Canada's Energy East Pipeline Project

A subsidiary of Canadian energy company TransCanada has proposed a crude oil pipeline running 4,600 kilometers from Alberta and Saskatchewan to Saint John, New Brunswick.  The proposed Energy East Pipeline Project would enable Western Canadian crude oil to be shipped east across six Canadian provinces, expanding economic opportunities for refining and export -- but like other major pipeline projects, the Energy East project faces regulatory hurdles.

On March 4, 2014, Energy East Pipeline Ltd., a wholly owned subsidiary of TransCanada Oil Pipelines (Canada) Ltd., proposed the project which entails the conversion of about 3,000 kilometers of existing natural gas pipeline to an oil transportation pipeline, new pipelines in Alberta, Saskatchewan, Manitoba, Ontario, Québec and New Brunswick, and marine facilities that enable access to other markets by ship.  If built, the $12 billion project could carry up to 1.1 million barrels of crude oil per day.

The major motivation behind the line is the relative surplus of Western Canadian crude oil, including fuel produced from the Alberta oil sands.  While Alberta and Saskatchewan produce substantial oil, relatively little capacity to ship that crude to refineries means relatively low prices for producers.  Meanwhile, refineries in Quebec and Atlantic Canada currently receive 86% of their crude oil from foreign sources.  TransCanada pitches the Energy East project as giving these Eastern Canadian refiners access to "reliable, low-cost Western Canadian crude."  The developer also points to positive economic development impacts, including about 10,000 jobs and an estimated $35 billion added to Canada’s gross domestic product over 40 years, as well as the relative safety of shipping oil by pipeline as opposed to by rail or truck.  Notably, the project also allows TransCanada to make better use of its existing natural gas pipeline system, which has excess unused capacity.

Like the Keystone XL pipeline in the U.S., the Energy East project faces opposition from both local siting concerns and global worries about the environmental impacts of "tar sands" crude production.  Some have also expressed concerns that the project would disrupt natural gas flows to Canadian consumers, although TransCanada has said that it has plans to build more lines to meet any increased demand.

Under Canadian law, interprovincial pipelines are federally regulated by Canada's National Energy Board (NEB).  According to its website, TransCanada expects final regulatory approval in the fourth quarter of 2015, with the project commissioned and placed in service in 2018.  How the regulatory process plays out will affect when -- and whether -- the Energy East pipeline project moves forward.

US oil boom leads to pipelines, rail expansion

U.S. oil production is increasing as a result of new production techniques which allow crude oil to be recovered from oilshales.  U.S. oil production is projected to increase about 24 percent to 7.9 million barrels a day by 2014,the highest production level since 1988. Domestic crude can be delivered to refineries at prices up to 20% lessexpensive than those for imported crude. The abundant and lower-cost domestic supply drives demand forcost-effective ways to transport crude oil across the country, includingpipelines and rail service.

In general, pipelines are the cheapest way to move largequantities of crude oil from well fields to refineries.  Many existing pipelines are either fullyutilized or no longer match up with demand for transportation.  As a result, a massive amount of pipelinecapacity is under development, with 20 major projects starting in each of thenext two years.  One observer has called2013's addition of 4 million barrels a day of capacity into Houston "the biggest single oil pipeline infrastructure addition ever seen in the world."

 

At the same time, shipments of oil by rail are alsogrowing.  Like pipelines, railroads allowproducers to ship oil to coastal markets where it is generally morevaluable.  Railroads have severaladvantages over pipelines, including flexibility and the ability to connectpoints that currently lack pipeline access. In the past three months, oil producers have announced plans to invest $1 billion in rail depots and other infrastructure needed to ship crude by rail. Bloomberg reports that the American Association of Railroads projects that more than 200,000 train cars of oil will be shipped in2012, the most since World War II.

 

Both rail and pipelines have roles to play in thetransportation of crude oil in the coming years.  In many cases, rail service is available now,while expanded cost-effective pipeline transport is still under development.Each mode competes for oil transport business against the other, but the challenges of siting and building new linearinfrastructure like railroads and pipelines points to heavy reliance onexisting assets until new pipelines or rail routes can be built.  The result may be a several-year boom in railtraffic until major new routes are rationalized as pipeline paths.  If production and refinery operationsstabilize, the need for rail's flexibility may be outstripped by the value oflower-cost pipeline transport.

August 10, 2010 - Martha's Vineyard wind; Ocean Energy Institute

A sign seen on the shore of Martha's Vineyard at Aquinnah.  Like Martha's Vineyard and Vinalhaven, many island communities are considering whether wind turbines -- either onshore or offshore -- are a wise move.

In ocean energy news, Matthew Simmons, the founder of the Rockland, Maine-based Ocean Energy Institute has died.  Simmons was the founder Simmons & Co. International, an investment banking firm focusing on energy.  Convinced of the value of ocean energy, in 2007, he founded the Ocean Energy Institute as "a think-tank and venture capital fund addressing the challenges of U.S. offshore renewable energy".  Echoing a trope we have heard often lately, Simmons once gave a slideshow in which he is reported to have said, "The Gulf of Maine will soon become a Silicon Valley and begin proving ocean energy can be captured, processed and turned into a replacement for modern energy and water."

The city of South Portland, Maine is considering forming a nonprofit energy supply company to save citizens money on their electricity supply.  The business, putatively called South Portland Energy, would buy power at wholesale in the NEPOOL market and sell it to the city -- and perhaps also to residential and commercial ratepayers.  This kind of nonprofit competitive electricity supplier can cut ratepayers' supply costs, without requiring the formation of a municipal electric transmission and distribution utility.

Railroad tracks form an important kind of infrastructure; walking and hiking paths form another.  The balance between replacing rail tracks with hiking trails is an interesting policy question.  This Portland Press Herald editorial suggests that foot paths should not replace rail; the two can coexist, but a path should not preclude the use of the right of way for passenger and freight service.

Cogentrix has signed a 20 year contract with Xcel Energy subsidiary Public Service Company of Colorado for the output of its 30 MW concentrating photovoltaic solar energy plant.  The project, located in southern Colorado, relies on a concentrating photovoltaic technology using lenses to focus incoming sunlight onto solar photovoltaic cells.  This results in a higher energy density (in kW per acre) than other solar technologies.

July 7, 2010 - it's hot

Quick update today. It is hot in New England, and I have a few news stories that are thematically linked to the heat.

First, NOAA reports that warmer nearshore waters are drawing sharks closer to land in New England -- including the great white shark.

Second, speaking of hot: what if the world got hot enough to melt the polar ice caps? Check out this interesting Salon.com interview with Peter D. Ward, author of [i]The Flooded Earth: Our Future in a World Without Ice Caps[/i].

Following on yesterday's note of Earth First protests in Maine: three protesters of TransCanada's Kibby Mountain wind project expansion were arrested yesterday, one of whom attached herself to a truck hauling a windmill blade.

In rail news: Maine won $35 million in federal stimulus money for rehabilitation and expansion of Amtrak's Downeaster passenger train service to Brunswick, meaning there will soon be passenger rail from Brunswick to all points south and west.

4/8/10

These are wild times for those of us involved with the Maine legislature, as they worked well past midnight last night... and didn't quite finish up their session. Everyone returns Monday for the final push. The House passed the $85 million bond package, but the Senate came up several votes short. Sadly, despite advocacy from Efficiency Maine Trust executive director Michael Stoddard and industrial energy consumers, the bonding for energy efficiency spending was stripped out of the package. Moving forward, one of the big issues with the bond package is that if it doesn't pass, dozens of businesses in Aroostook County, the largest county east of the Mississippi, will soon be without rail access, when the Montreal, Maine & Atlantic Railway will abandon 230 miles of track, unless the state can raise the funds to buy it. (The head of the Federal Railroad Administration Joe Szabo is coming to Maine to investigate the issue.) The vote may be based on principles, but it is also largely a partisan issue.

Also in Maine news: a good editorial by my friend Gordon Weil, arguing that Maine's Public Advocate -- the executive office tasked with looking out for the interests of utility ratepayers before the PUC and legislature -- should have more independence from the Governor. Gordon gives a first-hand account of how, in 1981, Governor Brennan created the office, and named Gordon as the first Public Advocate. Gordon also describes how in recent years, the public advocate has served more as an advocate for longer-term policies pushed by the Governor, as opposed to looking out for keeping rates low; indeed, in several contexts recently, organized industrial energy consumers have served as the sole advocates for low rates, in the face of proposals that would significantly increase all ratepayers' expenses.

Did Connecticut set its renewable portfolio standard too high? The energy committee has approved legislation that would halve Connecticut's goal of obtaining 20 percent of its electricity from renewable sources by 2020. Connecticut is nowhere near on track to meet this goal; renewable developers point to a lack of financing as the problem. What can policymakers do to address the capital and credit crunches?

On the federal level, as we move closer to legislation that will promote significantly larger deployment of grid-scale renewables, there is concern about the lack of transmission development -- and federal transmission oversight -- that may be needed to connect generation to load.

4/2/10

Stretching slightly beyond energy policy: the Town of Scarborough has finally acquired the parking lot at Higgins Beach. What do you get when you take the Portland area's most consistent surf beach, then ban on-street parking, then charge two arms and a leg for parking in the one private lot in the village? Angry surfers. Higgins was always my favorite break when we lived in Portland, but the parking scene -- especially in summer -- was always a nightmare. If the dirt parking lot was ever built on, it would have eliminated the one place beachgoers could have parked for miles around. The owner of the 1.5 acre lot, plus a 10 acre (presumably unbuildable) strip near the marsh, wanted nearly $1.5 million. Fortunately, a deal has been cut, using $632,145 from the Land for Maine's Future program, a matching amount from the town's bond and $7,270 from fundraising by The Trust for Public Land and the Surfrider Foundation. Thank you.

The Tesoro oil refinery in Anacortes, Washington suffered an explosion and a fire, killing 4 people and leaving 3 more missing.

More on the landslide in Winslow, Maine after the removal of the Fort Halifax dam: Maine Department of Environmental Protection has ordered (former) dam licensee NextEra to study and report on what went wrong. (A bit of pedigree is useful here, since it can be confusing: NextEra Energy Resources is the entity in question, formerly known as Florida Power & Light Energy, or sometimes known as FPLE Maine Hydro LLC.) The landslide threatens the Fort Hill Cemetery, with graves as old as the mid-1700s.

Rail issues: a Pan Am train derailed in downtown Norridgewock Wednesday.

There's a fair amount of hype going around about the weaknesses of the federal EnergyStar appliance rating program.

In Colorado, dominant utility Xcel Energy is replacing 900 MW of coal plants -- 30% of the entire Colorado coal-fueled generation -- with natural gas plants, all because the legislature enacted the Colorado Clean Air – Clean Jobs Act, which caps emissions at 1,100 pounds of carbon dioxide per megawatt-hour. Now it's a race for regulatory approval: by December, utility proposals must be approved by the Colorado Public Utilities Commission, and must be operational by 2017.

Did you know that until this week, there had only been one known tropical cyclone in the South Atlantic Ocean? Now there have been two. Today, the Geostationary Operational Environmental Satellite, GOES-12 identified Tropical Storm 90Q off the coast of Argentina.

In Los Angeles, a good editorial from the LA Times bashing the Department of Water and Power board for endorsing Mayor Villaraigosa's proposed rate hike to fund electric efficiency -- which as reported yesterday, didn't pass.

2/22/10

As expected, the federal Surface Transportation Board has received the Montreal, Maine & Atlantic Railway's notice of intent to abandon 233 miles of track in Maine, from Madawaska to Millinocket. Even though this line serves about 20 industrial freight customers, the Railway says it has been losing $4 million to $5 million a year through operating the lines because freight revenue has fallen. The typical freight shipped on the line includes lumber, plywood, logs and wood chips have fallen, all of which are in low demand given the slump in the housing market. If the rail is abandoned, it could cost 750 jobs as increased transportation costs would lead the region's manufacturers to scale back production.

Iran is choosing sites for uranium enrichment plants, claiming it wants civil nuclear power, not weapons.

Distributed generation gets a policy boost, with a finding that widely-adopted rooftop solar might be easier to develop than utility-scale solar arrays, due to the challenges of siting larger projects.

Much buzz today over Bloom boxes, distributed fuel cell arrays about to be announced. Bloom Energy, which raised $400 million in venture capital, holds a press conference on Wednesday at which it is expected to unveil its products. Interestingly, Google already has a 400 kW array in beta-testing operation.

Speaking of Google, FERC granted Google's market-based rate authorization. As someone who works with FERC's market-based rate structure, having filed a number of petitions myself, it is interesting to me to see how the media reports this: as enabling Google to purchase low-cost power. Surely we all want to purchase low-cost power -- what would it take to enable us all to purchase power at market-based rates? Most people would qualify -- no market power, etc.

Some question whether Energy Star really means much for appliance efficiency.

The administration's pro-nuclear news of last week continues to resonate, as Texas evaluates whether proposed new reactors there will receive similar government support.

Six Maine school and university oil-to-wood heating projects will receive more than $3.2 million in federal Recovery Act funds managed by the Maine Forest Service. The Presque Isle office of the University of Maine Cooperative Extension was awarded $16,575 for installation of a pellet boiler to replace the current oil boiler, displacing 1,850 gallons of fuel oil. (The existing boiler is around 10 years old -- are we incenting inefficient replacement of newer equipment while older, less efficient facilities remain?) Overall this project costs an estimated $40,169, with the remainder of the project funded by the Maine Economic Improvement Fund. Regional School Unit 29 in Houlton was awarded $750,000 for conversion of an oil boiler to a wood chip boiler at Houlton High School, displacing 65,000 gallons of the 85,000 gallons of fuel oil used annually by the district. The district uses about 85,000 gallons of oil a year, according to the superintendent. Here, the district will keep its oil boiler, but will rely on the new boiler for heating. Other winners are Oxford Hills High School, the Greenville School Department, Phillips Middle School and Poland Middle-High School. Maine Forest Service Director Alec Giffen said the six projects collectively “will annually avoid the burning of almost 263,000 gallons of oil, recirculate $600,000 in fuel dollars in the Maine economy, and avoid more than 5 million pounds of emissions from fossil fuels.”

More Maine stimulus: EECBG grants to central Maine communities.

2/19/10

Since transportation is such a large part of our energy consumption, transportation policy has implications on energy policy. Rail service can provide low-cost, low-carbon transportation for a variety of raw materials and products. That's why the Maine legislature is considering a proposal for $20 million in bonds to enable the state to purchase 240 miles of the Millinocket to Madawaska line. Word on the street is that its owner Montreal, Maine and Atlantic Railroad will begin the legal process to abandon the tracks as early as this week. If abandoned, this would eliminate rail service to about 20 companies, including some of northern Maine's largest employers.

More offshore tidal power! Portland, Maine-based Ocean Renewable Power is deploying its 60 kW underwater Turbine Generator Unit (TGU). (Note that 60 kW will make this the largest ocean energy device deployed in U.S. waters. You can see we have a long way to go.) This unit will be deployed on March 2 about 25 feet below the surface at a site off Shackford Head near Eastport (acme map). Tidal power captured by the underwater turbines will be stored in batteries on the barge, which are then shuttled back and forth by boat to the Coast guard -- what they're calling a "virtual transmission line". How efficient can that be?

Although the project has the capacity to power 20 homes, Ocean Renewable does not have its pilot-project license from the Federal Energy Regulatory Commission and thus cannot interconnect.

How about jobs? While spending about $5 million in the past year, Ocean Renewable has grown from 4 to 17 Maine-based employees, and has created or retained another 80 jobs total at companies around the state, including Stillwater Metalworks.

An article about citizen opposition to wind farms is interesting for a variety of reasons -- both its good summary of recent actions that can be seen as limiting wind generation, and the fact that it does not appear to be spurred by any particular event.

On the local level: Central Maine Power and Rockland are in a fight over tree trimming. Reminds me of the situation in Warren when MDOT widened Route 1.

Nationally: agreement has been reached on the removal of four dams on the Klamath, three in Oregon and one in California. Shades of Edwards Dam and the Fort Halifax Dam in Maine.