Russia’s OAO Rosneft apparently no longer is considering BP plc as a partner for its planned Arctic development. The strategic alliance had included an Arctic exploration joint venture as well as a stock swap (see NGI, Jan. 17) BP’s current Russian partner TNK-BP objected and legally blocked the alliance (see NGI, May 30). BP CEO Bob Dudley, who had helped craft the proposed alliance, said the company was “moving on,” readying the launch of 30 global projects by the end of 2016 and returning to work in the Gulf of Mexico.

Royal Dutch Shell is planning to build a “world-scale” ethylene cracker with integrated derivative units in the Marcellus Shale in Appalachia. The cracker would process ethane from Marcellus natural gas to produce ethylene, one of the primary building blocks for petrochemicals. Shell said it is evaluating derivative choices for the facility and the leading option is polyethylene (PE), a raw material for items such as packaging and adhesives to automotive components and pipe. Most of the PE production would be used by northeastern U.S. industries, Shell said. Demand for PE in North America is expected to grow. A site for the ethane cracker facility is yet to be selected, and construction would be subject to the receipt of multiple permits.

New Jersey Gov. Chris Christie has called for the state to phase out coal-fired generation in favor of natural gas. The 2011 draft energy master plan (EMP) is a “greener and more affordable vision” to use, manage and develop energy in the state over the next 10 years and beyond, Christie said. Last year the governor directed the New Jersey Board of Public Utilities (BPU) to revisit the EMP because of depressed economic conditions. State law requires the EMP to be updated at least once every three years. Because coal is “a major source” of carbon dioxide emissions, it “no longer will be accepted as a new source of power in the state.” Public hearings on the draft are planned.

Legislation that would ban the use of “flammable gas to clean or blow the gas piping” of electric generating facilities has been unanimously approved by the Connecticut Senate. HB 5802 would put in place fines of up to $100,000 and prison terms of up to two years for each offense. It would also require companies applying to the Connecticut Siting Council to build electric generating facilities to provide a special inspector to help municipal fire marshals inspect the facilities, and to pay a fee that would be used to train local fire marshals “on the complex issues of electric generating facility construction.” The bill was introduced following a natural gas explosion that caused six deaths and multiple injuries last year at an electric power plant in Middletown, CT (see NGI, Feb. 15, 2010).

Maryland Gov. Martin O’Malley has ordered a three-year study of natural gas drilling in the Marcellus Shale, with recommendations on a possible state-level severance tax and a report on potential impacts of drilling on groundwater. The Maryland Department of the Environment and the Department of Natural Resources would conduct the study, in consultation with an advisory commission, and include a review of available results from studies being done by the Environmental Protection Agency, Department of Interior, Department of Energy, the State of New York and the Delaware River Basin Commission.

The American Petroleum Institute (API), which represents major producers, launched an advertising campaign that touts the importance of oil and gas production in rebuilding the U.S. economy. The “Keys to the Future” campaign, which initially will be online and in print, will run for 10 weeks in Washington, DC, and nine key states — Arkansas, Florida, Minnesota, Missouri, Michigan, Virginia, Ohio, Wisconsin and West Virginia. The focus will be on a host of issues, beginning with the need for expanded onshore and offshore drilling, energy security, job creation and revenues to the federal government. During a teleconference with reporters, API President Jack Gerard declined to say how much the institute planned to spend on the ad campaign, but he did say it would be “significant.”

Citing reports that Oregon’s Jordan Cove LNG may pursue approval as a liquefied natural gas export facility, the Western Environmental Law Center (WELC) has called on the Federal Energy Regulatory Commission to conduct a supplemental environmental review of the project or else terminate the project [CP07-441, CP07-444]. In May Canada’s Veresen Inc., which has a controlling interest in the Jordan Cove/Pacific Connector project, announced plans to explore “alternative uses” for the project.

FERC Administrative Law Judge (ALJ) Michael J. Cianci Jr. has been tapped to hear the Section 5 complaint case in which Tuscarora Gas Transmission is accused of significantly overrecovering its cost of service, thus making its current transportation rates unjust and unreasonable [RP11-1823].The proceeding will be subject to Track Two procedural standards — of an expedited deadline for complex cases — requiring an initial ALJ decision to be issued within 47 weeks or by April 27, 2012. The complaint was filed by the Public Utilities Commission of Nevada and Sierra Pacific Power Co. FERC has begun an investigation of Tuscarora’s rates under Section 5 of the Natural Gas Act, and has ordered the pipeline, which is owned by TransCanada subsidiary TC Pipelines LP, to file a full cost and revenue study within 75 days of the order. In the May order setting the case for hearing, the Commission declined to act on complainants’ request for interim relief until after Tuscarora has filed its cost and revenue study (see NGI, May 30).

The Los Angeles Department of Water and Power (LADWP) plans to nearly double its reliance on natural gas for electricity generation while phasing out coal over the next two decades, said General Manager Ron Nichols. He announced that LADWP will eliminate once-through-cooling using sea water at three of its coastal Los Angeles Basin gas-fired generation plants.By 2030 natural gas could provide nearly half of the utility’s power (47%), with renewables providing one-third, and coal being totally phased out.

Carrizo Oil & Gas Inc. has agreed to purchase more than 13,000 net acres in the Eagle Ford Shale for about $71.5 million. The deal is estimated at $5,500/acre, of which $1,650/acre would be paid up front in cash and the remainder through a drilling carry for the next two to three years. The acquisition — located on a condensate trend in LaSalle County, TX — brings Carrizo’s total leasehold in the Eagle Ford to about 33,000 acres. Carrizo said it has moved a rig from the Barnett Shale to the Eagle Ford until December when a new purpose-built rig can be deployed in its place.

Aux Sable Liquid Products LP unit Sable NGL LLC is buying the Stanley Condensate Recovery Plant and Prairie Rose Pipeline from a unit of EOG Resources Inc. The Prairie Rose Pipeline connects the Stanley Plant to the Alliance Pipeline, which delivers high energy dense phase gas to Aux Sable’s Channahon, IL, plant for processing. The agreement calls for the US$185 million transaction to close in July. The Stanley Plant will have capacity of 80 MMcf/d when an expansion is completed in late June.The plant removes the heavier hydrocarbon compounds while leaving the majority of natural gas liquids delivered into Prairie Rose. The 12-inch diameter, 83-mile Prairie Rose gathers gas from the Stanley Plant and other sources for delivery into the Alliance Pipeline system at Bantry, ND.

The Pennsylvania General Assembly may consider a bill giving whistleblower protections to workers in the oil and gas industry. House Bill 1605, sponsored by state Rep. Dan Frankel (D-Pittsburgh), would extend the 1986 Whistleblower Law to include employees of drilling companies and oilfield services companies. “This bill provides greater protection for our communities without imposing any new regulation on drillers,” Frankel wrote to House members. “It simply protects individuals who report wrongdoing or waste to their employer or governmental authority, or who participate in an investigation, hearing or court action when asked.”

The U.S. Coast Guard (USCG) responded last Wednesday to a report of an “oily substance” in Breton Sound near Venice, LA. The spill was said to be several miles long, but it was not known if it was oil. The USCG and the Bureau of Ocean Energy Management, Regulation and Enforcement were investigating. USCG deployed four pollution investigators to the scene to obtain samples, which were sent to a lab for testing.

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