Bakken Shale

Tue, 2015-03-24 15:58Steve Horn
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Purposeful Distraction? Unpacking the Oil Refiners' "Bomb Trains" Lawsuit vs. Warren Buffett's BNSF

On March 13, American Fuel & Petrochemical Manufacturers (AFPM) — the oil refiners' trade association — sued oil-by-rail carrying giant Burlington Northern Santa Fe (BNSF) for allegedly violating its common carrier obligation under federal law. A DeSmogBlog investigation has revealed there may be more to the lawsuit than initially meets the eye.

Filed in the U.S. District Court for the Southern District of Texas, Houston Division, AFPM sued BNSF “for violating its common carrier obligation by imposing a financial penalty” for those carrying oil obtained via hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin and other hazardous petroleum products in explosion-prone DOT-111 rail cars.

AFPM's beef centers around the fact that BNSF began imposing a $1,000 surcharge for companies carrying explosive Bakken fracked oil in DOT-111 cars, as opposed to “safer” CPC-1232 cars, at the beginning of 2015.

The Warren Buffett-owned BNSF did so, argues AFPM, illegally and without the authority of the federal government.

“This $1,000 surcharge on certain PHMSA-authorized rail cars breaches BNSF’s common carrier duty to ship hazardous materials under the auspices of PHMSA’s comprehensive regime governing hazardous materials transportation,” wrote AFPM's legal team, featuring a crew of Hogan Lovells attorneys. “Allowing railroads to penalize companies that ship crude oil in federally-authorized rail cars would circumvent PHMSA’s statutory and regulatory process for setting rail car standards for hazardous materials shipments.”

Upon a quick glance, it seems like a fairly straight-forward case of federal law and an intriguing example of an intra-industry dispute. But as recent history has proven, the devil is in the details.

Wed, 2015-03-04 19:03Steve Horn
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Iowa Republican Lawmaker: Rick Perry’s Involvement With Bakken Oil Pipeline “A Bad Idea”

By David Goodner and Steve Horn 

Everyday Iowa voters are less likely to caucus for former Texas governor and potential presidential candidate Rick Perry “because of his involvement” with a controversial oil pipeline proposal, according to an influential state lawmaker who has made eminent domain one of his signature issues in the Iowa House of Representatives.

Politically speaking, I am not sure there is as much upside for him to be involved as there is downside,” Iowa state representative Bobby Kaufmann (R-Wilton) told DeSmogBlog. “People would likely not vote for him for being involved with the pipeline.” 

Last month, DeSmogBlog broke news that Perry’s appointment to the Board of Directors of Energy Transfer Partners (ETP) could cost him support in the Iowa Caucuses. Energy Transfer Partners is a Texas-based company whose subsidiary, Dakota Access, LLC, has petitioned the state of Iowa to build a pipeline to transport up to 575,000 barrels per day of oil obtained from North Dakota's Bakken Shale via hydraulic fracturing (“fracking”)

Kaufmann’s statement to DeSmogBlog marks the first public criticism of Perry on this issue by a sitting Republican lawmaker. It also comes on the heels of Perry’s scheduled March 7 return to Iowa to speak at the Iowa Ag Summit alongside other likely Republican presidential candidates.

Kaufmann’s remarks to DeSmogBlog also come in the aftermath of Iowa’s paper of record, The Des Moines Register, releasing a poll finding that 74 percent of Iowans are opposed to the use of eminent domain to build the pipeline.

I think any presidential candidate’s association with eminent domain could be unhelpful” to them in the Iowa Caucuses, Kaufmann said. 

Wed, 2015-02-25 04:58Sharon Kelly
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As Oil Prices Collapse, North Dakota Considers Weakening Standards on Radioactive Drilling Waste

As the collapse of oil prices threatens North Dakota's shale drilling rush, state regulators are considering a move they say could save the oil industry millions of dollars: weakening the state's laws on disposing of radioactive waste.

The move has been the subject of an intensive lobbying effort by drillers, who produce up to 75 tons per day of waste currently considered too hazardous to dispose of in the state.

For every truckload of that waste, drillers could save at least $10,000 in hauling costs, they argue. State regulators calculate that by raising the radioactive waste threshold ten-fold, the industry would shave off roughly $120 million in costs per year.

But many who live in the area say they fear the long-term consequences of loosened disposal rules combined with the state's poor track record on preventing illegal dumping.

“We don't want to have when this oil and coal is gone, to be nothing left here, a wasteland, and I'm afraid that's what might happen,” farmer Gene Wirtz of Underwood, ND told KNX News, a local TV station. “Any amount of radiation beyond what you're already getting is not a good thing.”

Environmental groups have also objected that the rule change would put private companies' profits before public health.

“The only reason we're doing this today is to cut the oil industry's costs,” Darrell Dorgan, spokesman for the North Dakota Energy Industry Waste Coalition, which opposes the move, told Reuters.

Tue, 2015-02-17 15:55Guest
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VIDEO: Young Iowan Questions Rick Perry on Fracked Oil Pipeline Ties at Town Hall Meeting

By David Goodner

When 24-year old Iowa native Kevin Rutledge first heard that former Texas governor and potential Republican Party presidential candidate Rick Perry had been appointed to the Board of Directors of Energy Transfer Partners, which is attempting to build a pipeline carrying oil obtained via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale through his home state, he was hopping mad.

So on February 16, Rutledge decided to drive three hours from Des Moines to Sioux City, Iowa and ask Rick Perry face-to-face about his ties to the company during a town hall meeting at Morningside College.

Rutledge is from Ottumwa, Iowa and the proposed route of a new Dakota Access crude oil pipeline would cut right through the heart of the southeast Iowa county where he grew up, potentially impacting his home community with oil spills, polluted waterways, and damaged farmland.

Iowans and Americans are tired of not being listened to because we don’t have millions of dollars to influence politicians,” Rutledge told DeSmogBlog. “I heard about ties between Rick Perry, Iowa Governor [Terry] Branstad, and the Bakken oil pipeline and immediately knew this was an opportunity for me to ask him a question about it and bring this issue into light.”

Sun, 2015-02-08 19:41Guest
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GOP Activists: Rick Perry's Bakken Oil Pipeline Ties Could Cost Him Iowa Caucus Support

By David Goodner

Former Texas governor Rick Perry's recent appointment to the board of Energy Transfer Partners, a company attempting to build a Bakken oil pipeline through Iowa, could hurt him in the first-in-the-nation Republican Party caucus if he decides to run for president, according to a conservative Iowa Republican activist and a DeSmog analysis of the political landscape.

Energy Transfer Partners (ETP) appointed Perry to its Board of Directors on February 3. ETP is a Texas-based company whose subsidiary corporation, Dakota Access, LLC, has petitioned the state of Iowa to build a pipeline carrying up to 575,000 barrels per day of oil obtained via North Dakota's Bakken Shale basin hydraulic fracturing (“fracking”) fields.  

The news about Perry's board appointment and its tie-in to the Iowa Caucus highlights the complicated terrain the issue will create for some Republicans in Iowa. It is a “political hot potato,” as DeSmog's Steve Horn wrote, and it is possible questions about the pipeline will arise in caucus politics leading up to 2016.  

Permitting plans in Iowa by Energy Transfer Partners and Dakota Access, LLC have sparked resistance from environmental activists and family farmers, the latter of whom often vote Republican, as well as from the libertarian wing of the GOP. Libertarian Republicans are often concerned about property rights and the potential abuse by government of eminent domain laws to confiscate private land for corporate profit.

“If Rick Perry is going to compete in Iowa this year, this could definitely be a big factor that could hurt him,” Jeff Shipley, a young Republican from Fairfield, Iowa, told DeSmogBlog. Shipley is a Republican activist, organizer, and former statehouse candidate for the Iowa GOP who has worked on presidential campaigns and with county and state party leaders for years. His home in Fairfield is located in Jefferson County, one of 18 Iowa counties sitting along the proposed pipeline route.

Jeff Shipley Iowa
Photo Credit: Shipley for Iowa

“This is a for-profit corporation that is going to try and use the force of government to steal farmers property,” Shipley told DeSmogBlog. “That runs contrary to typical conservative values.”

Fri, 2015-02-06 17:28Steve Horn
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Facing Felony Charges, Rick Perry Joins Board of Energy Transfer Partners, Owner of Proposed Oil Pipeline Across Iowa

Additional Reporting by David Goodner

Former Texas Republican Governor Rick Perry has joined the board of directors at Energy Transfer Partners, a natural gas and propane company headquartered in Dallas, Texas that has proposed to build a controversial Bakken crude oil pipeline across Iowa.

The announcement, which appeared in Energy Transfer Partners' February 3 Form 8-K filing to the U.S. Securities and Exchange Commission (SEC), comes as Perry faces two Texas state-level felony charges for abuse of power. Perry pleaded not guilty to both charges and District Judge Bert Richardson recently ruled against dismissing Perry's case.  

“It isn't immediately clear how much Perry will be paid for his board position,” explained the Texas Tribune. “According to regulatory filings published on the company's website, non-employee board directors were paid $50,000 a year in 2013.”

Despite the felony charges, Perry is still strongly considering a 2016 presidential run, according to a recent article published by the Associated Press, which reported he may make a final decision on whether or not to run by May. 

The Energy Transfer Partners filing to the SEC describes Perry's appointment: 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 3, 2015, James R. (Rick) Perry was appointed as a director of Energy Transfer Partners, L.L.C., the general partner of Energy Transfer Partners GP, L.P., which is the general partner of Energy Transfer Partners, L.P. (the “Partnership”). Mr. Perry served as the Governor of Texas from 2000 until 2015.
 
There are no arrangements or understandings with the Partnership, or any other persons, pursuant to which Mr. Perry was appointed as a director of Energy Transfer Partners, L.L.C. Mr. Perry is not currently expected to be named to any committees of the board of directors of Energy Transfer Partners, L.L.C. At this time, the Partnership is not aware of any transactions, since the beginning of the Partnership’s last fiscal year, or any currently proposed transactions, in which the Partnership was or is to be a participant involving amounts exceeding $120,000, and in which Mr. Perry had or will have a direct or indirect material interest. Consistent with other non-employee members of the Board of Directors, Mr. Perry will be eligible to receive cash compensation for his service on the Board of Directors and equity compensation under the Second Amended and Restated 2008 Long-Term Incentive Plan, as described in the Definitive Proxy Statement on Schedule 14A filed by the Partnership with the SEC on October 24, 2014.
 
Fri, 2015-01-23 04:58Steve Horn
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Federal Court Order: Explosive DOT-111 "Bomb Train" Oil Tank Cars Can Continue to Roll

A U.S. federal court has ordered a halt in proceedings until May in a case centering around oil-by-rail tankers pitting the Sierra Club and ForestEthics against the U.S. Department of Transportation (DOT). As a result, potentially explosive DOT-111 oil tank cars, dubbed “bomb trains” by activists, can continue to roll through towns and cities across the U.S. indefinitely.  

“The briefing schedule previously established by the court is vacated,” wrote Chris Goelz, a mediator for the U.S. Court of Appeals for the Ninth Circuit. “This appeal is stayed until May 12, 2015, or pending publication in the Federal Register of the final tank car standards and phase out of DOT-111 tank cars, whichever occurs first.”

Order to Delay DOT-111 Bomb Trains Case
Image Credit: U.S. Court of Appeals for the Ninth Circuit

Filing its initial petition for review on December 2, the Sierra Club/ForestEthics lawsuit had barely gotten off the ground before being delayed.

Sun, 2014-12-14 15:38Steve Horn
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Revealed: How Big Oil Got Expedited Permitting for Fracking on Public Lands Into the Defense Bill

The U.S. Senate has voted 89-11 to approve the Defense Authorization Act of 2015, following the December 4 U.S. House of Representatives' 300-119 up-vote and now awaits President Barack Obama's signature.

The 1,616-page piece of pork barrel legislation contains a provision — among other controversial measures — to streamline permitting for hydraulic fracturing (“fracking”) on U.S. public lands overseen by the Bureau of Land Management (BLM), a unit of the U.S. Department of Interior.

Buried on page 1,156 of the bill as Section 3021 and subtitled “Bureau of Land Management Permit Processing,” the bill's passage has won praise from both the American Petroleum Institute (API) and the Independent Petroleum Association of America (IPAA) and comes on the heels of countries from around the world coming to a preliminary deal at the United Nations climate summit in Lima, Peru, to cap greenhouse gas emissions.

We applaud the Senate…and are hopeful the president signs this measure in a timely fashion,” said Dan Naatz, IPAA lobbyist and former congressional staffer, in a press release

Alluding to the bottoming out of the global price of oil, Naatz further stated, “In these uncertain times of price volatility, it’s encouraging for America’s job creators to have regulatory certainty through a streamlined permitting process.”

Streamlined permitting means faster turn-around times for the industry's application process to drill on public lands, bringing with it all of the air, groundwater and climate change issues that encompass the shale production process. 

At the bottom of the same press release, IPAA boasted of its ability to get the legislative proposal introduced initially by U.S. Sen. Tom Udall (D-NMas the BLM Permit Processing Improvement Act of 2014 after holding an “educational meeting” with Udall's staffers. Endorsed by some major U.S. environmental groups, Udall took more than $191,000 from the oil and gas industry during his successful 2014 re-election campaign.

IPAA's publicly admitted influence-peddling efforts are but the tip of the iceberg for how Big Oil managed to stuff expedited permitting for fracking on U.S. public lands into the National Defense Authorization Act of 2015.

Sun, 2014-10-26 22:45Steve Horn
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Drilling Deeper: New Report Casts Doubt on Fracking Production Numbers

Post Carbon Institute has published a report and multiple related resources calling into question the production statistics touted by promoters of hydraulic fracturing (“fracking”)

By calculating the production numbers on a well-by-well basis for shale gas and tight oil fields throughout the U.S., Post Carbon concludes that the future of fracking is not nearly as bright as industry cheerleaders suggest. The report, “Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom,” authored by Post Carbon fellow J. David Hughes, updates an earlier report he authored for Post Carbon in 2012.

Hughes analyzed the production stats for seven tight oil basins and seven gas basins, which account for 88-percent and 89-percent of current shale gas production.

Among the key findings: 

-By 2040, production rates from the Bakken Shale and Eagle Ford Shale will be less than a tenth of that projected by the Energy Department. For the top three shale gas fields — the Marcellus Shale, Eagle Ford and Bakken — production rates from these plays will be about a third of the EIA forecast.

-The three year average well decline rates for the seven shale oil basins measured for the report range from an astounding 60-percent to 91-percent. That means over those three years, the amount of oil coming out of the wells decreases by that percentage. This translates to 43-percent to 64-percent of their estimated ultimate recovery dug out during the first three years of the well's existence.

-Four of the seven shale gas basins are already in terminal decline in terms of their well productivity: the Haynesville Shale, Fayetteville Shale, Woodford Shale and Barnett Shale.

-The three year average well decline rates for the seven shale gas basins measured for the report ranges between 74-percent to 82-percent. 

-The average annual decline rates in the seven shale gas basins examined equals between 23-percent and 49-percent. Translation: between one-quarter and one-half of all production in each basin must be replaced annually just to keep running at the same pace on the drilling treadmill and keep getting the same amount of gas out of the earth.

Wed, 2014-08-20 07:00Justin Mikulka and Steve Horn
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Big Rail Cites Bin Laden, Al Qaeda to Fend Off Oil-by-Rail Route Transparency

While many states around the U.S. have released information to the public about the frequency and routes of trains carrying oil obtained from hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin, holdouts still remain. 

Why the delay? Homeland security concerns, claim some companies. 

In an ongoing Maryland court case over the issue of transparency for in-state oil-by-rail routes, a July 23 affidavit from Carl E. Carbaugh — director of infrastructure security for Norfolk Southern — goes into extensive detail about the supposed risk presented by terrorism attacks on “Bomb Trains.” 

In so doing, Carbaugh mentions Al-Qaeda. 

The most recent edition of Inspire magazine, March 2014, the online, English-language propaganda publication of [Al-Qaeda in the Arabian Peninsula], presents a full-page collage depicting varied images…in order to construct an explosive device,” reads Carbaugh’s affidavit

Among these images are a derailed passenger train and a partly covered note paper listing cities in the [U.S.] as well as the terms ‘Dakota’ and ‘Train crude oil.’” 

Carbaugh also cited Osama bin Laden, the late Al-Qaeda international ring-leader, in his affidavit.

Among the materials seized in the May 1, 2011, raid on Osama bin Laden’s compound in Abbottabad, Pakistan, were notes indicating interest in ‘tipping’ or ‘toppling’ trains — that is causing their derailment,” Carbaugh wrote.

Osama Bin Laden Compound Diagram; Image Credit: Wikimedia Commons

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