invest in electric or compressed air-powered devices. If the EPA’s final rule on new sources looks similar to its proposed version, companies won’t have a choice: They’ll need to limit emissions from equipment as well as locate and repair leaks promptly.
As the country discovered during the Aliso Canyon leak, gas and oil producers can also use high-tech means to identify slip-ups quickly and limit the damage. At Aliso Canyon, scientists used infrared cameras to create a full picture of the extent of the leak; the spooky images of methane plumes, when they hit the internet, also served as a visual wake-up call to many members of the public. A study released this monthused infrared cameras to survey more than 8,000 wells in seven U.S. basins and found methane emissions at 494 wells, some of which were high-volume leaks.
Aliso Canyon showed that even a single leak can be catastrophic. But infrared monitoring—recommended, but not required, in the EPA’s proposed rules—can do a lot to help limit the damage. For now, infrared monitoring will be voluntary, leaving it up to oil and gas companies.
Stringent rules in some states—such as in Colorado or Wyoming—are picking up some of the slack where federal guidelines fall short. But if the EPA’s final rules for new gas and oil sources, and the agency’s forthcoming regulations on existing operations, bind companies to stringent standards and monitoring, the results would be monumental.
However successful we may be at sealing up methane emissions, environmentalists opposed to fracking for natural gas will still continue to fight the practice based on the other problems it creates: water contamination, for instance, along with the day-to-day pollution from heavy construction. Meanwhile, the oil and gas lobby will continue to balk reflexively at new regulations. But at long last, the need to stop methane pollution is being spotlighted and prioritized as essential to meeting the world’s short-term climate goals. Besides, as Watson says, “There’s not a lot in society these days that you can get 70 or 80 percent of Americans to agree on.”
https://newrepublic.com/article/133145/methane-moment
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An $840 Billion Decline In Oil And Gas Reserves
Apr 29, 2016 | Forbes (In Real Clear Energy)
By Robert Rapier
During the last week of 2015, I wrote Prepare For A Dramatic Decline In Oil Reserves. In that article I explained that as 2015 annual reports were issued for oil and gas companies, there would be a big decline in reported oil reserves. The reason for this isn’t that the oil is no longer there, but rather that it isn’t economical extract it at prevailing prices.
This caveat is important for understanding oil reserves. This past week articles began making the rounds that made certain conclusions from this paper — A global energy assessment — in which some subtleties about oil reserves have been lost. So let’s review.
An oil resource refers to the total amount of oil in place in particular area. Generally, most of a resource can’t be technically recovered, but the resource refers to the amount that could potentially be recovered. These estimates can go up and down, but the resource is what could be recovered at 100% recovery based on current estimates.
As an example, it is estimated that the Bakken Shale centered under North Dakota contains several hundred billion barrels (bbl) of oil (the resource). However, what is technically and economically recoverable in the Bakken has been estimated at less than 10 billion barrels (<10% of the resource).
The portion that is technically AND economically recoverable at prevailing oil prices may be classified as proved oil reserves. (The same concept applies for natural gas). This means that proved reserves are a function of prevailing oil prices. This qualifier is often misunderstood.
Oil pumping jacks and drilling pads at the Kern River Oil Field in California on July 28, 2015. The field is the fifth largest in the United States. MARK RALSTON/AFP/Getty Images
During the last week of 2015, I wrote Prepare For A Dramatic Decline In Oil Reserves. In that article I explained that as 2015 annual reports were issued for oil and gas companies, there would be a big decline in reported oil reserves. The reason for this isn’t that the oil is no longer there, but rather that it isn’t economical extract it at prevailing prices.
This caveat is important for understanding oil reserves. This past week articles began making the rounds that made certain conclusions from this paper — A global energy assessment — in which some subtleties about oil reserves have been lost. So let’s review.
An oil resource refers to the total amount of oil in place in particular area. Generally, most of a resource can’t be technically recovered, but the resource refers to the amount that could potentially be recovered. These estimates can go up and down, but the resource is what could be recovered at 100% recovery based on current estimates.
As an example, it is estimated that the Bakken Shale centered under North Dakota contains several hundred billion barrels (bbl) of oil (the resource). However, what is technically and economically recoverable in the Bakken has been estimated at less than 10 billion barrels (<10% of the resource).
The portion that is technically AND economically recoverable at prevailing oil prices may be classified as proved oil reserves. (The same concept applies for natural gas). This means that proved reserves are a function of prevailing oil prices. This qualifier is often misunderstood.Recommended by ForbesA Cellulosic Ethanol MilestoneFailure Of Oil Freeze Talks Represents A Buying OpportunityIBMVoice: Cognitive Analytics Is Helping To Reduce Roadway Fatalities In TennesseeDon't Blame Renewable Energy For Dying U.S. Coal IndustryBernie Sanders' Energy Policy: Import A Lot More OilMOST POPULARPhotos: The Most Expensive Home Listing in Every State 2016The Interview Question That Means 'I'm Planning To Hire You'MOST POPULARPhotos: The Cities With The Most BillionairesMOST POPULARWWE's Most Overpaid And Underpaid Superstars
It was estimated that when oil was $100/bbl, there was a total of 1.7 trillion barrels of proved reserves globally. The aforementioned article argues that this estimate may be overstated by about 875 billion barrels. It may very well be, but that doesn’t mean the oil isn’t there. It just means that at $40/bbl, there aren’t 1.7 trillion barrels that can be economically produced.
Each year, companies trading on U.S. exchanges must report the amount and estimated value of their oil and gas reserves. These estimates are done according to U.S. Securities and Exchange Commission (SEC) guidelines, and are provided in each company’s annual report.
The value of reserves is reported as a standard discounted cash flow (DCF), which is typically known as the standardized measure (SM). The SM is defined as the present value of the future cash flows from proved oil, natural gas liquids (NGLs), and natural gas reserves, minus development costs, income taxes and exploration costs, discounted at 10% annually.
Annual reports have now been filed, so the results are in. Of the 125 oil and gas companies in my database that reported proved reserves to the SEC, 92 reported declines in their proved oil reserves. The largest decline was reported by Royal Dutch Shell , which saw a decline of 827 million barrels in its proved oil reserves in 2015. Other large declines were recorded by Occidental (461 million barrels), Hess HES -1.07% (246 million barrels), Apache APA -0.29% (225 million barrels), and Anadarko (216 million barrels).
Cumulatively, these 92 oil companies reported a decline in reserves for 2015 of about 3 billion barrels (11 billion barrels of oil equivalent if natural gas proved reserves are included). That’s a big number, but it only becomes truly impressive when the value of these reserves is tabulated.
Keep in mind that the Standardized Measure is based on both the overall amount of proved reserves — which declined — and also the value of reserves that remain on the books. The decline in commodity prices had an enormous impact on the latter.
At year-end 2014, the SM of companies reporting to the SEC was $1.4 trillion. At year-end 2015, that number was reported to be $560 billion — a year-over-year decline of $840 billion. Only three of the 125 companies in my database reported a year-over-year increase in the value of its reserves. The Energy Information Administration (EIA) recently tabulated that U.S. oil companies lost of total of $67 billion in 2015, but given the dramatically reduced value of reserves that’s a drop in the bucket compared to what it could be with an extended oil and gas bear market.
But since the oil industry began, the cure for low prices has been low prices. The nearly 80% gain in crude prices since the February lows make it likely that some of the write-down in 2015 will be recovered this year.
Robert Rapier has over 20 years of experience in the energy industry as an engineer and an investor.
http://www.forbes.com/sites/rrapier/2016/04/29/an-840-billion-decline-in-oil-and-gas-reserves/#639fddd04e8e
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POLITICO Pro Q&A: Alberta Premier Rachel Notley
May 3, 2016 | PoliticoPro
By Elana Schor
One year ago this week, Rachel Notley's New Democratic Party unseated Canada's Conservative Party to take over leadership of Alberta, the fuel-rich province that's home to the world's third-largest proven oil reserves. The stunning ascension of the 52-year-old NDP leader marked a sweeping change in the public image of a Canadian oil patch that had struggled to win support for the Keystone XL pipeline amid a torrent of criticism over its lack of attention to the high climate change cost of oil sands production.
Notley wasted no time in reorienting Alberta towards cutting emissions in the oil sands, starting with a higher carbon fee for companies that failed to scale back their greenhouse gas footprint. She visited Washington last week to meet with policymakers and tout her work on reshaping the province's environmental goals, and spoke with POLITICO after the trip.
Your trip to Washington was focused on the province’s new climate plan, which includes a carbon fee designed to increase over time as well a hard limit on emissions from the oil sands. What’s your message been to the U.S. this week on how much more there is to be done?
Without question, we are ensuring that every element of the plan I’ve been talking about is fully implemented. In terms of improving it, turning up the dial, that’s going to depend a lot on what the economic modeling shows us, as well as what happens in other jurisdictions, but it’s certainly a model that allows for the dial to be turned up, or not to be turned up.
Emissions reductions in the oil and gas industry are politically contentious in the U.S. right now, with producers arguing that the government's planned methane emissions cuts are too punitive at a time when prices have been under pressure. But you were able to bring some of the industry's biggest players in Canada to the table. Can you talk about that?
Much of that proposal — which is really meaningful and substantive and going to get us to some early wins on emissions reductions — actually came from the progressive industry players that were on our panel. They were already doing a lot of work on it. They refined it and ran it through the filter of the panel. As a whole, most leaders in Alberta see this as something they should be able to do, and they are pleased with the way we’ve structured it, because we’ve allowed for a voluntary incentive program until 2021 and 2022, at which point it's backed up by regulations. Honestly, industry came up with much of the idea — or, certain progressive industry players [did].
Do you think there are any lessons for the U.S. in the way Alberta's emissions plan has taken shape?
What our program is showing is if you are prepared to come to the table in a mature fashion, you will have agency and ultimately that will probably benefit your ability to continue to function as a productive and profitable player in this sector. I'm not going to engage in the internal politics of the oil and gas sector, but I know that if you've got a government clear they're going to take action, clear they are going to proceed with an honest and frank consultation and collaborative process, then I think it makes good business sense for anyone, regardless of the ideological perspective they may come from, to be at the table. That’s how you get things done.
Given the precipitous drop in oil prices, do you feel for some of the companies that have to navigate the new order on climate while facing a separate fiscal challenge? Or is your perspective more that now is the best time for companies to roll up their sleeves on this?
Certainly, the flavor of the conversation in Alberta has been that we have this major challenge in front of us right now, and there’s the drop in price of oil. What we’re asking in terms of the climate change plan actually pales in comparison, in many respects, to the real shock they face as a result of the price of oil. But it’s also, in a way, the best time to make changes and re-calibrate. We’re already having to recalibrate, already having to shift our thinking on a whole bunch of different levels. If we’re in the business of shifting our thinking on a whole bunch of levels, let’s do it on this, too. So, many see it as an opportunity, and that’s the way we’re talking about it.
By this time next year, of course, you'll be working with a different administration in the U.S. on environmental issues. Republicans have been very critical of President Barack Obama's focus on climate change, forcing methane cuts among oil and gas producers, and the like. Do you think you'll be able to proceed with cross-border collaboration regardless of who wins the White House?
A lot of things cannot be predicted in the next election. As much as I like to be a commentator as a hobby, I don’t think I should be doing it professionally. Our focus should simply be on finding those areas on which we have alignment and working on those — those will vary by administration. There is a lot of work going on on the state level, a lot of work on the city level.
During the Keystone XL pipeline battle in the U.S., there was more of a partisan, combative tone between non-governmental organizations [NGOs] working on green issues and the industry. But environmental groups have praised the collaborative changes you're putting in place in Alberta. How have you achieved that?
Our government's election enhanced the urgency of them getting to some consensus. We set up a parallel process that supported and enhanced the work NGOs and industry leaders were doing. But long before my election, we have made the case that people who pit the environment against the economy are not helping the dialogue and, frankly, that approach will result in no progress on either front. Economic issues are hurt when people demonize certain products and environmental issues are hurt when polarization means people in power don't move forward. So I think our model, and the success we’ve had so far, is a good example of the amount of common ground which can be found.
When it comes to industry participation in shaping Alberta's climate plan, does the door remain open for more companies to join? [Imperial Oil and MEG were reportedly among the companies that stayed on the outside of Alberta's initial talks.]
Absolutely. There are at least three separate processes where we have to get to the next level, and we have every intention of getting to the most consultative process while still serving our policy objectives. There are a number of different forums where we continue to reach out to industry saying, "How can we work on this?" We’re setting up an oil sands advisory group where we ask "How do we deal with allocating the emissions cap?" Not to mention the technology piece: How does that work? There are loads of places where we are going to continue to involve the industry as well as community leaders, including indigenous peoples, in the process.
This interview has been edited for clarity and brevity.
https://www.politicopro.com/energy/story/2016/05/politico-pro-q-a-alberta-premier-rachel-notley-110500
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Marcellus/Utica-to-Power Plant Pipe Project in PA Gets FERC Nod
May 2, 2016 | Natural Gas Intelligence
By Jeremiah Shelor
The Sunbury Pipeline Project, designed to deliver 200,000 Dth/d to a new natural gas-fired power plant and to local distribution markets in Central Pennsylvania, received the green light from FERC Friday to move forward with construction.
The Federal Energy Regulatory Commission issued a favorable environmental assessment of the 34.4-mile, 20-inch diameter Sunbury Pipeline late last year (see Shale Daily, Dec. 28, 2015). The project was first announced in late 2014 and applied with FERC for a certificate to construct the pipeline in July 2015.
Sunbury, backed by UGI Corp. subsidiary UGI Sunbury LLC, will primarily supply Marcellus and Utica shale gas to a new power plant in Snyder County, PA, the Hummel Station Generating Facility. The 1,124 MW combined-cycle Hummel Station is being built at the site of the shuttered coal-fired Sunbury Generation Facility.
“The support we’ve received from local, state and federal leadership and today’s approval by FERC enable this major step forward for a cleaner and more secure energy future in the central Susquehanna Valley and across the region,” said UGI Corp. CEO John Walsh. “The Sunbury Pipeline will establish a vital delivery link between abundant Pennsylvania natural gas and the Hummel Station, and is another example of UGI’s efforts to bridge the infrastructure gap between low-cost producing areas of Pennsylvania and consuming areas across our region.”
Sunbury will receive gas from an interconnect with Transcontinental Gas Pipeline Co. LLC and MARC I Pipeline, operated by Central New York Oil & Gas Co., both in Lycoming County. The pipeline would also have delivery points along the proposed route in Northumberland and Snyder counties: UGI Central Penn Gas and UGI Penn Natural Gas.
Besides the pipeline, the Sunbury project includes related facilities in Snyder, Union, Northumberland, Montour and Lycoming counties in Pennsylvania. No compression is proposed.
Sunbury expects construction of the project to be completed as early as November, “assuming timely receipt of all remaining necessary regulatory approvals.”
http://www.naturalgasintel.com/articles/106261-marcellusutica-to-power-plant-pipe-project-in-pa-gets-ferc-nod
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Researchers Aim to Put Carbon Dioxide Back to Work
May 2, 2016 | New York Times
By Henry Fountain
Think, for a moment, of carbon dioxide as garbage, a waste product from burning fossil fuels. Like other garbage, almost all of that CO2 is thrown away — into the atmosphere, where it contributes toclimate change. A small amount is captured and stored underground to keep it out of the air.
But increasingly, scientists are asking, rather than throwing away or storing CO2, how about recycling some of it?
At laboratories around the world, researchers are working on ways to do just that. The X Prize Foundation has created an incentive, a $20 million prize for teams that by 2020 come up with technologies to turn CO2 captured from smokestacks of coal- or gas-fired power plants into useful products.
But perhaps the ultimate goal of researchers in this field is to turn the waste product of fuel-burning into new fuel. In theory, if this could be done on a large scale using renewable energy or even sunlight, there would be no net gain of emissions — the same carbon dioxide molecules would be emitted, captured, made into new fuels and emitted again, over and over.
“The grand prize is figuring out how to make CO2 be recyclable, a renewable resource,” said Harry A. Atwater, a materials scientist at the California Institute of Technology and director of the Joint Center for Artificial Photosynthesis, which has laboratories at the Lawrence Berkeley National Laboratory here and at Caltech. “That would be a millennial advance for society.”
Carbon dioxide is used to make some basic products like urea fertilizer and specialty plastics. But the processes are not necessarily energy efficient, and almost all use CO2 from natural underground reservoirs. Even if companies started using carbon dioxide that was captured, the amount would be less than 0.5 percent of the roughly 32 billion metric tons of CO2 emitted annually by human activity.
What Dr. Atwater and others have in mind are devices that, if scaled up, could recycle a significant portion of carbon dioxide that is captured from power plants or processes like cement manufacturing, or even directly from the atmosphere.
But developing devices that can efficiently and economically convert large amounts of CO2 will require overcoming many hurdles, not the least of which is all the energy required to split carbon dioxide molecules.Continue reading the main storyRELATED COVERAGETechnology to Make Clean Energy From Coal Is Stumbling in Practice MARCH 29, 2016THE BIG FIXCorralling Carbon Before It Belches From Stack JULY 21, 2014Turning Carbon Dioxide Into Rock, and Burying It FEB. 9, 2015
“The big challenge is, how do we go from milligrams to megatons?” said Dick T. Co, a Northwestern University professor and managing director of theSolar Fuels Institute, a group that encourages collaboration among researchers in the field. “How do we make a dent in our energy portfolio when people are working in test tubes today?”
In a research building at the Lawrence Berkeley lab, with a view of San Francisco Bay in the distance, Dr. Atwater leads a team of scientists that is trying to mimic what plants do through photosynthesis. They want to take CO2 and water and, using only sunlight, turn it into fuel.
The center, started in 2010 with a grant from the Department of Energy, devoted its first five years to one aspect of photosynthesis: splitting water into its components, hydrogen and oxygen.
Dr. Atwater, Frances A. Houle, a deputy director, and Karl Walczak, a project scientist, showed some of the fruits of that work — a chip-size sandwich of semiconductor material, catalysts and membranes encased in a clear container with a water-based solution. When the chip was exposed to light, bubbles of gas — hydrogen on one side, oxygen on the other — formed, broke off and rose to the top.
By their calculations, the chip is about 10 times more efficient than a typical plant, which uses about 1 percent of the sunlight that strikes it.
The center is now working on the carbon-dioxide part of the photosynthetic equation. The goal is to integrate the two processes in a device that might look a lot like a solar panel. But rather than generating electricity, it would produce fuel — perhaps methanol, which could be burned directly or converted to gasoline.
Carbon dioxide is much more difficult to split than water, however, involving six steps, each requiring energy and a catalyst. Nature appears to do it effortlessly, but it has had millions of years of evolution to improve the process.
“The big challenge with CO2 is that you produce a whole bunch of products,” Dr. Atwater said. “Nature has developed very refined mechanisms that produce precisely one product.”
Much of the work at the center involves studying catalysis, through theoretical analysis and testing possible combinations of metal oxides to see how well they might work. The testing method is similar to one used for drug discovery, with equipment that can analyze large numbers of very small samples at a time.
The goal is to make a device that can make just one product, as in natural photosynthesis, but more efficiently. At the same time, the device has to be able to last for years, as solar panels do. That adds to the engineering and design challenges.
There are other research groups, and some start-ups and established companies, that are working on CO2 conversion as well. Sunfire, a company in Dresden, Germany, built a prototype to make synthetic crude oil from carbon dioxide and water. Part of the crude is diesel fuel, and in 2015, Audi used some of the Sunfire diesel to briefly power one of its cars.
The Sunfire process uses electricity, not sunlight, so the electricity would have to come from renewable sources to result in meaningful carbon reductions. Given the amount of electricity is required, a big challenge is producing fuel that could compete in price with conventional fossil fuels, said Christian von Olshausen, Sunfire’s chief technology officer.
In Berkeley, at a lab building just down the hill from the Joint Center for Artificial Photosynthesis, three young scientists have started a small company, Opus 12, to develop their own CO2-conversion device, powered by electricity.
Their idea is to exploit the fact that CO2 can be converted into many different products, by coming up with catalysts tailored to produce specific ones.
“Our vision is to design this reactor more as a platform,” said Nicholas Flanders, who founded Opus 12 with Kendra Kuhl and Etosha Cave.
http://www.nytimes.com/2016/05/03/science/carbon-dioxide-recycling.html
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The Environmental Toll of Storing Fossil Fuels
May 3, 2016 | The Hill - Contributors Blog
By Daniel Cohan
As energy prices have swooned, inventories of all fossil fuels have grown to unusually high levels.Coal stockpiles have mounted, crude oil storage has filled and natural gas stocks remain unusually large for the spring season.
Most news coverage of these exceptionally large inventories has focused on their role in continuing to dampen prices for each of these fuels. Coal, oil and natural gas all sell for far less than their prices of a few years ago, even as oil prices have recovered slightly. Some of the stockpiling occurs as traders hope for higher prices in the future.
Beyond these market impacts of soaring inventories, far less has been written about the environmental toll of storing so much fossil fuel for so long. However, coal, oil and natural gas each pose distinct environmental problems in storage, even before their combustion releases emissions to the environment.
As I wrote in a previous column for The Hill, coal stockpiles have been growing everywhere, from the United States to China, as demand has slowed. Once coal is mined, it begins to react with air, releasing gases such as carbon dioxide and hydrocarbons. Coal stockpiles must be carefullymanaged to avert air pockets and heating that can enable spontaneous combustion to occur. Even with careful management, some of the heat content of the coal continues to be lost as it remains exposed to air.
As oil producers and traders await higher prices, companies have been quickly building new underground caverns and tank farms to expand storage capacity, especially in the Houston region. Oil storage requires careful management to minimize the release of hydrocarbons into the air. Recent research by HARC has measured elevated levels of benzene and other air toxics near pipelines and storage tanks near Houston. Benzene is a known carcinogen, and other evaporated hydrocarbons contribute to the formation of ground-level ozone smog and particulate matter.
The environmental damage from fossil fuel storage is most dramatically illustrated by the Aliso Canyon gas leak in California. Scientists estimate that the leak, also known as the Porter Ranch gas blowout, released about 100,000 tons of methane to the atmosphere. Methane is a climate warming gas many times more potent than carbon dioxide that also contributes to background ozone pollution. The leaks from Aliso Canyon occur not from fracking or drilling operations, but instead from the second-largest natural gas storage facility in the country.
While Aliso Canyon garnered the headlines, studies show that hundreds of other underground storage facilities leak natural gas (comprised mostly of methane) to the atmosphere. Though lesser in intensity, these leaks contribute to climate warming and mean that valuable fuel is being wasted without being burned for energy.
Together, the environmental impacts of storage highlight an often overlooked aspect of the life cycle of fossil fuels. Life cycle analysis quantifies the full environmental impacts of a fossil fuel from the time it is extracted to its end use. Many studies seek to quantify the environmental harm caused by mining for coal, drilling for oil or fracking for natural gas. Likewise, emission inventories are fairly reliable for estimating the amounts of greenhouse gases and air pollutants emitted from the end use combustion of fossil fuels.
However, the environmental impacts of the storage and transport steps in between fuel extraction and end use tend to be less well understood. Disperse leaks of pollution from oil and gas storage and coal oxidation are not directly measured, unlike exhaust passing through smokestack monitors or vehicle tailpipe testing. Thus, the environmental cost of storage is typically not factored in to energy market decisions. This may lead to excess amounts of storage, or insufficient efforts to mitigate oxidation or leaks and thereby save valuable fuel.
The Environmental Protection Agency (EPA) and industry have begun to take steps to mitigate emissions from oil and gas storage. More broadly, it is important to recognize that the full costs of fossil fuel storage extend beyond the direct expense of maintaining unsold assets and impact the environment as well.
Cohan is associate professor of civil and environmental engineering at Rice University.
http://thehill.com/blogs/pundits-blog/energy-environment/278477-the-environmental-toll-of-storing-fossil-fuels
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In Aftermath of Derailment, D.C. Officials Turn Focus to CSX and Its Cargo
May 3, 2016 | Washington Post
By Luz Lazo and Faiz Siddiqui
A day after a CSX train derailed in Northeast Washington, leaking hazardous substances along a busy rail corridor, local officials and activists turned their attention to the transportation company responsible, while emergency personnel continued to work clearing the wreckage.
By early Monday afternoon, CSX Transportation was in the process of removing the damaged cars from the site, and all the tank cars had been offloaded, D.C. fire emergency officials said. Officials said all of the leaks had been contained but provided no clues into the cause of the wreck.
The Federal Railroad Administration is investigating the early-Sunday derailment of the 175-car train, which kept some residents away from their homes for hours, forced the closure of a Metro station and snarled traffic for much of the day. The wreck also disrupted MARC and Amtrak service, which use the tracks.
Officials had said Sunday that 14 cars derailed but upped the number to 16 Monday. Three of the tank cars were found to be leaking, including 750 gallons of the liquid content of a tanker containing sodium hydroxide. CSX described sodium hydroxide — also known as lye — as a chemical “used to produce various household products, including paper, soap and detergents.”
Officials said there was no threat to the air or water supply.
One scrap-metal hopper car is too damaged and will be cut up on site and removed using industrial equipment, officials said. After the train cars are removed from the site, CSX will begin soil remediation in the area affected by the sodium hydroxide spill, the company said. Following that process, track will be laid to begin the process of restoring service.
“This will be done at walking speed, under the direction of FRA and with air monitoring in place,” D.C. Fire Department officials said in a statement.
Rob Doolittle, chief spokesman for CSX, declined to provide a time estimate for restoring rail service.
“We know many people are relying on Amtrak and MARC, and we want to let them know what’s going on, but we don’t have enough information to give a hard deadline for when service will be restored,” Doolittle said.
Maryland transportation officials said MARC riders on the Brunswick Line can expect the service disruptions to continue Tuesday.
In addition to the inconvenience to those who depend on the rail corridor for travel, the derailment also revived long-standing concerns about freight trains carrying hazardous materials through the nation’s capital.
Del. Eleanor Holmes Norton (D-D.C.), who visited the site Monday, said she was worried about a possible chemical spill in the Rhode Island Avenue NE neighborhood where the wreck occurred. She also sought answers about whether hazardous materials will be prohibited from being transported through the Virginia Avenue Tunnel, which CSX is rebuilding and enlarging.
D.C. Council member Mary M. Cheh (D-Ward 3), who chairs the panel’s committee on transportation and the environment, said the derailment is a wake-up call that the city needs to boost its oversight of freight rail.
Cheh said she’s resuming efforts to create a rail-safety office that tracks what materials are moved through the city, conduct inspections, and coordinate vulnerability assessments and safety response plans. Maryland and Virginia have similar rail-safety oversight, but District EMS personnel acknowledged two years ago that the city doesn’t inspect freight rail shipments or the city’s rail infrastructure.
“We need to do something about it,” said Cheh, who introduced legislation to create the office a year ago, but it has remained stuck in committee. She plans to include the proposal as part of budget negotiations.
“I don’t want to wait for another accident,” she said. “Maybe you can’t stop the accidents from happening, but we need to create the expertise and the training and have the standards and security and safety plans in place. . . . The whole point is to minimize risks and to maximize effective responses.”
Concerns about potentially toxic materials being transported through the Washington region were raised in the aftermath of the Sept. 11, 2001, terrorist attacks. Since 2004, CSX says, it has not transported certain categories of hazardous materials, including chlorine, ammonia and certain kinds of explosives through the District. Potentially explosive crude oil or gases that could be toxic if inhaled are not routed through the area, CSX officials said.
The material that leaked Sunday, sodium hydroxide, is not flammable and doesn’t vaporize, officials said.
Under FRA rules, railroads are required to use routing software that transports crude oil and other hazardous materials along the safest routes. The software takes into account 27 factors, among them the population along the route, the length of the trip, the number of river crossings and the speed at which the train would move.
Hours after Sunday’s derailment, Maureen Cohen Harrington, a Navy Yard resident and member of DCSafeRail, an organization fighting against CSX transporting hazardous materials through the neighborhood, snapped photos of another CSX train passing through the District with tankers labeled “chlorine,” a chemical the company says it does not transport through the city.
A CSX statement Monday said any such cars were empty and pointed to federal safeguards in place to ensure the safe transportation of hazardous materials.
“CSX does not move certain categories of hazardous materials or crude oil through the District, including the Virginia Avenue Tunnel,” spokeswoman Kristin Seay said.
“CSX does move empty rail cars that previously contained high-hazard materials through the District,” Seay said. [The U.S. Department of Transportation] assesses CSX’s hazardous materials routes and conducts reviews and audits. Those audits have confirmed that CSX is in compliance with its shipments of hazardous materials.”
Empty or not, the residue created by such materials raises the potential for dangerous chemical interactions in the event of a derailment, Harrington said.
“The burden should be on CSX to prove that these chlorine cars were empty. It’s not enough to offer merely its word and a reference to complicated, secret, minimal and poorly enforced federal regulation,” Harrington said. “Just imagine if those chlorine cars had collided with the molten sulfur and other hazardous materials that surrounded them. What a witches’ brew of chemicals that would have been. Even if the chlorine cars were ‘empty.’ ”
Since the beginning of the year, nine CSX trains carrying hazardous materials have derailed in the United States, according to data published by FRA. The most common primary cause was a misaligned railroad switch, which was the case in three separate derailments.
Sunday’s derailment occurred near a rail switch in the vicinity of Rhode Island Avenue and Ninth Street NE, but officials have not said whether it was a factor in the incident.
It also appeared to be most the serious derailment involving a CSX train with hazardous materials this year. In January, 16 rail cars of a CSX train derailed in western Tennessee, but no hazardous material was spilled, according to the FRA. The cause in that incident was wide gauge, a track defect that causes the wheels to lose contact with the rails.
Sunday’s derailment also was not the first involving CSX to occur near the Rhode Island Avenue Metro station. In October 2004, a derailment tossed at least eight boxcars from the tracks, spilling loads of gravel and snarling traffic on the rail line owned by CSX. That incident occurred near Rhode Island Avenue and Eighth Place NE.
The culprit in that case was apparently a faulty wheel. Officials at the time called on then-Homeland Security Secretary Tom Ridge to reroute rail shipments of hazardous materials away from Washington, citing the threat of terrorists.
If the derailed cars had been carrying chlorine instead, said the lawmakers, D.C. emergency workers “would have been dealing with an evacuation and mass casualties.”
Ashley Halsey III contributed to this report.
https://www.washingtonpost.com/local/trafficandcommuting/in-aftermath-of-derailment-dc-officials-turn-focus-to-csx-and-its-cargo/2016/05/02/b55c85d8-1074-11e6-81b4-581a5c4c42df_story.html
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CSX Will Clear Track of Derailed Train by Tuesday Night, Norton Says
May 2, 2016 | Washington Times
By Ryan M. McDermott
MARC train commuters on the Brunswick line will experience major service delays Tuesday, as railroad crews clear the aftermath of Sunday’sCSX freight train derailment in Northeast Washington.
Three trains will run in the morning and three in the evening. Maryland Transportation Administration officials said riders should expect the same commuting experience as Monday’s.
"These three trains will likely be very crowded,” MTA said Monday evening.
All three morning trains will make all stops and terminate at Silver Spring, and the three evening trains will originate at the Silver Spring station.
Sixteen railcars jumped the tracks Sunday morning near the Rhode Island Avenue Metro station, causing chemical leaks from three of the cargo containers. Federal rail regulators and CSX are trying to determine the cause of the derailment. No injuries were reported in the accident.
“It would be premature for us to speculate about what the cause might be until the [Federal Railroad Administration] completes its investigation,”CSX spokesman Rob Doolittle said Monday.
According to Federal Railroad Administration spokesman Matthew Lehner, one of leaking railcars spilled sodium hydroxide, commonly known as lye, a solvent used to make soap and detergents. That car’s leak was repaired on the scene Sunday. Another cargo car carrying ethanol sprang a minor leak that was patched quickly.
A third car carrying non-hazardous calcium chloride, a water soluble compound commonly used de-ice roads, had a minor leak that also was quickly patched and sealed, Mr. Lehner said.
The cars carrying sodium hydroxide and ethanol were offloaded Monday as CSX prepared to remove them from the site. As of Monday afternoon, three cars needed to be moved out of the area, Mr. Lehner said.
The federal railroad spokesman noted that the derailment occurred close to the Rhode Island Avenue subway, but said no freight cars made contact with Metro tracks or the station during the accident. Fire and rail officials determined Sunday that the chemical spills did not require an evacuation of the area.
CSX, which is based in Jacksonville, Florida, did not say how long the cleanup will last. But D.C. Delegate Eleanor Holmes Norton, who visited the derailment site Monday afternoon, said CSX officials told her that transportation on the track will be restored this week, likely by Tuesday evening.
The railroad freight company said it was removing any soil that may have been in contact with sodium hydroxide and replacing it with clean fill. That will involve removing some of the tracks in the area, excavating and replacing soil with clean material, then rebuilding the tracks.
“CSX is completing this work in compliance with all applicable federal and local regulations, and we appreciate the continued support of D.C. firefighters and police officers in responding to this incident and taking steps to ensure the public’s safety throughout,” said Mr. Doolittle, the company spokesman.
Though the spill hasn’t wreaked any environmental havoc, Jon Kenney, an environmental expert with the Chesapeake Climate Action Network, said the aftermath could have been a lot worse if the cargo cars had been carrying more dangerous chemicals when they derailed.
“I shudder to think of the consequences if it had been crude oil in the train cars instead of relatively less explosive sodium hydroxide,” Mr. Kenney said. “CSX claims it rarely transports highly explosive crude oil through the District, but we have no way of knowing for sure.”
Mr. Doolittle said it is rare for the company to haul crude oil through the area where the derailment occurred, though he did not provide any statistics.
“An explosion could shoot a fireball hundreds of feet in the air, like it did in Lynchburg, Virginia, in 2014, setting the James River on fire for hours, or in Lac-Megantic, Quebec in 2013, tragically killing 47 people,” Mr. Kenney said.
He said there’s only one way to ensure a crude oil accident doesn’t happen: “Ban oil trains, because there’s no safe way to transport crude oil through neighborhoods like the one affected by Sunday’s derailment,” he said.
Business for CSX also was affected by the derailment. Mr. Doolittle didn’t give a dollar figure for the damage and delays, but said the company has advised customers whose freight is transported through the derailment area to expect eight- to 24-hour delays. CSX was also able to reroute some shipments.
http://www.washingtontimes.com/news/2016/may/2/csx-will-clear-track-of-derailed-train-by-tuesday-/
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Texas Eastern Explosion Knocks Out 1 Bcf/d of NatGas Shipments
May 2, 2016 | Natural Gas Intelligence
By Jamison Cocklin
The explosion that rocked the Texas Eastern (Tetco) pipeline in Southwest Pennsylvania on Friday has cut about 1 Bcf/d of natural gas flows on the system, according to Genscape.
The blast and subsequent fire were reported Friday at about 8:30 a.m. EDT on Tetco's Penn-Jersey Line in the M3 Zone, toppling trees, razing one house, damaging others and sending one resident to the hospital with severe burns (see Daily GPI, April 29).
Flows were immediately affected, pushing up M3 Deliveries basis by 9.8 cents in Friday trading from minus 64.3 cents to minus 54.5 cents for a 15.2% gain on the day, according to NGI data.
Prior to Friday, prompt Tetco M3 Delivered basis had averaged minus 65.7 cents during April trading, said NGI Markets Analyst Nate Harrison.
Flows beginning at the Delmont compressor -- the western boundary of the M3 zone -- have been cut to zero, with flows affected eastward, said Genscape, which tracks real-time data and intelligence for commodity and energy markets.
“The return of capacity through the Delmont compressor station remains unknown, but will remain at zero through May 3,” said Spectra Energy Corp. spokesman Creighton Welch, who added that flows through the affected section were 1.3 Bcf/d prior to the incident.
It's unclear what caused the explosion, which occurred on a section of Tetco in Westmoreland County's Salem Township, about 30 miles east of Pittsburgh. The fire was out by Friday afternoon. The Pipeline and Hazardous Materials Safety Administration took over the investigation from state regulators on Friday and sent an inspector to determine the cause of the failure.
Spectra, which owns Tetco, said it is actively working with federal regulators and said six of the nine evacuated families have returned to their homes. The explosion occurred in an area where four lines run parallel to one another. The rupture occurred on a 30-inch line, while the other 30-inch line, a 36-inch line and a 24-inch line were shut-off Friday to assess damage.
"It is uncertain how long the system will be down and/or affected, but we have reason to believe it will not be more than a week or two," Genscape said. "First of all, there are parallel lines adjacent to the ruptured one that may be able to come back into service soon. Second, similar events on other pipelines in the United States and Canada have taken just a few days to repair."
Flows through the Delmont compressor were shut off immediately after the explosion. Those averaged 1.07 Bcf/d in the five days prior to the incident, including a peak of 1.36 Bcf/d on April 27. Over the weekend, Tetco reported backward flows through Delmont of about 180 MMcf/d, Genscape said. All compressors east of Delmont and west of the Perulack compressor in Pennsylvania registered similar declines.
Genscape added that Tetco has also been compensating by reducing its deliveries to interstate interconnects. The largest declines, the firm said, are in deliveries to Algonquin at Lambertville, NJ, which have averaged 142 MMcf/d since the explosion, compared to 373 MMcf/d in the five days before the accident. Deliveries to Dominion at Perulack were down to 31 MMcf/d compared to 140 MMcf/d.
East of Perulack, where the Leidy line connects to the Penn-Jersey northern line, flows are also declining. Tetco has increased volumes flowing southward on Leidy by increasing its storage withdraws from about 100 MMcf/d to about 650 MMcf/d, Genscape added.
There are about six power plants that are captive to the system, but Genscape said those generators appear to be unaffected so far. Flows farther east have also been less affected, with Tetco increasing flows on its southern line.
Genscape said that if the other lines that weren't ruptured on Friday are brought back online, then the system would have enough "flow capacity to satisfy downstream obligations based on recent nomination levels." An ongoing force majeure is in effect along with a system-wide operational flow order (OFO) for all deliveries into the system, and there is an OFO for all deliveries and receipts in the M2 zone. Those are in effect until June 1 as the company assesses damage and how long it might take to repair.
“We are sensitive to our shippers’ responsibilities, and we can’t speak to how they are meeting their customers’ needs, but we are unaware of any downstream reliability issues due to our outage,” Welch said. “We are keeping shippers informed about the status of our return to service plan for the additional Texas Eastern lines that we have isolated out of an abundance of caution.”
When asked by NGI, some producers in the region said they had not yet been significantly impacted by the outage. Consol Energy Inc. spokesman Brian Aiello said the company’s Marcellus Shale volumes in Pennsylvania have been “impacted slightly,” but called the effects “very minor.” Range Resources Corp. spokesman Matt Pitzarella said the company’s production has not been affected by the incident.
Spectra said it has installed a silt fence to protect a nearby stream from any potential runoff, while state regulators have concluded air quality monitoring.
Spectra said it is conducting surface water testing, as well. The company also has a care team on the ground working closely with affected landowners, and an insurance adjuster is on site to help with property damage.
http://www.naturalgasintel.com/articles/106264-texas-eastern-explosion-knocks-out-1-bcfd-of-natgas-shipments
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2008 Ozone Levels Met for Six Areas After Extension
May 3, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
Six areas will be able to demonstrate attainment with the 2008 ozone standards after receiving a one-year compliance extension from the Environmental Protection Agency, state and local air quality officials told Bloomberg BNA.
The one-year extension, which pushed back the attainment deadline for certain marginal nonattainment areas from July 2015 until July 2016, allowed states to consider 2015 air quality monitoring data for the purposes of determining compliance with the 75 parts per billion ozone standards. Air regulators said that extra year will allow nonattainment areas including Washington, D.C., Philadelphia, Pittsburgh, Cleveland, St. Louis and Eastern San Luis Obispo County, Calif., to show that they meet the standards.
Some of those areas, including Philadelphia and San Luis Obispo County, are likely to be designated as nonattainment areas under the more recent 2015 ozone standards of 70 ppb next year. However, demonstrating compliance with the 2008 ozone standards will help those areas avoid being redesignated from a marginal nonattainment area to a moderate nonattainment area, which would have placed additional pollution control planning requirements on regulators.
EPA Administrator Gina McCarthy April 11 signed a final rule giving eight marginal nonattainment areas a one-year extension under Section 181(a)(5) of the Clean Air Act based on positive trends in 2014 air quality data (71 DEN A-2, 4/13/16).
The other two nonattainment areas that received a one-year extension, the Houston-Galveston-Brazoria region in Texas and Sheboygan, Wis., are not expected to be able to demonstrate attainment in 2016, state air officials said. Andrew Keese, a spokesman with the Texas Commission on Environmental Quality, told Bloomberg BNA in an e-mail that EPA is expected to formally reclassify the Houston area as a moderate nonattainment area in late 2016 or early 2017.
David Bizot, a spokesman with the Wisconsin Department of Natural Resources, told Bloomberg BNA in an e-mail that once Sheboygan is reclassified as a moderate nonattainment area, it will have until July 20, 2018, to show attainment with the 2008 standards.
New Data Drove Compliance
Compliance with the ozone standards are determined based on a three-year average of the fourth-highest eight-hour concentration measured each year. For many metropolitan areas, dropping 2012 data from consideration in favor of 2015 data resulted in a significant drop in their three-year ozone averages, known as design values.
For example, based on 2012-2014 data, the Washington, D.C., metropolitan area had an ozone design value of 76 ppb. The ozone design value for Washington, D.C., for 2013-2015 is 70 ppb, “quite a bit below” the 2008 standards, Stephen Walz, director of the Department of Environmental Programs at the Metropolitan Washington Council of Governments, told Bloomberg BNA.
Data provided to Bloomberg BNA by the Philadelphia Public Health Department also illustrate the significant effect of the one-year extension on that area's ability to meet the ozone standards. The fourth-highest eight-hour concentration recorded by a monitor in Camden, N.J., which is part of the four-state Philadelphia-Wilmington-Atlantic City nonattainment area, was 92 ppb, which is well above the 2008 standards. In 2015, that number dropped to 72 ppb, helping the Philadelphia nonattainment area come into compliance.
However, due to variability in annual ozone regions, the one-year extension didn't help all areas. Keese of the TCEQ said dropping 2012 data and adding 2015 data did not alter the area's design value.
“There have been numerous periods where the ozone design value in the Houston-Galveston-Brazoria area has dropped by 5 ppb or more in one year,” Keese said. “However, compliance is demonstrated with measurements over a three consecutive year period, and 2015 would have needed to have had ozone levels similar to 2014 to comply with the standard.”
Planning Under Way in Some Cities
It will take more than a design value of 75 ppb or lower in order for Washington, D.C., Philadelphia and the other areas to actually be redesignated by the EPA as attainment under the 2008 ozone standards.
In order to be redesignated, areas must develop and submit for EPA approval a maintenance plan that provides for the area to continue to attain the standards for at least 10 years. Some areas are already beginning work on that process.
Tom Bastian, a spokesman for the Missouri Department of Natural Resources, told Bloomberg BNA in an e-mail that Missouri air regulators are already working on a formal redesignation request and a maintenance plan covering the St. Louis-St. Charles-Farmington nonattainment area, which saw its design value drop from 78 ppb in 2012-2014 to 71 ppb in 2013-2015.
Officials in the District of Columbia, Virginia and Maryland also are eager to start working on the necessary documentation to be redesignated, Walz of the Washington Council of Governments said.
“We're not going to wait to start work on a maintenance plan,” Walz said.
Areas May Not Meet New Standards
While the one-year extension helped several cities come into compliance with the 2008 ozone standards and avoid being redesignated as a moderate nonattainment area, several municipal officials said that achievement ultimately may not change much because of the new, more stringent ozone standards issued in 2015 by the EPA. The EPA said it anticipates that final area designations under the 2015 ozone standards of 70 ppb will be issued by Oct. 1, 2017 (40 DEN A-2, 3/1/16).
Larry Allen, air pollution control officer for the San Luis Obispo County Air Pollution Control District in California, said the process for redesignating the eastern portion of that county will be little more than a bureaucratic exercise because the county is likely to be labeled as a marginal nonattainment area under the 2015 standards. Allen told Bloomberg BNA that based on 2013-2015 data, eastern San Luis Obispo County has an ozone design value of 73 ppb, which would violate the 2015 standards.
While designations under the 70 ppb ozone standards will be based on data from 2014-2016, the EPA has instructed states to base their designation recommendations on quality-assured data from 2013-2015.
“We're going to be designated nonattainment for the new ozone standard,” Allen said, though he was confident that ozone levels will continue to fall over the new few years. “We would expect that within the next few years, we'll come into attainment of even the new federal standards.”
San Luis Obispo isn't the only area that may ultimately end up back in nonattainment status for the 2015 ozone standards. Melissa Wade, a spokeswoman with the Allegheny County Health Department, told Bloomberg BNA in an e-mail that Pittsburgh “may very well” be a nonattainment area under the 2015 ozone standards.
Even Washington, D.C., which now has a design value of 70 ppb and would currently meet the 2015 standards, could still end up as being in nonattainment. Walz of the Washington Council of Governments said the D.C. area's attainment status under the 2015 standards will depend on how it fares in 2016.
“It really is going to depend on what happens this summer,” Walz said. “We'll hope that many of the actions that have been in place to reduce ozone levels continue to show the results this year.”
No Permitting Benefit for Philadelphia
Jeff Moran, a spokesman for the Philadelphia Public Health Department, told Bloomberg BNA there is “little incentive” for the Philadelphia nonattainment area, which encompasses portions of four states, to go through the redesignation process. Philadelphia will probably be designated as nonattainment under the 2015 ozone standards, with several air monitors in the area recording design values above 70 ppb from 2013-2015, Moran said.
In addition, all of the states that include part of the Philadelphia nonattainment area are within the ozone transport region, a group of states in the Northeast and Mid-Atlantic that are required to install a certain level of pollution controls for ozone-forming emissions, even if all areas within the state meet the ozone standards.
“Because the area is in the ozone transport region, the preconstruction permitting rules required in ozone nonattainment areas are not replaced with the less rigorous rules for ozone attainment areas,” Moran said.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=88850592&vname=dennotallissues&fn=88850592&jd=88850592
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Leaked Documents Fan Enviros' Fears over E.U. Talks
May 2, 2016 | E&E News PM
By Geof Koss
Environmental groups on both sides of the Atlantic are raising concerns over leaked documents detailing trade negotiations between the United States and European Union that they say would undercut efforts to curb climate change.
Like the Trans-Pacific Partnership trade deal currently pending before Congress, the Transatlantic Trade and Investment Partnership (TTIP) documents, released today by Greenpeace Netherlands, make no mention of "climate change" (Greenwire, Nov. 5, 2015).
The documents show "the deal would grant broad rights to corporations to undermine climate policies," the Sierra Club said in a statement today.
One major objection for environmentalists is the inclusion of "national treatment" terms in the text, which the Sierra Club says would require the Energy Department to automatically approve liquefied natural gas exports to the European Union, the third largest importer of natural gas.
The European Union -- backed by many in Congress -- has increasingly sought to increase use of U.S. LNG as a means to curb its dependence on Russian gas. But environmentalists fear more exports will lead to increased hydraulic fracturing and emissions, from both production and liquefaction of the gas.
Under U.S. law, the Energy Department weighs whether LNG exports meet a "public interest" test; applications for export to nations with free-trade agreements with the United States automatically qualify for the test.
But Ilana Solomon, director of the Sierra Club's Responsible Trade Program, said the U.S. law only applies if there is a corresponding provision in the trade deal.
"That doesn't mean that a trade agreement has to include national treatment for trade in gas," she said today, noting there could be an exception to preserve DOE's oversight of exports to trade partners.
Environmentalists are also seizing on the inclusion of language in a section titled "Tactical State of Play" -- marked "not intended for public viewing" -- that suggests the United States is holding out LNG exports as a "bargaining chip" to win concessions from the European Union in other areas.
That section states the United States "kept insisting that the export of natural gas to the EU could be linked with the EU's commitments and reservations in the Services and Investment chapter."
In its own release on the leaked documents, Greenpeace notes that the text does not include a nearly 70-year-old rule allowing nations to restrict trade "to protect human, animal and plant life or health," or for "the conservation of exhaustible natural resources."
The Sierra Club also charged that the documents show negotiators are considering "regulatory cooperation" rules that would create a new process for how rules are made and allow industry additional opportunities to challenge them based on the impact on trade. Additionally, it slams an E.U. proposal that it says would deem environmental labels and standards "technical barriers to trade," which could undermine energy efficiency or "climate footprint" rules.
E.U. environmentalists expressed a similar view of the text.
"These leaked documents confirm what we have been saying for a long time: TTIP would put corporations at the center of policy-making, to the detriment of environment and public health," said Jorgo Riss, director of Greenpeace EU, in a statement. "We have known that the EU position was bad, now we see the US position is even worse. A compromise between the two would be unacceptable."
A spokesman for the U.S. Trade Representative dismissed green groups' claims about the leaked documents.
"While the United States does not comment on the validity of alleged leaks, the interpretations being given to these texts appear to be misleading at best and flat out wrong at worst," he said in an email, noting that environmental groups are included in the "extensive consultations" the United States employs with stakeholders.
"TTIP will preserve, not undermine, our strong consumer, health, environmental standards, and position the U.S. and the E.U. to work together to push standards higher around the world. We look forward to having a fact-based discussion about what T-TIP seeks and does not seek to achieve."
http://www.eenews.net/eenewspm/2016/05/02/stories/1060036591
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Resettling the First American ‘Climate Refugees’
May 3, 2016 | New York Times
By Coral Davenport and Campbell Robertson
Each morning at 3:30, when Joann Bourg leaves the mildewed and rusted house that her parents built on her grandfather’s property, she worries that the bridge connecting this spit of waterlogged land to Louisiana’s terra firma will again be flooded and she will miss another day’s work.
Ms. Bourg, a custodian at a sporting goods store on the mainland, lives with her two sisters, 82-year-old mother, son and niece on land where her ancestors, members of the Native American tribes of southeastern Louisiana, have lived for generations. That earth is now dying, drowning in salt and sinking into the sea, and she is ready to leave.
With a first-of-its-kind “climate resilience” grant to resettle the island’s native residents, Washington is ready to help.
“Yes, this is our grandpa’s land,” Ms. Bourg said. “But it’s going under one way or another.”
In January, the Department of Housing and Urban Developmentannounced grants totaling $1 billion in 13 states to help communities adapt to climate change, by building stronger levees, dams and drainage systems.
One of those grants, $48 million for Isle de Jean Charles, is something new: the first allocation of federal tax dollars to move an entire community struggling with the impacts of climate change. The divisions the effort has exposed and the logistical and moral dilemmas it has presented point up in microcosm the massive problems the world could face in the coming decades as it confronts a new category of displaced people who have become known as climate refugees.
“We’re going to lose all our heritage, all our culture,” lamented Chief Albert Naquin of the Biloxi-Chitimacha-Choctaw, the tribe to which most Isle de Jean Charles residents belong. “It’s all going to be history.”
Around the globe, governments are confronting the reality that as human-caused climate change warms the planet, rising sea levels, stronger storms, increased flooding, harsher droughts and dwindling freshwater supplies could drive the world’s most vulnerable people from their homes. Between 50 million and 200 million people — mainly subsistence farmers and fishermen — could be displaced by 2050 because of climate change, according to estimates by the United Nations Institute for Environment and Human Security and the International Organization for Migration.Continue reading the main story
“The changes are underway and they are very rapid,” Interior Secretary Sally Jewell warned last week in Ottawa. “We will have climate refugees.”
But the problem is complex, said Walter Kaelin, the head of the Nansen Initiative, a research organization working with the United Nations to address extreme-weather displacement.
“You don’t want to wait until people have lost their homes, until they flee and become refugees,” he said. “The idea is to plan ahead and provide people with some measure of choice.”
The Isle de Jean Charles resettlement plan is one of the first programs of its kind in the world, a test of how to respond to climate change in the most dramatic circumstances without tearing communities apart. Under the terms of the federal grant, the island’s residents are to be resettled to drier land and a community that as of now does not exist. All funds have to be spent by 2022.
“We see this as setting a precedent for the rest of the country, the rest of the world,” said Marion McFadden, who is running the program at the Department of Housing and Urban Development.
But even a plan like this — which would move only about 60 people — has been hard to pull off. Three previous resettlement efforts dating back to 2002 failed after they became mired in logistical and political complications. The current plan faces all the same challenges, illustrating the limitations of resettlement on any larger scale.
For over a century, the American Indians on the island fished, hunted, trapped and farmed among the lush banana and pecan trees that once spread out for acres. But since 1955, more than 90 percent of the island’s original land mass has washed away. Channels cut by loggers and oil companies eroded much of the island, and decades of flood control efforts have kept once free-flowing rivers from replenishing the wetlands’ sediments. Some of the island was swept away by hurricanes.
What little remains will eventually be inundated as burning fossil fuels melt polar ice sheets and drive up sea levels, projected the National Climate Assessment, a report of 13 federal agencies that highlighted the Isle de Jean Charles and its tribal residents as among the nation’s most vulnerable.
Already, the homes and trailers bear the mildewed, rusting scars of increasing floods. The fruit trees are mostly gone or dying thanks to saltwater in the soil. Few animals are left to hunt or trap.
Violet Handon Parfait sees nothing but a bleak future in the rising waters. She lives with her husband and two children in a small trailer behind the wreckage of their house, which Hurricane Gustav destroyed in 2008.
The floods ruined the trailer’s oven, so the family cooks on a hot plate. Water destroyed the family computer, too. Ms. Parfait, who has lupus, is afraid of what will happen if she is sick and cannot reach a doctor over the flooded bridge.
Ms. Parfait, who dropped out of high school, hopes for a brighter future, including college, for her children, Heather, 15, and Reggie, 13. But the children often miss school when flooding blocks their school bus.
“I just want to get out of here,” she said.
Still, many residents of Isle de Jean Charles do not want to leave. Attachment to the island runs deep. Parents and grandparents lived here; there is a cemetery on the island that no one wants to abandon. Old and well-earned distrust of the government hangs over all efforts, and a bitter dispute between the two Indian tribes with members on the island has thwarted efforts to unite behind a plan.
“Ain’t nobody I talk to that wants to move,” said Edison Dardar, 66, a lifelong resident who has erected handwritten signs at the entrance to the island declaring his refusal to leave. “I don’t know who’s in charge of all this.”
Whether to leave is only the first of the hard questions: Where does everyone go? What claim do they have to what is left behind? Will they be welcomed by their new neighbors? Will there be work nearby? Who will be allowed to join them?
“This is not just a simple matter of writing a check and moving happily to a place where they are embraced by their new neighbors,” said Mark Davis, the director of the Tulane Institute on Water Resources Law and Policy.
“If you have a hard time moving dozens of people,” he continued, “it becomes impossible in any kind of organized or fair way to move thousands, or hundreds of thousands, or, if you look at the forecast for South Florida, maybe even millions.”
Louisiana officials have been coping with some of the fastest rates of land loss in the world — an area the size of Delaware has disappeared from south Louisiana since the 1930s. A master plan that is expected to cost tens of billions of dollars envisions a giant wall of levees and flood walls along the coast.
But some places, like the island, would be left on the outside. For those communities, wholesale relocation may be an effective tool, if a far more difficult and costly one.
“That’s one of the things we need to learn from the creation of this model, which is how to do it economically,” said Pat Forbes, the executive director of the state’s Office of Community Development, the agency in charge of administering the federal climate grant.
A vast majority of the $1 billion disaster-resilience grant program is spent on projects to improve infrastructure, like stronger roads, bridges, dams, levees and drainage systems, to withstand rising seas and stronger storms.
But experts see places like Isle de Jean Charles as lost causes.
“We are very cognizant of the obligation to taxpayers to not throw good money after bad,” Ms. McFadden of the Department of Housing and Urban Development said. “We could give the money to the island to build back exactly as before, but we know from the climate data that they will keep getting hit with worse storms and floods, and the taxpayer will keep getting hit with the bill.”
With door-to-door visits, the state is only beginning to find out what the residents want in a new plan, Mr. Forbes said.
The location of the new community has not been chosen. Chiefs of the two tribes present on the island — the Biloxi-Chitimacha-Choctaw and theUnited Houma Nation — have debated who would be allowed to live there beyond the islanders themselves, and whether some islanders could resettle elsewhere. One of the planners involved in the resettlement suggested a buffer area between the new community and its surrounding neighborhood to reduce tension. Chief Naquin wants a live buffalo on site.
What has been decided, and what was essential for the islanders’ support, is that the move be voluntary.
“I’ve lived my whole life here, and I’m going to die here,” said Hilton Chaisson, who raised 10 sons on the island and wants his 26 grandchildren to know the same life of living off the land.
He conceded that the flooding has worsened, but, he said, “we always find a way.”
http://www.nytimes.com/2016/05/03/us/resettling-the-first-american-climate-refugees.html
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