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Time: The Unintended Consequences of Exporting Natural Gas

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The Unintended Consequences of Exporting Natural Gas

By Bryan Walsh
May 27, 20130

The best intentions during an election campaign have a habit twisting beyond recognition once a candidate is in power. I doubt when Barack Obama was teaching constitutional law at the University of Chicago he thought that, once in the White House, his Administration would be responsible for one of the most chilling crackdowns on the freedom of the press in recent American history. And yet, after the revelation of the Department of Justice’s wide-ranging move to seize phone records of AP reporters and a deeply disturbing investigation of the Fox News reporter James Rosen-seriously, read this-Obama’s legacy has been permanently altered.

I also doubt that the candidate who in 2008 ran on a cap-and-trade plan and promised to make climate change a top priority thought that he would go down as the driller-in-chief. And yet-without taking anything away from Obama’s very real accomplishments in supporting renewable energy and efficiency-that’s exactly what’s happening. Domestic oil and natural gas production have boomed under Obama’s watch, and even though he was hardly the cause-most of the new fracking is happening on private land largely outside federal regulation-neither had Obama done much to stand in the way, at least according to his increasingly frustrated environmental allies. Greens want Obama to stop the proposed Keystone pipeline and halt the expansion of fracked oil and natural gas-but as Obama begins his second term in earnest, that seems unlikely.

Take natural gas. For some time gas companies have been pushing the federal government to make it easier to export natural gas in liquified form (LNG) to foreign countries. This is itself a huge turnaround-less than a decade ago, domestic production of natural gas was so low that facilities were being built in U.S. ports to import foreign natural gas. The shale gas revolution, made possible by fracking, changed all that. Now the U.S. literally has more natural gas than it knows what to do with, and the price of gas has tumbled to around $4 per million BTU.

That’s great for U.S. utilities, which have taken advantage of cheap natural gas to close out old, polluting coal plants, helping them comply with environmental regulations while reducing U.S. pollution and carbon emissions. It’s also been good for American manufacturers-especially those in the chemical industry-who can take advantage of cheaper power and raw materials. But the glut of gas-and natural gas, unlike oil, can’t easily be stored-hasn’t been so great for one sector: natural gas companies themselves, which have begun complaining that drilling has is costing them more than they can make selling their product.

Econ 101: if your supply outstrips your demand, the only way to raise prices is to reduce your supply-something gas companies can’t easily do because their contracts on wells often require them to keep drilling to maintain the lease-or increase the demand. And since the demand for natural gas in the U.S. seems to be more or less maxed out, the best way to do that is to ship the gas to other countries where the price of natural gas is much, much higher. Like Japan, which has virtually no natural gas resources of its own, and which pays some $17 per million BTU-or more than four times what we pay in the U.S.-to import liquified natural gas (LNG).

So the news on May 17 that the Department of Energy (DOE) had given a terminal near Freeport, Louisiana-one originally built to import gas-permission to export LNG was met with approval by natural gas companies, even as chemical companies worried about the effect on prices and environmentalists worried that more exports would mean more fracking. In a statement after DOE approved the export terminal, Deb Nardone of the Sierra Club’s Beyond Natural Gas campaign said:

Exporting LNG will lead to more drilling – and more drilling means more fracking, more air and water pollution, and more climate fueled weather disasters like last year’s record fires, droughts, and superstorms. In today’s conditional authorization, DOE acknowledges that it has not yet considered any of these impacts, but that environmental effects must be considered before DOE can grant final approval.

But while there are legitimate environmental concerns about more natural gas drilling, there’s an economic value to exporting a product that can sell for far more abroad than it can at home. Let’s let Joe Nocera of the New York Times, in a May 18 column entitled “Energy Exports Are Good!” explain why exporting natural gas would be good:

Exporting natural gas has enormous benefits for the United States. Exports create jobs that are every bit as good as manufacturing jobs. They help our trade deficit. They tie us closer to important allies like Japan, which desperately need the gas. According to Michael Levi, the author of an authoritative new book, “The Power Surge: Energy, Opportunity, and the Battle for America’s Future,” the prospect that America could export natural gas has even helped our European allies gain leverage with its primary supplier of fossil fuels, Russia.

Nonetheless, it’s hard to see how exporting natural gas will help the environment, at least at home. The price for natural gas has begun to rise-and partially in response, utilities have begun switching back to burning polluting coal. Since January, utilities have been burning less gas, and coal now provides about 40% of U.S. electricity. That’s still a much smaller share than coal demanded a few years ago, but it’s a sign that pricier natural gas-which is significantly cleaner-burning than coal-will likely mean more carbon emissions. Export more natural gas, and that’s just what you might get.

In environmental policy-in all policy-actions can have unintended consequences, and take you places you never expected. Just ask the driller in chief.

VIDEO: TIME Explains: U.S. Energy Independence

Bryan Walsh @bryanrwalsh
Bryan Walsh is a senior editor at TIME.

Special thanks to Richard Charter

energy policy, fossil fuels, Keystone XL, marine pollution, national ocean politics, natural resource management, sustainable energy

Mother Jones: Grassroots Greens Challenge Environmental Defense Fund on Fracking

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Grassroots Greens Challenge Environmental Defense Fund on Fracking


→ Climate Change, Corporations, Energy, Environment, Regulatory Affairs

—By Kate Sheppard
| Wed May. 22, 2013 1:49 PM PDT

fracking_6

Michael G McKinne/Shutterstock.com

A coalition of grassroots environmental groups—plus a few professors and celebrities—issued a public message to the Environmental Defense Fund on Wednesday: You don’t speak for us on fracking.

The coalition of 67 groups released an open letter to EDF President Fred Krupp criticizing his organization for signing on as a “strategic partner” in the Center for Sustainable Shale Development (CSSD), a Pittsburgh-based nonprofit that bills itself as an “unprecedented, collaborative effort of environmental organizations, philanthropic foundations, energy companies and other stakeholders committed to safe, environmentally responsible shale resource development.” CSSD’s partners include Chevron, CONSOL Energy, and Shell. The partners have been working together on voluntary industry standards for hydraulic fracturing, or fracking, a controversial process used to extract natural gas from shale rock.

The groups that signed the letter included national organizations such as Greenpeace and Friends of the Earth, as well as regional environmental outfits such as the Ohio Valley Environmental Coalition and Catskills Citizens for Clean Energy. Actors Mark Ruffalo and Debra Winger also signed the document. They wrote:

The very use of the word sustainable in the name is misleading, because there is nothing sustainable about shale oil or shale gas. These are fossil fuels, and their extraction and consumption will inevitably degrade our environment and contribute to climate change. Hydraulic fracturing, the method used to extract them, will permanently remove huge quantities of water from the hydrological cycle, pollute the air, contaminate drinking water, and release high levels of methane into the atmosphere. It should be eminently clear to everyone that an economy based on fossil fuels is unsustainable.

Gail Pressberg, a senior program director with the Civil Society Institute, criticized EDF for a “willingness to be coopted” by industry in a call with reporters about the letter. “For too long, nationally-oriented groups have tried to call the shots on fracking,” she said. “These local people can and should be allowed to speak for themselves.”

EDF’s Krupp responded with his own letter on Wednesday, defending the group’s participation in CSSD and its record of “fighting for tough regulations and strong enforcement” on natural gas extraction:

Let’s be clear about where EDF stands. It’s not our job to support fracking or to be boosters for industry. That is not what we do. In fact, we regularly clash with industry lobbyists who seek to gut legislation protecting the public, and we have intervened in court on behalf of local communities and their right to exercise traditional zoning powers. We have made it clear that there are places where fracking should never be permitted. But if fracking is going to take place anywhere in the U.S.—and clearly it is—then we need to do everything in our power to protect the people living nearby. That includes improving industry performance in every way possible. In our view, CSSD, a coalition that includes environmental organizations, philanthropic foundations, energy companies and other stakeholders, is one way to do that.

Make no mistake: CSSD is not and never will be a substitute for effective regulation. Stronger state and federal rules, along with strong enforcement, are absolutely necessary. However, voluntary efforts can build momentum toward regulatory frameworks.

I’ve covered the sparring between EDF and grassroots groups over gas before. At the heart of it is that many of the grassroots groups want there to be no fracking, period. EDF’s position is that fracking is “never going to be without impact, never going to be risk free,” as EDF Vice President Eric Pooley described it to me, “but we’re also mindful that it’s happening all over the country.” Voluntary standards, Pooley said, are not the ultimate goal—but they can help reduce impacts in communities that already have drilling, and lay the groundwork for actual regulations. “How could we not, in good consciousness, want to engage if we see an opportunity to reduce impacts in communities?” he said.

For what it’s worth, both enviros and industry folks have berated CSSD for being too accommodating of the other side.

climate change, energy policy, fossil fuels, Keystone XL, natural resource management, sustainable energy, tar sands

San Francisco Chronicle: Keystone pipeline foes set for protests

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I agree that we should all do what we can to express our opposition to this insanity. DV

http://www.sfchronicle.com/politics/joegarofoli/article/Keystone-pipeline-foes-set-for-protests-4536853.phpKeystone protests

Michael Macor, The Chronicle
An El Sobrante man named Rick participates in civil disobedience training Saturday in Richmond.

By Joe Garofoli
May 22, 2013

Climate-change activists aren’t waiting to see what President Obama will decide on the most controversial environmental issue of his tenure – the Keystone XL Pipeline, which would carry petroleum extracted from the Canadian tar sands 1,700 miles across the U.S. to the Gulf of Mexico.

To call attention to the project and what they consider the government’s slow political response to climate change, tens of thousands of activists plan to get arrested in nonviolent civil disobedience across the nation in the coming weeks.

In small groups such as one that gathered in a Richmond storefront office last weekend, they’ve begun training for demonstrations aimed at key players in the Keystone decision.

They will begin at a Facebook shareholders meeting next month in Millbrae. Facebook founder Mark Zuckerberg started a political action committee that is supporting senators who favor the pipeline.
A larger protest will follow Aug. 3 in Richmond near the Chevron refinery.

“Things are getting worse,” said LaVerne Woodrow, a 51-year-old registered nurse who drove from Arroyo Seco (Monterey County) with her 26-year-old son to participate in the Richmond training Saturday.

Woodrow participated in various social justice marches when she was younger, but she has never been arrested at one before.

“I am a law-abiding citizen. Worst I ever had was a parking ticket,” Woodrow said. “But I live out in the country. I see the damage that’s being done to our environment.”

Promising action

More than 59,000 people have signed an online pledge to express their disgust and engage in what San Francisco-based pledge organizers Credo Action calls “serious, dignified, peaceful civil disobedience that could get you arrested.”

As the State Department analyzes the Keystone project before a final decision, expected this year, activists are corralling their energy into campaigns with names like “Summer Heat,” featuring street demonstrations the last two weeks of July, typically among the hottest days of the year.

Another group of environmental activists is plotting a campaign called “Fearless Summer” to protest various types of natural-resource extraction – from fracking to mountaintop removal to extract minerals.

Supporters of the Keystone pipeline say the project would bring much-needed jobs to the United States, where 11.7 million people are unemployed, according to the Labor Department. But while construction of the pipeline is estimated to create 42,100 temporary jobs, a State Department study projected it would add only 35 permanent jobs, mostly for pipeline inspection and maintenance.

Team in training

The four-hour Richmond tutorial was among the first of more than 1,000 training sessions that eventually will take place nationally, organizers say.

On Saturday, activists gathered in the Richmond storefront amid posters of past direct actions: “Against the Patriot Act,” “Wells Fargo: Reset Mortgages Now!” and “We are the port authority!” – from an Occupy demonstration at the Port of Oakland.

Many of the 15 people who attended the training had participated in civil disobedience before. Uniformly liberal, they needed few primers on climate change or why the pipeline was a bad idea, from their perspective.

“Why are we doing direct action?” instructor David Solnit, a longtime Bay Area activist who has protested internationally, asked the group sitting around a long, rectangular table.

“To piss off the powers that be,” volunteered one.
“To unite power behind us,” said another.

Handy tips

Solnit nodded, with a soft smile. Direct action protest not only “builds our power,” he said, but takes it from the 1 percent – the wealthiest of Americans.

Much of the afternoon was spent discussing and role-playing the mechanics of gumming up the gears of capitalism. Sprinkled throughout were practical tips on how to behave in the heat of nonviolent battle.

Start with the best way to sit together to block a building entrance.
Next to each other in a straight line? Bad idea. Security can pry away the weaker members, instructors said, as they demonstrated on such a chorus line.

Sitting in a circle? Better.

“But my back is kind of hurting sitting like this,” said one circle-sitter.

Handy tip: Sit back-to-back in concentric circles. Not only does it provide back support but it allows the activists to have a 360-degree view of the action. Plus, by putting the weaker members in the inner circle, it protects them from getting pried off.

When it comes to getting arrested, Solnit said, “the key thing to remember is, you always have choices.”

If you don’t want to be arrested, he said, leave when the cops tell you to disperse. “But when would be some times where you would want to be arrested?” he asked.
“To prolong the action,” said one man.

“To make a more dramatic statement,” said another.

Handy tip: Don’t wear contact lenses if you’re planning to get arrested. Pepper spray burns even more. Wear your prescription glasses instead.

Calming down

Much of the afternoon’s conversation involved “de-escalation” – how to bring down the temperature of tense confrontations. There is an art in talking nose-to-nose with the employee of a company you’re blockading. Start with saying, “This is a peaceful protest.”

Handy tip: If they’re yelling at you, match the level of their voice initially, then start talking softer. “And then they’ll start talking softer,” Solnit said.

When the training session ended, Tania Pulido was ready to hit the barricades. The Richmond resident is 23, a soon-to-be-senior at UC Berkeley and a direct-action rookie. Still, she’s a little worried about what might happen if she were to be arrested.

“It’s a risk,” she said. “I’m a student with a lot of loans. You never know what the government could do with those loans if you get arrested.”

Joe Garofoli is a San Francisco Chronicle staff writer. E-mail: jgarofoli@sfchronicle.com Twitter: @joegarofoli

Read more: http://www.sfgate.com/politics/joegarofoli/article/Keystone-pipeline-foes-set-for-protests-4536853.php#ixzz2U5asuj9T

_________

http://blog.sfgate.com/nov05election/2013/05/22/inside-a-civil-disobedience-training-session-video/

San Francisco Chronicle

Inside a civil disobedience training session (VIDEO)

In today’s Chronicle, we have a story about climate change activists training to engage in civil disobedience over the Keystone XL pipeline. They’re ready to roll on different protest campaigns with innocuous names like “Summer Heat” and “Fearless Summer,” but the message is clear:

Oh, it’s on.

Enviros are frustrated with the lack of political progress on halting climate change, and their anger is focused on the looming Keystone decision. A growing number of people – and not just the professional activist community – want to do something more than contact their member of Congress (who obviously aren’t listening) or post a quick rant on Facebook. That just ain’t enough, many tell me.

So let’s go to the barricades.

Naturally, this being the Bay Area, the trainings are ramping up here first. We checked out a training the other day in Richmond. Lot of role-playing. Lots. Down to some role-playing security officers wielding rolled-up foam “batons.”

Here’s the crew role-playing how they would blockade the entrance to a building. Let’s go to the video, courtesy of SFGate.com/San Francisco Chronicle’s Shaky Hand Productions:

In the next video is David Solnit – a longtime Bay Area activist who has demonstrated around the world – explaining the do’s and don’t’s of getting arrested.

Here’s a handy tip: Don’t ever touch a police officer, police dog or police horse in any way, instructors warned. One activist at the training hushed the crowd with a story about a fellow protester who pet a police horse during a demonstration. The protester, who was a horse lover, was charged with assaulting an officer.

Again, courtesy of San Francisco Chronicle/SFGate.com’s Shaky Hand Productions, is a peek at the training:

Special thanks to Richard Charter.

energy policy, fossil fuels, marine pollution, national ocean politics, natural resource management, ocean pollution, offshore oil, Uncategorized

Penn Energy: New Zealand Green Party fighting offshore oil drilling

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http://www.pennenergy.com/articles/pennenergy/2013/05/new-zealand-green-party-fighting-offshore-oil-drilling.html

May 20, 2013
By PennEnergy Editorial Staff

The Green Party in New Zealand is placing a bid on the government’s oil and gas exploration tender in an effort to stop offshore drilling expansions. According to Radio New Zealand, the government announced it opened three offshore areas of more than 72,900 square miles for oil and gas exploration permits.

The Green Party plans to submit a competing bid for the acreage in order to protect the area from deep sea drilling and offshore exploration. Radio New Zealand said the group is calling it the Kiwi Bid, and is encouraging individuals to join the cause to prevent the government from exploiting New Zealand’s environment.

Party co-leader Metiria Turei said the government will be given a choice from the Kiwi Bid – they can move forward with offshore oil drilling or accept the bid from New Zealanders who want to protect the beaches and ocean.

According to TVNZ, the government is accusing the Green Party of scaremongering because of their opposition to the drilling.

“The fact of the matter is we want to sensibly explore and develop our resources so that there are higher paying jobs for Kiwis,” said Energy and Resources Minister Simon Bridges.

Learn more about New Zealand’s gas markets in PennEnergy’s research area.

Special thanks to Richard Charter

climate change, energy policy, fossil fuels, Keystone XL, national ocean politics, natural resource management, tar sands

NBC News: Fracking boom triggers water battle in North Dakota

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http://openchannel.nbcnews.com/_news/2013/05/20/18376353-fracking-boom-triggers-water-battle-in-north-dakota?lite

130520-north-dakota-water-hmed-11a.photoblog600
Reuters
Steve Mortenson, the owner of the Trenton Water Depot in Trenton, N.D., reviews logs inside his depot on March 26.

By Ernest Scheyder
Reuters

WATFORD CITY, N.D. — In towns across North Dakota, the wellhead of the North American energy boom, the locals have taken to quoting the adage: “Whiskey is for drinking, and water is for fighting.”

It’s not that they lack water, like Texas and California. They are swimming in it, and it is free for the taking. Yet as the state’s Bakken shale fields have grown, so has the fight over who has the right to tap into the multimillion-dollar market to supply water to the energy sector.

North Dakota now accounts for over 10 percent of U.S. energy output, and production could double over the next decade. The state draws water from the Missouri River and aquifers for its hydraulic fracturing, the process also known as fracking and the key that has unlocked America’s abundant shale deposits. The process is water-intensive and requires more than 2 million gallons of water per well, equal to baths for some 40,000 people.

As in all booms, new players race in to meet the outsized demand. At the heart of this battle is a scrappy government-backed cooperative, conceived to ensure fresh water in an area where its drinkability is compromised.

The co-op has decided to sell 20 percent of its water to frackers to help keep prices low and pay back state loans. That has not gone down well with the Independent Water Providers, a loose confederation of ranchers, farmers and small businesses that for years has supplied fracking water.

Since opening in January, the co-op has tried to limit the power of the confederation with an aggressive legal and lobbying strategy. The Independent Water Providers have fought back, arguing that the co-op shouldn’t be selling fracking water at all. The state Legislature stepped in with a law last month designed to quell the tension and nurture competition, but industry observers expect the acrimony to continue.

“When all of us had nothing (before the oil boom), there was nothing to fight about,” said Dan Kalil, a longtime commissioner in Williams County, home to many oil and natural gas wells. “Now, so many friendships have been destroyed because of water and oil.”

Jeanie Oudin, an analyst with energy consultancy Wood Mackenzie, predicts the competition could push down North Dakota fracking water prices at least 10 percent in the next few years, or roughly $170,000 per well. That’s a sizeable savings in a state where fracking costs are the highest in the country (remoteness meant there was little infrastructure in place). The water accounts for 20 percent of the roughly $8.5 million it costs to drill a North Dakota oil well.

“Regardless of where operators get their water from, the growth in active water depots should increase the availability of raw water for hydraulic fracturing and ultimately bring down costs,” Oudin said. The depots are where energy companies buy most of their fracking water.

The North Dakota Petroleum Council, a trade group for Statoil, Hess, Exxon Mobil, Marathon Oil and other large energy companies, declined to comment on the fight or to forecast how much water prices could fall. The council acknowledged that it would prefer multiple sources for the state’s 8,300 wells.

Energy companies get most of their water in the state by trucking it from depots to oil and natural gas wells. Some wells require more than 650 truckloads to frack. Companies such as EOG Resources Inc and Halliburton Co are experimenting with ways to reduce their dependence on water.

Fracking water depots, which cost roughly $200,000 to build and can gross more than $700,000 per year, are typically small metal buildings on concrete slabs filled with pumps and small tanks connected to the Missouri River or local aquifers. They can have two to six hookups and fill water trucks with as much as 7,800 gallons of water per visit.

The government-backed co-op has nine water depots to hold the fresh water that is piped from the treatment plant in Williston, about 45 miles north of Watford. It plans to build four more depots throughout the Bakken and hugely expand its pipeline system to bring fresh water to more homes. Small lines from the new pipelines will connect directly to some oil wells.

On the other side, Independent Water Providers member JMAC Resources will build more water depots in the region and a massive pipeline just south of the Missouri River to supply oil wells. Other members of the group have also applied for depot permits.
North Dakota water suppliers do not pay for water, and the state Legislature rejected a proposed water tax earlier this year. Each side’s plans will rapidly increase the options that energy companies have to access water, further depressing prices.

Dangerous to drink
The co-op, officially known as the Western Area Water Supply Project, was designed to boost the quality of the water reaching western North Dakota homes. State studies for years had identified high levels of sodium, sulfates and magnesium in the aquifers.

In Watford City, a dust-caked community of 2,000 dotted with oil-workers’ run-down RVs, the sodium level of the drinking water had been 18 times higher than the level recommended by the U.S. Environmental Protection Agency. “You would drink (it) and get high blood pressure,” said Mayor Brent Sanford.

The high chemical content convinced Watford City officials in 2010 to support the co-op as it was being organized, Sanford said.

By selling 20 percent of its water to frackers, the government-backed co-op hoped to keep water prices for homes low and generate enough revenue to pay back $110 million in state loans for the project. The co-op sells water to frackers at roughly 84 cents a barrel, compared to 21 cents a barrel for homes. (One barrel equals 31.5 gallons, or about 119 liters.)

Denton Zubke, the co-op board’s chairman and a credit union president, has defended the co-op’s right to sell water to frackers as the independent ranchers and farmers decry what they see as government overreach into a private industry.

“Free enterprise was never going to bring potable water supply to rural parts of North Dakota,” said Zubke, who also operates a private water depot. “The only way we foresaw putting these water pipes in the ground was to pay for them with industrial (fracking) water sales.”

More than 230 million gallons of water flow every day past the Williston plant, and the co-op itself doesn’t expect water demand from homes to exceed capacity until at least 2032, calming any shorter-term concern about fracking’s taking water away from human uses.

Closest is best
Steve Mortenson, the Independent Water Providers’ chairman, says he supports the co-op’s clean-water mission but believes private industry is best equipped to provide fracking water. “We don’t feel we should have state-backed competition,” he said. “We never expected they would use the leverage of government to oppose private business.”

Confederation members can chose at what price to sell their water; most sell at 50 cents to 75 cents per barrel. Mortenson sells at 65 cents per barrel at his depot in Trenton, a bedroom community on the state’s western edge.

Mortenson, a soft-spoken rancher, offers washers, dryers, showers and free snacks at his depot as a gesture to the truck drivers who bring him business. Energy companies typically choose water depots closest to well sites to save on fuel costs, even if the price is higher than rival sites farther away. That has driven the building of even more water depots around the Bakken.

Zubke disputes the Water Providers’ claim to be any better at selling fracking water. He fears expansion by the independents could jeopardize the co-op’s ability to pay off its debt. Using a complex Depression-era federal law known as 1926(b), he and other co-op officials have been sending cease-and-desist letters to some confederation members throughout North Dakota. They’ve also lobbied state officials –so far, unsuccessfully — to deny water permits to some independents.

Despite the contentiousness — call it fracktion — the Independent Water Providers and the co-op are sticking with their plans.

“We don’t want to profit from the water,” JMAC owner Jon McCreary said. “We want to profit by selling the infrastructure to deliver the water.”

Special thanks to Richard Charter