TransCanada/White House Standoff Begins Ahead of Climate Change Summit

Posted by Ed Burke on Nov 4, 2015 1:24:28 PM

Picture of an oil pipeline in the snow

In a surprise move Monday, TransCanada issued a request to the U.S. State Department that they pause the ongoing review of the project until the legal challenges in Nebraska are settled. (Interestingly and somewhat ironically, this is the exact same reason Secretary of State John Kerry gave for why the review was taking so long when asked last year.)

The project that we’ve all been debating for the past several years was looking at a likely rejection from the State Department and the prevailing theory is that TransCanada would like the review process to linger on, in the hopes that the proposal lands in front of a more friendly Administration in 2016, after the Presidential Elections.

The White House put forth this same theory, that the petition was a play to get a more friendly administration to rule on the project and spokesman Josh Earnest said the White House will summarily dismiss the petition for that reason.

TransCanada denies there is any politics at play. Even if it were political, however, the political moves are certainly not one-sided.

The reason cited for the timing of the petition is because Obama is expected to veto the project ahead of the upcoming UN Summit in Paris on Climate change, in order to make a statement on the U.S.’ commitment to battling Climate Change.  Not an apolitical move in and of itself, no?  (In fairness, it has become pretty clear that the President intended to veto no matter what the timing was.)

The Keystone projects’ prominence in the political realm had substantially faded in the face of tumbling oil prices but the issue has come up again with the beginning of the election cycle, with Presidential Candidates on both sides being asked their positions on the project in interviews and debates. The bid from TransCanada this week only added fuel to that fire. 

Whether the move was political, or simply meant to re-raise the issue, it most certainly puts pressure on the Administration to make a decision. That can’t be exciting for the President.  One would think he would rather pass it on to the next person anyway and avoid both the gains and fallouts politically from making the decision.

It will be interesting to see if the veto comes down before Paris, or if the project trudges on longer and longer despite a refusal to pause. 

 

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Topics: Keystone XL, TransCanada, climate change, obama

BREAKING: House Passes Bill to Lift Crude Oil Export Ban

Posted by Ed Burke on Oct 9, 2015 2:23:45 PM

Picture of the United States House of Representatives

This afternoon the US House of Representatives voted 261-159 to lift the Crude Oil Export Ban that has been in place for over 40 years. 

With the ban in place, prices have been artificially depressed at the refinery level due to limited capacity in the face of massive new production, so the thought is lifting the ban will allow producers to get more return on oil produced domestically. Refiners are obviously less than thrilled for the most part, for the same reason. 

Additionally, the ability to export is seen as being a potential positive for geopolitics and trade relations with other nations. 

On the other side though, environmental groups and the Obama administration argue that lifting the ban encourages further expansion of fossil fuel production, and disincentivizes and slows down the movement to non carbon intensive alternatives. 

(For a quick recap of some of the pros and cons, you can skim this article from 2013, when rumblings about overturning the ban began in Congress: Is It Time to Overturn the Crude Export Ban? )

Anyway, the House is the first hurdle in what could be a winding legislative process. Mitch McConnell has historically been hesitant to introduce bills of this nature to the floor, which could be an issue. Additionally, many Senate Democrats are not inclined to vote for the bill out of fear of backlash if domestic gas prices rise for their constituents (even though a recent EIA report indicated there should be no negative impact on consumers). One ammendment added may help entice Democrats though, and thats a provision that will allow higher payments to shipping unions involved, which is a key constituent for those in relevant states. 

To top it off, the White House has already announced that the President will veto the legislation, should it hit his desk. Even if the bill gets through the Senate, then, its unlikely to garner nearly enough votes to override a veto. 

Long story short, we will probably be in limbo on what actually happens with the legislation for at least another week or two, and its possible it dies in the same fashion as the Keystone Bill earlier this year. Don't expect that the market wont jump around one way or the other on the news though  - even though we really dont know whats happening yet (when has that ever stopped anything?)

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Topics: US Crude Exports, CRUDE, export ban

Better Data Drives Better Results on Fuel Inventory Management

Posted by Ed Burke on Sep 23, 2015 12:03:45 PM

 

Technician installing a tank meter 

There have been so many technology advances in the past 10-15 years that have helped streamline industry operations immeasurably. From cloud based CRMs, to updated financial systems, to e-logs, to TABs interfaces, so much of the background work that used to take hours of manpower and resources now runs automatically, or at least semi-automatically. 

Perhaps the best win-win tech advancement however, in terms of streamlining and simplifying an issue for both the company and the customer, is the ability to use cell technology for remote tank monitoring. For dispatch, theres no more guesswork but automated alerts, continuous level monitoring, and the ability to easily report on and plan for customer usage patterns. For the customer, there's no more sticking the tank, no more calling in orders, and no more running out of fuel.

What's better than that?

There are a lot of different systems for tank monitoring, and lots of questions about it. So, this month I wrote an article for the September issue of Oil & Energy Magazine on how we use specific remote tank monitoring setups to streamline our customers fuel inventory management as well as our dispatch operations.  

You can read the full article here: "Better Tank Data Drives Better Fuel Management" 

 Any questions, feel free to give us a shout. 

 

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Topics: remote tank monitoring, fuel management

Accidents Happen - EPA Spill Highlights Difficulty of Mine Decontamination

Posted by Ed Burke on Aug 12, 2015 1:31:32 PM

Person sitting next to a river with a river warning sign in the frame

(Photo: Alexa Rogals, The (Farmington, N.M.) Daily Times)

Earlier this week, while an EPA team worked to stem a leak from the Gold Medal mine in Colorado, an abandoned mine not operational since the 1920s, a pressure fluctuation caused hundreds of thousands of gallons of contaminated water to spill into the Animas River. This river feeds into the Colorado River – a main water supply source for the West.

All eyes are on the river now, but the Federal government has been working to cleanup and stop mine runoff for decades. An estimated 40% of waterways in the region have some level of heavy metals contamination from such runoff. In fact, the ruptured mine was being worked on in the first place because testing by the EPA showed that contamination levels were rising to a level that impacted aquatic life.

It turns out that there are an estimated 20,000 abandoned mines in Colorado and up to 500,000 throughout the West. Surprisingly, until late into the 20th century (1970) there weren’t many regulations on mining – meaning essentially anyone could start mining anywhere. As a result, when there were mining booms throughout the West, once a mine either didn’t yield or was exhausted, it was simply left there. As time goes on, water builds up within the mines and leaks into waterways and the surrounding environment, carrying with it, heavy-metal contaminants that could be dangerous in high concentrations.

One of the issues that has made mine cleanup such a slow process is that under the Clean Water Act, you’re legally and financially liable for spills even if it happened inadvertently in a cleanup effort, so stemming the pollution from the mines and handling the arduous process of decontamination has fallen solely on the EPA, and there are simply too many mines to fully decontaminate them all quickly.

It’s also an issue of cost – fully neutralizing the mine involves treating the trapped water to safe levels then releasing it, repeatedly, to the tune of about a million dollars a pop, essentially forever.

A “Good Samaritan” provision has been repeatedly proposed as an addition to the Clean Water Act, so other environmental groups can begin working on mine decontamination as well. Ironically, it sounded like a better idea before the spill than after. It’s hard to imagine an immediate pond containment system to control damages going in as quickly as the EPA was able to do. 

The release has certainly put the EPA and their cleanup response in the spotlight.

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Topics: EPA, emergency response

Obama, EPA Announce First-Ever Federal Limits on Power Plant Emissions

Posted by Ed Burke on Aug 6, 2015 2:16:38 PM

Climate change definition in a dictionary

 

On Monday (August 3rd), President Obama unveiled his latest initiative to combat Climate Change, in the form of new proposed regulations on power plant emissions. The plan would reduce emissions from power plants to 32% below the 2005 benchmark levels by 2030 (by 870 megatons). This is the first time federal limits on this type of emissions would be enacted, and the EPA’s Clean Air Act is cited by the administration as allowing for said federal limits.

From the EPA press release on the new regulations:

“By 2030, the plan will cut carbon pollution from the power sector by nearly a third and additional reductions will come from pollutants that can create dangerous soot and smog, translating to significant health benefits for the American people. By 2030, emissions of sulfur dioxide from power plants will be 90 percent lower and emissions of nitrogen oxides will be 72 percent lower, compared to 2005 levels”

(You can read the full EPA Press Release here: EPA Newsroom )

The estimated cost of the program is $8.4 billion annually, according to an EPA spokesperson, and the benefits are projected to be between $34 and $54 billion per year, including health benefits.

Under the rule, individual states must draft and adopt compliance plans by 2018 and meet initial projected targets by 2022.

Industry groups and officials are obviously not thrilled with the new rule, citing potential billions in infrastructure costs associated with moving away from coal power generation. Additionally, the plan includes a target of the US generating 28% of its power via “renewable” sources versus the current 13% level – this does not include natural gas, and further complicates how exactly states and utilities can make changes to hit these targets.

The earlier draft in 2014 included more assumptions that the move would be from coal to natural gas (which generates around a 50% reduction in carbon emissions), this ruling in that regard is even more cumbersome, with the additional costs and difficulty of going from coal to wind, solar, or nuclear – when it's already expensive to go from coal to natural gas.

Critics are citing this as another example of the “War on Coal” and Legislators from coal heavy states cite job and revenue hits they believe the new rule will cause. Some Attorneys General have already signaled they are filing suit, arguing the rules go far beyond the Clean Air Acts provisions, and some states have declared they will refuse to follow the guidelines.  Of note however, is that recently the Supreme Court ruled in favor of the EPA re: the Clean Air Act and methane regulations, and it may very well do so again on this case.

We shall see - stay tuned!

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Topics: natural gas, President Obama Address, EPA, carbon emissions, clean air act, power plant emissions, coal

Obama Admin,EPA to Propose New Fuel Standards for Trucks Today

Posted by Ed Burke on Jun 19, 2015 12:30:00 PM

Semi-truck driving at dusk

The Obama Administration, EPA and DOT are set to unveil new proposed regulations today aimed at reducing fuel use and curbing emissions in trucks as part of the push for regulations aimed at stemming Climate Change.

The Climate Change proposals, in addition to the new trucking regulations, will include new regulations on airplanes, power plant emissions reductions, and more restrictions on methane emissions from the oil and gas industry (for a quick refresher there: Methane & Consumers giving Natural Gas Headaches ).

The new trucking regulation proposal will be open to comment, and finalized as a rule next year. 

Under the proposal as it currently stands, truck manufacturers will be required to increase fuel efficiency by 1/3. This would apply to all 2019 and later model year trucks. The EPA is ballparking the required changes to those trucks to cost approximately $12 thousand dollars per vehicle, but they argue that the amount of money from fuel savings would offset that cost in 18-24 months. 

The regulations regarding DEF and SCR Technology effective in 2010 have already made trucking emissions cleaner than some of its gasoline counterparts (for more on that check out:This Ain't Your Grandpa's Diesel Truck ).  This additional measure is intended to complete the cycle so to speak, and deal with the perceived lack of fuel efficiency of trucks, especially 18 wheelers, and other heavy-duty and/or heavy-use vehicles like garbage trucks, delivery vehicles, and even heavy-duty pickup trucks.

According to the New York Times, the manufacturing industry is split essentially down the middle on the issue, with half concerned about the cost, logistics, and potential safety impacts. The other half seem to be on board and believe the plan is feasible by 2019 model year roll out. 

What say you?

 

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Topics: EPA Mandate, carbon emissions, emissons, fuel efficiency

ASTM Spec for Higher Bio Blends Moves Heat Towards Lower Carbon Future

Posted by Ed Burke on May 26, 2015 1:48:24 PM

Chalkboard image with Biofule in focus

ASTM International released its new spec for 6-20% bio blended heating oil (BioHeat) this past March. The prior spec only covered blends of up to 5% - like those you can pull from many racks now. 

This change comes as the rolling sulfur reductions in many New England and Northeast states is beginning. Most of these states are dropping sulfur to 15ppm by 2018, with some already at that level for heating oil (ie New York).

These changes in tandem are a huge push forward for the industry on both reducing emissions, and moving to a more environmentally friendly, domestically produced, bio blended product.

The hope is having an official ASTM spec for higher blends of Bio will encourage use of those blends to grow, because it will eliminate the uncertainty of product quality for consumers, dealers, and marketers. Additionally, the spec will allow manufacturers and OEMs to determine what blend their equipment can support, and they will be able to make adjustments to adapt to higher blends in an educated and informed manner.

There is less concern environmentally with moving to higher bio blends than we see with ethanol blends, because biodiesel can be produced from recycled grease, animal fats - essentially waste stock versus being 100% derived from virgin food crops (ie soybeans), whereas that is not the case for ethanol, which has been haunted by food vs fuel impacts. 

I wrote an article for the May issue of Oil & Energy Magazine on the topic of the new Bio spec and the move to cleaner heating oil, which you can read in full by clicking here:  "Transforming Heating Oil for a Low-Carbon Future"

 

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Topics: Oil & Energy Magazine, Bioheat, Biodiesel, astm

RFS Battles Continue on Ethanol and E15

Posted by Ed Burke on Apr 21, 2015 3:59:45 PM

Container of corn kernels with a Biofuel sticker affixed

This week, Ethanol activists in Chicago used the 20th anniversary of the BP Oil Spill in the Gulf to push for approval of a pending mandate that would require self-serve stations with over 850,000 gallons in annual sales volumes to carry E15, given they had the proper infrastructure for the blend. They argued that companies will "keep on spilling" and that made it imperative that the push continue towards higher blended, "cleaner" ethanol.

On the flip side, on April 21st, major petroleum groups API and AFPM requested the EPA ban the sale of E15 as a flex fuel. E10 Ethanol has a 1 psi volatility waiver that allows it to be RVP compliant in summer months. E15 is not compliant, however. The argument then is that stations, etc, are using E15 as a flex fuel in the summer months to avoid having to comply with RVP regulations.

The EPA is expected to formally announce the RFS volume requirements any day now, but even prior to the announcement there is action on the RFS in the legislature. House Bill HR 701 would cap ethanol at 10% blends, and rescind the EPA's approval of E15 blends. 

Another part of the bill states that target numbers for cellulosic ethanol goals need to be production based, which obviously makes sense, since one of the major issues with the RFS has been the cellulosic mandate in the face of a complete lack of cellulosic production.

I wrote an article for this months Oil & Energy Magazine detailing the growing dissension between RFS involved groups, impacted industries, the EPA and the Government - you can read that article here:

"Dissension Grows over Biofuels Rules"

 

 

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Topics: Ethanol, EPA Mandate, Cellulosic Ethanol, RFS

Infrastructure on the Agenda

Posted by Ed Burke on Mar 31, 2015 12:16:19 PM

Abstract view of the cockpit of a semi-truck driving on the highway

Energy Infrastructure is one of the topics essentially absent from the Congressional agenda at the moment, with the exception of continuing efforts to pass a Keystone XL bill. As you recall, the last bill successfully passed the House and Senate, only to be vetoed by President. It ultimately died in the Senate where it lacked the votes to override said veto. 

What's interesting is the legislature is dealing with a lot of infrastructure and transportation structure and funding issues (the Highway Trust Fund, Supply Chain issues on the West Coast, EPA Clean Power Limit Proposals, etc) but has somewhat neglected looking at energy infrastructure as a stand alone concern.

One of the EPA proposals under review, the "Clean Power Plan" which seeks to limit carbon emissions from existing power plants. The proposal would spike electricity rates further, and rate payers would also be on the hook for the upgrades needed to comply with the proposal if it goes through in its current form. 

This is especially bad for New Englanders who have recently been dealt a 37% rate hike on electric utility rates (read more on that here: MA Rate Hikes). New Englands issue is a lack of infrastructure on the natural gas side, somewhat ironically. 

I wrote an article for the March issue of Oil & Energy Magazine on Infrastructure policies under review and how a lack of forward progress on them could slow economic growth. You can read the full article here: Infrastructure Shortfalls Could Slow Growth 

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Topics: Oil & Energy Magazine, Energy Infrastructure, Congress

Harvard finds Boston is Leaking $90 Million of Natural Gas Annually

Posted by Ed Burke on Jan 29, 2015 12:44:52 PM

Yellow caution tape reading, caution gas line buried below

A Harvard University study has concluded that 15 billion cubic feet of natural gas escapes the aging pipelines in Boston - an amount that means we're losing $90 MILLION dollars worth of natural gas through leakage annually. 

The problem with leakage, outside of the obvious environmental and health concerns, as well as the fact that consumers bear the cost of the leakage, is that this leakage is responsible for almost all of the methane emissions given off by the city. As we've discussed previously, methane has a 25 times larger impact on the environment than carbon, and for that reason it's been the focus of new proposed regulations from the Administration and the EPA.

The suggested regulations however, are aimed at fracking companies, which over the past year have shown large declines in the amount of methane leaks, and leaks in general in four out of six of the major shale plays. The reason for that is at the production site, leakage costs the producer money in lost product.

The second sector that the regulations aim at (although they are "voluntary" in this case) is agriculture, which is responsible for the bulk of methane emissions. 

When you break down the numbers however, most emissions come from so called "super users", namely power plants etc., versus fracking sites or even intense agricultural production sites. And as studies like this point out, there is a lot of environmental impact happening passively through leaking in outdated pipeline systems, like those in Boston.

What this study points out on leakage, is that there may be a more efficient way to curb urban emissions of gas, and therefore methane, than imposing sweeping regulations on fracking sites, who already are self-motivated by profit to control product loss. That motivation is less present in urban areas, because the cost of pipe replacement and remediation is high, and the work is complicated to perform without disruptions in densely populated areas. Additionally, remediation of leaks in urban pipelines is a direct cost to the utility as well as the consumer, versus the cost-savings measure it is for upstream producers.

To their credit, both Massachusetts and National Grid have already been working on an accelerated pipeline replacement project. This program categorizes how risky leaks are and addresses them in an urgent to non-urgent priority order. This allows them to address the most critical leaks first, and move forward on remediation without undue and immediate cost burdens on the utility or the consumer.

 Essentially, studies like this point out there are emission control options downstream in addition to the ones happening upstream that can complete the picture and move the entire process forward in a more timely and efficient manner.

If you want to read a little more on the background of methane regulations proposed, or the prior study on leaks in Boston, you can do so here: "Methane and Consumers giving Nat Gas Headaches"

If you want more background on fracking and environmental impact, you can do so here: "US Carbon Emissions Still on the Decline - Guess Why?" 

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Topics: natural gas, EPA Mandate, Fracking, methane

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