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Below are some of the writing that Aaron Harris has done:

Business News:

PG&E says proposed CPUC penalty is excessive

Utility Pacific Gas and Electric (PG&E) said a proposed $2.25bn fine levied by the California Public Utilities Commission (CPUC) for the deadly 2010 San Bruno pipeline rupture is excessive and unjustified by past cases.

The penalty arises from the 9 September 2010 rupture that killed eight people and destroyed 37 homes. The explosion was the deadliest accident related to the US natural gas pipeline system. The penalty would be the largest ever levied by a US regulatory body.

In mid-July, the Consumer Protection and Safety Division (CPSD), a division of the CPUC, said the fine should also include a minimum $300mn fine payable to the state general fund for what staff called a disaster caused by “PG&E’s unreasonable conduct and neglect for decades.” The CPUC expects to reach a decision by late summer on whether to levy the proposed penalty or reduce it as PG&E has requested.

The proposed $300mn fine is the only penalty that the CPUC can lawfully impose, PG&E said. The additional $1.95bn component of the CPUC penalty, which would go toward safety measures, violates a clause in the California constitution that bars excessive fines, it said.

The utility claims that the $1.95bn, most of which it could not recover from ratepayers, is not legally justifiable because it is a disallowance. That would be a denial of rate recovery for unreasonable costs, which is applicable to a ratemaking case and not to a penalty case, PG&E said.

The company claims that the total penalty will actually be more than $4bn when adjusting for work that PG&E has already done on its system since the accident. That is almost five times the equity investment in PG&E’s gas transmission and storage business in 2010 and almost as much as total revenues for the nine years prior, according to its response.

Instead of recognizing the improvements and resources and shareholder dollars that PG&E has committed to enhancing system safety, “CPUC staff and other parties want to identify how much additional pain the company can bear, and their resulting recommendations have lost all perspective,” PG&E chief executive Tony Earley said last month while discussing earnings.

PG&E claims that the commission must consider past penalty cases. The proposed penalty is 40 times larger than a 2000 El Paso Natural Gas accident in New Mexico — the largest federal penalty from a natural gas explosion, it said. California and New York are the only two US states that have no cap on penalties and PG&E said that how other states treat penalties should weigh into the constitutional analysis of the case. The largest safety penalty levied by the CPUC was a $38mn fine against PG&E for a 2008 natural gas explosion.

This week PG&E presented possible outcomes if CPUC approves the proposed penalty. It could borrow enough money or raise enough equity through the sale of stock to pay for the penalty, but money would be borrowed at a higher rate. That would raise rates for consumers as project costs would increase.

If the company is unable to raise enough capital, PG&E could be forced into bankruptcy. The company said bankruptcy was a worst-case scenario and part of a range of possibilities.

“It is difficult to understand how the CPUC expects PG&E to attract the capital necessary to maintain the extraordinary investment in safety currently underway, or raise billions of dollars more for safety improvements mandated by the CPUC,” PG&E vice-president of regulatory affairs Tom Bottorff said in a filing.

CenterPoint reports decreased interstate gas throughput

Transmission, gathering and utility company CenterPoint Energy reported a drop in throughput on its interstate pipelines during the first quarter of 2013.

CenterPoint’s interstate pipeline segment reported operating profit of $52mn for the first quarter, down from $60mn in the same period of 2012. The decline was partly a result of reduced off-system transportation revenue from a lack of geographic price differentials and a reduction in pricing and volumes on some contract renewals, the company said.

Natural gas throughput on CenterPoint’s interstate pipelines averaged 4.06 Bcf/d (115mn m³/d) in the first quarter, down 3pc from the same period of 2012.

The company closed yesterday on a midstream partnership that will combine its interstate pipelines and field services units with Enogex, the midstream business of OGE. The combination will provide accelerated value through greater scale, geographic reach, diversification and expanded service capabilities, chief executive David McClanahan said.

The field services unit in the first quarter of 2013 benefited from higher natural gas prices and acquisition completed in 2012. Lower liquids pricings and a 20pc drop in gathering volumes partially offset those benefits. Total natural gas gathering volumes averaged about 2.1 Bcf/d in the first quarter, down from 2.6 Bcf/d in the prior-year period.

CenterPoint said that gathering volumes should increase in the second and third quarters of 2013 as the company moves rigs back into its drier gas play, especially in the Haynesville shale gas field. The company expects to move up to five rigs back into the Haynesville by the end of the year.

The company’s natural gas distribution segment reported an $18mn increase in operating profit in the first quarter of 2013 compared with the prior-year period. Operating profit benefited from a return to more normal winter weather, rate changes and customer growth, the company said. Throughput for the segment was up by 22pc year over year in the first quarter of 2013, driven primarily by an increase in residential customers.

CenterPoint’s electric transmission and distribution unit reported operating profit of $84mn in the first quarter, down from $107mn in the prior-year period. Operating profits decline because of higher expenses, increased depreciation and lower right of way revenues, the company said.

The segment averaged about 181 GWh/d of transmission throughput in the first quarter of 2013, down by 1pc from the same period of 2012. CenterPoint’s distribution arm saw a 2pc increase in metered customers in the first quarter of 2013 from the prior-year period

Overall the company reported a $147mn profit in the first quarter, flat with the same period of 2012.

Oil and Gas:

Colorado lawmakers reject oil, gas fine legislation-Update

The Colorado state legislative cycle ended yesterday with lawmakers failing to come to an agreement on a bill that would have raised fines for oil and natural gas companies that violate state law.

The bill, introduced in March by representative Mike Foote, proposed increasing the daily maximum daily fine for companies to $15,000, removing the current maximum total fine cap of $10,000. But the Colorado Senate removed a section of the bill that would have set a minimum fine of $5,000 per violation per day for violations that have a “significant adverse impact on public health, safety or welfare, including the environment and wildlife resources.”

Current regulations, which have been in place since 1955, set the maximum fine at $1,000 a day, subject to a penalty schedule published by the Colorado Oil and Gas Conservation Commission (COGCC).

The Colorado House of Representatives voted against accepting the Senate’s amendments earlier this week and the legislation went to a conference committee. The conference committee’s report was ultimately not accepted by state legislators.

“The Senate didn’t kill the bill, I did. With the Senate’s amendments, the bill had become a paper tiger,” Foote told Argus. “We ran out of time to make changes this legislative session, but we’ll be back next year.”

The Colorado legislature has considered several bills regulating oil and gas in the state this legislative session, including legislation on oil spills and changing the COGCC mandate.

House Bill 13-1278, which awaits Colorado governor John Hickenlooper’s signature, requires operators to report a spill of one barrel or more — or the equivalent of such — of oil or exploration and production waste within 24 hours after the spill is discovered.

Operators would have to report the spill to the COGCC, emergency response entities with jurisdiction in the area of the spill, the surface owner and owners of land adjacent to the spills. The bill requires the spill report to include information concerning the compounds involved in the spill. The COGCC will design rules to implement the new law.

But state legislators failed to pass a bill that would have amended the mandate of the COGCC — the state’s oil and gas regulator. House Bill 13-1269 sought to change the mandate of the regulatory body to focus more on the protection of public health instead of its current mandate to foster development of oil and gas resources in a manner consistent with the protection of public health.

The bill would have also added a section that would limit who could serve on the commission, including forbidding employees, officers or directors of an operator or oil and gas company. That legislation passed on party lines in the Colorado House, but failed to gain traction in the Senate.

Rampant oil and gas development in the state is prompting more community challenges and calls for greater oversight.

Some Colorado communities have enacted bans on oil and gas development within their city limits. Governor Hickenlooper and the COGCC have each sued the city of Longmont over oil and gas regulations enacted by the city council and a voter-led hydraulic fracturing ban within city limits.

Fort Collins, Colorado, has also banned hydraulic fracturing within its limits. The governor so far is foregoing litigation in that case, and instead is trying to lead a discussion about ways to protect the mineral rights of affected parties.

Earlier this year the COGCC issued new stricter setback rules and new sampling requirements.

Setbacks — the minimum distance a well must be from a structure —are now set at no closer than 500ft (152m) from a residence and 1,000ft from buildings that house large numbers of people, such as schools, nursing homes and hospitals.

The COGCC also now requires operators to conduct sampling of water wells near sites before and after drilling to ensure drinking water aquifers are not affected. Colorado is the only state to require such sampling, according to the COGCC.

North Dakota attempts to curb natural gas flaring

North Dakota is providing financial incentives to companies that develop ways to reduce natural gas flaring in the state, but there is uncertainty whether technologies aimed at harnessing gas at the wellhead will be successful – or even necessary – in the long run.

North Dakota is home to a large swath of the oil-rich Bakken shale formation, where crude and associated gas production growth have outpaced the build-out of new infrastructure. As a result crude is being railed to refineries instead of moving by pipeline and natural gas is getting burned off in the fields where it is produced. Flaring in the state is estimated at 30pc of gross gas production, down from a historical high of 36pc in September 2011, according to the state’s Division of Mineral Resources (DMR).

In an effort to stop the waste, the North Dakota Industrial Commission (NDIC) awarded a $1mn grant to ammonia producer N-Flex to build a mobile ammonia plant that would harness wellhead gas to create fertilizer.

Because of the remote location of some of the well sites in the state, the ability to connect wells to the gas pipeline network in a reasonable amount of time has been difficult, according to North Dakota agriculture commissioner Doug Goehring. The N-Flex plant would be capable of converting wellhead natural gas into high-value nitrogen products for local agricultural needs.

Nitrogen fertilizer, specifically ammonia, is most commonly produced using the Haber-Bosch process, during which natural gas is combined with nitrogen drawn in from the air and reacted with a catalyst. The gases are cooled to produce liquid ammonia, which is 82pc nitrogen by weight and can be used directly as a fertilizer or upgraded to other products. The N-Flex mobile plant uses a mobile, condensed version of that process.

The NDIC outlined several contingencies N-Flex will need to fulfill before receiving the full $1mn grant, including an agreement with at least one producer to use the mobile technology at a wellhead, receipt of necessary permits and a written confirmation of a buyer for the fertilizer. So far, N-Flex has not come to an agreement with a fertilizer buyer or a producer, but says it is in discussions with firms.

The agency also requires N-Flex to submit written confirmation there is adequate capital or investor commitments to cover the overall $4mn cost of the project. Last week, private equity firm Beowulf Energy acquired N-Flex and its mobile distribution method and will be financially backing the project. Prior to the grant and merger, N-Flex was independently funded.

One concern with the mobile plants is the economics. The technology may prove too expensive to make it worthwhile once gas gathering infrastructure in the state catches up with production.

The mobile ammonia plant is the second fertilizer project to be proposed in North Dakota in recent months. In September, farmer-owned cooperative CHS announced plans to construct a more than $1bn nitrogen fertilizer manufacturing plant in Spiritwood, North Dakota. That plant would produce an estimated 2,200 t/d of ammonia and is tentatively scheduled to be in service in late 2016. Such a large-scale plant might kill demand for smaller, mobile versions.

Despite the challenges, the mobile technology could deliver to farmers, who have wells on their lands, a cheaper source of fertilizer while keeping flaring at bay.

One mobile plant has the capacity to produce 1,100 t/yr of ammonia, using roughly 106mn cf/yr (3mn m³/yr) — or 290,411 cf/d — of natural gas from the wellhead, according to N-Flex founder Neil Cohn. The ammonia would feed directly into a trailer at the well site before being delivered to local farmers. That equates to one plant providing fertilizer for 15,000-20,000 acres.

If the mobile plant proves successful, Cohn said plants could be expanded for use across North Dakota, and could be put to use in other regions where there is unconventional gas development. The possibility of 50 mobile plants providing fertilizer for more than 1mn acres would be significant for the state, commissioner Goehring said.

Trunkline Gas project meets congressional concern

Trunkline Gas’ proposed abandonment of a 725-mile (1,167km), 30-inch section of pipeline could negatively affect natural gas customers in Michigan by reducing available supply and causing higher energy prices for consumers and electricity utility generators, Michigan congressional representatives told US federal regulators.

Trunkline has asked the US Federal Energy Regulatory Commission (FERC) permission to abandon a section of its pipeline spanning from Longville, Louisiana, to Tuscola, Illinois, with plans to reverse it as part of a crude pipeline from Patoka, Illinois, to St James, Louisiana.

Following the abandonment, Trunkline’s winter mainline gas capacity would be reduced by almost 580mn cf/d (16mn m³/d) from a current level of 1.5 Bcf/d, according to Trunkline’s initial FERC filing.

Michigan’s two US senators and 12 US representatives voiced concerns over the future reliability of gas service, price volatility, the inability to access and rely on alternative sources of gas from emergent shale formations, and the impact the abandonment might have on prices and supply for midcontinent electric utility generators.

The delegation requested that FERC “consider all possible impacts before deciding on the abandonment.” Part of that request involved giving consideration to Trunkline customers requesting to intervene and protest in the proceeding, citing a need for broader public input and protection of natural gas users.

The congressional delegation joined Michigan governor Rick Snyder and Consumers Energy, who already have filed formal protests against Trunkline with FERC.

Energy Transfer Partners, Trunkline’s parent company, is seeking to move the pipeline to another subsidiary and create southbound crude pipeline designed to transport onshore production to the Louisiana refining hub. Energy Transfer has not said how much crude might move, but the recently reversed Seaway pipeline — 30 inches in diameter like Trunkline — will begin flowing at up to 400,000 b/d early next year.

In its initial FERC filing, Trunkline said the abandonment “will have no adverse effect” on customers’ firm service requirements and will not affect its ability to meet existing obligations.

FERC has 90 days from the date of Trunkline’s 26 July abandonment proposal to complete an environmental assessment or issue a notice of schedule for environmental review.

North Dakota takes aim at Bakken road congestion

North Dakota has awarded a highway construction contract to an MDU Resources subsidiary to help divert oil- and gas-related traffic around populated areas affected by the Bakken production boom.

Knife River will build a $51mn, 8-mile (13km) bypass on Highway 85 in western North Dakota. The project will connect the northern and southern sides of the highway in order to bypass Watford City.

The company plans to begin work next week and complete 1.5 miles of the bypass by the end of the year. The project should be restarted in the spring of 2014 and completed by the following fall.

Traffic in the Bakken production area has increased significantly in recent years and the state’s infrastructure is not equipped to handle the larger volumes, MDU Resources said.

North Dakota natural gas population averaged 970mn cf/d (27mn m³/d) in July, a 34pc increase from the same month of last year. Over 95pc of drilling in the state targets the Bakken and Three Forks formations in western North Dakota.


Local News:

Spending Freeze to Hit Local School District

Word has reached the Lawrence school district that governor-elect Sam Brownback will possibly begin his governorship with a state spending freeze.

“We fully expect to be in cutting mode again next year,” said Julie Boyle, communication director of Lawrence public schools.

Brownback’s spending freeze is not the only budget cut that district schools can expect in the next fiscal year.  Federal stimulus money, which totals nearly $300 million for the state of Kansas, and state funded grants will be ending.

Anna Stubblefield, principal of Central Junior High, said that her school is expecting to have to cut programs in the near future.   After-school programs that deal with targeting students that are at-risk to not pass state testing are paid for solely through state grants.

“The need will still be there, but where the funding will  come from I have no idea right now,” Stubblefield said.

The funding cuts are coming during a time that the district is under pressure from the state.  Lawrence school district recently was put on “On Improvement” for not meeting No Child Left Behind average yearly progress goals.

If a district does not meet goals in reading and mathematics, then they are put on the status of “On Improvement.”  Although the district received several “Standard of Excellence” awards, due to not meeting the AYP goals, they are in danger of losing more funding if they don’t meet the goals next year.

Mark Brungardt, principal of Lawrence High School, said that due to cuts over the past few years the school has had to let teachers go and cut funding to programs.

Both Brungardt and Boyle said they hope that the state and national government will change the standards.  They say that while wanting proficiency in math and reading is fine, there needs to be a growth model.  Boyle said that the current system resembles more of a “cookie-cutter measure” for students.

“Not everyone can meet these standards, for whatever reason,” Brungardt said. “If students are making significant improvement, that should count for something.”

LHS is working on teaching students better test taking methods along with how to read texts more proficiently. Brungardt said he is reluctant to teach to the test.  Skills that benefit through their lives should be more important.

The goal of No Child Left Behind is to have 100 percent proficiency in math and reading across the nation by 2014.   Brungardt said he’s more worried of working to that goal then meeting a deadline.

“We need to worry about 90 percent before we start thinking about 100 percent, “ Brungardt said.


New Application Gives Students More Reason to Keep computers safe

Three clicks.  That’s all it takes.  Just three clicks to hack into your wireless session.

“It’s dead easy to use,” said Julie Fugett, information security analyst for KU IT Security.  “You can do it without any expertise.”

The program that makes the session hacking possible is called Firesheep.  It’s an extension that can be added to the Internet web browser, Mozilla Firefox.

According to the website of Eric Butler, the creator of Firesheep, many websites only encrypt or protect the initial login but nothing else.  If the web address doesn’t read HTTPS://, then it it’s unprotected.

The extension is an issue with wireless connections that aren’t encrypted, like the one at the University of Kansas.  Once a student logs into the network, then they can use such programs to hack into others’ sessions.

“Our system is wide open right now,” said Anthony Whaley, information specialist for the journalism school. “Students need to realize that when being online.”

Due to security issues, KU’s wireless network will be undergoing a significant change in the upcoming spring system.

“Changes have been planned but Firesheep caused an increased concern and need,” Fugett said.

At the start of the spring semester, the wireless connection on campus will be an encrypted network.  Programs such as Firesheep will not longer work on the network.

Fugett says encrypting the system will not end concerns for students.  Although KU’s network will be encrypted, systems in town where students study may not be.

Fugett and Whaley both suggest downloading add-ons that force capable websites to be secured.  Fugett also advised to switching to Google Chrome or Mozilla Firefox since they have two of the most popular add-ons: KB SSL Enforcer and HTTPS everywhere, respectively.

“Students need to think about what someone can do their reputation, through Facebook and other websites,” Fugett said.

One issue with using the add-ons is that if used with Facebook, Facebook Chat doesn’t work.  Whaley says that shouldn’t be the concern, though.

“People need to not do things that aren’t secured on an unsecured system anyways,” Whaley said.


Commentary on GI BILL

Blistering heat.

Sleep deprivation.

Long periods away from family.

The possibility of death at every corner.

Such are a few things that American service members endure as part of their jobs.  They do this as a service to their country.  They are not drafted; they volunteer for four to six years of this duty.

As part of this service, these military men and women are ensured a few things.  A roof to live under, food to eat, a bi-monthly paycheck, and education benefits that not only can be hard to understand, but also change annually.

After September 11, 2001, President George W. Bush signed legislation that ensured educational benefits for service members who served after the terrorist attacks.  Many would receive full-tuition for their college education, as well as a book stipend and an additional stipend to help pay for rent while they went to school.

This August, the rules to receive those benefits changed.  While the GI Bill is now more inclusive, veterans must now wait until their universities pay out any grants or scholarships that are intended for tuition and fees before the GI Bill will provide assistance.  Before, the GI Bill paid full tuition and fees with the veteran receiving all additional funds.

While this change is an understandable money-saving maneuver, it has serious repercussions.  Veterans who have been accustomed to receiving their financial aid during the first week or two of school now may have to wait until late-September, if not later, to receive state and federal financial aid.

The officials in charge of filing veterans’ educational benefits claims are also affected.  Betty Colbert, Veteran Affairs certifying official for the University of Kansas, in an The University Daily Kansan interview, stated that the time to file a claim has increased from 30-45 minutes to up to two hours.  She said that the process has become convoluted.

The Office of Veteran Affairs is trying to save money. However, to include more people in the system, others lose.

A veteran is expected to assimilate back into society after his or her term is done.  Some go into the private sector to do the same jobs they did while in the military; others go to college.  Regardless, they are expected to contribute to society and rejoin the masses.

By complicating the process, the system is making it harder for veterans to transition back to civilian life.  Even a mundane subject such as finance reminds veterans that they are not normal students, that they are different.

A college education is not only repayment for their service, but it helps veterans contribute more to society.

They have fought.  They have bled.  They have sacrificed.

They have done enough.

It is time we let them learn without another battle.


Commentary on Parking at KU

The relationship between KU Parking and Transit and the disabled community at the University of Kansas is unacceptable.

Between trying to charge to park in accessible parking spots and requiring handicap permit holders to register with KU Parking, it is clear that the bottom line is more important than following the law.

By state statute, handicapped drivers are allowed to park in metered parking for free.  They are also required to carry a state-issued ID showing they are allowed to do so.

KU Parking and Transit, with the University’s support, decided to not allow handicapped parkers in to the Mississippi Street Parking Garage without paying.  Disregard the fact that one has to pay by the hour, making it a metered parking structure.

Additionally, KU Parking requires handicapped drivers to register and put a small sticker on their car to prove they registered.  If they do not have this sticker on their car and park in an accessible parking spot, they can be ticketed.

This is a public University.  It is required to follow state statutes, including Title IX, which protects minorities, women and the disabled.

Such statutes are not in place to ensure the University gets what it wants.  It is not just there so KU can protect against hazing.  Or to have an argument for why there is not a men’s soccer team.  Or to justify administration involvement with off-campus police actions pertaining to students.

No, Title IX and similar statutes are in place to ensure that the people they are meant to protect are, in fact, protected.

That means KU Parking, and the University, since it has decided to support Parking’s decisions, needs to make some changes on campus.

First, get rid of the stickers that handicapped parkers must use to park on campus.  This is a public university and there will be guests that will not register with Parking.  To make a disabled person come to Parking just so Parking can ensure a student is not using their grandma’s blue placard is absurd.

Second, fix the problems with the garage.  It is metered parking.   People pay a specific amount of money for a specific amount of time parked in the garage. Parking wants to ensure that they are receiving money for every person in the garage.  However, not every person is legally obligated to pay.

Telling disabled persons to park somewhere else on campus, which Parking has already done, is not a fix.  It is insulting.

Have someone to validate their tickets or find another way to ensure payment from non-disabled parkers.  Forcing guests to pay for something that they are legally exempt from is a poor reflection on the University.

KU Parking and Transit needs to make the best of a bad situation.  They did not fully think through the policies put in place.

Disabled persons are allowed by law to park in the accessible spots for free.   Follow the laws and let them do just that.

It is better than going to court.



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