Energy In-depth: Fort Smith to Little Rock pipeline ‘substantially complete’

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

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MAGELLAN SAYS FORT SMITH-TO-LITTLE ROCK PIPELINE ‘SUBSTANTIALLY COMPLETE,’ PRODUCT SHIPMENTS BY JULY
In its first quarter earnings report on Wednesday, Tulsa-based Magellan Midstream Partners said construction of the company’s Fort Smith to Little Rock pipeline is “substantially complete, with operations expected to begin in early July.” The controversial pipeline project should bring some 75,000 barrels of refined petroleum products from Fort Smith into the Little Rock market.

After receiving strong interest in the project, the lynchpin of Magellan’s proposal to the Federal Energy Regulatory Commission was that the project would significantly boost the level of gasoline, diesel fuel and jet fuel that enters the Little Rock market, providing access to refined products from Mid-Continent and Gulf Coast refineries via Magellan’s Fort Smith terminal and extensive refined petroleum products pipeline system.

FERC Commissioner Colette Honorable, the former chair of the Arkansas Public Service Commission, recently toured Magellan’s local terminal during a visit to Little Rock.

DECLINING ENERGY PRICES LOWER THE COST OF LIVING
Since June 2014, decreases in crude oil and natural gas prices have reduced household energy costs. According to initial figures from the U.S. Bureau of Labor Statistics (BLS), the chained consumer price index for urban consumers (C-CPI-U) decreased by 1.2% from June 2014 to February 2016. Lower energy prices had a significant impact on this decrease in spite of increases in the food and shelter components of the overall index, which represent larger shares of household expenses.

The overall index edged up 0.6% in March as real crude oil prices rose 18.1%, while natural gas prices continued to decline, according to the U.S. Energy Information Administration.

Between June 2014 and February 2016, the inflation-adjusted Brent crude oil and Henry Hub natural gas prices declined 71% and 56%, respectively. Prices for these two benchmarks are significant, as changes in the Brent crude oil price often lead to changes in gasoline, diesel, and heating oil costs, while changes in the Henry Hub price affect natural gas prices and, to a lesser extent, electricity prices. The energy component of the C-CPI-U decreased by 35.3%, reflecting the influence of declining spot prices on household energy prices.

AEROJET SOLAR FACILITY OPERATOR IN CAMDEN GETS $100 MILLION EQUITY BACKING FROM SWISS INVESTMENT GROUP
Silicon Ranch Corp., the renewable energy plant owner and operator of the Aerojet Rocketdyne solar project in Camden, said it has closed on a $100 million equity investment from Partners Group, a Swiss private markets investment management firm with more than $50 billion in assets under management. Partners Group led a recent investment round on behalf of its clients to increase Silicon’s equity capital backing, company officials said.

Silicon Ranch was responsible for the first large-scale solar facilities in Tennessee, Georgia, Arkansas, and Mississippi, including 12-megawatt solar facility in South Arkansas. The Tennessee solar plant operator also recently completed its first projects in Colorado, and plans to significantly expand its portfolio across the U.S. over the next 18 months through organic growth and strategic corporate development, officials said.