Energy Companies Are Divided Over A Plan To Scrap Methane-Emission Rules.
According to The Economist, “America’s largest source of methane emissions is oil and gas production. In the 20 years after it is released, the powerful greenhouse gas traps over
80 times more heat in the atmosphere than carbon dioxide does. Now the Trump administration is seeking to roll back regulations imposed in 2016 that seek to limit it. At the end of August the Environmental Protection Agency (EPA) proposed eliminating rules
covering both new and existing sources of methane emissions, and exempting companies from routine checks of their transportation and storage facilities for methane leaks. Oil and gas producers are divided in their reaction. Big producers with international
operations, such as BP, Royal Dutch Shell and ExxonMobil, want the regulations to remain. Small producers are cheering their removal. The matter is likely to end up in the courts. Some
lobbyists argue that the methane-emission rules are in fact redundant. Guidance introduced in 2012 on other smog-forming chemicals indirectly limited methane emission, too, at least from new sources of oil and gas. Erik Milito, a vice-president at American
Petroleum Institute, says that as old sources are depleted, ‘90% of all production will become regulated by 2023’. API, which represents more than 600 oil and gas companies, argues that the Obama-era rules directly covering methane are therefore not necessary.”
[The Economist,
9/9/19 (=)]
BP Unveils Measures To Battle Methane Leaks.
According to Reuters, “BP is introducing continuous monitoring of methane leaks at new oil and gas projects using drones and surveillance cameras, in a bid to cut emissions of the
potent greenhouse gas to near zero. The technology, which could encompass BP’s entire output within a decade or so, comes as the oil and gas industry faces mounting pressure from investors and activists to cut heat-trapping emissions to meet 2015 Paris Climate
Agreement goals. In what it said was an industry first, London-based BP said methane detecting and measurement technologies will be deployed at all its new projects globally to cut the volume of methane production it loses as emissions to below its current
target of 0.2%. Methane, the primary component of natural gas, leaks from oil and gas wells, pipelines and processing facilities. It has more than 80 times the heat-trapping potential of carbon dioxide in the first 20 years after it escapes into the atmosphere.
The oil and gas sector’s methane emissions reached 80 million tonnes in 2017, roughly 6% of the sector’s global greenhouse gas emissions, according to the International Energy Agency.” [Reuters,
9/10/19 (=)]
Fracking Buzzwords Evolve, From ‘Ramp Up’ To ‘Capital Discipline’.
According to the Wall Street Journal, “Shale executives are changing the words they use to talk up their prospects, in a linguistic evolution that broadly reflects the industry’s
efforts to shift from prioritizing growth to returning cash to increasingly disillusioned investors. The Wall Street Journal analyzed the transcripts of the earnings calls of 40 public U.S. shale companies—with technical help from financial research firm Sentieo
Inc.—and found that fracking’s buzzwords have changed significantly since 2015. Whereas top shale executives once frequently promised to ‘ramp up’ production, these days they are more likely to assure investors they can deliver ‘free cash flow.’ ‘Quantifying
what is said by management...shows where their current business priorities are: Can investors expect production growth, or will they finally see discipline,’ said Nick Mazing, head of research at Sentieo. Shale companies have helped the U.S. become the world’s
top oil producer, at more than 12 million barrels a day, by unlocking crude from dense rock formations using horizontal drilling and hydraulic fracturing. But many of the companies have yet to show they can deliver consistent returns or live within their means
as oil prices hover above $50 a barrel. As a result, shale stocks have reached historic lows, with many companies all but cut off from capital markets and some filing for bankruptcy protection.” [Wall Street Journal,
9/9/19 (=)]
More Than A Dozen Amendments On Tap For Drilling Bills.
According to E&E News, “House lawmakers will vote this week on more than a dozen amendments to three bills against expanded offshore and Arctic energy development. The legislation,
part of a broader effort by Democrats to stifle the administration’s energy dominance agenda, would roll back oil and gas exploration and development in the Arctic National Wildlife Refuge allowed under the 2017 tax law. The legislation would also block offshore
drilling in the Atlantic, Pacific outer continental shelf planning areas and permanently extend the current moratorium through 2022 on drilling in the eastern Gulf of Mexico. The Rules Committee last night reviewed more than 40 potential amendments. Among
those made in order for floor debate is one from eight Floridians to reinstate Obama-era rules imposing stricter safety standards to offshore drilling equipment in the wake of the 2010 Deepwater Horizon spill. The Trump administration relaxed the so-called
well control rule back in May (E&E News PM, May 2). ‘When most Americans think of the coast, they think of recreation, fishing and touring,’ said Rules Chairman Jim McGovern (D-Mass.). ‘But apparently the president thinks of only one thing: oil rigs.’ The
White House issued a statement yesterday suggesting a presidential veto of the three bills if Congress passes them, saying the legislation ‘undermines’ the administration’s efforts to create a ‘prosperous’ economy.” [E&E News,
9/10/19 (=)]
Natural Gas Facing Same Fate As Coal — Study.
According to E&E News, “It will be more expensive to operate 90% of proposed U.S. gas plants than to build ‘clean’ energy projects by 2035, according to a new report from a Colorado-based
nonprofit. The study from the Rocky Mountain Institute said that 2019 marks a ‘tipping point’ for clean energy portfolios (CEP) — a blend of renewables, battery storage and demand-side management — which are now cheaper than most proposed gas power plant projects.
The falling costs of wind, solar and storage will undercut the levelized costs of new gas generation, researchers said. ‘The reason that we call it a tipping point is because the costs of wind, solar and storage are going to continue to decrease substantially
and quickly,’ said Charles Teplin, a report author. ‘There is a risk that if people make investments in gas today ... those investments will not pay themselves off very well, and someone will be stuck holding the bag.’ If renewables and low-carbon energy alternatives
replace proposed gas plants, consumers could cumulatively save $29 billion over 20 years, the analysis found. The pivot would also reduce carbon dioxide emissions by 100 million tons per year, the report said. RMI analysts said that clean energy technologies
are poised to do to natural gas what that fuel has done to coal. The report pointed out that investments to build new natural gas-fired plants in the United States have declined annually since 2014.” [E&E News,
9/10/19 (=)]
Lack Of Snow Could Hamper ANWR Drilling.
According to E&E News, “Large areas of the Arctic National Wildlife Refuge’s coastal plain — which is soon to be auctioned for potential oil and gas drilling by the Trump administration
— may be difficult for oil companies to develop because there’s not enough snow covering the tundra to protect it from operations, according to researchers at the University of Alaska, Fairbanks. Development in the coastal plain has been held off for decades
by environmental groups and Democrats, despite strong Alaskan support for exploration. A Republican-led Congress bucked the blockade in 2017, with a rider tucked into the tax overhaul. It requires two oil and gas lease sales in ANWR’s coastal plain. The first
lease sale is expected by the year’s end (Energywire, Sept. 9). But the virgin territory that lies just east of Alaska’s aging behemoth oil play in Prudhoe Bay may hold unique challenges for industry, according to snow expert Matthew Sturm of the university’s
Geophysical Institute, the author of a recent report on snow coverage in the coastal plain. Last year, as much as 67% of the roughly 1.6 million acres that could be auctioned failed to meet a depth threshold of 10 inches of snow. Industry depends on snow in
the far north to carry out oil and gas operations. Its drilling season is bounded by winter because ice and snow are a required buffer to protect the tundra. Oil and gas firms construct ice roads to move equipment in a way that protects the tundra — something
they can’t do outside of the winter months.” [E&E News,
9/10/19 (=)]
White House Recommends Veto Of 3 Drilling Bills.
According to Politico, “The White House today threatened to veto three pieces of legislation on oil and gas drilling the House intends to consider this week. ‘Prohibiting energy development
in new Federal areas would hinder future administrations’ efforts to make up for revenue lost as production declines from leases in aging energy fields,’ the White House statement of administration policy states. ‘Such restrictions will tie the hands of future
administrations and reduce their ability to enhance energy security through strong domestic energy production and to ensure affordable energy for American families.’ H.R. 1146 (116) would restore a ban on drilling in the Arctic National Wildlife Refuge repealed
in the Republican tax law, H.R. 1 (115). The two other measures would permanently bar offshore oil and gas drilling in the Eastern Gulf of Mexico, H.R. 205 (116), and off the Atlantic and Pacific coasts, H.R. 1941 (116). All are expected to be voted on this
week in the House. WHAT’S NEXT: It’s unlikely the Senate will take up the bills.” [Politico,
9/9/19 (=)]
The Stakes Of Warren's Fracking Move.
According to Axios, “Sen. Elizabeth Warren is moving more aggressively to the left on energy as she battles Sen. Bernie Sanders for backing from progressives in the Democratic 2020
primary. Driving the news: On Friday afternoon, Warren tweeted that if elected, she would ban fracking ‘everywhere.’ That position was news to me and, based on my deeply scientific survey, it was news to plenty of activists and experts in the think tank and
academia orbit. The Washington Post’s tally of candidates views — which now lists her support for a ban — was updated Sep. 4 to adjust her position ‘after a clarification from her campaign.’ One big question: An obvious but important one is whether Warren’s
‘ban fracking’ position would be a political liability if she was in a general election matchup against Trump. The oil-and-gas industry is a big economic force in places including Pennsylvania and Colorado. But, but, but: This is hypothetical politics right
now. Warren can’t ban fracking ‘everywhere’ without Congress, which isn’t in the cards. Her campaign acknowledges that banning it would require legislation. Executive power is also limited by the concentration of the boom on state and private lands, although
environmental laws provide some federal leverage.” [Axios, 9/9/19
(=)]
Minnesota Oil Pipeline Fight Highlights Democratic Dilemmas.
According to the Associated Press, “A divisive fight over the future of a crude-oil pipeline across Minnesota is pinning presidential candidates between environmentalists and trade
unions in a 2020 battleground state, testing their campaign promises to ease away from fossil fuels. Progressive candidates Elizabeth Warren and Bernie Sanders have condemned a Canadian company’s plan to replace its old and deteriorating Line 3 pipeline, which
carries Canadian crude across the forests and wetlands of northern Minnesota and into northern Wisconsin. They’ve sided with environmental and tribal groups that have been trying to stop the project for years, arguing that the oil should stay in the ground.
Other candidates — including home-state Sen. Amy Klobuchar and front-runner Joe Biden — have remained largely silent, mindful that such projects are viewed as job creators for some of the working-class voters they may need to win the state next year. The fight
illustrates a hard reality behind the Democratic candidates’ rhetoric on climate change. For months, Democrats vying for the White House have sounded strikingly progressive on the issue, endorsing ambitious targets for reducing carbon emissions and putting
forward sweeping proposals for investing in the green jobs of the future. But the debate often glosses over the harder, more immediate choices between union jobs and phasing out fossil fuels.” [Associated Press,
9/9/19 (=)]
Gas Trade Group Taps Former Democratic House Aide.
According to E&E News, “A former House Democratic chief of staff has joined the Interstate Natural Gas Association of America as its new vice president of government and public affairs,
the group announced this morning. Nichole Francis Reynolds will head INGAA’s government and public affairs strategy as Congress gears up for a final push on its pipeline safety reauthorization legislation. A former chief of staff to Rep. Terri Sewell (D-Ala.)
and former Rep. Betty Sutton (D-Ohio), Reynolds has spent the past two years as vice president of public policy and community relations with Mastercard Inc. ‘Nichole’s public policy and political experience will serve our organization well, especially as we
work with Congress to reauthorize the Pipeline Safety Act and with the executive branch to bring predictability to permitting for energy infrastructure projects,’ INGAA CEO Don Santa said in a statement. In addition to that previous Capitol Hill work, Reynolds’
hiring earned the endorsement of Majority Whip Steny Hoyer (D-Md.) and Rep. Greg Meeks (D-N.Y.), who issued statements in support of the announcement. ‘The safe and secure transport of natural gas is important for our economy and public safety,’ Hoyer said
in a statement. ‘With Nichole joining INGAA, I have confidence that INGAA will continue in its commitment to pursuing these goals.’” [E&E News,
9/9/19 (=)]
Chad Ellwood
Research Associate
202.448.2877 ext. 119