Friday, March 29, 2013

Pipelines are the safest way to transport energy

Story originally appeared on Market Watch.

WASHINGTON (MarketWatch) — Wednesday’s 714-barrel oil spill in Minnesota came not from oil drilling or hydrofracturing, but from the derailment of a Canadian Pacific Railway train bringing Canadian oil to America.

How odd that those who profess concern for the environment are trying to block construction of oil pipelines, the safest way of transporting oil.

There’s no better example than President Barack Obama’s delay in approving construction of the Keystone XL Pipeline. If approved, the pipeline would bring oil from Canada, our closest trading partner, to American refineries in the Gulf of Mexico, enhancing America’s energy security. Instead, Canada’s oil arrives by rail — and Canada is planning to build another pipeline to its West coast to ship the oil to China.

A crew hired by Exxon Mobil cleans up an oil spill along the Yellowstone River in Montana after an Exxon Mobil pipeline ruptured, dumping up to 1,000 barrels of crude into the river.
On March 1 the State Department issued a draft supplementary environmental impact statement on Keystone XL, concluding that the pipeline would not harm the environment. Comments on the impact statement are due on April 22.

The relative safety of pipelines vis-à-vis road and rail to transport oil and gas is an important topic. Data published by the Department of Transportation show that pipelines have lower injury and fatality rates than road and rail, in addition to enjoying a substantial cost advantage.

These findings have substantial relevance for America’s energy future. Petroleum production in North America (Mexico, Canada, and the United States) is now over 16 million barrels a day, according to the Energy Information Agency, and could climb to 27 million barrels a day by 2020. Natural gas production in Canada and the United States could rise by a third over the same period, climbing to 22 billion cubic feet per day.

Whether oil and gas are produced in Canada, Alaska, North Dakota, or the Gulf of Mexico, it will be used all over the country, especially since new environmental regulations are resulting in the closures of coal-fired power plants. Large fleets of buses and trucks are switching to natural gas, General Motors and Chrysler are making dual-fuel pickup trucks, and newspapers are speculating about the timing of natural-gas passenger vehicles for the American market.

Pipelines result in fewer fatalities, injuries, and environmental damage than road and rail. Already almost 500,000 miles of interstate pipeline crisscross America, carrying crude oil, petroleum products, and natural gas. The network of pipelines has a remarkable safety record. Americans are more likely to get struck by lightning than to get killed in a pipeline accident.

America has 175,000 miles of onshore and offshore petroleum pipeline and 321,000 miles of natural-gas transmission and gathering pipeline. In addition, over 2 million miles of natural gas distribution pipeline send natural gas to businesses and consumers. This is expected to increase as America shifts to natural gas to take advantage of low prices that are expected to last into the foreseeable future.

Pipeline transportation of oil and gas is safer than transportation by road and rail. Pipelines are the primary mode of transportation for crude oil, petroleum products, and natural gas. Approximately 70% of crude oil and petroleum products are shipped by pipeline on a ton-mile basis. Tanker and barge traffic accounts for approximately 23% of oil shipments. Trucking accounts for 4% of shipments, and rail for the remaining 3%. Essentially all dry natural gas is shipped by pipeline to end users.

If safety and environmental damages in the transportation of oil and gas were proportionate to the volume of shipments, one would expect that the vast majority of damages to occur on pipelines. But the opposite is true: the majority of incidents occur on road and rail.

Data on pipeline safety are available from the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration Office of Pipeline Safety. Operators report to PHMSA any incident that crosses a certain safety threshold. These reports enable the public to calculate the safety of pipelines in comparison to road and rail.

Oil spills from rail are increasing, according to the PHMSA. Between 2010 and 2012, the PHMSA reported 112 oil spills, compared to 10 spills between 2007 and 2009, according to calculations by the Wall Street Journal.

In contrast, injuries and fatalities from pipelines are declining. There were an average of 32 serious incidents — defined as those involving a fatality, or an injury requiring hospitalization — between 2010 and 2012, compared to 42 serious incidents between 2007 and 2009, and 38 between 2004 and 2006.

To draw another comparison, according to the National Weather Service, there were an average of 37 reported deaths annually caused by lightning from 2002 through 2011. Over the same period, fatalities related to pipeline incidents were about 15 per year. An individual had more than twice the chance of getting killed by lightning as being killed in a pipeline incident.

Some claim that pipelines carrying Canadian oil sands crude, known as diluted bitumen, have more internal corrosion, and are subject to more incidents. However, PHMSA data show no incidents of oil releases from corrosion from Canadian diluted bitumen between 2002 and 2010. Oil sands crude has been transported in American pipelines for the past decade.

Pipeline safety matters because America continues to ramp up production of oil and natural gas. We need better pipelines to get oil from North Dakota to the refineries in the Gulf, and natural gas from the Marcellus Shale in Pennsylvania and the Utica Shale in Ohio to the rest of the country.

The new American energy revolution is attracting energy-intensive manufacturing, such as petrochemicals and steel, back to America. In order for energy to travel to new manufacturing plants, we need more pipelines — the safest way to move fuel.

New York Assembly votes to extend fracking ban until 2015

Story originally appeared on the Washington Examiner.

The New York Assembly voted today to delay a decision on legalizing fracking in the state until 2015, extending a moratorium on the drilling practice that has been in place since 2008.

Lawmakers approved the moratorium over fears that fracking may be harmful to the environment, particularly drinking water. Fracking involves sending water mixed with sand and chemicals down a deep well shaft to bring trapped oil and gas to the surface.

“We will not sit idly by and endanger the health and safety of our communities by rushing necessary health and safety reviews,” Assembly Speaker Sheldon Silver said in a statement before the vote, according to Reuters.

The moratorium must still be passed by the state Senate where a similar bill was introduced yesterday, before it can be signed into law by Gov. Andrew Cuomo.

A group of senators, called the Independent Democratic Conference is also calling for a two-year delay until several health and environment reviews are completed, the Associated Press reported.

New York  last month missed its deadline for releasing the environmental impact report on fracking that would give regulators guidelines for drilling rules. The Department of Evironmental Conservation said at the time it would hold its report until the state’s Department of Health released its own review on the public health impacts of fracking.

Exxon discussing fracking with German authorities

Story originally appeared on Market Watch.

Exxon Mobil Corp. XOM +0.03%  has been discussing hydraulic fracturing with German regulators and communities as it looks at future exploration in the country, the company said in its 2012 financial and operational review released this week.

“Future exploration activities await the outcome of ongoing discussion with regulators and communities on the subject of hydraulic fracturing,” Exxon said in the document.

Exxon is Germany’s largest natural-gas producer, with Exxon-operated fields accounting for about 70% of all natural gas produced in the country. It holds nine exploration licenses in Germany, covering 2.8 million acres with shale gas, tight liquids, and coalbed methane, the company said.

Germany does not have an official ban or moratorium on hydraulic fracturing, or fracking, unlike countries such as France and the Netherlands.

Exxon’s “ultra cautious” comments, however, imply an informal policy more restrictive than markets realize, analysts at Raymond James said in a note Thursday to clients.

Chancellor Angela Merkel said earlier this year the country should be careful about it since Germany is more densely populated than the U.S. Germany’s environmental minister has said he wants to limit fracking and even ban it in certain areas.

Exxon is likely committed to Germany and the negotiations as three of its nine licenses were added in 2012.

The financial and operational review also offers more windows into Exxon’s far-flung empire, and puts them in more perspective.

For instance, Exxon acquired 192,000 net acres in the Bakken shale formation, increasing its position there by nearly 50%.

At the end of 2012, it completed its fifth acquisition in southern Oklahoma since 2010 — Exxon expanded its presence in the liquids-rich Woodford shale to more than 270,000 net acres.

Production there more than doubled in 2012 to about 19,000 barrels of oil equivalent a day from less than 5,000 barrels in 2010.

Output at Woodford and other shale areas in the Marietta Basin to the southwest could grow to more than 150,000 barrels of oil equivalent a day, Exxon said.

Exxon didn’t neglect conventional plays. It also increased its presence in offshore Gulf of Mexico by nearly 400,000 acres, participating in two lease actions there.

Tuesday, March 19, 2013

President pushes $2B alternative-fuel research fund

Story originally appeared on USA Today.

Appears to try to appeal to both parties by pitching plan not just as an environmental issue but as a job-creation plan that would help U.S. remain a technology leader.

WASHINGTON – President Barack Obama is in Chicago today, talking up the need for a $2-billion Energy Trust Fund he wants to help fund research into how to run the cars and trucks of the future on fuels other than oil.
Obama mentioned his proposal prominently in last month's State of the Union speech to Congress. But he put a price tag on the idea during a speech today at the Argonne National Laboratory outside Chicago: $2 billion over 10 years.
The White House said the money would come from earmarking for the fund revenue the federal government collects from leasing offshore oil and gas drilling sites, now some $6 billion per year.
A fact sheet released by the White House today said the "Energy Security Trust" would be designed to "invest in breakthrough research that will make the technologies of the future cheaper and better – technologies that will protect American families from spikes in gas prices and allow us to run our cars and trucks on electricity or homegrown fuels."
It said the research would be into "a range of cost-effective technologies" and mentioned specifically "advanced vehicles that run on electricity, homegrown biofuels, fuel cells and domestically produced natural gas."
Obama's plans for funding additional research into energy efficiency and advanced vehicle technology could run into hurdles, however. Some key members of Congress have raised questions about lagging sales of electric vehicles in the past and concerns have dogged funding put into some battery makers that failed to perform, such as A123 Systems which filed for bankruptcy reorganization last fall and is being sold primarily to a Chinese company.
Significant politically, perhaps, is that the proposal expands the range of technologies to be explored beyond electricity. Republicans have pushed to expand oil and gas drilling on federal land and water, while Obama and many Democrats have worked to boost renewable energy sources such as wind and solar power.
Obama appears to have tried to appeal to both parties by pitching the trust plan not just as an environmental issue but as a job-creation plan that would help the United States remain a technology leader.
David Pumphrey, co-director of the Energy and National Security program at the Center for Strategic and International Studies, said the proposal is likely to meet resistance in Congress. Obama was shrewd to frame the issue in terms of energy security and reducing oil imports, rather than as an effort to address climate change, but the plan "still takes a revenue stream and directs it into this usage" for clean energy, Pumphrey said. "That's $2 billon that could go to other uses or deficit reduction."
Still, there were signs agreement may be possible. Sen. Lisa Murkowski has called it "an idea I may agree with."
Murkowski, senior Republican on the Senate Energy Committee, did not fully endorse the plan, which is similar to one she has proposed to pay for research on new energy technology from with revenue from drilling for oil and natural gas on public lands that previously were off-limits to energy production.
White House officials told the Associated Press that the plan would not require opening federal lands or water where drilling is now banned; instead, they are counting on increased production from existing sites and streamlining of the permit process.
Argonne is a natural setting for a speech on energy technology, though. In 2012, it was selected for an award of up to $120-million over five years to establish a new Batteries and Energy Storage Hub aimed at advancing next generation battery and energy storage technologies both for cars and the nation's power grid.
The University of Michigan, Dow Chemical, Johnson Controls and Michigan Technological University were part of the Argonne-led Joint Center for Energy Storage Research, which was also supported to set up research hubs in Ann Arbor and Holland, Mich.
Obama is expected to call on Congress to approve the $2-billion Energy Trust Fund this year.

Friday, March 15, 2013

David Cameron says seabed mining could be worth £40bn to Britain

Story originally appeared on The Guardian

Prime minister says UK can be at head of industry but chooses American defence firm to exploit new Pacific licence

David Cameron has pledged to put Britain at the forefront of a new international seabed mining industry, which he claimed could be worth £40bn to the UK economy over the next 30 years.

But the prime minister has chosen an American defence company – Lockheed Martin – to spearhead the drive to collect from the depths of the ocean the copper, nickel and rare earth minerals used in mobile phones and solar panels.
Russia and China also have licences to "mine" the ocean bed but Cameron said on Thursday: "With our technology, skills, scientific and environmental expertise at the forefront, this demonstrates that the UK is open for business as we compete in the global race."
Speaking at a launch at the Excel Centre in London's Docklands, he said talks were already under way with a potential supply chain of up to 100 British companies, even though the main activity will take place off the west coast of America.
The Department for Business, Innovation and Skills has, in partnership with UK Seabed Resources – a newly formed subsidiary of Lockheed – obtained a licence and contract to explore a 58,000 sq km area of the Pacific Ocean for mineral-rich polymetallic "nodules".
These rocky chunks, the size of a tennis ball, will eventually be scooped up using a seabed harvester and then broken up to release the minerals, if all goes to plan. Lockheed claims to have discovered riches in that particular area off the US coast after a bizarre hunt in the 1970s for a lost Russian submarine paid for by eccentric US billionaire Howard Hughes.
The defence and aerospace group is keen to stress that its extraction measures are different from the deep-sea mining techniques that have been proposed by others and which have enraged environmentalists.
It also argues that the nodules containing rare earth minerals found on the seabed have little of the uranium content that has also been a brake on terrestrial mining in places such as Greenland.
"Environmentally responsible collection of polymetallic nodules presents a complex engineering challenge but our team has the knowledge and experience to help position the UK at the forefront of this emerging industry," said Stephen Ball, the British-born chief executive of UK Seabed Resources and of Lockheed Martin UK (a company that is part of the managing consortium of the Atomic Weapons Establishment at Aldermaston as well as being a key Ministry of Defence contractor.)
The science minister, David Willetts, also present at the project launch, said the UK should benefit from already being a leader in underwater robotics and autonomous systems used in the development of North Sea oil and gas.
Ball was more cautious than the prime minister about the potential to create thousands of jobs and bring in more than £1bn a year from the industry, saying he was not too keen on "aspirational promises".
And while he was keen that British companies should be engaged in future deepsea production, he said they would only be chosen if they were better than the competing foreign firms.
Currently the licence obtained from the International Seabed Authority (ISA) gives the UK government and Lockheed the right to explore but not extract, so a second licence would be required for that. And before any mechanical harvester is built, there will have to be a thorough environmental study, which could begin this summer.
The experience of the offshore wind industry has shown that even projects close to the coast of the UK have been driven by foreign companies using non-British suppliers.
Exploration outside 200-mile territorial waters can only be undertaken through application for a licence from the ISA, established under the United Nations law of the sea convention.
Russia recently signed a 15-year contract to prospect for metallic sulphides in the Atlantic, where volcanic hot springs create mineral-rich rock formations. Two applications for exploration were filed last summer for areas in the west Pacific Ocean, one from China and another from Japan.

Friday, March 1, 2013

Chinese Officials Dared to Swim in Toxic Water

Story first appeared on USA Today -

Swim for a half-hour in a river in east China's Cangnan county and win $48,000.
Sound like easy money? Take a look at the river.

Chinese angry about their toxic and trash-choked rivers have made online offers of cash rewards to the chiefs of their local government's environmental protection bureaus to take a swim in the waterways they are in charge of protecting.

One Internet posting offers $32,000 if an official will spend 20 minutes in a river in Rui'an or $16,000 for a 10-minute river dip in Dongguan down south.

None of the Internet users expects the officials to take the bait. The social media campaign against water pollution that inspired these rewards leads some analysts to hope authorities will take action after the relative success of a public movement to increase government transparency over the abysmal air quality in many Chinese cities.

China's water and air quality has long been sacrificed by the government to China's thirst for industrial growth in recent decades. Even the government releases grim statistics: 64% of groundwater in 118 Chinese cities is "severely polluted," state news agency Xinhua reports.

To provide examples, Chinese journalist and activist Deng Fei, whose Twitter-like micro-blog has almost 3 million followers, asked people last week to post pictures of rivers in their hometowns as they traveled there for the recent Lunar New Year celebrations.

The strong response, by thousands of Chinese Internet users, "shows more Chinese pay close attention to pollution, and now they have the tools to express their opinions," Deng said.

Although China's citizens still lack formal channels, such as democratic elections, to influence their government, this social-media-driven campaign "has become a large-scale discussion topic that shows the will of the people," so China's "parliament," the National People's Congress (NPC), and ministries must take notice, he said.

Two delegates to next month's annual session of the NPC — when the ruling Communist Party's new leader, Xi Jinping, will be appointed president — promised to raise the issue of water pollution, Deng said.

The rewards for hazardous swimming started Saturday when eyeglass entrepreneur Jin Zengmin posted photos online of a filthy river in Rui'an in Zhejiang province, with his $32,000 bet for the area's environmental protection director. Jin reminisced about swimming in the river as a child and watching his mother washing clothes there.

"Even animals don't dare swim in these rivers, much less officials," Deng said.

The offering of money "is an expression of anger and frustration over the dereliction of duty by local environmental officials and their failure to enforce the rules," said Ma Jun, director of the Institute of Public and Environmental Affairs, a Beijing-based non-profit group.  Middle-aged Chinese "remember their rivers used to be cleaner, drinkable, swimmable and touchable, but no longer," he said.

This social media push has the potential to grow into something similar to the air quality campaign, given that the problem of water pollution is as bad or even worse, Ma said. "The local government still puts GDP (gross domestic product) rate ahead of environmental protection. We need the public to change that," he said.

The chief environmental official in Rui'an, Bao Zhenmin, blamed river pollution on rubbish discarded by residents and migrant workers, not shoe factories, as Jin alleged. Bao promised steps to reduce the problem, reported.

Deng said the answer is for the government to share more information with the public about water discharges, increase legal penalties against illegal discharges and ease restrictions on people filing lawsuits in environmental cases. He said environmental offices should be controlled by Beijing, not the local governments often responsible for pollution.