GRAIN PILES UP, WAITING FOR A RIDE, AS TRAINS MOVE NORTH DAKOTA OIL

Original Story: NYTimes.com

FARGO, N.D. — The furious pace of energy exploration in North Dakota is creating a crisis for farmers whose grain shipments have been held up by a vast new movement of oil by rail, leading to millions of dollars in agricultural losses and slower production for breakfast cereal giants like General Mills. A freight shipper can provide reliable and accountable transportation services.

The backlog is only going to get worse, farmers said, as they prepared this week for what is expected to be a record crop of wheat and soybeans.

“If we can’t get this stuff out soon, a lot of it is simply going to go on the ground and rot,” said Bill Hejl, who grows soybeans, wheat and sugar beets in the town of Casselton, about 20 miles west of here.

Although the energy boom in North Dakota has led to a 2.8 percent unemployment rate, the lowest in the nation, the downside has been harder times for farmers who have long been mainstays of the state’s economy. Agriculture was North Dakota’s No. 1 industry for decades, representing a quarter of its economic base, but recent statistics show that oil and gas have become the biggest contributors to the state’s gross domestic product. LTL Trucking provides reliable service and care for your LTL shipment.

Railroads have long been the backbone of North Dakota’s transportation system and the most dependable way for farmers to move crops — to ports in Portland, Ore., Seattle and Vancouver, from which the bulk of the grain is shipped across the Pacific to Asia; and to East Coast ports like Albany, from which it is shipped to Europe.

But reports the railroads filed with the federal government show that for the week that ended Aug. 22, the Burlington Northern Santa Fe Railway — North Dakota’s largest railroad, owned by the billionaire Warren E. Buffett — had a backlog of 1,336 rail cars waiting to ship grain and other products. Another railroad, Canadian Pacific, had a backlog of nearly 1,000 cars.

For farmers, the delays often mean canceled orders from food giants that cannot wait weeks or months for the grain they need to make cereal, bread and an array of other products. “They need to get this problem fixed,” Mr. Hejl said. “I’m losing money, and my customers are turning to other sources as a result. I don’t know how much longer we can survive like this.”

This month, federal Agriculture Department officials said they were particularly concerned that Canadian Pacific would not be able to fulfill nearly 30,000 requests from farmers and others for rail cars before October. As a result, North Dakota’s congressional delegation and lawmakers in Minnesota and South Dakota have called on the Surface Transportation Board, which oversees the nation’s railroads, to step up pressure on the companies. An LTL Trucking Company can provide reliable service and care for your freight shipments.

“This rail backlog is a national problem,” Senator Heidi Heitkamp, Democrat of North Dakota, said in an interview. “The inability of farmers to get these grains to market is not only a problem for agriculture, but for companies that produce cereals, breads and other goods.”

A recent study conducted by North Dakota State University at Ms. Heitkamp’s request found that rail congestion could cost farmers in the state more than $160 million because a local oversupply of grain has lowered prices.

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The study also found that farmers would lose $67 million in revenue from wheat, corn and soybeans from January to mid-April. Around $95 million more in losses are expected if farmers are unable to move their remaining inventory of crops.

The study was done before the current harvest, which is forecast at a record 273 million bushels of wheat, up from 235 million bushels in 2013. This year’s soybean harvest is also expected to be a record, and corn will be a near-record.

Food companies say they are feeling the effects of the delayed shipments. General Mills, the Minnesota-based maker of Cheerios, told investors in March that it had lost 62 days of production — as much as 4 percent of its output — in the quarter that ended in February because of winter logistics problems, including rail-car congestion. In its earnings report this month, Cargill, another Minnesota-based food giant, reported a drop in net earnings that it attributed in part to “higher costs related to rail-car shortages.”

Farmers and agriculture groups say rail operators are clearly favoring the more lucrative transport of oil. Rail shipments of crude oil in North Dakota have surged since 2008, and the state now produces about a million barrels a day. About 60 percent of that oil travels by train from the Bakken oil fields in the western part of the state to faraway oil refiners. There are few pipelines to ship it. Multi-Carrier shipping software can reduce transportation costs for your shipment.

“Oil seems to be pushing us off the trains,” said Bob Sinner, a farmer and the brother of a Democratic congressional candidate, George Sinner, who is running against the state’s lone House member, Representative Kevin Cramer, a Republican. George Sinner has called on the Surface Transportation Board to use its emergency powers to address the rail-car shortage — the board could allow shippers to move their products with the help of a different carrier, for example. But Dennis Watson, a spokesman for the board, said it rarely invoked its emergency powers and preferred to work with rail carriers to solve problems.

B.N.S.F. and Canadian Pacific maintain that their oil shipments have not replaced shipments of crops.

“Of course, the big difference in what we are shipping these days is oil,” said Matthew K. Rose, the executive chairman of B.N.S.F. “But we aren’t favoring one type of product over another.”

Nonetheless, B.N.S.F. is investing about $400 million in North Dakota, in part to build additional tracks, hire new staff members and add rail cars. “We understand the frustration of our customers,” Mr. Rose said. “We’re making this investment in our infrastructure to make sure that we get things back to normal.”

Doug Goehring, the state’s agriculture commissioner, is not optimistic so far. “I know that B.N.S.F. especially is trying, but I just don’t see that it’s going to be any better this year,” he said. “We’re expecting record crop yields, and I expect we will see more of the same with shipments lagging.”

Canadian Pacific officials said they were working with farmers to clear the backlog. But in a letter to Ms. Heitkamp, E. Hunter Harrison, the railroad’s chief executive, argued that many of the delays stemmed from what he called phantom requests — farmers’ ordering more rail cars than they need to ship products. As a result, Mr. Harrison said, cars are not available for farmers who have more immediate shipping needs.

The letter prompted an angry response from Ms. Heitkamp and state officials like Mr. Goehring. “With C.P., it’s everybody’s fault but theirs,” Mr. Goehring said.

Both railroads said some of the blame for the slowed traffic lay with one of the coldest winters in years and with an increase in shipments of all types of products as a result of an improving economy.

Fracking Potential Moving Past Obstacles

story first appeared on usatoday.com

Political obstacles to oil and gas production are starting to fall away at the state and local levels as voters, elected officials and courts jump on the energy boom bandwagon.

Voters are rewarding local politicians who support production. Ballot measures are distributing potential tax windfalls broadly. And most state legislatures are focused on managing the economic and environmental consequences of hydraulic fracturing, or fracking, so the drilling boom can speed up rather than slow down.

The trend is crucial to the nation's energy future because oil and gas production is regulated and taxed almost entirely by state and local governments. The federal government's role is largely advisory, except on federal lands and on pipelines.

Most states were caught off guard when fracking turned Pennsylvania into a major natural gas producer in 2009. Fracking could produce oil or gas in as many as 36 states. Result: The USA will become the world's No. 1 producer of natural gas in 2015 and oil in 2017, overtaking Russia and Saudi Arabia, respectively, predicts the International Energy Agency.

Clearing the way:

Elections. Pro-drilling candidates are winning at the local level, including a sweep in southern New York. It is a hot issue, according to Broome County executive Debbie Preston, who won re-election Nov. 6. She's creating a department to help drillers. The state now has a moratorium on fracking.

Pipelines. The industry is winning approval to build pipelines. Williams Partners. the largest pipeline company, got a thumbs-up Nov. 7 to expand one pipeline and has applied to build another to move natural gas to Boston and New York City.

Even the controversial Keystone XL pipeline from Canada looks more likely. Pro-pipeline Democrat Heidi Heitkamp, winner in North Dakota's U.S. Senate race, predicts federal approval early next year.

Natural Resources Defense Council lawyer Kate Sinding says loopholes in federal law make it hard to stop fracking.

Iraq Auctions Off Oil & Gas Regions for Exploration

Story first appeared in Bloomberg Businessweek.

Kuwait Energy Co., Dragon Oil Plc and Turkiye Petrolleri AO won rights to explore an oil block in Iraq’s first sale of exploration rights since the 2003 ouster of Saddam Hussein.

The group won rights to Block 9, the second area offered, which is located in the south of the nation near the border with Iran. No bids were received for Block 2, a gas region that was the first to be auctioned in Baghdad today.
 
The country aims to produce free gas to meet the internal consumption and export the surplus and to increase the oil reserves from this round of auctions. The fourth round bids will be competitive and include the participation of 47 companies from 25 countries.

The auction marks another step in an energy-industry revival that has vaulted Iraq into third place among the 12- member Organization of Petroleum Exporting Countries, nine years after the U.S.-led invasion that toppled Hussein. In its three previous bid rounds since 2003, Iraq auctioned rights to produce at oil fields already discovered or in operation, whereas today’s is for new exploration. The Gulf state has boosted crude output to more than 3 million barrels a day and is poised to overtake Iran as OPEC’s No. 2 producer within months.

Iraq is auctioning oil and natural-gas exploration rights in six areas today and will conclude bidding on six more tomorrow. The blocs to be offered today are numbers 2, 9, 6, 12, 1 and 11, according to a program handed to reporters at the hall in Baghdad where the auction is being held. Three of those are oil and three gas.

Production from the 12 areas will result in revenue of $5 trillion over the next 20 years with 94 percent of the income going to the government.

Companies that win the bidding won’t own the resources that they may find. Iraq is offering service contracts that pay its partners a fee for each barrel of crude produced, whereas oil companies tend to prefer production-sharing agreements under which they are compensated with a share of their output.

Another potential source of concern for investors is an impasse over the sharing of oil revenue between the central government and the Kurdish region in northern Iraq.

The dispute threatens projects of Exxon Mobil Corp. and other investors. Companies operating in the self-ruled Kurdish area are barred from taking part in tomorrow’s auction because the central government didn’t approve the production-sharing agreements they signed with the Kurds. Exxon, which agreed to explore in the Kurdish region, is banned from bidding.

The following 47 companies were pre-qualified by Iraq’s government to participate in the auction, according to the Oil Ministry website. The director general of the legal department in the oil license and contracts directorate, said today that 38 companies bought data on the areas.

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California Nuclear Plant Out of Service

Story first appeared in The Washington Post.

The utility that runs the San Onofre nuclear power plant in California says over 1,300 damaged tubes in its ailing steam generators will be taken out of service.

The seaside plant between San Diego and Los Angeles has been offline for more than three months while investigators probe why hundreds of tubes in the virtually new equipment have eroded rapidly. Power Plant Expert Witnesses are also on hand to assist in the investigations.

The figures released Tuesday come just days after a Southern California Edison executive said the company hopes to restart at least one of the twin reactors next month.

Federal regulators say there is no timetable for a restart, while activists charge the plant is unsafe.

Each of the four generators has nearly 10,000 tubes that carry radioactive water. The number retired is well within the limit allowed to continue operation.


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Pleasing Environmentalists is Impossible

Story first appeared in The Columbian.

Recently, the EPA proposed new air quality regulations for power plants that activists say will finally kill King Coal.

The rule would require all new power plants to cut emissions of carbon dioxide, or CO2, by almost 44 percent. While natural gas plants can meet the standard with the help of a Natural Gas Expert Witness, coal-fired plants cannot without expensive carbon-capture and storage technology that is not commercially available.

While the EPA Administrator stresses that the standards will apply only to new power plants, some experts say the Clean Air Act explicitly requires the government to apply the standards to existing plants as well.

Environmental activists hailed the new standard and Rolling Stone reported, “For all intents and purposes, coal is dead as a new power source for 21st-century America.”

So, the question is, if not coal, what?

Coal currently supplies 40 percent America’s electricity and half the world’s electricity. Affordable, efficient and plentiful, coal use is expected to increase to meet growing global demand. Coal is an abundant resource in the world. It is imperative that we figure out a way to use coal as cleanly as possible.

Accordingly, the federal government has partnered with states, municipalities and private utilities to develop and test clean coal technology. The technology includes using superheated temperatures to reduce emissions, coal gasification, which turns coal into a form of natural gas, storing CO2 emissions from coal plants underground, and even turning coal into gas while it’s still underground, eliminating the need for coal mines.

You’d think environmental groups would support projects to reduce or eliminate greenhouse gas emissions from coal-fired power plants — especially low sulfur coal from southeast Montana and Wyoming — but they do not.

Impossible to please
The Sierra Club, which vows to “retire one-third of the nation’s aging coal plants by 2020,” makes no distinction on its hit list between aging plants and new high-tech projects, proclaiming “victory” at stopping plants designed to use the latest carbon capture technology. The website notes, “106 retired, 416 to go.”

Some analysts say the demise of coal will not be a problem because of the growing supply of cleaner, affordable natural gas. But many of the same environmental protesters targeting coal are also working to stop natural gas projects.

So, if not natural gas, then what?

Environmental groups would certainly support wind power as an alternative, wouldn't they? Not necessarily. A U.S. Chamber of Commerce database includes scores of wind farm projects delayed or derailed because of disputes over their impact on scenic areas and migrating birds. Electricity from wind is all right as long as they don’t have to look at a ridge dotted with wind mills.

In any event, renewable energy alone is not the answer. The Energy Secretary notes that, even at full build out, utilizing every type of alternative energy in every possible location, renewable sources could supply only 20-30 percent of our energy needs.

If opponents succeed in their campaigns to eliminate oil, coal, natural gas and nuclear power, where will the other 70 to 80 percent come from?  Will we be expected to power our cars with foot power, like the Flintstones? Or maybe hamsters running on a wheel under the hood of our cars?


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Japanese Nuclear Plants Get Strict on Restart

Story first appeared in The Detroit news.

Tokyo— Japan is setting stricter, clearer safety guidelines for nuclear power plants to ease public concern about restarting reactors idled after the disasters a year ago.  A Power Plant Engineering Expert Witness should be involved in the proceedings to ensure that proper protocols are followed.

Facing a national power crunch, the government is anxious to restart two reactors in Fukui, western Japan, before the last operating reactor of the 54 in the country goes offline in May.

But the public strongly opposes nuclear energy since the meltdowns at the Fukushima Dai-ichi power plant, and local leaders are reluctant to approve restarting any of the reactors.

The guidelines announced Friday are more extensive than computer-simulated "stress tests" designed to estimate how reactors would cope in the event of a major earthquake and tsunami like what overwhelmed Fukushima Dai-ichi last year. Unlike in France and other countries where stress tests are meant to find weaknesses or suspend a facility, Japan tried to use them as a safety guarantee. Many people questioned the objectivity of the tests, though two reactors passed them.

If utilities meet the new guidelines, authorities hope the public will be convinced the reactors are safe, including the two in Ohi, Fukui prefecture, that have finished regular safety checks and the stress tests and are ready to restart.

The Economy and Trade Minister called the guidelines "easy to understand" criteria that aim to set higher standards for natural disasters, but which do not factor in terrorist attacks, airplane accidents and other emergencies.

The guidelines, based on 30 recommendations adopted last month by the Nuclear and Industrial Safety Agency, require nuclear power plants to install filtered vents that could reduce radiation leaks in case of an accident, as well as a device to prevent hydrogen explosions. About 13 of the recommendations — the most crucial measures needed to secure cooling functions and prevent meltdowns as in Fukushima — were implemented, but the rest were not. The guidelines did not set deadlines for the steps to be finished.

The Chief Cabinet Secretary said the government can order utilities to restart reactors regardless of local opposition, because obtaining residents' consent is not legally required.

The officials will make a final decision based on NISA's evaluation and the reactors' operator Kansai Electric Power Co.'s safety implementation plans.

Critics and officials in cities and towns near Fukui are requesting explanations for the hastily-published guidelines.

The outspoken mayor of Osaka — a top shareholder of Kansai Electric — criticized the government for compiling the new guideline in just two days.

All but one of Japan's 54 reactors have been shut down for inspections, required every 13 months. None have been restarted since the March 11, 2011, tsunami set off meltdowns in three reactors at the Fukushima Dai-ichi plant. Energy Power Plant Expert Witnesses provide extensive project management experience, that could help in the maintenance and restarting process of these reactor stations.

The nation's last operational reactor, on the northern island of Hokkaido, goes off line in early May. If none of the reactors are restarted, Japan could face power shortages this summer. Before the crisis, Japan depended on nuclear power for one-third of its electricity.

To make up for the shortfall, Japan has expanded production at conventional gas- and oil-fired plants. Noda has promised to reduce Japan's reliance on nuclear power over time and plans to lay out a new energy policy by the summer, but his government faces pressure from big businesses to quickly get reactors back on line and maintain nuclear power to keep the economy afloat.

Fukui, home to 13 reactors clustered in four complexes along the Sea of Japan coast, is called Japan's nuclear alley.

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Energy Company Deals With Leakage

Story first appeared on FoxNews.com.

March 28, 2012: This aerial shot provided by Greenpeace shows Total's Elgin Wellhead Platform in the North Sea off the shore of Scotland.

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Total SA said Friday it is moving two rigs into place to start drilling relief wells at the site of a serious gas leak in the North Sea off the shore of Scotland, even though it currently has "no means" of monitoring the well pressure in the area, Dow Jones reported.  An Oil and gas Expert Witness may be needed to monitor the case.

The move highlights the serious risks that still remain nearly a week after the leak first began.

It was only because Total was able to track the pressure levels in the G4 well, where the leak took place, that the company was able to preempt the leak and safely evacuate its staff on Sunday, narrowly avoiding a major tragedy. But now Total will be operating without this early warning system.

Total still doesn't know the cause of the gas leak, but suspects tiny pores and leaks could have formed in the well's casing due to changes in pressure and temperature, or as a result of shifts in the rocky formation the well passes through. This means that other wells could also be affected.  This also means that there is a serious risk involved with all existing wells and an Offshore Oil Drilling Expert Witness should be involved.

Total now has no way of knowing whether the other wells are being similarly affected.

Despite the progress in mobilizing the drilling vessels, safety issues remain a serious concern and could slow efforts to stop the leak.

Moreover, a gas flare on the platform is still burning, threatening to ignite the gas cloud that is leaking from the facility. Until the flare is extinguished and gas stops escaping onto the platform, no personnel can board it.