Weekly email blast offers a powerful educational tool for dealers and consumers
The American Energy Coalition (AEC) has for over five years published email blasts, known as “e-Alerts”, highlighting stories of interest to the Oilheat industry. Topics cover a wide range of subjects from natural gas pipeline safety, to increasing U.S. oil production, to environmental and pricing issues related to heating oil and natural gas. This is the second in a series of quarterly “Best of” recaps highlighting some of the biggest stories of the past season.
During the April–June 2017 quarter, 10 e-Alerts were published. The first two of the quarter addressed production and pricing for crude oil and natural gas. These two articles followed the last e-Alert in March, which also dealt with crude oil production. That March 24th post recounted a United Press International (UPI) article noting that global crude oil production had increased 260,000 barrels a day in February to 96.52 million barrels per day (mb/d), with U.S. production the highest in a year at 9.1 mb/d, roughly the same as Saudi Arabia for the month.
The new April 6th post drew attention to a Bloomberg story saying that the U.S. had exported a record 746,000 barrels per day (b/d) in January, with that number increasing to 1.21 mb/d in February, reducing imported oil and taking the U.S. one step closer to energy independence. This is good news for the American consumer who is reaping the benefits via lower heating oil, propane and gasoline prices.
To add even more good news, this time for retailers, a May 18th e-Alert reported on an OilPrice.com story that said natural gas production from conventional wells has been in terminal decline since 2008, falling by 3 billion cubic feet per day (bcf/d) each year, and now accounts for only one-third of all gas production in the U.S. The article went on to note that shale gas production also fell from about 7 bcf/d in the first quarter of 2015 to about 2 bcf/d in the first quarter of 2017. If natural gas production does not increase, OilPrice.com predicts, gas in storage will begin to be drawn down and gas prices will increase before year-end.
Three e-Alerts during Q2 dealt with natural gas pipeline issues. The first, on April 19th, reported on the decision by the New York State Department of Environmental Conservation to deny a Water Quality Certificate to the National Fuel Gas Company, which it needed to proceed with the construction of its proposed Northern Access Pipeline. That pipeline was intended to bring natural gas from the Marcellus Shale fields in Pennsylvania into upstate New York and eventually into Canada, but now won’t be built. A second post on April 27th discussed an initiative by concerned parents in Pennsylvania, who were worried about the proximity of the new Mariner East 2 pipeline to schools along its path. As many as 40 schools are within the “blast zone” of the pipeline, according to philly.com, which also reported that over the last 20 years, there have been 11,462 pipeline incidents nationally, with 324 deaths, 1,331 injuries, and
$7 billion in property damage. These statistics were taken from the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration data. A third e-Alert, on June 1st, discussed the difficulties in securing the necessary approvals for the Atlantic Coast Pipeline project. Despite the difficulties in obtaining approvals from FERC (the Federal Energy Regulatory Commission), the post goes on to detail two separate legislative proposals, by Senator Elizabeth Warren and Senator Jeanne Shaheen, to add provisions allowing opponents of pipeline projects a louder voice before FERC.
Four e-Alerts over the period spoke to environmental issues. An April 12th post reported on a mercaptan leak in Alabama. There, a Sempra Energy facility has been leaking mercaptan since 2008, sickening low-income residents in the state’s Eight Mile area. Sempra is the same company that owned the Aliso Canyon gas storage facility that began leaking in October of 2015, forcing the evacuation of the affluent Porter Ranch community in Southern California. A June 22nd post details a massive methane cloud that has formed over Devil’s Spring Ranch and the surrounding Blanco, New Mexico area. The methane cloud is said to be 10 times larger than the city of Chicago and coming from 25,000 gas wells and 10,000 miles of pipelines across the San Juan Basin. A third environmental story, from June 17th, talks about another local government reversing a previous decision to favor natural gas. In this post, New Hampshire Public Radio reports that the Lebanon City Council voted to remove references to natural gas as a favored energy source from the city’s master plan. The fourth of the environmental posts, and perhaps the most significant story of the quarter, details legislation passed in New York to mandate B5 in Nassau, Suffolk and Westchester counties. This giant step forward for Bioheat®, if implemented on July 1, 2018, will mean that 70% of New York State’s Oilheat market will be burning ULSHO with a 5% blend of biodiesel (as New York City will make the switch to B5 in October of 2017). Oil & Energy reported on this story in June; a follow-up article appears on page 21 of the current edition.
A final e-Alert, from May 3rd, discusses the dilemma gas utilities face in expanding their service mains. New gas mains cost between $500,000 and $1 million per mile to build. However, in Pennsylvania, as in other states, utilities must apply an economic test to justify the construction of new gas mains. Generally, the economic test requires new mains to be paid for by new customers connecting to those mains. The Pennsylvania Public Utility Commission, at the request of utilities, is considering changing existing rules to allow utilities to assess existing ratepayers, not just new customers, to pay for new mains. A related e-Alert issued on March 3rd reported on an Altoona Mirror story about questionable business practices by Peoples Gas relative to natural gas expansion efforts in central Pennsylvania, and creative efforts by that utility to pay for new gas mains. The AEC has been working with the Pennsylvania Petroleum Association (PPA) and local retailers on a number of Every Door Direct Mail® postcard campaigns in the area to warn homeowners of this threat. Homeowners who have converted and connected to new gas mains extended by Peoples Gas were surprised to see how expensive the new gas service is. They claim that Peoples did not disclose the new delivery charge tariff they planned to impose to recover the cost of installing the new mains. One angry homeowner quoted by the Mirror said that his first month’s gas bill was $350; and the Mirror detailed a Peoples Gas “delivery charge” of $7.14 per 1,000 cubic feet, more than twice that in the surrounding area serviced by Peoples Gas’ existing infrastructure.
If you missed any of these stories, there is good news; all e-Alerts are archived on the AEC Website and can be easily accessed, read there, shared via social media, downloaded and/or printed. Those who want to receive new e-Alerts when they are published can sign up at americanenergycoalition.com, using the “Sign Up for e-Alerts” button on the homepage, to have new e-Alerts delivered to their email inbox each week. Finally, look for the next edition of this quarterly column to appear in the November/December issue of Oil & Energy.