WASHINGTON (Reuters) — The head of the U.S. Senate energy committee, Joe Manchin, on Tuesday urged President Joe Biden to reverse his opposition to the Keystone XL pipeline, saying the project provides union jobs and is safer than transporting the oil via trucks and trains.
Biden revoked a permit for the pipeline which would transport 830,000 barrels a day of carbon-intensive heavy crude from Canada’s Alberta to Nebraska. It was part of a flurry of Biden’s executive orders aimed at curbing climate change.
In a letter to fellow Democrat Biden, the West Virginia senator said that even without the pipeline, the oil would still find its way to the United States by rail and truck, and pointed to U.S. data showing those methods result in more spills than pipelines.
“Pipelines continue to be the safest mode to transport our oil and natural gas resources and they support thousands of high-paying, American union jobs,” Manchin said.
Opponents of TC Energy Corp’s pipeline project say building such infrastructure would lock in decades of dependence on oil, making it harder to transition to clean energy.
Manchin said he supports “responsible” energy infrastructure development including the Mountain Valley pipeline, which would take natural gas from Manchin’s state to Virginia.
That project, led by Equitrans Midstream Corp, is one of several pipelines that have been delayed by regulatory and legal fights with states and environmental groups.
Fourteen attorneys general, led by Austin Knudsen of oil-producing Montana, also urged Biden in a separate letter to reverse his decision on the Keystone permit.
Manchin’s support for big pipelines underscores the difficulty that Biden could have moving wide-ranging climate legislation through Congress given Democrats have only the slimmest possible majority in the Senate.
Opponents of the Enbridge Line 3 replacement project, led by the Red Lake Band of Chippewa and White Earth Band of Ojibwe, said in their petition that construction would destroy land that is protected by treaty agreements and would violate cultural and religious rights.
Enbridge said the petition had no merit and did not “recognize the exhaustive and meticulous review” of the project.
The Minnesota Public Utilities Commission on Dec. 9 denied the tribes’ motion to halt construction and on Dec. 23 denied a petition for reconsideration of that decision. Other cases seeking to halt the project remain in the appeals court and the tribes had asked the court to intervene in the meantime.
Line 3 starts in Alberta, Canada, and clips a corner of North Dakota before crossing northern Minnesota en route to Enbridge’s terminal in Superior, Wisconsin. The 337-mile line in Minnesota is the last step in replacing the deteriorating pipeline that was built in the 1960s.
Construction began in early December.
Minnesota’s 1837, 1854 and 1855 Ojibwe treatiesExplained
Reuters) — Alaska wants to start on the first phase of the state’s liquefied natural gas (LNG) export plant and pipeline project by working with a private firm seeking to build a natural gas pipeline from the North Slope to Fairbanks.
The proposed $5.9 billion gas pipe would run roughly 500 miles (805 kilometers) from Prudhoe Bay to Fairbanks and could start delivering gas into central Alaska in 2025, according to a report Frank Richards, president of the Alaska Gasline Development Corp (AGDC), presented to the board on Thursday.
The report, which was supported by the board, said the companies would seek federal stimulus or infrastructure funding to help cover the cost of the first phase and attract outside investment.
Richards told local media the company would look for about 75% of the cost of the first phase to come from federal funds, according to an article in the Canadian Press.
The total $38.7 billion project includes an 807-mile (1,300-km) pipeline with the capacity to transport about 3.3 billion cubic feet per day from the North Slope to a liquefaction plant in Nikiski on the Kenai Peninsula.
The LNG export plant and pipeline project have been talked about for a long time. Alaska signed an agreement with major oil and gas companies to build the project in 2014, but the state ended up taking over the project in 2016 after the North Slope oil companies backed out.
Since then, AGDC received federal authorization to build the project in May 2020 and signed agreements with BP PLC and Exxon Mobil Corp to help advance its development.
BP and Exxon produce massive amounts of oil in Alaska and have discovered huge gas resources that are stranded in the North Slope. Alaska LNG would allow that gas to access markets around the world.
WASHINGTON (Bloomberg) –President Joe Biden is calling for sweeping investment in electric vehicles, renewable power and the electric grid as part of a broad blueprint to bolster the U.S. economy while combating climate change.
The president’s plans, part of a $2.25 trillion infrastructure and stimulus blueprint he is set to unveil in Pittsburgh on Wednesday, are meant to catalyze investments in a clean energy economy and encourage low-emission technology necessary to constrain global warming.
Biden’s initiative would give a 10-year extension to tax credits that have been a boon to wind, solar and other renewable energy projects. His plan, which requires congressional approval, would also make those clean energy tax credits refundable — a so-called direct-pay option that developers have sought as tax equity financing has dried up.
Backers of the extension argue the historically unpredictable nature of the tax credits have rendered them less effective and insisted that consistency is necessary to propel renewable power projects.
“It’s that type of long-term reliability that we need as industry,” Suzanne Leta, head of policy and strategy at SunPower Corp., said in an interview Tuesday. “The stops and starts of the past should not be the way forward for this administration or Congress.”
Biden is also asking Congress to dedicate spending to electric vehicle rebates, charging ports and electric school buses in a quest to drive motorists away from conventional, gasoline-powered automobiles. Some $174 billion in government funding would go to the electric vehicle initiatives, according to a White House fact sheet summarizing the Biden plan.
Under Biden’s blueprint, Congress is also being asked to sustain tax incentives that encourage more motorists to buy electric vehicles. Those tax credits are currently valued at as much as $7,500 for the purchase of an electric vehicle. But Tesla Inc. and General Motors Co. have already passed an existing 200,000-per-manufacturer ceiling at which the value of those credits phases down.
Biden is asking Congress to “give consumers point-of-sale rebates and tax incentives to buy American-made EVs, while ensuring that these vehicles are affordable for all families and manufactured by workers with good jobs,” the White House said.
Senator Debbie Stabenow and Representative Dan Kildee, both Michigan Democrats, are working with the White House and Democratic leadership on a plan to do away with the 200,000-vehicle ceiling. Another possible change includes better targeting the credit to middle- and lower-income motorists — a shift that was part of the Biden campaign’s tax plans, according to the Tax Policy Center, which analyzed them last year.
Biden is also seeking an expansion of a tax credit that supports the underground storage of carbon dioxide, which is popular with both environmentalists and oil companies. According to the White House summary, Biden’s plan would revamp the carbon-capture tax credit so it benefits retrofits of existing power plants, technology directly capturing greenhouse gas emissions from the air and hard-to-decarbonize industrial sectors, such as steel and cement making.
Electric grid improvements are also on Biden’s agenda, which envisions the creation of an investment tax credit focused on electric transmission, as well as permitting changes to promote the siting of new power lines along roads and railways. The tax credit would help encourage the buildout of some 20 gigawatts of high-voltage capacity power lines, according to the White House.
WASHINGTON (Reuters) — U.S. Secretary of State Antony Blinken said in an interview broadcast on Sunday that it was ultimately up to those building the Nord Stream 2 natural gas pipeline whether to complete it despite opposition from Washington.
On Wednesday, Blinken said he had told his German counterpart that U.S. sanctions against the pipeline from Russia to Germany were a real possibility and there was “no ambiguity” in American opposition to its construction.
Because the pipeline would run from Russia to Germany under the Baltic Sea, bypassing Ukraine, critics argue that it would deprive Kiev of lucrative transit revenues and potentially undercut Ukrainian efforts to counter Russian aggression.
The Kremlin says the $11 billion venture led by Russian state energy company Gazprom is a commercial project, but several U.S. administrations have opposed the project.
Asked if there was anything the United States could do to stop the pipeline, Blinken told CNN in an interview broadcast on Sunday: “Well, ultimately that is up to those who are trying to build the pipeline and complete it. We just wanted to make sure that our … opposition to the pipeline was well understood.”
VILNIUS (Reuters) — Lithuanian state-controlled energy company Ignitis Group will start supplying liquefied natural gas (LNG) to Poland next year when a new pipeline between the two countries comes online, its CEO said on Monday.
The pipeline between Poland and Lithuania, called GIPL, is due to be completed by December 2021 and will also give Finland, Estonia and Latvia access to pipeline gas from continental Europe. The region currently imports pipeline gas from Russia and LNG via an import terminal at Lithuania’s Klaipeda port.
“As GIPL comes online, we expect to begin gas exports to Poland, similarly to what we did in Finland,” Ignitis Group CEO Darius Maikstenas told an online press conference on Monday.
“Potentially, most of the gas would be LNG from the port of Klaipeda,” he said.
Some of the LNG could be supplied via Poland to other markets, such as Ukraine, Maikstenas said.
Lithuania’s energy minister has previously said that the new pipeline would also be used to supply LNG from Klaipeda to a planned gas-fired power station to be built in northeast Poland.
The Klaipeda terminal imported 21.9 TWh of LNG in 2020, Ignitis Group said in its annual report, or half of its annual capacity of 39 TWh.
Poland’s LNG import terminal in Swinoujscie imported 39.9 TWh, Ignitis Group said. In 2020, Poland signed deals to expand the terminal’s capacity by 66% by 2023, as the country prepares to cease imports of Russian pipeline gas in 2022.
Russia’s Gazprom lost a third of its share of the Finnish gas market last year, after a new pipeline made it possible to import LNG via the Baltic States.
Finland imported a total 5.8 terrawathours (TWh) of gas from the Baltic States in 2020, including 3.05 TWh from Ignitis Group, the group said.
Meanwhile, Russia’s direct gas exports to Finland dropped by 35% last year to 15.7 TWh, from 24 TWh in 2019, Gazprom’s quarterly data, published on its website, showed.
Maikstenas said he expects to keep supplies to Finland in 2021 at the “same or higher level” than 2020.
HOUSTON (Bloomberg) –Exxon Mobil erased almost every drop of oil-sands crude from its books in a sweeping revision of worldwide reserves to depths never before seen in the company’s modern history.
Exxon counted the equivalent of 15.2 billion barrels of reserves as of Dec. 31, down from 22.44 billion a year earlier, according to a regulatory filing on Wednesday. The company’s reserves of the dense, heavy crude extracted from Western Canada’s sandy bogs dropped by 98%.
In practical terms, the revision clipped Exxon’s future growth prospects until oil prices rise, costs slide or technological advances make it profitable to drill those fields. Exxon has enough reserves to sustain current production levels for 11 years, down from 15.5 years a year ago, based on Bloomberg calculations.
The pandemic-driven price crash that rocked global energy markets was the main driver of Exxon’s reserve downgrade, along with internal budget cuts that took out a significant portion of its U.S. shale assets. The oil sands have historically been among the company’s higher-cost operations, making them more vulnerable to removal when oil prices foundered.
The reserves accounting doesn’t mean Exxon is closing up shop or walking away from Canada because the company can bring them back onto its ledger as crude prices rise.
“Among the factors that could result in portions of these amounts being recognized again as proved reserves at some point in the future are a recovery in the SEC price basis, cost reductions, operating efficiencies, and increases in planned capital spending,” Exxon said in the filing.
The blow to future production potential comes just weeks after Exxon posted its first annual loss in at least four decades. Exxon shares were little changed at $56.85 in after-hours trading and have advanced 38% this year.
The Wall Street Journal reported last month that Exxon was being investigated by the U.S. Securities and Exchange Commission for allegedly overvaluing a key asset in the Permian Basin. Exxon has said the allegations are demonstrably false.
Exxon previously flagged that low prices could wipe as much as one-fifth of its oil and gas reserves from its books but steep cuts in drilling expenditures also imperil the assets its able to keep on the books.
Chief Executive Officer Darren Woods has prioritized high-return projects such as offshore oil in Guyana, shale in the Permian Basin as well as chemical and gas operations along the Gulf Coast in order to defend the company’s dividend. This year’s rally in oil prices will help bolster Exxon’s cash generation, which in recent quarters has failed to cover both its capital spending and dividend, leading to an increase in debt to almost $70 billion.
(Reuters) — Texas oil refineries shut by cold-weather disruptions may take several weeks to resume normal operations, industry experts said on Friday, helping to push up fuel prices.
About a fifth of oil processing was halted by power outages, shortages of natural gas and water this week. Average retail gasoline prices rose 6 cents on the week and are up 9 cents in the last month, to $2.33 a gallon, the American Automobile Association said. It forecast inventories would fall, keeping prices higher through month’s end.
“We are 2-1/2 to three weeks away from restoring most operations” at affected refineries, said Andrew Lipow, president of Houston-based consultancy Lipow Oil Associates.
The refinery shutdowns will depress prices for U.S. crude oil and widen the spread between U.S. and Brent crude, Paul Sankey of independent energy researcher Sankey Research said in a note. He forecast “heavy pressure on US crude prices from returning supply into no demand from a major refining outage that will last 2-3 weeks.”
U.S. crude futures fell 1.5% on Friday, to $59.60 a barrel, as producers signaled plans to restart production. U.S. crude is up 22% year to date. U.S. gasoline futures on the New York exchange rose to $1.805 per gallon.
“The spreads tell me that crude oil will come back quicker” than refining margins, said Robert Yawger, director of energy futures at Mizuho Securities USA.
Refinery operators are assessing facilities and may need to repair any damage to pipelines, cooling towers and other equipment before slowly and carefully restarting, Lipow said.
Shortages and high prices for natural gas have also affected refiners. Texas officials this week asked natural gas suppliers to prioritize deliveries to electric utilities and residential customers, leaving less of the fuel to supply refinery operations, Lipow said.
Slowly resuming electricity and water needed to power the plants also is likely to cause delays at Texas Gulf Coast refineries beyond what is normal after business-pausing natural disasters such as hurricanes, he said.
(Reuters) — Virginia natural gas company RGC Resources Inc’s chief executive said on Friday that the joint venture building the $5.8 billion-$6.0 billion Mountain Valley gas pipeline from West Virginia to Virginia expects to complete the project by the end of 2021.
That matches what other companies involved in the project have said since they decided in January to give up on a nationwide permit that covers all stream crossings and instead seek individual permits to cross the remaining roughly 430 streams.
“MVP (Mountain Valley Pipeline) believes that pursuing the individual permit process … is the most efficient regulatory path to completing the remaining components of the project,” RGC CEO Paul Nester told analysts on a call.
Many analysts have said MVP was right to give up on the nationwide permit, which they said was facing serious environmental court challenges, but noted the pipeline will likely not enter service until 2022 because it will take considerable time to receive the remaining stream crossing and other permits.
MVP is one of several oil and gas pipelines delayed in recent years by regulatory and legal fights with states and environmental groups that found problems with permits issued by the Trump administration.
When construction started in February 2018, MVP was expected to cost about $3.5 billion and be completed by the end of 2018.
In answer to questions about whether President Joe Biden’s administration could stop MVP in a way similar to what it did to TC Energy’s Keystone XL oil pipeline, Nester said, “We don’t believe that the current administration has the legal standing to stop the project.”
Nestor noted the 303-mile (488-kilometer) project was “roughly 92% complete” with “more than 264 miles of pipe welded and in place.”
MVP is owned by units of Equitrans Midstream, NextEra Energy, Consolidated Edison, AltaGas and RGC.
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.