Tag Archives: International Energy Agency

U.S. Government Just Approved an Enormous Oil Pipeline

Repost from Mother Jones

The Government Quietly Just Approved This Enormous Oil Pipeline

Four reasons why people are outraged.

By Alexander Sammon, Aug. 12, 2016 6:00 AM
ewg3D/Thinkstock

It took seven years of protests, sit-ins, letter writing, and, finally, a presidential review to prevent the Keystone XL oil pipeline from being built. Now, in a matter of months, America’s newest mega-pipeline—the Dakota Access Pipeline Project (DAPL)—has quietly received full regulatory permission to begin construction. Known also as the Bakken Pipeline, the project is slated to run 1,172 miles of 30-inch diameter pipe from North Dakota’s northwest Bakken region down to a market hub outside Patoka, Illinois, where it will join extant pipelines and travel onward to refineries and markets in the Gulf and on the East Coast. If that description gives you déjà vu, it should: The Bakken Pipeline is only seven miles shorter than Keystone’s proposed length.

The proposed route of the recently approved Bakken Pipeline – Dakota Access

The $3.78 billion project is being built by Dakota Access, LLC, a unit of the Texas-based Energy Transfer Partners. (Former Texas Gov. Rick Perrya friend of Iowa Gov. Terry Branstad, sits on ETP’s board.) According to the firm, the Bakken Pipeline will transport up to 570,000 barrels of crude oil per day. Advocates have celebrated the supposed 12,000 jobs the pipeline will create in construction, while repeating calls to end American dependence on foreign oil—a platform called into question by new laws allowing US producers to export crude. The US Army Corps of Engineers gave its blessing at the end of July, clearing the final hurdle for the massive infrastructure project, which is slated to be operational by the fourth quarter of 2016.

Though the project hasn’t gotten too much national media attention, there’s been plenty of local opposition. Groups like the Bakken Pipeline Resistance Coalition, a collective of 30-plus environmentalists’ and landowners’ associations, along with Native American groups, have cried foul. Here are the four things they’re most outraged by:

How many jobs…really: According to Dakota Access’s DAPL fact sheet, the pipeline will create 8,000 to 12,000 construction jobs. An earlier draft of those figures claimed 7,263 “job-years” to be created in Iowa alone. Not so fast, says professor David Swenson, associate scientist in the Department of Economics at Iowa State University. Swenson crunched the numbers himself and came to a much more modest conclusion: 1,500 jobs total per year in Iowa for the course of construction. And given that most of these jobs are skilled, Swenson expects many of the hires will be from out of state, as Iowan contractors specializing in large-scale underground pipe-fitting and welding are scarce. The long-term forecast for job creation is even bleaker. The Des Moines Register reports that there will only be 12 to 15 permanent employees once the pipeline is completed. (DAPL has since walked back its job estimate slightly.)

Spill, baby, spill: As Sierra Club’s Michael Brune puts it, “It’s not a question if a pipeline will malfunction, but rather a question of when.” And, though they spill less often than trains do, the International Energy Agency found that pipelines spill much more in terms of volume—three times as much between 2004 and 2012. The Bakken Pipeline’s route takes it through active farmland, forests, and across the heartland’s major rivers: The Big Sioux, the Missouri, and the Mississippi, some with multiple crossings, though the US Fish and Wildlife Service claims that no “critical habitat” is endangered. It also runs through sacred Native American lands (more on this below).

Enbridge Inc., a stakeholder in the Bakken pipeline, has a speckled track record on spills. In 2010, an Enbridge pipeline spilled 1.2 million gallons of crude into the Kalamazoo River, one of the worst inland spills in American history. Because the pipeline qualifies as a utility (despite being privately owned and for-profit), the Army Corps of Engineers was able to certify it without performing an environmental impact statement, as all utilities projects qualify as “minimal impact.” These projects are subject to environmental assessments every five years.

Don’t tread on me: Private property owners, particularly in Iowa, have bristled at the Bakken Pipeline’s expropriation of land. ETP asked the Iowa Utilities Board to grant it the powers of eminent domain, the process by which a government can repossess private property for public use even if the private property owner does not voluntarily sell. The IUB, a three-person committee appointed by Republican Gov. Terry Branstad, granted ETP that right for its for-profit private pipeline, a practice that is not uncommon, in order to purchase 475 parcels from resistant landowners. This has led to numerous pending lawsuits, with the Des Moines Register reporting that the issue may make it all the way to the Iowa Supreme Court. In May 2015, ETP was embroiled in scandal after a contracted land agent, working on behalf of the Bakken Pipeline, allegedly offered an Iowan landowner a teenage prostitute in exchange for voluntary access to his property. (No charges were brought after the Iowa Department of Criminal Investigation determined that the case did not meet the legal standard for pimping, solicitation, or conspiracy.)

DisRezpect: The pipeline will cross through sacred lands and pass under the Missouri River twice. For the Standing Rock Sioux, the Missouri provides drinking water and irrigation, while its riverbanks grow innumerable plants of cultural import, including sage and buffalo berries. The tribe launched a campaign called “Rezpect Our Water” and staged a 500-mile relay race in protest, hoping to sway the Army Corps of Engineers in the permitting process. Last weekend, a group of 30 Native youth completed a three-week run from North Dakota to Washington, DC, where they delivered a petition of 160,000 signatures opposing the pipeline’s construction.

Now, even though the Corps has given the go-ahead, the tribe has not given up the fight. They recently filed suit against the Corps in federal court. The suit seeks an injunction, asserting that the pipeline will “damage and destroy sites of great historic, religious, and cultural significance,” a violation of the National Historic Preservation Act.

Though the pipeline seems to be a done deal, resistance of all types continues. Last week, the Des Moines Register reported that authorities are investigating suspected arson against the ETP’s heavy machinery. The fires, three separate incidents across two Iowa counties, resulted in nearly $1 million in damage to bulldozers and backhoes. The acts appeared to be intentional incidents of monkeywrenching.

On Thursday, a group of protesters, including the Standing Rock Sioux and their allies, gathered in North Dakota to oppose the pipeline, blocking the construction site. The police ultimately broke up the demonstration, resulting in at least five arrests.

No Dakota Access pipeline from Camp of the Sacred Stones blockade @POTUS@FLOTUS@USACEHQ
2:03 PM – 11 Aug 2016

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    NY Times: Outlook for Oil Prices ‘Only Getting Murkier,’ Energy Agency Says

    Repost from the The New York Times

    Outlook for Oil Prices ‘Only Getting Murkier,’ Energy Agency Says

    By Stanley Reed, April 15, 2015
    Royal Dutch Shell is expecting prices to recover much of their recent drop over the next few years. It projects prices to hit $90 a barrel in 2018. Chris Ratcliffe / Bloomberg

    LONDON — The outlook for oil prices is still uncertain after the sharp fall that began last summer, the International Energy Agency said on Wednesday.

    Given the price collapse, “one might be hoping for more clarity on supply and demand,” the agency acknowledged in its monthly Oil Market Report, which was released on Wednesday. “Yet in some ways, the outlook is only getting murkier.”

    Oil prices, which have fallen about 50 percent since June, rose after the report and a separate United States government report that said that American crude stockpiles had risen less than expected.

    The international benchmark, Brent crude, was up about 3 percent on Wednesday, to $60.35, while its American counterpart jumped more than 5 percent to about $55.97.

    The agency’s report reflects a broad debate inside and outside the oil industry about where prices might eventually settle.

    Citigroup, for one, expects prices to continue falling in the coming months, as output remains high, supply is building up and investors who had helped prop up prices begin to sell.

    “While prices have held relatively firm, there are significant signs of weakness ahead,” Citigroup said in a note to clients on Tuesday.

    Royal Dutch Shell, the oil giant that announced an almost $70 billion takeover of the British oil and gas producer BG Group last week, is expecting prices to recover much of their recent drop over the next few years. It projects prices to hit $90 a barrel in 2018.

    As the International Energy Agency noted, competing forces are still playing out in the market, making the direction difficult to discern. Low prices have stimulated higher-than-expected demand for oil products in China, India and even Europe, which has been plagued by lethargic economic growth, the agency said. But whether that increased consumption is a “temporary aberration” remains to be seen, it added.

    There is much uncertainty, for instance, over future crude demand from China, which on Wednesday reported economic growth of 7 percent, the weakest rate since early 2009.

    Supply is also hard to gauge. While there are signs that low prices are beginning to have an impact on the production of oil from shale rock, overall oil output in the United States is expected to grow this year, the agency said.

     

    In addition, the Organization of the Petroleum Exporting Countries is showing no signs of backing away from the policy, backed by Saudi Arabia, of holding onto market share regardless of falling prices. OPEC production rose almost 900,000 barrels a day in March from a month earlier, the agency said, as Saudi Arabia increased production to more than 10 million barrels per day.

    Among the uncertainties in the market is the potential effect on oil supplies of a proposed nuclear accord with Iran, a major producer, the agency said. International sanctions have sharply reduced the country’s sales of oil, and an accord is expected to ease, or lift, those sanctions.

    While it would take time for Iran to organize the enormous investment that would be required to sustainably bolster its production capacity, the agency said that the country might be able to make short-term changes to increase output and exports relatively quickly.

    For instance, the agency said, Iran has 30 million barrels of oil stored on tankers, which could quickly feed an increase in exports. The agency also estimated that Iranian oil fields could ramp up production to as much as 3.6 million barrels a day, a 29 percent increase, within months of sanctions being lifted.

    Specialists have been working at some of those sites, and “some of Iran’s core fields,” which were run down, may already have been revived, the agency said.

    Under the pressure of sanctions, both Iranian production and exports have been curbed. Exports are down about 50 percent since 2012, to an average of around 1.1. million barrels a day, though they rose to 1.3 million barrels a day in March on high demand from China.

     

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      First Phase of Global Fracking Expansion: Ensuring Friendly Legislation

      Repost from Inter Press Service
      [Editor: Significant quote: “’Under pressure from the fossil fuel industry – which has deep pockets and promises employment and investment – several governments have already started to weaken their environmental legislation, alter their tax regimes and put in place industry-friendly mining licensing and production processes, in order to attract foreign investors and expertise….’”  See especially U.S. government promotion below.  – RS]

      First Phase of Global Fracking Expansion: Ensuring Friendly Legislation

      By Carey L. Biron
      Fracking fluid and other drilling wastes are dumped into an unlined pit located right up against the Petroleum Highway in Kern County, California. Credit: Sarah Craig/Faces of Fracking
      Fracking fluid and other drilling wastes are dumped into an unlined pit located right up against the Petroleum Highway in Kern County, California. Credit: Sarah Craig/Faces of Fracking

      WASHINGTON, Dec 1 2014 (IPS) – Multinational oil and gas companies are engaged in a quiet but broad attempt to prepare the groundwork for a significant global expansion of shale gas development, according to a study released Monday.

      Thus far, the hydraulic fracturing (or “fracking”) technologies that have upended the global gas market have been used primarily in North America and, to a lesser extent, Europe. With U.S. gas production in particular having expanded exponentially in recent years, however, countries around the world have started exploration to discern whether they, too, could cash in on this new approach.

      According to an estimate published last year by the U.S. Energy Information Administration, some 90 percent of the world’s shale gas could be found outside of the United States – an incredibly lucrative potential. “It’s likely there will be a revolution,” Maria van der Hoeven, the executive director at the Paris-based International Energy Agency, has said.

      Yet according to the new study, from Friends of the Earth Europe, a watchdog group, only Brazil has strengthened its regulatory regime in anticipation of this expansion. Of the nearly dozen countries the new report looks at, most are doing the opposite.

      “Under pressure from the fossil fuel industry – which has deep pockets and promises employment and investment – several governments have already started to weaken their environmental legislation, alter their tax regimes and put in place industry-friendly mining licensing and production processes, in order to attract foreign investors and expertise,” the report states. “This is often at the expense of the public interest.”

      In terms of production this remains a nascent industry. Nonetheless, neither governments nor companies appear to have undertaken efforts to guard against the complexities that will arise, including around the potential for social, environmental and even political tensions.

      “The industry is trying to change the legislation in those places where they want to operate, to try to repeat as much as possible the favourable policies we’ve seen in U.S. energy policy,” Antoine Simon, a shale gas campaigner with Friends of the Earth Europe and lead author on the new report, told IPS.

      “The key here is to ensure that the legal frameworks are as friendly for the industry as possible. That’s the first phase of this global strategy, and we’re seeing it in each country we studied.”

      No safeguards

      Outside of North America and Europe, Argentina has moved forward the quickest on shale gas development, and thus offers a key example on legislative action for which companies may be looking.

      For instance, Argentina has put in place a new law guaranteeing a minimum price for fracked gas. Further, this minimum price is some 250 percent higher than the previous valuation – a sweetheart guard against the bottomed-out prices that are currently impacting on gas production in the United States.

      Simon says this law has a telling nickname in Argentina – the “Chevron Decree”, a reference to the U.S. oil and gas company. The day after the law was passed, he notes, Argentina’s main state-backed oil and gas producer signed a long-term production deal with Chevron.

      Other countries have put in place favourable new tax policies for oil and gas investors. In Morocco, for instance, producers will be exempt from corporate taxes for the first decade of operation, while Russia has created similar policies for oil production over the next 15 years.

      Yet the lack of action to simultaneously put in place environmental or social safeguards in most countries runs a variety of risks, Friends of the Earth Europe and others warn. Hydraulic fracturing requires massive amounts of water, for instance – up to 26 million litres per drill site.

      The new report finds that a significant proportion of shale gas reserves around the world are located in areas that are already experiencing significant water shortages and even related violence. Likewise, many of these shale basins are beneath major cross-border aquifers.

      Even before these issues are addressed by national governments, then, the oil and gas industry could gain influence in setting policy on the notoriously contentious issue of freshwater use.

      Alongside concerns about the local impact of shale gas development is a broader lack of clarity today on the extent to which developing countries would be able to benefit from any new gas-related revenues. Thus far, only Brazil has specifically addressed this issue.

      “In our research, Brazil was the only exception in terms of passing legislation that ensured they would get some significant revenues,” Simon says. “Really that doesn’t seem to be happening in other countries, where instead we’re seeing a lot of legislation that offers state aid to push investors to come to their countries.”

      Beyond a few notable exceptions in Latin America and South Africa, Simon suggests that this issue has not yet seen significant opposition by civil society. Still, advocacy groups do point to a growing trend of global understanding and mobilisation on fracking concerns.

      “As more and more studies confirm the risks of air pollution, water contamination, increased earthquake activity and climate change impacts from fracking, the more people oppose this destructive and intensive process,” Wenonah Hauter, the executive director of Food & Water Watch, a U.S. watchdog group, told IPS.

      “The movement to ban fracking has resulted in hundreds of local communities taking action to stop fracking, several states and countries instituting moratoriums, and the movement continues to grow.”

      In October, Food & Water Watch organized an international day of action to ban hydraulic fracturing. Hauter notes that the event featured “over 300 actions in 34 countries, from Australia to Argentina, even Antarctica, calling for a ban on fracking”.

      Food & Water Watch reports that France and Bulgaria have already banned hydraulic fracturing, while local moratoriums have also been passed by hundreds of communities across the Netherlands, Spain and Argentina.

      U.S. government promotion

      Meanwhile, the drivers behind fracking-related pressures are not simply multinational companies and national governments keen on investment. It was in the United States where hydraulic fracturing was invented and proved its potential, and today the U.S. government is reportedly taking a central role in promoting these techniques worldwide.

      In almost all of the countries studied for the new report, researchers found the development of shale gas to be “closely linked” to a U.S. government agency, the U.S. Unconventional Gas Technical Engagement Program (UGTEP). Housed within the U.S. State Department, since 2010 the UGTEP has engaged in a wide variety of technical assistance around gas development.

      “Governments often have limited capability to assess their own country’s unconventional gas resource potential or are unclear about how to develop it in a safe and environmentally sustainable manner,” UGTEP explains on its website. “The ultimate goals of UGTEP are to achieve greater energy security by supporting the development of environmentally and commercially sustainable frameworks.”

      While U.S. diplomats are specifically tasked with strengthening U.S. business prospects abroad, critics say UGTEP’s activities constitute the broad promotion of hydraulic fracturing under the guise of U.S. diplomacy.

      “UGTEP uses official government channels and US taxpayers’ money to promote high-volume horizontal hydraulic fracturing worldwide, opening doors for the main global players in the oil and gas industry,” the Friends of the Earth Europe report states.

      “Through UGTEP, the US is also actively engaged in re-shaping existing foreign legal regulations to create the desired legal framework for the development of shale oil and gas in the targeted countries.”

      Edited by Kitty Stapp
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