Last updateWed, 07 Dec 2016 8pm


New Pipeline Safety Rule Expands Excess Flow Valve Requirements Again

In October, 2016, The Pipeline and Hazardous Materials Safety Administration (PHMSA) announced a final rule that expands safety requirements for excess flow valves (EFVs) to multi-residential and commercial applications. That version of the rule covered the installation of EFVs in new or replaced service lines for multi-family residences and small commercial buildings.

The rule also requires gas distribution companies to install curb valves – manually-operated shutoff valves located near the service main – or EFVs for all new or replaced service lines with meter capacities exceeding 1,000 standard cubic feet per hour to protect against uncontrolled gas releases from larger commercial and industrial users.

In an amendment posted in December, 2016, the rule has been expanded again, and effective April 14, 2017, the new rule also includes any new or replaced branched service lines servicing SFRs, multifamily residences, and small commercial entities consuming gas volumes not exceeding 1,000 Standard Cubic Feet per Hour (SCFH).

PHMSA is also amending part 192 to require the use of either manual service line shut-off valves (e.g., curb valves) or EFVs, if appropriate, for new or replaced service lines with meter capacities exceeding 1,000 SCFH. Lastly, this final rule requires operators to notify customers of their right to request installation of an EFV on service lines that are not being newly installed or replaced. PHMSA has left the question of who bears the cost of installing EFVs on service lines not being newly installed or replaced to the operator's rate-setter.

New Wastewater Rules Preceded Reduction in Seismic Activity

“The rate of earthquakes in Oklahoma has dropped dramatically since late May, when the state limited wastewater injections into energy wells,” according to a statistical analysis from the Associated Press.

“This year, before the new rules went into effect on May 28, Oklahoma averaged 2.3 quakes a day. Since then the average dropped to 1.3 a day, based on AP’s analysis of U.S. Geological Survey data of earthquakes of magnitude 3.0 or larger. But some of those fewer post-regulatory quakes have been large and damaging.” 

Fitch: Energy Recovery Should Boost Chemical Companies

Modest reflation in the energy sector should filter through to higher prices for petrochemicals, plastics and other chemicals with energy-related feedstocks, resulting in higher sales, earnings and cash flow, according to Fitch Ratings. Market conditions support stable operating profiles for North American (NA) chemical companies in 2017.

Fitch expects the strength of the dollar to be less of a challenge for NA chemical companies in 2017. However, impediments to free trade would challenge domestic producers since Canada and Mexico are ranked first and second, respectively, in U.S. chemical exports.

Fitch believes event risk will likely tip toward merger and acquisition activity and away from activist shareholder-driven recapitalization or share buyback activity in 2017. 

BP Approves $9 Billion Project in Deepwater Gulf of Mexico

BP has sanctioned the Mad Dog Phase 2 project in the U.S., despite the current low oil price environment. Mad Dog Phase 2 will include a new floating production platform with the capacity to produce up to 140,000 gross barrels of crude oil per day from up to 14 production wells. The $9 billion project, which also includes capacity for water injection, is projected to be profitable at or below current oil prices. Oil production is expected to begin in late 2021. 

U.S. Chemical Industry Remains Optimistic for 2017

Moving into 2017, the U.S. Chemical Processing Industry continues to enjoy optimism about future investment, according to Industrial Info's 2017 Global Industrial Outlook. Much of this activity stems from the continued low cost of natural gas liquids (NGLs), a primary feedstock for building-block chemicals such as ethylene.

Global demand for ethylene and other chemicals such as ammonia and methanol remains strong, providing export opportunities for U.S. producers, resulting in increased investment in the U.S. 


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