unconventional oil

Wed, 2014-08-13 11:15Justin Mikulka and Steve Horn
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Rail CEOs to Investors: "Bomb Trains" Safe At Almost Any Speed

Burlington Northern Santa Fe (BNSF) recently said it would proceed with plans to increase speeds for oil-by-rail unit trains in Devil’s Lake, N.D. to 60 MPH from 30 MPH, despite opposition from local officials

BNSF’s announcement came merely a week after the Obama Administration announced its proposed regulations for trains carrying oil obtained via hydraulic fracturing (“fracking”) from North Dakota's Bakken Shale basin.  

The rail industry’s position on speed limits for “bomb trains” is simple: they continuously claim velocity has nothing to do with oil-by-rail accidents or safety.

For example, Big Rail — as revealed by DeSmogBlog — lobbied against all proposed oil train speed reductions in its dozen or so private meetings at the Obama White House before the unveiling of the proposed oil-by-rail regulations. 

Recent statements by rail industry CEOs during investor calls put the heads of many companies on record opposing oil-by-rail speed limits for the first time.

Thu, 2014-07-31 13:42Steve Horn
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Documents: Cheniere Fuels ALEC’s New Push for Fracked Gas Exports

Today, legislative and lobbyist members of the American Legislative Exchange Council (ALEC) voted on model legislation promoting both exports of gas obtained via hydraulic fracturing (“fracking”) and vehicles powered by compressed natural gas (CNG)

Dubbed a “corporate bill mill” by its critics, ALEC is heavily engaged in a state-level effort to attack renewable energy and grease the skids for exports of U.S. oil and gas. Today's bills up for a vote — as conveyed in an ALEC mailer sent out on June 25 by ALEC's Energy, Environment and Agriculture Task Force — are titled “Resolution In Support of Expanded Liquefied Natural Gas Exports“ and “Weights and Measures and Standards for Dispensing CNG and LNG Motor Fuels.” 

An exclusive investigation conducted by DeSmogBlog reveals that Cheniere — the first U.S. company to receive a final liquefied natural gas (LNG) export permit by the U.S. Federal Energy Regulatory Commission (FERC) — has acted as the lead corporate backer of the LNG exports model resolution. 

Further, Clean Energy Fuels Corporation, owned by energy baron T. Boone Pickens, of Pickens Plan fame, and trade associations it is a member of, served as the main pusher of the CNG model resolution.

ALEC has served as a key vehicle through which the fracking industry has curried favor and pushed for policies favorable to their bottom lines in statehouses nationwide. Now ALEC and its corporate backers have upped the ante, pushing policies that will lock in downstream demand for fracked gas for years to come. 

With Cheniere becoming an ALEC dues-paying member in May 2013 and with America’s Natural Gas Alliance (ANGA) — the fracking industry's tour de force — crowned an ALEC member in August 2013, it looks like many more fracking-friendly model bills could arise out of ALEC in the months and years ahead.

Wed, 2014-07-23 14:16Steve Horn
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Not Just the Atlantic: Obama Leasing Millions of Gulf Acres for Offshore Drilling

Deploying the age-old “Friday news dump,” President Barack Obama's Interior Department gave the green light on Friday, July 18 to companies to deploy seismic air guns to examine the scope of Atlantic Coast offshore oil-and-gas reserves.

It is the first time in over 30 years that the oil and gas industry is permitted to do geophysical data collection along the Atlantic coast. Though decried by environmentalists, another offshore oil and gas announcement made the same week has flown under the radar: over 21 million acres of Gulf of Mexico offshore oil and gas reserves will be up for lease on August 20 in New Orleans, Louisiana at the Superdome. 

On July 17, the U.S. Department of Interior's Bureau of Ocean Energy Management (BOEM)  announced the lease in the name of President Obama's “all of the above” energy policy

“As part of President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, BOEM…today announced that the bureau will offer more than 21 million acres offshore Texas for oil and gas exploration and development in a lease sale that will include all available unleased areas in the Western Gulf of Mexico Planning Area,” proclaimed a July 17 BOEM press release.

The release says this equates to upwards of 116-200 million barrels of oil and 538-938 billion cubic feet of natural gas and falls under the banner of the U.S.-Mexico Transboundary Hydrocarbon Agreement

That Agreement was signed into law on December 26, 2013. It served as a precursor to the recently-passed Mexican oil and gas industry privatization reforms, which have opened the floodgates to international oil and gas companies to come into Mexico for onshore and offshore oil and gas exploration and production.  

Tue, 2014-07-08 12:27Steve Horn
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America's Dairyland Turning to Petrostate: Wisconsin Oil-By-Rail Routes Published for First Time

DeSmogBlog is publishing the first documents ever obtained from the Wisconsin government revealing routes for oil-by-rail trains in the state carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale basin.

The information was initially submitted to the U.S. Department of Transportation (DOT) under the auspices of a May 7 Emergency Order, which both the federal government and the rail industry initially argued should only be released to those with a “need to know” and not the public at-large. 

The Wisconsin documents show the three companies that send Bakken crude trains through the state — Burlington Northern Santa Fe (BNSF), Union Pacific and Canadian Pacific — all initially argued routes are “sensitive security information” only to be seen by those with a “need to know.”

As covered in a previous DeSmogBlog article revealing the routes of oil trains traveling through North Dakota for the first time, the rail industry used this same line of legal argument there and beyond.

Wisconsin Emergency Management did not buy the argument, though, and released the documents to DeSmogBlog through the state's Public Records Act.

Mon, 2014-07-07 13:39Steve Horn
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Industry Data Show Oil-By-Rail in North America at Record Levels

On July 3, the Association of American Railroads (AAR) released June 2014 data showing oil-by-rail and petroleum products at-large are moving at record levels throughout North America

The release of the data comes on the heels of the ongoing oil-by-rail nationwide week of action launched by environmental groups.

For the 26th week of 2014 (the half year point) in the U.S., 18.5% more tank cars were on the tracks carrying petroleum and/or petroleum products than last year, a total of 15,894 cars.

Examined on a year-to-date basis, 7.0% more of those same tank cars were on the tracks in the U.S. this year than last, totaling 380,961 cars to date.

Table Credit: Association of American Railroads 

Across the border in Canada, the same trend lines exist: for the 26th week of 2014, 6.9% more cars moved petroleum and/or petroleum products by rail than in the 26th week of 2013.

Looked at in terms of year-to-date compared to 2013, that totals a 7.7% increase in tank cars moving the commodity by rail. 

Table Credit: Association of American Railroads

Bomb trains,” as some critics call them, move oil obtained from hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin to terminals, holding facilities and markets both in the U.S. and Canada.

Hence the upsurge in unit cars carrying petroleum and/or petroleum products both north and south of the border.

Looked at through the lens of North America, 14.6% more tank cars carried petroleum and/or petroleum products during the 26th week of 2014 compared to the same time in 2013.

And 7.0% more of those tank cars have moved petroleum and/or petroleum products to market so far this year as compared to last year. 

Table Credit: Association of American Railroads

Wed, 2014-07-02 10:38Justin Mikulka and Steve Horn
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For Oil-By-Rail, a Battle Between “Right to Know” and “Need to Know”

Lac Megantic train explosion

Since the first major oil-by-rail explosion occurred on July 6, 2013, in Lac-Mégantic, Quebec, citizens in communities across the U.S. have risen up when they've learned their communities are destinations for volatile oil obtained from hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin. 

As the old adage goes, ignorance is bliss. It's also one of the keys to how massive oil-by-rail infrastructure was built in just a few short years — the public simply didn't know about it. 

Often, oil companies are only required to get state-level air quality permits to open a new oil-by-rail facility.

Terry Wechsler, an environmental attorney in Washington, recently explained to Reuters why there was no opposition to the first three oil-by-rail facilities in the area.

“There was no opposition to the other three proposals only because we weren't aware they were in formal permitting,” he said

The same thing unfolded in Albany, N.Y., where there is an ongoing battle over expansion of the major oil-by-rail facility set to process tar sands crude sent by rail from Alberta. The initial permits for the oil rail transfer facility, which would allow two companies to bring in billions of gallons of oil a year, were approved with no public comment

Tue, 2014-07-01 09:17Steve Horn
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Meme with Wings: Are Western Anti-Fracking Activists Funded by Putin's Russia?

At a June 19 speaking event at London's Chatham House, North Atlantic Treaty Organization (NATO) secretary-general Anders Fogh Rasmussen claimed the Russian government is covertly working to discredit hydraulic fracturing (“fracking”) in the west from afar.

“I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations — environmental organizations working against shale gas — to maintain European dependence on imported Russian gas,” said Rasmussen, the former Prime Minister of Denmark.

Rasmussen's comments were relayed to the press by someone in attendance who apparently broke the “Chatham House Rule” by telling outsiders about the content of a Chatham House meeting.


Anders Fog Rasmussen; Photo Credit: Wikimedia Commons

But Rasmussen left out some key context from his presentation, which he said “is my interpretation” and did not further elaborate on his “disinformation operations” comments.   

That is, while powerful actors have claimed on multiple occasions that western-based anti-fracking activists are funded by the Kremlin, no one has ever documented such a relationship in the form of a money paper trail.

Fri, 2014-06-27 07:00Steve Horn
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Exclusive: North Dakota Oil-By-Rail Routes Published for First Time

For the first time, DeSmogBlog has published dozens of documents obtained from the North Dakota government revealing routes and chemical composition data for oil-by-rail trains in the state carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale.

The information was initially submitted to the U.S. Department of Transportation (DOT) under the legal dictates of a May 7 Emergency Order, which both the federal government and the rail industry initially argued should only be released to those with a “need-to-know” and not the public at-large.

North Dakota's Department of Emergency Services, working in consultation with the North Dakota Office of the Attorney General, made the documents public a couple weeks after DeSmogBlog filed a June 13 North Dakota Public Records Statute request.

“There is no legal basis to protect what they have provided us at this point,” North Dakota assistant attorney general Mary Kae Kelsch said during the June 25 Department of Emergency Service's quarterly meeting, which DeSmogBlog attended via phone. “It doesn't meet any criteria for our state law to protect this.” 

Initially, oil-by-rail giant Burlington Northern Santa Fe (BNSF) and other rail companies sent boilerplate letters — one copy of which has been obtained by DeSmogBlog from the Idaho Bureau of Homeland Security through the state's Public Records Act — to several State Emergency Response Commissions (SERCs), arguing train routes should be kept confidential.

BNSF also sent several SERCs a boilerplate contract proposal, requesting that they exempt the information rail companies were compelled to submit to the SERCs under the DOT Emergency Order from release under Freedom of Information Act. A snippet of the proposed contract can be seen below: 

Dan Wilz, homeland security division director and state security advisor of the Department of Emergency Services, said the claims did not hold legal water. 

“Joe can stand on a street corner and figure that out within a week's period,” Wilz said at the quarterly meeting. “They watch the trains go through their community each and every day.”

BNSF, Canadian Pacific Railway (CP Rail) and Northern Plains Railroad all submitted information to the Department of Emergency Services.

Fri, 2014-06-20 10:25Steve Horn
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Heather Zichal, Former Obama Energy Aide, Named to Board of Fracked Gas Exports Giant Cheniere

Heather Zichal, former Obama White House Deputy Assistant to the President for Energy and Climate Change, may soon walk out of the government-industry revolving door to become a member of the board of directors for fracked gas exports giant Cheniere, who nominated her to serve on the board. 

The announcement, made through Cheniere's U.S. Securities and Exchange Commission Form 8-K and its Schedule 14A, comes just as a major class-action lawsuit was filed against the board of the company by stockholders.

In reaction to the lawsuit, Cheniere has delayed its annual meeting. At that meeting, the company's stockholders will vote on the Zichal nomination.

The class-action lawsuit was filed by plaintiff and stockholder James B. Jones, who alleges the board gave stock awards to CEO Charif Souki in defiance of both a stockholders' vote and the company's by-laws. 

Souki — a central character in Gregory Zuckerman's book “The Frackers“ — became the highest paid CEO in the U.S. as a result of the maneuver, raking in $142 million in 2013, $133 million of which came from stock awards.

Cheniere CEO Charif Souki; Photo Credit: Getty Images

Zichal was nominated to join Cheniere's audit committee of the board, and will be paid $180,000 per year for the gig if elected.

Among the audit committee duties: “Prepare and review the audit committee report for inclusion in the proxy statement for the company's annual meeting of stockholders,” which is now set for September 11 after the push-back following the filing of the stockholder class-action lawsuit.

“The audit committee’s responsibility is oversight, and it recognizes that the company’s management is responsible for preparing the company’s financial statements and complying with applicable laws and regulations,” Cheniere's audit committee charter further explains.

Wed, 2014-06-18 07:06Justin Mikulka and Steve Horn
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White House Meeting Logs: Big Rail Lobbying Against "Bomb Train" Regulations It Publicly Touts

Lynchburg, Virginia Oil Train Explosion

The Obama White House Office of Information and Regulatory Affairs (OIRA) has held the majority of its meetings on the proposed federal oil-by-rail safety regulations with oil and gas industry lobbyists and representatives.

But OIRA meeting logs reviewed by DeSmogBlog reveal that on June 10, the American Association of Railroads (AAR) and many of its dues-paying members also had a chance to convene with OIRA

Big Rail has talked a big game to the public about its desire for increased safety measures for its trains carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale. What happens behind closed doors, the meeting logs show, tells another story. 

At the June 12-13 Railway Age Oil-by-Rail Conference, just two days after rail industry representatives met with OIRA, American Association of Railroads President Edward Hamberg, former assistant secretary for governmental affairs at the U.S. Department of Transportation (DOT), made the case for safety. 

“Railroads believe that federal tank car standards should be raised to ensure crude oil and other flammable liquids are moving in the safest car possible based on the product they are moving,” said Hamberg.

The industry also wants the existing crude oil fleet upgraded through retrofits or older cars to be phased out as quickly as possible.”

Yet despite public declarations along these lines, proactive safety measures were off the table for all four of Big Rail's presentations to OIRA.  

Though private discussions, the documents made public from the meeting show one consistent message from the rail industry: safety costs big bucks. And these are bucks industry is going to fight against having to spend.

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