The defining images of the US environmental movement this year have been pictures of members of the Standing Rock Sioux tribe protesting against the construction of the Dakota Access oil pipeline. The project is intended to carry about 470,000 barrels per day of crude 1,172 miles from the shale oilfields of North Dakota, past the tribe’s reservation, to an oil transport hub in Patoka, Illinois. The campaign against it is the latest manifestation of environmental activists’ increasingly effective opposition to new pipelines. For North American pipeline operators such as Energy Transfer Partners, which is building Dakota Access, that opposition is becoming a significant obstacle to growth. The biggest threat to the pipeline industry, however, has attracted fewer headlines: flagging demand for new infrastructure. The US has almost as much oil pipeline capacity as it needs for the time being, and in some areas already has too much. The pipeline businesses have pitched their offer to investors as cash distributions that are both high and growing. As the rate of growth in the industry slackens, operators will find it ever harder to generate organic increases in earnings. The pipeline or “midstream” sector has been the most active segment of the North American oil and gas industry for large mergers and acquisitions over the past couple of years. Such deals, offering opportunities to cut costs, are likely to become increasingly important as ways to boost profits. Timm Schneider, analyst at Evercore ISI, argues that the North American pipeline industry is on the verge of a wave of consolidation like the one that swept through the large integrated oil companies in the late 1990s and early 2000s. The US has about 140 Master Limited Partnerships: a tax-advantaged structure available to energy infrastructure businesses that is typically used by midstream operators. Mr Schneider argues that only about half of those have a “right” to exist. Many will have to sell themselves, dispose of assets to stay alive, or “simply disappear”, he says. The Dakota Access project has been blocked for an indefinite period by orders issued last month by the Obama administration, preventing work on a section of the route. The Standing Rock tribe lost a legal action to block the pipeline but succeeded in raising the profile of their campaign to the point that the administration withdrew construction permits. John Stoody of the Association of Oil Pipe Lines, the industry group, argues that the administration’s action shows how even projects that “play by all the rules” in meeting environmental standards can still face obstruction. “The administration is breaching processes established by legislation and regulation,” he says. Regardless of the Obama administration’s stance, however, the number of new oil pipeline projects is shrinking. As the slump in crude prices since 2014 has sent US oil production into decline, the need for new capacity has dwindled. While some more pipeline capacity may be built for oil from the Permian basin of west Texas, which has been the most robust US oil region in the downturn, in general the industry’s growth is slowing sharply. In 2014, there were 9,679 miles of crude oil pipeline completed in the US, according to IHS Markit, the research group. In 2017, it expects 4,175 miles of large projects to be completed, assuming Dakota Access goes ahead. Several proposed projects have been cancelled because of lack of demand. Calgary-based Enbridge, for example, had planned a rival to Dakota Access for carrying crude, called Sandpiper, but confirmed last month that it had given up on the $2bn project. For gas, the outlook is brighter. US gas output is expected to continue rising, as it finds new markets including replacing coal for power generation, petrochemicals production and exports of liquefied natural gas. Those differing prospects are a key reason why Enbridge, which owns both gas and oil pipelines, last month agreed a $28bn deal to buy gas-focused Spectra Energy. However, the lowest-cost region of the US for gas production, the Marcellus and Utica shales centred on Pennsylvania and Ohio, is also facing sustained opposition from environmentalists to new pipelines. MLP units, the equity-like instruments that the partnerships offer to investors, have rebounded 52 per cent from a low point in February, according to the Alerian index, as the price of oil has recovered somewhat. But Trisha Curtis, co-founder of PetroNerds, an advisory firm, queries whether that rally can be sustained. “How many of those MLPs really have growth rates that are going to be sustainable?” she says. “There are only a few of them that are going to see continued growth.” Many MLPs, and some of the pipeline companies that are structured as regular corporations, have business models that depend on perpetual growth justifying continuing cash inflows. Energy Transfer Partners, for example, in the first half of this year distributed $1.8bn to investors and spent $3.5bn on capital investment, but generated cash from operations of just $1.4bn. The numbers were made to add up by selling the Sunoco retail business to its affiliate Sunoco LP for $2.2bn, and by issuing units worth $1.1bn. Without growth, it will be harder for pipeline opera tors to finance themselves. Those with a higher cost of capital will find it harder to compete for the smaller number of new projects that will be available. “They are like cattle feeding at a trough,” says Mr Schneider. “The weaker ones are going to get shoved aside.” The result is set to be consolidation. Volatility in the oil price has until now been a deterrent to deals, prompting Energy Transfer Equity to pull out of its agreed takeover of Williams in June. But it is likely that in the next few years there will be deals that are successfully concluded. Mr Stoody argues that in the longer term, new pipelines will always be needed, because they are the safest and most efficient way to transport liquids. The shape of the industry that delivers those projects, however, may be very different. Canadian oil sands have been a focus for environmental

The Labour Party has voiced its support for the continued use of gas grids in the future through the use of secure and sustainable green gas. It said that “ripping up all our gas mains and throwing everyone’s boilers out” is not a sensible approach to decarbonising heat in the UK. The party’s Parliamentary Labour Party Energy and Climate Change Committee has set out the policy changes a future government would need to adopt to allow gas to be decarbonised in a way that would use the gas networks in its Green Gas Book. The book, which was launched in the House of Commons yesterday, is sponsored by the Energy Networks Association (ENA) and promotes the use of low carbon gases such as biomethane and hydrogen. The book includes contributions from former shadow energy secretaries Lisa Nandy and Caroline Flint, and former shadow energy minister Alan Whitehead on the role green gas can play in heat, power and transport. Whitehead said on the book: “I think they’ve facilitated a potentially really important contribution to policy discussion that gets to grips with the issues both politicians and the industry need to be thinking about.” ENA director of policy Tony Glover, who has also contributed to the book, said the publication adds to the “growing weight of evidence” that green gas injection into the grid has an important role to play in the future. He added: “The innovation underway in our gas network sector is already delivering the valuable lessons and technical understanding which is encouraging the development of a thriving green gas sector in the UK.” That evidence includes a report published earlier this week which said evolving the gas networks for green gas is the cheapest and most practical way to tackle heat decarbonisation. Last week National Grid said in its Future Energy Scenarios that the role gas will play in the UK’s future energy system is unclear due to a wide array of potential outcomes from uncertainty over the direction of government policy. Source link

Brett Martin launches step-by-step installation video Published:  17 June, 2016 Brett Martin Plumbing and Drainage has launched a new installation video, demonstrating how quick and easy it is to install the Cascade Cast Iron Style Rainwater and Soil System. The new installation video takes installers through the process of installing the Cascade Cast Iron Style Roundstyle 112mm Gutter and 68mm Round Downpipe in a step-by-step guide from choosing the right tools for the job, calculating the fall, to cutting and fitting. Source link

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