Trans-Pacific Partnership (TPP) could ease free trade of liquefied natural gas (LNG). Provisions within the recently unveiled TPP could facilitate LNG exports. Currently, would-be LNG exporters to many Asian markets, such as Japan, face a lengthy approval process within the Department of Energy (DOE) because they lack free-trade status. Free-trade status for those Asian markets under the TPP would move applications to export LNG to those markets to a fast-track status in the DOE’s Office of Fossil Energy, essentially removing the DOE’s public interest review of those applications. The TPP must be ratified before these changes become effective.
Activists target drilling on public lands. Environmental activist groups announced a new initiative branded “Keep It in the Ground,” claiming that an end to fossil fuel development is necessary to combat climate change. The campaign will promote recent legislation introduced by Sen. Jeff Merkley, D-Ore., and Sen. Bernie Sanders, D-Vt., to ban oil and gas drilling on public lands. The groups also are targeting new oil and gas lease sales and lease renewals for legal protests, having appealed directly to President Obama to cancel an upcoming U.S. Bureau of Land Management (BLM) lease sale in Colorado. Although the Mineral Leasing Act requires BLM to hold quarterly oil and gas lease sales, the groups claim the Secretary of the Interior has the discretion to cancel those sales.
The Pipeline and Hazardous Materials Safety Administration (PHMSA) rejects challenges to crude-by-rail rule. PHMSA denied five petitions by industry and tribal groups to reconsider portions of regulations imposing new equipment and operational standards for trains hauling crude oil. In a written statement, PHMSA denied petitions to narrow the types of goods subject to the rule, alter requirements to sample and test goods before shipment, expand reporting requirements for tank car retrofits, add tank car thermal protection requirements, and change the braking standards. Some of the petitioners are already participating in related challenges to the rules before the D.C. Circuit, while Congress is preparing for a conference on separate crude oil rail bills that have passed the Senate and the House of Representatives.
Oil prices fall as commercial crude oil inventories build. In its weekly Petroleum Status Report, the U.S. Energy Information Administration (EIA) estimates that 487 million barrels of crude oil were stored in U.S. commercial storage facilities that EIA described as levels not seen at this time of year for many decades. The inventories were higher than expected, sending West Texas Intermediate prices to below US$42 per barrel. The EIA attributed the increasing inventories to several oil refinery units returning to service after seasonal maintenance outages with all U.S. refineries running at nearly 90 percent operating capacity. The International Energy Agency, in its recently released World Energy Outlook, predicted that U.S. crude oil supplies will plateau and then begin to drop if prices do not recover by the end of the decade.