Posted March 25, 2015
Amid the continuing public discussion over improving the safety of crude oil delivered by rail, it’s important that everyone – the energy industry, railroads, regulators, policymakers – stay focused on the facts and the science. This is key to making meaningful improvements to freight rail transportation – which already delivers 99.998 percent of materials like crude oil without incident. We say meaningful improvements because, as with everything we do, the oil and natural gas industry’s safety goal is zero incidents.
First, the science. A new Energy Department report found no data showing correlation between crude oil properties and the likelihood or severity of a fire caused by a train derailment. Also from the report:
No single parameter defines the degree of flammability of a fuel; rather, multiple parameters are relevant. While a fuel with a lower flashpoint, wider range of flammability limits, lower auto-ignition temperature, lower minimum ignition energy, and higher maximum burning velocity is generally considered more flammable, the energy generated from an accident has the potential to greatly exceed the flammability impact of these and any other crude oil property based criteria.
That last point highlights the importance of preventing derailments in the first place because, according to the department’s report, the kinetic energy created by a derailment can play a bigger role in the size of a fire than the commodity the train is hauling.
Posted March 20, 2015
Bloomberg: Two former Obama administration officials said a four-decade-old ban on oil exports limits U.S. geopolitical influence and makes it harder to get other nations to embrace free trade.
The issue of the ban “arose constantly” in negotiations with other countries, including when the U.S. sought support for sanctions on Iran’s oil production to halt its nuclear ambitions, said Carlos Pascual, a former top energy envoy at the U.S. State Department.
“It’s those kinds of restrictions that in the end affect American credibility, and in the moment when we have to put through an important policy, makes it much more difficult to negotiate,” Pascual said at a Senate Energy and Natural Resources Committee hearing Thursday called to build support for ending the ban in place since the 1970s Arab oil embargo.
Posted March 10, 2015
A postscript to our post explaining that the crude oil the Keystone XL pipeline would deliver is comparable to other heavy crudes already being refined in the U.S.: Oil sands crude would replace other heavy oils – most significantly, crude currently imported from Venezuela.
The point is made in the U.S. State Department’s most recent (of five) environmental reviews of Keystone XL:
Gulf Coast refiners’ traditional sources of heavy crudes, particularly Mexico and Venezuela, are declining and are expected to continue to decline. This results in an outlook where the refiners have significant incentive to obtain heavy crude from the oil sands. Both the EIA’s 2013 AEO (Annual Energy Outlook) and the Hart Heavy Oil Outlook (Hart 2012b) indicate that this demand for heavy crude in the Gulf Coast refineries is likely to persist throughout their outlook periods (2040 and 2035 respectively).
Posted March 9, 2015
Apparently not content with the four Pinocchios he recently earned from the Washington Post for statements on the Keystone XL pipeline, President Obama last week put in a bid for five with remarks aimed at the project’s environmental impact.
At an appearance in South Carolina, the president termed “extraordinarily dirty” the methods used to develop Canadian oil sands:
“The reason that a lot of environmentalists are concerned about it is the way that you get the oil out in Canada is an extraordinarily dirty way of extracting oil, and obviously there are always risks in piping a lot of oil through Nebraska farmland and other parts of the country.”
First, after more than six years of review by his administration, the president really should take the time to read the U.S. State Department’s environmental review of Keystone XL – the latest of five that all have cleared the pipeline on environmental grounds. As well, energy consulting firm IHS found that Keystone XL and the oil sands it would deliver would have “no material impact” on U.S. greenhouse gas emissions.
Posted March 3, 2015
ConocoPhillips Chairman and CEO Ryan Lance applies some uncomplicated logic to the question of whether the United States should lift its 1970s-era ban on exporting domestic crude oil. “We should treat crude oil like any other potential product export,” Lance said at an event hosted by the U.S. Chamber of Commerce.
As he did during a January visit to Washington, Lance laid out compelling reasons for lifting the crude oil export ban: An abundance of domestic light crude produced from shale is mismatched for a U.S. refining sector that’s largely configured to process heavier crudes, exporting crude would give producers access to the global market, helping to sustain domestic production and U.S. industry jobs, and exports would add supply to the global market, helping stabilize it and affording the U.S. new opportunities to exert positive influences in the world.
Posted February 18, 2015
Posted January 22, 2015
The Bakken Magazine: “Do not pass Go. Do not collect $200.”
This is the dreaded phrase on the “Go to Jail Card” that you’ve likely drawn, or at least heard of, when playing the game of Monopoly. Drawing this card is an all-around bummer. You lose a chance at scooping up valuable property before others do, you don’t get to collect $200 that you might need to purchase property, and it increases the chance that you lose the game. But at least it’s just a game. Right?
Wrong. What many people probably don’t realize is that we’re in a real-life game similar to Monopoly, but this one is focused on the global oil market, not property. And, it just so happens that we’re stuck holding the “Do not pass Go” card.
Posted January 16, 2015
Bloomberg: Ending restrictions on U.S. crude exports could cut gasoline prices as much as 12 cents a gallon, a Columbia University study co-written by a former adviser to President Barack Obama has concluded.
Without the partial ban, domestic production might increase as much as 1.2 million barrels a day by 2025, making the U.S. more resilient to global supply disruptions, according to the study.
“Easing energy export restrictions does not raise gasoline prices for consumers,” Jason Bordoff, a former energy and climate adviser to Obama who is now director of the Center on Global Energy Policy at Columbia University, said in a telephone interview.
Posted December 23, 2014
Posted December 8, 2014
Chicago Tribune Editorial: Last summer the Chicago City Council briefly considered an ordinance that would require gas stations in the city to sell a blend of fuel called E15, which has the potential to damage your car engine.
An E15 mandate is a patently bad idea. Changing pumps to sell a fuel blend of 15 percent ethanol — what you buy now has 10 percent — would be a big expense for gas stations. And E15 isn't safe for use in many older engines, from cars to trucks to boats to lawn mowers.
The idea seemed to die last summer. You might think the aldermen decided to put their constituents before the ethanol industry lobbyists who are pushing this fuel mandate. If you did, chalk that up to a triumph of hope over experience. This is, after all, the Chicago City Council.