EXTRACTED: Daily News Clips 12/27/22
PIPELINE NEWS
Associated Press: Company: Regulators OK reopening of Kansas pipeline segment
Reuters: U.S. pipeline regulator reviewing special permits after Keystone oil spills
KCUR: Pipeline company says Kansas oil spill contained, but chemicals found downstream
Topeka Capital-Journal: After Keystone oil spill, Kansas governor calls pipeline property tax exemption 'a big mistake'
Roanoke Times: Amended Forest Service guidelines could remove Mountain Valley Pipeline roadblock
KELO: Navigator gets no answer on a fourth public meeting
SDPB Radio: Proposed carbon pipeline could be pushed back over PUC hearing date
Oelwein Daily Register: Fayette Co. updating pipeline ordinance
KMA: Opponents encourage Page County board to intervene in proposed carbon dioxide pipelines
TMJ4: We Energies no longer requesting customers 'immediately' lower thermostats after pipeline failure
KIII: Up to 3,800 gallons of light crude oil spills into Corpus Christi Bay from cracked pipeline
NBC San Diego: Gasoline Pipeline Serving San Diego Shut Down After Leak Found
Long Island News 12: Sinkhole forces closure of Woodlands Legacy Park in Yorktown
Reuters: Pipeline blast kills at least one Pemex worker in central Mexico
Pipestone Star: Pipeline under Monument shut down
Canadian Press: Trans Mountain pipeline fine for bird disturbances upheld while penalty slashed
Argus Media: New pipelines may boost Canadian heavy
JD Supra: FERC Initiates New Review on Contracts Between Oil Pipelines and Their Affiliates
WASHINGTON UPDATES
E&E News: McConnell Doubts Permitting Reform Will Pass Next Year
InsideEPA: Appeals Court Dismisses Environmentalists’ Challenge To Trump NEPA Rule
E&E News: Lawsuit Targets Interior NEPA Review Of Alaska Oil Leases
Bloomberg: ConocoPhillips Says More US Cuts to Alaska Plan Would Kill Project
E&E News: Oil Group Alleges Conflict Over Haaland Family's Advocacy
STATE UPDATES
E&E News: North Dakota Blasts Feds’ Use Of Social Cost Of Carbon
InsideClimate News: Residents Fear New Methane Contamination as Pennsylvania Lifts Its Gas-Drilling Ban in the Township of Dimock
CLIMATE FINANCE
CNBC: The new top House Republican overseeing markets isn’t as ‘anti-ESG’ as some in GOP want
OPINION
IEFFA: Latest TC Energy oil spill confirms the wisdom of denying a permit for the Keystone XL pipeline
The Hawk Eye: Open your eyes, West Point, the CO2 pipeline is closer than you think
Gate City Daily: Pipeline serves no public purpose
Washington Examiner: Don't let the pipelines get 'stuck in the pipeline'
JD Supra: FERC's Reservation Charge Crediting Policy Imperils Gas Service Reliability – There Is a Better Way
PIPELINE NEWS
Associated Press: Company: Regulators OK reopening of Kansas pipeline segment
JOHN HANNA, 12/23/22
“The operator of a pipeline that spilled about 14,000 bathtubs' worth of heavy crude oil into a northeastern Kansas creek said Friday that it has permission from U.S. government regulators to reopen the repaired segment where the rupture occurred,” the Associated Press reports. “Canada-based TC Energy did not say exactly when it would reopen the section of its Keystone pipeline system from Steele City near the Nebraska-Kansas border to Cushing in northern Oklahoma. The company said it will have crews working through the Christmas holiday and also conducting “rigorous testing and inspections.” “This will take several days,” the company said in a statement. “We will continue to prioritize the safety of people and the environment.” The Dec. 7 spill forced the company to shut down the Keystone system and dumped about 14,000 barrels of crude into a creek running through rural pastureland in Washington County, about 150 miles (240 kilometers) northwest of Kansas City. Each barrel is 42 gallons, the size of a household bathtub. The company and government officials have said drinking water supplies were not affected, and no one was evacuated. However, Kansas City's KCUR-FM reported this week that the Kansas Department of Health and Environment found chemicals from the spill downstream past two earthen dams constructed to contain the oil, potentially endangering animals that ingest it… “Concerns that spills could pollute waterways spurred opposition to plans by TC Energy to build another crude oil pipeline in the same system, the 1,200-mile (1,900-kilometer) Keystone XL, across Montana, South Dakota and Nebraska. President Joe Biden's cancelation of a permit for the project led the company to pull the plug last year. The company has not identified the Kansas spill's cause. Zack Pistora, who lobbies at the Kansas Statehouse for the Sierra Club, told AP the pipeline segment shouldn't reopen until the cause is known. “Isn't the next spill just an accident waiting to happen?” he told AP… “Meanwhile, some Democrats in the Republican-controlled Legislature want to reconsider the state's policy of exempting companies from local property taxes for 10 years if they build pipelines through Kansas to spur energy development. Democratic Gov. Laura Kelly told The Topeka Capital-Journal in an interview this week that the policy was "a big mistake" and should have been reconsidered "a long time ago."
Reuters: U.S. pipeline regulator reviewing special permits after Keystone oil spills
Nia Williams and Rod Nickel, 12/21/22
“The U.S. pipeline regulator launched a review this year of its special permits that waive certain operating requirements for pipelines, following a government report into spills on TC Energy's Keystone oil pipeline, a source familiar with the told Reuters. “The review for U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) highlights growing questions by legislators about whether such permits contribute to spills. The most recent major spill occurred this month in rural Kansas along Keystone, the only U.S. oil pipeline with a special permit to operate at higher pressure. TC shut the 622,000 barrel-per-day pipeline, which has been operating for 12 years, after it spilled 14,000 barrels on Dec. 7, its third major spill in five years. PHMSA commissioned Oak Ridge National Laboratory, a Department of Energy research institution, to review special permits following a 2021 report on Keystone accidents, the source said. Laboratory spokesperson Sara Shoemaker declined to comment. The review includes the program itself and individual permits, including Keystone's, the source told Reuters. The review began with a meeting between PHMSA and the laboratory on Aug. 16, several months before Keystone's latest spill. TC has submitted a plan to restart the ruptured section of Keystone. In a statement, the company said Keystone's special permit was rigorously reviewed by government officials and pipeline experts, and its terms did not cause past incidents. The 2021 report to Congress by the U.S. Government Accountability Office (GAO) found that TC Energy performed worse than nationwide averages in the previous five years due to major spills in 2017 and 2019. PHMSA allowed Keystone to run at higher pressure than other pipelines starting in 2017, subject to 51 conditions. The latest Keystone spill raises doubts about whether PHMSA adequately assesses risk in granting special permits, Don Deaver, a pipeline consultant, told Reuters. "I don’t think they should give any (special permits)," Deaver told Reuters. "There’s problems with the rules we’ve already got. Pipelines operate at very high stress levels and they have very low tolerance for mechanical damage or defects." “...It's unlikely that PHMSA can properly enforce special permit conditions for the vast pipeline industry, Josh Axelrod, senior advocate at environmental group Natural Resources Defense Council, told Reuters. "I don't think PHMSA is staffed to justify (special permits) because it's not a big regulator and is responsible for tens of thousands of miles of pipeline," Axelrod told Reuters. "If they're relying on industry self-reporting or data, it's in industry's best interest to keep their pipeline operating.”
KCUR: Pipeline company says Kansas oil spill contained, but chemicals found downstream
Celia Llopis-Jepsen, 12/22/22
“Chemicals from the Keystone pipeline spill in north-central Kansas have shown up farther downstream in Mill Creek than the oil company’s repeated statements suggest,” KCUR reports. “TC Energy and regulatory agencies say the oil spill is limited to a containment area — the length of the stream that lies between where the company’s pipeline burst and where workers quickly built an earthen dam about four miles downstream. Yet state environment officials say benzene, toluene and other volatile organic compounds have been detected beyond the two emergency dams that were installed after the Keystone pipeline’s worst environmental accident to date. The contamination that migrated downstream of the four-mile, oil-soaked stretch of Mill Creek poses a threat to animals but not to human drinking water, the Kansas Department of Health and Environment said Wednesday. Two weeks after the Dec. 7 spill, contamination levels remain below a threshold for acute harm to aquatic life, a spokesperson confirmed by email, but they could hurt wildlife that ingests the chemicals through the food chain. Last Thursday, an official who directs state efforts at the pipeline spill told members of the Kansas Water Authority that public drinking supplies remain safe. “The downstream public water supply intakes are far enough downstream that — and I never want to say this — (the contamination) will experience a lot of dilution before it gets there,” Erich Glave told KCUR. “Dilution is not the solution, but (drinking water) is protected at this point.” Mill Creek flows into the Little Blue River, about 10 miles from the Washington County spill site. The Little Blue flows into the Big Blue River, which feeds Tuttle Creek Reservoir near Manhattan. The state says the levels of benzene and other chemicals “remain below our standards in the Little Blue River and downstream in Tuttle Creek Reservoir.” “.... More than 600 workers are at the site, including those crews and people from various state and federal agencies… “TC Energy hasn’t answered questions from the Kansas News Service about how it will detect or protect against underwater dilbit migration. The state says water exiting the dammed area doesn’t contain visible oil.”
Topeka Capital-Journal: After Keystone oil spill, Kansas governor calls pipeline property tax exemption 'a big mistake'
Jason Tidd
“After the Keystone pipeline spilled 14,000 barrels of crude oil onto Kansas pasture and into a creek, Gov. Laura Kelly is on board with reconsidering the state's property tax exemption for pipelines,” the Topeka Capital-Journal reports. "I thought we should have done that a long time ago," Kelly told The Capital-Journal on Tuesday. "Yeah, that, I think, was a mistake that we made. ... I think that was a big mistake to provide a property tax exemption." “...Ending the tax exemption is likely on a short list of what state lawmakers could do in response to the oil spill as the pipeline falls under federal regulation. Meanwhile, Sen. Mike Thompson, R-Shawnee and the Senate's top energy policymaker, has expressed reluctance to do more than hold hearings. TC Energy has benefited from several million dollars worth of tax exemptions since it opened in 2011 and before. State lawmakers passes a package of tax benefits for various energy projects as part of an effort to woo the Keystone pipeline to Kansas… “Kansas statute 79-227 exempts new oil and natural gas pipelines from property taxes from the start of construction until 10 years after construction is completed… “No other states along the Keystone route had such a property tax exemption. Other provisions in the gut-and-go 21-page bill created income tax credits and accelerated depreciation. It included refineries, pipelines, coal power plants, ethanol plants and fertilizer plants. Legislative staff estimated the pipeline provisions of the law would result in $1.7 million in lost revenue for fiscal year 2009, the only year with an estimate. The figure assumed the Keystone pipeline would qualify. But by 2012, officials had estimated that TransCanada was avoiding about $19 million in a single year of property taxes.”
Roanoke Times: Amended Forest Service guidelines could remove Mountain Valley Pipeline roadblock
12/23/22
“The George Washington and Jefferson National Forests issued a revised environmental impact statement Friday that could remove a major obstacle to completion of the Mountain Valley Pipeline,” the Roanoke Times reports. “The U.S. Forest Service has proposed new construction guidelines that, if adhered to, would enable the 303-mile intrastate natural gas pipeline to traverse a 3.5-mile section of the Jefferson National Forest in Giles and Montgomery counties, the project’s final missing link. The revised environmental impact statement considered two alternatives. One would have taken no action to revise the regulations, which could have dealt the controversial project a potential death blow. It would have required the project to remove sections of pipe currently stored above ground and to restore soil and vegetation altered by digging or timbering. The second alternative, which the Forest Service has recommended, would “allow for the construction, operation, and maintenance” of the pipeline… “That 188-page document proposes amended guidelines which, if adopted and followed, the Forest Service said would minimize the short- and long-term environmental effects of building and maintaining the 42-inch diameter underground pipeline… “A 45-day comment period on the amended statement began Friday. After that, the Forest Service will publish a final version of the environmental impact statement.”
KELO: Navigator gets no answer on a fourth public meeting
Bob Mercer, 12/20/22
“A lawyer for Navigator Heartland Greenway has acknowledged the company didn’t comply with a South Dakota requirement when it failed to notify more than 200 landowners along the route of a proposed carbon dioxide pipeline,” KELO reports. “James Moore of Sioux Falls reported the problem in a recent email letter to the South Dakota Public Utilities Commission. State law requires timely notice to landowners within one-half mile of a proposed pipeline’s route. The proposed pipeline originally was planned to serve the Valero plant near Aurora, South Dakota. Landowners were missed when laterals to the Poet plants near Chancellor and Hudson became part of the application, according to Moore. He said Navigator sent 1,052 letters to landowners providing notice of the application and the commission’s informational meetings, but should have sent 1,256. Moore requested that the commission set an additional public-input meeting for the missed landowners that would be held virtually… “They’ve made the mistake. They have to decide how they’re going to fix it,” commissioner Kristie Fiegen said about Navigator. Said landowners lawyer Brian Jorde of Omaha, Nebraska, “I think the commission’s going the right direction on this.”
SDPB Radio: Proposed carbon pipeline could be pushed back over PUC hearing date
Marissa Brunkhorst, 12/22/22
“The South Dakota Public Utilities Commission is considering pushing back a hearing date for approval of a carbon capture pipeline, potentially delaying the development of the project,” SDPB Radio reports. “...PUC staff suggested the months of April or May for the hearings. Summit Carbon Solutions, the company developing the pipeline, supported that timeframe. But in their latest meeting, some commissioners suggested pushing back the hearing to September or even later due to concern from landowners. A timeframe that late could jeopardize Summit’s hopes of starting construction in 2023… “The commission agreed to revisit the issue at their next meeting in January.”
Oelwein Daily Register: Fayette Co. updating pipeline ordinance
MIRA SCHMITT-CASH, 12/26/22
“After meeting with the Fayette County Board of Supervisors on Dec. 5, County Planning and Zoning Administrator Catherine Miller said she will continue to work on a draft updating the county’s pipeline ordinance “not specific to any type of material,” the Oelwein Daily Register reports. “We have one. It’s very very ancient,” Miller said, noting the ordinance says a pipeline “has to be (300) feet from an occupied house.” “...No action was taken on the pipeline ordinance update at the Dec. 5 supervisors meeting, minutes state… “At the Dec. 1 Planning and Zoning meeting, “Commission members noted the inherent dangers of a CO2 pipeline versus other pipelines such as rural water,” according to meeting minutes Miller provided. “Per the Board of Supervisors, Miss Miller is looking for a draft pipeline ordinance to cover all pipelines, not just one specific pipeline.” The board of supervisors would like to see a general pipeline ordinance, “not specific to any type of material,” Miller clarified for the Daily Register… “The nearby Bremer County Planning and Zoning Commission is working toward updating its ordinance for land use to plan for hazardous liquid pipelines setting minimum distances with advice from an attorney. A hearing was held Dec. 6 on the proposed updates.”
KMA: Opponents encourage Page County board to intervene in proposed carbon dioxide pipelines
Ethan Hewett, 12/22/22
“Opponents of proposed carbon dioxide pipelines in Iowa continue to voice their objections in Page County,” KMA reports. “During its regular meeting earlier this week, the Page County Board of Supervisors heard comments from two residents regarding Summit Carbon Solutions' proposed Midwest Express CO2 pipeline and a possible ordinance… “Imogene resident Marty Maher reported back to the supervisors from an Iowa Utilities Board meeting that included oral arguments related to safety and preemption issues and a scheduling conference related to Summit's proposal. Maher says the pipeline companies, including Summit, want the utilities board to refrain from considering safety concerns in their decision… “Maher says Summit and other proponents point to the federal regulations for the pipeline in place through the Pipeline Hazardous Materials Safety Administration. However, Maher says those rules are primarily for worker and participating facility member safety. "The only other standard they have is 50 feet from a residence if the pipeline is covered by 12 inches of dirt," Maher emphasized. "So, there are no setbacks, requirements, or concerns for city wells, city sewer systems, schools, hospitals, nursing homes, rural residences, or livestock facilities. There are no considerations for any of them from PHMSA." Thus, Maher says a local county ordinance is needed to provide those necessary protections for the residents, county, and any cities near the project. However, Supervisor Chuck Morris did have some doubts about the authority county ordinances would hold when the IUB is the body ultimately deciding on the project's permit application. "I heard from an Iowa Utilities Board attorney at ISAC, and he may as well of just come out and say 'we're going to allow eminent domain,' in my perception of what was said and how it was said," said Morris. "I think that there's great amount of political pressure and too many favors are owed by public officials, that I think they'll approve it." Nonetheless, Montgomery County resident Jan Norris urged the county to adopt an ordinance and get involved in what is starting to become a statewide effort.”
TMJ4: We Energies no longer requesting customers 'immediately' lower thermostats after pipeline failure
12/24/22
“We Energies is no longer asking customers to lower their thermostats. The company said the amount of natural gas being delivered as of Saturday morning was back to levels that should meet all customers' needs,” TMJ4 reports. “"We Energies made a conservation request of customers after the Guardian pipeline, which provides natural gas to our distribution network, experienced a significant equipment failure — reducing the amount of fuel they committed to send by 30%.As a result of our customers’ support, no customer lost the ability to heat their home," We Energies said in a statement. Previous story: We Energies is asking customers to "immediately" lower their thermostats after one of its natural gas suppliers suffered a "significant equipment failure." The utility company is asking people to lower their thermostats to the range of 60 to 62 degrees. "The impacted pipeline is one of multiple sources We Energies uses to receive natural gas," We Energies explained in a news release. "On a typical day, an issue like this would not require customers to reduce their usage. However, with extreme cold setting in over much of the United States, We Energies is unable to receive additional natural gas from its other pipeline suppliers." Customers are also urged to reduce their natural gas use by avoiding other natural gas appliances like fireplaces, dryers, or ovens. Customers are encouraged to take the following steps, provided verbatim by We Energies: Set thermostats between 60 to 62 degrees. Add layers or blankets to keep warm when lowering a thermostat’s temperature. Close blinds or drapes at night and avoid opening doors to retain heat. Open blinds during the day to let in heat from the sun. Avoid using secondary natural gas heating sources, such as natural gas fireplaces. Use natural gas ranges sparingly. Prepare food with slow cookers or microwaves. Taking these steps "will allow customers to stay safe, warm and help avoid a significant natural gas outage," We Energies says. The utility says this shortage is expected to last at least for the duration of Friday, and they will re-assess on Saturday.”
KIII: Up to 3,800 gallons of light crude oil spills into Corpus Christi Bay from cracked pipeline
Haley Williams, Michael Gibson, 12/26/22
“The U.S. Coast Guard Sector Corpus Christi pollution responders are monitoring an oil spill in the La Quinta Channel in Corpus Christi Bay,” KIII reports. “Officials with the U.S. Coast Guard said around 3,800 gallons of light crude oil spilled into the water from a cracked pipeline near the Flint Hills Ingleside facility over the holiday weekend. A safety zone has been set up "to protect personnel, vessels, and the marine environment from potential hazards created by product released in the water," officials with the USCG said. The zone is outlined in red in the below image. Coast Guard marine scientist Stephen McConnell said he has been on the scene since the incident and told 3NEWS what he thought happened to the pipe. "Right now we are still investigating it, but it would seem that a pipe did rupture in three different places because of the light crude oil and water mixture," McConnell said. "It probably froze and expanded that pipe in those sections." "...No wildlife have been reported oiled," McConnell told 3NEWS. "The main spill happened around Pier 5, and the bulk of that has all been cleaned up right now. There's just a tiny light sheen but the bulk of the product that was the heaviest has been cleaned up." Flint Hills said it is paying for the cleanup, and will then begin its investigation into how the oil spilled out into the La Quinta Channel to start with.”
NBC San Diego: Gasoline Pipeline Serving San Diego Shut Down After Leak Found
Renee Schmiedeberg, 12/23/22
“A gasoline leak was found Tuesday evening in one of the pipeline segments that sends gasoline to San Diego customers, causing the pipeline to be shut down for repairs, according to Katherine Hill, Senior Communications Specialist at Kinder Morgan, a company which specializes in owning and controlling oil and gas pipelines,” NBC San Diego reports. “A gasoline leak was found at the Iron-Wood Nine Golf Course in Cerritos, specifically in its segment that serves customers in San Diego, Hill told NBC. The impacted pipeline has been isolated and shut down. Kinder Morgan is investigating the source of the leak and are starting to clean up, Hill added. On Thursday morning, Kinder Morgan issued this update: "We are working around the clock to excavate the impacted pipeline segment and assess and plan for the necessary repairs. Air monitoring is ongoing at the site. We continue to be in close contact with our customers and the appropriate regulatory agencies as we work to resolve this issue." By Friday, the company estimated the repair would be completed by Dec. 31. Air monitoring is continuing at the site, Hill told NBC.
Long Island News 12: Sinkhole forces closure of Woodlands Legacy Park in Yorktown
12/27/22
“A popular park in Yorktown will be closed for the foreseeable future after a sinkhole formed there Christmas Eve,” Long Island News 12 reports. “Yorktown Town Supervisor Matt Slater tells News 12 that the sinkhole in Woodlands Legacy Park is about 30 feet deep and 10 feet in diameter. He says the cause is being investigated by Enbridge Gas which manages a gas pipeline that runs through the area, and that the pipeline remains operational. Slater says the park will likely remain closed for several weeks until all issues are resolved, and the park is safe. Residents are urged to avoid the area.”
Reuters: Pipeline blast kills at least one Pemex worker in central Mexico
12/21/22
“At least one worker from Mexico's state oil company Pemex died on Wednesday in a fuel pipeline explosion in the central state of Hidalgo, local officials said on Twitter,” Reuters reports. “Media outlet Reporte Indigo posted a video online showing a large fire lighting up the night sky from the pipeline blast near the town of Xolostitla, Hidalgo. Some nearby residents were also being evacuated, according to a tweet from Mexico's National Guard.
Pipestone Star: Pipeline under Monument shut down
Kyle Kuphal, 12/21/22
“Workers were digging north of Pipestone the week of Dec. 13 as part of the process to finalize the decommissioning of a half-mile section of pipeline under Pipestone National Monument and the U.S. Fish and Wildlife Service land to the north of the Monument,” the Pipestone Star reports. “Garrison Haning, director of government and media affairs with Magellan Midstream Partners, which owns the pipeline, told the Star the workers were isolating the segment of pipeline under the federal property so it will no longer be connected to the rest of the pipeline that runs from Sioux Falls to Marshall. The isolated segment will remain under the federal land… “The decision to decommission the section of eight-inch diameter pipeline under the federal land, which transported refined petroleum products and had been in use since 1947, was announced earlier this year. The decision was made in an effort to protect what is considered a sacred area and to minimize industry impacts. “Pipestone’s sacred landscape is better protected as a result of the pipeline being decommissioned and we appreciate Magellan’s many years of coordination with our agencies to resolve the situation,” Pipestone National Monument Superintendent Lauren Blacik told the Star. “The quarry landscape is sacred to many Native American tribes and protected resources in the area of the now-decommissioned pipeline include archaeological sites, the remains of the Pipestone Indian School, Pipestone Creek, the sundance grounds, remnant and restored tallgrass prairie, and federally threatened and endangered plant and animal species.”
Canadian Press: Trans Mountain pipeline fine for bird disturbances upheld while penalty slashed
12/23/22
“A review panel is upholding a fine against the Trans Mountain pipeline for violations that resulted in disturbing bird nests,” the Canadian Press reports. “But the Canada Energy Regulator is dramatically slashing the amount of the penalty from $88,000 in the original ruling to $4,000. In February, the regulator found the pipeline company hadn’t given its contractors enough environmental training. That resulted in the destruction or disturbance of the nests of three robins and one Anna’s hummingbird. Trans Mountain appealed the ruling, but a majority of the panel agreed with the investigator who laid the charge. In its written decision, the panel concluded Trans Mountain broke the rules by failing to adequately implement environmental safeguards it had promised.
Argus Media: New pipelines may boost Canadian heavy
Sam Duffy, 12/22/22
“Canadian heavy sour crude discounts are poised to narrow in 2023 as additional pipeline capacity helps de-bottleneck infrastructure strained by record-setting oil sands production,” Argus Media reports. “Alberta's oil sands producers have now surpassed pre-pandemic levels, leading to excess capacity on Enbridge's 3mn b/d Mainline resulting from the completion of the Line 3 Replacement Project (L3RP) dissipating. Shippers now look to the completion of the Trans-Mountain expansion (TMX) project to draw nominations away from the 3mn b/d Mainline and alleviate pipeline congestion. The additional arbitrage opportunities created by TMX project and increased pipeline space on the Mainline will push Canadian heavy crude prices higher, as record supply encounters demand from new markets. The TMX project — expected to be complete in the third quarter 2023 — is set to add 590,000 b/d of capacity to the pipeline, up from its current capacity of 300,000 b/d… “Apportionment on Enbridge's Mainline typically supported crude-by-rail movements but the completion of the Trans-Mountain expansion in 2023 will give shippers access to new markets, reducing the demand for space on the Mainline, reducing demand for crude-by-rail, and opening up arbitrage opportunities in Asia.”
JD Supra: FERC Initiates New Review on Contracts Between Oil Pipelines and Their Affiliates
Akin Gump Strauss Hauer & Feld LLP, 12/23/22
“On December 15, 2022, the Federal Energy Regulatory Commission (FERC) voted to issue a Proposed Policy Statement on Oil Pipeline Affiliate Committed Service (the “Proposed Policy Statement”) in a new docketed proceeding in PL23-1-000,” JD Supra reports. “The Proposed Policy Statement addresses whether contractual commitments for oil or liquids pipeline transportation comply with the Interstate Commerce Act (ICA) when, following a public open season, the only shipper to agree to the noticed service is an affiliate of the regulated pipeline (“Affiliate Contracts”). If adopted, it would create a rebuttable presumption that Affiliate Contracts are unduly discriminatory and not just and reasonable in certain circumstances and require a pipeline to produce additional evidentiary support for Affiliate Contract rates and terms. This follows a trend of increased scrutiny by FERC on affiliated contracts across all industries it regulates. Initial comments on the Proposed Policy Statement will be due on or before February 13, 2023, with reply comments due on March 30, 2023.”
WASHINGTON UPDATES
E&E News: McConnell Doubts Permitting Reform Will Pass Next Year
JEREMY DILLON, KELSEY BRUGGER, 12/21/22
“Senate Minority Leader Mitch McConnell on Tuesday discounted the chances of Congress passing a bipartisan permitting reform bill next year,” E&E News reports. “The Kentucky Republican’s comments are the latest in a series of setbacks for Energy and Natural Resources Chair Joe Manchin (D-W.Va.) in his quest to speed up the permitting timeline for energy projects. Manchin’s permitting reform proposal has seen multiple high-profile flops over the past three months, including Republicans’ blocking its inclusion in the defense authorization bill last week. McConnell told E&E consensus on permitting will likely be difficult next year in a divided Congress. When pressed on whether he sees any chance of the bill moving forward in 2023, McConnell told reporters, ‘Honestly, not really,’ ‘This is a huge problem,’ he said, referring to permitting delays. ‘It’s the reason so many projects in this country take forever. ... I think real permitting reform is really important, and hopefully, there’s an opportunity to go forward. Manchin’s bill didn’t actually achieve it, unfortunately.’ McConnell led the contingent of Senate Republicans who opposed Manchin’s permitting overhaul, citing concerns that it didn’t do enough to curb lingering timelines on environmental reviews.”
InsideEPA: Appeals Court Dismisses Environmentalists’ Challenge To Trump NEPA Rule
12/22/22
“A federal appellate court has dismissed as unripe a challenge environmentalists brought over sweeping rollbacks the Trump administration made to its National Environmental Policy Act (NEPA) implementing rule, stymieing their efforts to challenge the rule, which largely remains in effect as the Biden administration works on additional revisions,” InsideEPA reports. “In a Dec. 22 ruling in Wild Virginia, et al. v. Council on Environmental Quality (CEQ), et al., a three-judge panel of the U.S. Court of Appeals for the 4th Circuit unanimously upheld a district court ruling that had previously dismissed the environmentalists’ challenge to the Trump-era NEPA rules on standing grounds. ‘The wisdom of these policy changes is not before us. As a matter of fact, we have no license to consider the merits of the challenge to the rulemaking,’ the panel said. ‘The only question before us is whether the district court had jurisdiction to consider this particular challenge. . . . We agree with the district court that it did not.’ In response, Kym Hunter of the Southern Environmental Law Center, who argued the case on behalf of the petitioners, says her clients are disappointed by the decision but ‘will continue to push for a return to a robust NEPA process which is essential to ensure that communities have a voice in decisions that affect them.”
E&E News: Lawsuit Targets Interior NEPA Review Of Alaska Oil Leases
Pamela King, 12/22/22
“Environmental groups on Wednesday asked a federal court to stop the Interior Department from moving forward with an Alaska oil lease sale that was reinstated by Congress in landmark climate legislation,” E&E News reports. “In their complaint filed in the U.S. District Court for the District of Alaska, the groups argue that the Interior Department violated the National Environmental Policy Act when it approved the sale of nearly 1 million acres of federal waters for drilling in the Cook Inlet. They say Interior’s Bureau of Ocean Energy Management failed to account for the impact of Lease Sale 258 — slated to take place Dec. 30 — on climate change and local wildlife. ‘Our coastal communities have stood up repeatedly to say ‘no’ to oil and gas leasing in Lower Cook Inlet. This is our home, not a sacrifice zone,’ said Taylor Kendal Smith, communications director for Cook Inletkeeper, the lead challenger in the case. ‘There would be little to gain in terms of affordable energy and much to lose in habitat, tourism, fisheries and beauty,’ Smith continued. ‘Lower Cook Inlet is worth far more — both in economic and cultural senses of value — intact and protected than with oil platforms and pipelines.’ The Biden administration, which has promised to address the climate impacts of the federal oil- and gas-leasing program, canceled the lease sale in May but revived it in August after Congress passed the Inflation Reduction Act.”
Bloomberg: ConocoPhillips Says More US Cuts to Alaska Plan Would Kill Project
Jennifer A Dlouhy, 12/20/22
“The head of ConocoPhillips’s Alaska operations signaled the company would walk away from an $8 billion oil project in the Arctic if the US government forced it to further scale down drilling to just two locations, saying that would no longer be economically viable,” Bloomberg reports. “The warning comes as pressure intensifies on President Joe Biden to block the proposed Willow project in Alaska from environmentalists who say the warming world can’t afford to burn the estimated 600 million barrels of crude it could yield.”
E&E News: Oil Group Alleges Conflict Over Haaland Family's Advocacy
Heather Richards, 12/22/22
“Oil and gas interests are criticizing Interior Secretary Deb Haaland over her child’s advocacy for greater drilling protections in northern New Mexico,” E&E News reports. “The Interior Department is currently weighing a 20-year moratorium on new oil and gas leasing within 10 miles of the Chaco Culture National Historical Park, an area with deep historical significance to Pueblo people that is also rich with natural gas deposits. Somáh Haaland, who like their mother is from the pueblos of Laguna and Jemez, recently joined a group of Indigenous advocates and community leaders in Washington to speak to members of Congress about banning oil and gas outside of the park. Somáh Haaland is the media organizer for the Pueblo Action Alliance, which works on environmental issues in Indigenous communities. They were also the narrator of the film ‘Our Story: The Indigenous-Led Fight to Protect Greater Chaco,’ about local organizing to bar continued drilling on the Chaco landscape. During the recent Washington trip, Sen. Martin Heinrich and Rep. Teresa Leger Fernández, both New Mexico Democrats, spoke briefly at a Dec. 14 screening of the film, according to a press release from WildEarth Guardians. Both are supporters of the ‘Chaco Cultural Heritage Area Protection Act of 2022,’ which would permanently end leasing withing 10 miles of the park.”
STATE UPDATES
E&E News: North Dakota Blasts Feds’ Use Of Social Cost Of Carbon
Mike Lee, 12/21/22
“North Dakota officials plan to challenge the Biden administration’s use of the social cost of carbon to calculate greenhouse gas emissions from federal oil leases,” E&E News reports. “The state said Tuesday that it will argue that the Bureau of Land Management is overestimating carbon’s social cost and underestimating the taxes and other benefits the state would receive from federal leases in the state. The North Dakota Industrial Commission approved a draft of the comments it will submit as part of an ongoing environmental assessment BLM is undertaking. The commission is made up of three state officials, all of them Republicans — Gov. Doug Burgum, Agriculture Commissioner Doug Goehring and Attorney General Drew Wrigley.”
InsideClimate News: Residents Fear New Methane Contamination as Pennsylvania Lifts Its Gas-Drilling Ban in the Township of Dimock
Jon Hurdle, 12/23/22
“Residents of a Pennsylvania town famous for its flammable tap water fear another round of methane contamination after state officials lifted a 12-year ban on drilling for natural gas beneath their feet,” InsideClimate News reports. “The state’s Department of Environmental Protection signed an agreement with Coterra Energy, allowing it to restart harvesting natural gas from a nine-square-mile “box” beneath Dimock in northeastern Pennsylvania, where the company’s predecessor, Cabot Oil and Gas, was ejected in 2010 after contaminating numerous private water wells with methane. Victoria Switzer, a long-time Dimock resident and an outspoken opponent of the gas industry, told ICN she was “depressed and disappointed” by the new consent agreement because it will end the DEP’s testing of her water every three months, and replace that with testing by Coterra. She’s also worried that plugging more than a dozen old wells in the township will result in the renewed migration of methane into people’s water wells. She argued that DEP should not have allowed a resumption of drilling in a gas-rich area of Pennsylvania’s Marcellus Shale field until residents were connected to the promised public water system. “The opening of the box should not occur until water is flowing into the homes of the impacted residents and any other family that wants peace of mind when it comes to their life source: their water,” she told ICN.
CLIMATE FINANCE
CNBC: The new top House Republican overseeing markets isn’t as ‘anti-ESG’ as some in GOP want
Tim Mullaney, 12/21/22
“Republicans hoping that red-state campaigns against green investing might go national as their party takes over Congress next month may be in for a disappointment,” CNBC reports. “Incoming House Financial Services chairman Patrick McHenry, a North Carolina Republican, gave no indications he plans to push a federal version of new state laws designed to isolate firms that focus on so-called ESG investing, which emphasizes the environmental, social or corporate governance records of companies they invest in, when he spoke at the recent CNBC CFO Council Summit in Washington. D.C. to an audience of top chief financial officers from companies across the market. He also pushed back against being characterized as a “vocal opponent” of ESG. “I don’t think that’s a proper characterization of my view,” McHenry said in an interview with CNBC Senior Congressional Correspondent Ylan Mui. He is concerned about corporations leaning into politics and potentially away from a focus on the bottom line for shareholders and beneficial owners, “and they are doing so for the sake of Washington regulatory permission. What I think corporations should do is focus on their key knitting,” he said. States led by Texas and West Virginia have passed laws that purport to ban state agencies from doing business with financial firms that “boycott” fossil fuels. The world’s largest money managers including BlackRock and State Street Global Advisors have been under pressure from the right wing and last week testified in Texas about ESG and climate investments. Vanguard Group also had been scheduled to testify, but after the fund giant abandoned an investment industry climate alliance, that changed. McHenry, rated as one of the most moderate House Republicans by non-profit GovTrack US, doesn’t seem interested in the state approach. Instead, he told CNBC, he’ll focus on oversight of a pending Securities and Exchange Commission rule that is set to force companies to make detailed disclosures about greenhouse gas emissions in their operating business, their use of electricity from carbon-burning sources like coal and natural gas, and emissions produced when people and other companies use their products. “Some legislation being kicked around is misguided,” McHenry told CFOs. “It plays politics with corporations, in the name of having corporations not play politics.”
OPINION
IEFFA: Latest TC Energy oil spill confirms the wisdom of denying a permit for the Keystone XL pipeline
Suzanne Mattei, 12/19/22
“TC Energy has long complained that it should have been allowed to build a massive “Keystone XL” oil pipeline from Canada into the United States,” Suzanne Mattei writes for IEFFA. “When it failed to convince the Biden administration that the international pipeline was necessary, it reacted to the denied permit by filing a questionable international arbitration claim—still being reviewed—against the United States for $15 billion, an exorbitant amount of money. But TC Energy’s efforts to portray itself as a responsible pipeline builder and manager are under new scrutiny, because its existing Keystone pipeline has become the source of a large oil spill in rural Kansas… “The spill occurred in the Cushing extension of the Keystone pipeline system, which runs from a Steele City pump station to a Hope pump station. The PHMSA reports the 36-inch diameter Cushing extension was completed in 2011. Pipelines often have lifespans measured in decades—why did this spill occur in a relatively new area of the pipeline? Second, this incident comes nearly a year and a half after the Government Accountability Office issued an in-depth report on the pipeline’s repeated and worsening spill record and the various PHMSA orders requiring safety measures. Yet despite its history of high-profile failures, TC Energy clearly has failed to master oil spill prevention. The length of the shutdown is uncertain, but it provides yet another example of the failure of the fossil fuel industry to live up to its claims of reliability… “This newest oil spill indicates that the risk factor is still a significant issue. TC Energy’s objections to the denial of the Keystone XL pipeline notwithstanding, the Biden administration’s decision not to issue a presidential permit for the pipeline was well-advised. The latest oil spill on the existing Keystone pipeline is further evidence of the prudence of the decision.”
The Hawk Eye: Open your eyes, West Point, the CO2 pipeline is closer than you think
Amber Johnson, West Point,12/23/22
“Since the Keystone Pipeline became operational in 2010, there have been 22 leaks and ruptures. The latest Keystone Pipeline rupture, which occurred in early December, was the biggest inland oil spill on American soil in over a decade. With the recent rupture of the Keystone pipeline, Iowans should question the safety of the proposed CO2 pipelines coming thru our great state,” Robin Delaney writes for The Hawk Eye. “Carbon dioxide pipelines are dangerous and are currently under regulated… “A video of a test rupture of an 8” CO2 pipe, showing how the CO2 spreads across the ground can be found online by googling “dense phase CO2 8” NB pipeline rupture video”. I highly recommend that everyone view this video, while keeping it in mind that the Navigator pipeline will have sections of pipe that are 24”, three times the size of the test rupture pipe. The 45Q carbon tax credits are enticing private investors to build CO2 pipelines across Iowa. The three greedy private investors Navigator, Summit and Wolf/ADM are set to make in excess of $39 billion combined on these projects. Of the three CO2 pipelines planning on building in Iowa, Navigator alone is the largest beneficiary of the tax credits, set to make $15,300,000,000 on their pipeline project. But, in order to do so, these companies need our land. They have been attempting to buy easements from landowners, but the landowners realize the dangers of these pipelines and hatve been unwilling to sign easements. If the Iowa Utility Board (a three member panel of non-elected officials) approves the construction of these hazardous CO2 pipelines, landowners will ultimately face condemnation by eminent domain. Not only are they taking our land to make billions of dollars, but all tax paying citizens in the nation will be funding these projects… “I live just outside of West Point. The route of the proposed Navigator CO2 pipeline will cut diagonally across my farm, and be less than 700 feet from my house. The pipeline route will be 1,400 feet from the West Point Care Center. How quickly do you think the elderly and or wheelchair bound residents in our nursing home can be evacuated by our volunteer fire department?.. “How are emergency response teams supposed to know how to respond when a leak or rupture occurs? It seems as if they intentionally want to keep us in the dark. Whether the pipeline will be on your land or not, it can still affect you. You may have a family member or friend in close proximity of the pipeline, you may be either a volunteer fire fighter or an emergency responder, maybe you work in a location close to the pipelines or maybe your child or grandchild attends a school near it… “Objections to the pipelines are a good place to start, but we also need to be urging our city and county officials to enact zoning requirements, similar to that of Shelby County, to keep us all safe and to guard our land from the risk of eminent domain.”
Gate City Daily: Pipeline serves no public purpose
Russell McVeigh, Hamilton, Illinois, 12/27/22
“Unlike natural gas pipelines or fuel pipelines, CO2 pipelines that are being proposed to run through Hancock County and 12 other Illinois counties serve no public purpose,” Russell McVeigh writes for the Gate City Daily. “Granting eminent domain to projects like this would mean eminent domain could be used for any number of projects for which it was never intended. A county supervisor found through research that the pipeline would remove just 1/25th of 1% of carbon dioxide emissions in the atmosphere. Is it worth the risk? In addition to safety concerns, the use of eminent domain by Navigator and other pipeline owners to obtain easements from landowners who decline the request. A CO2 pipeline that ruptured near Sartartia, Mississippi, in 2020 released a cloud of CO2 over the community, resulting in the hospitalization of 49 people and evacuation of around 300 people (https:lltinyurl.com/mw5bajvc). If the CO2 pipeline would happen to break close to you, gasoline and diesel vehicles would not run because of the lack of oxygen. Bottom line: Heartland Greenway only cares about making money.”
Washington Examiner: Don't let the pipelines get 'stuck in the pipeline'
Chuck Johnson is an attorney and member of the energy practice group at Frost Brown Todd in Charleston, West Virginia, 12/22/22
“It’s common to say that something is “stuck in the pipeline,” by which we mean "held up in the bogged-down bureaucratic process." But what do we say when a pipeline is stuck in the pipeline? I don’t know, but we sure have a problem with that,” Chuck Johnson writes for the Washington Examiner. “The pipeline permitting process has become one of the most frustrating and exhausting endeavors anyone can get involved with in the United States. Proposed pipeline projects go through many levels of regulatory reviews over where they are sited and whether they pose potential environmental problems or threats to endangered species. Those issues certainly need to be addressed, but the problem is the system we have today requires them to be addressed over and over again. It seems as though no decision by a regulatory agency or court is ever final. It just leads to another appeal, or a new lawsuit is filed once construction is initiated… “The regulatory process could be streamlined while still giving opponents sufficient avenues to register their objections and without cutting off public debate. Different regulatory agencies could work in parallel simultaneously to expedite the process. Specific time frames could be established. The regulatory process could have some sort of finality that would limit further review after all the issues have been addressed and administrative hurdles have been cleared. Criteria could be modified so that challenges could go forward only on issues not already considered… “Also, anyone who is inclined to think that curbing pipeline construction generally is better for the environment than permitting pipelines to be built should consider that natural gas and oil also can be transported by trucks and trains.. “For the sake of the nation’s security and energy future, as well as people’s pocketbooks, Congress should act soon to reform the regulatory process. We can’t afford to have our pipelines continue to get stuck in the permitting pipeline.”
JD Supra: FERC's Reservation Charge Crediting Policy Imperils Gas Service Reliability – There Is a Better Way
Davis Wright Tremaine LLP, 12/23/22
“It is a bedrock principle of natural gas pipeline regulation that pipelines can only sell up to the transportation capacity of their systems on a firm basis,” Davis Wright Tremaine LLP writes for JD Supra. “In return, shippers who want such firm service pay "recourse rate" reservation charges which enable the pipeline to recover all of its costs to provide service, plus make a profit. If a pipeline cannot provide firm service, due to a force majeure event, for example, it is required to reimburse its firm shippers by issuing reservation charge credits for each day service is interrupted after a safe harbor period of up to 10 days has elapsed. With the Federal Energy Regulatory Commission's (FERC) blessing, however, the number of pipelines limiting their obligation to pay reservation charge credits for firm service interruptions has increased considerably, even as these pipelines sell more firm service on their systems. Over the last decade, FERC has allowed pipelines to modify their tariffs to eliminate reservation charge credit payments for firm services priced at negotiated or discounted rates. FERC reasons that if a shipper values the receipt of these credits, it can renegotiate its contract and pay the higher recourse rate and thus regain the right to receive reservation charge credits if its firm service is interrupted in the future. FERC's misguided policy approach creates a powerful incentive for pipelines to enter into more negotiated or discounted rate contracts in order to insulate themselves from paying reservation charge credits when firm service is interrupted… “The current scenario is untenable and risks further degrading firm service reliability. To address this problem, we believe FERC should jettison its current policy of curtailing all firm service on a pro rata basis without regard to rates. Instead, FERC should consider allowing economic signals to control the capacity allocation process more fully.”