Wednesday, November 25, 2015


Original Story:

CALGARY, Alberta—Canadian oil producers, pummeled by the prolonged slump in oil prices and a string of political setbacks, now face another challenge: higher carbon taxes. A Fort Worth oil & gas lawyer is reviewing the details of this story.

The nation’s oil-sands developers have been hit particularly hard by lower oil prices, because they are among the most expensive oil plays in the world. Already facing a corporate tax hike and the possibility of higher royalty payments in Alberta—the province richest in oil sands—the industry was dealt another blow by the Obama administration’s rejection last week of the Keystone XL pipeline, which was designed to transport oil-sands output to Gulf Coast refineries.

All major oil-sands operators in recent weeks posted losses or steep declines in profit for the most-recent quarter, as shrinking revenue outpaced cost cuts. Some global giants are rethinking future development. Late last month Royal Dutch Shell PLC shelved an 80,000-barrel-a-day project, following similar moves by Total SA of France and Norway’s Statoil ASA.

Now, ahead of a United Nations climate-change conference in Paris starting Nov. 30, oil companies await the details of moves—including possible new taxes on carbon—pledged by new governments in Ottawa and Alberta to rein in greenhouse-gas emissions, making the oil sands a global test case for climate policy. A Tulsa oil and gas lawyer represents clients in oil and gas transactions, mineral rights matters, and in royalty percentage contracts.

“Canada’s years of being a less-than-enthusiastic actor on the climate-change file are behind us,” Prime Minister Justin Trudeau, who took office last week, said at a news conference on Oct. 20, the day after his Liberal Party won national elections. Mr. Trudeau promised to start working on a framework for regulating greenhouse-gas emissions within 90 days of the Paris summit.

Within weeks of taking power in May, Alberta Premier Rachel Notley’s government said it would double Alberta’s existing tax on carbon emissions by 2017, and has committed to additional measures in time for the U.N. conference in Paris. Ms. Notley is expected to release details of the proposals later this month. Alberta pioneered carbon taxes in 2007 when it introduced a levy of 15 Canadian dollars ($11.37) a metric ton. A Dallas energy lawyer provides professional legal counsel and extensive experience in many aspects of energy law.

Oil sands are among the highest-intensity greenhouse-gas producers of any oil fields in the world. Production from the oil sands has been growing at a steady clip in recent years under previous provincial and federal governments that played down climate-change risks and ignored calls from environmental groups and opposition politicians for tougher rules on carbon-dioxide emissions.

Canada’s environment ministry says the country’s CO2 emissions have continued to rise over the past five years and are expected to hit 781 million metric tons a year by 2020 if no reduction measures are taken. While oil sands account for just a fraction of that total, it is one of the fastest-growing contributors to the release of these gases. The government’s latest estimate projects oil sands-related emissions to nearly double to 103 million metric tons by 2020. A Greenville environmental attorney is following this story closely.

Mr. Trudeau’s stance is a direct challenge to Canada’s oil-sands industry, but the country’s oil producers are divided on how best to cope with the push for stricter environmental regulations.

Some, including the nation’s No. 1 oil producer, Suncor Energy Inc., say they accept the tougher rules as inevitable, and can use them to help burnish their environmental reputations. Others, such as Canadian Natural Resources Ltd.—Canada’s biggest natural-gas producer and a major oil-sands leaseholder—are pushing back, warning the rules would make Canadian crude even less competitive.

The divide in the industry has surfaced in submissions by top energy companies to a government advisory panel of experts that will recommend new climate-policy measures in Alberta. A Detroit

“The time is right for a higher level of ambition in carbon policy stringency in Alberta,” Suncor said in its submission to the provincial panel.

Suncor Chief Executive Steve Williams has publicly championed new taxes on retail sales of energy such as electricity and gasoline, in addition to levies on large industrial emitters. “Every indication is that, on the road to Paris, Canada will start to take positions” to combat climate change, Mr. Williams told reporters late last month. A Detroit environmental lawyer represents clients in environmental matters.

Canadian Natural said in its submission that it objects to higher carbon taxes and other new government-mandated policies, and has called for allowing oil and gas producers to focus on new technology to cut emissions.

Its 34-slide Power Point presentation to the Alberta panel lays out the competitive challenges facing the industry and warns that tinkering with policies that directly affect oil and gas producers “is very difficult and more often than not has unintended consequences.” In a similar vein, oil-sands producer Husky Energy Inc. warns against making emission cuts deeper than in other countries such as the U.S.

“It would be politically suicidal for us to do a mea culpa and hang our neck out in a way that disadvantages the industry here,” Husky CEO Asim Ghosh said on a recent conference call.

The main industry lobby, the Canadian Association of Petroleum Producers, is urging regulators to offset any additional cost from climate-policy changes with a cut in royalties owed to Alberta’s government from oil and gas output from provincial lands. Such a “revenue neutral” approach to reducing CO2 emissions has been backed by multinational oil giants with exposure to Canada’s oil-sands, such as Exxon Mobil Corp. and Shell.

Thursday, November 12, 2015


Original Story:

FORT McMURRAY, Alberta — At a camp for oil workers here, a collection of 16 three-story buildings that once housed 2,000 workers sits empty. A parking lot at a neighboring camp is now dotted with abandoned cars. With oil prices falling precipitously, capital-intensive projects rooted in the heavy crude mined from Alberta’s oil sands are losing money, contributing to the loss of about 35,000 energy industry jobs across the province. A Tulsa mineral rights lawyer is following this story closely.

Yet Alberta Highway 63, the major artery connecting Northern Alberta’s oil sands with the rest of the country, still buzzes with traffic. Tractor-trailers hauling loads that resemble rolling petrochemical plants parade past fleets of buses used to shuttle workers. Most vehicles carry “buggy whips” — bright orange pennants attached to tall spring-loaded wands — to help prevent them from being run over by the 1.6-million-pound dump trucks used in the oil sands mines.

Despite a severe economic downturn in a region whose growth once seemed limitless, many energy companies have too much invested in the oil sands to slow down or turn off the taps. In addition to the continued operation of existing plants, construction persists on projects that began before the price fell, largely because billions of dollars have already been spent on them. Oil sands projects are based on 40-year investment time frames, so their owners are being forced to wait out slumps. A Tulsa oil and gas lawyer represents gas and oil clients in federal and state matters and in federal and state courts.

“It really is tough right now,” said Greg Stringham, the vice president for markets and oil sands at the Canadian Association of Petroleum Producers, a trade group that generally speaks for the industry in Alberta. “We see kind of a lot of volatility over the next four or five years.”

After an extraordinary boom that attracted many of the world’s largest energy companies and about $200 billion worth of investments to oil sands development over the last 15 years, the industry is in a state of financial stasis, and navigating the decline has proved challenging. Pipeline plans that would create new export markets, including Keystone XL, have been hampered by environmental concerns and political opposition. The hazy outlook is creating turmoil in a province and a country that has become dependent on the energy business.

Canada is now dealing with the economic fallout, having slipped into a mild recession earlier this year. And Alberta, which relies most heavily on oil royalties, now expects to post a deficit of 6 billion Canadian dollars, or about $4.5 billion. The political landscape has also shifted.

Last spring, a left-of-center government ended four decades of Conservative rule in Alberta. Federally, polls suggest that the Conservative party — which championed Keystone XL and repeatedly resisted calls for stricter greenhouse gas emission controls in the oil sands — is struggling to get re-elected in October. A Tulsa oil and gas attorney is reviewing the details of this story.

“The pendulum has swung,” said Stephen Ross, the president of Devonian Properties, an Alberta development company that has built several residential and commercial properties in Fort McMurray.

Since the end of the World War ll, oil has made Alberta wealthy. The increase in oil sands development since the early 2000s had only intensified the province’s good fortune and turned obscure Fort McMurray into a boomtown and an outsize contributor to the entire Canadian economy.

When Mr. Ross first bought development land here in 2000, he paid about 27,000 Canadian dollars an acre. He stopped buying land long before it hit one million Canadian dollars an acre.

“The town has had huge growing pains,” Mr. Ross said. “It’s like something you’ve never seen.”

Operating oil sands plants quickly decreased budgets and cut services, like equipment cleaning, which were deemed optional. And as portions of construction projects are finished, construction workers are sent packing. The halt on new projects has left order books increasingly blank at a variety of suppliers, like engineering firms.

Since the price collapse, Teck Resources has delayed the start of its oil sands project by five years to 2026. Cenovus Energy substantially reduced budgets for its long-term developments. And Osum Oil Sands has set aside some of the expansion planned for a project it purchased from Shell last year. The Chinese-owned company Nexen, which had its oil sands production curtailed by regulators for about a month in August because of a pipeline leak, has deferred plans to build another upgrader facility, where tar-like bitumen of the oil sands is converted into synthetic crude oil, until the end of 2020.

These projects, and others that have begun over the last 15 years, have largely been built and operated by an itinerant work force. These workers fly into Fort McMurray’s new airport terminal and are bused to work camps up to two hours away. Their lives are a cycle of three straight weeks of long shifts interrupted by 10-day trips home.

That transient population has little or no connection to the city when working. When laid off, they become unemployment statistics, not in Alberta, but in the provinces of their hometowns. It’s also in those regions, more than Alberta, where the loss of once-large paychecks is most felt, having a ripple effect across the country. A Tulsa environmental lawyer provides professional legal counsel and extensive experience in many aspects of environmental law.

For Canadian oil executives, the significant shift in the province’s politics is of great concern. Rachel Notley, the new premier and leader of the New Democratic Party, has said that she would prefer more refining to take place in Alberta instead of shipping more oil sands production to the United States via Keystone XL. And speaking to the Alberta Chamber of Commerce last month, Ms. Notley told the energy industry that it must “clean up its environmental act.”

One executive and investor, who did not want to be named while the province is reviewing his industry, said growing sentiment that the industry does not pay Alberta enough in royalties and lags on environmental protections will kill new investments, even if prices start to rise.

“There’s never been a time when I’ve been less optimistic,” he said. “The general public doesn’t know how bad it is. It just hasn’t hit yet.”

He did, however, acknowledge that environmentalists had won the debate on Keystone XL as well as various other pipeline plans.

“I don’t know how the issue got away, but it’s obvious now that it did,” he said.

And the workers who have benefited from the boom are now realizing that their stretch of good luck might be over, permanently.

Réjean Godin, a truck driver and heavy equipment operator, began the long-distance commute from the Atlantic province of New Brunswick 13 years ago. Since then, he’s earned wages four or five times the rate of those back home, an area of high unemployment.

Standing near his well-worn Toyota RAV4 that still bears New Brunswick license plates, Mr. Godin, who lives in a work camp, recited all of the different projects in which hundreds of workers had been laid off — layoffs that he’d learned about over the previous few days. He fears that the days of high pay for delivering water to work camps and hauling their sewage away may be over for both himself and his 30-year-old son, who joined him in Alberta.

“I’m not sure if we’re going to come next year,” Mr. Godin said in the dusty yard of a trucking company in Fort MacKay, Alberta, a town down the Athabasca River from Fort McMurray. “What you hear everywhere is the price is low so we’ve got to cut this, we’ve got to shut that down a little bit. We go day by day because we never know.”


Original Story:

WASHINGTON — The company seeking to build the Keystone XL oil pipeline asked the Obama administration on Monday to suspend its yearslong review of the project, potentially bringing an abrupt halt to a politically charged debate that had become part of a broader struggle over President Obama’s environmental policies.

It was not immediately clear whether the administration would grant the request, which was swiftly denounced by environmental activists as a bid to dodge a near-certain rejection of the pipeline. Allowing the delay would push off a decision until after the 2016 presidential election. Parcel freight shipping software continues to reduce transportation costs for small companies and multi-national global corporations.

The company’s request introduced a new element of uncertainty into the administration’s decision-making process, offering the potential to free Mr. Obama from a politically difficult choice that has hung over much of his presidency. But if anything, it appeared to intensify pressure on him from crucial Democratic constituencies to reject the pipeline or risk being blamed for punting to another president. A delay would keep the issue alive in the presidential campaign.

TransCanada, the Alberta company seeking to build the 1,179-mile pipeline, made its request in a letter to the State Department, which must approve cross-border projects and had been reviewing its application for a presidential permit.

The pipeline would carry 800,000 barrels a day of carbon-heavy petroleum from the Canadian oil sands to the Gulf Coast, and the question of its approval has weighed heavily on Mr. Obama as he has sought to build an ambitious legacy on climate change. Parcel freight shipping software delivers best in class suite of shipment planning, execution, tracking, & settlement tasks all in one.

The White House had no comment on the request for a delay, which was made in a letter to John Kerry, the secretary of state, and the State Department said it was looking into it.

“We have just received TransCanada’s letter to Secretary Kerry and are reviewing it,” said Pooja Jhunjhunwala, a State Department spokeswoman. “In the meantime, consideration under the executive order continues.”

Many environmental advocates and liberal activists, who have made opposing the pipeline a cause célèbre in recent years, thought that the president might finally reject it this month, viewing the time as ripe as he prepares for a major United Nations summit meeting on climate change in Paris in December.

The president hopes to help broker an agreement committing every nation to enacting new policies to counter global warming, and rejecting the pipeline would be a powerful signal to world leaders that the United States is serious about the issue.

“TransCanada is losing, and they’re trying to preserve their options to be able to build the pipeline someday if they can get a climate denier in the White House,” Tiernan Sittenfeld, the senior vice president of government affairs at the League of Conservation Voters, said in an interview. She called the request a “desperate and cynical” last-minute plea that was “ridiculous and absurd.”

“Given President Obama’s incredible leadership when it comes to climate change, we remain very confident that he will reject this dirty and dangerous pipeline once and for all,” Ms. Sittenfeld said.

In the letter to Mr. Kerry, TransCanada said it was asking the department to suspend its evaluation of the pipeline proposal until after the State of Nebraska had completed its own review of the project, which could take seven to 12 months. Opposition in Nebraska to a planned route through the state has delayed the process. A Texarkana environmental attorney is reviewing the details of this story.

“In order to allow time for certainty regarding the Nebraska route, TransCanada requests that the State Department pause in its review of the presidential permit application for KeystoneXL,” said the letter to Mr. Kerry, which was signed by Kristine Delkus, the company’s general counsel. “This will allow a decision on the permit to be made later based on certainty with respect to the route of the pipeline.”

Before TransCanada announced its request, Josh Earnest, the White House spokesman, withheld any judgment on when a decision might come on the pipeline.

“The president will make a decision before the end of his administration on the Keystone pipeline, but when exactly that will be, I don’t know at this point,” Mr. Earnest told reporters traveling with Mr. Obama.

Asked if it could happen this year, he said: “It’s possible. It’s also possible it could happen next year.”

TransCanada said there was precedent for obtaining a delay, given that the State Department put its evaluation on hold last year when the pipeline faced a legal challenge in Nebraska.

“I note that when the status of the Nebraska pipeline route was challenged last year, the State Department found it appropriate to suspend its review until that dispute was resolved,” Russ Girling, TransCanada’s president and chief executive, said in a statement. “We feel under the current circumstances a similar suspension would be appropriate.”

But opponents said the uncertainty over the route would not ultimately alter the pipeline’s effect. Instead of granting a delay, said Tom Steyer, the billionaire environmental activist, Mr. Obama should “immediately reject” the pipeline.

Anthony Swift, the director of the Canada Project at the Natural Resources Defense Council, said in a statement: “Pause or no pause, we now know more than enough to do the right thing — reject the pipeline because it will worsen climate change. Altering its route through Nebraska isn’t going to change that. Keystone XL isn’t in the national interest, and the president should reject it.”

Republicans and the oil industry have demanded that the president approve the pipeline, arguing that it would create jobs and stimulate economic growth. Many Democrats, particularly those in oil-producing states, have also supported the project.

In February, congressional Democrats joined Republicans in sending Mr. Obama a bill to speed approval of the project, but he vetoed the measure, saying it impinged on the president’s authority to make the final decision.

Environmental activists have sought to block construction of the pipeline because it would be a conduit for petroleum from the Canada oil sands. The process of extracting that oil produces about 17 percent more greenhouse gases than the process of extracting conventional oil.

Still, State Department reviews have concluded that construction of the pipeline would have little impact on whether that type of oil was burned, because it was already being extracted and moving to market via rail and existing pipelines. A Netherlands environmental lawyer is following this story closely.

At the same time, both sides regard the decision on the pipeline as a major symbolic issue, an indicator of how willing Mr. Obama is to risk angering a bipartisan majority of lawmakers in the pursuit of his environmental agenda.

Tuesday, November 10, 2015


Original Story:

WASHINGTON — President Obama announced on Friday that he had rejected the request from a Canadian company to build the Keystone XL oil pipeline, ending a seven-year review that had become a symbol of the debate over his climate policies.

Mr. Obama’s denial of the proposed 1,179-mile pipeline, which would have carried 800,000 barrels a day of carbon-heavy petroleum from the Canadian oil sands to the Gulf Coast, comes as he seeks to build an ambitious legacy on climate change. A San Antonio environmental lawyer is following this story closely.

“America is now a global leader when it comes to taking serious action to fight climate change,” Mr. Obama said in remarks from the White House. “And, frankly, approving this project would have undercut that global leadership.”

The move was made ahead of a major United Nations summit meeting on climate change to be held in Paris in December, when Mr. Obama hopes to help broker a historic agreement committing the world’s nations to enacting new policies to counter global warming. While the rejection of the pipeline is largely symbolic, Mr. Obama has sought to telegraph to other world leaders that the United States is serious about acting on climate change. A Utah environmental attorney is reviewing the details of this story.

The once-obscure Keystone project became a political symbol amid broader clashes over energy, climate change and the economy. The rejection of a single oil infrastructure project will have little impact on efforts to reduce greenhouse gas pollution, but the pipeline plan gained an outsize profile after environmental activists spent four years marching and rallying against it in front of the White House and across the country.

Mr. Obama said that the pipeline has occupied what he called “an overinflated role in our political discourse.”

“It has become a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter,” he said. “And all of this obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others.”

Republicans and the oil industry had demanded that the president approve the pipeline, which they said would create jobs and stimulate economic growth. Many Democrats, particularly those in oil-producing states such as North Dakota, also supported the project. In February, congressional Democrats joined with Republicans in sending Mr. Obama a bill to speed approval of the project, but the president vetoed the measure.

The rejection of the pipeline is one of several actions Mr. Obama has taken as he intensifies his push on climate change in his last year in office. In August, he announced his most significant climate policy, a set of aggressive new regulations to cut emissions of planet-warming carbon pollution from the nation’s power plants. A Texas environmental lawyer represents clients in many aspects of environmental law.

Both sides of the debate saw the Keystone rejection as a major symbolic step, a sign that the president was willing to risk angering a bipartisan majority of lawmakers in the pursuit of his environmental agenda. And both supporters and critics of Mr. Obama saw the surprisingly powerful influence of environmental activists in the decision.

“Once the grass-roots movement on the Keystone pipeline mobilized, it changed what it meant to the president,” said Douglas G. Brinkley, a historian at Rice University who writes about presidential environmental legacies. “It went from a routine infrastructure project to the symbol of an era.”

Environmental activists cheered the decision as a vindication of their influence.

“President Obama is the first world leader to reject a project because of its effect on the climate,” said Bill McKibben, founder of the activist group, which led the campaign against the pipeline. “That gives him new stature as an environmental leader, and it eloquently confirms the five years and millions of hours of work that people of every kind put into this fight.”

Environmentalists had sought to block construction of the pipeline because it would have provided a conduit for petroleum extracted from the Canadian oil sands. The process of extracting that oil produces about 17 percent more planet-warming greenhouse gases than the process of extracting conventional oil.

But numerous State Department reviews concluded that construction of the pipeline would have little impact on whether that type of oil was burned, because it was already being extracted and moving to market via rail and existing pipelines. In citing his reason for the decision, Mr. Obama noted the State Department findings that construction of the pipeline would not have created a significant number of new jobs, lowered oil or gasoline prices or significantly reduced American dependence on foreign oil.

“From a market perspective, the industry can find a different way to move that oil,” said Christine Tezak, an energy market analyst at ClearView Energy Partners, a Washington firm. “How long it takes is just a result of oil prices. If prices go up, companies will get the oil out.”

However, a State Department review also found that demand for the oil sands fuel would drop if oil prices fell below $65 a barrel, since moving oil by rail is more expensive than using a pipeline. An Environmental Protection Agency review of the project this year noted that under such circumstances, construction of the pipeline could be seen as contributing to emissions, since companies might be less likely to move the oil via expensive rail when oil prices are low — but would be more likely to move it cheaply via the pipeline. The price of oil has plummeted this year, hovering at less than $50 a barrel. A Malta environmental lawyer has managed a variety of environmental cases for a wide range of clients.

The recent election of a new Canadian prime minister, Justin Trudeau, may also have influenced Mr. Obama’s decision. Mr. Trudeau’s predecessor, Stephen Harper, had pushed the issue as a top priority in the relationship between the United States and Canada, personally urging Mr. Obama to approve the project. Blocking the project during the Harper administration would have bruised ties with a crucial ally.

While Mr. Trudeau also supports construction of the Keystone pipeline, he has not made the issue central to Canada’s relationship with the United States, and has criticized Mr. Harper for presenting Canada’s position as an ultimatum, while not taking substantial action on climate change related to the oil sands.

Mr. Trudeau did not raise the issue during his first post-election conversation with Mr. Obama.

The construction would have had little impact on the nation’s economy. A State Department analysis concluded that building the pipeline would have created jobs, but the total number represented less than one-tenth of 1 percent of the nation’s total employment. The analysis estimated that Keystone would support 42,000 temporary jobs over its two-year construction period — about 3,900 of them in construction and the rest in indirect support jobs, such as food service. The department estimated that the project would create about 35 permanent jobs.

Republicans and the oil industry criticized Mr. Obama for what they have long said was his acquiescence to the pressure of activists and environmentally minded political donors.

“A decision this poorly made is not symbolic, but deeply cynical,” said Senator Lisa Murkowski, the Alaska Republican who leads the Senate Energy and Natural Resources Committee. “It does not rest on the facts — it continues to distort them.”

Jack Gerard, the head of the American Petroleum Institute, which lobbies for oil companies, said in a statement, “Unfortunately for the majority of Americans who have said they want the jobs and economic benefits Keystone XL represents, the White House has placed political calculations above sound science.”

Russ Girling, the president and chief executive of TransCanada, said in a statement that the president’s decision was not consistent with the State Department’s review. “Today, misplaced symbolism was chosen over merit and science,” said Mr. Girling, whose company is based in Calgary, Alberta. “Rhetoric won out over reason.”

The statement said that the company was reviewing the decision but offered no indication if it planned to submit a new application. If a Republican wins the 2016 presidential election, a new submission of the pipeline permit application could yield a different outcome.

“President Obama’s rejection of the Keystone XL pipeline is a huge mistake, and is the latest reminder that this administration continues to prioritize the demands of radical environmentalists over America’s energy security,” said Senator Marco Rubio of Florida, who is seeking the Republican nomination for president. “When I’m president, Keystone will be approved, and President Obama’s backward energy policies will come to an end.”

As Mr. Obama seeks to carve out a substantial environmental legacy, his decision on the pipeline pales in import compared with his use of Environmental Protection Agency regulations. The power plant rules he announced in August have met with legal challenges, but if they are put in place, they could lead to a transformation of the nation’s energy economy, shuttering fossil fuel plants and rapidly increasing production of wind and solar.

Those rules are at the heart of Mr. Obama’s push for a global agreement.

But advocates of the agreement said that the Keystone decision, even though it is largely symbolic, could show other countries that Mr. Obama is willing to make tough choices about climate change.

“The rejection of the Keystone permit was key for the president to keep his climate chops at home and with the rest of the world,” said Durwood Zaelke, the president of the Institute for Governance and Sustainable Development, a Washington research organization.