Pipeline Protests causing major issues for Canadian transit

Major railway blockades have taken over Canada – causing Prime Minister Justin Trudeau to convene a meeting with ministers and members of parliament to map out a path forward. Fox News highlighted how thousands of rail passengers across the country were forced to cancel trips as environmental activists blocked major tracks across the country – what the Canadian Chamber of Commerce called an ‘emergency.’

The burdensome blockades are the activists’ response to the approved plans to build the $5 billion Coastal GasLink natural gas pipeline that crosses into Wet’suwet’en First Nation territory in Houston, British Columbia. Standoffs between the Royal Canadian Mounted Policy (RCMP) and the Wet’suwet’en Nation escalated this past week – leading to dozens of protester arrests.

Protester Vanessa Gray told CTV News:

“We are here for as long as we can be disruptive. We are here in solidarity with the Wet’suwet’en land defenders, the hereditary chiefs that oppose the pipeline, with solidarity with everyone who has faced violence from the police arrests and people who are still faced with surveillance from the police. We are here also to shut down Canada.”

These protests clearly miss the mark – as passenger rail travel has nothing to do with a natural gas pipeline – and come at the expense of Canadians simply trying to get from point A to point B. The Canadian National Railway (CN) is working to mitigate the protests and end the illegal blockades that are impacting productivity and discouraging safe transit for citizens across Canada. After having to cancel more than 400 trains over the past week, CN has resorted to laying off more than 400 workers as the prolonged protests continue.

In a statement, CN president and CEO JJ Ruest said, “This situation is regrettable for its impact on the economy and on our railroaders as these protests are unrelated to CN’s activities, and beyond our control.”

Trudeau is working alongside officials to ensure protests will cease to prevent any further harm to the country’s economy and ensure Canadians can continue to travel safely.

North Dakota PSC’s DAPL Optimization Approval an Important Step for Energy Infrastructure

Today the North Dakota Public Service Commission voted 3 – 0 to approve the proposed Dakota Access Pipeline (DAPL) Optimization plan that would add a pump station to the pipeline’s route in Emmons County. North Dakota joins South Dakota in green lighting the second of three pump stations proposed to increase the pipeline’s capacity up to 1.1 million crude oil barrels per day to its offtake at the Patoka, Illinois Oil Terminal. Illinois and Iowa regulators will review the proposal in the coming months.

It is encouraging to see regulators acknowledge the value and importance of DAPL Optimization. North Dakota is ranked second among U.S. states in crude oil production and proved reserves, however, bottleneck difficulties have at times stifled energy delivery to key points across the country. Since coming into service in 2017, DAPL has been a key and safe transport component for the Bakken region, accounting for approximately 40% of the Bakken’s daily output. DAPL Optimization will offer much needed pipeline capacity to alleviate export constrictions.

Moreover, DAPL Optimization is a welcomed infrastructure project in North Dakota. A recent poll found that nearly 70% of North Dakotans support DAPL Optimization and 95% believe the oil industry to be important to the state’s economy.

Micah Roberts, Partner at Public Opinion Strategies, who conducted the poll on behalf of the GAIN Coalition, noted “[f]ully 77% of residents say it is important to them that oil is transported by pipeline and 79% agree that the Dakota Access Pipeline is providing a safer means of transportation than truck or rail. From safety to economic benefits, the polling shows the vast majority of North Dakotans support the industry and are in favor of increasing DAPL’s capacity.” 

Further, since 2017 Dakota Access has paid nearly $25 million in taxes to the state. An added pump station through optimization will generate more tax revenues for communities to deploy towards public services like schools, hospitals, and emergency services. Energy Transfer, the pipeline’s operator, will again rely on North Dakota’s skilled unions to see the project to completion, making DAPL Optimization an important job opportunity for many. GAIN applauds the North Dakota Public Service Commission for its decision today and is keen to see the remaining states review and swiftly approve DAPL Optimization. The coalition’s statement on the approval can be read here.

Unnecessarily High Energy Bills are Taking a Toll on American Families

Americans are paying far too much for their electricity bills. According to the U.S. Energy Information Administration, the average American family paid 4% more per kilowatt hour of electricity in November 2019 than in December 2017. This unfortunate reality comes despite the latest drops in natural gas prices. A recent op-ed in Real Clear Energy from the Lexington Institute’s Paul Steidler demands that states answer for ridiculously high energy bills.

Policymakers and regulators must work to ensure that Americans are not being weighed down by unnecessarily high energy costs. Low income families spend 8.6% of their income each year on energy costs – an astounding three times more than non-low-income households spend according to the U.S. Department of Energy.

Steidler describes this challenge, writing:

A September 2018 study by the U.S. Energy Information Administration found one in five American households goes without food or medicine at least once a year to stay warm in the winter or cool in the summer. Seven million households face this decision nearly every month.

People should not have to choose between keeping their homes warm or feeding their kids. Natural gas accounts for 35% of our nation’s electricity generation and using this resource drives down the electric bill and lowers usage of fuels such as coal – which emit higher levels of greenhouse gases.

But despite natural gas’ key role in lowering carbon emissions and providing reliable, affordable energy, many consumers cannot get access to this fuel due to energy infrastructure bans. States such as New York are making it difficult on their own residents, or those in New England, as Steidler points out:

New York’s failure to approve new pipelines causes consumers in New York and New England to pay an estimated $2 billion more in energy costs each year, or $233 for a family of four.

There are many factors affecting each state that determine what its retail price of electricity will be. These include renewable energy purchase mandates as well as the hidden taxes and infrastructure costs.

Supporting natural gas production and infrastructure development is more important now than ever and is crucial to ensuring affordable energy for households across America.

Pipelines – the safest, most cost-efficient and environmentally-friendly form of natural gas transit – can help ensure electricity costs remain affordable for American families. Policymakers and legislators must work together to ensure they are continuing to support the pipeline network – promoting affordable energy for all.

The Private Sector Offers Solution to Democrats’ Expensive Infrastructure Plan

The fact that America needs to repair and expand our country’s critical operating systems stands undisputed, but far more contentious is determining how to pay for the much-needed overhaul. A recent op-ed in Mass Transit Magazine offers a practical payment solution for a five-year, $760-billion infrastructure package plan House Democrats unveiled last month: the private sector. Craig Stevens, spokesperson for Grow American’s Infrastructure Now explains:

“Strong public-private partnerships will help mobilize projects, mitigate taxpayer liabilities and prioritize the most pragmatic and pressing needs. In Europe and around the world, progressive contracting has produced more reliable services, better consumer experiences and helped deploy modern assets and technologies. It would have similar results here in the states and provide the impetus to get a deal off the ground.”

The American Society of Civil Engineers gave the United States’ infrastructure a “D” grade in 1998 and almost two decades later failed to improve it even one letter grade, instead America received a “D+” in 2017. Even more concerning, 2017 saw six categories’ grades remain unchanged from 2013, Aviation, Bridges, Dams, Drinking Water, Energy, and Roads, and three categories, Parks, Solid Waste, and Transit’s grades decline. America needs an infrastructure boost, and a workable solution, like public-private partnerships, to support paying for the daunting bill. Stevens further detailed:

“Public-private partnerships offer a paradigm shift. Unlike government, private builders and operators have a financial interest in delivering high-quality services. That incentive drives modernization and new technologies, which make roads, bridges, airports, railroads and telecom systems safer and more reliable, and the experience for consumers more enjoyable. It also shifts financial risks off taxpayers and onto private enterprise, a critical point worth emphasizing.”

This bill represents an opportunity for lawmakers to come together and pass a serious bill that will benefit all Americans. Stevens articulately summarized the issue:

“Lawmakers are right to prioritize our country’s infrastructure. The United States needs as much as $2 trillion of investment over the next 10 years to modernize and bring our infrastructure into good repair. But Washington shouldn’t go at it alone. Working with the private sector will improve efficiencies, produce better services, protect our communities, and bolster our economy – not to mention, help answer the looming question of how to pay for a comprehensive infrastructure agreement.”

Texas Makes History, Oil and Gas Industry Pays $16.3 Billion in Taxes and State Royalties

The Texas oil and natural gas industry set a new record when it paid more than an astounding $16 billion in state and local taxes and state royalties in fiscal year 2019. The Texas Oil & Gas Association (TXOGA) shared a new report detailing how the oil and natural gas tax revenue benefits Texans.

This oil and natural gas tax and royalty revenue infuses funding into Texas education, transportation, healthcare and infrastructure through the State Highway Fund, the Economic Stabilization Fund, the Permanent School Fund and the Permanent University Fund.

The Economic Stabilization Fund, more commonly known as the Rainy Day Fund, is entirely funded by taxes paid by oil and natural gas companies and interest from the Rainy Day Fund itself. This money has made significant lasting affects felt across Texas. TXOGA noted in the last legislative session alone, lawmakers appropriated more than $6 billion from the Rainy Day Fund including:

  • More than $1.1 billion to the Texas Teacher Retirement System, with half being invested in the pension fund and the other half financing a “13th check” of up to $2,000 for retired Texas teachers.
  • $807 million to the Texas Education Agency to help school districts affected by Hurricane Harvey.
  • $840 million to the Texas Water Development Board to develop and update flood risk maps across Texas and to provide grant funding for flood-related projects.
  • $445 million to the Health and Human Services Commission to improve state hospital facilities.
  • $125 million for grants to counties to plan, maintain, and reconstruct roads affected by oil and gas development.

Additionally, Texas school districts received a remarkable $1.54 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. These funds help Texas provide a robust education improving children’s knowledge and skills to set them up for the brightest possible future.

Todd Staples, president of TXOGA eloquently summarized the results of the report saying;

“Oil and natural gas does more than fuel our cars, power our homes and businesses, form the building blocks of our everyday goods and secure our nation.  Taxes paid by the oil and natural gas industry support teachers and schools, build roads, boost essential and emergency services, improve healthcare facilities and bolster our state’s infrastructure,” he added,  “Since 2007, the oil and natural gas industry has paid more than $149 billion in state and local taxes and state royalties.  That’s money that benefits every Texan – whether you live near the oil patch or not.”

Texas should continue to invest in oil and natural gas industry and appreciate the reciprocal investment put back into the Lone Star State.

IEA Reports Natural Gas Playing Key Role in Reducing Carbon Emissions

The International Energy Agency (IEA) reported yesterday that global energy-related carbon dioxide emissions stopped growing in 2019 – despite widespread expectations of another increase. The IEA noted several factors contributed to this significant development, including the increased use of natural gas for power generation in advanced economies like the US. The IEA noted:

After two years of growth, global emissions were unchanged at 33 gigatonnes in 2019 even as the world economy expanded by 2.9%. This was primarily due to declining emissions from electricity generation in advanced economies, thanks to the expanding role of renewable sources (mainly wind and solar), fuel switching from coal to natural gas, and higher nuclear power generation.

A significant decrease in emissions in advanced economies in 2019 offset continued growth elsewhere. The United States recorded the largest emissions decline on a country basis, with a fall of 140 million tonnes, or 2.9%. US emissions are now down by almost 1 gigatonne from their peak in 2000. Emissions in the European Union fell by 160 million tonnes, or 5%, in 2019 driven by reductions in the power sector. Natural gas produced more electricity than coal for the first time ever…

Across advanced economies, emissions from the power sector declined to levels last seen in the late 1980s, when electricity demand was one-third lower than today. Coal-fired power generation in advanced economies declined by nearly 15% as a result of growth in renewables, coal-to-gas switching, a rise in nuclear power and weaker electricity demand.

The IEA’s data comes as the United States continue to produce record amounts of natural gas from the Marcellus, Utica, and Permian formations. Using domestic-sourced natural gas to produce electricity and heat American homes and businesses is key to further bolstering the economy and ensuring both grid reliability and energy security.

U.S. Department of Energy Approves Four LNG Export Projects

The U.S. Department of Energy announced the approvals of four proposed LNG export facilities along the Gulf Coast in Texas authorizing the export of domestically produced LNG. The four projects are: Annova LNG, Rio Grande LNG, Texas LNG, and Corpus Christi LNG’s Stage III. The Federal Energy Regulatory Commission (FERC) approved the four LNG projects in November.

“The Trump Administration recognizes the importance and increasing role U.S. natural gas has in the global energy landscape,” said U.S. Secretary of Energy Dan Brouillette. “The export capacity of these four projects alone is enough LNG to supply over half of Europe’s LNG import demand. With today’s authorizations, we are paving the way for more U.S. natural gas exports to bring energy security and prosperity to our allies around the world.”

“Approval of these four LNG export authorizations in Texas is another step by the Trump Administration to ensure our country’s energy and national security,” said Under Secretary of Energy Mark W. Menezes. “New LNG authorizations mean new jobs and economic growth in the U.S., as well as the potential for new market opportunities abroad. Ongoing progress to streamline energy infrastructure and project approvals is a hallmark of this Administration.”

As GAIN has previously pointed out, these projects bring significant economic investment to Brownsville, Corpus Christi, and the state of Texas. The four projects would bring a combined $45 billion in investment. The projects will support thousands of jobs, millions in tax revenue for local and state use, and create new economic opportunities.

The U.S. is now in its fourth consecutive year as a net exporter of natural gas and has exported to 37 countries and is on track for its export capacity to double in the next 5 years. The proposed LNG projects will further bolster the United States’ role as a top energy producer and exporter – strengthening the American economy and national security in the process. U.S. energy is key to stabilizing the global energy market and supporting our allies across the globe, especially in light of recent unrest in the Middle East. Providing our allies with American-produced LNG limits their reliance on volatile and unpredictable regimes for energy sources as well.  

Pakistan emerging as key U.S. LNG export market

The Houston Chronicle recently reported on Pakistan’s increasing role as an exporter of U.S. LNG. The country has faced unrest in the region, government corruption, and unreliable energy sources for decades. But new Pakistani leadership is attempting to launch the country onto the world stage. Reliable energy from the United States could go a long way in boosting the Pakistani economy. Pakistan’s U.S. Ambassador Asad Majeed Khan said:

“The convenience of its use, its environmentally friendly use, and also the rates, I think make LNG an attractive option for Pakistan. There is huge demand.”

The article further described the market for natural gas and how Pakistan fits in:

LNG prices are particularly low these days due to abundant supplies and slipping demand, in part a result of mild winters in much of the world and the impact of the coronavirus on the Chinese economy. Large supplies of gas in Texas shale deposits and increasing demand for cheap, cleaner burning fuels spurred Houston-area companies to look abroad for customers.

A few years ago, Cheniere Energy of Houston became the first company in the continental United States to export LNG.

Pakistan needs cheap, reliable energy that can easily integrate with existing pipelines, storage terminals and other infrastructure. Because the country has depleted much of its compressed natural gas reserves, and sanctions on Iran have reduced natural gas imports, the country is beginning to import LNG from the United States.

Thanks to record American natural gas production and significant investment in LNG export terminals along the Gulf Coast, the U.S. is well-positioned to supply Pakistan with reliable, affordable, cleaner-burning natural gas. More than 50 million Pakistanis did not have access to electricity in 2017, and more than half of the population uses biomass, including wood and animal waste, for cooking due to natural gas and electricity shortages.

The Chronicle points out LNG, paired with foreign investment from Pakistani Americans, could be a key driver in bolstering Pakistan’s economy and securing a successful future.

Natural Gas and Renewables Should Co-exist

New Jersey Gov. Phil Murphy (D) recently announced his plan to achieve 100% “clean energy” for the state by 2050. The almost 300-page plan aims at decarbonizing the state’s energy system by midcentury, but its strategies have raised concerns about both the costs and effectiveness of the proposal. One such strategy is phasing down natural gas usage across the state. This proposal would increase costs for consumers and eliminate a critical source of energy many New Jerseyans rely on. Currently, about 75% of New Jersey households rely on natural gas as their primary heating fuels. A long-term, pragmatic solution should include both natural gas and ‘clean electricity’ – co-existing to maintain our energy security and keep costs affordable for all Americans.

Murphy’s plan specifically asks utilities to “assess existing pipeline capacity and plan for a gradual reduction in system use,” and calls on the state to revisit policies that ‘bolster the natural gas industry.’” For alternate sources of energy, the plan suggests a mass build-out of offshore wind turbine and solar panels. However, this has been met with skepticism across the state’s energy sphere, the largest concern being the increase in cost to taxpayers.

In a recent NJ Spotlight op-ed, Rutgers professor Frank Felder, who directs the university’s Center for Energy, Economic and Environmental Policy, expressed his concern regarding the Governor’s proposal:

The transition to a clean energy future will be expensive and regressive. Replacing fossil fuels with clean energy requires a dramatic change in the economy. Every sector of New Jersey’s economy depends extensively on fossil fuels for heating, transportation, and electricity. Regardless of how the state pursues a clean energy economy, direct energy costs will rise even with declining costs of clean energy. These additional costs will be paid for by residents either directly or indirectly from the increase in costs passed along to them by businesses, nonprofit organizations, and local and state governments.

Separately, Erick Ford, executive director of the New Jersey Energy Coalition, applauded the plan’s ambitions, but he expressed apprehension about cutting natural gas, saying:

“While I haven’t read the whole document yet, I do understand there’s a desire to get that 100% clean energy, so that would mean things like natural gas may not be in the long-term future,” he said during an interview yesterday on the sidelines of a grid resilience conference in San Antonio. “I’m cautious on it, because natural gas is a low-cost energy fuel.”

As both states and the federal government make plans to integrate renewable energy sources into the grid, they should keep in mind the significant benefits natural gas offers. In addition to its low-cost and affordability, it burns cleaner than other traditional energy sources like coal and emits lower levels of emissions such as carbon monoxide, carbon dioxide and nitrous oxides.

Furthermore, natural gas produces less greenhouse gases than other fossil fuels and it does not produce ash or particulates that lead to health problems. No feasible plan should call for the elimination of natural gas. Future energy plans should embrace natural gas and renewables to work together to provide reliable energy for Americans while reducing emissions and costs.

EIA: U.S. Net Natural Gas Exports to Almost Double by 2021

The U.S. Energy Information Administration (EIA) reported earlier this month that U.S. natural gas exports are forecasted to exceed natural gas imports by an average 7.3 billion cubic feet per day (Bcf/d) in 2020 (2.0 Bcf/d higher than in 2019) and 8.9 Bcf/d in 2021. EIA notes that growth in U.S. net exports Is led primarily by increases in LNG exports and pipeline exports to Mexico. Net natural gas exports more than doubled in 2019, compared with 2018, and EIA expects that they will almost double again by 2021 from 2019 levels.

EIA further described the U.S.’ natural gas export success:

The United States trades natural gas by pipeline with Canada and Mexico and as LNG with dozens of countries. Historically, the United States has imported more natural gas than it exports by pipeline from Canada. In contrast, the United States has been a net exporter of natural gas by pipeline to Mexico. The United States has been a net exporter of LNG since 2016 and delivers LNG to more than 30 countries.

In 2019, growth in demand for U.S. natural gas exports exceeded growth in natural gas consumption in the U.S. electric power sector. Natural gas deliveries to U.S. LNG export facilities and by pipeline to Mexico accounted for 12% of dry natural gas production in 2019. EIA forecasts these deliveries to account for an increasingly larger share through 2021 as new LNG facilities are placed in service and new pipelines in Mexico that connect to U.S. export pipelines begin operations.

Thanks to record natural gas production in the United States, we have been able to export energy to our allies around the globe. Exporting American-produced energy not only bolsters our economy and national security, but also diminishes our allies in Europe reliance on potentially unpredictable sources like Russia and the Middle East.