oil

Tue, 2014-06-17 07:28Ben Jervey
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Tar Sands on the Tracks: Railbit, Dilbit and U.S. Export Terminals

Last December, the first full train carrying tar sands crude left the Canexus Bruderheim terminal outside of Edmonton, Alberta, bound for an unloading terminal somewhere in the United States.

Canadian heavy crude, as the tar sands is labeled for market purposes, had ridden the rails in very limited capacity in years previous — loaded into tank cars and bundled with other products as part of so-called “manifest” shipments. But to the best of industry analysts’ knowledge, never before had a full 100-plus car train (called a “unit train”) been shipped entirely full of tar sands crude.

Because unit trains travel more quickly, carry higher volumes of crude and cost the shipper less per barrel to operate than the manifest alternative, this first shipment from the Canexus Bruderheim terminal signaled the start of yet another crude-by-rail era — an echo of the sudden rise of oil train transport ushered in by the Bakken boom, on a much smaller scale (for now).

This overall spike in North American crude-by-rail over the past few years has been well documented, and last month Oil Change International released a comprehensive report about the trend. As explained in Runaway Train: The Reckless Expansion of Crude-by-Rail in North America (and in past coverage in DeSmogBlog), much of the oil train growth has been driven by the Bakken shale oil boom. Without sufficient pipeline capacity in the area, drillers have been loading up much more versatile trains to cart the light, sweet tight crude to refineries in the Gulf, and on both coasts.

Fri, 2014-05-30 15:35Farron Cousins
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Life Saving Regulations Stalled In Bureaucratic Abyss

There is an unspoken rule in American politics: when you have bad news to deliver, do it on a Friday afternoon.  This helps to ensure that fewer people will see it, fewer will have time to analyze it, and the media will forget all about it over the weekend.  If you really want the issue to die, release it on a Friday before a holiday weekend, and that’s exactly what the Obama administration did last week when they released their bi-annual Unified Agenda of Regulatory and Deregulatory Actions.

The Unified Agenda reads like a laundry list of proposed safety regulations from nearly all the major regulatory agencies.  Digging into the Department of the Interior section of that list, you will find countless stalled regulations pertaining to the dirty energy industry, some of which have been in limbo since the days of the former Bush administration

Ben Geman at National Journal explains:

Wed, 2014-05-21 16:14Mike G
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Estimates of Recoverable Oil in California's Monterey Shale Slashed 96%

Last year, a post here on DeSmog asked: “Could California's Shale Oil Boom Be Just a Mirage?

For now, the answer appears to be a resounding yes.

According to the LA Times, the US Energy Information Administration (EIA) is set to announce next month that it is officially downgrading its estimate of the oil reserves in California's Monterey Shale from 13.7 billion barrels to 600 million barrels — a 96% decrease.

Modern technology, it seems, is just not up to the task. The EIA will issue its new estimate after reviewing output from oil operations using the latest technologies like fracking and acidization, which eats away rock.

“From the information we've been able to gather, we've not seen evidence that oil extraction in this area is very productive using techniques like fracking,” said John Staub, a petroleum exploration and production analyst with the EIA, according to the LA Times.

At one point, the Monterey Shale was expected to fuel a new “black gold rush” in the Golden State. Initial estimates in 2011 put the amount of recoverable oil from the Monterey Shale at 15.4 billion barrels. The EIA revised this number down to 13.7 billion in 2012, which was still some two-thirds of shale reserves in the entire US.

As the LA Times notes, “The estimate touched off a speculation boom among oil companies. The new findings seem certain to dampen that enthusiasm.”

Environmentalists reacted to news of the downgrade with some relief but little surprise. 

“The oil had always been a statistical fantasy,” says geoscientist J. David Hughes of the Post Carbon Institute, who published a report last December that was critical of the EIA estimates. Hughes' findings were based on an analysis of actual oil production data from the Monterey Shale, which drastically underperformed the industry's projections.

While several of the major oil companies have been wary all along, not everyone is giving up so easily. It's not that the oil isn't there, it's just that the Monterey Shale's unique geography presents challenges for which existing methods have no answer, and there may yet be a technological innovation that will allow the exploitation of the Monterey Shale's reserves.

“As the technologies change, the production rates could also change dramatically,” Tupper Hull, a spokesman for the Western States Petroleum Assn., told the LA Times

Mon, 2014-05-12 10:21Ben Jervey and Steve Horn
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"No Turning Back:" Mexico's Looming Fracking and Offshore Oil and Gas Bonanza

After generations of state control, Mexico’s vast oil and gas reserves will soon open for business to the international market.

In December 2013, Mexico’s Congress voted to break up the longstanding monopoly held by the state-owned oil giant Petroleos Mexicanos — commonly called Pemex — and to open the nation’s oil and gas reserves to foreign companies.

The constitutional reforms appear likely to kickstart a historic hydraulic fracturing (“fracking”) and deepwater offshore oil and gas drilling bonanza off the Gulf of Mexico.

“This reform marks a major breakthrough in Mexico’s economic history only comparable to the signing of the North America Free Trade Agreement (NAFTA) in 1992,” international investing and banking giant Banco Bilbao Vizcaya Argentaria (BBVAwrote in a January 2014 economic analysis.

What does this mean for the oil and gas industry in Mexico? And for the workers and those who live above these oil and gas plays or along the pipeline routes that will funnel the liquids to refineries? And how about for the Earth’s atmosphere?

Can Mexico’s fossil fuel infrastructure handle the boom? Can the country spare the precious freshwater supplies needed for thirsty fracking operations in an era of increasingly severe droughts and drinking water shortages? Can environmental, safety and public health regulations possibly keep up with this industrial boom?

DeSmogBlog will examine all these issues and more as Mexico opens its fossil fuel reserves to international exploitation in the weeks and months ahead. But, first, an overview of the state of play in Mexico’s energy reforms.

Mon, 2014-05-05 10:33Steve Horn
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For First Time, TransCanada Says Tar Sands Flowing to Gulf in Keystone XL South

TransCanada admitted for the first time that tar sands oil is now flowing through Keystone XL's southern leg, now rebranded the Gulf Coast Pipeline Project. The company confirmed the pipeline activity in its 2014 quarter one earnings call.

Asked by Argus Media reporter Iris Kuo how much of the current 300,000 to 400,000 barrels per day* of oil flowing from the Cushing, Oklahoma to Port Arthur, Texas pipeline is tar sands (“heavy crude,” in industry lingo), TransCanada CEO Russ Girling confirmed what many had already suspected.

“I don’t have that exact mix, but it does have the ability to take the domestic lights as well as any heavies that find a way down to the Cushing market, so it is a combination of the heavies and the lights,” said Girling. “I just don’t know what the percentage is.”

The Keystone Pipeline System — of which Keystone XL's northern leg is phase four of four phases — is and always has been slated to carry Alberta's tar sands to targeted markets. So the announcement is far from a shocker.


Image Credit: Wikimedia Commons

More perplexing is why it took so long for the company to tell the public that tar sands oil now flows through the half of the pipeline approved via a March 2012 Executive Order by President Barack Obama

Mon, 2014-04-28 12:14Ben Jervey
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Oil Industry Cherry-Picks Drilling Data to Mislead Public on Federal Lease Programs

The oil industry and its well-compensated apologists in Congress like to complain that the Obama administration is stalling oil production on public lands. The problem with that argument: it’s demonstrably false.

While plenty of environmental advocates may wish that President Obama was actively working to keep the fossil fuel reserves underground, the data tells a much different story.

In fact, according to new data released by the Department of the Interior, the amount of crude oil produced on onshore federal lands in 2013 was the highest it has been in over a decade.

This hasn’t stopped the oil industry from “distorting and cherry-picking statistics,” in the words of the Center for Western Priorities, to argue for even fewer regulations and more lax permitting processes.

A recent post on the The Daily Caller is representative of the oil industry's spin, and provides a tutorial in cherry-picking data.

The total number of oil and gas drilling leases issued in 2013 reached a nearly three-decade lows, according to the Bureau of Land Management. The bureau says it issued 1,468 drilling leases last year, totaling 1.17 million acres of federal land — the lowest figures since 1988, which is the oldest year for which the BLM has data.

Overall, U.S. oil production has boomed in recent years, but production on federal lands has been falling. The Congressional Research Service reports that oil production on federal lands fell from 1,731,500 barrels per day in 2009 to 1,627,400 barrels per day in 2012, and the total shareof crude oil produced on federal lands fell to 26 percent in 2012 from 33 percent in 2009.

Let’s unpack this a bit.

Thu, 2014-04-17 12:02Steve Horn
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Interview: Big Men Director Rachel Boynton on Oil, Ghana and "Responsible Capitalism"

The subtitle of the newly released documentary film Big Men is “everyone wants to be big” and to say the film covers a “big” topic is to put it mildly.

Executive produced by Brad Pitt and directed by Rachel Boynton, the film cuts to the heart of how the oil and gas industry works and pushes film-watchers to think about why that's the case. Ghana's burgeoning offshore fields — in particular, the Jubilee Field discovered in 2007 by Kosmos Energy — serve as the film's case study.

Image Credit: Ghana Oil Watch

Boynton worked on the film for more than half a decade, beginning the project in 2006 and completing it in 2013. During that time, the Canadian tar sands exploded, as did the U.S. hydraulic fracturing (“fracking”) boom — meanwhile, halfway around the world, Ghana was having an offshore oil boom of its own.

Mon, 2014-04-14 10:44Mike G
Mike G's picture

Why Isn’t Petcoke Regulated As a Public Health Threat?

Last year, a train leaving a Valero refinery in Benicia, CA derailed while carrying petroleum coke, also known as petcoke, a toxic byproduct of the crude oil refining process. None of the petcoke spilled that day as a result of the derailment, thankfully, but that doesn’t mean Benicia residents can breathe any easier.

Locals already have their concerns about the way petcoke is handled in their community and are questioning what public health impacts it might have. But California and federal law have a long way to go before they can be said to be adequately addressing those concerns.

Marilyn Bardet has been dealing with this issue ever since the 1980s, when she helped fend off a Koch Industries proposal to build a petcoke terminal in Benicia. (A smaller facility was eventually built in nearby Pittsburgh, CA, and it operates to this day.) But that early success didn’t mean the fight against petcoke was over for Mrs. Bardet and her fellow Benicians—far from it.

A friend of Mrs. Bardet’s who runs a business near the train tracks that lead in and out of the Valero refinery was able to easily scoop all of this petcoke right off the tracks “in one go”:

Tue, 2014-04-08 09:21Indra Das
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More Than 100 Scientists and Economists Call on President Obama to Reject the Keystone XL Pipeline

Keystone XL protest

More than 100 scientists and economists “concerned about climate change and its impacts” signed an open letter Monday calling on U.S. President Barack Obama and Secretary of State John Kerry to reject the proposed Keystone XL pipeline project, which would transport oilsands crude from Alberta to refineries on the Gulf Coast, mainly for export.

The signers “urge [President Obama and Secretary Kerry] to reject the Keystone XL tar sands oil pipeline as a project that will contribute to climate change at a time when we should be doing all we can to put clean energy alternatives in place.”

The letter, signed by prominent leaders in science and economics, is the latest addition to an already strong and growing opposition to the Keystone XL project in the U.S., including 2 million public comments sent to President Obama and a previous open letter signed last month by over 200 business leaders and entrepreneurs asking for the rejection of the pipeline.

Fri, 2014-04-04 12:07Don Lieber
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Spills, Explosions, Earthquakes and War: Welcome to American Energy “Independence”

A well-deserved show of gratitude to the efficient and reliable fossil fuel sources of American energy independence — oil, coal and gas — is in order, following a truly remarkable string of success stories in recent days nationwide.      

On March 25, the BP refinery in Whiting, IN, leaked some 1,600 gallons of crude oil about eight miles upstream from a main drinking water inlet to Chicago. (As of this writing, investigators have not yet determined if the oil is conventional crude or heavy tar sands.)

Three days prior, on March 22, nearly 170,000 gallons of bunker fuel oil spilled into Galveston Bay, TX, from a barge, soiling one of the nation’s busiest export terminals with one of the heaviest, stickiest forms of oil on Earth. As a result, 20 containment vessels were dispatched. 

And five days before that, on March 17, a Sunoco-owned oil pipeline leaked 20,000 gallons into the Oak Glen Nature Preserve in Ohio, some 20 miles from Cincinnati. To be fair, the leak was only ‘discovered’ on March 17. Nobody knows when the leak actually began, and the true amount of oil leaked will be impossible to conclude.   

These impressive gains by the oil industry, however, pale in comparison to the string of breakthroughs achieved in the coal industry in recent days in North Carolina.

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