01.16.2012
Financial Assurance for Marcellus Shale: A Common Sense Solution
"A long habit of not thinking a thing wrong, gives it a superficial appearance of being right." Thomas Paine, from Common Sense.
This week the Harrisburg Patriot News published an editorial calling out for application of common sense in the ongoing debate about Marcellus Shale development in PA. Among several valid points made was this one, " Never mind that currently drillers put up a mere $2,500 bond per well, so if something goes wrong taxpayers will be on the line to pay — just like in the coal-mining days, which we are still paying for."
Regardless of one's position on developing shale gas as an energy source, this point seems indisputable. Somehow, in the debate that has raged for years about whether drilling in the Marcellus Shale region should even be allowed, however, it remains lost. Exactly every other industrial activity in the US for which waste is stored, or the earth's crust is punctured, a significant financial assurance and/or financial responsibility mechanism is required - mining, solid and hazardous waste disposal and storage, even for petroleum underground storage tanks. The purpose is not punitive but practical - in order to be certain that financial resources are available to clean up and restore once the operation is discontinued. Yet for the set up and implementation of complex and invasive directional drilling operations, only a small token of $2500 per well is required.
In our opinion, this needs to be addressed immediately. The issue should be separated from the severance tax issue, too, since regardless of how friendly a local government wishes to be in support of business creation, it should not ignore this basic responsibility for protection of the commons. The full article by the Patriot-News is here http://tinyurl.com/6sx6ly6
01.09.2012
What Do They Know That We Don’t?
In yet another move by a refiner to tighten profit margins for retailers, Chevron announced last week that it will be capping its traditional "prompt pay" incentive. The simple math works like this - prior to this announcement, a prompt paying retailer received 1% discount off of rack price. In the new world, this discount is "capped" at 4.5 cents per gallon.
The move by Chevron begs some questions - 1) Since retail price across the country is currently well below $4/gallon, is a price spike at the pump on the horizon?, and 2) What possible rationale for the cap can be offered, other than "because we can"? It remains to be seen what if anything other refiners have planned in response.
09.12.2011
UST Compliance Violations Cost Chevron and Shell More than $27 Million
“This area of litigation is a very unique, complicated area of litigation...It was a long-term investment.”
So says Sacramento County, CA district attorney Jan Scully following her victory in prosecuting a UST compliance litigation against Chevron and receiving a settlement of over $24.5 million dollars. Shell had previously settled in 2009 for $3 million. The lawsuit, alleging damages to groundwater from MTBE from 580 stations across Sacramento County, was first initiated in 2003. As state coffers dwindle in these challenging economic times, this type of “investment” strategy is expected to provide a blueprint for similar government actions across the US.
While Chevron admitted no fault in the groundwater contamination claim, Scully’s complaint alleged a laundry list of violations, such as failure to perform monthly tests, maintain records, and a number of other UST compliance deficiencies which could have easily been prevented if the Fuel-View UST management system from Tanksurance's alliance partner Synergy Environmental, Inc. had been in place.
Want to make sure you’re protected? CONTACT US For a free consultation on how Fuel-View can help you avoid Chevron’s fate. We can also provide a complete copy of the settlement agreement if you wish to read it for yourself.
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