Regulatory certainty and approval process critical to modern pipeline development

Yesterday, the Federal Energy Regulatory Commission (FERC) lifted a stop-work order along 70 miles of the Mountain Valley pipeline route, according to an E&E News article published today. The article writes:

On Aug. 3, FERC issued a stop-work order covering the entire 303-mile pipeline route after the 4th U.S. Circuit Court of Appeals vacated federal approvals from BLM and the Forest Service allowing the project to cross the Jefferson National Forest in southern Virginia. FERC ordered Mountain Valley to submit a “stabilization plan” to address stretches where construction activities had already commenced.

FERC stated that Thursday’s decision to lift the stop-work order on the first 77 miles of the pipeline was made in order to best protect the environment from problems that could be caused by partially completed work. The article expanded on this:

[FERC] said that “allowing completion of construction, including full restoration along the right-of-way” was the best option. “Maintaining the status quo would result in significant areas being subject to erosion and soil movement for an indeterminate period, possibly negatively affecting plant and wildlife habitat and adjacent water bodies,” FERC said.

Regulatory agencies play a critical role in the development of modern pipelines. Regulators like FERC ensure that proposed infrastructure is safe, thoughtfully planned, and as least intrusive as possible on the surrounding environment. Regulatory certainty is also important, as regulations must be consistent in order for developers to adequately plan, prepare, and construct new pipelines.

Regulation continues to play a vital role in the growth of modern energy infrastructure. GAIN looks forward to the safe completion of the Mountain Valley Pipeline and its great contributions to fueling our country’s energy needs!

Good and Bad: Plenty of Natural Resources, Not Enough Pipelines

The Permian Basin in Texas and southeast New Mexico has exhibited a resurgence in oil and natural gas production the likes of which hasn’t been seen in the area since the mid-1970s. Companies are now faced with a unique problem: there is no commodity shortage, only a shortage of means to transport the oil and natural gas out of the basin and to the consumer.

The Dallas branch of the Federal Reserve estimated an increase in oil production of 34.1% during the 4th quarter of 2017 for counties in the Permian Basin while the remainder of Texas increased 9%. Natural gas is a similar story. Permian Basin counties increased output by 24.9% while Texas counties outside the basin had a decrease of production by 0.3%. A recent report from the U.S Energy Information Administration highlights the Permian region as a leader in oil and gas production, often competing in yield and growth with the Appalachia and Niobara resource fields. The rapid increase in productivity is mirrored by oil and gas rig count. In 2009 just 92 rigs operated in the Permian Basin. That number has since grown 416% to a June 2018 rig count of 475.

With new rigs come new jobs. Employment in the Permian Basin has outpaced statewide employment growth in Texas and New Mexico by 2.7% and 3.5%, respectively. Every statistic shows growth in this part of the country but that development is at risk of being stunted. The lack of infrastructure is one major source of growing pains in the Permian Basin as companies struggle to get commodity to consumer.

To ensure the most effective and safest transportation of oil and natural gas, elected officials must focus on streamlining the expansion of pipeline infrastructure from the Permian Basin to areas of need and export potential. Industry representatives are taking the Permian bottleneck very seriously. Pioneer Natural Resources Co. Chairman, Scott Sheffield, expects “Some companies will have to shut in production, some companies will move rigs away,” as current Permian pipelines are anticipated to be full for three or four months. Too much of a good thing should never be a problem, however it is being seen more and more along Permian rigs. Realistically, supplemental train and truck transport methods will not suffice in meeting growing production and demand. Pipelines are the only transit that can safely and efficiently handle current and future output volumes as business in the Permian region continues.

Pipeline shortages are not unique to the Permian Basin as natural resource booms in the Marcellus and Utica regions experience similar bottlenecks. Expanding pipeline infrastructure will benefit suppliers, refineries, distributors, and consumers. The United States will miss out on an important opportunity to assert itself in the global energy market if it cannot add the pipeline transportation component to its natural resources.

Army Corps taking their time to carefully complete thorough DAPL assessment

Today the Associated Press reported that the U.S. Army Corps of Engineers’ environmental study of the Dakota Access Pipeline will take an additional three weeks to complete. According to attorneys for the Justice Department, the Corps needs more time to review information provided by DAPL developer, Energy Transfer Partners, and the Standing Rock Sioux Tribe.

Back in June 2017, U.S. District Judge James Boasberg ruled that the Corps did not fully consider the potential impacts of an oil spill in the Missouri River, ordering the Corps to perform another environmental impact analysis. Currently the Dakota Access Pipeline is still operational as the Corps completes its job reaffirming the rule of law in this case.

We commend the Corps for devoting the necessary time and effort towards completing a thorough environmental study of the pipeline. Despite numerous legal challenges, the Corps’ diligence in its review – as well as the responsible construction and operation of Dakota Access – remain clear. GAIN looks forward to reviewing the results of the assessment and settling this matter in order to continue promoting energy infrastructure throughout the country.

Enbridge’s Line 3: Replacing old infrastructure with safer, modern technology

The Wall Street Journal’s editorial board recently published an opinion piece on the expected protests of Enbridge Energy’s Line 3 pipeline in Minnesota. Line 3 would replace an outdated pipeline built in the 1960s that has been operating at half capacity due to deterioration. Recent advancements in technology allow for much stronger, safer pipelines to be constructed, which is why Enbridge wants to modernize the route. Yet, environmental groups have already started recruiting protesters and promise to fight the project. Law enforcement and local officials fear these demonstrations may become a repeat of the prolonged Dakota Access Pipeline protests, which resulted in destruction of property, cost taxpayers millions of dollars, and ultimately delayed the completion of a much-needed component of midstream infrastructure.

Pipelines are the safest method of transportation for energy products. According to a 2017 report by the Association of Oil Pipelines and the American Petroleum Institute, pipelines deliver oil safely 99.999% of the time. The alternative to pipelines, trucks and trains, are much more high-risk. However, environmental activists refuse to acknowledge the facts and instead continue to vehemently oppose pipelines and the use of fossil fuels altogether. If these activists were truly more concerned about the environment, wouldn’t they recognize the value of pipelines over the alternatives? The editorial states:

Trucks and trains are the alternatives to pipelines, but they’re more dangerous and carbon-intensive. Between 16.5 million and 23.1 million gallons of Bakken crude pass through Minnesota by rail each day. The state’s Department of Transportation has warned that this heavy train traffic routinely delays emergency-response vehicles and “poses a threat of catastrophic fire in the event of a derailment and rupture of some of the tank cars.” A recent derailment 15 miles south of the Minnesota border spilled 230,000 gallons of oil, contaminating two rivers.

In addition to safely and efficiently transporting product, pipelines also provide great economic benefits. The editorial mentions that the project would support some 8,600 jobs and generate $20 million in property taxes during its first year. This tax revenue could benefit municipal services, including police, fire, schools, and other infrastructure.

It is time to prioritize our critical energy infrastructure. Upgrading existing pipelines, as well as constructing new ones, is key to keeping up with the shale boom and the record numbers of energy production in the United States. GAIN looks forward to the safe and efficient construction of Line 3 and the benefits it will bring to the energy industry and the local economies of the communities surrounding the pipeline.

 

To read the full editorial, click here

 

Anti-Fossil Fuel Activists Utilize Tactics to Hinder Pipeline Projects, Ignore Benefits of Strong Energy Infrastructure

GAIN Spokesman Craig Stevens recently wrote a piece published in the Flathead Beacon focusing on the importance of reliable American energy and the challenges imposed on the industry by anti-fossil fuel activists.  Stevens argues that these activists will stop at nothing to stand in the way of the country’s energy security. In one of the latest legal challenges to critical energy infrastructure, opponents raised concern over the environmental impact statement of the Keystone XL pipeline, which was completed four years ago. Stevens writes:

Policymakers would be foolish to let dogmatic opposition stand in the way of the Keystone XL in the same way. The pipeline will add $80 million in annual tax revenue for Montana and create thousands of good-paying jobs for skilled workers. The line will foster production on the Bakken shale formation by offering an on-ramp that will move as much as 100,000 barrels a day from the region.

Energy infrastructure all over the country promises similar benefits of tax revenue, job creation, and safe, efficient transport of product. It is predicted that the oil and gas industry will add nearly 1.9 million jobs by 2035, many of which will be filled by minorities and women. Additionally, building new energy infrastructure allows for more affordable fuels, stable markets, and notable economic growth. Yet with regard to these remarkable benefits, Stevens contends that these activists will not settle for anything less than a complete ban on new pipelines. He states:

Regrettably, the small but vocal fringes of the environmental movement seem to disregard the pivotal role of traditional energy production. These bad actors have demonstrated that no tactic is too low, and with deep-pockets and national organization they have begun to apply their playbook to development across the country. Wherever new infrastructure is needed, these groups seem to appear to stand in the way—and they have been successful in disrupting critical infrastructure plans.

The energy industry remains focused on utilizing best practices, proper permitting, and rigorous environmental precautions. Developments in advanced technology, thorough regulation, and growing public-private partnerships continue to bolster pipeline safety and lower the chances of failure to near zero. Policymakers must trust in the regulatory process, strive to promote legal energy infrastructure projects, and recognize the benefits they bring to our communities.

To read the full op-ed, click here

Senate Energy & Nat. Resources Committee Hearing Focuses on Energy Infrastructure

GAIN Strategic Advisor Brigham McCown recently wrote an op-ed featured in Forbes addressing cybersecurity threats as they relate to energy infrastructure. It has been brought to the attention of our policymakers that critical infrastructure could be an attractive target for entities seeking to cause harm to the U.S. The Senate Energy & Natural Resources Committee recently held a hearing to review how energy is transported, the infrastructure that is available, and how to best maintain a secure electrical grid. As McCown writes:

Recognizing the importance of cybersecurity’s role in the reliability of our nation’s critical energy infrastructure is of utmost importance, something many companies have already acknowledged. Hardening facilities against physical intrusion, providing barriers to electronic entry, and early detection and monitoring are all at the forefront.

The hearing also highlighted the importance of maintaining a strong natural gas market. Natural gas is key to American energy, and pipelines play a critical role in delivering product. Considering pipelines are the most efficient and affordable method of transport for natural gas and NGLs, energy companies have already taken numerous measures to strengthen physical security and protect infrastructure from cyber-attacks. In cooperation with the federal government, pipeline operators already share cyber threat intelligence with each other in an effort to prevent any potential incidents. Public-private partnerships have helped to maintain cyber defense programs for years. For example, The Department of Energy is making $25 million in grant funding for projects that bolster grid resiliency and cybersecurity.

However, this effort is never complete. The Senate committee will review current procedures to ensure both the private sector and government non-profits are using resources as effectively as possible in order to remain proactive and vigilant to potential cyber threats. As McCown concludes:

While threats constantly evolve, the energy industry and the federal government both appear to be better situated to deal with current and emerging threats than they would have been just a few years ago. Hardening the critical infrastructure responsible for providing power must be an ongoing effort.

 

To read the full op-ed, click here

 

Energy Infrastructure Critical to Economic Growth

GAIN Spokesman Craig Stevens recently wrote an op-ed published in the Charleston Gazette-Mail highlighting the role of infrastructure in the domestic energy industry and the unexpected hurdles it has faced. For decades following the Oil Crisis of 1973, U.S. policymakers and industry experts saw dependence on foreign oil and gas as inevitable. After tapping into massive shale formations around the country, it turns out the U.S. has a different problem: lack of energy infrastructure. As Stevens argues:

In short order, the United States’ extraordinary shale growth has replaced fears of energy rationing with surpluses at production sites. Unable to keep up with a rapidly expanding output horizon, infrastructure has become the chokepoint limiting the country’s supply potential.

There is much to gain from investing in energy infrastructure in the United States. He shares some remarkable economic predictions:

A 2016 ICF study found that $546 billion of investment in midstream pipeline infrastructure is required to support North America’s oil and gas production forecasts. Meeting that challenge, the report adds, will generate as much as $100 billion in annual GDP and support over a million good-paying American jobs.

Although there is great reward for companies to invest in pipelines and the domestic energy industry, there is also great risk. Companies across North America have faced vast challenges from aggressive environmental activist groups. These activists have been known to make factitious allegations, while some have even turned to vandalism and trespassing at construction sites.

Pipelines endure an extensive permitting process. Regulatory agencies thoroughly conduct comprehensive reviews of pipeline proposals and prioritize environmental risk and safety. However, activists do not seem to be interested in the approval process and facts as it relates to the environment, but rather, are focused on their political dogma rather than the country’s economic growth and energy security. As Mr. Stevens concludes:

They would sooner return to the old days of energy scarcity than admit the crucial role fossil fuels play in our daily lives.

 

To read the full op-ed, click here

Bayou Bridge Pipeline: Lets focus on the facts

GAIN Advisor Colonel Tom Magness (retired) recently wrote a letter published in The Daily Iberian regarding the dissemination of misinformation on the Bayou Bridge Pipeline. He underscores the false allegations of environmental activists and their vigilante tactics, including blocking construction and vandalizing equipment. Col. Magness argues that the project was carefully reviewed and the necessary safety measures are in place. As he states:

“The environmental review process performed by the Corps is extremely rigorous. Career professionals carefully evaluated the pipeline’s path and considered all possible ways to avoid all potential environmental impacts. They meticulously reviewed construction techniques. Final plans by the company developing the project also included detailed plans to restore any environmental disruption back to its original state. Ultimately, the Corps found that the project would result in no significant impacts to the environment or to local communities.”

In addition to the questionable tactics of protesting activists, local judiciaries have even stepped in to slowdown construction. Col. Magness highlights a local judge in Louisiana ignoring facts of the case and undermining the regulatory process and implementing unnecessary oversight. This bureaucratic overreach is not unique; projects around the country, including the Mariner East pipeline, have experienced similar orders from administrative judges.

Environmental protection remains a top priority during the construction of Bayou Bridge. We look forward to the safe and successful completion of the pipeline and its contribution to our critical energy infrastructure!

 

To read the full letter, click here

Trans Mountain Pipeline: Energy Security before Politics

GAIN Spokesman Craig Stevens recently wrote a piece in The Calgary Herald expressing his support for Canadian Prime Minister Justin Trudeau’s decision to nationalize the embattled Trans Mountain pipeline. He argues that although this was largely an unpopular decision that has yielded criticism from both liberals and conservatives, “Trudeau is making the right choice by putting his country’s energy security ahead of the political noise.” As Stevens contends:

“Oil and natural gas are critical to Canada’s economy, and the energy sector is one of the country’s strongest growth engines. But in past few years, the industry has been hit hard. At least 18 Canadian companies filed for bankruptcy between 2015 and 2017, and more than 45,000 oil and gas jobs were lost between 2014 and 2017. Developments such as the Trans Mountain pipeline will create good-paying jobs for skilled workers and provide the foundations for growth across the economy.”

Environmental activists have taken extreme opposition stance to pipeline construction and operation, regardless of the industry’s strong safety record and efficiency ratings. Keeping valuable fossil fuels in the ground is not an option while gas prices are skyrocketing. Trudeau understands the importance of smart infrastructure investment and what it brings to Canada. The Trans Mountain pipeline is key to connecting production with consumers and adding greater demand for Canadian products directly. As he concluded:

“Building a protected environment and growing a strong economy at the same time is something that’s more important than winning a few extra seats here or there.”

 

To read the full article, click here

The New Normal: Killing the Heart by Cutting the Veins

GAIN Spokesman Craig Stevens recently wrote a piece in The Washington Times expressing the significance of domestic oil in the American economy. He asserts that the U.S. must continue safely extracting and transporting its valuable natural resources in order to continue economic growth. As he writes:

As economies and demand for energy grow, U.S. consumers are already seeing a price impact as the average price for a gallon of gas is up about 60 cents in the past year. Not surprisingly, this led to Senate Democrats blaming the president and demanding he call on foreign producers to open their spigots — instead of looking to reform their own policies that would shutter U.S. energy resources. But that view is myopic and fraught with peril as this would leave the U.S., its neighbors and other allies only more reliant on imported oil.

The role of domestic oil cannot be understated. Reliance on foreign oil poses a great risk for the future of the U.S. economy and will undoubtedly be felt by the ordinary consumer. As energy companies invest millions of dollars into new projects, offer thousands of jobs, and continue to propel the American economy, our government must do more. As Mr. Stevens concludes:

This attempt by fringe-environmentalists to “kill the heart by cutting the veins” is the new normal for companies seeking to invest in energy development and related infrastructure across our energy-rich continent. But, in order to limit our reliance on foreign energy, it’s imperative that governments provide private investment with the regulatory certitude it needs to work.

Read the full article here.