Category Archives: Oil Industry

Big Oil aims to buy democracy in WA State

Repost from Sightline Institute 
This article is part of the series Look Who’s Taking Oil & Coal Money 

BIG OIL AIMS TO BUY DEMOCRACY IN WASHINGTON

Local Northwest elections targeted with huge fossil fuel spending.
By Eric de Place, October 25, 2017 6:30 am
Bow of oil tanker by Roy Luck used under CC BY 2.0

With no statewide races or federal level races, 2017 is supposed to be an “off” year election. But for the fossil fuel industry and their allies it’s proving to be a spending bonanza. Coal, oil, and railroad shippers have dumped a jaw-dropping $1.5 million into three relatively small caliber Washington races: a Vancouver port commission seat, a state senate race in suburban King County, and a Spokane city ballot initiative.

Coal, oil, and railroad shippers have dumped a jaw-dropping $1.5 million into three relatively small caliber Washington races.

The big media story this election has been at the Port of Vancouver, where the oil company Tesoro aims to build a 360,000 barrel-per-day oil train facility called Vancouver Energy. Two of the three port commissioners back the project, but the outcome of the election could change that. Candidate Don Orange is likely to join current port commissioner Eric LaBrant in opposing Tesoro’s plans, and they could end the project by declining to renew the company’s lease.

Running against Orange is Kris Greene with heavy backing from the company he would be responsible for permitting. So far, the project’s backer has contributed a staggering $370,000 to Greene, far and away the largest corporate donation in the history of Vancouver’s port and the largest direct donation to any candidate in all of Washington in 2017. This princely sum comes on top of a $162,000 independent expenditure from Enterprise WA Jobs, a political action committee (PAC). The biggest donors to the PAC this year are none other than Tesoro to the tune of $200,000 and BNSF with $215,000, the two companies who profit from the terminal’s operations.

Reports from the Columbian newspaper have also revealed a shocking degree of coordination between Greene and his oil business sponsors. In effect, Tesoro has operated Greene’s campaign, doing everything from writing his press releases to speaking for the campaign to hiring DC-based communications firms with connections to some of the worst anti-environmental campaigns in the nation. (Tesoro is no stranger to big spending for right-wing spending in Washington, but 2017 marks a new level of aggression for the Texas oil company.) In September, Greene’s former campaign manager Robert Sabo even quit because of Tesoro’s outside influence on the campaign. He told the Columbian in an article earlier this month “Big Oil is completely dictating where every penny is going.”

Meanwhile, a state senate race on the eastside of Lake Washington is setting new spending records. The match in the 45th district pits Republican Jinyoung Englund against Democrat Manka Dhingra in a contest that could have major implications for the state legislature. If Dhingra wins, the Senate will flip to the Democrats, giving them majorities in both houses along with control of the governor’s office. Democratic control would likely take action on long-stalled environmental priorities like oil transportation safety requirements, funding for toxic waste cleaning up and prevention, or statewide clean energy investments.

A trio of right-wing PACs are spending big to support Republican Englund with a combined $820,000. The same Enterprise WA Jobs PAC playing in the Vancouver race is also spending big in the 45th. Beyond the hundreds of thousands from Tesoro and BNSF, the PAC has another $100,000 from Chevron and $25,000 from Koch Industries (the fossil fuel company of Koch Brothers notoriety). Meanwhile, the Citizens for Progress Enterprise WA PAC is registering another $350,000 from Texas oil company Phillips 66. And the Leadership Council PAC shows yet more oil and railroad money: $25,000 more from Tesoro, $20,000 from BNSF, and $10,000 from Union Pacific.

Backing Democrat Dhingra are the New Directions PAC and the Working Families PAC, with funding from State Democratic Campaign Committee, The Leadership Council, state unions, the Washington Conservation Voters, and big national names like Michael Bloomberg and Tom Steyer.

In Spokane, a citizen’s ballot initiative, Proposition 2, proposes to levy fees on coal and oil trains that pass through the city. It has garnered predictable opposition from fossil fuel companies, as well as the railroads that ship their products. So far, the industry’s PAC has $180,454 worth of contributions, including an eyebrow-raising October contribution of $39,500 from Lighthouse Resources, the struggling company behind a Longview coal terminal development that was effectively killed by state permitting agencies in September. Lighthouse had previously given $25,000 to the PAC, an amount that was matched by Cloud Peak, a company that exports modest volumes of coal via a terminal in British Columbia, as well as Tesoro, and the railroads BNSF and Union Pacific.

The Northwest is proving to be the graveyard of ambitions for coal, oil, and gas schemes as a region-wide groundswell of opposition has fought back project after project. Now, stymied at every turn, the fossil fuel industry is deploying what may be its most dangerous weapon: piles of cash and a willingness to overwhelm democratic institutions, even at a local level. If the “off” year elections of 2017 prove successful for Big Oil, there is every reason to think the industry will play hardball in the big ticket races of 2018.

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Fewer Bakken oil trains when major new pipeline is operational

Repost from the Chronicle Times, Cherokee, IA
[Editor: Significant quote: “Currently, almost 100% of the 944,000 barrels of crude oil produced daily from western North Dakota oil fields moves out over the U.S. railroad system.”  – RS]

Energy Transfer sells share of Bakken Pipeline

By Loren G. Flaugh, Wednesday, August 31, 2016
Rail shipments to lessen when pipeline operational

(Photo)According to an Energy Transfer Partners, L.P. (ETP) website, ETP and Sunoco Logistics Partners, L.P. announced they had signed an agreement to sell 36.75% of the Bakken Pipeline Project to MarEn Bakken Company, LLC. Marathon Petroleum Corporation and Canada based Enbridge Energy Partners, L.P. jointly own MarEn Bakken.

Marathon Petroleum and Enbridge paid $2 billion in cash for the minority share of the Dakota Access Pipeline (DAPL) and its sister pipeline, the Energy Transfer Crude Oil Pipeline (ETCOP).

The DAPL consists of approximately 1,172 miles of 30-inch diameter pipeline from western North Dakota’s Bakken oil production region to the petroleum storage hub at Patoka, Illinois. The ETCOP is roughly 700 miles of existing, 30-inch diameter pipeline already converted from carrying natural gas to carrying the light sweet Bakken Crude oil. That converted pipeline starts at Patoka and terminates at Nederland, Texas near Houston.

Energy Transfer said the sale to Marathon Petroleum and Enbidge is to close in the 3rd quarter of 2016 and it’s subject to certain closing conditions. ETP will receive $1.2 billion and Sunoco will receive $800 million in cash when closing is finalized.

Energy Transfer said they plan to use the proceeds from the cash sale to pay down debt and to help fund their current growth projects.

Energy Transfer/Sunoco will own 38.25% of the DAPL. MarEn will own 36.75% and Phillips 66 will continue to own the remaining 25%. Energy Transfer will continue to oversee the ongoing construction of the approximately $3.8 billion pipeline project. Once the pipeline becomes operational later this year, Sunoco will be responsible for day-to-day operations of the pipeline.

Energy Transfer will quickly initiate another open season process and solicit additional shippers on its common-carrier crude oil pipeline to increase the daily flow rate from the current design capacity of 450,000 barrels per day to just under 600,000 barrels per day. The tariffs that ETP will assess petroleum companies that ship oil on the pipeline will pay off construction costs and provide revenue for day-to-day operations

A large subsidiary of Marathon Petroleum has already committed to participate in this upcoming open season and will make a long-term commitment to ship a large volume of Bakken crude oil to the Patoka petroleum hub. Enbridge owns crude oil storage tanks at Patoka and existing pipelines that go in to and out of this vital petroleum transshipment hub.

When ETP proposed the DAPL back on June 25, 2014, the pipeline was designed for transporting 320,000 barrels of light sweet Bakken crude oil per day. Energy Transfer said that they would solicit additional shipper interest to increase the daily flow rate. Additionally, Energy Transfer said they were in discussions with Sunoco to seek their participation in a potentially significant equity partnership.

Then on September 22, 2014, Energy Transfer announced that they intended to initiate an Expansion Open Season to acquire additional crude oil transportation services on the DAPL. This Expansion Open Season was successful when additional shippers signed long-term commitments increasing the daily throughput to 450,000 barrels per day.

With the pending ETP open season in the coming weeks, this anticipated flow-rate increase of upwards of 570,000 barrels per day will result in the DAPL moving a substantial volume of the daily crude oil produced from western North Dakota’s Bakken/Three Forks petroleum production areas.

According to the North Dakota Bakken Daily Oil Production News website, the daily production level of Bakken crude oil stood at 994,727 barrels per day as of May 31, 2016. This is a small increase from the previous month. However, both production figures are down significantly from June 30, 2015 when the Bakken oil field was producing at the rate of 1,153,000 barrels per day. The Bakken oil fields had been yielding almost 1,200,000 barrels per day in 2014 when prices for crude oil were much higher than today.

The U. S. Energy Information Administration (EIA) recorded a price for crude oil at $105 per barrel in June of 2013. It was in July of 2014 when oil prices dropped below $100 per barrel. One year ago, in June of 2015, the EIA reported a price per barrel of around $60. Earlier this year, in February, the price per barrel plunged to just above $26 per barrel. Today’s price per barrel is around $40 and still expected to fall more.

The daily production rates for crude oil in the Bakken oil fields are rising and falling right along with the fluctuating prices for crude oil and will continue to due to the current over-supply of crude oil in the world oil markets.

Currently, almost 100% of the 944,000 barrels of crude oil produced daily from western North Dakota oil fields moves out over the U.S. railroad system. That is because there are no significant crude oil pipeline systems originating from the Bakken region currently available for moving this huge volume of light sweet crude oil into the broader U.S. pipeline distribution system.

Once the 600,000 barrel per day DAPL begins commercial operations later this year, it will be the first major pipeline to move Bakken crude oil. However, that still leaves about 400,000 barrels per day for railroad shipment. A 100-car Bakken crude oil unit train can carry about 3,000,000 gallons of oil.

According to North Dakota statistics, Burlington Northern & Santa Fe Railroad (BNSF) hauls out about 75% of the crude oil that leaves the Bakken region. Union Pacific and CSX Corporation are other rail carriers that move Bakken crude oil. Some Bakken crude oil goes north into Canada and is moved east or west to crude oil refineries located as far east as Nova Scotia.

The most recent crude oil unit train derailment happened on June 3, 2016 when a 96-car Union Pacific unit train carrying Bakken crude oil derailed while moving through the Columbia River Gorge near Mosier, Oregon. Fourteen of the tanker cars derailed, ruptured and caught fire. Approximately 42,000 gallons of crude oil spilled. A federal investigation revealed that broken bolts joining two rails caused the accident.

The Iowa Homeland Security and Emergency Management Department tracks how much Bakken crude oil moves through Iowa. According to figures from early 2015, BNSF moves Bakken crude oil through Iowa on one heavily used route through Lyon, Sioux and Plymouth Counties and into eastern Nebraska. Another heavily used BNSF route crosses southern Iowa. When daily North Dakota crude oil production rates peaked in 2014 and 2015, roughly 12 to 18 crude oil unit trains per week used the two BNSF routes.

The Association of American Railroads did a study of U. S. Rail Crude Oil Traffic in November of 2015. Their summary noted; U.S. crude oil production has risen sharply in recent years, with much of the increased output moving by rail. In 2008, U.S. Class I railroads originated 9,500 carloads of crude oil. In 2014, they originated 493,146 carloads, an increase of nearly 5,100 percent. Rail crude oil volumes in 2015 will be lower than in 2014. Additional pipelines will probably be built in the years ahead, but the competitive advantages railroads offer–including flexibility to serve disparate markets–could keep them in the crude oil transportation market long into the future.

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Exxon, other refineries affected as Louisiana waters rise

Repost from Bloomberg News
[Editor: You can count on the oil industry to prevaricate. The Baton Rouge Advocate reports that ExxonMobil released a statement disputing this Bloomberg report. “‘Contrary to some reports, the ExxonMobil Baton Rouge Complex is operating. It is our practice not to comment on specific unit operations at our facilities,’ the company said.”  – RS]

Exxon Said to Slow Louisiana Refinery as People Escape Flood

By Barbara J Powell & Brian K Sullivan, August 17, 2016 6:13 AM PDT, Updated 4:14 PM PDT

• Fourth-largest U.S. refinery affected as waters rise
• Louisiana is home to about 18% of U.S. refining capacity

Exxon Mobil Corp. curbed operations at the fourth-largest U.S. refinery as record flooding in Louisiana shut roadways, sent tens of thousands fleeing from their homes and threatened the state’s oil infrastructure.

The Baton Rouge refinery along the Mississippi shut four production units and idled others when the flooding threatened an offsite liquefied petroleum gas storage facility and pumping station, a person familiar with operations said early Wednesday. The refinery can process 502,500 barrels of crude a day into gasoline, diesel and other fuels.

At least 11 people have died, 30,000 people rescued and 40,000 homes have been damaged as almost 2 feet (61 centimeters) of rain fell in parts of southern Louisiana, the Associated Press reported Wednesday. Flood warnings extended across much of the southern portions of the state with many bayous and rivers still at dangerous levels. Louisiana is home to about 18 percent of U.S. refining capacity, according to Energy Information Administration data.

Pipelines, Terminals

Most in danger from direct disruption from flooding is the support infrastructure consisting of pipelines, terminals, salt caverns and above-ground pumping stations, said Andy Lipow, president of Lipow Oil Associates in Houston.

“Those that supply support services to refineries could be in danger of shutting down, and that could impact refineries’ operations,” Lipow said.

Todd Spitler, an Exxon spokesman, said the refinery is operating. The company doesn’t comment on specific unit operations and has continued to meet contractual commitments, he said

Through Tuesday, Baton Rouge had received 22.11 inches of rain since the start of August, more than 19 inches above normal, according to the National Weather Service. New Orleans got 7.46 inches, or 4.35 above normal; Lake Charles had 11.22 inches, or 8.69 above normal; and Lafayette logged 23.19, or 20.81 higher than the 30-year average.

Governor John Bel Edwards declared an emergency on Friday. Residents in 20 parishes are eligible for federal assistance and in two days 39,000 people have registered, the Governor’s Office of Homeland Security and Emergency Preparedness said.

Motiva Convent

Motiva Enterprises LLC said in an online message to employees Wednesday afternoon that it will staff its Convent refinery, about 38 miles southeast of Baton Rouge, with only essential personnel through at least Sunday. The company had previously said the restriction would last until Wednesday.

Angela Goodwin, a Motiva spokeswoman, didn’t immediately respond to a request for comment. She said Tuesday that operations at Motiva’s Convent and its Norco refinery, about 38 miles to the south, are stable.

Gulf Coast fuel prices climbed early Wednesday on the prospect of refinery outages. Ultra-low sulfur diesel strengthened 1 cent to 2.75 cents below New York Mercantile Exchange futures, the narrowest discount since November 2014, according to data compiled by Bloomberg. Conventional gasoline gained 1.88 cents to trade near parity with futures for the first time in four days.

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