Northwestern Energy blames frost, not negligence, for fatal Montana blast

BOZEMAN, Mont. - Natural external forces, like frost heaving, may have been
responsible for a natural gas pipe failure that caused a fatal explosion in downtown Bozeman last March, Northwestern Energy chief executive officer Bob Rowe said on Aug. 24.
Rowe was seeking to answer the question, at least in his view, of who is liable for the millions that will be required to rebuild half the 200 block of East Main Street in Bozeman.
"What (investigators) are seeing so far is not showing liability on our part," Rowe told about 50 people gathered at the Bozeman Public Library. "If there's a natural occurrence, it's not a liability." Liability is based on negligence, he said.
Although the investigation is still not complete, there is nothing to suggest the service line that failed had undergone gradual deterioration, Rowe said.
The "freshness" of the 7.5-inch crack that went three-quarters of the way around the 2-inch service line, indicated it was caused by "sudden forces" and "very close to the time of the explosion," Rowe said.
As to which came first, the crack in the pipe or the explosion, Rowe said after the meeting: "There may never be a definitive answer."
Rowe acknowledged that the various insurance companies involved in the investigation may have different opinions. "It's probable, rather likely, that conclusions will differ," Rowe said.
And though the mood at the meeting was more than civil - many who had questions for Rowe also thanked him for his company's response to the blast - that didn't deter those people from voicing their frustration.
"It took 15 to 16 hours to turn the gas off two years ago" when there was a significant natural gas leak behind the parking garage construction on East Mendenhall Street, said Mike Hope, owner of the Rocking R Bar that was destroyed in the March 5 blast. "Didn't you learn something then? Was there anything done back then?"

Russian hackers vandalized BTC Pipeline data servers

According to Aviation Week, Russian hackers have been attacking the Baku-Tbilisi-Ceyhan (BTC) Pipeline data server.
Hacker attacks have caused suspensions in BTC operations, forcing the Eastern Oil Consortium to redirect the oil through the Baku-Novorossiysk Russian pipeline. “After U.S. experts restored the BTC server, the pipeline operation was recovered,” Aviation Week says.
The publication said the attacks had the same IPs as those of Estonian websites swamped during the 2007 Estonian Cyberwar. The source stressed that cyber crime officers of the Intelligence Service and FBI got BTC data servers under control and migrated them to Washington.

Enbridge Alberta Clipper permit sparks criticism in Canada and U.S.

FORT McMURRAY, Alta. - The U.S. presidential permit granted Aug. 20 for Enbridge's controversial Alberta Clipper pipeline has launched environmental protests on both sides of the border, with opponents vowing a legal challenge.
According to a coalition of environmental and Native American groups, the decision goes against U.S. President Barack Obama's promise to cut global warming pollution and America’s addition to oil while investing in clean energy.
The groups - Earthjustice and the Minnesota Center for Environmental Advocacy as well as the Canadian and American offices of the Sierra Club and the Indigenous Environmental Network - have vowed to challenge the decision in court.
In addition, the indigenous network based in Minnesota is looking into the validity of the permit, as it wasn't signed by Hillary Clinton, U.S. secretary of state, as required. Marty Cobenais of the network said it was signed by the deputy assistant director instead, and he wants to check its validity. Cobenais says the coalition, especially the Leech Lake Band, which stands to be the most affected by the pipeline, is in for a David and Goliath fight with a multibillion-dollar industry and the American government.
“This fight isn't even just about the pipeline. We're fighting this fight down here … because we're against the expansion of the (Alberta) tar sands also,” said Cobenais.
The $3.6-billion Alberta Clipper pipeline will carry oil sands product from Hardisty, Alta. It will extend 525 kilometers from the U.S.-Canadian border near Neche, N.D., across northern Minnesota to an Enbridge terminal in Superior, Wis. The project also includes associated pumping and terminal stations. Scheduled to be up and running in 2010, the pipeline will have an initial capacity of 450,000 b/d of heavy bituminous syncrude. A second 51-centimeter parallel pipeline, Southern Lights, will extend 307 kilometers from Superior to an Enbridge terminal in Clearbrook, Minn.

Environmental groups still hope to halt Enbridge Alberta Clipper line

WASHINGTON – In an announcement on Aug. 20 that surprised no one, the Obama administration approved construction of the proposed Enbridge Alberta Clipper Pipeline to carry oil-sands fuel from Canada into Superior, Wis., saying its action was designed to send "a positive economic signal in a difficult economic period".
Many environmentalists had expressed hopes that Hillary Clinton, secretary of state, would reject a permit to build the Alberta Clipper, a 1,000-mile pipeline designed to carry up to 800,000 b/d of bitumen from Canada's oil sands.
The State Department said greenhouse-gas emissions are best addressed through each country's domestic policies and a strong international agreement.
After undertaking what it said was considerable evaluation, the State Department said it would permit Enbridge Energy to build the pipeline to advance a number of U.S. strategic interests.
These interests include increasing the diversity of oil supplies for the U.S., amid political tension in many major oil-producing regions; shortening the transportation path for crude oil supplies; and increasing crude oil supplies from a major non-Organization of Petroleum Exporting Countries producer.
"Canada is a stable and reliable ally and trading partner of the United States, with which we have free trade agreements, which augment the security of this energy supply," the State Department said ina prepared news release. "Approval of the permit sends a positive economic signal, in a difficult economic period, about the future reliability and availability of a portion of the United States' energy imports.''
The State Department also said the project would provide construction jobs for U.S. workers.
Environmentalists on both sides of the border seized on the approval as a contradiction of Washington's promise to cut global warming pollution and the U.S. addiction to oil.
"Importing dirty tar-sands oil is not in our national interest," said Carl Pope, executive director of the Sierra Club, an environmental group. "At a time when concern is growing about the national security threat posted by global warming, it doesn't make sense to open our gates to one of the dirtiest fuels on earth."
Pope said that approving such a big, long-term project locked the U.S. into a dirty energy infrastructure for years to come. "This is exactly the kind of project the State Department should be protecting us from," he said.
An international coalition of environmental and Native American groups said they would challenge the permit in court to ensure all impacts of the pipeline were considered.
"The tar-sands pipeline connects U.S. refiners and consumers with the dirtiest, most carbon-intensive crude oil on earth," said Kevin Reuther, legal director for the Minnesota Center for Environmental Advocacy.

Oil cos. fund astroturf rallies against federal regulation of greenhouse gas

HOUSTON - Some 3,500 people, most of them oil industry employees bused in for the event, packed a downtown theater here on Aug. 18 for a lunchtime rally against Washington’s energy policies, which many here fear will raise energy prices.
The keynote speaker was Drayton McLane, owner of the Houston Astros and chairman of the McLane Group, which operates food distribution enterprises and military services. The master of ceremonies, Bill Bailey, is best known for his work as announcer at the Houston Livestock Show & Rodeo.
The event was organized by a group called Energy Citizens, which is backed by the American Petroleum Institute, the oil industry’s main trade group. Many of the people attending the demonstration were employees of oil companies who work in Houston and were bused from their workplaces.
In public relations, the term “third party fronts” is used to describe creation of what are supposed to appear to be grass-roots groups that are in fact funded by industry. Shortly after World War II, in the case of Noerr Motor Freight v. Eastern Railroad Presidents, the Supreme Court considered the legality of such fronts. The Supremes ultimately ruled that such fronts are legal but unethical.
The Houston event was the first of a series of about 20 rallies planned for Southern and oil-producing states to organize resistance to proposed legislation that would set a limit on emissions of heat-trapping gases, requiring many companies to buy emission permits. Participants described the system as an energy tax that would undermine the economy of Houston, the nation’s energy capital.

U.S. State Department approves Enbridge Alberta Clipper construction

WASHINGTON – In an announcement on Aug. 20 that surprised no one, the Obama administration approved construction of the proposed Enbridge Alberta Clipper Pipeline to carry oil-sands fuel from Canada into Superior, Wis., saying its action was designed to send "a positive economic signal in a difficult economic period".
Many environmentalists had expressed hopes that Hillary Clinton, secretary of state, would reject a permit to build the Alberta Clipper, a 1,000-mile pipeline designed to carry up to 800,000 b/d of fuel from Canada's oil sands.
The State Department said greenhouse-gas emissions are best addressed through each country's domestic policies and a strong international agreement.
After undertaking what it said was considerable evaluation, the State Department said it would permit Enbridge Energy to build the pipeline to advance a number of U.S. strategic interests.
These interests include increasing the diversity of oil supplies for the U.S., amid political tension in many major oil-producing regions; shortening the transportation path for crude oil supplies; and increasing crude oil supplies from a major non-Organization of Petroleum Exporting Countries producer.

Environmental groups ask public inquiry into Enbridge Gateway line

CALGARY, Alta. – Canadian West coast environmental groups on Aug. 17 demanded that the federal government create a public inquiry to look into crude oil pipelines in northern British Columbia.
“Canadians deserve a decision-making process for the Enbridge Northern Gateway Pipeline that is independent, comprehensive, and has the freedom to decide if the proposed oil pipelines and supertankers are right for BC and Canada's Pacific North Coast,” said Josh Paterson, staff counsel at West Coast Environmental Law in a press release.
The letter sent to the government was signed by ten different environmental groups including West Coast Environmental Law, ForestEthics, the Pembina Institute, Living Oceans Society and others. It stated that the proposed model for environmental review of the pipeline is not adequate.

Natural gas industry amasses $80 million war chest to lobby Senate

WASHINGTON - The natural-gas industry - after failing to lobby on the energy-climate bill passed by the House - has amassed an $80 million war chest to ensure it gets a shot at the legislation in the Senate.
"The natural-gas industry wasn't at the table," said Josh Dorner, a spokesman for the Sierra Club, an environmental group that lobbied heavily on the bill. "And if you aren't at the table, you're on the menu."
The 1,428-page bill holds something for every key industry - coal, utilities, autos, wind and solar - but nothing for natural gas.
"The natural-gas industry was done in by its own complacency," said Keith Rattie, chief executive of Salt Lake City-based natural-gas producer Questar Inc.
But the industry and its allies are girding for a lobbying blitzkrieg in the Senate.
Colorado Democratic Sens. Mark Udall and Michael Bennet both say they will take up the fight.
Rattie said that in addition to the big money raised, the industry has a new organization, America's Natural Gas Alliance, to fill a lobbying void in Washington.
"We were just setting up when the key House negotiations were under way," said Rod Lowman, the alliance's chief executive.
Right now, the bill's only program for natural gas is a study on the effectiveness of compressed natural gas as a transportation fuel.
The bill includes $60 billion for clean-coal technology, financial incentives for making electric cars and a national renewable-energy standard that would boost demand for wind and solar power.

MarkWest, ArcLight place Arkoma Connector in service

The 50-mile Arkoma Connector interstate natural gas transmission line was placed in service in July.
In May 2009, MarkWest Energy Partners, LP, and an affiliate of ArcLight Capital Partners, announced the formation of a joint venture to own and operate the Arkoma Connector, which provides 638,000 dekatherms per day of Woodford Shale takeaway capacity and interconnects with Midcontinent Express Pipeline and Gulf Crossing Pipeline at Bennington, Okla.
Under the terms of the joint venture agreement, ArcLight acquired a 50 percent equity interest in the joint venture for $62.5 million.
MarkWest will receive a service fee for operating and managing the joint venture. MarkWest and ArcLight will invest equally in the ongoing costs to operate or expand the pipeline.

Two more Texas firms implicated in thefts from Pemex pipelines

HOUSTON - Valley Fuels and Continental Fuels have ties to a smuggling scheme involving stolen petroleum products from Mexico, according to U.S. authorities.
Valley Fuels denies the claim.
Government officials confiscated funds from bank accounts of the two companies as part of an investigation of the sale of stolen natural gas condensate, court records show.
However, Jim McAlister, a prosecutor in the case, said the seizures do not indicate that the U.S. believes the firms knew the products were obtained illegally.
Valley Fuels has said the funds seized by the government were not the result of illegal sales of condensate, according to court records.

Andrew J. Black named president of Association of Oil Pipe Lines

The Association of Oil Pipe Lines on Aug. 12 announced that Andrew J. Black will join the Association on Sept. 8 as its new president.
AOPL is a non-profit trade association representing 49 domestic and Canadian interstate common carrier oil pipeline companies. AOPL members carry nearly 85 percent of the crude oil and refined petroleum products moved by pipeline in the United States.
Tom Bannigan, president, products pipelines, Kinder Morgan Energy Partners, and chairman of the Association of Oil Pipe Lines, said, "Andy brings a unique blend of public and private sector experience to the leadership of AOPL. He has federal regulatory, industry and Capitol Hill experience that positions him well to guide the industry as it addresses the opportunities and challenges of an increasingly complex legislative and regulatory environment."
Black joins AOPL from El Paso Corp. where he was director, Federal Government Relations. He previously served as director, Office of External Affairs, at the Federal Energy Regulatory Commission and as deputy staff director, policy, for the House Committee on Energy and Commerce.

Williams Transco fined almost $1 million for Virginia pipeline accident

WASHINGTON - Almost a year after a natural gas pipeline explosion rocked Appomattox, Va., federal authorities have issued a proposed fine of almost $1 million following an investigation that found safety regulation violations.
The U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration levied a $952,500 fine on Williams Gas Pipeline after investigators found possible failures to "address regulatory requirements for monitoring and preventing external corrosion," according to an agency news release issued Aug. 10.
One of three pipelines operated by the Williams-owned Transco line ruptured and the natural gas release then ignited on Sept. 14, 2008, injuring five people, leveling two homes and damaging about 100 other houses. The resulting fireball scorched land some 1,125 feet away.
Investigators determined that external corrosion caused the line to rupture.
Chris Stockton, spokesperson for Williams, said it has been notified of the violation and is working with the oversight agency to implement its recommendations.

Apache Corp. to supply Kitimat terminal with liquefied natural gas

CALGARY, Alta. - Kitimat LNG Inc. announced on Aug. 10 that it has signed a memorandum of understanding (MOU) with Apache Corp. to supply natural gas to Kitimat LNG's proposed liquefied natural gas (LNG) export terminal on the coast of British Columbia.
The MOU sets a framework for Kitimat and Apache to negotiate a definitive agreement to supply 200 million to 300 million cubic feet (MMcf) of natural gas feedstock per day to the terminal, which has a planned capacity of 700 MMcf per day. Apache also obtained an option to purchase an equity stake in the Kitimat LNG terminal.
"We are very pleased to welcome an industry leader such as Apache to our growing team of exceptional project partners," said Rosemary Boulton, president of Kitimat LNG. "The participation of companies such as Korea Gas Corp. (KOGAS), GAS NATURAL, EOG Resources Canada and Apache gives our project strong momentum and reinforces the fundamental strength of our business strategy."

Natural gas in storage above five-year average as glut continues

Natural gas in storage hit record levels as producers sought to beat the depressed price for the commodity by producing and selling more.
The Energy Information Administration reported on Aug. 6 the injection of 66 bcf of gas into U.S. underground storage in the week ended July 31. That boosted the amount of working gas in storage to 3.09 tcf, up 580 bcf from the year-ago level and 496 bcf above the five-year average.

Rest of Midcontinent Express Pipeline placed in service

HOUSTON - Construction of the 500-mile Midcontinent Express Pipeline (MEP) is complete and natural gas transportation service began on Aug. 1, on the pipeline from Delhi, La., to Transcontinental Pipe Line's Station 85 in Butler, Ala. It was the last leg of the pipelines that was placed in service. Interim service had begun on the pipeline from Bennington, Okla., to Delhi in April.
MEP is a joint venture of Kinder Morgan Energy Partners, L.P. and Energy Transfer Partners, L.P.
"We are delighted that the final leg of the Midcontinent Express Pipeline is in service," said Steve Kean, president of Kinder Morgan's Natural Gas Pipelines group. Kinder Morgan constructed and will operate the pipeline.
"The completion of this final segment of MEP affords shippers and producers in the Barnett Shale, Bossier Sands and other producing regions access to markets in the eastern United States," said Lee Hanse, senior vice president of Energy Transfer's Interstate Pipeline group.
MEP has multiple receipt and delivery points along the pipeline system, which originates in southeast Oklahoma, crosses northeast Texas, northern Louisiana and central Mississippi and ends in Alabama. Capacity is currently up to 1.25 billion cubic feet (Bcf) per day in Zone 1, which interconnects with the Columbia Gulf Transmission system in Delhi and up to 0.84 Bcf per day in Zone 2, which interconnects with the Transcontinental Gas Pipe Line system in Butler.

GMX Resources to sell Endeavor Pipeline assets to Kinder Morgan

OKLAHOMA CITY - GMX Resources on Aug. 4 announced a letter of intent to sell an interest in its Endeavor Pipeline assets to Houston-based Kinder Morgan Tejas Pipeline for $40 million.
Selling the midstream natural gas transmission assets will provide capital to add a second H&P FlexRig3 to the Oklahoma City-based company’s Haynesville/Bossier horizontal development program in east Texas and northwest Louisiana.
The sale is expected to be completed within 45 days.
“This transaction will provide enough near-term liquidity for us to be able to activate another FlexRig3 in early October,” said Ken L. Kenworthy, GMX CEO.
GMX has 62,160 acres that are prospective for Haynesville/Bossier development providing 777 horizontal drilling locations.
GMX credits use of the first FlexRig 3 from Tulsa-based Helmerich & Payne for a reduction in drilling costs. Completed well costs for drilling four horizontal wells during the second quarter dropped 40 percent.

Coast Guard says Eugene Island oil leak cleanup completed

HOUSTON - Workers on Aug. 3 finished cleaning up 1,500 barrels of crude oil that leaked from the Eugene Island pipeline, according to a joint news release issued by the U.S. Coast Guard and operator Shell Pipeline Co.

Shell said it would repair and restart the line but did not say when.

The pipeline was shut down July 25 after the leak was discovered 33 miles off Houma, La.

Some 80,000 of the 100,000 b/d of crude oil the line was carrying when the leak occurred has been rerouted, Shell said earlier.

Divers found a crack in the line. Shell has given no other details about the damage, what might have caused it or how it might be fixed.

Williams plans Blue Bridge Pipeline in Columbia River Gorge

SALT LAKE CITY, Utah - The Federal Energy Regulatory Commission will hold public meetings in August on a proposed 119-mile natural gas pipeline that would run mostly parallel to an existing pipeline along the Washington side of the Columbia River Gorge.
Williams Northwest Pipeline says the Blue Bridge Pipeline is needed to meet increased demand for natural gas in western Washington markets.
"One of our major customers, Puget Sound Energy, was the driving force behind the project," said Michele Swaner, spokeswoman for the Salt Lake City-based pipeline company.
Williams Northwest recently scaled back the size of the project at Puget Sound Energy's request after the utility cited changing market conditions, she said.
The Federal Energy Regulatory Commission has issued notice of its intent to prepare an environmental impact statement for the project.
At hearings Aug. 11 in Goldendale and Aug. 12 in Stevenson, affected landowners, government agencies, Native American tribes, environmental groups and other interested parties will be invited to comment on what issues the EIS should address.
Michael Lang, conservation director for Friends of the Columbia Gorge, said an earlier version of the pipeline proposal raised significant environmental concerns, including the possibility that the national scenic area would be marred by "a permanent linear clear-cut." Lang said he had not seen the details of the scaled-back project.
"We'll be reviewing the project to make sure it doesn't harm the scenic beauty of the Gorge, fish and wildlife habitat or recreation use," he said.
The Blue Bridge Pipeline would deliver natural gas from the Rocky Mountains along a route that crosses northeast Oregon and enters Washington at the small town of Plymouth. It would consist of six sections that would parallel the existing Williams pipeline through Benton, Klickitat and Skamania counties for about 74 percent of its length. It would connect with the north-south Williams pipeline at
Washougal.

Chevron, Enbridge plan $500 million ultra-deep “growth pipeline”

Calgary-based Enbridge Inc. and California-based Chevron have announced plans to build a $500 million pipeline gathering system in the Gulf of Mexico.
A letter of intent was announced July 30 for the offshore pipeline.
Under terms, Enbridge will construct, own and operate the Walker Ridge Gathering System and provide gas-gathering services for the potential Chevron’s Big Foot, Jack and St. Malo ultra-deepwater developments in the Gulf.
Walker Ridge gathering will boost the economics of Enbridge's Manta Ray and Nautilus offshore pipeline while forming a “strategic base for future growth opportunities in the ultra-deep Gulf of Mexico,” according to the joint news release.
The new network could see 100 million cubic feet of gas per day travel the 300 kilometers of 8-inch,10-inch or 12-inch diameter pipeline laid at 2,000-meter water depths.

Oklahoma considering regulation of intrastate natural gas lines

OKLAHOMA CITY - A state agency has stepped forward asking for the authorization to monitor the currently the unregulated natural gas pipelines in Oklahoma.
Currently, no state or federal government agency monitors intrastate natural
gas gathering lines in Oklahoma or investigates accidents, even if they’re deadly. The Corporation Commission wants to change that.
"We don't want anyone to get hurt, so we'd kinda like to know where some of these pipelines are," said Brooks Mitchell, Corporation Commission appointing authority.
"We don't seem to have a problem with operators maintaining and taking care of their system, but what if we had a problem where people were not maintaining their pipelines," said Dennis Fothergill, Corporation Commission pipeline safety manager.
The commission met with people from pipeline companies to explain why it wants to regulate thousands of miles of natural gas pipeline and to help push a bill that died last session. The bill would give the agency the ability to regulate the natural gas pipelines that the federal government does not monitor.
The commission said it wants to eliminate accidents like the one that occurred last November when a pipeline ruptured in Alex and destroyed three homes and seriously burned one woman.
The bill would also allow the commission to investigate an accident like the one in November.
Enogex, a subsidiary of OG&E's parent company, operates the gas pipeline involved in the Alex accident. Enogex said the line was inspected about two weeks prior to the explosion, but why it happened remains a mystery.