US seeks to speed permits by limiting reviews

  • Market: Coal, Crude oil, Emissions, Natural gas
  • 15/07/20

President Donald Trump's administration today finalized a rule that attempts to expedite approval of federal oil and gas leases, pipelines, highways and other infrastructure by curtailing environmental reviews.

The overhaul aims to simplify reviews under the National Environmental Policy Act (NEPA) so that federal permitting of pipelines and other projects could be done within two years. Critics say the administration is trying to gut a law meant to require regulators to take a "hard look" at how approving a project would affect communities and the environment.

NEPA has become a growing vulnerability for the oil sector. A judge last week ordered the 530,000 b/d Dakota Access crude pipeline to close due to flaws with its environmental review. The 830,000 b/d Keystone XL crude pipeline was unable to start construction in 2018 for similar reasons. A judge last year blocked hundreds of drilling leases in Wyoming for incomplete climate change studies.

Trump today said the "top-to-bottom overhaul" of environmental reviews would remove roadblocks to building infrastructure and provide billions of dollars in cost savings. Trump has regularly criticized environmental reviews as unnecessary and too costly, drawing on his previous career as a real estate developer where his projects were subject to complex permitting requirements.

"I have been wanting to do this since day one," Trump said.

The US enacted the statute in 1970 with a broad mandate for the government to study how its actions could affect the environment before making a decision. White House regulations and decades of court rulings have fleshed out what the law requires, resulting in reviews that can be hundreds of pages long and take years to complete.

The White House Council on Environmental Quality, in the changes today, is seeking to reset some of that process by issuing a rule curtailing what types of reviews are required. The changes would allow reviews to focus narrowly on near-term environmental effects, such as soil erosion from constructing a pipeline, while avoiding the study of long-term effects such as how burning fossil fuels transported by a pipeline could affect climate change.

Oil groups cheered the overhaul. The changes are "desperately needed," American Petroleum Institute president Mike Sommers said, and would "make sure that job-creating infrastructure projects get off the drawing board and into development." Independent Petroleum Association of American president Barry Russell said the revisions would provide "needed certainty" to businesses.

The NEPA changes are coming too late to have an effect on the Trump administration's approval of projects such as the Dakota Access pipeline or its decision to allow oil and gas development within the Arctic National Wildlife Refuge in Alaska. And the changes are likely to increase uncertainty in the near-term, as agencies figure out how to conduct reviews under the new rules. US courts might decide if the changes are lawful on a project-by-project basis.

Environmentalists are planning a major fight against the changes, which they say will be most harmful to low-income and minority communities that have used NEPA to oppose projects that would boost emissions near their neighborhoods. Critics say the government should undertake more robust reviews of whether projects would exacerbate climate change, rather than ignoring most of those effects.

"We will not allow this blatant polluter power-grab to stand," Earthjustice attorney Jan Hasselman said. "We will see them in court."

Presumed Democratic presidential nominee Joe Biden, if elected, would have a pathway to blocking the changes by undertaking a new review. If Democrats win control of the US Senate and retain control of the US House of Representatives, they could also vote to disapprove the change and quickly revert back to the earlier rules.


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27/03/24

Louisiana pipeline crossing bill nears vote: Update

Louisiana pipeline crossing bill nears vote: Update

Updates scheduled timing of vote in first paragraph. New York, 27 March (Argus) — The Louisiana state senate is scheduled to vote next week on a bill seeking to clarify pipeline servitude rights and expedite pipeline crossing disputes, advancing legislation promoted by three natural gas pipeline companies involved in a legal battle with US midstream giant Energy Transfer. Natural gas transmission projects by Williams, Momentum Midstream and DT Midstream — which aim to connect growing production out of the prolific Haynesville shale to a wave of new LNG export terminals along the US Gulf coast — have been put on hold while legal proceedings between Energy Transfer and DT Midstream play out. All three companies' proposed pipelines would cross Energy Transfer's own Tiger pipeline in northern Louisiana. The three pipeline companies' projects propose an excessive number of crossings over the Tiger line, an attorney for Energy Transfer argued in a Louisiana senate committee last week, and Energy Transfer has the servitude rights to stop them. But Energy Transfer's "unique" interpretation of the civil code on pipeline crossings is hurting the economy of Louisiana, the author of the bill , Louisiana senator Alan Seabaugh (R), said last week. By blocking the construction of new pipelines out of the Haynesville, Energy Transfer is eliminating jobs and taxes that would be created by new infrastructure, he said. Moreover, by arguing its servitude rights extend above and below its existing pipeline "to the center of the earth," Energy Transfer is "asserting a right that nobody has ever asserted before," Seabaugh said. The Seabaugh bill clarifies that, unless explicitly stated otherwise in a contract, pipeline servitude rights extend only to the physical space occupied by the pipeline and any space necessary to maintain it. The contract stipulating Energy Transfer's servitude rights for the Tiger pipeline is silent on the subject of that vertical, underground space, according to bill supporters. "This really isn't about pipeline crossings — this is about controlling market share," said Jimmy Faircloth, attorney for Momentum Midstream. But the pipeline industry has been amicably working together for decades to allow for reciprocal crossings, Energy Transfer attorney Kay Medlin said. By ripping up this convention over a dispute involving so many crossings, and forcing an expedited legal proceeding for something which "is not a minor process," the Seabaugh bill threatens an industry "that ain't broke," she said. "This legislation will break it, and you will likely spend years trying to fix it, if you ever can," Medlin said. The Seabaugh bill is a companion to two bills which passed 100-0 and 99-0, respectively, in the Louisiana House of Representatives on 21 March. Those bills seek to clarify the law on pipeline crossings and to expedite proceedings on pipeline crossing disputes. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Baltimore bridge collapse to raise retail fuel prices


27/03/24
News
27/03/24

Baltimore bridge collapse to raise retail fuel prices

Houston, 27 March (Argus) — The collapse of the Francis Scott Key Bridge in Baltimore, Maryland, is more likely to increase regional gasoline prices than diesel due to additional freight costs and certain route restrictions. Suppliers in the region have so far signaled that the effect on broader markets will be minimal, but regional prices will likely rise, especially as peak summer demand season begins with Memorial Day weekend in late May. The bridge closure could pose more problems for gasoline supply than diesel, since gasoline cannot be transported through the Fort McHenry (I-95) and Baltimore Harbor (I-895) tunnels — the two other major roads that cross the Patapsco River at Baltimore — while there are no restrictions on diesel, according to the Maryland Transportation Authority (MTA). Fuel wholesaler Global Partners said yesterday that it would like to see hours of service waivers for trucking in the region to minimize fuel supply disruption to customers, but the Federal Motor Carrier Safety Administration (FMCSA) is yet to issue one. Elevated retail prices are likely to be limited to the immediate Baltimore area but could spill over into neighboring markets should trucking markets remain tight due to rerouting, market sources told Argus . Fuel markets in eastern Maryland can be supplied by PBF's 171,000 b/d Delaware City, Delaware, refinery and two further plants in Pennsylvania — Monroe Energy's 190,000 b/d Trainer refinery and PBF's 160,000 b/d Paulsboro refinery. To the north, United Refining runs a 65,000 b/d plant in Warren, Pennsylvania, and along the Atlantic coast Phillips 66 operates the 259,000 b/d Bayway refinery in Linden, New Jersey. PBF, Monroe and United did not immediately respond to a request for comment on whether the bridge collapse is affecting refinery operations. Phillips 66 declined to comment on commercial activities. Still, the five nearby refineries — representing all the Atlantic coast's 850,000 b/d of crude processing capacity — are unlikely to see their operations curtailed by limits in shipping products to Maryland. With no refinery in the state of Maryland, most fuels are delivered to Baltimore by Gulf coast refiners on the Colonial Pipeline. Global Partners, which operates a terminal just west of the collapsed bridge, said yesterday it is primarily supplied by the pipeline and expects product flows to continue. Several terminals in the Baltimore Harbor and the nearby Port Salisbury can also receive small vessels and barges of road fuels from Delaware and Pennsylvania, according to the Maryland Energy Administration (MEA). The Port of Baltimore — which remains closed since the collapse — took delivery of 24,000 b/d of gasoline and under 2,000 b/d of distillates from barges and small vessels in 2019, about three percent of the Atlantic coast's refining capacity. "A closure of the Port of Baltimore while the Colonial Pipeline is open would not significantly disrupt fuel supply," the MEA wrote in a 2022 analysis of liquid fuels supply in the state. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Hampton Roads may have space for Baltimore coal exports


27/03/24
News
27/03/24

Hampton Roads may have space for Baltimore coal exports

Houston, 27 March (Argus) — Terminals in Hampton Roads, Virginia, may have some available capacity to take rerouted coal shipments from Baltimore, Maryland, despite increasing exports from a year earlier for the seventh consecutive month in February. Coal loadings at Hampton Roads reached an estimated 3.31mn short tons (st) (3mn metric tonnes) last month, rising 7.8pc from February 2023, according to the Virginia Maritime Association. Still, historic Hampton Roads export data going back to 1993 showed that combined shipments from the three terminals in the region peaked at 5.48mn st in April 2012, which is nearly 66pc higher than last month's exports. This suggests that Hampton Roads terminals may have capacity to load additional coal volumes that were originally booked to ship out of terminals upstream from the Francis Scott Key Bridge in Baltimore, which collapsed on Tuesday morning, closing the Port of Baltimore for an indefinite period of time. The two Baltimore coal terminals cut off by the bridge collapse, Consol Energy's Consol Marine Terminal and CSX's Curtis Bay Coal Piers, have a combined export capacity of about 34mn st. Railroad Norfolk Southern (NS), which operates the Lamberts Point terminal at Hampton Roads, said today it is working with impacted international customers and port partners to "provide alternate routing solutions." "Ports on the east coast are resilient and have the capacity to serve the flow of freight," NS said. Lamberts Point terminal handled 1.19mn st of coal in February, a 20pc jump from February 2023. Despite this increase, that is still down from the 2.18mn st exported from the terminal in April 2012. Dominion Terminal Associates (DTA) exported 1.24mn st of coal in February from the Hampton Roads area, which is down 30pc from April 2012, while exports from the nearby Pier IX terminal were down 53pc to 727,023st last month. DTA's co-owners, Alpha Metallurgical Resources and Arch Resources, and Pier IX's owner Kinder Morgan all did not respond for immediate comment. By Anna Harmon Hampton Roads coal exports in 2012 st Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Louisiana pipeline crossing bill nears senate vote


27/03/24
News
27/03/24

Louisiana pipeline crossing bill nears senate vote

New York, 27 March (Argus) — The Louisiana state senate is scheduled to vote tonight on a bill seeking to clarify pipeline servitude rights and expedite pipeline crossing disputes, advancing legislation promoted by three natural gas pipeline companies involved in a legal battle with US midstream giant Energy Transfer. Natural gas transmission projects by Williams, Momentum Midstream and DT Midstream — which aim to connect growing production out of the prolific Haynesville shale to a wave of new LNG export terminals along the US Gulf coast — have been put on hold while legal proceedings between Energy Transfer and DT Midstream play out. All three companies' proposed pipelines would cross Energy Transfer's own Tiger pipeline in northern Louisiana. The three pipeline companies' projects propose an excessive number of crossings over the Tiger line, an attorney for Energy Transfer argued in a Louisiana senate committee last week, and Energy Transfer has the servitude rights to stop them. But Energy Transfer's "unique" interpretation of the civil code on pipeline crossings is hurting the economy of Louisiana, the author of the bill , Louisiana senator Alan Seabaugh (R), said last week. By blocking the construction of new pipelines out of the Haynesville, Energy Transfer is eliminating jobs and taxes that would be created by new infrastructure, he said. Moreover, by arguing its servitude rights extend above and below its existing pipeline "to the center of the earth," Energy Transfer is "asserting a right that nobody has ever asserted before," Seabaugh said. The Seabaugh bill clarifies that, unless explicitly stated otherwise in a contract, pipeline servitude rights extend only to the physical space occupied by the pipeline and any space necessary to maintain it. The contract stipulating Energy Transfer's servitude rights for the Tiger pipeline is silent on the subject of that vertical, underground space, according to bill supporters. "This really isn't about pipeline crossings — this is about controlling market share," said Jimmy Faircloth, attorney for Momentum Midstream. But the pipeline industry has been amicably working together for decades to allow for reciprocal crossings, Energy Transfer attorney Kay Medlin said. By ripping up this convention over a dispute involving so many crossings, and forcing an expedited legal proceeding for something which "is not a minor process," the Seabaugh bill threatens an industry "that ain't broke," she said. "This legislation will break it, and you will likely spend years trying to fix it, if you ever can," Medlin said. The Seabaugh bill is a companion to two bills which passed 100-0 and 99-0, respectively, in the Louisiana House of Representatives on 21 March. Those bills seek to clarify the law on pipeline crossings and to expedite proceedings on pipeline crossing disputes. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US breaks $79/bl ceiling in latest SPR purchase


27/03/24
News
27/03/24

US breaks $79/bl ceiling in latest SPR purchase

Washington, 27 March (Argus) — President Joe Biden's administration has exceeded a price ceiling that has guided when the US government would buy crude to refill the US Strategic Petroleum Reserve (SPR), with the latest crude purchase hitting a price of $81.32/bl. The US Department of Energy (DOE) six months ago adopted a new strategy for replenishing the SPR, with a plan to use consistent monthly purchases to replace some of the 180mn bl of crude that Biden sold from the reserve in 2022 after the start of the Russia-Ukraine conflict. For months, DOE has said it would continue to buy crude so long as it was a "good deal for taxpayers," which the agency defined as a purchase price not to exceed $79/bl. But the agency's latest crude purchase, for nearly 2.8mn bl of sour crude for delivery in September, came at a cost of $225.6mn, an average price of $81.34/bl, according to data DOE recently published on its website. The crude contracts went to Macquarie Commodities Trading, Sunoco Partners Marketing & Terminals and Total's Atlantic Trading & Marketing. DOE, asked for comment about why it purchased crude in excess of its price target, said there would "likely be news coming later today." Before this week, the administration had largely adhered to its $79/bl price target to buy 24.7mn bl of crude for delivery to the SPR from January through August, with the exception of a $79.10/bl purchase for January delivery. DOE reiterated the price ceiling on 14 March, when it announced a new solicitation to buy crude, and last year had called off multiple crude solicitations when prices came in too high. DOE has previously increased its price ceiling based on shifts in the oil market. DOE in 2022 had initially targeted a purchase price of $67-$72/bl, resulting in the purchase of 6.3mn bl of crude last summer at an average price of $72.67/bl. But after rising prices put that target out of reach, DOE raised its price ceiling to $79/bl. The SPR held 363mn bl of crude as of 22 March, according to federal data. By the end of this year, as a result of crude purchases, the reserve is expected to "be back to essentially where we would have been had we not sold during the invasion of Ukraine," US energy secretary Jennifer Granholm said on 20 March, after accounting for the cancellation of 140mn bl of congressional mandated crude sales that were scheduled through 2031. With the latest crude purchase, DOE will have signed contracts to buy 32.4mn bl of crude at an average price of nearly $77/bl, of which more than 19mn bl has yet to be delivered to the SPR. Another 20mn bl of crude that oil companies and traders borrowed from the SPR in 2022 is set to be returned by year-end, which would push inventories in the reserve to above 400mn bl. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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