From: Bo Ollison
To: Scott Jenkins,
Subject: September Energy Update
Date: Tue Sep 02 14:34:13 MDT 2014
Body:
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September Energy Update

I hope that you all had a wonderful Labor Day holiday! If you have any issues that you want to be included in the next Update, please email me at BoOllison@Gmail.com. Thanks so much!
 
Bo Ollison
 
 

ACTION ITEMS

The Export-Import Bank of the United States (Ex-Im) is one of the most important tools at the disposal of U.S. companies to increase exports and create good paying, American jobs. The benefits of its programs to the U.S. economy are plain: In fiscal year 2013, Ex-Im provided financing or guarantees for $37.4 billion in U.S. exports, thereby supporting more than 200,000 American jobs.  In FY2013, Ex-Im authorized $11.4 billion for infrastructure projects; $9.8 billion for long-term structures and project-finance transactions such as oil and gas development, power generation, mining and telecommunications; and $8.3 billion to support U.S. manufactured commercial aircraft, business aircraft and helicopters. FY2013 also saw the Bank continue its support for renewable energy projects, including an authorization of $257 million for renewable-energy exports in wind, solar, biomass and other renewable-energy industries, primarily to Central and Latin America. Business groups such as the U.S. Chamber of Commerce are encouraging citizens to let the U.S. Congress know the importance of Ex-Im’s reauthorization
 
The U.S. Treasury Department has announced that it is seeking comments by Monday, September 15 on interim final regulations addressing the investment and use of amounts deposited into the Gulf Coast Restoration Trust Fund established by the RESTORE Act of 2012.  The interim final rule becomes effective Tuesday, October 14. The RESTORE Act tasks the Treasury Department with establishing procedures governing Trust Fund deposits and expenditures (including compliance measures auditing requirements), as well as administering direct grants and Centers of Excellence Research Grants Program grants to the Gulf states. As to funds distributed by the Council, the interim final rule requires the Council to establish and implement a program to monitor compliance with its grant and interagency agreements entered into with the states, nongovernmental organizations, and federal agencies.
 
 

REPORTS

Shale Gas: A Game-Changer for U.S. manufacturing . A new report prepared by the University of Michigan acknowledges the “game changing” status of responsible oil and natural gas development and its potential to contribute to the manufacturing economy in many ways. Among the benefits of responsible development: Lower Energy Costs; Energy Independence; Development of New Industries; Transportation Sector with Increased Orders for Natural Gas Powered Vehicles; Stronger Balance of Trade; Manufacturing Investment; Less Expensive Fertilizer for Farmers; and Aluminum Manufacturing.

The shifting economics of global manufacturing. A new study from Boston Consulting Group shows the U.S. is making significant progress in regaining its position as the world’s manufacturing leader. The report suggests the gap between the U.S. and China is closing as China and other nations are losing their competitive edge over the U.S. thanks in large part to our abundant supply of affordable energy. BCG categorizes China as a nation “under pressure” as its competitiveness has declined, while the U.S is labeled as a “rising global star.” CNBC reports, “Higher energy costs also are dampening China's manufacturing prowess. The cost of industrial electricity rose by about 66 percent in China and 132 percent in Russia. The cost of natural gas soared by about 138 percent in China and 202 percent in Russia from 2004 to 2014, according to Boston Consulting research. … If manufacturing in China is getting dicier, the prospects for the U.S. and Mexico are improving. And cheaper energy prices are a key reason why. Natural gas prices have fallen by 25 to 35 percent since 2004 in North America due to large-scale production of shale.”
 
Unconventional 3.0: A new energy outlook. A new report by Wood Mackenzie has identified the three distinct phases of the unconventional onshore revolution and has explored the future of the sector in North America and internationally:
1.0   Numerous mega gas plays
This period was characterized by intense production growth, with operators amassing positions in dozens of mega gas plays. In 2005, the Barnett shale play in North Texas was the only significant shale gas play, but, by 2011, seven plays were all producing more than 500 MMcfd. Marcellus shale supply rose rapidly, with producers adding over 3.0 Bcfd to the market each year over a 36-month period.
Associated gas from the Eagle Ford, Niobrara, and sections of the Marcellus and Woodford also increased. However, it was the emergence of these liquids-rich gas plays that signaled the shift to the next phase.
2.0   High-margin, smaller-volume tight oil plays

In 2011, the booming supply of shale gas caused prices to drop, and producers quickly began redeploying their asset teams to high-margin tight oil plays, including the Eagle Ford, Wolfcamp, Bone Spring, and Cline.
Yet, as oil plays developed, total production volumes from successful plays were, on average, a third smaller compared with typical unconventional gas plays during a similar timeframe. Most importantly, a smaller absolute number of commercially successful large scale liquids plays have been discovered. Two plays are clear leaders, currently producing more than 800,000 b/d, while the third most productive asset is only producing 160,000 b/d.
3.0   Development of niche assets
The smaller number of large-scale plays in the unconventional 2.0 tight oil phase provided the impetus for operators to explore more aggressively. In this current third phase, producers are using the combined knowledge from unconventional 1.0 and 2.0 to target niche plays – essentially reevaluating existing inventory and underexplored strata previously considered insufficiently permeable.
Smaller companies are leading exploration efforts, and unexpected sweet spots are being identified at a fast pace. Consequently, non-headline 1.0 and 2.0 plays now have 35 more unconventional rigs running in them than they did last year. This is a larger year-on-year increase than the joint number of rigs added in the prominent Utica and Denver-Julesburg Niobrara plays, which together boast over 550,00 boed in production. In a global sense, operators have struggled to build unconventional 1.0 and 2.0 projects outside of North America, and we believe the emergence of this new 3.0 development phase could provide the bridge needed for international unconventional projects to ultimately be successful. Should countries such as Mexico, the UK, Colombia, and Poland adopt a similar operational mentality and deploy similar models within their projects, Wood Mackenzie analysts say they believe that unconventional 3.0 could become the first successful phase of international projects, rather than the last.

North America's sand market continues boom times, says Raymond James. North America's proppant sand market should see robust growth over the next three to five years, with aggregate consumption hitting 78 million tons per year (mtpy) by 2016, according to new research by Raymond James & Associates Inc. A collaborative team of analysts came together from across the research platform to complete the 41-page report, "North American Sand Rush: An Underappreciated Pillar of Growth." Consumption, demand, transportation markets and individual companies are reviewed. 


UPCOMING EVENTS

Shale Insight 2014 , David L. Lawrence Convention Center, Pittsburgh, PA, September 24-25.
 
2014 Penn State Natural Gas Utilization Conference, Hilton Garden Inn, Canonsburg, PA, October 14-15.
 
Association of Air Pollution Control Agencies (AAPCA) 2014 Annual Meeting, Omni Austin Hotel at Southpark, Austin, TX, September 11-12. Contact Clint Woods at (859) 244-8040 or cwoods@csg.org.
 
ALEC: State and National Policy Summit, Hyatt Regency on Capitol Hill, Washington, DC December 3-5.
 
CSG 2014 National Conference, Nashville, TN, December 10-13. Contact registration at (800) 800-1910 or registration@csg.org.
 

FEDERAL ISSUES

Obama pursuing climate accord in lieu of treaty. According to the New York Times, the Obama administration is working to forge a sweeping international climate change agreement to compel nations to cut their planet-warming fossil fuel emissions, but without ratification from Congress. In preparation for this agreement, to be signed at a United Nations summit meeting in 2015 in Paris, the negotiators are meeting with diplomats from other countries to broker a deal to commit some of the world’s largest economies to enact laws to reduce their carbon pollution. But under the Constitution, a president may enter into a legally binding treaty only if it is approved by a two-thirds majority of the Senate. To sidestep that requirement, President Obama’s climate negotiators are devising what they call a “politically binding” deal that would “name and shame” countries into cutting their emissions. The deal is likely to face strong objections from Republicans on Capitol Hill and from poor countries around the world, but negotiators say it may be the only realistic path.
 
U.S. Oil Imports Fell to 19-Year Low for July, API Says. U.S. imports of crude and fuel in July dropped to the lowest level for the month in 19 years as domestic production rose, the American Petroleum Institute said. Imports slid to 9.06 million barrels a day, the least for July since 1995, the industry-funded group said today in a monthly report. Domestic crude-oil production rose to the highest July level since 1986, staying above 8 million barrels a day for a sixth month.

Feds advance hydraulic fracturing rule. The Obama administration is on track to impose new mandates governing hydraulic fracturing on public land by the end of the year — a move that will test the White House’s ability to appease worried environmentalists while still sustaining the drilling boom bolstering the U.S. economy. The timeline is tied to the Office of Information and Regulatory Affairs, which launched a final interagency review of the measure. The office, which disclosed the review, generally has 90 days to vet proposed regulations, though it can finish early and extensions are allowed. It appears unlikely the final rule would be published before the Nov. 4 midterm elections — a benefit to several Senate Democrats in tight reelection contests who have weathered attacks from opponents seeking to tie them to the administration’s energy and environmental policies.  The measure, first proposed in May 2012 but then rewritten a year later, will update rules governing drilling on federal and Indian land for the first time in three decades. It also is set to be the first major federal rule governing the hydraulic fracturing technology that is now being used to stimulate oil and natural gas production from horizontal wells across the United States. Written by the Interior Department’s Bureau of Land Management, the rule is focused on boosting the integrity of wells to ensure fluids are contained within them, ensuring recovered fluids are safely stored and forcing disclosure of the chemicals used in hydraulic fracturing on public lands. The Interior Department stressed in a statement that it is committed to expanding “safe and responsible domestic energy production.”
 
Administration studies Artic requirements. The Obama administration is closer than ever to imposing the first minimum standards for oil and gas activity in U.S. Arctic waters, as Shell pursues permits that could allow it to resume drilling in the region next year. The Interior Department sent a draft of those Arctic regulations to the Office of Management and Budget, marking the launch of an interagency review process that typically spans months. The rule’s arrival at OMB was disclosed online by Sunday evening. Conservationists say the standards are urgently needed to ensure oil and gas companies working in the remote and unforgiving Arctic use ice-worthy vessels and have enough emergency equipment stashed nearby. A government advisory panel offered similar recommendations in 2013.
 
Feds vs. feds: EPA questions energy agency’s environmental review. Federal energy regulators have failed so far to show how a proposed liquefied natural gas project would affect the air, water and wetlands along Corpus Christi Bay (TX) and how to limit those effects, the Environmental Protection Agency says. In a letter to the Federal Energy Regulatory Commission, the EPA said its fellow agency’s draft environmental review for Cheniere Energy’s proposed export and import facility was insufficient. Craig Weeks, chief of EPA’s office of planning and coordination, said in the letter that his agency identified “a number of potential adverse impacts to aquatic resources, air quality, environmental justice populations and wetlands,” and recommended specific issues be addressed in the energy regulator’s final plan. Without an adequate plan to mitigate potential impacts, the terminal, proposed for a 991-acre site along the northern shore of Corpus Christi Bay, could cause a number of environmental problems, according to the EPA.
 
FERC approves hydropower development pilot. The Federal Energy Regulatory Commission (FERC) has approved a pilot to test a two-year licensing process for hydropower development at non-powered dams and closed-loop pumped storage projects. The 5 MW project proposed by Free Flow Power Project 92 (FFP) will be located at the Kentucky River Authority's existing Lock and Dam No. 11 on the Kentucky River. In compliance with the Hydropower Regulatory Efficiency Act of 2013, FERC investigated the feasibility of a two-year licensing process, developed criteria for identifying projects that may be appropriate for the process, and developed the pilot project. In addition to approving FFP's request to test a two-year process, the approval letter issued by the Office of Energy Projects requests that the developer conduct studies relating to project hydraulics, water quality, aquatic habitat, fish entrainment and survival, cultural resources, and rare, threatened, and endangered species
 
Feds’ new LNG export plan. The Energy Department upended the way it vets proposals to export liquefied natural gas, formally implementing a new approach that gives an advantage to projects that have completed an expensive environmental review. With a rule set to be published in the Federal Register, the Energy Department largely codified the process it first proposed in May, promising that it would mean swift decisions on LNG export projects that have undergone those legally required environmental analyses. “One of the overriding purposes of the procedural changes . . . is to enable prompt action on applications that are ready for final decision,” said Christopher Smith, the principal deputy assistant secretary for fossil energy. But the benefits of the change extend unevenly to the dozens of companies now vying to export U.S. natural gas to Japan, China and other countries clamoring for lower-cost supplies of the fossil fuel. And some industry representatives say the new process will exacerbate permitting delays, limiting the ability of U.S. gas producers and liquefaction facilities to compete for customers around the world.
 
U.S. government sells 400,000 acres in Gulf. The federal government has sold more than 400,000 acres in the Gulf of Mexico off the Texas coast for oil and gas exploration and development, an official with the Bureau of Ocean Energy Management said. The acreage represents a small fraction of the 21.6 million acres the agency had offered as part of a five-year program to develop resources on the outer continental shelf. Offerings since 2012 in the western Gulf attracted buyers for about 60 million offshore acres, adding about $2.3 billion to the Treasury. The sales, if approved, will bring in about $110 million. BP submitted the largest number of high bids, winning 27 of the 81 tracts that sold. It was the first sale in the western Gulf for BP since it was barred from such auctions after the 2010 oil spill. Conoco Philips spent the most of the 93 bidders in the sale, paying about $61 million for a tract in the ultra-deep-water Alaminos Canyon area.
 
Ending ban on oil exports would mean cheaper gasoline, energy executive says. Should the government end its 40-year-old ban on exporting crude oil, the nation would enjoy benefits ranging from jobs to a decline in gasoline prices, an oil industry economist said in a talk in San Antonio. ConocoPhillips senior economist Helen Currie, citing a study by the energy consulting firm IHS Inc., said prices at the pump would fall by about 8 cents a gallon should crude exports be allowed. Lifting the ban would allow the world’s refineries “to be able to make more gasoline and diesel because it would allow more efficient allocation of crude oil around the world,” she said. In addition, “we’d get a lot more jobs if we allow crude exports — roughly an additional 1 million jobs” for the years 2016 to 2030, according to the IHS study, Currie said. U.S. geopolitical standing also would improve, she said, “and it would probably smooth out some volatility we see in crude prices.”
 
EPA sends biofuel mandates to White House. The White House is now reviewing the Environmental Protection Agency’s planned quotas for renewable fuels, a major milestone in the long path to setting this year’s biofuel mandates. For now, at least, the targets are under wraps, as the Office of Management and Budget conducts a final interagency review and gives refiners, biofuel producers and other stakeholders one last chance to weigh in on the mandates. Although the agency reviews can span 90 days, the final quotas appear likely to be issued sooner. Even under the most optimistic timetable — a late September release — the volume mandates would still be coming out nearly a year after the Nov. 30, 2013 deadline the EPA was supposed to meet under federal law. A statute known as the “Renewable Fuel Standard” forces U.S. refiners to incorporate an annually increasing amount of biofuels into the nation’s diesel and gasoline supply but tasks the Environmental Protection Agency with setting each year’s specific volume obligations. The EPA last year proposed slashing the amount of renewable fuel required for 2014 to 15.2 billion gallons, some 3 billion gallons below the amount prescribed in federal statutes. Under the EPA proposal, up to 13.01 billion gallons of the required renewable fuel could come from traditional corn-based ethanol with 2.2 billion gallons coming from advanced biofuels. But Obama administration officials have hinted that the final number could climb, partly because gasoline consumption and the amount of vehicle miles driven have also risen since the proposal was unveiled last year. One floated target would raise the quota for ethanol, or conventional renewable fuel, to 13.6 billion gallons. The agency also could boost the overall target and hike the individual quotas for other categories, including cellulosic biofuels.
  

STATE ISSUES

States that say Yes to energy experiencing economic success The U.S. Energy Information Administration highlighted the importance of energy production to state economies and showcased the economic growth in those states where energy extraction plays a significant role in the economy. The  EIA reports, “At the national level, establishments that extract crude oil and natural gas as well as naturally occurring mineral solids, such as coal and ores, collectively referred to as the mining sector in economic data, accounted for about 2% of the U.S. economy last year. In some states, though, the mining sector accounts for a much larger share of the economy. Of the six states where mining comprised more than 10% of the state's economy in 2013, mining growth resulted in five of those states having higher economic growth than the national average.” North Dakota, Wyoming, West Virginia, Oklahoma, and Texas all experienced an increase in energy production and a resulting upsurge in economic growth

Vote No on 1 lead increases as all precincts report. An attempt to repeal Alaska's Oil and Gas Production Tax appears to have failed according to numbers released by the Alaska Division of Elections.  The latest figures show the 80,508 voters punched "NO" and 73,628 voted "YES" on  Ballot Measure One. The numbers are a victory for Governor Sean Parnell, who crafted the oil tax law known as SB21 in 2013. "I don't consider a five percent win in the end close," Parnell said.  "We've got lots of elections, and that's deemed a landslide." But critics of the existing law disagree.  Independent Candidate for Governor Bill Walker says even though the initiative appears to have failed, the small margin of defeat is surprising considering how much money was spent by the oil companies to kill the initiative. "The message I get from that is Alaska is looking for more balance, between the oil industry and our administration." The Division of Elections reported it had received 12,253 absentee ballots. 

Measure P opponent calls oil initiative a 'train wreck'. The California initiative, which will be on the Nov. 4 ballot, calls for a ban on enhanced oil extraction in Santa Barbara County, including hydraulic fracturing, acidization and steam injection, with proponents arguing that they want to protect air quality and water availability.
 
Fracking report clears way for California oil, gas leasing to resume. The federal government will resume oil and gas leasing in California following a report that found little scientific evidence that fracking and similar extraction techniques are dangerous. The Bureau of Land Management said the report — and additional environmental reviews — will allow it to begin leasing on public land next year. The announcement is welcome news for energy companies that have been shut out of the oil-rich San Joaquin Valley and Central Coast. But critics, including environmental organizations whose lawsuits led to a judge's order to halt leasing last year, said the analysis was rushed by the BLM and relied on spotty information. The study was conducted by the California Council on Science and Technology, a nonpartisan scientific research organization established by the state Legislature to advise state officials.
 
Lafayette’s fracking ban tossed. Colorado’s oil and gas industry has again won another court battle against a town that banned or limited fracking. A Boulder District Court judge tossed out a voter-approved fracking ban in Lafayette. The ban was adopted last year. The Colorado Oil & Gas Association challenged the fracking ban. Judge D. D. Mallard also struck down a voter-approved fracking ban in Longmont. She said in both decisions that local governments cannot regulate drilling. Earlier this month, a Larimer County judge struck down a fracking ban in Fort Collins.
 
Courts overturn Fort Collins Hydraulic Fracturing moratorium . Colorado courts have dealt another blow to local governments attempting to restrict hydraulic fracturing within their borders. Judge Gregory Lammons wrote that the Colorado Oil and Gas Conservation Act pre-empted Fort Collins' moratorium because it impedes a state interest and prohibits what state law allows. Though the local ordinance barred only fracking, not all drilling, Lammons wrote that it effectively precluded all oil and gas development because fracking is used on "virtually all" wells in Colorado.
 
Longmont, CO to appeal ruling against fracking ban. Longmont is pushing ahead in its legal battle to ban fracking and is inviting other cities to join an appeal to the Colorado Court of Appeals. City councilors voted unanimously to appeal a state judge’s ruling against its ban on hydraulic fracturing. At issue is a ban passed by voters by about a 60-40 margin in 2012 which was challenged in court by state regulators and the oil and gas industry. In July, District Court Judge D.D. Mallard ruled that the ban was an “irreconcilable conflict” with state law and said changing that was up to either the Legislature or a different court. “There’s a need for clarity on the issue. That’s why I am supporting this, and that’s why I believe we should go all the way (to the Colorado Supreme Court),” Councilwoman Bonnie Finley said. The state also challenged drilling regulations passed by the city in 2012 because they are stricter than the state’s regulations. However, the Colorado Oil and Gas Conservation Commission recently dropped the lawsuit as part of a compromise Gov. John Hickenlooper negotiated to keep drilling measures off November’s ballot. Mallard ruled that the city’s fracking ban would remain during an appeal. The attorney representing the city in the fracking case, Phillip Barber, told councilors it could take 2 to 5 years to reach a resolution in court, leaving the ban in place in the meantime. However, he also warned councilors that appealing to the state appeals court and then state Supreme Court could cost between $75,000 and $150,000. A trial at the Colorado Supreme Court could cost more than $250,000, he said.
 
IL Department of Natural Resources releases revised proposed rules. The Illinois Department of Natural Resources released proposed rules for high-volume oil and gas drilling to a legislative panel. Department officials say that rules to implement the state's year-old hydraulic fracturing law will be submitted to the Illinois Legislature's Joint Committee on Administrative Rules.
 
Kansas town loses bid for new trial over BP pollution suit. A southeast Kansas town has lost its latest bid to retry a class-action lawsuit claiming BP should do more to clean up industrial pollution from a refinery that closed in 1970. The Kansas Court of Appeals rejected the request from residents and officials of Neodesha, who sued in 2004 for more than $478 million in cleanup costs plus damages. A jury in Wilson County ruled for BP in 2007, finding that BP had fulfilled its duty to clean up contamination traced to the refinery that operated from 1897 until it was dismantled in 1970. But the trial judge set the verdict aside in 2008, concluding he gave jurors improper instructions. BP appealed the judge’s action and the Kansas Supreme Court reinstated the jury’s verdict in 2012. The plaintiffs then filed for a new trial based on new arguments about errors in the first proceeding, which lasted 17 weeks. In its ruling, the Court of Appeals acknowledged problems in the way the initial trial was conducted, The Topeka Capital-Journal reported. “We cannot conclude that this was a perfect trial, but we see no good reason to conclude that the court should have granted a new trial,” Judge Stephen Hill wrote on behalf of the three-judge panel.
 
Companies take a big step toward LNG export plant in Louisiana. Sempra Energy, GDF Suez and other investors in the Cameron LNG project have made their final investment decision on the project and intend to move forward with it, the companies announced. The facility will be located at Sempra Energy’s existing Cameron LNG import terminal in Hackberry, LA. It is expected to cost around $10 billion. “Today’s commitments from our project sponsors and international banks put us one step closer to delivering domestic natural gas to America’s trading partners in Europe and Japan,” Sempra LNG president Octavio M.C. Simoes said in a statement.
 
St. Tammany Parish, LA sues to prevent fracking; Cites concerns over aquifer. Louisiana is, by and large, a state that welcomes new oil and gas projects. This comes as no surprise – the industry provides jobs for residents and a substantial tax base for the state treasury. From 20-year-old tax exemptions to the recent passage of Senate Bill 469, which blocks lawsuits against 97 oil and gas companies, the industry is secure and welcome in the state. But after a proposition was made by Helis Oil and Gas to conduct hydraulic fracturing in St. Tammany Parish, one of the state’s most conservative and wealthiest parishes, residents are putting up strong opposition. “It’s somewhat unusual,” says Lisa Jordan, executive director of the Tulane Environmental Law Clinic.  “It’s pretty rare to have a lawsuit about oil and gas drilling in general. There aren’t that many cases in Louisiana where people are just challenging the entire concept.” The lawsuit, filed by St. Tammany Parish on June 16, seeks a declaratory judgment that the state should not grant Helis a permit to drill. The suit cites parish zoning laws, doubts regarding the government’s ability to provide adequate environmental regulations, and the parish’s authority to provide for the welfare of its constituents. The fight began in March of 2014 after Helis submitted its plan to drill a fracking well on the Tuscaloosa Marine Shale, located North of I-12 and a mile east of LA 1088 in St. Tammany Parish. In order to reach the shale over 13,000 feet below ground, the drill would inevitably go through the Southern Hills Aquifer. The aquifer is the source of 90 percent of St. Tammany Parish’s water. In less than a month’s time, the Parish held multiple, widely-attended meetings to determine how to prevent the drilling. On May 2, the Parish council passed a resolution to file a lawsuit against Helis, and the suit was filed on June 16, in the 19th Judicial District Court. The next day, June 17, opponents of the well also appeared before the Department of Natural Resources’ Office of Conservation. A conference for the lawsuit is set for Sept. 1, and the court date is set for Oct. 27.
 
State regulators allow fracking to start in Nevada. Fracking can move forward across Nevada after new regulations guiding the controversial activity were approved by state officials. Meeting in Elko, the Nevada Commission on Mineral Resources unanimously OK’d rules addressing the practice of hydraulic fracturing for oil and gas. The 2013 Legislature passed a bill requiring adoption of new regulations guiding hydraulic fracturing by January 2015, a milestone reached four months ahead of schedule.
 
Shifting to a clean energy future . The New York state proposal to rework the energy grid shifts it away from conventional power sources like coal-burning power plants and toward rooftop solar, wind farms and small micro-grids with a power generator that can keep the lights on in a single apartment building or hospital. The Reforming Energy Vision plan is designed to increase the state's reliance on renewable energy by shifting the energy markets away from large power sources to a series of smaller electricity-producers. As part of the framework of a plan released late Friday by the Public Service Commission (P.S.C.), large utilities will essentially become more like traffic cops that divert power to where it is most needed. “Today, our energy infrastructure is the equivalent of vinyl records in the age of smart phones and tablets,” P.S.C. spokesman James Denn said. “Our electrical power grid and the structures that control it must undergo a fundamental redesign to change how they operate.”
 
North Carolina limits coal ash . Lawmakers passed legislation they said would regulate coal-ash pits and clean up decades of toxic waste generated by coal-burning electricity plants. The action came six months after a spill at a Duke Energy power plant near Eden coated 70 miles of the Dan River in toxic sludge and ignited debate about the safety of 32 other coal ash dumps across the state.
 
Study: Crude exports an economic win for U.S. consumers, workers. A  report by ICT International and EnSys Energy projected that Ohio could add nearly 16,000 jobs and $2.68 billion to the state economy by 2020 “if restrictions on U.S. crude exports were lifted. Restrictions on exports only limit our potential as a global energy superpower,” Chris Zeigler, API-Ohio’s executive director, said in a released statement. “Additional exports could prompt higher production, generate savings for consumers and bring more jobs to Ohio. The economic benefits are well-established, and policymakers are right to re-examine 1970s-era trade restrictions that no longer make sense.”

Politicians cheer Pittsburgh airport gas drilling. The start of natural gas drilling near the Pittsburgh International Airport was cheered by Pennsylvania politicians from both parties. The ceremony to celebrate the recent start of drilling featured remarks by Republican Gov. Tom Corbett, Democratic County Executive Rich Fitzgerald, Republican U.S. Rep. Tim Murphy and local leaders. Fitzgerald said the vast majority of people he talked to support the Consol Energy Inc. project, which ultimately could bring more than $500 million in royalties to the Allegheny County Airport Authority. Consol, which is based in nearby Cecil, plans to drill a total of 45 wells from six pads over the next few years. The wells will tap into the gas-rich Marcellus Shale about 7,000 feet underground. “This is a great day for this region and this county,” Fitzgerald said, noting that Consol expects to spend an additional $500 million on drilling and related work. He said local people “see the jobs, they see the economic growth that comes into the community.”
 
Texas proposes tougher rules on wells after quakes. The Texas Railroad Commission has proposed tightening regulations for injection wells as scientists explore a potential link between high-pressure wastewater disposal and the earthquakes rattling North Texas. The oil and gas regulator’s newly hired seismologist, Dr. Craig Pearson, testified before a Texas House subcommittee on seismic activity, saying that earthquakes are regularly recorded, though at magnitudes too small to be felt. He says the existing rules for injection wells were designed to protect against groundwater contamination, but not seismic activity. “Because we’re now dealing with induced seismicity, the worry is not only about water moving up but out to dormant faults,” he said. The commission is now proposing that applications for drilling permits include information from the United States Geological Survey and injection well operators, in some cases, be required to disclose daily injection volumes and pressures. New rules would also give the Railroad Commission the authority to modify, suspend or terminate permits for disposal if the wells are believed to be causing earthquakes. A public comment period is open until Sept. 29.
 
Texas oil production up 25 percent from 2013. Texas oil production in July, the last full month for which data are available, increased more than 25 percent year-on-year, the state government said. The Railroad Commission of Texas, the state's energy agency, said crude oil production in July averaged 2.15 million barrels per day, up from the 1.68 million bpd reported in July 2013. The rise in production reflects a 31 percent increase in the number of drilling permits issued year-on-year. For natural gas, the commission said production of 602 billion cubic feet in June is an 8 percent increase year-on-year. Texas is the No. 1 oil producer in the nation. Combined with North Dakota, the No. 2 producer, they produced 120 million barrels of oil in April, the last full month for which data are available from the U.S. Energy Department.
 
C.S.X. reimburses Virginia city . C.S.X. officials have reimbursed the city of Lynchburg, Virginia, $100,000 for damages and emergency response to a derailment and fiery explosion of an oil train this spring. The rail line is also facing an undetermined fine for the explosion, which did not injure anyone.
 

 
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