Legal battle over flaring continues
Rehearing is sought in wake of TRC vote Starting Friday, new tariffs on wine, liquor and cheese are going into effect Consumer spending fell 0.3 percent during September
A firstofitskind dispute over whether an oil producer can burn off natural gas — even though a pipeline is available to transport the substance — is headed back to state regulators.
The Texas Railroad Commission, the state’s oil and gas regulator, voted 21 on Aug. 8 to allow Exco Resources of Dallas to flare the natural gas, a byproduct of its oil production, at 69 locations in Dimmit and Zavala counties.
Pipeline operator Williams Cos. is seeking a rehearing of the matter at the TRC’s meeting Oct. 23.
Flaring, the controversial practice of controlled burning of natural gas, releases pollutants into the atmosphere.
In the first case of its kind, Tulsa, Okla.based Williams contested Exco’s flaring permit, arguing there was no need to flare the gas because Exco could use William’s gathering system in the area.
The commission routinely approves thousands of uncontested flaring permits a year, largely based on the absence of pipeline systems to transport the natural gas, said Harry Sullivan, Jr. an attorney who teaches oil and gas law at Texas A&M School of Law in Fort Worth.
“This case is unusual because there is no need to flare the gas — you can send it to the pipeline,” he said.
Williams spokesman Keith Isbell said in a statement that the TRC’s Rule 32 prohibits flaring except when it’s a necessity.
“We believe the facts of this case provide a sound basis for the commission to take a second look at its recent approach to flaring as this is the first time that a producer has sought to electively flare all of its gas despite an available connected gas gatherer able to transport the product for this producer,” Isbell said.
Exco Resources, which emerged from bankruptcy in July, declined to comment.
Willaims’ motion for reconsideration noted that Exco was a customer of Williams before the controversy, using its pipelines to transport the Eagle Ford gas from its wells.
“Exco purchased its wells and leases from Chesapeake in 2013 with full knowledge of the gathering system rate and agreed to pay the thenexisting gathering rate charged by Williams,” the motion says. “Exco considered that rate to be acceptable. This necessarily means that Exco saw the situation as making economic sense.”
Williams said Exco entered into a 20year contract. It’s unclear
NEW YORK — The tariffs the Trump administration is about to impose on wine, liquor and cheese from Europe couldn’t come at a worse time for small retailers.
“It’s kind of scary in the sense that we’re getting to the holiday season,” says Joseph Kakos, owner of Kakos Fine Wine & Spirits in Birmingham, Mich. “October, November and December are the time when you really make your money for the year.”
No one expects consumers to completely abandon Bordeaux and other wines from France, Scotch whisky or cheeses like Parmesan or Roquefort when the 25 percent tariffs take effect Friday. Still, Kakos says, shoppers may turn price conscious just as shelves are wellstocked for the holidays.
“People come in with the perceived idea of, is this more expensive? Has this gone up?” he says.
Wine retailers, distributors and importers already expect some customers to seek reds and whites from countries whose products aren’t being taxed. And any signs
U.S. consumers unexpectedly pulled back on retail spending for the first time in seven months, reviving fears that a weakening economy finally could be taking its toll on American shoppers just before the pivotal holiday season.
Retail sales dipped 0.3 percent in September from the month before, the U.S. Commerce Department said Wednesday, as shoppers spent less on automobiles, building materials and sporting goods. Sales at department stores fell 1.5 percent from the month before, while online shopping slipped by 0.3 percent.
Retailers, already rattled by President Donald Trump’s ongo
if the contract was broken during the Chapter 11 bankruptcy proceedings in 2018 and 2019.
Given the low price producers are receiving for natural gas, Sullivan said it’s likely Exco would lose money by using the Williams pipeline. The price producers receive for gas has gone below zero — into negative territory — sever
al times this year.
During the TRC proceedings in August, two of the three commissioners, Christi Craddick and Ryan Sitton, said they opposed forcing a contract on Exco.
They also said the case brought up interesting questions about balancing economic considerations with preserving oil and gas resources.
The third commissioner, Chairman Wayne Christian, cast the dissenting vote, saying he had “serious concerns” over the commission’s frequent approval of flaring permits and whether it was in the best interests of Texas.
Williams contends in the new motion that it didn’t force a contract on Exco because the company already a contract with the pipeline company.
It also said Exco’s assertion in August that Williams only could take 70 percent of its gas was untrue. Williams said it can take all of the gas.