At least one major oil company will turn its back on fossil fuels, says scientist
Jeremy Leggett, former industry adviser, warns over plunging commodity prices and soaring costs of risky energy projects
Jeremy Leggett: ‘One of the oil companies will break ranks and this time it is going to stick.’ Photograph: Linda Nylind for the Guardian
By Terry Macalister, 11 January 2015
The oil price crash coupled with growing concerns about global warming will encourage at least one of the major oil companies to turn its back on fossil fuels in the near future, predicts an award-winning scientist and former industry adviser.
Dr Jeremy Leggett, who has had consultations on climate change with senior oil company executives over 25 years, says it will not be a rerun of the BP story when the company launched its “beyond petroleum” strategy and then did a U-turn.
“One of the oil companies will break ranks and this time it is going to stick,” he said. “The industry is facing plunging commodity prices and soaring costs at risky projects in the Arctic, deepwater Brazil and elsewhere.
“Oil companies are also realising it is no long morally defensible to ignore the consequences of climate change.”
Leggett, now a solar energy entrepreneur and climate campaigner, points to Total of France as the kind of group that could abandon carbon fuels in the same way that E.ON, the German utility, announced plans before Christmas to spin off coal and gas interests and concentrate its future growth on renewables.
Pressure on the energy industry to pull out of fossil fuels has grown in recent months with a campaign for pension funds to disinvest from coal, oil and gas.
A new report published this week by researchers at University College London deepened the message that vast amounts of oil in the Middle East, coal in the US and gas in Russia cannot be exploited if the global temperature rise is to be held at the 2C level safety limit agreed by countries.
Leggett, who once conducted research into shale funded by BP and Shell, chairs Carbon Tracker Initiative, a thinktank which aims to raise awareness among key decision-makers about the risks that fossil fuel investments pose to wider financial stability. He believes the current 50% slump in the price of Brent crude will cause the US shale boom to go bust with potentially alarming consequences for the financial system.
“Many of the shale drillers have been feasting on junk bond finance, which was so easy when oil prices were above $100 (£66) but with prices at $50 confidence is going to collapse,” he said. “Should the shale narrative evaporate then it is going to be very embarrassing for all sorts of political promoters of the industry, including George Osborne.”
Leggett said that despite the price collapse due to oversupply, he remained convinced the “peak oil” theory that supplies will eventually be unable to meet demand remains intact.
This is not because there are not the oil or gas reserves in the ground to meet future growth, but because they are too costly and environmentally dangerous to produce, he argues.
“I would say to both the utility industry and the oil and gas industry: its game over, guys,” he said. “You have got to identify the point at which it’s all going to be thoroughly changed and you have got to map back from it.
“You have to think strategically. The point to map back from is zero carbon in the energy system, not the electricity system, by 2050, because more than 100 governments want that in the [next UN climate change] treaty being prepared for signing in Paris.”
But he also believes the energy industry is privately aware of the problems as it watches its own costs of fossil fuel extraction going up while the costs of solar and other new technologies are coming down.
Leggett, who plans to stands down as chairman of the highly successful Solarcentury renewable business he founded to focus on climate change campaigning, holds what he calls “friendly critic” sessions with the fossil fuel sector these days. The tone of the meetings has changed significantly over the past two years, he said.
“Before it was know your enemy. Now it’s: ‘Crikey. A lot of this may be coming true on our watch. What shall we do about it?’ There are top-to-bottom strategic reviews going on in E.ON but in other companies as well, utility and oil and gas. So it will be really interesting to see which is the first of the oil and gas companies to break from the pack, although I fear BP and Shell are going backwards not forwards on carbon.”
Water safety concerns exist following oil leak near Glendive
By Dustin Klemann – MTN News, Billings, January 18, 2015
GLENDIVE — An oil leak near Glendive has emergency crews mobilizing to assess the damage and begin cleanup.
The leak from a pipeline was confirmed to have happened Saturday around 10:00am.
At this time it’s estimated that as much as 1,200 barrels, or roughly 50,000 gallons, of oil could have spilled into the Yellowstone River.
Bridger Pipeline, the company in charge confirmed the release of crude oil from its Poplar pipeline system.
The initial estimate by Bridger was between 300 and 1,200 barrels.
Reports indicate that the pipeline was shut down shortly before 11:00 am Saturday.
Local, state, and federal authorities have been notified and emergency crews started travel to the site on Sunday afternoon.
Governor Steve Bullocks communication director David Parker said it was his understanding that the river at the crossing where the spill occurred was frozen; that has not been confirmed.
No one was injured in the leak, however concerns over the safety and usability of water in the area do exist.
Dawson County Disaster and Emergency Services coordinator Mary Jo Gehnert said, “I am not saying the water is unsafe. I am not saying it is safe. We are waiting for officials to arrive who can make that decision.”
The City of Glendive Water Plant did not detect anything unusual on Sunday.
However, a Glendive viewer informs MTN that their drinking water does have the smell of diesel.
We’ll keep you updated as developments happen and when more details are confirmed.
Repost from DL-Online, Detroit Lakes, MN [Editor: The Minnesota Dept. of Transportation’s study of rail crossings and bridges identified and prioritized safety upgrades all over the state, and now has towns large and small reflecting on the bomb train threats in their midst. This is the story from one such town, Detroit Lakes, population around 8500. A similar study here in California would go far to wake up communities all along the rails. – RS]
Detroit Lakes in the Bakken oil danger zone
By DL News Staff, Jan 17, 2015
Forty to 44 trainloads a week of highly volatile Bakken crude oil come through Detroit Lakes via the Burlington Northern Santa Fe rail corridor, each one a potential inferno if it derails and explodes.
Train collisions with trucks and cars often cause derailments, so making crossings safer is key to preventing a disaster such as the one that killed 47 people when a parked train rolled downhill and derailed in Lac Megantic, Quebec, in July 2013.
That’s why the Minnesota Department of Transportation assessed all rail crossings on routes that carry Bakken oil, and prioritized the potential danger and need for improvements at each one.
The bad news is that the Washington Avenue crossing is the third highest priority crossing in the state, based on population living within a half-mile of the crossing, the number and type of vehicles that use the crossing, the accident history there, and its proximity to emergency services such as the fire hall, police station and hospital, among other factors.
The good news is that the crossing has gates and medians and is already considered as safe as a crossing can be, so no additional improvements are recommended.
When the city implemented a “no-train-horn” policy on the BNSF corridor a few years ago, it was required to implement top-of-the-line safety improvements at the crossings.
Compare that to the Sixth Street N.W. crossing in Perham, which is the second-highest priority crossing in the state. It has gates, but the state is recommending a grade separation (an underpass or an overpass) be built at that site in the long term.
Same goes for the No. 1 priority crossing in the state, the 14th Street S. crossing in Benson. It has gates and cants, but grade separation is recommended.
In Detroit Lakes, the crossings at County Road 54 (the Hidden Hills Road) and the Brandy Lake crossing near Walmart did not make the list of priority crossings.
Both were improved earlier as part of the “whistle-free zone” initiative.
The Canadian Pacific crossing on Legion Road near Snappy Park now has no gates at all, only crossbucks, but gates are set to be installed there in the next few years.
The Canadian Pacific route through Detroit Lakes (including WE Fest) Callaway, Ogema, and Waubun is not considered a Bakken crude route for the purposes of the state study, though trains do carry oil cars on those tracks.
The BNSF crossing on Lake Street N. in Frazee is No. 29 on the state’s list of dangerous crossings. It has gates, but the crossing is listed as “adequate, but improvable” in the state study.
The Fifth Street W. crossing in Frazee is No. 36 on the priority list and the state recommends medians be installed as part of a long-term solution.
The Fourth Street crossing in Audubon is ranked No. 57 on the priority list, but the crossing is considered adequate and no improvements are recommended.
No crossings in Lake Park made the list.
Other crossings on the priority list include several in Wadena, New York Mills, Perham, Glyndon and Dilworth.
Minnesota doesn’t have any control over the type of rail traffic that moves across state lines, but it’s encouraging that it has been as proactive as possible in identifying dangerous crossings and recommending solutions.
Repost from The Columbian, Vancouver, WA [Editor: Detailed background and history on successful opposition to crude by rail in Oregon and Washington state. – RS}
Portland port passes on oil-by-rail terminal
While Vancouver pursues project, other Northwest ports aren’t so sure
By Aaron Corvin, January 18, 2015
At one point, the Port of Portland considered a vacant swath of land (pictured above between the rail tracks and water) near its Terminal 6 as a potential site for an oil-by-rail terminal. Instead, the undeveloped tract is now under consideration for a propane export terminal. (Bruce Forester/Port of Portland)
The nation’s public ports, focused on attracting industry and jobs, are largely known as agnostics when it comes to pursuing the commodities they handle.
It doesn’t matter if the shipments are toxic or nontoxic. Ports move cargoes, the story goes. They don’t pronounce moral judgments about them.
However, at least one line of business is no longer necessarily a lock, at least in the Northwest: the transportation of crude oil by rail.
Public concerns about everything from explosive oil-train derailments and crude spills to greenhouse gas emissions and the future of life on the planet are part of the reason why.
In at least two cases in Oregon and Washington, ports decided safety and environmental concerns loomed large enough for them to step back from oil transport. The Port of Portland, for example, eyed as much as $6 million in new annual revenue when it mulled siting an oil-train export terminal, documents obtained by The Columbian show. Ultimately, Oregon’s largest port scrapped the idea because of rail safety and other worries. At one point, it also reckoned that “the public does not readily differentiate between our direct contribution to climate change and actions we enable.”
In Washington, the Port of Olympia adopted a resolution raising multiple safety, environmental and economic concerns. It noted the July 6, 2013, fiery oil-train accident in Lac Megantic, Quebec, which killed 47 people. And the resolution called on the Port of Grays Harbor to rethink opening its doors to three proposed oil-by-rail transfer terminals.
To be sure, there doesn’t appear to be a groundswell of Northwest ports swearing off oil or other energy projects. Yet public concerns aren’t lost on the port industry. Eric Johnson, executive director of the Washington Public Ports Association, said he worries that putting certain commodities such as coal under “cradle-to-grave” environmental analyses sets a bad precedent that could gum up the quest for other port cargoes.
Nevertheless, he said, “we’re concerned about oil-by-rail transportation.” So much so, the association, which represents some 64 ports in Washington, will soon issue a position paper, Johnson said. It will include calls on the federal government to boost the safety of tank cars, and to upgrade oil-spill prevention and response measures. Last week, the National Transportation Safety Board said that assuring the safety of oil shipments by rail would be one of its top priorities for the year.
In Vancouver, meanwhile, critics pressure port commissioners to cancel a lease to build what would be the nation’s largest oil-by-rail transfer operation. Under the contract, Tesoro Corp., a petroleum refiner, and Savage Companies, a transportation company, want to build a terminal capable of receiving an average of 360,000 barrels of crude per day.
In addition to the political pressure, legal challenges dog the project, too. One lawsuit goes to the heart of how ports relate to their constituencies: It accuses Vancouver port commissioners of using multiple closed-door meetings to illegally exclude people from their discussions of the lease proposal.
The port denies the allegations. It has repeatedly said public safety remains its top concern. And it has said the oil terminal won’t get built unless the companies’ proposal wins state-level safety and environmental approvals.
Yet opponents see increased public attention to the safety and environmental impacts of proposed oil and coal terminals as reason to believe ports can no longer easily don the robes of an agnostic. “People are paying attention,” said Brett VandenHeuvel, executive director of Columbia Riverkeeper, one of three environmental groups pressing legal complaints against the Port of Vancouver. “It’s no longer simply the bottom line and the most revenue.”
In the Northwest, the Port of Portland’s decision to temporarily back off oil transport sharply contrasts with the Port of Vancouver’s choice to pursue it. Oil terminal critics use Portland’s decision to hammer the Port of Vancouver.
“I don’t see how an oil terminal is unsafe on the Oregon side of the Columbia (River) and safe on the Washington side,” VandenHeuvel said. “The striking thing is how close in proximity the ports of Portland and Vancouver are and the different approach they’ve taken on oil.”
In an email to The Columbian, Abbi Russell, a spokeswoman for the Port of Vancouver, said the port moves “forward on projects we think have merit and will bring benefit to the port and our community.” She also said the port understands that “every port needs to make decisions that make sense for them.”
‘Protests may occur’
Initially, an oil-train operation made sense to the Port of Portland, too.
It considered three sites: Terminals 4, 5 and 6. It analyzed the production of crude from the Bakken shale formation in the Midwest and from oil sands in Canada. It assessed business risks, including Kinder Morgan’s plan to repurpose an existing natural gas pipeline to connect West Texas crude to Southern California. And it contemplated the “primary specific concern among governments and community groups” over the potential for “oil spills, whether from unit trains, pipelines from the unit trains to the storage tanks to the dock, and barges.”
In May 2013 — about a month after Tesoro and Savage announced their oil terminal proposal in Vancouver — the Port of Portland signed a nondisclosure agreement with an unspecified company (the port redacted its identity in documents) to explore locating an oil export facility near Terminal 6.
Just shy of a year later, however, the port backed away.
In March 2014, it publicly announced that while it was “interested in being part of an American energy renaissance brought on by this remarkable domestic oil transformation” it did not “believe that we have sufficient answers to the important questions regarding environmental and physical safety to proceed with any type of development at this time.”
In an email to The Columbian, Kama Simonds, a spokeswoman for the Port of Portland, said “rail car safety was the primary issue” that led the port to temporarily halt its pursuit of an oil-train terminal.
But the port also worried about damaging “our hard-won positive environmental reputation,” documents show, and noted “other relationships will be affected,” including “other governments, neighborhood associations and civic groups …”
“National environmental groups will be involved — Sierra Club, Bill McKibben’s 350.org, Greenpeace,” it also noted. “Protests may occur.”
And the Port of Portland was aware of the controversy that engulfed its neighbor, remarking that “as seen with the Tesoro project at the Port of Vancouver and other energy-related projects at several other ports on the river system and along the coastline, these kinds of announcements can quickly create opposition, controversy and protests.”
Unlike the Port of Vancouver, whose three commissioners are elected by Clark County voters, the Port of Portland’s nine commissioners are appointed by Oregon’s governor and ratified by the state Senate.
The Port of Portland’s Simonds said Gov. John Kitzhaber wasn’t kept informed of the port’s initial pursuit of an oil-by-rail facility and that “we are not aware of any formal statement issued to the port from the governor’s office.”
Nowadays, she said, the port pursues “other energy-related projects” and focuses on Canadian company Pembina Pipeline’s plan to build a propane export facility near Terminal 6. Propane would be brought to the facility by train and eventually shipped overseas. The propane terminal would use the same property that the Port of Portland had considered for an oil-by-rail transfer operation. That project is also expected to face opposition from environmental groups.
Josh Thomas, a spokesman for the Port of Portland, said the port is “extremely discerning” when thinking about energy-sector opportunities. After rejecting coal and temporarily halting oil, he said, the port is now working with Pembina. “Propane has an excellent track record as a clean and safe alternative fuel,” Thomas said, “with a good climate story, displacing many dirtier traditional fuels.”
‘We are not alone’
If the Port of Portland only temporarily dropped the idea of an oil-train venture, the Port of Olympia in Washington went further.
In August 2014, the Olympia port commission voted 2-1 to approve a resolution expressing “deep concern” about the threat to “life, safety, the environment and economic development” of hauling Bakken crude by train “through our county.”
The resolution urged the Port of Grays Harbor — some 50 miles west of the Port of Olympia — to reconsider allowing three proposed oil-transfer terminals. It also called on the city of Hoquiam to reject construction permits for the projects.
The Olympia port’s resolution didn’t sit well with the executive committee of the Washington Public Ports Association. The committee shot a letter — signed by five port commissioners, including Port of Vancouver Commissioner Jerry Oliver — to Port of Olympia Commissioner George Barner. The letter chastised the resolution as meddling in another port’s lawful business. “We can only presume that if another port were to do this to the Port of Olympia that you would be rightly, and deeply, offended,” according to the letter, signed by Oliver, Port of Seattle Commissioner Tom Albro, Port of Benton Commissioner Roy Keck, Port of Everett Commissioner Troy McClelland and Port of Chelan County Commissioner JC Baldwin.
Barner and his colleague, Port of Olympia Commissioner Sue Gunn, who cast the other “yes” vote for the resolution, returned fire with a letter of their own. “As public officials, we have a responsibility to protect our citizenry and our natural resources,” they wrote in their letter addressed to Albro. “We are not alone in our concern over the passage of crude oil by rail through our community, as no less than sixteen other jurisdictions have passed similar resolutions, including the cities of Anacortes, Aberdeen, Auburn, Bellingham, Chehalis, Edmonds, Hoquiam, Kent, Mukilteo, Seattle, Spokane, Vancouver, and Westport; King and Whatcom Counties, and the Columbia River Gorge Commission.”
The jousting letters illustrate that not all ports think alike when it comes to how they do business.
Although the Port of Portland didn’t join the Port of Vancouver in seeking a share of the vast quantity of crude coming onto the nation’s rails, there appears to be no acrimony between them.
Shortly before the Port of Portland said last March that it wasn’t going after an oil-by-rail project, it gave the Port of Vancouver a heads-up about it.
“We wanted to make sure you had visibility to it prior to its release as the port is effectively making and taking a public position on crude-by-rail,” Sam Ruda, chief commercial officer for the Port of Portland, wrote in an email to Port of Vancouver CEO Todd Coleman and Chief Marketing/Sales Officer Alastair Smith.
Ruda offered to discuss the matter with them.
“I am doing this on behalf of Bill Wyatt (the Port of Portland’s executive director) who is traveling in Vietnam,” Ruda wrote in his Feb. 28, 2014 email. “At the same time, I have been very involved in this matter and am prepared to offer you perspectives and context as to why we are doing this at this time.”
Russell, the spokeswoman for the Port of Vancouver, said Coleman and Smith thanked Ruda for the heads-up when they later spoke with him. “These types of courtesy communications are common,” she said. “There was no additional discussion related to the statement.”
GLENDIVE — An oil leak near Glendive has emergency crews mobilizing to assess the damage and begin cleanup.
Forty to 44 trainloads a week of highly volatile Bakken crude oil come through Detroit Lakes via the Burlington Northern Santa Fe rail corridor, each one a potential inferno if it derails and explodes.
The nation’s public ports, focused on attracting industry and jobs, are largely known as agnostics when it comes to pursuing the commodities they handle.