Tag Archives: Energy Information Administration (EIA)

Bakken Crude, Clean-up costs, Derailment, Explosion, Oil prices, Pipeline infrastructure, Pipeline rupture, Pipeline transport, Tar sands crude

Dangerous energy gamble: Pipelines vs. rail

Repost from the Washington Examiner
[Editor: One significant quote among many: “In the last five years, 423 oil trains have crashed in the U.S. Since 2010, those crashes have cost about $45 million in damages. In just the first six months of 2015, 31 oil train crashes cost almost $30 million in damages…. It’s 5.5 times more likely that oil will be spilled during rail transport than from a pipeline, according to a study by the Fraser Institute, an independent Canadian think tank. The risk of deaths, injuries and spills are higher with rail and trucks since vehicles can hit other vehicles, they travel through population centers and the drivers can err. None of those factors exist for pipelines.” – RS]

Dangerous energy gamble: Pipelines vs. rail

By Kyle Feldscher, 11/2/15 12:01 AM
Fire burns at the scene of a train derailment, near Mount Carbon, W.Va., on Feb. 16. Fires burned for nearly nine hours after the train carrying more than 100 tankers of crude oil derailed in a snowstorm. (AP Photo/WCHS-TV)

Energy companies increasingly have turned to rail to ship crude oil during the fracking boom, but with train crashes becoming more frequent, they are pushing for construction of more pipelines beyond the Keystone XL.

However, that effort is being stymied by the collapse of oil prices and concerns about pipeline safety.

On Wednesday, Shell announced it would stop construction on a site in Alberta, Canada, that potentially holds 418 million barrels of bitumen oil. The company blamed the project’s expense in a time of cheap oil as well as a lack of pipeline infrastructure.

It’s one example of low prices and lack of pipelines prompting companies to reconsider drilling for oil, especially in the Canadian tar sands, where it’s more expensive to drill. Pipeline transportation is typically cheaper than rail, which costs about $30 a barrel more.

Fifty pipelines have been proposed to the Federal Energy Regulatory Commission this year. They would carry the light, sweet crude from shale regions as well as the natural gas that has helped make the U.S. the world’s energy leader. ”

Because of the costs associated with [rail], it’s going to drive up the cost of oil and it’s going to be significantly higher than pipelines on a per barrel basis,” said Dan Kish, senior vice president for policy at the conservative Institute for Energy Research.

Another calculation oil companies must make is the safety of their highly flammable product.

In the last five years, 423 oil trains have crashed in the U.S. Since 2010, those crashes have cost about $45 million in damages. In just the first six months of 2015, 31 oil train crashes cost almost $30 million in damages, mostly due to a major crash in West Virginia.

It’s 5.5 times more likely that oil will be spilled during rail transport than from a pipeline, according to a study by the Fraser Institute, an independent Canadian think tank. The risk of deaths, injuries and spills are higher with rail and trucks since vehicles can hit other vehicles, they travel through population centers and the drivers can err. None of those factors exist for pipelines.

The August study also found oil and natural gas production is rising faster than existing American and Canadian pipelines can handle. Those pipelines would be even busier if production increased in the Canadian tar sands.

Keystone XL, proposed by TransCanada in 2007, would be able to transport 830,000 barrels per day from the tar sands to the Gulf Coast to be refined. Due to the viscous nature of bitumen oil, it’s much easier to transport it by pipeline than by rail, experts say.

When a train carrying oil derails, it’s often catastrophic.

In West Virginia, oil burned for days after 26 oil tanker cars derailed in February. Nineteen of those cars caught on fire and oil spilled into a nearby river. The damages from that crash totaled more than $23 million.

A train derailment in a Quebec community that killed 46 people in July 2013 prompted calls for better rail safety and led some to question whether to transport highly flammable oil at all.

The State Department estimates rail transportation of oil is responsible for 712 injuries and 94 deaths per year, while oil pipelines are responsible for three injuries and two deaths per year.

“For our society, we have to evaluate the value we place on human life and we should make that a priority,” said Diana Furtchgott-Roth, a conservative economist who is the director of the Manhattan Institute’s e21 program.

“The families of those 46 people killed in Lac-Megantic would have been happy to have less oil and having the lives of their family members back.”

Dangerous derailments led the Obama administration to introduce new regulations to make tanker cars safer. The rule, announced in May, requires improvements to braking systems, making tanker cars thicker and more fire resistant and new protocols for transporting flammable liquids.

The number of crashes steadily increased during the last five years, as more trains shipped crude and natural gas, rising from nine crashes in 2010 to 144 crashes in 2014. But as the price of oil plummeted, the amount of crude oil being drilled and shipped leveled off in 2015, according to the Energy Information Administration.

If drilling in the Canadian tar sands in Alberta were to pick up in earnest, State Department officials believe rail transport would lead to 49 more injuries and six more deaths per year. If that oil were to be moved by the Keystone XL pipeline, there would be one additional injury and no fatalities.

Environmentalists, who have been fighting the Keystone XL, point to the State Department’s finding that pipeline spills are often bigger than those from trains and trucks.

They also point to declining oil use and the collapse of prices as great excuses to leave it in the ground.

Zach Drennen, legislative associate at the League of Conservation Voters, said with oil prices as low as they are, it’s economic folly for oil companies to drill in the Canadian tar sands. Without high oil prices, companies can’t afford to build pipelines. They also can’t afford to ship by rail.

That is why green groups think oil companies could be willing to leave the oil in the earth.

“If you look right now, a lot of oil companies are just deciding that’s not where they want to put their money at,” Drennen said.

To Kish, environmentalists’ goal is to make it too expensive to drill.

“They’re going to try and fight against every damn pipeline they can,” he said, “because if they can choke off production and delay construction of pipelines, it causes disruptions.”

But Ken Green, senior director of natural resource studies at the Fraser Institute, said environmentalists’ dream of keeping oil in the ground isn’t feasible.

“The oil in the ground has a market value and everyone knows what the market value is,” he said. “It’s not hard to calculate that market value … My assumption is sooner or later, that value will be sought.”

Crude By Rail, East coast refineries, High Hazard Flammable Trains (HHFTs)

U.S. East Coast is key crude-by-rail destination

Repost from Oil Change International
[Editor:  Excellent 8-page report.  Interesting for folks on both coasts, and critical for those along the rails in the Midwest and Eastern states!  TAKE NOTE: Does this report describe our future on the west coast?  – RS]

U.S. East Coast is key crude-by-rail destination

By Lorne Stockman, July 22, 2015

Cover_ OCI-East Coast CBR-July 2015_FINALAn examination of crude-by-rail data shows that the U.S. east coast has become one of the busiest regional destinations for hazardous crude-by-rail traffic. Oil Change International used publicly available Department of Energy (EIA) data as well as subscription data from Genscape to examine the growth of crude-by-rail to one of the most densely populated areas of the United States.

Key Findings:

  • An average of 450,000 barrels per day (bpd) of crude was delivered by rail to the east coast region in 2014.
  • Around 50% of all crude-by-rail is unloaded in the wider east coast region (PADD 1).
  • Around 50% of the crude oil input to six east coast refineries is supplied by rail.
  • Over 80% of the crude oil delivered by rail to the region comes from North Dakota (Bakken crude).
  • Canada is the next biggest source of crude-by- rail for the region at around 12%.
  • Five key terminals account for 73% of the unloading capacity and around 65% of the throughput of the region’s crude-by-rail terminals.

This briefing provides additional information on crude-by-rail to the east coast. For further information on crude-by-rail see www.priceofoil/rail

Download Full Report

Fossil fuels, Massive increase in crude-by-rail, Oil exports, Oil Industry, Tar sands crude

Whatever Shall We Do with All this Extra Oil? Oil companies want the crude-export ban lifted. Is that a good idea?

Repost from onEarth, Natural Resources Defense Council

Whatever Shall We Do with All this Extra Oil?

Oil companies want the crude-export ban lifted. Is that a good idea?
By Brian Palmer | December 13, 2014

If oil industry lobbyists didn’t have so much money, Congress would get pretty sick of them. They’re constantly whining. They don’t like the carbon pollution rules. Fuel-economy standards are too tight. Something about a pipeline from Canada. Today, they’re back on Capitol Hill moaning about the crude-export ban.

What’s that you say? You’ve never even heard of the crude-export ban? Well, now you have, and I’ve compiled a few FAQs for you.

What does the ban say?

The short answer: Crude oil drilled in the United States must be refined in the country. But as with most laws, there are exceptions. Companies can export oil to be refined in Canada as long as the products are sold there or back to the States. Some Alaskan crude has been exported. And a particular kind of heavy crude from California can be sent abroad because presidents George H.W. Bush and Bill Clinton decided it was in the national interest. Such exceptions can be significant: Total exports peaked at 104 million barrels in 1980, representing about 3 percent of total U.S. extraction that year. In recent years, though, that number has fallen below 50 million barrels.

That law’s been around since the 1970s. What’s the big deal now?

Well, we’re talking about an industry in which greed is considered good. Money, of course! Until recently, energy companies weren’t drilling enough oil to make a big splash on the international market. But U.S. production surged by nearly 50 percent between 2008 and 2013, and those CEOs now think they can take home even bigger bonuses if they’re allowed to sell abroad.

Why was it created in the first place?

Basically because the Arab members of the Organization of Petroleum Exporting Countries got mad that the United States and a few other countries were siding with Israel during the 1973 Arab-Israeli War—and cut production and banned petroleum exports to those nations. The price of crude quadrupled, causing a five-month-long oil crisis that majorly disrupted global commerce and American lives. Since then, energy independence has been a goal for every U.S. president; Gerald Ford, for example, signed the 1975 Energy Policy and Conservation Act, which prohibited most crude exports and established a national strategic oil reserve.

Will I pay more for gas either way?

The ban certainly depresses the price of U.S.-produced crude oil, but gas prices involve a lot of factors. Energy analysts and industry advocates have debated the ban’s effects for years. So, in an attempt to settle the argument, the somewhat more impartial U.S. Energy Information Administration recently published a report on what would happen to gas prices if exports were allowed. You can read it here if you’re an oil-price wonk. Here’s the short version, from the organization’s administrator, Adam Sieminski: “[I]t probably wouldn’t do a great deal one way or the other with gasoline prices.”

Apparently, when it comes to economics, the controversy has more to do with profits than your family budget.

What would it mean for the climate if we allowed the exports?

It might be bad news. In an era of high domestic production, the ban holds down the price of West Texas Intermediate, North America’s benchmark crude, which then keeps Canada’s tar sands crude prices low. (The price points of the two crudes move roughly in sync.) So if Congress lifts the ban, the tar sands industry, which is currently in a major funk, could be saved—and this would mean a lot more extraction of the most carbon-intensive fossil fuel source around.

That’s the theory. And a March study from Oil Change International supports it: The report concluded that allowing exports would result in added carbon emissions equivalent to the output of 42 coal plants. The factors influencing global oil prices are complex, though, so it’s difficult to say exactly how much fossil fuel the crude-export ban is keeping in the ground.

The lack of certainty, however, makes its own point. Before Congress even considers repealing a 39-year-old law dealing directly with fossil fuels, it ought to understand the implications for climate change. It’s appalling that politicians would consider lifting the ban without full information. But I guess they’re not scientists.

 

 

Clean energy, Fossil fuels, Natural gas, Solar energy, Wind energy

America’s new and improved energy mix

Repost from Fuel Fix
[Editor:  Significant quote: “Since 2008, wind and solar energy capacity in the U.S. has tripled. A new report from the Energy Information Administration found that electricity generated from wind and solar grew a lot faster than electricity generated by fossil fuels last year.”  – RS]

Guest commentary: America’s new and improved energy mix

By Paul Dickerson and Thomas R. Burton III
Mintz Levin, April 25, 2015 8:00 am
(Sam Hodgson/Bloomberg)

Not too long ago, America was governed by an either/or energy market. Back in the 1970s and early 1980s, the rise and subsequent demise of solar energy as a viable energy alternative was directly related to the jump and collapse in crude prices before and after the OPEC oil embargo. Solar was resuscitated – along with a host of other nascent alternatives – in the first decade of this century when oil prices spiked once again. Plenty of pundits warned that investments in solar, wind and other energy alternatives would prove short-sighted when the price of oil finally retreated.

But something significant happened along the way: demand for energy alternatives became untethered from oil and natural gas prices. At a time when the price of crude oil has plunged by more than half and natural gas prices have plumbed two-year lows, growth in energy alternatives has actually accelerated. Since 2008, wind and solar energy capacity in the U.S. has tripled. A new report from the Energy Information Administration found that electricity generated from wind and solar grew a lot faster than electricity generated by fossil fuels last year. So-called distributed generation – a better proxy for real-time demand because it measures installations such as solar panels by end users and not utilities – exhibited even faster growth. In fact, by the time you’ve read this, another new solar project will have come online (it happens every 150 seconds).

A host of drivers help explain why these energy technologies are holding their own this time around. Whether you agree with them or not, growing concerns about climate change and energy’s role in it has created generous federal and state incentives for energy sources that aren’t derived from fossil fuels.

Incentivized by these policies, public and private sector innovation has driven down the cost of these technologies so they can increasingly compete on price even as their subsidies expire. Wind energy’s dramatic success here in Texas is a key reason why state senator Troy Fraser, a key proponent of Texas’s Renewable Portfolio Standard and Competitive Renewable Energy Zones, recently argued that those programs have accomplished their objective and are no longer needed.

Finally, innovation has migrated to the industry’s financing models. Previously, much of solar’s growth was driven by technology advancements. More recently, however, growth is being driven by financial improvements such as more flexible leasing models, a greater availability of capital that lowers costs for installers, and better analytics that enable installers to target customers more effectively. The result has been a rapid change to the competitive landscape, which has transformed and invigorated the market.

By now you might be wondering: Why does this matter to me? The answer is because there are huge implications from diversifying our nation’s energy supply.

The first benefit is the ability to hedge our energy positions when the price of one technology soars. Much in the way that investors are adding alternative investments to complement their holdings in stocks and bonds, a national energy portfolio that can draw on solar, wind and other alternatives is much less susceptible to downside risks. While still a small piece of the overall energy pie, these energy technologies give us a degree of flexibility in weathering market fluctuations. This flexibility makes us less reliant on any one energy source, putting downward pressure on the prices we pay to heat or cool our homes or fuel our cars.

The second big benefit is ensuring the reliability of our energy supply. Solar and wind technologies need to work in concert with 24/7 solutions such as natural gas since they can’t produce energy all of the time. Having access to more alternatives gives our electricity grid operators the flexibility to prevent or work around disruptions, use real-time usage data to identify and tap the most efficient energy sources at all times, and continue to meet our growing energy demands. Of course, we still have some work to do in this respect, and we urge federal and state legislators to continue to support programs that help develop the technologies needed to seamlessly integrate our growing array of energy choices.

A third reason, one that we are painfully familiar with as much of Texas remains gripped by drought, is water. One of the biggest demands for water is power generation, and as people continue to move to Texas, demand for electricity will continue to rise. By developing wind and solar sources, we will ease the burden of that growth on our already stressed water supplies.

Finally, a nation with greater flexibility in the way it meets its energy needs is one far less prone to the will or whims of others. In recent years, the term “energy independence” has been thrown around a lot. It’s a laudable goal, but we can’t achieve it by drilling alone. Before we can have true energy independence, we first must have energy diversity.

Thomas R. Burton III is the founder and chair of the Energy & Clean Technology Practice at Mintz Levin in Boston. Paul Dickerson, of counsel at the firm, is a former chief operating officer at the US Department of Energy.