US appeals court says California can set its own Low Carbon Fuel Standard

Ethanol Plant, Milton, Wisconsin.

Late last week, the US Court of Appeals for the 9th Circuit published an opinion (PDF) stating that California’s regulation of fuel sales based on a lifecycle analysis of carbon emissions did not violate federal commerce rules.

Since 2011, California has had a Low Carbon Fuel Standard (LCFS) program, which requires fuel sellers to reduce their fuel’s carbon intensity by certain deadlines. If oil, ethanol, or other fuel sellers can’t meet those deadlines, they can buy credits from companies that have complied with the standard.

California measures “fuel intensity” over the lifecycle of the fuel, so oil extracted from tar sands (which might require a lot of processing) would be penalized more than lighter oil that requires minimal processing. Ethanol made with coal would struggle to meet its carbon intensity goals more than ethanol made from gas.

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Trans Mountain promises to mitigate marine wildlife risk in bid to secure approval: documents

CALGARY – Trans Mountain says it will agree to three new measures to reduce its impact on marine wildlife in its bid to secure a second approval for the controversial pipeline project, according to a new legal filing.

In its final written argument, dated Jan.17, in favour of the project, lawyers for the 590,000-bpd pipeline developer say the Canadian energy industry is in a state of crisis and desperately needs pipelines that connect Alberta with the country’s coast.

Trans Mountain said it its taking measures to minimize its impact on marine wildlife, including the endangered southern resident killer whale.

The Crown corporation has agreed to instruct oil tankers travelling to its Westridge Marine Terminal to follow a new route away from orca-foraging areas, to evaluate the feasibility of using escort tugboats to assist with oil spill response, and to work with oil companies shipping on the pipeline to reduce the number of oil tankers using the terminal.

However, the company also argued a number of measures proposed in the reconsideration were not feasible, and should be discarded. These suggestions included the creation of year-round “no-go” zones, restrictions of ship movements at night and the use of liquefied natural gas as a fuel source for the oil tankers.

The filing also criticized attempts by third parties to expand the scope of the NEB reconsideration.

“Many of the interveners and commenters opposed to the project have sought to use this reconsideration hearing as an opportunity to re-argue aspects of the (NEB’s) report that they disagree with, including by filing ‘updated’ evidence that re-iterates evidence and submissions they made in the oral hearing,” wrote Shawn Denstedt, vice-chair, Western Canada, at law firm Osler, Hoskin and Harcourt, in Trans Mountain’s final written submission.

A view of Kinder Morgan’s Trans Mountain marine terminal filling a oil tanker in Burnaby, B.C.

He said that allowing that new or repeated evidence to sway the board would be unfair to the participants in the original hearings and added that “Trans Mountain submits that very little of the evidence filed by interveners is relevant to the board’s decision in this reconsideration.”

The company is arguing that the need for the pipeline expansion has grown and the project should be approved again.

“The Canadian energy industry is in the midst of a crisis. Now more than ever market diversification is critically needed to ensure Canadians receive full value for their resources,” wrote Denstedt.

The law firm also said there has been no evidence presented during the National Energy Board’s reconsideration of the project that undermines the regulator’s original findings, so “the fact that the project remains in the public interest is incontrovertible.”

Final written arguments from interveners on the project are due Tuesday. The NEB is expected to complete the process and issue its report no later than Feb. 22.

Trans Mountain requires new approvals in order to proceed after the Federal Court of Appeal quashed the project’s permits in 2018, noting that the National Energy Board failed to include analysis of the project’s effect on marine wildlife and because Ottawa did not properly consult with affected First Nations.

The federal government launched a new round of consultations, which are ongoing, and instructed the NEB to reconsider the project’s effect on the marine environment as a result.

Since then, delays in new pipeline projects have gone from being a concern to a crisis in the Canadian energy industry, which faced record-setting price discounts relative to U.S. oil barrels at the end of last year.

The federal government, which purchased Trans Mountain and its under-reconsideration expansion project for $4.5 billion in early 2018, has said it is committed to getting the project built. It also announced additional measures for its Oceans Protection Plan in support of the project.

Meanwhile, environmental group Stand Earth also filed a motion on Monday asking the NEB to give a broader consideration to climate change when weighing its decision on the Trans Mountain expansion.

“Today we are filing a motion with the NEB asking them to simply apply the same standard to Trans Mountain that they applied to Energy East (TransCanada Corp.’s scrapped oil pipeline project) when it comes to the pressing issue of climate change,” said Martin and Associates lawyer Casey Leggett, who is acting on behalf of Stand Earth.

The upstream emissions associated with the Trans Mountain expansion were included in the original NEB assessment of the project, but Stand Earth wants to add an assessment of downstream emissions to the reconsideration.

The deadline for expanding the scope of the NEB’s reconsideration has likely passed, as all interveners are required to file their final written arguments with the energy regulatory by Tuesday.

The project’s reconsideration, as ordered by the Federal Court of Appeal, is also narrowly focused on the environmental impacts of increased tanker traffic off Canada’s West Coast and full consultation with affected First Nations along the route.

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Report: Toyota and Panasonic to create an electric car-battery spinoff company

A Toyota Prius battery

According to Nikkei Asian Review, Toyota Motors and Panasonic have agreed to set up a joint-venture company to manufacture vehicle batteries, with Toyota owning 51 percent of the company and Panasonic owning 49 percent.

Ars Technica contacted both companies to confirm the report, and we’ll update this story if we hear back.

Nikkei reports that Panasonic would transfer ownership of five battery factories in Japan and China to the joint venture. The joint venture would start operations “in the early 2020s,” and it would start producing “batteries with 50 times the capacity of those now used in hybrid vehicles, aiming to bring down production costs through higher volume,” according to Nikkei.

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Elon Musk has been pitching cheap tunnels from The Boring Company to big names

A map of a potential location for a tunnel through Australia's Blue Mountains.

Elon Musk—CEO of Tesla, SpaceX, and The Boring Company—has been pitching his new tunnel-boring capabilities to curious elected officials as well as the director of CERN (the organization that owns and operates the Large Hadron Collider in Switzerland).

Just a month after Musk opened up his first, rather rugged test tunnel under the SpaceX campus in Hawthorne, California, the CEO has been on Twitter floating prices and talking projects.

Last week Jeremy Buckingham, a member of Parliament in New South Wales’ Upper House, asked Musk on Twitter, “How much to build a 50km tunnel through the Blue Mountains and open up the west of our State?” Musk replied, “About $15M/km for a two-way high-speed transit, so probably around $750M plus maybe $50M/station.”

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CN Rail, First Nations company partner to build bitumen pucks plant

TSUU T’INA, Alta. – Plans to turn Alberta bitumen into solid pucks could save the province’s oil producers US$15 per barrel and use up the plastic that now ends up in provincial landfills.

CN Rail and Wapahki Energy Ltd., a company owned by the Heart Lake First Nation in northern Alberta, hope to break ground on a $50 million facility to turn 10,000 barrels of bitumen per day into CanaPux, a solid brick-like creation of CN that is easier to move on railway cars than oil and can be exported from the West Coast using existing coal ports.

Speaking Thursday at the Indigenous Energy Summit on the Tsuu T’ina Nation reserve at the edge of Calgary, representatives from CN Rail and Wapahki said they would each invest $16.7 million into the pilot project that would take two years to build. They are currently in talks to bring on an additional partner for the remaining cost of the project.

“We’re solving market access issues for Canada,” said CN Rail senior manager of product development James Auld of CanaPux, which are squares roughly the size of a yogurt container that smell like freshly poured asphalt.

CN began developing CanaPux three years ago by blending bitumen with a small amount of plastic to make pucks, which can float in water given the lightness of the plastic.

The pucks, Auld said, can be loaded onto railway hopper cars, which normally carry products like grain or coal, rather than tank cars, which carry products such as oil or chlorine. As a result, one railway car could move 650 barrels of oil in puck form, compared with a tanker car that can carry 500 barrels of oil.

Costs would also drop. Current demand for tanker cars has driven the price to lease the units up to $3,500 per month, compared with $350 per month for a hopper car.

Amid delays for new pipelines, shipments of oil by rail jumped 115 per cent from 151,940 barrels per day in December 2017 to 327,229 barrels per day at the end of October 2018, the last month for which National Energy Board data is available.

Turning bitumen into pucks would also eliminate the need for producers to spend money on diluent, a blending agent that is necessary to lighten the viscosity of bitumen to the point where it can flow through a pipeline.

“It improves the netback to the producer by approximately $15 per barrel,” said Alfred Fischer, a senior advisor with Sproule Associates, who is working on the project.

Fischer joked that the Wapahki and CN Rail should hang up a sign in Prince Rupert, B.C. saying, “We buy ocean plastic for $5 per pound.”

The facility would combine low-density polyethylene found in such products as plastic grocery bags with bitumen and use up to 300 tonnes of plastic per day. The plan is to use waste plastic to make the bitumen pucks and, Fischer said, the facility would use up all of the plastic collected in the province.

“We’re diverting from landfills plastics that would otherwise be remaining in landfills,” said Jeff Paquin, president and CEO of Wapahki Energy.

He said the First Nations-owned company plans to built a standalone plastics processing facility in northern Alberta and expects to source plastics from beyond the province.

Paquin said that smaller oil producers in northern Alberta were excited about the technology because they are among the most heavily impacted companies from volatile swings in the price of Western Canada Select driven by a lack of pipeline export capacity.

The lack of pipeline capacity out of Alberta caused sharp swings in the value of Canadian oil blends at the end of 2018, which at times caused the discount for Western Canada Select benchmarks to reach a record of US$50 per barrel.

With the decline in provincial revenues from oil royalties, Alberta Premier Rachel Notley took the unprecedented step of forcing the province’s largest oil producers to curtail production in a bid to lift prices.

Alberta Energy Minister Marg McCuaig-Boyd told reporters on the sidelines of the Indigenous Energy Summit on Wednesday that the curtailment has had its desired effect, but wouldn’t provide an end date for the order.

McCuaig-Boyd said the province was monitoring the situation “month by month” to set curtailment numbers for producers and to monitor when the order might end.

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Tesla sells a new wall charger, Maryland backs away from big EV charging program

Tesla wall charger can be plugged into a standard outlet.

This week, Tesla introduced a new wall charger that can plug directly into a NEMA 14-50 standard American wall outlet. The new wall charger is similar to the company’s second-generation mobile wall connector but with the ability to provide 40 amps (9.6kW) to long-range Model S, X, and 3 vehicles. Mid- and standard-range vehicles still charge at 36 amps, much like the mobile wall connector.

The new wall charger can be used wherever an applicable wall charger exists, without the need for an electrician to come out an install the charger. Both the new wall charger and the electrician-installed wall connector cost $500, but the new charger that is NEMA 14-50-compatible obviously won’t require electrician’s fees if you have an accessible outlet. Still, Tesla recommends its electrician-installed wall connector “for new installations.”

The Tesla Wall Connecter offers the fastest charging speeds, but according to Tesla, this new wall charger is 25 percent faster at charging than the Gen 2 mobile wall connector. As far as charging speed, it seems to sit somewhere between the high-end hardwired charger and the mobile charging kit.

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‘Time to raise your voice’: More First Nations express interest in buying a stake in Trans Mountain

Tsuu T’ina, Alta. — Alberta First Nations are considering a bid to buy a stake in the Trans Mountain pipeline from Ottawa, but the project’s top executive says there is nothing to sell until the expansion project is approved.

Marlene Poitras, the influential Alberta regional chief for the Assembly of First Nations, said that she had informed Finance Minister Bill Morneau of the interest of Alberta’s indigenous communities in buying a stake in the project.

Speaking at the indigenous energy summit on the Tsuu T’ina Nation, a reserve on the edge of Calgary, Poitras said she had also advised the Assembly of First Nations National Chief Perry Bellegarde and the Alberta provincial government that indigenous groups are looking to buy into the pipeline project.

“I believe that in order to create real economies on reserves, real progress must be made on real indicators,” Poitras said, adding that projects needed to boost wages for Aboriginal people, educational opportunities and ownership opportunities.

However, Ian Anderson, Trans Mountain Corp. president and CEO, said Wednesday that “there’s no project to invest in at this point,” as the expansion still needs fresh regulatory approvals from the National Energy Board before it can proceed to construction, which will boost shipments of oil from Alberta to the West Coast. He said getting those approvals is the current focus before making deals to sell stakes in the project.

Still, he confirmed the federal government has heard from indigenous groups interested in buying a stake in the pipeline system and expansion project that Ottawa bought from Houston-based Kinder Morgan Inc. for $4.5 billion in 2018.

“All I can really say at this point in time is the ideas, thoughts, participants have all been heard. I can’t say today what the outcome will be,” Anderson said at the event.

Many of the discussions at Wednesday’s conference, which featured oil and gas executives and aboriginal chiefs, focused on First Nations’ interest in buying a stake in the Trans Mountain pipeline and how groups might finance that equity stake, which extends beyond Alberta.

Earlier this week Chief Mike LeBourdais of the Whispering Pines First Nation, a community north of Kamloops, B.C. told a radio station that a group of First Nations that support the project had met with banks, industry and other potential equity participants.

He said the group was looking to put in a “pre-emptive” bid ahead of this year’s federal election, and could bid as early as April or May, the Vancouver Sun reported Tuesday.

At the conference Wednesday, multiple First Nations involved in resource extraction were encouraged to engage with the federal government to negotiate a stake in the project.

“I think it’s time to raise your voice,” Barrie Robb, the CEO of business development for the Fort McKay First Nation and principal at Fivars Consulting Ltd. told conference attendees, most of whom were Aboriginal.

The executive negotiated for the Fort McKay and Mikisew Cree First Nations when they spent $503 million to purchase a 49 per cent equity stake in oil storage tanks near Fort McMurray, Alta. from Suncor Energy Inc. in 2017, which was the largest-ever deal struck by an aboriginal group in Canada.

Robb told reporters that First Nations should negotiate a deal based on the project being “de-risked” by having regulatory approvals in hand and potentially construction complete, so they could capture the revenues from the completed project.

Within the energy industry, there is a growing recognition that indigenous communities need equity ownership in pipelines and other projects in order to proceed and that companies need to work directly with them, Questerre Energy Corp. president and CEO Michael Binnion said.

“I think we can argue about how much equity, but I don’t think we can argue about whether there’s equity any more,” Binnion said.

He said there was a “complete and different attitude of genuine partnerships with First Nations” throughout the sector now.

While there is a broad range of views on natural resource development among First Nations — within Alberta and around the country — many speeches on Wednesday focused on whether resource projects could allow First Nations groups to reduce their reliance on funding from Ottawa.

“Where development happens, I look at that as economic sovereignty,” said Wallace Fox, a former chief of the Onion Lake First Nation in Saskatchewan and chair of the Indian Resource Council, which organized this week’s conference.

“Bring us a proposal, we’ll work with you to create that economic sovereignty to become independent from government policy,” Fox said.

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EPA at a 30-year low for referring pollution cases for criminal prosecution

EPA administrator Andrew Wheeler

Polluters likely had a good year in 2018. According to numbers from advocacy group Public Employees for Environmental Responsibility (PEER), the number of criminal pollution cases that the Environmental Protection Agency (EPA) referred to the Department of Justice for potential prosecution was lower in 2018 than it had been in 30 years.

That’s probably not because industry in America is becoming more environmentally conscious. PEER suggests the reason for the low number of referrals is that the EPA is only employing between 130 and 140 special agents in the agency’s Criminal Investigation Division, less than the minimum 200 agents specified by the US Pollution Prevention Act of 1990.

The EPA only referred 166 cases to the Justice Department in 2018. According to numbers from the Associated Press, referrals peaked in 1998, with 592 cases referred for prosecution. Throughout the George W. Bush presidency, referrals ranged somewhere between 300 and 450. Referrals dipped during the Obama presidency to a range between 200 and just over 400. Referrals have been on a downward trend since 2012.

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