BP Expects Changes in the Global Energy Demand

BP Energy Outlook: Global energy demand to grow 30% to 2035
Global energy demand will increase by around 30% to 2035 with an average growth of 1.3% per year, according to the 2017 edition of BP’s Energy Outlook. The growth is said to be driven by increasing prosperity in developing countries, partially offset by rapid gains in energy efficiency.

“The global energy landscape is changing,” said Bob Dudley, BP group chief executive. “Traditional centers of demand are being overtaken by fast-growing emerging markets. The energy mix is shifting, driven by technological improvements and environmental concerns. More than ever, our industry needs to adapt to meet those changing energy needs.” The outlook projects that oil, gas, and coal will remain the main source of energy powering the world economy, accounting for more than 75% of total energy supply in 2035, compared with 86% in 2015.

Products source oil demand growth
Oil demand is thought to grow at an average rate of 0.7% a year until 2035. The transport sector continues to consume most of the world’s oil with its share of global demand remaining close to 60% in 2035. Non-combusted use of oil, particularly in petrochemicals, takes over as the main source of growth for oil demand by the early 2030’s. “The impact of electric cars, together with other aspects of the mobility revolution, such as self-driving cars, car sharing, and ride pooling, is one of the key uncertainties surrounding the long-term outlook for oil” said Spencer Dale, BP’s group chief economist.

Gas overtakes coal
Gas grows more quickly than either oil or coal over the outlook, with the demand growing 1.6% a year. Its share of primary energy overtakes coal to be the second-largest fuel source by 2035. The main growth comes from China, Middle East, and the US. In China, growth in gas consumption outstrips domestic production, so that by 2035 imported gas comprises nearly 40% of total consumption, up from 30% in 2015. The outlook expects LNG supplies to grow rapidly to account for more than half of traded gas by 2035.

China pushes renewable growth
Coal consumption is projected to peak in the mid-2020s, largely driven by China’s move towards cleaner, lower-carbon fuels.
Renewables are projected to be the fasted growing fuel source, growing at an average of 7.6% a year, quadrupling over the outlook, driven by increasing competitiveness of both solar and wind. China is the largest source of growth for renewables over the next 20 years, adding more renewable power than the EU and US combined.

Carbon emissions growth slows
Carbon emissions are projected to grow at less than a third of the rate seen in the past 20 years, by an average of 0.6% a year vs. 2.1% a year, reflecting gains in energy efficiency and the changing fuel mix. If achieved, it would be the slowest rate of emissions growth for any 20-year period since records began in 1965. However, carbon emissions from energy use in the base case are still projected to grow throughout the period, by about 13%.

Read the full Oil & Gas Journal article on BP’s Global Energy Outlook.

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Elaine L. Chao becomes the 18th Secretary of Transportation

On January 31, 2017 Elaine L. Chao was voted in overwhelmingly by the senate to run the U.S. Transportation Department. She will be responsible for overseeing aviation, vehicle, train, and pipeline safety.

Chao served as the 24th U.S. Secretary of Labor from 2001-2009 and has held a distinguished career in the public, private and nonprofit sectors. She made history as the labor secretary in George W. Bush’s administration by becoming the first Asian-American woman to be appointed to a U.S. President’s Cabinet.

As secretary of Labor, she focused on increasing the competitiveness of America’s workforce in a global economy and achieved record results in workplace safety and health. Chao came to America when she was 8 years old as an immigrant from Taiwan and received her citizenship at the age of 19. Her website states, “The experience transitioning to a new country has motivated her to dedicate most of her professional life to ensuring that all people have the opportunity to build better lives.”

As the new Secretary of Transportation, Chao will face key decisions on regulating the growing use of drones, modernizing the nation’s air traffic control system, vehicle recalls, automaker’s plans to offer self-driving cars, and helping to rebuild the nation’s infrastructure. Chao says the nation’s economic growth “is jeopardized by infrastructure in need of repair, the specter of rising highway fatalities, growing congestion and by a failure to keep pace with emerging technologies.”


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PHMSA Now Requires Faster Pipeline Accident Notification

PHMSA Final Rule Requires Faster Notification Following Pipeline Accidents

On Thursday, January 19, 2017 PHMSA issued a final rule titled, “Operator Qualification, Cost Recovery, Accident and Incident Notification, and Other Pipeline Safety Changes.” The purpose of the rulemaking is to strengthen the Federal pipeline safety regulations and to address sections 9 and 13 of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (2011 Act).

The amendments codified by this final rule are included below:

1. Specifying an operator’s accident and incident reporting time to not later than one hour after confirmed discovery and requiring revision or confirmation of initial notification within 48 hours of the confirmed discovery of the accident or incident;

2. Setting up a cost recovery fee structure for design review of new gas and hazardous liquid pipelines with either overall design and construction costs totaling at least $2,500,000,000 or that contain new and novel technologies;

3. Addressing the National Transportation Safety Board’s (NTSB) recommendation to clarify training requirements for control room personnel;

4. Providing a renewal procedure for expiring special permits;

5. Excluding farm taps from the requirements of the Distribution Integrity Management Program (DIMP) requirements while proposing safety requirements for the farm taps;

6. Requiring pipeline operators to report to PHMSA a change in product (e.g., from liquid to gas, from crude oil to highly volatile liquids (HVL)) or a permanent reversal of flow that lasts more than 30 days;

7. Providing methods for assessment tool selection by incorporating consensus standards by reference in part 195 for stress corrosion cracking direct assessment (SCCDA) that were not developed when the Integrity Management (IM) regulations were issued;

8. Requiring electronic reporting of drug and alcohol testing results in part 199;

9. Modifying the criteria used to make decisions about conducting post-accident drug and alcohol tests and requiring operators to keep for at least 3 years a record of the reason why post-accident drug and alcohol tests were not conducted;

10. Including the procedure to request protection for confidential commercial information submitted to PHMSA;

11. Adding reference to appendix B of API 1104 related to in-service welding in parts 192 and 195; and

12. Amending minor editorial corrections

The rulemaking was published in the Federal Register on January 23, 2017 and will be effective on March 24, 2017.

Critical Final Rule on Safety Improvements for Pipelines Signed!

PHMSA Completes Rulemaking that Boosts Safety Requirements to Strengthen the Operation, Maintenance, and Inspection of the Nation’s Hazardous Liquid Pipelines

On January 13, 2017, Administrator Marie Theresa Dominquez, head of the U.S. Department of Transportation’s Pipeline and Hazardous Materials Administration (PHMSA) signed a long awaited rulemaking package that makes critical safety improvements for on-shore hazardous liquid pipelines.

The United States contains around 200,000 miles of hazardous liquid pipelines which operate through various communities, cherished lands, bodies of water, and numerous state borders. “As the use of hazardous liquid pipelines to transport the nation’s energy grows, communities around the country have demanded regulatory certainty around the safe operation of these lines and facilities,” said U.S. Transportation Secretary Anthony Foxx. “This rule gives operators clear direction on the design, construction, and operation of hazardous liquid pipelines lines and holds them accountable for the safety of the communities they serve- its full implementation will be a vital step in driving our pipeline safety mission.”

The Rulemaking Package addresses the following:

1. Requires operators to integrate available data on-

• The operating environment
• Pipeline condition
• Known manufacturing defects
• Known construction defects

2. Requires pipeline operators to have a system for detection leaks

3. Establish a timeline for inspecting affected pipelines following an extreme weather event or natural disaster

4. Operators are required to annually evaluate protective measures they are already required to implement on pipeline segments that operator in High Consequence Areas (HCA) where pipeline failures have the highest potential for human or environmental damage, and implement additional measures as necessary

5. The Rule sets a deadline for operators to use internal inspection tools where possible for any new and replaced pipeline that could affect an HCA

6. The Rule updates repair criteria under PHMSA’s risk-based management framework by expanding the list of conditions that require immediate repair

“The changing energy environment in the United States requires that we all become increasingly anticipatory, predictive, and prepared for emerging risks,” said PHMSA Administrator Marie Therese Dominguez. “This is a forward looking rule- it pushes operators to invest in increased data capabilities, to continuously improve their processes to assess and mitigate risk, and strengthens our framework for strong prescriptive regulations.”

The Final Rulemaking has been transmitted to the Federal Register for publication. An actual date of publication will be determined by the Federal Register, and PHMSA will update its website with a link when it is published.