General
News
Texas Could Tighten Some Natural Gas Flaring Rules By Fall.
According to Reuters, “Texas as early as this fall could tighten some rules for the controversial practice of natural gas flaring, the
head of the state’s regulatory commission said on Tuesday. The practice of burning off unwanted natural gas produced alongside more profitable oil has become a top issue for both environmentalists and investors, who are focused on sustainability measures and
are already frustrated by a decade of poor financial returns in oil and gas. Flaring has surged with U.S. oil output, but can worsen climate change by releasing carbon dioxide. Recommendations from an industry panel, provided to state regulators at a meeting
on Tuesday, included reducing to 90 from 180 the number of days producers can routinely burn unwanted gas without going to the Texas Railroad Commission, the state’s regulator, for a hearing. Commission Chairman Wayne Christian directed agency staff to figure
out which of the recommendations from the Texas Methane & Flaring Coalition, a group of producers and industry organizations, could be implemented by the fall. ‘This is now the opportune time to implement meaningful reforms to reduce flaring before oil and
gas production climbs back to previous highs,’ Christian said, adding that the issue has become well known on Wall Street and is hindering some producers’ access to capital. Flaring is used sometimes during well maintenance, plant outages or for safety reasons,
but is also done routinely in some oil fields that do not have pipelines to get gas to market.” [Reuters,
6/16/20
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For Decades, The Oil And Gas Industry Got Taxpayer Help From The Fracking Production Tax Credit.
According to DeSmog, “Before the U.S. fracking boom took off, shale drillers had access for over two decades to a particular tax incentive
that experts say played a key role in setting the stage for the so-called shale revolution. Known as the Section 29 Unconventional Fuels Production Tax Credit, this subsidy resulted in more than tripling the production of unconventional gas, at a cost of at
least $10 billion to taxpayers, from 1980 to 2002. This fracking production tax credit originated with the 1980 Windfall Profits Tax Act during a time of concern about U.S. dependency on foreign oil. The incentive granted a tax credit of $0.50 per thousand
cubic feet (Mcf) of natural gas produced from unconventional sources like shale, tight formations, and coal beds. By 2002 the credit had expired, and fracking pioneer Mitchell Energy had by then achieved commercial production from the Barnett shale, near Fort
Worth, Texas. According to a 2012 report, ‘Where the Shale Gas Revolution Came From,’ by the tech solutions-focused think tank the Breakthrough Institute, ‘Production of unconventional gas nearly quadrupled over this period, with the production tax credit
vital to the growth and maturation of this advanced energy industry.’ The Breakthrough Institute’s Michael Shellenberger and Ted Nordhaus, who routinely bash environmentalism and advocate for government investment in nuclear technology, explained the importance
of the Section 29 production tax credit in a Washington Post op-ed back in 2011: ‘While the rise in natural gas prices in the late 1990s sparked the shale gas revolution, it was the federal non-conventional gas tax credit that made Mitchell’s experimenting
possible in the early years, when there was no market for more expensive shale gas.’” [DeSmog,
6/16/20
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Turning Manure Into Money.
According to the Washington Post, “When Randy Jordan, a fifth-generation dairy farmer in central Massachusetts, looked into turning
manure from his 300 cows into natural gas more than a decade ago, he just wanted to find a way to lower his increasingly painful electric bill. He knew that biodigesters, a sort of modern alchemy that transforms poop into profits, had been around for decades.
But many of the tanks, where microorganisms digest manure and turn it into methane gas that can be burned as fuel or converted to electricity, had been abandoned. They proved too complicated to manage. ‘It was challenging,’ he remembered, ‘and the money didn’t
work.’ Then he met Bill Jorgenson, a longtime energy consultant with a vision. Jorgenson told Jordan that while 87 percent of the digesters in the country had failed, he had a new recipe for success: add food waste to the manure. It would increase the energy
output and boost the income for farmers through tipping fees from manufacturers, retailers and others looking to unload food waste. Best of all, it would use methane from the manure, instead of venting it into the atmosphere to contribute to climate change.
It was an unlikely alliance between the farmer and the consultant. ‘This guy genuinely did not know which end the manure came out of the cow,’ Jordan joked.
Along with four other farmers, they formed AGreen Energy LLC and began operating on five farms. By 2014, after three of the farmers dropped out and sold their shares to Jordan, the project smelled just right to Vanguard Renewables, a start-up that saw the
technology’s promise with the addition of food waste. The companies merged.” [Washington Post,
6/16/20
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Oil And Gas Industry Unveils Plan To Curb Flaring.
According to E&E News, “Texas energy regulators expressed doubts yesterday about a push to end gas flaring as an industry task force
released its recommendations on curbing the practice. At a hearing of the Texas Railroad Commission — which regulates energy production — the coalition of oil and gas trade groups said that the state should collect better information on the amount of gas flared
and create a system that would limit the duration of some flaring permits. The Texas Methane and Flaring Coalition’s report, though, didn’t call for a broader crackdown on the practice. ‘Operations are different and operators are different, but these steps
will lead to reduced flaring,’ said Todd Staples, president of the Texas Oil and Gas Association, one of the trade groups that led the flaring task force, which includes six other trade associations and 40 oil and gas producers. Environmental groups at the
hearing urged the state agency to go further and eliminate routine flaring by 2025. ‘The practice of routine flaring just doesn’t reflect our values,’ said Colin Leyden, director of regulatory and legislative affairs at the Environmental Defense Fund. EDF,
the Sierra Club and other environmental groups are concerned about flaring for a variety of reasons, including that methane in natural gas contributes to climate change. An EDF survey of flares in the Permian Basin found that more than 10% of them were essentially
venting raw methane to the atmosphere because they were unlit or otherwise malfunctioning (Energywire, May 1).” [E&E News,
6/17/20
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AP | Former Pa. House Speaker Joins Gas Utility.
According to E&E News, “A day after leaving his post as speaker of Pennsylvania’s House of Representatives, Mike Turzai has become general
counsel for the Pittsburgh-based natural gas division of Essential Utilities Inc., the company said yesterday. Turzai, a Republican from suburban Pittsburgh, was an ally of Pennsylvania’s natural gas industry while in office, including helping to rebuff efforts
to impose a tax on production from the vast Marcellus Shale reservoir. The Associated Press reported in January that Turzai was said to have received an offer from the company before Turzai announced he would not run for reelection. It is not clear who might
succeed Turzai as speaker. Next in line in GOP leadership is House Majority Leader Bryan Cutler of Lancaster County. Earlier this year, Bryn Mawr-based water utility Aqua America Inc. closed on its $4.3 billion purchase of Pittsburgh-based gas utility Peoples
to become Essential Utilities. Peoples says it serves 760,000 homes and businesses. In 2017, Turzai announced a run for governor, but he dropped out when the Republican State Committee voted to endorse a rival in the primary. He also had expressed an interest
in running for governor again in 2022, when Gov. Tom Wolf, a Democrat, is barred from seeking another four-year term. Turzai was speaker for all five-and-a-half years during Wolf's time in office after serving four years as majority leader.” [E&E News,
6/17/20
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Pipeline's Future Murky Despite Supreme Court Win.
According to E&E News, “The Supreme Court yesterday removed one hurdle for developers of the Atlantic Coast pipeline, but the natural gas project remains in legal limbo as a host
of other obstacles stand in the way of construction. In a 7-2 decision, the justices reversed a 4th U.S. Circuit Court of Appeals ruling stating that the Forest Service could not authorize a permit for the pipeline to cross hundreds of feet beneath the scenic
Appalachian Trail. The ruling was a win for pipeline developers Dominion Energy Inc. and Duke Energy Corp., as well as the Trump administration, but it did not resolve problems with other permits the 4th Circuit has scrapped. ‘My big takeaway on this is it’s
a fairly narrow issue on the Mineral Leasing Act,’ Cale Jaffe, director of the University of Virginia’s Environmental and Regulatory Law Clinic, said of yesterday’s ruling. ‘But the broader implications on pipeline development will be what happens on the environmental
issues that the Atlantic Coast pipeline has lost on.’ The majority of the Supreme Court’s justices found that the National Park Service had limited authority to administer the trail and that federal law only granted NPS an easement to maintain the trail on
federal lands. However, the court found, the lands the trail traverses remain part of the George Washington National Forest under the Forest Service’s jurisdiction. Justice Clarence Thomas, writing for the majority, compared the distribution of authority between
the federal agencies to easements a rancher might grant to a neighbor that provided only limited rights to the property.” [E&E News,
6/16/20 (=)]
BLM Punts Multiple Lease Sales.
According to E&E News, “The Interior Department has punted yet another federal oil and gas lease sale, this time in Wyoming, amid the global health emergency and related oil price
bust. The Wyoming Bureau of Land Management announced last week that it would postpone its second quarter lease sale, originally slated for June 22, delaying the auction of about 170,000 acres to oil and gas interests. The Wyoming deferral follows ones in
Utah, Nevada, Colorado, Mississippi and New Mexico. The New Mexico sale in May was canceled the night before. A Utah sale originally scheduled for this month will be combined with other parcels in a September sale. The postponements have not been accompanied
by explanations. Requests for comment today from New Mexico and Wyoming BLM offices were deferred to the national office. And BLM headquarters did not respond to a request for comment in time for publication. The Trump administration has been pressured by
environmental and community advocates since early in the COVID-19 pandemic to postpone decisions on oil and gas development. Critics argued the public health emergency made it more difficult for the public to fairly weigh in on oil and gas decisions. Others
noted the low oil prices — driven in part by the cessation of normal economic activity and travel during the pandemic — would dampen competition and undervalue public resources. Oil and gas leases, which convey the right to explore and produce hydrocarbons,
last for 10 years.” [E&E News,
6/16/20 (=)]
Chad Ellwood
Senior Research Associate
Climate Action Campaign
202.448.2877 ext. 119