Wednesday, June 30, 2010

Competing Alaska gasline joint ventures said considering merger

ANCHORAGE - The BP/ConocoPhillips Denali joint venture that is planning to build a massive natural gas pipeline from Alaska to the Lower 48 is in preliminary talks to join a competing project headed by TransCanada and Exxon Mobil, according to a source familiar with the projects.
The BP/Conoco project, known as the Denali Pipeline, received approval from federal regulators earlier this month to conduct an open season to solicit interest in the project from North Slope gas producers. The TransCanada/Exxon project - which won a special license to build a pipeline from the State of Alaska in 2008 - received its open season approval in March.
The $30-billion-plus price tag on the project means it is highly unlikely two pipelines would actually get built - a joining of the projects has long been seen as inevitable.
But BP's growing financial burden from the Gulf of Mexico oil spill may be accelerating the process. BP has already announced plans for up to $10 billion in asset sales, and likely changes in its capital spending.
Dave MacDowell, a spokesman for Denali, said he wasn't aware of such discussions, but stressed that BP and ConocoPhillips "have said repeatedly they are open to considering involvement of any entity that adds value and takes on risk."
The natural gas pipeline would be among the largest single energy infrastructure projects in the world. It would include a massive natural gas processing plant on the North Slope and 1,700 miles of pipe that would most likely run to Alberta, Canada. There, existing pipelines would carry the gas to U.S. markets.
Alaska granted TransCanada a license in January 2008 to build the long-sought companion to the Trans-Alaska Pipeline System, which has been moving oil to U.S. markets since 1977.
That license followed a public bidding process initiated by then-Alaska Gov. Sarah Palin, who canceled a pipeline deal that her predecessor, Frank Murkowski, had negotiated in closed-door sessions with the three major North Slope producers.
The three producers - Exxon Mobil, BP and Conoco - did not take part in Palin's state bidding process, saying it did not provide the kind of tax and tariff assurances they needed. ConocoPhillips announced its competing project shortly after, and BP joined in that project in April 2008.
Many were skeptical of the state-backed project from the beginning, saying it could not proceed without cooperation from the producers. Dwindling state coffers in Alaska, which relies heavily on royalty payments and taxes from oil and natural gas production, also undermined support.
But last year Exxon Mobil said it would partner with TransCanada on the state-backed project. Exxon Mobil holds many of the largest natural gas fields on the North Slope.

Tuesday, June 29, 2010

Willbros awarded contract for Williams Energy Boreal Pipeline construction

HOUSTON - Willbros Group, Inc. (NYSE: WG) announced on June 23 that its Canadian unit, Willbros Canada, has been awarded construction of the Williams Energy Canada Boreal Pipeline.
The new 12-inch diameter pipeline will transport high vapor pressure liquids approximately 420 km. from Williams' Liquid Extraction Plant north of Fort McMurray to their Redwater Olefins Facility northeast of Edmonton, Alta. Construction will be completed in three construction seasons beginning in the fall of 2010, with completion in the spring of 2012.
Randy Harl, president and chief executive officer, said, "Willbros has a long history working with Williams, and I am pleased that we continue to play a part in their infrastructure development. This award is particularly significant for Willbros as visibility in our Canadian pipeline construction unit now extends into 2012."

Monday, June 28, 2010

CSB to investigate Deepwater Horizon blowout

WASHINGTON - In response to a request from the House Committee on Energy and Commerce to conduct a full and thorough investigation into the causes of the Deepwater Horizon rig explosion, U.S. Chemical Safety Board (CSB) Chairman John Bresland pledged to investigate the accidental chemical release that destroyed the rig - but also stressed that such an investigation may pose a challenge to the board's resources.
Committee Chairman Henry A. Waxman, D-Calif., and Subcommittee
Chairman Bart Stupak, D-Mich., sent a letter to CSB on June 8 requesting the investigation.
"We make this request because we believe CSB's past work on BP puts it in a unique position to address questions about BP's safety culture and practices," they wrote, noting in particular CSB's investigation into the 2005 fatal BP Texas City, Texas, refinery explosion and the 2006 BP pipeline leak in Prudhoe Bay, Alaska.
Waxman and Stupek asked CSB to investigate whether the circumstances leading up to the explosion reflect problems in BP's safety culture; whether cost-cutting and budgetary concerns played a role in BP's decisions about well design and testing; how BP, Transocean and other contractors assessed changes to process, technology, equipment, personnel, budget and training on the rig; if BP provided adequate oversight of contractors; and whether CSB can draw parallels between this oil rig explosion and the 2005 Texas City explosion.
In his response, Bresland stressed that CSB will make this work a priority and "apply all of our available resources to ensure the best possible investigation." He added that the process will include key investigators who were involved in the BP Texas City refinery explosion investigation.
He added, however, that this investigation must "be approached without any preconceptions and that all possible underlying factors and causes are thoroughly and objectively examined. Like other CSB investigations, the investigation should include an examination of key technical factors, the safety cultures involved, and the effectiveness of relevant laws, regulations, and industry standards."
Bresland also noted that CSB will work to avoid duplicating other investigations already planned or underway. He requested the committee's help in promoting cooperation with other investigations and in ensuring that CSB's investigation remains independent from potential criminal inquiries.
"The CSB plans to focus on events prior to and including the explosion on April 20; we believe that an examination of the response to the disaster and the impact of the ongoing massive oil spill is beyond the CSB's current resources and abilities," Bresland wrote.

Friday, June 25, 2010

50 members of Congress ask State's Clinton to delay Keystone XL approval

WASHINGTON - In a letter to Secretary of State Hillary Clinton, some 50 members of the U.S. House of Representatives said the agency "must determine whether the project is in the national interest" in terms of "clean energy and climate change priorities" before rubber-stamping it.
As of June 23, the letter had been signed by 50 members of the House, many of whom sit on the Energy and Commerce, Natural Resources and Transportation and Infrastructure committees. All are Democrats.
Tar sands mining emits three times more greenhouse gas pollution than traditional oil, the letter stated.
Rep. Steve Cohen (D-Tenn.), one of the lead signatories, further said the pipeline, which is slated to pass over the nation's largest underground aquifer, would leave "irreparable" environmental scars in its wake.
"This poses a direct threat to America’s heartland," Cohen told reporters. "It cuts through sensitive ecosystems, crosses rivers, invades ranches and farms and could scar this land forever."
On a conference call with reporters on June 23, Rep. Cohen asked jokingly whether "XL" stands for "extra long" or "extra-large."
"Right now we don't need to be doing extra long or extra large pipelines, particularly with what we've seen in the Gulf," said the Tennessee politician, referring to the ongoing BP oil spill off the Louisiana coast.
"As oil continues to pour into the Gulf, we should take a step back and reconsider the wisdom of trusting these oil companies out to make a profit and with no thoughts of anything but oil, oil, oil.
TransCanada, which is building the Keystone and Keystone XL pipelines to transport tar sands bitumen to U.S. refineries, has been pressing for presidential approval of the $12 billion Keystone XL Pipeline, which would export up to 900,000 b/d and double U.S. consumption of the controversial fuel source.
Two other pipelines have already been okayed by the State Department - Keystone , which will eventually carry crude to Cushing, Okla., and the Alberta Clipper, that runs from Canada to Superior, Wis.
If all three get built, tar sands would make up 15 percent of U.S. fuel supply, up from four percent today.
Turning tar sands into usable oil involves mining bitumen, a tar-like petroleum that's buried beneath the boreal forests in Alberta. Extraction requires substantial energy and water and creates sprawling tailing ponds that some analysts estimate are leaking three million gallons of contaminated waste into the ground each day, endangering wildlife and perhaps public health.

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Thursday, June 24, 2010

Crosstex Energy adds new supply to North Texas gathering system

DALLAS, Texas - The Crosstex Energy companies, Crosstex Energy, L.P. (Nasdaq: XTEX) and Crosstex Energy, Inc. (Nasdaq: XTXI) announced on June 21 that the Partnership has entered into a 10-year firm transportation agreement with a major Barnett Shale producer for an additional 50 million cubic feet of natural gas per day on its North Texas gathering system. Crosstex is constructing a compressor station on an existing gathering line to accommodate the customer's transportation requirements.
The project is scheduled to be completed and operational in the first quarter of 2011.
Incremental investment required for the project is estimated to be less than $10 million and the annual cash flow from the agreement is expected to be approximately $8 million.
"This agreement is a prime example of how our strategic position in the Barnett Shale adds value. We are able to make relatively low-cost, incremental investments that generate high returns and enhance the utilization of our core assets," said Barry E. Davis, Crosstex president and CEO. "We will continue to look for opportunities in North Texas where our operations are located in the heart of the Barnett Shale, one of the most significant shale plays in the U.S."

Wednesday, June 23, 2010

Blogger says 'Google doing evil' with disruptive new templates

According to an Atlanta blogger who has two sites with Google's "," Google "did evil," counter to its company policy, when it introduced new design templates a week or so ago.
"Hit counters on both blogs stopped working as soon as I changed to one of the new Google-designed templates," said Noel L. Griese, who operates the Energy Pipeline and Southern Review of blogs on
"What's worse, it's impossible to get a human response from Google," Griese said. "I've sent emails, with no response. I called the Google Atlanta number, which is not answered by humans, and could not leave a message because the company's phonemail box was full. I tried calling Google's headquarters in California, and after weaiting for more than half an hour to talk to a 'representaive,' I gave up."
"No question that there's something wrong at Google," Griese said. "I use Google Analytics for one of the blogs. That stopped working on June 15, simultaneously with my converting to one of the new Google-recommended templates. I use SiteMeter to track hits on the other blog. That also stopped working on June 15, simultaneously with my adoption of the new template on the other site."
Griese said it was particularly irksome that the counters stopped working on the Energy Pipeline News blog just as he posted a copy of a half-page op-ed piece on the Gulf oil spill that had appeared in the Atlanta Journal-Constitution. "That posting contained some very important information about what happened in the Gulf, and it would have been nice to have some stats on who visited to read the piece online."
Griese asked that others experiencing similar difficulties with Google contact him at

Iraq needs financing to repair rusty pipeline, develop gas

BAGHDAD – According To North Oil Company Director of Planning Dr. Hussein Gulam, the Iraqi oil industry is suffering technical problems and its budget is not substantial enough to develop its oil industry.
''The pipelines are very old and rusty; they need to be repaired," said Gulam, who added that 50 kilometers of the Iraq-Turkey crude oil pipeline need urgent renovation due to rust.
That pipeline, also known as the Kirkuk-Ceyhan oil pipeline, is a 600-mile pipeline. It is Iraq’s largest crude oil export line, and was built in the late of 1970s.
In 1979, the oil production in northern Iraq (mainly Kirkuk) reached more than one million barrels a day. However, North Oil Company can now produce only 670,000 b/d.
According to the Iraqi Oil Ministry, more than one billion cubic feet of gas is wasted in Iraq through uncontrolled flaring daily due to lack of modern equipment and proper engineering. Reports say that Iraq loses US$3,000 every minute as a result.
In Kirkuk alone, 150 million cubic feet of gas is flared daily, says Director General of the Northern Gas Company (Kirkuk) Dr. Huner Najeeb Hassan. "In other words, we can say Iraq loses $700,000-$800,000 every day just in Kirkuk because of gas flaring," said Dr. Hassan.
He said he needs no less than US$200 million in order to control the Kirkuk gas flare.

Tuesday, June 22, 2010

Valero to increase capacity of pipelines to McKee refinery

Valero Energy Corp. has announced plans to double the size of its crude oil gathering system in the Texas and Oklahoma regions. The company plans to expand capacity of its McKee refinery in Sunray, Texas, which has a feedstock throughput of about 170,000 b/d currently.
The start of operations at Valero’s McKee refinery dates back to 1933. The refinery had several major upgrades over the years.
Situated in the heart of the Texas Panhandle, the McKee refinery has access to crude oil from northern Texas, Oklahoma, southwestern Kansas and eastern Colorado through an extensive network of crude oil pipelines, making it one of the most well-connected plants in Valero's system.
Valero’s McKee project involves expanding pipelines in the Texas panhandle between Oklahoma and New Mexico and the Oklahoma panhandle between Texas and Kansas. The project also requires looping of the existing pipeline from a storage facility in Perryton, Texas, and adding pump stations and storage facilities.
Valero expects the project to be completed quickly since most of the infrastructure and right-of-way is already in place. The scheduled completion date for the project is by fourth quarter of 2010.

Monday, June 21, 2010

Energy Transfer seeks federal approval for Tiger Pipeline expansion

DALLAS, Texas - Energy Transfer Partners has filed with the Federal Energy Regulatory Commission (FERC) for a certificate of public convenience and necessity to allow the construction and operation of the ETC Tiger Pipeline Expansion Project, Phase I.
The Tiger expansion is expected to add 400 million cubic feet per day of capacity to the ETC Tiger Pipeline system, bringing total capacity to 2.4 billion cubic feet per day, all of which is sold out under long-term contracts ranging from 10 to 15 years.
Luke Fletcher, vice president of Energy Transfer Partners Interstate Pipeline Division, said: “This expansion of the Tiger System will provide vital take away capacity from the Haynesville Shale and Middle Bossier shale production areas in Louisiana and East Texas, to markets in the eastern half of the US.”
Construction began earlier this month on the original 42-inch Tiger Pipeline, a 175-mile interstate natural gas pipeline originating in Panola County, Texas, and terminating in Richland Parish, La.
The Tiger Pipeline will interconnect to seven interstate pipelines and one intrastate pipeline for final delivery to markets across the Northeast, Southeast, Mid-Atlantic and Midwest.
The Tiger Pipeline, which will have an initial capacity of two billion cubic feet per day, is expected to be in service in the first quarter of 2011. The Tiger Expansion is expected to be in service in the last half of 2011.

Thursday, June 17, 2010

Resolving BP spill will take years

The following op-ed article appeared in the June 17, 2010, issue of the Atlanta Journal-Constitution.

Opinion -

Posted at Atlanta Journal-Constitution Web site at 8:13 p.m. Wednesday, June 16, 2010

By Noel L. Griese

Just before the Deepwater Horizon accident, Florida spent $200,000 on a study of offshore drilling safety that concludes: “Oil spills from offshore exploration, development, production and the transportation associated with these activities are unlikely to present a major risk to Florida.”
So much for studies.
As the editor of Energy Pipeline News, I have followed the tragedy in the Gulf of Mexico with an insider’s knowledge of offshore drilling and an idea of what we can expect in the months and years ahead. Unfortunately, my background leads me to conclude that the cleanup will take years to accomplish, and compensating the victims and punishing those responsible will also take time.
Although the Deepwater Horizon may have been the first rig most Americans ever heard of, the Gulf is populated by a tangled network of 3,500 oil-drilling platforms and more than 43,000 miles of pipelines between Texas and Alabama.
The U.S. Gulf had accidents before the Deepwater Horizon burned and sank. Because of hurricanes Katrina and Rita, more than 8 million gallons of oil were spilled from coastal oil facilities and some 3.3 million gallons were spilled from a tank barge when it struck a sunken oil platform. More than 600,000 gallons were spilled from U.S. offshore oil platforms and pipelines.
Testimony before congressional committees reveals that shortcuts to safety were taken on the Deepwater Horizon to save money. The rig, which was costing BP $1 million a day, was 21 days behind schedule. So corners were cut. There’s plenty of blame to go around — for responsible party BP, rig owner Transocean, cementing contractor Halliburton, federal regulators and responders.
Based on an admittedly low-ball U.S. government estimate released in late May, the BP well blowout spilled about 500,000-800,000 barrels of oil into the Gulf through May. That compares with about 3.5 million barrels spilled off shore of Mexico over nine months in 1979 by the Pemex-operated Ixtoc I well that blew out on June 3, 1979, in the second-largest accidental spill in world history. But new estimates from a government technical committee on the amount of oil released through June 3 put the BP blowout already very close to surpassing the Ixtoc I record.
Despite vast U.S. waters, only 62 federal inspectors oversee offshore drilling in the Gulf and U.S. waters along the East and West coasts. Perhaps because its regulatory arm is understaffed, the Minerals Management Service quickly granted permission for BP to take the risks that resulted in the accident.
MMS also collects about $13 billion in annual royalties from the oil industry. This dual role of collecting revenues and enforcing safety put the agency in a conflict of interest with itself. Secretary of the Interior Ken Salazar is in the process of splitting the various MMS functions into three separate offices in an effort to minimize future conflicts of interest.
Despite our experience with the Exxon Valdez disaster in 1989, the response to the Deepwater Horizon spill was initially disorganized and inept. Even today, almost two months after the blowout, only a relatively few skimmers are in the Gulf cleaning up oil floating on the surface. Deployment of ocean booms to protect shorelines has been basically ineffective.
The Unified Command responding to the Gulf spill has not explained very well why supertankers are not being deployed to vacuum up oil, as was the case in the Persian Gulf some years ago. Vacuuming in the Persian Gulf was easier because the oil floated to the surface and was not broken up with dispersants.
After you suck this sort of oil into a supertanker, you wait for the oil and water to separate. Then, if there are no regulations against it, you siphon off the water and pump it back into the ocean.
Despite BP’s denials to the contrary, much if not most of the oil spilled in the Gulf is in huge plumes of droplets of oil in colloidal suspension. There are many of these plumes, which are up to 3,000 feet deep and miles long.
Normally, the heavy ends of the oil (used to make asphalt) settle on the ocean bottom. The thick, gooey oil, ranging in consistency from tar to mousse, floats on the surface.
Even if most of the Gulf could be vacuumed up into supertankers to get the droplets of oil, what would end up in the supertankers would be a tiny amount of dispersant and oil, mixed with a huge amount of water. Regulations prohibit dumping the siphoned water back into the ocean, so the responsible party (BP) would have to figure out what to do with much of the Gulf of Mexico sitting as oily water waste in supertankers. It’s doubtful that there’s enough tank capacity onshore to handle all this oily water until it is disposed of properly.
The spill may be reduced in size by various temporary measures, but stopping the oil will likely not happen until August, when two new relief drillings to intercept the blown-out well are completed. When that happens, the well will be cemented and capped.
But expect cleanup of the environment to go on for decades.
Under the Clean Water Act, the EPA and Department of Justice can fine BP up to $4,300 per barrel spilled if willful negligence is proved. Proving negligence should not be difficult.
BP is already on probation in the U.S. after pleading guilty to a misdemeanor criminal charge resulting from oil spills on Alaska’s North Slope.
The experience of the federal government in suing Exxon over the Exxon Valdez accident offers some clues about where future government lawsuits against BP are likely to head.
Less than a year after the Exxon Valdez oil spill of about 262,000 barrels (though the spill may have been larger), a federal grand jury indicted Exxon and its shipping subsidiary on five criminal violations. Exxon, facing $600 million in fines, pleaded not guilty.
In a plea bargain with the Justice Department, Exxon agreed to pay $100 million in fines and restitution. But the federal judge in the case rejected the deal. The parties settled for $125 million.
Later, in 1994, a grand jury in a civil action levied punitive damages of $5 billion against Exxon, but that was reduced by the U.S. Supreme Court to $507.5 million under a maritime law ruling. Maritime law may also apply in the BP case.
In all, Exxon, at risk for $6 billion, ended up paying just over $1 billion in these criminal and civil settlements. Settlements in most such cases are negotiated, delayed and appealed over a long time. By the time many suits are settled, the claimants are dead.
Companies like BP normally turn to contractors to handle the claims process for those seeking immediate damages, such as fishermen who have lost their livelihoods. The contractor employees, who may be overseen by a BP representative, are familiar with techniques for minimizing claims paid. Claimants are often desperate, and settle for cents on the dollar to get paid.
It remains to be seen how BP will exert its political muscle to minimize its losses.
BP has hired 27 more lobbyists, mostly former elected and appointed federal officials, to work its case on Capitol Hill.
The oil and gas industry spent more on federal lobbying last year than all but two other industries, with $174.8 million in lobbying expenditures, according to the Center for Responsive Politics.
Political action committees set up by the oil and gas producers contributed an additional $9 million in the last election cycle to congressional candidates, with Koch Industries (owner of Atlanta-based Georgia Pacific), ExxonMobil, Valero Energy and Chevron leading the way. BP ranked 19th, with $75,500 in contributions, mostly to Republicans.
BP has also rolled out a $50 million PR campaign featuring a TV spot starring CEO Tony Hayward, whose impolitic comments while the news cameras were rolling, such as “I’d like to get my life back,” have proven to be less than popular.
In paid TV ads, what the CEO says can be controlled.

Noel L. Griese is the editor of Energy Pipeline News, published daily by Anvil Publishers of Atlanta and the author of 17 books on the energy industry and other subjects.

Wednesday, June 16, 2010

Questar board approves spin-off of E&P, midstream field services Energy company

Questar Corp. on June 14 announced that its board has unanimously approved the tax-free spin-off of its natural gas and oil exploration and production as well as midstream field services businesses, forming an independent, publicly-traded company named QEP Resources, Inc.
The company noted that the spin-off will be structured as a pro-rata dividend of the common stock of subsidiary QEP Resources, with the distribution occurring on June 30, to Questar shareholders of record as of the close of business on June 18, 2010.
Questar shareholders will receive one share of QEP common stock for each share of Questar common stock.
In a statement last month, chairman, president and chief executive officer, Keith Rattie said, “QEP Resources would be a high-growth, diversified E&P business with operations in several of the most economic natural gas plays in the U.S. Questar would be a uniquely integrated natural gas company with a track record of solid returns on capital, visible growth, and the capacity to pay and grow a competitive dividend.”
Following the spin-off, Questar would remain an integrated natural gas-focused energy company, comprising of subsidiaries Wexpro Co., Questar Pipeline Co., and Questar Gas Co., with its corporate headquarters remaining in Salt Lake City.
The company said Questar common stock will continue to trade on the New York Stock Exchange under the symbol STR through the distribution date of June 30 and thereafter. Meanwhile, QEP Resources has applied to have its common stock listed on the NYSE under the symbol QEP, and is expected to begin trading on July 1.
The company had earlier revealed that Rattie would serve as the chairman of the board of both companies after completion of the spin-off. The company also named Charles Stanley as the president and chief executive officer, and Richard Doleshek as the chief Financial Officer of QEP Resources. Meanwhile, Ronald Jibson would be named president and chief executive officer, and Martin Craven would be named chief financial officer of Questar.

Tuesday, June 15, 2010

Tiger Pipeline construction stopped by cemetery in path

FRIERSON, La. – Construction of a major pipeline project that just got under way has been brought to a halt after the contractor encountered a 150-year old cemetery in its path.
The Tiger Pipeline is a 42-inch natural gas pipeline that will stretch 175 miles across North Louisiana, from Carthage, Texas, to the eastern edge of Richland Parish.
Construction is just getting under way on the $1 billion project, but work in DeSoto Parish is at a standstill after the discovery of what the company calls an "unexpected burial site."
The owner of the land granted Energy Transfer Partners right-of-way access across his 800 acres of pasture in Frierson.
Reggie Rowe says also he warned them of the hilltop cemetery, "but they come in here after I told them not to come in here and knocked the tombstones over."
Rowe says there were five stone markers at the site, which used to be surrounded by a small wrought iron fence and filled with wildflowers. "According to the monuments and the names, it was a family of five: husband, wife and three kids. One of them was a one-year-old baby."
Rowe says the dates on the markers ranged from 1864 to 1907, and belonged to members of the Lafitte family. "There are still a lot of Lafittes in DeSoto Parish."
The company building the Tiger Pipeline says there was no mention of the cemetery in any of the records searched by the company as they planned the route.
"When beginning to clear the right of way, a headstone was detected and work was stopped immediately," explains Vicki Anderson Granado of Granado Communications Group, a Dallas-based public relations firm contracted by Energy Transfer Partners.
Granado says the company has called in the services of an archeologist to ensure it could determine the boundaries of the cemetery so the route of the pipeline could be altered." As of June 9, the archaeologist had counted 10 graves.
"The family was marked with tombstones and the rest of the people were buried around them with just wooden crosses, and that's why they're finding more graves than what was marked," explains Rowe.
Granado says, "The company will do everything it can to repair any disturbance to the cemetery and regrets that this situation ever came about."

Monday, June 14, 2010

Lightning ignites gasoline tank fire at Colonial’s Greensboro Junction

GREENSBORO, N.C. – Lightning is believed to have struck a large gasoline tank around 1 a.m. on the morning of June 13 at a refined petroleum tank farm in eastern Greensboro, starting a fire that caused nearby stretches of two interstate highways to be closed in both directions for several hours, authorities said.
The closed sections of Interstates 40 and 73 through Greensboro were reopened later in the morning, officials with the N.C. Department of Transportation said.
The tank farm's owner, Colonial Pipeline Co., said local firefighters extinguished the burning gasoline by using fire-suppressing foam, but fire crews stayed on throughout much of the day in case of any flare-ups.
No injuries were reported and no evacuations were ordered.
The company said that the 43,000-barrel tank was about half full when the fire broke out. Colonial employees pumped much of the fuel out of the affected tank. Firefighters sprayed water on two nearby tanks as a precaution to keep them from igniting.
Colonial Pipeline's director of communications, Steve Baker, said from Atlanta that only about half the fuel in the tank burned, and the rest was safely transferred to another tank.
The Colonial tank farm at Greensboro is a breakout facility where incoming fuel from the Gulf Coast goes into tankage before being reinjected into smaller mainlines to Baltimore, Md. The facility, known as Greensboro Junction, is situated near the Piedmont Triad International Airport.
Colonial Pipeline said it does not foresee supply problems as a result of the fire.

Friday, June 11, 2010

China’s Wen Jiabo visits Myanmar, marks start of pipelines build

NAYPYITAW, Myanmar - Prime Minister Wen Jiabo of China visited Myanmar on June 2-3 to participate in celebrations to mark the 60th anniversary of the establishment of diplomatic relations between the two countries.
During the visit, which was confined Naypyitaw, the new capital, with a stop in Yangon, he met Senior General Than Shwe, chairman of the State Peace and Development Council of Myanmar and Prime Minister U Thein Sein. While in Myanmar, he and U Thein Sein observed the formal launching of the construction of the Myanmar-China oil and natural gas pipeline project. Even though the two pipelines will not pass through the capital, the launching was observed there.
Wen did not go to the Arakan area where construction has begun. There is local opposition to the pipelines in the Arakan area, and the two governments apparently did not want to take the risk of having the function become the target of a protest.
The China National Petroleum Corp. (CNPC), the country's largest oil and gas producer and supplier, said on its Web site on June 4 that work had started on construction of two oil and gas pipelines between China and Myanmar. The Southeast Asia Pipeline Co., one of SNPC’s affiliates, has been put in charge of the design, construction, operation and maintenance of the pipelines. As a controlling shareholder, the Southeast Asia Pipeline Co. signed an agreement with the Myanmar National Oil and Gas Co. on June 3 at Naypyitaw. The gas and oil pipelines are both expected to run from the Kyaukpyu port on Myanmar's west coast and enter China at Ruili, Yunnan Province. The oil pipeline will have a designed transport capacity of 22 million tons per year, while the natural gas pipeline is designed to transport 12 billion cubic meters annually.

Thursday, June 10, 2010

Second fatal gas pipeline explosion rocks Texas in as many days

LUBBOCK, Texas - A day after an accident on an Enterprise pipeline near Cleburne, Texas, claimed one life, a new gas pipeline explosion occurred on June 8 near Darrouzet, a small community in the Texas Panhandle, killing two people and wounding three others.
The blast in Lipscomb County, a few miles from the Oklahoma border and about 270 miles from Lubbock, occurred when a crew that was removing caliche - commonly used in making cement - from a pit for a dirt-contracting company, Lipscomb County Sheriff James Robertson said in a news release. The bulldozer being used by the crew hit the gas pipeline, causing the explosion.
The gas line involved is operated by Denver-based DCP Midstream, which shut off valves leading to the 14-inch pipeline, allowing the fire to burn out about four hours later, spokeswoman Roz Elliott said. She said the pipeline fed one of the company's processing plants.
The two killed were identified as Steven Douglas Odell, 32, and Johnnie Mike Renner, 44, Lipscomb County Sheriff James Robertson said.
In addition, one person was hospitalized in critical condition after the blast and two others were treated and released from a nearby hospital, officials said.

Wednesday, June 9, 2010

Poll finds 80 percent of British Columbians oppose Enbridge pipeline

VANCOUVER, B.C. - Enbridge should be looking at opinion polls and events in the United States instead of filing for federal approval to build a $5.5 billion pipeline from Alberta to a marine export terminal at Kitimat, says one opponent of the project.
Nikki Skuce of the environmental group ForestEthics says all Enbridge will do is spend millions of dollars and years of time promoting its Northern Gateway plan when people don’t want it.
“We’re clearly disappointed they’re ignoring the majority of the people of B.C. and First Nations,” said Skuce.
Her comments are based on a May opinion poll conducted for ForestEthics indicating that 80 percent of British Columbians don’t want oil tankers coming into and out of north coast waters.
Skuce is not convinced the pipeline review, to be conducted by a three-person panel through the federal National Energy Board, will be unbiased enough to produce a suitable document.
“Who pays for the National Energy Board? The proponent, the industry,” said Skuce. Skuce also questions the need for any kind of review given that various First Nations have conducted their own assessment of the project and have judged it unwanted.
The Dogwood Initiative, a Victoria-based public interest group which shared the cost of the opinion poll, said “We cannot imagine a scenario where Enbridge, or any proponent, is able to overcome the political forces organized against a new West Coast pipeline. And we consider ourselves a fairly imaginative group of people,” said Eric Swanson.
The poll results were part of a Mustel Group omnibus random telephone survey of 500 British Columbians in May 2010. Results on a sample size of 500 are considered accurate to within +/- 4.5 percentage points, 19 times out of 20.
Here is the first question: “Since 1972, the Canadian federal government has banned oil tankers from transporting crude oil through B.C.’s inside passage to protect the coast from oil spills. Now, Ottawa is considering allowing oil tankers to transport crude oil through our coastal waters. In your opinion, should we ban or allow oil tanker traffic in B.C.’s inside coastal waters?”
Of those who responded, 15.4 per cent would allow traffic, 80 per cent would ban it, four per cent did not know and 0.6 per cent refused to answer.
The second question was: “Based on what you currently know, would you say you support or oppose Enbridge’s proposal to build an oil pipeline from the tar sands and bring oil tanker traffic to B.C.’s North Coast? Would that be strongly or somewhat?”
Responses were 8.1 per cent who would strongly support it, 25.6 per cent who would somewhat support it, 19.3 per cent who were somewhat opposed, 31.7 who were strongly opposed, with 13.5 per cent who don’t know and 1.8 per cent who refused to answer.

Friday, June 4, 2010

$200,000 pro-offshore drilling study funded by Florida now subject of ridicule

ST. PETERSBURG, Fla. – A rushed April study commissioned by incoming Florida House Speaker Dean Cannon, R-Winter Park, that found minimal risks in drilling off Florida's coasts, is now the subject of broad contempt in the wake of the massive and so far unstoppable BP gulf oil spill.
The study, which cost $200,000 in taxpayer money, was ridiculed in a WUSF segment on May 31, and was subsequently covered by publications ranging from the St. Petersburg Times and Creative Loafing to the Orlando Sentinel and the liberal “Daily Kos” blog.
The 177-page study is titled “Florida Gulf Coast Oil and Gas Risk Assessment.” It’s a “drill-baby-drill”-leaning document produced by a British firm called The Willis Group.
The study's key conclusion, which of course sounds laughable now, especially with reports saying oil is already hitting beaches from Pensacola to Destin, and may hit other locations shortly, is this: "Oil spills from offshore exploration, development, production and the transportation associated with these activities are unlikely to present a major risk to Florida."
Another conclusion: "A 1,000-barrel spill is a 1 in 100 year event in state waters, assuming pipelines are the main transportation option; even a spill that size would likely be intercepted through emergency response prior to reaching Florida’s shoreline."
Yet another conclusion: "We view the risks associated with oil and gas drilling in Florida State waters as serious but manageable, as incremental to the forces of nature Florida faces each year, and small relative to risks from Florida’s existing industrial activity."

Thursday, June 3, 2010

Energy Transfer Partners begins construction of Tiger Pipeline

DALLAS, Texas - Energy Transfer Partners, L.P. (NYSE: ETP) on June 1 announced that construction has begun on the 175-mile Tiger Pipeline, an interstate natural gas pipeline to serve the Haynesville Shale and Bossier Sands producing regions in Louisiana and East Texas.
The 42-inch Tiger Pipeline will have an initial capacity of two billion cubic feet per day and is expected to be in service in the first quarter of 2011. Through a planned expansion project announced in February, and subject to FERC approval, the ultimate capacity of the Tiger Pipeline is expected to be 2.4 billion cubic feet per day, all of which is sold out under long-term contracts ranging from 10 to 15 years. Pending necessary regulatory approvals, the expansion is expected to be in service in the last half of 2011.
The Tiger Pipeline will originate in Panola County, Texas, and terminate in Richland Parish, La., interconnecting to seven interstate pipelines and one intrastate pipeline for ultimate delivery to markets across the Northeast, Southeast, Mid-Atlantic and Midwest.
Construction of the pipeline has been awarded to two contractors: Henkels & McCoy (78 miles) and Michels Corp. (97 miles). Pre-expansion project costs for the Tiger Pipeline are expected to be $1.095 billion, down nearly $70 million from previous estimates.
"The start of construction on the Tiger Pipeline marks an exciting achievement for us as we are on schedule and under budget," said Lee Hanse, senior vice president, Interstate Pipeline Division. "From a financial perspective the Tiger Pipeline will benefit our unitholders as it will provide significant distributable cash flow in 2011 and subsequent years."

Wednesday, June 2, 2010

Wisconsin county drops charges against landowner in Enbridge case

SUPERIOR, Wis. - A northwestern Wisconsin man who was arrested for trespassing on his own property no longer faces charges.
During a pretrial hearing in Douglas County on May 24, 27-year-old Jeremy Engelking learned prosecutors will not pursue a disorderly conduct charge against him. A trespassing charge was dropped earlier.
Engelking wound up in jail after confronting an Enbridge work crew building a pipeline across his property in 2009. He told the workers they had no right to be on his property because he hadn't been compensated by the pipeline builder, Enbridge Energy Partners, for an easement. The Enbridge crew called in the local police who arrested and charged Engelking.
Engelking is reportedly considering a civil lawsuit now that the criminal charges against him have been dropped.

Tuesday, June 1, 2010

Energy Transfer Equity closes deal to acquire Regency GP

DALLAS, Texas - Energy Transfer Equity LP said on May 26 that it has closed its acquisition of the general partner of Regency Energy Partners LP.
The deal means Energy Transfer Equity now owns the general partner of both pipeline firm Energy Transfer Partners LP and natural gas company Regency. Both will operate as separate entities.
In addition, Regency said it has closed on its purchase of nearly all of Energy Transfer Equity's stake in the Midcontinent Express Pipeline, which gives Regency a total of 49.9 percent of the pipeline. The Midcontinent Express Pipeline is about 500 miles long and extends from Oklahoma to Alabama.
Energy Transfer Equity used its preferred units worth about $300 million to buy all of Regency's general partner from an affiliate of GE Energy Financial Services.
The deal was announced May 11.