Energy Transfer Joins North Dakota iPipe Consortium

The Williston Herald recently highlighted Energy Transfer, operator of the Dakota Access Pipeline, will join iPipe, North Dakota’s Intelligent Pipeline Integrity Program, which consists of oilfield companies seeking to prevent leaks and advance leak detection technology.

iPipe, which was formed in 2017, has pursued technology through advanced sensors and even satellite data to safely monitor pipeline systems. This is a step in the right direction for further bolstering the state’s critical energy infrastructure network.

Vicki Granado, vice president of Corporate Communications for Energy Transfer, believes this is an important safety feature. Granado said in a statement:

“Dakota Access Pipeline is excited to help steer the efforts of this program, and expects that the outcomes of this unique program will result in an even greater record of safe operations across the entire pipeline industry.”

Energy Transfer will be joining iPipe alongside companies such as DCP Midstream, Enbridge, Hess, and Oasis Midstream Partners.

North Dakota Petroleum Council president Ron Ness was pleased to hear Energy Transfer is taking strides to advance leak detection. He said:

“IPIPE is a model of how to blend entrepreneurship and applied research together via a private and public partnership. Energy Transfer Partners bring incredible knowledge and experiences to the table which will just enhance the potential for improved pipeline technology and leak detection.”

This announcement is an exciting development for North Dakota’s energy industry and a key reminder of the industry’s commitment to pipeline safety.

GAIN Adviser Weighs in on Merits of DAPL Optimization

Ahead of an early February Illinois Commerce Commission hearing GAIN advisor, retired Colonel Tom Magness, was featured in the State Journal-Register responding to an editorial which incorrectly mischaracterized the Dakota Access Pipeline (DAPL) Optimization plan set for regulatory consideration.

Colonel Magness, who spent much of his military career as a commander in the U.S. Army Corps of Engineers, pointedly reminded readers of the importance and value projects like the DAPL Optimization offer to the nation’s energy security and regional benefits.

To keep up with steadily increasing Bakken crude oil production, DAPL Optimization will modify the existing pipeline by adding three new pump stations to increase throughput and is “…good news for American energy security and production,” as Magness noted. DAPL has already been a success in reliably delivering energy resources and the proposed plan by Dakota Access doubles down on that very strength.

Moreover, coverage of the proposed plan has been woefully narrow and lacked acknowledgement of the benefits of pipelines and general and their ability to safely move American-produced energy to markets.

For more insights on DAPL Optimization Colonel Magness’ letter to the editor can be read in full here.

U.S. Energy Exports Lead to a Decline in the U.S. Trade Deficit

The Commerce Department recently reported that the United States trade deficit significantly decreased, down $3.9 billion from $46.9 billion in October to $43.1 billion in November – a major step in the right direction for our nation. The growth of U.S. energy production has increased self-sufficiency from importing foreign oil and producing enough for profitable exports.

The decreased deficit is largely a result of the increasing gap between what America imports and exports. The report demonstrated how the gap fell more than 8 percent to $43.1 billion, marking the biggest decline in a year. November exports totaled $208.6 billion, a $1.4 billion increase from exports in October. Further, November imports were down to $251.7 billion, a $2.5 billion decrease from October. Tariff changes with China under the Trump administration largely played a role in these shifts.

September 2019 marked the first month since 1973, when monthly records began, that the United States exported more petroleum than it imported.[1] This trend has continued since September. Notably, petroleum imports were worth $27.2 billion in November, when adjusted for inflation. This statistic is even more impressive when considering that this is the lowest level recorded since the Commerce Department began tracking it back in 1992.

The decrease of reliance on imported oil will continue to lower the trade deficit and strengthen U.S. energy independence. As options for foreign oil are beginning to look unstable, this is a smart move for the future of our country as we continue to strengthen domestic industries and increase job opportunities.

TXOGA celebrates 100 years of Oil & Natural Gas Production

The Houston Chronicle featured an outstanding triumph by the Texas Oil & Gas Association (TXOGA), the association has recently celebrated its 100th anniversary.

In an initial interview with Texas Inc., TXOGA president Todd Staples reflected on the past century of feats and shed some light on the future of the energy industry.

Staples discusses the importance of continuing to support the future of the pipeline infrastructure in Texas:

“They are the absolute safest ways to move products and if you want gasoline at your convenience store, to fuel your car or your school buses. Or you want natural gas to make sure you have affordable power for your homes. Our member companies work really hard to promote good and best standards for building and operating pipelines.”

With the recent approval of four South Texas LNG export terminals, including the location of three facilities at the Port of Brownsville, the economy in the region will benefit greatly. New pipelines in the area will support the vast amounts of natural gas produced by the Permian Basin and make Texas a frontrunner for LNG exports by providing affordable domestic prices and generate profits by selling to foreign markets. The Permian Express Pipeline System spans 430 miles and reaches the U.S. Gulf Coast and Mexico markets.

“The next 100 years are bright,” said Staples regarding the future of TXOGA and the oil and gas industry. “As we think about our future, oil and gas is committed to a cleaner, stronger energy future. We know that the components that we use, 96 percent that we use in our homes and in our hospitals and in our schools, come from oil and gas. It’s simply irreplaceable.”

Investing in the Texan pipeline network is critical to ensuring oil and gas production from the Permian Basin is serving America’s energy infrastructure to the best ability. This investment is crucial in ensuring the U.S. can remain a top LNG exporter in the global market.

North Dakota Reaches Significant Achievement in Oil Production

The Bismarck Tribune highlighted a significant achievement this holiday season – North Dakota now produces 1.5 million barrels per day.

Mineral Resources Director Lynn Helms believes growth will continue in the new year, “It should result in small increments of production growth through the year 2020.” The U.S. has picked up on oil production where countries like Saudi Arabia and Russia have fallen short. East Coast reserves have benefitted specifically throughout these disruptions.

North Dakota Pipeline Authority Director Justin Krinstad remarked, “Those East Coast refineries, they really only have two options for crude sourcing: that’s either waterborne barrels coming from foreign sources or it’s crude-by-rail coming into the region.” Bakken crude oil and the infrastructure that houses it came to the rescue.

North Dakota also saw a major triumph in natural gas transportation. The Elk Creek Pipeline of Oneok began operations carrying up to 240,000 barrels of LNG from the Bakken region to Kansas – offering tremendous support to natural gas plants that had needed support in order to perform at full capacity.

“You can have all the processing capacity in the world, but if you don’t have an outlet at the tailgate of that facility for those NGLs, that plant will become congested and it will not be able to operate at its stated capacity,” Kringstad said.

“It should be a very happy holiday for the state of North Dakota,” said Helms.

U.S. gas drillers saw record gains in 2018, EIA reports

The Houston Chronicle recently highlighted data from the U.S. Energy Information Administration reporting that U.S. natural gas production had its biggest one-year increase on record in 2018. The Chronicle notes:

“Driven by now more than decade-old advancements in hydraulic fracturing technology, production increased by 10 billion cubic feet per day last year – an 11 percent increase from 2017 – to 101.3 billion cubic feet per day. That led to a more 50 percent gain in gas exports, through LNG tankers and pipelines.”

The EIA report further described this energy milestone:

“As natural gas production increased, the volume of natural gas exports—both through pipelines and as liquefied natural gas (LNG)—increased for the fourth consecutive year, reaching 9.9 Bcf/d. Total natural gas exports grew 14% in 2018, and LNG exports grew by 53% to 3.0 Bcf/d. Both pipeline and LNG exports reached record monthly highs in December 2018 of 7.7 Bcf/d and 4.0 Bcf/d, respectively. The United States continued to export more natural gas than it imported in 2018, after being a net exporter in 2017 for the first time in nearly 60 years.”

In addition, the EIA has projected that natural gas exports by pipeline will exceed natural gas imports by pipeline in 2019 for the year.

The most significant gains were experienced in the Appalachian region with the booming Marcellus and Utica shale formations, closely followed by Texas’ Permian and Haynesville shale formations. Record natural gas production creates jobs, increased tax revenue, new economic development opportunities, and promotes LNG exports for our allies abroad – a key factor in stabilizing the global energy market and minimizing reliance on volatile foreign sources.

Historic Energy Milestone: U.S. Petroleum Net Exporter for First Time Since 1973

InsideSources recently published an opinion editorial by Andrew Cline, president of the Josiah Bartlett Center for Public Policy in New Hampshire, in which he discusses a remarkable milestone for American energy: for the first time since 1973, the U.S. exported more petroleum products than it imported in the month of September.

Despite this landmark achievement for energy independence, it has barely made its way into mainstream media coverage. As we’ve seen with the 2020 Democratic presidential candidates, many politicians and activists have advocated for steering away from fossil fuels in favor of renewable energy options, while ignoring some inconvenient facts.

Candidates and activists have given little regard to American history and the potential impact on consumers should traditional energy sources like natural gas be limited or banned. Cline notes:

“With the United States producing an abundance of energy, the old concerns about blackouts, shortages and astronomical prices have faded. Taking energy abundance for granted, politicians and activists have shifted to demanding that the energy comes from cleaner sources.

“The big energy stories are no longer U.S. production, but demands by activists and politicians to shift completely away from fossil fuels. Since Berkeley, Calif., banned natural gas hookups for new homes and businesses earlier this year, other communities across the country are considering following suit. In Massachusetts, with some of the highest energy costs in the U.S., Brookline, Mass., passed a similar ban, which is inspiring other communities in Massachusetts to do the same.”

The movement against natural gas is concerning, especially since it has played a critical role in lowering US carbon emissions from the electric sector considering it emits as much as 55% less carbon dioxide than coal. Despite the environmental benefits, affordability, and accessibility of natural gas – many of the presidential candidates have called for banning fracking and the construction of new energy infrastructure. Just this past week, presidential candidate and former New York City Mayor Michael Bloomberg claimed natural gas is “going to be worse than coal.”

These policies are shortsighted, and while they might play well during the Democratic primary, our nation relies heavily on natural gas and the need for this resource is expected to increase in coming years. As Cline points out:

“The EIA had predicted September’s net petroleum export milestone. This month, it predicted that “the share of U.S. total utility-scale electricity generation from natural gas-fired power plants will rise from 34 percent in 2018 to 37 percent in 2019 and to 39 percent in 2020” while coal’s share will fall from 28 percent in 2018 to 22 percent in 2020.” With record domestic energy production, it is deeply important that we continue to support and invest in further developing our energy resources and infrastructure network to move our country forward.

US Energy Growth Requires Infrastructure Investment

Real Clear Energy recently published an opinion editorial by Mead Treadwell, former lieutenant governor of Alaska and CEO and Chairman of Qilak LNG, which focuses on the development of North American Arctic LNG exports. Treadwell highlights the importance of America’s economic growth in oil and natural gas production and how further investment in pipeline expansion may support this continued growth.

But Treadwell points to statistical information from the U.S. Energy Information Administration to underscore how some officials and opponents have seemingly hindered growth of American energy. Treadwell writes:

“Despite a 200% increase in US oil production and a 40% jump in natural gas output since 2010, construction of the pipelines needed to move products to consumers has lagged. While new projects are coming online at a record rate, opposition to key pipelines threatens to leave the U.S. energy market fragmented.”

Treadwell refers to some other examples of the US missing out on economically rewarding energy benefits. Treadwell points out:

“Earlier this year, the Empire State used the Clean Water Act to shut down a nearly $1 billion natural gas pipeline that would have connected the state’s power plants with gas-rich fields in Pennsylvania and Ohio, and reduced the average price of electricity in New York City which currently stands at 21.0 cents per kWh, 54 percent higher than the national average (13.6 cents per kWh).”

Continuing through the article, Treadwell notes how pipelines support US energy exports by lowering the trade deficit, therefore supporting the economy. Treadwell also points out, “Investing in modern energy infrastructure enables the US to provide long-term, low cost, reliable energy to consumers, which in turn makes domestic industries like manufacturing and agriculture more cost-competitive relative to foreign rivals.” Self-reliance not only benefits the US, but our allies as well. By turning away from foreign energy imports sourced from unstable regions, we can bolster our national security while promoting American energy independence.

The United States has a promising future regarding its energy potential. But as Treadwell emphasizes, if we want to reap these benefits for our nation, we must properly invest in our pipeline networks today.

U.S. Must Continue to Invest in LNG Exports

The Associated Press reported that China and Russia have launched a 3,750 mile long gas pipeline, “an outcome of their long-planned energy partnership.” China is the world’s largest energy consumer and needs new supply sources to meet their demand while Russia is looking for alternative economic partnerships due to volatile relations with the U.S. and Europe. The pipeline, “Power of Siberia,” is the result of $400 billion deal from 2014 in which Russian state energy company Gazprom agreed to deliver 38 billion cubic meters of natural gas annually to China National Petroleum Corp for the next 30 years. Russian president Vladimir Putin was quoted:

“This step takes Russia-China energy cooperation to a whole new level and brings us closer to achieving the goal set together with Chinese President Xi Jinping of extending bilateral trade turnover to $200 billion in 2024.”

This is just the latest addition to energy expansion by our nation’s adversaries. Too many of our allies in Europe are dependent upon Russia, and increasingly China, to meet their energy needs. The best way the U.S. can counter these developments is to increase investment in our energy exports.

To start, the U.S. must continue to invest in modern pipelines to safely and efficiently transport energy to export terminals along the coast and consumer markets. Pipelines have proven to be the safest, most efficient, and most environmentally-conscious means to move natural gas to markets.

Furthermore, the U.S. must continue to invest in LNG export terminals. A flurry of investment is on the horizon, from Lake Charles LNG in Louisiana, to Eagle LNG in Florida, to FERC’s recent approval of 4 major export projects in Texas.

The U.S. has been trending in the right direction to accomplishing these goals under the Trump administration and his “energy dominance” doctrine that welcomes investment and streamlines regulations to allow economic expansion. The United States recorded its first month as a net petroleum exporter since 1949 last week and is currently the third largest LNG exporter worldwide – and is on pace to become the top LNG exporter in the next five years.

U.S. Records First Month as Net Petro. Exporter but Infrastructure Buildout Key to Sustaining Exporter Position

Last week the U.S. Energy Information Administration (EIA) published data on the country’s petroleum and crude oil position. For the first time since 1949 the United States is a net exporter of petroleum and crude oil products by nearly 90,000 barrels a day.

As reported by E&E News EIA calculations put average net imports for 2019 at 520,000 barrels per day but an expected net export position up to 750,000 barrels per day in 2020. Moreover, the anticipated 2020 turnaround compares starkly with previous decades that lacked production from the ongoing shale production boom.

Since the 1970s the U.S. has been heavily dependent on petroleum and crude oil imports, reaching imports over 6.5 million barrels per day. That dependency extended well into the 1990s – trending upwards to 8.5 million daily barrels – and into the 21st century before peaking at 10 million a day in the year 2000.

In 2003 – a year when the country imported over 9 million petroleum and crude barrels daily – Time Magazine captured Americans’ energy frustrations in a piece titled ‘Why U.S. Is Running Out of Gas.’ Authors Donald L. Bartlett and James B. Steele noted “…it is that the U.S. is likely to be faced with recurring oil and natural-gas crises for some years to come. Their duration and severity remain to be seen,” with consequences of “…a hidden tax of tens of billions of dollars on American consumers.”

Energy independence has long been a policy goal of the U.S for national security, private commerce, and consumer purposes. Bartlett and Steele highlight the earlier legislative efforts to combat the country’s reliance of foreign energy. President Richard Nixon in 1973 pledged that “…in the year 1980, the United States will not be dependent on any other country for the energy.”

History reminds that legislative solutions lacked the necessary oomph and industry how-to to achieve energy independence. Instead, private investment in production, transport, and export infrastructure have redefined the American energy industry.

Thanks to the development of safer and more efficient production methods in the shale industry production records in the Bakken and Permian regions continue to be broken monthly if not weekly.

The latest data from the EIA is encouraging though industry members and government officials must plan extensively for the future. This includes promoting the development of the right infrastructure. Industry members are taking the lead by showcasing better and better production technologies, creating sophisticated and safer transport systems, and efficient export terminals on the country’s coasts.

With the country turning to a new electoral season and much talk from Democratic primary hopefuls interested in reorienting away from fossil fuels it is important to consider the significance of the county being on the cusp of achieving an energy goal five decades in the making.