TIME energy

Gas Stations in 24 States Drop Prices to $2 a Gallon

Mark Monaham, owner of the Raceway gas station in McComb, Miss., changes his fuel price billboard, Friday, Dec. 19, 2014. Gas prices throughout the region continue to fall as oil prices plummet.
Mark Monaham, owner of the Raceway gas station in McComb, Miss., changes his fuel price billboard on Dec. 19, 2014. Daniel Lin—AP

Christmas comes early for many commuters

An oil boom has pushed gas prices at some stations, as of Saturday, down to as little as $2 a gallon.

Price tracking service GasBuddy.com found that pockets of low prices below $2 have also cropped up across the country, while average prices across the U.S. are tracking at $2.43 a gallon.

“As of this morning, there are 24 states with prices under $2 a gallon,” GasBuddy’s senior petroleum analyst told USA Today.

Commuters in Missouri have reaped the biggest windfalls, with gas dropping to $1.96 a gallon in Springfield–and even lower in some outlying towns.

With Saudi Arabia’s announcement in September that it would keep the oil flowing, despite falling prices, analysts predict that gas prices have not bottomed out just yet. American Automobile Association analysts expect prices to fall by another seven cents, just in time for Christmas.

Read more at USA Today.

TIME energy

New York Bans Fracking

After years of debate in the state over the controversial drilling technique

The administration of New York Governor Andrew Cuomo announced Wednesday that the controversial drilling technique known as fracking will be banned in the state, citing concerns over risk of contamination to the state’s air and water.

“I cannot support high volume hydraulic fracturing in the great state of New York,” acting Health Commissioner Howard Zucker said. The announcement comes after years of debate over the practice, during which New York has had a defacto fracking ban in place, the New York Times reports.

Fracking employs chemicals and underground explosions to release oil and gas trapped in shale deposits that are inaccessible by conventional drilling techniques. Some environmentalists contend that fracking contaminates groundwater and can contribute to seismic activity, and that increased drilling activity can contribute to air pollution and other environmental problems.

[NYT]

TIME energy

New Republican Congress’ First Order of Business: Keystone Pipeline

GOP Congress Agenda
In this Oct. 4, 2012 file photo, large sections of pipe are shown in Sumner, Texas. Republicans are counting on a swift vote in early 2015 on building the Keystone XL pipeline to carry oil from Canada to the U.S. Gulf Coast now that Republicans clearly have the numbers in the Senate. Tony Gutierrez—AP

It'll set up a confrontation with President Obama.

Senate Minority Leader Mitch McConnell said Tuesday that the first priority for the new Republican-controlled Senate next year would be to pass a bill authorizing the Keystone XL pipeline, setting up an early confrontation with an Obama Administration hesitant to ignite opposition from its green supporters.

“We’ll be starting next year with a job-creating bill that enjoys significant bipartisan support,” said McConnell.

Alaska Senator Lisa Murkowski, a top Republican on the Energy Committee, said that the bipartisan measure was important as it would “basically set the table” for the new Congress. Both McConnell and Murkowski pledged that the bill would be open for amendments and acknowledged the fear that senators could bring unrelated ones that could sink the bill. Their hope is that most senators would prefer “regular order” instead of tactics that limit rank-and-file members’ influence. Many senators, including some Democrats, grew frustrated with Senate Majority Leader Harry Reid for limiting the amendment process to protect vulnerable members of his party during the midterm cycle.

“When we say it’s open for amendments, it’s open for amendments,” said Murkowski. “Santa Claus is going to be keeping me awake, not worrying about what’s going to come.”

Authorizing the Keystone XL pipeline has been a dream for senators from the Great Plains to the Gulf of Mexico. In her failed reelection bid, Louisiana Democratic Senator Mary Landrieu fell one vote short of rallying enough of her fellow Democrats to pass the bill a few weeks ago.

The 1,179-mile pipeline has been blocked for years despite a State Department report concluding that it would not have a significant effect on greenhouse gas emissions. But study also found that it would create a small number of permanent jobs—around 50—and was published before a dramatic drop in oil and gas prices that could boost environmentalists’ opposition of the pipeline. The Keystone pipeline’s fate could also be taken out of Congress’ hands entirely, depending on a Nebraska court case that could alter its path down the heart of the country.

MONEY energy

3 Ways to Profit from Falling Oil Prices

Fortune Teller's ball with oil sloshing inside
Gregory Reid

Stagnant global demand and increased supply has pushed oil to its lowest price since 2009. Here's how savvy investors can take advantage.

Big jolts to energy prices are often caused by major economic imbalances—like rising tensions in the Middle East setting off supply scares. Or a dropoff in demand from a recession, causing prices to plummet.

This time there is no global crisis behind crude’s slide (from $105 a barrel in the summer to around $60 recently, its lowest level since 2009). Instead to blame: fresh worries about growth in Europe, Japan, and China, set against rising production in Saudi Arabia, Russia, Libya, and the U.S.

Don’t expect producers to turn off the spigot just yet, especially in the U.S., where the burgeoning fracking industry can still profit at lower prices. Analysts at Goldman Sachs predict output and use will both grow in 2015, but supply will outpace demand. That should push oil down further. Here’s how you can protect your portfolio and profit from the oil glut.

Your Action Plan

Ease off emerging markets. Russia and Iran need oil at or above $100 a barrel to avoid major budget deficits, says Matthew Berler, CEO of investment firm Osterweis. The Saudis have been playing hardball by refusing to cut production, and if they continue, “other parts of the emerging markets could get hit,” says Tom Forester, head of Forester Capital Management. Good reason to cut emerging markets to 5% of your portfolio.

Bet on shipping. With gas expected to stay 30¢ a gallon below 2014 highs, “the transportation industry is getting a big windfall,” says economist Edward Yardeni. Railroad stocks have been on a tear for years. So lean toward cheaper truckers and airlines, which benefit from sinking prices and rising spending. Two-thirds of SPDR S&P Transportation ETF is in those industries.

Save on a gas sipper. “When gas prices go down, you see an immediate impact on vehicle choice,” says John Krafcik, president of pricing site TrueCar. Automakers have already begun discounting super-fuel-­efficient cars—the Ford Focus Electric recently fell $6,000—and Krafcik expects to soon see “fantastic deals” on gas-engine midsize and compact sedans, which can get 30-plus mpg. Everyone else may be buying big—the SUV is back!—but a contrarian play may pay off in the long haul.

 

TIME India

Putin Turns to India With Energy, Defense Offers

INDIA-RUSSIA-POLITICS
Russian President Vladimir Putin shakes hands with Indian Prime Minister Narendra Modi at Hyderabad House in New Delhi on Dec. 11, 2014 Findlay Kember—AFP/Getty Images

Russian President Vladimir Putin was holding talks with Indian leaders Thursday to strengthen trade and energy cooperation

(NEW DELHI) — Russian President Vladimir Putin was holding talks with Indian leaders Thursday to strengthen trade and energy cooperation with Asia’s third-largest economy as Western sanctions threaten to push his country’s economy to the brink of a recession.

Putin’s discussions with India’s Prime Minister Narendra Modi are expected to focus us on deepening ties at a time when New Delhi is perceived to be drawing closer to the United States, especially in areas such as defense and investment.

Indian officials said nearly two dozen agreements on space, defense cooperation and energy were likely to be signed.

“Looking forward to a productive visit that will take India-Russia ties to newer heights,” Modi tweeted.

Putin’s visit comes as Russia is faced with plunging global oil prices and a depreciating rouble that has battered its economy.

Russia’s relations with the Western nations have plummeted since it annexed Ukraine’s Crimean peninsula in March. The United States and Europe have imposed sanctions for what it says is Moscow’s role in providing Ukrainian militants with personnel and arms, something Moscow denies.

The annual summit meeting would provide an opportunity for the two nations to take stock of the “special and strategic partnership” that the two countries enjoy, said Ajay Bisaria, the top official in India’s Ministry of External Affairs.

“This is a very significant visit,” said Bisaria. “Russia is a long-standing and a steadfast partner for India.”

During the Cold War decades, India and the Soviet Union shared a close relationship, while the United States tilted toward India’s neighbor and rival, Pakistan, especially in the dispute over the Himalayan region of Kashmir.

India bought billions of dollars with of military hardware from Moscow during the Soviet era.

In recent years, India has become the world’s biggest arms importer, with an economic boom enabling it to modernize its military. New Delhi’s has a huge shopping list including fighter aircraft, tanks, submarines and other defense equipment that Moscow hopes to sell.

Over the past decade, India has tried to diversify its defense purchases, buying military hardware from the United States, Israel and France. Last week India said it was very close to clinching a $15 billion deal with France for 126 fighter aircraft.

Despite its attempts at diversification, Russia would continue to be the prime supplier of military hardware, Indian officials said.

“Russia is our primary defense partner, and will remain so for decades,” said Bisaria.

India is expected to seek assurances from Putin that Russia’s current problems with the Western world will not push it closer toward China. With the increased tensions with the West, Putin has sought to improve Russia’s relations with China with a new gas pipeline project worth tens of billions of dollars.

Putin has voiced hope that energy cooperation with India will increase, saying Moscow welcomes Indian energy companies to tap prospective oilfields in the Arctic. Russia plans to start supplies of liquefied natural gas to India starting in 2017, he said.

___

Associated Press writer Vladimir Isachenkov contributed to this report from Moscow.

TIME energy

Boom in Natural Gas Will Lead to More Greenhouse Gases

Dozens of companies have plans to build petrochemical plants, oil refineries and fertilizer facilities — such as this ConocoPhillips refinery in Westlake, Louisiana —to take advantage of cheap domestic natural gas from shale fields. Eleanor Bell—CPI

Same greenhouse gas emissions as 28 coal-fired power plants, according to a study.

WESTLAKE, La. — Stacey Ryan already knows where he’ll be buried.

It will be in Perkins Cemetery, the same place his mother and father were laid to rest after dying from cancer. It’s where his aunts, uncles, grandfather and great-grandfather are interred, having been felled by various malignancies, diabetes, and ailments of the heart, respiratory system and pancreas. Most of Ryan’s family is there, along with almost everyone else who ever died in Mossville, an unincorporated area founded by freed slaves.

Soon, the cemetery may be all that is left.

Sasol North America, the domestic division of a South Africa-based energy and chemical company, has begun buying out many of the 300 or so remaining inhabitants of Mossville, offering cash for the homes they grew up in and their parents built. Those it hasn’t bought may be expropriated come February. By 2018, the land Ryan and other holdouts have fought to keep will be consumed by an $8.1 billion ethane cracker and a multibillion-dollar gas-to-liquids facility, a massive addition to a plant Sasol already operates nearby.

The state of Louisiana says it will allow the facility to release up to 10.6 million tons of greenhouse gases and 3,275 tons of volatile organic compounds such as benzene, a carcinogen, into the atmosphere each year. This is on top of the 963 tons of pollutants that were discharged into the air by Sasol and other companies within the 70669 ZIP code last year, according to the U.S. Environmental Protection Agency.

“With the plans they have,” Ryan said, “Mossville just sits in the way.”

The Sasol project is among at least 120 of its type planned around the United States, according to data compiled and analyzed by the Environmental Integrity Project, a research and advocacy organization. Motivated by an abundance of cheap natural gas unleashed by hydraulic fracturing – fracking — companies like ExxonMobil and Shell want to build or add on to petrochemical plants, oil refineries and fertilizer plants in places like Mont Belvieu, Texas, and Monaca, Pennsylvania. They have asked state regulators for permission to release a collective 130 million tons per year of carbon dioxide equivalent, a measure of the global-warming potential of certain emissions.

From a climate perspective, that’s comparable to 28 coal-fired power plants, according to the EIP data, which were independently verified by the Center for Public Integrity.

Louisiana and Texas account for most of these projects — 34 and 50, respectively. In those states alone, 68 projects have been given final approval to emit up to 65.5 million tons per year of carbon dioxide equivalent. Sixteen more, which would add nearly 31 million tons to this total, have received draft permits or have applications pending.

Failing to address these emissions essentially gives the petrochemical industry a free pass at a time when the Obama administration is cracking down on coal, said Eric Schaeffer, EIP’s executive director and the former head of civil enforcement for the EPA.

“People talk about natural gas as being better for the climate, but hydraulic fracturing has also sparked this huge industrial boom that creates a lot of greenhouse gas emissions,” Schaeffer said. “We’re not paying attention to emissions from these other sources, and we need to for an honest accounting of fracking’s greenhouse gas footprint.”

Janet McCabe, acting assistant administrator for the EPA’s Office of Air and Radiation, said the White House has focused on power plants and the transportation sector, which make up the majority of the nation’s greenhouse gas inventory.

In a telephone interview, McCabe said “it’s really important that we focus on the highest priority categories and the categories that have the largest emissions, and that has been the theme of this administration and that’s the theme that’s in the climate action plan. …You want to focus there, but of course you want to keep track of where the entire domestic inventory is trending over time.”

In a written statement, Sasol said its Louisiana project will yield a projected 1,200 permanent jobs and another 5,000 or so during construction.

“This project is important to a region that has not enjoyed significant economic development for an extended period of time,” company spokesman Russell Johnson wrote. “As a result, economic opportunities exist for all of the citizens of the area that did not exist prior to the projects.”

The American Chemistry Council, the chemical industry’s main trade group, said the “new factories and expansions [around the country] will create hundreds of thousands of well-paying new jobs, strengthen communities, and put money in the pockets of American families.” Another trade group, the American Fuel & Petrochemical Manufacturers, declined to comment.

Asked about the increased emissions anticipated with the Sasol project, a state official said that all companies seeking to expand must follow the law.

“As far as we’re concerned, we’re holding them to all federal and state standards that exist,” said Bryan Johnston, a senior environmental scientist in the Louisiana Department of Environmental Quality’s air permits division. “They’re not getting a free pass at all.”

‘Only place…I feel safe’

Mossville is hard to find on a map, but that doesn’t make it any less real to the people who grew up there.

Founded in 1790 by Jim Moss, a freed slave, the community has no formal government and no elementary school (it was sold to Sasol in 2013 for $9.5 million). It’s enveloped by Westlake, an industrial haven just west of Lake Charles.

“This is the only place I’ve lived where I feel safe,” said Dorothy Felix, 75, whose roots in Mossville go back several generations. “We used to sleep with our windows up and leave our doors open because if the neighbors wanted to come by and come in, they could walk in the house. That’s the kind of life we lived.”

In 1945, Felix’s family lived about a mile up the road from her current home, she said, and closer still to where PPG Industries wanted to use an old magnesium plant to make chlorine and other chemicals. The company bought out all of the families who lived nearby. Some relocated within Mossville; others moved away.

Since then, industrial facilities have multiplied. Mossville is encircled by 14 of them, and more are coming. Seven companies have received final approval to build three chemical plants, three natural gas plants and one refinery in Calcasieu Parish since 2013, according to EIP data.

“In Westlake, they accept and support the industry because it gives them jobs,” said Wilma Subra, an environmental consultant who has been advising Mossville residents. Mossville receives not jobs but pollution that has caused “huge health impacts,” Subra said. High levels of cancer-causing dioxins – industrial byproducts deposited in fish and homegrown fruits and vegetables – were found in blood samples taken from 28 residents by the U.S. Agency for Toxic Substances and Disease Registry in 1998. Subra contributed to a 2007 study that tied the dioxins to nearby plants like PPG. “Yet we still couldn’t get the agencies to get the facilities to reduce their dioxin emissions,” she said.

At the final public hearing on the Sasol project, held March 25 at Westlake City Hall, residents’ anger boiled over.

“How many more communities are going to be taken from the people and destroyed?” Lois Booker Malvo of Lake Charles asked at the packed session. “There is no compassion, no respect or concern of a better life for the people… Industry, please …come back with better ways to make sure you stop destroying what God has created.”

‘Jacking up the baseline’

The uptick in greenhouse gases that can be expected if Sasol and the 100-plus other expansion projects come to fruition would seem to run counter to the White House’s pledge to slash carbon emissions in the United States.

“The President made it very clear from the beginning of his Administration that cutting carbon pollution is a top priority and that natural gas is a bridge fuel that will help us achieve this goal,” the White House said in a written statement to the Center. “In that vein, the President set a goal of reducing U.S [greenhouse gas] emissions in the range of 17 percent below 2005 levels by 2020 – a goal we are on track to meet. In fact, we are about halfway there already.”

Compared to the 6 billion tons of pollution the White House expects to save from increased fuel efficiency and other climate initiatives, as well as the recently announced emissions deal with China, 130 million tons of carbon dioxide equivalent (CO2e) may seem like a drop in the bucket.

Still, EIP’s Schaeffer said, “People need to understand, when we are looking long term, we are bringing in new industries that are jacking up the baseline.”

Liquefied natural gas export facilities could wind up being one of the biggest CO2e sources, according to EIP data. The three projects that have received final permits from regulators in Florida, Maryland and Louisiana have the potential to emit up to 7.5 million tons per year. Another seven proposed projects could add another 25.9 million tons annually, though it’s unlikely all will be built.

Chemical and natural gas processing plants account for the biggest number of final permits (68) and draft permits or applications (12) documented by EIP.

“There’s going to be more production in the U.S., which is great news from a jobs perspective, but not from an emissions perspective,” said Doug Vine, a senior energy fellow at the Center for Climate and Energy Solutions, a think tank. If the emissions do rise, he said, “We’re going to have to offset that.”

The EPA’s McCabe said that new plants are now required to use pollution-control “technologies that will be as efficient as possible in limiting the amount of greenhouse gases that are emitted.”

“As the technology evolves, the permit reviews will track with that and over time, plants will get more and more efficient,” she said.

In its statement, the American Chemistry Council said, “The new U.S. chemical industry production will be advanced, state-of-the-art, and energy-efficient. Since we are drawing market share from areas of the world where production may be more greenhouse-gas-intensive… our expansion in the U.S. may result in lower net global GHG emissions.”

Billions in investment

Sasol’s planned expansion in Westlake is the cornerstone of the company’s North American strategy.

“The abundance of affordable domestic natural gas played a key role in our decision to expand our operations in Louisiana,” company spokesman Johnson wrote. “We chose Louisiana — and Westlake specifically — because of its positive business climate, robust energy infrastructure and skilled workforce and proximity to our existing facilities.”

The 650-acre expansion project includes an ethane cracker and derivatives unit, set to come online in 2018, which will turn natural gas components from fields such as the Haynesville Shale in northwestern Louisiana and northeastern Texas into ethylene, used to make plastics and other products. Sasol also wants to build the first gas-to-liquids (GTL) facility in the United States, which would transform natural gas into diesel fuel and products such as paraffin and liquefied petroleum gas. Sasol already operates GTL facilities in South Africa and Qatar and is in the final stages of a project in Uzbekistan.

All told, Sasol said it plans to invest billions to quadruple its operations in southwest Louisiana over the next six years.

For the state, that investment didn’t come cheap.

The Louisiana Economic Development office said that Sasol received a state incentive package that included $115 million to buy land and develop the site, as well as a payroll incentive for the GTL project, which provides a rebate of up to 15 percent for each job over the first 10 years of operations. Sasol was given a separate payroll and tax incentive package for the ethane cracker portion of the project, and Louisiana is investing $20 million in SOWELA Technical Community College to help train the sorts of workers Sasol needs.

The project also qualified for Louisiana’s Industrial Tax Exemption, which absolves the industry of property taxes for 10 years on capital investments. The facility is projected to create 1,200 direct jobs, according to the LED.

“Despite a national economic downturn, this historic economic development win is happening in Louisiana because we have been laser focused on job creation by creating an environment where businesses want to invest and create jobs for our people,” Governor Bobby Jindal said at a December 2012 event announcing the project.

However, because of the hefty incentives, the state’s chief economist, Greg Albrecht, told the New Orleans Times-Picayune, “in my analysis (the Sasol project) would not be a break-even or a gain for the state.”

The costs are too steep, said Monique Harden, a lawyer and co-founder of Advocates for Environmental Human Rights, a non-profit public interest law firm in New Orleans.

“Sasol is getting all of this welfare from people who can ill afford it in the state of Louisiana and will be bringing more pollution, more hazards and more risks,” she said. “There’s no way you can offset what we’re giving them and what we’re giving up for them, with what they’re bringing in. But that’s never been part of the calculation in Louisiana.”

Jim Cox, who represented the Lake Charles area in the state senate from 1991 to 2000, said industry almost always gets its way in Louisiana.

“This state is ruled by oil and gas,” he said.

Cox served on the Revenue & Fiscal Affairs Committee and Labor & Industrial Relations Committee during his time in the legislature. He was an anomaly, he said — a politician who advocated standing up against the oil and gas companies.

“They claimed I was going to drive jobs out of the community,” Cox said. “That’s the influence of the money on the politicians. They heavily finance the campaigns and wine and dine the politicians and they basically own the state of Louisiana.”

Cox acknowledged that industry has brought jobs to southwest Louisiana.

“And to a lot of people, that employment is everything,” he said. “But not at the cost of your own health and safety and the welfare and the health and safety of your children.”

Sasol, for its part, insists it wants to be a good neighbor. It established operations in Westlake in 2001, after buying a chemical complex from Condea Vista, which had polluted the groundwater beneath Mossville and agreed to buy 206 homes for $13.88 million to settle a class-action lawsuit. As Sasol’s expansion has moved forward, the company has offered a voluntary buyout program to Mossville residents and held regular meetings with them. Sasol is also offering scholarships to students seeking careers in the chemical industry and says it will underwrite an oral history project in conjunction with the Imperial Calcasieu Museum to preserve people’s stories.

“Sasol is proud not only of what we are doing, but how we are doing it,” spokesman Johnson said. “We are continually engaging in dialogue with our neighbors, listening to their concerns and responding.”

The company approached regional EPA Administrator Ron Curry to discuss environmental justice issues in Mossville, Curry said at the Louisiana Chemical Association’s annual legislative conference in May.

“They think about the environment they are going to live in and the environment they’re going to raise their children in” he said. “When we have that sort of robust conversation that was initiated by the company, I think it’s a lesson and it’s a model for all of us…”

‘It’s not worth it’

Not everyone is sold.

At the March 25 hearing, more than 100 people crowded into the Westlake City Council chambers, waiting their turn to speak. Inside, the moderator reminded attendees to keep the center aisle clear for safety reasons. Resident after resident stepped up to the microphone to plead that the project be reconsidered.

“Everybody wants the $20 billion to come to this area and you can’t say you don’t,” said Delmar Bennett of Sulphur, La. “But when the $20 billion comes to this area, you want to make sure that you can at least be comfortable with the air that you breathe, and the water that you drink.”

“Your 1,200 jobs are not worth our children, grandchildren, future children,” said Dawn Kelly of Lake Charles. “Diseases that have no cures. Cancers that have no cures. It’s not worth it.”

It was an unexpectedly large turnout, said Michael Tritico, an environmental activist based in Longville, Louisiana, north of Lake Charles.

“That was gratifying,” he said. “There I was sitting there, thinking, ‘My goodness, this room is filled and overfilled and at the last hearing, they had me and that was it.’”

Still, Tritico is a realist. On a daylong boat trip down the Calcasieu River last June, the 71-year-old biologist spoke of the futility of being an environmentalist in an industry-loving state.

“I think what we do is symbolic,” Tritico said as the boat entered Clooney Island Loop, a bend in the river and site of a vast spill of ethylene dichloride, a chemical linked to kidney, liver and heart disease, from Condea Vista and ConocoPhillips in the 1990s. “We have done our absolute best and it’s made no difference.”

Tritico is old enough to have belonged to the Calcasieu Rod and Gun Club, a long-defunct group of hunters and fishermen who objected to the industrial pollution that began to appear in the 1930s. “They stood up and said, ‘You can’t do this. You’re ruining what we live for.’ They were told to shut up: ‘We need the jobs. You’re in the way of progress.’”

Tritico is still railing, knowing that people like him are branded “radicals, crazies, whatever.” In his written comments on the Sasol permit, he questioned the “no significant impacts” finding by the LDEQ. “If a project with unprecedented amounts of air and water emissions is declared to be so benign,” he wrote, “what is the point of having any regulatory framework?”

Mike Thomas, Sasol’s vice president of U.S. operations, reminded the audience at the March hearing that “more than 400 Sasol employees and their families— including me and my family — call Southwest Louisiana home and have a personal vested interest in the environmental conditions and quality of living in our area.”

In its statement to the Center, Sasol said that its permits “underwent the most rigorous review possible” by the LDEQ and the EPA. The two agencies, it said, had a “sharp focus on both greenhouse gases and on criteria pollutants, and were extremely thorough in their evaluations.”

The state’s Johnston said there were “certain things LDEQ has control over and things LDEQ doesn’t have control over. Site location, the Sasol buyout program, the willingness of Mossville residents to move — that’s not under the purview or regulation of LDEQ.”

McCabe said she wasn’t familiar with Mossville, but that in general, the EPA works with states to issue air permits that meet federal guidelines.

“The reason why activities like this go through the air permitting process is to establish that emissions from a plant are not going to create a health threat in the community,” she said. “There are areas in this country where there are concentrations of industrial activities and that’s one reason why those permitting processes are so important.”

The core problem, lawyer Harden said, is that the permits aren’t crafted with neighbors’ well-being in mind. She pointed to the historically African-American communities of Morrisonville and Reveilletown, which have been lost to industrial expansion in Louisiana. She also pointed to Bayou Corne, portions of which have been swallowed by a sinkhole caused by a salt dome that collapsed while being mined by a Texas company.

“There’s an inherent danger in our permitting process for communities like Mossville and so many others,” Harden said. “That’s the reason why these facilities go to places like Mossville. It’s because the permits don’t protect people. So you go to places where people socially, economically, and politically are also without protection.”

She urged regulators to consider federal and state environmental laws in harmony with international human rights treaties with which the U.S. has agreed to abide. Until that happens, she said, “It’s sort of like an outlaw situation — with the permit, I can do whatever I want and your needs and your rights have no moment.”

‘A place to lay my head’

Stacey Ryan worked for six years as a plant operator at Condea Vista and LyondellBasell before illness forced him to retire. In 2011, he moved his Hurricane Rita-era FEMA trailer to a small plot of land his family still owned near the entrance to the Sasol plant. Adjacent land had been sold to Sasol in 2001, along with the shotgun house he grew up in. Utilities won’t service his trailer — the result of a long-running dispute with city officials, who rezoned his property “heavy industrial” — so Ryan powers it with solar panels and batteries when he can. He sleeps in his truck when he can’t.

“Right now, I’m just trying to maintain a place to lay my head,” Ryan said.

In November, the Port of Lake Charles said it would allow Sasol to expropriate 24 parcels of land the company had been unable to acquire through negotiations or whose owners or heirs could not be located. Ryan’s property is among those parcels.

Residents have until late January to come to an agreement with Sasol. After that, the Port of Lake Charles will take over negotiations, said the port’s general counsel, Michael Dees. It will offer residents the highest of two appraisals for their land; if the offer is refused, the port will take the landowner to court.

Sasol said it has made “good faith efforts to purchase the properties” and that it was “willing to continue negotiations with property owners to avoid expropriation.”

For now, Ryan, who rejected a $40,000 offer from a local real estate agent for his property, is staying put.

His health continues to deteriorate. A chronic diabetic with severe kidney damage who lives on Social Security, he began losing his sight in November. No man in his family has lived beyond 52, he said. He’s 46.

“I was born here and raised here,” Ryan said, “but they won’t let me die in peace here.”

Jim Morris contributed to this story.

The Center for Public Integrity is one of the country’s oldest and largest nonpartisan, nonprofit investigative news organizations. Sign up for its newsletter.

MONEY Taxes

As Gas Prices Go Down, Likelihood of Higher Gas Taxes Goes Up

It's no wonder that many are calling for higher gas taxes lately: Gas prices are the cheapest they've been in years, so a hike in gas taxes is less likely to drive drivers nuts.

Raising taxes is never popular. But if there was ever a way to make a tax increase more palatable to Americans, it would be with a tax hike that didn’t seem like much of a tax hike. Like, say, one that was optimally planned so that even after the tax increase was instituted, the average household wouldn’t feel like it was paying much more out of pocket than it was in the recent past.

Just such a rare opportunity is now upon us. Gas prices have plummeted—dipping under $2 per gallon in some markets, with further decreases likely—and some want to take advantage of the situation by jacking up the gas tax at both the state and federal levels. Depending on how high taxes are raised, drivers might very well still be paying less to fill up than they were a few months or a year ago. So in a way, at least theoretically, this is a tax hike that wouldn’t feel like a typical tax hike.

A recent Washington Post column pointed out that the federal gas tax has been stuck at a flat 18.4¢ since 1993. At the time, the price of a gallon of regular was about $1. “It’s been a generation since gas taxes were increased at all,” Paul Bledsoe, a senior fellow on energy at the German Marshall Fund, told the Post. “So they are incredibly low by historic levels.”

Over the years, many have called for increases to the federal gas tax, which has not kept up with inflation. “Inflation has effectively reduced the [gas] tax rate by about one third” over the last two decades, the nonpartisan Tax Foundation noted earlier this year. Most states have flat gas taxes as well, and critics say the revenues collected are falling well short of what’s needed to address our nation’s crumbling infrastructure. “At the state and local levels, gas taxes cover less than half of state and local transportation spending,” said Tax Foundation economist Joseph Henchman.

Again, there’s nothing really new about calls to raise more funds to fix roads and other infrastructure needs at the national and state levels. What is new, however, is that gas is the cheapest it’s been in years, and that projections indicate per-gallon prices will remain well under $3 indefinitely. Predictions call for a national average of $2.94 per gallon next year, which would be roughly 45¢ less than 2014 and 70¢ less what drivers typically paid in 2012.

Hence the fresh push to raise gas taxes while prices at the pump are inexpensive. As Elaine S. Povich of the Pew Charitable Trusts observed recently:

“Cheap gasoline makes such levies more politically palatable, since consumers are less likely to notice the extra burden when they are filling up.”

It must be noted that while the federal gas tax hasn’t budged in two decades, state gas taxes (and other local taxes that help support roads and infrastructure) have been increased fairly regularly. Pennsylvania, Wyoming, and West Virginia are among the states where gas taxes were hiked this year or last, and discussions are in the works to raise state gas taxes in Iowa, Utah, Michigan, New Jersey, Oregon, and beyond. Data from the American Petroleum Institute shows that nationally, drivers pay an average of 49.28¢ per gallon when state and federal levies are added up.

While it’s unsurprising that environmental supporters and academics such as Mississippi State’s Sid Salter are renewing cries for gas tax hikes while gas prices are cheap, it’s particularly noteworthy that some Republicans seem in favor of tax increases at this opportune moment in time as well.

Last month, U.S. Sen. John Thune (R-SD) actually criticized President Obama for refusing to consider a gas tax increase over the years. “I always thought that was ironic, that he’s willing to raise every other tax,” Thune said to the Rapid City Journal. “And then the one that actually pays for something you can see a direct benefit from, he doesn’t want to talk about it.”

More recently, Congressman Tom Petri (R-WI), who is retiring soon, it must be noted, announced he is sponsoring a bill to raise the federal gas tax by 15¢ to 33¢ by 2013. “No one likes taxes,” Petri said in a Huffington Post interview in early December:

“But the issue is whether we should pay for transportation, or cut back on spending and transportation and have less roads and poorer infrastructure, or borrow it from our kids — debt financing it and hoping someone pays the debt off at a future date. And of those choices, it seems to me that the most responsible long-term approach is to do the thing that is unpopular but necessary.”

It helps that the move won’t be quite as unpopular as it would be had the gas tax hike been introduced back when the average driver was paying $3.50 or $3.75 per gallon.

TIME energy

China Strengthening Claim to South China Sea Oil and Gas

Cranes stand on a drilling platform construction site at the yard of Offshore Oil Engineering Co., a unit of CNOOC Ltd., in the Zhuhai Gaolan Port Economic Zone in Zhuhai, Guangdong province, China on Nov. 13, 2014.
Cranes stand on a drilling platform construction site at the yard of Offshore Oil Engineering Co. in the Zhuhai Gaolan Port Economic Zone in Zhuhai, Guangdong province, China on Nov. 13, 2014. Bloomberg—Bloomberg via Getty Images

China’s most recent undertaking in the Spratly island chain is not their first – the last 18 months have already seen three reclamation projects

This post originally appeared on OilPrice.com.

Not gone and not forgotten, China is ready to solidify its claim to the South China Sea (SCS). Recent satellite imagery confirms China is conducting significant land reclamation operations in the Spratly Islands in the SCS. The SCS is an important fishing ground and is believed to hold large amounts of oil and gas. Undermining the United States’ influence in the region, China intends to play the shepherd in one of the world’s busiest trade routes.

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BBC

The Spratly Islands along with the Paracel Islands and several maritime boundaries in the SCS have been hotly disputed for several centuries. The conflict includes Brunei, China, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam and has predominantly centered on historical and cultural claims. Though offering very little in the way of land or resources, the islands serve as a tangible marker. As such, parties to the conflict have been quick to occupy them.

Related: Has The PRC Decided On Its Global Strategic Posture?

China’s most recent undertaking in the Spratly island chain is not their first – the last 18 months have already seen three reclamation projects. However, at more than 3,000 meters and counting Fiery Cross Reef is their grandest venture yet and appears destined to house an airstrip and harbor, both capable of supporting military hardware. The Philippines, Malaysia, and Vietnam already operate airstrips in the Spratlys, but can only support smaller, prop-based aircraft.

As it pursues expansion, China has been hesitant to engage in multilateral negotiations and meaningful dialogue on the SCS was relegated to the sidelines at the recent APEC and ASEAN summits. Instead, China – demanding an in-house solution to the convoluted matter – is content to flex its superior political and military might to limited opposition. Reluctant to step on any toes and with its feet in multiple courts, the United States is short on political recourse, and that’s how China likes it.

Though China’s aims are long-term, control of the Spratlies and Paracels is not subsidiary to any prize that may lie beneath. Chinese President Xi Jinping’s “Asian security concept” calls for Asian solutions to Asian problems and seeks to limit Western influence in such “domestic” affairs. Unchecked dominance in the SCS, whether through direct force or intimidation, would be a remarkable victory in this regard.

And to the victor go the spoils, which in this case are still pretty unclear, a side effect of the conflict itself. The Energy Information Administration estimates the SCS holds approximately 11 billion barrels (bbl) of oil and 190 trillion cubic feet (Tcf) of natural gas. That estimate jumps to as much as 22 bbl of oil and 290 Tcf of natural gas according to a U.S. Geological Survey study. Chinese National Offshore Oil Company (CNOOC) is perhaps the most optimistic and estimates undiscovered resources of oil and gas in the SCS total 125 bbl and 500 Tcf respectively.

Related: China’s Emissions Could Negate Global Efforts Against Climate Change

map

To date, the SCS nations have been relatively successful drilling in their near-offshore waters. Malaysia and Thailand for example, have created Joint Development Agreements to expedite production without addressing territorial disputes. For its part, China has largely played the provocateur. In 2011 and 2012, China offered a slew of oil and gas blocks to foreign bidders; the blocks – in contested waters – received no bids. More recently in May, China stationed its new deepwater drilling rig within Vietnam’s Exclusive Economic Zone setting off a series of violent protests in Vietnam.

Disregarding today’s low commodity prices, the SCS is a tough sell for Western majors unwilling to take sides. Shell and ExxonMobil have been the most active in conflict-free waters and any multilateral resolution favors their size and deepwater drilling experience.

Despite the uncertainty of the resources below the surface, there is quantifiable wealth above. Approximately 14 million barrels of crude oil and over half of the global LNG trade pass through the SCS daily. In all, $5.3 trillion in total trade moves annually through the SCS. With an aim to control no less than 80 percent of the sea, China may soon be able to impose its will on global trade patterns.

More Top Reads From Oilprice.com:

TIME energy

The Unwelcome Reality for U.S. Coal Exports

The Uintah Basin on Oct. 14, 2014, home to a large coal power plant.
The Uintah Basin on Oct. 14, 2014, home to a large coal power plant. RJ Sangosti—Denver Post via Getty Images

A global glut in coal supplies means that the business case for U.S. coal exports is shrinking

This post originally appeared on OilPrice.com.

U.S. coal export capacity is running well below capacity, and as such, exporting coal from the U.S. west coast is a losing strategy.

That comes from a new report put out by the Institute for Energy Economics and Financial Analysis (IEEFA), which found that despite the very lofty plans by many coal companies to ship coal to rapidly growing markets in Asia, doing so would result in a financial loss.

The report finds that even existing coal export terminals are not running full tilt. The U.S. exports coal largely through ports on the east coast – at Hampton Roads, VA, and Baltimore, MD – and along the Gulf Coast. But even during one of the strongest years for coal exports, 2012, these ports were exporting much less than their nameplate capacity.

In 2012, east coast coal terminals only shipped out 68 million tons of coal, 64.8 percent of the total amount of coal it could handle at full capacity. The figures were similar for the combined ports on the Gulf Coast, which only ran at 66 percent of capacity.

Related: Coal Exporters Just Got A Big New Competitor

Not only that, but coal exports have declined since their peak in 2012. But with a declining domestic market, why wouldn’t coal producers send more of their coal overseas? The reality is that the international coal market is highly oversupplied already. Coal prices at Newcastle, an important international benchmark, are only around $60-$70 per ton, half of their peak in 2011 at $132 per ton.

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The coal glut has become so acute that Glencore, one of the world’s largest mining companies, decided on November 14 to close all of its Australian coal mines for three weeks beginning in mid-December due to oversupplies on the global market. That will mean reducing coal production by 5 million tons. “This is a considered management decision given the current oversupply situation and reduces the need to push incremental sales into an already weak pricing environment,” the company said in a statement.

A global glut in coal supplies means that the business case for U.S. coal exports is shrinking. The IEEFA report points to the case of Arch Coal as an example. In 2011 the company predicted that U.S. coal exports would reach 245 million tons by 2015. Other producers agreed. “The U.S. has lots of coal. It has a wonderful rail infrastructure. But the piece of the logistical puzzle that is weakest is terminals. To get to the next level of growth, the new terminals need to be built,” Jim Orchard, vice president of Cloud Peak Energy, told the AP in a 2012 interview.

But coal export terminals are running well below capacity, even before new terminals have been constructed. IEEFA concludes that given current market conditions, not only do proposed coal export terminals on the west coast not make sense, but it would be unprofitable for coal companies to export through them even if they are constructed.

And building them has become a big question mark. Out of six proposed coal export terminals in Washington State and Oregon, only two remain, owing largely to fierce opposition at the local level on environmental concerns.

Related: Coal Baron Indicted For Role In Mine Disaster

The longer term outlook doesn’t look any better. China, the ultimate market that coal companies around the world are competing for, just announced that it would cap its coal consumption by 2020. Coming on the heels of the most recent climate change deal that China agreed to with the United States, limits on coal consumption will severely dampen the market for coal exporters moving forward.

Weak market conditions both at home and abroad are already hitting the bottom line for many American coal companies. Some are in serious financial trouble. Two major coal producers – Patriot Coal and James River Coal – have declared bankruptcy in recent years. And more could be coming. Arch Coal, in particular, has raised worries about the possibility of bankruptcy.

“We are planning for a somewhat reduced coal marketplace, in terms of prices and demand, through at least next year, with only a possible slight improvement in the years beyond,” the head of Murray Energy Corp., a coal producer, said in September 2014 at an industry conference.

In light of these conditions, west coast coal export terminals don’t make any sense.

More Top Reads From Oilprice.com:

TIME energy

Follow the Sand to the Real Fracking Boom

Halliburton Co. "sand castles" stand at an Anadarko Petroleum Corp. hydraulic fracturing (fracking) site north of Dacono, Colorado on Aug. 12, 2014.
Halliburton Co. "sand castles" stand at an Anadarko Petroleum Corp. hydraulic fracturing (fracking) site north of Dacono, Colorado on Aug. 12, 2014. Bloomberg—Bloomberg via Getty Images

Frac sand is poised for even more significant gains over the immediate term

This post originally appeared on OilPrice.com.

When it takes up to four million pounds of sand to frack a single well, it’s no wonder that demand is outpacing supply and frack sand producers are becoming the biggest behind-the-scenes beneficiaries of the American oil and gas boom.

Demand is exploding for “frac sand”–a durable, high-purity quartz sand used to help produce petroleum fluids and prop up man-made fractures in shale rock formations through which oil and gas flows—turning this segment into the top driver of value in the shale revolution.

“One of the major players in Eagle Ford is saying they’re short 6 million tons of 100 mesh alone in 2014 and they don’t know where to get it. And that’s just one player,” Rasool Mohammad, President and CEO of Select Sands Corporation told Oilprice.com.

Frack sand exponentially increases the return on investment for a well, and oil and gas companies are expected to use some 95 billion pounds of frack sand this year, up nearly 30% from 2013 and up 50% from forecasts made just last year.

Pushing demand up is the trend for wider, shorter fracs, which require twice as much sand. The practice of downspacing—or decreasing the space between wells—means a dramatic increase in the amount of frac sand used. The industry has gone from drilling four wells per square mile to up to 16 using shorter, wider fracs. In the process, they have found that the more tightly spaced wells do not reduce production from surrounding wells.

This all puts frac sand in the drivers’ seat of the next phase of the American oil boom, and it’s a commodity that has already seen its price increase up to 20% over the past year alone.

Frac sand is poised for even more significant gains over the immediate term, with long-term contracts locking in a lucrative future as exploration and production companies experiment with using even more sand per well.

Pioneer Natural Resources Inc. (NYSE:PXD) says the output of wells is up to 30% higher when they are blasted with more sand.

Citing RBC Capital Markets, The Wall Street Journal noted that approximately one-fifth of onshore wells are now being fracked with extra sand, while the trend could spread to 80% of all shale wells.

Oilfield services giants such as Halliburton Co. (NYSE:HAL) and Baker Hughes Inc. (NYSE:BHI) are stockpiling sand now, hoping to shield themselves from rising costs of the high-demand product, according to a recent Reuters report. They’re also buying more sand under contract—a trend that will lead to more long-term contracts and a longer-term boost for frac sand producers.

In this environment, the new game is about quality and location.

Frac sand extraction could spread to a dozen US states that have largely untapped sand deposits, but the biggest winners will be the biggest deposits that are positioned closest to major shale plays such as Eagle Ford, the Permian Basin, Barnett, Haynesville and the Tuscaloosa marine shale play.

The state of Wisconsin has been a major frac sand venue, with over 100 sand mines, loading and processing facilities permitted as of 2013, compared to only five sand mines and five processing plants in 2010.

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But with the surge in demand for this product, companies are looking a bit closer to shale center to cut down on transportation costs and improve the bottom line.

One of the hottest new frac sand venues is in Arkansas’ Ozark Mountains, which is not only closer by half to the major shale plays, saving at least 25% per ton on transportation costs, but also allows for year-round production that will fill the gap in shortages when winter prevents mining in northern states.

Related: 5 Things You Probably Don’t Know About Fracking

“In the southern US, we can operate year round, so there is no fear of a polar vortex like that which we saw last year with some other producers,” says Mohammad of Select Sands.

Chicago-based consulting company Professional Logistics Group Inc. found in 2012 that transportation represented 58% of the cost of frac sand, while Select Sands (TSX.V:SNS), estimates the costs between 66-75% today.

The competition is stiff, but this game is still unfolding, while increased demand is reshaping the playing field.

US Silica Holdings Inc. says demand for its own volumes of sand could double or triple in the next five years, and its three publicly-traded rivals—Emerge Energy Services (NYSE:EMES), Fairmount Santrol (NYSE:FMSA) and Hi-Crush Partners (NYSE:HCLP), have also made strong Wall Street debuts over the past two years.

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