Wednesday, August 31, 2011

API says Keystone XL construction would create 20,000 jobs

WASHINGTON, D.C. - Construction of the TransCanada Keystone XL pipeline to the U.S. Gulf Coast could create 20,000 jobs during the two-year construction phase if approved by the Obama administration, the American Petroleum Institute said on Aug. 18.

API joined the Teamsters Union in a teleconference to call for swift action by the U.S. State Department to approve the 2,000-mile Keystone XL pipeline that would transport crude oil from Canada's oil stands to the United States.

The project has been delayed for nearly three years as officials examine the pipeline's potential environmental impacts.

Environmentalists argue oilsands production results in higher greenhouse-gas emissions than traditional crude oil.

An environmental group called Tar Sands Action has been holding rallies in front of the White House to protest against the oil sands project, which the group calls "the largest carbon bomb in North America."

On July 26, the House of Representatives voted 279-147 in favor of a  bill that would force the State Department to decide on a permit for the pipeline by Nov. 1.

The majority of the jobs created will be union jobs, says James Kimball, chief economist with the International Brotherhood of Teamsters.

The project would increase Teamsters pipeline employment in the United States by approximately 40 percent, Kimball said.

Another quarter of a million jobs could be created to support pipeline activities, according to Kimball.

Tuesday, August 30, 2011

Persily says Alaska will have to make concessions to get gas pipeline built

ANCHORAGE - Alaskans just aren't going to rake in the big-time profits that they have from oil from large natural gas pipeline exports to the Lower 48, but they can capture a number of long-term benefits if attractive incentives to producers are provided to get a pipeline built.

"Politics and market economics are the problems here," Larry Persily, federal coordinator for the Alaska transportation project, told Alaska legislators at a hearing on Aug. 17. "AGIA (the Alaska Gasline Inducement Act) isn't going to get you a pipeline. All it gets you is the permit to build a pipeline." By virtue of AGIA, Alaskans are paying "to have a $500 million certificate hanging on the wall."

At a hearing of the Alaska Senate Resources Committee, Persily pointed out that it is not the responsibility of TransCanada PipeLines to negotiate with producers. Under AGIA, TransCanada has contracted with the state to get a certificate. "Getting a project is in the state's lap. The state is going to have to talk to producers."

A TransCanada representative testifying the day before said the pipeline had not had any producers sign up during their recent open season for the 1,715-mile, 4.5 Bcf/d gasline, which would span from a treatment plant at Prudhoe Bay to a connection with the Alberta Hub.

There are a lot of creative ways the state can cut a deal on incentives "without calling it a subsidy," Persily said. He suggested a "progressive" scheme where the state would collect less in the early years. "Look at it as a 50-year project," where the state wouldn't make as much on the first 10-20 Tcf, but would make it up on the next 60 Tcf. "There's a lot of opportunities to make money over 50 years."

Monday, August 29, 2011

U.S. State Department sees no major harm from Keystone XL pipeline

WASHINGTON, D.C. - A proposed pipeline to bring oil from Canada's tar sands to the U.S. Gulf Coast would have "no significant impact" on the environment, the U.S. State Department said on Aug. 26.

In a long-awaited environmental impact statement on the massive Keystone XL project, which has prompted repeated protests, the State Department said the pipeline would be safer than most current oil transport systems.

"There would be no significant impact to most resources along the proposed pipeline corridor," Assistant Secretary of State Kerri-Ann Jones told reporters upon the release of the report.

The 1,000-page report says no significant problems have emerged since a similar report was issued last year.

Jones said the report, which is one step in the regulatory process, does not indicate approval or denial of the massive pipeline. U.S. officials are due to make a final decision later this year after further review and hearings.

"This is not a lean in any way toward one particular decision or another," said Jones, the assistant secretary for Oceans and International Environmental and Scientific Affairs.

The report said that with extra precautions planned, the pipeline "would have a degree of safety greater than any typically constructed domestic oil pipeline system under current regulations."

It also said that scrapping the pipeline would have its own environmental costs, because refineries in the United States would then need to transport oil by other means such as trucks, railroads, barges and marine tankers.

The report did cite some potential problems in the event of a spill in "environmentally sensitive areas," including wetlands, rivers and other water resources, as well as areas with a high concentration of plants and wildlife.

As to a possible alternate route for the pipeline, the report said it "did not find any of the major alternatives to be preferable."

Friday, August 26, 2011

Filing activity suggests a busy fall for the energy sector

While many companies pushed back plans to launch deals amid extreme market volatility last week, filing activity showed no signs of a slow-down with new IPOs filing initial S-1's with the SEC on Aug. 12, including three energy companies.

So far this year, 17 IPOs have priced in the energy sector, compared to 18 in all of 2010. The U.S. IPO pipeline now includes 16 energy companies (nine percent of total IPOs) expected to generate nearly $4 billion in proceeds. This robust pipeline may make 2011 the most active year in a decade for the energy sector, matching peaks in 2006 and 2007 when 34 and 32 energy IPOs priced, respectively.

Rose Rock Midstream (Nasdaq: RRMS), a limited partnership recently formed by SemGroup to own and acquire midstream energy assets in the western U.S., plans to raise up to $181 million in its offering. The Tulsa, Okla.-based company, which was founded in 2011, booked $239 million in sales for the 12 months ended March 31, 2011. Barclays Capital is the lead underwriter on the deal.

Matador Resources (Nasdaq: MTDR), an independent energy company with a focus on unconventional natural gas exploration and production, plans to raise up to $150 million in its offering.

The recent successful IPO of C&J Energy (Nasdaq: CJES) and the acquisition of Great White Energy show interest in unconventional oil and gas drilling. The Dallas, Texas-based company, which was founded in 2003, booked $41 million in sales for the 12 months ended March 31, 2011. RBC Capital Markets and Citigroup are the lead underwriters on the deal.

Mid-Con Energy Partners (Nasdaq: MCEP), an owner, operator, and developer of primarily oil properties in the central United States, plans to raise up to $140 million in its offering. The Tulsa, Okla.-based company, which was founded in 2011, booked $25 million in sales for the 12 months ended June 30, 2011. RBC Capital Markets is the lead underwriter on the deal.

Thursday, August 25, 2011

EPA says Enbridge has not completed cleanup of 2010 Michigan oil spill

MARSHALL, Mich. - It isn't always visible, but there is still oil contaminating the Kalamazoo River Basin more than a year after an Enbridge petroleum pipeline ruptured near Marshall.

"The river looks great," observes Environmental Protection Agency emergency response chief Mark Durno. "The problem isn't what you see. It's what you don't see."

On Aug. 17, government and company representatives presented an update on the cleanup effort to a crowd at the Marshall Community Center.

The EPA says three quarters of a million gallons of spilled oil has been recovered, but there are still 100,000 gallons out there, mostly on the bottom of the Kalamazoo River.

"There is still submerged oil spread along 35 miles of the river impacted by the spill," EPA regional administrator Susan Hedman told the audience.

"There is oil in the river," agrees Bob Sackrider, who owns riverfront property. " You can see the oil in the river, so it's there."

On July 26, 2010, Enbridge Line 6B ruptured and spilled at least 843,000 gallons of oil into Talmage Creek and the Kalamazoo River.

Enbridge crews are stirring up the oil on the river bottom so it rises to the surface. They skim it off and then repeat the process.

"We assess, we clean and after we are done cleaning we reassess," says Dumo.

"We will stay and keep working until the river is restored," adds Hedman.

Wednesday, August 24, 2011

Caterpillar selected to power Asian Gas Pipeline in Kazakhstan

LONDON - Caterpillar has been selected to provide power solutions for the Asian Gas Pipeline, a joint project between Kazakhstan and China.

Caterpillar will provide 6x Cat G3516C gas generator sets and 2x C18 generator sets.

Each G3516C generator set will provide the gas compression stations with 1,555 ekW (1,944 kVA) of rated power at 1,500 RPM. The C18 generator sets will be utilized as emergency backup power for the gas compression stations.

Once completed, the Asian Gas Pipeline will transport 30 billion cubic meters of natural gas from Turkmenistan to China and 10 billion cubic meters of natural gas from Kazakhstan to China per year, thereby delivering approximately two percent of China's energy consumption.

The construction of the pipeline initially started in July 2008 and is due to be completed in late 2013 or early 2014. The total length of the 42-inch pipeline, which is carried in two lines, will exceed 6,500 km. - 200 km. in Turkmenistan, 510.5 km. in Uzbekistan, 1,300 km. in Kazakhstan and 4,500 km. in China.

The Asian Gas Pipeline is the region's largest pipeline construction project and is a joint venture between KazMunayGas and China National Petroleum Corp. The main contractors are KazStroyService and China Petroleum Engineering and Construction Corp. KazStroy Service will construct two gas compression stations and a gas metering station while China Petroleum Engineering and Construction Corp. is to build three gas compression stations in Kazakhstan.