Energy Brief: Kinder Morgan to Move Forward With $1.7 Billion Texas Pipeline Project


Government Brief

  • The Interior Department’s Bureau of Safety and Environmental Enforcement ordered the U.S. National Academies of Sciences, Engineering, and Medicine to halt a review of offshore oil rig safety inspections, according to the science academy. The move follows an August decision by the Interior Department to halt the group’s study of pollution deaths caused by mountaintop mining. (BuzzFeed News)
  • Researchers and public health groups filed a lawsuit against the Trump administration in an effort to stop an Environmental Protection Agency policy that blocks EPA grant recipients from serving on the agency’s advisory committees. EPA Administrator Scott Pruitt wrote the policy to address possible conflicts of interest, but the litigants say the policy violates ethics standards and laws governing the committees. (The Hill)
  • Deputy Secretary of Defense Patrick Shanahan said that while climate change will not be addressed in the National Defense Strategy, set to be released next month by the Pentagon, that doesn’t mean it’s no longer a priority for the U.S. military. The White House released its own strategy document this week that dropped climate change as a national security threat. (Reuters)

Business Brief

  • Kinder Morgan Inc. said it’s ready to move forward with its $1.7 billion Texas gas pipeline, expected to begin operation by October 2019, after signing Apache Corp. as an anchor customer. Construction is slated to start in the first quarter of 2018, and the pipeline is one of more than 15 proposed projects to move fossil fuel products from the Permian Basin to Houston, Corpus Christi and Beaumont. (Houston Chronicle)
  • Oil drilling company Schlumberger Ltd. would pay $1.35 million to settle a class-action lawsuit over allegations that it failed to pay workers overtime in North Dakota’s oil patch, under a deal that could be finalized early next year, according to federal court documents. Schlumberger, which provides technology and other support services for the oil and gas industry, denies any wrongdoing and says it agreed to settle in order to avoid the burden of continuing to fight the lawsuit. (The Associated Press)
  • Saudi Arabia’s former intelligence chief, Prince Turki al-Faisal, said the country should not rule out domestic uranium enrichment under its planned civilian nuclear program since world powers have allowed Iran to do the same. The Saudi government plans to start talks with the United States within weeks on a civilian nuclear cooperation pact that’s necessary in order for U.S. firms to bid next year on contracts to build Saudi’s first two nuclear reactors. (Reuters)

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Events Calendar (All Times Local)

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Two years ago, Congress lifted the ban on exporting crude oil—a recent yet major factor in the U.S.’s current global energy leadership. At the heart of it all is the Port of Corpus Christi—as the nation’s most active crude exporting port, the port has moved 61 percent of the 478 million barrels sold from the U.S., representing $5.5 billion in trade this year. Watch more about the energy port of the Americas!

General

Researchers sue EPA over advisory committee policy
Timothy Cama, The Hill

Researchers and public health groups are suing the Trump administration to stop the Environmental Protection Agency’s (EPA) policy blocking grant recipients from serving on advisory committees. The litigants say the policy, unveiled in October by EPA Administrator Scott Pruitt, violates government ethics standards, the federal law governing advisory committees and laws that created the specific committees.

E.P.A. Officials, Disheartened by Agency’s Direction, Are Leaving in Droves
Lisa Friedman et al., The New York Times

More than 700 people have left the Environmental Protection Agency since President Trump took office, a wave of departures that puts the administration nearly a quarter of the way toward its goal of shrinking the agency to levels last seen during the Reagan administration. Of the employees who have quit, retired or taken a buyout package since the beginning of the year, more than 200 are scientists.

Wind, solar, oil and gas — What the federal tax overhaul does for them
Cathy Proctor, Denver Business Journal

Colorado’s energy industry — fossil fuels as well as renewables — will fare well, or at least be mostly unharmed, by the provisions of the federal tax-code overhaul awaiting the signature of President Donald Trump, say many observers. The final bill keeps intact existing tax credits for renewable energy — credits that were hammered out in a 2015 budget deal that calls for the credits to be phased out over time.

Murkowski eyes January revival of energy bill
Geof Koss, E&E News

Having finally secured a long-sought victory on the Arctic National Wildlife Refuge, Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) is looking to the new year to advance another stalled legislative priority: the bipartisan energy package that languished in the last Congress after clearing the Senate by a wide margin. The energy bill, S. 1460, largely mirrors the measure that passed the Senate last year 85-12 but died in conference talks during the closing weeks of the 114th Congress.

Greens launch ads against Trump environmental pick
Timothy Cama, The Hill

The Sierra Club is running a Facebook advertising campaign to oppose Kathleen Hartnett White, President Trump’s nominee for a top environmental policy position. The ad campaign came after Sen. Tom Carper (Del.), the top Democrat on the Senate Environment and Public Works Committee, said he would object to any attempt by GOP leaders to allow Hartnett White’s nomination to extend into 2018.

Oil dips from highs, but OPEC’s cuts still support market
Henning Gloystein, Reuters

Oil prices on Friday dipped away from some of their highest levels since 2015, weighed down by rising U.S. output and the expected January re-opening of the Forties pipeline in the North Sea. Brent crude futures, the international benchmark for oil prices, were at $64.81 a barrel, down 19 cents, or 0.1 percent.

Oil and Natural Gas

The Trump Administration Just Halted An Offshore Oil Drilling Inspection Study
Dan Vergano, BuzzFeed News

The Trump administration halted an independent offshore oil drilling review, the US National Academies of Sciences, Engineering, and Medicine reported on Thursday. The study was aimed at improving inspections of industry platforms, like the one responsible for the 2010 Deepwater Horizon disaster.

Kinder Morgan to move ahead with $1.7 billion pipeline
Jordan Blum, Houston Chronicle

Houston’s Kinder Morgan said Thursday it’s ready to move forward with its $1.7 billion gas pipeline from West Texas to the Corpus Christi area after signing Apache Corp. as a major customer. The goal is to transport the gas to hubs near Corpus Christi and Houston, where it can then be shipped to power plants for electricity generation, to liquefied natural gas export terminals, or to Mexico, which is buying more American natural gas for its power generation.

Oil drilling firm reaches deal with North Dakota workers
Dave Kolpack, The Associated Press

An oil drilling company accused of failing to pay overtime to workers in North Dakota’s oil patch would pay $1.35 million to settle a class-action lawsuit under a deal that could be finalized early next year, according to federal court documents. The preliminary agreement calls for Schlumberger Ltd. to pay $675,000 to be spread out among 138 employees certified in the class.

Big Oil Looks on as Italian Giant Completes ‘Mission Impossible’
Chiara Albanese and Javier Blas, Bloomberg

The fact even senior managers privately described the plan as “Mission Impossible” showed the scale of the task: Italian energy giant Eni SpA wanted to produce gas from the Zohr field little more than two years after finding it in August 2015. The quick turnaround from discovery to production hasn’t gone unnoticed in the industry, and while it’s not as fast as shale companies have been known to move in Texas, North Dakota and other U.S. states — where new production is often brought in within just a few weeks — for Big Oil it represents a seismic shift.

Alaska oil and natural gas exploration boom in question
Brian Scheid, Platts

Congressional Democrats and environmentalists are preparing for a legislative and legal fight against oil and natural gas drilling in Alaska’s Arctic National Wildlife Refuge after Congress this week approved drilling there for the first time in decades. What the fight against ANWR drilling will look like going forward was uncertain Wednesday and will depend largely on the partisan makeup of Congress in coming years.

Russia’s Novak: No detailed oil deal exit talks until market in balance
Olesya Astakhova, Reuters

Russian Energy Minister Alexander Novak said there is a consensus on how to handle an exit from the global oil output cuts deal, but detailed exit talks should only begin when markets approach a balance, he told Reuters. The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia agreed last month to extend their deal to cut a combined 1.8 million barrels per day of oil production to the end of 2018 in order to remove excessive inventories and support oil prices.

Utilities and Infrastructure

McConnell Puts Infrastructure Ahead of Entitlements in 2018
Joe Williams, Roll Call

With the tax code overhaul on its way to President Donald Trump, Senate Majority Leader Mitch McConnell is looking ahead to 2018, in both politics and policy. The Kentucky Republican predicted one big focus will be an effort to move an infrastructure package.

Utilities short-circuited by California wildfires
Jessica Dye, Financial Times

A devastating rash of wildfires that have hit California over the past few months are casting a long shadow over two of the state’s major utility groups, PG&E and Edison International. PG&E shares are down nearly 12 per cent on Thursday, a day after the company announced that it was suspending its dividend, citing “uncertainty related to causes and potential liabilities associated with the extraordinary October 2017 Northern California wildfires.”

Can America’s Grid Survive an Electromagnetic Attack?
Naureen Malik, Bloomberg

Last month, federal agencies and utility executives held GridEx IV, a biennial event where officials responsible for hundreds of local utilities game out scenarios in which North America’s power grid could fail. Potential calamities both physical and cyber are reviewed, with participant responses analyzed to better prepare for any future attack.

Renewables

U.S. renewable fuel credits pressured by biodiesel tax credit optimism
Michael Hirtzer, Reuters

U.S. renewable fuel credits remained under pressure on Thursday as expectations mounted that lawmakers may soon renew a $1-per-gallon rebate for biodiesel blenders that could curb worries over tight supplies in the thinly-traded market. Prices of the biomass-based diesel (D4) Renewable Identification Number (RIN) credits traded at 80 cents apiece on Thursday and as low as 78 cents on Wednesday.

World’s top wind turbine maker, Vestas, pleased with final U.S. tax law
Stine Jacobsen and Jacob Gronholt-Pedersen, Reuters

Denmark’s Vestas, the world’s top wind turbine maker, said on Thursday it was pleased the final U.S. tax bill retained production tax credits for wind energy projects, after concerns over the bill had sliced almost a quarter off its share price. Earlier versions of the bill would have removed the credits, a move that the renewable energy industry said would threaten $50 billion in planned investment in wind energy projects in the United States.

Coal

Pennsylvania coal production slows but stays above 2016 levels
Brian Bowling, Pittsburgh Tribune-Review

Bituminous coal production in the state slowed slightly in the week that ended Dec. 16 but remains above 2016 levels, according to the Energy Information Administration. For the year-to-date, Pennsylvania bituminous coal production was up 13.2 percent, anthracite production was up 7.4 percent and national coal production was up 7.9 percent.

Exports, Perry plan may not be enough to save Murray
Dylan Brown and Hannah Northey, E&E News

Murray Energy Corp. CEO Robert Murray has for months lobbied the Trump administration to prop up struggling coal plants, warning of an unstable grid that could leave poor families “freezing in the dark.” And yet the outspoken coal executive is also pivoting to markets in Europe and India as a firewall against bankruptcy — a move that has failed to save other companies and analysts say is fraught with its own pitfalls.

Private Money May Fund Cancelled Mountaintop Removal Health Study
Jeff Young, WFPL News

The prestigious National Academy of Sciences is pursuing private funding to complete a study of the health effects of mountaintop removal coal mining after the Trump administration ordered a halt to the scientific work. The panel of scientists assembled by the National Academies was months into a study of the health effects of surface mining when the Trump administration’s Interior Department told them to stop work.

Nuclear

Saudi Arabia should not forfeit ‘sovereign’ right to enrich uranium: senior prince
Rania El Gamal and Katie Paul, Reuters

Saudi Arabia should not forfeit its “sovereign” right to one day enrich uranium under its planned civilian nuclear program, especially as world powers have allowed Iran to do so, a senior Saudi royal told Reuters. Former intelligence chief Prince Turki al-Faisal’s comments reinforced Riyadh’s stance on what is likely to be a sensitive issue in talks between Saudi Arabia and the United States on an agreement to help the kingdom develop atomic energy.

Vogtle stays alive, but its fate rests with Congress
Kristi Swartz, E&E News

The nation’s lone nuclear project under construction will continue as expected, but its fate now rests in whether Congress extends production tax credits. The Georgia Public Service Commission approved a measure that would keep Georgia Power’s Plant Vogtle nuclear reactors moving forward.

Climate

Pentagon strategy document will not include climate change: official
Idrees Ali, Reuters

Climate change will not be included in an important Pentagon strategy document set to be unveiled in January, the No. 2 official at the U.S. Defense Department said on Thursday. Deputy Secretary of Defense Patrick Shanahan told reporters that not mentioning climate change did not mean it was no longer a priority for the U.S. military.

Can We Suck Enough CO2 From The Air To Save The Climate?
Adele Peters, Fast Company

If humans stopped emitting greenhouse gases tomorrow, we’d still have a problem: Since the industrial revolution, fossil fuels and industry have already emitted more than 1.5 trillion tons of carbon dioxide; another 600 billion tons have come from changing land use. To have any chance of avoiding catastrophic climate change, some climate researchers say, we’ll need to continue shifting to solar power and electric cars–but we’ll also likely need to use technology to begin sucking large quantities of carbon dioxide directly from the air.

A Message from the Port of Corpus Christi:

The Port of Corpus Christi is the nation’s leading crude oil export port, poised at the juncture of American global energy leadership and benefits like reducing the trade deficit, bolstering national security and driving economic prosperity. To deliver, we must invest in infrastructure. Corpus Christi recently signed a Project Partnership Agreement with the U.S. Army Corps of Engineers to widen and deepen channels and increase transportation efficiency. See more.

Opinions, Editorials and Perspectives

States overreach in thwarting pipelines
Jeffrey A. Bruner, Houston Chronicle

Imagine if a new interstate highway, planned for years to connect two major population areas, was abruptly halted at the behest of a single state official for purely political reasons. The public outcry would be fast and furious.

A vulnerable power grid: Let’s invest in critical national infrastructure
Gregory F. Reed, The Hill

The Atlanta airport blackout this past weekend is yet another example of the vulnerability of our aging electric power grid infrastructure and our critical reliance on the reliable supply of electricity that supports our nation’s productivity and quality of life. And it indicates the need for continued research and development on innovative solutions to our evolving energy supply and delivery needs.

Enhancing customer engagement: A utility roadmap for the Amazon era
Philip Mihlmester, Utility Dive

Forward-thinking companies, like Amazon and Apple, are changing what customers expect from their service providers, including utilities. As a direct result, consumers are increasingly interested in alternative energy choices that give them greater control, comfort and convenience.

Trump’s National Security Strategy has a climate blind spot
David Livingston, Axios

According to Trump’s National Security Strategy, climate policies will “continue to shape the global energy system” but climate change doesn’t pose an explicit national security threat. This omission is hard to square with the Defense Department’s recognition of climate as a “threat multiplier” that will exacerbate global droughts, flooding and migration and the calls on the U.S. military that accompany these destabilizing events.

Research Reports

Capturing and Utilizing CO2 from Ethanol: Adding Economic Value and Jobs to Rural Economies and Communities While Reducing Emissions
State CO2 EOR Deployment Work Group, The Great Plains Institute

As the world leader in demonstrating carbon capture technologies in multiple industries, the U.S. is well poised to expand commercial deployment and bring down the costs of CO2 capture, compression and pipeline transport. With its high-purity and low-cost biogenic CO2 derived from ethanol fermentation, the biofuels industry can play a key role in scaling up carbon management for energy production and geologic storage.

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