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Oil and Gas Roundup — Dec. 5

December 05, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Shale boom keeps railroads busy as crude oil shipments rise

The boom in oil and natural gas drilling from shale means the nation's railroads are handling more unit trains of crude oil and shipments of sand used in hydraulic fracturing, a vice president for BNSF Railway Co. said Tuesday.

Dean Wise, vice president of network strategy for the Fort Worth, Texas-based railroad, said his company also launched a pilot project to study locomotives powered by liquefied natural gas. It's still early, but the effort could put a dent in BNSF's $4 billion annual bill for diesel fuel.

Railroads are now competing directly with pipelines for crude oil shipments. Part of that is a result of the rapid growth of the Bakken tight oil formation in North Dakota. Wise said a typical unit train has 100 to 120 cars of crude, which he called “rolling pipeline.”

“Four years ago, the railroads handled virtually no crude by rail,” Wise said. “This year, BNSF alone will be handling 600,000 barrels of crude a day by rail, which is a huge change for us. The pipeline capacity can't grow fast enough given the new shale plays, so we're in there as a good option and faster to market for the producers.”

Sand used in the mix for hydraulic fracturing also is being shipped by railroads, Wise said.

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Fracking supporters fire back at ‘woefully misinformed’ celebrities

If Hollywood celebrities don’t like hydraulic fracturing, then maybe they should stop flying in jets, heating their swimming pools and undergoing plastic surgery, according to a video released Tuesday.

“Celebrities: You Don’t Know What You’re Fracking Talking About” is the Western Energy Alliance’s response to “What the Frack,” a star-studded video produced by the Environmental Media Association and released three weeks ago by Americans Against Fracking.

The Hollywood video showcases an array of entertainers, including Lance Bass, Darren Criss, Daryl Hannah, Hayden Panettiere, Amy Smart, Marisa Tomei, and Wilmer Valderrama, lobbying against hydraulic fracturing and repeating the catch phrase, “What the frack?”

The pro-fracking video released Tuesday features no celebrities, just folks who appear to work in the oil-and-gas industry touting fracking’s safety record and importance in providing low-cost energy.

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TransCanada to start Keystone South deliveries to Texas Jan. 3

TransCanada Corp. (TRP) expects to begin delivering oil Jan. 3 to Texas on the southern portion of its Keystone pipeline, allowing more crude to leave a key delivery hub in Oklahoma.

TransCanada’s Gulf Coast pipeline can carry 700,000 barrels of crude a day to Port Arthur, Texas, from Cushing, Oklahoma. The Calgary-based company disclosed its plan to start service on Jan. 3 in a filing yesterday with the U.S. Federal Energy Regulatory Commission. That adds to the capacity of the Seaway pipeline owned by Enterprise Products Partners LP (EPD) and Enbridge Inc. (ENB), which now carries 400,000 barrels a day to Houston from Cushing. The operators have said they expect Seaway’s capacity to reach 850,000 in the first half of 2014.

“It’s bullish for WTI because we’re going to be pulling more barrels out of Cushing,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “Once they start taking out, say 500,000 barrels a day, along with Seaway expanding, it’s going to pull crude out of Cushing a bit faster than it’s going in.”

West Texas Intermediate for January delivery on the New York Mercantile Exchange gained as much as 2.4 percent to a one-month high of $96.04 a barrel. Futures contracts are traded against crude delivered in Cushing.

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Va. congressman wants to slash EPA staff

WASHINGTON, D.C. - Southwest Virginia Congressman Morgan Griffith thinks it is time to cut the number of staff at the Environmental Protection Agency.

This week, Griffith, a Republican who represents Virginia's 9th District, introduced H.R. 3641, legislation called the "Environmental Protection Agency Maximum Achievable Contraction of Technocrats" or MACT Act. 

According to Griffith, nine out of ten EPA employees were considered "non-essential" and were furloughed during the partial government shutdown. The MACT Act would require the EPA Administrator to reduce the EPA's workforce by 15 percent within three years. 

"Many in my area and in coal communities across the nation may wish for the complete elimination of the EPA, but the EPA MACT Act is a more balanced approach," Griffith said in a news release. "It recognizes that the EPA has put forward some reasonable regulations in the past, and that the agency ought to have the resources in order to be able to continue enforcing those reasonable regulations."

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