volatility

Federal Government Foot-Dragging Helps Oil Industry Delay Oil-by-Rail Rules

Read time: 6 mins

In an attempt to reduce the risk of fiery oil train accidents, the state of Washington is working to pass a bill that would limit the vapor pressure of oil on trains to below 9 pounds per square inch (psi). Vapor pressure is a measure of the volatility of flammable liquids and correlates to their likelihood of igniting. Higher vapor pressure means an oil is more volatile and more likely to ignite and burn when a train derails.

If the federal government won’t act to protect public safety and adopt a safer nationwide standard, we will adopt our own,” state Sen. Andy Billig (D-Spokane) said of the bill he sponsored. “There is just too much to lose — for people and our environment.”

Billig's comments point to the federal government's repeated failure to address the volatility of the oil moving by rail in America.

New York Attorney General: Feds Must Address Bakken Bomb Trains. Feds: Maybe Later?

Read time: 7 mins
Fireball

New York Attorney General Eric T. Schneiderman has joined with attorneys general from California, Illinois, Maryland, Maine, and Washington in calling for limits on the volatility of crude oil transported by rail. The failure of federal regulators and Congress to address this known safety issue has led Schneiderman to continue to pressure regulators on it.

While Oil Front Group Touts Cheap Fossil Fuel to Low-Income Families, Industry Negotiates Deal to Drive World Oil Prices Up

Read time: 6 mins

Fueling U.S. Forward, an oil industry PR group, has spent the second half of 2016 running an on-the-ground campaign targeting African-American communities and spreading a message focused on energy prices, a front-page New York Times investigation reported on January 5.

The organization's tactics included sponsoring a Richmond, VA gospel show where a few lucky families could win up to $250 off their household energy bills — though the music was paused mid-concert for a panel discussion about fossil fuels.

Oil-By-Rail Regulators Consider Crude Oil Volatility Limits That Would Require Oil Stabilization

Read time: 9 mins

In July 2015, a train carrying Bakken crude oil derailed in Culbertson, Montana resulting in an oil spill of 35,000 gallons — more than the contents of a full rail tank car.

But unlike all of the other Bakken train accidents where large amounts of oil were spilled something odd happened. There was no explosion or fire. 

So what was different about the accident in Culbertson, Montana?

Worries Build Among Investors Over Oil and Gas Industry’s Exposure to Water and Climate Risks

Read time: 6 mins

When it comes to financial risks surrounding water, there is one industry that, according to a new report, is both among the most exposed to these risks and the least transparent to investors about them: the oil and gas industry.

This year, 1,073 of the world’s largest publicly listed companies faced requests from institutional investors concerned about the companies’ vulnerability to water-related risks that they disclose their plans for adapting and responding to issues like drought or water shortages.

VIDEO: Government, Industry Ignore Scientific Case For Improving Crude By Rail Safety, Let Bomb Trains Roll On

Read time: 2 mins
Oil train in Seattle by Brendan DeMelle

Since the tragic Bakken oil train accident that extinguished 47 lives in Lac-Megantic, Quebec in July 2013, seven more Bakken oil trains have derailed, resulting in accidents involving large fires and explosions. We now know that oil produced in North Dakota's Bakken Shale formation is extremely volatile due to its high natural gas liquid content — resulting in the “bomb train” phenomenon.

DeSmog’s new investigative video, written and produced by Justin Mikulka, details a coordinated effort by the oil industry, members of the U.S. Congress, regulators and the Department of Energy to challenge the known science of crude oil characteristics with the goal of delaying or avoiding any regulatory changes requiring Bakken crude oil stabilization, a safety measure that would protect the millions of people currently living in bomb train blast zones.

Derailments Raise Questions About Volatility of Oilsands Diluted Bitumen

Read time: 5 mins
Oil train explosion in Gogama Ontario

When a CN train carrying crude oil derailed and caught fire last weekend near Gogama, Ontario, it became the fifth loaded oil train to leave the tracks in North America in the past two months — and it's raising new questions about the volatility of diluted bitumen from Alberta's oilsands.

In the March 7th accident, several cars slid into the Mattagami River and ignited, leading local officials to issue a drinking water warning for the Mattagami First Nation.

The accident comes less than a month after another CN tanker train carrying crude derailed in the same region, about 200 kilometres north of Sudbury, spilling an estimated more than one million litres of diluted bitumen into local waterways. Twenty-nine cars left the tracks, causing an explosion that left fires burning for six days.

Bomb Trains Keep Rolling While Congressional Committee Bickers About Bakken Crude

Read time: 4 mins
Congressman Paul Broun

When DeSmogBlog reported last week that no actual petroleum scientists would be testifying at the congressional science committee’s hearing on the characteristics of Bakken crude oil, we knew the hearing was unlikely to make any substantial progress toward improving the safety of transporting this volatile oil on trains through American communities.    

Indeed, we expected the hearing would be an exercise in avoiding getting the facts about Bakken crude to further delay or avoid regulations that would require the oil to be stabilized. But what actually transpired surprised even us and bordered on the absurd.

While the hearing was conducted under the banner of the Committee on Science, Space and Technology, it was co-chaired by Subcommittee on Energy chairman Cynthia Lummis (R-Wyo.) and Subcommittee on Oversight chairman Paul Broun (R-Ga.)

During his opening remarks, Congressman Broun ripped into the Obama administration for denying his attempts to get “experts in the subject matter” as witnesses.

While I look forward to hearing from both panels today, I must say I am disappointed — though not surprised — at this Administration’s continued unwillingness to work with the Congress. Chairman Lummis and I invited representatives from the agencies who are experts in the subject matter because we are interested in the science behind Bakken crude. Instead, both agencies appearing before the Committee today declined to provide the witnesses we requested, sending us in their place witnesses more knowledgeable on the politics behind Bakken crude. As I said, I am not surprised, just disappointed.

Very Little Cheap Natural Gas in New York Marcellus Shale, New Report Concludes

Read time: 6 mins

For years, the shale industry has touted the economic benefits it can provide. An overflowing supply of domestic natural gas will help keep heating and electric bills low for American consumers, they argue, while drilling jobs and astounding royalty windfalls for landowners will reinvigorate local economies. These tantalizing promises have caught the attention of politicians in Washington, D.C. who argue that the rewards of relying on shale gas outweigh the risks, especially because harm can be minimized by the industry or by regulators.

But across the U.S., communities where drilling has taken place have found that the process brings along higher costs than advertised. Even when properly done, drilling carries with it major impacts — including air pollution, truck traffic, and plunging property values — and when drillers make mistakes, water contamination has left residents without drinking water or cleaning up from disastrous well blow-outs.

And as the shale drilling boom moves into its 12th year, the most crucial benefit claimed by drillers — cheap and abundant domestic fuel supplies — has come increasingly into question. The gas is there, no doubt, but most of it costs more to get it out than the gas is worth.

A new report from New York state, where a de facto shale drilling moratorium has persisted since 2008, concludes that unless natural gas prices double, much of the shale gas in the state cannot be profitably accessed by oil and gas companies.

Cold Weather Brings Wild Swings in Natural Gas Prices Despite Shale Gas Rush

Read time: 5 mins

Last year, natural gas prices hit record lows and shale gas promoters confidently predicted a bright future of stable low prices, making the fuel the best choice for home heating and electrical generation alike.

But last year was also marked by an unusually mild winter amid a still-sluggish economy. This year, cold winter weather returned across much of the U.S. – and consumers and utilities have begun to confront a strikingly different reality. Natural gas prices immediately spiked as high as $8.15/mmBTU Henry Hub this month – the most expensive prices seen since the 2008 economic collapse – as demand for power and heat surged.

And that $8.15 represents the daily price at a Louisiana pipeline hub often referenced by traders and federal energy analysts; regional prices have spiked far more dramatically. In the frigid Northeast, local prices have skyrocketed this year, with some operators paying up to $120 per mmBTU. “I’ve never seen anything like this,” one New Jersey power company executive told Bloomberg Businessweek in January. The spike’s effects have even reached as far south as East Texas, where spot prices topped $40/mmBTU, nearly reaching the highs seen in 2004 when the current onshore drilling rush began in the Barnett shale.

Keep in mind that the same amount of natural gas cost only $1.92 in April 2012.

That’s a little like suddenly finding out that a McDonalds burger that used to be 2 bucks will now cost you as much as full dinner at a five star restaurant.

These massive fluctuations in natural gas prices over the past year drive home a vital point: natural gas has always been prone to sudden booms and busts. The idea that shale gas – less than ten percent of the nation’s natural gas production and some of the most expensive to produce – could fundamentally transform the natural gas market, keeping prices consistently low, now seems more like a pipe dream than ever before.

Already, utilities and their customers are paying the price.

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