the major oil story this week was the 105,000 gallon spill from a ruptured 24 inch crude oil pipeline on the Refugio State Beach coastline just west of Santa Barbara on Tuesday...not detected until beach-goers noticed the smell, the buried pipeline a few hundred yards inland apparently spewed oil into a culvert and then into a storm drain that empties into the ocean for 3 hours before the Coast Guard was able to shut it off....first erroneously reported as a 21,000 barrel spill, it was then corrected to 21,000 gallons in later reports that same day, and then revised to the final 105,000 gallon total now being carried in all recent reports, with an estimated 21,000 gallons of that total reaching the Ocean...initial reports were of a 4 mile long oil slick offshore drifting towards Santa Barbara; by Wednesday that had spread out into a 9 mile wide oil slick, which resulted in the closure of two state beaches and area fisheries, and as oil-covered birds and other ocean wildlife began washing ashore, Governor Jerry Brown declared a state of emergency to free up state resources to deal with the spill and its consequences...for those interested in seeing what it looks like, the Boston Globe offers 31 full size full color photos in their "Big Picture" gallery this week...the cleanup is expected to take months, so once again the oil industry is delivering on the increased job opportunities that they've been promising us...
to give you an idea of the area affected, we'll include a map below that was sourced from the LA Times...on that map, the little squares in the ocean indicate the location of offshore oil platforms, the dark black lines show the location of pipelines, the orange blocks in the ocean represent the boundaries of oil company lease holdings, and other orange figures represent the locations of oil storage depots (circles), treatment plants (diamonds), and refineries (i shape) respectively...the pipeline that failed originates from ExxonMobil's Las Flores Canyon Processing Facility near Refugio, and runs west along the coast about 15 miles to the Plains-owned Gaviota pumping station, where the oil is then pumped to refineries in Kern County; Refugio Beach is roughly 20 miles west of Santa Barbara, so we're talking about the pipeline that runs west along the coast from there..(the spill is often described as having occurred at Refugio State Beach, just "north" of Goleta, which is about 10 miles west of Santa Barbara; "north" on this portion of coast apparently means to the west, as reporters seem to assume the entire California coast runs due north/south)...the map below also shows the nearby Channel Islands National Marine Sanctuary and another ocean preserve in dark blue, but does not show the Gaviota Coast Conservancy, which extends along the coast from west of Goleta to Point Sol, which is about 20 miles north of Point Conception, the Cape to the west of the spill area...also shown as black spots are select recent historical oil spills, indicated by a date and number of gallons spilled, most of which were smaller than the current spill, but all of which are dwarfed by the 3 million gallon 1969 Santa Barbara oil spill, which at the time was the largest spill in US history...in the upper left hand corner of the map, we also see the Guadalupe Oil Field, where an estimated 12 million gallons of oil have oozed out underground from at least 80 leaks in pipelines in an oil field operated by Unocal since the 1950s...
although the Center for Biological Diversity had filed a lawsuit to stop dangerous offshore fracking in the Santa Barbara Channel earlier this year, we have seen no indication that the oil that was spilled came from a fracked oil well...the operator of the pipeline that failed here, Houston based Plains All American Pipeline, has a long history of federal safety violations, and had already been cited for 10 crude oil spills between June 2004 and September 2007, in Texas, Louisiana, Oklahoma and Kansas, for which they were fined a total of $3.25 million and told to carry on...Plains, with environmentalist and Microsoft co-founder Paul Allen as a key original investor, also has a long history of fighting environmental regulations, and successfully won themselves an exemption from Santa Barbara county oversight more than 20 years ago; as a result, none of the welds on the pipeline that failed had ever been inspected by county officials, and the Plains pipeline was the only pipeline in the county not to have an automatic shut-off valve, which could have shut down the flow quickly when the initial pressure drop was detected...
elsewhere, in Karnes county Texas, in a largely rural area over the Eagle Ford shale, an oil well exploded on Tuesday, spewing toxic hydrogen sulfide gas that forced the evacuation of several homes nearby...the blowout then continued to spew the poisonous gas, along with methane and oil, for two days, while the area roads were closed to travelers and residents, while operators struggled to regain control....furthermore, even after the well was brought under control on Thursday, residents were still not allowed to return home...reports were that much of the area, including roadways, fields, homes, fence lines, and grass had been covered in oil that had fallen as a mist during the two days that the blowout was underway...as a result, Encana, the well operator, is providing motel rooms and incidental expenses to the evacuated residents while it works to establish a timeline for them to safely return to their homes…
meanwhile, both oil production and oil inventories fell this week, in what some are interpreting as a sign that drilling and fracking cutbacks are starting to have an impact...domestic oil production fell by almost 1.2% to 9,262,000 barrels per day in the week ending May 15th, from 9,374.000 barrels per day in the prior week, while our output still remained 8.9% higher than the 8,434,000 barrels per day production during the 3rd week in May a year ago...our stocks of crude oil in storage fell by a bit more than half a percent, from 484,839 million barrels last week to 482,165 million barrels this week, but that's still 23.2% more than a year ago, and except for the higher levels of the past two weeks, still the most oil we've had stored in the 80 years we have records for... despite what seems to be excessive inventories, our crude oil imports still averaged 7.199 million barrels per day last week, up by 318,000 barrels per day from the previous week. according to the weekly Petroleum Status Report (62 pp pdf) from the Energy Information Administration, our crude oil imports have averaged over 7.0 million barrels per day over the last 4 weeks, 0.4% more than the same 4 weeks last year...
the weekly change in the rig count has become so inconsequential that it hardly seems worth reporting it, as the rig count fell by just 3 in the week ending May 22nd, with oil rigs down 1 to 659, gas rigs down 1 to 222, and miscellaneous rigs down 1 to 4...from a year earlier, the number of drilling rigs operating in the US is now down 972, with oil rigs down 869, gas rigs down 103, and miscellaneous rigs unchanged...560 horizontal rigs have been shut down over that span, leaving 685; another 292 vertical rigs were stacked, leaving 117 operating, and the count of directional rigs fell by 120 to 85...Texas drillers shut down 516 of the rigs they were operating a year ago, leaving them with 373 as of Friday; North Dakota, California, Wyoming and Utah have also shut down more than half their rigs, with the rig count in California falling from 48 to 13, the rig count in North Dakota falling from 174 to 78, the rig count in Wyoming being cut from 45 to 22, and the rig count in Utah falling from 27 to 7..in contrast, the Woodford shale in Oklahoma has seen an increase in active rigs over the past year, with rigs operating in the Cana-Woodford increasing from 24 to 34 and rigs in the Ardmore Woodford increasing from 5 to 6...the rigs operating in the Marcellus shale, which were cut considerably after natural gas prices collapsed in late 2011, have only slowly been idled through this downturn, as the count of active rigs in West Virginia has fallen to 18, from 25 a year ago, while the count in Pennsylvania has just dropped by 11, from 60 last year to 49 last week...in Ohio, meanwhile, the rig count has dropped by 16, from 39 a year ago to 23 last week, with the total Utica shale count falling from 41 to 24 over the same span...
In Heavily Fracked Ohio County, Unsafe Levels of Toxic Pollutants - Emissions generated by fracking operations may be exposing people to some toxic pollutants at levels higher than the U.S. Environmental Protection Agency considers safe for long-term exposure, according to scientists from Oregon State University and the University of Cincinnati. The researchers took air samples in Carroll County, the home of 480 permitted wells––the most in any of Ohio's 88 counties. The team found chemicals released during oil and gas extraction that can raise people's risk of cancer and respiratory ailments. Researchers caution they don't want to create undue alarm with their findings, but they say they hope the results will highlight the urgent need to conduct more in-depth studies of fracking emissions and the potential effects on human health. "What we see here suggests that more needs to be known about the risks people face when exposed," said study co-leader Erin Haynes, a University of Cincinnati scientist. Haynes' co-author on the study agrees. "You can't extrapolate to every situation, but the findings in our study might give one pause to want more information on air quality if they were living near these kinds of operations," said Kim Anderson, an environmental chemist with OSU’s College of Agricultural Sciences.
Athens to join multi-county talks about injection wells - Athens County will send a representative to a meeting of other county officials in Ohio looking to discuss making a push to change laws regulating oil-and-gas waste injection wells. Meanwhile, in neighboring Meigs County, a group of anti-fracking activists has launched a campaign petitioning voters for formation of a charter county government to go on the ballot in November. A similar effort is being proposed in Athens County, where activists are hoping that by changing to a charter form of government, the county can assert home rule in unincorporated areas and ban the dumping of oil-and-gas hydraulic fracking waste as well as use of water from sources in the county for fracking activities. The Athens County Bill of Rights Committee is a countywide version of the city of Athens' Bill of Rights Committee that last year proposed a citywide ban on all oil and gas/fracking activities, which passed in November with 79 percent of the vote. Recent Ohio court decisions, including a pivotal Ohio Supreme Court decision earlier this year, have backed up the state of Ohio and drilling industry's contention that the state has primacy over oil and gas regulation, basically stating, "what the state allows, local government can't prohibit." That is part of the impetus for the meeting between various county officials, with the Youngstown Vindicator reporting last week that officials from Trumbull, Ashtabula, Mahoning, Stark, Portage, Meigs and Morrow counties have been invited to the summit.
Company plans to begin barging frack waste soon - Athens NEWS - A Texas-based company looking to barge deep-shale drilling waste to an off-loading facility in Meigs County on the Ohio River is planning to start operations this coming September. But so far, the U.S. Coast Guard has not given GreenHunter Resources Inc. permission to barge the type of frack waste the company tells its investors it intends to barge, and the U.S. Army Corps of Engineers has expressly forbidden it. Despite this, the company now says it will start doing so this fall. At issue are two different types of fracking waste, one known as legacy fluid, which is associated with traditional oil and gas wells, and the other is what the Coast Guard calls shale gas extraction waste water (SGEWW), which comes from the new deep-shale, horizontal hydraulic fracturing wells. GreenHunter appears prepared to argue that its approval to barge "oil-field waste" from the Coast Guard and handle "legacy waste" at its offloading terminal means that it's allowed to do so with the wastewater from horizontal hydraulic fracturing operations. This would distinguish it from waste materials from the shale gas extraction wastewater (SGEWW) on which the Coast Guard has not yet made a determination and the Army Corps has explicitly forbidden. Earlier this week, Marcellus Drilling News, reporting GreenHunter's intentions to start operating in September, called the Meigs County facility the "centerpiece" of the company's strategy. "Using the USCG's own rules and regulations against them, GreenHunter said current regulations issued in 1987 give them the right to barge brine right now," MDN reported. "And they intend to do so as soon as they have a facility built to load the barges… Although a war of words has gone back and forth, GreenHunter has not backed down." The company's Mills Hunter Facility off-loading complex, once built, company officials said, would double the company's injection capacity at its Meigs facility from 14,500 42-gallon barrels per day to about 30,000. GreenHunter has two injection wells operating at the Mills Hunter facility, and plans to have six
Fulton Co. board asks for tests of water wells — The Fulton County Board of Health wants NEXUS Gas Transmission to incur the cost of testing water wells before, during, and after construction in the highly fragile Oak Openings region if the company does not re-route its proposed 250-mile pipeline to avoid it. In a new filing with the Federal Energy Regulatory Commission, the county health board said NEXUS should be required to pay for testing an undefined number of wells if it remains committed to pumping natural gas through Oak Openings, a globally rare oak savanna region in Lucas, Fulton, and Henry counties. Groundwater levels are high and more susceptible to pollution in the Oak Openings region because pollutants can pass easily through permeable sand aquifers. In a recent interview, Kim Cupp, Fulton County health commissioner, told The Blade she believes it will be virtually impossible to keep water wells from being polluted in the Oak Openings region, even during construction. The board’s latest filing said collecting baseline and follow-up data is necessary to show “any impacts to the water supplies utilizing the shallow unconfined aquifer associated with the pipeline construction and utilization.” NEXUS has reportedly told some property owners it is in the process of re-routing the project away from Oak Openings, but it has not confirmed that and is not scheduled to finalize the route until this fall.
Oil and gas industry fighting back on possible tax increase - Columbus Dispatch: The American Petroleum Institute has started running statewide radio ads and making robo-calls this week in hopes of beating back an anticipated fracking tax proposal by Senate Republicans. Senate President Keith Faber, R-Celina, has said an increased severance tax on shale fracking is likely to be included in the Senate-passed version of the two-year, $71.5 billion budget. The Kasich administration also has expressed some confidence that the Senate will propose a “fair” tax. “We’ve been told directly from the state Senate that they’re going to increase taxes on our industry, regardless of the concerns we’ve tried to communicate with them,” said Chris Zeigler, executive director of the American Petroleum Institute – Ohio, which represents a number of large oil and gas companies. As oil and gas is taken from the ground across eastern Ohio, state leaders have spent the last three-and-a-half years kicking around proposals to increase Ohio’s 20 cents per barrel severance tax – a rate that Gov. John Kasich calls “unconscionable.” In his initial budget, Kasich proposed a 6.5 percent tax on oil and gas sold at the wellhead, and a 4.5 percent rate on natural-gas liquids, such as ethane and butane. The tax was part of a package that included a 23 percent income tax cut. The House pulled Kasich’s severance tax proposal out of the two-year budget, arguing it was too aggressive and could stifle an industry that was struggling from low prices. Some House leaders also don’t want to see so much severance tax money used for an income tax cut. Legislative Republicans have repeatedly rebuffed Kasich’s severance tax proposals.
PDC may start drilling in the Utica again - After suspending its oil and gas drilling operations in December of last year, PDC Energy Inc. announced it may resume work sooner than planned. PDC suspended its oil and gas operations in Ohio’s Utica Shale formation due to better economics in the shale field located near its “home” in Denver. However, now that the company has received positive feedback from the wells it had already drilled in the Utica, it’s considering bringing back operations to the region sooner rather than later. According to the Columbus Business First, while speaking with analysts, PDC explained “its Dynamite well pad in southeastern Guernsey County is outperforming cost and production projections.” PDC’s Senior Vice President of Operations Scott Reasoner said the well continues to surprise the company. PDC also has “high hopes” for a well that is just north of the Dynamite pad which is ready to begin production. As reported by the Columbus Business First, “PDC today focuses on the Wattenberg field in central Colorado. It has said that oil prices would need to hit between $70 and $80 a barrel to consider moving rigs to the Utica again. They’re in the high $50s now.” While speaking with analysts, PDC was asked if the company’s Utica wells were producing better at lower oil prices, would it consider moving its target price closer to $70. CEO Bart Brookman answered analysts with the following: We would like oil in that mid-$60s, maybe high-$60s (mark) when we really start looking at this and saying it begins to compete with the middle core area of the Wattenberg field.
Utica and Marcellus well activity in Ohio - Activity in the Utica and Marcellus shale formations in Ohio have both seen very little change, if any, change when compared to last week’s well activity update. However, one well in Ohio isn’t exactly producing like it was hoped to. The idea of waterless fracking excited the entire oil and gas industry, but now it may not be the light at the end of the tunnel for fracking. EV Energy Partners LP and eight other companies joined forces with GasFrac Energy Services and drilled a waterless fracking test well in Tuscarawas County, Ohio. Last week, the well had officially been producing for 90 days, but its production wasn’t even close to its neighboring well. The Nettles test well produced about half the amount of oil when compared to the well next to it. The following information is provided by the Ohio Department of Natural Resources and is through the week of May 9th.Activity in the Utica Shale formation in Ohio has had a few slight changes when compared to last week’s update. According to this week’s report, 423 wells were permitted, 565 drilled, 861 producing, 13 inactive, 24 in final restoration and 3 abandoned. This brings the total number of wells in the Utica to 1,889. The Marcellus Shale in Ohio has zero change reported when compared to last week’s well report. The area is still sitting at 15 wells permitted, 13 drilled, 14 producing and one well inactive. There are a total of 43 wells in the Ohio Marcellus Shale.
Marcellus permit activity in Pennsylvania - Permit activity in the Marcellus Shale formation in Pennsylvania saw a downturn in permits over the last week, but the forests in Pennsylvania may have a chance at an upturn. It has been seven years since natural gas development began in the Marcellus Shale formation, and since then gas companies have made little to no effort to restore Pennsylvania’s state forests that have been impacted by natural gas operations. There is a total of 1,700 acres of forest that need to be restored, and scientists from Penn State, along with Pennsylvania State foresters, have decided now is the time an effort is to be made to rebuild the land. Kelly Sitch, a botanist with the Department of Conservation and Natural Resources (DCNR), is one of many who are trying to find a way to restore land that has been impacted by natural gas projects. Sitch has spent several hours in the woods and has also studied how gas operations have changed the landscape of Pennsylvania. As of now, the team has planted an assorted variety of grasses, legumes and various wildflowers in the different soil mixtures. On the outer edges they have planted different types of trees and shrubs. The following information is provided by the Pennsylvania Department of Environmental Protection and covers May 11th through May 17th. New: 4 Renewed: 10
Wolf, business leaders, clash over proposed natural-gas tax -- Gov. Tom Wolf clashed Monday with a coalition of more than a dozen business groups that is trying to derail his proposed severance tax on natural-gas drilling, charging that they are putting gas and oil interests ahead of the schools and children that Wolf says will benefit from his plan. “We cannot keep doing the same thing and expecting different results in Pennsylvania,” Wolf said in a response to the coalition led by the Pennsylvania Chamber of Business and Industry. “Now is the time to do big things in Pennsylvania.” In a letter to Wolf and members of the Legislature last week, the coalition said the natural gas industry has helped create about 200,000 jobs, paid more than $2 billion in various state taxes since 2008 and reduced energy costs across the state. “A higher severance tax would drive our fastest-growing industry out of the state,” said chamber President Gene Barr. Said Dave Taylor, president of the Pennsylvania Manufacturers Association, also a coalition member, “If state government wants more middle-class jobs, economic growth and long-term tax revenue, we should optimize conditions for continued growth, not punish this emerging industry with higher taxes.” Pennsylvania is the only major gas-producing state without a severance tax. Wolf has proposed a 5 percent tax on the value of the gas extracted from the Marcellus Shale formation plus a flat fee of 4.7 cents per unit of gas and a pricing “floor” that would ensure extra revenue when gas prices hit rock bottom.
Scroggins is at it again - Anti-fracking activist Vera Scroggins is at it again, only this time facing felony charges. Scroogins’ most recent violation is a bit more serious than stepping too close to a Cabot Oil & Gas site. This time the anti-fracking activist is facing six felony charges for recording a lawyer and his secretary without their permission. Scroggins’ actions violate Pennsylvania’s wiretapping laws. As reported by State Impact Pennsylvania, “The charges stem from a 2013 incident in which Scroggins was denied an application to have her anti-fracking group participate in the town’s Fourth of July parade.” In the criminal complaint, which was filed this week, Craig Stevens, also an activist, and Scroggins visited the parade chair, Attorney Laurence Kelly requesting an application for the parade. While doing so, Scroggins recorded Kelly and his secretary, who had no knowledge of the recorder until the conversation ended. Scroggins claims her camera was visible for the duration of the conversation and made the following comment: I have a 3 minute, 20 second video talking to him … He refused to let us in the parade and said we’re too controversial because we’re anti-fracking. He said, ‘You’re recording this without my permission. It’s against the law.’ While the six felony charges are Scroggins’ most severe charges yet, this is not her first go around with the court system. For years she has been in a legal war with Cabot Oil & Gas. According to Scroggins, the legal battle between her and Cabot is strictly political, and are out to get her. She believes the felony charges are “the latest little scheme,” and that lawyers, the DA and gas industry have a “club” in the county.
It’s Time to Stop FERC’s Rubber Stamping of Fracking Infrastructure Projects --“If someone is upset with fracking, they should probably talk to the states.” —Norman Bay, Chairman of the Federal Energy Regulatory Commission (FERC), May 14, 2015. FERC has more to do with fracking than any other federal agency, and much more than any one state. They approve interstate pipelines to carry fracked gas, compressor stations to push the gas along, storage terminals to store it and, for the last two years, export terminals to ship it around the world. Without this infrastructure, fracking wouldn’t be happening. Norman Bay is not stupid. He knows this. And yet, because FERC has been a target of nonviolent direct action for more than 10 months, organized by Beyond Extreme Energy (BXE), and because BXE is planning a return to FERC from May 21-29, he has been thrown off, saying and doing things that have not been helpful to resolve “the situation” they are now in. Bay made this ridiculous statement on the day that FERC had its monthly public meeting. But it was not held on the regular third Thursday of the month that it has been held for years and years. Bay and his fellow FERC Commissioners canceled it because of a disingenuous concern, they said, for “the safety of FERC staff and the public” in the face of BXE’s publicly-announced plans to take nonviolent action at FERC on that day.To add insult to injury, on May 14, the day that this meeting was rescheduled, dozens of members of the public were kept from the room where the “public” meeting was held, six were detained by Federal Protective Services police and three were arrested.
Court blocks pipeline eminent domain - A Kentucky appeals court has upheld a ruling that prevents the developers of the Bluegrass Pipeline from using the power of eminent domain to purchase property easements. And the Louisville attorney who has been representing a group of Kentucky landowners fighting Bluegrass said the ruling is broad enough to apply to another controversial pipeline that seeks to carry hazardous natural gas liquids through Kentucky from fracking zones in Ohio and Pennsylvania to the Gulf Coast. That's the proposed re-purposing of Kinder Morgan's existing Tennessee Gas pipeline. These companies, including Oklahoma-based Williams company, the Bluegrass Pipeline developer, "will have to deal with landowners on a willing seller, willing buyer basis," said the attorney, Tom FitzGerald, director of the Kentucky Resources Council. He said it will also preclude Kentucky oil and gas producers from using the threat of eminent domain to site gathering lines and wells. Williams spokesman Tom Droege did not immediately return a request for comment late Friday afternoon, nor did representatives of the Kentucky Oil and Gas Association, which has been following the case. The Court of Appeals ruling issued Friday agreed with Franklin Circuit Judge Phillip Shepherd that only pipeline companies that are or will be regulated by the state's Public Service Commission can use the courts to force a purchase of property or easements."In addition, the (natural gas liquids) in Bluegrass's pipeline (would) be transported to a facility in the Gulf of Mexico," the judges wrote. "If these NGLs are not reaching Kentucky consumers, then Bluegrass and its pipeline cannot be said to be in the public service of Kentucky."
Local activists say fracking poses threat to Fayette County's water - Water, water everywhere, and not a drop to drink. That’s what’s going on in the Lochgelly area of Fayette County, according to local activists. To warn the public about the danger to their water, a meeting took place Saturday at the Historic Oak Hill School in Oak Hill. “Water is being compromised by hydrofracking (hydraulic fracturing) waste being dumped into abandoned mines,” Tom Rhule said. “We know it’s being done because they got caught. Coal slurry was being mixed with fracking waste and injected into underground mines.” According to Rhule, a local construction firm, Danny Webb Construction, lost its permits to store the waste from hydraulic fracturing, a process used to pull natural gas from deep below the earth. “There’s no permits and no waiver for the storing of this waste,” Rhule said. “According to Fayette County’s Source Water Assessment Report, underground mines in some locations are being used to dispose of fracking waste.” The problem is that the mines are near water sources, like Wolf Creek and the New River, Rhule said. “The DEP is permitting the waste to be put into abandoned mines,” he said. “I know from talking to DEP officials. I’m currently trying to get a FOIA request submitted to get definitive proof.”
New York's Fracking Ban --From the report on the NY fracking ban: High-volume hydraulic fracturing "raises new, significant, adverse impacts not studied" in the state's last major analysis of oil and gas development in 1992, the 2,000-page report concludes. The negative effects that fracking could bring to the state include:
- — Air impacts that could affect respiratory health due to increased levels of particulate matter, diesel exhaust or volatile organic chemicals.
- — Climate change impacts due to methane and other volatile organic chemical released into the atmosphere.
- — Drinking water impacts from underground migration of methane and/or fracturing fluid chemicals associated with faulty well construction or seismic activity.
- — Surface spills potentially resulting in soil, groundwater and surface water contamination.
- — Surface water contamination resulting from inadequate wastewater treatment.
- — Earthquakes and creation of fissures induced during the hydraulic fracturing stage.
- — Community impacts such as increased vehicle traffic, road damage, noise, odor complaints,and increased local demand for housing and medical care.
Issued by the Department of Environmental Conservation, the "Final Supplemental Generic Environmental Impact Statement" took more than six years to produce, as public comments on drafts and the burgeoning literature on the various effects of fracking led to repeated revisions of the study.
Frack Action Petition to Re-do the sGEIS - The NYS Department of Environmental Conservation (DEC) released the final fracking review this past Wednesday. This is the next step for New York to finalize the ban on high-volume hydraulic fracturing, which was first announced by the DEC, Department of Health, and Governor Cuomo on December 17th, 2014. While the final review sets the stage for the ban on high-volume fracking, it’s the forthcoming “Findings Statement” that will implement the ban. While we are carefully reading the final review and awaiting the Findings Statement, we wanted to share this news, some information about the process, as well as the ban’s permanence. The final review (read it here) is called the Final Supplemental Generic Environmental Impact Statement, or Final SGEIS. Hundreds of thousands of New Yorkers commented on prior iterations of this document years ago, overwhelmingly raising the harms of fracking and calling for a ban. The Final SGEIS is approximately 2,000 pages long. By law, the Department of Environmental Conservation must wait at least a minimum of ten days from the release of the Final SGEIS, before issuing a final Findings Statement. The Findings Statement will be the document with which the DEC can legally ban high-volume fracking. Of course, a different governor could take a different approach. But at least while Andrew Cuomo is governor, we have every reason to believe that the ban is going to remain in place. Unfortunately, we do know that the oil and gas industry will do everything in its power to destroy the ban. All this being said, there is every reason for our movement to remain intact and vigilant.Please sign our petition to DEC Commissioner Martens and Governor Cuomo calling for the Findings Statement to have the strongest possible language instituting the ban.
Indian Point Fire Raises Huge Concerns Over Siting of Spectra Pipeline --For over a year, local, county, state and federal elected officials, as well as the public, have joined the calls by pipeline, nuclear power and medical disaster and safety experts for a full independent risk assessment of the siting of a massive new gas pipeline 105 feet from vital structures at the aging nuclear plant. In fact, Westchester, Rockland and Putnam counties and several municipalities passed resolutions last year calling for independent health and risk assessments and other protective measures prior to any decisions about the pipeline that were dismissed by the Federal Energy Regulatory Commission (FERC). Both FERC and the Nuclear Regulatory Commission (NRC) signed off on the project despite numerous unresolved questions and unverifiable claims made by Entergy, the nuclear power plant’s operator, in its own internal analysis of the safety of the plant in connection with the risk posed by Spectra Energy’s Algonquin Incremental Market (AIM) high pressure gas pipeline. The transformer fire last week dramatically demonstrates that a comprehensive, independent and transparent risk assessment must be implemented immediately and the findings fully addressed before the pipeline company takes further action. NRC and FERC approvals for the AIM project warrant immediate retraction in the absence of a thorough independent risk analysis. Rick Kuprewicz of Accufacts, a renowned pipeline expert, and Paul Blanch, a nuclear power expert with more than 45 years of nuclear safety experience,analyzed the Entergy hazard study that was confirmed by the NRC, and believe the analyses severely underestimate the risk of catastrophic failure at the plant in the event of a pipeline rupture. Kuprewicz said, “in the event of a pipeline rupture in this sensitive location, the system dynamics will substantially delay the recognition and appropriate shutoff and responses such that the gas will explode and burn for quite a period of time.”
Warren woman arrested for tree-sitting protest of pipeline — A 26-year-old Warren woman has been arrested for a tree-sitting protest of a proposed natural gas pipeline expansion. Sherrie Anne Andre was charged Tuesday afternoon with trespassing, resisting arrest, obstruction and disorderly conduct. Andre had suspended a wooden platform in the tree near a Spectra Energy compressor station in Burrillville early Tuesday. Police say she was in the tree for about five hours. Andre is a member of Fighting Against Natural Gas, or FANG. The group says the tree is on land that would be cleared if the gas compressor station were upgraded to expand the Algonquin pipeline, which brings natural gas to New England from shale formations.
Tokyo Gas targets more U.S. shale gas investments -exec - Tokyo Gas Co Ltd, Japan’s biggest gas utility, is looking to invest in more U.S. shale gas production as a hedge to liquefied natural gas (LNG) imports from the United States to start next year, a company executive said on Monday. The company has inked contracts to buy 1.9 million tonnes per year (tpy) of LNG from U.S. producers and aims to invest in an equal volume in the upstream sector, said Shigeru Muraki, a board member and executive adviser at Tokyo Gas. “We try to expand our investment in the shale gas production in the United States. That can be the natural hedge for LNG,” he told reporters on the sidelines of an industry conference. The company has contracted to buy 1.4 million tpy of U.S. LNG from the Cove Point project, which will start shipments in the second or third quarter next year, and 0.5 million tpy from Mitsui & Co’s Cameron project, he said. In 2013, Tokyo Gas bought a stake in a shale gas field in Texas’ Barnett Basin from Quicksilver Resources that would give it 0.35 million to 0.5 million tpy of gas output. Companies seeking to attract investments in U.S. shale projects are offering terms that could work even after oil prices fell, he said, citing a project proposed last month in Houston that would yield fixed revenue of $11 per million British thermal units (mmBtu) for deliveries by ship to Asia.
Judge temporarily halts fracking approvals in North Carolina - A judge has halted the approval of fracking operations in North Carolina until a higher court weighs in on the legality of the appointment of several boards that manage state resources and the environment.Wake County Superior Court Judge Donald W. Stephens’ decision earlier this month prevents the Mining and Energy Commission from approving drilling units for hydraulic fracturing until the state Supreme Court decides a separate case regarding how the state panels are formed. No drilling units had been approved before the judge issued his order. Stephens issued a preliminary injunction that stops the commission from accepting or processing applications for drilling units for hydraulic fracturing, or fracking. The process involves injecting water, sand and chemicals to break apart underground rocks so oil and gas can escape. Stephens also delayed proceedings in the lawsuit filed against the state’s Mining and Energy Commission pending the other case’s outcome. The state’s highest court will hear arguments in late June on the separate lawsuit by Gov. Pat McCrory and two of his predecessors that challenged how several other state commissions were appointed. A panel of judges sided with McCrory earlier this year in striking down the way lawmakers appointed those boards, and the decision was appealed to the high court.
Judge Says No to Fracking -- A judge in North Carolina has blocked the start of fracking in that state over a challenge to the membership of the commission charged with issuing the permits.“Finally some good news in our long battle to keep fracking out of NC!” exulted North Carolina environmental nonprofit Haw River Assembly, one of the parties to the lawsuit, on its Facebook page. The Southern Environmental Law Center (SELC) was granted the preliminary injunction it sought in Wake County Superior Court to delay the state’s Energy and Mining Commission from taking any action on permits, effectively reinstating (for the time being) the state’s longtime moratorium on fracking which was lifted by the legislature last summer. The group was representing the Haw River Assembly, a member of the Waterkeeper Alliance network, and landowner Keely Wood Puricz, whose property abuts a tract leased for natural gas exploration. The dispute revolves around what SELC and the parties it represents see as an unconstitutional attempt by the state legislature to control the commission and violate the state’s separation of powers. After establishing the commission in 2012, it gave itself the power to appoint eight members to the governor’s five. Governor Pat McCrory, along with two former North Carolina governors, is challenging the practice in a separate lawsuit. The legislature used the same tactic to keep control of the state’s Coal Ash Commission, Oil and Gas Commission, and North Carolina Mining Commission.
Oil Billionaire Wanted University Scientists Dismissed For Linking Fracking Activity To Earthquakes -- Despite a growing body of scientific research connecting oil and gas activity to a dramatic spike in earthquakes across several U.S. states, some industry leaders are fighting this characterization. Harold Hamm, billionaire CEO of Oklahoma City-based Continental Resources, told a dean at the University of Oklahoma last year that he was so displeased by the university’s research on the topic that he wanted certain scientists dismissed, Bloomberg News reported. In an email to colleagues dated July 16, 2014 and obtained by Bloomberg, Larry Grillot, the dean of the university’s Mewbourne College of Earth and Energy, said that he had met with Hamm, a major donor to the university, to discuss his concerns about earthquake reporting by the Oklahoma Geological Survey (OGS), which is housed in the university. “Mr. Hamm is very upset at some of the earthquake reporting to the point that he would like to see select OGS staff dismissed,” Grillot wrote, adding that Hamm indicated he would be meeting with Oklahoma Gov. Mary Fallin (R) to discuss moving the OGS out of the university. OGS seismologist Austin Holland was summoned to meet with Hamm and university president David Boren in late 2013 to discuss some of his findings linking fracking activity to earthquakes. In an interview with EnergyWire published earlier this week, Hamm denied any attempt to bully the scientist: “We care about the industry,” he said. “When people disparage parts of it, I want to know why. I want to know what basis they have for doing that.”
Billionaire Oil CEO Demands Scientists Fired After Oklahoma Quake Study -- The billionaire CEO of Continental Resources told a dean at the University of Oklahoma that he wanted earthquake researchers fired. In one of the most transparently oligarchic tactics we have seen yet during this 'recovery', oil tycoon Harold Hamm demanded certain scientists be dismissed following their findings that fracking wastewater disposal was the cause of the spike in Oklahoma earthquakes. Despite his protestations recently that "I don't try to push anyone around," as the following email obtained by Bloomberg, exposes, "Mr. Hamm is very upset at some of the earthquake reporting to the point that he would like to see select OGS staff dismissed." As we noted previously, no matter what other problems may or may not be linked to hydraulic fracturing, or fracking, the disposal of wastewater from oil and gas drilling almost certainly is primarily responsible for the recent spate of earthquakes in Oklahoma, normally a seismologically quiet state. That’s the conclusion of a report issued April 21 by the Oklahoma Geological Survey (OGS), in which the state geologist Richard D. Andrews and Dr. Austen Holland, the state seismologist, said the rate of earthquakes near major oil and gas drilling operations that produce large amounts of wastewater demonstrate that the quakes “are very unlikely to represent a naturally occurring process.” Andrews and Holland concluded that the “primary suspected source” of the quakes is not hydraulic fracturing, or fracking, in which water and chemicals are injected under high pressure to crack shale to free oil and gas trapped inside. It said the source is more likely the injection of wastewater from this process in disposal wells, because water used in fracking cannot be re-used.
Permian gets shaken up by earthquake -- Earthquakes are becoming more and more frequent these days in oil regions of the U.S., including the Permian Basin. U.S. Geological Survey (USGS) officials have confirmed that a 3.1 magnitude earthquake shook the ground in the Permian Basin. The earthquake took place off of Highway 285, north of Fort Stockton on Sunday at 4:16 pm. There have been no injuries or damages reported. According to USGS data, this earthquake is the fourth on to take place in the Permian this year. What is causing the earthquakes to occur so frequently is still being debated. As reported by the San Antonio Business Journal, “Three earthquakes were recorded in the same area in late March and early April while similar earthquakes have been reported in the Dallas-Fort Worth Metroplex and south of San Antonio in the Eagle Ford Shale region.” On Monday, a 3.3 magnitude quake was recorded. At 1:14 pm, just 3 miles south-southwest of Farmers Branch, the USGS confirmed the quake. Last Thursday, the USGS also confirmed a 4.0 magnitude quake in the Mexican state of Coahuila. Studies from all over the nation are linking the cause of the earthquakes to disposal wells. The wells consist of salty wastewater from oil and natural gas drilling. However, the debate over the cause of the earthquakes has two sides. Steve Everley from Energy In Depth, which is funded by the oil industry, explained that he is skeptical about the models that were used during the studies, specifically studies conducted by the USGS and Southern Methodist University.
South Texas oil well explodes, prompting evacuations — A South Texas oil well exploded, spewing toxic hydrogen sulfide gas that forced the evacuation of several nearby homes. The Karnes County Sheriff’s Office says The explosion happened Tuesday afternoon off Farm Road 792 about four miles east of Karnes City. Sheriff Dwayne Villanueva said the well pump that exploded was shut off but hydrogen sulfide gas still escaped. A statement from the well owner, Encana Corp., said no injuries were reported from the 3:30 p.m. incident. Hydrogen sulfide is a flammable, colorless gas that smells like rotten eggs. At high levels, exposure can be lethal.
Area near natural gas blowout closed to residents, travelers - A white cloud of natural gas continued to spew from an Encana well in Karnes County on Wednesday. About 20 people were evacuated from their homes as a precautionary measure, Karnes County Sheriff Dwayne Villanueva said. The residents were moved to La Quinta Inn & Suites, where they remained Wednesday. The blowout began about 3:30 p.m. Tuesday at a well located near the intersection of Farm-to-Market Road 792 and County Road 343, about four miles east of Karnes City, according to a statement from Encana. Workers were attempting to place tubing in the hole when a pressure buildup forced the tubing out of the hole, according to an incident report from the Railroad Commission of Texas. Water and gas shot 30 feet above the rig floor, according to the report. Natural gas spewing from the well appeared to be traveling northwest, Villanueva said. Encana is monitoring the site for hydrogen sulfide, a colorless gas with a rotten egg smell, according to the company’s statement. Hydrogen sulfide can cause irritation of the eyes, nose, throat and respiratory system, and in high concentrations, it can cause unconsciousness, coma and death.
US states seek to block city fracking bans - FT.com: US cities that want to ban fracking are clashing with oil-friendly state governments trying to stop municipal policy makers from outlawing shale energy production. While the US and Saudi Arabia vie for dominance in the global oil market, the fracking battles highlight American shale’s vulnerability to domestic political barriers that are inconceivable in Riyadh. On Monday, Greg Abbott, the governor of Texas, is expected to sign into law a bill that denies cities the right to impose fracking bans, which he compares dismissively to prohibitions on plastic bags. The bill gives cities the authority to engage in “commercially reasonable” regulation of above-ground activity such as traffic and lighting, but no authority over drilling and fracking. Lawmakers in other states are also looking for ways to prevent or deter assertions of local control, as the oil industry warns that bans choke the economy and create an unmanageable patchwork of rules. Anti-ban moves are sparking outrage among residents, who are worried about earthquakes and pollution linked to shale oil and gas extraction and say that cities’ rights to self-determination are being threatened. Conflict over local control has flared in Oklahoma, Colorado, Pennsylvania and New York.
Texas Prohibits Local Fracking Bans - WSJ: —Last year, a city in North Texas banned fracking. State lawmakers want to make sure that never happens again. On Monday, Republican Gov. Greg Abbott signed a law that prohibits bans of hydraulic fracturing altogether and makes it much harder for municipal and county governments to control where oil and gas wells can be drilled. Similar efforts are cropping up in states including New Mexico, Ohio, Colorado and Oklahoma, where both chambers of the legislature have passed a bill that limits local governments to “reasonable” restrictions on oil and gas activities. This is all part of a broader legislative and judicial effort, backed by the oil industry, to limit local governments’ ability to regulate drilling. Backers say that both the Oklahoma and Texas bills were proposed in response to a voter-approved ban on fracking in Denton, Texas, in November. One of the authors of the Texas bill said his motivation was to protect an economically important industry. “Oil is a huge job driver for the state of Texas,” The new law eliminates a “patchwork of local ordinances creating more and more regulation, some of which is intentionally onerous and intended to stop or limit oil and gas development,” said Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association. The law has angered officials in Denton, about 50 miles northwest of Dallas, where residents approved the first ban in the state. Officials there said they supported it only after failed efforts to resolve quality-of-life problems including a well explosion and noisy drilling near homes and schools.
Local ban nullified by state, fracking resumes in Denton | bakken.com: — A North Texas city whose fracking ban prompted lawmakers to limit such local power says a driller has revealed plans to resume fracking gas wells in the city. According to documents obtained through an open records request, the Denton Record-Chronicle (http://bit.ly/1IQ9kPl ) reports Vantage Energy notified the city early Tuesday of its plans to begin fracking on Denton’s west side, beginning next Wednesday. The notice came the morning after Gov. Greg Abbott signed House Bill 40 into law Monday afternoon, limiting local authority to restrict fracking. During last November’s election, Denton voters banned fracking within the borders of the city of about 125,000 residents, eliciting immediate vows by oil and gas drillers to topple that ban. The state and the drillers filed lawsuits challenging the ban in court, and the Legislature fulfilled the drillers’ vows last week. The Denton ban remains on the books, but Mayor Chris Watts says the new state law likely renders it unenforceable and would likely stymie any effort to block Vantage plans to finish its gas wells. “It’s my understanding we don’t plan on seeking an injunction,” Watts told the Record-Chronicle. As for the lawsuits still on the court dockets, city officials will be discussing those soon, Watts said.
The Frackettes - 'The Death of Democracy' - YouTube (musical parody, Denton troupe)
Banning Fracking Bans: The Paradox of Local Control - Center for Effective Government --There is a new paradox emerging in the fracking debate. The oil and gas industry firmly opposes federal fracking standards, claiming that states know best how to govern their own lands. States are currently responsible for the majority of industry oversight, and rules can vary significantly among them. But this staunch support for local control doesn’t extend to counties and cities. At least, it doesn’t when those locals are not interested in having fracking in their backyard. Drilling companies have supported state efforts to strip communities of their rights to ban fracking and repeatedly challenged local fracking bans and restrictions in court. The justification? Local restrictions lead to a "patchwork of regulations" that inhibits industry growth. Of course, differing state standards also create a patchwork of policies, but oil and gas companies don’t mind this because most states have rules or practices that favor the industry. Local control is championed until industry profits are at stake. What the oil and gas industry actually wants is “industry control.” Four state legislatures introduced bills this spring that would prevent local communities from regulating fracking, and other states have taken recent action against local control:
- Texas Governor Greg Abbott signed a bill that prohibits communities from voting to ban fracking. The law also blocks any local rules that deal with subsurface activity or prevent drilling from taking place.
- The same week that Oklahoma’s government acknowledged that fracking is linked to the surge in earthquakes, state lawmakers passed two bills to limit cities and counties from directly regulating the oil industry. One of these bills would make ordinances that limit fracking a theft and would enable owners of mineral rights to seek monetary compensation. Both bills now go to Governor Mary Fallin for signature.
- Additional bills in Florida and New Mexico would have prevented communities from banning fracking, but they failed to advance. A Colorado bill that would have made communities liable for lost mineral royalties due to fracking bans also failed.
- The Ohio Supreme Court ruled last February that municipalities cannot restrict drilling practices if the state allows them.
- Oil and gas companies in Colorado sued in court to overturn at least three local fracking bans.
Oil groups ask court to temporarily block U.S. fracking rules – Two oil and gas groups have asked a federal court to block the implementation new U.S. rules for hydraulic fracturing on public lands until their lawsuit challenging the regulations is resolved. The Independent Petroleum Association Of America (IPAA) and the Western Energy Alliance filed a motion on Friday for a preliminary injunction to prevent the Interior Department’s Bureau of Land Management from enforcing the regulations, arguing the standards will cause their members irreparable harm. The regulations, finalized in March, would require companies to provide data on the chemicals used in hydraulic fracturing, or fracking, and to take steps to prevent leakage from oil and gas wells on federally owned land. They do not cover wells on private land. Fracking, involves the injection of large amounts of water, sand and chemicals underground at high pressure to extract fuel. In their filing with the U.S. District Court for the District of Wyoming, the oil trade groups said the fracking regulations display a “misunderstanding” of the technical aspects of oil and gas production. The groups said the Bureau also failed to properly account for the economic consequences of the rules.
Oil, gas spill report for May 17 -The following spills were reported to the Colorado Oil and Gas Conservation Commission in the past two weeks.
- KP Kauffman Company Inc. reported on May 12 that heavy rain caused condensate from excavated soil to wash into an excavated area that had been prepared to repair a damaged flowline, outside of Fort Lupton.
- Encana Oil & Gas (USA) Inc. reported on May 12 that it appears that an inattentive oil hauler was loading out condensate from a location outside of Longmont. It is approximated that less than five barrels of condensate released.
- Kerr McGee Oil & Gas Onshore LP reported on May 11 that a line over-pressurized, due to the failure of a kill switch on a pumping unit, outside of Berthoud. It is approximated that one barrel of oil was released outside of containment and onto the ground surface.
- Noble Energy Inc. reported on May 11 that a tank overflowed when production was being switched between two tanks, outside of LaSalle. It is approximated that 80 barrels of oil released inside the falcon steel ring liner.
- DCP Midstream LP reported on May 11 that a DCP owned valve sprayed condensate into the air, due to an unexpected shutdown of a compressor station, outside of Keenesburg. Three to five acres of grass were affected and will be sprayed with a Terradis SW Bioserfactant to eliminate hydrocarbons. Soil samples will be drawn after five to seven days to assure compliance with COGCC standards.
- EOG Resources Inc. reported on May 8 that approximately three to four barrels of oil spilled onto the well pad, when a polish rod liner failed, outside of Grover.
- Kerr McGee Oil & Gas Onshore LP reported on May 7 that a tank overflowed, outside of Fort Lupton, during well completion activities, because of a kinked hose on the manifold, which prevented the fluids from equalizing into a separate tank. It is approximated that eight barrels of produced water and two barrels of oil released onto lined containment.
- PDC Energy Inc. reported on May 7 that while a pumper was changing a thermoweld on a separator, approximately one barrel of crude oil was spilled, outside of secondary containment, outside of Ault. When the thermoweld was removed, oil began to escape the containment.
- Noble Energy Inc. reported on May 6 that during operation outside of Gill, a leak occurred at a produced water vault and produced water line. It is approximated that less than five barrels of condensate spilled.
- Noble Energy Inc. reported on May 6 that a contract operator left the drains unattended, outside of Raymer. It is approximated that 115 barrels of oil and water were released inside ring and lined containment.
- DCP Midstream LP reported on May 6 that a personnel responded to a call about a potential leak that was then traced to an area where vegetation was dying, near the subdivision of Eaton Commons in Eaton.
- Noble Energy Inc. reported on May 4 that a small hole was discovered in a produced water vault, outside of Raymer. It is approximated that 32 barrels of produced water spilled.
Oil Slick Blackens Refugio State Beach in Santa Barbara County; Coast Guard Responding -- Emergency officials and the U.S. Coast Guard were responding to an 4-miles-wide oil slick off the coast of Refugio State Beach in Santa Barbara County on Tuesday. Multiple local news outlets reported a pungent smell from spilled oil on the popular beach about 20 miles west of downtown Santa Barbara. U.S. Coast Guard crews were responding to an “unknown sheen” at Refugio, the guard’s Los Angeles/Long Beach office Twitter accountstated. The sheen was from a ruptured pipeline on the shore side that had been “secured,” the Coast Guard office later confirmed in a tweet.County fire and emergency officials were responding to the 4-mile-wide of oil slick, the Coast Guard stated, saying it would oversee cleanup of the oil. The Coast Guard also said in a tweet that Exxon was responding, but ExxonMobil spokesman Christian Flathman said the pipeline was not one of the company’s and the company was not responding. Flathman said he planned to contact the Coast Guard. Houston-based Plains All-American Pipeline was later identified as the “responsible party.” Aerial video from Sky5 showed a large amount of dark oil in the water and on the sand. Workers appeared to be treating a spill in a field on the other side of the 101 Freeway from the beach. At least a quarter-mile patch appeared to be slicking the surface of the ocean water off the beach, aerial video showed. The Santa Barbara Channel was the site of a massive oil spill in 1969 that left the coast darkened with oil, killed thousands of birds and galvanized the environmental movement.
Plains All American Pipeline Ruptures; 21,000 Barrel 4-Mile Oil Slick On Santa Barbara Beaches - Emergency officials and Exxon Mobil were responding Tuesday afternoon to a ruptured pipeline that was leaking crude oil into the ocean off the Santa Barbara County coast, authorities said. The Santa Barbara County office of emergency management has identified the responsible party as Plains All American Pipeline. As The LA Times reports, by 3:45 p.m., the leak had left a 21,000 barrel four-mile-long sheen of oil extending about 50 yards into the waters along Refugio State Beach in Goleta, said U.S. Coast Guard Petty Officer Andrea Anderson. First trains, now pipelines... The ruptured pipeline -- which runs along the coast near Highway 101 -- was first reported to county fire officials about noon. Coast Guard crews arrived and stopped the leak, Anderson said. It's unclear how much oil streamed into the ocean, and officials could not confirm what type of oil had been flowing through the pipeline. As Sputnik reports, According to one of the first responders, the oil was leaking at a rapid rate of “a couple of hundred BMP,” or barrels per minute. Speaking to the Santa Barbara Independent after arriving at the scene, County Fire spokesperson David Zenobi said the leak, which had originated from a broken pipeline on land, had stopped.
Pipeline Ruptures In California, Spilling Thousands Of Gallons Of Oil Into The Ocean -- On Tuesday, a pipeline along the coast of California just north of Santa Barbara ruptured and spilled an estimated 21,000 gallons of crude oil. A significant portion of this oil ended up in the ocean, creating a four-mile-long slick along the coastline. Nearby Refugio State Beach was evacuated, and those on the scene said it smelled “something like burned rubber” and that the spill was “just devastating.” Wildlife has also been impacted. Two whales swam precariously close to the spill on Tuesday and birds have been spotted covered in oil. As the oil slick moves slowly southward toward the city of Santa Barbara and the true environmental costs become clearer, residents are eager to know the cause of the spill. On Wednesday, the Santa Barbara County District Attorney announced the county was reviewing “potentially relevant criminal and civil statutes” related to the spill. The pipeline, built in 1991 to carry about 150,000 barrels of oil per day, was shut down within several hours of rupturing and a culvert was put up to prevent any more flow into the ocean. Late Tuesday, the owner of the pipeline, Houston-based Plains All American Pipeline, released a statement saying the exact amount of oil released is unknown and that it is working to begin cleanup and remediation efforts.
Pipeline Spews 21,000 Gallons of Oil Along California Coast – After people reported a foul smell, Santa Barbara first responders found an onshore pipeline spilling into a culvert and then into a storm drain that empties into the ocean. It was shut off by a Coast Guard crew about three hours after discovery. “Channelkeeper is sickened to learn of the oil spill in the Santa Barbara Channel and is extremely concerned about its inevitable impacts on water quality and marine life,” said Kira Redmond, executive director of the environmental watchdog group Santa Barbara Channelkeeper. “We will be out on the water to investigate the extent and impacts of the spill, monitor the containment efforts, keep the public updated, provide any assistance we can with the clean-up and ultimately ensure that the responsible party cleans up the oil that has marred our precious beaches, ocean and marine life.” That “responsible party” is Houston-based Plains All American Pipeline. It issued a statement saying, “Plains deeply regrets this release has occurred and is making every effort to limit its environmental impact.” “Oil spills are never accidents. They are the direct result of substandard oversight of fossil fuel companies who put their profits above human and environmental impacts,” Greenpeace Executive Director Annie Leonard said. “Now is the time for our leaders to take responsibility for the oil companies they let run rampant in our country. This doesn’t have to be our future. If our leaders don’t have the courage to stand up to the oil industry, we’ll continue to see spills from California to Alaska and beyond. We must demand better from President Obama as he looks forward in greenlighting risky drilling projects like Arctic drilling that endanger our oceans and the climate.”
21,000 gallons of crude oil leaked near Santa Barbara County beaches - A ruptured pipeline near Santa Barbara leaked an estimated 21,000 gallons of crude oil Tuesday, some of which flowed into the ocean and left a thick coat of black tar along the county’s pristine shores, authorities said. The rupture, located along an 11-mile long underground pipe that’s part of a larger oil transport network bound for Kern County, was first reported about noon after a woman at Refugio State Beach in Goleta smelled the crude’s noxious fumes. Coast Guard crews stopped the leak by 3 p.m., said Coast Guard Petty Officer Andrea Anderson. It’s unclear what caused the break in the pipeline. After flowing from the pipeline, crude pooled in a culvert before spilling into the Pacific, where it created a four-mile-long sheen extending about 50 yards into the water. Officials said winds could send the oil another four miles south toward Isla Vista. The pipeline, built in 1991 and designed to carry about 150,000 barrels of oil per day, is owned by Houston-based Plains All American Pipeline, which said in a statement that it shut down the pipe. The culvert was also blocked to prevent more oil from flowing into the ocean, the company said. By late Tuesday, a thick layer of crude had begun to wash ashore, with black tar smearing the rocks as the brackish tides arrived. “It is horrible,” said Brett Connors, 35, a producer from Santa Monica who said he spotted sea lions swimming in the oil slick. “You want to jump in there and save them.”
Cleanup crews hit beaches near Santa Barbara after oil spill: Cleanup crews fanned out Wednesday along a stretch of scenic California coastline stained by thousands of gallons of crude oil that spilled from broken pipe and flowed into the Pacific Ocean. Workers from an environmental cleanup company strapped on boots and gloves and picked up shovels and rakes to tackle the gobs of goo stuck to sand and rocks along Refugio State Beach on the southern Santa Barbara County coast. The accident happened on the same stretch of coastline as a 1969 spill, which was the largest ever in U.S. waters at the time and is credited with giving rise to the American environmental movement. Members of the International Bird Rescue organization were also on hand Wednesday to clean any birds that become covered with oil, though none were immediately spotted in the calm seas that produced only small waves. The broken onshore pipeline spewed oil down a storm drain and into the ocean for several hours Tuesday before it was shut off, creating a slick some 4 miles long about 20 miles west of Santa Barbara. Initial estimates put the spill at about 21,000 gallons, but that figure would likely change after a Wednesday morning flyover gave a better sense of the scope,. Authorities responding to reports of a foul smell near Refugio State Beach around noon found a half-mile slick in the ocean, county fire Capt. Dave Zaniboni said. They traced the oil to the pipeline that spilled into a culvert running under a highway and into a storm drain that empties into the ocean. The 24-inch pipeline was shut off about three hours later. It’s owned by Plains All American Pipeline, which said it stopped the flow of oil and blocked the culvert.
California oil spill: Up to 105,000 gallons lost - (CNN)—Oil pipeline company officials said Wednesday that as many as 105,000 gallons of crude oil may have spilled from a ruptured pipeline on the California coast. The 24-inch pipeline ruptured along the Santa Barbara coast, leaking the oil near Refugio State Beach, a protected state park, just before Memorial Day weekend marks the start of the summer tourist season. Houston-based Plains All American Pipeline based the estimate -- what it called a worst-case scenario -- on the typical flow rate of oil and the elevation of the pipeline, said Rick McMichael, the company's director of pipeline operations. The pipeline is still underground, so it will take a few days to determine how much crude oil was actually spilled. McMichael told reporters an estimated 21,000 gallons of crude had gone into the Pacific Ocean. The cause of the spill was still being investigated, he said, but there were problems Tuesday morning at two of the company's pump stations. Plains Chairman Greg Armstrong said he was deeply sorry for the spill. "We apologize for the damage that has been done to the wildlife and to the environment, and we're very sorry for the disruption and inconvenience that it has caused the citizens and visitors of this area," he said. Armstrong said his company had been given permission to work through the night on the cleanup. "This spill is unlike ones that we've responded to in the past." said Coast Guard Capt. Jennifer Williams at an earlier news conference. The spill originated inland, where the U.S. Environmental Protection Agency has jurisdiction, but has gone to the shoreline and the water, where the Coast Guard has responsibility -- thus the need for a combined response.
The California Oil Spill Is Even Worse Than We Thought - Gov. Jerry Brown declared a state of emergency in California on Wednesday, after oil spill estimates soared from 21,000 gallons to more than 105,000 gallons. The crude oil spill, from a pipeline along the coast just north of Santa Barbara, has resulted in the closure of two beaches and local fisheries, and damaged the sensitive habitat of endangered birds, the governor’s office said. The spill has also drawn attention to the safety record of company that operates the pipeline, Plains All American Pipeline. Responders, including the Coast Guard, U.S. Environmental Protection Agency, California Department of Fish and Wildlife, and Santa Barbara Office of Emergency Management, have been removing buckets of oily sludge from the beach, coastal areas, and water. Coast Guard Capt. Jennifer Williams told reporters that 7,700 gallons of “oily water mixture” has been removed. El Capitan Beach, a state park, is closed until at least Thursday. Refugio State Beach is also closed, and a fishing ban is in place for a half-mile out to sea, for a mile up and down the coast. Wildlife is not taking this well. The Audubon Society reported that brown pelicans in the area have been killed, and dead, oil-sodden lobsters, octopus, and other marine animals have washed up on shore. Federal records show that the Plains All American Pipeline has had 175 safety and maintenance infractions since 2006, the Los Angeles Times reported. The Times’ analysis found that “Plains’ rate of incidents per mile of pipe is more than three times the national average.”
State of Emergency Declared: California Oil Spill Now Estimated at 105,000 Gallons -- Tuesday afternoon, news spread of the latest oil-related tragedy to occur in the U.S.—an oil pipeline ruptured in Santa Barbara County in Central California, along the Refugio State Beach coastline. Though the pipeline was on land, it was found to be leaking into a culvert that eventually emptied into the ocean. By the time the pipeline was shut off, oil had been spilling into the sea for at least three hours.Oil from a broken pipeline coats miles of the Pacific Ocean and shoreline near Goleta, Calif., May 20, 2015, after a 24-inch underground pipeline broke May 19th and leaked into a culvert leading to the ocean. Houston-based Plains All American Pipeline said an thousands of gallons of oil were released before the pipeline was shut down. Photos by Jonathan Alcorn/Greenpeace. As of Tuesday evening, officials claimed that an estimated 21,000 gallons had spilled into the ocean in an oil slick that was four miles wide. Unfortunately, as of yesterday morning, the slick had spread to at least nine miles wide, as the winds and tides did what they do. And now, a new estimate says that up to 105,000 gallons of oil might have been spilled. Yesterday, California Gov. Jerry Brown declared a state of emergency due to the effects of the oil spill on Santa Barbara County.
California Governor Declares State Of Emergency As Santa Barbara Oil Spill Worsens Dramatically - What was originally thought to be around 21,000 barrels is now over 105,000 barrels of oil spilled on to the pristine beaches of Santa Barbara County. On Wednesday,Gov. Jerry Brown declared a state of emergency for Santa Barbara County to free up resources to respond to the spill, which as the following horrible images show, is far worse than it initially appeared. After seeing all of that, it is no wonder that OilPrice.com's Charles Kennedy believes this latest oil pipeline spill could galvanize environmentalist opposition. A pipeline in California broke and spilled oil into the Pacific Ocean on May 19. Oil washed up on the shores in Santa Barbara County with the slick extending an estimated 4 miles. While data is preliminary, the pipeline may have spilled 21,000 gallons, or 500 barrels, perhaps even more. For now, it is unclear what caused the pipeline to rupture. The pipeline, owned by Plains All American Pipeline, was constructed in 1991 and has a daily throughput of about 150,000 barrels. “Plains deeply regrets this release has occurred and is making every effort to limit its environmental impact. Our focus remains on ensuring the safety of all involved. No injuries have been reported at this time,” the company said in a statement released early on May 20.
Workers Race to Clean Up Oil Spill on California Coast - NYTimes.com: Cleanup crews wearing white coveralls and masks shoveled oil-soaked mud into plastic bags on Thursday near Santa Barbara, Calif., where a ruptured pipeline fouled beaches just days before holiday weekend crowds were expected to descend on them, a blow to the tourism-dependent city.Thousands of feet of floating booms, and skimmer vessels, have also been deployed to contain the oil from a spill that began Tuesday and protect areas of shoreline where birds nest and marine mammals come ashore. “We’ve got a total of 18 cleanup vessels scheduled today, up from 10 yesterday,” said Lt. Jonathan McCormick of the Coast Guard. On Wednesday, the Coast Guard reported that 272 people were involved in the round-the-clock effort, and on Thursday, Lieutenant McCormick said, “we’re expecting an additional 100 folks in the field.” The increase comes hours after Gov. Jerry Brown declared a state of emergency on Wednesday night, and the owner of the line, Plains All American Pipeline, released its estimate that up to 105,000 gallons of crude oil was released underground, with about one-fifth of that reaching the ocean. Lieutenant McCormick cautioned, “Those are still estimates and it’s still under investigation.” The California Department of Parks and Recreation has ordered the closing of two popular state beaches with campsites that were affected by the sticky, smelly crude, Refugio and El Capitan. The Department of Fish and Wildlife has banned fishing up to a mile on either side of Refugio, and up to half a mile offshore. On Thursday morning, officials of multiple state and federal agencies, as well as the pipeline company, took a helicopter flight over the affected area to assess the spread of the oil — late yesterday, the Coast Guard said oil slicks in the water stretched nine miles — and determine whether the beach and fishing restrictions should expand.
As Santa Barbara oil spill cleanup continues, damage still being assessed - Environmental specialists on land and in boats worked along a picturesque stretch of shoreline north of Santa Barbara this morning to clean a portion of the Pacific Ocean fouled by thousands of gallons of oil from a broken pipeline. The 24-inch pipe owned by Houston-based Plains All American Pipeline ruptured about noon Monday, and 21,000 gallons flowed into the sea before workers could seal the breach. The break occurred on land, but the oil flowed into the ocean via a culvert that connected to a storm drain. Workers from the pipeline company stopped the flow by blocking the culvert. The oil poured into the Pacific along Refugio State Beach. It’s the same area that was fouled in 1969 by a larger spill, an event that helped spawn the environmental movement. Clean Oceans, a non-profit group, was hired to deal with the oily water, and Patriot Environmental is dealing with the damage on shore, said Susan Klein-Rothchild, spokeswoman for the Santa Barbara County Emergency Operations Center. “There are three priorities right now. One is the safety of the responders and the public, two is the impact to the wildlife and the environment and three is cleaning up the spill,” she said. All three are happening simultaneously.”
Winds, choppy seas slow cleanup of California oil spill - — Weather has slowed cleanup efforts at the site of an oil spill that fouled a California shoreline. The National Weather Service says gusty winds are whipping up waves as high as 4 feet early Friday off Santa Barbara County. Several days of calm seas had helped crews. A small watercraft advisory was issued overnight and Santa Barbara news station KEYT-TV says oil skimming vessels were brought in late Thursday because of bad weather. Crews have yet to excavate the section of pipeline that broke Tuesday, spilling an estimated 105,000 gallons of crude. About 21,000 gallons is believed to have made it to the sea and split into slicks that stretched 9 miles along the coast. As of Thursday, more than 9,000 gallons had been raked, skimmed and vacuumed up.
Huge Oversight Gap on Refugio Pipeline in Santa Barbara County -- One of the big surprises to emerge out of the most dramatic oil spill to hit the South Coast this century is that the Plains All American Pipeline is the only pipeline in all of Santa Barbara County not to have an automatic shut-off valve. Not coincidentally, it happens to be the only pipeline over which the County Energy Division has no safety and inspection oversight authority. “We’re flying blind,” said County Energy Division czar Kevin Drude. That’s because All American Pipeline (Plains hadn’t bought it yet) took Santa Barbara County to court more than 20 years ago to restrict the county’s legal authority to inspect X-rays of the pipeline welds. It won. The consequences of that victory appear to be bearing bitter fruit. Because the county was denied the regulatory authority to require that Plains equip its pipeline with an automatic shut-down valve in case of a rupture, The Santa Barbara Independent has discovered, the Plains pipeline is the only pipeline in the county without this key safety feature. Instead, the Plains pipeline must be shut down manually in case of such emergencies. According to Drude, the equipment the county requires — known as SCADA — of other pipeline operators is so sensitive it can detect the loss of 20 barrels of oil over a 20-hour period. By contrast, the Plains pipeline leaked about 2,500 barrels worth of oil in a matter of a few hours before the company’s crew manually shut it down. Exactly how and why the Allied Pipeline — by far the biggest in the county — was built without this critical safety feature remains uncertain. The few people still on the scene who were involved back then have, at best, hazy recollections. What is clear is the vehemence with which All American Pipeline fought any intrusion of county oversight.
Oil shouldn't spoil vacations for California beach tourists — Images of sticky black beaches and stories of the stink of oil from a broken coastal pipeline shouldn’t force canceled plans for the vast majority of tourists planning ocean vacations in California. People who had immediate plans at two popular state-owned beaches — Refugio and El Capitan — need to make new ones, as those two spots in the immediate line of the oil spill in Santa Barbara County are closed through Memorial Day weekend and the coast highway next to them has seen slowdowns for the cleanup operations. However, they represent just a segment of the beaches in Santa Barbara County, the pristine and often pricey stretch of coastline whose boosters bill it as “America’s Riviera.” The tourism group Visit Santa Barbara and its members are trying to spread the word that almost all of the area, including every hotel and resort, is open for business, spokeswoman Karna Hughes said Thursday. “The spill hasn’t reached the waters off Santa Barbara,” Hughes said. The slick from the pipeline, which burst and spewed into the ocean on Tuesday, now covers nine miles of ocean, but it’s diluting as it spreads and is still 15 miles from Santa Barbara itself. A handful of reports of bits of oil reaching further south may be the naturally occurring seepage that happens in the oil-rich area. “There are some scattered tar balls but those may not even be associated with this spill,”
Oil spill cleanup an eerie sight - There wasn’t a surfer, swimmer or camper in sight Wednesday. Instead, there were emergency vehicles, industrial-sized black dumpsters, supply trucks, a makeshift command post, ranks of port-a-potties and wash stations, and crews of white-helmeted workers clad in white, head-to-toe protective gear. It didn’t look like a holiday. It looked like a MASH unit on the moon. Rocks on the beach were splattered in black. Mild breezes riffled the fronds but the smell in the air was more loading dock than lotus. With shovels in hand, workers slowly tromped along the shore. They dug into inky mud and dumped each shovelful into hundreds, then thousands of clear plastic bags. At points, they formed human chains, passing the heavy loads from one hand to the next, and, finally, into dumpsters. Approached by the many journalists beside the fouled beach, workers politely declined to comment. On the sand, Peuyoko Perez, an auto parts driver from Ventura, sang a mournful ode — a “willow song,” as he called it — in a Chumash dialect. He said he was paying homage to nature and to the sea, and was pleading for willow-like flexibility among conflicting interests in cleaning up the mess and preventing future disasters. “This is an attack against the land, animals, fish, human beings — and I’m tired of it,” he said. Amid darkened clusters of seaweed, he looked out at the ocean. He said he planned to burn sage later in the day for cleansing.
Cleanup continues at oil train wreck site in North Dakota — Cleanup efforts continue at the site of a recent oil train derailment in North Dakota. Amy McBeth with BNSF Railway tells the Minot Daily News crews in Heimdal are cleaning the tank cars, which will then be scrapped. The train hauling Bakken crude derailed May 6. No one was hurt but residents of Heimdal were evacuated for about a day. The newspaper reports the train consisted of 109 cars, of which 107 were loaded with crude oil and two were loaded with sand. The six tank cars that exploded into flames were a model slated to be phased out or retrofitted by 2020 under a recently announced federal rule. McBeth says crews are “containing and recovering product from the slough” and will be monitoring the area for several months.
9 oil well deaths lead to warning about inhaling chemicals — Federal officials are warning about the dangers of inhaling chemicals at oil wells following the deaths of nine workers over the last five years. All of the deaths involved workers at crude production tanks. Colorado and North Dakota each had three deaths and Texas, Oklahoma and Montana each had one death. The Denver Post reports that most were originally considered to be due to natural causes or heart failure. But the men were later found to have all inhaled toxic amounts of hydrocarbon chemicals after either taking measurements of oil or other byproducts in the tank or takings samples of oil for testing. The industry says the sudden rise in deaths could be linked to the number of inexperienced workers brought in to work during the energy boom.
"Oil To Die For" explores the Bakken, the deadliest workplace in America (Video) - While working the night shift at a North Dakota oil well site, a 21-year-old Montana man climbed to the top of an oil storage tank to check its levels. Upon opening the hatch Dustin Bergsing was inundated by toxic fumes and, according to North Dakota state forensic examiners, died from the inhalation of petroleum vapors. The story has become tragically commonplace since the beginning of the shale revolution in western North Dakota. Since 2008, over 50 men have died at North Dakota oilfield sites. Todd Melby, a reporter, interactive producer and filmmaker best known for “Black Gold Boom,” a public media project examining North Dakota’s oil activity, began covering events in the oil patch in 2012. The frequency of short format reporting on these incidents prompted him to investigate beyond a worker’s name, age and cause of death. In an effort to show the human toll of the oil boom, Melby created an interactive documentary titled “Oil to Die For.” While exploring how North Dakota became the most dangerous place to work in America, Melby brings the oil patch alive and allows users to access court documents, watch interviews and experience the environment at their own pace. During an interview with Minnesota Public Radio, Melby said, “When people criticize fracking and the oil industry, they focus on the environmental hazards, and there are lots of those. But people aren’t really focusing on those human stories. There are men who are dying at alarming rates in North Dakota and that deserves to be paid attention to. Those lives are important.” To experience the interactive documentary “Oil to Die For,” click here.
ND approves two Bakken pipeline projects - Two pipeline projects have been approved by the North Dakota Public Service Commission after the company involved assured that leak detection will be enhanced. Following a large saltwater spill, Meadowlark Midstream told state officials that the company would improve leak detection in its transport systems. State commissioners granted approval to a 46-mile crude oil pipeline in Divide and Burke counties as well as the conversion and extension of an existing 10-mile pipeline in Williams County, reports the Forum News Service. The 46-mile pipeline will carry crude oil produced in the Fortuna area to the Basin Transload Facility located outside Columbus. The transmission line is capable of carrying up to 25,000 barrels per day and could eventually haul 50,000 barrels per day. The smaller project in Williams County will add four miles of new pipeline to an existing gathering line which will transport crude oil from a station in Epping to the Little Muddy Creek Station. Early this year, Meadowlark Midstream was found responsible for a pipeline spill near Williston. The spill released approximately 3 million gallons of saltwater (also known as brine), a by-product of the oil and gas drilling process, which contaminated waterways including the Blacktail Creek. FNS reports that a company representative told state commissioners that after evaluating the incident, measures had been taken to improve pipeline monitoring. Additionally, the company asserted that operating crude oil pipelines carry less risk due to being constructed with steel instead of composite materials. Also, the crude pipelines have fewer inlets than the saltwater systems, making them easier to monitor.
Enbridge: Bakken pipeline to be completed by 2017 -- Enbridge may soon double the amount of oil it exports from North Dakota once the Sandpiper Pipeline comes online, reports KX News. Preliminary construction of the 600-mile pipeline will begin in North Dakota this summer with more than 3,000 people working on the project. The current timeline for completion projects the line will begin moving 225-thousand barrels of oil per day in 2017. The new pipeline will expand upon Enbridge’s current Bakken pipeline network and will create a new route, carrying more than double the company’s current transportation capacity. As reported by KX News, Enbridge North Dakota Director of Operations Bob Steede said, “The sandpiper pipeline starts in the Tioga, North Dakota, area, roughly follows … our existing pipeline network, comes to Clearbrook, Minnesota, and then works its way to Superior, Wisconsin.” Groundwork on the project will begin in North Dakota this summer, as well as upgrading current facilities and installing new pump stations near Berthold, Stanley and Beaver Lodge. Steede noted that Superior, Wisconsin, is a significant North American pipeline hub and that “the benefit of pipelines is that they are historically a safer alternative for [oil] transport.” Although the pipeline has been approved in North Dakota, the project has yet to be approved in Minnesota, delaying construction about a year. Last month, however, a Minnesota judge recommended approval of the pipeline. Steede added that completion of the pipeline is important, despite the current decline in oil prices. “Our existing pipeline is currently full, so with lower oil prices operating costs are looked at more seriously and the pipeline is the economical way to transport crude oil and help the producers out,” he said. To read the full report, click here.
Coast Guard: Fire on gulf oil platform; 28 evacuated - — The Coast Guard says 28 workers were evacuated from an oil production platform off Louisiana’s coast after a fire broke out. A Coast Guard news release says the fire was reported at 2:50 a.m. Friday near Breton Island, which is close to Louisiana’s southeastern coast. Production was shut down and no injuries have been reported. The Coast Guard reported a light sheen of oil could be seen from the air along a more than one-mile stretch of water. Also, the news release said, about 4,000 barrels of crude oil is stored on the platform. It was unclear whether the fire was out or under control at mid-morning. The cause of the fire was under investigation.
Dolphin die-off in Gulf of Mexico spurred by BP oil spill - scientists - – A record dolphin die-off in the northern Gulf of Mexico was caused by the largest oil spill in U.S. history, researchers said on Wednesday, citing a new study that found many of the dolphins died with rare lesions linked to petroleum exposure. Scientists said the study of dead dolphins tissue rounded out the research into a spike of dolphin deaths in the region affected by BP Plc’s oil spill that was caused by the 2010 Deepwater Horizon oil rig explosion. Millions of barrels of crude oil spewed into Gulf waters, and a dolphin die-off was subsequently seen around coastal Louisiana, Alabama and Mississippi, according to the National Oceanic and Atmospheric Administration (NOAA). “Dolphins were negatively impacted by exposure to petroleum compounds,” from the spill, said Stephanie Venn-Watson, a veterinary epidemiologist at the National Marine Mammal Foundation and lead author of the study published in the scientific journal PLOS ONE. “Exposure to these compounds caused life-threatening adrenal and lung disease that has contributed to the increase of dolphin deaths in the northern Gulf of Mexico,” she added. More than 1,200 cetacean marine mammals, mostly bottlenose dolphins, have been found beached or stranded since the spill, according to NOAA, which has declared an ongoing “unusual mortality event” under 1972 Marine Mammal Protection Act.
Record Dolphin Die-Off Linked to Gulf Oil Spill -- It was more than five years ago when the Deepwater Horizon offshore oil rig in the Gulf of Mexico blew out, spewing an unknown amount of oil. The April 2010 accident was the worst oil spill to ever occur in U.S. waters and it had far-reaching impacts on the region’s economy and ecosystems that continue to this day. Now a newly released study, funded by the Deepwater Horizon National Resource Damage Assessment, which includes the National Oceanic and Atmospheric Administration(NOAA), National Fish and Wildlife Foundation, BP (the oil company responsible for the spill and others) details the disastrous impact for the spill on the health and mortality of dolphins in the Gulf. The study analyzes what it calls “an unusual mortality event (UME)” among dolphins off the coast of Louisiana, Alabama and Mississippi between February 2010 and 2014. More than 1,300 dolphins are estimated to have died. “The Deepwater Horizon oil spill was proposed as a contributing cause of adrenal disease, lung disease and poor health in live dolphins examined during 2011 in Barataria Bay, Louisiana,” said the study. It also analyzed dead dolphin carcasses stranded in the three states between June 2010 and December 2012 and compared the analyses to dead, stranded dolphins found outside the area or prior to the oil spill to come to the conclusion that the die-off was unprecedented and the result of an adrenal gland condition never previously seen in dolphins in the region that made them susceptible to pneumonia.
'Shell no': Hundreds take to boats in Seattle to protest Arctic drilling - Hundreds of activists decked out in neoprene wetsuits and life jackets took to the waters of Elliott Bay on Saturday. In kayaks, canoes, paddleboards and other vessels, they sent the message that Royal Dutch Shell should cancel its plan to drill in the Arctic Ocean. The “Paddle in Seattle” – a daylong, family friendly festival in a West Seattle park and an on-the-water protest by “Shell no” kayaktivists – was held only blocks from where Shell’s Polar Pioneer drilling rig is docked at the Port of Seattle’s Terminal 5. The brightly colored boats lined the grass as paddlers loaded gear while lights on the towering rig twinkled in the background. Once out on the water, kayakers gathered in formation and hoisted signs and banners that read: “Climate Justice”, “Oil-Free Future”, “Shell No, Seattle Draws The Line”, and “We can’t burn all the oil on the planet and still live on it”. Many had posters or red scarfs that had the Shell logo with crossed kayak paddles underneath – resembling the skull-and-crossbones image. Eric Day, with the Swinomish Indian Tribe, was one of many Native American paddlers who brought their canoes to the event. Drilling in the Arctic would hurt those who live off the land, he said. “This is our livelihood. We need to protect it for the crabbers, for the fishermen,” Day said. “We need to protect it for our children.” Annie Leonard, executive director of Greenpeace USA, said there is a long list of reasons why drilling in the Arctic is a bad idea. The focus should be on renewable energy in this time of climate change, not dirty fuels, she said. Greg Huyler, a 51-year-old scuba diver from Yakima, Washington, stood on the sidewalk and shook his head in opposition to the event. “It’s a bunch of crap,” he said. “The problem is, all of these kayaks are petroleum products, and they’re going to gripe about drilling for oil. And 90% of them drove here in cars that use petroleum products.”
Kayaktivists Vs. A Massive Oil Rig: Inside Seattle’s Fight Against Shell’s Arctic Drilling Plans -- On Saturday, they came by sea: hundreds of “kayaktivists” gathering around a newly-arrived, massive offshore oil drilling rig in Seattle’s Elliot Bay. On Monday, they came by land, with an estimated 700 people blocking the road to the Port of Seattle’s Terminal 5 for about six hours. Their goal? Disrupt access as the rig attempted to prepare for departure to Alaska in Shell’s bid to start drilling for oil in the Arctic. Do it long enough to cause a delay that shortens the already-short drilling window during the Arctic summer. The effort was organized by ShellNo, “a coalition of activists, artists, and noisemakers battling Shell in Seattle.” A broad array of local groups, as well as some who came down from Alaska, have turned what would have been a simple drilling rig transfer into a rallying cry for climate change and the Arctic. “To be honest, this has been something of a surprise to me,” said Emily Johnston of 350 Seattle, one of the coalition’s partner organizations. “I’ve never seen anything like this. When the Kulluk [a Shell Arctic drilling rig] was here in 2012 there was nothing like this here.” “Part of our goal is to delay them as long as possible because the drilling window is quite small,” Johnston said. Shell has spent well over $5 billion in its effort to try to explore for oil in the rapidly melting Arctic Ocean, attempting to make progress for several years and thus far failing miserably. In 2012, the oil giant hit delay after delay: its oil spill recovery barge failed to meet code, one rig went out of control in Dutch Harbor after slipping anchor, they postponed exploratory drilling until 2013 after just drilling two preparatory wells, and another rig (the aforementioned Kulluk) was nearly lost after it ran aground in harsh weather while heading south for the winter.
Shell Oil’s Cold Calculations for a Warming World - Last week, when the Obama administration gave tentative approval to Shell Oil’s plan to return to the Arctic after its disastrous attempt to find oil there in 2012, I found myself thinking of a conversation I had several years ago with a man named Jeremy Bentham. Bentham leads Shell’s legendary team of futurists, whose methods have been adopted by the Walt Disney Company and the Pentagon, among others.The scenario planners, as they call themselves, are paid to think unconventional thoughts. They read fiction. They run models. They talk to hippies. They talk to scientists. They consult anyone who can imagine surprising, abrupt change. Then the oil company readies itself, as best it can, for all of them. In early 2008, weeks before Shell bid a record-breaking $2.1 billion on oil leases in the melting Arctic Ocean — the basis for the newly approved drilling plan — the company’s futurists released a new pair of scenarios describing the next 40 years on Earth. They were based on what Bentham called “three hard truths”: That energy demand, thanks in part to booming China and India, would only rise; that supply would struggle to keep up; and that climate change was dangerously real. Shell’s internal research showed that alternative energy systems — wind, solar, carbon capture — would take decades to make just a 1-percent dent in our massive global energy system, even if they grew at 25 percent a year. “It takes them 30 years to just begin to start becoming material,” Bentham explained to me. One scenario, called “Blueprints,” painted a moderately hopeful vision of green energy and concerted action within the constraints of technological change, of a swiftly rising price on carbon emissions as the world comes together to remake its energy systems. In this vision of the future, there is active carbon trading. There is a strong global climate treaty. There is still far more warming than society can easily bear — approaching 7 degrees Fahrenheit — but the world still averts the very worst of climate change.
Canadian Aboriginal Group Rejects $1 Billion Fee for Natural Gas Project - — A small aboriginal community in British Columbia has rejected a $1 billion payment for a natural gas project, the latest setback for the Canadian energy industry’s effort to bolster exports.A group led by the Malaysian energy company Petronas had offered the money to the Lax Kw’alaams Band, to help push through a plan to build a liquefied natural gas ship terminal near their remote community. It is part of an overall pipeline and gas drilling project that the group, Pacific NorthWest LNG, values at 36 billion Canadian dollars.The community, which has about 3,600 members, has consistently rejected the plan over concerns that it would harm fish habitats, particularly for salmon. After six public meetings over the issue, the band council voted against the payment.“Hopefully, the public will recognize that unanimous consensus in communities (and where unanimity is the exception) against a project where those communities are offered in excess of a billion dollars, sends an unequivocal message this is not a money issue: This is environmental and cultural,” Garry Reece, mayor of the band, said in a statement announcing the vote on Wednesday.Canada’s strategy to increase gas exports has been running into challenges on several fronts.Keystone XL, a pipeline that would carry Canada’s oil sands to the American gulf coast, remains stalled in Washington. Other aboriginal groups have effectively blocked an oil sands pipeline project in British Columbia, the Northern Gateway.Now, the liquefied natural gas project may also be in limbo.
ConocoPhillips says to maintain capex for next 3 years - ConocoPhillips expects to maintain capital expenditure for the next three years, after reducing it earlier this year due to the oil price drop, Chief Executive Ryan Lance told Reuters on Monday. The largest independent U.S. energy company, which cut its 2015 capital budget by $2 billion to $11.5 billion in January, “should hold (investment) flat for three years,” despite a slight recovery in oil prices, Lance said on the sidelines at the Asia Oil and Gas Conference in Kuala Lumpur. Crude prices have almost halved from $115 a barrel in June 2014 as global supplies grew and demand was dented by slowing economies in places like China. ConocoPhillips, like other exploration and production companies, has slashed capital spending in response to persistently lower oil prices, and is further reducing its rig count for fields in the lower 48 U.S. states. Production is expected to fall in the third and fourth quarters in the company’s shale fields, including the Permian in West Texas and the Bakken in North Dakota. But its total output was still expected to rise 2 percent to 3 percent for the year. The company, which is focusing on the Eagle Ford shale in Texas and North Dakota’s Bakken shale, has said it would also spend less on major projects, many of which are nearing completion. ConocoPhillips is also preparing to sell noncore oil and gas producing acreage in the United States, in the latest sign that oil majors are becoming more accepting of lower oil prices.
Energy groups take knife to $100bn of spending after oil rout - FT.com: More than $100bn of spending on new projects by the world’s energy companies has been slowed, postponed or axed following the oil price plunge, evidence of the drastic industry action that will curb output in coming years. Companies including Royal Dutch Shell, BP, ConocoPhillips and Statoil have led moves to curtail capital spending on 26 major projects worldwide, according to analysis commissioned for the Financial Times. The delays and cancellations, many disclosed quietly in recent weeks and months, come amid a wider retrenchment by the industry that has seen thousands lose their jobs and led to a slowdown in the US shale boom. The research by consultancy Rystad Energy shows that producers have targeted some of the highest-cost areas as they have trimmed spending, with nine Canadian oil sands projects put back, each ranging from $1bn to $10bn in planned expenditure. “Things are moving to the right and the particular area that is suffering is western Canada,” said Alastair Syme, energy analyst at Citigroup. “It is one area of the world outside US shale, where companies are actually stopping investment in train.” After reaching $115 a barrel last June, the price of oil plummeted to a low of $45 in January, as surging output of US shale oil and softening demand in Asia stoked a glut in the market. The decline accelerated after Opec, led by Saudi Arabia, decided not to cut production to support prices. Crude has since rebounded to around $66. While the $118bn total expenditure would be spread over several years, the impact of deferring investment on such projects would be to delay future production, with as many as 1.5m barrels a day — nearly 2 per cent of global oil output in 2013 — to come two years later than planned, said Rystad.
Clock Running Out For Struggling Oil Companies - Low oil prices are endangering an increasing number of exploration and production companies. According to a new report from Moody’s Investors Service, the oil and gas industry could see the rate of defaults rise over the next year. The companies in danger of going belly up, not surprisingly, are the ones that already have low credit ratings. Moody’s finds that the default rate for oil drillers with a credit rating of B2 or lower could jump from 2.7 percent to 7.4 percent by March 2016.Moreover, distressed oil companies make up a rising share of overall firms with a poor credit rating – roughly 14.8 percent of the companies with a B3 credit rating or worse covered by Moody’s are in oil and gas. That is up sharply from the 8 percent share that oil firms accounted for in 2014. The credit ratings agency also said that even if oil prices rise to $70 or $75 per barrel, the weakest firms probably won’t be safe. Debt is piling up and banks are starting to restrict capital to drillers that are in the most trouble. Even worse is the fact that there is no certainty that oil prices will rise. Goldman Sachs just predicted that oil prices will fall once again to $45 per barrel. High levels of crude oil inventories and only a slight fall in production thus far likely mean that the glut will persist. More importantly, efficiency gains have lowered the breakeven price for a barrel of crude, meaning that fewer drillers will cut back than the markets had previously expected. With several companies willing to put rigs back into action soon, oil prices have likely topped off for now.
Millions of Barrels of Oil Are About to Vanish - Millions of barrels of untapped oil that U.S. shale drillers discovered during the boom years are about to disappear from their inventories. Six years ago, the industry pushed the Securities and Exchange Commission to make it easier for companies to claim proved reserves for wells that wouldn’t be drilled for years. Some prospects considered sure-things when crude was $95 a barrel are money losers at today’s $60. When crude crashed in 2008, 44 U.S. companies wiped 630 million barrels from their books. Now the stakes are higher. Of all the proved reserves of oil and natural gas liquids found by the 44 companies since 2008, more than half -- 5.4 billion barrels out of the 9.7 billion -- is attributed to wells that don’t exist yet, according to data compiled by Bloomberg. “We’re going to see a lot of proved undeveloped reserves get vaporized,” said Ed Hirs, a managing director at Houston-based Hillhouse Resources LLC, an independent energy company, who also teaches energy economics at the University of Houston. “It could easily be 10 or 20 years before some of these wells get drilled if prices stay at these levels.” The shale boom has pushed U.S. oil production to the highest in more than 40 years and slashed the country’s reliance on imported fuel. The untapped resources are viewed by investors and lenders as a sign of a company’s growth potential, and helped the industry attract more than $230 billion in bonds, loans and share sales since the end of 2008.While undrilled prospects have always been part of oil companies’ inventories, they’ve become a much larger share since the SEC changed the rules. Undeveloped properties account for 43 percent of proved reserves for the 44 companies, the data show, up from 26 percent at the end of 2008.
Where there is oil and gas there is Schlumberger - Schlumberger doesn’t actually own any oil or gas fields itself, meaning it was not on the Guardian’s divestment list of 200 companies as part of its “Keep it in the ground” campaign – but as perhaps the most sophisticated oilfields services company on the planet, it is key to deep-sea drilling, arctic exploration, re-fracking (a bid to “stimulate” a dwindling fracking site to boost its production) and more, and works with many of the nationally-owned oil companies that hold most of the world’s reserves. It does all this with a huge £114m investment from the Wellcome Trust, and the Gates Foundation Trust also holds a shareholding of more than $3m in the company. Schlumberger may lack the public profile of its rival in the field, Halliburton – which became notorious among campaigners in the aftermath of the war in Iraq, especially through its ties to controversial former US vice-president Dick Cheney – but it’s bigger than it by far. Schlumberger is valued at almost three times its US-owned rival, and has around 35,000 more staff. One of Schlumberger’s tricks of the trade is its near-statelessness. Unlike Halliburton, it is not US-owned. Despite being a publicly listed company both in the US and the UK, and having “headquarters” in London (a sleek glass skyscraper just yards from Buckingham Palace), Paris, The Hague and Houston, Schlumberger is formally incorporated in Curaçao, a Caribbean offshore haven with ties to the Netherlands. The company’s complex structure, which routes its operating companies through subsidiaries in the Netherlands, British Virgin Islands and Panama, often works in its favour. One such upside was for years that Schlumberger was able to operate in Iran and Sudan, despite US sanctions, because it wasn’t a US company, and so it did – including directly for the National Iranian Oil Company.
An update on oil prices - Demand for gasoline has picked up significantly recently. In February, U.S. vehicle miles driven hit a new all time high. Gasoline prices have increased too (although some of the increase was due to refinery problems). From the LA Times: Four-dollar gasoline returns to the L.A. area On Friday, the average for a gallon of regular in the Los Angeles area was higher than $4 for the first time since July, according to daily fuel price reports by AAA and GasBuddy.com. The recent surge in regional fuel prices has left local drivers paying more on average than motorists anywhere else in the U.S. Analysts attributed the rise to a supply pinch caused by problems at the state's refineries, and predicted relief may not arrive in time for Memorial Day weekend road trips.This graph shows WTI and Brent spot oil prices from the EIA. (Prices Friday added). According to Bloomberg, WTI was at $59.69 per barrel on Friday, and Brent at $66.81 Prices have increased sharply off the recent bottom, but are still down 40%+ year-over-year.
Signs point to recovery - Oil prices tick upward. The drop in rigs drilling in the Permian Basin continues to flatten. And some observers expect the worst of the layoffs are over. Meanwhile, some of the biggest drillers in the region, Pioneer Natural Resources and EOG Resources, announced plans in the past two weeks to start drilling soon, dependent on price stability and other factors. But there are a number of factors analysts and oil company managers watch that could undermine that recovery. The main ones: production, demand for crude oil, storage capacity and activity of the Organization of Petroleum Exporting Countries. “They are massive overhangs,” said Joseph Triepke, a financial analyst from Odessa and managing director of Oilpro. com. “Oil cannot go to $100 a barrel. One of those three things will break (and) that will prevent a nice recovery and any sort of boom again.” The Permian Basin is the most active oil basin in the country, despite losing half its rigs since the peak of November. There were 233 rigs running in the region on Friday. But the past two weeks saw producers issue a series of optimistic outlooks as prices steadily rise. The national benchmark grew by about 36 percent since mid-March. The regional Plains-West Texas Intermediate benchmark ended at $56.25 per barrel on Friday. Many of the fundamentals that halved prices since the peak of June 2014 remain in place, such as oversupply.
This May Just Be The Start Of The Oil Price War Says IEA - Saudi Oil Minister Ali al-Naimi may be one of the most powerful individuals in the global oil industry. After all, as the top oil official in arguably the world’s most influential oil-producing country, he has enormous influence. But for all his power, is he the most ingenious? That question arises from the release of two reports on the current state of the oil industry that look at whether or not OPEC’s strategy of forcing US shale to cut back is succeeding. The first, issued on May 12 by OPEC, says, in essence, that Saudi Arabia’s effort to keep its own oil production at near-record highs is succeeding in wresting market share back from US producers of shale oil, also called “light, tight oil” (LTO). The second, issued a day later by the International Energy Agency (IEA), agrees, but only up to a point. “In the supposed standoff between OPEC and U.S. light tight oil (LTO), LTO appears to have blinked,” the IEA reported. “Following months of cost cutting and a 60 percent plunge in the U.S. rig count, the relentless rise in U.S. supply seems to be finally abating.” But the report from the Paris-based IEA, which advises 29 industrialized countries on energy policy, also pointed to a rebound in oil prices that could benefit US shale producers. As both the OPEC and IEA reports point out, the decline in US shale oil output has somewhat reduced the oil glut and led oil prices to rally up to about $65 per barrel. And the IEA adds that this brings LTO back above the threshold where its production becomes profitable again. But that, evidently, isn’t good enough for both domestic and foreign shale drillers in the United States, and this is where ingenuity enters the picture. “Several large LTO producers have been boasting of achieving large reductions in production costs in recent weeks,” the report said.
Goldman Sachs Predicting $45 Oil By October -- Rig counts are down by nearly 1,000 (or nearly 60 percent) since hitting a high in October 2014. Spending on some of the world’s largest projects has been cut by a combined $129 billion, a figure that could balloon to $200 billion by 2016. The spending and drilling contraction is finally leading to some small production declines. The downturn in activity sparked optimistic sentiment among oil traders that the markets have adjusted, and could be on their way back up. Not so fast, says Goldman Sachs. The investment bank argues in a new report that not only is the oil rally a bit premature, but that the rally itself will be “self-defeating.” The rally could bring drillers back, but that would merely contribute to a reversal in price gains. More drilling and more production worsen the glut that has not yet been resolved, and prices could be in for a double dip (or triple dip if you count the price declines from February to March 2015). The Goldman Sachs report says that the problem is not just from a surplus of crude, but also a surplus of capital. Access to cheap finance has allowed production companies to stay in the game and continue to drill new wells. Even companies that have seen their cash flows dry up or have run into liquidity problems have still been able to find investors willing to pony up fresh capital. For example, in January and February, the world’s largest oil companies issued $31 billion of new debt, the highest quarterly total on record. Part of the reason for new debt is the need to raise capital – in other words, it is evidence of distress. But new debt was only made possible by the ultra-low interest rate environment. The Federal Reserve has kept interest rates low for many years, hoping to stimulate the economy. But that also has investors struggling to find yield, inducing more risk taking. With safer assets not offering the returns that investors are looking for, large levels of investment and lending are being funneled into oil companies, including some that are in precarious financial positions.
Goldman Can Now Predict The Price Of Oil In 2020 - Back in the summer of 2008, Goldman predicted that oil would rise to $200. Promptly thereafter, oil did rise to $150... and then crashed to $40 when the entire world nearly ended, and when Goldman et al grudgingly accepted a few trillion in taxpayer bailouts so their shareholders could bicker today over the helicopter landing protocol in the Hamptons. Many were so amused by Goldman's epic inaccuracy of being wrong by about 80% just a few months out, that some got the blasphemous idea that Goldman was merely trading against its clients, who even had an internal codename: "muppets." Goldman's historical predictive snafus did not prevent the company to come out in July of 2014 and forecast it that "The long-awaited global recovery appears to be getting on track, lifting commodity demand", in the process completely missing the imminent oil rout which saw oil tumble to $40 yet again. And just to show that predicting 0 out 2 market routs and retaining credibility is about par for Wall Street, overnight the cephalopod company released its latest foreacst. And not just any forecast, but one stretching to 2017, 2018, 2019 and, yes, even 2020! This is what Goldman thinks will happen not this year, not near year, but in five years. We now assume WTI oil prices of $57/$60/$60/$55/$50 in 2016/17/18/19/20. We mark to market 2Q 2015 WTI oil price to $57.50/bbl. Our blended average 2H 2015 WTI outlook remains at $51/bbl.
Oil Prices Will Fall: A Lesson In Gravity - The oil price collapse is not over yet. It is more likely that the Brent price could fall back into the mid-$50 range than that it will continue to rise toward $70 per barrel. That is because oil prices have risen based on sentiment alone. The fundamentals of supply and demand indicate a dismal reality: oil prices will fall and may fall hard in the near term. Our present situation is like that of the cartoon character Wile E. Coyote. He routinely ran off of a cliff and as long as he didn’t look down, everything was fine. But as soon as he looked down and saw that there was no ground beneath him, he fell. Hope and momentum cannot overcome gravity. Neither can ignoring the data.When I look down from $60 WTI and almost $68 Brent, I see no support except sentiment. Like Wile E. Coyote, we need a gravity lesson about oil prices. What goes up for no reason, will come down sooner than later and it may fall hard. The principal reason for the oil-price collapse is a production surplus–more supply than demand for oil. The latest data from EIA (Figure 2) indicates that the surplus is the greatest since the current oil-price collapse began. In other words, the cause of the price collapse is getting worse, not better!
Crude Tumbles Despite 3rd Weekly Inventory Draw & Production Plunge - Following last night's 5.2 million barrel inventory draw reported by API, crude prices surged once again (bouncing off levels before the first inventory draw at the end of April). Consensus appears confused since Bloomberg median estimates were for a 1.75mm draw while survey respondents expected a 3.82 million barrel draw this morning. DOE data showed a disappointly lower than API, 2.67 million barrel draw - which initially sent crude prices tumbling... machines bid them back, and now they are plunging again. Production dropped 1.2% overall - its biggest weekly drop since July 2014. 3rd weekly inventory draw in a row... And production plunged by the most in 10 months... Which sent crude falling - then soaring - then dumping... Retracing gains post API - as it appears the market was disappointed that the DOE draw was not as big as API had predicted.. Charts: Bloomberg
US oil and natural gas rig count drops by 3 to 885 - Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. declined by three this week to 885. Houston-based Baker Hughes said Friday that 659 rigs were seeking oil and 222 explored for natural gas. Four were listed as miscellaneous. A year ago, 1,857 rigs were active. Among major oil- and gas-producing states, Louisiana lost four rigs, West Virginia declined by three and Kansas, North Dakota and Ohio each lost one. New Mexico and Pennsylvania gained three rigs apiece, Arkansas was up by two and Oklahoma increased by one. Alaska, California, Colorado, Texas, Utah and Wyoming were all unchanged. The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.
Oil Prices Unmoved By Oil Rig Count Decline Of Just 1 - The total rig count dropped by just 3 last week - the smallest decline since December - to 885, tracking perfectly with the 4-month lagged oil price we have been showing for 4 months. Oil rigs dropped just 1 on the week to just 659 - the lowest since August 2010. Oil prices are unch.
U.S. oil drillers add rigs in Niobrara and Eagle Ford - Baker Hughes - Oil drillers added rigs in two U.S. shale basins this week, data showed on Friday, the strongest sign yet that higher crude prices are coaxing producers back to the well pad after a slump in activity of nearly six months. Overall, U.S. drillers reduced the number of active rigs by just one this week, oil services company Baker Hughes Inc said. It was the 24th straight weekly decline, bringing the total down to 659, the lowest since August 2010. In the latest week, drillers added three oil rigs in the Niobrara basin in Wyoming and Colorado and two in the Eagle Ford in South Texas, according to the closely followed report. That brought the total number of active rigs up to 22 in the Niobrara and 89 in the Eagle Ford. The Eagle Ford is the nation’s second biggest shale oil field, while the Niobrara is the fourth largest. The Permian basin in western Texas and eastern New Mexico, the biggest and fastest growing U.S. shale oil play, lost one oil rig to 232, the lowest since at least 2011, according to Baker Hughes data going back to 2011. Three other shale formations also lost one rig each this week.
How do you lose 100 million barrels of oil? -- Oil-market watchers are struggling to reconcile the large estimated oversupply in the market with the much smaller buildup of reported inventories and narrowing contango in futures prices. Some blame the barrel counters who compile official statistics on supply, demand and stocks. But the truth is that information on the world oil market is incomplete and it is easy for hundreds of millions of barrels of oil to disappear from the supply chain without being counted. According to the three main statistical agencies, the global market has been oversupplied by between 1.5 million and 2.5 million barrels per day (bpd) since the start of the year. Stockpiles should have increased by between 200 million and 350 million barrels, according to the International Energy Agency, OPEC and the U.S. Energy Information Administration. U.S. crude stocks have indeed increased by around 100 million barrels since the start of the year while China’s stocks appear to have risen by between 50 and 100 million barrels. But that still leaves more than 100 million barrels that have simply vanished from the international statistical system. These lost barrels show up under error terms such as “miscellaneous-to-balance” and “unaccounted for” in reports published by statistical agencies which could be over-estimating supplies, under-estimating demand and inventories, or a combination of all three – because all data on oil production, consumption and stocks, especially outside the United States, is only a very rough approximation. Once we accept that the numbers are fuzzy, it follows that any analysis and forecasts based upon them must be fuzzy too.
India plans new oil subsidy rules to push ONGC stake sale - – India plans to reform rules governing the level of discounts upstream state oil firms including ONGC offer to retailers, a senior finance ministry official said on Friday, a move that could expedite the sale of a stake in the company. The government hopes to sell shares in ONGC and India Oil Corp. to raise about a third of its budget target for asset sales of $11 billion – and reduce its fiscal deficit to 3.9 percent of GDP in the 2015/16 fiscal year. Currently ONGC (Oil and Natural Gas Corp), Oil India and GAIL (India) sell crude and fuels like cooking gas at discounted rates to partly compensate retailers for losses they incur on selling fuels at government-set rates. But the finance ministry and oil ministry are in talks to work out a mechanism for easing the subsidy burden for the upstream companies, Ratan P. Watal, expenditure secretary at the Ministry of Finance, told reporters on Friday. Earlier, sources told Reuters that the oil ministry had set a new subsidy formula for the April-June quarter that would exempt upstream companies from discounting sales of crude oil and refined products if global oil prices are up to $60 per barrel.
OPEC Struggling To Keep Up The Pace In Oil Price War - Goldman Sachs (GS) seems to believe oil must fall to $45 by October (like it previously thought $30 oil was a certainty) to clear the market and rebalance, despite signs that a readjustment is already underway. When was the last time fundaments got ignored and prices went in opposite direction? Asset prices continue to be set by central bankers, and not free markets, so the GS call does make sense if you believe fundamentals don’t matter at all. Still, they should be discussed either way. Rather than being based on the fundamentals, GS, like others, have consistently been off the mark when it comes to oil prices, but refuse to acknowledge it (the agenda at GS has been exposed via Zerohedge). Multiple calls just this week for $45, on top of other economic research, clearly reveal this. I will be first to admit that I thought oil prices short term would peak in $60s and $70s, but I never thought they would retest the lows. Why should they, if all the trends point to markets slowly rebalancing? In fact, there is growing evidence that not only are we slowly rebalancing but the world may actually be running short of oil. According to Reuters, Saudi Arabia has turned down requests from China for more oil, as they are using it for their own domestic refining needs. It goes on to quote: “[a]nother source with a Chinese refinery that takes Saudi oil said Saudi heavy crude was ‘a bit tight’ in May and June.” China was forced to turn to Russia, Oman, and other non-OPEC nations for their needed supply. Why would Saudi Arabia refuse to supply China unless oil was, in fact, tight?