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.”
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 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.
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.
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.
Faced with a lingering cash crunch, Chesapeake Energy Corp. is looking to sell up to $7 billion in assets this year.
The company has added close to 100,000 acres in Ohio’s Utica Shale to the properties it has listed with broker Meagher Energy Advisors. Chesapeake last summer listed more than 330,000 net acres in the area.
Chesapeake is refining its focus as it tries to rein in its budget and reduce drilling costs, acting CEO Steve Dixon said in a conference call last week.
Dixon said many of the assets Chesapeake will sell this year will be smaller acreage packages.
We are particularly pleased with the market’s response to the multiple small asset packages that we have offered,” he said. “Many of these assets may not be individually noteworthy to investors, but in aggregate, the combined value that we anticipate collecting this year will likely be very meaningful and lead to further progress in improving our balance sheet.”
The latest Ohio assets to hit the market include about 94,000 acres in Portage and Stark counties.
Chesapeake Energy Corp. on Friday revealed the U.S. Securities and Exchange Commission has upgraded its informal inquiry of the company into a formal investigation.
Chesapeake caught the eye of the SEC’s Fort Worth office last year after Reuters reported CEO Aubrey McClendon took more than $1 billion in shrouded personal loans to fund his stake in the company’s wells. It confirmed the SEC’s informal inquiry in May.
The company’s board, revamped last year amid shareholder unrest, announced last week its review of McClendon’s finances revealed no sign of intentional misconduct.
On Friday, Chesapeake filed its annual report, showing received notice Dec. 21 the SEC would continue its inquiry as an investigation.
“The company, including Mr. McClendon, is providing information to the SEC in connection with this matter. The company is also responding to related inquiries from other governmental and regulatory agencies and self- regulatory organizations,” according to Friday’s filing.
Chesapeake’s board still faces more than a dozen breach of fiduciary duty lawsuits filed by shareholders after news of McClendon’s loan deals emerged last year.
McClendon is leaving the company by April 1, but the board said its review had nothing to do with his departure.
The company also is being investigated by the U.S. Department of Justice for possible antitrust violations in Michigan, where Chesapeake and rival Encana Corp. have admitted to sharing information before lease auctions in 2010. Both companies have denied any wrongdoing.
Newly completed research by the Coordinating Research Council indicates increased ethanol in gasoline could damage the fuel systems in millions of vehicles manufacturing since 2001, the American Petroleum Association said Tuesday. The council is an organization supported by the oil and automotive industries.
Bob Greco, API’s director of downstream and industry operations, said earlier testing showed E15 could harm valve and valve seat engine parts.
“The additional E15 testing, completed this month, has identified an elevated incidence of fuel pump failures, fuel system component swelling, and impairment of fuel measurement systems in some of the vehicles tested. E15 could cause erratic and misleading fuel gauge readings or cause faulty check engine light illuminations. It also could cause critical components to break and stop fuel flow to the engine,” Greco told reporters in a conference call. “Failure of these components could result in breakdowns that leave consumers stranded on busy roads and highways. Fuel system component problems did not develop in the CRC tests when either E10 or E0 was used. It is difficult to precisely calculate how many vehicles E15 could harm. That depends on how widely it is used and other factors. But, given the kinds of vehicles tested, it is safe to say that millions could be impacted.”
The American Coalition for Ethanol dismissed the CRC results, maintaining motorists have nothing to fear from ethanol in their fuel.
“This is just another ghost story, told by people who stand to lose market share when consumers finally have access to E15,” said Ron Lamberty, the group’s senior vice president. “We shouldn’t be surprised at Big Oil’s latest attempt to scare consumers — they’ve shown no shame in twisting test results to protect their market share. There is a reason that the oil companies don’t want E15 and it has everything to do with protecting the bottom line and nothing to do with protecting consumers.”
The U.S. Environmental Protection Agency last year allowed retailers to use a higher blend of ethanol in their gasoline, but E85 is not widely available in Oklahoma.
Pipeline developer TransCanada has obtained a permanent injunction against three environmental groups and dozens of activists involved in recent protests against its Gulf Coast project, a 485-mile pipeline between Cushing and the Gulf Coast.
Tar Sands Blockade, Rising Tide North America, Rising Tide Texas and 20 others agreed Friday not to trespass on TransCanada property in Oklahoma and Texas in order to avoid facing a lawsuit seeking $5 million in damages for disrupting the pipeline project.
“The permanent injunction that these protesters have now agreed to relates to TransCanada, Keystone, our affiliates and contractors. It covers existing operations, offices, construction sites, storage yards, right-of-way/easements and equipment in Texas and Oklahoma,” the company told The Oklahoman. “They cannot interfere with the use and enjoyment of our property, equipment, construction materials and facilities or prevent access to and from our properties and equipment.”
The activists who oppose the $2.3 billion pipeline contend the lawsuit was a strategic move by TransCanada to disrupt their protests, noting the Canadian company had claimed the protests had not impeded construction in any way.
Tar Sands Blockade spokesman Ramsey Sprague said the protests will continue, despite the settlement.
“TransCanada is dead wrong if they think a civil lawsuit against a handful of Texans is going to stop a grassroots civil disobedience movement. This is nothing more than another example of TransCanada repressing dissent and bullying Texans who are defending their homes and futures from toxic tar sands.”
Texas grandmother Tammie Carson, one of the defendants in the case, said she got involved on principle, but financial concerns led her to accept the settlement.
“I took action for my grandkids’ future. I couldn’t sit idly by and watch as a multinational corporate bully abused eminent domain to build a dirty and dangerous tar sands pipeline right through Texans’ backyards,” Carson said. “I had no choice but to settle or lose my home and everything I’ve worked for my entire life.”
TransCanada said Monday the Gulf Coast project is about 40 percent complete, with plans to get it into commercial operation by late this year.
Chesapeake Energy Corp. will let the U.S. Environmental Protection Agency conduct extensive tests at one of its well sites to determine if hydraulic fracturing is safe, the Wall Street Journal reported Wednesday.
The process, commonly known as fracking, is used to extract oil and natural gas from dense rock like shale, but it has been dogged by concerns that it contaminates drinking water.
Chesapeake, one of the nation’s leading oil and gas producers, will allow the EPA to sample water at one of its well sites before and after the well is drilled, an Obama administration official told the Journal.
A Chesapeake spokesman declined to comment on the report Wednesday night.
Texas-based Range Resources Corp. may cooperate with the EPA as well, according to the Journal, if liability concerns can be addressed.
Residents near a Devon Energy Corp. oil rig in southern Utah were evacuated early Tuesday after a fire filled the air with thick black smoke.
Devon spokesman Chip Minty said no one was injured after a well control issue led to the release of oil and natural gas on the rig, sparking the fire.
Utah’s KSL-TV captured video of the fire.
Minty said crews are working to extinguish the fire safely Wednesday. Once the fire is under control, officials will investigate what caused it.
Devon has been active in Utah’s Uinta Basin for some time, but Minty said the company recently began drilling operations there in hopes of increasing its oil production.
The Tar Sands Blockade has made its way back to Oklahoma.
The group intent on blocking construction of the southern leg of the Keystone XL pipeline launched its civil disobedience campaign in August, but its efforts largely have been focused in Texas.
Protesters chained themselves to equipment, took refuge in the trees and even tried taking over developer TransCanada’s offices in Houston and other cities, but the company says they have not done anything to disrupt the project.
“Once again, those who protest against the project fail to understand they are attempting to stand in the way of thousands of jobs for the best pipeline workers in the world, their actions are an unsuccessful publicity stunt designed to weaken America’s relationship with its strongest energy partner, and they seek to deny American energy producers a way to meet U.S. demand for more domestic energy,” spokesman James Prescott told The Oklahoman.
“Fortunately, their efforts have not delayed construction of Keystone Pipeline Gulf Coast Project. Everyday, 4,000 pipeliners are making progress to meet the goal of completion in mid-2013 and the start of operations by the end of the year.”
Construction of the so-called Gulf Coast project began in Oklahoma in November after TransCanada secured the necessary permits for the 485-mile pipeline, which will transport up to 700,000 barrels of crude oil a day from the storage hub at Cushing to refineries in the Houston area.
Opponents of the project insist it is an environmental disaster waiting to happen because of the toxic Canadian oil it will carry. Recently some have argued that the diluted bitumen from Canada does not fit the legal definition of crude oil.
“They lied to us about what’s going to be pumped through this pipe. They have strong-armed Oklahomans and Texans into signing contracts. Our rivers, especially the North and South Canadian that feed into Lake Eufaula, our drinking water aquifers, and our native lands are at risk, and they simply do not care,” said Earl Hatley, riverkeeper of the Grand River watershed.
On Thursday, protesters walked onto an easement in Stroud where pipe was being laid on Sac and Fox Nation land.