Category Archives: natural resource management

energy policy, fossil fuels, fracking, national ocean politics, natural resource management, tar sands

FuelFix: Obama administration authorizes more natural gas exports

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http://fuelfix.com/blog/2013/09/11/feds-approve-lng-exports-from-dominion-cove-point-facility/

The Obama administration on Wednesday authorized a fourth company to broadly export U.S. natural gas, giving Dominion conditional approval to sell the fossil fuel abroad after processing it at a Maryland facility.

The Energy Department’s decision means that as long as it secures other required permits, Dominion Cove Point will be able to sell as much as 770 million cubic feet of natural gas per day for the next 20 years to Japan and other countries that do not have free-trade agreements with the United States.

With the Dominion Cove Point decision, the Obama administration has now authorized 6.37 billion cubic feet of liquefied natural gas to be sold to non-free-trade nations. Previously, the Energy Department has given export licenses to a Lake Charles, La. project, as well as the Freeport LNG project on Quintana Island, Texas, and, in 2011, Houston-based Cheniere Energy’s Sabine Pass facility in southwest Louisiana.

Exxon: Natural gas soon will overtake coal in global energy use

Sen. Ron Wyden, D-Ore., the chairman of the Senate Energy and Natural Resources Committee, urged the Obama administration to be more skeptical of future proposals to export natural gas harvested in the United States, lest the foreign sales drive up prices at home. Analysts broadly have predicted total U.S. natural gas exports might settle somewhere between 5 and 10 billion cubic feet per day.

“The United States is now squarely in the range that experts are saying is the most likely level of U.S. natural gas exports,” Wyden noted. “If (the Energy Department) approves exports above that range, the agency has an obligation to use most recent data about U.S. natural gas demand and production and prove to American families and manufacturers that these exports will not have a significant impact on domestic prices, and in turn on energy security, growth and employment.”

Critics of expanded natural gas exports — including some large industrial users of the fossil fuel — say more foreign sales could cause the domestic price to climb, hiking energy bills for manufacturing plants as well as households. Manufacturers who use the fossil fuel as a building block for plastics and chemicals also say higher prices could blunt a competitive advantage that has spurred them to move facilities to the United States.

But a government-commissioned study last year concluded that the United States would score big economic benefits by broadly exporting natural gas, with only modest domestic price increases for the fossil fuel.

And export enthusiasts say more foreign sales of natural gas would ensure new markets and demand that are essential to sustaining the current U.S. drilling boom. The government’s Energy Information Administration has predicted the U.S. will produce a record-setting 69.96 billion cubic feet of natural gas on average each day this year, driven largely by hydraulic fracturing techniques that involve blasting sand, water and chemicals underground.

Dominion aims to convert its existing Cove Point facility so it can liquefy natural gas and load the super-chilled product onto tankers. The facility was originally built as a terminal to receive and regassify tanker shipments of LNG, before today’s surge in domestic natural gas production largely negated the need for those imports.

The Energy Department’s action on Dominion comes roughly four weeks after the last LNG export authorization, a swifter timeline than some had anticipated, especially as analysts expect the bar for approvals to climb with each new approval.

Sen. Lisa Murkowski, R-Alaska, who has championed broader LNG exports, said she was “encouraged that the Department of Energy seems to have picked up the pace of its reviews.” But she noted that the Cove Point approval came nearly two years after Dominion first applied for the export license.

“The United States has a narrowing window of opportunity to join the global gas trade,” Murkowski said. “In order for us to take advantage of the geopolitical and economic benefits offered by selling American gas to our friends and allies overseas, projects like Dominion’s Cove Point must be approved without unnecessary delay.”

Dozens of LNG export facilities are planned around the globe, as companies in the U.S., Australia, Canada and other countries clamor for a foothold in Asian markets hungry for natural gas.

Environmentalists questioned the wisdom of the Dominion approval, saying it would tether the U.S. to fossil fuels for decades.

“Exporting LNG to foreign buyers will lock us into decades-long contracts, which in turn will lead to more drilling — and that means more (hydraulic fracturing), more air and water pollution, and more climate-fueled weather disasters like record fires, droughts, and superstorms like last year’s Sandy,” said Deb Nardone, director of the Sierra Club’s Beyond Natural Gas Campaign.

Twenty other export proposals are pending at the Energy Department, which is vetting the applications on a case-by-case basis, following an order that was set in December. In announcing its decision Wednesday, the Energy Department vowed to continue processing the applications individually, even as it continues “to monitor any market developments and assess their impact in subsequent” decisions.

Chairman: Houston port has record exports, but challenges remain

Next in line is a second application from Freeport LNG to export 1.4 billion cubic feet per day of natural gas, followed by a proposal from Cameron LNG for 1.7 billion cubic feet per day.

A federal law dictates that the Energy Department must affirm proposed exports are in the public interest before granting licenses to sell the fossil fuel to countries that don’t have free-trade agreements with the United States — a benchmark that tilts in favor of the foreign sales.

Even after companies have approvals and secure financing for the massive, multibillion-dollar liquefaction facilities, it can take years to build them.

Special thanks to Richard Charter

BP Spill, energy policy, fossil fuels, gulf of mexico clean-up, Gulf restoration, marine pollution, national ocean politics, natural resource management, ocean pollution, offshore oil, oil pollution

The Lens Opinion, Times-Picayune: Royalty-screwed: Big Oil likes to confuse severance taxes with cleanup costs

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Royalty-screwed: Big Oil likes to confuse severance taxes with cleanup costs

The Lens
Nola.com

OPINION By Mark Moseley, Opinion writer September 10, 2013 5:00pm

In August, Sen. Mary Landrieu argued that Louisiana deserves a greater share of oil royalty payments, maybe even rates equal to those received by mineral-rich states in the interior, such as Wyoming. With the additional proceeds from offshore production, Landrieu argues, the state can fund its urgent coastal restoration needs:

“Failure is no option. I don’t know if anybody knows where any other money is, but I don’t. If we do not get this [royalty] money, we cannot secure this coast and build the levees we need.”
In fact, Landrieu was well aware of another possible source of money. BP is about to be on the hook for a massive fines related to the 2010 oil spill, and Louisiana will use its share of those billions to jumpstart restoration projects.

Also, the Southeast Louisiana Flood Authority-East’s coastal erosion lawsuit against 97 oil, gas and pipeline companies had been announced in July and – importantly- Landrieu signalled tentative support when she said, “I think we should seek justice everywhere we can find it.”

In 2006, Landrieu successfully shepherded legislation that, beginning in 2017, will increase Louisiana’s royalties from our vast offshore assets. Unfortunately, a $500 million cap prevented the act from being the coast’s saving grace. Landrieu wants to rectify that by removing the cap.

State coastal czar Garret Graves identified increased royalties as a prong in the state’s strategically sequenced tripartite coastal strategy. (It’s a complicated affair.) The other two prongs include BP oil spill money (natch), and “battling with the Army Corps of Engineers over its management of the Mississippi River.” It’s apparently a delicately balanced little stratagem, and Graves is hopping mad at the flood authority lawsuit because it has disturbed the Jindal administration’s priority sequence of coastal restoration funding mechanisms.

One thing is clear, though: The Jindal administration, the oil and gas lobby, and presumably the majority of the state Legislature are not thrilled by the flood authority’s lawsuit. They would prefer that the state’s $50 billion Master Plan to restore the coast be funded through an increased share of oil and gas royalties.

The royalty issue takes on increased importance in light of BP’s recent transformation from “contrite to combative.” Perhaps alarmed by increased potential expenses related to the oil spill, the once-apologetic oil giant has gone from vowing to “make things right” to basically mounting a PR campaign to say it is being victimized by fraudulent Louisianans. Thus it seems that BP will not be paying additional fines or judgements, without first exhausting all of its legal options. And that will likely mean years of delay.

So the royalty option assumes more importance. And this suits the oil and gas companies fine. Restoring the coast with oil and gas royalties gives the illusion that oil giants are paying to fix the coast that they helped to disappear (by slicing it apart with pipelines and navigation channels).
However, they’re not paying anything more than than they used to. Increasing royalties for Louisiana come out of the federal government’s share, not Big Oil’s coffers. It’s additional money for the state, and less for the federal budget.

Flood authority vice chairman John Barry explained in his masterful Lens op-ed:
The industry wants it [the coast] fixed, but they want taxpayers to pay for the damage they did, either in taxes or flood insurance rates. If we succeed in getting a bigger share of offshore revenue, we’re getting it from the federal treasury. From taxpayers in Rhode Island and Oregon – and in Louisiana. The industry won’t be paying a penny more.

This gets to the heart of the royalty dilemma. The rhetoric surrounding the argument Landrieu makes for increased royalties for Louisiana – “we deserve our fair share” and “we need this money to fix our coast” – subtly conflates two different issues.

Royalties, or more accurately, severance taxes, are compensation for the right to extract non-renewable mineral wealth. It’s for removing mineral assets, like oil, that can only be exploited once. Royalties are not a repair cost for extraction, or compensation for environmental impact.

Everyone who touts increased royalties as the smart play toward funding the coastal reconstruction Master Plan is misleading you. They are trying to link royalties and coastal restoration in the public’s mind, as a solution to the problem.

Don’t be misled. Louisiana’s fair share of the mineral wealth is one issue. If we should get a larger percentage of revenues – the same share interior states receive – that would be wonderful.

However, oil and gas companies’ responsibility for our coastal mega-problem is a separate issue. We would deserve increased royalties even if the coast was healthy and flourishing like it was a hundred years ago. As Barry says, Big Oil should pay more to fix the coast that they helped break. If the state acquires more royalty funds and directs them to restore the coast, instead of other urgent needs, that’s still a tremendous sacrifice.

Granted, the odds are long against the lawsuit being successful. Even if it were, oil and gas companies, like BP, will probably use every legal and political device at their disposal to avoid paying judgments promptly. So, increased royalties might become one of Louisiana’s last best politically feasible solutions to fund coastal restoration.

But don’t be fooled, if that’s how it plays out. Taxpayer’s will be paying for the destruction of our coast by the world’s richest corporate sector. Big Oil had a chance to step up, and instead they let the “little people” -as a BP exec once called us- take the hit.

I call that getting royalty-screwed.

Special thanks to Richard Charter

energy policy, fossil fuels, national ocean politics, natural resource management, ocean pollution

Greenpeace: Greenpeace activists invade Shell refinery

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Christian Wenande
August 28, 2013 – 09:38
The action is a protest against Shell spearheading the search for oil in the vulnerable Arctic region
Around 40 Greenpeace activists, some dressed as polar bears, forced entrance to the Shell oil refinery in Fredericia this morning (Photo: Greenpeace)

Shell’s oil refinery in the Jutland city of Fredericia was invaded by about 40 Greenpeace activists dressed up like polar bears early this morning.

The activists forced entry to the Dutch oil giant’s refinery just after 6am and a group of them immediately began climbing up one of the refinery’s large silos , where they hung a banner featuring an image of the well-known yellow and red Shell logo juxtaposed with a polar bear’s face.

“We are here to reveal Shell’s true face. The company is leading the hunt for oil in the Arctic, despite having shown us that they are completely unable to protect the vulnerable environment and unique nature in Greenland and the rest of the region,” Helene Hansen, a 28-year-old activist, told Ekstra Bladet tabloid.

Part of a global campaign
The activist group in Fredericia includes Danes as well as individuals from Sweden, Norway, Finland, Italy, Germany and Latvia.

The police showed up at around 6:30am but as of two hours later no arrests had made.
The Fredericia action is the latest Greenpeace stunt aimed at taking on Shell’s hunt for arctic oil. In July, six activists climbed western Europe’s tallest building near Shell’s headquarters in London to display a ‘Save the Arctic’ banner, and last Sunday a 20-metre banner was unveiled during the Formula 1 Grand Prix in Belgium.

The Arctic: another Nigeria?
Shell is currently preparing a number of seismic examinations in protected sea areas in Baffin Bay, the body of water between Greenland and Canada. Whale experts have warned that the noisy seismic tests could threaten the population of whales in the area. In June, Denmark’s Arctic oil spill preparedness was found woefully inadequate by experts.

“Shell has already a displayed horrendous breach of security in Alaska, they’ve polluted the entire Niger Delta and now they’re getting ready for Russia and Greenland. The plans should be stopped so Greenland doesn’t become the next Nigeria,” Niels Fuglsang, a spokesperson for the Danish Arctic campaign in Greenpeace, told Ekstra Bladet.
Greenpeace is hoping that politicians in Greenland and Denmark step up and prohibit Shell’s tests before they commence over the next few months.

Special thanks to Richard Charter

fossil fuels, fracking, natural resource management, oil pollution, tar sands

West Virginia Public Broadcasting: WV, ND face similar environmental concerns with drilling industries

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http://www.wvpubcast.org/newsarticle.aspx?id=31440

Drilling
Ashton Marra
An advertisement advocating for flaring in the Bismarck, ND, Airport. State officials say they’re beginning to look at regulations to curb the practice in the Bakken shale region.

By Ashton Marra

August 28, 2013 · West Virginia and North Dakota have one thing in common – an economy that relies on extractive industry that each state taxes. Last week legislators from West Virginia met in North Dakota learn more about that state’s Legacy Fun, but as the meeting progressed, the focus changed from talk about the savings account to the industry.

The environmental concerns of the two states with very different topographies are similar when it comes to the oil and natural gas industries.

Shale is one common element when it comes to oil and gas extraction in the two states. West Virginia’s natural gas production is based on the hydraulic fracturing of Marcellus shale. In North Dakota, oil comes from the Bakken shale formation, and the portion of the Bakken situated in the state is about the same size as West Virginia.

As with any extraction industry, environmental concerns are always a high priority for the governments regulating them. North Dakota’s industry is regulated by the state Department of Mineral Resources.

“Right now, the environmental concern is flaring,” said Lynn Helms, the director of the department.

Flaring is the process through which natural gas and other byproducts are burned as waste at the well site before the crude oil reaches the surface.

David Manthos is with the Shepherdstown-based group SkyTruth which studies the effects of activities like mining, drilling and logging using satellite digital mapping technology. Manthos said Skytruth has seen the impact oil drilling has had in the Bakken region.

“Thirty percent of the natural gas produced in the Bakken is being flared and the annual emissions are equivalent to the annual emissions of one million automobiles,” he said Tuesday. “So, even if it’s working optimally, it’s producing enough carbon dioxide to offset some of the benefits we would hope to obtain by extracting natural gas.”

Manthos said the practice does not happen as often at wells in the Marcellus region because natural gas is the sought after resource, but one industry representative said it still occurs.

“We do some flaring, but we do it to burn off impurities,” said Corky DeMarco, Executive Director of the West Virginia Oil and Natural Gas Association. “They’re doing it because natural gas is a nuisance to them.”

DeMarco said those impurities are methane, butane, or associated gases that flow up from the ground with the frack water before the natural gas starts to surface, and if they’re not disposed of properly they can pose an explosive safety risk for works at well sites.

North Dakota’s Helms said DeMarco is right, natural gas can be seen as a nuisance for drillers who are after oil. Some forms of natural gas produced in the Bakken are more expensive to capture than they’re worth on the market so they burn them off, but the state is now starting to reassess the regulations surrounding the practice.

“I met with my Commissioners (of oil and gas) and told them that we’re at a stage in the Bakken and Three Forks where they need to reevaluate flaring policy and make some changes to reduce the amount of natural gas that’s being flared,” Helms said.

Both states deal with water issues as well. In fracking, chemical laced water is injected into the shale to release the gas or oil.

“The water issue is the most universal one across the board with hydraulic fracturing whether it’s here or at other locations,” Manthos said. “It’s the surface and groundwater contamination that could occur.”

In West Virginia, drilling companies run into the topographical challenge of finding flat land. They either have to build well sites in valleys close to streams or high on ridge tops. In both cases, the possibility of run off contamination has to be considered.

Run off is less of a concern on the flat plains of North Dakota, but both states share the issue of transportation, getting the water to and from the well sites.

Bakken shale is 20 percent salt, so tap water is used to dissolve it to get to the oil, but, much like West Virginia, the water is brought back up to the surface and trucked from the site.

Helms said it takes 2,000 truckloads of water to get just one well site on production in western North Dakota, prompting the state to look at other options.

“We’re trying to work with industry and get pipeline systems in place for moving the water to and from the wells. If we can do that number of truckloads goes from 2,000 down to 850,” he said. “So, we eliminate way over half of the truck trips and that will have an enormously positive impact on, not the truck industry, but obviously on dust, traffic and road infrastructure. Environmentally, it’s just absolutely the right thing to do.”

North Dakota plans to use public private partnerships to build many of the pipelines, but Manthos isn’t sure that is the solution for West Virginia.

“They’re at least a bigger engineering challenge to build pipelines. I do know there are locations where pipelines are being used and if that does reduce the amount of truck traffic than that by itself is progress,” he said, “but the fragmentation of constructing well pads, especially up and down some steep hillsides. So, there’s just as much of a concern that a hillside could slip in the process of building a pipeline.”

Still, Helms said all of the issues, environmental, economic and social, have to be balanced in order for the industry to be a success in any state.

“If you overemphasize environmental or social you can make it uneconomic. If you overemphasize the economics, you can make it something that is environmentally bad or socially bad for the people and all three of those have to be looked after.”

Special thanks to Richard Charter

fossil fuels, marine pollution, natural resource management, oil pollution

Motherboard.vice.com: ACID FRACKING–Oil Companies Want to Drop Acid in California

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http://motherboard.vice.com/blog/california-wants-to-drop-acid-for-oil
August 26, 2013

By Brian Merchant

Image: Flickr
Nobody seems to like fracking these days, so maybe they’ll like dropping acid better. That’s actually the strategy a crop of oil companies are planning to use to get at the vast store of oil underneath California’s Monterey Shale rock formation. There’s some 15.4 billion barrels of oil locked away down there, and oil companies are keen on fracking for it. Not only is fracking unpopular in the resolutely liberal state, but it’s simply not working well, either.

See, hydraulic fracturing-the practice of blasting a volatile chemical cocktail thousands of feet below the Earth’s surface-has been thoroughly demonized by rural landowners, environmentalists, and a persuasive documentarian or two. But practically nobody outside of the oil industry has even heard of its ascednent alternative, called “matrix acidization.”

Oil companies are fixing to drop huge amounts of hydrochloric or hydroflouric acid on subterranean rock formations, in order to dissolve the rock and clear the way for extraction.
“There’s a lot of discussion around the Monterey Shale that it doesn’t require fracking, that acidizing will be enough to open up the rock. I think it could be a way to unlock the Monterey,” Chris Faulkner, chief executive officer of Breitling Oil and Gas, recently told the San Francisco Chronicle.

But acidizing isn’t new. The practice has long been used to make old wells more efficient; oil companies flush acid through the pipes to clear out the gunk that gets stuck in the pipes; it’s like Drano for Big Oil; a big acid bath colon cleanse. As an official Haliburton document on acidization notes, “If a well is plugged with an acid soluble scale such as carbonate scale, then acid can be very effective at removing the scale and restoring production.”
Haliburton also explains that acidization can be used to amp up production. Matrix acidization can yield “a significant improvement in production over ‘non-damaged’ conditions,” according to the dcoument. “As such, carbonate acidizing can be truly thought of as stimulation.” In other words, using hydroflouric acid even when a well’s not jammed up can increase its productivity.

Of course, there are great dangers that come with acidization, too. A recent Next Generation report by Robert Collier points out that hydroflouric acid “is also one of the most dangerous of all fluids used in oil production-and indeed in any industrial process. It is used in many oil refineries nationwide to help turn oil into gasoline and other products; while accidents are rare, they can be fatal.”

Collier notes that righ now, “large amounts of HF (precise volumes are an industry secret) are routinely trucked around California and mixed at oilfields. Critics call it a disaster waiting to happen.” He also notes that there have been a handful of accidents already, but no major disasters. Nothing like the tragedy last year in South Korea, where a leak in a hydroflouric acid container claimed the lives of five oil workers and sent two thousand people to the hospital. It also dessicated crops and left a path of destruction in the area; the government was forced to declared the region a disaster zone.

A single Google search for ‘hydroflouric acid’ brings up dozens of images of gruesome acid burns, and will ensure you never forget how dangerous the stuff is-it will also remind you that it’s the stuff that Walter White is after in Breaking Bad, because it’s used to make meth, too.

And yet, as of now, acidization is almost entirely unregulated. As with fracking, oil and gas companies currently aren’t required to disclose exactly how and where they’re engaging in acidization. The industry has been hoping to keep a lid on the practice, keenly aware of the vitriol fracking has attracted from environmentalists, activists, and appreciaters of non-flammable water everywhere. As a result, no one is really sure which acids oil companies are using where, or how each company is actually engaging in acidization.

California state legislators hope to put an end to the secrecy, however. A group of lawmakers working on a bill to make fracking more transparent is aiming to include rules for acidization, too.

“We have to get this right,” state Senator Fran Pavley, the head of the senate committee on natural resources and water, said at a hearing in Sacramento, according to Reuters. “Regulators must also keep pace with changing technologies.”

Especially when that new technology involves dumping untold amounts of acid on California. Acidization may have been used to improve well output in the past, but it’s never, to my knowldedge, been used to dissolve enough earth to open up a 15 billion-barrel oil reserve. Oil companies are about to drop a hell of a lot of acid.

By Brian Merchant 8 hours ago

Special thanks to Richard Charter