General
News
Democrats Call For New Gas Pipeline Moratorium Amid Pandemic.
According to The Hill, “A group of 29 House Democrats is asking the Federal Energy Regulatory Commission (FERC) to stop approving new natural gas pipeline projects and new liquefied
natural gas export facilities amid the coronavirus outbreak. They argued in a Wednesday letter to FERC Chairman Neil Chatterjee that such a moratorium is necessary to make sure the public is included in the process and also to protect the safety of construction
crews. ‘FERC must issue an immediate moratorium on the approval and construction of new shale-gas pipeline projects and Liquid Natural Gas export facilities to protect the public health, our environment, and the American people’s confidence in the integrity
of governmental administrative and legal proceedings,’ they wrote. The letter was led by Reps. Jamie Raskin (D-Md.), Jim McGovern (D-Mass.) and Ilhan Omar (D-Minn.). Chatterjee, however, expressed resistance to such a pause, arguing that the country’s infrastructure
should try to be prepared for a return to normalcy. ‘It’s imperative that the Commission continue to operate as close to normal as possible so that the industries we regulate are well-positioned to contribute to the nation’s economic recovery when we all return
to work,’ he said in a statement to The Hill. ‘We at FERC will do everything in our power to make sure our energy systems continue to operate and are there when we call upon them once our economy reopens. To shut our door to working on the nation’s critical
energy infrastructure would be as irresponsible as it is shortsighted,’ the chairman added.” [The Hill,
4/15/20 (=)]
State Tells Shell It Doesn't Need A Waiver To Build Natural Gas Power Plant.
According to the Pittsburgh Post-Gazette, “Several hundred furloughed employees are heading back to work at the Shell Chemical Appalachia cracker plant in Potter Township. The sprawling
construction project shut down in mid-March to prevent the spread of COVID-19 but was authorized to keep some workers onsite to disinfect common areas and perform emergency repairs. There are about 300 people working at the Beaver County project. By next week,
Shell will have about 500 people onsite after it received word from the state that its ‘repair, preservation, and maintenance’ activities do not require a waiver from the all-but-essential business shutdown Gov. Tom Wolf ordered last month. ‘We will be reviewing
our staffing numbers week by week, while also meeting [Centers for Disease Control and Prevention] and [state Department of Health] guidelines,’ Shell spokesman Michael Marr said. Before the COVID-19 outbreak shut down Shell’s and nearly all other construction
projects in the state, the Beaver County site had about 8,500 workers onsite. Casey Smith, a spokeswoman for the Pennsylvania Department of Community and Economic Development, which reviewed Shell’s waiver, said Shell’s request to the state asked that it be
allowed to continue construction of a cogeneration power plant. The petrochemical complex that Shell is building involves an ethane cracker, three polyethylene units and the 250-megawatt, natural gas-powered electricity plant intended to power operations at
the other facilities.” [Pittsburgh Post-Gazette,
4/15/20 (=)]
U.S. Natural Gas Slips As Exports Decline, Coronavirus Demand Destruction Worries.
According to Reuters, “U.S. natural gas futures slipped for a fifth day in a row on Wednesday as pipeline and liquefied natural gas (LNG) exports declined and on long-term forecasts
government steps to slow the spread of coronavirus will cut demand in coming months. Traders noted those price decline came despite a slowdown in output and short-term forecasts for cooler weather and higher heating use over the next two weeks than earlier
expected. Front-month gas futures for May delivery on the New York Mercantile Exchange fell 2.9 cents, or 1.8%, to $1.621 per million British thermal units at 8:12 a.m. EDT (1212 GMT), their lowest in over a week. That puts the front-month down for a fifth
day in a row for the first time since October. During that time, the contract has lost about 12%. Even before the coronavirus started to cut global economic growth and energy demand, gas was trading near its lowest in years as record production and months
of mild winter weather allowed utilities to leave more fuel in storage, making shortages and price spikes unlikely. During the first week of April, the front-month settled at its lowest since August 1995. Looking ahead, gas futures for the balance of 2020
and calendar 2021 were trading much higher than the front-month on expectations demand will jump in coming months as the economy snaps back once governments loosen travel and work restrictions after slowing the spread of coronavirus. The premium of futures
for June over May rose to its highest since 2008 when the contracts started trading for a fourth day in a row, while calendar 2021 has traded over 2022 for 25 days and over 2025 for 15 days.” [Reuters,
4/15/20 (=)]
Permian Basin Oil And Gas Companies Seek To Curb Air Pollution Amid COVID-19 Pandemic.
According to the Carlsbad Current-Argus, “Major oil and gas producers in the Permian said they were increasing efforts to curb pollution and the environmental impact of extraction
operations, as environmentalists worried emissions could increase while wells were shut in and oversight staff reduced amid the spread of the COVID-19 pandemic. Oil giant ExxonMobil announced it was beginning field trials of eight methane tracking technologies
at 1,000 work sites between Texas and New Mexico. The company hoped the move would better track and monitor polluting emissions, assisting in efforts to reduce the release of the methane and other volatile organic compounds (VOCs). To monitor emissions in
the air, Exxon planned on using satellites, drones, helicopters and planes, along with mobile units and fixed-position sensors on the ground. Monitors will also look for leaks and identify potential solutions which Exxon could share with other operators, read
an Exxon news release. Staale Gjervik, senior vice president of unconventional at Exxon said the company hoped to scale up its emission detection technology to be used on a commercial level once the trials conclude. ‘By testing the most promising methane detection
technologies in a field environment, we are providing viable solutions that can be adopted by other producers to detect and reduce methane emissions,’ he said. ‘We are applying scientific rigor and taking aggressive steps to find commercially scalable and
affordable solutions for all operators.’” [Carlsbad Current-Argus,
4/15/20 (=)]
Lawmakers Urge FERC To Halt Pipeline, Gas Project Approvals.
According to E&E News, “Almost 30 House Democrats called on the Federal Energy Regulatory Commission yesterday to issue a moratorium on all new approvals of natural gas pipeline and
liquefied natural gas projects because of the novel coronavirus pandemic. A letter from the lawmakers adds to the growing chorus of Democratic opposition to Trump administration regulatory activities during the pandemic because of the increased difficulty
of getting public input. Led by Rep. Jamie Raskin of Maryland, House Rules Chairman Jim McGovern of Massachusetts and Rep. Ilhan Omar of Minnesota, the group wrote FERC Chairman Neil Chatterjee to halt activities related to fossil fuel infrastructure. ‘While
everyday life has been thrown into turmoil and it has become a struggle for most Americans just to put food on the table and keep their families safe, FERC’s comment and intervention deadlines have not budged,’ the lawmakers wrote. The agency is set to consider
eight agenda items this morning during its monthly meeting related to pipelines and LNG export projects, mainly focused on rehearing requests for actions already taken by the commission. ‘A moratorium on pipeline and export facility approvals is necessary
to help ensure that Americans are not excluded from a decision-making process that has profound and irreversible consequences for their lives and communities,’ the lawmakers wrote. Chatterjee has remained insistent that FERC’s regulatory work would continue,
even as the staff largely works remotely in respect to social distancing guidelines.” [E&E News,
4/16/20 (=)]
NRC Says Gas Pipeline Doesn't Pose Threat To Indian Point.
According to E&E News, “A natural gas pipeline running near the Indian Point Energy Center in New York does not pose a threat to the nuclear reactors there, the Nuclear Regulatory
Commission determined in a reassessment of a flawed 2014 safety analysis. The report issued today by NRC clears any uncertainty raised by an inspector general report that determined commission staff failed to adequately analyze the risk posed by the pipeline
when it first reviewed its impacts in 2014. The new analysis determined that, because of modern construction and inspection techniques, the pipeline has a small chance of rupture. And even if it were to explode, the location of Indian Point’s safety systems
sit well outside the range from impacts of projectiles or blast heat. ‘The team determined that, even though Entergy (the plant owner) and the NRC made some optimistic assumptions in analyzing potential rupture of the 42-inch natural gas transmission pipeline,
the Indian Point reactors remain safe,’ NRC said in its latest report. NRC’s inspector general last month identified a faulty analysis conducted by commission staff into the Algonquin Incremental Market pipeline extension project, a 42-inch pipeline project
that would go through the southern part of Entergy Corp.’s Indian Point site (Energywire, Feb. 28). The IG determined that the commission’s review of the pipeline impacts ‘failed to thoroughly reexamine the underlying premises of its analyses and did not accurately
communicate its analytical work performed.’ That included faulty assumptions about a potential breach and explosion.” [E&E News,
4/15/20 (=)]
Global Oil Demand To Plunge A Record Amount In 2020. According to the Washington Examiner,
“Global oil demand will plunge by a record 9.3 million barrels per day in 2020, erasing years of growth, even if worldwide lockdowns and travel restrictions ease in the second half of the year. This month, with economic activity at a standstill due to the
coronavirus, global oil demand is set to fall by 29 million barrels per day compared to a year earlier, down to a level not seen since 1995. The world normally consumes 100 million barrels per day of oil. The latest monthly oil market report by the International
Energy Agency is ‘staggering,’ the agency’s director Fatih Birol said Wednesday. The West Texas Intermediate oil price dropped below $20 per barrel after the release of the report. ‘When we look back at 2020, we may see it was the worst year in the history
of oil markets and the second quarter may have been the worst of the lot,’ Birol told reporters. ‘In that quarter, April may have been the worst month. It may go down as ‘Black April’ in the history of the oil industry.’ OPEC+ deal helped on the margins: The
demand decline would be even worse without the deal announced this past weekend for Saudi-led OPEC, Russia, and other oil-producing nations to cut production by 9.7 million barrels per day beginning in May. Wealthy nations in the G-20 such as the U.S. and
Canada are also expected to see their production fall by some 3.5 million barrels per day due to market forces. Those steps won’t rebalance the market immediately, and it won’t stop global crude storage capacity from filling up by the middle of the year.”
[Washington Examiner, 4/15/20 (=)]
Trump Administration Considers Paying US Oil Producers To Keep It In The Ground.
According to the Washington Examiner, “The Trump administration is considering paying U.S. companies to keep the oil they produce in the ground to help alleviate a historic glut.
The Energy Department is weighing a plan to purchase oil from small and medium-sized shale companies struggling from a price collapse on the condition that the producers don’t extract or deliver the oil, people familiar with the matter told the Washington
Examiner. The intervention could prop up struggling producers by giving them funding they need to pay their workers, while also keeping oil off the market at a time when global oil demand is expected to fall this year by a record amount due to the coronavirus
halting economic activity and travel. Federal law provides the Energy Department authority to stock as much as 1 billion barrels of oil for emergencies. The Energy Department plan would pay companies to not produce as much as 365 million barrels worth of oil,
Bloomberg reported, which then could be counted as part of the government’s emergency stockpile. […] But the move to purchase the oil, potentially costing billions of dollars, would require an appropriation from Congress. The Energy Department has not yet
submitted a proposal to the Senate Energy and Natural Resources Committee, which has oversight over the agency, said a spokeswoman for the panel’s chairwoman Lisa Murkowski of Alaska. ‘While we have not received a formal proposal from the Department of Energy,
we look forward to fully reviewing the idea to purchase and store crude oil onsite in producing fields,’ Grace Jang, the spokeswoman, told the Washington Examiner.” [Washington Examiner,
4/15/20 (=)]
Chad Ellwood
Senior Research Associate
Climate Action Campaign
202.448.2877 ext. 119