Tag: Trump

A total of 210,000 gallons of oil leaked Thursday from the Keystone pipeline in South Dakota, the pipeline’s operator, TransCanada, said.

Crews shut down the pipeline Thursday morning, and officials are investigating the cause of the leak, which occurred about three miles southeast of the town of Amherst, said Brian Walsh, a spokesman for the state’s Department of Environment and Natural Resources.
This is the largest Keystone oil spill to date in South Dakota, Walsh said. The leak comes just days before Nebraska officials announce a decision on whether the proposed Keystone XL Pipeline, a sister project, can move forward.
In April 2016, there was a 400-barrel release — or 16,800 gallons — with the majority of the oil cleanup completed in two months, Walsh said.
About 5,000 barrels of oil spilled Thursday.
“It is a below-ground pipeline, but some oil has surfaced above ground to the grass,” Walsh said. “It will be a few days until they can excavate and get in borings to see if there is groundwater contamination.”
There were no initial reports of the oil spill affecting waterways, water systems or wildlife, he said.
TransCanada said it was working with state and federal agencies.
View image on Twitter
“The safety of the public and environment are our top priorities and we will continue to provide updates as they become available,” the company said.
The Environmental Protection Agency is monitoring the situation and will provide resources and assistance if needed, a spokesman said.
“EPA is aware of the spill and is receiving periodic updates from the state of South Dakota, which is overseeing response activity at the spill site,” he said.

Concerns about the spill

The Keystone Pipeline system stretches more than 2,600 miles, from Hardisty, Alberta, east into Manitoba and then south to Texas, according to TransCanada. The pipeline transports crude oil from Canada.
The proposed Keystone XL Pipeline, which would stretch from Hardisty to Steele City, Nebraska, would complete the proposed system by cutting through Montana and South Dakota.
The sections of pipeline affected stretch from Hardisty to Cushing, Oklahoma, and to Wood River, Illinois, the company said.
The spill occurred in the same county as part of the Lake Traverse Reservation. The leak location is not on Sioux property, but it is adjacent to it and has historical value, said Dave Flute, tribal chairman for Sisseton Wahpeton Sioux Tribe.
“We want to know how long is it going to take to dig this plume of contaminated soil and how can we be reassured, without a doubt, that it has not and will not seep into the aquifer,” he said.
Flute, along with the tribal emergency management director and the manager of the tribal office of environmental protection, arrived Friday morning at the staging area of the leak site to meet with representatives from TransCanada. Flute said he was out there to offer assistance and to understand the cause of the leak and the environmental impacts it might pose.
“We want to find out, was there a crack in the pipe? We don’t know. We want to get that information,” Flute said. “More importantly, and to stay positive, they did clean up the site, they did contain it.”
Environmental activist group Greenpeace said the spill shows the new pipeline in Nebraska should not be approved.
“The Nebraska Public Service Commission needs to take a close look at this spill,” said Rachel Rye Butler of Greenpeace. “A permit approval allowing Canadian oil company TransCanada to build Keystone XL is a thumbs-up to likely spills in the future.”

New Keystone XL

In March, President Donald Trump’s administration officially issued a permit that approved construction of the Keystone XL Pipeline.
Trump administration approves Keystone XL pipeline

The approval followed years of intense debate over the pipeline amid hefty opposition from environmental groups, who argued the pipeline supports the extraction of crude oil from oil sands, which pumps about 17% more greenhouse gases than standard crude oil extraction. Environmentalists also opposed the pipeline because it would cut across the Ogallala Aquifer, one of the world’s largest underground deposits of fresh water.
Tar sands oil is much thicker and stickier than traditional oil, significantly complicating cleanup efforts. The fact it’s thicker also means it needs to be combined with other hazardous materials to allow it to be transported in pipelines.
Native American groups have argued the pipeline would cut across their sovereign lands.
Trump said the new pipeline will be a big win for American workers, but critics say it won’t be, because most of the jobs would be temporary.

Dakota Access pipeline

TransCanada said Thursday that the section of Keystone pipe that was leaking was isolated within 15 minutes after a drop in pressure was detected.
According to the South Dakota Department of Environment and Natural Resources’ website, this is the third pipeline spill in the state this year. Another came in April when about 84 gallons of crude oil leaked from the controversial Dakota Access Pipeline in Spink County.
That pipeline, which runs through both Dakotas and two other states, drew fierce resistance from the Standing Rock Sioux tribe in North Dakota, the tribe’s allies and environmentalists.
Opposition to the pipeline sparked monthslong protests, with as many as 10,000 people participating during the peak of the demonstrations. Clashes with police at the protests turned violent at times, with one woman nearly losing her arm after an explosion last November.

screen-shot-2016-10-28-at-6-20-33-pm

What will Donald Trump actually do?

It’s a question many Americans are asking themselves now that the U.S. has wrapped up one of its least policy-specific elections ever. The president-elect has offered only the loosest of legislative prescriptions, including whatever plans he may have for the energy industry.

The mystery hangs over turbine manufacturers like Vestas Wind Systems, which fell 12 percent since the election, and coal companies such as Peabody Energy Corp., which soared 73 percent. In his only major energy speech, Trump, 70, said he would rescind “job-destroying” environmental regulations within 100 days of taking office and revive U.S. coal. It’s terrible news for efforts to slow the pace of climate change, but the impact on the renewable energy revolution may be limited. Here’s what it could mean for America’s clean-energy darling, Tesla Motors Inc.:

1. Solar and wind subsidies are probably safe

Tesla is, first and foremost, an electric car company. But on Nov. 17 shareholders will vote on final approval of CEO Elon Musk’s $2.2 billion deal to buy SolarCity Corp. The acquisition would make Tesla the biggest U.S. rooftop solar installer and the first major manufacturer to integrate solar panels with battery backup to extend power into the night.

The swift spread of rooftop solar in the U.S. has been made possible by two government policies. First, most utilities are required to credit homeowners for the excess power they send back to the grid. Those requirements are state-level and shouldn’t be affected by Trump. Second is the 30 percent federal tax credit to offset the cost of installations. The credits were first signed into law under Republican President George W. Bush in 2005 and extended by a Republican Congress late last year. Given their broad support, the subsidies are unlikely to be repealed.

2. Even without incentives, renewables will get cheaper

Solar panel prices have dropped, on average, more than 15 percent a year since 2013. On a utility scale, solar power is already cheaper than coal-fired grid electricity across most of the U.S., after subsidies. Even if the incentives were suddenly removed next year—an improbable and economically destructive scenario—the industry would eventually recover as prices continue to fall.

Incentives are designed to make superior new technologies initially affordable, but once those technologies take off, economies of scale take over.

Source: Bloomberg New Energy Finance

A loss of the federal tax credit could slow the rollout of Tesla’s unusual new rooftop solar shingles. Traditional rooftop panels, however, are almost ready to stand on their own. The payback period currently ranges from about 5 to 10 years, after subsidies and state rebates. If Tesla can achieve the cost savings it hopes for with the merger, it won’t be long before that’s the payback timeline without subsidies.

3. Gasoline fuel-efficiency targets could be dismantled

One of President Barack Obama’s most significant climate achievements was to push through ambitious fuel-economy regulations for U.S. vehicles. The Environmental Protection Agency is scheduled next year to re-asses rules intended to double the average efficiency of cars and trucks to almost 55 miles per gallon by 2025. Those goals could be delayed or dismantled under Trump, accelerating America’s shift to trucks and SUVs. Stocks of Detroit carmakers have predictably surged, while Tesla shares fell 4.9 percent in the two days after the election.

This is obviously bad news for human health and the environment, but it’s impact on Tesla won’t be catastrophic. The price of batteries is dropping rapidly, and by the early 2020s electric cars should be cheaper and better performing than their gasoline-powered equivalents across the board. Lowering efficiency standards will make gasoline cars a bit cheaper to manufacture, but it will also make them more costly to drive over the life of the vehicle.

4. Electric vehicle incentives will expire on their own

The U.S. push for electric cars was set in motion by a $7,500 federal tax break. The Trump administration could eliminate the subsidy, but the impact would be short-lived for electric pioneers including Nissan Motor Co., General Motors Co., and Tesla. That’s because the electric-vehicle subsidies were already designed to phase out after each automaker reaches its 200,000th domestic EV sale. Tesla may be first to cross that finish line, probably in the first half of 2018.

The incentives were intended to overcome steep startup costs and slow initial demand for new electric vehicles. Removing the tax break now would effectively pull the ladder up behind Tesla and make it more expensive for other automakers to transition to battery power, a result that wouldn’t be in anyone’s best interest.

5. States wield the power of their own incentives

Some of the biggest incentives in renewable energy are offered by states, not the federal government. Each state has authority over its own solar and wind rebates, credits for power sold back to the grid, renewable-mix requirements for utilities, and electric-car subsidies. These policies cross ideological borders into deeply Republican states. For example, Louisiana residents can get an additional tax credit of almost $10,000 for buying a long-range electric car. In Colorado, it’s an extra $5,000.

Under Trump, the role of cities and states in regulating pollution and expanding clean energy will increase. So will the disparity between states that prioritize the issue and those that don’t. But again, don’t expect the energy revolution to follow rigid red-state, blue-state definitions. The states producing the most wind power in the U.S. include Texas, Kansas, and Oklahoma. For solar, Arizona, North Carolina, and Nevada are among the top ten. Of those, Hillary Clinton won only Nevada.

6. Keystone’s resurrection won’t make gasoline cheaper

This election was great news for oil companies. Reviving the Keystone XL pipeline, which was rejected under Obama, is on Trump’s list of priorities for his first 100 days. He is also likely to support the beleaguered Dakota Access Pipeline. The company building it, Energy Transfer Partners LP, says business is “only going to get better” under Trump.

These pipelines are hugely symbolic for climate activists who say we can’t keep building infrastructure for oil we can’t afford to burn. But the impact of the pipelines themselves is open to debate. They increase profitability for oil companies, but as oil trades on a global market, the impact on U.S. gasoline prices and by extension demand for electric cars is negligible.

7. Trade barriers with Mexico would hurt Tesla’s rivals

Trump wants to scrap or renegotiate the North American Free Trade Agreement (NAFTA). That could be a dicey proposition for the car industry. Since 2010, nine automakers, including Ford Motor Co., GM and Fiat Chrysler have announced more than $24 billion in Mexican investments. They rely on Mexican plants to produce millions of vehicles and a high volume of parts.

By contrast, Tesla’s manufacturing and assembly are done almost entirely in California and Nevada. Tesla also plans to begin solar-panel production next year at SolarCity’s massive plant in Buffalo, N.Y. Tariffs on solar panels made outside the U.S. would make Tesla’s American-made products more competitive.

In the end, the confluence of all of these forces, but especially the precipitous decline of coal and increasing affordability of renewable sources of energy, is probably too strong to be reversed by the incoming Republican administration. That’s good news for Tesla, and a lot of other companies working to clean up the energy supply.

Bloomberg

Crude oil and water pour from a well head at an oil field near Baku, Azerbaijan, on Wednesday, Feb. 4, 2009.  Since gaining its independence with the 1991 collapse of the Soviet Union, Azerbaijan has become an important energy exporter and transport hub for Caspian Sea oil and gas. Photographer: Jeyhun Abdulla/Bloomberg News

Last week, I wrote that OPEC needs friends and a miracle to re-balance the oil market. Could President Trump be that unwitting buddy, providing the miracle by tearing up the nuclear agreement with Iran and removing almost a million barrels a day of supply at a stroke?

Trump’s number one priority is to dismantle the “disastrous” deal — although his to-do list might have changed since saying that back in March. As luck would have it, that daily million barrels is about the same size as the cut OPEC needs to make, as I calculated last week.

OPEC’s Deepening Cuts
The cuts OPEC needs to make to reach its output target are just getting bigger and bigger
screen-shot-2016-11-14-at-11-12-23
NOTE: Assumes no further increases from Libya, Nigeria, Iran or Iraq. Cuts based on OPEC secondary source production estimates

Can he do it? Yes, despite assertions to the contrary from Iran’s President Rouhani and a slew of analysts. Here’s how:

The Joint Comprehensive Plan of Action, as the deal is snappily titled, wasn’t ratified by Congress, but brought into force by President Obama via executive order. Trump could rescind that. The fall-out would be messy, but it could be done (in theory).

There’s another way too, enshrined within the agreement itself. The dispute resolution mechanism allows any signatory to refer a perceived breach of the deal’s terms to the joint commission created to oversee the accord. If the complaining party isn’t satisfied with the outcome and believes the breach constitutes “significant non-compliance”, it can refer it to the U.N. Security Council. The Security Council would then vote — and here’s the killer blow — – not on whether to re-impose sanctions, but on whether to “continue the sanctions lifting.”

That might not sound like a big difference, but it’s critical. By framing the vote this way, the U.S. could, in theory, veto the resolution. All the U.N. sanctions on Iran would then be re-imposed. Simples.

That just leaves EU sanctions, which prohibited — among other things — the importing of Iranian oil into EU countries. We might expect some sort of European backlash against unwinding the deal, but it might not be very effective.

The tortuous process of re-establishing Iran’s oil trade with Europe shows that only too clearly. Although there were willing buyers and a very willing seller, the difficulty came in finding insurers who would underwrite the transactions, or shippers to carry the crude. All the big re-insurers had at least some U.S. involvement and they were extremely hesitant to pick up the business — even with the apparent backing of the Obama administration. They would drop the business like a scalding hot potato if the new president killed the deal. End of Iranian oil flows to Europe.

Iran’s Oil Export Surge
Iran’s crude oil exports have risen by more than 1 million barrels a day since sanctions were eased
screen-shot-2016-11-14-at-11-13-37
Source: Bloomberg tanker tracking
NOTE: Other includes Japan, South Korea, Turkey, Taiwan and Syria

Elsewhere, important Asian buyers were threatened in the past with the loss of access to the U.S. banking system to persuade them to cut their purchases of Iranian. This tactic would probably work again.

Of course, Iran would treat the move as grounds to abandon its own commitments. Coming shortly before Iran’s presidential election in May, it would be a huge boost to Tehran’s hardliners. You’d expect life to become more difficult for the Americans in Iraq, where it’s engaged alongside Iranian-backed militias in ousting Islamic State from its last stronghold in the country — another Trump priority.

But at least the crude price would recover, which would be great for U.S. oil, if not so good for motorists. I guess the new president will have to choose who to please.

Bloomberg