Archive for the ‘Natural Gas’ Category

Prosecutors to PG&E: We Are Not Amused

via Wikimedia

via Wikimedia

Back in 2010 a Pacific Gas &Electric gas pipeline exploded in San Bruno, California. The blast killed eight people, injured 66 and turned several blocks of the suburb just south of San Francisco into what looked like Baghdad after the shock-and-awe campaign. The disaster ignited a brief flurry of interest in pipeline safety but the national attention soon drifted on to other matters. San Bruno city officials, however, have kept the heat on the utility which provides gas and electricity to most of  Northern California.

On July 29 a bevy of prosecutors, including the U.S. Attorney, the California Attorney General, the San Mateo County DA, and the FBI announced an indictment charging PG&E with obstructing a National Transportation Safety Board investigation into the blast as well as knowingly and willfully violating the Natural Gas Pipeline Safety Act. According to the indictment, the utility provided the National Transportation Safety Board with a copy of its draft policy regarding pipeline threats, then withdrew it and replaced it with another policy claiming the first was a draft released in error. In fact, the indictment alleges, PG&E had been operating under the purportedly unapproved draft for years, meaning it did not properly assess the risks to pipelines running through urban and residential areas. According to the indictment, the utility ignored or failed to investigate threats to its gas pipelines, kept inaccurate and incomplete records, did not investigate the seriousness of threats to pipelines when they were identified, and failed to assess the threats posed by over-pressurized pipelines.

All in all it’s not a pretty bill of goods, and San Bruno is spitting mad. And the city’s anger isn’t just directed at PG&E. According to city officials, PG&E essentially colluded with state regulators. The mayor is accusing the  chairman the California Public Utilities Commission of receiving “confidential, non-public information from PG&E regarding its internal deliberations and financial conditions outside of the CPUC public hearing process” and demanded his immediate removal from proceedings related to the blast. The city accuses PUC and PG&E officials of being in regular email contact despite commission rules forbidding private conversations between parties to official actions and regulators.

Pipeline safety generally has an enforcement problem. Congress has consistently starved the Pipeline and Hazardous Materials Administration of adequate funding. According to Rep. Jackie Speier whose district includes San Bruno, “The industry has a lock on PHMSA. It has a lock on Congress. And the public’s interest gets dramatically watered down.” In fact, the head of the PHMSA, Jeffrey Wiese, offered up an unusually frank confession about the state of his agency in a speech last fall. According to Wiese, the regulatory process is “kind of dying.”

Perhaps the grand jury that returned the indictment against PG&E can stave off the demise.

No Good Deed Goes Unpunished

Via WikiMedia Commons

Via WikiMedia Commons

Rumor has it that North America may be energy independent within a few years.

Alternative energy sources like wind, solar, and biomass are contributing ever greater amounts to the nation’s energy bank. And the country’s traditional oil and gas industry is booming as it hasn’t in decades. Where the U.S. had become an energy mendicant, relying on unstable (and occasionally unsavory) sources overseas, the country is set to be a net energy exporter and will soon overtake Saudi Arabia as the globe’s top oil producer. Energy independence is a good thing. Weaning ourselves from middle Eastern oil reserves will bring market stability and reduce the temptation to secure our oil and gas supplies by force of arms.

But supplying the bulk of our own energy needs domestically presents challenges of its own.  Wind and solar electricity has to make its way from place where it is generated to consumers who might be thousands of miles away. The national grid is being upgraded but is not yet up to that task. Moving all the new oil and gas that’s flowing out of the various bonanzas around the country presents a whole separate category of problems. Quite aside from the environmental toll presented by hell-for-leather production in, say North Dakota or Alberta, just moving the stuff around the country safely and efficiently is a herculean task.

We generally think of oil and gas as flowing through pipelines. The Keystone Pipeline, which would bring tar sand oil from Alberta is a political flash point. Lots of people are questioning its safety, and for good reason. Exxon’s burst pipeline in Arkansas  and PG&E’s fiery pipeline failure in San Bruno are still fresh in the public mind.

But pipelines are not the only way oil gets around the country. Increasingly, it’s making its way to market by rail. And that’s proving to be a bit of a train wreck in its own right. Last month, the town of Casselton, ND had to be evacuated after a mile-long train carrying crude oil slammed into another train, resulting in thunderous explosions and a searing plume of toxic smoke. ABC tells us that this was the third accident in six months involving trains carrying North Dakota crude oil. In July, a train of 72 carloads of crude oil in Quebec derailed and burst into flames, killing  almost 50 people.

Coal, too, is being increasingly transported by train in the face of growing opposition.

It’s naive to think we don’t need the energy we’re pulling out of the ground with such new-found vigor. It’s also naive to think we could stop it being distributed around the country. But we shouldn’t think that energy independence is an unalloyed good. It presents a whole slew of problems of its own.

Do We Have Your Attention Now?

via WikiMedia Commons

via WikiMedia Commons

Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully. – Samuel Johnson

Nobody ever said it would be easy. There’s lots of natural gas in the ground. We’ve been siphoning it up from the ground for years. But supplies dwindled as traditional fields yielded less and less gas. Fracking has brought a new production bonanza to states around the Union. Inevitably, protests have come hand in hand with increased production. This summer has been dubbed #FearlessSummer by environmentalists opposed to the extraction and carbon energy industries.

Fracking is dirty work. It can pollute ground water, endangering wells and agricultural water, and it produces a tremendous amount of waste. The byproduct of fracking is a wicked stew of proprietary chemicals and water used to force natural gas out of its ancient hiding places underground.

One of the sources of particular ire in the environmental circles is the seeming impunity with which energy companies have been able to pursue natural gas over hill and under dale. The companies rely on eminent domain to site their drilling rigs, and have been largely shielded from liability for environmental damage they have caused while feeding the country’s unquenchable demand for energy.

XTO Energy, a subsidiary of ExxonMobil settled with the Environmental Protection Agency over a 50 thousand gallon spill of fracking slurry at one of its storage tanks in Pennsylvania. Without admitting liability, it agreed to pay a $100,000 fine and implement a more rigorous waste water management regime. It also hauled away some 3,000 tons of contaminated soil.

All well and good as far as the Feds and XTO were concerned. Environmentalists,  not so much. Also not so pleased – the Pennsylvania state Attorney General. Last Tuesday, Attorney General Kathleen Kane filed criminal charges against XTO over the 2010 spill. Not civil. Criminal. That’s a first. No other Marcellus Shale production company has ever faced criminal charges.

Environmentalists are giddy over the prosecution, comparing it to the genteel supervision the company has received from state regulators. Energy industry representatives went ballistic, as well they might, accusing Kane of doing some polluting of her own – of the business environment – and sending a “chilling message” to the energy business.

But Kane’s office insists it wasn’t going off half-cocked. “The prosecutorial powers of this office are used carefully and with great consideration,” First Deputy Attorney General Adrian R. King Jr. said through a spokeswoman. “We closely examine the facts and the applicable law in each case and proceed accordingly.” And Kane’s office didn’t arrive at the charges by itself. It was a grand jury that handed down the charges.

Settlements like the one XTO reached with federal regulators are just a cost of doing business for an enormous company like ExxonMobil. Criminal charges, on the other hand, take the risk/benefit calculation to a whole new level. The Pennsylvania charges have ignited a furor and are sure to be fought by an industry red in tooth and claw. But as the good doctor observed to his friend Boswell, the gallows sharpens the mind. The prospect of standing in the dock is likely to do the same for the captains of the energy industry.

 

 

New DOE Secretary Moniz’s Big Ideas

Photo by jeanbaptisteparis. Some rights reserved.

Photo by jeanbaptisteparis. Some rights reserved.

New Energy Secretary Ernest Moniz was just sworn in yesterday, but he’s already got big plans (and big hair!) for the future of energy in the U.S. Moniz, nuclear physicist and former head of MIT’s Energy Initiative, vowed in his first speech to move a big time, bi-partisan energy efficiency bill through Congress, and also to take a closer look at the merits of exporting natural gas and expanding into untapped markets. A DOE study from last year showed that the latter could prove quite helpful to the U.S. in the long-term global energy market.

“I want to… make sure that we are using up-to-date data and then we want to go forward on a case-by-case basis… in terms of evaluating licenses in as expeditious a way consistent with that review process,” said Moniz this week. He also said that he has no plans to commission new studies of natural gas exports until he has had time to review “personally” all of the existing studies. Moniz was voted into his new position by a unanimous Senate vote of 97-0 earlier this month after a nomination from the President in March.

Watch Moniz’s speech from the 2013 Energy Efficiency Global Forum here.

Salazar Departs Interior, Remembered for Advancing Renewables

Photo by Bob Johnson, USFWS Mountain Prairie, some rights reserved.

Photo by Bob Johnson, USFWS Mountain Prairie, some rights reserved.

One of the stars of the Green Mien since its inception has been Ken Salazar, Obama’s Secretary of the Interior, who announced he would be leaving Washington to return to his home in Colorado in March. He focused Interior on renewable energy and reorganized the formerly scandal-ridden agency into three agencies with clear and separate functions. We have written about his hand in the Extractive Industries Transparency Initiative, in developing oil drilling plans in Alaska, in offshore oil and gas oversight, and much more.

The White House has given no indication as to who might succeed him, and combined with the departure of EPA’s administrator Lisa Jackson and DOE’s Steven Chu, continuity of the Obama Administration’s policies toward energy development and climate change is in question. As these vacancies are filled, expect to read about expectations for the new administrators’ goals and policies here.

Salazar has broadened the scope of Interior’s activities from its traditional focus on mining, forestry, and oil and gas development to an emphasis on renewable energy. Since 2009, the department has authorized 34 solar, wind, and geothermal energy projects, settled a 15-year legal battle with American Indian tribes, and established seven new national parks. His handling of contentious oil and gas issues, like the Deepwater Horizon spill and allowing Shell begin exploration for oil in the Arctic, drew the most headlines.

President Obama once rebuked the famously blunt former lawyer for using cowboy language. “We have our boot on their neck to make sure they got the job done,” Salazar explained, referring to Interior’s oversight of BP officials in the Deepwater Horizon spill cleanup. Hopefully we’ll be able to find another character to replace him.

Lighting the Fires of Commerce

On Wednesday, the Energy Department released a report conducted by NERA Economic Consulting regarding a move to increase U.S. natural gas exports and the possible effects on the domestic natural gas market.  Among the report’s key findings: “This report contains an analysis of the impact of exports of LNG on the U.S. economy under a wide range of different assumptions about levels of exports, global market conditions, and the cost of producing natural gas in the U.S… Across all these scenarios, the U.S. was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased.”  The potential economic benefits may soon result in some movement by the President, as Reuters noted, “The Obama administration has wrestled with how to manage the nation’s newfound shale gas for more than a year, putting export project approvals on hold pending the release of the economic report.”

The documents made available include: the U.S. Energy Information Administration’s analysis “Effect of Increased Natural Gas Exports on Domestic Energy Markets” as well as NERA’s study “Macroeconomic Impacts of LNG Exports from the United States” and a summary list of pending LNG export applications. The DOE is inviting the public to provide comment on the study.

Methane in Boston

Photo by Paul Keleher. Some rights reserved.

In the arena of energy, America has cemented itself as solidly pro-natural gas, with politicians and corporations alike hailing it as a safe, climate friendly alternative to coal while we search for even greener, friendlier alternatives. As of 2012, 65 million American households use natural gas (which is made up of methane mixed with carbon dioxide, nitrogen, and hydrogen). However, it has been pointed out in the past that natural gas may not be as environmentally friendly as suggested by its proponents, as the significant amounts of methane that leak from the gas wells and pipelines is enough to offset the benefits of avoiding dirty coal. Methane, as we all know by now, is a greenhouse gas with deadly implications for global warming (ProPublica discovered in 2011 that “Methane levels from the hydraulic fracturing of shale gas were 9,000 times higher than previously reported”).

The New York Times brought the issue to light yet again today, with a report on methane leaks in the Boston area. Led by Boston University professor Nathan Phillips, a research time recently discovered that Boston, along with other older U.S. cities of the northeast, has an unusually high level of methane leaks due to archaic (some over a century old) low-pressure pipelines beneath the city that are “riddled with leaks.” This loose methane gets into the air and can kill trees and vegetation, cause natural gas explosions, and of course, contribute to the ozone layer that accelerates global warming.

Unfortunately, repairing these pipelines is very expensive – $1 million per mile expensive. With the data Phillips and his team have uncovered, however, it appears that it would be in the city of Boston’s best interest to demand a new set of pipes.

%d bloggers like this: