North American Oil & Gas Pipelines

FEB 2017

North American Oil & Gas Pipelines covers the news shaping the business of oil and gas pipeline construction and maintenance in North America, including pipeline installation methods, integrity management innovations and managerial strategies.

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10 North American Oil & Gas Pipelines | FEBRUARY 2017 Report: Denying Pipeline Expansion to Jeopardize U.S. Energy Security A new report released Jan. 16 by Consumer Energy Alliance (CEA) found that rejecting pipeline infrastructure would re- move almost one-third of U.S. electricity generation capacity by 2030, dangerously raising electric rates nationwide, espe- cially for poverty-stricken households. The report, titled "Families, Communities and Finances: The Consequences of Denying Critical Pipeline Infrastructure," found that by 2030, 31 percent of U.S. electricity generation capacity would be removed should the rejection of pipeline infrastructure projects continue at its current pace and if base- load generation options go offline unnecessarily. This would threaten the delivery of vital oil and natural gas feedstock to power generation facilities and sacrifice the reliability of the electric grid. Because natural gas is increasingly used to create electricity, pipeline expansion is more critical than ever. With- out more pipelines, natural gas — as well as oil for fuel and power — will not get to market. The losses from this rejected infrastructure would equal the power generation of a dozen states (or 1,450.25 gigawatts). Since one gigawatt powers roughly 750,000 homes, that's equal to the power generation needs of California, Florida, New York, Texas, Ohio and all of New England combined. This projected shortfall would create more economic hard- ship via skyrocketing electric rates for industrial, commercial and residential users, particularly the 43 million people liv- ing on a fixed income or below the poverty line who lean on daily access to affordable energy supplies. Denying pipeline expansion will further increase pressure on households facing energy poverty; approving projects will help relieve financial constraints by delivering resources more cost-effectively. Furthermore, these scenarios would negatively impact jobs in manufacturing, energy, transportation, mining, agriculture and other industries, the report says. Corresponding impacts would include competitive disadvantages for U.S. businesses and a minimum loss of $15.38 billion in private capital expen- ditures and economic development. Electricity, transportation and utility costs would also climb, the report says, as well as increase the cost of virtually every U.S.-made good and service. Fewer pipelines also decreases their statistically proven environmental benefits and jeopar- dizes U.S. national security and geopolitical influence, accord- ing to the assessment. The report also revealed that the rejection of natural gas and oil pipeline infrastructure would endanger U.S. energy secu- rity by abandoning more than 3.17 million barrels of oil per day — nearly the same amount the U.S. imported daily from OPEC and Russia in 2015. "Denying America the critical energy infrastructure it sorely needs and prematurely shutting off baseload electricity gen- eration starts an adverse domino effect that hurts America, its families, its small businesses and its agriculture, manufactur- ing and transportation sectors," CEA president David Holt said. "It would derail the American energy revolution and increase our reliance on imports from foreign nations. Real energy se- curity is not just the presence of abundant natural resources – it is also the ability to readily access and deliver those resources at an affordable price." The report is part of CEA's "Pipelines for America" campaign and is available online at . Anadarko Petroleum Corp. will sell a number of its Marcellus shale assets to Alta Marcellus Development LLC for approximately $1.24 billion. The agreement includes Anadarko's operated and non-operated upstream assets and operated midstream assets in the Marcellus region of north-central Pennsylvania. However, the midstream assets in the Marcellus owned by West- ern Gas Partners LP, Anadarko's spon- sored master limited partnership, are excluded from the agreement. Alta Mar- cellus Development is a wholly owned subsidiary of Alta Resources Develop- ment LLC. "With this transaction, we have an- nounced or closed monetizations total- ing well in excess of $5 billion in 2016, while principally focusing Anadarko's U.S. onshore activities on our world- class oil-levered assets in the Delaware and DJ basins," said Al Walker, Anadar- ko chairman, president and CEO. "Our Marcellus team has done a superb job of maximizing the value of our position in this natural gas play, and we are grate- ful for their efforts and dedication." The Marcellus shale divestiture in- cludes approximately 195,000 net acres and, at the end of the third quarter of 2016, sales volumes from these proper- ties totaled approximately 470 million cubic feet per day (MMcf/d). The transaction is expected to close during the first quarter of 2017, subject to customary closing conditions and adjustments, according to a Dec. 21 statement. Jefferies LLC marketed the assets, and Sidley Austin LLP served as Anadarko's legal counsel. Anadarko Sells Marcellus Shale Natural Gas Assets

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