Bad News, for Coal & Crude

Coal miner by Jan Truter used under CC BY-NC-ND 2.0

Federal Coal Sales Moratorium Shakes Industry Stronghold

• By MEAD GRUVER AND MATTHEW BROWN, ASSOCIATED PRESS via ABC News

GILLETTE, Wyo. — Feb 1, 2016, 9:43 AM ET  

Signs of economic troubles first appeared a few years ago, when drilling for natural gas trapped in water-saturated coal seams went bust. Thousands of wells were idled as companies shifted focus to fracking for gas in Texas and the Northeast.Then last year, mining company Alpha Natural Resources filed for Chapter 11 bankruptcy. Industry giant Arch Coal Inc. followed in early January. Each company has two major mines in Wyoming. Arch's Black Thunder mine ranks among the largest in the world.
Less than a week after the Arch bankruptcy came the Obama administration moratorium on new coal lease sales.

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"All these rules and regulations just make it harder to conduct business," said Susan Doop, owner of a local alternative therapy business. "Everything he (Obama) does to make it more costly to do business makes it harder. People are losing their jobs."
Doop and her husband, Marlin, who owns an auto body shop, already are seeing the changes. He just spent three weeks focused exclusively on repairing a Ford Super Duty pickup truck from a coal mine that had a crushed cab and bent frame.
A $15,000 check he got from Arch the same week the company filed for bankruptcy bounced. He said he can't afford health insurance and was going to use the money to pay for another round of treatments for advanced liver and colon cancer.

FIVE STORIES TO WATCH IN THE ARCH COAL BANKRUPTCY

Big executive bonuses; shafting workers and the environment; and more. Via Sightline

In case you somehow missed the news, Arch Coal, North America’s second largest coal company, filed for bankruptcy a few weeks back. Arch’s management hopes to use bankruptcy protection to shed $4.5 billion in debt—money that Arch borrowed from investors near the peak of the coal market, but that the company can’t pay back now that coal prices have tumbled.
To anyone paying attention, Arch’s insolvency came as no surprise. The company hadmissed a bond interest payment in mid-December after unsuccessful negotiations with creditors. Besides, coal industry bankruptcies are a dime a dozen at this point: Alpha Natural Resources, the #4 coal company in the US, declared bankruptcy in August; Walter Energy declared itself insolvent back in July; and Patriot Coal filed for Chapter 11 protection in October, its second filing since 2012. All told, nearly 50 US coal mining companies have filed for bankruptcy protection since the beginning of 2012.
Arch’s bankruptcy obviously highlights the dire state of the industry’s finances. But it also raises important questions about public policy, fiscal responsibility, and the fate of the coal industry itself. 

Here are the top five stories that I’m going to keep my eye on as the Arch Coal bankruptcy unfolds. Read the article here 

As Coal topples, Crude also falters

Photo by Mark Ralston/AFP/Getty Images

The Syncrude oil sands extraction facility near the town of Fort McMurray in northern Alberta.

Once Unstoppable, Tar Sands
Now Battered from All Sides

Canada’s tar sands industry is in crisis as oil prices plummet, pipeline projects are killed, and new governments in Alberta and Ottawa vow less reliance on this highly polluting energy source. Is this the beginning of the end for the tar sands juggernaut?
by Ed Struzik via Environment360

In the summer of 2014, when oil was selling for $114 per barrel, Alberta’s tar sands industry was still confidently standing by earlier predictions that it would nearly triple production by 2035. Companies such as Suncor, Statoil, Syncrude, Royal Dutch Shell, and Imperial Oil Ltd. were investing hundreds of billions of dollars in new projects to mine the thick, highly polluting bitumen.
Eyeing this oil boom, Canadian Prime Minister Stephen Harper said he was certain that the Keystone XL pipeline — “a no-brainer” in his words — would be built, with or without President Barack Obama’s approval. Keystone, which would carry tar sands crude from Alberta to refineries along the Gulf of Mexico, was critical if bitumen from new tar sands projects was going to find a way to market.
What a difference 18 months makes. The price of oil today has plummeted to around $30 a barrel, well below the break-even point for tar sands producers, and the value of the Canadian dollar has fallen sharply. President Obama killed the Keystone XL project in November, and staunch opposition has so far halted efforts to build pipelines that would carry tar sands crude to Canada’s Pacific and Atlantic coasts.
The industry is suddenly weathering a perfect storm that analysts say has significantly altered its prospects.

Could Low Oil Prices Help Usher in a New Era?
Mark Trahant 1/27/16 Via Indian Country Today

Here is the problem: If the pipeline is built and the train system is upgraded there will be too much transportation capacity at current oil prices. So the railroad companies will have to seek out new customers. Or, as Sightline said, while “the projects are largely designed to transport and handle light shale oil from the Bakken oil formation in North Dakota … the infrastructure could also be used to export heavy Canadian oil.”
The idea of how much capacity — especially given the price of oil — is the wild card in any transportation scheme. Many projects were designed when oil prices were higher than $75 a barrel instead of around $30. Oil is a commodity and traded on international markets. That means it’s subject to the up and down of supply and demand. Currently there is far more oil supply than demand. A report by the International Energy Agency says last year “saw one of the highest volume increases in global oil demand this century, we have long believed that this could not be repeated in 2016. But, with crude oil prices plunging below $30/bbl, must we expect some boost to the rate of growth in 2016? Unfortunately, the New Year has been awash with pessimism about economic growth.”
And that means less economic growth — and less oil consumption. The IEA says that when Iran is fully online selling oil, and if other oil exporting countries maintain current production levels, the demand could exceed 1.5 million barrels a day and “unless something changes, the oil market could drown in over-supply.” So yes prices could go lower.

CA Passes Ambitious Energy Laws; Ikea Commits $1.13 Billion to Fight Climate Change

California passes ambitious laws on emissions and energy efficiency

More electricity from renewables, fewer gasoline-powered vehicles and lower power consumption by buildings mandated under ‘50-50-50’ agenda

Californian lawmakers want 50% of electricity from renewables and 50% less petroleum used on the roads by 2030. Photograph: David McNew/Getty Images

The Guardian   Anita Chabria  3 June 2015 modified on Thursday 4 June 2015

California lawmakers have passed a dozen ambitious environmental and energy bills setting high goals for reducing greenhouse gas emissions and petroleum use, and creating new standards for energy efficiency.

Dubbed the California climate leadership package, the 12 bills represent a Democratic-driven push in the Senate to advance an agenda of technological innovation and conservation that was put into play by an executive order by California Governor Jerry Brown in April. The package will next move to the assembly for debate.

One of the cornerstones of the program is SB 350, which calls for a “50-50-50” reduction in major areas of climate concern. It mandates a 50% reduction in petroleum use by vehicles by 2030, the equivalent of removing 36m cars and trucks from the road.

It also calls for 50% of the state’s electricity supply to be derived from renewable resources by that date, and 50% better energy efficiency in buildings through retrofits and upgrades.

“California has demonstrated our global climate leadership over the last decade,” said Senate president Kevin de Leon after the passage of SB 350. “These policies will further cement our leadership, further strengthen our economy and protect the health of our communities.”....    more here

IKEA Commits $1.13 Billion to Fight Climate Change and Invest in Renewable Energy

Lorraine Chow | June 4, 2015     EcoWatch

IKEA, a company known for its ready-to-assemble furniture, is also a leader in renewable energy and climate mitigation. The Swedish furniture giant today announced a massive $1.13 billion commitment to address the effects of global warming in developing countries.

IKEA is pledging $1.13 billion on renewable energy solutions, such as wind and solar, to support families and communities most impacted by climate change.

According to an announcement, the generous measure was made to accelerate the transition to a low-carbon economy and to support the communities most at risk. The massive $1.13 billion total is made up of combined pledges from the IKEA Group and the IKEA Foundation, the philanthropic arm of the group. The majority of the commitment (around $560 million) will be invested in wind energy and around $110 million is expected to be invested in solar up to 2020.

“Climate change is one of the world’s biggest challenges and we need bold commitments and action to find a solution,” said Peter Agnefjäll, IKEA Group president and CEO. “That’s why we are going all in to transform our business, to ensure that it is fit for the future and we can have a positive impact. This includes going 100 percent for renewable energy, by investing in wind and solar, and converting all our lighting products to affordable LED bulbs, helping many millions of households to live a more sustainable life at home.”

IKEA said it’s on track to become energy independent, producing as much renewable energy as it consumes in its buildings. The company, which has invested around $1.7 billion in wind and solar since 2009, has also committed to owning and operating 314 offsite wind turbines and has installed 700,000 solar panels on its buildings.....    more here

Other links:

North Dakota increases oil well inspections on flood threat

 

06/03/2015   By JAMES MacPHERSON     Fire Engineering

BISMARCK, N.D. (AP) — North Dakota regulators increased oil well inspections Wednesday because of flood threats and have told operators near the confluence of the Missouri and Yellowstone rivers to take precautions. Four nearby wells that have flooded in the past were being shut down as a precaution. Forecasters said recent rains could cause the water level near Williston to exceed the flood stage of 22 feet by the weekend...... more here
State denies permit for Baltimore crude oil terminal   By Jeff Barker    Baltimore Sun     June 3, 2015 The state Department of the Environment has denied, for now, a Houston-based company's application to permit crude oil to be shipped through its port of Baltimore terminal in Fairfield — a proposal that nearby residents say poses a safety threat.  ....     more here Pacific Northwest is likely the next big hub for oil and gas Puget Sound Business Journal

ND Officials should be held accountable for explosive unstabilized oil

Officials should be held accountable for decision to not use technology to make oil less explosive

 

By Don Nelson, Past Chair, Dakota Resource Council    on Mar 12, 2015  

Most people would understand that there is a very straight line between explosive cargo and cargo exploding. A few weeks ago, the Dakota Resource Council pointed out the obvious that since North Dakota officials have failed to make North Dakota oil safe enough, there is also a direct line of responsibility to them for North Dakota oil exploding in a West Virginia train derailment.

Unfortunately, instead of addressing the problem, some state editorial writers repeated off the wall name-calling. Sidestepping real safety questions, some people pushed “all or nothing” thinking and attacked the messenger — in this case the local community group, Dakota Resource Council.....

.... the daily spills of oil and hazardous waste, extreme wasting of gas through flaring, threats to landowners over pipeline easements, exploding trains of North Dakota oil and a host of crime and other problems continue to be a new part of our daily life.

So far, seven trains carrying North Dakota crude oil have exploded in North America, including one in Quebec, Canada, that killed 47 people. The response of North Dakota officials began with Helms proclaiming the state should do a white paper to refute the “myth” that North Dakota oil was overly explosive. Then, a train carrying North Dakota oil exploded in Casselton, N.D., 20 miles from downtown Fargo.

Long-time denial gave way to reluctant regulation. In December, new rules went into effect that require oil be conditioned to 13.7 pounds per square inch before it is loaded on to trains carrying the crude out of state. This was not much of an improvement, since most oil producers in the state already do that. The West Virginia explosion was pegged at 13.9 psi, almost identical to what North Dakota officials are calling good enough. The oil that exploded in Quebec was at 9.3 psi and safe standards are at less than 6 psi. Obviously, North Dakota still has a long way to go.....   

....The fact is North Dakota officials are allowing an explosive product to be sent by train across the continent. DRC pointed out the obvious when we stated that responsibility for the explosion of North Dakota oil in West Virginia was a direct line to Gov. Jack Dalrymple, R-N.D., and North Dakota officials who made the decision to let it happen. We believe public officials should be held accountable for their decisions.....  more here

 

Facing the challenges of fracking -- Science Daily

March 12, 2015    Marcellus shale extraction and its potential negative effects on the environment is the subject of a recent research, delving into the long term consequences fracking has on people, animals, and the environment.

 

ND's Meaningless New Bakken Oil Regs Will Keep Bomb Trains Rolling

North Dakota's Meaningless New Bakken Oil Regulations Will Keep Bomb Trains Rolling

 

Justin Mikulka  DeSmogBlog.com        12/11/14

New regulations purported to make Bakken crude safer for transport instead allow business as usual for the oil and rail industries moving explosive Bakken crude oil in unsafe DOT-111 rail cars.

The regulations announced Tuesday by the North Dakota Industrial Commission state that: “The goal is to produce crude oil that does not exceed a vapor pressure of 13.7 pounds per square inch (psi).”

There are two important things to note about this goal.

The first is that the vapor pressure of the oil that exploded in Lac-Megantic, Quebec, resulting in the death of 47 people, was under 10 psi and was described as being “as volatile as gasoline.” So the new regulations will permit oil that is significantly more volatile than the oil in the Lac-Megantic disaster to continue to be shipped by rail.

The second important thing to note is that almost all of the oil that the industry and regulators have sampled in the past year has been well below 13.7 psi. Of 99 samples taken in the Pipeline and Hazardous Materials Safety Administration’s sampling study, 94 were below 13.7 psi and the average psi for that study was 12.3 psi....

....[also]... the North Dakota Industrial Commission is aware that Bakken producers have not only been shipping dangerous oil that has high levels of natural gas liquids (NGLs), such as butane, that are part of the crude oil mixture as it comes out of the ground but that they have been actively adding such explosive NGLs to the oil prior to shipping it by rail.....  read more here

Informed comment by Ron Schalow:     [same link]

Railway Age called it on September 26th...

"The state’s (North Dakota) three-person Industrial Commission seems likely to adopt a set of industry-designed best practices. Simply put, North Dakotan crude will have to be lightly pressure-cooked to boil off a fraction of the volatile “light ends” before shipment."

This conditioning lowers the ignition temperature of crude oil—but not by much. It leaves in solution most of the culprit gases, including butane and propane.

Even the industry itself says conditioning would not make Bakken crude meaningfully safer for transportation, though it would make the state’s crude more consistent from one well to another.

The only solution for safety is stabilization, which evaporates and re-liquefies nearly all of the petroleum gases for separate delivery to refiners. Stabilization is voluntarily and uniformly practiced in the Eagle Ford formation in Texas..."--Railway Age

Ron Schalow
Fargo, North Dakota
The Coalition for Bakken Crude Oil Stabilization