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ACC AM 12/1/17
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(ACC Blog) There To Lend A Helping Hand
Nov 30, 2017 | American Chemistry Matters
By Alexis Schlatre
August and September were marked by three of the largest hurricanes the United States has seen since Hurricane Wilma in 2005. The damage from Hurricanes Harvey, Irma, and Maria are widespread throughout Texas, Florida, and the Caribbean, leaving thousands of people out of their homes and businesses disrupted for weeks. -
EPA Eyes Imported Products’ Release of Flame Retardant
Dec 1, 2017 | BNA Daily Environment Report
By Pat Rizzuto
The EPA wants to figure out whether imported products release a flame retardant that is restricted or banned by some states, an agency attorney said Nov. 29. -
Researchers Link Kids’ Weight Gain to Chemical Exposures
Nov 30, 2017 | Environmental Working Group
By Alexis Temkin
Contact with chemical pollutants during pregnancy and early childhood can lead to unhealthy, excessive weight gain in children, according to a landmark report published in October by the National Institute of Environmental Health Sciences and the Environmental Protection Agency. -
All That Glitter? It’s Not Good, Critics Say
Nov 30, 2017 | The New York Times
By Jacey Fortin
An alarming news item began to make the rounds in November, just in time to ruin the holidays: Glitter is not good for the environment, and some people are trying to ban it. -
Three Years Too Short to Replace Glyphosate, French Farmers Say
Dec 1, 2017 | Reuters (In The New York Times)
By Sybille de La Hamaide
President Emmanuel Macron's promise to rid France of controversial weedkiller glyphosate within three years has left some farmers in the European Union's largest grain producing country on edge. -
U.S. Producers Catching a Break with LNG Export Ramp-Up
Nov 30, 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 should provide some much needed relief to producers in key unconventional plays and serve as a test for a gas market contending with new demand. -
Rising U.S. LNG Exports Boost Interest In Natgas Futures -Traders
Nov 30, 2017 | Reuters
By Scott DiSavino
A surge in speculative interest in the U.S. liquefied natural gas (LNG) export boom has pushed open interest in natural gas futures to an all-time high, traders said on Thursday. -
Commission Seeks Fracking Ban In Watershed Supplying NYC
Nov 30, 2017 | AP (In The Washington Post)
By Marc Levy
A commission that oversees water quality for the watershed that supplies Philadelphia and half of New York City with drinking water took another step Thursday toward permanently banning natural gas drilling and hydraulic fracturing, despite industry opposition. -
Pennsylvania Fracking Permits Target Methane Leaks
Dec 1, 2017 | BNA Daily Environment Report
By Leslie A. Pappas
A plan to reduce methane leaks from hydraulic fracturing operations is generating concern in the natural gas industry, which said the rules behind Pennsylvania's new draft permits lack a scientific basis. -
Fracking Ban Proposed for in Four Delaware River Basin States
Dec 1, 2017 | BNA Daily Environment Report
By Leslie A. Pappas
Fracking would be banned in portions of four states overseen by Delaware River Basin Commission as part of draft regulations unveiled Nov. 30. -
Pipeline Opponents Make Reviews Longer, Energy Regulator Says
Dec 1, 2017 | BNA Daily Environment Report
By Rebecca Kern and Christine Buurma
Increased litigation from pipeline opponents in federal courts is making federal review for natural gas pipelines take longer, Federal Energy Regulatory Commission Chairman Neil Chattejee said. -
State, Local Officials Urge EPA To Adapt RMP Program For CWA Hazards
Nov 30, 2017 | Inside EPA
By Lara Beaven
State and local emergency response officials are urging EPA to drop plans for a voluntary information collection effort intended to inform a Clean Water Act (CWA) rulemaking to prevent and contain chemical spills, saying the agency should instead adapt its existing facility safety Risk Management Plan (RMP) program using existing data. -
Town, Lawmakers Want Action On Rail Cars With Hazardous Cargo
Nov 30, 2017 | VtDigger
By Jim Therrien
The Selectboard will add its voice to those concerned about dozens of Vermont Railway cars carrying propane parked as storage along a rail spur in Bennington. -
EPA Deferral To States' Enforcement May Bolster 'Cooperative Federalism'
Nov 30, 2017 | Inside EPA
By David LaRoss
The Environmental Council of the States' (ECOS) outgoing executive director says a recent EPA letter announcing the agency will defer more heavily to states on enforcement inspections and other work could bolster EPA's push for “cooperative federalism” that seeks to elevate states' authority over environmental protection. -
NOAA Pick Agrees Humans Are 'Main' Cause Of Climate Change
Dec 1, 2017 | Inside EPA
The Trump administration's pick to lead a key agency overseeing climate change science efforts is accepting scientific conclusions that human-released greenhouse gases are the chief cause of climate change, going further on the issue than most administration officials, including EPA Administrator Scott Pruitt. -
Shell Putting Muscle Behind NatGas, Renewables to Slash Carbon Emissions
Nov 30, 2017 | Natural Gas Intelligence
By Carolyn Davis
Royal Dutch Shell plc pledged on Tuesday to continue investing in global natural gas projects while increasing its stakes in renewables as it strives to cut its carbon emissions in half by 2050.
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(ACC Blog) There To Lend A Helping Hand
Nov 30, 2017 | American Chemistry Matters
By Alexis Schlatre
August and September were marked by three of the largest hurricanes the United States has seen since Hurricane Wilma in 2005. The damage from Hurricanes Harvey, Irma, and Maria are widespread throughout Texas, Florida, and the Caribbean, leaving thousands of people out of their homes and businesses disrupted for weeks.
The chlor-alkali industry was significantly impacted due to facility shut-downs all along the Texas Gulf Coast. While the industry worked swiftly to get production back on-line, the first priority was to take care of the families and help them rebuild their homes.
At a time when division and hostility have been commonplace in the public forum, it is heartening to hear stories of people traveling thousands of miles to help folks rebuild. Louisiana’s own Cajun Navy joined in as dozens of private boat owners loaded up their rigs with supplies and headed toward the destruction. Similar efforts have been waged by organizations and businesses throughout the country, including many of the chlor-alkali manufacturers and producers who have rallied around their families and surrounding communities in both Texas and Florida.
Occidental Chemical Corporation estimates that nearly 400 of its employees were affected by the hurricanes. It immediately put together assistance programs to help those in need, including a Disaster Relief Program, providing up to $5,000 in tax-free reimbursements, a corporate-matching Employee Relief Fund, and interest-free loans of up to $10,000. Additional supplies, such as generators, dehumidifiers and food, were donated, along with temporary housing, short-term transportation, and thousands of employee volunteer hours.
Judith Nordgren, Chairman of Solutions Through Science and Managing Director of the American Chemistry Council’s Chlorine Chemistry Division (CCD), said these efforts are part of what makes the environment at these facilities so familial.
“It’s part of the nature of plant work to train and prepare for these types of events because safety is always the number one concern,” she said. “So, when communities are in need, it is natural for the facilities and their employees to step in to help.”
Olin Corporation directly put to use the chlorine it manufactures by donating 15,000 gallons of bleach and $250,000 to the Greater Houston Area Chapter of the American Red Cross, which represents Brazoria County where its Freeport operations are located. Many of the company’s Freeport and Houston employees were personally impacted by the hurricane and flooding. There are countless stories of employees who stepped up, helped out and simply got the job done – both in facilities and in the communities – during incredibly difficult circumstances. Olin also delivered essentials, such as food, water, dehumidifiers, generators and, of course, bleach to each of them.
In a similar vein, the American Chemistry Council’s CCD worked with the U.S. Conference of Mayors and the Mayor’s Office of the City of Houston to distribute 18,400 gallons of bleach to citizens throughout the greater Houston area. Additionally, they are partnering with World Vision, a global humanitarian organization, to donate 13,000 gallons of bleach to help with relief efforts in the southeastern United States and Puerto Rico. These donations will help those hit by Maria in Puerto Rico, Irma in Florida, as well as those still in need in Texas following Harvey.
BASF Corporation gave a significant financial contribution to help with disaster relief across Texas, donating $500,000 which was distributed to local non-profits involved in the rebuilding efforts. It also established a relief fund where BASF employees could make donations to coworkers or local organizations that were matched by the corporation up to $500,000. In addition, BASF provided employees with financial support, temporary housing and numerous supplies.
Outside of the U.S., the devastation from Irma in Haiti has resulted in the Southeast Clean Water Project’s calcium hypochlorite tablets to be diverted to emergency relief efforts, instead of sustaining clean drinking water systems recently established in the country. To replenish the depleted supply, Lonza has agreed to donate 6,100 pounds of calcium hypochlorite tablets.
“We are proud of how our industry has responded both to its employee families and the communities at large,” Nordgren said. “We expect these efforts will continue until the last vestiges of Hurricanes Harvey, Irma and Maria are mended. It demonstrates, yet again, the caring relationship we have with the people we live and work alongside.”
Alexis Schlatre is the executive director for Solutions Through Science (STS). STS is a partnership of the chlor-alkali producers and users in the state of Louisiana. Its mission is to promote the benefits of chlorine chemistry and its many products through educational outreach and issues management.
This article originally appeared on the Solutions Through Science website on November 17, 2017. It was re-posted here with the author’s permission.
https://blog.americanchemistry.com/2017/11/there-to-lend-a-helping-hand/
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EPA Eyes Imported Products’ Release of Flame Retardant
Dec 1, 2017 | BNA Daily Environment Report
By Pat Rizzuto
The EPA wants to figure out whether imported products release a flame retardant that is restricted or banned by some states, an agency attorney said Nov. 29.
“We're trying to get a handle on what imported articles have it in them,” Cindy Wheeler, an attorney adviser for the Environmental Protection Agency's chemicals office, said.
She briefed an EPA advisory committee Nov. 29 on the status of the agency's review of decabromodiphenyl ether (decaBDE), used as a flame retardant in textiles, plastics, wiring insulation, and building and construction materials, and four other chemicals the EPA is probing for possible restrictions.
DecaBDE and the other chemicals qualified for expedited regulatory review under the Toxic Substances Control Act amendments of 2016 because:
• they take a long time to break down in the environment or in human bodies,
• they bioaccumulate, meaning concentrations increase as they move up the food chain, and
• they could harm human health or the environment if exposure is sufficient.
The TSCA amendments require the EPA to propose a rule to reduce risks and exposures from the chemicals no later than June 2019, with a final rule 18 months later.Why Imports?
DecaBDE is getting attention because U.S. producers and the largest importer of the flame retardant agreed in 2009 to voluntarily stop making or importing it, Wheeler said. Several states including Maine, Maryland, Minnesota, Oregon, Vermont, and Washington, have already banned some or all uses of the chemical.
Use and exposure information the EPA released in August showed the total volume of the DecaBDE chemical itself that was made and imported in the U.S. has dropped from 16.69 million pounds in 2012 to less than 25,000 pounds in 2015.
Yet 26 industrial sites reported total releases of 211,498 pounds of the flame retardant that same year, suggesting that domestic stockpiles or imports could be the source of those releases.
Environmental organizations have reported finding the flame retardant in products sold in Washington state, where it is banned, Wheeler said. The agency, therefore, thinks imported products may be an important source of U.S. exposures, which could affect children's developing nervous systems, she said.Albemarle Chemicals, a maker of flame retardants, did not immediately respond to Bloomberg Environment's request for comment.
Substitution Success
“DecaBDE is an example of a successful replacement project,” Linda Thomas, chemical risk integration leader for the Boeing Co., said Nov. 30. It was used, for example, in materials inside planes to slow the spread of fires, she said at a meeting on environmental research that could affect the Department of Defense and the industries on which it depends.
Boeing started looking for decaBDE replacements about 15 years ago, Thomas said. By working with the EPA and suppliers, Boeing “managed to find replacements for all our applications. We finished three or four years ago.”
Five Chemicals
The five chemicals that qualified for expedited regulatory review and the docket numbers to submit information are:
• decaBDE (CAS No. 1163-19-5), Docket ID No. EPA-HQ-OPPT-2016-0724,
• hexachlorobutadiene (HCBD; CAS No. 87-68-3), used as a solvent to make rubber compounds and as hydraulic, heat transfer, or transformer fluid; Docket ID No. EPA-HQ-OPPT-2016-0738,
• pentachlorothiophenol (PCTP; CAS No.133-49-3), used to make rubber more pliable; Docket ID No. EPA-HQ-OPPT-2016-0739,
• phenol, isopropylated, phosphate (3:1; CAS No. 68937-41-7), used as a flame retardant in consumer products and as a lubricant, hydraulic fluid, and in other industrial uses; Docket ID No. EPA-HQ-OPPT-2016-0730, and
• 2,4,6-tris(tert-butyl) phenol (CAS No. 732-26-3), an antioxidant that can be used as a fuel, oil, gasoline or lubricant additive; Docket ID No. EPA-HQ-OPPT-2016-0734.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124387407&vname=dennotallissues&fn=124387407&jd=124387407
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Researchers Link Kids’ Weight Gain to Chemical Exposures
Nov 30, 2017 | Environmental Working Group
By Alexis Temkin
It’s not just a poor diet and lack of exercise that can make kids overweight.
Contact with chemical pollutants during pregnancy and early childhood can lead to unhealthy, excessive weight gain in children, according to a landmark report published in October by the National Institute of Environmental Health Sciences and the Environmental Protection Agency.
Chemicals that have been linked to childhood weight gain include bisphenol A, or BPA,widely used in food packaging; hormone-disrupting phthalates, used in consumer products from cosmetics to food wraps; and automobile exhaust.
In recent years, studies from researchers at the University of California, Berkeley, Columbia University, and the University of Michigan reported that 7-to-9-year-old children exposed to higher levels of bisphenol A, a common food packaging ingredient, had increased amounts of body fat.
Dr. Lori Hoepner, an investigator at the Columbia University Center for Children’s Environmental Health and the lead author of the 2016 study, told EWG the findings “suggest that prenatal BPA exposure may contribute to developmental origins of obesity.” She said she hopes “the results from this study can be used by decision-makers to drive policy to regulate exposures to BPA.”
Air pollutants that come from car exhaust and coal power plants also increase the risk of excessive weight gain. Scientists at the University of Southern California found that children 8 and 18 years old who live near roadways have an increased body mass index.And a Columbia University study found that children of mothers with greater exposure to polycyclic aromatic hydrocarbons, or PAHs – air pollutants that cause obesity in mice and come from fossil fuels or cooking food on a grill – have a greater body mass index and body fat percentage, compared to children of women who experienced lower levels of exposure.
Weight management and healthy metabolism are regulated by a fine-tuned hormonal network that orchestrates communication between the brain and other organs. Research shows that many chemical pollutants – and ingredients in everyday household products – can mimic or block hormonal activities, promoting weight gain or changing metabolism. Increasingly, scientists sound the alarm that these chemicals, called obesogens or metabolic disruptors, can harm children’s health in ways that other risk factors such as genetics, nutrition and exercise do not fully explain.
Avoiding obesogens can be surprisingly difficult, since research has identified several food additives and common food contaminants as probable obesogens. As EWG reported, BHT, a food additive, and PFOA, a chemical formerly used to make Teflon that contaminates the blood of virtually all Americans, both act to damage hormonal communication between the gut and the brain, increasing the risk of obesity.
While earning my doctorate, I studied the possibility that a common food additive, dioctyl sodium sulfosuccinate or DOSS, may be an obesogen. I was surprised when I discovered this chemical increases fat accumulation in cells, and was even more alarmed when I realized how commonly DOSS is used in food and everyday products.
Recently, other chemicals like DOSS, used as emulsifiers or thickeners in foods like ice cream and powdered beverages, were found to increase obesity and metabolic disruption in mice. I realized that when these chemicals were approved for use in food, their effect on obesity was never evaluated.
According the Centers for Disease Control and Prevention, about one in six American children are obese. Unhealthy weight during childhood can lead to serious health complications later in life, including diabetes and heart disease, the leading cause of death for U.S. adults.
For Hispanic and African American children, obesity rates are alarmingly higher, accompanied by greater incidence of diabetes and metabolic problems. In an analysis published in the November issue of Diabetes Care, University of Illinois researchers wrote that disparities in environmental exposures to endocrine-disrupting chemicals could contribute to increased risk of diabetes. They concluded that minority populations often have greater exposure to pollutants that promote obesity and diabetes.
The Environmental Protection Agency and Food and Drug Administration should incorporate research on obesogens into their assessments of toxic chemicals. Until then,families can take simple steps, such as making home-cooked meals instead of serving processed and packaged foods that can carry heavy loads of hormone-disrupting chemicals.
For more information about ways to avoid endocrine-disrupting chemicals like obesogens in food, see EWG’s Dirty Dozen Endocrine Disruptors report.
https://www.ewg.org/news-and-analysis/2017/11/researchers-link-kids-weight-gain-chemical-exposures#.WiEpwfmWZ3g
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All That Glitter? It’s Not Good, Critics Say
Nov 30, 2017 | The New York Times
By Jacey Fortin
An alarming news item began to make the rounds in November, just in time to ruin the holidays: Glitter is not good for the environment, and some people are trying to ban it.
It’s partly true. Some scientists are talking more about the dangers posed by the sparkles used in children’s crafts and some cosmetics. Most glitter is made with plastic, and when it drifts into a landfill or down a drain, it can become a microplastic pollutant. Those small pieces of plastic are not always caught by water filters, so they seep into oceans, lakes and rivers.
But if you want to make a shimmering snowflake for the holidays this year, don’t worry. You won’t be on the wrong side of the law.
People are still using glitter for celebration. And for revenge. And for protest: Gay rights activists have glitter-bombed conservative politicians including Rick Santorum, Michele Bachmann and Newt Gingrich.
The latest “glitter ban” hubbub appears to have been prompted by Tops Day Nurseries, a British child care provider. In a Nov. 16 blog post, the nursery chain said that the more than 2,000 children under its care would no longer be using plastic craft glitter.
“Glitter enters the environment by landfill, through the air being blown around,” it said. “It sticks to people’s hands and goes down the sink into the water system, it sticks to people’s clothes or mops, which go through the washing machine, and out into the water system.”Continue reading the main storyRELATED COVERAGETRILOBITESCorals May Have a Taste for Dangerous Plastic OCT. 31, 2017Miles From Flint, Residents Turn Off Taps in New Water Crisis NOV. 24, 2017WEALTH MATTERSRare Necklaces and Rings Are Items to Appreciate. Just Ask Investors. SEPT. 22, 2017
Sue Kinsey, the senior pollution policy officer for the Marine Conservation Society, a charity based in the United Kingdom, said she was happy to see citizens taking steps to protect the environment, but she would not encourage legislators to ban craft glitter in the United Kingdom.
“That would possibly be a little bit draconian,” she said.
British lawmakers are, however, working now to phase out something similar to glitter: microbeads, those little plastic particles that are used as exfoliants in cleansing products. And in 2015, the United States also passed a law to phase out microbeads.
But has the National Oceanic and Atmospheric Administration, which helped lawmakers shape that legislation, ever paid special attention to glitter alone?
“Not specifically,” said Amy V. Uhrin, the chief scientist of NOAA’s Marine Debris Division, adding that news reports in recent weeks had brought the issue to her attention. “Because it is a microplastic, we would have the same concerns as we would with any other microplastic that ends up in the environment.”
Joel Baker, a marine pollution expert at the University of Washington at Tacoma, said glitter was just one of the many, many types of plastics that pollute waterways. But one thing sets it apart from other pollutants: It sticks around, conspicuously, in the most unwanted places.
“A little bit of glitter goes a long way. Weeks after a kid’s birthday party, there’s still glitter all over your car,” he said.
So maybe that’s a reason to ban the sparkly stuff.
“Could we have had a happy childhood without glitter? Yes,” said Sherri A. Mason, the geology and environmental sciences department chairwoman at the State University of New York in Fredonia, who has done extensive research on plastic pollution in freshwater.
She said that glitter, like any other plastic particles, can carry chemicals that are ingested by small creatures and then make their way up the food chain.
But consumers who want to cut down on microplastic waste don’t have to lead a dull existence, because all that glitters is not plastic. You can make sparkly stuff out of degradable materials, and some companies have startedto do just that.
Dr. Mason said that while plastic glitter is popular around the holidays, it’s not necessary. “Yes, there are going to be pains associated with reducing our use of plastic, but we have to think beyond ourselves,” she added. “This isn’t about your New Year’s celebration. It’s about humanity, and our ability to survive as a species.”
https://www.nytimes.com/2017/11/30/style/glitter-ban.html?smid=fb-nytimes&smtyp=cur&_r=0
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Three Years Too Short to Replace Glyphosate, French Farmers Say
Dec 1, 2017 | Reuters (In The New York Times)
By Sybille de La Hamaide
President Emmanuel Macron's promise to rid France of controversial weedkiller glyphosate within three years has left some farmers in the European Union's largest grain producing country on edge.
After intense debate, the EU this week cleared U.S.-developed glyphosate for another five years despite concerns that the most widely used pesticide in the world can cause cancer.
EU rules allow France to unilaterally ban the substance, however, an approach Macron has decided to take. He has given farmers and researchers three years to come up with an alternative.
"Three years is too short," said Herve Fouassier, 45, who runs a 200-hectare farm in Loiret, south of Paris.
Like French farm unions, Fouassier does not believe a solution can be found in time.
"We are ready to hear the wishes of society which wants less use of crop protection products, but give us a little time to adapt," he said, standing in a mustard field treated with glyphosate.Continue reading the main story
French crop growers said this week even five years is insufficient time because there is currently no alternative economically and environmentally viable alternative to the weedkiller.
Glyphosate was developed by U.S. chemical maker Monsanto under the brand Roundup. It is now off-patent and marketed worldwide by dozens of other chemical groups including Syngenta and Dow Agrosciences.
Glyphosate's worldwide success is linked to its low cost; farmers can kill weeds by spraying the chemical on their fields instead of ploughing the soil several times to remove weeds.
It has also attracted gardeners, public park managers and railway operators, intent on getting rid of unwanted grasses. It is so widely used that manufacturers say glyphosate covers a third of French farmland.
Concerns about its safety emerged when a World Health Organization agency concluded in 2015 that it probably causes cancer.
Other groups, such as the European Chemicals Agency, have since disputed those findings, saying there is no evidence linking glyphosate to cancer in humans. But worries persist.
ISOLATED
In rocky soils or where weeds are deeply rooted, farmers say it would be too hard to do without it and that fields would have to be left fallow. Farmers must wear a protective mask, apron and gloves when spraying the chemical.
They also fear that if a cheap alternative is not found before the deadline, France will be isolated in the EU, where competitors will be allowed to use glyphosate for another two years, and against larger producers such as the United States or those in Latin America, where it is widely used.
The ban could cost the French grains sector 1.1 billion euros ($1.3 billion) and 900 million euros for wine makers because of lower yields and exports, polling firm Ipsos found in a study commissioned by glyphosate makers.
Marc Leprince, 34, who manages a 210-hectare farm in the Beauce grain region, is less concerned.
He grows half of his output following organic rules and the rest in conventional farming, all without using glyphosate.
Leprince uses long crop rotations, increased varieties and weeds mechanically and manually, techniques which increase costs. But he believes it's worth it for his own health and that of consumers.
"What consumers must realise is that food will be more expensive because costs linked to these techniques will need to be reflected in the price of the end products," he said, referring to the likely impact of the glyphosate ban.
https://www.nytimes.com/reuters/2017/12/01/world/europe/01reuters-eu-health-glyphosate-france.html
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U.S. Producers Catching a Break with LNG Export Ramp-Up
Nov 30, 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 should 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 is forecast to 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.
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. The December contract went on to expire on Tuesday (Nov. 28) at $3.074.
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 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.
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 in November 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 was expected to ramp up to 500,000 Dth/d on the expansions in late November.
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 exploration and production (E&P) companies 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 a 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 is soon to 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 last summer at the fourth train of its six-train Sabine Pass in Louisiana. 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 third quarter, Cheniere exported a total of 44 LNG cargoes from Sabine Pass, said CEO Jack Fusco said during the 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 was nearly done in November 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 it 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 off-taker’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/112588-us-producers-catching-a-break-with-lng-export-ramp-up
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Rising U.S. LNG Exports Boost Interest In Natgas Futures -Traders
Nov 30, 2017 | Reuters
By Scott DiSavino
Nov 30 (Reuters) - A surge in speculative interest in the U.S. liquefied natural gas (LNG) export boom has pushed open interest in natural gas futures to an all-time high, traders said on Thursday.
Open interest, which measures the number of contracts outstanding, in the Henry Hub front-month hit 386,826 on the New York Mercantile Exchange on Wednesday, topping the previous high of 366,383 set in May 2016, according to Reuters data going back to 1990.
“There has been a narrative around the market that the LNG exports are going to be the difference maker this winter, in terms of getting supplies tight and prices higher,” said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.
“The thesis is attracting a lot of interest,” he said, noting “the 11-15 day weather models recently exploded, forecasting a fierce cold air mass by mid-month December. The fuse appears lit.”
Futures for calendar 2018 have been trading at a premium over calendar 2019 since August 2016 due primarily to expectations of rising exports next year.
The United States is expected to be a net gas exporter on an annual basis in 2017 for the first time in 60 years, due in part to sharp growth in LNG shipments abroad.
The country, which was not exporting any LNG at the start of 2016, is expected to have the world’s third-biggest export capacity of the fuel by the end of 2018, behind only current market leaders Australia and Kuwait.
That rapid growth in LNG exports was due to the ramp up of four 0.6-billion cubic feet per day (bcfd) liquefaction trains at Cheniere Energy Inc’s Sabine Pass LNG export facility in Louisiana over the past two years. The first of those trains entered service in February 2016.
By the end of the year, another LNG export facility is expected to join Sabine Pass when Dominion Energy Inc’s 0.7-bcfd Cove Point terminal in Maryland enters service.
In 2018, three more U.S. liquefaction trains are expected to enter service - a 0.3-bcfd unit at Kinder Morgan Inc’s Elba Island facility in Georgia, a 0.7-bcfd unit at Freeport LNG’s Freeport facility in Texas and a 0.6-bcfd unit at Cheniere’s Corpus Christi facility in Texas.
https://www.reuters.com/article/usa-natgas-lng-futures/rising-u-s-lng-exports-boost-interest-in-natgas-futures-traders-idUSL1N1O016C
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Commission Seeks Fracking Ban In Watershed Supplying NYC
Nov 30, 2017 | AP (In The Washington Post)
By Marc Levy
HARRISBURG, Pa. — A commission that oversees water quality for the watershed that supplies Philadelphia and half of New York City with drinking water took another step Thursday toward permanently banning natural gas drilling and hydraulic fracturing, despite industry opposition.
The Delaware River Basin Commission’s newly published draft regulations would enact a formal ban on fracking, as well as put additional restrictions to make it harder, if not impossible, for the industry to dispose wastewater within the watershed or use water from the river and its tributaries for fracking outside the basin.
It scheduled four hearings in January and a public comment period through Feb. 28, with a final vote possible next year. The area supplies drinking water to 15 million people.
The decade-old drilling boom in the Marcellus Shale natural gas reservoir — which lies beneath much of Pennsylvania and extends into New York — has put pressure on the Delaware River basin to allow exploration and fracking, the technique that’s spurred a U.S. production renaissance in shale gas and oil.
New York banned horizontal drilling and hydraulic fracturing statewide in 2015, while more than 10,000 Marcellus Shale wells drilled in Pennsylvania has rocketed the state to within striking distance of Texas to becoming the nation’s No. 1 natural gas producer.
The commission imposed a moratorium on drilling and fracking in 2010, preventing the industry from developing its acreage in the Delaware watershed. It voted 3-1, with one abstention, in September to begin the lengthy process of enacting a formal ban on drilling and fracking.
A commission spokesman said Thursday he was not aware of any case where the industry had even applied to draw water from the watershed for use in fracking or to import its wastewater to a treatment facility inside the basin.
David Masur, the director of Philadelphia-based PennEnvironment, an environmental advocacy group, said he supported the new regulations and suggested that the tighter restrictions would ensure the basin’s water is off-limits to the exploration industry.
“Since they have plenty of other places to get their water and dump their wastewater, why would they go through this process?” Masur said.
Jeff Tittel, the director of the New Jersey Sierra Club, said the draft regulations still leave the possibility that the industry could draw water or return it to the basin as wastewater, and he opposes that.
“We don’t want the threat of wastewater or the removal of precious water, and we’ll keep fighting to get the regulations that way,” Tittel said.
The industry has opposed the fracking ban.
In a statement, David Spigelmyer, the president of the Pennsylvania-based Marcellus Shale Coalition, a trade association, said the proposed regulations “amount to a taking and deny Pennsylvania citizens the right to develop their own property rights. It flies in the face of settled science and common sense environmental regulation, and would bring self-inflicted economic harm to the commonwealth.”
The commission noted that drilling wastewater discharged through domestic wastewater treatment facilities in the past — such as in Pennsylvania — has caused elevated concentrations of chloride and bromide in receiving waterways.
Though not considered a pollutant by themselves, the bromides combine with the chlorine used in water treatment to produce trihalomethanes, which can cause cancer if ingested over a long period of time, researchers say.
In fracking, large volumes of water, along with sand and chemicals, are injected underground to break rock apart and free oil and gas.
For now, three Democratic state governors represented on the commission — Pennsylvania, Delaware and New York — support the ban in the basin. New Jersey’s election of Phil Murphy, a Democrat, will make it a fourth governor who supports the ban when Murphy is inaugurated in January.
A representative of Republican New Jersey Gov. Chris Christie abstained in September’s vote, and a U.S. Army Corps of Engineers officer, representing GOP President Donald Trump, voted against the ban.
https://www.washingtonpost.com/national/energy-environment/commission-seeks-fracking-ban-in-watershed-supplying-nyc/2017/11/30/8fa4902c-d62c-11e7-9ad9-ca0619edfa05_story.html?utm_term=.4e00f5fb0136
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Pennsylvania Fracking Permits Target Methane Leaks
Dec 1, 2017 | BNA Daily Environment Report
By Leslie A. Pappas
A plan to reduce methane leaks from hydraulic fracturing operations is generating concern in the natural gas industry, which said the rules behind Pennsylvania's new draft permits lack a scientific basis.
The permits—issued Nov. 30 by the Pennsylvania Department of Environmental Protection in a draft final form—are part of the commonwealth's strategy to cut overall methane emissions, the second-most prevalent greenhouse gas released in the U.S. from human activities, according to the Environmental Protection Agency.
“These general permits are the first in the nation to establish a threshold to control methane emissions from well sites and from compressor stations,” DEP Secretary Patrick McDonnell said in a webinar explaining the new permits. Compressor stations are pressurized pipeline transit hubs that keep the gas flowing smoothly along the pipeline network from the wellhead to its final destination.
The industry has a long and clear record of utilizing best practices and cutting-edge technologies to capture methane, said president of the Marcellus Shale Coalition David Spigelmyer, who questioned the need for the permits.
“While we remain concerned about the use of permits to regulate a proposed methane limit that has no scientific basis, we do welcome the opportunity to work with DEP to address serious concerns our industry has with regard to permitting and regulatory certainty,” Spigelmyer said in a statement to Bloomberg Environment.
The general permits would apply only to new unconventional natural gas wells, which use horizontal drilling or hydraulic fracturing to unlock gas buried deep inside shale rock formation. Companies that frack Pennsylvania's Marcellus Shale, such as Range Resources Corp., Chesapeake Energy Corp., Cabot Oil & Gas Corp., and EQT Corp., would have to get the new permit for every new well they drill.
Requiring Checks
Once implemented, the permits will help control methane emissions by requiring operators to regularly check and fix leaks at wells, transmission stations, and along the pipelines, according to the nonprofit Environmental Defense Fund, which called the permits “an important and positive step.”
The updated permits include a general permit called the GP-5, which applies to midstream, gas processing, and natural gas transmission facilities. There also is a new permit called a GP-5A for well sites and pigging stations, where pipeline cleaning and maintenance operations take place.
The permits were first announced in January 2016 and will be presented to the DEP's Air Quality Technical Advisory Committee in December for review, according to McDonnell. Final permits are expected to be formally issued and go into effect in the first quarter of 2018.
Won't Necessarily Hurt Industry
Methane rules will not necessarily hurt the industry, Patrick Von Bargen, executive director of the Washington, D.C.-based Center for Methane Emissions Solutions, told Bloomberg Environment.
Von Bargen's group is a coalition of companies that market products that cut down on methane leaks, ranging from infrared cameras that detect gas plumes to dry seals for valves that cut down on leaks. Von Bargen points to Colorado, which in 2014 implemented a comprehensive framework of regulations to control methane. The industry there is still thriving, he said.
“So we know that you can design regulations that will reduce methane waste that will be cost-effective for gas producers and will allow them to continue to grow.”
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124387423&vname=dennotallissues&fn=124387423&jd=124387423
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Fracking Ban Proposed for in Four Delaware River Basin States
Dec 1, 2017 | BNA Daily Environment Report
By Leslie A. Pappas
Fracking would be banned in portions of four states overseen by Delaware River Basin Commission as part of draft regulations unveiled Nov. 30.
Gas drillers and environmentalists have sparred over the plan for portions of Delaware, New Jersey, New York, and Pennsylvania, with the industry saying the commission is overreaching and activists saying a ban should be full and permanent.
The proposed regulations implementing the ban would prohibit high-volume hydraulic fracturing in shale and other rock formations in the 13,539 square-mile river basin, and would govern the use, management, and disposal of water from fracking operations. If implemented, the rules would make permanent a de facto moratorium on fracking in the basin that has been in place since 2010.
The federal-interstate agency, which oversees water quality in the basin, resolved in September to revive a stalled rulemaking process started in 2010 and put on hold in 2011.
Natural gas drillers have fought the ban, calling it an overreach by the agency. Environmentalists have long pushed for a permanent ban on fracking in the basin, which supplies drinking water to more than 15 million people.
The Marcellus and Utica shale formations are major sources of natural gas and underlie about 40 percent of the watershed in portions of Pennsylvania and New York, the rulemaking notice says.
Four hearings will be held at the end of January in Waymart, Pa., and in Philadelphia, according to a notice posted on the commission website. Written comments will be accepted through Feb. 28, 2018, the DRBC said.
The commission is a five-member agency that includes the governors of Delaware, New Jersey, New York, and Pennsylvania, and a representative from the U.S. Army Corps of Engineers who serves as the federal representative.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124387410&vname=dennotallissues&fn=124387410&jd=124387410
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Pipeline Opponents Make Reviews Longer, Energy Regulator Says
Dec 1, 2017 | BNA Daily Environment Report
By Rebecca Kern and Christine Buurma
Increased litigation from pipeline opponents in federal courts is making federal review for natural gas pipelines take longer, Federal Energy Regulatory Commission Chairman Neil Chattejee said.
Pipeline opponents “are growing more confident in their chances in taking those challenges to the D.C. Circuit, in particular, and other federal appellate courts,” Chatterjee said at the Nov. 30 American Gas Association's Natural Gas Roundtable in Washington.
Chatterjee was referring to the increasing number of lawsuits filed against FERC by environmental groups, including the Sierra Club.
The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg, the ultimate owner of Bloomberg Environment.
The increased litigation has caused FERC “to become even more deliberate in its review processes to ensure that they will withstand judicial review.” But he said the increased litigation also means it takes more time for FERC reviews to be completed.
The Sierra Club has been challenging FERC's approval of natural gas pipelines in increasing numbers because “we're in the middle of an unprecedented build of pipelines and FERC isn't doing its job in adequately reviewing them,” Kelly Martin, the group's director of its Beyond Dirty Fuels Campaign, said.
“We want them to do a more thorough review of individual impacts and more cumulative impacts, and we don't to see fracked-gas pipelines approved in such a rushed-out way,” she told Bloomberg Environment.
She said if FERC has a more deliberative review, that “hopefully means that there would then be a better outcome for protecting our air and water, and climate, and also protecting consumers.”
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124387434&vname=dennotallissues&fn=124387434&jd=124387434
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State, Local Officials Urge EPA To Adapt RMP Program For CWA Hazards
Nov 30, 2017 | Inside EPA
By Lara Beaven
State and local emergency response officials are urging EPA to drop plans for a voluntary information collection effort intended to inform a Clean Water Act (CWA) rulemaking to prevent and contain chemical spills, saying the agency should instead adapt its existing facility safety Risk Management Plan (RMP) program using existing data.
In recent comments on a proposed EPA voluntary information collection request (ICR), the National Association of SARA Title III Program Officials (NASTTPO), says, “Quite honestly, we believe this ICR is pointless.”
The officials are arguing that EPA can achieve the goals of preventing spills of hazardous chemicals under its existing RMP, a program that the Obama administration revised in order to tighten its facility safety requirements. But Trump EPA Administrator Scott Pruitt has paused those changes while he weighs whether to pare back the new mandates. For now, the prior RMP safety program remains in effect and that is the program the officials are citing.
The effort stems from a settlement EPA reached with environmentalists in Environmental Justice Health Alliance (EJHA), et al. v. EPA earlier this year that set deadlines for the agency to propose and finalize CWA regulations to prevent and contain chemical spills from above-ground tanks at industrial facilities, such as the massive 2014 spill of a hazardous substance that contaminated drinking water in West Virginia. The settlement allows EPA to extend the deadlines if the agency needs to conduct an ICR to gather more data.
The proposed voluntary survey to be sent to states, tribes and territories would request information about Emergency Planning and Community Right-to-Know Act Tier II facilities.
NASTTPO represents members and staff of state emergency response commissions (SERCs) and local emergency planning committees (LEPCs) as well as private-sector representatives with EPRCA responsibilities. And the group says it recognizes the settlement creates an incentive for EPA to launch an ICR.
“Nonetheless, what this ICR suggests to us is that EPA is not focused on accident prevention, but rather accident response. That approach will not satisfy the requirements of the Clean Water Act nor the Consent Decree in our view,” NASTTPO says in its Nov. 15 comments.
EPA already has access to data about spills and releases from the National Response Center, making it “duplicative and burdensome to ask state agencies to provide EPA with that same information,” NASTTPO says.
The group also says there is no connection between the information in EPCRA Tier II reports that EPA is seeking and the accidental releases of hazardous substances. “Better information on the number of facilities engaged in activities involving hazardous substances is available from the Census Bureau using the North American Industry Classification System. EPA already knows this system well,” NASTTPO says.
'Not Allowed'
Furthermore, NASTTPO says, it is illegal under EPCRA for states to provide the entire Tier II database to EPA or other federal agencies. EPCRA requires facility-specific requests from federal agencies. “As you can plainly see, EPA is asking SERCs to do something that is not allowed under EPCRA.”
Instead, EPA should be focused on accident prevention instead of emergency response, an effort that cannot be effectively done solely within the facility but which needs the support of LEPCs and fire departments, the group says. “In many cases, the best way to accomplish this effort is through good emergency preplanning done in conjunction with local first responders and the LEPC,” NASTTPO says.
“Fortunately, EPA already has experience with an available program focused on accident prevention,” the group says, pointing to the Clean Air Act Section 112(R): Accidental Release Prevention/RMP Rule (RMP). “There is no reason that EPA could not tier the Clean Water Act accident prevention rule just as it did for RMP. There is also no reason that the same accident prevention requirements could not apply under the Clean Water Act. EPA need not invent something new when it can adapt an existing program.”
The existence of the RMP program “also serves to illustrate why the ICR is pointless. EPA has access to the universe of facilities reporting their risk management plans under the RMP regulation today whereas the SERCs and LEPCs generally do not. The RMP includes release history reports,” NASTTPO says.
In other comments, the oil and gas sector also objects to the ICR, with the American Petroleum Institute (API) in Nov. 20 comments saying EPA's spill prevention, control, and countermeasure (SPCC) rules “are sufficient to provide adequate protection against any unplanned release of hazardous substances.”
“An expansion of SPCC regulations to address the lengthy list of substances at 40 CFR 116.4 would potentially be extremely costly and burdensome, with little commensurate benefit to human health and the environment,” API says. Additionally, the “information collected as a result of the voluntary survey will largely duplicate information already submitted to regulatory authorities,” API says.
The American Exploration & Production Council (AXPC) and the Independent Petroleum Association of America (IPAA) in joint Nov. 16 comments also say the existing SPCC rules are sufficiently protective and that the ICR will collect information duplicative of what EPA already has, “reinforcing the sufficiency of the regulations currently in place.”
Additionally, AXPC and IPAA reminds EPA of its stated cooperative federalism policy goal “and the necessity of allowing states to be the stewards of national standards. Further, any expansion of the current SPCC rule not only usurps the states’ regulatory authority, but seems to be at odds with President Trump’s Executive Order 13777, Enforcing the Regulatory Reform Agenda, as the order explicitly directed agencies to identify regulations that are unnecessary or impose costs that exceed benefits.”
'Basic Information'
A coalition of 15 environmental and community groups led by EJHA in Nov. 20 comments says the ICR seeks “basic information necessary to understand the threats hazardous-substance spills pose to our communities,” but the questions do not go far enough.
“EPA should also open a docket to allow other entities to submit information, including best practices for spill prevention, prior to EPA’s issuance of a proposed rule next summer. Taking these additional steps would help ensure EPA has the information it needs to develop a robust proposed rule,” the groups say.
The National Mining Association (NMA) in Nov. 20 comments says it supports the ICR but offers several modifications to the survey.
For example, NMA says, “EPA should remove from consideration those CWA listed hazardous substances that are already regulated as part of an oil mixture pursuant to existing” SPCC regulations. And the mining group “strongly encourages EPA to include a survey question asking states, tribes, and territories to identify which facilities listed as having CWA listed hazardous substances on site already operate pursuant to an SPCC plan.”
The American Forest & Paper Association (AF&PA) in Nov. 20 comments says it understands the value of ICR data in supporting future CWA spill rules. “However, as currently drafted, the survey sets out an overly broad request for information that may already be accessible from other readily available sources. If finalized as drafted, the current survey also would create a significantly onerous request of states to provide responses that would inundate the EPA with information, a large portion of which may not be useful for this effort,” AF&PA says.
https://insideepa.com/daily-news/state-local-officials-urge-epa-adapt-rmp-program-cwa-hazards
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Town, Lawmakers Want Action On Rail Cars With Hazardous Cargo
Nov 30, 2017 | VtDigger
By Jim Therrien
BENNINGTON — The Selectboard will add its voice to those concerned about dozens of Vermont Railway cars carrying propane parked as storage along a rail spur in Bennington.
Rep. Timothy Corcoran II, D-Bennington, a member of the House Committee on Transportation, said Tuesday he’s considering filing similar legislation in that chamber.
After hearing from resident Al Bashevkin during a meeting Monday, the Selectboard asked Town Manager Stuart Hurd to draft a letter to state and federal lawmakers and the governor’s office. The local officials said they understand that railroads are regulated by the federal government, but they believe they should weigh in with their concerns.
Bashevkin said loaded rail cars were parked in the past along the spur line between North Bennington and Bennington, “but now this is hazardous material.”
He said it appears the rail line is “being rented out for storage” by Vermont Railway, which confirmed through a spokesman that the tankers hold propane destined for commercial customers. The intent, the spokesman said, is to avoid propane shortages during severe winter weather.
The black tanker cars reportedly totaled about 80 at one point, stretching both directions from a road crossing. However, a number of the cars recently were moved away from homes near the crossing.
Vermont Railway Vice President Selden Houghton said Monday that the movement of cars was not related to complaints from residents and area lawmakers, but was part of “the normal course of doing business” in supplying commercial customers with propane.
Houghton said he didn’t know whether the area would be again used for storage, adding that “it’s all based on business needs” and on the weather over the winter.
Hurd and Selectboard Chairman Thomas Jacobs noted that the Federal Trade Commission has regulatory jurisdiction over railroads, so the town’s and the state’s leverage concerning the rail tankers could prove limited.
Vermont Railway does operate under a contract with the state, which owns the rail rights of way, Hurd said.
“The problem you run into is, whose jurisdiction is it?” he said.
Jacobs asked for a board resolution to “communicate to the powers that be” the town’s concerns.
“This is not something that is appropriate to a community like ours,” as opposed to a more rural section of track, he said.
Bashevkin asked whether a regulatory line could be drawn between storage of rail cars with nonhazardous material and those with hazardous or flammable contents.
“I’m hopeful there can be a determination that prohibits this kind of storage in the future, but I just don’t know,” Hurd said.Not all notified
Hurd said the railroad did approach the North Bennington and Bennington fire departments to notify them of the storage of a flammable material. Houghton said the railroad also provided training information on how to react to an emergency.
However, Hurd said the railroad didn’t directly notify town government of the situation, which investigated after receiving a complaint.
Shaftsbury Fire Chief Joseph Vadakin, whose town closely borders the area, said in a letter to Campion that he wasn’t notified.
Should the parked tankers catch fire or explode, he said, “the devastation would be incalculable. The loss of life, property and the ecology would be catastrophic.”
Vadakin added, “So to make my point clear, the company has offered no warning that this was going to happen, no training if something were to go wrong.”
Houghton said previously that the rail company has complied with all federal reporting and other requirements and contacted Bennington fire and emergency management personnel.
The parked rail cars also are being monitored, he said, and safety procedures “beyond federal regulations” were put in place by the company.
At the request of Selectboard members, Hurd said he will ask the Bennington fire departments for their assessment of the situation and plans for confronting an emergency involving the tankers.Exploring legislation
“I have reached out to legislative counsel about drafting a bill that would let Vermonters know the contents of such tankers and not allow tankers that contain hazardous materials to be parked anywhere near residential areas,” Campion said this week.
Corcoran said he is exploring what the state can do, given that the railroads are regulated by the federal government, and he’ll try to “piggy back” with any legislation sponsored in the Senate by Campion and Sen. Dick Sears .D-Bennington.
“Obviously, I have some grave concerns about the placement of those cars,” Corcoran said, “and this is something I am looking into.”
Corcoran said he was disappointed that Vermont Railway chose an area near homes to store flammable materials.
“Personally, I just can’t believe where they stored those cars,” he said. “I think you have to have a little common sense.”
Campion, the vice chairman of the Natural Resources and Energy Committee, said the legislative approaches he is exploring include:
• Requiring those subject to the federal Hazardous Materials Transportation Act to submit “registration statements” and “transportation security plans” to Vermont’s secretary of transportation and the commissioner of public safety.
• Requiring the State Emergency Response Commission (or Emergency Management Division) to submit an annual report to the General Assembly that would summarize its activities regarding emergency response training relating to the transportation of hazardous materials.
• Requiring the commission to report the amount in federal grants it has received under HMTA for training; summarize activities that give the commission authority to ensure that a state plan will go into effect when an accident occurs; and describe how the state emergency operations plan addresses coordination with local emergency response plans.
• Instituting civil penalties and criminal fines against individuals in actions brought by the state for failure to comply with requirements of the HMTA.
“We need to get on the offensive,” Campion said. “This situation continues to be very worrisome to me, and we need to do everything we can within our powers as a state to protect our citizens.”
https://vtdigger.org/2017/11/30/town-lawmakers-want-action-on-rail-cars-with-hazardous-cargo/#.WiFBBfmWZ3h
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EPA Deferral To States' Enforcement May Bolster 'Cooperative Federalism'
Nov 30, 2017 | Inside EPA
By David LaRoss
The Environmental Council of the States' (ECOS) outgoing executive director says a recent EPA letter announcing the agency will defer more heavily to states on enforcement inspections and other work could bolster EPA's push for “cooperative federalism” that seeks to elevate states' authority over environmental protection.
During a Nov. 23 interview with Inside EPA, ECOS Executive Director Alexandra Dunn -- recently named as the next regional administrator for the agency's Region 1, but speaking solely in her capacity with the state regulatory group -- said she sees an EPA-ECOS workgroup on cooperative federalism as a venue for “dialogue” such as letters between Missouri's environment head and EPA Region 7 Deputy Administrator Edward Chu where Chu said his office is scaling back its review of state permit decisions.
“The hope is that through this dialogue process, this workgroup with EPA, the regions can have some candid conversations about how we can work together, given that we are going to be -- and already are -- in a time of constrained resources,” she said.
Patrick Traylor, the deputy assistant administrator for EPA's Office of Enforcement and Compliance Assurance (OECA) who co-chairs the federalism workgroup with Nebraska environment head Jim Macy, recently touted the workgroup as a forum through which the agency could improve enforcement “workflows” and ensure states have authority within their borders on every topic where they are “capable.”
Dunn said a pair of letters obtained by Inside EPA between EPA's Chu and Missouri Department of Natural Resources (MDNR) Director Ed Galbraith is an example of “the types of concerns states have that the dialogue can address.”
In the letters, Chu says Region 7's review of state permitting decisions is now focusing on the permits' “legal sufficiency” rather than what he describes as an Obama-era practice of enforcing compliance with federal priorities.
“We acknowledge that some of our past permit reviews might have focused on Federal policy choices rather than limiting the review to legal requirements. We hope that our narrowed focus on legal sufficiency when conducting permit reviews will allow us to continue our pre-public inter-governmental review and comment process. . . . These shifts in direction do represent a significant change,” Chu writes in his letter, dated Oct. 12 -- the same day EPA announced the appointment of Jim Gulliford as Region 7 administrator, covering Iowa, Kansas, Missouri and Nebraska.
'Respective Roles'
Chu was responding to a Sept. 18 letter from Galbraith where the MDNR director asked to “revisit and clarify our respective roles” in enforcement, especially the circumstances where EPA will conduct its own enforcement actions within the state without involving state regulators.
“I would ask Region 7 to step back from its routine practice of conducting individual inspections and taking enforcement actions in Missouri,” Galbraith's letter says, arguing that for programs where MDNR has delegated authority, “the Department is the implementer of these programs, not the EPA."
Dunn told Inside EPA that Chu's assurances to Galbraith characterize the shifts in practice that ECOS hopes can emerge from the federalism workgroup, as opposed to more overt changes to EPA regulations or guidance.
“We're not talking about changing regulations or changing protocols. It's not a conversation about the substance of any particular reg or rule, but rather about how the states and EPA can work better together, to actually be more effective,” she said.
However, Dunn added that EPA might try to “memorialize” the changes through guidance at some point. “I would expect that at some point pen would be put to paper to try to memorialize the improvements to these workflows, in order to implement these improvements across the country in a consistent way.”
Chu's letter to Galbraith stops short of pledging to end Region 7's “routine” inspections and enforcement activities independent of MDNR, but lays out a list of categories where he says the agency sees independent work as necessary. For facilities that do not involve those or similar situations, he writes, “we are prepared to defer to MDNR on the conduct of those inspections.”
Chu says Region 7 is open to a meeting between regional officials and MDNR to discuss specific instances where EPA sees federal involvement as needed.
EPA Involvement
Enumerating the conditions that could lead EPA to take action on its own, Chu writes, “From our point of view, examples of some of the types of situations that upper management might decide warrant EPA involvement in inspections and enforcement include:Emergency situations involving protection of public health and the environmentSignificant noncompliance that the state has not timely addressedInspection or enforcement work requiring specialized EPA equipment or expertiseFederal and State owned/operated facilitiesActions of national interest or involving multiple state jurisdictionsProgram oversight inspectionsResponse to MDNR's requests for assistance”
Despite those limits on the state's enforcement primacy, Chu says, “we agree with the basic principle you articulated. We agree that the MDNR should be the primary day-to-day implementer of delegated programs, except where particular circumstances or the pursuit of specific goals would recommend otherwise.”
https://insideepa.com/daily-news/epa-deferral-states-enforcement-may-bolster-cooperative-federalism
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NOAA Pick Agrees Humans Are 'Main' Cause Of Climate Change
Dec 1, 2017 | Inside EPA
The Trump administration's pick to lead a key agency overseeing climate change science efforts is accepting scientific conclusions that human-released greenhouse gases are the chief cause of climate change, going further on the issue than most administration officials, including EPA Administrator Scott Pruitt.
Pruitt and other Trump officials often acknowledge that humans play “some role” in climate change, but quickly assert that it is difficult to measure with “precision” the scope of that role.
Numerous scientific reports, including the National Climate Assessment that was released early this month by the Trump administration, say human-released GHGs are the “dominant” cause of global warming -- though opponents of climate mitigation policy have sought to increase public doubt about such findings, thus blunting calls for carbon curbs.
Pressed on that report during a Nov. 29 confirmation hearing, Trump's pick to lead the National Oceanic and Atmospheric Administration (NOAA), Barry Myers, reluctantly agreed with the report's top-line conclusions, according to Mashable.
"I’ve read the reports and I have no reason to disagree with them,” Myers said, during an exchange with Sen. Ed Markey (D-MA).
“So does that mean you agree with them?” Markey asked.
“I agree with the reports that they’re based on quality peer reviewed research which is something I strongly support,” said Myers, the former CEO of AccuWeather.
That spurred Markey to reiterate his question. “So then you agree that humans are the main cause of climate change?” This was followed by what Mashable calls five seconds of “awkward” silence. “Is that what you’re saying?”
“That is what I’m saying,” Myers finally stated.
As Inside EPA readers know, Myers' testimony goes much further than most other Trump environment officials. For example, the nominees to chair the White House Council on Environmental Quality (CEQ) and to be deputy EPA administrator recently acknowledged that humans play some role in climate change, while repeatedly offering slightly different variations of a statement intended to downplay scientists' findings of humans' “dominant” role.
In his responses to questions for the record from the Senate environment committee's top Democrat, EPA deputy chief nominee Andrew Wheeler says, “I do believe that the climate is changing and that humans have an impact on the climate.”
CEQ nominee Kathleen Hartnett White has this response to the issue: “The climate is changing and human activity impacts our changing climate in some manner. The ability to measure with precision the degree and extent of that impact, and what to do about it, are subject to continuing debate and dialogue.”
https://insideepa.com/daily-feed/noaa-pick-agrees-humans-are-main-cause-climate-change
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Shell Putting Muscle Behind NatGas, Renewables to Slash Carbon Emissions
Nov 30, 2017 | Natural Gas Intelligence
By Carolyn Davis
Royal Dutch Shell plc pledged on Tuesday to continue investing in global natural gas projects while increasing its stakes in renewables as it strives to cut its carbon emissions in half by 2050.
Europe’s largest oil and gas producer and a major player in the U.S. onshore and Gulf of Mexico, Shell held a management day to update investors about its near- and long-range strategy.
CEO Ben van Beurden guided the webcast conversation from London, where he attempted to balance his comments about reducing carbon emissions while reassuring investors that returns can be increased in the core fossil fuels business.
“We have been on a transformational journey since 2014,” he said, referring to the commodity price downturn and its decision to build its natural gas arsenal, particularly for export projects, with the merger of BG Group plc.
The merger “strengthened the four levers that we could pull for our transformation: operating cost reduction, capital discipline, portfolio restructuring and accelerating growth...And I believe that we have been delivering on a very ambitious agenda.”
Integrated gas, conventional oil and gas, and oil products are the current cash engines, with deepwater and chemicals the main priorities today. Shales and New Energies, i.e. renewables, are the emerging opportunities, he explained.
Deepwater, Shales Each A Priority
“The intention is for deepwater to have become a cash engine by 2020, and shales to have become a growth priority by 2020,” van Beurden said, reiterating a strategy laid out last year.
“Over the last few years, we have established tremendous clarity of purpose that's inside the company, but I trust also for our shareholders,” he said. “We have developed a differentiated strategy that gives us competitive advantage, and we are reshaping the portfolio profoundly to align to that strategy. And I clearly see it's working.”
In the last two years, he noted, “we have transformed the financial metrics of our business,” with the current return on average capital employed at around $50/bbl, or around 5%. “That's expected to grow to around 10% at $60/bbl by 2020.”
The CEO said he wanted to convey “our confidence in the differentiation, the financial resilience, the long-term business relevance of our portfolio, through the ups and downs of the oil price cycle, but of course also through the energy transition.”
Since taking the helm in early 2014, van Beurden has been preaching about strengthening the gas portfolio in part to reduce the carbon footprint.
The “resilience and good financial performance” of the integrated gas business have been underpinned by Shell’s leading position in both global liquefied natural gas (LNG) and gas-to-liquids value chains, “as well as by the underlying strength Shell sees in natural gas and LNG markets,” he said.
Van Beurden offered few details, but he said Shell planned to sustain its competitive LNG advantage through the 2020s, by focusing “opportunities for selective growth,” with “cost competitiveness” key to all decisions.
The Big Oil major today is weighted almost equally to gas and oil, with its LNG dominance rivaling all global producers.
However, Shell also is catching the renewables wave, as it evolves from an “oil and gas” producer to an “energy” operator. To demonstrate its commitment in reducing carbon emissions, investments are being stepped up within the New Energies business to reduce the net carbon footprint, “in step with society's drive to align to the Paris agreement goals,” van Beurden said.
Shell is committed to the goals of theglobal climate change accord reached in December 2015, to keep global temperatures from rising more than 2 degrees C above pre-industrial levels.
"We have to start somewhere, and we have to build a platform that can participate and grow actively in further electrifying the world," he said. “Tackling climate change is a cross-generational, global and multi-faceted effort.
“This is a challenge for the whole planet, for all of society, for customers, for governments and indeed for businesses. It will mean meeting increasing energy demand with an ever-lower carbon footprint. And it is critical that our ambition covers the full energy lifecycle from production to consumption. We are committed to play our part.’’
Portfolio Shifting For Greater Good
From 2018 to 2020, Shell has earmarked up to $2 billion/year for the New Energies ventures, including wind, solar, hydrogen power and by investing in European electric vehicle (EV) charging stations. The goal is to reduce carbon emissions 20% by 2035 and 50% by 2050.
Shell is collaborating with automakers BMW, Daimler AG, Ford Motor Co. and Volkswagen to install fast-charging EV stations on European highways.
By expanding the global EV fleet over the next decade, Shell would appear to be working against its self interest, as gasoline demand should fall sharply. Van Beurden pushed aside any criticism of the shift.
“This is a challenge for the whole planet,” he told the audience. Besides, he said, he has shareholder support. The pledge to reduce emissions follows a shareholder resolution, backed by Shell, which called on the producer to improve performance targets to help control climate change.
The New Energies division is set to become one of Shell’s primary growth engines after 2020, generating returns of 8-9% a year, CFO Jessica Uhl said.
Today, with free cash flow moving higher and oil prices strengthening, Shell revived its all-cash dividend, ending a program that gave shareholders the option to receive share dividends, which have remained low.
The Anglo-Dutch producer also confirmed it has begun a share buyback of at least $25 billion from now until 2020, “subject to progress on further debt reduction and recovery in oil prices,” van Beurden said.
In addition, Shell is increasing its organic free cash flow outlook for 2020, and now expects to deliver up to $30 billion/year by 2020 at $60/bbl oil prices (Brent). That’s a $5 billion increase from projections issued last year.
Since early 2016, Shell has ramped up production on 11 major projects, adding an average of 500,000 boe/d at peak production. It also continues on a $30 billion divestment program, in part to reduce debt following the massive BG acquisition.
To date $23 billion in sales has been completed, with an additional $2 billion announced and another $5 billion in advanced marketing stages. Divestments are to continue at a rate of around $5 billion/year until at least 2020.
http://www.naturalgasintel.com/articles/112589-shell-putting-muscle-behind-natgas-renewables-to-slash-carbon-emissions
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