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Arkema's Harvey charges grow, ExxonMobil to expand in Baton Rouge, Shale output to hit record
Our pick of the latest petrochemical news you need to know
Arkema hit with more criminal charges in 2017 Hurricane Harvey Fire
A grand jury indicted Arkema and one of its executives for the felony offense of causing bodily injury to two sheriff deputies by withholding critical information needed by first responders to protect themselves and the community from chemicals released from Arkema's Crosby Plant, Harris County District Attorney Kim Ogg said.
“The facts show Arkema knew of the dangers, withheld vital information, and unleashed harm on first responders and the community," Ogg said in a statement. “This felony indictment is a wake-up call to companies that would pollute our air and waterways, ignore best practices in safety, and put our communities at risk.”
According to the indictment handed up by the Grand Jury, Arkema and Mike Keough, the company's vice president of logistics, misrepresented the danger faced by the community outside their gates, leading to the injury of two deputies.
Arkema told emergency personnel the company was keeping track of its chemicals with off-site, real-time monitoring and would notify emergency personnel before they would be at risk of exposure to toxic chemicals from its plant. The evidence shows that while reassuring emergency personnel several of the chemical containers were completely unmonitored.
A toxic cloud was captured on dash-cam video by deputies on the scene, and deputies and EMT personnel exposed to the toxins were ordered to report to San Jacinto Methodist Hospital for decontamination.
The Felony Assault charges announced in April carry a punishment of 2-10 years as a third degree felony.
Dan Cogdell, an attorney for Keough, said in a written statement that he was appalled by the decision to charge his client criminally. He said Keough was in Pennsylvania during Harvey, when he gathered the list of chemicals at the site and sent it to the command center at the scene. He also provided needed safety information hours before the first fire occurred that, if followed, would have enhanced the safety of first responders.
ExxonMobil gives green light on new PP capacity
ExxonMobil announced its plans to invest $500 million in a new polypropylene plant at its Polyolefins complex located in Baton Rouge, Louisiana.
The investment will create more than 60 jobs at the facility and over 600 construction jobs during the building process. That building construction is slated to start in 2020.
The plant will create over 450,000 tons of polypropylene plastics, specializing in plastics for car parts, recyclables, and food packaging.
US Shale to hit record in May—EIA
U.S. crude oil output from seven major shale formations is expected to rise by about 80,000 barrels per day (bpd) in May to a record 8.46 million bpd, the U.S. Energy Information Administration said in its monthly drilling productivity report on April 15.
The largest change is forecast in the Permian Basin of Texas and New Mexico, where output is expected to climb by 42,000 bpd to a fresh peak of about 4.14 million bpd in May.
In North Dakota’s Bakken region, shale production is estimated to rise by about 11,000 bpd to about 1.39 million bpd, easing from a record 1.41 million bpd hit in January. In the Eagle Ford region, output is expected to edge higher by 7,000 bpd to about 1.43 million bpd, which would be the highest monthly output since January 2016.
Natural Gas Power Capacity surpasses Coal in US
The amount of generating capacity from natural gas-fired combined-cycle (NGCC) plants has grown steadily over time, and in 2018, surpassed coal-fired plants as the technology with the most electricity generating capacity in the U.S., according to the U.S. Energy Information Administration (EIA).
As of January 2019, U.S. generating capacity at NGCC power plants totaled 264 gigawatts (GW), compared with 243 GW at coal-fired power plants.
Total capacity for generating power in the U.S. across all types of natural gas-fired generating technologies surpassed coal as the primary capacity resource more than 15 years ago. However, different natural gas-fired generating technologies are used differently.
Steam turbines (which can also be powered by oil or coal) combust fuel to generate steam, which is used in a steam turbine to generate electricity. Combined-cycle units heat up fuel and use the fuel-air mixture to spin gas turbines and generate electricity. The waste heat from the gas turbine is used to generate steam for a steam turbine that generates additional electricity.
Natural gas-fired combustion and steam turbines are less efficient and more expensive to run, so they are typically used only during periods of peak electricity demand. Similarly, almost all coal plants (except integrated gasification units, which are rare) combust coal to generate steam, with little opportunity for efficiency improvements.
As of the end of 2018, NGCC power plants accounted for about half of all U.S. natural gas-fired generating capacity, but they provided almost 90% of total natural gas-fired generation. Capacity factors for NGCC plants, which reflect their actual output as a percentage of their capacity, are nearly equivalent to those of coal plants and are typically in the 50% to 60% range, while natural gas combustion and steam turbines are much lower at about 10%.
Since the beginning of 2015, about 40 GW of coal-fired capacity have retired, and no new coal capacity has come online in the U.S. During that same time period, NGCC net capacity has grown by about 30 GW. The electricity generation from these NGCC capacity additions, as well as output from new wind and solar generators, has largely offset the lost generation from coal retirements.
In terms of electricity generation, NGCC plants have recently begun providing more electricity than coal plants. Electricity generation from NGCC power plants first surpassed coal-fired generation on a monthly basis in December 2015 and again in the first half of 2016, during times of relatively low natural gas prices. Higher natural gas prices reversed the crossover until February 2018, when NGCC generation again surpassed coal generation.
As more NGCC plants continue to come online and coal plants continue to retire, NGCC-powered electricity generation should consistently rank as the most prevalent source of electricity generation in the United States for the foreseeable future, based on projections in EIA’s most recent Annual Energy Outlook.
Delek acquires Shell deepwater assets, expanding E&P footprint
Delek Group has stepped out of the Gulf of Mexico shelf and into the deepwater, signing an agreement to acquire Shell's 22.45% non-operated interest in the Caesar-Tonga field in the Green Canyon protraction area for $965 million. Caesar Tonga is an oil field located approximately 300km from New Orleans in Louisiana.
"The deal will substantially increase Delek Group's net production by over 25%, from around 48,000 boe/d to over 60,000 boe/d,” said Michael Murphy, research analyst with Wood Mackenzie's Gulf of Mexico team.
“This allows Delek to not only materially increase its presence in the region, but to further its objective of evolving into a pure play international E&P company. The transaction also lets Shell divest a non-core asset, and further focus on its extensive exploration and development programs in the region."
He added: "With a deal point-forward breakeven in the mid-US$30's (NPV10, Brent), Delek will have plenty of cushion to absorb price volatility.
“This deal supports our theory that tight oil is not the only game in town, and the investment pendulum is beginning to swing back toward the deepwater.”