Energy In-depth: Arkansas pipeline builder indicted for oil spill in California

Editor’s note: Each Friday, Talk Business & Politics provides “Energy In-depth,” a round-up of energy and regulatory news.

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PLAINS ALL AMERICAN INDICTED IN CALIFORNIA FOR 2015 OIL SPILL
Plains All American Pipeline and one of its employees were indicted by a California state grand jury this week for alleged violations of California law in connection with the May 19, 2015 accidental oil release near Santa Barbara. The indictment included a total of 46 counts, 10 of which relate to the release of crude oil or reporting of the release and 36 of which relate to wildlife alleged to have been taken as a result of the accidental release.

Plains said it was deeply disappointed by the decision of the California Attorney General and Santa Barbara District Attorney to pursue criminal charges against Plains and one of its employees in connection with the 2015 accident.

“Plains believes that neither the company nor any of its employees engaged in any criminal behavior at any time in connection with this accident, and that criminal charges are unwarranted,” the Tulsa pipeline company said.

Plains still has plans to construct the 440-mile, 20-inch Diamond Pipeline project across the state of Arkansas, bringing up to 200,000 barrels per day of domestic sweet crude from the company’s Cushing, Okla. terminal to Valero’s refinery complex in Memphis, Tenn. Construction on that $900 million project is expected to begin later this year with a completion target for late 2017.

GLOBAL CRUDE PRICES NEAR $50 A BARREL; BLOATED U.S. STOCKPILES, FED INTEREST RATE TALK HALT RALLY
Brent and West Texas Intermediate crude reached their highest point this week since November, nearing the $50 a barrel mark in trading on Thursday before tumbling on news that U.S. oil stockpiles unexpectedly spiked and the Federal Reserve may raise interest rates in June. In Thursday’s trade on the New York Mercantile Exchange, U.S. light, sweet crude for June delivery fell 2.2%, or $1.08 to $47.11 a barrel. July Brent futures slid 2.6%, or $1.28 at $47.64 a barrel on London’s ICE Futures exchange.

On Wednesday, the U.S. Energy Information Administration reported that U.S. crude oil stockpiles were nearing all-time highs as inventories rose by 1.3 million barrels to 541.3 million barrels last week. Also, minutes released mid-week from the Fed’s April meeting gave strong indications that the monetary panel will likely raise rates at next month’s FOMC gathering.

EIA: MANY NATURAL GAS-FIRED POWER PLANTS UNDER CONSTRUCTION NEAR MAJOR SHALE PLAYS
Growth in natural gas-fired generation capacity is expected to continue over the next several years, as 18.7 gigawatts (GW) of new capacity comes online between 2016 and 2018. Many of the new natural gas-fired capacity additions in development are near major shale gas plays, according to the U.S. Energy Information Administration. The Mid-Atlantic states and Texas have the most natural gas-fired capacity additions under construction with planned online dates within the next three years.

Several of the natural gas capacity additions are concentrated around the Marcellus and Utica shale regions, largely located in Pennsylvania, West Virginia, and Ohio. These states have been leading the growth in U.S. natural gas production over the past several years, driven by increasing production in the Marcellus and Utica shales. Natural gas infrastructure has been added in these regions to transport natural gas to population centers along the Atlantic Coast.