Dated Legislation Blocks U.S. Energy Success

OilPrice recently highlighted a century old law that limits oil and gas shipments known as the Jones Act (J.A.) may be having a negative impact on the American energy industry in light of COVID-19. The Jones Act regulates maritime commerce in the U.S. and “demands that vessels undertaking shipments between two U.S. ports be U.S.-built, U.S.- owned and U.S.-manned.”

The law was implemented to protect U.S. fleets after steep losses from World War I; however, the law actually limits oil and gas shipments within U.S. ports and encourages domestic producers to send shipments abroad.

The article writes:

“J.A. has been detrimental for the U.S. energy industry because it limits inter-state trade in oil products and LNG with the high costs for US-built vessels forcing producers to turn to less efficient forms of transportation oil products. The average cost of oil transport by huge oil tankers amounts to only US$5 to $8 per cubic meter ($0.02 to $0.03 per U.S. gallon), the second cheapest after pipeline transport. Noncontiguous states and territories, like Puerto Rico, Alaska, or Hawaii, are even more disadvantaged since no pipeline, rail, or truck transport of U.S. energy products can reach them, forcing them to rely on imports.”

Updating the Jones Act could encourage domestic shipments and take away unnecessary costs from disadvantaged East Coast states who often resort to relying on foreign imports. While pipelines are the preferred method of transporting natural gas and oil to consumers across the country, our energy infrastructure network and storage capacity are currently overwhelmed as global demand for crude oil has temporarily decreased during the pandemic.

The article also highlights the legislation is costing Texas plants three times as much to ship oil to east coast refineries compared to Canadian refineries, which should raise some red flags. Repealing J.A. would be a big step in the right direction for U.S. energy success.

Natural Gas Can Help Americans Have Affordable, Clean Energy

Rio Grande Guardian recently published an op-ed by Patrice Douglas, strategic advisor to the GAIN Coalition and former chairman of the Oklahoma Corporation Commission, highlighting the importance of investing in natural gas infrastructure given the fuel’s role in lowering carbon emissions and providing a reliable source of affordable energy for Americans.

With the 2020 election coming approaching, environmental conservation is a top priority for many Americans. Natural gas provides a low emission alternative to coal and is used by millions of Americans in everyday life. However, Douglas writes that regulatory hurdles and challenges to energy infrastructure development can slow progress, limiting American energy capabilities in the process:

“While oil pipelines have slowly caught up with production, natural gas infrastructure is still lagging. As a result, flaring, or the burning off of excess gas, has reached near-record levels of 650 million cubic feet of natural gas per day. Had there been the necessary infrastructure to transport the gas to consumers, that amount would have been enough to supply nearly 4 million homes for a single day. In an effort to alleviate such constraints, a number of companies have committed to building natural gas lines to facilities along the Gulf Coast to get the product to consumer markets in the United States and to allies abroad – but will still take years before coming online.

Furthermore, the need for natural gas infrastructure extends beyond the Permian. For New England residents, flared off natural gas could have gone far in lowering energy prices, or decreasing reliance on imported fuel. In fact, due to infrastructure constraints in the region, Massachusetts has resorted to importing natural gas from Russia each of the past two winters. Even with that additional supply, millions in the region rely on heating oil to heat their homes – a notably less environmentally-friendly alternative to natural gas.”

We should not resort to relying on Russian natural gas considering the U.S. has produced record amounts from areas like the Permian Basin in Texas and the Marcellus in Pennsylvania. We need to be smart thinkers when considering how to meet American energy needs – and that starts with streamlining energy infrastructure development and the regulatory process. We must be considerate of emissions, cost to Americans, and cooperative when making policy choices regarding the future of American energy.  

North Dakota town to commence infrastructure renovations with $3 million dollar donation from Energy Transfer

What would you do with $3 million dollars? The town of Mandan, North Dakota is planning to invest in renovations for local infrastructure projects thanks to a generous $3 million dollar donation from Energy Transfer received this past year. KX Net reported that the town will revamp the Mandan Morton Public Library and Dykshoorn Park.

Speaking on the donation, Executive Vice President and Chief Human Resources Officer of Energy Transfer Chris Curia said:

“This contribution is part of our commitment to be a valued business partner in North Dakota. We are grateful for the support we received from the people of Mandan throughout the construction of the Dakota Access pipeline, and we wanted to find a way to benefit residents of all ages throughout the county.”

It is encouraging to see energy companies like Energy Transfer invest in local communities they conduct business in. Donations such as this one can dramatically improve the daily lives of individuals in small communities such as Mandan.

Jackie Hawes, Mandan Morton Public Library Director, is looking forward to the additions to the library as a result of the donation. Hawes said,

“We currently have a lot of problems here in the existing building or a lot of issues. And so this is pretty much going to address all of those issues that we have. Also, the design is definitely future-focused and so as the community grows, the library may need to go as in the future.”

The donation will create a more inviting workspace for the Mandan Morton Public Library and allow Dykshoorn Park to host more community-bonding activities such as farmers markets, concerts, and additional events. Hopefully more businesses can continue to donate to communities they work in and support local growth and development projects going forward.

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.

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 Applauds Local South Dakota Decision to Follow Recommendations

Earlier today, the Lincoln County Board of Commissioners voted 4-1 to uphold the Planning Commissions’ approval of the conditional use permit for the Dakota Access Pipeline pump station in Harrisburg, South Dakota. The pipeline currently ships more than 570,000 barrels of oil from the Bakken in North Dakota to refineries across the Midwest and Gulf regions. Construction of the estimated $30-40 million pump station in South Dakota will lead to more jobs and help allow the pipeline to double its capacity up to 1.1 million barrels a day.

Following is a statement from the GAIN Coalition which you can attribute to me, Craig Stevens, spokesman for the coalition.

“We applaud the Lincoln County Board of Commissioners who supported the recommendations and the existing rules and regulations that will help the U.S. become more energy self-reliant and bring construction jobs to South Dakota. Developing the energy resources in the Bakken has been a tremendous benefit to our nation’s economy and energy security. By optimizing the Dakota Access Pipeline we will be able to develop more of our nation’s resources for use here in the U.S. as well as hedge against oil volatility elsewhere in the world. Pipelines remain the safest and most economical means to transport the petroleum our country needs and when officials like those in Lincoln County follow the letter and spirit of existing regulations, it allows for regulatory certainty for companies seeking to invest in our nation’s infrastructure.”

GAIN Coalition Supports Proposed Federal Legislation to Protect Pipelines

Earlier this week, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) called on Congress to expand federal legislation to protect pipelines. Current law allows for fines and prison time for “damaging or destroying” pipelines currently in operation. Under the proposal, the law would be expanded to include “vandalism, tampering with, or impeding, disrupting or inhibiting the operation of” both existing pipelines or “those under construction.” The proposal follows a recent trend in statehouses around the country introducing, and in some cases passing, similar legislation to protect critical energy infrastructure.

Below is a statement that can be attributed to me, Craig Stevens, spokesman for the GAIN Coalition.

“The GAIN Coalition commends PHMSA for their recent proposal calling on Congress to strengthen legislation at the federal level to protect our nation’s critical energy infrastructure. While free speech and discourse surrounding pipelines are important, there is a formal process that welcomes public comment and concerns. We encourage those interested to participate in this process and have their voice heard.

Once pipelines are lawfully permitted – it is critical developers are guaranteed regulatory certainty so projects can move forward in a meaningful and predictable manner, and ultimately come into service. This proposed legislation will play a key role in protecting our nation’s pipeline network, as well as keeping workers, law enforcement, and community members safe.”