NEW YORK (Reuters) – The Trump Administration on Friday approved U.S. oil producer ConocoPhillips’ plan for drilling in the National Petroleum Reserve in Alaska, a wilderness area along the state’s North Slope oil fields.
The plan for the company’s Willow project allows for up to five drill sites and support facilities, including pipelines and roads to access the lease site.
The Bureau of Land Management published a final Environmental Impact Statement for project, which the agency said could produce more than 160,000 bpd over the next 30 years. If constructed, Willow will be the westernmost development on the North Slope.
The project could help offset oil production declines in the state, according to the BLM. Alaska’s oil output has dropped to 404,000 bpd from its peak of over 2 million bpd in 1988.
ConocoPhillips, Alaska’s largest oil producer by volume, pumped 218,000 bpd of oil and gas in the state during the first quarter. It cut production and spending in Alaska earlier this year and last month said it would restore some of the curtailed production.
A spokeswoman was unavailable for comment on the company’s timetable for the project.
“It provides for more throughput in the Trans Alaska Pipeline System, ultimately providing for more jobs for Alaskans and creating more revenue for the state,” BLM Alaska State Director Chad Padgett said in a statement.
ConocoPhillips is part of a consortium that owns and operates the 800-mile (1,287 km) Trans Alaska Pipeline that moves oil from Prudhoe Bay on the North Slope of Alaska, where most of the state’s oil production is concentrated, south to the Port of Valdez.
(P&GJ) — The U.S. Department of the Interior has approved the issuance of rights-of-way (ROW) permits for the Alaska Liquified Natural Gas (Alaska LNG) Pipeline Project across federal lands.
The approval, which adopts the Federal Energy Regulatory Commission’s (FERC) environmental impact statement (EIS), establishes the environmental protections for wetlands, wildlife, recreation access and other resources that will govern access for a liquified natural gas pipeline; a major step in the permit process for the project.
The Alaska Gasline Development Corporation is seeking permits to construct and operate the Alaska LNG project, which would transport natural gas for export to foreign markets and provide for in-state gas deliveries.
Access across Federal lands is required for approximately 230 miles of the 807-mile pipeline.
These lands are mostly managed by the Bureau of Land Management (BLM), and most of the affected acreage is in the Dalton Highway/Trans-Alaska Pipeline corridor, which is managed primarily as a utility and transportation corridor.
The project includes a gas treatment plant at Prudhoe Bay, a buried 42” diameter pipeline, and a liquefaction facility and export terminal in Nikiski, Alaska.
“With this approval, the Trump Administration is keeping its commitment to work with local governments and partners,” said Principal Deputy Assistant Secretary for Land and Minerals Management Casey Hammond.
The National Parks Service (NPS) is issuing a right-of-way for the approximately six-mile portion of pipeline within a non-wilderness area of the Denali National Park and Preserve (DNPP). The route selected through the park is near the existing transportation corridor (the Parks Highway and Alaska Railroad extend across this area of the park), which limits impacts to park viewsheds and overall acreage of wetlands and reduces the need for additional roads and their associated impacts.
The Denali National Park Improvement Act of 2013, as amended by the John D. Dingell, Jr. Conservation, Management, and Recreation Act of 2019, authorized a right-of-way permit for the natural gas transmission pipeline in non-wilderness areas within Denali National Park.
Per the Act, the NPS may only issue a right-of-way permit consistent with the laws and regulations governing these right-of-way permits in the national park system, and only if the right-of-way is the route through Denali Park with the least adverse environmental effects.
Despite a victory last month at the U.S. Supreme Court over a critical permit, Dominion Energy and Duke Energy said in a news release that “recent developments have created an unacceptable layer of uncertainty and anticipated delays” for the 600-mile (965-kilometer) project designed to cross West Virginia and Virginia into North Carolina.
The companies said a recent pair of court rulings that have thrown into question a permitting program used around the nation to approve oil and gas pipelines and other utility work through wetlands and streams presented “new and serious challenges.”
“This new information and litigation risk, among other continuing execution risks, make the project too uncertain to justify investing more shareholder capital,” the news release said.
The massive infrastructure project, announced with much fanfare in 2014, had drawn fierce opposition from many landowners, activists and environmental advocates, who said it would damage pristine landscapes and harm wildlife. Getting the project built would have involved tree removal and blasting and leveling some ridgetops as the pipe, 42 inches (1 meter) in diameter for much of its path, crossed mountains, hundreds of water bodies and other sensitive terrain and burrowed underneath the Appalachian Trail.
Opponents also questioned whether there was sufficient need for the gas it would carry and said it would further encourage the use of a fossil fuel at a time when climate change makes a shift to renewable energy imperative.
Legal challenges brought by environmental groups prompted the dismissal or suspension of numerous permits and led to an extended delay in construction. The project was years behind schedule and the anticipated cost had ballooned from the original estimate of $4.5 billion to $5 billion.
Reaction poured in Sunday from the project’s opponents, who lauded the demise of the project.
“If anyone still had questions about whether or not the era of fracked gas was over, this should answer them. Today is a historic victory for clean water, the climate, public health, and our communities,” Sierra Club Executive Director Michael Brune said in a statement.
The project’s supporters said the pipeline would create jobs, help aid the transition away from coal and lower energy costs for consumers. Economic development officials in distressed parts of the three states it would run through had hoped that the greater availability of natural gas would help draw heavy manufacturing companies.
“Unfortunately, today’s announcement detrimentally impacts the Commonwealth’s access to affordable, reliable energy,” the Virginia Chamber of Commerce said in a statement. “It also demonstrates the significant regulatory burdens businesses must deal with in order to operate.”
U.S. Energy Secretary Dan Brouillette said in a statement the project was killed by the “well-funded, obstructionist environmental lobby.”
“The Trump Administration wants to bring the benefits of reliable and affordable energy of all kinds to all Americans,” Brouillette said. “Unfortunately, the same can’t be said for the activists who killed this project.”
Separately, Dominion, which is headquartered in Richmond, Virginia, and serves more than 7 million customers in 20 states, announced it had agreed to sell “substantially all” of its gas transmission and storage segment assets to an affiliate of Berkshire Hathaway. The transaction was valued at $9.7 billion, the company said.
The assets involved in the sale include more than 7,700 miles (12,300 kilometers) of natural gas storage and transmission pipelines and about 900 billion cubic feet of gas storage that Dominion currently operates, the company said.
Duke, which is headquartered in Charlotte, North Carolina, is one of the country’s largest energy holding companies.
Duke has previously pledged to reach net-zero carbon emissions from its electric generation by 2050, and Dominion has committed to net-zero greenhouse gas emissions by the same year.
A third partner in the Atlantic Coast Pipeline, Southern Company, sold its small stake in the project earlier this year to Dominion, the lead developer. Dominion had asserted its commitment to seeing the project through as recently as mid-June, when it asked federal regulators for an extension of time to get the project into service.
“We regret that we will be unable to complete the Atlantic Coast Pipeline,” Dominion CEO Tom Farrell and Duke CEO Lynn Good said in a joint statement. “For almost six years we have worked diligently and invested billions of dollars to complete the project and deliver the much-needed infrastructure to our customers and communities.
American Petroleum Institute President and CEO Mike Sommers and North America’s Building Trades Unions President Sean McGarvey issued a joint statement Sunday night in response to the project cancellation:
“The cancellation of the Atlantic Coast Pipeline sets America back by denying working families businesses access to affordable and cleaner U.S. natural gas and halting thousands of middle-class sustaining jobs,” they said.
“Like too many shovel-ready projects before it, the Atlantic Coast Pipeline faced legal and permitting challenges waged without merit by activists, and these challenges ultimately cost Americans along its route the environmental, employment, and economic benefits that modern pipeline projects bring.”
DENVER (Reuters) – A Colorado environmental group dropped plans to place an anti-fracking measure on the state’s November ballot citing the COVID-19 pandemic, the second state initiative to be put off this year over virus worries.
The group, Colorado Rising, had been exploring several ballot initiatives to place more stringent regulations on oil and gas drilling in Colorado, the fifth-largest U.S. oil-producing state, after its 2018 effort failed.
A California initiative seeking to raise the state’s cap on medical pain and suffering damages to $1.2 million from $250,000 was pushed to 2022 over the pandemic.
The group leading the initiative, Consumer Watchdog, collected signatures but will defer filing so voters do not have to make decisions amid the health crisis, President Jamie Court said.
“We have concerns about volunteers,” said Joe Salazar, Colorado Rising’s executive director, referring to the Covid-19 pandemic. He added, “we’ve run out of time” to employ electronic gathering methods, the rules for which are still being developed by the state.
Colorado Rising was behind a 2018 initiative proposing to increase the distance between new oil and gas drilling and public parks and schools.
That measure drew fierce opposition from oil companies that spent millions of dollars to block it, arguing it would hurt the state’s economy. It failed with only 43% votes in favor.
The group’s decision comes as the U.S. oil industry is scaling back drilling due to record inventories, falling demand and prices amid the pandemic. The number of fracking fleets working in the United States has fallen to 58 from more than 400 a year ago, according to consultancy Primary Vision.
Denver-based Liberty Oilfield Services, a fracking provider, cut nearly 50% of its staff, and shale producer Whiting Petroleum filed for bankruptcy. Colorado’s active frack units have fallen to roughly one from nine in mid-April.
Reporting by Liz Hampton; Editing by Stephen Coates
Washington — A coalition of environmental groups opened June 1 a new front in their legal war against the 600-mile, 1.5 Bcf/d Atlantic Coast Pipeline project, contending that a supplemental environmental impact statement is needed.
The action comes as lead developer Dominion Energy already is laboring to get the project back into construction after a series of legal setbacks. For instance, it is hoping for a positive US Supreme Court decision soon to help reinstate permission vacated by a federal circuit court for the pipeline to cross the Appalachian Trail.
The project is intended to move Appalachian gas to mid-Atlantic markets.
Should the developer prevail in the Supreme Court, it faces a possible new avenue of litigation in the form of a roughly 4,000-page filing posted on the Federal Energy Regulatory Commission’s website June 1 by Southern Environmental Law Center, Appalachian Mountain Advocates and Chesapeake Bay Foundation on behalf of a coalition of conservation groups.
The groups argued in the filing that a supplemental EIS is needed in light of new information that has come to light since FERC issued an EIS for the pipeline project in 2017, and given upcoming FERC decisions on key matters such as whether to extend certificate authorization for the project beyond the October expiration date and whether to lift FERC’s existing stop-work order on construction.
Part of the groups’ rationale for a new review is that the region’s energy infrastructure has undergone a dramatic shift away from gas-fired power, while the cost of the pipeline has ballooned.
“In January 2020, Virginia — the site of over half of the ACP’s proposed route — told the Supreme Court that in light of the mounting evidence that the pipeline is not needed, the ACP threatens Virginia’s natural resources without clear corresponding benefits,” they wrote.
New data for FERC
And they said new information has come to light that they contended must be considered under the National Environmental Policy Act, involving endangered species along the pipeline route, expanded scientific information about climate change, and changing circumstances related to cumulative impacts from projects in the area.
In addition, they argued there have been substantial erosion, sedimentation and slope failures since 2017 along the ACP route and other pipelines in mountainous terrain, undermining FERC’s conclusions about effectiveness of mitigation in its documents. In light of the recently narrowed definition of waters of the US, some water bodies crossed by the project, including wetlands, may be at greater risk if permitting authorities no longer consider them within the purview of the Clean Water Act, they said.
“A substantial regulatory change that calls into question key assumptions about water quality protections compels supplementation of the EIS,” they wrote.
In response to the filing, Dominion spokeswoman Ann Nallo said many of the concerns raised by the environmental groups already have been addressed publicly and others are being addressed through ongoing permitting processes with the agencies.
For example, ACP is working with the US Fish and Wildlife Service on a new biological opinion that will include the most up-to-date information on the impacted species.
The project is needed more than ever for the region’s economy and path to clean energy, she argued.
“The ACP will also support our region’s transition from coal and the rapid expansion of renewables, both of which are essential to Dominion Energy’s and Duke Energy’s plans to achieve net zero emissions by 2050,” she said.
ClearView Energy Partners, in a research note, said it expects the Supreme Court to remove one obstacle to the Appalachian Trail crossing but emphasized that others remained for the project. ClearView suggested the environmental groups may be preparing to ask the DC Circuit Court of Appeals to stay FERC’s certificate authorization when the court brings a legal challenge related to the FERC authorization out of abeyance.
“Given the strong consensus that the Supreme Court may reverse the 4th Circuit, we see this call to issue a supplemental EIS as another avenue through which the project’s opponents intend to delay, if not try to halt, the project altogether.”
WASHINGTON (Reuters) — The American Petroleum Institute oil and gas industry group said on Wednesday that it does not see a significant threat to the U.S. energy supply chain from the coronavirus pandemic.
Oil and gas companies are implementing contingency plans focused on ensuring continuity of supplies to market and preventing the spread of the virus to workers and the public, Suzanne Lemieux, API’s head of operations security, told reporters in a conference call with representatives of several energy industry trade groups.
“The supply chain is operating as normal now and you’re going to see that continuing unless there is any additional … shelter-in-place restrictions or larger outbreaks,” Lemieux said. “This is not a new planning scenario for a lot of our member companies, but we are trying to be as cautious as possible,” she said, adding that many of its members have dealt with previous outbreaks such as Ebola, SARS and H1N1.
Troutman Sanders, a law firm that advises pipeline companies, said in a blog this week that coronavirus may cause issues with “maintaining sufficient adequately trained and qualified staff for control rooms or field positions responsible for inspection and maintenance” and that the federal government has issued compliance waivers to companies in the past.
John Stoody, a vice president at the Association of Oil Pipelines, said companies were working with the U.S. Pipeline and Hazardous Materials Safety Administration on whether waivers would be necessary for work rules on pipeline control rooms.
Stoody said such communications with federal officials are normal during hurricanes and other emergencies. “So far our partners have been great in acknowledging the potential need,” for waivers, or other measures, he said.
Lemieux said the API would work with the Energy Department and Environmental Protection Agency on whether waivers to environmental regulations were needed to help get fuel to market.
“We’re still speaking with our members to understand what their limitations are,” she said.
The energy groups also said many companies have ability to move workers from other parts of states or across states if employees in one place get coronavirus or are quarantined by it.
Andrew Lu, a managing director of operations at the American Gas Association, said that natural gas utilities can move employees and are also looking at the possibility of using contractors to backfill positions if needed, or calling on mutual personnel or equipment assistance from other utilities.
The Bureau of Land Management published a final Environmental Impact Statement for project, which the agency said could produce more than 160,000 bpd over the next 30 years. If constructed, Willow will be the westernmost development on the North Slope.
(P&GJ) — Several natural gas pipeline upgrades are either planned or under construction in New England, which will increase deliverability into the region over the next several years, according to data from the U.S. Energy Information Administration (EIA).
According to the EIA’s tracking of natural gas pipeline projects, four pipelines are expected to increase compression in their system by 2023, adding more than 350 million cubic feet per day (MMcf/d) of natural gas pipeline capacity into the region.
As of the end of 2019, EIA estimates pipeline capacity into New England from both Canada and New York was 5,200 MMcf/d. During days of peak demand in the winter, most of this capacity is fully utilized, which can lead to spikes in spot natural gas and, in turn, electricity prices. These projects aim to ease the pipeline constraints into New England.
The largest of these pipeline upgrade projects, which submitted its application to the Federal Energy Regulatory Commission (FERC) on February 4, is Iroquois pipeline’s Iroquois Enhancement by Compression Project. By increasing the horsepower at three compression stations in New York and Connecticut, Iroquois pipeline will increase its capacity by 125 MMcf/d.
The border crossing at Waddington in upstate New York, which connects to the TransCanada Mainline, is already designed to supply these additional volumes.
If approved, the project is expected to start construction in spring 2023 and be placed in service by November of that year.
On the Portland Natural Gas Transmission System, two projects will increase the volumes of Canadian natural gas imports received from the TransQuébec and Martimes pipelines at Pittsburg, New Hampshire: Portland Xpress Project Phase III, adding 24 MMcf/d capacity in 2020, and the Westbrook Xpress Project Phase II, adding 63 MMcf/d after its expected completion in 2021.
The previous phases of both projects have already entered service, and both projects only require modifications or upgrades at existing compressor stations.
In addition, two other projects will increase natural gas deliverability to New England from New York:
Algonquin’s Atlantic Bridge Phase II project will add 92.7 MMcf/d of additional capacity further into New England when the Weymouth compressor station is completed in Massachusetts. The project, which has faced numerous delays, is expected to enter service either later in 2020 or in 2021.
Tennessee Gas Pipeline’s Station 261 Upgrade Projects will provide an additional 72 MMcf/d of capacity. This project is expected to enter service in 2020 and involves upgrading compressor station 261 and 2.1 miles of looping adjacent to the site.
WINNIPEG, Manitoba (Reuters) — Canadian pipeline company TC Energy Corp said it planned to start pre-construction work in February for its Keystone XL oil pipeline, the start of what it expects to be a busy work schedule for the long-delayed project.
TC said in a filing with U.S. District Court in Montana that in February it would start mobilizing heavy construction equipment in Montana, South Dakota and Nebraska, and aim to begin building a 1.2-mile (1.93 km) segment spanning the U.S.-Canada border in April.
Work on the border-crossing segment is subject to receiving federal approvals, including a right-of-way and temporary use permit, TC said.
The $8 billion Keystone XL project would carry 830,000 bpd of oil sands crude from Alberta to the U.S. Midwest and then on to the Gulf Coast. It has been delayed for more than a decade by opposition from landowners, environmental groups and tribes, and after former U.S. President Barack Obama rejected the project.
The State Department has yet to issue a final environmental impact statement. A judge ruled in November 2018 the agency had not conducted an adequate review of the pipeline.
U.S. President Donald Trump in March last year signed a new permission for the pipeline, a move in his administration’s pursuit of “energy dominance,” or maximizing production of oil, gas and coal for domestic use and exports.
Congested pipelines have resulted in lower Canadian prices and government-ordered production curtailments in the province of Alberta.
“Keystone XL is crucial in building market access for Alberta, ensuring high-quality Canadian oil that can be relied upon throughout North America,” Alberta Energy Minister Sonya Savage said in a statement, adding that she is pleased with TC’s construction schedule.
TC said it plans to start building pumping stations along the pipeline route in June. Work on a pipeline segment in Nebraska would also start in June, followed by the start of construction of segments in Montana and South Dakota in August.
The schedule hinges on starting to mobilize equipment in February, TC said. Work will continue in 2021.
WASHINGTON (Reuters) — The Trump administration on Thursday unveiled a plan to speed permitting for major infrastructure projects like oil pipelines, road expansions and bridges, one of the biggest deregulatory actions of the president’s tenure.
The plan, released by the White House Council on Environmental Quality (CEQ), would help the administration advance big energy and infrastructure projects like the Keystone XL oil pipeline or roads, bridges and federal buildings that President Donald Trump and industry groups complained have been hampered by red tape.
“For the first time in over 40 years today we are issuing a new rule under the National Environmental Policy Act (NEPA) to completely overhaul the dysfunctional bureaucratic system that has created these massive obstructions,” Trump said at the White House on Thursday.
The proposal to update how the NEPA, the 50-year bedrock federal environmental law, is implemented is part of Trump’s broader effort to cut regulations and oversight to boost the industry.
“This proposal affects virtually every significant decision made by the federal government that affects the environment,” Interior Secretary David Bernhardt said, adding that the NEPA reform would be the “most significant deregulatory proposal” of the Trump administration.
The proposed rule says federal agencies would not need to factor in the “cumulative impacts” of a project, which could include its impact on climate change, making it easier for major fossil fuel projects to sail through the approval process and avoid legal challenges.
CEQ chair Mary Neumayr told reporters that the agency will weigh feedback during the rule’s comment period on whether or how to more explicitly address climate impacts.
The proposal would also put one federal agency in charge of overseeing the review process, instead of giving multiple agencies oversight of the process and set a two-year deadline for environmental impact studies to be completed and a one-year deadline for less rigorous environmental assessments.
Trump’s efforts to cut regulatory red tape have been praised by the industry. But they have so far largely backfired by triggering waves of lawsuits that the administration has lost in court, according to a running tally by the New York University School of Law’s Institute for Policy Integrity.
Over the last few years, federal courts have ruled that NEPA requires the federal government to consider a project’s carbon footprint in decisions related to leasing public lands for drilling or building pipelines.
Other proposed changes include widening the categories of projects that can be excluded from NEPA altogether. If a type of project got a “categorical exclusion” from one agency in the past, for example, it would automatically be excluded from review by other agencies, according to the plan.
According to CEQ, the average length of a full-blown Environmental Impact Statement is currently 600 pages and takes 4.5 years to conclude. U.S. federal agencies prepare approximately 170 such assessments per year.
Trump, a commercial real estate developer before becoming president, frequently complained that the NEPA permitting process took too long.
“It’s big government at its absolute worst,” Trump said of NEPA.
Some of the country’s biggest industry groups, including the Chamber of Commerce and the American Petroleum Institute, also have complained about lengthy permitting delays.
Environmental groups warned the plan will remove a powerful tool to protect local communities from the adverse impacts of a hastily designed and reviewed project.
“Today’s destructive actions by Trump, if not blocked by the courts or immediately reversed by the next president, will have reverberations for decades to come,” said Rebecca Concepcion Apostol, U.S. program director at Oil Change International, an environmental group.
The plan will go through a 60-public comment period before being finalized.
Environmental groups are expected to challenge the final proposal.
“If the regulations announced today drive agencies to diminish the extent or quality of their reporting, federal courts may very well conclude that their reports do not comply with the law,” said Notre Dame Law School Professor Bruce Huber.