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PRACTICE ACC PM Shelly 27/11/17
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(ACC Mentioned) American Chemistry Council President and Chief Executive Officer, Cal Dooley to Receive Prestigious 2018 SCI Chemical Industry Medal
Nov 27, 2017 | Markets Insider
The Society of Chemical Industry, America Section (SCI America), announced today that the 2018 SCI Chemical Industry Medal will be presented to Cal Dooley, former Member of Congress and current President and CEO of the American Chemistry Council. -
EU Extends Approval for Weed Killer Claimed to Harm Health
Nov 27, 2017 | The Associated Press (In The New York Times)
BRUSSELS — The European Union has approved a five-year extension of the use of the weed killer glyphosate in a move that failed to satisfy both environmentalists and farmers. -
EU Member States Consider Titanium Dioxide Labelling Issue
| Chemical Watch
The European Commission has asked member state competent authorities to come up with solutions to a titanium dioxide labelling problem, arising from the proposed carcinogenicity classification. -
OPEC-US Clash for Oil Supremacy Nears Day of Reckoning
Nov 27, 2017 | Chron
By Grant Smith
The clash between OPEC and America's oil industry is reaching a day of reckoning. -
LNG Exports Won’t Make Or Break Gas Market, But E&Ps May Benefit
Nov 27, 2017 | Natural Gas Intelligence
By Leticia Gonzales
Vast supplies of low-cost natural gas have put the United States on track to becoming the largest exporter of liquefied natural gas (LNG) within the decade. -
The Energy 202: The Other Corner of Alaska the GOP Wants to Open Up
Nov 27, 2017 | The Washington Post
By Dino Grandoni
In spearheading their massive tax code rewrite, Republicans have also reopened one of the nation’s long-running environmental fights. -
Noble Energy Sells Land Holdings in $340 Million Deal
Nov 27, 2017 | Chron
By Collin Eaton
Noble Energy will collect $340 million in a deal to sell millions of acres of mineral rights and royalty interests in oil-rich land across Texas, Oklahoma, North Dakota and other states to private equity group Black Stone Energy. -
Keystone Spills Larger Than Company Predicted Before it Was Built
Nov 27, 2017 | Reuters (In The Hill)
By Devin Henry
Spills from the Keystone pipeline, including one in South Dakota this month, have exceeded the amount predicted by its developer before the pipeline began operating, Reuters reported Monday. -
Trump Races to Pick Judges Who Oversee Environment Cases
Nov 27, 2017 | E&E ClimateWire
By Robin Bravender and Scott Waldman
President Trump has dismissed global warming as a hoax, snubbed the Paris emissions pact and scrapped U.S. EPA climate rules. -
D.C. Circuit Grants Former Obama Officials Role in RMP Delay Suit
Nov 27, 2017 | Inside EPA
A federal appeals court has granted former Obama worker safety officials' request to back environmentalist and Democratic state attorneys general in a suit challenging the Trump administration's nearly two-year delay of Obama EPA revisions tightening the Risk Management Plan (RMP) facility accident prevention rule.
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Nov 27, 2017 | Markets Insider
The Society of Chemical Industry, America Section (SCI America), announced today that the 2018 SCI Chemical Industry Medal will be presented to Cal Dooley, former Member of Congress and current President and CEO of the American Chemistry Council. He will receive the medal at a dinner in his honor on March 6, 2018 at the Plaza Hotel in New York City.
The SCI Chemical Industry Medal honors an individual whose leadership, commitment and contributions have been responsible for substantial progress and performance of the chemical industry. In addition to being an active guiding force in the leadership of their organization during periods of expansion, challenging conditions, or new directions, recipients are known for service rendered to the industry as a whole.
"Cal Dooley is celebrated for his role in strengthening the competitive position of U.S. chemical manufacturers by advocating for a business and regulatory climate that drives innovation, supports job growth and enhances safety," said Chris Pappas, President and CEO of Trinseo and chair of SCI America. "Under Cal's leadership, ACC has achieved some of its greatest successes in recent memory, including the modernization of chemicals management regulation. His leadership and vision have helped enact policies that enable the growth of the Business of Chemistry, while protecting health, safety and the environment in our nation."
Dooley's leadership has been critical to ensuring that policymakers understand the link between the chemical industry and growth in America's manufacturing sector that will drive U.S. competitiveness, boost exports, and create new, high-paying jobs. These achievements have created a more favorable environment for the business of chemistry in the U.S. – contributing to the industry's historic growth during his tenure, which currently stands at $180 billion in new capital investment and 300 new industry projects including new manufacturing facilities, expansions and restarts of sites that had been shuttered during the economic downturn.
In 2016, Dooley was recognized as one of the most influential lobbyists in Washington by The Hill magazine. His effectiveness stems from the relationships he built during his 12 years as in the U.S. House of Representatives. As a moderate Democrat representing Central California from 1991 to 2004, he served on the House Agriculture Committee, as well as the House Resources Committee.
"During his time in Congress and in his current role, Cal has built a reputation as a pragmatic, pro-business moderate, whose personal integrity commands the respect of federal regulators and legislators on both sides of the aisle," said Pappas.
A fourth generation farmer, Dooley holds a bachelor's degree in agricultural economics from the University of California, Davis and, as a Sloan Fellow, earned a master's degree in management from Stanford University.
About the Chemical Industry Medal
The Chemical Industry Medal has been awarded by SCI America for more than 85 years. Presentation is made annually to a recipient selected by the Executive Committee of the America Section of the SCI. The Chemical Industry Medal is a testimonial to men and women whose leadership, foresight and contributions to applied chemistry have been, to a considerable degree, responsible for the growth of that industry. The medal has attained distinction by reason of the outstanding achievements and caliber of those who have been honored. Past recipients include Sunil Kumar, Andrew N. Liveris, David N. Weidman, J. Brian Ferguson, Michael E. Campbell, and Jeffrey M. Lipton.About SCI
SCI America, launched in 1894, is part of the Society of Chemical Industry's international organization. It provides a unique networking forum for chemical industry leaders, industrial scientists and technologists to exchange new business ideas and best practices. It celebrates achievement to promote public awareness of the contributions of industrial chemistry and inspire students to enter technical careers. SCI America section also offers its members the opportunity to become part of an international network of industry thought leaders and researchers. Through specialized conferences, e-events, and publications, it helps foster best practices in fields as diverse as fine and commodity chemicals, food, pharmaceuticals, biotechnology, agriculture, and environmental protection. For more information, visit SCI America's website: www.sci-america.org.SCI America events are managed by Chemical Heritage Foundation: www.chemheritage.org.
http://markets.businessinsider.com/news/stocks/American-Chemistry-Council-President-and-Chief-Executive-Officer-Cal-Dooley-to-Receive-Prestigious-2018-SCI-Chemical-Industry-Medal-1002222232
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EU Extends Approval for Weed Killer Claimed to Harm Health
Nov 27, 2017 | The Associated Press (In The New York Times)
BRUSSELS — The European Union has approved a five-year extension of the use of the weed killer glyphosate in a move that failed to satisfy both environmentalists and farmers.
After a drawn-out process, the EU backed the extension with a qualified majority and was able to beat a mid-December deadline when the current license expires.
Environmentalists had hoped on an immediate ban since they claim that the weed killer, used in chemical-giant Monsanto's popular Roundup herbicide, is linked to cancer.
Farmers, who say the substance is safe, had wanted a 15-year extension. EU nations long failed to find a compromise amid conflicting health reports.
EU health and food safety Commissioner Vytenis Andriukaitis said that "when we all want to, we are able to share and accept our collective responsibility in decision making."Continue reading the main story
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The European Commission had initially proposed a license extension of 10 years.
One official said that 18 member states voted in favor, 9 against and one abstained.Newsletter Sign UpContinue reading the main storyThe Interpreter Newsletter
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"The decision taken today by a narrow qualified majority of Member States has locked the EU into another five years of toxic agriculture," said Green member of the European Parliament Bart Staes. "This is a dark day for consumers, farmers and the environment."
Environmentalists had been seeking to ban glyphosate, which the World Health Organization's cancer agency said in 2015 is "probably carcinogenic to humans."
Yet, banning glyphosate outright would have shaken Europe's agriculture sector, since it is so widely used.
Despite welcoming the limited extension, the president of the EU's Copa-Cogeca farmer association, Pekka Pesonen, insisted glyphosate "should have been re-authorized for 15 years after it was given a positive assessment by both the European Food Safety Authority and the European Chemicals Agency."
https://www.nytimes.com/aponline/2017/11/27/world/europe/ap-eu-europe-weed-killer-.html
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EU Member States Consider Titanium Dioxide Labelling Issue
| Chemical Watch
The European Commission has asked member state competent authorities to come up with solutions to a titanium dioxide labelling problem, arising from the proposed carcinogenicity classification.
Echa's Risk Assessment Committee (Rac) decided in July that the substance should be classified under EU CLP as a category 2 carcinogen by inhalation.
The toxic effect is specific to the inhalation of small titanium dioxide particles. In its Opinion, the Rac describes it as "particle carcinogenicity".
But the classification, and therefore also the labelling requirements, would apply to all forms of titanium dioxide, and mixtures containing it, including:larger particles;so-called massive forms, in which the substance does not comprise particles at all, but rather distinct, solid blocks; andsuspensions, in which the substance as particles is dispersed evenly through a liquid.
The Commission has concerns because such forms and mixtures may not pose a hazard to human health. Consequently, last week, it asked member state Competent Authorities for REACH and CLP (Caracal) for their views on the application of labelling 'derogations' for them.
A labelling derogation might apply to paints containing titanium dioxide under Annex 1, section 1.3.4 of CLP, if they qualified as mixtures containing polymers or elastomers, the Commission said. But it added that:the derogation would not apply to mixtures containing titanium dioxide if they did not also contain polymers or elastomers;the applicability to borderline cases, such as spray applications, would need to be clarified; andthe derogation would require demonstration that there was no risk to human health by inhalation.
The Commission also said that Article 12 "could be taken into account" to avoid classification of mixtures containing titanium dioxide. This approach would be based on the idea that non-respirable particles do not lead to exposure and therefore there is no bioavailability.
A spokesperson for the Commission told Chemical Watch that the problem was recognised by all the member states, but it would require some creativity. No solution has been arrived at yet.
As an expert group, Caracal has no decision-making responsibility – its role is advisory. Normally, the Commission provides general information about upcoming harmonised classifications. But in the case of titanium dioxide, it decided that wider involvement was needed.
Caracal is likely to discuss a draft amendment to technical progress (ATP) for harmonised classification, at its meeting next March. The final decision will be made by Echa’s REACH Committee, which in most cases signs off harmonised classifications according to Rac Opinions with few changes. Publication of the legislative changes is expected in early 2019, followed by an 18-month transition period.
Caracal members also discussed the possibility of extending the scope of the classification to other poorly soluble low toxicity particles (PSLTs). The Commission spokesperson said that any extension to cover more PSLTs would require a new dossier because the one currently under consideration is specific to titanium dioxide.
https://chemicalwatch.com/62028/eu-member-states-consider-titanium-dioxide-labelling-issue
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OPEC-US Clash for Oil Supremacy Nears Day of Reckoning
Nov 27, 2017 | Chron
By Grant Smith
The clash between OPEC and America's oil industry is reaching a day of reckoning.
The U.S. shale revolution is on course to be the greatest oil and gas boom in history, turning a nation once at the mercy of foreign imports into a global player. That seismic shift shattered the dominance of Saudi Arabia and the OPEC cartel, forcing them into an alliance with long-time rival Russia to keep a grip on world markets.
So far, it's worked -- global oil stockpiles are draining and prices are near two-year highs. But as the Organization of Petroleum Exporting Countries and Russia prepare to meet in Vienna this week to extend production cuts, ministers have little idea how U.S. shale production will respond in 2018.
"The production cuts are effective -- it was absolutely the right decision, and the fact of striking a deal with Russia was crucial," said Paolo Scaroni, vice-chairman of NM Rothschild & Sons and former chief executive officer of Italian oil giant Eni SpA. Nonetheless, "OPEC has not the same power. The U.S. becoming the biggest producer of oil in the world is a dramatic change."
For OPEC members, the stakes couldn't be higher. Saudi Arabia's Crown Prince Mohammed Bin Salman is embarking on a radical economic transformation of the kingdom, including a partial sale of its state oil company that could be the largest public offering in history. Venezuela, reeling from years of recession and a crushing debt burden, is on the brink of political implosion.
Eroding Surplus
The producers' efforts to clear the oil surplus are starting to pay off. They've drained excess inventories in developed nations this year by 183 million barrels, or more than half of the glut, which now stands at about 140 million barrels, according to OPEC data. That has revived London-traded crude futures, which sank below $45 a barrel this summer, to a two-year high of $64.65 on Nov. 7.
Click to read the transcript of a TOPLive Q&A with oil strategist Julian Lee.
That success goes some way to countering accusations that OPEC had lapsed from the dominant market force of the 1970s and 1980s into irrelevance. Although its 14 members still pump 40 percent of the world's oil, their share has dwindled from the days when OPEC held the global economy in thrall.
"People may have thought that OPEC was dead, but Saudi Minister Khalid Al-Falih has succeeded in building agreements and alliances within OPEC and non-OPEC, such as Russia, to restrain production," said Luis Giusti, an adviser at the Center for Strategic and International Studies and former CEO of state-run Petroleos de Venezuela SA.
Losing Momentum
There are even signs that OPEC's opponents, the dozens of drillers tapping shale-oil deposits in Texas and North Dakota, are losing momentum. Companies may have already squeezed costs and maximized productivity as much as possible, and their investors are finally insisting profits are returned to them rather than re-invested in more drilling.
Mark Papa, CEO of Centennial Resource Development Inc. and considered one of the industry's founders, said in September that shale "is not nearly the Big Bad Wolf that everybody thinks."
For a QuickTake on OPEC's challenge, click here.
A year-long ramp-up in drilling by American operators appeared to hit a plateau in July, data from Baker Hughes show, and companies such as Pioneer Natural Resources Co. have lowered their output targets.
The outlook for shale is so clouded that when OPEC officials invited industry experts to brief them on the topic last week, they were disturbed by the diversity of opinions. Veteran crude trader Andy Hall, whose decision to close his main hedge fund this year was partly driven by shale's unpredictability, told the organization that 2018 growth estimates vary from 500,000 barrels a day to 1.7 million a day.
Yet, the basic paradox confronting OPEC is that the more it succeeds in bolstering prices, the more it emboldens shale explorers and other competitors, said Mike Wittner, head of oil market research at Societe Generale SA in New York.
Increases in U.S. oil production next year will be big enough to cancel much of the sacrifices made by OPEC and Russia, leaving the surplus more or less intact, forecasts from the International Energy Agency show. The recent rebound in prices could energize shale even further.
Instead of being able to declare victory next year and restore the production they've halted, OPEC may find itself trapped in an open-ended struggle, Wittner said.
Catch-22
"Now that they're in it, I don't see how they get out of it," said Wittner. "They need to continue supply management for the foreseeable future."
The need to cooperate indefinitely could strain the Saudi-Russia partnership.
While the Saudi-Russia alliance has allowed them to call a "truce in the battle for market share," they may end up fighting over customers again when faced with a relentless tide of crude exports from the U.S., said Ed Morse, head of commodities research at Citigroup Inc. in New York.
With U.S. crude exports climbing from close to zero three years ago to now exceeding the combined shipments of OPEC's smallest members, it increasingly looks as if the face-off between the cartel and what was formerly its biggest customer "has an endgame," Morse said.
"And the endgame is there's an awful lot of shale in the world."
http://www.chron.com/business/energy/article/OPEC-US-clash-for-oil-supremacy-nears-day-of-12386079.php
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LNG Exports Won’t Make Or Break Gas Market, But E&Ps May Benefit
Nov 27, 2017 | Natural Gas Intelligence
By Leticia Gonzales
Vast supplies of low-cost natural gas have put the United States on track to becoming the largest exporter of liquefied natural gas (LNG) within the decade. But before reaching that level of global dominance, a handful of export facilities due to begin service over the next year will provide some much-needed relief to producers in key unconventional plays and serve as a test for a gas market contending with new demand.
Nearly 20 Bcf/d of U.S. approved LNG export facilities are either under construction or waiting to break ground. Already, the United States is exporting roughly 3 Bcf/d of LNG, and that number will grow by more than 1 Bcf/d over the next year as the fourth train at Cheniere Energy Inc.’s Sabine Pass, along with Dominion Resources Inc.’s Dominion Cove Point LNG and Kinder Morgan Inc.’s (KMI) Elba Island LNG facilities enter service.
Still, the new demand won’t make or break the natural gas market. Even with new demand coming from LNG exports, analysts expect weather to remain the key driver for the gas market. Exports, in general, increase baseload demand almost year-round, said RBN Energy gas analyst Sheetal Nasta.
“Of course, we can’t assume they’ll operate at full capacity all the time. So maintenance outages, either on the pipeline or terminal side, could still cause some disruptions/volatility,” Nasta said.
But weather is the key factor the market is watching even as more exports begin commercial service during the height of the winter season. In fact, if the coming winter is a repeat of the last two mild winter seasons, overall demand may not be enough to offset the production growth occurring at the same time, even with incremental LNG export demand.
“Part of why we’ve seen prices go up recently is because we finally had more normal weather in October and in the past week or so, we’ve also seen some much colder-than-normal weather,” Nasta said.
To illustrate how fickle the gas market is, as of Tuesday (Nov. 21), the New York Mercantile Exchange (Nymex) December contract sat at $3.017, more than 20 cents below prices two weeks prior as warming trends in the long-range weather forecasts pressured the market.
For the coming winter, under a scenario where production averages 74-75 Bcf/d, imports are flat to last winter and LNG exports run at full capacity all season, “then you’re going to have 3.5-4.5 Bcf/d more supply in the market this winter than last, and only 3.0 Bcf/d more demand winter on winter,” Nasta said. That includes Mexican exports averaging 4.5 Bcf/d and power, residential/commercial and industrial demand remaining relatively flat to last year.
Meanwhile, 6.0 Bcf/d of new takeaway capacity is coming online this winter, which could boost production even more. The largest among those is Energy Transfer Partners LP’s 3.25 Bcf/d Rover Pipeline, which has begun flowing gas with the second part of the project’s Phase 1 expected online before year’s end.
Columbia Gulf Transmission LLC’s 1 Bcf/d Rayne XPress and Texas Eastern Transmission LP’s (Tetco) Adair Southwest and Access South expansions also have begun service. The in-service date for Columbia Gas Transmission LLC's 1.5 Bcf/d Leach XPress has since been pushed back to January 2018.
Nasta said the market could see a little more demand from exports to Mexico over the next few months too, which could help the market overall.
“But in general, with another mild winter like last year and production near 75 Bcf/d, the balance would be bearish compared to last winter when production averaged only 70.5 Bcf/d. If we get close to normal or below-normal temperatures for much of this winter, however, the balance could end up tightening significantly.”
PA Consulting analyst Michael Bennett agreed that while the market is tight, it also has been waiting for LNG export demand to emerge for years.
“Weather will be and always has been the great unknown with gas markets. 2018 will certainly be a test given that Sabine’s train 4 and Cove Point alone could add an additional 1.2 Bcf/d of demand, but production has started to climb as of late and increased demand could open the door for further production gains,” Bennett said.
However, the high demand experienced to date could foretell what’s to come if cold weather arrives, Bennett said.
“Demand peaked in the upper 90s Bcf/d on Oct. 10, representing some of the highest early winter demand on record,” he said. “This was possible due in part to new export dynamics from both Mexico and LNG. With storage inventories sitting roughly 100 Bcf below the five-year average, a cold winter and this new baseload export demand could result in much larger swings in demand and spot prices.”
If milder temperatures are on tap for the remainder of the winter season, LNG exports would then provide a buffer to prevent a complete fall-out of prices, said BTU Analytics analyst Matthew Hoza.
The Lakewood, CO, analytics company is projecting demand to average 97 Bcf/d this winter, assuming normal weather, “which seems to be a bigger and bigger if,” Hoza said. BTU expects production to average 85 Bcf/d.
Relieving Pennsylvania Takeaway
While LNG exports are not expected to have a material impact on the market immediately, the emergence of new demand should lead to changing dynamics on a regional level, Hoza said. Cheniere’s Sabine Pass facility has the benefit of being located on the Gulf Coast, while Dominion’s Cove Point, for example, would have direct access to the vast supply from the Marcellus and Utica shales.
Cove Point would able to receive gas from Transcontinental Gas Pipe Line Co. (Transco), Dominion and Columbia Gas pipelines, and the project would benefit Appalachian producers, Hoza said, especially once Transco’s Atlantic Sunrise pipeline goes online.
Cabot Oil & Gas Corp. plans to move up to 850 MMcf/d to the terminal via Atlantic Sunrise, but the 1.7 Bcf/d project is not expected in service before mid-2018. The operator is one of a handful of dominant producers active in the bottlenecked northern tier of the Marcellus.
Construction resumed on the project earlier this month after the U.S. Court of Appeals for the District of Columbia denied an emergency motion to stay FERC’s certificate for the expansion. Work was halted for three days while the three-judge panel ordered a temporary administrative stay of the project’s certificate on Nov. 6, forcing Transco parent Williams Partners LP to suspend construction while the court considered an emergency motion filed by a coalition of environmental groups. The court had limited the stay only to construction in Pennsylvania and not other operations outside the state or partial service that was started on the project over the summer.
Atlantic Sunrise would move natural gas from a constrained area in northeastern Pennsylvania to Mid-Atlantic and Southeast markets. Brownfield construction on mainline replacements and equipment modifications started months ago, while greenfield construction started in September.
“Cove Point has said they have other ways to get the gas there, so it’ll be interesting to see how flows evolve there,” Nasta said.
KMI’s Melissa Ruiz, director of corporate communications, said while the gas coming from the Elba Island’s interconnect with Transco is likely to originate from Pennsylvania and Ohio, it could also be sourced from conventional Gulf of Mexico resources off the Transco system through Elba Express Pipeline or from various sources along the Southern Natural Gas (SNG) system.
KMI’s Elba Express Pipeline is a 200-mile system that extends from the Elba Island LNG terminal to the Transco pipeline in Hart County, GA, and Anderson County, SC.
“Transco connects to Elba right near the intersection of Transco zone 4 and zone 5, and I think Transco is still flowing net northbound through part of zone 5, (where the null point on Transco is). Atlantic Sunrise will change that,” Nasta said.
PA’s Bennett agreed, noting backhauls on Transco that would bring Marcellus/Utica supplies to Elba Express may mean that gas would compete with Northeast demand in the winter months. It could present an opportunity for the null point on Transco to swing if Gulf Coast volumes are priced low enough.
Tetco’s Access South can also deliver into SNG. Access South is one of two pipeline reversal projects that Tetco has recently brought online; the other is Adair Southwest. They each target Marcellus/Utica production. Combined, the brownfield projects are designed to add 520,000 Dth/d of incremental north-to-south Appalachian takeaway capacity on Tetco, which runs from the Gulf Coast to the Northeast.
Tetco’s initial in-service request to FERC included 416,000 Dth/d of the total designed capacity [CP16-3]. The pipeline expects to ramp up to 500,000 Dth/d on the expansions later this month.
Exports Won’t Egg E&Ps To Ramp Up
Meanwhile, the growth in LNG exports, particularly on the East Coast, has undoubtedly been a consideration for some E&Ps making their production plans for 2018. While most producers are making decisions based on numerous market dynamics and financial obligations, both Cabot and Antero Resources Corp. have supply contracts with off-takers at the Cove Point facility.
“Unless these producers have enough drilled but uncompleted wells to support an extra 600 [Mcf] or so a day of demand, they have most certainly been preparing for this new demand,” Bennett said.
With Cabot being subscribed to large amount of the Atlantic Sunrise project, the producer can opt to send these molecules to the Atlantic Seaboard and Southeast in the event gas is not needed at the Cove Point, which will put downward pressure on pricing in these regions, he said.
For others producers, however, the recurring theme in most E&P 3Q2017 earnings calls was spending within cash flow.Speaking during the 3Q2017 call, Devon Energy Corp. CEO Dave Hager was blunt. “We fully acknowledge that our industry in general has not delivered acceptable returns. And that we are absolute -- and I would include Devon in it -- we are absolutely committed, on a go-forward basis, to deliver acceptable returns at the corporate level to our shareholders.”
During Southwestern Energy Co.’s 3Q2017 earnings call, CEO Bill Way said the focus is on creating value and improving returns on every dollar it invests.
“We'll take the options of investing at the drillbit and weigh those with debt reduction and any other options that come to the table” to create the highest value-adding plan to go forward,” Way said. This “isn't about production growth at all costs; it hasn't been for us, and it won't be for us going forward. It's an outcome.”
Chesapeake Energy Corp. CFO Nick Dell’Osso echoed those sentiments on third quarter call, indicating the focus continues to be “value versus volumes.” He said the operator would “remain flexible with our capital should prices rise or fall dramatically, but we do not plan to chase capital higher as a result in the recent modest increase in the 2018 strip.”
LNG Exports At A Glance
More than 1 Bcf/d of LNG exports will soon hit the U.S. gas market, laying the groundwork for a major structural shift toward more flexible and globalized gas markets.
Cheniere, the first mover in the Lower 48 for exports, achieved first production at the fourth train of its six-train Sabine Pass in Louisiana last summer. Commissioning cargoes have boosted deliveries to more than 3 Bcf/d. The company is on track for that cargo to see a date of first commercial delivery (DFCD) in the first half of 2018, management said.
For the first five LNG trains at Sabine Pass, 19.75 of the 22.5 million metric tons/year (mmty) nominal production capacity (about 88%) has been contracted to third party, foundation customers on a long-term free-on-board basis under sale and purchase agreements (SPA). Foundation customers include Royal Dutch Shell plc, Gas Natural Fenosa, Korea Gas Corp., Gail (India) Ltd., Total SA and Centrica plc. Any excess capacity not sold under long-term SPAs to foundation customers is available for Cheniere marketing.
During the quarter, Cheniere exported a total of 44 LNG cargoes from Sabine Pass, said CEO Jack Fusco said during the 3Q2017 earnings call. A total of 144 TBtu of LNG was loaded during the quarter, including 18 TBtu of commissioning cargoes. To date, a total of 200 LNG cargoes have been exported from Sabine Pass to 25 of the world's 40 importing countries. Cheniere also is building an export terminal in Corpus Christi, TX.
Meanwhile, Cove Point is underway with commissioning activities in Maryland. The project is nearly completed and in the final phase of start-up, according to Community Relations Manager Karl Neddenien.
“We have completed the initial operating run on our auxiliary boilers, steam turbine generators, Frame 7EA combustion turbines and numerous motors, pumps and compressors that are part of the liquefaction process,” Neddenien said.
The facility, with a capacity of about .75 Bcf/d, would be bidirectional, offering import and export capability. Commercial service at the facility -- the first on the East Coast -- should begin by the end of the year.
Cove Point’s marketed capacity is fully subscribed under 20-year service agreements. Pacific Summit Energy LLC, a U.S. affiliate of Japan's Sumitomo Corp., as well as Gail (India) affiliate Gail Global (USA) LNG LLC, each have contracted for half of the marketed capacity. Sumitomo has agreements to serve Tokyo Gas Co. and Kansai Electric Power Co. Inc.
Finally, KMI, which has partnered with EIG Global Energy Partners, is expecting to bring online its 10-train Elba Island LNG facility beginning in mid-2018. Capacity at the 2.5 mmty facility is fully subscribed by Shell.
“Construction activity at Elba Island is well underway, and the first unit has been completely shipped and delivered to Elba Island and has already been placed on its foundation,” said KMI’s Ruiz.
The Elba Island facility differs from the other U.S. facilities as each of the 10 modular units is rated at about .25 mmty, or 35,000 Mcf/d. Each unit was built in Texas and shipped in components to be erected on site in a sequential manner over one year, with the final unit expected to be placed in service by mid-2019, Ruiz said.
Each of the units is a standalone liquefaction facility that can be erected, commissioned and operated independently. The LNG outflow from each unit would flow into the existing common storage and loading facilities on Elba Island, she said.
“At the time the project was originally conceived, modular liquefaction units such as these were not common; however, in recent times other developers have begun to see the advantages associated with smaller liquefaction units similar to those being installed at Elba,” Ruiz said. “These smaller-type modular liquefaction units provide increased operating flexibility at a competitive cost in the marketplace.”
Indeed, Cheniere in October proposed to FERC a new design for trains 4 and 5 at the Corpus Christi facility, which would instead use seven smaller trains and increase the throughput capacity to 9.5 mmty, or 1.36 mmty at each mid-scale train [No. PF15-26-000]. The original capacities of the proposed trains 4 and 5 were 4.5 mmty each (9 mmty total).
The new design provides an extra 0.5 mmty in total throughput capacity. Trains 1 and 2, currently under construction, fall under stage 1 of development. Stage 2 would add train 3, which is awaiting a final investment decision. The new Stage 3 plan calls for seven mid-scale electric drive trains, as opposed to the natural gas-driven compressors used at Sabine Pass and at the first three trains at Corpus Christi.
Cheniere expects to file its application with the Federal Energy Regulatory Commission early next year, and also plans to update its worldwide free/non-free trade agreements because of increasing the throughput.
In a bullish outlook for the growth of overall U.S. LNG exports by 2024, Mizuho Securities LLC's energy research group said the expansion includes small-scale and mega projects. Smaller facilities are looking to drive down costs significantly, according to analyst Tim Rezvan. U.S. exports are expected hit a projected 53 Bcf/d, or 400 mmty, in 2024, compared to 2016 totals of 34 Bcf/d, or 260 mmty, he said.
"The United States is expected to be competitive in fighting for market share, given the deep inventory of low-cost natural gas available," Rezvan said.
Meanwhile, Sempra Energy’s Cameron LNG project in Hackberry, LA, previously expected to come online next summer, has been pushed to 2019 because of engineering, procurement and construction issues by a principal contractor, Chicago Bridge & Iron Co. NV. During a 3Q2017 earnings conference call, Sempra CEO Debra Reed reiterated that the first three trains would be operating in 2019.
"We firmly believe that from everything we see now that Cameron will be liquefying gas on all three trains come 2019," Reed said. "They've made a lot of progress on construction, and things seem to be going very well,” with little impact from last summer’s Hurricane Harvey.
Export Model Not One-Size-Fits-All
The U.S. LNG export business, still in its infancy, is sure to lead to changes as fundamentals and market conditions change. It’s a major consideration for companies like KMI, who opted to have the facility’s capacity fully subscribed as a means of protecting itself from the fluctuations that could arise in the market.
“Unlike some other developers who do not have their facilities fully subscribed and have decided to participate in LNG market volatility by selling LNG commodity themselves, we have chosen to implement a tolling model which provides us with a low-risk, long-term steady revenue stream associated with a fully subscribed facility,” KMI’s Ruiz said.
Cheniere, meanwhile, not only processes the gas into LNG under a tolling model, the company also procures supply used for feedstock. Once the natural gas is liquefied, the customer takes delivery at the tailgate of the terminal. As a result, Cheniere is expected to become one of the largest buyers of natural gas in the U.S. once all of the trains are operational.
Cheniere’s gas procurement business has secured long-term transportation capacity on many pipelines to ensure reliable gas deliverability and diverse access to multiple producing basins. It also entered into several supply arrangements to purchase natural gas from suppliers at prices discounted to applicable market indices.
With no one-size-fits-all approach in the LNG export business, PA’s Bennett said 2018 is going to be a test for the U.S. LNG market. He likened the LNG market in 2018 to the power market in 2016, when most of the coal retirements resulted from the Environmental Protection Agency’s Mercury and Air Toxics Standards, and Henry Hub pricing around $2.50.
“It was a good test of the new dynamics and baseload shifts in power burn, and the market got a feel for how high burn could actually go,” he said.
Most available information indicates that cargos will be indexed to Henry Hub, which makes hedging easier. Contract holders have typically paid a fixed fee for the right to export LNG, somewhere in the $2-3.50/Mcf range, and then they pay Henry Hub +15% when they actually export gas, Bennett said.
“Depending on the specifics of the offtaker’s contracts at Cove Point and Elba Island, we could see capacity holders decide to sell their gas in the U.S. spot market if regional prices spike high enough. This is especially true for Cove Point, which has direct access to Transco Zone 6 non-NY. Alternatively, we could see those off-takers lift cargos despite spreads to the ultimate destination being negative.”
Most decisions to lift a cargo would be made on a spot basis, he said, assuming the contract holder has no downstream obligations that would make uneconomic netbacks irrelevant. This contract structure is somewhat analogous to firm capacity on natural gas pipelines.
“You pay an upfront fee for the right to move gas, and then pay a small commodity charge when you actually flow volumes, but there is no obligation to move that gas,” Bennett said.
http://www.naturalgasintel.com/articles/112546-lng-exports-wont-make-or-break-gas-market-but-eps-may-benefit
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The Energy 202: The Other Corner of Alaska the GOP Wants to Open Up
Nov 27, 2017 | The Washington Post
By Dino Grandoni
In spearheading their massive tax code rewrite, Republicans have also reopened one of the nation’s long-running environmental fights.
Working with the Trump administration, congressional Republicans led by Sen. Lisa Murkowski (R-Alaska), chairwoman of the Senate Energy and Natural Resources Committee, are seeking to raise revenue by drilling in the Arctic National Wildlife Refuge in the northeast corner of Alaska.The plan pits Murkowski and other Republicans, who believe Arctic energy development can raise money for their tax overhaul that is their top legislative priority, against environmentalists clamoring to protect caribou and other wildlife in the 1.5 million acre section of the 19 million acre refuge from oil and gas drilling.
But the GOP is also seeking to open up another corner of Alaska to industrial development. Their move has nothing to do with the Arctic refuge, and has received considerably less attention.
On page 169 of the 174-page-long appropriations bill funding the Interior Department, the environment and related agencies including the Forest Service, Murkowski has proposed unraveling a plan issued in waning days of the Obama administration to decelerate old-growth logging in the Tongass National Forest. Murkowski is also chair of the appropriations committee making the decisions on Tongass.
At 17 million acres, the Tongass is just a sliver smaller than the Arctic refuge. But that wilderness, taking up the entire southern end of the Alaska Panhandle, is still the largest national forest in the nation, teeming with brown bears, bald eagles and other wildlife.
Unlike ANWR, the Tongass is not untouched. Resource extraction is permitted in the Tongass and other national forests under guidelines spelled out by the government in land management plans.
For decades in the Tongass, loggers have harvested old-growth timber — that is, forests that have not been significantly cut. Heeding the call of scientists and conservationists seeking to preserve dwindling old-growth habitat nationwide, the Forest Service under Obama finalized in late 2016 a plan that phased down old-growth logging in the Tongass. Both in the Tongass and other national forests, the Obama administration took steps to encourage the cutting of “new growth” forests instead.
But old-growth forests are full of high-quality timber, and the economy in southeast Alaska has historically relied on harvests of spruce and other trees from the Tongass. Murkowski's proposal calls for the Forest Service to revise or amend the 2016 plan. If passed, the Forest Service would revert back to a more logger-friendly 2008 plan in the meantime.
“Every sector of the Southeast Alaska economy needs greater access to the Tongass, but this rule failed to provide it,” Murkowski said in a statement in October of the 2016 land management plan for the Tongass.
Environmental groups, some of which felt the Tongass plan issued by the Obama administration didn't go far enough to protect the pristine parts of the forest, criticized the proposal as a giveaway to the logging sector.
"Senator Murkowski is trying to sneak in anti-environmental policy riders into a massive budget bill intended to allow destructive logging of some of the tallest and oldest trees in our national forests," Alex Taurel, deputy legislative director at the League of Conservation Voters, wrote by email. "This activity and the pollution it causes would harm thriving and sustainable local economies such as fishing and tourism."
But in Washington, the Tongass outcry has not been nearly as loud as that over ANWR.
Murkowski seemed to have chosen a subtler path, too.
At the request of the senior senator from Alaska, the Government Accountability Office ruled in October that the 2016 Tongass plan could be undone under the Congressional Review Act.
Earlier this year, congressional Republicans used the once-obscure law to erase more than a dozen Obama-era administrative regulations with just a simple majority in both chambers.
Once signed by President Trump, CRA resolutions prevent the next presidential administration from issuing "substantially similar" rules.
Under the law, Congress has only 60 legislative days to pass such a resolution after the GAO announced its ruling. Despite the permanent protection for the Alaska timber sector such a measure would provide, the Alaska congressional delegation has so far decided to forgo using the Congressional Review Act for the Tongass.
https://www.washingtonpost.com/news/powerpost/paloma/the-energy-202/2017/11/27/the-energy-202-the-other-corner-of-alaska-the-gop-wants-to-open-up/5a1b41e330fb0469e883f835/?utm_term=.95183a3e25b2
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Noble Energy Sells Land Holdings in $340 Million Deal
Nov 27, 2017 | Chron
By Collin Eaton
Noble Energy will collect $340 million in a deal to sell millions of acres of mineral rights and royalty interests in oil-rich land across Texas, Oklahoma, North Dakota and other states to private equity group Black Stone Energy.
The Houston oil producer plans to sell a combined 2.1 million gross acres of mineral rights and royalty interests that will increase Black Stone's footprint in the prolific Permian Basin in West Texas and North Dakota's Bakken Shale, the firm said Monday.
Those assets produce some $34 million a year. Black Stone expects the deal to close on Tuesday.
The private equity firm said it will have some 8,300 net royalty acres in the Midland Basin, and 7,200 in the Delaware Basin, both part of the Permian. In the Bakken, it will gain 10,000 net royalty acres.
http://www.chron.com/business/energy/article/Noble-Energy-sells-land-holdings-in-340-million-12386036.php
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Keystone Spills Larger Than Company Predicted Before it Was Built
Nov 27, 2017 | Reuters (In The Hill)
By Devin Henry
Spills from the Keystone pipeline, including one in South Dakota this month, have exceeded the amount predicted by its developer before the pipeline began operating, Reuters reported Monday.
According to documents reviewed by Reuters, TransCanada Corp. and a risk management company told regulators they estimated the risk of a Keystone leak of more than 50 barrels of oil was “not more than once every seven to 11 years over the entire length of the pipeline in the United States.”
In South Dakota, the firms estimated the pipeline would leak “no more than once every 41 years.”
The Keystone pipeline spilled 5,000 barrels of oil in rural South Dakota earlier this month. It reported previous spills in 2011 and 2016. It began operating in 2010.
The leak came days before the Nebraska Public Service Commission approved a permit allowing a new TransCanada project, the Keystone XL pipeline, to cross the state. Regulators in the state could not factor in previous oil spills because spill prevention and cleanup is considered a federal issue, not a state one.
The Keystone XL project is still subject to legal challenges and federal permitting decisions.
As of Friday, TransCanada had recovered 44,730 gallons of oil from this month’s Keystone leak. At the time, the company said it had 170 people working on site to clean up the spill.
http://thehill.com/policy/energy-environment/361956-keystone-spills-larger-than-company-predicted-before-it-was-built
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Trump Races to Pick Judges Who Oversee Environment Cases
Nov 27, 2017 | E&E ClimateWire
By Robin Bravender and Scott Waldman
President Trump has dismissed global warming as a hoax, snubbed the Paris emissions pact and scrapped U.S. EPA climate rules.
But executive actions can be fleeting — as the Trump administration has shown by moving swiftly to unravel many of President Obama's climate change policies.
Yet there's a major piece of Trump's climate legacy that could be more enduring: his court picks. The Trump administration has acted expeditiously to fill vacancies on top courts around the country, including the Supreme Court and powerful lower courts that could decide the fate of regulatory challenges and novel lawsuits, like localities suing oil companies for damages caused by sea-level rise. Those judges could be weighing in on climate change cases long after Trump leaves 1600 Pennsylvania Ave.
Trump's judicial appointments rank "pretty high" in terms of his climate change legacy, said Glenn Sugameli, who runs the Judging the Environment project, which tracks judicial nominees' environmental records.
"They're the ones that are going to determine whether the actions taken by the Obama administration, by states and local governments are justified, are legal, are sustainable," he said. And "they're the ones that are going to decide whether the actions taken by the Trump administration are legal."
Richard Lazarus, an environmental law expert and professor at Harvard Law School, said courts have played an "outsized role" in climate policy in recent years because regulators are working with an old law to deal with a problem its authors weren't specifically addressing.
"The reason why the courts play a big role right now is that, whether the executive branch is run by [President George W.] Bush or the executive branch is run by Obama, each time they're kind of stuck with old language," Lazarus said, noting that the 1970 Clean Air Act hasn't seen a major overhaul since 1990.
The Obama administration tried to use the existing language to support the administration's signature climate rule, the Clean Power Plan, and "you can expect that Trump judges would be more skeptical of those activities."
Trump has already picked one Supreme Court justice, Neil Gorsuch, a conservative whose appointment was viewed by some as a nail in the coffin for legal efforts to preserve the Clean Power Plan. Court watchers predict Trump may make one or more additional Supreme Court nominations before his term expires.
Legal experts note that judges' opinions in environmental cases won't necessarily fall strictly along ideological lines, but that conservative judges are often more likely to reject arguments calling for more regulation or trying to fit climate change rules within the existing Clean Air Act.
Lazarus pointed to Brett Kavanaugh, a conservative judge on the U.S. Court of Appeals for the District of Columbia Circuit, as an example of a jurist who "is not ready to give EPA a lot of deference if they're taking language which was crafted at one time and trying to push it at the edges to deal with a problem of another time, like climate change." Kavanaugh, a Bush appointee who sits on the court that hears challenges to Clean Air Act rules, became known as a vocal critic of Obama EPA rules.
Kavanaugh's name was tacked on earlier this month to a list of Trump's potential Supreme Court nominees. Trump has touted the fact that the names on his list — some of whom he has already appointed to lower court jobs — have been vetted by "respected conservative leaders."
The judiciary's role over climate policy could change, Lazarus said. "If Congress steps up to the plate, then the courts won't be so significant."
But recent efforts on Capitol Hill to tackle climate change have foundered, and the political polarization in Congress makes the prospects for such controversial legislation dim. So in the near term, executive actions are likely to continue, as are efforts to unravel them in court.
Beyond challenges to federal rulemaking, many of which are resolved in the D.C. Circuit court, there are other climate lawsuits underway across the country that could ultimately be heard by Trump appointees.
In California, for example, a city and two counties are suing oil companies, arguing that the companies' greenhouse gas emissions are pushing sea levels up. In another case at a federal district court in Oregon, a group of kids is suing the federal government over its contributions to climate change.
Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia Law School, said he's also expecting to see "a lot more litigation about fossil fuel extraction, especially on federal lands and waters," as the Trump administration seeks to expand domestic energy production.Can Trump tip ideology?
With widespread vacancies in federal courts at the end of Obama's term and more openings since Trump took office, the administration has the potential to remake the federal judiciary and shape numerous legal decisions related to climate and environmental policy.
Trump has already appointed eight appellate court judges, a rapid pace that's been fueled by the GOP-controlled Senate and pressure from conservative advocacy groups. The administration has focused on longevity over experiences in some cases, ensuring that the judges would shape key legal decisions for years. Brett Talley, 36, was nominated for a federal district court in Alabama even though he has virtually no trial experience.
The swift pace of confirmations is in large part due to a rule change enacted by Democrats when they controlled the Senate and were flustered by efforts to stymie Obama's court picks. In 2013, the Democrats enacted the so-called nuclear option, requiring 51 votes instead of 60 to clear executive branch and some judicial nominees.
Another rule shift in the Senate could signal that Republicans are open to an even quicker approval process that also strips Democrats of what's been their primary leverage in blocking court appointees. The so-called blue slip process allows lawmakers to weigh in on judicial nominees in their states. It was kept in place during the Obama administration, by agreement of Republicans and Democrats. But earlier this month, Senate Judiciary Chairman Chuck Grassley (R-Iowa) threw out the process for some judicial nominees after Sen. Al Franken (D-Minn.) blocked a Trump nominee from his state.
While the pace of appointments is significant, it would likely take years for the Trump administration to equal the influence of the Obama administration, said Jonathan Adler, director of the Center for Business Law and Regulation at the Case Western Reserve University School of Law. He noted that the Obama administration appointed about 40 percent of the federal judiciary in active service. He said if Trump is president for eight years, he could have a similar influence. But it will take years for Trump to tip the ideological balance of the courts, he said.
"What's interesting here is that this administration is moving more aggressively and more quickly than administrations usually do at the beginning of their terms, and that may be a cause or a consequence of the fact that the administration has not been able to do much else, certainly not legislatively," he said. "There is every reason to think this will be a lasting legacy of the Trump administration, but it takes awhile for that effect to really manifest itself."
Still, when Trump was inaugurated, there were more than 110 vacancies on the federal courts, representing about 12 percent of the total judiciary, and the most for any incoming president since Bill Clinton took office, according to Adler.
For now, the effect of Trump's appointments on environmental policy is limited because his appointments have not tipped the balance of liberal and conservative judges in any of the key appeals courts, including the 9th Circuit in California that encompasses Nevada, Oregon, Washington, Idaho, Montana, Alaska, Arizona, Hawaii, Guam and the Northern Mariana Islands. Trump has also not tipped the balance in the 10th Circuit, where federal land cases might be heard, and which includes Utah, Wyoming, Colorado, New Mexico, Kansas and Oklahoma.
The administration has nominated a judge to the D.C. Circuit, which is tremendously influential in federal policy, but that move would replace a conservative with a conservative. The balance on that court still favors Democratic nominees, who make up seven active members of the court compared with four Republicans.
Any shift in the courts toward a more conservative bent on environmental policy would reset the balance of power away from the federal government and back toward the states where it belongs, said Hans von Spakovsky, senior legal fellow at the Heritage Foundation, which has been instrumental in helping the Trump administration shape the courts.
He said EPA and other federal agencies that set environmental policy have exceeded the bounds of their authority in recent years and that the federal role has overshadowed the state role in environmental policy, where the two should be equal. He said Trump's judicial appointments will bring the federal government back inside the bounds of legislation passed by Congress.
"Conservatives, just like liberals, want a clean environment," Spakovsky said. "But we expect federal agencies to act within the authority delegated to them by Congress and to do so in compliance with all applicable laws and regulations. Trump's judges will help make sure that happens."
https://www.eenews.net/climatewire/2017/11/27/stories/1060067245
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D.C. Circuit Grants Former Obama Officials Role in RMP Delay Suit
Nov 27, 2017 | Inside EPA
A federal appeals court has granted former Obama worker safety officials' request to back environmentalist and Democratic state attorneys general in a suit challenging the Trump administration's nearly two-year delay of Obama EPA revisions tightening the Risk Management Plan (RMP) facility accident prevention rule.
In a Nov. 21 order, the U.S. Court of Appeals for the District of Columbia Circuit grants the request from David Michaels and Jordan Barab, the former chief and deputy chief of the Obama Occupational Safety and Health Administration (OSHA), as well as former Chemical Safety Board (CSB) member Beth Rosenberg to participate as amicus curiae in the case, Air Alliance Houston, et al v. EPA, et al.
In the same order, the court also grants a similar request for amici status from the Institute for Policy Integrity at the New York University School of Law, which has faulted the Trump EPA's economic analysis supporting the delay.
Environmental, labor and 11 Democratic state attorneys general are challenging EPA Administrator Scott Pruitt's June 14 rule delaying implementation of the Obama RMP rule by 20 months from June 19, 2017 to Feb. 19, 2019. Pruitt claimed broad Clean Air Act authority to set effective dates after seeking public input, and has signaled that the administration plans to significantly revise the Obama-era rule updating the agency's RMP rule with new requirements.
In a Nov. 1 amicus brief in the case, the former Obama OSHA and CSB officials backed petitioners' arguments that the Trump administration's delay of the RMP rule violates a Clean Air Act limit on delaying effective dates and the Administrative Procedure Act.
“The Delay Rule was not based on analysis of whether the new effective date would fulfill the protective purposes of the Chemical Disaster Rule or was necessary to make industry compliance with its provisions practicable,” the former officials have said. “[R]ather, it was explicitly designed to spare industry the burden of complying or even having to prepare to comply with the rule while EPA reconsidered it.”
The Obama EPA's Jan. 12 final RMP update rule brought new requirements for independent audits, hazard analysis, as well as provisions for streamlining release of facility data to first responders and the public. EPA issued the rule in response to an executive order on improving facility safety issued after an April 2013 fertilizer facility explosion in West, TX, killed 15 people, including first responders.
https://insideepa.com/daily-feed/dc-circuit-grants-former-obama-officials-role-rmp-delay-suit
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