Keystone XL pipeline could cost society up to $100B a year, critics say
As debate over Keystone XL pipeline continues, one group opposed to the transcontinental pipeline is claiming the project will cost up to $100 billion a year in damages to health, property, ecosystems and the climate.
Oil Change International, which is dedicated to facilitating the transition away from fossil fuels to clean energy, on Tuesday released its study on the actual cost of the pipeline, which would move diluted bitumen and crude oil from Canada to refineries along the Gulf Coast. Read the full report here.
“Americans are fed up with footing the bill for corporate pollution. The Keystone XL Pipeline will cause billions of dollars in damages every year that no one wants to pay,” said Lorne Stockman, research director for Oil Change International.
“TransCanada is proposing a massive wealth transfer from our own pockets to Big Oil — we will pay in hospital visits, rebuilding after super storms, and in clean up efforts in communities like Mayflower and Kalamazoo.
That’s outrageous, and President Obama should reject this pipeline immediately as a lose-lose gamble.”
Developer TransCanada is awaiting a federal permit for the Keystone XL project.
Supporters contend it will be a boon to the economy and North American energy security, while opponents fear future ecological disasters and other climate impacts, citing past pipeline spills in Michigan and Arkansas.
The Obama administration denied a permit for the $5.3 billion project last year, but TransCanada renewed its application after altering the pipeline’s route through Nebraska‘s Sand Hills.
The southern leg of the project, dubbed the Gulf Coast Project, is nearing completion in Oklahoma and Texas, despite scores of protests by opponents. The 485-mile pipeline between the oil storage hub at Cushing and Houston-area refineries is expected to be in operation by the end of the year.
New websites provide a few more clues about Aubrey McClendon’s latest ventures
Chesapeake Energy Corp. CEO Aubrey McClendon speaks at a 2010 energy conference.
I have stumbled across websites for two more new companies that former Chesapeake Energy CEO Aubrey McClendon has formed, Arcadia Capital LLC, and McClendon Energy Partners LP. You can read more here about about McClendon’s new exploration and production company American Energy Partners LP, which is now hiring.
On its website, Arcadia Capital describes itself as a “family office that manages investments in oil and natural gas, real estate development and venture capital.”
Will McClendon will use Arcadia Capital to manage his personal investments? You can read more here about family offices.
McClendon’s personal holdings are extensive, including a 283-acre tree farm in Arcadia, a $70 million stake in ProCure Treatment Centers, Inc., a 19 percent interest in the Oklahoma City Thunder, as well as several restaurants and real estate development projects.
McClendon Energy Partners remains something of an enigma. There’s nothing to see on the website but a blurry shot of McClendon’s torso and gesturing hands.
Somebody out there knows more. E-mail me at bbailey@opubco.com.
Bakken oil estimates increased
The U.S. Geological Survey on Tuesday more than doubled its estimate of recoverable oil in the Bakken Formation of North Dakota and Montana.
Oklahoma City oilman Harold Hamm still thinks the number is far too low.
The government now says the world’s fastest-growing oilfield likely holds about 7.4 billion barrels of undiscovered oil that can be recovered with today’s technology.
The number is 49 times more than its 1995 forecast of 151 million barrels of recoverable oil. By 2008 the geological survey revised its estimate to 3.7 million barrels.
Oklahoma City-based Continental Resources Inc. was one of the first developers in the area and now has a hand in about 20 percent of the wells drilled so far.
Continental Resources in 2010 estimated the field contains 24 billion barrels of technically recoverable oil out of 577 billion barrels of total oil in place.
Last year, the company bumped up its total oil estimate by 56 percent to 903 billion barrels.
Continental Resources and other producers in the area are now producing oil from at four different rock layers and continue to improve drilling techniques in the area.
“The Bakken continues to get bigger, as large fields around the world have always done,” Rick Bott, Continental’s president and chief operating officer, said at the company’s investors day in October.
Energy map developed
The country’s energy production and energy potential have become increasingly popular topics among politicians and industry leaders in recent years.
Domestic crude oil production has increased rapidly over the past five years, reversing half a century of declines.
At the same time, there has been increasing discussion about the country’s renewable energy potential.
To help the public better understand the issues, Oklahoma City communications firm Saxum created a map of the country’s energy production and potential.
“Our US of Energy map is intended to be a conversation starter — an opportunity to begin telling the awesome, positive story of America’s domestic energy revival,” Blake Jackson, vice president of digital at Saxum, said on the company’s blog.
A Saxum team spent five weeks researching and crafting the design before putting everything together.
“What began as a simple graphic showcasing America’s energy riches quickly grew into a two-sided, folded map concept displaying thousands of individual data points,” Jackson said.
Recap of the OSU Energy Conference
Oklahoma State University held its 7th Annual Energy Conference on Tuesday in Oklahoma City, and our man Jay F. Marks (@okenergybeat) was a tweeting machine. You can read his dispatches below and check out Energy Editor Adam Wilmoth’s recap of the conference here. For the speaker presentations, go here.
Love’s founder reiterates business practices amid feds’ investigation of rival
The ongoing investigation of one of the nation’s largest truck stop chains has nothing to do with Oklahoma City’s Love’s Travel Stops and Country Stores.
Love’s added 40 locations when the two former rivals merged in 2010, but founder Tom Love on Monday used the fraud allegations as an opportunity to reiterate the company’s business practices in a letter to all Love’s employees.
“Since the founding of our company 50 years ago, we have always strived to run our business in a straightforward and transparent manner. Our core values -customer focus, integrity, strong work ethic, innovation and perseverance – are the foundation on which I built this company. These are also the values that guide our everyday actions, decisions and behavior as employees. Nothing is more important than focusing on meeting the needs of our customers.
Our employee base, from sales teams to drivers to store cashiers, is made up of talented professionals who are respected for their kmowledge of the trucking and transportation industry we serve. Our approach to working with customers and potential customers reflects the same core values we all abide by at Love’s, and we are all held to the highest standards of accountability for our actions.
Moving forward, I encourage you to continue taking care of our customers with the same core values they have come to expect from us. Let’s be difference-makers today.”
Love’s. which was founded in 1964, has more than 290 locations in 39 states. It has about 10,000 employees.
Aubrey McClendon’s new company has a website
Aubrey McClendon talks to a Chesapeake employee during his farewell party in March at Chesapeake headquarters.
One of former Chesapeake Energy Corp.’s CEO Aubrey McClendon’s new companies, American Energy Partners LP, now has its website up.
There’s not much to see now, but from the looks of things McClendon is starting a new exploration and production company.
I wrote McClendon an e-mail at his new American Energy Partners e-mail address asking if he was willing to discuss his new venture with me. Promptly and politely, McClendon wrote back and said he was not ready to talk and probably wouldn’t be any time soon.
Click here for more on McClendon’s new ventures: American Energy Partners, McClendon Energy Partners and Arcadia Capital.
IRS clarifies rules on construction to qualify for wind tax credit
Congress granted the wind industry a one-year extension of a critical production tax credit in the deal cut at the end of 2012 on the so-called “fiscal cliff.”
But the extension also changed the trigger on when the tax credit can be claimed. Previously, wind farms or other renewable facilities had to be producing electricity to claim the credit. Now, the extension requires them only to “begin construction” before Jan. 1, 2014. How you define “begin construction” has made the situation murky for many wind developers and put some projects on hold.
That changed Monday when the Internal Revenue Service issued 13 pages of rules on what it considers to be construction “by starting physical work of a significant nature.” Wind developers can either meet those construction milestones or spend at least 5 percent of the total project cost by the Jan. 1, 2014, deadline.
The rules say construction has to be related to the actual project. Developers can’t build an access road for construction and expect that the project will qualify by the deadline. But if that road is integral to the operation of the wind farm, then it likely will qualify.
“I think they’ve found the right combination that gives developers an appropriate amount of flexibility for a broad range of project and construction scenarios,” Jacob Susman, founder and chief executive officer of OwnEnergy Inc., a Brooklyn-based builder of wind farms, told Bloomberg. The ruling also protects taxpayers “by ensuring that real projects that have legitimately begun construction will qualify.”
The incentive now gives producers a 2.3 cent per kilowatt hour tax credit, up from 2.2 cents. Along with state renewable energy standards, the tax credit helped push U.S. wind installations to more than 60,000 megawatts by the end of 2012. Oklahoma ranks sixth in the country in wind power capacity with more than 3,100 megawatts, according to the American Wind Energy Association.
SandRidge Energy shareholder expects company to be sold after proxy fight
Canadian billionaire Prem Watsa is SandRidge Energy Inc.’s largest shareholder. His Fairfax Financials held about 12.7 percent of SandRidge’s outstanding stock as of February.
Watsa, who is known as the Canadian Warren Buffett, was largely silent during the Oklahoma City oil company’s proxy fight with TPG-Axon Capital, which ended last month with the hedge fund gaining a foothold on SandRidge’s board while pushing CEO Tom Ward toward the door.
Watsa wasn’t too optimistic about the company’s future when he talked to an investor about SandRidge recently at Fairfax Financials’ annual shareholder meeting in Toronto.
“It’s unfortunate, but we think that TPG is just going to flip it and sell it,” he said. “I mean yeah, we are going to make money on this, but we think that if Tom stayed in and grew value into the business, we think it could be worth 20-something a share.”
SandRidge was trading for less than $5 a share on Tuesday.
Watsa repeatedly expressed his support for Ward, whom he called an “amazing individual.” He praised Ward’s accomplishments at SandRidge and as co-founder of Chesapeake Energy Corp. with Aubrey McClendon.
“The man grew up living and breathing oil and gas. He helped built two great empires all from nothing,” he said. “We were really disappointed, because we knew that Tom could realize significant amounts of the assets. While we did disagree a little on the compensation, we think that Tom is great.”
The Fairfax team believes TPG-Axon ignored the long-term value of SandRidge’s holdings in the oil-rich Mississippian play as it pushed for control of the company, contributor Wilson Wang wrote for investment research site Seeking Alpha. Fairfax also is bullish on natural gas.
Aubrey McClendon is back in business
Aubrey McClendon’s companies have hung out their shingles at the Harvey Parkway building.
Just two weeks after leaving Chesapeake Energy, former CEO Aubrey McClendon appears to be moving full steam ahead with multiple new business ventures, at least two of them energy related.
As The Oklahoman first reported, McClendon has leased out the sixth floor of the Harvey Parkway building at 301 NW 63, just a few blocks away from Chesapeake’s main campus. He also has registered at least two new companies in the state of Oklahoma, Arcadia Capital LLC and McClendon Energy Operating LLC.
The entity American Energy Partners LP was also registered on the same day as McClendon Energy Operating by the law firm of former Chesapeake Energy director and long-time McClendon friend Shannon Self, records show.
All three companies have hung out their shingles at the Harvey Parkway.
The new companies have also registered several web domains. See here and here for details.
I paid a visit to the Harvey Parkway building Friday afternoon and spotted fresh paint in the parking lot. All of prime parking spots at the Harvey Parkway are now reserved for Suite 600 and American Energy.
Inside, a new flat-screen TV by the elevator notes that Arcadia Capital, McClendon Energy Partners and American Energy Partners are all headquartered in suite 600. Renovations are still ongoing on the sixth floor, but there is an office with the lights on just to the right of the elevator staffed with a receptionist.
McClendon & Co. is open for business, it seems.
McClendon also is taking some of the talent from Chesapeake with him, including Tom Price, a senior vice president who is leaving the company in May.
Will suite 600 at the Harvey Parkway give birth to Chesapeake 2.0? Only time will tell.
