CANADA’S OIL PRODUCERS BRACE FOR LATEST TEST: HIGHER CARBON TAXES

Original Story: wsj.com

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.

KEYSTONE ROUTE RULING SHOULD BE OVERTURNED, NEBRASKA SAYS

Original Story: Bloomberg News



A court challenge holding up TransCanada Corp. (TRP)’s Keystone XL pipeline should be dismissed, Nebraska’s governor said, urging his state’s high court to allow the project to move forward.
The case is delaying the Obama administration’s review of the project, the president said April 18. Nebraska Governor Dave Heineman yesterday asked the state’s top court to throw out a trial judge’s ruling that the route for the pipeline was approved without proper authority. The court may not hear the case until at least September and may not rule until after mid-presidential term congressional elections in November.A Tulsa Oil and Gas Lawyer said he has had not had a case quite like this before.
TransCanada is awaiting a U.S. permit to build the northern leg of Keystone XL, which would supply U.S. Gulf Coast refineries with crude from Alberta’s oil sands. Because it crosses an international boundary, the proposal requires U.S. State Department approval.
Based in Calgary, TransCanada is seeking to build the 830,000 barrel-a-day, 1,179-mile (1,897-kilometer) conduit running from Hardisty, Alberta, to Steele City, Nebraska, where it would connect to an existing network.
Backers of the project say it will create jobs. Opponents have countered it will contribute to global warming. If the Nebraska Supreme Court upholds the trial outcome, Keystone will need to apply to the state’s Public Service Commission for approval. Under law the commission has seven months to review such applications.
Judge’s Ruling
Judge Stephanie Stacy in Lincoln ruled on Feb. 19 that legislation enabling Heineman and TransCanada to bypass the commission when planning the pipeline route violated the state’s constitution.
Stacy erred in allowing a challenge by three property owners to move forward because they hadn’t shown they had been injured as taxpayers by the state’s plan, Heineman, a Republican, said in a filing yesterday with the supreme court.
State Attorney General Jon Bruning, a Republican running to succeed Heineman as governor, argued in the filing that the trial judge set too low a threshold for taxpayers to bring court challenges to state legislation.
Bruning also argued the not all crude oil pipelines qualified as “common carriers” falling under the exclusive jurisdiction of the Public Service Commission.
U.S. Senate
David Domina, a lawyer for the landowners, is seeking the Democratic Party nomination to run for U.S. Senate in the state, where he would follow Republican Mike Johanns, who is retiring after a single term.
Domina didn’t immediately reply to an e-mail seeking comment on the governor’s arguments yesterday’s filing. A San Antonio Oil and Gas Lawyer would not comment on the case.
He argued in the trial court that the challenged legislation, which took effect in 2012, improperly divested the constitutionally-created Public Service Commission of jurisdiction over pipeline routing, placing it with the governor and the Nebraska Department of Environmental Quality.
Stacy rejected the state’s contention that pipeline routing was outside the PSC’s purview.
In her Feb. 19 decision, Stacy agreed with the landowners that the shift in authority effected by the legislation was improper.
“The court finds there is no set of circumstances under which such provisions could be constitutional,” she said. Addressing the state’s argument that its outlay of funds under the law, later recouped when TransCanada paid it $5.15 million, didn’t deprive the three plaintiffs of standing to sue.
“While private reimbursement of public expenditures may be good fiscal policy, it should not be used as a legislative tool to insulate allegedly unconstitutional laws from taxpayer challenge,” she said.
The case is Thompson v. Heineman, S-14-000158, Nebraska Supreme Court (Lincoln).

Keystone Pipeline: Opposing View-Points

Story first appeared in USA Today -

Build Keystone Pipeline: Our View

More than four years of exhaustive study is enough. Stop the foot-dragging.

Many controversial issues lend themselves to split-the-difference compromises, but the Keystone XL pipeline isn't one of them. That puts President Obama in a tough spot as his administration nears a decision on the proposed $7 billion project, which would carry tar-sand oil from Canada to Gulf Coast refineries.

For the environmentalists who strongly supported Obama's re-election, Keystone has become a crucial test of his promises to take climate change seriously. Thousands demonstrated in Washington on Sunday against the project, asserting that the pipeline would unlock so much dirty oil that it would be "game over" for the globe if the project proceeds.

For Canada, whose government badly wants the pipeline to go forward, the decision is an equally crucial test of the two neighbors' relationship. And for the United States, the project offers a rare opportunity to create jobs and lessen the nation's decades-long dependence on oil from unstable or unfriendly suppliers.

Both sides make strong arguments, but after more than four years of exhaustive study, the right answer on Keystone remains: Build it.

At a time of rising global competition for energy resources, the pipeline would bring reliable new oil supplies to a U.S. that still imports 40% of its crude, 7.6 million barrels a day last year. And 40% of those imports come from OPEC nations such as Venezuela, Iraq and Nigeria. Keystone is expected to supply 830,000 million barrels a day, a key step toward the long-sought goal of North American energy independence, which suddenly seems attainable.

Much of the opposition to Keystone has come from critics who say running a big pipeline through the heart of the USA is too risky. Haven't they noticed that tens of thousands of miles of oil pipelines already crisscross the United States? As long as the nation's quarter-billion vehicles rely almost exclusively on gasoline and diesel, pipelines are the safest and most efficient way to move it.

Obama delayed a final decision on Keystone last year, in part to allow a rerouting around environmentally sensitive areas in Nebraska. That has been accomplished, and Nebraska's governor signed off on the new map last month.

Nor would blocking Keystone keep the tar-sands oil in the ground. In a world starving for oil, it's overwhelmingly likely the oil would find another way to market — through a pipeline to West Coast ports to carry it to China, to East Coast ports to carry it to other nations, or by barge, rail and existing pipelines into the USA.

The goal of locking down tar-sands oil and stopping other forms of fossil fuel production such as fracking — as many protesters demanded in Sunday's demonstration — would be more compelling if the U.S. were ready to shift to renewable fuels such as solar, wind and biomass to power vehicles, heat homes and run factories. Last year, though, renewables supplied just 9.4% of all U.S. energy needs, despite robust tax incentives for wind power and electric cars. Shutting down conventional sources of energy at this point is naive and economically destructive.

Demand might be further reduced by making vehicles and buildings more efficient. A carbon tax or a cap-and-trade system could do the same by making the price of conventional fuels better reflect their cost to the environment.

Until that day, though, the best choice for the economy and the planet is to ensure ample, secure supplies of energy. The Keystone pipeline is an essential part of that strategy.

            ---------------------------------------------------------------------------------------

Pipeline Project Defines Folly: Opposing View

Keystone will prolong our addiction to fossil fuels and damage the climate.

A year ago, President Obama sent the Keystone pipeline project back for more review. In the months since, Mother Nature filed compelling public testimony:

• The hottest year in American history.
• An epic drought that drove up the price of food worldwide.
• Superstorm Sandy, with the lowest barometric pressure ever recorded north of Cape Hatteras.
• An Arctic melt so intense that NASA scientists said we faced a "planetary emergency."

Those abrupt and extreme changes in the planet's patterns demonstrate the stupidity of prolonging our addiction to fossil fuel, which is exactly what Keystone will do.

By providing a new and easy way to access the "dirtiest oil on earth," the pipeline will drive the expansion of tar-sands production. It is the definition of folly.

Its proponents have always claimed it will create lots of jobs (it will create some, for a couple of years, which is nothing to sneeze at — but the real jobs bonanza comes when we move decisively toward renewable energy) or boost energy independence (which is nonsense — this oil is destined for export). By easing the glut of Canadian oil, even its backers concede, it will raise, not lower, gas prices.

But the biggest argument for Keystone has always been: If we don't take the oil, someone else will. The oil barons boasted a year ago that they would build a pipeline to the Pacific instead — but people across Canada have risen up to block that plan, which is now all but dead.

That same kind of movement has arisen in the United States, where Keystone has become the first environmental issue in a generation to bring Americans into the streets and jails.

Sunday, on the National Mall in Washington, D.C., the largest climate rally in U.S. history took direct aim at the pipeline. As the Rev. Lennox Yearwood said, "This is our lunch-counter moment for the 21st century," when activism can help decide the future.

And should President Obama reject the pipeline, he'd be the first world leader to block a big infrastructure project because of the damage to the climate.

That's a legacy — the only one people will care about in the decades ahead.

Protesters rally in D.C. against climate change

Story first appeared on Philly.com -

More than 500 people from the region joined thousands of protesters Sunday in Washington, calling for strong action on climate change and a stop to the Keystone XL pipeline.

The pipeline would transport oil from Canada to the Gulf Coast. Opponents say it would worsen climate change by encouraging further development of the tar-sands oil resource.

They spent several hours in the bitter cold and a strong wind cheering, waving signs, listening to speakers, and marching around the White House, although President Obama was in Florida for a golf game.

Many - from experienced hands who have been at this for years, to middle-school students excited to be at their first big rally - consider climate change the defining issue of their time.

"Twenty-five years from now, nobody is going to look back at our era and say, 'Boy, I wonder how that fiscal cliff thing came out,' " said Bill McKibben, founder of 350.org, an environmental group fighting climate change and one of the sponsors of the rally.

"Everyone is going to look back and say, 'Well, the Arctic melted, and then what did you do?' "

The rally came after a week of climate-change developments.

In his State of the Union address Tuesday, Obama said: "For the sake of our children and our future, we must do more to combat climate change." He added, "If Congress won't act soon to protect future generations, I will."

On Wednesday, as a precursor to Sunday's rally, nearly 50 activists, including Philadelphian Eileen Flanagan, were arrested in an act of civil disobedience outside the White House.

The next day, the Government Accountability Office added the financial liability of climate change to its list of "high-risk" areas for the U.S. government, and two senators introduced climate-change legislation that would impose a fee on carbon emissions.

The Sierra Club, Clean Air Council, Earth Quaker Action Team, Citizens for Pennsylvania's Future, and other groups organized bus transportation from this region.

After adding yet another bus Saturday - Sierra Club organizer William Kramer said he was getting phone calls and e-mails up to the end - 11 buses with more than 500 people on board headed out from King of Prussia, Quakertown, Devon, West Chester, and Philadelphia. Several more left from central New Jersey.

For Jean Mollack, 58, a laid-off worker from Doylestown, it was one more in a series of Washington rallies that began with a Vietnam War protest in 1971. "I think we're ruining the world with our dependence on fossil fuels," she said.

If Mollack was an old hand, Grace DiGiovanni, 12, who goes to Green Street Friends School in Philadelphia, was one of the newbies. She said that attending the rally was all about her future. "This is for my generation of kids."

Groups from schools and houses of worship joined the buses. Organizers estimated the crowd at 35,000.

Joy Bergey, 57, a policy director for the environmental group Citizens United for Pennsylvania's Future, brought eight youths from Chestnut Hill United Church, where she's a longtime member.

They included Sarah Noonan-Ngwane, 16, who said environmental issues "should be at the core of what happens over the next four years."

And Monica Guess, 17, who said that if the Keystone pipeline got built, "it changes our whole future."

For Bergey herself, the rally was the continuation of a battle she began in 1979, when she had her first argument with someone who said climate change wasn't happening.

"I will not stop fighting," she said. "I want there to be a livable planet for all God's creatures."

Nancy Grossman, 53, a pharmacist who lives in Jackson, N.J., was worried about climate change even before she saw the destruction that Hurricane Sandy left along the coast.

"It's one disaster after another," she said. "I don't know what other proof people are looking for."

Albert Accoe, 62, a security consultant from West Philadelphia, said he was attending "for my children and grandchildren."

Liz Robinson, 63, who heads the Energy Coordinating Agency in Philadelphia and attended with her entire family, said, "Everybody should be here. . . . It's very profitable to burn oil. Unless all of us stand against climate change, it'll be too late."