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November 11, 2011

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Articles of Interest to MLP Investors

There were a few large news items that came out this week, as well as a few interesting articles I thought you MLP readers might be interested in that I will share in this post.  Then I’ll be posting my MLP Week Thoughts later this weekend.
The biggest news of the week in the pipeline industry was President Obama’s decision to delay TransCanada’s Keystone XL pipeline project.  It is fairly stunning that a project that will increase energy independence and decrease unemployment could be shelved, but it happened.   Christopher Helman of Forbes wrote a piece on his Fuel blog titled “Obama Rejects Reason, Kills Keystone XL” that captures the feelings of most people in and around the oil industry, I think, but you tell me:

If they really wanted to protect the land and the water of the Midwest they would focus on stopping the agribusiness giants from pouring mountains of hydrocarbon-derived fertilizers directly onto the land, chemicals that trickle down into the water table and through watersheds into the Mississippi.

Besides, it’s not as if delaying a pipeline from Canada will do anything to hurt Big Oil. The United States will continue to consume 19 million barrels of petroleum products per day and will continue to import roughly 10 million barrels per day from the rest of the world.

That oil, wherever it comes from, will be traversing continents in pipelines that likely aren’t built to the specifications that the government would demand of TransCanada. That oil will be shipped to the United States in tankers that belch into the air the exhaust of millions of tons of bunker oil. Great victory.

I read another interesting take by Michael Levi, a senior fellow for energy and the environment at the Council on Foreign Relations, and also author of a blog on energy, security and climate (found here).  Michael has an op-ed in the New York Times today discussing what the implications of the Keystone pipeline’s success with local opposition will mean for the future of energy projects of all kinds (including clean energy ones) that will need federal approval, but might face local opposition:

That leaves environmentalists with a real conundrum. For green groups, the shortest route to blocking fossil fuel development appears to be leveraging local opposition. Many will seek to turn this not only against the Canadian oil sands but against United States oil production and coal exports, too. At the same time, they will find themselves increasingly appealing to the federal government for help in overriding local opposition to wind farms, solar plants, long distance transmission lines and other critical pieces of zero-carbon infrastructure. These two endeavors will conflict. 

Picture Source: Reuters

Enbridge and Enterprise’s Wrangler Pipeline may be the beneficiaries of the delay in Keystone, according to Bloomberg.
After the success of the Keystone protests, it seems logical to assume that the movement against fracking could gain momentum next.  I’ll share two articles on fracking that I read this week with interest, one comforting and one troubling.
Comforting: “UT Study: No Direct Fracking-Water Contamination Link” (from Tom Fowler of the Houston Chronicle and Fuelfix):

Preliminary results of a University of Texas study on hydraulic fracturing indicate the process itself does not appear to contaminate contaminating drinking water, but that fracturing sites may have a higher incidence of surface problems that can occur with any type of drilling.

Troubling: “Fracking Chemical found in Town’s Acquifer”.  The properties in question are in Wyoming and were owned by Encana before they were sold to Legacy reserves earlier this year.
The last article I’ll share is from USA Today on natural gas cars.  Honda will begin selling cars that run on natural gas at more than 200 dealerships across 36 states.  It will cost $5,000+ more than a comparable Civic, it struggles on hills and there aren’t many places to fill it up.   But it’s a step in the right direction, and the article also says that a fueling station could be set up in your house using existing natural gas sources.  The prospect of paying for my transportation fuel in arrears on my gas bill sounds really cool.  Anything that might change the landscape of natural gas demand in this country also sounds pretty cool.
What’s everyone else reading?

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