TransCanada last week filed a formal arbitration request under the North American Free Trade Agreement, seeking $15 billion in damages for President Obama’s rejection of its Keystone XL Pipeline project.
NAFTA’s arbitration rules allow companies to challenge government decisions before international panels. TransCanada had filed a notice of intent in January and tried to negotiate a settlement with the U.S. government.
The company said it is seeking to recover its costs, calling Obama’s decision “symbolic and based merely on the desire to make the U.S. appear strong on climate change, even though the State Department had itself concluded that denial would have no significant impact on the environment.”
More: Reuters; OilPrice.com
ETRACOM Fined $2.5M; Will Seek Federal Court Review
ETRACOM and its principal trader Michael Rosenberg said they will seek a de novo review in federal court of FERC’s June 17 order fining them $2.5 million and demanding repayment of $315,000 in unjust profits (IN16-2).
The commission concluded the company submitted uneconomic virtual supply transactions at the New Melones intertie at the CAISO border to affect power prices and benefit its congestion revenue rights in 2011. The commission ordered the company and Rosenberg to pay the fines within 60 days. Chairman Norman Bay, who headed the Office of Enforcement during part of the commission’s investigation, did not participate in the order.
ETRACOM insists it used a legitimate bidding strategy at New Melones based on hydro conditions. In a press release, it said FERC’s order was “the result of an unfair and arbitrary process, wrong on the merits and largely rubber stamps the views of its Enforcement staff.” It said it “is confident that a neutral decision maker will decide it committed no wrongdoing.”
More: FERC: Market Flaws Irrelevant to Case
White House: Coal Program Costs Taxpayers Billions
A White House study of federal coal leases concluded that the U.S. government is probably losing $3 billion of revenue a year because of permissive rules and loose oversight.
“Companies have employed several tactics to lower the selling price of coal without losing revenue,” according to the report by the White House Council of Economic Advisors. Mining companies sell coal to affiliates at low prices or levy penalties from utilities that reject deliveries. In those instances, the government doesn’t receive its share. “The program has been structured in a way that misaligns incentives going back decades,” the report states.
The U.S. is supposed to collect a 12.5% royalty on coal mined from federal land but is actually receiving closer to 5%, according to the report.
More: Reuters
Cantwell Urges FERC Vigilance in West
Sen. Maria Cantwell (D-Wash.) is urging FERC to take special actions to make sure an expected natural gas shortage on the West Coast doesn’t lead to market manipulation.
In a letter to FERC Chairman Norman Bay, Cantwell said the Aliso Canyon leak could lead to increased electricity and gas prices and enable companies to “engage in Enron-like tactics.”
“Westerners still remember 2000-2001,” Cantwell wrote. “History must not be allowed to repeat itself.”
More: Morning Consult
FEMA Gives High Marks After Cooper Nuke Test
The Federal Emergency Management Agency said officials who participated in a recent test for Nebraska’s Cooper Nuclear Station are ready to work together in the event of a disaster at the plant.
The test, conducted June 14, probed how well Missouri and Nebraska agencies, organizations and the utility itself would react to a crisis involving Cooper, which is owned and operated by the Nebraska Public Power District. The exercise is a biennial requirement that measures adequacy of state and local radiological emergency readiness and response plans.
“It was a very productive event,” said Chuck Gregg, a senior planner with FEMA. “There’s a lot of good things that came out of this.”
More: St. Joseph News-Press
Germany Passes Measure Limiting Shallow Fracking
The lower house of Germany’s legislature passed a measure that will ban fracking in clay formations and issue more stringent rules governing fracking in deeper formations.
The legislation bans fracking in clay formations, which normally lie between 1,000 and 2,500 meters deep. The ban would be reviewed in 2021. Energy companies, however, say exploring the country’s shale gas reserves would guard against the country growing more dependent on natural gas imports, which mostly come from Russia.
Lawmakers have been mulling an amendment that would allow shale fracking under 3,000 meters and had asked companies to hold off on their projects until they finalized the details. They moved quickly to pass the ban, however, after a report that companies were growing impatient and moving ahead. Fracking is deeply unpopular among the German populace.
NRC Denies Request to Up Vermont Yankee Security
The Nuclear Regulatory Commission ruled that the operators of the shuttered Vermont Yankee are permitted to shrink the plant’s emergency operations, denying a request from Vermont officials that Entergy reinstate the same standards used when the plant was operating.
Entergy retired the plant in December 2014. Since then, it has reduced personnel at the emergency operations center and successfully lobbied NRC to erase the standard 10-mile emergency planning zone.
The commission said the state didn’t provide evidence to support its arguments that the reduced emergency plan failed to account for all credible emergency scenarios and posed an increased risk to the health and safety of citizens.
More: VTDigger.org
FERC: Redesign Overlapping Pipeline Routes in Ohio
FERC told the developers of two competing Appalachian natural gas pipelines that they have to redesign an overlapping 13-mile section of their routes in Ohio before it can consider approving them.
The Rover and Leach XPress pipeline projects, planned by Energy Transfer Partners and Columbia Pipeline Group respectively, “are proposed in exactly the same location” with construction planned for “the same calendar year.”
FERC said it wants a response from the companies within 10 days of the June 21 letter. The Rover pipeline is planned to run 700 miles through West Virginia, Pennsylvania, Ohio and Michigan, while Columbia’s Leach Xpress is to run 130 miles from West Virginia, through Pennsylvania and into Ohio.
More: Natural Gas Intelligence