Category Archives: Oil and gas industry

Trump shielded Big Oil from government shutdown effects

Repost from the San Jose Mercury News

Administration brought back furloughed employees to plan for radically expanding offshore oil and gas drilling

By MARY CREASMAN, January 27, 2019 at 7:15 am, updated January 28, 2019 at 4:16 am
Tug boats transport an oil platform, in this photograph taken above Ingleside, Texas, on May 5, 2017. | Eddie Seal/Bloomberg News

President Trump’s government shutdown held our communities hostage over a racist and environmentally destructive border wall.

Hundreds of thousands of federal workers were forced to go without paychecks while the bills piled up. (How long could you go without a paycheck?) Our national parks suffered what could be permanent damage. Public health protections and safeguards against pollution were put on hold.

But one industry continued with business as usual — oil and gas.

During the shutdown, Acting Interior Secretary and former oil lobbyist David Bernhardt brought back furloughed employees to continue working on plans to radically expand offshore oil and gas drilling.

Leasing our oceans to polluters is apparently an “essential” function for this administration. As drafted, the plans would open nearly all of our nation’s coasts to oil and gas drilling, including California’s shoreline — where there have been no federal lease sales since 1984.

The offshore drilling expansion itself is unacceptable, but the fact that the Trump administration prioritized work on it during the shutdown is a slap in the face to the furloughed federal employees and all Californians who care about our beaches and healthy oceans.

And the Interior Department’s efforts to advance offshore drilling wasn’t Trump’s only effort to keep the oil and gas industry happy despite the shutdown.

While thousands of other government employees were furloughed, the Trump administration was quietly moving ahead with its efforts to advance drilling in the Arctic National Wildlife Refuge and the Western Arctic region of Alaska.

Similarly, even as national parks remained largely unstaffed, the Bureau of Land Management, an agency in the Interior Department, moved forward on 22 new drilling permit applications on public lands in Alaska, North Dakota, New Mexico and Oklahoma.

This blatant catering to the oil industry is unprecedented. The shutdown was so good for Big Oil that the head of the American Petroleum Institute — the oil industry’s main trade association — admitted they “have not seen any major effects of the shutdown on our industry.”

That statement contrasts deeply with the harm imposed elsewhere by the shutdown. Here in California, communities suffering from drinking water contamination had to wait for the EPA to reopen for action on toxic chemicals.

Overflowing trash bins and toilets, permanent vandalism and destruction left lasting damage on our national parks, and these places had to rely on volunteers to fill the gaps while federal workers and contractors were forced off the job. Joshua Tree National Park, for example, saw visitors chopping down iconic Joshua trees, illegal off-roading and graffiti — and the Park Service didn’t have staff to investigate.

These misplaced priorities should not come as a surprise given the Trump administration’s efforts, from Day 1, to sell our public lands and waters to Big Oil and other corporate polluters. The administration is stacked with industry executives focused on profits over people.

Our environment and our communities deserved better than the needless damage inflicted by the Trump shutdown. Thankfully, we have representatives in Congress who will fight to protect our coast.

Reps. Jared Huffman, D-San Rafael, and Salud Carbajal, D-Santa Barbara, have introduced legislation that would preserve California’s coast from the Trump administration’s drilling expansion. And California voters decisively sent a bold and pro-environment freshman class to the House of Representatives to stand up to Trump’s toxic agenda.

The Trump administration is shameless about its agenda to ruin our environment and poison our families, all to ensure more corporate profits. But California is paying attention, and we won’t let it happen.

Mary Creasman is CEO of the California League of Conservation Voters.

    Oil and gas production in California – Extraordinary?

    Repost from Legal Planet

    Guest Bloggers Deborah Gordon and Frances Reuland: Is California Extraordinary? Its Oil Resources Certainly Are

    Facts About California’s Oil and Greenhouse Gas Emissions

    Despite ongoing federal rollbacks to environmental regulations, California has the right to set its own clean air standards because it is truly extraordinary. Truth be told, the compelling circumstances that first set in motion California’s vehicle emissions standards remain entirely valid. And there are four recent conditions, related to California’s oil supply, production, and refining, that bolster California’s case against the Administration’s threat to strip California of its clean car clout.

    In 1967, then governor Ronald Reagan adopted statewide vehicle emissions regulations to address California’s severe air pollution. Shortly thereafter, when the federal Clean Air Act was adopted, California was granted a waiver to set its own tougher vehicle emissions standards. Over the decades, California has repeatedly ratcheted up these regulations to also include greenhouse gas (GHG) emissions. In order to maintain its waiver, California’s emissions standards must be deemed necessary to meet “compelling and extraordinary conditions.” Historically, these referred to the state’s unique meteorology, geography, population, and air pollution levels.

    All of these still hold true: the sun shines strong, the weather is warm, mountains wall in emissions from cars and other sources, one in eight American drivers reside here, and the air is still very dirty.

    But there are four more extraordinary circumstances, all relating to California’s oil resources, that need to be factored into the case for preserving and strengthening California’s clean car program.

    These circumstances are bolstered by the fact that California’s gasoline and diesel markets are geographically isolated from other locations in the United States that produce refined products. As such, California is essentially self-sufficient, refining its own transport fuels. Little, if any, gasoline and diesel are obtained from outside the state to balance out supply with demand.

    All of the oil California produces ends up in its own refineries, and this is not an environmentally-friendly affair, especially in a state that has taken the lead on clean air and climate change. According to the Oil Climate Index (OCI)—an open source tool (developed by Gordon and her partners at Stanford and the University of Calgary) that compares the climate impacts of global oils—extracting and refining oil in California is dirtier than anywhere else in the United States. Weakening California’s vehicle emissions standards will force Californians to consume more of the state’s dirty oil longer into the future. This will increase pollution levels and elevate risks to public welfare in the state with the nation’s worst air pollution—69 percent of counties had unhealthy air on 33 days last year.

    California’s oil resources are extraordinarily strained

    As Texas, North Dakota, New Mexico, and overall U.S. oil production rises, California production is in decline. Since 1985, California’s crude oil production has dropped steadily: the state now produces under 500,000 barrels per day, less than half of its output 30 years ago. California’s aging oil fields, unstable seismic geology, and tight environmental rules all work to limit oil production. Successfully running its oil refineries at their current capacity of 2 million barrels a day to meet Californians’ gasoline and diesel demands requires the state to feed the entirety of its domestic oil into its refineries and then import 70 percent more oil. If realized, Trump’s plan to weaken the state’s clean car standards would increase gasoline and diesel demand, exacerbating the state’s already-strained oil resources and further pressuring security of its energy supplies.

    California’s oil resources are extraordinarily dirty

    California’s oils have some of the largest carbon footprints worldwide. Producing, refining, and consuming a barrel of California oil emits more GHGs than other global barrels. For example, the state’s largest oilfield, Midway Sunset, is estimated to be more carbon intensive than Canada’s oil sands. California’s South Belridge and Wilmington fields are also among the highest-emitting in the nation. Trump’s plan would increase California’s GHG footprint, countering the state’s climate goals.

    California’s oils are extraordinarily energy intensive

    Aging oils in California require significant amounts of energy to extract and refine, much more than newer resources in North Dakota, the Gulf of Mexico, and elsewhere. Fossil fuels, like natural gas and diesel, provide these extra energy inputs. A barrel of California’s Midway Sunset oil, for example, uses one-third of its total energy just to extract and refine it into petroleum products like gasoline and jet fuel. Likewise, California’s complex refineries consume nearly five times more energy to turn the state’s oil into marketable products than simpler refineries. Much more manpower and money are spent bringing California oil to market than elsewhere in the country.

    California’s oils are extraordinarily undocumented

    Unlike other states and countries, California does not document its oil quality. The problem is that California’s oil resources are more dangerous to handle than most global oils. In 2011, for example, a California oil field worker was buried alive when the ground gave way as steam was being cycled through the oil field. California’s complex oil was documented long ago by the federal government, but recommendations for oil data transparency have gone unheeded for over a century. These large information gaps introduce new environmental risks for California.

    California’s 30 million motor vehicles that far outnumber any other state are a major source of air pollution. Clean car rollbacks are a threat to the state’s environmental progress—and energy security. The state needs to fight hard to preserve its pioneering vehicle emissions standards on behalf of itself and several U.S. states and international provinces that have already adopted them. Beyond preserving the standards in place, state policymakers should also consider tightening their emissions standards if they are going to make real headway addressing climate change. In this historic fight, California can draw on its extraordinary status—namely its exceedingly dirty, depleting oils that are unusually energy intensive and fundamentally unknown.

    Deborah Gordon is the director of the Energy and Climate Program at the Carnegie Endowment for International Peace and a senior fellow at the Watson Institute for International & Public Affairs at Brown University. Frances Reuland is Carnegie’s James C. Gaither Junior Fellow in the Energy and Climate Program.

      Canada Is Now A Land Of Oil Trains… wonder where it’s all going?

      Repost from Huffington Post Canada
      [Editor: …and this Canada news is relevant here in the U.S. because…?? Well, check out the map below.  – R.S.]

      Canada Is Now A Land Of Oil Trains

      This is happening even as Canadian crude sells at prices not seen in the oil markets since the 1990s.

      By Daniel Tencer, 11/21/2018 12:04 EST

      Crude oil and other petroleum products are transported in rail tanker cars on a Canadian Pacific Railway train near Medicine Hat, Alta., Sept. 10, 2018.
      Crude oil and other petroleum products are transported in rail tanker cars on a Canadian Pacific Railway train near Medicine Hat, Alta., Sept. 10, 2018. LARRY MACDOUGAL/CANADIAN PRESS

      Canada’s oil industry is facing record-low prices for its exports, a glaring lack of infrastructure to bring its product to market, and an uncertain long-term outlook.

      But none of that is stopping the oil patch from increasing production. And as one pipeline project after another fails to launch, the industry is relying more heavily than ever to ship its oil by rail.

      According to Statistics Canada, the volume of oil on Canada’s railroads has soared by 64.6 per cent in just the past year. And in the past seven years, the number of rail cars carrying oil across Canada has quadrupled.

      Oil-by-rail shipments in Canada reached a record high of nearly 20,000 rail cars in August this year. By volume, oil-by-rail is up by more than 64 per cent in the past year. HUFFPOST CANADA 

      The spike in oil trains began around 2011, a few years before the July, 2013, disaster in which a 74-car oil train derailed in Lac-Megantic, Que., killing 47 people.

      Besides the obvious risk to the environment and to human life, there is also the fact that oil producers are crowding out other industries that rely on rail.

      This leads to “higher costs and shipping delays for other industries,” Bank of Montreal senior economist Sal Guatieri wrote in a client note Tuesday.

      “Surging railway loadings of oil contrast with flat loadings for shipments of wheat, copper, machinery and many other products in recent years.”

      And if you think these oil trains don’t come through your neighbourhood, that they’re somehow limited to Alberta, take a look at this map of the oil rail network in Canada, provided by the Canadian Association of Petroleum Producers:

      A map of Canada’s oil-by-rail network and its connection to U.S. terminals. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS  [click to enlarge]
      This massive expansion of oil-by-rail took place even as oil prices remained relatively weak, Canadian oil exports particularly so. This is especially true today; North American oil prices have dropped by some 31 per cent since a peak in early October, and closed at around US$53 on Tuesday.

      Canadian oil has been selling at an enormous discount to that, recently trading below $14 a barrel. The last time global oil prices were anywhere near that low would have been the late 1990s.

      But it’s not just Canada that seems to be desperate to get as much of its oil out of the ground right now as possible.

      “Saudi Arabia is pumping oil like never before, its output surging to a record 10.6 million barrels per day in October,” National Bank of Canada economist Krishen Rangasamy wrote in a client note Wednesday.

      “Iraq’s output is also on the rise as production from the Kirkuk region comes back online. Those are more than offsetting declines in sanction-hit Iran.”

      Not to mention, U.S. oil extraction has surged in recent years to the point it is now the world’s largest producer of crude.

      Meanwhile, traders are losing faith in oil’s prospects as the global economy shows signs of weakening.

      “The deceleration of world economic growth ─ as evidenced by ugly (third-quarter economic) results in places such as Japan and the Eurozone … has clearly hurt demand for oil,” Rangasamy wrote.

      Amidst all this, some executives in Canada’s oil patch have called for the Alberta government to use its existing powers to limit the amount of oil being pumped. So far, the province hasn’t indicated it plans to follow that advice.

      Hey, at least we get cheaper gas

      But there is one benefit to consumers from crude producers’ race to the bottom of the oil deposit: Lower fuel prices.

      “The free-fall on energy markets … helped force down pump prices across Canada by 2.1 cents a litre to $1.13, their lowest since October 2017,” analyst Dan McTeague of GasBuddy wrote this week.

      “As pump prices now stand 5.6 cents a litre lower than on this same day last year, much of the credit can be given to the unexpected and likely temporary decline in oil prices, which could be subject to an upturn once OPEC and Russia agree to production curbs beginning in December.”