Category Archives: Crude Oil

National energy boom blurs political battle lines

Repost from The Associated Press, The Big Story

National energy boom blurs political battle lines

By NICHOLAS RICCARDI — Apr. 19, 2014
Energy Politics
FILE – This March 25, 2014 file photo shows perforating tools, used to create fractures in the rock, lowered into one of six wells during a roughly two-week hydraulic fracturing operation at an Encana Corp. well pad near Mead, Colo. The energy boom is scrambling national politics. Democrats are split between environmentalists and business and labor groups. Some deeply-conservative areas are allying with conservationists against fracking, the technique largely responsible for the surge.  (AP Photo/Brennan Linsley, File)

DENVER (AP) — The U.S. energy boom is blurring the traditional political battle lines across the country.

Democrats are split between environmentalists and business and labor groups, with the proposed Canada-to-Texas oil pipeline a major wedge.

Some deeply conservative areas are allying with conservationists against fracking, the drilling technique that’s largely responsible for the boom.

The divide is most visible among Democrats in the nation’s capital, where 11 Democratic senators wrote President Barack Obama this month urging him to approve the Keystone XL pipeline, which is opposed by many environmental groups and billionaire activist Tom Steyer. The State Department said Friday that it was extending indefinitely the amount of time that federal agencies have to review the project, likely delaying a pipeline decision until after the November elections.

Several senators from energy-producing such as Louisiana and Alaska have distanced themselves from the Obama administration, while environmental groups complain the president has been too permissive of fracking.

There is even more confusion among Democrats in the states as drilling rigs multiply and approach schools and parks.

California Gov. Jerry Brown was shouted down at a recent state convention by party activists angry about his support for fracking. New York Gov. Andrew Cuomo has kept fracking in his state in limbo for three years while his administration studies health and safety issues. In Colorado, Gov. John Hickenlooper has drawn environmentalists’ ire for defending the energy industry, and a ballot battle to regulate fracking is putting U.S. Sen. Mark Udall in a tough situation.

But the issue cuts across party lines.

Even in deeply Republican Texas, some communities have restricted fracking. In December, Dallas voted to effectively ban fracking within city limits.

“You’re looking at a similar boom as we had in tech in 1996,” said Joe Brettell, a GOP strategist in Washington who works with energy companies. “The technology has caught up with the aspirations, and that changes the political dynamics fundamentally.”

Those technological advances have made it possible for energy companies to tap deep and once-untouchable deposits of natural gas and oil. They include refinements in hydraulic fracturing, or fracking, which is the injection of chemicals into the ground to coax buried fossil fuels to the surface.

The U.S. is now the world’s largest natural gas producer and is expected to surpass Saudi Arabia soon as the world’s greatest oil producer, becoming a net exporter of energy by 2025.

The boom has brought drilling rigs into long-settled neighborhoods, raising fears of water contamination, unsafe traffic and air pollution, and outraging residents.

Pollster Steven Greenberg said Cuomo provides little notice before his public appearances because anti-fracking protesters will crash his events. Republicans blame the governor for stymieing growth. New York voters split evenly on fracking, with Democrats only modestly more likely to oppose it than Republicans.

“No matter what he decides, he’s going to have half the people upset with him,” Greenberg said. “From a purely political point of view, it’s hard to argue with his strategy — punt.”

In California, Brown has a long record of backing environmental causes, but he’s drawn the wrath of some environmentalists for supporting fracking. One group cited the $2 million that oil and gas companies have given the governor’s causes and campaigns since 2006. Democrats in the Legislature have proposed a freeze on fracking but are not optimistic Brown will support it.

The Democratic split is sharpest in Colorado.

Hickenlooper, a former oil geologist, has been a staunch supporter of fracking; at one point he said he drank fracking fluid, albeit a version without most of the hazardous chemicals. His administration has fought suburban cities that have banned fracking, insisting that only the state can regulate energy exploration.

In response, activists are pushing 10 separate ballot measures to curb fracking. One measure would let cities and counties ban it. The effort has the support of Colorado Rep. Jared Polis, a wealthy Democrat. At the state party’s recent convention, he gave a rousing speech nominating Hickenlooper for a second term but acknowledged “none of us … are going to agree on every single issue.”

Some Colorado Democrats worry that the ballot push is bringing energy groups who generally support Republicans into the state. One pro-fracking group has spent $1 million in TV ads.

Jon Haubert, a spokesman for the group, said leaders in both parties think the measures are economically dangerous. “We look at that and say this seems to be an extreme opinion,” he said, referring to the initiatives.

The ballot measures will force Democratic candidates to choose among environmentalists, labor groups and Colorado’s business community, whose political and financial support is vital to Democrats in the swing state.

Udall embodies this dilemma. He’s an environmentalist in a tight re-election campaign with Republican Rep. Cory Gardner, who represents an oil-and-gas rich, mostly rural congressional district.

In an interview, Udall declined to say if cities should have the right to ban fracking. “I’m not a lawyer,” he said.

Hickenlooper has put in place several landmark regulations — requiring that drilling occur a set distance from homes and schools and limiting methane emissions from energy exploration. But that has not assuaged activists such as Laura Fronckwiecz, a former financial worker who got involved in an effort to ban fracking in her moderate suburb of Broomfield after a drilling well was planned near her children’s elementary school.

A Democrat, she’s aghast at her party’s reluctance to embrace the cause. “Ten years ago, I’d say it was a progressive cause they’d get behind,” Fronckwiecz, 41, said, “but much has changed, and the politics of oil and gas are not what you’d expect.”

Fronckwiecz says she has Republicans and Libertarians in her coalition, as do activists pushing to limit fracking in energy-friendly Texas. While the GOP-dominated Legislature in Texas has rejected efforts to limit drilling, activists have earned small victories in towns and cities that have limited drilling, and one big win, the Dallas vote.

Sharon Wilson, Texas organizer for the environmental group Earthworks, says she gets a warm reception from conservatives and Libertarians. “When they come into your community and start fracking,” she said, “it does not matter what your political affiliation is.”

Crude by rail is big news on any given day

Editor: I have tried to find news to post here on a daily basis.  What once was a daunting task for a one-person operation has now become almost impossible.  Take a look at the top 6 results in today’s Google result for +crude +oil +train NEWS in the Past24 hours.  Check out the stories Google found, especially the last one: Dallas Morning News’ report, “Railroads defend secrecy as accidents raise concerns”  I have a family event today … this will have to do for now.  – RS

GOOGLE SEARCH RESULTS: About 1,020 results (0.15 seconds) 

Flawed tests play down crude oil’s explosiveness

Repost from The Toronto Globe and Mail

Flawed tests play down crude oil’s explosiveness

KIM MACKRAEL
OTTAWA — The Globe and Mail
Published Monday, Apr. 07 2014

Damaged rail containers and twisted wreckage can be seen on the main road through downtown Lac Mégantic, Quebec early July 7, 2013, a day after a train carrying crude oil tankers derailed and burst into flames. (Moe Doiron/The Globe and Mail)As Canada and the United States move to strengthen the rules for transporting crude oil by rail, there is mounting evidence that regulators are relying on tests that underestimate the risk of a fiery explosion like the one that destroyed Lac-Mégantic.

The current testing regime was not designed for unrefined crude and, as a result, can play down the dangers of shipping some light crude oils, according to industry and transportation experts. A United Nations panel on hazardous materials shared similar concerns last week when it announced that it would review international standards for shipping crude oil, including how crude is tested and classified, in response to a string of recent accidents in North America.

With the accuracy of the tests in question, there is suspicion that some shipments of Bakken crude may be more volatile than officials believed. It also raises the possibility that light crude oil drawn from other locations in North America is as potentially explosive as crude from the Bakken – but has not been receiving the same level of scrutiny.

The devastating fire in Lac-Mégantic, Que. last July, began when a train carrying Bakken crude jumped the tracks and exploded in the centre of the small town, killing 47 people. A Globe and Mail investigation showed that oil from the Bakken formation, which straddles North Dakota, Saskatchewan and Manitoba, is more volatile and prone to exploding than conventional forms of crude.

Crude oil with a high concentration of light ends – such as methane and propane – is “most at risk” of being mischaracterized in standard testing procedures, according to a recent report commissioned by Transport Canada. Those light ends are potentially dangerous because they can ignite and magnify the size of an explosion.

The inaccuracies underscore how little is known about the risks of shipping crude oil by rail, a practice that has increased dramatically during the past five years and now accounts for an estimated 230,000 barrels of oil a day in Canada. Oil is widely known to be flammable, but regulators did not believe until recently that it had the potential to explode and cause the kind of destruction it did in Lac-Mégantic.

Flash point and boiling point tests, which are required for crude shipments in Canada and the U.S., both have difficulty measuring samples that contain significant concentrations of light ends, according to the report to Transport Canada. Another common test, known as the Reid Vapour Pressure test, has also been criticized for use on crude oil because it can allow light ends to easily vapourize at the time samples are collected from highly volatile crude.

“When you try to apply [current tests] to samples that have light ends, they don’t work as well,” said Bob Falkiner, a director for the Canadian Crude Quality Technical Association who also works for Imperial Oil. “You get biased results reported from those test methods because of the lost light ends.”

A spokesperson for Transport Minister Lisa Raitt said the minister is aware of concerns about the crude-testing regime and Transport Canada is “looking at options” related to volatility tests. Speaking with The Globe after an event in Toronto last week, Ms. Raitt also welcomed the UN panel’s decision to study crude shipments and testing.

Producers in the Bakken are expected to stabilize crude oil before shipping it, in a process meant to remove many of the light ends from the rest of the product. Those light ends can be sold separately, but limited transportation infrastructure in the fast-growing Bakken area has led some producers to flare the products instead – which means they simply burn them on the spot. In some cases, flaring has become a “de facto stabilization process,” said Bill Lywood, founder and president of Crude Quality Inc.

However, several industry experts said there is a financial incentive for producers to leave some light ends in the crude – rather than burning them off or selling them separately – because they can increase the overall volume of the crude they are selling. At the same time, because of testing limitations, it can be difficult for producers, shippers and buyers to determine whether enough of the volatile light ends have been stripped away before crude oil is transported across the country.

In an effort to address the problem, some companies and industry experts are advocating the use of a newer vapour pressure test that uses a sealed, pressurized cylinder to prevent light ends from escaping when a sample is taken.

Reuters report on West Coast energy projects mentions Valero, Benicia

Repost from Reuters

New U.S. West Coast energy projects face tough opposition

By Edward McAllister

NEW YORK (Reuters) – The West Coast of the United States, long a battle ground for industrial and environmental interests, is set for another round of disputes as the region attracts key energy projects.

Huge new oil and gas fields have changed the way energy is transported across the United States, opening up the prospect of gas exports to Asia and increasing shipments of oil by rail. As this happens, the West Coast, from California to Washington, has become a major focus for energy developers.

Veresen Inc’s Jordan Cove liquefied natural gas (LNG) project in Coos Bay, Oregon, received approval from the Department of Energy on Monday to export gas to needy importers in Asia. Another project further north, known as Oregon LNG, is expected to receive similar approval within two months.

The two developments, both of which still need construction permits, would be the first of their kind on the West Coast outside of Alaska and represent a potentially new era for the United States, where a drilling boom has pushed output to record highs. The outcome of these projects could also set the standard for other energy developments in the region.

But opposition remains.

“Jordan Cove still needs a slew of federal and state permits to begin construction,” said Zack Malitz of San Francisco-based environmental group Credo, which is opposed to exports because it could lead to more drilling. “We still have time to sound the alarm.”

OIL, COAL

Energy projects have long met opposition in West Coast states where a stronger environmental lobby has made development approvals tougher to obtain than in other more oil industry-friendly states like Texas or Louisiana.

The strength of that opposition is being tested again as coal and oil producers look to the West Coast to broaden their business.

In recent years, mining and shipping industries have tried, and sometimes failed, to gain permission to move coal through ports in the Pacific Northwest to reach Asian markets. The Port of Coos Bay dropped its plans for a coal export terminal last spring after environmental challenges.

Now, three more export terminals remain on the drawing board. Backers of the Morrow Pacific project in Oregon expect to clear regulatory hurdles in the coming months.

Meanwhile, oil producers looking to tap west coast markets have proposed a number of terminals to receive and refine crude oil delivered on trains. Crude by rail has become a major industry in recent years, as new output overwhelms the existing pipeline network. But a number of explosive derailments have given pause to states considering more train traffic, especially loads carrying grades of crude oil from North Dakota considered more volatile than others.

In Washington State, which has the potential to become a major oil port if all pending projects are approved, opposition to moving more crude by rail is growing.

Public meetings held in October regarding a crude by rail terminal in the Port of Vancouver proposed by Tesoro Corp and Savage Services garnered tens of thousands of comments, many of which centered on concerns about crude train crashes and spills.

The project is in the permitting phase, and the final decision lies with Governor Jay Inslee.

Valero Energy Corp’s plan to build an offloading facility at its San Francisco-area refinery was pushed to the first quarter of 2015 from late 2013 to allow time for an environmental review after opponents voiced concerns to local officials.

The surge in the transport of crude oil by rail into California has caught the attention of lawmakers in Sacramento, who last week held a hearing to examine whether more resources should be dedicated to preventing and responding to accidents.

Currently, less than 1 percent of the state’s crude oil is delivered by rail. But with at least six new crude-by-rail facilities planned or under construction in California, that figure is expected to reach 25 percent by 2016.

“Regardless of whether it takes two years or four years, this is a significant change that represents an emerging threat to California’s natural resources,” Tom Cullen, administrator of the Department of Fish and Wildlife’s Office of Spill Prevention and Response, said at the hearing last week.

(Reporting By Edward McAllister in New York, Rory Carroll in San Francisco, Patrick Rucker in Washington D.C. and Kristen Hays in Houston; Editing by Joseph Radford)

For safe and healthy communities…