May 2014

The last barrel

West Virginia’s Manchin tries to push Keystone XL through Senate
Kurt Abraham / World Oil


Give credit to that rare bird of the U.S. Senate, the ever-middle-of-the-road, two-term Democrat from West Virginia, Joe Manchin. Just when everyone thought that approval of the Keystone XL pipeline project was a dead subject until after the 2014 mid-term elections, Manchin has helped in large measure to revive it.

On May 4, Manchin suggested that the Senate might have enough votes to pass a bill compelling the Obama administration to approve the Keystone XL pipeline. Noting that 62 senators voted in favor of a Keystone measure last year, Manchin told reporters, “I still think that vote is there. I really do.” Manchin’s discussion of these prospects came just days after two Senate colleagues, Mary Landrieu (Dem. – La.) and John Hoeven (Rep. – S.D.), introduced a bi-partisan bill to build the Canada-to-Texas pipeline. The difference between the measure approved last year, and this one, is that 2013’s version was nonbinding, with no enforcement to it.

The new Senate bill requires approval of Keystone, if passed. Yet, getting a filibuster-proof, 60-vote majority to pass such a bill is a stout task for its sponsors. Nonetheless, Manchin said he “would hope” that a few more Democrats would support it, and even suggested it could be a positive step for the White House.

The new Senate bill comes after the State Department, representing President Obama’s wishes, once again delayed its consideration process on April 18, possibly until after the mid-term elections. This latest delay is what prompted the new bill to be filed by Sens. Landrieu and Hoeven. After it was introduced last week, the two sponsors said they were still short of the 60 votes needed to pass it. Landrieu and Hoeven said the legislation had the support of 11 Democrats and all 45 of the Senate’s Republicans, a total of 56 of the 60 that would be needed.

Some likely targets for additional support included six Democrats who voted in favor of the non-binding proposal 13 months ago, and who expressed general support for the project. “A vote on the bill is expected in the coming days,” said the sponsors, so by the time this issue of World Oil reaches you, we may have had a vote already. Yet, even if sponsors could pick off four more Democrats, President Obama was still likely to veto the bill. Sen. John Cornyn (Rep. – Texas) insisted that a vote on a free-standing bill, which deals only with the pipeline, is insufficient “because it will never see the light of day. The president’s not going to sign it.”

Readers should keep in mind that Landrieu’s sponsorship of the Keystone bill may be prompted by her being in a tough re-election race for her Louisiana seat. On the other hand, Manchin is not up for re-election, but there are weighty things on his mind. He is said to be disenchanted with Washington and dismayed by the inability to get anything substantive done in Congress. Therefore, Manchin hinted in television interviews that he is considering a premature departure from the Senate, in favor of running for governor of West Virginia in 2016, a position he held previously from 2005 through 2010.

As for the Keystone approval decision resting strictly with the State Department, Manchin said that nobody in Washington believes environmental decisions are being made at that level. “This is coming strictly from the White House,” he said. “That’s where it lies. If we had the green light from the White House, this (Keystone) would happen.”

A new twist on anti-fracing activism. The Sisters of St. Francis of Philadelphia (SOSFOP), an order of Franciscan nuns, has been quietly pushing Chevron and other industry firms to give up hydraulic fracturing data that they say “could reveal health concerns for communities in Texas and Pennsylvania.” As reported on the FuelFix blog page of the Houston Chronicle last month, the SOSFOP, on April 22, filed their fourth demand, in as many years, that Chevron issue reports on the quality and amount of fresh and recycled water used for fracing. They also want updates on a goal to stop using open pits to store drilling fluids, and groundwater quality checks after drilling. Per SEC requirements, the order, as part of its retirement investment portfolio, owns more than $2,000 of Chevron stock, so it can submit resolutions at the company’s annual shareholder meetings.

Headed up by Sister Nora Nash, director of SOSFOP’s Corporate Social Responsibility wing, the Franciscan order’s list of recommendations for the company will be up for a shareholder vote at Chevron’s annual meeting in late May, in Midland, Texas. “They say they’re following regulations, but we need to see data that can testify to that,” Sister Nora told FuelFix. “We’re concerned with the lack of real insight into the regulatory framework.”

Chevron’s directors, in their 2014 proxy statement, told shareholders not to vote for the changes, because the company “has in place well-developed risk management systems in its natural gas-from-shale development operations that help ensure water is sourced, used, managed and protected,” and the firm already answers to local, state and federal agencies. “The production of a special report would be duplicative of Chevron’s extensive reporting and would not result in meaningful additional information,” the board said in additional documents. Chevron said that it has cut its freshwater use in half, while reusing virtually all of its flowback water and recycling more than 8 million bbl of water since 2011.

Bakken milestone. Congratulations to all the operators, contractors, service companies and regulators in North Dakota and Montana, as the Bakken shale produced its one-billionth barrel of oil during first-quarter 2014. North Dakota has produced 852 MMbbl of Bakken crude, and Montana has contributed 151 MMbbl. Overall, North Dakota began producing oil in 1951 and has tallied well over 2 billion bbl of all crudes. Montana first oil output was in 1916, and the state has produced 1.8 billion bbl of all grades. wo-box_blue.gif

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Kurt Abraham
World Oil
Kurt Abraham
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