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Trump's EPA sets precedent by becoming first agency to end 'sue and settle' practice

| TOPICS: Oil and Gas News
Posted on October 17, 2017

The Environmental Protection Agency on Monday became the first of President Trump's agencies to issue an order barring the agency from being drawn into court settlements that alter environmental outcomes to the liking of environmental and other special interest groups.

"The days of regulation through litigation are over," EPA chief Scott Pruitt declared in a statement. "We will no longer go behind closed doors and use consent decrees and settlement agreements to resolve lawsuits filed against the Agency by special interest groups where doing so would circumvent the regulatory process set forth by Congress."

Pruitt's order would also end the practice of paying out "tens of thousands of dollars in attorney's fees to these groups with which we swiftly settle," Pruitt added.

The litigation tool, commonly referred to as "sue and settle," was used with great success by environmental groups under the Obama administration to force a regulatory process behind closed doors, according to Pruitt. The Sierra Club, for example, used the legal tactic often as part of its "Beyond Coal" campaign program to force coal-fired power plants into early retirement.

It is a tactic that has served the environmental community well over the last decade. But EPA Administrator Scott Pruitt sought to change all of that on Monday through a new agency-wide policy to bar it from entering settlements where all affected stakeholders would be not be included in the final court-enforced settlement and consent decree.

Industry groups like the Chamber of Commerce have lobbied consistently against the practice of sue and settle, and Republicans on Capitol Hill have introduced legislation to confront the issue in recent years without much success.

It is "something a long time coming … and a very important day," Pruitt told reporters early Monday morning ahead of signing a memorandum directing the agency not to enter into sue and settle agreements.

"We are no longer going to be engaged in that practice anymore," he said. "What this sue and settle process has done is bypass the regulatory process altogether."

He called the practice "wrong," and said the agency is "the first agency to issue this directive in a memorandum" to challenge and stop abuse of the sue and settle process.

"It is a practice not unique to the EPA," but the number of cases brought to the agency to enter court-enforced settlements has placed it "in first place," Pruitt added.

"We are the first agency to take this action," he said, although Attorney General Jeff Sessions is "keenly interested" in engaging the issue of sue and settle across the government.

Pruitt said that "other agencies are taking notice as well."


Federal regulators approve two major East Coast pipelines

| TOPICS: Oil and Gas News
Posted on October 17, 2017

Article By: The Hill

Federal regulators on Friday approved two major natural gas pipelines for construction on the East Coast, a move heralded by business leaders and condemned by environmentalists.

The Federal Energy Regulatory Commission granted approvals for the Mountain Valley and Atlantic Coast pipelines, according to The Associated Press. One of the three commissioners dissented.

The Mountain Valley Pipeline, which is slated to cost $3.5 billion, would span 300 miles from the northern portion of West Virginia all the way to Danville, Va.

The Atlantic Coast Pipeline, which will amount to $5 billion, will stretch 600 miles from north-central West Virginia, through Virginia, and through eastern North Carolina. 

Business advocates say the pipelines will lower energy costs and jumpstart economic development, however opponents argue the pipelines will interfere with property rights and have a negative impact on the environment. 

“Given the environmental impacts and possible superior alternatives, approving these two pipeline projects on this record is not a decision I can support,” said commissioner Cheryl LaFleur, an Obama-era appointee who dissented on Friday, according to the AP.

The decision is the latest victory for pipeline advocates. It comes days after a federal judge ruled that the Dakota Access pipeline could continue its operation during a federal review of the project’s environmental impact. 


NC officials reject environmental plan for Atlantic Coast Pipeline

| TOPICS: Oil and Gas News
Posted on October 10, 2017

Article By: TheNews&Observer

Gov. Roy Cooper’s administration has rejected environmental plans by Duke Energy and three other energy companies to build an interstate pipeline to carry natural gas from West Virginia into North Carolina.

The letter of disapproval from the N.C. Department of Environmental Quality is the first decision on the proposed Atlantic Coast Pipeline from any state or federal government agency in the three states the project would traverse. Duke Energy is also expecting a decision this month from the Federal Energy Regulatory Commission as to whether the $5 billion pipeline project is necessary.

The N.C. Department of Environmental Quality said the 600-mile underground pipeline, which would travel through eight North Carolina counties, including Johnston and Nash, does not meet the state’s standards for erosion and sediment control. The agency has asked Charlotte-based Duke and its business partners to resubmit the application with additional information within 15 days, or to contest the agency’s disapproval and request a hearing within 60 days.

The erosion plan is one of several hurdles the Atlantic Coast Pipeline needs to clear in North Carolina. The project also needs an air-quality permit for a compressor, a machine that pushes the gas through the pipeline. And it needs a water-quality permit allowing developers to drill through streams and wetlands, as well as several storm water control permits for multiple locations along the proposed route.

Duke issued a statement Monday saying it will submit the information requested for the erosion and sedimentation permit. The company has said the pipeline is expected to start moving natural gas in late 2019.

“It’s a normal part of the process for agencies to ask for additional information before making a final decision,” the company said.

“We’ve provided most of the requested information already, and we expect to provide the rest later this week,” Duke said. “That should resolve the issue and allow the agency to complete its review.”

One of the opponents of the project characterized the agency’s decision as more than a routine matter.

“At the very least, it represents a significant hurdle the Atlantic Coast Pipeline will have to overcome,” said Doug Jackson, spokesman for the Sierra Club.

The Department of Environmental Quality issued the ruling Sept. 26 and posted it online Friday. The agency wants the application to include the project’s effects on streams and wetlands, and to include various other calculations, maps and documentation.

Duke applied for the project with Virginia-based Dominion Energy, Georgia-based Southern Energy and Piedmont Natural Gas, the Charlotte natural gas utility that Duke acquired last year.

The pipeline, now in its third year of planning and development, would carry natural gas from the Marcellus Shale, a giant depository of natural gas spanning Pennsylvania, West Virginia, Ohio and New York. Natural gas is extracted from the Marcellus Shale through hydraulic fracturing, or fracking, and would be delivered to North Carolina to supply fuel to run electric power plants in this state, as well as to heat homes and businesses.

The pipeline is being fought by a host of environmental organizations, eliciting thousands of public comments, plus filings from Native American organizations as well as The Nature Conservancy, Clean Water North Carolina and other public interest groups.

“This is a high-profile fight through Virginia and North Carolina,” said Kelly Martin, director of the Sierra Club’s Beyond Dirty Fuels campaign. “I see this decision as the state indicating they’re doing a substantial review of the pipeline and its impacts on streams and waterways of North Carolina.”


Oil and gas industry resilient among low prices, executives say

| TOPICS: Oil and Gas News
Posted on October 10, 2017

Article By: mySA

Low oil and gas prices, the rise of electric cars and tracking an overwhelming amount of data — there’s no shortage of challenges facing the oil and gas industry.

But executives who spoke Monday at the Society of Petroleum Engineers’ Annual Technical Conference and Exhibition, which is being held through Thursday at the Convention Center, said they see a world where oil and gas has a place at the energy table for a long time to come.

Advances in technology and improvements in efficiency continue to drive well costs down, keeping the industry economically competitive, executives said.

“The way we’re doing it now is dramatically different than the way we did it in the early 2000s,” said Dave Hager, CEO of Devon Energy.

Drilling and completion costs are down about 40 percent from the peak of the oil boom, which came in mid-2014 at $107 per barrel before crashing to a low as $26 by early 2016. While about half of that cost savings for companies is due to the drop in prices oil field service companies have been able to charge, wells are getting better in other ways, Hager said.

New wells in the first 90 days produce 4.5 times the amount of oil — in the same area — as wells drilled five years ago, Hager said.

Lorenzo Simonelli, CEO of Houston-based oil field service firm Baker Hughes, said that so much data is being gathered in the oil field that the challenge comes in making sense of it all. He compared it to going for a morning jog 20 years ago, when someone just ran out the front door, to today when people can use smart phones, smart watches and heart rate monitors to track everything from their diet to their pace.

“Now you take it to the world of oil and gas,” Simonelli. “That is the way we’re taking care of the wells.” The data collected over the lifetime of a well creates a digital “twin” that can then be tested under different scenarios.

Real-time monitoring of wells means that companies know exactly what’s going right or wrong at a particular well site. Instead of having people randomly drive around to check wells, Hager said employees can check their phones and go directly to problem areas where something like an open hatch could be releasing fugitive emissions. “It’s managing by exception,” Hager said. If there’s a problem, “they go straight to that well.”

Deborah Wince-Smith, president and CEO of the U.S. Council on Competitiveness, said the U.S. in the last decade has gone from being energy-weak to energy-strong, which has been a boost for domestic manufacturing.

“We’ve really changed the game when it comes to the cost of energy,” Wince-Smith said.

After a decades long slide, U.S. oil and gas production have surged with shale drilling, the process of using water, chemicals and sand pumped at high pressure to shatter tight rock.

National oil production next year is expected to reach around 9.9 million barrels per day and surpass the previous high of 9.6 million barrels per day from 1970.

This year, the U.S. Energy Information Administration expects the U.S. to become a net exporter of natural gas. It already surpassed Russia in 2009 to become the world’s largest natural gas producer.
The rush of new hydrocarbons into the U.S. market has helped create a glut of oil on the world market.

Even as electric cars come online, driving patterns shift as millennials show less interest in car ownership, and renewables such as solar and wind gain market share, natural gas for electric generation is a bright spot for the industry. About a third of all U.S. electric production comes from natural gas fired plants, according to the Department of Energy.

“People forget that electricity needs to created by something,” said Simonelli. “We’re here for numerous decades to come.”
What’s going to be the next big thing after the shale revolution?

“I get asked this question a fair amount of times,” Hager said. “We talk about, as you might imagine around our coffee, and we know the answer. We’re just not telling anybody.”

Everyone laughed, and Hager said that he’s convinced that the industry — which has transitioned from drilling onshore vertical wells, to shallow offshore, to deepwater offshore mega projects, to shale — is creative enough to continue to come up with new innovations.

“There is going to be something else,” Hager said. “I am absolutely convinced there is going to be some thing else.”
Twitter: @Jennifer_Hiller


India to import more oil from US as energy ties grow

| TOPICS: Oil and Gas News
Posted on October 04, 2017

Article By: Gulf News

Abu Dhabi: India is expected to forge a closer cooperation with the US in the energy sector and import more oil due to increase in demand, analysts said.

Earlier this week, India received its first ever shipment of US crude when a very large crude carrier docked at Paradip port in the eastern state of Odisha.

This is one of the first shipments to India since the United States stopped oil exports in 1975 and follows recent commitments to US oil purchases by Indian state refiners.

Indian Oil Corporation and Bharat Petroleum have placed orders for over 2 million barrels from the United States, according to a statement from the US Embassy in India posted on their website.

“We look forward to working together on further sales of US crude and exploring opportunities to expand the role of natural gas in India,” said Mary Kay Carlson, Charge d’Affaires at the US Embassy in New Delhi.

The development comes as India seeks to diversify its oil imports due to growing demand in the country.

Petroleum consumption in India is likely to grow by about 6 per cent in 2017-18, Moody’s investors Service said in a report last year.

“India due to its growing economy and increasing population has been seeking to diversify its oil imports and American oil offers an opportunity for India to reach its supplier diversification goals,” Justin Dargin, global energy expert a University of Oxford in London, told Gulf News by email. “In the mid to long-term, we can expect to see closer cooperation in the energy sector between the two countries. India will undoubtedly begin to import more oil from the US.”

Opec concerns

Currently, India depends almost entirely on production from the Organisation of the Petroleum Exporting Countries (Opec) to meet its energy needs. Just six countries — Saudi Arabia, Iraq, UAE, Kuwait, Nigeria and Venezuela make more than two thirds of its imports, analysts said.

“With rising oil prices, US output will not decline and producers need to get rid of excess supply to avoid flooding domestic markets. Only Opec countries lose from this situation,” said Francisco Quintana, head of strategy at Foresight Advisors.

Opec countries should also be concerned about shale oil technology making its appearance in other jurisdictions that rely upon the group for imported oil.

Countries that once depended upon Opec imports may be able to produce their own shale oil deposits thereby reducing their reliance upon Opec in future, Dargin said.

India, the world’s third-biggest oil importer and consumer after the United States and China, follows into the steps of other Asian countries like South Korea, Japan and China to buy US crude.

Buying of US crude has also become attractive for Indian refiners after the differential between Brent and Dubai (which serves as a benchmark for countries in the east) has narrowed, even after considering the costs of importing from across the Atlantic.