Arkansas Oil Spill Leaves Many Asking Questions
Written by Emily Couch
An oil spill in an Arkansas town is bringing more light to the risk of transporting fuel across a national labyrinth of pipelines. President Barack Obama has to weigh the risk factors and benefits of the Keystone XL project.
Environmental groups are using the Exxon Mobil Corp pipe bust on March 29 in Mayflower, Arkansas as the fighting reason as to why Obama should reject Keystone while industry groups assert that pipelines continue to be the safest way to transport oil.
The US State Department is undergoing the colossal task to come to a decision if Obama should approve the Keystone project. The review of this plan is vital because Keystone crosses an international border. The White House is very serious about the safety of the pipeline system and The Environmental Protection Agency is working with local officials and Exxon on the Arkansas spill.
Congress argues that the Keystone project will create thousands of jobs. Battling the unemployment issues in the U.S. could not come soon enough and is said to improve U.S. energy security.
Related Story: Keystone XL Would Only Create 35 Permanent Jobs
On March 22, the Senate approved 62-37, a non-binding resolution encouraging the development of Keystone. The pipeline could carry more than 800,000 barrels of diluted bitumen, or dilbit, from Alberta, Canada to refineries along the U.S. Gulf Coast, if built. Currently, Exxon’s pipeline Pegasus runs from Patoka, Illinois to Nederland, Texas and carries up to 96,000 barrels a day.
Around 11.9 billion barrels of oil, gasoline and other refined products are transported across the network of pipelines, according to John Stoody, the Director of Government and Public Relations for the Association of Oil Pipe Line. The members of this Washington based group own about 85 per cent of the liquid pipelines in the US
Meanwhile, environmentalists continue to argue that the spill is a reminder that oil companies should not be trusted to transport toxic chemicals.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.