It's been a good week for anti-pipeline activists in the Northeast.
The post Within One Week, Plans For Two Major Proposed Natural Gas Pipelines Are Scrapped appeared first on ThinkProgress.
It's been a good week for anti-pipeline activists in the Northeast.
The post Within One Week, Plans For Two Major Proposed Natural Gas Pipelines Are Scrapped appeared first on ThinkProgress.
"This is horrible. This issue is not over with in any way."
Last year, the world invested $286 billion in green energy.
The post Worldwide Renewable Energy Investment Hits A New Record appeared first on ThinkProgress.
This year solar plants will provide more new energy to the grid than all other sources.
The post For The First Time, Solar Will Be The Top New Source Of Energy This Year appeared first on ThinkProgress.
“Before we even talk about where to site a pipeline, we need to figure out what pipeline is needed, if any.”
The post New Gas Pipeline Route Tries To Spare Nature But Affects More Landowners appeared first on ThinkProgress.
Recent decisions by Congress and the Supreme Court boost renewables and energy efficiency so much, they may wipe out the natural gas renaissance that had been recently brought on by cheap shale gas.
The post How Congress And The Supreme Court Blew Up The Natural Gas ‘Bridge’ To Renewables appeared first on ThinkProgress.
The Atlantic Coast Pipeline's proposed route crossed two national forests, and in doing so threatened endangered salamanders, flying squirrels, and restoration areas.
The post Officials Reject Gas Pipeline Route That Would Have Run Through National Forests appeared first on ThinkProgress.
Great news for carbon emissions. Bad news for anti-fracking communities.
The post This Country Just Promised To Get Rid Of All Its Coal Plants appeared first on ThinkProgress.
A proposed natural gas pipeline that would run through the Southeast U.S. is raising environmental justice, health, and regulatory questions.
The post Congressmen Say Proposed Natural Gas Pipeline Would Endanger African American Communities appeared first on ThinkProgress.
The Atlantic coast is ripe for a clean energy explosion. It’s up to lawmakers to light the fuse.
The post How Offshore Wind Can Beat Natural Gas In The U.S. appeared first on ThinkProgress.
Energy master limited partnerships, most of which are in the business of storing and transporting oil and natural gas, have had a rough time of it since energy prices started falling in mid-2014. The Alerian MLP index has fallen 38 percent since its August 2014 peak and is down 27 percent year to date. The 22 percent loss in the third quarter is the worst quarterly decline since the index’s inception in 1998. In September, the asset class was down 15 percent, though it regained all of that ground and more in the first week of October. To say that MLPs have been challenged is to state the obvious. But is it finally time to also call them cheap?
There’s no arguing with the fact that MLPs, which contain both debt and equity, have seen their distribution yields go up as their prices have gone down. The market cap-weighted yield on the Alerian index is 8.3 percent, their highest level since 2011. By comparison, 10-year Treasury notes are paying just 2.05 percent. Analysts pay close attention to that spread between MLP yields and 10-year Treasury notes — MLPs have historically outperformed when spreads are wide. Historically, when they’ve reached these levels, the total return on MLPs has been roughly 30 percent over the following 12 months. While a 30 percent return expectation seems lofty, those healthy yields (not to mention distribution growth averaged 7 percent in the second quarter of 2015) offer a compelling entry point, assuming continued growth in production and M&A activity. What’s more, many MLPs generate significant free cash flow – 20 to 30 percent higher than what they need to make their distributions – and are unlikely to need to turn to the capital markets for funding. That provides some insulation from market sentiment about the asset class.
Which brings us to the longer-term horizon. The outlook for the U.S. energy industry is still encouraging, even though it may seem rather dismal at the moment. Credit Suisse’s energy analysts believe persistently low prices have resulted in a decline in U.S. oil production that started in the second quarter of this year and could continue through the middle of 2016, while its MLP analysts predict the partnerships will cut capital expenditures in both 2015 and 2016. Neither trend will be particularly helpful for MLPs, which earn most of their revenues from customers who pay to use their infrastructure. On the other hand, analysts still expect MLPs to spend approximately $40 billion in 2016, which is more than in any year prior to 2013 and close to double 2011 levels.
There are good reasons that MLPs haven’t stopped betting on their own futures. Oil prices should soon begin to creep higher, which would support renewed increases in production. Credit Suisse energy forecasters expect global oil demand to outrun supply in the fourth quarter of 2015, leading the price of West Texas Intermediate to rise from an average of $43 that quarter to $59 by the end of 2016. As oil prices rise, producers will pump more oil, creating more demand for the new wells, storage facilities, pipelines, and refineries through which MLPs earn their keep.
So, while the huge boom in energy production may slow in the coming year, American energy is still a growth industry in the long term. Oil is still the fuel that keeps the global economy running, and the U.S. has bountiful supplies, the technology to get at them, and the deep, liquid capital markets to finance exploration and production. The same goes for gas. Already the world’s largest natural gas producer, the U.S. is in the process of building export terminals to ship liquefied natural gas to Asia and Europe. All told, the U.S. Energy Information Administration has said the country could become energy-independent by 2028.
That’s not to say investing in MLPs comes without risk. Many partnerships are tied into long-term contracts and receive fixed revenues for the use of the infrastructure they control, such as pipelines or storage terminals. Low oil prices could yet spur customers to renegotiate these deals at lower prices, which could negatively impact distribution yields. Since MLPs are essentially high-yield fixed-income products, there’s also the potential volatility caused by any future Fed rate hike. (That said, given the sharp re-rating of the sector, it might be less vulnerable to a spike in interest rates than it otherwise might have been.) Though a full recovery in MLPs may take some time, the combination of currently cheap valuations and a still-encouraging long-term outlook make it a good time to reconsider their investment potential.
The California Energy Commission approved more than $5 million in grants to promote efficient use of natural gas, reduce emissions from natural gas-burning cooking systems, and improve indoor environmental air quality during its monthly business meeting today. The Energy Commission also approved $8 million in grants to advance biofuels as a low-carbon transportation fuels.
Grant recipients include:
Fisher-Nickel, Inc.: More than $900,000 to demonstrate a suite of energy-efficient, natural gas-fired cooking appliances for restaurants and commercial applications. The company also received about $900,000 to demonstrate an energy-efficient hot water system for commercial food service.
Institute of Gas Technology: Received about $800,000 to demonstrate a boiler heating system with ultra-low emissions.
Lawrence Berkeley National Laboratory: Received three grants totaling about $2.4 million to develop a new type of burner that can reduce emissions from commercial and residential cook tops and ovens, develop technology to better control outdoor air ventilation rates in new and existing commercial buildings, and to conduct a field study to determine how 2008 Title 24 building efficiency standards have impacted indoor air quality in new homes with natural gas appliances.
GFP Ethanol: Received $3 million to develop a program that provides an expanded and reliable supply of grain sorghum feedstock for production of low carbon transportation fuel.
AltAir Fuels: Received $5 million to expand production of renewable diesel fuels at its Paramount facility in Los Angeles County. AltAir currently produces 30 million gallons of renewable diesel fuel a year and will expand production to 40 million gallons a year.
Natural gas grants are funded by the Energy Commission’s Natural Gas Research and Development Division that invests in technologies and projects that have the potential to improve the delivery and use of natural gas, benefit the environment and lower costs. Biofuel grants are funded by the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) and advance the development of California-based biofuel production facilities. The projects will support the state’s goals of reducing greenhouse gas emissions to 1990 levels by 2020 and the Bioenergy Action Plan target of producing 40 percent of all in-state biofuels by 2020. To date, the Energy Commission’s ARFVTP has provided more than $125 million to promote in-state biofuel production from low-carbon feedstocks.
Additionally, the Energy Commission approved a water supply amendment to its May 2000 Decision for the High Desert Power Plant, which is an 830 megawatt natural gas-fired generation facility in Victorville. The Energy Commission ordered the High Desert Power Plant owner to secure a temporary backup of limited regional groundwater for addressing the drought impacts on its primary supply from the California State Water Project. The owner must also file a plan for a drought-proof, sustainable water supply by November 1, 2015.
A detailed list of all items before the commission at today’s business meeting can be found online.
# # #
About the California Energy Commission
The California Energy Commission is the state’s primary energy policy and planning agency. The agency was established by the California Legislature through the Warren-Alquist Act in 1974. It has seven core responsibilities: advancing state energy policy, encouraging energy efficiency, certifying thermal power plants, investing in energy innovation, developing renewable energy, transforming transportation and preparing for energy emergencies.——————
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Governor Tom Corbett (HARRISBURG, Pa.) and the Department of Environmental Protection (DEP) today announced that the third round of Natural Gas Vehicle grants will open on Saturday, Aug. 30 and will provide an estimated $6 million to help pay for the incremental purchase and conversion costs of heavy-duty natural gas fleet vehicles.
“Pennsylvania continues to move in the right direction by creating opportunities to convert vehicle fleets from imported oil to homegrown, clean-burning, affordable natural gas,” Gov. Corbett said. “We encourage all who are eligible for this funding to lower their operational costs and lessen our dependency on foreign oil.”
Since 2013, $14 million has been awarded to 44 organizations and companies making the switch to compressed natural gas (CNG), liquefied natural gas (LNG) and bi-fuel vehicles weighing 14,000 pounds or more.
Those eligible to apply include non-profit organizations, local transportation organizations, state owned or state related universities, commonwealth or municipal authorities, for-profit companies and the Pennsylvania Turnpike Commission.
Requests can be no more than 50 percent of the incremental purchase or retrofit cost per vehicle, with a maximum total of $25,000 per vehicle.
Grant applications are due by 4 p.m. on Friday, Nov. 14, and will be awarded this winter.
Eligible applicants are encouraged to participate in a related webinar, scheduled for Sept. 22, from 2 to 3 p.m.To register for the webinar and view the updated guidance document and online grant application, visit www.dep.state.pa.us and click on the “Natural Gas Vehicle Grant Program” button.
When combining all of the world’s countries, 18 percent of the world’s electricity consumption comes from renewable sources. A global agency estimates that amount could be doubled in a little more than 15 years while saving a combined $740 billion per year in the process.
The latest study, REmap 2030, from the International Renewable Energy Agency (IRENA) estimates that amping up renewables to constitute 36 percent of the international energy mix would more than offset the costs associated with fossil fuel pollution. It would also reduce the global demand for oil and gas by about 15 percent, and for coal by 26 percent.
Some of the graphics within REmap include annual investment needs and percentage breakdowns in doubling renewables’ share of the world’s TFEC—total final energy consumption—by 2030.
To IRENA, the question isn’t if it can be done, but how investment dollars should be spent to ensure that renewable energy doubling happens.
“The central policy question is this: What energy sources do we want to invest in? Our data shows that renewable energy can help avert catastrophic climate change and save the world money, if all costs are considered,” Adnan Z. Amin, director-general of IRENA, said at the report’s unveiling in New York. “In answering this question, REmap 2030 makes a clear case for renewables. It shows the transition is affordable based on existing technologies, and that the benefits go well beyond the positive climate impact.
“Countries today face a clear choice for a sustainable energy future.”
Not long ago, the idea of the United States producing more oil than Saudi Arabia seemed like a pipe dream. But then fracking, a technique the energy industry has been using in some capacity since the 1950s, came into its own. Huge advances in hydraulic fracturing and horizontal drilling over the last decade have coaxed crude oil and natural gas from shale beds once considered impenetrable in the United States. The implications are huge: According to the International Energy Agency, the U.S. could be the largest oil producer in the world as soon as next year. Remarkably, many industry conversations now revolve around exporting – not importing – oil and gas.
So-called unconventional shale gas and oil supplies are coming online in both the energy industry’s Texas heartland and as far afield as North Dakota and Pennsylvania. In October, the U.S. was producing 7.8 million barrels of crude oil per day – outpacing imports for the first time since 1995. By 2016, American producers should be cranking out 9.5 million barrels per day, according to the U.S. Energy Information Administration. American reliance on imported crude oil has been falling since 2008, and net imports are at their lowest level in two decades.
But that abundance has created its own challenges. Combined with major efficiency gains, the development of shale gas fields has driven a sharp decline in prices for natural gas, of which the United States is now the world’s largest producer. Prices at the Henry Hub, a key distribution point in Louisiana, averaged $3.63 per million BTUs in 2013 – up 83 cents from 2012, but still far below the $9-plus prices of 2008. While last year’s price bump prompted some exploration and production companies to restart drilling operations they had temporarily shuttered, producers remain wary of oversupply.
That raises a question: Could ramped-up U.S. oil production cause domestic crude prices to fall as sharply as natural gas did? As domestic production has increased, the spread between the benchmark U.S. crude price, known as West Texas Intermediate, or WTI, and Brent crude, a global oil benchmark based on production from a cluster of North Sea oilfields, has indeed widened, unsettling domestic oil executives. Starting in 2011, Brent has increasingly traded at a premium to WTI—as of Jan. 21, the spread was $14.66 per barrel.
But there is reason to believe that abundant shale oil will not drive a collapse in prices similar to that of natural gas, according to Credit Suisse Head of Global Energy Research Jan Stuart. One of the problems domestic gas producers face is that demand has lagged the ocean of new supply. It is taking time for fertilizer and chemical companies to build new manufacturing facilities that can take advantage of cheap gas inputs, though such factories have begun popping up near the Gulf of Mexico. And although American producers are eager to sell liquefied natural gas to Europe and Asia, where it can fetch a higher price than in the U.S., it isn’t possible yet. Exporting LNG remains controversial among U.S. politicians, who fear it will push domestic gas prices higher. So far, only one export terminal — being built by Cheniere Energy — has been approved, though the Federal Energy Regulatory Commission is considering others.
The shale boom has also largely reversed the geography of natural gas flows, and infrastructure hasn’t kept pace. While the majority of the country’s natural gas used to originate around the Gulf of Mexico, it now comes from shale fields in Ohio, Pennsylvania and New York. New pipelines are mushrooming to carry gas to markets in the Mid-Atlantic, Midwest and New England, but the Northeast is flooded with an oversupply of natural gas in the summer, when frigid buildings no longer need to be heated. That pushes prices down. Existing pipelines built to carry imported and domestic gas north from the Gulf need to be reconfigured to run in both directions, but Credit Suisse analysts say current plans to extend pipeline capacity to the southern half of the country are likely to prove inadequate. For gas producers to decide it is worth their time and money to invest in two-way pipelines, Stuart says, prices of Northeast natural gas will have to keep falling relative to gas at the Henry Hub. Stuart sees that happening over the next three years, particularly in summer, but for now, much of the brand-new shale gas supply tends to get stuck in a saturated market for at least part of the year.
Sufficient demand for crude oil, on the other hand, is already in place. The United States has long imported large amounts of crude, and both the infrastructure to refine it into products such as jet fuel and gasoline, and the markets for those end products are well established. If oil refineries currently processing imported crude simply switched to the Made-in-the-USA variety, there would be enough demand to absorb the new supply, Stuart says. Of course, the price would have to be right for them to do so, and that’s where the WTI-Brent spread comes in. At present, that spread has motivated some refiners to start retrofitting their plants. It also helps that the investment required to make the switch is relatively low. Most refiners were built to process medium- and heavy-grade crudes, but American oils are much lighter, and it is cheaper and simpler to retrofit refineries to process lighter crude than the reverse, Stuart said.
Stuart says that most oil-exporting countries could easily sell much of the oil they’re currently sending to the U.S. to customers in Europe and Asia. But some may also choose to set prices low enough to compete with domestic producers in order to maintain a toehold in the world’s largest economy. It’s unclear to what extent that will happen, though, as it could become awkward for Gulf State producers to explain why Japanese customers are paying a great deal more for oil than their American counterparts.
Credit Suisse analysts don’t believe it is likely that the U.S. will stop refining imported crude oil altogether. Nor is Stuart convinced, as the International Energy Agency has forecasted, that the U.S. will ever become a net exporter, largely because production is expected to decline sometime after 2020. Right now, with the exception of Canada, the U.S. doesn’t export at all. Overseas crude oil shipments are currently prohibited, with a few exceptions, but there has been a push recently on Capitol Hill to change that. And some American oil producers think they have a good case for doing so. Oil production is booming in West Texas, but local refineries in Houston are overburdened, as are the crude-carrying ships to Louisiana. There is a possibility that the U.S. could try to negotiate crude oil exports as part of a trade deal, Stuart says, though that would be a hard sell to an American public wary of anything that seems like it could drive gasoline prices up.
In the end, however, the trade balance that matters most to shale oil’s future prices is going to take place on American soil. “The system now is in a transition,” Stuart says. “The key to it all is, can we incentivize U.S. refiners to reject imports and instead accept the growing indigenous supplies? We think so.” It wouldn’t be the first—and probably not the last—time that accepted wisdom about the U.S. energy industry got flipped on its head.
Above: Increased U.S. oil production won’t lead to a sharp drop in prices.
With protests forcing shutdowns at key oil shipping ports in Libya and violent political upheaval roiling Egypt, Credit Suisse energy analysts assessed which oil and gas companies’ operations are most exposed to conditions in the two North African countries.
The energy companies most exposed in terms of value to Egypt and Libya are Vienna-based OMV, Houston-based Apache Corp., Spanish oil giant Repsol, Italian multinational ENI and British natural gas company BG Group, Credit Suisse integrated oil and gas analysts wrote in a note this week entitled “North African Summer: Egypt, Libya and the Companies.” Of the 13 major energy companies Credit Suisse analyzed, the ones that rely on Egypt for the highest percentage of their total oil and natural gas output are Apache and BG Group, which have an estimated 20 percent and 18 percent of total production in the country, respectively. OMV and Repsol have the highest production exposure to Libya, with operations in the country representing 11 percent and 10 percent of their respective total production.
But just because companies source a great deal of production from Egypt and Libya doesn’t mean that operations in those countries account for an equally large chunk of their income. “While the share of production to the group is high, these countries are somewhat lower profit areas for these corporates,” Credit Suisse’s energy analysts wrote. Libya, for example, has very high tax rates that reduce the cash flow to oil companies with operations there, they noted. The ratio between production and cash flow is not equal in Egypt, either. BG only earned 15 percent of its net income from Egypt last year despite the fact that 20 percent of its natural gas production took place in the country, the analysts noted.
Even in net asset value terms, however, Apache has the most exposure to Egypt, with the country accounting for 17 percent of the total estimated net asset value for this year. OMV has the most exposure to Libya, with its operations there accounting for 22 percent of its total estimated net asset value.
So far, the biggest impact of the unrest in the region has been on Libyan oil exports. The OPEC member has the largest proven oil reserves in Africa, estimated at roughly 47 billion barrels, according to the United States Energy Information Administration. Production has fallen by 1 million barrels per day to just 600,000 barrels per day since the end of June, when oil workers began striking. The strike has mainly impacted oil export infrastructure in the eastern part of the country, including the area around the Sirte Basin, which contains 75 percent of Libya’s commercial oil reserves, Credit Suisse commodities analysts wrote in a recent note, “Commodities Advantage: Fundamentals in the Driver’s Seat.”
Egypt is the largest non-OPEC oil producer, producing about 720,000 barrels of oil each year. But the country’s role as an energy transit route is more important than its actual production levels, Credit Suisse energy analysts pointed out, as the government operates both the Suez Canal and the Suez-Mediterranean pipeline. Three million barrels per day of oil – about 2.5 percent of the world’s crude oil trade – and 1.5 trillion cubic feet of natural gas moved through these transit points in both directions last year. But even the revolution in 2011 that resulted in the overthrow of former President Hosni Mubarak didn’t do much to disrupt operations, and the current unrest hasn’t either. But Credit Suisse oil company analysts pointed out that turmoil does tend to impact things like getting permits approved and customers paying the bills on time. “It is fair to assume that the current uncertainties may somewhat delay payments to oil companies,” analysts wrote.
But Credit Suisse cautioned that the bigger concern when it comes to Egypt is the prospect of unrest there exacerbating problems in Libya and other neighboring countries. “It is worth mentioning the effect that the current unrest in Egypt may have on neighboring Middle East and North African countries, especially Libya, which has already been seeing disruption to oil production amidst oil sector protests,” analysts wrote. “If the conflict continues in Egypt, the number of people trying to cross into Libya may prove another issue for the Libyan government to deal with.” The bank’s commodity analysts went one step further, saying that Libya’s continued instability and proximity to Egypt “present a large upside risk to oil markets,” meaning that the situation threatens to drive oil prices higher.
Brent crude oil prices had already been heading north for reasons other than the Middle East unrest, Credit Suisse commodity analysts said in a recent note entitled “Fundamentals in the Driver’s Seat.” “After disappointing output from the North Sea and strangely low Urals availability in Europe, cuts in Nigeria and Algerian loading schedules have in the last few weeks been compounded by a sharp deterioration of Libya’s supplies.” How long that particular deterioration lasts – and whether or not it will get worse – remains unclear.
Last-minute efforts to push through a bill that would repeal the fracking moratorium in the state of North Carolina failed yesterday, with Representative Mike Hager (R-Rutherford), who steers energy bills to the floor, quietly admitting the loss. In the final days of session for the General Assembly, the House recognized the bill was too divisive to push through without full consideration in committee. “We like for controversial legislation to go through the committee process,” Hager said. “I’m not going to hurry — we’ve been accused of that before.”
Senate Bill 127 would have repealed a prohibition on fracking permits, which critics of the bill say would essentially lift the state’s moratorium on fracking. The legislation would have also decreased tax rates on oil and gas companies in an attempt to encourage drilling activity in the state. According to the News and Observer, the fracking provisions in the bill were unknown to most House members just 36 hours earlier, after being discreetly inserted into legislation that originally would reconfigure the N.C. Department of Commerce. This misleading tactic has been used before in the North Carolina General Assembly this session, including attaching stringent abortion restrictions first to an anti-Sharia measure and then again to a motorcycle safety bill.
Representative Hager previously failed to repeal North Carolina’s successful Renewable Energy Standard (RES), despite attempts to push through the bill without even a vote count. The 2007 RES law has been widely popular in North Carolina, creating thousands of clean energy jobs and pumping billions into the economy. Even the CEO of the largest electricity power holding company in the United States, Duke Energy Corp., has expressed support for the law on behalf of the company.
These attempts to ram through unpopular reform are not isolated events. Recently, North Carolina has received national attention for its regressive policies being approved by a newly established Republican majority and governor, including relaxing gun regulations, restricting access to the ballot, and adopting tax reform that would disproportionately benefit the rich. These measures have disenfranchised North Carolinians, motivating them to participate in the largest liberal protest in the nation, which has led to the arrest of over 900 citizens.
Rep. Hager is a well-known member of ALEC, a right-wing legislation factory that is backed by the Koch brothers and that drives the campaign behind repealing the RES and also supports the oil and gas industry. Despite widespread bipartisan support for renewable energy usage and a state-wide fracking ban, Hager will continue his misguided efforts on behalf of his conservative backers – he has promised to reintroduce a RES repeal next legislative session and has suggested the fracking bill could be reconsidered in a special session.
The post Last-Minute Attempt To Repeal Fracking Moratorium Fails In North Carolina appeared first on ThinkProgress.
Gwynne Taraska is the research director of the Institute for Philosophy and Public Policy and a visiting research associate at the Center for American Progress
By Gwynne Taraska
Ron Wyden (D-Ore.), Chairman of the Senate Committee on Energy and Natural Resources, announced that he is seeking bipartisan agreement on a number of issues related to the expansion of shale gas production. These include the development of natural gas infrastructure and the control of methane leakage. His announcement came yesterday in a forum hosted by the Bipartisan Policy Center on the impact of natural gas on the U.S. economy and geopolitics.
Given that methane is a powerful greenhouse gas –- trapping a hundred times as much heat as CO2 over a 20-year timeframe –- leakage poses a serious threat to the climate and could counteract some of the emissions benefits of substituting natural gas for coal in the generation of electricity. New natural gas plants have emissions benefits compared to new coal plants if the methane leakage rate is below 3.2 percent from well to power plant delivery. Wyden yesterday endorsed a leakage target of 1 percent for future pipelines. “I’m going to look for ways to not just build more pipelines,” Wyden said, “but to build better pipelines.”
Wyden is also proposing that states and the federal government share the regulation of hydraulic fracturing (fracking) operations. States, he says, should oversee “below ground” fracking activities such as well construction, given that they have intimate knowledge of local geology. The federal government, Wyden says, should oversee “above ground” activities such as the reporting of spills and the disclosure of fracking chemicals. Wyden’s proposal is therefore in sharp contrast to the current draft rule on fracking by the Department of the Interior’s Bureau of Land Management (BLM), which applies only to public and tribal land and has been criticized for having insufficient disclosure requirements. Wyden has also called for the Department of Energy to engage the National Academy of Sciences to evaluate the website FracFocus, which BLM’s current draft rule uses for chemical disclosures, to determine whether it provides adequate information to regulators. People should know whether there are spills or contaminants that affect their communities, Wyden said. “Transparency,” he said, “isn’t something that should stop at the state line.”
Wyden is additionally seeking bipartisan support for facilitating the use of natural gas in the transportation sector as well as clarifying the conditions under which the Department of Energy can revoke or suspend permits to export liquefied natural gas (LNG). “Whether you think exports are good or bad, reasonable people can agree that having clarity on the process involved is crucial,” Wyden said.
Many of Wyden’s proposals are necessary -– although more needs to be done -– to ensure that the U.S. shale gas boom provides a net benefit.
Exports. The clarity that Wyden calls for regarding the license process would be valuable, and further, careful consideration of exports more generally is necessary given that increasing exports could potentially have a number of negative effects on the U.S., including higher natural gas and electricity prices; additional shale gas production and therefore additional fracking, which carries a raft of well known risks such as water pollution and habitat destruction; increased greenhouse gas emissions; and the risk of overbuilding export infrastructure.
Reporting and disclosures. The natural gas boom is a reality – the United States produced 24,041,904 million cubic feet (MMcf) of dry natural gas in 2012 – and it should be managed as safely as possible. Universal federal reporting and disclosure rules would contribute in some measure to the safety of the shale expansion by allowing local residents to gain and act on information about fracking operations in their communities.
Pipelines and leakage control. Natural gas-fired plants produce approximately 50 percent less carbon pollution than coal-fired plants. Natural gas therefore presents a legitimate opportunity to reduce carbon emissions in the near term by displacing coal in the electric power sector. (The EIA and EPA have credited coal-to-natural-gas switching in elec¬tricity generation as being partly responsible for recent declines in CO2 emissions from fossil-fuel combustion.) There must therefore be adequate pipelines in place so existing natural gas-fired plants can be utilized to drive coal from the domestic fuel mix. Leakage control is needed so the emissions saved at combustion from replacing coal are not offset by methane emissions throughout the lifecycle of natural gas.
More than these proposals will be needed to ensure that the natural gas expansion will result in net gains. For example, the Center for American Progress has advocated that the federal government should set minimum guidelines to govern even “below ground” fracking activities, which states could strengthen in accordance with local differences.
In addition, the longer-term climate consequences of natural gas use must be considered. CAP’s recent report shows that natural gas provides short-term benefits for emissions reductions but that increasing reliance on natural gas for electricity generation beyond the 2020s will cause the United States to fail to meet its climate targets, given that the combustion of natural gas produces significant carbon pollution, albeit less than the combustion of coal.
The U.S. therefore must ultimately turn from natural gas to clean energy. This transition could be prompted by adopting a clean energy standard (CES) that requires utilities to generate a percentage of their electricity from renewable energy and efficiency. It also could be prompted by generating revenue from a carbon tax or from a fee levied on the natural gas market to invest in clean energy development and deployment. There is less potential for bipartisan support for these measures than there is for the proposals Wyden presented yesterday. (It should be noted, however, that Wyden’s proposal for federal “above ground” fracking requirements is ambitious and might face robust opposition.) A swift transition to clean energy nevertheless should be promoted if the U.S. is to avoid the climate impacts -– and the economic and human costs –- of overreliance on natural gas.
The executive VP of a company that owns an offshore natural gas rig that suffered a blowout Tuesday is an active critic of stronger offshore drilling regulations. Though federal officials confirmed the gas flow had stopped on Thursday morning, the accident raises serious concerns about the safety improvements taken since the disaster caused by a blowout three years ago aboard the Deepwater Horizon.
On Tuesday morning in the Gulf of Mexico, the Hercules 265 drilling rig had been drilling a natural gas well and when gas began spewing uncontrollably (video) from the well, the crew of the rig tried to use a blowout preventer to shut down the well’s flow of gas. This is the same device that failed to close the out-of-control oil well under the Deepwater Horizon, and the blowout preventer under the Hercules 265 also failed to shut down the flow of gas.
Once the conditions aboard the rig became too dangerous, all 44 workers evacuated on two lifeboats. They watched the uncontrolled gas continue to jet into the atmosphere, and the rig caught fire Tuesday night. It burned through Wednesday, and some time Wednesday evening or Thursday morning, sand or debris shifted underwater and “bridged over“, which seemingly plugged the leaking well. The fire has slowly dissipated as the remaining gas burned up. Ironically, because methane (which is the prime ingredient of natural gas) is such a potent greenhouse gas, the fact that it burned for most of the accident is actually slightly better for the climate and the environment.
There is no guarantee that the natural bridge currently blocking the free flow of gas will not open up again.
Hercules Offshore, which owns the rig that was drilling the well, had been attempting to drill a relief well to lower the pressure on the initial well when the spewing gas stopped. The company may still drill another relief well or pursue a tactic familiar to anyone who followed the Deepwater Horizon disasterL “top kill.”
Since it has been three years since the BP spill, what progress has been made in strengthening safety equipment and protocols on offshore wells?
In May, federal regulators assured the industry that any proposed new rules to strengthen offshore emergency drilling protocols would be implemented with with plenty of time for industry to adapt. Earlier in July, twelve Republican lawmakers sent a letter to James Watson, director of the Interior Department’s Bureau of Safety and Environmental Enforcement pressing for more input from industry on what they called “sweeping new rules” on blowout preventers and offshore drilling disaster prevention standards.
Hercules Offshore’s executive VP is Jim Noe. Noe is also executive director of the Shallow Water Energy Security Coalition, which said on the three-year anniversary of the Deepwater Horizon disaster:
The continued, even perpetual, regulatory uncertainty limits long-term business confidence. It also reflects a fundamental misconception: that any new regulation makes things safer than they were before, even if we haven’t fully analyzed the effectiveness of previous regulations. Spending too much time complying with new and ever changing regulations can distract us from ensuring that industry is focusing on holistic and practical risk management.
“Congress still needs to act to ensure that oil companies are drilling safely offshore and that companies are held fully accountable for any spills, including when natural gas is released into the environment. Blowout preventers also need to be failsafe, and this recent incident indicates that they may still be not.”
A natural gas blowout aboard an offshore rig in the Gulf of Mexico caused a fire and forced the evacuation of 44 workers. [NBC News]
A fire erupted on a drilling rig off the Louisiana coast that was surrounded by a “major cloud of gas” after it experienced a blowout, officials said late Tuesday.
The blaze began about 10:50 p.m. local time (11:50 p.m. ET) on the Hercules 265 natural gas platform, which is located around 55 miles off the Louisiana coast in the Gulf of Mexico.
Eileen Angelico, a spokeswoman for the Bureau of Safety and Environmental Enforcement, said no one was on board when the fire started. The cause of the blaze was unknown early Wednesday.
She added that personnel from Wild Well Inc had been brought in to try and get the well under control, but when they’d approached the blaze Tuesday night they’d determined it was unsafe to get any closer when they were 200ft away from it. …
Earlier on Tuesday, 44 workers were evacuated on two lifeboats after the gas began spewing to the surface. None of them were injured, NBC station WDSU reported.
Coal CEO Robert Murray attacked President Obama’s “campaign to place ‘climate change’ controls on so-called ‘greenhouse gas’ emissions from electric power plants” in a speech to a group including Speaker John Boehner and 10 other members of the Ohio congressional delegation. [Wheeling News-Register]
The world’s largest public financial institution, the European Investment Bank, said it would stop funding coal plants in an effort to slash carbon emissions. [Business Green]
A federal appeals court ruled that an ozone standard for public health was fine as-is, meaning that the Obama administration’s eventual decision to not strengthen it was confirmed on legal grounds. [AP, E&E News]
French oil company Total SA wants to drill off the coast of Sri Lanka. [Bloomberg]
House amendments attempt to limit economic cost of using social cost of carbon tool that would measure carbon-intensive regulations’ economic costs. [The Hill]
As evidence mounts that heavy industrial pollution is taking a toll on its citizens’ health, China is rethinking how it manages its economy. [Wall Street Journal]
The study on fracking’s effects on Wyoming’s water supply that the EPA backed out of last month will now be funded by the very drilling company whose fracking may have caused the water contamination. [ProPublica]
Hamburg, Germany is building a coal-fired power plant, an odd move for a green city in a country aggressively trying to transition to renewable energy. [InsideClimate News]
Louisiana is suing dozens of energy companies, including BP and Exxon Mobil, for decades of damage done to coastal wetlands. [New York Times]
The North Pole, after weeks of higher-than-average temperatures, is now a foot-deep lake. [Live Science]
Climate change is causing the Maine lobster population to spike, but with strained food resources, the lobsters are turning to eating one another. [Mother Jones]
Melting sea ice has caused Arctic shipping to quadruple in the past four years. [Slate]
The U.K. can expect more extreme flooding as climate warms, due to “atmospheric rivers” that carry vast amounts of water vapor, scientists say. [Guardian]
Five million years ago, global warming caused a massive East Antarctic ice sheet to melt and sea levels to rise by about 70 feet. [National Geographic]
Wouldn’t it be great to be able to blame fossil fuels for the bust of the Spanish feed-in tariff system? Turns out you can — Spain had already placed a ceiling on energy prices before renewables started growing as fast as they did, so rising fossil fuel energy prices seem to be what caused the “energy deficit.” [Renewables International]
Maryland Governor Martin O’Malley wants to strengthen his state’s renewable energy standard by 5 percent — 25 renewables statewide in 7 years. [Washington Post]
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